LUBM302 Business Plan: Cherry Forest Bakers, London, UK

This business plan outlines the strategy for Cherry Forest Bakers, a new bakery venture in London, UK, focusing on high-quality, made-to-order cakes and cookies. The plan details the business concept, including the value proposition of fresh, customizable products. It incorporates a PESTLE analysis to assess the macro-environmental factors and a Porter's Five Forces analysis to evaluate industry competition. The marketing strategy emphasizes social media and advertising, with a focus on market research, segmentation, targeting, and positioning (STP). The operating plan covers production, and the management structure is also included. Financial projections, including income statements, and risk assessments are also part of the plan. The business aims to differentiate itself through superior product quality and customer service, targeting a broad demographic with a strong online presence and local marketing efforts. The plan also considers competition from established bakeries and the need for constant innovation to meet customer expectations. The business plan is intended to guide the successful launch and growth of Cherry Forest Bakers in a competitive market.

Business Plan

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
The business detail.................................................................................................................4
Industry and market analysis..................................................................................................4
Customer and value proposition.............................................................................................7
Marketing strategy..................................................................................................................1
Operating plan........................................................................................................................3
Management team and company structure.............................................................................4
Resources................................................................................................................................4
Financing................................................................................................................................5
Financial projections..............................................................................................................5
Risks and strategic options.....................................................................................................7
Key milestones.......................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business plan is defined as the written document of various activities that are going to
take place in order to provide succession to the proposed plan (Ivanisevic and et. al., 2016). With
the help of appropriate business plan a new venture can be established in significant manner due
to which their goals and objectives can be attained in such a manner that no resource get wasted.
This plan is based on business plan of a Bakery which is going to be initiated in UK. The bakery
is named as Cherry Forest Bakers. The bakery is going to provide higher quality cakes and
cookies which are prepared on order basis in order to maintain freshness. This overall business
plan is demonstrating various aspects of business along with competitors analysis.
MAIN BODY
The business detail
The business plan under this report is covering the plan for initiation of new venture
named Cherry Forest Bakers which is a bakery and going to be open in London, UK. The bakery
is associated with producing cookies and cakes on instant basis in order to provide customer
satisfaction to their clients. The company is going to offer numerous variety of cookies and cakes
which can satisfy needs and demands of huge customers. For promoting their business they are
going to use social media and advertisement hoardings so that to spread awareness regarding
their business and product offerings.
Industry and market analysis
PESTLE analysis
This is an analytical framework used in order to analyse macro environment factors as
this could be helpful in evaluating different implications which are having direct impact over
business operations. PESTLE analysis is associated with six factors such as political, economic,
social, technological, legal and environmental which are existed within business environment.
Cherry Forest Bakers is going to establish their business as a bakery which is situated in London,
UK (Efstathiou, 2018). There are numerous factors due to which the new venture may face
implications and the same are elaborated as under:
 Political factor: These factors are associated with government policies, foreign trade
policies, laws of labour and stability within political conditions. These factors may
impact business activities and when Cherry Forest Bakers is planning to operate in the

markets of London then this is imperative that they understand all the governmental
policies along with reaching out to customers as well. Cherry Forest Bakers is opening
their bakery business in market of London and this is a known fact that governmental
policies within UK are liberal so this would be easier for Cherry Forest Bakers to run
their business.
 Economical factor: These factors are associated with economic growth, exchange rate
and inflation rate. Economic condition of UK is stable due to which people are prone go
for innovative products and higher customer service quality. The quality offered by
Cherry Forest Bakers is optimal so they have high chances for market survival along with
attaining high market focus (Xu, 2018).
 Social factor: These factors are linked with social culture and needs or preferences of
customers in relation to some particular commodity. These factors are linked with age,
growth and gender of people due to which businesses can easily frame their strategy to
grow. Cherry Forest Bakers is initiating their business in bakery sector in which variety
of cookies and cakes are prepared by them which is aligned with need and preferences.
 Technological factor: These factors are linked with using innovation and emerging
technology within business. The company is providing prompt service to their customers
and for this latest technologies are used by them. This will help the company to align
their goals and objectives with business efforts. This will help the company to meet
expectations of customers by updating their business with new technology.
 Legal factor: These factors are associated with laws which relates to employee health
and safety. Besides this laws related to labelling are also required to be followed by
production concern. In order to align with legal aspects Cherry Forest Bakers is using all
those legal obligations so that to stay away from any legal boundations. This is helpful
for Cherry Forest Bakers to place their product in market within appropriate manner
(Freedman, 2020).
 Environmental factor: These factors are linked with issues of environment and
minimising harm to environment by using such practices as well. Cherry Forest Bakers
is using environmental friendly techniques of production so that to minimise harm to
environment and leading the business in desired manner.
Porter's five force model

This is a tool used by businesses in order to analyse intensity of industry and existed
competition within industry as well (Muravyev, Talavera and Weir, 2016). Due to various forces
business operations get hampered and in the same manner functionality of the business can be
affected. This model was developed by Micheal E. Porter in the year of 1980 in order to provide
ability to the business for reaching out to attaining objective of earning profits. This approach is
having 5 aspects which are elaborated as under: Competition in the Industry: This factor is defined as existed level of competition
within industry. This is helpful in analysing conditions of rivals and the ways which are
adopted by them to attract customers. This could help in dealing with market competition
in appropriate manner. Under this the company is having various competitors within
market which creates higher threat for the company to grow in proper speed. In case of
cherry forest bakery also, rivalry was high because many competitors were offering same
kind of products and they had to compete with them on the basis of price, quality as well
as relation with customers.
 New entry in the market: This dimension is associated with ease of entry by a business
to a new market. This factor may impact the business to slow down their pace of
development and facing problem in acquiring new markets. Cherry Forest Bakers is
performing market research in appropriate manner due to which they can understand
needs and demands of their customer in significant manner. Under this threat low
existence is seen as in the market of food it is not easy to get enter and develop their own
market. In context with cherry forest industry the economies of scale were beneficial due
to which they had effective distribution channels which was helping them to grow their
business. So, when new competitors enter the market they were not facing much threat
from them.
 Power of suppliers: This force is defining power hold by suppliers existed within
industry (Oliver, 2017). Due to high demand of any product supply for raw material will
also be increased. Cherry Forest Bakers is having various suppliers as the company is
dealing in diversified product range. So this force is providing low impact to the
organisation as they have power to switch their supplier from one to another.
 Power of customers: This force is defined as power hold by customers in relation to
price fluctuation. In the industry of retail customers are treated as the major target due to

which they hold high power. The customers are having various options to switch so they
hold high power. In this case Cherry Forest Bakers is required to introduce prominent
quality in their goods and services in order to attain attraction of their customers.
 Threat of substitution: This force is defined as existing substitution within market
which may impact working of the business in negative manner. For Cherry Forest Bakers
this is necessary for them they analyse market competition and availability of substitute
so that to acquire market edge (Mogaji, Farinloye and Aririguzoh, 2016). As, the bakery
products which they were offering other companies were also offering the same quality
products at effective prices and when customers purchase any kind of bakery product
they don't think from which bakery they have to purchase.
Competitor analysis
There are various competitors existed for Cherry Forest Bakers due to they may face
various difficulties. This is highly essential for Cherry Forest Bakers that they offer appropriate
quality in order to compete with their rivals and to analyse market trend and customer potential
as well. Oven the bakery is the major competitor for Cherry Forest Bakers as that is an
established company and renowned in London. Oven the bakery is giving fierce competition for
Cherry Forest Bakers so in order to align their goals and objectives with needs of their customer
Cherry Forest Bakers is required to manage their business offerings in distinct manner.
Customer and value proposition
The USP for Cherry Forest Bakers is that they are producing cakes and cookies as per
order basis. This is the major feature of Cherry Forest Bakers which is helpful for them to attain
market edge and competence.

Marketing strategy
Marketing plan determines marketing strategy being applied by organization. It
represents the overall business plan according to which goals are being achieved.
Company overview: The report is based on Cherry Forest bakery. It has been established in
London, UK. The company will provide many bakery products like cookies, pastries, muffins
and even decoration items. The main target of company will be young age people who love
cookies and pastries. The bakery also includes a comfortable area where people can sit. Apart
from young age people target is also on tourists.
vision and mission: The vision of cherry forest bakery is to educate employees as well as the
audiences regarding the fresh baked products as from where their products are as well as what it
contains. The company also has the vision of providing best quality baked products in whole
London. The mission of Cherry forest bakery is to establish their bakery in such a way that they
bake best quality products, create the environment in which employees can learn more as well as
innovate new strategies as well as ideas which will help their bakery to grow.
Market research: It means an effort done by organizations to collect all information about their
target markets, customers and know about their likes as well as dislikes (Alvarez and et. al.,
2020). There are many methods that a company can use to analyse their market like surveys,
focus groups, observations, social media and so on. In context with Cherry forest bakery they can
use the method of surveys as well as social media listening. With the help of surveys, some
questions are asked from people so that they can give feedback about their experience and then
make changes to attract them. It is also beneficial for them because its a very easy process as
well as inexpensive. The company can also use the method of social media listening because in
today's world almost every one is active on social media and people can freely give their reviews
as well as suggestions.
STP Model in marketing plan:- Segmentation:- It means to implement different segments of customer based on their traits.
It is done on the basis of four types that is geographic segmentation, demographic
segmentation, behavioural segmentation and psycho graphic segmentation. Based on
geographic segmentation, cherry forest bakery will focus on London as well as its nearby
areas. As there are other type of bakeries also but the products they will be providing is not
been provided by any other bakery. Based on demographic segmentation the company has
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its focus mainly on young people because they like all bakery products. Based on
behavioural segmentation they divide their customers on the basis of their likes as well as
reviews through social media. Based on psycho graphic segmentation they divided their
customers on the basis of their opinions (Harris, 2017). Targeting:- In this process businesses look at three segments and these are size of
organization, profitability and reachability and while doing targeting various specialization
are also been considered like selective specialization, product specialization. In context with
cherry forest bakery their main target was to attract young people and innovate different
varieties of baked products. Positioning:- It means to set a product in the minds of audiences as what is special in
product as compared to their competitors. In case of cherry forest bakery there specialised
products were their pastries and through this they applied many strategies like promoting
through social media to position them in the minds of people.
Sales process:- Benefit from efficient operations:- In context with bakery industry new changes in the
form of innovations should always be done because it will be beneficial as well as easy
for them to initiate new food trends in their bakery as compared to other large bakeries. Make the most out of promotions:- In a bakery industry it is difficult to have large
profits and this can be only done if high quality products are been offered so in case of
cherry forest bakery they were providing high quality products to improve their sales as
well as promoted about their specialised products very well.
Pricing strategy
The pricing strategy which cherry forest bakery used is penetration pricing because their
business was just opened so they offered their products at low prices as well as gave various
offers which was a good strategy by them.
Marketing mix
Products
This dimension of marketing mix is related with business offerings which are offered by
a business organisation (Langemeier and Boehlje, 2017). In the context of Cherry Forest Bakery
they are offering variety of cakes and cookies to their customers which are their major offerings.
Besides this the USP for Cherry Forest Bakery is that they prepare cookies and cakes on order
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basis that means they do not stock the same rather prepare them after receiving order so that to
manage freshness.
Price
This dimension of marketing mix is associated with pricing tactics used so that high
customers can be attracted and at the same time profits can be earned. For Cherry Forest Bakery
they are using penetration pricing strategies in order to place their business in new market in
significant manner. With the help of appropriate pricing strategy Cherry Forest Bakery can
sustain in the market and retain their customer for longer duration of time.
Place
This aspect of marketing mix defines the place at which business is going to be operated.
For Cherry Forest Bakery they are willing to initiate their business in London, UK which is a
prominent location. The location is playing significant role in managing business functions and
grabbing attention of potential customers as well (MacAlister, 2016).
Promotion
Promotion is categorised as the movement which is used by businesses so that to increase
sales and provide awareness among customers. In the context of Cherry Forest Bakery they are
using social media and display hoardings in order to promote their products and to meet their
business objectives.
Operating plan
Cherry Forest Bakers is initiating their business in food industry as bakery business
within markets of London. They are manufacturing cookies and cakes in instant manner so that
to provide fresh cookies and cakes to their customers. They are keeping physical stores and
under this majorly they are targeting to kids and youngsters. After getting success in markets of
London they are planning to expand their business in some international markets as well which
could be helpful for them to reach out to their business objectives. Under this training sessions
are provided to employees of Cherry Forest Bakers so that they can attract huge number of
customers.
SWOT analysis
Strength Weaknesses
 Cherry Forest Bakers is coming with  In UK large numbers of competitors are
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varied variety of cakes and cookies.
This is helpful for them to attract huge
customers due to which appropriate
profits can be earned.
 The major USP of Cherry Forest
Bakers is that they are preparing cakes
and cookies at instant basis which is a
advantage for the organisation..
existed due to which high competition
is being faced by Cherry Forest Bakers.
 High cost is another aspect due to
which the company may face
difficulties.
Opportunities Threats
 People within UK are prone to spend
their income on innovative eatable
products.
 Due to implication of COVID 19 the
company may face difficulties of
placing their product in market.
Management team and company structure
Company structure is defined as the system of organisational structure which is outlining
various activities in order to align organisational goals and objectives. These activities are related
with appropriate delegation of authorities, roles and responsibilities. On the other hand
organisational structure is the deciding level in which information flow is taking place. In the
context of Cherry Forest Bakers they are established as a sole proprietorship which minimises
business complexities for them.
Resources
In order to start the business various resources are required by them and in the same
manner which is desired. For Cherry Forest Bakers there major resources are human resource,
financial resource and marketing resources (Alkaraan, 2017). Human resources are defined as
human capital required in the business in order to run the business with utmost efficiency. In this
manner Cherry Forest Bakers do require human capital of 5 employees. Besides this financial
resources are defined as the working capital which is required to run a business appropriately.
Being a new venture the major capital needed by Cherry Forest Bakers is initial investment and
working capital. At last marketing resources are categorised as acquiring those markets in which
high sales can be made by Cherry Forest Bakers.
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Financing
In order to start new venture capital is the foremost aspect which is needed. Cherry Forest
Bakers is collecting their capital from bank loan as this is a low interest method which can be
used by businesses so that to acquire higher money assistance.
Financial projections
Finance is the foremost resource which is required by a business as this provides higher
opportunities to the company for growth and sustainability. Financial resources are helpful in
gathering the entire major requirement such as purchase of raw material and managing
machineries (Brustbauer, 2016).
Profit and Loss Statement 2020
Sales 250000
Less : Sales Return 10000
Net Sale 240000
Cost of goods sold
Direct Cost 95000
Gross Profit 145000
Gross Profit % 58%
Operating Expenses
Salary 45000
Insurance 5500
Advertisement 3500
Total Operating Expenses 54000
Interest Incurred 900
Depreciation 1500
Total Expenses 2400
Profit 88600
Income Tax Paid 2600
Net Profit 86000
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Cash Flow Statement 2020
Cash Flow from Operating Activities
Net Profit 86000
Add:
Depreciation & Amortization 1500
Increase in Accounts Receivables 190000
Increase in Inventory Value -60000
Decrease in Accounts Payable 10000
Change in Income Tax Liability -25000
Sales Tax -6000
Net Cash Flow from Operations 196500
Cash Flow from Investing Activities
Purchase of Bakery Machinery
-
150000
Purchase of Furniture -25000
Sale of Fixed Assets 20000
Investments Received 15000
Net Cash Flow from Investing Activities
-
140000
Cash Flow from Financing Activities
Issue of Shares 100000
Increment in retain earnings 20000
Dividend Paid -35000
Net Cash Flow from Financing Activities 85000
Closing Cash Balance 141500
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Break Even Analysis 2020
Variable Cost 200
Selling Price 300
Fixed Cost 2000
Contribution Per Unit 100
Break Even 200 Units
Risks and strategic options
The major risk associated with Cherry Forest Bakers is that they may fail in their market
due to existence of huge competitors. This risk can be minimised by offering minimal prices and
high quality products. Another risk is related to facing losses as market of UK is full of
uncertainties which may create higher threat for Cherry Forest Bakers.
Key milestones
Key milestones are defined as the forward movement of the project in order to calculate its
ratio of succession. This is helpful in keeping track record on the progression of project so that to
calculate any variance from acquired plan. In this manner various methods can be used by
Cherry Forest Bakers such as KPI (Alkaraan, 2020).
KPI is an analytical tool which can be used so that to measure effectiveness and
performance of the project. KPI is helpful in developing business effectiveness for Cherry
Forest Bakers which leads them to evaluate venture performance at every stage.
CONCLUSION
From the above mentioned detailed information this can be concluded that business plan is
playing significant role in managing efficacy in business and new venture. With the help of
business plan control over organisational plan can be executed which is aligned with business
objectives. There are various elements within business plan such as financials, marketing plan,
milestones and many more. These are assisting the business to stay ahead in the competition so
that market prominence can be attained. Besides this organisational structure is assisting in order
to provide roles and responsibilities to employees in appropriate manner so that overall goals can
be aligned and met as well.
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REFERENCES
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Brustbauer, J., 2016. Enterprise risk management in SMEs: Towards a structural
model. International Small Business Journal. 34(1). pp.70-85.
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Freedman, L., 2020. The revolution in strategic affairs. Routledge.
Harris, E., 2017. Strategic project risk appraisal and management. Routledge.
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processes. Advances in Production Engineering & Management. 11(3). pp.173-182.
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