To Build or Buy

To Build or Buy

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To Build or Buy

 A small business like a cafeteria is the most suitable option one can engage on because no matter how human beings get satisfied with other basic necessities, food remains to be the major requirement one cannot do without. For this reason, this business will attract more customers and eventually it will result in more returns on sales. A cafeteria needs a little amount of capital and it is easy to set it up and operate.

Strategy for a Business Concept

The best business concept strategy that will enable a cafeteria to compete directly in the market is a business plan which will confirm if the business idea is feasible or not. Therefore, a cafeteria business may consider the following business plan as a strategy after research and development before predicting the long-lasting outcomes.

Defining the business and vision. To start up a cafeteria, the first step is to define the business and its vision for the sake of making a driving force of the business and clarify the aim. In order to clarify the vision, the business owner should be aware of the customer, the kind of business he or she is in, products and services to provide to customers, plans that are in place for the purpose of growth and he or she should consider the primary advantage in the existing market.

Goal setting. To set up a cafeteria, one should list down goals while providing a brief description of their actions. In this step, the business should undergo a period of research and development before predicting long-lasting outcomes. The owner should specifically explain the possible achievements of the business by starting with personal goals then business goals. For instance, what does he or she want to achieve as a person, the size of the business he or she would wish the business to be, whether there is a need to include the family in the business, if he or she desires to recruit a staff to run the business and describe the quality of goods and services to provide to customers for the sake of satisfaction. Further, the goal of the business should admire types of foods and drinks to provide to customers while considering customers’ needs and preferences of foods to provide so that customers’ needs are met (Kumar and Reinartz, 2012).

Understanding the customer. The cafeteria should consider meeting customers’ needs while having in mind that it cannot afford meeting the needs of everyone. First, it should start by identifying the unmet needs that customers have or what is not currently offered. For instance, the foods and drinks that are essential to customers but they are not met available to them. Secondly, the business should predict the foods and drinks that customers desire to have. Thirdly, the business should have in mind how customers perceive some foods and drinks.

Learning from competitors. This strategy enables the business owner to know how other competing cafeterias do business with their customers. This strategy may help the business to reduce the presence of competitors in the market. Therefore, the cafeteria should learn from the competitors by knowing about the target market, type of existing competitors, how they approach the market, identify their weaknesses and strengths, how to make improvements and overdo the competitors and know the lifestyles of the ideal customer.

Considering the resources available. Resources like funds should be the main consideration of a cafeteria business concept because without financial viability it is quite impossible to set up the business. Therefore, there should be a preparation financial projection and how the business will be generating funds. The projections should take into account the period of collection and payment terms for the suppliers. Further, the projections will assist the business owner to know how much capital he or she will need to invest.

Identifying market strategy. This business concept strategy is important because it increases the business’s efficiency and its presence in the market. It is assumed that without implementing the marketing strategy business promotion, product and service delivery will be difficult. The following are the steps of identifying a marketing strategy for a cafeteria business and they include identification of the target market to start the business, selection of the best qualified market to meet the business goals, identification of marketing tools, strategies as well as methods and finally testing the marketing trategy (Kumar and Reinartz, 2012).

Opening the New Business or Purchasing the Existing Business

In consideration of a cafeteria, starting up a new business is more sensible than purchasing the one that exists in the market. This is because starting new business results to new great opportunities and in terms of capital investment is a little bit fair than purchasing an existing business. The new cafeteria business may prove an opportunity to identify the existing trends in the market and have more knowledge on the market. Further, it is far much better to start a new business than purchasing an existing because one would wish to choose a strategic location for the sake of accessing more customers.

Starting a new cafeteria is more sensible than purchasing an existing as it caters for the taste and preferences of customers as well as their changing needs. Since customers may need something that is strategically located and convenient to them, starting up a new cafeteria is the better option. In case the owner may desire to provide foods and drinks that are of high quality to the customers, opening a new business looks more sensible. Further, starting a new cafeteria may make one develop new business ideas like how he or she can coordinate with the existing market.

Choosing to open a new cafeteria is the better option because the owner can easily predict its success and expanding it would be effective. But with an existing business it is difficult to predict its success because an individual may not be to understand the previous management structure, he or she may not know how the business was being operated and he or she may not be aware of the weaknesses that exist in order to craft an appropriate growth strategy in the market.

Starting a new cafeteria is sensible because lower costs are incurred as the starting capital. For instance, the owner may choose to start a small-scale business that is less costly and may prefer to keep the operating expenses to a minimum. But when buying an existing business an individual may spend more money to acquire the business. For instance, one may be needed to pay a transfer fee as a legal requirement and in case it is a large scale, the individual is forced to pay all the necessary costs. Further, buying a business might be more disadvantageous because extra costs are incurred. For instances, incurring extra costs for structure renovation.

Opting to start a new cafeteria is sensible because the owner has the total operational freedom that is important in generating new ideas. But buying an existing business may have some models that the individual may not understand how to run them. Therefore, when buying an existing business, an individual is required to adhere to some rigid business traditions that may not provide room for new methods. A new business seems to be far much better because its operations are easy since the owner understands the dynamics and can easily attract more customers through marketing tools, policies, and techniques.

Most Appropriate Form of Ownership

The new cafeteria is a partnership ownership. A partnership is a business formed when more than one individual who wish to come together to pool resources like finances, labor skills and eventually share profits and loss as agreed by the partnership terms (Sherman, 2012). A partnership as a form of business ownership has the following advantages:

More money is raised because of the nature of the business, the members are likely to raise more money that is meant to start up the business. This implies that the more the individuals, the more money is pooled into the business that will enable it to grow and advance at a high rate (Sherman, 2012). Moreover, it implies that there will more profit that will be shared in case the business is terminated.

It is easy to run since much of the responsibilities are equally among the partners. This will help the partners deliver to the best of their levels by sharing tasks according to their skills. For example, if a partner is good in mathematics he or she can be responsible for record keeping and accounts, while the other individual who is good in communication he or she can be in charge of marketing.

Though a partnership has advantages, it has its shortcomings: first, the business is subjected to unlimited liability. This means that each member may share all that business liabilities as a result of the risks that may face the business (Sherman, 2012). Secondly, the process of decision making is slow. This is because a partnership is jointly managed and it important for all individual to agree on what should be done. This means that individuals have minimal freedom with regards to the management of the business. Therefore, it can take time for all members to agree and make a common decision.

Business Plan for the Cafeteria

The business plan for the cafeteria is essential for the sake of enhancing growth and accumulation of more profits. Therefore, the business plan includes: business summary; the cafeteria basically sells fast foods, beverages, and hot drinks. The cafeteria will cover an area of approximately 3,100 square feet located near Yale University. The startup capital of the cafeteria will be $400,200. This startup capital, $167,000 will be an equal individual contribution and the remaining $233,200 will be obtained through a bank loan. The business will be operating at reasonable expenses in order to accumulate its gross profits.

Business objectives. The objective of the cafeteria is to take a lead in the existing competitive market in the area and ensure that it becomes selected as the best new cafeteria. Secondly, to accumulate reasonable profits in the first month of operation and maintain a gross profit margin annually. Thirdly, to accumulate more profits than the existing competitors. Fourth, to make sure that the foods and drinks provided to customers are of high quality to meet customer satisfaction.

Key to success. In this, the structural design will be attractive to the clients. The cafeteria room would be equally descent for fast and efficient operations. The cafeteria workers would be trained for the sake of best preparation of foods and drinks that will favorably compete in the market (SBA, 2014). The marketing strategies would establish a strong base of loyal clients and assist in utilizing the sales of high margin products.

Business mission. The cafeteria will try its level best to make a unique environment for customers where they can have fun while enjoying their foods. It will be situated in a convenient location for the customers. The cafeteria will make foods and drinks available for students at relatively low prices and the general public who may not afford in other restaurants that sell their foods at high prices. The customers will be handled in a friendly manner and offer them with consistent quality foods and drinks. The cafeteria will invest its profits to facilitate employees’ satisfaction.

                    

References

Kumar, V., & Reinartz, W. (2012). Customer relationship management: Concept, strategy, and tools. Springer Science & Business Media.

SBA (2014). Plan your business. Retrieved from: http://www.sba.gov

Sherman, A. J. (2012). Raising capital: Get the money you need to grow your business. New York: American Management Association.