Start Up Decisions and Adjustments - Coursework Example

First, the business purchased the Green Theme Furniture for the business at $4,000 as opposed to the used furniture that whose cost was $2000 and the auto four high capacity espressos for $6000 as opposed to a two-cup espresso machine whose price was $3000. Such decisions came with an added cost as well as an added advantage; for instance, though the four-cup espresso maker was expensive, it was 30% faster than the two-cup espresso, thus guaranteeing fast and effective while serving customers, and therefore, lowering the demand for a large number of servers.

In addition, the green theme furniture choice was aimed at attracting a wide variety of customers. Our business is located in a busy street, which includes businesspeople, students, and staff. Therefore, the furniture is supposed to fit their status and act as an attraction to many customers. In staff recruitment, we started with two managers, but later on added one more because the cafe opened on weekends. Six servers were hired and each was paid $7.75 per hour, however, their salaries were increased to $9.

00 per hour as an effort of motivating them and avoiding the high turnover rate. The managers were paid $650 a week; however, their wages were increased to $670 to maintain them and reduce the rate of quitting. The prices of coffee were as follows, the small cup at $2.00, medium cup at $3.00 and the large cup went for $4.00. With the above prices, business was favorable and our customers suggested that our prices were great; however, there were long queues due to demand. The management decided to offer coffee in three different sizes as a means of product differentiation, whereby, this service differentiated our cafe from the rest by catering for all kinds of customers.

In advertisement and promotion, the business preferred only newspaper for a start in order to minimize on costs. The operations decisions included opening hours, which raged from 9am to 9pm as from Monday to Saturday; however, the management wished it had changed the opening hours from 9am to 8am in order to serve the ‘early birds’. If this decision had been made early enough, the cafe would have made some extra income. Nevertheless, there was no need of an insurance cover at first, as it was expensive; but with time, it will be considered.

The business decision to purchase organic coffee was a tough one, as it is expensive compared to normal coffee. However, for the sake of our customer’s health, we had to compromise. Nevertheless, the prices should have changed due to the high price of organic coffee. Therefore, the small coffee cup increased by one dollar as the medium one increase by 50cents while the large cup remained the same. These changes are aimed at increasing revenues, while at the same time considering customers’ affordability; hence, the prices are not too high.

Final modification on the business plan The main aim of this cafe business is to attract, satisfy, and retain customers, as they are the key to the success of business. The more customers the cafe retains, the more profits it accumulates. Therefore, the business is determined to maintain its position as the cost leader and still offer unique services, as strategies of attracting customers. The customer survey reports rate our customer satisfaction at 57%, which is somehow favorable;