Startup Business Planning and Finance

The assignment provides a collection of scholarly articles focusing on different aspects of starting and managing a new business. Topics covered include business planning, resource acquisition, strategic innovation, joint ventures, new venture teams, business models, and the influence of political and social environments. The articles analyze various factors contributing to startup success and highlight the importance of strategic planning, financing structures, and network building.

Planning a new
Business Venture

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
b) Analysis of sources of finance...........................................................................................2
c) Legal considerations relevant to planning a business venture..........................................3
d) Analysis of market conditions............................................................................................3
TASK 2............................................................................................................................................4
Business Planning...................................................................................................................4
TASK 3............................................................................................................................................8
Pitching Investor.....................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business is defined as organised efforts of group of individuals which are directed to
achieve the shared goals. The individuals are aimed to attain a specific level of profit for
organisation to sustain its operations in market for a longer period of time. A business utilises
suitable enterprise strategy along with suitable offering to ensure that their operations are carried
out for a longer period of time (Atherton, 2012). This report takes into consideration developing
a new business venture of a Coffee shop named as Coffee Culture. The report focuses on
conducting a research which analyses benefits, drawbacks and sources of finance which can be
availed by this venture. The development of vision, mission and aim of this venture will be taken
into consideration along with emphasizing on offering and planning forecasts.
TASK 1
An entrepreneur before starting a new venture can takes into consideration the type of
business that he is willing to form. There are variety of approaches through which a new
business venture can be planned. Some of them are as follows:
Sole Proprietorship: This is the most common style through which a business is
introduced in the market. This venture is owned and managed by a single individual. An
individual running a business is fully accountable for manner in which operations are carried out
(Chwolka and Raith, 2012). The benefits of venturing through sole proprietorship is that a
person does not have to go through legal formalities. Main limitation of this type of venture is
that an individual will not be able to raise all capital by himself which is required to make a
difference in the market. Most importantly, losses incurred by business will be borne by
proprietorship himself.
Partnership: This is another means through which a business can be initiated. This
approach of raising funds is comparatively better than one as it involves number of people who
are responsible for carrying out operations. The profits and losses by business will be shared in a
defined ratio. The limited partners in partnership are not liable to extent that general partners.
The major drawbacks of this business is that before formulating a decision, it is essential to carry
an interest of all before making a decision.
Corporation: It is another approach through which a business can be launched on a large
scale. This new business is made up of shareholders who possess a mentioned level of business.
The potential it carries that is equips a business with adequate finances which help in carrying
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out its operations. In case of losses, it is borne by all the shareholders of enterprise rather than
entrepreneur himself. The drawbacks to this measure is that it involves a lot of paperwork which
is to be filled in secretary office and corporation needs to pay heavy taxes. The shareholders are
responsible for formulating decision which can be taken on the basis of profits rather than
development of business.
b) Analysis of sources of finance
Finance constitutes as the most important resource to an organisation. To start a new
venture, a developer can take assistance from variety of sources which are helpful in building an
ideal business (Ciabuschi, Perna and Snehota, 2012). Some of the major sources of finance are:
Personal sources: These refers to the financial capital which is to be utilised by an
individual in starting up of a business. The personal savings of an individual are employed in
running a business or the business planner can take help from friends and family in raising funds.
This is the most risk oriented manner of gathering adequate finance for venture. If the venture
fails in achieving its targets and objectives, it can lead to bankruptcy of an individual.
Internal sources: These are another sources of funds which can be utilised by a business.
The employment of retained earnings and shareholder's funds are the two major sources to raise
finance for the new business venture. This source is applied by individual who wish to retain
their control over business operations that wishes to retain control over the business. The
shareholders are awarded with dividends in return of the shares which have been owned by them.
External sources: This is the most crucial source of raising funds for the new venture. A
undertaking can take assistance from banks in terms of loans to raise funds for business. The
major drawback to this approach is that loans and repayment to banks have become a headache
when business is not incurring sufficient revenue.
Outside investors have sometimes become helpful in raising funds for business. It is an
approach through which share capital for an organisation (Hiatt and Sine, 2014). It is helpful in
raising funds for business for a longer period of time.
Business Angels is the main source of funding for a new venture. Any business who
carries a business potential will be supported by the angel investor and provided with funds to
carry out of operations. Venture capitalists are professional investors who take over control on
the business. The minimum investment which can be received through venture capital can be
around 1 million euros.
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c) Legal considerations relevant to planning a business venture
It is not easy to start a business venture as it involves a lot of legal considerations which
are to be kept in mind. The company's filings and regulation are to be filed by an individual
looking to start a venture. Main areas of legal considerations which are to be emphasized are:
Business Name: The new venture should be given with a name that does not violate
rights of any existing business. An individual can insight out the list of names which are
registered with secretary of state and find a name that is distinct and catchy. The name is to be
registered with UK patent and trademark office.
Doing business As (DBA): It is a crucial aspect while carrying out a business in
partnership and limited liability company. If a business venture is carried out in a different repute
than the name of owner. This legal form in this context is to be filed at the state or county level.
Employment laws: These are other legal areas which are to be given with due
consideration. It is an obvious fact that a new venture will employ people and a business needs to
keep in mind the obligations towards recruited people (Hormiga, Batista‐Canino and Sánchez‐
Medina, 2011). Various grounds are employee insurance, compensation and ideal work
environment.
Business Permits and licenses: Before initiating a business, there are variety of licenses
and permits which are to be adopted by a business. Relying on the location, a business has to
obtain permits and license beginning from local, state and regional level of offices of
government.
Trademark Protection: A new business venture can apply for trademark protection of
their logos and symbols. This is mainly done to protect others from using name or symbol of an
enterprise. Business people can apply for trademark protection on the government website and
can see if they qualify for the same or not. This process takes around 4 months and valid up to 10
years.
d) Analysis of market conditions
It is crucial to analyse market conditions to ascertain the possibilities of business being
successful and it helps in utilising that information to create an ideal business plan (Johnston and
Bate, 2013). The various factors which are to be considered are:
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Demographics and segmentation: this particular business venture is to be opened at a
small scale therefore the local market is to be emphasized. This present market can be divided on
to prospects and non coffee drinkers.
Target Market: it is defined to be the area which is to be targeted with products and
services of the company. The office going people are to be targeted with upcoming venture as it
serves requirements of caffeine to people. It is essential to identify target market so that products
and services are manipulated according to requirement of targeted people.
Market Need: Venturing into coffee business is a safe option. There is an increase of
coffee drinkers in the market which calls out need for more coffee outlets. This venture can be
successful in the market as there is a need for coffee outlet which serves requirement of people.
This helps an organisation to focus on factors which are main drivers of arranging demand for
the product. The consistency in the caffeine sector is main driver of demand for the product.
Competition: This analysis takes into consideration the main rivals of this venture. It is
necessary to critically analyse competitors and their offering to identify measures in which their
products and services can be defeated (Killing, 2012). In coffee sector there are numerous mega
corporations which are specifically catering the premium segment which identifies need for a
venture to deliver the same to budget conscious people.
Barriers to entry: The market of United Kingdom is free market i.e. there is no
restriction on entry and exit of firms. The free economy of the country does not act as a barrier to
an individual who is looking to carry out its operations in the market of United Kingdom in an
ethical and defined manner by the government.
TASK 2
Business Planning
a) Organisation
The business venture undertaken in this report is opening up of a coffee shop named as
'Coffee Culture'. The venture is launched to serve requirement of coffee of individuals.
Mission
The mission of this venture is to
 Provide quality services to the people in an ethical manner.
 To serve the requirement of caffeine of people in an excellent and perfect manner. To connect with consumers in an ideal manner.
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Vision
The vision of this venture is to established in the market as a perfect place to have coffee through
innovation and quality products.
Aims and objectives
These are the targets which a business wishes to achieve in particular period of time.
Aims and objectives of Coffee culture are as follows:
 Customer services is the priority of this venture. The efforts of the company are aimed to
serve its customers in the best possible manner with the help of their efficient and capable
staff (Klotz and et al., 2014).
 Sales are a crucial part of an objective. The company aiming to achieve financial growth
of the company and attain approximately 20% of the market so that they are able to
operate in the market.
 The another aim of this business is to develop a menu which is distinct so that they are
loyal to this venture.
 The Business aims to adopt marketing tactics which are able to increase the footfall of the
consumers and make them aware about opening up of new coffee outlet for all.
The business structure which have been adopted for this venture is partnership. The
justification of the same is that it is the most common and easy manner to start a venture. As this
venture is to be introduced on a smaller scale requirement of finances can be fulfilled by the
venture capitalist. A backer can provide an appropriate funds which can help in carrying out
operations on a day-to-day basis (Michelini and Fiorentino, 2012). Among the various types
available, general partnership is adopted in this scenario. A business system takes into
consideration the process methods adopted to fulfil the goals and targets established by owners.
In case of coffee shop, Carbon filtering system can be deployed so that beans are chemical free
and served in manner desired by consumers.
Product
Products and services which will be rendered to consumers will be in three types i.e.
coffee beverages, coffee products and baked goods. The emphasis will be on the serving
requirement of caffeine to people. The coffee offerings will be done in three variants of coffee
mugs. The taste of coffee will be best an individual have ever tasted as they sourced organically
from international boundaries.
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The services will be rendered in the target market due to their high preference for coffee
and lack of alternative available for consumers. Britain is the country which is known fro their
coffee consumption therefore it is comparatively less risky to venture in this segment. And
another feature which support this venture is the lack of availability of service which is
affordable to masses. Espresso have gained a lot of popularity in targeted region and is preferred
by consumers. Research conducted by a daily stated that latte and espresso are the two major
preferences of people and occupying a total of 58%. Data is enough to decide that business will
make efforts to suffice best of these two mentioned servings of coffee.
Business Planning forecasting
Business planning forecasting aims to determine what the future of business would be.
The probabilities of the future will be analysed with the helps of available information so that
future circumstances of business can be ascertained (Parker and Van Praag, 2012). The
projected sales of coffee for the next 12 months have been forecasted and documented such as,
The above graphs shows the number of sales which are predicted for the next 12 months.
The business is to be launched at new year and will start its operations in January 2018. the line
graph shows the assumption of per day sales of business. These numbers are to be reviewed
every months and corrective measures are to be carried out.
If a business fails to crunch the numbers which have been forecasted then it is the time to
respond to that particular situation and being back the sales track of the company.
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 The first step which is to be taken is deep analysis. The analysis of the business
functioning helps in identifying what the root cause of problem (Savitch, 2014).
Impulsive decision which are formulated will lead to lower sales and productivity of the
venture.
 After the owners have identified root cause of the problem it is essential to deal it in a
retrospective manner. This is done to identify previous measures which can be helpful in
constructing a roadmap for business.
 Performance reviews are another measure through employee discrepancies are addressed
so that they are able to perform better than before.
 Reviewing of circumstances in which businesses are carried out. It helps in identifying
area which are hindering sales of the company (Missed Your Sales Targets? What to Do
Now, 2017). It can be related to technicalities and support mechanism of venture.
TASK 3
Pitching Investor
A business plan is crucial element which can help a business in raising funds for an
venture. It can help a venture in getting appropriate amount of finances responsible to carry out
their operations (Zott, Amit and Massa, 2011).
Coffee Culture aims to fulfil the daily dose of coffee of prospects. It is the ideal place
where one wishes to spend time away from the stress and worries of the world. It provides a
friendly and casual ambience which lays out an ideal place to catch up with friends and family.
This coffee set will be established near mega corporation where thousands of people work and
the place has been taken on lease for the next three years. The requirement of coffee is high and
this venture can capitalise on the same and can earn good amounts of profits. The espresso and
latte will be the main two serving which have been identified after conducting a market research
the projection of the first year will grow from 72 to approximately 400 customers per day. This
high potential business is looking for finance which will guaranteed by fulfilled in short span of
2 years. Listing below is a chart which shows the estimated earning of this venture.
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There is a continuous increase in the sales of the service and year after year there is
steady increase in the profits of the business as well. This projection for the next three years
shows that this business carry all the features of being sustainable in the market for a prolonged
time.
CONCLUSION
It can be concluded from the above report that business planning can is a crucial element.
It is very important for a business to properly develop a plan so that all the activities are given
due time and consideration. To receive funding from a backer it is essential to develop an ideal
report which can ensure investor that this business carries a potential to secure large profits. It is
essential to take into consideration legal factors along with analysis of market conditions to
capitalise it in an ideal manner. Development of plan will results in carrying out activities at an
ideal manner.
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REFERENCES
Books and Journal
Atherton, A., 2012. Cases of start-up financing: An analysis of new venture capitalisation
structures and patterns. International Journal of Entrepreneurial Behavior & Research.
18(1), pp.28-47.
Chwolka, A. and Raith, M. G., 2012. The value of business planning before start-up—A
decision-theoretical perspective. Journal of Business Venturing. 27(3), pp.385-399.
Ciabuschi, F., Perna, A. and Snehota, I., 2012. Assembling resources when forming a new
business. Journal of Business Research. 65(2), pp.220-229.
Hiatt, S. R. and Sine, W. D., 2014. Clear and present danger: Planning and new venture survival
amid political and civil violence. Strategic Management Journal. 35(5), pp.773-785.
Hormiga, E., Batista‐Canino, R.M. and Sánchez‐Medina, A., 2011. The Impact of Relational
Capital on the Success of New Business Start‐Ups. Journal of Small Business
Management. 49(4), pp.617-638.
Johnston, R. E. and Bate, J. D., 2013. The power of strategy innovation: a new way of linking
creativity and strategic planning to discover great business opportunities. AMACOM
Div American Mgmt Assn.
Killing, P., 2012. Strategies for joint venture success (RLE international business) (Vol. 22).
Routledge.
Klotz, A. C. and et al., 2014. New venture teams: A review of the literature and roadmap for
future research. Journal of Management. 40(1), pp.226-255.
Michelini, L. and Fiorentino, D., 2012. New business models for creating shared value. Social
Responsibility Journal. 8(4), pp.561-577.
Parker, S.C. and Van Praag, C.M., 2012. The entrepreneur's mode of entry: Business takeover or
new venture start?. Journal of Business Venturing. 27(1), pp.31-46.
Savitch, H. V., 2014. Post-industrial cities: Politics and planning in New York, Paris, and
London. Princeton University Press.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4), pp.1019-1042.
Online
Missed Your Sales Targets? What to Do Now. 2017. [Online] Available through:
<https://www.inc.com/ron-gibori/the-5-books-every-entrepreneur-should-read.html>.
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