Importance of Business Plan for Prufrock Coffee Cafe

This study summarizes importance of business plan which allow companies to develop goals, risks and strategies by which it can solve all problems. It will also show analysis of business environmental factors with the help of pestle and swot analysis model. Porters 5 forces analysis model also plays an important role as it allows company to identify intensity of competition in the same industry in which company wants to operate.

Business Plan
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EXECUTIVE SUMMARY
This study summarizes importance of business plan which allow companies to develop
goals, risks and strategies by which it can solve all problems. It will also show analysis of
business environmental factors with the help of pestle and swot analysis model. Porters 5 forces
analysis model also plays an important role as it allows company to identify intensity of
competition in the same industry in which company wants to operate.
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
Table of Contents.............................................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Business details............................................................................................................................4
Location.......................................................................................................................................4
Industry analysis..........................................................................................................................4
Description of product and service..............................................................................................6
Competitor analysis.....................................................................................................................7
Operation plan.............................................................................................................................8
Finance and funding plan.............................................................................................................9
Risk and contingency plan.........................................................................................................10
Marketing strategy.....................................................................................................................12
Management team and their roles..............................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
A business plan refers a written document which describe nature of the business and help
companies to develop their products and business ideas (Ekanem, 2017). This present study is
based on Prufrock coffee cafe who wants to attract customers and taking competitive advantages
and for this it has developed a new business idea of offering puffed roll snack to customers along
with coffee. This study is going to discuss industry analysis by making use of PESTLE, SWOT
tools. Further, it will also how uses of competitor analysis with an effective operational and risk
analysis plan. Lastly, it will also show importance of marketing strategy and roles of
management team in accomplishing their goals.
MAIN BODY
Business details
Prufrock coffee cafe is well known for its qualitative coffee as it has 13 talented coffee
professional which helps it out to accomplish its goals. This cafe serves square mile coffee along
with favourite guests’ roasters which include Koppi coffee, coffee collective, drop coffee etc.
Location
It is stated that this cafe is located spacious leather lane in Central London, UK. This
location is convenient for people as they find easier to come here. It opens for 7.30am to 6.00 pm
and on weekends it opens for 10am to 5pm. exact location of this cafe is 23-25 Leather Lane
London, EC1N 7TE (PRUFROCK COFFE, 2019).
Industry analysis
Industry analysis is one of the main part of business plan which needs to be followed and
analysis by company in order to know all business environmental factors. One of the main
reasons of industry analysis and identifying all factors of internal and external environmental
factors is to know current trends and effects of all these factors which it can have on performance
of the company (Silva, Hassani and Heravi, 2018). With the help of SWOT analysis, this cafe
can identify all its internal factors which include:
Strengths
 One of the main strengths of Prufrock coffee cafe is it has skilled workforce which helps
it out in accomplishing its goals and increasing customers’ satisfaction.
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 Other strength of this cafe is it offers qualitative coffee which are available in varieties.
 Features of new product like puffed roll has all nutritional values which any age group of
people can have and improve their health.
 Good packaging of products is other main strength.
Weaknesses:
 It is stated that this cafe is mainly affected by storage problem as it becomes difficult
sometimes for this cafe to store raw materials and ingredients.
 Lack of financial resource is other main weaknesses.
Opportunities:
 It can take opportunity to attract wider range of customers because of its pricing strategy
and qualitative products.
 Corporation tie up can also be one of the opportunities for this cafe (Gürel and Tat,
2017).
Threats:
 High intensity of competition in existing players is the main threats.
 Barraging power of customers can decrease its profit margin.
So, from the above discussed all internal environmental factors it can be said that Prufrock cafe
can take competitive advantages if it focuses on eliminating its all weaknesses and focuses on
pricing and marketing strategy.
Rather, internal factors, it is important to identify or analyse external factors and their effects.
For this company needs to make an effective use of PESTLE analysis model. With this model it
can analyse all factors which include:
Political: In this context, it is analysed that there are high standards are being set for this industry
and it is putting pressure on cafe and companies to trade their business in an ethical manner. All
stores and cafe needs to be certified if they want to operate their business and it is also important
to use a fair pricing strategy. Prufrock can make an effective use of fair trade in which they can
differentiate their products and can gain a socially responsible reputation (Perera, 2017).
Economic: Coffee is the foundation of the economy as it is stated that 63% export of coffee in
others countries happen in the UK. Economic condition in this industry is in favour of all
restaurants and cafe. So, it can be said that Prufrock can take advantages of it.
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Social: Customers needs kept changing in this industry and it is analysed that people of the UK
are fond of coffee so they prefer high quality of coffee. It is important for coffee cafe to adapt to
change in customers attitudes in order to being in the competition. People are becoming more
health conscious but now company wants to offer puffed snack or roll which is enriched in
nutrition and healthy for people. So, this cafe can take advantage by providing qualitative food
products along with coffee to customers.
Technological: It is stated that due to technological advancement there are several restaurants
and coffee cafe that are providing varieties of coffee and snacks. This advanced technology is
helping out to all cafe and restaurants to attract customers. So, it can be said that by providing
healthy food and coffee with the help of technology it can attract customers. But on the other
hand it is increasing competition as well.
Legal: There are several legislations related to this industry like food standard and others which
need to be followed by all restaurants and cafe in order to maintain quality of products and
services. Otherwise they have to face many problems like lawsuit and penalty as well.
Environmental: It is important for cafe and restaurants to follow all rules and policies of
environmental needs in order to make sure optimal physical sustainability. For being in the
competition and having a good image restaurants and cafe are trying to reduce waste and being
sustainable. So, it is important for this cafe to eliminate wastes and improving production process
(Rastogi and Trivedi, 2016).
So, from the above it can be said that there are several factors in which some are in the favour of
the company or Prufrock coffee cafe and some are not in its favour. By making effective use of
strategies and managing them it can eliminate all negative effects of some factors.
Description of product and service
This cafe wants to improve its services or range of products by offering snacks of puffed
roll to customers. It wants to add this product in order to attract customers. One of the main
reasons of offering puffed roll to customers is make them healthy in their busty life. Helping
them out to improve their health by having this snack anytime anywhere.
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Competitor analysis
For developing this business idea and expanding business it is important for this cafe to
identify intensity of the competition in this industry in order to identify factors and their effects
and developing strategies accordingly. With the help of Porter’s five force analysis all factors
can be identified and analysed in an effective manner such as:
Bargaining power of customers: In the context of cafe industry it can be said that bargaining
power of customers is high because there are several cafes and big brand by which customers can
switch their shop. Starbuck and others are well known coffee cafe but prices of local coffee cafe
or Prufrock is lower than others.
Bargaining power of suppliers: In this context it can be said that suppliers bargaining power is
low or medium because there are several cafes and suppliers as well. Companies can switch or
change their suppliers so, it can be said that it is beneficial for Prufrock cafe.
Threats of new entrants: This cafe wants to offer puffed roll which have all nutrition which
make this product healthy. In the context of threats of new entrants it can be said that in the UK
London there are several local small scale coffee cafe and restaurants which are offering snacks
like pizza, sandwiches, burgers and others. Investment cost is also not too much so, it can be said
that this force of new entrants is moderate (Valente, Modahl and Soldal, 2019). People can enter
in this industry but competing and making people aware and encouraging coming to their shop is
quite difficult so, it can be said that this intensity is moderate.
Threats of substitute products: It is already stated that in the UK, London there are several
restaurants and cafe which are offering same features of products. But this business idea of
Prufrock is quite different it wants to develop a product which people can have anywhere as it is
wrapped in a manner. So, it can be said that intensity of this force is medium to high.
Rivalry among existing companies: In this context, it can be said that this force is high because
in the UK, people invest their money in food and beverages due to their busy life. They want to
taste snacks and food for changing their taste. Starbucks and others cafe are increasing this force
high.
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So, from the above analysis, it can be said that PrufRock needs to focus on strategic management
and using making people aware about features of its new business idea in order to be in the
competition (Nair, 2018).
Operation plan
Operational plan is one of the important plans of business planning which describes or explain
all objectives, processes, functions and operations of the company. It is beneficial for
stakeholders in order to make best decision about investing money (Schwanke and Reimer,
2018). It is also beneficial for employees and company because it allows them to think about
tactics and deadlines as well. In an operational plan of Prufrock some objectives, tasks are being
discussed along with team who will perform them such as:
 One of the main objectives of this coffee cafe is to secure market share by providing
qualitative food and coffee to customers.
 To take competitive advantages.
 To increase sales upto 20% as compared to previous year.
This has several departments like marketing, production, HR, inventory management and sales.
These departments play different roles in order to accomplish overall goals.
Marketing manager is mainly responsible for making people aware about its new business idea
and features of new product in order to attract them and encouraging them to buy products. They
play several functions like advertising, planning, packaging, promotion of products, identifying
customers’ needs, solve their queries etc.
In addition, production department is responsible for producing or manufacturing coffee and
other food products in an ethical manner. It will help them out to satisfy customers because this
cafe will make an effective use of some tools and techniques like TQM. By implementing and
using these techniques, it can reduce errors in the production process and can also reduce waste.
It will overall help it out in improving quality of its food products and cafe (Miller and et.al.,
2018).
So, from the above discussed main functions and responsible person it can be said that PrufRock
can accomplish its all pre determined goals.
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Finance and funding plan
It is important for this company to make a financial plan as it contains an organization’s current
financial situation along with long term monetary goals and strategies by which it can achieve it.
It also helps company in making other plan by which it can perform and invest money as per the
current financial state. If there is a lack of finance and money then there is also requirement to
identify sources for performing all functions in an effective manner.
Balance sheet
Assets Liabilities
Current assets:
Cash equivalents $100,000
Accounts receivable $20,000
Inventory $15,000
Investment $10,000
Property and Equipments:
Land $24,300
Building $250,000
Equipment $50,000
Other Assets:
Intangible assets $4,000
Total Assets: $248,300
Current Liabilities:
Accounts payable $30,000
Accrued expenses $5,000
Total current liabilities $35,000
Long term debts $200,000
Total Liabilities $235,000
Other cost
Kitchen improvement $7000
Utensils and equipments $6300
Total Liabilities $248,300
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Risk and contingency plan
In starting a business there occur various types of risk which can lead to failure of it. The risk
highly impact on business success and growth. So, it is necessary to identify those risks so that it
can be mitigated. Also, measure can be taken to reduce its impact on business growth. For this
there is need to develop a risk plan where different types of risk are identified along with its
measures. The plan give insight about what measure has to be taken for what type of risk.
Similarly, for present business idea a risk and contingency plan is developed which consist of
risk and its measures. However, a contingency plan is one in which all risk are listed down and
then on basis of it their impact is identified. This allows in assigning responsibility to person in
order to manage risk (Hyatt, 2018). A business contingency plan is a course of action that your
organization would take if an unexpected event or situation occurs. Sometimes a contingency can
be positivesuch as a surprise influx of money and most often the term refers to a negative event
that affects an organization’s reputation, financial health or ability to stay in business. These
include a fire, flood, data breach, major network failure and more.They are as follows
Risks Probability Preparation Response
Lack of resources High The additional
resources are allocated
by acquiring funds
from other sources
Extra funds needs
to be acquired to
fulfill demand of
resources
Insufficient work
force
High More staff is hired on
temporary basis to
meet the demand
The staff needs to
be hired on
temporary basis.
Failure of business
idea
High In this case remaining
assets of business can
be sold or back up plan
can be implemented in
it
On immediate
basis new plan or
ideas can be
integrated into it so
that business
survive in it.
Delay in start of
business
Medium The tasks and activities
needs to be scheduled
There can be
change done in
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and performed
properly so that goals
are attained on time
schedule and
priority tasks are
completed first.
Rise competition Medium Business can change
its marketing and
promotion strategy so
that customer are
attracted
Here, new way of
metbod of
marketing can be
applied in it
Poor quality of raw
material
Low The quality of
materials can be
checked and certain
standard are set to
ensure its high quality
The new supplier
can be contacted
immediately and
raw material are
purchased from it.
Lack of funds High In budget the
additional funds can e
acquired through loan
or from friends or
relatives.
The additional
funds can be used
in order to reduce
risk
Low demand of
products
Medium In this changes will be
done in product and
new offers and
discounts will be
provided to customer
Here, sales
promotion will be
done by offering
discounts to
customer
This plan needs to be maintained properly so that in case of any risk occur proper and relevant
measure are taken. Apart from it, plan needs to be followed in effective way. The risk need to be
communicated to stakeholders so that more data and info in gathered. Thus, with help of this
plan it will be easy for prufrock coffee cafe to minimize the affect on risk on implementing of
business idea. The idea can be executed in effective way by dealing with all types of riskthe plan
helps to ensure you are prepared for what may come; a crisis management plan empowers you to
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manage the response after the incident occurs. In this way risk can be reduced. The plan give
insight about what measure has to be taken for what type of risk. Similarly, for present business
idea a risk and contingency plan is developed which consist of risk and its measures (Hall and
et.al., 2017).
Marketing strategy
Prufrock coffee cafe is basically known for their high- quality coffee products. In order to
develop a solid and effective marketing strategy, marketing mix can be applied to the coffee shop
business. 7 P’s of marketing mix will help Prufrock coffee café in developing an effective
marketing strategy.& P’s of marketing mix for Prufrock coffee café’s marketing strategy have
been explained below:
 Product:Prufrock coffee café provides various kinds of products and excellent service to
their customers. In order to attract a greater number of customers that are also offering snacks
of puffed roll so that they customers can enjoy their snacks any- time and anywhere. In order
to provide excellent products and service they will also focus upon timely delivery of ordered
products to the customers and also simultaneously maintaining overall quality of their
products. This offering of snacks of puff rolls and improvement in timely delivery by
maintaining overall quality of their products will help them to attract their targeted
customers.
 Price: while deciding prices of their products and service it is important for the coffee shop
to focus upon both pricing of their products and services as will not only help them to cover
cost of their raw materials and making cost but will also help them to generate revenue and
profit. Competitive pricing strategy is one of the best pricing strategies that can be used by
Prufrock coffee café for their newly introduced puffed snacks. This pricing strategy will help
them to attract a greater number of customers, generate revenue and increase overall
profitability.
 Place: Prufrock coffee café is located Leather Lane London and provides all kinds
of products and services to the customers at coffee shop. Other than this
they also provide home delivery to their customers as per the need and
requirement of the customers. Provision of home delivery helps them to
attract a greater number of customers.
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 Promotions: they provide various kinds of offers and discounts for promotion of their
products and services. They can offer discounts for their newly introduced puffed rolls
(Kraak and et. al., 2017). They can also use social media marketing for promotion of their
products and services and attract a greater number of customers.
 People: they have a team of 13 talented coffee professionals who helps the coffee shop to
achieve their goal of providing excellent coffee products and services to their customers. all
the team members have different kinds of skills which helps them to deliver quality products
and services required by the client. Prufrock coffee café also provide required training to
their staff members.
 Process: Prufrock coffee café have a proper service blue print in which whole service
delivery process have been explained in a proper manner. in this service delivery process
focuses upon quick service, customized products, collection of feedback and suggestions
from customers (Kingsnorth, 2019).
 Physical evidence: they provide information about their products and services upon their
website, pamphlets and menu card. Prufrock coffee café has also heavily invested upon their
interiors so that they can offer a unique experience to their customers.
Management team and their roles
It is necessary to manage the overall coffee shop so that operations are performed in better way
and business venture is successful. So, in order to manage it there will be 13 professional in
it. There will be various types of team formed in it such as HR, operations finance etc and
each one will play an effective role. Thus, they are defined as below
HR- in this there will be 2 people in it whose role will be to look after recruitment, selection,
training etc to other Staff. They will be responsible for managing people
Finance- in this 2 people will manage overall finance. Their role will be to record daily
transaction, allocate resources etc
Operational manager- there will be 1 operational manager whose role will be to manage daily
operations. He will ensure that task are performed in time and goals are attained. He will
look after 7 staff who is working under him.
Staff- there will be 7 staff who will be working in coffee shop. They will perform daily task
which is alloted to them.
At last there will be one owner who owns the coffee shop.
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CONCLUSION
From the above study, it has been summarized that a coffee shop business idea is
developed. In this cafe serves square mile coffee along with favourite guests’ roasters which
include Koppi coffee, coffee collective,etc it will be located in central London UK. There will be
various types of products offered to customer such as snack, rolls etcMoreover, it is evaluated
that the competitive rivalry is high in it as many other cafes are operating in that market.
Furthermore, the threat of new entrant is high as there is lack of entry and exit barriers in it. In
addition, marketing strategy consists of attracting customer through social media, there will be
competitive based pricing method followed. Also, promotion done will be through social media.
There will be various management team in it such as HR, finance, etc and their role will differ
from one another.
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REFERENCES
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Kingsnorth, S., 2019. Digital marketing strategy: an integrated approach to online marketing.
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Online
PRUFROCK COFFEE. 2019. [Online]. Available through <
https://www.prufrockcoffee.com/cafe-2/>
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