The Business Proposal Starting Retail Cafe Assignment is part of financial literacy course and its purpose to develop entrepreneurial skills. This proposal is to open up a retail café near Melbourne Sports Complex. The plan would include selling of coffee with few snacks for the sports players as well as the passersby.
This business cannot be opened as it would require an investment of $ 10000. This investment is for the purchasing of a Retail Kiosk near the sports complex, hiring costs for the three people as full time, purchase of the raw material for coffee beans, coffee blending machine, investment for set up outside the kiosk with few chairs and tables, lightening, decoration and initials set up.
Detailed description of Business and Strategy
A retail coffee outlet with the name Café de Pamela would be opened up outside Melbourne Sports Complex. It will have around 25 types of Coffee along with the snacks items like burgers, rolls, chips, chocolate fudge etc. The business strategy would be to start off with coffee initially then with the proper set up selling of readymade snacks in a week’s time. The plan to open up this retail café outside the Melbourne sports complex is due to the simple reason that there is no café where the sports players as well as the passersby could take rest and take a sip of coffee. They have to walk around 3 kilometers to have coffee as the current outlet is around 3 km from sports complex. This already present cafe does not offer snacks along with coffee and tea.
The strategy would be to tap the passersby and the sports players who play in the sports complex. It will involve creation of a good ambience through this café and within a week’s time as per the response starting of the snacks and even small supplies later related to sports. The biggest target is to track the performance by keeping the prices of the items very low. The coffee would range in between $1 to $5 based on the types being selected by the customers (Brown, 2005).
System used to record financial records
We will use financial software that will track the number of orders, bill to be processed and cleared and taking out balance payment to the customers. It would be small software that will solve the initial purpose till the time we have only one retail outlet. Once this retail café would gain popularity then we will open up outside all the sports complexes and educational centers and various other public places that are crowded in Melbourne.
Products/Services to be offered
The products that would be offered by the Café would be:
- Coffee – 25 types of coffee in different flavors and ways of production.
- Snacks – Burgers, Sandwiches.
- Readymade Items – Chips, Cold Drinks, Shakes etc.
Services that would be included along with these product offerings are the delivery of these items and attending of the orders of the customers.
The target customers would be the sports players who come to play at the sports complex. The passersby of the complex would also be the targeted customers.
Café segment and the industry are at a great demand in Melbourne. These players have been looking for the coffee, snacks and even the shakes in the form of health drinks that they look forward in the sports complex. The complex does not have any outlet for retail food like this. There is only one café that is present around 3 kilometers from the sports complex that remains full with people due to its nearness to the sports complex.
Café de Pamela would not be posing as such a high competition from the market. This is because when the sports complex people will find café and other items just outside the complex then they would not prefer going to the other café which is 3 km from it. Above all that café would not pose a heavy competition as that is only keeping Tea and Coffee whereas our retail store would offer varied kinds of coffee, health drinks and snacks as discussed above (Barrow et al, 2001).
As discussed, the café would be opened outside the Melbourne City Sports Complex. This would be only one kind of a sports complex that would be opened immediately outside the complex.
Types of Financial Services that needed
We would need an investment of around $ 10000 which will meet up our initial requirements of setting up of café in terms of buying the coffee blending machines, refrigeration equipment to keep the shakes and other readymade stuff.
The café would deploy an initial staff of 3 people. One person would be involved in the works of the kitchen such as coffee making, reheating of readymade snacks etc. 2nd person would be involved in billing and processing of orders. The 3rd person would be an attendant who would bring the orders from the customers and get them the delivered orders. These three people would work together in order to meet the requirements of the café. There would be rotation and multitasking in case any staff is not present due to some or the other emergency (Evans, 2011).
Production Asset Requirements
In terms of the assets, the Café de Pamela would be having the following requirements:
- Furniture in terms of Chairs and Tables that form the sitting capacity of around 20 customers – These chairs and tables would be arranged in such a way that will encourage the visitors to sit with a capacity initially serving 20 people.
- Coffee Blending and production machine – These would be automatic blending and production machines that will produce coffee from the coffee beans.
- Big Refrigerator to keep the shakes, sandwiches and other related stuff – These items cannot be kept in open and have to be kept under refrigeration.
- Uniform process for the staff that would be working at Café de Pamela – We would like our staff to remain in hygienic conditions and in proper uniforms so that our brand is developed.
- Billing Machines and Computer that will be attached to each other for the complete working of the software – These are necessary to make an impact on the customers and make the billing process efficient and successful.
Financial Management (2 Years)
Yearly Budget (Revenue & Expenses)
In terms of the Yearly Budget, we would look for monthly revenue of $ 4000 per month till 3 months so that the return on investment done is recovered in this period. The initial investment or the expenses that we will incur would be in terms of salaries for staff for 3 months and the buying of the assets and the various other related requirements.
Cash Flow statement
|Year 1 ($)||Year 2 ($)||Year 3 ($)|
|Buying of the Kiosk||500||500||500|
Cash Surplus is basically the inflow subtracting the outflow so that the net in hand that is being generated for at least three years would be calculated. It has been estimated that the first year would not be able to achieve a great amount as it would be concentrating on the achievement of breakeven point only. 2nd year we tend to do 5 times more surplus as compared to 1st year and finally in the 3rd year the target would be around 8 times more surplus.
Outline of Uses of Funds
Funds that would be taken from the investment would be utilized in the following activities:
- Hiring and paying of the salaries to the team with a provision of 3 months till the time café earns a good income. Initially it is expected that the café may not have significant sales in order to pay the salaries, the investment would be helping us.
- Buying of the assets and their maintenance till 3 months till a breakeven point is achieved. The breakup of the machinery costs has been divided in 3 years. This would not put a burden on the business to recover this cost in 1st year only (Painter, 2004).
- Processing of the uniforms and other legislations and applications that are to be filed for the people employed. This would be done as a marketing value stunt in order to make a brand image of the retail café among the various consumers who would visit us.
- Decoration and setting up of the entire café in terms of its full establishment. This would include the setting and arrangement of the set up of various equipments, sitting space, processing space and other related requirements.
The investment budget has been given in such a way that the 3 months expenditure is being utilized for the business set up and meeting of its different business requirements.
Evaluation of Risks
Café de Pamela in the beginning would not face much competition and challenge from other cafes as there is only one café. This café that is a competitor is around 3 km away from the sports complex and does not offer the variety as the Café de Pamela would be offering to the consumers. The major risk factor that could be there would be that due to high sales that is expected, there could be entry of new competitors in the market for Café de Pamela. Other people seeing the business opportunities may set up more café nearby. This would help in bringing down the sale of Café de Pamela.
Secondly, Café de Pamela may not have any customers from the Sports complex as seeing our sales going up, Sports complex may set up its internal restaurant of café. This would be a great threat to our vicarious liability business.
Thirdly unless we attend the consumer queries and provide them the materials that they are expecting from us, we may not be able to satisfy them. We need to bring innovation, creativity and new types of substitutes, materials and sales items with different styles so that customers remain excited to come to our café.
In the nutshell it could be said that this business management venture would be definitely a great success as there is only one competitor to Café de Pamela which is not selling as many items as our café would be selling. The kind of ambience and the appeal we would make to the consumers would be unique in itself. We would definitely be able to overcome the risks that we have mentioned and discussed above. This is due to the initial estimate of the investment that we have given to Mr. Baulk.
Brown, J. 2005. The world café. Berrett-Koehler Publishers.
Barrow, C., Barrow, P., & Brown, R. 2001. The business plan workbook. Kogan Page Publishers.
Evans, A. L. 2011. An Evaluation of the Feasibility of setting up a Broadway themed Coffee Café in the Swansea City Centre (Doctoral dissertation, University of Wales Institute Cardiff).
Painter, R. S. 2004. Business Plan of Gelato Café.
Hennessy, L. E., Misencik, B. P., Rose, E. A., Sullivan, I. V., & Harry, E. 2012. 2012-Business Communication at ArtStreet Cafe.