Nature of Business - Case Study Example

Student’s Name Instructor’s Name Course Date Nature of Business This particular analysis is about a new business to be started in the city of Ballarat. This business venture is a restaurant. We shall be offering quite a range of products and services. Our priority is to offer sit-down meals. We look forward to offer mainly first foods for most of our customers. Research and development will be very essential in helping us map strategies that will help us be established as the best restaurant in the region. Additionally, our expansionary policies shall be guided by our philosophy and mission. Start-up Mode There are overwhelming advantages that propelled me to focus on a new business. When one operates a new franchise, he or she will have to be guided by the mother-business in almost all aspects of managing the business. One would be expected to operate within the limitations of the mother-business. This in most cases act as a hindrance to innovation and creativity. Therefore, I wanted to give this business venture a whole new platform that will embrace exploration. It gives room for brainstorming which is an oasis of great business ideas. Similarly, another reason why new business was viable is based on the fact that it could be established on varied budgets. Ownership Structure We shall be running this restaurant as a limited liability company. That implies that after a while, we will be issuing a prospectus in order to give an opportunity for the public to subscribe for shares. This is the way through which the public acquire ownership of this business (Bandler 88). There quite a number of reasons behind the selection of a limited company. A limited company has an upper hand when it comes to soliciting capital for its operations. Capital will be raised through allotment of shares to the public. Besides, a company is a legal person and therefore can sue or be sued. This gives the company the potential to manage its assets better. At the same time, a limited liability company is operational into unforeseeable future (Ittelson 108). That is to mean, its continuity is not limited to the existence of the owner. The personal or individual risks involved in this particular type of business include dilution of ownership. When the public purchases shares of the company, they take over ownership. They determine the course of the business including the distribution of profits. At the end of it, for the owner to have stake in the business he must purchase shares in the company. That means that he will be displaced from the ownership of the business if he does not acquire shares of the company. Market Research Plan I. Setting Objectives of the Market Research To identify market segments To identify the demographic features of the potential customers To assess the feasibility of market entry To establish market demand and variations in prices To assess the level of usage of the products in the market To analyse the winning strategies adopted by competitors To study the uniqueness of the region and how it affects market demand II. Sample collection Select the proportion of the sample that will be representative, say 3% The sample should be large enough to increase accuracy levels The sample must be a representation of the demographics of the population III. Research Methods Quantitative methods: this involves the use of mathematical approach to analyse the research findings. Qualitative methods: these include surveys, interviews, focus groups, etc. Budget Preparation Estimate of Start-up Costs Inventory S26,000.00 rent for property S12,500.00 furniture and fixtures S32,000.00 silencing S2,450.00 Equipment S18,050.00 marketing & promotion S30,120.00 others S8,500.00 total S127,170.00 Assumptions Gross profit margin 45% The sales are projected to increase at the rate of 20% for the first year Expenses are projected to rise at a rate of 15% Therefore, in calculating cost of goods sold, 100%-45%=55% Location This restaurant is supposed to be operating from Golden point near Redan point, in Ballarat city. The place is not only ideal for business, but also strategically placed. The place attracts both the locals and tourists from Eastern countries. Besides, the weather is also conducive throughout the seasons. The kinds of business operating in this region are the main sources of our customers for various kinds of meals we will be offering. Market Positioning The target for this business is to tap into the wonderful market in this region. We are focused on reaching most of the people in the region. We are focused to ensuring high levels of hygiene and health standards. We have invested a lot in product differentiation to ensure our products are exceptional. We want to build an image of offering high quality meals to our customers in the region. For us to break through faster, our pricing policy shall be friendly to our customers. We shall be pricing three quarters of our meals at 75% of the normal cost. We are doing this to make sure we attract enough customers during the first phase of operation. When the business catches up, we shall be reviewing this price slowly so that our customers do not feel the effect of the increase. We have also put in place mechanisms to help as deliver foodstuffs to our customers around. They will be allowed to make orders online and their foodstuff shall be supplied to them. Competition As opposed to monopoly, the café shall operate in a competitive market. This is because there are already established cafes that are operational in the area. This is the reason strategies have been put in place to ensure the business has a competitive advantage. The strategies designed as guided by our slogan and philosophy has been based on the weaknesses inherent in our competitors that we would wish to exploit. Our market position is an illustration of some of the mechanisms that we have put in place to ensure that we establish ourselves as a top-notch restaurant. One of the opportunities that the most established restaurants have in this region is the diversity in the kind of foodstuffs they offer. Besides, most of them have other outlets in other regions that help them cushion their income. That has been the foundation upon which most of the businesses are built. It helps them deal with fluctuations in the level of performance in the businesses. Promotion Promotion is very important to new businesses of this kind. It is the best way through which the restaurant will gain publicity from the people in this region (Hopkins 54). We have set aside funds from our start-up kitty. Besides the amount of money set, we look forward to acquiring some more funds from outside sources to boost our marketing strategy. Nevertheless, since we are already limited at the beginning of this business, we look forward to avoiding expensive media like the newspaper. This is because we have not established the kind of enterprise that we require in order to attract this wide range of customers. We have to put in place facilities that can accommodate wide base of customers. Therefore, we will be using mainly brochures to advertise our business during the first year of operation. Similarly, we will be issuing fliers to every customer who comes to our place to distribute to other potential customers. As we continue expanding, we will also consider other means of advertisement. Primary Data Quantitative data represents data that can be represented numerically and analysed using statistical techniques (McDaniel & Gates 112). Examples include experimentation, observation, etc. The most commonly used tool for gathering quantitative data is survey. Qualitative data obtains rich deep and detailed information. Interviews and focus groups are the most common qualitative techniques. Interviews I will undertake the task of carrying out interviews for the sample population chosen. This will comprise of mainly people around the restaurant. There will be predetermined questions that are either similar or closely related to others. The question will be specific in order to receive reliable feedback. This will be conducted to basically consumers and restaurant owners in the region. It is supposed to gather information on the nature and challenges of the business. The interview is also meant to address the trends in the industry. Questionnaire When setting up a questionnaire, it is necessary to find out if the questions used are open-ended questions or close-ended questions or both (Wilson 191). The questionnaire will also include an online survey. At the same time, the types of demographic information required to be obtained is important when establishing if the questions asked should reflect knowledge, attitude or behaviour. The advantage of questionnaire is that the response is generally higher especially when carrying out face to face analysis. However, one disadvantage is that, this research process takes a longer time to collect the required data. Nevertheless, it will be appropriate for this target population. To be able to meet the objectives of this research, the following questions can be of essence: What is your most favourite meal? Which meals would you prefer for lunch and dinner? How much are you willing to spend on a single meal? What is the first thing that attracts you to a restaurant? The season that restaurants generally do well and badly. Secondary Data Business journals in the region have acted as the best source of information about businesses around. Weekly and monthly editions of these journals are a great source of information regarding business performances in this region. Most of the information provided on these journals is research undertaken by other professionals in the sector. This source is critical because it touches on many aspects of the hotel industry. Other sources include: Public libraries Online market research sources Chambers of commerce Government statistics External Sources of Funds The initial capital solicited by the owner of the business is about $75,000. Nevertheless, an estimate of the start-up capital alone was about $127,170. This indicates that there is a deficit of about $32,170. This amount will have to be financed by external sources. Since the relaxation in lending rates by the Central Bank, it will be more feasible to seek this particular fund from the bank. We will also be assessing other sources of financing to make sure that we adopt the cheapest financing options available to us. Duties and Responsibilities Restaurant Manager - (Salary 55,400 pa) Oversee daily running of the café Ensure compliance by all staff Handle employee disputes and needs Manage all supplies Chief Chef (46,500 pa) Oversee the cooking of all meals Review of restaurant menu Designing budget to be send to the manager for approval Waiters and Waitresses (35,400 pa) General service to customers Delivery of meals to customers Keep daily cleanliness Kitchen Staff (36,000 pa) Timely preparation of meals Carrying cleanliness inside the kitchen Management Information System Just from inception, the business is in need of a management information system. There is a need to keep and maintain information in the database that is very secure from any harm, destruction or prevention from access and use. The various databases must be suitable to the kind of information that is required in this particular business. One of the management information systems required in this restaurant is the Point of Sale System. This information system is useful when it comes to taking orders, delivering information to the kitchen and charging customers for the food consumed. The system will designed in a very way that will reduce technical problems. It can also be designed to accommodate processing of credit card payments. Besides the point of sale system, the restaurant will also benefit from communication systems. Business Objectives To attain sales growth rate of 30% pa. 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