Business Plan for Milky Mug: A Coffee Shop with Organic Ingredients

Milky Mug is a coffee shop that offers hot and cold coffee with organic ingredients. The business plan targets health-conscious customers and aims to capture a large market share. The management structure includes a head chef, assistant chefs, receptionist, and waiters. The marketing strategy focuses on the four Ps of marketing, and the pricing strategy is price penetration. The cash flow forecast includes sales and cost projections for the next three years.

Milky Mug
Logo :

Insert ID number
Table of Contents:
Section:A Business overview
Section :B Management structure
Section : c cash flow forecast.

Section One A
Scenario: A: B:
Business Overview (approx.250 words)
1.1 Business summary: Please write business outline. (who, what, where, When and how)
A business plan is a roadmap in a written format which signifies the objectives and
procedures to conduct the activities of the business. The start up chosen is a coffee shop
named Milky mug. The business plan is to provide coffee considering factor of health and
deals in two different categories: Hot and cold coffee (Atang, 2018). The coffee shop is
proposed to be open at road side market of London street beside imperial college of London.
1.2 Describe your core product or service:
The core product of the proposed business plan is hot and cold coffee.
The coffee includes different ingredients from its other competitors. It
includes jaggery& honey and avoids the use of sugar. It consists buffalo milk
which is having low fat and easily digestible. These two types of coffee are
modified according to the distinct needs and taste of the customer.
1.3 Your immediate and future business aims:
The immediate plan for the coffee shop is targeting those customers who
are conscious about their health and believe in the idea of simple lifestyle. The
organic components included in the coffee ensures healthy well being of the
consumers. In recent times, the situation of global pandemic affects the
physical health of the whole world(Che Kamalruzaman and et.al., 2021). The revenue of
the organic coffee shop is increased because more people switch to the diet
conscious beverages.
1.4 Please state the amount of seed capital required and partner
investment : (Up to a maximum of £40,000 – see ‘Assignment
Scenarios’ doc. for clarification)
The amount of seed capital required for starting a business of coffee is
30,000. The source of raising capital for the business is government loan. The
loan is taken for 10 years at the 5% rate of interest. The start up will be
commenced by the four partners and they will invest 2500 each in such
venture. Thus, the total capital required for the business is 40,000.

Section One B
Management structure. (approx.250 words)
1.5b Professional team skills: (Outline individual team members transferrable and
professional skills as per your current CVs only).
The team required for starting a business of coffee is a chef who have
experience of at least 3 years in the beverage industry. Another two assistant
chef is required who have completed diploma in hotel management. One
receptionist is required for management of cash and placing the orders of the
customer, having experience of 2 years (Currivan and et.al., 2019). There is also need
for four waiters who serve the coffee to the customers and take orders from
them.
1.6b Each team member’s roles and responsibilities:
There must be a head chef who is responsible for the supervision of the tasks
performed in the business. It also keep check on the quality of the product
offered and specific quantity of the ingredients. It also ensures whether the
raw material required for the coffee is sufficient or not. The receptionist cross
check the bills of the cafe. The waiter appointed in the business is responsible
for cleaning the seating area with sanitiser. The waiting time should not be so
much, the service must be prompt.
1.7b. Identify your company’s skill gaps, then chose one role and create a
legal advert with the skills required and their roles and responsibilities.
The skill gap is realised when there is lack of coordination between the chef
and waiters. At the time of festive season or weekends, the rush in the cafe
also increases. At a single point of time, there are several orders which
creates ambiguity in the cafe. The billing system is outdated because it does
not consider the tax separately. There is a lack of feedback system from the
customers. Hence, the cafe update the software recently working in the
organisation.

Section Two A
The market/customer profile. (approx..250 words)
2.1a Describe your target market profile and where are your proposed
customers based:
The target audience is those persons who belong to the category of 18 to 40
years. The location of the coffee shop is beside the Imperial college. The business is
designed to attract the young generation. They consume high amount of coffee. When
they got free from the tight schedule of classes and other college activities, the coffee
refresh the mood of the young generation. At the time of lunch hours and after college,
the college students consume coffee for their refreshment. The coffee is also consumed
by the professors and teaching staff of the university.
2.2a Describe your perceived competitive advantage/USP:
The Milky mug is enjoying competitive advantage over other firm. It has
monopoly in terms of cost, quality, customer satisfaction, corporate social
responsibilities and nature friendly and so on. Milky mug is using organic
ingredient which improves the goodwill of the business. They are having
unique packaging style for take away orders. It uses aesthetic colours in its
infrastructure. The packaging material used by the organisation is not
degrading the quality of the environment and contributes in sustainable
development. The customer are choosing this brand of coffee over other
brands. Thus, large market share is captured by the firm.

Section TWO B
Marketing (approx.300 words)
2.3b Explain your market research with references,
The market research is conducted by analysing the numerous coffee shops which are
operating in London. Then, the products offered by the various firms are also evaluated
in terms of the cost and procedures adopted to produce the final product (Syed Nasir,
2020). If the firm is lacking in some area, then the plans of the firms are revised
accordingly.

2.4b Competitor analysis
(Based on your market research, analyse two key competitors and explain how
your business will compete with them) (You may consider a SWOT here)
The two competitors Dark arts coffee and Dimello.
Strength Weakness Opportunity Threats
 Deciding to
commence a
coffee shop using
organic material.
 The largest
segment of the
market prefer
coffee over other
beverages (Polite-
Powers, 2020).
 There are several
flavour in the
coffee provided.
 Legal requirement
and legislations
reduces the
flexibility of the
business.
 The partners are
responsible for the
losses of the firm.
It creates unlimited
liability.
 The competitors
dynamic pricing
strategies increases
the fluctuations of
the business.
It may identify the
updated market
requirement in relation to
the beverages because the
firm is offering organic
ingredients.
 The global
pandemic hits the
coffee business
badly and reduces
the turnover of the
business. Fear of
virus, reduces the
consumption of the
market items.
 In UK, there are
two types of
consumers : tea
and coffee
consumers which
increases the risk
of substitution of
the product offered
by the Milky mug.

2.5b Marketing strategy
(describe your marketing strategy, with reference to researched materials.
Identify the most appropriate strategies, (You may consider a 4 or 7ps etc. )
The four p's of marketing are explained as given below-
 Price – The price of the coffee is maintained at the level which is
affordable by each category of customers. The price Of MM is kept at
minimum so that the competitive edge can be established against
competitor(Toledo and et.al., 2020).
 Product – The product must satisfy the needs of the consumers by
providing healthier beverages. The services provided along the product
is also up to the mark.
 Place – The location of the business must be placed at a centralised
location, where the customers can reach easily.
 Promotion – There is a key role of promotion in selling the products and
services. MM focuses on using the promotional techniques which are cost
effective and covers the large market share.

Section Three A
Operations and logistics (approx.150 words)
3.1a Premises and location.:
This start up is proposed to be commenced beside imperial college in the
building located at ground floor which eases to reach professors and students.
3.2 Equipment & Set up Costs and suppliers:
Product Supplier Cost.
Advance rent /
deposit
Joseph Gardener £5000
Coffee making
machine
Stephen Haroon £4750
Furniture Victoria Milson £8200
Coffee mugs and
glasses
David Fredrer £3200
Raw material Anne cullen £560
Stationary Kenne kutis £750
Total £22460
3.2a Transport needs:
The transportation facility used by the MM is self truck. It will be used by one
of the partners to fulfil stock requirement.
3.2a Legal requirements:
Every business has to follow the legal structure. The milky mug has to register itself with government as
a start up business. It will include the name of the partners, their profit sharing ratio, liability and
protection provided to each partner's family in case of nay uncertainty( GRIGOLO, 2018).
3.2a Insurance requirements:
Milky mug must insure itself with an insurance company. In case, the firm faces any loss which may be
avoidable or unavoidable. It safeguards the whole business from nay type of losses.
3.2a Other required Certifications:
3.3 Fixed monthly Costs as per cash flow:
Items Costs
Payment of rent £ 3100
Salary payment to chef £ 4650
Salary payment to accountant £5000
Salary to receptionist £2800
Hire purchase instalment £2100

Intellectual property right expense £2600
Total 20250

Section Three B
Costs and pricing strategy (approx.150 words)
Product/service name ( Select a single unit) Hot Organic Coffee
Cost to your business per unit £ 20
Price you charge per unit £ 25
Profit margin (£) £ 5
Profit margin (%)
(Profit / Price x 100 = Profit margin)
( 5 / 25 * 100 ) = 20 %
Mark up (%)
(Profit / Cost x 100 = Mark Up) ( 5 / 20 * 100 ) = 25%
3.4b Your Pricing Strategy:
The pricing strategy used by the milky mug is price penetration. It is a pricing strategy in which the firm
set the prices of its product lower than the competitors. There are several brands of coffee exist in the market
but the advantage of cost effectiveness helps to gain large market share and firm can experience economies of
scale (Monterosso, 2021). The retention of the customers are important because it helps to grow the business easily.
It can also gain the trust of customers because the funding of capital is done by the government.

Section Three C
Cash Flow forecasts (approx.150 words)
3.5c Realistic cash flow Sales and costs forecast, including next 3 years’ projections, assuming you’ve received the start-up fund’s
you’ve requested. (Please edit to suit your need)
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Total Year 1 Year 2 Year 3
CASH IN: CASH IN:
Sales 3060 1359 1452 1425 1548 1562 1654 1501 1456 1526 1542 1547 1688 Sales 185717 204289 224718

0 6 6 5 5 7 2 2 8 5 8 34 .4 .1 .1
Loan 3000
0 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 3000
0 Loan 33000 36300 39930
Owner’s
money
1000
0 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 1000
0
Owner’s
money 11000 12100 13310
Other
investment Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 0 Other
investment 0 0 0
Total Cash In 4306
0
1359
0
1452
6
1425
6
1548
5
1562
5
1654
7
1501
2
1456
2
1526
8
1542
5
1547
8
2088
34 Total Cash In 229717
.4
252689
.1
277958
.1
CASH OUT: CASH OUT:
Set-up Costs
(per 3.2)
2075
0 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 2075
0
Set-up Costs
(per 3.2) 22825
25107.
5
27618.
25
Variable
Costs:
Variable
Costs:
Materials. 1204 1265 1352 1345 1256 1456 1200 1452 1236 985 745 689 1418
5 Materials. 15603.
5
17163.
85
18880.
24
Direct labour 368 369 369 369 368 412 412 413 413 412 413 413 4731 Direct labour 5204.1
5724.5
1
6296.9
61
Fixed Costs: Fixed Costs:
Salaries 4500 4500 4500 4500 4500 4500 4500 4600 4600 4600 4600 4650 5455
0 Salaries 60005
66005.
5
72606.
05
Rent. 3100 3100 3100 3100 3100 3100 3100 3100 3100 3100 3100 3100 3720
0 Rent. 40920 45012
49513.
2
Rates NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL 0 Rates 0 0 0
Staff Wages. NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL 0 Staff Wages. 0 0 0
Utilities/
Gas/Elec 245 245 245 245 245 245 245 245 260 260 260 260 3000 Utilities/
Gas/Elec 3300 3630 3993

Phones. 37 40 41 39 41 44 38 37 40 40 43 44 484 Phones. 532.4 585.64
644.20
4
Freight &
Postage 42 46 56 25 65 45 78 52 65 98 74 45 691 Freight &
Postage 760.1 836.11
919.72
1
Stationary. NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL 0 Stationary. 0 0 0
Promotion &
Ad. 452 462 462 452 462 452 462 462 451 425 425 489 5456 Promotion &
Ad. 6001.6
6601.7
6
7261.9
36
Website. 412 59 59 59 59 59 59 59 59 59 59 59 1061 Website. 1167.1
1283.8
1
1412.1
91
Accountant 150 150 150 150 150 150 156 156 156 156 156 156 1836 Accountant 2019.6
2221.5
6
2443.7
16
Legal 200 NIL NIL NIL NIL NIL 215 NIL NIL NIL NIL NIL 415 Legal 456.5 502.15
552.36
5
Transport 250 256 254 256 251 253 265 262 245 262 252 242 3048 Transport 3352.8
3688.0
8
4056.8
88
Vehicles 125 125 154 156 159 158 160 162 154 165 165 167 1850 Vehicles 2035 2238.5
2462.3
5
Insurance 365 NIL NIL NIL NIL NIL 365 NIL NIL NIL NIL NIL 730 Insurance 803 883.3 971.63
Maintenance NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL 0 Maintenance 0 0 0
Computers. 304 14 17 14 15 18 19 17 15 15 14 15 477 Computers. 524.7 577.17
634.88
7
Misc. 14 14 15 16 17 18 15 14 15 14 15 15 182 Misc. 200.2 220.22
242.24
2
Loan
repayment. NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL 0 Loan
repayment. 0 0 0
Interest on
loan. 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1800
0
Interest on
loan. 19800 21780 23958
Total Cash
Out
3401
8
1214
5
1227
4
1222
6
1218
8
1241
0
1278
9
1253
1
1230
9
1209
1
1182
1
1184
4
1686
46
Total Cash
Out
185510
.6
204061
.7
224467
.8

Net Cash
In/(Out) 9042 1445 2252 2030 3297 3215 3758 2481 2253 3177 3604 3634 4018
8
Net Cash
In/(Out) 44206.
8
48627.
48
53490.
23
Opening cash
balance
1000
0
1904
2
2048
7
2273
9
2476
9
2806
6
3128
1
3503
9
3752
0
3977
3
4295
0
4655
4
5018
8
Opening cash
balance 55206.
8
60727.
48
66800.
23
Closing cash
balance
1904
2
2048
7
2273
9
2476
9
2806
6
3128
1
3503
9
3752
0
3977
3
4295
0
4655
4
5018
8
9037
6
Closing cash
balance 99413.
6 109355
120290
.5
Conclusion:
From the above report, it can be concluded that Milky mug has a great scope to increase its profitability and revenue. In the
time of covid-19, most of the business sectors suffer losses but milk mug gain advantage of its organic material used in the
preparation of coffee. The higher profits and huge market share can be captured by the enterprise.

References
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