Small business management

04-29-2018

Strategy of the business

A business concept strategy that would compete with other coffee shops in the region requires aneffective business plan to identify whether the idea of opening this coffee shop in the locality is a feasible idea. This coffee shop,therefore, can take the following aspects into account as a strategy for business concepts that will allow the business to effectively compete with other coffee shops in the region.

Defining the business and its vision: This would be the initial step of the business. The business will identify its vision so as to establish a driving force of the business. In its vision, the business would take into account it customers, product, and services it will offer to maintain competitiveness. This business will further consider strategies for growth and available chances to ensure primary competitive advantage in the market (Kim and Mauborgne, 2015).

Setting goals: the coffee shop will pen down a list of goals accompanied with necessary actions required to achieve these goals. These list of goals will aim to word achieve one major goal of the shop which is to be to be promote competitiveness of the shop within a span of five years. The goals will further aim at attracting customer.

Understanding the customers: the business concept of the coffee shop will consider the relationship and the interest of the customers.The business will therefore, aim at paying significant attention to the wants of the customer and in meeting their needs

Product differentiation: The business strategy of the coffee shop will be to differentiate its products from the products given by other coffee shops in the region. This coffee shop,therefore, willfind unique ways of providing a different brand of coffee to its customers. Unlike most of the coffee shops in the region, the shop will consider prepare organic coffee and coffee products. This because the business identifies that most of the contemporary population are health conscious and therefore organic coffee will best satisfy the need for healthy living (Hutt and Speh, 2017).

Pricing strategy: The business will consider a pricing strategy as a means of maintaining competitiveness among other coffee shops in the region. While maintaining quality, the business will ensure that it customers are not exploited and that its products are not too high for the customers. The business will ensure that, as much as the customer will have to incur cost, what they receive from in return must ensure utility. The business will, therefore, encourage cost leadership. Cost leadership focuses on obtaining high-quality raw materials at the lowest price as possible. The business will also rely on highly qualified professionals to makethe products. This will,therefore,result in the development of high-quality output at the lowest production rate. This, in turn, will helpthe business sto serve high-quality coffee at the lowest price. This will help the business to control larger market share and gain competitive advantage over other coffee shops.

Whether to open a new business or purchase an existing one

It is best open a new business other than purchasing an existing one. Starting a coffee shop from scratch may be very difficult and challenging. Creating customer base, hiring new employees and developing a customer base that will guarantee effective cash flow makes starting a new coffee shop very difficult. Despite such challenges, in opening a new coffee shop still remains to be the best option because of the advantages

Starting anew coffee shop is e easier financially because it requires small amount of capital and may take a few days to complete. Purchasing an established coffee shop is relatively quiet challenging because of the large capital required. Purchasing an existing coffee shop means that, the cost of all equipment,employees and any other object must be incurred. This may be relatively costly than starting anew business which will grow as the business continues to thrive in the market.

Opening anew coffee shop other than purchasing an existing one allows for consideration of important aspects that will determine the success of the coffee shop later in the market; for example, opening a new shop allows for development of effective strategy of business concept that would help to identify whether opening the coffee shop is a feasible idea.

Starting a new coffee shop will be more advantageous than purchasing an existing one because of the clean slate. Starting anew business means that the business brings new employees and has a new name. This will allow the business to grow towards the direction preferred by the owners. It provides an opportunity for the business to grow in the image of the owner without the challenge of dealing with the previous track issues such as poor reputation.

Starting anew business will also allow the management of the coffee shop to hire employees that meet their standards. This will save management from dealing with issues of previous employees track records that would impact the success of the shop if an existing business was purchased. The management of the shop will have the advantage of employing workers who they feel will meet the objectives of the new shop right from the start.

Opening a new business allow for pinpointing the exact geographical location for the business. Poor selection of where to put a business will automatically result to failure of the business. It is therefore very important to identify the best and a perfect place to start a coffee house. Some of the important factors to consider while opening a coffee house include; traffic in the region, accessibility of the premise, room for future growth, available competition and security of the location. Starting a new business will make it possible for identification of the right place to situatethe business which canbe challenging while purchasing an existing coffeeshop.

Starting a new coffee shop will allow for implementation of ideas without franchise restrictions from the past business. On the other hand, implementing new ideas may be very challenging especially when you buy an existing business because of the preferences held by the customers of the previous business. Starting anew coffee shop will therefore advantageously allow for implementation of new businessideas freely.

Ownership of the business

Considering the fact that starting such a business require significant amount of capital which are not readily available, the business will be a partnership. This business will be owned by three partners who will contribute equal amount of capital for the business to start. This kind of ownership is preferred because acquiring resources to startup such businessis challenging individually. The three owners of thebusiness,therefore, will contribute equally towards raising the capital. The partners will also share their profits or lases incurred by the business equally(Kalanwa, 2014). 

Outline of Businessplan of the coffee shop

The business plan for the coffee shop will cover four important chapters

Chapter one (Executivesummary): this will provide brief description of the business cluding the name, regional location where the business is situated. It will also explain the mission, vision and the objectives of the business

Chapter two (Summary of the company): other than providing brief statement of how the company is to be stared, this chapter will also include the flowing subchapters:

Ownership of the business: this will expound on how the coffee shop is owned

Startup summary: this will explain the expenses and capital required to start the business

Company locations and facilities: this will explain where the business will be situated. It further explains the possible landmark that may be used to identify the business location and routes that can be used to get to the coffee house as well as the facilities that the company including how setup will look like.

Chapter three (Products) : this chapter will vividly describe the nature of every product that the coffee shop will provide. This chapter will further explain how the coffee shop will make each of the products including the ingredients and the raw materials.

Sales literature: this will explain how the business will relevantly work towards improving it sales as the business continue to grow

Capter four (Market analysis): this chapter will provide detailed assessment of the markets. This chapter will include

Market segmentation: this will explain the segment of the total population that his particular business will target. For example, this coffee house will focus on reaching people working in offices which are located close to the premise. The business will further aim the general population who are concerned about healthy living who would want to take organic beverages.

Target market strategy: this will explain the strategy that the business will employ to ensure that it reaches the maximum population of its targeted population; for example, creating a relaxing atmosphere.

Industry analysis; this will provide detailed assessment of the beverageindustry to identify the feasibility of this business

Competition: this will provide detailed understanding about the possible sources of competition including existing and emerging sources. This section will also explain how best the company will work towards dealing with these competitors so as to guarantee the competitiveness of the business

Chapter five (Strategy and implementation summary): this chapter explains how the business will work to promote it market entry and build its market portion. This chapter also will include:

Sales strategy: this will explain how the business will sell its products to its customers and how to ensure that it increases it sales

Sales forecast:this section will provide forecast about what to expect in future. It will analyze whether in future sales may increase ordecrease and identify steps that the business will take to increase it sales.

Management summary: This chapter will explain the management of the business. This will explain the leadership organogram of the business beginning from the owners. It will look at roles of each position in the business.

Chapter six (Financial plans): This chapter will explain financial expectations of the business.It will explain the nature of sales that the business anticipates to make monthly oryearly. It further explain the steps that the business will put in place to improve its financial status as it continues to operate.

References

Kalanwa, S. C. (2014). Entrepreneur's Guide on Managing Small Business Profitably. Cork: BookBaby.

Kim, W. C., & Mauborgne, R. (2015). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Massachusetts: Havard Business School Publishing Corporation.

Hutt, M. D., & Speh, T. W. (2017). Business marketing management: B2B. Boston, MA Cengage Learning