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Coffeehouse Business PlanDark Roast JavaThis business plan was created with Business Plan Pro software, the fastest way to prepare a complete business plan.
With Business Plan Pro, you can open this plan (or any of the 500 others included in the product) and quickly customise it to match your business. Or you can use the software's step-by-step wisard to easily create a custom business plan from scratch. Learn more »   Strategy and Implementation Summary5.0 Strategy and Implementation Summary The Dark Roast Java coffeehouse uses a strategy of total quality - in product and service. Our promise is in our location, the products we sell, the people we attract and the atmosphere we create. Strategic Assumptions:
5.1 Competitive Edge Our competitive edge, compared to the other coffeehouses in the greater Pleasantville area includes the following:
5.2 Marketing Strategy Other coffeehouses rely almost entirely on word-of-mouth marketing to generate business. We will engage in an ongoing aggressive marketing programme that will help us establish profitability quickly and set the stage for continual growth. Our strategy will be to position Dark Roast Java as the "Lexus" of coffeehouses, offering a high quality product and superb service in a superior environment. 5.2.1 Launch Marketing Most coffeehouse chains do little or no marketing and advertising. For example, Starbucks' philosophy is that their ubiquity in the marketplace is all they need to sustain and grow their customer base. They spend less than 1% of gross revenues on advertising, and when they do spend, it is usually to introduce a new product. The retail coffee industry is a sales-oriented business with historically very little experience in marketing and advertising. This is likely why little is done. As yet, the major players have not been taken over by sophisticated companies like Pepsico, where marketing is viewed as essential to gaining market share. An element of our differentiation from other coffeehouse chains will be our use of advertising and marketing to gain awareness, build customer traffic and establish a strong brand image. We intend to create immediate customer awareness and not wait for word-of-mouth. We are also building customer traffic immediately with an aggressive Launch Marketing Plan. Launch Marketing Launch marketing will promote awareness, build immediate traffic and establish our brand image via several methods:
Public Relations A strong public relations/publicity programme uses as its primary "hook" these three main points:
The goal of the PR/publicity is to achieve local market awareness and establish the brand on a wider scale to set the stage for future expansion. Local market awareness is vital because more than 50% of sales will come from people living within a 5-mile radius of the store. National awareness will help drive the expansion by generating opportunities created by the media buzz and familiarising people with our brand name. It will help set the stage for future brand identification. Local Media
Regional/National Print Media
National Broadcast Media
Direct Mail
Website Our website is fully e-commerce functional and could easily become a significant revenue source. We will eventually sell the following items online:
And in a first for any coffeehouse in the world, we will also sell a catalogue of glass artwork representative of our store decor. We will act as the sales agent for a number of participating stained glass, and art glass artisans. The website also markets Dark Roast Java with:
Most of these functions are already up and running. Trend-setters Pleasantville and the southern part of the state are home to thousands of individuals who can be important to the successful positioning of Dark Roast Java. One mention on a TV talk programme or in a 'lifestyle' magazine can (and has) launched many successful careers and businesses. With literally hundreds of celebrities and wealthy business people as local residents, the word-of-mouth recommendations from these people can drive significant business to us as well as generate favourable publicity. Many celebrities visit Pleasantville or have second homes here. The wife of the billionaire owner of Nationwide Communications owns the Pleasantville newspaper. A former actor owns a local vineyard and is a major hotel developer. Politicians and entertainers have interests in several restaurants. Our Mount Hill location will be in a building owned by a clothing brand multi-millionaire. Celebrities in Pleasantville are also actively involved in the community, many supporting several local charities. Our involvement in the community will enable us to garner exposure for Dark Roast Java among an important group of local residents. Key individuals will be targeted with gift baskets from Dark Roast Java containing samples of our products to entice them to visit Dark Roast Java and talk about us with their friends. Design style The interior design of Dark Roast Java is unlike any other coffeehouse chain. While there are some upscale designs, they are all of the modern Italian or Starbucks look. Our upscale stylised "Côte d'Azur" Mediterranean Riviera design, featuring stained glass decorations, art glasswork, differentiates us from all others. Gift Items We carry a wide variety of quality gift items, including gift baskets. Gift basket business could eventually grow to be substantial. However, since it is difficult to project at this time we have not included it in the financial computations. We also offer sales of stained glass and glass artwork by the artisans who produced our decor furnishings. Community Involvement We will make ourselves an integral part of the local and world community. This will generate goodwill, create opportunities to forge important contacts with key people and live up to our company Mission Statement. Some of these community involvement goals include:
Location The location of the first Dark Roast Java in Pleasantville is a prototype of future sites. Our second site on busy Shoreline Road in Mount Hill will feature our flagship store. It will be located just off the Oak Patch Road and Highway 66 exit, across from the Mount Hill Inn and The Junction Restaurant. It is by far the best location in Mount Hill - one of America's most affluent cities. We will build Dark Roast Java coffeehouses in the best locations possible, as this is the key element in a successful operation. Site selection criteria include:
Other sites that meet these criteria include Newburg, Springfield, Bayview, Shorewood, Orchard Valley, Beachey Head, and Capital City. Exceptions will be made for some sites if they are deemed to be potentially very profitable. Sites in other states might include Utah, New Mexico, Oregon, Washington, Montana, Idaho, Colourado, etc. Plans are to locate Dark Roast Java coffeehouses in the Western states for efficiency of supply and management. Outside Dining The coffeehouse/cafe experience is indelibly linked to its European origins, where al fresco dining is a way of life. Americans have embraced sidewalk dining. It is one of the fastest growing additions to the American dining scene. Sidewalk dining also provides an excellent way for prospective customers to see and "check out" the coffeehouse for the first time. Sampling We will engage in several sampling activities to introduce potential customers (and current customers) to Dark Roast Java's range of drink options.
Portable Kiosk Within 6 to 8 months we will create a portable Dark Roast Java kiosk to sell and market our products at special events and community activities. Pleasantville has more than 130 such events every year. It will be an excellent way to publicise Dark Roast Java coffee. The kiosk will be highly visible and fun. It will also potentially be very profitable, although it's hard to determine how profitable with any accuracy until the local response is measured. We believe it could generate £75,000 - £100,000 annual revenue. Pre-paid, re-loadable, frequency and discount cards We will promote our programme of gift cards and customer frequency cards to drive business and stimulate cash flow. Industry records indicate that 25% - 40% of all gift card amounts go unused. Also, gift cards have proven to be a popular holiday item accounting for more than 5% of total sales during December. Pre-paid and re-loadable cards have also proven to be very popular with the major chain coffeehouses, again accounting for a significant percentage of sales. These cards promote customer loyalty as well. Frequency cards rewarding the repeat customer with a free drink after a specified number of visits are popular and proven methods to forge customer loyalty. Discount cards are used to build goodwill among specific groups such as the Chamber of Commerce members and college students. By tying in with our computerised sales and stock system we will be able to track usage and allocate the expense to marketing. The Future The number of Dark Roast Java locations could easily reach 20 - 25 within five years. While the financials in this Business Plan only address the Pleasantville location, we can extrapolate from the store's performance (which will be carefully monitored and tracked) to get a general idea of the chain's projected profitability. With ten coffeehouses the gross revenues, when fully realised, would be more than £10 million using the third year performance figures. Even factoring in the cost of additional staff and other resources, a 10-store chain would likely generate a minimum of £1 million in profits annually, while building significant valuation. A 25-store chain would easily top £2.5 million in annual profits. Dark Roast Java's start-up, implementation and operation in Pleasantville will be the "blueprint" for future efficient expansion. Our new Mount Hill location will incorporate the knowledge we gain with our first store as well as new creative ideas, and become our "flagship" operation. Sources: SRDS, Interep Radio, Scarborough Market Data Survey. 5.3 Sales Strategy Our sales strategy includes:
Key Strategy: an advanced and expandable point-of-sales system After carefully tracking the performance of the Pleasantville store through an expandable and highly detailed point-of-sale system, we will use this as a "blueprint" for expansion. For example, daily sales are tracked and analysed by item, time period and cost of goods. Labour requirements are matched to projected in-store sales based upon past performance for maximum efficiency. Even after paying higher than average wages we expect to allocate no more than 25% to labour costs. Sales are linked to stock to both streamline the efficiency of ordering and reduce "shrinkage" by instantly alerting us to unusual shortages compared with revenues. Scheduling can be done online and easily revised to accommodate changes - all while projecting weekly, monthly, quarterly or annual labour costs. Schedules can be sent via email to staff members. Cost of goods can be monitored for increased efficiency too. As we continually research methods of delivering a high quality but cost-efficient product, and by making small incremental improvements in the costs of items we expect to increase overall COG by a minimum of 5% during the first year of operation. As expansion occurs, the POS system can be adapted to each individual location and allow the central office to monitor the stores remotely as well as the overall combined operation. Close monitoring will allow us to achieve a high level of communication between stores as well as spot problems immediately and take corrective action. 5.3.1 Sales Forecast Conservatively, we are forecasting an average of 300 customers per day during the first year with an average guest check expenditure for all items of £4.10. This figure was arrived at by surveying the customer traffic at the nearest competing coffeehouses which have a range of 150 - 500 customers per day and an average customer expenditure of £4.10. We have estimated our customer expenditure to be slightly higher (2.5%) due to the premium price we will charge for some of our items. Total cost of sales is approximately 25%. We expect growth to occur across all categories at about 10% annually as the business becomes more established and well-known, reaching 400+ customers per day within a year and more than 500+ within three years. These estimates are likely conservative. However, it is possible we could attain a 1,000-per-day customer count within three years. Sales Forecast
Sales Monthly  Sales by Year  5.4 Milestones The accompanying table lists important programme milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation. A similar milestone development programme will be developed for our Mount Hill location to insure its timely execution. What the table doesn't show is the commitment behind it. Our business plan includes complete provisions for plan-vs-actual analysis, and we will hold follow-up meetings every month to discuss the variance and course corrections. Milestones
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