Planning and Launching a Venture: Unicorn Ltd Business Report

This report, based on a student assignment, delves into the intricacies of planning a new business venture, using Unicorn Ltd, a grocery store, as a case study. It begins with an analysis of different business types, their risks, benefits, and limitations, followed by an examination of various financing sources, including savings, loans, and private equity. The report then explores legal considerations such as the Health and Safety at Work Act 1974, the Contract (Right of Third Party) Act 1990, and employment law. Market conditions are analyzed using a PEST analysis, and the report identifies gaps in the market, analyzes target markets, and develops a business plan, including mission, vision, aims, and objectives. The report also addresses business structures, financial forecasts, and responses to unmet targets, culminating in a pitch for funding and supporting documentation. The report provides a comprehensive overview of the key elements required for successful business planning and venture launch, offering insights into market analysis, financial strategies, and legal compliance.

Planning a New Business Venture
A guide to forming a new venture.
3/1/2019
LSIB
By Joanna Finnis

Planning a New Business Venture
Contents
INTRODUCTION
1.1 Analysis of different types of business concerns based on
their risks, benefits and limitations.
1.2 Analyse sources of finance for different business concerns
1.3 Legal considerations regarding planning of a business
venture
2.1 Analyse market conditions that impact on setting up a new
business venture
2.2 Analyse gaps in the market for potential products
2.3 Analyse target markets for a business venture.
3.1 Develop the mission, vision, aims and objectives of the
business.
3.2 Interpret external factors to justify need for your business
product.3.3 Specify the business product to meet needs.
3.4 Propose business structures and systems that will deliver
business aims and objectives.
3.5 Produce business planning forecasts based on targets
3.6 Identify business responses if targets not met.
4.1 Pitch for funding for a business proposal
4.2 Present documentation to support your pitch.
CONCLUSION
REFERENCES
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INTRODUCTION
Planning is a quite important process which affects the overall
functionality of a business concern. Business ventures normally
get initiated at a quite smaller scale. Many a time’s money or
capital can be invested by more than one individual or groups.
The main aim of people who invest in funds is mainly earning
higher profits. Business ventures in competitive market get
initiated due to demands of the market or the lack of supply.
This report has been framed on Unicorn which is a small scale
business concern located in Manchester, UK. It is basically a
grocery store that deals in organic food products at fair prices.
This report looks at various topics such as different types of
business concerns along with their risks and benefits. Also this
report focuses on various factors that drive market potential
along with skills that help in developing business cases. Lastly
this report mentions details regarding pitching of a business
proposal.
1.1 Analysis of different types of business concerns based
on their risks, benefits and limitations.
Case Scenario: This report has been framed base on a
supermarket chain store of the UK named as Unicorn
groceries. This organisation was basically chosen so as to
evaluate the impact any new development idea or plan has
on small and medium sized business concerns.
Business concerns can be of various types depending on their
size scale and area of operations as well. These business
concerns can further be divided into 5 broad categories:
Type of
business
Risks Benefits Limitations
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concern
Sole
Proprietorship
Personal assets of
individual are
considered as
assets of business
It is owned by one
person hence
decision making
becomes quite easy.
Raising higher
amount of funds
is quite difficult.
Partnership Each partner is
jointly and severally
liable for another.
Higher amount of
profits can be
generated as
compared to sole
proprietorship.
Decision making
is a complicated
process
Company There are a number
of risks in
companies such as
strategic,
regulatory and
financial risks
(Honig and Hopp,
2016).
It is a separate legal
entity.
Business decision
making happens
to be a quite
complex process
as number of
people increases.
1.2 Analyse sources of finance for different business
concerns.
Finance acts as the lifeblood for every business entity. The
amount of funds required by a business concern may differ
depending upon the size and scale. Sources of finance which
are used by business concerns have further been stated as
under:
Savings: It is an amount that remains unspent with
a person or anything that an individual has not
utilised. It is generally calculated by subtracting
expenses from net income received. This amount can
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be used by entrepreneurs as capital in their business
concerns.
Loans: A loan refers to a refundable amount that is
lent to anyone in return for a minimal rate of interest.
In the present context, owners and managers of
Unicorn prefer taking out a long-term loan from a
bank as it is a safe and secure method of funding.
Profits: Profits is something a business earns in
respect of goods and services rendered. The profit of
a firm is calculated by subtracting the amount spent
from the amount gained.
Private Equity: Private equity refers to a class that
comprises of alternate investment options. Capital or
funds in this category are not listed on a stock
exchange. It comprises of funds and investors who
have a mind-set regarding directly investing in
private business entities.
In the context of Unicorn, groceries owners and managers
have chosen bank loans to be a successful option for
availing funds.
1.3 Legal considerations regarding planning of a
business venture.
Planning a successful business venture is a complex process
and involves a number of steps and techniques. It is basically a
process which deals with activities and processes that help in
achieving desired goals or objectives. There are a number of
legal constraints that each organisation is required to follow
while undertaking its business operations.
Health and safety at work act 1974: “(HASAWA) lays
down wide-ranging duties on employers. Employers must
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Planning a New Business Venture
protect the 'health, safety and welfare' at work of all
their employees, as well as others on their premises,
including temps, casual workers, the self-employed”
www.worksmart.org.uk/health-advice/health-and-safety/e
mployer-duties/what-health-and-safety-work-act
This act clearly defines the duties of the employers,
employees and all other relevant person’s that exist at a
workplace. The main aim of this act is to maintain a safe
and secure working environment in the workplace and
ensure the health of their employees. This helps in
developing a sense of security in employees.
Contract (right of third party) act 1990: Contract act
in UK was proposed in the year 1990. “The Contracts
(Rights of Third Parties) Act 1999 (Third Party Rights Act
1999) can be used to give a non-party to a contract a right
to enforce some terms of the contract”.
www.uk.practicallaw.thomsonreuters.com.
It is basically a body of rules and laws that is meant for
regulating or controlling various contracts and contractual
agreements in the UK. The main aim of this act is to
maintain effectiveness in contractual agreements and
business practices along with protecting the rights of
buyers as well as sellers.
Employment law: As per this act employees are entitled
to certain legal rights such as receiving a week's notice
each year along with minimum wages of around 7.50
pounds per hour as well as maximum average working
week of around 48 hours. All these rights help in raising
confidence and motivation of employees and develop a
sense of belongingness in them.
2.1 Analyse market conditions that impact on setting up
a new business venture.
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For effectively analysing the market conditions that have
an impact on business venture can be ascertained by
conducting a PEST analysis of the market.
Political: This factor deals with political condition of a
business environment. Various rules and policies of the UK
can affect the business. In present context it has been
observed that managers of Unicorn Groceries will have to
effectively go through political conditions of a country
before planning any new ideas. It can be said that the
political intervention in businesses in the UK and the city
of Manchester is minimal. Hence, there would not be any
significant impact of political factors on the organization.
Economic: It includes various economic factors such as
the current state of the economy of that country,
exchange and inflation rates and the disposable income of
customers. In relation to Unicorn Groceries, it has been
observed that managers will have to consider certain
economic elements so that they can decide which policies
can be adapted in their organisation.
Social: Various elements in context of social factors are
level of health, educational backgrounds, growth rate of
population, religious and social beliefs of people etc.
Managers of Unicorn groceries will need to examine
cultural and social elements before adopting any changes
in their production processes or products they sell.
Technological: Technological factors as the name says
refers to advancements or innovations in technology. For
example whenever a business wishes to adopt a new
technology they need to first check whether it will be
successful or not. Managers of Unicorn will have to
evaluate various tools and techniques before choosing any
one best method. This will be helpful as it will provide a
competitive advantage to their company.
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2.2 Summary of the results
The PEST analysis had pointed towards some important considerations that the Unicorn Groceries
would have to maintain. In regards to the political factors there are nit many hindrances that can
affect the operations of the company. The economic elements to be considered are the taxation
aspects affecting the retail businesses across the UK. The socio-cultural aspects that would affect the
organization are the growing trend for quality product consumption among the people. The next
most important aspect are the technological factors that affect the organization. The latest in
technology have to used that can help customers get the exact commodities that they would like to
have.
Another important variable in this context is the competitor
analysis. It is basically a tool which states the strategies and
policies considered by the competitors or their method of doing
business operations. It is basically an in depth analysis of a
competitors state. As a result, the managers of Unicorn have
chosen Porter's Five force model.
2.3 Analyse gaps in the market for potential products.
Case Scenario: This report has been framed base on a
supermarket chain store of UK named as Unicorn groceries.
This organisation was basically chosen so as to evaluate the
impact any new development idea or plan has on small and
medium sized business concerns.
Gap analysis is an important tool which examines differences in
performance of business along with software applications. It
helps in determining whether goals and objectives of a
business are being met or not. It is an essential tool that helps
in comparing present and standard performance. Gap analysis
in context of Unicorn was considered so as to achieve the
following benefits.
 Finding the scope of development by launching or
innovating new products and services.
 Gap analysis also benefits in finding new and
emerging trends that are present in current market.
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By conducting a gap analysis business owners come to known
about current market scenario and trends. Also it helps in
examining what technology or tools will be beneficial for growth
and development of a business. It is basically a 3 step process
which includes analyse the current state of a business along
with identifying the ideal future state. Last step in gap analysis
process is to find effective tools and techniques that help in
bridging the gap.
2.4 Gap Analysis of Unicorn
Current state Future state Gap
description
Next step
The target
mission and
vision
statement for
the company
are set to
tackle the
current
challenges in
the retail
grocery
markets of
the UK. The
processes
that the
company
would like to
improve are
the supply
line for the
organic food
products.
Additionally,
the
organization
would like to
improve its
product
offerings.
In the future
the company
would like to
target the
growing
number of
health
conscious
people across
the UK. The
company
would like to
increase sales
by 150% in
four years’
time. The
company
would like to
improve their
product
offerings by
100%.
There is a gap
that exist in
the current
supply line
that need to
be addressed
to achieve the
future targets.
The gap that
has been
identified is
the number of
effective
suppliers. The
current
suppliers are
not many and
do not have
the necessary
potential to
improve the
supply rate.
Hence, new
suppliers
would be
required.
New suppliers
are required.
More
essential
interactions
with the farm
communities
are required.
There should
be more
effective
interactions
and business
relationship
development
with the
organic
farmers.
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2.4 Analyse target markets for a business venture.
Target market is an important key word which states or defines
a specific and defined customer segment within the serviceable
market of business. Defining a target market helps a business
concern in providing an easy decision regarding market
position (Cosenz, 2017). By adopting
this approach small scale business concern such as Unicorn
gain an advantage in competing with large scale business
concerns. Defining a target market is a quite complex process
and infuses a number of steps such as segmenting the market,
identifying USP, analysing or examining customer base along
with analysis of competitor's customer base as well. Also there
are a number of factors that affect analysis of target market.
These factors have further been stated as under:
Socio economic: Factors that are used to examine
situations or trends that are prevailing in a society are
referred to as socio economic factors. All these factors are
quite interrelated to each other. For example; Income of
an individual determines his spending power.
Age: Age is another key factor that affects target market.
For example business concerns that deal in manufacturing
toys will target customers within a group of 0-10 years.
Gender: Another significant factor in this context is
gender. It examines whether a business concern targets
male population more or female population. For example,
cosmetic brands such as Maybelline, L’Oreal attract the
female crowd more as compared to the male crowd.
Hence, it can be said that the most important factors that
have been identified for the target market are income, age
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and gender. In this case the socio-economic background of
the people need to be middle to upper middle income group.
The age that has been considered to be effective in terms of
the target market of the organization is between 25 to 40
years of age. The gender in this case that would be given
more preference are female. The female customer base are
more likely to take interest in organic food products. Thus, it
would be fair if the company creates the market strategies
considering these factors.
3.1 Develop the mission, vision, aims and objectives of
the business.
Case Scenario: This report has been framed base on a
supermarket chain store of UK named as Unicorn groceries.
This organisation was basically chosen so as to evaluate the
impact any new development idea or plan has on small and
medium sized business concerns.
In present context Unicorn is a small scale business concern in
UK which operates in grocery or retail sector (Burns, 2017).
Various key terms such as aims, objectives, vision, mission has
been mentioned as under:
Vision: Vision of Unicorn grocery is “To enhance their
customer base by providing excellent quality goods and
services.”
Mission: Mission of Unicorn Groceries is “To maintain a
stable brand image in competitive market against its rival
firms.”
Aims: In this context main aim of Unicorn Groceries is “To
be a leader in retail sector in context of small and medium
firms in UK.”
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Objectives: Objective is something that a company
wishes to achieve within a specified time frame. In context
of Unicorn its objectives is to increase its sales by 20% in
2 months (Rakićević, Omerbegović-Bijelović and Lečić-
Cvetković, 2016).
The mission vision and values were developed considering the
value of work that the organization wanted to partake in the
future. The mission has been developed keeping in mind the
future prospects of healthy organic food considering the
changes in the mind of the UK publics. Excellent quality food is
something people are more inclined towards buying in the
midst of the low quality products that are chemically enhanced.
Thus, the value of the product would be determined by the
future market trends. The objectives encompass all the major
achievements that the organization would like to make in the
near and distant future. This brings forward the most important
things that the company would like to achieve in course of
better development and growth.
3.2 Interpret external factors to justify need for your
business product.
Factors that are present outside the controlling of a business
environment are referred to as external factors. External
factors are generally examined or evaluated by conducting a
PEST analysis which has further been stated as under:
Political factors: In context of UK political factor plays a
quite significant part as political stability happens to be a
power or strength of a country. In context of Unicorn
entrepreneurs will need to assess political factors so as to
achieve benefits from political conditions.
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Economic factors: Economic combination or landscape
plays a quite important role in PEST analysis. It includes
various elements such as economic rates, inflation
deflation rates, GDP etc. All these factors play a quite
important role in planning a new business plan or
strategy.
Social factors: UK has a quite large consumer market
base. This lays a quite significant impact on businesses
and their growth. Also these factors lend various growth
opportunities to business concerns and help them in
enhancing their growth and profitability (Jansen, 2017).
Technological factors: UK happens to be most
economically and technologically developed economies f
the world. London happens to be a hub for technological
and economic advancements. Using new and innovative
tools and techniques helps in providing a large number of
growth opportunities to entrepreneurs of small scale
business ventures in UK.
Another important external factor measurement that can be
utilized is the Porter’s five forces to determine the essential
factors of the external environment for the organization.
Customer bargaining power- the bargaining power of the
customers are significant as many of the current firms are
providing organic food values to the customers.
Supplier bargaining power- The supplier bargaining power is
medium. There is high demand for organic produce from
many of the newer companies. The bargaining power of
suppliers are steadily increasing.
Competitors- The main competitors are the large
organizations that are operating in the retail business. The
competing firms are always looking forward to innovate and
grow.
Threat of new entrants- The threat of new entrants are large
considering the organic food businesses. Newer companies
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are rising and providing better organic foods. Some of these
organizations are directly linked with the large greenhouses
in the country.
Threat of substitute products- The threat of substitute
products are low as the product itself is an alternative to the
other common products that are available. The threat of
substitute products are low for the business.
Hence, it can be said that the larger problem issues are
pertaining to the competitors, the emerging organizations
and the suppliers.
3.3 Specify the business product to meet needs.
In context of Unicorn, it is a grocery store which provides goods
and commodities of retail sector. In the present scenario
Unicorn is planning to launch a new and innovative product
Choco Latte which is a combination of cold coffee and
chocolate shake. Various factors that were considered while
planning for this product are: Purpose: Main aim of entrepreneurs behind innovating or
bringing in this product is to enhance their loyal customer
base and attracts kids towards their brand (Stenholm and
Renko, 2016).
 Pricing: Price of this product is kept quite low so that
customers are willing to purchase this product and try it.
 Target Market: In context of target market,
entrepreneurs right now specifically concentrate on age
groups 5-25 years as this product is a chocolate based
drink and is expected to attract younger generation more.
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3.4 Propose business structures and systems that will
deliver business aims and objectives.
For effective achievement of goals and objectives, various
factors such as business structures and systems have been
stated as under:
Organisational structure: Organisational structure
refers to a system that outlines how an activity is to be
undertaken in a business concern. It also determines the
flow of information. In context Unicorn managers follow a
functional organisation structure. The organizational
structure in Unicorn is mechanistic. This means that a
single flow of command is utilized in decision making. This
would help to keep a steady flow of command that can
help to better integrate the functional attributes of the
organization.
Resource management system: It is a solution which
helps in efficient management of non-mobilising handling
resources. An example of an effective resource
management system is airline ticket counters, Kiosks
operations systems etc.
Communication and customer service:
Communication is a process which deals with transfer or
exchange of information. Entrepreneurs in Unicorn adopt
written communication method for exchanging
information in their business concern and also serving
customers as well (Burns and Dewhurst, 2016).
Technology: Technology is a quite broad term which
explains new and innovative tools and techniques that can
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be used for undertaking business operations. Unicorn uses
new and advanced tools and techniques for achieving
effectiveness in business operations.
3.5 Produce business planning forecasts based on
targets.
Business planning forecasts is an effective tool which explains
various opportunities that may be available to business
concerns in near future. There are a number of ways forecasts
can be explained.
Financial forecasts: It is an important tool which
which refers to an estimate of financial outcomes
that may occur in future in a company. This greatly
helps in budgeting and valuation of a business. The
financial forecast method that would be utilized by
Unicorn is annual growth forecast. Through this a
projected revenue growth mechanism would be
created to understand the value it provides to the
organization. The role of Unicorn would be to align
the growth prospects with their functional abilities
and enhance their performance positions. The
benefits that they would receive are being better
prepared for the future challenges that may arise.
Physical forecasts: Forecasting that is based on
geographical divisions or factors are referred to as
physical forecasts (Scarborough, 2016).
Sales forecasts: It is an important forecasting tool
which explains future opportunities that may be
available for business entities in sales . Companies
may even use past sales data as well as economic
trends as well.
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3.6 Identify business responses if targets not met.
If any business concern is not able to generate sufficient
amount of funds then there may be a number of responses
which a business may have to face such as insolvency,
bankruptcy, etc. Also if a business venture wishes to expand its
business operations then they will have to further arrange more
amount of funds for achieving growth of their business
operations.
Insolvency: It is a state in which a business official
is unable to pay debts of a person or a company.
There are basically two forms of insolvency namely
cash flow insolvency and balance sheet insolvency.
This is one of the options that the company would
consider if the targets are not met. The organization
would rather go for a balance sheet insolvency.
Bankruptcy: It is an important medium which states
that a person has run into losses and is not able to
pay his debts any further. It is a condition that is
imposed by court of law.
If the targets are not met, the companies can adapt new
strategies to re-market their existing products. Moreover, the
company can introduce newer products to gain better
acceptance in the market.
4.1 Pitch for funding for a business proposal
A business proposal contains ideas of an entrepreneur
which they promote in front of investors so as to get funds
(Burns, 2017). For pitching a business proposal various
points should be followed by the business person such as;
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 Business person should prepare an effective presentation
which provides support to them and helps in impressing
their investors.
 They should be well versed and well prepared and should
study each detail of the business idea properly. It will be
helpful in case the clients convey any questions regarding
their business ideas.
4.2 Present documentation to support your pitch.
While pitching a business idea entrepreneurs or
businessmen can even take support by presenting certain
important documents and tools such as vision mission of
the business idea, growth prospects regarding business
ideas etc (Cosenz and Noto, 2018). Businessmen can even
provide details regarding forecasts and what they wish to
achieve in their near future. This will be quite useful as
investors will feel safe and secure while investing their
money.
CONCLUSION
From the above mentioned report it has been concluded that
planning a new business venture is quite an important process
which states various ways and processes that help in
developing a business plan. This report encloses PEST analysis
of target market which helps entrepreneurs inexamining
various ways in which effectiveness in a business can be
achieved. Also this report contains vision mission and aims and
objectives of a business concern along with various types of
forecasts and help in effective business growth and productivity
enhances. Finally, light has also been thrown on identification
of business responses along with pitching a business proposal.
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REFERENCES
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management: The entrepreneur’s roadmap. Rutledge.
Honig, B. and Hopp, C., 2016. New venture planning and lean
start-up activities: A longitudinal empirical study of
entrepreneurial success, founder preferences and venture
context. In Models of start-up thinking and action: Theoretical,
empirical and pedagogical approaches. (pp. 75-108). Emerald
Group Publishing Limited.
Birley, S. and Stockley, S., 2017. Entrepreneurial teams and
venture growth. The Blackwell handbook of entrepreneurship.
pp.287-307.
Cosenza, F. and Noto, G., 2018. A dynamic business modelling
approach to design and experiment new business ventures
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Scarborough, N. M., 2016. Essentials of entrepreneurship and
small business management. Pearson.
Futterer, F., Schmidt, J. and Heidenreich, S., 2018. Effectuation
or causation as the key to corporate venture success?
Investigating effects of entrepreneurial behaviours on business
model innovation and venture performance. Long Range
Planning. 51(1). pp.64-81.
Cosenz, F., 2017. Supporting start-up business model design
through system dynamics modelling. Management
Decision. 55(1). p.57-80.
Burns, P., 2017. New venture creation: a framework for
entrepreneurial start-ups. Palgrave.
Rakićević, Z., Omerbegović-Bijelović, J. and Lečić-Cvetković, D.,
2016. A model for effective planning of SME support
services. Evaluation and program planning. 54. pp.30-40.
Jansen, W., 2017. New business models for the knowledge
economy. Routledge.
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Stenholm, P. and Renko, M., 2016. Passionate bricoleurs and
new venture survival. Journal of Business Venturing. 31(5).
P.595-611.
Burns, P. and Dewhurst, J. eds., 2016. Small business and
entrepreneurship. Macmillan International Higher Education.
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