Business Plan: The Grind Coffee RETMANA Submitted to: INTRODUCTION Filipinos had shifted from being moderate to heavy coffee drinkers according to a study conducted by Kantar Worldpanel Philippines. These are the people who buy and consumes coffee for at least thrice a week (126 times a year) with all the available instant coffee products or 3-in1 brands in the market aside from all those popular coffee restaurants or cafés like Starbucks. Most people would usually start their day with a coffee, if not milk or milo, and some would drink it to keep them awake if needed for work. Starbucks has been a popular and a relevant coffee shop in the Filipino market. It is perceived as luxurious and is contributing to the social jobs of its customers. People who cannot afford to buy from this shop or other shops and coffee drink varieties in a same price bracket could only settle for 3-in-1 brands or instant coffee brands like Nescafe, Kopiko, and Great Taste. A good cup of coffee does not have to be expensive. It is our mission to provide a good cup of coffee at an affordable and reasonable price. Finding a great coffee on a budget is not an easy task. This is why we want to help ease the customers’ hassle and hardship and doing so and we gladly present them good quality coffee for a good price. EXECUTIVE SUMMARY The Grind Coffee will make a coffee shop experience cheaper but still giving sophisticated vibes at the same time. The business will offer pastries and coffees that are ground, roasted, and brewed from local coffee brands like Basilio Coffee and FOB Coffee (Figures of Beans). The business idea also aims to offer the convenience that the instant coffee is giving to people to give them other options than a daily consumption of a coffee in sachets which could be unhealthy. A space in the shop will be provided for dine-in, there are shelves for packed coffee displays, and a space for the counter. The café will be a small space with an interior design consisting of a white, black, and wood touches complimented by plants hanging from the tables, and the walls. This is to ensure the cleanliness and homy feel and vibe of the café. Soothing music will always be played to help sway the emotions and mood of the customers. The area will be scented beautifully by the aroma of the coffee beans being brewed to the customers. Most of the popular coffee shops are located near and inside malls or other locations that are far for some people who do not really want to travel to buy and drink coffee and for those who want a quick purchase or just a drop-by. The Grind Coffee will be a great option for them specially for those who are near Universities in Manila like the Polytechnic University of the Philippines (PUP) since the business is eyeing for this specific location and the shop will also provide a free Wi-Fi for customers. The company aims to be the preferred coffee shops of the nearby university. We want the students to think of our coffee and our place whenever they want to hang comfortably with their friend or when they want to study. When they want to buy coffee, our product and our beans should be the first thing they will think of. A strong positive presence on the internet should always be maintained. Our Facebook page should be flooded with positive reviews to entice new customers to try and drink in our small café. Advertising on the internet and our signage and logos is noticeable in the busy streets of Teresa. Events would be regularly held to continuously gain more customers. Students spreading their pleasant experiences and good taste of coffee would be a good way of promoting the café. INDUSTRY & SITUATION ANALYSIS Product Coffee is one the most popular caffeinated drink. About three billion cups of coffee are consumed each day. The average daily coffee drinkers consume 3.1 cups per day. It can be consumed either hot or cold. Coffee is brewed from roasted coffee beans that are harvested from certain species of the Coffea plant. It is served both hot and cold and is prepared in a variety of ways. Market Segment a. Coffee Shop Lovers A large portion of coffee drinkers prefer going to the coffee shops for the ambience. They want to have good coffee while also having a comfortable place and atmosphere while they drink their coffee. The atmosphere of the coffee shop completes their entire coffee drinking experience. People also loves to chat and hang out in coffee shops to enjoy the company with each other. b. Whole Bean Buyers These customers love to have good drink and enjoy and brew their preferred drinks at the comfort of their home. Coffee bean buyers are knowledgeable about the beans and are curious on how their beans compare whether they taste it in the shop and if they made it at home. c. Coffee Day Starters People wants a good cup of coffee to start their day. Student and workers alike feel that they won’t function properly without having a coffee to start their day. These customers want a quick purchase and leaves the café once they have received their order. d. Wi-Fi Enjoyer These customers want the best bang for their buck. They want to connect their phones and devices to the internet and do what their supposed to do. Some even goes to coffee shop to have a quiet atmosphere and study in it. Studying in coffee shops have been the trend for young adults and wi-fi connections is a must to this market. Market Growth The coffee market is expected to grow by 5.6% over the next five years, according to the World Bank. The market has been growing steadily since 2000, with a 4% annual increase in consumption since then. In terms of volume, per capita consumption has increased from 1.3 kilograms per person in 2000 to 1.7 kilograms in 2015, an increase of 18%. There are many factors that contribute to this growth: more people have access to higherquality coffee options; people's tastes have been changing; and there has been a shift in how people purchase their coffee from convenience stores rather than groceries stores (which used to be the primary source). SWOT Analysis Strength Weakness High Quality Products and Service Competitive Market Attractive Store/Layout Limited Market Share High Quality Products Low Brand Awareness Effective Sales and Service Culture Reliant on one main channel Close to the Customers High Operating Cost Opportunities Threats Develop customer relationship Ability to meet cash flow requirements Improve overall customer experience Consumers becoming more price sensitive Build Brand Awareness Limited Profit Levels Porter’s Five Forces Model of the Coffee Industry 1. Bargaining Power of Buyers The bargaining power of the consumer for the coffee industry is the most significant factor among the forces in the coffee industry. There are many coffee providers that sells to consumers with little differentiation with the product through cafes and through online apps. Customers have several options to what they want to buy and can also purchase substitutes with easy availability. Customers have their preferred coffee provider, but the loyalty is not strong enough to make them buy to only one coffee provider. The switching behaviors of the customers in the coffee industry is high with low to zero switching cost. Because of these factors, the bargaining power of the buyers is very high and also shows how vital customers are to the state of the company. 2. Threats of Substitute Customers have several reasons on why they buy coffees. To some, they want coffee to help start their days right and give them energy and focus to battle through the day. Others buy coffee as a pass for their group of friends to sit on a place comfortably and chat. Many other trends are on the rise that may be a substitute to a coffee or a coffee place. Milk teas, teas, and fruit shakes are emerging threats to the coffee industry. This makes the threat of substitute in the coffee industry high because of the availability of multiple substitutes. 3. Competitive Rivalry The Coffee industry is as strong as ever. The competitive rivalries among players in the coffee industry is fierce because there are so many strong major players in the coffee industry scene. Starbucks being one the leading coffee providers opening stores left and right, is taking up a huge chunk of the market share. Other notable players in the coffee industry include Tim Hortons, Bo’s Coffee, J. Co’s, Dunkin, and many more. This makes the competitive rivalry among the coffee industry very high. 4. Bargaining Power of Suppliers The Bargaining power of suppliers is low because the power of the companies is very strong and commanding. Companies have the option to buy different from a different supplier which puts them in a dominant position during their negotiations. Suppliers want to have a contract from big companies to secure sales and this puts them in the mercy of the bigger companies. Additionally, most companies try to produce their own coffee beans which are the key ingredient in the coffee to lower cost which makes it even more difficult for suppliers to have power over the company. 5. Threats of New Entrants The threat of new entrants in the coffee industry is very high because customers keep wanting to try more variety to their coffee preferences. Also, the differentiation in the coffee product is low compared to other products. Customers are still drinking coffee whether they are trying a famous brand and a start-up company. This makes the hurdle of customers to market entry low. Starting a local coffee shop would not cost a big capital as the skills of brewing and roasting the coffee is trainable because it is not highly technical. Consumers of coffee are increasing, and this makes the coffee industry strong and booming. COMPETITION ANALYSIS Advantages BigBrew The Coffee Syllables The Coffee Realm Staffs are attentive and The stall is in Newton Plaza. Has dine-in option and good organized customers. in handling Customer can buy coffee while ambience to enjoy your doing grocery. coffee When ordering two 12oz brewed The brand has a credible coffee they will give you a discount Facebook page The price of their product is affordable specially for students Good social media presence, they post the photos of their customer on their Facebook page. Fast ordering and preparing process. Good for customers who High pedestrian traffic want coffee but can’t wait. Disadvantages BigBrew They don’t have dine-in option The Coffee Syllables The store is only a small stall The Coffee Realm Price point is not very affordable for students The store doesn’t offer Wi-Fi They don’t have a good social Slow Wi-Fi Speed for their customers Not student friendly because the students can’t study in the store media presence Stall is not aesthetic pleasing to The branch don’t have their look at own Social Media Page Key Findings Customers around Polytechnic University of Philippine Sta. Mesa preferred buying affordable drinks than more luxurious coffee brand. They are very practical in their busying decisions because most of them are in the low-income family bracket. Most students who buy coffee daily are expecting a comfortable store ambiance for them to have an option to study peacefully. For some students, a store with a reliable wi-fi is what they are looking for because they can use it for their research and other school activities There are customers who preferred making their own coffee at home but they specifically select the coffee brand of their favorite coffee shop. There are only few great coffees shop around Polytechnic University of the Philippines. It will be very beneficial for starting coffee shop to penetrate the market and take advantage on the spots that existing shops are not utilizing. There are coffee shops that are offering affordable coffee but they don’t have dine-in options. Customers around the community are mostly PUP students that is why having a dine-in option is very advantageous for the coffee shops because many students prefer studying inside a coffee shop so they can peacefully study on it. Some students also rely on free wi-fi of different restaurant and even students who have internet at home prefer going to coffee shops to have a faster wi-fi for them to finish their school activities. There is only one coffee shop in the premise, that offers dine-in option and free wi-fi but there the products they sell are not affordable for students. If there will be a coffee shop near PUP that sells good quality coffee for an affordable price and offer dine-in option and free fast wi-fi it will surely be loved by students of PUP and near residents. There is a large potential for coffee shops in penetrating the market in PUP. OPERATION PLAN Goals The goal is to provide a substantial income to the business and to establish a working place environment where both the customer and employee are treated with respect. To provide a friendly, comfortable ambience where the customer can receive quality of drinks and service at a reasonable price. Establish the brand message and voice. Hiring students to support them financially and providing both training and work experience. Tasks and Responsibilities POSITION CEO LOGISTICS ROLES Managerial Decisions and Manages the store during business hours Implementations Monitor and guide employees Managing Finance Keep track and secure finances Marketing and Sales Strategize and implement marketing activities Human Resources Hire and fire when needed Train or orient employees Planning and managing Negotiate with suppliers logistics and stocks Plan vehicle route Product/stock purchase Coordinate and control order cycle Storing of products Tracking and Recording stocks Deal with payments and Store preparations other finance related Product displays (stocking AND INVENTORY CASHIER TASKS activities during business shelves) and rearranging hours. store layout designs payments b) Interact with customers in a friendly-manner Protect store property Promotional Displays c) Operate cash register Attend to business Open the shop at exactly d) Respond to any activities at physical store 7:00am. BARISTA a) Process customer Coffee making Protect store property Attend to business activities at physical store Operate the physical shop during open hours Close the shop at exactly 10:00pm. Check stocks, tools, equipment, and materials for the next day’s operation customer needs Track, record, and check sales/revenues a) Wait and process orders (brewing coffee) b) Recommend something to customers c) Pack or serve orders The table shows the specific roles and tasks for every employee including the CEO. Every employee could actually help in doing tasks in line with the store opening preparations, although, those are specifically assigned to our cashier and barista. Required Resources A. Business Requirements 1. Business Name Registration The business must comply to all business requirements. A business name registration secures our reputation to be a legitimate business. 2. BIR Registration Registration Fee A registration to the BIR is one of the main requirements in doing a proper business in the Philippines. Any entity that receives income from business has an obligation to register and pay their taxes. Failure to do so may result in a fine, penalty, or imprisonment Documentary Stamp Tax Documentary Stamp Tax is a tax on documents, instruments, evidence, loan agreements, and papers evidencing to the acceptance, assignment, sale, or transfer of an obligation, right or property incident thereto. 3. Barangay Permit A barangay clearance certifies that our business properly complies with the requirement of the local barangay and allows the business to operate. 4. Staff SSS the shop is obligated to give the monthly SSS contribution of our employees. B. Location and Rent This will be our priority resource because this is the place where our business will officially to operate. We prefer location near universities with approximately 40 sqm and 5x8m with a low rental cost. 263 Teresa Street, Sta. Mesa, Metro Manila High pedestrian Traffic Walking distance from Polytechnic University of the Philippines It is near every store such as grocery, hardware, convenience store and many more Many students from PUP are using Teresa Street to go to school and back at their house High residential population High visibility because it is located along Teresa Street C. Shop Aesthetics 1. Theme The coffee shop will have a wood theme with a color combination of black, white, and brown which will also have a touch of modern designs. This theme will surely contribute in setting atmosphere inside the shop as it gives color of coffee combinations and aura. 2. Interior Decoration Seating and Tables We have four tables with four chairs each table that can accommodate up to sixteen customers inside the shop. Countertop This counter will be a divider for barista and cashier from the customer inside the shop. This counter will be the working space for both our barista and cashier enable for them to do their job efficiently and effectively. Smart TV For both entertainment and advertising purposes. Plants We want to put plants as interior decorations for the shop. Putting plants give the aura of the shop as clean, relaxing, and comforting. Plants also contribute to aesthetically pleasing the customers Speakers and Music Music sways the emotion of the customers. We want to play music to help get the in the right mood when they drink our products D. Coffee Business Essentials Coffee Maker This equipment will be use by our barista to brew our coffee and served it freshly brewed to the customer. Espresso Machine Machine use to produced thick and concentrated coffee called expresso. Refrigerators For storing liquids and easy to spoil food items. Water and Electricity essential needs for the shop to operate. Pumps and Containers (for syrups and beans) for fast and easy usage. Sugars and Syrups optional items to choose by customers to add for their coffee adjust the taste to the customers’ liking Cash Register (PoS) This will be operated by our cashier personnel. This machine will help us to accurately record our sales and stores the money safely. Shelves Properly display our equipment and our retail products. Wi Fi For the students to have a free access of internet whenever the drink coffee inside the shop. Cleaning Materials Basic things for cleaning to maintain the cleanliness and hygiene to our shop. E Inventory and Miscellaneous Beans/Coffee Products Coffee Brands Basilio Coffee a. Price Range 36.00 – 1400.00 b. Varieties: Ground, Beans, Coffee Drip, Civet Coffee, and Powdered c. Beans: Arabica, Robusta, Liberica, and Excelsa d. Source: Bukidnon, Quezon, Benguet, Mindoro, and Mt. Province FOB Coffee (Figures of Beans) a. Price Range: 369.00 - 1,099.00 b. Sizes: 250g, 500g, and 1kg c. Beans: Arabica and Robusta d. Varieties: Dark Roast, Hazelnut, Caramel, and Vanilla e. Sources: Benguet and Sagada f. Inclusions: Coffee tools and complements Caffeine Brothers (With subscription options and available in Shopee, Lazada, GrabMart, Foodpanda, MetroDeal) a. Price range: 150.00 – 725.00 b. Sizes: 200g, 400g, 800g, and 1kg c. Beans: Robusta, Liberica, Arabica, CB’s Finest, d. Varieties: Coffee Drip Bag, Beans, and Powder (Medium roast, dark roast, etc.) Kape Maria (Deliveries will be through Grab, Angkas, Lalamove, Mr. Speedy, and LBC) a. Price range: 285.00 – 325.00 b. Sizes: 200g c. Beans: Arabica, Robusta, and Excelsa d. Varieties: Pulag, Amuyao, Maynila, and Cordillera e. Sources: Benguet, Cavite, Ifugao Province, and Luzon Farms Cups A disposable cup with a cup cover. Utensils Coffee stir stick and spoons will be needed for mixing and scooping. Paper Bags (to go) A shopping carrier or packaging for customers who’ll buy 2 or more products. Tissues Will be handed to customers for wiping or cleaning purposes. Timeline Possible Challenges A. Crowded Space The Coffee Shop industry has been steadily on the rise for several recent years. Coffee shops, international brands and local brands alike, has been appearing left and right to serve the customers that likes to drink their coffee. We, the owners, have to understand the market and keep up with the trend to the coffee industry. A delicious coffee bean, better location, or creative promos would help us distance and have an edge to our competitors. We must regularly conduct market research and collect information on what the customer’s buying behaviour is and what will it be in the future. B. Financial Managements Poor financial managements have always been a downfall of many start-up businesses. We must understand our margins and how much it delivers profit to our business. Understanding our costs to make sure it doesn’t affect our cash flow negatively should always be kept in mind. Pricing our products should be a priority to keep as afloat in the business. To improve the company’s financial management, we must regularly check and update our balance sheets and should conduct sales forecast to predict our sales to measure our profits and losses. C. Knowledge and Skill gaps As first-time entrepreneurs, we must understand that we are a beginner in the space. Always yearn for knowledge and experience to know the ins and out of the industry. Arrogance can be a major downfall of every business. Seeking advice to experts and actively reading business advice and lessons would help us significantly to help further our business. D. Hiring the Right People The Grind Coffee plans to hire students as part time workers for our shop. This is to help nearby colleges have a source of income and a convenient workplace to their primary jobs as students. With this in mind, we understand that they are part time workers and inexperienced. Inexperience may lead to poor performance or poor work ethic. To avoid this problem, we must be thorough in our hiring process. Carefully examining the applicants during the interview must be done. After the hiring process, trainings should be conducted properly with strictness. E. Time Management and Productivity Time Management is crucial to every business. Planning and scheduling will be very vital to keep our business on track and help us achieve our goals. Following the time and abiding the schedules would help greatly in maintaining the trajectory of the business. Important tasks such as the day of deliveries, cleaning the area, managing tax schedules should be handled properly to avoid future hassles. The owner’s and employee’s productivity must also be kept in check if it is beneficial to the business. Motivating them to help improve our performance must always be done to also increase efficiency as it will reflect to the business’s sales performance. Measuring Success The business got return on investment on year one Having 100 customers to shop in our store daily Revenue is increasing minimum of 60% per year Getting 30,000 likes on our Facebook Page and 5,000 followers on Instagram Full of positive review on our Facebook page Employees loved their job and work environment Opening new branch on different location Preparations for Emergencies The Grind Coffee will also make a plan and will prepare things needed when emergency arise. The business could consider the following: Fire disaster Install smoke alarm detector Keep exits clear and mark emergency exit Educate employees: fire safety procedure and evacuation plan Fire extinguisher Heavy rains and flash flood Stock emergency kit (flashlight, batteries and first aid kit) Earthquake Conduct an earthquake drill for employees (Drop, cover and hold procedure) Bio security threats Hygiene practices must be observed for all employees Workplace accidents or deaths Train employees for Standard first Aid and Basic life Support (i.e., CPR) Loss of power Power generator Terrorist or major criminal incidents Install CCTV for documenting/recording incident purposes Emergency alarm button MARKETING STRATEGY Social media marketing strategy We will connect with our customers through the use of social media, including TikTok, Instagram, Twitter, and other well-known social platforms, as we can advertise our coffee shop by posting videos, sharing pictures of our coffee shop and menu items, promoting new products, announcing coffee shop events and news, sharing a behind-the-scenes look at our employees and culture, and directly engaging with customers. Influencer Marketing We will employ influencers to market our goods by inviting them and providing them with special treatment and benefits so they may promote our coffee shop in their specialized sectors. Influencers include food bloggers, local leaders, news anchors, and even well-known student athletes. Online Reviews We will utilize Yelp and Google My Business since they will make it easier for people to find us online, allow us to display images of our menu and items, and can also assist us by enhancing our profile through paid advertisements and page upgrades. Word of Mouth and Networking We may get to know our "neighbors" at adjacent firms by joining local Chambers of Commerce, entrepreneur clubs, or small company groups. Find consumers that share our interests, and we might be able to work together to increase traffic to our coffee shop. We can better understand and help the local population by getting involved with local clubs, organizations, or schools. Events and Experiences We will be able to attract new clients via hosting. This may also be a fantastic approach to build brand recognition and create loyal customers. TEAM MANAGEMENT STRUCTURE Flat Structure This structure is mostly used by small businesses or start-up businesses since it only requires fewer levels of management, thus, makes the reporting line more direct than other structures like hierarchical team structure. It could also initiate more communication and collaborations between workers. In this case, less staffs are required which means reduced expenses and employees will feel more appreciated and encouraged because of greater responsibility given to them with the absence of middle management. The management structure could still change in the future depending on what will be more appropriate for the business if it expand or grow which could require more employees or middle management. FINANCAL BUDGET AND FORECAST PLAN RENT COST 40SQM 30,000x3Mos. deposit 90,000 = TOTAL CONSTRUCTION COST Paint job 10,000 Electrical fixtures 8,000 Decoration 5,000 Tiles 10,000 Laminated wood floor 40,000 Woodworks 8,000 Masonry works 5,000 Labor 4x600 per day (6 days) 14,400 100,400 = TOTAL FURNITURES, APPLIANCES, & MISCELLANEOUS Tables and Chairs 4 sets (6,000) 24,000 A/C Unit 2HP Split type TCL 35,000 Espresso Machine Asahi CM039 6,700 Coffee Maker Dowell CM-1050 1,100 Coffee Grinder Barista Brothers Smart Coffee Grinder 5,500 Water dispenser Asahi 8,000 Refrigerator/Chiller 11 cu.ft Fujidenzo chiller 25,000 Airpot 5L Imarflex 3,000 Wifi Globe 100MBps 2,000/month Television LG 43inch Smart TV 22,000 Basic POS System Employee Uniform 3,000 500/set (top, apron, cap, nameplate) 2,000 124,000 = TOTAL INVENTORY Beans P 200/kg 20 kg 4,000 Cups w/ Lid for warm drink P 175/25pcs 20 packs 3,500 Cups w/ Lid for cold drink P 275/50pcs 10 packs 2,750 straw P 43/100pcs 10 packs 430 Wooden coffee stirrer P 39/100pcs 10 packs 390 Paper bag P 5/pc 1000 pcs 5,000 Tissue Paper P 80 10 packs 800 stickers P 45/50pcs 10 packs 450 Sugar P 85/kg 10 kg 850 Syrup P 300/L 5L 1,500 milk P1,000/ 12L 24 L 2,000 21,670 = TOTAL HUMAN RESOURCE Logistics / Inventory P75/hr 1 staff 14,400/month 2 staffs 26,880/month Personnel Cashier / Barista P70/hr 41,280 = TOTAL Grand Total = 377,350 References Figures of Beans. 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