Social Enterprise: Business Plan for a Café Shop

This business plan outlines the establishment of a café shop called Jimmy and James Café House, offering a variety of beverages and breakfast choices at affordable prices. The plan includes market research, aims and objectives, operational model, marketing strategies, and financial forecasting.

Running head: SOCIAL ENTERPRISE
Social Enterprise
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
The business plan which is being developed would be based on a café shop which would bee
providing different variety of beverages at lowest possible price. The name of the business would
be Jimmy and James Café House. In addition to providing different varieties of coffee the
business would also be offering breakfast choices and complementary snacks which goes with
coffee. The business plans would be considering all aspects such market condition, competitive
pressures, taste and preference of the consumers. The business plan would be including a
financial forecast and also incorporate a strategy which would be followed by the business for
accumulating the required funds for starting up the business.
Aims and Objectives of the Business
In recent years, café business has flourished considerably bringing about small shops and
cafeteria opening taking advantage of the market situation. The business plan for the café
business has set out its objectives which the business would be following in long run are listed
below in details:
 The café would be providing the best quality of beverages along with snacks and would
also be offering different varieties of beverages to the customers.
 The café would be offering the products at a lower price as compared to the competitors
of the business so that the customers do not feel a pocket pinch for the same.
 The café business would be focusing on customer satisfaction more than profit element of
the business. The business wants to establish a loyal customer base for itself in the
market.

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Story Behind the Business
The business which the proprietors Jimmy and James are trying to established is based on
an idea which the proprietors derived in their college days. The café business would make them
owners and both the owners have idea of a café business. In addition to this, the market is
appropriate as 2 billion coffees is sold every year as per estimates in UK which suggest that the
market is active and if proper work and luck is on the side, a café business earn significant
amount of profits. The owners of the business would be following a creative approach and make
the ambience of the business appropriate where one can enjoy his coffee with peace. The café
business is considered to be appropriate as the success of the business depends on location of the
store along with the team of employee who would be managing the operations of the business.
Introduction and Background
The business environment of café industry is expanding significantly and has grown as a
popular option for most of the startup businesses in UK. The market of UK is driven by habitual
coffee drinkers who are daily customers and it is a priority for most of the people to have a cup
of coffee of any kind at breakfast. The business is fast expanding one and is the only business
which has scope for small coffee shops as success is more seen in small businesses
(Workspace.co.uk. 2019). As per estimates which is available from London Coffee Festival,
small coffee businesses outnumber branded outlets by two is to one. This is a sign that small
businesses are successful in the marker.
The business of Jimmy and James Café house would be established in a high street
location in London so that the shop has access to customer walking on roads for work, school or
even just looking for breakfast. The business would be focusing on serving the customers more
effectively and maintaining a level of quality in the products which is offered by the business.

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The business would also be offering certain side dishes such as sandwiches, fries and breakfast
options for the customers which would also contribute to the revenue which is generated by the
business.
Market Research
As per estimates, the market in UK is quite favorable for café business and this is the
main reason that many small café businesses are coming up. The owners of the business need to
survey the market for identifying the trends which would have an impact on the business and
also identify the target customers from where the business would be generating core revenues
(Forbes.com. 2019). In order to assess the market of UK more effectively, PRESTCOM
Analytical tools are used and the same is explained below in details:
 Political Factors: The political factors refer to the impact of the governmental policies in
the country and the trade relation with the suppliers of coffee beans. In UK coffee beans are
imported from Brazil or other countries and therefore trade relations between countries is an
important determinant (Huang and Sarigöllü 2014). The business need to select a supplier
for raw materials for the business and ensure that the same is of highest quality. The
political factor with the business would be affected is getting the desired suppliers contract
for supply of materials. This would help the operation of the business significantly. The
trade relation with the supplier is an important determinant for successful operation of the
business.
 Regulatory factors: The regulatory factors which would be applicable to Jimmy and James
Café house includes the licensing and registration of the shop. In addition to this, hygiene
requirements would also be applicable on the business. A routine checks would also be
conducted to test the hygiene factor and quality of the food products.

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 Economic factors: The economic factor which influences the position of the business
spending power in the region where the business is being established. The more is the
spending power, the more will be the demand for the product which is being offered by the
business. Another major factor which can affect the business is inflationary pressure which
would increase the cost of raw materials and also thereby increases the prices of the
products which is being offered the customers. In addition to this, the operational cost of the
business is also a factor which influences the decisions which is taken by the management
of the company regarding the startup business.
 Social Factors: The social factors also play an important role in decisions which are taken
for the business. The factors include taste and preference of the customers. Some customer
like more sugar in their coffee while some like it without sugar itself. In addition to this,
there is a variety of choices which is available to the customers and each and everyone has a
different taste such as some might like expresso while some other might go for black
coffee, All these preferences affect the products of the business and also the revenue which
is generated by the business.
 Technological Factors: These factors include innovations which can be used in the
business for attracting more customers. An advanced form of coffee machine is one of the
options which is available to businesses. The owners have planned to implement the most
recent coffee machine so that good quality products can be available to the customers
(Yuan 2013). The owners of the business plans to make use of best quality of coffee beans
as well which would provide them with scope of continuing the operations of the business
by maintaining quality.

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 Competitive Factors: The level of competition in the coffee and beverage industry is
immense as a large number of businesses operate in UK which includes big brands and
small stores. In order to compete in such a market, something different needs to be done by
the new café business which the owners are planning to set up. One step which the owners
are considering for combating competition in initial stages of the business is to keep the
costs of the business as low as possible so that the prices of the products offered are not too
high.
 Organizational factors: The organizational factors are also important factors which
influences the decision-making process of the owners. Such factors include the employees
of the business and the management structure of the business. Such factors significantly
contribute to the operational process of the business. Therefore, the decision regarding the
team of employees and role of baristas are important in such a business.
 Market factors: The market factors of the business include the aspects of demand of the
products which is offered by the business. The supply of raw materials is also a factor
which needs to be considered by the owners as the same has impact on prices and total costs
of the business.
Human Resources
The new business which is being established would be requiring employee for supporting
the operations of the business. The staff members would be required for helping the customers of
the business and would also be requiring a supervisor or manager for managing the operations of
the business. The role of the supervisor would be look into the fact whether the customers are
satisfied with the services of the store and whether good quality is maintained by the store. The
staff members of the store are expected to be polite to the customers offering their suggestions

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regarding choice of coffee whenever required by the customers. The staff members of the
business would also be expected to keep the store clean and help to create an ambience which
can meet the expectations of the customers of the business.
Governance, legal aspect and Management Structure
The business would be handled by the owners of the business taking all the major
decisions regarding the operational process and different functions of the business. In order to
ensure that the business is operating effectively, the management of the company would be
appointing a supervisor for looking into the operations of the business and ensuring that a certain
level of quality is maintained by the business in the operational process of the business (Gupta
2013). The owners would be required to register the business and pay for licenses once the
business has been established and consider all the legal requirements which needs to be fulfilled
by the owners.
As for the organizational structure of the business, the owners would be comprising of
the top management who would take all the decisions regarding the business and would appoint
a store manager to look into the operational process of the business and ensure that a certain
level of quality is maintained in the organization.
Operational Model
The operational model of the business would be based on maintaining quality of the
products which is offered by the business and also following a low-cost model for managing the
operations of the business. The low-cost model would help the management of the company to
keep the prices of the commodities to a low level and thereby give a chance to the business to
enhance the sales of the business. In addition to this, café shop would also be focusing on quality

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of the products which is offered by the business. This would help the business to maintain
customers who are regular and would also ensure regular flow of cash in the business,
Marketing Strategies
The owners of the business need to expend extensively on marketing of thee business as
this will ensure that the products which is offered by the business is well known to the
customers. The owners of the business has decided to use print media and social media for
effectively promoting the new shop which is opened by the business. The business would be
following the principles of 7p’s of marketing mix for promotion of the product which is offered
by the business.
Products:
The products which would be offered at Jimmy and James Café House would be different
variety of beverages which includes cappuccino, black coffee, expresso is some of the popular
products. In addition to this, snacks like sandwiches, fries, cookies would be offered along with
coffee.
Place:
The place in which the shop is located is also an important consideration which the
management of the company needs to consider before taking any decision. The location of the
place would be in London. The owners have already selected a place for operation of the
business which would be on the high street in London so that it can attract more customers to the
business (Mintz and Currim 2013).
Prices:

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As per market survey, the prices of the products would be set at lower level but the
product would maintain quality level. As per decision of the owners, a cup of expresso would
cost £ 1.95. The prices would increase for different varieties such as café latte with different
styles and the range for the same is estimated to be £ 2.00 to £ 2.54.
Promotion:
This is another major factor as proper promotion of the product would lead to increase in
sales of the business and thereby increase the profits of the business. The products would be
promoted by spending on advertisement which includes social media, print media and television
media in order ton reach out to as many customers as possible.
People:
This factor represents the customer segment which the business would be targeting for
selling maximum products of the business. As per the plan of the business, office workers and
college students would be the target market for the business. The business would be operated by
a store manager/ supervisor for running of the business and the person would have an experience
of running a shop in his CV. The person should have problem solving ability and friendly
behavior in order to help the customers of the business.
Processes
The process of the business includes all the activities which is undertaken by the owners
of the business for maintaining the operations and sales of the business. The activities include
procurement of raw materials, marketing and promotions, customer management. The supervisor
would be taking up these roles on behalf of owners.

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Physical evidences
This refers to the physical assets which is used by the business such as furniture, coffee
machines for ensuring that the operations of the business are undertaken efficiently. The business
would be offering coffee in special made cups with company logo and name on it which can also
serve as advertisement for the business.
Financial Forecasting
The management of the company would require to appropriately forecast the expenses of
the business which would be undertaken by the management of the company for appropriate
presentation of the financial results of the business. As per the financial forecast, the
management of the company anticipates that the business would be requiring a loan of £ 20,000
for meeting the expense requirement of initial assets which is required by the business and also
initial obligations of the business (McKeever 2016). The management of the company
anticipates that the sales of the business would be £ 10,000 from the first month and after a 6
months period the management expects a hike in sales of 20% which will be due to the fact that
the products which is offered by the business would now be popular. It is anticipated that the
business would be able to create a customer base which would enhance the sales of the business.
Jimmy and James Café House
Budgeted Reveneue and Expenses for Three years
(1) SALES FORECAST
Year 0 2018 2019 2020
Projected Sales
£
180,000.00
£
216,000.00
£
270,000.00
(b) Cost of goods
£
140,000.00
£
168,000.00
£
210,000.00
(2) CASHFLOW FORECAST
Preop
Year 0 2018 2019 2020

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CASH INFLOWS
Cash from Sales
£
180,000.00
£
216,000.00
£
270,000.00
Owner's loans
£
20,000.00 £ - £ - £ -
Capital Employed
£
200,000.00 £ - £ - £ -
Other cash inflows
TOTAL CASH INFLOW
£
220,000.00
£
180,000.00
£
216,000.00
£
270,000.00
CASH OUTFLOWS
Payments for materials
£
140,000.00
£
168,000.00
£
210,000.00
operating expenses ( )
Salaries/wages
£
11,000.00
£
15,000.00
£
15,000.00
Rent
£
24,000.00
£
24,000.00
£
24,000.00
Lease payments
£
5,500.00
£
5,500.00
£
5,500.00
Commissions
£
2,200.00
£
3,600.00
£
4,800.00
Repairs and maintenance
£
5,000.00
£
5,000.00
£
5,000.00
Office supplies
£
3,000.00
£
3,000.00
£
3,000.00
Advertising & promotions
£
24,000.00
£
42,000.00
£
50,000.00
Accounting
£
18,000.00
£
18,000.00
£
18,000.00
Legal costs
£
3,000.00
£
3,000.00
£
3,000.00
£ - £ - £ -
£ - £ -
TOTAL CASH OUTFLOWS
£
235,700.00
£
287,100.00
£
338,300.00
Cash flow summary

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NET CASHFLOW FOR PERIOD
£
220,000.00
-£
55,700.00
-£
71,100.00
-£
68,300.00
OPENING CASH BALANCE
£
30,000.00
£
250,000.00
£
194,300.00
£
123,200.00
CLOSING CASH BALANCE
£
250,000.00
£
194,300.00
£
123,200.00
£
54,900.00
The budget which is shown above effectively shows the revenue which is expected by the
business. It is estimated that in 2nd and 3rd years the business would achieve a growth of 20% and
25%. In same proportion, the cost of materials which includes coffee beans mainly would also
increase. The expenses of the business which are major are considered in the budgeted shown
above.
Fund Raising Strategy
As per the strategy of Jimmy and James, the initial capital requirements for the business
would be covered with a help of medium term loan of £ 20,000. This amount would cover the
initial start-up and after which the owners would be contributing an amount of £ 100,000 each.
Monitoring and Evaluation
The business would be evaluated at the end of 1st year in order to ensure that the business
is still viable for operation or not. The owners would be monitoring the operations of the
business and would also be taking important decisions for the business.
Exit Strategy
In case the business is not working and it is not viable to continue the operations of the
business then the assets of the business would either be sold off or divided among the owners in
equal margins.

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Conclusion
The business plan is a viable one and therefore Jimmy and James should move forward
with the plan and takes steps to implement the same. The market conditions for opening a
business is appropriate and it is also shown that the owners can easily acquire the required funds
for establishing the business. The marketing mix shows that the business is all up for growth and
has the potential of earning revenues for the business. The business model which is followed by
the management of the company is also shown to be appropriate. The financial mix of the
business shows that the a portion of the funds used is from loans of medium term and the rest is
contributed by the owners of the company.

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