Free Essay

Applied Business Studies Unit 8

In: Business and Management

Submitted By Kiritosama
Words 13413
Pages 54
Executive summary
Business proposal
The business that I have chosen to do will be a café business that will provide organic product only, the business will be called Pretty Baked. The reason why I have chosen this name is because I want to have a name that is fun to read as this way there is a high chance that people will remember my business name. The main idea of this business is to have a cake café for everyone to sit down with their friends or family to relax and talk while having freshly baked cakes (see appendix 1), croissant (chocolate and butter) a cup of coffee (Flat white, Cappuccino, Americano, Espresso), tea (traditional tea, earl grey) and other drinks such as hot chocolate. The business is based in the Marlow high street (see appendix 2 and 7) I believe that this is a good place to base my business because the high street is a very busy place also near the Marlow bridge so therefore there will be a high chance that I will have higher footfall compare to places outside the high street (see appendix 3 for Marlow population density and appendix 4 show the total population of Marlow from 2010 to 2013). Furthermore the café will be opening at 7 A.M. in the morning until 5 P.M. in the evening, however, on a Sunday the shop will be open later at 10 A.M to 4 P.M. The reason why I have chosen these specific times is because I will be able to maximise the amount of customers as the café will be open during the morning rush hour. This time is normally when people are going to work and are looking for a quick breakfast or a cup of coffee. Also the last main time would be during lunch time where people are out taking a break and to have a quick bite. In addition, some of the cakes are simpler to make, so for these cakes I will be buying them from multiple suppliers (see appendix 22, 23 and 24) I believe this will significantly reduce my cost as I will not have to spend my time buying ingredients and baking cakes.
My café would perfectly fit into this market because it will offer a relaxing environment for customer while they are having their tea. The reason why I believe that my café will offer a relaxing experience for all target market is because I have considered all results gain from my questionnaires (see appendix 5) which suggest that I will have to put work into the appearance of my store if I am hoping to maximise the number of customer visit from all target market. I believe aiming to cover all target market within maidenhead is a sensible target to achieve as a cake/café shop is suited for all, also filling that gap in the market that no one has ever thought of. Although, some people do not like cake but they are still able to come to our café have a cup of coffee or tea to do their work using our free Wi-Fi service.
After doing extensive research over the internet (See bibliography for sources) research has shown that more than 50% of customers stay in café longer because there is Wi-Fi to use. (See appendix 6) This is going to be one of the main benefits to my business and I believe that this incentive will attract a few extra customers for me because according to my recent primary research the only Costa has free Wi-Fi as an incentive. The biggest threat toward my business would be Costa as they are quite near (See appendix 7). Furthermore, Costa have more products to offer as they sell more than just cakes, however the costa prices are quite high with £3 for a cup of coffee and £5 for a small muffin. However, they do not offer high quality organic product to customers. That is why I am planning to charge similar prices for customers for only £1.20 for coffee and £4.20 for cakes I believe that this will work because based on my primary research on my competitors (Costa) have approximately 150-200 people visiting them during the weekdays and around 150-250 during weekends. This leads me to believe that the prices that I have chosen for a newly started business is a reasonable price to start with because the price will attract the customer as it is cheaper than the other café like store.

Unique Selling Point
I believe that my USP (Unique Selling Point) for my business would be to deliver and sell delicious organic cakes and drinks to our customers. Unlike some café or cake selling businesses that sell packages cakes we will make sure my product are in high quality. Reason for this is because I believe that everyone should be able to enjoy high quality cake that has low damage to the body. Whether it is for their birthday or just because they just feel like it. In addition, we will also have a website that will be manage by me, the website will consist of the business homepage, the café opening and closing time, latest promotion, what the café will offer and a tab for customers to order their cakes. I believe this will be one of the best features in the website as the customer will be able to fully customise their cake, this means complete control on what they want in their cake and what they want it to look like. If you look at appendix 8 you will see that the majority of people that took my questionnaires would love to have this feature.

Financial summary
The business financial plan is purely based on primary and secondary research on my competitors, the local area (Marlow), the local community and legal licences. Using all of my research I am able to make the best decision for the business and also a realistic financial plan for the business. However, I will need to take a £10,000 loan for my business start-up; this money will be mainly use to invest in property for the business, the assets for the business and license payment etc. I am planning to payback over the course of 3 years as for the first year of my business start-up I will just be aiming to survive my first year of business start-up.

Marketing Summary
Pretty Baked will be mainly focusing on the middle and upper income market, as these market will be the majority that will consume high quality of product.
Target market
My main target market for this business is the affluent people within Marlow and also the couples/family. The reason why I have specifically chose these two category of people is because Marlow as we all know is a rich area and also with the majority of the town consisting of people that are around 40 so it is fair to say that my business will be more fitting for a more mature individuals (see below on page 11 to 15 for a more detailed target market analysis)

Aims * To make reach breakeven every month. This can be achieved by reducing cost and increase amount of units sold. Also by following the short term objective to try to keep breakeven each month. * To be the number 1 to go to cake business within Marlow. * To be the number 1 to go to café within the local area. * Survive the first year of business start-up by trying to keep monthly breakeven. * To achieve at least 10% net margin at the end of year 1 of business start-up.

Objective * Generate enough income to maintain stable monthly revenue. This could be achieved by first aiming to reach a breakeven point every month. * To try to beat last year turnover by 20% * Have at least 40% of customer’s visits regular customers in the course of a month * To be able to buy a delivery van after year 1 of business start-up. This will rely on how much money I will earn at the end of the year.

| Short term | Long term | End of year | Aims | * To make reach breakeven every month. This can be achieving by reducing cost and increase amount of units sold. Also by following the short term objective to try to keep breakeven each month. | * To be the number 1 to go to café within the local area. * To be able to buy a delivery van after year 1 of business start-up. This will rely on how much money I will earn at the end of the year. | * Survive the first year of business start-up by trying to keep monthly breakeven. * To try to beat last year turnover by 20% | Objectives | * Try to reach breakeven every month. This would mean that I will have to keep close look at how much I am making throughout each week making sure I am earning enough to cover the cost. | * Generate enough income to maintain stable monthly revenue. This could be achieved by first aiming to reach a breakeven point every month. | * To achieve at least 10% net margin at the end of year 1 of business start-up. * Have at least 40% of customer’s visits regular customers in the course of a month. |

Analysis of Aims and Objectives
The reason why I have set my business short term aim and objective to help each other is because to generate profit every month I would first need to concentrate on not losing any profit every month. That is why I believe by setting a goal to reach breakeven every month is a good objective because if I am able to consistently reach breakeven every month there is a higher chance that I will be able to gain profit. The reason why I want to have a steady revenue coming into my business almost every month is ultimately to make as money as I can for the business this will then allow the business to get bigger, but I would not be able to do this if I do not have motivated and committed staff. So not only it is good for me as the owner to get good amount coming into the business every month but it is also good for my staffs because this will mean that I will be able to put money into my staff wages or bonuses as an incentive for them to work harder but are also getting something they want in return. This would also be good against competitors too as this mean that I will be able to attract potential employees, because if the business is earning more profit each month, eventually the business would be able to increase the wages of its employee. Furthermore, the business could potentially gain more customer too as the quality of the customer service go up. This would lead to the business achieving my end of year objective which is by having 40% of customers visit regular customers in the course of a month. The reason why I have set this objective is because I have realised that I would not be able to cover the whole market within the local area with one store. Therefore this would mean that I will need to have as many regular customers as much as possible so that my business would have a steady income so if non regular customers stop visiting it will not doom my business. Furthermore, this end of year objective also intertwines together with my long term objective. Reason for this is because the business will need to have consistence flow of income to be able to have stable revenue monthly. If the visiting rate were to drop and only 20% of regular customer were visiting throughout the month, the business would have an ok steady income for that months. However, it does not guarantee the business producing profits for those months or having stable revenue for the business.
In addition, I want my business to achieve a 10% net margin at the end of the first year of business start-up. I believe that this is a reasonable objective because using the results I have collected from my competitors. I have created an estimate of about 67,000-68,000 people visiting my café a year (see Appendix 9 using this information it helped me calculate these numbers). If this calculation is correct I should achieved this objective. This also leads me to one of my long term objective which is to buy a van for my business after year 1 of business start-up. The reason for this is it would be to maximise my income by start delivering to customer will be able to order cakes instead of coming to the café. Furthermore not only this is good for the customers but this would open up new jobs opening for people as the business would need one more person for delivery service. If my business provides good customer service and good cake deliveries I know that one day my business will achieve what would be the ultimate goal for my business which is to be the number 1 to go to café within Marlow and the number to go to cake business within Buckinghamshire. Although it may seem out of reach now but I know if my business achieve all of my current aims and objectives and future aims and objectives, my business will achieve this goal. I will be able to measure this by keeping in tabs of reviews on the business website and also the amount made each day and monthly footfall. This will give me a clear indication of whether my business is gaining customers or not. But to be able to accurately measure the amount of footfall I am getting I will have to buy a device call the patron counter, this device allow me to monitor people going into the store and going out by using thermal imaging.

Form of ownership
There are many possible type of ownership that I could have for my newly set up business, however the three that I have thought about doing are sole trader, partnership and being a private limited company (LTD).

Sole trader
A sole trader type of business has only one owner but they can have multiple employees if they want. One main advantage is that it is the cheapest and easiest way of setting up a business as the owner gets to keep all of the profits and has full control over the business. Reason for this is that because they are the only one in the business it means that they get to be their own boss and make the decisions on their own. Other advantage for being a sole trader is that the business competitors will not be able to gain information about the business as the business does not have to publish information about itself.
However, there are also disadvantages to this type of ownership. The main disadvantage of this type of ownership is that the owner of the business will have unlimited liability which mean that the owner of the business is responsible for everything. So if the business gets into a debt, the owner will be responsible therefore it is possible that the owner’s personal assets can be taken away in order to meet the liability. This means that the owner may be required to sell their possessions which include their home in order to raise money to the debt. In addition, a sole trader type business may take relatively more time to grow compared to other forms of ownership as money from that goes into the business will only from the owner and no one else as they do not have investors.

A partnership is a business that consists of two or more people that share ownership. Each partner contributes to all aspects of the business, including money, property, labour or skill. In return, each partner shares the profits and losses of the business. However, there are advantages and disadvantages in forming a partnership. One of the main advantages in forming a partnership would be that it is flexible. What this mean is that because the partners have the only say in the way the business is run (without any interference from shareholders) it makes it more flexible in terms of management as long as all partners can agree. Another advantage of forming a partnership is that the responsibilities are shared between each partner. This is a huge benefit compare to a sole trader because this allow them to make the most of their abilities. Rather than splitting the management and taking an equal share of each business task, by having this they can make the business run more efficiently.
On the other hand, the main disadvantage of forming a partnership is that there are unlimited liability, which means that each of the partners shares the liability and financial risks of the business. This dangerous because it will mean that each partner will have to make sure that they do not make stupid decisions otherwise they could cost everyone their money and possibly personal belongings. Furthermore, another major disadvantage of partnership is the taxation laws. This mean that partners must pay tax in the same way as sole traders, each partners submit a self-assessment tax return each year. They are also required to register as self-employed with HM Revenue & Customs. The current law mean that if the partnership bring in more than a certain level, then they are subjected to greater level of personal taxation than they would be in a limited company. This suggests that setting up a limited company would be more beneficial as the taxation laws are more favourable. Furthermore, one of the biggest obstacles most partnership face is dispute within the business. The reason why it is one of the biggest problems is in a partnership everyone needs to be working together and have their own specific roles. If someone were to leave the company or to have a dispute, this would disrupt the flow of how the business is run.

Private limited company
This is the most common form of ownership for newly start-up businesses. However, even this has its both advantages and disadvantages. The main advantage of setting up as a private limited company is that the company shares cannot be sold to the public without permission from the owner of the business or personnel that has authority within the business. This secures the business as it will be less likely that wrong decisions are made regarding to the business because most shares will be sold to people who are trustworthy and also the owner of the business will be able to keep the main control over the business. In addition, the status of the business will not be affected by the status of the owner. Another advantage of setting up as a private limited company is that it is cheaper and easier than a public limited company and is less vulnerable to take over as it requires an agreement to the shareholder before the shares are sold on to others.
However, this type of ownership also has a disadvantage because this potentially restricts the amount of capital raised because the maximum number of shareholders allow is only 50. Therefore, the business will need another source of finance such as a bank loan etc. this could cost more money and reduce the business profit. In addition, to become a private limited company you will need to have at least 2 shareholders within the business (the owner and another person). This is a problem because the owner might not want to have second personnel within the business because they want to make more money from the business.

I have decided that my business will first start out as a sole trader as I will have good finance and would not be charged tax as much as being a full fledge business because I will be the only owner of the company. Furthermore, because it is not a partnership I do not have to have a discussion with what I want to do with the business. However, later on in my business life cycle I will consider converting my business into a private limited company. As I will have a lot of money flowing around the business and also sometimes risk will have to be made, and if things go wrong I could lose everything that I own. So therefore converting into a Private company will give me limited liability or a safety net if things were to go wrong. This also means that I can choose anyone I want e.g. a family member to be one of my shareholders, this is good because this will allow me to have experience members to help me make decisions within the business. Therefore, this will allow me to build my business into the right direction, which means less chance of my business failing and higher chances of the business producing profit at the end of the year or month. This is also an advantage over a sole trader as in a sole trader I have to be the only owner, therefore I will have to pay for all of my cost with no help unless I get a bank load but this is risky because if my business were to not be doing well the bank might not approve of my loan request.

Key personnel required
Owner/manager (me)
As the owner I will be managing the business cash flow and other additional problems might occur throughout the year. I will also be managing the business website as I have good IT skills to create and manage a website. This is good because this will mean that I will not have to hire IT personnel into the business. Furthermore, I will be working as a cashier for the café too as I think that it will make the employee feel better working for someone that is also putting in a fair share of work too. I am planning to start working since the opening time to the closing time, this way if there is any problem with the customers or anything I can assist my employees or the customers.

Financial plan
Analysis of plan
The business financial plan is based on primary and secondary research on my competitors, the local area (Maidenhead), the local community and legal licences. Using all of my research I am able to make the best decision for the business and also a realistic financial plan for the business. However, I will need to take a £10,000 loan for my business start-up. This money will be used to invest in property for the business, the assets for the business and license payment etc.
My finance plan sheet includes the products I am offering to customers. This gives me the main source of income and outflow for my business. My aim is to maximise my sales with the more well-known cakes such as Victoria sponge cake, chocolate cake etc. However, I also think that there is some capacity to maximise on potential niche markets such as vegan and coeliac for not only the niche market but because some people may see them as having health benefits. Marlow is a very affluent area and there has been some research evidence that suggests wealthier areas worldwide encourage healthier attitudes to food and lifestyle choices. Therefore the cakes on offer such as apple and spelt cake will appeal to the more health conscious customers. There are also some attitudes to health and nutrition trending such as dairy free. The vegan products will appeal to those customers also who do not want to eat dairy.

Sale forecast

Sales forecasting is one of the essential thing to do when creating a finance plan as you can see. I have altered some of my sales recognising that I would not receive a lot of sales during certain times of the year as indicated above. Some of these reasons are due to seasonal changes such as not wanting to leave the home in winter of not wanting to sit in a restaurant in summer, as well as the fact that it is a newly started up business. Furthermore, my marketing schemes will have a variable effect on the amount of customers coming to my café and it is important to be as accurate as possible.
The sales forecast of my business shows that in the first month of my business start-up some of my products will have higher sale than the second month of my business start-up (See above). The reason for this is due to one of my marketing schemes where I will be holding a business opening party. In this the first 50 people who visit my store will receive a free cup of coffee with their cakes. Then the next month I am expecting a small fall in sales because some people that came during the opening party might not like the products or ambience in my café. The reason why I do not foresee the sales dropping significantly is because during February I am planning on countering those who do not like my café with the increased footfall that would be encouraged by capitalising on a seasonal national event, by holding a Valentine Day special (This will be further analysed later in the document on page 4).
Indirect expenses

As you can see above that my business have a particularly high indirect expenses, but all of these are necessary to my business and my business marketing schemes. However, if I had to take something out to reduce my cost it would be the internet and the sparklers. The reason for this is because they are producing high cost and I do not have to do this although it would attract extra customers. In addition, for internet I can charge for the internet for example I could charge a rate of 10 pence for 10 minutes.


As you can see on the left side of this document is my finance all of my fixed assets and source of finance that I will have. If you look at my fixed assets you will see that for some of my items I have high cost but this is expected from my business because my business will be a high quality and cost business. Furthermore, my business will be based in Marlow which mean that the majority of my market would be affluent people that are around the age of 30-40 so therefore I will need to have classy seating’s to attract more people to my store. (To see the full product list see page 7)
In addition, if you look at my finance you can see that I am not borrowing a high amount of money from the bank this is a benefit for my business because it will mean that my pay-back period will be good because I do not have to gain a lot pay of money each month. This would mean that my business will not be in debt with the bank for a long period of time, this will mean that I will have less liabilities and more room to spend my money on improving my business.
Ratio analysis
Gross margin

Gross margin represents the profit brought in from the sale of inventory items, (such as coffee, drinks or bakery goods), compared to overall sales- (gross profit divided by net sales). According to the Small Business Development Centre’s 2012 report, food costs take up about 15 percent of revenues on average. The average coffee shop, then, has a gross margin of 85 percent. However, we must take into account that this statistic may be out dated due to rising costs or inflation. I have allowed my business to have a 57.61% gross margin which is good for a newly started up business as they have many extra start-up costs that established businesses do not have.
Net margin
As you can see in my finance plan my net margin is quite low but this is to be expected because this is a newly started up business. During the first year more money will also be spent on things such as marketing and advertisement, promotions or offers as it is important that I maximise the amount of exposure for my business and the amount of footfall.

Breakeven sale level
As you can see my breakeven sale level is quite high for a newly started up small business. However, this is not a big surprise because my business is an organic café, so it is only natural for the cost of each of the ingredients to be higher than normal ingredient as the cost of one organic chocolate cake is £2.20 (see picture on page 7) and the cost of a normal chocolate cake is 1.14 (see appendix 11) which is almost a 50% different in cost and, therefore, per unit to be high compared to other cafés that do not use organic products in their sale items.
Margin of safety
Looking at my margin of safety you can see that my business will be able to drop in sales by 5.07% and would still is able to reach breakeven. This is good number to have because if you look at my sale forecast (see picture on page 8) you can see that most of my sales will drop during winter and this 18.85% will help me cover the loses.
Current ratio
The current ratio is a measure of liquidity within of my business. Looking at the current ratio for my business this tells me that I will be able to cover my current liabilities 7 times over. This tells me that even if my sales drop by a little I will still be able to cover all of my liabilities. However, this ratio is considered as too high as most business would aim to get 2:1 ratio to ensure that the value of their current assets cover at least the short term obligations. But it is still good because what it this means is that my business will be able to support against unforeseen contingencies that may arise in short term.
Return on capital employed (ROCE) is a profitability ratio that measures how efficiently a company can generate profits from its capital employed by comparing net operating profit to capital employed. As you can see in above on page 10 my ROCE is 51.03% which means that for every pound I am invested in capital employed I am making £51.03 profit. This is good because it show that I can efficiently as well as my capital employed as well as my long term strategies
Assets turnover
Looking at my assets turnover you can see that suggests that I have a good production capacity and inventory management. However, I believe that this could be higher if I did not use organic products and cheaper assets.

Because I have based my shops in an area that is quite close to me, I have visited the area frequently and I have a good understanding of what its core group of customers would be. This will allow me to place accurate pricing that will suit my target market and to market appropriately so as to encourage other people to come and try my products.
Competition analysis
In this I will be showing all of my competitors within the area that could affect the amount of customers I gain and also the quality of employees I get. Looking at appendix 7 this image shows the location of my competitors that are cafés near me (as you can see places like Costa, Prezzo, and Sainsbury etc. are going to be near my café). Some of these cafes are not high quality cafés and so would not be my main competitors. Others like Burgers which is a local café store base within Marlow (see appendix 16) whilst a high quality establishment, appeal to a more traditional market as they pride themselves on tradition whilst my business will appeal to those who are environment conscious and health conscious. Therefore, my main competitors would be businesses like Maison Blanc. (See appendix 12 for a map view of their location) However, their closest store is based in Henley on Thames which is not as close to my business compared to other well-known cafés such as Costa. However, I still have to engage with competitive pricing against Maison Blanc because their type of business is the same as my business in terms of selling high quality cakes to an affluent market. However, there is a distinction because my business will have further specific appeal to those concerned with environmental issues or health issues. I have done this using their menu (See appendix 14) as a starting point for setting my prices in order to compete with Maison Blanc as well as other cafés like Costa, but also charging high enough prices so that I do not lose money from engaging in competitive pricing (see appendix 15 for costa menu). As you can see the average price that Maison Blanc charges is £4 for a cake or pastry which means that I have to match that price or set a lower price to try to attract more customers. Furthermore, there is also another high quality café that is based in the same area as me which is called Burger Artisan Bakery (See appendix 16). They offer multiple products as show in their menu also within the price range I will be setting, although they have a traditional focus (See appendix 17 for their menu). Supplier + stock arrangements
I will be ordering my cakes and drinks online from the following seven suppliers, The Bread Factory, Honey Rose, The Cake Hole, Vegan Antics, Sauce Water, Coffee Plant and Chocolate Trading co. (see appendix 18, 19, 20, 21, 22, 23 and 24). The main reason why I have chosen these seven suppliers is because they were the seven cheapest organic suppliers that I could find on the internet that give a reasonable price for the quantity provided I will be personally tracking and collecting all deliveries by myself, once deliveries are made I will be keeping all of my supplies in my store room that is located in the property that I have chosen. Furthermore, my suppliers will be paid online using PayPal as it is one of the safest ways to pay online. My form of communication with my suppliers will be through my business email and phone line this will allow me to keep my personal information protected in case the suppliers are not genuine. These are also immediate communication systems as telephone lines are staffed on a daily basis and emails are very quick ways of communicating regularly. These main systems of communication will also allow me to respond quickly to ant supplier or stock changes that I may need to make.

Marketing plan

I am going to have different types of marketing strategies over the course of the year as you can see above is my marketing calendar. As you can see in the title I will be trying to provide my customers different types of theme throughout the months based on each special events e.g. if it was Christmas I would have a cake that have a festive Christmas design on it so that it looks more appealing for my customers. However I will be going through the following strategies in the following month more in-depth:
January – For this month I am planning on holding an opening party which will be advertise through the use of leaflets, that I will ask my family members to come help me give out as well as social media. This will allow me to reach a very wide potential customer base. In addition, I will also be giving the first 50 customer that visit my café a free cup of normal coffee if they buy a slice of cake. The reason why I have done this is to try to expose my product and café to as many people as possible, and try to get good word of mouth around town as quickly as possible by luring people in with reasonably costed high quality cakes. This will help me increase my footfall during the first week of my business start-up (See page 8 for pictures of estimate footfall)
February – I will be holding a Valentine’s Day special promotion for couples that come to my café. During this event I will be providing a Valentine’s Day theme cake; all of this would cost me an extra £150 to do the cake theme but I believe it will balance the loss of footfall from those who do not like my cafe. Furthermore, I will also be giving all of customers that visit as a couple a 10% off of all products within the café as an incentive to encourage couples to treat each other as it is likely that if we can get them into the café they may spend more money on treating themselves indulgently as it is a special occasion.
March – During this time of the year I will be doing a Mother’s Day special. I will be giving out special offers where if you visit with your mother the total cost of everything you buy will be discounted by 20%. This will go well with my Mother’s Day theme cakes because it will encourage people to buy more cakes because they are incentivised with an offer of 20% discount. I will be advertising my special offers by using leaflets and social media; I will be asking some of my employees to do extra time to help me hand out leaflets around town. However, this does not mean that the employees will be receiving extra pay (e.g. a pay times half) but they will still get their normal rates so it is the same as if they were to be working for the whole day or a few extra hours. Social media will allow me to respond or encourage potential customers on a daily basis.
April – This month we will be doing an Easter promotion for people that visit the café during the Easter holiday period and buy our chocolate cake- they will receive a 10% on the cake. I will be advertising this deal by using leaflets and posting on the business websites. This will cost £12 (see appendix 25) for the payment of the leaflets. I will be asking my employees to help me hand them out as well as friends and family. I will also advertise on free social networking sites as many families search these sites at that time for Easter related activities and might be encouraged by the discount. E.g.
June – During June the extremely popular Marlow Regatta 2016 will take place. This would be a good opportunity for my business to maximise the amount of money earned this month because this is one of the biggest events in Marlow, where people locally and nationally come to see the racing. Because I have decided to base my business in the town, near where the event is going on, there is a higher chance that the people will come to my business it is the most convenient for the people. I will leaflet and use social media to advertise (See appendix 25, 26 and 27).
July to August – During these two months I am planning on doing a special promotion deal where people that are still in education will get 10% off on all product in the café. For other customers that are not this young the offer is that if they bring 3 or more people with them to the café they get 10% off on the total cost that they have spent in the café.
October – During this I will be doing a Halloween themed café and cakes. So this will mean that I will have to buy some decorations and things a Halloween theme cake, all of the cost for this have been considered and have been put as ‘themes’ as part of my marketing (See page 13). I believe this would attract the younger market as they would be more likely to like the Halloween theme compared to people that are 20 or 30 years old. Because it is Halloween and it is a special occasion parents might be more willing to spend more money on things that they might not for their child because it is a once a year event.
November – During this month on Saturday 5th of November I will be doing a bonfire night promotion. In this I will be giving away one free pack of sparklers (there are 5 in each packs) for everyone that comes into our store for some cake (See appendix 28) throughout the day. This will increase the visiting rate of my store because it will be like giving an incentive for the customer to come and everyone like receiving free items.
December – During this event I will be doing a Christmas special. This will include a Christmas theme cake and also decoration. All of these will cost my business £150 for the decoration and an extra cost of having a Christmas theme cake. Furthermore, I am planning on putting all of my hot drinks at low price by giving customers 20% off on them. This is a good idea because during this time of the year it is when the weather is quite cold and therefore if the price is cheap people might be more incline to come and buy a cup of hot chocolate or coffee, and might also buy a slice of cake with it.

I am planning to use two forms of advertisement both are through social media. I will be using twitter and Facebook, the reason why I have chosen this type of advertisement is because these two are the cheapest form of advertising as with Facebook it is only £1 a day (see appendix 26). This means that I will be able to fully expose my business through one of the most widely used social media in the world with over one billion users. In addition, twitter has 651 million accounts registered. I am able to pick what my budget is on a daily basis (see appendix 27), and I will only get charged per click or for every person that click into my website. These two forms of advertisement will not only allow me to maximise the exposure of my business to almost all of my target market and more, but I will also be able to track how many people have click or seen it digitally. This is useful for me because I will then be able to see if doing these advertisements is worth the money I am investing or not. Whereas if I were to advertise through newspaper or radio, the cost of advertising will be high with Maidenhead Advertiser being £4.60 a week and for advertisement in Marlow it will cost me over £300. Furthermore, I am not able to monitor how the advertisement is doing, so I do not know how much my business is being exposed to the people reading the newspaper, so I could be wasting my money with no certainty whether it is working or not.

Target market
The affluent people
According to recent census, Marlow is the 6thrichest town in Britain it has a total of 400 millionaires out of 14,000 total populations this is about three percent of the population that are millionaires. By using this information I am able to place reasonable prices that will maximise the amount of income earned and also be cheaper than my competitors. Furthermore, according to a census demographic the average age for Marlow is 40 but the median age is 43 (see appendix 29). This perfectly suits my business because older people may prefer foods that are healthier and tend to appreciate the environment as they are likely to be educated on this and so will understand how organic food can help their environment, especially as Marlow is situated within an area of natural beauty. Younger people may not hold the same ideas and make different lifestyle choices about what they eat or drink. They may have less income than older affluent people and socialise in different ways and have different pressure group interest. However, later on in the business life cycle I will aiming to reach to all age groups, as there will be more young people going out than adults.

This target market is one of the biggest ones because couples are more likely to be more willing to pay higher prices for cakes if they are for each other, as they may be seen as a gesture of their love for each other. Couples may be inclined to go out for special occasions such as anniversaries. Whereas if it is just friends casually going out together to have some cakes they are more likely to go somewhere else that is cheaper for them. Furthermore, because I will be doing themes for my café to try to attract more people and this includes the ‘Valentine day special’, I will be giving special discounts for couples who come to my café. I will also be providing cakes that are on the theme of Valentine. For example, the cakes might be in the shape of a heart shape or the icing is in a valentine theme.

I am planning to advertise openings for my business on websites such as The reason why I have picked this website is because there is no cost to it and all I have to do is create an account to post a job (see appendix 30). The second website that I have chosen is the reason for this is because Reed has one of the cheapest costs for advertising jobs (see appendix 31). Furthermore, the main reason why I have chosen both of these job search websites is because they are one of the most visited sites in the UK. Therefore, I will have a higher chance of getting a lot of job offers from people. Also, the majority of people now are doing things digitally, so it would be a waste of money to pay a local newspaper to advertise a job on the newspaper because the majority of people who use newspapers are normally older people that already have a job and would not be very interested in a waiter job or cashier for a café.

As you can see here above is my business staff rota plan. I will be using this to assign each person their shifts and role of the business. As you can see I am planning on recruiting 2 people for each role and shift them between each other at certain time which is shown above. The reason why I have done this is because I want to give all of my employee some time flexibility and rest time, so I am not burning all of my employee out by having them work long hours as this will increases their chance of causing an accident while working. Furthermore, I believe that this will make my staff feel more motivated as it will make them feel good because it would not make them feel as if their times are being completely consumed by the job.
In addition, I will also introduce to them flexible working time, what this essentially mean is that after a staff member within the business has been working with my company for at least 4 months. They will be allegeable for flexible time, so they will be able to ask for time off for a holiday or a festival etc. However, I will only be allow them to take a maximum of 20 days off and only a maximum of 7 days per leave, also they will have to wait at least 1 months interval before they will be able to apply again. The reason for this is because according to my finance plan, during the 4th month of business start-up I am confident enough that I can afford to let employee and give another employee extra pay for 7 days.

Person specification
Waiter/cashier (see appendix 32 for the person specification table)
The main attribute that I want from my potential employees will have to be friendliness, politeness and confidence. The reason why I have chosen these three attributes is mainly because of who my main target market are and I think that most of the people would prefer polite waiters or waitresses. But the most crucial and must need attribute should be confidents, the reason for this is because they will be required to interact with people constantly throughout the day.
Furthermore, my employees will have to be at least over the age of 16 and have 5 GCSE grades of A*-C with mathematics and English included. The reason for this is because as a cashier I would expect my employees to work out the sums quickly, so that the customers would not have to wait for a long time, although they will be train on how to use the cash register. The reason why I want my waiter/waitress to have these qualifications is because they will need to have good communication ability because they will be the people that will directly engage with customers and potentially regular customers. However, to make sure that the employee is suitable for the job I will ask them to come and do an induction day where the recruit will be ask to work for a day but I will be monitoring to see the level of customer service they can provide. In addition, I will not be providing my employees with any uniform as it will increase my cost. However, they will be expected to wear smart casual wear e.g. smart jeans and top/shirt.

Kitchen porter (see appendix 33 for the person specification table)
As a kitchen porter I would expect this person to be quick and efficient in cleaning and drying plates that come in. This is important because if there are not enough clean plates during busy times of the year, customers will get impatient and might not give a good review about the café on websites such as which is a site where people that have visits places in Marlow such as restaurants, pubs and café can write down the reviews for the shops good or bad. So if there are bad reviews I could lost a significant amount of customers. However, if possible I will try to ask people that I already to see if they will be interested in working for me as a part time job or even a full time. This is good for me because it will mean that during my rest days I can ask this individual to take care of the store for me as I know the person
Job specification

Provide friendly, responsive service to create an exceptional experience for all of our customers. This will increase the chances of my customers returning again.
* Greet guests, operate cash register and point of sales systems and take orders in an efficient manner with knowledge of the menu. * Gain an understanding of the ingredients in all cakes and how it will benefit the customer * Handle cash, answer questions, and work efficiently as a team member in a fast paced workspace. * Be flexible and able to multi-task while smiling. Hand-off cake to guests and be responsive to questions about our brand.

Kitchen porter
To make sure that there are always enough knives and forks, plates and cups in the kitchen for whenever is needed to serve
* To follow the cleaning schedules for the kitchen and make sure plates are always clean. * To report any maintenance issues or missing items to the manager immediately. * To comply with the conditions of the food hygiene policies. * To be flexible and willing to help other departments at busy times if required.

Min wage/ other wage approaches
The current minimum wage rates for the people age of 18-20 is £5.30 and the current minimum wage for people the age of 21 and over is £6.70. Because Marlow is a wealthy area the normal wage rates are quite high of about £7. This would therefore mean that I will have to have the wages for my employees quite high if I want to recruit people in time for the opening of my business. If you look at my employee spreadsheet (see page 16) you will see that all of my employee wages are over £7. The reason why I have done this is because I want to be as competitive as possible, even though not everyone that apply will get employed but the high wage will get my business awareness around town and this could possible lead these people to visit my café.

Selection process
I will be selecting all of my candidates by judging them purely by their CV’s and what experience they have, if they have references that would also be good to see but for people that do not have any references they would not be in a disadvantage as I will be the one that judge who is good enough. I will do this by having the applicants do various role play situations that could occur during a typical working day. During this role play I will be look at how they react to different type of situation and how fast they do it and shortlist them from their overall performance. The main thing that I will be looking for is the ability to quickly react to situation and to deal with it gracefully. Furthermore, I will also be running a trial shift for the candidates I have shortlisted to see who perform the best in real situation as the finally examination process. For the people that did not get accepted I will be personally emailing all candidates politely that they did not qualified for the job and to try next time.

Equipment list
Fixture and fitting * Table x 7 (£3,294) (See appendix 42) * Chairs x 20 (£1,962) (See appendix 42) * Table cloths x 7 (£34.93) (See appendix 43) * Showcase x 1 (£895.88) (See appendix 44)
* Fridge x 1 (£115.13/month) (See appendix 45) * Coffee machine x 1 (£1,599) (See appendix 46) * Oven x 1(£1,624) (See appendix 47) * Dishwasher x 1 (£179.99) (See appendix 48)
Office equipment * Cash register x 1 (£86.61) (See appendix 49) * Internet broadband x 1(£20/month) (See appendix 50) * Phone line x 1 (£16.99/month) (See appendix 50)
Catering equipment * Knives, Fork and Spoon (£5.67) (See appendix 51) * Teaspoon (£22.68) (See appendix 52) * Plates (£29.8) (See appendix 53) * Cup (£25.8) (See appendix 54) * Saucer (£19.8) (See appendix 55)

The premises (see appendix 56) that I have chosen will provide me with a wide range of customers as it is one of the richest area in Britain. Furthermore, the average age of people living in Marlow is 40 (see appendix 34); this suggests that there are a lot of families in Marlow. This would be good for my café because throughout the year I will be trying to expand the business market by doing special deals that will encourage people to come whether they are young, middle age or old. Because of the location I have chosen these promotional ideas will be more effective than if I were to base my location somewhere such as Maidenhead because there are not many people that specifically go to Maidenhead to shop or go out. Furthermore, it is not as wealthy as Marlow which therefore means that I would not be able to charge high prices for my products. This will affect my business because organic cakes have high cost.





Counterervice desk
Counterervice desk

The reason why I have chosen this layout is purely because of how big my chosen premises is, as you can see it is not a very big premises but this is a good thing for me because I am a newly started business so I do not want to be paying high amount of money on my rent. However, I have tried to fit as many table and chairs in as possible but not so much so that everyone is cramp. Also I have also considered where my counter is and the placement of all table and chairs making sure that it is not to close because the customer might feel uncomfortable as it might make them feel like being watched by the waiter or cashier. Furthermore, I have also tried to make sure that the table and chairs are not close to the wall because I do not want the customers to be touching the wall as this might make them feel uncomfortable. My customers will have the choice if they want to go pick their cake up by themselves at the service desk or wait for our waiters to deliver their orders to them. This will allow a good flow within the store so my customers would not have to wait as long to receive their order.
Because I aim to provide organic cakes to people and also as fresh as possible at all time, but realistic I would not be able get suppliers coming in with new stock every day because the cost will be high and this would not give room for my business to gain profit. So I will have my supplier coming once every two weeks. This will allow me to keep my stocks fresh most of the time and also have a lower cost than if I were to do a weekly supply or a daily supply. Furthermore, because I am relying on my suppliers to provide me fresh supplies every time I would expect them to produce it 1 or 2 days before the delivery day or the same day to ensure the freshness of the cakes.

SWOT analysis
The reason why I have put my USP (Unique Selling Point) as one of my strengths is because there are not many organic café in England with only 40 (this does not include Scotland and Wales). I know this because I have done secondary research (see bibliography) on the amount of café in England. So therefore this will allow me to get a large amount of people that want organic cake.
This is one of the main strength of my business because for a newly start up business my finance stats are high compare to other newly started businesses. Because it some of the statistics are so high it will mean that I will have lower risk. Furthermore, I have high confident over my finance plan because my payback period is 3.34 years which suggests that I will be able to pay everything that I owned within 3.34 years.
Marketing strategy
The reason why I have choose this as part of my business strength is because if you look at my marketing plan on page 13 you will see that I have try to market my business out every month using seasonality and special events such as Christmas, valentine day etc. to my advantage.

I consider this as my weakness if because due to the nature of my business, all of the cost from supplies will be high as I am ordering high quality (organic) product. Furthermore I will also be ordering in high quantities every time so the cost will be high due to that. In addition, my supply chain is not very strong as I do not have an alternative supplier. The reason why this is a weakness of my business is because if something were to happen to one of the suppliers my business will be greatly affected by this because I do not have an alternate supplier to call to for emergency purposes.
This is one of the main weakness that I believe my business will face in the future is the ability to serve a high amount of people in the future as my premises would not be big enough. This is a problem because I would not be able to maximum the amount of sales because not a lot people are visiting me anymore.

Finance (Current ratio)
The reason why I consider this as one of my weaknesses is because as you can see in page 10 my current ratio is 7.24:1. Even though this might look good because it means that I am earning a lot of money. However, it is the opposite as it will mean that I will have a lot of money being left unused within the business. This could indicate that I have not thought about the bigger future for my business and can make me look unconfident about my business.
Baby boom
This is a good opportunities for me is because it will allow my business to possibly gain more income for my business as more babies will mean more birthday. If you look at appendix 48 it tells me that there has been a baby boom during these groups of people, and this is good for my business because they are in the age group that my business will appeal to. However, it would not appeal to them completely because children age 11-15 would not really care about organic products.

This is a good opportunities for my business because as to right now the economy is currently recovering and is growing. This is good for me because it will allow me to keep my high prices as people will now be more willing to spend more money on the things they want or high quality product instead of low quality product for a cheaper price.

Expand my business
According to my finance plan it suggest that my business will be doing quite well at the end of the year with a net margin of 9.06% which I consider a considerate number for a newly start up business. Furthermore, this will give me room to possibly expand my product range or even create more than one store for myself as in the next year I would not have to pay for some of my fix cost that I currently have (see appendix 49). As you can see in my year 2 finance sheet that my net margin is 11.03% which is a good sign.

High level of obesity
The reason why this could potentially be an opportunity for my business is because the main problem with obesity is the type of food that people eat and these are typically food that contains high sugar that is bad for the body and not the amount of exercise people do. However, my business will be providing a healthier alternative for people that do care about what they eat and want to lose weight and also in a reasonable portion (see appendix 50). So this is why my business has the potential to survive through this stage whereas other businesses that provide cakes would not.

Living wage is increasing
This is a threat to my business because it will mean that I will be force to increase my all staff wages, even though this may seem a good thing for my employee because they will be earning more money overall. However, it is not good for me because it mean that my business will have higher cost overall due to this. This could possibly mean that I will have to alter the prices of my entire product range to keep up with all of my extra cost. Or I might have to force more employees to work longer hours which could potentially decrease their morale, this can have an effect on the quality of customer service in my business.

I consider this as one of the biggest threats for my business because if you look at appendix 7 you will see that I have a lot of competitors around me that will be constantly thinking about innovative ideas or product. In an attempt to gain more customers than other cafés around them which will make it hard and longer for my business to get bigger because I will be rivalling against well know businesses such as costa, Maison Blanc etc.

The reason why I have put this as one of my threats and also one of my opportunities is because right now the economy is currently in the recovery stage and it has been like this for a few years now. Although theoretically the UK economy should almost be at a boom but realistically it is not, so there is still tension within the economy. This is bad for my business because it will mean that I cannot raise my prices too high because people might not be willing to pay for it as people are still recovering from the recent recession period. But at the same time I do not want to be too late at raising my price because my main purpose for my business is ultimately to generate a lot of profit.

High level of obesity
Even though I have already said that high level of obesity in young children is an opportunity for my business but it could also be a potential danger to my business as some people might not understand the differences between the two types of ingredients of how it can make a big difference to the human body. So these people might not come to my store as often because they want to reduce the amount of calories consumption.

What if scenarios
There are two negative scenarios that could possibly occur to my business throughout the year and these are: * Suppliers
The reason why I have put this as one of my ‘what if’ scenarios and also as one of my weakness is because I only have one suppliers for the specific cakes that I want. This is not a good thing as if one of these suppliers suddenly closes down or is unable to supply my business due to external factors such as seasonality, location (of my business and supplier) and legislation etc. For example, suppliers cannot get to me because there is a high level of snow fall so cars cannot reach me. This would therefore pose a problem to my business; however, I can counter this by having alternate suppliers for all type of product. This will ensure that there are will not be any shortages in stocks.

* Fall in sales

Because I do not have any experience in running my own business nor created one before which therefore could mean that I have overestimated my sales volume forecast, so it is important for me to consider this and test what kind of situation my business would be in if I did overestimate my sale forecast. I will be testing these possibility by reduce my sales by 5-10 percent. This will not only give a really harsh and also realistic view to where my business would be, but it will also help me to think up of a contingency plan if this were to happen when I start my business. If my sales were to drop I will be counteracting this by releasing out special offers such as buy something that has a value of £7 or over you get something else for free. This will encourage people to come visit my store and used up my stock so I do not waste any money on my stock. Furthermore, this will also mean that I have to do discounts deal to try to attract more people to come to my café because it will be cheaper than other places.

Pest analysis
* Confidentiality
It is important that I keep all information about my employees confidential from anyone to avoid any potential danger towards my business and also my employees. As if personal information of my employee get out to the wrong people, my business will be in danger and will get bad rep from the local people and also others if something bad were to happen to them. This will obviously have a negative impact toward the aims and objective of my business which is to be the number café within the local area and to survive the first year of business start-up.

* Health and safety
This is a must for my business as I will be asking employees to wash plates, cut plates and working with hot water. Even though these are normal easy things that should not really be a hazardous thing for people, but my employee will have a higher risk of this happening to them as they will be working in a fast pace environment where they will be expected to serve all customer as quickly as possible so that the customers are happy. If these things happen I will need to pay for the treatment or I will have to train the employee to work in these kind of environment so that the chances of them getting hurt is reduce.

Economical * Exchange rates
This factor I consider one of the most dangerous out of all as it will determine how much I will have to pay for my product from my suppliers. So if the pound is getting weaker this would mean that I will have to pay more money to my suppliers because the price of importing is high. This is bad for my business because it will mean that my cost will be higher and this could drastically effect how I run my business. As I might have to charge a higher price for my cakes or I might have to buy less from my suppliers to try to keep my cost low and also hitting breakeven or gaining profit.

* Seasonality
This is one of the main causes that will reduce my sales as people might be more likely to come out to café during the summer period than they would during the winter period. As the majority of people would prefer to come out to town if it is not cold, so it is important that I correctly utilised seasonal event such as Christmas, Halloween and bonfire night etc. to my advantage to try to get people into my store because these are the time that the majority of people will be coming out during the cold weather.

Social * Competition
I believe competition is a major factor for businesses such as cafe because the majority of people that like going to a café to have their coffee they usually go to the same one because it is more convenient and they know that it never fails them. So it will be a difficult task for my business to try to attract new customers because as you can see in appendix 6 there are already a few cafés around the area that I want to place my business and the main business that I believe will be costa and the Burgers. As one is well known across the UK and another is well known in the local area. Therefore it is essential that I market and advertise my business right because if I do not do this correctly my objective to be the number 1 in the local area would not be possible and also to get profit within the first year of business start-up. * Level of obesity
In a developed country such as the England or the UK the majority of youngsters or everyone is now mainly focusing on their health instead of other things, so more people will be looking into food/supplements that are healthier for them and does not have a negative impact towards the body. As to right now it has been reported that there are high level of obesity in younger kids, this is mainly due to their diet and the types of food they eat e.g. food/drinks that are high sugar. However, I believe that this increasing problem in the UK would not as big of a threat to me compare to other regular cake store/café as I will be providing the high quality cakes that are made with healthy ingredients.
* Internet
The internet is one of the main factor for my business because I will be using it as a main advertising tool and it will also be a way for potential employees to apply for a job as the business website will consist of a page that give employee information about the business and contacts if they are interested in a job the contacts will include emails and the business number. There will be three emails for my business one for enquiries about product, café etc. and one for enquiries about available jobs within the café and the third one will be for the business suppliers. This is a good way for people to reach my business because the world now is quickly becoming digitalised and the majority of people now uses the internet as a form of knowledge, leisure etc. * Social media
Social media is an important factor or tool in how I want to advertise or promote my business. With over a billion of users, I believe using the social media is the best way to advertise my business that will cater to the people that share the same interest/views as my business. Not only that it is good for this; the cost to advertise is significantly low compare to advertisement through local newspaper or radio station. I believe that by promoting my business using this form of advertising is the best for my business if I want to ensure that my business meeting my prediction, and aims and objectives, whether it be long term or short term.
Risk assessment and contingency plan
Employee is injured by equipment
Because my cakes will need to be cut and the cutlery and plates will need to be clean, my employee might be put under pressure sometimes to work faster because there are a lot of customers. So they will need to be careful when cutting or cleaning otherwise they might cut themselves in the process.
To avoid my employees from getting injured, I will be making sure that all employees are trained properly and also told to work at their comfort zone so that they do not injure themselves. However, because my staff are not actually baking the cake this reduces the majority of the risk that could occur. Even though there are other machines within the café such as coffee machine, fridge and freezer etc. but these equipment poses low threats to my employees.

Abusive customers
Even though most of my customer will be visiting to peacefully have some cake with some tea or coffee and going about to their business. However, this does not mean that there is not a chance that a customer feels unhappy about the level of service that one of my employees and some might become abusive to them. So correct procedure must be put in place if these kinds of things were to happen.
The customer problem will try to be solved straight away but if they are still causing unreasonable problem towards my employee and my customers. They will then be asked to leave the café; if they refuse to do this I will be force to call the local police to resolve the problem. During this situation, we will try and isolate the abusive customers from the rest of the café ensuring that other customers are not being put off of their snack break or could possibly give my café a bad image.

Appendix 1

Appendix 2

Appendix 3
Looking at Marlow population density you can see that it has 30 population density which is in the mid-range of other places in the area.
Looking at Marlow population density you can see that it has 30 population density which is in the mid-range of other places in the area.

Appendix 4

Appendix 5

Appendix 6

Appendix 7
This image show you the location of my business (Marlow) and around you will see pictures of a cup and knives and folks these are my potential competitors and also Sainsbury as they also sell cakes.
This image show you the location of my business (Marlow) and around you will see pictures of a cup and knives and folks these are my potential competitors and also Sainsbury as they also sell cakes.

Appendix 8

Appendix 9

Appendix 10

Appendix 11

Appendix 12

Appendix 14

Appendix 15

Appendix 16

Appendix 17

Appendix 18

Appendix 19

Appendix 20

Appendix 21

Appendix 22

Appendix 23

Appendix 24

Appendix 25

Appendix 26

Appendix 27

Appendix 28

Appendix 29

Appendix 30

Appendix 31

Appendix 32

Appendix 33

Appendix 34

Appendix 35

Appendix 36

Appendix 37

Appendix 38

Appendix 39

Appendix 40

Appendix 41

Appendix 42

Appendix 43

Appendix 44

Appendix 45

Appendix 46

Appendix 47

Appendix 48

Appendix 49

Appendix 50


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