Expand Your Business

To Build or Buy

Curtis Taylor

Professor Angela Harris

Small Business Management

July 31, 2017

Any individual or group of people aiming to start a small business consider many factors before making his or her choice for the type of business that may work within these factors. In this case, coffee shop stands the best option that can attract huge profits following its high demand in the current market. Likewise, coffee business is more appropriate in that it requires a small amount of investment to start a coffee shop. In addition, it requires easy foundation to get the resources and the working capital needed to start a coffee shop. This process only takes few days to complete and start the business. Moreover, other aspects and factors are also considered to achieve success in the business.

Strategy for the Business Concept; in most cases, when starting a business, it is important to adopt a business plan. In this case, business plan serves to ascertain whether the idea of running a coffee shop is feasible. When starting a Coffee shop, business considers various aspects as a strategy for a successful business concept that occurs after a period of extensive business research and development before predicting the possible outcome for the business.

Definition of the Business and Vision: The first step when establishing the coffee business is the definition of the business and the expected vision to build a driving force for the business that works towards achieving the business vision. Likewise, the question of the target customers also arises when defining the business vision. In addition, making sound decisions on the expected product and services also contributes to the success and growth of the business. In this case, the business aims to consider the plan for the business growth. This is achieved through taking the opportunity to differentiate its product to secure a competitive advantage over their rivals in the market (Kim & Mauborgne, 2013).

Goal Setting refers to the process of identifying what the business aims to accomplish. It involves establishing measurable targets within a given timeframe. To develop the coffee shop business, it is possible to create a list of business goals with the brief description of the actions towards achieving them. In this business, the primary goal of the coffee shop would be to take competitive advantage of the market for the next five to ten years of operation. Additionally, the goal of this business would also include the need to attract more customers by improving their services mostly the taste of the coffee.

Likewise, understanding the Customer entails the ability of the coffee business to value and consider customer needs as vital in the process of making the business to grow. In every business, customers form the target market for the business. Therefore, this business must establish frameworks and the necessary plans that give value to the customer needs by judging their requirement and fulfilling their customer expectation in the best way as compared to their competitors in the market.

Recognizing competitors gives a better opportunity for the business to outperform its competitors in the market. As a business strategy and concept, it enables the business to learn weaknesses of their competitors and then make the possible strategies to outperform them. In most markets, competitors affect the entry of other businesses in the market for their selfish benefits. Therefore, understanding the secrets of their competitors is an outstanding strategy to achieve a competitive advantage in the market; this makes different businesses to compete fairly in a competitive market (Kim & Mauborgne, 2013).

Financial consideration is another aspect and one of the primary factors that serves to perfect the strategy and the concept for the success of the coffee business. Financial arrangement is a fundamental concept that occurs during the startup of the business. Therefore, making financial projections for the coffee business regarding making money through the business is a major factor when doing business planning. In addition, making an analysis of various break-even points, balance sheets as well as profit and loss analysis helps the business to perfect its performance and predict its outcome in the prevailing market.

This concept helps the coffee shop to accomplish the changing needs of the business. When doing business planning, identification of a marketing strategy is mandatory. For the coffee business, marketing strategy helps the business to increase its efficiency in its operation in the market. Marketing strategy also helps businesses to adopt the right promotion and brand naming of the business. For coffee business, the priority is to identify the target market and to identify the marketing tools and other methods essential to promote the coffee business effectively.

When deciding whether to open a new business or purchase the existing one, various factors are considered. For the coffee shop, opening a new coffee business is the best option whose advantages outweigh those of purchasing an existing one. A newly opened coffee shop attracts high chances for growth opportunities, and it needs less investment than purchasing an old one. Since a business research is always conducted before opening a new business, it is evident that the new coffee business would seek to adapt to better and new marketing trends.

Secondly, the business place is very vital for business growth, therefore before opening a new business research helps to determine the best location for the business regarding target market and convenience to reach. Likewise, opening a new business stands the best option in that, customers in most cases prefer to give a test to newer products in the market than the existing ones they are used (Samson & Daft, 2012). Opening a new coffee business helps those conducting the business to develop and learn business ideas that match the current market needs. It also stands the best chance for the business to expand its operation to other areas.

Purchasing an old coffee shop does not promise future expansion and success of the business, since the old established business infrastructure may not work well with the new technology. Additionally, purchasing an old business makes it difficult to create a new brand name; development of a new brand name that comes with starting a new business is risky. Starting a new business is established as less risky, it does not have hidden problems such as debts on the business. It is evident to conclude that starting a new business is better than purchasing an old one in that; new business requires easy operations and strategies that serve to attract customers by use of new technology marketing tools. Moreover, the coffee shop is one of the businesses that are less risky to start in the current world market (Samson & Daft, 2012). This is because most people in most populations prefer taking coffee for taste and energy than any other drink.

When determining the most appropriate form of business ownership, various factors are considered. For the coffee business, the most appropriate form of ownership is sole proprietorship because coffee shop is a business that is tied up to the owner. The owner of the coffee shop can choose to run the business brand name that captures an attractive picture to the public. In this type of business, the owner and the business seems inseparable because of its small size. At the same time, Sole proprietorship is the most applicable to this case because coffee shop is a small business that needs a small amount to start a business. The minimum capital to start this kind of business is relatively not high thus affordable to start and manage the business. Sole proprietorship is a form of business ownership that does not require lengthy legal processes to start.

The process to acquire a business license and other required documents for the start of the business is easy. Since the owner of the business in most cases acts as the manager, it is easy to manage the business income and expenses. When the coffee business makes a profit, the owner of the business enjoys full credit, increasing the possibility of the business to grow. Likewise, the owner of the business is responsible for any tax due which in most cases is lower for small businesses (Kennett, 2013). Despite the many advantages associated with this ownership of activity, it has the disadvantage in its personal unlimited exposure during the business operation. In this case, personal assets for the owner of the business can be taken mostly to pay company obligations.

The business plan for the coffee shop is also an important aspect that serves to increase its growth and profit capability. When making a business plan, the following factors are vital; First is the company summary. Coffee shop in most cases sells coffee and other beverages such as snacks. In this case, the total area for the coffee shop can cover almost 2,300 square feet. Fits similar to the premium coffee bar situated near the university campus in U.S (SBA, 2014). For the coffee business, the startup cost ranges from $210, 00. Second in the business plan is the company ownership.

As stated earlier, the ownership of the coffee business is a sole proprietorship. In this case, the owner of the business only needs to have business skills and working capital to start and manage his or business effectively. The third point for successful business planning is the business objective. The primary objective of this business is to have a competitive advantage in the market for producing the best coffee in the area. This competitive lead helps the coffee business to yield more profits as compared to its competitors. Another aspect is the future success of the business, the design of the store must appear attractive for fast and efficient customers. Likewise, enhancing new technology in their service delivery and training helps to improve their products and services (SBA, 2014).

References

Kennett, P. (2013). A Handbook of Comparative Social Policy, Second Edition. USA: Edward Elgar Publishing.

Kim, W.C. & Mauborgne, R. (2013). Blue Ocean Strategy: How To Create Uncontested Market Space And Make The Competition Irrelevant. USA: Harvard Business Press.

Samson, D. & Daft, R.L. (2012). Management. USA: Cengage Learning.

SBA (2014). Starting and Managing. Retrieved from: http://www.sba.gov