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    Management

    Business Organisation and Finance Structures

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    Business Organisation and Finance Structures


    STRATEGIC MANAGEMENT


    Executive Summary
    This assignment has mainly focused on the Strategic Management Policies for start-up business. This assignment has shed lights on the different strategic method required by the start-up companies to enhance their performances. The business environment and the vision, services, finance structure, strengths, weaknesses, opportunities, and threats have been observed through this assignment. This assignment has also discussed the goal, milestone and strategies of the start-up company. Different marketing and suitable business strategies have been determined through this assignment. This assignment has also identified the competitors of the start-up business companies and has determined the financial structure and forecasts of the start-up company
    Introduction
    In the current world of competition adoption of perfect strategies is an essential part of the development and improvement of an organisation. The adoption of the perfect strategy includes the evaluation of factors like the environment of the company, milestone and goals as well as the competitors and financial forecasts. This assignment will focus on the study of the strategies required to initiate a start-up business. It will determine the environment required for the business and its goal and milestone. The assignment will identify the competitors and evaluate strategy in order to tackle them. Lastly, the assignment will provide financial forecast required by all start-up business.
     
    Business Environment
    Vision, Mission, and Goals
    The main vision of Angel Walk Restaurant is to gain trust from the customers.
    Their goal includes ensuring the best quality food to them and maintains a warm relationship and good communication with its communities and staffs. According to Klettner, Clarke & Boersma (2014), at the end of the first year, the start-up organisations need to focus their cash flow and self-sufficiency to determine their success and development. 
    The mission of Angel Walk Restaurant is to make a sale around AUD $800K in the first year and by the end of the five year, they aim to increase the sale to AUD $900K.
     
    Products and Services
    The Angel Walk Restaurant provides breakfast and lunch menu, cold as well as hot drinks. The Breakfast includes omelettes, eggs, toast, coffee, and tea. The Lunch dishes include various sandwiches made of turkey, ham, roast, beef, etc. They also provide several dishes of salads like Caesar Salad, Greek Salad, Potato Salad, Italian Eggplant Salad etc.
     
    Business, Organisation and Finance Structures
    The Angel Walk Restaurant provides high-quality service to its customers and maintains a good communication with its service users and staffs. The financial structure is set up by the founder with an investment of AUD $50,000 and an additional five-year loan of AUD $80,000. The finance structure of Angel Walk Restaurant is conservative. As per Pisano (2015), in every start-up business, there has some money at risk.
     
    Strength, Weaknesses, Opportunities and Threats analysis
    The strengths of the Angel Walk Restaurant are determined by their performance, quality, and quantity. As per Lee (2016), the strength of a restaurant lies in the pricing structure like providing a lower priced menu in comparison to other restaurants. The Angel Walk Restaurant is new in to the business hence they do not possess the knowledge required for enhancement of their performance; this might stand as weakness for them. As per Cascio (2018), the start-up business needs to stay focused on opportunities that provide positive vibes and good reputations. Therefore, Angel Walk Restaurant needs to look for the opportunity that will create a positive vibe and good reputation of them among the customers. 

    Premises, plant, and Equipment
    The decoration of a restaurant plays an important role in attracting more customers to it (Andriotis, 2004). The Angel Walk Restaurant, allow their staffs to clean the premises on daily basis and provide good hygienic food to the customers. They also decorate the walls, ceiling, doors, windows, and floor with distinct designs. The restaurant also maintains a proper drainage and ventilation system. The lighting and flowers are fresh and bright. The washing of equipment and utensils are done on daily basis.
     
    Information System and telecommunication
    The Angel Walk Restaurant maintains a good communication with its customers and staffs to know their problems and demands. The restaurant is intending to introduce a customer service in order to stay in touch with its customers, know about customer’s demand and to invite them on each special occasion.
    Intellectual property, licenses, and membership insurance
    The Angel Walk Restaurant has adopted the legal license to provide the best quality and hygienic food to its customers. The adoption of the legal license has also given the customers an assurance of the services provided by them. The restaurant also provides membership insurance and offers to its daily and avid customers.
    Goals, milestones, strategies
    Goals and milestones
    The Angel Walk Restaurant seeks to achieve the self-sufficiency and cash flow at the end of the first year. By the end of the second, they seek to repay the debt and the loans. They also aim to provide income to the founder and owner of the restaurant.
     
    Marketing and Sales
    The Angel Walk Restaurant has mainly three markets. The people that live in the local area will look with quality food with good services for breakfast or lunch. They also provide service for business meeting like phone-in lunch. Some staffs also prefer taking dinner to home at the end of the day. As per Martinez, Devece & Llopis (2015), the customer desire quick and good quality food and a comfortable atmosphere, hence the restaurant needs to meet the customer demand. In order to enhance their marketing strategy, the Angel Walk Restaurant provides relaxation to their customers and maintains a proper advertisement.
     
    Customer Management and retention
    The Angel Walk Restaurant manages their customers with care and tender. They listen to the problems and queries of the customers and try to manage them in order to enhance their customer service. They provide the best quality food at a lower price to retain their old customers. As per Fleisher & Bensoussan (2015), the good communication of the restaurant staffs plays a significant role in retention and management of the customers.
    Pricing
    The Angel Walk Restaurant maintains a lower price for the similar food of similar quality provided by another restaurant. As per Dulčić, Gnjidić & Alfirević (2012), for the new start-up business, it is important to maintain a low price for its product in order to attract more customers to it. The price management plays an important role in the promotion and the marketing of the Angel Walk
     
    Restaurant.
    Suitable Business Strategy
    The Angel Walk Restaurant has adopted a suitable strategy as a part of its development process. The restaurant has chosen a proper location in Australia to attract a lot of customers from the downtown and provide them with fast and quality service. As per Leiper, Lamont & Hing (2011), a suitable business strategy allows the company to gain an early profit and customer's trust. The restaurant has the plan to use the local radio as part of its promotion strategy. During the peak time, the Angel Walk Restaurant has been able to manage the crowd properly by providing fast service so that they never look empty. The restaurant has also chosen the social media as part of its marketing and promotion strategy.
     
    Business Competition
    The Industry
    The restaurant business in Australia has developed a lot in recent years. Population, in general, owing to busy lifestyle and getting less time for leisure and relaxation are turning to the restaurants for meals. The restaurant business has developed from providing dining options. The demand for quality food along with relaxing ambiance has helped to develop the restaurant industry and they expected to experience more increase in earning revenue in coming years (Craft, & Hassan, 2015). There are various factors that helped restaurant industry in earning more revenue like continuous consumer demand for good quality of food.The change in consumer behavior and preferences made many restaurant owners to restructure their restaurants to offer them some unique dining option.
     
    Target Market
    Angel Walk Restaurant is targetting 3 market segments as their consumer. They are people working in the downtown area whom Angel can offer an option of providing good quality food for late breakfast or lunch. Secondly, they would be targeting the business organisation in nearby areas and provide them an option of arranging meals during business meetings (Cross, Belich, & Rudelius ,2015). Thirdly, they aim to target the employers with families and provide them with a takeout option, so that they can they can carry food for family dinner at the end of a tiring working day.
     
    Market Competition
    Based on the target market, Angel walk Restaurant have competitors in the form of fast food and takeaway food services like McDonald’s, KFC, Hungry Jack’s, Domino’s Pizza, Red Rooster, Nando’s in addition to the restaurants located in the vicinity.
     
    Influence of five forces
    Porter’s Five Forces Analysis is an important tool in understanding the factors that influence competition in an industry. According to E. Dobbs, (2014), the five forces are - Competitive Rivalry, supplier power, buyer power, the threat of new entry and threat of substitution. Angel Walk Restaurant's main competitors are the popular fast food chains who are already extremely popular and are successfully running their businesses.Another positive force for organisation is supplier power. In the event of availability of more supplier, the availability of resources is in abundance. On the other hand, a negative force for organisation would be buyer's power. If consumers are left with plenty option it works against the organisation. A new business organisation's entry in the market can always act as a threat to the existing company (Mathooko & Ogutu, 2015).With popular restaurants in the market, there will always be a threat of substitution.
     
    Financial Forecasts
    In setting up a restaurant business various cost factors are needed to be taken into consideration. The primary cost factors are registration and set-up cost. In addition to it, the other cost factors are infrastructure cost, payroll and HR expenses, and venue cost and location identification. Other expenses include advertising and marketing costs. An estimated profit could be forecasted based on deducting the purchase of raw material from the estimated sales
    Profit and loss forecast
    In starting up a restaurant business, we assume to achieve estimated sales of about AUD 800000 in the first year and aimed to increase this amount to AUD 1600000, in five years. While setting up a business, the first year experiences different expenses factor, as a result, we aim to achieve a net income of AUD 27000 in the first year. However, the following years will not experience the same expenses as the first year and as a result, we aim to achieve a net income of about AUD 587000 in the fifth year. This trend when achieved will be an evidence of a profitable trend of Angel Walk restaurant.
     
    Cash Flow Forecast
    The cash flow forecast further depicts the cash position of the business. The number of operating activities will increase from AUD 17000 in the first year to AUD 552000 in the fifth year. Investing activities is estimated to increase from AUD (-) 1500000 to AUD (-) 22500000. Ending cash and cash equivalents are estimated to increase from AUD 783000 to AUD 702000
     
    Balance Sheet forecast
    The estimated current asset worth is AUD 600000 and fixed asset worth is AUD 1700000. The current liability is estimated to be AUD 600000 and the equity is AUD 1700000. Apart from these, additional funding can be obtained by owner's investment, loan, and selling of share.
    Break-even Analysis
    An estimated sale of AUD 800000 is assumed. After deducting the variable cost, the contribution is obtained. In the first year, it is assumed that 100000 units are sold. As a result, contribution per unit could be obtained by dividing the total contribution by the total number of units. Fixed cost is assumed to be AUD 200000. Break-even point is assumed to be achieved by dividing the fixed cost by contribution per unit.
     
    Conclusion
    In order to initiate a start-up business it is most essential to apply a proper strategy and management system for its development. The strategy involves the evaluation of different environmental factors, goals and visions, strengths, weaknesses, opportunities, threats, products, services, marketing, suitable strategies, competitors and balance sheet forecast of the business. This assignment closely determines the policies and the strategies required to enhance a start-up business. This assignment has concluded the environmental factors required to establish a business. Through this assignment the goals, milestone and strategies are also being determined and it has also identified the competitors of the business involved. Lastly the assignment has shed light on the financial forecast of the start-up business.