A New Business Idea in Sydney - Assignment Example

?Present An Idea For A New Business Idea (Coffee Shop) In Sydney. The Report Will Take the Form of a Detailed Feasibility Study Detailing the Originsof the Idea And Why It Would Be Successful Table of Contents Table of Contents 2 Your Business Idea 3 Finances 6 Start Up Expenses 6 Market Research 10 Sales and Distribution 13 Competition 14 Getting Started 17 Stock 17 Licenses and Permits 18 Your Business Idea 20 References 23 Your Business Idea What Are Your Reasons For Wanting To Start Your Own Small Business? The plan is to start up a small business as a coffee shop in Sydney, Australia. It has been observed that the people of Australia consume coffee on a daily routine basis (The State of Queensland, 2013). In this context, it can be perceived that the demand for coffee will grow along with the developing economic conditions in the upcoming years. Moreover, with the increasing demand for coffee among the people of Australia will assist in better development of this business owing to which this idea can be noted as an effective practice to attain better growth opportunities and generate income in a less risk and sustainable way. What Are Your Objectives For Your Business Over The Next Twelve Months? In its performance during the initial 12 months period, the coffee shop will aim to provide quality coffee and services for the people to have a better recess experience in Australia and thereby strengthen its foothold in the market with due significance towards its mission and vision. Moreover, with greater demand for coffee, the main aim of the coffee shop will be to be recognized as one the best coffee in Sydney in its future endeavors. What Are Your Objectives for Your Business Over the Following Two Years? The coffee shop, intended to be established following this market plan, after developing a better position in the market will aim towards increased profitability as well as towards being reputed as a renowned coffee shop in Sydney over the next two years. List All the Products And/ Or Services That You Plan To Provide At the Commencement of the Business On the commencement of the coffee shop, the consumers will be provided with various high quality gourmet and espresso coffee services and products which is currently observed to be highly favored by the local customer groups in Australia. The coffee shop will provide better quality coffee with enhanced fragrance or aroma and thus create a differentiation within its market sphere. The shop will also be equipped with a friendly atmosphere and staffs so as to give a high quality service to the customers. List All the Products And/ Or Services That You Plan To Provide In The Future In the future, i.e. almost within the next two years, the coffee shop with better positions in the market segment and demand will provide a variety of coffee products to its consumers. The products will include brewed hot and cold coffee products, pancakes with chocolate coffee fillings and ice creams with blended coffee aroma. Who Will Operate The Business? It is worth mentioning in this context that the business of the coffee shop will be based on sole proprietorship. Sole proprietorship signifies that the business will be owned by a single individual who will be entitled for all risks as well as profits resulting from the conduct of the integrated organizational performances (Linn-Benton Community College, 2013). Who Else Will Be Employed By The Business Immediately? In the initial stage, the coffee shop will employ ten experienced staff, who will be liable to conduct various responsibilities in relation to the business functions and thereby render an effective structure as well as working culture to the company. To be precise, these staff members will be responsible for preparing coffee products and meeting the requirements of the customers to ensure consistent growth in customer satisfaction, which is often regarded as an essential constituent for the long-run sustainability of any new start-up firm. Who Else Will Be Employed By The Business In The Future? In future, with the growth of the business, the coffee shop will employee additional staff in order to provide better quality services as well as coffee products to customers rendering lesser significance to their experiences. Moreover, bakery experts will be employed for the preparation of pancakes and ice creams which shall ensure quality food products as per the tastes of the targeted customer groups. Finances Capital Requirements The coffee shop will commence the coffee shop business with an initial capital of around 120,000 AUD. The proprietor will personally invest 70,000 AUD and the rest of the amount i.e. 50,000 AUD will be procured through loans from banking sectors. The proprietor will acquire the additional fund from the Commonwealth Bank. The equipment required for the coffee shop business is as follows: Already Own Approximate Value (AUD) Espresso Equipments 700 Total 700 Need to Acquire Approximate Value (AUD) Coffee Brewer 1,000 furniture 1,500 Electrical and plumbing needs 500 Total 3,000 Start Up Expenses Particulars Amount (AUD) Business Name Registration 15,000 Insurance 50,000 Initial Stock 20,000 Licenses and Permits 10,000 Advertising and Promotion 6,000 Printing and Stationery 4,000 Lease/Bond 12,000 Telephone -Landline -Mobile 1,200 500 Total 118,700 Potential Income/Turnover Pricing The proprietor will adopt a penetrating pricing strategy with the objective of charging low price at its initial stage. When the business of the coffee shop will acquire a better position in the market segment it will charge higher prices as per the purchasing power of the customers, simultaneously improving the quality of the products as well as services. The cost of production will be calculated on the basis of material consumed, salaries paid to employees or staff and other expenses incurred. Turnover The turnover or profit will be calculated on the basis of expenses incurred after deducting the income earned through the business operations on a monthly basis. In this respect, from the first year, after the business commencement, the coffee shop is expected to earn a profit of around 150,000 AUD. What Expenses Will You Incur Over the First 12 Months of Operation? Particulars Amount (AUD) Accounting 20,000 Advertising 10,000 Bank Charges 25,000 Cleaning 6,000 Fuel, Light & Power 10,000 Insurance 50,000 Interest 10,000 Internet Service Provider 8,000 Lease 30,000 Legal 15,000 Motor Vehicle -Fuel and Oil -Registration & Insurance -Repairs and Maintenance 10,000 12,000 8,000 Postage 5,000 Printing 4,000 Protective Clothing 8,000 Purchase -Equipment -Stock -Raw Material 35,000 25,000 10,000 Rent/Bond 100,000 Stationery 4,000 Superannuation NA Telephone -Landline -Mobile 6,000 5,000 Other 10,000 Total 426,000 What Are Your Current Monthly Financial Commitments? Particular Amount (AUD) Rent/Mortgage 8,000 Personal Loans NA Schooling 2,000 Petrol 1,000 Car running 800 Food 1,500 Clothing 1,000 Recreation 700 Medical 500 Total 15,500 List any current mortgages, personal loans, hire purchases, leasing other commitments you hold Financial Institution Type of Loan Repayment per month Period of Loan NA NA NA NA Market Research In the current context, it has been observed that there is a great demand for coffee among the people of Australia. Moreover, the demand for coffee is recognized to be growing immensely in Australia (The State of Queensland, 2013). However, before the inauguration or implementation of the business idea, it is necessary to obtain an in-depth knowledge regarding the industry prospects in Australia. Hence, a market research needs to be conducted prior to the final execution of the business idea. In this regard, questionnaires were prepared to identify the demand of coffee in the market segment of Sydney before starting up the coffee shop business. The questionnaires are as follows: 1. Gender: Male Female 2. Age 3. Define your economic status Poor Below Average Average Above Average Affluent 4. Describe the area in which you reside Urban Rural 5. Do you consume coffee? Yes No 6. Reasons for drinking coffee… Like the taste Smell of coffee Addicted to coffee Any other reason (Kindly specify) 7. How many cups of coffee do you consume daily? 2 or less cups 3 to 5 cups 6 to 8 cups 9 or more cups 8. The occasion on which you drink coffee Never Rarely Often Always In the morning when you wake up At the time of breakfast At the time of lunch At the time of dinner At bedtime At the time of visiting restaurants for meal At the time of stress Number of Questionnaires and Results A set of 200 questionnaires were developed with the intention of determining the demand for coffee in the market segment of Sydney and simultaneously obtain a primary understanding of the consumer buying behavior which can have a significant impact on the sustainability of the planned coffee shop. Person Consulted and Summarize the Information Collected During This Consultation The survey was conducted among 100 people who were accessed from the outlets of cafe shops and restaurants. The survey was performed among the common people with the intention of determining their preferences for coffee. Moreover, the survey was also performed among 100 students in universities and colleges making the selected population of 200 respondents. Profile Your Prospective Customers or “Market Segment” The results obtained through the survey, apparently disclosed that the demand for coffee has been increasing in the urban areas of Australia among the average and the affluent economic groups of customers. It has been conceived that coffee is consumed mainly by the young and the middle aged people who are either office workers or shoppers irrespective of their gender. Many of the surveyed people stated that they were addicted to coffee owing to which they intended to consume at least 3 to 5 cups throughout the day. Sales and Distribution Why will your prospective clients use your product or services? Particularly, influenced by the low price and good quality features of the products and services intended to be offered through this business idea, customers are expected to use those commodities. How will you sell your product or service? (e.g.: from home, production point, door to door, wholesale, retail, mail order etc.). In its sales and distribution systems, the coffee shop will provide quality coffee products as well as services from its outlets directly. Moreover, the coffee shop is required to acquire quality aromatic coffee with the motive of providing customers with quality coffee drinks and products. In this regard, the shop is required to have experienced distributors who will also be able to ensure a significant quality standard. In future on the development of the business the coffee shop will provide home delivery services for potential customers. It will be irrelevant for the coffee shop to directly approach the consumers with the aim of sales as well as distribution rather than following the involvement of intermediaries in the initial stage with the intention to preserve brand image and customer relation effectively. Will you sell your product to the wholesale or retail market? As the product is regarded as a perishable consumer product, it will be sold directly from the production unit rather than through wholesale or retailers. Who will the wholesaler sell to? NA Will you sell locally, regionally, statewide, nationally or internationally? Initially, the products and services offered will be sold locally. How will you deliver your product to the point of sale? The production unit itself will be operating as a point of sale for the intended products and services to be offered through the coffee shop. Competition Who is Your Competition? It has been observed that fierce competition exists within the market segments of Sydney among coffee shops, restaurants, pubs as well as clubs among others. The main factors affecting the competition level among the coffee shop owners and other businesses including restaurants and clubs have been identified with respect to price, product quality and services offered to the customers. In this respect, the planned coffee shop will provide coffee products at a low price with the intention of attracting a gradually increasing customer base and brand value. What do they do well? The competitors aim at offering quality coffee products as well as services in order to compete and perform effectively which should also be considered when executing the business idea (The State of Queensland, 2013). What Can You Do Better/Differently? In this regard, the coffee shop is required to adopt a differentiation strategy with the objective of performing its operations in a proficient manner. With the assistance of the differentiation strategy, the coffee shop will be able to offer unique coffee products such as gourmet coffee and pancakes with chocolate coffee fillings among others for performing its business operations in an effective manner. Moreover, the coffee shop is required to adopt a penetrating pricing strategy with the intention of providing products as well as services at lower price at initial stage to persuade a larger proportion of customers from the target market. These strategies will assist the new coffee shop to perform its business operations in an effective as well as efficient manner. Moreover, as the supply chain process of the company will be based on quality assurance, the new coffee shop will be able meet the requirements of customers in the market segments of Sydney in terms of quality standards with greater excellence (Bordes, 2009). Getting Started Do You Intend To Buy, Lease, Hire Purchase Or Rent The Equipment For Your Business? The business for opening up a coffee shop in Sydney does not require any huge investment in the equipment area. Investments are mainly made in acquiring the coffee shop or outlet and for the purchasing of necessary cooking equipments for the preparation of the products to be offered to customers. Additionally, investment is also required in decorating the shop to render a comfortable experience to its customers. Furthermore, high quality coffee will be procured from local suppliers in the initial stage of the commencement of business in order to obtain cost efficiency and also to perform responsibly in the community. All these requisite things will be purchased by the proprietor of the coffee shop. Stock What stock will you purchase on a regular basis? A stock of raw coffee, bakery products and other raw materials required to produce the finished products will be maintained on a continuous basis in the company warehouse. Licenses and Permits Business Name Registration The coffee shop business is required to be enacted with standard registration, licenses as well as permits. Notably, the obtainment of appropriate licenses and permits will not only make the organizational processes more transparent and persuasive for its stakeholders, but it shall also prove beneficial in assisting the business to actively protect the environment as well as consumers’ interests with regard to safety. The coffee shop is a sole proprietor business and in this respect, the name of the coffee shop is required to be registered in the state or territory where the shop will be operating. Moreover, the name of the business should be registered under the ‘Australian Securities and Investment Commission’ (ASIC) (The State of Queensland, 2013). ABN/GST Registration The coffee shop is also required to be registered in order to perform its business operations in a legal manner. In this regard, the Australian Business License and Information Service (ABLIS) will assist in the registration process with all requisites. The coffee shop is required to acquire Australian Business Number (ABN) for the commencement of its business. This ABN will be the key identification number for the coffee shop. Moreover, the coffee shop is also required to register for the Goods and Services Tax (GST). The GST is mandatory for commencing profit oriented business operations (DBI, 2013). Furthermore, the coffee shop is also required to file a Tax File Number (TFN) as an individual entity with the intention of dealing with the taxation regimes enforced by the Australian government[1] (DBI, 2013). What Essential Licenses/Permits Do You Need To Operate Your Business? The coffee shop is required to be insured in order to survive natural uncertainties. The coffee shop should also assess as well as manage all these risks by obtaining proper insurance coverage with the intention of performing its business operations appropriately and without interruptions. In this respect, the coffee shop will insure its fixed asset such as premises and electrical as well as cooking equipments. The insurance coverage of these assets and equipments will further assist the coffee shop to perform its business operations effectively without any interruption in case of damages or destructions with relation to any kind of unforeseen circumstances [2] (DBI, 2013). Insurance Requirements Furthermore, the coffee shop is also required to acquire an insurance coverage for public liability. This insurance coverage will also assist the coffee shop in meeting the costs as well as expenses of injured person in case of any safety hazard caused due to the fault of the employees [3] (DBI, 2013). Proposed Premises – Home based or Commercial Premises. Location. It is worth mentioning in this context that the coffee shop will be in a commercial premise in the market segment of Sydney. Ownership Structure – Sole trader/ Partnership/Company Moreover, it is a sole proprietor business. Your Business Idea What Small Business experience do you have? I do not have any prior experiences of operating a small business independently, even though I have been working with few small sized enterprises and have gained substantial experiences in the field. List the skills you need to operate this business. Appropriate business skills such as communication skills and decision making skills should be enhanced substantially to commence the business idea effective as planned. A certain degree of problem solving skills and personnel management skills are also required in order to develop the business in an effective manner from a futuristic perspective. What skills do you have now that will allow you to produce your proposed product or provide your service? I believe to possess efficient communication skills and decision making skills which will allow me to commence and control the coffee shop business idea. What skills do you need to gain to further develop your product or provide your service? The proprietor is required to acquire problem solving skill and personnel management in order to develop the business in an effective manner in future. Tick areas that you currently hold business management skills in Bookkeeping Record Keeping Marketing Personnel Management Time Management Motivation Communication skills Planning and Goal Setting Insurance Business Licensing and regulation Customer Service Other References Bordes, J., 2009. Strategic Management Assignment. Application. [Online] Available at: http://www.aiu.edu/applications/DocumentLibraryManager/upload/Jeff%20Bordes.Strategic%20Management.pdf [Accessed March 11, 2013]. [1] DBI, 2013. Licences and Business Registrations. Operating a Business. [Online] Available at: http://www.business.vic.gov.au/operating-a-business/how-to-start/licences-and-registrations [Accessed March 11, 2013]. [2] DBI, 2013. Property and Assets. Operating a Business. [Online] Available at: http://www.business.vic.gov.au/operating-a-business/how-to-start/insurance/property-and-assets [Accessed March 11, 2013]. [3] DBI, 2013. Public Liability. Operating a Business. [Online] Available at: http://www.business.vic.gov.au/operating-a-business/how-to-start/insurance/public-liability [Accessed March 11, 2013]. Linn-Benton Community College, 2013. Sole Proprietorship. Upload. [Online] Available at: http://cf.linnbenton.edu/wed/dev/fichtns/upload/Sole%20Proprietorship%20(p.%20347-349).pdf [Accessed March 11, 2013]. The State of Queensland, 2013. Useful Cafe and Coffee Shop Industry and General Business Contacts. Industry. [Online] Available at: http://www.business.qld.gov.au/industry/food/starting-a-cafe-or-coffee-shop/cafe-coffee-shop-industry-business-contacts [Accessed March 11, 2013]. The State of Queensland, 2013. Getting Into the Cafe and Coffee Shop Industry. Industry. [Online] Available at: http://www.business.qld.gov.au/industry/food/starting-a-cafe-or-coffee-shop/getting-into-cafe-coffee-shop-industry [Accessed March 11, 2013]. The State of Queensland, 2013. Registering Your Business Name. Business. [Online] Available at: http://www.business.qld.gov.au/business/starting/business-licensing/licences-and-registrations/register-name [Accessed March 11, 2013]. Read More