Business plan unit Essay Example

Business plan unit Essay Example Business plan unit Essay Business plan unit Essay Essay Topic: The Birthday Party The business that will be starting is a catering business. The business will be called The Peoples Catering Co. The business will be located in a villa near Salwa Road. This is because the company can rent out a villa with a big kitchen and will be able to produce more food for the catering. The reason why I have chosen this area near Salwa road is because it is an inexpensive area and is close to the main residential areas of Qatar. Also it is a reasonably accessible area. It is an ideal location for a business because a lot of businesses are located in this area. Therefore people will come into this area. It is a main connecting road in the centre of Doha and is a main highway. The catering business will produce foods for all social occasions, such as buffets, customer required foods to order, delicacies and other foods that are required for catering. There will be some fully qualified chefs hired from Asia and India because it would make the business more profitable and more efficient service for the customers. I think that the business will succeed because there is a gap in the market for this type of service. This is because there are few places which supply this service in Qatar. The places which supply this service are the hotels around Doha. I think that the service provided by the hotels would not be as good as a private small business catering company. This is because big businesses dont need every customer because they are so big around the world where as a small business needs every customer it can get. Another reason is because it is in high demand, this is because people in Qatar entertain a lot and they usually require some from of catering, also there is a limited amount of catering companies in Doha. Also other factors which help in this in that people in Qatar have a high level income amongst the Expatriates and the Qataris. the catering in Doha at the moment Is only supplied by hotels. I think this is because Qatar is such a small place that people may not have thought to open a small catering business. This is a mistake because I believe that people would be more inclined to use a private catering business other then a hotel. This service is also expensive because there are not many places to go and the hotels charge unreasonable prices because they are so high in demand and there is a limited supply. People do not have the time to prepare meals and food for guests when they are having a social event. This means that they are resorting to using catering companies for preparing and delivering the food for the function. My catering business will be aimed at the middle to upper class people. This is because of the price that will be asked for the catering. The price range for the catering business is aiming for depends on how much food is needed to be supplied, but for the average function it would cost any where between 1000 to 2000 riyals. The service would include a variety of choices for the customer to choose from in the way of food. There will be free delivery to where the function is held by the customer. There will be help for the customer as to choosing how much food would be needed. Also the customer will have the choice of getting someone from the business to come to them to help with choosing the food. Also if the food is not to the standard the customer wishes the business will provide a 50% discount for their next order. I believe that people are more likely to use a small business caterer because the quality needs to be good in order to succeed. This is because they need to acquire as many customers as possible in order to expand. Where as a bigger catering businesses such as hotels dont need every customer to keep coming back for repeat business because they have such a large range of customers and they are also earning money from people staying in the hotel. My long term vision for the catering business is to have grown to have many offices in easy to find locations such as in shopping centers, and to be operating in many locations around Doha and in cities surrounding Doha. Aims and Objectives All businesses must consist of a mission statement this is important because it states what they are aiming to provide for the customers. the mission statement for The Peoples Catering Co. is To provide the a satisfying quality and efficient service for all customers. Aims and objectives are goals that the company sets in order for it survive and to be successful. Aims are long term goals which the business hopes to achieve in 5 to 10 years time. Where as objectives are short to medium term targets which need to be reached in order to achieve the aim of the business. In order for the objective to be successful it must follow the S.M.A.R.T objectives guide lines and in order for the objective to be legitimate and useful. If the objective does not follow this procedure it is more likely for the business to become unsuccessful, in achieving its aims. S.M.A.R.T objectives stands for: * Specific: This means that the objective is specific to what the business is trying to achieve, and so that the objective can not be misread or misunderstood. If for example a businesses aim was, to earn money by the end of the year. This is not a specific objective. It isnt even an objective. It is more like an aim because it isnt specific but is something that the business wants to have made money. It doesnt specify how much they roughly want to make, it just says they want to have made money. A specific objective is one such as by the end of the financial year the business needs to have made at least 50000 QAR in profits. This is specific because it defines and specifies how much they want to make and in what time period. * Measurable: means for the objective to have specific measurements. An example of this is one such as within 1year of trading the business needs to have made at least 10000 QAR in profits and to have paid off the sufficient amount of the loan that is needed to have been paid. This is a specific measurable objective, because it has a specific time, amount of money and is a measurable objective. Therefore the business is able to see if they are on track and heading towards meeting the objective. * Agreed: This means that the objectives have been discussed with the staff. This will help with the achievement of the objectives because the staff would have had their input. This is better then forcing the aims of the business onto the staff, because their may be more determination to help the business if the staff feel as though they are having some input into the businesses future. * Realistic: is to be set to a level that is achievable/realistic, e.g. If the objective is to make 100000 riyal in one month, this would be an unrealistic objective if the business was just starting up and was a pizza place. This is because there is a lot of pizza business that are established in Doha. Therefore it would take a while for people to want to use their pizza place because they might not know of the place and may already have a specific place in which they got to get their pizza. * Timed: is the time limit you have set to complete a task/objective by. An objective must have a time limit in order to be legitimate. An example of this is, the business needs to have paid off the loan that was consumed in order to start the business within 2 years. If it is not a timed objective then the objective isnt worth having because it does not set a rough or specific date as to when something needs to be achieved. The objectives of the business, is to have made enough profit to have paid off the loan that was received in order to start the business within 4 years. It will be dispensed on expanding the business to increase profits and then whatever isnt spent will be the employers income. The relevance of this objective is so that the business is successful. Another objective is to break even within the first year and be able to start making profit in the second year in order for the business to be successful. If this is not achieved the business is not worth running and will be shut down or sold to an interested party. Some of the aims of The Peoples Catering Co. are in 10 years to have opened up another two The Peoples Catering Co. locations in Doha and to have opened a The Peoples Catering Co. in Dubai. This is so the business would have been expanded and be operating in more then one country therefore it would achieve a higher reputation because it is operating in more then one country. Also another aim is that in five years The Peoples Catering Co. wants to have satisfied all of its customers and to have a lot of repeat business from customers. This is so the business is successful and it is cheaper to keep old customers then it is to gain new ones. The reasons why I have chosen these aims and objectives is so it helps the business to grow and increase profit margins. This is important because for the business because if they are not achieved by the business this would mean that the business is not succeeding and making enough profit in order to expand and grow. Stakeholders Stakeholders are any one who has an interest in the business whether they are customers or share holders or someone who is interested in the business they are considered to be stakeholders. There are two types of stakeholders they are internal and external stake holders. An internal stakeholder includes a person such as employees, managers, and trade unions. Internal stakeholders are people who directly deal with the company and look after its welfare and keep it running. They may have an interest in the business because they are directly linked to it and involved with it. If the business starts failing then it will effect all of the businesses employees and owners. Such as if The Peoples Catering Co. was to start failing as business then it would cause the business to be unable to afford to employee as many people as they do. This can cause redundancies, sometimes this can be avoided through starting off with a high efficiency work ethic and quality. This causes people to go to the business and can often cause the customers to return for repeat business. They can also be external stakeholders which are people such as customers, competition, the community, shareholders, government, the media, suppliers, and shareholders. They are all external because they do not have anything to do with the direct running costs of the business, but are people who benefit from the business such as gaining funds for their business to help it grow. The stakeholders which The Peoples Catering Co. have include employees, managers, and trade unions. This is important that they are satisfied in order for them to keep their interest in the business also in order to avoid problems which may be caused by them. Such as trade unions can have the business shut down in the U.K if they are not satisfying the promises which have been made and the rules and regulations arent followed which have been set by the unions. Also it is important to keep staff happy and satisfied with their work. This is important because if the staff arent enjoying and/or satisfied with their jobs then it can cause the Legal Form There are many types of business structures available such as partnership, private limited company, public limited company and sole trader are the options that The Peoples Catering Co. has. The form I have for my company The Peoples Catering Co. is a partnership. This is because it helps increase the range of skills we have as a business and we would have our specialist areas. There is more liability for the business if it is set up as a Ltd but as a partnership all the profits made are split up within the partners there will only be myself and one other owner of the business. If the company was to be set up as a private limited company all the profit would be spent on increasing the share prices this is money which the business has to put in to be shared out evenly amongst the shareholders. This would mean that all the major decisions made by the business would have to be put through the shareholders as well as through the people who are directly involved. This would delay a lot of the processes and can cause problems. Another reason why a partnership was chosen is because in Qatar you need to have one GCC resident in the partnership in order to be able to open a business. In a business there is a lot more work load and it is harder to obtain a loan because you may not have many assets in order for you to be able to acquire the loan. Also if the business is set up as a partnership the business would raise better capital then a sole trader. As a sole trader there is more liability for the owner and is not spread out between partners where as a partnership reduces the liability for each owner. It can also make decision making easier and have more ideas brought up to improve the business. This is because it is joint decisions and if an idea is brought up it can be discussed and alternated if it is wrong, this is because the other partner can pick up on what is wrong with it. There are also disadvantages of a partnership, such as the control and profits must be split between the partners. There are often arguments between partners this can cause a partner to decide to pull out of the business due to the working conditions. There is also still a shortage of capital. There is also an unlimited liability this is also a disadvantage in a small business. Also if a partner is to leave the partnership their share of the partnership must be bought by someone else or by yourself. This means that the partner who takes over the other partners half of the business may not be very qualified and know what they are doing. If you are to buy the other share of the business from the partner who has left this means that you need to obtain money from the partner in order to be able to buy their share. Personal statement: I am Jake Schober I am an enthusiastic person who likes to get things complete and on time. I also like to get the most out of life. I am big on success I will not accept failure and I will keep on trying until I get it right. I will apply this to my business so it will succeed. I have an idea and I will strive to achieve that idea or objective. When I start something I see it out till it is finished or until the objective or aim is achieved. I am customary to change and will accept things as they come. I am very good with making useful decisions for the company and overall making of decisions. All of my decisions are to help improve something such as a business. When I was working for the Hilton hotel in Perth Western Australia I upgraded the star rating to a 5* from a 4*. This was my objective when I first entered the Hilton hotel it was my aim to make sure it had made the 5* rating before my contract had finished. I achieved this objective 2 years into my contract. I had a year le ft of my contract, at the end of my 3rd year my contract was extended for 2 years. I was offered another job at another Hilton hotel but I decided to look for work else where in a different field. Then I found out about a head chef position at the Ritz Carlton Hotel Doha. I went for the interview and I got the job position. While I was working at the Ritz I was planning on opening my own business at the end of my contract. So when my contract had finished I left and now I am planning on opening my own catering business. Name: Jake Schober Address: villa 8 Al Nuajia Complex Nuajia East D.O.B: 20th July 1971 Qualifications: * Earnt a chef diploma at T.A.F.E. Western Australia from 1993 to 1996 * 1987 to 1993 earnt a management degree at University of Western Australia Work Experience: * Worked as a head chef from January 2002 to June 2007 at the Ritz Carlton Hotel Doha * Worked as manager for Hilton Hotel Perth Western Australia from December 1996 to December 2001 Market Research I am undertaking market research for my area of the market I wish to enter. This is to determine what the demand for catering is and if there is a demand. Also to find out the pricings of how much the consumers/customers expect to pay, what sort of catering customers require. Such as what type of foods such as finger foods, buffets etc. it is also to find out where the most successful way and the best places to advertise my business. It will help my business by finding out what areas in the market the business will succeed in and what the customers will prefer from the business. It will also discover if this type of business is in high demand or there is a gap in the market for it to enter in. There are two types of research primary and secondary research. Primary research is research that is conducted and specified for your business. It is important that this type of research is conducted if you want accurate facts and information regarding your business and the demand and what people would be expecting from your business. Primary research is conduct by a business or by the people or person who is wishing to start up a new business or find out progress information about the business. Secondary research is research which is conducted for another business that is in the same field of the market and/or is providing the same service. This research can be found on the internet and can be useful to find out general requirements by the stakeholders in the market. This type of research is not sufficient enough to base your businesses way of setting up and the way the service is provided. This is because this research is conducted and set up to suite another business which may not be the same as the business you are trying to set up. Therefore it is best for my business to use primary research to set up the business. This is because I am setting up my business in a country which has limited business providing the same service as mine is. This means that there would not be much if any secondary research which has been obtained by other business or supplied for the use of other people. Question Total Percentage Age Group * 10-15 * 15-20 * 20-25 * 25-30 * 30-35 * 35-40 * 40-45 * 45 and over 5 15 2 2 5 3 5 13 10 30 4 4 10 6 10 26 Gender * Male * Female 25 25 50 50 Do you Have in house parties that require catering? * Yes * No 32 18 64 36 If yes how often do you have in house parties that require catering each month? * 1-2 * 2-3 * 3-4 * 4-5 * 5 and over 17 3 2 13 10 34 6 4 26 20 What type of catering do you prefer? * Home Style * From a hotel * From a fast food outlet 24 16 10 48 32 20 Is there any specific time of year that you require catering? * Yes * No 22 28 44 56 If yes what time of year do you require catering?(you can choose 1 or more) * Holidays * Special events (such as Ramadan, eid, Christmas etc.) * Birthdays * Once a Month * Or frequently not at any specific time 20 42 36 12 35 40 84 72 24 70 Are you interested in trying out different caterers? * Yes * No 43 7 86 14 Would you use a home catering business? * Yes * No 43 7 86 14 Or would you prefer the caterer to come to you? * Yes * No 50 0 100 0 What sort of food would you purchase from a caterer for a party or social event? * Buffet * Finger food * Snack buffet 36 4 10 72 8 20 How much would you expect to pay for a fully catered function? * 500-1000QR * 1000-1500QR * 1500-2000QR * 2000QR and above 14 20 10 6 28 40 20 12 Do you watch television? * Yes * No 45 5 90 10 Do you read the paper? * Yes * No 36 14 72 28 Do you read the billboards that are up around Doha near traffic lights and intersections and on the side of the road? * Yes * No 47 3 94 6 Analysis of market research The questions I have chosen for my survey are to help work out what sort of target market my business is suited to. The results are telling me the following: 1. Gender: this was to determine which gender a catering business would appeal to. This was a 50, 50 split between male and female. This was so that there was an even number of male and females taking the survey in order for the answers to be more useful. 2. Do you have in house parties that require catering? This was to determine if people either entertain at home or go out to entertain. This showed that 64% of the people surveyed to have in house parties, and that only 36% dont have in house parties. This means that people require catering for these events, and there is an opening in the market and there is a high demand for the service which I am wanting to supply. 3. If yes how often do you have parties/functions that require catering each month? This question is to determine how high the demand for my company is each month. The results for this showed that 34% had catered functions 1to 2 times a month, 6% needed it 2 to 3 times, 4% needed it 3 to 4 times a month, 26% needed it 4 to 5 times a month and 20% required catering more then 5 times a month. This shows that my business would be high in demand due to the fact that over 46% of the people surveyed require catering 4 or more times a month. 4. What sort of catering do you prefer? This was to determine what sort of style my catering business would provide. This showed that 48% of the people surveyed preferred to have home style cooking over food from a hotel or from a fast food outlet. 32% preferred hotel style cooking, and 20% preferred fast food. This means that my business is in higher demand then what a hotel catering business and fast food businesses are. Although it is just below half the people surveyed said that they prefer home style catering it has the highest percentage of people who would prefer it over other types of catering. 5. Is there any specific time of year as to which you need catering? This question was to determine when the peak times for business are and when there is low need for catering in the market. This showed that 44% of the people surveyed said that there is a certain time when they require catering and 56% said that there was no particular time where it was needed. This means that there may be a down fall in sales in particular time of year but there is a large percentage which will still need catering during the time where others may not. This is to see if there is any specific times as to when there may be less demand and when there is higher demand. Such as if there is a specific time of year when the demand for the business may not be there. Such as in the summer there may not be many orders if any, this is because everyone leaves the country to go on holidays. 6. If yes what time of year do you require catering?(you can choose 1 or more) The question was to discover specifically which time of year catering is required more. The people surveyed could select more then 1 option therefore it gave me a broader answer and more direct rather then them having to choose an answer. The largest time for when catering is specifically required is around festive events such as Eid, Ramadan, Christmas and other festive seasons. The percentage of the people surveyed that said they specifically require it at these specific times of year is 84%. The following time is at birthdays this is a very broad criteria because birthdays occur all year round therefore business would continue all year round. 7. A6re you interested in trying out different caterers? This showed that 86% said that they would be interested in trying out new caterers this means that when the business will start trading it will be easy to gain customers because they enjoy trying out new caterers. 8. Would you use a home catering business? Also in this question 86% would use a home catering business. This is another positive for my business due to the fact that they would use a home caterer. 9. Would you prefer the home caterer to come to you? All of the people surveyed said that they would prefer the caterer to come to them. Therefore I will provide that service so I will need to purchase or rent vehicles to do so. 10. What sort of food would you purchase from a caterer for a party or social event? This showed that 72% of the people surveyed said that they would prefer a buffet style catering. Only a small minority said that they would prefer a snack buffet or finger food. Therefore my business will specialize in buffets. 11. How much would you expect to pay for a fully catered function? 40% of the people surveyed suggested that they would expect to pay between 100 to 1500qr for a fully catered function. Only a small minority said other figures that were not in this range. 12. Do you watch television? This was to determine if it was useful to advertise on television because people are watching it. This showed that 90% of the people watch television. 13. Do you read the paper? This was also to determine if it was useful to advertise in the newspaper. The results showed that 72% of people read the newspaper therefore it would also be an effective place to advertise. 14. Do you read the billboards that are up around Doha near traffic lights and intersections and on the side of the road? This showed that 94% of people did look at these signs therefore if an advertisement was to be placed on a billboard it would be effective. Competition analysis There are two different types of competitors, both direct and indirect competitors. A direct competitor is a business, company or product that is in competition with your product. That is in the same market as you. A direct competitor provides the same product or service that your business, company or product does. An indirect competitor is a business, company or product that appeals to the same target market as your service or product. It is not the same as your service or product as what you are providing but an alternative to what you are providing. An example of this is the option of going to a water park or to a theme park or a club. A direct competitor and threat to my catering business includes catering businesses such as the Marriott, Ritz, Ramada and any other hotels and restaurants and hotels which provide catering. This is because they provide the same service and are an alternate option to my business and service. Hotels such as the Ritz, Marriott and the Ramada provide the same service and are offered in the same price range of between 1000 and 2000qr. Therefore they will be more competition for my business then a cheaper option. This is due to the fact that they are trying to obtain the same target market as my business. They are all aimed at the middle to upper class market in Qatar who wishes to entertain. Other direct competitors include home cooking and take away places. This is because people may not wish to spend so much money on entertaining. The other type of competitor that exists in the market is indirect competitors. Indirect competitors are competitors who dont necessarily provide the same service but are an alternate option to the service your business. An example of this is if someone was to go away. They may choose a cruise over going to another country on a plane. This is an indirect threat because it is an alternate option. Indirect competition is one of the main threats that a business will come across especially in the travel and entertaining business. This is because there are many different options that dont provide the same service but are used for the same purpose. An indirect competitor for my business The Peoples Catering Co. includes places such as dine in restaurants. This is because they do not provide the same service but a similar service. Instead of people entertaining at home they go out for dinner. Other indirect competitors that exist for my business include places such as pubs and clubs. This is because they provide an entertainment and people who wish to entertain their friends go out to these places instead of entertaining at home. An indirect competitor for my business includes places such as the rugby club, cloud 9 and other pubs and clubs around Doha. I believe once my business is up and running and is a profitable busoiness and is acquiring good business I think that the competitors will respond accordingly. I dont believe that they will alter their prices and their way of marketing once my business has entered the market, this is because the business is only a small business and is not of a great threat to multinational companies. I think that my competitors such as the hotels may not even worry about the loss of business in the way of catering in Doha, because they are such large businesses the loss that they will be making from the catering may not make a difference in the end of the years trading profit. However if the catering businesses in the hotels are separately owned to the hotel which their premises are in I think that they may react to the up rising of my catering company. In conclusion I believe that there is a lot of direct and indirect competitors. Therefore I will need to do a market analysis every 3 or 4 months to make sure that my business is making progress and to work out when the quiet times of business are and when the business is becoming high in demand. Marketing Plan A marketing plan is used to find out if your business will be successful and to discover and explain ways of making it successful. A business plan states ways as to which the business will use the four Ps. They are Product, Place, Price and promotion. This is what a companies use as a basis for their marketing plan. The market plan has a large effect as to whether or not the business will be successful. If the market plan shows that the business will be in debt or that the ideas as to where and when the product will be placed there would be no point in trying to start up the business. This is where pricing strategies are needed, it is a way of working out different ways of pricing and marketing your product. There are many different pricing strategies available to businesses, they include strategies such as: * Psychological pricing: this is a way of making your product seem cheaper when you are only taking a small margin of the price off. For example charging $99.95 instead of $100 you are charging the same price but it does not look like $100, when actually it is. * Premium pricing: is when the product is considered to be of a high quality brand or is high in demand where the customers do not mind paying a high price for it. This means that the price can be increased and the customers will still want the product and may not hesitate to buy the product if it is a well known and wanted brand. Such as Billabong and Quicksilver, they are of a high price because they are known as a good quality brand and are a fashion brand which is considered to be cool to wear. This is why they charge such a high price because people are willing to pay these sorts of prices. * Marketing Penetration: this is when a business introduces a product or service at an extremely low price in order to gain interest amongst the market. Therefore they gain some of their competitors customers and then as the product or business grows it gradually increase the price. * Market skimming: is where a business or product enters the market and sets their price at a high margin and then gradually until it gains the sales which are required the company will lower the price of the product slowly. * Loss Leaders: this is when a business decides to have promotions and to have cheaper prices. This concentrates on obtaining customers and sometimes can cause the company to make a loss rather then a profit. Although this may happen the company would gain the customers and once they have reached the sales figures which they had aimed for they would then end the promotion and increase the prices. This can cause a small loss of the customers which they had gained but if the customer thought that the products and/or services were of good quality then they would keep purchasing the product over other products. When my business enters the market it will use market penetration. This is because it is the best way to be able to read the market and gain customers when the business is first starting up. Also it is the easiest way to find a price to have the products and services set up and to be able to gain customers while doing this. Where as market skimming the business may not acquire any business until the price has dropped enough and therefore may not acquire the full capacity of customers and may limit them selves as to how many people are interested in the business. Such as customers will notice a product or service if it is a cheaper price then the others if it is not a well known company, instead of purchasing the more expensive unknown brand or company. There is many different ways of promoting my business catering for you. An example of this is if a customer is to spend over 1000qr on their catered function they would get 5% discount on their next lot of catering which they will require. This would help draw in repeat business for the company. Or depending on how well the 5% discount attracted customers the promotion may need to be changed to 10% discount on the next purchase of over 1000qr, but at least 1000qr must be spent on the previous purchase in order to gain this discount offer. This helps attract new and keep new customers. This is important in order for the business to grow and maintain that growth rate, also it is important in order to gain repeat business so the business is able to survive and cover its running costs. Other promotions can include free desert buffets after their 5th visit of spending over 1000qr per service required. This will encourage the customers to return to the business more then once or twice. Thi s is because for every 5th round or catering they require which is over 1000qr they receive a desert buffet free of charge. The place which the business first premises will be located will be on or near Salwa rd. This is because this is a large business area for all different kinds of businesses, ranging from food providers to car sales and servicing. This is one of the largest and most popular main roads in Doha. This is because the high range of variety in which this area provides. People come along this road for various reasons and because of this if the business is located on the side of the road it is highly likely that people will not only discover the business through advertising in other places other then the shop itself, this is because when people are driving around they tend to look around and notice new things, such as a new store. the store will not only gain attention after it has been finished but whilst it will be under refurbishment to compensate for the business. This will mean that it should be relatively easy to find if it is located on or near Salwa rd. this is important in order for customers to be more inclined to look for the store because it is easier to find and more convenient for the targeted market. Human resources Human resources are the staff that is required in order to run the business. There will be 5 cooks that will be employed. One of which will be trained in order to be able to drive the truck to deliver the goods to the customer. They will be employed from the Philippines. Their job will require them to be able to cook and clean, also two of the workers will be required to be able to drive . the cost of them getting their license will be covered by the business. Also they will be required to clean the kitchen at various times throughout the day. At the beginning of the day in the morning and at the end of it. They will be paid 500qr a month. Their wage is so low because all of their accommodation will be provided and they will not need any transport to get to and from work. Also all of their needs for their accommodation will be provided such as beds and other furniture. For the cooks visas it will cost 2000qr for each cook. Once the business has grown then I will employ more cooks and their wages will be increased. The total amount for the first year of running the business for their wages will be 40,000qr all together. This includes their visa costs. The cost for each employee will be 8000 Qatari riyals this includes the cost of the visa and the cost of employing them for 12months. I will be managing the day to day running of the business, this includes supervision of the production of the products, the financial and ensuring that the quality of the businesses products is up to standard. Physical Resources Some of the physical resources required by the business include things such as stoves, benches and the villa fit out. The physical recourses are very limited due to the fact that land is unable to be purchased by a non-Qatari resident or person. Also because it is a home delivery catering service. It will also only need minimum physical resources because the premises is only a kitchen and an office down stairs and will have accommodation for the staff up stairs. The following is the physical rescourses of the business: Oven 5 2500 12 500 Floor coverings 10000 10 000 Kitchen Benches 7000 7 000 Fridges 5 2000 10 000 Cooking equipment 15000 15 000 Vehicle 1 69276 69276 Deposit on rental villa. Plus first months rent 1 40000 40000 Total 163776 Quality Quality is an extremely important aspect for any business. This is because if your quality is not to standard then your product or service will not be successful. To ensure that my company has its quality up to standard it will have checks on the product after each stage of the production process. If the product is not to the quality and standard required it will be disposed of and the product will have to be re-cooked. An example of this is if the spring rolls have not been cooked for long enough or not cooked correctly then they will be disposed of. There will be Strict Quality control of the produce of the business and what leaves the business to be supplied to the customers. There will be strict standards as to how the products are made, how the appearance of the products looks. There will be specific standards as to how the premises of the business is to be kept it is to be cleaned regularly in order to make sure the products are of a healthy standard. Quality assurance is what a company gives its customers to assure that its product is of a good quality. An example of this is money back guarantee if the quality of the product is not as good as what the business said it would be. For my business The Peoples Catering Co. it will have a money back guarantee or the next catered meal will be free up to the value of the previous meal. Also another way to make sure that my products are of good quality is through having feedback cards for the customers. These will have questions on them such as, what did you think of your catered meal for your function? What could The Peoples Catering Co. do to improve your catered meal next time you order? These customer feedback cards will be entered into the computer and into the customers file. This is so next time the business caters for the customer it will be able to make their order as to how they want it. Financial Resources There are only a few places for a person to gain finance for starting their own business. It can often be hard to get finance also because the bank or who ever you are seeking finance from may think your business is a risky business. Therefore they may choose not to finance your business. The main place where people seek finance to start their own business is from the banks. If they are unsuccessful in gaining finance from the banks they usually seek finance from business angels. Business angels are people or companies that loan money to someone starting up a new business. In return they usually expect a share of the business. The following are different ways of acquiring finance: * Bank loan is a borrowed amount of money and is repaid with interest in fixed installments over a fixed period. Bank loans are the most common types of loans. This is because you receive money quickly and makes it easier to budget. There are also disadvantages of bank loans. Such as the interest rates, this is because they may be high therefore the person or business that gets the loan may have to pay back a large amount more then what they borrowed. * Owners savings: usually is used to fund some of the business but another loan is usually taken out to fund the rest of the business. If the business is solely opened on owners savings takes along time to build the business up and takes the owner a long time to start the business. An advantage of this is that the owner does not repay the money and does not pay interest. * Money From friends and family: money from friends and family is usually used as a last resort for money. This is because it can cause problems with friends and family. Also usually they lend you the money expecting a share of the business and/or expecting it to be repaid. * Venture Capital/ business angels: are business people who are willing to invest in new businesses. The businesses are usually risky or are businesses that are unable to acquire a loan. In return they usually expect a share of the business. Some advantages of this are that you dont have to pay back the loan, there is no interest, and also they can be used as a last resort if you are unable to acquire a loan elsewhere. A disadvantage is that you loose a share of the business therefore you may loose some of the control of the business. * Government Grant: is money received from the government. It is only received from the government to encourage small businesses and to try to reduce unemployment. Also a main time in which they are handed out is when there is a high rate of unemployment. An advantage of this is that there is no interest and there is no need to repay the loan. A disadvantage of this is you must fit the criteria to receive the loan also it is very bureaucratically. It is a very long process to apply for the loan, because it is issued from the government and are very strict on following the government money. * Bank over draft: Is a short term way of financing. It is where the borrower takes out more money out of their account then what actually exists in their bank account. It is only a small loan and is paid off at the end of the month when new funds are deposited into the account which the overdraft was taken from. Some advantages of this are that you only pay interest when you are overdrawn ober your overdraft. Also it is a facility in which you can use on demand if you wish to use it once it is approved. Some disadvantages of Bank over drafts is that if you exceed your over draft limit very high charges will be incurred. Also the bank can ask for the money back at any time. * Trade credit: Is a short term from the supplier of the goods that are received by the company and are invoiced and are to be paid back in the future after a certain time period, such as 30 to 60 days. An advantage of this is that you do not have to pay for the goods up front, you are given a certain amount of time to retain the money for selling the goods and then being able to pay for them. A disadvantage of this is that this is a loan therefore you may be charged interest on the payment. Also then you areliable in having to sell the goods in the given time period in order to be able to pay for the goods you have received from the supplier. Only a few of these options are available to my business. Such as a bank loan, owners savings, money from friends and family, bank overdraft and trade credit. This is because government grants are unavailable in Qatar. Although there is still venture capital available it would not be suited for my business because it will be in a very low profit margin to start with therefore it would be harder to split the funds amongst different owners. Although this is true if there is no other option of gaining finance then the business will seek finance from venture capital. The Peoples Catering Co. will try to seek finance from the bank because it is the best option and is a more stable option. Also I will be able to keep more control over the business then I would if I was to use venture capital. One of the reasons a bank loan is more suitable for me is because of the availability of it. it is easier to obtain and also being able to find someone who provides venture capital the sources are lim ited. If a bank loan is acquired I am able to own a 100% share of the business. Where as with Venture Capital the person supplying the finance for your business would usually expect a 51% or more share of the business. This would mean that they would acquire the majority of the businesses profits and would have more control over how the business spends its money. Costs Start up costs of the business: Start up costs of a business is the costs that are incurred by the business. They are the costs of the set up of the premises. What is to be paid for quantity Price of product in QR total oven 5 2500 12 500 Floor coverings 10000 10 000 Kitchen Benches 7000 7 000 Fridges 5 2000 10 000 Cooking equipment 15000 15 000 Rent 25000 25 000 Deposit for rental property 10000 10 000 Advertising 12500 12 500 Insurance 3740 3 740 Motor Expenses 1 62976 6 2976 Working visas for cooks 10000 10 000 Overall total 178 716QR Running costs of the business: Running costs are the day to day expenses of keeping the business running and to draw in customers. The following are some of the running costs of the business: What is to be paid for quantity Price of product in (QR) Total(QR) Rent 25000 25 000 Electricity and water 1000 1 000 Insurance 2240 2 240 Supplies 1500(February), 1000*3(March-May), 500*4(June-September 6 500 Wages 2500 2 500 Total 37 240 For the cash flow I have discovered my figures from various sources. The information is from the internet, insurance places and from previous experience. Sales income: I have worked out my sales income based on that the customers will be paying 1500qr for the catering service for each function. I have gathered the pricing information on how much the customers expect to pay through my market research. For the first month I am working the sales income on having 10 customers for the first month. Then for the following month I have based the increase on 6 people for the second month of trading and then small increases of customers. Then in the summer which is the quiet times where not many people stay in Qatar the inflow of income is much less. Then at the end of this time period the sales increase dramatically to how they were before the summer due to people returning to Qatar. An example of this is during Ramadan for the evening meal of Iftar. This is because a lot of people tend to entertain for this meal. Also during the Christmas time period because people entertain and order catered food. Wages: The wages are based on the rate of pay that a Filipino cook would get in Qatar which is a minimal wage. It is 500qr a month for each cook. For the first month that the cooks arrive there is a fee of 1500qr for each cook for their workers visa which will be paid by the company. The cost is based on having 5 cooks working in the business. Also one of the cooks will need to have their drivers license so they are able to deliver the catering to the premises of the customer. The accommodation for the cooks would be provided also all the bills for the electricity and water and bedding will be provided. Monthly Rent: The monthly rent is based on the rental price of a villa in the West Bay area near Rainbow Roundabout. It will have a monthly cost of 25000qr. I have found out this information through previous experience and what I have heard from friends and what they are paying. The reason I have chosen this area is due to that there are large villas in this area that consist of up to 13 bedrooms. This would be ideal for the business because the cooks could live upstairs of the villa. Therefore I will not have to find other accommodation for them. Also it is in an ideal area due to there is many middle to upper class residents living in this area. It is also near the main shopping centre in Doha. Loan repayment: The loan that will be acquired will be of an amount of 400 000qr. This will be secured on a 7 percent interest rate which has been provided by HSBC. This will be paid back in lump sum payments of 10 000qr. This will start to be paid back in may after 3 months of trading when the business is has secured enough money to be able to cover the costs of running the business. If the interest rate is 7% the annual interest rate would be 28000, the loan will be paid off over 4 years. Therefore there will be monthly repayments of 1000qr starting from May in the first year of trading. It will be paid off within 49 payments after the first repayment. Electricity and water: The electricity and water was based on the average house price for the electrical and water bill. The average household electrical and water bill is 850qr. Therefore I have added an extra 250qr onto this cost due to the fact that the villa is larger and there will be a catering business running from the villa, also there will be 5 cooks living in the villa aswell. Therefore there will be more use of the water and electricity. Advertising: The price is based on what I have found on the internet that advertising companies charge in Qatar. It will be paid in 2 lump sum payments of 12500qr at the beginning of the year and in June. Motor expenses: The motor expenses are based on the price of purchasing a Chevrolet pick up. It will cost a total of 69 276qr I have found this information from the local Chevrolet Dealer. It will be paid off during the year each month of evenly distributed repayments. There will only be one company vehicle because this is all that is needed to make deliveries. I have chosen this vehicle instead of van because it is more practical for Qatar. I found out this price from the dealer. Cost of sales: I have worked out that for every sale the business makes that it will cost 500qr for the supplies to produce the product. this is because each meal set of meals will cost around 1500qr and I worked out that it would only be about 500qr. Fit out of villa: The fit out of the villa will cost around 40 000qr. I found this figure through adding all the costs of what is needed to fit out the villa and it added up to just under 40 000qr. So I rounded it up to allow for any damages to equipment needed for the fit out such as tiles and bench tops and other fixed assets for the villa. Supplies: The supplies include things such as cooking utensils and other items that are needed to provide the catering service. The start up cost of the supplies will be 15000qr. This is because all of the initial cooking utensils and accessories need to bought before the business can start trading. Then in February the cost of the supplies will decrease down to 1500qr. Then in the following month it will decrease to a 100qr a month from March through till May. Then from June till September the cost of the supplies will decrease again to 500qr. Cashflow analysis A Cashflow is used to determine the financial expenses over a certain period of time. It can be used by businesses and for personal finance structures. It can also be used as an estimation as to what the business or person thinks they will spend their finances on over a certain period. It can be used to determine how much finance is needed to be gained through a loan or to budget what finances you currently have. My Cashflow shows that the business will use all of the loan that is to be obtained. It will be used to get the business up and running. Once the business is established it will be earning enough money to keep the business running in a profit margin. The Cashflow shows that in the first year of trading the company would gain 325 000qr in sales. This figure is predicted to increase in the second year of trading, due to the fact that the business will be better known around Doha due to it would have been running for a year. Profit and loss account A profit and loss account is used to determine if the business will be making a profit or loss without external funding other then sales. it is used to determine if the business will be successful or not. In the first year of trading businesses are expected to be in a loss. This is because there is a lot of extra cost involved such as getting the premises fitted out in order for it to be appropriately equipped to run the business in. also there is a lot of advertising involved in order for the public to gain awareness of the business and its services. It is at the end of the second year that business are usually expected to either break even or to be making a profit. If not the business is usually closed down. This is due to the business is considered to be unworthy of being able to make profit and to be successful. ICT There are many different ways that a business may use ICT to improve efficiency. This can be done through using programs such as Microsoft word, excel, access, publisher, power point and Sage. Also programs such as flash and Dream Weaver Mx can be used to create websites to advertise your company. These programs are all used to improve the efficiency of the business. These programs are specially designed for creating spreadsheets, advertisements, letters, official documents and records. Microsoft word: Microsoft word is used for creating documents such as records, letters and progress reports of businesses. It is a program for creating written documents. It is a computer based program that was created on the basis of the typewriter. It is more useful then a type writer because you can save your work and if you make a mistake you dont have to retype the whole document. Microsoft Excel Microsoft excel is used for creating spread sheets such as cashflow forecasts, breakeven charts and balance sheets another official documents. It is useful to create documents such as these because it is simple to use and there is functions in the program that can alter the data with a small change if you change 1 cell it will automatically change the rest if it is required. It is highly used in businesses both small and large. Publisher: Publisher is a computer application that is used to design or create business flyers to advertise the business, also to create official business letters. This can be useful due to the fact that the business can keep a standard letter head with their logo and business details on it and can create the letter at the bottom and do not have to redesign the letter head every time they create a letter. Power Point: Power point is used to create a slide show or visual aids for when a presentation is held. For instance it may be used as a visual aid for a presentation produced to the bank in order to acquire a loan or to a potential supplier who may be interested in supplying to your business. Sage: Sage is a computer program that is designed specifically for the use of businesses. This helps with the accounting that a business may have to do. Also it works as a computerised filling system for the business which can be used to keep the business organised and keep customer and employee profiles. Flash: Flash is a program where you can create animated logos and animation clips which can be used on the companys website or in their advertisements that are on television. Dream Weaver MX: Dream Weaver MX is a program which is used to create websites. This can be useful for a business because they can have information about their business. Also things such as customer feedback sheets can be placed on the site and many other details that you wish your customers to be able to view. The above programs can be very useful to the business if they are used in the correct way. My business The Peoples Catering Co. will use Microsoft word, excel, publisher, power point, Dream Weaver MX and Flash to help run my business. These are the basic programs which are required in order to run the business efficiently. These programs will improved efficiency through making it easier to sort out documents and to find documents. Without these programs the business would have to sort out its customer logs and do all of its reports by hand. If this was to be done one simple mistake in the document would mean it would have to be thrown out and started all over again. Where if a mistake is done on the computer you can simply go back and change the error. Also by using programs such as word creating general letters is much easier due to you can have the letter typed up and just edit the names, dates and amounts on it and then hand it out to your customers, suppliers or who ever is in ne ed of the document to be handed to them. If this was not to be done on the computer the letter or document would have do be written out fresh every time one is needed to be handed out. I will not use programs such as Sage to begin with because it is a very expensive software program and is unnecessary for a new business to be using it. Once the business is making a profit and develops and becomes a large business that is a leading competitor and has hold of a large majority of the market then specialist programs such as Sage will be purchased.