This document provides a detailed analysis of entrepreneurial finance, including business goals, unique selling points, marketing strategies, and financial analysis. It also includes a profit and loss statement and balance sheet. Suitable for students studying entrepreneurial finance.
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Entrepreneurial Finance1 Table of Contents Introduction......................................................................................................................................3 Business Goal..................................................................................................................................3 Unique Selling Point........................................................................................................................3 Porter Five Forces............................................................................................................................3 SWOT Analysis...............................................................................................................................4 Marketing & Sales Strategy.............................................................................................................5 Primary Target Market.................................................................................................................5 Marketing Mix.............................................................................................................................5 Human Resources Strategy..............................................................................................................5 Business Management.....................................................................................................................6 Business name and Legal Structure.............................................................................................6 Business Premises........................................................................................................................6 Management Team and Organizational Structure.......................................................................6 Financial Analysis...........................................................................................................................7 Profit and Loss A/C......................................................................................................................7 Balance sheet................................................................................................................................7 Cash flow.....................................................................................................................................9 Ratio Analysis............................................................................................................................10 Sources of Funding........................................................................................................................10
Entrepreneurial Finance3 Introduction Take A Bite is one of the start-up small restaurants that located in London, UK. TAB will try to create a loyal base of consumer by offering and catering high quality of products to their consumers at competitive price. TAB is eating establishments that focusing on the healthy, nutrition as well as other fast food with high quality that will not only attract the consumers but will also make them healthy. TAB will enter in the market with innovative theme that will make them competitive in the market (Burns and De Csawhurst, 2016). In the following part there will be detailed analysis of the market where the restaurant will entre and the manner they will entre in the market with expected profit they can earn and cost or expense occur in the business. Business Goal The main business goal or objective of TAB is: To cater high quality of products to the consumers To participate in the society in making the society healthy To enhance market share in the market Attract maximum number of consumers towards their products (Hopp et al., 2018) Unique Selling Point The unique selling point of TAB will be their quality food. They will cater mixture of fast food and healthy food that will come with delicious taste and the healthy eating habits. Moreover, they will cater such food in reasonable prices to target all range of consumers. It is one of the unique selling points that TAB will adopt for their business that will make them successful in the market in more effective and efficient manner. They will also follow differentiation strategy in their business that will provide unique or hard to find choices to the consumers (Wang et al., 2019).
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Entrepreneurial Finance4 Porter Five Forces Bargaining Power of Buyer: The bargaining power in such industry is low due to the main reason that every individual enjoy the fast food that weaken the bargaining power of consumers in such industry and it is highly popular among the UK consumers. Therefore, the buyer power is weakened and the consumer’s loyalty is strengthening in such industry. Bargaining Power of Suppliers: One of the essential inputs in the foo market is food. The country has concentrated food supply or distributors. The suppliershave decreased their dependency on the restaurants as they also have other kinds of profit foodservices as well as cost food service consumers. Therefore, it represent that the bargaining power of suppliers is increased in the UK market (Ulubeyli, 2017). Threat of New Entrants: The rule as well as regulations of UK created barrier to entry in such industry. However, such barrier is limited to the extent. The huge income in such industry attracted maximum number of new forms to entre in such market in an effective manner. Threat of Substitute: The major substitute for TAB can be ready to eat meals, frozen foods for home cooking. However, such will not challenge to the greater extent due to the reason the prices of fast food is low. Rivalry :There is huge competition in such market. The major competitors are McDonald, The Ledbury and other big restaurants that have already built up their goodwill in the market. It will affect overall performance of the TCB at greater level (Aschemann-Witzel et al., 2017). SWOT Analysis Strengths The innovative ideas of is one of the main strength of the TAB. They will present their product in an effective manner with innovative theme. The location of the restaurant will be convenient for service class and it will be open for 24*7 Delivering quality services
Entrepreneurial Finance5 Weaknesses It will take time for TAB to maintain goodwill in the new market. Limited fund arranged for the business The restaurant is new in the market Lack of permanent workers (Bull et al., 2016) Opportunities There is great expansion of market in the new future A new office complex is being built nearby that will provide new consumers segment. Thereisgrowingdemandtowardsthehealthylifestyletherefore;itwillgivean opportunity to TAB to target those consumers. The demand for online orders is increasing in the recent scenario due to the busy life schedule of the consumers. Therefore, the company provide their products through online Threats The competition in the market creates biggest threat for the TAB. They cater their services at low prices to attract maximum consumers. The change in taste and preferences of the consumers create threat for TAB (Gürel and Tat, 2017). Marketing & Sales Strategy Primary Target Market TAB will majorly focus on meeting the demands of local residents and tourist as in detail they are explained in below points: Local Residents: TAB will establish huge market for local residents that will help in creating a huge network as well as it is will also provide the consistency to the business. They will target young as well as old age people with the range start from 14- 55. As they will deliver tasty and healthy food that can be cater to both young as well as old generation.
Entrepreneurial Finance6 Tourists: they are the main source of attracting consumers. Therefore, TAB will focus on tourist that will help them in boosting their sales by 20% to 30% that will give more visibility of products (Terho, Eggert, Haas and Ulaga, 2015). Marketing Mix Product:TAB will cater different variety of foods to their consumers as well as all variety of fruits related products will be provided to the consumers such as fruit sandwich, fruit roll, fruit melon and so on to make them unique in the competitive market. Price:the pricing will be strategic in which more offers will be provided while there is no peak hours that will help them to occupied their space in the normal timing as well. Penetration pricing will be adopted by TAB to enhance their sales (Dagevos, 2016). Distribution: they will set outlet in the rush area of London such as supermarket to attract maximum number of consumers and will also provide online services to them such as self- delivery, Swiggy, and so on to cover maximum number of consumers. Promotion:Different strategies will be adopted such as “Happy Hours”-wherein low sale in particular hours this offer will be applicable. “Ladies Night” on every Friday, Loyalty discounts will be provided to the regular consumers. Moreover, social media will be used to promote their restaurant through the platform of Facebook, YouTube, and LinkedIn (Todorova, 2015). Human Resources Strategy Human resources play a vital role for the growth and success of business. Therefore, certain strategies will be adopted to manage employees as they are explained in below points: Proper training will be provided to the employees of restaurant to enhance their skills that will help in serving quality services to their consumers Employment program will be also arrange for the staff to make them feel motivated and will retain in the restaurant for longer period. Reward system will be providing for the employees in every six month that will motivate the employees to work in more effective manner.
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Entrepreneurial Finance7 Transparent and regular communication will be done to resolve the issues or other concernsoftheirstafftomakethemconcentratedontheirworkratherthanon unnecessary activities. Open platform will be provided to the staff to share their ideas or innovative views that can help the restaurant to motivate their employees and to entre in the market with always innovative ideas (Nankervis, Baird, Coffey and Shields, 2016). Business Management Business name and Legal Structure Take A Bite is the profit making sole proprietorship restaurant that will be opened for the purpose of earning maximum profit from the market. The restaurant needs to apply for the name registration and can protect their name by applying for patent as well. Business Premises Take A Bite has secured a two year lease of the vacant that is 2500 square feet. The properties firmly taken by sweet and candy shop therefore, if old consumers of such sop will visit such place then they can also visit TAB. Moreover, it is situated in a marketable area that is near from the supermarket as well as other busy town commercial areas (Scarborough, 2016). Management Team and Organizational Structure In the restaurant, Mr Ronald and Mr Dale is the CEO, Mr John is the Chief Operating Officers and one Chief Technology Officer. Mr Ronald will manage the finance department, as he also would be capable to establish the strategic plans and can able to forecast the future with governing and manage the budget. Mr Date will manage the sales and marketing department, he owns the marketing strategy that also involve sales strategy. Mr John will manage the multipart operating details of the company. He will take care that the food will be delivering appropriately.
Entrepreneurial Finance8 two chefs will be required to handle the kitchen, 7 waiters will be required as on every tableonewaiterwillmanagetheconsumertoenhancethequalityservice,two housekeepersrequiredforcleaningstuff,oneaccountantrequiretomanagethe department of cash (Burns and Dewhurst, 2016) Financial Analysis Profit and Loss A/C Profit & Loss Statement MonthApr 19Apr 20Apr 21 Income Total Sales6,0008,95012,495 Less Total Disc/Comm248371557 Total Net Income5,7538,57911,938 Less Total Cost of Goods Sold01,000800 Gross Profit5,7537,57911,138 Expenses General & Administrative270330335 Marketing & Promotional9099109 Operating Expenses695715725 Motor Vehicle Expenses185228230 Website Expenses1053540 Total Employment Expenses1,5951,7391,894 Occupancy Costs465533619 Other Expenses487088 Total Expenses3,1153,4153,682 Monthly Net Profit / (Loss)2,6384,1647,456 Total Year to Date Net Profit / (Loss)2,6386,80114,257 Balance sheet Balance Sheet MonthApr 19Apr 20Apr 21 Assets Current Assets
Entrepreneurial Finance9 Cash on hand £ 100.00 £ 180.00 £ 250.00 Debtors £ 300.00 £ 370.00 £ 430.00 Prepaid Expenses General £ 20.00 £ 25.00 £ 35.00 Rates £ 10.00 £ 15.00 £ 20.00 Work cover £ 75.00 £ 100.00 £ 125.00 Insurance £ 50.00 £ 55.00 £ 65.00 Etc.. Total Prepaid expenses £ 155.00 £ 195.00 £ 245.00 Inventory Raw material £ 500.00 £ 1,250.00 £ 1,500.00 Total Inventory £ 500.00 £ 1,250.00 £ 1,500.00 Short term Investments £ 150.00 £ 270.00 £ 300.00 Other current assets £ - £ 50.00 £ 80.00 Total Current Assets £ 1,205.00 £ 2,315.00 £ 2,805.00 Fixed Assets Computer £ 150.00 £ 150.00 £ 150.00 Store Fit Out £ 180.00 £ 250.00 £ 300.00 Office Equipment £ 100.00 £ 150.00 £ 210.00 Leasehold £ 1,000.00 £ 1,500.00 £ 1,800.00 Buildings & improvements £ 350.00 £ 500.00 £ 510.00 Furniture & Fixtures £ 120.00 £ 165.00 £ 1,100.00 Etc. £ 325.00 Total Fixed Assets £ 2,225.00 £ 2,715.00 £ 4,070.00 Total Assets £ 3,000.00 £ 5,030.00 £ 6,875.00 Liabilities Current Liabilities
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Entrepreneurial Finance10 Bank Overdraft £ - £ 900.00 £ 900.00 £ 50.00 £ 800.00 £ 1,200.00 Creditors £ 70.00 £ 1,200.00 £ 900.00 GST collected £ - £ 50.00 £ 500.00 Superannuation £ - £ 15.00 £ 80.00 PAYG Withholding Payable £ - £ 20.00 £ 60.00 Work cover Insurance Payable £ - £ 40.00 £ 40.00 Current portion of long term debt £ 200.00 £ 1,000.00 £ 1,000.00 Etc. £ - £ - £ - Total Current Liabilities £ 320.00 £ 4,025.00 £ 4,680.00 Long Term Liabilities Motor Vehicle Loan £ 1,000.00 £ 500.00 £ 300.00 Equipment Finance £ 800.00 £ 1,500.00 £ 1,000.00 Long term Loans £ 200.00 £ 500.00 £ 800.00 Total Long Term Liabilities £ 2,000.00 £ 2,500.00 £ 2,100.00 Total Liabilities £ 2,320.00 £ 6,525.00 £ 6,780.00 Net Assets £ 680.00 -£ 1,495.00 £ 95.00 Shareholders Funds ( Equity) Owners Funds £100,00 0.00 -£ 8,796.00 -£ 16,161.9 1 Retained Earnings £ 14,035.0 0 £ 500.00 £ 2,000.00 Current Year Profit £ 2,637.50 £ 6,801.00 £ 14,256.9 1 Total Shareholders Funds (Equity) £ 116,672.5 0 -£ 1,495.00 £ 95.00
Entrepreneurial Finance11 Cash flow Explained in Appendix 2 Ratio Analysis Current Ratio(Current Assets / Current Liabilities)3.770.580.60 Quick Ratio( Current Assets less inventory) / (Current Liabilities less bank overdraft)200 Working Capital Funds (Current Assets Less Current Liabilities)885-1,710-1,875 Leverage Ratio(Total Liabilities / Total Assets) 0.773333 333 1.297216 7 0.986181 818 Debt to Equity Ratio (Total Liabilities / Total Shareholders Funds) 0.019884 72 - 4.364548 495 71.36842 105 Gross Margin (Gross Profit / Net Sales)10.8834330.932988 Net Margin (Net Profit / Net Sales0.4584960.4853270.624546 Mark Up ((Net Income Less Cost of Goods Sold) / (Cost of Goods Sold)) x 100#DIV/0!7.5787513.92266 Break Even ( Expenses/((1-(Cost of Goods Sold/ Net Sales))31153865.8853946.689 For the business the growth in the ratio required to achieve success in the market. Therefore according to the requirement it is forecasted that The liquidity ratio of the company represent that the company has enough liquid or cash to continue their business that grow from year to year.
Entrepreneurial Finance12 The working capital fund of the company represents that they have sufficient funds that can help them to grow in the market in an effective manner. The profit ratios are representing that company will earn sufficient profit in their business that will help them to sustain in the market in more effective and efficient manner. Therefore, the overall performance of the company seems effective and performed very well in the market as they grow sustainably in the competitive market. Sources of Funding TAB is required huge amount of investment to get setup in such expensive places. The expenses of occurring such business is high that is required for them to raise funds from the market. The major sources of funds for TAB are explained in below points: Loan from Financial Institutions: TAB will take loan from private banks to raise funds for their business. They will take 40% of the amount from banks that will make them easy availability of funds in an effective manner (Mason and Harrison, 2015). Private Investment: 30% of the fund will be raise by their own. It is one of the best options to raise the fund as the individual is not required to pay any interest on such amount that is cost effective source. Private Investors: TAB will be also seeking for some private investor. 20% share will be given to the investors that will enhance the interest of investing amount on such restaurant in an effective manner. Crowed Funding: TAB will also raise their funds from such source as well. It involves accepting the investment from several investors or donors. It will help in supporting TAB to raise the funds in more effective and efficient manner (Kim and Wyckoff, 2016). Conclusion From the above analysis it can be concluded that Take A Bite is one of the small start-up restaurant that will be open in London, UK. The main motive of the restaurant is to spread awareness of healthy life by eating healthy food. Tab will serve quality products to the consumers with some healthy ingredients. The restaurant is required to analyse the competitive environment of the country to entre in such market. The UK market represent as healthy market
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Entrepreneurial Finance13 where TAB can earn maximum profits. The consumers are keen for food that make less competitive environment in the country. Therefore, TAB will cater high quality product with innovative manner that will make them competitive in the market. However, the competition in such industry is high therefore; it is required for them to adopt strong promotional strategy to attract maximum number of consumers in more effective and efficient manner.
Entrepreneurial Finance14 References Aschemann-Witzel, J., De Hooge, I.E., Rohm, H., Normann, A., Bossle, M.B., Grønhøj, A. and Oostindjer, M. (2017) Key characteristics and success factors of supply chain initiatives tackling consumer-related food waste–A multiple case study.Journal of cleaner production,155, pp.33- 45. Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E. (2016) Strengths, Weaknesses,OpportunitiesandThreats:ASWOTanalysisoftheecosystemservices framework.Ecosystem services,17, pp.99-111. Burns, P. and DeCsawhurst, J.. (2016)Small business and entrepreneurship. New York: Macmillan International Higher Education. Burns, P. and Dewhurst, J. eds. (2016)Small business and entrepreneurship. London: Macmillan International Higher Education. Dagevos, H. (2016) 15 Beyond the Marketing Mix: Modern Food Marketing and the Future of OrganicFoodConsumption.Thecrisisoffoodbrands:Sustainingsafe,innovativeand competitive food supply, p.255. Gürel, E. and Tat, M. (2017) SWOT ANALYSIS: A THEORETICAL REVIEW.Journal of International Social Research,10(51). Hopp, C., Greene, F.J., Honig, B., Karlsson, T. and Samuelsson, M. (2018) Revisiting the influence of institutional forces on the written business plan: a replication study.Management Review Quarterly,68(4), pp.361-398. Kim, K. and Wyckoff, T. (2016) What's in your list?: A survey of business database holdings andfundingsourcesattopacademicinstitutions.JournalofBusiness&Finance Librarianship,21(2), pp.135-151.
Entrepreneurial Finance15 Mason, C.M. and Harrison, R.T. (2015) Business angel investment activity in the financial crisis: UKevidenceandpolicyimplications.EnvironmentandPlanningC:Governmentand Policy,33(1), pp.43-60. Nankervis, A.R., Baird, M., Coffey, J. and Shields, J. (2016)Human resource management: strategy and practice. London: Cengage. Scarborough, N.M. (2016)Essentials of entrepreneurship and small business management. New York: Pearson. Terho, H., Eggert, A., Haas, A. and Ulaga, W. (2015) How sales strategy translates into performance: The role of salesperson customer orientation and value-based selling.Industrial Marketing Management,45, pp.12-21. Todorova, G. (2015) Marketing communication mix.Trakia Journal of Sciences,13(1), pp.368- 374. Ulubeyli,S.(2017)Industry-widecompetitivenessassessmentthroughfuzzysynthetic evaluation: the case of cement industry.Journal of Business Economics and Management,18(1), pp.35-53. Wang, Y., Huang, L., Li, J. and Yang, Y. (2019) The mechanism of tourism slogans on travel intention based on Unique Selling Proposition (USP) theory.Journal of Travel & Tourism Marketing,36(4), pp.415-427. Appendix 1.0Poster
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Entrepreneurial Finance29 Reflection While doing my project and analyse the market, I have realised that how marketing play a vital role in attracting consumers. For every successful businessman it is required for them to prepare strong marketing strategy to survive and compete in the market. I did able to enhance my skills that how we can control the market and what things are required while entering in new market. Every market include huge opportunities and threats, it is all about the tactics the individual adopttograbsuchopportunitiesandcopeupfromthethreatandturnthemintothe opportunities. The overall experience was amazing through which I can able to learn lots of things that is required to achieve success in the market. While analysing the market I have analysed that the market include great competition in which most of the companies has adopted various tactics to attract the consumers as well as the consumers are also seeking for healthy food that is the main reason that I have set up the concept of small restaurant in which I have majorly focused on healthy food and diet. While continuing the business I have made various strategies to compete my competitors and to attract the consumers at greater level. While setting up of business in the new market, I have learned that what challenges any business can face and the manner they can overcome such challenges to achieve great success in their business. Thus, such development of skills motivates me to take further step towards spreading awareness for healthy life among the population to make their life healthier. At the end I have also learned that consumers are not only the source of success, to achieve great success in the market it is required for the company to satisfy their employees as they are key to the growth and success of any business in an effective manner. Such experiences from the project will help me while I will come with my own set up.