Java Coffee Shop Overview - Example

Fuad, Mohammed, and Senura] [Partner] [Java Coffee Shop] [Burwood 3125 Victoria] ABN: [87-345-298520] Java Coffee Shop Business Plan Table of Contents Executive Summary 3 The Business 3 The Market 3 The Future 3 Goals/objectives 3 The Finances 3 Introduction 4 Business details 4 Registration details 4 Business premises 4 Legal considerations 4 5 Management and Ownership 5 Innovation 5 Operations 6 Organisational Structure 6 Organisation chart 6 Key personnel 6 Insurance 9 Sustainability plan 10 The Market 10 Products/services 10 Market research 11 Market targets 11 Environmental/Industry analysis 11 Customers 11 S.W.O.T. analysis 12 Competitors 13 Advertising & sales 14 The Future 15 Vision statement 15 Mission statement 15 Goals/objectives 15 Action plan 15 The Finances 16 Risk management 16 Key objectives & financial review 16 Assumptions 17 Start-up costs for 2015 18 Operating Budgets 19 Budgeted Income Statement 19 Budgeted Balance Sheet 20 Budgeted Cash Flow Statement 20 Break-even analysis 22 List of References 24 Appendices 25 List of References Error: Reference source not found Appendices Error: Reference source not found Executive Summary The Business Business name: Java Coffee Shop Business structure: Partnership ABN: 87-345-298520 Business location: Burwood 3125 Victoria Date established July 1, 2015 Business owner(s): Fuad, Mohammed, and Senura Relevant owner experience: The three partners have minimal experience in the business but aims to employ experienced personnel to oversee the business. Fuad will deal with general management, financials and human resource. Mohammed will oversee kitchen operations while Senura will deal with procurement and marketing. Products/services: The products will be food and beverages The Market Target market: The people who are seeking for place to socialise and businesspersons Marketing strategy: Java Coffee Shop will use online, website, brochures to target and engage the customers The Future Vision statement: Java Coffee Shop aims to be a social place where relations and businesses can be build Goals/objectives The goals are: Cost effective process – the cost of production should be 30% of sales Effective waste management through the use of technologies Increase sales by more than 10% annually The Finances The initial start-up capital will be $300,000. The profits will be around 67% while 33% will be the cost of production. The partners in equal amounts will contribute the entire capital. Introduction Business details Products/services: Java Coffee Shop will sell food and beverages (Hess and Goetz 2008). The major product is coffee and other products and services will be provided to complement the coffee. Coffee has been consumed during meetings and other planning activities meaning that the demand is high. Registration details Business name: Java Coffee Shop Trading name(s): Java Coffee Shop Date registered: July 1, 2015 Location(s) registered: Burwood 3125 Victoria ABN: 87-345-298520 Domain names: www.javacoffeeshop.com Business structure: The business will be a partnership among the three partners. It is easier to set up partnership form of business structure and it is also easier to adhere with the specified regulations. Business premises Business location: The business is proposed to be open around Burwood 3125 Victoria and the required space is between 2100 – 2700 sq. Ft. The Burwood 3125 Victoria is busy and it is within a distance to other coffee shops. Buy/lease: Leasing will be the appropriate approach in acquiring the building. The contract will factor into consideration a minimum of seven years leasing. The rent will be paid quarterly and the space should contain basic utilities. The basic utilities include water, electricity, sewage lines and should be on the ground floor. Legal considerations The following are some of the legislations that will influence the business: Employment and labour laws Health, safety and occupation legislations Taxation and other forms of government revenue generation Permits, licences and business operation legislations Partnership agreements Management and Ownership Names of owners: Fuad, Mohammed, and Senura Details of management & ownership: The partners will be operating the business. Fuad will be the manager business he has background in hotel management. Fuad will also be responsible for financial and human resource. Mohammed will be responsible in ensuring the foods are delivered to the customers within the appropriate time. Mohammed ensures the kitchen operates optimally and has knowledge in customer service. Senura will be responsible in ensuring the products are delivered within the specified time. Senura will engage the suppliers and double as the marketer for the business. The partnership will be based on a contract in which each individual role and responsibilities are clarified. Moreover, the partners will own equal share in the business. Skills, experience and qualifications: Fuad, Mohammed, and Senura have extensive experiences in their different roles in the partnership. Even though lack of skills document is absent, the partners have the skills to accomplish the required activities (Lewis 2011). The partners will employ qualified people to provide support in managing and running the business. Innovation Research & development (R&D)/innovation activities R&D is important in championing change and encouraging creativity. The partners will continue to research on best practices on the different sectors in the shop. For example, the marketing person will seek to employ model and cheaper methods in engaging with the customers. The approach applies to other sectors within the coffee shop. Operations Organisational Structure Organisation chart The following is the organisation chart Key personnel Current staff Job Title Name Expected staff turnover Skills or strengths Marketing/ Procurement Senura NA NA Manager/Finance/Human Resource Fuad NA NA Kitchen Mohammed NA NA Chief Chef Paul 18 months Diploma in food production; at least 6 years in kitchen work Marketing James 12 months Diploma in Marketing/Sales; knowledge of modern marketing tools; 2 years experience Dinning Supervisor Catherine 12 months Diploma Customer Care; knowledge of the industry; 1 year experience Procurement Richard 18 months Diploma Procurement Course; knowledge of the industry; 1 year experience Required staff Job Title Quantity Expected staff turnover Skills necessary Date required Waiters 4 18 months Relevant qualifications in hotel industry August/2015 Kitchen chef 2 15 months Experience in cuisines and different forms of cooking/baking/coffee making August/2015 Cleaner 1 12 months Experience in the industry August/2015 Cashier 1 12 months Basic knowledge in accounting and experience in the industry August/2015 Recruitment options The strategy used will be online since the applicants will be able to post their resume and be updated on the progress. The advantage of online is easiness of use and requires minimal resources. Training programs The training will be in-house, in which the employees will have to understand the culture and their respective expectations. With time, the employees will be assisted to attend courses and seminars to improve their efficiency and be updated on new skills. Skill retention strategies The responsibilities will be clarified based on the contracts that will be signed. The management will encourage effective communication and seek means in which current skills can be improved. In addition, compensation will be favourable to the employees. Moreover, other benefits such as sick leave will be provide to retain the employees. Service process The chefs will process the food and beverages and the waiters serve the customers. The waiters have to understand their respective roles and ensure the customers are satisfied. Suppliers The major suppliers are the business entities that will supply the ingredients. For example, coffee, sugar and other products that are important to fulfilling the requirements of the shop. Effective engagement and communication will be used as mechanism of creating good and lasting positive relationship. Assets required Plant & equipment The following are some of the equipments required to operate the business. Equipment Purchase date Purchase price (AU$) Running cost (AU$) Coffee maker machine July 15, 2015 500 NA Cooker July 15, 2015 1,000 NA Fridge July 15, 2015 1,500 NA Utensils (variety) July 15, 2015 3,000 NA Oven July 15, 2015 500 NA Furniture July 15, 2015 3,000 NA Assistive equipments e.g. blender July 15, 2015 5,000 NA Total Cost 14,500 Inventory Inventory item Unit price Quantity in stock Total cost (AU$) Coffee beans 8,000 Tea 4,000 Bakery products 4,000 Perishable foods 3,500 Cereals 2,500 Spices 1,000 Others 10,000 Total cost 33,000 Technology (Software): The following are some of the software that will be applicable. The website, accounting package, point of sale software, customer relations management software, human resource software and store keeping software. The software will be bought and customised within the premise. The expected cost of all the software is $5,000; if it exceeds this amount, some of the software will not be acquired. Trading hours: The Java Coffee Shop will be opened daily throughout the week. The opening hours will be 6 am and the shop will be closed at 10 pm. The afternoon hours will be more profitable because of the meetings and other activities associated with business individuals. The cold seasons will also be profitable because people will require warm drinks to counter the cold. Communication channels: The customers will be engaged through use of email, telephone, shopfront, social media and the website. Payment types accepted: The payment methods will be cash and credit/debit cards Credit policy: The business will not have a credit policy because all activities will be based on payment after consumption of the service/product. Warranties & refunds: If the customers are not satisfied and depending on the nature of complaints, the customer will be refunded the amount used. Quality control: The quality control will be extensive. It will start with vetting the suppliers and checking the quality of the products. The kitchen employees will also be required to check the ingredients before use and effective cooking methods employed to improve the quality of the products. After eating/drinking, the customer will be asked to rate the quality and experience. Memberships & affiliations: The business does not have memberships or affiliations Insurance Workers compensation: The business is planning to have the workers compensation insurance to compensate the employees when problems or challenges occur. Public liability insurance: A general public liability insurance will be taken Professional indemnity: The business is planning to acquire one Product liability: The business is planning to acquire one Business assets: A general insurance will be acquired Sustainability plan Environmental/resource impacts The usage of water is a major issue because water will be used for most of the activities Community impact & engagement The usage of water would affect the amount of water that the community can use (Morris 2008). The business will employ modern approaches such as limiting the amount of water. Action plan Sustainability milestone Target Target date Reduce water consumption 60% reduction [September/2015] Reduce food wastage 50% reduction January/ 2016 The Market Products/services Product/Service Description Price $ Coffee Different varieties of coffee 3.5 Tea Different varieties 2.5 Cuisines e.g. Indian, Lebanese, Chinese 10-30 Western foods e.g. Pizza, shrimp 10-30 Wines Varieties From 10 Market position: The products will be competitive but the environment (e.g. inside the hotel) will be unique because of the decor and fittings Pricing strategy: The 30% of costs will be considered so that around 60% of profits are generated Licences & permits: Some of the licences include alcoholic drinks, food and beverages and business operation permits Market research The market research was through visiting some of the cafes within the vicinity to estimate the number of customers and the food/drinks that they like (Griffin 2010). Most of the information collected was through observation and discussion among the three partners. Market targets The targets are based on number of sales and the number of customers making the purchase. The statistics will be collected weekly and monthly, and the information will be analysed to enable understanding trends. Environmental/Industry analysis The region is growing and the need for creating and sustaining relations has become inherent in business environment that is becoming competitive. Moreover, spaces for holding meetings and discussing ideas are becoming minimal meaning some of these people visits restaurants to fulfil their tasks. The economy of the region is stable and the economy will continue growing. Therefore, the business is viable. Customers Customer demographics The customers are those looking for a social place to cultivate their relationships and an area in which business people can change ideas. Key customers The key customers will be social individuals and businesspersons Value to customer: Food and beverages are basic things. Customer management Customer engagement is an important component in ensuring their requirements and expectations are understood (Ashton 2013). This can be achieved through effective communication and frequent surveys to determine whether the customers are happy. The frequency of the customers and number of the customers will result in development of benefits such as discounts for the frequent customers. S.W.O.T. analysis Strengths Weaknesses Strategically located place Variety of products Well trained and experienced employees Numerous motivational avenues Lack of market awareness Lack of individual experiences of the partners in such a market Solutions Market research and effective marketing strategies ensures the Java Coffee Shop is know and embraced by the customers Opportunities Threats Introduction of technology such as free internet Splitting the area to lounge and dinner places Thinking of introducing exotic drinks Competition Easier for entrants Solution Effective service Variety of products Competitors Competitor details Competitor Established date Size Market share (%) Value to customers Strengths Weaknesses Stream Cafe NA 20 (18 months) 2 Convenience and quality service It has an open kitchen plan; It has a unique quaintness Located in a high volume people area making it inappropriate for people who do not want publicity Cafe Ave NA 15 (15 months) 1 Pricing is good and the environment Attractive to students; it is a concrete floored food place Attractive to students who may lack enough disposable income Loading Zone NA 16 (6 Months) 1 Price is cheaper Good and experienced chef Waiters and customer service is poor Charlotte’s Corner NA 20 (18 months) 3 Cheaper and quality coffee Excellent coffee and atmosphere Sometimes the customer service is poor The Rustic Table NA 17 (12 months) 1 Good coffee, freshly made sandwiches and cakes Friendly stage and selection of delicatessen Car parking challenges Advertising & sales Advertising & promotional strategy Planned promotion /advertising type Expected business improvement Cost ($) Target date Bill board at the door It shows the customers location of the shop 2,000 For ever Online advertising Engage customers and cheaper 4,000 August 2015-August 2016 Brochures Give to the customers and distribute at the door 3,000 August – December 2015 Sales & marketing objectives One of the partners will manage the marketing team (Meyers and Gerstman 2012). Other employees will be employed who have backgrounds in marketing and also have done some marketing with the hotel industry. The marketers will engage the customers and the waiters will be requested to collect random data on whether the customers are satisfied. The sales goals are to make sales of more than UA$1,200,000 within the first year of operation and the amount should increase by 10% annual, thereafter. Unique selling position The coffee and tea will be offered in different forms and types. For example, iced coffee and tea will be available during the warm seasons. The menu will be updated after three months to introduce newer varieties while keeping the most common and appreciated products. It will ensure newer customers are engaged while the already available customers are retained. Sales & distribution channels Channel type Products/services Percentage of sales (%) Advantages Disadvantages Shopfront (takeaways) Food and drinks 25 Reduction of congestion Packaging will be a problem Dinning within the shop Food and drinks 75 Customers can sample different products Congestion at the shop The Future Vision statement Java Coffee Shop aims to be a social place where relations and businesses can be build Mission statement To create an venue that champions hospitality and addresses the requirements of the customers effectively Goals/objectives The goals are: Cost effective process – the cost of production should be 30% of sales Effective waste management through the use of technologies Increase sales by more than 10% annually Action plan Milestone Date of expected completion Person responsible Sales management/records Monthly Finance manager Number of customers visiting the hotel On Friday Dinning manager Review of entire operation processes Monthly All the partners Marketing initiatives Weekly Marketing manager and marketers The Finances Risk management Risk Likelihood Impact Strategy [Description of the risk and the potential impact to your business.] [Highly Unlikely, Unlikely, Likely, Highly Likely] [High, Medium, Low] [What actions will you take to minimise/mitigate the potential risk to your business?] Poor quality ingredients Likely High Checking the quality of the ingredients and vetting the suppliers Poor quality food and drinks Likely High Engaging with chefs on the matter Safety related complications Unlikely Medium Adhering to legislation requirements Theft/ burglary Highly unlikely Low Improving security measures Key objectives & financial review Financial objectives [List your key financial objectives. These can be in the form of sales or profit targets. You could also list your main financial management goals such as cost reduction targets.] The cost of production should be 30% of the sales Cost for utilities should account for 10% of entire expenses The yearly net profit should be more than 60% of the sales The salaries should account to 20-30% of the sales Finance required The initial capital is AU$ 300,000. Each of the three members will be required to contribute AU$ 100,000. Therefore, external source of funds will not be required to accomplish the requirements of starting the business. Assumptions The financial tables on the subsequent pages are based on the assumptions listed below: The economic activity stabilise e.g. absence of recession The cost of production is 30% of sales The salaries and other employee compensation will be reviewed based on the successes of objectives Start-up costs for 2015 Operating Budgets Budgeted Income Statement Budgeted Balance Sheet Budgeted Cash Flow Statement Break-even analysis Conclusion The name of the business will be called Java Coffee Shop that will deal with production of food and beverages but will concentrate on coffee. The business will be partnership among the three owners in which each individual will be required to contribute equally to raise an initial capital of $300,000. The partners will employ experts who will assist in managing the business and running the operations. The targeted customers are those individuals looking for social place and business individuals. The cost of production is expected to be around 33% of total sales while the rest are the profits. List of References Ashton, R 2013, How to Start Your Own Business for Entrepreneurs, London, Pearson UK. Griffin, D 2010, Business with a Purpose: Starting, Building, Managing and Protecting Your New Business, London, Easy Brain Labs Inc. Hess, E, and Goetz, C 2008, So, You Want to Start a Business? 8 Steps to Take Before Making the Leap, Washington, FT Press. Lewis, J 2011, Starting a Part-Time Food Business: Everything You Need to Know to Turn Your Love for Food Into a Successful Business Without Necessarily Quitting Your Day Job, New York, Rabbit Ranch Publishing. Meyers, H, and Gerstman, R 2012, Business Ours: Starting Out and Building Your Own Business, London, Tate Pub & Enterprises Llc. Morris, M 2008, Starting a Successful Business: Start Up and Grow Your Own Company, London, Kogan Page Publishers. Appendices Reflection Fuad Fuad did the financials and human resource requirements Mohammed Did the most of the other parts with support and collaboration with other group members Senura Senura did the marketing and procurement requirements Read More