New Venture Creation: Business Plan for Coffee Connections in London

This report details a business plan for "Coffee Connections," a new café venture located in London, aiming to create a social ambiance for customers to connect while enjoying coffee. The plan includes a comprehensive market analysis using tools like STP analysis and Porter's Five Forces to assess the competitive landscape. The target audience is millennials, particularly students, and the café will offer unique services such as indoor games, stand-up comedy, and music shows to attract and retain customers. The financial plan outlines the costs, benefits, and profit projections for the venture, exploring various funding sources. Furthermore, the report discusses the management team and organizational structure necessary for efficient operation. The marketing plan emphasizes digital techniques and social media promotion to reach the target demographic, while the café will offer a range of coffee flavors, including herbal and organic options, to cater to diverse preferences. The overall goal is to establish a competitive edge and ensure the long-term sustainability of the business in the London hospitality industry. This document is available on Desklib, a platform providing students with solved assignments and past papers.

New venture creation

Executive Summary
In present time, several new ventures are established by enthusiastic & passionate
entrepreneurs. The present business plan is about a new venture named as coffee connections
which will start in London. Marketing & financial analysis of company is included in the study.
It also illuminates on management team and organizational structure for operating new entity in
an efficient manner.

Table of Contents
INTRODUCTION...........................................................................................................................4
Marketing plan.............................................................................................................................5
Financial plan...............................................................................................................................9
Management team & Organizational structure..........................................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
New ventures are the established by entrepreneurs in order to earn substantial amount of
profit margin. There is a business idea behind each & every new venture which differentiates a
business entity from another. In current competitive market place, it has become challenging to
start as well as run new business in an efficient manner. With implementation of creative as well
as innovative ideas, it is possible to ensure the long term growth & sustainability of business
entity. Here, new ventures are established by entrepreneurs with innovative ideas. For this, they
carry out extensive market research in order to check the feasibility of business idea before
commercializing it. Target audience is also need to select with due consideration for successful
implementation of idea. Funds are also required in order to start new business entity. In this
regard, a proper financial plan is prepared including adequate sources of funds. Before
commencement a new business, it is also vital to evaluate different types of risks & prepare
suitable strategies in order to meet with those risks & uncertainties in an efficient manner
(Kilenthong, Hultman and Hills, 2016). In current report, a new business venture named as
coffee connections is going to start. It is a café based of London. Here, the idea is based on
developing relations while enjoying coffee. Main aim of the venture is to provide such an
ambiance where people can sit & exchange thoughts, ideas with each other. Detailed market
analysis is covered in the assignment with implication of appropriate tools such as STP analysis,
& Porter’s five forces model. Further, it also includes suitable financial plan with an aim to
evaluate cost, benefits, profits through new venture. In addition to this, different sources of funds
are also identified in the following report. Furthermore, management team & organizational
structure has also discussed in the following plan. Moreover, the report is based on the way as
per which new ventures are established as well as managed.
Overview of new business venture
The new venture named as coffee connections will commence in London nearby the
colleges & universities. Main aim of this venture is to provide opportunity to visitors to socialize
& interact with each other. Here, the business is started nearby colleges as target segment of café
is millennial. They visit to café along with friends, love ones in order to spend the quality time.
By keeping this in mind, ambiance of café is designed on the basis of attractive themes. Apart
from thus, there is also facility of indoor games which allows visitors to enjoy. Different

activities such as stand-up- comedy, music shows are also organized in café on alternative days.
These all activities are helpful in increasing number of customers. There is also a small library
inside café where visitors can sit & enjoy the books along with coffee. Services of café are
unique which differentiate it with other cafes. They treat customers & try to provide them
overwhelming experiences. There are activities such as music concerts, games, comedy shows
are organized each & every weekend with an aim to enhance the engagement of visitors. Here,
they emphasis to provide experience to customers in order to enhance the build loyal customer
base. It is analyzed that these activities are helpful in enhancing competitive edge which is
crucial in order to sustain in current competitive market place. In addition to this, they offer
different flavors in coffee with an aim to provide wide options to customers. They offer herbal &
organic coffee to target health conscious people. The staff of café is pleasant, qualifies as well as
proficient. They have the competency to offer best possible services to visitors. These all features
allow company to earn substantial amount of profit margin. Additionally, administration of café
embarks innovative as well as creative ideas in order to create a differentiation in competitive
market.
Marketing plan
Marketing plan is the accumulation of several strategies with an aim to promote products
& service at wide level. It comprises different promotional & advertisement tools which are used
to facilitate communication with target segment (Guo, Cai and Zhang, 2016). Main aim of
marketing plan is to grab the attention of more number of customers in order to inflate current
level of sales & revenue. In context of coffee connections, they are also required to prepare a
suitable marketing plan so that they can promote products at wide level. Being a new venture,
they need to choose such strategies by which, it is possible to get positive outcome within
minimum possible cost. For the purpose of marketing, they majorly rely on digital techniques
such as social media platforms, content marketing, wed- marketing & more. They are likely to
post pictures of happy customers with hash tags over their social media platforms which is
helpful in gaining attention of more number of youth customers.
Marketing plan is a document which comprises marketing strategies of organization.
Under this, details regarding current marketing position & strategies of company are included

which further utilize by managers in order to prepare suitable marketing plans for future period
of time.
Segmentation, Targeting & Positioning
It is a tool wherein market is bifurcated into small components for selecting suitable
segment to target. This framework allows to choose an appropriate target segment in order to
earn significant amount of profit margin (Plummer, Parker and Reyes, 2020). Further, STP is
also helpful in positioning the product or service in the mind of target customers in positive
manner. It enables a business entity to alien marketing efforts in an appropriate direction to earn
significant amount of profit margin. In this regard, certain components of STP are stated below:
Segmentation: It is the first step wherein the entire market is divided in different
segments so that, it is easy to target a specific segment. It is a crucial way to get maximum
positive outcomes within available resources. Here, individuals with similar characteristics,
attributes are put together into a segment. Different basis of segmentation are given as under:
 Demographic: Here, factors such as age, occupation, gender, income are used as the
basis of segmentation. It is a widely used approach to divide the whole population into
different segments (Ditizio and Smith, 2017).
 Psychographic: In this, basis of segmentation are personality traits & characteristics. It is
concern with attitude, behavior, values & other such personality traits of customers.
 Geographical: Under this, population is divided on the basis of location. It allows
marketing managers to target customers from different localities.
 Behavioral: It is based on buying habits, behavior and pattern. Here, it is important to
analyze opinion, perception & thoughts of customers in order to get positive outcomes in
future period of time (Savarese, Orsi and Belussi, 2016).
Coffee connections is adopting two suitable ways of segmentation which are Demographic
& Psychographic. Here, they divide population on the basis of income & age factors. They are
majorly targeting to youth with medium income level. In psychographic segmentation, their
selection is based on personality, attitude and behavior of customers.

Targeting: It is the second step wherein suitable segment is selected by company in order to
alien marketing efforts in an appropriate way. Targeting allows organization to prepare
appropriate strategies for a specific group of customers (Veiby, 2019). It is not easy to select
target segment. Here, marketing managers are required to consider cost, profit, demand & other
such factors while choosing target audience. Coffee connection is targeting to youth segment that
belong from the age group between 18 to 25. Target customers are youth who like to interact
with each other & spend quality time. In this regard, administration of café prepares suitable
strategies which make them enable to attract more number of young audiences.
Positioning: Positioning is last but crucial stage in which organization puts effort in order
to establish positive image of brand among target segment. It refers to the perception, thoughts of
customers about the product or services of company. In context of coffee connection, they
prepare strategies for building positive image of entity by providing quality services at
reasonable price. Positive positing is helpful in gaining competitive advantage at market place.
Industry Analysis:
Nowadays, competition is increasing within industry constantly so, it is imperative to
analyze the industry in which business is being operated (Gianiodis, Markman and Espina,
2017). In industry analysis some crucial elements such as competitors, customers, and suppliers
are considered as a significant part of industry. In this regard, Porter’s five forces model is
mentioned as under:
Industry rivalry: It represents the level of competition within existing firms in industry.
Hospitality industry of London is exposed with extensive competition due to presence of large
number of organizations. For coffee connections, industry rivalry is really higher due to presence
of large number of competitor firms such as Climpson & sons, attendant and many more.
Presence of competitive organizations makes it challenging for respective company to operate
business successfully in market place for longer period of time.
Threat of new entrants: Here, threat of new entrants for coffee connection is higher due
to simplicity of business model & lack of entry barriers. It is analyzed that switching cost in
respective industry is also lower.

Bargaining power of customers: It is stated that bargaining power of customers of coffee
connections is higher due to availability of other options in market place. Here, customers have
choice to select such café which offers product at reasonable price. In addition to this, customers
are price sensitive so they are likely to switch the brand in search of best services at lower price.
Bargaining power of suppliers: Here, suppliers are crucial part of business as they
supply necessary raw material which further convert into finish goods in order to fulfill the
requirements of customers. In context of coffee connections bargaining power of suppliers is
lower due to presence of ample of vendors in market place.
Threat of substitute: In current scenario, threat of substitute is higher as there is varieties
of replaceable products are present in market. So, customers can easily switch over other
products in order to meet with their requirements.
With above points, it is monitored that level of competition within industry is really
higher thus there is requirement to prepare suitable strategies in order to ensure long term
sustainability in existing marker place.
Marketing mix: It is a combination of different marketing elements. Here, some crucial
components of marketing mix are mentioned below:
 Product: In context of respective business venture, they are offering range of coffee such
as flavor as well as organic coffee in order to meet with different requirements of
customer segment.
 Price: Under this component of marketing mix, they are adopting affordable pricing
strategy as per which they are offering products at affordable range.
 Place: It demonstrates the destination or location from where products or services are
offered to customers. Coffee connection is located at London nearby colleges &
educational institutions i order to cater target segment in an appropriate way.
 Promotion: Here, they majorly depend on digital as well as online techniques for the
purpose of promoting products or services among target segment.
 Process: In context of coffee connections, they are adopting smooth process so that all
the business activities are carried out in proper way.

 Physical equipment: In reference of coffee connection, they have physical equipments
such as coffee machines, blenders, grinder, furniture and more.
 People: It is stated that staff of café is highly proficient & educated. They are clam,
patient & have pleasing personality for offering up- to-the mark services to visitors.
Financial plan
Financial plan represents the current financial conditions of firm with analysis of profit,
cost & expenses. Here, detailed information regarding assets, liabilities are also provided so that,
it is easy for financial managers to take business related decisions. It assists managers in order to
select different sources of fund to meet with future business requirements in best possible way.
With this, financial managers can identify current level of sales & profit margin which allow
then in preparing suitable plans to enhance future profit ratio (Cosenz, 2017). In financial plan
different documents such as balance sheet, cash flow, profit & loss account are prepared in order
to provide a clear picture about current financial standing of company. Financial plan is used by
organization for the purpose of record keeping & communicating necessary information to other
relevant parties. In addition to this, financial plan is also helpful in maintaining adequate level of
liquidity within organization for meeting with daily expenses of business in an appropriate way.
Hence, administration of coffee connections is required to prepare suitable financial plan to
ensure effective management of funds within business.
Source of funding: In business, funds are required in order to perform different activities
to attain predefined goals within stipulated period of time. Different sources includes different
rate of interest, time structure and more (Smith, Smith and Bliss, 2020). It is required to consider
some crucial factors such as cost, time, rate of interest and many more while acquiring fund for
meeting with business requirements. Certain sources of funds are stated below.
Personal funding: While starting a new venture, individuals are likely to invest their own
funds at initial level. In Personal funding, there is no requirement to pay interest and other such
expenses (Windsor, 2017). In addition to this, there is no burden of repaying the amount which
allows a person to work with free mind for enlargement of business. However, huge funds
cannot acquire through this source of funding.

Bank: For business entities, banks are considered as one of the major source of funds.
Here, funds are provided for a particular period of time on certain rate of interest. Apart from
this, there is also requirement to keep assets as collateral while taking money from bank.
Additionally, it is mandatory to pay predefined rate of interest whether the business venture is
incurring profit or losses. It is wise to choose this option only when, one is earning regular
income. Although, majority of business units whether new or existence rely on banking
institutions in order to get adequate amount of funds for continuing the business operations till
longer period of time.
Venture capital: Here, investors put their money in new ventures and startups with an
aim to get significant return in longer run. They are likely to invest in such business units which
have higher probabilities of growth and success in future period of time (Sahut, Iandoli and
Teulon, 2019). It is stated that venture capitalist are institutional investors or wealthy individuals
who like to invest their ideal funds in startups with growth perspective in future. Hence, venture
capital is regarded as a way by which start ups get fund for small period of time.
Angel investors: People who invest money in business during initial phase are known as
Angel investors. Main aim of these investors is to motivate individuals to commercialize unique
and creative business ideas. Here, funding is offered in exchange of ownership which might in
terms of equity in company. Along with the money, angel investors also help in business growth
by providing significant insights out of their years of experience (Murugesan and Jayavelu,
2017).
After going through with above mentioned paragraph, it is analyzed that venture capital
is the most suitable source to acquire necessary amount of funds for coffee connections. Here, it
is possible to get suitable amount of money with limited expenses in terms of interest and other
payments. This source will assist organization to grow in future. Unlike of bank funding and
other such sources, there is no requirement to pay any amount as an interest to venture capitalist.
Hence, it is suggested to choose this source with an aim to promote business insignificant
manner.

Cash flow Analysis:
It is a financial document which offers information about cash inflows & outflows within
a particular period of time. Cash flow is prepared on the basis of three major activities which are
operating, investing & financing. Coffee connections perform plenty of transactions within a day
for which cash flow is given below:
Cash receipts
Cash in hand 2500
Investment 6000
Estimated sales 40000
Loan 9000
Total cash receipts £ 57500
Cash payments
Fixed cost
Interest on loan 1000
Rent 2500
Insurance 1500
Salary of employees 6000
Variable cost
Electricity cost 600
Raw material cost 1400

Wages 2000
Total cash payables 15000
Cash flow £ 42500
Profit and Loss Statement: It is prepared by considering all the operating expenses as
well as incomes. In this regard, profit & loss statement of coffee connections is given below:
Profit and loss statement
sales 40000
Less: cost of sales 3000
Gross profit 37000
Less: operating cost
Fixed cost
Interest on loan 1000
Rent 2500
Insurance 1500
Salary of employees 6000
Variable cost
Electricity cost 600
Raw material cost 1400

Wages 2000
Net profit £ 22000
Balance Sheet: It is the major financial document which has two major sides such as
Assets & Liabilities. It is prepared for a particular period of time. In context of Coffee
connections, balance sheet of entity is given as under:
Assets
current assets
Cash 3500
Investment 5000
Debtors 1500
Fixed assets
Machinery 10500
Total assets £ 20500
Liabilities and equity
Current liabilities
Creditors 500

Long term liability
Loan 3500
Total liabilities 5000
Equity
Reserves 10750
Share capital 750
Total liabilities and equity £ 20500
Breakeven: It is known as the point where income of organization is equal to its
expenses. In other words, this is no loss & no profit situation. In context of Coffee Connections,
it is currently operating at BEP where the entity is able to cover all its expenses by its income.
BEP calculations:
Variable expenses 5600
Fixed cost 16150
Sales 35000
Contribution sales-variable expenses

29400
PV ratio Contribution/sales*100
84 %
BEP in pounds Fixed cost/PV ratio
192 pounds
Management team & Organizational structure
In management team, a lot of qualified, proficient, knowledgeable as well as competent
individuals are include who work at different positions with an organization. These individuals
are imperative part of organizational hierarchy and also significantly contribute in decision
making process. In business, different types of organizational structure are adopted such as
hierarchical, functional, flat, divisional structure and more (Block, Cumming and Vismara,
2017). In reference of coffee connection, they are using hierarchical organizational structure in
which roles and responsibilities of different individuals are pre- define. In this, there are three
levels of management which is top, medium as well as lower level. Here, important decisions
related to business are taken by top level personnel’s. In this, middle level managers are
responsible for implementation of decisions taken by higher authorities. On other side, lower
level people are responsible to undergo with business activities as per predefined policies of top
level management. In addition to this, all the people who are working within cafe have clarity
about their roles, positions within organization which further help in minimizing ambiguity at
work please.

Ownership
Coffee connection is a venture which is started by an entrepreneur. It is started by a
single business owner who has the authority to take all necessary decisions. In organization,
decisions are implied after getting the final confirmation from owner. Apart from this, owner is
the last responsible person for positive as well as negative outcomes of company.
Management
Management is made with different individuals who have the responsibility to manage all
the business activities in well defined manner. For this purpose, highly qualified, proficient,
knowledgeable people are included button management team of coffee connections. Here, they
significantly contribute towards success of business entity by taking efficient decisions. It is
analyzed that management of respective entity is highly efficient and has the ability to take right
decisions for further growth of company.
Roll of team members, skill and qualification
Team members of respective organization play an imperative role in success of entity.
They all are efficient enough in order to make optimum use of resources. They are well qualified
& have the degree from prominent institutions. With the efficiency and knowledge, they are able
in contributing towards success and growth of organization. Apart from this, there is higher
coordination between team members which allow them to drive positive outcomes for betterment
of entity. However, administration of coffee connection is required to organise appropriate
training and learning sessions with an aim to improve productivity of employees. Training will
help in enhancing efficiency of work force which will further lead towards employee
engagement and proficiency.

CONCLUSION
With above stated points, it is concluded that new venture is a business entity which is a
started by accumulating necessary resources equipments and tools. These ventures play an
imperative role in economic growth and development. Here, the above stated business plan is
about new venture named as coffee connection that is going to start in London. There is
discussion about detailed marketing plan through which it is quite easy to sustain in such market
place which is full with extensive competition. It is concluded that venture capital is the most
suitable way to get necessary funds for successfully operating the business entity. Moreover,
appropriate management and organizational structure is also imperative for ensuring success of
new business venture in longer run.

REFERENCES
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