Perth Coffee Shop Business Idea: Selection and Evaluation Project

This project explores the development of a coffee shop business idea, focusing on idea selection and evaluation within the context of the Perth, Australia market. The project begins with an introduction to the importance of idea evaluation and analysis in organizations, followed by the specific case of establishing a coffee shop. An idea evaluation framework is developed, analyzing factors such as market analysis, customer impact, and financial strength. The project utilizes the POEM framework (Product, Opportunity, Evaluation, and Market) for evaluating the business idea, including customer, product, and financial considerations. The selection of the coffee shop idea is justified based on high coffee consumption rates, a ready market, and the availability of required skills. The project also considers improvements to the business idea, including brainstorming product issues, reviewing customer feedback, and involving suppliers and business partners. A revised business canvas model is presented, along with cash flow projections under best and worst-case scenarios. The project concludes with a summary of the idea development and implementation process, emphasizing the importance of analyzing various phenomena in the business environment. The project uses references to support the analysis.

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Idea Selection
Student Name
Institutional Affiliation

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Project Management
Introduction
Organizations are increasingly exploring various products and services, aiming to come
up with business ideas. The selection of the most viable business idea requires creative processes
that include idea evaluation and analysis. The evaluation processes seek to develop a decision-
making framework that will guarantee success for the chosen idea. In this regard, the paper will
explore coffee shop establishment idea. By so doing, it will develop an idea and evaluation
framework that can be utilized in comparing elements that will lead to implementing the idea in
the most profitable.
Idea Evaluation
The establishment of coffee shop in Perth, Australia, as an idea is immensely contributed
by evaluation of several factors surrounding the chosen location. It has been enhanced by a keen
analysis of the market and the existing industry. Intuitively, the most prolific factor based on the
increased coffee consumption in the area making the idea likely to be profitable. Among other
factors, customer impacts and associated benefits have been critical in the evaluation of the
business idea (Buisonje et al., 2017). However, detailed and focused criteria ought to be
implanted that will thoroughly investigate existing phenomena that is affect a business idea.
The foundation of a given business idea is based on the ability to build a product that will
serve the needs of the customers. As a result, based on the findings, customers have been
thoroughly analyzed as a way of ensuring that the product market is intact. Nevertheless, a
business idea evaluation demands an all-round conceptual framework that will make sure that all
vital elements within a given location are well analyzed to achieve the desired success. In this

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case, problem identification is an extensive action that incorporates analysis of several of the
forces that include:
 Clients
 Actual Product
 Timing
 Competition
 Financial strength
The above five forces are vital in any given business idea evaluation framework. Reasonable
business evaluation framework implements both internal and external elements. In this regard, a
product opportunity evaluation for starts-ups and product managers (POEM) framework would
be beneficial. The framework provides an elaborative structure and guidance to the identification
of new opportunities for products in the chosen market.
POEM Framework
Customer Product Finance
 Customers ought to be
clearly indefinable
 Possibility of market
segmentation
 Clients accessibility
 Clients loyalty
 Focused and tight
niche
 Market-to-team fit
 Cash flow
requirements
 Reasonable margins
 Demand and supply
constraints
 Sunk costs
Timing Competition
 Latest competition  Fitness in competition

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surge
 Aligment of secular
trends
 Commoditization
signs
 Entry barriers
 Defendable position
 Limited competitors
Idea Selection
The establishment of a coffee shop is a factor of environmental analysis. In the first
place, coffee consumption rate is high and thus, is an automatic assurance of ready market for the
coffee. A successful business idea has a strong backing of customers. Loyal customers are
crucial to the development of most businesses (Rietzschel, Nijstad & Stroebe, 2010). It is
through sales that a company can finance its operations costs. The availability of critical partners,
alliances and other associated firms means that the coffee shop is assured of loyal customers who
are essential in the coffee shop take-off and eventual establishment.
Idea selection is further facilitated by the few skills that are required to execute the idea.
Coffee preparation and distribution is technically easier. The processes are cheap and quick,
which makes the business more profitable and doable. The scenario translates to low investments
in preparation equipment and recruiting workers. The evaluation of a business idea is a
component of many elements (Gabriel, 2016). Notably, the availability of skills plays a critical

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role in facilitating the success of the concept at hand. As a result, because of the low level of
skills required in implementing the idea, coffee shop objectively fits in the criteria.
Furthermore, the ability to innovate coffee products makes the coffee shop idea to be
popular. Coffee users like coffee products in many forms, such as iced coffee, roasted and beer
coffee among others. The diversification of coffee products along with its high demand makes
the idea attractive. In most cases, product innovation sometimes could be uncertain and a risky
process in situations when there has been shallow customer and market analysis (Stevanovic,
Marjanovic, & Storga, 2015). Product innovation is a product of cooperation between different
people that are concerned with research ad development on matters relating to the idea in place.
Finally, the choice of the business idea is enhanced by the growth in the industry. The
location identified is endowed with established coffee shops that operate with unique brands that
serve their client's interests. While this could create competition, the coffee shop hopes to
increase the size of their mugs to an optimized level in a way that will build product
differentiation and facilitate entry to the occupied markets. The idea will allow the
implementation of customer-oriented pricing strategies without affecting the financial strength of
the owners (Davcik & Sharma, 2015). Moreover, it offers a platform the ease with which the
idea provides an opportunity to create a long-lasting brand image and customer loyalty. The
scenario will be achieved by engaging in research and development to understand different
forces within the ground that will guide the coffee shop actions.
Improvements to be made on the Selected Business Idea
A successful business idea is a component of research and development. In this regard,
the idea must be followed by a severe information gathering that will highlight existing

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weaknesses and possible gaps that need to be focused upon before the implementation of the
concept by the investors. Among the gaps and improvements that could be addressed include:
Brainstorming Product Issues
The most critical aspect of idea selection is generation of profit. Usually, the concerned
team members tend to focus on the areas that could enhance the survival of the business. As
such, it is crucial to highlight the issues that are likely to affect the viability of the selected
business (Cabage, 2019). For instance, coffee is known to have harmful effects on people with
health conditions and people of certain age brackets. Investors must in a position to understand
the issues related to the product so that they can make adjustments before the actual
implementation of the idea.
Reviewing of Customer Complaint Feedback from the Industry
Before the pitching of the idea to the investors, the team should consider complaint
records from other existing shops. The gap will enable the investors to come up with attractive
packages and range to penetrate the market quickly. The move will also enhance the
modification of the product with the aim of promoting stable brand image.
The involvement of Suppliers and Business Partners
By involving suppliers, the team would be in a position to know more about the product
information. The knowledge will be necessary adjustments and possibilities of improving them
in the long run especially during peak and off-peak season.
Revised Business Canvas Model
Key Partners
Investing in
Key Activities
Networking and
Value Propositions
Interaction with
Customer
Relationships
Customer
Segments

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business
partners, firms
and suppliers
for the purpose
of gaining
more
knowledge
ding more
research and
development
campaigns.
Implementation
of strategies
aimed at
improving brand
image and
reduction of
technicalities.
Development of
efficient
distribution
channels.
diverse customers to
target them, their
needs with the aim
of making them
potential clients
Receiving and
sorting
recommendations
from suppliers,
business partners,
and industries.
Rewards to loyal
clients as a way of
product promotion.
A customized and
personalized service
delivery to the
clients.
Efficient skills
incorporation and
Facilitating
personalized
and one on one
modes of
communication
.
Implementation
of the use of
mass media and
social media
marketing.
The
customers
include
existing
customers in
the market
that must be
pouched
through
product
differentiation
and vigorous
pricing
strategies.
Customers of
the diverse
backgrounds
which include
existing
market,
merchants,
and primary
clients for the
Key Resources
Raw materials
are likely to be
sorted by
Channels
Distribution
networks ought
to be customer-

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developing a
good working
relationship with
suppliers and
other business
associates in the
food and
beverage
industry.
Investing heavily
on transportation
Storage Facilities
Human Resource
and Machinery.
development of
initiatives to enhance
increased brand
image.
oriented that
favor personal
selling. This
will enhance
the collection
of feedback
from the
customers and
attending to
their concerns
company.
Cost Structure
Fees connected to the retail chain store management of the
coffee shop.
The charges associated with the registration.
Revenue Streams
Advertising policies and
implementations.
Bulk buying form the respective
suppliers will facilitate award of
trade discounts and cemented

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Development and Maintenance Charges
Employee fees
Production and Cost of Operations
relationships.
Coffee Shop Cashflow Projections (Estimates in dollars)
Year One Year Two
Best Case Scenario Worst Case Scenario
Cash at the start 7500 -4,770
Total Cash in 9500 6,650
Total Cash out 11,160 10,160
Totals 5,840 -8,380
The cash flow projection shows the position of the coffee shop in two years. In the best
scenario, the shop experiences good sales, and perhaps, the owners could be in best position in
collecting unpaid receivables, management of costs and probably, bringing in more external
sales. By the end of the year, the shop is highly profitable. On the other hand, the shop starts with
a loan. Within the year, the sales are not good and eventually end up in a negative balance at the
end of the year. The negative balance could be as a result slow sales, changes in the season
where customers do not need coffee and increased cost of operations. However, the scenario can
be changed by developing a workable plan for loan repayment and cost and expenses
management.
Conclusion

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The process of idea development and implementation is a lengthy process that involves
the analysis of various phenomenon in the proposed business environment. Idea evaluation is an
integral step which provides the ground through which the viability can be analyzed. In this case,
the idea of the coffee establishment has been well evaluated. Furthermore, the business canvass
model has been revised to incorporate the changes that crop upon idea evaluation. Finally, the
paper has provided cash flow projections in case of idea implementation both in worst and best-
case scenarios.
References
Buisonje, D. R., Ritter, S. M., de Bruin, S., Horst, J. M. L., & Meeldijk, A. (2017). Facilitating
creative idea selection: The combined effects of self-affirmation, promotion focus, and
positive affect. Creativity Research Journal, 29(2), 174-181.

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Cabage, N. (2019). A Framework for Evaluating Market Opportunity. Retrieved 6 October 2019,
from https://www.mindtheproduct.com/poem-framework/
Davcik, N. S., & Sharma, P. (2015). Impact of Product Differentiation, Marketing Investments,
and Brand Equity on Pricing Strategies: A brand level Investigation. European Journal
of Marketing, 49(5/6), 760-781.
Gabriel, A., Camargo, M., Monticolo, D., Boly, V., & Bourgault, M. (2016). Improving the idea
selection process in creative workshops through contextualization. Journal of cleaner
production, 135, 1503-1513.
Rietzschel, E. F., Nijstad, B. A., & Stroebe, W. (2010). The selection of Creative Ideas after
Individual Idea Generation: Choosing between creativity and impact. British journal of
psychology, 101(1), 47-68.
Stevanovic, M., Marjanovic, D., & Storga, M. (2015). A Model of Idea Evaluation and Selection
for Product Innovation. In DS 80-8 Proceedings of the 20th International Conference on
Engineering Design (ICED 15) Vol 8: Innovation and Creativity, Milan, Italy, 27-30.07.
15 (pp. 193-202).