Business Plan for an Entrepreneurial Product

This paper is a business plan of an entrepreneurial product, which can be commercialized to the general public. It evaluates the distribution, pricing and promotional plans for the new business venture.

Business Plan 1
ASSESSMENT 2 BUS302 T0218 – BUSINESS PLAN
By Student’s Name
Course Name & Code
Professor’s Name
Institution Affiliation
Date

Business Plan 2
Executive Summary
This paper is a business plan of an entrepreneurial product, which can be commercialized to
the general public. Thus, the venture considers using the existing $100,000 and seeking more
$100,000 to be loaned as a start-up capital. The main target market for this business will be
the local residents whereas others (secondary target market) will be reached through the
internet. In that regard, this case analysis evaluates the distribution, pricing and promotional
plans for the new business venture. The new business venture focuses to provide the best
quality espresso, pastry and coffee product. The provisions of products that best suit the
interests of customers imply that the new venture focusses establish a strong competitive
advantages and customer base. In that case, the business will focus on promotional and
advertising campaigns on the locally based residents, since this is a dominant targeted
segment. The basic of critical risk evaluation begins from production to distribution
processes. Throughout the business operations, the company should ensure to deliver
innovative products, which will establish a competitive edge over the top class competitors in
the coffee industry.

Business Plan 3
Table of Contents
Executive Summary...................................................................................................................2
Background (to the idea)............................................................................................................4
Mission.......................................................................................................................................4
Product (Service) Offering.........................................................................................................4
Market Analysis.........................................................................................................................5
Industry Analysis...................................................................................................................5
Primary Target market...............................................................................................................7
Marketing...................................................................................................................................7
Product...................................................................................................................................7
Pricing....................................................................................................................................8
Distribution............................................................................................................................9
Promotion...............................................................................................................................9
Financial Plan...........................................................................................................................10
Critical Risks............................................................................................................................13
References................................................................................................................................15
Appendices – Images of Products............................................................................................16

Business Plan 4
Background (to the idea)
This paper is a business of the ‘Best Bakery’ which will offer the best espresso, pastry and
coffee products. The new entrepreneurial venture will be incorporated in the Australia
demographics, managed and owned by its relevant partners. To enhance the success of the
business, the relevant stakeholder contribute their experience in marketing, management and
sales techniques, which includes through evaluation of financial management and critical
risks evaluation techniques. In that regard, the new company focuses to implement key
strategies to achieving its missions and objectives. Moreover, the new bakery firm anticipates
to recruit competent and full0time pastry bakers and baristas, who will be obliged to deal
with daily operations and customer services.
Mission
The new business venture focuses to provide the best quality espresso, pastry and coffee
product. Thus, the quality provisions are purposed to place the new company at a competitive
edge, which is further speculated to meet the individual demands of both the higher and
middle income local residents, including the tourists in Australia.
Product (Service) Offering
The products offered in the new venture include the espresso, pastry and coffee products,
which are made from superior quality coffee beans produced in Columbia. New business
ventures should consider all its potential customers, since it is relevant to provide every
customer with products customized to suit their respective needs (Teece, 2010). Moreover,
the anticipated bakery firm provides fresh pastry and bakery products, which are expected to
be available all the time. Approximately 6-8 moderated consignments of pastry and bakery
products daily hence assuring customers that products produced in the firm are freshly-made
products and not stored for days.

Business Plan 5
Market Analysis
Industry Analysis
The new venture to the coffee sector in Australia has witnesses a significant development
(Aleksa, 2017). Considering the weather patterns, coolers and witness rainy winters at times,
in some southern parts of Australia, it presents the need to introduce hot beverages to the
local residents. The provisions of products that best suit the interests of customers imply that
the new venture focusses establish a strong competitive advantages and customer base. In that
case, the business will focus on promotional and advertising campaigns on the locally based
residents, since this is a dominant targeted segment. The venture of this kind is purposed to
establish a consistent and health revenue directions, which resultantly assures the future
profitability and stability of the new business. Additionally, traffic from tourists is speculated
to be about 30%, which is reflected the same amount of revenue to the company. A
considerable competitive and visibility services and produces are a key success consideration
for the new business to establish a competitive advantage.
Competition
The rate of competition in the purposed demographic location for the new venture is
somewhat sparse, which provides minimal level of quality productivity and customer services
that can be likened to the new venture. Since most of the customers in Australia look for
high-quality coffee products in the cool atmosphere, the company anticipates to provide
classy and unique products to suit customers’ respective needs, in additions to establish a
competitive advantage. Top-class competitors in the coffee industry roast and purchase
superior-quality, whole-bean coffee products, in additions to quality espresso, cold-blend,
pastries, confections, and other coffee-related products sell off their products in firm-operated
retailing stores. Thus, the new venture will consider selling through speciality operations, in
addition to firm-operated retailing store.

Business Plan 6
Moreover, these large chains have a varied product mix, which depend on the relative sizes of
every store and the demographic areas where the business operates. Thus, the competitors
(Starbucks, Nestle, Dunkin’ Donut and Kraft Heinz) distribute a wide-range of whole-bean
coffee productions of different types and sizes of packaging, which include the collection of
espresso and coffee-producing accessories and equipment like coffee markers, grinders,
filters, storage tins, mugs, travelling tumblers and espresso equipment. Most of the coffee
industries in Australia have developed considerably over the past few years, which are
supported by the vibrant Australian coffee culture. The revenue estimation of the industry is
thus purposed to expand at a yearly rate of approximately 2.2% in the next five years, and
valued at $9.8 billion. This estimation includes an approximated growth rate of about 1.3%
referenced from the current year. Irrespective of the industry positive performance in revenue
dated in the past few years, there is a considerable pressure on profitability levels from rising
companies venturing in bakery. Therefore, the company should concentrate more of
developing a will competitive strategy to mitigate the challenges of low industrial penetration
and low barrier to entry in the coffee industry.
Additionally, technologically smart ventures produce fresh coffee products, whereby
consumers can timely receive them via online or mailing. The mail ordering catalog
providing these coffee products, food stuffs and other coffee-producing equipment have also
been availed to top-class competitors. Thus, the new venture considers applying Research and
Development (R&D) efforts to ensure up-to-date technological initiatives are considered in
the provision of products and services to potential consumers. The business will focus on the
creation of a user-friendly online store, which allows clients to place an order and purchase
different coffee and bakery products through the internet.

Business Plan 7
Primary Target market
The primary target segment for the new business venture is the consistent group of local
residents in Australia. Expedient and personal services to customers, focusing on the
competitive pricing technique, are purposed to be key success factor to enhancing and
maintaining the established key marketing segments in the targeted demography.
Marketing
The new venture considers applying marketing using R&D efforts to be fundamental to the
establishment of the business. Marketing campaigns create a considerable awareness of the
company’s products considering the preference of the customers in the area where the
product or service is availed (Song, Song, and Parry, 2010). The new business will apply
individual-selling technique are a marketing mix variable, which involves hiring sales experts
who will visit the general public and recreation premises to make the people to understands
the business’ unique proposition. Moreover, individual-selling technique applies public
relations strategies that will enable the designers of the products to collect information on
product developments and how the products will be shaped according to user preferences
(Pinkas and Lin, 2014). Moreover, information regarding the new product will be pasted on
public bill boards in the streets, whereby the efforts invested in marketing campaign shall be
evaluated by the number of customer preferring to purchase from the new venture.
Product
The new business venture produces a wide-range espresso and coffee products, which are
from superior quality coffee beans imported from Columbia. These products are meant to
cater for the specific needs of consumers and establish a competitive advantage in the coffee
industry. Thus, this business considers using the latest technology and R&D efforts to
produce freshly-made products throughout its business operation in the selected demographic
location.

Business Plan 8
Pricing
To develop an effective pricing plan for the new business venture, the company will consider
a number of factors: Product positioning in the selected demographic location; Expenses of
manufacturing and developing the products; Expense of the competitive services and
products; Economic and political conditions; and Critical risk factors
Developed products target to improve and maintain the marking position in the competitive
market segment (Messer, 2017). Thus, the new business will consider introducing new
flavors and bakery varieties in the market. In this aspect, the productions will be in an
extension line, whereby the preferred products are off various flavors but of the same
products. To make products that will suit the best interests of potential consumers, the
company will consider collecting comments from consumers along the street and
distinguishing their projected products against that of their competitors. Most, significantly,
the company will focus on unique and innovative products, which are drawn from new
packing and ingredients.
Figure 1: Pricing Plan

Business Plan 9
From the Table 1 above, the business, in its initial aspect of its marketing planning, intends to
apply the market penetration pricing technique. This framework is desired to help the
company to attain its primary objectives of attracting more clients and attaining a
considerable share of the market since the venture considers entering the coffee market with
an affordable pricing system compared to what its competitors offer. Despite the fact that
losses are evident in business, businesses need to focus on reaching the targeted audience first
before considering increasing the prices of a single product (Jarrett, 2016). Therefore, the
company will consider the option of cost-centered pricing technique to adjust its prices,
which meet the initial expenses of operations.
Distribution
The company consider the need to include extensions on sales (distributing about a thousand
products everyday) using about two tri-circles. This distribution planning will be applied to
avail the company’s products to the municipality areas governed by the marketing and sales
managers. Sales distribution activities shall start at 8 am to 5pm, whereby money will be
collected the moment the respective clients receive the ordered products. For special cases in
the forecasted business, in case our retailers have no money to hire suppliers, the overall sales
orders should be distributed by the company’s special retailers from the warehouse.
Promotion
The promotional efforts will involve R&D knowledge from wholesalers and producers. The
main purpose for this is to help the company to establish and maintain its market share in
production due to the competition evident from top coffee producers who also import coffee
beans. Promotional techniques for the new venture will be considered through newspapers
and poster publishing. Although promotional efforts are viewed negatively by most
consumers and producers, it can have a significant impact of establishing general awareness
of the products and hence switching of people’s opinion concerning the relevance of the

Business Plan 10
products being marketed. The business will take note of the outlined policies that control the
internal trades and imports for the goods produced while marketing. Using R&D efforts the
business will avail the relevant marketing information and assistance to the respective
producers and wholesalers.
Thus, the promotional efforts are determined by the below constraints.
o Capital: The Company considers using the existing funds of $100,000 and seeks the
same amount from external sources. Some disposable funds will be used in the
promotional efforts, since this can be a major constraint for business expansion if no
proper financial actions are put in place.
o Promotors’ attitude: The Company will ensure that the promotors are subjected to
enough orientations to marketing, in order for them to see the relevance and value of
marketing. Moreover, the entrepreneurs should consider developing their public
relation skills with potential customers, suppliers and retailers in business (Knaus,
2011). This helps the business to collect the relevant information regarding the
developed to preferred products in future.
o Promotional skills and expertise: The relevant information of clients’ preference is
necessary for the business to determine how it will produce unique products (Chan,
Park, Patel and Gomulya, 2018)
Financial Plan
The new business expects to raise more $100,000 in addition to its existing funds of
$100,000. The overall amount provides the business will enough assurance to enter into the
market. With this financial ambition, the business anticipates sales of approximately
$500,000 in year 1; $567,000 in year 2 and about $655,000 in year 3. With this financial
planning, the company expects to break-even in the 4th year reflecting on its overall

Business Plan 11
operational activities since the sales continuously increase. As such, profitability for the
current period is speculated to be about $13,000 in the first years; $36,000 in the second and
finally $46,000 in the third year. With these anticipated amounts, the business does not
expect much cash-flow complications.
Figure 2: Highlights of Sales, Gross Margin and Net Profit- First Year
Year 1
0
100,000
200,000
300,000
400,000
500,000
600,000
Sales
Gross Margin
Net Profit
The ‘Best Bakery’ is a start-up business, whereby the financing of the business will be from
the existing $100,000, in addition to the $100,000 being anticipated from the relevant
partners and stakeholders. The Fig 3 below shows the business’ predictable initial starting
expenses
Figure 3: Start-Up Expenses

Business Plan 12
The company expects to use approximately $100,000 of its existing capital and borrow
$100,000 from external sources, partners and stakeholders payable in ten years. The overall
amount provides the bulk fund required from the initial start-up expense of the venture.
Break-Even Evaluation
The company’s break-even analysis is centred on the estimation of the figures tabulated in the
first year reflecting on the overall unit sales and operation costs. The expenses are given
according to unit revenues, fixed costs and unit costs, whereby the conservative findings
deliver the desired estimation of the critical risks that the business should consider. The new
business should thus break even in the 4th month considering its aim to boost its sales based
on its efficient operations.
Figure 4: Break-Even Analysis
According to the analysis, the anticipated cash flow indicates that the presence of funds are
enough to cater for the expenditure of the business as well as supporting all its business
operations.

Business Plan 13
Critical Risks
Since the company’s products are considered to be highly competitive in the coffee industry
considering its pricing plan, quality, quantity and band, the management should focus on
implementing the latest solutions to ensuring risks are management strategically. The basic of
critical risk evaluation begins from production to distribution processes. Throughout the
business operations, the company should ensure to deliver innovative products, which will
establish a competitive edge over the top class competitors in the coffee industry.
The risks which new businesses should strictly purpose to mitigate are the external risks
(Cahill, 2019). These are forces and actors operating outside the business but have a
fundamental implication of the marketing choice of entrepreneurs. External risks are evident
close to the industry, which influence the capability of the company to serve its potential
clients. These critical risks include:
o Economy: The Australian economy is vibrant and will allow the new business to
respond progressively with pressure from the competitors.
o Recession: Economies experience a downward turn in its numerous activities. Thus,
the company might be affected since the marketing state considerably becomes
competitive and thin.
o Recovery: This aspect is directly opposite to recession in the economy where the new
venture operates (Hopkin, 2018). During this time, the promotors of the economy is
various business sectors benefit significantly from initial indications of market health
and activities, which are also relevant for financial forecasting.
o Inflation rates: The Company shall consider adjusting its pricing plan since the
expense of production will have been increased. Moreover, a high demand of products
can also be a reason for the business to increase its prices for services and products.

Business Plan 14
o Problems from suppliers: The business requires individuals and firms to avail the
necessary resources required by the producers to create goods or service. However,
the opportunity of the business to enter the coffee market might be limited if the
suppliers have problems with the company or do not meet customers’ requirements.
In conclusion, the new venture into the coffee industry is based on the existing start-up
capital of about $100,000, and the anticipated $100,000. With this amount, the entrepreneurs
are anticipating to enter the market considering the provision of unique and quality espresso,
pastry and coffee products. The success of the business in the stiff competition will be
determined evaluated by promotional efforts and mitigation of potential risks.

Business Plan 15
References
Aleksa, S., 2017. Corporate venture capital. Synergy of corporate venture fund and corporate
business incubator. Business Strategies, 2(4), pp.08-14.
Cahill, D., 2019. Market analysis beyond market fetishism. Environment and Planning A:
Economy and Space, 1(4), pp.0308518X1882091.
Chan, C., Park, H., Patel, P. and Gomulya, D., 2018. Reward-based crowdfunding success:
decomposition of the project, product category, entrepreneur, and location effects. Venture
Capital, 20(3), pp.285-307.
Jarrett, J., 2016. Financial Markets and Financial Planning. Journal of Business & Financial
Affairs, 05(04), pp.1-10.
Hopkin, P., 2018. Fundamentals Of Risk Management. London: Kogan Page, Limited.
Knaus, E., 2011. Life Planning / Strategic Planning / Financial Planning. Journal of Business
& Economics Research (JBER), 3(12), p.12.
Messer, R., 2017. Budgets and other lies: Evidence of bias in financial planning. Business
Horizons, 60(4), pp.447-453.
Pinkas, M. and Lin, N., 2014. ERM Ideas and Innovations: Digital Repository Management
As ERM. Journal of Electronic Resources Librarianship, 26(1), pp.52-60.
Song, L., Song, M. and Parry, M., 2010. Perspective: Economic Conditions,
Entrepreneurship, First-Product Development, and New Venture Success*. Journal of
Product Innovation Management, 27(1), pp.130-135.
Teece, D., 2010. Business Models, Business Strategy and Innovation. Long Range Planning,
43(2-3), pp.172-194.

Business Plan 16
Appendices – Images of Products
Image 1: Espresso
Image 2: Pastry
Image 3: Coffee