The rapidly changing business environments and technology

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In today's world of rapidly changing environment and technology, setting up a new business always requires a number of considerations such as selecting the location or place where one wishes to set up the business firm, the target audience, developing various marketing strategies to attract customers, developing business tactics to retain the customers, etc.

Business Ideas and Goals- Our project is concerned with setting up an internet café at such a location which will be convenient for carrying out our business. The name which we have selected for our café is MATRIX CYBERCAFE. And for starting any business, the primary or the foremost step is to do a market survey. The results which we obtained from our market survey show that Brunswick East, VIC in the city of Melbourne in Australia, is an optimal location for setting up our cyber café. We have selected a commercial space for setting up Matrix Cyber Café at an area of 100 square yards.

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Our objective is to start a café of a medium sized capacity and this place is best suited for our business activity. This can be based upon the survey carried out which indicates that this place is a mixture of a residential and a commercial area which is always bustling with people from various work places, in addition to people from every walk of life. Moreover, there are not many competitors who may provide a threat to our business in terms of profit making and brand value. Additionally, this area being a commercial place is easily accessible to various food outlets which can be taken into a contract with our cyber café to provide food and beverages to the customers in our centre through a cafeteria at reasonable prices. Our cyber café will have all the features of a regular internet café along with an addition of some salient features such as video conferencing, cafeteria facility, waiting room facility, very advanced computer systems, etc.

Marketing- Various marketing strategies will be adopted to advertise about the café and to build a brand image in the customers mind, such as advertisements in various newspapers, magazines, websites etc, distribution of pamphlets, through emails etc.

Operations- Apart from the marketing process, various other operations are also important which would be followed in order to ensure that the business setup is a smooth process. This includes, registration of the firm's name with the required authority of the country, obtaining the license to start the business, investing in proper insurance to deal with emergencies, employing skilled and trained personnel (with no criminal record to avoid legal tangles in the future), etc.

Finance- The start-up capital required for this business is $15,000 which will be readily available from the owner's personal saving account. Various expected incomes and expenditures incurred by the business in the first year of its operations are expected to generate a profit of $11,470.

Section 2: BACKGROUND:

In today's competitive era, technology plays a very crucial role in human development. Technology is something which can never get stagnant and it keeps on growing regularly and rapidly, and in order to keep himself well posted and updated with the day-to-day happenings around the world, man has to be in touch with various forms of technology of which, the Internet is the most vital. The Internet is a medium which is accessible anywhere and anytime across the globe. Hence, the main aim of the project is to set up a medium sized business that has great demand and also has immense opportunity for growth.

2.1: Mission statement - The main aim of the company is to establish one of the best places of the web world which would not only provide access to the internet but also provides other additional requirements such as printing and faxing facilities, voice chat etc. The main objective of our project is to set up an internet café which would provide the users with various additional state-of-the-art facilities apart from internet, printing and faxing.

2.2: Company History - This is a completely new business venture which is going to be started by an individual person and which does not develop from any existing business firms.

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2.3: Business Goals - The short term goal of our firm is to earn a profit of $10,000 in the first year of the setup of the café. Whereas, the long term goal include providing one of the best centers of web world with state-of-the-art facilities to the customers. The long term goals also include purchasing our own permanent commercial place for our business in the next 3-4 years by utilizing the profit generated from our business.

Section 3: MARKETING: Various marketing strategies are essential to make the public aware of a new product or a service which is to be entered into the market. Since the service which is being provided by Matrix Cyber Café involves a larger target audience, it is essential that proper marketing skills should be employed to achieve the desired effect when the business actually enters the market and starts its operations. Keeping this in mind, following marketing tools were adopted to make a platform for the launch of Matrix Cyber Café.

3.1: Market Research -Before planning any business, a market research is the primary step to be taken to understand the market and the existing competitors. It is considered as the most important aspect for any business to make its existence and its presence felt in the market and also to remain competitive. For the actual setup of our business, a market research was conducted to check the compatibility and scopes of the business. The research was conducted with the help of country bureau of statistics; most of the statistical data was collected from this bureau. A short survey was also conducted in several small scale enterprises that exist in the country.

3.2: Marketing analysis - After conducting the complete survey, few things came up, which were very much important and unavoidable, such as, with the changes in technology and trends everyone is willing to move ahead with latest technologies. Keeping themselves updated with the latest news, advancements in technology, coming up of various technological gadgets in the market is a phenomenon not only concerned with the youth but also with people of higher age groups.

3.3: Marketing Plan - We have planned our café to be equipped with all the latest technologies like upgraded systems with high speed internet connection with much more comfortable cabins and centralized air conditioning. The cabins will be fully furnished with comfortable chairs, computer tables and an additional side chair for the person accompanying the customer. By investigating the complete area Brunswick East, VIC, Melbourne, we have realized that most of the people frequently visit other places for printing, scanning and photocopying. So our plan will be to facilitate the customers with printing machines, scanning machines and photocopying machines at our cyber café at cheaper rates. As our cyber café will be located at a commercial place we have decided to keep even fax machines for the convenience of our customers.

3.3.1: Target Market - The target customers for our company will be mostly teenagers and professionals, as it has been found that most of the internet users belong to this age group. In this era of advancement, it can be observed that even the people from the higher age group are accepting the new technologies and moving on with the latest trends. For such persons, the Matrix Cyber cafe intends to have a well furnished sitting area with much comfortable sofa sets and magazines for their leisure. The target audience will also include students, locals as well as students coming from different countries for studying purposes. With the help of personal interviews we have concluded that most of the teenagers as well as professionals spend most of the time on the internet by surfing different websites relating to work or leisure, or by connecting with their friends and relatives throughout the world.

3.3.2: Promotions and advertisements: Few advertisement strategies are carried out for promoting and advertising about the company. 2 weeks before starting the operations, an advertisement will be published in various newspapers and on known web sites. Personal emails will be sent, and the pamphlets will be distributed in the nearby colleges, offices and to the people visiting the commercial complex where our café is to be set up.

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3.3.3: Pricing- The pricing was done by surveying the different cyber cafés in the country, we have done our pricing in that way which will convenient and affordable, which will be cost effective when compared to other cyber cafés.

3.4: Evaluation of Marketing- All the above steps taken to promote the business will help in building a brand image for the business. For starting any business, promotions and advertisements are the main pillars for the business identity as well as for the growth of the business. With the help of promotions and advertisements a company can create their image in the customers mind. It is very much important for any business to create a place in the customers mind and build a brand image. Once they are successful in this, then it will be easy for the company to give a competition to the competitors in the market.

Section 4: OPERATIONS:

4.1: Legal and licensing requirements-

Business name- It is the first and the foremost and the most important task for any business as it gives an identity to the business. The name which we have selected for our café is MATRIX CYBERCAFE. The name of the business firm (the cafe in this case) has been registered with the concerned authority so as to avoid any legal tangles regarding the name or the identity with a similar business entity carrying out similar kind of business

Legal structure of the business- There are various legal processes that should be taken care of, while starting the business operations such as the registration of the business name, number of directors who form an important part of the business and whose opinions should be considered while taking any business decisions, the chairman or head who will be in charge of the entire business, various number of people who will be employed as per the legal rules of the country, proper signing of contracts with other alliances to prevent any legal obligations etc. Since Matrix Cyber cafe is a medium sized business entity, it will have 1 head (who will act as the chairman), 2 members (similar to board of directors in any firm), 8 people employed on a salary basis (similar to employees working in any organization) and 3 workers (similar to the maintenance staff of the organization) also employed on salary basis. Apart from this, we wish to establish Matrix cybercafé as a completely ethical business entity which would not indulge in any conflictions with the cyber laws and which would take up various steps to protect the privacy of its customers.

Operating license- An operating license is required from the government of the country to set up an internet café. This has already has been obtained for Matrix Cyber cafe.

4.2: Organizational structure and Staffing- this includes the details of the various staff employed in the café, their duties and salaries i.e. from the chairman or head of the café to the workers employed to carry out the petty activities of the café. The organizational structure for Matrix Cyber Café will be as follows- the head or the owner of the café will have the supreme most responsibility of managing the functions of the café, i.e. he would be completely involved with the everyday functioning of the café and would see to it that the various activities are performed properly and accurately. The other members of the café will also contribute effectively and will ensure that the various demands of the customers are properly taken care of. The workers employed in the café will be given the responsibility of keeping the place neat and clean every time thereby providing a very hygienic atmosphere to the customers.

4.3: Professional Advisers -The members in charge of the café along with the head of the firm (excluding the employees and workers) will hold regular meetings or discussions to discuss the various steps or measures to be taken to enhance the business and to increase the profit in addition to providing increasing levels of customer satisfaction. Out of the 2 members (whose position is similar to the board of directors) one would be appointed as the manager of the café while the other will have all the financial responsibilities of the café, an accountant i.e. he would be responsible for all the monetary transactions happening at the café and would also be responsible for keeping the required accounts. The head of the café will keep regular checks upon the manager and the accountant to ensure that there is no lapse in any of the functions.

4.4: Insurance- The café will have property insurance to deal with any cases of emergency such as fire due to short circuits, or any unforeseen accidents. Additionally, the café management will provide medical insurance to its manager and the accountant for any unforeseen accident at the café.

4.5: Business Premises- The café will be set up at the commercial complex in Brunswick east, VIC, Melbourne, at an area of 100 square yards. A separate section will be allotted to the cabins which will provide the internet access to the customers. The café will have an individual cabin for the owner of the café, the manager and the accountant. Apart from this, a cafeteria with a well seating arrangement will be headed in a corner and would provide various food and beverages to the customers by maintaining a very clean environment and which would not interfere with the other activities going on at the cafe. The café will also have a well furnished waiting section with 2 sofa sets and 2 centre-tables where customers would be allowed to wait in case of over-populated café during some peak times.

4.6: Equipment required- Our internet café being a medium sized one will consist of approximately:

30 systems

35 webcams

35 headphones

4 printer /scanners

4 Photocopying machines

35 chairs

35 side tables

2 sofa sets

2 centre tables

8 people employed on salary basis

3 workers employed on salary basis

Centralized air-conditioning system

Well lit room with sufficient lighting.

4.7: Service Operations- Various operations carried out by the internet café would include- providing internet access to the customers, printing and faxing facilities, photocopying facilities, a cafeteria which would provide the customers with various refreshments while utilizing the café facilities.

Section 5: FINANCIAL PROJECTIONS:

5.1: Basic Assumptions and Information- Complete financial projections are done based on the assumptions and on the information which we have collected from the market through research process. Mostly the projections are done on the assumptions of the owners own knowledge about the costs. We have assumed that all the revenues generated from the accounts will be paid on the monthly basis either at the end of the month or at the starting of the next month. It is assured that there won't be any delayed payment of salaries.

5.2: Analysis of Financial forecast- We have not concentrated much on the effect of inflations on the market or any changes in the costs as these won't have a subdue effect on the functioning of our café. Depreciations on the equipments are done on the straight line method at 10 per cent per annum of the total initial outlay. All projections forecast only one year sales and incomes as it is not possible to show longer time period projections as inflations or change in costs can happen any time.

The business will be completely financed by the owners from his savings account. The initial investment to the business done by the owner is $15,000. Sales income shown from the month of January 2010 is completely based on the assumptions and the information gathered from different surveys. This helps the business in avoiding the debt financing and providing the business with initial cash flows. The complete financing strategies are carried out by keeping in mind that the complete expenditure is carried out from the cash outflows or from the owners account; this is done to avoid the business from getting into loans.

Profit in the year 1 is expected to be 11,470 Australian dollars. The total expenses carried out throughout the year are assumed to be $111,750, and the total sales revenues generated in the year 2010 are estimated to be $134,020.

As this is a single owner company the complete profit will be enjoyed by the its owner but according to the rules of the company one quarter of the net profit should be kept as the retained earnings, which can be utilized later for reinvestment in the business., the retained earnings are mostly used for upgrading the technologies as well as services and developing new applications according to the customer requirements. We are assuming the business to be highly profitable, if it is so then the retained earnings of 3 to 4 years will be utilized in purchasing the permanent commercial place for our business.

Section 6: IMPLEMENTATION PLANS:

In order to implement all the plans regarding the setting up of the cyber café, certain steps are required to be taken in procession and in a certain sequence. The first step will be, to take the selected place for lease within 10 days by completing all the legal formalities. The next step will be regarding the purchase of furniture, i.e. sofa sets, tables, chairs, etc. which will take 2-3 days. This will be followed by the purchase of the systems along with its various accessories such as headphones, webcams, printers, Xerox machines etc which will take 2-3 days. In addition to this, the making of various cabins, whitewashing, centralized air conditioning etc will be completed in 10 days. Finally the set up of the furniture, systems along with the cafeteria will take 4-5 days. Thus, the complete cyber café will be ready for use in a month.

Section 7: Appendices

MATRIX CYBER CAFÉ

SALES FORECAST

for the period jan 2010 to dec 2010

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

1: internet

no. of hours

3200

2900

3000

3500

3600

2500

2800

2900

3200

3500

3600

3650

price per hour

2

2

2

2

2

2

2

2

2

2

2

2

total income

$6,400

$5,800

$6,000

$7,000

$7,200

$5,000

$5,600

$5,800

$6,400

$7,000

$7,200

$7,300

cost of good sold per unit

0

0

0

0

0

0

0

0

0

0

0

0

total cost of good sold

0

0

0

0

0

0

0

0

0

0

0

0

2: printng, scanning

no. of prints

1000

1500

1200

1800

1800

1000

920

880

1200

1400

1500

2500

price per print

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

total income

$500

$750

$600

$900

$900

$500

$460

$440

$600

$700

$750

$1,250

cost of good sold per unit

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

total cost of good sold

50

75

60

90

90

50

46

44

60

70

75

125

3: xerox

no. sold

2500

2000

3000

4000

3500

2000

2500

2000

3000

1400

1000

4000

print per unit

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

total income

$625

$500

$750

$1,000

$875

$500

$625

$500

$750

$560

$250

$1,000

cost of good sold per unit

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

total cost of good sold

125

100

150

200

175

100

125

100

150

70

50

200

4. fax

no. sold

215

190

320

180

195

180

85

110

150

150

250

180

print per unit

1

1

1

1

1

1

1

1

1

1

1

1

total income

$215

$190

$320

$180

$195

$180

$85

$110

$150

$150

$250

$180

cost of goods sold per unit

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

total cost of goods sold

107

95

160

90

97

90

43

55

75

75

125

90

5. cafeteria

no. sold

200

275

550

600

960

840

780

900

900

760

1500

1340

price per unit

4

4

4

4

4

4

4

4

4

4

4

4

total income

$800

$1,500

$2,200

$2,400

$3,860

$3,360

$3,120

$3,600

$3,600

$3,040

$6,000

$5,350

cost of good sold per unit

1.1

1.2

0.6

0.45

0.4

0.72

0.8

0.78

0.95

0.85

0.65

0.84

total cost of goods sold

218

330

330

270

388

610

636

701

865

885

950

1135

total sales revenue

$8,540

$8,740

$9,870

$11,480

$13,030

$9,540

$9,890

$10,450

$11,500

$11,450

$14,450

$15,080

total cost of goods sold

$500

$600

$700

$650

$750

$850

$850

$900

$1,150

$1,100

$1,200

$1,550

MATRIX CYBER CAFÉ

CASH FLOW FORECAST

for the period Jan 2010 to Dec 2010

 

 

 

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

TOTAL

income

 

 

 

 

 

 

 

 

 

total revenues

$8,540

$8,740

$9,870

$11,480

$13,030

$9,540

$9,890

$10,450

$11,500

$11,450

$14,450

$15,080

$134,020

capital

$15,000

 

 

 

 

 

 

 

$15,000

 

 

 

 

 

 

 

 

 

total income

 

$23,540

$8,740

$9,870

$11,480

$13,030

$9,540

$9,890

$10,450

$11,500

$11,450

$14,450

$15,080

$149,020

expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

cost of goods sold

$500

$600

$700

$650

$750

$850

$850

$900

$1,150

$1,100

$1,200

$1,550

$10,800

advertisements

$1,000

75

75

75

75

75

75

75

75

75

100

75

$1,850

purchase of equipments

$16,700

 

 

 

 

 

 

 

$16,700

rent

$10,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$32,000

maintenance

$550

 

 

$550

 

$550

 

$550

 

$2,200

insurance

$2,000

 

 

 

 

 

 

 

$2,000

loans

 

 

 

 

 

 

 

 

0

stationary and postage

$650

 

 

 

 

 

 

 

$650

staff wages

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$48,000

petty cash

$50

$50

$50

$50

$50

$50

$50

$50

$50

$50

$50

$50

$600

telephone charges

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$2,400

legal services

$1,000

 

 

 

 

 

 

 

$1,000

electricity

$200

 

 

 

$200

 

 

$200

 

 

$600

others

 

 

$150

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$1,250

 

 

 

 

 

 

 

 

 

total expenses

 

$37,000

$7,025

$7,125

$7,625

$7,375

$7,275

$7,825

$7,325

$7,775

$8,075

$7,650

$7,975

$120,050

cash surplus/(deficit)

($13,460)

$1,715

$2,745

$3,855

$5,656

$2,265

$2,065

$3,125

$3,725

$3,375

$6,800

$7,105

$28,971

Bank balance

 

0

($13,460)

($11,745)

($9,000)

($5,145)

$511

$2,776

$4,841

$7,966

$11,691

$15,066

$21,866

 

 

 

($13,460)

($11,745)

($9,000)

($5,145)

$511

$2,776

$4,841

$7,966

$11,691

$15,066

$21,866

$28,971

Projected Income Statement for the year 2010 Jan-dec

Revenues

Sales revenues

$134,020

Less-cost of goods sold

$10,800

Gross profit

$123,220

Expenses

advertisements

$1,850

purchase of equipments

$16,700

rent

$32,000

maintenance

$2,200

insurance

$2,000

loans

0

stationary and postage

$650

staff wages

$48,000

petty cash

$600

telephone charges

$2,400

legal services

$1,000

electricity

$600

others

$1,250

Depreciation

$2,500

Total expenses

$111,750

Net Profit

$11,470

MATRIX CYBER CAFÉ

OWNERS PERSONNEL EXPENSES

for the period Jan 2010 to deck 2010

 

 

Jan

Feb.

Mar

Apr

May

Jun

July

Aug

Sep

Oct

Nov

Dec

Total

Basic commitments

Food

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$6,000

Health

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$2,400

Education

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$1,200

House Rents

$1,550

$1,550

$1,550

$1,550

$1,550

$1,550

$1,550

$1,550

$1,550

$1,550

$1,550

$1,550

$18,600

clothes

$100

$100

$100

$100

$100

$100

$600

car payments

$50

$50

$50

$50

$200

telephone bills

$100

$100

$100

$100

$400

gas and electricity

$200

$200

$200

$200

$200

$200

$1,200

personal income tax

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$12,000

others

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$1,200

withdrawals monthly

$3,700

$3,650

$3,550

$3,800

$3,550

$3,650

$3,700

$3,650

$3,550

$3,800

$3,550

$3,650

$43,800