Sample Assignment - Business Plan Afro Food

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Table of Contents
EXECUTIVE SUMMARY. 4
1.      INTRODUCTION.. 4
1.1 Rationale for business. 5
1.2 Scenario chosen. 6
1.3 Aim & Objectives. 6
1.4 Structure of work. 7
2. BUSINESS CONCEPT. 8
2.1 Missions. 8
2.2 Vision. 9
2.3 Products/ Service. 10
2.4 Positioning. 11
2.5         Scale and Growth Anticipation. 13
3 FEASIBILITY STUDY. 13
3.1 Market research methodology. 14
3.1.1 Research problem.. 14
3.1.2 Market Research Design. 14
3.1.3 Sources of data collection. 18
3.2 Research Data and Analysis. 21
3.2.1 Research questionnaire. 21
3.2.2 Data collection and analysis. 23
3.3 ORGANIZATIONAL FEASIBILITY. 36
3.3 ETHICAL CONSIDERATION.. 38
3.5 FINANICAL FEASIBILITY. 38
Sales forecast: 39
Project funding. 39
Cash flow projections. 40
Profitability. 40
Break even analysis. 41
Financial risk and failure. 42
Sensitivity analysis. 43
4. STRATAGIC ANALYSIS AND BUSINESS MODEL. 43
4.1 Strategic Analysis. 43
4.1.1 SWOT analysis. 44
4.1.2 Five Force analysis. 45
4.1.3 Value Chain analysis. 47
4.2 IDENTIFICAITON OF SOURCES OF COMPETITIVE ADVANTAGE. 48
4.3 Selection of strategies for success. 49
4.4 Business Model 51
5. BUSINESS PLAN.. 54
5.1 Business plan assessment. 54
5.1.1 Product. 54
5.1.2 Risk issues. 54
5.1.5 Marketing matters. 54
5.1.6 Organizational feasibility. 54
5.1.7 Overall resource sufficiency. 55
5.2 BUISNESS PLAN SCHEDULE. 55
5.3 CIRITICAL SUCCESS OR FAILURE FACTORS. 56
6. CONCLUSION.. 57
REFERENCES. 57
EXECUTIVE SUMMARY
  1. INTRODUCTION

People in today’s world like moving out of their shell in clothing, travelling and eating. Today they want to try different food cuisines and cook them at home. Cooking is not restricted to women; men also love cooking food. With growth of industrialization and globalization, world has become a very small place. Sharing each other’s culture and food is a common gesture today. Even people have settled in different countries for work. Considering Africa, there is a huge migration of people to United Kingdom. Though migrated, they are interested in culture and food they were used to before. Since other ethnic people start knowing them, they share culture and food. This gives a good opportunity to open a grocery store selling speciality and hard to find South African raw material and food.

1.1 Rationale for business

As per census of England and South Wales in 2011, there has been an increase in South African population residing in UK.

Ethnic group

Percentages

White

86

Mixed/ Multiple ethnic groups

2.2

Asian/Asian British

7.5

Black/African/Caribbean/Black British

3.3

Other ethnic group

1

(http://www.bbc.com/news/uk-20687168)

As per government statistics, nearly 3% of foreign born population in UK is South African thereby making them the 7th most country of origin for non UK born residents. There has been an increase of approx 60000 South African in UK as compared to census data of 2001. 2011 census shows South African population of 191000 in comparison to 131000 South Africans in England and Wales in 2001. From the above population, one third resides in London; a figure of approx 57765 residents there. These South African resides normally in South East or North West of England.

Considering the ethnic food market in UK, there is a strong demand as 6 persons in every 10 enjoys eating foreign food. Even 44% of users are highly interested in ethnic foods and are constantly looking for new and ethnic food. The reasons for such interest is growth of multicultural England, increase in international travel, serving and visibility of new cuisine types in restaurants, media and increase in choice at stores. There has been an increase of 24% in ethnic food market sales volume between year 2007 and 2011. There has been an increase of 6.6% alone in 2011 reaching £1.4 billion by then. (http://store.mintel.com/ethnic-foods-uk-september-2012).

Thus considering interest of UK population in international ethnic food and increasing number of Africans in UK, it serves a good opportunity to open a grocery store and a mini restaurant that sells and serves African food; focusing mainly on Nigerian ingredients and food.

1.2 Scenario chosen

Deptford afro-food mart is a new business located in south London. The store is an upscale store selling African grocery and delicacies having a distinct menu that includes South African recipes; especially hard to find African ingredients and dishes related to native African tribes. The store will be an African speciality store selling ingredients imported from Nigeria. The facility will have both grocery store, a mini restaurant with sitting capacity for 15 persons with kitchen counter and a public restroom (Aleksandra & Limon, 2002).

1.3 Aim & Objectives

This business plan is aimed at identifying an opportunity to start a small business and understand its financial viability. For this, a business plan is made for considering the financial viability of opening a speciality South African food grocery and gourmet store in south London. On basis of aim, objectives identified are as below:

  • Arrange and obtain funding required for store.

  • Create a speciality store through providing ingredients and serving food that increases repeat client base by atleast 20% per year and new client base by 15% per year.

  • To be an established community destination having a customer satisfaction level of 90% by end of first year.

  • Achieve break even by end of first year.

  • Sales of £300000 in the first year, an increase of 20% every year thereafter.

Besides aim and objectives, there are certain key factors identified for business success:

  • Location: the location will be chosen that is easily accessible and convenient including walk by and drive by traffic.

  • Reputation: customer’s coming to our store once will like to come again and recommend us to their friends. For this business, since it is a different product word of mouth will be an effective marketing tool.

  • Product: South African food products of high quality will be sold at fair price in a neat clean and authentic environment.

  • Convenience: Customer’s will know that their requirement for authentic South African food and grocery will be fulfilled here at fair price. This will reduce their effort in spending time searching stores online and offline for speciality products.

1.4 Structure of work

Deptford afro-food mart is a single ownership company, a proprietorship concern with full ownership that is 100% with (student name).it will be registered as a proprietary concern in UK by name of “Deptford afro-food mart .”

The store will serve authentic noodles, sandwiches, rice and speciality drinks from Nigeria. Also grocery items will be imported from Nigeria and same will be highlighted in recipes served at mini restaurant. Business will focus on attracting besides African people, other Londoner to African food delicacy. The motto of business is “eat and enjoy African food” whereas the decor will portray the warm feel of a South African old world market.

2. BUSINESS CONCEPT

2.1 Missions

Mission statement is the statement of the goals of the business. It is the sentence which tells about the company in the way they going to function and also describing competitive advantage.For a company or an organisation a mission statement is the reason for them to survive in the market and for their existing reason. With the help of mission statement a company can compete with their competitors and try to gain good position in the market.Organisations action should be guided in the mission statement.It also help in the decision making and provide a path to the organisation. Something should be accomplished is called mission.

The mission statement depends in the three main factors which are

1) Which type of consumer you going to attract?

2) Which type of product or service client going to get from you?

3) By what reason your product can be unique from all other products in the market.

Mission:To provide best quality foodis the mission of Deptford afro-food market. Also to provide upscale grocery store and to provide the necessary items to the consumers that are required in their day to day life is our mission.

The motto of this store is eat,enjoy and be fresh. TheDeptford afro-food market will serve the various foods such as sandwiches,salads,lunch for picnics, etc. The motto of the company is to serve the best food and once a consumer comes once than he should be attracted by the foods and come again and again. The main concentration is on the freshness of the food. Due to this the sales will be increases and will also get good feedback from the consumers.

2.2 Vision

http://www.businessnewsdaily.com/3882-vision-statement.html

A vision statement is the company’s goal it likes to achieve in the near future. A vision statement can be one liner or maybe sometimes a paragraph but every vision statement states the target the company like to achieve in the short term or in the near future. The daily operations of the business are provided in a good vision statement. Vision statement is like companies key objectives are outlining which inspire the workers to achieve the goals by day to day working by establishing various strategies of business. If the vision statement is of the single unifying than the employees are more productive because if the vision statement is simple than the employees can concentrate on a particular motto of the vision statement ((Hom, 2013). With the help of vision statement the company can decide where they want to be in the near future with their products. Vision statement has the two characteristics

  1. A good vision statement should state in the near future where the company wants to be. 2. A vision statement should also have to motivation and level of excitement.

  2. Motivational vision statement helps the company to grow faster as it motivate each and every worker of the company and also give the desired output.

The vision statement of Deptford afro- food mart is to be the best food mart where people observe the best service experience. The main motto is to make each and every consumer happy by giving best quality food and the best service and to make the place where people like to visit again. They want to target every level customer with their food and they want to impress also with the cleanliness so that costumers come again and eat the fresh food always.The company’s goal and purpose is addressed by this statement. The food mart wishes to build a good name in the near future so that they will get more and more consumers.

2.3 Products/ Service

http://www.bplans.com/gourmet_food_store_business_plan/products_and_services_fc.php



The following products and services was offered by the Deptford afro-food market

groceries

From Nigeria,high quality groceries will be offered by Deptford afro-food market. Lots of items will be included like chocolates, oils, spices, cheese; pasta rice etc. For cooking in the home items like frozen meals, meat balls will also will be available.

We offer delicatessen

A unique cuisine with an international flair has been offered by the Deptford afro-food market. For breakfast, dinner and lunch it offers a limited menu. Sandwich, soups, salads, drinks are the items offered under rotating menu. Every morning each items of the menu are prepared fresh. Frozen meals, cheese and also picnic lunches been offered by us.

In the breakfast menu items like biscotti, bread butter, and quiche are included. While in the lunch and dinner items offer are sandwiches, frozen meals, breads and specials of daily.

From around the world a high quality of tea, coffee and juice are served by us. For the visitors who like to go to the various surroundings like national parks etc, we also offer specially packed picnic lunches for them. To many other outdoor guiding services we make this service available.

River rafting, hiking, climbing are included in this business.

2.4 Positioning

http://smallbusiness.chron.com/positioning-marketing-plan-22983.html



Positioning is the concept of marketing a product or service to the consumers. An image has been created for the product based on audience by the department of marketing in positioning. With the use of price, promotion and place it is been created. If the positioning strategy is intense more than the marketing strategy is considered very effective for a company. Marketing efforts has been elevate by the good positioning strategy and buyer gets proper knowledge for the product and helps to purchase that product.

Product and service target market knowledge gaining is consider as the good start for positioning gaining. For developing a good positioning statement a good team of marketing can help to get that which helps to reach the good target market.

Advertisement positioning

The first place positioned by the business is the advertisement. A Deptford afro-food market must determine the consumer’s needs and also the kinds of consumers they are targeting. The same type of advertisement will not work for the different category of customers. For kids the advertisement is to attract by the looks and for the elders the advertisement is for healthy foods and so the Deptford afro-food market should keep in minds the needs for the consumers and kinds of advertisement for various people.

Sales location positioning

Along with the advertising it is also need to choose the distributions right channel to attract the consumers. So the proper location is to be found and according to this the business is to be set up in the areas where you can find the number of customers. Deptford afro food-product should start a business in the area where there are lots of customers and the location where the transportation is easily available nearby.

Price positioning

On the market pricing various researches has been occurred. Many food outlets put a highest price with the highest quality and there are also outlets available in the market who charges lowest quality with low price. So the price should be such that consumer should like to order that and consumer should be happy with their product purchase. Deptford afro-food mart should place a price for their products such that the consumer can get good price value for it. They should place a price based on their quality and with the best quality the consumer will be happy and also will give a best price.

    1. Scale and Growth Anticipation

It is anticipated that there will be steady growth in the business of Afro food mart. In the initial year there will be revenue from restaurant business but from the second year restaurant business will be closed and only grocery shop will continue. Concept of restaurant is only to make public aware of the speciality store and as it becomes popular between the targeted customer then the restaurant will be shut down. As there is no more furniture requirements for the restaurant such investment in it will be recovered from restaurant revenue. It is anticipated that there will be steady growth of 20 % in the grocery shop and this will continue year on year basis. As it is already planned that there will be growth of 20% every year in the expected sales revenue and this is anticipated for next five years. If on the scale of growth points to be given to the project then five point scale will be achieved. Growth in all respect is anticipated in this project such as in respect of turnover, consumer support, demand and supply for the products and all other things related going well and expected the best performance. As in case anticipated growth can be achieved then it will be better to open chain of such grocery shop in other areas of London on a relatively large basis and even idea of restaurant with it can also be started.

3 FEASIBILITY STUDY

A feasibility study is done to understand about the viability of this project. In this section, both market research and financial feasibility is considered.

3.1 Market research methodology

3.1.1 Research problem

(a) To understand feasibility of opening an African grocery food store and restaurant in south London.

(b) Research aim & objectives

This research is aimed at identifying the potential for opening an African speciality grocery store in South London. On basis of this, the objectives are identified as below:

Research Objectives:

  • Identification of potential customer’s profile for Nigerian food in South London.

  • Identification of business potential of Nigerian grocery store in South London.

  • Identification of issues related to product pricing that will attract more volumes for Deptford afro-food mart grocery store.

  • Identification of competitors, market trends and potential market for Nigerian grocery store.

3.1.2 Market Research Design

Market research design is very important as it specifies the manner in which research will be carried out. It shows the direction in which researcher is moving thereby focussing on detailed research process (Campbell, 1975). Classification of marketing research activities is done on basis of purpose and objectives identified. Few marketing research conducted are proposed for producing exploratory nature results. This is preferable for conducting research before beginning of overall research project.

Exploratory research is conducted for overall research process at very initial stage. Generally when researcher is not having an experience in a particular industry and not aware of knowhow of that industry, it becomes important for them to focus on understanding general dynamics of that industry so that their job of conducting research can be carried out effectively (Creswell, 2008). Exploratory research provides “a look” activity for researcher. Through this research, researcher can establish general predictions of a business rather than getting answers to particular questions. An important part of exploratory research is the secondary data that is available in some time of computerised retrieval system or so. Primary data; another important part is focussed on qualitative research, rather than quantitative research. This is collected through depth interview, group discussions or focussed questionnaires. Information collected from qualitative exploratory research helps researcher in planning a more effective research. Thus it is through exploratory research that a sound foundation is laid for sound building rest of research program.

Descriptive research describes factors for marketing management like customers’ views and opinions, market demand and condition, customers’ buying behaviour and so on. No casual relationship is established between consumer behaviour and marketing variables. Researcher cannot make future condition prediction in descriptive research. This type of research like exploratory research is a part of already conducted research programme. Once present situation is established regarding market competition, size, etc.; then a predictive on conclusive type research will be conducted. Descriptive research is used to understand data structure and its pattern by using descriptive statistics. Graphs, pie charts, etc. are used to present results of descriptive research.

Besides these two methods; research can also be classified as qualitative and quantitative research.

Quantitative research is a logical research that uses data led approach which shows through measurable components of what is thought by people in terms of statistical or numerological view (Franklin, 2012). I this research a large amount of data can be organized and analysed into a report. methods used for quantitative research includes questionnaires or surveys where primary data is collected through set of questions designed by researcher and answers provided by respondents on them through either scales or a tick mark selection. Scale used can give options ranging from strongly agree to strongly disagree or scale from one to ten.

Questionnaires, computer and inventories are used for collecting data in this research. Also the data collected is numerical or statistics in nature. A sample size is selected from large sample population that represents the entire population.

There is a great amount of flexibility in this research as it can be carried out in various manners like through post, email, online or even on phone. Since only selection is involved, there is no descriptive in such research. While conducting this research, researcher should ensure that respondents are fair and have enough time for providing reliable data. If not so, respondents might answer abruptly resulting into wrong information that will finally affect result of research. In such research, for gaining willing participants, incentives in form of gifts or financial remuneration is given in few cases are provided.



Qualitative research and quantitative research are opposite of each other. Qualitative research is more about understanding human nature where researcher develops closeness with research subjects. This method is about feelings people have and reasons for making certain choices. An example of this is carrying out research to understand emotional reactions of people to a particular advertisement.

This type of research is used for gaining an understanding of reasons and motivations, for providing insight for problem setting, idea generation and for uncovering of prevalent trends in thought and opinion.

Discussion on some concepts or ideas is the leading factor in qualitative research where open questioning is done. Respondents in such method are encouraged to respond or give information about motivations, associations or behavioural factors that affects their responses. Generally focus groups or interview conducted face to face or through telephone.

Mixed approach as name suggest is a mix of both qualitative and quantitative research method. A combination of both these information on qualitative and quantitative research produces insightful results for a business that aims to learn about customer views, opinions and preferences.

For this research, considering the requirement, a questionnaire on a likert scale of one to five will be formed to get information on the feasibility of opening a Nigerian speciality grocery store. Besides, financial analysis is done to decide if the project is financially viable. So exploratory research will be carried out to understand the underlying gap in the market so that it can be filled and quantitative research will be conducted to identify market in the gap that can be tapped as an opportunity.

3.1.3 Sources of data collection

Primary research is related to generation of data that did not exist before and is collected specifically for this research. The aim of a desirable result is kept in mind by researcher while deciding on source of data collection. Through this a detailed information about the feasibility and success of a business is derived which helps researcher to frame business strategies accordingly.

Both primary and secondary data collection methods are used for this research where a quantitative research along with exploratory research method is used. One more method also known as comparative case study design is also a method used by few researchers. This study involves identifying scope for business to grow and expand in terms of financial viability and business viability. So for this research, primary data collection method is used for quantitative research to understand profile of potential customer for Nigerian food, business potential of Nigerian grocery store, product pricing issues in order to attract more volume and competitor identification, market trend and potential market identification. So considering the requirement for this business plan, a research should be conducted using primary data collection techniques for quantitative and exploratory research method.

There are various methods of primary data collection:

  1. Survey method

  2. Observation method

  3. Interview method



Considering the requirement for this research, it is most suitable to use questionnaire for gathering required information; that is survey method. There is a similarity between survey method and interview method; a major difference is usage of questionnaire in survey method. Also there is a difference of techniques used in both methods. The similarity is interaction with people thereby generating response on particular topics from them. But considering observation method, interaction with people is less as it is majorly related to observing peoples rather than talking to them as behavioural data collection is its main aim.

  • Data Collection Method: Survey method

Survey method gives a quantitative data that can be analyzed for getting answers to objectives of business plan. In survey, closed end questionnaires are used where respondents will be told to rate on a five point scale from strongly agree, agree, neutral, disagree and strongly disagree. Through this, exact information required for understanding underlying objectives for research will be acquired. Considering interview method, it is subjective in nature which may divert attention of respondents from questions about a Nigerian grocery store in South London to some other direction. Instead a straight forward answer method is better like closed end questionnaire. Interview method suits research that involves collection of personal and detailed information from respondents while allowing them to talk freely.

Considering observation method, since a business plan is being framed, it is important to interact with people rather than observing their behaviour. So observation method is not feasible here. Considering above discussion on all three types of primary data collection method, the most suitable one is survey method using closed end questionnaire.

Secondary data collection involves using already existent material for developing a strong base for research. Various sources of secondary data include newspaper articles, journals, books, online sources, etc. As discussed above, besides quantitative research; exploratory research is also conducted. So for exploratory research, secondary data collection will be done through article, journals and case studies to understand various trends in business and develop a strong information source for further business planning.

  • Primary data collection source: survey method / questionnaire

  • Secondary data collection source: articles, case studies and journals

Sampling

After decision regarding primary data collection source is decided, researcher has to decide on the population on which the research will be conducted. This is done before data collection as sample size from entire target population is decided by research. Size of sample depends upon requirement and their availability. For conducting primary research, author used survey method; that is closed end questionnaire in order to understand customer profile, business trends, pricing issues and competitors (Jesson, Matheson & Lacey, 2011). To get a focussed response, entire population of London city is chosen as population as products will be sold not to a particular section of people but to entire population of London city.

Considering the requirement, the sample size chosen is 50 to whom questionnaire survey will be send; so at least 30 responses were received. But before doing so, pilot survey was conducted on 3 respondents to know that there is a good understanding of questionnaire prepared. This will help to understand any further changes required in questionnaire before it is send to all respondents.

Target population/ market: London city people

Sample size: 30 respondents

3.2 Research Data and Analysis

3.2.1 Research questionnaire

Research questionnaire is designed in a manner where required information is about from respondents in simple manner.

  • DEMOGRAPHICS

  1. What is your age?

  1. 18-30

  2. 31-45

  3. 45-60

  4. 60+

  1. What is your occupation?

___________

  1. What is your education?

  1. Undergraduate

  2. Graduate

  3. Postgraduate and above

  1. What is your gender?

  1. Male

  2. Female

  1. What is your annual income?

  1. Less than 12000 pounds

  2. Between 12000 pounds and 30000 pounds

  3. Between 30000 pounds and 75000 pounds

  4. 75000 pounds and above

  1. Marital status

  1. Single

  2. Married

  3. Divorced or widow

  • Behavioural data

  1. I am willing to try new cuisine and cook it at home.

  2. I prefer using new ingredients in my regular cooking

  3. I prefer grocery shopping myself

  4. I would like to taste the ingredient and understand its use before buying

  5. My preference is to have easy to cook ingredient rather than fussy ones

  • Desirable matters

  1. I would like to buy grocery from a speciality store where I am sure to get my products rather than a general grocery store.

  2. I would prefer a person helping me out in buying grocery from a specialized store.

  3. I am willing to pay extra for speciality cuisine related grocery products

  • Respondent’s views on new business proposal

  1. I am willing to taste and cook Nigerian ethnic food

  2. I do not have a problem paying extra for buying ingredients for Nigerian Cuisine

  3. I will like to have Nigerian food more than two times in a month if I like it

Thus as seen, the above questionnaire is prepared for understanding the objectives defined for this business proposal.









3.2.2 Data collection and analysis

  • DEMOGRAPHICS

  1. What is your age?



As seen from above chart, from 30 respondents that responded on questionnaire; 10 are in age group of 18-30, 8 in the age group of 31-45, 6 in age group of 45-60 years and 60 years and more respectively. Also note 50 respondents were contacted for this questionnaire survey from which 30 respondents that agreed to be a part of this research were selected. This result shows the level of readiness to accept new things; which is found more in young crowd.

  1. What is your occupation?

For this question, 8 respondents were studying either at graduate or post graduate level, 8 respondents were qualified professionals in field of medical or finance, 8 were retired and 4 were doing part time jobs to support family.

  1. What is your education?



As seen from above table, 5 respondents are under graduate. The reason may be that still they are studying. 9 respondents were graduate while 16 were post graduate. This shows the importance of education in today’s world and a person’s willingness to understand and gain better things.

  1. What is your Gender?



As seen from above table, female respondents are more than male with 17 female and 13 male respondents.

  1. What is your annual income?



As seen from above chart, 9 respondents are in income group of less than 12000 pounds a year. The reason may be inclusion of students and few respondents who work part time.

  1. Marital status



The above table depicts marital status of respondents. From 30 respondents, 15 are married while 9 are single and 6 are divorced or widow.

  • Behavioural data

  1. I am willing to try new cuisine and cook it at home



  1. I prefer using new ingredients in my regular cooking



As seen from above chart, there is equal response for question regarding new ingredients. 9 persons agree on using new ingredients while 8 persons somewhat disagree in it.



  1. I prefer grocery shopping myself







As seen from above, 14 persons somewhat agree that they prefer doing grocery shopping themselves. This can be used as a marketing concept.

  1. I would like to taste the ingredient and understand its use before buying



As seen from above chart, preference is give on tasting new ingredient before buying it. This is due to fact then the person if given a new ingredient should know the taste and method of using it. Then only he or she will buy it.

  1. My preference is to have easy to cook ingredient rather than fussy ones



As seen from above chart, majority respondents disagree with this statement, form 30 respondents, 8 totally disagree and 9 somewhat disagree with statement. This will allow the new business to import authentic ingredients from Nigeria without considering its cooking time.

  • Desirable matters

  1. I would like to buy grocery from a speciality store where I am sure to get my products rather than a general grocery store.



As seen from above chart, considering the availability of special ingredients in a speciality store, 11 respondents somewhat agree and 5 respondents strongly agree their preference for speciality store. There is high number of respondents that is 7 who remained neutral in this matter. These respondents may serve as a strong potential base that can be tapped in marketing strategy for business growth.

  1. I would prefer a person helping me out in buying grocery from a specialized store.



The above graph shows that 13 respondents somewhat agree that help from personnel while buying specialized food ingredient will help them. Supporting this are 5 respondents’ strongly agreeing to the same. Thus keeping personnel well informed about Nigerian grocery and food products will be at store’s advantage.

  1. I am willing to pay extra for speciality cuisine related grocery products



As seen from above chart, there is a mixed approach to pricing of special cuisine grocery products. 5 respondents strongly agree and 8 somewhat agree while 7 somewhat disagree and 4 strongly disagree. This will create problem with pricing structure. So a decent approach in pricing should be adopted.

  • Respondent’s views on new business proposal

  1. I am willing to taste and cook Nigerian ethnic food



As seen in above chart, 11 respondents somewhat agree and 3 respondents strongly agree to try Nigerian ethnic food. The major part of this answer is 10 respondents being neutral in this. There is a potential for business growth by satisfying strongly agree and somewhat agreed respondents and then focussing on respondents that are neutral. This is because they might be confused about food taste and quality. This will be addressed by opening a restaurant for one year where ethnic Nigerian food will be served.

  1. I do not have a problem paying extra for buying ingredients for Nigerian Cuisine



The above chart shows willingness of respondents to pay a premium of bit higher than normal ingredient price for Nigerian grocery which will be used to make ethnic Nigerian food. Considering this, there are 10 respondents who somewhat agree and 5 who strongly agree to this statement. Nearly 50% respondents agreed to this. 8 respondents were however neutral, the reason for which will be there in experience with Nigerian ethnic food.

  1. I will like to have Nigerian food more than two times in a month if I like it



Response for having Nigerian food more than twice a month if he or she likes it is a mix bag of neutral and agreed response. As seen, 13 respondents selected neutral as they might be in a dilemma to have this food twice or not. Since they might not have tried Nigerian cuisine, only after trying it they might be able to respond on this. But the negative response to this is very less which means there is high scope for Nigerian grocery store.

OVERALL ANALYSIS

As seen from above charts, there seems to be a good market for Nigerian food products in South east London. The pricing can be kept premium in starting to take advantage of pioneer in this field. However there seems to be lots of neutral response in terms of having Nigerian food more than twice a month, paying a premium price and tasting and cooking Nigerian food. This is due to unawareness among respondents about Nigerian cuisine. Considering this, a small restaurant will be opened for one year so that people coming to this store become awareness of taste and usage of ingredients. Also for spreading awareness, a personal touch will be required.

3.3 ORGANIZATIONAL FEASIBILITY

It is the feasibility to understand legal and corporate culture of an organization.

  1. Passion and motivation of entrepreneur

Deptford afro-food mart is an entrepreneurship company hold fully by entrepreneur who will be responsible for its full working. The motivation behind this business is to sell a unique product and develop its market. The owner is a masters in business administration which shows the passion he or she has in developing a business.

  1. Market understanding

Since it is a proprietorship concern, for getting better understanding of market a business plan with market research is prepared so that understanding about market and its requirement can be developed this helps to sell product with better association to market (Harrison, 1998).

  1. Form of business structure

The grocery store and the restaurant will be limited liability Company formed and register under the Acts required. Such structure of business can be of any type depending upon the needs of funds r existence of partnership or something else with the owner.

Legal

Risk of operations

  1. Availability of personnel

For the store purpose one cashier, 2 sales personnel and one security guard will be required. And in case of restaurant business staff of 4 will be sufficient for serving 15 tables and a Nigerian cook in the kitchen prepare the orders. Such personnel will be easily available with an advertisement in newspaper.

  1. Principles and practice of business

These are laws regarding internal and external working of business. Street food business also need to apply for the street trading license and such license can be applied for temporary or permanent period. Every such location from which such business will be operated whether it will be Van or any permanent place of business should get register.

  1. Licensing arrangements

License for the grocery store in South London needs to be register before 28 days of start of any food operation. Before applying for the license contact to be made with market services. Every premise to be registered with the official from where such food business will be operated. Application to be made in business license application form for registration with prescribed fees. Within period of 21 days either application will be granted or notification will be received about the outcome of the application.

  1. Social and cultural values

The company believes in considering its customers as an integral part of their business. Their thinking and social values will be kept in mind while dealing with them. Though the products sold in market may be different form their culture, utmost care will be taken to value the ethnicity and culture of Nigeria as well as people of London.

3.3 ETHICAL CONSIDERATION

A very important component to this business plan is ethical consideration which is very important. The main concern is participation of respondents in this research. Participants will be about usage of study that it is used only for establishment of a proper response for identification of business opportunity for Nigerian grocery market in South east London and so they will be asked to provide a written consent to it. A clear statement regarding purpose of study, what is involved in it, use for this data and their contribution to research will be given to them. For ensuring informed consent, potential subjects along with information sheets that includes subject outline will be provided to them. After participants show their willingness to be a part of research, confirmation will be given to them in form of some record.

Also participants will be told not to disclose information about this research to anyone as this may be considered illegal. They will be made fully aware about non obligation of participation in research. This means they have right to withdraw at any point they decide to do so. Full care will be taken to keep their personal details confidential. Sales estimation

3.5 FINANICAL FEASIBILITY

From the market research conducted regarding the Nigerian food and species feedback of the targeted customer was wonderful. Most of them need such specialty African food shop and ready to pay whatever it takes to get the fresh material from there. The inputs for the store can be imported from Nigeria with no credit policy and these materials will be sold at a 40% profit at the store. African food and species already available in the market but such stores mainly concentrates on fast moving items and rarely make available such material on demands. On the basis of the potential of the customers researched in whole London, Deptford afro-food mart in South London found suitable for the Afro food mart. Even a little restaurant of 15 tables can also be started for spreading awareness about the grocery store for the initial period of one year. There after such restaurant will be closed and grocery store will be continued. In the initial year turnover of the grocery store is expected to be 600000 pounds and thereafter every year growth of 20% is expected for next 5 year. Revenue from the restaurant is expected to be 200000 pounds (after adjusting all expenses) for the year.

Sales forecast:

Year

0

1

2

3

4

5

Sales Turnover (Pounds)


600000

720000

864000

1036000

1244160

Revenue from Restaurant


200000





Total


800000

720000

684000

1036000

1244160



Sales are projected on the basis of market research. A 20% Growth rate is projected. Gross margin levels are expected to be maintained every year. All the buyers are expected to pay within one month and suppliers are expected to be paid on delivery of goods.

Project funding

For the start-up of business initial capital needed will be 100000 pounds. Working capital and fixed capital cover under this amount. Funds requirement can be fulfilled with own sources or other lenders or equity shares can also be issued at nominal value of one pound.

Cash flow projections

Net cash flow for the period are expected and calculated. Cash flows surplus will start from the end of year 1. In the year 1, cash will be introduced for working capital.





Year

0

1

2

3

4

5

Net cash flow for the period

-13000

265000

92000

21550

133500

173679

Opening cash balance

0

-13000

252000

344000

365500

499050

Closing cash balance

-13000

252000

344000

365550

499050

672729



Profitability

Sales growth is expected to be 20% every year and cost of goods sold is 60% therefore the gross profit margin will be 40%. Rest of the calculation is made in the following table.

Year

0

1

2

3

4

5

Turnover


600000

720000

864000

1036800

1244160

Cost of goods sold


360000

432000

518400

622080

746496

Gross profit


240000

288000

345600

414720

497664

Revenue from Hotel


200000

0

0

0

0

Total revenue


440000

288000

345600

414720

497664

*Expenses or Overheads


175000

196000

220175

248076

280358

Profit after tax


265000

92000

125425

166644

217306

Return on equity


265%

92%

125.4%

166.4%

217.3%



*Expenses/Overheads

Year

0

1

2

3

4

5

Rent of store


45000

49500

54450

59895

65885

Rent of warehouse


20000

22000

24200

26620

29282

Salary and wages


50000

52500

55125

57881

60775

Other operating expenses (10% of turnover)


60000

72000

86400

103680

124416

Total Expenses/overhead


175000

196000

220175

248076

280358










Break even analysis

From the above calculation regarding expected profitability it can be seen that due to revenue from hotel business there is increase in profitability. Breakeven point also achieved in 1st year of business without including the revenue of hotel business. Every year there is increase in profitability of Afro food mart. It means in the first year itself surplus will be disclosed and breakeven point will be achieved. It shows there will be huge success for the business and with the help of restaurant business, Nigerian specialty food will be served and automatically mouth to mouth publicity will be benefited for the grocery store. Breakeven point analysis is important due to recoverability of costs of business in the first year and thereafter profits on regular basis will be noticed in future years. Even capital invested in business will also be recovered in first year there payback year will be less than one year.

Financial risk and failure

To reduce the financial as well as operational risk of the business planning is most helpful. Everything should be planned and executed. Financial risk of being loss in capital invested, or non-movability of material purchased for the grocery stores. Loss in the value of investment in assets for the start of business such as furniture and fixtures for the grocery stores as well as warehouse to arrange the material properly. Projections are made on the basis of research and planning, chances of being decrease in sales as projected cannot be refused and all other things are dependent on the turnover of the business therefore such risk is called as financial risk. To reduce such financial risk projections should be based on the research and expertise.

Failure in the business is also the part of financial risk and without such risks new business cannot be started. Even there is risk of some uncertain and unplanned expenses and with such expense profits may also be effected. Risk of being closer of free trade policy between Nigeria and London cannot be refused and with such risk there may be increase in material cost and due to such effect profits will be reduces. Financial risk is like more the risk more will be the profits. But as the business is trading business there is more risk of non-movability of stores items and if the goods will be perishable in short period then risk of wastage cannot be refused and as a grocery store perishable items will be the part of stocks.

Sensitivity analysis

Sensitivity analysis in the presentation of the position with any percentage of change in the expected sales and comparison of the same with expected positions. In this case 10% lower sales in the first year will show the sensitivity of the transactions involved. On the basis of such change effect on the profitability, costing etc. will be studied and presented. Through sensitivity analysis change in expected growth and profitability and due to such effect whether how much time will be required to breakeven and payback duration. Sensitivity analysis is for the planning purpose that is when such things happen in future while performing business which steps will be better to be taken. Sensitivity analysis is also a type of presentation of variations in the earnings and expenses due to change in turnover expected.

4. STRATAGIC ANALYSIS AND BUSINESS MODEL

4.1 Strategic Analysis

Strategic analysis of a business is the most basic and an important tool for planning business strategy. Two methods are used for strategic analysis:

  1. SWOT – A method where strength, weakness, opportunities and are identified for a business.

  2. Value chain analysis – this method is for better understanding of business activities through which competitive advantage is developed by firm thereby creating shareholder value. The business system is divided in to a series of activities thereby termed as value chain.

4.1.1 SWOT analysis

STRENGTH

WEAKNESS

PIONEER IN NIGERIAN GROCERY MARKET

NO PRIOR INFORMATION ON RESPONSE TO NIGERIAN STORE

FIRST MOVER ADVANTAGE

 

ONE STOP SHOP FOR ALL NIGERIAN GROCERY STORE

 

RESTAURANT ALONG WITH GROCERY STORE GIVES OPPORTUNITY TO CUSTOMER TO TRY NIGERIAN CUISINE

 

 

 

OPPORUTNITIES

THREATS

PEOPLE IN LONDON LIKE TO TRY NEW CUISINE

HEAVY COMPETITION FROM OTHER CUISINES

CAN CHARGE PREMIUM PRICE FOR ITS PRODUCTS

IT IS TOUGH TO CHANGE PERSON'S FOOD HABITS

HUGE POTENTIAL WITH ALMOST NO COMPETITORS

 



4.1.2 Five Force analysis

INDUSTRY COMPETITION & RIVALRY

There is no direct competition from any other store selling Nigerian food. But there is an indirect competition from other cuisines like Indian, Mexican and Italian offering products at similar prices.

THREATS OF SUBSTITUTES

Substitutes are available terms of local food and preference for other ethnic cuisine rather than Nigerian cuisine. So there is a high level of threat from substitute

BARGAINING POWER OF SUPPLIERS

Supplier bargaining power is limited as they will also prefer selling more. This means that will increase in sales; their sales will also increase and so there bargaining power is less. Also there are many suppliers available for supplying Nigerian food in UK.

POTENTIAL ENTRANTS

Potential entrants may be either selling grocery of same cuisine of other cuisine. If other cuisine is sold, there is no threat. But if Nigerian cuisine store opens, then it will reduce monopoly that will be enjoyed by this company. So high threat of potential entrants

BUYERS

Buyers have to be convinced in buying Nigerian good ingredients. So they are in great bargaining power in starting. But once they are used to it, their bargianing power reduces.



4.1.3 Value Chain analysis

Source: http://www.coursework4you.co.uk/essays-and-dissertations/value-chain-analysis.php

Grocery value chain for Deptford afro-food mart is as below:



4.2 IDENTIFICAITON OF SOURCES OF COMPETITIVE ADVANTAGE

For identification of source of competitive advantage, BCG matrix will be used that will give a brief idea on it. It is a tool invented by Boston consulting group for classification and evaluation of company products for decision making purpose through balance with product of other companies.























Source: http://matrix-theory.blogspot.in/2011/08/bcg-matrix.html

Considering that there is no direct competition for products of Deptford afro-food mart is, it can be put in category of Stars. In this category, comparing products with competitors, since there is no direct competition or a replacement available for Nigerian grocery, people will buy fromDeptford afro-food mart. In Stars, promising products are sold by company where sales is boosted at maximum level possible.

4.3 Selection of strategies for success

After going through the internal and external environment for Deptford afro-food mart, the next step is to develop business strate4gy for success. This strategy will be built on porter’s generic strategies.

Source: http://www.businesssetfree.com/small-business-competitive-advantage/

According to Michael porter, there are three strategies to have competitive advantage. These are cost leadership, differentiation and focus strategies. Further, focus strategy is divided into cost focus and differentiation focus.

Cost leadership is the strategy used when a company produces or sells products at lower price in market to gain advantage of more market share. For doing these economies of scale, cost reduction across all business functions and efficiencies need to be achieved.

Differentiation strategy is used to create competitive advantage by selling products are of greater value to customers than other company’s products. Due to this, company may charge higher price of its products. This can be used when higher quality products with more features are sold in market.

Focus strategy is used to create competitive advantage through focus on a particular segment of customers in a market and serving them better. This could be done by developing better relationship with customers or knowing more about them then competitors. Even there are two types of strategies in this; cost focus and differentiation focus.

Considering above discussion, for Deptford afro-food mart, differentiation strategy will be used. Since the product is unique in market, company may charge a premium price for it. There are no close competitors and so there is no need of any cost leadership strategy.

4.4 Business Model

A business model is one that defines the manner in which an enterprise will operate in order to deliver value to customer, make them pay for that value and converting those payments into profit. The business model adopted for Deptford afro-food mart is an offline model where a store is opened. There are 9 blocks of business model discussed below:

  1. The customers: the market will be single sided as no niche will be focussed. Instead entire population of London city is the target segment. A segmented approach wherein people looking for ethnic Nigerian grocery will come to Deptford afro-food mart that will be willing to pay extra for these products (Buttle, 2004). Deptford afro-food mart is creating value for people looking for authentic Nigerian food or its ingredients.

  2. Value proposition: Deptford afro-food mart is a retail store focussed on selling Nigerian grocery which will make people come to store for it. Since this is unique product selling store, people will be willing to pay [premium price for this. people are fond of different cuisine and through this store, they can buy ingredients for Nigerian food and cook it at home. Also searching specialized ingredient becomes difficult or person has to search online or order form other countries which is costly and also time consuming. So through this store, the problem mentioned will be solved. People can enjoy ethnic Nigerian food sitting at their home.

Newness if offered to the market in terms of grocery and food. Also they will have easy access of products which were tough to get earlier.

  1. Channels: awareness will be raised about Deptford afro-food mart through advertisement in local areas and online advertisements. Since one store is opened, people will be made aware through newspaper advertisement too. Customers will be able to purchase products by visiting store or ordering it on phone. A small restaurant is opened in store to enhance their value proposition and add newness to their food. Post purchase support will be provided by informing customers of new product arrivals through SMS if they register for it. Also if clients ask for particular recipe, the same will be provided on email. This way a two sided relation can be developed with customers.

  2. Customer relationships: In order to gain sales and acquire customers in starting phase, dish of the day which will be a Nigerian dish will be given to customers on discount. Also a small kit of ingredients required for a simple recipe will be given to every 100th customer. This will create more walk ins thereby generating more sales. Reference scheme will be used to get more customers and boost sales. A local competition for Nigerian food will be kept every 15 days in restaurant kitchen itself. This will draw good crowd which will ensure good relations with clients. There is no much cost involved in these activities.

  3. Revenue streams:the newness and freshness served by Deptford afro-food mart through ethic Nigerian food for which customer will be willing to pay. Though they might be paying less for other regular food, this being a specialized store, they will pay a premium amount. Customers prefer grocery that can be cooked and is in accordance to their taste. So to develop taste, restaurant with sitting arrangement for 15 persons is done for a year. This will ensure growth in revenues with increase in customers.

  4. Key sources: key sources for Deptford afro-food mart is the product quality and ethnicity. For this cash sources, a shop and a storage space needs to be hired. Key sources of revenue are the sales generated through selling of ethnic Nigerian products.

  5. Key activities: value proposition require activities like product design and delivering. The packing will be such that it shows ethnicity in product and product delivery will be done as per customer request on minimum bill of 25 pounds. There will be a single chain of distribution where products will be directly imported. Combo offers will be given where two ingredients are to be mixed together for a recipe. Platform promotion will be used.

  6. Key partnerships: Alliance will be held with leading restaurants to serve ethnic Nigerian food to its customers from second year. Once the business grows, after five years, company plans to open more stores in city.

5. BUSINESS PLAN

5.1 Business plan assessment

5.1.1 Product

As seen from the research, people are interested in trying new cuisine. This means that there is less reluctance for acceptance of Nigerian food among Londoners. Still they should be pursued in trying Nigerian food. Due to this restaurant will be opened for a year which is a good strategy, this will ensure that people taste and understand ingredients. Thus the product chosen is unique and has a good opportunity.

5.1.2 Risk issues

There are various types of risk involved in business. First is product risk which is solved through thorough research done about acceptance of product in market. Another risk involved is supplier risk, for which a list of different suppliers will be kept along. Even financial risk is handled aptly in financial assessment. So the business plan is apt in taking care of all types of business related risks.

5.1.5 Marketing matters

There is a clear specification about the target market and manner in which they will be focussed. Business plan shows that differentiation strategy along with start strategy will be adopted. Besides various activities to attract customers are mentioned in business model thereby ensuring apt marketing matters are covered in business plan.

5.1.6 Organizational feasibility

In business plan, it is ensured that Deptford afro-food mart is organizationally feasible in terms of legal, moral, ethical and employment matters.

5.1.7 Overall resource sufficiency

All resources required for Deptford afro-food mart as mentioned. This includes basic grocery acquirement, to building required for grocery store and restaurant, finance requirement and personnel requirement



5.2 BUISNESS PLAN SCHEDULE

  • Proposed plan of action

task numbers

description

week

1

market survey and feasibility

3

2

funds arrangement

2

3

deciding on location and suppliers

2

4

finalising place and establishment of store

4

5

hiring personnel

1

6

opening store

1



  • Gantt chart for same is as follows:

task numbers

description

week 1

week 2

week 3

week 4

week 5

week 6

week 7

week 8

week 9

week 10

week 11

week 12

week 13

1

market survey and feasibility

 

 

 

 

 

 

 

 

 

 

 

2

funds arrangement

 

 

 

 

 

 

 

 

 

 

 

 

3

deciding on location and suppliers

 

 

 

 

 

 

 

 

 

 

 

 

4

finalising place and establishment of store

 

 

 

 

 

 

 

 

 

 

5

hiring personnel

 

 

 

 

 

 

 

 

 

 

 

 

 

6

opening store

 

 

 

 

 

 

 

 

 

 

 

 

 



5.3 CIRITICAL SUCCESS OR FAILURE FACTORS

Considering that Deptford afro-food mart is a Nigerian grocery store, the critical success factors can be as follows:

  1. Uniqueness: since the product is unique in market, it may enjoy a different position without much competition.

  2. Place for expansion: the restaurant is opened only for one year for developing taste. So from second year, Deptford afro-food mart can expand the place by adding more products.

  3. Innovation: innovation in food is the trend today. More and more people are trying new food. So introducing Nigerian food in London will give a new innovative product to people to try on. Also company will have to come with new products and recipe to ensure customers are not bored of same food.

  4. Product range: a wide range of product should be available at grocery store as people looking for ethnic Nigerian grocery will come there. In case product is not available despite of being an ethnic one, it may go against business.

  5. Service: providing service like guiding customers about product and giving them information about their usage and recipes is very important. Besides this, customer’s if order a product on phone or ask to inform them on arrival of a particular product, should be reverted with necessary details. This will add loyal customers to Deptford afro-food mart.

  6. Promotion: since product is new, promotional activities to attract customers in trying this products and making food using Nigerian grocery must be conducted. This will spread awareness and ensure repeat sales.


6. CONCLUSION

Looking at the above discussion, business plan is prepared keeping in mind various aspects of business and its requirement. Feasibility is conducted about business in terms of market, organizational and financial feasibility. This shows that business is feasible and has a long term prospect. There are high chances for business to grow and expand in future.

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