Cafe Design and Business Plan

This assignment requires students to explore current cafe interior design trends, visually represent their ideas through illustrations, and create a comprehensive business plan for a new cafe. The business plan should include elements like target market analysis, marketing strategies, operational plans, and financial projections.

BUSINESS
ESSENTIALS

TABLE OF CONTENT
INTRODUCTION..............................................................................................................1
TASK 1.............................................................................................................................1
1. Reason to select Germany and justification of choice..............................................1
TASK 2.............................................................................................................................5
Marketing mix of the cafe.............................................................................................5
TASK 3.............................................................................................................................7
Implications of the need for Marvin and Smith’s to cover a wider geographical area in
terms of a different country. Considering its impact on the organisational culture and
personnel and managing staff issues of the following and show how these issues are
interlinked.....................................................................................................................7
TASK 4.............................................................................................................................9
Using the given financial information, evaluating how their profitability and liquidity
may impact on decisions available to them..................................................................9
TASK 5........................................................................................................................... 10
A concluding summary about the overall viability of overseas expansion at this stage
................................................................................................................................... 10
REFERENCES...............................................................................................................12

INTRODUCTION
Business determines the opportunity for enhancing the economic condition of a
nation. This project has been carried to enlighten the expansion of a coffee shop by two
business partners namely Hank Marvin and Patty Smith. In order to expansion of their
enterprise, they are hereby required to select a suitable market to reflect an overseas
enlargement of their business (Rodrigues and Naidoo, 2016). This is basically in regard
to ascertain several opportunities in their undertaken business and design an
appropriate coffee shop in the selected marketplace. In this way, Marvin and Smith can
put additional services such as effective customer service and delivery, etc.
TASK 1
1. Reason to select Germany and justification of choice
Reason why Marvin and Smith need to select Germany
Germany is selected by Marvin and Smith to expand their coffee shop in an
overseas country. People of this nation prefers coffee that largely influenced both the
business partners to expand their business in this nation. There are several coffee
shops that already exists that will in turn reflects a beneficial consideration for Marvin
and Smith to make an effective business relation in a pertinent manner (Flanagan and
Alfonso, 2017). In Germany market, there exists several other coffee shops which is
referred to be a greatest opportunity for both the business partners to expand their
business in a successful manner. Hence, reasons for the selection of Germany are as
follows:
 In Germany, people are found to consume around 150 litres of coffee per year
which is more than beer, wine and mineral, etc.
 Every week, the consumption of coffee is around £1500 which is beneficial for
Marvin and Smith to earn more profit within the nation.
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The following graph shows that Germany is the 2nd largest consumable market of coffee
after Australia. Number of cafe around the market is 306 on whose basis, Marvin and
Smith have hereby decided to expand their business in this particular area.
Logistic that the firm uses-
In order to expand the business, logistic consideration includes two types which
are inbound and outbound logistics. They are as follows:
Inbound logistics: This includes buying of material, resources and many other
elements from suppliers to manufacturers (Kakarot-Handtke, 2015). In order to make
coffee, there are beans as raw-material which can be purchase from Uganda with free
trade agreement with a prior role of suppliers in it to ensure a fair trade practice for the
same. Therefore, entity includes tariff and non tariff barriers that are being adopted at
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Illustration 1: Graph of coffee drink in world
Source: (Tsui, Karam and Bernal, 2016)

the workplace. In addition to this, there are distinct rules and regulations that are also
required to be determined for the purpose of transportation.
Outbound logistics: This aspect includes the process of procurement,
distribution and disposal of logistics. In this, logistics demonstrates the procedure of
buying coffee beans from Uganda that needs transportation facilities (Shein, 2014).
Hence, in Germany various documents will be required such as insurance bill, letter of
credit and lading bill, etc. It is with the help of proper warehouse facilities and
environmental conditions, beans will be kept in such a manner that will in turn reduce its
spoilage.
Structural changes in the enterprise to overcome issues
Main structural challenge that is apparent to be faced by Marvin and Smith is the
German language that is mostly used by the people residing in Germany market.
People who love to drink coffee and unable to understand language of partners create
negative results (Pike, 2015). Thus, it is important to recruit German person in business
so that they can understand the exact requirements of the customers. Interior design of
the organisation is also required to be good and effective to further create a positive
impact on each of the customer approaching the coffee shop.
Ethical consideration of the business
The organisation is hereby required to appoint a German translator who can
exchange the views and ideas of people speaking English and are unable to speak in
German to the one who cannot speak in English. Also, both male and female
candidates are needed to be appointed so that the work can be distributed behind the
counter to serve hot drinks, cold drinks and coffee, etc., (Tsui, Karam and Bernal,
2016). In this way, company can respect their customers through considerable values
and beliefs. As a result to which, this will together assist in promoting the culture at the
workplace by creating an ethical environment in the cafe by following the dignified rules
and regulations to serve the users.
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Illustration 2: Interior design of cafe
Illustration 3: Design of cafe

TASK 2
Marketing mix of the cafe
It is while establishing a new business at a newer region, it is important for
Marvin and Smith to incorporate a significant strategy for the ultimate success of their
cafe which will be opened in Germany (Bernstein, 2015). Herein, the tactic of marketing
mix is referred to be one of the most prominent consideration of the business to keep on
flourishing their business from a long term perspective. An elementary structure of
marketing mix is mainly composed of 4 leading elements as stated below- Product- This provides an elementary base to the cafe business that will be
streamlined with some incorporated products to serve the customers
approaching the coffee shop. It is hereby advisable to use an innovative
approach to orient the business and take it to a successful level of growth and
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Illustration 4: Design of cafe

prosperity. For which, it is hereby important for Marvin and Smith to firstly
choose a target group to design their products as per their factual preferences
(Hnátek, 2015). This is for instance on referring to the group of youngsters who
are mostly known to hang out with their friends and peers in cafes. On whose
basis, Marvin and Smith can hereby introduce some preferential products like
Cappuccino, shakes of different flavour, latte, smoothies, pastries and
sandwiches, etc. Also, on targeting the business associates who spends a long
hours for meetings in coffee houses can be served some filler snacks items like
pizzas and tacos, etc. Price- This being one of the most considerate prospect of a business plays a
very important role in not only fetching the interest of the consumers but also
depicting the profitability of the business. It is with a special consideration of a
newly opened business as in the recent case of the cafe established by Marvin
and Smith. Choosing a contending strategy for pricing the product is one of the
most recommendable measure over here and in whose accordance, they could
incorporate the tact of complementary pricing (De Muth, 2014). This is apparent
to provide a contending edge to the newly established business of Marvin and
Smith. It is a strategy in which, the consumers will be charged very less cost for
the very common food item of the cafe such as coffee and other beverages.
However, the prices fixed for other food items such as sandwiches, tacos and
pizzas, etc., will be quite high in comparison to the existing number of
competitors in the market so as to counterbalance the overall costing of the
products. Through this strategy, it will be easier for Marvin and Smith to attract a
large set of consumers to buy the offered drinks at a cheaper price. After which,
they are themselves likely to purchase the slightly higher priced products as
well, once they are certain about its considerable quality. Place- This constituent of this framework states the way in which, the
customers can access the offered products and services. Wherein, Marvin and
Smith has hereby opted for physical existence to distribute their products to the
consumers by establishing a cafe in a very renowned location of Germany
(Davis and Doveton, 2015). It is however to integrate with the technical
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advancement taking place in the market, they have also decided to make home
deliveries by creating an official website. Through which, the customers can
directly order their food by referring to the proposed menu and can also call
them on the provided numbers onto the site and make telephonic orders.
 Promotion- This is basically to acknowledge the targeted set of consumers
about an active existence of Marvin and Smith's cafe in Germany by together
promoting their offered products and services to them (Newport and Shain,
2014). For which, they can hereby use the most common tool of advertisement
to promote their goods via television, social media and other print media tools
like newspapers and magazines, etc. They can also refer to use the tactic of
sales promotion by which they can hereby refer to offer discounts on their
offered goods and services.
TASK 3
Implications of the need for Marvin and Smith’s to cover a wider geographical area in
terms of a different country. Considering its impact on the organisational culture
and personnel and managing staff issues of the following and show how these
issues are interlinked
It is on referring to the overseas expansion plan of Marvin and Smith where they
are now referring to cover a broad geographical area of Germany. It will certainly reflect
distinct requirements of their German customers in comparison to the consumers in
their other operational areas (Ming-Ru and et.al., 2014). This in turn is apparent to
impact upon their previously adopted practices and work pattern that will mainly
comprise with their organisational culture and issues in managing their staff and
personnel's, as mentioned below- Gaining competitive advantage- It is referred to be a foremost consideration of
almost all sort of business establishments to consider a defined attainment of
profit to successfully thrive the business. However, rivalry is hereby referred to be
a concerning outlook that is needed to be battled with appropriate and tactical
measures. Marvin and Smith is together required to focus on this agenda of
combating the intensive state of competition in the German market where it is
already placed at second position in the lieu of coffee consumption (Busse,
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2014). Due to which, gaining contending benefit is hereby referred to be a
challenging prospect for Marvin and Smith where they are required to undertake
some innovative techniques to satisfy the realistic needs and demands of the
targeted customers. This will be based upon some distinct set of requirements
that are needed to be fulfilled where the German consumers must be well
acquainted about the type of coffee which is usually available to them at large
scale and are now looking for some variation in it to ameliorate their experience.
Marvin and Smith is hereby advised to take a prompt advantage of this
consideration and undertake some inventive approach to serve the users in an
improved way.
 Personnel and managing staff issues- It is referred to be yet another crucial
consideration of Marvin and Smith to administrate their personnel resources in
Germany in a suitable manner that in turn lessen down the issues related to it.
However, it is a very considerate task in which they may hereby refer to
undertake several decisive measures that may or may not assist them in
reducing the issues related to the administration of workforce. It is with a special
context of their hospitality businesses in which the consumers are directly in
contact of the appointed staff members. As a result to which, they may hereby
reflect a very trained and professional outlook for serving the users and treating
them well (Srinivasan, Srinivasan, Humes and Humes, 2017). For which, Marvin
and Smith should hereby arrange regular developmental sessions for training
their deputed personnels about the same and should also incorporate the
practice of taking customer's feedback on timely basis. Likewise, absenteeism
and turnover of employees is together referred to be some leading issues that
are likely to challenge such widen expansion of business by Marvin and Smith.
This must be resolved by uniting to a streamlined culture in the organisation that
will duly regard the German organisational culture. As a result to which, the
German based employees will not find it difficult to adjust into a newly
incorporated world of business where the owners are from another nation with
distinct set of culture and are giving a prime importance to their own cultural
norms and beliefs.
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TASK 4
Using the given financial information, evaluating how their profitability and liquidity may
impact on decisions available to them
This is to measure both the profitability and liquidity prospect of Marvin and
Smith's cafe, the technique of ratio analysis is being undertaken over here. Wherein,
this technique of ratio analysis is amongst the most effective tools that clearly depicts a
fitting position of the organisation's profit and liquidity state (Shein, 2014). Furthermore,
it is on comparing the actual performance of Marvin and Smith's cafe with that to their
specific standards. By which, they can hereby attain a likely set of information about
their company to know its financially stable position and ability to expand into more
number of markets.
It is hereby on the basis of above carried calculation, the profitability analysis will
be done by referring to the gross profit and net profit ratio. Whereas, the liquidity
position of Marvin and Smith's cafe will be analysed using their enumerated current and
quick ratio, as delineated below-
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 Profitability analysis- This has been assessed by calculating the gross and net
profit ratio of Marvin and Smith which is 57.78% and 7.44% respectively. Out of
which, the gross profit ratio (GPR) has hereby shown some considerable results
which is a resultant outcome of controlled direct expenditure like the expenses
done on material and labour, etc. Such limited aspect towards overspending has
in turn evidenced a profitable prospect of Marvin and Smith by which they may
hereby refer to generate high profit margin (Pike, 2015). However, the
computation of net profit has shown a depreciative result where there was a rise
in the indirect expenditure of Marvin and Smith in the previous year of the
business. For which, there existed a decreased margin of profit and for whose
rectification, a budgetary controlled system is advisable to be employed by
Marvin and Smith to streamline the error.
 Liquidity analysis- This assessment has been done by referring to the
scrutinisation of current and quick ratio. Both of these are found to be 5.71 and
4.42 percent respectively and are then being compared to their idealised ration of
2:1 and 5:1. It is therefore on referring to the current ratio of 5.71, Marvin and
Smith is referred to possess more current assess like stock, debtors and cash,
etc. This in turn have ensured a high state of liquidity of the business which is a
good indicator for its future growth (Tsui, Karam and Bernal, 2016). However, the
computation of its quick ratio have depicted the accessibility of current assets in
the business which can be quickly converted into cash within no time. This
together indicated a high usability of this expanded business with the use of
quick assets of Marvin and Smith where they have duly utilized a high state of
liquidity in the year 2015.
TASK 5
A concluding summary about the overall viability of overseas expansion at this stage
It is in conclusion to the above report that has stated a viable expansion of
Marvin and Smith's cafe in Germany where it is specially with reference to their growing
hospitality business that is continually prospering at a very higher rate. This indicated
Germany as one of the most appropriate country for business enlargement. It is where
Marvin & Smith is together referred to have a significant prospective of growth and
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development in Germany in terms of their fiscal aspects. Apart from this, the present
report has together revealed a suited framework of marketing mix to benefit the
business with generous efforts to satisfy the actual requirement of their targeted set of
clients. Herein, innovation is undertaken as a key element to achieve a competing
position over the rivals who are already dominating in this field. Additionally, the
undertaken tact of expansion has also necessitated the organisation to adjust into the
environment of a newly incorporated market by administrating any staff related issues.
Wherein, these are required to be managed with the help of efficient policies. Also, this
report has depicted a feasible use of current assets that can be done by Marvin & Smith
to meet out their financial requisition in the best possible manner.
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REFERENCES
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Hnátek, M., 2015. Entrepreneurial thinking as a key factor of family business success.
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Kakarot-Handtke, E., 2015. Essentials of Constructive Heterodoxy: Institutions. Browser
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Ming-Ru, Z. and et.al., 2014. A study on enterprise under globalization competition
knowledge management and creation overhead construction. Journal of
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Pike, S., 2015. Destination Marketing: Essentials. Routledge.
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Development Programs and Groups. Handbook of Human Resources
Management. p.483.
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Shein, K. A., 2014. Rain essentials: from downpours to drizzles this common weather
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flight operations. Professional Pilot. 48(3).
Srinivasan, L., Srinivasan, L., Humes, M. and Humes, M., 2017. Behavioral interviewing
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Tsui, F., Karam, O. and Bernal, B., 2016. Essentials of software engineering. Jones &
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