Business Plan for Yellow Door Renewable Energy Plant

Executive Summary

Yumi Coffee Café is going to be one of the best hang out the place for the lovers of various coffee flavors. We are the last step in developing one of the most affordable, convenient, and comfortable cafés which will majorly deal with serving delicious snacks and high-quality coffee. Our main aim is to be able to hit 99% customer return target by satisfying the needs of the first time customers in the market. To achieve the objective, we are going to set up the business in one of the most convenient site and through the offering of high-quality customer service experience.

Food industries are gaining a lot of boost due to all-time high demand (Herschdoerfer, 2012). It is not easy for one to stay without food for some days and so any person walking needs a place to have some get together meetings with coffee or take coffee with some snacks to treat hunger. Some come to the coffee shops to boost their time and so it is one of the reasons for increasing demand for coffee products.

I have more than five years experience in handling food-related issues and undertaking food service programs which enabled my team and me to work from an experienced point of view. To meet the local customer needs and the favorable flavors, we are going to offer popular coffee products such as lattes, cappuccinos, espressos and various types of snacks.To boost the customer’s health, it is imperative that we also offer the necessary health alternatives for coffee and snacks.

The primary customer base for our business is the nearby colleges such as technical schools, nursing schools, and office workers. We provide a considerable amount of sitting space which will accommodate the entire population of students and office workers. The fact that much of our customers are the young generation, we have to implement the most attractive customer’s services and the most trendy vibes for these customers.

We acknowledge the existence of the major players in the industry such as McDonald’s and Dunkin coffee, but the competition will be offset by reducing prices (Hatten, 2015). We can offer our products at a much lower price than the standard machine-made coffee sold by our main competitors. We will launch aggressive marketing to ensure that the message of affordable and smooth coffee reaches the ears of the students and another type of potential customers. The design and the general environment of our shops should be highly appealing to the customers and esteemed coffee consumers.

The physical operation location has 3, 000 square feet which can enable easy partitioning and requires less time for renovations. Space had not attracted any serious coffee seller or any other businessman, and that might be the reason for being cheap. We project the total revenue to hit $250,000 by the end of three years through upward trend while the net profits should hit, $100, 000by the end of the same years. The main startup costs will be taken by equipment, renovations, and lease and furniture costs. I already have $100, 000 in cash while the remaining will come from the commercial loans

Management Expertise

The management of the business will involve tow people. I will take the role of the director while at the same time operating the business as the manager. This idea is aimed at reducing the cost incurred in management. I will only employ three supervisors who will actively be involved in overseeing, kitchen, service and the cashier’s section. I have an experience of more than five years in the food industry and a Bachelors degree in food, nutrition, and diet ethics. The course gave me the basic knowledge on how to deal with various challenges in the food industry while at the same time maximizing the profits in the industry through quality food and courteous service. The three supervisors have the managerial tasks, and they also have to depict the highest qualities of professionals in the sector. The person on service should have more than one year experience as a waiter in the coffee shop or any other food business. The supervisor in charge of the kitchen should depict exemplary skills in cooking and food production, with a certificate in any food-related field and one year experience. The cashier should have unmatched experience in accounting and finance management.

Concept

I will be establishing the state of the art coffee café, which serves the best quality coffee brands and nutritious snacks in Abu Dhabi city. The business will utilize the expertise of the management team to serve food in the most professional way accepted in the city. We are not going to utilize any sophisticated machines in the preparation of coffee or cakes, but the chefs will use the available tools which can produce high quality and natural coffee. The production will be in small quantities to ensure high quality is maintained while serving a large number of customers through series of coffee preparation. To reach the market and to ensure that the business gets an edge over others, aggressive marketing will be launched through posters, price mix technique, and social media campaign, since the target market segment is made up of the younger generation of college students. (Armstrong et al., 2015) We shall launch social media website links in the most ingenious manner to promote the customers.

Methodology

To come up with the most effective business plan, there are some preliminary steps which should be taken either by the owners of the business or an agency tasked with coming up with a clear plan. The steps implemented in coming up with this plan include management interviews, strategic market research, filling in checkpoint agreement document, additional research on the field, draft, review, and revision, and lastly packaging and finalization (Stutely, 2012). The first step of management interviews is aimed at collecting relevant information regarding the management of coffee cafes and other food industries from the experienced management teams from other food companies. The market research will ensure that the proper understanding of market channels is ascertained. The third step of development takes into account the agreement of various stakeholders in the plan. About our plan, the agreement is between the owner of the premise and the business owner who is me. The additional research enables us to predict the financial stability of the industry, the market mix to apply and the most effective communication strategy that we can implement. After the research, the next step is to produce the draft of deliverables which forms the basis for review and revision in case of any errors. The final step is the production of clear, clean and finalized document which we can easily follow in implementation.

Objectives

Some of the business objectives include:

• To produce high-quality coffee
• To hit a target of $700 sales per day
• To be the leading producer of the natural brand of coffee

Market

The business aims at the local population to provide an adequate market for the products. It is going to be the best joint for the students in colleges and small office people in the town. Nowadays the consumer behaviors are constantly shifting providing new opportunities in the market (Kumar, & Steenkamp, 2013). We target customers of between 18 to 40 years who have demonstrated a keen attachment to coffee. It is therefore imperative to define how to direct the entire group into our café.

Company Structure

Yumi Coffee is a limited company incorporated into the state laws of UAE. Since the business is new, the company has only one director who is also the CEO since it is a private company. The company at the beginning will have 600 shares 300 of which will be held by the director. As the business grows, new shareholders will be allowed in and the remaining shares will be distributed. As the company grows, there is projection to have a functional organizational structure with one director, employed CEO, Managers and the junior staff. It will only be possible after expansion to accommodate all of the three major positions in the functional business model.

Competition

Yumi coffee expects a very high competition from the leading companies such as Starbucks, Duckins, McDonald’s, Caribou coffee, 7-Elevens and other small independent coffee shops. The only weapon against these large companies is competitive pricing technique.

The products

The Yumi coffee expects to deal majorly in coffee brands such as espresso at $0.39 per coffee cup, Short Macchiato at $0.49, Double Espresso at $ 0.48, Long Macchiato at $ 0.58, Ristretto at $ 0.69, Long Black, Cappuccino and Café Latte at $0. 49 each. We are also going to provide accompaniments such as snacks and burgers at a fair price of  $ 0.99.The product,cuts will be branded Yumi Coffee for the marketing purposes.

Marketing the Business

The business will apply pricing strategy, quality control, advertisement, promotion, products and service strategies and diversification of the products sold. The aggressive social media marketing is one of the best ways to reach the young population (Tuten, & Solomon, 2017). More than 60% of our marketing budget will go to online marketing, and we expect more than 70% increase in sales through this campaign. We will set the price of a cup of coffee at $0.49, which will be pocket-friendly to students while at the same time applying the aspects of psychological selling. Students are always broke, and this lower price will attract many of them thus boosting our market. On diversification, a customer who wants to buy burgers may also choose to purchase at least a cup of coffee in the shop and thus help increase sales. Selling another product through reducing the price of another product is one of the most effective marketing strategies (Baker, 2014).This strategy means that for coffee to sell, we can lower the prices of some snacks.

Sales and Operation

According to Ingram et al.(2015), increased sales can easily be achieved through the creation of conducting purchasing atmosphere and good service. We shall endeavor to offer counter sales service in a very conducive atmosphere which cozy, inviting, and comfortable interior space. The sitting space will have an individual table and longer ones for groups. The exterior tables must be designed with waterproof materials together with seats. The intention is to operate as from 7:00 to 9:00 PM weekdays and 9:00 AM to 9:00 PM on weekends. For purchases, we can accept cash, credit, Apple pay or debit payments to allow our customers flexibility in the purchase. We are also planning to have takeaway service which will allow the customers to book some coffee so that we can supply to the nearby offices. Instead of using machines which can hike prices we can ensure that every cup of coffee is served with Bodum which guarantees freshness all day long. Pricing will be affordable but reasonable to ensure that profits are made for the operational purpose. The slight increment in prices will always be tested for flexibility rate of the customers.

Sales forecast

Since our company is new in the industry, we are supposed to make sales forecasting using industry research, the compilation of consumer purchasing trends, and gathering competition sales performance. This information will allow us to have an apparent perspective of how the business will perform. We are also bound to factor in sales growth initiatives. The following is the best case scenario for our business plan

Coffee sales account for more than 7% of the total sales in the business while snacks take only 20% of the sales.

Table 1: Sales Forecasts

Financial Projections

Table 2: Balance sheet

Summary of year 1 Profit projections

Table 3: year one financial projection

Year 2 Summary Projections

Table 4: Year 2 financial projections

Year 3 summary projections

Table 5: Year 3 financial projections

Financial projections must always include the balance sheet with the number of products showing owners equity and the projected profits and expenses (Levy, Weitz, & Grewal, 2012) From the above finance projections, the total profit projections for the Yumi Coffee Café after three years should be more than $100000. These profits are on the minimum performance otherwise the business can perform better than that.

Strengths and Risks of the Business

Strengths

• The business has a ready market for its products and services due to a large number of students in the city
• The company is also able to take advantage of the available space and cheaper rooms which can be turned into other small cafes to accommodate more customers.
• Though the business faces challenges from other large coffee brands, it can easily penetrate the market easily by lowering their prices without losing profits.
• The competitors are a little far from the location where the business is to be established.

Weaknesses

• The business faces unstable international coffee market which can cause unplanned rise and drops in price.
• The fact that the business gets its market largely from students means that sales will adversely be affected during long school vacations.
• The company faces strong competition from established brands such as McDonalds and Starbucks.
• The large percentage of marketing costs results in lean profits.

Summary

Yumi Coffee business is a new coffee business to be established in Abu Dhabi. The business is expected to tap into the already existing market of college students andvbThe business will be dealing majorly in products such as coffee beverages and snacks. The marketing strategy to be employed includes psychological price selling, social media campaigns, public relations, advertisements and product promotion. The company faces stiff completion from some of the largest international companies such as McDonalds and Starbucks. To wade through the competition, the company will have to drop much of its price at first to attract customers. On the part of the projected profits, the business is expected to fetch more than $100,000 in the first three years with the total revenue amounting to more than $250,000.The business banks in some strengths including ready market, low coffee prices, cheap space for business establishment, cheap management and far competitors which reduces their influence on the sales of Yumi company. Some of the challenges that are projected to face the business include competition, large marketing costs, and unstable market for beverages and the volatile international market for coffee.

References

Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.

Baker, M. J. (2014). Marketing strategy and management. Palgrave Macmillan.

Ferrell, O. C., & Hartline, M. (2012). Marketing strategy, text, and cases. Nelson Education.

Hatten, T. S. (2015). Small business management: Entrepreneurship and beyond. Nelson Education.

Herschdoerfer, (2012). Quality control in the food industry (Vol. 2). Elsevier.

Ingram, T. N., LaForge, R. W., Williams, M. R., & Schwepker Jr, C. H. (2015). Sales management: Analysis and decision making. Routledge.

Kumar, N., & Steenkamp, J. B. E. (2013). Brand Breakout: How emerging market brands will go global. Springer.

Levy, M., Weitz, B. A., & Grewal, D. (2012). Retailing management (Vol. 6). New York: McGraw-Hill/Irwin.

Stutely, R. (2012). The definitive business plan: the fast track to intelligent planning for executives and entrepreneurs. Pearson UK.

Tuten, T. L., & Solomon, M. R. (2017). Social media marketing. Sage.