SCG.NET (A Subsidiary of Sobex Consulting Group Inc.)

BUSINESS PLAN FOR SCG.NET SYDENHAM

COPYRIGHT © BY SCG.NET

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY------------------------------------------------------------------------------------------------------3

2. BRIEF HISTORY /CREDENTIAL OF OWNER--------------------------------------------------------------------------4

3. SCOPE/CONCEPT OF SCG.NET------------------------------------------------------------------------------------------5

4. COMPANY OWNERSHIP & STRATEGY LOCATION----------------------------------------------------------------5-6

5. AIM, OBJECTIVE AND VISON----------------------------------------------------------------------------------------------6-8

6. BUSINESS DESCRIPTION AND PURPOSE---------------------------------------------------------------------------9-10

6.1. OUR MISSION STATEMENT----------------------------------------------------------------------------------------10-11

6.2. KEYS TO SUCCESS---------------------------------------------------------------------------------------------------11

6.3. RISKS-----------------------------------------------------------------------------------------------------------------------11

7. LEGAL STATUS AND LICENCES-----------------------------------------------------------------------------------------11

8. MANAGEMENT PROCESSES-----------------------------------------------------------------------------------------------12

8.1. MARKETING AND SALES---------------------------------------------------------------------------------------------12

8.2. FINANCE-------------------------------------------------------------------------------------------------------------------12

9. RECRUITING AND STAFFING---------------------------------------------------------------------------------------------12

10. PRODUCT DEVELOPMENT OR PRODUCT SOURCING----------------------------------------------------------12

11. GENERAL MANAGEMENT--------------------------------------------------------------------------------------------------13

11.1. ADMINISTRATION------------------------------------------------------------------------------------------------------13-14

12. MARKETING STRATEGY----------------------------------------------------------------------------------------------------14

12.1. INITIAL MARKETING TARGET---------------------------------------------------------------------------------------14

12.2. MARKET SIZE------------------------------------------------------------------------------------------------------------14-15

12.3. MARKETING PLAN-------------------------------------------------------------------------------------------------------16

12.3.1.GNATT CHART FOR MARKETING ACTIVITY-----------------------------------------------------------17-19

13. FINANCIAL REQUIREMENT AND FINANCIAL FORECASTS ----------------------------------------------------19-28

13.1. WHAT IF SCENARIO FOR S C G. NET---------------------------------------------------------------------------29

13.2. PROBABILITY TO INCREASE SALES AND TURNOVER---------------------------------------------------29

13.3. BREAKEVEN ANALYSIS: The Cost-Volume-Profit Model---------------------------------------------------30-34

14. CRITICISM FOR THE BUSINESS-----------------------------------------------------------------------------------------34

15. OPERATIONAL REQUIREMENT------------------------------------------------------------------------------------------35-37

16. BUSINESS RISK----------------------------------------------------------------------------------------------------------------37-38

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17. SWOT ANALYSIS FOR SCG.NET-----------------------------------------------------------------------------------------38-39

18. MARKET INFORMATION – PEST ANALYSIS -------------------------------------------------------------------------40-42

18.1. Summary of Pestel Analysis for SCG.Net ------------------------------------------------------------------------42-43

BUSINESS PLANEXECUTIVE SUMMARY

SCG.Net is unlikely a typical internet café, that offer a unique avenue for business and

networking, apart from entertainment and communication that was seen in a contemporary net café

around the locality. SCG.Net is the solution to the numerous increasing demands. The public wants: (i)

access to fastest internet for quick business links, interaction and transaction (ii) access at a cost

relatively affordable and rendering value for money in a manner that they are not socio-politically

&economically isolated. The essential concept in this paradigm of setting up an internet café, has long

been a standing issues of concern that tends to compel or raise so many diverse analytical issues of

commonality and differentially. The survey made with regard to setting this cybercafé has brought a

unique approach to the question that has been unanswered. The business is nevertheless, a good

idea with good positioning in a strategic location. The purpose of using it as learning point for

opportunity for growth in terms of IT & IS coaching is one among emphasis that led the existence of

the business.

Quite remarkably, is the use of rent age option, this is seen as a way to strategically allow

corporate bodies and eminent individuality of interest that needs a rented PC for their seminar,

conference, training, Interviews for their prospective candidate or staff. The conceived idea of market

segmentation techniques is another option will be considered in this respect, as most traditional cyber

café only set up their businesses without having a unique consideration for segmentation of their

product and services. The market segmentation employ at SCG.Net is classified into:(a)kids (latest

LAN gaming) (b)single mother (browsing) (c)Tutorial for Microsoft office (learning aspect) (d)Business

elite (office work using Ms office, news update; email yahoo etc). (e)students (course work, report &

dissertation) (f)Disable people (web access, & assistance) (g)Leisure, (social networking such like

face book, twitters, video CD watch).For each segment highlighted, three (3) number of PC will be

assigned to them, making a total of twenty one (21)PC altogether.

It is often realize that this business idea works well when multifarious factors were duly executed.

For the benefit of this business the following will be exercise for the growth and development of SCG.

Net. Firstly (1) pricing; an affordable and competitive pricing technique will be employ. Secondly (2)

strategic location is a must priority for the set up; the population shift, demographic survey, racial

densely region are what will be considered pertinent to the survival of the net café. Thirdly, (3)

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brainstorming and feedback technique using a design forms. Fourthly (4) network marketing strategy;

using word of mouth, leaflet, aggressive result-oriented marketing technique. Fifthly (5) advertising;

using face book, Google ad words & ad sense.

BRIEF HISTORY /CREDENTIAL OF OWNER

However in the recent times, I have embarked on net café, which I set up in Nigeria running up for

five years precisely before relocating to U.K to further study. The experience acquired on the previous

business was extra ordinary. Several people decisively turned to make use of the net café for

convenient and quick service due to cutting cost in their spending. This is because prospective

customers seen it cheaper to afford and so the turnover of customer was massive and out-number

what I expected. It is however, the most outdoor way of relaxing by youngsters, adolescent and old

coupled with the advent of social media networking such as face book, Skype and lot more. The

intention therefore was to make SCG.net a friendly environment, built on trust, hospitality, and

customer focus, assisting the customers, and creating great value for their money.

Moreover, the knowledge on change management port folio, whereby new and modern

infrastructure is added to the line of PCs and updating the PC software as well as the significant of

software security to ensure customer’s risks is minimized or eliminated will be installed. The use of

Norton internet security or E SET smart security 5 will be the best option to consider. Although, the

installation of this software will help protect from phishing, Trojan, and anti social behaviours. I have

couples of colleagues in this business in U.K and their sheer experience with me is quite convincing

and challenging. With careful survey (made I found the setting up of cybercafé an opportunity to invest

my liquidity and to sell its shares to investors that might be interested to be a shareholders.

I am a proactive mindset individual, a graduate of IMIS, ICM and GSM. I have HND in information

system, Graduate Diploma in Management Studies and M.Sc in Business Management. I have been

in the forefront of management issue, policy and position for a longtime roughly about six years. My

area of specialisation in management is on Strategic Planning. At of present, my system policy

towards business has been the aspect of cost management, managing waste, and risk assessment.

This set of management will give the business ability to put up a compelling force and a challenging

competitive advantage in terms of pricing, location and accessibly.

COMPANY SUMMARY

SCG.net is a global phenomenon that fully integrates itself to service of providing internet to the

neighbourhood at an affordable price that the customers never expected. SCG.net is a subsidiary of

Sobex Consulting Group Inc. Sobex Consulting Group is a consulting firm that involves assisting new

entrepreneurs to start up their business by selling in formations and also giving training needs that will

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empower them to acquire the right skills to establish their business successfully. Thus helping and

encourage young enterprise to create a job for themselves and others. Others includes how to use

face book for business, the use of CPC & Google ad sense as well as writing business proposal,

strategy to go about setting their own business goals & free websites to use.

SCOPE/CONCEPT OF SCG.NET

The number of PC that will be purchase is 20 PCs; this will help to increase the number of turnover

daily. As business moves on, more computers will be added. However PCs used are fairly second

hand with relatively cheaper and affordable to maintain at a retail price of £120 per computer (Monitor,

key board and mouse). Therefore, the whole scope and concept is that the more computer will have in

near future, the more the business will be more profit oriented. There is also the use of photocopy

machine, fax machine, laminator, and money transfer using RIA or Western Union. Other inclusion is

the mini- coffee machine where selective coffee will be served; such as Hot chocolate, black coffee,

white coffee, latte, cappuccino will be made comparatively cheaper to suit the customer delight. Also

included is selling of cold drinks like coke, sprint, fanta etc. Albeit to the strategy that will be employed,

a promotional contest will be exercise at the end of months which will show the list of number of

customer’s name that patronize SCG.net internet café. The top five list of name will be entitle to £5

vouchers to use the service (or a coupon of £5). More so every time the business progresses, a

competitor’s analysis will be survey, analyse and review the SCG.net overall performance against the

rivalries. The intention is to start small but projecting to expand in the next 5 years. ‘According to

Henry Mintzberg (1964) many entrepreneurs are reluctant to gain ground on the charge that

could trigger their immense growth and development because they have never a strategy

thinkers and analyst’’. What SCG.net aim is to strategically think & analyze the opportunities and

threats of the business vis-à-vis the internal strength and weakness so that possible area of the

business could be improve. By and large, there will be an account open, where money earned from

the daily transaction would be kept untouched. At the end of the quarter, the funders or investors will

be paid the monies due for them. The most relevant sought after, is that the investors is assure that

quarterly due payment will be paid and that the business in question is viable since the strategy frame

work system embark on is starting small for sometimes, considering the performance and

management system portfolio of the business.

COMPANY OWNERSHIP & STRATEGY LOCATION

The owner of the business venture is Chief Olusegun Sotunbo, the business name is SCG.NET

Internet café. It is strategically located at the heart of Sydenham with relatively high percentage of

residents compared to commercial and retail shops. The address of the location is quite easy to

notice…No 54 Lawries Park Garden, Sydenham SE26 6LP. This site was chosen for various reasons,

including:

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Proximity to the downtown business community.

Proximity to trendy, upscale restaurants in the locality

Proximity to LTD's Sydenham Station. Parking availability.

Low cost rent.

High visibility.

The strategy locations for the internet cafe also play a crucial role in the increasing factor of the

overall sales and turnover. This is a key driver for this business to thrive. The consideration is getting

to the potential users especially, racial densely populated; intensive areas where kids, student,

business and social elite have an increasing percentage in the locality, preferably 80% and 90%

individual who can’t afford the monthly charges pay to the ISP. This will be done with paper

questionnaire and one-one interviews. Also, the type of Sims and vouchers to put for sales will be

investigated from prospective customers and neighbouring, in term of administered questionnaires.

The service that will be provide are: (i) Internet service; (ii)PCs rent age; (iii)Business Consulting

Service; (iv)Typing Documents; (v)Networking, (LAN Gaming and Skype and face book etc);

(vi)Laminating document ; (vii)Ms office tutorial training; (viii)Binding service; (ix) Photocopy; (x) faxing

service; (xi) Selling USB and (xii) mini coffee and soft drinks. (xiii) Online voucher (Phone cards,

Mobile voucher, World top up) as well as T-mobile, and Vodafone. SCG.NET target market consist of

market segment of the following: (I) kids student, (2) Single mothers, (3) Business elite, (4) Adult and

leisure, (5) Ms Office tutorial trainees. The total amount of finance estimated for the establishment of

the business is calculated to be or roughly £15,000 for the purchase of PC, chairs and table photocopy

m/c, binding m/c, laminator, fax m/c. The term of 5years or preferably 10years for repayment period of

any investment loan however, a little amount of £2,000 will be invested by me. This has been set as a

running cost for the café.

AIM, OBJECTIVE AND VISON

Aims of SCG.net

1. The aim of SCG.net venturing into net café has always been something I aspire to do in life.

Management system approach and ability to plan, coordinate and organize a management

tasks is one that characterized my business ethics, which I am convince that it will surely

worked out. In the world we lived, working for organization with one expertise skill has never

been so easy and rewarding in terms of jobs security and flexibility. Likewise, as company

turnover sales doubled every year the salary and wages stay the same (or as the revenue of

the company rises at a geometric progression, the staff salary/ wages tends to move in

arithmetic regression .(i.e. uncertain and unguaranteed). Thus, my orientation changes and the

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question was, ‘’why not get your business floated up and start running ‘’ my management skills

and ability to pioneer a business has been a key factors that drives me going into the business.

2. The purpose is to start small, and grow big, strong and build up reputation with an increasing

customer- staff relationship database and become successful by opening more shops and

building a rewarding and strong brand equity that will earn customer’s loyalty and retention. My

unrelenting ability to think constructively and strategically with diverse techniques to achieve

success in projecting the business forward has always been my target and goals for quite a

long time.

3. The business however will supplement my main income for sometimes when its start picking

up and grow to a maturity stage where confidence and reality are dictating the pace of the

business. Subsequently, as it fully becomes integrated, the business will completely replaced

my main income. This is very vital to assist effective and proper management of the business. I

will equally start the business as an investment by selling as soon as possible, since that is the

reason behind its setting up. The strategy therefore focuses on maximizing the potential and

values quickly to get the best selling price possible.

4. Presently, the business is starting small. This is so, as to minimize risk of failure due to

overhead cost, and unforeseen contingency. Thus, the business is never at the moment set up

to cater or provide jobs for family members.

Business Vision

The vision for SCG.net internet café is to see that its performs better both financially and socially,

outsmarting other leading cybercafé in the neighborhood (local and urban). The challenge is to strife to

be unique in our selling proposition and service offers. A long lasting strategy that I envisage will work

better for the business. This includes differentiating the brand; services; and ways I interact with

existing and new customer; setting up a competitive price war, notably psychology pricing techniques,

seasonal pricing or promotional pricing. Also, a prestige pricing will be considered for some product

depending on the spending spree of the customers. (Some of this cross selling product / service -

USB, earphone, training of Ms office, rent age from corporate bodies) our unique position is to be a

world class internet café with strong reputation, customer relationship management, clean and

hygiene environment and installation of quality and high speed tech- internet with a lower cost

printing charge.

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Business Objectives

SCG.NET’S objective for the first two year will be:-

The proliferation of a unique, friendly and hygienic environment that distinguished

SCG.net from local net café.

To invest huge amount of time and planning strategy that works using a competitors

analysis frame work and feedback questionnaires and histogram survey from

secondary data.

To consider all customers alike and ensure customer needs are met in an acceptable

manner.

Good coffee and internet access to resources and other online service at an

affordable, reasonable and competitive price.

The formation of an environment that will bring people from diverse interest and social

background together in a common atmosphere.

To treat all the customers like a valuable asset and act fast on any of their complaints.

To examine the prospect and profitability of the business at all time and employ the

use of management principle as the turning point (if applicable or the need arise)

To arise to the intense demand of customers if the occasion call for. For instance,

addition of PCs (hence increase in Number of PC available)

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These business objective highlighted is the step process towards actualisation of the

business goals (notably, exceeding profit –margin i.e. where profit outgrow the break-even

point)

BUSINESS DESCRIPTION AND PURPOSE

1. The nature of the business and what exactly will do ranging from the use of internet browsing;

office work using the( ms office excel, power point etc) the utilization of LAN gaming for kids,

printing service both black and colour, binding work from customer, lamination of document,

typing service, ms office tutorial training or web business training program hiring of SCG.net

internet café from company or individual for interview and online test or video conference (e.g.

Skype etc)fax service , RIA money transfer, phone card voucher, U S B. All these up market

service is aim at offering commodity to discerning customers in an intimate or close setting.

2. SCG.net product and service will be differs from these offered by the same competitors in

several ways-

(i) Differentiating our brand >consulting

> Assistance

> Quick printing

(ii) Offering a customized system of service, using a unique approach and methodology

in rendering services.

(iii) Putting on-selling and cross-selling product amongst our range of product and using a

unique selling proposition.

(iv) Customers focus and low cost products that are at a reasonable price. (Probably as

time goes, the inclusion of luxury cost products might added)

(v) Positioning in a location that is strategically vibrant for net café.

(vi) Using network marketing strategy e.g. word of mouth, leaflet, social media, and

Google ad words.

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(vii) Using blue ocean strategy analysis (i.e. reduce –raise – eliminate-- create frame work)

that will be perfect to helped shaping the way will complete.

(viii) Low cost leader with a relative pricing system like 30 minutes for 40 pence, 1hr for

80pence.

3. More so, there is a more pressing issues of concern as to why would customers want to

patronise SCG.net. This issue has been dealt with already. The following reason outlines the

techniques to bring new and retained existing customers—

(a) Educating the community as a whole, on what the internet has to offer them.

(b) Promotional contest-- where every months, there will be a review that will show the number of

the first three customers that use the SCG. Net internet café most. These first three customers

will be offer £5 vouchers.

(c) Discounting method where a customer print 20 copies will pay £1.50p and more than 20 copies

well. (i.e. for a copy cost 7 pence)

(d) The first five (5) people to come will browse free for 30 minutes and subsequent hours will be

charge.

(e) The use of freebies – where toys will be given to kids, classes or small gifts, key holders, small

purse or picture frame. And the freebies will often be change occasionally to offer something

looking different and new with excitement! (or give out smile phone cards free)

4. The core purpose is to offer internet café service and the target audiences are student office

and business class, kids, adolescent and adults and company.

Student Course work

Kid’s Games

Office Excel, Ms Doc, etc

Adolescent Face book, youtube

Adult Skype, etc

Single mother Browsing and Printing (3 baby sitters’ chair)

Company Rent age

Leisure Ms Office tutorial trainin

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Our Mission Statement

As the growing popularity of internet usage continues to sky rocketed as an integral part of our

lives, easy and affordable access is quickly becoming a necessity of the day. SCG.Net offers the

neighborhood with the ability to access the internet faster, enjoy a relax and friendly environment and

offering customers excellent values for their money. People from walks of life, of all ages and

background will come to enjoy a cup of coffee, and drinks while doing their transaction and share

internet experience in a unique and innovative atmosphere that SCG.Net provide

Keys to Success

The keys to the success for SCG.net are:-

The proliferation of a unique, hygienic and business oriented atmosphere that will distinguish

SCG.net from other contemporary internet cafes.

The establishment of SCG.NET as a neighborhood hub for business and networking apart

from socialization & entertainment that characterized involvement.

The creations of a friendly atmosphere that will assist the novice user; educate and inform

them the significant of internet usage.

The addition of coffee and drinks that would attract customers to the internet café to relax and

be comfortable.

Risks

The risks associated with startup SCG.Net are-:

1) Will there be an increasing demand for the service provided by SCG.Net in Sydenham?

2) Will the popularity of the internet continue to grow, or is the internet a fad?

3) Will individual or corporate bodies be willing to pay for the service SCG.Net provider?

4) Will the cost of accessing the internet from home drop so significantly that there will not be a

market for internet cafes such as SCG.Net.

5) Will corporate bodies be willing to rent or hire SCG.Net internet café for their personal use?

6) Will socio—economical inference of the political elite disrupts the purchasing power of the

consumers that will likely have drastic effect on internet cafes as a whole.

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LEGAL STATUS AND LICENCES

The legal status of our business is the intention to be a sole trader. The purpose is to less the

impact of liability that might result from huge expenses and involve large capital for setting up. This is

chosen as the most appropriate legal status to meet impact on the cash flow.

MANAGEMENT PROCESSES

(1) Marketing and sales :

Marketing technique that SCG.net internet café will employ would revolve round a strategic

cycle known as networking system. My networking marketing skills will involve aggressive

marketing, word of mouth, use of leaflet and sign post and the use of business cards as a point

of contact to established relationship marketing with the customers. Under the sales

techniques, this will involve the use of promotional items like sim card, ear phone and phone

cards (cobra, talk home uni-Africa, unitel). This will be an additional sale to the business

helping to boost overall revenue.

(2) Finance :

SCG.net finance will come mostly from my savings and my investment. Also the finance will

equally comes from small loans approximately £10,000 in estimate, with a relatively low and

comparative interest rate charge monthly. This sort of finance could be split into two lenders--

Lenders

Range

A B Total Amounts

Max £5,000 £5,000 £10,000

Min £3,000 £ 3,000 £6,000

RECRUITING AND STAFFING

Since the business is one man show (i.e. sole trader). There is no recruitment and staffing at the

moment. In the future as the business grow in term of market share and growth revenue, share capital

and capitalized opportunity. It will embark on recruitment and staffing processes to enable expansion

of the business to other strategic locations, where there is demographic population shift.

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PRODUCT DEVELOPMENT OR PRODUCT SOURCING

As a business, SCG.net doesn’t do with product development but as of product sourcing, yes the

business can in later future as the business growth. I can include a product sourcing into the business

where the increasing demand is highly intensive and there is a huge need for the products in the

market. This will be done from customer’s interaction & perspective, qualitative customer survey

issued by business guru or business update.

GENERAL MANAGEMENT : (O & T= Objective & Target)

As a sole trader, I will be in position of a General Manager, to foresee the day-to-day running of

the business to ensure that its maximize profit and the operation is efficient and there is transaction

recorded in term of preparing the balance sheet as well as P & L account is maintained. The utilization

of master file will be considered along with transaction file. The significant of GM is vital to forestall

areas of operation, functionality, man powering, customer acquisition & retention and marketing &

sales. Also in the aspect of sales forecasting, this is the key drivers that drives the business for

meaningful growth & development. However business performance will be monitor against the

objective & target by (1) using the performance as a measure of O & T; by (2) using a KPI to verify the

viability of the O & T; (3) using business performance appraisal to cross-examine the O & T with the

outstanding performance (4) using SCG.net win-win strategy framework to analyse how well the

business is meeting O & T in term of its performance role played in the past three months preferably

(1) High performance= meet O & T

<

Low performance =/= O & T

(2) See KPI text format

(3) Business performance appraisal

(4) Win-Win strategy

SWOT analysis

3P’s –People, Philosophy & Product

What if scenario

Exit strategy ( selling the internet café for £55,000)

C>R>A strategy

Administration

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The administration at SCG.net is writing & documentation of every paper work, transaction &

processes for future business reference. This includes-

Open to enquiry

Open to query

Assisting customers

Taking a holistic approach to business solving problems

Managing principles

Realisation of goals & objectives

Meeting Business Target

Ensuring customer’s satisfaction

Taking customer’s feedback

Acting on customer’s feedback Using C>R>A techniques

Documentation & Database Management

MARKETING STRATEGY

Initial Marketing Target

The initial target market are the students, intends to use the internet for their typing work, course

assignment and browsing information relevant to their core discipline in the area of their field of study;

the kids, that intends to make use of the game application for leisure and relaxation with their peer

groups; the adolescent, who intends to hang out with friends to chat with colleagues abroad using

chatting website such like face book or any social media; the business elite- that want to linked up with

clients using Skype, linked-in & twitters or tele-conference or video-conference; the single mothers;

the adults & disable bodies for either self-online like watching films, e-sport and doing test on-line (e.g.

driving lesson etc) as well as tutorial course or on-line class tutorial with CD/DVD; the corporate

bodies- intends for rent-age use.

Market Size

The market size for the internet café is vast and expanding in an alarming rate. With the advent of

typical net cafes, Wi-Fi internet hotspots in pubs, coffee café and restaurants across the U.K as well

as public library offering free internet have made it increasingly difficult to provide internet facilities at a

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reasonable price to charge customers. But at SCG.net, the market is not that formidable to the growth

strategy will have in place. The business is structured to realistically achieve market shares of 60% as

an initial start and 80% as its fully grow up to a strategic maturity stage, given the conditions that the

marketing strategy are properly aligned and executed to its fullness. The use of a high number of

computers, high-speed internet access & com-residential strategic location and strict user policy

agreement that customers must agree before using the internet, which involves prohibited site and

monitoring malicious acts, will be an integral part of securing and friendly atmosphere that the users

will enjoy which are not considered in any free internet services.

SCG.Net Potential Competitors

Local, Urban and Regional cyber cafe

Coffee & Restaurant Shops

Pubs with free Wi-Fi

Public Library with free internet access & Wi-Fi

Internet service Provider that offers low charge

The products & service or particular deals SCG.net will offer to the esteemed customers’ are-

Cards; (phone, voucher and sim)

Earphone

Browsing (Internet Access)

Typing Service

CD/DVD

Printing Service

LAN Gaming

Consultant Service

Ms office Tutorial Training

The unique selling proposition at SCG.net is that it is not just internet café but it’s to sell information

& configures the mindset of the customers on the significant use of internet for business. It is a friendly

environment, reliable and providing quality service that makes SCG.net customers feel more like

home and relax to enjoy what they are doing with a plasma TV showing news update. This thus,

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differentiates our cybercafé from the rest, since majority of internet café never do this. Many of which

only open café for use and nothing more than that!

At SCG.net internet café, the expectation is that a market share of 60% is projected for the

business with a massive and aggressive marketing strategy in place. In the six months period of trial

and business probation time scale, the business hope to achieve this target fully, since business takes

a formidable step process to pick up. However, the reason why SCG.Net chose this market first, is

because it has been targeted as a niche market. Since the finding outcomes shows that multifarious

cyber cafe owners never understand the business and they equally lack business strategy to move the

business to a higher level. Therefore, SCG.net takes it up and adds lots of professionalism and

business ethical standards to make it better off and stand out! That’s why the brand name SCG.Net

internet cafe is best suited (SCG.net means SOBEX CONSULTING GROUP. NET)

In the hope of future reference, SCG.net intends to target corporate bodies and multinational

organization where a set of unique feature for the internet and PC will be upgrade to cope with

massive conference; meeting and interviews with their clients or candidate; seminars and symposium

etc. This S C G. net looked forward to in a space of 5 years time where area of diversification might be

in A T M and P C repairs and maintenance. In five (5) years, the firm long-term goals will be in a total

annual sale of £75,000 with a 30% pre-tax profit and an overall turnover of £125,000 from projected

incomes.

Marketing Plan

The marketing plan for this business, involves a methods that several cyber cafe never care to use.

This technique involves creating an awesome and dynamic system approach known, as structural

aggressive marketing port folio. The whole concept is letting people knows what we do and how we do

it differently from our rivalry. The use of leaflet; word of mouths; use of business cards, the use of

business photo album to show location and core competences; and the use of video demo to show

and illustrate S C G. net unique selling proposition and expert experience in the world of cyber cafe.

The interest is to go at length to convince people near and far unrelenting and with strong motive to

persuade them and assure value return for their money if they patronize S C G. net. A Time scale in

the form of Gnatt chart will record each marketing activity (see figure 1)

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Figure 1

GNATT CHART FOR MARKETING ACTIVITY

STRUTURED AGGRESIVE

MARKET PENETRATION

PRICING TECHNIQU E

TURNOVER

Marketing

Activity(s)

Weeks

Product

Campaign

Market

Development

Promotion

Contest

Word of Mouth Number of Customer Turnover Effect

1 two

2 five

3 three

4 two

5 four

6 four

7 five

8 two

9 three

10 six

There are several number of people that the business is intends to use to accomplished this

intensive publicity, notably friends, family and colleagues and interest groups. The estimated costs to

undertake a particular marketing activity will roughly be £100 per month along side with logistic and

holistic system. The progress of the market activities will be monitor and review using customer-

turnover effect ratio and the utilization of Gnatt charts and histogram.

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CUSTOMERS – TURNOVER EFFECT RATIO

CTER = New customers x 100%

Existing customers

= 2 = 1: 5 (20%) (Market Activity for Week 1)

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= 4 = 1: 3 (33%) (Market Activity for Week 2)

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Conversely, the response to the marketing will be handling by opening up to series of question

from the customers, by improving the services in line with the existing and new demands. The new

demand is something the customers expect to find in the cyber cafe, but never there. If the new

demands takes an up toils, then the business will look for a test run products to be included to see

how the responds is, enabling a more response to customers preference and needs.

In order to manage the overall marketing plan S C G. net has the following-- The 4 P’s (a).

Product. (Considering how durable it is in the market); (b). Price (price war competition); (c).

Promotion. (Contest, and discount); (d). Place (commercial 40% residential 60%).

More so, the entire budget plan will be consider in the following—(1), ensuring it is not spent too

early, (2) lowing expenses; (3) timing expenses; (4) early selling and late close ( an opening hour of 6

am and closing till 10:30 pm)

Monitoring results will be in the following--

C.T. E. R (Customers-Turnover Effect Ratio)

Profit and Loss analysis

Breakeven analysis

Price elasticity of demand / supply.

Adjusting the plan will be in the following:-

18

1) New technique introduce

2) Change in objectives and goals

3) Change in brand equity

4) Product sourcing ad induction

5) Market orientation Change

6) Marketing plan paradigm shift

7) Overall review of business and marketing strategy

FINANCIAL REQUIREMENT AND FINANCIAL FORECASTS

The cost of starting the business is not that which is a lump sum of money, but the detailed of all the

cost of materials needed are highlighted below:

Bench mark = profit for 13 Number of PCs (£3,600 per annum)

START UP SUMMARY

S/N Start up cost Quantity Amount (£)

1 No of pc (mouse, keyboard ) 20 2,400

2 Lighting (charging /month) 100

3 Table and chair 3,500

4 Photocopy m/c 1 1,200

5 Back up photocopy m/c 1 500

6 Laminator 1 200

7 Fax m/c 1 450

8 Virgin( B W B) ( charge/ month) 65

9 Accommodation 650

10 Cards and Sims 500

11 Fixture/ renovation 1500

12 Plasma TV 1 600

13 Waiting Seater (double sitting) 1 450

14 Other accessories (earphone and Stationeries multiple U S B and baby sitters)

400

Total startup = £12,520

19

BALANCE SHEET FOR SCG.NET INTERNAT CAFE

Year 1 Year2

CURRENT ASSET £ (Amount) £ (Amount)

Petty cash 500 500

Stock (investment) 450 550

Debtors --- ----

Cash in bank (holiday pay) 1,000 7, 000

Lender/ bank loans 10,000 15,000

Credit liquidity 10,600 10,000

Over draft ---- -----

LONG – TERM ASSETS

Property/land ---- ----

Car/ Vehicle ---- -----

Accumulated depreciation ---- -----

Other long term asset ----- -----

CURRENT LIABILITIES

Bank charges 4,200 4,800

Over draft (interest) charge

Credit interest rate (£11.50/month) 130 160

Invoice receivable (PC) 2,400 3,000

{ Overhead (Rent/light/virgin}

{ Fixed over head} 10, 680 10,600

Net Assets = £ 5,132 £ 8,490__________________

Suggested Net Assets = £ 5,000 £10,000 =============================================================================

Financed By

Share holder capital 10, 500 14,750

20

Retained profit 5,368 6,260

Total capital £ 5,132 £ 8,490

--------------------------------------------------------------------------------------------------------------------------

FINANCIAL RATIO FORECAST

(I) Current ratio = Current Assets

Current liabilities

(C. R shows the ability of a firm to services its debt)

C. R = 22,550

17,418

= 1. 29

= 1. 3 (C .R >1) is good

(II) Quick ratio = Current Assets – stocks

Current liabilities

= 22550 - 450

17, 418

= 1.26

= 1. 3 (> 1) is ok

(III) ROCE

(Return on Capital Employed)

= Net profit before tax x 100%

Total Assets - Current liabilities

= 215 x 100%

5,132

21

= 4%.

(ROCE shows how the money invested in the business is working for the shareholders or owner.)

SCG.NET START UP INITIAL CAPITAL

22

START UP COSTS QTY LOW HIGH

Amount Amount

No of pc (mouse and keyboard) 20 2,800 3,000

Utility (lighting and phone) deposit - 100 150

Table and chairs 20 3,000 3,500

License and permits 100 300

Insurance (1st quarter payment) 150 250

Photocopy m/c 1 1,200 1,800

Back photocopy m/c 1 500 650

Laminator 1 150 250

Fax machine 450 600

Rent (1st payment and deposit 1,000 1,500

Virgin (wireless brand) 45 60

CARDS purchase (Sims vouchers) 300 450

Hire van/ lab our/transport 450 500

Fixtures /renovation/shelving) 2,000 2,450

Plasma TV 1 600 650

Waiting Seaters (double) 1 450 550

Other accessories (earphone and PC

multiple USB connectors and 2 or 3 of

No. of baby sitters, Stationeries and USB)

500 600

Local marketing awareness and advertising.

150 180

TOTAL START UP CAPITAL/EXPENSE

£13,795 £17,210

Suggested operating capital £10,000 £15,000

MONTHLY OPERATING COSTS LOW HIGH

Amount Amount

Pay roll ------- ------

Owner salary 1,000 1,500

Rent/ lease 92,500) 600 750

Utility and phone 150 200

Advertising/ market awareness 100 150

Depreciation ----- ------

Printing and stationeries 150 200

Insurance 150 200

Maintenance (PC) 150 250

Stock incensory/ contingency 350 400

Debt financing 550 600

Miscellaneous 100 150

Virgin broad land 45 60

TOTAL OPERATING COST £3,395 £4,460

Anticipated sales/ turnover/ revenue £8,455 £10,800

Net profit before tax, monthly £5,060 £6, 340

Net profit before tax, annually £60, 720 £76,080

23

PROFIT AND LOSS FORECAST FOR SCG.NET .

Receipt

Monthly (1st) Monthly (2nd)

APRIL MAY

Budget Actual Budget Actual

(a) sales/ revenue 8,455 8,350 8,400 8,800

Less : direct costs

Cost of materials (P C)

Wages

2,800 3,000 2,400 2,600

1,000 850 980 900

Gross profit (b) 4,655 4,500 5,020 6,300

Gross profit margin

(b/c x 100%)

55.0 53.9

Overhead

Salaries(owner)

Rent/ rate/water

Printing/postage

Stationery

Bus/ transport fee

Internet service charge

Insurance

Repairs/maintenance

Renewals

Heating/ lighting/power

Telephone

Depreciation

Bank charge

Lender=(1) and (2)

Marketing

1,000 950 1,500 1,000

660 700 660 700

200 180 ------- --------

600 550 600 500

50 65 45 60

200 150 200 150

500 400 500 450

180 220 100 120

200 ----- ------ -------

------ ------- ------- --------

450

100

500

150

500

100

500

100

24

Awareness/Advertisement

Drawings/other

Expenses

300 320 350 400

TOTAL OVERHEAD (c) 4,440 4,185 4,555 3,980

Trading profit (b) 215 315 465 1,320

Interest charge ----- ----- ----- ------

Net profit charge before Tax 215 315 465 1,320

Cumulative Net Profit before tax

215 315 680 1,635

MONTHLY CASHFLOW FORECAST

1. Cash on Progress Month 1 Month2 Month3

(Beginning of the month)/ --- --- ---

Cash from operations

2. Income

Cash Revenue 8,400 8,400 8,355

Collection from credit account 11,000 --- ---

Loans or other cash injection 10,000 --- ---

3. Additional Cash Received

Non Operating (other) income 500 450 550

25

Tax incurred 15 80 250

Net profit £215 £300 £385 £1070

Net profit/sales 2.54% 3.599% 4.50% 12.2%

New Current Borrowing 5,000 ----- ----

Savings / New Investment Received 20 40 60

Debtors ---- --- ---

VAT ---- ----- ----

Owners (£1,500 from

Holiday Pay Entitlement) 1,500 ----- -----

TOTAL CASH Available (1+ 2+3) 34,920 8,990 8,965

4. Outgoing/Expenditures

Materials 2,600 ----- ----

Wages 1,000 ----- -----

Rent 660 660 660

Lighting/Power/Heating 200 --- 200

Insurance 200 ---- -----

Stationery/Printing 250 ---- 200

Telephone 200 ---- 150

Loan repayment 450 450 450

Interest --- --- ----

Maintenance /Repairs 100 --- 100

VAT ---- ---- ----

Advertising 100 100

Travel 600 600 600

Salary/Drawings 1,000 1,000 1,000

Outside service ---- ---- ---

Internet service 45 45 45

Accounting and Legal ---- ---- ---

Tax ---- ---- ----

Principal Repayment of

Current Borrowing 217 217 217

Other start up cost/Expense --- ---- ---

26

Software license 100 100 100

TOTAL EXPENDITURE = £ 7,722 £ 3,072 £ 3,822

Net cash flow £27,198 £ 5,918 £ 5,143

ANALYSIS SUMMARY: Explanation

Cross Profit for 13 Numbers of PC for Months

= £3,600 (Data from Cybercafé Sydenham)

(Abdullahi 2012)

= £900 / week

= 140 /day.

That means 13 Numbers of PC = £140 (1 day)

1 Number of PC = £140 x 1

13

= £10 (1 day.)

From a critical perspective, there will be generally an economic index effect on the business based

on inflation, recession, fluctuation of the market trends, low employment rate. Thus the combination of

the marketing strategy to employ is highlighted as shown below. SCG.net presumes a total of 10 or

more for each PC along with Photocopy, Fax etc. Possibly for 10 PC, a total of 10 Number of PC =

£130/ day or > £130/ day. Averaging = £150 for a day (Estimated)

27

Market Growth Rate for SCG.NET

110

150123 135

200 190

100

0

50

100

150

200

250

Mon Tue

Wed

Thur

FriSat

Sun

Days

£/ day

s

Mon

Tue

Wed

Thur

Fri

Sat

SUN

Figure 2

More so, Fax m/c photocopy m/c, mobile voucher and sim, consulting (business) etc are going to boost the profit margin)

For months 10 No of PC = £ (150 x 7 x 4)

= £4,200

Approximately, £10,000 capital investment is required to start up running the business. As the internet cafe business pick up £5,000 loan cash will be added in the form of debt financing from potential lender(s). This will therefore make a total capital acquisition becomes £15,000

Overall Expense to set up = £13,795

= £13,000 (Approx)

After the set up done and the S C G.net internet cafe is flag up running efficiently.

Estimated turnover = £4,200 for a month.

Operating Expenses = Normal running cost and debt financing

= £ 3,395

Net worth = Estimated turnover - Operating Expense

=£ ({4, 200 x 2} --- 3,395)

= £5,005

Hence, Net worth for 20 Number of PC =£ 5,000

28

WHAT IF SCENARIO FOR S C G. NET

Given the down turn effect of economic, where the economic is heated up with great recession, high unemployment rate, and lower level of purchasing power of the customer or, saturated market.

Considering the No. 1 of PC makes £2

10 Number of PC 20 for day

Estimated turnover = £ (20 x 7 x 4)

Estimated turnover =£560 for a month (10 Number of PC)

For 20 Number of PC =£ 1,120 for a month

Net worth = Estimated turnover - Fixed overhead.

(Fixed overhead = Rent, Utility, Debt financing and Broadband)

Therefore, net worth = £ (1,120 – 1,395)

= £275 (Net loss)

PROBABILITY TO INCREASE SALES AND TURNOVER

For speedy recovery with a net worth of £275, SCG.net considered two options—

(i) Increasing the sales upwards

(ii) Down sizing

Increasing the sales upward

(a) Add more computers

(b) Add a value product. For instance, the inclusion of (1) Fish pedicure and manicure where £10

is charged for 15 minutes; £20 is charge for 25 minutes; £30 is charge for 40 minutes; (2)

Massage chair.

(c) Upgrade the PC and inclusion of better features

(d) Intensify aggressive marketing network

(e) Diversifying by purchasing an internet cafe

Down sizing

Scouting for more spacious area but cheaper rent

Renegotiate the rent for reduced price

Increase price a bit higher

Remortgage part of the shop

Sell off the business to a prospective buyer at a price hire than the start up cost at a market

price value (£55,000)

29

BREAKEVEN ANALYSIS: The Cost-Volume-Profit Model

£ Cost

(Sale)

Figure 3. Monthly Breakeven Point. Quantity

(Output volume)

(Breakeven point ----- where the line intersect with Zero)

Table: Breakeven Analysis

Breakeven Analysis: __________________ _£ (Amount) _______________________

Monthly units breakeven = 6970

Monthly Revenue Breakeven = 3500

Assumptions: ______________________ _£ (Amount) _______________________

Actual variable cost = 6400

Estimated monthly variable cost = 1000

Average per--- unit variable cost = 0.156

Average per – unit Revenue = 0.500

Estimated monthly fixed cost = 2,395

Summary: Breakeven calculation________________________________________________

Estimated monthly fixed cost = (owner’s salary + rent + utility +

Debt financing+ I S P (Broad band)

=£ (1,000 +650 + 150 +550 +45)

Estimated monthly fixed cost = £2,395

30

Average per – unit variable cost = Estimated monthly V. C

Actual V.C

= £1,000 X £ (1)

£6,400

= £0.156

(Actual variable cost = cost of pc purchase + labour and transport + table and Chair)

= £ (2,400 + 1,000 + 3,000) = £6,400)

Contribution margin =£ (0.500 –0.156)

= 0.344

Breakeven = FIXED COST

CONTRIBUTION MARGIN

= 2,395

0.344

= 6962

= 6,960 (Approx)

This means that SCG.net must have 6,960 users for a month. However, the internet cafe will operate

from Monday to Sunday, and open each day from 6:00am till 10:00 pm as closing time. That is 7 days

a week, 16 hours a day

Therefore, 7 days a week, 16 hours = 7 x 16 x 4

= 448

= 450 hours / month.

The number of users for an hour = 6,960

450

= 15.5

= 16 (Approx)

31

This suggests that a total guess of 16 Number of PC is okay. But SCG.net internet cafe uses 20

Number of PC which equally suggest that if 20 customers occupy all the computers for an hour. It

shows that S C G.net will have 9,000 users for a month.

That is 20 x 450 =9,000 users/ month.

Hence, the monthly revenue = 9, 000 x 0.5

= £4,500

Whist, the monthly revenue breakeven = 6,960 x 0.5

= £3,500 (Approx)

Thus the margin of safety = current output -breakeven

= (current output - breakeven output)

= £ (4,500 - 3,500)

= £ 1,000

Margin of safety expressed in %

= current output -breakeven output x 100 %

current output

= 1,000 x 100%

4,500

= 22%

(Margin of safety represents the strength of the business. It enables the business to know what the

exact amount it has gained or lost and whether they are over or below the breakeven point). The likely

question is that; does this seem feasible? At S C G. net, this is assumed not and so some options are

evaluated as followings.

32

(I) CUTTING EXPENSES: Both fixed and variable cost:

SCG.net internet cafe is still in the planning stage and experience has shown that prospective

entrepreneurs almost or always underestimate expenses. Hence, the intention is to renegotiate rent

and scout for a strategy location with a comparatively low renting fee considered. Also keeping better

control of telephone bills, internet service provider or other costs. Switching cost will equally be one of

the things S C G. net will considered to help reduce or cut costs. More so, looking for new supplies

readily interested to part with reduced cost in terms of stationery, table and chair, maintenance,

advertising, insurance and internet service provides as well as P C and its accessories. This will be

done online, for instance eBay and Google, Amazon, PC words etc. and offline such as retail shop

(selling chair and table).

(II) RAISING PRICES:

The price of the following might be raised-

A4 photocopy 10 instead 7p

Fax from £1 to £1.20

Hot drinks from £1 to £1.50

Laminating document price change for 15p increment

Tutorial class on Ms Training & Rent age for corporate bodies.

(III) ADDITION OF MORE PC:

Addition of more PC will help increase the profit margin. This will also increase the Number of customers & demands for more availability of PC from new customers.

Assuming an extra 5 Number of pc is added.

A total number of computer = 25

That means 25 x 450 = 11,750 users /month.

An incremental factor of 2,250 users for a month

The monthly revenue (which is the current output)

= 11,250 x 0.5

= £ 5,625

(Margin of safety = £2,125 (0r 37.8%))

The intention of this calculation is that by the time the business survived for 2 or 3 years, it will

diversify and move on to another large strategy location; where two or more individual will be recruited

and trained to become an internet cafe managers.

33

(IV) IMPROVE MARKETING NETWORK

To help increase sales or turnover, massive marketing campaign using social media, word of

mouth, leaflet and aggressive marketing persuasion with promotional strategy that shows the

discounting pricing, relative competitive pricing position etc. This will also help increase the gross profit

margin (GPM)

From the P&L forecast,

The budgeted sales for 20 Number of PC = £8,455

Cost of sales budgeted = £3,800

Gross Profit = £4,655

GPM = 4,655 x 100% = 55%

8,455

In other words for every £100 of sales/turnover, S C G.net should make 55% of gross profit. So, if

the sales goes up to £9,500 as a result of the improve market network, then the expected gross profit

will be £9, 500 x 55% = £5,225 compared to the previous gross profit of £4,655. However, in real life it

isn’t that quite simple but the GPM is a good guide for SCG.net as to how profitable the business

could be. And it is one of the vital variables that can be control in order to make the business viable.

(V) CONSIDERATION OF KEY CRITAL FACTORS

Changing to a new technology innovation (i.e. new Microsoft software & hardware) Strategy location irrespective of the rent Emphasis on the importance/ use of internet. The use of 4P’S

i. Promotion ---- (contest, vouchers, freebies)

ii. Place --- (population shift of internet users)

iii. Product service --- (fast internet broad band)

iv. Price ---- (depending on economic trends)

Changing the strategic plan

CRITICISM FOR THE BUSINESS

1, THE RENT - The difficulty of negotiation is optional and the value to the business is absolutely

relevant and significant irrespective of the rent or leasing. Although a comparative of different renting

can be considered.

2, THE FEAR OF UNKNOWN – The fear of unknown is one aspect that has been a criticism of the

business. This is an issue that has been considered and the business strategy to employ by SCG.net

will assist greatly to overcome this fear.

34

OPERATIONAL REQUIREMENT

Operational plan- into-action strategy

This is the strategy that explains what SCG.net will do to make things happen in the business. The

following are what it is needed by the organization to turn the operational plan into action:-

Taking a leadership role in the world of internet cafe using a low cost leadership technique to

attract and retain new and existing customers.

Offering value service for the business so that every customers we have a feel of sense of

belongings.

Using strategic policy to turn management theories into practical management process.

Setting a competitive price and strike for be the best by changing the way the business is been

runned.

Treating customers alike and taking an holistic approach to management (i.e. if it worth

business doing at all, it worth the time and strategy input)

At SCG. Net professionalism is strictly considered for the business (i.e. being professional on

the job)

Setting up target and working towards it using a viable marketing machinery

Building a long lasting and trusted relationship with the customers by way of friendly service,

hygienic environment and readiness to assist customers when needs arise.

Updated system and best of networking facilities will be ensure for effective business growth.

Keeping the problems solving techniques readily available to ensure customers don’t face the

difficulties.

35

Detail Operational Requirements for the Internet cafe that are

Relevant/ or will be consider for its Sustainability

The use of business models. The three business models to be use focused on basic

connection; selection of location and using a friendly environment.

The use of Market Analysis through advertising, marketing campaign and publicity. This will

intensively create a suitable awareness for range of product, and service rendered at SCG.net

and different it from a typical or traditional internet cafe.

Book recording of all transaction made to the business will be done and kept for future

reference and review, The recording will involved book- keeping , P and L account, cash flow

statement and balance sheet.

Determine the target market with regards to population shift, customers’ preference and

behaviors and changing needs.

In spite of this, there are so many factors that affect the like hood of success in the internet cafe industry. As part of SCG.net operational requirement detailing, it will entails:-

(a) LOCATION: The location of the business will be highly considered in term of setting up in a good

spot, preferably 70% residential and 30% commercial areas. This is structured because of the

time the SCG.net open and closed for the day (i.e. 6.00am – 10: 00pm). The reason again is that

commercial areas attract people from walks of life while the residential are even better-off with the

intention to cut cost, can quickly turn up to a cyber cafe to use the internet for at least three hours

or more and at most six hours depending on the nature of their intention.

(b) COMPETITION: This will be considered, since there are set of businesses that are competing for

the market shares in the industry. A competitor’s analysis will be review every three months to help

improve the turnover of the business. A competitor’s analysis is looking at what the competitors

are doing to gain more market shares which many internet cafes are not considered. This could be

sorted from customer’s feedback, secondary data or business update.

(c) SPEED OF CONNECTIVITY: The quality and consistency of broadband connectivity will be

improved. This will be done by going for an upgrade for better and high tech speed internet service

so that the customers can enjoy their browsing and thus, build customer loyalty and retention of

customers.

36

(d) SOFTWARE LICENSING : The soft wares that needs licenses are:

(I) Microsoft OS(II) Anti-virus (III) LAN games, office(IV) Any software that require a product key

This is very essential and will be considered for suitability and smooth operation of the business.

(e) EXPECTED ROI : Although previous half decade old records saw a return -of- investment in just

over a year, lower rentals due to fierce competition and over saturation of net cafes have driven

the ROI further back to a far crying point as long as three(3)years. Therefore, the expected ROI

for the cyber cafe will be calculated and compare with the actual ROI to help seek ways to meet up

with the targeted ROI.

(f) AVAILIABILITY OF PC: There is also the question of low many PC units should a net café operate

in order to realise profit. A friend, who runs a net café for three years now, says one needs at least

15 units PC to survive and get decent income. However, according to outstanding record

statement of yugatech (2011), envisage that the growth and development of net café is still a

viable business where good money can still be made. The question that then comes to the mind is:

“Given the opportunity and capital, does one feel it’s a lucrative business?” At SCG.net, it is a big

‘Yes’ from adverse analysis made and opinion gathered.

BUSINESS RISK

(1) Security Issues:

The security issue has often been a threat to the existence and establishment of internet café.

With lots of malicious activities going on in the internet world, the use of internet has therefore

been an issue of concern for businesses, individual involving in exchange and storing information

& data. At SCG.Net, the use of anti-virus, smart fire wall, anti-spam and online identity protection

will be installed in the entire PC available for the business use. Notably, Norton internet security

and ESET smart security 5. Also, information to create awareness for the customers will be put for

notification.

37

(2) Sudden Increase in Competition:

As business grows, there is always sudden increase in competition from rivalry. This rivalry

tends to make business becomes saturated and hopeless, with inability of business to meet up to

the targeted profit margin. The SCG.Net internet café strongly aware of the intense competition

and the way to take up the challenge is using a blue ocean strategy framework, or a turnaround

business idea strategy where the business change into another business entirely that customers

are willing to patronise and pay for the service. The use of business forecasting will be employ to

help in this area, “As no business is permanent since it revolves as customer’s needs changes”.

SWOT ANALYSIS FOR SCG.NET

STRENGTH

(1) Knowledgeable and friendly personality: This will entails giving assistant to customers alike

irrespective of whether the customers knows how to use the computer or not. The support will

always be there to help them achieve their goals for coming into the net café.

(2) Start up cost of equipment: At SCG. Net internet café, the use of high speed internet

connection, LCD monitors, RAM and good processor and with a compelling and challenging

competitive price that are affordable and sensible customers at all time.

(3) Upscale ambiance : Having friendly personality and high tech equipment is great for SCG.net

but its value will easily be overseen if it doesn’t have a friendly environment such like clean,

hygienic condition, cool area and comfortable to the customers. This will actually go well with

students, who do research work, report writing and assignment course work as well as disable

individuals and mothers. For mothers, babysitting chairs will be provided, roughly two or three

in numbers.

(4) Clear Vision of market needs: At point in time, the interest is to keep an update of what is

happening in the community, and also keep abreast of news update about the business and

the customers changing needs so as to be the first to offer new services. Being the first is

really a big advantage, since it will help identify the brand of the business, and thus build

customers loyalty and trust.

38

WEAKNESS

(a) Technology changes rapidly

(b) Socio – political influences on customers behaviour

(c) Cost of maintenance high and outdated software near future

(d) Cost factor linked with keeping state-of -art hardware.

The following weakness highlighted above is one amongst hardest things that internet café owners hesitate to do. And that is upgrading the HARDWARE because of its associated cost and unpredictable contingency relating to market trends. The best thing SCG.net intends to do is to set goal when to service or upgrade the computers (both software and hardware). This might be in a space of 3 or 5 years to help the business more focus and well planned.

OPPORTUNITY

(I) Rising population of daily internet users: With technology usefulness, its users will continue to

grow. That is fact. Therefore customers will keep multiplying if SCG.net keeps doing the right

thing for the business.

(II) Social bounds: Since internet is bringing people from across the world together unlike any

other communication medium. The intention is to provide good communication equipment such

as webcam and headset.

THREAT

(a) Falling cost of internet Access: The cost of access to the internet for home users is dropping rapidly.

As what can be seen (ISP) internet service provider offers wide options for home internet consumers

from prepaid to postpaid in various speed. But still there are millions who are not keen to add such

expenditures to their monthly bills. The reason is that, this development will not directly affect

internet café’s.

(b) Emerging local competitors: This is the most dangerous threat to SCG.net internet café. However to

overcome this, the business will concentrate on its strength and go extra miles to discover what the

competitors are doing. As what the old adage says; ’’you have got 50% chance to beat your rival if

you know your strength and not knowing his/her, but you got 100% chance to dismantle him if you

know his/her strength.

39

MARKET INFORMATION – PEST ANALYSIS

A. POLITICAL : The UK government has set itself the target of becoming, “the best environment in

the world to do e-commerce” CDTI, 1998 white paper, “our competitive future: building the

knowledge – driven economy”). The government recognizes the immense potential of the

internet as an enormous global phenomenon more than just a global library. The internet

could offer opportunities for all, providing resources and enhanced communication. According

to Tony Blair (2005), he is committed to e-government; and Ian Watmore (Whitehall’s chief

information officers) has said that he is more interested in getting people to use e-services to

ensure that every service goes online.” What we want to do next is to get high take–up and

high impact of service that really matter and which tough people lives”. With this fact, these

have created increasing number of people wanting to use internet everyday to access vast

information online.

B. ECONOMIC: It is often argued that we are living in the area of the ‘knowledge-based ‘or

‘information’ economy, yet little is known about what this actually means. The OECD state, ‘’

there is a clear tread in the OECD area towards a knowledge-based economy ‘’but what does

this actually means? Apparently, ‘’ as a range of new indicators show, the knowledge-intensity

of OECD economies is increasing. Investment in knowledge, particularly in R & D and

software, is rising, as investment in ICT.’’ The diffusion of information and communications

technology is a key enabler of the knowledge-based economy. As the OECD show, ‘’ access

to ICT has grown rapidly over the past years, while internet technologies are diffusing very

rapidly. According to the bank of England,’’ the internet lower search costs, and reduces

barriers to entry has helped shorten the supply chain. There features should help boost

productivity, lower profit margins and help cut the equilibrium of unemployment (NAIRU,

2011)”. So, according to the most influential economic institution, the internet and ICT will play

a key role in the economic future of the UK. The crucial reason, is that majority of people are

using internet access for business, e-commerce, online test and interview and tutorial class for

candidate. However, internet café’s are often sort after as the primary form of internet access

for citizens, as a shared–access model is more affordable than personal ownership of

equipment and/or software.

C. SOCIAL : There is a growing body of work which examines the way that the use of network

technology affects or might affect contemporary life. Much includes ideas such as electronic

commerce, government, exclusion and inclusion, and virtual communities However there is

often great interest in the points where IT use become public. The surveys shows that many

people access the internet in public spaces (60% in US spring 2010; 74% in UK survey, The

Guardian summer 2010). The huge uptake of free web based e-mail accounts also indicates

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that many people do not have their own internet access, or frequently access their email away

from their own computer. Whilst most cafes have to operate in the market, they are also social

centres they often offer a focus for a particular social group, or geographical community.

However not that the physical aspects are not relevant (i.e. decor, the drinks, the games etc),

but they are there to meditate, facilitate and lubricate the experiences and activities of people.

In contrast to the dominant trend, internet cafes are more than just technology access

centres, they are also café in the traditional sense. They are public spaces where many age-

old activities can be conducted, but mediated by modern technology. Internet cafés are also

point of learning, interactive and sharing information, the informal atmosphere makes it easier

to learn and to experiment. They are the human face of computers, internet technologies and

services that are frightening to many people. Local, cheap, community access seeing other

people using multimedia and non-expert help can all act as a trigger to bring someone across

the ‘use threshold.’ The technology itself, fast changing and new, needs this informal space in

order to be appropriated and domesticated into community life.

D. TECHNOLOGY : The nature of the computer industry has always been one of rapid change

and with the evolution of the internet; the pace of change has become even more rapid.

Coupled with the relatively high costs of production of computer hardware, this has meant that

expensive equipment is out of date quickly, making it difficult for the average home user to

keep up-to-date with the cutting edge of ICT. Broadband access in the UK is becoming more

wide spread. This ‘always on’ connectivity has helped to realise the internet as a true virtual

world. This means that the internet is fusing with all aspects of everyday life. Publicly

accessible ICT could play a part in bridging the gap to enable a fully integrated technological

future. Increasingly, some services are only available online, or are cheaper online. A specific

example from local government highlights the point. The local plan used to be available for the

public to buy at a cost of £100 since being made available online (for free), people can only

now get copies of it, not as a whole, but at a cost of £5 per A4 photocopy. This means that

availability has been reduced for those without access to the internet, whilst it’s a huge step

forward that it is accessible at no cost online. Hence, the gap between those with access to

ICT and those without widens.

In September 2004, the Pew internet project conducted research titled, ‘’the future of the

internet”. In the survey, technology experts and scholars evaluate where the network is

headed in the next ten years. The results highlighted a variety of directions and expectations.

Firstly, there was little disagreement among experts that broadband adoption will grow and that

broadband speeds will improve. Nor was there much doubt that vastly more people and

objects would be linked online in the next decade. Experts envision benefits ranging from the

ease and convenience of accessing information to changed workplace arrangement and

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relationships. At the same time, a majority of experts agreed that the level of surveillance by

governments and businesses will grow. Some of the results of this research show that;

(a) 57% of them agreed that virtual classes will become more widespread in formal education

and that students might at least occasionally be grouped with others who share their

interests and skills, rather than by age.

(b) 56% of them agreed that as telecommuting and home-schooling expand, the boundary between work and leisure will diminish and family dynamics will change because of that.

(c) There is a particular worry in the context of a common prediction that, “Government will be

forced to become increasing transparent, accessible over the net, and almost impenetrable

if you are not on the net.

Table 1 SUMMARY OF PESTEL ANALYSIS FOR SCG.NET

POLITICAL Taxation policy< VAT Company tax

NI & PAYE

Local Government Devolved Administration <

Cutting benefit

Inefficient to provide basic facilities etc.

Increase/decrease in government.

spending.

ECONOMIC IT sectors Business cycles<

Industry Market

Company etc

GNP trends Interest rates Inflation/ Recession /Depression Unemployment Disposable income

SOCIAL -CULTURAL

Population Demographics

Income Distribution<

low income

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High income

Unemployment

Social Mobility

Lifestyle changes <

o Needs

o Preference

o Taste

o Behaviour

o Choice

Attitude to work and leisure

Consumerism

Level of education

TECHNOLOGY LOGICAL

New Discoveries ICT developments Speed of technology transfer Rate of obsolescence.

LEGAL --- Licensing act 2003

--- Private security industries Act 2003

--- Beer orders and other changes to

competition law in the 1990s

---- Heath and safety law

---- international/European agreement/law

ENVIRONMENT Environment impact <

SARS

E-coli

Bird Flu

Green house effect

O3 ozone defect

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