Asset Management and Acquisition Strategies for a Café Business

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Managing physical assets

TABLE OF CONTENTS
Assessment 1: asset acquisition and management strategy.............................................................1
Identification of assets.................................................................................................................1
Purchasing of assets.....................................................................................................................1
Authorization limits.....................................................................................................................2
Asset control................................................................................................................................2
Asset security...............................................................................................................................2
Asset maintenance.......................................................................................................................3
Financial implications..................................................................................................................3
Personnel responsibilities............................................................................................................3
Environmental management and WHS considerations...............................................................4
Template for form........................................................................................................................4
Assessment 2: Develop and update asset register and report..........................................................6
Detail all assets............................................................................................................................6
Identify assets in need of repair or replacement..........................................................................8
Assess the performance of each asset for safety, operational efficiency and service quality......8
Report on review and relevant recommendations.......................................................................9
Assessment 3: Research and propose assets and financial options...............................................10
Identify and determine the asset specification...........................................................................10
Relevant maintenance requirements..........................................................................................10
Environmental standards and requirements in relation to assets...............................................11
Quotes and estimates from potential suppliers..........................................................................11
Different financial options.........................................................................................................11
References......................................................................................................................................12

Assessment 1: asset acquisition and management strategy
Identification of assets
General assets Storage and refrigerator Consumable goods
Coffee presses
Commercial blenders
Drip coffeemakers
Industrial coffee grinders
Coffee beans
Ovens/toasters/grills
Espresso machine
Food storage bins, bottles, and
pumps
An ice maker
A water filtration system
Food preparation tables
Insulated containers for cream
and milk
Industrial refrigerators
Industrial shelving for dry
storage
A large freezer
Industrial plastic wrap
Food storage containers for
opened ingredients
Air conditioner
Wireless router
Insulated paper cups and lids
Paper towels
Napkins
Straws
Plastic cups and lids
Cardboard sleeves
Paper/cardboard plates
Dishes and flatware Cleanup and maintenance Furniture and décor
Cups and drinking glasses
Drink preparation utensils
(pitchers, barista spoons, and
other specialized utensils)
Plates
Spoons, knives, and forks
Mugs
Mop and dedicated mop
closet/sink
A 3-compartment sink for
rinsing, washing, and sanitizing
dishes
Dishwasher
Bus trays for dirty dishes
Dumpster/trash compactorRags
and industrial cleaning spray
Trash cans and bags
Outdoor furniture and umbrellas
Tables and chairs
Display/storage cases
Interior/exterior lighting
Food prep/work counters
Framed photos/posters
Overhead menus
Counters/bar seating
In-store menus and displays
Wall art
Audio systems
Purchasing of assets
The purchasing of physical assets requires a careful and cost-efficient approach to ensure their
usability for a long period of time. The identified assets are required to be purchased for the café,
to attain sustainable growth in the market, and to create an overall positive image with improved
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productivity and organizational efficiency. In the planning phase of Café, the life of all the
acquired assets begins, and it will be disposed of after their use, maintenance, and repair on a
periodical basis (Hastings, 2015). The acquisition of assets will be dependent on the potential of
assets to pay back the investments along with the desired profit margin. Therefore, the estimated
cash flow needs to be considered before any purchasing of equipment and assets. In the present
case, the payback period is considered as three years.
Authorization limits
The defined authorization limit for invoicing is $500. Any amount above the limit is required
approval from the authenticated member of the business. It helps to control the overriding of the
transactions and purchasing.
Asset control
It refers to the way in which the acquired assets will be looked after in Café along with the
execution of day to day operations. The ultimate goal of asset control is to utilize the high
potential services of assets along with the consideration of relevant risks, maintenance and costs.
It is essential for the Café managers to prepare a checklist on a daily basis to ensure inventory
sock is available in accordance with the customer requirements. The accounting registers need to
be prepared to determine the actual costs and the applicable depreciation on the acquired assets.
A separate amount needs to be kept for the regular maintenance of assets. Moreover, monitoring
the assets on a fixed time zone will help the Café to assess the requirements of refurbishment,
and replacement of assets. The lifecycle costs of acquired and new assets can be reduced by
regular cleaning, repair, and maintenance (Penny Burns, 2019). For example, the renewal costs
of walls can be reduced by appropriate measures like eaves, shading screen, overhangs, etc.
Asset security
It is crucial for the organisation to ensure the human interface with the equipment and other
assets in the working environment are safe in all the circumstances. The major security issues in
relation to the assets of Café may include, handling sharp tools, high storage, falling goods,
slippery floor, continuous use of broken equipment, overuse of types of machinery, poor
maintenance of plugs, etc. Thus, to secure the assets, the lock-up system will be implemented.
The internal structure of Café will be created in a modular nature so that any break-up in any part
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does not harm the operational part of other areas. Other consideration of security factors will be
CCTV, interaction with police and staff, locks, alarms, and one-way doors.
Asset maintenance
Asset maintenance needs to be assured with the regular inspection of all types of equipment,
machinery, and their structure to identify any defects (Manage physical assets and infrastructure,
2015). The appropriate instruction needs to be provided to the employees in relation to the safe
usage of different assets. Different categories of maintenance which will be focused on includes,
routine maintenance, preventive maintenance, emergency repairs, major repairs, improvements
and housekeeping. The cost of a warranty need not requires to be exceeded from the actual cost
of assets. The routine maintenance includes minor roof repairs, building and equipment repairs.
The assets of furniture and storage will be maintained on a three-month basis. The general assets,
cleanup, dishes and flatware will be monitored on a weekly basis while other consumable goods
needs require daily observation.
Financial implications
The financial implications of all the activities of Café can be understood with the effective
operations of types of equipment. Thus, specification of assets and their potential to provide
services to the ultimate customers is an integral part. Some of the factors that impact the outcome
of the financial aspect of Café include, the potential of negotiation with suppliers, identification
of early costs, costs associated with assets of Café, other maintenance and repair costs. The
funding for different types of equipment of café is intended to be obtained in the form of a blend
of loans to finance types of equipment at around $ 36000(Campbell et al., 2016). It includes
payment of a deposit at the outset for the types of equipment, and the balance of the cost of
equipment and interest will be paid in instalments. The loan will be taken based on various
evaluation techniques like payback period, discounted cash flows, internal rate of return and net
present value.
Personnel responsibilities
The café will be managed effectively with the support of the main pillars, i.e., employees. The
staff of the café will have direct interaction with the customers, and therefore, they are ultimately
responsible for customer satisfaction (Cafe Staff, 2016). Different personnel is appointed for the
Café, which includes, café food server, café attendant, café associate, Managers, Baristas,
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cashier, greeter, stock manager, dishwasher and cleaner and other Café staff. The key
responsibilities of all the personnel in Café include preparation and service of food and
beverages, taking orders from customers, cleaning the tables for use, washing dishes, cooking
utensils, and cutlery, cleaning café, assets and other equipment, inventory management on a
daily basis, and other relevant work.
Environmental management and WHS considerations
This aspect needs to be considered to ensure the business activity of Café does not degrade the
environment. Minimization of power consumption will be focused on the usage of equipment.
Appropriate storage capacity is established for the electric system of Café. The disposal of all the
garbage of Café will be bifurcated in different garbage containers (Zuashkiani et al., 2011).
Recyclable plastics will be used in packaging food products. The workplace health and safety
laws are also considered to ensure the safety of all the stakeholders from exposure to risks, and
hazards in Café. Thus, it is the responsibility of Café manager to develop an appropriate safe
policy and makes its employees aware of all its provisions and compliance requirements. The
first-aid facilities and accidental precautions are considered to ensure availability of safe
workplace to the staff at Café.
Template for form
Executive Summary The café is determined to become a dream place of
all the age group people where they can escape
from their daily stress and enjoy a delicious meal
with their friends and family. The café will be
operated on 2200 square feet area with a total
budget of $190000. It is expected that Café will
earn revenue of around $500,000 to $700,000 in
three years.
Market analysis Cafes in Australia have shown steady growth in the
market and thus intensify the competition. Thus,
the market analysis has identified that most of the
target customers will include sophisticated
customers and corporate people (SUSAN WARD,
2019). The availability of Café services and food
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needs to be customer-centric in terms of quality,
cleanliness and hygiene.
Sales and marketing plan The promotions will be done using digital media.
The website of Café will help customers to access
its location easily. Further, the availability of
discounts, coupons and offers will be the major
source of customer attraction. The online orders
and delivery system will make the Café more
recognizable in its nearby as well as far distant
areas.
Ownership and management plan The Café will be registered as a limited liability
corporation in which 51% stake will be owned by
the Café owner while other funds will be obtained
via loans.
Operating plan Café will be positioned in the market with its
enjoyable services and ambient environment
(Campbell et al., 2015). Further, comfortable
sittings arrangements, lightings, music will be used
to help customers in relaxing. Appointment of
appropriate personnel and continuous monitoring
of inventory requirement will be an important
element of operational activities.
Financial plan The owner will provide a sufficient amount for the
start-up of café while some of the funds will be
arranged through loans. Different financial options
include the term, and commercial loans are
considered for the establishment of Cafe. Further,
different financial institutions are approached to get
low-interest rate funds for the café.
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Assessment 2: Develop and update asset register and report
Detail all assets
Asset name Monitoring time
General assets
Coffee presses
Commercial blenders
Drip coffeemakers
Industrial coffee grinders
Coffee beans
Ovens/toasters/grills
Espresso machine
Food storage bins, bottles, and pumps
An ice maker
A water filtration system
Food preparation tables
Must be monitored in every one month
Every one month monitoring
Every two month monitoring required
Can be monitored in a day or two
Daily
Must be monitored in 15 days
Can be monitored in 3 months
Daily
Daily
Can be monitored
Daily
Storage and refrigerator
Insulated containers for cream and milk
Industrial refrigerators
Industrial shelving for dry storage
A large freezer
Industrial plastic wrap
Food storage containers for opened ingredients
Air conditioner
Wireless router
Must be monitored and condition can be reported
once in the year for all the storage and storage
items.
Consumable goods
Insulated paper cups and lids
Paper towels
Napkins
Straws
Plastic cups and lids
Cardboard sleeves
Paper/cardboard plates
All the consumable goods must be monitored and
reported on daily basis. This require owner of the
asset to observe such kind of goods to handle the
daily operations of the business. These goods help
to provide better impression in the front of
customers by offering them timely availability.
Dishes and flatware
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Cups and drinking glasses
Drink preparation utensils (pitchers, barista
spoons, and other specialized utensils)
Plates
Spoons, knives, and forks
Mugs
Regularly on daily basis it can be cleaned and must
be maintained in stock to handle huge number of
customers at the same time.
Cleanup and maintenance
Mop and dedicated mop closet/sink
A 3-compartment sink for rinsing, washing, and
sanitizing dishes
Dishwasher
Bus trays for dirty dishes
Dumpster/trash compactor Rags and industrial
cleaning spray
Trash cans and bags
Cleaning activities are also performed on the daily
basis that will help to attract customers towards the
café. Owner of the café must monitor such
cleanliness on daily basis to offer quality
experience to the customers.
Furniture and décor
Outdoor furniture and umbrellas
Tables and chairs
Display/storage cases
Interior/exterior lighting
Food prep/work counters
Framed photos/posters
Overhead menus
Counters/bar seating
In-store menus and displays
Wall art
Audio systems
These goods can be maintained in a year because it
covers huge investments. In order to bring some
change in the café, owner can change furniture in
one year or it might take more than a year.
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Identify assets in need of repair or replacement
Assets in need of timely repair Assets in need of timely replacements
 Coffee presses
 Commercial blenders
 Drip coffeemakers
 Industrial coffee grinders
 Espresso machine
 An ice maker
 Industrial refrigerators
 Industrial shelving for dry storage
 A large freezer
 Overhead menus
 Cups and drinking glasses
 Drink preparation utensils (pitchers,
barista spoons, and other specialized
utensils)
 Plates
 Spoons, knives, and forks
 Mugs
 Insulated paper cups and lids
 Paper towels
 Napkins
 Straws
 Plastic cups and lids
 Cardboard sleeves
 Paper/cardboard plates
There are different assets that are needed to be replaced timely to establish positive image in
front of the customers. It require owner of the cafe to change such things regularly to enhance the
customer experience (Casnocha and Hoffman, 2012). Moreover, the repair must be done as per
the monitoring time that would lead to enhance the durability of the asset and long term
consistent performance is being maintained.
Assess the performance of each asset for safety, operational efficiency and service quality
General assets The general assets would be highly in use to meet
the orders of the customers. But the operation is
safe and secure if the machines are used
appropriately. In terms of service quality it will
help café to deliver effective experience to the
customers. Moreover, it requires timely monitoring
for effective working in future (Kaganova and
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Kopanyi, 2014).
Storage and refrigerators These are high in terms of service quality and it
delivers the operations of the café. In terms of
safety, they might be risky at they run directly on
electricity. These assets also require timely
monitoring and maintenance for its long term
operations.
Consumable goods These are safest goods and deliver specific
operations that are concerned with delivering
stronger experience to the customers.
Dishes and flatware These are also tangible goods in which food or
drink would be presented to the customers. These
require timely replacement to enhance the service
quality of the way the food is presented to the
customers.
Cleanup and maintenance This requires training to the proper staff that can
get harm during slips and trips while using the
asset. Also café need to ensure that timely cleaning
of the asset is done for maintaining cleanliness in
the café (Hastings, 2015).
Furniture and decor These are also the tangible asset that requires
timely replacement. This will attract customer to
visit the café that includes attractiveness from such
assets. Repair or replacements of lightings can be
done to enhance organisational standard.
Report on review and relevant recommendations
It is necessary for owner of the café to keep in consideration the maintenance of the assets. It is
necessary to observe the working of assets. Owner need to only employ skilled workforce that
will lead to overcome the accidents that can overcome in the workplace. It can be recommended
that appropriate planning and financial budgets need to be kept in mind for setting up the café.
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Assessment 3: Research and propose assets and financial options
In the current task, generally start up assets would be focused that are generally required to start
the cafe
Identify and determine the asset specification
Requirements Cost
Coffee beans $6000
Retail supplies (napkins, coffee bags, cleaning,
etc.)
$1800
Office supplies $200
Espresso machine $6000
Coffee Grinder and maker $1000
bins, utensil rack, shelves, food case $3000
Counter area equipment (counter top, sink, ice
machine, etc.)
$8000
Serving (plates, glasses, tables chairs) $10,000
Total $36,000
These are the physical assets that would be effectively managed to start the café. Prior
investment would be made on such assets. But these exclude the other expenses of promotion,
operating capital in the form of salaries and wages that would be given to the employees working
in the organization (Arnold, 2012). Initially this basic investment would be made and financing
would be availed on such basic assets.
Relevant maintenance requirements
Regular maintenance of the café requires making an existing operation to work better.
Maintenance mainly includes managing the exhaust system and cleaning regular the electrical
appliances. Dirt, dust and grime generally build up with time and that can be exhausting for the
customers. Moreover, excellent plumbing is mainly required with having proper drainage system
(Jindrichovska, 2013). Also it requires outdoor maintenance with making an established
welcome. For this, cleanliness is required to be maintained and creative activities are to be
performed. This will benefit consumer and enhance the efficiency of the business.
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