Business Plan for Mugs and Spoons Coffee Shop

This business plan is for Mugs and Spoons, a coffee shop located in Carnaby Street, London. It includes details on the business model, entrepreneurial competences, objectives, SMART goals, PESTEL analysis, competition, product, marketing, sales and operations, sales forecast, and financial projections.

BUSINESS PLAN

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Executive summary................................................................................................................3
Business model.......................................................................................................................3
Entrepreneurial competences of team force...........................................................................4
Objectives; Goals and expressed in SMART terms...............................................................4
Political, Economic, Social, Technological, Environmental and legal factors......................5
Competition............................................................................................................................6
The Product............................................................................................................................6
Marketing of business : Targeting, positioning and Segmentation........................................7
Sales and operations...............................................................................................................7
Sales forecast..........................................................................................................................8
Financial projections..............................................................................................................8
Strengths and risks related to business.................................................................................10
Closing summary..................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
A business plan is a penned document that elaborates what kind of start-up is, what are
the objectives of that business, and what activities it is gonna perform in order to achieve those
desired goals. Business plans are really important as they report the guidelines for the
organisation from marketing, financial and operational standpoints. A business plan is not just
important for the internal people but it is also useful to the external users as well. As, this plan
helps in attracting the investment before the establishment of a company. In the following report
the business plan selected is for the coffee shop which would be named after Mugs & Spoons.
This report will look into the complete details about the business which is going to be introduced
shortly. The report highlights the description on the selected business and its location. It also
encompasses the financial statements that are projected monthly, and these statements include
future forecast, cash flow statements and break-even analysis.
TASK
Executive summary.
The mission and vision of the Mugs and spoons is to increase 30 % of sales revenue
every year and spread awareness on the disadvantages of using plastic among the people. The
coffee shop will be operated in the Carnaby street of London. The coffee parlour will have 4-5
employees that have 2-4 years of experience in a cafe. This store deals in every variety of coffee
and it targets all the people from different age groups. The report prepared as under involves
models being prepared for better running and functioning of company.
Business model.
It is the strategy of a company to carry out its business in a profitable manner. The
business model consists the detailed information on the products and services, plans to sell the
goods, targeted audience and the forecasted expenses. Pricing and costs are the two initiatives in
this model.
 Type of business-
The business selected is a coffee parlour named as Mugs and spoons. This will be
privately owned business, where some employees will be hired with the experience of at
least 4 years. The products offered to the business will be cold coffee with chocolate ice-
cream, sugar-free coffee, black coffee, cappuccino, cafe latte, mocha, coffee with

cinnamon stick, Mugs and spoons special style roasting coffee. This parlour also deals
with the customised coffee.
 Location-
The Mugs and spoons would be situated at the Carnaby street, London. The logic behind
the selecting this location is that it is very popular shopping street. This will help the
business to attract more customers.
 Customers-
The targeted customers will be the people from every age group such as children,
youngsters, professionals and aged people. As the coffee shop is dealing with almost all
kind of coffee that might be liked by the people of different age groups.
Entrepreneurial competences of team force.
The business will face the tough competition as coffee is something which is liked by all
the people across the globe. The competitors for this business can be the coffee cafes like
Origin cafe and farmhouse.
 Knowledge: The information that is being possessed by managers present in the
organisation is rare and different. They have capability of having efficiency to solve
every problem that is of unpredictable nature and coming in between way of business for
better progress and development.
 Motivation: The entrepreneur present in the firm must have proper motivation skills
available with them. It must possess such qualities that would help them to motivate staff
people for better results and for serving the customers at right place and right time.
 Personality features: A manager/ entrepreneur must have features such as proper decision
making at right time in right manner. They must have characteristic such as good
personality, fast problem solving skills, forecasting results in advance etc.
Objectives; Goals and expressed in SMART terms.
The desired objective is to increase sales every year with the sustainable growth. The
another stated objective is to adopt eco- friendly methods for the purpose of serving
coffee.
SMART goal stands for- Specific, Measurable, Achievable, Relevant and Time - Bound.
To achieve the business goals this procedure is very effective. By application of the

SMART grid , to the goals of an organisation it can result in creating more specific and
achievable target for the coffee shop.
SMART goals for Mugs and Spoons are listed below-
 Specific- To increase the sales revenue per year and use eco- friendly methods for serving
purpose.
 Measurable- This is the goal with the measurable outcome. The quantifiable goal of this
organisation is to increase its sale at the rate of 30 % per year. The quality objective is to
serve the coffee in clay- mugs and avoid the usage of plastic straws.
 Achievable- The above mentioned goals are achievable by serving the products as per the
expectations of the audience and by providing extra services with the commodity. The
quality goal stated can be achieved by spreading awareness on the drawbacks of plastic.
 Relevant- Profit earning is the first and foremost objective of any business which can be
attained by increasing sales. Secondly, it is the prime duty of every firm to do something
for the society and environment because it uses its scarce resources ; so the coffee shop
has to avoid the unnecessary usage of plastic.
 Time bound- The objective of increment in sales revenue shall be attained after a
financial year.
Political, Economic, Social, Technological, Environmental and legal factors.
 Political Factors- The coffee beans are generally produced in Africa, South America and
Asia. The coffee industry has high reliance on the international trade. So, the political
factors that might affect the operations of Mugs and Spoons are tax rates and incentives,
interference in the processed and the packaged goods industry by the government.
 Economic factors- Mugs and spoons coffee parlour can be affected by the inflation rates,
savings rate, foreign exchange rate of the UK economy.
 Social Factors- The society's culture can have a positive impact on the profit earning
capacity of Mugs and spoons. As it is seen that there are many American style cafes and
people of London consume more coffee.
 Technological factors- This coffee shop will be operating with the technological
advancements like self- service kiosks, mobile order takers. So it will be easy to survive
in a market for long run by using these methods.

 Environmental factors- The demand for the consumption of coffee can be declined
during the summer season as compared to that of winter. So, this can be one of the
challenging factor for Mugs and Spoons.
 Legal Factors- This firm shall consider the following aspects before entering into the
market. The factors are- copyright, patent; health and safety law, employment law etc.
Competition.
There are many competitors available which are serving similar type of goods and
services. It is observed that there are many competitors already present in market giving a tough
fight. As it is a known fact that coffee is accepted as a worldwide product and is in higher
demand on global grounds. The at present competition faced by the company is from dose
espresso and coffee aroma which requires innovative ideas for managing sustainability in
environment. It is observed that innovative techniques that are being used by Coffee aroma in
UK is launching new flavours such as Vanilla, hazelnut and Caramel. In case of Dose espresso it
utilizes low dose and higher beverage yield resulting in lower TDS as well. It takes in account
and focuses on producing a product that comprises of lower prices to the final users. The
innovative idea adapted by Mugs and spoon is to facilitate and develop better taste which must
be served to its related potential customers for better engagement & linkage between new users.
It also focus on giving better products and services at a comparatively lower prices and rates as
well.
The Product.
The product chosen in business plan is coffee and which offers a variety of products
under the title as well. It focuses on counting quality and quantity which is taken in account by
the Mugs and spoon company. The stock of goods also impact the inventory level of the business
and which will affect the marketing & positioning of product in environment. It is mandatory for
organisations to serve them right in relation with quality being foremost priority. Price level set
must be competitive as it serves being the right factor in developing goodwill among customers.
This can be stated as a technical approach in assessment of performance being served by the
corporates as it would provide a helping hand in utilising time and cost in more
efficient/effective manner.

Marketing of business : Targeting, positioning and Segmentation.
Marketing of business can be explained with the help of evaluation of interest of
segmented market and select the areas which would give best results. There are components that
affect the working and functioning of a product or service in environment. The business must tap
areas that went uncovered and which would serve it in a efficient, effective manner in long run.
Targeting: It can be defined as a step that focuses on evaluation of interest of related market and
choosing one or more segmented areas for entering the market and having full focus upon. The
related business counts what is being demanded in marketplace and develop products
accordingly. It concentrates on preparing products that includes less sugar intake and is
beneficial for health as well.
Positioning: It can be stated as placing product in a unique manner in market, it also overviews
different products that would be provided under the title of coffee services and goods given. It is
searching and choosing a place that would be helpful in generating demand and attract more
clients from other companies as well. It is selecting a area that would be helpful in developing a
strong brand image and improve the functioning of organisations as well.
Segmentation: It can be explained as a process that counts factors such as Geographic,
Demographic and psycho-graphic. It further can be described under the title such as focusing on
age factor ranging more in young youth that give preference to coffee related products at first
place. Geographic can be stated as a region and density such as China, Africa, Asia and psycho
graphic whereas counters social classes such as upper class, middle class and also their lifestyle
being followed. It also counts which segment consist of more loyal customers towards brand
being possessed by them over years and whether they would be switching to other related
products or not.
Sales and operations.
Sales and operations planning can be explained as a process which is based on monthly
basis and which segregates management of business empowering leadership for focusing on key
chain driver, marketing, managing demand, introducing new products or services, involving
sales etc. At the time when organisation is incorporating revenue related dealings the sales team
must focus on sales, whereas team managing revenue operations can also focus on performing
actions such as collection and handling of information collected. In the business being selected
that is Mugs and spoon dealing in coffee related products & launching innovative ideas. It

explains what would the time cycle adapted in a business , how many outlets are being planned
keeping future perspectives in mind and where they would be placed & opened. It also states
whether the business would be working and functioning over online platforms or through offline
stores. It also helps to understand whether the products offered are available on a ready basis or it
needs to be processed before being offered to customers. It explains the demand of ready-made
goods or in process goods.
 It helps to examine ways that are being used for offering goods and services in related
competitive environment.
 Sales and operations helps in finding out what has been the related ratio for calculating
scale on which business is running.
 It counts what have been the quantity of sales measured for a period of time in related
products being served and how customers can be attracted from present linked
companies.
Sales forecast.
January February March April May June July August September October November December
3000 3700 4350 4400 5678 5982 6210 6598 6425 6526 5784 6985
Sales Forecast for Year 1 ( Figures in Pound)
Financial projections.
Particulars January February March April May June July August September October November December TOTAL Year 2 Year 3
Sales \ Income 3000 3700 4350 4400 5678 5982 6210 6598 6425 6526 5784 6985 65638 60000 65000
Less Materials Cost 550 575 575 425 600 625 615 675 625 635 635 675 7210 8250 9750
Less Direct Wages 800 850 875 900 925 1125 1250 1300 1450 1770 1100 1300 13645 14000 15250
GROSS PROFIT 1650 2275 2900 3075 4153 4232 4345 4623 4350 4121 4049 5010 44783 87916 173557
Operating Expenses
Staff Salaries 500 500 500 500 500 500 500 500 500 500 500 500 6000 6250 6750
Rent & Rates 215 215 215 215 215 215 215 215 215 215 215 215 2580 2750 3150
Gas & Electricity 100 100 100 100 100 100 100 100 100 100 100 100 1200 1250 1250
Insurances 700 700 700 700 700 700 700 700 700 700 700 700 8400 8550 8800
Postage & Stationery 100 101 101 100 110 102 103 101 111 121 120 121 1291 1299 1320
Repairs & Maintenance 25 23 25 14 25 26 42 62 12 62 41 245 602 627 628
Travelling & Motor Expenses 100 100 100 100 100 100 100 100 100 100 100 100 1200 1200 1200
Loan Installment 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 14400 14400 14400
Telephone Expenses 51 52 51 52 53 52 55 50 51 52 51 52 622 636 654
Professional Fees 225 226 224 225 226 214 236 214 252 262 241 201 2746 2789 2985
Advertising & Promotions 225 225 225 225 225 225 225 225 225 225 225 225 2700 2700 2700
Miscellaneous Expenses 24 26 25 26 25 21 21 24 29 28 27 28 304 319 326
TOTAL EXPENSES £ 3465 3468 3466 3457 3479 3455 3497 3491 3495 3565 3520 3687 42045 80625 157782
Net Profit (Loss) Before Tax -1815 -1193 -566 -382 674 777 848 1132 855 556 529 1323 2738 7291 15775
PROFIT & LOSS FORECAST FOR THREE YEARS

Cash flow Statement
Particular January Feb March April May June July Augest SeptemberOctober NovemverDecemberTotal(Year 1) Year 2 Year 3
A. Cash flow from operating activities:-
Sales/Revenue 3000 3700 4350 4400 5678 5982 6210 6598 6425 6526 5784 6985 65638 60000 65000
Payment of salary -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -36000 -33000 -33000
Rent Paid -216 -216 -216 -216 -216 -216 -216 -216 -216 -216 -216 -216 -2592 -2592 -2592
Staff Wages -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -12000 -12000 -12000
Payment of Utilities -100 -100 -100 -100 -100 -100 -100 -100 -100 -100 -100 -100 -1200 -1200 -1200
Phones -3007 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -3117 -120 -120
Fright and postage -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -60 -60 -60
Stationary -2 -2 -2 -2 0 0 -2 -2 -2 -2 0 0 -16 -14 -16
Promotion and advertisement -9000 0 0 0 0 0 0 0 0 0 -9000 0 -18000 -18000 -18000
Legal Expenses -50 0 0 0 0 0 0 0 0 0 0 0 -50 -50 -50
Tranport -50 -50 -50 -50 -50 -50 -50 -50 -50 -50 -50 -50 -600 -600 -600
Vehicle running -250 -250 -250 -250 -250 -250 -250 -250 -250 -250 -250 -250 -3000 -3000 -3000
Insurance -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -240 -220 -220
Maintance -100 -100 -100 -100 -100 -100 -100 -100 -100 -100 -100 -100 -1200 -1200 -1200
Mixc Expense -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -240 -220 -220
Setup cost -14600 0 0 0 0 0 0 0 0 0 0 0 -14600 0 0
Net cash flow from operating activites:- -28420 -1073 -423 -373 907 1211 1437 1825 1652 1753 -7987 2214 -12677 -12276 -7278
B. Cash flow from financaing activities:- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Cash flow from financing activities:- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
C. Cash flow from Investing activities:-
Initial investment made 20000 0 0 0 0 0 0 0 0 0 0 0 20000 0 0
Net cash flow from investing activities:- 20000 0 0 0 0 0 0 0 0 0 0 0 20000 0 0
Tatal cash inflwo/outflows(A+B+C) -8420 -1073 -423 -373 907 1211 1437 1825 1652 1753 -7987 2214 7323 -12276 -7278
Particular Year 1 Year 2 Year 3
Shareholders Funds:-
Net Profit for the year ended 15000 25000 32000
Capital 20000 20000 20000
Non Current Liability:-
Long term liabilities - 10000 25000
Current Liability:- 15000 25000 35000
Total (A) 50000 80000 112000
Non Current Assets:-
Other Non Current Assets 25000 47000 60000
Current Assets:-
Inventory 10000 15000 32000
Cash and Cash Equivalent 15000 13000 20000
Total (B) 50000 75000 112000
Statement of financial Positon for the year ended

Strengths and risks related to business.
There are risks which would affect running and functioning of business in competitive
environment & there are strengths that would contribute in effective, efficient running of
company. There are related threats and opportunities discussed as under:
Risks associated:
 Financial: It is necessary for Mugs and spoon to count risk such as less funds available
with them for carrying out innovative ideas planned keeping future in mind. It needs
formation of proper budgets and implementing them on a timely basis.
 Strategic: It explains using strategies planned in best possible manner for carrying out
desired results and understanding reasons behind the variation and deviations observed in
between.
Strengths available:
 Qualitative products or services: There are strengths such as producing better quality of
goods and competitive as well. It also helps to assign areas that requires more attention
for better functions.
 Sales on a continuous basis: It is a better situation where business has processed sale on a
continuous grounds. It explains the sale carried in Mugs and coffee on a constant basis
which would help to increase revenue cycle and profitability scale as well.
Closing summary.
It explains what is being counted and included in the report prepared so far. IT also gives
a brief as what are the topics that are being covered and where the business is lacking and
lagging behind. It helps to find out ways that would help in better running of organisation and
whether they are competent enough in the eye of other businesses.
CONCLUSION
The report prepared above helps to conclude that business plan requires a lot of
assessment of market in related time duration when planned. IT counts strategies planned so far,
what could be the related policies adapted by a company. The report reflects the idea chosen by
the entrepreneur and the characteristic that is demanded to be acquired by managers in a business
for better working and functioning of company in competitive environment. It helps to focus on
area that need attention, executive summary and introduction of what is being served and what

has been the related forecast of production and sales scale being reached by related coffee shop.
It helps to find out what have been the ideas adopted by competitors in market and how it is
helpful for them in long run as well. It facilitates finding solutions for unpredictable situations
and processing stability and sustainability in environment that would contribute in better
outcomes and outputs. It provides a rough idea as what can be improved and how it would be
helpful for the business.

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