Unit 19 assignment 2 zayan ahmed

P3: Explain your marketing plan for a selected micro-business

Aims and objectives of a business

aim – one aim of my business will be to understand customer needs and want, this is because
customers are very important for the business to do well and develop, without theirinput it will be
harder to deliver a good service to them

Objective – at the start of the business the objective will be to get at least 30% of people in my local
area to test the website for my business where customers will be ordering from andgive feedback on
how I could improve it and improvement on the delivery service.

Aim – another aim for my business would be to develop customer loyalty, I would do this by offering
discounts to loyal customers and customers who first start to use my service.

Objective – the objective will be to try and increase sales by 40% within the next 6 months

These are different from already existing services because for my business I will try to get as many
people as possible to test the service and get ways on how to improve my service to make it more
comfortable for others to use.

Market analysis and planning

Target Market

In identifying my target market, I will focus on catering to a niche segment due to the specialized
nature of my delivery service. Customers will have the convenience of accessing and ordering
products through an online website, enabling them to have their purchases delivered directly to
their homes. To gather insights for defining my target market, I conducted secondary research,
examining established businesses in the same industry such as Just Eat and Deliveroo. Analyzing
their target demographics and market establishment strategies provided valuable inputs,
considering they operate in a similar fashion to my business.

By aligning my target market with these successful companies, I aim to tap into a customer base that
has already shown interest and engagement with similar services. However, it's important to
consider that targeting the same market may come at a cost, potentially affecting profit margins.
Therefore, I need to carefully strategize and differentiate my offerings to capture market share
effectively while maximizing profitability.
Based on my research, I have identified a diverse age range as my target market, but I have chosen
to focus primarily on teenagers, middle-aged adults, and the elderly, as they are likely to benefit the
most from my service. This decision stems from the observation that the majority of my company's
services will be utilized by these age groups. Furthermore, competitor analysis revealed that
adolescents and middle-aged adults (16-40-year-olds) formed the largest customer base for similar
delivery service providers. As my service does not have a specific gender focus, I anticipate attracting
customers from both sexes.

Considering the affordability factor, the income requirement for using my service will not be
excessively high, ensuring accessibility for a wide range of individuals. Social class and profession are
not expected to have a significant impact on the likelihood of customers purchasing from my
company. Moreover, given the advanced state of technology and the increasing prevalence of online
activities, targeting teenagers is particularly strategic, as they are adept at using digital platforms.

Initially, I plan to establish my target market in London. If the business performs well and gains
traction, expansion to other locations within the UK and eventually on a global scale is part of my
long-term vision.

By carefully defining and targeting my niche market, I can tailor my marketing efforts, product
offerings, and customer experiences to meet the specific needs and preferences of my target
audience, driving customer engagement, satisfaction, and ultimately business success.

Market Research

To gain insights into my target market, I conducted secondary research utilizing data obtained from
various websites. This approach allowed me to identify the specific needs and preferences of my
intended customer base. Through my research, I discovered that the primary target market for most
delivery services is the youth demographic. This finding aligns with the changing preferences of
teenagers, who increasingly prefer on-demand food delivery systems such as Pizza Hut, Domino's,
and Papa John's, over traditional dining experiences at restaurants. The appeal of these services lies
in the wide variety of food options available for delivery and the convenience of online payment,
which can be easily accomplished with a few taps on their smartphones (JungleWorks, 2021).

Considering the widespread use of smartphones in today's society, I have determined that my target
market will consist of smartphone users. The prevalence of advanced technology has made it
possible for individuals to perform numerous tasks with just a few taps on their mobile devices. By
offering a delivery service accessible through a dedicated app and an online website, I can effectively
engage a larger target audience and facilitate convenient interactions with my business (The Social
Grabber, n.d.).

One crucial aspect that emerged from my research is the importance of timely deliveries to my
target market. While examining customer reviews for existing delivery services such as Just Eat, I
noted that many individuals expressed dissatisfaction with the punctuality of their food deliveries, as
well as instances where items were missing from their orders. To ensure a positive customer
experience and avoid such pitfalls, I am committed to addressing these concerns and implementing
measures to provide timely and accurate deliveries (The Social Grabber, n.d.).
By incorporating the findings from my secondary research into my business strategy, I can tailor my
offerings and operational processes to meet the specific preferences and demands of my target
market. This customer-centric approach will allow me to provide a superior delivery service that not
only meets but exceeds customer expectations, leading to increased customer satisfaction, positive
word-of-mouth, and ultimately, the success and growth of my business.

customers also like to have a wide variety of options available to them, by selling my products on my
website which have good quality but are affordable at the same time will want to make customers
purchase from there as many people look for products that are good quality but less costly. Without
having many options customers are most likely to purchase their items from a different store so I will
need to make sure to keep my customers satisfied

Primary research

I have conducted primary research as well to identify my target market, their needs and howI will
meet their needs. I have done a survey and asked people to complete it so I could identify their
preferences

Survey:

How often do you shop for your groceries?

( ) Once a week

( ) Every month

( ) More than once a month

( ) Less than once a month

( ) None of the above

If your order is not going to be delivered on time, how late would you expect it to be delivered?

( ) 10 minutes late

( ) 15 minutes late

(•) 1 hour late

( ) 30 minutes late

( ) Other

How often do you use your phone/computer to order products?

( ) Everyday
( ) Few times a week

( ) Once a month

(•) Few times a month

( ) Other

How often do you go to stores to purchase your products rather than using online apps?

( ) Everyday

(•) Once a week

( ) More than once a month

( ) Less than once a month

( ) None of the above

What is your preferred method of ordering?

( ) In person

( ) Telephone

( ) Email

(•) Via the company website ordering service

( ) None of the above

How important is the availability of a certain product?

( ) Not important

( ) Makes no difference

(•) Important

( ) Very important

( ) None of the above

After analyzing the responses obtained from the survey, it is evident that a significant portion of the
target market prefers utilizing their smartphones and computers, as well as online platforms, for
ordering products. This shift in consumer behavior can be attributed to the impact of the COVID-19
pandemic, which has prompted individuals to prioritize convenience and safety by opting for online
grocery shopping. By gaining insights from the survey, it becomes apparent that the identified target
market primarily consists of adult consumers aged 18 and above. This valuable information allows
for a more focused and tailored approach in catering to the needs and preferences of this specific
demographic.
The survey questions effectively aided in comprehending the target market dynamics, thereby
enabling a better understanding of their preferences and behaviors. The findings demonstrate the
importance of adapting to the changing market landscape and the need to provide a seamless and
efficient online shopping experience. By recognizing the prevailing consumer demand for
convenience and safety, businesses can strategize and position their offerings to meet these
requirements. Emphasizing the utilization of digital channels and online platforms allows for
enhanced customer engagement and satisfaction.

Furthermore, the survey outcomes shed light on the fact that adults form the core segment of the
target market. This knowledge is instrumental in crafting marketing campaigns, product offerings,
and service delivery that align with the expectations and lifestyles of the identified consumer group.
By addressing the unique needs and desires of adult consumers, businesses can establish a
competitive advantage and position themselves as providers of convenient and reliable grocery
delivery services.

PESTLE

My business is in the retail industry as it involves selling products to consumers to earn profit

Political

The retail industry is subject to various political factors that can significantly impact operations. One
such factor is the regulation governing the export, import, and sale of products. As my service
includes the sale of food products like bread and milk, it is essential to comply with these
regulations. Adhering to governmental guidelines ensures that the products offered meet the
required standards of quality and safety.

Additionally, the current political climate, specifically the COVID-19 pandemic, has had both positive
and negative effects on the retail industry. On one hand, government recommendations to stay at
home have increased the demand for home delivery services. This presents an opportunity for my
business as it offers a convenient solution for customers to access essential food products without
leaving their homes. By aligning with government directives and providing a safe and reliable service,
my business can capitalize on this increased demand.

On the other hand, political decisions related to wage legislation can impact the retail industry,
particularly concerning the payment of minimum wages to employees. With approximately six
employees working for my business, it is crucial to ensure compliance with wage regulations and
avoid any violations. By adhering to minimum wage laws and providing fair compensation to
employees, my business can maintain legal compliance and foster a positive work environment.

To mitigate potential negative impacts, it is essential to stay informed about any changes in political
regulations and legislation affecting the retail industry. By closely monitoring government guidelines,
my business can adapt and implement necessary measures to comply with laws and avoid penalties.
This proactive approach demonstrates a commitment to ethical business practices and supports the
long-term sustainability and growth of the company.
Economical

Economic factors play a significant role in shaping the business environment, and several factors can
impact my business operations. One such factor is the rise in inflation rates. As inflation increases,
the cost of products and services also rises, which can negatively affect my business. The higher
costs would lead to reduced profit margins, as I would need to spend more on acquiring products.
Additionally, during times of inflation, consumers tend to prioritize essential items and reduce
spending on non-essential products, which could impact the demand for my food delivery service.

While I have limited control over inflation rates and consumer buying habits, it is crucial to adapt
and mitigate the impact. This may involve adjusting pricing strategies, seeking cost-effective
suppliers, and optimizing operational efficiency to maintain profitability. By closely monitoring
economic indicators and trends, I can proactively respond to changes and adjust my business
strategies accordingly.

Another economic factor that can affect my business is unemployment rates. High unemployment
rates may result in decreased purchasing power for individuals, impacting their ability to afford my
products and services. This could potentially lead to a decline in sales and lower profits. However,
there is a silver lining in this situation. With an increase in unemployment, I may have a larger pool
of qualified candidates to choose from when recruiting employees. This can streamline the selection
process and provide an opportunity to hire skilled individuals who are seeking employment.

Additionally, fluctuations in exchange rates can have both positive and negative impacts on my
business. An increase in exchange rates can drive up the cost of imported products, ultimately
increasing the prices customers would need to pay for the products purchased from my website.
This can impact consumer demand and potentially affect the profitability of my business. On the
positive side, a weaker exchange rate could make my business more competitive in the global
market, potentially attracting international customers and expanding the customer base.

To navigate the economic factors effectively, it is crucial to stay updated on economic trends,
monitor market conditions, and adjust business strategies accordingly. Implementing measures such
as cost control, diversification of product offerings, and maintaining a competitive pricing structure
can help mitigate the negative impacts and seize opportunities presented by changing economic
conditions.

Social

Social factors have a significant impact on the success and sustainability of a business. One
important social factor that can affect my business is consumer habits. Understanding and catering
to consumer preferences and buying habits is essential for maximizing profits. For instance, some
consumers prefer to purchase products in bulk quantities. Failing to stock enough products to meet
their demand may result in customer frustration and the potential loss of business to competitors.
By studying and analyzing consumer trends, I can gain valuable insights into their preferences,
enabling me to ensure that I have adequate stock levels to meet their needs and avoid stockouts.

As my business operates online, I have the advantage of collecting customer data. This data provides
valuable information about the products consumers are purchasing, allowing me to make data-
driven decisions regarding inventory management. By monitoring buying patterns and analyzing
customer preferences, I can optimize my product offerings, ensure sufficient stock levels, and
enhance the overall customer experience. This understanding of consumer habits and preferences
will contribute to boosting profitability and fostering customer loyalty.

Another significant social factor that influences the retail industry is the increasing awareness of the
link between food choices and personal well-being. More people are becoming conscious of the
importance of leading a healthy lifestyle, which includes making informed choices about the food
they consume. While this trend does not directly impact my business in a positive or negative way, it
necessitates adaptation to remain relevant in the retail industry. To align with this social shift, I can
focus on offering a diverse range of healthy food options, promoting transparency in ingredient
sourcing, and providing nutritional information. By catering to the growing demand for healthier
choices, my business can capture the attention of health-conscious consumers and differentiate
itself from competitors.

Staying attuned to social factors, such as consumer habits and the increasing focus on health and
well-being, allows my business to proactively respond to changing customer preferences. By
embracing these social trends and tailoring my offerings accordingly, I can build a strong brand
image, foster customer loyalty, and position my business for long-term success in the dynamic retail
industry.

Technological

Technology plays a crucial role in the success and operations of my business. As an online delivery
service, staying updated with the latest technological advancements and trends is essential. This
includes ensuring that our website is accessible across various media channels such as mobile
phones, laptops, and computers. By optimizing our website for different devices, we can provide a
seamless and user-friendly experience, making it convenient for customers to access our services
from any platform. Emphasizing easy accessibility will contribute to the popularity and widespread
adoption of our business.

Computers will be the primary tool used in launching and managing my business website. They
provide the necessary processing power and functionality to efficiently handle customer orders,
address inquiries, and manage logistics. Leveraging computer technology enables streamlined
operations and effective communication with customers. Internet connectivity is of paramount
importance as it serves as the backbone of our business. Without a reliable internet connection, our
business operations would be severely hindered. Internet access is essential for tasks such as
checking and processing customer orders, communicating with customers regarding any issues or
updates, and allowing customers to track their packages. In the absence of internet connectivity, our
business would face significant risks, including impaired communication with customers, reduced
trust in our services, and decreased sales. Therefore, maintaining robust and stable internet
connectivity is crucial for the smooth functioning of our business.

Technology also offers the advantage of collecting valuable customer data. Through our online
platform, we can gather information about customer preferences, purchase history, and delivery
feedback. This data can be analysed to gain insights into customer preferences and behavior,
allowing us to personalize our service offerings. By leveraging these insights, we can enhance the
delivery experience, tailor our services to meet specific customer needs, and improve overall
customer satisfaction. This data-driven approach will enable us to stay responsive to evolving
customer expectations and maintain a competitive edge in the market.
Environmental

Environmental considerations play a significant role in the operations and sustainability of my

delivery business. One of the key environmental issues that my business needs to address is
pollution. As delivery services typically rely on vehicles, such as vans, there is a potential for
increased air pollution. To mitigate this impact, I will implement measures to minimize the carbon
footprint of my operations. One approach is to incorporate bicycles as a means of delivery for
smaller orders. By using bikes instead of vans for shorter distances, I can significantly reduce
emissions and contribute to a cleaner environment. This demonstrates a commitment to sustainable
transportation options and aligns with the growing consumer demand for eco-friendly services.

Additionally, weather conditions pose a challenge to my business operations, particularly in the UK

where weather patterns can be unpredictable. Adverse weather events, such as snowstorms, can
create hazardous driving conditions, potentially affecting the timely delivery of orders. To mitigate
this risk, I will prioritize the regular maintenance and inspection of vehicle tires to ensure they are in
optimal condition. This proactive approach will enhance safety and minimize the chances of
accidents or disruptions caused by inclement weather. Additionally, staying informed about weather
forecasts and having contingency plans in place will enable efficient delivery management during
challenging weather conditions.

By addressing these environmental factors, my business can demonstrate its commitment to

sustainable practices and environmental responsibility. Implementing measures to minimize
pollution through the use of bicycles for smaller deliveries and ensuring vehicle safety in various
weather conditions will not only reduce the environmental impact but also enhance customer
satisfaction by providing reliable and eco-conscious delivery services. Taking a proactive approach to
environmental concerns aligns with the broader societal shift towards sustainability and positions
my business as an environmentally responsible player in the retail industry.

Legal

Legal factors play a crucial role in shaping the operations and compliance requirements of my
business. One key legal aspect that will affect my business is taxation laws. It is essential to
understand and adhere to the tax regulations imposed by the government. Compliance with tax laws
is not only a legal obligation but also contributes to the overall financial stability and reputation of
my business. By ensuring proper accounting practices, accurate reporting, and timely payment of
taxes, I can maintain a transparent and legally compliant operation.

Another significant legal factor that impacts my business is discrimination laws. It is imperative to
create a work environment that fosters diversity, equality, and inclusion. Discrimination based on
factors such as race, gender, age, religion, or disability is strictly prohibited by law. As an employer, I
must comply with these laws and establish policies and procedures that prevent any form of
discrimination in the workplace. This includes fair hiring practices, equal opportunities for
advancement, and creating a safe and respectful work environment for all employees. Non-
compliance with discrimination laws can lead to legal consequences, including fines, lawsuits, and
reputational damage.

By adhering to taxation laws and discrimination laws, my business demonstrates ethical practices,
upholds legal obligations, and fosters a positive work environment. Complying with taxation
regulations ensures financial transparency and contributes to the overall stability and reputation of
my business. Likewise, adhering to discrimination laws fosters an inclusive and diverse workplace,
enhancing employee morale, productivity, and attracting a wider customer base. Understanding and
respecting the legal framework not only safeguards my business but also builds trust and credibility
with employees, customers, and stakeholders.

Porter's Five Forces Analysis is a valuable tool for assessing the competitive dynamics and
attractiveness of an industry. In the context of my business, the analysis reveals the following:

Threat of New Entrants - High:

The threat of new entrants into the market is high. As a startup, my business lacks established brand
loyalty, making it easier for new competitors to enter the industry. Additionally, the low initial
capital associated with being a micro business opens the door for well-funded new entrants to
compete in the same market. This poses a challenge as new entrants will strive to gain market share
and potentially erode my customer base. To mitigate this threat, I need to develop a strategy that
takes into account the strengths of new entrants, while emphasizing factors such as customer
retention and differentiation.

Barriers to entry can act as deterrents for potential new entrants. One such barrier is the cost factor.
If new entrants increase demand for materials and products from suppliers, it may lead to higher
prices. To counteract this, I can secure long-term contracts with my suppliers, locking in favorable
pricing terms and protecting myself from potential price hikes. By establishing strong relationships
and ensuring a reliable supply chain, I can maintain a competitive edge in terms of pricing and focus
on delivering superior product quality and service.

Another significant barrier to entry is the requirement for high capital investment in retail facilities
and manufacturing. The need for substantial financial resources to establish a presence in the
market can discourage new entrants. As an existing player, I can leverage my established
infrastructure and customer base to gain a competitive advantage. By continuously investing in the
improvement and expansion of my facilities, I can maintain a strong position in the market and make
it more challenging for new entrants to penetrate and capture market share.

Threat of Substitute Products - High:

The threat of substitute products for my business is high. This is primarily due to the presence of
larger retail stores like Tesco, which offer a similar service of online ordering and home delivery.
Tesco, being a well-known and established store, enjoys brand loyalty and a wide range of products
that consumers are familiar with. If customers cannot find what they need or prefer from my
business, Tesco becomes a viable alternative.

The availability of substitutes limits my pricing power and puts pressure on my business to remain
competitive. Customers can easily compare prices and offerings between different providers,
including larger retail stores, and this influences their purchasing decisions. To address this threat, I
need to differentiate my products and services by offering unique value propositions, such as
specialized products, superior customer service, or a seamless online shopping experience. By
creating a distinct brand identity and fostering customer loyalty, I can reduce the likelihood of
customers switching to substitutes.

Additionally, I should continually monitor the offerings and strategies of substitute providers, such as
Tesco, to identify any areas where I can differentiate and improve. Understanding the unique needs
and preferences of my target market will enable me to tailor my offerings and provide value that
sets me apart from substitutes.

Power of Customers - High:

The power of customers in the market is high due to the presence of various alternatives and
competitors offering similar products and services. Customers have multiple options to choose from,
which gives them the ability to switch between providers based on factors such as price, quality, and
customer experience.

To mitigate the risk of customers choosing competitors over my business, I will focus on improving
customer service and responsiveness. By actively listening to customer expectations and addressing
their needs promptly and effectively, I can enhance customer satisfaction and loyalty. Providing
exceptional customer service will give me an edge in retaining existing customers and attracting new
ones.

To maintain customer loyalty, I may also consider offering competitive pricing and implementing
loyalty programs. By providing discounts, special offers, or rewards to loyal customers, I can
incentivize them to continue choosing my business. Additionally, I will leverage the convenience of
online ordering through my website, ensuring that customers can easily access and purchase
products. Offering free delivery for orders above a certain amount can further incentivize customers
to choose my service and continue shopping.

Regularly monitoring customer feedback, conducting surveys, and analyzing purchasing patterns will
help me understand customer preferences and tailor my offerings accordingly. By continuously
improving and adapting to customer demands, I can strengthen customer relationships and reduce
the likelihood of customers switching to competitors.

Power of Suppliers - High:

In the tertiary sector, which encompasses supporting services for storing and distributing goods, my
business relies on suppliers to provide the products that I will sell. Suppliers play a crucial role in the
availability, quality, and cost of the goods I offer to customers.

To ensure a reliable supply chain, I will seek out suppliers with a proven track record and long-term
stability. Establishing relationships with reputable suppliers who have a consistent history of
delivering quality products will minimize the risk of disruptions or unreliable inventory.

Suppliers often prioritize buyers who place large orders and demonstrate the capacity to handle
them effectively. By positioning my business as a reliable and capable buyer, I can negotiate
favorable terms and maintain a strong relationship with suppliers.
The power of suppliers becomes more significant when there are limited substitutes available for the
materials or products they provide. In such cases, suppliers may have more control over pricing and
terms. To mitigate this potential risk, I will diversify my supplier base and spread my purchases
across multiple suppliers. This strategy demonstrates to suppliers that I have alternative options,
which reduces their ability to exert undue influence or impose unfavorable terms.

Maintaining open lines of communication with suppliers, regularly evaluating their performance, and
fostering a collaborative relationship can also help in managing supplier power. By working closely
with suppliers, I can address any potential issues or concerns proactively, ensuring a steady supply of
products and maintaining competitive pricing for my customers.

Industry Rivalry - The industry I am entering is characterized by the presence of competitors offering
similar services. Uber Eats, for example, provides on-demand food delivery from various restaurants,
allowing customers to order and receive their meals within a short time frame. The pricing for Uber
Eats depends on the customer's order and the restaurant they choose, offering flexibility and variety.
Additionally, Tesco offers a comparable service, enabling customers to order groceries online and
have them delivered to their homes. The existence of these competitors increases the level of rivalry
in the market and provides customers with a wide range of options to choose from.

Competitive intensity and attractiveness of the market are determined by the presence and activities
of these competitors. Market share plays a significant role, as businesses with larger market share
tend to gain more visibility and customer attention. To differentiate myself from competitors and
attract customers, I will need to carefully consider my pricing strategy, customer service, and unique
value proposition.

One disadvantage that my business may face is the startup costs associated with setting up the
business. These costs include expenses for advertising, equipment, and staff salaries. To address this,
I plan to seek financial support from family and friends in the early stages of my business. This
approach allows for quicker access to funds and flexible repayment terms compared to traditional
bank loans.

On the other hand, my business has advantages that can differentiate it from competitors. One such
advantage is the ability to cater to the needs of the elderly population by offering them a convenient
way to order groceries and other products online. This can save them time and effort, as they can
have everything delivered to their homes. Additionally, collaborating with larger well-known
businesses like Tesco and Asda can provide an initial boost in customer acquisition and credibility for
my business.

To thrive in a competitive market, I will need to continually assess and refine my business strategy,
including pricing, marketing, and customer experience. By focusing on delivering value, convenience,
and exceptional service, I can gain a competitive edge and establish a loyal customer base.

Unique Selling Points - My service offers essential everyday products such as bread and milk through
an online platform, providing customers with the convenience of ordering and receiving their items
at home on the same day. What sets my business apart is the potential partnership with established
retailers like Asda and Tesco, allowing me to benefit from their supply chain and access products at a
lower cost. This strategic collaboration reduces the startup expenses and enables the business to
secure more funding, ensuring a smoother and cost-effective launch.
One of the key advantages of my service is its wide target audience. People of all ages, including the
elderly and teenagers, can benefit from the convenience of online ordering and home delivery. By
catering to a broad demographic, my business has the potential to generate significant income and
appeal to a large customer base.

Moreover, by leveraging technology and an online platform, communication with customers

becomes seamless and efficient. Advancements in technology have made it easier for individuals to
complete tasks using computers, and the networking capabilities of the internet make it convenient
for customers to access my business. However, a potential threat arises from the possibility of
website functionality issues and user difficulties. To address this, I plan to enlist volunteers to test
the website and provide feedback on its accessibility and usability. This approach allows for
identifying and resolving any complications, ensuring a user-friendly experience for customers.

The benefit of testing and gathering feedback is that it minimizes potential problems, as most issues
can be addressed and resolved during the testing phase. By continuously improving the website
based on user input, I can enhance the overall customer experience and ensure the platform meets
their needs effectively.

Marketing mix

Product –

In my business, I will focus on branding and delivering products that cater to the needs and wants of
my target market. Customers will be looking for good quality products at affordable prices, and I will
aim to meet these expectations to gain a larger market share. To achieve this, I would consider
establishing partnerships with well-known retailers such as Asda and Tesco. This collaboration would
allow me to source products at a lower cost, making it easier to start the business and raising more
funds for its operations. By offering affordable yet high-quality products, my business will
differentiate itself from competitors in the market.

While many competitors may focus solely on food deliveries, my business will offer a wider range of
products and groceries. Operating under the name "delivered2u," customers will have the
convenience of ordering from my online website and app, choosing from a variety of products, and
having them delivered directly to their homes. I understand the importance of timely delivery, and
thus, I will strive to provide same-day delivery for all customers. By offering quick and efficient
service, I aim to build customer loyalty and establish brand recognition.

In terms of cost, I estimate the maximum expense for setting up and producing the business to be
£50,000. This budget will cover the development and maintenance of the website, as well as the
procurement of necessary materials. By carefully managing costs and investing in key areas, I will
ensure that the business operates within a sustainable financial framework.

In summary, my business will differentiate itself by branding and delivering products that meet the
needs of the target market. By establishing partnerships with renowned retailers, I can offer quality
products at affordable prices. Operating under the name "delivered2u," customers will enjoy the
convenience of online shopping and same-day delivery. With a maximum budget of £50,000, I will
allocate resources efficiently to build a successful and customer-centric business.
Price - In my business, I will adopt a pricing strategy that focuses on offering competitive prices to
attract customers. Research has shown that customers prefer affordable prices without
compromising on quality. Therefore, I will position my prices lower than those of my competitors to
appeal to price-conscious consumers.

To gain traction in the market and generate sales, I will implement a penetration pricing strategy.
This means initially setting lower prices for my products and gradually increasing them as the
business establishes itself. By offering competitive prices, I can attract a larger customer base and
build brand recognition.

In terms of delivery charges, I plan to implement a tiered pricing system based on the total purchase
price. For orders below £25, there will be an additional £5 charge for delivery. However, for orders
exceeding £25, the delivery fee will be reduced to £2.50. This approach incentivizes customers to
increase their order value to qualify for lower delivery charges, encouraging them to shop more and
potentially increase their average order size.

To further enhance the value proposition for customers, I will introduce special discounts and offers.
First-time customers will receive free delivery on their initial order, providing an added incentive to
try out the service. Additionally, loyal customers will enjoy a 10% discount on their purchases every
month, rewarding them for their continued support and encouraging repeat business.

By offering competitive prices, implementing a tiered delivery pricing system, and providing
discounts to both new and loyal customers, my business aims to deliver value and affordability to
consumers. These pricing strategies, coupled with the convenience of same-day delivery, will
differentiate my business and attract customers in a competitive market.

Place

Distribution and Promotion - In my business, the primary channel of distribution will be through
online platforms such as my business website and mobile app. Customers will have the convenience
of ordering essential grocery items and products directly from the website, and these orders will be
delivered to their doorstep.

To differentiate my business from competitors like Uber Eats, who focus on fast-food delivery, I will
emphasize the availability of a wide range of grocery items and everyday essentials. This unique
selling proposition will attract customers who prefer the convenience of having all their shopping
needs fulfilled in one place.

Collaborating with larger businesses like Tesco and Asda can provide several advantages for my
business. By partnering with established retailers, I can leverage their distribution networks and
reach a broader customer base. This collaboration will also enhance credibility and trust in my
brand, as customers are familiar with and trust these well-known businesses.

To effectively reach customers and drive awareness of my service, I will utilize online marketing
strategies. This can include search engine optimization (SEO) techniques to ensure my website ranks
well in search engine results, as well as social media advertising to target specific demographics and
engage with potential customers. I will also consider partnering with influencers or bloggers who
align with my target market to increase brand visibility and reach a wider audience.

In terms of distribution channels, it will be essential to analyze competitors' strategies and identify
any overlooked opportunities. By understanding the methods they are using and potentially finding
untapped distribution channels, my business can gain a competitive advantage and reach customers
more effectively.

Furthermore, the use of a customer relationship management (CRM) system, such as Salesforce, can
be beneficial for managing and nurturing customer relationships. It can help track customer
interactions, preferences, and purchase history, allowing for personalized communication and
tailored offers to enhance customer satisfaction and retention.

Promotion

Promotion is a crucial aspect of marketing to create awareness and generate interest in my business.
Considering the popularity of social media platforms and their effectiveness in reaching a wide
audience, I will focus on social media marketing as a primary promotional strategy.

By leveraging social media platforms such as Instagram, I can effectively target and engage with my
desired audience. Instagram is widely used by people of all ages and has extensive reach globally. I
will regularly update my business's social media profiles with appealing content, including product
images, special offers, and engaging captions.

To make the most of social media promotion, I will identify relevant hashtags related to my business
and incorporate them in my posts. This will increase the visibility of my content and help potential
customers discover my business. Additionally, I can encourage customers to share their experiences
and reviews on social media, which can further promote my brand through user-generated content.

In addition to social media, I may also consider other promotional channels based on my target
market and budget. For instance, I can utilize online advertising platforms to reach a wider audience.
This could involve running targeted ads on popular websites or search engines, ensuring that my
business appears when potential customers search for related products or services.

Furthermore, I can explore collaborations with local influencers or bloggers who align with my target
market. These influencers can promote my business and offerings to their followers through
sponsored posts or product reviews, generating additional visibility and credibility.

Another promotional avenue to consider is email marketing. By collecting customer email addresses,
I can send regular newsletters or promotional offers to keep customers informed and engaged. This
can include exclusive discounts, new product announcements, or personalized recommendations
based on their previous purchases.

It's important to regularly monitor the effectiveness of my promotional strategies by analyzing

engagement metrics, such as post reach, likes, comments, and website traffic. This data can help me
refine my promotional approach and tailor it to better resonate with my target audience.

Overall, by leveraging social media marketing, exploring online advertising opportunities,

collaborating with influencers, and utilizing email marketing, I can effectively promote my business,
increase brand awareness, and attract a larger customer base.

People

The success of my business relies heavily on the people involved, including both customers and
employees. I recognize the importance of providing excellent customer service to meet the needs
and wants of my customers. This involves ensuring that my employees are well-trained in effectively
and efficiently communicating with customers, addressing their concerns, and solving any problems
they may encounter.

Given that my business is a micro-business, I plan to recruit six employees who will be responsible
for various roles and responsibilities. Each employee will possess different skills to fulfill the
requirements of different areas within the business. Some employees will have direct contact with
customers as they deliver the products, while others will work in customer service, addressing
inquiries and resolving any issues that arise.

To ensure that my employees are well-prepared for their roles, I will provide them with
comprehensive training. This training will focus on effective communication techniques, problem-
solving strategies, and how to handle specific situations that may arise while interacting with
customers. By equipping my employees with the necessary skills and knowledge, I can enhance their
ability to provide exceptional customer service and create a positive experience for customers.

In addition to customer service training, I will also emphasize the importance of teamwork and
flexibility among my employees. As a micro-business, it is essential that my employees are multi-
skilled and adaptable to different tasks and responsibilities that may arise. This versatility will enable
them to handle various aspects of the business, ensuring its smooth operation and effective delivery
of products and services.

Furthermore, I will create a supportive and positive work environment that fosters employee
motivation and engagement. Recognizing the value of my employees and their contributions to the
success of the business, I will establish channels for feedback and suggestions, encouraging open
communication and continuous improvement.

By investing in the training and development of my employees, creating a customer-centric culture,

and fostering a positive work environment, I can ensure that my team is well-equipped to deliver
excellent customer service, meet customer needs, and contribute to the overall success of my
business.

Process

In my business, I have identified certain processes that I will outsource to ensure efficient operations
and optimal performance. These processes include customer service and website maintenance.

For customer service, I recognize the importance of providing excellent support to my customers. As
my business grows, it may not be feasible for me to handle all customer inquiries and concerns on
my own. Therefore, I will outsource a customer service team that will be responsible for handling
new account setups, addressing customer inquiries, and resolving any issues that arise. This will
allow me to focus on other aspects of the business while ensuring that my customers receive prompt
and satisfactory assistance.

Additionally, website maintenance is crucial for the smooth functioning of my online platform. Since
the website will be the primary channel for customers to place orders and access information about
my business, it is essential that it runs smoothly and remains up-to-date. I will outsource website
maintenance to professionals who specialize in web development and management. This will ensure
that the website is regularly updated, optimized for performance, and integrated with social media
platforms to enhance the overall user experience.
To source for suppliers, I will utilize the internet as a valuable tool for research. By conducting
thorough online research, I can identify suitable suppliers based on key factors such as price, quality,
and availability of the products I require. This will enable me to establish partnerships with reliable
suppliers who can meet the demands of my business.

In terms of channeling to the market, social media platforms will play a significant role in promoting
my business and reaching a large audience. I will utilize social media marketing strategies to create
awareness about my service, showcase the benefits it offers, and engage with potential customers.
Social media platforms provide an opportunity to build a valuable community and interact directly
with customers, which can contribute to the growth and success of my business.

Additionally, email marketing will be utilized as a direct channel to reach customers and inform them
about the latest offers, deals, and updates regarding my products and services. By maintaining an
email subscriber list and sending regular newsletters or updates, I can establish a direct line of
communication with customers and keep them informed and engaged.

In terms of employees, I plan to have up to nine employees to handle various activities such as
marketing and customer service. Each employee will be assigned specific roles and responsibilities to
ensure smooth operations and efficient execution of tasks. These employees will require IT skills to
effectively utilize technology and software tools relevant to their respective roles. Good
communication skills will also be essential, as they will be representing the business and interacting
with customers.

By outsourcing certain processes, utilizing social media and email marketing, and recruiting a
dedicated team, I aim to streamline operations, enhance customer satisfaction, and effectively
promote and grow my business.

Physical evidence

Physical evidence plays a significant role in conveying the image and essence of my business to
customers. It encompasses various elements that customers can see and experience, providing
tangible evidence of the quality and value of my service.

One crucial aspect of physical evidence is the overall branding and visual identity of my business. By
investing in attractive and cohesive branding, including a logo, color scheme, and design elements, I
can create a strong and memorable brand image. A visually appealing and well-designed brand
identity can help differentiate my business from competitors and make a positive impression on
customers. This includes ensuring that the branding aligns with the target market and effectively
communicates the unique value proposition of my service.

Additionally, the physical appearance of my website and mobile app will serve as an important form
of physical evidence. A well-designed and user-friendly website that reflects the branding elements
will enhance the overall customer experience and instill confidence in the reliability and
professionalism of my business. It should be visually appealing, easy to navigate, and provide clear
and concise information about the products and services offered. A visually pleasing and functional
website can create a positive impression and encourage customers to engage with my business.

Furthermore, physical evidence can also include the packaging and presentation of the delivered
products. By ensuring that the products are packaged securely and presented in an aesthetically
pleasing manner, I can enhance the overall customer experience and leave a lasting impression. This
may involve using branded packaging materials, including personalized notes or special touches, to
create a sense of care and attention to detail.

Moreover, if there is a physical location associated with my business, such as a central office or a
warehouse, the appearance and cleanliness of the premises can also serve as physical evidence. A
clean, well-maintained, and organized physical location can create a sense of professionalism,
reliability, and trustworthiness

P4 -Explain how legal and financial aspects will affect the start-up of the business

Sole trader

A sole trader business, also known as a sole proprietorship, is a legal structure where a single
individual operates and owns a business. As a sole trader, the individual is considered self-employed
and assumes all legal and financial responsibilities of the business. They have complete control over
the decision-making process and retain all profits generated by the business.

One of the key advantages of a sole trader business is its simplicity and ease of setup. The lack of
formal legal requirements and the absence of complex governance structures make it quick and
straightforward to establish. This allows the individual to focus on their business operations and
react swiftly to market changes without the need for extensive consultations or approvals.

Another advantage of being a sole trader is the ability to retain all profits. Since there are no
shareholders or partners to share the profits with, the sole trader is entitled to keep all earnings
generated by the business. This can provide a strong financial incentive and reward for the efforts
and risks taken by the individual.

However, being a sole trader also comes with its own set of challenges and disadvantages. One
significant drawback is the concept of unlimited liability. As a sole trader, the individual is personally
liable for all debts and obligations of the business. In the event of business failure or financial
difficulties, personal assets, such as savings, property, or investments, may be at risk to cover these
liabilities. This exposes the sole trader to higher financial risks compared to business structures with
limited liability, such as companies.

Raising finance can be another hurdle for sole traders. They often rely on their personal funds,
savings, or loans to finance their business activities. Accessing significant amounts of capital may be
more difficult for sole traders compared to companies with multiple owners or partnerships, where
capital can be sourced from various partners or shareholders.

The limitation of skills and expertise is another aspect to consider. As a sole trader, the individual is
responsible for managing all aspects of the business themselves. This includes sales, marketing,
operations, finance, and administration. Sole traders may face challenges in handling specialized
tasks or acquiring expertise in certain areas, potentially leading to inefficiencies or the need for
external support.

Lastly, the continuity of the business can be a concern for sole traders. Since the business is closely
tied to the individual, any interruption or unforeseen circumstances like illness, incapacity, or death
may affect the business's continuity. Unlike partnerships or companies, where ownership can be
transferred or passed on to others, a sole trader business is reliant on the sole individual's presence
and involvement.

Partnership

A partnership is a legal structure where two or more individuals come together to jointly operate a
business with the aim of making a profit. In a partnership, the partners contribute capital, share
responsibilities, and collectively share the profits and losses generated by the business.

One key advantage of a partnership is the shared responsibility and workload. Partners can divide
and specialize in different areas based on their expertise and strengths. This division of labor allows
partners to focus on their respective roles, leading to increased efficiency and productivity. For
example, one partner may handle financial management and bookkeeping, while another partner
may be responsible for sales and marketing. This specialization can lead to better decision-making
and utilization of skills within the partnership.

Furthermore, partnerships benefit from having multiple perspectives and ideas. With more partners
involved, there is a wider pool of knowledge, experiences, and insights to draw upon. This
collaboration fosters creativity, problem-solving, and innovation within the business. Partners can
provide support, guidance, and advice to each other, leading to better decision-making and overall
business performance.

However, partnerships also face certain challenges. Disagreements and conflicts among partners can
arise, particularly when it comes to decision-making or business strategies. Differences in opinions,
goals, or expectations may lead to conflicts that can impact the smooth functioning of the
partnership. It is essential for partners to have clear communication channels, mutual respect, and a
shared vision to navigate these challenges effectively.

Another potential drawback of partnerships is the concept of unlimited liability. Each partner is
personally responsible for the debts and liabilities of the business, meaning their personal assets
may be at risk if the business encounters financial difficulties or faces legal issues. This can create a
higher level of financial risk for partners compared to business structures with limited liability, such
as limited liability companies (LLCs) or corporations.

To mitigate potential risks and conflicts, partnerships often establish a partnership agreement or
contract that outlines the rights, responsibilities, and profit-sharing arrangements among partners.
This agreement serves as a legal framework that helps manage expectations, address potential
disputes, and define the roles and obligations of each partner.

Limited company

A limited company is a legal structure that separates the business from its owners and managers. It
is considered a separate legal entity, which means the company has its own legal rights and
obligations. One advantage of operating as a limited company is limited liability. The owners, also
known as shareholders, are generally not personally liable for the company's debts or legal
obligations. Their liability is limited to the value of their shares in the company. In the event of
bankruptcy or financial difficulties, the shareholders' personal assets are generally protected.

Another advantage of a limited company is the ability to attract investment. Limited companies can
issue shares to raise capital from investors. This allows for potential growth and expansion as
additional funds can be raised by selling equity to interested parties. Moreover, some financial
institutions may prefer to lend to incorporated businesses, providing access to additional financing
options.

Additionally, a limited company offers credibility and professionalism. The company name, rather
than an individual's name, is associated with the business. This can enhance the company's
reputation and give customers, suppliers, and partners more confidence in doing business with the
company.

However, there are certain disadvantages to operating as a limited company. One notable drawback
is the increased costs associated with setting up and maintaining a limited company. This includes
the fees for professional services such as accounting, legal compliance, and filing annual accounts
and tax returns. These costs can be higher compared to a sole trader business, where the financial
obligations are generally simpler.

Regarding your plan to operate as a sole trader, it offers certain advantages. As a sole trader, you
have complete control over the business and can make decisions independently without the need
for consultations or consensus with partners. Additionally, you are entitled to keep all the profits
generated by the business.

However, a sole trader business also has its disadvantages. Unlimited liability is a significant concern.
As a sole trader, you are personally liable for the business's debts and obligations. In the event of
bankruptcy or legal issues, your personal assets can be at risk. This can be a potential drawback,
especially if the business faces financial difficulties.

Considering your proposal for a partnership with Asda and Tesco, it could offer advantages such as
access to their established supply chain and potentially lower costs for products. Partnerships can
provide opportunities for growth and shared resources. However, it is important to consider
potential conflicts and challenges that may arise from partnering with larger brands. Effective
communication, mutual agreement, and a well-drafted partnership agreement can help mitigate
these risks.

In summary, both operating as a limited company and as a sole trader have their advantages and
disadvantages. It's crucial to carefully evaluate the specific needs, risks, and long-term goals of your
business before making a decision. Seeking professional advice from an accountant or legal expert
can provide further guidance tailored to your specific circumstances.

Laws and impacts on my business

Consumer protection laws

Consumer rights act

The Consumer Rights Act 2015 is a significant piece of legislation that provides extensive protection
to consumers in their purchases. It encompasses various aspects of consumer rights, including the
quality of products, fitness for purpose, and delivery rights.
Under the Consumer Rights Act 2015, products must meet certain standards of satisfactory quality.
This means that the products should be of a standard that a reasonable person would expect, taking
into account factors such as durability, appearance, and freedom from defects. If a product fails to
meet these standards, consumers have the right to seek a remedy, such as a repair, replacement, or
refund.

The law also requires products to be fit for purpose. This means that the product should be suitable
for the specific purpose it was intended for, and the retailer should be aware of this purpose. If a
product does not meet its intended purpose, consumers have the right to seek redress.

As your business involves delivery services, it is crucial to comply with the delivery rights outlined in
the Consumer Rights Act. According to the law, as the retailer, you are responsible for the products
until they are physically in the possession of the customer. This means that if there are any issues
with delivery, such as non-delivery or damaged goods, customers have the right to lodge a
complaint. Even if the problem arises from the courier's poor service, the responsibility ultimately
lies with your business.

To ensure compliance and maintain customer satisfaction, it is essential to provide good quality
products that meet the customers' expectations. Conducting regular quality checks, working with
reliable suppliers, and employing efficient delivery services can help minimize issues and complaints.

By adhering to the Consumer Rights Act 2015, you can build trust and confidence with your
customers, knowing that their rights and interests are protected. It is important to have robust
customer service processes in place to address any concerns promptly and offer appropriate
remedies when required. This will help foster positive customer relationships and enhance the
reputation of your business.

Consumer contracts regulations

The Consumer Contracts Regulations are an important set of regulations designed to protect
consumers when they engage in distance selling or online shopping. These regulations ensure that
consumers have certain rights and protections in place if anything goes wrong with their purchases.

One key aspect of the Consumer Contracts Regulations is the right to cancel an order. Consumers
have the right to cancel their orders within a specific timeframe, usually 14 days, from the date they
receive the products. This right to cancellation applies to various types of contracts, including those
made online, over the internet, via a catalogue, or even through face-to-face interactions in the
consumer's home. If a consumer decides to cancel their order within this timeframe, they are
entitled to a full refund, including any delivery charges they may have paid.

Additionally, the regulations stipulate that consumers have the right to receive a refund if the
products they receive are of unsatisfactory quality or do not match the description provided by the
seller. If a consumer is dissatisfied with the quality of the product they have received, they can
request a refund within 14 days.

These regulations directly impact your business as you will need to ensure that your products meet
the required quality standards and accurately match the descriptions provided to consumers. By
doing so, you can minimize the risk of customers wanting to cancel their orders or seek refunds due
to dissatisfaction. It is important to maintain a good reputation by delivering products that meet or
exceed customer expectations.
Compliance with the Consumer Contracts Regulations not only protects consumers but also helps
build trust and credibility for your business. By understanding and following these regulations, you
can demonstrate your commitment to customer satisfaction and ensure that your business operates
in a fair and transparent manner.

Lastly, it is worth mentioning that the Consumer Protection from Unfair Trading Regulations 2008 is
another important piece of legislation that safeguards consumers. These regulations prohibit unfair
trading practices, such as misleading or aggressive sales tactics, false advertising, or withholding
important information from consumers. By adhering to these regulations, you can maintain ethical
business practices and protect consumers from deceptive or unfair treatment.

Consumer protection from unfair trading regulations 2008

The Consumer Protection from Unfair Trading Regulations 2008 is a crucial law that aims to
safeguard consumers from deceptive and unfair practices employed by businesses. This legislation
prohibits businesses from engaging in misleading or aggressive trading techniques that may
manipulate or mislead consumers into making purchases.

Under these regulations, it is prohibited to advertise products or services that do not actually exist or
to create false impressions about the availability or quantity of goods. For example, businesses
should not promote a product at a specific price knowing that they have limited stock or cannot
fulfill the demand. Misleading consumers in this way is considered an unfair trading practice and is
strictly regulated by this law.

As a business owner, it is important to comply with these regulations to protect consumers and
maintain trust in your brand. Failing to deliver on what you advertise can have detrimental effects on
your business's reputation and customer loyalty. If customers do not receive the products they
expected or if the quality is significantly different from what was advertised, they may become
dissatisfied and may not consider purchasing from your business again.

Furthermore, the regulations also cover issues related to the delivery service provided by
businesses. If the delivery service is poor or fails to meet the reasonable expectations of customers,
it can be seen as an unfair trading practice. Timely and accurate delivery is essential to ensure
customer satisfaction and maintain compliance with the law.

To ensure that you are abiding by the Consumer Protection from Unfair Trading Regulations 2008, it
is crucial to provide accurate and truthful information to consumers in a timely manner. This
includes providing clear and transparent product descriptions, availability information, and any
relevant terms and conditions. It is essential to meet customer expectations and promptly address
any concerns or issues that may arise regarding the delivery of products or services.

By following these regulations and focusing on providing a positive customer experience, you can
build trust, maintain customer loyalty, and mitigate any potential legal and reputational risks
associated with unfair trading practices.

Employment laws

Employment rights act

The Employment Rights Act 1996 is a significant legislation that outlines the rights and protections
afforded to employees in the workplace. One important aspect covered by this act is the protection
against unfair dismissal. It ensures that employees cannot be dismissed from their job without a
valid and fair reason. Unfair dismissal can include instances where an employee is terminated due to
discrimination, whistleblowing, or exercising their legal rights.

Additionally, the Employment Rights Act 1996 addresses the issue of notice periods. It requires
employers to provide employees with a reasonable notice period before terminating their
employment. The length of the notice period depends on the length of service of the employee. For
instance, if the employee has been employed for more than a month but less than two years, a one-
week notice period is typically required. However, for employees with two or more years of service,
the notice period increases to two weeks, and it continues to increase incrementally based on the
length of service, up to a maximum of twelve weeks.

These provisions of the act play a vital role in protecting the rights of employees and ensuring fair
treatment in the workplace. As a business owner, it is essential to familiarize yourself with these
regulations to ensure compliance and avoid potential legal issues. When employing staff, it is crucial
to provide clear employment contracts that outline the terms and conditions of employment,
including notice periods and the reasons for dismissal. This will help in establishing a fair and
transparent working relationship with your employees.

By adhering to the Employment Rights Act 1996, you can maintain a positive work environment,
promote employee satisfaction, and mitigate the risk of legal disputes related to unfair dismissal. It is
recommended to seek professional advice or consult employment law resources to ensure a
thorough understanding of your obligations as an employer and to ensure compliance with the law.

Equality act 2010

The law you are referring to is the Equality Act 2010, which replaced previous legislation and
provides protection against discrimination in various aspects of employment, including recruitment,
terms and conditions, promotions, and dismissals. The Act prohibits discrimination based on
protected characteristics such as sex, race, religion or belief, disability, age, and sexual orientation.

Under the Equality Act 2010, there are different types of discrimination that employees should be
protected against. Direct discrimination occurs when someone is treated less favorably because of a
protected characteristic. This means that individuals should not be subjected to unfair treatment or
denied opportunities solely based on their sex, race, religion, disability, or any other protected
characteristic.

Indirect discrimination refers to situations where an apparently neutral policy, criterion, or practice
puts individuals with a protected characteristic at a disadvantage compared to others who do not
share that characteristic. This means that even if a policy or practice does not explicitly discriminate,
it should not disproportionately impact individuals based on their protected characteristic.

It is crucial for your business to comply with the Equality Act 2010 to foster a fair and inclusive
working environment. Discrimination can have serious consequences, both in terms of legal
implications and damage to your business's reputation. To ensure compliance, you should create a
workplace culture that promotes equality, diversity, and inclusion. This involves treating all
employees fairly and consistently, providing equal opportunities for career progression, and
addressing any complaints or concerns related to discrimination promptly and effectively.
Furthermore, it is important to establish policies and procedures that explicitly prohibit
discrimination and provide a mechanism for employees to report any incidents. Regular training and
awareness programs can also help educate your staff about their rights and responsibilities under
the law, promoting a respectful and inclusive work environment.

By actively promoting equality and preventing discrimination within your business, you can not only
comply with the law but also foster a positive and diverse workplace that values and respects all
employees

National minimum wage act 1998

This legislation sets the minimum hourly wage rates that employees are entitled to based on their
age and employment status. The rates are periodically reviewed and updated by the government.

As an employer, it is your legal obligation to pay your employees at least the national minimum
wage. The rates vary depending on the employee's age and whether they are classified as an
apprentice. The current rates (as of September 2021) are as follows:

National Living Wage (age 23 and over): £8.91 per hour

Standard Adult Rate (age 21 to 22): £8.36 per hour

Development Rate (age 18 to 20): £6.56 per hour

Young Workers Rate (age 16 to 17): £4.62 per hour

Apprentice Rate (under 19 or in the first year of apprenticeship): £4.30 per hour

It is important to note that these rates are subject to change, so it is necessary to stay updated with
the current rates as set by the government.

To ensure compliance with the National Minimum Wage Act, you should carefully review the rates
and pay your employees accordingly. This includes keeping track of their age, employment status,
and any changes to the rates over time. It is also crucial to maintain accurate records of hours
worked and wages paid to demonstrate compliance if required.

Failing to pay employees at least the national minimum wage can have serious consequences,
including legal action and penalties imposed by HM Revenue and Customs (HMRC). The HMRC has
the authority to enforce compliance and may conduct audits or investigations to ensure employers
are meeting their obligations.

By diligently adhering to the national minimum wage requirements, you not only fulfill your legal
responsibilities but also create a fair and equitable working environment for your employees. It
demonstrates your commitment to valuing their contributions and providing them with a decent
standard of living.

Health and safety laws

The Health and Safety at Work Act 1974, along with subsequent regulations, establishes the legal
framework for ensuring the health, safety, and welfare of individuals within a workplace. This
legislation applies to all businesses and places the responsibility for health and safety on both
employers and employees.

The primary objective of the Health and Safety at Work Act is to prevent work-related accidents,
injuries, and illnesses by implementing appropriate measures and procedures. It encompasses
various aspects, including risk assessments, provision of information and training, maintenance of
the work environment, safe handling and storage of hazardous substances, and welfare facilities for
employees.

As an employer, it is your duty to ensure that the working environment is safe and free from
hazards. This involves conducting regular risk assessments to identify potential risks and
implementing control measures to mitigate them. Adequate training and information should be
provided to employees to enable them to work safely and understand the potential hazards
associated with their tasks.

Failure to comply with health and safety regulations is a criminal offense and can result in severe
consequences. These may include fines, imprisonment, or even the closure of your business. Non-
compliance can also have a detrimental impact on your company's reputation, leading to loss of
trust from customers, employees, and stakeholders.

To effectively manage health and safety in your business, it is advisable to seek guidance from a
qualified health and safety professional. This individual can assist you in conducting risk
assessments, developing policies and procedures, providing training to employees, and ensuring
compliance with the law. They will help you create a safe working environment and implement best
practices to protect the well-being of your employees.

By prioritizing health and safety in your business, you demonstrate your commitment to the welfare
of your employees and create a positive work culture. It fosters a sense of trust, boosts employee
morale and productivity, and ultimately contributes to the long-term success and sustainability of
your business.

Health and safety policy

Having a robust health and safety policy is crucial for establishing a strong commitment to health
and safety within your business. It serves as a written document that outlines your approach and
procedures for managing health and safety in the workplace. Here are some key elements that can
be included in your health and safety policy:

Consultation with Employees: Your policy should emphasize the importance of consulting with
employees on matters that may affect their health and safety. This encourages open communication
and allows employees to provide input and raise any concerns they may have.

Clear Information and Training: It is essential to provide clear information and instructions to
employees regarding health and safety procedures, practices, and potential hazards. Additionally,
efficient training programs should be implemented to ensure that employees are competent in
performing their work safely.
Accident and Illness Prevention: The policy should state your commitment to preventing accidents
and work-related ill health. This can be achieved through risk assessments, regular inspections, and
the implementation of appropriate control measures to minimize or eliminate hazards.

Provision of Safe Equipment: Employees should be provided with safe and suitable equipment to
perform their tasks. The policy should emphasize the importance of regular maintenance,
inspections, and proper use of equipment to ensure its continued safety.

Healthy and Safe Working Conditions: Your policy should address the importance of maintaining a
healthy and safe working environment. This includes proper ventilation, lighting, temperature
control, and cleanliness. It should also cover measures to address physical and psychological well-
being in the workplace.

Emergency Procedures: An essential aspect of your policy should be the establishment of emergency
procedures. This includes clear instructions for evacuation in the event of a fire or other
emergencies. Regular drills and training sessions should be conducted to familiarize employees with
these procedures.

Regular review and revision of your health and safety policy is crucial to ensure its effectiveness and
alignment with any changes in your business operations or legislation. By consulting with your
employees on health and safety matters, you demonstrate a commitment to their well-being and
create a culture of continuous improvement in health and safety practices.

By adhering to your health and safety policy, you can minimize the risk of accidents, promote
employee well-being, and create a safe and productive working environment for everyone involved
in your business.

Risk assessments

As an employer, it is imperative to fulfill your legal duty of care by ensuring the health and safety of
your employees and others in the workplace. This not only protects individuals from harm but also
mitigates potential liabilities and reputational risks for your business. Employing a systematic
approach to managing health and safety risks is crucial.

Firstly, conducting a comprehensive hazard identification process is essential. This involves assessing
your business operations and premises to identify any potential sources of harm. In your specific
case, hazards such as manual handling of heavy items during deliveries, vehicle-related risks, and
slip/trip hazards should be thoroughly evaluated.

After identifying the hazards, a risk assessment is conducted to gauge the likelihood and severity of
harm that could result. This analysis helps prioritize risks and enables you to allocate resources
effectively. For instance, the risk of injuries from manual handling may be high if proper techniques
and equipment are not provided.

Implementing control measures is the next step in mitigating identified risks. These measures can
include providing appropriate training to employees on safe lifting practices, ensuring the availability
of suitable equipment like trolleys or lifting aids, and establishing protocols for vehicle safety and
defensive driving. By implementing these controls, you create a safer working environment and
reduce the likelihood of accidents or injuries occurring.
Communication and training play a crucial role in promoting a safety-conscious culture within your
business. Clear and effective communication of health and safety policies, procedures, and
expectations to your employees is essential. Providing training that is tailored to their specific job
roles equips them with the knowledge and skills necessary to maintain their safety. Regular
refreshers and reminders, as well as ongoing communication channels for reporting concerns or
near-miss incidents, foster a proactive safety mindset throughout the organization.

Additionally, ensuring the provision of basic facilities, such as toilets and washbasins, is vital for
maintaining the health and well-being of your employees. These facilities are not only legally
required but also contribute to a comfortable and hygienic working environment, enhancing
employee satisfaction and productivity.

Regular monitoring and review of health and safety practices are essential to maintaining an
effective system. This involves conducting routine inspections of vehicles and equipment, promptly
addressing reported concerns, and encouraging employees to actively participate in identifying
hazards or potential improvements. By proactively monitoring and reviewing your health and safety
measures, you can identify areas for improvement and prevent incidents before they occur.

Taking a diligent approach to managing health and safety risks not only safeguards your employees
but also protects your business from potential legal and financial repercussions. Demonstrating a
strong commitment to health and safety through effective risk management strategies enhances
your company's reputation, fosters employee loyalty, and ensures compliance with relevant
regulations.

First aid in work

To ensure the safety and well-being of your employees, it is crucial to have a trained first aid
representative on site. This individual should be proficient in first aid techniques and be responsible
for training your employees in basic first aid procedures. Considering the nature of your work
involving driving, it is essential that your employees carry a first aid kit in their vehicles. This allows
for immediate response and treatment in the event of any injuries or medical emergencies that may
occur while on the job.

Developing workplace first-aid procedures is another important aspect of managing health and
safety effectively. These procedures should outline the steps to be taken in case of an emergency,
including how to access medical assistance, contact emergency services, and administer basic first
aid. By having clear and well-defined procedures in place, you can ensure a prompt and organized
response to any incidents that may arise.

Understanding the specific conditions of your workplace, the needs of your employees, and any
potential health and safety hazards is crucial in determining the appropriate first aid measures to
implement. Conducting a thorough assessment of the workplace, including identifying potential risks
and hazards, will help inform your first aid planning and ensure that you are adequately prepared to
handle any emergencies that may arise.

To promote a culture of health and safety awareness, it is beneficial to display health and safety
posters in the workplace. These posters can provide visual reminders of important safety practices,
emergency procedures, and contact information for reporting incidents or seeking assistance. This
serves as a constant reminder to your employees to prioritize their own safety and that of their
colleagues.
In terms of insurance, it is a legal requirement to have employer's liability insurance when you have
employees. This insurance provides coverage in the event that an employee becomes ill or is injured
as a result of their work. Having employer's liability insurance protects you financially, as employees
have the right to claim compensation for work-related illnesses or injuries. It is important to ensure
that you have appropriate coverage and comply with legal requirements to mitigate potential
financial risks.

Keeping records of workplace injuries and accidents is not only a legal obligation but also a valuable
tool for risk management. By maintaining detailed records, you can identify patterns or trends in
accidents and injuries, enabling you to assess and manage risks more effectively. This information
helps you identify areas that may require additional safety measures, training, or modifications to
prevent future incidents.

Overall, prioritizing first aid training, developing procedures, displaying health and safety posters,
having appropriate insurance coverage, and maintaining comprehensive records contribute to a
safer working environment and demonstrate your commitment to the health and well-being of your
employees.

Data protection legislation

As an online business that collects personal information from customers, it is crucial to comply with
data protection regulations to ensure the privacy and security of their data. The data protection
principles guide the proper handling of personal data and include requirements such as using the
data fairly and lawfully, specifying the purposes for which the data will be used, ensuring the data is
accurate and up to date, and protecting it against unauthorized access or loss.

To ensure compliance with data protection laws, regular security check-ups should be conducted on
your systems to identify and address any potential vulnerabilities. Any personal data collected
should be securely stored and kept up to date. Transparency is key, so customers should be
informed about how their data will be used and if it will be shared with other businesses. It is
important to prioritize the protection of sensitive information, such as race, ethnicity, religious
beliefs, sexual orientation, and political opinions, as these require stronger legal protection due to
the potential impact on individuals.

When hiring employees, it is essential to make informed decisions based on legal access to
information. Providing employees with a written statement of terms and conditions of employment
within two months of their start date ensures clarity and transparency regarding their rights and
obligations. Storing employee and business information securely is crucial, with restricted access
granted only to authorized personnel. Digital records should be password protected, and any
physical documentation should be stored in a secure and locked location.

Having a fair and transparent data protection policy is important, and it should be communicated to
employees and other stakeholders within the business. Regular training and awareness programs
can help ensure that everyone involved understands their responsibilities in maintaining data privacy
and security.

In managing health and safety, hiring a qualified professional with expertise in health and safety
management is a prudent step. This individual can provide guidance on complying with the law,
assessing risks, implementing safety measures, and maintaining a safe working environment. Their
expertise will help you develop appropriate policies, procedures, and training programs to ensure
the well-being of your employees and comply with health and safety regulations.

By prioritizing data protection and implementing proper health and safety measures, you can
establish a trustworthy reputation, build customer confidence, and protect the interests of your
employees and your business.

Environmental regulations and ethnic

Adopting an ethical approach in your business operations demonstrates a commitment to

environmental responsibility and social values. Environmental laws, particularly those related to
pollution, play a significant role in shaping business practices. In the context of your delivery service,
taking measures to reduce vehicle emissions is a proactive step towards minimizing air pollution. By
incorporating bicycles for smaller orders, you can effectively decrease pollution levels and showcase
your dedication to sustainability.

Sourcing products from ethical suppliers aligns with your commitment to ethical business practices.
Avoiding suppliers that engage in child labor not only upholds human rights but also safeguards your
business's reputation. By ensuring that your supply chain adheres to ethical standards, you attract
socially conscious customers who value responsible sourcing.

Creating an inclusive and discrimination-free workplace is crucial both from a legal and ethical
standpoint. By promoting equal opportunities and fair treatment during the recruitment process,
you avoid any form of discrimination and foster a positive work environment. Respecting the rights
and dignity of employees contributes to employee satisfaction, engagement, and long-term success
for your business.

Complying with health and safety legislation and prioritizing employee well-being are fundamental
aspects of ethical business practices. By providing a safe working environment, addressing risks
associated with specific job roles, and paying employees fairly in accordance with minimum wage
regulations, you prioritize their welfare. These practices not only ensure legal compliance but also
enhance employee motivation, reduce absenteeism, and attract and retain talented individuals.

When advertising your business, it is important to accurately represent your products and services.
Misleading advertising can harm your business reputation and erode customer trust. By ensuring
that your marketing messages align with the actual service and product offerings, you build
credibility and foster long-term customer relationships.

Effective waste management is another key component of ethical business practices. Reducing
waste through strategies such as reusing and recycling packaging demonstrates your commitment to
minimizing environmental impact. By monitoring waste disposal and exploring opportunities to
repurpose waste as a resource, you can contribute to a circular economy and actively reduce your
business's ecological footprint.

By integrating these ethical considerations into your business operations, you demonstrate social
responsibility, build a positive brand image, and contribute to long-term sustainability. While initial
costs and efforts may be involved, the benefits, such as increased customer loyalty, employee
satisfaction, and overall business success, make it a worthwhile investment in the future.
M2: Analyse the financial and marketing plans for your micro-business.

D2: Evaluate your plan for a micro-business and justify your conclusions

Financial considerations

Pricing policy

Market penetration

Market penetration is indeed a valuable marketing strategy for businesses aiming to expand their
customer base and market presence. By offering lower prices, businesses can stimulate demand for
their products or services, leading to increased market share. One of the advantages of this strategy
is that it allows businesses to take advantage of economies of scale. With a higher product demand
resulting from lower prices, businesses can achieve larger production volumes, which can lead to
cost savings and improved efficiency.

Moreover, market penetration is an effective approach for rapid growth. By attracting customers
from competitors through lower pricing, businesses can quickly expand their consumer base and
increase their market share. Lower prices can make the proposition of switching to a new brand or
product more appealing to consumers, facilitating the growth of the business.

However, there are also disadvantages to consider when implementing a market penetration
strategy. Firstly, businesses may face limitations in their ability to continuously lower prices. The
costs associated with product development and manufacturing can be significant, and small firms
may struggle to reduce costs enough to sustain long-term lower prices. Additionally, competing with
larger businesses that have established market presence and resources can present challenges in
terms of price competitiveness.

Furthermore, there is a risk that the market penetration strategy may not yield the desired results,
especially when entering a market where competitors already offer low prices. In such cases, the
impact of further lowering prices may be diminished, and businesses may need to explore additional
strategies or differentiate their offerings to achieve success.

Overall, market penetration can be an effective strategy for businesses to expand their market share
and customer base. However, careful consideration of the pricing dynamics, cost structures, and
competitive landscape is essential to ensure the sustainability and success of the strategy.

Market skimming

Market skimming is indeed a pricing strategy that can be employed by retailers to maximize their
revenue by initially setting a high price for a product and gradually lowering it over time. This
strategy targets consumers who have a strong desire for the product and are willing to pay a
premium price, enabling the business to capture maximum profits from this segment. Eventually, as
the price decreases, it attracts more price-conscious customers in subsequent market segments.

One of the advantages of market skimming is its effectiveness in segmenting the consumer base. By
starting with a higher price, businesses can cater to the demand from consumers who are willing to
pay a premium for the product, thereby maximizing their revenue from this group. As the price
decreases over time, it allows the business to expand its customer base and attract more price-
sensitive customers who may have been deterred by the initial higher price. This strategy ensures
that the business captures value from different segments of the market.

Another advantage of market skimming is its ability to create a perception of exclusivity and high
quality. By setting a high initial price, the product is associated with luxury or premium status,
attracting consumers who value prestige and are willing to pay a premium for it. This strategy helps
in building a strong brand image and generating brand loyalty among customers who perceive the
product as a must-have or a symbol of status.

However, there are some disadvantages to consider when implementing a market skimming
strategy. If the price reductions occur too quickly or frequently, it may lead to dissatisfaction among
early buyers who paid the higher price. This can create a perception of unfairness and negatively
impact customer loyalty. Additionally, market skimming may not be suitable for products or
industries where rapid price erosion is common, as it may undermine the perceived value of the
product and limit long-term profitability.

In conclusion, market skimming can be an effective pricing strategy to maximize revenue and target
different consumer segments. It allows businesses to capture value from customers with different
price sensitivities and create a perception of exclusivity and high quality. However, careful
consideration of price reductions and managing customer perceptions is crucial to avoid potential
drawbacks such as customer dissatisfaction and erosion of brand loyalty.

Neutral pricing

Neutral pricing is a pricing strategy where the prices of a product or service are set in line with the
general market and competitors' prices. By adopting a neutral pricing approach, a business aims to
position itself within the existing market without deviating significantly from the prevailing price
levels.

The main advantage of neutral pricing is its versatility across all stages of the product lifecycle. Since
prices are aligned with the market, this strategy allows the business to adapt to changing market
conditions and price fluctuations. It provides a sense of stability and familiarity to customers who are
accustomed to the prevailing market prices. Additionally, by pricing products competitively, a
business can avoid being perceived as overpriced and stay competitive within the market.

However, the disadvantage of neutral pricing is that it solely relies on market demand and does not
optimize the business's earnings potential. By closely following the market pricing, the business may
miss opportunities to differentiate its products or services and capture additional value. It can limit
the ability to gain market share based on factors such as product quality, unique features, or
superior customer service. In this approach, the business's success is dependent on market dynamics
rather than its own competitive advantages.

For your business, you have chosen to implement a market penetration strategy, which focuses on
capturing a larger market share by starting with low prices to stimulate product demand. This
strategy aligns with your objective of growing your customer base quickly. By offering competitive
prices, you can attract customers who are seeking affordable products with good quality. This
approach takes advantage of the existing market by offering lower prices compared to your
competitors, which can help you gain a larger market share.

Since your business operates online, potential customers have easy access to compare prices and
offerings. This makes it crucial to offer prices that are appealing to customers and create a
competitive advantage for your business. By capturing a significant market share, you can benefit
from economies of scale and cost savings in production, further enhancing your business's
profitability.

Overall, the market penetration strategy can be an effective approach to penetrate an existing
market and attract customers through competitive pricing. By focusing on building a larger customer
base initially, you can position your business for growth and establish a strong presence in the
market.

Sales forecast

Sales forecasting is a crucial aspect of business planning as it provides valuable insights for decision-
making, budgeting, and risk management. By accurately predicting future sales, you can effectively
allocate resources, plan for growth, and manage cash flow. It enables you to estimate costs and
revenue, allowing for better long-term and short-term performance assessment.

One of the key benefits of sales forecasting is its ability to identify potential cash flow issues in
advance. By having a clear understanding of expected sales and revenue, you can anticipate any
gaps or fluctuations in cash flow and take proactive measures to mitigate their impact on the
business. By using structured monthly actual statistics as a foundation, you can automate the
process of re-forecasting future cash positions, ensuring that your information remains accurate and
up to date.

However, sales forecasting does come with its challenges. One such challenge is the potential for
management errors when inputting data, leading to inaccurate results. It is important to ensure that
the data being used for forecasting is reliable and properly entered. Additionally, forecasting is not
always a precise estimate of future revenue and may be subject to internal biases. Sales teams,
driven by incentives and commissions, may have a natural inclination to set lofty goals, resulting in
exaggerated predictions.

Another challenge lies in processing the data and perceiving sales forecasting as merely an
administrative task that detracts from the sales team's focus on selling. This perspective can hinder
the utilization of past data to identify statistical trends and insights, both in the short term and long
term.

To overcome these challenges and risks associated with sales forecasting, it is essential to strike a
balance between optimism and realism. Avoid being overly optimistic and instead keep the sales
forecast simple, reducing costs and saving time. It is important to engage your sales management
team and leverage their expertise to recognize opportunities and identify potential discrepancies. By
continuously adjusting the input data to reflect real market conditions, incorporating actual sales
figures, pricing information, and demand levels, you can improve the reliability of your forecasts and
ensure they align with the market reality.
Regularly reviewing and refining your sales forecasting process, incorporating feedback from your
team, and adapting to changes in the market will help you make more accurate predictions and
optimize your business planning and resource allocation.

Salles forecast for delivery service

Based on market trends and consumer behaviour, sales predictions for various food categories can
be made for the upcoming year. The frozen foods segment is expected to experience an initial surge
in sales due to the impact of lockdown restrictions. During this period, consumers had more time to
cook from scratch, leading to an increased demand for frozen food products. However, as the UK
gradually emerges from lockdown and life returns to normal, it is anticipated that consumers will
prefer dining out and opting for quick meal solutions. Consequently, the sales of frozen foods may
experience a decline in the latter part of the year.

In contrast, the sales of bread and milk are likely to start off modestly due to the introduction of a
new business. As a new player in the market, it may take time to establish credibility and build
customer trust. Consumers may initially hesitate to purchase these staple products until they are
confident in the quality and reliability of the brand. Therefore, sales projections for bread and milk
may be comparatively lower in the initial stages, but they have the potential to grow as the brand
gains recognition and trust in the market.

On the other hand, the sales of beverages, particularly cold drinks, are expected to witness a
significant increase throughout the year. The warmer months, spanning from May to September,
coincide with the UK summer season when consumers seek refreshing beverages. This, coupled with
the forecast of a particularly hot summer, suggests a higher demand for cold drinks. The
consumption patterns during this period indicate a favorable market for beverage sales. However, as
the year progresses and temperatures begin to drop, the sales of cold drinks may decrease, giving
way to warmer alternatives such as coffee, which are more suitable for colder weather conditions.

Furthermore, sales projections for oils, sauces, and condiments indicate an upward trend towards
the end of the year. The festive season in December, accompanied by holiday traditions and home-
cooked meals, drives an increased demand for ingredients such as oils, sauces, and condiments. As
the country gradually emerges from lockdown restrictions, consumers are expected to indulge in
culinary preparations, leading to an upswing in sales for these products.

It is important to note that these sales predictions are subject to market conditions, consumer
preferences, and external factors that may influence purchasing decisions. Continuous monitoring of
market trends and consumer behavior, along with agile adjustments to the business strategy, will
help capitalize on emerging opportunities and optimize sales performance.

Projected cost

Start-up costs

Start-up costs refer to the expenses incurred during the initial phase of establishing a business. In
the case of my business, I have identified several key areas where start-up costs will be incurred.
Firstly, the purchase or lease of a van or other vehicles for the delivery service will be required. To
accommodate this expense, approximately £1,000 will be allocated from the start-up budget. This
will ensure the smooth operation of the delivery service and enable efficient transportation of goods
to customers.

Additionally, the creation and maintenance of a professional website are crucial for establishing an
online presence and attracting customers. Allocating a monthly budget of around £30 will cover
website development, hosting, and regular updates. This investment will contribute to the business's
visibility, customer engagement, and overall success in the digital marketplace.

Another significant aspect of start-up costs is the recruitment and salaries of employees. As part of
my business plan, I anticipate employing six individuals. To ensure fair compensation and attract
competent staff, approximately 20% of the start-up budget will be allocated towards employee
salaries and benefits. This investment in human resources will contribute to a productive and
efficient workforce, ultimately driving the success of the business.

Marketing expenses are also crucial for promoting the business and reaching potential customers. I
plan to allocate below 10% of the total budget towards marketing activities. This may include online
advertising, social media campaigns, print materials, and other promotional strategies. Effective
marketing efforts will help raise awareness, generate customer interest, and drive sales.

Lastly, a portion of the start-up budget, approximately £200 - £300, will be dedicated to stocking
inventory. This will ensure that the business has a sufficient supply of products to meet customer
demands and fulfil orders promptly. Managing the inventory effectively is essential for maintaining
customer satisfaction and maximizing sales potential.

To fund these start-up costs, I have chosen a combination of borrowing money from family and
friends and utilizing my personal savings. By borrowing from family and friends, I can benefit from
their support and flexible repayment terms, which may not be available through traditional bank
loans. Utilizing my savings allows me to minimize the amount of money borrowed and reduce future
interest payments.

Overall, the estimated start-up cost for my business is £15,000. This budget allocation will cover
essential expenses such as vehicles, website development, employee salaries, marketing initiatives,
and inventory procurement. Careful financial planning and strategic allocation of funds will set the
foundation for a successful launch and sustainable growth of the business.

Fixed costs

Fixed costs are essential for running a business as they represent expenses that do not fluctuate with
the number of goods or services produced or sold. In my business, I have identified several fixed
costs that are associated with different aspects of the business operations.

One of the fixed costs is car insurance, which is crucial for the vehicles used in the delivery service.
The estimated monthly cost for car insurance is approximately £220. This expense remains constant
regardless of the number of deliveries made or the distance traveled. Car insurance provides
necessary coverage and protection for the business's vehicles, ensuring compliance with legal
requirements and mitigating potential risks.

Another fixed cost is public liability insurance, which is vital for protecting the business against any
claims arising from third-party injury or property damage. The monthly expense for public liability
insurance is approximately £90. This cost remains constant and provides peace of mind by
safeguarding the business from unexpected liabilities that may occur during its operations.

Employee wages are also considered fixed costs as they are predetermined and do not vary with the
number of goods or services produced. The hourly rate for employee wages is set at £8, and the
actual amount paid will depend on the number of hours worked by each employee and their specific
job roles. By categorizing employee wages as fixed costs, it ensures a consistent allocation of
resources for compensating employees and maintaining a stable workforce.

Additionally, the cost of petrol for the business's vehicles is considered a fixed cost. While the price
of petrol may fluctuate, the monthly expenditure on petrol can be estimated based on the average
fuel consumption of the vehicles. With the current price of £1.24 per liter, the total cost of petrol will
vary depending on the specific vehicle used and the distance covered during operations.

These fixed costs, including car insurance, public liability insurance, employee wages, and petrol
expenses, are essential for the smooth functioning of the business. By understanding and accounting
for these fixed costs, I can accurately assess and allocate resources to ensure the business's financial
stability and efficient operation.

Variable costs

Variable costs are an essential aspect of business operations as they fluctuate in proportion to the
level of production output. In my business, I have identified several variable costs that are directly
influenced by the volume of goods or services produced.

One of the variable costs is the rent for the warehouse. The monthly rental expense of the
warehouse is £280. This cost is directly tied to the business's production volume since the
warehouse is used to store inventory and facilitate order fulfillment. As production increases, the
need for warehouse space expands, resulting in higher rental costs. Conversely, if production
decreases, the demand for warehouse space reduces, leading to lower rental expenses.

Packaging is another variable cost that varies based on the production volume. The estimated cost
for packaging is £300. As the business produces more goods, the requirement for packaging
materials increases, resulting in higher costs. Similarly, if production decreases, the need for
packaging materials reduces, leading to lower expenses in this area.

Variable costs also include bills, such as utilities and other operational expenses that fluctuate based
on the level of production. These costs can vary depending on factors such as electricity usage,
water consumption, and other utility charges. The actual amount spent on bills will be directly
influenced by the business's production activities. As production increases, the usage of utilities will
also rise, resulting in higher bills. Conversely, reduced production levels will lead to lower utility
expenses.

By recognizing and categorizing these variable costs, such as warehouse rent, packaging expenses,
and bills, I can accurately assess the impact of production volume on overall costs. This
understanding allows me to make informed decisions about production levels, pricing strategies, and
resource allocation to optimize the business's profitability. Additionally, managing variable costs
effectively is crucial for maintaining cost control and ensuring the business's financial stability during
different production periods.
Break-even forecast

The breakeven point is a significant concept in business, representing the point at which a
company's total revenue matches its total costs. At this stage, there is neither profit nor loss,
resulting in a state of equilibrium. The breakeven point marks a crucial milestone for a business, as it
signifies the transition from incurring costs to generating profits.

To calculate the breakeven point, several key components need to be considered. The first
component is the selling price per unit, which refers to the price charged to customers for each unit
of a product or service. The selling price per unit directly contributes to the revenue generated by
the business.

Another important component is the total fixed costs, which encompass all the costs required to
produce the first unit of the product or service. These costs remain constant regardless of the level
of production or sales. Fixed costs typically include expenses such as rent, salaries, insurance, and
other overhead expenses necessary to sustain business operations.

Additionally, the variable cost per unit plays a crucial role in calculating the breakeven point.
Variable costs are costs that vary in direct proportion to the production of each additional unit.
These costs are incurred as the business produces and sells more units of its product or service.
Examples of variable costs include direct labor, raw materials, packaging, and commissions.

By determining the selling price per unit, total fixed costs, and variable cost per unit, businesses can
calculate the breakeven point. This calculation involves dividing the total fixed costs by the
difference between the selling price per unit and the variable cost per unit. The resulting figure
represents the number of units that need to be sold to cover all costs and achieve breakeven.

Understanding the breakeven point is essential for businesses to assess their financial performance
and make informed decisions regarding pricing, production levels, and cost management. By striving
to surpass the breakeven point, businesses can aim to generate profits and achieve sustainable
growth.

Calculating the Break-even point for my business

Fixed costs: £15,000

Variable cost per unit: £20

Selling price: £30

Contribution per unit: £30 - £20 = £10

Contribution margin ratio: £10 ÷ £30 = 0.33 (or 33.33%)

To calculate the break-even point in terms of units sold, we can use the formula:

Break-even point (in units) = Total fixed costs ÷ Contribution per unit

Break-even point (in units) = £15,000 ÷ £10 = 1,500 units

This means that your business will break even when it sells 1,500 units of products and services.
Selling up to this quantity will cover the fixed costs, and any additional units sold beyond this point
will generate profit equal to the contribution per unit (£10).

To calculate the break-even point in terms of sales value, we can use the formula:

Break-even point (in sales) = Total fixed costs ÷ Contribution margin ratio

Break-even point (in sales) = £15,000 ÷ 0.33 = £45,454.55 (rounded to £45,500)

This means that your business will break even when it reaches a sales value of £45,500. Up to this
sales value, the business will cover its fixed costs only, and any sales value above this point will result
in profit equal to the contribution margin. Any sales beyond £45,500 will contribute to the
profitability of the business.

Understanding the break-even point in terms of units and sales value can help you assess the
viability of your business, set sales targets, and make informed decisions regarding pricing, cost
management, and overall financial performance

Having a break-even forecast is crucial for my business as it serves multiple important purposes.
Firstly, it helps identify any missing expenses or costs that may have been overlooked. By thoroughly
analyzing both committed and variable costs, I can ensure that all financial commitments are
accounted for and avoid any surprises in the future.

Furthermore, a break-even forecast enables me to understand and evaluate the cost structures of
my business. It allows me to determine the number of units I need to sell in order to cover expenses
or achieve profitability. This knowledge is invaluable in setting realistic goals and making informed
decisions regarding pricing strategies, cost management, and overall financial performance.

A break-even forecast also plays a key role in mitigating financial strains. By identifying the break-
even point, I can assess the financial viability of a business idea or project. If the forecast indicates
that the break-even point is not achievable or would pose a significant risk, I can consider alternative
options or adjust my plans accordingly. This helps minimize potential financial setbacks and ensures
that I make sound decisions for the long-term success of my company.

Moreover, a break-even forecast assists in setting revenue targets. Once I have determined the
break-even point, I can set specific sales objectives that align with the number of units I need to sell.
This provides clarity and focus, making it easier to track progress and work towards achieving those
targets.

Lastly, having a break-even forecast allows me to price my products or services strategically.

Understanding how different pricing scenarios impact profitability is essential for making informed
pricing decisions. By considering the break-even point and the associated costs, I can ensure that my
pricing strategy aligns with my financial goals and enables me to cover all necessary expenses.

a break-even forecast serves as a valuable tool for financial planning, risk management, goal setting,
and pricing strategies. It provides a comprehensive understanding of the financial aspects of my
business and helps ensure its long-term sustainability and success.

The reliability and accuracy of the break-even research heavily rely on the quality and precision of
the data I have. If the data used in the analysis is incorrect or incomplete, it can undermine the
effectiveness of the break-even calculations. Fluctuating costs can further complicate the accuracy of
the analysis, as it becomes challenging to predict and account for cost variations accurately.
Another limitation of break-even analysis is that it does not consider the competitive landscape. The
presence of new entrants or changes in market dynamics can impact the demand for my products or
services, leading to shifts in pricing strategies. These external factors can significantly influence the
break-even point, and without considering them, the analysis may provide an incomplete picture of
the business's financial situation.

Break-even analysis is typically most suitable for businesses with a single pricing point, where costs
are more straightforward to allocate and predict. However, in cases where multiple products with
different costs are involved, the break-even analysis may become overly simplistic and fail to provide
a comprehensive understanding of the financial dynamics.

It is important to note that the break-even point is not a fixed value and should be periodically
reassessed and updated as costs fluctuate and business conditions evolve. Regular review and
adjustment of the break-even point ensure its relevance and usefulness in decision-making
processes.

Cash flow forecast

What cash flow forecast means

Cash flow forecasting is a crucial tool for businesses to project and predict their expected financial
position over a specific period, typically 12 months. It relies on estimating future cash inflows and
outflows, primarily focusing on expected payments and accounts receivable.

The primary purpose of cash flow forecasting is to aid in planning for the future and support
important decision-making processes within the business. By having a clear understanding of the
projected cash flow, businesses can make informed decisions such as determining when to employ
additional staff or identifying the need for external funding. Without a cash flow forecast, it would
be challenging to estimate the company's cash position at any given point in time accurately. As
various factors such as income, taxes, expenses, and debt repayments come into play, the
complexity of managing cash flow increases.

Established businesses can compare their actual cash flow against the forecast to evaluate their
performance and determine if they are meeting their financial goals. Adjustments can be made if
necessary to align the actual cash flow with the forecasted values. Having a basic cash flow forecast
enables me to identify potential cash flow gaps or periods where financial assistance might be
needed, either from personal funds or external sources of funding. It helps me understand the
timing and magnitude of cash inflows and outflows, allowing me to effectively manage and allocate
financial resources.

Maintaining accurate and up-to-date records of cash inflows and outflows is crucial for businesses.
The cash flow forecast provides estimates of the company's operating cash flows within a specified
time frame, allowing me to project the expected bank account balances at the end of each period,
typically on a monthly basis. This information provides valuable insights into the company's liquidity
position and enables proactive management of cash flow to ensure financial stability.

In summary, a well-prepared cash flow forecast serves as a vital tool for businesses to plan, make
informed decisions, and manage their financial resources effectively. By accurately projecting cash
inflows and outflows, businesses can maintain a healthy cash position and navigate potential cash
flow challenges.

Why the cashflow forecast is so important to my business

The cash flow forecast is extremely important for your business due to several reasons. Firstly, it
enables you to identify potential issues with customer payments. By closely monitoring customer
trends and the speed at which they settle their debts, you can proactively address any delays or
difficulties in payment. This helps maintain a healthy cash flow by ensuring a consistent inflow of
funds from customers.

Additionally, the cash flow forecast allows you to anticipate and address any potential problems that
may arise in the upcoming year. By analyzing your projected cash flow, you can identify periods of
cash shortfall or financial challenges and make informed decisions to mitigate or overcome them.
This forward-looking approach enables you to take proactive measures and plan ahead, minimizing
the impact of any potential obstacles on your business operations.

Moreover, the cash flow forecast plays a crucial role in preventing your business from facing
bankruptcy, even if it is currently profitable. Profitability alone does not guarantee financial stability.
By having a clear view of your company's cash flow, you can assess its liquidity and ensure that
sufficient funds are available to cover expenses, debt repayments, and other financial obligations.
This helps you avoid cash shortages or insolvency, preserving the long-term viability of your
business.

Having an accurate cash flow forecast also allows you to prepare for any upcoming shortfalls well in
advance. By identifying potential gaps between cash inflows and outflows, you can take proactive
measures to fill those gaps, such as securing additional funding, adjusting payment terms with
suppliers, or implementing cost-saving measures. This proactive approach helps you maintain a
healthy cash position and avoids last-minute financial crises.

In summary, the cash flow forecast is vital for your business as it helps you monitor customer
payments, anticipate potential challenges, prevent bankruptcy, and proactively manage your
company's financial stability. By staying ahead of cash flow fluctuations and making informed
decisions based on your forecast, you can ensure the long-term success and sustainability of your
business.

Statement of financial position

The statement of financial position, or balance sheet, is a crucial financial statement that provides a
snapshot of a business's financial position at a specific point in time. It presents a summary of the
business's assets, liabilities, and equity.

Assets represent what the business owns and controls. These can include tangible assets such as
property, equipment, and inventory, as well as intangible assets like intellectual property or patents.
Assets are important because they generate future economic benefits for the business.

Liabilities, on the other hand, represent the obligations or debts that a business owes to external
parties. This can include loans, credit lines, accounts payable to suppliers, or other forms of financial
obligations. Liabilities reflect the business's financial obligations and the amounts that need to be
repaid over time.

Non-current assets, also known as long-term assets, are those assets that have a useful life of more
than one year. These include long-term investments, property or equipment held for long-term use,
or non-current portions of loans or debts.

Equity represents the owner's investment in the business. It is the residual interest in the assets of
the business after deducting liabilities. Equity includes the owner's capital contributions, retained
earnings, and other accumulated comprehensive income.

When reading the balance sheet, investors and potential investors can assess the financial health
and stability of the business. They can analyze the composition and value of assets to determine the
business's capacity to generate future cash flows. Additionally, they can evaluate the level of
liabilities to assess the business's financial leverage and its ability to meet its obligations.

The balance sheet provides important information for making investment decisions and assessing
the financial viability of a business. It helps investors determine if they can expect a fair return on
their investment by evaluating the business's assets, liabilities, and equity.

Preparing a bi-annual statement of financial position for my business is important for various
reasons. Firstly, it provides essential information about the business's revenue, profitability, debt,
and expenses. By reviewing these financial indicators, I can assess the overall financial health and
performance of the business.

Furthermore, external stakeholders, such as banks or potential investors, often rely on the financial
statement to make informed decisions. Banks, for instance, use the statement of financial position
to evaluate the business's creditworthiness and determine whether to grant loans. If the financial
position appears unfavorable, they may be hesitant to provide funding, as they may perceive it as a
higher risk.

Moreover, government authorities use the financial statement to calculate tax payments for the
business. Accurate and up-to-date financial information helps ensure compliance with tax
regulations and facilitates smooth interactions with tax authorities.

By regularly reviewing the statement of financial position, I can identify any trends or patterns within
the business. This enables me to detect potential issues or areas that require improvement. For
example, if I notice a consistent increase in expenses, I can investigate and take necessary measures
to control costs and maintain financial stability.

Additionally, having a clear view of the business's financial position prevents overspending and
accumulating excessive debt. It helps me make informed decisions about resource allocation and
prioritize financial commitments effectively.

Competitors within the market also take an interest in the financial statements of other businesses.
They may analyze the profits earned by my business to evaluate their own performance and adjust
their strategies accordingly.

Lastly, employees within the company may have access to the statement of financial position. This
allows them to understand how the business is being managed and make informed judgments about
its stability and future prospects. It fosters transparency and enhances employee confidence in the
management's decision-making.

preparing a bi-annual statement of financial position is crucial for my business as it provides valuable
insights, supports decision-making, influences external stakeholders, ensures financial compliance,
and fosters transparency and confidence among employees.

Capital structure and & income

The capital structure of my business, consisting of 60% debt and 40% equity, is strategically designed
to support its operations and financing needs. The allocation of debt and equity capital is based on
various factors and considerations.

By borrowing money from family and friends, I can benefit from more flexibility in terms of
repayment terms and potentially lower interest rates compared to traditional bank loans. This allows
me to manage my cash flow more effectively in the early stages of my business.

Additionally, obtaining a loan from a bank provides access to additional funds that may be necessary
to cover startup costs and initial investments. This can help bridge any financial gaps and ensure
sufficient capital for the business to operate smoothly.

The equity portion of the capital structure is sourced from my personal savings and previous
earnings. By injecting equity capital into the business, I am demonstrating my commitment and
belief in its potential for success. The use of personal funds also allows me to retain ownership and
control over the business.

Maintaining a balanced capital structure makes my business an attractive investment opportunity.

With a relatively small difference between debt and equity capital, the business is not heavily reliant
on borrowed funds. This can be appealing to potential investors as it signifies a manageable level of
risk and a higher likelihood of repaying loans.

Furthermore, the advantages of debt financing in my business's capital structure include potential
tax benefits. The interest payments made on the borrowed funds can be tax-deductible, reducing
the overall tax burden for the business. This can enhance cash flow and contribute to its financial
stability.

Moreover, utilizing debt financing allows the business to preserve ownership and control. By not
diluting equity through external investments, I can retain a larger share of the company's profits and
decision-making authority.

In a low-interest-rate environment, accessing debt capital becomes easier and more cost-effective.
This can provide opportunities for my business to secure favorable loan terms and leverage the
financial benefits of low borrowing costs.

the capital structure of my business, comprising a mix of debt and equity, is designed to support its
financial needs, provide flexibility, and minimize risk. It allows me to take advantage of tax benefits,
retain ownership, and access additional funds while ensuring a manageable debt burden.

ANALYSIS AND EVALUATION

SWOT ANALYSIS

STRENGHTS

One strength of my business is the 24/7 availability through the online platform. Customers can
conveniently access and place orders at any time, ensuring convenience and flexibility. Unlike
physical stores that have specific operating hours, my business remains accessible to customers
round the clock. This advantage sets my business apart from many traditional stores and enhances
the convenience factor for customers.

Another strength is the increased demand for delivery services during the COVID-19 pandemic. As
people are encouraged to stay at home and avoid public places, online grocery shopping and home
delivery have become highly sought after. By offering same-day delivery and accommodating
customer preferences, my business can tap into this growing market trend and cater to customers'
safety concerns.

The shift in consumer behavior due to the pandemic presents an advantage for my business. While
customers previously enjoyed shopping in physical stores, many now prefer the convenience and
safety of online shopping. By providing an online grocery service, my business can meet the needs of
those who are unable or hesitant to shop in-person. This positions my business to serve a broader
customer base and potentially capture a larger market share.

Additionally, by offering a delivery service, my business provides a valuable solution for individuals
who may have difficulty physically shopping for themselves. This can be particularly beneficial for
elderly or disabled customers who may face mobility challenges. By enabling them to shop from the
comfort of their homes, my business enhances accessibility and inclusivity.

the strengths of my business lie in its 24/7 availability, catering to the growing demand for delivery
services, capitalizing on the shift in consumer behavior, and providing accessibility to those who
require assistance. These factors contribute to the appeal and competitive advantage of my business
in the online grocery market

WEAKNESS

One weakness of my business is the potential unavailability of certain products in stock. If a specific
product is not available, customers may have to settle for a more expensive alternative or forego
purchasing altogether. This differs from the experience of shopping at physical stores, where
customers can easily check other locations for the desired product. To address this weakness, I will
focus on maintaining sufficient stock levels for each product to minimize instances of unavailability
and ensure customers can find what they need.

Another weakness is the need for my business to adapt and stay up-to-date with rapidly advancing
technologies. Without a competent IT department managing the website, there is a risk of frequent
website crashes. Such service interruptions can result in significant order losses and negatively
impact the customer experience. To mitigate this weakness, I will prioritize investing in a skilled IT
team to effectively manage and maintain the website, ensuring its stability and reliability.

Furthermore, the delivery service industry is subject to continuous changes and evolution. To remain
competitive, my business will need to keep pace with industry trends and innovations. Failing to
conduct proper research and development efforts may hinder the growth of my business and make
it challenging to stay ahead of the competition. To overcome this weakness, I will allocate time and
resources to conduct thorough market research, closely monitor competitors, and seek out
professionals in the field to drive continuous improvement in my business operations, including
website management and marketing strategies.

By addressing these weaknesses proactively, such as optimizing stock management, investing in IT

expertise, and staying abreast of industry developments, my business can enhance its overall
performance and competitiveness in the online grocery market

Opportunities

One opportunity for my business is to establish partnerships with larger companies in the industry.
During the pandemic, when customers are hesitant to go outside, partnering with well-known
brands can help attract more customers and boost sales. By leveraging the customer base of these
larger companies, I can expand my market share within the industry. To capitalize on this
opportunity, I will actively seek out strategic partnerships that align with my business objectives and
customer preferences.

Another opportunity in this market is the desire of customers to have a wide variety of options
available to them. By offering a range of products on my website that are not only of good quality
but also affordable, I can attract customers who are looking for value for money. Providing
customers with ample choices and ensuring that the products meet their quality and affordability
expectations will encourage them to make purchases from my business. To maximize this
opportunity, I will focus on curating a diverse product selection that meets the needs and
preferences of my target customers, making their shopping experience convenient and satisfying.

By seizing these opportunities, such as establishing partnerships with larger companies and offering
a wide variety of quality and affordable products, my business can differentiate itself in the market
and attract a larger customer base. This will contribute to the growth and success of my business
within the online grocery industry.

THREATS

One threat that my business faces in this market is the presence of international competitors. Being
based in London, there is always a risk of competition from similar businesses that have a larger
scale or greater resources. These international competitors may have established themselves in
multiple markets and have the potential to overshadow my business. To address this threat, I will
focus on building a strong local presence and establishing a loyal customer base. By providing
exceptional customer service, personalized experiences, and targeted marketing campaigns, I can
differentiate my business and create a niche within the market that appeals to local customers.

Another threat is the entry of well-established competitors who have also launched their own
delivery services, such as Amazon Fresh. These larger competitors already have a strong customer
base and brand recognition, which can make it challenging for a smaller business to compete. To
mitigate this threat, I will emphasize the unique value proposition of my business, such as offering
high-quality products at affordable prices, personalized customer interactions, and timely and
reliable deliveries. By providing a differentiated and customer-centric experience, I can attract and
retain customers who value the advantages my business offers.
Additionally, there is a potential threat of stores implementing in-store promotions to attract
customers back after the pandemic. These promotions can have a significant impact on my
business's revenue as customers may be drawn to the convenience of shopping in-store. To address
this threat, I will continue to focus on the advantages of online shopping, such as the convenience of
24/7 access, home delivery, and a wide product selection. I will also offer regular discounts and
promotional offers to incentivize customers to choose my online service over in-store alternatives.

By being proactive in addressing these threats and leveraging the unique aspects of my business, I
can navigate the competitive landscape and establish a strong position within the online grocery
market. Continuous adaptation, customer loyalty, and value-driven strategies will be key to
mitigating threats and ensuring the long-term success of my business.

LIQUIDITY ANALYSIS

The current ratio of my business is calculated as follows:

Current ratio = Current assets / Current liabilities

Given the information provided:

Current assets = £58,240

Current liabilities = £40,280

Current ratio = £58,240 / £40,280

Current ratio = 1.45

The current ratio of 1.45 indicates that for every £1 of short-term debt my business owes, it has
£1.45 of current assets available to cover those debts. This suggests that my business is in a
favorable position in terms of liquidity, as it has sufficient resources to meet its short-term
obligations.

Investors and creditors generally prefer to see current ratios above 1.0, as it indicates that a business
has enough liquidity to cover its current liabilities. With a current ratio of 1.45, my business
demonstrates a healthy liquidity position, which can enhance its creditworthiness and attractiveness
to potential investors.

This analysis reassures investors that my business has the ability to meet its short-term financial
obligations and suggests that the business is managing its liquidity effectively. It implies that my
business can honor its commitments, manage working capital efficiently, and potentially generate
profits beyond its debt obligations.

Profibilaty analysis

Profitability analysis is a crucial tool for my business as it enables me to assess and maximize the
profitability of my projects and overall operations. By utilizing various metrics such as Gross Profit
Percentage of Sales, Net Profit Percentage of Sales, and Return on Capital Employed (ROCE), I can
gain insights into the financial performance and efficiency of my business.
Gross Profit Percentage of Sales is calculated by dividing the gross profit by the total sales revenue
and multiplying by 100. This ratio indicates the portion of sales revenue that remains after deducting
the cost of goods sold, representing the profitability of the core operations of my business.

Net Profit Percentage of Sales is calculated by dividing the net profit by the total sales revenue and
multiplying by 100. This ratio provides a measure of the profitability of my business after considering
all expenses, including operating expenses, interest, and taxes. It reflects the overall profitability of
the business.

Return on Capital Employed (ROCE) measures the efficiency with which my business utilizes its
capital to generate profits. It is calculated by dividing the net profit before tax by the total capital
employed (equity + long-term debt) and multiplying by 100. ROCE helps me assess the return on the
investment made in my business and indicates how effectively the capital is employed to generate
profits.

By regularly analyzing these profitability ratios, I can identify areas where improvements can be
made to enhance profitability. It helps me make informed decisions regarding pricing strategies, cost
control measures, and resource allocation. Maximizing profitability is crucial for the long-term
success and sustainability of my business, as it allows me to generate sufficient returns to cover
expenses, invest in growth opportunities, and ensure financial stability.

To calculate the profitability analysis for my business using ROCE and Gross Profit Percentage of
Sales, I will utilize the provided data:

Total sales: £68,162

Cost of sales/production cost: £18,182

Other expenses: £42,146

Gross profit: Total sales - Cost of sales = £49,980

Net profit before interest and tax: Gross profit - Other expenses = £7,834

Total capital invested: £10,000

Return on Capital Employed (ROCE):

ROCE = Net profit before interest and tax / Total capital invested

ROCE = £7,834 / £10,000 = 0.7834

ROCE = 0.7834 x 100% = 78.34%

The Return on Capital Employed for my business is 78.34%.

Gross Profit Percentage of Sales:

Gross Profit Percentage of Sales = (Gross profit / Total sales) x 100%

Gross Profit Percentage of Sales = £49,980 / £68,162 x 100%

Gross Profit Percentage of Sales = 0.7335

Gross Profit Percentage of Sales = 0.7335 x 100% = 73.35%

The Gross Profit Percentage of Sales for my business is 73.35%.

These profitability ratios indicate the financial performance of my business. The ROCE of 78.34%
demonstrates the return generated from the capital invested, while the Gross Profit Percentage of
Sales at 73.35% highlights the profitability of the core operations of my business in relation to total
sales.

The return on capital employed for my business is 19.6%, this means that for every £1 invested into
this business there is a return of 20p. The gross profit percentage of sales for my business is 72,1%,
this means that for every £1 in sales, the business makes 72p in gross profit. It's good for an investor
to invest in my business because the rate of returns is higher than interest

Sensitivity analysis

The total sales forecast for my business is £90,100, and I am confident that this target is achievable
based on the market demand for the products I will be selling. As the seasons change, customer
needs and wants also to evolve, which presents opportunities for increased sales throughout the
year.

However, it is important to consider potential risks and variations in sales. If there were a 10%
reduction in sales, it would directly impact the gross profit margin. With a current gross profit of
£49,980, a 10% decrease in sales would result in a lower gross profit margin, highlighting the
sensitivity of profitability to sales performance.

To mitigate costs and maintain financial stability, I have identified areas where cost reductions can
be implemented without negatively impacting the business operations. By optimizing electricity and
utilities usage, such as adjusting AC settings and using energy-efficient light bulbs, cost savings can
be realized over time. Negotiating better prices with suppliers without compromising product quality
is another avenue to reduce costs and improve profitability.

Measuring the success of my business can be done through various means. Financial statements,
such as the income statement and balance sheet, provide insights into the profitability and financial
health of the business over a specific period. Customer satisfaction is another crucial indicator of
success, as satisfied customers are more likely to become repeat customers and contribute to the
business's growth. Monitoring customer reviews and tracking customer acquisition rates can provide
valuable feedback on the effectiveness of the products and services offered.

The worst-case scenario for my business would be running out of stock, as this would lead to
customer dissatisfaction and potential loss of sales. To avoid this, I will prioritize inventory
management by conducting regular stock checks, setting reorder points to ensure timely
replenishment, and establishing strong relationships with reliable suppliers to maintain a consistent
supply chain.

Protecting and safeguarding business records and data is critical to avoid setbacks and potential
penalties. Compliance with the Data Protection Act and implementing secure data management
practices are essential. Utilizing cloud-based technologies for data storage can offer off-site backups
and enhanced security measures to mitigate the risks associated with data loss or breaches.
By employing these strategies and monitoring key performance indicators, I aim to navigate
potential challenges and position my business for success in the market.

In conclusion, this business plan covers a comprehensive range of aspects necessary for setting up
and running a successful business. It begins with clearly defined aims and objectives, providing a
clear direction for the business. The marketing plan includes a thorough analysis of the target
market, competitors, and environmental factors, enabling a detailed understanding of the business
landscape.

Legal considerations have been taken into account to ensure compliance with relevant regulations.
Pricing policies have been carefully selected to maximize profitability and customer appeal. Sales
and cash flow forecasts have been developed to facilitate informed decision-making, resource
allocation, and risk management. These forecasts allow for estimation of costs, revenues, and overall
business performance.

The statement of financial position provides a snapshot of the business's financial health, enabling
stakeholders to assess its revenue, profitability, debt, and expenses. This transparency is crucial for
attracting investment and building trust with stakeholders.

The viability of the business plan is evident through its thoroughness and realistic approach. Being a
new player in the market, the business has the potential to achieve strong sales results and offers an
attractive investment opportunity. Additionally, the nature of the products being essential to
customers' needs increases the likelihood of repeat purchases and customer loyalty.

Looking ahead, the business envisions national expansion across the UK within the next five years.
This expansion strategy aims to capture a larger audience and enhance the business's overall reach
and market presence.

In summary, this business plan demonstrates a well-rounded approach to establishing and growing a
successful business. It addresses key aspects of the business, considers market dynamics, and sets
ambitious yet achievable goals for future growth and expansion.