1: Type of Business

P1: In this task I will prepare and present a business plan. The business I have chosen to use is a franchise called Subway. I will be focusing on the 10 headings shown below.

Your chosen business type
My idea is to set up an established franchise. Therefore I have chosen to start up is Subway. It is a franchise business that has more than 1,493 in the U.K and Ireland alone. Also they have 32,502 stores in 91 countries world wide. Franchising is the practice of using another firm's successful business model. Subway is a business that primarily sells submarine sandwiches also many stores offer Cookies, muffins, and Danishes which may be purchased in a variety of flavors. Although it is already a well-established brand name, I believe that in the correct location my own store will have the potential to make a lot of profit and survive.

Your aims and objectives
The main objective of any business is to maximise their profit levels. The aims and objectives for my business will be to make a profit also to increase customer satisfaction, because if the customers are satisfied they will want to come back. In my Subway store I am aiming to start the first drive through restaurant, as I believe this will attract even more customers.

Existing Subway missionary statement: "To provide the tools and knowledge to allow entrepreneurs to successfully compete in the Quick Service Restaurant industry worldwide, by consistently offering value to consumers through providing great tasting food that is good for them and made the way they like it."

Additional research other objectives businesses might have.

Your unique selling point and the competitive edge you will have
My businesses unique selling point will be giving my customers the choice to choose which fillings or types of breads they wish to eat for their sub, also offer a wide range of toppings and sauces. There are nearly two million different sandwich combinations available on the SUBWAY menu. This flexibility will give the customer their needs and we will gain the loyalty.

Potential demand for your new business
There is a lot of demand for subway, as it is a food franchise and there is also a high demand for food. I can work out the overall potential demand for my business by looking at other subway franchise stores and speaking to their owners. I will also carry out primary and secondary research such as surveys and ask the local people what they think. After conducting research and analysing it I will then be able to get an idea of the level of demand.

This is a link that contains additional information
http://www.acquaint.me.uk/SOW/Identifying_Target_Market.pdf

How you will balance your personal and business needs.
I believe having a balance between my personal and business needs will not be that difficult as subway is an international franchise and as the owner I will not have to be working their everyday 9-5. I will have trained employees working in the store. Therefore I will have enough time to manage my personal needs as well as business needs and responsibilities. I will have a set time when I will visit the store and make sure things are running smoothly.

Here is an article on the balance between work and life.
http://www.healthatwork.org.uk/pdf.pl?file=haw/files/Work-lifeBalance.pdf

Potential profitability
As subway is already a developed business, the profit levels will depend on the location of the new store, also the area. There is a lot of demand for subway as it is a healthy food choice. I will estimate that my stores potential profitability will be:

Weekly: £5,000

Monthly: £5,000 x 4 = £20,000

Annually: £20,000 x 12 = £240,000

Looking at the estimated figures I think that my business will do well and I will make a profit.

Business trends
The trend for subway is pick and mix. Before this trend it was previously the BLT. A trend that Subway has followed is having cash cards for customers. These are used just like gift cards or personal spending cards. Customers can use this card to pay for meals also money can be added to the card at any time.

Below is the link to the article
http://www.restaurantnewsresource.com/article25408-SUBWAY_Restaurant_Chain_Introduces_Electronic_Cash_Cards.html


PESTLE analysis
This examines the external environment and the global factors that may affect a business. It can provide a quick and visual representation of the external pressures faced by a business.


Your self-esteem
When starting the business my self esteem will be low, as I will be new to all of this and I will not be so confident. Therefore to improve my self esteem I would like to have a mentor such as Emma Wimhurst. This is because she uses a 7step business discipline scheme which has proven to work. This scheme helps to achieve optimum control, growth and have an impact in order for your business to boom. I believe that this will help me improve my self esteem and confidence.

http://www.bstartup.com/seminars/emma-wimhurst.html

How business planning will help you to ensure your success
For a business to be a success they must first have a plan that is realistic. A plan will make it easier to keep organised and do everything properly. It will help the business get started and run properly. The plan for my business would be:
· Type of business
· What market you want to target
· Human resources
· Financial resources
· Growth and developmenthttp://www.bized.co.uk/virtual/bank/business/planning/index.htm

2: Target Market

P2: Methods that can be used in order to more accurately identify a business’s target market

Market research: this is an essential framework that each business needs to carry out before they start up a business. I will be conducting market research on many things before I open my business. Gathering information about the market that you wish to enter will benefit you as you can learn the market. Also you could carry out research on your competitors and their products and prices. For my Subway franchise I will be carrying out some primary research, but due to the business already being well established and successful I will use secondary research as it will save a lot of money and time.

· The primary research I will be focusing on will be conducting surveys and questionnaires. The location of my business will also be very important as there has to be a demand for a Subway store otherwise I will not be able to make a profit. Therefore I will ask the local community and customers to complete questionnaires and surveys asking them questions such as, If there was a subway to open here how often would they visit it? This research will help me consider whether I am opening my business in the right location.

· The secondary research I will be carrying out will be through the internet and interviewing other subway franchise owners. On the internet I will find research on other stores and older surveys and questionnaires, data that has already been published. By analysing all the research and information found I will be pretty confident to open my new business.

Sales forecasts: involve using a statistical technique that predicts sales figures. This is normally done by analysing and identifying the businesses past sales trends and projecting them into the future. However because there will be no past data with a new product sales forecasts will be difficult to make with certainty.

Using the research gathered from conduction primary and secondary research I can analyse and try to predict my sales forecasts for the future.

On average each customer will spend about £3 on a sub. My business will be making £240,000 annually.

£240,000 / £3 = £80,000

Customer behaviour analysis: it is important for a business to understand a customer’s actions and choices. This can be done by looking at the behaviour of potential customers. You could study a customer’s behaviour by researching how, when, why and where consumers purchase products from and where they do not. I could also analyse customers behaviour by looking at my competitors sales figures and look at what areas they are getting more sales and why.

Other factors such as the environment also affect customers buying characteristics and their decisions to purchase products or not. I will therefore have to look at and make sure that my business is meeting the customer’s wants and needs.

20% of my customers will be moderate means which include the following groups Asian communities, post industrial families and blue collar roots, the types are between 37- 43. Also 15% may be comfortably off which include the groups, starting out, secure families, settled suburbia, prudent pensioners these types range between 24 & 31.

http://www.caci.co.uk/acorn2009/acornmap_ext.asp


Competitor analysis: it is very important and vital that a business analyses its competitors. This involves firstly assessing the level of competition, to then establish the degree of rivalry that is faced in a particular market. The closer the rivals are the more competitive the market is likely to be. Therefore it will be more challenging for a new business to become established and survive.

Subway has many competitors in the fast food retail industry, such as McDonalds, Burger King, Greggs and at the upper end of the market they are competing against Prêt A Manager.

The strengths that my competitors possess are that they are well established businesses and have been running over a longer period of time. Additionally my business competitors already have an existing strong relationship with their customers. The weakness that my main competitors have is that they do not offer the same level of service as my business has, as you cannot create your own sandwich. Also my business offers an alternative healthier choice compared to other fast food retail chains.

Strengths & Weaknesses: this is basically identifying a new businesses key strengths and weaknesses. For example strength can be a USP that a product offers. On the other hand a weakness could be lack of brand awareness.

Strengths:
· Menu reflects demand for fresh, healthy and fast food
· Customizable menu for customers
· Worldwide brand recognition
· Subs are prepared in front of you
· Over 2 million different combinations to chose from
· Subway stores do not take up a lot of space
· Increase in the number of stores open

Weakness:
· Many subway stores do not have adequate seating
· Stores don’t stand out as much as competitors
· stores are not as modernised as competitors
· do not appeal to children as much as their competitors


Market trends: involve a business looking at patterns in the market. For example a market trend could be growing sales; however this information will be much more useful if you could identify specific features such as that the 10-15 market for this particular type of product is growing.

Consumers are increasingly choosing fast food because they have less time to cook. The market has witnessed a growth in health conscious consumers choosing healthier options such as fresh sandwiches, instead of the traditional burger and fries. Therefore fast food chains have started following the trend of healthy eating. Subway already advertises healthy eating however its competitors are also introducing healthier options for consumers.

Restaurants such as Subway, for example, often require little or no cooking apparatus, which means they can open a restaurant in smaller locations that are not necessarily suitable for a large burger restaurant. This is reflected in the growth of the bakery fast food sector compared to burger chains.

The economic outlook: is something that can have a huge impact on the potential success of a business. For example, if interest rates are forecast to rise in order to tackle inflation, this could reduce demand for many products as households may have less disposable income and the cost of credit may rise.

I must consider the economic outlook when starting up my business as it is a vital factor that will have an effect on my business. We are still recovering from the recent recession, meaning that people do not have a lot of disposable income. This will have a great impact on my business as customers may still not be stabile enough to spend money on food. However my business is providing healthy food at an affordable price and is also an alternative to eating out at expensive restaurants. Therefore people are more likely to purchase a Subway sandwich.

The ‘green’ agenda: this could be examining consumer preferences relating to environmental issues such as, customers preferring products to be sold in recyclable packaging.

My business is a food retailer therefore it is very easy for my business to be environmentally friendly. I will place recycling bins outside for customers to recycle their waste and bottles. I will also recycle all out of date products, cardboard, paper and plastics. Finally, I will ensure that the packaging of all my products express the terms “please recycle”.

3: Human Resources

P3: For this task I am required to analyse the specific skills that are needed for me to run my business successfully. I will also complete a skills audit form which will include my businesses strengths and weaknesses.
Part A: Skills required to run the business
Identify the specific skills required to operate the business successfully
My own contributions
My role in the business is the owner therefore it is a very important role. It is vital for me to provide the skills required to make the business succeed. This will mean I will need to develop new skills as well as utilising those that I already have. It will not be possible for me to possess all the skills required therefore I will need to consider recruiting the correct selection of employees.
Technical and Operational skills
I will need to consider the most important skills that will be required within my business. As my business will require a unique blend of skills, I will need to consider the certain skills that are needed.
For example the skills I will require include:
· an experienced touch screen till operator
· some form of experience in the fast food industry
My subways store will be unique as it will have a drive through option, therefore I will need certain technical equipment to ensure this runs smoothly.
Human Resource skills
The skills required in this department will include:
· Organisational skills
These are needed to ensure that my business is running successfully and efficiently. Furthermore it will also enable customer satisfaction.

· Time management skills
This is very vital as subway is a fast food retailer and is known for a fast production line of sandwich making. It is also imperative that all employees possess this skill as their time keeping will assist the success of the business.

· Customer service
This is one of the most important skills required as good customer service results in customer loyalty and satisfaction.

Marketing skills
My business is a Subway franchise therefore I will not need much marketing skills. However I will need to advertise my store, also in store deals and the menu. Moreover I could use these skills in order to keep up to date with my competitors and current trends in the market.

Financial skills
These skills are fundamental in the success and profit of my business. Financial skills are required as it enables the business to work out its break-even point and calculate how much profit and loss is being generated. For example if the business is not generating enough profit to break even then they can calculate and examine their financial records to solve the problem.
Part B: Personal skills contribution
Conduct a personal skills audit. Describe, in which areas, will your skills make a positive contribution to running of the business.

My personal strengths
I posses the following strengths:
· I am a Confident individual and this will help me command my work force and customer care.
· I am hardworking; this will benefit my business as I will work hard to achieve the best possible outcome.
· I have good communication skills, this will help me communicate well with my personnel as well as customers and other stake holders.
· I am a patient person; this will enable me to deal with situations in a rational manner.

My personal weaknesses
My weaknesses are:
· As this is my first time opening my own business, I feel that I lack some of the essential experience and knowledge.
· I do not have the financial skills required, therefore I will have to hire professional help and this will substantial amount of funding.
Skills and abilities I do not have
· Financial skills
· Technical skills
· Operational skills

How I will compensate for those weaknesses (including timescales)
To compensate I will ask a family/friends who runs a successful business and posses the skills I lack to help and advise me through the first initial 3 months of opening.

What I will do about each of those missing skills and abilities (including timescales)
I will go on a part time evening course to develop my understand and knowledge. I will also seek advice from other Subway franchise owner. Subways also offer a support network and training for new franchise owners.

http://www.subway.co.uk/business/franchise/support_network.aspx
For my second weakness i will employ a professional experienced financial advisor who will who will analyse and then advise me on the needs of my business monthly.


Part C: Skills gap and development

In the Short term I will consider hiring contract workers to do the jobs that I need to make my business succeed.

In the Long term I will send staff of a 1 day a week course to get a diploma in management as subway is a franchise and I will not need to focus on marketing.

http://www.subway.co.uk/business/franchise/what_skills_do_you_need.aspx

4: Legal & Physical Resources

Legal aspects:

Legal status
The legal status for my business is franchise. Franchise business owners have the fulfilment of running their own business, although still belonging to a large organisation provides them with security. The products sold for Subways are tried and tested, furthermore Subways would provide training and uniforms for my staff and I. Additionally I can take advantage of subways national advertising campaign which is designed and paid for by the franchisor Subway.

Legal liability
Subways has limited liability but also has unlimited liability. Unlimited liability will mean that I will be personally responsible for all the debts of the business. Therefore, if my business fails to give the money on time to the creditors, the courts can order my personal assets to be used in order to recover the debt.

Trade terms and conditions
As my business will be selling food products. I will make sure the details of prices and payment terms are made clear before completing transactions with customers. Furthermore, when dealing with suppliers I will make sure the terms on which I purchase are clear.

Trading standards
It is important that I am aware of the trading standards in relation to the responsibilities I have toward customers. For example I should be aware of the implications of consumer rights, fair trading, food laws etc. This will have to be considered before I commence trading.

Licences
When starting up my Subways franchise I will need to consider the implications of requiring a licence in order to operate. For example if I require the shop remain open till late I have to apply for a premises licence. Most licenses are provided by local government departments, whereas others are granted at a national basis.

5: Financial Resources

Financial aspects
Managing the financial aspects of my business is important and essential to reach my aims and objectives, as poor financial planning may result in failure for my business.

Survival budgets
When starting my business I must consider a budget. It is essential that my business generates enough income in order to survive in the business category and personal. There are many various ways the records of the amount of money coming in and out of the business can be kept. An example of this is that I can monitor the budgets by creating a table that demonstrates the amount of income that is coming in and out, additionally the dates will of profits and losses must also be stated.
Premises and the cost
The location of my business is Vancouver in Canada. The reason I have chosen this location is that it attracts many tourists and therefore is a very busy city. Furthermore, property to purchase on a freehold or leasehold is not expensive and this would be a good investment.
Equipment
The equipment that is needed to set up my Subways store and function is all provided by the Subways Company as they have the same shop layout and equipment in every store. Based upon other Subways franchise owners and the Subways Companies own advice I will have an idea of the costs of equipment.

Suppliers
The raw materials for my products are mainly bread, vegetables for the salad, various meats etc. It is important that I choose suppliers who provide the best products in order for the quality of the subway sandwiches to be at a high standard.
Employing the staff
Upon employing the correct staff who have had some experience in the fast food industry. I would pay my staff minimum wage which is £5.70 as this is the pay available to employees in other subways stores. Additionally I will have to consider making national insurance payments on behalf of the employees.
Pricing policy
The prices of my products have been determined and set by Subways already, the advantage of attained a franchise

Cash-flow forecast
It is important that I have good cash planning, if cash flow has not been forecasted well it could mean the failure of the business. Therefore it is important that cash flow is forecasted and considered, as this will enable me to plan ahead. Additionally, the cash-flow forecast lists all of the cash receipts and payments every month and keeps track of the monthly bank balance. This will enable me to plan ahead more effectively.
Profit and loss accountUpon creation of a cash-flow forecast, a profit and loss account and balance sheet for the company to show levels of gross and net profit or loss. Furthermore, the breakeven can also be calculated from the cash flow forecast. Calculating the breakeven would be very helpful when starting up a new business, as this will allow me to identify how many products I would need to sell in order to break even, making sure that my company is successful.

6: Growth & Development

5 Year Growth & Development Plan

In the Next 5 Years I plan on making my Subway franchise a very successful and profitable business. I will also develop my business by purchasing another franshise store. Also as my USP is a drive through Subway I would like to compete with new markets.

I believe that in the next 5 Years my business would have made a successful name for itself as the new and modernised Subway. Also i will be generating a healthy profit.

7: Financial Contingency

Sources of Finance:

Personal savings of your own
Personal savings is a good source of finance. Using your own savings does not cost anything, other than the loss of interest that would have accumulated if the money was in the bank. Additionally, using my own money would help convince would help persuade bank to loan you money if need.

Overdrafts
An overdraft is used to ease temporary cash-flow problems, and therefore not used for purchasing capital. This would be useful when paying bills if there is not enough money in the bank to pay it. An overdraft would be an agreed amount which would have to be paid back in a certain amount of time, furthermore the interest rate is fairly high.

Bank loans
Bank loans are for available from a range of a thousand to one hundred thousand pounds, depending on the project and the amount of security available to pay the loan back. A bank loan can therefore be used for purchasing capital items and they are usually granted for extended periods of time.