Business Plan Evaluation Report: Coffee Shop, Strengths & Weaknesses

This report presents a comprehensive evaluation of a business plan for a proposed coffee shop. The analysis identifies the strengths, such as a clear mission statement, defined short and long-term objectives, and a detailed financial budget. However, it also highlights weaknesses, including unrealistic budget projections, an undefined target customer base, and an over-hyped business concept lacking a unique selling proposition. The evaluation suggests that the plan requires significant revisions, particularly in market research, financial projections, and target audience identification. The report also discusses the directors' perspectives on the plan, and recommends collaborative efforts, thorough market research, and potential consultation with third-party organizations to refine the business strategy and increase its viability.

Running head: BUSINESS PLAN EVALUATION
Business Plan Evaluation
Name of the Student
Name of the University
Author note

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BUSINESS PLAN EVALUATION
Answer to question 1:
Jessie has prepared a business plan for opening a coffee shop. Coffee shops are quite
common business for Australians. The industry trend and analysis indicate that, it has
developed especially in the last five years. Considering the love of Australians towards the
vibrant coffee culture and good quality coffee, the revenue in this industry is increasing and it
is expected to reach minimum of 7% on an annual basis by the year 2017. This figure
indicates that there has been a great boost over the years in this industry. Considering the plan
made by Jessie, there are few strong points and weaknesses in this plan. Those are discussed
below:
Strength
The primary strength of the business plan made by Jessie is that, it has predetermined
and pragmatic mission. Since, the coffee industry is growing and more players are coming to
the market with their new and innovative plans, while starting a new business it is very much
significant to determine the mission and vision of the organization. The mission of the
proposed coffee shop would be to give the most effort for creating a unique place for the
consumers where they can socialize in a relaxing and comfortable environment. Along with
that they will also be able to experience one of the best home-brewed coffees along with
delicious snacks and pastries. Other than that, the business plan has determined its small term
and long term objective in a transparent way. For the first month, a minimum of 10% profit
has been expected as well, which is the primary short term goal for the café. However,
considering the long term goals, the café has determined its objective to be selected as one of
the best cafes by the local guides and food websites. Determining the objectives and fixing
the short term goals are the two strongest points about the business plan. The business plan
also contains the description of the expenses that can be required for the café, such as the

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promotional expenses, legal expenses, insurance fees, rent, consultation fees and other
deposits and stationary expenses. The financial budget of the business has been written in
details in the plan which is a major part of a business planning.
Weakness
Other than the strong points in the business plan, the plan has several weak points as
well. Those are listed below:
Unrealistic budget projections:
The business plan has projected few unrealistic monetary projections such as; it did
not include the monthly salary of the owners. This is a major drawback of the plan. Also, the
plan has considered the starting inventory budget of the café to be quite high. The owners
may have some issues with the budget of the business at the initial stage. Since the owners do
not have any sponsor currently, they have to arrange for the money themselves. Therefore,
the budget needs to be reviewed before proceeding with the plan. The plan has also
considered 10% profit for the first month of the business, which seems very unlikely for a
start up business.
Undefined target customers
For every business, there is a target customer base. If the café targets the youngsters
to be their major customers, they have to decorate the interiors according to that; however, if
they target the middle aged or the old population, they have to outline their menu and
decoration in accordance to that. This specifies the lack of market research before making the
draft business plan.

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BUSINESS PLAN EVALUATION
Over-hyped business plan
The plan can also be considered to be a little over-hyped. Coffee business is quite
common in Australia and there are several start ups all around the country. Therefore, the
idea of the business is not very unique. Other than that, the plan also did not focus on having
the competition in the market which is very high right now. Due to the growing revenue of
this industry, there can be several players in the market with an almost similar idea.
Therefore, it can also be said that the plan lacks a unique quotient.
Extra information
The plan has detailed different sectors, while it has missed few important ones.
However, sometimes the plan also put more information in the detailing which was
unnecessary. Therefore, if this plan is presented to any of the sponsors, they might get bored
with all the extra information in the plan.
Answer to question 2:
The directors should proceed with the business plan, only if the plan is reviewed and
changes are made at few major places. The plan lacks research and development of the
business idea which indicates the plan to be a little vague. Entrepreneurs dream about their
business plan for a long time, but in reality setting a business as it has been planned is the
toughest job. The real challenge comes while the plan fails in reality. Therefore, making the
practical plan before starting the job is very important for a business. For this coffee shop
business, Jessie has made a draft plan where the other two directors, Stephen and Andrew had
some issues. So, before considering this plan to be their final one, they require to make
several changes in the outline. The primary changes that are to be made in the plan are listed
below:

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Poor research and development
The plan lacks serious research and development. The author missed few major parts
such as the salary of the first month, target customers, overall market trend of a certain age
group etc. It is very much significant to make all the facts sure and verified. Before opening
the coffee shop, the owners should ensure that they know the industry and the market in and
out. They need to know about the market positioning, buying habits of the customers, market
size and most importantly the market trends. However, the business plan did not mention
anything. If this plan is presented to any sponsor, they will not get any kind of authentic
statistics or data in the plan. Therefore, there are low chances of approving this business plan.
Unrealistic assumptions
The very characteristics of the business plans say that there are several assumptions in
it. It is the job of the owners that they should try their best to make all these assumptions
true. They require highlighting all their assumption while they require providing adequate
amount of authentic data and time for the market research. However, it seems from the
business plan that it has been made in a hurry and it lacks market research. Other than that, it
is not possible for the owners to make several decisions. For instance, the plan has aimed to
have minimum of 10% profit in the first month; however, this is not quite likely for any start
up business. It is possible that they may not have any profit in first two months. They should
be financially prepared for it as well, so having this assumption is not pragmatic at all.
Therefore, the other directors should not proceed with the existing plan, rather they need to
contribute more time to the plan for appropriate market research and make an authentic one.

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BUSINESS PLAN EVALUATION
Detailed plan
The plan seems to be more detailed whereas, at the same time, it lacks sufficient
information at some major points. The author has detailed the financial budget of the coffee
shop, but she has missed some major points such as the salary of the owners at the first
month. There are several sections of the plan where the author has detailed the information
more that it is required. However the author has included more technical details of the café
decoration in the plan while it was not at all required in the plan. They could include all such
details in the appendix because including them in the main plan would be very confusing for
the sponsors. Therefore, the directors should make necessary changes according to the market
research. The market research should be aimed to know about the market trend and targeting
a specific sector of audience. Therefore they should conduct a detailed market research,
otherwise they should not proceed with this plan.
Incomplete plan
The plan seems to be incomplete without identifying the basic sectors in any business.
A complete plan always includes a detailed discussion of the specific industry, industry trend
and target audience. These three major things are unavailable in this plan, so this can be
considered as an incomplete plan. Therefore, if the directors want to consider doing business
in the coffee industry, they need to complete the plan first doing sufficient market research.
Wrong conception about the market
It cannot be claimed that a business does not have any competition in the market.
Moreover, coffee industry is quite a popular industry in Australia. Therefore, the competition
is quite tough for any start up. However, the plan does not include any future plan for this
difficulty. Also, due to the lack of market research, the plan could not target a specific

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audience; therefore they do not have a transparent idea about the market situation. A
complete business plan should not be that way. Therefore before continuing with the plan, the
directors should consider doing more research and development.
Answer to question 3:
Apparently, it may seem that Andrew and Stephen are having issues with the business
plan because they had no contribution to the plan. Since, Jessie had more experience in the
business world; she has made the plan on her own. Along with that, she has claimed that she
will be running it and others will just contribute money in the business. Therefore, she seems
to be more autocratic, so other two partners do not feel comfortable with the plan. However,
the plan already has several issues as it does not include significant points for the business. It
lacks identifying the market trend and it has considered a huge amount of money to be
included initially for the coffee shop. Therefore, considering that the other directors are
justified to reject the plan. However the plan can be modified with appropriate market
research and the plan could be developed. As this industry has growing revenues by every
year, it has turned into a promising industry. Therefore, it can be said that even if it may seem
that Andrew and Stephen had reservations with this plan only due to the personal reasons, but
the real scenario does not support that. They may have issues with the plan becsue of the
genuine drawbacks of the plan.
Jessie could remodel the plan if they want to go for this business. The possible
solutions to this issue are listed below:
 Firstly, three of the directors should sit at one place and think about the future of their
business. It may be possible that the other two directors do not want to go for coffee
business at the very first place. They should have clear ideas regarding each other’s

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thoughts initially, so that there are not any personal issues amongst them and they
should proceed together.
 Secondly, this plan lacks a serious market research and development. It seems that the
plan has been made in a hurry and within a short span of time. It may happen because
it lacked resource as well. Therefore, three of the directors should be involved in the
plan while making the market research. They all should contribute in the plan and
make it mutually.
 The plan requires a unique quotient to make its way in the industry. They require
putting something unique in their plan which interests the sponsors and the target
customers in future at the same time. This will require more detailed research and
development as well.
 Jessie could also adopt the strategy of consulting with a third party organization for
the market research. There are several organizations in the market that help the start
up organization in their initial market research. Therefore, the directors can take help
from such companies.
 They should keep their entire personal ego aside while it comes of the professional
world. They should share their ideas and contribute both monetarily and physically to
make the plan successful.

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