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A Business Plan Caf Sahara

Submitted in partial fulfillment of the requirements for the Award of degree of Master of Business Administration

2010 2012

Submitted by: Arjit Sharma

Guided by: Dr. R.K. Sharma

BHARATI VIDYAPEETH DEEMED UNIVERSITY INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI An ISO 9001:2008 Certified Institute NAAC Accredited Grade A University CRISIL Grading MBA Programme A * - National Level

A ** - State Level

Certificate of Originality

This is to certify that the Business Plan entitled Caf Sahara Submitted to Bharati Vidyapeeth Deemed University Institute of Management & Research, New Delhi in partial fulfillment of the requirement for the award of the degree of MBA is an original work carried out by Arjit Sharma under the guidance of Dr. R.K. Sharma . The matter embodied in this project is a genuine work done by Arjit Sharma to the best of my knowledge and belief and has been submitted neither to this University nor to any other University for the fulfillment of the requirement of the course of study.

Signature of the Student

Signature of the Guide

Designation

Certificate

This is to certify that the Business Plan titled Caf Sahara is an academic work done by Arjit Sharma under the guidance of Dr. R.K. Sharma submitted in the partial fulfillment of the requirement for the award of the Degree of MBA from Bharati Vidyapeeth Deemed University, Pune. The authenticity of the Business plan will be verified by the viva examiner which includes the verification of data the contents therein and may be rejected due to non-fulfillment of quality standards.

Dr. Sachin S. Vernekar (Director)

Acknowledgement

Gratitude takes three forms- a feeling from heart, an expression in words, and giving a return. I hereby take this opportunity to thank all those who have helped me some way or the other in the successful completion of this Business plan. The guidance and support of many people has been immense throughout the Business Plan. I would specially thank my faculty guide Dr. R.K. Sharma for providing encouragement and indispensable feedback. He has guided me not just in designing my business plan but also how to leverage this as my strength in the upcoming placement session. And I would also thanks to my father Mr. P.K. Sharma who helped me in this business plan, because of his support I am able to bring it to the reality.

Name & signature of the student Arjit Sharma

Preface

Progress is a continuous process. It is relative and absolute. We cannot stop at a certain destination and declare that target has been achieved and we need not to go further.

Business Plan is a major component of the learning process at our institute. It enables the students to study the business & the environmental forces acting upon it. I completed my Business Plan on Caf Sahara. I was able to enrich my knowledge & developed my outlook for becoming a better professional. Developing Business Plan was a platform for me to learn a lot about the business world. I am grateful to my guide who helped me in the successful completion of my business plan.

Name & signature of the student ARJIT SHARMA

Contents
Chapters I: Executive Summary of Business Plan A. Key elements of the plan B. Description of Business and target markets II: III: Objectives of Business Plan People (Management Team) A. Brief description of management team IV: Environmental Scanning of Business A. Industry Analysis B. Competitors Analysis (SWOT of Competitors) C. Opportunities and Reasons of Entry of Business D. Limitations of Business E. Strategies framed to overcome environmental Challenges Page No.

V:

Manufacturing and Operations A. Location of Production facilities B. Capacity of existing facilities C. Plans for expansion

VI:

Personnel Strategies A. Personnel needed to manage Business B. Experience and expertise of existing personnel C. Training needs of existing personnel

VII:

Market Research 1. Existing Demand of target Market 2. Competition

A. Market Conditions

VIII:

Marketing Plan

A. Distribution Strategies B. Pricing Strategy C. Promotion Strategy D. Product Strategy E. STP (Segmentation, Targeting and Positioning)

IX:

Financial Decisions A. Performa financial statements and projected cash flows B. Current sources of funding Private and Bank funding C. Financial needs and future needs of funding D. Tax Consequences of Business E. Potential risk and sources of protection

X: XI:

Risk in Business Implementation Schedule

Appendices Bibliography

Caf Sahara

CAF SAHARA
EXECUTIVE SUMMARY Introduction Caf Sahara is a start-up sheesha and coffee house establishment located in Punjabi Bagh. Along with sheesha and coffee different varieties of Expresso, tea, juices, Kava, Starters would also be served. Caf Sahara expects to catch the interest of a regular loyal customer base with its broad variety of coffee, Expresso, tea, Kava, juices, Cigar and sheesha varieties. The company plans to build a strong market position in the town, due to the partners' industry experience and mild competitive climate in the area. The Caf Sahara staff members who prepare the coffee, Expresso, tea, juices, Kava, Starters and sheesha varieties are highly trained and experienced. They know how to prepare an excellent Arabian and different coffee, Expresso, tea, juices and sheesha varieties. We use the highest quality equipment and ingredients to deliver a noticeably superior product. Our design style is different from all other coffeehouses and sheesha parlors, an upscale "Arabian" look. It features stained glass decorations, art glasswork, Arabian style furnishings and outdoor dining. Caf Sahara aims to offer its products at a competitive price to meet the demand of the middle-to upper middle-income local market area residents. The Company Caf Sahara is incorporated in Punjabi Bagh. It is owned and managed by me. Arjit Sharma has completed his MBA in marketing and finance. The company intends to hire 4 full-time Coffees, Expresso, Tea and sheesha makers one juice maker, one cook, one-cigar sales person two sweepers, two waiters, one cashier, one guard. Products and Services Caf Sahara offers a broad range of coffee, Expresso, tea, Kava, juices, Cigar and sheesha varieties. Coffee beverages are all from high quality Columbian and Arabian grown imported coffee beans. Caf Sahara caters to all of its customers by providing each customer coffee and Sheesha products made to suit the customer, down to the smallest detail. The sheesha provides freshly prepared sheesha of different flavors products at all times during business operations. The Market Caf Sahara wants to establish a large regular customer base, and will therefore concentrate its business and marketing on local residents, which will be the dominant target market.

This will establish a healthy, consistent revenue base to ensure stability of the business. High visibility and competitive products and service are critical to capture this segment of the market. Financial Considerations Caf Sahara expects to raise 15,00000 of its own capital, and to borrow 15,00000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required. Caf Sahara anticipates sales of about 4500000 in the first year, 5500000 in the second year, and 7000000 in the third year of the plan. Caf Sahara should break even by the fourth month of its operation as it steadily increases its sales. Profits for this time period are expected to be approximately 805000 in year 1, 1097000 by year 2, and 1807000 by year 3. The company does not anticipate any cash flow problems.

Highlights:

7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 1st Year 2nd Year 3rd Year

Sales Gross Margin Net Profit

Mission

Caf Sahara aims to offer high quality coffee, Expresso, tea, Kava, juices, Cigar and sheesha varieties at a competitive price to meet the demand of the middle- to higherincome local market area residents Keys to Success Keys to success for Caf Sahara will include: 1. 2. 3. 4. Providing the highest quality product with personal customer service. A relaxing, upscale interior Arabian design. Competitive pricing. Highly trained and friendly staff.

COMPANY DESCRIPTION

Name and location: Caf Sahara launch with its first sheesha plus coffee house located in Punjabi Bagh. It also provides Expresso, tea, Kava, juices and Cigars. Caf Sahara will offer residents and visitors a totally new style of sheesha and coffee house - one offering a uniquely flavorful sheesha and coffee drink in a comfortable, upscale Arabian environment at which to socialize, relax or work. Company Objectives: Caf Sahara is a sheesha and coffee house that also provides Expresso, tea, Kava, juices and Cigars managed by me.I will provide funds by taking money from my dad, which will cover start-up expenses and provide a financial cushion for the first months of operation. A ten-year Small Business Administration (SBA) loan will cover the rest of the required financing. The company plans to build a strong market position in the town, due to the partners' industry experience and mild competitive climate in the area. Company Ownership Caf Sahara is incorporated in Punjabi Bagh. It is owned only by me.

Company History Caf Sahara is a start-up company. Financing will come from my capital and a bank loan. The following chart and table illustrate the company's projected initial start-up costs.

24%

Assets Investment 26% 34% Loans Expenses

16%

Products and/or Services Plan: Products Caf Sahara sells high-quality specialty coffee, Expresso, tea, Kava, juices, Cigar and sheesha varieties. Despite being an upscale coffeehouse, our prices are in line with the leading national chains. The Caf Sahara Menu The Caf Sahara menu sets us apart from other coffee and sheesha houses, giving us a competitive edge. Caf Sahara offer 4 four groups of drinks - coffee, tea, Expresso, juice - with several choices within each group. This enables us to provide more variety than our competitors while keeping the preparation of the drinks easy to execute. We are taking advantage of the immense popularity of flavored drinks and Chai tea by offering a product mix that includes items the other coffeehouses don't carry as well as more familiar drinks. Caf Sahara offers several smoothie drinks. We carry the highest quality fresh juices. Caf Sahara also offers a wide variety of sheesha including flavored sheesha. Prices have been determined after a thorough analysis of all food costs for every item in each drink. In some cases, an average price has been calculated and applied to all similar drinks and sheesha varieties in order to keep the menu from confusing the customer.

Sheesha Varieties

Name Mint Wild berry Double apple Peach Grape


Expresso Drinks

Prices in Rs 200 200 200 200 200

NAME Expresso Cappuccino Caf Latte Caf Mocha

Regular in Rs 20 25 30 35

Large in Rs 30 35 40 45

Flavored Expresso Drinks

Name Vanilla Cappuccino Vanilla Latte White Chocolate Latte The 50/50 Latte The Raspberry Mocha Latte

Regular in Rs 30 35 35 30 32

Large in Rs 40 45 45 40 40

Coffee Drinks

Name The Banana Nut Java The Cafe Milano Coffee of the day De cafe

Regular 20 22 15 17
Tea

Large 30 30 25 27

Iced Tea

Rs.15 small

Rs 20 medium Rs 25 large

Hot Tea

Rs 17 regular

Peppermint Herb Apricot Earl Grey Lavender Darjeeling (Rs 35 regular) Golden Flowers Herbal Herbal Lemon Tropical Green
Juices

Name Fresh squeezed orange juice Old-fashioned Lemonade Genesis Juice Crystal Geyser Juice Squeeze

Regular in Rs 25 15 30 25
Cigar

Large in Rs 35 20 40 32

Name Cuban Romeo & Juliet


Kava

Price 200 5000 1000 15000

Name Kava Kava ( cardmon)

Price 20 25

Target Markets The target market will be the areas in and around Punjabi Bagh. We will be targeting the youth in areas like Punjabi Bagh, Paschim Vihar, Rani Bagh.

CHAPTER 2

OBJECTIVES OF BUSINESS PLAN Caf Sahara objectives for the first three years of operation include: Create a comfortable environment through apt ambience. Keeping drinks cost at less than 35% of revenue. Keeping employee labor cost between 37-39% of total sales. Remaining a small, unique cafe with eclectic drinks and service. Averaging sales between Rs4500000 7000000 per year. Promoting and expanding the Caf Sahara concept as a unique midtown cafe. Expanding our marketing and advertising in New Delhi and in the neighboring suburbs to increase our customer base. Achieving a profitable investment return for investors for Years 2 - 6.

CHAPTER 3

PEOPLE (MANAGEMENT TEAM) Management Team Arjit Sharma has completed his MBA in marketing and finance and he is the whole sole incharge of the Caf Sahara. Personnel Team: The personnel plan is included in the following table. It shows the monthly salaries for every year of all employees. Per month salary for 1st yr in Rs 12000 14000 15000 11000 10000 10000 8000 4000 each 7000 5000 each 5000 110000 Per month salary for 2nd yr in Rs 14000 16000 16500 13000 12000 12000 10000 5000 each 8000 5500 each 5500 128000 Per month salary for 3rd yr in Rs 15500 17000 17500 14000 13500 13000 11000 5000 each 8000 6000 each 6000 137500

No of Employees Coffee Maker Expresso Maker Sheesha Maker Tea Maker Cook Juice Maker Cashier Sweepers Guard Waiters Cigar Sales Person Total 1 1 1 1 1 1 1 2 1 2 1 13

CHAPTER 4
ENVIRONMENTAL SCANNING OF BUSINESS A. Industry Analysis The Indian food market is approximately Rs 2,50,000 crore ($69.4 billion), of which valueadded food products comprise Rs 80,000 crore ($22.2 billion). Despite food production in the country is expected to double by the year 2020, not much attention has been given to the growth of this vital industry, with no standard publication highlighting the importance of this sector. F&B News aims to cover news, events, research, innovations, new products & processes, marketing and so on (both national and international), which will broadly cover around 75 key areas in the food, beverage and its allied segments. These include food processing, bakery, confectionery, dairy, meat & poultry, fruits & vegetables, fisheries (including aquaculture), food ingredients, grocery retail, packaging, alcoholic beverages, soft drinks and bottled drinking water, canning, fats and oils, filters and filtering materials, flavours and flavour enhancers, nutrient additives, frozen food/refrigeration and thermo processing, among others. With food production expected to double by 2020, large investments are already going into food and food processing technologies, skills and equipment. Given the changing industry dynamics, it is paramount for F&B News to highlight news, issues and events in the sector, some of which are briefly discussed below.

The food processing industry is witnessing a 20% annual growth rate and, consequently, the demand for processed foods and beverages in the country is constantly on the rise. There are 300 million upper-and-middle-class consumers of processed and packaged food in the country, and another 200 million are expected to shift by 2010. In the scenario, the food processing industry has been accorded priority status by the new government with Subodh Kant Sahai holding independent charge of the Ministry of Food Processing Industries. Processed foods are primarily derived from agricultural commodities, which often incur multiple taxes at various stages. This multiple taxation has a cascading effect on prices. Moreover, there is a wide variation in the level of taxes across states, which creates a barrier to the free flow of materials from the farm to the factory and ultimately to the consumers. Post-Green Revolution, it is essential that agricultural research reoriented to address new challenges. As the existing crop seeds have reached yield saturation, there is an urgent need to evolve transgenic varieties through the application of biotechnology,

RNA use, and molecular biology. These varieties should have high yield, short maturity, pest and disease resistance, stress tolerance, and wider adaptability. With the help of indigenous breeds improvement programme, nutritional research and improved cost-effective vaccine programmes, India has achieved the distinction of being the highest milk producing country in the world. Similarly, with processes in place to improve quality of marine products for internal and export markets, India is the seventh largest producer of fish in the world and is ranked second in inland fish production. Special foods are available for every patient today, be it hypertension, diabetes, obesity, or even weight reduction. For instance, diet food and nutraceuticals are the latest fad. The market for sugar-free confectionery and snack products is growing steadily. Motivated by a desire for maximum indulgence coupled with a wish for calorie control and health benefits, consumers are increasingly choosing sugar-free and sugar-reduced products. Packaging of food products has become important in order to ensure safety and hygiene and to eliminate the possibility of adulteration. In some cases, more than 50% of the price of a product goes towards packaging. Good packaging will greatly catalyze the development of a food-processing sector. However, packaging industry is yet to achieve international standards in the country.

B.Competitors Analysis (SWOT of Competitors)

Strengths

Good relationships with many perspective customers in the target market. Strong family name recognition and equity in the community. Well trained employees. Free home delivery. Huge profits.

Weaknesses

The need for reliance on outside borrowers. The learning curve associated with entering an industry without direct prior experience. The need to have a fairly constant volume of business to support the necessary service staff. Opportunities

Participation within a steadily growing industry.

Potential investment. Locational advantage. Threats

Future/ potential competition from a franchised firm. A slump in the economy, reducing discretionary spending. Social issues.

COMPETITIVE ANALYSIS

Competitive Edge A significantly higher quality better tasting coffee, Expresso, tea, Kava, juices, Cigar and sheesha varieties. Our current location can arguably be considered the best in the market. An ambiance superior to all other coffeehouses in the area with upscale "Arabian" look. It features stained glass decorations, art glasswork, Arabian style furnishings and outdoor dining. The only coffee plus Sheesha house to provide regular weekend evening entertainment. A wider variety of popular drinks than our competitors, including flavored coffee and Expresso drink, tea, and juice. We have several drink options for people who don't drink coffee.

Competitors BARISTA Barista coffee was establishes in 1999 with the aim of identifying growth opportunities in the coffee business. Increasing disposable incomes and global trends in coffee indicate immense growth potential in one particular segment. Barista Coffee is a chain of espresso bars in India. Headquartered in Delhi, Barista currently has espresso bars across India, Sri Lanka and the Middle East. It was founded in 1997 by Amit Judge and was part of his group of companies. He sold part of the equity to first Tata Coffee. Then after he and Tata Coffee fell apart, Sterling then bought over the firm. In 2007, Sterling divested all their stake to Lavazza. Barista Coffee Company is currently owned by Lavazza, Italys largest coffee company At Barista Lavazza, we do all we can to make every guest feel comfortable and welcome. We serve nothing but the finest Arabica coffees and cuisine at great value prices. We have friendly and efficient brew masters who believe in service with a smile. And provide a cheerful, interactive ambience that makes guests wish their coffee breaks lasted just a little bit longer.

To share our cup of joy, we have always stuck to our Italian roots, guarding them zealously to ensure that our espresso bars reflect the warmth and character of traditional Italian coffee houses. And in the process, make Barista Lavazza the place where the world meets. Our aim is to passionately deliver the highest levels of experiential services. Maintain consistency in serving the highest quality products and become a globally competitive organization one that is driven by an insatiable thirst for excellence. CAF COFFEE DAY(CCD) Caf Coffee Day is a chain of coffee shops in India having its headquarters in Chikkamagaluru, Karnataka. A division of Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL), it is commonly known as Coffee Day or CCD. It opened its first cafe in 1996 on Brigade Road in Bangalore, and today has the largest cafe retail chain in India with over800 cafes in 112 cities.Large number of coffee day cafes are located in Bangalore. The cafe chain has had much success riding, and to some extent creating, the cafe culture wave that swept across metropolitan India following strong economic growth resulting in an increase in youth spending power. It has even tied up with World Space and Micro sense to enable its cafes with satellite radio and Wi-Fi, respectively. Its first Wi-Fi cafe was opened on Lavelle Road,Bangalore. Caf Coffee Day sources coffee from 5000 acres of coffee estates, the second largest in Asia, that is owned by a sister concern and from 11,000 small growers. It is one of Indias leading coffee exporters, with clients across the USA, Middle East, Europe and Japan. With its roots in Chikmagalur, the home to some of the best Indian coffees, Coffee Day has its business spanning the entire value chain of coffee consumption in India. Its different divisions include: Coffee Day Fresh 'n' Ground (which owns 450 coffee bean and powder retail outlets), Coffee Day Xpress (which owns 730 Coffee Day kiosks), Coffee Day Takeaway (which owns 9000 vending machines), Coffee Day Exports and Coffee Day Perfect (FMCG Packaged Coffee) division. It is entering the European market by opening two Cafs in Austria as well, making forays into Pakistan and Germany to set up cafes abroad. The strategy CCD has adapted is to place a cafe in every possible location where some business can be generated. So in Bangalore, in the main shopping district, there are six outlets in a 2 km radius and overall 120 cafes in Bangalore alone. Another model which

CCD has adapted is to be present in educational institutions and corporate campuses either in the form of detailed cafes or its economical model of CCD express. These innovative strategies have ensured that the competition is at bay and ensured CCD's dominance in the Indian market though many of its outlets are incurring losses. Cafe Coffee Day competitors include but are not limited to Barista Cafe Mocha Costa Coffee

Basic need of the existing customers 1. To give something new innovation. 2. To have the best quality in minimum price. 3. New designs. 4. New pattern of Cafs. 5. New attractive designing and good fitting of the Caf . 6. New Caf /latest trends of Caf . 7. Ethnic.

C. Opportunities and reasons of entering business Caf is big business driven by the ever-growing consumer need for an array of products and services. For many the perception of Caf does not go beyond being a customer at a market or at the most from a summer sales job in a mall outlet. But there are many behind-the-counter tasks involved in getting the products into the market and onto the shelves ready for customers to buy. This lends itself into a breadth of career paths in merchandising, marketing, and store management, finance and distribution and information systems. Following are the opportunities:1. Low cost of operations. 2. The franchising. 3. Joint ventures. 4. Strategic license agreements. 5. Abundant availability of skilled labor. 6. Potential untapped market. 7. Rapid economic growth. 8. More growth opportunities.

D. Limitations of the business High staff turnover. High absenteeism of the staff at the outlets. Huge expenditure on the inventory and salary of the salespersons. Incurring losses. Less profit maximization.

Less pay structure of the workers. Outdated technology like machines of billing etc. Changing market conditions constantly. Changing customers preferences constantly.

E.Strategies to overcome environmental challenges Consumers are the kings in todays market. Consumer decides the demand and supply for each product. Some products are there, which triggers huge demand and if there is a demand there also be enough competition for that particular product. Business owners are planning strategies to cut through this competition and make more sales and retain customers. Strategies are as follows:1. Analysing the market conditions by surveying method like personal interview. 2.Setting-up a written plan as a road map and follow it, check it daily and see if you are sing from it and if so make course corrections. 3. Hiring people by self and train them self - no one knows what is wanted better than us. Teaching them to shut up and listen. 4. Keeping employees happy. A happy employee is less likely to steal, more likely to exude joy and as a result will result in happier customers. 5. Talking to the customers as they leave the store, the ones that bought will tell what they likes, the ones that didn't buy will tell why they didn't buy, listen and take notes. 6. Offering huge discounts.

CHAPTER 5
MANUFACTURING AND OPERATIONS A. Location of production facilities The production activity should be located where a firm can be most productive and yield the highest revenues per unit of investment. A highly productive business outlet:

Is one that is near to the market, so that the demand for units of output is high relative to costs of making that input? Is one that is close to a skilled labor force? The easier it is for the firm to attract labor with appropriate skills the more likely it is to produce high value outputs and low costs per unit of output. One that locates close to high value raw materials. The further materials have to travel the lower the productivity of the plant will be.

The effective location for production will include some or all of the following factors:1. The closeness to point of sale. The higher the sales revenue, the higher the productivity will be. 2. Near to skilled labor source. 3. Have rooms for expansion. 4. Have good communication links. 5. Closeness to raw materials. 6. Away from centers of population - for noisy, environmentally unfriendly industry.

B. Plans for expansion Our Cafe growth strategy is to increase Cafe sales and profitability by expanding our network of Cafe store and improving the performance of existing store. Our Cafe locations

build brand awareness and contribute to market penetration and growth of the brand in concert with our wholesale operations. The store will also consider opening stores in the different states in the next years. Within 6 to 8 months we will create a portable Caf Sahara kiosk to sell and market our products at special events and community activities. Delhi has many such events every year. It will be an excellent way to publicize Caf Sahara. The kiosk will be highly visible and fun. It will also potentially be very profitable, although it's hard to determine how profitable with any accuracy until the local response is measured.

My long-term plan for the business 1. To invest the capital more in the future to expand the business. 2. To advertise my Caf through online advertising. 3. To earn the profits 5 times of the todays. 4. To built a big space Caf from the small Caf . 5. To expand the business in the whole country and opening of the caf in different states.

C. Product modification necessary to adapt to local environment 1. Availability of Cafe. 2. Procedure of payment of bill through credit card may not be available. 3. Cafe repairing facility may not be available like staff resourcing. 4. Quality of a product. 5. Quality of a process of production.

CHAPTER 6

PERSONNEL STRATEGIES

A.Personnel needed to manage business The Cafe Sahara will be open seven days a week during the summer. For the Holiday season we will extend our hours to two nights a week to accommodate those after work. We will be located next to a well known upscale other Cafes in the area, throughout the summer customers line up to wait for new stock, We will be able to capture that traffic. As long as there is a customer in the field we will stay open and serve them. The personnel information of my Caf Sahara is as follows:Personnel Team: The personnel plan is included in the following table. It shows the monthly salaries for every year of all employees. Per month salary for 1st yr in Rs 12000 14000 15000 11000 10000 10000 Per month salary for 2nd yr in Rs 14000 16000 16500 13000 12000 12000 Per month salary for 3rd yr in Rs 15500 17000 17500 14000 13500 13000

No of Employees Coffee Maker Expresso Maker Sheesha Maker Tea Maker Cook Juice Maker 1 1 1 1 1 1

Cashier Sweepers Guard Waiters Cigar Sales Person Total

1 2 1 3 1 13

8000 4000 each 7000 5000 each 5000 115000

10000 5000 each 8000 5500 each 5500 133500

11000 5000 each 8000 6000 each 6000 143500

The salary of the workers is also negotiable and it is based on the working hours and skills of the employees. For extra working hours:For 2 hours overtime a day= Rs.150 for full-time workers The overtime is counted only for the workers if the workers will in the field for more than 2 hours and less than 2 hours of work, the overtime will not be counted.

Holidays/leaves given to employees:1. Casual leave= 3 2. Sick leave= 2 The leaves are also negotiable with the type of the worker in the Caf Sahara. For workers:1. Casual leave= 5 2. Sick leave= 3 B. Experience and expertise of the existing personnel Caf Sahara salespersons typically learn their skills through on-the-job training. Although advancement opportunities are limited, having a college degree or a great deal of experience may help Caf Sahara salespersons move into management positions. Qualification of the workers:1. Minimum 10+2 with 50% percent with HSC and CBSC for part-time workers. 2. Minimum graduate with 45% percent marks from recognized university. 3. The candidates who have experience of 6 months in a Caf will be highly preferred.

Education and training There usually are no formal education requirements for Caf sales positions, but employers often prefer applicants with a high school diploma or its equivalent. This may be especially important for those who sell technical products or big-ticket items, such as electronics or automobiles. Most Caf Sahara salespersons receive on-the-job training, which usually lasts anywhere from a few days to a few months. In small & hired workers usually are trained by an experienced employee. In large stores, training programs are more formal and generally are conducted over several days. Topics often include customer service, security, the and procedures, and cash register operation. Depending on the type of product they are selling, employees may be given additional specialized training. Due to providing the best possible service to customers is a high priority for many employers, employees often are given periodic training to update and refine their skills.

Other qualifications The employers look for people who enjoy working with others and who possess good communication skills. The employers also value workers who have the tact and patience to deal with difficult customers. Among other desirable characteristics are an interest in sales work, a neat appearance and a courteous demeanor. The ability to speak more than one language may be helpful for employment in communities where people from various cultures live. Advancement The opportunities for advancement vary. In some small establishments, advancement is limited because one person is often the owner and does most of the managerial work. In others, some salespersons can be promoted to assistant manager. Large Caf businesses usually prefer to hire college graduates as salespersons, making a college education increasingly important. However, motivated and capable employees without college

degrees still may advance to administrative or supervisory positions in large establishments. As salespersons gain experience, they often move into positions with greater responsibility and may be given their choice of field in which to work. This opportunity often means moving to areas with higher potential earnings and commissions. The highest earnings potential usually lies in selling big items such as jewelry and other items although doing so often requires extensive knowledge of the product and an excellent talent for persuasion. The previous sales experience may be an asset as when one is applying for positions with larger Cafes or in non Caf industries, such as financial services, wholesale trade or manufacturing.

C. Training needs of existing personnel staff Training and development continues throughout an employees career and is supported by an annual performance review that identifies possibilities for further progression and associated training and development needs. Managers in offices or other internal trainers carry out most of our training. When the employees develop, the career develops. The yearly performance reviews for all employees are a common practice. Our training structure is based around non-mandatory training that is relevant to all human resource operations globally. In addition to the global induction training modules that every employee needs to complete. These training modules cover knowledge such as: what it means to be good Cafes, staff development, presentation and controlling. Allied to these, there are a number of nonmandatory global training modules.

The training consists of different subjects:1. Caf handling and care. 2. The security. 3. Customer service. 4. The Cafes. The training consists of two parts and is integrated into daily morning meetings in offices. These are: - customer service focused training and pre-campaign training. The customer service-focused training is provided during the 15-minute morning meeting for all employees in every store, six days a week throughout the month. Every other week the morning meetings also cover pre-campaign product information. In some stores we have already seen positive results. This initiative will continue and will also cover challenging customer situations.

CHAPTER 7

MARKET RESEARCH A. Market Conditions Instead of building a business around a preconceived concept, we conducted market research and built a concept around our consumers. Our market analysis identified the following key drivers as areas of opportunity to service New Delhi restaurant customers: 1. Portion Selection: Nearly 95% of our surveyed focus group endorsed having a choice of different size portions. This statistic is in line with findings reported by the Table service Operator Survey. Our customers want the option to choose what satisfies their appetite. 2. Menu Variety: Caf are increasing in New Delhi. The proliferation of international cookbooks, food magazines, TV cooking shows and imported goods offers ample evidence that America, as a whole, is currently on an international tasting spree. In fact, eating places that identify themselves as ethnic establishments numbered nearly 78,000 in 1999 and recorded sales of Rs457.5crores. Our research results do not identify any single ethnic style of restaurant as desired, but rather suggest that incorporating strong multi-ethnic influences in the menu selection will be popular. Again, variety is the underlying element for this concept. 3. The Dining Experience: Customer satisfaction with food and service has been and continues to be of utmost importance, but our findings indicate that the dcor, lighting, bar, and other options to improve the dining experience are also factors in customer decisions. Golden Moments takes all these factors in consideration for the design of this cosmopolitan restaurant. 4. Reasonable Prices: This was no surprise given the economic tide. Although the restaurant industry as a whole has seen growth in 2002/2003, customers are demanding value for their dining dollar. Golden Moments menu is priced at a mid-tier level, with no entre over Rs300. In addition we have an extended Tapas and Appetizer selection priced between Rs52.5-142.5, allowing budget dining in a full-service restaurant. 1. Existing demand of target market 1. Medium demand in the market where my Caf is located. 2. The customers are generally belong to low and middle income group levels. 3. Mostly the new drinks and sheesha are highly demanded.

2.Competition It is located on a strip that includes a variety of businesses, but none of which create any competition. The other competitive edge we have developed is the atmosphere and reputation. Traffic is moderate to heavy, especially near the lunch and dinner hours. Our location of the Caf is a very important competitive edge. We are there, right at the point of entering or exiting the market. The nearest competitor is at least 5 miles away. We will also offer more personal attention to our customers than the larger Caf companies. 3. Strengths and weakness of the industry- barrier to entry Strengths of my Caf 1. Current location in the center has high traffic, in an area with several other shops targeting the same market which draws people to the area. 2. Personal and flexible customer service. 3. Good management skills. 4. Successful relationship marketing. 5. Shop size is restrictive. 6. Unique menu. Weaknesses of my Caf 1. Inefficient accounting systems imited financial resources lack of an established reputation. 2. Small store size and inability to find an expansion, resulting in stocking a limited product range. 3. Cafe name is not well known. 4. Limited industry experience and industry knowledge.

5. Yet there are no contractual restrictions to us adding products to the store, store size is an issue. 6. There is not a lot of competitive advertising in the market where my Cafe is located and price is not so much of an issue to our customers. Barriers and obstacles faced while entering in the market 1.The need of the huge capital to start up such as equipment, building, and raw materials and we have not invested much in the beginning. 2. The large and experienced Caf owners can generally produce goods at lower costs than small and inexperienced retailers. 3. The government regulations may make entry more difficult or impossible. In the extreme case, a government may make competition illegal and establish a statutory monopoly. Requirements for licenses and permits may raise the investment needed to enter a market, creating an effective barrier to entry. 4. The sunk costs and lost money cannot be recovered if a player decides to leave a market. 5. The incumbent Caf player can seek to make it difficult for new competitors and entrants by spending heavily on advertising that new Caf player would find more difficult to afford. 6. If a single Caf shop owner has control of a resource essential for a certain industry, then other retail shop owners are unable to compete in the market. 7. When a good or service has a value that depends on the number of existing customers, then competing players may have difficulties in entering a market where an established Caf shop has already captured a significant user base.

CHAPTER 8

MARKETING PLAN Marketing Plan: Market Analysis Caf Sahara focus is on meeting the demand of a regular local resident customer base, as well as a significant level of students, travelers passing through and local business people. Market Segmentation Caf Sahara focuses on the middle- and upper-income markets. These market segments consume the majority of coffee and Sheesha Varieties. Caf Sahara customer base in Punjabi Bagh is comprised of two target groups. 1. 2. Affluent local residents Students

These groups are all potentially strong customer segments. The benefit of this mix of customers is that it helps maintain consistent business throughout the year. The other customer segments (local residents, local business and pass-through traffic) provide a consistent foundation all year long. Also, by appealing to several market segments, Caf Sahara does not become overly dependent on any single consumer group. For example, several local coffeehouses with primarily student customers do poorly during the non-school months. They must also market themselves anew each year to the incoming students. Caf Sahara will avoid these peaks and valleys in business with a mix of customers. Affluent locals. Within five miles of Caf Sahara are of the most affluent people in Punjabi Bagh. Key influencers, trendsetters, artists, writers and celebrities have homes in Punjabi Bagh. Students. Punjabi Bagh is home to a major branch of the University as well as dozens of other schools, including many prestigious private schools and academies. To reach students we offer special student discount cards, pass out free coffee coupons at student events and offer entertainment on weekends. Students represent an excellent customer segment for several reasons:

Students bring an energy and youth to the coffeehouse. By attracting students we generate excellent word-of-mouth. Students represent a large base of potential part-time employees.

Often under the drinking age, students need an affordable place to hang out with their friends.

A. Distribution strategy The distribution involves a number of activities centered on a physical flow of goods and information. At one time the term distribution applied only to the outbound side of supply chain management, but it now includes both inbound and outbound. Management of the inbound flow involves these elements:1. Material planning and control. 2. The purchasing. 3. The receiving. 4. Physical management of materials via ware Caf storage. 5. Materials handling or handling of the stock. Management of the outbound flow involves these elements:1. Order processing. 2. Ware Caf and storage. 3. Material handling and packaging. 4. The transportation. Distribution channels are formed to solve three critical distribution problems: functional performance, reduced complexity and specialization. The distribution strategy defines how you are going to create and satisfy demand for your products. A distribution strategy defines how you are going to move products from point of creation to points of consumption, in a cost-effective manner. It must also define how to manage the brand. For my Caf :-

The suppliers supply the stock to my Caf every 15 days and sometimes also asked if there is an urgent requirement of items in my Caf . No particular procedure for distribution is followed but the salespersons in my store communicate to the people who came to my Caf and ask their requirements. Then, they start serve the customers by showing Caf menu to them. B. Pricing Stratergy Pricing strategy has been consistent with the differentiation objective, to provide added value for a reasonable rate as opposed to discounting and de valuing our products and services. Drinks and Sheesha etc. rates quoted are net of tax and service:
Sheesha Varieties

Name Mint Wild berry Double apple Peach Grape


Expresso Drinks

Prices in Rs 200 200 200 200 200

NAME Expresso Cappuccino Caf Latte Caf Mocha

Regular in Rs 20 25 30 35
Flavored Expresso Drinks

Large in Rs 30 35 40 45

Name Vanilla Cappuccino Vanilla Latte White Chocolate Latte The 50/50 Latte The Raspberry Mocha Latte

Regular in Rs 30 35 35 30 32

Large in Rs 40 45 45 40 40

Coffee Drinks

Name The Banana Nut Java The Cafe Milano Coffee of the day De caf

Regular 20 22 15 17
Tea

Large 30 30 25 27

Iced Tea Hot Tea

Rs.15 small Rs 17 regular

Rs 20 medium Rs 25 large

Peppermint Herb Apricot Earl Grey Lavender Darjeeling (Rs 35 regular) Golden Flowers Herbal Herbal Lemon Tropical Green
Juices

Name Fresh squeezed orange juice Old-fashioned Lemonade Genesis Juice Crystal Geyser Juice Squeeze

Regular in Rs 25 15 30 25
Cigar

Large in Rs 35 20 40 32

Name Cuban Romeo & Juliet

Price 200 - 5000 1000 - 15000

Kava

Name Kava Kava ( cardmon)

Price 20 25

C. Promotion strategy Promotion is one of the four elements of marketing mix (product, price, promotion, distribution). It is the communication link between sellers and buyers for the purpose of influencing, informing or persuading a potential buyer's purchasing decision. However, there are three basic objectives of promotion. These are as follows:1. To present information to consumers as well as others. 2. To increase demand. 3. To differentiate a product. The questions arise in the promotion are:Where and when can you get across your marketing messages to your target market? 2. When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch or the timing of subsequent promotions? 3. How do your competitors do their promotions? And how does that influence your choice of promotional activity?
1.

For my Cafe:I have promoted my Cafe by giving advertisement in the newspapers not on daily basis but only once in a month to control over my expenses and displayed a banner outside my Cafe. My Cafe banner is designed as:Caf Sahara Happy Hours 4pm-9pm Buy 1 drink get one drink free

D.Product strategy

The product is the catalyst for the start of a business and the development of product strategy one of the most important decisions a marketer will make since product plays a crucial role in demand, competitiveness and success. The managers analyze the ramifications of the product strategy on other areas of marketing like price, distribution and promotion. The product strategy involves the various elements which a company has to take into account when developing a product, e.g. price, variety etc. For my Cafe:In my Cafe there is no special set of the prices but my basic objective to set prices reasonable which can be easily purchased by everyone. Types of products available in my Cafe:The products available in Caf are sheesha and coffee different varieties of Expresso, tea, juices, Kava, Starters.

E.STP (Segmentation, Targeting and Positioning) Segmentation Any industry has segmented its customer in the following ways: Understanding needs and preferences of consumers Grouping customers based on their needs and preferences -- Customers with similar needs and preferences are included in this segment. Targeting the segment that the company can best meet the needs and preferences of - The Company targets the customers, of which it can meet the needs and preferences. I.e. customer needs higher- strength or low price.

Branding the commodity -- Though being a commodity product, branding is important for a company. Provide required product to meet targeted customers' needs and preferences -Delivering up to the expectations of the targeted segment.

Targeting For my Caf , I target the market and the customers by the following ways:1. Designing an attractive Caf banner. 2. Offering minimum price on items in Caf to the customers. 3. Offering the coming customers in the Cafe a welcome drink. 4. Introducing special seating arrangement for aged people, disabled people. 5. Providing discount offers on Caf items to youngsters.

Positioning A good brand positioning help guide marketing strategy by clarifying the brands essence but goals it help the consumer achieve and how it does so in a unique way. The result of the positioning is the successful creation of a customer focused value proposition, a cogent reason why the target market should buy the product.

CHAPTER 9
FINANCIAL DECISION Financial Plan A.Performa Financial statements and projected cash flows Caf Sahara expects to raise 15,00000 of its own capital, and to borrow 15,00000 guaranteed by the bank loan loan. This provides the bulk of the current financing required. Projected Profit and Loss: We expect to be profitable in the first year, with profits increasing over the next two years, as we establish a loyal customer base. Pro Forma Profit and loss Statement 1st yr Sales CGS Gross Margin Payroll Sales & Depreciation Utilities Payroll Taxes Total Operating Profit before Interest Expense Taxes Incurred Net Profit 4500000 700000 3800000 Expenses 1320000 1000000 500000 25000 100000 2920000 880000 50000 25000 805000 1536000 1200000 600000 27000 150000 3513000 1187000 60000 30000 1097000 1650000 1500000 700000 28000 200000 4078000 1922000 75000 40000 1807000 2nd yr 5500000 800000 4700000 3rd yr 7000000 1000000 6000000

Other Expenses

Net Profit Yearly

Gross Margin Yearly

Net Profit Monthly


120000 100000 80000 60000 40000 20000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

1st yr

Gross Margin Monthly


700000 600000 500000 400000

1st yr
300000 200000 100000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Projected Cash Flow The cash flow projection shows that provisions for ongoing expenses are adequate to meet Caf Sahara needs as the business generates cash flow sufficient to support operations. Pro forma Cash Flow 1st yr 2nd yr Cash Received from operations Cash sales 4000000 5200000 Additional Cash Received Sub Total Cash Received 4000000 5200000 Expenditures from operations Cash spending 3000000 3500000 Bill payments 125000 150000 Sub total spent on 3125000 3650000 operations Other Liabilities Long term liabilities 0 100000 principal repayment Purchase long term Assets 0 200000 Sub Total Cash Spent 3125000 3950000 Net Cash Flow 875000 1250000 Cash Balance 3rd yr 6800000 6800000 5500000 225000 5725000 225000 200000 6150000 650000

Balance Sheet

The following is a projected Balance Sheet of Caf Sahara. Pro Forma Balance Sheet 1st yr Cash Other Current Assets Long Term Assets Accumulated Depreciation Total Long Term Assets Total Assets Accounts Payable Long Term Liabilities Total Liabilities Paid in Capital Retained Earnings Total Capital Total Liabilities & Capital Net Worth 2nd yr 3rd yr 880000 300000 350000 80000 270000 1530000 90000 20000 110000 135000 94000 1450000 1530000 1450000 Current Assets 450000 660000 100000 200000 Long Term Assets 250000 300000 50000 200000 60000 240000

800000 1160000 Current Liabilities 60000 70000 100000 160000 135000 57000 650000 800000 650000 40000 110000 135000 101000 1060000 1160000 1060000

Startup Expenses Requirements CONSTRUCTION Site Design, Architectural Plan Demolition/Construction Electrical, Lighting Flooring Installation Bathroom Construction Plumbing Fireplace Construction Painting

50000 400000 75000 60000 25000 25000 15000 20000

City Permits/license/Fees LEGAL Accounting Legal Insurance MARKETING Opening Marketing/Advertising Graphic design/signage menu board Frequency card, Brochures OFFICE Office Equipment Computer, Scanner, Printer Telephone, Fax, Stationary APPLIANCES Preparation Equipment Dishwasher Blenders Microwaves Panini Makers Storage racks Music System Food Display case Menu board construction Cups/lids TOTAL STARTUP EXPENSE

50000 15000 20000 15000 100000 25000 15000 50000 100000 25000 15000 10000 10000 15000 10000 12000 100000 25000 15000 150000 1807000

B.Identification of key assumptions For Caf :1. Growth drives to the market. 2. Future growth forecasts. 3. Competitors identified for the target market. 4. Competitive advantages in different markets. 5. Barriers to entry to those segments targeted. For market:1. Products offered to the customers. 2. Pricing relative to the competition.

3. Promotion techniques. 4. Distribution of the products. 5. Growth in the market and market share.

For operations:1. The workers and requirement of the skills. 2. Forecasting income, profits and losses. 3. Salary of the workers. 4. Requirement of the assets. 5. Other operations.

C. Current sources of funding Private and Bank funding Unless a potential small caf business owner is independently wealthy and looking for a hobby, he or she will need to find financing for the new business. Financing a small caf business can take make forms and may include a variety of funding sources to cover the initial costs of opening and operating the business. Banks and government lending institutions such as the Small Business Administration (SBA) typically require a personal investment by the business owner showing a willingness to share the burden of risk with the lender. Even franchises that offer in-house financing for new franchise operators require a percentage of the initial investment to come from the business owner. The savings and personal lines of credit from previous employers often are tapped to cover the personal investment. For my Caf :For my Cafe,source of funding is 50% capital is invested by me and 50% I will take loan from bank. I have taken money from my father as the capital to invest in the business.

D. Financial needs and future needs of funding Most people cannot afford to open a new business on their own. With a little research it will find a number of places or individuals that are willing to put money into new businesses. Trying to stay away from high interest loan situations and look for grants and

smaller donations that will be straight forward to pay back. It may have family that is interested in helping out. For my Caf if future needs are required then the following strategies if followed:1. More loans from the banks. 2. Borrrowing funds from other small scale businesses. 3. If funding is not possible, then inventory of the Cafe may be decrease to cut costs. 4. Asking for mutual schemes. 5. Asking through bank the best source of funding.

E. Tax consequences of the business When the business case refers to a non taxpaying government or non-profit organization, the question of tax effects on the business case is non-issue. For tax-paying companies, however, it is an important question. The results of "before tax" and "after tax" business cases can look quite different. Here are some ways that taxes can impact the business:1. Taxes lower overall gains Where the business case shows gains or net cash inflows, taxes operate to lower overall gains because operating income and capital gains are normally taxed. 2. Taxes also reduce overall cost and expense impacts Where the business case shows losses or net cash outflows, tax effects operate to reduce the overall loss. 3. When the business case includes capital assets, tax savings from depreciation improve the bottom line Where the business includes the acquisition of capital assets, tax savings from depreciation can operate to increase overall cash flow. Depreciation expenses themselves do not contribute to cash flow, they are an accounting convention that impacts reported income, but not a real cash outflow. However, the depreciation expenses lower reported income, they also lower the tax liability, which does impact real cash flow.

F. Potential risk and sources of protection The process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making. Essentially, risk the occurs anytime an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given their investment objectives and risk tolerance. Inadequate risk management can result in severe consequences for companies as well as individuals.

The potential risks involved in my business of the Caf :1. Not having sales. 2. Loss of the capital employed in the business. 3. Not earning profits. 4. Demand of the workers regarding salary and wages. 5. Inability to create demand for the products in the market. 6. Damage due to fire, theft and loss. 7. Does not able to create image of the Cafe in the market. 8. Debts like loss of stock and damage of the stock. Source of protection for my business:1. Reduce the cost in salespersons and secure guards; 2. Improve the caf atmosphere and avoid watching customers directly by workers and let the salespersons pay more attention to introduce the commodities and increase their drinking desire. That can create a better psychological circumstance to increase your profit 3. Installing a camera in the caf for observing the movement of the employees. 4. Borrowing funds from the banks.

CHAPTER 10
RISK IN BUSINESS:Lack of management experience (address this risk by getting advice or mentoring from your business adviser, accountant or solicitor).

Little trading history (this will make it difficult to borrow money or receive credit, so you might need to make other plans to finance the business initially).

Economic uncertainties (if you are borrowing money and paying interest, for instance, make contingencies for interest rate increases).

Over-reliance on key staff. Over-reliance on a few suppliers. Over-reliance on a small customer base. Customer bad debts leading to cash flow problems. Partnership difficulties. A sudden increase in competition. Security issues. Failure to meet your sales targets. Lack of resources at key stages of development.

CHAPTER 11
IMPLEMENTATION SCHEDULE The schedule of the main activities supporting this marketing plan is presented in the table. This includes the promotion schedule and evaluation and control activities. An evaluation of the ongoing business will be conducted on a quarterly basis as well as a more detailed evaluation at the end of the year. A risk assessment will be conducted as part of the performance reviews of the business. Activities Develop a Restaurant & Bar business Develop Restaurant & Bar market Hire key staff for the business 1 month 2 Month 3 month 4 month 5 month -

Yes in the month of Jan Yes in the month of Jan 3 (full-time) 2 ( parttime) -

Liaise with the local government Local press advertisement and press releases

Yes through fliers in

newspapers on monthly basis Website development Launch of Restaurant & Bar office Salary of full-time workers Salary of pat-time workers Quality assessment of products Medium Yes -

2,000

2,000 1,000 medium

2,000 1,000 medium

2,000 1,000 medium

2,000 1,000 medium

Appendices

I have conducted a small survey in only few Cafes which are located in the market itself. The survey is done through personal interview method. I have surveyed the Cafes in the market where the store is located. The questions which are asked in the interview are:Q1. What is the name of the caf ? Q2. Who is the owner of the caf ? Q3. How many employees/salespersons are engaged in the caf ? Q4. What is the pay scale of the salespersons? Q5. What type of inventory is available in the Cafe? Q6. Do they have part-time employees also? Q7.What is the timings for the opening and closing of the caf in the day? Q8.What is the daily expenses of the caf ? Q9.What type of people does the Cafe target? Q10.Any plans for expansions?

Bibliography
Books 1. Anatomy of a Business Plan: A Step-By-Step Guide to Starting Smart, Building the Business, and Securing Your Company's Future 2. Linda Pinson (Author), Jerry Jinnett (Author) 3. Successful Business Plan: Secrets & Strategies by Rhonda Abrams

Magazines Journals and Newspaper : Business Today Business Line (Online Edition) (2/1/20012) The Hindu

Websites http://articles.bplans.com/writing-a-business-plan/A-Standard-BusinessPlan-Outline financing business plan :http://articles.bplans.com/category/financing-abusiness

Caf Sahara

THE END