Business Plan: The London Coffee House New Venture in London, UK

This document presents a comprehensive business plan for "The London Coffee House," a new coffee shop venture in London, UK. The plan details the business's introduction, value proposition, and business model, focusing on providing a soothing environment and high-quality products to customers. It includes a market analysis using PEST and SWOT frameworks, identifying target markets based on age and income. The plan outlines key partnerships, customer relationships, and revenue streams, along with cost structures and marketing strategies. It also addresses potential challenges and risks, offering insights into the competitive landscape and opportunities for innovation. The ultimate goal is to establish a loyal customer base and achieve sustainable growth in the competitive coffee industry.

Business Plan

Introduction to Business Idea
The London Coffee House will aim to offer a soothing and calm environment for coffee lovers.
The cafe will aim to offer best in quality products to their customers with a calm and comfortable
environment. The cafe will work in order to provide highly satisfactory services to the customers
along with the high quality snacks and beverages. The focus will be upon providing satisfaction
to customers in order to have a wide and loyal customer base for the business. The London
Coffee House will be owned by John Cyrus who has a long term experience in the hospitality
industry. The main products that the cafe will provide are lattes, cappuccinos, espressos and huge
options of snacks to choose from. The cafe will also aim to provide healthy snacks options to
choose from, for the health freaks. The cafe will be established in 2000 square feet area with
various colleges and offices in the acquaintance. The cafe will aim to provide a soothing
environment with comfortable seating and satisfactory customer service to their customers
(Blackwell, 2017).
Key partners: The
London
coffee
house
will be
owned by
John
Cyrus.
 Coffee
emporiu
m that
will
supply
premium
coffee
beans.
Key activities:
 Providing
a
soothing
environm
ent with
comforta
ble
seating
and
satisfacto
ry
customer
service to
their
customer
s.
Value
propositions:
 Aim to
provide
high quality
products
with good
and
specialised
services to
the
customers.
 Ultrafast
high speed
Wi-Fi that
will help
the students
and
Customer
relationships:
 Better
customer
service
 Customer
satisfactio
n
 Offers to
attract
customers
Customer
segments:
 Urban
customers
of UK.
 Age group
of 15
years and
more.
 Students
or
working
profession
als
belonging
to the
upper
middle

 Basic
essentials
like milk,
breads,
fruits,
soft
drinks,
vegetable
s will be
supplied
by local
vendors.
 Bakery
products
like
cookies,
muffins,
croissant
will be
supplied
by the
Murphy
bakers.
business
personnel’s
to
communica
te and work
upon their
activities.
 Choose
between
indoors and
outdoor
seating.
 Offer a
soothing
and calm
environmen
t for coffee
lovers.
class and
rich
backgroun
d.
Key resources:
 Financial
resources
 Human
resources
 Physical
resources
include
building,
furniture,
fixtures
Channels:
 A direct
distributio
n channel
wherein
the cafe
will
directly
sell the
eatables to
its
customers
from the
cafe.
 No
middlemen
for its
sales and
distributio
n channel.
Cost structure:
3. Fixed cost £1500
4. variable cost £600
Revenue streams:
 Revenues will be generated through sale
of products.
1.0 Nature of the business
The cafe, The London Coffee House belongs to coffee industry in a specific manner. London has
a huge population of millennials and baby boomers who can be considered very social and
mobile. The population of these generation aim to prefer coffee with friends which can prove to
be of benefit for the business. The concept of outing and hanging out with friends over coffee has

been in trend among the teenagers and youngsters.
Location of the business
The address of the business is 22, Park Street, London.
The location of the cafe is blessed with a high density population of youngster and working
professionals that will help the cafe to generate continuous revenues at a high pace. The people of
the area are capable enough to spend huge amount on snacks and coffee (Cadena and et.al.,
2020).
1.1 What is the business offering (product/ service etc.)?
The cafe will provide various kinds of snacks and beverages as mentioned below.
Beverages Iced tea, cappuccino, Espresso, Coffee, variety of fruit juices and
variety of milkshakes.
Soups Variety of normal soups, mixed soups
Sandwiches Variety of vegetable and chicken sandwiches
pizza Variety of pizzas to choose from with various toppings and crusts
1.2 How is the business adding value to its potential customers?
The London Coffee House will aim to offer a soothing and calm environment for coffee lovers.
The cafe will aim to offer best in quality products to their customers with a calm and comfortable
environment. The cafe will work in order to provide highly satisfactory services to the customers
along with the high quality snacks and beverages.
1.3 Why is the business different from other existing ones?
The London Coffee House will aim to offer youngsters and working professionals with
specialised marketing strategies. The Cafe will aim to provide high quality products with good

and specialised services to the customers. The cafe aims to provide variety of seating to their
customers. The cafe provides an option to the customers to choose between indoors and outdoors.
The cafe provides an ultra-fast high speed Wi-Fi that will help the students and business
personnels to communicate and work upon their activities.
2.0 Market analysis
The market for cafes in the UK is most likely to grow as the people of UK are quite fond of
coffee. The market analysis is performed with the help of PEST analysis.
PEST Analysis
The PEST analysis allows to analyse the various external factors such as political factors,
economical factors, social factors and technological factors that may affect the functioning and
operations of the business. The PEST analysis of The London Coffee House is explained below-
Political factors
The political factors affecting the business of The London Coffee House are as follows-
 The uncertain situation over the Brexit impact on consumer and market behaviour which
is a political factor affecting the business of the organization.
 The free trade agreements can impact the business of the London Coffee House which
may lead to increase in the foreign competitors of the business.
 The increasing business rates might lead to the situation of unaffordable property costs for
the business.
 The political factors may increase the minimum wages and zero hour contracts of the
organization (Ferreira and Pinheiro, 2018).
 The labour availability and immigration of the business might decrease depending upon
the political factors.
 The instability in the political environment of UK will affect the businesses of the region.
Economic factors
The economic factors that might affect the business of the organization are discussed below-

 The market of the UK has been showing consistent uncertainty which will affect the
businesses of the region.
 The Economic KPI after the Brexit votes have resulted in being more pessimistic than
expected.
 The employment ratio of the region also affects the bushiness of the region. The people
with employment tend to spend more in comparison to the unemployed individuals.
 The value of the currency has decreased by 10 to 15% which has led to rise in the prices
of food and fuel (Genadinik, 2019).
Social factors
The social factors that might affect the business of the organization are discussed below-
 The changing trends in the business have forced the businesses to shift to the online and
digital modes of doing businesses.
 The brands which are highly trustable and relevant tend to be less affected by the
economic factors.
 In order to meet with the requirements of social factors the cafes need to cope with the
dynamics through the invention that will allow the business to perform well.
 The personalised nutrition among the customers is also a social factor that will affect the
performance of the business (HAN and Kang 2020).
Technological factors
The technological factors that might affect the business of the organization are discussed below-
 The technological factor is mainly dependent upon the cell phones in order to co-operate
with the running chores.
 The exposure of food services to the technology based organizations can also affect the
business of the various organizations.
 The social media has led to influencing of various brands and this may also affect the
business of The London Coffee House.
 The digital and online platforms tend to offer growth for the business organizations as it

helps in expansion (Hanák and Grežo, 2020).
SWOT analysis
The SWOT analysis helps in analysing the strengths, weaknesses, opportunities and threats of the
cafe. The SWOT analysis will help the business to ascertain what qualities the business possesses
to offer their customers. The SWOT analysis of The London Coffee House is explained below-
STRENGTHS WEAKNESSES
 The London Coffee House aims to
provide high service levels to their
customers which will turn out as
strength for the business.
 The business will focus upon effective
sales and service culture.
 The Business of London Coffee House
will be based upon the maintenance of
good corporate culture.
 The highly motivated staff will help the
organization to increase its productivity
and further providing customer
satisfaction which can be considered as
strength (Hopp and Greene, 2018).
 The high customer satisfaction will
help the organization to generate a wide
and loyal customer base.
 The soothing and calm atmosphere of
the cafe will act as a strength for the
business where people will look to
spend more time.
 The cafe is under the sole
proprietorship business and thus the
business is more likely to lack funds.
 The business will lack modes to
generate publicity in comparison to the
other big food chains who are the
competitors.
 The cafe will have competitors like
McDonald's, Cafe Coffee Day,
Dunkins, etc. which are quite famous
and huge food chains.
 The competitors are well established
and are more likely to disturb the
market share of the cafe.
 The cafe might suffer due to low brand
awareness in the initial days of the
business.
 The burden of operational process of
the business might be on a single
person i.e. the entrepreneur.

 The cafe is populated with the
academic institutions as well as huge
office complexes in acquaintance
which tends to have a good footfall for
the cafe and further lead to better
revenues.
OPPORTUNITIES THREATS
 The business of the London Coffee
House can look upon the opportunities
to develop a customer relation culture
in the business.
 The business can look upon the
opportunities for innovation in the
business which will help the business to
have a competitive advantage in the
market.
 The business must always look for
modes to develop and maintain
customer relations which will help the
business to acquire a loyal customer
base.
 The business must look for various
opportunities wherein the business can
introduce various offers to attract the
customers toward the organization.
 The threat for the organization can be
the increasing number of competitors in
the market (Hopp and et.al., 2018).
 The loyal customers base of the well-
established huge competitors will be a
threat as it will be difficult for the
business to attract them towards their
business.
 The customers getting price sensitive
will be a threat for the business as at
that point of time the customers will
decrease their expenditures.
 The lower switching cost will also be a
threat for the business as then, the
customers will easily switch to other
cafes.
 The changes at a very fast pace in the
coffee industry is more likely to act as
a threat for the business.
2.1 What is the target market?

The segmentation of the market can be based upon various factors. The factors for segmentation
are gender, age, behavioural, geographical and income. The factors that will be focussed by The
London Coffee House for the segmentation are Income as well as age. The cafe will focus upon
the urban customers of UK that will fall under the age group of 15 years and more and either are
students or working professionals. The main focus will be on providing customer satisfaction to
the target market as per the customer needs that will help the business to prosper.
The target market of The London Coffee House will be based upon the income level of
the people as well. The Cafe will target upon the groups based on their income levels as only then
the business will be able to meet the expenses. It is essential for the organization to focus upon
the customers based on their capacity of spending. The target market of the cafe will be the
customers belonging to the upper middle class and rich background (DeNoble and Zoller, 2017).
2.2 What marketing and distribution channels will the business use?
The cafe will follow a direct distribution channel wherein the cafe will directly sell the eatables to
its customers from the cafe. The cafe will deploy no middlemen for its sales and distribution
channel.
2.3 Who are the competitors?
The area where the cafe is established has few food chains like McDonald's, Dunkin and
Cafe Coffee Day in the acquaintance. The outlets of the competitor food chains do not offer patio
seating for their customers and also lack parking facilities.
3.0 Supply chain, operations and logistics
Supply chain

The London Coffee House has got into an agreement with the Coffee emporium that will supply
premium coffee beans that will be supplied to the business in two days of shipping period. The
basic essentials like milk, breads, fruits, soft drinks, vegetables will be supplied by local vendors
on a daily basis. The bakery products like cookies, muffins, croissant will be supplied by the
Murphy bakers. The payment will be done to all the suppliers on weekly basis. As an initiative of
Corporate Social responsibility the business will focus upon minimal wastage and use of
recyclable products in the business (Tokarski, Tokarski and Wójcik, 2017).
Operations
The operations plan consists of various physical requirements of the business. The
physical requirements of a business include retail space, inventory, supply needs, labour,
equipment, etc. The facilities of the London House Cafe will include a retail outlet of 2000 square
feet at the park street, London. The ambience of the cafe will include indoor as well as outdoor
seating with well-developed and well maintained modern facilities. The cafe will have a parking
area for the customers of the organization. The cafe is planned to be held on lease for three years
at the cost of 3000 pounds per month. The building owner will be responsible for the pest
control, garbage collection, security and recycling. The utilities such as water, gas, electricity,
phone and internet need to be acquired by the entrepreneur to operate the business in the smooth
way. The cafe needs to setup a kitchen as well as a wash room too for the proper functioning of
the business (McKenzie and Sansone, 2019).
There are various equipment that need to be purchased by the business such as utensils, cutlery,
commercial grade espresso machine and an espresso grinder. The various equipments that need to
be possessed by the business organization that can be acquired on lease are glass door fridges,
dishwasher, storage bins and microwave.

4.0 Human Resource Planning
The human resource planning is a very crucial task for every business. The business needs to
acquire human resource that has competent skills and works with full potential in order to
increase the productivity.
4.1 Who are the business owners?
The London Coffee House will be owned by John Cyrus under the sole proprietorship business
structure. The business will be owned and operated by John Cyrus solely.
4.2 What is the entrepreneurial team’s background?
John Cyrus is launching a new business in the hospitality industry as a cafe named The London
Coffee House. The entrepreneur has been working in the industry since 5 years and thus has a
huge experience in the industry (Watson and McGowan, 2019).
4.3 What staff does the business need?
Staff Required
The cafe will require four full time and four-part time baristas who will be provided with
remuneration in accordance with the industry standard wages. The employees will be provided
with suitable physical training which includes optimistic facial expressions, manners, postures,
communication skills and operation of the equipment’s used by the business. The employees will
be provided with skill training which includes acquainting with the products, interior decoration,
coffee culture, cooperation, leadership and avoiding prejudices.
5.0 Legal and Regulatory Requirements

The operation of business that deals in cafe require to sell, prepare and store various food items
and thus it is important for the business to register with the local environmental health
department. They will conduct an inspection of the premises if the business organization is
complying with the various food, safety and hygiene regulations. The business will be required to
hold various licenses as per their type of business and the products they are offering to the
customers. The detail of licenses are as follows-
 a premise license from the local licensing authority if the organization is dealing in sale of
alcohol or if the organization is supplying the food during the late hours i.e. between 11
pm and 5 am.
 A personal license is necessary where the business needs to assign a responsible person
who will monitor the operational activities of the business. The license is issues by local
licensing authority.
 A license needs to get issued from PPL PRS in case the cafes use copyright music for the
background music at the place to make the environment soothing or enthusiastic in order
to meet the customer needs.
 Under the COVID situation, the organizations need to comply with COVID protocols
which states that social distancing need to be maintained and place should be well
sanitised.
6.0 Risks and challenges
The business of cafe is surrounded by various risks. These risks can hinder the business of the the
cafe. The risks are-
 risk of inappropriate location or high rent can hinder the business.
 Poor customer service and inappropriate management can out the revenues and profit of
the organization at risk (Matović, 2020).
 The risk of return on Investment can lead to a setback in the profits of the organization
that are mandatory to be investigated.

7.0 Finance
Finance is a crucial part of the business as it is important for the business to gather finances in
order to operate the business smoothly. The business needs to keep a track of its cash inflows and
cash outflows as well.
7.1 What are the company’s financial needs?
The financial requirements of London Coffee House are illustrated below:
 Selling price per unit = £50.
 Equipment’s = £ 2000.
 Fixed cost = £ 1500.
 Furniture = £ 1500.
 Premises (will be acquired on rent) =
▪ Security deposit = £ 100.
▪ Advance rent for 1 month = £ 100.
 Estimated cost of sales = £10 per unit.
 Variable cost = £3 per unit.
It has been forecasted after analysation of the market trends and others factors too that might
impact the sales of the London coffee house where it can successfully generate the sale which is
equivalent to 200 units per month. On the basis of this forecasting, the cost statement is illustrated
below-

7.2 How long until break-even?
Break-even point = Fixed cost/ (selling point – variable cost)
= 1500/(50-3) = 31.91 units or 32 units (approx.)
Profitability analysis= From the above calculation, it is stated that, company is earning profit on
168 units (200-32). Therefore, profit is earned on these units only.
Net profit margin for the organisation = net profit / sales*100
= (5900/10000)*100 = 59%
7.3 How is the business going to be funded?
The business will be funded through the savings of the owners that is referred as the owner's
funds. The rest of the funds will be raised by the organization through bank loans.
8.0 Key Milestones

9.0 Appendices
Cash flow 2
2nd year 3rd year 4th year 5th year
Receipts
Cash sales 8500 10500 12500 15500
Collections from Product sales 20000 25000 35000 40000
New equity inflow - DIANA
Loans received - FAMILY
Other
Total Receipts 28500 35500 47500 55500
Payments
Cash purchases initial stock/products 2500 2000 1500 3500
Fixture and Fittings 4000 3500 2500 3000
Salaries and wages 1500 1500 1500 1500
Employee benefits 1800 1800 1800 1800
Payroll taxes at 20% 1700 1750 1900 2000

Rent (deposit of 1000 and 250/m) 1850 1850 1850 1850
Utiltities 250 250 250 250
Repairs and maintenance 500 400 300 200
Insurance 1500 1500 1500 1500
Travel 2000 1500 2500 3000
Telephone [phone]
Postage 150 150 150 150
Office supplies 800 800 800 800
Advertising 1000 1000 1000 1200
Marketing/promotion 2500 5000 2800 3000
Professional fees - Lawyers 500 500 500 500
Loan repayments (7000 at 12% APR) 840 840 840 840
Tax payments 1050 1050 1050 1050
Total Payments 24890 25840 23190 26590
Cash flow Surplus/Deficit (-) 3610 9660 24310 28910
Cash flow forecast

Cash Flow Forecast
- 12 Months
Month: Pre-
Start
1 2 3 4 5 6 7 8 9 10 11 12 Totals
Receipts
Cash sales 15,
400
15,
400
15,
400
15,
400
15,
400
15,4
00
15,4
00
15,4
00
15,4
00
15,4
00
15,4
00
15,4
00
184,800
.00
Collections from
Product sales
5,6
63
5,6
63
5,6
63
5,6
63
5,6
63
5,66
3
5,66
3
5,66
3
5,66
3
5,66
3
5,66
3
5,66
3 67,956
New equity inflow
- DIANA 4,000 4,000
Loans received -
FAMILY
15,00
0 15,000
Other 0
Total Receipts 19,00
0
21,
063
21,
063
21,
063
21,
063
21,
063
21,0
63
21,0
63
21,0
63
21,0
63
21,0
63
21,0
63
21,0
63
271,75
6
Payments
Cash purchases
initial stock/products 2,155 22,5
00
25,0
00
49,655.
00
Fixture and Fittings 950 950.00
Salaries and wages 500 500 500 500 500 500 500 500 500 500 500 500 6,000
Employee benefits 0
Payroll taxes at 450 450 450 450 450 450 450 450 450 450 450 450 5,400

20%
Rent (deposit of
1000 and 250/m) 1,200 150 150 150 150 150 150 150 150 150 150 150 150 3,000
Utiltities 75 75 75 75 75 75 75 75 75 75 75 75 900
Repairs and
maintenance 30 15 15 15 15 15 15 15 15 15 15 15 195
Insurance 50 45 45 45 45 45 45 45 45 45 45 45 545
Travel 1,400 105 300 300 300 300 300 300 300 300 300 300 300 4,805
Telephone [phone] 28 28 28 28 28 333
Postage 25 30 30 30 30 30 30 30 30 30 30 30 355
Office supplies 700 115 115 115 115 115 115 115 115 115 115 115 115 2,080
Advertising 25 25 25 25 25 25 25 25 25 25 25 25 300
Marketing/
promotion 1,500 65 65 65 65 65 65 65 65 65 65 65 65 2,280
Professional fees -
Lawyers 190 190
Training and
development 200 125 125 450
Bank charges 25 23 23 23 23 23 23 23 23 23 23 23 23 295
Miscellaneous 280 165 165 165 165 165 165 165 165 165 165 165 165 2,260
Owner's drawings 500 450 450 450 450 450 450 450 450 450 450 450 450 5,900
Loan repayments
(7000 at 12% APR) 653 653 653 653 653 653 653 653 653 653 653 653 7,836
Tax payments 250 212 212 212 212 212 212 212 212 212 212 212 212 2,794
Capital purchases 0

Other 0
Total Payments 9,350 3,1
18
3,3
01
3,3
01
3,3
01
3,3
01
25,9
26
3,30
1
3,30
1
3,30
1
3,30
1
3,30
1
28,4
26
96,523.
00
Cashflow
Surplus/Deficit (-) 9,650 17,
946
17,
763
17,
763
17,
763
17,
763
(4,8
63)
17,7
63
17,7
63
17,7
63
17,7
63
17,7
63
(7,36
3)
175,233
.00
Opening Cash
Balance 0 9,6
50
27,
596
45,
358
63,
121
80,
883
98,6
46
93,7
83
111,
546
129,
308
147,
071
164,
833
182,
596
Closing Cash
Balance 9,650 27,
596
45,
358
63,
121
80,
883
98,
646
93,7
83
111,
546
129,
308
147,
071
164,
833
182,
596
175,
233

REFERENCES
Books and journal
Blackwell, E., 2017. How to prepare a business plan: your guide to creating an excellent
strategy, forecasting your finances and producing a persuasive plan. Kogan Page
Publishers.
Cadena, M. A. T. and et.al., 2020. Neutrosophic AHP in the analysis of Business Plan for the
company Rioandes bus tours. Neutrosophic Sets and Systems. 34. p.16.
DeNoble, A. F. and Zoller, T. D., 2017. Is the business plan really dead and should it be?: a case
for the lean start-up approach. In The Great Debates in Entrepreneurship. Emerald
Publishing Limited.
Ferreira, F. M. and Pinheiro, C. R. M. S., 2018. Circular Business Plan: entrepreneurship teaching
instrument and development of the entrepreneurial profile. Gestao & Producao.25.
pp.854-865.
Genadinik, A., 2019. Business plan template and example: how to write a business plan:
Business planning made simple. Alex Genadinik.
HAN, S. and Kang, E., 2020. The Marketing Strategy to Stimulate Customer's Interest in Art-
Gallery Business Plan. The Journal of Distribution Science. 18(8). pp.47-54.
Hanák, R. and Grežo, M., 2020. The effect of entrepreneurial experience on the quality of a
business plan proposal in applying for angel investment. International Journal of
Entrepreneurial Venturing, 12(6). pp.617-647.
Hopp, C. and et.al., 2018. Revisiting the influence of institutional forces on the written business
plan: a replication study. Management Review Quarterly. 68(4). pp.361-398.
Hopp, C. and Greene, F.J., 2018. In pursuit of time: Business plan sequencing, duration and
intraentrainment effects on new venture viability. Journal of Management
Studies. 55(2). pp.320-351.
Matović, I. M., 2020, June. Evolution of the Business Plan in Contemporary Business.
In Proceedings of the 17th International RAIS Conference on Social Sciences and
Humanities (pp. 71-76). Scientia Moralitas Research Institute.
McKenzie, D. and Sansone, D., 2019. Predicting entrepreneurial success is hard: Evidence from a
business plan competition in Nigeria. Journal of Development Economics. 141.
p.102369.
Tokarski, A., Tokarski, M. and Wójcik, J., 2017. The possibility of using the business model
canvas in the establishment of an operator's business plan. Torun Business
Review. 16(4). pp.17-31.
Watson, K. and McGowan, P., 2019. Emergent perspectives toward the business plan among
nascent entrepreneur start-up competition participants. Journal of Small Business and
Enterprise Development.
Cafes and Coffee shops in the UK, 2021. [Online] Available Through:
<https://www.ibisworld.com/united-kingdom/market-research-reports/cafes-coffee-shops-

industry/>