Starting a Business and Fundamentals of Marketing

This presentation discusses the various aspects of starting a business and fundamentals of marketing using the case study of Beans & Paws. It covers market segmentation, marketing mix, financial plan, PESTEL analysis, SWOT analysis, operational and legal requirements, and staffing requirements.

Financial Plan
New business needs finance for several purposes like renting premises, decorating place, purchasing equipment, paying staff, buying ingredients, insurance and electricity or
other bills. The entrepreneurs of Beans & Paws have various options to generate funds to start their business. One of the options is that entrepreneurs invests own savings to
transform their plan into action. In this option, entrepreneurs are not liable to anyone or any institutions and are also not in compulsion to gain maximum profits. Next option is
take start up loans provided by government to small-scale businesses. The interest rate and repayment time of these type of loans is generally low. Another option is to look out for
investors who will be interested in business idea so they will invest funds in the business and in return will take a small equity in business. Entrepreneurs of Beans & Paws will
make their business prospect as well as financial plans and present it to potential investors to generate funds for business.
Profit and loss statement
Cash flow statement
Industry Analysis
Understanding an industry wherein an organisation operates provides essential framework to analyse individual company which is company analysis. In context to Beans & Paws,
industry analysis is possible through Porter’s Five Force Analysis which is a framework opted for analysis of industrial attractiveness and competitive advantage. All the forces for
Beans & Paws are as follows:
Competitive Rivalry: In Coffee shop industry, there are giants offering varied products and services. Some of establishments, for instance, Pret A Manger, Starbucks, Caffe Nero
and many more creates high competitive rivalry for Beans & Paws.
Bargaining power of suppliers: In Coffee shop industry, Beans & Paws faces low bargaining power of suppliers because of large overall supply and high variety of suppliers. The
company has contractual relationship with varied suppliers and when one of them initiates to change prices or quality of offering, it can switch to other one,
Threat of substitutes: Within Coffee Shop Industry, factors that makes high threat of substitution for Beans & Paws are low switching costs, high affordability of substitute
offerings and high substitute availability. The high availability of substitutes makes it easy for consumers to buy these substitutes instead of Beans & Paws.
Threat of new entrant: In Coffee shop industry, Beans & Paws faces moderate threat of new entrant as entering into the industry involves moderate cost of doing business, high
brand development cost and moderate supply chain cost.
Bargaining power of buyers: Within Coffee shop industry, factors which contribute in high bargaining power of buyers for Beans & Paws comprises of small size of individual
purchaser and low switching costs.
Starting a Business and
Fundamentals of Marketing
Market Segmentation
Business establishments which understand market segments are able to prove themselves for effective marketers although earn greater investment returns. In relevance to Beans & Paws,
kinds of market segmentation that can be opted by the venture are as discussed:
Demographic segmentation: Using demographic segmentation, managers of Beans & Paws can target potential customers according to ethnicity, education level, income and profession
in a company. The segment is not related to business reaching customers in more effective manner, rather, it is about those customers seeing messaging which is relevant to them.
Psychographic segmentation: With psychographic segmentation, managers of Beans & Paws can segment the entire market on the basis of social status, opinions, personality, attitudes
and practices. Business concerns uses psychographic segmentation for understanding what consumers really want, opportunities for future engagement and gaps or paint points in
existing offerings.
Marketing Mix
It is fundamental model for a company which help brand in understand which element needs to be combined for meeting objectives and goals related to marketing. In case with Beans &
Paws, identification along with arrangement of elements of marketing mix permits in making profitable marketing decisions. The marketing mix elements for Beans & Paws are stated
below:
Product: Key product to be offered by Beans & Paws include roasted brewed coffee with some choices of food to customers. It also offers shelter home for abandoned dogs and cats.
Price: Within Beans & Paws, Dynamic Pricing Strategy could be used as it is flexible pricing strategy in which prices fluctuate on the basis of market as well as customer demand. The
strategy can assist the company to keep marketing plans on track.
Place: The element determines the venues at which customers can access organisational offering. Beans & Paws can offer most of its offerings at small café or coffeehouse.
Promotion: Key promotional techniques that can be opted by Beans & Paws are public relations, advertising, sales promotion, word of mouth marketing, direct marketing and social
media marketing. With this, the company aims to build reputation of company despite of just enhancing sales volume.
PESTEL Analysis
PESTEL analysis is a framework that examining various external factors affecting operations of a business. Study of this tool is beneficial for both existing and new businesses. PESTEL
analysis in context of new business plan Beans & Paws is explained underneath:
Political- Factors associated with government policies and regulations that can impact operations of business are political factors. UK has stable political landscape which provides
various grants and subsidies to new businesses. For Beans & Paws, entrepreneurs can take advantage of low rates interest loans and support of government to commence their business.
Economic- Growth, interest, exchange, inflation and unemployment rates of an economy plays significant role in success of any business. In UK, inflation and unemployment rates is
relatively low, thus enhance position of nation economically. Beans & Paws entrepreneurs can benefit from spending habits of consumer and create more business opportunities for
future.
Social- Health consciousness, age distribution, standard of living of people and their preferences are some of the social factors that influence sales of businesses. In UK, people are really
conscious about their health as well as they love pets so they look out for options that allows their pets in premises. Beans & Paws entrepreneurs can benefit from this factor by providing
quality food without compromising hygiene and by creating safe atmosphere for customer’s pets.
Technological- Innovations, technologies and techniques used in a country are some essential technological elements that impacts business operations. In UK, technologies are very
advance that save time as well as resources of businesses and completes job effectively. Beans & Paws entrepreneurs can give appropriate time in R&D activities to use advance
equipment in their kitchen in order to produce best quality coffee in minimum time possible.
Environmental- Businesses are also greatly impacted by weather conditions, climate change, pollution level etc. In UK, weather is mostly favourable to its people and pollution level is
also very low. Beans & Paws entrepreneurs can look out for sustainable resources for their business and can use paper cutlery to establish business as environmental friendly.
Legal- Industry regulations, licensing, trade practises are legal factors that impacts business working directly. UK have certain laws and policies related to food as well as sales practises
that every food industry business must need to abide by. Entrepreneurs of Beans & Paws will procure food license and will follow all laws made by government to legally conduct its
business.
SWOT Analysis
SWOT analysis is a strategic tool to evaluate organisation internal elements that are both strengths and weaknesses of business. SWOT
analysis in context of Beans & Paws entrepreneurs is discussed below:
As per the above information it has been concluded that business plan is an important document made by entrepreneurs to clearly state their purpose, mission and objective of
commencing a new business. It involves doing extensive market research for the product offered and arrange finance needed to start or continue business operations
References:
Bougie, R. and Sekaran, U., 2019. Research methods for business: A skill building approach. John Wiley & Sons.
Fehrer, J. A., Woratschek, H. and Brodie, R.J., 2018. A systemic logic for platform business models. Journal of Service Management.
Randhawa, K., Wilden, R. and Gudergan, S., 2018. Open service innovation: the role of intermediary capabilities. Journal of Product Innovation Management. 35(5). pp.808-838.
Business plan is an idea of commencing new business by defining what the owners wants to achieve, their mission, vision and ways to achieve
those specified goals. Start-ups utilizes business plans in order to attract investors to finance their company and also to promote their business idea.
An enhanced business plan is a crucial tool for entrepreneurs as helps them to focus on important steps which will lead to success of business. For
this report, selected business idea is a coffee cafe named Beans & Paws which will serve freshly roasted brewed coffee with some choices of food to
customers who are looking for new places to hangout and eat. The cafe will also work as a shelter home for abandoned dogs and cats.
Business Idea
The idea of coffee business arises in the mind of entrepreneur when they are looking for cafes to have a fresh cup of coffee where pets are also
allowed but found only few places that are also very overpriced. The entrepreneurs then came up with a business plan to rent a small place and
provide quick services of coffee as well as some food and design its interior in a way that is pet friendly. Various projections for new business plan
Beans & Paws are explained below:
Purpose and Vision
Purpose of Beans & Paws entrepreneurs is combine two of their favourite things which are coffee and pets. Thus they plan to start a small coffee
cafe to provide their customers with freshly roasted coffee at relatively economic prices from their competitors. The cafe will also provide pets food
so the customers won’t have to leave their pets alone at home.
The short term vision of entrepreneurs of Beans & Paws is to earn maximum market attention by promoting their business and its idea as well as to
create personal relationships with customers. The long term vision of business is to earn maximum profit by offering quality services so
entrepreneurs can open more such cafes at various places.
Objectives
The objectives of Beans & Paws business is to provide a safe environment to abandoned pets and to create an environment where both people as
well as pets can enjoy and relax. They will achieve these objectives by generating productive and quality services so the brand image of their
business will improve. Entrepreneurs of Beans & Paws have done a detailed market research to make plans as well as strategies to achieve business
goals effectively without wasting resources and time. Business's aim is to serve quick as well as best quality services to its customers in a friendly
and relaxed environment.
Operational Requirements
A new business plan requires various things in order to transform the idea into action. The first and most important operational requirement for
Beans & Paws is to find a good place at most visited locations. By fulfilling this need, the business will be able to pull in more number of people in
the brand. After deciding location, it is important to design its interior in a way that attracts customer’s attention. Interior also includes sourcing
furniture and other equipment to develop a trendy and relaxed cafe environment. Next operational requirement is to look out for best suppliers to
source best raw materials in order to increase the efficiency of products offered. Operational needs also include providing variety of options in menu
and create a loyalty programs for customers who will visit frequently.
Legal Requirements
Entrepreneurs of Beans & Paws have to fulfil several legal requirements before commencing their business. They have to register their business and
its idea with local authority. After that entrepreneur need to register with HM revenue and customs to conduct legal business activities. In order to
sell food and beverages, the business needs to generate license of food hygiene from responsible organisation. Entrepreneurs of Beans & Paws also
needs to get electrical safety certificates to ensure that cafes' environment is safe and secured for customers as well as for their pets.
Staffing requirements
As the entrepreneurs of Beans & Paws are opening the place on a small scale they will need maximum
five to ten employees to successfully conduct business activities. People who knows how to make different types of coffees and also have best
cooking skills is the major requirement for this business as coffee and food will play a major role to retain customers in the business. Next
requirement is of people with great communication skills who can engage with customers while serving food to them. The business will also require
staff for cleaning, security and maintenance of the cafe. One another staff requirement will be of someone who can take care and feed the pets which
the cafe will shelter.
Strengths Weaknesses
 The quality of coffee at Beans & Paws will be the best.
 The menu of Beans & Paws will have variety of options of food and
beverages with economical prices.
 Large number of competitors in coffee shop industry.
 Low profit margin.
 Switching cost of customers is low.
Opportunities Threats
 Entrepreneurs of Beans & Paws can increase brand image by maintaining
quality.
 Entrepreneurs can make personal relationship with customers and their pets
to retain them.
 Business is new, so the threat that it might not succeed is the biggest
risk to entrepreneurs.
 If suppliers increase their cost, it will impact cost of production of
Beans & Paws negatively.