1
BUSINESS PLAN
The Guayaba Bagel and Coffee
TRADING AS
The Guayaba Bagel and Coffee
Jose Antonio Vargas Cuinas
Julie C Molina
February 17th, 2015
The Guayaba Bagel & Coffee Limited
-Business Venture-
2
CONTENTS
INTRODUCTION
Page
Nature of business
4
People involved
4
Start-up costs
6
Legal Status
8
Aims
8
RESOURCES
Premise details
10
Legal requirements
11
Health & Safety
11
Service Delivery Methods
11
Suppliers
12
Terms and conditions of sale
THE MARKET
Analysis of the Market
13
Market Research undertaken
14
Competition
14
Marketing Strategy
14
SWOT Analysis
15
FINANCE
Start-up costs
17
Funding required
18
The Guayaba Bagel & Coffee Limited
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Costing
18
Breakeven point Calculation
19
Survival Budget
20
Sales & Profit Projections
21
Additional Information
22
The Guayaba Bagel & Coffee Limited
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4
INTRODUCTION
NATURE OF BUSINESS
To offer the public a complete menu with premium quality ingredients in the
fast, chilled food area. Always bearing in mind a variety of ingredients and the
healthiness of the food offered so that the best menu can be offered; to bear
in mind our clientele and their dietary requirements. Our project is to
maintain a coffee shop that provides fast, nutritionally balanced food; to
establish a new image for bagels and ‘continental’ coffee shops in the market
with a parallel of cereals, fruit salads, coffee, tea, fresh juices, etc.
PEOPLE INVOLVED
Two people will be involved and they will be equal partners in the business.
Between them two there is a variety of skills and experience. A third person
with the right skills and who has already been chosen will be hired from the
day the business opens
Jose Antonio – experienced in the set-up of a sales business, including
distribution and commercialisation of merchandise to the market place with
good logistical knowledge. Able to plan well for supply and demand, at the
same time, maintaining a balance in the business allowing it to evolve and
grow. Thrives under pressure, always keeping the goal in mind. One of his
latest successful ventures is his
4 year old company that he set up in
Venezuela called Vargas Sell, which specializes in importing Android and
Apple computer and smart phones spares.
Julie – varied background, mainly in banking and teaching. First jobs were in
catering; bar work, waitressing and two years as a Trainee Hotel Manager in
The Guayaba Bagel & Coffee Limited
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London, where qualification gained (BTEC Diploma in Hotel Management and
Institutional Operations) was applied. Defined customer service skills and
extensive experience in administration, especially billing and payments.
Organised, methodical and plans well. Currently working as a TEFL Qualified
English Teacher for an International School.
Third Person – solid catering background in both his family’s restaurant in
Venezuela and a Bagel Shop in Denmark. In the restaurant, Anthony
undertook various roles, such as barman, cashier and, at times, working in
the kitchen. In the Bagel Shop, where he was the main operative/manager,
his responsibilities were diverse including food preparation and cooking,
preparation of juices, barista, opening/closing the business on a daily basis,
ordering and stock control. Also, has worked as a commercial photographer
for products and on an artistic level.
Roles and responsibilities
Each of the partners to the business will, initially, work alongside one
employee upon the opening of the business. This is to ensure the business is
not overstretched and to be able to control costs/overheads.
The long term plan is to be able to employ enough people to meet the
customer demand and for the partners to concentrate on the areas that they
dominate to manage the business themselves, working an equal number of
hours each.
As Julie has administration experience and some accounting experience, it will
be her responsibility to ensure the administration side of the business is
adequately covered and evidence for the same is available. Meanwhile, the
employee, with his experience in this area, and Jose, with his entrepreneurial
experience, will run the front of house operation.
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START UP COSTS
Funding will be required and we will be looking to raise the start-up costs
from business loans from financial institutions. Advice is being sought in this
area,
Costs are approximate:
Rent: 2 months deposit, 1 month rent - Assuming
£ 6,000.00
2,000 p/m
Business Rates: Assuming £ 1,000 p/m
£ 1,000.00
Kitchen, Full Decoration and Furnishing
£ 75,000.00
Coffee Machine
£ 2.000.00
Orange juice machine (Citrocasa)
£ 1,000.00
Bagel Oven
£ 1,600.00
Juice Extractor
£ 1,600.00
Blender (Blendtec)
£ 600.00
Kitchen Tools
£ 600.00
Raw Material
£ 1,000.00
Insurance
£ 1,000.00
Licences
£ 1,000.00
Advertising
£ 1,500.00
Legal Costs
£ 3.000.00
TOTAL
The Guayaba Bagel & Coffee Limited
-Business Venture-
£ 96,900.00
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Food Costs
Type of Bread
Units Pack
Plain
All Grain
Chilli & Cheddar
Everything
Sesame
Poppy Seeds
Sundried
Tomatoes
32
32
32
32
32
32
32
01
01
01
01
01
01
01
Unit
Price
(£)
0.47
0.47
0.47
0.47
0.47
0.47
0.47
Fillings
Unit
Kg
Meat/Fish
Spicy Chicken
Plain Chicken
Turkey
Tasty Turkey
Pastrami
Tuna
Salmon
Serrano Ham
Omelette
Egg Salad
Pulled Pork
Chorizo
Bacon
01
01
01
01
01
01
01
01
01
01
01
01
01
2.5
2.5
0.5
1.5
0.5
2.0
2.0
1.0
2.0
3.0
1.0
0.5
0.5
15.00
14.00
15.00
10.00
6.00
8.00
12.00
11.00
21.00
14.00
10.00
5.00
5.50
01
01
01
1.0
1.0
10.0
5.50
7.00
28.00
01
1.0
5.00
01
01
01
01
1.0
1.0
1.0
1.0
Cheese/Diary/Deli
Cheddar
Mozzarella
Cream
Cheese
(Plain)
Humus
Purees
Chilli
Garlic
Sundried Tomato
Pesto
The Guayaba Bagel & Coffee Limited
-Business Venture-
Cost
price
(£)
Pack
Price
(£)
16.00
16.00
16.00
16.00
16.00
16.00
16.00
Unit
price
(£)
5.50
5.00
5.00
6.00
8
Vegetables/Salad
Tomatoes
Romaine Salad
Onions
Rucula
Avocado
Jalapenos
Coleslaw
Cucumber
Spinach
Sundried tomatoes
Pickles
01
01
01
01
12
01
01
01
01
01
01
6.0
4.5
10.0
0.5
2.8
5.0
4.5
0.5
0.5
9.0
7.00
7.00
10.00
4.00
12.00
4.50
15.00
5.00
4.00
4.00
8.00
Dressings
Curry
Sour Cream
Mustard
Strong Mustard
Mayonnaise
01
01
01
01
01
0.9
0.9
3.0
3.0
3.0
3.50
3.50
5.10
9.00
9.00
Desserts/Snacks
Crisps
Choc Chip Cookies
Muffins
48
90
01
25
4.00
35.00
71.00
LEGAL STATUS OF THE BUSINESS
AIMS
The Business will be set up as a brand new limited company, with
Jose
Antonio
Vargas
and
shareholders and directors.
Julie
Molina
being
the
only
two
A third shareholder with a smaller
percentage may be included.
The main objective is to have a very exclusive coffee shop in the
area and to make sure clients enjoy their visit to the premises and
want to come back, to increase the level of sales within 2 years to
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the level that we can make a few extra loan re-payments per
annum and eventually to be able to set up a branch. This will be
done by having excellent customer service, excellent quality and
marketing.
Principally, our objective is for the popular coffee shop culture, providing a
balanced menu of sandwiches (bagels rather than bread), an all-day light
breakfast menu and cupcakes, biscuits, fruit, etc., alongside coffee, tea, hot
chocolate and fresh juices. Please refer to our ‘Nature of Business’ above. In
addition to this, we would like to be able to offer a continental coffee shop
culture later in the business’s evolution, whereby we have a licence to sell
alcohol, e.g beers/wines.
We believe that the name of the business is attractive and we will try to make
the premises look attractive too, but more importantly we believe that the
healthy, uncommon products that we will offer together with an excellent
service and the competitive prices; will attract many people.
The second opportunity, at a later stage, once the business is up and running
well, will be in the delivery of a personalised EFL (English as a Foreign
Language) course with an experienced teacher. The courses will be tailored to
the student and ideally delivered in an area adjacent to the coffee shop, a
second floor or designated area away from the hustle and bustle of the coffee
shop, using tried and tested methods alongside the use of technology; a
program designed and delivered by the teacher and access to this after the
tailored course has completed via pre-designed software course(s).
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RESOURCES
PREMISES DETAILS
The business will be run from external premises that have the appropriate
business usage. We are currently investigating areas of Greater London, but
wish to have premises that are in Zones 1-2 that have a high footfall so as to
maximise the opportunity.
Areas of London that are currently being considered are Central London (Zone
1, e.g. Waterloo) where the high footfall would include tourists, office staff
and commuters. In addition, East Putney (Zone 2) is currently being
investigated, where personal knowledge of the area is being used. Here, the
high residential population, busy thoroughfare, commuters and current redevelopment of this affluent area make it a viable option.
The size of the premises would need to be a minimum of 50 x 10 metres
squared and rent would need to be paid as per the agreement. The budget
for the premises is approx. £2,000 pcm. Investigations are underway as to
terms and conditions, help will be sought in connection with this.
Business rates information is being sought and the cost would depend on the
location and the London Borough where the premises are located.
It is not foreseen that we would need to apply for planning permission as we
are looking for the appropriate usage. However, there has been an allowance
for decoration/adaptations worked into the set-up costs (above).
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LEGAL REQUIREMENTS
The public liability and contents insurance will cost about £1000,00 p/a. An
A1 licence will be required and this will also cost around £1000,00 p/a
HEALTH & SAFETY
The health and safety requirements should be placed in order very
easily, however Jose Antonio Vargas will take a one day health and
safety training course as soon as the premises are ready.
SERVICE DELIVERY METHODS
As we are looking for premises that are, ideally, in a main shopping area or
thoroughfare in Zone 1 or 2 in London, the potential customers will range
from the local workers/commuters (offices, shops, theatres, attractions, etc.)
to tourists and passers-by. In addition, once the coffee shop is established
and the English classes have started, students that attend the classes will,
more than likely, patronise the coffee shop as well.
The use of ‘healthier’ options should attract a wider public too as an
alternative to other fast food outlets in the vicinity. As we are aiming to
having a ‘continental’ style café too, it is hoped that the customers will see
this as another unique selling point compared to existing competitors and opt
for our café as opposed to them.
Customer Service will also be a key factor in the attraction of potential
customers and all of the owner/proprietors have extensive experience in this
area. Training will be given to new staff members to ensure service standards
are achieved. Feedback will be sought in the form of questionnaires to
address compliments and complaints effectively.
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The client needs to feel relaxed in their surroundings and have the sense that
they are being dealt with in a professional, clean and aesthetically pleasing
environment in order to enjoy their purchase, on or off the premises. In this
respect, careful attention is being paid to the premises, fittings and facilities
provided. It is our aim to provide wi-fi, appropriate background music,
newspapers (English and Spanish) to enhance the Customer Service
experience of our clientele.
The quality of food/beverages offered is also being carefully considered to
provide value and promote a healthy relationship between the consumer and
the business.
Payment methods will need to include card payments and cash. Credit will be
considered for deliveries to functions/conferences, and large orders. with an
invoice being produced for regular customers on a monthly basis.
SUPPLIERS
This is currently being researched and until the business has funding,
premises, a start date, etc. it is very difficult to get much information.
Initially probably the purchases will have to be paid in cash, but a
few months later the company may apply for a 30 day credit
account; although it is not expected to be needed
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THE MARKET
ANALYSIS OF THE MARKET
Coffee Shops – are currently in high demand with a high daily footfall with a
wide clientele, especially in London, e.g. tourists, commuters, workers,
students, etc. This market, at present, offers a good prospect for success
and, if positioned correctly, will almost guarantee good returns on any
investments.
Our concept is not a ‘run of the mill’ coffee shop that just offers the ‘norm’,
our concept is to appeal to those looking for a ‘healthier’ alternative
promoting bagels rather than bread and going that extra mile with customer
service and meeting our clientele’s needs.
We would also like to offer the ‘continental’ feel to our ambience by providing
beers/wines, something that we have not found during our research. This
would be undertaken after the main business is established and running.
Again, once the business is established and running, EFL (English as a Foreign
Language) is an aim for the business. Currently working in an EFL school,
Julie has an excellent understanding of the industry and its pitfalls. Having a
good reputation, tried and tested skills, experience and the ability of being
able to pinpoint areas of weakness (for her students) are some of the main
requirements in working in the EFL industry, your reputation goes before you.
Small, tailored classes or one-to-one classes are an excellent form of learning
that students are often in need of due to their positioning in the accredited
schools within London (class sizes vary from 8-17 students and are often of
mixed ability levels).
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MARKET RESEARCH UNDERTAKEN
As the premises have not yet been found, the main methods used to
determine that people will come to our business are as mentioned above. In
addition, careful consideration is being taken in finding premises that have
the potential to fulfil the high footfall and development we are aiming for.
The ambience, quality of fare offered and customer service are key factors in
this area and, as such, we have frequented and, some of us, have experience
as staff in such a business, giving an excellent insight to the pros and cons of
such a proposal.
Extensive research has also been undertaken on similar concepts via the
internet and via word of mouth with people who have started this type of
business,
COMPETITION
To be confirmed upon funding and location of premises, however there is
always many ways of competing, and to do this we will analyse our
competitors, and as mentioned above, we will be and look different
from them in many ways.
MARKETING STRATEGY
A product or service will not sell unless a market exists, fortunately in this
case the customers are already there waiting for us to attract them.
Some of the new marketing techniques that are intended to be used are:

Leafleting the local area once a month
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
Paying for a digital marketing campaign that involves all the social
networks, the website and internet in general.

Targeting customer by profile, i.e. age, gender, ethnicity etc. and
creating the healthy options they need

Keep up to date with the latest health news and try to have natural
products that help combat different health issues i.e. a smoothie that
helps control cholesterol, high blood pressure, etc.
SWOT ANALYSIS
STRENGTHS

Healthy Products have a good demand nowadays

Business will be well located

Prices will be very competitive

Quality of products and customer service will be excellent

There are not many healthy coffee shops in London,

The directors will be working full time in the business venture

The directors are very experienced in different fields that relate to the
business

The director will not get any salaries during the first few months
WEAKNESSES

No clientele stablished

Start up cash not available
OPPORTUNITIES
This could be a good opportunity to grow the company into many coffee
shops as nowadays the demand for healthy food is increasing, however it is
normally a bit pricy. We believe that with our competitive prices many more
The Guayaba Bagel & Coffee Limited
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16
people will be able to afford having a healthy breakfast/lunch on daily basis
and therefore we will grow fast.
THREATS
We must have enough money to cover three months of the full monthly
expenses just in case our sales do not go according to plan.
The Guayaba Bagel & Coffee Limited
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FINANCE
START UP COSTS
Funding will be required and we will be looking to raise the start-up costs
from business loans from financial institutions. Advice is being sought in this
area.
Costs are approximate:
Rent: 2 months deposit, 1 month rent - Assuming
£ 6,000.00
2,000 p/m
Business Rates: Assuming £ 1,000 p/m
£ 1,000.00
Kitchen, Full Decoration and Furnishing
£ 75,000.00
Coffee Machine
£ 2.000.00
Orange juice machine (Citrocasa)
£ 1,000.00
Bagel Oven
£ 1,600.00
Juice Extractor
£ 1,600.00
Blender (Blendtec)
£ 600.00
Kitchen Tools
£ 600.00
Raw Material
£ 1,000.00
Insurance
£ 1,000.00
Licences
£ 1,000.00
Advertising
£ 1,500.00
Legal Costs
£ 3.000.00
TOTAL
The Guayaba Bagel & Coffee Limited
-Business Venture-
£ 96,900.00
18
ADDITIONAL FINANCE REQUIRED
Back up Money for the First Three Months
£ 10,000.00
TOTAL FUNDING REQUIRED
£ 106,900.00
COSTING
The costing of work will be at the rate of £ 8.00 per hour labour charge. The
labour charge has been based on the following:
3 people working, 48 weeks per year, 48 hours per week (Mon - Sat)
Total hours to be worked = 48 * 48 * 3 = 6912
We assume that only 80% of these are productive hours
Total productive hours: 6912 * 80% = 5529.60
Business Cost Per Hour
Overheads including drawings
(As per attached spreadsheet)
Productive hours
Business Cost Per Hour = 151981.92 / 5529.6 = £ 27.48
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Profit =
Profit =
Total Sales – Overheads – Wages
(As per attached spreadsheet)
= 174160 - 105389 - 46592 = £ 22,179.00
This profit is after tax as the corporation tax was included into the overheads
BREAK EVEN POINT
Break-even point (BEP) is the point at which cost/expenses and revenue
are equal, so there is not net profit neither loss
The daily break-even (without including the investment capital) has been
calculated with the following formula:
BEP = Overheads (Including drawings)
Number of Working Days
BEP = 151,981.92/312
=
£ 487.12
This means that the annual break-even point is
Annual BEP = £ 487.12 * 312 = 151,981.44
Break-even point (BEP) to recover investment capital in three years
BEP = Overheads (Including drawings) x 3_+ Total Funding Required
Number of Working Days
BEP = 151,981.92 x 3 + 106,900.00 / 936 = £ 601.33
This would be the minimum amount of daily sales to break even by
31/05/2018.
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SURVIVAL BUDGET
This would be the minimum level of daily sales for the business achieve tha
targets shown in the forecast attached.; assuming that we will sell only 20
units of each one of the following items, which we expect to be the most
popular:
PRODUCT
PRICE UNIT £
DAY TOTAL (20 UNITS)
Bagel
4.00
80.00
Different Coffees
2.00
40.00
Smoothie
2.50
50.00
Fruit Salad
2.00
40.00
Light Breakfast
3.00
60.00
Salad
3.00
60.00
Healthy Drinks
3.00
60.00
Beer & Wine
2.50
50.00
Set Lunch
3.00
60.00
Others
2.00
40.00
Total Day
We believe that this is a very reasonable expectation.
The Guayaba Bagel & Coffee Limited
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540.00
21
SALES & PROFIT PROJECTIONS
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ADDITIONAL INFORMATION
The above is a pessimistic forecast, as all the expenses have been
estimated
over
the
real
value.
The
real
value
of
the
expenses/overheads is expected to be smaller than the figures in
this forecast. This is a way of covering for any un-accounted/unexpected expenses, but if such event does not happen, then the
profit will be bigger.
The Guayaba Bagel & Coffee Limited
-Business Venture-