A well written, detailed assignment which meets the criteria for P1 P2 and M1 - Unit 36 Starting a Small Business. BTEC Level 3 Extended Diploma in Business. P1 - Present the initial business idea using relevant criteria. P2 - Explain how to identify the target market. M1 - Explain methods used to ...
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Unit 36 - Starting a Small Business
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Conor Cunningham P1 P2 M1
P1
Introduction
My business idea is a frozen yoghurt, fruit shake and detox bar named ‘Frozo’ which will be
situated on Botanic Avenue in Belfast, Northern Ireland. I decided on this business idea as I
feel there is a gap in the market for this business in this specified area. Frozen yoghurt, fruit
shakes and detoxes have become extremely popular with people of all ages, particularly the
thousands of students who live within a two minute walk of Botanic Avenue. There is no
other business as specific to this in the area and there is definitely a market for this start up.
This report will present the initial business idea, an explanation of how I will identify the
target market for this business venture, and an explanation of methods used to identify the
target market for the proposed business.
Type of business
I decided that my business would be a new start up business. This will involve starting from
scratch with a way of producing existing goods and services more cheaply and with more
range than any other business in the same market. New ideas will also be explored as the
business grows. Starting a new business will take time and an extensive amount of market
research. This will help me explore the interest of customers in Frozo and the opinions of
potential customers of this new business opening up in Belfast. Starting my own business
allows me to be creative and put my own ideas into practice. There are no predetermined
formulas or rules to follow; it is much less restrictive than a franchise or purchasing an
existing business.
Once the business is launched, I will carry out further research to test customers’ reactions
and this will help me identify areas for improvement within the business and help me
develop ways of building the business in the future. Frozo – being a new start up business –
will need significant promotion so that customers become aware of the brand and the
products and services in which it provides. Starting a new business involves most risk as the
business is not already established. However, for me, I feel that this business has the
capacity to do extremely well and that the option of starting a new business has the
potential to achieve high profits and generate a significant deal of personal satisfaction.
When researching a business idea, I also had to consider other types of businesses. I carried
out research into purchasing an existing business and potential franchises. Buying an
existing business would have an already established presence with an existing customer
base. However, if I decided to make changes to the operations of the business, would the
customers find this unfavourable and go elsewhere to a competitor? Furthermore, would
existing employees like change? These areas interested me and I decided that I would go
against the idea of buying an existing business as I wanted to put my own ideas into
practice.
With purchasing a franchise, training is provided for all staff, there is a guaranteed supply of
products and chances of the business failing are greatly minimised. However, would I take
,Conor Cunningham P1 P2 M1
pride in this type of business? There would be a lack of control over the business, a
proportion of the profits would have to be given to the franchisor and I would have to
follow a set structure of rules and guidelines. After an evaluation, I decided to start my own
business as I had full control, received all profits and got to do it my way which would give
me more self-pride and determination to make my business work and succeed.
Aims and objectives of the business
Business aims and objectives are critical in the success of setting up a new business,
enabling the progress of Frozo to be measured and monitored. I set an aim of my business
which sets out clearly what my business is trying to achieve and why it is being set up. The
aim of Frozo is “To establish Frozo as the local leading source of healthy energy in the form
of fresh fruit, frozen yoghurt and detoxes with a dedicated commitment to the health of the
people of Belfast.”
This aim will be achieved through my business objectives. These objectives are specific to
my business, are measurable, achievable, realistic and time-able. My business objectives
include;
Carrying out market research
Searching for the perfect location for my business to be located
Carrying out a relevant marketing campaign
Setting financial objectives as to when the business will first break even and make a
profit. For example, to break even within the first 2 years
Planning how customer retention will be achieved
How cash flow will be maintained
Business planning
Business planning is crucial in the success of any business and I will ensure my business has
a detailed plan to maximise its success. My business plan will include;
A marketing plan. This will help me outline the advertising and marketing efforts for
my business and the marketing plans for the future.
An operating plan. This will help me set strategic goals and objectives to tactical
goals and objectives. It will help me plan how my business will operate and where I
want Frozo to be in the future.
Financial forecasts. This can help me predict future business activities for Frozo. I can
also use financial forecasts such as a cash flow forecast, a balance sheet and profit
and loss sheet to determine future trends in sales performance, finances and
customer behaviour.
Sources of finance. For a start-up business, capital is limited. I will have to consider
the possibility of a bank loan, a bank overdraft, business angels and personal
sources.
SWOT analysis. Looking for the strengths, weaknesses, opportunities for growth and
threats to Frozo will help my business improve and grow at all times. This will be
analysed very carefully and thoroughly.
, Conor Cunningham P1 P2 M1
My business plan for Frozo will consider the whole picture. To ensure I maximise the success
of Frozo, my business planning will be monitored, reviewed and updated regularly to ensure
I keep up with the ever-changing business environment and to ensure I keep up with
changes in the market.
Attractiveness of idea
The idea of Frozo particular appeals to me due to its attractiveness and the gap in the
market that exists for such a business in this area of Belfast. The total UK market for fruit
juices, energy and juice drinks grew in value by an estimated 17.1% between 2007 and
2011, while volume sales increased by 7.4%. (https://www.keynote.co.uk//market-
report/drink/fruit-juices-energy-juice-drinks)
These statistics speak for themselves and prove to me that there is certainly a demand and
opportunity for this business idea; it’s just waiting to be availed of.
Through research I’ve learned of three main competitors to my business;
Slims Healthy Kitchen (Belfast)
Zumo Juice Bar (Belfast)
Xpress Juice Bar (Belfast)
Customers will be encouraged to come back to Frozo in a number of different ways. Firstly,
the excellent standard of products and services on offer will ultimately make customers
want to return. The comfort of the store and the friendly atmosphere will be a place for
customers to relax and share happy times with family and friends; in a healthy environment!
In addition to this, Frozo will offer loyalty cards. When a customer purchases a Frozo five
times, they receive a free item of their choice. The collection of stamps is both fun and
addictive for customers alike and is a fantastic tool for customer retention. This also
encourages customers to be loyal.
It is imperative that the needs of the business and my own personal needs are correctly
balanced. I will be putting a lot of time into this business to ensure it is launched and
operates in the most efficient and effective way as possible. To achieve a healthy work/life
balance, I will ensure that I have an appropriate amount of staff to help within the store. I
will also allow for family and leisure time outside of my working hours to ensure I do not
become over-stressed as this can bring negativity and detrimental effects about my
business. Business support systems will also be in place to help me with billing & charging,
customer management, product design & management, sales & marketing and orders.
Checking profitability
In order for Frozo to continue to have success over a long period of time, it must be a
business which is profitable. Profitability is the ability of the business to generate revenues
that are greater than the costs it incurs. Any profit which Frozo makes wont all go directly to
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