[Business Plan for Sip and Whip Cafe]

The assignment provided details a business plan for the launch of Sip and Whip cafe, focusing on understanding the external market scenario for growth, applying Porter's five force model to analyze competition, and promoting the venture through various activities such as advertisement, sales promotions, and social media. The report includes a cash flow statement, legal structure of the firm (partnership), and suggestions based on the analysis.

Launching a new
venture

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1Explain a new business venture with target market and competitive analysis...................1
P2. Determining tangible and intangible resources needed for launching a new business
venture....................................................................................................................................3
TASK 2............................................................................................................................................3
P3. Producing a credible proposal for launching a new business venture..............................3
P4. Assessment of skills and capabilities that are needed while launching a new venture....5
TASK 3............................................................................................................................................6
P5. Explain various promotional activities and channels that are needed for launching a new
venture....................................................................................................................................6
P6. Developing a promotional activity plan for launch as well as pre launch of new venture.. .7
TASK 4 ...........................................................................................................................................8
P7. Producing a cash flow budget for pre launch of a new business venture.........................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Launching a new business venture in a competitive market is quite complex. For an
entrepreneur to be successful in it, lots of skills and proficiencies are required that may help in
dealing with complex situations and problems. Furthermore, entrepreneurs also need some
inbuilt skills and talents that help an entrepreneur in achieving goals and objectives in a set time
frame (Launching a new venture 2018). In this report, entrepreneur is launching a cafe named as
Sip and Whip cafe in Italy. The cafe specialises in coffee and all major coffee related beverages.
This report is based upon launching a new venture and its affecting target market. Requirement
of various tangible and intangible resources have also been mentioned here. This report also
focusses on skills and talents of an entrepreneur which will help in launching a new business
venture.
TASK 1
P1Explain a new business venture with target market and competitive analysis
Sip and Whip cafe is a small scale cafe which offers customers with various types of coffee and
chocolate flavoured beverages. Furthermore, Sip and Whip cafe also deals in cakes and bakery
services where customers get an opportunity of customised baking as their choice (Barringer,
2015). They also have an online delivery app where customers can avail for home delivery
services. Main aim of this set up is to provide excellent and standardised quality services to its
customers. By bringing an innovation in their products, cafe has started attracting customers in
Milan, Italy.
SMART Objective of cafe: Entrepreneurs of Sip and Whip cafe have set certain SMART
objectives. These objectives have been stated as under:
 To offer high quality coffee and beverages to customers.
 To increase sales of coffee by 20% in next 2 years.
 To maintain large consumer base by providing high quality services.
Target Market: Sip and Whip cafe offers best quality products and services to customers
as per their need and demand which becomes a unique feature for them. Main target of manager
of this cafe is basically younger generation. Launching a cafe in Milan, Italy is possible due to
its culture, as people like a free lifestyle here where they are able to enjoy to fullest. In present
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context, target market is classified based on behavioural characteristics of people residing in
Milan. This reason made managers target youth for timely achieving their goals and objectives
in a set time frame.
Competitive analysis: Competitive analysis refers to assessment of a market plan so that
uniqueness and speciality of products and services is recognised by managers. Competitive
analysis focusses on strengths and weaknesses of competitors and various key strategies that they
use to overcome any such complex situations. As per present report, cafe launched specialises in
coffee and coffee related beverages. Hence, its competitors in UK are expected to be Costa
Coffee and Starbucks who have been earning huge profits. (Fisher and et. al., 2017).
Porter's five force model: Porter's fiver force model is a quite effective tool which helps
in analysing competition level of any business concern in competitive market. Managers of Sip
and Whip cafe use this for recognising current market situation of cafe. This model has five
factors which have been explained as under:
Competitive rivalry: Competitive rivalry is comparatively high as there are numerous
cafes in UK which are also dealing in similar products . Hence, managers of Sip and Whip cafe
should focus on its authenticity of taste, flavours and quality. This will further lead to creation of
a competitive edge in target market.
Bargaining power of buyers: Bargaining power of buyers will also be high for this
business venture as it is a newly established cafe. It has been noticed that prices of products may
vary as per demands of customers. As it is a new cafe, customers may prefer visiting an already
established renowned cafe rather than some new cafe. So managers should always focus on
quality for retaining customers.
Bargaining power of suppliers: Bargaining power of suppliers in relation to Sip and
Whip cafe is high as it may have numerous suppliers of coffee beans and chocolate based
products in market. Hence, it is expected that managers should build sound relations with
suppliers for buying coffee beans at a nominal value (Kuratko and Hornsby, 2017).
Threat of substitutes: Under this factor, threat of substitute products is moderate as coffee
and chocolate products of this cafe have a special flavour added in it. Hence, threat of substitute
products will not affect this cafe and its goods to a greater extent.
Threat of new entrants: Every new business concern needs time to build their brand
image hence it can be said that threat of new entrants is low in this respect.
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P2. Determining tangible and intangible resources needed for launching a new business venture.
Starting a new business venture needs numerous resources which will help in effective
establishment of business and its operations in an effective manner. In present context of Sip
and Whip cafe, entrepreneur is starting a new cafe so they should be well aware about resources
needed in launching a new cafe. Manager also needs to assess target market for a successful
future of cafe. Resources are basically classified into two types, tangible and intangible. Both
these resources have been explained as under:
Tangible resources: Tangible resources refers to such resources that can be touched or
are present in a physical form (Kuratko and Hornsby, 2017). Examples of tangible resources
include building, plant and monetary funds. Each and every business concern needs an
appropriate amount of funds for ensuring effectiveness of business operations. Managers of Sip
and Whip cafe have decided to involve an appropriate mix of resources for maintaining
effectiveness. Basic resources that are needed in setting up of a cafe are vending machines,
refrigerators, microwave, grill ovens and other attractive utensils as per theme. Managers will
also need human resource such as chefs, waiters and delivery persons. Lastly, monetary funds
also play a key role in running a business smoothly. Hence, it is duty of entrepreneurs to ensure a
stable and sufficient amount of funds to be made available.
Intangible resources: Resources that do not exist in physical form in nature are known as
intangible resources. Examples of intangible resources include patents, trademarks, goodwill etc.
Managers of Sip and Whip cafe have decided about getting their brand name patented so no
other entrepreneur can use it. Managers are also accountable for providing effective training to
their employees so that they maintain authenticity and work with higher efficiency. This further
leads to smooth functioning of cafe.
In addition to this the respective company is essential to recognise the target market,
determine competitors available in market and consider actual strength and weaknesses newly
developed venture that are discussed below:
Target market- This generally means that manager must select specific market that are
high in demands so that profitability of business can increased. This help respective company to
develop product accordingly which will satisfy needs of customer in most beneficial manner.
Like for new venture of Sop and Whips café they very first step is related to determine and target
the market
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Competitive analysis- This analysis is related to the assessing the level of rivalry present
within existing market. The Sip and Wips café must develop their new venture in area wherein
competition is low so that there product and services would easily capture huge customer base.
Same as to the LSI architects company should launch their new entity in the low competitive
market.
Strength and weaknesses of new venture-
Strength- The actual strength for newly launched business Sip and Wips café is that it
have designer and attractive architects which will draw interest of number of customer in order
to increased sales figure.
Weakness- The feeble opinion is that there is vast rivalry in the market due to which the
profit can be removed.
Area of risk- The main area of risk for new venture is that possibility of lower sell in the
initial stage and it can impact their sustainability. As well as due to less goodwill, it can be
difficult for the company to invest money in the promotion.
These are certain tangible as well as intangible resources that will help managers in
enhancing their productivity as well as profitability.
TASK 2
P3. Producing a credible proposal for launching a new business venture.
A credible proposal can be made after effective planning procedure. Proposal plan
includes details about an organisation and its description. Every entrepreneur uses this technique
before initiating proposals (Santos and et. al., 2015). Proposal planning includes various
strategies that have been formed after a proper study of market as well as competitors. The
detailed proposal plan of Sip and Whip cafe has been stated as under:
Executive summary Sip and Whip cafe has initiated with new and innovative
beverages and bakery products such as variants of coffee and
coffee related products. Also, managers of this cafe provide an
option to its customers for customised baking and online
delivery options. Entrepreneurs received a great response in
UK and hence decided to expand their business in Milan as
well.
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Company description Sip and Whip cafe is a small cafe that is located in UK and
plans to expand in Europe region. This cafe deals in
specialised coffee and coffee related beverages. Customers are
even given a option where they can get personalise breads and
cakes as per their demands. This cafe is run by two partners
who work jointly (Read and et. al., 2016).
Vision: To become a leading cafe in Italy by offering new and
innovative products and services in competitive market.
Mission: To develop its unique image in front of customers by
maintaining their authenticity in taste.
Market Analysis Market analysis is quite essential for every business concern
for identification of opportunities that are present in
competitive market. Market analysis also helps in
enhancement of profit ratio of Sip and Whip cafe. Managers of
Sip and Whip cafe undertake pestle analysis for evaluating
affect of external forces and market research for understanding
needs of customers. This will assist firm in determining the
factors that may influence on business operations and device
appropriate strategies to run business operations successfully.
Benchmarking For benchmarking standards, entrepreneurs have set certain
guidelines that will help in monitoring employees'
performance. Benchmarking helps in assessing internal
position of cafe. It further helps in enhancement of customer
satisfaction.
Financial projection Sip and Whip cafe has been initiated with a low budget of
approximately £ 6 millions. Entrepreneurs have invested in a
60:40 ratio. These funds are utilised for maintaining
effectiveness. (Douglas, 2017).
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P4. Assessment of skills and capabilities that are needed while launching a new venture.
Every individual who launches a start up has one motive i.e. growth and profitability of
business. It is essential that every business entrepreneur should have certain specific skills and
talents that help in launching of a new business venture in competitive market. In relation to Sip
and Whip cafe, its owner must possess certain qualities and skills which have been mentioned as
under:
Leadership: Leadership is referred to as an ability of an individual that help them in
influencing or attracting group of people for accomplishment of their own personal motive.
Managers of Sip and Whip cafe should pursue excellent leadership skills. This will further help
them in influencing and motivating their staff members and also ensuring effectiveness in
working. Leadership also leads to higher improved customer satisfaction. Owners of cafe should
be able to manage their workforce and provide them direction for enhancement in goodwill of a
firm.
Risk taking: Risk taking is a key capability of every entrepreneur. A successful
entrepreneur is one who is capable of taking risk in their business. In context of Sip and Whip
cafe, entrepreneur should be able to bear risks when market situations are uncertain. They should
be skilled enough to survive in any complex market situations. As this cafe is recently set up, it
is not known that whether results will be positive or negative. So, owners should have this ability
so that they can face any uncertain situation (Barrow, Barrow and Brown, 2015).
Communication skill: Communication is lifeblood of every business in today's world. It
is a medium which is used for transferring thoughts and ideas to one another in a relatable
manner. Owners of Sip and Whip cafe should use a formal communication for treating their
customers. Employees should involve a polite tone with customers and make them feel
comfortable. This will help in attracting customers towards cafe on a daily basis and enhance
their growth. This is one of the essential skill that is require to have in an entrepreneur while
launching a new venture.
Delegation: Delegation means to transfer a certain task to individuals. It is essential that
entrepreneur of Sip and Whip cafe should be able to delegate his duties to subordinates
depending on their skills. Delegation of tasks makes work easier and quicker as owners have lots
of tasks to perform and one person cannot manage entire operations of business (McGee and
Peterson, 2017). This reduce work load and also helps in timely completion of tasks.
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 Networking- This is very essential to launch a new business that responsible person
should have good networking skills. It means he/she should be able to make relations
with the external stakeholders.
 Problem solving skills- It is also important that, all the members should have problem
solving skills so that they can not stop due to any critical issue. Like in the above
respected company, they should have the skills to resolve any issue
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 at specified time.
TASK 3
P5. Explain various promotional activities and channels that are needed for launching a new
venture.
Every business venture requires certain marketing and promotional tools for promotion of
its goods and services. Basically in every business concern, a marketing manager is responsible
for promotion and advertisement of new products and services. This further helps in increasing
customer base for a particular brand in target market. In relation to Sip and Whip cafe, there are
numerous promotional tools and strategies that can be used for enhancing goodwill of their cafe
in UK. There are various promotional activities that can be chosen by managers. These are
explained as under:
Advertisement:Advertisement is quite an effective tool for conducting promotions. It is
most economical way of doing promotion. Advertising involves decision making based of five
factors that are money, message, media, mission and measurement (Hill, 2015). Managers of Sip
and Whip cafe can involve various ways of advertising such as outdoor ads, flyers, leaflets etc.
for promoting its goods and services. This will give a competitive edge to Sip and Whip cafe by
attracting more number of customers.
Sales promotion: Promotion is known as an incentive tool that helps in driving up or
enhancing short term sales. Sales promotion can be both directed at consumer or directed at
trade. Consumer incentives of sales promotion involves samples, coupons, free trials and so on.
Managers of Sip and Whip cafe consider this tool for attracting customers so that they can utilise
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services at low prices. This also helps in using benefits of loyalty incentives as well. This is most
significant way of attracting youngsters as well as other people (Penrose, 2017).
Social media: Social media is most used platform for promotion and advertising. Social
media is mostly used and preferred by younger people. They use social media channels on a
regular basis. It is also considered as cheapest form of promotion. Managers of Sip and Whip
cafe can use this technique by forming a social media account or creating a page where they can
post about their cafe and its activities. This happens to be most effective way of promoting cafe
and attracting larger sections of consumers.
Hence, it can be said that owner of Sip and Whip cafe can use any of the above
mentioned promotional activities . Among them social media is the most effective and cheapest
way of popularising the unique products of the cafe (Mamun and Ekpe, 2016). By using these
promotional activities Sip and Whip cafe can grab attention of its customers which will directly
enhance its sales and leads to business growth.
P6. Developing a promotional activity plan for launch as well as pre launch of new venture.
Promotional activities are an essence of business growth. These activities are considered
by every business entity for advertising their products and services. This further helps in brand
recognition of a business concern in competitive market. Managers of Sip and Whip cafe have
undertaken various promotional tools and activities at pre launch as well as post launch of their
cafe.
Pre launch promotion: Pre launch promotion is a process which usually begins before an
organisation enters into competitive market. Various promotional tools used by managers for
attracting customers have been mentioned as under:
Advertisement: Advertisement involves promoting business of an organisation with the
help of print media. Various advertisement includes outdoor ads, flyers, leaflets etc. are used by
firm for promoting its goods and services.
Social media: Social media is most used platform for promotion and advertising.
Managers of Sip and Whip cafe can use this technique by forming a social media account where
they can post about their cafe and its activities. This happens to be most effective way of
promoting cafe and attracting larger sections of consumers (McKelvie, Wiklund and Brattström,
2018).
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Launch promotion: Promotional activities that are undertaken after a cafe is launched is
referred to as launch promotion. Promotional activities after launch help in enhancing sales in
long term. Managers of Sip and Whip cafe use this promotion technique to enhance their existing
sales.
Sales Promotion: Sales promotions include numerous promotional activities such as
coupons, discounts, loyalty bonus and so on. Managers of Sip and Whip cafe consider this tool
for attracting customers so that they can utilise services at low prices (Cavusgil and Knight,
2015). This also helps in using benefits of loyalty incentives as well.
Promotional activities for launch and pre-launch- This is required to use different types
of promotional activities before launching product. For example in the above context they want
to launch a new business so it is necessary to follow these activities:
Organise a pre launch- It is important to organise a pre launch programme for the
purpose of awaking all the internal stakeholders.
Increase organic visibility- It is is related to the creating a brand image in the mind of
customers for the purpose of increasing goodwill. Such as in respected company, they are
needed to increase goodwill of new business.
TASK 4
P7. Producing a cash flow budget for pre launch of a new business venture.
Cash budget is essential to prepare in order to identify the information about the amount
spend on each activities while performing for achieving desired target. It gives the data related to
inflow and outflow of cash in an organisation over the period of time (Cosenz and Noto, 2018).
Cash flow budget will help managers of Sip and Whip cafe for ascertaining their liquidity
position. Also, it facilitates by keeping a systematic record of all monetary transactions.
Pre launch cash budget
Cash Flow budget
Particulars Jan Feb Mar Apr May June
Cash inflows
Investment 8000
Credit sales 2000 3000 3000 4500 1500 3500
Total inflows 10000 3000 3000 4500 1500 3500
Cash outflows
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Fixed : Equipment’s 2000 2500 1500 2000 1200 1500
Variable : Direct material 300 300 200 300 150 500
Total outflows 2300 2800 1700 2300 1350 2000
Net cash flow 7700 200 1300 2200 150 1500
Opening balance 0 7700 7900 9200 11400 11500
closing balance 7700 7900 9200 11400 11550 13000
Particulars July August
Septembe
r October November
Decembe
r
Cash inflows
Investment
Credit sales 4200 1000 2000 800 1200 1500
Total inflows 4200 1000 2000 800 1200 1500
Cash outflows
Fixed : Equipment’s 800 200 300 100 600 300
Variable : Direct
material 300 400 500 100 100 400
Total outflows 1100 600 800 200 700 700
Net cash flow 3100 400 1200 600 500 800
Opening balance 13000 16100 16500 17700 18300 18800
closing balance 16100 16500 17700 18300 18800 19600
Post launch cash budget
Particulars Jan Feb Mar Apr May June
Cash inflows
Investment 8000
Credit sales 1200 2000 7500 3000 5000 6500
Total inflows 9200 2000 7500 3000 5000 6500
Cash outflows
Fixed : Equipment’s 2500 1200 1500 2500 1100 1500
Variable : Direct material 350 300 250 150 100 500
Total outflows 2850 1500 1750 2650 1200 2000
Net cash flow 6350 500 5750 350 3800 4500
Opening balance 0 6350 5850 11600 11950 15750
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closing balance 6350 5850 11600 11950 15750 20250
Particulars July August September October November December
Cash inflows
Investment
Credit sales 1200 3200 1500 8200 1250 3210
Total inflows 1200 3200 1500 8200 1250 3210
Cash outflows
Fixed : Equipment’s 1200 600 500 500 1200 700
Variable : Direct
material 500 250 450 250 1300 500
Total outflows 1700 850 950 750 2500 1200
Net cash flow -500 2350 550 7450 -1250 2010
Opening balance 20250 19750 22100 22650 30100 28850
closing balance 19750 22100 22650 30100 28850 30860
Interpretations: From the above mentioned cash flow statement it has been observed that an
effective and sound cash flow statement is quite essential whenever a company wishes to set pre
and post launch budgets for goods and services. As per the pre launch budget of cash flow
statement it is estimated to be around 11500 in June while it closes at 13000. Post launch cash
flow budget at December is estimated to be 28850 whereas closing balance is estimated to be
30860.
Legal structure of a firm:
Legal structure of business is different for different organisations. In present scenario, as
it is a private sector business entity, the legal structure is further classified into two categories
namely sole proprietorship and partnership.
Sole Proprietorship: Sole proprietorship is a form of business where an individual has a
whole and soul authority of business and its operations. This type of businesses are owned
managed and controlled by one single individual.
Partnership: Partnership is a form of business where two or more people come together
and pool their funds and resources jointly. They are both responsible for forming laws and
policies and also sharing profits and losses.
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In case of Sip and Whip cafe, partnership business form is selected as the firm will start
by 2 partners. Its legal structure is of a partnership firm where partners share profits and losses in
60: 40 ratio.
Suggestion- As per the above mentioned legal structure of the firm it can be suggested to
Sip Whip cafe that they should use the partnership form. This is why because it can be beneficial
for them as well as due to more partners their decision-making power will increase.
CONCLUSION
From the above mentioned report it has been concluded that for launching new venture it
is essential that every businessman should be able to understand the external market scenario
for growth of business. In this report, launch of new venture has been elaborated with specific
target market. In addition to this, Porter's five force model has also been discussed in order to
understand competitive analysis of a chosen venture. This report also contains various
promotional activities such as advertisement, sales promotions and social media 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. This further
leads to overall growth and development.
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REFERENCES
Books and Journals
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