Yan Small Business Enterprise

An Executive Summary

The following is a synopsis of a business plan that includes the key features of the current market place, for my proposed business proposition. Also included is the business description funding summary and key financial predictions

Introduction:

Athena is a Café which is situated in Guildford, Surrey; it will aimto meet the needs of students from Guildford College and Surrey University. The area which we will be situated in is predominantly rich and has a gap in the market for our cuisine. Moreover the Hospitality Industry is the fourth largest industry in the UK and delivers £53 billion annually, and therefore this suggests that there is room for this type of business. Moreover the industry in the UK employs around 2.7 million people; nearly half a million people are employed in restaurants. Additionally the number of restaurants has grown from 46,000 to 63,000 in 10 years. This suggests that there is a demand for restaurants and small business such as Café Athena, and thus, it is likely that there will be a high demand for our product. The most number of meals are sold by the quick service sector, and Athena will also be offer take aways, therefore increasing the number of customers and appeal. . (The UKHospitality Industry, 2010)

There are many factors which can have a contribution to the success or failure of a business. Some of the trends which will influence mybusiness are:

Unique menu and innovation Traffic will build for casual restaurants, cafes and donut

outlets Rise in beef prices and lower chicken prices Population shifts and diversity impacts on menus Healthful menu offerings

(10 Trends shaping the Restaurant Industry, 2013)

Competition is healthy for any business because it creates a higher standard of service and product and our competitors are:

Pizza Hut, Dominos, McDonalds, Burger King Nandos.

In order for those big to keep a competitive edge they must adapt tothe newest trends to ensure success. In order for the business to besuccessful, the trends mentioned above will be applied to Athena, sothat we consistently stay ahead of any competition.

Some of the trends which will be applied to my business are healthful menu offerings and constant menu innovation. Menu innovation is important because it constant improvement is essentialfor repeat businesses. Moreover as people are getting more conscious of their health, offering healthy products will appeal to a wide target market and thus make more profit. Some of the ways we can adapt to this trend is to use organic products and offering fresh salad as well as fruits.

Target Market:

A well-defined target market is crucial to the success of a business. A small business can effectively compete with large companies by targeting a niche market. The direct target market for Athena will be students aged 16-25. Due to the different food that the café will serve we will have a wide range of appeal and therefore make more profit. One of the ways we will appeal to a wider market is by offering breakfasts. This will attract local workers because it is convenient for them to eat in our Café before they go to work, whilst reading the newspaper etc. Miller, (2011)

Carefully examining the target market is crucial because in order for the business to be successful, the size of the market needs to be worked out. Once the market is scoped then we can then figure outhow much we expect to sell. Buckley, (1998)

The target markets needs are:

Cheap

Good quality Quick service

Currently there are a number of restaurants which currently are trying to meet these needs such as:

Nandos, Frankies and Bennies Gourmet Burger

The big chains are currently meeting the needs of their target market by offering high quality food and for relatively cheap price.Moreover an advantage which big businesses such as Nandos is that they offer discounts for students, loyalty cards which is a big incentive for students to come back as they get rewards. Barrow, (2012)

However due to our geographic location, we have an advantage over these restaurant chain, because we are closer to our target market and therefore will be more appealing to them.

Demographics:

According to a survey of 2,000 UK teenagers and adults, the average expenditure of those aged 16-25 is £110 per month. These figures suggest that this type business is very popular with people aged 16-25, which is our specific target market and thus our Café will meet the high demand for this type of business and product. (Takeaway UK, 2013)

Geographic Location:

‘The location of your business can be a major contribution to its success or failure’ Lyon, (2008, p.3)

There are two types of location, primary and secondary. A primary location is a major trading area of a town/city and depending on thecity there can be one or two. Areas away from this location are called secondary. As Athena is based close to our target market the benefit of being in a primary location are nullified and works out in our advantage, due to the lower cost in rent and less competition. Moreover due to the lower costs in rent, this gives us the opportunity to invest more money into marketing, so that we can appeal to more people by advertising our product.

Before choosing the location the following points were considered:

Competition Proximity to customer Foot traffic Image

Lyon H., (2008)

Competition:

Having competition is important in the industry because it helps businesses improve constantly by competing with others. Moreover if there is competition then that means that there is demand for a product. When analysing competition it is important to know their product range, prices, discount structure, delivery arrangements, minimum order quantities and terms of trade. Buckley, (1998)

Café Athena

In order for my business to be successful it needs to have a unique selling point and stand out from competitors.

The direct competitor of Café Athena is the college canteen. The college canteen sells a range of food, and has different menus everyweek. This puts us at a disadvantage because our menu is not as diverse. Moreover the college canteen is appealing to students because the food is not expensive, is of ok quality and they are situated very close to students, which make them more convenient. However, the quality of our products is much higher therefore the students that do try our product will prefer it and come back. Moreover our food is of much higher quality and the price is relatively low, which therefore puts us at an advantage.

Another advantage of our Café is that our products will be healthier than that of our direct competitors. This is because we will use organic products, such as vegetables and meat in order to produce the highest quality food. This will be appealing to studentsas people are becoming more self-conscious about their health and their looks.

Compared to the college canteen which offers unhealthy deep fried food, our Café will be much more popular with students and their parents because the food which we offer is healthier. In order to overcome these barriers our advantages will be advertised to our target market, which will result in our cafe becoming more popular with students than the canteen.

Indirect:

Moreover Meet the Greek is another competitor located in Guildford and also sells Gyros. The difference between Café Athena and Meet the Greek is that we are aiming at different niche markets. Our business will be aiming at students and will be selling gyros, burgers, breakfasts, deserts and English breakfasts whilst Meet the Greek specialises in traditional Greek food.

The advantage of Meet the Greek is that the business already has an image and a good reputation. By already having this reputation it will be a challenge to attract customers which are loyal to him. Moreover as his business already established it, he could undercut my product and therefore attract some of our customers. In order to overcome these barriers we plan to offer discounts to students from

Guildford College. By offering discounts to students from Guildford College we are targeting a very specific market, and this will give us a competitive edge.

As seen from the picture above due to the location of Café Athena and Meet the Greek, we have a big advantage of attracting students from Guildford College as we are very close to it.

Other competitors are pubs and restaurants in the local area. We both will be aiming for the similar market and that is people walking by. The prices between Athena and the local pub do differentiate. Due to our Café being more student friendly, the prices will be lower than the pubs.

An example of two dishes which we both will be selling is burger andchips, and the price of our product will be around £4.00 in comparison to the Kings Head which offers the same product for £4.50. Due to our prices being more student friendly, it is highly likely that we will attract more students than the Kings Head who would perhaps be attracting more adults.

In order to overcome indirect competitors we will offer discounts tostudents from Guildford College and also we will make our Café visually appealing to by walkers.

Meet the Greek

Café Athena

Marketing:

‘Marketing is the management process which identifies, anticipates, and supplies

customer requirements efficiently and profitably as suggested by J.Blythe, (2005:p.2).

Businesses rely on customers in order to be successful and

attracting customers is one of the challenges which come with

running a business. In order to attract customers, it’s

important to have an efficient marketing plan. Effective

marketing consists of 4 important fundamentals. Reuvid, (2011)

Price:

As suggested by Wright, (1997:p.19) ‘the price should represent the overall

experience’. The pricing in café Athena will be affordable for

students in order to meet their needs. Students are especially

sensitive for pricing as they have a low income and the price

must be affordable. When pricing the menu we will take into

account what the competitors charge and pick a pricing

strategy in order to meet the attract our customers.

Barrow, (2012)

Place:

Place is the point where products are made available for the

customer. It is crucial to consider the most cost effective

way of making a product easily available to customers. (Business

Management, 2013)

Our customers will be looking for our product online, if they wanted to reserve a

place or simply look at our menu, we will have a website which consists of basic

information such as:

Location

Number

Email

Menu

Because e selling is growing in popularity, it is a beneficial way for us to market our

Café and our product, because it is a trend. Furthermore by making our product

available online we will be cutting our costs on advertisement because it is cheap to

run a website. Mercer, (1996)

Advantages of location:

Our location is within walking distance our target market which will be an incentive

for students to choose us over bigger chains in Nandos who are located 15 minutes

away. Moreover students don’t have to pay to park their car, as they have already

parked their car in the college grounds, this in return will increase the amount of

money they spend in our café. , therefore our product is easily available for our

customers.

Disadvantages of our location:

Because our Café is next to a College, there is a lot of

competition from local pubs. Moreover there are no parking

spaces near us, and because of the College near us there are

no parking spaces. This could be a problem because it could

irritate our customers and put them off. Ultimately this can

create a bad reputation and put customers off coming back

again.

Promotion

As suggested by Proctor (2008, p.231) promotion is “methods used by a

business to make customers aware of its product”.

Due to our limited funds and the cost of starting the

business, our advertising will be limited. In order to attract

customers we will promote our Café by offering a limited

number of dishes for free for college students. This will

allow us to get feedback from students and we can improve our

product so that we can increase customer satisfaction.

Moreover it will allow for efficient marketing as this will

create word of mouth. Moreover, there is a chance to make a

deal with Guildford College so that they can post an advert of

our café on the college website.

(Reference restaurant man or a book)

Some of the options we have to promote our Café are:

Leaflets

Radio (eagle)

Boards

College websites

Online Ads

. Wright, (1997)

Product

“A product is a good that is sold to customers or other businesses. Customers buy a

product to meet a need” as stated by Hooley, (2012, p.101)

The product is perhaps the most important fundamental to get

right when trying to open a business. Without a good product,

the price, the promotion and the place doesn’t matter; the

business will fail.

In order to appeal to our target market we will create a

student friendly environment, by employing students as

employees as they can relate. Moreover in order to make us

more appealing to our customers, the food which we will serve

will be in packaging which could be taken out, this gives the

customer choice and therefore satisfaction.

Consequently our product will be more appealing to students

than what is already offered onsite because our food is unique

and of high quality. We will offer a wide range of food which

isn’t served in the college.

In order to make the our Café more appealing to students, we

will accept bookings via email and telephone, this will reduce

any waiting time in contrast with the college where students

queue when in peak times such as break and lunch.

Business Organisation and Administration

This business will be run in a business partnership by two people. The reason for this is because by sharing the businessbetween two people, we are more likely to succeed as we can

both use our funds in order to invest, which allows for selecting higher quality products and services. Brooks, (2014)

Moreover we can both share our expertise therefore increasing chances of success. Due to us both sharing responsibility it allows for specialisation, where one of our strengths can complement each other. Furthermore both of us will contribute and this will allow for more flexibility in running the business. Consequently there is less time pressure on each of us, and therefore increasing our chances of successfully running the business. Wallace, (2014)

In order to successfully run the Café, we will need four waiters, two of which full time and two part-time. Moreover a main chef and two assistant chefs will be required, the main chef and one of the assistants will be full time and one part time. Moreover external management will be used for marketing strategies in order to appeal to our target market correctly, in the beginning stages of the business.

Due to the business being small, there is no need to hire internal management which would result in extra costs to the business. Due to the legal structure there will be two managers, and we will be responsible for:

Management of staff Selection process Purchasing of stock and equipment Pricing and marketing

The legal responsibility of our partnerships is:

Any losses the business makes Bills for things bought for the business such as stock Licenses Costs Problems Employment

Godsmark, (2006)

Resources and Operations

As seen from the illustration above, the Café needs refurbishment and the tables need to be re-arranged in order for us to fit in more covers, which will result in extra money. Moreover, cutlery, chairs, tables, fridges, freezers and some ovens need to be fitted in. Only one oven is requiredas there is already one in place, and also a refurbishment is required. The refurbishment will consist of the Café being painted and decorated again as well as various pictures and other accessories to improve our image. Consequently as seen from the Gantt chart below, the progress and timekeeping of each project must be strict in order for us to meet our task and open the Café on October 12.

It is essential for the target dates to be kept to because if we have ordered electricians to have finished b Friday the 14th of Sep and they haven’t, this will get in the way of the people who will be fitting in the ovens, fridges etcetera. Moreover if our fridges are not in working conditions, this will then delay our plans of ordering stock and therefore delaying other plans. This chart is especially useful becauseit sees what should have been achieved at certain dates and whether we are behind or not.

Financial

Our partnership amounts to £30,000 altogether. However, in order to successfully start up the business, refurbish, order stock and accessories, more money are needed. Prince’s trust for example is a company which we can turn to and they can

lend us up to £5000. In order to successfully start our business we will borrow 20,000 from Santander and pay it over 4 years.

As seen from appendix 2, our business is predicted to make £123,000 in the first year, by working six days a week and an average spend of the customer is £7.50. However, due to loans,refurbishments, materials, and equipment, it’s predicted that we will make a small loss in the first year. The calculations were predicted by using footfall and a six day trade, as seen from appendix 2, due to our target market being students, the number of customers will decrease significantly within June, July and August because of summer holidays. Additionally, our business is predicted to make a 20% increase in profit in the second year and a 25% increase in the 3rd (see appendix 3). Theprofit of 20% is due to the significant decrease in costs, as no refurbishments, equipment etc. needs to be done. Moreover, the 20% is based on the information from year 1, however, by investing in marketing strategies and improving our products based on surveys handed out to students, the profit could be significantly more than 20%.

Consequently, due to us borrowing money from Santander, this is with the aim to have sufficient capital to deal with any expenses for the first 6 months. This is crucial in order to run the business successfully, because many small businesses fail because they are under-capitalised. Godsmark, (2006)

Once the business has started running efficiently, we will look to make a deal with the college to advertise us on the college website and allow us to email students with advertisements. This should significantly increase our net income because the number of customers purchasing from us willbe significantly more and the average spending will go up.

Our aim will be to make a profit in the first year and those are under predicted figures, if we do not make a profit in thefirst year, we plan to break even, which would mean that we need to rise our sales and make an extra £11,402.48 in order to break even in the first year. To do so, we must increase the number of customers by 1520 in the first year. This can bedone especially during the summer holidays, because that is when we expect our sales to go down the most, however, with

the right marketing strategy and perhaps aiming at locals and especially at customers from local pubs, it is possible that we could not only increase our customers, but make a profit within the first year.

Appendix 2:

IncomeAvg. 7.50

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday

Total

Gross Profit

Jan 100 250 300 350 150 200 1350

10,125

Feb 120 230 290 330 220 210 1400

10,500

March 140 300 250 400 230 215 1535

11,512.5

April 100 200 210 230 160 190 1090

8,175

May 300 250 180 300 183 189 1402

10,515

June 250 180 150 140 120 200 1040

7,800

July 100 120 140 150 110 230 850 6,375August 110 110 120 130 140 150 760 5,700September

350 340 330 320 290 290 1920

14,440

October

290 350 320 325 333 292 1910

14,325

November

292 293 392 323 338 310 1930

14,475

Decemb 200 220 190 195 195 220 122 9,150

er 0Total Gross profit

123,052,5

Appendix 3:

Profit and loss account:Year 1 Year 2 Year 3

Materials 7,000 N/A 750Labour 30,000 31,500 35,000Equipment 10,000 2,000 3,000Electricity

5,000 6,500 7,000

Gas 4,000 4,500 4,000Water 6,000 6,500 6,000Refurbishments

7,000 500 800

Stock 35,000 32,000 41,000Tax 24,610.5 26,000 28,000Loan 5844.48 5844.48 5844.48Costs 134,454.9

8115,344.48

131,394.48

Gross Income

123,052.5 149943.4 180,706.525

Net Income -11,402.48

34,599.02 49,312.045

Bibliography

Standard format and layout document

Ghant chart

Refit of counter give a hypothetical date and a finishing dateis 15th of June.. opening date is . 29th of July..

Electricians

Gas

Financial

A description of your funding requirements (loans, overdrafts, mortgages, investment), your detailed financial statements (year one cash flow forecast, projected profit and loss account, break-even calculation)

Page 107, of Adrian Buckley, can use the information written about the calculation of the finance by finding how big the target market is and what the average spenditure of a person is in that area.

Appendeciess:

Bibliography

Standard format and layout document

Bibliography:

http://www.pearsonschoolsandfecolleges.co.uk/FEAndVocational/HospitalityAndCatering/GCSE/WJECGCSEHospitalityandCatering/Samples/Samplepages/WJECGCSEHospitalitySamplePages.pdf

http://nrn.com/food-trends/10-trends-shaping-restaurant-industry-2014?page=2

http://www.dailymail.co.uk/news/article-2303861/Takeaway-UK-Average-Brit-spending-1-320-year-fastfood-buying-12-meals-month.html

https://www.gov.uk/business-legal-structures/ordinary-business-partnership

Brooks, (2014)

Wallace, (2014) http://www.bbc.co.uk/schools/gcsebitesize/business/aims/partnershipsrev2.shtml

Information which may be used later: