The C.H.D.S (Chinese Home Delivery Service) will be a limited liability business type company and will specialise in the home deliveries of Chinese Food.

The principal aim of C.H.D.S will be to provide - North London - with high quality Chinese cuisine, at an affordable price and in the most expeditious way. The following objectives will facilitate the accomplishment of the stated aim:

Superior customer service: The company will be owned and initially managed by professionals (graduate engineers) who will be able to furnish the clientele with a superior service, through the judicious investment in technology and effective operation systems.

Turnover: The company will generates an estimated 95% of its revenue from its home delivery segment and have an overall turnover for the 1st Unit of £345,000 annually.

Profit: The company will generate an estimated average Gross Profit level of 60% a year and Net Profit of 30%

Market share: The company will achieve market share (Turnover and Profit) through an initial aggressive localised leaflet, poster and marketing pomotion campaign. Subsequently, a bespoked customer order database will be used to consolidate market share.

C.H.D.S's unique selling point (USP) is based on the fact that during the late part of the 1980's - when this business is being established - only Pizza company's provided home delivery of fast food products. Consequently, the USP - competitive edge the business will have - is based on lack of competition in the home delivery (Chinese Food) market.

The potential demand for the new business will be ascertained through primary market research via surveys and testing specific target areas. This research being complimented through secondary research based on: price, product and service profiles of the competition, such as, Domino's Pizza.

The graduate engineers starting-up this venture will balanced their personal and business needs by supporting each other and initially mentoring their respective self-esteem development.

The business trends affecting the start-up will be monitored using government economic statistics and the following estimated sales trend chart - average sales £6,000 per week.

Methods used to identify the business’s target market:

The initial sales to open the business will be created by quarterly leaflet/ (‘green’ agenda) Menu drop (budgets of £2500) - generating approxiately 830 customer each time (drop) - in a radius of 1 km area surounding the the Business Unit in London N1; furthermore, a local advertising campaigns - using local media, such as, Tomson local would provide additional customers .

Notwithstanding, the following bespoke database will be used as a the company's main Market-Research-Tool to analysis the customer profiles and subsequently contact database-customer's to stimulate repeat business.

The 1st year's Sales forecast extrapolated from the results of initial marketing initivities are outline below:

Part 1: Skills required to run the business.

1. Identify the specific skills required to operate the business successfully.

Part 2: Personal skills contribution.

1. Conduct a personal skills audit.
2. Describe, in which areas will your skills make a positive contribution to running of the business.

Part 3: Skills gap and devlopment needs.

1. Identify the gap between the skills you have to contribute and the skills needed to run the business successfully.
2. Outline the short-term and long-term develop needs - Human Resources requirements - of the business. 
3. Produce an action plan to action these develop requirements.

Legal aspects:

Legal status and liability: Limited liability

Trading standards: http://www.tradingstandards.gov.uk/

Trading terms and conditions:

http://www.diyaccounting.co.uk/company_formation/memorandum.htm

National / local laws: Insurance for: Permises, Mopeds, Health and safety.

Contracts duties and responsibilities: Contracts of employment, Paying employees, VAT, Hours of work, Discrimination, Health and Safety / By-laws

Regulations: Data protection, Fire Regulations, COSHH, etc


Sources of advice: DTI, Local Enterprise Agencies, Websites
http://www.bis.gov.uk/

Pyhsical aspects:

Cost of premises of the 80 square meter site is £12,000 per year.

Location gives plenty of scope for potential city of london customers

Not much room for expansion.

All necessary amenities have been added - 6 bikes are housed - after closing hourse - in front-of-shop

Growth & development aims & objects - next five years.

The principal growth aim of C.H.D.S - in the next five years - will be to provide the North London area with at least 5 more home delivery units, which would provide high quality Chinese cuisine,  at an affordable price and in the most expeditious way - with one unit having food-processing facilities & large freezer storage capacity for bulk-buying. The methodology to facilitate this accomplishment would be to emulate (copy) the business model (objectives) outlined in this single unit business plan.

A strategy of continuous growth minimizes the amount of Capital gains and VAT the company will have to give the tax-man, because exploiting expenditure reduces Net Profit and therefore Capital Gains; and maximizing expenditure enables the company to claim back VAT against outlays / outgoings.


Financial support for growth and development.

The financial support for the stated growth and development would essential come from 20% of the sale revenue per unit:
 
1st year    = £46,881
2nd year   = £46,881 + £69,037 i.e. 20% £345,186 = £115,918
3rd year   = £115,918 + £69,037 = £184,955
4th year   = £184,955 + £69,037 = £253,992
 
Total investment:             over 4 year period = £253,992
 
See company's record keeping used to generate the following financial spread-sheets and charts

(Fig. 5.1) Business ventures break-even-analysis

(Fig. 5.2) Estimated profit and loss account

(Fig. 5.3) Estimated cash-flow analysis

The investment will be spent in the followings areas:

(1): Marketing: Building-up at least 5 regional databases

(2): Delivery bikes: 6 x mopeds per unit

(3): Equipment: Appropriate kitchen & IT equipment

Economies of scale in the follow areas:

Purchasing: £82,845 x 5 = £414,225 i.e. the increased purcasing power will enable the company to buy-in bulk and drive-down cost with our main supplier

Marketing: As each unit establishes it target database number of customer i.e. 30,000 per region - marketing costs could be reduced to maintaining sales through contact customers for repeat business via database records & periodic boosts through Post-office mail-shots.

Human Resources

The C.H.D.S (Chinese Home Delivery Service)'s Financial Contingency plan falls into two categories: (1) Raising more finance through Internal Sources of Finance and External Sources of Finance and (2) Cutting-back on estimated expediture.

(1): Potential additional revenues during the 1st year.


Internal Sources of finance:

Own savings: Raise additional £10,000 from Directors Gifts from friends and relative: Raise £5,000 given debenture stock or share options as security. 

External Sources of finance: 

Grants and sponsorship: The Prince's Trust will assist young people (18-30) who are/have starting-up business ventures, and are on their Enterprises programme, with support, such as:

• Initial start-up capital,
• 24 Hour Legal Helpline,
• Free access to an easy-to-use online accounting system,
• A free office-on-your-phone service suitable for running and growing a small business,
• Free and professional web design package,
• Reconditioned PCs and computing software,
• A range of discounted rental options including fully serviced and equipped offices plus meeting room facilities, 
• Preferential rates on indoor and outdoor market stalls in various locations across the UK and/or
• Online software and business services to start and run a small business or home office.

Loans and Borrowing: Bank loans, Overdrafts, Mortgages, Leasing and Venture Capital

(2): Cutting-back on 1st year estimated expediture.  

The Break-Even-Point of the business proposal is estimated @ 382 deliveries (£11.40 per order), which is equivalent to a weekly sale revenue £4,355. However, to finance the estimated profit and loss account and estimated cash-flow analysis the business venture will need to generate approximately weekly target for sales of at leasr 614 orders, which is equivalent to a weekly sale revenue £7,000.

Notwithstanding, if the business does not perform as expected the following financial contingency scenarios will be apply:

Scenario 1: Sales Revenue @ 90% of target

To maintain cash-flow and to supply the share-holders with a dividend; the following variable-costs have all be reduced - by 10% - to accommodate the reduction in sale volume: Power (light, heat, electricity, gas), Telephone, Insurance, Postage and carriage, Wages, or salary, Food purchases and Drawings.

Scenario 2: Sales Revenue @ 80% of target


To maintain cash-flow and to supply the share-holders with a dividend; the following variable-costs have all be reduced - by 20% - to accommodate the reduction in sale volume: Power (light, heat, electricity, gas), Telephone, Insurance, Postage and carriage, Wages, or salary, Food purchases and Drawings.

In addition, repayment of Director's loans were reduced from £15,000 to £5,000.

Scenario 3: Sales Revenue @ 60% of target


To maintain cash-flow and to supply the share-holders with a dividend; the following variable-costs have all be reduced - by 40% - to accommodate the reduction in sale volume: Power (light, heat, electricity, gas), Telephone, Insurance, Postage and carriage, Wages, or salary, Food purchases and Drawings.

In addition, repayment of Director's loans not paid-back this year and Drawings were reduced from 20% to 10%  of Total Cash Receipts.