Organizational Chart and Key Personnel for Cafe Mocha House

This section provides information about the key personnel required for Cafe Mocha House, including their skills and expected staff turnover. The organizational chart for the coffee shop is also presented here. The recruitment strategy for hiring the staff is also discussed

Running head: HOSPITALITY
Café Mocha House
Name of the Student
Name of the University
Main Business Address: 4b/Lorimer St Shop No: 10
ABN: 60004685604
ACN: 008456123

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Table of Contents
Business Plan Summary.............................................................................................................4
The Business..........................................................................................................................4
The Future..............................................................................................................................5
The Finances..........................................................................................................................6
The Business:.............................................................................................................................6
Products and Services:...........................................................................................................6
Registration Details:...............................................................................................................7
Business Premises..................................................................................................................8
Organizational Chart..............................................................................................................9
Management and Ownership..................................................................................................9
Key Personnel......................................................................................................................10
Product/ Services..................................................................................................................12
Innovation............................................................................................................................13
Insurance..............................................................................................................................13
Risk Management.................................................................................................................14
Legal Considerations............................................................................................................15
Operations............................................................................................................................15
Sustainability Plan................................................................................................................16
The Market...........................................................................................................................17
The Market...............................................................................................................................17
Market Research:.................................................................................................................17
Market Targets:....................................................................................................................18
Environmental/Industry Analysis:.......................................................................................19
Your Customers:..................................................................................................................20
S.W.O.T Analysis:...............................................................................................................23
Your Competitors:................................................................................................................25
Advertisement and Sales:.....................................................................................................28
Sales and Marketing Objectives:..........................................................................................29
The Future................................................................................................................................31
Vision statement...................................................................................................................31
Mission statement.................................................................................................................31
Goals/objectives...................................................................................................................32
Action plan...........................................................................................................................33
The Finances............................................................................................................................34
Key Objectives & Financial Review....................................................................................34
Financial Objectives:............................................................................................................34

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Finance Required:................................................................................................................35
Assumptions:........................................................................................................................35
Start Up Costs:.....................................................................................................................35
Balance Sheet Forecast:.......................................................................................................36
Profit and Loss forecast:.......................................................................................................37
Expected Cash Flow:............................................................................................................39
Break-Even Analysis:...............................................................................................................40
Project 1:..................................................................................................................................42
Answer to Question 1:..........................................................................................................42
Answer to Question 2:..........................................................................................................42
Answer to Question 3:..........................................................................................................43
Answer to Question 4:..........................................................................................................44
Answer to Question 5:..........................................................................................................45
Answer to Question 6:..........................................................................................................45
Answer to Question 7:..........................................................................................................46
Answer to Question 8:..........................................................................................................46
Answer to Question 9:..........................................................................................................47
Answer to Question 10:........................................................................................................47
References:...............................................................................................................................49

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Business Plan Summary
The Business
The business relates to the start-up of a small coffee shop named “Café Mocha
House”. The ABN and ACN of the business are 60 004 685 604 and 008 456 123
respectively. The proposed business will be situated in Melbourne near Port Phillip area. The
trading of the business will commence from FY 2019 (1st July 2019). The list of the business
owners for the coffee store is listed below as follows:
 CEO and Non-Executive Director- Noah Smith
 Regional Manager- Jack Waugh
 Financial Manager- Thomas Waugh
 Marketing and Administration Manager- Jackson Gillespie
 Quality Control Professionals Regional Head- Williams Devin
The relevant experience of the owners is stated as follows:
1. Noah Smith (BEng, FIEA, FAICD, 53)- Mr. Noah has an extensive experience of
the global strategic approach of doing business. Noah was Managing Director and
Chief Executive Officer of a Burger Chain from 2005 until 2015. During the career of
23 years Noah had gained a significant experience of the retail business segments
across all regions of Australia.
2. Jack Waugh (BSc (Geology), PhD (Chemistry), 60)- Mr. Jack is having more than
30 years of experience in a restaurant business in Australia.
3. Jackson Gillespie (MBA, BE, FAICD, 65)- Mr. Jackson has an wide-ranging
experience of creating synergies in industrial and mining companies for more than 12
years.

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4. Williams Devin (CBE, MA, 64)- Mr. Thomas is having an extensive experience in
the fields of energy, governance and sustainability. The overall experience is
considered as 34 years.
The products and services offered by “Café Mocha House” are listed as follows:
Drinks Menu
The coffee store will offer Brewed Coffees with the use of full range of selection of
Whole Beans. The espresso drinks will be considered in terms of large variety of the espresso
drinks like Standard Espresso, Macchiato, Cortado, Cappuccino, Au Lait, Latte, and Mocha
espresso. Café Mocha House will also offer variety of Cold Brewed Iced Coffee. However,
the speciality items will include one of a kind Café Mocha served with whipped cream and
hot chocolate.
Food Services
In the breakfast services some of the main products will be seen to be included as
items such as Bagels, Muffins, Croissants, Scones, Coffee Cake and Egg Sandwiches. The
lunch items of the coffee store will be further seen as Turkey Gobbler Sandwich, Chicken
Club Sandwich and Tofu Salads. Café Mocha House will also offer large range of desserts
which are depicted as Cookies, Coconut Macaroons, Gluten Free options, Brownie bars,
cakes and pies from local bakeries.
The Future
Vision Statement
Café Mocha House will provide high quality and accessible coffee and food products
with an augmented focus towards college students and working professionals. The coffee
shop establishment is also aimed at offering high quality evening experience with ample patio

5HOSPITALITY
space for the residents of Melbourne. Some of the other factors of the business is aimed at
driving development of the business as per featuring affordable and cosy ambience of coffee
which will be able to focus on long term retunes for the business.
Goals/Objective
The important objectives of the business need to be considered as per following
points:
 Increasing the sales of the of the company by more than 1.5 million during the first
FY
 Reaching the monthly sales target of more than $ 300000 by the completion of the
initial four months of the operations
 The cultivation on the target and net profit of the business needs to be seen with an
increment of 14% (Johnston 2017).
The Finances
The start-up expense will account for the various types of the finance required for the
business. These are depicted in terms of Legal, stationery, consultants, insurance, brochures
and equipment expenses. The depiction of the overall start-up funds for the business will be
seen with $ 200000. Some of the other sources of the money will be considered with the
planning of the long-term bank loan.
The Business:
Products and Services:
The products and services offered by “Café Mocha House” are listed as follows:
Drinks Menu

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The coffee store will offer Brewed Coffees with the use of full range of selection of
Whole Beans. The espresso drinks will be considered in terms of large variety of the espresso
drinks like Standard Espresso, Macchiato, Cortado, Cappuccino, Au Lait, Latte, and Mocha
espresso. Café Mocha House will also offer variety of Cold Brewed Iced Coffee. However,
the speciality items will include one of a kind Café Mocha served with whipped cream and
hot chocolate.
Food Services
In the breakfast services some of the main products will be seen to be included as
items such as Bagels, Muffins, Croissants, Scones, Coffee Cake and Egg Sandwiches. The
lunch items of the coffee store will be further seen as Turkey Gobbler Sandwich, Chicken
Club Sandwich and Tofu Salads. Café Mocha House will also offer large range of desserts
which are depicted as Cookies, Coconut Macaroons, Gluten Free options, Brownie bars,
cakes and pies from local bakeries.
Registration Details:
Business Details
Business Name: Café Mocha House
Date Registered: 1st July, 2019
Location Registered: Melbourne, Australia
Business Structure: Sole Trader
ABN: 60004685604
ACN: 008456123

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GST: Café Mocha House is registered under the Good and Services Tax and the registration
date is 1st November 2018.
Domains Name: www.cafemocha.com
Licenses and Permits: The owner of Café Mocha House needs a Food Business License from
the local council for operating in the food service industry. For serving the meet related
products to the customers, the management of Café Mocha House needs to fill in an
Application for Accreditation from Safe Food Production Queensland. In addition, the café is
needed to comply with certain legislations; they are Food Safety Act 2006, Food Production
(Safety) Act 2000, Fire and Rescue Service Act 1990, Food Act 2006, Local Government Act
2009, Retail Shop Leases Act 1994, Sale of Goods Act 1896, Vocational Education, Training
and Employment Act 2000, Water Supply (Safety And Reliability) Act 2008 and Work
Health and Safety Act 2011 (ablisfiles.business.gov.au 2018).
Business Premises
The new coffee shop will be located in the area of Port Philippe, Melbourne,
Australia. This is an excellent location for a coffee shop with an easy five minutes driving
distance. The presence of many schools, colleagues and offices can be seen in this area that
will help the café with the opportunity to attract every kind of customers. The aim of the
management of the new café will be to make the sitting arrangement for 50 people and thus,
the size of the coffee shop will be 1750 to 1800 square feet.
The owner of the new coffee shop will hire the shop in the Port Philippe area for rent
on the basis of the agreements for three years. As per the agreement, the rent will be $2500
per month.

Chief Executive Officer
(Owner)
Regional Manager Financial Manager
Marketing and
Administration
manager
Quality Control
Professional
Regional Head
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Organizational Chart
Figure 1: Organizational Chart
(Source: As Created by Author)
Management and Ownership
The names of the owners and the management members along with their experience
and qualifications are shown below:
 CEO and Non-Executive Director- Noah Smith (Owner)
 Regional Manager- Jack Waugh
 Financial Manager- Thomas Waugh
 Marketing and Administration Manager- Jackson Gillespie
 Quality Control Professionals Regional Head- Williams Devin
The relevant experience of the owners is stated as follows:
Noah Smith (BEng, FIEA, FAICD, 53): Mr. Noah has an extensive experience of the global
strategic approach of doing business. Noah was Managing Director and Chief Executive

9HOSPITALITY
Officer of a Burger Chain from 2005 until 2015. During the career of 23 years Noah had
gained a significant experience of the retail business segments across all regions of Australia.
Jack Waugh (BSc (Geology), PhD (Chemistry), 60): Mr. Jack is having more than 30 years
of experience in a restaurant business in Australia.
Jackson Gillespie (MBA, BE, FAICD, 65): Mr. Jackson has an wide-ranging experience of
creating synergies in industrial and mining companies for more than 12 years.
Williams Devin (CBE, MA, 64): Mr. Thomas is having an extensive experience in the fields
of energy, governance and sustainability. The overall experience is considered as 34 years.
It needs to be mentioned that Café Mocha House will be 100 percent owned by Noah
Smith and he is also the CEO of the new café.
Key Personnel
Job Title Quantity Expected
staff turnover
Skills necessary Date required
Store
Manager
1 2 – 3 Years the ability to work under
pressure in the peak
time, the ability to
handle critical situations,
must be able to make
required business
decisions, the ability for
understanding and
analysing the sales
figures, must have sense
of responsibility towards
the other members of the
store
5 years and above

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Job Title Quantity Expected
staff turnover
Skills necessary Date required
Baristas 2 2 – 3 Years Basic knowledge about
different types of
coffees, knowledge of
how to grind, process to
make espresso, skills for
milk steaming, pouring
and Latter Art,
knowledge about manual
and batch brewing, skills
to create recipe and skills
to maintain hygiene
5 years and above
Chef 2 2 – 3 Years The ability to make
different types of
sandwiches, skills of
creativity with the foods,
ability of multitasking,
motivational
5 years and above
Waiter 3 2 – 3 Years Must have effective
communication skill,
must be an active
listener, must be able to
multitask,
2 years and above
Cleaning
Staff
1 2 – 3 Years Must be able to work
autonomously, ability to
comply with the health
and safety criteria
2 years and above
The recruitment strategy will be provide advertisements in the local newspapers by
mentioning the required staffs for the café. In addition, there will be online advertisement for
the staffs and the recruitment will be done through employment agencies. There will not be
any specific training programs for the staffs as the requirement is to appoint the experienced
staffs. However, there will be an induction programs for all the new staffs that will involve
the explanation of the rules, regulations and policies of the company. The skill retention
strategy of the café will include the hiring of right people, implementation of effective system
for performance evaluation, effective handing of level of employee retention and turnover,

11HOSPITALITY
effective communication with the staffs for addressing their issues, implementation of
recognition programs and others (Jehanzeb and Bashir 2013).
Product/ Services
Product/Service Price
Standard Espresso $6
Macchiato $8
Cortado $9
Cappuccino $7
Au Lait $4
Latte $3
Mocha Espresso $4
Bagels $9
Muffins $12
Croissants $10
Scones $7
Coffee Cake $6
Egg Sandwich $7
Turkey Gobbler Sandwich $14
Chicken Club Sandwich $15
Tofu Salad $16
Cafe Mocha with Hot Chocolate and Whipped Cream $18
It can be seen from the above table that the new case will have products from high
end price to low end price. High-end customers can go for the specialist products of the case
like Cafe Mocha with Hot Chocolate and Whipped Cream or Tofu Salad; at the same time,
people can get the affordable foods and coffees from the café. This will provide the company
with the required competitive edge.

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The unique selling propositions of the products of Café Mocha House will be the
unique taste, freshness and affordable prices; and these propositions will help the café to
excel in the market. Due to the nature of the business and products, it can be anticipated that
the customers will buy the products of the café at least twice a week (Armstrong et al. 2014).
The café will be go for the price leadership strategy as the target is to keep the prices
of the products relatively low for gaining the market share. The customers will value the
products in between necessity and luxury products. Due to the presence of huge amount of
customers and demand of these types of products, it is anticipated that there will be 30
percent growth of the business in the future.
Innovation
Café Mocha House will adopt some Research and Development (R&D) activities for
bringing innovation in the business. Some of the R&D activities are market research as well
as detailed assessment of the needs and behaviors of the customers, R&D activities for the
introduction of innovative foods and coffees for their customers with the aim to gain market
share; and they will include innovative processing techniques, packing materials and others
(Valkokari 2015).
In order to protect the innovations for their business, Café Mocha House will adopt
the strategy of trademarks and patents for preventing others from using their innovations. As
Café Mocha House is a start-up company, they do not have any confidentiality agreement or
trade mark or patent agreement.
Insurance
In case of insurance, Café Mocha House will have workers compensation insurance
under Workers Compensation in Victoria. For this reason, the café will have to be registered

13HOSPITALITY
under Work Cover of this act. Allianz will be the insurer for the café. The premium rate will
be 2.72 percent (Munro 2017).
Apart from the worker’s compensation insurance, Café Mocha House will have
insurance for the protection of some of their business assets like; the coffee machines, kitchen
equipments and others. For this reason, it will be required for Café Mocha House to comply
with the Business Asset Insurance of Victoria. In this insurance, Allianz will be the insurer.
Risk Management
Risk Likelihood Impact Strategy
The risk of damaging the
coffee brewing machine
along with the other kitchen
equipments as a result of
bad handling or other
reasons
High The major operation
of the cafe will be
halted and it will
negatively impact the
revenue of the cafe
This risk can be
minimized by taking a
good insurance for the
major business assets
like coffee brewing
machine and kitchen
equipments
The risk is related to the
accidents of the staffs of the
coffee shop
Medium The daily operation
of the cafe will be
affected in the
absence of any staff
due to injury
The strategy will be
to take up a good
insurance for the
staffs and employees
The risk of fire in the
premise of the cafe from
electivity failure or fire
from the kitchen
Medium The daily business
operation can be
halted for longer
time that can affect
the revenue and
profitability of the
cafe
The strategy for this
risk will be to adopt a
good fire insurance
for the cafe
The risk of theft in the
coffee shop
Low The impact will be
on the cash position
and other assets of
the cafe
This risk can be
minimized with the
implementation of
effective security
system
The risk of health and safety
related issues of the staffs
Medium It can affect the
ability of the staffs of
the cafe for working
effectively
This risk can be
minimized by
complying with the
workplace health and
safety standards and
regulations

14HOSPITALITY
Legal Considerations
Under the process of legal considerations, the café will be required to comply with six
types of standards and regulations; they are Australian Business and Environment Laws,
Competition Laws, Consumer Laws, Product Liability Regulations, Environment Legislation
and Privacy Law. Other legislative acts having impact on the business are Food Safety Act
2006, Food Production (Safety) Act 2000, Fire and Rescue Service Act 1990, Food Act 2006,
Local Government Act 2009, Retail Shop Leases Act 1994, Sale of Goods Act 1896,
Vocational Education, Training and Employment Act 2000, Water Supply (Safety And
Reliability) Act 2008 and Work Health and Safety Act 2011 (austrade.gov.au 2018).
Operations
Under the operation process, it needs to be mentioned that Café Mocha House will
involve in the preparation of coffee and other foods like sandwiches. The baristas will be
involved in the coffee making process and the chefs will be involved in making the foods.
Third parties will be involved in this process in the form of suppliers who will supply
the required products like coffee beans, milk, flour, vegetables, creams, meet, breads and
others. The main strategies for maintaining a good relation with the suppliers are to have
regular contact with them, to pay their dues in timely manner, to establish good
communication with them and others.
Equipment Purchase date Purchase price Running cost
Coffee Brewing Machine 1st April, 2019 $300 $50 per month
Oven 1st April, 2019 $1000 $100 per
month
Toaster 1st April, 2019 $100 $5 per month
Security Alarm and System 1st April, 2019 $1250 $125 per
month

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Equipment Purchase date Purchase price Running cost
Burr Mill 1st April, 2019 $300 $50 per month
Inventory item Unit price Quantity in stock Total cost
Flour $1 per kg 50 kg $50
Bread $4 per piece 10 piece $40
Cream $4 per kg 10 kg $40
Coffee Beans $30 per kg 10 kg $300
It needs to be mentioned that the café will use accounting software for the purpose of
their accounting operation. In case of the communication channels, the customers can contact
the café by e-mail, phone, social media channels and post box. The café will accept payments
in cash, cards, gifts cards and paypalets. The café will not allow credit. In addition, the café
will comply with all the required standards for the purpose of quality control.
Sustainability Plan
It needs to be mentioned that business operations of the café will involve water and
thus, there is a possibility of wastage of water. After that, the sewage of the foods will have
negative impact on the environment. For this reason, it is needed for the café to consider
these environmental issues (Hahn and Kühnen 2013).
It is needed for the café to develop suitability strategies for minimizing these effects
on environment as well as community engagement; such as awareness about the wastage of
water, awareness about the negative impact of pollution and others. For this reason, the café
can involve in financial contribution for the communities.
Sustainability milestone Target Target date
Reduction in the Wastage of Water 50% reduction 2021
Reduction in the sewage from business 60% reduction 2020

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The Market
The target market for Café Mocha House will be considered with catering to those
individuals who want to get their daily cup of great-tasting coffee in a tranquil atmosphere.
Some of the customers will vary in terms of ages, however the main attraction of the shop
will be based on college students and working professionals. The marketing strategy followed
for the coffee shop will range from introducing free samples, focusing on visual appeals,
digitizing the loyalty program and establishing a strong social media presence. The Port
Phillip has large open area which will be perfect for hosting open mics and artist
performance. The hosting of such events will be identified as marketing strategy for the
business.
The Market
Market Research:
In the Melbourne city of Port Phillip which is the local area of Victoria in Australian
is a central business district that has the population of 100,863 people. National publication
along with organizations identify the Port Phillip as the place of business that has substantial
amount of leisure, entertainment and precincts. The market research comprises of sampling
from the Australia’s best places to do business, top 100 cities to live and play, top 50 public
transport network in Australia. Samples from the employment review, Top 10 suitable
locations to raise family, Southern development and business, teenager friendly area,
population connection and Business growth position were considered as the means of
conducing the market research.
Port Phillip is regarded as one of the most dynamics local markets in US. The city
provides ease in gaining access to the amenities of Melbourne City regions. Being the part of
Melbourne city metropolitan area, it is inside the centrally located major market in Australia.

17HOSPITALITY
The area has the access to most of the highways and there is no such point in the city is
greater than 3.5 miles from the freeway (Burns and Dewhurst 2016). The city maintains the
excellent network of arterial street and even has the plan of constructing more lane-miles as
and when there is a growth in the area. The Essendon airports save the regions which is
simply 25 interstate highways miles from the north of the Port Phillip. The Essendon airports
offers complete services to the private business jets and aviation facilities for general
commuters.
The market research conducted at Port Phillip provides the evidences that the area has
highly educated workers in the city with 96% of the Port Phillip adults has the degree of high
school. Based on the census of 2016 the Port Phillip has the population of 100,863 with the
median age of the population of 38.7.
Market Targets:
Café Mocha House would cater to the wants of the people so that they can have the
access to daily cup of great tasting coffee to relax in a soothing environment. Such kinds of
customers differ in age, even though the location of Café Mocha House is close to Albert
Park Secondary College, Elwood Secondary College, Mac Robertson High School, Offices,
libraries and notable institutions such as Port Phillip Town Hall.
The market research conducted represents that their sensitive consumers that drift in
the direction of better tasting coffee. Additionally, there are large number of college students
that consider coffee house as the one of the convenient method of studying or meeting with
friends. They view coffee shop where they can meet with their peers or read books without
having the necessity of paying the cover charges. For Café Mocha House, this would offer a
unique possibility of creating a loyal base of customers.

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Majority of the adult coffee consumers have stated that their lifetime habit started all
through their teen years. As a matter of fact, 53% of the consumers stated that they
commenced consuming coffee from the age of 14-19. Further 22% of the consumers reported
that their cravings for coffee commenced from the age of 20 to 24 years (Mariotti and
Glackin 2015). This implies that 76% of the coffee consumers were grownup till the time
when they were 24 years. So in spite of the large sum of advertisement and marketing
directed towards the younger age groups, the practical coffee owners would not forget to
meet their offerings to adult consumers and senior market. The Café Mocha House would
provide a soothing experience to the coffee aficionado by providing calm and soothing
nonetheless sophisticated café and provide a sense of fine-tuning in the fast paced world.
Whereas, other coffee shops cater to the meet the drive through loud music venues in late
night. The Café Mocha House would stand apart from its competitors with the soothing
ambience with a truly unique niche market.
Environmental/Industry Analysis:
The Australian coffee shop industry has more than 20,000 stores with total yearly
revenue of around $12 billion (Burns 2016). Majority of the companies comprises of Caribou
Coffee, International Coffee & Tea, Peet’s Coffee and Starbucks. Coffee shops forms that
part of special cafe industry that also includes the retail stores that specializes itself in
products namely the donuts, yogurt, frozen and ice cream. The industry analysis suggest that
top 50 companies produce greater than 70 per cent of the sales.
Inside the five miles of the subject there are 34 businesses that are involve in the
coffee industry that includes the chains of restaurants with the excess of $64 million. Out of
the 27 businesses, there 15 Starbucks coffee shops that capture the $45.7 million in terms of
revenue or 66% of the total market share (Kenny and Dyson 2016). Furthermore, there are 10
coffee shops which are franchises that captures around $10.7 million constituting 18% of the

19HOSPITALITY
market share. The comparable are closely held coffee shops or cafes that would compete for
the subject business representing $8.3 million in the yearly revenues of 15% of the total
market.
Name Count Revenue Market Share
Starbucks Coffee 15 42240000 66%
Franchise 10 11520000 18%
Tea House 1 640000 1%
Comparable 8 9600000 15%
Total 34 640,00,000 100%
Table 1: Table representing Industry Participants
Source: (Alford and Page 2015)
Starbucks Coffee Franchise Tea House Comparables
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
45000000
0%
10%
20%
30%
40%
50%
60%
70%42240000
11520000
640000
9600000
Target Market
Figure 2: Figure representing Target Market
(Source: As Created by Author)
The Café Mocha House is targeting the three primary groups that are residing in their
district market area. These individuals generally prefer unique venues and generally avoid the

20HOSPITALITY
big chains and franchises. The consumers may prefer the local neighbourhood and would
offer the local business with the support if the business warrants.
Your Customers:
Customer Demographics:
The Café Mocha House would appeal its products to the urban professionals that are
residing in the targeted town neighbourhoods. The several coffee shop visitors have their
desire of sophisticated but casual eating and entertainment experience. The business would
also target college goers, office professionals, members of notable institutions and library
visitors (Alford and Page 2015). The business would also meet the underserved need of the
pedestrian-friendly customers that are residing in that area, especially the newcomers into the
immediate area. Members under this market segment dine out on regular basis, approximately
three times or more every week. The market segments are mainly made up of single members
that ranges from the age of 25 and 40 years, married couples falling under the same bracket
with children, graduates and professional’s students that are attending the universities,
tourists and conventioneers.
Key Customers:
The needs of the customers are critical for the success of the Café Mocha House.
Being the supplier of the full dining service the key customers of the Café Mocha House
includes the college goers, Albert Park College students, working professionals, library
visitors, and visitors of the notable events hosted at St Kilda Festival visitors, tourists and
conventioneers. To target the customers, the business would market its products through
advertisements, word to mouth sales and advertisements in the radio, newspaper etc.
Customer Management:

21HOSPITALITY
The business scenario is in the regular evolution with the customers are empowered to
access the unlimited amount of information with the help of media and internet. For a
business to grow it is necessary to maintain a healthy on going customer relationship with the
customers (Malhotra and Peterson 2014). The objective of Café Mocha House is to shift
towards the development of the customer centric framework that comprises of insights to
meet the needs of the customer requirements. The customer relationship management of the
Café Mocha House includes the following;
Targeting customers through tailor made offers: Each customers has their own purchase
and patterns of consumption with the help of which Café Mocha House can extract the point
of interaction that are suitable to create loyalty. To convert the interest of the customers in
actual purchase will be the main responsibility here that can be attained by providing offers
and discounts to add value and experience to the customer’s (Chernev 2018). This would
enable Café Mocha House to create a proactive customer relationship with smart centric
offerings to improve the value.
Creation of Loyalty programs: Each brands have their share of loyal customer’s base and
their experiences would urge them to return back on regular basis. Information obtained
through the customer relationship management can bring out the wide level of customer
engagements that the accounts that are accountable for greater sales revenue (Kotabe and
Helsen 2014). This kind of information would help Café Mocha House in creating loyalty
programs for the valued customers. Such programs would make sure that the proactive
relationship with the profitable customers can create a notable experience for the customers
and referrals from the loyal customers would help in extending the targeted reach.
Personalization of Interactions: Relationship is referred as anything that is created between
two people. The customer relationship management would help Café Mocha House in seeing

22HOSPITALITY
their customer beyond the ways of revenues. The impacts of personalization would create a
great influence not only on the post-purchase relationship where it is necessary to reach the
customers on the regular basis and increase the value of Café Mocha House services.
Feedback to assess performances: Feedbacks is necessary for comprehending and
implementing the successful marketing strategy. Café Mocha House is aware of the success
rate along with the shortcomings of the strategy to proceed in creating more effective
customer relations. There is not any better place for Café Mocha House to obtain the
information from the customers. The customer relationship management strategy can be used
here to review the execution service and the pinpoint areas for development (Marshall 2014).
Additionally, the metrics would also recognize the repeated support problems to assess the
percentage of issues that are being resolved in one single call. Café Mocha House by using
this kind of insight can help in developing the incentive programs that would reward the staff
for delivering exceptional performance in the fundamental metrics.
S.W.O.T Analysis:
The Café Mocha House studies the business strengths and weaknesses that should be
addressed. Furthermore, this section would also inspect the Café Mocha House opportunities
as well as the weaknesses that is presented to the business of café.
Strength:
 On the basis of the small size of
business and with the fact that Café
Mocha House is not the franchise,
the business is the unique concept of
coffee shop that is not likely to be
present in other market.
Weaknesses
 Franchises are regarded as the easy
method and generally the safest
mode of carrying out the business.
However, for Café Mocha House it
will not be having any backing from
any of the established franchise.

23HOSPITALITY
 The coffee shop offers one of a kind
Café Mocha served with hot
chocolate and whipped cream. Many
customers will come to visit just to
savour this speciality item.
 The owner has the first-hand
experience in operating and
commencing the new restaurants.
 The strength of the business lies in
the hand-picked baristas that would
introduce professionalism as well as
enthusiasm to the shop.
 Another strength of the business is
that it has higher location of traffic
which would eventually draw large
number of patrons to the coffee
shop.
 Café Mocha House has very limited
amount of budget and the business is
competing against the larger
companies and more established
franchises of coffee shops for
gaining the market share.
Opportunities
 The Café Mocha House
demographics lend support to the
need of unique coffee shop.
 The business has the additional
opportunities of targeting the active
customers and the recently retired
customers that are above the age
Threats
 The local coffee shop that is located
in the targeted area is for sale,
should another independent
purchases the business then it would
possess a great threat in obtaining
the market share.
 Another threat to the business of

24HOSPITALITY
group of 50 years.
 For Café Mocha House a small slice
of bigger pie is the ultimate goal. As
only 40% of the population are the
coffee drinkers, the business has the
opportunity of promoting premium
ground and whole beans coffee.
Encouraging the coffee drinkers to
be the coffee enthusiasts is the only
aim of the business to attain regular
growth.
 The local coffee shop market or the
café market is around $55 million,
so there is plenty of opportunity to
make profit.
 Creation of customer loyalty
schemes can be considered as the
opportunity for Café Mocha House
to create and maintain the strong
base of customer set.
Café Mocha House is the changing
prices of the coffee beans and
fluctuations in the economy might
into the play.
 Café Mocha House also faces the
threat of cash flow problems.
Your Competitors:
As per the statistics of Food Standards Australia New Zealand (FSANZ) 66% of the
market share belongs to the Starbucks (Bresler and Lubbe 2014). The general nature of the
competition is mainly 50 to 150 seat restaurants with the facility of outdoor seating. The

25HOSPITALITY
menu price for the entrée products ranges from $7.00 to $30.00. All the surroundings and the
establishments serves the minimum beer as well. There are some of the venues that also
provide live entertainment to their offerings however majority of the coffee shops are
prevented by their facilities from expanding in this area of service. Majority of the
entertainment venues is situated in the midtown towards the north with some more café shops
located towards the west of the Port Phillip.
For Café Mocha House, the business faces direct competition from the other coffee
bars that are located close to the Albert Park Secondary College. This comprises of Loca
Luna, Yang Café, Kaya Bistro, The Somber’s Reptile and Cosmopolitan Café. The Loca
Luna has good market share with competitors are split among the other establishments. Café
Mocha House would position itself as the unique coffee bar that would not only offer its
customers with the best tasting coffees and burgers but would also provide the customers
with the cosy and comfortable environment which the current establishments operating in that
are lacks.
Competitor Details
Competitor Established
Date
Size Market
Share
Value to
Customers
Strengths
Loca Luna 2010 3300 square
feet, 11
employees
$5 million in
revenues.
10% Holds
unique value
to the
customers in
terms of
quality.
The club is
converted to
cocktail or
nightclub in
the evening
with no
parking

26HOSPITALITY
facilities.
Yang Café 2011 6300 square
feet, 23
employees
$9 million in
revenues.
23% The subject
of
environment
for the
customers is
cosier
environment.
The business
is exposed
to dispute
with the
former land
lord and
may be
required to
shift soon.
Kaya Bistro 2003 1900 square
feet, 18
employees
$7.5 million
in revenues.
17% The wide
range of
offerings of
products and
price.
Very small
venue that
would
feature the
casual
dining
menu.
The
Somber’s
Reptile
2005 2700 square
feet, 16
employees
and $10
million in
revenues.
21% The matter
of advantage
is the share
of quite
environment
and
convenience.
The coffee
shop only
has
traditional
breakfast
offerings
with only
five days of

27HOSPITALITY
business
days.
Cosmopolitan
Café
2006 3100 square
feet, 12
employees
$11 million
in revenues.
29% Unique
roasting
methods,
convenience
and price of
the products.
Limited
offerings of
foods.
Advertisement and Sales:
Planned Promotion /
advertising type
Expected business
improvement
Cost Target Date
Online Advertisement Café Mocha House
would be advertising on
regular basis on the
popular social media
sites namely Facebook.
In comparison to the
traditional print
advertisement, this
method of advertisement
would help in allowing
them to reach the
prospects in the targeted
manner such as age,
$100 1-6-2019

28HOSPITALITY
gender and geography.
Web site Café Mocha House
would develop the simple
Web Site that would
offer its customers with
the business information,
menu and links for their
existence on the social
media channels.
$150 1-6-2019
Radio Café Mocha House
during its initial six
months of operations
would advertise on the
local radio stations. This
would benefit the
business in creating the
market awareness among
its target customers.
$50 1-6-2019
Sales and Marketing Objectives:
The sales and marketing team would comprise of the two staff that would take up the
responsibility of special sales event as the sales programs.
Special Event Sales: Developing the opportunities for selling the companies to the private
parties and special events. The particular accountabilities of the marketing staff would be to

29HOSPITALITY
create the responsibility of the owner from the assistance of manager on the staff and real
world communications.
Music Related Special Events: Developing the relationships with the artists and promoters
that are present in the area to feature the artist rising in popularity, either through the CD
release or live performance.
Profitable selling products: The menu would focus on the profitable selling of products.
The café would regularly draw the attention of the customers towards most profitable sale.
Unique Selling Position:
Café Mocha House completely stands out from the crowded sea of the coffee chains
and franchises. The main thing that sets the Café Mocha House apart from the competition is
mainly the smaller and cosier environment in combination with the premium coffees at the
reasonable price served by the knowledgeable baristas would provide much of the vigour and
interest for the products they sell.
Sales & Distribution Channels:
Channel Type Product/Services Percentage of Sales
(%)
Advantages
Shopfront All range of coffee
products
60% This method is
advantageous in
creating consistent
sales with greater
emphasis on the
customer services

30HOSPITALITY
and relations.
Personal Selling Burgers and toasts 40% Repeat business and
emphasis on the
customer services
and relationships.
The Future
Vision statement
The significant highlights of the vision statement of Café Mocha House are listed as
follows:
 To establish itself as a trusted partner of the coffee shop in Melbourne which will
allow the company for receiving future contracts
 To attain leadership in wide range of areas pertaining to quality, service and
innovation
 To establish itself as one of thee respected and admired coffee store in the industry
 To establish a leading position in offering of the wide rage of coffee and food items
 The business has further aimed to focus on open minded, to listen, to care and to be
pro-active decision making
 Taking future steps considered with the various types of the values which are seen to
be based on the principles of (Honesty et al. 2017)
Mission statement
The significant highlights of the mission statement of Café Mocha House are listed as
follows:

31HOSPITALITY
 Setting and maintaining of highest standards of the products along with ensuring
quality and ethics in the operations
 Serving delicious coffee products which will be excellent and reliable services to the
customers
 To gain the trust of the customers in terms of the wide range of the products and
service offering based on gaining the trust of the customers, employees and partners
 Attaining prosperity in terms of earning the trust of the stakeholders along with
contributing to the overall development in the community of conducting the business
 Inspiring and connecting people who attending coffee shop on regular basis
(Eskandari, Clark and Hamou-Lhadj 2016)
Goals/objectives
The general objectives and goals of the coffee plan are listed as follows;
 Maintaining of highest level of standards pertaining to the various types of the
services of service and quality of food
 Providing high rated entertainment entertainment without need for cover charge
 Assuring a comfortable and friendly atmosphere
 Offering of various type of the services based on discount coupons
 Using and maintaining customer mailing list
 Distributing monthly fliers to the businesses and neighbourhood areas
 Maintaining and using of mailing list for customers (Coffee and Palia 2015)
The overall objective of the business is focused on Increasing the sales of the of the
company by more than 1.5 million during the first year of commencement of the business. In
addition to this, some of the other forms of the developmental activities of the business needs
to depicted as per reaching the monthly sales target of more than $ 300000 by the completion

32HOSPITALITY
of the initial four months of the operations. The cultivation on the target and net profit of the
business needs to be seen with an increment of 14%. Encouraging seasonal events aimed with
musical events.
Some of the various types of the other considerations will be aimed at accounting for
the various types of the finance required for the business during FY 19. These are depicted in
terms of Legal, stationery, consultants, insurance, brochures and equipment expenses. The
depiction of the overall start-up funds for the business will be seen with $ 200000. The
overall sources of the revenues for the business needs to be associated with the sales of the
products such as of large variety of the espresso drinks like Standard Espresso, Macchiato,
Cortado, Cappuccino, Au Lait, Latte, and Mocha espresso. Café Mocha House will also offer
variety of Cold Brewed Iced Coffee (Coates et al. 2017).
Action plan
The action plan along with the required time (Financial Year 2019) of the business is inferred
below as follows:
Sequential Activities/ Period Week 1 Week 2 Week 3
&4
Week 5
& 6
Creation of the of the main idea related
to the business, market, futures and
finances

Designing the framework of the
business including the completion of
Business details, Registration details,
Business premises, Organization chart,


33HOSPITALITY
Management & ownership, Key
personnel, Products/services,
Innovation, Insurance, Risk
management, Legal considerations,
Operations and Sustainability plan
Collection of the requisite data related
to market research and market targets
 
Interpretation of the data in terms of
the vision statement, mission statement,
action plan, goals and objectives

This section of the trimline aims to
cover the details of the various types of
the topics which are seen to based on
key objectives & financial review,
Assumptions, Start-up costs for 2019
Balance sheet forecast, Profit and loss
forecast, Expected cash flow and
Break-even analysis


34HOSPITALITY
The Finances
Key Objectives & Financial Review
Financial Objectives:
a. The financial objective of the business is to attain the sales revenue of $250,000 in the
first year of business.
b. Another business objective is to generate return on capital employed of at least 15%
in the first three years of business operations.
c. The objective of the business is to maintain the current ratio of greater than 1.5.
d. The key financial objective also includes reducing the expenditure by a minimum of
5% each year of its operations.
Finance Required:
Concerning the sources of fund to start up the business, the owner of Café Mocha
House would be making self-contribution of $50,000 while it would be obtaining a bank loan
of $150,000 to meet the funding requirements of business. The funds obtained by the
business would be entirely used to fund the purchase of assets and working materials.
Assumptions:
a. The sales forecast of the business is conservative and assumes that an increase of 5%
and 8% for the second and third year respectively.
b. The sales receipt is based on the cash basis
c. The business anticipates a moderate ramp up in the staff over the period of three
forecasted years.
d. The business anticipates a gross profit margin of around 40%.
e. As the general rule majority of the café shop generates around 10% of the profit
margin.

35HOSPITALITY
f. The assumptions include that the average baristas salary would rise by 5% in the
second and third year of operations.
Start Up Costs:
Start Up Expenses for 2019
Start-up Expenses
Fixed Costs Particulars Amount ($)
Website Development Cost $6,000
Leased Premises Rent $6,500
License cost $5,500
Warehouse and office rent $6,500
Utility deposit (Gas, electric and water) $2,500
Wages and salary for three month $6,250
Accountant fees $6,500
Solicitor Fees $3,500
Rental Lease Costs $8,500
Phone & Internet Connection Costs $2,750
Computer Software $8,250
Raw materials $50,000
Staff training cost $625
Marketing and sales cost $8,500
Office equipment $3,500
Transportation cost $4,000
Workers Compensation $8,250
Building & Content Insurance $8,500
Working capital $50,000
Total Fixed Costs $1,96,125
Average Monthly Costs
Rent $500
Interest on loan 8% $458
Postage & Telephone $292
Gasoline and Oil $521
Salaries / Wages $542
Total Average Monthly Costs $2,313
x Number of Months: 12
Total Monthly Costs $27,750
Total Start-up Expenses $2,23,875
Start-up Assets
Sources of funds
Owners Fund $2,00,000

36HOSPITALITY
Total Owner Funding $2,00,000
Loans
Bank Loan $1,50,000
Other
Total Loans $1,50,000
Total Start up Funds $3,50,000
Assets
Computers 3500
Furniture $12,000
Freezers & Coffee Machines $22,000
Equipment’s $22,500
Total Fixed Assets $60,000
Total Start-up Assets $4,10,000
Balance Sheet Forecast:
Balance Sheet
Assets FY-1 FY-2 FY-3
Current Assets
Cash $3,49,161 $3,75,696 $4,25,601
Accounts receivable $2,50,000 $2,87,500 $3,45,000
Total current assets $5,99,161 $6,63,196 $7,70,601
Fixed (Long-Term) Assets
Computers 3,500 3,500 3,500
Vehicles $22,000 $22,000 $22,000
Furniture $12,000 $12,000 $12,000
Equipment $22,500 $22,500 $22,500
(Less accumulated depreciation) $8,100 $7,060 $6,228
Total fixed assets $51,900 $49,440 $50,272
Total Assets $6,51,061 $7,12,636 $8,20,873
Liabilities and Owner's Equity
Current Liabilities
Accounts Payable 65,101 83,634 1,41,013
Accrued Rent $6,500 $6,500 $6,500
Bank Charges Payable $6,750 $8,100 $10,125
Income taxes payable $6,939 $11,199 $17,634
Accrued salaries and wages $25,000 $30,000 $37,500
General Expenses $1,450 $1,740 $2,175
Current portion of long-term debt $1,50,000 $1,38,000 $1,26,000
Total current liabilities $2,61,740 $2,79,173 $3,40,947
Long-Term Liabilities

37HOSPITALITY
Long-term debt $1,50,000 $1,38,000 $1,26,000
Less: Loan Repayment $12,000 $12,000
Total long-term liabilities $1,50,000 $1,50,000 $1,38,000
Owner's Equity
Owner's investment $2,00,000 $2,20,000 $2,42,000
Net Profits $16,191 $26,132 $41,146
Reserve and Surplus $23,130 $37,331 $58,780
Total owner's equity $2,39,321 $2,83,463 $3,41,926
Total Liabilities and Owner's Equity $6,51,061 $7,12,636 $8,20,873
Profit and Loss forecast:
(4) PROFIT AND LOSS FORECAST
Preop
Year Year 1 Year 2 Year 3
Revenue 0 2,50,000 2,87,500 3,45,000
Cost of sales 0 1,22,500 1,28,625 1,38,915
Gross profit 0 1,27,500 1,58,875 2,06,085
Gross Margin 2,33,809 2,61,368 3,03,854
Expenses/overheads
Leased Premises Rent 6,500 6,500 6,500
Wages 25,000 30,000 37,500
Administrative Expenses 1,450 1,740 2,175
Communication Expenses 17,500 21,000 26,250
Marketing Expenses 10,500 12,600 15,750
Rates 8,500 10,200 12,750
Insurance 4,750 5,700 7,125
Other general expenses 8,250 9,900 12,375
Interest 1,670 2,004 2,505
Market survey 12,000 12,000 12,000
Prelim expenses 8,250 9,900 12,375
Total expenses/overheads 1,04,370 1,21,544 1,47,305
Profit before tax 23,130 37,331 58,780
Tax @ 30% 6,939 11,199 17,634
Profit after tax 16,191 26,132 41,146
Transfer to reserves 23,130 37,331 58,780
ROC 16% 13% 19%

38HOSPITALITY
Expected Cash Flow:
Expected Revenue JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUS T S EPTEMBER OCTOBER NOVEMBER DECEMBER
Opening Balance
Sales $20,000.00 $22,000.00 $25,000.00 $20,000.00 $18,000.00 $21,000.00 $24,000.00 $20,000.00 $22,500.00 $22,000.00 $18,000.00 $17,500.00
Other Income
Total $20,000.00 $22,000.00 $25,000.00 $20,000.00 $18,000.00 $21,000.00 $24,000.00 $20,000.00 $22,500.00 $22,000.00 $18,000.00 $17,500.00
Expected Expenditure JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUS T S EPTEMBER OCTOBER NOVEMBER DECEMBER
Cash Outgoings
Website Development Cost $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00
Leased Premises Rent $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67
License cost $458.33 $458.33 $458.33 $458.33 $458.33 $458.33 $458.33 $458.33 $458.33 $458.33 $458.33 $458.33
Warehouse and office rent $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67
Utility deposit (Gas, electric and water) $208.33 $208.33 $208.33 $208.33 $208.33 $208.33 $208.33 $208.33 $208.33 $208.33 $208.33 $208.33
Wages and salary for three month $520.83 $520.83 $520.83 $520.83 $520.83 $520.83 $520.83 $520.83 $520.83 $520.83 $520.83 $520.83
Accountant fees $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67 $541.67
Solicitor Fees $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67
Rental Lease Costs $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33
Phone & Internet Connection Costs $229.17 $229.17 $229.17 $229.17 $229.17 $229.17 $229.17 $229.17 $229.17 $229.17 $229.17 $229.17
Computer Software $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50
Raw materials $4,166.67 $4,166.67 $4,166.67 $4,166.67 $4,166.67 $4,166.67 $4,166.67 $4,166.67 $4,166.67 $4,166.67 $4,166.67 $4,166.67
Staff training cost $52.08 $52.08 $52.08 $52.08 $52.08 $52.08 $52.08 $52.08 $52.08 $52.08 $52.08 $52.08
M arketing and sales cost $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33
Office equipment $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67 $291.67
Transportation cost $333.33 $333.33 $333.33 $333.33 $333.33 $333.33 $333.33 $333.33 $333.33 $333.33 $333.33 $333.33
Workers Compensation $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50 $687.50
Building & Content Insurance $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33 $708.33
Total $12,177.08 $12,177.08 $12,177.08 $12,177.08 $12,177.08 $12,177.08 $12,177.08 $12,177.08 $12,177.08 $12,177.08 $12,177.08 $12,177.08
Projected Balance $7,822.92 $17,645.83 $30,468.75 $38,291.67 $44,114.58 $52,937.50 $64,760.42 $72,583.33 $82,906.25 $92,729.17 $98,552.08 $1,03,875.00
Monthly Cash Flow

39HOSPITALITY
Break-Even Analysis:
Café Mocha Shop
01-07-2019
For the Period:
Number of Units (X): 18,500
Break-Even Price (P): 8.64$ per unit
Break-Even Sales (S): 1,59,891.89$
[42]
Fixed Costs
Website Development Cost 6,000.00$
Leased Premises Rent 6,500.00$
License cost 5,500.00$
Warehouse and office rent 6,500.00$
Utility deposit (Gas, electric and water) 2,500.00$
Wages and salary for three month 6,250.00$
Accountant fees 6,500.00$
Solicitor Fees 3,500.00$
Rental Lease Costs 8,500.00$
Phone & Internet Connection Costs 2,750.00$
Computer Software 8,250.00$
Raw materials 50,000.00$
Staff training cost 625.00$
Marketing and sales cost 8,500.00$
Office equipment 3,500.00$
Transportation cost 4,000.00$
Workers Compensation 8,250.00$
Building & Content Insurance 8,500.00$
Total Fixed Costs (TFC) 1,12,750.00$
Variable Costs
Variables Costs based on Dollar Amount per Unit
Cost of Goods Sold 1.15$ per unit
Direct Labor 0.50$ per unit
Overhead 0.25$ per unit
Sum (Vd): 1.90$
Variables Costs based on Percentage
Commissions 7.50% per unit
Sum (Vp): 7.50%
Total Variable Cost per Unit (V) V = Vd + (Vp*P) 2.55$
Contribution Margin per unit (CM) = P - V 6.09$
Contribution Margin Ratio (CMR) = 1 - V / P = CM / P 70.5%
Break-Even Point
Break-Even Price (P) P = (1/(1-Vp))*(Vd+(TFC/X)) 8.64$
Break-Even Sales (S) S = X * P = TFC / CMR 1,59,891.89$
July 1, 2019 - Jun 30, 2020
Break-Even Price

40HOSPITALITY
50000 100000 150000 200000 250000
-60000
-40000
-20000
0
20000
40000
60000
80000
100000
120000
140000
-37321.9
0
18660.95
37321.9
74643.8 74643.8 74643.8
74643.8
37321.9
74643.8 93304.75
111965.7
Contribution
Fixed Cost
Profit
Figure 2: Figure representing Break-even point
(Source: As Created by Author)

41HOSPITALITY
Project 1:
Answer to Question 1:
All new business organisations come up with their own strategic plans depending on
the type of business and market where they operate. In case of Café Mocha House, the
following ways could be used to match the business and strategic goals of the organisation:
Market penetration:
By using market penetration, Café Mocha House would be able to assure uplift in the
Australian market, since it intends to make Australia a model in the global market.
Market development:
In order to ensure that Café Mocha House that it enters the other parts of the nation
besides Port Phillip, it is significant that it brings the successful products to the new market
and then they need to be promoted to the target customers (Channon and Jalland 2016). After
entering the new market, it might think of introducing non-coffee items as well.
Diversification:
Diversification is deemed to be the most risky plan, as Café Mocha House wishes to
flourish, it is feasible to enter a new market with new products. The organisation intends to
perform equally well in coffee and non-coffee items for which the effective option is
diversification.
Answer to Question 2:
The following ideas and concepts have been considered before starting Café Mocha
House in Port Phillip:
Developing business plan:

42HOSPITALITY
By developing a business plan, the owner of Café Mocha House could be able to
ascertain the profitability of the business, define customer base, explore market rivals and
growth plans.
Finding the right building:
In order to ensure success, it is crucial to find the right location for the coffee shop
(Dibrell, Craig and Neubaum 2014). It is an obvious fact that the owner of Café Mocha
House would want the coffee shop to be centrally located, in which all people gather along
with a space conducive to the vision of the organisation. Port Phillip is chosen as the
destination, as it is one of the busiest ports in Australia having the most renowned
recreational destinations.
Developing a floor plan:
The customers need to be provided with a space for forming a line and the employees
need to have all the materials within reach for making coffee along with a comfortable
seating area. Therefore, the owner of Café Mocha House could consider Floorplanner
software, as it has numerous drag-and-drop furniture as well as other items for enhancing the
overall design quality (Robson 2015).
Answer to Question 3:
The major resources that will be needed to start Café Mocha House include the
following:
 Three to four automatic drip coffee makers for producing greater quantity of coffee
per day; however, excessive stretch could increase the cost burden of the organisation
 A high quality Espresso machine; however, too high quality might skyrocket the
capital of the business

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 An industrial coffee grinder for grinding coffee before making new pot; however,
improper selection of grinder could hamper the flavour profiles as well as the aroma
of coffee
 Refrigeration system for keeping dairy and fresh products in counter fridge units and
display cases behind the bar; however, it needs to be pleasing aesthetically along with
streamlining enough for the shop to make drinks for the customers quickly
The organisation will hire a full-time manager for overseeing the day-to-day operations in
Café Mocha House. The candidate will need to have three years of managerial experience in
the coffee shop industry in Australia. Moreover, five staffs, one accountant, a store-keeper
and two part-time cleaners will be hired by Café Mocha House. A profit-sharing arrangement
for the managers might be considered depending on the operating results of the first year.
Answer to Question 4:
Several aspects need to be considered before initiating a coffee shop in Australia and
they include the following by taking into account the following data/information:
Customer and product targeting strategy:
The coffee shop needs to find out the details of the ways through which its selection
of the target market would affect product choice (Ward 2016). However, adequate research
has been conducted regarding the competitors so that its products differ from them.
Store design choice:
For designing the store theme, certain designs are considered that include old-
fashioned, contemporary and Bohemian.
Proposed location and market analysis:

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In terms of location, the owner of Café Coffee Shop has researched certain places in
Australia like a significant thoroughfare, residential area, business parks, shopping centre and
others, after which Port Phillip has been shortlisted. Moreover, adequate research has been
conducted about the factors such as market size of the proposed location and project growth
of the location within 5-10 years.
Financial plan:
For conducting the financial plan, the organisation has considered various factors like
number of customers each day, amount of overhead and fixed expense and average profit
from each sale.
Answer to Question 5:
The organisation has obtained consultancy services from Australian Business
Consulting and Solutions for fulfilling its business needs, as the latter is involved in
providing business advice to support all new entrepreneurs of the nation. In addition, Café
Mocha House has appointed a special market research firm to know about the customers’
preferences and market trends for designing the pricing structure and features of the products.
Answer to Question 6:
In order to gather required data for initiating Café Mocha House, market research has
been conducted by obtaining readily available secondary data from the online sources for
knowing about the competitors and their products. In addition, the financial data are
estimated by using the per unit prices of the various coffee products inherent in the market.
The operating expenses are projected by seeking an idea from the various reliable websites
and statistical websites in Australia.

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Answer to Question 7:
Data reliability, currency and their usefulness play a crucial role before undertaking
any initiative to start a new business (Wheelen et al. 2017). Therefore, in order to ensure such
purposes, Café Mocha House has collected data from governmental websites and com.au
websites than the data found on personal websites. These websites provide authentic
information and amounts related to different revenue and expense items that ensure the
currency of all items. As a result, such authentic information proves to be useful in projecting
revenues and expenses of the organisation for the future years.
Answer to Question 8:
The business plan will be beneficial to Café Mocha House for the following reasons:
Bigger picture:
This is one of the primary benefits of any business plan. When business planning is
made appropriately, it becomes possible for Café Mocha House to obtain a clear overview of
the entire business. The owner of the shop could easily relate the dots between tactics and
strategy and hence, the organisational work could be carried out effectively.
Strategic focus:
As Café Mocha House is a start-up company, it is necessary to develop an identity
and rely on forming that identity. It is defined generally by the target market and the products
tailored to fulfil the requirements.
Setting priorities:
It is not possible to cover all the aspects once in a business. At the time of business
planning, products could be ordered in terms of their significance and accordingly, resources,
efforts and time could be allocated effectively and strategically.

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Managing change:
When business planning is carried out suitably, it would be possible for the owner of
Café Mocha House in checking assumptions, tracking progress and overseeing new
developments from the scratch enabling the owner in adjusting accordingly.
Accountability:
If Café Mocha House plans appropriately, expectations could be set and ways might
be there where it becomes possible to track the outcomes. The business plan could be
reviewed constantly in terms of the expectations and occurrence (Wolf and Floyd 2017).
Answer to Question 9:
In order to communicate the plan to the other business personnel, Café Mocha House
needs to present the strategic plan in different ways. For example, if posters are used as
communication strategy, there might be some staffs, who are not visual learners and hence,
they might not be affected. If e-mails are sent for communicating the strategy, there might be
some staffs, who tend to ignore long mails on daily basis. Therefore, Café Mocha House
needs to use audio, video, written and visual strategy communication to the staffs of the
organisation so that everyone participates in the strategic planning process.
Answer to Question 10:
As evaluated from the business plan, Café Mocha House will require those staffs
having adequate experience in the coffee shop industry of Australia. The manager to be
recruited will possess adequate experience for managing the daily operations of the shop and
the staffs to be appointed will need to have relevant experience in the field so that the
customers could be handled effectively. However, in future, there will be conduction of
relevant training programs, as the industrial change is expected to take place with changes in

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tastes and preferences of the customers. Therefore, after analysing the current situation, there
are no additional requirements required for the competencies and skills of the staffs at the
moment for carrying out the daily operations of Café Mocha House.

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