Names: Anna Thai, Rebecca Hayes and Donna Nguyen
School: MLC School
State: New South Wales
Name of Plan: I Scream 4 Ice-cream

Product or Business Idea and its Potential

The name of our business is I Scream 4 Ice-cream. The reasons why this name was selected are that it will appeal to our target audience, and that the wording of the name rhymes so that it will be easy to remember, as it is eye-catching and unique.

Unlike the names of other ice-cream parlours such as New Zealand’s Ice-cream and Wendy’s, the name I Scream 4 Ice-cream is unique. This uniqueness within the name will consequently depict our ice cream as being unique at the same time, which in reality it is.

Furthermore, the name will appeal to our target audience: children between the ages of 2 – 18 years. This is due to the way it is spelt. Many children of this generation are exposed to writing in the form of codes and shortcuts due to the modern development of technology and mobile phones. For example, "gtg" means "got to go". Hence, the use of the number "4" in the name, instead of the word "four" would appeal to them and it can be easily recognisable as it is memorable.

Another factor that will contribute to people recognising the name is that the name is in actual fact from a part of a children’s nursery rhyme:

Girls are sexy,
Made out of Pepsi.
Boys like to scream,
For the polka dots ice-cream.

Thus, although the name, I Scream 4 Ice-cream has no particular meaning, most importantly, it will appeal to our target audience due to its uniqueness and catchy name.

The Prime Function

The prime function of our business, I Scream 4 Ice-cream is to provide and supply for our customers quality ice cream for them to enjoy all year-round. Our homemade ice cream will be of the highest quality with not only the typical ice-cream flavours such as chocolate and strawberry but also including unique flavours that cannot be found in normal supermarkets and ice-cream parlours. The unique ice creams will be the products that will distinguish our business, I Scream 4 Ice-cream from other ice-cream parlours and suppliers.

As well as retail sales, the business will also offer wholesale orders of our homemade ice cream on a large-scale basis, targeting especially caterers and small diners. This will essentially increase our sales and cater for a larger range of people, thus increasing our target market to a wider market.

Type of Ownership within the Business and Reasons

The type of legal structure that the business will be employing is a three-way partnership. The owners within the three-way partnership of I Scream 4 Ice-cream are Donna Nguyen, Rebecca Hayes and Anna Thai.

This was chosen due to the reason that this is the number of people who will be investing their money into the business. As a partnership enables a group of people to contribute their time, talents and money towards the business, in return the responsibilities and profits can be shared between the owners equally, dependent on that each person inputs the same capital to establish the business. As the responsibility of running and managing the business is shared, the ability to raise finance is ultimately increased.

In addition, another reason why this legal structure was chosen was that the risks and responsibilities of the business could be shared among the owners of I Scream 4 Ice-cream. This means that the risks and responsibilities involved within the business is not as high for each owner. However, although the liability of a partnership business is unlimited, the costs to establish and manage the ice-cream business are not high, so the risk undertaken regarding the liability of the business is not great.

Furthermore, the three-way partnership will also ensure the owners of I Scream 4 Ice-cream have a high control over the business. This way, they are able to foresee the business and prevent any problems, either financially or internally, from arising. Also, they can control any processes that occur within the business such as the decision-making.

Also, the three-way partnership will entitle the three owners to combine their knowledge, skills and talents in regards to running a business effectively. Consequently, the business will be able to run more smoothly due to their combination of talent. Hence, the success of the business will be enhanced.

Thus, these are the reasons why the legal structure of a three-way partnership was chosen for the business.

Location of the Business and Reasons for Choice of Location

Location, Location! Location is the most important factor that contributes to and distinguishes the success of a business. The owners of I Scream 4 Ice-cream have chosen to establish their ice cream business in a place where it is popular and easily accessible. Furthermore, the location of the business must be situated in a place where ice cream is prevalent and would appeal to consumers, for example, the beach. Thus, the location of the business that the owners of I Scream 4 Ice-cream have chosen is 512 Campbell Parade, Bondi Beach. This is because Bondi Beach is a tourist attraction that is popular with overseas tourists. Our exterior shop front presentation and originality of ice cream would appeal to them, as it is different to the typical ice cream parlour. Furthermore, not only is Bondi Beach a tourist attraction, but also Campbell Parade’s geographical location is right across the road from the beach. The road follows the contour of the beach. Hence, it can easily be within reach by beach-goers, especially during the summer when the weather would draw people to a popular beach like Bondi. Hence, 512 Campbell Parade, Bondi Beach would be an ideal location for I Scream 4 Ice-cream.

The Mission of the Business

The mission of I Scream 4 Ice-cream is to offer its customers with the highest quality of homemade ice cream that is unique. The ice cream will always meet the customer’s taste, satisfaction and needs. The business will achieve this by way of following the food and hospitality regulation laws of Australia.

Business Goals

The personal and financial goals that the owners of I Scream 4 Ice-cream have devised are as follows:

Personal:

• To provide our customers with the highest quality of home-made ice-cream
• To satisfy the customers’ needs and satisfaction
• Gain more experience within the food industry
• Acquire an income that is rewarding
• To successfully manage a business
• To expand the business further within the food, especially desserts industry (ie franchises)
• To promote and popularise I Scream 4 Ice-cream within a friendly environment

Financial:

• To not fall into debt with the bank and any other institutions
• To earn enough capital to be able to cover all outflows of the business and business establishment fees
• To have a turnover of a least 40% pa. of all sale costs

Social:

• To be able to establish an environment that is both friendly and pleasant to staff members and customers
• To be environmentally safe to the environment
• To provide employment within the community
• To be engaged in ethnical conduct

Staff and Management Requirements

As we are holding a three-way partnership within a small business, the number of staff members required to manage the business would be of a minimum number. There will be 4 part-time shop assistants, 2 shop managers and an ice-cream manufacturer.

The staff members needed to manage the business on a daily basis is 2 on weekdays and 4 on weekends and holiday periods when the demand is greater. These employees do not need to have any special qualifications or degrees to perform their specific area. They will be either trained by the owners of the business or an already competent assistant working at I Scream 4 Ice-cream in order for them to successfully do their job. They are also expected to clean all areas and aspects of the ice cream store such as the kitchen, counters and so forth. The managers of our business should hold special qualifications needed in order to run a successful business. Each manager should have completed the required years and knowledge needed to earn their Bachelor of Commerce degree, Bachelor of Business degree and/or Bachelor of Hospitality degree, which would be considered to be of extreme importance for the business in preparation for marketing and processing our merchandise and for the business financially. The ice-cream manufacturer would be the most vital employee of the business. He/she would be required to have the experience and knowledge needed in food preparation and safety to ensure that the product is not only consumer-safe, but also reliable and trustworthy. This will gain the customer’s trust in the business and the product which will also have the customers coming back for more.

Skills and Knowledge Required of Management

Not only should staff members and managers of the business fit the above descriptions and possess the essential requirements, each of the members employed within the business should also demonstrate good communication and social skills with each other and this should be evident when serving the customers.

Market Analysis

I Scream 4 Ice-cream plans to target the food industry with a differentiated market (multiple segments) approach. This is because the business will essentially take the same product, and by using different techniques, differentiate and modify it for each market segment in order to offer ice cream that will cater for all people. The business will especially attract customers wanting a variety of new, creative and original ice-cream flavours that cannot be found in any normal supermarkets and ice-cream parlours. Another reason why the owners of I Scream 4 Ice-cream have selected this target market is that we will be able to access a much wider market and generally become more profitable through the greater sales. Thus, the success rate of the business will be enhanced.

However, our most specialty target market will be to target the youth of this generation including infants as young as 2 years of age, all the way to teenagers and young adults. This is because the youth of this generation today are usually more willing to endeavour new products, as they like to experiment, discover new things and tend to follow trends. Also, an alternative reason why our main target market will be youths is that this age group are the most likely to appeal to ice cream. It can be seen that ice cream is popular within this age group, as it is sweet, fun and most importantly delicious.

However, our secondary target market will be aimed at the older generation of today such as parents, adults and health-conscious people, either to buy the ice cream for themselves or for their children. This is because not only do we offer unique and fun ice cream for children, though they will be our main target market, but we also offer other delicious ice creams such as sorbets, soft serve and sundaes.

Competition

Businesses establishing within the food industry is quickly on the rise. This is mainly due to the activity of society today that wants quick and easy access to food, especially fast food. To further segregate the food industry, there are many competitors within the ice creamery sector such as New Zealand Ice Cream, Mr Whippy and many other small local ice cream parlours. Thus, these would become our competitors.

However, the main principle that will distinguish I Scream 4 Ice-cream from other competitors is our ice cream. Our ice cream is homemade, original and will be sold at a relatively cheap price. The pricing strategy of the ice cream compared to similar businesses will especially catch the attention of and favour large families where it could be difficult to afford luxuries such as ice cream for their children.

Furthermore, even though the business will specialise in normal ice cream, it will also offer the option of other types of ice creams such as sorbets, soft serve and sundaes. This way, the business will be able to cater for a wider range of customers, satisfy their individual tastes and fulfil their satisfaction of ice cream. Many ice cream parlours only offer ice cream and this does not comply with everyone’s wishes.

I Scream 4 Ice-cream will be the new, modern, hip ice cream store that is situated conveniently at Bondi Beach where it can be easily accessed, especially during the summer when the beach is a popular place for people. The business will have a neat and creative exterior shop front that attracts the attention of passers by, particularly children due to the repetitive colour scheme that the business will employ. The colour scheme will consist of pastel colours like pink, purple and white. In addition, our business will provide a happy and comfortable atmosphere that is different to other businesses within the ice cream industry. There will be background music for customers to enjoy whilst being served and the waiting line would not be long, as the business will employ sufficient staff to handle the customers. This will especially be beneficial for families with children. Our business will also incorporate a self-service component where it will enable children to create their own toppings using our "Kreative Korner 4 Kids". This offer can be used with any product purchased. It will appeal to children as it is fun and they will be able to "make" their own ice cream.

Another factor feature that will distinguish I Scream 4 Ice-cream from other ice creameries is our range of sizes. The ice cream will be served in a variety of sizes ranging from sundae cups, both large and small to cater for a wider range of customers, as well as the choice of either a waffle or wafer cone.

Thus, the business’ pricing strategy, range of types of ice cream, exterior and interior store presentation and large range of sizes will mainly be the principles that will distinguish I Scream 4 Ice-cream from other competitors.

Pricing Strategies

The pricing strategy at I Scream 4 Ice-cream will be determined by 50% that of the original cost price of the ice cream. The business will start off small where promotion will gradually enhance the success of the business. Thus, the pricing strategy will provide the customers with a cheap alternative to ice cream compared to leading businesses and competitors. The pricing of the ice cream will hopefully attract customers as they begin to learn that we are trustworthy ice cream providers. Once our popularity has increased, the prices will be increased steadily by 5% of the sales price every 9 months or so. This is known as penetration pricing where popularity of the product is increased, the price will increase too. Also, depending on the weather and popularity, the ice cream will still be sold at the new price, however, still providing a cheap alternative to that of other competitors.

Marketing Strategies to Promote Business

The managers of I Scream 4 Ice-cream plan to promote the business through the use of:

• Music – the use of music within the store will attract people’s attention and retain it, especially if it is their favourite type of music. For example, if The Wiggles music was to be played within the store, then children will be enticed to the music and will consequently notice the ice cream.

• Seating – seating within the store will provide accompanying customers with comfort whilst they wait. Also, it will be beneficial for parents whilst they supervise their children whilst they "make" their ice cream in the "Kreative Korner 4 Kids".

Bonuses for the Customers:

• This essentially means that by distributing free promotional coupons and samples, it will increase the popularity of the business. It will attract customers, as the coupons will be distributed near the location of the business, where they will be persuaded to visit the store to receive their free promotional samples.

Positioning of the Ice Cream

• This is fundamentally to decieve the customer’s mind where they would refer to the selection of ice cream and be able to see all the different types and flavours. This generally means that a popular ice cream such as Chocolate will be positioned next to a not-so-popular ice cream such as Berry Fruits, whereby the customer will take it into account.

Store Layout:

• The store layout is important, as it will play a major role in deceiving people’s approach towards the physical state of the store. For example, the "Kreative Korner 4 Kids" will be placed somewhere where it will be visible to the customers by the shop front. This will primarily attract the attention of passers by like children.

The reasons why these marketing strategies have been chosen are that these types of marketing strategies are relatively cheap and are within our budget. They were also chosen on the belief that they are an informative and effective way of promoting the business, in order to enhance the business’s success.

Promotional Plan

Advertising:

• Newspapers – by advertising our business in the newspapers, it will enable the promotion of the business to have a widespread circulation either within the area or state; depending on which newspaper it is advertised in. As the business is located in Bondi Beach, and Bondi Beach is a tourist attraction, people will be able to recognise the location of the business easily. Such examples of newspapers are The Sunday Telegraph, The Daily Telegraph, The Sydney Morning Herald, The Sun Herald, and the local newspaper such as The Courier. The business will be advertised under the food and entertainment section of the newspaper.

• Children’s and Food Magazines – these sources are largely read by the public for enjoyment, so the advertisement will appeal to them, especially children. Such examples of children’s and food magazines are Disney’s Adventure, and Food Magazine.

• Television Advertisements – once the business has gained enough profits, the managers hope to expand to television advertisements. The advertisements will mainly be aimed at younger children as this is our major target market and will be shown during the kid’s viewing period in the morning and afternoon during kid’s shows.

Trade Fair and Exhibitions:

Personal Selling:

Overview of Market Research

As part of our market research, we conducted a survey on a sample population to determine our target audience and in order to satisfy the customer’s needs, we would require to know their wants. Thus the approach was to conduct a survey. The following example was a small portion of the survey.

SWOT Analysis of Business

Strengths

• The business is situated near the beach, so the popularity of ice cream is enhanced
• The pricing is reasonably cheap, so it would appeal to large families
• The accessibility of the business is easy to reach as public transport is close by and parking is relatively excessive
• The staff employees of the business are well trained, experienced and qualified
• The product is unique, original and homemade from the highest quality ice cream
• The business’ dedication to the customers need through quality customer service
• Located in the heart of Bondi’s shopping vicinity

Weaknesses

• Located on a main busy road
• As Bondi Beach is mainly populated with single dwellers, so our target market is not strong within the area
• As Campbell Parade is a prime location for businesses, the rent is very expensive
• High establishment costs to set up business
• Unlimited liability due to partnership

Opportunities

• Bondi Beach is a tourist attraction
• The business will be able to take advantage of the numerous festivals that occur at Bondi Beach throughout the year
• Ability to cater for large parties, so the business would be able to expand its market
• As ice cream parlours are popular, the business can be franchised nationally

Threats

• Located near two other competitors
• Weather could repel people from eating ice cream
• New fast-food outlets could emerge nearby

Summary of the Future Prospects of the Business

Overall Assessment of the Business – Viability and Future Prospects

It has been demonstrated that both our product and business has a unique and appealing streak, which is capable of attracting our intended customers. Our overall marketing strategies, staffing needs and other aspects of our business being shown in the above business plan can show that the future of I Scream for Ice-cream will undoubtedly be a successful small business. As I Scream for ice-cream is a small business, it will recuperate the establishment costs in order to enable the business to be debt-free, which consequently makes the business more viable and run smoothly. Being the small business that we are currently, in the future, we are hoping to:

• Introduce wholesaling of our product to increase sales, to ultimately enhance the success of the business.
• Expand the business once we are more than financially capable. That is, expand the business to other locations within the state and hopefully nationally. This is going to be achieved through franchises.

Financial Analysis and Cash Flow

The total establishment of the business amounts to $33,291. The financial of our business will be 40% debt and 60% equity. The debt finance will be loaned under the "Fixed Rate Business Loan" from the Commonwealth Bank of Australia at 7.0% pa. (per annum), the interest being compounded yearly and for the debt to be paid off within a year.

In addition, the directors of the company (being Rebecca Hayes, Donna Nguyen and Anna Thai) have decided to borrow a further $10,000 to be included in the same loan to have as security and act as an emergency fund in case of business failure.

The reason for this selection of loan is that the fixed rate of interest is safely fixed and that it will provide security for the business, as the Australian economy is not steady.

Therefore, the risk involved with undertaking the "Fixed Rate Loan" is low compared to the "Standard Variable Loan". So to embark on a Fixed Rate Loan" is low compared to the interest needed to be paid will be predictable and the need to raise finance to pay off the debt can be forecasted.

Hence, the business will have a total of $43,291 in establishment costs whereby $25,291 will be debt financed under the Fixed Rate Business Loan of the Commonwealth Bank of Australia and $18,000 is equity financed from the three owners of the business. From the debt finance, a total of $27,061.37 including interest will have to be paid within a year to the bank, paying monthly instalments of $2,255.11. However, to finance the equity side of the establishment costs, each owner of the company will input a minimum of $6,000 a piece totalling $18,000 altogether.

The outgoing costs for the business, I Scream for Ice-cream includes rent payments, wages, advertising, insurance, repayments of instalments for bank loan, bank charges, accountant fees, telephone bills, electricity bills and wages.

As ice-cream is a seasonal food, meaning that sales are dependent on the season and weather, the sales figures will vary throughout the year. Typically, sales of ice-cream would peak during the summer season as this is when the weather is hot and ice-cream is most popular and favourable. So, in other words, most of the year’s sales will be incurred during this season. However, although sales will be acquired throughout the winter, it will not be as high as those made in the summer and may in some occasion, incur a loss of profits, though it is hoped that this does not happen.

The expected trading for the first 12 months of trading is:

Product costs and mark ups (ie sales price)

Variable costs per unit + 900% of variable costs per unit = retail price

The prices of all ice-cream products that I Scream for Ice-cream will offer are determined by using the formula stated above. The reasons for this formula are that the business’ aim was to fulfil the customers’ satisfaction by the use of the determination of the pricing strategy and recognising the importance of customer service. In order to completely achieve this, we are offering ice-cream at reasonable and affordable prices and that will not only satisfy the customer but also the business requirements (ie: profits). Although, 900% may seem a lot, the profitable margins are minimal. The I Scream for Ice-cream business rather is one that acquires lots of sales through low prices rather than minimal sales of high prices. Thus, take for example, a scoop of our delicious ice-cream with a waffle cone. Its cost price is $0.25.

Variable costs per unit + 900% of variable costs per unit = retail price

$0.25 + $2.25 = $2.50

The use of pricing formula results in prices of our ice-cream products being lower than those of our competitors. Taking the example shown above into account, our business competitors price the same product at approximately 30% more. Thus, the pricing strategy is reasonable, affordable and fulfils the customers’ satisfaction of low costs, and delicious high quality ice-cream.

As the business develops its trust and publicity of its name, the use of penetration pricing will be employed. This is where a business sets its product prices purposely low at first to gain market share and then once this is achieved, the price would be increased by a minimal percentage (usually no more than 5% each time). The business will generally increase sales through the use of promotional plans such as free give-aways, coupons requesting a free taste test and so forth. However, although this is a continual process, the price will always stay at a reasonably cheap price compared to the competitors.

Break even analysis

Quantity (Q) = Total Fixed Costs

Unit Price – Variable Costs per unit

= 132,087

2.50 – 0.25

= 132,087

2.25

= 58,705 ice-creams per year

Thus, the break even sales required within a year in order to gain profits is 58,705 scoops of ice-cream in a waffle cone. Sales less than five figures will incur a loss of profits and other means of financing the business and fixed costs will be established. However, this figure averages 160 scoops of ice-cream a day, 13 scoops of ice-cream every hour. Hence, this figure is the break-even sales point for the business.

Make up of Establishment Costs

Outgoing costs