Donut Worry: Entrepreneurship Development Report and Analysis

This report presents a comprehensive business plan for 'Donut Worry,' a proposed doughnut shop in London, UK, focusing on healthy, gluten-free, and sugar-free options. The report begins with an introduction to entrepreneurship development and the rationale behind the business idea, targeting health-conscious consumers and specific demographics like the Romanian and East European communities. The analysis includes a SWOT analysis to evaluate strengths, weaknesses, opportunities, and threats, followed by PESTLE and Five Forces analyses to assess the macro and micro environmental factors influencing the venture. Market research findings support the feasibility of the idea, highlighting the demand for healthy food alternatives. The report outlines the value proposition, business canvas model, and details on idea development, finance, growth strategy, HRM, and marketing. Risk analysis is also conducted, and the report concludes with a summary of the key findings and recommendations for the venture.

ENTREPRENEURSHIP
DEVELOPMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
IDEA FORMATION.......................................................................................................................1
SWOT ANALYSIS................................................................................................................2
PESTLE ANALYSIS.............................................................................................................3
FIVE FORCES.......................................................................................................................5
MARKET RESEARCH.........................................................................................................6
VALUE PROPOSITION........................................................................................................6
BUSINESS CANVAS MODEL.............................................................................................7
IDEA DEVELOPMENT.................................................................................................................8
FINANCE...............................................................................................................................8
GROWTH STRATEGY.........................................................................................................9
HRM.......................................................................................................................................9
MARKETING......................................................................................................................10
RISK ANALYSIS................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Entrepreneurship development can be referred to as the procedure comprising of
identification of an idea, practising the ways to develop it and converting it into a venture
(Toms, Wilson and Wright, 2019). The main role in this process is of an entrepreneur, who is a
person that intends to take risks with a view to develop a venture which can solve the problems
faced by society.
The entrepreneurial idea that has been selected by the group after the market evaluation
of United Kingdom is the launch of a doughnut shop. This shop will be launched under the
name of Donut Worry. The venture would offer healthy and freshly baked doughnuts which are
gluten free, sugar free and made up of organic ingredients. They offerings of the enterprise
would come in three variants: Romanian (Papanashi), Greek (Loukoumades) and American
recipes. The products would be low in terms of calories and gluten free, which would be
beneficial for the people who suffer from diabetes and wheat flour intolerance. Donut Worry is
an appealing name which will be successful in gaining the attention of a large number of
consumers that the entity would be intending to target. This entrepreneurial venture would be
offering a healthy alternative to the present doughnuts industry which is full of sugar and gluten
full items. The venture would be mainly targeting some groups such as East Europeans,
Romanian community, students and adults, which means, people who intend to try something
unique and are attuned to the health and wellness trends. The products offered by Donut Worry
would thus be totally suitable for people who suffer from diabetes and flour intolerance.
My role in the assignment is of Finance Director who would be responsible for
stipulation of budget and ensuring that the expenses do not exceed the limit mentioned within
the budget. Present report consists of problem identification, determination of solution, idea
formation and idea development.
IDEA FORMATION
The entrepreneurial idea of launching a doughnut shop which offers healthy, sugar free
and gluten free items, has been identified after extensive analysis and evaluation of consumer
trends of UK. The location for the shop has been selected to be London EC1 R. The research
done upon London reflected that the prices of products offered by businesses located within the
area chosen are quite high. This means that the offerings rendered by companies within this
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area are not economical to be afforded by lower or middle class sections of society. Specifically
the unemployed section of society is not able to afford the prices at which goods are offered in
this area. Thus, the idea of launching a healthy doughnut shop within this vicinity has been
selected. The pricing of products have been proposed to be intentionally kept relatively lower
than rival firms present within the selected area, in order to appeal to a larger segment of
population of United Kingdom.
However, it is essential that the business idea selected by the entrepreneur is tested
before it is actually executed within the market place. This testing is being done by performing
micro and macro environmental analysis of the idea. For this, a number of models would be
used by the organisation which would help the group to carry out a feasibility analysis of the
idea.
SWOT ANALYSIS
Particulars Explanation
Strengths The biggest strength of Donut Worry will lie in the healthy and fresh
doughnuts and other related products offered by the shop taking into
consideration the healthy lifestyle of people within United Kingdom. Further,
this entity would offer gluten free and sugar free products which cater to the
health conscious needs and wants of people. This will render the entity with
the opportunity to gain the attention of large number of people inclusive of
those who are too pre-cautious of their diet and food intake. The entity can
convert its strength into its USP in the future course of time to attain huge
brand loyalty (Ribeiro-Soriano, McDowell and Kraus, 2019). In the starting
phase of the venture, the entity would focus upon making sale at moderate
prices to attract a larger base of audience.
Weaknesses The only weakness of Donut Worry could be the prevalence of extensive
competition within the doughnut sector. There is a high probability that the
existing market players could solicit the customers of this entrepreneurial
venture by making use of their established brand image and high brand name.
To counter this, the entity would be needed to get engaged in extensive
marketing of its gluten free and sugar free items.
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Opportunities A number of opportunities would be available for the venture post its setup
within market place. By continually focussing upon the quality and price of
doughnuts and other food & beverage items, the venture would be able to
enhance its market standing and loyal customer base. To attain a better
customer response, Donut Worry would carry out continuous market
examination with the help of which it would be able to identify effective
marketplace opportunities that can provide the venture with a scope to inflate
its revenues. The enterprise would further possess the capability to inflate its
pricing in the secondary stage of its development (Fischer and Nijkamp,
2019).
Threats The competitors present within the doughnut sector, such as Crosstown, Dum
Dum Donutterie And Doughnut Time would pose significant threat to the
sustainability of Donut Worry.
PESTLE ANALYSIS
Variable Construct
Political  Democratic and stable political conditions of United Kingdom support
the growth of entrepreneurial venture.
 The local, national and European Government support the development
of entrepreneurial ventures by offerings them a number of grants such
as Apprenticeship Grant, Gigabit Broadband Voucher Scheme, Seed
Enterprise Investment Scheme (SEIS), EUREKA Eurostars, R&D Tax
Credits etc. (List of small business grants in the UK, 2019).
 An incident of terrorism or international war between countries would
negatively impact upon the venture.
Economical  The price sensitive nature of UK consumers would become an
opportunity for the new venture.
 BREXIT pose significant threat to the demand level of goods and
services in UK.
 The high consumer disposable income of residents of United Kingdom
would benefit the venture to inflate its revenues as well as profits
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(Higgins and et. al., 2019).
Social  The number of people affected by Diabetes within the confines of UK
as per the reports of 2019 are 4.7 million (Number of people with
diabetes reaches 4.7 million, 2019).
 One third population living within United Kingdom is affected by
Obese (Obesity: Disease or just plain greed? The number of obese
Britons has doubled in 25 years, 2019).
 The consumer lifestyle of people of this nation is highly health
conscious owing to the statistics of obese and diabetes stricken
segment.
 The trend of buying products over the internet may pose threat to the
demand of offerings of the upcoming brick and mortar style store.
Technologic
al
 The online shopping trend is on a huge rise nowadays shifting the
preference of people from brick and mortar style stores to e-commerce
trends (Jones and et. al., 2019).
 The constantly emerging and rising trend of e-commerce would pose
threat to the sustainability of Donut Worry as it would be operating in
the physical format in its initial 5 years.
Legal  Legal regulations and litigations such as health and safety, employment
laws, security etc. need to be adhered by the entrepreneurial ventures in
order to ensure their long term sustainability within the confines of
market place.
 Being a company which would operate within the confines of food &
beverage sector, it is essential that the guidelines of the particular
industry are strictly adhered to, in order to ensure long term
sustainability in market place.
Environme
ntal
 The inflating pressure upon the companies to make use of renewable
resources while carrying out the manufacturing process leads to
increase in the overall cost of production.
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 Investment within Corporate Social Responsibility activities would
provide the venture with a scope to inflate its market standing, thus
gaining acceptance from governmental agencies as well as customers.
FIVE FORCES
Force Magnitude Description
Threat of New
Entrants
HIGH  Low barriers to entry
 Less capital investment
 Requirement of low resources
Threat of
Substitutes
MODERAT
E
 Presence of many companies which deal in same
product line (Pearce and et. al., 2019)
 However, sugar free and gluten free products are not
yet offered by any of the rival firms. Thus, it would
reduce the threat of substitutes for Donut Worry.
Competitive
Rivalry
HIGH -
MODERAT
E
 Presence of key market players like Crosstown, Dum
Dum Donutterie and Doughnut Time.
 No entity offering gluten free and sugar free
doughnuts, giving an edge to Donut Worry.
Bargaining
Power of
Buyers
LOW  The offerings of the upcoming venture are unique in
terms of the health conscious initiative undertaken
by the firm, thus it would be able to take high prices
from customers.
Bargaining
Power of
Suppliers
HIGH -
MODERAT
E
 Delaco and Biogama will supply the gluten free,
substitute for sugar, sour cream and the jams. Real
Food and Naturally Good Food are local suppliers
and will deliver to us the baking powder, eggs, etc.
Vistaprint will create our flyers, banners, branded
sticker for the minivan. ICRtouch will provide the
touch screen epos cashless menus.
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 Owing to the suppliers of the entity being fixed due
to the uniqueness of Donut Worry’s offerings and
features, it would not be easy for the entity to replace
any of the suppliers with any other vendor in market
place.
MARKET RESEARCH
Through the execution of market research, it was ascertained that the business idea of
launching a doughnut shop which offers sugar free and gluten free products is feasible to be
launched into market place. This is because a large segment of population within the confines
of United Kingdom, especially London, is affected by diabetes and obese which are serious
diseases that need to be given due consideration (Apostolopoulos and et. al., 2018). In this
regard, the whole concept of Donut Worry seems to be aligned with the lifestyle followed by
people of the nation.
VALUE PROPOSITION
Problem
As per the research carried out upon the market of UK, it has been analysed that there is
a large segment of population which is affected by diabetes and obese (Porfírio, Mendes and
Felício, 2018). Keeping into consideration their likelihood towards products such as doughnuts
and other bakery items, there is a need for companies to bring up sugar free items.
Target Market
The target market for the upcoming venture of doughnut is the health conscious
segment of population together with the segment that is stricken by obese and diabetes.
Solution
The solution that has been proposed by Donut Worry for the problem identified above
is the provision of gluten free and sugar free products in market place. This will help the diet
conscious population to combat with their craving for products like doughnuts while ensuring
that they do not intake much sugar or fats.
BUSINESS CANVAS MODEL
Key partners Key activities Value proposition
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 Local entities
 Coffee producers
 Sales persons
 Provision of doughnuts
and other food &
beverages
 Promotional activities
 Dedicated and fresh
cooking
 Customised products as
per the needs and wants
of customers
 Easily accessible and
high quality customer
services
 Healthy and fresh food
and beverages
 Variety of options and
tastes to choose from
Customer relationship
 High quality
customer services
 Innovative and
unique flavours
 EPOS cashless menu
 Healthy and freshly
prepared food and
beverages
 Gluten free and
sugar free items Quick service
Key resources
 Human resources
 Patent
 Transportation
 Sales personnel
 Advertisement firms
Revenue stream
 85% of total income-
generated from
doughnuts sales.
 15% - generated from
beverage sales (coffees
and drinks)
Distribution channel
 Through website of
company
 Social media
 Flyers and banners
 Mini vans for
advertisements with
brand stickers
 Email
Cost structure
 Initial investment would
be around £300,000.
Customer segment
 Health conscious
customer segment
 People stricken by
diabetes and obese
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 Word of mouth
IDEA DEVELOPMENT
FINANCE
Initial Investment
The initial investment within the entrepreneurial venture of doughnuts would be of
£300,000.
Source of Investment
The money would be invested by the entrepreneur and sourced by way of bank loan in
the ratio of 2:1, i.e.; £200,000 by the entrepreneur and £100,000 by bank loan.
Revenue / Sales
85% of total income will be generated from doughnuts sales. The rest of 15% will be
generated from beverage sales (coffees and drinks).
Financial Breakdown
The financial breakdown of setup expenses of the new venture (Donut Worry) is
presented as follows:-
Particulars Amount (£)
Legal Expenses 10000
Office Supplies 10000
Rent (12) 36000
Design 65000
Display Cabinets (3) 25000
Ovens (3) 6000
Cookware (1) 7000
Mixer (3) 9000
Marketing 10000
Van 12000
Inventory 15000
Furniture 25000
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Kiosk Tablets (10) 20000
Cash Required 50000
TOTAL 300000
GROWTH STRATEGY
Mission
“To provide healthy and fresh prepared products to customer to gain contentment
from them”
Vision
“To offer healthy products to become the first choice of people for doughnuts across
the globe”
HRM
Number of People
There would be a total of 7 persons in the upcoming venture named Donut Worry. All
of them would be employed on a permanent basis.
Role
The composition of staff within Donut Worry would be as follows:-
CEO – 1
Marketing officer – 1
Finance director – 1
Permanent employees – 3
Accountant - 1
Structure
The legal structure of Donut Worry would be a sole proprietorship firm which would be
working in partnership with a number of local entities, sales persons and coffee manufactures
to enhance its reach in market place.
Company Ownership
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