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Café Culture: Business Plan

Purpose

Café Culture will make its best effort to create a unique place where customers can
socialize with each other in a comfortable and relaxing environment while enjoying the
best brewed coffee or espresso and pastries in town. We will be in the business of
helping our customers to relieve their daily stresses by providing piece of mind through
great ambience, convenient location, friendly customer service, and products of
consistently high quality. Café Culture will invest its profits to increase the employee
satisfaction while providing stable return to its shareholders.

Executive Summary

Café Culture coffee bar is determined to become a daily necessity for local coffee
addicts, a place to dream of as you try to escape the daily stresses of life and just a
comfortable place to meet your friends or to read a book, all in one. With the growing
demand for high-quality gourmet coffee and great service, Café Culture will capitalize on
its proximity within Sydney CBD to build a core group of repeat customers. Café Culture
will offer its customers the best prepared coffee in the area that will be complimented
with pastries, as well as free books that its patrons can read to enjoy their visit.

The company will operate a 2,300 square foot coffee bar within a walking distance from
the many office buildings and education institutions. The owners have secured this
location through a three-year lease with an option for extending. The have also provided
$140,000 of the required $170,000 start-up funds. The remaining capital will be
obtained through ABC bank commercial loans.

The company is expected to grow sales revenue from $584,000 in FY2016 to $706,000
in year three. As Café Culture will strive to maintain a 65% gross profit margin and
reasonable operating expenses, it will see net profits grow from $100,000 to $125,000
during the same period.

The following chart highlights Café Culture’s expected performance

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1.1 Objectives

Café Culture set itself some objectives for the first year of operations:

● Become selected as the "Best New Coffee Bar in the area" by the local restaurant
guide.
● Turn in profits from the first month of operations.
● Maintain a 65% gross margin.

1.2 Keys to success

The management also identified the following keys to success:

● Store design that will be both visually attractive to customers, and designed for
fast and efficient operations.
● Employee training to insure the best coffee preparation techniques.
● Marketing strategies aimed to build a solid base of loyal customers, as well as
maximizing the sales of high margin products, such as espresso drinks.

1.3 Mission

Café Culture will make its best effort to create a unique place where customers can
socialize with each other in a comfortable and relaxing environment while enjoying the
best brewed coffee or espresso and pastries in town. We will be in the business of
helping our customers to relieve their daily stresses by providing piece of mind through
great ambience, convenient location, friendly customer service, and products of
consistently high quality. Café Culture will invest its profits to increase the employee
satisfaction while providing stable return to its shareholders.

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Company Summary

Café Culture, a Sydney based Pty. Ltd. company, sells coffee, other beverages and
snacks in its 2,300 square feet premium coffee bar located in Ultimo. Café Culture's
major investors are Tom Greenfield and James Parker who cumulatively own over 70%
of the company. The start-up loss of the company is assumed in the amount of $27,680.

2.1 Company Ownership

Café Culture is registered as a Proprietary Limited Company in Ultimo, NSW. Two major
owners Tom Greenfield and James Parker have contributed $70,000 and $30,000
respectively. All other investors have contributed $40,000.

2.2 Start-up Summary

The start-up expenses include:

● Legal expenses for obtaining licenses and permits as well as the accounting
services totalling $1,300.
● Marketing promotion expenses for the grand opening of Café Culture in the
amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy)
for the total amount of $3,580.
● Consultants’ fees of $3,000 for the help with setting up the coffee bar.
● Insurance (general liability, workers' compensation and property damage)
coverage at a total premium of $2,400.
● Pre-paid rent expenses for one month at $1.76 per square feet in the total
amount of $4,400.
● Premises remodelling in the amount of $10,000.
● Other start-up expenses including stationery ($500) and phone and utility
deposits ($2,500).

The required start-up assets of $142,320 include:

● Operating capital in the total amount of $67,123, which includes employees and
owner's salaries of $23,900 for the first two months and cash reserves for the
first three months of operation (approximately $14,400 per month).
● Start-up inventory of $16,027, which includes:
o Coffee beans (12 regular brands and five decaffeinated brands) - $6,000
o Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. -
$7,900
o Retail supplies (napkins, coffee bags, cleaning, etc.) - $1,840
o Office supplies - $287

Equipment for the total amount of $59,170:

● Espresso machine - $6,000


● Coffee maker - $900
● Coffee grinder - $200
● Food service equipment (microwave, toasters, dishwasher, refrigerator, blender,
etc.) -$18,000
● Storage hardware (bins, utensil rack, shelves, food case) - $3,720
● Counter area equipment (counter top, sink, ice machine, etc.) - $9,500
● Serving area equipment (plates, glasses, flatware) - $3,000
● Store equipment (cash register, security, ventilation, signage) - $13,750

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● Office equipment (PC, fax/printer, phone, furniture, file cabinets) - $3,600
● Other miscellaneous expenses - $500

Funding for the company comes from two major sources--owners' investments and bank
loans. Two major owners have contributed $70,000 and $30,000 respectively. All other
investors have contributed $40,000, which brings the total investments to $140,000.
The remaining $30,000 needed to cover the start-up expenses and assets came from the
two bank loans--a one-year loan in the amount of $10,000 and a long-term (five years)
loan of $20,000. Both loans were secured through the ABC Bank. Thus, total start-up
loss is assumed in the amount of $27,680.

The following chart and table summarise the start-up assumptions

START-UP REQUIREMENTS
Start-up Expenses
Legal $1,300
Stationery etc. $500
Brochures $3,580
Consultants $3,000
Insurance $2,400
Rent $4,400
Remodeling $10,000
Other $2,500
TOTAL START-UP EXPENSES $27,680
Start-up Assets  
Cash Required $67,123
Start-up Inventory $16,027
Other Current Assets $0
Long-term Assets $59,170
TOTAL ASSETS $142,320

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Total Requirements $170,000

START-UP FUNDING
Start-up Expenses to Fund $27,680
Start-up Assets to Fund $142,320
TOTAL FUNDING REQUIRED $170,000
Assets  
Non-cash Assets from Start-up $75,197
Cash Requirements from Start-up $67,123
Additional Cash Raised $0
Cash Balance on Starting Date $67,123
TOTAL ASSETS $142,320
Liabilities and Capital  
Liabilities
Current Borrowing $10,000
Long-term Liabilities $20,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $30,000
Capital
Planned Investment
Arthur Garfield $70,000
James Polk $30,000
All other investors $40,000
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $140,000
Loss at Start-up (Start-up Expenses) -$27,680
TOTAL CAPITAL $112,320
TOTAL CAPITAL AND LIABILITIES $142,320
Total Funding $170,000

2.3 Company Locations and Facilities

Café Culture coffee bar will be located on the ground floor of the commercial building
near the Broadway centre in Ultimo. The company has secured a one-year lease of the
vacant 2,500 square feet premises previously occupied by a hair salon. The lease
contract has an option of renewal for three years at a fixed rate that Café Culture will
execute depending on the financial strength of its business.

The floor plan will include a 200 square feet back office and a 2,300 square feet coffee
bar, which will include a seating area with 15 tables, a kitchen, storage area and two
bathrooms. The space in the coffee bar will be approximately distributed the following
way: 1,260 square feet (i.e., 55% of the total) for the seating area, 600 square feet
(26%) for the production area, and the remaining 440 square feet (19%) for the
customer service area.

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This property is located in a commercial area within a walking distance from the
University, TAFEs and other office buildings. The commercially zoned premises have the
necessary water and electricity hook-ups and will require only minor remodelling to
accommodate the espresso bar, kitchen and storage area. The coffee bar's open and
clean interior design with modern wooden decor will convey the quality of the served
beverages and snacks, and will be in-line with the establishment's positioning as an
eclectic place where people can relax and enjoy their cup of coffee. The clear window
displays, through which passers-by will be able to see customers enjoying their
beverages, and outside electric signs will be aimed to grab the attention of the customer
traffic.

2.4 Risk Management

This risk management policy forms part of Café Culture internal controls and corporate
governance arrangements. The risk management policy is designed to:

● identify, evaluate, control and manage risks


● ensure potential threats and opportunities are identified and managed
● inform management and staff members about their roles, responsibilities and
reporting procedures with regards to risk management
● ensure risk management is an integral part of planning at all levels of the
organisation.

2.5 WHS Regulations

● Work Health and Safety Act 211


● Work Health and Safety Regulation 2017
● Dangerous Goods Act 1985

2.6 Contingency plan

Difficulties and risks:

● Problems generating visibility and awareness of the Grog Shop.


● An entry into Portland of the "conversation roundtables" or other single meeting
events.
● Lower than forecasted consumption of alcohol.

Worst case risks may include:

● Determining that the business cannot support itself on an ongoing basis.


● Having to liquidate equipment to cover liabilities

Products

Café Culture will offer its customers the best tasting coffee beverages in the area. This
will be achieved by using high-quality ingredients and strictly following preparation
guidelines. The store layout, menu listings and marketing activities will be focused on
maximizing the sales of higher margin espresso drinks. Along with the espresso drinks,
brewed coffee and teas, as well as some refreshment beverages, will be sold in the
coffee bar. Cafe Culture will also offer its clients pastries, small salads and sandwiches.
For the gourmet clientele that prefers to prepare its coffee at home, Cafe Culture will
also be selling coffee beans.

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The menu offerings will be supplemented by free books and magazines that customers
can read inside the coffee bar.

3.1 Product Description

The menu of the Cafe Culture coffee bar will be built around espresso-based coffee
drinks such as lattes, mochas, cappuccinos, etc. Each of the espresso-based drinks will
be offered with whole, skimmed, or soy milk. Each of these coffee beverages is based on
a 'shot' of espresso, which is prepared in the espresso machine by forcing heated water
through ground coffee at high pressure.

Such espresso shots are combined with steamed milk and/or other additives like cocoa,
caramel, etc., to prepare the espresso-based beverages. Proper preparation techniques
are of paramount importance for such drinks. A minor deviation from the amount of
coffee in the shot, the size of the coffee particles, the temperature of milk, etc., can
negatively affect the quality of the prepared drink.

3.2 Promotion

Two thousand flyers will be distributed in the adjacent neighbourhood, on the


Educational institution campuses, at the malls and in the selected office buildings within
two weeks prior to the opening of Cafe Culture. Subsequently, free postcards with Cafe
Culture endorsement will be printed to increase the company visibility among the
patrons.

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Market Analysis Summary

Coffee consumption has shown steady growth, with gourmet coffee having the strongest
growth. Employees, students, visitors vising Sydney CBD are growing each year. They
favour well-brewed gourmet coffee drinks and demand great service. Cafe Culture will
strive to build a loyal customer base by offering a great tasting coffee in a relaxing
environment of its coffee bar located close to bustling Broadway area.

4.1 Market Segmentation

Cafe Culture will focus its marketing activities on reaching the students, people working
in offices located close to the coffee bar and on sophisticated teenagers. Our market
research shows that these are the customer groups that are most likely to buy gourmet
coffee products. Since gourmet coffee consumption is universal across different income
categories the location will provide access to the targeted customer audience.

MARKET ANALYSIS
    YEAR YEAR YEAR YEAR YEAR
1 2 3 4 5
Potential Customers Growth          
Students and Faculty 2% 18,000 18,36 18,727 19,10 19,484
0 2
Teenagers 1% 3,000 3,030 3,060 3,091 3,122
Office workers 2% 8,000 8,160 8,323 8,489 8,659
Other 0% 5,000 5,000 5,000 5,000 5,000
Total 1.63% 34,000 34,55 35,110 35,68 36,265
0 2

4.2 Target Market

Cafe Culture will cater to people who want to get their daily cup of great-tasting coffee in
a relaxing atmosphere. Such customers vary in age. Our market research shows that
these are discerning customers that gravitate towards better tasting coffee.
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Furthermore, a lot of college students consider coffee bars to be a convenient studying
or meeting location, where they can read or meet with peers without the necessity to
pay cover charges. For us, this will provide a unique possibility for building a loyal client
base.

Cafe Culture's marketing strategy will be focused at getting new customers, retaining the
existing customers, getting customers to spend more and come back more often.
Establishing a loyal customer base is of a paramount importance since such customer
core will not only generate most of the sales but also will provide favourable referrals.

4.2.1 Market Needs

General trend toward quality among consumers definitely plays an important role in the
recent growth in gourmet coffee. Additionally, such factors as desire for small
indulgencies, for something more exotic and unique, provide a good selling opportunity
for coffee bars.

4.3 Industry Analysis

Coffee consumption is predicted to see a growth rate of 7.2% in Australia over the next
few years generating a total revenue of $6bn. The retail coffee industry is flourishing in
Australia. The local climate is very conducive to coffee drinking especially in the
mornings. In Sydney 8am is the peak time for coffee consumption. Its discerning coffee
drinkers are in favour of well-prepared, strong coffee-based beverages, which they can
consume in a relaxing environment.

4.3.1 Competition

Cafe Culture's direct competitors will be other coffee bars located in and around
Broadway area. These include Starbucks, Gloria Jeans and other Food service
establishments that offer coffee. Starbucks will definitely be one of the major
competitors because of its strong financial position and established marketing and
operational practices. However, despite of Starbuck's entrenched market position, many
customers favour smaller, independent establishments that offer cozy atmosphere and
good coffee at affordable prices.

4.4 Internal Situation

STRENGTH STRATEGY

Sales & Marketing – Currently holds largest Maintain and grow market share by improving
market share in the shopping marketing and promotions

Location within the Shopping Centre for point Provide quality products and services to
of sales generate word of mouth endorsements and
repeat business

Skills – knowledge, skills and experience of Train and develop staff to deliver superior
owners and managers in running successful quality of products and services
café businesses previously

Financial – owners’ access to financial Fund training, marketing and develop new
resources and strong cash flow from operations menu items

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WEAKNESS STRATEGY

Location – capped capacity due to floor space Investigate the option of negotiating acquisition
of additional floor space from adjoining shops
4.5 External Situation

OPPORTUNITY STRATEGY

Economy – Well positioned to take advantage Expand marketing and promotion and maintain
of a strong economy, low interest rates and prices at current market levels
high disposable income

Social Patterns – Population growth Increase advertising and investigate potential to


(residential development) and increased increase floor space
standard of living

Physical Factors – Improved public transport Increase advertising in these surrounding areas
and infrastructure to attract new clients

WEAKNESS STRATEGY

Environmental – Increased cost of utilities, Look at alternatives to develop capacity to use


such as water and electrical power gas and implement water saving policies and
practices

Strategy and Implementation Summary

5.1 Competitive Edge

Cafe Culture will position itself as unique coffee bar where its patrons can not only enjoy
a cup of perfectly brewed coffee but also spend their time in an ambient environment.
Comfortable sofas and chairs, dimmed light and quiet relaxing music will help the
customers to relax from the daily stresses and will differentiate Cafe Culture from
incumbent competitors.

5.2 Sales Strategy

Cafe Culture baristas will handle the sales transactions. To speed up the customer
service, at least two employees will be servicing clients--while one employee will be
preparing the customer's order, the other one will be taking care of the sales
transaction. All sales data logged on the computerized point-of-sale terminal will be later
analysed for marketing purposes.

In order to build up its client base, Cafe Culture will use banners and fliers, utilize
customer referrals and cross-promotions with other businesses in the community. At the
same time, customer retention programs will be used to make sure the customers are
coming back and spending more at the coffee bar.

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5.2.1 Sales Forecast

Food costs are assumed at 25% for coffee beverages and 50% for retail beans and
pastries.

SALES FORECAST
  YEAR 1 YEAR 2 YEAR 3
Sales      
Coffee beverages $350,400 $385,440 $423,984
Coffee beans $87,600 $96,360 $105,996
Pastries, etc. $146,000 $160,600 $176,660
TOTAL SALES $584,000 $642,400 $706,640
Direct Cost of Sales Year 1 Year 2 Year 3
Coffee beverages $87,600 $96,360 $105,996
Coffee beans $43,800 $48,180 $52,998
Pastries, etc. $73,000 $80,300 $88,330
Subtotal Direct Cost of Sales $204,400 $224,840 $247,324

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Management Summary

6.1 Management Team

A full-time manager will be hired to oversee the daily operations at Cafe Culture. The
candidate has had three years of managerial experience in the industry. This person's
responsibilities will include managing the staff, ordering inventory, dealing with
suppliers, developing a marketing strategy and perform other daily managerial duties.
We believe that our candidate has the right experience for this role. A profit-sharing
arrangement for the manager may be considered based on the first year operational
results.

6.2 Management Team Gap

Despite the owners' and manager's experience in the industry, the company will retain
the consulting services of ABC Espresso Services, the consultants who have helped to
develop the business idea for Cafe Culture. This company has over twenty years of
experience in the retail coffee industry and has successfully opened dozens of coffee
bars across Sydney. Consultants will be primarily used for market research, customer
satisfaction surveys and to provide additional input into the evaluation of the new
business opportunities.

6.3 Personnel Plan

The table below outlines the personnel needs of Cafe Culture coffee bar.

PERSONNEL PLAN
  YEAR 1 YEAR 2 YEAR 3
Manager $35,000 $37,800 $40,824
Baristas $50,000 $54,000 $58,320
Employees $39,600 $52,000 $56,000
TOTAL PEOPLE 7 8 8
Total Payroll $124,600 $143,800 $155,144

6.4 Training strategies

● Staff training on safe food handling

6.5 Monitoring, evaluation and feedback strategies

● Have weekly sales meetings with team and bring in outside sales professionals to
assist with the task of selling.

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Financial Plan

7.1 Projected Cash Flow

The company will maintain a healthy cash flow position, which will allow for timely debt
servicing and funds available for future development.

PRO FORMA CASH FLOW


  YEAR 1 YEAR 2 YEAR 3
Cash Received      
Cash from Operations      
Cash Sales $584,000 $642,400 $706,640
SUBTOTAL CASH FROM OPERATIONS $584,00 $642,40 $706,640
0 0
Additional Cash Received      
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $584,00 $642,40 $706,640
0 0
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations      
Cash Spending $124,600 $143,800 $155,144
Bill Payments $327,865 $388,715 $420,945
SUBTOTAL SPENT ON OPERATIONS $452,46 $532,51 $576,089
5 5
Additional Cash Spent      
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Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $3,300 $3,300 $3,300
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $3,585 $3,961
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $2,000 $2,000
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $455,76 $541,40 $585,350
5 0
Net Cash Flow $128,235 $101,000 $121,290
Cash Balance $195,358 $296,358 $417,648

Appendix

Café Culture Sales Forecast

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Documented review of others plans:

Things checked Business Plan 1 Business Plan 2

Ensure the plan was simple Yes - the plan was Yes - the plan was
simple and simple with graphs
informative and diagrams
Ensure the plan communicated contents easily
and practically Yes Yes
Ensure the plan was specific (concrete /
measurable objectives) Yes – included figures Yes
and tables
Ensure the plan was realistic (with sales goals,
expense budgets, milestones with realistic dates) Yes Yes

Ensure the plan was complete Yes – covered all key Yes
points

Identify, discuss and document the strengths of Looked professional Look professional
the plan

Identify, discuss and document any weaknesses Should have table of All good
of the plan contents

Check proposed financials for accuracy and All details are correct All details are
reality correct

Check proposed expenses are realistic Yes Yes

Document review thoroughly Yes Yes

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Meeting Plan:
● Introduce staff
o Maxi - Tom Greenfield, the owner
o Brad the manager
o Sarah the Barista
● Provide information on company background
o Tom Greenfield “Hi Bard and Sarah, how are you all? Before we move on I’d
like to tell you a little bit about Café Culture”
o We are a Sydney based company, sells coffee, other beverages and snacks
in its 2,300 square feet premium coffee bar located in Ultimo. The major
investors are me, Tom Greenfield and James Parker who cumulatively own
over 70% of the company. We are ready to start our business this
September”
● Allocate responsibilities to personnel
o Tom Greenfield “The purpose of the meeting today is to cover Risk
Management Policy and responsibilities and authority include Owners – me
and James, Manager – you Brad and Employees – Sarah”
● Explain responsibilities:
o Tom Greenfield “We all as the management and employees of Café Culture
have responsibility for implementing aspects of Risk Management policy”
o Brad “Tom How can I help for this?”
o Sarah “I’ll do my best Tom”
o Tom Greenfield “Thanks everyone, I have outlined the key roles for:
▪ “This is for you Brad - Role of store managers/partners – keys roles of
the senior management team are to:
● determine what types of risk are acceptable and which are not
● set the standards and expectations of staff with respect to
conduct
● approve major decisions affecting Café Culture’s risk profile or
exposure
● monitor the management of significant risks to reduce the
likelihood of potential organisational risks and threats or
failure
● perform annual review of Café Culture’s approach to risk
management and approval of changes or improvements to key
elements of its processes and procedures
● implement policies on risk management and internal control
where this is deemed appropriate

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● identify and evaluate areas of significant risks potentially faced
by Café Culture for consideration by the managers and
partners
● identify areas where risk management is not adequately
addressed and advise the partners accordingly
● review and update the risk management strategy
● undertake an annual review of the effectiveness of systems of
internal control and provide an annual report for partners,
including a summary review and respective recommendations.
▪ “This is for you Sarah and please pass on to other staff too - Key
roles of the employees are to:
● familiarise themselves with the content of the risk
management policy and clarify any aspects necessary with a
senior team member
● consider any risks they feel could impact on them meeting
their objectives and either manage the risk if it is in their
control to do so, or inform management/partners of their
concerns
● advise store management/ partners about any fraud or
unethical behaviour.
▪ Tom “This is what me and James can think of at the moment. Do
you have anything to add on?”
▪ Brad “No, all good Tom”
▪ Sarah “No”
● Talk about KPI’s
o Tom “The KPI will be based on the following risk areas:
▪ Operational/organisational
● legal and regulatory compliance
● technology
● insurance
● resources: human, physical
● logistics
● marketing
● product quality
● communications
● infrastructure, plant and equipment
● customer interaction
● market needs.
▪ Financial
● accountability

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● fraud or theft
● capital investment
● interest rates
● loss of income, funding/finance.
▪ Governance
● conflict of interest.
▪ Project management
● procedures and tools for project management
● stakeholders – strength of relationships/conflict of interest
● human resources
● financial resources
● Discuss budget
o Brad “How about the budget?”
o Tom “Me and James haven’t finalised them yet, we need your help too Brad.”
o Brad “Sure Tom, from my opinion:
▪ The business planning and budgeting process should be using to set
objectives, agree on action plans, and allocate resources. Progress
towards meeting business plan objectives is monitored regularly by
Me, manager and owners which are you and James”
● Discuss required resources
o Tom “Good, so Brad can you also let me know resources required for this?”
o Brad “Sure, apart from the computer that I need to use to prepare for policies
and procedure, I think I’ll need inputs from Sarah and other staff too.
o Sarah “Yes, Brad”
● Discuss about implementation plan
o Tom “Right, now let’s move to the implementation plan. The following
outlines the process for developing a risk management profile.
▪ 1. Establish the context
● Define and identify the environment, characteristics and
stakeholders, their goals and objectives, and the scope of the
specific risk management process.
● Develop criteria against which risks are evaluated and identify
the structure for risk management.
▪ 2. Identify and describe risks
● Risks are best identified through a collaborative approach
involving a cross section of Café Culture stakeholders.
● All conceivable risks must be considered. Ensure any
certainties are identified as problems and addressed in the risk
management profile.
▪ 3. Conduct current risk analysis

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● An analysis of the risks is conducted to determine their causes,
and estimate their probability and consequences. This analysis
provides the basis for working on the ‘right’ risks.
▪ 4. Conduct risk evaluation
● Risks are considered and prioritised according to their
potential impact, and each risk is assessed to determine its
level of acceptability.
▪ 5. Develop and implement proposed risk treatments
● Risk treatments are developed to cost-effectively reduce,
contain and control risk.
● Formal risk management reporting mechanisms are defined
and documented.
● Categorise the risk likelihood.
● Outline monitoring arrangements
o Tom “I’d to add on for Monitor, report, update and manage risks:
▪ As risks change constantly, the risk profile is continuously monitored,
reviewed and updated by management. New risks may be identified
as more information becomes available and existing risks may be
eliminated through the effectiveness of the risk treatments/actions.
Record risks identified through regular audit on the risk audit log.
Record risk management activities on the risk management register.”
● Instructions provided to staff and their performance against the requirements
o Tom “Thank you very much Brad and Sarah to attend the meeting today. I
have printed out the Policies and Procedures for you and others staff to
keep.”

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Café Culture Risk Management Policy

Introduction

Café Culture recognises that risk management is an essential component of good


management practice. Café Culture is committed to ensuring the implementation of
risk management processes that focus on the proactive management of risks across
the organisation.

This risk management policy forms part of Café Culture's internal controls and
corporate governance arrangements. The risk management policy is designed to:

● identify, evaluate, control and manage risks


● ensure potential threats and opportunities are identified and managed
● inform management and staff members about their roles, responsibilities and
reporting procedures with regards to risk management
● ensure risk management is an integral part of planning at all levels of the
organisation.

Policy

Café Culture is committed to achieving its vision, business objectives and quality
objectives by the proactive management of risk at all levels of the organisation.

Café Culture will identify, evaluate, control and manage risk throughout the
organisation in accordance with the ‘Café Culture Risk Management Framework’. See
risk management strategy for framework details.

Responsibility and Authority

Management and employees of Café Culture have responsibility for implementing


aspects of this policy.

Role of store managers/partners

Key roles of the senior management team are to:

● determine what types of risk are acceptable and which are not

● set the standards and expectations of staff with respect to conduct

● approve major decisions affecting Café Culture’s risk profile or exposure

● monitor the management of significant risks to reduce the likelihood of potential organisational risks and
threats or failure

● perform annual review of Café Culture’s approach to risk management and approval
of changes or improvements to key elements of its processes and procedures
● implement policies on risk management and internal control where this is deemed
appropriate
● identify and evaluate areas of significant risks potentially faced by Café Culture for
consideration by the managers and partners
● identify areas where risk management is not adequately addressed and advise the
partners accordingly
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● review and update the risk management strategy
● undertake an annual review of the effectiveness of systems of internal control and
provide an annual report for partners, including a summary review and respective
recommendations.
Role of cafe employees

Key roles of the employees are to:

● familiarise themselves with the content of the risk management policy and clarify any aspects necessary
with a senior team member
● consider any risks they feel could impact on them meeting their objectives and either manage the risk if it
is in their control to do so, or inform management/partners of their concerns
● advise store management/ partners about any fraud or unethical behaviour.

Café Culture Risk Management Framework

This framework encompasses a number of elements that together facilitate an effective


and efficient operation, enabling Café Culture to respond to a variety of operational,
financial, commercial and strategic risks. These elements include:

Policies and procedures

A series of policies underpin the internal control process. These policies are endorsed by
the partners and are implemented and communicated by the store management to all
staff. These policies include:

Human resources policies:


● staff travel policy
● harassment Policy
● OHS Policy
● return to work policy
● work/life balance policy
● equity/discrimination/diversity policy
● parental leave policy
● organisational culture policy

Financial policies:
● bad debt policy
● cash reserving policy
● revenue/expenditure recognition policy

Monthly reporting

Decisions to rectify problems are made at regular meetings of the partners.


Comprehensive reporting at staff meetings is designed to monitor key risks and their
controls.

Business planning and budgeting

The business planning and budgeting process is used to set objectives, agree on action
plans, and allocate resources. Progress towards meeting business plan objectives is
monitored regularly by store managers and partners.
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Procedure: Development of a Risk Management Profile

The following outlines the process for developing a risk management profile.

1. Establish the context


Define and identify the environment, characteristics and stakeholders, their goals and
objectives, and the scope of the specific risk management process.
Develop criteria against which risks are evaluated and identify the structure for risk
management.

2. Identify and describe risks


Risks are best identified through a collaborative approach involving a cross section of
Café Culture stakeholders.
All conceivable risks must be considered. Ensure any certainties are identified as
problems and addressed in the risk management profile.

3. Conduct current risk analysis


An analysis of the risks is conducted to determine their causes, and estimate their
probability and consequences. This analysis provides the basis for working on the ‘right’
risks.

4. Conduct risk evaluation


Risks are considered and prioritised according to their potential impact, and each risk is
assessed to determine its level of acceptability.

5. Develop and implement proposed risk treatments


● Risk treatments are developed to cost-effectively reduce, contain and control risk.
● Formal risk management reporting mechanisms are defined and documented.
● Categorise the risk likelihood.

6. Monitor, report, update and manage risks


As risks change constantly, the risk profile is continuously monitored, reviewed and
updated by management. New risks may be identified as more information becomes
available and existing risks may be eliminated through the effectiveness of the risk
treatments/actions. Record risks identified through regular audit on the risk audit log.
Record risk management activities on the risk management register.

Café Culture’s Risk Areas


The following are four broad areas where potential for risk to Café Culture has been
identified. Under each area, examples of possible risks are detailed.

Operational/organisational
● legal and regulatory compliance ● product quality
● technology ● communications
● insurance ● infrastructure, plant and equipment
● resources: human, physical ● customer interaction
● logistics ● market needs.
● marketing

Financial
● accountability
● fraud or theft
● capital investment
● interest rates
● loss of income, funding/finance.

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Project management
● procedures and tools for project
management
● stakeholders – strength of
relationships/conflict of interest
● human resources
● financial resources.

Updated/authorised
2020- Tom Greenfield (Owner of Café Culture)

Café Culture Guidance Leaflet.

Risk Assessment

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Review report:
Write some points about the successful implementation of your plans:
● Sales target achieved
● Production was up to the standard

This is because hazard identification and risk assessment will help Café Culture to:

1. Recognise and control hazards in your workplace.


2. Create awareness among your employees – and use it as a training tool as well.
3. Set risk management standards, based on acceptable safe practices and legal
requirements.
4. Reduce incidents in the workplace.
5. Save costs by being proactive instead of reactive.

Discuss some points about sales and budget and write how you performed financially:
● Budget was done accurately
● Sales forecast was not accurate

Write the problems you have found in all areas:


● Staff performance did not meet the KPIs due to lack of knowledge and
understanding of hazard and risk in café workplace.

Suggestions for improvements:

Effective management control will raise the standard of Café Culture health and safety
measures

More often than not, people think that incidents occur due to negligence or mistakes that
employees make, but in fact, most incidents in the workplace occur due to insufficient
management controls.

Café Culture proactive effort to implement risk management systems can prevent the
majority of incidents that may occur in your workplace. The following are examples of
systems to put into place in your workplace to reduce the likelihood of a health and safety
incident:

● training;
● inspections;
● work procedures;
● employee fitness;
● planned maintenance of equipment and structures; and
● ensuring sufficient and competent supervision.

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A hazard identification and risk assessment process is a proactive one. It is more cost
effective to complete this process and implement a risk management system than to have
an incident on site and then create the risk management systems retrospectively.

Improvement plan implementation:

You can make a table:

Problem Suggestion Implementation

Staff didn’t perform well Provide more staff training Organise regular training
and provide training
materials to staff

New version of business plan:


Highlight the areas of improvement and write the new plan or strategies against the old
plan and include all areas of improvement and present the whole new plan.

Page 26 of 42
Café Culture: Business Plan
Purpose

Café Culture will make its best effort to create a unique place where customers can
socialize with each other in a comfortable and relaxing environment while enjoying the
best brewed coffee or espresso and pastries in town. We will be in the business of
helping our customers to relieve their daily stresses by providing piece of mind through
great ambience, convenient location, friendly customer service, and products of
consistently high quality. Café Culture will invest its profits to increase the employee
satisfaction while providing stable return to its shareholders.

Executive Summary

Café Culture coffee bar is determined to become a daily necessity for local coffee
addicts, a place to dream of as you try to escape the daily stresses of life and just a
comfortable place to meet your friends or to read a book, all in one. With the growing
demand for high-quality gourmet coffee and great service, Café Culture will capitalize on
its proximity within Sydney CBD to build a core group of repeat customers. Café Culture
will offer its customers the best prepared coffee in the area that will be complimented
with pastries, as well as free books that its patrons can read to enjoy their visit.

The company will operate a 2,300 square foot coffee bar within a walking distance from
the many office buildings and education institutions. The owners have secured this
location through a three-year lease with an option for extending. The have also provided
$140,000 of the required $170,000 start-up funds. The remaining capital will be
obtained through ABC bank commercial loans.

The company is expected to grow sales revenue from $584,000 in FY2016 to $706,000
in year three. As Café Culture will strive to maintain a 65% gross profit margin and
reasonable operating expenses, it will see net profits grow from $100,000 to $125,000
during the same period.

The following chart highlights Café Culture’s expected performance

Page 27 of 42
1.4 Objectives

Café Culture set itself some objectives for the first year of operations:

● Become selected as the "Best New Coffee Bar in the area" by the local restaurant
guide.
● Turn in profits from the first month of operations.
● Maintain a 65% gross margin.

1.5 Keys to success

The management also identified the following keys to success:

● Store design that will be both visually attractive to customers, and designed for
fast and efficient operations.
● Employee training to insure the best coffee preparation techniques.
● Marketing strategies aimed to build a solid base of loyal customers, as well as
maximizing the sales of high margin products, such as espresso drinks.

1.6 Mission

Café Culture will make its best effort to create a unique place where customers can
socialize with each other in a comfortable and relaxing environment while enjoying the
best brewed coffee or espresso and pastries in town. We will be in the business of
helping our customers to relieve their daily stresses by providing piece of mind through
great ambience, convenient location, friendly customer service, and products of
consistently high quality. Café Culture will invest its profits to increase the employee
satisfaction while providing stable return to its shareholders.

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Company Summary

Café Culture, a Sydney based Pty. Ltd. company, sells coffee, other beverages and
snacks in its 2,300 square feet premium coffee bar located in Ultimo. Café Culture's
major investors are Tom Greenfield and James Parker who cumulatively own over 70%
of the company. The start-up loss of the company is assumed in the amount of $27,680.

2.7 Company Ownership

Café Culture is registered as a Proprietary Limited Company in Ultimo, NSW. Two major
owners Tom Greenfield and James Parker have contributed $70,000 and $30,000
respectively. All other investors have contributed $40,000.

2.8 Start-up Summary

The start-up expenses include:

● Legal expenses for obtaining licenses and permits as well as the accounting
services totalling $1,300.
● Marketing promotion expenses for the grand opening of Café Culture in the
amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy)
for the total amount of $3,580.
● Consultants’ fees of $3,000 for the help with setting up the coffee bar.
● Insurance (general liability, workers' compensation and property damage)
coverage at a total premium of $2,400.
● Pre-paid rent expenses for one month at $1.76 per square feet in the total
amount of $4,400.
● Premises remodelling in the amount of $10,000.
● Other start-up expenses including stationery ($500) and phone and utility
deposits ($2,500).

The required start-up assets of $142,320 include:

● Operating capital in the total amount of $67,123, which includes employees and
owner's salaries of $23,900 for the first two months and cash reserves for the
first three months of operation (approximately $14,400 per month).
● Start-up inventory of $16,027, which includes:
o Coffee beans (12 regular brands and five decaffeinated brands) - $6,000
o Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. -
$7,900
o Retail supplies (napkins, coffee bags, cleaning, etc.) - $1,840
o Office supplies - $287

Equipment for the total amount of $59,170:

● Espresso machine - $6,000


● Coffee maker - $900
● Coffee grinder - $200
● Food service equipment (microwave, toasters, dishwasher, refrigerator, blender,
etc.) -$18,000
● Storage hardware (bins, utensil rack, shelves, food case) - $3,720
● Counter area equipment (counter top, sink, ice machine, etc.) - $9,500
● Serving area equipment (plates, glasses, flatware) - $3,000
● Store equipment (cash register, security, ventilation, signage) - $13,750

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● Office equipment (PC, fax/printer, phone, furniture, file cabinets) - $3,600
● Other miscellaneous expenses - $500

Funding for the company comes from two major sources--owners' investments and bank
loans. Two major owners have contributed $70,000 and $30,000 respectively. All other
investors have contributed $40,000, which brings the total investments to $140,000.
The remaining $30,000 needed to cover the start-up expenses and assets came from the
two bank loans--a one-year loan in the amount of $10,000 and a long-term (five years)
loan of $20,000. Both loans were secured through the ABC Bank. Thus, total start-up
loss is assumed in the amount of $27,680.

The following chart and table summarise the start-up assumptions

START-UP REQUIREMENTS
Start-up Expenses
Legal $1,300
Stationery etc. $500
Brochures $3,580
Consultants $3,000
Insurance $2,400
Rent $4,400
Remodeling $10,000
Other $2,500
TOTAL START-UP EXPENSES $27,680
Start-up Assets  
Cash Required $67,123
Start-up Inventory $16,027
Other Current Assets $0
Long-term Assets $59,170
TOTAL ASSETS $142,320

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Total Requirements $170,000

START-UP FUNDING
Start-up Expenses to Fund $27,680
Start-up Assets to Fund $142,320
TOTAL FUNDING REQUIRED $170,000
Assets  
Non-cash Assets from Start-up $75,197
Cash Requirements from Start-up $67,123
Additional Cash Raised $0
Cash Balance on Starting Date $67,123
TOTAL ASSETS $142,320
Liabilities and Capital  
Liabilities
Current Borrowing $10,000
Long-term Liabilities $20,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $30,000
Capital
Planned Investment
Arthur Garfield $70,000
James Polk $30,000
All other investors $40,000
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $140,000
Loss at Start-up (Start-up Expenses) -$27,680
TOTAL CAPITAL $112,320
TOTAL CAPITAL AND LIABILITIES $142,320
Total Funding $170,000

2.9 Company Locations and Facilities

Café Culture coffee bar will be located on the ground floor of the commercial building
near the Broadway centre in Ultimo. The company has secured a one-year lease of the
vacant 2,500 square feet premises previously occupied by a hair salon. The lease
contract has an option of renewal for three years at a fixed rate that Café Culture will
execute depending on the financial strength of its business.

The floor plan will include a 200 square feet back office and a 2,300 square feet coffee
bar, which will include a seating area with 15 tables, a kitchen, storage area and two
bathrooms. The space in the coffee bar will be approximately distributed the following
way: 1,260 square feet (i.e., 55% of the total) for the seating area, 600 square feet
(26%) for the production area, and the remaining 440 square feet (19%) for the
customer service area.

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This property is located in a commercial area within a walking distance from the
University, TAFEs and other office buildings. The commercially zoned premises have the
necessary water and electricity hook-ups and will require only minor remodelling to
accommodate the espresso bar, kitchen and storage area. The coffee bar's open and
clean interior design with modern wooden decor will convey the quality of the served
beverages and snacks, and will be in-line with the establishment's positioning as an
eclectic place where people can relax and enjoy their cup of coffee. The clear window
displays, through which passers-by will be able to see customers enjoying their
beverages, and outside electric signs will be aimed to grab the attention of the customer
traffic.

2.10 Risk Management

Café Culture recognises that risk management is an essential component of good


management practice. Café Culture is committed to ensuring the implementation of risk
management processes that focus on the proactive management of risks across the
organisation.

This risk management policy forms part of Café Culture internal controls and corporate
governance arrangements. The risk management policy is designed to:

● identify, evaluate, control and manage risks


● ensure potential threats and opportunities are identified and managed
● inform management and staff members about their roles, responsibilities and
reporting procedures with regards to risk management
● ensure risk management is an integral part of planning at all levels of the
organisation.

2.10.1Risk Management Policies and procedures

A series of policies underpin the internal control process. These policies are endorsed by
the partners and are implemented and communicated by the store management to all
staff. These policies include:

Human resources policies:

● staff travel policy


● harassment Policy
● OHS Policy
● return to work policy
● work/life balance policy

equity/discrimination/diversity policy

● parental leave policy


● organisational culture policy

Financial policies:

● bad debt policy


● cash reserving policy
● revenue/expenditure recognition policy.

2.11 WHS Regulations

● Work Health and Safety Act 211


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● Work Health and Safety Regulation 2017
● Dangerous Goods Act 1985

2.12 Contingency plan

Difficulties and risks:

● Problems generating visibility and awareness of the Grog Shop.


● An entry into Portland of the "conversation roundtables" or other single meeting
events.
● Lower than forecasted consumption of alcohol.

Worst case risks may include:

● Determining that the business cannot support itself on an ongoing basis.


● Having to liquidate equipment to cover liabilities

Products

Café Culture will offer its customers the best tasting coffee beverages in the area. This
will be achieved by using high-quality ingredients and strictly following preparation
guidelines. The store layout, menu listings and marketing activities will be focused on
maximizing the sales of higher margin espresso drinks. Along with the espresso drinks,
brewed coffee and teas, as well as some refreshment beverages, will be sold in the
coffee bar. Cafe Culture will also offer its clients pastries, small salads and sandwiches.
For the gourmet clientele that prefers to prepare its coffee at home, Cafe Culture will
also be selling coffee beans.

The menu offerings will be supplemented by free books and magazines that customers
can read inside the coffee bar.

3.3 Product Description

The menu of the Cafe Culture coffee bar will be built around espresso-based coffee
drinks such as lattes, mochas, cappuccinos, etc. Each of the espresso-based drinks will
be offered with whole, skimmed, or soy milk. Each of these coffee beverages is based on
a 'shot' of espresso, which is prepared in the espresso machine by forcing heated water
through ground coffee at high pressure.

Such espresso shots are combined with steamed milk and/or other additives like cocoa,
caramel, etc., to prepare the espresso-based beverages. Proper preparation techniques
are of paramount importance for such drinks. A minor deviation from the amount of
coffee in the shot, the size of the coffee particles, the temperature of milk, etc., can
negatively affect the quality of the prepared drink.

3.4 Promotion

Two thousand flyers will be distributed in the adjacent neighbourhood, on the


Educational institution campuses, at the malls and in the selected office buildings within
two weeks prior to the opening of Cafe Culture. Subsequently, free postcards with Cafe
Culture endorsement will be printed to increase the company visibility among the
patrons.

Page 33 of 42
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Market Analysis Summary

Coffee consumption has shown steady growth, with gourmet coffee having the strongest
growth. Employees, students, visitors vising Sydney CBD are growing each year. They
favour well-brewed gourmet coffee drinks and demand great service. Cafe Culture will
strive to build a loyal customer base by offering a great tasting coffee in a relaxing
environment of its coffee bar located close to bustling Broadway area.

4.5 Market Segmentation

Cafe Culture will focus its marketing activities on reaching the students, people working
in offices located close to the coffee bar and on sophisticated teenagers. Our market
research shows that these are the customer groups that are most likely to buy gourmet
coffee products. Since gourmet coffee consumption is universal across different income
categories the location will provide access to the targeted customer audience.

MARKET ANALYSIS
    YEAR YEAR YEAR YEAR YEAR
1 2 3 4 5
Potential Customers Growth          
Students and Faculty 2% 18,000 18,36 18,727 19,10 19,484
0 2
Teenagers 1% 3,000 3,030 3,060 3,091 3,122
Office workers 2% 8,000 8,160 8,323 8,489 8,659
Other 0% 5,000 5,000 5,000 5,000 5,000
Total 1.63% 34,000 34,55 35,110 35,68 36,265
0 2

4.6 Target Market

Cafe Culture will cater to people who want to get their daily cup of great-tasting coffee in
a relaxing atmosphere. Such customers vary in age. Our market research shows that
these are discerning customers that gravitate towards better tasting coffee.
Page 35 of 42
Furthermore, a lot of college students consider coffee bars to be a convenient studying
or meeting location, where they can read or meet with peers without the necessity to
pay cover charges. For us, this will provide a unique possibility for building a loyal client
base.

Cafe Culture's marketing strategy will be focused at getting new customers, retaining the
existing customers, getting customers to spend more and come back more often.
Establishing a loyal customer base is of a paramount importance since such customer
core will not only generate most of the sales but also will provide favourable referrals.

4.6.1 Market Needs

General trend toward quality among consumers definitely plays an important role in the
recent growth in gourmet coffee. Additionally, such factors as desire for small
indulgencies, for something more exotic and unique, provide a good selling opportunity
for coffee bars.

4.7 Industry Analysis

Coffee consumption is predicted to see a growth rate of 7.2% in Australia over the next
few years generating a total revenue of $6bn. The retail coffee industry is flourishing in
Australia. The local climate is very conducive to coffee drinking especially in the
mornings. In Sydney 8am is the peak time for coffee consumption. Its discerning coffee
drinkers are in favour of well-prepared, strong coffee-based beverages, which they can
consume in a relaxing environment.

4.7.1 Competition

Cafe Culture's direct competitors will be other coffee bars located in and around
Broadway area. These include Starbucks, Gloria Jeans and other Food service
establishments that offer coffee. Starbucks will definitely be one of the major
competitors because of its strong financial position and established marketing and
operational practices. However, despite of Starbuck's entrenched market position, many
customers favour smaller, independent establishments that offer cozy atmosphere and
good coffee at affordable prices.

4.8 Internal Situation

STRENGTH STRATEGY

Sales & Marketing – Currently holds largest Maintain and grow market share by improving
market share in the shopping marketing and promotions

Location within the Shopping Centre for point Provide quality products and services to
of sales generate word of mouth endorsements and
repeat business

Skills – knowledge, skills and experience of Train and develop staff to deliver superior
owners and managers in running successful quality of products and services
café businesses previously

Financial – owners’ access to financial Fund training, marketing and develop new
resources and strong cash flow from operations menu items

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WEAKNESS STRATEGY

Location – capped capacity due to floor space Investigate the option of negotiating acquisition
of additional floor space from adjoining shops
4.5 External Situation

OPPORTUNITY STRATEGY

Economy – Well positioned to take advantage Expand marketing and promotion and maintain
of a strong economy, low interest rates and prices at current market levels
high disposable income

Social Patterns – Population growth Increase advertising and investigate potential to


(residential development) and increased increase floor space
standard of living

Physical Factors – Improved public transport Increase advertising in these surrounding areas
and infrastructure to attract new clients

WEAKNESS STRATEGY

Environmental – Increased cost of utilities, Look at alternatives to develop capacity to use


such as water and electrical power gas and implement water saving policies and
practices

Strategy and Implementation Summary

5.3 Competitive Edge

Cafe Culture will position itself as unique coffee bar where its patrons can not only enjoy
a cup of perfectly brewed coffee but also spend their time in an ambient environment.
Comfortable sofas and chairs, dimmed light and quiet relaxing music will help the
customers to relax from the daily stresses and will differentiate Cafe Culture from
incumbent competitors.

5.4 Sales Strategy

Cafe Culture baristas will handle the sales transactions. To speed up the customer
service, at least two employees will be servicing clients--while one employee will be
preparing the customer's order, the other one will be taking care of the sales
transaction. All sales data logged on the computerized point-of-sale terminal will be later
analysed for marketing purposes.

In order to build up its client base, Cafe Culture will use banners and fliers, utilize
customer referrals and cross-promotions with other businesses in the community. At the
same time, customer retention programs will be used to make sure the customers are
coming back and spending more at the coffee bar.

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5.4.1 Sales Forecast

Food costs are assumed at 25% for coffee beverages and 50% for retail beans and
pastries.

SALES FORECAST
  YEAR 1 YEAR 2 YEAR 3
Sales      
Coffee beverages $350,400 $385,440 $423,984
Coffee beans $87,600 $96,360 $105,996
Pastries, etc. $146,000 $160,600 $176,660
TOTAL SALES $584,000 $642,400 $706,640
Direct Cost of Sales Year 1 Year 2 Year 3
Coffee beverages $87,600 $96,360 $105,996
Coffee beans $43,800 $48,180 $52,998
Pastries, etc. $73,000 $80,300 $88,330
Subtotal Direct Cost of Sales $204,400 $224,840 $247,324

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Management Summary

6.6 Management Team

A full-time manager will be hired to oversee the daily operations at Cafe Culture. The
candidate has had three years of managerial experience in the industry. This person's
responsibilities will include managing the staff, ordering inventory, dealing with
suppliers, developing a marketing strategy and perform other daily managerial duties.
We believe that our candidate has the right experience for this role. A profit-sharing
arrangement for the manager may be considered based on the first year operational
results.

6.7 Management Team Gap

Despite the owners' and manager's experience in the industry, the company will retain
the consulting services of ABC Espresso Services, the consultants who have helped to
develop the business idea for Cafe Culture. This company has over twenty years of
experience in the retail coffee industry and has successfully opened dozens of coffee
bars across Sydney. Consultants will be primarily used for market research, customer
satisfaction surveys and to provide additional input into the evaluation of the new
business opportunities.

6.8 Personnel Plan

The table below outlines the personnel needs of Cafe Culture coffee bar.

PERSONNEL PLAN
  YEAR 1 YEAR 2 YEAR 3
Manager $35,000 $37,800 $40,824
Baristas $50,000 $54,000 $58,320
Employees $39,600 $52,000 $56,000
TOTAL PEOPLE 7 8 8
Total Payroll $124,600 $143,800 $155,144

6.9 Training strategies

● Staff training on safe food handling

6.10 Monitoring, evaluation and feedback strategies

● Have weekly sales meetings with team and bring in outside sales professionals to
assist with the task of selling.

Page 39 of 42
Financial Plan

7.2 Projected Cash Flow

The company will maintain a healthy cash flow position, which will allow for timely debt
servicing and funds available for future development.

PRO FORMA CASH FLOW


  YEAR 1 YEAR 2 YEAR 3
Cash Received      
Cash from Operations      
Cash Sales $584,000 $642,400 $706,640
SUBTOTAL CASH FROM OPERATIONS $584,00 $642,40 $706,640
0 0
Additional Cash Received      
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $584,00 $642,40 $706,640
0 0
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations      
Cash Spending $124,600 $143,800 $155,144
Bill Payments $327,865 $388,715 $420,945
SUBTOTAL SPENT ON OPERATIONS $452,46 $532,51 $576,089
5 5
Additional Cash Spent      
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Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $3,300 $3,300 $3,300
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $3,585 $3,961
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $2,000 $2,000
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $455,76 $541,40 $585,350
5 0
Net Cash Flow $128,235 $101,000 $121,290
Cash Balance $195,358 $296,358 $417,648

Appendix

Café Culture Sales Forecast

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