Impact of Regulations and Economic Forces on Opening a Coffee Shop

This essay explores the regulatory and economic forces influencing the decision-making process for opening a coffee shop near the seashore in Sydney. The concept involves a uniquely designed wooden-cabin café with a selfie zone and a game parlor. The essay discusses the importance of access to credit and resources, demand for products and services, and domestic economic conditions. It further examines legislations from local, state, and federal governments, including licensing, registration, and compliance with the Federal Register of Legislation. Key economic concepts like inflation, supply and demand, and market structures are analyzed for their relevance to the new venture, emphasizing the need for market research and strategic pricing. The essay concludes that entrepreneurs must consider economic, legislative, and political factors to ensure the smooth operation of their coffee shop.

Running head: REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
Name of the Student
Name of the University
Author note

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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
Abstract
The purpose of this essay is to throw lights on the potentialities of a start-up idea of
opening a café, near seashore in Sydney. It will be a wooden-cabin café decorated with
colourful gridded walls, wooden show pieces and handcrafts. There will be a selfi-zone in the
café. Again, there will game parlour for children. The long casements of the café will provide
the customers the beautiful view of the aqua-marine water. This paper also focuses on the
government regulations that one has to go through before opening a café. In this context this
essay also discusses about economics concepts like-interest rate, trade, inflation supply and
demand, elasticity, the market structure and planning.

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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
Regulatory and economic forces affecting the decision making
The regulatory and economic forces that may influence the decision making for the
opening of the coffee shop are discussed below:
Access to credits:
Access to the finance is one of the essential regulatory force. Experts considers credit
as a viable source for enhancing funds for the investment in case of a new business. Several
studies have been revealed that, often small and medium scale business face problems
regarding this regulatory force (Bodle et al. 2018). The reason behind it, is the lack of fixed
assets owned by the startup businesses which becomes a hindrance in their way of getting
access to credit from banks or other financial institutions (Founder's Guide, 2019).
. Access to Resources
Availability of resources can be considered as one of the major regulatory force
to the fledgling. Resources include a wide range of elements, essential for carrying on
the operations of a business. For example- fuel, raw materials, technology can be
considered as resources for a business (Eniola Entebang 2015). In case of a coffee shop,
availability of good quality coffee at an affordable price availability of the elements of
a modular kitchen at a pocket friendly price are the essential resources. Again, impact
of sanctions or political instability can be considered as resources for a new business.
It is true that resources regulate a business, but the availability of resources varies
depending on monetary or economic constraints, political scenario, environmental
circumstances (Business, 2019).

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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
Demand for products and services
Demand for products is another regulatory force that plays a vital role in case
of a start-up. In case of the coffee-shop the demand will be estimated by the income,
tastes and preferences of customers. Hence, in order to create or enhance or created
demand for the coffee shop the entrepreneur of the coffee-shop should be able to
anticipate the choice of different group of customers. For example, in order to satisfy
the teen-age customers who are students they should make provision for combination
of beverages and snacks available at a cheaper rate, they should prepare a game parlor
inside the café. The constraint in case of this regulatory force are the lack of research
and wrong anticipation on the part of the entrepreneur (Curtis 2016).
Economic conditions
Economic conditions in the domestic market is also an essential regulatory force. The
entrepreneur should be well aware about the economic conditions in the domestic market.
This requires research about the competitors that exist in the domestic market, their
marketing strategies, the services offered by them, their probable budget and so on. In case of
starting a coffee shop the entrepreneur should also research whether the services offered by
the existing cafes in the locality can be considered as ‘perfect substitutes’, how to make the
customers perceive that the services provided by the new coffee shop will be different from
the other coffee-shops in the locality. The constraint in the case of this regulatory force may
be the adoption of faulty and time-consuming research methods.

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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
Legislations from local government
One of the Key Piece of Legislation of the laws implemented by the local government
is-licenses, permits and regulatory requirements (Knox 2016). The licensing, permit or the
requirements for the registration of the coffee shop will vary depending on the type and
structure of the business, its location as well as the number of staffs employed in the business.
For the license permit, the following things need to be done:
Contact local council
There are local, state as well as federal councils. Each of them has different rules and
regulations. The entrepreneur or the owner of the coffee shop should contact the local council
with the help of the local government directory and should discuss about zoning
requirements, laws, issues related to the start-up. Before opening the coffee shop, the
entrepreneur should gain approval from the local council (Business.qld.gov.au, 2019).
Registrations
The trademark, logo, and domain name of the coffee shop should be registered to the
local government. The entrepreneur should also register the business for tax
(Business.qld.gov.au, 2019).
For this purpose, the local government of Australia have established Australian
Business Licence and Information Service. The entrepreneurs can find specific licenses and
registration forms. Licences, permits and regulatory requirements. Again, those who are
unable to take decisions regarding their start-ups and confused about the legal procedures will
easily access information about licenses council approvals and other regulations. This will
assist the owner or the entrepreneur of the coffee shop to be aware of the legal procedures he
or she has to undergo.

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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
Legislations from State government
One of the Key Piece of Legislation is-registering the business to the state
government.
Registration process for the coffee shop, to the state government, will include registering a
business name for a particular tax slab depending on the type of the business. For example,
the tax slab is different for an automobile company and for a restaurant or a coffee shop
(business.gov.au, 2019).
Having ABN
Through the procedures of registering the business the start-up, which is a café here,
will receive a unique number called-Australian Business Number.
Goods and Services Tax (GST)
Just after the registration the name of the coffee shop will be enlisted under categories
of companies that pay Goods and Services Tax(business.gov.au, 2019).
a tax file number (TFN)
Depending on the type and structure of the coffee shop, the taxes will be determined
and a unique tax file number will be generated (business.gov.au, 2019).
Pay as you go (PAYG) withholding.
At the time of making payments to the employees or the contractors of a small
business the entrepreneur of the business should withhold an amount and give it to the
Australian Taxation Office (ATO) at specific intervals, regularly. This is called Pay As You
Go (PAYG) withholding by the ATO (business.gov.au, 2019).

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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
Legislations from Federal government
One Key Piece of federal legislation, is Federal Register of legislation which is
considered to be the authorized whole of government of Australia created for the
submission of the documents related to the Commonwealth legislation for start-ups.
Office of Parliamentary Counsel of Australia manages the Legislation Register as per the
regulations of the Legislation Act. This act has made it compulsory to keep a track of all the
small and medium scale business including the restaurants and cafes of Australia
(Australia.gov.au, 2019).
Three economic concepts relevant to the new venture.
Inflation and supply and Demand are two important economic concepts which are
relevant to the new venture of opening a coffee shop. Inflation refers to the continuous
increase in the price level of an economy. If prices rise continuously, the cost of the raw
materials will increase. Along with this, collection as well as maintenance of the resources
will be expensive too. This will lead to an increase in the production cost, which will, in turn,
increase the price of the final product, which is coffee in this case.
This will impact both the demand and supply of the services provided by the coffee
shop. The increase in the price of coffee will lead to a decrease in demand. Again, if we look
at the supply side the increase in the price will induce the producer to produce more to earn
more profit. Eventually, there will be excess supply and the price will decrease leading to an
increase in the demand for the services provided by the coffee shop (Hillary 2017).
Market Structures:
Market structure is another economic concept, which has a high relevancy with the
new venture of opening a coffee shop. The market structure of a business can be derived
taking into account the following factors.

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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
Degree of market competition:
The level of market competition in the beverage industry of Australia is respectively
higher than that of other industry, because coffee industry is characterised by a large number
of firms competing with each other. The marketing strategy of the coffee shop should be
formulated depending on the degree of competition in the market.
Barriers to market entry:
The barrier to entry of new companies in the beverage market is respectively lower
than that of the other markets. In order to create a strong brand image of the coffee shop the
owner should focus on the tactics of brand recognition, and should possess a sound financial
condition for investment.
The marketing structure also depends on the nature of the product that is served by the
coffee shop, the variation in the product served by the shop and the advertising costs.
Pricing:
On the other hand, the service sector of Australia is characterised by a high degree of
competition. This is the reason why the costs of different types of coffees and snacks are
determined independently by the cafes. Hence, there may be served third degree price
discrimination in the service sectors of Australia. The entrepreneur of the new coffee shop
should conduct a market research before adopting pricing strategies of third degree price
discrimination.
Conclusion:
Hence, in the conclusion, it can be said that, the owner or the entrepreneur of the
coffee shop should take into account several economic, legislative as well as political factors
for carrying on his or her business without any obstacles.

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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
References
Bodle, K., Brimble, M., Weaven, S., Frazer, L. and Blue, L., 2018. Critical success factors in
managing sustainable indigenous businesses in Australia. Pacific Accounting Review, 30(1),
pp.35-51.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Eniola, A.A. and Entebang, H., 2015. Government policy and performance of small and
medium business management. International Journal of Academic Research in Business and
Social Sciences, 5(2), p.237.
Curtis, V., 2016. Small Business For Dummies-Australia & New Zealand. John Wiley &
Sons.
Knox, A., 2016. Coffee nation: an analysis of jobs in A ustralia's café industry. Asia Pacific
Journal of Human Resources, 54(3), pp.369-387.
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REGULATIONS IMPACTING THE OPENNING OF A COFFEE SHOP
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