Assignment on Enterprise and Entrepreneurship

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Executive summary
The proposed future business is a grocery store chain that will conduct its operations in the UK market.
The UK is one of the growing markets in the world. Grocery stores are playing a major role in the
economy of the UK. The report will detail the nature of the products sold, the business’s potential
customers, and the competitors of the business. The report will use secondary data to analyze the
business. The report will also provide a detailed analysis of the skills needed. Besides, 2 years of
projected profit and loss accounts and 2 years of proposed cash flow forecasts including break-even
analysis will be presented along with the suitable sources of funding for the business to grow. And lastly,
we will see how the business can obtain the resources, its management process and the vision of the
business.

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Table of Contents
Executive summary........................................................................................................................................2

Introduction....................................................................................................................................................4

Description of the business and products.......................................................................................................4

Target customers............................................................................................................................................4

Competitors....................................................................................................................................................5

Skill analysis..................................................................................................................................................6

Gap skills training......................................................................................................................................7

Financial plan.................................................................................................................................................7

Two years profit and loss account forecast................................................................................................7

Two years cash flow forecast.....................................................................................................................9

Break-even analysis...................................................................................................................................9

Sources of growing the business..................................................................................................................10

Resources planning......................................................................................................................................10

Management information system for the business.......................................................................................10

Vision for the business.................................................................................................................................11

Conclusion...................................................................................................................................................11

References....................................................................................................................................................11

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Introduction
As the UK market is one of the growing markets in the world, grocery stores are becoming highly
competitive and adopting new structures and techniques of doing business (Waddington et al.,2018). As
the sector is growing increasingly, competitors are inventing new techniques for attracting customers. A
grocery store provides different types of products like fresh fruits, meat, fish, vegetables, household
essentials, bakery items and snacks and many other items. Establishing a grocery store is a potential
business for entrepreneurs and it offers investors a great chance to earn profit (Hartmann-Boyce et
al.,2018). Nowadays, customers are switching to online shopping. The proposed grocery store will
provide service to the customers through online and will ensure a flexible payment system.

Description of the business and products

The size of the grocery chain UK’s store will be 5000 to 10000 square feet. The store will collect all the
products from local and seasonal suppliers and the customers will get the best product. To manage the
store, we will hire experienced and talented workers so that customers feel easy to communicate. Besides,
the store will also offer online service. Customers can easily do shopping from our website and we will
make sure of a flexible payment system. The grocery store chain will provide canned items, vegetables,
dairy products, fish, raw meat, baked products, baby foods, and fresh and frozen fruits. The store will also
provide non-food items such as clothing, household items. The business will mainly focus on food items.

Target customers
It is essential to keep in mind that the particular target clients may change based on the location, size, and
focus of the grocery shop in question, thus this fact must be taken into consideration. Research on the
market and demographic studies of the surrounding area are two tools that can be utilized to assist in
identifying a particular store's ideal clientele (Kabadurmus et al.,2023). The target customers of the
proposed grocery store will be general customers who shop every day, local residents who prefer nearby
grocery stores for their shopping, health-conscious people who seek organic and nutritious foods, and
online shoppers who like to shop online. The business will require both B2B and B2C business processes.
The store will need a B2B process because the store will need to buy the products from the wholesalers
which is business to business process. And then it will move to the B2C process because after purchasing
products from the wholesalers, the store will sell the product to the customers who are the end users of the
product. The USP of the product will be a lower price and higher quality. The store will try to provide
high-quality products at a reasonable price. The store will not try to earn any extra profit by charging

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much for any product. The available product that will be sold in the store will hopefully meet all the
needs of the potential customers.

Competitors
The UK is one of the fastest-growing markets in the world. The grocery store chain in the UK market is
highly competitive (Wang et al.,2023). The major 4 competitors are holding a large portion of the market
share (Beckers et al.,2022). The potential competitor of my grocery store chain can be:

1) Tesco which is the largest grocery store chain in the UK holding 27.4% of the market share.

2) Sainsbury's which is another potential competitor which is providing customers with a variety of
grocery products, holding 15 of the market share.

3) ASDA is holding 14.3% of the market share for its competitive pricing strategy.

4) Morrisons Offers a broad selection of products at a lower price and is currently holding 10% of the
market share.

The other competitors in the market are holding a market share of less than 10%.

Figure: Market share of the competitors.

Source: Daily mail online

To survive the competition and hold a significant market share, I will ensure high-quality products at a
reasonable price. All the workers will be highly trained and their training will continue which will make
them behave with the customers in the highest professional ways. Besides, we will provide all the

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 information about our products online. We will provide some offers and incentives to our new and regular
customers. We will perform our advertisement in the most attractive way. Besides, we will let the
customers try the samples of the product. I believe these can be the perfect reasons customers will buy
products from our stores rather than that of the competitors.

Skill analysis
Skills needed for the business Skills I have Gap skills

Ability to work under Ability to work under pressure. Time management skills

pressure
Willingness to take risks Risk-taking ability Financial skills

Effective communication Technological skills Customer service and marketing

skills
Time management skills Communication skills Branding skills

Analytical and problem- Analytical and problem-solving

solving skills skills.
Organizational skills Organizational skills

Technological and financial Business management

skills
Customer service and
marketing skills
Branding skills

Business management

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Gap skills training
1) Time management skills – To adopt time management skills, I need to divide the work and will
analyze how much time is needed for each work. In this way, I can develop this skill.

2) Financial skills- For this, I am currently learning finance and accounting basics.

3) Customer service and marketing- Currently doing an online class at HubSpot Academy to increase
this skill.

4) Branding skills- From The Chartered Institute of Marketing, I am learning the branding process.

Financial plan
Two years profit and loss account forecast
In the first year, it is predicted that the store will make £1000 from 100 items sold per day. This will make
a monthly sale of £100000. The projected profit and loss for the first year are given below:

particulars Amount (£) Amount (£)

Projected sales revenue (100,000*12) 1200000
Deduct: Expenses
Rent (£2000*12) 24000
Salary 50000
Inventory 400000
Marketing 100000
Other operational costs 200000
(774000)
426000
Profit before tax
(deduct): Income tax ______
426000
Net estimated yearly profit

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For the second year, the projected sale will be £2000 from 200 items sold per day. This will make a
monthly sale of £400000. The projected profit and loss for the first year are given below:

particulars Amount (£) Amount (£)

Projected sales revenue (400,000*12) 4800000
Deduct: Expenses
Rent (£2000*12) 24000
Salary ( hires some employees) 150000
Inventory 600000
Marketing 300000
Other operational costs 400000

(1474000)
Profit before tax 3326000
(deduct): Income tax
______
Net estimated yearly profit 3326000

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Two years cash flow forecast
Anticipated cash flow statement:

Particulars Year 1 Year 2

Cash inflow
Projected sales revenue 1200000 4800000
Start-up loan 200000 0
Other sources of funding 100000 100000
Total cash inflow 1500000 4900000

(Deduct) : Cash outflow

Rent (24000) (24000)
Salary (50000) (150000)
Payroll (10000) (20000)
Inventory (400000) (600000)
Marketing (100000) (300000)
Other operational costs (200000) (400000)
Total cash outflow (784000) (1494000)

Net cash flow 716000 3406000

Break-even analysis
The break-even point can be used to determine the minimum viable production level or the optimal sales
mix to aim for (Candio and Frew, 2023). By dividing the total fixed costs of manufacturing by the price
per unit minus the total variable costs of production, the break-even point can be calculated.

First-year break-even point:

Anticipated fixed cost = £75000

Anticipated selling price per unit = £25

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Anticipated variable cost per unit= £10

BEP = £75000/ (£25-£10) = 5000

Second-year break-even point:

Anticipated fixed cost = £174000

Anticipated selling price per unit = £40

Anticipated variable cost per unit= £15

BEP = £174000/ (£40 - £15) = £6960

Sources of growing the business

Online markets offer enormous expansion potential for businesses (Beckers et al.,2022). Social media
channels will initially serve as the primary sales and distribution mechanism for the company's wares in
the UK, but as the company grows, other online marketplaces like eBay and Amazon may be leveraged,
as may the addition of international shipping to other European countries and the development of a
website accepting a wider variety of payment methods (including Apple Pay, Google Pay, Card
Payments, and PayPal).

Resources planning
The start-up costs for starting the grocery store chain across the UK will be approximately £200000 to
cover the expenses in the first 6 months. The breakdown of the start-up costs: rent £24000, advertising
£50000, electricity £30000, internet £10000, telephone service £5000, delivery cost £15000, gap skills
training £10000, maintenance £20000, Other expenses £30000, travel expense £6000, office supplies and
machinery £20000.

Management information system for the business

The founding members of the business are me and my other two friends. We will be playing the
leadership roles of the business and will take all the necessary decisions. We will hire some employees to
successfully operate the business. The employees will be held responsible for daily operations. And the
owners will be held responsible for marketing, purchasing inventory items and maintaining inventories.
To keep the proper accounts, we will use software like QuickBooks. We will follow the bottom-up
approach of management where the employees will notify the upper management with the necessary

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information and the upper management will take necessary decisions based on the information and will
notify the employees through the top-down approach.

Vision for the business

Our vision is to become a leading grocery store chain in the UK, offering our customers a diverse range
of products, exceptional service, and a shopping experience that exceeds their expectations. We hope that
within a few years of operation, our business will grow and will be able to provide customers with quality
products at a reasonable price. We also hope to hold a major market share in the grocery sector.

Conclusion
It’s a big opportunity for potential entrepreneurs to open a grocery store across the UK. The grocery store
chain is a very potential sector to grow shortly (Rodríguez García et al.,2022). There are many investors
who are willing to invest in the grocery sector and it can be a great earning source for them (Urquhart et
al.,2022). The proposed grocery store chain is well organized and is ready to make a profit in the most
relevant way. We made all the necessary planning to survive the competition. With a strong management
team, a solid financial plan and a clear goal, the store is ready to be the UK’s most dominant grocery
store.

References
Beckers, J., Birkin, M., Clarke, G., Hood, N., Newing, A. and Urquhart, R., 2022. Incorporating E‐
commerce into Retail Location Models. Geographical Analysis, 54(2), pp.274-293.

Beckers, J., Birkin, M., Clarke, G., Hood, N., Newing, A. and Urquhart, R., 2022. Incorporating E‐
commerce into Retail Location Models. Geographical Analysis, 54(2), pp.274-293.

Candio, P. and Frew, E., 2023. How much behaviour change is required for the investment in cycling
infrastructure to be sustainable? A break-even analysis. Plos one, 18(4), p.e0284634.

Discount supermarkets sell record share of UK's groceries | Daily Mail Online

Hartmann-Boyce, J., Bianchi, F., Piernas, C., Riches, S.P., Frie, K., Nourse, R. and Jebb, S.A., 2018.
Grocery store interventions to change food purchasing behaviors: a systematic review of randomized
controlled trials. The American journal of clinical nutrition, 107(6), pp.1004-1016.

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Kabadurmus, O., Kayikci, Y., Demir, S. and Koc, B., 2023. A data-driven decision support system with
smart packaging in grocery store supply chains during outbreaks. Socio-Economic Planning Sciences, 85,
p.101417.

Rodríguez García, M., González Romero, I., Bas, Á.O. and Prado-Prado, J.C., 2022. E-grocery retailing:
from value proposition to logistics strategy. International Journal of Logistics Research and
Applications, 25(10), pp.1381-1400.

Urquhart, R., Newing, A., Hood, N. and Heppenstall, A., 2022. Last-Mile Capacity Constraints in Online
Grocery Fulfilment in Great Britain. Journal of Theoretical and Applied Electronic Commerce
Research, 17(2), pp.636-651.

Waddington, T.B., Clarke, G.P., Clarke, M. and Newing, A., 2018. Open all hours: Spatiotemporal
fluctuations in UK grocery store sales and catchment area demand. The International Review of Retail,
Distribution and Consumer Research, 28(1), pp.1-26.

Wang, K., Gao, Y., Liu, Y. and Habib, K.N., 2023. Exploring the choice between in-store versus online
grocery shopping through an application of Semi-Compensatory Independent Availability Logit (SCIAL)
model with latent variables. Journal of Retailing and Consumer Services, 71, p.103191.

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