Name: Philip Kanivelil Mathew Student ID: B-2/10M201

BSBSMB402A

MERLYNSTON CELLARS
Business Idea

Our Business Idea is to start a liquor shop in Coburg North .It is a retail business selling liquor, wines and
cigarettes and some packed food items .Our aim is to sell all leading brands in the market and to offer a
good quality service.

Opportunity and Strategy

At present, Safeway liquor is the only one shop which offer the same product. Our aim is to penetrate in
to the market with a less price as Safeway is charging a high prize at the moment as they have got no
competitors. So we wish to sell all the leading brands of liquor ,beer and wines at law price charging a
reasonable margin

As i have stated above there is only one similar type of business and we hope we can capture the market
by selling the product in a low margin .The proposed business area is a part of city of Coburg and 2600
families staying in the surrounding area which constitutes prospective customers. The main shopping
centre nearby is Coburg Market ad it is 3 km away from this proposed site

Business Goals and Objectives

Our goal is to open a chain of liquor shop throughout Melbourne and to operate in large scale basis. When
more and more shop are opened the purchases would be in large scale and that will enable us to purchase
the stock at less price .This will also help to sell the goods at low price. At present our competitor is one
BWS outlet in Fwakner but our goal is to compete with Dan Murphy throughout Melbourne who is
offering lowest liquor price here

Target Market

My target market is the local community who are the residing in the 3 kilometer radius in the Coburg
North area .2600 houses and other business centers will constitute the target market for us.

Type of Business

It is a retail shop selling all leading brands of liquor ,wine cigarettes and some packed food items .

LEGAL AND ADMINISTRATIVE REQUREMENTS.

Local, State or Federal government regulations

Regardless of the type business, there are some legal issues needed to be considered while running a
business like licenses, permits, regulations etc...They may vary according to the location of your business.
each state and each council has its own regulations.
Regulations and laws regarding this does not allow to enter in an lease agreement for less than 5 years.
Lease agreement for this business under Retail Lease Act 2003 of VIC. According to the Retail Lease Act
of 2003, In order to start a retail shop under a leased premises, should abide with the laws and regulations
prescribed by the Retail Lease Act of 2003 OF VIC. This law is applicable to the business as liquor shop
(retail) fall under this category.

Permits and licenses are required for the following

1. Shop license

2. Trading hours

3. Fire regulations

4. License to sell Alcohol, Cigarette, Packed food items

5. Electricity

6. Flammable liquids

7. Sign boards

8. Occupational health and safety

Specific license is required to sell liquor. Director of liquor licensing, Victoria is the authority to grand
the license. The application for the liquor license is decided to be forwarded through G.D CROCKET
&CO BARRISTORS & SOLICITORS, Melbourne, the legal advisor of the firm. According to them the
probability to get the license on the proposed site is more than 90 % because of the lack of such shop in
the near precinct and the availability of the parking spaces. Department of Planning and Community
Development Victoria is the authorized agency which grand the permit for construction and alterations. A
planning permit is required from the above said authority to apply for the liquor license. So far the
structural alteration and extinction is concerned, there is no need of any structural alteration or
extension .But requires interior alterations, mainly erection of shelves for the display of the bottles
erection of freezers and coolers. JACBE &CO BUILDERS & DEVOLOPERS are assigned to acquire the
building permits for alterations. So as to start a business or Occupational health and safety -Safety
measures like fire alarms, safety west and boots to employees, safety signs in the warehouse regarding
fork lift in use and other safety signs required, insurance to employees are the very important and legally
entitled to maintain .Instructions and training to employees regarding this are to be given. Adequate
training on Heavy lifting and lifting techniques to the employees are to be given so as o meet the
occupational health and safety standards Dining facilities ,changing rooms and toilets ,other storage
facilities ,emergency washing facilities ,drinking water, for employees and cooling system, aisle ways and
passage ways and workplace cleanliness , seating ,exit doors in case of fires are the essential requirements
which is are to be maintained by law REQUIREMENTS /RESTRICTIONS occupational health and
safety standards. Insurance minimize the risk by providing protection against the loss. As the insurance
policies can save a great deal of loss in the event of unforeseen disaster. Compulsory Insurance required
for the business by law are
1. Workers compensation-The proposed business employ less than 5 people and workers compensation
insurance is compulsory in case any injury death or work related sickness in the workplace.

2.Third party motor vehicle insurance- it is also compulsory for those who use any motor vehicle in the
business premises like fork lift

3. Fire /Storm /tempest –Protects principal assets like building stock and electronic equipment from fire
and storm .This insurance is a must because alcohol is highly inflammable

4 Public risk and Public liability –This insurance is required to taken to cover the risk related to the
customers visiting the shop. This type of insurance is very essential because claim settlement is in very
high and often in millions

5 Burglary and theft.-This is another insurance that is to be taken by the business firm

6 Insurance in transit-This insurance is unavoidable in this case as the goods in transit are the wine and
liquor.

Restrictions

The main restriction imposed on the business is that we can not our goods to the youngsters under the age
of 18 .Our major portion of turnover is from liquor ,wine, beer and cigarette .Cancellation of the licenses
and heavy penalties will be applicable in case of the violation of this rule

SUPER ANNUATION

As per the law of Federal Government an employer must contribute 9 percent of basic pay of each
employee’s salary to an accepted superannuation fund quarterly. To meet this riteria 4 employees of the
firm must be contributed with superannuation fund .

Taxation System

It is a must to register for GST as the expected turnover is more than $ 150000 It is very important to
comply with the rules and regulations of taxation system in Australia in order to run a business. There are
two types of taxes ie, federal taxes and state taxes .It is a bit complicated because the federal legislation is
uniform across Australia whereas state taxes vary from state to state Goods and service Tax is the
important .10 % the sales price on every products to be allocated to GST and it is paid to Australian Tax
Office .10 % is charged extra from the customer on the liquor and cigarettes sold will be collected on
behalf of the ATO. The tax collected and paid is called input tax and the rest of the money collected
unpaid is called GST to pay. The ABN number will be the GST registration number for the business. Tax
period length will be quarterly ending on 30th September, 31 December, 31 March and 30th June
Contracts Required:

Lease Agreement

The main contract entered for the purpose of starting of this business is a lease agreement under Retail
Lease Act 2003 of VIC .This the very important contract needed for commencing the business .The
proposed property is the apt one for starting the liquor shop because it belong to a suburb called Coburg
North where only one shop of similar type only operates. According to the Retail Lease Act of 2003 ,In
order to start a retail shop under a leased premises ,should abide with the laws and regulations prescribed
by the Retail Lease Act of 2003 OF VIC. This law is applicable to the business as liquor shop(retail)fall
under this category.

Leasing Premises:

The relationship between the landlord and the tenant will be regulated by the lease and certain
circumstances, state or Territory legislation may also apply. In the lease one can find clauses that deal
with:

1. The amount of rent

2. The length of the lease and ways it can be extended.

3. The landlords obligations with regard to repairs and maintaining the good repair of the premises.

4. The option for renewing the lease for another term.

5. Types of business activities one can carry on in the premises.

6. Landlords right to enter there premises.

7. Consequences of any breach of the lease.

8. Insurance obligations.

The contract entered between land lord Mr. IAN GAUDREY ,50 ARMADALE STREET ARMADALE
VIC , lesser ,hereafter called party No 1 and PHILIP KANIVELIL MATHEW lessee, partner of
Merlynston Cellars, here after called Party No 2 under Retail Lease Act of 2003 OF VIC. This is said to
be a valid contract as it has got following features.

1 An intention to create a legal relation –Both parties are willing to create a legal contract on a property
for lease and are of sound mind ,attained age of 18 and not bankrupts

2.An offer –An offer is made from party No 1 which implies the property is being owned by Party no 1
for 14 years are offered to party No 2 for a sum of 900 dollars as rent for calendar month subject to the
agreement .

3 An Acceptance-Acceptance from the party No 2 in return to the offer made by the Party No 1 in relation
to proposed property
4.The consideration-The monthly rent of the property is the consideration here. So as per the agreement it
900 AUD for a calendar month for the year 2009-2010..

5-The consent -The consent of both the parties on a genuine agreement in tent is visible in this case.
There is no misrepresentation, undue influence and coercion

6-The legality of the purpose –The purpose of entering a contract is legal . It is legal to sell alcohol in a
licensed shop in VIC

7-Documented form.-

A document is signed between both the parties

Relevant terms and conditions included in the lease agreement

*This lease agreement is signed on 2 nd of September 2009 .The term of lease is for 5 years and is
renewable with the consent both parties at the end of 5 years .Any of the party is not permitted to refrain
from contract unless and otherwise any of the terms and conditions is violated .

*This agreement is signed so as to meet the requirement for applying for license for the proposed business
.If the application is rejected the agreement will be terminated. The liability of the party no 2(tenant) to
party no 1(landlord )will be subjected to sum of rent from the date of signing the contract to the date the
license is rejected. In case of the permanent cancellation of the license for liquor sale during the tenancy
period will end up the lease agreement .

*Rent is due on 2 nd day of every month

*The rent for a calendar month is 900 AUD .An increase of 10% in the rent amount will be applicable in
the following year .An increase of 90 AUD in rent in every year is applicable .In case of the non payment
of the prescribed rent from party no 2 to the party no 1 will amount to void the contract

*Utility expenses (electricity &gas, water, drainage, ) related to the proposed shop to be paid by tenant,
party no 2

*Party no 2, tenant is liable to keep the premises clean and in good condition

*The responsibility to keep the structure of premises and textures as long as the tenancy agreement
prevails is vested with Land lord ,the party no 1 .The damage to the texture and building due to the
negligence or mistake of the party no 2 ,will hold the party No2 liable for the same

*Insurance to the property from fire is to be paid by landlord ,the party no 1

*Victorian Small Business Commissioner is the authorized person in case the dispute between the parties

Rights and Obligations of tenant and landlord

A tenant is obliged to –

A)Pay rent on time b)pay reasonable care to the property to avoid damage c)refrain from subleasing the
prescribed property

The tenant has the right to carry on the business until the end of the tenancy period as long as he fulfill
with the terms and conditions of the agreement

Land lord is obliged to-

a)Give a disclosure statement.-which shows all the items of financial payment a tenant might have to pay
like taxes ,levies rates etc

b) Pay for the ordinary wear and tear ,ie maintain the property up to the end of the tenancy period in the
same structure how it was at the beginning of the tenancy period.

b)not to interrupt the utility services to the premises

Contract No 2

We sign in a contract with DUNCANS Australia which has got whole sale distribution department for the
steady supply of quality wine beer and spirits

RASILE GLOBAL IMPORTERS will be our major supplier of imported wines and

Trading name:

MERLYNSTON CELLARS

Location- 341 Audrey Ave, Coburg North ,VIC-3058

The name of the business is same to the name of the place .The prospective customer is the inhabitants of
Merlynston and those who travel through the busy Sydney Rd. The people residing are comparatively
high income group who has got more purchasing power. The business name should be registered and for
that there should not a any similar kind of business with same name or similar name in Melbourne. The
proposed name is hope to meet that criteria alteration is not required for the shop but alteration in the
interior are required

Legal Structure of Business

The proposed business is a partnership business. A partnership is a business relationship between two or
more people that shares income or profit, but does not create a corporation, a separate "corporate entity".
Instead of incorporating under the Corporations law, the business partners essentially agree to pool their
individual assets and skills, and to share the profit from their activities. The law controlling partnerships
is substantially found in the Partnership Acts of each state - It means the business will have more than one
owner. It is good for a new business as we can share the responsibly and liabilities and also we can make
use of each others expertise in the business. Each state in Australia has its own laws for business
structure. Our business firm will be located in Merlynston which is supposed to be at the geographical
centre of Melbourne .So the business will be registered according to according to Victorian Partnership
Act which came into existence in 1958.

http://www.docdownload.com.au/document/group.psp?group=legal,49717

Legal and tax implications

According to the act we need to register our company name if it is going to last more than one year.
Partnership Act generally include following things like names and addresses of the partners, name of the
firm, nature of the partnership business ,duration of the partnership, initial capital contributed by each
partners, distribution of and losses ,partners salaries, record keeping and accounting procedure, bank
details, extent of each partners authority, effects of death, bankruptcy ,expulsion incapacity, or retirement
of partner, dispute resolution process, procedures for the dissolution of partnership , etc..Also partnership
agreement costs AUD200 . Business name is to be registered under Partnership Act and apply online for
an ABN. This is a must to collect GST. The Australian Business Number will be also be the GST
registration number for the business profits and input tax remittance

Description Of business premises

The proposed business is in a shopping center with seven other business concerns like subway, priceline
pharmacy ,video shop ,grosser shop, Australia post ,Thai restaurant and a pizza shop This area is zoned
for shops .120 M2 area is available for the display and storage of bottles. This business center meets the
local government regulations building permits and parking requirements .Structural alteration is not
required on the proposed site but need to be done some alteration in the interiors.

Market research and analysis

Before every business to start or a new product is launched, a market research is done so as to determine
what people need ,what is their wants and needs ,why they need it and how much they are ready to pay
for that. It is the important component in business strategy. The information gathered about the market
can be very useful in forecasting the success of the business. Here we adopted observation and face to
face technique to know the customer trend and possibilities. Observing on the competitors business
premises provided idea about the number of customers purchasing liquor and other similar goods and face
to face interview revealed that they are interested to buy the same goods from a different seller in the near
vicinity if provided in competitive pricing. The research revealed that the major portion of the customers
are working class and the next comes from the age group 50-70 .Weekends are proved to have peak sales.
The research outcome implies that the prospective customer is willing to pay for the liquor wine and beer
and they never wanted to avoid going after next best means for enjoyment. According to them it is
inevitable at least on weekends and parties

Current state of industry

The current state of this industry is not really bad even in the severe financial crisis. When the people are
not having plenty of money to chill out in the pubs which is more expensive ,they will buy liquor from
shops and consume it in the house .This is positive to the prescribed business. Experience of one of the
partner as sales person in 7 eleven store in Melbourne for an year will be an added advantage in customer
handling and shop sales. Dealing with suppliers and competitors will be another tasking front of us but we
like to take it as a challenge .

Trends and seasonal factors always affect the proposed business. Sales will be more in some seasons or in
connection with some celebration or national holidays. Weekends are expected handsome sales .Arrival
of new brands in the market will affect the market but it is not expected to reduce sales but it may boost
up the sales.

Market Size and Trends

Size of the total market is $150000-250000 in a month on an average. Our aim is to capture 30 % of the
market initially and then gradually capture 60 to 70 % of the total market. At present the customers who
are buying from Safeway is our main target market

SWOT ANALYSIS

Strength

Without food and alcohol Melbournians cannot celebrate their weekends and birthdays or any functions.
According to a recent study major portion of working class are main consumers of alcohol. Irresespective
of the gender, the people of Melbourne are addicted to smoking and alcohol.

Opportunity to open few more shops in different suburbs in Melbourne

High income group people are the inhabitants of Coburg North suburb

Weakness

Lack of experience in running such a business

Lack of adequate finance

Competitor are well established

Fewer parking spaces

Opportunities

Only one competitor in the market

Easy to capture nearly half of the total market

Experience gaining through this business will help to open new shops of similar type in different suburbs

Experience in customer handling Threats

Competitors is well established .So he may be ready to cut the price to maintain his customers

Chance for future competitor

Competition and competitive advantage

Major competitors

Safe is the only competitor we have to compete with .The pricing stategy they follow is more or less
similar as a monopolistic market because there is no competitors to them .Parking space they offer is
good and customer handling is satisfactory.

As our business selling the same product to that of our competitors there is no competitive advantage in
case of the quality of the product. But in case of the pricing strategy ,competitive pricing and excellent
customer service and free home delivery for a purchase over 200 dollars will be our competitive
advantage. That is the main comparative merit on us

MARKETING PLAN

The main marketing media will be local news paper as the target market is only a suburb. Distributing
leaflets through out houses the prospective customers can be informed about the new liquor shop and its
features.

Sponsoring of some local events also under consideration for the promotion of the business. Approximate
cost will be 20000 dollars including sponsoring a local event Offers on the weekends for some of the
products is another marketing technique that is to be adoted

Pricing Stategy

Pricing strategy will be competitive pricing as it we have to capture the market and the competitor is
strong .Competitor is a well established chain of supermarket and got other merits as well there is no
chance to adopt a policy other than this

Maintaining customer relations

Warm welcome to all the customers ,Prompt service ,special attention in dealing with people who look
under 18 on asking for the age proof ,prompt home delivery for the customers buying large quantity are
the means to maintain good customer relation .When compared to our competitor ,Safe way ,a Woolworth
subsidiary, creating personal intimacy with customer will be possible for us as we are dealing with them
all the time whereas the persons at customer service desk will be changing from time to time.

OPERATIONAL PLAN

Equipment owned
Forklift, freezers, till, scanner

Timely checking of the machinery should be ensured for the proper functioning of the business

Staffing

No additional staff required as we have five partners. Two of them supposed to be silent partners and the
other three will be active in the business. Two of the partners have got experience in customer handling
experience in similar field will be an added advantage

Occupational health and safety -Safety measures like fire alarms , safety west and boots to
employees/partners ,safety signs in the warehouse regarding fork lift in use and other safety signs
required ,insurance to employees(parners) are the very important and leagally entitled to maintain
.Instructions and training to employees regarding this are to be given. Adequate training on Heavy lifting
and lifting techniques to the employees are to be given so as o meet the occupational helth and saftety
standards

Dining facilities ,changing rooms and toilets ,other storage facilities ,emergency washing facilities
,drinking water, for employees and cooling system, aisle ways and passage ways and workplace
cleanliness , seating ,exit doors in case of fires are the essential requirements which is are to be
maintained by law