Business Planning and Entrepreneurship

This assignment provides a detailed report on the importance of planning a new business venture, including various ways and processes that help develop a business plan. It covers PEST analysis of the target market, which helps entrepreneurs examine different ways to achieve effectiveness in a business. The report also includes vision, mission, aims, and objectives of a business concern, along with types of forecasts that aid in effective business growth and productivity enhancement. Furthermore, it highlights the identification of business responses and pitching a business proposal.

Planning a new
business venture

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Analysis of different types of business concerns based on their risks, benefits and
limitations...............................................................................................................................1
1.2 Analyse sources of finance for different business concerns.............................................2
1.3 Legal considerations regarding planning of a business venture.......................................2
TASK 2............................................................................................................................................3
2.1 Analyse market conditions that impact on setting up a new business venture.................3
2.2 Analyse gaps in the market for potential products...........................................................4
2.3 Analyse target markets for a business venture.................................................................4
TASK 3............................................................................................................................................5
3.1 Develop the mission, vision, aims and objectives of the business...................................5
3.2 Interpret external factors to justify need for your business product.................................6
3.3 Specify the business product to meet needs.....................................................................6
3.4 Propose business structures and systems that will deliver business aims and objectives 7
3.5 Produce business planning forecasts based on targets.....................................................7
3.6 Identify business responses if targets not met..................................................................8
TASK 4............................................................................................................................................8

4. Covered in PPT...................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Planning is a quite important process which affects overall functionality of a business
concern. Business ventures normally get initiated at a quite smaller scale. Many a times money
or capital can be invested by more than one individuals or a groups. Main aim of people who
invest in funds is mainly earning higher profits . Business ventures in competitive market get
initiated due to demands of market or lack of supply (Kuratko and Hornsby, 2017). This report
has been framed on Unicorn which is a small scale business concern located in Manchester, UK.
It is basically a grocery store that deals in organic food products at fair prices. This report
encompasses various topics such as different types of business concerns along with their risks
and benefits. Also this report focusses on various factors that drive market potential along with
skills that help in developing business cases. Lastly this report mentions details regarding
pitching of a business proposal.
TASK 1
1.1 Analysis of different types of business concerns based on their risks, benefits and limitations.
Case Scenario: This report has been framed base on a supermarket chain store of UK
named as Unicorn groceries. This organisation was basically chosen so as to evaluate the impact
any new development idea or plan has on small and medium sized business concerns.
Business concerns can be of various types depending upon their size scale and area of
operations as well. These business concerns can further be divided into 5 broad categories:
Type of business
concern
Risks Benefits Limitations
Sole
Proprietorship
Personal assets of
individual are considered
as assets of business
It is owned by one person
hence decision making
becomes quite easy.
Raising higher
amount of funds is
quite difficult.
Partnership Each partner is jointly
and severally liable for
another.
Higher amount of profits
can be generated as
compared to sole
proprietorship.
Decision making is a
complicated process
Company There are a number of It is a separate legal Business decision
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risks in companies such
as strategic, regulatory
and financial risks
(Honig and Hopp, 2016).
entity. making happens to be
a quite complex
process as number of
people increases.
1.2 Analyse sources of finance for different business concerns.
Finance acts as lifeblood for every business entity. The amount of funds required by a
business concern may differ depending upon the size and scale. Sources of finance which are
used by business concerns have further been stated as under:
Savings: It is an amount that remains unspent with a person or anything that an
individual has not utilised. It is generally calculated by subtracting expenses from net income
received. This amount can be used by entrepreneurs as capital in their business concerns.
Loans: A loan refers to a refundable amount that is lended to any person in return for a
minimal rate of interest. In present context owners and managers of Unicorn prefer taking loans
from banks as it is a safe and secure method of funding.
Profits: Profits is something a business man earns in respect of goods and services
provided by him. Profits of a firm are calculated by subtracting the amount spent from the
amount gained (Birley and Stockley, 2017).
Private Equity: Private equity refers to a class that comprises of alternate investment
options. Capital or funds in this category are not listed on a stock exchange. It comprises funds
and investors who have a mindset regarding directly investing in private business entities.
In context of Unicorn groceries owners and managers have chosen bank loans to be a
successful option for availing funds.
1.3 Legal considerations regarding planning of a business venture.
Planning regarding a successful business venture is a quite complex process and involves
a number of steps and techniques. It is basically a process which deals with activities and
processes that help in achieving a desired goal or objectives. There are a number of legal
constraints that each organisation is required to follow while undertaking its business operations.
Health and safety act: This act was passed by government of UK in 2015 which
explains or defines the duties of employers, employees and all other relevant people that exist at
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a workplace. Main aim of this act is to maintain safe and secure working environment in
business concerns and ensure health of their employees. This helps in developing a sense of
belongingness in employees (Cosenz and Noto, 2018).
Contract act: Contract act in UK was proposed in the year 1990. It is basically a body
of rules and laws that is meant for regulating or controlling various contracts and contractual
agreements in UK. Main aim of this act is to maintain effectiveness in contractual agreements
and business practices along with protecting rights of buyers as well as sellers.
Employment law: As per this act employees are entitled to certain legal rights such as
receiving a week's notice each year along with minimum wages of around 7.50 pounds per hour
as well as maximum average working week of around 48 hours. All these rights help in raising
confidence and motivation of employees and develop a sense of belongingness in them.
TASK 2
2.1 Analyse market conditions that impact on setting up a new business venture.
For effectively analysing the market conditions that have an impact on business venture
can be ascertained by conducting a PEST analysis of the market.
Political: This factor deals with political condition of a business environment. It includes
various rules and policies that have been laid down by government of UK. In present context it
has been observed that managers of Unicorn Groceries will have to effectively go through
political conditions of a country before planning any new ideas.
Economic: It includes various economic factors such as current state of economy of a
country, exchange and inflation rates, disposable income of customers etc (Scarborough, 2016).
In relation to Unicorn Groceries it has been observed that managers will have to consider certain
economic elements so that they can decide about what policies can be adopted in their
organisation.
Social:Various elements in context of social factors are level of health, educational
backgrounds, growth rate of population, religious and social beliefs of people etc. Managers of
Unicorn groceries will need to examine cultural and social elements before adopting any changes
in their production processes or products they sell.
Technological: Technological factors as the name says refers to advancements or
innovations in technology. For example whenever a business wishes to adopt a new technology
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they need to first check whether it will be successful or not. Managers of Unicorn will have to
evaluate various tools and techniques before choosing any one best method. This will be helpful
as it will provide a competitive advantage to their company.
Another important variable in this context is competitor analysis. It is basically a tool
which states strategies and policies considered by competitors or their way of doing business
operations. It is basically an in depth analysis of competitors state. For this managers of Unicorn
have chosen Porter's Five force model.
Porter’s Five Forces Analysis
Supplier Power:
In order to increase supplier prices it is essential for Unicorn to determine the number of
supplier they have. By choosing this company can have easy access to cheap alternatives. In
context with present scenario, it has been analysed that supplier power is not that much high
thus, this may not impact not organisation profit.
Buyer Power:
Power of buyer may lead company towards affecting price change. In this modern
technological world. Buyers have access to internet with the help of which they can able to
compare prices and further have related information about wide range of products and services.
In context with, Unicorn buyer power is high as in this customers can check prices of numerous
other companies and can further male comparison according to low cost.
Threat of substitutes and complementary goods:
Increase in existence of products lead towards increasing propensity of consumers as they
get the option to switch to other alternatives. As context with present scenario, Unicorn is having
high risk in substitutes as there are many other supermarket present in marketplace.
Threat of new entrants on the market:
UK is having less barriers that allow small level of threat for existing players. There are
different types of factors within economy of UK that include, high consumer loyalty for existing
brand. Economies of scale, limited access to distribution channels and government policies.
Because of liberalisation there is easy access for potential entrants that may impact on
functioning of Unicorn.
Competitive rivalry:
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There is intense competition in marketplace in UK economy. Unicorn is facing high
strength of competitors. In addition with this, with the quality of their products and services
company is having healthy profits.
2.2 Analyse gaps in the market for potential products.
Case Scenario: This report has been framed base on a supermarket chain store of UK
named as Unicorn groceries. This organisation was basically chosen so as to evaluate the impact
any new development idea or plan has on small and medium sized business concerns.
Gap analysis is an important tool which examines differences in performance of business
along with software applications. It helps in determining whether goals and objectives of a
business are being met or not. It is an essential tool that helps in comparing present and standard
performance (Futterer, Schmidt and Heidenreich, 2018). Gap analysis in context of Unicorn was
considered so as to achieve the following benefits
 Finding the scope of development by launching or innovating new products and services.
 Gap analysis also benefits in finding new and emerging trends that are present in current
market.
By conducting a gap analysis business owners come to known about current market
scenario and trends. Also it helps in examining what technology or tools will be beneficial for
growth and development of a business. It is basically a 3 step process which includes analyse the
current state of a business along with identifying the ideal future state. Last step in gap analysis
process is to find effective tools and techniques that help in bridging the gap.
2.3 Analyse target markets for a business venture.
Target market is an important key word which states or defines a specific and defined
customer segment within the serviceable market of business. Defining a target market helps a
business concern in providing an easy decision regarding market position (Cosenz, 2017). By
adopting this approach small scale business concern such as Unicorn gain an advantage in
competing with large scale business concerns. Defining a target market is a quite complex
process and infuses a number of steps such as segmenting the market, identifying USP, analysing
or examining customer base along with analysis of competitor's customer base as well. Also
there are a number of factors that affect analysis of target market. These factors have further
been stated as under:
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Socio economic: Factors that are used to examine situations or trends that are prevailing
in a society are referred to as socio economic factors. All these factors are quite interrelated to
each other. For example; Income of an individual determines his spending power.
Age: Age is another key factor that affects target market. For example business concerns
that deal in manufacturing toys will target customers within a group of 0-10 years.
Gender: Another significant factor in this context is gender. It examines whether a
business concern targets male population more or female population. For example, cosmetic
brands such as Maybelline, Lakme attracts female crowd more as compared to male.
Target market for Unicorn:
TASK 3
3.1 Develop the mission, vision, aims and objectives of the business.
Case Scenario: This report has been framed base on a supermarket chain store of UK
named as Unicorn groceries. This organisation was basically chosen so as to evaluate the impact
any new development idea or plan has on small and medium sized business concerns.
In present context Unicorn is a small scale business concern in UK which operates in
grocery or retail sector (Burns, 2017). Various key terms such as aims, objectives, vision,
mission have been mentioned as under:
Vision: Vision of Unicorn grocery is “To enhance their customer base by providing excellent
quality goods and services.”
Mission: Mission of Unicorn Groceries is “To maintain a stable brand image in competitive
market against its rival firms.”
Aims: In this context main aim of Unicorn Groceries is “To be a leader in retail sector in context
of small and medium firms in UK.”
Objectives: Objective is something that a company wishes to achieve within a specified time
frame. In context of Unicorn its objectives is to increase its sales by 20% in 2 months (Rakićević,
Omerbegović-Bijelović and Lečić-Cvetković, 2016).
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3.2 Interpret external factors to justify need for your business product.
Factors that are present outside the controlling of a business environment are referred to
as external factors. External factors are generally examined or evaluated by conducting a PEST
analysis which has further been stated as under:
Political factors: In context of UK political factor plays a quite significant part as
political stability happens to be a power or strength of a country. In context of Unicorn
entrepreneurs will need to assess political factors so as to achieve benefits from political
conditions.
Economic factors: Economic combination or landscape plays a quite important role in
PEST analysis. It includes various elements such as economic rates, inflation deflation rates,
GDP etc. All these factors play a quite important role in planning a new business plan or
strategy.
Social factors: UK has a quite large consumer market base. This lays a quite significant
impact on businesses and their growth. Also these factors lend various growth opportunities to
business concerns and help them in enhancing their growth and profitability (Jansen, 2017).
Technological factors: UK happens to be most economically and technologically
developed economies f the world. London happens to be a hub for technological and economic
advancements. Using new and innovative tools and techniques helps in providing a large number
of growth opportunities to entrepreneurs of small scale business ventures in UK.
Porter’s Five Forces Analysis
3.3 Specify the business product to meet needs.
In context of Unicorn, it is a grocery store which provides goods and commodities of
retail sector. In the present scenario Unicorn is planning to launch a new and innovative product
Choco Latte which is a combination of cold coffee and chocolate shake. Various factors that
were considered while planning for this product are:
Purpose: Main aim of entrepreneurs behind innovating or bringing in this product is to
enhance their loyal customer base and attracts kids towards their brand (Stenholm and Renko,
2016).
Pricing: Price of this product is kept quite low so that customers are willing to purchase
this product and try it.
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Target Market: In context of target market, entrepreneurs right now specifically
concentrate on age groups 5-25 years as this product is a chocolate based drink and is expected
to attract younger generation more.
3.4 Propose business structures and systems that will deliver business aims and objectives
For effective achievement of goals and objectives, various factors such as business
structures and systems have been stated as under:
Organisational structure: Organisational structure refers to a system that outlines how
an activity is to be undertaken in a business concern. It also determines the flow of information.
In context Unicorn managers follow a functional organisation structure.
Resource management system: It is a solution which helps in efficient management of
non mobiling handling resources. An example of an effective resource management system is
airline ticket counters, Kiosks operations systems etc.
Communication and customer service: Communication is a process which deals with
transfer or exchange of information. Entrepreneurs in Unicorn adopt written communication
method for exchanging information in their business concern and also serving customers as well
(Burns and Dewhurst, 2016).
Technology: Technology is a quite broad term which explains new and innovative tools
and techniques that can be used for undertaking business operations. Unicorn uses new an d
advanced tools and techniques for achieving effectiveness in business operations.
3.5 Produce business planning forecasts based on targets.
Business planing forecasts is an effective tool which explains various opportunities that
may be available to business concerns in near future. There are a number of ways forecasts can
be explained.
Financial forecasts: It is an important tool which which refers to an estimate of financial
outcomes that may occur in future in a company . This greatly helps in budgeting and valuation
of a business.
Physical forecasts: Forecasting that is based on geographical divisions or factors are
referred to as physical forecasts (Scarborough, 2016).
Sales forecasts: It is an important forecasting tool which explains future opportunities
that may be available for business entities in sales . Companies may even use past sales data as
well as economic trends as well.
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Organisational structure of Unicorn, and how its helps in achieving its goals.
With the help of present organisational structure Unicorn can effectively able to operate
their daily basis functions with the help of which company can lead towards more attainable
growth. In addition with this, present organisational structure allow company to manage, control
and systematize their operations and further attain desirable outcomes. By conducting activities
in a well structured manner company can further able to perform their goals and objectives with
the help of which effective outcomes can be accomplished.
3.6 Identify business responses if targets not met
If any business concern is not able to generate sufficient amount of funds then there may
be a number of responses which a business may have to face such as insolvency, bankruptcy, etc.
Also if a business venture wishes to expand its business operations then they will have to further
arrange more amount of funds for achieving growth of their business operations.
Insolvency: - Insolvency is a state of financial distress in which someone is unable to pay
their bills. It can lead to insolvency proceedings, in which legal action will be taken against
the insolvent entity, and assets may be liquidated to pay off outstanding debts. There are
basically two forms of insolvency namely cash flow insolvency and balance sheet insolvency.
Bankruptcy: Bankruptcy is a legal status of a person or other entity who cannot repay
debts to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated
by the debtor. It is an important medium which states that a person has run into losses and is not
able to pay his debts any further. It is a condition that is imposed by court of law.
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TASK 4
4. Covered in PPT
CONCLUSION
From the above mentioned report it has been concluded that planing a new business
venture is quite an important process which states various ways and processes that help in
developing a business plan. This report encloses PEST analysis of target market which helps
entrepreneurs in examining various way in which effectiveness in a business can be achieved.
Also this report contains vision mission and aims and objectives of a business concern along
with various types of forecasts and help in effective business growth and productivity enhances./
Lastly light has also been thrown on identification of business responses along with pitching a
business proposal.
REFERENCES
Books and Journals
Kuratko, D. F. and Hornsby, J. S., 2017. New venture management: The entrepreneur’s
roadmap. Routledge.
Honig, B. and Hopp, C., 2016. New venture planning and lean start-up activities: A longitudinal
empirical study of entrepreneurial success, founder preferences and venture context. In Models of
start-up thinking and action: Theoretical, empirical and pedagogical approaches. (pp. 75-108).
Emerald Group Publishing Limited.
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Birley, S. and Stockley, S., 2017. Entrepreneurial teams and venture growth. The Blackwell
handbook of entrepreneurship. pp.287-307.
Cosenz, F. and Noto, G., 2018. A dynamic business modelling approach to design and
experiment new business venture strategies. Long Range Planning. 51(1). pp.127-140.
Scarborough, N. M., 2016. Essentials of entrepreneurship and small business management.
Pearson.
Futterer, F., Schmidt, J. and Heidenreich, S., 2018. Effectuation or causation as the key to
corporate venture success? Investigating effects of entrepreneurial behaviors on business model
innovation and venture performance. Long Range Planning. 51(1). pp.64-81.
Cosenz, F., 2017. Supporting start-up business model design through system dynamics
modelling. Management Decision. 55(1). pp.57-80.
Burns, P., 2017. New venture creation: a framework for entrepreneurial start-ups. Palgrave.
Rakićević, Z., Omerbegović-Bijelović, J. and Lečić-Cvetković, D., 2016. A model for effective
planning of SME support services. Evaluation and program planning. 54. pp.30-40.
Jansen, W., 2017. New business models for the knowledge economy. Routledge.
Stenholm, P. and Renko, M., 2016. Passionate bricoleurs and new venture survival. Journal of
Business Venturing. 31(5). pp.595-611.
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
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