Business Plan
Content
BUSINESS PLAN FOR
COFFEE EXPRESS
BY ADITYA KARIA, SARKIS BOU-FRANCIS AND PATRICK SENJAK
Contents
Executive Summary .......................................................................................................................... 3
Outline of Business ......................................................................................................................... 3
Product ............................................................................................................................................. 3
Location ........................................................................................................................................... 3
Legal Structure................................................................................................................................ 3
Situational Analysis ............................................................................................................................ 4
Business Vision ................................................................................................................................. 4
Goals ................................................................................................................................................. 4
Objectives ........................................................................................................................................ 4
Keys to Success .............................................................................................................................. 4
Long Term Growth Strategies ..................................................................................................... 4
SWOT Analysis ................................................................................................................................. 5
Operations ........................................................................................................................................... 6
Equipment........................................................................................................................................ 6
Suppliers............................................................................................................................................ 6
Raw materials/resources ............................................................................................................. 6
Storage/warehouse requirements ............................................................................................ 6
Delivery systems.............................................................................................................................. 6
Marketing ............................................................................................................................................. 7
Target Market.................................................................................................................................. 7
Market Research ............................................................................................................................ 7
Product ............................................................................................................................................. 7
Main Products: ............................................................................................................................ 7
Quality ........................................................................................................................................... 7
Packaging/Design ..................................................................................................................... 7
Brand (Logo) ............................................................................................................................... 8
Price ................................................................................................................................................... 8
Promotion ......................................................................................................................................... 8
Place ................................................................................................................................................. 9
Human Resources ............................................................................................................................ 10
Number of employees required .............................................................................................. 10
Recruitment and selection process ........................................................................................ 10
Tasks/jobs needed to be performed in the business ......................................................... 10
1|Page
Skills, qualifications required for employees ......................................................................... 10
Training and development offered to staff.......................................................................... 10
Wages / salaries for staff, owners ............................................................................................ 11
Finance ............................................................................................................................................... 12
Establishment costs...................................................................................................................... 12
Projected expenses..................................................................................................................... 12
Sources of funds ........................................................................................................................... 12
Break even analysis ..................................................................................................................... 12
Break Even Point........................................................................................................................... 13
Future Direction of the Business ................................................................................................... 14
Where is the business heading ................................................................................................. 14
Success factors ............................................................................................................................. 14
Appendix ........................................................................................................................................... 15
BIBLIOGRAPHY .................................................................................................................................. 18
2|Page
Executive Summary
Outline of Business
Coffee Express will be a high quality coffee business that aims at providing
coffee and snacks at great quality and fantastic value. Coffee Express is
determined to create a comfortable and alluring environment fit for young to
old, to help share Coffee Express’s love of coffee. Coffee Express will be a
modern take on the traditional type of cafe. This is due to the fact that the
cafe is mobile, so rather than the customers coming to the business, Coffee
Express goes to the customers. This business plan will include how this business
will be successful with only $20,000 and also how modern technology can be
used to reach this aim.
Product
Coffee Express offers its patrons the finest hot and cold beverages,
specializing in specialty coffees, blended teas, and other custom drinks. In
addition, Coffee Express will offer soft drinks, fresh-baked pastries and other
confections. Seasonally, Coffee Express will add beverages such as hot apple
cider, hot chocolate, frozen coffees, and more.
Location
Being a mobile cafe, Coffee Express can go anywhere. This gives us flexibility
on how convenient we are to the customers and where we can go to on a
daily basis to make a profit. The following is a list a location Coffee Express will
be able to access:
Office Parks
Shopping districts or malls
Popular tourist locations
Sports Venues
Festival and events
Conferences and Conventions
Parks and Beaches
Bus and train stations
University Campuses
Worksites
The business district
Legal Structure
Coffee Express will be jointly owned by 3 owners; Aditya Karia, Patrick Senjak
and Sarkis Bou-Francis. It will be in the form of a partnership. The reasons for
choosing this structure are: low start-up costs, less costly to operate than a
company, shared responsibility and workload, pooled funds and talent,
minimal government regulation, no taxes on business profits, only on personal
income.
3|Page
Situational Analysis
Business Vision
Coffee Express 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 or espresso and pastries
in town. Coffee Express will be in the business of helping our customers to
relieve their daily stresses by providing peace of mind through great
ambience, convenient location, friendly customer service, and products of
consistently high quality.
Goals
Coffee Express has 3 goals, with each being as integral to success as the
next.
Personal - Provide customers the finest quality beverage in the most
efficient time.
Social - Provide community support through customer involvement.
Financial - Operate and grow at a profitable rate through sound
economic decisions.
Objectives
Coffee Express has established three firm objectives it wishes to achieve in the
next three years:
Personal - Expand the business to at least 10 mobile cafes.
Social - Create an environmentally friendly business.
Financial - Net After-tax Profit above 15% of Sales.
Keys to Success
There are four keys to success in this business, three of which are virtually the
same as any food service business. It is the fourth key that will give us that
extra measure of respect in the public eye.
The greatest locations - visibility, high traffic pattern, convenient
access.
The best products - freshest coffee beans, cleanest equipment,
premium serving containers, consistent flavour.
The friendliest servers - cheerful, skilled, professional, articulate.
The finest reputation - word-of-mouth advertising, promotion of our
community mission of charitable giving.
Long Term Growth Strategies
The prospects for the coffee industry do not seem to become out-dated over
time. Coffee is a much loved product consumed by many people. Food and
beverages have endless prospects as they are a need to survive. But the
problem is that there are a number of other coffee vendors, and so for this
business to succeed it needs to do something unique in order to attract
customers. This is most easily done with the use of modern technology. One
strategy for long term growth is to combine technology with the flexibility of
4|Page
location of Coffee Express. That is to make an app which can book the cafe
to come to a particular place such as a corporate function, party or special
event. This app will also be able to order products available in the cafe. Over
time as the business continues to expand and there are more mobile cafes
around, this function will become extremely popular. People will be able to
check through the app where the nearest Coffee Express cafe is and book it
to come to their location. This will make Coffee Express unique and popular
and therefore lead to long term growth.
SWOT Analysis
Strengths
Flexibility in Location
Convenience to
consumer
Prices are lower than
competitors
Inexpensive products
Low Running Costs
Weaknesses
High fuel prices
Traffic can affect service
Sales vary greatly depending on
location
Truck needs to be serviced regularly
Opportunities
Threats
Regular Sporting Events
Weather can affect the sales, eg. less
at Olympic Park
people come to a particular location
Popular Tourist Locations
on a rainy day
Other Mobile Cafes and big brand
in the city
Overpopulated
cafes such as Gloria Jeans
University Campuses
5|Page
Operations
Equipment
Truck
Fully fitted trailer for coffee shop
Stock
See appendix for images
Suppliers
Online Supplier for coffee and tea - www.coffeecompany.com.au/coffee
$30/kg
Online Supplier for pies, rolls and muffins http://thekingscliffbakerycompany.com/wholesale-product/
Range of prices for each item.
Supplier for milk - www.nicksfood.com.au/range/dairy
$1.10 per litre
Raw materials/resources
There are only 2 raw materials required to make coffee, coffee beans and
milk. All other products are pre-made.
Storage/warehouse requirements
All of the stock will be stored on the trailer as it has plenty of room contain
every product. This way money will be saved on not renting a warehouse.
Delivery systems
Since Coffee Express is a mobile cafe, the products will be sold straight to the
consumer. Instead of the consumer coming to Coffee Express, the business
goes to the consumer. This will be done through setting up the mobile cafe at
various location where there is a high flow of pedestrian traffic. Examples
include university campuses and shopping districts.
6|Page
Marketing
Target Market
Coffee Express focuses on one particular type of market, the captive
consumer. Captive Consumers would include those who are tethered to a
campus environment, or in a restricted entry environment that does not allow
free movement to and from. Examples would include high school and
college campuses, where there is limited time between classes, and
corporate campuses where the same time constraints are involved, but
regarding meetings and project deadlines, and special events--such as
carnivals, fairs or festivals--where there is an admission price to enter the gate,
but exiting would mean another admission fee, or where refreshments are an
integral part of the festivities. This is where the mobile cafe excels in.
Market Research
Food-industry observers claim that the food-truck business is increasing largely
in response to the slow-growing economy. An industry survey by IBISWorld
placed annual revenue from food trucks around $1.2 billion in 2009 and
annual growth rates from 2007-2012 near 8.4% annually. People are seeking
inexpensive breakfasts and lunches. Also, employees today are often pressed
for time, with more work and shorter lunch hours. These factors make the
mobile-food concept more appealing than ever.
Product
Main Products:
Coffee Express provides its customers the ability to custom order a coffee
beverage that will be blended to their exact specifications. Each of Coffee
Express’s Baristas will be trained in the fine art of brewing, blending, and
serving the highest quality hot and cold beverages, with exceptional
attention to detail. Besides coffees, Coffee Express will offer teas, frozen
coffee beverages, seasonal specialty drinks, pastries, and other baked
goods.
Quality
The coffee will be made from high quality coffee beans at a low price to
assure value for money. That will be the significance of the product. Other
items such as pastries and baked goods will be purchased from suppliers but
will be of high quality.
Packaging/Design
Coffees/beverages will be served in designed take away cups. An appealing
design that differs from other companies is often eye catching and alluring.
7|Page
Brand (Logo)
Price
Coffee Express’s pricing strategy will implement both the following:
Penetration pricing - setting a price lower than competitors to attract
customers
Competition based pricing – price set by analysing competitors prices
The aim of the business is to stand out from the rest. Pricing is one way to
make this happen. The price of coffee is rising and through market research
and visiting local and competing coffee shops, a standard small cup of
coffee is now around $3.50 - $4.00. To make the products stand out, small
coffee will be $3.00, medium will be $3.50 and large $4.00. This puts Coffee
Express at a competitive advantage with quality coffee for the cheapest
price.
Promotion
The role of promotion is to inform, persuade and remind consumers about a
business’s products, with the aim of:
attracting new customers by raising awareness of a particular product
increasing brand loyalty by reinforcing the image of the product
Encouraging existing customers to purchase more of the product.
The 2 major forms of promotion that can be used by Coffee Express during
the establishment stage are personal selling and sales promotion. Personal
selling is when a sales assistant outlines the features of the good or service to
8|Page
the customer. The main advantage of this method is that the message can
be modified to suit the individual customer’s needs. As Coffee Express will be
meeting new and regular customers on a daily basis, this method will be
extremely effective. Sales promotion is when activities and materials are used
to attract interest and support for the good or service. Examples include free
samples, coupons with cash refunds, and loyalty programs. This method can
be used by Coffee Express to retain their regular customers and also attract
new ones.
Once Coffee Express has been established and starts to grow, advertising will
become extremely important to make Coffee Express a recognizable brand.
Advertising will be most effective once there are at least 5 mobile cafes and
the app to order/book has been developed. Cheapest and arguably the
most effective advertising is on the internet. Coffee Express can get its
message across and also make it known that there is an app available
through social media campaigns and also internet ads such as ones on
Youtube before a video starts playing.
Place
Place refers to the channels of distribution. Channels of distribution are ways
of getting the product to the customer. The channel of distribution used by
Coffee Express will be Producer to Wholesaler to Customer. This is outlined in
the following:
1.
2.
3.
4.
Producer harvests coffee beans
They are then sold to a wholesale supplier
The beans are then bought by Coffee Express
Coffee Express then transform the beans into a beverage and sells it to
the customer
9|Page
Human Resources
Number of employees required
Coffee Express will require no employees in the start-up stage of the business
as all 3 owners will be trained baristas. This means that to run the first mobile
cafe, no employees will be required. This will require an initial cost to train the
3 owners as baristas ($120 per person) but in the long run save money on
wages. Obviously once the business expands employees need to be hired to
run mobile cafes.
Recruitment and selection process
There will be no recruitment required until the business expands, as the 3
owners will work in the first mobile cafe. However once the business expands
employees will be required to handle the mobile cafes. In order to save on
wages, high school students of ages 16-18 will be preferred as they can be
paid less. Selection process will be the owners having a face to face
interview with the applicant. If the applicant impresses the owners and shows
the necessary skills and qualification, then he/she can be considered for
employment.
Tasks/jobs needed to be performed in the business
Coffee Express will focus on the making of coffee, tea and selling other
beverages such as soft drinks. We will also sell snacks such as pies,
sandwiches, sausage rolls, cupcakes and slices.
There will be two people (three if busy) working at any one time. On a regular
day, one staff member will take orders as well at serve pre-made snacks and
sandwiches. The barista will tend to beverage orders. In this case, two staff
members will make the coffee and one will be taking orders and serving
food.
An employee taking orders will put the order into a register, and either write
down (busy) or notify verbally (not busy) the Barista. The barista then makes
the coffee and hands it to the customer.
Skills, qualifications required for employees
The only qualification required to be a trained barista. However there are a
number of skills required for the employees. These include:
Determination and Perseverance
Highly Competitive and Not Afraid of a Challenge
Responsibility and Dependability
Communicational Skills
Organisational Skills
Friendly Nature
Training and development offered to staff
In the case that an employee is not a trained barista but has all the required
skills for the business, then a barista course should be offered to that
particular employee.
10 | P a g e
Wages / salaries for staff, owners
For 16 year olds, the minimum pay is $9.26, for 17 year olds, it is $11.11 and for
18 year olds, it is $12.97. There will be no wage if the owner works as owners
will receive a portion of the money generated from sales.
11 | P a g e
Finance
Establishment costs
Item
Cost
Truck(Second Hand)
$990
Fully Fitted trailer for a Coffee Shop(Second Hand)
$16,000
Initial Stock
$2,000
Insurance(for truck and trailer)
$301.49 per annum
Barista Training(for 3 owners)
$120 per person
Business Name Registration
$78 for 3 years
Total
$19,729.49
See appendix for images.
Projected expenses
Expense
Cost
Fuel
$500 per month(varies greatly)
Servicing
$200 every 3 months (varies)
can also be written as
$70 per month
Insurance
$301.49 per annum
can also be written as
$25 per month
Buying Stock
$800 per month (depends on sales)
Total
$1,395 per month
Sources of funds
The source of fund will be equity finance. There will be no debt financing
used, the $20,000 will be raised by the 3 owners. The advantage of this is that
money will be saved in interest as no loan will be taken from the bank.
Although for day to day activities, a credit card will be used.
Break even analysis
Total Fixed Cost = Fuel + servicing + insurance
= 500 + 70 + 25
= 595
Total Variable Cost = Price to make coffee (includes cup, milk and beans)
12 | P a g e
= 50c (approx)
No. of coffee sold
1
100
150
198
199
250
Total fixed cost
$595
$595
$595
$595
$595
$595
Total variable cost
50c
$50
$75
$99
$99.50
$125
$595.50
$645
$670
$694
$694.50
$720
Total revenue
$3.50(average)
$350
$525
$693
$696.50
$875
Profit (or loss)
-$566
-$295
-$145
-$1
$2
$155
Total cost
Break Even Point
-=
.
.
=198.3
Therefore, Coffee Express needs to sell at least 199 coffees per month to start
making a profit.
13 | P a g e
Future Direction of the Business
Where is the business heading
The aim of Coffee Express in the next 5 years is to open 10 more mobile cafes,
approximately 2 each year. This will be the growth stage of the business. Also
in order to make this business unique and to attract customers, Coffee
Express will utilise modern technology to reach this aim. That is to make an
app which can book the cafe to come to a particular place such as a
corporate function, party or special event. This app will also be able to order
products available in the cafe. Over time as the business continues to
expand and there are more mobile cafes around, this function will become
extremely popular. This system is based on the system Boost Juice have
recently launched and has proven to be successful.
Success factors
The major success factors of this business is that location of the business is
never an issue. Coffee Express can, on a daily basis, choose the best place to
make money and where the business will generate the highest sales. For
customers, the convenience of having coffee right outside a particular
location and meet several needs by serving mobile food. First, Coffee Express
offers food that is cost friendly because Coffee Express does not need a large
number of employees. Coffee Express also offers the convenience of quick
service. In many cases Coffee Express provides food choices that can save
those on a busy schedule from the need to sit down.
14 | P a g e
Appendix
Fully Fitted Café trailer
Things included in the trailer
15 | P a g e
Truck
16 | P a g e
Insurance
17 | P a g e
BIBLIOGRAPHY
ASIC. (n.d.). Retrieved June 10, 2015, from http://asic.gov.au/forbusiness/registering-a-business-name/before-you-start/business-nameregistration-fees-and-payment-methods/
CPI FAQS. (n.d.). Retrieved June 9, 2015, from http://www.coffeeprices.com/cpi-faqs.html
Coffee Kiosk Business Plan. (n.d.). Retrieved June 10, 2015, from
http://www.bplans.com/coffee_kiosk_business_plan/executive_summary_fc.
php
Food Trucks 101: How to Start a Mobile Food Business. (2011, July 24).
Retrieved June 10, 2015, from http://www.entrepreneur.com/article/220060
How to Start a Food Truck Business. (n.d.). Retrieved June 9, 2015, from
http://foodtruckempire.com/
The Cost of Starting a Food Truck. (n.d.). Retrieved June 10, 2015, from
http://www.forbes.com/sites/investopedia/2012/09/27/the-cost-of-starting-afood-truck/
18 | P a g e
COFFEE EXPRESS
BY ADITYA KARIA, SARKIS BOU-FRANCIS AND PATRICK SENJAK
Contents
Executive Summary .......................................................................................................................... 3
Outline of Business ......................................................................................................................... 3
Product ............................................................................................................................................. 3
Location ........................................................................................................................................... 3
Legal Structure................................................................................................................................ 3
Situational Analysis ............................................................................................................................ 4
Business Vision ................................................................................................................................. 4
Goals ................................................................................................................................................. 4
Objectives ........................................................................................................................................ 4
Keys to Success .............................................................................................................................. 4
Long Term Growth Strategies ..................................................................................................... 4
SWOT Analysis ................................................................................................................................. 5
Operations ........................................................................................................................................... 6
Equipment........................................................................................................................................ 6
Suppliers............................................................................................................................................ 6
Raw materials/resources ............................................................................................................. 6
Storage/warehouse requirements ............................................................................................ 6
Delivery systems.............................................................................................................................. 6
Marketing ............................................................................................................................................. 7
Target Market.................................................................................................................................. 7
Market Research ............................................................................................................................ 7
Product ............................................................................................................................................. 7
Main Products: ............................................................................................................................ 7
Quality ........................................................................................................................................... 7
Packaging/Design ..................................................................................................................... 7
Brand (Logo) ............................................................................................................................... 8
Price ................................................................................................................................................... 8
Promotion ......................................................................................................................................... 8
Place ................................................................................................................................................. 9
Human Resources ............................................................................................................................ 10
Number of employees required .............................................................................................. 10
Recruitment and selection process ........................................................................................ 10
Tasks/jobs needed to be performed in the business ......................................................... 10
1|Page
Skills, qualifications required for employees ......................................................................... 10
Training and development offered to staff.......................................................................... 10
Wages / salaries for staff, owners ............................................................................................ 11
Finance ............................................................................................................................................... 12
Establishment costs...................................................................................................................... 12
Projected expenses..................................................................................................................... 12
Sources of funds ........................................................................................................................... 12
Break even analysis ..................................................................................................................... 12
Break Even Point........................................................................................................................... 13
Future Direction of the Business ................................................................................................... 14
Where is the business heading ................................................................................................. 14
Success factors ............................................................................................................................. 14
Appendix ........................................................................................................................................... 15
BIBLIOGRAPHY .................................................................................................................................. 18
2|Page
Executive Summary
Outline of Business
Coffee Express will be a high quality coffee business that aims at providing
coffee and snacks at great quality and fantastic value. Coffee Express is
determined to create a comfortable and alluring environment fit for young to
old, to help share Coffee Express’s love of coffee. Coffee Express will be a
modern take on the traditional type of cafe. This is due to the fact that the
cafe is mobile, so rather than the customers coming to the business, Coffee
Express goes to the customers. This business plan will include how this business
will be successful with only $20,000 and also how modern technology can be
used to reach this aim.
Product
Coffee Express offers its patrons the finest hot and cold beverages,
specializing in specialty coffees, blended teas, and other custom drinks. In
addition, Coffee Express will offer soft drinks, fresh-baked pastries and other
confections. Seasonally, Coffee Express will add beverages such as hot apple
cider, hot chocolate, frozen coffees, and more.
Location
Being a mobile cafe, Coffee Express can go anywhere. This gives us flexibility
on how convenient we are to the customers and where we can go to on a
daily basis to make a profit. The following is a list a location Coffee Express will
be able to access:
Office Parks
Shopping districts or malls
Popular tourist locations
Sports Venues
Festival and events
Conferences and Conventions
Parks and Beaches
Bus and train stations
University Campuses
Worksites
The business district
Legal Structure
Coffee Express will be jointly owned by 3 owners; Aditya Karia, Patrick Senjak
and Sarkis Bou-Francis. It will be in the form of a partnership. The reasons for
choosing this structure are: low start-up costs, less costly to operate than a
company, shared responsibility and workload, pooled funds and talent,
minimal government regulation, no taxes on business profits, only on personal
income.
3|Page
Situational Analysis
Business Vision
Coffee Express 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 or espresso and pastries
in town. Coffee Express will be in the business of helping our customers to
relieve their daily stresses by providing peace of mind through great
ambience, convenient location, friendly customer service, and products of
consistently high quality.
Goals
Coffee Express has 3 goals, with each being as integral to success as the
next.
Personal - Provide customers the finest quality beverage in the most
efficient time.
Social - Provide community support through customer involvement.
Financial - Operate and grow at a profitable rate through sound
economic decisions.
Objectives
Coffee Express has established three firm objectives it wishes to achieve in the
next three years:
Personal - Expand the business to at least 10 mobile cafes.
Social - Create an environmentally friendly business.
Financial - Net After-tax Profit above 15% of Sales.
Keys to Success
There are four keys to success in this business, three of which are virtually the
same as any food service business. It is the fourth key that will give us that
extra measure of respect in the public eye.
The greatest locations - visibility, high traffic pattern, convenient
access.
The best products - freshest coffee beans, cleanest equipment,
premium serving containers, consistent flavour.
The friendliest servers - cheerful, skilled, professional, articulate.
The finest reputation - word-of-mouth advertising, promotion of our
community mission of charitable giving.
Long Term Growth Strategies
The prospects for the coffee industry do not seem to become out-dated over
time. Coffee is a much loved product consumed by many people. Food and
beverages have endless prospects as they are a need to survive. But the
problem is that there are a number of other coffee vendors, and so for this
business to succeed it needs to do something unique in order to attract
customers. This is most easily done with the use of modern technology. One
strategy for long term growth is to combine technology with the flexibility of
4|Page
location of Coffee Express. That is to make an app which can book the cafe
to come to a particular place such as a corporate function, party or special
event. This app will also be able to order products available in the cafe. Over
time as the business continues to expand and there are more mobile cafes
around, this function will become extremely popular. People will be able to
check through the app where the nearest Coffee Express cafe is and book it
to come to their location. This will make Coffee Express unique and popular
and therefore lead to long term growth.
SWOT Analysis
Strengths
Flexibility in Location
Convenience to
consumer
Prices are lower than
competitors
Inexpensive products
Low Running Costs
Weaknesses
High fuel prices
Traffic can affect service
Sales vary greatly depending on
location
Truck needs to be serviced regularly
Opportunities
Threats
Regular Sporting Events
Weather can affect the sales, eg. less
at Olympic Park
people come to a particular location
Popular Tourist Locations
on a rainy day
Other Mobile Cafes and big brand
in the city
Overpopulated
cafes such as Gloria Jeans
University Campuses
5|Page
Operations
Equipment
Truck
Fully fitted trailer for coffee shop
Stock
See appendix for images
Suppliers
Online Supplier for coffee and tea - www.coffeecompany.com.au/coffee
$30/kg
Online Supplier for pies, rolls and muffins http://thekingscliffbakerycompany.com/wholesale-product/
Range of prices for each item.
Supplier for milk - www.nicksfood.com.au/range/dairy
$1.10 per litre
Raw materials/resources
There are only 2 raw materials required to make coffee, coffee beans and
milk. All other products are pre-made.
Storage/warehouse requirements
All of the stock will be stored on the trailer as it has plenty of room contain
every product. This way money will be saved on not renting a warehouse.
Delivery systems
Since Coffee Express is a mobile cafe, the products will be sold straight to the
consumer. Instead of the consumer coming to Coffee Express, the business
goes to the consumer. This will be done through setting up the mobile cafe at
various location where there is a high flow of pedestrian traffic. Examples
include university campuses and shopping districts.
6|Page
Marketing
Target Market
Coffee Express focuses on one particular type of market, the captive
consumer. Captive Consumers would include those who are tethered to a
campus environment, or in a restricted entry environment that does not allow
free movement to and from. Examples would include high school and
college campuses, where there is limited time between classes, and
corporate campuses where the same time constraints are involved, but
regarding meetings and project deadlines, and special events--such as
carnivals, fairs or festivals--where there is an admission price to enter the gate,
but exiting would mean another admission fee, or where refreshments are an
integral part of the festivities. This is where the mobile cafe excels in.
Market Research
Food-industry observers claim that the food-truck business is increasing largely
in response to the slow-growing economy. An industry survey by IBISWorld
placed annual revenue from food trucks around $1.2 billion in 2009 and
annual growth rates from 2007-2012 near 8.4% annually. People are seeking
inexpensive breakfasts and lunches. Also, employees today are often pressed
for time, with more work and shorter lunch hours. These factors make the
mobile-food concept more appealing than ever.
Product
Main Products:
Coffee Express provides its customers the ability to custom order a coffee
beverage that will be blended to their exact specifications. Each of Coffee
Express’s Baristas will be trained in the fine art of brewing, blending, and
serving the highest quality hot and cold beverages, with exceptional
attention to detail. Besides coffees, Coffee Express will offer teas, frozen
coffee beverages, seasonal specialty drinks, pastries, and other baked
goods.
Quality
The coffee will be made from high quality coffee beans at a low price to
assure value for money. That will be the significance of the product. Other
items such as pastries and baked goods will be purchased from suppliers but
will be of high quality.
Packaging/Design
Coffees/beverages will be served in designed take away cups. An appealing
design that differs from other companies is often eye catching and alluring.
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Brand (Logo)
Price
Coffee Express’s pricing strategy will implement both the following:
Penetration pricing - setting a price lower than competitors to attract
customers
Competition based pricing – price set by analysing competitors prices
The aim of the business is to stand out from the rest. Pricing is one way to
make this happen. The price of coffee is rising and through market research
and visiting local and competing coffee shops, a standard small cup of
coffee is now around $3.50 - $4.00. To make the products stand out, small
coffee will be $3.00, medium will be $3.50 and large $4.00. This puts Coffee
Express at a competitive advantage with quality coffee for the cheapest
price.
Promotion
The role of promotion is to inform, persuade and remind consumers about a
business’s products, with the aim of:
attracting new customers by raising awareness of a particular product
increasing brand loyalty by reinforcing the image of the product
Encouraging existing customers to purchase more of the product.
The 2 major forms of promotion that can be used by Coffee Express during
the establishment stage are personal selling and sales promotion. Personal
selling is when a sales assistant outlines the features of the good or service to
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the customer. The main advantage of this method is that the message can
be modified to suit the individual customer’s needs. As Coffee Express will be
meeting new and regular customers on a daily basis, this method will be
extremely effective. Sales promotion is when activities and materials are used
to attract interest and support for the good or service. Examples include free
samples, coupons with cash refunds, and loyalty programs. This method can
be used by Coffee Express to retain their regular customers and also attract
new ones.
Once Coffee Express has been established and starts to grow, advertising will
become extremely important to make Coffee Express a recognizable brand.
Advertising will be most effective once there are at least 5 mobile cafes and
the app to order/book has been developed. Cheapest and arguably the
most effective advertising is on the internet. Coffee Express can get its
message across and also make it known that there is an app available
through social media campaigns and also internet ads such as ones on
Youtube before a video starts playing.
Place
Place refers to the channels of distribution. Channels of distribution are ways
of getting the product to the customer. The channel of distribution used by
Coffee Express will be Producer to Wholesaler to Customer. This is outlined in
the following:
1.
2.
3.
4.
Producer harvests coffee beans
They are then sold to a wholesale supplier
The beans are then bought by Coffee Express
Coffee Express then transform the beans into a beverage and sells it to
the customer
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Human Resources
Number of employees required
Coffee Express will require no employees in the start-up stage of the business
as all 3 owners will be trained baristas. This means that to run the first mobile
cafe, no employees will be required. This will require an initial cost to train the
3 owners as baristas ($120 per person) but in the long run save money on
wages. Obviously once the business expands employees need to be hired to
run mobile cafes.
Recruitment and selection process
There will be no recruitment required until the business expands, as the 3
owners will work in the first mobile cafe. However once the business expands
employees will be required to handle the mobile cafes. In order to save on
wages, high school students of ages 16-18 will be preferred as they can be
paid less. Selection process will be the owners having a face to face
interview with the applicant. If the applicant impresses the owners and shows
the necessary skills and qualification, then he/she can be considered for
employment.
Tasks/jobs needed to be performed in the business
Coffee Express will focus on the making of coffee, tea and selling other
beverages such as soft drinks. We will also sell snacks such as pies,
sandwiches, sausage rolls, cupcakes and slices.
There will be two people (three if busy) working at any one time. On a regular
day, one staff member will take orders as well at serve pre-made snacks and
sandwiches. The barista will tend to beverage orders. In this case, two staff
members will make the coffee and one will be taking orders and serving
food.
An employee taking orders will put the order into a register, and either write
down (busy) or notify verbally (not busy) the Barista. The barista then makes
the coffee and hands it to the customer.
Skills, qualifications required for employees
The only qualification required to be a trained barista. However there are a
number of skills required for the employees. These include:
Determination and Perseverance
Highly Competitive and Not Afraid of a Challenge
Responsibility and Dependability
Communicational Skills
Organisational Skills
Friendly Nature
Training and development offered to staff
In the case that an employee is not a trained barista but has all the required
skills for the business, then a barista course should be offered to that
particular employee.
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Wages / salaries for staff, owners
For 16 year olds, the minimum pay is $9.26, for 17 year olds, it is $11.11 and for
18 year olds, it is $12.97. There will be no wage if the owner works as owners
will receive a portion of the money generated from sales.
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Finance
Establishment costs
Item
Cost
Truck(Second Hand)
$990
Fully Fitted trailer for a Coffee Shop(Second Hand)
$16,000
Initial Stock
$2,000
Insurance(for truck and trailer)
$301.49 per annum
Barista Training(for 3 owners)
$120 per person
Business Name Registration
$78 for 3 years
Total
$19,729.49
See appendix for images.
Projected expenses
Expense
Cost
Fuel
$500 per month(varies greatly)
Servicing
$200 every 3 months (varies)
can also be written as
$70 per month
Insurance
$301.49 per annum
can also be written as
$25 per month
Buying Stock
$800 per month (depends on sales)
Total
$1,395 per month
Sources of funds
The source of fund will be equity finance. There will be no debt financing
used, the $20,000 will be raised by the 3 owners. The advantage of this is that
money will be saved in interest as no loan will be taken from the bank.
Although for day to day activities, a credit card will be used.
Break even analysis
Total Fixed Cost = Fuel + servicing + insurance
= 500 + 70 + 25
= 595
Total Variable Cost = Price to make coffee (includes cup, milk and beans)
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= 50c (approx)
No. of coffee sold
1
100
150
198
199
250
Total fixed cost
$595
$595
$595
$595
$595
$595
Total variable cost
50c
$50
$75
$99
$99.50
$125
$595.50
$645
$670
$694
$694.50
$720
Total revenue
$3.50(average)
$350
$525
$693
$696.50
$875
Profit (or loss)
-$566
-$295
-$145
-$1
$2
$155
Total cost
Break Even Point
-=
.
.
=198.3
Therefore, Coffee Express needs to sell at least 199 coffees per month to start
making a profit.
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Future Direction of the Business
Where is the business heading
The aim of Coffee Express in the next 5 years is to open 10 more mobile cafes,
approximately 2 each year. This will be the growth stage of the business. Also
in order to make this business unique and to attract customers, Coffee
Express will utilise modern technology to reach this aim. That is to make an
app which can book the cafe to come to a particular place such as a
corporate function, party or special event. This app will also be able to order
products available in the cafe. Over time as the business continues to
expand and there are more mobile cafes around, this function will become
extremely popular. This system is based on the system Boost Juice have
recently launched and has proven to be successful.
Success factors
The major success factors of this business is that location of the business is
never an issue. Coffee Express can, on a daily basis, choose the best place to
make money and where the business will generate the highest sales. For
customers, the convenience of having coffee right outside a particular
location and meet several needs by serving mobile food. First, Coffee Express
offers food that is cost friendly because Coffee Express does not need a large
number of employees. Coffee Express also offers the convenience of quick
service. In many cases Coffee Express provides food choices that can save
those on a busy schedule from the need to sit down.
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Appendix
Fully Fitted Café trailer
Things included in the trailer
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Truck
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Insurance
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BIBLIOGRAPHY
ASIC. (n.d.). Retrieved June 10, 2015, from http://asic.gov.au/forbusiness/registering-a-business-name/before-you-start/business-nameregistration-fees-and-payment-methods/
CPI FAQS. (n.d.). Retrieved June 9, 2015, from http://www.coffeeprices.com/cpi-faqs.html
Coffee Kiosk Business Plan. (n.d.). Retrieved June 10, 2015, from
http://www.bplans.com/coffee_kiosk_business_plan/executive_summary_fc.
php
Food Trucks 101: How to Start a Mobile Food Business. (2011, July 24).
Retrieved June 10, 2015, from http://www.entrepreneur.com/article/220060
How to Start a Food Truck Business. (n.d.). Retrieved June 9, 2015, from
http://foodtruckempire.com/
The Cost of Starting a Food Truck. (n.d.). Retrieved June 10, 2015, from
http://www.forbes.com/sites/investopedia/2012/09/27/the-cost-of-starting-afood-truck/
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