Business Plan for Cafe Hearts

This document is a detailed business plan for Cafe Hearts, a new restaurant that serves fast food and beverages. It covers various aspects such as the marketing plan, financial plan, management team, and company structure. The marketing plan includes market research, segmentation, targeting, and positioning strategies. The financial plan discusses funding sources and financial statements. Overall, this business plan provides a comprehensive overview of Cafe Hearts and its strategies for success.

Business Plan

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................4
Marketing Plan............................................................................................................................4
Financial Plan..............................................................................................................................8
Management Team and Company Structure.............................................................................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14
Books and Journals:..................................................................................................................14

INTRODUCTION
Every person wants to become an entrepreneur who run their own business. Business is
the activity that perform by a person for making money through selling goods or services. For
achieve success and growth in career, business plays a significant role as it helps in generating
profits (Ferrandina and Carriero, 2018). When person earn money then they become able to take
decisions regarding their future. With the help of running own business individual can purchase
anything according to their needs and requirements. To run a business a entrepreneur needs skills
and knowledge so that they can overcome with upcoming unexpected situations. So that's why in
this context, a new business is started “Cafe Hearts” to cover a business plan. In nowadays, most
successful business that run in market is cafes and restaurants. Because every person wants to eat
good food so they are prefer to go in cafes. Cafe Hearts is the small restaurants that serves fast
food to their customers. For starting a new business, owner of business needs to make a business
plan in which all things are covered. It is an important task that should be perform appropriately
so that it gives desired result. Cafe Hearts is the cafe in a town that serves fast food, drinks and
beverages to satisfy the wants of customers. They use organic products that helps in stay healthy
and fit. It is innovative idea because it takes organic products that gives same taste as fast food
gives to their customers. Their idea helps to invite more and more customers because everyone
wants to stay healthy with enjoying a good taste.
Cafe Hearts use only organic vegetables that they use from their own farms. They have
their own farms in which they are growing crops with organic method. This thing becomes an
attraction point for customers that they use their own crops for making tasty healthy food. Cafe
Hearts use traditional theme of London because they run their business in a city. Because of their
traditional theme customers get attracted. With traditional theme they cafe also use some
environment friendly products that do not harm nature such as they use wooden utensils to serve
food. Cafe focuses on less use of plastic which helps in reduction of waste. With their innovative
ideas and thoughts customer enjoying and satisfying with their services. Their décor and
ambience invites customers that they can take experience from cafe. Because of their good
environment it gives positivity to customers while enjoying food. Customer can enjoy their food
offline as well as online. They also serve delivery of food and drinks with the help of providing
online order service to customers. Customer can easily give their order through their own online
app and get delivery of fresh and tasty food.

Marketing strategy of Cafe Hearts is very simple because they use digital platform that
helps in promoting their goods and services in market place. It is very obvious that they use
digital platform for promotional activities because in current scenario digitalisation takes a
boom. Organisation can easily spread the information of their goods and service with the help of
digitalisation method because it high to ranch for attracting potential buyers. Their capacity is
higher than other promotional tools. Cafe Hearts use social media for promoting their fast food
services. In nowadays every person use social media and can easily access their cafe.
Cafe Hearts is a very innovative business because of their strategy and resources. They
has a fear of infringement of their idea. So for saving their idea it is important that they
registered in intellectual property rights. It is analysed that intangible asses are very important for
success and growth of business as it helps in increasing brand value. So that's why intellectual
property right is a tool that helps to save their innovative idea.
Patent is the next essential factor that should be kept in mind of Cafe Hearts' owner. If
cafe get patent on their composition of food ingredient then they can gain monopoly in market
and earn maximum benefits (Ontario, 2018). For taking competitive advantage in markets Cafe
Hearts need a marketing and financial plan that helps in achievement of their desired target
market. Marketing plan and financial plan is an important element that should considered in
starting of new business. It include in business plan that helps in making their business
successful. Marketing plan includes industry analysis, target customers and competitors analysis.
MAIN BODY
Marketing Plan
It is the report that outlines marketing strategy of organisation which include each and
every thing that are related to promotion of goods and services. It is the part of business plan as it
helps in formulating marketing strategies which gives a framework of future activities that are
performed in near future (Care Quality Commission, 2018). It is a blue print in which
organisation list all important activities that helps in accomplishment of goals and objectives.
Marketing plan is essential document that should be make wisely so that organisation can take
right decisions. Cafe Hearts is a new restaurant that need marketing plan for promoting their fast
food and attracting potential buyers. Marketing plan make only on the basis of mission and
vision of organisation (Babatunde and et. al., 2020). If it not relate to objective of cafe then it

may be get waste so that's why it is necessary for organisation that they should focus on
objective of cafe. Cafe has mission and vision statement that are given below:
Vision:
“To serve best food and services that satisfy human wants.”
Mission:
“To create a brand equity in market with the help of providing best experience to
customers.”
Values:
“The value of Cafe Hearts is to ensure the quality of food that encourage healthy and fit
lifestyle of their customers.” Employees are perform their work with honesty and integrity.”
Objectives:
“To make people aware about their products in the market with the time period of 2 years
for achieving success and growth.”
Market Research:
Every organisation need to identify and analyse the need of market so that they can take
decision regarding products and services (Kavonga, 2017). For making a successful organisation,
it is importance that they firstly understand the consumer buying behaviour and their taste
preferences. After that they can take some decisions because without understanding of consumer
their decision may be get waste. It can be done through market research that helps in identifying
the factors which affect organisational growth and success. Marketing research is necessary step
that should be performed wisely so that organisation can achieve their target market. Cafe Hearts
is a new start-up that need a detail information of market so that they take decisions of their
products and services. They require to identify the taste and preferences of customers which
helps in decision of ingredient of food that they are going to be serve in their restaurant
(Barnabé, 2020). Their success and growth is depend on marketing research because it gives all
necessary information that Cafe Hearts need. To make best food and drinks they require idea of
taste which helps in composition of food ingredients. They require information because of
serving best experience to their customers. Cafe Hearts grow their crops that need current trend
of market so that they can take decision regarding their growing of crops. They are serving
organic food material which give taste and health to customers. It is analysed that Cafe Hearts

can identify and analyse all factors with the help of marketing analysis model that are mentioned
below:
Porter five forces model:
Porters five forces model is the tool that helps to analyse external factors of market that
can be affect on organisations' success and growth (Ibidunni, Ogundana and Okonkwo, 2021). It
assist in finding competitors in the market. For a new start-up, it is very important to know the
competition in market. After analysing the competition they can formulate strategies to grow
their business. There are five fierce that cover in this model which mentioned below:
Threat of new entrant: In present times, Cafe growing very well in the market which
encourage new entrants that they come in the market. So that's why it is crucial for Cafe Hearts
to identify the number of new entrants that come in theirs business area. After that they
formulate strategies accordingly. Cafe Hearts is the new start-up that need a hug amount to invest
in their business but it becomes difficult for new business because they have no profits that they
invest in capital.
Bargaining Power Of Buyers: It is important to know by Cafe that their customers
bargaining power is high or low (Gonzalez, 2017). It is analysed that in London there are number
of cafes that run their business so buyers have a choice to switch to other restaurant. So
bargaining power of buyers is high in cafe and restaurant business.
Bargaining power of suppliers: It is found that Cafe Hearts has low bargaining power of
suppliers because they do not bough raw material from any other source. They grow their own
crops that reduce the bargaining power of suppliers and other materiel they bought from any
stores.
Threat of substitute: There is very high possibility of substitute because there are number
of cafes in London (Blades, 2020). So that's why Cafe Hearts choose new and innovative idea
that helps in attracting more and more customers.
Competitive rivalry: It is very well known by Cafe Hearts that competition is present in
each and every sector. But Cafe Hearts use traditional theme of London and use organic food
material so that's why they can best competition.
STP:

Another model that should be use by new start up i.e. STP model. STP is the acronym of
segmentation, targeting and positioning (Maksymov, 2017). All of three things are very
important to take in consideration while cafe wants to achieve their goals and objectives.
Segmentation: It is a process in which organisation divide their population according to
there area. It is important for Cafe Hearts that they segment their large population into small
gropes so that they can satisfy each and every individual wants.
Targeting: It is the step in which Cafe Hearts target theirs market which they want to
capture. It is very important for organisation that they make a list in which they give priority to
each segments. With the help of targeting cafe can achieve their desired target.
Positioning: Cafe Heart wants to set an image of their brand in the market place with the
help of effective strategies. In this step, organisation formulate strategics and implement them so
that they can build a positive image in market.
Competition:
The most important thing that should be kept in entrepreneur that they identify and
analyse the competition in market (Maugle, 2019). It is very important to know about
competition so that organisation can take steps accordingly.
Sale Process:
It is the process in which organisation describe the sale process that is mentioned below:
Approach the client: It is the first and foremost step in which cafe tries to approach their
customers or client (Priem, Wenzel and Koch, 2018).
Discover client needs: Now next step of cafe that they identify and analyse the needs of
customers which helps in decision making process regarding to products and services.

Provide a solution: After identification of needs and wants to customer now cafe try to
give solution with the help of providing best products and services.
Close the sale: It is the last step that taken by cafe to sell their products to customers
(Jeong and Lee, 2017).
Complete the sale and follow up: This process is not end with selling an article but it
continues with following sale.
Pricing Strategy:
Cafe Hearts using penetration pricing strategies that helps to attract more and more
customer so that they can achieve their target market. In penetration pricing strategy, cafe serve
products with low and reasonable prices so that customer get agree to purchase their products.
Financial Plan
Financial plan is the blueprint of financial activities which includes finance related
activities (Kiiza, Nassimbwa and Mulumba, 2018). It is very important for organisation because
finance is the backbone of any organisation. To start a new business, organisation need huge
capital so that they can invest in infrastructure of cafe, buy raw materials or ingredients that are
need to produce, etc. so they should arrange funds that can be through various sources mentioned
below:
Funding through personal loan: Every entrepreneur choose personal savings to start
their business. It is the first and foremost method of arrangement of fund i.e. through personal
loan. Personal saving is an essential source of introducing capital in the business.
Loan from bank: A entrepreneur has not enough capital that helps to fulfil their needs
and requirements of business. So they are going for borrow loan from market that helps to fulfil

their requirements. Cafe can be taken loan from various sources such as loan, financial
institutions, etc. Loan from bank is the best source to borrow money with payment of interest.
Loan from relatives: Another best source of arrangement of funds i.e. loan from friends
and family (Joo and Cho, 2017). It is also the best source to pool the money so that organisation
fulfil their needs. It is opted because relatives give low interest rate.
New start-up should know about some fianacial statements that helps in knowing their
exact and accurate position of finance. There are some financial statement of cafe i.e. given
below:
Cash Flow Statement: It is the statement that recorded only cash related items and
transactions. In the cash flow statements, it recorded cash inflows and outflows that gives
position of working capital. Cash flow statement is very necessary for organisation as it record
operating, financial and investing cash flow (Butuner and et. al., 2019). Operating activities
include operating cost such as sales, lease, etc. investing activities are related to purchase and
sales of assets, example, plant and machinery. It also include financial activities such as
dividend, purchase and sale of equity and borrowings. Cash flow statement is very necessary
because it helps in knowing of exact position of liquidity in business. Liquidity is essential
because it helps in fulfil day to day operations such as purchase of raw materials.
Income Statement: It is another statement that gives accurate information of position of
organisation. It gives knowledgable of profits and losses that helps in formulating strategies. It is
also known as profit and loss account (Majeed). Every organisation need to calculate profits or
loss that incur by organisation in the particular time period. Generally organisation make income
statement in the end of financial year. It is bifurcated or divide into two sections that are expense
and income. In expense column, organisation give details of expense that they incurred in a year.
Whereas in income column it record all transaction that are income for organisation.
Cash Flow statement of Cafe Hearts
Operating activities
Cash generated from operations 1405010
Interest paid -14360
Interest received 19210
Tax paid -102520

Cash outflow from lease provisions -45560
Cash outflow from refinancing and acquisition costs -67510
Net Cash Flow from operating activities 1194270
Investing Activities
Purchase of intangible assets -142330
Plant and equipment -153450
Purchase of subsidiaries -164570
Proceeds from disposal of property, plant and equipment 273350
Purchase of property -365100
Cash acquired on acquisition of subsidiaries 39270
Net cash flow from investing activities -512830
Financing Activities
Financing activities Net proceeds from issue of ordinary
Share capital 305810
Repayment of borrowings 272000
Drawdown of overdraft 9500
Loan facility fee paid -1500
Dividends paid to shareholders -17520
Finance lease principal payments -1700
Net Cash Flow from financing activities 566590
Net Increase / Decrease in Cash and cash equivalent 1248030
Cash at beginning of the year 200000
Cash and equivalent to cash at the end of the year 1448030
Income Statement of Cafe Hearts
Revenue 1755300

Cost of goods sold -1053180
Gross Profit 702120
Administration Cost -87770
EBITDA 614360
Depreciation and Amortization -105770
EBIT 508590
Interest Payable -32440
Interest receivable 23210
EBT 499360
Tax on profit -99870
Profit After tax 399480
Break Even analysis
Sales 175530 15 11702
Variable
Cost -63190.8
Fixed Cost -42125
Total Cost -105318 175530
5.4
Units Fixed Cost
Variable
Cost Total Cost Sales Profit
4388 42125 23695.2 65820.2 65820 -0.2
4400 42125 23760 65885 66000 115
4323 42125 23344.2 65469.2 64845 -624.2
4324 42125 23349.6 65474.6 64860 -614.6
4325 42125 23355 65480 64875 -605
4326 42125 23360.4 65485.4 64890 -595.4
4327 42125 23365.8 65490.8 64905 -585.8
4328 42125 23371.2 65496.2 64920 -576.2
4329 42125 23376.6 65501.6 64935 -566.6

4330 42125 23382 65507 64950 -557
4331 42125 23387.4 65512.4 64965 -547.4
4332 42125 23392.8 65517.8 64980 -537.8
4333 42125 23398.2 65523.2 64995 -528.2
4334 42125 23403.6 65528.6 65010 -518.6
4335 42125 23409 65534 65025 -509
4336 42125 23414.4 65539.4 65040 -499.4
4337 42125 23419.8 65544.8 65055 -489.8
4338 42125 23425.2 65550.2 65070 -480.2
4339 42125 23430.6 65555.6 65085 -470.6
4340 42125 23436 65561 65100 -461
Break
even point
of sales is
4389 units
Balance sheet of Cafe
Hearts
Current Asset
Other receivable 10230
Inventory 205660
Prepayments 54600
Cash and equivalents 1448030
Assets of disposal group
held for sale 20460
Non current Assets
Intangible assets 153450

Property, plant and
equipment 398650
Fair value lease and assets 105340
Total Assets 2396420
Current liability
Over draft 22300
Trade and other payable 225630
Corporate tax liability 30210
Provision 56210
Non Current Liability
Long term Payable 546540
Fair value lease liability 23120
Differed tax liability 35460
Equity 1456950
Total Liability 2396420
Contingency Plan:
It is very important for organisation because sometimes planned business plan is not
working or may be get fail. So organisation should make their contingency plan that help to
overcome with problems that occurred in plan A. Cafe Hearts make their plan B as an alternative
plan. They are prepare themselves from contingency factors through changing of themes and
décor. They will also change in pricing of their products and marketing strategy that helps to re
boost their business with new ideas to attract their potential buyers. They include changing in
menu of cafe according to the situations.
Management Team and Company Structure
Details of ownership and management of the Business:
Cafe Hearts is the innovative business idea because of their décor and theme. Cafe Hearts
has a single owner with few members of management team. They started their small cafe and
restaurants with organic food material. They has their own farm in which they grow crops that
are useful in ingredient of food. They start their business on rental land. They take some loans

from friends and banks for introducing capital. Their main focus is on quality of food and drinks
that serve to customers. They have 5 member in their management team in which 2 of them are
chefs. Remaining are severs or waiters and sweepers. Apart from this, they use organic material
in ingredient of dishes.
Role of team members:
Team member of Cafe Heart plays a significant role in success and growth of business.
Cafe Hearts set some objectives and goals that can be achieved only with the integrity and
honesty of team members. Their work performance decide the success of their cafes. The
manager decide the assignment of duties of each member and give responsibilities accordingly.
Skills and qualifications that are required for employees in organisation:
Those person who are chef of Cafe Hearts should have some basic qualifications that
need to perform their jobs (Panwar and Agrawal, 2018). It is essential because they every dish
has different name so to read them carefully, it is important they they have degree or diploma in
Professional Cookery and Culinary Arts. They also have some important skills such as
communication skills, customer service skills, problem-solving skills, commercial awareness,
teamwork skills, etc. It is assumed that employees are the key element of success of business. So
that's why it is important for Cafe Hearts that they should have skilful and qualified employees.
If it is finding that they have lack of any skills then organisation should give some training
programmes to deal with situations.
Training is an important concept as it increase skills and knowledge of employees or
members of Cafe. Cafe Hearts provide some training programme to their chefs for cutting and
slicing that make their food delicious. They also provide some training programmes to serving
staff in which they are trained to deal with different kinds of customers. It is not necessary that
every customers is a good kind of nature. Sometimes they are not good so that's why it is
important to give some training that how they can deal with them.
CONCLUSION
Business plan is an important task as it helps in reducing risk of uncertainties. So it is
concluded from the above discussion that when a person wants to open a new business then it is
recommended that they should make their business plan. It includes all important activities that
are performed in near future. It is the blueprint or road map of upcoming activities in a business.
It is very necessary for organisation in which they include marketing plan, financial plan,

contingency plan, etc. Marketing plan helps in formulating marketing strategies that assist in
achievement of goals and objectives. Finance is the backbone of every business because without
finance no single business can not start. They also make plan B as an alternative or contingency
plan.

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