Business Plan of Read & Drink Cafe

The purpose of the paper is to give a business plan for a newly opened cafe, Read & Drink Cafe in the Australian coffee shop industry. The report proceeds by giving a brief introduction of the venture including the description of the interior decoration of the cafe, and products and service of the cafe. The paper gives a financial analysis of the cafe focusing on the expenses and invests of the cafe. Finally the paper concludes by stating the risks and challenges that the cafe might be facing in the near feature.

Running head: Business plan of Read & Drink Cafe
Business plan of Read & Drink Cafe
Name of the student
Name of the University
Author note

1Business plan of Read & Drink Cafe
Executive summary
The purpose of the paper is to give a business plan for a newly opened cafe, Read & Drink Cafe
in the Australian coffee shop industry. Hence, the report proceeds by giving a brief introduction
of the venture including the description of the interior decoration of the cafe, and products and
service of the cafe. Hence special attention has given on the unique idea of the cafe as to how the
idea of the cafe emerged according to the market requirement. The report additionally throws
light on the management and marketing plan of the cafe which includes both the social media
marketing and traditional mode of marketing. The paper gives a financial analysis of the cafe
focusing on the expenses and invests of the cafe. Finally the paper concludes by stating the risks
and challenges that the cafe might be facing in the near feature.

2Business plan of Read & Drink Cafe
Table of Contents
1. Introduction..................................................................................................................................2
2. Venture Description.....................................................................................................................2
a. Background to the venture.......................................................................................................2
b. Description of the venture.......................................................................................................3
3. Management................................................................................................................................3
a. Clear rationale along with a particular type of legal structure.................................................3
b. Strategic planning....................................................................................................................4
4. Marketing Plan.............................................................................................................................5
a. Target audience is clearly identified........................................................................................5
b. Brief description of communication strategy..........................................................................6
5. Competitor Analysis....................................................................................................................6
a. Brief analysis of the particular market.....................................................................................6
b. Rationale clearly demonstrating how the venture concept can be distinguished from
competitors..................................................................................................................................7
6. Financial Analysis.......................................................................................................................7
a. The particular ‘type’ of funding...............................................................................................7
b) Statements are provided which help to communicate key financial data associated with the
venture.........................................................................................................................................8
7. Risks and challenges....................................................................................................................9

3Business plan of Read & Drink Cafe
Bibliography..................................................................................................................................10
1. Introduction
The purpose of the report is to give a business plan for Read and Drink Café. The
recently opened café is new in the food and beverage industry. The café has come up with a
unique idea of giving the customers opportunity to read books over a cup of coffee, which is
hardly seen in any other café in the town. Most of the cafes in the town generally serve coffees
and snacks but there is barely any café that gives the opportunity to the customer to read books
along with coffee and snacks. Thus the paper giving a business plan for Read & Drink Cafe
discusses how the café can successfully position it in the Australian coffee industry which is
already dominated by coffee houses like Starbucks.
2. Venture Description
a. Background to the venture
Since people lead a fast-paced life these days, they remain stressed either with workloads
or with the stress of personal life. Often they seek a place where they can relax and get rid of the
stress of everyday life. Most of the people prefer cafés for that, where they will be able to reduce
the stress over a cup of coffee and can spend some quality time. Thus, addressing the need
located near University of DU the Read & Drink café is a place for coffee lovers. The café’s
interior decoration has been designed keeping in mind that the visitors can get a feel of relaxation
from the hustle and bustle of the city life. As the name signifies, visitors of the café are provided
with opportunity to read books while meeting with friends. Thus in order to ensure successful
business of the cafe, the study aims to give an appropriate business plan of Read & Drink café.

4Business plan of Read & Drink Cafe
b. Description of the venture
Read & Drink café is located near the University of DU which is one of the prime
locations of the city of Melbourne. The unique feature that distinguishes the café from all other
cafes in the city is that it gives the opportunity of reading books to the visitors or customers of
the café. The visitors are given access of books of reputed authors. The most unique feature is
that the Read & Drink café does not charge extra from the customers for accessing the books. On
the other hand, the interior decoration of the café is done with low light lights which have given
a cozy atmosphere to the café. Instead of normal chair-table set, bean bags with wooden side
table are there which further enhances the atmosphere of the café. On the other hand, the wooden
heritage furniture such as armchairs made the café different from other cafes in the city. The
other feature is its greenery. The entire café is decorated with potted plants so that a green
environment can give a feeling of relaxation to the customers. However, it needs to be mentioned
that the café offers a wide range of flavours of coffee to the customers. Beside of national
flavours, international flavours of coffee are also offered by the café. Hence, Read & Drink Café
is the first café in the city in which a coffee-lover will be able to taste national and international
flavours of coffee under a single roof. The café is very new in the coffee industry which is
already predominated by large coffee houses like Starbucks, Café Coffee Day, Costa Coffee and
many others. Thus, the competition with the large coffee houses seems tough for Read & Drink
Café.

5Business plan of Read & Drink Cafe
3. Management
a. Clear rationale along with a particular type of legal structure.
In order to offer international flavours of coffee, Read & Drink Café needs to import
coffee beans from different countries. Thus, it is required the café to adhere to the trade rules and
regulations of government in order avoid any legal obligations which can adversely impact on
the business process of the company. The café mainly needs to fulfil the directives of Food and
Drug Administration (FDA) in relation of adding preservatives and other components. Hence, an
expert of legal aspects will be appointed to look after the legal procedures such as fulfilling the
terms of income tax, sales tax, trade laws and so on. Apart from that, the owner of the café must
take the follow up of the legal activities in order to assure the legal procedures are done
accurately.
b. Strategic planning
The café is required to focus on the business strategy in order to position it in the industry
and set objectives for a further success. The main purpose of the marketing objective would be
increasing the sales margin by 11% within the next two years. Meanwhile, the other objective is
the achievement of brand recognition through the process of strategic marketing. Thus,
followings are the below mentioned objectives based on which the strategic planning will be set.
 To gain brand recognition in the coming 8 months.
 To increase profit margin by 11 %.
 An effecting marketing strategy.
Segmentation and targeting:

6Business plan of Read & Drink Cafe
Demographic
The café will target the customers of all ages. Therefore, the campaigning requires needs
be age-oriented. Separate marketing strategy will be required for customers of each group of age.
For example, marketing strategy in order target the teenagers will be conducting promotional
campaigns near the university campus or the café can sponsor any program of the university.
During the program, the students of the university will be offered free sachets of coffees or
instant coffees of international flavors in order to increase the brand recognition of the café.
Similarly, campaigns will be conducted in corporate offices in order to target the professionals
and in old age homes or social programs to attract the elderly people.
Geographic
On the other hand, the people residing in the city will be the main target customer of the
café and the secondary target customer will be the people who visit the country for tourism
purpose. The domestic customers will be attracted to the café since it offers a place where
customers can relax after a hectic day of daily work life. Meanwhile, the tourist customer base
will be attracted by the wide range of coffee flavors as the café offers international flavors of
coffees.
Psychographic
The book lovers are the major customer base of the company since the café gives a
unique opportunity to the customers of accessing good writing pieces of reputed authors which
hardly any other café offers.

7Business plan of Read & Drink Cafe
4. Marketing Plan
a. Target audience is clearly identified
According to the above analysis the major target customers of the café are book lovers.
Besides, the other customer base includes customers of all ages including teenagers, corporate
officials and elderly people. On the other hand, the tourists also occupy a major customer hold.
b. Brief description of communication strategy
The entire marketing and promotional campaign will continue for a time span of 12
months. The marketing campaign will over multiple media following traditional way of
marketing and social media marketing. Hence, the main purpose of the campaign will be
inspiring the customers of all ages so that the number of customer visit can be maximized.
The promotional campaign will be done into two parts. Initially, it will be carried for 8
months. After that, the second phase of the marketing will be continued for 4 months and then it
can be extended depending on the funds and after taking several follow ups. As part of the social
media marketing plan, promotional contents including videos, photos and written contents will
be shared over the social media networking sites like Facebook, Twitter and Instagram. Under
the traditional mode of marketing advertisements will be aired over television and billboards. On
the other hand, promotional campaigns like public events will be conducted in order reach out to
maximum number of customers while increasing the brand recognition.
5. Competitor Analysis
The major competitors of the café are Starbucks, Costa Coffee and Café Coffee Day.
These giant coffee houses hold a large customer bases already in the coffee industry in Australia

8Business plan of Read & Drink Cafe
with a strong brand image. On the other hand, the small coffee houses in the city are the
secondary competitors for the café.
a. Brief analysis of the particular market
Café industry of Australia has seen a considerable growth over the last five year as the
number of outlets in Australia has been high. While there have been many new cafes over the
last five years, giant coffee houses like Costa Coffee and other coffee houses opened multiple
branches in all over the country making up the annual growth of café industry by 5.1%.
b. Rationale clearly demonstrating how the venture concept can be distinguished
from competitors
The café has come up with a unique idea of a café which is hardly seen in any other cafés
in the town. Most of the cafes in the town generally serve coffees and snacks but there is hardly
any café that gives the opportunity to the customers to read books of reputed authors without any
charge. Even coffee houses like Starbucks and Costa Coffee do not offer access of wide range of
books along with internal flavours of coffee.
6. Financial Analysis
a. The particular ‘type’ of funding
Since the cafe is in its initial stage, it has a limited budget. Hence, apart from the owners
several other individuals will be investing in business. Apart from the existing investor, Mr Jack,
one or more investors will be welcomed so that in order to avoid financial issues as obstacles in
the business process. Hence, 60% of the investment will be generated from the cafe owner and
investors. Meanwhile, the cafe will generate 30% of the total funds by taking loans from several

9Business plan of Read & Drink Cafe
banks of the country for more financial support since the marketing strategy will require a large
amount of financial involvement.
Sources of Capital
Owners' Investment (name & % ownership)
Read & Drink Café $ 50,000
Other Investor 5,000
Other Investor 5,000
Other Investor 2,500
Total Investment $ 62,500
Bank Loans
Bank 1 $ 25,000
Bank 2 15,000
Bank 3 -
Bank 4 -
Total Bank Loans $ 40,000
Other Loans
Source 1 $ 25,000
Source 2 25,000
Total Other Loans $ 50,000
Summary Statement
Sources of Capital
Owners' and Other Investments $ 62,500
Bank Loans 40,000
Other Loans 50,000
Total Source of Funds $ 152,500
Startup Expenses
Bldgs / Real Estate $ 43,320
Leasehold Improvements 48,000
Capital Equipment 120,000
Location / Admin Expenses 14,500
Opening Inventory -
Advertising / Promo Expenses 6,000
Other Expenses 50,000
Total Startup Expenses $ 586,820
b) Statements are provided which help to communicate key financial data associated
with the venture
Café Expenses

10Business plan of Read & Drink Cafe
Buildings / Real Estate
Purchase $ 25,000
Construction 15,820
Remodeling 2,500
Other -
Total Buildings and R / E $ 43,320
Leasehold Improvements
Item 1 $ 1,500
Item 2 $ 6,500
Item 3 $ 15,000
Item 4 $ 25,000
Total L / H Improvements $ 48,000
Capital Equipment List
Furniture $ 35,000
Equipment $ 40,000
Fixtures $ 15,000
Machinery $ 25,000
Other $ 5,000
Total Capital Equipment $ 120,000
Location and Admin Expenses
Rental $ -
Utility Deposits 2,500
Legal and Accounting Fees 5,000
Prepaid Insurance 5,000
Pre-opening Salaries 1,500
Other 500
Total Location and Admin Expenses $ 14,500
Opening Inventory
Category 1 $ 1,500
Category 2 $ 6,500
Category 3 $ 2,560
Category 4 $ 1,500
Category 5 $ 1,500
Total Inventory $ 13,560
Advertising and Promotional Expenses
Advertising $ 1,500
Signage $ 1,500
Printing $ 1,500
Travel & Entertainment $ 1,500
Other / Additional categories -
Total Adv and Promo expenses $ 6,000

11Business plan of Read & Drink Cafe
Payroll and payroll taxes
Expense 1 $ 25,000
Expense 2 25,000
Total Payroll and payroll taxes $ 50,000
7. Risks and challenges
It can be said that that the major issues that Read & Drink coffee shop might be suffering
from need to be addressed immediately. The coffee shop might be face short fall of funding. In
order to implement effective marketing, the café will need funds. Another major issue might be
regarding with the importation of coffee beans which can be affected in case of breach of any
legal directives. Other issues that might seek attention for the success of the café are competition
in the industry, legal matters including tax laws and other directives, and an effective market
plan.
The above mentioned plan including the marketing strategy and positioning strategy will
help the café to mitigate the challenges. In order meet the challenges of legal aspects; the legal
management team will be developed.

12Business plan of Read & Drink Cafe
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