The selected business is a coffee shop christened Tim Hortons cafe and bakeshop, which is located in upstate. Its primary function is to avail gourmet-roasted coffee complemented with varieties that include white mocha, brewed coffee, candy bar late and carmelicious. The selected business, which is already in existence, adds flavours such as peach, lemonade, wild berry and mango to address customer needs and ensure continued business growth.
Strategy for a Business Concept Directly Compete with selected small business
The suggested business is a beverage shop that would offer its potential customers classic tasting coffee beverages. The business would integrate high-end quality ingredients that would leave its clients yearning for more. The strategy for the suggested business concept would entail use of incentive programs to lure and secure customer loyalty. The business would lay plans to reward clients with punch cards or a regular customer cards that would guarantee a customer free drinks after repeated purchases. Notably, the strategy would revolve around employing point of sale end that would keep record of individual drink purchases. The business concept would complement the incentive programs by availing freebies, which may include baked cakes or specialty drinks to customers deemed loyal to the business. Aaker (2001) explains that dishing give aways to loyal clients earns businesses additional clients through referrals from existing customers.
The strategy would also entail giving gift certificates for a $30 drink purchase, which would attract a free $10 card to the client. The strategy will be broad and will also entail use of the business employees to reach out to potential clients. The beverage shop employees will play a pro-active role in signing handed out discount cards. The employees would give out the cards to other people to inform them of the business existence and product offering. The initiative would be handy in luring new customers to visit and make purchase in the beverage shop (Aaker, 2001). The business would then reward the customers who make most referrals with free goodies such as baked items and free drinks. The undertaking would serve to cement the customer’s loyalty and relationship with the beverage shop.
The business concept’s strategy would also entail making provision of more than just beverages. Provision of extras would lure more customers to have an experience of new offering. The business would entice existing and new customers to visiting the beverage shop by making wireless internet available as well as ample space where a customer can work while enjoying the coffee drink. The beverage shop would spice up the undertaking by availing additional extras such as photocopy machine and computer terminals to ensure that customer’s iPads do not run out of power. The business would make available other free services such as massage area for customer who have made the most purchases within a given period. Additional enticing undertakings would entail holding live poetry readings and live bands to keep customer entertained while having a drink in the shop. In tandem with the business concept’s strategy, the beverage shop will entice customers more by giving out samples of baked products and coffee drinks. Balderson (2006) explains that such an undertaking gives customers an opportunity to have a taste of the business offering.
Branding would also be an element of the suggested business strategy concept. The initiative would entail setting up well-designed signage that communicates to not only existing customers but also to the potential new clients. The boards would bear well-crafted business logo that correlates with the beverage offerings provide by the suggested business. Furthermore, the signage would host the spectrum offerings availed by the beverage shop which include specialty drinks, gourmet coffee, free wireless internet, live music brand and poetry readings. The signs would pass a message to potential customers on the location of the business and business offerings. Balderson (2006) outlines that such an undertaking would pull people to the business, consequently resulting to new purchases.
Determine if it would make more sense to open the new business you describe or to purchase the existing business you selected
It would definitely make more economic sense to purchase the existing selected coffee shop relative to opening a brand new from scratch. Buying the coffee shop, which is already in place and established would be less risky than putting up a new one. The rationale behind the statement is that the buyer would already be knowing the process of running the new business and how the entire empire operates. In additional, it is true that financing a purchase of an existing business is easier relative to soliciting for individuals to bankroll an entirely new business (Campbell, Edgar & Stonehouse, 2011). Individuals or institutions proving finances for acquisition of an existing business would be more convinced that the business would thrive owing to presence of a record of accomplishment.
Furthermore, acquiring the already existing coffee shop would be more advantageous since the owners would consequently secure already established relationships. Purchase of the existing coffee shop would go hand in hand with acquiring an existing client and supplier base. Staring a new business would be an uphill task in building client and vendor base from scratch. Campbell et al., (2011) claim that the undertaking would take years to construct. The existing coffee shop seller would pass on the existing relationships to the new busies owner. It would make more sense purchasing the existing coffee shop because the undertaking would give the new owner an opportunity to focus on bolstering and making the business thrive forthwith. The new owner would find an already laid and established foundation. Contrary, setting up the new suggested beverage shop would confront the new owner with whooping encumbrances of constructing new foundation, which is lethargic, and time consuming.
Setting up the new business would attract additional expenses and time in buying new equipment such as furniture, computers as well as employing new workers and new policies that would take time to guarantee a consistent cash flow. Buying the existing coffee shop would present myriad merits to the new owner related with acquisition of people. The employees of the existing business would move on to the new setting following the acquisition. Setting up the newly suggested business would cost the buyer more in attempts to hire new competent employees. It would also take time to find employees to fit in the new start-up. Additional time would be spent in developing and assimilating new employees to fit in the new business’s culture. Acquiring the exiting business would present the buyer with an experienced team in place as well as an easier time executing business growth strategies. The financial history of the existing business would enable the buyer to make predictions of anticipate performance.
It would therefore be much easier to solicit loans and lure investors in injecting their monies in the business. Such an undertaking would result in business growth. Purchasing the existing business would reap benefits because of the already established procedures in place. The new owner would get an already set and operational groundwork. The buyer would need not to undertake fresh activities to determine best practices since this would already be in place for the purchaser. The buyer would only focus on setting up and managing official business procedures after acquiring the existing coffee shop.
Most appropriate Form of Ownership
A partnership would be the most apt form of business ownership for the new venture. It would be the most logical option for the undertaking because the partners would fund the business with start-up capital owing to the nature of the venture. More partners would imply increased fund injection consequently allowing for potential growth and flexibility (Campbell et al., 2011). The funds would be equally divided among the partners. Moreover, the partnership would be the most appropriate since the form of business is the most easier to operationalize, handle and form. Cappelli (2004) explains that the venture would favour the partners since it is the less strictly regulated relative to companies in terms of formation and governing.
The partnership would have shared obligations and responsibilities in operationalizing the business. The undertaking would therefore enable the team to reap and take an equal portion of the business tasks. The business through partnership would have a wide reach of skills base since the owners would be endowed with diverse business skills. One partner can who is proficient in figures can handle accounts and another sales section. Also, decision making would be shared. A high number of partners would imply more ideas, which would make solving of problems easier (Nieuwenhuizen, Rossouw & Badenhorst, 2008).
Business Plan Outline
Tim Hortons café and bake shop is a beverage venture having its location in upstate. It is 1600 square foot situated North West of 234 Mission Street. The business splendid location lures in approximately 5,000 purchasers on weekly basis. The business avails to its client base an excellent gourmet coffee experience. The café compliments its products offerings with a classic technology coupled with wireless internet and state of the art espresso equipment. The café has a domestic market share of $45 million. Key to success of the business will include provision of unique gourmet coffee. The business intends to avail the finest ever gourmet coffee.
- To realize a marginal profit of 4.0% in second year and 5.5 in 3rd
- To augment earnings to $25, 000 in the second period and $40, 000 in the 3rd year
- To be the café of choice in the entire upstate area
Tim Hortons café and bake shop has commitment to avail products of its own kind which is the success recipe.
Key to success
- Unique products
- Employing best baristas
- Change clients to connoisseurs
Tim Horton’s café and bakeshop is a beverage venture having its location in upstate. The café will specialize in offering quality gourmet coffee lattes, baked cakes and smoothies.
The business has a partnership form of business ownership. Owen Collin and Charles Ndegwa will own it co-jointly. The duo own master’s degrees in business administration.
Products and services
The ventures primary offering will include gourmet-roasted coffee complemented with white mocha, brewed coffee, carmelicious and mocha. Pastry offering will include rolls, breads, scones and muffins.
- Print and electronic media advertising
- Social media
- Sign boards
- Rake best coffee powerhouse
- Rasterise café
- Low reasonable prices, extras, variety of coffee, home-made treats
- No name/reputation, start-up expenses
- Unexploited coffee market, unemployed catering individuals
- Rake best coffee powerhouse, Rasterise café
- Rent $1500
- Furniture cost: $750
- Advertising fee: $500
- Equipment Fee: $650
- Supplier Fee: $30
Aaker, D. A. (2001). Developing business strategies. New York, NY [u.a.: Wiley.
Balderson, D. W. (2006). Canadian small business management: Text, cases, and incidents. Homewood, IL: Irwin.
Campbell, D., Edgar, D., & Stonehouse, G. (2011). Business Strategy: An Introduction. Basingstoke: Palgrave Macmillan.
Cappelli, P. (2004). Employment practices and business strategy. New York: Oxford University Press. http://www.sba.gov
Nieuwenhuizen, C., Rossouw, D., & Badenhorst, J. A. (2008). Business management: A contemporary approach. Cape Town, South Africa: Juta.