Victoria University BPD3100: Coffee Bar Business Plan Report

This document presents a detailed business plan for a coffee bar, designed for a location near Victoria University's Footscray Park campus. The plan covers various aspects, including the business structure (partnership), products and menu (gourmet coffees, smoothies, pastries), market analysis (Australian coffee market, competitors), and geographic location. It outlines SMART objectives, competitive analysis, and target market segments (students, faculty, and corporate personnel). The report includes sales and marketing strategies, pricing, and operational plans (property, equipment). A financial plan is provided, including start-up capital requirements, profit and loss accounts, cash flow forecasts, and balance sheets. Risk analysis (strategic, operational, financial) and human resources considerations are also addressed, along with an organizational structure. References are provided. This business plan provides a comprehensive guide for the coffee bar venture.

Running head: APPLIED BUSINESS CHALLENGE
Applied Business Challenge
Name of the Student
Name of the University
Authors Note
Course ID

1APPLIED BUSINESS CHALLENGE
Table of Contents
Company Descriptions:..............................................................................................................2
Business structure:.....................................................................................................................2
Products and Menu:....................................................................................................................2
Industry and market operating:..................................................................................................2
Geographic location:..................................................................................................................3
SMART Objectives:...................................................................................................................3
Competition in the Market:........................................................................................................4
Target Market Segments:...........................................................................................................4
Sales and Marketing Plan:..........................................................................................................5
Sales and Marketing Smart Objectives:.................................................................................5
Pricing:...................................................................................................................................5
Promotion:..............................................................................................................................5
Operation Plan:...........................................................................................................................6
Property:.................................................................................................................................6
Equipment:.............................................................................................................................6
Financial Plan:............................................................................................................................7
Start-Up-Capital Requirement:..............................................................................................7
Financial Statements:.............................................................................................................8
Profit and Loss Account:........................................................................................................8
Cash Flow Forecast:...............................................................................................................9

2APPLIED BUSINESS CHALLENGE
Balance Sheet:......................................................................................................................10
Risk Analysis:..........................................................................................................................11
Human Resources:...................................................................................................................11
Organizational Structure:.....................................................................................................11
References:...............................................................................................................................13

3APPLIED BUSINESS CHALLENGE
Company Descriptions:
Espresso Cream Café would be a coffee house that would be located in the Footscray
Park Campus which is nearby the university. The café would be serving its customers the
gourmet coffees, espresso and drip coffee. The café would remain open from Monday to
Sunday from 8 am to 10 pm.
Business structure:
Espresso Cream Café would be completely owned by the owners under the
partnership form business structure.
Products and Menu:
Espresso Cream Café main products would be gourmet roasted coffees with variety of
flavours such as mocha, carmelicious, white mocha, brewed coffee and candy bar latte. To
complement the coffee there would be a line of smoothies such as strawberry, peach, wild
berry, mango, peach and lemonade. To further list down the items of simple menu line there
will be pastries that would be made available to customers from the outside suppliers, freshly
made and delivered on daily basis. The coffee shop would also offer pastry that might vary
on the basis of seasonality. Nevertheless, the main line of menus will be breads, cookies,
scones, muffins and rolls.
Industry and market operating:
Australia is regarded as one of the major coffee consuming nation in the oceanic
region. It is regarded as one of the few nations where the instantaneous drinking of coffee
surpasses the freshly prepared ones. Furthermore, nearly 75% of the annual coffee drinking in
Australia is instantaneous (Drucker 2014). The Australian coffee market is anticipated to see
a 3.5% CAGR during the estimated period. The industry in which Espresso Cream Café
operates comprises of around 20,000 stores which combines a yearly revenue of around $12

4APPLIED BUSINESS CHALLENGE
billion. Main companies include the Caribou Coffee, International Coffee & Tea, Peet’s
Coffee and Starbucks. The coffee market is focused with top 50 companies that produces
approximately 70 per cent of sales revenue. Coffee shops are treated as the portion of
specialty eatery industry that also comprises of retail outlets, concentrating in the foods
particularly bagels, donuts, cold coffee, ice cream and yogurt.
Geographic location:
The Espresso Cream Café would be located in the small local shopping precinct close
to the Victoria University campus. The property would be located at an easy six-minute drive
from the highway. The location comprises of population around 12,426 inside the five-mile
radius that has the median household earnings of around $122,956. The campus goers and
nearby corporate office personnel would be the potential customers.
SMART Objectives:
Inside the one month of business, the owners would be setting up the handmade cards
that would allow the company to benefit financially.
Specific: The business partners would be looking to target the new clients for their business.
These would specifically include the customers that are from university and corporate office-
goers.
Measurable: The business would be measuring its progress depending upon the number of
clients it brings while maintaining the present base of clients.
Attainable: The business partners would ask their present clients for their referrals, launch
the social media marketing campaign and linkage with local businesses.
Relevant: Adding up the additional amount of clients to its business would allow the
business partners to grow and increase their revenue.

5APPLIED BUSINESS CHALLENGE
Time-Based: Considering the time base the business looks forward to add new clients inside
the time span of two months.
Figure 1: Figure stating SMART objectives
(Source: As Created by Author)
Competition in the Market:
The research methodology is entirely dependent on the unique coffee shops and cafes
that are located in the metro area and excludes the large chains of franchises (Kirzner 2015).
Based on the findings it lay down some of the unique competitors that competes closely with
the Espresso Cream Café. The water-tower is the closest competitors relative to its location at
Victoria.
The Roman Lily and Homer’s Coffee House feature fairly since it has the identical
priced menus and menu offering with the noteworthy traditional American southern
influence. The Roman Lily is notably considered more downscale from Homer’s Coffee
House since it carries the traditional American southern influence. While another competitor
SpecificMeasurableAttainableRelevantTime-Based

6APPLIED BUSINESS CHALLENGE
that Espresso Cream Café faces is from Virginia’s décor and its menu offerings strikes
squarely among the cheap and expensive casual. Morning Glory Espresso is an expensive
dining establishment that features fine north Italian cuisine.
Target Market Segments:
Majority of the adult coffee consumers have stated that their lifelong habit
commenced during their young years. In fact, around 54% of the coffee consumers have
begun consuming coffee from the age of 13 to 19 years (Kuratko 2016). While another 22%
have reported their cravings for coffee began amid the age of 20 to 24 years. This implies that
around 76% of the adult coffee drinkers commenced drinking coffee by the time they were at
the age 24 years. So, in spite of the big sum of advertising and marketing is directed towards
the younger age groups, savvy coffee customer’s owners would not forget to meet the needs
of the customers and senior market.
Espresso Cream Café has chosen this segment as it believes that it would cater to the
customers that want obtain their regular cup of great tasting coffee under the relaxing
atmosphere. These kind of customers generally vary in age, even though the location of
coffee shop is close to the University campus which implies that majority of the customers
would be the college students and faculty members.
Sales and Marketing Plan:
Sales and Marketing Smart Objectives:
Espresso Cream Café marketing strategy would be focussed in obtaining the new
customers, retaining the current set of clients, getting the new consumers to devote more time
and return back on regular basis. The Smart Objectives of Espresso Cream Café is to set up a
loyal base of consumers which is the paramount for the business (Ansoff et al. 2018). This is

7APPLIED BUSINESS CHALLENGE
because the consumer core would not only produce majority of the sales but would also offer
favourable recommendations as well.
Espresso Cream Café would emphasis on the most moneymaking products sold. The
café would regularly draw the attention of customers towards most money-making products.
Espresso Cream Café would raise price to bolster the demand and brand image.
Pricing:
Espresso Cream Café would mainly use the competition based pricing. The café
would not use the coupons and discounts since it believes that majority of the valuable
customers demographic of regular coffee consumers is not influenced by the discount or
coupons.
Promotion:
Online Advertisement: Espresso Cream Café would advertise constantly on the popular
social media sites namely Facebook. In comparison to the traditional print advertisement, this
is regarded as the cost effective tactics which would enable the business to attain the
prospects in the highly targeted manner.
Website Advertisement: Espresso Cream Café would be developing a simple web address
that would lay down the basic business information regarding the menu and links to the
present above-mentioned social broadcasting channels.
Radio Advertisement: In the first six months of operations and in the busy holiday shopping
season, the business would be advertising on the local radio stations.

8APPLIED BUSINESS CHALLENGE
Operation Plan:
Property:
Espresso Cream Café would lease the property for the business because the company
is in its first year of operation would lease the property for a time period of five years.
Equipment:
There are certain forms of equipment that the business would be requiring and they
are as follows;
 Freezer
 Refrigerator
 Commercial oven
 Dish washer
 Coffee machine
 Microwave

9APPLIED BUSINESS CHALLENGE
Financial Plan:
Start-Up-Capital Requirement:

10APPLIED BUSINESS CHALLENGE
Financial Statements:
The financial statements that the owners are required to make is the income statement,
cash flow statement and balance sheet. The reason for preparing the financial statement is
that it offers the creditors and investors with numerous financial information that are useful in
assessing the financial performance of the business.

11APPLIED BUSINESS CHALLENGE
Profit and Loss Account:
Cash Flow Forecast:

12APPLIED BUSINESS CHALLENGE
Balance Sheet:

13APPLIED BUSINESS CHALLENGE
Risk Analysis:
Strategic Risk: The business may face strategic risks that may originate from inappropriate
business decisions (Morden 2016). For example, inadequate resource allocation or failure to
respond to changes may pose threat to business.
Operational Risks: Operational risk may arise due to failure in internal process. The
examples include risk originating from internal and external fraud.
People: Employees are regarded as the main source of risk for decline in production (Noe et
al. 2017). The examples include loss of production when the employees do not come to work
or leave the job.
Regulatory: The regulatory risks faced by business is changes in law or regulation which
effects the industry or business. The examples of risks include the changes in cost-structure.

14APPLIED BUSINESS CHALLENGE
Governance: The governance risks generally includes the organization’s coordinated
strategy for administering the wider issues of corporate governance and compliance with
respect to regulatory requirements. For instance, a compliance body may require the business
owners to manage new compliance on constant basis.
Financial: Financial risks includes the risks related with financing of company loans. The
may include the credit risks from the suppliers.
Human Resources:
Organizational Structure:
Espresso Cream Café is formed as the partnership form of business where each
partners would be liable up to the amount of capital contributed by them. A functional
structure would be followed where management would classify people based on their
functions to be performed within the business.

15APPLIED BUSINESS CHALLENGE
Figure 2: Organizational Structure
Source: (Noe et al. 2017)

16APPLIED BUSINESS CHALLENGE
References:
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting
strategic management. Springer.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago press.
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Morden, T., 2016. Principles of strategic management. Routledge.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.