Business Plan for Kings Java Coffee House
Kings Java Coffee House
Kings Java Coffee House has identified a suitable market and is resolute on becoming the coffee lovers point. A place that will be comfortable for everyone as they prepare for the day or sit down to wish away the stresses of life or even chat with friends over a cup of coffee. There is a growing demand for high quality coffee at a comfy place with great services. The proximity of the Kings Java Coffee House to a campus will help in capitalizing on this huge number of customers. The best coffee from Kings Java complemented with pastries and magazines provided to the customers will be a great attraction.
The operation of the company will be within the environs of the campus that is a walking distance and will be in a 2, 300 square foot house. With an option of extension, a five year lease has been secured. Sixty percent of the start up capital will be sourced from the bank as loans whereas the remaining forty percent will be from savings. Revenues that are expected from the investment will be $204, 400 in the first year, $224, 840 in the subsequent year and a further $247, 324 in the third year of investment. During this period the Kings Java will strive to maintain an all high gross profit of sixty percent despite the fact that it will be highly reasonable on the operating costs and billing of the customer.
The coffee business has been continually growing at a high pace in the last twenty years. This drink has become almost America’s favorite. Despite the recession that hit the world, this business seems to have defied all odds and continued to boom and expand. Coffee shops did not close down during this had time as compared to other business that packed up (Adams 2006).
General company description
During the first year in operation, the coffee house aims at being the talk of town. Customer satisfaction is very important in this respect as they will be good ambassadors. The other objective is to ensure that profits are racked in from the first month in operation as it maintains a gross profit of over sixty percent.
How to succeed
The main keys to the success of this venture will be to have an attractive environment both inside and outside of the coffee shop. The design should be specific on being fast and efficient on its operations (Adams 2006). Employees should be trained before commencement and refresher course offered in employment. Marketing and advertisements should be focused on in order to attract and maintain the already loyal customers.
The Kings Java Coffee House will be bent on creating a very conducive and relaxing environment for relaxing while enjoying a cup of coffee. The business will be focused on ensuring that all their customers are happy and help them relieve the day to day stresses of life. The ambience will provide peace of mind and should be a place that people come to relax as they experience first class hospitality at a convenient location near campus. Employee satisfaction will be important and therefore a lot of resource shall be channeled towards this area.
Company Summary-product and services
The Kings Java Coffee house will be situated at the ground floor. The premise will be 2300 square feet which previous a barber shop. The company will be deal in the preparation and sale of coffee, snacks and pastries, and other beverages. It will be situated a walking distance from campus and will sit in a 2, 300 square foot are house. Each cup of coffee will be retailing at a fee of $3. Therefore a customer will be able to take a cup of coffee with a snack with less than $5. Leasing and renovating of the premises will all be included in the star up capital of $30, 000. The main disadvantage of this venture will be that there is competition from two other coffee shops that are also interested in the students and staff from the university as kings Java Coffee house is too (Adams 2006).
There has been a steady growth in the American coffee market that has been noted in the past decade. Gourmet coffee had the best sales and growth. Students are among the most demanding for this product. They are looking for well prepared food at affordable prices and moreover at a comfortable environment with hospitable staff. With a large population and the prolonged winters that this place experiences every year, there has been a great demand for coffee. By trying to maintain it customers and attracting more, Kings Java House will experience growth.
The main focus for the entrepreneurship will be the students and staff of the university campuses. Other markets that are expected to be customers are the people that work in businesses that are not far away from the business and the trendy teenagers. The market research that was conducted showed that there is a big likelihood of getting customers. This is because coffee is a product that is taken across all the social classes from the wealthy to the highly educated persons (Haberberg & Rieple 2008). Therefore this premises and location will provide a good proximity to the targeted market.
Target Market Segment Strategy
The Kings Java House will target on a population of persons who are interested in spicing up the life with great tasting coffee and an ambient and comforting environment. These customers are expected to be drawn from all works of life their ages, gender, political affiliation or even their monthly incomes. Many of the customers, from the market research conducted, are yearning to get a taste of high quality affordable coffee. By providing this to our customers, it will provide a good and unique opportunity to develop a loyal customer base.
The desire for high quality coffee and a high end café has been very vital in the recent growth that has been witnessed in the coffee industry. People are looking for unique products that are a notch above the rest. The ability of Kings Java House to provide this will be a great advantage in competing with the existing coffee shops available or even coming up.
Oregon Food service in 1997, was the leading established snack and beverage bar with well over 40 branches with sales at $14. 2 million (Haberberg & Rieple 2008). Other coffee shops that were identified as being a threat in terms of competition to our establishment were other coffee shops that were available in the market already. Although these coffee shops did not necessarily match up to the customer expectations, they had quite as huge number of customers frequenting their shops. These coffee shops are in proximity with the new establishment that is intended. These establishments include Pete Coffee Bar and Frame Coffee bar. Kings Java Coffee House will sell itself to the customers as a quality high service industry in order to get the expected market growth. Many customers are interested in getting well prepared foods and snacks are having different tastes and preferences that will be served by Kings Java Coffee House.
Buying Patterns of niche
Great tasting coffee and its availability in different tastes and flavors will keep the customers visiting always for the favorite drink. Quick and high end services within an ambient atmosphere will attract and keep customers. Pricing of the coffee should be highly competitive in order to be a great attraction. A loyal clientele can easily be built through the provision of quality product with quality services.
Strategy and Implementation
The strategy that will be employed by the Kings Java house will be getting more customers and retaining them once they visit. Ensuring that the customers spend more in the shop and ensuring they always have a reason to smile is vital. Satisfied customers will not only generate most of the required sales but will also be able to give referrals that will further build the business. Promotions will be used as a tool of attracting more customers whereby vouchers will be offered to customers and once thy visit Kings Java five times they are entitled to a free cup of the preferred coffee.
The Kings Java Coffee Shop will brand itself by providing quality services where the patrons will visit and enjoy well brewed coffee. The ambient environment will also be an additional attraction. Quite music with comfortable sits will help in relaxing the customers and this will give Kings Java Coffee House a head above the rest.
5. 2 Sales Strategy
Sales transactions will be handled by Kings Java Baristas. At minimum, two employees will be entitled to serve the visiting clients in order to ensure fast and efficient services. One employee will be tasked with the preparation of the orders that have been placed. For the purposes of marketing, all the sales will be entered in to the computer for later analysis. In building up a good client base, fliers and banners will be necessary to be place in convenient points to show our products.
The cost of foods will be set at 25 percent for the beverages of coffee and at 50 percent for pastries and snacks. Sales are forecasted to reduce during the vacation of students from the campus since a huge number of the customers are expected to come from the university.
– Strength lies in its ability to adapt to attract clientele.
– Kings Java Coffee House will have steady revenue growth.
– Kings Java Coffee House supports sales activities through better understanding of the customers’ requirements. The company will solely be committed to satisfying the customers’ needs.
– Kings Java Coffee House leading position in terms of its fast development enables it to attract and retain new customers.
– Stiff competition is expected from similar shop already existing and possibly coming up.
– Keeping up with new trends in terms of creating comfortable environment may be costly.
– Kings Java Coffee House has the capability of restructuring its plans to create an improved organizational standard.
– The company can rebrand some of its products in order to maintain its customer satisfaction.
– The prevailing economic climate may affect the success of Kings Java Coffee House business since when a country is suffering from recession; individuals may resort to prepare coffee in their home to avoid extra costs.
– Kings Java Coffee House may face a tough competition from other companies fighting for the same market share.
Based on the SWOT analysis explicated above, a turnaround strategy may be necessary for Kings Java Coffee House in case it may make losses rather than profits (Haberberg & Rieple 2008).
The funds that will be used in this project will be sourced from two sources. Part of the start up money comes from personal savings whereas the bigger amount will be from securing a bank loan. The personal savings will amount to $40, 000 while the remaining amount will be sourced from the bank of $ 100, 000. This money will be divided into the portions that they have been allocated in the start up budget. The Bank of America lends the loan required.
The location of the Kings Java Coffee House will be at the ground floor of a commercial building. It is found at East 5th Avenue Street. The company has been able to get a five year lease for the owners of the building. The premises will be in a 2, 300 square feet room which was previously a barber shop. The lease is renewable upon the end of the said contract however this will be dependent on the strength of the business. The shop will have a 200 square feet back office with the rest of the remaining space for the coffee shop
The company will be able to offer its customers the best of coffee flavors. High quality ingredients will be vital in achieving this with the adherence to the recipe as provided. The coffee at Kings Java house will be built around coffee and the accompaniments of such like snacks. Customers will also be provided with magazines and journals as they partake of their favorite drink.
There are set legal requirements in all businesses required by the state. These legal constraints should be met to allow for the business to set off. Therefore while setting up the company it is important to make sure that all they constraints are complied with. Some of these constraints include obtaining a health certificate for the worker, getting a work permit and setting standards that befit of an area for the preparation and consumption of food.
A full time mange is required who will be overseeing the running of the daily chores of the coffee shop. The manager will be responsible for the overseeing staff, inventories, suppliers and developing marketing strategies for the company.
Since the monthly average fixed cost is $20, 000 in the first year with an average of 60%, the expected break even sales of Kings Java Coffee House sales volumes will range at $31, 000 every month. These sales are expected to be generated from the first year in business.
Projected Balance Sheet
Adams, W. (2006). Avon in Germany and the United States. Journal of economic Perspectives, 20(1), pp. 189-205.
Haberberg, A. & Rieple, A. (2008). Strategic Management: Theory and Application. London: Oxford University Press.
Hill, C. & Jones, G. (2012). Strategic Management: An Integrated Approach, Mason, Ohio: Southern Western Cengage Learning.