Entrepreneurial Finance – Startup Plan for Breakfast Producing Food and Beverage Company – Tipsy Bread

Executive Summary

In this study, the startup plan of a breakfast producing food and beverage company Tipsy Bread and Breakfast has been mentioned. This company focuses on selling cheap breakfast foods than in comparison to other companies. Skillful people are required to execute necessary things. They perform their task in an organized manner. The study found that the strength of Tipsy Company is that they plan produce their best services to their customers. It is the foremost responsibility of every industry to keep in mind about the customer satisfaction. Actually personal investment is an example of investing in a new business where the business is a sole proprietorship in nature, as found in the study. Tipsy Bread and Breakfast is a food and beverage related company operating in UK. In UK, Brakes group can be considered to be an important and crucial competitor of Tipsy Bread and Breakfast. In respect to Tipsy, the study found that the financial support mainly from bank loan has been planned.

Introduction

In the time of starting up a new business, it is important for an entrepreneur in creating and analyzing the business environment that can help in starting and increasing the business network for a company. In this study, the starting selling point of business has been mentioned in the study. Environmental analysis expressing industry sector and industry characteristics has been also mentioned in the study. In this study, formation of a new food and beverage company with name Tipsy bread and Breakfast. SWIT analysis and key food and beverage industry related success factors have been briefly mentioned. The study includes calculation of forecasted calculation of income statement and cash flow statement with balance sheet for the new company for coming three years. The sources of borrowing money and personal reflection on the startup business have been mentioned in the study.
A. Starting business selling point In UK, there are very less breakfast food selling companies. In the view of this matter, start up of Tipsy Company has been planned. This company focuses on selling cheap breakfast foods than in comparison to other companies. According to Cumming and Vismara (2017, p.17), it is important for a business to determine the selling point at the starting of the business. In respect to Tipsy bread, the selling point is targeted to be selling food and beverages that are perfect for breakfast time. The item that is selected to get sold in the company goes with the choices of food of customers in UK in the time of having breakfast.
Environmental analysis expressing industry sector and industry characteristics Producing food requires a lot of things which are to be planned accordingly and executed. It involves planning of various things such as menu, purchasing necessary things and organizing. Personnel According to Cumming et al. (2015, p.345), skillful people are required to execute necessary things. They perform their task in an organized manner. In respect to Tipsy Bread Company, skillful personnel are required in order to deliver desired food items to the customers. Hospitality Hospitality in a food producing sector is considered to be major part of the sector. According to Vismara (2016, p.579), this requires analyzation of the market and making plans accordingly.

Pricing

Pricing is considered to be very important in this sector. After determining the value of the materials invested for the product, its price determination gets done (Wang et al. 2015, p.863). SWOT Analysis Strength According to Wright et al. (2015, p.3), it is important for a startup company to provide best service to its customers and apply it as the company’s strength. The strength of Tipsy Company is that they plan produce their best services to their customers. Their customers are happy with their services. Weakness Tipsy Company must develop various innovative ideas to enhance their internal structure as well as the staff members. They must always create upgraded ways to attract customers. They must also try to develop their services and get way to innovation. Opportunities They must always look for innovative ways to increase their profit margin. They must search for new opportunities. Threats There are various other restaurants like Tipsy who are there in the market. They are in competition with Tipsy and try to enhance their services in order to attract mass of people. This might prove to be a threat to Tipsy Company. Key industrial success factor Market analysis According to Alvarez‐Garrido and Dushnitsky (2016, p.819), having an adequate analysis about market is stated as a vital factor for success of any industry. Position of the industry in the market is very crucial to understand. Management This is one of the major factors of an industry. Management of a industry is very important in order to seek good position in global market. Capital

Capital can be stated as the amount of money which a come a company invests. It is necessary to invest the capital wisely so as to increase the profit margin. As capital is a major part of a company. Customer satisfaction It is the foremost responsibility of every industry to keep in mind about the customer satisfaction. As feedback from customers help an industry to reach heights.

The above calculation toughly estimates the balance sheet of the start up of a company names Tipsy Bread and Breakfast. In this calculation, it is estimated that the total amount of current asset of the company may stay static amounting £15000. It is also important to mention that the total liabilities of the company are also predicted to be £15000 for the coming three years. It can be said that of the company follows above balance sheet then the company can increase its profitability and develop the business network is less time efficiently. Cash Flow statement

Table 3: Forecasted cash Flow for Tipsy Bread and Breakfast (Source: Created by author) Discuss and mention performance ratios Current ratio According to Fraser et al. (2015, p.70), the current ratio is considered to be an important factor that can help a company in knowing whether the current assets of the company are well enough in meeting the current liabilities or not. In the initial stage, the company is not in the position to meet all its current liabilities. Thus, it is important to state that the company starting up should implement strategies in order to get the current ratio of 1:1 minimum. Audretsch et al. (2016, p.1) stated that the net profit margin and gross profit margin are also important in respect to the performance of a food and beverage company in UK. Being a startup, it is expected that the net profit margin of the company might be 18%. On the contrary, one of its competitors Brakes group earns near about 14.12% of the net profit per annum. Therefore, the company can sustain the profitability and expand more inner future.
C. Borrowing of financial support Personal Investment According to Block et al. (2018, p.239), personal investment is a method of sourcing funds for a business startup that needs a huge amount of investment. Actually personal investment is an example of investing in a new business where the business is a sole proprietorship in nature. It is also important to mention that the amount of profit of the company that can earn will get allotted solely to owner. Generally, entrepreneurs of high value do not use to provide personal investment,. As personal invest includes a lot of risk factor. Thus, personal investment is not much popular. Government grants and loans from financial institution Cumming and Vismara (2017, p.17) said that government granting and loan from financial institution is the best financial sources that can facilitate a startup company to invest in a initiate stage. The loan and the governmental grants are considered to be very crucial as it includes helps in getting huge amounts in less risk factor. In respect to Tipsy bread and breakfast, it is important to invest money by taking loan from government 5 and ban like financial institution. This can
help in increasing the chances of having more amount of investment in less risk factors as compared to personal investment or crowd funding. Crowd Funding Conti (2018, p.134) said that crowd funding is another important factor of crowd funding that includes gathering of money from a number of crowds. This type of finance sourcing process bears high risk which can be dangerous for a startup company. However, this can also bring huge success to a start up. The chance of facing loss is more apparent to the Tipsy bread and breakfast. It is important to mention that the amount of investment that Tipsy Company need cannot be gathered from crowd funding. However, this method can get applied if the company starts operating and earn huge customer support for meeting customer’s demand perfectly.
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D. Presenting business plan (Refer to poster presentation)
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Business Plan: A case study on startup business Tipsy Bread and Breakfast
Business description Tipsy Bread and Breakfast is a food and beverage related company operating in UK. In UK, it is a fact, as said by Harrison et al. (2016, p.669), that there is very less company in UK that operates on by providing only breakfast food items. The company is planned to provide the food and breakfast item in cheap rate for the local customers
Marketing The publicity and gathering of raw material has been also planned for the betterment of the company. It has been planned that all the raw materials even including utensils of the restaurant will get provided by the raw material resources. The company also acquires a place where it can operate its business and the place is selected to be on street in order to drag customer concentration.
Competitors In UK, Brakes group can be considered to be an important and crucial competitor of Tipsy Bread and Breakfast. This has been planned that the strategy of business should be planned in such a way that it can affect the profitability of the company. Obviously, Tipsy will provide in cheap rate and more products with quality in order to meet the demand of the consumer.
Operational procedures The company will appoint people who can understand the choices and preferences of the customer. The company will provide take away, dine in and seat reservation system for celebration of an event. The service has been planned to get operated as fast as possible for making customers impressed with punctuality and quality services.
Financial data According to Owen and Mason (2017, p.434), financial support need to be taken from governmental and banks. In respect to Tipsy, the financial support mainly from bank loan has been planned. It has been also planned that the amount of sales of the company will get directly allocated for meeting the premium and the principle amount for paying off loan by meeting company’s current liabilities as far as possible.
Personnel As influenced by Cumming and Johan (2017, po.357), both experienced and fresher personnel are planned to get appointed in the company. For the initial operations, the fester will get trained by the experienced one which will followed by more recruitments. Departmental heads will be selected based on the efficiency as per experience of the appointed candidates.
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E. Personal reflection In this study, I have learned about the expected strategy that should a start up in UK implement too ensure their success in business. I learned that in order to make a business successful, it is important to perform environmental analysis as well as internal analysis. In this study, the SWOT analysis has been mentioned in the study that helps in meeting the demand of the new business. It is also important to mention here that I have learned to calculate the predicted income statement, balance sheet and cash flow statement of a company. I have learned that the sources for starting a business can be both governmental and bank or crowd funding, However, I have learned that for Tipsy Bread and Breakfast, it is important for taking bank loan as a source of funds. I have also learned from the study that the amount of people in the time of starting a business both have fresher and experienced who can help in meeting the initial demand of the business.

Conclusion

In the study, it is found that in the second year, it is found that the amount of profit can get increased to £351,680 in the second year. It has been also assumed in the third year the company might not face enough profit and for getting prepare regarding that, it is calculated that the amount of profit of the company is decreased to £163,200 only. The study found that personal investment is a method of sourcing funds for a business startup that needs a huge amount of investment. For the Tipsy Bread and Breakfast, it can be said that the best method is taking loan from bank and governmental sectors to have a good start in business. The study also found that the company possesses both fresher and experienced candidates for the job and take away, dine in and seat reservation services will be available in the company. The company is also said to have proper product that can increase the customer satisfaction level in the company.

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