Launching a New Venture: Cafe Kulture

This report discusses the launch of a new cafe venture called Cafe Kulture in London, UK. It covers the target market, competitive analysis, tangible and intangible resources, and promotional activities for the venture.

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............................................3
TASK 2............................................................................................................................................3
P3. A credible proposal to launch a new venture...................................................................3
P4 Assessment of skills and capabilities for launching a new venture..................................5
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.......7
TASK 4............................................................................................................................................8
P7 Monthly cash budget for the pre-launch phase.................................................................8
P8 Applicable legal form for the venture.............................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The launch of a new venture is considered as an economic activity carried out by an
entrepreneur with a view to meet a market demand or to solve an economic or social issue faced
by the society. An entrepreneur is an individual who is willing to undertake risks and assume
liability for a venture that is being started by them (Sekliuckiene and Kisielius, 2015). The
present report takes into account a new cafe venture that is being opened within the confines of
London, UK under the name of Cafe Kulture. The cafe will offer wide range of coffees, shakes,
bakery items, drinks and snacks in order to gain the attention of large number of individuals. The
below mentioned report explores the target market and competition for the new venture. Besides
this, it includes information about the requirement in terms of tangible as well as intangible
resources. Along with this, the report consists of information about the skills and capabilities of
entrepreneur starting the venture. Lastly, the promotional activities as well as the legal form for
the venture, is covered.
TASK 1
P1 Investigate and explain a new venture identifying specific target markets and undertaking
competitive analysis
Cafe Kulture is acknowledged to be a cafe which will be opened within London, the
capital city of United Kingdom in order to tap the behaviour of individuals who possess
likelihood towards the consumption of coffee on a regular basis. The venture would be offering
varieties of coffees, snacks, bakery items, flavoured shakes and many more food and beverage
items. Besides this, the cafe would also provide its customers with the facility of home delivery
in case of distance within 3 kilometres from the outlet. The cafe would also be providing catering
facilities along with digital payment method service. The main purpose of Cafe Kulture is the
provision of high quality offerings to customer base at reasonable prices. The facility of
customisation in terms of flavours as well as tastes would also be provided by the venture to the
people coming to the premises of the entity.
Target market: Cafe Kulture would offer its offerings in accordance with the needs as well as
requirements of people at market place. The entrepreneur of this venture has decided to target the
young individuals of London as they generally like to visit cafes with their friends, colleagues or
acquaintances for fun, entertainment and leisure purposes.
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Competitive analysis: It is important for a venture to take into account the key market players
existing in the market place with which it needs to compete for capturing large market share
across the globe in a short span of time (Kurowska-Pysz, 2016). Competitive analysis provides
entity with the information regarding intensity of rivalry within a concerned corporate sector and
the successful strategies of the leading companies functioning within its confines. In this relation,
Porter Five Force analysis has been carried out in the light of Cafe Kulture beneath:-
Porter’s Five Forces Analysis
This is a strategic management model which is applied by an organisation with an aim of
gaining knowledge of the competitive rivalry prevailing within the confines of a market place.
This model when applied in context of Cafe Kulture would reveal the real competitors for this
new venture in UK.
Competitive rivalry: The extent of this force in context of cafe industry is acknowledged
to be high as there are several top notch cafes within United Kingdom that offer wide array of
offerings. Thus, the entrepreneur of Cafe Kulture is required to come up with new products and
tastes at rapid intervals of time so as to capture a high market share. This will provide assistance
to the enterprise in tapping the attention of large number of customers of UK and retaining them
for a long period of time in future context by providing them with high quality offerings.
Bargaining power of buyers: The magnitude of this force within the confines of cafe
industry is acknowledged to be high. This is so because there are a large number of cafes
operating within the confines of London, UK that offer coffee of different tastes as per the needs
and demands of people (Khazaeli and et. al., 2018). Thus, it is important for the entrepreneur of
Cafe Kulture to devise effective promotional strategies through which loyalty can be instilled
within the customers towards the entity and the bargaining power of buyers can be consequently
diluted.
Bargaining power of supplier: The extent of this force in relation to the cafe sector within
the confines of UK is ascertained to be low. This is because the entrepreneur of Cafe Kulture has
strong networking with the vendors within this industry. Thus, the concerned venture has the
option of switching to another vendor or supplier in case one is not able to meet the requirements
of Cafe Kulture in terms of quality as well as pricing.
Threats of substitutes: The magnitude of this element of competitive analysis is moderate
to high. There is decent number of market players within the confines of cafe industry of United
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Kingdom which pose threat of substitution to Cafe Kulture. Thus, it is important for the
entrepreneur of Cafe Kulture to leverage differentiation in order to attain an edge over the rival
firms at market place.
Threats of new entrants: The extent of this force with reference to cafe industry is high as
the companies do not need extensive capital investment for gaining entry into this industry.
Further, the laws associated with this sector are also liberal enough to allow the entry of new
entities within cafe market. This creates issue for Cafe Kulture which has to devise effective
strategies that can ensure its long term continuity within London markets.
P2. Specific tangible and intangible resources for new venture.
Every entity requires a set of resources to effectively carry out its day to day activities in
a smooth manner. In this relation, it has also been determined that resources are mainly
categorised into tangible as well as non tangible. Thus, both these types of resources are
discussed in context of Cafe Kulture as follows:-
Tangible resources: Buildings and equipments usually account for the tangible resources
of an enterprise (Leonidou and et. al., 2018). In relation to Cafe Kulture, it has been determined
that the list of tangible resources encompasses coffee makers, coffee grinders, microwaves,
refrigerator, ice machines, attractive utensil etc. These resources will provide assistance to the
cafe organisation in effectively providing its services to the customers so as to gain maximum
satisfaction from them.
Intangible resources: These consist of patents, trademark, customer relationship, brand
image, brand value, customer loyalty, and so on. With reference to Cafe Kulture, it is ascertained
that the various intangible resources would include IPR, goodwill and brand image as it a new
venture that is going to start its business operations within the confines of United Kingdom.
TASK 2
P3. A credible proposal to launch a new venture
With appropriate plans, a new venture can effectively facilitate their entrances process
into marketplace. In this proposal plan aid new venture with analytical market, detailed
information related to industry, competitors description and other essential aspects. It is most
important part through which new business can develop strategies and can ensure their
competitive image in marketplace (Fortunato and Alter, 2015). In context with present scenario,
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Cafe Kulture by taking assistance of proposal plan can formulate efficient strategies as well as
policies through which they can ensure long-term success in marketplace.
Executive
summary
Cafe Kulture initiated their small Cafe business with new innovation in their
product and services like bakery products, special type of coffees, bottle
drinks, shakes and more. Along with this special service of Cafe Kulture
include personalized baking according to consumer demand, efficient
catering and free home delivery of food items along with many other
advantages.
Company
description
Cafe Kulture mainly operates their functioning in food industry segment and
with small in size. It is owned by three partners with the assistance of
partnership agreement in which they share equal profit and loss ratio
(Kansiime and et. al., 2018). Cafe Kulture conduct their business activities in
the provinces of United Kingdom and mainly located their business in nearby
surrounding of college. In addition to this they have taken this place of lease
in order to ensure maximum profitability reserve.
Vision
Cafe culture initiated their business with a mission to emerge out as a leading
Cafe in United Kingdom provinces by providing high quality food and
services with the assistance of high technology.
Mission
Main mission of this venture is to satisfy customers with innovation in their
cafe with the help of wide range of food products and high quality services in
order to become youngster’s favourite place.
Market analysis Market analysis is important aspect through which Cafe Kulture can
effectively able to identify the factors that are prevailing in external market.
This further aids them to formulate strategies in order to overcome negative
impact of the elements on business profitability (Camp, 2015). In this Cafe
Kulture by taking advantage of pestle analysis can determine external forces.
It further allows them to conduct market research in order to strengthen their
competitive force against these factors and maximize their profitability for
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long period of time.
Benchmarking Within this, owner of Cafe Kulture form different guidelines through which
performance of employees can be monitored. With the help of this, cafe can
not only maximise workplace efficiency but can also developed strategies in
order to maximise skills and efficiency of workers, through which they can
satisfy the customers at best and con ensure competitive edge in respective
market segment (Terziev, Arabska and Nichev, 2018).
Financial
projection
By investing small ratio capital, Cafe Kulture initiated their business and
divide equal share of profit and loss among all the partners. Proper budget
has been formulated in order to manage funds in effective manner and further
fulfil financial goals in a feasible manner.
P4 Assessment of skills and capabilities for launching a new venture
In order to ensure high success and undertake different monetary benefits new venture is
required to have certain set of capabilities and skills through which they can attain maximum
market share holding (Kuratko and Hornsby, 2017). Mentioned below there are some skills
through which Cafe Kulture owner can establish their firm in United Kingdom while ensuring
maximum profit holding capability.
Leadership:
Leadership is defined as an ability in which leader influence other individuals in
organisational structure as to motivate their performance towards fulfilment of goals. With the
assistance of leadership skills owner of Cafe Kulture can facilitate high-performance among staff
and can further maximise satisfaction level among consumers.
Delegation:
It is important for an owner to effectively delegate work responsibility to each and every
individual as per according to their skill and talent (Morris, 2015). It further benefit them to
ensure completion of delegated task in time effective manner, through which entity can serve
maximum customers and can earn high profitability.
Communication skill:
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It is most important skill in which transfer of information’s, ideas, views and opinions are
done in a well defined. By taking advantage from communication skill Cafe Kulture owner can
strengthen Communication Bridge in entity and can further maximise performance of employees
through which entity can accomplish their goal.
Risk taker:
It is defined as risk taking capability of an individual in which they analyse market situation and
take risk against them with an ain earn maximum profitable advantages (Read and et. al., 2016).
It is essential for Cafe Kulture owner to undertake this skill in order to earn profitability at great
extent and emerged out as a leading cafe in respective geographical location.
According to the above mentioned capability and skill it is essential for owner of new
venture to understand importance of all the skills and capabilities as to launch their business
successfully in market. With the assistance of these skills they can not only earn high profitable
advantages but can also satisfy customers at best.
TASK 3
P5 Different promotional activities used for launching new Cafe.
Promotional activity is most important element especially for that organisation that is
looking forward to launch their new business venture. As with the assistance of different
marketing and promotional, techniques and tools attraction of large base of customers can be
facilitated towards organisational offerings. There are different promotional activities through
which Cafe Kulture owner can influence attention of maximum consumers.
Advertisement:
It is of the most effective and economical way to promote product and services of organisation
(Kariv, 2013). With the assistance of advertising method Cafe Kulture owner can promote new
cafe among consumers with different methods like pamphlets, outdoor ads leaflets and more.
Social media:
It is one of the most effective way through which respective business venture can
influence attraction of maximum youth, as nowadays this generation spend most of the time on
social media. This promotional activity is a cheapest way to promote cafe services and products
with attractive features among target audience.
Sales promotion:
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This promotional activity allow Cafe Kulture owner to offer coupons loyalty, discounts, referral
programs to customers in order to influence their purchasing behaviour towards affordable
product and services of entity, through which company can ensure that long term loyalty (Klotz
and et. al., 2014).
With the assistance of all these promotional activities owner of referral programs can not
only demonstrate their services and products among consumers but can also ensure maximum
capability to earn profit promotional activities. It not only allow entity to showcase their product
and services in a cheapest and unique way but can also aid them to retain customers for long
period of time by attracting their attention with different features and innovation in services and
product.
P6 Develop an appropriate promotional activities plan for both launch and pre-launch
Promotional plays a crucial role in the growth and success of any enterprise. In this regard, when
a new venture is launched, it is important for an entrepreneur to take into account certain pre
launch and post launch activities of promotion (Fernhaber and Li, 2013). With respect to the
entrepreneurial venture named Cafe Kulture, it has been determined that the various promotional
activities that will be used in context of pre launch and launch contexts are discussed below:-
Pre-launch promotion: This consists of the promotional activities which are executed by an
organisation before the launch of a new venture (Caselli and Negri, 2018). In relation to Cafe
Kulture, the pre launch promotional activity is described beneath:-
 Social media: It is one of the most effective ways of promotion through which a business
can reach to a large number of individuals in a rapid course of time. In this relation, it has
been identified that the usage of social media as the pre launch promotional activity
would be very effective for Cafe Kulture and would provide assistance to it in creating
awareness about its food and beverage offerings among the public at large. For this
purpose, platforms like Facebook, Twitter, LinkedIn would be used by the entrepreneur.
Launch promotion: It includes the promotional activities that would be carried out at the time
of launch of a new venture (Burns, 2017). These are usually aimed at retention of employees for
a long period of time in future context. With respect to Cafe Kulture, it has been acknowledged
that it is making use of the below explained promotional activity:-
 Sales Promotion: This encompasses tactics and techniques such as discount, loyalty
programmes, coupons, referral benefits and so on. The usage of this strategy would
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provide assistance to Cafe Kulture in gaining the attention of large number of customers
and thereby retaining them in the long run.
TASK 4
P7 Monthly cash budget for the pre-launch phase
Finance is the life blood of each and every organisation. Every entity needs to devise a budget in
order to ensure the smooth functioning of business activities. In this relation, the cash budget of
Cafe Kulture for the prelaunch phase is given beneath:-
Year 2020 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
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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 / 22
days
2,814 2,501 2,545 2,592 2,666
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June July Aug Sept Oct Nov Dec YTD
2020
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 19,02
5
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
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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
There are various forms of legal structures that are available to be adopted by Cafe
Kulture. These legal forms are critically analysed as follows:-
Sole proprietorship: Hereby, the business is run, owned and managed by a single person.
The profits and losses of the firm are solely borne by them. No delegation of powers or authority
takes place hereby.
Partnership: This is a legal form which is owned, managed and run by two or more
persons collaboratively. The terms and conditions of partnership are governed by a partnership
deed. Hereby, the partners are severely and jointly liable for the liabilities of the corporation.
On the basis of above discussion, the legal form that will be selected by Cafe Kulture
would be sole proprietorship. This is an effective legal structure as hereby there is no
intervention on the part of any other person. The profits and losses are solely borne by the sole
proprietor that is the entrepreneur.
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CONCLUSION
On the basis of above discussion, it can be said that an entrepreneur launches a new
venture with an aim of filling the market gap or meeting the demand emerged in market place.
Apart from this, it is acknowledged that tangible and intangible resources are required by a
venture to effectively carry out the business activities and practices. Further, it is important for
an organisation to select its target market in order to stipulate strategies in accordance with it.
Besides this, Porter Five Force analysis provides information about the intensity of competition
prevailing within the confines of a corporate industry. In addition to this, there are various
promotional tools and techniques which are put to use by a venture to promote its offerings
among the public at large. All of this provides assistance to the entrepreneurial venture in
achieving its goals and objectives in a timely manner.
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REFERENCES
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Implications for new venture internationalization. Journal of Business Venturing. 28(2).
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implications for farmer-seed entrepreneurship development. International Food and
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innovation management and entrepreneurship development. Journal of Business
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Sekliuckiene, J. and Kisielius, E., 2015. Development of social entrepreneurship initiatives: a
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Kurowska-Pysz, J., 2016. Opportunities for cross-border entrepreneurship development in a
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