Prepare and Monitor Budgets: Café Paradiso Business Report

This report focuses on the preparation and monitoring of budgets for a cafe, specifically Café Paradiso, situated in a shopping center. It details the business plan, including staff reorganization, marketing initiatives, and operational strategies. The report covers budgeting benefits such as effective money management, resource allocation, and performance monitoring. It also analyzes the impact of marketing campaigns, aggressive strategies, and operational plans with two different approaches. The report includes budget information plans, highlighting both long-term and short-term costs, as well as fixed and variable costs. The goal is to increase market share and generate a pre-tax margin, emphasizing customer satisfaction through quality products and services. The report provides detailed analysis of staffing, marketing, and operational plans, including shift arrangements, cleaning protocols, and marketing strategies to attract customers. The importance of budgeting and its role in understanding potential expenses is also discussed.

Running head: PREPARE AND MONITOR BUDGET
Prepare and Monitor Budget
Name of the Student
Name of the University
Author Note

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Scope and Objective
Café Paradiso is a café, which is situated at a very convenient place, which will, is a
very good for starting a café. Brendan and Margaret Elliot want to start a new
business. This café is located at a Victoria Garden shopping centre which is has a
great number of passing shoppers. As there are very small number of café available
near this location so this is going to be a great opportunity for them to start a business.
They are well experienced with the café business, as they have successfully operated a
number of cafes before, so they are not new to the business and know the details of
the business. The start of this new café will increase their market share from 35%,
which they hold previously to 40% within a year time (Altinay, Paraskevas and Jang,
2015).
When one is running a business, it is easy to be bogged down in day-to-day problems
and forget the bigger picture. However, successful businesses invest time to create
and manage budgets, prepare and review business plans and regularly monitor finance
and performance.
Budgeting
Structured planning can make all the difference to the growth of your business. It will
enable you to concentrate resources on improving profits, reducing costs and
increasing returns on investment.
In fact, even without a formal process, many businesses carry out the majority of the
activities associated with business planning, such as thinking about growth areas,
competitors, cash flow and profit.
Converting this into a cohesive process to manage your business' development does
not have to be difficult or time-consuming. The most important thing is that plans are
made; they are dynamic and are communicated to everyone involved.

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Benefits from the Budgeting Plan
There are a number of benefits of drawing up a business budget, including being
better able to:
1. To manage your money effectively
2. To allocate appropriate resources to projects
3. To monitor performance
4. To meet the objectives
5. To improve the decision-making
6. To identify problems before they occur and such as the need
to raise finance or cash flow difficulties
7. To plan for the future
8. To increase staff motivation
Staff Re-organization
Brandon has knowledge in the past of working as a chef and well experienced in the
field. He will work actively in the café and will contribute to the fullest. Margaret
Elliot has a degree in the hospitality and has experience in that field. Both of them
will contribute in the business and apart from that, they have agreed to retain two staff
members who used to work in this café previously so that they could maintain
relationship with the old customers. Other than, this they have planned to hire four
new staff amongst them two will work on part time basis and two will work
permanently (Armstrong and Taylor, 2014).

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As the café is under a transition phase, it is very important to retain the old customers.
The old staff members will play a key role in doing the work. The members have to
understand the objective of the business and act accordingly. The objective of the
company is to provide high quality coffee and other meals. The quality of service
should be the highest priority for the café and it emphasizes on the satisfaction of the
customers (Berthelsen et al, 2014).
The staff members should be very service oriented and they should maintain the
service quality of the café. The members should provide the best service quality
possible. They should try to analyze the need and want of the customers very
accurately and render service adequately. They should be given proper training and be
explained with the objective of the company in detail so that they could align their
service accordingly (Blay-Palmer and Knezevic, 2015.). As the café is going through
a transition phase, it is a very important time for the business. During this time, the
owners and most of the staff members are changing while retaining only two of the
old staff. During this time, the café will try to retain its old customer, whereas making
new customers. The customers can only be retained through quality product and
quality services. Therefore, the staff members should act accordingly. The aim of the
business should always be kept in mind and the actions are to be conducted
accordingly (Buttigieg et al, 2016).
Every member should be equally divided with particular task and it should be made
accountable for that particular task. In addition, regular assessment should be carried
out about the performance of their work (Chia and Round, 2015).
Impact of marketing initiatives and campaign
The company wants to successful transition of the business from the previous owner
to the current owner and wants to retain their old customer base. They at increasing
their market share in the industry, which previously was 35% to 40% so that they
have a better grip in the industry. They also wants to generate a before tax margin of
20 % (Cokins, 2017).

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The company in order to achieve their objective is taking some marketing measures
such as they have retained two of the key staff members for the previously running
business of that café as they have a relation with the customers, which will help the
business to retain the old customers. Apart from that, they also plan to change or
upgrade the signage of the café, which will help to attract the customers. Signage
plays a very important role in attracting customers and they try to grab attention of the
customers thereby increase the number of visiting customers. The company has
thought not to increase the cost and to function on the previous price, which will help
to grab the customers. As the customers are price oriented so this strategy will work to
increase the base of the customers. However, there will be a up gradation will be done
regarding the café but there will be no increase in the price of the items. This can only
be done on controlling the cost. If the cost is controlled this will give them an
advantage to compete on the price (Dai et al , 2014).
Apart from these common strategies, the company is planning to take some more
aggressive strategies in order to make some marketing plans to give some advantage
to the business. The aggressive marketing strategies will help to fetch business and
will create a platform for the company, which will help to compete with its
competitors. These will strengthen its position in the market and people will be more
aware about the company. Such a marketing strategy will create a advantageous
positioning for the company. Aggressive strategy may include advertisement on
digital and print media and other initiatives such as discounts and offers (Dewe,2016).
Operational plan for a Cafe – Plan 1
The staff of the restaurant is to be divided into two shifts and the workforce should be
divided equally according to their skills.
Shift 1 - Comprising of 6 members that include 2 waiters, 1 cooks, 1 Receptionist and
1 Manager, 1 cleaning staff (Shift timing Morning 10 am – 4 pm)

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Shift 2 - Comprising of 6 members that include 3 waiters, 1 cooks, 1 Receptionist and
1 cleaning staff (4 pm – 10 pm)
The table, sheets, and the room should be cleaned every day so that they look clean
and tidy.
The cleaning staff should clean the toilet twice every day.
The receptionist should see that there is change in the billing counter.
The kitchen staff should see that the kitchen stays clean and all the materials are
available or not. If there is a shortage of a particular material then it is to be made
known to the manager (Elsawah et al, 2015).
The manager is responsible for the smooth functioning of the restaurant. It is the duty
of the manager to solve any problem that may arise and to see that each member
carries out his or her respective duties properly.
Waiter should see that the customer are provided with best service possible as they
play a great role as getting into direct contact with the customer. They need to provide
swift services in the best possible way.
All the members should come one hour early to get the briefing of the day.
The restaurant wants to increase their sale by 10% so the waiter should try to sell the
products.
Marketing
The marketing strategy should be simple and they should focus on the target
customers. To attract the customers the café should have an attractive signage and

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they should offer attractive discounts and offers so that it can pull customers (Gal,
Stewart and Hanne, 2013).
Up gradation of facilities
The facilities are to be upgraded in comparison to the modern day café so that it can
compete with its competitors. Better services are to be provided with better ambience.
The café should be well decorated with comfortable seats and good lighting which
soothing to the eyes.
Operational plan for a cafe – 2
There should be only one shift that is maintained the staff members should work from
10 am in the morning and until 10 pm in the right.
The briefings for all the members are to be done by the manager every day.
The cleaning staff will see that everything including kitchen is clean. Proper cleaning
is to be done.
It is the duty of the manager to see that all the duties are to be performed by the
members.
If any problem arises by their respective person who is responsible for that particular
situation, in that case the particular person should take care of that situation.
The kitchen staff should do the procurement for any kind of kitchen stock or raw
materials.
The waiter should see that the ambience should be maintained properly.

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Manager will not be responsible arising and any such problem is to be solved by the
respectable person in relation to that particular work (Zurich, 2017).
The restaurant wants to establish itself as the best Chinese restaurant in the town as
they have good chief for Chinese food. So more focus should be given on it
Marketing
The marketing strategy should be aggressive in nature and they should give
advertisement on local digital and print media so that more number of customers is
attracted towards the café. This will help to develop a customer base for the business
and shall also help to stabilize the business after the change that is going to take place.
Up gradation of facilities
The café should focus on the up gradation of the quality, they should try to improve
the quality of their food products and beverages, so that it helps to compete with
others café.
Changes in work practices
There should be some changes made in the work practices, the customers should be
given high priority and they should be provided with the highest quality of services
possible so that they stay satisfied. In this way, it will help the café to retain its
customers and thereby help to increase its business (Haimes, 2015).
Budget Information Plan - 1
Long-term cost

8PREPARE AND MONITOR BUDGETS
Staff Salary
Food
Drinks
Supplies
Short Term Cost
Marketing/Advertising
Communications
Professional Fees
Office Operations
Management Salaries/Wages and the Associated Benefits
Overhead Cost
Electricity Bill
Telephone Bill
Cost of equipments
Mixer Grinder
Juicer

9PREPARE AND MONITOR BUDGETS
Oven
Coffee Machine
Budget Information Plan – 2
Fixed Cost
Rent
Salary of employees
Purchase of materials
Variable Cost
Purchase of equipment
Advertisement
Renovation
Miscellaneous Cost
Loss of items
Wastages
Time cost

10PREPARE AND MONITOR BUDGETS
Waste of time
To create a budget is very important as it gives us an idea about what are the total
expenses that can be incurred. The budget may not exactly match with the reality but
they give us a fair idea what amount of expenses will be faced by us.
The budget is created by taking the previous year expenses keeping in mind. The
expense that is incurred previous financial year gives us a fair idea about how much
budget is to be calculated this year (HakemZadeh et al, 2016).
In order to modify a budget there are many factors that are needed to be considered.
We need to consult the budget of the previous year and accordingly formulate the
budget. It is hard to understand the factors that will play a role in the budget and what
changes are to be made from the budget of the previous year (Kline, 2015).
Budgeting is a very sensitive thing, it is a calculated assumption, so we cannot be one
hundred percent sure about the budget but we need to go as close as possible. Every
year the amount of expenses, changes and accordingly the changes are to be made in
the budget. What are the factors that will change is hard to understand and predict.
Through budgeting, we try to go as near as possible to the exact expenses (Norton and
Schofield, 2017).
The Funds that is being allocated for a particular set of things are to be allotted
accordingly keeping it as same as possible. If there is, an extreme need to change the
amount that is allotted in the budget is to be changed as minimal as possible. It is to
be kept in mind that budget is a whole plan or framework upon which the business
function of the financial year will be based and it is keeping many factors in mind.
Therefore, if we make massive change in the budget, in that case it may have negative
effect on the business (Scott and Davis,2015).

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The stakeholders are to be informed about the budget of the organization, so that they
have a fair idea about the company’s act and so that they can act accordingly. This
will help them aligning with the budget and they will also have an idea about how
much the company is willing to invest on what and act accordingly (Trishkina, 2014).
The resources are to be divided under some categories according to their expenses.
There are some resources upon when expenses are regular in nature and there are
some expenses, which are not frequent (Van der Wagen and Goonetilleke,
2015) .There are also some expenses that happen in an organization, which occurs at
by chance. These expenses are categorized and each category is then allotted with a
budget and then this budget is divided amongst the expenses (Vincent et al, 2014).
The budget built a frame work of how the company and its stake holders will function
and this also gives a guideline of how far the company is willing to bend in terms of
expenses and what are its limitation. Budgeting is a very important factor in terms of
functioning of the company. Without the help of the budget, it will be extremely
difficult for the company and its stakeholders to function. So the budget is to be given
outmost respect and maintained strict as much as possible and if the rules are to be
bend in that case it is to be seen whether it is good for the organization or not, so that
there is no negative effect to the organization (Ward, 2016).

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