Starting a New Business: A Financial Analysis

This report provides a detailed financial analysis of starting a new business in Central London. It includes an initial investment calculation, projected income statements, and break-even analysis. The report also discusses the target market, competitive pricing strategy, and sources of funding such as personal savings, loans from banks and investors. A SWOT analysis is conducted to identify strengths, weaknesses, opportunities, and threats of the business. Finally, the report concludes with a summary of the key findings and recommendations for future action.

Food and Beverage
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Executive summary.....................................................................................................................1
Business description....................................................................................................................1
Market analysis...........................................................................................................................2
Organization management..........................................................................................................4
Sales strategies............................................................................................................................4
Funding requirements.................................................................................................................5
Financial Projections...................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Food and beverage industry occupies one of the highest ratio in hospitality industry. Such
that, the current study main aim is to develop a business plan in which it open up a street
business with Doughnuts name- “Suzuki food bakery” in Central London. The report will
describe the business and then describe market analysis. Then it will also provides an
organization management with different sales strategies, then it describe the source of funding
and provide a financial projection as well.
Executive summary
United Kingdom is the place where people are mostly concern with their health and they
also adopt changes their western lifestyle as well. At this present juncture and by analysing the
market situation, there is a need to open a business with new concept so that it helps to meet the
demand of public and that is why a street Doughnuts business is open named “Suzuki Food
Bakery” in Wandsworth in Central London, and it provides all kind of Doughnuts dishes with
different flavours with high quality and no extra sugar added. Therefore, the business plan will
describe by analysing market situation and the need to open a new street business and it also
describe its selling strategies with different fund requirements.
Business description
Suzuki Food is the street business which provides different variety of Doughnuts with
different topping that looks delicious and attract different customers as well (Davis and et.al.,
2018). The reason of choosing this business is such that in London, though there are different
bakeries who offer variety of cakes but only Suzuki bakery provide Doughnuts products with no
extra sugar which is also taken by diabetic patients as well. That is why the business is chosen.
Mission: Make and serve different Doughnuts products with delicious topping quickly to
all kind of people.
key people: For Suzuki Food bakery, the key people are owner himself, 3 labours
(Assistant, cleaner and server) with £1500 per month per labour.
Business model: The organization structure is flat which is as mentioned below:
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 Food standard Agency:
Location: It is located in Wandsworth in Central London, UK.
Legal structure and Licence: It is the sole trader type of business in which the owner is
the only person who is responsible for all the aspect of a business and only make decision for
running a business, employees and people as well. There are different licence which needed to be
done before setting up a business such that:
 Food standard Agency: It is responsible for protecting the public health with a relation
of a food in UK and it is also led by the board that appointed to act in the public interest
(Yang and Yang, 2019).
 Food hygiene Certificate: This licence needs to incorporates because it helps to prevent
the contaminated food with pathogens that spread from people, pest and also help in
separating the raw and cooked food to prevent from contamination.
 Food premises approval: It helps to provide premise for food in which the street
business can be run and there is a need to get certificate for the same.
 Alcohol Licence: It is the licence which is issued by the legal authority to a business in
which there is no right to supply alcohol products without permission (Enriquez, 2019).
Market analysis
Service business Analysis:
As people of London are basically trendy and they want to try new taste and flavour, as
per the demand of customers, Suzuki Food bakery started a new street business of Doughnuts
with different topping that helps to attract mainly young generation people. It has been analysed
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Owner
Employees Employees Employees

that retail food business is tremendous increases and the growth rate is increases in food and
beverage industry from last many years. Moreover, as people are more conscious and aware of
their health, that is why a unique concept of Doughnuts with flavoured topping with no extra
sugar will help to gain high competitive advantage n market.
For market analysis, there are different tools needed such that:
SWOT analysis : It is a strategic tool that helps to determine what internal factors affect
an internal environment of the company and this is as mention below:
Strength:
 It is the first Doughnuts street bakery that is located in Wandsworth in Central London.
 The products are high in quality with low rates as compared to its rival firms.
 The business will also cater to the needs of a customers by providing best customer
service (Robson and et.al., 2019).
Weaknesses:
 In order to establish new company, taking loans from the government for financial
support takes lots of documents and time consuming process as well, which is consider as
a weakness for quoted firm.
 As it provide new flavoured doughnuts which means that takes some time to make its
reputation in market.
Opportunity:
 As people are concern about the health and or the same reason, Suzuki Bakery creates a
path for diabetic peoples to enjoy new doughnuts products in bakery.
 It is located in one of the growing part in London (Ruxanda, 2019).
 Providing best quality of products will help to boost up the image in market as well and it
can expand its current business as well.
Threats:
 Competition in market creates threat for a business.
 The fluctuation in the currency also affect the business profit margin.
Target Market:
The dominant target market for Suzuki Bakery is the regular stream of resident who
belongs to middle class and its target people are young generation whose age is in between 23 to
45. Even it also uses competitive pricing strategy to hold their customers in market.
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Organization management
As the organization management of Suzuki Bakery consist of owner who owes the
business such that he will maintain and review the business operations and even keep tracking,
how the customers feel about the services given by the quoted firm. Then a assistant is another
key people who provide a regular service as well help to the owner as well. Then there are two
attendants who help to run a business effectively and even entertain the customers as well.
Further the marketing and accounting function is also manage by the owner itself (Lai and et.al.,
2019).
During the operation of Suzuki Food bakery, its service and quality of products offering
is good such that the first attendant of the firm, offer the menu card to their customers and then
take their order as well. As the firm provides good quality of products and uses competitive
pricing strategy and discount pricing strategy that helps to attract wide range of customers. The
owner of the quoted firm also handles the budget and accounting system of the business such that
it keep notice that the income generates by selling doughnuts products to their customers will be
profitable for a firm or not.
Apart from this, the owner of the firm also faces some issue related to service and to
overcome this, it is recommended to present the doughnuts is a form of display in front of their
customers that help to attract them and enjoy the services offered by Suzuki Food bakery (Wood,
2018). Apart from this, the firm may also provide some training sessions to their attendants
regarding the customer service. This will help a business to operate effectively and can boost up
its image in public as well.
Sales strategies
It is the marketing strategy which is used by Suzuki food bakery in order to promote its
business product in market and for that reason, the location is also play an effective role. As the
business is located in central of London, where both middle class and upper class people are
lived, then the chances of promoting the products are higher on rates. Apart from this, it has been
analysed that word of mouth is consider one of the most effective marketing tool that helps to
raise its sales and as the quoted firm offer best quality of doughnuts to their customers with
different topping (Valta and et.al., 2015). Apart from this, Suzuki Food bakery also offer some
customer retention programs that will further help to make sure that its customers are back and
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also purchase the products from it as well. Therefore, there are some marketing strategy which
can be used by the firm such that:
Brochures: It is one of the most effective marketing sales strategy which is used by the
firm in order to promote the business such that it is an informative paper document which can be
folded into a form of template which contain different pictures of the products or service that is
offered by the firm to inform the customers and public for their own benefits.
Online marketing: It is one of most effective marketing and sales strategy that uses
Internet to deliver the promotional message to their customers. It is popular strategy that helps to
connect different people such that using social media as a popular digital marketing tool that
helps to draw attention of many customers towards it (Davis and et.al., 2018).
Banners: Banners and hoarding are one of the traditional marketing strategy that helps to
draw attention of many customers such that it display new items that is offered by the firm and
they are typically used for an informational purpose and as a product specific sales tool, which is
used to generate the sales at large scale.
Funding requirements
For setting up a new business, funding is also required and for that, the owner of Suzuki
Food bakery and there are different sources of fund which can be taken by a business such that:
Personal Saving: it is the best and first investor who provide fund for setting up a
business. It is consider best source of fund because self financing is the best way when a
business-man can take their own ownership and can easily control of their own business (Sources
of fund, 2018).
Bank loan: It is another source which can be used by Suzuki Food bakery in which the
owner take a loan from bank with some amount of interest which needs to be repay at particular
time period. It is also helpful because it is the only source that backed up with a solid business
plan but the only disadvantage is to repay the amount with some amount of interest as well.
Investor: They are the angel investor who wants to invest some amount for setting up a
business and in returns they also require some amount of profit as well. Even the investors are
also looking for high growth opportunities and by using this source of funding, quoted firm will
also get fund to start their new business.
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Financial Projections
The projected profit and loss for three years is as mentioned below:
Balance sheet
Current Assets Current Liabilities
Cash £1,250.00 Accounts payable £1,52
Accounts receivable £2,500.00 Accured Wages £52
Inventory £1,350.00 Accured Compensation £25
Temporary investment £1,250.00 Income Taxes Payable £56
Prepaid expenses £156.00 Unearned Revenue £58
Any Other Liabilities £25
Total Current Assets £6,506.00
Total Current
Liabilities £3,70
Leasehold
Improvements £526.00
Other long-term
liabilities £2,56
Equity and other
Investments £2,562.00
Total Long-Term
Liabilities £6,27
Less accumulated
depreceation £2,586.00
Shareholders' Equity
Capital stock £2,56
Retained earnings £2,76
Total Net Fixed Assets £5,674.00
Total Shareholders'
Equity £5,32
£12,180.00 Total Liabilities £12,180
Total Assets and Equity
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Business start up cost
Funding Estimated (£) Actual (£) Over/(Under)
Investor funding 1500 1550
bank Loan 2000 2000
Personal Saveing 1600 1700
Total funding 5100 5250 150
Cost
Advertising for Opening 120 130
Basic Website 15 15
Business Entity 160 150
Business Licenses/Permits 190 190
Decorating 25 25
Internet Setup Deposit 60 70
Lease Security Deposit 1400 1400
Legal/Professional Fees 160 160
Machines & Equipment 156 160
Office Furniture/Fixtures 180 190
Operating Cash (Working Capital) 1250 1250
Setup, installation and consulting fees 150 150
Starting Inventory 130 130
Miscellanous 600 600
Total Fixed cost 4596 4620 24
Average montly cost
Advertising (print, broadcast and
Internet) 15 16
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Employee Salaries and Commissions 160 170
Inventory, raw materials, parts 180 180
Internet Connection 60 70
Legal/Accounting Fees 150 150
Miscellaneous Expenses 250 260
Mortgage Payments 126 130
Lease Payment 150 160
Website Hosting/Maintenance 25 30
Total Average Monthly Costs
x Number of Months
Total Monthly Costs 1116 1166 50
Cash Flow statement
Cash in-flows 1 2 3
Anticipated sales £1,256 £1,456 £1,556
Value of your Start Up Loan £1,256 £1,265 £1,289
Other sources of cash or equity £2,566 £2,548 £2,986
Existing assets for business purposes
Total cash in-flows (A) £5,078 £5,269 £5,831
Cash out-flows 1 2 3
Cost of sales £125 £125 £135
Existing assets for business purposes £125 £165 £155
Utilities (gas, electricity, water) £25 £35 £55
Telephone and internet £12 £15 £16
Marketing and advertising expenses £90 £95 £99
Equipment purchase or leasing £15 £16 £18
Postage, printing, stationery £13 £10 £9
Transport and delivery £12 £15 £16
Professional fees (legal, accounting etc.) £15 £16 £18
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Your salary (if PSB is in deficit)* £1,250 £1,600 £1,800
Staff costs £1,100 £1,250 £1,400
Total cash out-flows (B) £2,782 £3,342 £3,721
CONCLUSION
By summing up above report it has been concluded that starting up a new business will
help to met the needs of a business. In the same way, report is also based upon starting a new
business of doughnuts with different topping in Central London. Further, report conclude that
through SWOT analysis, the strength and weaknesses of firm will easily analysed and its target
market is youngsters and uses competitive pricing strategy as well. Lastly, report also concluded
that by using personal saving, taking loans from bank and investor are the sources of funding and
through projected financial, it concluded that sales forecast as well.
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