LUBM302: New Venture Creation - The Coffee House Business Plan

This report details a new venture creation plan for 'The Coffee House,' a cafe to be launched in London. It outlines the business's focus on providing high-quality, seasonal coffee and beans in a prime location. The report covers key aspects including a marketing plan that utilizes segmentation, targeting, and positioning strategies, along with an industry analysis using Porter's Five Forces. The financial plan includes funding sources, cash flow forecasts, profit and loss statements, and balance sheets. Additionally, the report describes the management team, company structure, and required skills. The goal is to offer a unique customer experience, gain a competitive edge, and ensure long-term sustainability in the market.

New Venture Creation
Assessment

Executive summary
New venture creation allows the entrepreneur to covert their creative and innovative ideas into
reality through starting new business venture. There are number of small and creative ventures
started by the entrepreneurs in order to work towards enhancement of local society. This report
highlights starting of new business venture named as The coffee house is going to start in
London. The report includes detailed description of the new venture including its name, products
and services and so on also the marketing and financial plan new venture also management of
team and company structure is also analysed in this report.

Table of Contents
Introduction .....................................................................................................................................4
Marketing Plan.................................................................................................................................5
Financial Plan...................................................................................................................................8
Management Team and Company structure..................................................................................17
Conclusion.....................................................................................................................................18
References ....................................................................................................................................19

Introduction
New venture creation is the process of converting new and innovative ideas into reality
by an entrepreneur bearing all the risk in order to get the satisfying rewards and profits
effectively. There are number of new ventures are started by the entrepreneur which are basically
result of their creativity and innovation with the main aim of satisfying needs of their target
customers and bring some innovation in the marketplace. It is analysed that with increasing
competition in the marketplace it becomes difficult for the entrepreneur to sustain in the
marketplace for longer period of time, so it is important for the entrepreneur to have some
innovative and creative ideas in order to survive for long period of time as well as gain
competitive advantage. There are number of risk included in starting a new venture, in order to
effectively deal with those risk and smoothly start new venture requires proper planning and
strategy formulation by the entrepreneur. This report is based on the new business venture started
named as Coffee House. This report highlights detailed description of the chosen business
venture including description of its product and services, unique benefits also intellectual
property analysis. In addition to this the marketing plan with market chosen industry analysis,
target market also evaluation of the competition, sales process, pricing strategy is also mentioned
in this report. Financial plan including the source of funding, cash flow forecast also profit and
loss statement, balance sheet along with the contingency plan and growth of the new venture is
also mentioned in this report. Furthermore the management team and company structure of the
new venture started along with the roles of team members, skills, qualification and training
required by the team members is also highlighted in this report.
Overview of new business venture:
This report is based on starting new business venture named as Coffee house cafe, this
venture is going to be launch in London offering fine quality of coffee beans and seasonal coffee
to the customers. Before opening a new business venture one of the main factor is the choice of
location, the choice of location can lead the business towards success of either failure. The cafe
will launch in Monmouth St, London (Biloshapka and Osiyevskyy, 2018). This location is
considered to be perfect location for starting a new venture because this location is one of the
trendiest neighbourhood which attracts large number of visitors year round. The main focus of
the this business venture is that it will be focus on offering extreme quality of roasted coffee to

its customers and also offering seasonal coffee which includes offering coffee as per the seasons
considering the needs and preferences of the customers. In addition to this the cafe will also offer
quality coffee beans its customers also (Drori and Ellis, 2020). The main purpose of this new
venture is to offer extreme experience to its customers which leads to satisfying their needs, all
the services offered by the cafe will help cafe to gain competitive edge in the marketplace
allowing cafe to sustain for longer in the competitive market. Cafe will mainly focus on offering
coffee according to the seasons as weather changes so does the preference of the customers. For
example the coffee grown in the northern hemisphere are mostly considered to be peak flavour
from starting of the summer whereas the coffee grown in the southern hemisphere are best
during winter to spring. The venture will be offering coffee accordingly in order to satisfy the
seasonal needs of the customers this will help company to gain competitive advantage over their
customers. The Coffee House Cafe is planned to be launched in the coming 8 months at 27
Monmouth St. London, United Kingdom.
Marketing Plan
Marketing is defined as the process of making consumer aware of the company's product
and services through use of various marketing tools and techniques effectively, there are number
of strategies available that can be used by the marketer in order to promote their product and
services effectively which leads to enhancing their productivity and profitability. In case of
Coffee House Cafe, various marketing techniques available can be used by the cafe in order to
make their customers aware of the product and services in the marketplace effectively. Being a
new venture in the marketplace the cafe needs to effectively focus on their marketing activity, in
addition to this budget also needs to be taken into consideration. In order to get the positive
outcomes at relatively lower cost effective marketing strategies are taken into consideration by
the cafe also various social media platforms are used by the cafe in order to promote their
products and services, this will help them to manage the budget effectively (Dutta and Banerjee,
2018). The majority of focused customers of the cafe includes the millennials and coffee lovers
which will be attracted through using various social media platforms. Marketing plan is detailed
strategy of marketing activity needs to be carried out by the business organisation in order to
make their brand visible among the target customers, it also includes present market position of
the company along with their strategy. The detailed marketing plan of the chosen venture is
highlighted below:

Segmentation, Targeting and Positioning:
The segmentation, targeting and position is one of the essential framework used by the
business organisation in order to analyse their market and divided the complete market into small
segments, and also helps in targeting that particular market effectively, and then helps the
business organisation to effectively make their target audience aware of the product and
services . This framework is one of the essential framework used by the company in order to
enhance their brand image in the marketplace effectively. In case of Coffee House Cafe, the STP
framework is highlighted below:
Segmentation: The first element of this framework is the segmentation, it involves dividing the
whole market into small segment, this framework allows the business organisation to effectively
focus on a particular segment as it is not easy for the company to focus on the whole population ,
choosing the right segment which lead them to choose target audience. In case of the Coffee
House Cafe the segmentation is done on the basis of characteristics and attributes of the
customers (Entrialgo and Iglesias, 2018). There are various type of segmentation used the
business organisation as highlighted below:
Demographic: The first type of segmentation is on the basis of demographic basis, under
this the segment is divided on the basis of age, gender, occupation, earning capacity of the
customers. This type of segment is widely used by the business organisation in order to select
their suitable segment.
Psychographic: The another type of segmentation is the psychographic, under this the
segment is selected on the basis of their personality characteristics, their norms and values also
interest and attitude factor of the customers are also considered.
Geographical: This kind of segmentation includes where the business organisation select
their segment market as per the location, the segment of different location is taken into
consideration by the business organisation.
Behavioural: The last type of segmentation is the behavioural, under this the segment
market is selected on the basis of buying behaviour of the customers. The perceptions, opinions
and feelings of the customers are taken into consideration by the business organisation before
selecting the segment market (Hertz and Nelson, 2018).
From the above it is analysed that demographic and psychographic segmentation will be
used the Coffee House Cafe in order to chose their segment market effectively. In case of

demographic segmentation the age, earning capacity of the customers will be taken into
consideration. Whereas in case of Psychographic the customers will be divided on the basis of
personality and personal traits effectively.
Targeting: Once the market is divided into small segment effectively then comes targeting,
under this the market is targeted effectively using suitable strategies. Targeting the right market
allows the business organisation to effectively satisfy their needs as they have to only focus on
their target audience. It also makes it easier for the business organisation to understand their
needs and wants effectively. While targeting the market the cost, buying habits and personal
characteristics of individual . In case Coffee House Cafe, the target audience will be millennial
and also the coffee lovers around London (Marshall and Gigliotti, 2020).
Positioning: After targeting the customers comes positioning, it is the process of creating strong
position of brand in the minds of customers, it is basically done through using various marketing
and promotional tools. In case of Coffee House Cafe, various social media platforms and posters
will be used by the cafe in order make consumers aware of the cafe and create strong position of
the cafe in the minds of target customers.
Industry Analysis:
In order to deal with the increasing competition in the market, it is very essential for the
business organisation to analyse the prevailing competition in the industry so as to take necessary
actions. Also it is important for the company to analyse and evaluate the industry in which they
are planning to operate, this includes the competitors, suppliers and customers. In order to
analyse the industry of Coffee House Cafe, the Porter's Five Force model is mentioned below:
Porter's Five Force model: It is one of the essential framework used by the business organisation
in order to analyse the competition in the industry (Nyadu-Addo and Mensah, 2018). It includes
mainly five forces which helps in analysing the competition which basically shape every industry
effectively. In case of Coffee House Cafe, the Porter's five force are mentioned below:
Level of competition: It is described as the level of competition present in the industry,
there are large number of similar cafe's available in the London market which will create high
competition for the Coffee House Cafe. But with unique quality and services the cafe can deal
with this factor effectively.

Threat of new entrant: In case of selected industry the threat of new entrant is relatively
high, as it is easy to start new cafe because starting new cafe involves less investment. Easy entry
makes it easy for the new firms to easily enter in this kind of industry (Pato and Teixeira, 2018)
Bargaining power of buyers: availability of less number of customers will allow them to
bargain more in the marketplace. In case of Coffee House cafe, the availability of large number
of competitors makes it easy for the buyers to easily shift from one brand to another.
Bargaining power of suppliers: The large availability of suppliers make them bargain
more in the market, in case of Coffee House Cafe, the bargaining power of the supplier is low as
cafe can choose from large number of suppliers available in the industry.
Threat of substitute: Company offering similar services as of the chosen company are
considered as substitute. In case of chosen company, the threat of substitute is high because of
the availability number of similar cafe in the market. But with unique and quality services cafe
can overcome this factor effectively (Prashantham and Floyd, 2019).
Pricing strategy:
The pricing is one of the essential factor used by the business organisation in order to attract
large number of customers, setting right and attractive pricing strategy will allow the company to
enhance their performance and profitability. There are number of pricing strategy such as cost
plus pricing, value based pricing, premium pricing and competitive pricing, business
organisation can use any pricing strategy according to their market situation in order attract large
number of customers. In case of Coffee House cafe, competitive pricing strategy will be used in
order to attract large number of customers, under this the pricing will be set according to the
direct competitors of the cafe present, as this will help them to gain competitive advantage over
their competitors and sustain for long period.
Financial Plan
The financial plan is one of the essential document prepared by the financial manager of
the business organisation in order to evaluate and analyse the financial position of the company,
it helps in offering detailed information regarding the assets, liability also the inflow and outflow
of cash of the company. The financial plan helps the company to analyse various source of fund
available in the marketplace that can be used company. In case of Coffee House Cafe, the
preparation of the financial plan will help them analyse requirement of the finance and also

manage the funds in effective and efficient manner. In case of Coffee House Cafe, the financial
plan is highlighted below:
Sources of Funding:
This is a form of document which depicts about current financial position of entity along
with planning for collecting funds towards long term aspect. It provides detailed information
regarding assets, liabilities of company. Through this manager identify different sources of funds
order to meet with business objectives as per the requirement effectively. Further, it helps to
identify towards current level of profit and better prepare strategies towards increase in
profitability. So an appropriate financial plan is used by managers to analyse which is having
current financial positions and prepare strategies to meet within future goals and objectives. In
perspective of Cafe house coffee company where they need to prepare for their liquidity funds on
which they can mitigate their risk as per requirement.
Bank: It is considered a major source of funding for business. Bank provide funds for a
specific period of time and also charge interest as per the predefined rate. There is benefit from
banking services that new business can approach business loan as per interest basis to attain
effective demand regardless profit and loss business. So, it is wise to use this source while one
have permanent source of income.
Personal funding: According this source of funding, invest their own money in business
activities. Most important benefits of this they do not need for pay any kind of interest and other
expenses. Besides this, there is no hurry and burden to repay about amount for people as because
business man can easily borrow or arrange through relatives which they can meet attain huge
financial requirements.
Angel investors: From this investors they usually contribute their money in early stage.
Their main aim is to promote as well as encourage people for initiate new creative business
ideas. They generally provide funding within exchange about ownership as per in terms of
equity. Angel investors belong from acquaintances of entrepreneurs. So, it is crucial way to
promote new business and start ups.
Venture Capital: It is way of financing in which investors to invest start up and small
business for longer period of time as per growth perspective. They generally invests in such
business that having higher potential through better growth. Therefore, capitalists within small

business within long term growth perspective. So, it is way of companies majorly start ups for
getting money on short term period of time.
Recommendation:
As per above sources of funding for Cafe Coffee House company in which different types
of sources of funding has been discussed where Banking Services can be suitable for Cafe
Coffee House. In initial days company can represent their plans for attain better competitive
advantages. Cafe Coffee house would get eaisly short term basis loan as they will not require fpr
more expansion. Other benefit of bank service loan that it would be assess through all terms and
condition where Cafe Coffee House can flexibly recovered the loan as well as interest amount.
Cash Flow Analysis: The cash flow analysis helps in analysing the inflow and outflow of cash
in the business organisation, it helps them to analyse the effective way through which the
company can spend their cash. This analysis helps business organisation to analysis the inflow
and outflow of cash done on the regular basis. In order to analyse the cash flow of the Coffee
House Cafe the cash flow analysis is highlighted below:
Cash Flow forecasting:

Profit and Loss statements: This statement is prepared in order to analyse the overall net profit
and loss of the business organisation including all the operating expenses and expenses. In case
of Coffee House Cafe to analyse the profitability a detailed profit and loss statement is
highlighted below:

Balance sheet: The balance sheet helps in analysing the detailed financial position of the
company in the marketplace through the assets and liability. It is also known as the financial
position statement of the business organisation. In case of Coffee House Cafe, to analyse the

financial position the

balance sheet is high
lighted below:

Break-even: It is the point where the company is neither on the profit nor on the loss, it is
basically state of no profit no loss for the company. It the company is operating below BEP then
they are facing loss whereas if they are above the BEP then they are earning profit. In case of
Coffee House, cafe is working at BEP point and earning sufficient amount of profit.

Management Team and Company structure
The term management team is defined as the type of team which consist of number of
qualified and skilled individual working at various position handling various task of the business
organisation effectively. They plays an very essential role in the business organisation through
participating in various activities and essential decision making process of the business
organization. The collaborative team work helps in the achieving overall goals and objectives of
the business organisation leading towards enhancing the overall performance of the company.
There are mainly different types of business structure such as functional, hierarchical, divisional
and so on. In case of Coffee House Cafe, the Hierarchical structure is followed by the business in
order to smoothly carry out their activity and create effective clarity about the roles and
responsibility of the work among the employees of the cafe which leads to reducing any kind of
misunderstanding and confusion and effective achievement of the goals and objectives (Werthes,
Mauer, and Brettel, 2018).
Ownership: The chosen new venture which is an Coffee House Cafe is basically an start-up
started by a single entrepreneur, the entrepreneur is only responsible for taking all the necessar4y

decision related to the cafe. All the functions and operation of the cafe is carried out by the
owner himself, who is also responsible for a all the profit earned and loss occurred.
Management: The effective management leads to the effective operations of the business, in
case of Coffee House Cafe there is effective management team with required skills and
capabilities who effectively contribute to the overall development of the cafe through managing
all the activities effectively and efficiently. The management of the cafe is effective and also
capable of handle their team along with taking essential decisions.
Role of team members, skill and qualification:
The team members Coffee House Cafe of the organisation plays an essential role in
effective use of the resource available, the team members included are highly skilled and
capabilities which allows them to effectively contribute towards achieving desired goals and
objectives of the cafe and enhancing the overall performance of the cafe. In addition to this in
order to prepare them for future development required training is provided to them regularly
which also help in enhancing their skills. Trained employees effectively contribute to enhancing
the overall profitability and productivity of the cafe (Hopp and Greene, 2018). The role of the
team member is to work towards the enhancement of the cafe through carrying out essential
activity and operation of the cafe.
Conclusion
From the above analysis it has been concluded that the starting new venture gives ample
number of opportunity to an entrepreneur, also starting of new innovative venture also helps in
the overall growth and development of the economy also. It is analysed that the new business
venture plan stated for the Coffee House cafe is crucial and should be effectively adopted by the
business in order to enhance their growth and development in the marketplace. It is also analysed
that the detailed marketing plan will help the cafe in implement relevant marketing strategies
which will help them to face competition and sustain for longer in the marketplace. In addition to
this the financial plan will help the cafe to undertake the financial requirement effectively and
and also manage it, it is also analysed that building loyal customers will help the cafe to enhance
their performance and profitability in the marketplace.

References
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