Also, this situation required extra costs, like those required for the interior design specialist.
Also, the opening hours detailed in the initial business plan could not be respected. They had to be modified in order to suit the selected location of the business and the new customer segment that Bagel Express addresses.
Opportunities
The financial figures presented in the case study reveal the fact that Bagel Express is a successful business. However, after including extra depreciation, interest charges, and taking into consideration the fact that the business was financed by overdraft borrowings, one may observe that the business lost money in its first year of activity.
The most important opportunity is represented by the fact that property boom in London is no longer a problem and premises reach available prices.
Threats
Bagel Express is a successful business and this is probably quite clear to the bagel bar's competitors. Sinclair's idea could be put into practice by new or existing competitors with higher financial strength. Given the Bagel Express' current situation, such increased competition could severely affect the bagel bar's future activity.
Business Options
Given the circumstances presented by the SWOT analysis above, Bagel Express' owner has two options:
Consolidating the business
Expanding the business
Consolidating the business is a more financially secure option for Bagel Express. It would also require less effort from the...
Given the fact that the business seems to have lost money in its first year of activity, consolidating the business seems a more logical decision in this situation. However, the business could lose ground in the favor of other competitors that would take advantage by the opportunities that the market provides.
Expanding the business is a riskier option, but it would also account for increased revenues, on medium and long-term especially. The market is in full development process and Bagel Express should take advantage of this growth opportunity. If Bagel Express tries to expand when the market is already saturated, the business would not be able to reach the potential its owner has in mind.
Recommendations
Although it is considered a riskier option, it is recommended that Bagel Express implements the variant that consists in expanding the business. The market conditions are optimal, given the market growth process mentioned above.
Also, the prices for premises in London are decreasing, which will make it easier for the business' owner to find suitable and affordable locations for possible bagel bar outlets. It is clearly stated in the case study that the business owner and his associates have the financial possibility of continuing to support the business. Therefore, it is recommended to take advantage of this possibility and take the risks involved by expanding the business. Bagel Express cannot afford for other competitors to gain ground by taking advantage of the above presented market conditions.
