BUSINESS PLAN

CRUSH COFFEE

SOUTH OSMEṄA STREET,

GENERAL SANTOS CITY,

SOUTH COTABATO

www.crushcoffee.com

OWNED BY:

SHENA J. YAP

DIYLS ANTHEA C. MUSCA

ANJANETTE B. CALDEDERO

MARK ADRIAN A. MESSION

ANJEL MAE T. LAPUT

MARK ADRIAN MESSION

 INTRODUCTION

This section of the business plan presents the description of the business, its

location, and the total funding requirements and the possible funding source.

Description of the Business

Crush Coffee is also a very sexy business and everyone always wants to be

associated with a certain coffee shop that frequently visit and always tell their friends

about. You would not find people exited like this about when talking about other retail

establishments that they may patronize. Coffee bars are so personal because they are

really the third place for many of us. They are relaxing places that people can even

carry their laptops to and finish off their office work or even meet friends (Abraham &

Kleiner, 2003).

Our Vision is to established and trusted as the perfect coffee business partner

and to be a leader in innovation, service and quality. Our Mission is to provide perfect,

delicious coffee products and excellent, reliable services to our customers. And, our

objectives include: to attract coffee lovers and teenagers spending time over coffee, to

attract cooperate meetings over coffee, to be the customer’s first choice in the market

and 1000 number of customers within first month.

Our products are Cafe Latte, White Chocolate Mocha, Cappuccino, Cafe

Americano and Cafe Mocha. The prices of our products are so affordable especially for

the students and adults.

Location of the Business

This section presents a detail about the location and vicinity map of the business:

Mix n’ Magic Proposed Tap’s and Mix

Building Site Building

DTI General Santos City Jo’s Inato

Field Office Chicken House Coy’s Cafe

 Investment Cost

The investment cost is the value needed before the start of business operations.

The initial investment of the business is Php 1,400,000. It consists of the business’

leasehold improvements, equipment, furniture and fixtures, and the working capital.

Table 1 below presents the Investment Cost of the proposed business

Table 3
 Investment cost

Particulars Amount

Leasehold 150, 479.00

Improvements

Equipment 1,005,588.00

Furniture and Fixture 46,700.00

Prepaid Rent 75,000.00

Working Capital 122,233.00

Investment Cost 1,400,000.00

Table 2.

Equipment

Equipment Price
EquipmentParticulars
Chiller 19,950.00
Air Conditioning Unit 21,998.00

CCTV Camera 19,995.00

Generator 12,000.00

Computer Set 11,800.00

Vehicle 535,000.00

Furniture and Fixtures 500,000.00

Utilities

Utilities are major public services which include water, electricity and

telecommunication. These are usually provided by a government-regulated company. In

the proposed business, utilities are essentially for its operation serve customer.

Electricity and water supply will be supplied by SOCOTECO II and General Santos

Water District respectively. Communication will be installed and powered by PLDT.

Waste Disposal

Waste disposal involves the activities that deals with the waste before and after it

is produced, including its minimization, transfer, storage, separation, recovery, recycling

and final disposal. The proposed business will provide trashcan separating bio-

degradable and non-bio-degradable. Waster will be collected by the city management

unit and will be segregated as to bio-degradable and non-bio-degradable. Proper waste

disposal must be observed to ensure proper sanitation and promote clean and healthy

atmosphere.

Labour Supply

The following will be the labour needed for the operations of the proposed

business. The labour supply of the proposed business consists of three (3) employees

including the manager, sales clerk and the technical person. There will be one (1)

manager to manage the day-to-day operations of the business, one (1) sales clerk, and

(2) technical person. Our labor supply will come from General Santos City.

The Suppliers

This section presents the suppliers which include the raw materials, source of

raw materials and suppliers order flow.

Raw Materials

Materials are those main materials needed to render the services to the

customers. The proposed business is Coffee Shop that will be using coffee additives

like as the main component needed for production.

Source of Raw Materials

The proposed business will need to find a supplier to provide supplies that will

help business to operate. The ingredients needed for production can be seen in Mt.

Matutum by the B’laan indigenous people, the agriculture engineering is Fred

Fredecules.

Suppliers Order Flow

The suppliers order flow presents the supplies ordered, the mode of payments,

how the orders arrive and how the order is fulfilled.

Figure 6 on this page shows the process of ordering products from the suppliers.

First, the proposed business may make inquires with regards to the availability of

products through phone call or personally inquiring to the office of the supplier. Next, the

proposed business will be accommodated by the supplier of the raw materials orders

and the supplier will deliver the products and materials to the address of the proposed

business.
 INQUIRY

ACCOMMODATION

PAYMENT

CHECKING

DELIVERY/PICKING

Figure 7. Suppliers Order Flow

Executive Summary

This section presents the VMGO, the business model, the business and

production positions, wealth improvement approaches, and the parties supporting the

study.

Vision

To be established and trusted as the perfect coffee business partner and to be a

leader in innovation, service and quality.

Mission

To provide perfect, delicious coffee products and excellent, reliable services to

our customers.

Objectives

1. To attract coffee lovers and teenagers spending time over coffee.

2. To attract cooperate meetings over coffee

3. 1000 number of customers within first month.

4. To be the customers first choice in the market.

5. To maintain good customer relationship.

Business Model

BUSINESS MODEL

Partner Key Activities Offer Customer Customer

Network Relationship Segments
-To supply our -Cafe Latte
-Owners coffee -Customer
-White Chocolate Mocha satisfaction,
- Fred products.
Fredecules -Cappuccino loyalty and
performance.
Key Resources -Cafe Americano
Distribution
-Crush Coffee -Cafe Mocha Channels
Local Support
-Coffee Shop
Local High
Visibility

Cost Structure Revenue Statements

-Equipment/Building -Price
Business and Product Position

The researcher has estimated that proposed business will have 15% shares in

the market industry. The 26% will represents the free market shares and the 64% will

include the two (2) major players of the Coffee Shop in industry that already exists in the

market, where they will divide the fraction equally.

Competitive Advantages in the Market:

 Enjoy a Sense of Freedom

 Be your own boss

 Be profitable

 Socialize with your neighbours

 You can express your creativity

Wealth Improvement Approaches

As of today, with the developing economy of General Santos City, the

establishment continue to grow in numbers together with the inflation of the population.

The continuous increasing on the said factors and determine the high demand of the

product of the Coffee Shop industry and this lead to having a large size of market to the

coffee products as a necessity.

Parties Supporting the Business

The parties that have a direct relationships with the business are as follows:

 Consumers - a person who purchases goods and services for personal use.

 Creditors - a person or company to whom money is owed.

 Suppliers - a person or organization that provides something needed such as a product

or service.

 Employees/Staff - a person employed for wages or salary, especially at nonexecutive

level.

Environmental Analysis

This section presents the industry analysis covering the following forces directly

affecting the proposed business: the trend in the industry, the consumers, the

competitors, market forecast, market shares, market position and marketing strategy.

Trend in the industry

New into the year, we can already tell that it is going to be an exciting year in the

world of coffee, with an increase in global coffee consumption and some innovative new

products entering the market. While coffee production has increased, it struggles to

keep up with the growing demand for coffee products from consumers. With the cold

brew sub-segment grew 580% from 2011-16, and cold brew sales in 2016 proving to be

cold brews’ strongest year yet at retail, we can’t help but be looking to see what else is

coming.
 While there are the original pioneers of the cold brew industry, a number of new

launches have hit the market in the past year, continuing the sub-categories

fragmentation but also introducing consumers to innovations that have yet to be seen in

the coffee category. The growing awareness of consumers have coffee companies

needed to go beyond organic coffee, fair trade coffee, and specialized coffee brewing

techniques.

Consumer Analysis

This process involves subdivision of the market depending on the behaviour and

characteristics of the buyers. Initially, Crush Coffee was using socio-economic

segmentation in the industry because of the concentration of the people as most of

them are professionals and wanted to consume quality coffee in good facilities and

environment. Currently, Crush Coffee uses geographic and demographic segmentation

by selecting the strategic location where there is a high population of coffee lovers and

educated people.

Competitor Analysis

Given the proximity to schools and office complexes, our primary target

market will be students and professional business people. Both groups are heavy

consumers of coffee, tea, and snacks. Based on our customer surveys, there is a

strong demand for a high end coffee shop in a central location that serves great

coffee and has both outdoor seating and available parking. The three most common

complaints about the existing competition in the area are:

  Inconsistent product - Discerning customers are reluctant to become regular

patrons of a coffee shop that cannot consistently serve a high quality product.

 Lack of patio seating - Many people prefers to consume their food and

beverages outdoors on a sunny day.

 Not enough nearby parking - The lack of parking makes it difficult to attract

vehicle commuters.

Market Forecast

The institutions that bring together buyers and sellers, are always responding to

events, such as bad harvests and changing consumer tastes that affect the prices and

quantities of particular goods. The demand for some goods increases, while the

demand for others decreases. The supply of some goods rises, while the supply of

others falls. As such events unfold, prices adjust to keep markets in balance. This

chapter explains how the market forces of demand and supply interact to determine

equilibrium prices and equilibrium quantities of goods and services. We will see how

prices and quantities adjust to changes in demand and supply and how changes in

prices serve as signals to buyers and sellers.

The model of demand and supply that we shall develop in this chapter is one of the

most powerful tools in all of economic analysis. You will be using it throughout your

study of economics. We will first look at the variables that influence demand. Then we

will turn to supply, and finally we will put demand and supply together to explore how

the model of demand and supply operates. As we examine the model, bear in mind that

demand is a representation of the behaviour of buyers and that supply is a

representation of the behaviour of sellers. Buyers may be consumers purchasing

groceries or producers purchasing iron ore to make steel. Sellers may be firms selling

cars or households selling their labour services. We shall see that the ideas of demand

and supply apply, whatever the identity of the buyers or sellers and whatever the good

or service being exchanged in the market. In this chapter, we shall focus on buyers and

sellers of goods and services.

Of course, price alone does not determine the quantity of a good or service that people

consume. Coffee consumption, for example, will be affected by such variables as

income and population. Preferences also play a role. The story at the beginning of the

chapter illustrates how Starbucks “turned people on” to coffee. We also expect other

prices to affect coffee consumption. People often eat doughnuts or bagels with their

coffee, so a reduction in the price of doughnuts or bagels might induce people to drink

more coffee. An alternative to coffee is tea, so a reduction in the price of tea might result

in the consumption of more tea and less coffee. Thus, a change in any one of the

variables held constant in constructing a demand schedule will change the quantities

demanded at each price. The result will be a shift in the entire demand curve rather than

a movement along the demand curve. A shift in a demand curve is called a change in

demand.

When we draw a supply curve, we assume that other variables that affect the

willingness of sellers to supply a good or service are unchanged. It follows that a

change in any of those variables will cause a change in supply, which is a shift in the

supply curve. A change that increases the quantity of a good or service supplied at each
price shifts the supply curve to the right. Suppose, for example, that the price of fertilizer

falls. That will reduce the cost of producing coffee and thus increase the quantity of

coffee producers will offer for sale at each price. We show that increase graphically as a

shift in the supply curve from S1 to S2. We see that the quantity supplied at each price

increases by 10 million pounds of coffee per month.

Market Share

The researcher has estimated that proposed business will have 10% shares in

the market industry. The 26% will represents the free market shares and the 64% will

include the two (2) major players of the Coffee Shop in industry that already exists in the

market, where they will divide the fraction equally.

The figure below shows the percentage of the market shares of the business in

General Santos City.

Estimated Market Share

Proposed Business
Existing Player
Open Market
 Market Position

The Crush Coffee will position itself as a reasonably priced tapas/bar/coffee

house that has an innovative, effective system for allowing single to meet each other.

The Crush Coffee’s positioning will leverage their competitive edge:

 A unique approach to getting singles together called the structured conversation

system. This system was detailed in the Product and Services section; please refer to

that section for more information.

 This system is a competitive edge because most bars/taverns do not have a niche that

they are concentrating on. While every bar or coffee shop has a certain "flavour" and

that is why someone will choose one bar or another, the flavour is only surface deep.

The business model of the establishment is to sell alcohol and provide a social setting.

Beyond these two values, there is little other genuine value that the establishments try

to provide.

 Crush Coffee is distinguished by the fact that their business model concentrates on

developing value for customers beyond serving coffees. The Crush Coffee develops an

effective, albeit inherently structured, social setting that encourages meeting like-

minded individuals. Providing the coffees is the source of income, an ancillary part of

the business model. Generating value for the customers is the main focus; if the

customers are happy then the revenue will follow (assuming of course that proper

marketing and financial controls are employed). Concentrating on the client's needs

beyond serving alcohol is the distinguishing characteristic that will allow Crush Coffee

rapidly gain market share.

Market Strategy

The single objective is to position the Crush Coffee as the premier place for

young professional singles to meet like-minded individuals and also for the young

students. The marketing strategy will seek to first create customer awareness regarding

their services offered, develop that customer base, and work toward building customer

loyalty and referrals.

The message Crush Coffee will seek to communicate is that the Crush Coffee is

the place to meet intelligent singles. This message will be communicated through a

variety of methods. The first method will be advertisements. The bulk of the

advertisements will be in the FM Radio station weekly. Another method will be through

establishing strategic relationships with companies that have similar demographics such

as the Multnomah Athletic Club. Establishing a mutually beneficial relationship will

allow both organizations to develop visibility for each other.

The other form of advertising will be using "grassroots" methods where

customers will be given coupons or discounts for their friends to try Crush Coffee for the

first time. The coupon will be an economic incentive for the newcomer to try Crush

Coffee. The coupon also has the added force of a referral from a friend.