Business Plan
Prepared for:
Management and Future Investors
Prepared by:
Toni-lynn Beckman
Justin Bowes
Les Fleur Café | Business Plan
Table of Contents
1
Executive Summary .......................................................................................................................................... 3
2
Business Overview............................................................................................................................................ 5
2.1 Introduction ............................................................................................................................................... 5
2.2 Mission Statement ................................................................................................................................... 5
2.3 Vision Statement ...................................................................................................................................... 5
2.4 Goals and Objectives ............................................................................................................................... 5
2.5 Industry Overview ................................................................................................................................... 6
3
Operations Plan ................................................................................................................................................. 8
3.1 Hours of Operation .................................................................................................................................. 8
3.2 Legal Structure .......................................................................................................................................... 8
3.3 Location ....................................................................................................................................................... 8
3.4 Floor plan .................................................................................................................................................... 9
3.5 Suppliers ..................................................................................................................................................... 9
3.6 Average Business Cycles ..................................................................................................................... 10
3.7 Capital budget......................................................................................................................................... 11
3.8 Operating Expenses .............................................................................................................................. 11
4
Human Resources Plan ................................................................................................................................ 12
4.1 Job Descriptions & Qualifications ................................................................................................... 12
4.2 Training Programs ............................................................................................................................... 13
4.3 Management and Labor Costs........................................................................................................... 14
4.4 Planned New Positions ........................................................................................................................ 15
4.5 Wages and Benefits .............................................................................................................................. 15
4.6 Organizational Structure .................................................................................................................... 15
5
Marketing Plan ................................................................................................................................................ 16
5.1 Products & Services: ............................................................................................................................ 16
5.2 Pricing Policy: ......................................................................................................................................... 17
5.3 Promotions .............................................................................................................................................. 17
5.4 Marketing Strategy ............................................................................................................................... 19
5.5 Place: Market & Distribution ............................................................................................................ 20
5.6 Segmentation, Targeting, Positioning ........................................................................................... 21
5.7 Competitive analysis ............................................................................................................................ 22
5.8 Marketing Expense Projections ....................................................................................................... 24
5.9 SWOT Analysis ....................................................................................................................................... 24
6
Financial Plan .................................................................................................................................................. 25
6.1 Debt/Equity structure ......................................................................................................................... 25
6.2 Loan Amortization ................................................................................................................................ 25
6.3 Dividend Policy ...................................................................................................................................... 26
6.4 Economic Forecast ................................................................................................................................ 26
6.5 Ratio Analysis ......................................................................................................................................... 26
6.6 Sensitivity Analysis............................................................................................................................... 26
6.7 Investment Analysis ............................................................................................................................. 27
6.8 Break Even ............................................................................................................................................... 28
6.9 Summary of Financial Results .......................................................................................................... 29
7
Conclusion ........................................................................................................................................................ 29
8
Appendixes ....................................................................................................................................................... 30
8.1 Appendix A: Financial Projections .................................................................................................. 30
8.2 Appendix B: Floral Pamphlet ............................................................................................................ 30
8.3 Appendix C: Competitors Locations ............................................................................................... 31
9
References ........................................................................................................................................................ 32
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Les Fleur Café | Business Plan
1 Executive Summary
Les Fleur Café is a proposed floral design boutique and premium coffee destination in the
heart of the Financial District of Toronto Ontario. It will be a unique company as it is
composed of two different segments, specialty coffee and corporate floral services.
Through specialization in corporate floral services and occasion bouquets, Les Fleur Café
can help corporate clients realize their goals of expressing and enhancing their corporate
brand, vision, values, and esthetics. The café segment will utilize unique infrastructure
and design to create an escape from the office for working individuals. Using ultra
premium fresh roasted beans and having industry leading staff will ensure quality and the
perfect cup of coffee.
Operations:
Les Fleur Cafe will be located at 40 King Street West, in the Scotia Plaza. 900 square feet
will be renovated on the ground floor of the building to create an exceptional, unique
surrounding. Les Fleur Cafe is located central to its primary suppliers, who provide fresh
baking, flowers, and coffee beans. Le Matin will supply baked goods on a daily basis,
Dark City will supply fresh roasted beans on a three-day cycle, and the Ontario Flower
Market will be the source for fresh, beautiful bulk flowers.
Human Resources:
Les Fleur Café will be open Monday to Saturday, 6:30 a.m. to 5:30 p.m. and will employ
ten individuals: Four full time staff and six part time staff. Full time staff will be
comprised of two head managers (company owners), two department managers, three
baristas, two floral assistants and one delivery person. Each employee will work one of
the two daily shifts, having an average shift time of 6 hours, with the delivery person
working approximately 4 hours each shift. Head management will receive a yearly salary,
with all other employees paid a wage. Les Fleur Café will have a number of employee
benefits and employees will be paid a wage that is at the high end of industry average. It
will be a company that prides itself on superior quality, with premium products and
highly experienced, industry educated employees.
Marketing:
Les Fleur Café will be comprised of two main products, floral bouquets and fresh roasted
coffee. With these products the company will provide a number of services, as detailed
below:
Floral:
 Occasion bouquets
 Corporate company contracts
 Complimentary value-ads
 Floral delivery
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Les Fleur Café | Business Plan
Café:
 Fresh roasted beans
 Fresh baked pastries
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Beverage creation
Superior service
Unique infrastructure and design
The floral segment of Les Fleur Café will strive to maintain competitive pricing, while a
differentiated pricing strategy will be the best option for the café segment. In terms of
promotions a variety of different strategies will be implemented, as follows:
 Grand opening
 Van wrap
 Free French press day
 Referral rewards
 Value card
 General media
 Corporate card
 Word of mouth
The company will have competitors; though for the floral segment of Les Fleur Café
there is currently only one direct competitor within the financial district, Ring &
Associates. Other floral service companies within the region include Funeral Services
Floral, Tidy’s Flowers, and EcoStems but research shows that they will not be in direct
competition with Les Fleur Café. The café segment’s competitors include La Prep,
Timothy’s, Tim Hortons, Starbucks and Second cup but none of these companies offer
French pressed coffee or ultra premium fresh roasted beans. Starbucks and Second cup
are the closest in similarity to Les Fleur café but are still lacking the quality that this
company will have.
Financial:
Les Fleur Café will need $100,000 debt financing and $200,000 equity financing in order
to pay for leasehold improvements, inventory, and equipment. With a low debt ratio risk
is decreased. By keeping minimal debt and avoiding large long term expenses like
buildings and land Les Fleur Cafe can keep the majority of its costs variable and thus is
less likely to go under if hit by unexpected events. With an IRR of 77.7% and projected
breakeven after the first year of sales, followed by upward trends, it is apparent that Les
Fleur Café could be a very successful business. From Appendix A: Financial Projections
it is shown that expected Revenue in the second year could be $82,000 increasing to
$1,929,135 by year five. Finally, with a set ROI of 28% investors should be confident
that they will see returns, financial projections showing expected payouts of dividends by
year three.
By taking advantage of the gap in premium coffee suppliers in Toronto's financial
district, Les Fleur Cafe can create a strong brand that will grow quickly and steadily over
time. Coupling a floral business with a cafe allows Les Fleur Cafe to create a unique
atmosphere as well as secure its prime location while maximizing profit. Les Fleur Café
has the potential to be a stable and profitable staple in Toronto's financial district.
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Les Fleur Café | Business Plan
2 Business Overview
2.1 Introduction
Les Fleur Café will be a floral design boutique and premium coffee destination in the
heart of the Financial District in Toronto Ontario. Les Fleur Café will be a unique
company in that it is composed of two different segments, specialty coffee and corporate
floral services, with all products being entirely locally sourced. Through specialization in
corporate floral services and occasion bouquets, Les Fleur Café can help corporate clients
realize their goals of expressing and enhancing their corporate brand, vision, values, and
esthetics. The café segment utilizes unique infrastructure and design to create an escape
from the office for working individuals. Using ultra premium fresh roasted beans and
having industry leading staff ensures quality and the perfect cup of coffee. With a focus
on pressed coffee (French press) and espresso beverages the café is set apart from the
average coffee shop with drip made coffee. Les Fleur Café combines its unique offerings
to provide Toronto’s Financial district and beyond with something entirely different and
unique to the market.
2.2 Mission Statement
“Les Fleur Café captures corporate value and enhances a brand’s vision through creation
of fresh floral bouquets. With this, offering a unique coffee experience and atmosphere
in providing Toronto’s Financial District with ultra premium, superior quality coffee.”
2.3 Vision Statement
“To become Toronto’s leading provider of upscale bouquets for the corporate industry
and floral devoted soul. Additionally, to be a café where one can grab a coffee on the run,
or stay and experience a unique escape from the workplace.
2.4 Goals and Objectives
Short-term:
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Obtain a bank loan of $100,000 and equity of $200,000 to support start-up costs and
expenses.
Develop Les Fleur Cafés brand and market in the Financial District
Create strategic relationships with customers to ensure repeat purchases
Obtain 5 large scale Corporate Floral contracts by end of year one
Average 260 café customers/day in year 1
Break-even by the end of year 2
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Les Fleur Café | Business Plan
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Payout Dividends to investors by end of year 3
Be reviewed by BlogTO, one of Toronto’s most respected blogs, and listed as “The
Best of Toronto” for both Café and Floral components
Medium-term:
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Provide equity investors with Return on Investment of 25% or greater
To expand floral operations in year 4: new production space
Finance expansion internally
Expand floral services from the Financial District to the GTA
Long-term:
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Increase and maintain brand awareness with extended quality and excellence in both
components of the company
Maximize sales to continually increase financial performance
Strive to be nominated for the Business Excellence Consumer Choice Award:
Toronto Florist, to increase company recognition
Win the Business Excellence Consumer Choice Award
2.5 Industry Overview
Floral:
“The best florists in Toronto are akin to your indispensable best friends” (Urback, 2012)
According to American Society of Florists (SAF) in 2012 there were approximately
19,609 florist establishments in the United States with $6.2 Billion in sales (Society of
American Florists, 2012). The Ontario floral market has approximately $784.8 million in
sales per year, the Toronto Yellow Pages showing that there are 160 florists located in the
GTA alone (Canadian Industry Statistics, 2012). The Corporate floral sales industry
makes up approximately 17-22% of average retail floral sales. As Les Fleur Café
specializes in corporate floral sales this low percentage could put the company at a
disadvantage. Consumer demographics find that the average floral consumer is college
educated, employed full time and earning over $75,000 a year (Canadian Industry
Statistics, 2012). In 2010 Canadian Florist operating revenues were approximately $750
million, a 5.5% increase from 2009 (Canadian Industry Statistics, 2012). As of 2010 the
Florist industry had experienced many changes, with increases in online shopping,
changing consumers and new competitors. According to Amanda Ryder from Canadian
Florist Magazine, some challenges that florists face include a shrinking industry, pricing
pressures, added competition, the move to online and the need for a business mindset
(Ryder, 2010). Though, it is also mentioned that if a company can successfully watch
costs and be aggressive in the market, they will succeed as a florist (Ryder, 2010).
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Les Fleur Café | Business Plan
As Les Fleur Café will be owned and ran by two individuals with a business background
and a business education, proper management will be carried out. With the shrinking
industry in mind, it is apparent that this consists largely of sales from occasion bouquets
and events like weddings. As Les Fleur Café specializes in corporate floral sales vs.
events, the company has an advantage over competitors in that large-scale companies will
continue to need floral services in order to maintain company esthetics and impressions.
Also, the corporate industry is continually expanding, with the financial district always
developing, showing that this market is actually growing.
Café:
“Toronto has become a city that runs on coffee, our downtown is thoroughly caffeinefuelled” (Yonge Street, 2010).
2011 combined revenues for U.S. coffee shops was $10 billion, with gross margin being
approximately 85%, and an operating income averaging 2.5% of net sales (SBDC Net ,
2012). The Café industry is a labor-intensive field that places a premium on friendly,
energetic staff (SBDC Net , 2012). It has been found that most adult coffee drinkers form
their lifelong habit in their teens, which means gaining a customers loyalty could cause
for repeat purchasing for many years (SBDC Net , 2012).
According to the Small Business Development Center (SBDC), “coffee consumption is
expected to increase through 2015 at an average annual rate of 2.7%, with positive
expectations for continued growth in coffee sales, despite its mature product position in
the market” (SBDC Net , 2012). This being due to advances in premium coffee products.
2012 statistics also found that though economic uncertainty exists, consumers are still
purchasing premium coffee and visiting local cafés. 60% of coffee is consumed at
breakfast, with patrons being younger, more affluent and educated (City of Toronto,
2012).
Consumers are more likely to have a household income of $100,000, recent stats showing
65%. This means that consumers are able to afford the price premium that comes with
high quality beans. Within the United States café industry 70% of sales are generated for
the top 50 coffee shops (SBDC Net , 2012). The probability of similarity in percentage
for Canadian statistics is high; with humble independently owned shops competing
against reputable franchises like Starbucks and Time Horton’s. As Les Fleur Café is not a
franchise it will have to compete for a portion of the other 30% of sales in the Canadian
café market. The large number of cafés already in existence in Toronto presents a
challenge. According to the National Post, the number of coffee shops in Toronto has
been rising drastically over the past decade, with independent cafes budding and
succeeding in areas throughout the city (Yonge Street, 2010; Society of American
Florists, 2012). With hundreds of cafés already in existence in a largely saturated market,
Les Fleur Café will have to compete for sales, though the fact that independent café’s are
ever increasingly successful is positive.
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Les Fleur Café | Business Plan
3 Operations Plan
3.1 Hours of Operation
Hours of operation at Les Fleur Café will be:
Monday- Saturday: 6:30 a.m. to 5:30 p.m.
The store will be closed Sunday’s and statutory holidays.
3.2 Legal Structure
Les Fleur Café will incorporate in order to obtain equity investment in support of
financing costs. This is strategically beneficial for this company as it decreases the need
for greater debt financing and therefore decreases risk. There are also valuable tax
deferrals, like the small business tax deduction.
3.3 Location
Les Fleur Cafe will be located at 40 King Street West, Toronto Ontario in the Scotia
Plaza. 900 square feet will be renovated on the ground floor of the building to create an
exceptional, unique surrounding. The Scotia Plaza is a prime location for this company
because it is located in the very busy financial district of Toronto, where a large portion
of our target market is situated. Scotia Plaza provides tenants with a secure business
environment, it has food and retail services nearby to bring in coffee consumers and it is
directly linked to the underground PATH system and pedestrian walkway. Also, with 68
floors of business offices the building has numerous companies for Les Fleur Café to
target. The store will be located near the entrance of the PATH system and will be
separate from the food court located within the mall. Les Fleur Cafe will include a seating
area, two separate areas for coffee and flower preparation, a display/cooler for flower
storage, a general storage room, and a washroom. Along the walls of the location will be
a living green wall that will serve to both create a unique environment as well as
contribute to air quality.
Figure 3.3 Green Wall
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Les Fleur Café | Business Plan
Figure 3.3.1: Scotia Plaza Location
3.4 Floor plan
Figure 3.4: Proposed Floor Plan
3.5 Suppliers
Les Fleur Cafe is located central to its primary suppliers, who provide fresh baking,
flowers, and coffee beans. Le Matin will supply baked goods on a daily basis, Dark City
will supply fresh roasted beans on a three-day cycle, and the Ontario Flower Market will
be the source for fresh flowers. This will allow Les Fleur Cafe to compensate for
unexpected supply shortages almost immediately, as all suppliers are very close in
proximity to Les Fleur Café. In addition, it will serve to foster better relationships with
suppliers via face-to-face communication and establish legitimacy in the community by
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Les Fleur Café | Business Plan
sourcing everything locally.
Figure 3.3: Supplier Proximity
A: Les Fleur Café
C: La Matin
B: Dark City Roastery
D: Ontario Flower Market
3.6 Average Business Cycles
Average Day:
Les Fleur Cafe will open at 6:00 a.m. and close at 5:30 p.m. Monday through Sunday,
300 days per year (everyday besides Sundays and statutory holidays). Before opening
each day, the van operator will collect freshly roasted beans (every three days or as
needed), flowers from market (as required), and fresh baking from the nearby suppliers.
Upon bringing them into the Cafe, the beans and flowers will be stored in their respective
areas and the pastries will be displayed. Minor store preparations will begin at 5:30 and
by 6:00 the Cafe manager and Barista will be serving coffee to customers. The Floral
Manager will begin their inspection of the flower inventory and begin designs for
corporate clients. The floral assistant will continue the creation of bouquets designed by
the floral manager for corporate clients and serve walk in customers with occasion
bouquets. At 8:00 am the van operator will begin delivering the corporate bouquets
required for the day to clients. Lunch break will be at 10:30 and the second shift will
come in at 12:00. The second shift will continue work in the same fashion as the first,
clearing tables as required. At 5:30 pm Les Fleur Café will close to customers, at which
point cleaning and storing will happen until they are dismissed at 6:00 p.m. Throughout
the day the owners may engage in sales meetings with prospective floral customers and
engage in other marketing activities as needed.
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Les Fleur Café | Business Plan
Average Month:
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Prospect new potential floral customers
Pay rent, utilities, and debt
Average Year:

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Review revenue data and plan supply orders accordingly
Prepare income tax
3.7 Capital budget
As seen below, furniture and fixtures will cost approximately $75,000, while Leasehold
improvements will have an expense of $75,000. There are added capital expenses in the
fourth year due to an expansion of the floral segment. Average days inventory will be
four days, with no accounts payable as we pay all supplies upfront.
Figure 3.7 Capital Budget Schedule
3.8 Operating Expenses
Figure 3.8 Operating Expense Schedule
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Les Fleur Café | Business Plan
4 Human Resources Plan
Les Fleur Café will employ ten individuals: Four full time staff and six part time staff.
Full time staff will be comprised of two head managers (company owners), two
department managers, three baristas, two floral assistants and one delivery person. Each
employee will work one of the two daily shifts, having an average shift time of 6 hours,
with the delivery person working approximately 4 hours each shift.
Shift 1: 5:30 a.m. - 12:00 p.m.
Shift 2: 12:00 p.m. - 6:00 p.m.
4.1 Job Descriptions & Qualifications
Head Managers (2):
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Business Management Experience
Business Education (Bachelor of Commerce Degree)
Oversees operations
Hiring/firing of staff
Accounting/bookkeeping duties
Purchasing
Scheduling
Pricing
Marketing
Attend corporate contract meetings (with Floral designer)
Floral Designer/Manager:
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Canadian Accredited Floral Designer (certificate program)
5+ year pervious corporate floral design experience
Attend corporate contract meeting
Ensure continual goodwill with contract clients
Create a floral concept to match corporate vision and values
Approve bouquets created by the floral assistants
Create floral orders
Oversee all floral operations
Prepare flowers for storage when they come into the store
Create in-store display arrangements to match Les Fleur Cafés esthetics
Ensure customer satisfaction
Café Manager:
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2+ year pervious café management experience
4+ years barista experience
Order coffee beans the day prior to pick-up
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Les Fleur Café | Business Plan
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Restock café supplies
Train new Baristas
Ensure coffee quality
Answer to head management
Inform head management of café issues or concerns
Attend barista interviews
Perform knowledge testing on new baristas
Barista (3):
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At least 5 months previous barista experience
Food safety accreditation
Perform customer service duties (take orders, prepare beverages, serve customers)
Perform general cleaning duties (clean tables, sweep, restock)
Grind coffee beans
Ensure customer satisfaction
Floral Assistants (2):
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Create bouquets based head designers vision
Assist floral designer with creating bouquets
Take occasion bouquet orders (in person & over the phone)
Prepare occasion bouquet orders
Perform general cleaning duties (sweep, wash buckets, organize workspace)
Forward contract inquiries to head floral designer & head management
Serve walk-in customers
Provide advice on arrangements, floral types, care and maintenance
Delivery/ Supply retrieval Personnel:
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Deliver arrangements
Go to corporate locations to resupply flowers & retrieve old bouquets (weekly or biweekly)
Ensure delivery paper signing
Pick-up supply orders (coffee beans, pastries & flowers)
4.2 Training Programs
General Training:
All employees will be expected to attend a seminar led by head management. The
seminar will instill company goals, values, and strategies, along with outlining rules and
guidelines that all employees are expected to follow.
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Les Fleur Café | Business Plan
Floral Assistant Training:
On the job training will consist of a requirement to shadow the floral designer for the first
week of their employment. As they will be working very closely with the designer it is
crucial that they understand the designers techniques and mimic these techniques. The
designer and assistants must have the same design visions and a mutual understanding of
goals. Shadowing will consist of:
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Attending 1 corporate contract meeting
Watching the designer create numerous bouquets and copying the procedure
Create test bouquets to be approved by the designer
Barista Training:
On the job training will consist of the Café manager teaching new baristas how to make a
perfect coffee the “Les Fleur” way, along with learning general operations and
techniques. They will also shadow an existing barista staff for 3 hours. New Baristas will
learn café procedures by seeing first hand how is it done, after 3 hours of shadowing they
will have a practice round with “test” customers.
Delivery/Pickup Personnel:
New delivery/pickup personal will be instructed on the exact procedures and operations
to follow by going with a member of head management from each department to pick up
all supplies and to do numerous floral deliveries. This will ensure that all tasks are
completed properly once this individual is on the job alone.
4.3 Management and Labor Costs
Average Canadian wages for required employees according to Payscale Canada:
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Floral Designer: $10.67 - $18.42 (Payscale, 2012)
Florist: $9.98 - 23.11 (Payscale, 2012)
Café Manager: $10.47 - $22.51 (Payscale, 2012)
Barista: $8.92 - $12.30 (Payscale, 2012)
Delivery/Pickup Personnel: $11.12 - $22.06 (Payscale, 2012)
Les Fleur Café will pay its employees a wage at the higher end of industry average. This
being because it is intended to be a company that prides itself on superior quality, with
premium products and highly experienced, industry educated employees. The following
outlines employees starting wages per hour:
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Barista & Delivery/Pickup Personnel: $13.00
Floral Designer/Manager & Café Manager: $21.00
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Les Fleur Café | Business Plan
As head management has the largest responsibility and are also the company owners they
will be paid a starting yearly salary of $40,000 each. It is estimated that total salaries and
wages, for the first year of operations, are expected to be $341,856.
Training will not add significant costs, as employees will receive their regular wage while
taking part in on the job training.
Please refer to Appendix 1 (Schedule 4) for detailed calculations of management and
labour costs.
4.4 Planned New Positions
With the planned floral expansion within Les Fleur Café’s fourth year of operations the
company will need to acquire more floral staff. As the goal of the expansion is to
increase floral contract capacity, another floral designer and one or two floral assistants
will be needed, depending on demand.
4.5 Wages and Benefits
Head management will receive a yearly salary, with all other employees paid a wage. Les
Fleur Café will have a number of employee benefits. Contributing to Unemployment
Insurance, Canadian Pension Plan and Workers Compensation. Also giving vacation pay,
with entitlement of minimum two weeks of vacation with pay after each 12 months of
employment.
4.6 Organizational Structure
Figure 4.6 Organizational Chart
Owners/Head
Management
Cafe Department
Manager
Barista 1
Barista 2
Floral
Department
Manager/Head
Designer
Delivery/Pickup
Personnel
Barista 3
Floral Assistant 1
Floral Assistant 2
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Les Fleur Café | Business Plan
5 Marketing Plan
5.1 Products & Services:
Les Fleur Café will be comprised of two main products, floral bouquets and fresh roasted
coffee. With these products the company will provide a number of services, as detailed
below:
Floral Segment: Bouquets
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Use fresh flowers to create exceptional bouquets with unique designs.
Corporate Bouquets - express and enhance a client’s corporate brand, vision, values
and increase esthetics.
Company contracts - floral accounts with a bi-weekly automatic account charge
Floral delivery- going to corporate locations to resupply flowers & retrieve old
bouquets (weekly or bi-weekly)
Floral Tutorial Classes – Once every 3 weeks customers will be able to come into the
store to learn how to create their own personalized professional bouquet.
Occasion Bouquets- floral arrangements for any occasion (celebration, hardship, etc.)
Complimentary value- ads – cards, vases and added ornaments to enhance an
occasion bouquet
Café Segment: Coffee & Pastries
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Fresh roasted beans - Ultra premium fresh beans appeal to coffee connoisseurs or the
average consumer.
Fresh baked pastries – Delivered daily, purchased from the esteemed bakery La
Matin
Beverage creation- French press, Latte, Americano, etc.
Superior service - Experienced Baristas ensures the best coffee, every time
Unique infrastructure and design - creates an escape from the workplace
Coffee Delivery – delivering large portions of coffee (carafes) and pastries to nearby
business offices to be enjoyed at meetings or conferences.
Café provides the opportunity to grab a coffee and go, or stay for a meeting and share
a French press.
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Les Fleur Café | Business Plan
5.2 Pricing Policy:
Floral:
The floral segment of Les Fleur Café will strive to maintain competitive pricing. Doing
so will ensure that they are in line with competitors and prevent a loss of sales based on
pricing.
Café:
The café segment will have a focus on premium coffee, being that the beans will be some
of the highest in quality that are currently available. Encompassing unique features that
set Les Fleur Café apart from competitors, along with ultra premium status, value is
ensured. This being said, a differentiated pricing strategy is the best option for the café
segment of this company.
5.3 Promotions
Grand Opening:
The Grand Opening will run during regular business hours, 6:30 a.m. to 5: 30 p.m. during
witch time all management of Les Fleur Café will be present. The store will be in full
production; the café and the floral creation department will be running with promotions
going on. These promotions will consist of in store discounts for the day of the opening,
with decorations, free snacks, and a very upbeat environment. There will also be
complimentary takeaway coffee mug bouquets that include a brochure that will provide
more information on the company (as seen in Appendix B). A business card and a coupon
to be used at a regular date will also be included, which will hopefully increase return
customers.
Figure 5.3 Mug Bouquet Takeaway
Figure 5.3.1 Les Fleur Café Business Card
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Les Fleur Café | Business Plan
Free French Press Day:
For every year following the grand opening, Les Fleur Café will have a Free French
Press day to be held on the day the store opened; all customers who come into the store
will receive a free press of fresh coffee. Holding this event each year will retain and
increase goodwill, celebrate the company’s years in business, and show our customers
that we value their patronage.
Value Card:
The value card will be a membership that customers can obtain free of charge. The
customers name is kept on file and with each purchase their card will accumulate points
via a card punch system, once customers reach certain point levels they will be eligible
for in store rewards that consist of floral discounts and free coffee.
Executive Card:
With a personal Executive Card customers will receive 10% off the price of all coffee
purchases from Les Fleur Café. The executive card will be distributed to executives in
offices within the Scotia Tower during the first week of Les Fleur Cafés operations.
Having the card will increase the likelihood that these corporate individuals will come
into the store.
Van Wrap:
The van wrap will increase the company’s visibility within the city and therefore increase
word of mouth. It will accomplish general marketing, as our logo, address, and phone
number, along with pictures, will be on display through quality graphic design.
Figure 5.3.2 Van Wrap Example
Referral rewards:
Regular customers will be given the opportunity to receive added benefits by referring a
friend to visit Les Fleur Café and make purchases, whether it is with the café or the floral
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services. If a new customer comes into the store and advises a staff member that they
were told to come into the store by a customer with a value card we will look up that
persons name and add bonus points to their value card account. We will also give the new
customer their own value card, recommend they do the same for their friends, and give
then a 10% discount to any café purchase (one time only).
General Media Advertising:
Les Fleur Café will have a webpage created and the company will also utilize newspaper
and radio advertising during the first year of operations. After the first year only the
website will continue to be utilized as the expenses for newspaper and radio advertising
are very large and a steady customer base should be realized at this point in time. The
advertisements will consist of regular in-store promotions along with our general contact
information along with a visual for the paper. The webpage will have all company
information with a home page that gives general information and a company background,
as well as a picture tab of past orders created, an email contact, a list of our products and
services and an online order system.
Word of Mouth:
With the grand opening giveaways the company’s word of mouth will be increased, as
the bouquet will become a point of discussion amoung consumers and their families and
friends.
5.4 Marketing Strategy
With the general company promotions Les Fleur Café will also utilize a specific
marketing strategy for the floral segment, as it requires a specialized strategy in order to
reach the target market and achieve the client base required.
Les Fleur café will reach future corporate clients by using the following strategy that
encompasses three main points of contact:
1st point of contact:
A full floral bouquet will be delivered to the floor manager or person in charge of décor
at an office with Les Fleur Cafés business card and corporate floral flyer attached. This
will give said individual time to enjoy the flowers, see first hand the quality of the
product and increase their awareness that Les Fleur Café is in operations and interested in
providing their company with our service.
2nd point of contact:
Once the bouquet has been at the office for 2 days Les Fleur Cafés management will
send goodwill to the company via personalized letter. The value of floral décor will be
highlighted and the fact that Les Fleur café is a new company offering its service will be
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mentioned. The letter will end with suggestion of a private consultation with our
corporate team.
3rd point of contact:
After the 2nd point of contact, if Les Fleur Café is not contacted we will call the company
that we had contacted and reiterate the information from the letter with hopes to book a
consultation. The consultation will be used to lock in clients with a term contract.
Another approach that Les Fleur café will utilize is a Sponsored coffee break. If after the
3 points of contact we are unable to set up a contract and find that the contact strategy
was ineffective the coffee break pitch will be put into action.
Sponsored Coffee Break:
This will consist of a pitch where Les Fleur Café approaches the management of an office
via telephone requesting to essentially pitch the value of floral decor to them. With
expression that unique corporate values, can be displayed through fresh flowers or natual
landscapes companies will realize the value in fresh floral décor vs. alternative
decorations. Les Fleur Cafés Management will demonstrate to corporate offices how their
company can realize their goals of expressing and enhancing their corporate brand vision,
values, and esthetics. With the pitch we will provide free coffee and pastries and will give
them a free bouquet for the office. With utilization of visuals, presentations, a bouquet
and a great pitch, Les Fleur Café will be successful in using this pitch to obtain clients.
5.5 Place: Market & Distribution
Market
Les Fleur Cafés market will consist of Toronto’s Financial District, with expansion into
Toronto and the GTA as the company’s recognition within the city increases over time.
The Financial district itself has approximately 100,000 people in the region on an average
day, while the population of Toronto as a whole is 2,615,060, showing that the consumer
market within this region is sizeable (Connor, 2012).
Distribution
Les fleur café will have a number of different distribution methods to match its
promotions and services. The floral segment will distribute to its corporate clients via the
delivery van, which will be free of charge within Toronto. The company will go to
corporate locations to resupply flowers and retrieve old bouquets on a weekly or biweekly basis. In terms of occasion bouquets, customer will be required to come into the
store to pick up their bouquets or walk-in and purchase a bouquet from the display cooler.
For the café segment the store will be the main point of distribution, the prime location
being a key component in terms of coffee sales. As mentioned previously Les Fleur café
will be located on the main floor of the Scotia tower where high levels of foot traffic
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Les Fleur Café | Business Plan
exist, whether it be pedestrians walking by the tower or people coming in and out of the
tower. Serving these individuals with coffee to enjoy in the store or to take out on the go
will be Les Fleur cafés main distribution. The store also offers a service wherein carafes
of coffee are delivered to offices within the scotia center and to other close proximity
buildings for no extra charge.
5.6 Segmentation, Targeting, Positioning
Value Proposition
Café:
Our customers:
 Receive ultra premium, high quality coffee
 Experience a contemporary and modern store
atmosphere
 Escape from the office
Floral:
Customers Receive:
 Same day delivery within the Toronto PATH
system & GTA delivery
 Unique, upscale bouquets
 Corporate benefit through floral accounts
 Bouquets designed to enhance corporate brand
vision
Target
Café:
 White collar coffee aficionados, with annual incomes of approx. $70,000+
 Consume coffee 1+ times a day, appreciate high quality coffee & service
Floral:
 Large corporate companies and office buildings: Hotels, Banks, Scotia Center, Trump
Tower, etc.
 Require weekly/biweekly delivery, corporate accounts & standing orders.
 Affluent individuals who seek floral arrangements.
Positioning Statement
At Les Fleur Café we create unique, upscale bouquets for the corporate industry and
floral devoted soul. Additionally, we provide ultra premium, superior quality coffee for
the white- collar connoisseur. Offering a unique coffee experience and atmosphere as an
escape from the workplace.
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5.7 Competitive analysis
As Toronto is very large and has many floral shops and cafés, competitive analysis was
done on a basis of location within the Financial District and similar qualities.
Floral:
The Floral Segment of Les Fleur Café has only one direct competitor, Ring & Associates.
This company also has floral services for corporate clients with weekly delivery of fresh
flowers and other similar qualities. No other direct competitors are located nearby,
though there are other flower shops in the financial district within close proximity to Les
Fleur Café. These include:




Funeral Services Floral –specializes in funeral service bouquets, and do not do
corporate bouquets. Les Fleur café does not provide funeral services, they are
therefore not a competitor
Tidy’s Flowers –offer services of all types: funeral, wedding, anniversary, etc. As
they do not specialize in anything and do not have a strong corporate focus this
company is not a large threat.
Edible Arrangements –specializes in bouquets that are made with fruit and other
foods. They do not use real flowers and are therefore not a competitor
EcoStems – specializes in fair trade flowers, event planning and occasion bouquets
this company is not a direct competitor as we specialize in corporate bouquets and
they focus more on events with a fair trade focus.
Figure 5.7 Floral Competitive Analysis Diagram: Price & Similarity
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Les Fleur Café | Business Plan
Café:
The café segment has no direct competitors within the ultra premium rage. Les Fleur café
is a first mover of sorts in this segment, as research found that there are no recognized
ultra premium cafés in the financial district. There are a large number of middle range
coffee shops though, these include:





La Prep – focused on food, coffee is just one component of this café, but not the main
focus, average quality
Timothy’s – franchise with drip coffee and baking, low quality.
Tim Hortons – franchise with drip coffee, baking and lunch offerings. Tim Hortons is
a very well know company but its consumers care less about quality and more about
the low price and the fact that it is reliably the same medium level quality every time.
Starbucks – franchise with higher-level coffee and espresso offerings. The company
has higher priced beverages as the quality is high but still not considered ultra
premium
Second Cup – franchise with higher-level coffee. This company is very similar in
comparison to Starbucks, having the same product offerings.
None of these companies offer French pressed coffee or ultra premium fresh roasted
beans. Many of the beans used in these companies are already pre-ground; pre packaged,
and made to serve quickly without the quality focus. Starbucks and Second Cup are the
closest in similarity to Les Fleur café but are still lacking the quality that this company
will have.
Figure 5.7 Café Competitive Analysis Diagram: Price & Quality
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Les Fleur Café | Business Plan
5.8 Marketing Expense Projections
Marketing expenses for each of Les Fleur Cafés promotions can be seen below. The
expenses for the executive card and value card increase slightly each year with inflation.
The Takeaways are a yearly expense (approximate number per year) that will be given to
corporate offices in trying to increase awareness of Les Fleur Café and increase the
company client base. Free French Press is an expense that happens once a year on the day
that the store opened, this expense increases with inflation. Flyers will be continually
posted around the financial district to increase awareness. A website will be created with
a large initial expense followed by smaller maintenance expenses each year. The
newspaper and radio adverting will only take place during the first year of operations.
They are large expenses that will only be necessary in the first year, as word of mouth
and previous customer retention will allow Les Fleur Café to be successful.
Figure 5.8 Marketing Expense Projections
5.9 SWOT Analysis
Strengths:






Superior quality
Close supplier proximity
Professional floral designers with at least 5 years of design experience
Location- Scotia Plaza, Financial District
Differentiate with French Press offerings
Cater to the needs of our corporate clients
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Les Fleur Café | Business Plan
Weaknesses:



Production space is limited
Café seating capacity depends largely on foot traffic
Corporate clients may take time to obtain
Opportunities:



First mover advantage- only ultra premium café in Financial District
Location- many clients to target
Could extend bouquets to general population if needed
Threats:



Competitors- direct and indirect
Imitability is high
Completely dependent on suppliers
6 Financial Plan
6.1 Debt/Equity structure
Les Fleur Cafe will require $300,000 of startup cash in order to pay for leasehold
improvements, inventory, and equipment. $100,000 will be comprised of long-term debt
acquired from lending institutions and equity investors will supply the remaining
$200,000. Personal guarantees may be required to acquire the long-term debt.
6.2 Loan Amortization
The $100,000 long-term debt will be amortized over 5 years and is at 7% interest.
Regular payments will be made monthly in the amount of $24,389.
Figure 6.2: Debt Amortization Schedule
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Les Fleur Café | Business Plan
6.3 Dividend Policy
Les Fleur Café will pay dividends to equity investors when retained earnings are over
$100,000, and will maintain a level of $100,000 in retained earnings thereafter. The
retained earnings account is necessary in order to fund equipment and the expansion costs
of the floral business as it expands. By maintaining $100,000 retained earnings, Les Fleur
café will be able to finance a large-scale expansion in year 4 internally as well as take
advantage of bulk buying power and infrequent flower market opportunities.
6.4 Economic Forecast
The five-year projections use an inflation rate of 2.5% for all wages, prices, and supplies.
6.5 Ratio Analysis
Les Fleur Café will operate with a current ratio of 1.44 meaning its assists will be able to
cover its debts 1.44 times over and reflects a low risk business.
The debt ratio for Les Fleur is .29 and shows that there is minimal debt in relation to Les
Fleur Cafes assets.
6.6 Sensitivity Analysis
The sensitivity analysis for Les Fleur Café shows how fluctuations in the critical
variables for both the cafe and the floral components will affect performance. The
measures used to gauge this are the Net Present Value of cash flows to equity investors,
the average 5-year profit, and internal rate of return. For the Cafe side of the business a
change of 55.6% in average customers only changes average profit by 15.6%. A 55.6%
fluctuation in average price changes average profit by 27.5%. This shows that the cafe
side of the business is inelastic with relation to price and customers and indicates a very
stable business. The floral business is similar with a 42.9% and 57.9% change to yearly
customers and average price respectively only changes average profit by 43.3% and
58.3% respectively. The difference of .4% for changes in floral price shows that price and
floral sales is very slightly elastic, but for the most part very stable.
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Figure 6.6: Floral Segment Sensitivity
Figure 6.6.1: Café Segment Sensitivity
6.7 Investment Analysis
The worst-case uses 200 café customers and 3 floral clients in the first year. Best case
uses 360 café customers and 7 floral clients. The analysis shows very positive results for
Les Fleur café with a base case of 77.7% Internal rate of return.
Figure 6.7 Investment Analyses
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6.8
Break Even
The average daily customers needed by both floral and coffee sides of the business
calculate the break-even analysis, as seen below. With breakeven levels that are very low
in comparison to base case expected sales it is apparent the Les Fleur café has a
promising future. Breaking even after the first year of sales and increasing each year
moving forward.
Figure 6.7 Break Even Levels
Figure 6.7.1 Floral Break Even Chart
Figure 6.7.2 Café Break Even Chart
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6.9 Summary of Financial Results
Les Fleur Café will have a low debt ratio, which decreases business risk. By keeping
minimal debt and avoiding large long term expenses like buildings and land Les Fleur
Café can keep the majority of its costs variable and thus is less likely to go under if hit by
unexpected events. With an IRR of 77.7% and projected breakeven within the second
year of sales followed by upward trends, it is apparent that Les Fleur Café could be a very
successful business. From Appendix A: Financial Projections it is shown that expected
Revenue in the second year could be $82,000 increasing to $1,929,135 by year five.
7 Conclusion
By taking advantage of the gap in premium coffee suppliers in Toronto's financial
district, Les Fleur Café can create a strong brand that will grow quickly and steadily over
time. Coupling a floral business with a cafe allows Les Fleur Café to create a unique
atmosphere as well as secure its prime location while maximizing profit. The margins
from the café segment (81%) create a big profit that is relatively stable and grows to
capacity quickly. The floral business requires more time to become established (20%
margin), but once it does customers supply a regular source of income that is extremely
stable and bolsters the profit of the business. In the fourth year Les Fleur Café will add an
support location to supplement the original location's floral production and allow for even
more growth. This explains Les Fleur Cafe's excellent projected performance and its
phenomenal lack of sensitivity to key variables. Because of the relatively low capital
costs, Les Fleur Cafe will be able to start up with only $300,000 in a debt to equity ratio
of 1:2 and be debt free in 5 years. Outside equity investors can expect their investment
returned in dividends alone within 5 years, with a return on investment just under 30%. In
conclusion, Les Fleur Café has the potential to be a stable and profitable staple in
Toronto's financial district.
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8 Appendixes
8.1 Appendix A: Financial Projections
Please refer to the attached Excel spreadsheet for detailed financial projections.
8.2 Appendix B: Floral Pamphlet
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8.3 Appendix C: Competitors Locations
Floral:
Green arrow: Les Fleur Café
Red dots: Competitors locations
Café:
Green arrow: Les Fleur Café
Red dots: Competitors locations
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9 References
Canadian Industry Statistics. (2012). Retail Revenues and Expenses Florists.
Retrieved December 1, 2012, from Industry Canada: http://www.ic.gc.ca/cissic/cis-sic.nsf/IDE/cis-sic4531rdpe.html
City of Toronto. (2012). Toronto: Living in Toronto. Retrieved December 1, 2012,
from Toronto :
http://www.toronto.ca/demographics/cns_profiles/cns76.htm
Connor, K. (2012, February 8). Toronto Population growth slows . Retrieved
December 5, 2012, from Toronto Sun:
http://www.torontosun.com/2012/02/08/toronto-population-growthslows-census-shows
Payscale. (2012, November 21). Barista Hourly Wage. Retrieved December 1, 2012,
from Payscale:
http://www.payscale.com/research/CA/Job=Barista/Hourly_Rate
Payscale. (2012, November 24). Cafe Manager Hourly Wage. Retrieved December 1,
2012, from Payscale:
http://www.payscale.com/research/CA/Job=Cafe_Manager/Hourly_Rate
Payscale. (2012, November 24). Delivery Driver Hourly Wage. Retrieved December 1,
2012, from Payscale:
http://www.payscale.com/research/CA/Job=Delivery_Driver/Hourly_Rate
Payscale. (2012, November 23). Floral Designer Hously Wage. Retrieved December 1,
2012, from Payscale:
http://www.payscale.com/research/CA/Job=Floral_Designer/Hourly_Rate
Payscale. (2012, November). Florist Hourly Wage. Retrieved December 1, 2012, from
Payscale: http://www.payscale.com/research/CA/Job=Florist/Hourly_Rate
Ryder, A. (2010). State of Industry. Retrieved December 1, 2012, from Canadian
Florist: http://www.canadianfloristmag.com/content/view/2837/38/
SBDC Net . (2012). Coffee Shop 2012. Retrieved December 1, 2012, from SBDC Net:
http://www.sbdcnet.org/small-business-research-reports/coffee-shop-2012
Society of American Florists. (2012). Statistics: Floriculture Indsutry Overview.
Retrieved December 1, 2012, from Society of American Florists:
http://www.safnow.org/statistics-floriculture-industry-overview
Urback, R. (2012). BlogTO. Retrieved December 1, 2012, from Best Florists in
Toronto: http://www.blogto.com/toronto/the_best_florists_in_toronto/
Comm 447 | December 6, 2012
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Les Fleur Café | Business Plan
Yonge Street. (2010). In the News: Toronto Coffee Shops Booming. Retrieved
December 1, 2012, from Yonge Street:
http://www.yongestreetmedia.ca/inthenews/coffeeshops1.aspx
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