Financial Planning: Business Plan

Coffee Café
 Business Plan

Business name: Coffee Café/

Owners: Delos Reyes, Vanessa Joyce

Espinase, Geraldine
Ortega, Ivanne Ron
Paner, Brian Joseph
Sarabia, Melissa Daphne
Prof. Fabregas

Coffee Café
Table of Contents

Executive Summary...........................................................................................................................4
Objectives..............................................................................................................................................4
Mission...................................................................................................................................................5
Keys to Success....................................................................................................................................5
Marketing plan....................................................................................................................................6
Market Segmentation...........................................................................................................................6
Market Analysis.....................................................................................................................................7
Target Market Segment Strategy........................................................................................................7
Market Needs........................................................................................................................................7
Competition............................................................................................................................................8
Buying Patterns.....................................................................................................................................8
Products..............................................................................................................................................9
Product Description..............................................................................................................................9
Sales Literature.....................................................................................................................................9
Strategy and Implementation Summary......................................................................................10
Competitive Edge................................................................................................................................10
Sales Strategy.....................................................................................................................................10
Sales Forecast....................................................................................................................................11
Management Summary...................................................................................................................12
Management Summary......................................................................................................................12
Management Team............................................................................................................................12
Personnel Plans..................................................................................................................................12

Coffee Café
 Executive Summary

Coffee Cafe is determined to become a daily necessity for local coffee addicts, a place
to dream of as you try to escape the daily stresses of life and just a comfortable place to
meet your friends or to read a book, all in one. With the growing demand for high-quality
gourmet coffee and great service, Coffee Café will capitalize on its proximity to the
universities and offices to build a core group of repeat customers. Coffee Café will offer
its customers the best prepared coffee in the area that will be complimented with
pastries, as well as free books that its patrons can read to enjoy their visit.

Year 3
Highlights

Net Profit
Year 2
Gross Margin
Sales

Year 1

- 1,000,000 2,000,000 3,000,000 4,000,000

Objectives

Coffee Café’s objectives for the first year of operations are:

 Become selected as the "Best New Coffee Bar in the area" by the local
restaurant guide.
 Turn in profits from the first month of operations.
 Create a solid concept in the industry and track performance in order to begin
expanding to other markets within six months.

Coffee Café
Mission

Coffee Cafe will make its best effort to create a unique place where customers can
socialize with each other in a comfortable and relaxing environment while enjoying the
best brewed coffee and pastries in town. We will be in the business of helping our
customers to relieve their daily stresses by providing piece of mind through great
ambience, convenient location, friendly customer service, and products of consistently
high quality. Coffee Cafe will invest its profits to increase the employee satisfaction
while providing stable return to its shareholders.

Keys to Success

The keys to success will be:

 Store design that will be both visually attractive to customers, and designed for
fast and efficient operations.
 Employee training to insure the best coffee preparation techniques.
 Marketing strategies aimed to build a solid base of loyal customers, as well as
maximizing the sales of high margin products, such as espresso drinks.
 Highly trained and friendly staff.

Coffee Café
 Marketing plan

Market Segmentation

Coffee Cafe will focus its marketing activities on reaching the students, people working
in offices located close to the coffee bar and on Market Analysis
senior citizens. Our market research shows that
these are the customer groups that are most likely to
buy coffee and pasytry products. Since gourmet Office Workers 0.45
coffee consumption is universal across different Students 0.25
income categories and mostly depends on the level
Seniors 0.2
of higher education, proximity to the universities on
the proximity area will provide access to the targeted Others 0.1
customer audience.

Coffee Café
The chart above and table below outline the total market potential (in number of
customers) of coffee drinkers in Coffee Café – Quezon Ave.

Market Analysis

Year 1 Year 2 Year 3 Year 4

Customers Growth
Offi ce Workers 3.0% 20250 20857.5 21483.225 22127.7218
Students 1.0% 11250 11362.5 11476.125 11590.8863
Seniors 2.0% 9000 9180 9363.6 9550.872
Others 0.0% 4500 4500 4500 4500
Total 1.2% 45000 45900 46822.95 47769.48

Target Market Segment Strategy

Coffee Café will cater to people who want to get their daily cup of great-tasting coffee in
a relaxing atmosphere with a deep satisfaction in the aroma of our pastries. Such
customers vary in age, although our location close to the University campus means that
most of our clientele will be college students and office workers. Our market research
shows that these are discerning customers that gravitate towards better tasting coffee.
Furthermore, a lot of college students consider coffee bars to be a convenient studying
or meeting location, where they can read or meet with peers without the necessity to
pay cover charges. For us, this will provide a unique possibility for building a loyal client
base.

Market Needs

General trend toward quality among consumers definitely plays an important role in the
recent growth in coffee. Additionally, such factors as desire for small indulgencies, for
something more exotic and unique, provide a good selling opportunity for coffee bars.

Our market is made up of consumers who have busy schedules, a desire for quality,
and disposable income. As much as they would like the opportunity to sit in an upscale
coffee house and sip a uniquely blended coffee beverage and read the morning paper,
they don't have the time. However, they still have the desire for the uniquely blended
beverage as they hurry through their busy lives.

Coffee Café
Competition

There are general competitors in Coffee Café market. They are the national specialty
beverage chains, such as Starbucks and Coffee Bean, local coffee houses--or cafes--
with an established clientele and a quality product, fast food restaurants, and
convenience stores.

Patrons to a Starbucks, or to one of the local cafes, are looking for the "experience" of
the coffee house. They want the ability to "design" their coffee, smell the fresh pastry,
listen to the soothing music, and read the local paper or visit with an acquaintance. It is
a relaxing, slow paced environment.

Patrons of the fast food restaurants or the convenience stores are just the opposite.
They have no time for idle chatter and are willing to over-pay for whatever beverage the
machine can spit out, as long as it's quick. They pay for their gas and they are back on
the road to work. Although they have the desire and good taste to know good from bad,
time is more valuable to them.

Buying Patterns

The major reason for the customers to return to a specific coffee bar is a great tasting
coffee, quick service and pleasant atmosphere. Although, as stated before, coffee
consumption is uniform across different income segments, Coffee Café will price its
product offerings competitively. We strongly believe that selling coffee with a great
service in a nice setting will help us build a strong base of loyal clientele.

Coffee Café
 Products

Coffee Cafe will offer its customers the best tasting coffee beverages in the area. This
will be achieved by using high-quality ingredients and strictly following preparation
guidelines. The store layout, menu listings and marketing activities will be focused on
maximizing the sales of higher margin espresso drinks. Along with the espresso drinks,
brewed coffee and teas, as well as some refreshment beverages, will be sold in the
coffee bar. Coffee Cafe will also offer its clients pastries, hot chocolates and teas.

Product Description

The menu of the Coffee Café will be built around espresso-based coffee drinks such as
lattes, mochas, cappuccinos, etc. Each of these coffee beverages is based on a 'shot' of
espresso, which is prepared in the espresso machine by forcing heated water through
ground coffee at high pressure. Such espresso shots are combined with steamed milk
and/or other additives like cocoa, caramel, etc., to prepare the espresso-based
beverages. Proper preparation techniques are of paramount importance for such drinks.
A minor deviation from the amount of coffee in the shot, the size of the coffee particles,
the temperature of milk, etc., can negatively affect the quality of the prepared drink.

Sales Literature

Flyers will be distributed in the adjacent neighborhood, on the University campus, at the
malls and in the selected office buildings within two weeks prior to the opening of Coffee
Cafe. Subsequently, free postcards with Coffee Cafe endorsement will be printed to
increase the company visibility among the patrons.

Coffee Café
 Strategy and Implementation Summary

Coffee Café’s marketing strategy will be focused at getting new customers, retaining the
existing customers, getting customers to spend more and come back more often.
Establishing a loyal customer base is of a paramount importance since such customer
core will not only generate most of the sales but also will provide favorable referrals.

Competitive Edge

Coffee Café will position itself as unique coffee bar where its patrons can not only enjoy
a cup of perfectly brewed coffee but also spend their time in an ambient environment.
Comfortable sofas and chairs, dimmed light and quiet relaxing music will help the
customers to relax from the daily stresses and will differentiate Coffee Cafe from
incumbent competitors.

Sales Strategy

Coffee Cafe baristas will handle the sales transactions. To speed up the customer
service, at least two employees will be servicing clients--while one employee will be
preparing the customer's order, the other one will be taking care of the sales
transaction.

In order to build up its client base, Coffee Café will use banners and fliers, utilize
customer referrals and cross-promotions with other businesses in the community. At the
same time, customer retention programs will be used to make sure the customers are
coming back and spending more at the coffee bar.

Coffee Café
Sales Forecast

The chart and table below outline our projected sales forecast for the next four years

Monthly Sales
Php1,200,000
Php1,000,000
Php800,000
Php600,000
Php400,000
Php200,000
Php0

Beverages Pastries

Sales Forecast

Sales Year 1 Year 2 Year 3 Year 4

Beverages Php432,000 Php475,200 Php496,800 Php540,000.00
Pastries Php276,000 Php303,600 Php317,400 Php345,000.00
Total Sales Php708,000 Php778,800 Php814,200 Php885,000.00
Cost of Goods Sold Year 1 Year 2 Year 3 Year 4
Beverages Php172,800 Php190,080 Php198,720 Php216,000.00
Pastries Php110,400 Php121,440 Php126,960 Php138,000.00
Subtotal Cost of Goods Sold Php283,200 Php311,520 Php325,680 Php354,000.00

Coffee Café
 Management Summary

Management Summary
Coffee Café is owned by the partnership of Bachelor in Banking and Finance alumnus
of Polytechnic University of the Philippines, Manila. They are: (1) Vanessa Joyce Delos
Reyes, (2) Geraldine Espinase, (3) Ivanne Ron Ortega, (4) Brian Joseph Pañer, and (5)
Melissa Daphne Sarabia.

A professional manager (Php 192,000/yr) will be hired who will oversee all the coffee
bar operations. One full-time barista (Php 180,000/yr each) will be in charge of coffee
preparation. Four more part-time employees will be hired to fulfill the staffing needs.

Management Team
A full-time manager will be hired to oversee the daily operations at Coffee Cafe. The
candidate (whose name is withheld due to his current employment commitment) has
had three years of managerial experience in the definitely industry in Manila. This
person's responsibilities will include managing the staff, ordering inventory, dealing with
suppliers, developing a marketing strategy and perform other daily managerial duties.
We believe that our candidate has the right experience for this role. A profit-sharing
arrangement for the manager may be considered based on the first year operational
results.

Personnel Plans
The table below outlines the personnel needs of Coffee Café.

Year 1 Year 2 Year 3 Year 4

Manager PhP192,000 PhP198,000 PhP198,000 PhP204,000
Barista PhP180,000 PhP180,000 PhP192,000 PhP198,000
Employees(4) PhP624,000 PhP624,000 PhP648,000 PhP672,000
Total People 6 6 6 6
Total Payroll PhP996,000 PhP1,002,000 PhP1,038,000 PhP1,074,000

Coffee Café
Coffee Café