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Risk Analysis

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Assignment 2: Industry and Risk Analysis
BUS 521
Strayer University
October 30, 2011

Industry and Risk Analysis There are many risks involved in the new business venture. Entering into the business industry can be a hit or miss and having a business plan to ensure you are targeting the right audience and marketing the business to the proper market can help ensure the business stays on track.
Future Outlook and Industry Trends for the New Venture After assessing the future outlook growth potential for bakery businesses it has shown that it is steadily rising by 1% each year. With over half of Americans loving desserts more and more of these types of businesses are being produced. Since London is such a high tourist area, the locals as well as tourists will be able to partake in the desserts from around the world. These types of businesses are becoming more popular in America and attract people from all walks of life. The new venture will allow this type of business to expand globally so that others are able to taste the delectable sweets that Good Eats International Bakery has to offer. Sweet Sentiments Bakery, a budding idea for a classic bakery, is in the making for a local soon-to-be small business owner. Known for creating sweet and moist desserts, Ms. Lesley has spent years trying to find the perfect little bakery. Previously Ms. Lesley has created her baking goods within her own home and now plans to share her classics to others for a profit. Her baking skills are proven among those she has chosen to share her simple creations. Good Eats International Bakery will provide a variety of baked goods designed to fulfill the individual’s needs depending on their taste buds and cultural experience that wants to be achieved. Éclairs, pies ice creams, sorbet, cakes and cream puffs will adorn the display for those customers looking for something special. The bakery will also provide classic baked goods such as a variety of cookies designed for the kid at heart, specialty pies for everyday needs, and flavored cakes for any particular occasion or event. Bakeries should also be able to cater to the more health conscious individuals. Taking the old fashioned flavors and developing a truly tasteful dessert without the calories and fattening ingredients are becoming more and more important in today’s society. This is important for individuals struggling with health issues as well as those that choose to be more health conscious. Sugar free snacks and pastries are also becoming more popular. Although this will not be the focus of desserts this option will be available in certain selections on the menu. Offering a selection of sugar-free cookies and cakes by using ingredients such as applesauce and certain artificial sweeteners will be provided. Weight consciousness or dietary needs can be a downer when it comes to sweets. So to include everyone the option will be available. The initial focus will be on building clientele with classic international baked goods, but the plan is to add coffees, hot teas, milk and milkshakes to the menu. This will allow customers to come in from the weather and sit down to enjoy a sweet treat along with a complimenting beverage. The bakery will be a medium sized bakery that will include seating areas with chairs and tables, a bar area as well as outside seating to enjoy the scenery. Risk analysis is a technique to identify and assess factors that may jeopardize the success of a project or achieving a goal. This technique also helps to define preventive measures to reduce the probability of these factors occurring and identify countermeasures to successfully deal with these constraints when they develop to avert possible negative effects on the competitiveness of the company. After identifying and categorizing the risks a team or owner identifies the controls that could mitigate the risk. The decision for what controls are needed lies with the business manager. The conclusion as to what risks exists and what controls needed should be documented along with a related action or business plan for control of the initial process. Bakeries can be a hit or miss business so knowing the competition, target audience, supply/demand for the product, and knowing whether or not to incorporate new products are just a few things to consider. Legal Concerns Related to the New Venture There are many things to consider legally when starting a business: pricing, packaging, insurance, contracts, equipment, certifications, and multiple types of licensing and legal team. Contracts with distributors are going to be one of the most important factors. The relationships that will be built with these distributors will determine how successful the business can be because the business will depend on them for dependable delivery and quality products. Ensuring that the business has all required documents including certifications, licenses and insurance will be done at the initial setup. The pricing will depend upon the market and competition. Having a legal advisor on the staff will ensure that all legal matters have been taken care of and will also advise of any changes or updates that have been made. Approach and Obstacles When Raising Capital How you approach opening a new venture and the obstacles that come along with the new venture can make or break the business. These things need to be handled as quickly as possible prior to the new venture opening. With an increase in the interest of bakeries there it shows that there is a future for these types of businesses. Meeting the demand of the target market can be quite a task. Quality is priority when it comes to the bakery and quantity will follow close behind. The quality of the product and the business itself should sell the product that is being sold. You want it to be the best and you want to have enough of it to sell. Customer service and making sure that the brand of the company stays in the market with positive remarks. Customer service leaves a mark on people and when dealing with tourists you want to make sure that you are sensitive and aware to the different cultures that will be coming and patronizing the business. By doing this one should attain and keep a good reputation and by this you have to ensure great customer service, quality as well as quantity of the product, the appearance and brand of the business. To make sure the business is headed in the right direction comment cards and random surveys will be sent to customers that frequent the business that have provided their email address on comment cards. Location is also a big part of whether or not the business is successful. Having a business plan and mission statement will ensure that the business stays on track and will help get back on track if it falls off. Also making sure that having proper startup costs are reasonable and that it will not take years to break even. Having a financial and legal advisor will both assist with dong that. The target market will define the productivity and success. The business mainly depends on tourists as well as surrounding locals for its success. Partnerships with other local business professionals as well as invitations via fliers and coupons will also be a way to raise capital. Conclusion The industry and risk analysis for the new venture has been addressed. The future outlook of the market is positive and industry trends are related to a few common trends. The legal concerns for the new venture idea have been identified as well as ways to protect that idea. Resources for raising capital, and becoming aware of the obstacles and how to approach those obstacles have also been addresses. A new venture can be difficult to start, but through time and effort it can be manageable.

References

Covello, J., & Hazelgren, B. (2005). Your First Business Plan. Naperville, Illinois: Sourcebooks, Inc.
Doug Hubbard (1998). “Hurdling Risk”. CIO MagazineFUture outlook Hisrich, R., Peters, M., & Shepherd, D. (2010). Entrepreneurship. Boston: McGraw-Hill
Companies, Inc.

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