a business plan for opening a coffee shop at bhubaneswar

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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.

“es`Prezzo…” it’s more beyond coffee ..

®

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.

Why coffee shop ???

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

Marketing strategy.

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

UNIQUE SELLING PROPOSITION

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 :-

Different interiors (physical evidence)

ESPREZZO WILL BE FULL WIFI ENABLED

WE WILL GO FOR OFFICE HOUR DELIVERY FACILITY

SPECIAL THEME FOR OCCASIONS LIKE BIRTHDAY AND FUNCTIONNS

IMPLEMENTATION PROCESS AND CONTROL..

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”