The Melbourne Coffee Plaza - Case Study Example

THE MELBOURNE COFFEE PLAZA Executive Summary The Melbourne Coffee Plaza is a full-service coffee cart located in Melbourne, Australia. The restaurant features a full menu of fairly priced "comfort" coffee influenced by African and Italianbeverage making, but based upon well researched recipes from leading restaurants around the world. The coffeehouse has magazines to entertain guests, ample space for live musicians and other performers, including a dessert bar with a great assortment of cakes. In essence, assuming an ordinary restaurant with the vastness of entertainment, service and quality food but in this case, beverage only would paint an image of the enterprise. It is envisioned that Melbourne Coffee plaza will chase among the great coffee houses in the country and even abroad within a matter of months from its date of opening. Quality is therefore the factor of production that is mainly emphasized in this venture. Hopefully, the business will produce a competitive brand. The employees and consumers will work together in the realization of the set goals.The Melbourne Coffee Plaza will be a self-proprietorship by Hiu Fung Chan.This business plan provides interested parties with a chance to revise our vision and business strategy. It also defines how the business will be established in a detailed way. It outlines start-up, establishing favorable sales numbers, gross margin, and profitability of Melbourne Coffee Plaza. Introduction Entrepreneurship is the activity of identifying business opportunities and gathering resources for that business opportunity (Bruin, Anne & Dupuis 2003). Therefore an entrepreneur is anyone who is able to come up with innovative ideas and use them with the available resources to put up a new business venture. Given that a business is the pursuant of profit-making endeavors, entrepreneurial skills are quite the qualifications for anyone conducting business or at the very least desiring to do so. This involves being observant of one's environment and trying to see the opportunities it presents. The presence of University of Melbourne in the Melbourne city has offered a chance for several business opportunities. For example, there has been an outright demand for coffee in the world and specifically in Melbourne in order to be stylish with the current themes of new coffee in the market. It is with this observation that a business venture will be set up with the name Melbourne Coffee Centre. The Centre will be set up at different locations where most students spend their leisure time reading or relaxing, for example around the swimming pools. Mission The Melbourne Coffee Plaza was conceptualized as a way to penetrate a market that remains so potential yet uninvested, the beverage industry. Located in the Melbourne University lounge, The Melbourne Coffee Plaza will avail beverage and a great entertaining experience to the customers at a reasonable fee. In time, The Melbourne Coffee Plaza will become a “joint” of choice to the many students of the University, as well as numerous campus visitors. The Coffee Plaza hopes that in the event of a ‘coffee rash’, if any, the shop will be the first choice for all beverage consumers in the area. Not only does the management and ownership of the Plaza envision competition, but effective strategies to outmaneuver all like- minded entrepreneurs within the confines of business law. The cafe will provide an entirely unique finger-liking menu that suites the consumer, offering a great experience for the many visitors who will grace the venue. It will become an affordable venture for the undergraduates, in the hope that they will return on many occasions. The menu will be in tandem with consumer desires.The management hopes to capture the consumer’s sense of choice and picky behavoiur. It is anticipated that there may be new recipes in the market that are yet to be offered as commercial beverages. For this reason, the Plaza will investigate and ensure that all, if not most of these recipes appear in the menu. The Key to Success The keys to success in this business are: 1. Product quality: Beverage and entertainment are the products. They must of unquestionable quality and value. Quality shall be measured using ISO standard metrics for the beverage industry. This will demand highly professional chefs and food testers. 2. Service: Our customers spending to have a great time. Their experience will not be worth it if the service offered is not of the highest quality. Each staff member will thus be efficient, courteous and attentive to customer needs. The customers will the ultimate measure on service quality. Only customer satisfaction can guarantee great and quality service. It is thus up to the employees to ensure such satisfaction else risk losing great consumers who support the business. 3. Marketing: Our target audience is the student population. Since the business is located inside the campus, many customers will find it easy to access the Coffee House.Television and radio adverts are required to ensure that the Coffee House is well marketed in the region. A marketing team will be set up within a period of four months to ensure that the sales reach the anticipated target. 4. Management: We desire to have a management team with a strong grasp on beverage production, and labor costs. The dining experience must be delivered in a fashion that will inspire consumers to return as well as encourage word-of-mouth recommendations from them. In this respect, not only will management offer a welcoming fete to the visitors at the restaurant, but be at the front-line in addressing consumers queries. Their presentation and use of etiquette will be demanded of them. Company Summary The Melbourne Coffee Plaza is a coffeehouse facility located in a Melbourne University. The Melbourne Coffee Plaza derives its name from the institution as it is part and parcel of it. The area covers about three hundred square meters in size and will be well fenced for the compound surrounding it to be well organized. This will incorporate outside seats and recreational space for children. Swings, bouncing castles and other games will be put in place as the management sees fit, as an incentive to loyal customers. The facility is bordered by the university library to the south and the main kitchen to the north. There are several lecture theatres around but it is majorly a conspicuous building that stands out. Idearly, the location is to ensure minimal disturbance in the name of air pollution due to strong scents. This will be put to consideration and filters put in place to ensure only desired smell emanates from the beverage shop. Company Ownership The Melbourne Coffee Plaza is a privately owned by a sole proprietor. The owner of the restaurant will coordinate all administrative functions within the business premise and will be charge with the role of appointing its first batch of employees. Aside from that, the owner shall be a silent player in a field full of chefs, business and technical professionals that will see Melbourne Coffee Plaza to the corporate heights anticipated. Start-up Summary The start-up costs for The Melbourne Coffee Plaza cafe can be found outlined below Start-up Requirements Start-up Expenses Legal $2,500 Stationery $600 Brochures $400 Consultants $1,000 Insurance $1,775 Debt Service $6,000 Licenses/Tax/Deposits $13,000 Expensed Equipment $31,600 Employee/Payroll $28,834 Accounting $1,500 Soft Opening Expense $4,050 Grand Opening Advertising $2,500 Misc. Expenses $2,100 Total Start-up Expenses $94,179 Start-up Assets Cash Required $103,250 Start-up Inventory $61,117 Other Current Assets $0 Long-term Assets $612,030 Total Assets $800,107 Total Requirements $974,886 Start-up Funding Start-up Expenses to Fund $87,679 Start-up Assets to Fund $656,397 Total Funding Required $752,976 Assets Non-cash Assets from Start-up $756,497 Cash Requirements from Start-up $205,000 Additional Cash Raised $11,000 Cash Balance on Starting Date $100,500 Total Assets $756,697 Liabilities and Capital Liabilities Current Borrowing $29,950 Long-term Liabilities $695,499 Accounts Payable (Outstanding Bills) $29,647 Other Current Liabilities (interest-free) $0 Total Liabilities $754,866 Capital Planned Investment Investor 1(Home Equity/Pre-develop. Invest) $66,000 Investor 2(Pre-development Investment) $32,000 Other $0 Additional Investment Requirement $0 Total Planned Investment $94,000 Loss at Start-up (Start-up Expenses) ($95,679) Total Capital $1,421 Total Capital and Liabilities $757,197 Total Funding $872,876 Company Locations and Facilities The Melbourne Coffee Plaza will be located in a building adjacent the University’s main Kitchen. It will be a single facility as other branches are anticipated upon the development of the Coffee House brand. This is still a management challenge under consideration. Initially however, the sole facility of the Coffee House will be well equipped and vastly invested upon to operate fully and successfully. Products The Melbourne Coffee Plaza is a coffeehouse venue that sells moderately-priced beverages to an upscale casual dining market. The business features brewed coffee based beverages, fruit salads and smoothies, juices, and other beverages typically associated with a coffee shop. A dessert bar will serve an array of freshly made desserts, as well as pastries to be taken during breakfast. The initial beverage products will be emphasized upon as the plan is to take the beverage industry to the next level. However, there will be considerations to include other beverages as the management sees fit. Part of the entertainment involves the sale of art pieces, movies and games. These will be provided as an incentive to the consumers. Since most students have a liking for entertainment and merry making, such will be the guise to lure them into the beverage joint. Then, only customers who buy from the Coffee house can enjoy the discounted entertainment costs. There will be free cable television with occasional movies to keep the consumers entertained. However, the management will insist on music as the main source of entertainment. Management Summary The Melbourne Coffee Plaza is a sole proprietorship for the time being. Crucial employees that will be employed include an additional manager (operations). This employee will assist maintain and review operations of the coffee house and the entertainment venue/bar. The second important employee is the chief chef. The chef will manage kitchen operations. Additionally, the services an assistant manager will be sourced. The assistant manager will serve to ensure additional managerial tasks such as order delivery are done accordingly. Part-time personnel will be hired to handle bartending(coffee bar), serving, and dishwashing functions. Personnel Plan The personnel plan will be implemented by hiring 5 full-time employees at start-up. These will be actively involved in the production of beverages and accompaniments. Part time employees will be hired to manage approximately 203 hours of operation per week. These will include; servers/waiters and dishwashers.This will keep the operating costs at a low yet maximize on the personnel to ensure efficiency. Only trained personnel with at least 2 years’ experience will be employed. All other additional hiring will be on a part time basis and will be devoted to the expansion of the coffee house function. Minimizing operational costs will enable it to work at an increased capacity and be more profitable (Drucker 2012).It is obvious that the Coffee business will be quite a leap into risk-taking ventures. This is why, despite the much investment in the initial capital, operation costs will be kept at the bare minimum. Personnel Plan Year 1 Year 2 Year 3 Owner/Manager $40,906 $40,906 $40,906 Employees $179,312 $179,312 $179,312 Total People 25 25 25 Total Payroll $356,008 $356,008 $356,008 Strategy and Implementation Summary The Melbourne Coffee Plaza's strategy is based upon targeting and serving: Students at Melbourne University who will find the venue so convenient as it is within campus premises The atypical Australia resident. This white-blue color professional works for long hours and has hardly any time to cook at home. She/he maintains an active social life and utilizes a significant amount of dispensable salary maintaining it. The thousands of downtown firms which occasionally employ the services of restaurant beverage as a customary working incentive. Financial Plan We wish to finance growth mainly through cash flow. We appreciate that this means we will have to grow more slowly than anticipated. The most critical indicator in our case is the inventory turnover. We have to make sure that the beverage inventory turnover stays at approximately two turns per month, or we risk loss through spoilage (Cuervo, Alvaro, Ribiero, and Domingo & Roig Salvador 2007). We must ensure that our average collection days do not get above 45 under any circumstances. This would be a major financial blow given our working capital situation is albeit complicated. We must aim for a net profit of 15% at least; the marketing costs will be retained to no more than one to three percent of gross sales. Important Assumptions The financial plan will depend majorly on vital assumptions. The prime underlying assumptions are: We assume a steady economy free of recession. We assume that there will not be unpredictable changes in the beverage-making industry to make our current technology obsolete We assume full access to financing and equity required to maintain our financial plan. The assumption of political calmness and a serene environment to offer the facility as a destination is but inevitable. We assume that all tastes in the blends up for sale and marketing will be those of the consumer and that our predictions will be spot on to avoid unforeseen losses. The managenmt assumes fixed salary agreements with all senior employees on a permanent contract to avoid an impasse that would put the business to any sort of a crisis. Break-even Analysis The Break-even Analysis demonstrates that The Melbourne Coffee Plaza will face a balance of trade deficit initially but will make sufficient sales strength to stayafloat. We estimate that our break-even point is $100,100 on sales averaging $11.50 per student. This position will beguaranteed by a monthly fixed cost of $54,850 and per unit/student variable cost of $5.10. This will enable the business break even in less than two years. It is important for this plan to be actualized as it will dictate the rate at which the business grows. With minimal ideas, beverages and facilities at the time of inception, consumers are to be treated with additional benefits from each visit until the standards so set by the international body, ISO are met. Conclusion The outline presents what the customers yearning for quality coffee should expect. It clearly illustrates a plan that is well thought of formulated. As an ambitious entrepreneur in the beverage industry, it is necessary that one has a plan to cater for not only the opening but expansion of the business. Among other factors that one cannot clearly account for is the fact that food and beverage have a lot to do with taste. It may thus be difficult to clearly understand this aspect of consumption. It is nonetheless not a hindrance to such a lucrative venture. This would be a new venture in the sense that a large population will be able to meet their needs. Other than just meeting their needs, the business opportunity also presents job opportunities for those who will serve as workers (Kariv 2011). It is a move to ensure that Melbourne Coffee Centre overrides its competitors and offer the best services. References: Bruin, Anne & Dupuis. 2003. Entreprenuership: New Perspectives in a Global Age. Ashgate Publishing Ltd. Bygrave, D. William & Zacharakis, Andrew. 2010. Entrepreneurship. John Wiley and Sons. Cuervo, Alvaro, Ribiero, Domingo & Roig Salvador(Ed.). (2007). Entrepreneurship: Concepts, Theory and Perspectives. Springer Drucker, Peter. 2012. Innovation and Entrepreneurship. Routledge. Epresso Parts.Coffee Brewers and Makers.Web, 2012 Accessed on 20th Noember, 2012. Food Editorials.Starting a Coffee Shop. Equipment Needs. Web, 2012 Accessed on 20th Noember, 2012. Greene, Cynthia. 2008. Entrepreneurship: Ideas in Action. Cengage Learning. Kariv, Dafna. 2011. Entreprenuership: An International Introduction. Taylor & Francis. McDaniel, Bruce. 2002. Entreprenuership and Innovation: An Economic Approach. M.E. Sharpe. SmallBusiness BC. Business Planning and Financial Forecasting: a start-up Guide. Vancouver. Read More