Practise your commercial awareness for your next interview using PESTLE & SWOT.

[I Budd 123]

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thoughts! 🌟

Political
- Depending on where the beans and other materials are sourced, so will need to consider whether we have a trade agreement post-Brexit and the impact if we do/don't, and whether there are any trade restrictions in place.
- Gvmt announced corporate tax raise would go ahead so will need to factor that into the costs of business.
- Labour laws are strong and require high standards so may need to consider automation to reduce costs.
Economic
- Supply chain issues after covid and due to China's covid policy so will need to consider bulk buying and whether and factor in the costs of storage.
- High inflation and high interest rates mean that loans to buy premises/materials will be extremely expensive. May need a different source of investment.
- However, commercial real estate is struggling recently so rent may be cheaper.
- Who are competitors and how are competitors doing now? Starbucks has reported record revenue despite rising costs.
Social
- January health kick and savings trend may mean that this is a bad time to open a shop. Moreover, agile working means less customers in central London. Consider a mobile business.
- People more likely to shop smaller local business following covid.
Technological
- Automation can help reduce costs and spending on employees e.g. coffee vending machine.
- Could consider buy now pay later financing.
Legal
- Ensure branding etc does not breach any IP.
- How are employees to be employed? As workers, employees or ICs. Unlikely to be the latter, but consider how contracts need to be drafted and the protections required for each kind.
Environmental
- Ensure packaging and materials are environmentally friendly. Danone is being sued over plastic pollution and Shell lost a case for not doing enough to stay in line with net zero goals.

Strengths: The city is full of people needing coffee and during a time when costs are very high coffee may be a 'treat' a lot of people can afford when they cut out more expensive ones. People often prefer (at least in theory) the idea of independent coffee shops.
Weaknesses: Unlikely to have much funding so will need to rely on debt. No clear USP.
Opportunities: Could do a subscription service as Pret's seem to be going well, or a mobile service.
Threats: Highest rate of insolvencies since 2009 particularly due to inflation and supply chain issues so the market isn't in the best shape for a new business. Also investors do not seem to have much appetite for risky businesses atm.

 

[shaikishaq]

PESTLE


Political

• Where am I securing the perishable ingredients from- coffee beans, flour, sugar, salt, baking soda, etc? Should I look into local sources or import these it personally from outside of the UK? Which would be cheaper and allow for a greater profit margin. Are any ingredients I am sourcing subject to trade restrictions? Will I look at EU sources or other international sources?
• How/Where am I getting the machinery required for the functioning of the shop? What are the restrictions on where I can source these? Which would be more appropriate given my budget?
• How/Where am I sourcing furniture from? Will I purchase used furniture locally or through international routes?
• Can I supply my commodities in bulk, under order? Can I supply pastries made in another kitchen? What are the permits I need to acquire? Are there any laws which regulate this?
• Will my business also consist of home delivery/subscription services? How will regulations affect this?
• What is the permitted timings a coffee shop can remain open?
• How can I advertise the shop? What are the regulations? How am I designing my shop’s logo? Would it violate any other shop’s IP rights?
• Given the volatility of the pound and the FTSE 100 index, would opening a shop now be a good idea?
• Any restrictions on number of employees?
• Are there any tax credit considerations employed by the government? How do I qualify for those? Are there any other bursaries active currently for my business?

Economic

• How am I financing the opening of the shop? Do I have a partner or someone who wants to invest in my shop? Am I securing the financing through debt? If so how much of it? What would be secured under the debt?
• Am I going to outright buy all the things required for the shop like machinery furniture, etc. or have an alternative fee arrangement?
• Am I looking at buying brand-new things for my shop or have it bought second-hand?
• Where am I opening my shop? What are the property prices there? Are there any cheaper alternatives close-by which wouldn’t affect the strategic position? What is the size of the shop?
• What decorations will I add to my shop? How am I going to change the ambience of the shop unit? How would those affect over-head costs?
• What are high-traffic areas which I could utilise to maximise profits? What are the prices I am going to set on my products? What are the products I am planning to sell? What is the type of business I wish to run- high street, moderately priced or coffee priced competitively? How would this affect my profit turnover compared to the location demographics?
• How would the pound volatility affect the ingredients I source from outside the UK? Will the weakening of the pound adversely affect my business and ability to remain profitable?
• How many people am I employing in the business?
• How would the current rampant interest rates versus my profit turnover affect my business?

Social

• What demographic of the population will my shop cater to?
• Will I try to include a product in my shop which will be synonymous with its brand? How will I advertise this?
• How will the demographic affect my shops’ products’ pricing?
• Will I call my different coffee sizes unconventional interesting names? Will I name my pastries and desserts the same way to appeal to the younger population?
• How would I incorporate cultural and seasonal festivals in my shop to appeal to a greater customer base?

Technological

• How will I roast my coffee? Will I get a roaster? How will I grind my coffee- will it be hand ground or automatically ground?
• Will I utilise automated pastry making machines?
• Will I sell self-branded coffee pods for people to buy?
• Will I have a vending machine selling fresh juice, toys and or fast selling electronic items (chargers, earphones, etc.)

Legal

• What would my shop be classified as? Would it be a partnership or a separate entity? Who would take care of the registration at the Company House?
• How much and how to declare tax write-offs for acquisition of new property for a business? How will the opening of my new shop affect my tax declarations? How long do I have until I have to start calculating the tax payable, depending on when I am opening in the fiscal year?
• Depending on the scale of the opening of my shop, which model of business would be most useful? How can I maximise my profits while balancing audit costs? Who will file tax returns?
• Do I have employees? How many should I employ to ensure maximum efficiency? Should I hire managerial, part-time and full-time staff? How much should I pay each of them? Should I pay them the minimum wage? Who will calculate and file employee tax returns?
• How will I provide training for my staff?
• How am I arranging insurance for my shop? What will be insured? Will my staff be insured as well?
• How will I adhere to safety obligations like food, premises and materials.

Environmental

• How would I incorporate equality in my shop? Through employees, certification, recognition, gender neutral bathrooms or another fun way?
• Will I incorporate sustainable sourcing to my ingredient? Incorporate it in different ways? Will I sell household brand products to appeal to the demographic of the area of my shop for attraction?
• Will I incorporate sustainable materials in my shop- paper coffee cups, paper straw, high sustainability rated lighting and toilets, biodegradable plastics?
• Will I include custom orders or have a pre-set menu?
• What factors would affect my supply chain- recent unrest in South America (farmland fires, political unrest, etc.), rising fuel prices due to geopolitical situation, local strikes, inflation?
• How will I dispose of waste?

SWOT



Strengths

• An independent coffee shop allows for greater flexibility in terms of products offered. Like specially sourced coffee, make of own blend by customers, availability of customisation options.
• Due to its potential for flexibility, can allow for a loyal customer base.
• Due to its independent nature, products could be attractively priced.
• Free to follow a convenient theme.

Weaknesses

• Presence of a high level of competition.
• Difficult to quickly gain a loyal customer base.
• Could be unable to survive force majeure fluctuations without money rich organisational backing.
• Property prices are high in London and would be difficult to maintain overhead costs before the gaining of a customer base.
• Small economic fluctuations could have a big impact on success of the shop.
• Brand recognition will be time consuming.
• In an economy of volatility and rising inflation with local strikes, ransomware group attacks and falling consumer spending, running a new business profitably would be difficult.

Opportunities

• Due to ease in advertising and recent popularity in finding ‘hidden gems’ through online platforms, there is an opportunity for great success.
• The possibility of making a very unique and interesting looking coffee shop which would attract business initially due to novelty.
• Could capitalise on straying away from a conventional coffee shop and selling specialist things- coffee, pastries and desserts and make the shop more attractive to the customers.

Threats

• Proximity of another coffee shop. Would be exacerbated if the coffee shops are big chains like Starbucks, Pret-a-Manger, Costa, etc.
• Inflation, rising interest rates, supply chain issues, strikes and lowering consumer spending.
• Increasing over-head costs- utilities, rent, maintenance and raw materials.
• Bad reviews.
• Poor marketing.

 

[Mohamed Ashour]

PESTLE

• Political: Brexit effect on tourism as thousands of seasonal and permanent staff are hired from the EU and 60% of tourism came from the EU. this had led directly to an increase in hiring overseas staff.
• Economic: increase in energy bills due to the war led many hospitality businesses to raise prices (including coffee) and cut on opening times.
• Social: after covid many corporations offered incentives get people back in the office and still offering return to work schemes for those who took career breaks. and the strong coffee shop culture in the UK
• Legal: there is many legal issues that attentions such as: Employment law that includes recruitment, pay and working hours. environmental law including matters such as: proper disposal of business waste.
• Enviromental: acquiring beans from Brazil as an example which makes some of the best bean means getting these form farms built on deforested land.

SWOT

• Strength: could be offering a diverse set of flavors as each farm can offer unusual flavors based on the geography and the method of preparation.
• opportunities: according to world coffee portal; despite the economic challenges, UK branded coffee shop market achieved 11.9% sales growth thanks to the appeal of the coffee shop culture and consumers viewing coffee as an affordable luxury.
• Weakness: would be opening away from major city centers or any major facility such as hospitals or stadiums.
• threats: thanks to a saturated market with likes of Costa, Greggs and Starbucks who are better equipped to face financial distress and taxes.

 

[pinkpineapple]

PESTLE
P- potentially unstable government at Westminster (impacts investor confidence thus rates etc), Ukraine war and prices of grain etc, will strikes impact business ie being beside a train station but strikes on so no customers etc and/or deliveries possibly would be affected (maybe avoid Royal Mail)
E- interest rate remains high and the pound is weak so as a small business, may struggle to get loans or a mortgage (the latter will cost more than it ever has)
S- consumers are spending less due to inflation so the UK service industry is suffering
T- consider ways customers may want to pay
L- the coffee shop will require employees so labour laws will apply, as will health and safety laws need to be complied with ie food prep so consider hygeine, allergies
E- consider environmental incentives for customers eg recyclable cups and discounts for use of own cups

SWOT
S- it is possible the coffee shop would appeal to a niche, creating a particular atmosphere (opportunity arising from being an independent shop vs well known chain/brand)
W- not suggested there is such a USP
O- perhaps vegan/eco options for coffee/food, or go locally sourced to appeal to ESG investors and customers
T- there are surely many independent coffee shops in London

 

[rachqq]

PESTLE

P: ​

• Where am I importing beans and other ingredients from? Will geopolitical tensions or trade regulations in certain countries impact my business's supply chain?​

E:​

• How will the coffee shop be funded? Where will the shop be located? How will the high inflation rate and soaring cost of energy affect this?​

S:​

• Who are my target customers and what are their spending patterns like? This might affect my opening hours and menu selection e.g. students vs office workers on their commute to work.​
• Am I providing plant-based alternatives to milk to account for increasing customer demand for dairy alternatives?​

T:​

• How can I use technology to speed up processes e.g. taking orders? Do I need to implement data privacy and cyber security measures for electronic transactions/loyalty programmes?​

L: ​

• Am I complying with F&B health and safety regulations?​
• Are my employment contracts compliant with employment law?​
• If I have taken out a lease for the property, am I complying with the terms of the lease?​
• Do I have to consider IP to protect my brand e.g. registering trademark for coffee shop name, unique latte art design?​

E: ​

• Can I minimise the use of plastics by opting for sustainable packaging/cups/cutlery?​
• Can I offer organically made coffee?​
• Can I offer a discount to customers who bring their own cups to reduce my shop’s emissions further?​
• Are my shipping methods environmentally friendly?​

SWOT

S:​

• Coffee shops are profitable as they are generally cost-efficient and boast high margins.​

W: ​

• London has many existing ‘indie’ coffee shops. What makes my coffee shop stand out from other independently run coffee shops?​

O:​

• Identify a USP that will ensure the brand is memorable e.g. tea-infused coffee blends/coffee shop by day, cocktail bar by night.​
• Use social media to promote brand e.g. TikTok or Reels.​
• Make the coffee shop study-friendly to attract a regular + loyal customer base e.g. sockets, free wifi, comfortable seating.​

T:​

• Difficult to compete with large chains e.g., Starbucks, Nero, Pret.​
• Many coffee shops have seasonal menus – will sourcing different ingredients be possible on my budget and will this be affected by supply chain shortages?​
• Cost of living crisis – people may opt to cut coffee out of their budget and make coffee at home instead.​

 

[Harty]

P: Importing location of beans. Any interruptions going on (embargos, wars, natural disasters, strikes). Ditto for the rest of materials (e.g. cups, cakes, etc.)
E: Tax breaks I can take advantage of. Where am I getting the initial capital from and what are the strings (high current interest rates)? Do I have a location available or will I be renting (property prices for anything in London are high)? Where will I open the place - somewhere centrally located, somewhere with less competition)? Do I have any equipment? Do I have a good source for it? Do I have storage space? Can I use my home? Will I employ people? Will I be the only shareholder in the business, or should I bring another to mitigate the initial risk/investment? How much will my perishables cost? What other goods to I offer (cakes, tea, sandwiches, toast, etc)?
S: Whom do I market to and how to pander to them? What is the local competition doing?
T: How do I advertise (social media)? Do I sign up on any apps/create my own (e.g. delivery services, or pre-order product, so it is ready by the time client comes to pick it up)? How to ensure secure payments? Do I use newsletters/loyalty schemes? In this case, how do I store/process client data?
L: Employment laws. Health and safety laws. Location contract. Make sure the shop name is not taken - IP issues. If I am planning to use an app, work out the term with app's owners.
E: Responsible/fair trade sourcing. Other ESG policies. Recyclable materials (cups, packaging). Use local suppliers to minimise transport emissions? How do these impact my costs?

S: Not beholden to a big brand that will take a cut out of my revenue just to use the name. Can be flexible with location and size of shop. Can brand as I want and target the customer group I want. Coffee is popular - many people drink it.
W: Lots of competition, both chains and indies, doubt I can offer as competitive prices as them and make up for lower profit margins through sales volume. As with any new business - building it up is hard and high likelihood of failure. Need to build the brand. Finding a location with potential.
O: chance to build my own ID and USP.
T: Are Covid restrictions still a thing? Threats to my supply chains (some mentioned in "P")., Inflation - ups my bills. Cost of living crisis/recession - reduces spending money of customers - lowers my revenue. More established competition.

 

[Ghana M.]

PESTLE ANALYSIS​

Political:
​

• Government regulations and policies affecting the food and beverage industry, such as food safety standards and taxes.
• Changes in immigration policies may impact the availability and cost of labour.

Economic:​

• ​
• Economic conditions in London, such as inflation and consumer spending patterns.​
• ​
• Fluctuations in commodity prices, such as coffee beans and dairy products, may impact the cost of goods.​

Social:
​

• Consumer preferences and trends in the food and beverage industry include a growing demand for sustainable and fair trade products.​
• Demographic shifts in the local area, such as population size and age structure changes, may impact customer behaviour.​

Technological:
​

• Advances in technology, such as mobile ordering and delivery services, may impact how customers interact with the coffee shop.​
• Investments in kitchen and service equipment that can improve efficiency and quality.​

Legal:​

• Employment laws and regulations affecting the coffee shop's operations, such as minimum wage and health and safety standards.​
• Intellectual property laws related to trademarks and branding.​

Environmental:
​

• Environmental regulations and initiatives like waste management and sustainability may impact the coffee shop's operations.​
• Climate changes may affect the availability and cost of ingredients.​

​

SWOT ANALYSIS​

​

Strengths:

• Popular and well-established brand with a loyal customer base.
• High-quality coffee and food offerings.
• Convenient location in a busy area of London.
• Attractive and inviting interior design.
• Strong online presence and reputation through customer reviews and social media.

Weaknesses:

• High operating costs due to rent and staff salaries.
• Limited menu options and limited seating space.
• Competition from other coffee shops in the area.
• Dependence on a single location increases risk in case of unforeseen circumstances.

Opportunities:

• Expansion into other locations in London or even other cities.
• Introducing new menu items and merchandise to increase revenue.
• Offering events or workshops to attract customers and build community.
• Leveraging social media and online presence to reach new customers.

Threats:

• Economic downturns can lead to decreased customer spending.
• Changing consumer preferences for coffee and food options.
• Increased competition from established chains and new entrants in the market.
• Potential rise in coffee and food prices due to supply chain disruptions.

Alternative route: Coffee bikes in London could potentially be profitable. However, the level of profitability would depend on the efficiency and effectiveness of the coffee bike operation and the conditions in the market.

​

​

​

 

[leannemcginnell]

P: where are my coffee beans being imported from? Any supply chain issues due to geopolitical tensions?
E: how is the business being funded, borrowing? Where is my business in terms of market position?
S: target market? Trends in their spending patterns?
T: is technology being used to increase or maximise efficiency? Cyber-security threats? Card payments?
L: which hygiene standards do I need to comply with? Any regulations concerning employees, like employee status, training, H&S. Tax and licensing regulations.
E: procedures in place to reduce plastic use, minimise waste, reduce emissions in general.

 

[jenniferyook]

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thoughts! 🌟

The Corporate Law Academy Forum PESTLE & SWOT​

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?



PESTLE:

Political

• What are the taxation requirements for independent businesses in London?
• What are the labour laws surrounding part-time and full-time employees for potential staff at the coffee shop?
• Where am I getting my supplies?
  • If domestic, what are the laws surrounding goods traded within the UK?
  • If international, what are the tax, customs, and other laws surrounding imported goods?
• Are there any bills or anticipated changes in labour, tax, or trade laws?

Economic

• How will the high-interest rates affect the quality of my goods?
  • Will I be able to find the balance between providing affordable goods at a low price or do I choose to provide premium goods at a premium price?
• If I trade internationally, how does the exchange rate work in or against my favour?
• With the rise of living costs and inflation, how many people would still be able and willing to spend their money on coffee shops?
  • How can my prices reflect this?
  • Are people choosing to spend their money on other activities such as movies or on more permanent goods like clothes?
• Will it be beneficial for me to provide other coffee-related goods within the café that isn’t perishable?
• How will the changes in spending habits affect my traffic and potential customers?

Social

• How many coffee shops are in the area?
• What is the culture like in the area?
• Are there more students or more professionals with more disposable income?
  • What are the average opening hours of coffee shops in the area and would it be beneficial to have a later closing time?
  • For instance, if the area has a greater student demographic, this might be advantageous for the business to be able to target students who are studying late and need a break or like to study in cafes.
• What are the trends when it comes to favourite drinks?
• What seasonal drinks are available within the area and sell well in the UK as well as in other countries with similar demographics and cultures?

Technological

• Are there special machines or tools that I can invest in to cut down on labour costs that will save me money in the long term?
• What would be the costs of advertising on social media platforms and having certain events/discount codes available online to garner more interest?
• How can I sign up to have my business listed in multiple delivery apps?
  • Is there a way to advertise on the apps as well to promote my business?

Legal

• What are the laws for consumer protection that are relevant to goods and services?
• What are the labour laws surrounding part-time and full-time employees?
• What are the advantages and disadvantages of either contract?
• What are the taxation laws that are relevant to SMEs, business properties, and goods purchased for business?

Environmental

• What are my alternatives where there is a disruption in my supply chain?
  • Can I diversify my supply chain so that I can rely on my domestic chain if there is an event that affects my international supply?
• If there is another legal restriction due to a pandemic, how can I counter the negative effects of this and provide my services and goods to a wide audience remotely?
  • Can I rely solely on pick-up orders and delivery apps?
• If there is an unforeseen event that causes damage to my store, what can I do to mitigate the risks of such an event?
  • For a natural disaster such as a hurricane or a torrential storm, can I still operate within the store despite the damage? Can I at least take delivery orders and operate in a different location while the store is under construction?

SWOT:

Strengths

• Have an aesthetic café where people can come to take pictures and post on social media
• Make the café available to be booked by local book clubs or members of the communities to solidify the café as a place essential to the community
• Distinguish from other chain cafes or independent cafes by building café identity in being a place for the community
• Have high-quality goods
• Have periods of time blocked off for neurodivergent people to be able to frequent the place without being triggered
• Establish café to be a brand that is safe for everyone
• Mirror study cafes and have designated areas for students to come and study for long periods of time as well as separate areas that are dedicated to prime social media experience

Weaknesses

• Do not have the stability that comes with being a big corporate entity
• Will suffer significant disruptions based on certain events
• Do not have the resources to create seasonal drinks on a regular basis that are also inventive and innovative
• Do not have the resources to invest in heavy marketing
• Do not have the bargaining power of a large corporate entity to create a cheaper and more competitive supply chain
• Will not be an early adopter when it comes to new tech in the industry due to limited resources

Opportunities

• Look into the trend of having study areas within cafes
  • Or look into incorporating an activity within the café
  • E.g. Customers sign up for painting classes – provide the supplies needed at a price and have a session where people come together to draw and paint the same thing
• Look into having bubble tea options on the menu
• Look into having inventive baked goods options to garner interest
• Current market is stunted as COVID has negatively affected a lot of independent businesses and high-interest rates and rising inflation means that it is much more difficult to start a new business.
  • Look into providing a membership system where you can get a small, standard cup of coffee every day for a set monthly subscription price.
    • Provide the drink at a slightly discounted rate in return for fixed income

Threats

• Competitors:
  • Big corporations that can afford bigger properties with more room and a familiar menu
  • Already established local coffee shops with a regular stream of loyal customers
• Factors beyond my control:
  • Changes in the law
  • Inflation
  • Potential natural disasters and pandemics
  • Events that affect my supply chain
• If consumers were to change their spending habits and are less inclined to eat out and go to coffee shops, this can affect my business negatively.
  • Will have to find different selling points that will encourage those customers to spend their money at the café.

 

[Hani]

P: Are there any tax implications if I import the coffee beans from outside the UK?

Labour Laws in London – max. working hours, minimum wages I need to provide my employees, visa/ work permits/ insurance for the coffee shop employees

will there be global supply chain issues due to geopolitical instability?

E: How do I fund my business? If I take a loan to fund it, what interest rates would apply? What will my initial costs be and what will be my monthly expenses?

S: What kind of customers am I targeting? Could I look into offering the coffee-shop as a co-working space as well similar to we work style since a lot of companies are still using flexible working options

T: What software would I use to store customers data and record the payments?

 

[Lily721]

P: Where would I import beans for? Would the war in Ukraine and Covid have any impacts on the supply chain?

E: Funding the business – how can lower interest rate be secured given the rise in inflation? Also costs associated with the shop – where should it be located, location can impact rent, recent crisis has caused spike in utility bills, could this significantly reduce any profit margins.

S: Customers shopping patterns – UK is headed (is in) recession, inflation is high and people are spending less or going for cheaper options. How can I insentivise people to buy from my business.

T: could I use technology to my advantage e.g. card payments, advertising online etc.

L: how can I ensure my shop is compliant with food/drink regulations, health & safety codes. Also ensure I have the proper insurance coverage.

E: how can I ensure the coffee beans I am importing are fair trade and sustainable? Can I do anything to reduce the CO2 associated with importing the coffee beans? How can I ensure I am environmentally friendly – instead of plastic, use paper cups?





S: independent coffee shops can stable consumer base in London due to heavy foot traffic, population density and a lot of workplaces. Can look to turn the coffee shop into a franchise – open shops in multiple locations.

W: a lot of independent business and shops around London means there is a lot of competition and difficult to distinguish youeself.

O: could create more “unique” drinks to draw interest from customers, could try different and fun presentations.

T: a lot of competitors such as established franchises like Nero, Costa, Notes etc.

 

[TheBarorNot10]

S- what is my company’s USP? As an independent coffee shop in London – I need to have a USP that makes me stand out from the thousand other coffee shops and draws customers to get coffee from my independent business and not a franchise, such as Starbucks. What resources or assets do I have? E.g., coffee machines, unique coffee blend recipes, store/shop space, key employees, key clientele – e.g. – influencers, digital assets – IP and brand, social media following.

W – finances – specifically costs – how will I fund the start-up and working capital of this business? Independent coffee shop – consider if I have enough capital as an entrepreneur to put money in my business? Or will I need to raise capital in the form of debt (loans) or equity (venture capital). As a new, young business – it will take a while before profit is made or even revenue. How will I keep the business going – what sources of finance will I use?

O – consumers are turning to cheaper/ low priced food and drink alternatives amidst cost of living crisis. More city workers are going back to the office as time goes on – footfall can help business. Dairy free alternatives – soy milk, oat milk, almond milk is very popular in coffee drinks nowadays. Matcha and chai lattes are also growing trends.

T- changes in consumer spending and cost of living crisis will affect demand/revenue. Also, recent change in government reducing support for energy support bills will increase costs. In regard to competitors, independent business will have to face rivals such as Starbucks and Costa Coffee which already have a loyal following. Furthermore, many UK businesses are failing at a fast rate due to high wage requests, high utility bills and high interest rates making servicing existing debt unaffordable. High utility bills will affect running costs of business.





P – government plans to shelf energy support for businesses. Support will be reserved for ‘energy intensive businesses only’. Corporation Tax will need to be a factor to consider if limited company.

E – Economic climate in London/UK is not great. Cost of living and recession will affect business. Consumers are not spending as much as they used to and will be probably forgo coffees to save. High interest rates makes borrowing expensive and servicing existing debt difficult. UK business are failing at a fast rate.

S- consumers are not spending money, hybrid working – less people travelling to London on weekdays, young people have more disposable income. Younger generation like ‘Instagrammable’ places to eat, drink.

T- Open AI has created Chat GBT – type of technology can be used to take people’s orders?

L – food/drink business – laws relating to Health and Safety, Food Hygiene rating from Food Standards. What type of structure will business take? Limited Liability Company? Sole trader – as an entrepreneur I may want to keep all profits from business.

E- ESG is a big focus right now. How will my business reduce greenhouse gas emissions and contribute to sustainability? Disposable/recyclable / reusable coffee cups? Sourcing coffee beans from sustainable/ethical origins? Making sure suppliers are ethical?

 

[Vickymitchell]

Excited to take part in this, Thank you!

P: Look into delivery services that are happy with their treatment and pay this will increase the ethics of the business as well. Avoid importing countries that are high risk of corruption or political instability. Look into issues Brexit has caused with various countries- which countries have the least tariffs and will have the least added costs.

E: debt finance- interest rates are high at the moment, so keep borrowing to a minimum
Equity- any personal investors wanting to invest in the business?

S: London is extremely diverse and a populated city, meaning footfall will be high and coffee shops are in high demand due to the amount of offices and working people.

T: Allow apple pay for customers although this may cause implications on the amount of money received if they take a fee- but it has several users and is extremely popular.

E: look into places that produce beans sustainably. Could these beans be the ones that are rejected from other large stores ('wonky coffee'- this will reduce costs while also promoting being sustainable). Use recyclable packaging.

L: are there any food hygiene standards I need to comply with? is there compulsory allergen training? help in drafting employment contracts, in tenancy agreement for my shop. Follow health and safety laws.

 

[antoniovargas07]

Political: Where are you going to source your coffee beans from? Does the UK have any trade restrictions against that country? How politically stable is the country you’re sourcing the coffee beans from?



Economic: How much is it going to cost to import your coffee beans? How are you going to price your products? Need to consider whether you’re looking to buy or rent a space for your coffee shop. If buying, what is the interest rate on the loan? How much is the monthly repayments on the loan? If renting, how much is the rent? Are there any service charges attached to the property? What are the monthly gas and electricity bill costs? If I hire staff, how much will I pay them? How much will it cost to buy appliances and other items for shop?



Social: Where I’m going to locate my shop? In the heart of the city near offices or near residential area? How am I going to market the business? Which demographic am I looking to target with my marketing?



Technological: Do you want to accept different payment methods (e.g. debit card, through app, etc)? What type of machinery should you use to grind coffee beans?



Legal: How do ensure you comply with health, safety, and food allergen laws? If you’re developing your own brand for the shop, you would need to consider IP protection. If hiring staff, what employment laws do you need to comply with? If you’re leasing a property, the lease would need to be reviewed.



Environmental: What is the energy rating of the property you’re looking to buy/rent to use for the shop? Will you recycle? Will you use environmentally friendly products e.g. reusable cups, cutlery, etc?





Strengths: Alternative to established names in industry (e.g. Starbucks, Costa, etc). In comparison to large coffee chains, independent coffee shops employ less staff.



Weaknesses: Market for independent coffee shops in London is very saturated. Will be very difficult to stand out from others.



Opportunities: If have space, may want to turn it into more than just a coffee shop e.g. shared working space. Living in post-pandemic world where most people spend time WFH. If located near residential area, can attract people who WFH to work at coffee shop.



Threats: You will also competing against larger established companies who dominate the industry e.g. Starbucks, Costa, etc. Given we’re in a cost of living crisis, consumers may decide to make their coffee at home rather than buy one at a coffee shop. If another pandemic occurs, a lockdown may be imposed which could mean no business during that time. May be difficult to receive a beans if the countries you’re sourcing beans from are prone to natural disasters which will lead to supply chain issues.

 

[SarahB3]

Apologies for the delay. This is also my first attempt in applying the PESTLE & SWOT analysis. I will appreciate your feedback and an email with the correct answers. Thank you team


Political - I would consider the implications of Post Brexit and pandemic - Disruption in supply chain due slowdown in trade as a result of covid-19 but also new tariffs for importing coffee beans into the UK.

Considering that there is a large Coffee market in the UK, the demand to import coffee beans is high. The Swiss and Brazilian markets import a lot of coffee beans in the UK, so I need to factor in taxes and duty fees. I will negotiate good trade deals in the future to get coffee beans at a discounted rate in exchange for long-term business partnerships.

Economic - The inflation rates will cause an increase in the cost of supplying coffee and other outsourced products/materials.

Due to increased costs, I may have to apply the bootstrapping approach to fund several aspects of my business that need less start-up capital. This will reduce the amount of loans or borrowed funds. The benefits of this is risking my own money and thus limiting liability of debt owed. To compensate for increased property prices as a result of interest rates in London, a bootstrapping approach will enable me to test waters on ideas for the growth of my business early on such as entering partnerships with nearby corporate firms and supplying them with my company’s coffee in coffee machines or setting up a pop-up cafe.

The weakening pound over the last few years has meant that I will receive lower amounts if I invest in importing coffee beans. It may, however, be necessary to use pricing strategies such as competitive pricing, cost-cutting pricing, and price skimming, which involves setting higher prices and lowering them as market conditions change and when interest rates decline.

Social - this relates to the social environment of the market you are analysing, such as demographics, current social trends, cultural aspects, etc.

As of 2020, UK consumers spend over £4bn in high-street coffee shops. Moreover, 80% of coffee shop goers go to a coffee shop at least once a week. This suggests that my business has a chance to aid the continuation of this trend.

With the rise of social media platforms such as Instagram and Tik tok and their ability to lure consumers into trying new products that are trendy and/or go viral, with my content creating knowledge and experience, I will be able to take advantage of these platforms in drawing traction and marketing my brand.

Furthermore, I will focus on packaging and decor in order to entice customers to visit, take pictures, and create content that is memorable. Hopefully, this will encourage them to share and post on their social media platforms to attract more customers.


Technological - I will incorporate technology to facilitate with document review tasks such as any major changes in the trade agreements will be flagged up using AI and document automation tools.

Environmental - this relates to the environmental considerations that may affect the industry you’re analysing, such as sustainability concerns or natural disasters.

In case a natural disaster impacts the seamless importation and access to receiving coffee beans from Latin American and Brazilian suppliers, I will ensure I have a backup supplier.
As a result, I will ensure I have two suppliers in this case, which will be Switzerland


SWOT refers to a business’ Strengths, Weaknesses, Opportunities and Threats.

Here are a few things that business owners may want to consider when creating their business plan:

Strengths - Location - The shop will be located either in Liverpool Street near law firms and corporate businesses or in Shoreditch, which is close to tech companies. Those who enjoy drinking coffee on their way to work, during lunch breaks, etc., will be enticed and drawn to this offer.

I will consider my USP to be an instant Premium coffee with different tastes - I will ensure my product stands by describing that I offer various flavours. I will also emphasise on the fact that I sourced out the freshest luxury standard coffee beans and price it at a premium yet affordable rate

Weaknesses - Due to the current economic climate, I will be reluctant to access so much debt capital and thus I will need to be selective. In selecting who to invest in, I need to consider that I have a limited budget, I am liable to meet their rules and will not be able to fully own the profits until I have paid back the debt owed.

Given that Costa (UK brand) and Starbucks make up a large proportion of market share, I will need to factor in aspects of my business that differentiate it from the larger brands. This will be my price point and flavours as well as customer experience and packaging.
Opportunities -

My business has a good chance of success despite the competition, considering the enormous consumption of coffee, which confirms the value of the total coffee chain market at around 4.4 billion.

Threats - My competitors such as major players in the coffee market (Costa Coffee and Starbucks) are threats given that they have a larger presence across London. They also offer seating arrangements and complimentary wifi, charging ports and chair textures which invites customers to stay longer and create a memorable experience.

As an independent brand located in one area, I will find it difficult to compete in terms of popularity and spacing.