This plan focuses on opening a café with the proposed name of Plush café, beside river Thames and nearing the famous tourist location of London, the London eye. To develop total of 3 to 5 drive through locations and a total of 2 mobile cafes by the beginning of the fourth year. The objective of this café has been identified as to opt towards achieving a gross profit of nearly 15% after paying the taxes and to strive towards maintaining stipulated gross margins to nearly 45% or greater. Thereby, this plan presents the aim of proposed café as to strive towards opting best possible efforts to develop the cafeteria into a place where the customers will have the opportunity to socialize with others in a very relaxing and comfortable environment, enjoying the best coffee in town. As evident from assessment provided in this discussion, this will be considered as a Limited Liability Corporation and will be established by the joint partnership. The products include a variety of snacks as well as flavoured tea to match fascination of UK customers. In order to market the product in a way that optimizes sales, this plan presents segmentation and targeting pitches. It also discusses brochure, billboard and advertising as tool for marketing. Based on estimation of production, marketing efficacy and sales orientation, it has presented the financial summary for coming years as well.
Plush Cafe will be a service cafeteria which can be established just beside River Thames near to the London Eye. This cafeteria is proposed to be established keeping in mind the development of such a place, where the people can visit to relieve them from the stresses of daily life and to socialize with friends and loved ones over a cup of coffee. Also, magazines will be made available for customers interested in reading a book over a cup of coffee and also provision of live music will also be available for music loving customers. This paper mainly focuses on the step by step planning needed to build up the cafe and also includes description on diverse operational aspects of proposed company, various products and services being provided, various strategies opted for the startup, planning for developing a management team and Strategic financial planning critical to success of the proposed cafe.
In order to successfully establish cafe Plush, some of the objectives have been taken into consideration
- To develop total of 3 to 5 drive through locations and a total of 2 mobile cafes by the beginning of the fourth year.
- To opt towards achieving a gross profit of nearly 15% after paying the taxes.
- To strive towards maintaining stipulated gross margins to nearly 45% or greater.
Plush Cafe will strive towards opting best possible efforts to develop the cafeteria into a place where the customers will have the opportunity to socialize with others in a very relaxing and comfortable environment, enjoying the best coffee in town. Further, the employees to be selected for the proper functioning of the cafeteria will look out for opportunities to assist the customers in relieving them out of their stress by providing best in class ambience, customer friendly services and quality products. Higher authorities concerned with the smooth functioning of the cafeteria, will have to opt for measures in order to keep a constant check on the levels of satisfaction the employees are entitled to, thus providing a profitable and stable return to the shareholders concerned.
For the successful establishment of the cafeteria, some of the key measures have to be taken into consideration.
- Establishing the cafeteria in an attractive manner can be considered to be eye catching to the customers.
Quick, efficient and customer friendly services can be taken into consideration in order to develop loyalty towards the cafeteria among the customers (Chang and Chen, 2015).
- Providing beverages and relevant foods of best quality to the customers along with classy entertainment in the form of music, keeping in mind about music loving customers.
- Soughing measures towards maintaining the quality of the foods and the beverages to be served to the customers.
- Providing proper and well to do training to the employees so that they can deliver proper and customer friendly services.
- Developing low cost incurring quality marketing strategies in order to generate awareness and knowledge about the cafeteria among the people so that they can harness and develop a loyal customer base (York and Danes, 2014).
Plush Cafe is proposed to be established beside River Thames with a majestic view of one of the major attractions of London, the London Eye. Such a location has been proposed for establishing the cafe because a number of people visit the place to spend quality time with friends and loved ones making this place a popular choice of opening new eateries. The cafe should be developed in an attractive manner so that people visiting the place can have a glimpse. At the time of construction, it should be kept in mind that the flooring of the cafeteria should be completed with Italian marble. A number of dim lights will be placed in specific locations which will be reflecting a combination of light and shadow, thus creating a soothing and relaxing ambience for the customers. A centralised air conditioning system will be established to provide a soothing temperature for the customers visiting the cafe. At a specific corner of the cafe, provision for live band playing soothing music will also be taken into consideration. The decision for live band will be considered as music creates a relaxing ambience and also develops a notion of relaxation among the customers. In words of Morkovina et al. (2015), provision for seating arrangements needs to be in a manner that there will be small couches with pillows for backrest and a glass table in the centre. Based on these identified needs of customers, there will also be provisions for magazines as many customers are fond of spending some quality time reading magazines of their choice over a cup of coffee. There will also be availability of separate well maintained washrooms for both men and women. Nowadays customers always look out for places where besides quality products, a better and friendly customer service is also provided. Keeping this in mind, the employees to be selected for working in the cafeteria will be trained under proper guidance and care in order to provide friendly services to the customers, which in turn develop a notion of loyalty among the customers. Also a proper, well trained and experienced chef will be hired so that he can prepare delicious, quality and customer demanding foods relevant to the various beverages that the customers are placing orders for after visiting the cafeteria. Every customer visiting the cafeteria will be entitled to a warm and heartiest welcome by the manager selected for the smooth and proper functioning of the cafeteria. As mentioned by Brinckmann and Kim (2015), for better marketing of the cafeteria among the people, brochures and leaflets containing information and pictures of the cafeteria need to be developed and circulated. Also, hoardings will be put up at visibility range in other places where the people come in large numbers so that it can come in the eyes of the people at first instance. These marketing strategies will be opted in order to attract more number of customers towards visiting the cafeteria and allowing their taste buds to have a glimpse of the tasty delicacies that will be served in the cafeteria.
Plush Cafe will be considered as a Limited Liability Corporation. This cafeteria will be established by the joint partnership of the owner and his younger brother. The major stakes of the cafeteria will be owned by the owner who is the elder brother whereas his younger brother will be entitled to own minority stakes of Plush Cafe. Due to partnership, both the brothers will be able to invest more money that would in turn lead towards better development and growth of their startup business of cafeteria. Partnership ventures will allow the brothers to opt for taking up various decisions that will in turn help them overcome the various problems encountered by their cafeteria business and assist in expanding their business. Also, they will be able to split their responsibilities depending on their abilities, which in turn will be acting as a crucial factor towards developing their business in a much a better way. Partnership between brothers will help them sought various measures to look after the proper management of the cafeteria. By maintaining a proper management and looking after the satisfactions of the employees, they together will be able to carry out their operations successfully and thus maintain the sustainability of their business of cafeteria.
In order to successfully establish the cafeteria business, the expenses that will be incurred have to be taken into consideration.
- Legal expenses that will be incurred for obtaining business license and permits leading to a total amount of £1000
- Expenses that will be incurred for carrying out the various promotional activities in regards to the grand inauguration of the cafeteria which will lead to a cost of £3000. Brochures and leaflets will incur a additional cost of £1200. This will lead to incurring of a total cost of £4200.
- Coverage by the insurance including the compensations of the workers, casualty of the property and other liabilities in general. This will incur a cost of £2000.
- Other expenses that will be incurred which includes the stationeries, costing nearly £400 and telephone deposits, which will be costing nearly £1500. This in turn will incur a cost of nearly £1900
- The capital amount that will be required for successfully setting up the cafeteria business totals to nearly £60,000. This total funding of £60,000 will include the two month salaries of the employees which will be costing nearly £20,000 and the cash that will be reserved for the carrying out the operation for a stipulated period of 2 months, which will be costing nearly £20,000 on a per month basis.
- The inventory costs that will be incurred costs nearly £16000. This will be including the cost of 10 regular brand and 8 decaffeinated brands of coffee beans, costing nearly about £5000. The inventory costs will also be bearing the costs of the various food products that will be served to the customers along with coffee, and this cost is nearly about £7000. The other inventory costs will be included in the costs of the different supplies from the retailers namely tissue papers, cleaning, coffee bags and many others, which will account to a total cost of £3000. The rest £1000 will be incurred for the various office expenses.
- A total cost of nearly £40,000 will be incurred in regards to the purchases of the various equipments that will be carried out for the smooth functioning of the cafeteria business. This cost will be including the cost of the coffee maker which is nearly £800, machine required for grinding the coffee beans which nearly costs about £150, the various equipments that will be purchased for providing proper food services namely mixer grinders, toasters, refrigerators and others which in turn totals the cost to nearly £17000. Of the remaining £22,050, a cost of nearly £4000 will be incurred for carrying out the purchases of the food case, dustbins, racks and shelves. A cost of £4000 will be incurred for purchasing glasses and plates. For purchasing the different office equipments like PC, printer, furniture and telephone, a cost of £12,000 will be incurred. The remaining £2050 will be considered as miscellaneous expenses.
For setting up the cafeteria business, the two major owners who are in a joint partnership will be investing £60,000 and £40,000 respectively. The remaining £40,000 will be taken up as a loan from the bank. This will result in the total cost of £1, 40,000 considered for successfully setting up their cafeteria business
Plush cafe will be situated at a prime location on the banks of River Thames with a majestic view of the London Eye. This place is being considered as it is a major link up of the three most facilitated roads namely the Pleydell Street in the west, Queen Victoria Street to the east and Pepys street to the North. Also, there is presence of renowned shopping complexes in and around this area. Due to these shopping complexes, this place is bustling with people who visit those shopping complexes to carry out their shopping purposes. There is also availability of sitting places on the banks of River Thames. Besides shopping, many people visit the place to spend some quality time with their near and dear ones and also enjoy the majestic view. Due to such bustling of huge crowds in the area, this place will be chosen for setting up the cafeteria. According to Thomas et al. (2014), people in the United Kingdom are very much keen on conducting experiments with the tastes of a variety of delicacies. When the cafeteria will be established at such a prime location, numbers of people would be visiting the cafeteria to spend some good time with their near and dear ones over coffee and quality foods that will be served in the cafeteria. Along with quality eatables and beverages, they would also be entitled to a comfortable and relaxed ambience. This in turn will allow the owners of the cafeteria to maintain the proper functioning and sustainability of the business.
The cafeteria will be established at the prime location beside River Thames with a majestic view of the London Eye. Before beginning construction of the cafeteria, it will be taken into consideration that the floorings should be covered completely with Italian marbles. A false ceiling will also be built in the roof section of the cafeteria. In the ceiling, at some specific points, dim lights will be incorporated which will be developing a combined ambience of light and shadow. A centralised air conditioning system will also be set up to provide soothing temperature condition besides a relaxed ambience. For making the seating arrangements for the customers, sets of four cushioned couches with a glass table in the centre will be considered. At the center of the cafeteria, there will be a coffee bar which will be providing the customers with different types of espressos and pastries. According to Lloyd and Payne (2015), coffee bar can be advantageous for those customers who want to have a taste of coffee and delicacies of the cafeteria, but have stipulated amount of time in their hands. There will also be availability of separate well maintained washrooms for both men and women. Within a specific corner of the cafe, a live band performing soothing music will be placed. Development of a musical ambience will be considered because many customers feel relaxed with the sound of soothing music reaching their ears. A separate magazine corner will be established that will be containing all the renowned and customer demanding magazines as many customers are fond of reading magazines over a cup of coffee. Properly trained employees will be working in the cafeteria catering to the desires of the customers by providing the customers with friendly customer services.
Plush cafe will mainly be focusing on providing the customers with beverages having the best in class taste. Best in class taste will only be possible if high quality ingredients are used and proper preparation guidelines are followed. Well developed marketing strategies will be developed to bring about an increase in the sales of the beverages that will be served to the customers in the cafeteria. The owners of the Plush cafe will also taken into consideration providing their customers with different flavours of tea and beverages along with pastries, sandwiches and salads. Plush Cafe will also be instilled with provision of selling coffee beans to those customers who considers preparing coffee at home rather than sipping into a cup of coffee in a cafeteria. The owners of Plush Cafe will also be providing the customers with different well renowned magazines along with the menu as many customers are fond of spending time by reading magazines over a cup of coffee. As Plush cafe will be established as a cafeteria cum family based restaurant, the menu selected will contain various listings. When customers will be opening the menu listings for giving a particular order, the first point that will struck the eye of the customers is the breakfast brunch that the cafeteria will be serving. The Breakfast brunch of the cafeteria will include breakfast pizza and along with it yoghurt cup and milk bread twist.
Plush Cafe has established in the bank of the river Thames near the London Eye. Generally, a cafe means where all the products belong from a contemporary category. The Plush cafe contains various types of food products and soft drinks. The main food products of this cafe are various types of coffee, various types of snakes, mock tails, fruit juice, and dairy products and so on. Various types of theme food according to the country are also available here. Veg and nonveg both of the products are available here. According to Ghezzi et al. (2015), basically, a cafe is such a type of place where there is no scope of table service. Customers ordered their foods after that they serve the food themselves. The menu of the cafe is divided into a various departments. Departments are categorized into breakfast, soups, and salads, Different types of sandwich, combination items, grilled items, beverage, and beer. All the food products are made from fresh raw materials. The taste of the foods is especially looking after by cafe management. In an opinion with Brinckmann and Kim (2015), customer satisfaction is the most important part of any store of food products. The service of home delivery is also available. Various types of entertainment are available at this cafe. Cafe management organized a varied musical program on various occasion. Music like span jazz, urban musical program, Latin music program is organized here. Food items available in a Plush cafe are decided after judging the demand of local customers. Management has to introduce various new food items to the customers.
|Breakfast||Yogurt cup, normal butter slice, breakfast pizza, boiled egg and bread, Milk bread twist.|
|Soups||Normal veg soup, chicken soup, mixes soup.|
|Salads||Chicken papaya salad, chopped salad, Mexican salad, fruit cream salad, baby corn salad|
|Different types of sandwich||Classic french salad, roasted beef with cream, swiss cheese salad, curried chicken salad, smoked salmon|
|Combination Items||½ special egg sandwich with a bowl of chicken soup, grilled cheese, and tomato soup, ½ special chicken sandwich with fresh salad|
|Grilled Items||Brie and honey, turkey pesto, Greek spanakopita, Pastrami Casablanca, California muffuletta, autumn apple and gruyere|
|Beverage||Coffee, loose tea service, espresso drinks, orange juice, grapefruit juice, mixed fruit juice, guava juice, milk chocolate milkshake, ice tea, coke, diet coke,|
|Beer||Various types of imported beer|
Every business organization has competitors in the market. Therefore every company has to warn about the power of their competitors. The Plush cafe also has some competitors in the market. In the perspective of Kautonen et al. (2015), company management has to know about the competitors. First of all, they have to find out the competitors and their key to success. The company also has to find out the opportunities which are provided by them to the customers. The unique selling point of another company has to find out by them and develop their own business strategy stronger than them. This process helps company to detect the areas of improvement and have some innovative ideas for improving the strategy of a business.
According to Macaulay (2018), a company has to know about the customer’s demand. Any company when stand in a bad condition then they have to look after about the customer’s satisfaction. Actually what is the need of the customers are the basic key to success for ay company. Fulfilling the demand of customers can increase the economic growth of any company. Generally, customers need the low price, flexible service with a good quality product. Therefore company management has to revise the strategy of business planning.
The company has to give various types of discounts and offers to attract customers. They have to look after the strategy by which customers are highly satisfied. The company has to make uniqueness over their products so that customers do not think about the rival products. In an opinion with Peng (2017), a company has to improve the marketing strategy of the sales. An advertisement is the most important part of marketing. The company has to conduct an attractive launching program so that customers are attracted by this. Packaging and branding is also an important part of attracting customers. Uniqueness is created in the packaging of products by the company. The eye-catching packaging has attracted the customers.
According to Boh et al. (2016), customers have to create an attractive and creative website. The company has to compare their rival websites with their own websites. After that, they have to redesign their websites. The facility given by company over online selling must be very attractive. The company also has to find out rival target market. The company Plush cafe may provide a better opportunity to the customers of a rival. Therefore they attract their products. A company can find out the future plan of rival companies. According to the future plan of the rival company The Plush cafe has developed their future plan. According to Wilhoite et al. (2018), the company has to appoint skilled employees so that they can operate the company management very well. The company has to judge about the different consumer behavior to improve their strategy of the business and be able to compete with the rival companies.
Prior to inauguration of the cafeteria, brochures and leaflets will be developed and circulated among the people who are visiting that particular area and in other regions as well. The brochures and leaflets that will be developed will consist of beautiful pictures of the cafeteria along with the various facilities that will be provided to the customers. Along with pictures of the cafeteria and information in regards to the facilities that will be provided, a small region of the brochure will be providing information about the various delicacies that will be served in the cafeteria, thus creating an urge within customers to visit the place (Moroni et al. 2015).
- Social Media
In the recent times, it has been depicted that the people are spending a major part of their time surfing the social media sites namely Facebook and Twitter. The owners running the cafeteria business will take up a joint venture towards a developing a page in one of the most renowned social media site Facebook. On developing the page, they will be able to reach out to a number of people with the information in regards to their cafeteria business. The page must be developed in a much more attractive manner so that the customers will be visiting the page and gathering information in regards to the cafeteria and develop an urge towards visiting the place and tasting on the delicacies (Muzellec et al. 2015).
- Email Marketing
Recent times have been witness to major advancements, especially in terms of Internet and Email. People nowadays have been opting email as a method of performing the act of communication with others. The employees who will be recruited to work in the cafeteria can take up the initiative of collecting the information about those customers who are loyal to them including their Email IDs. In views of Wham and Sharma (2014), by taking up their Email IDs, the employees will be able to provide information about various events that the cafeteria will be organizing. This in turn will lead towards building better relationships with the customers and thus will create an urge among the customers towards realising their importance for the proper functioning of the business.
People in United Kingdom have now developed a notion of purchasing quality and durable products at feasible prices. This created an urge within them to look out for discount options. The owners running the cafeteria business would take up initiatives to put up discounts on the various consumers demanding food products and beverages and providing information to the customers by means of brochures, leaflets and hoardings. In words of Kiznyte et al. (2016), due to discounts on the various customer demanding products, more number of customers will be visiting the place to enjoy the taste of the various delicacies that will be served to them in the cafeteria.
Source of any business means the raw materials supplier. Direct sales suppliers are those who supply vegetables, milk, chicken, seafood distribution and so on. Sourcing is divided into a various departments. Raw Materials sourcing mean the materials which are bought by the company regularly. This supplier must be from local areas. Various types of seafood and fish are also imported from other countries. In opinion with Peng (2017), milk and dairy products are supplied by retail shopkeepers. Various types of snacks, biscuit, and cakes are bought from various bakery companies. A company must look after about the authenticity of the products which are regularly bought from a retail shop or local markets. Company Plush cafe has to maintain the funding source of the company. In the perspective of Reymen et al. (2017), sometimes a large company has sponsored this type of small companies. Electricity and various maintenance suppliers are related to this section. Therefore company Plush cafe has to maintain a good communication with all the suppliers so that they can supply quality product to the company with reasonable price. In the perspective of Smith (2018), a company must make a deal with the suppliers before buying any products from them. They must be judged about the quality o the products and must not compromise with the quality over the price. The architecture must be so much attractive and comfortable for the customers. Therefore the company has to contact a retailer of good furniture, sculpture, and artists. The company has to look after about all the supplier’s quality and punctuality.
Various types of technology present in the food industry to improve the business growth. Trademark laws are included in this section. A trade name is an important part of an company business. In opinion with McKenzie (2017), a company can adopt various computerized machine so that the processing of their business flow very smoothly. Foods which are stored in the cafe must be stored at a proper temperature. The hygienist is maintained by them by adapting the purified machine. They can use the packing water for their products. Various types of cooking oven are used by them. Microwave, sandwich maker, coffee maker and juice maker all are effective cooking materials. According to Gartner and Teague (2017), company when apply technology to making foods then they can save time and also they require less manpower. Therefore the company has effectively helpful from updated technology. The company saved money by not appointing more manpower. The first-time company has to involve their money to buy these machines but after that, these machines provide them the advantages. Therefore the company The Plush cafe must have to adopt various techniques for improving their business.
The Plush cafe has recently launched the new coffeehouse idea steadily and receptive growing market segment. The plush cafe is aiming to become specialty in coffee retail business. According to Knox (2016), the economic downturns have shaken the business in the UK, but specialist coffeehouse has been gaining the demand. Despite the recession the cafe business has been the bright spot in the market. Hundred of business has gone bankrupt as the sale, profit has decreased in the recent economic downturn. Coffee chains in the UK have gained huge demand, and this has motivated many coffee makers to start the business. The coffee house is mainly focused on supplying different flavours of coffee including with breakfast and milkshakes. It is clear that UK people love to have coffee despite evidenced preference for tea. The launching of the Plush in the Pleasantville business, the potential of success is measured by different factors.
- Highly affluent population: The population of the town/city depends largely on the success of the cafe house. The Plush has been established in the highly populated area and the also in the sightseeing area. The sightseeing area means that it is the tourists are available for sightseeing all round the year. As per the view of Bishop et al. (2016), the positive factor for establishing the Plush in town is that most people are addicted to coffee and their passion toward it very high. The cafe is opened 24×7, just to serve the customer and customer satisfaction is highly attained. Local population has welcomed the launching of Plush cafeteria which also serves the mouth watering breakfast and different kinds of shakes. The investment in this cafe is good enough to satisfy at least 65 customers at a time. Therefore population does become a major factor in deciding the growth of newly opened cafe.
- Upscale students population: The students of the town where Plush has recently launched considered major customers. Plush has used this advantage that affects ever changing upscale students population. The students and office goers are main population that Plush focuses specifically. The sale of the coffee is high; in this category coffeehouse uses many attractive offers to attract more students. The company policy also changes the mindset along with the taste.
- Year round tourist: The Plush is launched in the tourist available town, where sightseeing is common. The tourist contribution to the profit is large, as they highly appreciate the effort in making good coffee. As opined by Bishop et al. (2016), the available of specialist coffee attracts more people and hence the sale of coffee decline despite the market fluctuation. Tourists visit United King’s town has shopping complex, dining and vineyard nearby therefore it is a crowded place. The place is filled with different culture, value and friendly in nature which helped the Plush to set up its business. The accommodation for the tourists is also available which makes the venue perfect and the sale of coffee is higher in morning and evening. The officer goers, students and other people do like to visit in morning and evening. Therefore the sale and rush is very high. Managing the people and cafe is very crucial during rush hour; it shows the satisfaction among customers.
- Low media cost: The promotion of the newly launched cafe Plush is necessary but spending huge amount promotion will have a negative impact on the Plush business. The promotion can be provided by the media, newspaper, radio broadcast, billboards and signs. In the opinion of Weinstein and McFarlane (2017), the media house and the newspaper costs too much, as they influence large mass. The television ads are highest in term of coverage and therefore are most expensive. The billboards, brochure and radio broadcast is comparatively low, also its coverage is small. The Plush does not only focus on single group of people, but on all type of population. The different flavours of the coffee have are produced to reach to the whole population of the town. The owner of the specialised coffee has only focused on making good quality of coffee rather than spending money on promotion.
The venue at which Plush is launched, is highly visited, therefore there is no need of unnecessary cost. That money is utilised on improving the infrastructure, interior design, layout and many more. According to Dixit et al. (2017), the infrastructure and the dining area have been much spacious, as the company does not want any unsatisfied customers. The dining area with good interior and scent arouses the customer for frequent visit. Therefore the Plush cafe needs not much investment in promotion and they are utilising the money wisely.
- Excellent auto & pedestrian traffic: After location and the population, traffic becomes the issue in attaining the customers. The mode of communication and pedestrian are needed to be more convenient as travelling sometime reduces the sale. As opined by Marcos and Richardo (2018), the auto and pedestrian traffic has to be excellent, as the people like to travel less for coffee. The availability should be nearby, just in some famous street which makes them more popular. Te students and tourist finds difficult in going to a far place and hence the cafe are not be able to attract people just because of location. The Plush Cafe is perfectly aligned within the town and just on the road. Therefore traffic do become factor for the growth of the cafeteria.
- Frequency of local events: The local events are another factor that sometimes plays major role. The local event is more like short term sale, which is very high and for very short period. The availability of stocks and employee serving need to be high, as the flash sale is intense. As per the view of Utami et al. (2017), the local event may have some cultural program, rock concert, and live show by celebrity, party occasion, games meets and many more. These events are attended by many people round the country, and they are new to the place. Therefore the responsibility of the cafe is more to introduce them to the new coffeehouse. It serves as low promotion and the events like this makes huge profit out of it.
It is important to target a significant market group after market segmentation. This is because, a market has different segments which a business can be entered. Moreover, it is necessary to determine that which group of customer or how many customers can be targeted. Based on market segmentation, market targeting decision can be made. Target marketing refers to a process where each and every market segment’s selection and attractiveness are evaluated for entering into associated market. According to Muzellec et al. (2015), target marketing concept is a logical implementation when it comes to marketing’s basic philosophy. Thus, this cafe can target the market in such a way that revenue generation can increase and sustainability of this cafe can be maintained in a long run. This cafe wants to establish a strong relationship with customers. However, it is important to keep in mind that there is many other cafe present in UK’s market. Therefore, UK market is full of competitors who want to build a reputed bond with their customers as well. Thus, this cafe can focus in different segments rather than just one to be more successful. This cafe can do further variations in target marketing in future if everything works well at initial stages.
Age based target marketing
One of the major segments of market is age in order to create an effective market targeting plan. This market segmentation can be based on many different factors such as gender, age, income, geographic, behavioral and many more. However, Plush will only focus on age and income factor of market segmentation in UK. Significantly, when it comes to age, gender is automatically being a unavoidable factor. This is because, preference of coffee and related products are inseparable in relation with customer’s age as well as gender. Plush has targeted urban customers as it is located beside London Eye area. Thus, many visitors including foreigners are also are a part of this target marketing. Similarly, local people or employees from that area are also important to take in consideration. This business will not only provide coffee but also other food items. This will achieve better customer satisfaction which is beneficial for the business. People of this area are often eat outside especially breakfast for limited time before reaching to their workplaces. Thus, target market caters on 18 to 30 years of age on an average basis (bplans.com, 2018).
On the other hand, in UK’s market scenario people from 18 to 15 years of age generally wants to have highly differentiated product. These can be either cold or hot when it comes to serving coffee. Moreover, this age group likes to have richer coffee blends when compared to old age group people. Significantly, people with 30 to 60 years of age generally tend towards more premium brands for better taste in coffee. This can be achieved with espresso in which coffee blend is light. Similarly, these old age people want light coffee compared to young generation (Smith, 2016). Thus, Plush can be serve both of these variant such as light and rich blend of coffee to make every customers satisfied. However, age group is indirectly proportional to gender as well. Therefore, during this planning price tags are also important to keep in mind. This is because, women are tending to be cautious about price point and relaxation at the same time. The environment of this cafe must be soothing and relaxing for every women customer.
|18 to 25 years of age||Likes to intake high caffeine either cold or hot. Preferably richer blend of coffee.|
|30 to 60 years of age||Premium taste in coffee. Generally espresso with low caffeine intake. Popularity of light blends is high.|
Income based target marketing
Expenses are important for every country be it developed or developing and UK is no different. Therefore, while making a business plan for a coffee shop it is necessary to target the market based on people’s income. Similarly, this income based target marketing is only being possible if business planner do not avoid this cafe’s location. The location is paramount where all type of people is visible. London Eye area is highly popular as it is a tourist attraction point. Thus, workers, local visitors, foreigners and many business owners are also a part of this place including some government employee (Choe et al. 2017). Plush can focus in these people with different earning rate. People when on vacation do not think about spending in general scenarios. On the other hand, people who work in this area regularly required cheap or affordable options to choose from. Local visitors may want various options according to their preferences. However, while creating a menu it is important to note that this prime location has several other coffee shop options too.
On the other hand, Plush will offer other options apart from serving coffee. Therefore, tea can be a great choice for those people who don’t like coffee. Young age people do not generally think much when spending. This group of people also wants to taste different options from menu. Therefore, experiment can be done with younger generation without thinking much about price tag. In contrast, old age people think more about saving rather than spending. Therefore, item prices must have lower price tag for this group of people. Plush can make their menu according to economic status of that particular locality (bplans.com, 2018).
The menu can be created in such a way that competitors and income rate of targeted market both must take into consideration at the same time. One of a key factor is coupons or discounts which can be beneficial for attracting both workers and old age people accordingly. These discounts or coupons can be given to the customers at month’s end to attract more customers. This is because; people are generally running out of money in this time of a month. This method can be helpful for young age people too. This is because, young people spend heavily and at the end of a month they also run out of money.
Market needs is basically a concept of marketing which is related to the functional and emotional needs. Every company has a particular target market and the company has responded to fulfill the desire of the target market. According to Thiasyura et al. (2017), a company who wants to achieve success, always maintain the customer feedback. Sometimes customers are not satisfied with some particular product or company. Therefore the company has to look after the needs of their customers. Here the Plush cafe has also need to understand the needs of the company. They can fulfill the needs of the company by taking some steps. First of all the company has to know about their competitors. The workflow and yearly transaction of a rival company decide about that how much they have to be developed to compete with competitors. Second of all the company has to look after about the current market situation, amount of raw materials and rival company strategies. They have to research the local market demand because every company has local customer more than international customers. Therefore the company has to look after about the choice and culture of local citizens. According to their demand, The Plush cafe has to decide on their food menu. Fourthly company also has to look after about the target market. In an opinion with Salamzadeh et al. (2017), a company always has a fixed income from their target market. The Plush cafe can take a unique marketing strategy which separates them from others. They can add innovative ideas with their products. Therefore these all are the needs of the market for the company Plush cafe.
The company has to understand the trends in the current market. Trends mean what is the current demand of the public. Customers, who prefer to go to the cafe in the evening time, are found in simple music. In the perspective of Rashid et al. (2018), actually, they want to enjoy music like jazz, Latin, acid jazz and so on. Customers also love to enjoy some dancing music also. The company Plush cafe has to gather the information about market trends from various newspaper and magazine. Various types of continental food are now demanded by customers. They prefer flavored coffee than normal classic coffee. The various country food themes are preferable for young customers. The company has to find out the customers according to their age that what the timing of entering into a cafe is. According to this timing of customers, they have to decide about their food menu. According to Pronk et al. (2015), architecture is one of the important things which attract customers. Therefore the company has to make their interior design and architecture too much attractive. Customers also prefer the comfortable environment of the cafe and that is why a company has to look after the environment of the company. The company also has to keep some other types of entertainment in the cafe. They may keep some gaming instrument into the cafe. The game must be some indoor game like chess, cards, some type of video games and so on. The Plush cafe must ask customers about their demand about entertainment in the cafe. Therefore the company has to keep the current market trends so that the growth of the company must increase.
Every company produces or sells various types of products. Some particular products have high demand in the market for a long time. Therefore this product increases the market growth of the particular company. Market growth becomes slow when customers cannot accept the product which has a high demand. In an opinion with Kirillov et al. (2015), a company has to calculate the market growth by adapting some steps. First of all the company has to divide the change of market growth with original market growth and quotient should be multiplied with 100. After calculating which result is finding out is the growth rate of the market. In a marketing plan, the growth rate is useful to find out the performance of the company. For example, if the company has $5billion current market size and before 2 years ago the market size was $2 billion, then the current market size will be subtracted from the previous market size. The result which is obtained by subtraction is the difference in growth rate. This growth rate is divided from the original market rate. Quotient which is obtained from the division is multiplied with 100 and the result is called the market growth rate. In the perspective of Guryčová (2017), the market and company growth rate varied by company that means a different company has different types of growth rate. Market growth rate help company to understand the direction of business and efforts giving by company employees. Sometimes a company has faced low market growth rate due to high price rate and lack of advertisement. Business growth rate also gives an indication about the sustainability of the company. High market growth means low saturation and high demand for a product. Low market rate means the customers are not still interested in the products.
Industry analysis is a business tool which helps any company to understand their position in a market by comparing with other companies who are from the same field. The plush cafe belongs to the small business. According to Childs (2016), industrial analysis helps a small business organization to understand the future threat of the company. It also detects the future scope and opportunities of the particular company. The company also understands the demand for raw materials and how much they should develop this section to keep competition with competitors. The industry analysis has three main sections. They are hidden forces in the industry, attractive elements of the company and the critical factors which are responsible for the success of the company. In an opinion with Chang and Chen (2015), a company is compared with other rival companies by judging the ratio analysis of the two companies. The ratio is calculated by divided the total sales with total employees. There exist various types of industry analyzing techniques or model such as Porter’s model. The company named Plush cafe can use Porter’s model for analyzing the industry. This model helps company to know about the potential of them in market. It also detects the bargaining power of customers and suppliers. This model also helps to determine the amount of alternating source. It introduced company about the competitors and the mode of competition.
Individuals industry has different types of pattern of buying and mode of competition. Industry like restaurant and cafe has a competition which depends on the reputation and the current trends which is currently preferable by public. In perspective of Brown and Isaacs (2014), customers when buy some product of any company they judge about the price, quality and accuracy. They always find out the features according to their demand. There exist various types of evaluating factors which help them to take decision. Therefore if company wants to increase their sells they have to increase the quality of their products and price should be very affordable by customers. Here pattern of buying and competition is discussed about the cafe named Plush Cafe. This type of industry must look after about the nature of food. They should ask customers about their demand and if they fulfill their demand then customers are satisfy. According to Berner and Holmes (2014), food quality and taste must be top class by which customers give company positive feedback. Company has to judge about the other company’s product and price. According to the information of rival company they decide about the food products and the price of the products. Therefore the buying pattern of company depends upon the quality and price of the product and competition is judged about comparing the position of rival companies.
Major competitors are such type of competitors who are from same field or produce same type of products. Here the Plush cafe is belonging from food industry. Therefore the major competitors of them are other cafes which provide such service. In opinion with Baim (2016), company has to decide about who are the major competitors and after that they should develop them. There exist three types of competitors. One is direct competitors who produce same product from same category. Another is indirect competitors who produce similar types of products from different category. The last one is replacement competitors who produce different product from different companies. The company Plush Cafe has to handle their major competitors to create product innovation and developing their weak section.
Sector participant’s means companies which are belong from same sectors. Here the discussing business plan is over a cafe named The Plush cafe which is situated in the bank of river Thames. Therefore another participant of this sector is River Cafe, The Thames Riviera Hotel and Blue River Cafe, Riverside Cafe, The Waterfront Cafe Bar Bistro and so on. These all are the same sector participants of The Plush Cafe. In perspective of Aversa et al. (2015), there exist competitions with the same sector participants. Company has to differ themselves from same participants to increase the income rate. Any company is different from other company from various aspects. They are advertisement process, agency, and different types of media. Every company has different types of marketing strategy so that Plush Cafe has to create some innovations to their marketing strategy. The mode of advertisement is also different for every company. Some prefer offline advertisement and some prefer online advertisement. The presentation of food and quality of food all are different for different cafe. However the company Plush Cafe has to create innovative idea in their product and marketing strategy.
5.0 Summary of strategic development and implementation
The Plush cafe will be established considering the marketing strategy of attaining newer customers to visit the cafeteria besides retaining those customers who already have entrusted their trust in the cafeteria. Retaining existing customers and acquiring newer ones by providing quality food, beverages and customer friendly services will allow the partners of the startup cafeteria business to lure customers into carrying out extensive expenditures on visiting the cafeteria. These business strategies will also allow them to attract customers towards visiting the cafeteria more number of times. When the customers come in more to the cafeteria to have a taste of the different delicacies and spend more, this, in turn, will lead towards positive development of generating more sales.
Plush Cafe will be developed as an indifferent cafeteria where the customers besides enjoying a cup of fabulously brewed coffee will also take up the immense pleasure of enjoying the comfortable and relaxed environment. In order to develop the cafeteria indifferent from all other cafeterias, the business partners have brought up the strategy of setting up dim lights at specific corners of the cafeteria that will provide the customers with an inevitable experience of a soothing environment of light and shadow. They can also take up the strategy of setting up sets of four cushioned couches with a glass table in the centre so that the customers can sit back, relax and spend some quality time with their loved and dear ones. They can also take up the strategy of establishing a coffee bar which will be providing beverages depending on customer’s choice. This will allow the customers to evaluate the various ideas of sipping into different forms of beverages. Also, in a specific and visible corner of the cafeteria, a live band will be playing soothing and relaxable music in order to enhance the ambience for the customers. The business partners can also take up a unique marketing strategy by providing coffee beans to those customers who consider relaxing over a cup of coffee at home rather than in a cafeteria.
Besides providing a comfortably enhanced environment for the customers, the cafeteria will also be focusing on generating sales of the various food and beverages that will be served to customers visiting the cafeteria. Thus in order to increase the sales, quality of the food products and beverages will have to be checked on a constant basis so that it can be enhanced to much higher levels leading to increased footfall of customers. The business partners will also have to consider that proper customer service also contributes towards increasing sales. In order to enhance the customer service, the owners of the cafeteria will have to appoint employees in such a manner that there will be 2 employees for each customer. One employee will be taking care of the orders being placed by the customers and the other employee will be looking after the sales of the products that will be ordered by the customers
The Plush cafe has always focused on the highest quality of coffee and the work culture. The small-scale business has been established to provide the coffee and breakfast that encourages the consumers to revisit. The owner of the Plush Cafe has provided sufficient capital for the startups. The managing of successful management will help the cafeteria to double its net worth overcoming two years. The culture maintains a margin of 45% of gross worth which includes operating expenses and enough capital to finance further growth.
|YEAR 1||YEAR 2||YEAR 3|
|Recent Interest Rate||8.00%||8.00%||8.5.00%|
|Durable Interest Rate||8.00%||8.00%||8.5.00%|
Table 6.1.1: Interest rate and Tax rate
The analysis of the interest rate over the time of three years is shown in the above table. The rate of interest for the current year increased to 0.5% and the tax rate has also increased from 21.42% to 25%. This rapid growth in the tax rate is due to a change in government policies and financial planning.
|Month||Total cash flow ($)||Cash balance ($)|
Table 6.2.1: Estimation of cash flow
Figure 6.2.1: Estimation of cash flow
The table and chart above show that the cafeteria will maintain a good cash flow status, which will help in timely capital servicing and investment available for future betterment. The healthy cash flow position shows that Plush cafe is in a good position throughout the months of a specific year.
|Plush café CASH FLOW|
|YEAR 1||YEAR 2||YEAR 3|
|Cash Credit||$25,000||$ 31,000||$ 35,000|
|Cash obtained from Operations||$ 40,000||$ 60,000||$ 75,000|
|Net Cash Sales||$ 60,000||$ 45,400||$ 80,000|
|SUBTOTAL CASH||$ 125,000||$ 136,400||$ 190,000|
|Extra Cash Received|
|Sales VAT, Tax Received||$0||$0||$0|
|Total Current Debit||$0||$0||$0|
|Sales of Recent Assets||$0||$0||$0|
|Sales of Durable Assets||$0||$0||$0|
|TOTAL CASH Credited||$ 125,000||$ 136,400||$ 190,000|
|Expenses||Year 1||Year 2||Year 3|
|Expenses obtained from Operations||$ 15,000||$ 17,000||$ 15,500|
|Cash Expense||$ 12,700||$ 14,700||$15,100|
|SUBTOTAL SPENT ON OPERATIONS||$ 55,500||$ 70,400||$ 73,100|
|Extra Cash Expense||$ 9,000||$ 8,500||$ 8,000|
|Sales VAT, Tax||$20,000||$ 18,500||$ 15,000|
|Repayment of Recent Borrowing||$ 5,000||$ 6,300||$ 4,200|
|Liabilities Principal Payment||$ 12,000||$ 10,500||$ 9,000|
|Durable Liabilities Principal Payment||$ 4,200||$3,700||$5,900|
|Buying of Recent Assets||$ 5,400||$ 4,300||$ 3,700|
|Buying Durable Assets||$ 45,000||$ 65,000||$ 72,000|
|TOTAL CASH SPENT||$ 156,100||$ 186,800||$ 190,900|
|Net Cash Flow||$ 82,350||$ 95,700||$ 97,300|
|Cash Balance||$ 75,000||$ 81,000||$ 89,000|
Table 6.2.2: Cash Flow of Plush Cafe
The cash flow of the Plush cafe shows the total cash spent over the period of three years. The cash spent has drastically increased from year 1 to year 3 that is from $ 156,100 to $ 190,900. This shows the market inflation has increased higher and the expenses on the cafe are also increased.
|Benchmark||Year 1||Year 2||Year 3|
Table 6.3.1: Financial Indicator
Figure 6.3.1: Financial Indicators
The financial indicators of the Plush Cafe have four different benchmarks that are compared with the three-year plan. The benchmarks are sales, operating expenditure, gross margin and inventory turnover. A sale is much higher in the third year as the demand has created in the production and sales of products. The operating expenditure is again higher in the third year, the expenses are high due to the increase in the inflation and tax policy. The Gross margin is overall the same for all three years, the demand and supply rate may be overall similar year wise. The inventory turnover is higher in year 1, and this has created a problem for the Plush cafe. This factor is maintained from the next year and it can also be understood by looking at the graph and table.
|Plush Cafe PROFIT AND LOSS|
|YEAR 1||YEAR 2||YEAR 3|
|Cost of Sales||$212,000||$184,000||$245,000|
|SUBTOTAL COST OF SALES||$296,000||$226,000||$261,000|
|Total Margin %||45.00%||45.00%||45.00%|
|Marketing and Sales||$2,500||$3,000||$5,000|
|Direct Payroll Taxes||$5,300||$7,500||$9,700|
|Total Operating Expenses||$110,250||$106,600||$120,715|
|Profit Before Taxes and Interest||$26,000||$25,500||$27,900|
|Direct Interest Expense||$140||$170||$200|
|Direct Taxes Incurred||$4,500||$5,200||$6,000|
|Total Profit %||12.00%||11.38%||15.89%|
Table 6.4.1: Estimation of Profit and Loss
The sales expense for the first financial year was much less than the third financial year. The sales expense is incurred by the increase in the demand for the coffee. The demand for the coffee has been ever increasing and therefore the cost of sale is also increased to $ 245,000. The operating expenses are also incurred a huge loss to the Plush cafe, as these expenses are unavoidable due to standard taxes, rent, utilities and many more. The total profit incurred by the cafeteria has increased from $ 45,000 to $ 59,000 over the time of three years. The rate of profit has also increased to 15.89% due to the popularity of the cafe that provides quality coffee and services. The growth in sale indicates the uprising of the business of the café Plush and therefore the profit percentage has increased. The sale of the coffee and the breakfast in the UK has increased even in the times of recession. The economic recession has brought huge downfall in the business but Plush has been able to revive its business. The quality of coffee and service enable the customers to revisit the café and experience the unique service.
In the United Kingdom, there has been an increase in competition among the food and beverage industry in the recent times as more and more number of cafeterias and restaurants are being established to cater to the needs and demands of the customers who are always on the verge of tasting the different delicacies. In such a high competition market consisting of some of the market leaders namely Charlie’s Cafe and bakery, the London cafe , Little Wonder cafe and many others, the owners of the startup cafeteria like the Plush Cafe will have to look forward towards opting better opportunities for investment so that they are able to cater to the needs and demands of the various customers to greater extents in terms of product pricing, economic conditions of the customers and other factors. The owners of the cafeteria will have to develop much more innovative marketing strategies so that they can lure a number of customers to visit the cafe and enjoy the taste of different delicacies that will be served in the cafeteria. Also, the product selection and pricing will have to done in a way keeping in mind the economic conditions of the customers. This will allow customers with different economic backgrounds to have a taste of the delicacies being served in the cafeteria. In order to establish the cafeteria in a highly competitive market, the owners of the cafeteria will first have to incur the capital that they will be requiring initially for fulfilling the costs that will be incurred for establishing the cafeteria, for carrying out extensive marketing strategies in order to generate awareness and knowledge among the customers. The initial capital will also be utilised by the owners in developing a well to do operations for a smooth functioning of the cafeteria and to maintain its sustainability in a highly competitive market.