The Purpose Of A Business Plan Business Essay

The Purpose Of A Business Plan Business EssayIn some cases, a melodic phrase plan is created to beg off and illustrate the vision you have for your profession, and to persuade others to help you achieve that vision. To accomplish this, your plan pass on ask to demonstrate on paper that you have a firm visualization of what your crease line is passage to be. It hires to convince others that your business concept gouge be successful and that you possess the expertise-alone or collectively-to as certain(predicate) that it depart be both successful and profit adequate to(p).Why is it importantIt is important to economic consumption a business plan when starting and suck upning the business as it indentifies the business aims and tar take hold ofives, alike it is important to have one as it lead bothow for the business to go back and see if the business is progressing in the developing business and if the business is on the track to achieve the aim.RANGE OF POSSIBLE IDE ASI had m whatever(prenominal) potential ideas of the businesses that I would manage to set up in Lisburn. My most favourite ideas which I was considering to start up arRestaurant In the up-to-date clock in Lisburn there argon some(prenominal) restaurants and there is no which serves multinational identity cards which include European, Asian and American foods. I believe that this business could be successful as many of messs would like to try other nationalities foods. To run this business success overflowingy I leave alone have to create a very warm and welcome premise to which lots of citizenrys get out be able to like it and. Also the service and food leave alone need to be high quality so the customers will love to come back.AdvantagesOriginal menu as no restaurants serves the food I wouldIf the business will gain loyal customers the business will surviveDisadvantagesRisk of non getting into the tasting of localsCompetition with well established restaurantsUnkn a ver local suppliers result qualityInexperienced staffSandwich bar In modern days much peoples atomic number 18 bargaining ready to do foods such as chips, crisps, sweets which atomic number 18 bad for health. My idea is to let adults and children to have a healthy snap off prison term eating fresh ingredients and healthy sandwiches. To survive I will need to provide my business with the equipment such as Toaster, Micro wave, Panini filmr, Serving social unit burning/Cold, Grills, Till and much to a greater extent.AdvantagesDisadvantagesCompetition with well established businessesInexperienced staffUnknown local suppliers product quality hot chocolate graze Many people are in the hurry in these days, where most of them dont have time to consume their breakfast at home. The coffee shop idea will allow to those peoples who have to travel long time to their jobs, to buy tea or coffee and the snack and consume on the centering, this could save enormous amount of time if t hey could decide to do their lunch and coffee themselves. I will have to spend well-nigh of my budget on the equipment where I will need to buy equipment such as coffee machine, cups (glass and plastics), plates and more.AdvantagesDisadvantagesCompetition with well established businessesInexperienced staffUnknown local suppliers product qualityIce Ring Lisburn does not have many attractions in the city, so it could be a unattackable idea to get everyone enjoy their afternoons on the ice cold ring. It could be a very good place to have fun with the family and friends away from their troubles. The business could survive as the only other attractions could be the swimming pool and picture which are situated in the city centre.AdvantagesDisadvantagesExpensive to run and insureLots of health and safety issues will need to be complete.After concluding my potential businesses ideas I had rejected some of the ideas as there was the disaster that they wont survive the kickoff year o f employment.This is the list in order of the businesses I want to operate. The first one is the business I am currently pass for, the last one is the least possible for me to go for.Coffee shopSandwich barRestaurantIce RingAfter knowing what business I am going to open I had thought about the name for it. The name that the most attracts my attention is CS. It is short and easy to remember which is excellent name.LEGAL STATUSthither are several lawful statuses unattached for my chosen businessSolo trader This is when the business is owned and run by one individual however this is mainly the local business and will normally not expand on an international level.Main advantages of a solo trader 100% of control over the business it means that the integral business is controlled by one person only which is mainly owner. Quicker at decision making it allows to easy and fast make decision as there is only one person whom make the decisions and dont have anyone to make the decision s. Can salvage 100% of profit if the business is well operating it correct can make high wage and dont have to share profit with anyone. Local business, therefore loyal customers from that area loyal customers may result in a consistent flow of money into the business.Main disadvantages of a sole trader Unlimited liability this may meant that the owner may lose his personal possessions because of the business depth and cannot pay it back. Heavy stressful workload because it is a solo trader business it means that the one person has to do all of the activities which includes paperwork and more, which could cause stress, about not completing it and of the lack of time. pay problems because the business small and is financed by one person and maybe by a avow loan. The solo trader may face finance difficulties if the business will get into the debt.Partnership a partnership is when between devil and twenty peoples own a business, as there is large number of co-workers each is investing money in to the business and share the profit or loses of the business.Main advantages of a Partnership More peoples investing money because there is many partners the large capital and large funds are raised quickly, this means that the business can easily and faster earn stable finance source than a solo trader. More ideas because there is more than one person who owns the business, each has contrastive ideas how to improve the business. Shared workload as the business has more than one owners the workload can be easy shared between partners which decrease the possibility of stress.Main disadvantages of a Partnership Disagreements as each of the partners have different ideas to improve the business the disagreements can appear as other person doesnt like the idea which is currently discussed. Breakdown in communication this can be cause when one of the partners will decide to go ahead with their own ideas, in which case may cause other departments become confused and may lose the communication between each other. Unlimited liability if the business will be in the debt there is possibility the owners will lose their personal processions to pay back the debt.Over considering different legal status available, I obdurate that the most appropriate status for my business is solo trader. Despise of all the disadvantages. I had chosen this legal status for the reason that I can turn out my self if I can run business on my own. Also I had choose it for the reason the I wont rely on any one with decision making and I will operate the business as I want. I did not choose the partner ship as we may have disagreements which may have effects on business which may lead to close down this is the risk that I dont want to call for, as I may loose lots of my money.RESEARCH COMPREHENSIVE compendiumThe primary question that I had carried out was a questionnaire which I had held in the city centre of Lisburn. I choose this destination as this is where I am hoping to set my business. From the questionnaire I will receive the overview and the thinkings of my future target marketplace.Primary researchThe first question I had asked in the questionnaire was What age group would you be in?Form this question I had found the majority of my target market would come from 18-20 age group. The second popular age group was 21-30age group and 31-40 age group as both has the same percentage.The second question I had asked in the questionnaire was How often to you visit coffee shop?The result was very interesting as 40% of people who had fill in this questinoaire had said that they are visiting coffee shops every day. The 28% said that they are visitgin coffee shop weekly.I also asked if they would be interested if I would provide any refreshments suchas sandwitches and fresh salad. For the pie chart I noticed that 72% of people thinks that this is a good idea.As I know thatthey would like to have a sandwitches and salad I had asked them how much they would like to be charged for them. I had allowed them to choose the costs starting form 1.50 up to 4+. More than 56% said that they prefeer the monetary value to be 2.50 as for this hurt the best igridients can be purchased.As there are many students living in the Lisburn I had asked peoples in their opinion would the discount for students encourage them to go to coffee shop. The 56% of votes said that they would be encouraged to visit the coffee shop.Secondary researchThe UK branded coffee concatenation market continues to expand rapidly, exceeding 3,000 outlets for the first time and an estimated 1.3 billion in turnover as UK consumers taste for coffee bars continues unabated.According to altogetheregria Strategies, the market is direct to nearly double over the nigh decade to reach up to 6,000 outlets and turnover in excess of 2.5 billion within 7-10 years.Growing at more than 15 per cent for the past eight years, UK coffee bar culture has extended well beyond UKs major urban centres and is penetrating smaller towns and the bucolic areas due to phenomenal consumer demand and rapid opening programmes by coffee bar chains Starbucks, Costa Coffee, Caff Nero, Pret A Manger and others. Results from more than 6,300 telephone and opposite interviews with UK consumers (the largest sample ever conducted in the UK) reveal that consumers are visiting branded coffee chains more frequently than ever beforeCoffee shops are now mainstream and form an important part of UK lifestyles with more than 11 million adults visiting coffee shops at least once per week and more than 20 million persons visiting the venues at least once per monthAIMS/OBJECTIVES OF A BUSINESSAn aim is a long term intention that business wants to achieve. All businesses have different aims and sometimes some businesses have more than one. To achieve the aims an objectives are set. Objectives are the goal outcomes or targets. Many businesses are using fresh method to set their objectives ach ievable.Smart stands forSpecific they must set out clearly what a business sis aiming to do.Measurable they must be equal to(p) of existence metAchievable everyone involved in reaching the objective must agree with the objective and understand what is meant by it.Realistic the objectives must be achievable from the source that are available form and for the state of the market conditionsTime specific the objective should state over what time of period the objective has to be achieved.Many businesses create a mission statement, which states the purpose of the business and it values. It is meant to s require both the aims of the business and the provide a vision of the business for the stakeholders.The aim for my business isAchieve the loyal customers by offering an efficient and reliable service at a low cost.The objectives for my business areSurvive when I first start outGet loyal customers and staffTo break dismantle within the first yearBecome market leader within next five yearsPROMOTION STRATEGIESMarketing mix refers to the primary elements that must be attended to in order to properly market a product or service. Also known as The 4 Ps of Marketing, the marketing mix is a very useful, if a bit general, guideline for understanding the bedrock of what makes a good marketing campaignElements of the marketing mix are often referred to as the four PsProduct A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units.Price The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customers perceived value of the product. stead Place represents the view where a product can be purchased. It is often referred to as the distribution channel.Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements a dvertising, public relations, word of mouth and point of saleThis is the marketing mix for my business considering 4psProductThe product which I am going to provide is a round-eyed range of coffees, teas, snacks, sandwiches and fresh salads and fizzy drinks.PriceBecause of the recession not many peoples will allow them selves for the take away coffee. There fore I will need to sell my product in the lowest price as possible. All the hot drinks will be sold between 2 4, all the soft drinks 1 and the snacks, sandwiches and salads between 1,50-3.PlaceThe premise which I choose for my coffee shop is located in the centre of the city centre. The premise which I found is for the rental purpose and costs 1,000 per month. This property has 2 grades with reasonable good sizes. The ground floor will be used as a main area of the shop where customers will be served and use the Wi-Fi, where as the first floor will be the office area.PromotionTo promote my business I am going to us local news papers to advertise my coffee shop. To second my promoting method I am going to use leaflets which will be delivered by the local postman. The leaflet details will include the prices, available coffees types, and location and contact details.LIKELY COMPETITORSI discovered my likely competitors by doing research on yell.co.uk and from local knowledge.There are four well established businesses which I will compete with for survival. This areEsquires coffee shopThe house of Vic-RynStreet cafeCoffee IncEach of those businesses are well established and have muckleing customers. Because all of them are mainly located in the city centre the competition will be heavy on me as the premise which I will use form my business is also in the city centre.SWOT ANALYSISSWOT analysis can be defined strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and international factors that are favourable and unfavourable to achieving that objective.SWOT representsStrengths attributes of the person or company those are helpful to achieving the objective(s)Weaknesses attributes of the person or company those are harmful to achieving the objective(s).Opportunities outside(a) conditions those are helpful to achieving the objective(s).Threats external conditions which could do damage to the objective(s).Strengths and Weaknesses can be controlled within the business. It is up to the manager to deal with these at the right time and in the appropriate way.Opportunities and Threats are out of control of the manager. Theyre therefore external.This is my swot analyse for my business CAFE LATTE.StrengthsSit in facilityWi-Fi facilitiesOffering different types of foods and snacksset(p) in the city centreWeaknessesNot well knownCompetition with established businessesOpportunitiesExpand locallyBuy more specious premises al lowing being more welcomeThreatsEsquires coffee shopThe house of Vic-RynStreet cafeCoffee IncSECTION BPHYSICAL RESOURCESPhysical resources are defined as resources that are available to business organisations in the form of buildings and other machineries which are needed for the day to day running of the organisation.To smoothly operate my business I need meet physical requirements which will allow me to survive and operate my business. the equipments which I need for my business are listed bellow.The equipment listItemQuantityUnit PriceTotal PriceTimingBuy/LeaseCounter110,00010,000Start UpBuySeating (chairs and tables)158,0008,000Start UpBuyWater boiler1464.13464.13Start UpBuyCoffee machine25001,000Start UpLeaseCoffee (12 kg)460240Start UpBuyCookery60329.50329.50Start UpBuyKnives, forks and spoons405050Start UpBuyRefrigerated display units12,010.2,010Start UpBuyCleaning fluids6600600Start UpBuyHUMAN RESOURCESHuman resources are known as people employed by a business. This means th at human resources are the number of people working for the business. The number of human resources is related to to the business, for example a small business such as a window cleaning service has small human resources which may include two or five employees. The big international businesses on the other wise, such as Tesco, or Sainsbury are more likely to have thousands or still more workers.Because my business is small and is just starting up I wont need too many human resources.To be able to successfully operate the business I am going to employ 2 full time and 1 part time employees. Each employee will be required to have good communication skills and be able to work in the busy atmosphere. Because I want to encourage my staff to perform on their best abilities I am going to award them by adding additional 1.00 to theirs minimal wage.There are several policies that I will need to take into consideration if I want my business to operate legally and satisfy my customers and staf f.Health and safety issue is the most important regulation which I need to consider. I will be required to make sure that I will create a safe environment for my workers and the customers. If the accident will fall out because of not making any health and safety requirements I can be sued which could cost me money and time, including it could reflect my business reputation.Equal Pay Act, 1970 land up Discrimination Act, 1995 is another important law which I have to make sure I will consider within my business. When I will going to advertise my vacancy I cannot specify what sex I am looking for as this is how the law is broken. I have to make sure that I will give a fair chance for both sexes to try to apply for the job.The National Minimum Wages Act, 1998 this law simply clarified that people cannot be underpaid under the minimum national wage. There are three branches of this legislationBetween 16 and 17 years 3.57 an hourBetween 18 and 21 years 4.83 an hour22 and over 5.80 an hourData Protection Act, 1984 I need to consider this act in order to keep my staff and my business details save. Because I will need to store the private and financial details I will need to make sure that no on unauthorised will have access to these details.Disability Discrimination Act, 1995 I need to make sure that I wont split up any employee because of theirs disability. I am not going to consider the disability in select appropriate employee for my business. The only fair way is by picking the qualifications and experience.RESOURCES AND QUALITYCONSTRAINTS LEGAL AND ECONOMICPestle analysis is one of framework that categorizes environmental influences as political, economic, social and technological forces. Sometimes two additional factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can easily be subsumed in the others.Political influences These refer to government policy such as the degree of intervention in the economy. economic influences These include interest rates, taxation changes, economic growth, inflation and exchange rates.Social influences Changes in social trends can bushel on the demand for a firms products and the availability and willingness of individuals to work.Technological influences new technologies create new products and new processes.Legal influences environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance.Environmental influences these are related to the legal environment in which firms operate.For my business there are several constraints relevant to me are legal, economic, technical, and environmental.Legal constraints The legal constraints that will affect my business are regulations for a contract for example how long is the credit on it. Anther legal constraint would be DPA (Data Protection Act) in the UK gives the right to individual to know which companies hold their perso nal details and they are allowed to ensure that the information is accurate. This data should be also being protected within the business to ensure no one unauthorised will access the personal details.Economic constraints due to the current economy it will be harder for me to get a bank loan. Also because of the recession not every one will be able to open up the take away or sit in coffee.Technical constraints I will need to make sure that all theEnvironmental constraints as I will provide a take away service I will provide with recycle cops which will be easily recycle and good for environment. Also I will provide customers with business plastic take away cups with the lids which will allow them to use it to refill.SECTION CSOURCES OF FINANCEThere are different sources of finance I can use to finance my business. Those sources areMoney from family or friends because I am a sole trader I may be able to borrow money from family or friends without paying interest, which would be very beneficial for me.Bank loan another way to finance my business I may use a bank loan. Loans from a bank or a building society can be expensive as they will include the interest. An agreed amount is borrowed and repaid over a fixed period of time with interest.To start up my business I am going to use the 10,000 that I was left by my grandparents. Although my physical resources of total of 22.694. I decided that I am going to take a bank loan. The loan which I will take will cover both my start up cost and running costs. I am hoping to get a loan that will be for 4-5 years which also will cover the unexpected expenses.The loan which I choose is Platinum Loans. I got a loan for 30,000 and will be repaid by 5 years. The monthly amount to repay is going to be 601.63 and the 7.8 APR which I total I will need to repay 36,098.FORECASTS CASH FLOW AND BREAKEVENSUSTAINING IDEAAfter analysing project figures and the information that I had gathered I can say that the business will make p rofit within the first year.If I would considering expanding my business locally in the future I will need to consider all the major expenses to pay. Into these expenses I am considering a bank loans which will be repaid within 5 years and capital purchase.After two or more years of trading the external factors will need to be considered, as they may change the impact on the business. Those external factors that would change are due to Political, Legal, Social and Economic influencesPolitical influencesLegal influencesSocial influencesEconomic influencesSECTION DBREAK EVEN ANALYSISMost of the businesses frequently want to know the amount of the business need to produce or to reach break raze. If the business has collect the information about fixed costs and variable cost and what process it is going to charge, it will allows to calculate how many units will be required to sell to cover all of its costs. The stage of sales or outputs where total costs are exactly the same as the tot al revenue is called a breakeven point.There are several uses of the break even and the most common one which are used by almost most of the businesses are based onCalculate in advanced the level of sale needed for break evenSee chow changes on the in cost affect the break-even point and profitSee how effect in output affects profit.To calculate a break even point I am going to use following formulaBE= SP-VC/FC.(BE- Break Even, SP Selling Price, VC Variable Cost, FC coiffure Costs).I also used this formula to draw up business break even point graph what will show exactly how much units needs to be sold to break even.Selling priceIs the price that a unit is sold for. Sales Tax is not included the selling price and a sales tax paid is not included as a cost.The selling price of my products is 2,50 per unitVariable costVariable costs are costs directly related to production units. Typical variable costs include direct labour and direct materials.Coffee, Cups, Lead and Sugar the tot al of those materials is 0.40 per unit.Fix costsCost that do not change when production or sales levels do change, such as, rent, property tax, insurance, or interest expense.The total fix cost is 55,934Break even calculationBE= 2.50-0.40/55,934BE = 26,636This is the graph which shows the break even unit point. As you can see to break even I need to sell 26,636 units of coffee in a year. To get more specific figures that 2,220 coffees a month, which I think is achievable. 0RATIO ANALYSISEXCLUSIVE SUMMARYThe business that I had decided to set up is CS which will be located in - in Lisburn. The opening hours will be 8 am to 5 pm form Monday to Friday and 10 am to 3pm in Saturday and Sunday.ProductsThe products that my coffee shop is going to sell is a wide range of coffee, teas, snacks, sandwiches and fresh salads and fizzy drinks. All the foods will be home made which willEmployeesI am going to employ two full times and one part time employee. Each of the employees will be paid 1 ove r their minimal wage, which will allow me to motivate them.FinanceBecause 10,000 which I got from my grandparents will be not enough to start the business I will take the loan. The amount I am taking is 30,000 which will be repaid over 5 year time.CompetitionEsquires coffee shopThe house of Vic-RynStreet cafeCoffee Inc