Introduction To Business Skills
According to the Companies Act 2006 of United Kingdom, a small company or a business is one that is not having a turnover of more than £6.5million and a balance sheet having a total of more than £3.26 million as well as not having more than 50 employees. However, this definition is not binding and it is possible that many organizations in U.K. do not follow this and make their own ones. For example, according to British Bankers Association small businesses are defined as sole traders, limited companies as well as partnerships having an annual turnover of less than £1 million. Therefore, in general, a small business is one that 10-50 employees and a turnover of less than 10 million (Finding a standard definition for Small Businesses, 2014). The role of small business is quite significant in the economy of U.K. According to the data given by Office for National Statistics, there are approximately 99.5% of enterprises in U.K. that are SMEs and thus are a critical part of the U.K. economy. These are the key sources that are contributing to the economic growth of U.K. SMEs not only meet the needs and wants of the people but also create a lot of employment opportunities for the public (Business population estimates 2013, 2014). In addition to this, they also work to fulfil wants of large sized organizations like entertainment, retail, financial services, retailing as well as travelling and also tourism.
In the financial year of 2011/12, there were 55,000 new companies that were found to be registered in the Company House while earlier this figure was 400000 thus making the total to 455000. The data also shows that two thirds of the SMEs belong to the category of sole traders. In 2011, this group generated 49% of the total business turnover and also accounting for 59% of total employment in the private sector thus depicting their rate and success and role in the economy (Business population estimates 2013, 2014).
In 2011, the new business start up accounted for 12% of total business base on an average in cities of U.K. the city of London has the highest rate of start of new business with 1.7 times the national average. However, the small business start ups was hit by the recession also as there was found to be an increase in self employment between 2005-2012 but there was reduction in new small business start ups during this time period. Between 2005 and 2012, the number of small and medium enterprises (SMEs) increased with a rate of 37 % which is higher in comparison to rise in number of large firms which was 14%.
According to the small business survey 2012 as conducted by Department for Business Innovation & Skills, 29% of the SME employers in 2012 had experienced a high sales turnover in comparison to the previous year. Among these, 27% of them had almost the same turnover as in the previous one while 31% of them had a lower rate. In addition to this, 68% of the SME employers intend and plan to expand and grow their business within a time period of next 2 -3 years (SMALL BUSINESS SURVEY 2012: SME EMPLOYERS, 2013).
According to the statistics, there were 4.9 million small and medium enterprises in U.K. which was about 99% of the overall business. Regarding the success rate of small business in U.K. it can be depicted from the fact that in 2012 there were 178 small enterprises while the figure changed to 186 in 2013 causing a 4.5% change. In addition to this, the number of employees in this business has also shown an increase of 3.8%. Also, the turnover for small business came out to be £490 billion in 2013 which makes approximately 35% of revenue that is generated by medium and large scale businesses. In addition to this, small businesses are also engaged in international trade with 12% of firms in exports and 11% of them in imports (Small businesses and the UK economy, 2014).
By analysing the above scenario, it can be evaluated that rate of working and success of small businesses is quite high and Mr Arthur can go in for the small business of opening a pub. Regarding the small or micro pubs in U.K. owing to the changes in licensing laws of U.K. there has been now a creation of small size pubs in the country. The running costs of are also low so now small size pubs are opening at a large number in the region. According to the recent change in taxation laws for local shops and pubs, it was found that many of the businesses in U.K. already get a 100% discount because of the policies of the government (Micropubs: Small is beautiful for UK boozers, 2013). Also, the changes in tax that has occurred at the start of 2014 suggest that 300,000 eligible small shops in England will also be able to get benefit from this. In some of the cases, the benefit would typically go to small shops, restaurants and pubs. They will also be able to get a rateable value so that they can get £10,000 savings of the amount that is equal to 30% extra or more when this is compared to business rate bill of the last year. In addition to this, small businesses will also have a benefit of spreading their bill payments over the time period of 12 month instalments instead of 10 months when rules were changed. Also, more of flexibility is now provided for the small businesses by bringing positive changes in the rules so that they are able to have more control on their flows in cash and thus contribute to economy with greater efficiency (Local shops and pubs could get a third extra off tax bill, 2014).
From the research, it can be said that there is high rate of success for small businesses in U.K. and also a number of opportunities for pubs also so starting a small pub by Mr Arthur is a good idea.
The city of Wales has a number of large bars and pubs situated at various places. These are located at sea side, coastal areas as well as busy centres of the city. It is one of the famous places for business as well as also a tourist attraction. Opening a new pub in the city is a good thought as the place has already a number of pubs but people of the city like such places to the fullest. Here, he name given to the pub is Move On Beats Pub.
The main goal of the business is to open a small pub that can offer informal place for people to sit and meet as well as drink and deliver them the best experience.
Description of Product and Service
Move On Beats Pub will serve a range of items to its visitors. First of all, the menu will be available in below mentioned languages –
The menu of the pub will consist of following products –
- Champagne Cocktails
- Classic Cocktails
- Non-Alcoholic Cocktails
- Soft Drinks (Bedford and Morelli, 2006)
- Blended Whiskey
The service that will be delivered at the pub will be exceptional as all employees will be dressed in similar uniform and drinks will be served according to the requirement of customers. The pub will remain open for 6 days a week and will remain closed on Wednesdays.
The main supplier for the pub will be the wholesaler for the raw materials and ingredients that will be required to prepare the drinks. Also, most of the drinks will be prepared by the employees at the pub itself.
Agreements and Ownership Structure
The pub will be registered under British Beer & Pub Association under the name of Move On Beats Pub. The ownership of the firm will be under Mr Arthur as sole trader. Being a sole trader, Mr Arthur will be responsible for all profits as well as liabilities that are occurred out of the business.
Regarding legal aspects, all such considerations will be considered related to registration of the pub as well as licenses and all these will be finalized by the legal authorities responsible for this sector (Pinson, 2008).
Get Help in Any Subject
Our intention is to help numerous students worldwide through effective and accurate work.
Opening of the pub in busiest business centres of Wales will be of great opportunities for Mr Arthur as this will be able to get high revenues for him. The area in which the pub will be situated is the busy centres of the city and so this can attract a number of customers thus raising more and more opportunity for the business.
Move On Beats Pub will be situated in the centre of the city and so main customers for it will be the local people visiting the city. Also, people who would like to spend some quality time with friends and also for business talks will also be the potential customers for the pub.
Area where Move On Beats Pub will be situated in busy centre of city of Wales and the land that Mr Arthur will use for the pub is his own which he had bought at the time when he worked. So, he does not have to take land on rent.
Opening of a pub and that too in busy centres of Wales will not be an easy task as it will have to face tough competition as there are a number of competitors present in the area. In the region of Wales where pub will be situated, there are a number of pubs and restaurant which are also providing good quality of services to the customers. Owing to this, Move On Beats Pub will have to compete with already established pubs at the place. This will be possible only if the pub will provide superior quality of services to the customers visiting to them. Also, drinks offered to the customers should also be of finest taste so that it can compete with its competitors
The new opening of pub as Move On Beats Pub will have the requirement of attracting a large number of customers. This can be done by implementing appropriate strategies for marketing for the pub so that people become aware about it and more and more of them visit the place. Different marketing strategies that will be used by Move On Beats Pub are as follows –
Advertisements will be published in the newspapers regularly so that mass audience can be targeted at. Initially, when the pub will be about to launch at that time advertisements in newspapers daily for 5-6 days. After some time of launch this can be done once in 15 days.
Apart from marketing through newspapers, advertisements can also be published in local magazines monthly so that people so not forget about the pub.
Also, marketing can be done by distributing leaflets along with local newspapers so that customers can be attracted in more effective manner (Pratten, 2006).
Costing and Pricing
Costing and pricing of Move On Beats Pub is determined according to the cost that will amount to preparation of drinks as well as providing of services to the customers. This will also take into account other expenses like salary of the staff, administrate expenses as well as fixed costs also which will be required for running the pub. After determining the cost, pricing will be done at 40% mark up of the cost of the drinks made at the pub. With this, all the related expenses will get covered for Mr Arthur.
At initial stage of new business, it is projected that in first year organization will suffer loss as Move On Beats Pub is at its starting point. Organization has to cover its initial costs and also the customers will not easily ready to buy the products. It is assumed that on an average every day 70 drinks will be selling by Move On Beats Pub. On the basis of this annual sales projection of organization is determined. Prices are determined by comparing the similar businesses of Wales’ city. It is projected that every year there will be growth of 25% of sales in their business.
Yearly Sales Projection=£2 average cost of per drink * 70 number of drinks * 26 Days * 12 Months = £43680
Marketing plan for Move On Beats Pub is planned from the time of its launch as at that time good amount of advertisement for it will be done through print media through newspapers, magazines and leaflets. The main target for it will be attract and thus gain more and more number of customers especially the local people to visit the pub.
Move On Beats Pub will be operated in a customized manner and all efforts will be made so as to provide a fine experience to all the customers by carrying all of the operations in an effective manner.
Operational function of the pub will be managed effectively as this is an important part of the business. The place where all the drinks will be prepared will be operated in proper manner considering all the procedures of safety of the employees as well as customers. Regarding the supply of raw materials it will be ensured that suppliers supply standardized and quality approved products that can be used for preparing drinks and will be safe for the customers. Also, good quality of ambience will be maintained at the pub as some kind of soft music will also be played at the place.
Move On Beats Pub will be offering a wide range of drinks that will include both alcoholic and non alcoholic. The services of the pub will be made available all through the day and midnight and for 6 days a week and will remain close only on Wednesday. The services that will be provided to the customers will be fine as all their needs and requirements will be fulfilled in proper manner. Also, the manner in which all the drinks will be served by the staff will be in presented in an attractive manner with appropriate decoration and presentation that they are eye catchy to the customers (Maréchal, 2012).
HUMAN RESOURCE STRATEGY
Human resources or personnel for Move On Beats Pub will be managed in an appropriate manner so that they have the capability of handling the customers in effective manner. Personnel of Move On Beats Pub will be recruited on basis of their qualification of working at a pub and serving drinks to customers in a well behaved manner. For the pub, three employees will be selected who will be preparing as well as serving the drinks to the customers. in addition to this, the pub will also define all its policies and procedures clearly which will consist of recruitment policies, salaries well as extra beneficial incentives for them so that all the effective staff are retained by the pub. At the time of high inflow of customers especially during holidays, Move On Beats Pub will also hire part time employees so that those visiting at the place can be served in the best possible manner (Banai and Tulimieri, 2013).
Below financial projections for the business of Mr. Arthur has detailed. It includes budgeted cash flow statement and budgeted income statement for the period of three years. These financial projections will assist Arthur to recognize initial investment which for starting a Pub in his city. Further this financial information will also forecast areas of income and expenses which will be incurred to operate business of pub.
- As per the growth of this industry and higher demand in customers in market, it is assumed that every year there will be increase in 25% per annum of sales of pub.
- Yearly sales of business are calculated that on an average 70 drinks will be selling by pub.
- Business will maintain mark up of at least 40% on its pricing.
- Rate of interest on bank loan is assumed at 10% per annum
- On the basis of higher sales projections, it is assumed that other expenses of organization will also increase in future. It is assumed that every year 10% of increase in expenses of organization such as supplies and material, salaries and other miscellaneous expenses.
- Depreciation of fixed assets of business will be calculated on straight line method at 10%.
- Tax rates on profit of business are assumed at 5% on profit of pub
- Business population estimates 2013. 2014. [Online].
- Finding a standard definition for Small Businesses. 2014. [Online]. Available through:
- Local shops and pubs could get a third extra off tax bill. 2014. [Online].
- Micropubs: Small is beautiful for UK boozers. 2013. [Online].
- SMALL BUSINESS SURVEY 2012: SME EMPLOYERS. 2013. [pdf]. Available through:
- Small businesses and the UK economy. 2014. [Online].