Business Plan Project
Nutrition 404
November 19, 2014
Mahir Michael, Jenny Chau, Nadeen Saba,
Jaclyn Schmidt & Megan Sealy
Table of Contents
1. Company Summary
1. Company History
2. Products/Services
3. Mission Statement
2. Executive Summary
1. Team and Ownership Structure
2. Target Customer
3. Company Facilities
4. Marketing Strategy
5. Major Goals
6. Health Repercussions
7. Compelling Reasons for Investment
3. Company Description
1. Team & Organization
4. Products and Services
1. Services
2. Cuisine & Beverages Served
3. Suppliers Vendors
5. Operating Plan
1. Location
2. Facility
3. Operating Equipment
4. Associate Structure
6. Healthy Repercussions & Analysis
1. Towards Target Market
2. Towards Environment
7. The Market
1. Size
2. Trends
3. Competitive Analysis
4. Marketing Strategy
8. Goals, Risks & Strategies
1. Short-term Goals
2. Long-term Goals
3. Strategies
4. Risks
9. Financial Plan
1. Start-up Expenses & Total Investment
2. Financial Plan
1. Company Summary
Cafè Realla is a laidback yet sophisticated cafe that will attract the young adults
as well as established business men and women in the La Jolla region. We serve
a variety of beverages, sandwiches, and pastries to meet the needs of our
customers, while supporting local businesses and providing organic ingredients.
We hold prestige in our products, including our locals wines, beers and freshly
brewed coffees. Due to the growing demand for a high-quality coffee house, Cafè
Realla is a comfortable place where one has the opportunity to relax, study, or
just enjoy a social environment with friends. We are located centrally in La Jolla
near homes, businesses, and schools (UCSD) providing a homelike atmosphere
where anyone is able to enjoy our services and the beautiful view of the ocean.
1.1 Company History
Jaclyn Schmidt, Mahir Michael, Nadeen Saba, Jenny Chau, and Megan
Sealy all met at San Diego State University while studying nutrition. Jaclyn and
Nadeen spent a summer abroad visiting the most exquisite and tasteful cafès
with unique drinks and urban vibes and were determined to bring these
European style cafès back home with them to San Diego. They shared their
experiences with their classmates then all five students began to share a vision
in creating a coffee house with a social atmosphere, yet a place where students
could also study or grab a drink in their spare time. When thinking of names, the
word Realla came up after Jenny listened to the song “Realla,” and realized the
song was able to encompass the vibe we were looking for. This is how the idea
of Cafè Realla formed!
1.2 Products and Services
At Cafè Realla, we will be serving homemade sandwiches and paninis
made directly on site. We will also offer different types of wine, both white and
red, craft beers, and pastries which are bought from local businesses. Cafè
Realla will offer vegetarian and gluten free options to fulfil the customers
demand. Our employees are trained to educate the customers about the dietary
analysis of the menu items in terms of allergies, ingredients, calorie counts and
substitutes to help them make healthy choices that fit their needs.
1.3 Mission Statement
Our mission is to appeal and relate to our busy customers that are looking
for a comfortable and quaint environment before or after a long day at work or
school. We strive in providing the best quality food and beverage items as well as
a personable customer service experience. We aim to maintain a sustainable
and eco friendly facility while customers are still able to enjoy the beautiful beach
city of La Jolla.
2. Executive Summary
2.1 Team and Ownership Structure
Consortium Holdings is a group of like minded individuals coming together
for a common interest; creating the perfect San Diego restaurants and hot
spots.They base their name and reputation on creating a brand that is unique,
yet relatable to the customers. It reflects the laid back culture in La Jolla, yet
presents a social and diverse vibe. CH wants to bring diversity to this new
business in efforts to be different from local competitions like Starbucks and
Young Hickory. CH will take on a general partnership, where both the profits and
liabilities are divided equal forming an Limited Liability Corporation (LLC)
between CH and cafè Realla. The CH relation takes the “hands on approach”.
Being involved in every aspect, in order to create a warm and homelike
environment.
2.2 Target Customer
We are targeting two markets: college students and business
professionals/young adults. Our café will provide an atmosphere where college
students are able to have another option to study or enjoy fellow colleagues’
company. One of the products we offer is alcohol which for busy
professional/young adults want to relax or discuss business without having to
drive to downtown to enjoy a glass of wine or beer. Because of our concept and
casual environment many customers will call our café their niche.
2.3 Company Facilities
Our cafè offers a 2,500 square foot facility, located on 7734 Girard Ave, La
Jolla Ca, 92037. The facility provides a patio out front, lounge area, a standard
bar, restrooms for both customers and employees, as well as a built in
commercial kitchen in the back of facility. The location is available immediately
for 3$/ per square foot/ per month, adding up to 7,500 dollars a month for rent
(San Diego Buildings for Lease). A full liquor license is already granted to this
property and is included upon signing rent.
2.4 Marketing Strategy
A major component when running a successful business is gaining
community credibility. Being a part of the Consortium Holdings, already gives
Cafè Realla good standing amongst the San Diego population. Having our cafè
on their website will create a “buzz” within the community. We hope to tackle
social media by creating facebook, twitter, instagram, and pinterest pages for our
new cafè. We will also ask customers to hashtag our name to gain further
publicity (#caferealla), as well as rate us on Yelp (yelp.com). Having posters,
newsletters, flyers in the mail and on local bulletin boards will also get the cafè’s
name out there.
2.5 Major Goals
Cafè Realla’s overall goal is to improve in all aspects over time. Whether it
be revenue or customer satisfaction, our vision is to grow. Within the first six
months we hope to expand our menu to include more food options and
beverages. These additions will adhere to the USDA dietary guidelines and
expand our diversity of customers. We want to incorporate customer feedback in
our services to ensure we know what is working and what is not. This will also
give us an idea of what the cafè needs in order to improve and thrive over the
years. We hope to increase our GP (Gross Profit) within the first 2-3 years by 20
-25%. We hope to expand to our second location in 3 years and third location
within 5 years. We do not want to stay stagnant by any means.
2.6 Health Repercussions
Café Realla makes strides to be as economically ethical as possible in
this modern age. All of our environmental management practices are aimed
toward sustainable environmental societal and ethical goals. Firstly we market to
only adult individuals due to our alcoholic menu variety. Using legal postings we
do remind consumers of the negative health repercussions however we are
advocates of the many positive health effects of consuming wine, as stated by
Williamson (Williamson, 2010).
2.7 Compelling Reasons for Investment
According to Kevin Young from TrendHunter.com, specialty coffee sales
are increasing 20% per year with sales reaching over $59 billion dollars. Beer
too, has grown exponentially in California making the state America’s beer capital
with more than 500 breweries, doubling Washington, the state with the second
most breweries in the United States with only 251 breweries. The increase has
sparked a beer interest within the community. The combination of coffee and
beer allows people of all ages and professions to indulge in their preference of
beverage while working socializing with others. Delicious home-made
sandwiches, wine, and pastries are the icing on the cake.
3. Company Description
3.1 Team and Organization
At Cafè Realla, our goal is to achieve a corporate culture within our
workplace, making a fun environment with community involvement, and an
emphasis on wellness and integrity while following a bottom up style of
management. We will hire experienced individuals who are outgoing, innovative
sincere and have a passion for high-quality crafted goods. Rather than hiring an
abundant amount of employees at minimum wage, a handful of trusted
individuals will be paid greater amounts to encourage responsibility and passion
while reducing employee turnover rates. Each employee will be hand selected,
starting with a phone interview prior to group interview. From there, the
candidates that are chosen, will each be given a private interview. Each
employee chosen will be a knowledgeable coffee, beer, and wine connoisseures.
Cafe Realla aims to have a diverse and hardworking staff that comes to work
with great diligence and a positive attitude. We aim to support our innovative
structure by allowing associates freedom to use their creativity to help run and
promote the business by having control of social media posts, choosing the
specials of the day, coming up with unique marketing strategies, and handling
issues in a professional manner. Likewise, there will be monthly staff meetings
for associates to provide feedback and express new ideas.
4. Products and Services
4.1 Services
Realla meals are made from sustainably grown, high quality local and
organic ingredients whenever possible. Our employees are trained to educate
the customers about the dietary analysis of the menu items in terms of allergies,
ingredients, calorie counts and substitutes to help them make healthy choices
that fit their needs. In addition, our menu offerings will be supplemented by free
books and magazines that customers can read inside the lounge area. Our
employees will include: bartenders, dishwashers, baristas, servers, and a
manager to run the facility.
4.2 Cuisines and Beverages Served
We will be serving a variety of wine, beer, coffee, tea, pastries, and both
breakfast and all day sandwiches. In the coffee bar, espresso, “pour over” coffee,
and tea will be sold. Along with that, we will provide other beverage options
including: craft beers, and wine. Realla will also offer pastries, breakfast and all
day sandwiches.
Food item
Source
Price
Cost
Profit
Pinot Noir
Kelley Clark
$12
$30/gallon
$6
Realla’s speicality coffee
Virtuso
$4.99
2.00
$2.99
Chicken salad sandwich
Hearst & Suzie’s
farms
$7.99
$3.00
$2.99
Banana chocolate chip
cake
Made at Realla
$4.99
2.00
$2.99
Beer
Local Brewery
$6/pint
$2.50
$3.50
4.3 Suppliers and Vendors
Our wine supplier will be Kelly Clark who is located in Coastal Vineyard
Consulting 218 La Camarilla Place Nipomo, CA 93444. She has 25 years
experience as a viticulturist working and consulting on the Central Coast, and
Pest Control Advisor. The company has consulting experience with both organic
and sustainable vineyard operations. They also have International Organic
Inspectors Association training and certification. Clark also holds an MS in
Agriculture with specialization in viticulture from Fresno State, and a BA in
Biology from UC San Diego. They also do auditing services available: USDA
Organic and Sustainability In Practice (SIP). Prices range
Cafè Realla will be buying the coffee and tea from Virtuoso company
located in San Diego. Organic growing methods are practiced here and the cafè
holds fair trade certifications.
We will buy our meat and poultry from Hearst Ranch. They are the
nation’s largest single-source supplier of free-range, all-natural, grass-fed and
grass-finished beef. They practice sustainable agriculture and managed grazing
on our two ranches in Central California. In addition, we will be buying our fruits
and vegetables from Suzie’s farm to support the local farms.
Our craft beer will come from local San Diego breweries from Stone
Brewery, St. Archers, Green Flash, Ballast Point, Belching Beaver and Karl
Strauss
5. Operating Plan
5.1 Location
Café Realla will be located in a prime area of La Jolla where there’s a
population of 42,000 residents and an estimated 1 million visitors annually. The
café will be surrounded by clothing boutiques, fitness studios and restaurants.
Girard Avenue is a popular street that has both high vehicle and pedestrian traffic
flow and is easily accessible by public transportation.
5.2 Facility
The address is 7734 Girard Avenue, with 2,500 square feet of space and
rent at $7,500 per month. The space includes a commercial kitchen in the back
and a front counter for ordering with a large space for tables and seating. The
previous owners were granted a full liquor license, which we will need to acquire
to serve wine.
5.3 Operating Equipment and Utility Costs
The equipment needed for Café Realla will be included in the start-up
costs. Equipment will be supplied by San Diego Restaurant Supply located on
1202 Market Street in downtown San Diego. All of the equipments purchased will
have the energy star label as a means of using the least amount of energy and
the most efficient way. The total cost for the major equipments needed is
$18,640, which is included in the start-up expenses.It is expected that our energy
expenditure will cost around $1,325 per month.
Equipment
Cost
Estimated Energy Expenditure per
Month
3 Compartment-sink
$584.00
-
Ice-bin/ Ice-maker
$806.00
$97.00
Commercial Toaster
$379.00
$72.00
3 Group Espresso
Machine
$4149.00
$341.00
Coffee Grinder
$719.00
$41.00
Refrigerator
$1959.00
$81.00
Stove Top Oven
$3095.00
$265.00
Professional Wine Cellar
$4100.00
$180.00
Panini Maker
$479.00
$78.00
Draft Beer Cooler
$2370.00
$170.00
Total:
$18,640.00
$1,325.00
5.4 Associate Structure
Assistant managers will be responsible for opening and closing, while the
store manager will manage the cafe during the day. The day will be split into
three shifts, 5am-12:30pm, 12:30pm-7pm, and 7pm to 2:30am, with the head
chef arriving an hour early to prep food for the day. Each shift will require 1
cashier, 2 cooks, and 2 baristas who will also function as bartenders and servers.
6. Healthy Repercussions & Analysis
6.1 Health Repercussions Towards Target Market
Cafè Rella does not target market to children in any way due to the presence
of alcoholic beverages on our menu. Children are more easily influenced and
harmed by target marketing with the use of psychological appeals and images.
Despite the fact that many of our menu items are non-alcoholic, we choose to
abstain from marketing to this vulnerable group completely in order to maintain our
ethics by following ethical practices listed by Smith (Smith, 2007). To touch on the
subject of selling alcohol, it is of Cafè Rellas concern to make sure that all individuals
above the age of twenty-one who choose to consume alcoholic beverages are made
aware of the harmful effects of our products.Cafè Rella has the greatest respect and
concern for its patrons and will have posted within sight legal warning signs of
alcohol consumption consequences. It is our desire to appeal to responsible drinkers
and maintain a classy environment and order within a reasonable range in the
restaurant at all times. However, we are advocates for the responsible consumption
of wine and endorse the healthy benefits including the benefits of phytochemicals
that wine has to offer, as stated by Williamson (Williamson, 2010). At cafè Realla,
we aim to keep our facility very clean to provide a healthy environments for our
customers during their time there.
6.2 Health Repercussions Towards Environment
Cafè Rella strives to be as environmentally friendly as possible by integrating
social and environmental factors into each of our business decisions. Unlike large
businesses who are profit motivated we are a modest sized business who is health
and global motivated seeking the business of like-minded customers. Cafè Rella
aids in the global efforts against biotechnology by using organic ingredients and
avoiding genetically engineered foods at all costs. This not only is better for our local
growers, and community but also has an impact on global sustainability and has a
positive correlation with our financial growth, as proven by Llach (Llach, 2014). In
order to make sure our business is having the least harmful effect on the
surrounding community, we utilized a model developed by a Wisconsin community
to accurately measure the environmental impact on our development process thus
minimizing potential health repercussions, found in Wisconsin Federal and State
Laws (Canter, 2005). Our goal is to make sure that environment health and
protection takes precedence over economic development. We attain this goal by
following guidelines published by the World Health Organization (WHO2020).
7. The Market
7.1 Size
San Diego has a population of 1.3 million people and is the second most
populous city in California. There are slightly more male than females in San
Diego County and the largest race demographic from largest to smallest is white,
Hispanic, and then Asian ethnicity. San Diego is home to San Diego State
University, University of San Diego and Point Loma Nazarene which are huge
contributors to the businesses around San Diego County. Every year the
population in San Diego is growing and will appears to be continue to increase in
future.
7.2 Trends
San Diego as a whole is becoming more health conscious and big on
sustainability, thus more people are seeking healthier food options including
organic items. People here are also becoming more concerned with the
environment and they encourage sustainable facilities to help the environment
(Thompson 2014). The demands for sustainable, local, and organic products are
rapidly increasing in the food industry and San Diego County has always been at
the forefront of organic farming, Department of Agriculture website. A national
survey ranked San Diego as the 5th city for most organic food consumption in a
month with 24% according to the San Diego County, San Diego Population 2013.
Numbers of consumers are growing because consumers are becoming more
aware, health conscious and want to know where and how their food is grown.
The movement of sustainable, local and organic products in San Diego County is
growing tremendously and will continue to grow (Marley). Today, there is in
California a growing movement for landscape restoration and promotion of a
sustainable living countryside based on local farming production, local energy,
tourism, etc (Berglund 2014).
7.3 Competitive Analysis:
There are no restaurants or cafés that are fully committed to being
sustainable, local, and organic. A handful restaurants and cafes will appeal to the
similar customers and serve similar food as our cafe, but we have the edge of
having all three concepts: sustainable, local, and organic. Some of our primary
competitors will be Starbucks and Young Hickory, which will be offering similar
food and drinks. Our biggest competitor appears to be Starbucks, which offers a
wider selection of food. One of their biggest strengths is convenience; they are a
franchised restaurant placed all across the nation.
Starbucks
Young Hickory
Café Realla
Products
Pastries, Salads,
Sandwiches, Tea,
Coffee, Soda,
Oatmeal,
Coffee, Tea
,Sandwiches,
Salads, Sides,
Can beer
Sandwiches,
Coffee, Tea,
Wine, Draft Beer,
Pastries
Services
None
None
None
Quality
Average
Above Average
Excellent
Pricing
$1.95 - $7.95
$1.95 – $8.95
$2.50 - $12.00
Location
National
North Park
La Jolla
Sales
125,000/month
55,000/month
85,000/month
Market Share
40%
3%
35%
Years in
Business
18 years
1.5 year
N/A
Ownership
Franchise
Partnership
LLC with CH
Financial
Large initial
Minimal private
Private Investors
Strengths
investment
investors
Importance of
product to
business
High Importance
High Importance
High Importance
Advertising
Website, Social
Media, TV,
Billboards
Website, Blog,
Social Media
Website, Social
Media, Print,
WOM
Image
Quick &
Convenient
Local, High
Quality
Sustainable,
Organic, Fresh,
Local, Quality
Customer
Profile
professional,
families, on the go
consumers
Hipsters, Young
Adults, Coffee
enthusiasts
Students,
professionals,
food & coffee
Enthusiasts
Strengths
Summary
Wide range menu
Canned Beers
Wine, Draft Beer,
Organic,
Sustainable
Weaknesses
Summary
No alcohol, lack of
organic products
Local only
Local only,
Advertising
7.4 Marketing Strategy
Newspaper Advertisements:The San Diego Union Tribune newspaper advertises
hot new restaurants while promoting sustainable, local, and organic food
industry.
Flyers: We hand out, posting and mail flyers to promote our café to residents
within a five-mile radius.
Discounts: Discounts are offered occasionally and are generally a part of a
marketing campaign such as an online promotional coupon like Groupon or
Living Social. Realla will also offer 25 cents off when the customer brings his/her
own cup to encourage recycling and sustainability.
Social Media: Café Realla will be advertising online through Facebook ads,
Instagram, and Twitter, monthly newsletter. Also, Yelp which our café will be
label under the hot and new category.
8. Goals, Risks & Strategies
8.1 Short-term Goals
Café Realla goals are as follow:




To develop a customer loyalty program where customers would receive
discounts on future visits and increase customer return rate.
Choose two to three high profile charity events to sponsor.
Establish our company name to the San Diego population.
Utilize social media to access a greater amount of potential customers.
8.2 Long-term Goals





To increase our revenue to 20 - 25% by the second year.
To open a second location by the 3rd year.
To open a third location by the 5th year.
Increase variety and amount of menu items.
Increase utilization of technological trends
8.3 Strategies
Cafè Realla plans to offer a customer loyalty card to encourage customers
to continue coming back to our facility. The company also plans to send coupons
in the mail with our flyers and throughout our social media; also stressing .25
cents back per customer using their own cup. Also, the company plans on giving
special deals to customers giving positive feedback on Yelp.com or those who
hashtag #caferealla on any social media. The cafe will engage with the
community in many forms, including a donation charity box by the cashier to
further encourage our customers on giving back. These donations will go to
Feeding America Food Bank.
8.4 Risks:
Since Cafè Realla is a new cafe, the company runs the risk of not
generating enough revenue from the start. There is only a three month advance
on both salaries and cash reserves, thus creating a pressure on revenue to
almost start immediately. Starbucks and other local cafes that are well known
and have a loyal customer base, will be a major competition. This competition in
essence, is a risk. Although our employees are thoroughly interviewed and hand
chosen, they are all new to the company. This runs the risk of spontaneous
actions, whether it be incompatibility to the company, incompatibility with fellow
employees or even having employees suddenly quit.
9. Financial Plan
9.1 Start-up Expenses & Total Investment
Start Up Expense
Cost
Legal Expenses (license, permit, Branding) $2,000
Marketing (social media, flyers)
$6,200
Insurance (building, worker’s comp)
$3,600
Rent Prepaid for 1 month
$7,500
Minimal remodeling and furniture
$30,000
Equiptment
$18,640
Estimated energy costs for 1 month
$1,325
Phone bill
$125
Total
$69,390
Capital
Employee Salary (3 months)
$37,000
Cash Reserves (3 months)
$20,000
Total
$57,000
Start Up Inventory
Coffee & Tea
$7,000
Beer & Wine
$9,500
Baked goods, sandwich ingredients
$8,000
Retail Supplies, other
$2,000
Total
$26,500
Total Startup Costs $152,890
Total Start-Up Costs: $152,890.00
9.2 Financial Plan
Cafe Realla will sustain its growth based on the growing demand for a
modern day coffee house. Consortium Holdings has provided sufficient start-up
costs, including the capital of $57,000. Cafe Realla hopes to gain loyal and returning
customers based off our well-trained employees who provide exceptional customer
service, and organic, high-quality foods and beverages. Over the course of the next
two years, the company plans on increasing our gross margin to approximately 2025% and total GP (gross profit).
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