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Never Enough Cafe Business - Example

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This café aims at providing impeccable services to our customers. During its operation, it has focused mainly on product and service differentiation strategy and the cost leadership strategy aimed at maximizing…
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Extract of sample "Never Enough Cafe Business"

Running head: BizCafe Business Plan Insert Insert Insert 25 August “Never Enough Café” Business Plan Executive summary Never Enough Cafe has been in business for the past one month. This café aims at providing impeccable services to our customers. During its operation, it has focused mainly on product and service differentiation strategy and the cost leadership strategy aimed at maximizing profits. The business has shown a significant rise from 40% to 55 % in customer satisfaction. However, it has also been faced with employee turnover, customer complains and low returns. This business plan takes us through the Never Enough Café’s journey since birth to growth. This business has mimicked the production curve throughout its existence. The marketing plan plays a vital role in determining areas of improvement and the appropriate measures. The main aim of any business is to make profits; this is not an exemption, therefore, these strategies aim at improving the status of the business. 1.0 Company description Never Enough Café is a small business, which has been in existence for over a month. The main aim of this café is profit making, and its mission statement includes “to ensure that our customer’s professional and courteous service, by selling remarkable coffee at fair prices and maintaining a clean and comfortable space for our customers and staff; to consistently provide our customers with impeccable service by demonstrating warmth, graciousness, efficiency, knowledge, professionalism and integrity in our work, with a focus on style and hygiene.” The main objective of the business is to attract customers by offering the best services, with an aim of increasing revenues. This business specializes in only one beverage, which is coffee, but which varies from coffee latte, coffee black to cappuccino. The company is in its growing stages and has 10 employees among which three are managers while the rest are servers. The manager’s salaries are $670 while the servers are paid $9.00 an hour. The business operates six days in a week and recently changed its opening hours to 8.am as opposed to 9.am. The current prices of our coffee are as follows; small cup at $3.00, medium cup at $3.50, whilst the large cup goes for $4.00. This business has adopted the differentiation strategy, which enables it to be unique in terms of its products and services, for instance, by offering a variety of different type of coffee and in different sizes so as to cater for all types of customers. In addition, the café possesses a four-cup automatic espresso, which contributes to effectiveness when catering many customers. The café is also insured and has adopted a logo, which is visible on the coffee cups. The café markets its product via the newspaper at $200 per day and on the radio twice per day at $560. The café is located on the main street, therefore targeting a variety of customers, who include university students, the university staff, downtown entrepreneurs, and their clients. 2.0 Market analysis Marketing analysis is used as a tool by businesses aiming at understanding their operating environment better. According to the local labor news, the average manager’s wages is at $635 per week while the server’s wages are at $8.88 per hour. Nevertheless, our café pays the employees above the local average rates, such that, servers are paid $9 per hour while managers are paid $670 per week. In addition, the average turnover rate is low in the market as it is at 14%; our café has not had major issues with turnover as only one server has quit since the business started. We opted to offer our employees on-the-job training, which is cheap and effective. The employee salaries have always been reviewed and increased when necessary, according to Lathan (2009, p.78), motivated employees result to higher performance, which in return increases a company’s productivity. In period six, the customer satisfaction rate was at 54%, while the industry average customer’s satisfaction rate was at 62%; however, in the seventh period, the satisfaction rate increased to 55%, an indication of improvement in our business. However, with the industry rate at 63% of satisfied customers, our business has a long way to go, therefore, a need for more strategies aimed at customer satisfaction are necessary. 3.0 Products and services. The local labor report states that our café offers great services and great coffee. Our main product is coffee but in varieties such as black, latte, and capuchinno. Importantly, our servers are provided with on-the-job training, which includes effective customer care. Our coffee is served in different sizes; small cup at $3, medium cup at $3.50, and large cup at $4.00. The different sizes of the coffee are a strategy aimed at catering for customers of all status, such that they can purchase coffee to their affordability. The differentiation strategy aims at differentiating our café from the rest by offering unique services. Differentiation strategy ensures that a business provides unique product or services to its customers to attain a competitive advantage whilst competing with its competitors (Hitt, Ireland & Hokisson, 2009, p.117). 4.0 Operations Never Enough Café operating hours range from 8am to 9pm from Monday to Saturday. Our café does not open on Sundays as the customers are not in plenty and our staff needs rest after a busy week. So far, our café has an estimated capacity of 2,048; however, our inventory stands at 45,310. Nevertheless, we do not plan to increase the inventories, but aim at maximizing on sales. The bulk purchasing was preferred, as it is cheap and cups come with a logo on them. However, an urgent purchase requires buying cups from the nearest shop, but without a logo. In addition, the café opted for organic coffee unlike the normal coffee, which is made of many chemicals, thus being harmful for the customer health. 5.0 Marketing plan A marketing plan involves different strategies that are considered with an aim of attracting customers to your business. In addition, a marketing plan consists of situational analysis, a target audience, goals, strategies, and a target (Tassiopoulos, 2009, p.132). The Never Enough Café currently operates under the product differentiation and cost leadership strategy, however, we still face the challenge of customer satisfaction as we are below the industry average rate. This is due to the stiff competition from our competitors, in the fight for a competitive advantage. This café aims at attracting customers of all genders and status. That is why our coffee is of different types and sizes to fit any of our customers. We aim at attracting more customers through advertising and improving on our product and services. One step that we have taken is including a live jazz band as a form of entertainment for our customers. This will be a major source of attraction to our customers, hence increasing on sales in the coming month. As per now, the business will focus on differentiation strategy with an aim of attracting more customers. The employee’s welfare needs to be considered, in that, it is necessary to increase their salary in order to attain satisfaction and avoid high turnover rates. In addition, we are cutting down on costs and do not intend increasing our inventories, so that we can increase on sales. Nevertheless, the hired jazz band has attracted many customers so far, therefore, there is need to consider more of such functions in the future. 6.0 Ownership structure The Never Enough Café is owned by a team of students, therefore making it a general partnership. The students run the business with turns and contribute their skills and labor hence sharing the profits and losses, if any. Each member is held liable for the business, which is the main advantage. In addition, it is simple to operate as various ideas are contributed. However, the disadvantage of such a partnership is that all members are liable for losses, debts and legal issues; even though one member’s mistake contributed to these losses. Nevertheless, work is shared and there is mutual support and motivation among members. 7.0 Management and personnel Currently, the café has only ten employees, three managers, and seven servers; however, the number of servers is low compared to the demand of customers. Therefore, customers are constantly complaining of long queues. Employee satisfaction is very important, as it yields to productivity of a business through increased performance. Therefore, not only are additional servers needed but also a boost on employee salary is required. As the customers increase, they need to feel content by being well attended to; therefore, they gain loyalty and prefer our café as compared to others. The managers are enough as per now; however, they require training to deal with pressing issues in the office. Their salary needs to be reviewed as well, since they play a major role in stabilizing the business. The Adam’s equity theory entails that there should be a balance between employees inputs, for instance, hard work and an employee’s output, which involves salaries and benefits. A fair balance between inputs and outputs contribute to increased organization’s productivity, and motivated employees (Pahl, Hinze & Richter, 2009, p.7). 8.0 Funds required and expected use. To fulfill the current marketing plan, funds are required. These funds are currently aimed at improving the current mode of employee training. In the second period of this business, a variety of suggestions on the mode of training was referred to us; however, we decided to stick with the on job training to avoid extra expenses. However, in order to increase employee effectiveness, there is need for a training program, which costs $50 per employee, hence adding up to $500 for all employees. Impeccable service is our goal; therefore, we will stop at nothing until we achieve that. Most are the times when our employees are overworked due to the large number of customers, hence ending up being overworked. It is however our duty to ensure that they receive proper pay and remuneration. Therefore, the management is considering increasing the manager’s salaries from $670 to $730 per week, while the servers’ salary will be increased from $9 to $10. However, we need enough funds to cater for these needs. In addition, the toilet needs to be replaced at $600 cost. It is worth noting that at start up, our customer satisfaction rate was at 40%, and in the eighth period stands at 55%. It is important to have some money set aside for emergencies that would cost the customers, for instance, the maintenance of the coffee espresso machine, or electrical fault. In addition, a coffee roaster needs to be purchased at $2,400, with an aim of improving on the coffee’s aroma. In conclusion about $5,000 is needed. 9.0 Financial statements and projections The current financial health of our business is not admirable, as we have too much inventories, however, we will focus on sales in order to maximize on returns. Therefore, we will limit on the inventories to avoid outdated stock, which could yield to losses, hence hindering business development. One of the major concerns is the low demand of the large coffee cup; however, by increasing the other prices and leaving its price stagnant, there is hope for greater sales. This café is aimed at achieving a balance in output and inputs and yielding to returns. We seek to increase our net income via increasing the sales, therefore attaining an effective balance sheet. References Hitt, M. Hoskisson, R. and Ireland, R. (2009). Strategic management: competitiveness and globalization: concepts & cases. Edition 8. OH: Cengage Learning Publisher. Retrieved from http://books.google.co.uk/books?id=ul5FsIlWa3EC&pg=PA117&dq=cost+leadership+and+differentiation&hl=en&ei=QsQ7TsHODcvC8QO-1OQ-&sa=X&oi=book_result&ct=result&resnum=4&ved=0CD0Q6AEwAw#v=onepage&q=cost%20leadership%20and%20differentiation&f=false Latham, G. (2009). Becoming the evidence-based manager: making the science of management work for you. NY: Nicholas Brealey Publishing. Retrieved from http://books.google.co.uk/books?id=uRwOb_pz2AAC&pg=PA78&dq=motivational+tools+for+employees&hl=en&ei=PNFETrqBJ4mY8QOIhY3IBg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CEEQ6AEwAA#v=onepage&q=motivational%20tools%20for%20employees&f=true. Pahl, N., Hinze, A. and Richter, A. (2009). Options for Variable Compensation. Berlin: GRIN Verlag Publishers. Retrieved from http://books.google.co.uk/books?id=aAITZ0dm4-wC&pg=PA7&dq=adam%27s+equity+theory+and+herzberg+motivation+theory&hl=en&ei=ir9UToPFcbsOdnisZoG&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC4Q6AEwAA#v=onepage&q=adam%27s%20equity%20theory%20and%20herzberg%20motivation%20theory&f=true Tassiopoulos, D. (2009). New tourism ventures: an entrepreneurial and managerial approach. New Delhi: Juta and Company Ltd Publishers. Retrieved from http://books.google.com/books?id=eL6EJrb5LUAC&pg=PA132&dq=definition+of+a+marketing++plan&hl=en&ei=xCpWTpaLIMqa8QPn4dHIDA&sa=X&oi=book_result&ct=result&resnum=6&ved=0CFEQ6AEwBQ#v=onepage&q=definition%20of%20a%20marketing%20%20plan&f=true Read More
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