Business Plan: Starting a Cafe in the Restaurant Industry

This report presents a comprehensive business plan for a cafe startup, analyzing various aspects essential for success in the restaurant industry. It begins with a skills audit, identifying necessary competencies for running a cafe, followed by a detailed overview of products and services, including m...Read More

Starting a Business
and Fundamentals of
Marketing

Table of Contents

INTRODUCTION..........................................................................................................................1
Skills Audit...................................................................................................................................2
Products and Services.............................................................................................................2
Prices..............................................................................................................................................2
Place or Location.......................................................................................................................3
Target Market.............................................................................................................................3
Promotion.....................................................................................................................................3
Competition Analysis...............................................................................................................4
Industry Analysis.......................................................................................................................4
PESTEL Analysis.........................................................................................................................5
SWOT Analysis............................................................................................................................6
CONCLUSION...............................................................................................................................7
REFERENCES...............................................................................................................................9

INTRODUCTION
Business idea chosen here is the restaurant industry in which the type of
restaurant chosen is the Cafe. It is defined as the small restaurant selling
light meals and drinks. This is an interesting idea to start a business because
now a days Food Industry is gaining and touching Heights either with the
healthy foods or with the fast food. Therefore, restaurant industry is chosen
as the start-up business idea. It doesn't matter whether it is the online
business or it is the physical business of food but it is gaining profit in an
entire year with a good profit margin (Phan, 2019). Hence the following
discussion is based on the skills audit which includes the experience is
required to start the business of Cafe, products and services which includes
the whole portfolio that the cafe offers to their customers, prices of the
goods and services provided by the cafe to their high status customers or
even for the low status customers as well, place or location of the cafe at
which it will going to be situated, identification of the target market and how
do research customers for the maximum sale and revenue generation,
promotional methods that how to advertise the cafe so that we can reach to
the broad number of customers, competition analysis which includes the
identification of the competitors and their strengths and weaknesses and
how to fight against them, industry analysis which includes the porter's five
forces model, pestle analysis which includes all the six factors of macro
environment and SWOT analysis for better opportunities in the business
environment with proper findings and conclusion.
1

Skills Audit
Skills and experiences to start up the business in restaurant industry in
the domain of Cafe is to have an ability to find an appropriate accountant to
provide timely financial advice, capability to detect the proper utensils
crockery and packaging, capability to recognise and negotiate with the
suppliers, development and maintenance of profitable pricing strategy,
determining and employing the proper staffing mix, effective promotion of
the cafe, development and execution of the customer service strategy,
preparation and storage of food in a safe manner, maintenance of stock at
appropriate levels, implementation of secure internal controls for cash and
assets, making quality food with better operations and managing all aspects
of a small business. Such skills are needed to be brushed up by continuous
growth and development of a cafe and make it a greater brand so that
maximum experience could be gained to operate the bigger brand (Kriel,
2019).
Products and Services
Products and services offered by the cafe are mainly in the category of
fast food which includes the starters, beverages and desserts. Starters
includes the variety of Pizza and different types of noodles along with the
sandwiches and burgers. Special items include the garlic bread and chilli
paneer along with the honey chilli potato and meal combos. Beverages
includes the cold drinks, hard drinks, juices, shakes, coffee and many more.
Desert includes the cheesecake, pastries and ice creams along with many
more other desserts as per the needs and requirements of the customers. All
such products and services are customisable which can be customised by
the customer as per their taste and preferences. This Cafe is a type of self-
service Cafe where customers are required to make the order on the
reception and collect their order after it is ready (Vu, 2020).
2

Prices
Prices of each food item is set as per the competitive prices so that
attraction and attention of the customer can be gained by the cafe. Such as
pizza price starting from hundred rupees to to 500 rupees, noodles price
range is from the 80 Rupees to 300 rupees, sandwiches and burgers starting
the price ranges from 50 rupees to 200 rupees, garlic bread and chilli paneer
starting from 90 Rupees to 250 rupees, honey chilli potato and milk combos
starting from 150 rupees to 400 rupees, all the beverages starting price is
from the 50 rupees to 300 rupees and all the desserts prices starting from 20
rupees to 200 rupees. These prices can be variate and differ if the customer
customised their food item as per the ingredients used in the food item
(Kulko, Kulko and Gorb, 2020).
Place or Location
Location chosen for the establishment of the cafe is the crowded place so
that my zoom number of customers can be attracted towards the cafe and it
is decided that the services must be online as well so that the customers can
online and delivered to them used in delivery services in the cafe. Therefore,
Cafe will be situated online as well as offline as well so that any customer
wants to visit a cafe can visit and any customer who wants to sit at home
and eat can easily order with the help of website of the cafe (Shamim, 2019).
Target Market
Target market for the cafe as per the product and services offered are
majorly the youngsters with the age group of 12 to 35. Segment of the
market is totally dependent on the spending habits of the customers and
their age group and the type of lifestyle their lives. Benefits of this segment
is that this age group is the maximum and most of the people prefer cafes
for parties and fast food. Drawback of the segment is that there are the
frequent changes in the taste and preferences of this age group people and
therefore they can easily switch two other brands. Hence the target
customers chosen as per the age and lifestyle of the people because they
3

are the ones who will spend on food in the cafes more (Hair, Page and
Brunsveld, 2019).
Promotion
Promotional method that can be used to advertise the cafe must be
offline and online both so that the people who are not involved in the online
portals can view the advertisements in and offline manner. Therefore, offline
methods used such as newspapers and magazines along with the television
and radio. Online methods used such as social media marketing and Search
Engine Optimisation along with the Google advertisement and pay per click.
Benefits of offline method is that the attachment can reach to those people
who are not using internet and demerits offline method is that it does not
have the wide reach of customers. Benefits of online method is that they
provide wide reach and cost effectiveness in promotion and demerits is the
security and privacy issues (Ken Colwell PhD, 2019).
Competition Analysis
Competitors of capitals in United Kingdom Society Cafe, Boo Boo Cafe,
origin coffee roasters and many more. Strengths of the competitors are that
they are a big brand and provide the good product portfolio with better
services to the customers. Weaknesses of the competitors are they are
offering the food items in a very high prices which are not affordable to
everyone and therefore they are dealing with the reduction in customers in
their cafes. It is important to fight against such big brands in terms of prices
and product food portfolio along with the quality of services (ElQuliti and
Elalem, 2018).
Industry Analysis
Porter’s five forces model
Bargaining power of suppliers
Bargaining power of suppliers in context of starter Cafe is high because
they can easily switch to other brands or restaurants if the owner of the cafe
is not agreeing with the prices. This is because the startup Cafe is a new
4

company which wants to enter in the market and suppliers will definitely
bargain with the prices of raw materials because they already have existing
brands to which they have dealerships.
Bargaining power of buyers
Bargaining power of buyers in context of startup Cafe is low because
they have already tasted the other restaurant food and therefore they need
the new taste and they will prefer the startup Cafe. This is because this new
generation wants to explore fast food as well as the healthy food the new
restaurant is offering and therefore they will definitely visit the cafe to
explore innovation and new dishes.
Threat of new entrants
Threat of new entrants can be high for the startup Cafe because it
means the high capital for the infrastructure and for the employees to
maintain in the cafe either online or offline. This is because starting the cafe
requires a large investment on its various resources such as physical and
human resources. Therefore, until they are not having the good investment
amount to spend on such resources then they will be facing a high threat of
new entrants.
Threat of new substitutes
Threat of new substitute can be low for the startup Cafe because they
can come up with the innovation and creativity in their food items which
cannot be easily substitutable by other food items. This is because if a
startup Cafe has the new taste and new innovation in dishes along with the
customer servicing using advanced technology then they can face slow
threats of new substitute.
Competition among existing firms in the market
Competition among existing forms in the market can be high for the
startup Cafe because there are already other brands who are running their
business with the competitive advantage and had a good name and stability
in the market (Hubbard, 2018). This is because in the food and restaurant
industry there are small companies and big brands also who are serving the
5

customers in an innovative manner by using advanced technology and
therefore startup Cafe have to face the tough competition entering into the
restaurant industry.
PESTEL Analysis
Political factor
Political factors can be defined as the institute of external factors
which can have upon the business and its functions and it includes the laws
and regulations which forces the companies to take certain actions or
restricts in undertaking some actions. Political factor provides threat to the
startup Cafe because government imposes various policies in order to
restrict the using of some raw materials of food which can create poison and
any other harm to the health of the customers. It will impact negatively to
the business.
Economic factor
Economic factors can be defined as a factor which can impact and
influence an individual and a company's financial status which includes the
education and employment status along with the income. Economic factor
provides the opportunity to the startup Cafe because of the employment rate
and increment of the gross domestic product. It will impact positively to the
business.
Social factor
Social factors can be defined as the representation of the set of
elements on consumer behavior which directly affects the people and society
which influences them in context of subculture and social class along with
the reference groups and families. Social factor provides the opportunity to
the startup Cafe because today's generation are referring new Cafe is more
rather than restaurants. It will impact positively to the business.
Technological factor
Technological factors can be defined as the ways to perform the new
equipment and practices which impact the business in a positive or negative
6

manner and it includes the information and communication Technology
along with the research and development. Technological factor provides
opportunity to the startup Cafe because of the use of Artificial Intelligence
and automation in the operation of Cafe. It will impact positively to the
business.
Environmental factor
Environmental factors can be defined as the factor which is ecological
in nature and it influences the living organisms which includes the
temperature and amount of sunlight along with the pH level of water and
natural disasters. Environmental factor provides threat to the startup Cafe
because there are many raw materials which are used in the production of
food does not support the environment. It will impact negatively to the
business.
Legal factor
Legal factors can be defined as the legal forces which tell a business
what it can do and what cannot and it involves the relationship among the
government and the businesses for example legislature and policies that
affects the business operations. Legal factor provides threat to the startup
Cafe because it imposes different laws and regulations to the cafe in terms of
production of the food and storage of food for the prevention of any diseases
to the customers (Nelson and Tyson, 2019). It will impact negatively to the
business.
SWOT Analysis
Strengths
Strength include that as per the idea of the business, it is profitable
and can gain the high reputation in the market which from ethical values.
Weaknesses
Weaknesses include that it has less frequent innovation with Poor
diversification strategies.
Opportunities
7

Opportunities include that it is good in taking advantage of the
opportunities in the market, it has the ability to bring new food items in the
market and moreover they have the aspiration for global expansion of the
business and trying to formulate the Strategies for the same.
Threats
Threat include that the market growth is uncertain in the restaurant
industry, there is a uncertain rise in Raw materials of the food items with the
high competitions in the market (Belew and Elad, 2020).
CONCLUSION
It is concluded that starting a business in the restaurant industry in the
domain of Cafe is a profit making business in today's generation which can
make good revenue for the company. Therefore, it is recommended that it is
important to develop the cafe by expanding and growing in Different cities
and on the Global basis as well. Talking about financial sources then it can
be arranged with the method of crowd finding and family and friends type of
funds which can prove safe for the business. Risk analysed for the business
is the competition in the restaurant industry because there is the tough
competition facing the high brand as well so this can be the risk that the cafe
can maintain its stability in the market or not. Hence it is important to
mitigate such risk by analysing the competitors in a more effective manner
and developing the strategies to fight against them with the help of Business
models such as pestle or SWOT analysis along with the porters five forces
model. Thereby it is important to analyse the skills and experiences required
to start the business, it is essential to examine the product and services, it is
necessary to determine the prices and place or location for the business, it is
significant to gain the knowledge about the target market and promotional
methods for the business, it is crucial to study about the competition and
industry analysis and it is required to investigate the pestle and SWOT
analysis for the business. Hence this report covers all such areas in order to
8

better understand the concept of starting a business and fundamentals of
marketing.
REFERENCES
Books and journal
9

Belew, S. and Elad, J., 2020. Starting an online business all-in-one for
dummies. John Wiley & Sons.
ElQuliti, S.A. and Elalem, A.G., 2018. Feasibility Study for Establishing a
Restaurant in Jeddah. American Scientific Research Journal for
Engineering, Technology, and Sciences (ASRJETS). 40(1). pp.143-167.
Hair, J.F., Page, M. and Brunsveld, N., 2019. Essentials of business research
methods. Routledge.
Hubbard, L.J., 2018. Small Business Restaurant Marketing Strategies for
Sustainability.
Ken Colwell PhD, M.B.A., 2019. Starting a Business QuickStart Guide: The
Simplified Beginner’s Guide to Launching a Successful Small Business,
Turning Your Vision Into Reality, and Achieving Your Entrepreneurial
Dream. ClydeBank Media LLC.
Kriel, G., 2019. A simple recipe for restaurant business
success. Finweek. 2019(15). pp.40-42.
Kulko, U., Kulko, V. and Gorb, K., HOTEL AND RESTAURANT BUSINESS:
EXPERIENCE, INNOVATION AND TRENDS. Розповсюдження і
тиражування без офіційного дозволу ХТЕІ КНТЕУ заборонено.
Nelson, B. and Tyson, E., 2019. Starting a Business All-in-one for Dummies.
John Wiley & Sons.
Phan, T., 2019. Starting a restaurant business in Finland: Preparing to open a
Vietnamese restaurant in the city of Lahti.
Shamim, K., 2019. Market research in fast food restaurant sector.
Vu, T.H., 2020. Business plan: Mon Nam: Vietnamese restaurant in
Hämeenkyrö, Finland.
10