Indus University: Café Classic
Indus University: Café Classic
Indus University: Café Classic
DEPARTMENT
OF
BUSINESS ADMINISTRATION
ENTERPRENEURSHIP
“BUSINESS PLAN OF
Café Classic
ALI JIBRAN
“CAFE CLASSIC”
Café Classic
Company Ownership
Café classic is incorporated in Defense phase ll Karachi. Its sole proprietor.
Financial Considerations
Cafe classic will expect to raise 15, 00000 of its own capital, and to borrow 15, 00000 by
the tameer Bank as a ten-year loan. This provides the bulk of the current financing
required.
Cafe classic anticipates sales of about 4500000 in the first year, 5500000 in the second
year, and 7000000 in the third year of the plan. Cafe classic should break even by the
fourth month of its operation as it steadily increases its sales. Profits for this time period
are expected to be approximately 805000 in year 1, 1097000 by year 2, and 1807000 by
year 3. The company does not anticipate any cash flow problems.
7000000
6000000
5000000
4000000 Sales
3000000 Gross Margin
Net Profit
2000000
1000000
0
1st Year 2nd Year 3rd Year
Mission
Cafe classic aims to offer high quality coffee, Expresso, tea, Kava, juices, Cigar and
sheesha varieties at a competitive price to meet the demand of the middle- to higher-
income local market area residents
Keys to Success
Keys to success for Cafe classic will include:
Products
Cafe classic will sell high-quality specialty coffee, Expresso, tea, Kava, juices, Cigar and
sheesha varieties. Despite being an upscale coffeehouse, our prices are in line with the
leading national chains.
The Cafe classic menu sets us apart from other coffee and sheesha houses, giving us a
competitive edge.
Cafe classic offer 4 four groups of drinks - coffee, tea, Expresso, juice - with several
choices within each group. This enables us to provide more variety than our competitors
while keeping the preparation of the drinks easy to execute. We are taking advantage of
the immense popularity of flavored drinks and Chai tea by offering a product mix that
includes items the other coffeehouses don't carry as well as more familiar drinks. Cafe
classic offers several smoothie drinks. We carry the highest quality fresh juices.
Cafe classic also offers a wide variety of sheesha including flavored sheesha.
Prices have been determined after a thorough analysis of all food costs for every item in
each drink. In some cases, an average price has been calculated and applied to all similar
drinks and sheesha varieties in order to keep the menu from confusing the customer.
Sheesha Varieties
Name Prices in Rs
Mint 200
Wild berry 200
Double apple 200
Peach 200
Grape 200
Expresso Drinks
Coffee Drinks
Tea
• Peppermint
• Herb Apricot
• Earl Grey Lavender
• Darjeeling (Rs 35 regular)
• Golden Flowers Herbal
• Herbal Lemon
• Tropical Green
Juices
Name Price
Cuban 200 - 5000
Romeo & Juliet 1000 - 15000
Kava
Name Price
Kava 20
Kava ( cardmon) 25
Marketing Plan:
Market Analysis
Cafe classic will focus on meeting the demand of a regular local resident customer base,
as well as a significant level of students, travelers passing through and local business
people.
Market Segmentation
Cafe classic will focus on the middle- and upper-income markets. These market segments
consume the majority of coffee and Sheesha Varieties.
Cafe classic customer base in Defense phase ll Karachi is comprised of two target
groups.
These groups are all potentially strong customer segments. The benefit of this mix of
customers is that it helps maintain consistent business throughout the year.
The other customer segments (local residents, local business and pass-through traffic)
provide a consistent foundation all year long.
Also, by appealing to several market segments, Cafe classic will not become overly
dependent on any single consumer group. For example, several local coffeehouses with
primarily student customers do poorly during the non-school months. They must also
market themselves a new each year to the incoming students. Cafe classic will avoid
these peaks and valleys in business with a mix of customers.
Students. Karachi is home to a major branch of the State University as well as dozens of
other schools, including many prestigious private schools and academies. To reach
students we offer special student discount cards, pass out free coffee coupons at student
events and offer entertainment on weekends.
Students represent an excellent customer segment for several reasons:
Market Needs
Because Karachi has a cool climate for three to four months out of the year, hot coffee
products are very much in demand. During the remaining warmer seven to eight months
of the year, iced coffee products are in significantly high demand, along with a slower but
consistent demand for hot coffee products. Much of the day's activity occurs in the
morning hours before ten a.m., with a relatively steady flow for the remainder of the day.
Service Business Analysis
The retail coffee industry in the Pakistan has recently experienced growth. The cool
marine climate in Karachi for four to five months stimulates consumption of hot
beverages in these months. During the remaining warmer seven to eight months of the
year, iced coffee products are in significantly high demand, along with a slower but
consistent demand for hot coffee products. Coffee drinkers in the Karachi are finicky
about the quality of beverages offered at the numerous coffee bars across the region.
Despite of low competition in the immediate area, Café classic will position itself as a
place where customers can enjoy delicious coffee beverages with a fresh pastry, tea, juice,
soft drinks, chocolates in a relaxing environment.
Strategic Assumptions:
• People want better-tasting coffee Expresso, tea, juice, Snacks & pastries, and
sheesha varieties. Coffee drinkers and sheesha users want a more inviting
coffeehouse environment.
• Coffee drinks and sheesha users are considered an affordable luxury.
• The coffee and sheesha house industry is largely unaffected by the economy and
world events.
Competitive Edge
Our competitive edge, compared to the other coffee plus Sheesha houses in the greater
area includes the following.
• A significantly higher quality better tasting coffee, Expresso, tea, Kava, juices,
Cigar and sheesha varieties.
• Our location can arguably be considered the best in the market.
• An ambiance superior to all other coffeehouses in the area with upscale "Arabian"
look.
• It features stained glass decorations, art glasswork, Arabian style furnishings and
outdoor dining.
• The only coffee plus Sheesha house to provide regular weekend evening
entertainment.
• A wider variety of popular drinks than our competitors, including flavored coffee
and Expresso drink, tea, and juice. We have several drink options for people who
don't drink coffee.
Marketing Strategy
Other coffee or Sheesha houses rely almost entirely on word-of-mouth marketing to
generate business. We will engage in an ongoing aggressive marketing program that will
help us establish profitability quickly and set the stage for continual growth.
Our strategy will be to position Cafe classic as the "Lexus" of coffeehouses, offering a
high quality product and superb service in a superior environment.
Launch Marketing
Most coffeehouse chains do little or no marketing and advertising. For example,
Starbucks' philosophy is that their ubiquity in the marketplace is all they need to sustain
and grow their customer base. They spend less than 1% of gross revenues on advertising,
and when they do spend, it is usually to introduce a new product.
The retail coffee industry is a sales-oriented business with historically very little
experience in marketing and advertising. This is likely why little is done. As yet, the
major players have not been taken over by sophisticated companies, where marketing is
viewed as essential to gaining market share.
An element of our differentiation from other coffeehouse chains will be our use of
advertising and marketing to gain awareness, build customer traffic and establish a strong
brand image. We intend to create immediate customer awareness and not wait for word-
of-mouth. We will also building customer traffic immediately with an aggressive Launch
Marketing Plan.
Launch marketing will promote awareness, build immediate traffic and establish our
brand image via several methods.
• Public relations/publicity
• Direct Mail
National awareness will help drive the expansion by generating opportunities created
by the media buzz and familiarizing people with our brand name. It will help set the
stage for future brand identification.
Local Media
• FM 107
• FM 96
• FM 91
• FM 89
• FM 106
• FM 100
• FM 101
• Spider magazines.
Trendsetters
Defense Phase ll is the home to thousands of individuals who can be important to the
successful positioning of Café classic. One mention on a TV talk program or in a
'lifestyle' magazine can (and has) launched many successful careers and businesses.
With literally hundreds of celebrities and wealthy business people as local residents,
the word-of-mouth recommendations from these people can drive significant business
to us as well as generate favorable publicity.
Celebrities in Karachi are also actively involved in the community, many supporting
several local charities. Our involvement in the community will enable us to garner
exposure for Cafe classicamong an important group of local residents.
Key individuals will be targeted with gift baskets from Cafe classic containing
samples of our products to entice them to visit Cafe classic and talk about us with
their friends.
The interior design of Cafe classic will be unlike any other coffeehouse chain. While
there will some upscale designs, the entire modern Italian or Starbucks look. Our
upscale stylized "Arabian Look" design, featuring stained glass decorations, art
glasswork, differentiates us from all others.
Community Involvement
We will make ourselves an integral part of the local and world community. This will
generate goodwill, create opportunities to forge important contacts with key people
and live up to our company Mission Statement.
Portable Kiosk
Within 6 to 8 months we will create a portable Cafe classickiosk to sell and market
our products at special events and community activities. Karachi has many such
events every year. It will be an excellent way to publicize Café classic.
The kiosk will be highly visible and fun. It will also potentially be very profitable,
although it's hard to determine how profitable with any accuracy until the local
response is measured.
The Future
The number of Cafe classic locations could easily reach 7 to 10 within five years.
While the financials in this Business Plan only address the Karachi location, we can
extrapolate from the store's performance (which will be carefully monitored and
tracked) to get a general idea of the chain's projected profitability.
With ten coffeehouses the gross revenues, when fully realized, would be more than
30000000 using the third year performance figures. Even factoring in the cost of
additional staff and other resources, a 10-store chain would likely generate a
minimum of 7500000 in profits annually.
• Staff salaries will be above the industry average in order to attract the best people
• We will hiring for attitude so that we will always have a friendly, enthusiastic
staff to make customers feel welcome and appreciated; constant staff training to
assure the best quality possible
• Create a mobile kiosk to take Café classic into the community at special events,
farmer's markets, art shows, etc.
• Establish coffee service at local businesses
• Sell gift cards, frequency cards, pre-paid cards, and offer discounts to key groups
• Create an ongoing sampling program
• Conduct a consistent, aggressive marketing program
• Be an active member of the community; be visible at charitable functions
• Solicit customer feedback to constantly improve and streamline our operation
• Key Strategy: an advanced and expandable point-of-sales system
Personnel Team:
The personnel plan is included in the following table. It shows the monthly salaries for
every year of all employees.
Per month salary Per month salary Per month salary
Employees No of Employees
for FY 2012 in Rs for FY 2013 in Rs for FY 2014 in Rs
Coffee Maker 1 12000 14000 15500
Expresso Maker 1 14000 16000 17000
Sheesha Maker 1 15000 16500 17500
Tea Maker 1 11000 13000 14000
Cook 1 10000 12000 13500
Juice Maker 1 10000 12000 13000
Cashier 1 8000 10000 11000
Sweepers 2 4000 each 5000 each 5000 each
Guard 1 7000 8000 8000
Waiters 2 5000 each 5500 each 6000 each
Cigar Sales 1 5000 5500 6000
Person
Total 13 110000 128000 137500
Physical” Training:
Physical” Training Smile Manners Good posture for long time Balance Talking Skill
Operation of the coffee machine
Skill Training:
Skill Training Familiar with our product Coffee culture Proper reaction Inner decoration
Never judge a person by his appearance Cooperation & Leadership.
Cafe classic will expect to raise 15, 00000 of its own capital, and to borrow 15, 00000 by
the Tameer Bank as a ten-year loan. This provides the bulk of the current financing
required.
Projected Profit and Loss:
We will expect to be profitable in the first year, with profits increasing over the next two
years, as we establish a loyal customer base.
2000000
1800000
1600000
1400000
1200000
1000000 FY2008
FY 2012
2
800000
600000
400000
200000
0
FY 2008 FY 2009 FY 2010
FY 2012 FY 2013 FY 2014
7000000
6000000
5000000
4000000
FY2008
FY 2012
3000000
2000000
1000000
0
FY 2012
FY 2008 FY2009
FY 2013 FY 2014
FY 2010
120000
100000
80000
60000 FY
FY 2012
2008
40000
20000
0
DEC FEB APR JUN AUG OCT DEC
700000
600000
500000
400000
FY
FY 2012
2008
300000
200000
100000
0
DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV
THE END