Locus Cafe Business Plan Outline

This assignment presents an in-depth analysis of a hypothetical cafe named Locus Cafe. It delves into the external market scenario, utilizing Porter's Five Forces model to assess competitive rivalry. The document further explores essential skills and capabilities required for launching a successful venture. It also outlines various promotional strategies, including advertising, sales promotions, and social media marketing, aimed at attracting target customers.

Launching a New Venture

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Investigate and explain a new venture identifying specific target markets and undertaking
competitive analysis....................................................................................................................1
P2 Specific tangible and intangible resources for new venture.................................................2
TASK 2............................................................................................................................................3
P3 A credible proposal to launch a new venture........................................................................3
P4 Assess the skills and capabilities required to launch a new venture......................................4
TASK 3............................................................................................................................................6
P5 Different promotional activities used for launching new Cafe. ............................................6
P6 Develop an appropriate promotional activities plan for both launch and pre-launch............6
TASK 4............................................................................................................................................7
P7 Monthly cash budget for the pre-launch phase......................................................................7
P8 Appropriate legal form for the venture................................................................................10
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................12
.......................................................................................................................................................12

INTRODUCTION
Launching a new venture at market is considered as the toughest work for the
entrepreneur as it requires lots of proficiency and capability to deal with uncertain situation and
problems. In addition to this, every entrepreneur requires several in built skills that helps in
attaining targeted customers and business goals (Launching a new venture, 2018). This report is
based on the Locus cafe; which is small cafe in United Kingdom. Locus cafe offers special types
of coffees, shakes, bakery product, bottle drinks at its stores. This report is going to discuss about
launch of new venture and its targeted market segment. Along with this, requirement of tangible
and intangible resources in the small business which will help the firm in its establishment.
Further several skills and capabilities of the entrepreneur will going to be describe in the
assignment in order to understand its importance and how they can be developed according to
the need of the business.
TASK 1
P1 Investigate and explain a new venture identifying specific target markets and undertaking
competitive analysis
Locus cafe is the small cafe which provides coffee, speciality espresso drinks, food items,
bakery products, special shakes, bottled drinks etc. to its customers. In addition to this, locus cafe
also provides its services such as home delivery, catering and personalised baking at customers
place. Major motive of this cafe is to provide best services to its customers with high quality of
taste. With its new unique idea products, this cafe is grabbing attention of customers in United
Kingdom.
Target market: Locus cafe is offering its products and services on the basis of
requirement of customers. Manager of this cafe has majorly targeted youth as its target
customers (Bijker and et. al., 2012). According to scenario of United Kingdom, culture of this
country believes in enjoying their life. In relation with this, its youth is targeted for achieving its
goals and objectives as they are surrounded with their friends and prefers to go out with them.
Competitive analysis: It is considered as the evaluation of marketing plan in order to
identify the uniqueness of products and services. Competitive analysis emphasize on

understanding the strategies of competitors, various strategies opted by them to overcome similar
problems, strengths and weakness of their products etc.
Porters five forces analysis:
Porters five force model is effective tool for every industry to evaluate competition level
of an organisation at market place. In context to Locus cafe, it manager have used this model to
identify the current position of the firm. This model is based on five essential factors and these
are evaluated as below:
Competitive rivalry: Competitive rivalry of this cafe is high as there are many popular
Cafe's in the united Kingdom which are also offering the unique products in their own way.
Manager of Locus Cafe should provide quality services to its customers in order to attain
targeted market (Burns, 2017).
Bargaining power of buyers: In relation with the cafe, bargaining power of its customer
is always high as it is a new cafe and according to the demand of customers prices of products
may vary. Products offered by locus cafe are unique but still its customers may prefer to choose
already existing cafe. Manager of this cafe should enhance their quality level in order to achieve
the targeted customer.
Bargaining power of supplier: Bargaining power of supplier is high for this cafe as it is
new in market have any limited number of suppliers for the particular coffee beans. In relation to
this, its manager should build positive relationship with the suppliers in order to buy raw beans
from them.
Threats of substitutes: In this, threat of substitute product is moderate as coffee of this
cafe is unique for the customers as well as other competitors. According to its uniqueness in
coffee flavours, substitute products will consume time in manageing
Threats of new entrants: Threat of new entrants is low as its tough for new entrants to
build their brand name in this sector (Caselli and Negri, 2018). As per the current market
scenario, food industry requires lots of research and experience to establish their products and
services in effective manner. This reflects that threat of new entrant is low for Locus Cafe.
P2 Specific tangible and intangible resources for new venture.
Every new venture requires lots of resources to establish their business in effective
manner. In relation to start new cafe its manger is required specify the availability of resources

according to the requirement. Locus cafe is new venture in UK, so it is essential for this firm to
use effective and beneficial resources for successful future. Resources are of two types that is
tangible and intangible. Need of both type of resources for Locus Cafe are described as below:
Tangible resources: These resources refers to visible resources which can be measured in
physical form. Basically, building and equipment are considered as the tangible resources. Every
business requires appropriate tangible resources for establishing their business effectively
(Fernhaber, and Li, 2013). n context to the Locus Cafe, its owner have decided to use effective
resource in order to enhance market share by attaining targeted customers. According to need of
cafe list of tangible resources includes coffee maker, coffee grinder, microwave, refrigerators, ice
machine, attractive utensils etc. These resources will help the cafe the establishing their services
in effective manner.
Intangible resources: These resources are considered as long term resources which are
not physical in nature. Intangible resources includes patent, trademarks, franchises, customer
relationship, brand image, culture of industry etc. In context to Locus Cafe,firstly it is required
by its owner to take patent for their name so that similar name will not be used by anyone else in
future. It is the responsibility of manager to provide effective training to its staff in terms of
increasing customers satisfaction level. This will also build positive customer relationship with
the cafe. As this cafe is new in United Kingdom, so it is important to firstly develop their brand
name in order to increase their recognition at market place.
Above mentioned tangible and intangible resources will help this Cafe in achieving its
predetermined goals by grabbing the attention of youth with its products and services.
TASK 2
P3 A credible proposal to launch a new venture.
Every new venture requires an appropriate plan before entering into marketplace.
Proposal plan includes detailed information about the organisation with its description,
competitors, analytical market and its summary. Proposal planning is the essential part of the
every new business as it includes several strategies which are formulated after analysing the
market as well as competitors. It is initial step of the owner to evaluate all the factors which may
affect the business at its starting point. Proposal plan also guides the top management while

formulating various policies and strategies in the future. In context to Locus cafe, it owner have
prepared effective proposal plan for the long term success of their business.
Executive summary Locus cafe is small cafe which is started with new innovative products
like special types of coffees, bakery product, shakes, bottle drinks in its
cafe. Along with this, it also offers services to its customers like
catering, personalised baking and home delivery of food items.
Company description Locus cafe belongs to food industry which is small in size. This cafe is
situated in United Kingdom. It is owned by three partners who shares
the profit and losses at equal ratio as they have invested equally on café
(Klotz and et. al., 2014). Locality of firm is chosen on the basis of its
surrounding college. Its owners have opted the place on lease in order
to increase their benefits for long term.
Vision
To become one of the leading cafe in United Kingdom through
offering quality food considering all the innovations through using
technology.
Mission
To position itself as an innovative cafe which offer quality and variety
of food products and to become favourite place for youngsters.
Market analysis It is essential for this cafe to analyse the external market in order to
identify its opportunity available at market place which can be used for
enhancing profit ratio. Locus cafe have used PESTLE analysis to
understand the affect of external forces. Along with this, market
research is used to understand the needs and requirements of the
customer to enhance their profitability for long term.
Benchmarking In this, certain guidelines are prepared by owner to monitor the
performance of the employees (Kuratko and Hornsby, 2017). It will
help in improving internal performance of the cafe, along with various
strategies are formulated by analysing the performance and strategies
of the competitors. It will help the firm in increasing customer’s

satisfaction.
Financial projection Locus cafe is started with the minimum investment as it is small in
size. Owners of the Cafe have invested equally in order to share profit
and losses at equal ratio. These funds are used in appropriate manner
for utilising it on most relevant place for its effectiveness.
P4 Assessing skills and capabilities for launching a new venture.
Every business is started with motive of high success and monetary benefits in the
organisation. It is required by the owner of every business to have appropriate skills and
capabilities in order to launch new venture at marketplace (Hmieleski, Cole and Baron, 2012). In
context to Locus Cafe it is essential for its owner to have certain capabilities which will help in
attaining market market share. For establishing new cafe in UK, skills and capabilities required
by the owner are evaluated as below:
Leadership: It is termed as the ability of individual to influence group of people for their
own motive. In relation with Locus Cafe, its owner is required to have leadership skill to
influence its staff to work in effective manner in order to enhance customers satisfaction level.
Owner of this cafe should manage the manpower at work place and make them work in one
direction that will support in increasing brand name at market place.
Delegation: It is required by the owner to have ability to delegate its work to the
appropriate person at right time (Kariv, 2013). Owner of the Cafe have lots of work to do on
every single day so it is required by him to trust working ability of its staff and delegate some
amount of work to them which will help in completing work in appropriate time frame. This will
also reduce the work of owner and his efforts can be used on some other place in order to
enhance their cafe growth.
Communication skill: Communication is the way of transferring ideas and thoughts with
one another in relevant manner. Owner of Locus Cafe should use polite way to communicate
with its employee in order to make them comfortable at working environment. Apart from this,
manager of this cafe should conduct some training session for the employees as well to develop
and make their communication skill effective. This will help the employee in communicating

with the customers in attractive and decent manner which will help them in influencing
customers in using the services of the cafe on regular basis.
Risk taker: Risk taking is consider as the capability of individual. In context to new
Cafe, its owner should have the capability of risk taking as market situations are unpredictable
and uncertain (Klotz and et. al., 2014). So there are positive as well as negative chances that cafe
will achieve success or not. It is required by owner to have capability of taking the risk in
negative situations.
Above mentioned skills and capabilities are essential for launching a new venture at
marketplace. In relation to the cafe, its owner required to have these skills and should focus on
developing the capabilities in order to achieve their goals and objectives.
TASK 3
P5 Different promotional activities used for launching new Cafe.
Every new business is required to use various marketing tools to promote its products and
services at market place. In relation to this, it is the responsibility of its marketing manager to
popularise unique products and services in order to increase its number of customers. According
to the cafe there are lots of promotional tools which can be used by the organisation to popularise
their brand name in United Kingdom. Various promotional activities which can be used by this
organisation are evaluated as below:
Advertisement: According to the promotion of new cafe, advertisement is considered as
the effective and economical way of promotion. Manager of Locus cafe can use different mode
of advertisement like outdoor ads, leaflets, pamphlets to promote its unique products.
Social media: It is one among the most effective way of promotion as most of the youth
is connected to the social media on regular basis (Kuratko and Hornsby, 2017). Social media is
also considered as the cheapest way of promotion. Manager of the cafe itself can make the
account on social media and can also operate it on regular basis. This is an effective mode of
promotion as it will attain the attention of targeted audience.
Sales promotion: Manager of Locus Cafe can use this promotional channel as this
include attractive discounts, coupons, referral programs and loyalty incentive. According to the
Locus Cafe, sales promotions attract the customers to use the services at low prices and utilise

the benefit of the loyalty incentives. It is considered as the most effective way to grab the
attention of the youth as well as people of other generation who are money oriented.
Owner of Locus cafe can use all the mentioned promotional activities as they do not
consumes lots of monetary terms. Among them social media is the most effective and cheapest
way of popularising the unique products of the cafe. By using these promotional activities Locus
cafe can grab attention of its customers which will directly enhance its sales and leads to
business growth.
P6 Develop an appropriate promotional activities plan for both launch and pre-launch
Promotional activities plays an essential role in business growth. These activities are used
by every firm to popularise there products and services at market place in order to increase its
brand recognition (Read and et. al., 2016). In relation to Locus Cafe, marketing manager of this
enterprise have used several promotional activities at pre-launch phase as well as after launching
their cafe at marketplace. Different promotional activities used by this enterprise are evaluated
as below:
Pre-launch promotion: Pre-launch promotional activities refers to various used by an
organisation to popularise its brand name before entering into market. In context to Locus Cafe,
it marketing manager have to opt affordable promotional activities which will grab the attention
of targeted audience. This cafe should opt advertisement and social media as the mode
promotion.
Advertisement: It includes promotion through print media such as leaflet, pamphlet, catalogues
etc. These types of advertisement are affordable for Cafe and attract popularise the services and
products before its launch (Morris, M. H., 2015).
 Social media: This is considered as most effective way of promoting the product before
its launch . Locus cafe should make its pages on social sites like Facebook, Twitter,
LinkedIn etc. as it is easy to operate this media. Social sites is much popular among every
generation of UK as they are using it at regular basis. Promotion through this will
increase brand awareness among the people.
Launch promotion: In this, promotional activities are used by the firm to retain its customers in
order to increase the sales of products and services (Robb and Watson, 2012). In relation with
Locus cafe, its marketing manager have used sales promotion to increase its new customers and
retain already existing one in order to increase sales of Cafe.

 Sales Promotion: It includes several promotional activities within the workplace like
coupons, loyalty incentives, discounts, referral benefits etc. In context to Locus Cafe, it
manager have opted strategy of referral programs and loyalty incentives in order to retain
its customers. This will also attract new customers to use the services of this cafe.
TASK 4
P7 Monthly cash budget for the pre-launch phase
Every new venture requires an appropriate budget to monitor its business activities. In
relation to this cash budget of Locus cafe for its pre launch phase is evaluate as below:
Year 2015 Jan Feb Mar April May
Food Sales amount 42,152 42,563 43,526 43,568 44,124
Beverage Sales 19,751 12,451 12,456 13,452 14,528
GROSS SALES (Total) 61,903 55,014 55,982 57,020 58,652
COGS
Food 14,525 14,046 14,364 14,377 14,561
Beverage 6,515 3,113 3,114 3,363 3,632
GRAND TOTAL 21,040 17,159 17,478 17,740 18,193
GP 40,863 37,855 38,504 39,280 40,459
General and
Administrative
Workers Salaries 15,476 13,754 13,996 14,255 14,663
Management Salaries 3,400 3,400 3,400 3,400 3,400
Employer
Taxes/Benefits (15%
Wages) 2,265 2,058 2,087 2,119 2,168
Employees
Compensation (6%
Wages) 1,133 1,029 1,044 1,059 1,084

Advertisement 800 800 800 800
800
Bookkeeping 150 150 150 150 150
Credit Card Charges
(1%) 619 550 560 570 587
Insurance 250 250 250 250 250
Legal and Professional
Fees 100 100 100 100 100
Misc. Other 250 250 250 250 250
Office Supplies 175 175 175 175 175
Rent 3,200 3,200 3,200 3,200 3,200
Repair and
Maintenance 300 300 300 300 300
Small Equipment 200 200 200 200 200
Telephone [phone]
Garbage 200 200 200 200 200
Utilities 1,200 1,200 1,200 1,200 1,200
Total Gen. and Admin.
(Fixed) 29,867 27,766 28,062 28,378 28,876
NET PROFIT OR LOSS 10,996 10,089 10,443 10,901 11,583
SBA Loan 3,582 3,582 3,582 3,582 3,582
Cash Flow After
Financing 7,414 6,507 6,861 7,319 8,001
Draw 4,000 4,000 4,000 4,000 4,000
Net Cash Flow 3,414 2,507 2,861 3,319 4,001
Accumulated Cash
Flow 5,921 8,782 12,101 16,102
Average Daily Sales / 2,814 2,501 2,545 2,592 2,666

22 days
June July Aug Sept Oct Nov Dec
YTD
2013
44,325 44,658 45,210 45,325 46,251 46,325 47,125 5,35,152
15,574 15,487 16,421 16,251 17,452 17,245 17,845 1,88,913
59,899 60,145 61,631 61,576 63,703 63,570 64,970 7,24,065
-
14,627 14,737 14,919 14,957 15,263 15,287 15,551 1,77,215
3,894 3,872 4,105 4,063 4,363 4,311 4,461 48,806
18,521 18,609 19,025 19,020 19,626 19,599 20,013 2,26,021
-
41,379 41,536 42,606 42,556 44,077 43,972 44,958 4,98,045
- - - - - - - -
14,975 15,036 15,408 15,394 15,926 15,893 16,243 1,81,016
3,400 3,400 3,400 3,400 3,400 3,400 3,400 40,800
2,205 2,212 2,257 2,255 2,319 2,315 2,357 26,618
1,102 1,106 1,128 1,128 1,160 1,158 1,179 13,309
800 800 800 800 800 800 800 9,600
150 150 150 150 150 150 150 1,800
599 601 616 616 637 636 650 7,241
250 250 250 250 250 250 250 3,000
100 100 100 100 100 100 100 1,200
250 250 250 250 250 250 250 3,000
175 175 175 175 175 175 175 2,100
3,200 3,200 3,200 3,200 3,200 3,200 3,200 38,400
300 300 300 300 300 300 300 3,600
200 200 200 200 200 200 200 2,400

150 150 150 150 150 150 150 1,800
200 200 200 200 200 200 200 2,400
1,200 1,200 1,200 1,200 1,200 1,200 1,200 14,400
29,256 29,331 29,784 29,768 30,416 30,376 30,803 3,52,684
-
12,122 12,205 12,822 12,788 13,661 13,596 14,155 1,45,361
3,582 3,582 3,582 3,582 3,582 3,582 3,582 42,984
8,540 8,623 9,240 9,206 10,079 10,014 10,573 1,02,377
4,000 4,000 4,000 4,000 4,000 4,000 4,000 48,000
4,540 4,623 5,240 5,206 6,079 6,014 6,573 54,377
20,643 25,266 30,505 35,712 41,791 47,804 54,377
2,723 2,734 2,801 2,799 2,896 2,890 2,953
P8 Applicable legal form for the venture
It is required for every firm to choose appropriate structure in order to secure themselves
from the legal barriers. In relation with Locus cafe, it is the responsibility of its legal advisor to
suggest the owner to choose valid legal structure on the basis of regulation of UK government.
There are various types of legal structure available of this cafe and these are evaluated as below:
Sole proprietorship: In this, legal structure business is operated by the single person
known as sole trader. Under this, it is the responsibility of owner to arrange all financial funds
for business to accomplish its regular based activities. Along with this, all profits and losses are
bear by the by sole trader only as there is no delegation of responsibilities.
Partnership: This legal structure involves more than one business owner. According to
the legal laws, in partnership business is operated by two or more person. Under this, profit and
losses are distributed among the partners on the basis of there investment ratio. It is considered
as most beneficial form of structure for the businesses as the responsibility of work are shared by
the partners (Simon and Shrader, 2012).
From the above mentioned legal structure Locus cafe have chosen partnership as its legal

structure. Locus cafe is small in size with the innovative coffees of various flavours. Partnership
will involve include more number of owner who will also responsible to share their losses as
well. It will enhance the effectiveness of the products and services as partners will share there
valuable ideas and knowledge to improve the profitability of the cafe. Along with this, at the
time of uncertainty risk will be shared by the partners.
CONCLUSION
From the above mentioned report it has been evaluated that for launching new venture it
is required by every businessman to understand the external market scenario for long run of the
business. In this report, launch of new venture had been elaborated with specific targeted market.
In addition to this, Porter's five force model have been discussed in order to understand
competitive analysis of chosen venture. Further requirement of various skills and capability for
launch of new venture with its benefits are evaluated. This report also contains several types of
promotional activities such as advertisement, sales promotions and social which are beneficial
for the business and are economic for new venture. These promotional activities are beneficial
for the business and also helps the firm to attain its targeted customers.