Report: Launching a New Coffee Shop Venture for Coffee House

This report details the launch of a new coffee shop venture for 'Coffee House'. It begins with an introduction to the concept of a new venture, emphasizing the inherent risks. The main body covers target market identification, competitive analysis using Porter's five forces and SWOT analysis. It then delves into the tangible and intangible resources required, including equipment, Wi-Fi, infrastructure, human capital, and financial investment. A comprehensive business plan is proposed, including problem-solving strategies like book reading and free Wi-Fi. The report outlines time planning, pricing strategies, and a competitive analysis highlighting the venture's unique features. It also examines the necessary skills and capabilities for business owners and employees, and the methods to acquire them. Finally, it explores various promotional activities and channels, including social media, email marketing, and paid online advertising, along with a cash budget for the pre-launch and initial operational phases. The report concludes with a discussion of the appropriate legal form for the venture.

LAUNCHING A NEW
VENTURE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
P 1 New venture identifying specific target markets and competitive analysis..........................1
P 2 Determination of specific tangible and intangible resources that would be required for the
launch of a new venture...............................................................................................................2
P 3 Proposal to launch a new venture..........................................................................................3
P 4 Skills and capabilities required to launch a new venture and ways in which they are
acquired........................................................................................................................................4
P 5 Different promotional activities and channels that will support the launch..........................5
P 6 Promotional activity plan for both launch and pre-launch....................................................6
P 7 Cash budget for the pre-launch phase of the venture and the first 12–18 months preceding
launch...........................................................................................................................................7
P 8 Appropriate legal form for the venture stating and reason because of which those forms
have been chosen.........................................................................................................................8
CONCLUSION................................................................................................................................8
REREFENCES..............................................................................................................................10

INTRODUCTION
Venture is a kind of a project or an activity which is new and risky as it involves risk of
failure (Mullins, 2017). In order to expand a business every organization need to focus on
opening a new venture of their business at another location for the growth of the business. This
report will lay emphasis upon a coffee shop business named ‘Coffee House’ who is finally in a
position to launch a new venture. This report will lay emphasis upon development of a business
plan and action plan for launching of a new venture of Coffee House.
MAIN BODY
P 1 New venture identifying specific target markets and competitive analysis
Coffee House is planning to launch their new venture in the same city. They provide
different types of coffee and related food products to their customers that are available in
different sizes and quantity. Main target customers for new venture will be people up to age
group of 40 who loves coffee and coffee products. Other than this new venture will also have
book shelf for those individuals who come to have their coffee alone for their time pass. New
venture will also provide small fast food items as well with coffee products in order to attract a
greater number of customers.
Competitors Analysis
In order to analyse current competitors and competitive environment of the new Venture
Porters five force model will be used.
Competitive rivalry: Threat of this force is high because competition in this sector is extremely
high. There are various kinds of already established coffee brands such as Starbucks who are one
of the main and most important competitors present in the current competitive environment
(Muegge and Mezen, 2017).
The bargaining power of customers or buyers: Threat of this force is also strong as there are
many other options or substitute products available in the market. Not only this switching cost
from one product to another is also lower for the customers.
The bargaining power of suppliers: Threat of this force is moderate. This is because there re
various kinds of suppliers available in the market in large number who can supply required raw
material for the new Venture but there is no surety that all the suppliers will be providing
required raw material in the same price as others.
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The threat of substitution: Threat of this force is also moderate as there are large number of
competitors who provide similar products to their customers in competitive prices (Kuratko and
Hornsby, 2017). But New venture will be providing various kinds of additional products and
services to their customers because of which threat of this force reduces.
The threat of new entrants: Threat of this force is also moderate as establishment of new business
require large capital investment and various other resources because of which it becomes
difficult for a new entrant to enter in this sector because of which threat of this force reduces.
In order to understand strengths and weakness of the new venture, SWOT analysis will be done.
Strengths:
 Provides different kinds of coffee and
coffee products that are available in
different sizes for the customers.
 Provision of additional services like Books
for the customers.
 Themed decoration
Weakness:
 Limited staff members for production of
products and providing excellent services
to the customers.
 Selling of rare type of coffee at higher price
because of which it is difficult to be sold.
Opportunity:
 Fluctuating prices of coffee products and
providing discounts and various kinds of
offers in order to attract more customers
Threat:
 Increasing competition in the market
 Provision of coffee products in lowest
possible price by the competitors.
P 2 Determination of specific tangible and intangible resources that would be required for the
launch of a new venture
There are various kinds of tangible and intangible resources that will be required for
launching of a new Venture. For launching new venture of Coffee House five (tangible and
intangible) resources have been identified and each of then has their own benefits which will
further help in gaining competitive advantage:
 First resource required is expresso Coffee marker. This equipment ill helps the new venture
to make different kinds of coffee as per the taste, need and requirement of the customers
(Shirokova and et. al., 2017).
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 New venture will also provide Wi-Fi facility to all the customers so that they can enjoy their
coffee simultaneously enjoying free internet service.
 Infrastructure is another important resource which is required so that all the raw materials,
equipment’s, sitting arrangements etc. can be done in a better and excellent manner.
 Human capital is another important resource which is required so for products of food and
beverages offered by the Coffee house and for serving those products to the customers.
 Financial investment is another important resource which is required to run the new Venture
in a better and successful manner.
These are few most important tangible and intangible resources that will be required in
successfully running a new business.
P 3 Proposal to launch a new venture
Business: Launching of a new venture of Coffee House.
Problem that new Venture will resolve: According to a survey most of the time major problem is
faced by individual customers who come all alone to have their food and beverages as they get
bored while waiting for their orders. This new venture will help in resolving this issue as it will
provide additional services to the customers such as book reading facility, Free Wi-Fi facility to
individuals customers so that they can enjoy their coffee without getting bored.
Explanation of proposed new Venture: New venture will provide different flavoured coffee,
different categories of coffee, other coffee products. In addition to this small different kind of
fast food will also be provided to the customers which they can enjoy with coffee, book reading
facility for the customers, free internet and Wi-Fi facility for the customers. other than this at
new venture there will take away facility for the customers who are in hurry.
Time planning for new Venture:
Activities 1st week 2nd week 3rd week 4th week 5th week
Renting a place for establishment of
new Venture
Buying required equipment’s for
production of food and beverages
Finalizing suppliers for required raw
material
Establishment of IT equipment’s and
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book shelf
Completion of legal formalities
Hiring human resource for running
new Venture
Opening of new venture
Pricing plan for new venture: in order to smoothly and successfully new venture it is extremely
important to adopt a pricing strategy for finalizing prices of products and services provided to the
customers. For this new Venture competitive pricing strategy will be chosen in order to attract a
greater number of customers.
Competition analysis and reason because of which new Venture idea is different from others:
Competition in this industry is quite high (de Miranda Oliveira and et. al., 2019). The new
venture will be facing a tough competition but the new and additional services that the new
venture will be providing will help the business in gaining competitive advantage. As these new
services makes the new venture different from other coffee shops such as availability of book
reading service, free internet and Wi-Fi and many other services.
P 4 Skills and capabilities required to launch a new venture and ways in which they are acquired
There are various kinds of skills and capabilities that will be required in the business owners and
future employees of the new venture. It is important to develop and acquire these skills and
capabilities for successfully running of the new venture. skills and capabilities required for
starting a new business are as follows:
 Ability to select appropriate location and understand needs of the target market: it is one of
the most important capability which is required to be present within the business owner so
that they can understand areas or location where they should focus on establishing the new
venture so that they can attract more number of customers and there is less competition
present within the area (Adomako and et. al, 2018).
 Low cost marketing and promotion for both pre- launching and after launching of the new
venture: another required capability which is important to be known by the business owner so
that that they can develop an appropriate strategy with the help of which they can develop an
effective and appropriate marketing and promotion plan in order to make their customers
aware about their new venture and do marketing of their products and services in order to
attract more numbers of customers.
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 IT skills for management of installed IS system and network: it is important to have IT
management skills in IT department staff so that all kinds of information system used within
the new Venture, network etc. can be managed in a better and appropriate manner
 Team work skills for employees: Another important skill which is required to be resent
within employees of the new venture so that they can work together as a team and service
products and services demanded by the customers in a proper and appropriate manner
(Pecero Morales, 2017).
 Leadership skills for business owner: Leadership skill is one of the most important skill
which is required to be present within the business owner so that they can manage all of their
staff members, motivate them to fulfil their roles and responsibilities in a proper and
appropriate manner. This will further help them to achieve their target aim and objective in a
proper and appropriate manner.
P 5 Different promotional activities and channels that will support the launch
There are various kinds of promotional activities and channels that can be used by for
launching and promotion of the new venture. Some of the most effective promotional activities
and channels are as follows:
 Social media marketing: Promotional activities that are carried out on social media such as
Facebook, Twitter and many more is known as social media marketing. It is one of the most
effective channels as it helps the organization in reaching to their target customers in a most
proper and effective manner. But this activity has its own disadvantages as well such as it is
difficult to measure success of the promotional activity and requires continuous monitoring.
 Email marketing: Another promotional activity that can be used by the business for
promotion of their new venture (Kumar, Sajid and BIST, 2018). In this information about
new feature and promotional message can be delivered to the existing customers of the
business. It is an effective way f promotion of exiting customers of the business. But it has a
disadvantage i.e. it cannot be used to reach new target customers of a business.
 Paid online advertisement: it is another type of most commonly used advertising method that
can be used by Coffee house for promotion of their new venture. It is one of the most
effective way of promotion as with the help of this activity promotion can be done on all
online channel. But it has a disadvantage as well such as: customers ignore advertisements,
most of the online advertisements are expensive, customers get distracted easily.
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 Offline advertisement: it is one of the most common and traditional way of advertising. In
this promotion is done with the help of newspapers, television etc. it has some disadvantages
as well, such as: accessibility to such channel is limited as today most of the people prefer
reading news online because of which newspapers are purchased by less number of people,
Advertisement upon television is mostly ignored by people.
 Direct marketing: It is mostly done by distribution of pamphlets, brochures etc. to target
customers. it is another effective way of promotion in which business ca easily promote their
new venture to their target market (Krasniqi, 2016). But even this strategy has its own
disadvantage such as: it is time consuming, people usually read and through the pamphlets,
brochures.
P 6 Promotional activity plan for both launch and pre-launch
In order to create a promotion activity plan for both pre- launch and launch 7 P’s
Marketing mix strategy will be included:
 Product: the new Coffee House Venture will offer various kinds of products and services to
their customers. menu of the new venture will be divided into few sections first section will
be of hot beverages, second section will be cold beverages, third section will be of coffee
items and last section will be off fast food section. Details of all the items will be specified
below each item name and its price will be specified in front of the item name. price of items
will be categorized into categories as per the size of the item.
 Price: price is one of the most important factors which helps in attracting a greater number of
customers (de Miranda Oliveira and et. al., 2019). new venture will be using competitive
pricing strategy so that all the food and beverages are made available to the customers at
affordable price. Items available in different sizes will be having different prices. Different
kinds of discounts and coupons will also be provided to the customers.
 Promotion: promotion of the new venture will be done using different promotional methods
such as: social media advertising, email marketing, paid online advertising, offline
advertising and direct marketing. Out of all the above promotional activities social media
advertising, email marketing, paid online advertising will be done for pre- launch of the new
venture and remain two promotional activities will be chosen at the time of launch of the new
venture.
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 Place: new venture is located at the heart of the city. Its location will be available on all the
promotional channels so that it becomes easy for the customers to find and locate the new
venture of Coffee House easily.
 Physical evidence: All the packaging materials will be made up of organic materials and will
have new venture’s logo and name printed on it. Packaging materials for different sized food
items will be available in different sizes so differentiation within those items can be done
easily and can be made available to the customers.
 process: This involves daily operations of the new venture which helps in understanding the
way in which new venture will run (Iwasaki and Kim, 2020). R&D team will be working on
bringing innovation within products and services in order to enhace taste and experience of
the customers. Order given by the customers will be recorded and sent to customers mobile
and when it is reasdy it will be serviced to the customers. customers will be able to make
payment through both online and offline ways.
 People: Employee of the café are the one who will be in direct contact with the customers.
they will be wearing Coffee House uniform so that they can be identified easily. They will be
provided with proper training so that they can provide excellent service to the customers in
order to increase loyalty within the customers.
P 7 Cash budget for the pre-launch phase of the venture and the first 12–18 months preceding
launch
Cash Budget
year 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2021
July Aug Sep Oct Nov Dec Jan Feb March Aprl May June
cash inflow
sales 15000 17000 18000 21600 25920 31104 37324 44789 53747 64497 77396 92876
other income 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
total cash
inflow 20000 22000 23000 26600 30920 36104 42324 49789 58747 69497 82396 97876
cash outflow
salaries 5000 5000 5000 5000 5000 5000 5000 6000 6000 6000 6000 6000
legal
expenses 2000 0 0 0 0 0 0 0 0 0 0 0
infrastructure 4000 0 0 0 0 1500 0 0 0 0 0 0
rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000
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utility bills 1000 1000 1200 1200 1500 1500 1600 1600 1700 1700 1700 1800
inventory
cost 4000 5000 5000 5000 6000 6000 6000 6000 6000 6000 6000 6000
long term
liability 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500
total cash
inflow 19500 14500 14700 14700 16000 17500 16100 17100 17200 17200 17200 17300
net cash
flow 500 7500 8300 11900 14920 18604 26224 32689 41547 52297 65196 80576
Opening budget of the new venture includes: salaries provided to the staff members, rent,
infrastructure, legal expenses, utility bills and long tern liability. Salaries are the payment which
given to the employees so that they work effectively and efficiently (Iwasaki and Kim, 2020).
Rent is the payment of place that has been rented for the new Venture, infrastructure cost
includes table chairs etc. Legal expenses are the expenses done for legal forms etc.
Receipts includes: sales income and other income like renting a book etc. Income that is
generated from sales of food and beverages comes under sales whereas other income includes
income generated from book renting etc.
P 8 Appropriate legal form for the venture stating and reason because of which those forms have
been chosen
There are three different kinds of legal forms: sole-trader, limited company and
partnership. Legal form chosen for the new Venture is sole proprietorship. This legal form has
been chosen for the new Venture because it has a simple structure. It is one of the most easy and
inexpensive structure that can be established easily. This legal form helps the business owner to
gain full control over the business so that decision making or changes can be done accordingly.
Business is taxed as owner person’s tax so there is no need to file tax twice due to these reasons
this legal form was chosen.
CONCLUSION
From the above report it has been summarized that in order to successfully launch a new
venture there are various kinds of resources, skills and capabilities are required to be fulfilled for
launching the new venture. It has been analysed that in order to develop proper promotional plan
it is important for organization to identify different kinds of promotional activities and channels
that will be used by the organizations for both pre- launch and at the time of launching new
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venture only after that promotional plan can be developed. It has also been analysed that before
starting or launching a new venture it is important to identify type of legal form which will be
focused on by the organization for the venture stating.
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REREFENCES
Books and journals
Adomako, S., and et. al, 2018. Entrepreneurial alertness and new venture performance:
Facilitating roles of networking capability. International Small Business Journal. 36(5).
pp.453-472.
de Miranda Oliveira, M., and et. al., 2019. Startups and Technology Transfer from Universities
and Research Centers—An Analysis of the Impact on Launching New Products.
In Startups and Innovation Ecosystems in Emerging Markets (pp. 17-35). Palgrave
Macmillan, Cham.
Iwasaki, I. and Kim, B.Y., 2020. Legal forms, organizational architecture, and firm failure: a
large survival analysis of Russian corporations. European Journal of Law and
Economics. 49(2). pp.227-275.
Krasniqi, A., 2016. Causes of domination of individual enterprises in relation to other legal
forms of business organizations in the Republic of Kosovo.
Kumar, S.P., Sajid, M.D. and BIST, B., 2018. A Project On Business Development, SWOT
Analysis and Customer Retention activities in existing Potential within a limited
territory At Reliance Communication, Pune. International Journal of Pure and Applied
Mathematics. 119(12). pp.5843-5864.
Kuratko, D.F. and Hornsby, J.S., 2017. New venture management: The entrepreneur’s roadmap.
Taylor & Francis.
Muegge, S.M. and Mezen, M., 2017. Business ecosystems and new venture business models: An
exploratory study of participation in the Lead to Win job-creation engine. International
Journal of Technology Management, 75(1-4), pp.157-192.
Mullins, J., 2017. The New Business Road Test: What entrepreneurs and investors should do
before launching a lean start-up. Pearson UK.
Pecero Morales, M., 2017. Business plan based on a new business idea: BEPRETTY.
Shirokova, G., and et. al., 2017. Expertise, university infrastructure and approaches to new
venture creation: assessing students who start businesses. Entrepreneurship & Regional
Development, 29(9-10), pp.912-944.
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