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A business plan for opening a coffee shop at Bhubaneswar.
Presented by –
• Ankush pani
• Hamsar alli
• Gautam das
MBA 1st year, BIITM.
Executive summary……..
• My mission is to provide a friendly , comfortable atmosphere where the customers can receive quality food, drinks and service at a reasonable price.
• My café will offer a variety choices to the customers. Cappuccinos, lattes, espressos, smoothies, regular coffee, soft drinks and tea of all sorts will be available.
• The café will also serve deli-style breakfast sandwiches with the freshest ingredients, muffins, croissants, cinnamon, rolls, coffee cake and other tasty treats.
• Esprezzo will be open from 8:00 am to 8:00 pm for week days and in weekends it will be open till 9:00 pm.
2009 2010 2011 2012 20130
2000
4000
6000
8000
10000
12000
938 14002668
5778
9622
Year wise coffee consumption in India.
coffee bags in thousands ( 1 bag = 25 kg coffee)YEAR
66,700 kg
14.4450 kg
Information source = international coffee organization
QUANTITY
23450 kg 3500 kg
2.40.550 kg
2009 2010 2011 2012 20130
100
200
300
400
500
600
3
24121
224
514
Year wise coffee consumption in Bhubaneswar - Odisa.
coffee bags in thousands ( 1 bag = 25 kg coffee)
YEAR
3,025 kg
5,600 kg
75 kg 600 kg
12,850 kg
QUANTITY
Information source = NCAI (national coffee association of india)
48%
30%
12%10%
No. of coffee shops at bbsr
patia saheednagar
rasulgarh delta square
125 77
32 25
Total coffee shop = 259
NO. OF OUTLETS
Delta
squareRasulgarh
Patia
Saheednagar
Esprezzo’s STP.
Segment
People looking to go to have a
coffee and snacks at a
hangout place
Target group
Youth in the middle and
higher income groups
Positioning
India’s favourite coffee shop, for the young and the young at
heart
Target market….
Country• INDIA
State• ODISHA
District• KHORDA,
BHUBNESWAR
Selected location.
PATIA
Why Patia??? Initially as we have a low budget we will go with only 1 shop.
It is observed that demand for coffee at patia is high.
Most of the customers are working youths at patia who have more disposable income and they are early adopters.
It is observed that during weekdays 46% of the population of Bhubaneswar travel to Patia.
Big bazar being an ideal shopping center attracts many customers at Patia.
Patia being an official area most of the employees opt for coffee, tea and snacks during office hours.
Esprezzo’s SWOT ANALYSIS.
STRENGTH• RESONABLE PRICE.
• WIDE VARIETY OF COFFEE AND DRINKS.
• COFFEE ART.
• AT HOME FEELING.
• GAMES LIKE BILLIARDS AND BOWLING.
WEAKNESS• NO INITIAL
REPUTATION.
• TURN DOWN IN THE ECONOMY.
• START-UP COSTS.
• NEW BUSINESS.
OPPURTUNITY• JOB
OPPORTUNITIES.
• RISING DEMAND FOR RECREATIONAL CENTERS.
THREATSAs competitors• CCDs, • BARISTA, • STAR BUCKS, • McDonalds and• OTHER LOCAL
CAFES.
Competitor’s SWOT analysis.
STRE
NG
TH • Brand name
• Ambience and service
• Large outlets
WEA
KNES
S • High competition.
• Traditional coffee style.
• Costly.O
PPU
RTU
NIT
Y • Introducing cheaper version of coffee.
• Tap the smaller towns.
• Merchandising.
THRE
AT • Large unorganized market.
• Entry of new players.
Our competitors
• CCDs• BARISTA• STAR BUCKS• McDonalds • OTHER LOCAL CAFES.
COMPETITORS - PORTER’S 5 FORCES.
2.POTENTIAL ENTRANTS
Local vendorsTea stallsSubsidiaries of existing coffee shops.
3.HIGH BARGENING POWER OF SUPPLIERS
1.SUBSTITUTE PRODUCTS
Hot chocolate Green tea Teeccino Rooibos
4.High BARGENING POWER OF BUYERS
PRESENT INDUSTRY RIVALRY.
CCDs BARISTA STAR BUCKS McDonalds OTHER LOCAL
CAFES.
GoalsTo create huge brand value.
Brand association
Create awareness of the brand
Brand positioning
Market development
Business growth
ObjectivesBy providing best quality
food products
By providing best service
Delightful interiors
As a reasonable coffee shop with best quality
product
Extension of shops at various places
Increasing revenue
ESPRESSO DRINKS• Americano• Breve• Cappuccino• Latte• Mocha• Macchiato
OTHER DRINKS• Hot chocolate• Hot tea• Chai tea latte• Kid’s hot
cocoa• Fountain
drinks• Juice• White and
chocolate drinks
COFFEES• Daily brew-
reg
• Organic French roast.
• World tour blend.
BAKERY• croissants• Bagels• Assorted
brownies and cookies
• Pie and cake by slice
• Muffins• Cinnamon rolls• Breakfast
sandwiches
SMOOTHIES• Fruit• Blended
ice coffee drinks
ICED DRINKS• Coffee• Jumpin’
java• iced
PRODUCTS
Basis of demand and cost estimation.
Demand forecasting is made on the basis of observation. We have
observed CCD and Barista for 6 months and the footprints of the people is our forecasted demand.
The cost of labour and rent was also estimated on the basis of
observation of pre employed workers at CCDs and Barista.
Start- up costs.
First month rent = ----------------------------------------------------------Rs.10,000/- month.
Modernize fee = -----------------------------------------------------------------------Rs. 1,00,000/- ( impression- calm comfortable soft mood light music and paintings.)
Furniture fee= ----------------------------------------------------------------Rs. 70,000/-
Equipment fees = ------------------------------------------------------------Rs. 1,80,000/- (coffee machine, coffee mill, air conditioning, stereo,cash registers, water treatment.)
Supplies fees =-----------------------------------------------------------------Rs. 27,000/- (Coffee snack, coffee cups, napkins, forks , knives etc)
Water and electricity bill =-------------------------------------------------Rs.8,000/- month
Advertising fee for 1st month =--------------------------------------------Rs. 5,000/- Total = Rs. 4,00,000
Employees payWaiter, waitress, cashier & coffee maker (Rs 15/- per hour *30days * 8 hours* 7 employees)-------------------Rs. 25,200
Manager ------------------------------------------------------------------Rs.7,500 pm
Accountant= --------------------------------------------------------------Rs.5,000 PM
Total= Rs. 37,700
Operating cost.
Fuel ,water and electricity---------------------------------------------------Rs 8000Annual rent----------------------------------------------------------------------Rs 1,20,000Salary per month------------------------------------------------------------- Rs 37,000Supply cost-----------------------------------------------------------------------Rs 20,000Annual Advertising costs of------------------------------------------------- Rs 60,000Annual insurance charges----------------------------------------------------Rs 10,000
Total (appx) Rs 81,543
Price and revenue…..
Coffee Rs.50 to Rs.150 (according to flavor) Cake Rs.60 to Rs.300 (according to flavor) Cookie Rs.45 to Rs.250 (according to flavor)
Estimated sales 125 cups coffee, 30 pcs. cakes and 30 pcs. of cookies.
Day revenue = (75*125) + (150*30) + (125*30) = --------------------------- Rs 17,750
Monthly revenue = (Rs 17,750)*(30) =----------------------------------------- Rs. 5,32,500
Government taxes
Sales tax (5% of revenue) =----------------------------------------------------- Rs. 26,625 City planning tax ( 1.5% of revenue) =--------------------------------------- Rs. 7,988
Total monthly tax expense = Rs. 34,613
1 OPERATING COST• Fuel ,water and electricity---------------------------------------------------Rs 8000• Annual rent----------------------------------------------------------------------Rs 1,20,000• Salary per month------------------------------------------------------------- Rs 37,000• Supply cost-----------------------------------------------------------------------Rs 20,000• Annual Advertising costs of------------------------------------------------- Rs 60,000• Annual insurance charges----------------------------------------------------Rs 10,000
A- Total (appx) Rs 81,543
2 TAXES AND RATES.• Sales tax (5% of revenue) =----------------------------------------------------------------- Rs. 26,625
• City planning tax ( 1.5% of revenue) =-------------------------------------------------- Rs. 7,988
B - Total monthly tax expense = Rs. 34,613
• PROFIT = REVENUE- (A + B ) (Rs 532500 ) – (Rs 81543) – (Rs 34,613)
= Rs 4,16,344
Monthly profit
MONTHLY COST
TOTAL OPERATING COST Rs 81,543/- MONTHLY PROFIT
(TR – TC – TAXES) = (Rs 532500 ) – (Rs 81543) – (Rs 34,613) = Rs 4,16,344
Funds borrowed
Rs. 4,00,000/- from SBI Interest payment monthly @ 12.50% = 37,500
Positioning• Esprezzo is not just a coffee shop.. As the name suggest itself it’s the way to express
ones feelings.• Esprezzo provides coffee art facility which is new to the market.. It’s tag line is “share
your mood with a coffee.” some of the sample are :-
ESPREZZO WILL BE FULL WIFI ENABLED
WE WILL GO FOR OFFICE HOUR DELIVERY FACILITY
SPECIAL THEME FOR OCCASIONS LIKE BIRTHDAY AND FUNCTIONNS
ADS- COMMERCIALWE WILL GO WITH A COMMERCIAL WHERE WE WILL CAST A COUPLE.
THEY WILL BE HAVING MISSUNDERSTANDING BETWEEN EACH OTHER.
THEY HAVE BEEN TO ESPREZZO.
THE WAITER WILL FIND THAT THE COUPLE ARE NOT IN A GOOD MOOD.
THE BOY WILL ORDER A COFFEE
THE WAITER WILL SERVE THE COFFEE TO THE COUPLE IN WHICH SORRY WOULD BE WRITEN , WHICH WILL STATE THE COFFEE ART.
THE MISSUNDERSTANDING WILL COME TO AN END AND OUR BRAND NAME WILL BE PUBLISHED WITH A TAG LINE “ IT’S MORE BEYOND COFFEE”