Entrepreneurship Project: Bakery Business and Venture Capital

This project delves into the crucial role of venture capital and various financial strategies for a bakery startup. It begins by highlighting the need for venture capital in supporting the growth of new businesses, examining different types of business financing such as loans and factoring. The project evaluates the advantages and disadvantages of venture capital, including the potential for dilution of control and the risk of failure, while also acknowledging the benefits of expert advice and industry connections. It also addresses salient issues like the potential for interference and the pressure to list quickly. The project then critically assesses a statement about venture capital, emphasizing the importance of evaluating both merits and demerits before seeking VC funding. It also considers external environmental factors, such as competitors, suppliers, and regulations, that impact the bakery's strategic decisions. Finally, it concludes by summarizing the critical aspects of venture capital, emphasizing the need for careful analysis and strategic planning to ensure the bakery's success.

ENTREPRENEURSHIP

TABLE OF CONTENTS
PROJECT QUESTION 1.................................................................................................................1
Need for Venture for start-up enterprises....................................................................................1
Types of Business Finances........................................................................................................1
Evaluation of Venture Capitals...................................................................................................3
Salient Issues with Venture Capitals...........................................................................................3
Critical Evaluation of the statement given .................................................................................3
CONCLUSION ...............................................................................................................................5
PROJECT QUESTION 2................................................................................................................5
Executive Summary....................................................................................................................5
Case Study...................................................................................................................................5
Business Opportunities research and analysis ................................................................................1
Marketing strategies.........................................................................................................................1
Business Operations ...................................................................................................................2
Technologies...............................................................................................................................3
HR Strategy.................................................................................................................................3
Financial Considerations.............................................................................................................4
REFERENCES................................................................................................................................5

PROJECT QUESTION 1
INTRODUCTION
For any small enterprise business or start up to start and expand its business, venture
capitals can finance them and help them in enlarging their business (Oosterbeek,Van Praag and
Ijsselstein, 2010). These are the firms that provides support to the new emerging businesses so
that they can be able to grow in the market. The report is about operating the business of a
bakery which can take funds from various means as by loans or venture capitals. It will help the
business to expand in the market.
Need for Venture for start-up enterprises
A Venture capital can be considered as a privately-owned equity which helps in
providing the small emerging firms, a sort of finance so that they can be able to achieve the
growth at a faster rate. The person dealing with the process is known as a venture capitalist.
Actually, it acts as an investor who helps these small firms by providing them the stock them
require to enlarge their business. It provides support to those companies which does not have any
access to the equities but they want to expand their business. Almost more than half of the start-
ups need venture capitals for the better performance of their business.
The funding is done either by means of venture capital funds or by angel investors. These
angel investors are having their own high net worth and they are even capable of investing in
larger firms also. Venture capital funds generally provide funds to those companies who are
capable of giving them the money back if their business fails (Ha,Kim and Choi, 2014). They
decide the actual potential of the business by their business plan. These capitals behave very
patient till the investor has grown its business well. The report includes an idea of starting a new
bakery business for which venture capitals can be helpful. It can help the business in expanding
and achieving the success at a faster rate. Venture capitals helps the company to grow. It can be
provided a huge support to the bakery business as well.
Types of Business Finances
There are various types of business finances available which the bakery start-up can
request for expanding it and seeking for a faster growth. It can take help from these types of
finances when they will start and in their initial phase of the entrepreneurial venture. It can get
the financing by the various ways but an important is that by which way it can expand the
business in a faster time. Various type of business finance are discussed below:
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Loans
Loans can be taken by a start-up company for several reasons. The focus of the bakery
will be to maintain the finance for their business operations like as for opening a new shop,
producing fresh products and many more. So, it wants to manage the financing for all the
investment in their new products and the shop, also it will employee some workers also which
can help them in faster deliveries of the products to the customers. A very big advantage of
taking these business loans is that if the business may sometime have to face some tough times, it
can use it to enlarge their working capitals that time. It can provide a huge support to the
company. The bakery can also adopt some strategies (Oosterbeek,Van Praag and Ijsselstein,
2010). Like after they will start the business, if they will be having sufficient money to expand
their business but they can still take a loan so that they can maintain their operating cash flow. It
can help them in covering all the unpredicted and unexpected expenses. This can help the
business going in a smoother run. After that, they can re pay the loan amount by the new income
they have gained by expanding the business.
Factoring
This is another process which can help these small enterprises in enlarging their business.
Small companies or new start ups that do not have access to the credits, can opt for factoring as
well. The process happens when any small enterprise sells its accounts, either some of them or
all to a financial service provider, it is considered as a factor. For each percent of the value of
their invoice or account, these factors provide cash to them. They first collect the specific
payment from the customer, then decreases a fee from it and finally before returning the amount,
charges an aggregate of interest over that sum. The bakery business can also adopt this concept
but venture capitals and loans seems a better idea than this. Otherwise, it also acts as an equal
important method which helps in enlarging the work.
Use of Venture Capitals
These are privately owned equities which provide support to the small firms in
expanding their business. The bakery can take help from these venture capitalists for enlarging
their business. These capitals helped the start-up in first developing a capability in them to
achieve the success at a faster rate and then with the support, the bakery can also achieve it.
These capitals provide the investors, a form of funding at their early stages. There are various
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sources of these venture capitals and the bakery can take help from any of the sources which can
help it in increasing rate of profits. These ventures can help the business a lot in reaching at a
higher level and that too in a shorter time period. The persons dealing the whole process with the
investors and all the other bodies are venture capitalists.
Evaluation of Venture Capitals
Venture Capitals have various advantages which can help a small enterprise in enlarging
their business and achieving their goals. The factor has deals with disadvantages too for example,
if a new business has to be started as of a new bakery, it is impossible for it to start without the
funds. An analysis must be done to check whether these capitals can help the business of the
bakery in expanding or not. The biggest advantage venture capitals can provide the bakery as in
providing them the required funds. It is so because any new emerging business face some sort of
difficulty in funds (Ha,Kim and Choi, 2014). But, it can be critically evaluated that it leads to
dilution of control as these take their stakes in the business and because of which, interferes more
than they should. In contrast to that, it can be proved very beneficial also because if the bakery
turns to be successful, then the stake produces the returns ranging from at least 50-500% per
annum. This is the actual reason that the capitalists have faith in these investors and their
business so that after their success, they can also achieve an equal amount of profit. However, it
can be critically analysed that where these capitalists are involved, majority of the start-ups fail
and specific fraction of it becomes a successful one.
Salient Issues with Venture Capitals
Although it provides help and support to the firms that are emerging in the market and
require funds for the expansion, it also results in dilution of the control as they share a stake of
them in the bakery, because of which they can interfere more than they should. It sometimes can
irritate the owner also due to its unwanted attention. Many times, these capitals make the start-up
fail, only a small fraction of start-ups become successful. The persons who are involved in the
whole process are called venture capitalists. These capitalists can also make it a hurry in the
bakery for listing as they focus on offloading their stakes as soon as they can. This feature can
also affect quite badly on the bakery business (Drucker, 2014).
Critical Evaluation of the statement given
The bakery if wants to do the business with the help of venture capitalists, first have to
analyse the merits as well as demerits. This can help the business in evaluating well what are the
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factors that can prove beneficial for it and what are the factors that the bakery should keep in
mind that can affect badly the business also. VC's cal provide the support to the bakery which it
wants to expand its business well. But, it can be critically evaluated that a VC investment does
not guarantees the success. One can take the risk but there is no guarantee. Also, the process is
quite complex and complicated as well. In contrast to it, these capitals also get the benefit of
getting proper advice from the experts of their team as they are enough experienced and are in
the market for a long time. But, statistically,the business of bakery can fall also. The bakery
should keep the factor in mind before dealing with these capitalists (Drucker, 2014). In contrast
to it, there are various areas where the VC firm can give active support like in case of legal,
personal matters etc.
It ensures greater success and a faster growth. However, it can be critically evaluated that
if the size of the stake of the firm is more than half of it, the baker owner can lost its control over
the management. More stakes to them means more control over them. In contrast to that, these
capitalists also have a power that they have various connections with the whole community of
the business. Working with them can provide them tremendous benefits. However, it can be
evaluated that these VC's always make hurry in the listing procedure whenever they want to
offload their stakes and they make it as soon as possible. It can affect the bakery quite bad as it
can lead to lower valuation. This is so because when the listing is not being done properly at the
particular time in the bakery, it can lead to undervaluation of it providing various losses to the
bakery itself.
While considering the vision and mission for the bakery business, it is important to assess
the environmental issues as well. The external environment can be competitors, suppliers and it
may be the rules and regulations that has a huge influence on the strategic decisions of the
bakery. The bakery first have to evaluate any new trends or impacts that can help the business in
growing. These factors may have a positive as well as a negative effect. It should be considered
that while operating the bakery business such as at the time of opening a new shop, employing
workers, delivering the products to the customers, there are many risks also associated with it.
The changes that affect the business either in a good way or bad, may be political, global, social,
technological and environmental.
There may be some changes in the rules and regulations of the government that has a
direct impact on the bakery (Zhirong and Yinglu, 2012). May be the tax charges are increased or
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decreased. It can affect the bakery, either it can prove beneficial for it or a symbol of loss. It can
be affected socially also as if people are more interested in products that are not available in the
bakery, it is obvious that they may shift to the other shop. It can minimize the popularity of the
bakery as well. So, the bakery should have to keep these factors in mind while operating so that
it can be able to satisfy the customers. It will further increase the profitability of the bakery itself.
CONCLUSION
It can be concluded from the report that any small business or enterprise must requires
some sort of help and support because in their starting period, they are not capable of investing a
large amount of funds over the business. So, loans, venture capitals or factors can help them in
that so that they can be able to grow in the market soon and reach their targets. This directly or
indirectly provides various benefits to them also.
PROJECT QUESTION 2
Executive Summary
The present report is on a new start-up business of a bakery. It can act as a retailer
business or a wholesaler as well. Generally, flour based goods are being produced in bakery.
Although, this bakery has some other plans too. The bakery will include a small cafe inside it for
tea and snacks purposes. Also, it will be available 18 hours for the customers. The business of
bakery can also include various modern technological features that can attract the customers
more. The HR department will help in selection and recruitment of the staff. The business can
take financial help from various means as of by means of loans or by the venture capitalists.
Case Study
Business Idea
The business idea here is of a bakery shop. It can also be considered as a retail business.
In that case, it can be able to provide the goods to the customers. It can also be considered as a
wholesaler, where it can deal with the selling of baked products to the food retailers or stores.
The establishment of the bakery is a general and straightforward process where the bakers want
to serve the customers fresh baked products to increase the size of their potential markets. The
whole process goes like this (Oosterbeek,Van Praag and Ijsselstein, 2010). First it is important to
decide what type of bakery one wants to open. Then its business plan will be prepared. Finding
the proper space for opening the bakery is a tough decision. After that also, pricing of the
products is to be done. In a bakery business, it is a great idea to define a family and friends
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policy. This focus can lead the bakery to achieve a huge number of customers and thus, higher
profit levels too. After all this procedure, marketing the products and baked goods is the last step.
Products
As a baker's shop mainly produces the flour based stuff. Many products that can be
involved in the bakery can be bread, cakes, pastries, cookies and much more stuff like this. The
shop will also be including a small cafe that will serve tea, coffee and snacks to the customers
whosoever want to consume on the premises itself (Schaper and et.al, 2014). The bakery shop
will be a small enterprise so it will include only baked products and snacks. The shop will deal
with different types of cakes as crème cakes, chocolate cakes, plum cakes and many more that
makes it quite attractive to the customers.
Service
The bakery will be open for 18 hours a day, in order to satisfy those customers as well
who want to hang out at evening hours. It will also provides services for all 18 hours and will be
very beneficial for those who feel hungry at night. It will act as a mid night hub for some who are
in a habit of eating and feeling hungry at that time. This feature of the bakery seems so attractive
for the customers as whenever they want to eat, the bakery is a place where they can come and
eat. Rather than serving on the shop itself, the bakery will also deal with home delivery. This will
help it to satisfies those customers also who want to eat stuff from the shop but are unable to
come due to any reasons. The bakery will provide a home delivery service for those. Either the
mid night customers or the regular ones are satisfied with the bakery very much. If some one
wants to eat there only, it will guarantee 15 minute service to them with the fresh baked stuff
which delights the customers (Ha,Kim and Choi, 2014).
Customers and USP
The USP (Unique Selling Proposition) of bakery is the services it will provide to its
customers. Like the service of home delivery, serving 18 hours per day and delivering fresh
baked goods will be the USP of the bakery that makes it different from other bakers or
competitors. The bakery will be for every age group. Whether it may be children, teens or the
aged ones, it serves all the customers equally. As the old aged people does not like much noisy
environment, a small area from the corner will be kept specially for the old aged ones. It is just
because to provide them comfort and piece so that they can enjoy their meal peacefully.
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Business Opportunities research and analysis
To establish a start-up for bakery various opportunities need to be analysed and research
to grow the efficiency of bakery products among the customers in markets.
Market researching
The market research is not an easy task. This research will help in determining whether
the idea to start off a bakery start up is powerful or not. One can collect information from
industry associations,web searchers,periodicals,federal and state agencies and so on. A few hours
of online surfing can be useful for understanding the requirement of markets. The main motive of
research is to find out details about the customers that the bakery shop will serve in future. The
plan of research can be made that should provide the goal of conducting the research and provide
necessary details whether to go ahead with the idea of start up or not. This research can be
helpful in finding out powerful market,the competitive size and to test the usefulness of the
product (Venkatesh, 2017.).
Analysis
This will be useful for analysing the market needs and desires. One can analyse the
targeted customers it want to focus on. The main objective of bakery start-up will be developing
bakery items that will enhance its sales and profit and keeping in mind customer preferences and
tastes. The analysis can be done to evaluate the size of competition in market. Thus by
examining this bakery start-up can produce more better products than the rivals. This analysis
will be help the start-up to develop innovative items that can be easily affordable by the targeted
customers (Larson, A., and et.al, 2017.).
Marketing strategies
These strategies are useful for improving the use of bakery products and items in the
market. The various strategies that can be used are as follows-:
Creating a content full marketing plan
The plan that will be made for the bakery shop need to be published a good content to
people who will see and appreciate it when it comes to marketing (Racz-Akacosi, 2017.).

Online advertisements
Once the bakery start-up is aware about the market,prospects,users,clients and partners
before launch one can develop efficient advertising program.
Facebook usage
Making use of Facebook is one of the efficient tool that can be used in marketing. This
will help in finding out the audience in more better way from various locations. This will help
the bakery start up to collect more more customers to visit the bakery shop (De Vries and et.al,
2017).
Blog strategy
It will increase the strategic positioning of the start-up,promote the product and
service,messages and benefits.
Crowdsourcing campaign
These are used for cost effective business development,market research,opinion
collection etc.
Business Operations
The bakery will include a number of departments as are discussed below :
Baking Department
All the baking process of the breads, cookies and all the goods that will be made from the
flour, all the processing takes place in this department. Proper cleanliness will be maintained in
the department. The bakery will not allow customers inside the department. Only the workers
will be permitted just to maintain the cleanliness of the products and the whole department. The
stuff that will not be sold by any reasons will be thrown away immediately to ensure the quality
of the other products (Drucker, 2014).
Accounting Department
The department will involve a confidential area where all the accounting and monitoring
will take place. No other member than the owner will be allowed in the department. Proper
monitoring of the bakery will be done from this department only.
Staff Management
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This department will be responsible for representing the staffing needs of the bakery.
Also it will deal in hiring the qualified persons to work in the bakery. It will be a source of help
to the bakery also and a sort of employment will also being provided to them. This will be
beneficial for both the parties.
Technologies
The bakery after operating, can make use of various technologies to attract the customers.
The bakery can include ovens and fryers. There are various types of ovens that can be used by
the bakery. It all depends on the type of baking. The business of bakery can involve double
convention ovens that helps in setting two different temperatures while baking. When in future,
the bakery expands into a larger one, then it can use rack ovens which rolls an entire rack of the
baked goods. Also, the bakery can include mixers, to make various batches of dough for baking.
Larger mixers can prove very beneficial for the bakery as it can hold more than 140 quarts for
larger production levels (Burns, 2010). Horizontal mixers can also be purchased and used by the
bakery. These mixers help in mixing up to 500 lbs of all the ingredients. These modern
technologies can help the bakery in a faster production and delivery of goods. This will further
help in increasing the overall productivity of the business of the bakery.
HR Strategy
For operating the business of the bakery, there will be need of staff like waiters, chefs,
accountants etc. which can help in running the bakery. The bakery will be requiring the persons
who can go for delivering the goods to the customer's home. This all will be done by the
recruitment strategy. In this, all the qualified persons will be selected first and then on the basis
of their skills, they will be recruited for the following. Like, the person who can cook better can
be assigned the post of the cook. Similarly, the skilled persons will be allotted the work
according to their capability. By this way, the bakery will get its whole staff. They all will work
together for providing satisfaction to the customers and what they want.
Financial Considerations
For starting the business of the bakery, it will be requiring proper finance for first
purchasing the land for shop, then buying the machinery and all the equipments and then the
marketing of their shop and products (Alqatawni, 2013). It will be needing a good amount of
finance. The bakery for achieving all this, can take help from various means. It can take loans or
help from venture capitals as they provide support and help to the emerging businesses to land in
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the market and to grow at a faster rate. They can take loans as well and after gaining profits from
the shop, they can repay the loan.
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REFERENCES
Books and Journals
Alqatawni, T., 2013. The relationship conflict between venture capital and entrepreneur.
Burns, P., 2010. Entrepreneurship and Small Business: Start-up. Growth and Maturity. Palgrave
Macmillan.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Ha, T., Kim, J. and Choi, Y., 2014. The Interplay of the Backgrounds of Venture Capitalists and
Venture Capitals’ Fund Size for their Propensities of Early-Stage Investments. In The 3rd
2014 International Workshop on Business, Aril (pp. 16-18).
Khajeheian, D., 2013. New venture creation in social media platform; towards a framework for
media entrepreneurship. In Handbook of social media management (pp. 125-142).
Springer Berlin Heidelberg.
Kim, J. J., 2014. Impact of the Investment of Venture Capitals on the Performance of SMEs
(Doctoral dissertation, Doctoral Dissertation, Hoseo University).
Kirzner, I. M., 2015. Competition and entrepreneurship. University of Chicago press.
Kuratko, D. F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Mueller, S., 2011. Increasing entrepreneurial intention: Effective entrepreneurship course
characteristics. International Journal of Entrepreneurship and Small Business. 13(1).
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Oosterbeek, H., Van Praag, M. and Ijsselstein, A., 2010. The impact of entrepreneurship
education on entrepreneurship skills and motivation. European economic review. 54(3).
pp.442-454.
Schaper, M. T. And et.al., 2014. Entrepreneurship and small business.
Welter, F., 2011. Contextualizing entrepreneurship—conceptual challenges and ways forward.
Entrepreneurship theory and Practice. 35(1). pp.165-184.
Yu, Y., Luo, W., Lee, Y. and Zhu, Q., 2014. Investment behaviour and performances of
government-sponsored venture capitals. Economic Research Journal. 2. pp.32-46.
Zhirong, M. and Yinglu, L., 2012. Do Venture Capital's Value-added Activities Really Work.
Empirical Evidence from the Listed Companies of Shenzhen SME Board. 2.
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