Detailed Business Plan for a Coffee Shop in Sydney, Australia

This business plan provides a detailed analysis for a coffee shop named Choco Mania in Sydney, Australia. It begins with an introduction highlighting the popularity of coffee culture in Australia and then provides an overview of the business, including its proprietors, stakeholders, and offerings of Brazilian and Ethiopian coffee, hot chocolate, and savories. The plan conducts a situational analysis using Porter's Five Forces, Porter's Generic Strategies, SWOT analysis, and TOWS matrix to assess the competitive landscape and the coffee shop's position. It then outlines marketing strategies, including market segmentation and the marketing mix, followed by financial projections and an action plan. The document concludes with recommendations for the coffee shop's growth and expansion. The plan explores various aspects of the coffee shop's operations, from competitive rivalry and supplier power to cost focus and differentiation strategies. The assignment aims to assist the coffee shop in growing and expanding within Sydney, and eventually, throughout Australia, by providing a comprehensive and pragmatic business strategy.

Running head: BUSINESS PLAN FOR A COFFEE SHOP
Business Plan for a Coffee Shop
Name of the Student
Name of the University
Author Note

1BUSINESS PLAN FOR A COFFEE SHOP
Table of Contents
Introduction......................................................................................................................................2
1. About the Coffee Shop Business – A Brief Overview.............................................................2
2. Structure of the Business..........................................................................................................3
3. Situational Analysis..................................................................................................................4
3.1. Porters 5 Forces Analysis of Choco Mania.......................................................................4
3.2. Porter’s Generic Strategies................................................................................................6
3.3. SWOT Analysis................................................................................................................8
3.4. Tows Matrix......................................................................................................................9
4. Marketing Strategies of Choco Mania....................................................................................11
4.1. Market Segmentation......................................................................................................11
4.2. Marketing Mix................................................................................................................12
5. Financial Projections..............................................................................................................15
6. Action Plan.............................................................................................................................17
7. Recommendations..................................................................................................................18
Conclusion.....................................................................................................................................21
References......................................................................................................................................22

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3BUSINESS PLAN FOR A COFFEE SHOP
Introduction
The love for coffee is widespread in different parts of Australia with coffee as a beverage
uniting people of all age groups, genders and professions under a single roof. There are coffee
shops galore in every Australian city and town, with cafes being perceived as a destination for
relaxation and comfort, in addition to being popular meeting points for business. Spending time
in a coffee shop appears to be quite a common thing to do for young and old alike, but it is an
especially popular pastime for people who are in their youth, that is, those in the age group of
eighteen to twenty five years. For such people, cafes are a regular joint or destination to visit,
simply to meet with, chat and catch up with friends and family members. The love of coffee that
is so prevalent in Australian cities goes to show that this is a part of the world where opening a
coffee business can certainly prove to be a good idea, as there are going to be many takers for the
same. This assignment prepares a business plan based on detailed situational analysis for a coffee
shop in the city of Sydney which it can use to grow and expand in the city, and based on its
success here, perhaps expand to other parts of Australia as well. The assignment concludes with
a number of useful and pragmatic recommendations that the coffee shop owners can take into
consideration in order to survive in the market in Sydney and to improve its business in a way
that its services are deemed to be acceptable and popular among coffee lovers of all ages and
budget in the city of Sydney, above all else.
1. About the Coffee Shop Business – A Brief Overview
The coffee shop which is being spoken about or discussed in this assignment is Choco
Mania. Choco Mania has newly opened in the suburbs in Sydney and it is looking for ways

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means by which it can grow and expand in the city, so that it serves as an attractive
destination for coffee lovers of every age and economic background. The coffee shop is
owned by a couple, Mr. and Mrs. Owen, and it specializes in the provision of Brazilian and
Ethiopian coffee and steaming hot chocolate, in addition to a variety of savories. Some of the
savories that can be enjoyed at Choco Mania include red velvet cupcakes, blueberry cheesecake,
and quail pies among others. Choco Mania is a café that takes pride in the quality of the food that
it serves to its customers. It is new to the business and has been operating in the city of Sydney
for the last six months. The business hopes to expand rapidly in the coming eight to twelve
months and it intends on capturing a substantive share of the market for coffee shops and bistros
in New South Wales overall, and the city of Sydney in particular (based on a hypothetical
scenario).
2. Structure of the Business
Proprietors of the Business – The proprietors of the business are Mr. and Mrs. Owen who have
set up this enterprise on the outskirts of the city of Sydney. Both Mr. and Mrs. Owen love coffee,
they are quite enthusiastic about food and drink and it is this enthusiasm which led them to open
up a business like Choco Mania in Sydney. They are also warm, loving and hospitable people,
which is why they have chosen to start a business in the domain of hospitality and food rather
than any other industry (based on hypothetical scenario).
Stakeholders of the Business – Some of the key stakeholders of the business are its employee
base, and its customers and also investors. At present the business is serviced by ten employees,
with five being in charge of cooking and making coffee and the remaining five being in charge
of waiting on the customers who arrive at the coffee shop. The customers or target audience of

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the enterprise are mostly people who are in their youth, who live in the outskirts of Sydney and
who love coffee. The investors are the people from whom loans have been obtained to start up
the business, namely banks and financial institutions of repute in Sydney. The business owners
have invested a considerable amount of private capital in this enterprise too, more of which will
be discussed in the section on finances below (based on hypothetical scenario),
3. Situational Analysis
The Situational Analysis of Choco Mania will be carried out using Porters 5 Forces
Framework, Porters Generic Strategies and the framework of SWOT Analysis as well as the
TOWS Matrix.
3.1. Porters 5 Forces Analysis of Choco Mania
Competitive Rivalry – Competitive rivalry is quite high for a business like Choco Mania. This
is because the love for coffee is quite widespread in the city of Sydney and there are quite a few
cafes and bistros in operation in the city, in both the north and the south, that offer similar
beverages and savories compared to what is on offer at this coffee shop. Choco Mania is a
business that has to keep its beverages and savories quite uniquely positioned in order to make
sure that these stand out in the market and continue to remain appealing for the target audience,
in spite of the competition that is posed to this business by its rivals (Andrew and Shimp 2017).
Bargaining Power of Suppliers – As there is an elaborate network of coffee shops and bistros
along the length and breadth of the city of Sydney, there are many suppliers and distributors that
Choco Mania can rely on for the provision of goods or supplies using which it can grow and
develop its business. The bargaining power of suppliers is therefore quite high for a business like
Choco Mania (Armstrong et al. 2018).

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Bargaining Power of Buyers – Since there are many coffee shops in the city of Sydney for
coffee lovers to choose from it can be said that the bargaining power of customers is quite high.
There are numerous options which coffee lovers in the city of Sydney can avail if they want to
enjoy a cup of coffee or two, in which case it is imperative for Choco Mania, to really lure
customers with its beverages and establish competitive advantage (Armstrong et al. 2018).
Threat of Substitution – If Choco Mania does not take care with the unique positioning of its
services, it will stand the danger of having its beverages being substituted by rival business.
Beverages and savories are quite easy to substitute if the rivals of the business have some
understanding of the ingredients and the techniques that are being used for the purpose of
manufacture. The threat of substitution is quite high for Choco Mania and it has to watch its back
by giving customers something unique or novel to choose from always (Atwal and Williams
2017).
Threat of New Entry – The threat of new entry is also something that is quite high for a
business like Choco Mania because of the fact that coffee is much loved in Sydney, and there are
coffee lovers and coffee shops in every nook and cranny of the city. There is every possibility of
a new coffee shop emerging in Sydney at any given point of time that offers services that are
similar to those that are offered by Choco Mania and which are made available to consumers for
competitive prices, thus posing a serious threat to this new business

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Figure 1
3.2. Porter’s Generic Strategies
Cost Focus – Choco Mania is a business that focuses on producing its beverages and savories at
a limited prices and it intends on making its savories accessible at an affordable price as well.
Customers do not have to spend an exorbitant amount of money in order to be able to afford the
beverages and savories that are on offer at the coffee shop. The amount of capital that the
business is seen to invest in for the production of its savories, is also quite limited. It makes do
with limited capital and will take the decision to invest more in the business only if the business
has started reaping a significant degree of profit after being in operation for a few months
(Chaffey and Ellis Chadwick 2019).
Cost Leadership – As mentioned above, the cost of production is something that is kept quite
low by a business such as Choco Mania. Choco Mania has been in the coffee business only for a
few months, and it has acquired name and fame for the low price of its beverages. What has
helped the business to achieve this name and fame is the fact that produces its coffee and its
savories at quite a low price to begin with. The strategy of producing coffee and beverages using
a limited amount of capital is likely to be a challenge for the business in the initial years of its

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operation, as it is going to have to maintain good quality of beverage and foods in spite of
investing a limited amount of money in the production of the same. However, with keen focus
and proper implementation, the cost leadership strategy of the business will prove to be of great
benefit for it in the long run. It will be in a position to incur a considerable amount of profit by
virtue of the fact that it invests little in the manufacture of its goods but is able to command a
decent price for the sale of the same, regardless of how new it is in the market in Sydney
(Charter and Polonsky 2017).
Differentiation – Differentiation is also something that a business like Choco Mania is seen to
focus on. The coffee shop is one that keeps both its beverages as well as its savories quite diverse
in character and form, so that customers get to enjoy a bit of variety when they walk into this
coffee shop. Customers get to choose from both Brazilian as well as Ethiopian coffee, and there
are also many choices that they can exercise when it comes to pastries and other types of
savories that are on offer at this coffee shop. The differentiation strategy that is adopted by
Choco Mania is something that will continue to help the coffee shop in attracting customers as
variety is something that is much loved by customers of all ages and the more diverse the food
products and beverages on offer at Choco Mania, the more attractive are its products to its target
audience (Charter and Polonsky 2017).

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Figure 2
3.3. SWOT Analysis
Strengths – One of the biggest strengths associated with the quality of the coffee and the
beverages that are sold at the Choco Mania coffee shop is the fact that the coffee and the savories
are always quite fresh. The savories in particular are those that are seen to melt in the mouth of
customers upon consumption, and there is a lot of care that is taken by the business when it
comes to the presentation of its beverages as well. The beverages as well as the food products are
presented on attractive platter and are packaged beautifully for those intending on buying these
as takeaway food, or food on the go (De Mooi 2018).
Weaknesses – The business has not yet been able to invest too much money in the advertising or
promotion of its products as a result of which not too many people know about Choco Mania.
This is also a café that is situated in the suburbs of Sydney rather than in the city proper and it is
more than likely that it will be difficult for those residing in the heart of the city to visit this place
regularly for a cup of coffee or two (Deepak and Jevakumar 2019).

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Opportunities – The love for coffee is absolute in the country of Australia and coffee lovers can
be located in abundance in each and every Australian city and town, the city of Sydney being no
exception in this respect. There is therefore every opportunity for a business like Choco Mania to
grow and expand to new heights. Given the fact that there are many coffee lovers residing in the
city, this is a business that is sure to be able to locate a significant demand for its food and
services now as well as in the near and the distant future (Deepak and Jevakumar 2019).
Threats – Once again, it must be remembered that the love for coffee in the city of Sydney
among people of all ages implies that there is scope for rivals and competitors of Choco Mania to
set up base in this city and to do equally well upon doing so. Choco Mania as a business as to
position its food and its beverages in a way that this stands out from what is being offered by
rival businesses and that too at competitive prices, so that the threat of rivalry and competition is
one that can be suitably combated by the business (Felix et al. 2017).
3.4. Tows Matrix
Strengths/Opportunities – The fact that Choco Mania is a business which is capable of
producing high quality coffee and savories indicates that it can avail the opportunity to grow and
expand in the city of Sydney by a considerable degree. The business is one that really needs to
cash in on its strengths such as the high quality of coffee and savories, and the diversity or
variety associated with the same, to retain the interest of its target audience over a long span of
time, rather than catering to their needs and requirements only in the short term (Fill and
Turnbull 2016).
Strengths/Threats – The threat that is associated with the high quality and diversity that is
offered by Choco Mania as a business is that such quality as well as diversity can be easily

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substituted if the food products and beverage is not positioned uniquely enough. Choco Mania as
a business is one that needs to make sure that it gives its customers something new and unique to
avail, if it is to compete with rival cafes and enterprises in the same industry and root out
competition for good, on the strength of the quality of its food and the variety of food it offers
(Fill and Turnbull 2016).
Weakness/Opportunities – One of the biggest weaknesses associated with a business like
Choco Mania lies in the fact that it is situated in the outskirts or suburbs of the city rather than in
the city proper. It can take advantage of this location to become a popular joint for the local
people residing here rather than attracting only the people who stay in the heart of the city. By
serving as a huge favorite of the local people, the business will be able to acquire name and
fame, in weeks and months, and will soon give city people a reason to come and visit the place,
even though it is far away (Keegan 2017).
Weakness/Threats – The threat associated with the fact that this is a business which is located
in the suburbs rather than in the city proper is that people are not going to want to come here too
often. People at least in the heart of the city will not want to spend the money, the time and the
effort that it takes to travel all the way to the suburbs to enjoy some coffee at Choco Mania, and
would prefer to visit a café or a bistro that is nearer to them instead (Kerrigan 2017).