Enterprise Project Rebecca Howells 2016

Rebecca Howells st20044474
A feasibility study into setting up a unique café in Cardiff, which
will provide a different but cosy café experience.
by
Rebecca Howells
Submitted for:
BA (Hons) Events Management
Supervisor
Ms Diana James
April 2016
Cardiff Metropolitan University
©Cardiff Metropolitan University 2016
i
Hugamug Events Management
Declaration
I declare that this Enterprise Project has not already been accepted
in substance for any degree and is not concurrently submitted in
candidate for any degree. It is the result of my own independent
research except where otherwise stated.
Number of Words: 13,176
Name: Rebecca Howells
Signed:
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Abstract
The enterprise project has been produced to evaluate the feasibility of setting up a
unique café in Cardiff, which will provide a different but cosy café experience. The
project is complete with all aspects of a business plan to show the success of the idea.
The following objectives have been met within the business plan in order to complete
the aim of the project:
 Conduct a comprehensive literature review
 Analyse the space available in the market through market research for a new
café in Cardiff
 Identify financial resources and legal requirements to establish the café
 Develop a detailed business plan and look at the revenue needed in order to
evaluate the feasibility of setting up the café
 Finally conclude and make recommendations that could be made to the
business plan
Secondary research has shown that the market is strong and successful, with
predictions for the industry to continue growing. Further market research supports this
information with positive feedback and a demand for a new café in Cardiff from
potential customers.
Various financial documents have also proved the profitability of the business idea,
turning over a good profit in the third year of trading which could provide sufficient
funds to consider development within the business.
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Acknowledgements
The author of this enterprise project would like to thank the following people for their
help.
The first thanks goes to Diana James for her time given to have meetings and always
answering the countless emails sent. Also for her support given throughout the
completion of this project.
The author would also like to thank Phil Jones for all of his help with the finances.
A thanks also goes to the participants who took part in the research of this project, as
without them the enterprise could not have been completed.
Another thank you goes to the SSS and her friends for providing the author with
constant laughs even when she was stressed, not just throughout this project, but, her
three years at university. For also giving some unforgettable memories and the best
three years.
Lastly, but not least, a thank you to her mum, dad and sister for all of their help they
have given. Also for their constant support, love and craziness that has helped her
through her time at university.
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Table of Contents
Cover Page………………………………………………………………………………………...………….....i
Declaration……………………………………………………………………………………..…………..…..ii
Abstract……………………………………………………………………………………………………..…..iii
Acknowledgements………………………………………………………………………..…………….….iv
Chapter 1: Introduction ................................................................................................ 11
1.0. Introduction ........................................................................................................... 12
1.1. Overview of Enterprise Project ......................................................................... 12
1.2. Background of business .................................................................................... 12
1.3. Background of the café industry ....................................................................... 13
1.4. Main Aim: ......................................................................................................... 13
1.5. Objectives of Enterprise: ................................................................................... 14
1.6. Project Structure ................................................................................................ 15
1.7. Summary ........................................................................................................... 15
Chapter 2: Literature Review ....................................................................................... 16
2.0. Literature review ................................................................................................... 17
2.1. Introduction ....................................................................................................... 17
2.2. Entrepreneurship ............................................................................................... 17
2.3. Young Entrepreneurs......................................................................................... 18
2.4. Female Entrepreneurs ........................................................................................ 18
2.5. Setting up a small business................................................................................ 19
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2.6. Finance for setting up a small business ............................................................. 20
2.7. Consultation with banks .................................................................................... 21
2.8. Hospitality industry ........................................................................................... 22
2.9. Trends in the Coffee shop culture ..................................................................... 23
2.10. Trends in food and drink ................................................................................. 25
2.11. Customer analysis ........................................................................................... 26
2.12. Developing a business plan ............................................................................. 27
2.13. Summary ......................................................................................................... 28
Chapter 3: Business Plan ............................................................................................. 29
3.0. Business Plan ........................................................................................................ 30
1.0. Executive Summary .......................................................................................... 31
1.1. Financial Highlights....................................................................................... 32
2.0. Company Information ....................................................................................... 33
3.0. Introduction ....................................................................................................... 34
3.1. Mission Statement ......................................................................................... 34
3.2. The Business Name ....................................................................................... 34
3.3. Current Shareholdings ................................................................................... 34
3.4. Business Structure ......................................................................................... 34
3.5. Key Personnel ................................................................................................ 36
3.6. Premises ......................................................................................................... 36
3.7. SWOT Analysis for “Hugamug” ................................................................... 37
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4.0. Business Objectives ........................................................................................... 39
4.1. Business Goals Years 1-3 .............................................................................. 41
5. Products and Services ........................................................................................... 44
5.1. Product Description ....................................................................................... 44
5.1.1. Food and Beverages ................................................................................ 44
5.1.2. Service..................................................................................................... 44
5.2. Unique Features ............................................................................................. 45
5.3. Production Methods ....................................................................................... 47
5.4. Health and Safety Issues ................................................................................ 47
5.5. Cost of Production ......................................................................................... 48
5.6. Suppliers ........................................................................................................ 48
5.7. Capacity ......................................................................................................... 49
5.8. Stock Holding Policy ..................................................................................... 50
5.9. Quality ........................................................................................................... 51
5.10. Environmental sustainability ....................................................................... 51
5.11. Ethical Considerations ................................................................................. 52
6. The Market ........................................................................................................... 53
6.1. Methodology .................................................................................................. 53
6.1.1. Secondary Data ....................................................................................... 53
6.1.2. Primary Data ........................................................................................... 54
6.1.3. Ethics Forms & Participant Consent Forms ............................................ 54
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6.2. Questionnaire Results .................................................................................... 58
6.3. Focus Group Results ...................................................................................... 69
6.4. Interview Results ........................................................................................... 75
6.5. Summary ........................................................................................................ 79
6.6. General Description ....................................................................................... 80
6.7. Market Trends ................................................................................................ 81
6.8. Competitor Analysis ...................................................................................... 83
6.8.1. Competitor Analysis Table ..................................................................... 83
6.8.2. Competitor SWOT Analysis ................................................................... 85
6.8.3. Competitive Advantage .......................................................................... 87
6.9. Marketing strategy ......................................................................................... 88
6.10. Pricing Strategy ........................................................................................... 96
6.11. Sales Volumes ............................................................................................. 96
7. Management and Personnel ................................................................................. 99
7.1. Organisation ................................................................................................... 99
7.2. Management Team ...................................................................................... 100
7.3. Work Force .................................................................................................. 100
7.4. Incentive Schemes ....................................................................................... 102
7.5. Recruitment.................................................................................................. 102
7.6. Equality ........................................................................................................ 102
7.7. Equal Opportunities ..................................................................................... 103
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7.8. Training and Development .......................................................................... 103
8. Future developments .......................................................................................... 105
8.1 Contingency Plan .......................................................................................... 107
9.0. Legal Obligations ............................................................................................ 111
10. Finance ............................................................................................................. 117
10.1. Contingent Liabilities ................................................................................ 117
10.2. Breakeven Analysis ................................................................................... 117
10.3. Current Funding Strategies ........................................................................ 118
10.4. Financial Forecasts .................................................................................... 118
10.4.1. Profit and Loss .................................................................................... 118
10.4.2. Cash Flow ........................................................................................... 118
10.4.3. Balance Sheet ...................................................................................... 119
10.5. Sensitivity Analysis ................................................................................... 128
Chapter 4: Discussion and Evaluation ....................................................................... 130
4.0. Analysis and Discussion.................................................................................. 131
4.1. Overview of project ..................................................................................... 131
4.2. Business Plan ............................................................................................... 131
4.3. Market Research .......................................................................................... 132
4.4. Secondary Research ..................................................................................... 133
4.5. Primary Research ......................................................................................... 133
4.6. Financial Performance ................................................................................. 134
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4.7. Summary ...................................................................................................... 135
Chapter 5: Conclusions and Recommendations......................................................... 136
5.0. Conclusions and Recommendations ................................................................ 137
5.1. Conclusion ................................................................................................... 137
5.2. Recommendations........................................................................................ 139
Appendices ................................................................................................................. 142
Appendix A: Suggested Names ................................................................................. 143
Appendix B: Business Structures ............................................................................... 143
Appendix C: Companies House Form ....................................................................... 145
Appendix D: Premises Information Sheet ................................................................. 146
Appendix E: Photos of Shop ...................................................................................... 148
Appendix F: Start-up Costs ........................................................................................ 151
Appendix G: Hugamug’s Menu ................................................................................. 155
Appendix H: Food, Drink & Ingredients stock list .................................................... 157
Appendix I: Policy Documents .................................................................................. 161
I.a) Health and Safety Policy.................................................................................. 161
I.b) Environment Policy ......................................................................................... 162
I.c) Equal Opportunities ......................................................................................... 163
Appendix J: List of Suppliers .................................................................................... 166
Appendix K: Floor Plans ........................................................................................... 167
Appendix L: Fridge Layout ....................................................................................... 168
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Appendix M: Ethics Form ......................................................................................... 169
Appendix N: Participant Information Sheet .............................................................. 176
Appendix O: Consent Forms ..................................................................................... 180
Appendix P: Questionnaire ........................................................................................ 182
Appendix Q: Questionnaire Data Summary Sheet .................................................... 187
Appendix R: Focus Group Transcripts ...................................................................... 190
Appendix S: Focus Group Advert.............................................................................. 203
Appendix T: Interview transcript ............................................................................... 204
Appendix U: Analysed Questionnaire Results........................................................... 207
Appendix V: Email with musician ............................................................................. 226
Appendix W: Social Media sites................................................................................ 227
Appendix X: Flyer and Loyalty Card ........................................................................ 229
Appendix Y: Website ................................................................................................. 230
Appendix Z: Advertising Costs.................................................................................. 230
Appendix Z. A: Ingredient/ Cost of Production List ................................................. 231
Appendix Z. B: Price List .......................................................................................... 245
Appendix Z. C: Insurance Quote ............................................................................... 246
Appendix Z. D: Job Contract ..................................................................................... 247
Appendix Z. E: Social Media Competitions .............................................................. 251
Appendix Z.F: Cost of production ............................................................................. 252
References…………………………………………………………………………..257
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List of Tables
Table 1: NatWest and Santander……………………………………………………21
Table 2: Financial Highlights……………………………………………………….32
Table 3: Business Structure………………………………………………………....34
Table 4: Employees…………………………………………………………………36
Table 5: SWOT Analysis for “Hugamug”… ……………………………………….37
Table 6: Business goals……………………………………………………………...40
Table 7: Business Goals Checklist…………………………………………………..41
Table 8: Methodology………………………………………………………………..55
Table 9: Gender….………………………………………………………………….58
Table 10: Age……………………………………………………………….…….…59
Table 11: Regularity of visits to existing Cafes……………………………………..60
Table 12: Suggestion of a new store………………………………………………...61
Table 13: Location of store………………………………………………………….62
Table 14: Products in demand….…………………………………………………...63
Table 15: Drink prices……………………………………………………………....64
Table 16: Food prices…………………………………………………………….....65
Table 17: Promotion………………………………………………………………...66
Table 18: Name….…………………………………………………………………..68
Table 19: Focus Group Analysis….………………………………………………...69
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Table 20: Interview Analysis….…………………………………………………….75
Table 21: Summary of Primary Research…………………………………………...78
Table 22: PESTLE Analysis….……………………………………………………..81
Table 23: Competitive Analysis…………………………………………………….84
Table 24: SWOT Analysis Pettigrew Tea Rooms…………………………………..85
Table 25: SWOT Analysis Selah Café and Tea Rooms…………………………….86
Table 26: SWOT Analysis Garlands Coffee………………………………………...87
Table 27: Marketing Methods….………………………………………………..…..90
Table 28: Amount of Food sold…………………………………………………......97
Table 29: Amount of Drinks sold…………………………………………………...98
Table 30: Personal Survival Statement…..………………………………….……..100
Table 31: Staff Wages……………………………………………………….……..101
Table 32: Developments for “Hugamug”… ……………………………………....105
Table 33: Contingency……………………………………………………………..107
Table 34: Legal Obligations……………………………………………………….111
Table 35: Breakeven Analysis……………………………………………………..117
Table 36: Sensitivity Analysis……………………………………………………..128
Table 37: Recommendations….…………………………………………………...140
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List of Figures
Figure 1: Internal and External Business Influences………………………………..20
Figure 2: Décor sourced for “Hugamug” ………………………………………..….46
Figure 3: The Market Research Process….………………………………………....53
Figure 4: Integrated Marketing Campaign…………………………………………..89
Figure 5: Cash Flow Year 1….…………………………………………………….120
Figure 6: Cash Flow Year 2………………………………………………………..121
Figure 7: Cash Flow Year 3.....………………………………………………….....122
Figure 8: Profit and Loss…………………………………………………....……...123
Figure 9: Balance Sheet for 2017…………………………………………………..124
Figure 10: Balance Sheet for 2018….……………………………………………...125
Figure 11: Balance Sheet for 2019………………………………………………....126
Figure 12: Ratio Calculations……………………………………………………....127
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Chapter 1: Introduction
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1.0. Introduction
The purpose of the enterprise is to evaluate the feasibility of setting up a unique café
in Cardiff which will provide a different but cosy café experience.
1.1. Overview of Enterprise Project
The function of this proposal is to look into the methods and actions required to
produce a business, to help eventually create the enterprise project. There will be
primary and secondary methods used to investigate the business’s feasibility.
The author chose to do the enterprise as she felt it would encourage her to expand on
her initial idea and help her find out if this is a possible career path that she will take
after her degree. The enterprise project enables the author to use knowledge gained
through her events management degree, including modules such as Marketing and
Finance.
The author has always had an interest in the hospitality industry working in the area
from 2013- present. The café sector, in particular, has always interested the author
with a lot of work experience being completed in a family run café. Working for the
business has given the author the chance to gain knowledge on the running and setting
up a café, also acquiring a team leader role. Consequently, this has bettered her
knowledge and will benefit her in the development of this proposal.
1.2. Background of business
“Hugamug” will be a café set up in Cardiff city centre, opening 6 days a week as this
is a realistic workload for the owner and the finances of the café. The author will
focus on finding a unique selling point (USP) to provide something different for
customers. This will also help compete against competition as Porter (2000) suggests,
differentiating helps to gain a competitive advantage over competitors. The café will
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look to provide something different through décor, products available and possible
entertainment.
1.3. Background of the café industry
The café industry is very successful accounting for sales of £1.5 billion in 2013
(Thomas, 2014). The specialist industry has also continued to grow by 6% even in the
most economically challenged parts of the UK (Thomas, 2014), suggesting the desire
and willingness to spend in cafes. Estimates also suggest that the reasons behind this
are to do with aspects such as female independence and spending power (Thomas,
2014), which suits the cafes target market. Therefore, if the café has the right products
and services it has the potential to acquire some of this industry’s spending.
To coincide with this the top ten coffee shops, as voted by consumers, in the cafés
location of Cardiff, are all currently independent coffee shops (Scott, 2015). This
suggests that independent coffee shops in Cardiff are most popular with consumers.
Therefore, “Hugamug” has the chance to gain some of the market.
1.4. Main Aim:
An aim is a general statement of what is to be achieved overall and objectives are
practical goals which will be achieved through a series of steps in the fulfilment of an
aim. Johns and Lee-Ross (2004) also stated that both must be clear and defined.
The main aim of this project will be to explore the feasibility of setting up a unique
café in Cardiff which will provide a different but cosy café experience for a wide
range audience. This aim will be accomplished by setting achievable objectives and
using extensive primary and secondary research.
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1.5. Objectives of Enterprise:
1. To conduct a comprehensive literature review looking at different aspects
such as entrepreneurship, setting up a small business, finance for setting up a
small business, trends in the coffee shop culture, coffee shops in Cardiff,
alternative business models, customer analysis and developing a business plan.
The literature review will be used to identify the challenges and requirements
that will occur when setting up a small business.
2. To analyse the space available in the market for a new café in Cardiff by using
market research. To also establish competition and the extent and scope of the
existing cafés specifically in Cardiff. Primary research used will be
questionnaires, focus groups, and an interview.
3. To identify financial resources and legal requirements to establish the café.
This will be done by breaking down the financial requirements of the business
overall determining the feasibility of the project.
4. To develop a detailed business plan and look at the revenue needed in order to
evaluate the feasibility of setting up the café. This business plan will be used
when explaining the idea to investors.
5. To finally conclude and make recommendations on improvements that could
be made to the business plan. This will solve any issues to help maintain the
business’s position in the face of growing competition.
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1.6. Project Structure
This project will be structured to ensure the aims and objectives are thoroughly met.
Chapter one has covered the business and industry background as well as discussing
the aims and objectives. Chapter two will review the literature relevant to the
business. Chapter three will cover the aspects involved with setting up a business in
the form of a business plan and market research. Chapter four will analyse the
strengths and weaknesses of the project. Finally, chapter five will conclude the
proposal, giving recommendations and evaluating the feasibility of the project.
1.7. Summary
This chapter has given an overview of the research project including an introduction,
the purpose of the project and an outline of the business and background of the café
industry, briefly suggesting the feasibility of setting up a unique café in Cardiff. The
main aim has also been stated including the objectives that will help meet this aim.
The author has faith in the business idea and will now carry out more research through
a literature review.
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Chapter 2: Literature Review
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2.0. Literature review
2.1. Introduction
“Any research project will necessitate reading what has been written on the subject
and gathering it together in a critical review which demonstrates some awareness of
the current state of knowledge on the subject” (Gill et al, 2010, p30). A literature
review is seen as a way of developing a basis for the significance of the research and
importantly where it will lead (Gill et al, 2010). This literature review will include
subjects that are relevant to the business idea such as; Young entrepreneurs, female
entrepreneurs, setting up a small business, finance for setting up a small business,
consultation with banks, hospitality industry, trends in the Coffee shop culture, trends
in food and drink, coffee shops in Cardiff, alternative business models, customer
analysis, developing a business plan and finally a summary.
Secondary research is the analysis of information collected for a purpose other than
that of the researcher (Finn et al, 2000). It is a necessary first step in any research
design and informs an important part of the literature review stage (Finn et al, 2000).
As Finn et al (2000) say, it saves a lot of time, effort, and money to use secondary
data in comparison to primary data and should not be seen as inferior to other research
methods but instead a good way to give clarity to the research questions.
2.2. Entrepreneurship
To be an entrepreneur it is important to have the need to achieve, desire for feedback,
desire to plan, desire to set goals and finally to have a strong personal initiative
(Miner, 1996), all things the author needs to take into account when choosing to do an
enterprise project. However, as Cuervo et al (2007) says an entrepreneur is someone
who also takes risks to set up and make a profit from their business. However, it is
important to know that the greater the risk does not mean the greater reward (Keith,
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2014). "There is a need for more entrepreneurs with the creation of a country’s
wealth and dynamism depending upon the competitiveness of its firms and this, in
turn, relies fundamentally on the capabilities of its entrepreneurs and managers"
(Keith, 2014, p1).
There is a difference in the method or process between entrepreneur and a small
business owner. Small business owners would want their businesses to be the way
they are; small and geographically bound only making a few million in their entire life
span (Keith, 2014).
2.3. Young Entrepreneurs
Being a young entrepreneur can be a worrying concept due to aspects such as less
experience. However to be successful you need to have passion and persistence states
Keith (2014), both of which young entrepreneurs have a lot of. This will help the
author through her development of the enterprise project.
2.4. Female Entrepreneurs
Female entrepreneurs are seen as an aspect of growth with 15% of businesses female
owned and males owning 51% (isbe, 2014). Families and women in particular use
coffee shops for social gatherings (Thomas, 2014) and therefore, a female
entrepreneur will have the advantage on how the business should be presented to
attract customers due to having similar views and tastes.
Fear of failure has also risen to a new record level of 48.0% among females in the
early stages of entrepreneurship (isbe, 2014). Therefore, it is important to keep in
mind many of the support sites available for female entrepreneurs such as 'The
Female Entrepreneur Association', from which entrepreneurs can benefit by receiving
advice given in the early stages of setting up their new business idea. The Prince’s
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Trust is also another organisations there to help female entrepreneurs by equipping
them with training and tools needed to start a business. They also offer loans through
Start Up Loans Company which will be discussed further on (Prince’s Trust, 2015).
2.5. Setting up a small business
There has been a record annual increase of 330,000 businesses set up, up 6.7%, since
the start of 2013 (The Department for Business and Innovation, 2014). Promising
trends are evident across the main areas of expansion and investment (Groom, 2013).
Employment has also increased since 2013 (Groom, 2013).
According to Groom (2013) companies are also finding it easier to access finance,
making it easier for the author to set up the café. However, with finance being easier
to access and optimism increasing (Groom, 2013), this will give the author more
competition.
The number of businesses in the UK has reached a record high with small and
medium sized companies making up 99.3% of the total (Enterprisenation, 2015). This
suggests, that if organised correctly, a small enterprise such as the one in question can
become a success.
When setting up a business it is crucial to know the different aspects that can
influence a small business. Therefore, here is a graph on the different internal and
external influences;
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Figure 1: Internal and External Business Influences
Internal External
Factors Factors
Customers
Owners
Shareholders The Community
Suppliers
Managers
The Business Government

Employees
Banks
(Bitesize, B, 2015)
2.6. Finance for setting up a small business
Prince’s Trust is a source of funding that the author can use when setting up the
business. They are a partner of Start Up Loans who offer the chance to apply for low-
interest loans (Prince’s Trust, 2015). Prime Minister David Cameron has recently
announced that additional funding of £34m has been allocated to The Start Up Loans
Company (Start up Loans, 2015). The new funds will allow Start Up Loans to go
further in helping set up small businesses like the café. Start Up Loans also offer 15
hours of free mentoring across 12 months (Start up Loans, 2015). As well as a mentor,
they also offer exclusive business offers to help reduce the cost of running a business.
This shows the growing support for entrepreneurs and their small businesses, making
the café feasible with support available.
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The Conservative government now in power have also pledged to increase the number
of start-ups of small businesses to 600,000 a year by 2020, also mentioning the chance
of cutting unnecessary regulations and paperwork, otherwise known as red tape (Card,
2015). This is good for an individual setting up a business as this would save costs,
time and prevents the need to employ people to do these jobs for them.
2.7. Consultation with banks
“Researching into the finance of setting up a business is a very important aspect as if
the finance isn’t correct it would be impossible for the business to run” (Williams,
2014, p347).
Research has been conducted into two different banks to help make a decisions on
which company to open an account with and possibly borrow a loan from. This
proposal will be shown to a bank to help the author gain approval of finances for the
business.
Table 1: NatWest and Santander
NatWest Santander
NatWest was the first bank to be researched Santander was another bank researched
into. The findings showed that their small into. The findings showed that they
business loan allows you to borrow up to a have an enterprise portal that has been
maximum of £25,000 and a minimum of designed to support entrepreneurs and
£1,000 at a fixed rate. They allow their small business communities to start up.
customers to pay back in terms best suited to The portal aims to support young
them with between a one and ten year return entrepreneurs giving the chance to win
at a fixed interest rate of 7.71%. The business £1,500 towards their business through
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loan has no arrangement fee and also no pitching their idea. This could be
security fee which is beneficial to the author. beneficial when thinking of financing
Their team of Business or Relationship the café.
Managers are also available to offer support

They offer a fixed rate loan from £1,000
when setting up a business.
up to £25,000 that can be repaid
They offer another competitive service called between 12-60 months. They charge a
the Entrepreneurial Spark team. They are one off £100 business loan arrangement
there to help set and meet the client’s goals, to fee and their interest rates are between
provide access to regular networking and 7.9% to 12.9% per annum.
educational events, including workshops in

(Santander, 2015)
PR, employment, and investment and to
provide pitch training.
(NatWest, 2015)
From looking at the above charts and comparing the two banks NatWest has been
chosen as the bank that will provide the finances for the café. This is due to familiarity
with the bank, the no fee set up of the bank account and the support they can give
while setting up the business.
2.8. Hospitality industry
The hospitality industry covers the provision of accommodation, meals and drinks in
venues outside of the home (Oxford Economics, 2015). Eating out has been a social
activity around for a long time. However, UK diners these days are spending a lot of
money on eating out in independent restaurants with an average of £44 per person
each month being spent in local independent restaurants (Garrahan, 2015). 49% of
22
people also claim that independent restaurants are their favourite place to eat
(Garrahan, 2015). This suggests that independent hospitality businesses are currently
on the rise, therefore, if the café has the correct products and services it could benefit
from this trend. However, feedback from the market suggests that consumers are still
being cautious of spending (Garrahan, 2015), demonstrating the need for operators to
keep their prices competitive. Promotional meals, such as two meals for £10 instead
of £6.50 each, are also down year on year by a total 27% (Garrahan, 2015), suggesting
the need to be innovative when trying to promote meals.
The European Union Food Information council have developed a leaflet to advise
small and medium enterprises on compliance with the Food Information Regulation
which came into force on December 14th, 2014 (British Hospitality Association,
2014). The British Hospitality Association Food Experts Group have also developed a
section on food allergies in the Industry guide to good hygiene practice (British
Hospitality Association, 2014). This is beneficial when setting up a business as this
will be very important to comply with in order to successfully set up a café.
2.9. Trends in the Coffee shop culture
More people are using cafés or coffee shops in 2015 than in 2014 (Mintel, 2015).
Coffee shop usage is already on the rise, particularly in the eat-in sector (Mintel,
2015). Despite 15 years of rapid expansion, analysts say Britain's coffee shop sector
remains one of the most successful in the UK economy and will continue to expand,
accounting for sales of £1.5 billion in 2013 (Thomas, 2014). The specialist industry
continued to grow by 6% even in the most economically challenged parts of the UK
(Thomas, 2014) and even during the recession people were still wanting to visit coffee
shops, showing the strength of the café industry.
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As earlier mentioned, families, and women, in particular, use coffee shops for social
gatherings and female independence and spending power is on the rise (Thomas,
2014). With this in mind, it is important for the business to provide a welcoming
atmosphere.
In recent years, there has been a growing interest in the source and quality of coffee
due to consumer demand for corporate ethics and social responsibility (Porter, 2013).
Fairtrade was set up to ensure coffee farmers receive a fair and stable price for their
coffee that covers their costs of production (Fairtrade Foundation, 2015) and
customers nowadays are looking for Fairtrade and organic products (Porter, 2013).
Therefore, if the business sources its products from Fairtrade sources it will have a
better chance of gaining more customers and consequently more market share.
Ethics are becoming ever more ingrained into food and drink operators. Consumers
expect good ethical practices from businesses and to know where their money is
going (Ford, 2015). Therefore, Fairtrade shouldn’t be the only aspect looked at when
aiming to be a fair trading business. At least 71% of consumers have bought a free
range product in comparison to 60% of consumers who have bought a Fairtrade
product (Ford, 2015). Therefore, it will be important to consider sourcing the
ingredients of the food sold at the café to be free range. This should also be marketed
as part of the businesses strategy to show consumers that the café is acting ethically in
terms of providing free range products to attract customers. It will also add to the
aspect of being a unique café. To support this point 52% of consumers would stop
buying from a company acting unethically (Ford, 2015), showing the importance of
the practices mentioned above in order to attract and retain customers, and to support
the strength of this culture.
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Another trend in the coffee shop culture and any hospitality business is the amount of
food waste created. Waste and Resources Action Programme's report (WRAP) into
food waste in the hospitality sector valued the cost of food waste to the hospitality
industry at £2.5 billion (British Hospitality Association, 2014). This is consequently
responsible for 7% of all global greenhouse gas emissions (GHGs) per year (Wrap,
2015). Therefore, efforts to reduce waste will be well worthwhile.
After looking at the current trends in the coffee shop culture it is clear to see that
certain ethical aspects are very important to consumers nowadays. Therefore, it is
important for the business to consider these trends to look good in customers’ eyes
and create positive word of mouth.
2.10. Trends in food and drink
“More people have had a meal in a restaurant than have ordered a takeaway despite
the latter often being a cheaper option” (Mintel, 2015). This suggests that consumers
have the want and need to leave their homes to consume food, not just for the eating
and drinking experience, but also the social experience. Therefore, this shows that the
café has the ability to acquire a considerable audience. The percentage of diners who
say they’ve dined out once a week has risen from 14% in April 2013 to 21% in April
2015, driven by spur of the moment dining out of the home in the UK (Mintel, 2015).
The increasing percentage of people dining out shows a good time for the author to set
up a café as people are interested in and want to go out to eat. Casual dining will also
be what the café provides which is beneficial as this is a factor influencing why
people eat out. This is positive for the author’s business idea as this suggests that
consumers are fairly relaxed with regards to this kind of spending.
25
More consumers are spending quality time in coffee shops. Breakfast rushes and
lunch breaks are becoming better opportunities to offer a strong selection of freshly-
made healthy bites, made in-house or supplied from local bakeries (Theodore, 2015).
Food menu expansion has been a key trend in terms of innovation in the coffee shop
market (Childe, 2014) which should be taken into consideration when trying to win
some of the lunch time menu consumers, for example, offering sandwich fillings
different to its competitors.
Whilst only 7% of adults say that they don’t drink tea/ coffee, around a fifth say they
don’t drink them out of home (Childe, 2014), representing a significant opportunity
for the authors business to help grow the market. However, those aged 16-18 are the
most likely not to drink hot drinks at all (Childe, 2014). This suggests that when
setting up the business there should also be a wide range of cold drinks in order to
strengthen its appeal amongst these consumers.
Another factor to keep in mind when setting up the business is the wish for mobile
loyalty cards in this current day with 13% having used them and 41% wanting too
(Childe, 2014).
2.11. Customer analysis
Families, and women, in particular use coffee shops for social gatherings (Thomas,
2014) and with women now having a greater spending power than in the past a good
target market for the café are women.
The economy across the UK has been improving; in 2012 the highest growth in Gross
Disposable Household Income (GDHI) per head was in the North East at 4.0%,
followed by Wales at 3.8% (Office for National Statistics, 2014). Even with the bad
26
economy people were still spending money in cafes and now with the improvement in
gross disposable income, they may be willing to spend more.
As earlier mentioned 16-18 year olds are the most likely not to drink hot drinks at all
(Childe, 2014), 40% of people aged 18-to-24 drinking coffee daily while 54% of
people aged 25-to-39 indulge in a daily cup (Wagner, 2015). This is something to take
into consideration for the target market.
The café will aim to sell its products to all types of customers. However, from the
research so far found, a suggested market would be women and families aged 18- 39.
This is also a good target market for Cardiff as there are approximately 7,000 more
females in Cardiff than men, and women aged 20-24 are the largest population in
Cardiff, with women aged 24-29 being second and women aged 30-34 being third
(Cardiff Research Centre, 2013).
2.12. Developing a business plan
A mission statement defines the fundamental and unique purpose of a business and
identifies its products or services, as well as its customers (Antonites et al, 2007).
Stokes and Wilson (2002) defines a business plan as assessing the feasibility and
viability of the business or project and to recommend making any mistakes on paper,
hypothetically testing for feasibility before trying the real thing.
A business plan also looks at how much money is needed in order to set the business
up (Stokes and Wilson, 2002).
Preparing a business plan will be a good tool for understanding the planning process
of putting the business together, ensuring all aspects are covered and looking at the
long-term health of the business (Robbins, 2015).
27
2.13. Summary
After looking at the following relevant literature it has been suggested that opening a
café is a feasible idea and the author has been able to make some important decisions
for the business. Firstly found was that being a young female entrepreneur will bring
many benefits to help the author on her way to success; being determined and
enthusiastic. Small businesses are also becoming very successful and a NatWest will
be the bank used for the business. When looking at the café culture it was found that,
despite the economic downturns, Britain's coffee shop sector remains one of the most
successful in the UK economy accounting for £1.5 billion sales, showing the author
the demand for coffee shops and willingness of consumers to spend in this sector.
Sourcing from Fairtrade and free range products has also been looked at and due to
the demand that was shown this will be researched further in the primary research.
Lastly, the main target market for business has been analysed and a market of women
aged 18+ has been suggested for the café. The primary research which will be carried
out next will help cover parts the literature review didn’t and provide support on
research found.
28
Chapter 3: Business Plan
29
3.0. Business Plan
Chapter three will now look at the business planning and structure. A business plan is
an entrepreneur’s most crucial business document (Abrams, 2003). The ultimate
purpose of developing a business plan is to have a successful business and no
company can expect to articulate its goals or to secure finance without a well-
conceived and well-presented business plan (Abrams, 2003).
Abrams (2003) states that a business plan should include;
 The Executive Summary
 Company Description
 Industry Analysis & Trends
 Target Market
 Competition
 Risk Assessment
 Marketing Plan
 Legal Issues
 The Financials &
 The Plan’s Appendix (Abrams, 2003, pxviii)
This will be taken into consideration by the author when creating her business plan.
30
1.0. Executive Summary
The reason behind this business plan is to show the feasibility of a unique café
opening in Cardiff City Centre. This will be completed by providing both primary and
secondary research to support any information found in the literature review and
financial documents forecasted for the first 3 years of the business running.
“Hugamug” is a café designed to provide food and drink at a good price in a cosy and
relaxing environment. It aims to create a unique atmosphere through its décor and
provide an experience providing board games and books for customers to use. An
acoustic performer will also play at the café on Mondays. The café will be situated in
Cardiff city centre and will be open 6 days a week Monday 10:00-18:00, Wednesday-
Saturday 10:00-18:00, Sunday 10:00-17:00. Research has shown that the café industry
has continued to grow by 6% even in the most economically challenged parts of the
UK (Thomas, 2014). After this research combined with the opinions found in the
focus groups and questionnaire results, it has been confirmed the business is a feasible
one. However, measures will have to be taken to keep a competitive advantage in the
growing market.
“Hugamug’s” target market primarily will be those who love cafes. However,
research has showed that this is often woman and families aged 18-34. “Hugamug”
will advertise itself to these customers through social media; Twitter, Instagram, and
Facebook prior to the café opening. Flyers and posters will be placed around the city
centre and surrounding areas, to create awareness and word of mouth. There will also
be a website set up and the business will be registered with Trip Advisor to monitor
and respond to any positive or negative feedback. The author decided to do a launch
event on a Saturday because the weekends are the busiest days, as found from the
31
competitor interview. There will be an acoustic musician at the cafe and free samples
of cakes and drinks will be handed out around the city centre with a flyer and voucher.
Staff in the café will also offer free tasters to customers and give them a discount for
their next visit with a loyalty card.
Financial documents have been produced for the café, showing the profitability of the
business. The café will break even in the second year of trading. The finance for the
business will be provided by a family member who has agreed to provide an interest-
free loan of £12,000 and personal savings of £8,000.
1.1. Financial Highlights
Table 2
Year 1 Year 2 Year 3
Total Employees 3 3 4
Turnover £86,363 £103,635 £124,362
Profit (Loss) pre - tax £65,439 £78,527 £94,232
Total gross sales £ 123,635 £124,362 £149,234
receipts
From cashflow
Net cash balance £ -9,460 £3,375 £9,955
32
2.0. Company Information
Business Name: Hugamug
Contact Name: Rebecca Howells
Business Address:
35 Morgan Arcade,
Cardiff City Centre,
CF10 1AF
Business Telephone Number: To be confirmed.
Personal Telephone Number: 07787404028
Email Address: Hugamugcafe@outlook.co.uk
Website Address: www.hugamugcafe.weebly.com
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3.0. Introduction
3.1. Mission Statement
“Hugamug hopes to be the best unique independent café in Cardiff City Centre,
priding itself on providing a warm, cosy, welcoming experience for our customers
while our staff cater for their every need, serving our homemade, free range food and
drinks at a good price”
3.2. The Business Name
“Hugamug” is the business’s chosen name. The name for the café needed to give a
sense of friendliness and a cosy feel to welcome customers into the café. It also
needed to be different to other café names to stand out. “Hugamug” as a name aims to
appeal to the target market and attract potential customers. The name of the café was
chosen from four other names due to the results of the primary research carried out.
(Appendix A shows the other names considered).
3.3. Current Shareholdings
The café will be a limited company, the founder, Rebecca Howells, will have 100% of
the business shares.
3.4. Business Structure
Table 3
Limited “Hugamug” will be a Limited company as this ensures that if the
Company business fails the personal assets that have not been invested into
the business cannot be taken, due to its limited liability (Reuting,
2014). Setting up a limited company will not be expensive and will
allow shares to be put into the business (Gov, 2016). The author can
34
allocate these shares to any number of people including herself or
sell them for equity (Hoskin, 2014). However being a limited
company will mean there will be obligations and laws to meet and
consequently more paperwork (Bytestart, 2016). The author will
also be responsible for annual accounts being filed at Companies
House and an annual corporation tax return (Hoskin, 2014) which,
therefore, in the future may be more costly if an accountant is hired
to do the job. However, limited company directors have the
potential to pay less tax, as they can pay themselves small salaries
and high dividends which are free from National Insurance
(Bytestart, 2016).
The author also looked at other business structures for “Hugamug”
such as a sole trader and a partnership. These were researched into
and can be found in Appendix B. However a limited liability
structure was chosen by the author to be the most beneficial due to
its limited liability.
“Hugamug” will be registered with the Companies House. This will
be completed by filling out a form and then paying a £40 processing
fee. A letter will then be sent to confirm the start-up of “Hugamug”.
To ensure the businesses name is not already being used a name
check has been run using the Companies House website (Attached
in appendix C).
35
3.5. Key Personnel
Rebecca Howells: Manager/ owner
Table 4: Employees
Job Title Contract Amount
Owner/ Manager Full-Time 1
Chef Full-Time 1
Café assistant Part-Time 2
3.6. Premises
An empty shop has been found in Morgan Arcade in Cardiff city centre available for
lease from January 2017. The shop will be opened a month after this to give time for
fittings and renovations and to ensure the lease is not wasted. (The premises
information sheet is provided in Appendix D). The shop premises is surrounded by
shops such as Urban Outfitters, Joules and has three floors. The basement which is
257 square foot will be used for kitchen, cooking and storage. The ground floor which
is 268 square foot will be for café seating and the till. The upstairs, which is 241
square foot, will be more seating and a toilet, which is already installed, saving the
owner money. Fire alarms and burglar alarms are also already installed saving the
owner more money. There is also a covered area outside to provide a small amount of
seating. The premises is wheelchair accessible. Pictures given by the owner of the
shop as it currently stands can be found in appendix E.
There will need to be a renovation of the shop to make it suitable for café use and also
compliment the themes the owner wants in the café. Such themes include décor which
creates a relaxing atmosphere, providing a different experience through the use of
36
board games, serving drinks in different mugs and glasses. (The items purchased to fit
the shop such as coffee machines, fridges, cooking and serving supplies, lights, mugs,
cleaning supplies and so on are attached as appendix F).
3.7. SWOT Analysis for “Hugamug”
A SWOT is a compacted analysis of the strengths, weaknesses, opportunities and
threats of a business (Bohm, 2008). It offers a combination of these results by
delivering helpful information to see the firm’s resources and capacities against the
background of the competitive environment in which it operates (Bohm, 2008). The
strengths and weaknesses will look internally at the business where as opportunities
and threats look externally at the business.
Table 5: SWOT
Strengths Weaknesses
 New and young entrepreneur  A small amount of
 Experience in the café industry entrepreneurial experience so far
 Experience of leading  No managerial experience
employees  No established reputation
 High standards of customer  Development will take time
service
 Experience in training staff in
the café business
 Knows how to work a café
 Different experience for
customers
37
 A healthy capital to set up
business
 Will use free range products to
make meals
Opportunities Threats
 Cafes are on the rise in  Lots of similar competition in
popularity Cardiff
 Potential customers are willing  More competitors could arrive
to spend good money in cafes  Drive thru coffee becoming
 Building good relationships more popular
with suppliers through
supporting small business
 Wide choice of suppliers
 Good location for café
 Opportunity to expand e.g. open
more cafes in other cities if
successful
As shown in the SWOT analysis it can be seen that there are more opportunities and
strengths to the business idea. The SWOT analysis will allow the managing director to
convert Weaknesses to strengths and threats to opportunities. This will give the
business a higher chance of success.
38
4.0. Business Objectives
Kasunic (2009) states, there is nothing more important in your planning process than
setting the right objectives. It is a process that enables management to plan for,
implement and attain objectives to achieve goals and give an organisation a path over
a defined period of time (Kasunic, 2009).
In order to minimise misinterpretations, vague assumptions and make the objectives
most effective they will meet the following criteria of SMART objectives:
S- Specific -
M- Measurable
A- Achievable
R- Realistic
T- Time specific
(Richman, 2006)
This will help the author create specific, realistic objectives that can be easily
measured through completion. The objectives will be further evaluated once
completed in order to see if there are any improvements that can be made to future
objectives.
39
Table 6: Business goals
Type of Aim Time Frame Activity
Short Term Aim Currently until April To complete feasibility
2017 study for the opening of
Café in Cardiff and open
the café
Mid Term Aim Year 2&3 Assuming in year 1 the
company has met its
trading expectations the
owner will look to
expand its menu and
source Fairtrade
products
Long Term Aim 3 Years+ The long term aim of the
business will be to look
into hiring out the top
floor of the café for craft
days, expand its opening
days to 7 days a week
and eventually open a
second café in Bristol.
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4.1. Business Goals Years 1-3
Table 7: Business Goals Checklist
Objectives Time Scale
Year One:
Complete business plan 8 months before opening
Apply for insurance and License 2 months before opening
requirements
Set up business account and credit card
facilities
Set up contacts with suppliers
Employ members of staff
Set up Facebook, Twitter and Instagram
accounts
Purchase products for the café
Produce marketing materials; Posters,
Flyers and loyalty cards
Start lease with property 1 month before opening
Furnish and decorate shop
Promote opening
Prepare for launch event
41
Successfully open café and hold launch January 2017
event
Gain 30 regular customers June 2017
Gain 500 followers on Facebook,
Twitter and Instagram
Achieve year 1’s estimate turnover December 2017
Year Two:
Meet estimated sales increase of 20% January 2018
Increase regular customers by 20%
Maintain advertising
Breakeven
Double social media followers May 2018
Look into sourcing Fairtrade products
Look into expanding menu- summer
smoothies, paninis
Achieve year 2’s estimated turnover December 2018
Year Three:
Meet estimated sales increase of 20% January 2019
Maintain advertising
42
Maintain relationship with suppliers
Increase social media followers by 750 May 2019
Achieve year 3’s estimated turnover December 2019
43
5. Products and Services
5.1. Product Description
5.1.1. Food and Beverages
“Hugamug” will be selling a large variety of food, drink and cakes because as found
in the literature review, food menu expansion has been a key trend in terms of
innovation in the coffee shop market (Childe, 2014). (A menu can be found in
appendix G). Research also found breakfast and lunch breaks are good opportunities
for freshly made healthy bites, made in-house or supplied from local bakeries
(Theodore, 2015). “Hugamug” will be making homemade cakes, fresh drinks and
homemade sandwiches using locally sourced bread, fitting this theme. All ingredients
that “Hugamug” will use to make food sold at the café will be free range. This is
because the primary research showed the author that this was important to people.
Drinks provided at the café will also not just be hot drinks because those aged 16-18
are the most likely not to drink hot drinks at all (Childe, 2014). Although this is not
the cafés target audience it is important to offer a wide variety and therefore, drinks
such as cans of coke, milkshakes and fruit juice will be available.
5.1.2. Service
“Hugamug” will function as an eat in and take away café. Customers will be able to
take out hot drinks, cold drinks and sandwiches when requested at the till, however,
not hot food. There will be a counter service; customers will order at the counter,
giving their table number and then a member of staff will bring the food and drink to
their table.
The atmosphere of the café will be cosy, relaxed and friendly. Customers should feel
welcomed by staff and feel comfortable to ask any questions and stay in the café for
44
as long as they want. Employees will be trained to ensure customers feel this way
within the café. This will include aspects such as good eye contact with customers,
being polite at all times and aware of customers around them. They will also be
trained to deal with complaints in order to reduce any negative experiences for
customers. Employees will listen to the complaint, show compassion and try resolve
the issue and if that’s not possible offer a discount or free drink within reason.
5.2. Unique Features
“Hugamug” is different to its competitors in the area, such as Pettigrew Tea rooms,
because of its homemade sandwiches and cakes, décor and entertainment in the café.
The décor aims to be cosy and homely and, therefore, the author has decided to buy
fairy lights, blankets, an electric fireplace and use low lighting in the café to get this
effect. The café also aims to be different to other cafes using charity shops,
independent stores and EBay to source mugs, teapots, tables and pillows and
providing cold drinks in the authors recycled jars. (Photos shown on the next page). It
will also provide board games such as frustration, monopoly, articulate and books for
entertainment which no other café in the area does. On Mondays an acoustic guitar
singer will come to the café from 12-5pm playing songs in the background to bring a
relaxed atmosphere. “Hugamug” will also pride itself on providing free range food
and locally sourced bread and baguettes. This is apparent in the café’s marketing
materials and will be advertised through social media.
45
Figure 2: Décor sourced for “Hugamug”
46
5.3. Production Methods
All food will be freshly made in the shop. The manager will bake the cakes in the two
hours before the café opens each morning and the chef will make the sandwich
fillings from scratch in the hour before the café opens each morning, to ensure all
fillings and cakes are fresh. The amount of stock used will vary each day and,
therefore, the fillings and cakes will be stored in air tight containers in fridges to keep
till the next day. How much the chef and manager make each morning will depend on
the stock left over from the night before. All of the breakfasts will be made as ordered
by the chef and the drinks will also be made as ordered by one of the café assistants.
All ingredients needed for making the products on the menu are found in the stock list
in appendix H and all recipes/ cost of production can be found in appendix Z.A.
5.4. Health and Safety Issues
Within the food and drink industry there are many different health and safety issues.
“Hugamug” will ensure that is adheres to the Health and Safety work act 1974. The
manager already has a certificate in Food Safety and Hygiene gained at university.
However, all employees working within the business will also need to be trained in
this area as well and follow the health and safety policy (found in appendix I.a). The
chef will be hired on the basis that they have the relevant health and safety
qualifications.
Health and Safety regulations will also be followed in relation to food. Raw meat will
be used in the café and, therefore, cleaning and storage procedures must be followed
to ensure there is no cross contamination. Coloured chopping boards have been
bought for the café to help with this. Raw meat must also be kept at the correct
temperature and stored below dairy products, cooked meats and salad in a refrigerator
with a temperature of 40oF or below (Food Standards Agency, 2016). Dates of
47
opening will be written on all products alongside the use by date. (A fridge layout to
reduce the chance of cross contamination can be found in appendix L).
Some of the meats sold at the café will be frozen in order to preserve it longer and
will be kept frozen for no longer than 3 months. Meat that is going to be defrosted
will be thawed in the refrigerator, cold water or microwaved and cooked immediately
(Food Standards Agency, 2016).
5.5. Cost of Production
Most of the supplies used to produce the meals and drinks on sale in “Hugamug” are
of a low price. “Hugamug” will need to pay VAT on products sold which will later be
claimed back.
The cost of producing each drink and meal has been calculated based on the package
cost and number of portions it provides. For example one tea bag out of a packet of
2400 tea bags costs £0.01 (The cost of production of each meal and drink can be
found in appendix Z.A). With each meal and drink being cheap to produce the owner
has a chance to pick competitive prices. However, it is important that the profit also
covers all costs including cost of labour. A good amount of gross profit has been
made shown in the table in appendix Z.F which should therefore, also cover running
costs.
5.6. Suppliers
“Hugamug’s” main stock supplier will be Bidvest which the owner will have to
register with (Bidvest, 2016). However, some items not available at Bidvest will be
bought from the café’s local Tesco. As “Hugamug” also prides itself on providing free
range products and fresh locally sourced bread it will supply its meat from Welsh
48
Food box and its bread from Brutons the Bakers, a bakery local to the café in Cardiff
(A list of suppliers can be found in appendix J).
Stock will be bought as and when needed, aiming to stock the café with fresh food
weekly and dry store products every two months, keeping in mind meat can be frozen.
As found out from the interview conducted this is the most cost efficient way to stock
a café and reduces waste. The shop owner will keep up to date with this by doing
weekly stock checks to ensure the café purchases the stock it needs in time. Bidvest
and Welsh Food box will deliver its products to the café and therefore the owner will
keep in mind that the stock will arrive in two days when doing stock checks. Bidvest
do not charge for delivery, however, Welsh Food box charge £2.50 which will be
considered in the stock in the financial forecasts. For the other suppliers the owner
will travel to the shops to pick up the stock. Brutons the Bakers is open Monday-
Friday 8:30-15:45, Saturdays 8:30-12:00 and Sundays 12:00-2.45pm (Brutons the
Bakers, 2016). The Tesco local to the café is open Monday-Sunday 6:00- 23:00.
The owner has decided to choose these suppliers for “Hugamug” through familiarity
and trust. The suppliers also fit “Hugamug’s” policies with Welsh Food box providing
the café with local free range products and Brutons the Bakers providing the café with
locally sourced bread. Therefore, the owner feels choosing these suppliers will benefit
the café and its unique features.
5.7. Capacity
The premises “Hugamug” is a fair size being 268 square foot on the ground floor,
241square foot on the first floor and 257square foot in the basement. This is
approximately 16ft in width and 16ft in length. From this measurement the author has
decided 4 tables, 2 small sofas, 2 small benches, 8 single chairs, will be in the same
49
layout on the ground and first floor (Floor plans can be found in appendix K). The till
will be on the ground floor and the toilet will be immediately above on the first floor.
There will also be two x two seater tables outside the café. Overall this will seat a
maximum 40 people in the café, giving it space and ensuring it isn’t cramped, as this
was found to be a weakness in “Hugamug’s” competitors. The author feels this will
be a sufficient amount of space for “Hugamug” as the primary research showed that
people like cosy cafes and therefore the size of the café can be used to its advantage.
5.8. Stock Holding Policy
The raw materials to produce the meals and drinks in “Hugamug” are a mixture of
fridge products and dry store. Most of the dry store products will last for months and
will definitely be used before the use by date is reached. Dry products that have a
shorter sell by date such as bread will be sourced regularly and the amount can be
altered depending on the demand. The fridge products such as milk, mushrooms,
tomatoes, eggs, lettuce, cucumber and lemons will not last as long. However, they
will be sourced regularly and as needed. Therefore, the author estimates there will be
very little waste from these products. The rest of the products used in the café have a
long use by date or will be frozen and, therefore, will not be wasted. All of the meat
products used in the café are also able to be frozen for up to 3 months. The sandwich
mixtures will, as earlier mentioned, be made on the day depending on the amount left
from the day before and the same for the cakes being held in air tight containers in the
correct temperatures. Therefore the wastage of materials is going to be very low. The
cakes being sold will be kept in the refrigerator for up to 4 days (Eat by Date, 2016).
This may cause some waste but the author estimates not a large amount.
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5.9. Quality
It is key “Hugamug” to provide high quality products to its customers. This will be
ensured firstly by making all cakes and sandwich fillings freshly. The chef will then
take note of when the products where first opened to ensure they stay fresh. The chef
has permission from the owner to throw any products away which they feel is not a
high enough quality. Cakes will also not be kept any longer that 4 days to ensure
quality. Free range meat and locally sourced bread will also ensure this quality. The
meals and drinks at the café will also be made as ordered at the café to ensure quality.
Quality appearance is also essential for “Hugamug” and, therefore, employees’ will be
trained to make drinks appealing to customers and each drink to a high standard. They
will also be guided as how to deal with complaints from customers and the café will
be kept clean.
5.10. Environmental sustainability
As found in the literature review the value of food waste to the hospitality industry
was valued at £2.5 billion (British Hospitality Association, 2014), consequently
negatively effecting the environment and increasing global greenhouse gas emissions
(Wrap, 2015). Wrap (2014), recommends that a business orders its stock as it needs it
in order to reduce food waste. Therefore, the owner will do weekly stock checks and
replenish “Hugamug’s” stock as it needs. This will also help the business save money.
“Hugamug” will also recycle all waste it can from the café and has invested in a food
disposal machine (Shown in the start-up costs in appendix F) to reduce the negative
impacts from food waste. The internet will also be used as a big advertising tool for
the café in order to reduce waste of paper. An environment policy which “Hugamug”
will intend to comply with can be found in appendix I,b.
51
5.11. Ethical Considerations
The cafes meals provided at the café will be made using free range products. The
bread used in the meals at the café will also be locally sourced to support fellow small
businesses. This will be apparent in the marketing materials of the café and is
important to the author and, as found in the primary research, also the target market.
52
6. The Market
Primary and secondary data collected from the samples used, which represented the
target market of “Hugamug”, is critical to the financial success of the business.
The marketing research process can be described as a sequence of steps in systematic
collection and analysis of marketing data (Cant et al, 2007). Cant et al (2007)
marketing research process helped to develop the market research process.
Figure 3: The Market Research Process
Description of Deciding on a Preparing the

the research suitable research
Fieldwork
problem and research design
objectives design
Reporting the Processing,

research tabulation and
results analysis
(Cant, et al, 2007)

6.1. Methodology
6.1.1. Secondary Data
Secondary research is a necessary first step in any research design and should not be
seen as inferior to other research methods, such as primary research, but instead a
good way to give clarity to the research questions (Finn, Elliott-White and Walton,
2000). So far from the secondary data collected it is suggested that there is a demand
for a café such as “Hugamug” in Cardiff.
53
6.1.2. Primary Data
It is sometimes possible to do a lot of good secondary research and get useful
information but marketing research typically requires a lot of current data which is not
available from secondary sources (Nargundkar, 2003). Therefore, primary research
can be used to fill in any gaps from the secondary data. Primary data also collects
current data specifically for the current marketing research from the actual sources
(Nargundkar, 2003). All research carried out was tailored to the café’s target market
to collect relevant and valid data.
To help report the research results as Cant’s et al (2007) Market Research Process
suggests, the quantitative data has been put into graphs to be analysed. Quantitative
data provides crispness and clarity which are easy to understand and interpret (Taylor,
2005). Qualitative data has also be used to provide the project with focused complex
and rich data which will provide perspectives on the business idea (Taylor, 2005).
Therefore, using both types of data in the market research is beneficial to the product
as the quantitative data will provide clarity and validity of measurement and the
qualitative will provide richness and complexity (Taylor, 2005).
6.1.3. Ethics Forms & Participant Consent Forms
An ethics form was completed as there are many ethical considerations involved in
doing primary research (Nargundkar, 2003). (Ethics form can be found as appendix
M). Consent forms and participant information sheets were also given to each
participant taking part in the primary research. (A copy of the information sheets and
consent forms can be found in Appendix N, O and P with signed examples by those
who took part in the focus groups and interview).
54
Table 8: Methodology
Method of Why this method was Sample How sample were
Primary chosen? contacted?
Research
Questionnaire This method was Sample of 80 Through social
chosen because participants was media such as café
questionnaires can used. blog sites to reach
reach out to a large the target
audience with no risk audience.
of interviewer biasness
(Robson, 2002). It also Through emailing
confirms hypotheses it to Frome Valley
about occurrences Farm shop to ask
(Robson, 2002). for participants to
partake.
The questionnaire was
created on an online (Copy of
website called questionnaire can
Qualitrics as the author be found in
felt with the internet appendix P)
being so accessible
this would be the (A questionnaire
easiest way to get the data summary
55
largest amount of sheet can be found
responses. in appendix Q)
Focus Group This method was The author used a Group 1: A group
chosen as Morgan sample of 2 focus of mixed gendered
(1997) says, focus groups with 5 40-60 year olds
groups can be used to participants in were contacted
serve as a source of each group. through email
follow-up data to assist after interest was
other primary methods Mixing of genders gained through
and/or to add data to was used to avoid advertising the
qualitative methods biasness. need for
already used such as participants to
the questionnaire. The focus groups take place in a
took place in focus group in the
The focus group Daisy’s café in café the author
helped the author to Bristol on the 18th used to work in.
collect information on of December
the relevant topics but 2016. Group 2: A group
also to find out from of mix gendered
the samples other 18-40 year olds
opinions on aspects in were contacted
the café industry. through email
after interest was
Notes from all group gained through
meetings where advertising the
56
immediately recorded need for
onto the author’s participants to
laptop. (The focus take part in a
group transcripts are focus group in the
attached in Appendix café the author
R) used to work in.
The poster that
was placed in the
café is shown in
appendix S.
Interview An interview was An interview was The manager/
chosen to gain more in carried out with owner of the store
depth answers on the owner/ was interviewed
aspects of running a manager of a café face to face and
café, due to face to in Bristol; Frome the results were
face data collection. Valley Farm recorded in a note
shop. pad and then
stored in a safe
location. (The
interview
transcripts are
attached in
Appendix T).
57
6.2. Questionnaire Results
The most important questionnaire results have been analysed and included in this
section of the business plan. All questionnaire results that have been analysed can be
found in appendix U.
Table 9: Gender
Participant Gender
60
Number of Respondants
50
40
59
30
20
21
10
0
Male Female
From the chart above it can be seen that 59 out of the 80 respondents were female
in comparison to the 21 males. The questionnaire was sent out to an equal amount
of men and women and, therefore, this could suggest that the idea of a café
appeals more to women than it does men. This coincides with the research found
in the literature review that families, and women in particular, use coffee shops for
social gatherings (Thomas, 2014). With female independence and spending power
on the rise this could suggest feasibility of the café. This is also a good target
market for the café as there are approximately 7,000 more females in Cardiff than
men (Cardiff Research Centre, 2013).
58
Table 10: Age
Age of Participants
45
40
35
30
25
41
20
30
15
10
5 5 4
0
0
18-24 25-34 35-44 45-64 65+
This category is important to the business plan in order to identify a target
audience for the business. As cafés can appeal to most ages the available age in the
questionnaire ranged from 18-65+. 41 of the respondents were aged 18-24 and 30
respondents were 25-34 with. The questionnaire was available for all ages and,
therefore, this could suggest that the idea of a café being set up in Cardiff appeals
mostly to the age range 18-34. This would coincide with research found in the
literature review that 40% of people aged 18-to-24 drink coffee daily, while 54%
of people aged 25-to-39 indulge in a daily cup (Wagner, 2015). This is also a good
target market for Cardiff as women aged 20-24 are the largest population in
Cardiff, with women aged 24-29 being second most popular and women aged 30-
34 being third (Cardiff Research Centre, 2013).
59
Table 11: Regularity of visits to existing Cafes
How often do you visit a cafe?
30
Number of Participants
25
20
15
26
10 18
16
5 10
6
4
1
0
Never Less than Once a 2-3 times a Once a 2-3 times a Daily
once a month month week week
month
As shown in the graph most participants visit cafes 2-3 times a month. Shortly
behind that was 2-3 times a week then followed by once a month. This shows that
the participants frequently visit cafes and this gives the author confidence that a
café opening could be popular and have frequent visitors. This may also give the
author an idea of the amount of revenue “Hugamug” may generate.
60
Table 12: Suggestion of a new store
Would you be interested in a new cafe opening in Cardiff?
70
60
50
40 68
30
20
10 12
0
Yes No
From looking at the results 81% of participants were interested in a new café
opening in Cardiff. This is good as it suggests that there will be people interested
in visiting the café. From asking participants what their favourite cafes were, it
was shown that some participants were not from Cardiff, therefore, this could be
an explanation for the 12 that answered no as it would not be relevant to them. The
data found here also relates back to what was found in the literature review that:
Britain's coffee shop sector remains one of the most successful in the UK economy
and will continue to expand, accounting for sales of £1.5 billion in 2013 (Thomas,
2014). With the participants favourite cafes also being mostly independent ones,
together this information provides evidence that there is a demand for a new café
like “Hugamug” to open.
61
Table 13: Location of store
Where would you most prefer a cafe to open in Cardiff?
50
45
40
35
30
25 48
20
15
22
10
5 8
2
0
Cardiff City Centre Bute Park area Cathays/ Roath Lisvane area
Axis Title
The graph shows that over 50% of the participants would like the café to open in
Cardiff City Centre. Cathays/ Roath area was the second most popular choice with
22 participants wanting the café in that area. Cardiff City Centre provides large
shopping facilities and new research has found that “I would prefer to shop on a
high street with a coffee shop, because I can take a break and relax, and then shop
again” (Allerga Strategies, 2010). Therefore, the author has taking this primary
research into consideration when deciding the location of the café.
62
Table 14: Products in demand
Which of the following would you like to see in the cafe as

well as the usual coffee, tea etc?
70
60
50
40
64 63 67
30 59
44 44
20
25
10 12
0
From the graph above the results show that the most popular items to be stocked in
the café were sandwiches/ baguettes, Milkshakes, cakes and flavoured coffees.
This is important for the author to take these views on the cafes products into
consideration to tailor the café to customer’s wants and needs. As mentioned in the
literature review, food menu expansion has been a key trend in terms of innovation
in the coffee shop market (Childe, 2014) and, therefore, although flavoured teas
and hot food were of interest to a lower percentage of participants the author will
still incorporate them into “Hugamug’s” menu. Pastries and smoothies also got a
lower interest but this will still be possible stock for “Hugamug” because there is
still an interest there.
63
Table 15: Drink prices
How much money would you be willing to spend per head

on a regular sized drink in a cafe?
60
50
40
30 57
20
10 19
4
0 0
0
£2 or less £2-£3 £3-£4 £4-£5 £5+
Just under 75% of the participants said that they would be willing to spend
between £2-£3 on a regular sized drink in a café. Just under 25% of the
participants said that they would be willing to spend £2 or less and 4 participants
£3-£4. These results show that the prices of drinks in the café should be kept in
between £2 or less-£3 to attract customers.
64
Table 16: Food prices

on food in a cafe?
30
25
20
15 27
25
10 19
12
5
4
1 0
0
£3 or less £3-£4 £4-£5 £5-£6 £6-£7 £7-£8 £8+
25 participants out of 80 said they would be willing to spend between £3-£4 and
£4-£5. 19 participants also said they were willing to spend between £5-£6 and 12
participants £6-£7. These results will be taking into consideration and the prices
per head on food will be between £3-£6.
65
Table 17: Promotion
Where do you find out about the cafes that you visit?
80
70
60
50
40 71
30 61
51 46
20
22
10
10
2 0
0
As shown in the graph above word of mouth was the most popular way people
find out about cafes, followed by social media. Hose (2016) says, promotion is one
of the necessities for getting your brand in front of the public and interesting new
customers, therefore, promotion is a very important aspect and the author will
listen to the participant’s views, who will be potential customers. After looking at
this data it has been decided that “Hugamug” will use social media, flyers and
posters in order to help start create word of mouth. A website will also be set up
for the café.
The participants were asked to state if there was any other way they found out
about cafés. 47 participants said that they found out about cafes from walking past
them. Therefore, it is important to make sure the café is attractive and eye catching
from the outside in order to attract customers in. Mealey (2015), says that the
outside/ entry area is very important as it is the first area that customers see.
Having a professional sign, adequate lighting such as Fairy lights, a sandwich
66
board on the side walk and outdoor seating are all important aspects that can
attract customers to visit your café (Mealey, 2015). This data has helped decide
some promotional décor “Hugamug” will use. This result will also influence the
decision of the location of the café as the busier the area the more attention the
café will get.
67
Table 18: Name
Which name of a cafe would you say most appeals to you?
60
50
40
30
51
20
10 19
9 9
2
0
Huggamug Café My Lazy Cupcake Break Café Crème Absolutely
Sunday's Fabulous
As shown in the graph above the most popular name for the café is “Hugamug”
with this being the choice for 51 participants out of 80. The second most popular
choice was My Lazy Sunday’s. Therefore, “Hugamug” has been decided to be the
name of the café with “My Lazy Sunday’s” being the second choice of name if
“Hugamug” is not available. “Hugamug” being the most popular name in the
participant’s views will also hopefully attract the cafes target audience.
68
6.3. Focus Group Results
Thematic Analysis has been used to analyse the data from the focus groups. The data
gathered from each group has been sectioned into different categories relevant to the
information found in order to help the investigator discover patterns and themes.
The focus group results will be spoken about together and where not possible will be
addressed at 1 or 2.
Table 19: Focus Group Analysis
Trend Analysis
Demand There was a clear demand for cafes and a common theme
between the focus group results of what participants wanted.
There was demand from many participants for homemade food
to be put in the café which has confirmed the author’s idea of
making homemade sandwiches and cakes. Participants also
wanted friendly staff with a participant from group 1 stating,
“Friendly staff is what makes the difference to me, I don’t
believe in these brand names like café nero”. This could suggest
the demand for more independent cafes, supporting the results
found in the questionnaire with 39 participants voting
independent cafes as their favourite cafes. This also coincides
with literature found that 49% of people claim independent
restaurants are their favourite place to eat (Garrahan, 2015).
With participants also stating that they like less busy and
relaxing cafes this could suggest the want for a more direct
contact with customers from staff. The author will consequently
69
ensure that “Hugamug’s” staff are trained to provide excellent
customer service.
Atmosphere was another major demand with a want for a social
and relaxing feel provided through staff and décor. This also
supports literature found that families, and women in particular,
use coffee shops for social gatherings (Thomas, 2014).
The price is another important aspect to consider when setting
up “Hugamug” with a demand for a good price. A participant in
group 1 stated “I also like a good price I feel like a lot of cafes
rip people off these days” and, therefore, it is important for the
café to price its products carefully, which will be later discussed.
Location When the participants were asked about the location of the café
the results proved different to the questionnaire results. The
majority of the questionnaire results showed participants would
like the café to be in the City Centre. However, when looking at
the focus group results many of the participants said they prefer
cafes in rural locations in comparison to the city centres.
Although the reasons behind this were: they’re less busy, more
relaxing, convenient to get too, provide homemade food and
staff are more welcoming. These are all aspects which the author
had planned to incorporate into “Hugamug” and, therefore, this
data may be because of the participant’s location.
The café will also need to be convenient for customers to get too
due to the results suggesting that a convenient location is a
reason participants will go to a café. A participant from group 1
70
stated “I don’t usually travel too far to get to café as well, unless
say I was going there to do something already” and another
particpant from group 2 also stated “if there is a café I like the
look of in the middle of town id go there, wouldn’t travel ages
for a café”.
Therefore, the cafes location being in Cardiff City centre will
benefit from its shoppers and being busy.
Products and As earlier mentioned, there was a high demand for homemade
services of sandwiches and cakes which supported the questionnaire results
“Hugamug” with 67 participants wanting sandwiches/ baguettes to be in the
cafe. The café will also provide cakes such as caramel
shortbread and slices of cake as these were found to be popular
amongst participants.
Hot drinks such as coffee, tea and lattes are also expected to be
popular in the café with a participant stating “I always get a hot
drink”. This is beneficial to the café as the mark up on these
drinks will be high.
A participant also stated that they would like smoothies in the
summer which could be something for the café to consider in the
future; to do seasonal drinks in order to gain more customers and
expand the cafés menu. The café will also provide other cold
drinks because research found in the literature review suggested
that this was important. This coincided with the focus group
results where cold drinks such as fizzy drinks and soft drinks
were important to participants.
71
Although hot food was not as popular in the questionnaire
results, in the focus group it was mentioned that a cooked
breakfast would appeal to a participant and they would be
willing to spend £5 on one. Therefore, this is something to be
considered.
Flavoured tea and coffee were very popular amongst participants
in the focus groups. Some flavours mentioned were herbal
teas,fruit tea, chai tea, chamomile tea, seasonal coffee flavours at
christmas time, caramel and hazlenut coffees. The average the
participants were willing to pay extra for these flavoured drinks
was mostly 50p. Therefore, these are all flavours that will be
incorporated into the café as the mark up suggested on these
products can bring the café more profit.
The focus groups showed that participants were willing to spend
a little less on food and drink in comparison to the
questionnaires.
Participants wanted to pay for a normal coffee between £1.50-
£2.80 with an average of around £2 and £1-2 for a pot of tea for
one. However, were willing to pay £2.50-£3 for a latte and £2.50
for milkshakes and smoothies.
Participants wanted to spend between 80p- £3 for a cake
depending on the cake, and £2.60- £4 for a sandwhich
depending on the fillings.
72
Therefore, this data has been vital to the author as it has
suggested that the café should price some of its products slightly
lower than the questionnaire results in order to attract customers.
This feedback from the market has also coincided with the
research found in the literature review that consumers are still
being cautious of spending (Garrahan, 2015), demonstrating the
need for operators to keep their prices competitive.
Promotion When discussing promotion with the members of the focus
group most of the participants were attracted by money off
promotions. The most popular result found was the want for
loyalty cards where you ‘buy a certain amount of coffees and get
one free’ or build up points. This overall has confirmed that the
café will also provide loyalty cards for its customers.
Décor There was a theme in the focus group results that showed décor
is a big influence in why participants choose a certain café. A
participant from group 2 stated “I like a cosy feel to a café”, “I
also like a fireplace I think that makes it cosy”, suggesting the
décor has an effect on the atmosphere of a café. Another
participant from group one also said “The décor/atmosphere and
price is most important to me”. Common themes that
participants wanted to feel when going to a café were homely,
relaxed, cosy, clean and to go somewhere that can bring
something different. There were some suggestions to the décor
that the author will take on board such as, lanterns an electric
fireplace and the use of lighting to affect the atmosphere of the
73
cafe. This research will consequently, allow the author to meet
its customer’s needs.
Entertainment The idea to provide entertainment such as music at the café,
supported the results found in the questionnaire with a mixed
interest amongst participant. 6 out of the 10 participants stated
they would be interested in the idea.
The author is going to use some of the suggestions given from
participants in the focus groups in order to incorporate the idea
into the café. As it was found that participants want to go to
cafes to relax, this was reason participants didn’t like the idea.
However, a participant did suggest to have board games and
books available for customers to use. The music was also
suggested to be quieter and acoustic.
Painting was another idea suggested to the participants however,
as some participants who said it was a good idea also said they
wouldn’t personally get involved, this particular idea will be
something to be considered in the future for the business.
Therefore, from analysing the results, the author has decided to
include board games and books in the café. The acoustic
musician will be trialled and continued, or not continued,
depending on the customer’s feedback.
Ethical The results of using Fairtrade and free range products in the café
consideration supported the results found in the questionnaire; not all
participants found it important. However, there was a big trend
in the importance of free range products over Fairtrade products
74
“I don’t go out looking for it but I expect it these days, but free
range is much more important to me”. This supports the research
found in the literature review that consumers expect good ethical
practices from businesses (Ford, 2015). Fairtrade was important
to 4 of the 10 participants who were willing to pay between 20p-
30p more for these products. Therefore, after looking at these
results, Fairtrade will not be incorporated into “Hugamug”
immediately as the author feels it may affect the feasibility of
the café by putting its prices up when the demand from its
market is not very strong. However, free range products will be
used in the café and this will be promoted by “Hugamug”,
because it has been shown that this is important to the market
and will consequently, attract more customers to visit the café.
6.4. Interview Results
Thematic analysis has been used when looking at the data provided from the
interview. The interview helped the author draw conclusions on aspects such as stock
acquirement, target market, promotional techniques and busiest periods for cafes.
Table 20: Interview Analysis
Trend Analysis
Stock When carrying out the interview the café manager/ owner
Acquirement advised the author on the best methods for stocking a café.
Frome Valley Farm shop have their own farm and, therefore,
75
they provide the meat and eggs for the café. However, the
manager did state that a wholesalers such as Makro (who they
use) is a good way of acquiring stock. In terms of when they
purchase stock the owner stated that they bought it as and when
the café needed, aiming to replenish the café for around a 2
months at a time. They source fresh stock that can’t be frozen
weekly. Although she said this is more time consuming, she also
stated that it is more cost efficient for the café and reduces waste.
The owner told the author how she creates a monthly stock list
and a weekly stock list which she uses to complete weekly stock
checks with. It also helps the owner to find out what products are
more and less in demand in the café.
The most sold products in the café where their hot drinks; tea,
coffee (as well as lattes, cappuccinos and flavoured coffee),
sandwiches and their breakfast, which the author should keep in
mind when stocking her café. She also stated that the tea and
coffee being in demand was good as the café makes a large profit
from these products.
The owner also mentioned that recent years she has noticed that
having a good selection of food and drink on the menu is
important. This coincides with research found in the literature
review that food menu expansion has been a key trend in terms
of innovation in the coffee shop market (Childe, 2014). The
stock is one of the most important aspects to a café (Theodore,
76
2015) and, therefore, the author will keep this data in mind when
stocking the café.
Target The results found that a range of ages visited the café but in
Market particular, families and women. Families, and women in
particular, use coffee shops for social gatherings and female
independence and spending power is on the rise (Thomas, 2014),
suggesting that this target market for the café is a good one.
Promotional The most effective promotional strategies where discussed with
Techniques Frome Valley Farm shop to enable the author to pick the most
used by effective strategies for “Hugamug”. The results found that some
competitors of their most successful methods coincided with the results of the
primary research. Their most effective promotional techniques
were their location and word of mouth. The owner stated how
being on a main busy road and local to many villages has
definitely helped bring in a strong loyal customer base. “I’ve
been told a lot when talking to customers that they had been
recommended by a friend or family member to visit and that they
are happy they did”.
The café don’t use posters and flyers however, they do advertise
the café in the local newspaper that circulates the nearby
villages. However, the author feels leaflets will have the same
effect.
The owner spoke about the cafes website stating that the website
has been designed to give people information. She recommends
it is an important promotion to have.
77
The owner stated an effective promotional technique is their
Facebook page. It has been noticed that in recent years this has
gained a lot more attention and created word of mouth for the
business.
Finally loyalty cards have also been effective for the café and
have helped gain loyal customers.
Busiest period This information was wanted from the author to help estimate
for trends in sales, when the business should be open and the best
competitors time to promote. It was found that weekends in general was the
busiest time for the café and that 11am-2pm is often the busiest.
This information coincides with the research found in the
questionnaires and focus groups.
The owner of the café also told the author that they become
busier around occasions and holidays such as, Christmas
holidays, Easter breaks, and summer holidays with an increase of
families with their kids visiting in these months. Occasions such
as Mother’s day, Father’s day and Easter weekend also increase
the amount of customers visiting the café. This is beneficial
knowledge to the author because she can then prepare for these
dates stock wise and promote the cafe, for example offer
Mother’s day deals. The author may also have to consider
bringing in the other part time member of staff to help cope with
the demand on these days.
78
6.5. Summary
Table 21: Summary of Primary Research
Summary of the Questionnaire, Focus Group and Interview Results
To conclude, the primary research carried out has helped to provide an insight into
potential customer’s wants and needs.
The questionnaire gave useful information on the frequency of visits made to
Cafés and how much money participants were willing to spend on food and drink
in a cafe. It also helped the author to pick the name “Hugamug” for the café and
choose the City Centre to be the location. Lastly, it gave an insight to what
promotions will reach out to the target audience and the products that they want to
see in the café, giving the café a competitive edge as it will provide a good range
of food and drink that the customers will want.
The focus groups helped to give more support to the information found in the
questionnaires and literature review, and also gave more clarity to the ideas of the
café. The focus groups also gave participants the chance to elaborate on their
answers giving the investigator more in-depth results and beneficial suggestions
on aspects such as the décor, entertainment and, meals and drinks for the café. It
has helped the author incorporate entertainment into the café in a way that will
attract the target audience.
The interview with an owner of an established café has identified themes that
support what was found in the other primary research methods and the literature
review. The information found helped the author make decisions on how she will
source the stock for “Hugamug”, sourcing as and when the café needs
replenishing, and has also helped confirm that the target market of the café will be
79
mainly women and families, which coincided with the research found in the
literature review. The most effective promotional strategies were leaflets, loyalty
cards, word of mouth, social media and a website, which “Hugamug” will now use
to promote the café. Lastly, finding out the trends of busier dates for cafes will
help the author to prepare and also promote offers to try entice more customers on
these days.
6.6. General Description
“Hugamug” will be in the coffee shop market and provide a cosy, social and relaxed
café. It will provide free range products, homemade food and locally sourced
sandwiches as this was found to be important to participants in the primary research.
It will also provide board games and books for customers to use and a singer will play
at the café on Mondays, which will be trialled and continued depending on the
feedback from the cafes customers.
The market can be price sensitive and, therefore, with the cost to produce the cafes
meals and drinks being low, the café will offer competitive prices. The cafes target
market will be willing to spend between £3-£6 on food and £1.50-£3 on drink.
The café will be aimed at those who live and shop in Cardiff. This is because research
found in the focus groups suggested that a café needs to be convenient to get to and
secondary research found people like to visit cafes while shopping. “Hugamug”
customers will also be those on foot and as found in the questionnaire results 47
participants said that they found out about cafes from walking past them.
The intereview results also showed that there will be seasonal trends for the café. In
the Christmas holidays, Easter breaks and summer holidays there will be an increase
80
of families visiting the café. Occasions such as Easter weekend, Mothers and Father’s
day will also increase the amount of visitors the café has.
6.7. Market Trends
The coffee shop market is currently expanding despite 15 years of rapid expansion,
analysts say Britain's coffee shop sector remains one of the most successful in the UK
economy and will continue to expand (Thomas, 2014). This research has been
supported by the questionnaire results with 68/80 participants interested in a new store
opening in a Cardiff and 77/80 participants already visiting cafes. However, there are
many external factors which could affect the success of “Hugamug” which will be
analysed through a PESTLE. PESTLE analysis involves assessing the Political,
Environmental, Social, Technological, Legal and Environmental influences to identify
forces in the macro-environment that are currently affecting businesses, and ones that
are likely to do so in the future (Allen, 2001).
Table 22: PESTLE Analysis
Political “Hugamug” will have to pay taxes on
the capital earned within the shop. With
the Conservatives now in government
they are looking to get rid of
unnecessary red tape, cut job taxes
(Conservatives, 2016) and have already
changed national insurance through not
making employers with employees
under 21 years old pay Class 1
secondary National Insurance
81
contributions (NICs) on earnings up to
the Upper Secondary Threshold (UST)
(Gov.UK, 2016f).
Economic Although coming out of the recession
there is still a chance that the country
could go back into it. This could affect
the amount of customers “Hugamug”
has because people will not have as
much disposable income to spend on
luxuries. However, the author feels the
business would still be successful as
literature found suggested the café
industry was still popular even during
the recession.
Social Consumer eating trends could alter the
sales within “Hugamug” such as trends
in healthy eating. This trend could cause
sales in the café to drop.
Technical Technology is always developing and if
“Hugamug” doesn’t keep up with these
trends popularity could decline.
“Hugamug” needs to keep up to date
with its social media sites and website
to make information accessible to its
customers. Technology within the
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coffee industry and kitchen could also
develop which may be costly to keep up
with for the business.
Legal More policies, regulations and licenses
may also be added to the café industry
which “Hugamug” will have to keep up
with. However, there is no guarantee
that the business will be granted all
licenses.
Environment Cardiff council have regulations in
place regarding rubbish disposable and
food waste which “Hugamug” must
follow. These regulations could change
and consequently, affect the business.
6.8. Competitor Analysis
6.8.1. Competitor Analysis Table
There are many competitors to “Hugamug” around Cardiff however the author has
chosen the most popular independent cafes near to where the business will be based.
These are Pettigrew Tea Rooms, Selah Café and Tea Room and Garlands Coffee. The
author carried out this competitive analysis by visiting “Hugamug’s” top 3
competitors in Cardiff to measure various aspects to evaluate whether the café is
feasible against its competitors.
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Scale: 1 = Very bad; 2 = Bad; 3 = Reasonable; 4 = Good and 5 = Very Good.
Table 23: Competitive Analysis
Product or Competitor 1 Competitor 2 Competitor 3 New
Service Pettigrew Selah Café Garlands Business:
Attribute Tea Rooms and Tea Coffee “Hugamug
Rooms Café”
Value for 3 4 4 5
money
Ambience of 5 5 3 4
Café
Location 5 3 5 5
Service 4 4 5 5
Availability- 5 5 5 4
opening
hours
Food and 5 5 4 5
drink quality
TOTAL 27 26 26 28
Analysis of the competitors illustrates that “Hugamug” has direct competition,
however if correctly planned the business will have the competitive advantage to take
some of the market share.
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6.8.2. Competitor SWOT Analysis
A SWOT Analysis carried out on all three competitors.
Table 24: SWOT Analysis Pettigrew Tea Rooms
Unique location in the castle Small café (could be cramped)
Good reviews from customers Can be very busy so longer waits &
Good atmosphere Not as good service &
Good variety of cakes, sandwiches & Longer waits for tables if haven’t
food booked
Homemade food Expensive
Good tasting food
Castle attraction brings more guests Increasing Competition
No room for expansion
Larger cafes in City centre
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Table 25: SWOT Analysis Selah Café and Tea Rooms
Good, friendly staff/ service Busy
Family run business Long wait for food
Homemade food Portion sizes
Variety of food available Small café
Good food and drink
Acoustic singer performs
Relaxing / homely feel
Price
To expand Location is not as busy
Other cafes in the busier City Centre
Bad reputation from previous owners
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Table 26: SWOT Analysis Garlands Coffee
Location in city centre Some food on the menu that is not
Ethically conscious available
Good food and drink Small
Good service Could be cleaner
Location makes it cosy Not anything different
Quick service Atmosphere
Reasonable price
Décor Large amount of competitors in same
location
New competitors entering location
Other cafés providing something
different
6.8.3. Competitive Advantage
Each SWOT Analysis has been analysed to ensure “Hugamug” café meets all the
strengths that each competitor has in order to compete and gain an advantage. The
café will avoid the weaknesses of its competitors keeping a good price, providing
something different through board games, a musician and books. The author will also
make sure there are always enough staff to meet demand to avoid long waits, reduced
service and consequently give “Hugamug” an advantage. The cafe will also be a good
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size and the author will not put too many tables to avoid cramping the area. The major
threat to most of the competitors was the threat of new entrants. New entrants to an
industry bring new capacity, the desire to gain market share and, often, substantial
resources (Porter, 1979). Porter (1979) says, being innovative is one of the three
strategic options to gain competitive advantage which also raises barriers to new
entrants. Therefore, “Hugamug” has a strategy in place in order to differentiate itself
from its competitors: using décor, entertainment and using free range products and
locally sourcing bread. Overall, the competitor analysis carried out should help to
ensure “Hugamug” will have the resources and knowledge to gain and maintain
competitive advantage.
6.9. Marketing strategy
“Hugamug” is an unknown brand opening in Cardiff. Therefore, the marketing of the
business is an essential part of its success. It is important that the marketing campaign
meets the target audience of the café using effective but affordable methods.
On the next page is a communication strategy that “Hugamug” will use to
communicate itself to customers. Belch and Belch (2004) suggests is crucial to use to
ensure a business’s long term success.
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Figure 4: Integrated Marketing Campaign
(Belch and Belch, 2004)
“Hugamug” will not use all of the methods above as it would be too costly however, it
will implement some of the techniques mentioned.
An amended version of Chaffey’s (2013) integrated marketing strategy table will now
be used to support the marketing goals for “Hugamug”, showing the methods that will
be used supported by the research found in the questionnaires, focus groups and
interview.
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Table 27: Marketing Methods
Objectives Performance Method to achieve goals
Indicators
Launch event The launch will be Saturday and Sunday were the most
To gain new advertised through popular choices for people to visit
customers and posters, social media and cafes with the interview results
gain awareness flyers as these were the coinciding with this. It will
most effective ways of consequently take place all day
reaching out to the target Saturday between 10am- 6pm.
market as found out from
the questionnaire results Connections with a musician will
and interview. They will provide an acoustic music set in the
be placed around Cardiff background. (Emails between the
City Centre and author and musician are shown in
surrounding areas such appendix V and the costs are
as Roath and Cathays. included under advertising in the
financial forecasts).
Success will be
measured through; Free samples of cakes and drinks will
be handed out in the city centre with
Attendance at launch a flyer and voucher for ‘half price
event drink’. The author will hand out
tasters that are smaller than the
original sizes and expects to hand out
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Amount of customers the following amount; 200 coffees,
visiting the café after the 50 shortbreads, 50 Victoria sponges
launch event and 100 strawberry milkshakes. (the
Sales at the end of the author has estimated this will cost the
day business £16.44 and can be found in
appendix Z, it has also been included
in the financial forecasts under
advertising costs)
Posters will also be placed around
the city centre and surrounding areas
as this is where the target market will
be located.
On arrival customers will receive a
“Hugamug” loyalty card and be
informed that today there will be a
“half price drink” (the author has put
aside £15 a month, included in the
direct costs in the financial forecasts
to cover the discounts the café will
give out)
Staff will also offer free tasters of
various drinks.
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Feedback forms will be on each table
of the café with, in return, a 25%
discount off their next visit. The
forms will question aspects such as
how they heard about the café,
products and services provided,
ambience etc.
Social Media Success will be Facebook, Twitter and Instagram
To raise measured through; pages will be set up by the author in
awareness by Number of members to order to create awareness of
providing each social media page “Hugamug”. The author will have
information Number of views the full control of these sites and keep
about the café social media sites get them updated with information on
and any deals Interaction with social the café and competitions. These
on offer media sites social media sites where chosen due
to the interview results suggesting
these where the most effective sites
for customer interest.
The social media sites aim to let
potential customers know about any
offers and general information about
the store. It also aims to highlight the
unique factors of the café such as the
board games and books available,
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and that the meals use locally
sourced and free range products.
Instagram, in particular, aims to
provide an insight in to what the café
will look like and the cosy and
relaxed atmosphere it will have,
through its photos.
A copy of the pages created are
shown in Appendix W.
The café will also post competitions
on social media to attract customers
to the café (shown in appendix Z.E).
Posters, Success will be Posters will be put up around the city
Flyers, measured through; centre and surrounding areas such as
Loyalty Attendance at the launch Roath and Cathays to advertise
Cards event “Hugamug”. This is because the
To alert, The feedback on the questionnaire results suggested this is
remind and forms given to customers how many people find out about
entice the cafés they visit. The flyers show the
target market cafes menu to entice customers into
to visit/ return the cafe and a “50% off a drink of
to “Hugamug”. your choice voucher”.
Loyalty cards have been chosen after
the interest the focus group results
showed. A customer will be offered
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one when they order at the café and a
member of staff will hand them out
with the flyers outside Morgan
Arcade during quieter times of their
shift on a Saturday and Sunday
between 12-2pm because these were
the busiest days and times as found
out in the primary research (costs
have been included in the financial
forecasts under printing). If the staff
are too busy to do this the owner will
take over the role. The loyalty cards
and leaflets can be found in appendix
X.
The author will continue to print
these out throughout the years to
keep in the café which has also been
included in the financial forecasts
under printing.
Website/ blog Success will be A website has been created after the
To create measures through; interview results suggested that this
awareness and Number of website was important in order to provide
provide views information on the café and contact
information on The feedback on the details. The website is very cheap to
forms given to customers
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“Hugamug” run and has been included in the
and its journey financial forecasts under advertising.
The blog will create interest by
providing an insight to the journey of
setting up the café. (The website can
be found in appendix Y)
Food Board Success will be A board with “Hugamug’s” products
measures through; will be placed outside the café to
Attention to the food inform and entice people into the
boards café. This is because as found in the
The feedback on the primary research 47 people found out
forms given to customers about cafes from walking past them.
It will be bold and bright and each
day have a different “quote of the
day” in order to catch people’s
attention and provide something
different. An example of this is;
“Depresso- The feeling you get when
you’ve run out of coffee”.
Trip Advisor Success will be The author has registered
Gain feedback measured through; “Hugamug” with Trip advisor. The
and attract Feedback online and site will be monitored for any
customers to forms positive or negative feedback and
visit through which the author will respond to.
good reviews
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The cost of all the advertising tools mentioned have been totalled (Found in appendix
Z) and included in the financial forecasts.
6.10. Pricing Strategy
“Hugamug’s” first consideration when pricing products was to cover any costs. As
these costs were very low “Hugamug” has the chance to use competitive pricing. With
Pettigrew Tea Rooms Breakfast being priced at £8.95 “Hugamug” decided to price its
products lower with a large breakfast at the café being a bit more expensive at £5.95
and a small being £4.95. This is because as found in the focus groups, a participant
felt that some cafes rip people off and the target market were willing to spend £3-£6
on food in a café. However, as the meat will be free range the author feels the large
breakfast being at the higher end of this price is justified. A coffee will also be priced
at £2. This will give the café a chance to gain more customers through competitive
pricing. The café has tried to adapt this pricing throughout all of its products whilst,
keeping in mind that the price of labour also needs to be covered. A price list can be
found in appendix Z.B.
6.11. Sales Volumes
“Hugamug’s” sales will depend on the time of year and season. As earlier mentioned
research found that people “would prefer to shop on a high street with a coffee shop,
because I can take a break and relax, and then shop again” (Allerga Strategies,
2010). With shopping increasing around Christmas and the January sales there will be
an estimated 10% increase in sales. This also coincides with the interviews conducted
which illustrated an increase of sales around holidays such as Christmas, summer and
Easter. There is also an increase of visitors on occasions such as Mother’s day,
Father’s day and Easter. Therefore, the author expects a 5% increase of sales in these
periods.
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As the owner has never run a shop before the sales volumes for the business can only
be estimated and averaged out. The sales volume has been worked out by the amount
of customers per hour, multiplied by the amount of hours open, multiplied by the
amount of days a week open, multiplied by the amount of weeks in a month.
Around 13 million visitors a year were day trippers who flocked to the city-centre
shops (Bolter, 2013) and participants were most likely to visit a café 2-3 times a
month followed by 2-3 times a week. With this in mind, to work out the sales using
January as an example, the author has assumed that per hour there will be 10
customers buying drinks and 6 customers buying food. Data found in the primary data
research showed that the average spend on drinks in a café is £1.50-£3, with the focus
group leaning more to the lower scale but only for a pot of tea. The average spend on
food in a café is £3-£6. Therefore, the author estimates £2.30 will be the average
spend on drinks and £4 on food. In the second year of operating there has been an
estimated 20% increase in sales and in the third year a following 20%.
Table 28: Amount of Food sold, Year 1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2002 1680 1911 1838 1820 1838 1820 1820 1750 1820 1750 2002
Year 2:
2402 2016 2293 2205 2184 2205 2184 2184 2100 2184 2100 2402
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Year 3:
2882 2419 2751 2646 2620 2646 2620 2620 2520 2620 2520 2882
Table 29: Amount of Drinks sold, Year 1
1201 1008 1146 1102 1092 1102 1092 1092 1050 1092 1050 1201
Year 2:
1441 1209 1375 1323 1310 1323 1310 1310 1260 1310 1260 1441
Year 3:
1729 1451 1651 1587 1572 1587 1572 1572 1512 1572 1512 1729
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7. Management and Personnel
7.1. Organisation
“Hugamug” will have three employees. The organisational structure for the café will
be flat with only two layers. This will be made up of the owner/ manager at the top of
the structure with the three other employees on the second layer who are: a chef and
two part time café assistants. Below is the organisational chart:
Manager/
Owner
Part time Part time

Chef
cafe assistant cafe assistant
The owner will work full time in the café which will be six days a week. In the
absence of the owner, whether it be for holiday or sickness, the owner has family
members who have knowledge of the business who will cover or the part time
assistants could pick up extra hours.
The chef will work full time in the kitchen and if for any reason the chef cannot work
the owner will take over and bring in a part time member of staff to cover her usual
roles. The chef will also come in an hour before the café opens with the manager to
make up sandwich fillings and bake cakes.
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The two part time employees will both work 3 days a week each and will not work the
same days unless they are needed to meet the extra demand for example, Mother’s
day could bring or as explained above. The part time staffs’ job roles will be to take
payments and orders, make drinks and plate up cakes.
7.2. Management Team
The management team will only consist of the owner of “Hugamug”. This is because
the organisation is not yet big enough to need another manager. The owner’s job role
in the café will be to check stock, help the chef plate up food, serve food and drink,
and clean.
7.3. Work Force
All of the employees will be hired for the opening of the shop. Although the owner
has no official management or ownership experiences, the owner will be the manager
of the shop and work full time. The owner will live at her family home in Bristol for
the first three years of the business trading to save money on food, bills and rent.
Table 30: Personal Survival Statement
Outgoing Period Amount
Mobile Phone Monthly £25.00
Fuel Monthly £80.00
Leisure Spend Monthly £200.00
Car tax Monthly £5.00
Car Insurance Monthly £30.00
Toll Monthly £160.00
The manager will therefore, start on a salary of £6,000 a year to cover costs of living.
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The chef that will be hired has to have 3-5 years’ experience working within a
kitchen, with the relevant qualifications for the job. The average salary for a chef in
Cardiff is currently £25,000 with a lower salary rate of £23,000 (Caterer, 2016). As
“Hugamug” is a small business starting up the chef will be on a salary of £23,000
with the chance to increase this once the business is more established.
The two part time employees will not need to have any qualifications for the job and
experience is not compulsory. On the basis that the part time café assistants will be
under 25, they will be paid an hourly rate of £6.70. However, any staff that are 25 and
over will be paid the newly enforced minimum wage of £7.20 (Gov.UK, 2016).
Table 31: Staff Wages
Staff paid monthly Wages paid on the last working day
of the month
Owner £500
Chef £1,916.70
Total £2,416.70
Staff paid weekly Wages paid weekly on last working
day of week
Part time staff £46.90
Part time staff £46.90
Total £93.80 = £1,219.40 a month
From looking at similar sized businesses and their staffing structure it can be seen that
the number of staff chosen is suitable for “Hugamug”. However, the author is also
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aware that with a growing business, number of staff may need to increase to keep up
with demand and, therefore, “Hugamug” will hire an extra full time café assistant in
the third year of trading.
7.4. Incentive Schemes
“Hugamug” will provide 50% off food and drink for its employees while they are
working their shift. In the second year of trading “Hugamug” will look to also offer
20% off food and drink at the café for when employees visit in their own time.
7.5. Recruitment
When recruiting for “Hugamug” the owner will look for employees with excellent
communication skills and who are able to interact with customers well in order to
make customers feel welcome and relaxed. (An example of “Hugamug’s” job contract
can be found in appendix Z.D).
The job vacancies will be placed online on websites such as Gumtree and Reed. This
allows the job to reach out to a large audience of people who will be searching for
jobs in this area. Gumtree charges a small fee of £19.99 (Gumtree, 2016) to advertise
on their website and it costs £175 for six weeks of advertising on Reed (Reed, 2016).
These costs are included in the financial forecasts.
7.6. Equality
“Hugamug” will treat everyone fairly within the workplace and will not discriminate
against anybody on the basis that they are able to carry out the job role required. The
business will also follow the Equality Act 2010 to ensure that there is no
discrimination.
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7.7. Equal Opportunities
“Hugamug” recognises that it is essential to provide equal opportunities to all persons
without discrimination. A policy has been created for the business (found in appendix
I,c.) which sets out the organisation's position on equal opportunity in all aspects of
employment, including recruitment and promotion, giving guidance and
encouragement to employees at all levels to act fairly and prevent discrimination on
the grounds of sex, race, marital status, part-time and fixed term contract status, age,
sexual orientation or religion.
7.8. Training and Development
The chef will be hired on the basis of experience and knowledge, meaning training
will only be needed to provide an understanding of the kitchen the chef will be
working in and the meals that will be provided.
Since the owner has previous experience in the café industry and in training/ leading
employees she will be able to train the part time café assistants in how to work the
café and make drinks while explaining what is required of them and how to provide
high standards of customer service, this being an important aspect of the café. After
this the owner will always be in the shop to help assist whenever they may need. As
the café assistants will be handling food they will also be asked to complete a Level 2
Food Hygiene certificate course online through ‘Safer Food handler’ (2016). As
previously mentioned the owner already has a level 2 Certificate in Food Safety and
Hygiene. Therefore, in total this will cost £24 (included in year 1’s financial forecast
in the first month’s wages and salaries).
An ingredient list has also been created for the chef and café assistants so that they
know what goes into each product sold in the café (found in appendix Z.A). If a
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customer has any allergies or intolerances the staff will then be able to let the
customer know what they can and can’t have.
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8. Future developments
Table 32: Developments for “Hugamug”
Long Term The author has come up with an idea which she thinks will benefit
plan the café in the future once more established. This idea is to offer
the use of the top floor of the café on quieter trading days, for
example, Monday-Friday. The idea to have days where people can
come and paint in the café was already thought of. However, from
the primary research it was found that this wouldn’t appeal to
everyone as people like to visit cafes to relax. Yet, one participant
did mention this would be good for herself to take the kids.
Therefore, the idea of offering the top floor of the café for crafts
days has been thought off. This would give customers in the
ground floor the chance to relax but those who wanted to be
creative the chance to also do so. The idea is to pay a fee to hire
out the top floor of the café (price depending on amount of people
attending the party), which would include a spread of sandwiches
and drinks of their choice. The acoustic guitar player could also be
requested to perform and they will have access to board games
and books to make it suitable for both the parents and kids. The
customers could then paint their own pottery such as mugs, plates
and or canvas and keep them at the end of the day.
If successful, painting could then become something that is always
available to do on the top floor of the café for a fee.
The author aims to eventually open another café in Bristol.
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Growth The strategy for this development would be to establish
Strategy “Hugamug” by operating the business for a minimum of three
years. This gives the business the chance to gain a customer base
and awareness. Following this the author will then conduct market
research in order to gain better knowledge on the potential growth
within the business. The author will do this by handing out
questionnaires in Cardiff and conducting interviews with pottery
painting businesses. This knowledge put together will
consequently establish the feasibility of this idea.
To open a new café in the future the owner will access
“Hugamug’s” finances and success after five years of trading in
Cardiff. If the owner feels that the idea could be feasible she will
complete another business plan to access the viability of a café
opening in Bristol.
Plans to The author also hopes to expand “Hugamug’s” menu because of
develop new research found in the primary research and literature review that
products suggested menu expansion is essential. Therefore, the idea of
offering summer smoothies, which was suggested in the focus
groups, has been considered, to start in the second year of trading,
along with hot Paninis. This would, therefore, hopefully boost
sales and increase interest in the café.
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8.1 Contingency Plan
Lister (2016), suggests contingency planning is essential in any business strategy. It is
important to anticipate risks in order to be able to better meet challenges that can arise
for a business (Lister, 2016). “Hugamug” has consequently created a contingency plan
using the threats from its SWOT as well as general problems which could affect the
business.
Table 33: Contingency
Risk Prevention Control Contingency
Failing to acquire or  Research all necessary  Close café until all
follow legislation aspects of legislation legislation is covered
 Apply in plenty of  Evaluate why it has
time before shop not been met
opens
 Keep copies of all
legislation within the
shop
 Ensure there are funds
dedicated to the legal
requirements
Business failing while  If business sales begin  Have personal savings
needing to pay the to drop promote offers from income and
leasehold to try boost sales profit from the
 Keep an eye on cash business to cover if
flows
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 Research reasons for the business begins to
drop in sales and try fail
solve  Research into another
business venture
New competition to the  Reduce prices to  Keep offers and
area affecting business lower than marketing going until
competitors sales increase
 Increase offers  Create a USP that
 Increase marketing makes “Hugamug”
 Keep up with any different to the
opening offers the competitor e.g. hot
new competitor may sandwiches
do and try better them
 Research into the new
competitor
Fluctuation in the café  Increase marketing  Research into why the
industry  Introduce something café industry has
new to try gain new fluctuated and try
attention solve the issue within
 Create new offers the café
Theft  Burglar alarms  Report to the police
already fitted  Inform insurance
 Do not keep cash in company on theft and
the till over night what has been taken
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 Do cash checks every  Replace stolen items
time the till is shut as quickly as possible
down
 Have the insurance
cover theft
 Do stock checks
 Owner lock up
premises after every
close
Fire  Ensure each floor is  Immediately call
installed with fire emergency services
alarms  Locate fire assembly
 Brief employees on point in the arcade
fire safety  Get all customers and
 Ensure insurance employees to safety
covers fire damage  Use resources such as
 Have all electrical the fire blankets and
equipment checked extinguishers to put
each year out fire
 Have fire  Inform insurance
extinguishers and company
blankets in the kitchen
and on each floor of
shop
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Customer becoming ill  Follow all food safety  Depending on the
requirements severity of the
 Ensure chef has the customer, call an
correct food safety ambulance
and hygiene  Take customer away
requirements from where other
 Train staff in food customers are eating
safety and hygiene and drinking
 Note all ingredients in  Ask of any known
products illnesses or allergies
 Ensure stock use by the customer has
date is checked every
time before use
 Label all products to
ensure it is not used
after use by date
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9.0. Legal Obligations
In the initial stages of the business the author will contact a solicitor to discuss and
verify the following legal obligations. It is important that “Hugamug” complies with
the following:
Table 34: Legal Obligations
Acts Definition
The Data Protection Act 1998 The Data Protection Act controls how
personal information such as name,
addresses and bank details is used by
businesses. It is a legislation that
governs the protection of personal data
(Gov. UK, 2016a)
National Insurance Contributes Tax and National insurance are
calculated and taken out of wages
through a business pay roll system then
paid to HM Revenue and Customs. The
current NI rate is 13.8%. This will be
added to the gross salary of
“Hugamug’s” full time employee, the
chef, as this is the only employee in the
business earning over the threshold to
pay National insurance for (Gov.UK,
2016b).
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VAT Registration A business that supplies VAT taxable
goods or services with annual turnover
of £82,000 or more in a 12 month period
must register for VAT (Gov.UK,
2016c), therefore “Hugamug” will do
this.
Insurance An estimated quotation was obtained
from Simply Business Insurance
Consultants (2016), with a business
called AIG. The quote was found to be
£417.22 a year. This will be paid at the
start of each year because this would
save “Hugamug” money. (A copy of the
quote is found in appendix Z.C).
Fire Safety As the responsible person of
“Hugamug” the owner must:
 carry out a fire risk assessment of
the premises and review it regularly
 tell staff or their representatives
about the risks identified
 put in place, and maintain,
appropriate fire safety measures
 plan for an emergency
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 provide staff information, fire safety
instruction and training
(Gov.UK,
2016d)
Health and Safety at work Act 1974 It is essential that all organisations meet
the terms of the Health and Safety at
Work Act 1974, to ensure the health,
safety and welfare of persons at work or
those in that work environment (HSE,
2016). For example: the provision and
maintenance of a working environment
for employees that is safe, without risks
to health, and adequate as regards
facilities and arrangements for their
welfare at work (Legislation, 2016).
Public Liability Act 1969 According to HSE (2016a), Public
Liability covers you for claims made
against you by members of the public or
other businesses if they were injured at
the business or they become ill as a
result of, in this case, “Hugamug”.
Employers Liability Act 1969 “Hugamug” plans to hire 3 employees.
Therefore, the owner is responsible for
the health and safety of these employees
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while they are at work. HSE (2016a)
states that your employees may be
injured at work or they, or your former
employees, may become ill as a result of
their work while in your employment.
They then might try to claim
compensation from you if they believe
you are responsible. The Employers’
Liability Act 1969 ensures that you have
at least a minimum level of insurance
cover against any such claims and is
compulsory insurance that “Hugamug”
will need to have.
The National Minimum Wage The national minimum wage sets
minimum hourly rates that employers
must pay their workers. “Hugamug”
will hire three members of staff with the
chef being on a salary of £23,000 a year
and the two part time café assistants
working 21 hours a week each. The
owner will pay her employees £6.70
(the minimum wage for over 21’s)
which has been included in the financial
forecasts (Gov.UK, 2016e). Although
her employees may not be over 21 this
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pay will be adopted to attract people to
work for the café. Should the employee
be 25 and over “Hugamug” will pay the
minimum wage of £7.20 (Gov.UK,
2016e)
Food Safety Act 1990 The Food Safety Act 1990 (as amended)
provides the framework for all food
legislation in Britain. The guidance is
for all types of food business in
England, Wales and Scotland. The main
responsibilities for all food businesses
under the Act are:
To ensure you do not include anything
in food, remove anything from food or
treat food in any way which means it
would be damaging to the health of
people eating it
To ensure that the food you serve or sell
is of the nature, substance or quality
which consumers would expect
 To ensure that the food is labelled,
advertised and presented in a way that is
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not false or misleading (Food Standards
Agency, 2015).
Trading Standards Trading standards covers issues
concerning, consumer safety, product
labelling and not being misleading to
the customer (UK Trading Standards,
2016). “Hugamug” will follow the
trading standards.
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10. Finance
The author is aware that an accountant should be hired to carry out accounts at the end
of each tax year. However a family member who is a qualified accountant has agreed
to do this for free for the first three years in exchange for free food and drinks on her
visits to the café.
10.1. Contingent Liabilities
“Hugamug” aims to not get into any legal problems, which could result in paying for
legal cases. However, in case this did occur, “Hugamug” will put aside £50 at the end
(under miscellaneous in the financial forecasts) of each month to cover any legal cases
which may need to be covered and also machinery that may need to be replaced. The
business will also have business insurance to cover the business for public liability,
employers’ liability, stock, contents of the café, buildings, money in safe, glass and
goods in transit.
10.2. Breakeven Analysis
Based on estimates within the forecast cash flows, the café will break even in the
beginning of the second. The three year average sales to breakeven can be shown as
£103, 084. The table below demonstrates the breakeven analysis of “Hugamug”.
Table 35: Breakeven Analysis
Hugamug Year 1 Year 2 Year 3
Sales £86, 363 £103, 635 £124, 362
Breakeven Sales Overheads/ GPM Overheads/ GPM Overheads/ GPM
£98,847 £99,181 £111,224
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10.3. Current Funding Strategies
There are two types of funding going into “Hugamug”. The owner is investing £8,000
of personal savings into the business alongside an interest free loan of £12,000 from a
family member. The £12,000 loan will be paid back fully to the family member in the
third year of trading, repaying in instalments of £1,000 a month.
“Hugamug” will also have a free £500 overdraft facility to use in case of emergencies
or the sales do not reach what has been estimated. In the second year this will be
reduced to £0 as it is anticipated the risks of “Hugamug” becoming in negative cash
will be low.
10.4. Financial Forecasts
10.4.1. Profit and Loss
The profit and Loss account shows that “Hugamug” will be making a gross profit of
£65,439 in the first year which increases throughout the three years. The net profit and
loss however, shows the business will be making a loss of -9,460. Nevertheless, this
has been covered through the capital and a loan invested into the business and in the
second year of trading the business makes a net profit of £3,375. Further increasing to
£9,955 in the third year. This is positive for the business as it shows that after paying
off all the overheads “Hugamug” still has remaining profit to put back into the
business.
10.4.2. Cash Flow
The cash flow forecasts break down all of the costs that the business with incur each
month to run the business. The cash flow forecasts show that the business in the first
year will be at a higher risk, however, the author will ensure its sales continue to
increase through constant marketing of the café. In the years 2 and 3 the business
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becomes a lower risk where the business is making a good amount of sales and
consequently, is reflected in the closing bank balance. By the end of the third year the
closing bank balance of the business is forecasted to be £6,025 and the café will have
no longer have any debts.
10.4.3. Balance Sheet
A balance sheet has been created to show the stability of “Hugamug’s” finances,
showing the difference between the cafés assets and liabilities. Over the three years
the balance sheets liabilities reduce and assets increase. In the first year the business
has more liabilities than assets however, this changes in the second year of trading.
The balance sheet shows positive information with the total equity in the second year
being £13,415.
The financial forecasts for the three years discussed will now be shown:
119
Figure 5: Cash Flow Year 1
120
121
122
Figure 8: Profit and Loss
123
Figure 9: Balance Sheet for 2017
124
125
126
Figure 12: Ratio Calculations
127
10.5. Sensitivity Analysis
A sensitivity analysis is produced to see how much profit the business can make if the
predicted sales are not met. The sensitivity analysis will be made up assuming that
“Hugamug” will make 10% less sales.
Table 36: Sensitivity Analysis
Year 1 Year 2 Year 3
Sales £77,726 £93,272 £111,926
Gross Profit £58,215 £69,858 £83,830
Overheads £74,875 £74,628 £74,748
Net Profit -£16,600 -£4,770 £9,082
Start-up capital £8000 -5,210
Loans £12,000 £12,000 £12,000
Overdraft £10,000
Capital End of -£8,660 -£12,476 -£5,210
Year
Gross Profit GP/Sales GP/Sales GP/Sales
Margin
75% 75% 75%
If the business was to make 10% less sales the business would need to take out a
£10,000 overdraft with NatWest to cover the loss the business will make in year 2 and
8 months of year 3. The family member has also when lending the loan agreed to be
lenient on when the loan is repaid. Therefore, “Hugamug” would begin to pay the
loan back in the fourth year of trading when the business is stable. However, overall
128
as shown in the table above this wouldn’t have a major effect on the business as it
would breakeven in the third year and therefore shows “Hugamug” would still be a
feasible business.
129
Chapter 4: Discussion and Evaluation
130
4.0. Analysis and Discussion
This chapter will critically analyse the project and its development looking at its
strengths and aspects that could be improved if this project was carried out again.
4.1. Overview of project
The aim of the project was to evaluate the feasibility of setting up a unique café in the
Cardiff area which will provide a different but cosy café experience for a wide range
audience. Achievable objectives were set at the beginning of the project in order to
meet this aim. The introduction helped the author to briefly understand what goes into
creating a business plan and the café industry, which was then further researched into
in the literature review. The next stage was the business plan which covered many
different important aspects.
The author overall believes that the project has been a success and that “Hugamug” is
a feasible business. The demand for the café has been recognised and finding out what
customers want from a café has helped to build upon this business idea to meet
customers’ needs. This has allowed the café to compete against its competitors and
efforts will be maintained to keep a competitive advantage.
4.2. Business Plan
An enterprise project was chosen by the author as she felt the knowledge she had from
previously working in a café and her degree would benefit the project and also created
an interest in setting up a café. When the author first thought about the idea of setting
up a café she was uncertain that it would be feasible because of the amount of
resources you need to run a café and the amount of competitors in Cardiff. However,
the business plan covered all important aspects to question this and consequently
motivated the author to set this business up in the future.
131
The business plan considered;
 The Business aims and objectives
 Financial Highlights
 The Premises
 The Products and Services
 The Market
 The Marketing strategy
 Management and Personnel
 Future Developments
 Contingency plan
 Legal obligations
 Finance
4.3. Market Research
Market research was a crucial part of the enterprise project as the author needed
evidence that the business had demand in the current market.
Secondary research was conducted first to get a general understanding of what goes
into setting up a business and to gain knowledge of the café industry. From this
research it was found that finances are becoming easier to access and that the café
industry is very successful with a growing demand for cafes.
However, primary research was also essential in order to support the research already
found. To understand more about setting up and running of a café the author decided
to interview a café owner to discuss aspects such as stock, target market, trends and
effective promotions. A questionnaire was also sent to potential customers to help the
132
café to meet customer’s needs and 2 focus groups, involving 5 people, were organised
to gain a more in depth understanding of potential customers’ wants and needs.
4.4. Secondary Research
The author found the secondary research useful, however, it was more difficult to find
up to date literature on certain aspects that could help prove the success of the
business idea. However, it did help heighten the author’s knowledge and she
consequently, found that despite 15 years of rapid expansion, Britain's coffee shop
sector remains one of the most successful in the UK economy and will continue to
expand (Thomas, 2014). It also showed that despite, the struggle many businesses
went through during the recession, the café industry stayed successful and showed no
signs of decline, suggesting the strength and chance of success, if done correctly, of
setting up a café.
The author also found a lot research suggesting interest in setting up an ethically
friendly café, with it already being ingrained in to many businesses. It was found that
at least 71% of consumers have bought free range products and 61% Fairtrade
products (Ford, 2015), which helped give the idea of researching this further in the
primary research. Knowledge was also gained about food waste management. Using
Waste and Resources Action Programme's report (WRAP) helped the café reduce its
waste.
4.5. Primary Research
The primary research was more time consuming however, gave the business plan
more in-depth detail and also supported some aspects found in the literature review.
Therefore, it was essential for the success of the business plan.
133
The author first conducted her questionnaire by posting it online. The questionnaires
where the hardest to get results from and took the longest to get participants.
However, after determination from the author she finally managed to get 80
participants to answer the questionnaire, which was what she was aiming for. This
gave clarity and more support to the results found. This also helped to confirm that
woman would be the cafes main target audience, that independent cafes are in
demand, the name of the café, the location, most effective promotional methods and
busiest days and times for visitors.
The focus groups were the next primary research conducted and this helped clarify
research found in the questionnaires and allowed the author to gain a more in depth
knowledge of potential customers’ wants and needs. This helped confirm the most
popular products and services and those to be served at the cafe, the most effective
promotional method; that free range was more important than Fairtrade; that décor
and atmosphere are very important and the entertainment that would be at the café.
Finally the interview conducted with an owner of a café was very helpful and the
author was very lucky that the participant was enthusiastic to help and answer
questions.
4.6. Financial Performance
The ratio calculations for the years 1-3 show that there will be a profit made in the
second year of trading. Although the author, having no previous experience of
ownership opening a new business, could only estimate figures, she feels that the
research helped to realistically estimate an approximate sales income and, therefore, is
confident the figures are reliable. A sensitivity analysis was also carried out showing
that the business would still be a success if these figures were to be estimated as too
134
high. However, as the business would then not break even until the 3rd year of trading,
delaying the loan re-payment, the author would next time consider increasing prices
of some products on sale in the café to reduce this risk. Nevertheless, the author will
strongly market the café to avoid this risk. The owner had a healthy capital to start the
business however, it was important not to overestimate this figure. The business’ sales
will rely heavily on the business marketing itself to gain some of the highly
competitive market share and, therefore, the business has an overdraft set up with
NatWest for the first year of trading in case of emergencies.
4.7. Summary
After looking at the following above the author feels confident that the features
throughout this enterprise project are viable. The primary research has also had a
significant effect on the suggested feasibility of the café and has given the author
confidence to consider setting up the café in the future.
135
Chapter 5: Conclusions and Recommendations
136
5.0. Conclusions and Recommendations
5.1. Conclusion
The project aimed to investigate the feasibility of setting up a unique café in the
Cardiff area which will provide a different but cosy café experience for a wide range
audience. The author has researched all aspects of the business plan and also
completed primary and secondary research which has helped come to the conclusion
that “Hugamug” is a viable business plan.
The market research has shown that there is a demand for more independent cafes.
The primary and secondary research together has suggested that the products served at
the café would be popular and the USP the café will provide will attract more
potential customers.
The marketing plan has been created taking into consideration the information found
in the primary and secondary research. Promotional offers have been created to attract
people to visit the café and strong online marketing tools have been created to create
awareness and interest.
The financial documents produced have demonstrated the success that “Hugamug”
would be a profitable business, even if the sales weren’t to reach what has been
forecasted.
To ensure the main aim of the project was fulfilled the following objectives were set
and have been completed;
1. To conduct a comprehensive literature review looking at different aspects such
as entrepreneurship, setting up a small business, finance for setting up a small
business, trends in the coffee shop culture, coffee shops in Cardiff, alternative
business models, customer analysis and developing a business plan. The
137
literature review will be used to identify the challenges and requirements that
will occur when setting up a small business.
The author used the literature review to identify any challenges for a business like
“Hugamug”, enabling the business to assess the business plans feasibility and
determine the success of the business idea. The literature review looked at all of the
different aspects stated above using various sources; books, websites, newspapers.
Therefore, the author was able to identify any gaps in the literature to be completed in
the primary research.
2. To analyse the space available in the market for a new café in Cardiff by using
market research. To also establish competition and the extent and scope of the
existing cafés specifically in Cardiff. Primary research that will be used is
questionnaires, focus groups and an interview.
The author has successfully completed a range of market research gaining 80
questionnaire results, 2 focus groups, competitor analysis and an interview. It was
important to conduct this research to support any evidence already found suggesting
the chance for the café to succeed. It also helped to confirm the cafes unique selling
point and aspects concerning the café such as location, products and services and
prices.
3. To identify financial resources and legal requirements to establish the café.
This will be done by breaking down the financial requirements of the business
and so determining the feasibility of the project.
The overall business plan determined the feasibility of the business idea. There are
finances available to the owner to cover the costs of setting up the business and
138
proving that the business could be successfully set up. All legal requirements have
also been considered.
4. To develop a detailed business plan and look at the revenue needed in order to
evaluate the feasibility of setting up the café. This business plan will be used
when explaining the idea to investors.
This has been done through creating the financial forecasts from year 1-3 and has
proved that the business plan will be feasible and will make a profit. Consequently,
the business plan can now be used to explain the idea to investors.
5. To finally conclude and make recommendations on improvements that could
be made to the business plan. This will solve any issues to help maintain the
business’s position in the face of growing competition.
This final objective can now be completed as the above objectives have been met
meaning that the author was able to investigate the feasibility of the business idea.
The author will now reflect on the business plan and make any recommendations that
could be made to help maintain the business position in the face of growing
competition.
5.2. Recommendations
Throughout the analysis and conclusion the author has become aware of areas that
could have been improved if the enterprise project was to be done again. These are:
139
Table 37: Recommendations
Improvement Recommendation
Improvements to primary research The author feels that the questionnaires
could have been more successful and
accurate if half were printed out and
handed around the Cardiff City Centre
to have a more diverse audience. She
feels this could have also reached the
target audience better and made it easier
to gain more respondents. Looking back
on the interview the author would have
also questioned the amount of
customers the café has in order to have
more reliability when estimating the
sales volumes.
Interview newly opened cafes The author feels that if visits had been
made to newly open cafes she could
have gained more ideas on how to
promote a new business. Although the
author is happy with the promotions
chosen it would also have benefited the
completion of the business plan to see
how a new business is started.
140
Competitor Interviews The author believes that conducting
interviews with “Hugamug’s”
competitors would have been beneficial
to the business plan as it would have
given more insight into how to survive
amongst so much competition in
Cardiff.
Pricing After completing the sensitivity analysis
the author feels that the business would
have less risk if the café was to have
slightly higher prices on the more
expensive products to produce. This
includes products with meat in, so the
author could have used the fact that the
meat was all free range to justify rising
these prices.
Overall the author feels that this enterprise has been a challenging project which has
taken a lot of commitment. Nevertheless, it has been a successful learning tool and
has given the author a lot of new knowledge.
141
Appendices
142
Appendix A: Suggested Names
Hugamug
My Lazy Sunday’s
Cupcake Break
Café Crème
Absolutely Fabulous
Appendix B: Business Structures
Other structures that were considered where a sole trader and a partnership, evidence
of this has been shown in the table below. However, “Hugamug” will be a limited
company due to the personal limited liability it will give the owner.
Sole Trader Partnership
Advantages Advantages
Setting up is very simple and cheap; More than one owner- more ideas
inform the HRMC and start trading

Setting up is very simple and cheap;
straight away.
inform the HRMC and start trading
Costs little more than £150 to set up the straight away.
company
143
Owner receives all profits Costs little more than £150 to set up the
company
(Williams, 2011)
More access to funds
More flexibility due to two managing
directors
Share of responsibilities
(Hoskin, 2014)
Disadvantages Disadvantages
Income tax and national insurance Income tax and national insurance
contributions must be paid from them to contributions must be paid from them to
HMRC. HMRC.
(Williams, 2011) If arguments occur the business can
suffer.
Liable for its unpaid debts, overdrafts
and so on. Liable for unpaid debts, overdrafts and
Owners limited to funds so on.
(Bytestart, 2016)
Decision making can cause problems
(Hoskin, 2014)
144
Appendix C: Companies House Form
Companies House (2016)
145
Appendix D: Premises Information Sheet
146
Map of Shop
Hugamug
147
Appendix E: Photos of Shop
Front
Upstairs
148
Down stairs
149
150
Appendix F: Start-up Costs
Item Quantity Cost Supplier Total

Description
Coffee 1 £1,899 Bella Barista £1,899
Machine &
Grinder
Dishwasher 1 £1,260 m&m catering £1,260
equipment
Genware 1 £18.60 m&m catering £18.60
dishwasher equipment
plate rack
Water Boiler- 1 £298 m&m catering £298
Auto Fill equipment
Cutlery Rack 1 £14.46 m&m catering £14.46
equipment
Microwave 1 £48 Tesco £48
Blender 2 £18.95 Tesco £37.90
Under counter 1 £847.20 m&m catering £847.20
Fridge equipment
Display Fridge 1 £264 m&m catering £264
equipment
Chest Freezer 1 £351.60 m&m catering £351.60
equipment
4 slot Toaster 2 £24.99 Tesco £49.98
Caution Wet 2 £12.96 m&m catering £15.92
floor sign equipment
Tea pot Umiteasets
1 6 £3.50 £21
2 6 £4.50 £27
3 24 £8.29 (price £33.16
for 6)
=£81.16
Mugs 60 £1.50 Charity shop £90
Blender 2 £17.50 Tesco £35
Stainless steel 3 £8.86 m&m catering £26.58
conical jug 1lt equipment
8 hobb cooker 1 £3,795.60 m&m catering £3,795.60
and oven equipment
Waste disposal 1 £1,555.20 m&m catering £1,555.20
equipment
100 Disposable 1 £1.85 Vivantage £1.85
gloves
Stainless steel 2 £5.51 m&m catering £11.02
tongs equipment
Cutlery m&m catering
12 Forks 4 £1.78 equipment £7.12
12 Spoons 4 £0.96 £3.84
12 Knife 4 £2.88 £11.52
151
= £22.48
Spatula 3 £4.81 m&m catering £14.43
equipment
Oven mitt 1 £17.63 m&m catering £17.63
equipment
Cooling tray 3 £4.32 m&m catering £12.96
equipment
Scales 1 £9 Tesco £9
Frothing 3 £3.75 EBay £11.25
thermometer
Saucepan 5 £3 Tesco £15
Frying Pan 5 £8.04 m&m catering £40.02
equipment
Plates- m&m catering
6 (23cm) £6.91 equipment £34.55
plates £5.47 £32.82
6 (21cm) £4.84 £29.04
plates =£96.41
6 (16cm)
plates
Bakewell Pan 3 £6.76 m&m catering £20.28

equipment
Bowls 30 £1.40 m&m catering £42
equipment
Set of 6 knifes 1 £4 m&m catering £4
equipment
Cutting Set of 6 £23.98 Nisbets £23.98
boards-
White
Green
Brown
Red
Blue
Yellow
Sink 1 £478.80 m&m catering £478.80
equipment
Chairs-
Set of 4 chairs 1 £comes with EBay
dining table
Set of 4 chairs 1 £comes with
dining table
Bench 2 Comes with
long table
Sofa 2 £80 £80
Chairs 22 £14 Ikea £308

=388
Tables- EBay £248
152
Mahogany 1 £15
style drum
table 1 £12.50
Coffee and
side table 1 £10
Round table 1 £25
Long table 1 £45
Round table 1 £25
Long table 1 £80
Long Table 1 £9.50
Round table 1 £26
Long table 1 £23
Round table
Glasses 100 Collected from
(bottles, jars) old pots used
6 Storage 3 £2.94 m&m catering £8.82
containers equipment
5 Tea towels 2 £5 m&m catering £10
equipment
1ltr Soap 1 £6.35 Macro £6.35
500 led fairy 2 £6.51 EBay £13.02
Lights
Fire place 1 £45 EBay £45
Wall lights 8 £5.50 EBay £44
Dustpan and 1 £2.39 Macro £2.39
brush
Wooden desk Donated from
for till to stand Authors
on parents
Till 1 £59.99 Macro £59.99
Blankets 6 £5 EBay £30
Books 20 £1 Charity Shop £20
Board games- 1 of each = £8.79 £87.90
Monopoly 10
Scrabble
Mouse trap
Frustration
Trivial pursuit
Logo board
game
Articulate
The best of TV
& Movies
Guess who
Fire blanket & 3 £25.16 Makro £25.16
extinguisher
10 person First 1 £15.72 m&m catering £15.72
aid kit equipment
153
2 tier cake £6.99 EBay £27.96

stand
Cushions 2 0.50p EBay £1
15 £1 Charity shop £15
=£16
Installation 1 £1000 Deco heat £1000
Non-slip 3 £3.95 Makro £11.85
serving tray
Chalk food 3 £6.99 EBay £20.97
board signs
Salt shakers 10 £0.76 Mbs whole £7.60
Pepper pots 10 £3.52 sale £35.20
EBay =£42.80
16oz take 30 £5.99 Makro £5.99
away cups
with lids
Measuring 1 £5.39 Makro £5.39
cups 4 packs
250 cupcake 1 £3.39 EBay £3.39
cases
Anti- bacterial 10 £0.70 Tesco £7.00
cleaning spray
Micro fibre 3 £3 Tesco £9.00
cloth 4 pack
Polish 5 £0.80 Tesco £4.00
Bleach 5 £0.50 Tesco £2.50
50 litre bin 2 £9.00 Tesco £18.00
Total £13,710.22
154
Appendix G: Hugamug’s Menu
155
156
Appendix H: Food, Drink & Ingredients stock list
Drink stock list
Item Description Quantity Cost Supplier

Supremo 8 x 1kg £64 Caffe society
Espresso Coffee
Beans
Tea pigs- Amazon
Chamomile 50 tea bags £10.88
flowers
Super fruit 50 tea bags £11.21
Chai tea 50 tea bags £10.65
Mao feng green 50 tea bags £10.65
Peppermint 50 tea bags £10.21
leaves
Chocolate flake 15 tea bags £3.94
Yorkshire tea 2400 tea bags £31.98 Bidvest
Tetley Decaf tea 240 tea bags £7.45 Bidvest
Coffee Syrups: 1 litre of each £6.99 Bidvest
Caramel flavour
Vanilla
Roasted Hazelnut
Mint
Gingerbread
Creme Brule
Chocolate
Cinamon
Milk per 6 pints- £1.48 Tesco

Red
Green
Blue
Ice cubes 2kg £1.00 Tesco
Sugar cubes 1kg £2.49 Bidvest
Hot chocolate 2kg £8.69 Bidvest
Marshmallows 4 x 500g £6.63 Bidvest
250g Nestlé 1 £1.39 Tesco
Squirty Cream
Coke 24 cans £9.95 Amazon
Diet Coke 24 cans £9.95 Bidvest
7Up 24 cans £7.49 Bidvest
Fruit juices- Don Bidvest
Pello Orange 6 x 2ltr £16.07
Sunpride Apple 12 x 1ltr £9.22
Sunpride
Cranberry, 12 x 1ltr £12.42
Sunpride 48 x 250ml £9.14
Tropical 12 x 1ltr £9.17
Don Pello Mango 12 x 1ltr £9.17
Pineapple
Milkshake Bidvest
ingredients-
157
Ice cream 6 x 7 gallons £28.84
Bronte triple 18 £8.30

choc Cookies
Crusha Chocolate 12 x 1ltr £39.59
Crusha Banana 12 x 1ltr £39.07
Crusha 12 x 1ltr £38.35

Strawberry
Vanilla extract 6 x 35ml £8.50
Caramel (Use
caramel syrup)
Milk (Stocked
above)
Food stock list
Item Description Quantity Cost Supplier

Free range un- 6 pieces £4.65 Welsh Food box
smoked back company
bacon
12 x pork 800g £6.95 Welsh Food box
sausages company
Corn fed free 430g £4 Tesco
range chicken (4 portions)
fillets
Free range eggs 12 eggs £1.75 Tesco
médium
Mushrooms (61 servings) £6.73 Bidvest
(2.72kg)
Tomatoes on the 1 £0.14 Tesco
vine
Baked beans 6 x 3.12kg £11.63 Bidvest
Mccain Classics 1kg £2.36 Bidvest
Hash browns (22 portions)
Bread and 40p a baguette Brutons the
baguettes 60p a loaf of Bakers
bread- 10 slices
Veggiterian 80 £25.99 Bidvest
sausage
Tiptree 72 £13.14 Bidvest
strawberry Jam
Peanut Butter 1 x 2.5kg £14.40 Bidvest
(166 portions)
Tiptree orange 72 £12.85 Bidvest
Marmalade
Marmite 600g £9.52 Bidvest
158
(40 portions)
Nutella 120 x 15g pots £18.40 Bidvest
Princes Tuna in 6 x 800g £25.05 Bidvest
brine
Iceberg Lettuce 8 portions £0.43 Bidvest
Crisps 14 x 150g £10.96 Bidvest
Wing yip Sweet 2 ltr £9.69 Bidvest

chilli sauce
Knorr Chicken 4 x 1.1kg £32.22 Bidvest
tikka paste
Cranberry sauce 4 x 2.5kg £34.51 Bidvest
President lingot 3 x 1.2kg £38.70 Bidvest

Brie
Prawns 1 x 2kg £18.66 Bidvest
(20 portions)
Marie rose sauce- Bidvest
mayonnaise
Ketchup (Below)
Worcestershire (Below)
sauce 568ml £6.41
Ktc Lemon juice
Salt and pepper 500ml £1.09
(Below)
Roasted Red 1kg- £4.99 Bidvest
pepper Hummus (17 portions)
Avocado 1 £1.53 Bidvest
Feta 400g £5.48 Bidvest
(14 portions)
Mcdougalls self 1kg £7.98 Bidvest
raising flour
Mcdougalls flour 1kg £7.98 Bidvest
Dr Oetker Baking 500g £4.58 Bidvest
powder
Tate & Lyle 10kg £15.63 Bidvest
caster sugar
Tate & Lyle icing 3kg £5.39 Bidvest
sugar
Hartleys 3.18kg £11.02 Bidvest
strawberry jam
Dr Oetker cocoa 1kg £11.32 Bidvest
powder
Ktc sunflower oil 15ltr £17.56 Bidvest
Golden syrup 7.257kg £13.25 Bidvest
Walnut halves 1kg £14.72 Bidvest

Pack 5 of lemons £1.50 Tesco
Cooking 300g £0.67 Tesco
chocolate
Codensed milk 12 x 397g £14.50 Bidvest
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Cake Tesco
decorations-
edible roses 30 roses £2.49
Sprinkles 1kg £13.14
Ground Salt 6kg £5.18 Bidvest
Pepper 6 x 500g £75.48
Heinz Ketchup 4ltr £16.44 Bidvest
Mayonnaise 2.5ltr £5.87 Bidvest
(83 portions)
Un-salted butter 20x 250g £22.17 Bidvest
Coronation 2.5ltrs £6.39 Bidvest

mayonnaise (42 portions)
Cucumber 1 whole £0.42 Tesco
cucumber
(8 portions)
Porridge oats 2kg £2.76 Bidvest
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Appendix I: Policy Documents
I.a) Health and Safety Policy
Adapted from Conscious Governance (2016)
Rebecca Howells recognises and is committed under Victorian legislation to provide
and maintain a safe, healthy and comfortable work environment for its staff,
consumers and other visitors.
Rebecca Howells believes that a well-managed health and safety program is an
integral part of good management practice.
The Rebecca Howells has a comprehensive OH & S Policy. Staff have an obligation
to ensure that they are thoroughly familiar with its content. It is strongly suggested
that the policy be carefully read and understood.
Rebecca Howells Commitment to OH & S
In fulfilling its responsibilities, Rebecca Howells will:
 Comply with all statutory rules and accepted codes and practices relating to
health and safety.
 Set short and long term goals and specific responsibilities in the management
of health and safety.
 Develop OH & S policies, procedures and guidelines.
 Ensure all line managers understand and take responsibility for the health and
safety process in each program area.
 Provide information, instruction, training and supervision to ensure that staff
are aware of safe work practices, emergency procedures and any risks to
health and safety in their work environment.
161
 Consult with staff and OH & S representative on issues relating to health and
safety.
Rebecca Howells will ensure that management or delegates have practical knowledge
of a take responsibility for:
 Hazard identification, risk assessment and risk control.
 Health and safety legislation, regulations and recognised standards.
 Specific health and safety issues within the workplace.
 Investigation of all diseases, injuries, near misses and accidents and formulate
appropriate preventative action
 Regularly monitor and review the implementation of and compliance with OH
& S policies.
Rebecca Howells is committed to providing:
 Safe equipment and working procedures including adequate ventilation, safe
electrical connections, appropriate resources, clear passageways, etc.
 Good facilities for the welfare of workers such as ergonomically sound
furniture, kitchen and dining area, washrooms, first aid kit.
I.b) Environment Policy
Adapted from Environmental Policy (2016)
Hugamug is committed to leading the industry in minimising the impact of its
activities on the environment.
The key points of its strategy to achieve this are:
162
 Minimise waste by evaluating operations and ensuring they are as efficient as
possible.
 Minimise toxic emissions through the selection and use of its fleet and the source
of its power requirement.
 Actively promote recycling both internally and amongst its customers and
suppliers.
 Source and promote a product range to minimise the environmental impact of both
production and distribution.
 Meet or exceed all the environmental legislation that relates to the Company.
 Use an accredited program to offset the greenhouse gas emissions generated by
our activities.
Signed by Senior Director of company
I.c) Equal Opportunities
Adapted from Diversity Job Board (2016)
Hugamug recognises that it is essential to provide equal opportunities to all persons
without discrimination. This policy sets out the organisation's position on equal
opportunity in all aspects of employment, including recruitment and promotion,
giving guidance and encouragement to employees at all levels to act fairly and prevent
discrimination on the grounds of sex, race, marital status, part-time and fixed term
contract status, age, sexual orientation or religion.
163
Statement of policy
(a) It is the policy of Hugamug to ensure that no job applicant or employee receives
less favourable treatment on the grounds of sex, race, marital status, disability, age,
part-time or fixed term contract status, sexual orientation or religion, or is
disadvantaged by conditions or requirements that cannot be shown to be justifiable.
The organisation is committed not only to its legal obligations but also to the positive
promotion of equality of opportunity in all aspects of employment.
(b) The organisation recognises that adhering to the Equal Opportunities Policy,
combined with relevant employment policies and practices, maximises the effective
use of individuals in both the organisation’s and employees´ best interests. Hugamug
recognises the great benefits in having a diverse workforce with different
backgrounds, solely employed on ability.
(c) The application of recruitment, training, and promotion policies to all individuals
will be on the basis of job requirements and the individual’s ability and merits.
(d) All employees of the organisation will be made aware of the provisions of this
policy.
Recruitment and promotion
(a) Advertisements for posts will give sufficiently clear and accurate information to
enable potential applicants to assess their own suitability for the post. Information
about vacant posts will be provided in such a manner that does not restrict its
audience in terms of sex, race, marital status, disability, age, part-time or fixed term
contract status, sexual orientation or religion.
(b) Recruitment literature will not imply a preference for one group of applicants
unless there is a genuine occupational qualification which limits the post to this
164
particular group, in which case this must be clearly stated.
(c) All vacancies will be circulated internally.
(d) All descriptions and specifications for posts will include only requirements that
are necessary and justifiable for the effective performance of the job.
(e) All selection will be thorough, conducted against defined criteria and will deal
only with the applicant’s suitability for the job. Where it is necessary to ask questions
relating to personal circumstances, these will be related purely to job requirements
and asked to all candidates.
Employment
(a) Hugamug will not discriminate on the basis of sex, race, marital status, disability,
age, part-time or fixed term contract status, sexual orientation or religion in the
allocation of duties between employees employed at any level with comparable job
descriptions.
(b) Hugamug will put in place any reasonable measures and/or adjustments within the
workplace for those employees who become disabled during employment or for
disabled appointees.
(c) All employees will be considered solely on their merits for career development
and promotion with equal opportunities for all.
Training
(a) Employees will be provided with appropriate training regardless of sex, race,
marital status, disability, age, part-time or fixed term contract status, sexual
orientation or religion.
165
(b) All employees will be encouraged to discuss their career prospects and training
needs with their Line Manager or the HR Department.
Grievances and victimisation
(a) Hugamug emphasises that discrimination is unacceptable conduct which may lead
to disciplinary action under the organization’s Disciplinary Procedure.
(b) Any complaints of discrimination will be pursued through the organisation’s
Grievance Procedure.
Appendix J: List of Suppliers
Supplier
Bidvest
Tesco
Welsh Food Box
Brutons the Bakers
166
Appendix K: Floor Plans
167
Front of café
Appendix L: Fridge Layout
168
Appendix M: Ethics Form
169
170
171
172
173
174
175
Appendix N: Participant Information Sheet
Focus group
PARTICIPANT INFORMATION SHEET
To evaluate the feasibility for setting up a unique café in Cardiff
Cardiff Metropolitan University Protocol Number: st20044474
Project summary
The purpose of this research project is to carry out market research to find out
participants views to give the researcher a better chance of setting up of a successful
café in Cardiff. Your participation will help the researcher establish the wants of
potential customers and therefore allow the café to meet these needs.
Why have you been asked to participate?
You have been asked to participate because you fit the profile of the target market the café
will aim at. That is that you are male or female aged over 18 who enjoys a visit to a cafe.
During the focus groups you will be asked about your views on the proposed café ideas, how
often you visit cafés, your spending habits in cafés, views on the best location for the café,
the marketing aspects of the café, views on food and drink and so on.
Your participation is entirely voluntary and you may withdraw at any time.
Project risks
The research involves the participation in a focus group interview and which will be recorded
onto a note pad which will be placed in a safe place for analysis and later destroyed. We are
not seeking to collect any sensitive data on you; this study is only concerned with your views
and opinions which will be used to help the researcher. We do not think that there are any
176
significant risks associated with this study. However, if you do feel that any of the questions
are inappropriate then you can stop at any time. Furthermore, you can change your mind
and withdraw from the study at any time – we will completely respect your decision.
How we protect your privacy
All the information you provide will be held in confidence. We have taken careful steps to
make sure that you cannot be directly identified from the questionnaire forms; there is no
information on these questionnaires that will identify you. Your personal details (e.g.
signature on the consent form) and your questionnaire will be kept in secure locations by
the research team. When we have finished the study and analysed all the information, all
the documentation used to gather the data will be destroyed. The recordings of the focus
groups/ interview will also be held in a secure and confidential environment during the study
and destroyed when it is complete.
YOU WILL BE OFFERED A COPY OF THIS INFORMATION SHEET TO KEEP
If you require any further information about this project then please contact:
Rebecca Howells, Cardiff Metropolitan University CMU email: st20044474@cardiffmet.ac.uk
177
Interview
PARTICIPANT INFORMATION SHEET
Cardiff Metropolitan University Protocol Number: st20044474
Project summary
The purpose of this research project is to carry out market research to gain an insight to
setting up a café to give the researcher a better chance of setting up of a successful
café in Cardiff. Your participation will help the researcher make the most beneficial
decision for setting up the café.
Why have you been asked to participate?
You have been asked to participate because you are the owner of a café and the researcher
feels this will help give an accurate insight into the industry. During the interview you will be
asked about your stock, your products and services, trends in the industry, target market
and promotional techniques.
Your participation is entirely voluntary and you may withdraw at any time.
Project risks
The research involves the participation in an interview and which will be recorded onto a
note pad which will be placed in a safe place for analysis and later destroyed. We are not
seeking to collect any sensitive data on you; this study is only concerned with your views and
opinions which will be used to help the researcher. We do not think that there are any
significant risks associated with this study. However, if you do feel that any of the questions
178
are inappropriate then you can stop at any time. Furthermore, you can change your mind
and withdraw from the study at any time – we will completely respect your decision.
How we protect your privacy
All the information you provide will be held in confidence. We have taken careful steps to
make sure that you cannot be directly identified from the questionnaire forms; there is no
information on these questionnaires that will identify you. Your personal details (e.g.
signature on the consent form) and your questionnaire will be kept in secure locations by
the research team. When we have finished the study and analysed all the information, all
the documentation used to gather the data will be destroyed. The recordings of the focus
groups/ interview will also be held in a secure and confidential environment during the study
and destroyed when it is complete.
YOU WILL BE OFFERED A COPY OF THIS INFORMATION SHEET TO KEEP
If you require any further information about this project then please contact:
Rebecca Howells, Cardiff Metropolitan University CMU email: st20044474@cardiffmet.ac.uk
179
Appendix O: Consent Forms
180
181
Appendix P: Questionnaire
School of Management, Cardiff Metropolitan University
This project has received the approval of Cardiff School of Managements‟ Ethics
Committee, Cardiff Metropolitan University
I understand that my participation in this project will involve completing a

questionnaire about short description of the project aim which will take
approximately 5 minutes of my time.
I understand that participation in this study is entirely voluntary and that I can
withdraw from the study at any time without giving a reason or I can discuss my
concerns with Rebecca Howells st20044474@outlook.cardiffmet.ac.uk.
I understand that any identifying information provided by me will be held

confidentially, such that only Rebecca Howells can trace this information back to me
individually.
I understand that my data will be stored on password protected computers,

anonymised after completion of the survey and that no one will be able to trace my
information back to me. The raw data will be retained for up to three years when it
will be deleted/destroyed.
If you are 18 years of age or over, understand the statement above and freely
consent to participate in this study please tick the consent box to proceed.
 Consent box
Thank you very much for helping us with this project
and participating in the research
182
There is a proposal to open a new Café in Cardiff City. This questionnaire is

designed to carry out market research to find out your views so I can meet your
wants and needs. Your time filling out this questionnaire is greatly appreciated.
All information will be treated confidentially.
Please tick or circle the appropriate box, which applies to you-
1. Gender
Male [ ] Female [ ]
2. Age
18 – 24 25 – 34 35 – 44 45-64 65+
[] [] [] [] []
3. What is your occupation?
---------------------------------------------------
4. Do you Visit Cafes?
Yes [ ] No [ ]
If so what cafés? And where are they located?
---------------------------------------------------
If not what would attract you to visit one?
---------------------------------------------------
183
5. How often do you visit a Café?
a) Never [ ]
b) Less than once a month [ ]
c) 2-3 times a month [ ]
d) Once a week [ ]
e) 2-3 times a week
f) Daily [ ]
6. Would you be interested in a new Café opening in Cardiff?
Yes [ ] No [ ]
7. Where would you most prefer a Café to open?
a) Cardiff City Centre [ ] b) Bute park area [ ]
c) Cathays / Roath [ ] d) Lisvane area [ ]
8. Which of the following would you like to see in a Café as well as the usual
coffee, tea etc? (Tick as many as applicable)
a) Flavoured tea e.g. chocolate, camomile etc.
b) Flavoured coffees e.g. caramel, ginger bread etc
c) Milkshakes
d) Smoothies
e) Cakes/ Bakes
f) Sandwiches/ Baguettes
g) Pastries
h) Hot food
184
9. a) How much money would you be willing to spend per head on a regular
drink in a café?
£2 or less [ ] £2-£3 [ ] £3-£4 [ ] £4-£5 [ ] £5+
b) How much money would you be willing to spend per head on food in a café?
£3 or less [ ] £3-£4 [ ] £4-£5 [ ] £5-£6 [ ]
£6-£7 [ ] £7-£8 [ ] 8+ [ ]
10. Would a cafe using Fairtrade and Free range products be more appealing to
you?
Yes [ ] No [ ]
11. Where do you find out about the cafes that you visit? (Tick as many as
applicable)
Word of mouth [ ] Work/ University [ ] Local Newspapers [ ]
Social Media [ ] Flyers [ ] Website [ ]
Posters [ ] Billboards [ ]
Other ________________
12. Which name of a Café would you say most appeals to you?
Hugamug Café [ ] My Lazy Sunday’s [ ] Cupcake Break [ ]
Café Creme [ ] Absolutely Fabulous [ ]
185
13. Would you be interested in entertainment such as live music, painting
activities etc?
Yes [ ] No [ ]
14. What time are you most likely/ would like to visit a café? (Tick as many as
applicable)
7am-8am [ ] 8am-10am [ ] 10am-12pm [ ] 12pm-4pm [ ]
4pm-6pm [ ] 6pm or later [ ] Never [ ]
15. What days of the week are you most likely to visit a café? (Tick as many as
applicable)
Monday [ ] Tuesday [ ] Wednesday [ ] Thursday [ ]
Friday [ ] Saturday [ ] Sunday [ ]
Thank you for your time!
Your help is greatly appreciated.
186
Appendix Q: Questionnaire Data Summary Sheet
Questions Answers
Gender
Male 21
Female 59
Age
18-24 41
25-34 30
35-44 5
45-64 4
65+ 0
Occupation
Student 35
Self-employed 3
Hospitality 27
Retail 10
Public Services 5
Do you visit cafes?

Yes 77
No 3
Participants favourite cafes

Didn’t state 3
Independent cafes 39
Costa 24
Starbucks 16
Coffee One 6
Artigiano 2
What would attract you to visit a café?

Cosy 4
Prices 4
Loyalty Schemes 1
Good range of coffee 2
How often do you visit cafes?

Never 1
Less than once a month 6
Once a month 10
2-3 times a month 26
Once a week 16
2-3 times a week 18
Daily 4
187
Would you be interested in a new café opening in Cardiff?

Yes 68
No 12
Where would you most prefer a café to open?

Cardiff City Centre 48
Bute Park area 8
Cathays/ Roath 22
Lisvane area 2
What stock would you like to see in the café?

Flavoured tea 44
Flavoured coffee 64
Milkshakes 63
Smoothies 25
Cakes/ Bakes 59
Sandwiches/ Baguettes 67
Pastries 12
Hot Food 44
How much money would you be willing to spend on a drink?

£2 or less 19
£2-£3 57
£3-£4 4
£4-£5 0
£5+ 0
How much money would you be willing to spend on food?

£3 or less 4
£3-£4 27
£4-£5 25
£5-£6 19
£6-£7 12
£7-£8 1
£8+ 0
Would a café using Fairtrade and free range products appeal

more?
Yes 46
No 34
Where do you find out about the cafes you visit?

Word of mouth 47
Work/ university 10
Local newspaper 2
Social media 37
Flyers 35
188
Website 22
Posters 34
Billboards 0
Other
Walking past 47
Which name of a café most appeals to you?

Hugamug 51
My Lazy Sundays 19
Cupcake Break 9
Café Crème 9
Absolutely Fabulous 2
Would you be interested in entertainment in the café?

Yes
No
What times are you most likely to visit a café?

7am-8am 3
8am-10am 12
10am-12pm 26
12pm-4pm 41
4pm-6pm 20
6pm or later 7
Never 0
What days of the week are you most likely to visit a café?
Monday 46
Tuesday 38
Wednesday 43
Thursday 44
Friday 45
Saturday 68
Sunday 63
189
Appendix R: Focus Group Transcripts
What is currently your favourite café? why?
Group 1
Participant A- “Truly scrumptious my local café because they have nice sandwhiches
and use homemade bread to make them. I like to eat food in cafes that are fresh and
locally sourced”
Particpant B- “Daisy Chain Deli because it has lovely delicatessant chesses, pies,
quiche as well as coffee and tea”
Particpant C- “Sainsburys, I see a lot of the same people there and find it very
sociable, itss also child friendly and convenient for me while taking the kids with me
for a food shop”
Participant D- “Sainsburys because the price is good and they do a lovely latte. It’s
also close to me”
Participant E- “Play ground coffee shop in the centre of Bristol, because it’s a bit
different you get to sit on swings while you drink and eat”
Group 2
Participant A- “Truly Scrumptious Frampton Cotterell because its friendly in there
and not too expensive. I love the variety of food they have too”
Participant B- “Viaduct Coalpit Heath cause it’s local to me and they provide such
good service, they make you feel really welcome. There portion sizes arent stingy
either and it comes quickly”
Participant C- “The deck, in the bay, because of there good selection of food”
190
Participant D- “Cwtch because its just really cute inside like the way its decorated,
they have things like plaques, bunting, flowers. There also really friendly in there and
make it feel homely and is round the corner. It just really shows a welsh café cause its
farmy and by the sea”
Participant E- “Lavender Gardens, cause its cute in there its all decorated in floral
patterns, and they have cream teas which are my favourite. Also everything is served
in laura ashley and cath kidston sort of mugs and plates, I find it peacful”
What aspect attracts you to go to a café? e.g décor, fairtrade, price, atmosphere,
location?
Group 1
Participant A- “Food is my main thing, I like hand made sandwhiches and appreciate
free range eggs and that being used”
Particpant B- “Atmoshphere I like a cosy and social feel and for the décor to be
rustic. I also like a good price I feel like a lot of cafes rip people off these days, I
would be willing to spend a bit more if the food and drinks were amazing but price is
important”
Particpant C- “The way it looks makes a big difference to me and people that are
there if the service is good and the staff make me feel welcome that is the most
important thing to me”
Participant D- “Friendly staff is what makes the difference to me, I don’t believe in
these brand names like café nero and that if the food and drinks are good and the right
price I’ll go back”
191
Participant E- “The décor/atmosphere and price is most important to me, I like to
décor to be like lanterns a bit funky and different. I like to feel chilled, relaxed and
social in a café too”
Group 2
Participant A- “The place has gotta look nicely decorately, kept clean. I don’t usually
travel too far to get to café as well unless say I was going there to do something
already like walk to dogs, I also usually go to cafes if I have heard good things and
the staff are really friendly”
Participant B- “I usually get attracted to go into a café because of the way it looks
and the food that’s on offer, when I’m there the staff make a difference to my visit”
Participant C- “I like a cosy feel to a café and get put off if its too busy, oo I also like
a fireplace I think that makes it cosy”
Participant D- “I usually go to socialise with friends so I like it to have a homely feel
where you can relax”
Participant E- “I really like home made stuff in cafes like home made cakes and
sandwhiches”
What sort of drink and food do you like to have when visiting a café?
Sandwhiches, hot food, cakes? Hot drink or cold drink? Specify?
Group 1
Participant A- “I always get a hot drink and usually go for a coffee and for food I go
for a sandwhich”
192
Particpant B- “I always go for a hot drink usually a coffee and for food I usually
choose between pastries and salads”
Particpant C- “I always get a sandwhiches but really prefer homemade ones, and
then usually a cup of tea and get the kids a juice”
Participant D- “I get a latte or coffee with a cooked breakfast or sandwhich”
Participant E- “Like to have a hot drink like a type of coffee but in the summer
sometimes will go for a smoothie. I go for a sandwhich or panini and a cake as well
like a caramel shortbread or muffin or slice of cake that sort of thing”
Group 2
Participant A- “I prefer to get a cold bottled drink like an oasis or sometimes a fizzy
drink, with a bagguette”
Participant B- “I love a traditional cooked breakfast with a coffee or flavoured latte, I
don’t really like having too much choice like a few fillings of baguettes not to many
like to keep it simple”
Participant C- “I get a tap water, a flavoured coffee and a panini”
Participant D- “I usualy get a cake, sandwhich and Coffee”
Participant E- “Go for home made stuff like home made cakes and sandwhiches and
high tea. A tea pot with tea leaves not bag”
Would you be interested in flavoured coffee and tea? E.g caramel, ginger bread,
chocolate
Group 1
Participant A- “No prefer the original traditional drinks”
193
Particpant B- “Yeah I like the herbal teas and like being able to try different ones
especially around christmas time with the flavoured coffees”
Particpant C- “Yeah flavoured coffee I like, more in the winter time though, not sure
on flavoured teas do like chamomile tea though”
Participant D- “No”
Participant E- “Yeah like caramel lates, like trying new flavours too”
Group 2
Participant A- “Yeah like flavoured coffee but not flavoured tea personally but I do
think they are popular”
Participant B- “Yeah flavoured coffee”
Participant C- “Yeah I like both and my favourites are fruit and camomile tea”
Participant D- “Yeah my favourite flavours are caramel and hazlenut coffee and chai
tea”
Participant E- “No”
Would you be willing to spend more on these types of products?
Group 1
Particpant B- “A little bit like 10/20p no more though”
Participant C- “Yeah definitely between 40p and 50p”
Participant E- “Yes but only by 10-20p”
Group 2
Participant A- “Yeah definitely between 50p and 60p no more than a pound”
194
Participant B- “Yeah definitely between 50p and 60p no more than a pound”
Participant C- “Yeah up to £1”
Participant D- “Yeah 50p max though”
How important is Fairtrade and free range products being used in a café to you?
And would you be willing to spend more knowing they are? How much more?
Group 1
Participant A- “Quite important it and I’d willing to spend more if it goes to those
causes because I like to choose fair trade over normal products even if it’s a bit more
expensive”
Particpant B-“Fair trade is important to me because I hate that disadvantaged people
can be taken advantaged of but also free range too. I’d be willing to spend more by
20p”
Particpant C- “I like to see it and think it should be most places these days”
Participant D- “Free range yeah depends on price difference though I’d pay up to
30p”
Participant E-“Free range is important to me as it makes me feeling better about
eating the food”
Group 2
Participant A- I don’t go out looking for it but I expect it these days but free range is
much more important to me, would pay around an extra 20p for it”
Participant B- “Free range I really think should be used am aware of the logo on fair
trade though, also depends on price difference I’d pay up to about 20p”
195
Participant C- “Honestly not that important. Would appreciate free range more than
fair trade though and I’d be willing to spend more on free range but not fair trade”
Participant D- “Free range is important to me but not fair trade and I’d be willing to
spend about a £1 more if new that it was free range”
Participant E- “Not bothered if I’m honest”
How much would you would want to pay for a coffee? Latte? Cappachino? Tea?
Sandwich? cake? Milkshake? Smoothie?
Group 1
Participant A- “A Coffee- £2.50, sandwhich-£4 but the fillings vary this and a pot of
tea for 1 £1.40”
Particpant B- “A Coffee- no more than £2, a latte/ cappachino no more than £2.50, a
Pot of tea for 1- £1.50, a sandwhich £3.50 and I’d pay £1.50 for a big slice of carrot
cake. I think that cafes are often verpriced these days so a good price is important to
me”
Particpant C- “Coffee- £1.50, latte £2.50, cup of Tea £1 and a £2.30 for a sandwhich
with one or two fillings like ham or egg”
Participant D- “Coffee- £1.50, latte £2.50 and on a cooked breakfast I’d spend up to
£5”
Participant E- “Coffee- £2.30, latte £2.70, tea £2, sandwhich £3-4 and a cake 80p to
£1.50 depending on the cake”
196
Group 2
Participant A- “Coffee £1.50-£2, latte £2.50-£3, tea £1 and a egg, bacon and sausage
sandwhich I’d pay up to 4 pound”
Participant B- “Coffee- £1.50-£2, latte £2.50-£3, tea £1 and I’d pay up to £3 for a
bacon sandwhich”
Participant C- “Coffee £2, latte or cappachino about £2.20, tea £2, a cold sandwhich
£2.60, a panini up to £3.20, a cake £1.20 and for milkshakes and smoothies £2.50”
Participant D- “Coffee £2.70/80, flavoured coffee £3.20/30, a sandhwich £3 and a
slice of carrot cake around £2.50 “
Participant E- “I like to get something called high tea which is 3 pots of tea,
sandwhiches and cakes on 3 tier for £20 for tea alone I’d pay £1.80-£2, sandwhich
£3.50 and a cake £2.50- £3”
Do you prefer city based cafés or rural based cafes? Why is that?
Group 1
Participant A- “I prefer more rural based cause I don’t like cities cause its to busy
and I find that rural based cafes are more relaxing and quiter”
Particpant B- “I like rural based cafés because I like the country atmosphere”
Particpant C- “I prefer rural based cafes because they are often more scenic and have
more friendly staff. I like family run businesses”
Participant D- “Rural based cafes cause I always find that they offer homemade
sandwhiches in rural areas compared to city based big cafes”
197
Participant E- “I like city based cafes because you can find some quirky different
cafes and I also usually visit cafes while I’m out doing something”
Group 2
Participant A- “I like rural cafes because there’s too many cafes to choose from in a
city and I find they can get too busy”
Participant B- “I like family run quiter cafes with friendly staff, I don’t mind where
they are but the staff need to be welcoming”
Participant C- “Rural based cafes, I find them more relaxing and theres not so many
chains around. Staff tend to be more welcoming in rural cafes too cause they’re less
busy”
Participant D- “I’m impartial, I don’t careif there is a café I like the look of in the
middle of town id go there, but I wouldn’t travel ages to get to one”
Participant E- “Rural I live local to rural places and find they are cuter”
What is the most popular time and days of the week for you to visit a café? why
do you think that is?
Group 1
Participant A- “Sunday, I combine it with something else I do that day like go to a
garden centre or somethin and this is when I’m free to do these things”
Particpant B- “Lunchtime around 1pm and I tend to go in the week over weekend
cause its less busy”
Particpant C- “Weekends its when I have the most spare time and a time I have off
with my husband so we can go together then”
198
Participant D- “Weekends it’s when I’m off work and have more time and same with
my friends”
Participant E- “I go on the weekdays probably around 4ish and then the weekends
too around the morning/ lunchtime time so about between 10-2pm”
Group 2
Participant A-“I mostly go on a Sunday morning because I have most free time then
and its something to do to fill the time”
Participant B- “Sunday because I’m always mostly free then and I see it as my
relaxing day”
Participant C- “Any day really because sometimes I like to go on the weekends and
sometimes I like to go on my break during work”
Participant D- “Saturday or Sunday usually around 11am/12pm depending on when
my friends can go”
Participant E- “A weekday when the kids are at school between 12 and 3”
What promotional offers most catch your eye and appeal to you?
Group 1
Participant A- “Buy a sandwhich get a coffee half price”
Particpant B- “Buy one get one free those sorts of offers”
Particpant C- “a meal deal like a sandwhich, drink and snack like crisps or a cake”
Participant D- “I like a free drink with your meal”
199
Participant E- “I like a loyalty card where you buy a certain amount of coffees and
get one free and a meal deal so like a cake, drink and sandwhich for a certain amount
that’s cheaper then buying them all singly”
Group 2
Participant A- “I really like when a café does student discount cause you don’t see it
often or a deli of the day”
Participant B- “ a free coffee or tea with breakfast is good”
Participant C- “A meal deal like a sandwhich and a drink”
Participant D- “ I like a loyalty card where if you buy ten you get a free one”
Participant E- “For me buy 1 get one free and loyalty cards are my favourite”
If you could add a new feature to a café what would it be?
Group 1
Participant A- “I can’t think of one but I enjoy it more when people bring drink and
food to table instead of waiting for it stood up for it like some new cafés do”
Particpant B- “Nice sparkly lights like fairy lights”
Particpant C-“More options for children”
Participant D- “Loyalty cards”
Participant E- “To have more unique cafes around like make the décor a bit
different”
Group 2
Participant A- “Loyalty cards I think all cafes should have them”
200
Participant C- “I love the idea of having a fire place in café”
Participant D- “I love it when a café is a bit different like when I went to idea there
was a chandaleer made of teaspoons and plates and it really caught my eye like I like
little touches like that”
Participant E- “I like to always have fresh flowers on the table and a pot of sugar
lumps with a spoon too”
An idea of setting up entertainment at the café has been thought of for example
live music on mondays, painting on Wednesdays and so on. What do you think of
this idea? Would it interest you?
Group 1
Participant A- “It would interest me actually I think that’s a good idea although I
probably wouldn’t get involved with the painting myself but I would enjoy the live
music definitely”
Particpant B- “I think that’s such a good idea, back in the day when had young
children I would have loved to take them to somewhere like that”
Particpant C- “personally not my thing”
Participant D- “I reckon people would really like that but I think the music would
have to be quiet background music”
Participant E- “I think that’s a really good idea. It would would be nice to able to try
something new and I would really like the live music but would prefer it to be
acoustic music”
201
Group 2
Participant A- “personally it wouldn’t be my thing”
Participant B- “Yeah that would interest me, maybe a film day would be nice too but
maybe keep it separate to other people who don’t want to get involved”
Participant C- “Yeah like it would interest me to go there, you could also always add
a vintage fair too and owning my own vintage clothing line I’d definitely be up for
that”
Participant D- “No wouldn’t particulary interest me”
Participant E- “No cause I usually go to a café to relax but I reckon board games
would be good to have”
202
Appendix S: Focus Group Advert
203
Appendix T: Interview transcript
Interview with Frome Valley Farm shop
What are your main methods of acquiring stock?
We own a farm so we produce all of the meat sold in the café and also the eggs. The
rest of the stock we buy like beans, salt and pepper we get from Makro the
wholesalers and I think personally that’s the best way because they sell items in bulk.
How often on average do you replenish your stock?
It depends, for the fresh stuff we use like milk and tomatoes we buy that weekly but
for stock like beans we try to buy enough to re-stock every two months.
Do you buy your stock in bulk?
We buy the dry store food in bulk to last for about two months but if it isn’t used we
won’t buy it again. We stock the café as needed instead of buying everything every
time in bulk because even though it takes more time it stops the café from wasting
food and money.
How do you monitor your stock?
We have two separate stock lists for the café, one for the fresh stock and a second for
the dry stock. Then every week I do a stock check of what we have and what we need
using the list. It actually also helps me see what is in demand in the café and what is
in less demand which is helpful.
What drink and food products are in most demand in the café?
Drink wise definitely tea and coffee are what is sold most which is good for me
because we make a lot of profit from selling tea and coffee. A lot of people like to go
204
for lattes, cappuccinos and flavoured coffees too actually. Food wise I’d say the
breakfast is really popular and sandwiches too I think they’re definitely the most sold
out of food.
Have you noticed any trends and changes in what people want to buy when they
come to the café?
Actually I have noticed that people are liking a good range of food and drink. Since
starting the café we’ve expanded our menu a lot and from speaking to friends and
family that come to the café it’s been appreciated.
What is your main target market?
We have a range of ages and people visiting the café however, there are often more
female and families.
What promotional techniques do you use and which ones do you find more
effective for the café?
I think most of our customers visit the café from driving past and being recommended
by friends and family. Being on a busy road next to different little villages has really
helped the café grow and bring in regular customers. I’ve been told a lot when talking
to customers that they had been recommended by a friend or family member to visit
and that they are happy they did so I think word of mouth is a big one. We’ve also
been putting an ad in the local newspaper that is delivered to people’s houses for years
now and we noticed an increase in customers after doing that. We’ve also got our
website but I think that’s just more useful for giving people information about us
although I definitely would always have it. I think personally that the Facebook page
we set up gains more attention because in recent years it’s really got more attention
205
with people liking and sharing our posts. Ooo we also do loyalty cards which is a big
one cause you see all of the stamps from returning customers which is good.
What are the busiest days of the week for the café?
Definitely the weekends
What are the busiest times of day for the café?
I’d say between 11 and 2 we usually get a lot of people coming in for food then.
Are there any trends in when the café is busy and when it is quieter?
Yes there are actually in the holidays like Christmas, Easter and summer we get a lot
more families with their kids coming to the café. Also occasions like Mother’s day,
Father’s day and Easter weekend times like that we get a lot more customers.
206
Appendix U: Analysed Questionnaire Results
Graph 1: Gender
Participant Gender
60
50
40
59
30
20
21
10
0
Male Female
From the chart above it can be seen that 59 out of the 80 respondents were female in
comparison to the 21 males. The questionnaire was sent out to an equal amount of
men and women and therefore this could suggest that the idea of a café appeals more
to women than it does men. This coincides with the research found in the literature
review that families, and women in particular, use coffee shops for social gatherings
and with female independence and spending power is on the rise (Thomas, 2014), this
provides feasibility to the café. This is also a good target market for Cardiff as there
are approximately 7,000 more females in Cardiff than men (Cardiff Research Centre,
2013).
207
Graph 2: Age
Age of Participants
45
40
35
30
25
41
20
30
15
10
5 5 4
0
0
18-24 25-34 35-44 45-64 65+
This category is important to the business plan in order to identify a target audience
for the business. As cafés can appeal to most ages the age ranged from 18-65+. 41 of
the respondents where aged 18-24 and the second most popular age was 25-34 with
30 respondents being in that age range. The questionnaire was put on online food
pages therefore available for all ages. Therefore, this could suggest that the idea of a
café being set up in Cardiff appeals mostly to the age range 18-34. This would
coincide with research found in the literature review with 40% of people aged 18-to-
24 drinking coffee daily, while 54% of people aged 25-to-39 indulge in a daily cup
(Wagner, 2015). This is also a good target market for Cardiff as women aged 20-24
are the largest population in Cardiff with women aged 24-29 being second and
women aged 30-34 being third (Cardiff Research Centre, 2013).
208
Graph 3: Occupation
Occupation of Participants
35
30
25
20
35
15 27
10
10
5
5
3
0
Student Self Employed Hospitality Retail Public Services
When carrying out this research 35 out of 80 respondents were students. The second
most popular occupation was within the hospitality industry with 27 respondents
working in that area and then followed by the retail industry. With these figures
between being a student and working being very close the author cannot draw any
conclusions from this data. However students make up 20% of Cardiff population and
spend £1.3bn in the City (Henry, 2013), so they are not a market to be ignored.
209
Graph 4: Participants that already visit Cafes
Do you visit cafes?
80
70
60
50
77
40
30
20
10
3
0
Yes No
As shown in the graph above the majority of respondents already visit cafes. This
could suggest that there is a strong market for “Hugamug” and consequently gives the
business feasibility. This also supports the research found in the literature review that
more people are using cafés or coffee shops in 2015 than in 2014 with coffee shop
usage on the rise (Mintel, 2015). Although 3 people answered no this is a very low
number and they would have had interest in the Café to take part in the questionnaire.
The questions further on in the primary research may find what could be offered to
gain the potential 3 customers.
210
Graph 5: Participants Favourite Cafés
Names of the participants favourite cafes
40
Number of cafes stated
35
30
25
20 39
15
24
10 16
5 6
3 2
0
Didn't state Independent Costa Starbucks Coffee one Artigiano
Cafes
As shown in the graph above the participants cafes that they visited were mostly local
independent cafes. This suggests feasibility for “Hugamug” as it shows the demand
for independent cafes. Their reasons for this trend will be looked into more in the
focus groups. This also supports research found that the top ten coffee shops in
Cardiff as voted by consumers are all currently independent coffee shops (Scott,
2015). The second most visited café was Costa followed by Starbucks this could
suggests competition for the café however as “Hugamug” will be too small to
compete with these firms a SWOT Analysis of its independent competitors will be
carried out to ensure “Hugamug” is offering a competitive level of products and
services to gain market share.
211
Graph 6: What would attract someone who doesn’t visit cafes to go
If not what would attract you to visit one?
3
2.5
3 3
1.5
2
1
1
0.5
0
Cosy Prices Loyalty Schemes Good range of
coffee
This question was asked to see how the café could attract potential new customers
who don’t currently visit other cafés. The results showed that the three participants
that answered no to currently visiting cafes would be interested in visiting cafes if
they offered a good range of coffee and the café was cosy and had good prices. One
participant wanted better loyalty schemes. These are all aspects that the business
creator was interested in incorporated into “Hugamug” and this has evidenced that
this would be a good idea in order to attract new customers.
212
Graph 7: Regularity of visits to existing Cafes
How often do you visit a cafe?
30
25
20
15
26
10 18
16
5 10
6
4
1
0
Never Less than Once a 2-3 times a Once a 2-3 times a Daily
once a month month week week
month
As shown in the graph most participants visit cafes 2-3 times a month. Shortly behind
that was 2-3 times a week then followed by once a month. This shows that the
participants frequently visit cafes and this gives the author confidence that a café
opening could be popular and have frequent visitors. This may also give the author an
idea of the amount of revenue “Hugamug” may generate.
213
Graph 8: Suggestion of a new store
Would you be interested in a new cafe opening in Cardiff?
70
60
50
40 68
30
20
10 12
0
Yes No
From looking at the results 81% of participants were interested in a new café opening
in Cardiff. This is good for the author as it suggests that there will be people
interested in visiting the café and consequently spending money. From asking
participants what their favourite cafes were it was shown that some participants were
not from Cardiff therefore this could be an explanation for the 12 that answered no as
it would not be relevant to them. The data found here relates back to what was found
in the literature review that: Britain's coffee shop sector remains one of the most
successful in the UK economy and will continue to expand, accounting for sales of
£1.5 billion in 2013 (Thomas, 2014). Together this information provides evidence that
there is a demand for a new café to open like “Hugamug”.
214
Graph 9: Location of store
Where would you most prefer a cafe to open in Cardiff?
50
45
40
35
30
25 48
20
15
22
10
5 8
2
0
Cardiff City Centre Bute Park area Cathays/ Roath Lisvane area
Axis Title
The graph shows that over 50% of the participants would like the café to open in
Cardiff City Centre. Cathays/ Roath area was the second most popular with 22
participants wanting the café in that area. Cardiff City Centre provides large shopping
facilities and therefore, this fits the research found that people like to visit cafes while
shopping. The author has therefore taking this primary research into consideration
when deciding the location of the café.
215
Graph 10: Products in Demand
Which of the following would you like to see in the cafe as

well as the usual coffee, tea etc?
70
60
50
40
64 63 67
30 59
44 44
20
25
10 12
0
From the graph above the results show that the most popular items to be stocked in
the café were sandwiches/ baguettes, Milkshakes, cakes and flavoured coffees. This is
important for the author to take these views on the cafes products into consideration to
tailor the café to customer’s wants and needs. As mentioned in the literature review
food menu expansion has been a key trend in terms of innovation in the coffee shop
market (Childe, 2014) and, therefore, although flavoured teas and hot food were of
interest to a lower percentage of participants the author will still incorporate them into
“Hugamug’s” menu. Pastries and smoothies also got a lower interest but this will still
be possible stock for the future of “Hugamug” café because there is an interest there.
216
Graph 11: Drink prices

on a regular sized drink in a cafe?
60
50
40
30 57
20
10 19
4
0 0
0
£2 or less £2-£3 £3-£4 £4-£5 £5+
Just under 75% of the participants said that they would be willing to spend between
£2-£3 on a regular sized drink in a café. Just under 25% of the participants said that
they would be willing to spend £2 or less and 4 participants £3-£4. These results show
that the prices of drinks in the café should be kept in between £2 or less-£3 to attract
customers.
217
Graph 12: Food prices

on food in a cafe?
30
25
20
15 27
25
10 19
12
5
4
1 0
0
£3 or less £3-£4 £4-£5 £5-£6 £6-£7 £7-£8 £8+
25 participants out of 80 said they would be willing to spend between £3-£4 and £4-
£5. 19 participants also said they were willing to spend between £5-£6 and 12
participants £6-£7. These results will be taking into consideration and the prices per
head on food will be between £3-£6.
218
Graph 13: Free range and Fairtrade product consideration
Would a cafe using Fairtrade and Free range products be

more appealing to you?
50
45
40
35
30
46
25
20 34
15
10
5
0
Yes No
As shown in the graph 46 respondents said Fairtrade and Free range products being
used in a café was important to them. A close number of 34 said that it wasn’t
important to them. However, at least 71% of consumers have bought free range
products, an increase on how many have bought Fairtrade products (Ford, 2015). This
could suggest that free range products are more important to consumers.
219
Graph 14: Promotion
Where do you find out about the cafes that you visit?
80
70
60
50
40 71
30 61
51 46
20
22
10
10
2 0
0
As shown in the graph above word of mouth was the most popular way people find
out about cafes followed by social media. Hose (2016) says, promotion is one of the
necessities for getting your brand in front of the public and interesting new customers,
therefore promotion is a very important aspect and the author will take the participants
views, who will be potential customers, on board. Therefore, after looking at this data
it has been decided that “Hugamug” will use social media, flyers and posters in order
to help start create word of mouth. A website will also be set up for the café.
220
Graph 15: Other promotions
Are there any other ways you find out about cafes?
50
45
40
35
30 47
25
20
15
10
5
0
Walking past
As shown in the graph 47 participants said that they found out about cafes from
walking past them. Therefore it is important to make sure the café is noticeable from
the outside in order to attract customers in. Mealey (2015), says that the outside/ entry
area is very important as it is the first area that customers see. Having a professional
sign, adequate lighting such as Fairy lights, a sandwich board on the side walk and
outdoor seating are all important aspects that can attract customers to visit your café
(Mealey, 2015). This data has helped decide some promotional décor “Hugamug” will
use. This result has also helped justify Cardiff City centre as the location for the café,
as the busier the area, the more attention the café will get.
221
Graph 16: Name
Which name of a cafe would you say most appeals to you?
60
50
40
30
51
20
10 19
9 9
2
0
Huggamug Café My Lazy Sunday's Cupcake Break Café Crème Absolutely
Fabulous
As shown in the graph above the most popular name for participants was “Hugamug”
with this being the choice for 51 participants out of 80. The second most popular
choice was My Lazy Sunday’s. “Hugamug” was therefore decided to be the name of
the café with “My Lazy Sunday’s” being the second choice of name if “Hugamug”
was not available. “Hugamug” being the most popular name in the participant’s views
will also hopefully attract the cafes target audience.
222
Graph 17: Activities in the café
Would you be interested in entertainment such as live

music, painting activities etc?
60
50
40
30 53
20
23
10
0
Yes No
The author had an idea of there being activities in the café such as the chance to paint,
live music, books to read and so on. This author wanted the participants’ views on this
and from the results showed above 53 participants were interested in this idea.
Therefore, this idea will be taken into consideration when setting up the café.
223
Graph 18: Trading Hours
What time are you most likely/ would like to visit a cafe?
45
40
35
30
25
41
20
15 26
10 20
12
5 7
3
0 0
7am-8am 8am-10am 10am-12pm 12pm-4pm 4pm-6pm 6pm or later Never
As shown in the results above 12pm-4pm was the most popular time that the
participants visited cafes. 10am-12pm was also popular followed by 4pm-6pm. As
only 3 people said they visited cafés between 7am-8am, 7 visited cafes 6pm or later
and 12 visited cafes 8am-10am the café will not being open in these hours. A late
night café was an idea from the author however the results show the demand is not
strong enough for this to happen straight away. Overall, this data has helped come to
the conclusion the café will be open 10am-6pm.
224
Graph 19: Trading Days
What days of the week are you most likely to visit a cafe?
70
60
50
40
68
63
30
46 43 44 45
20 38
10
0 0
All of the days where regularly visited by the results of the participants with the
weekends being more popular. This data has helped the author decide that the café
will definitely be open on both days of the weekend.
225
Appendix V: Email with musician
226
Appendix W: Social Media sites
Facebook
Twitter
227
Instagram
228
Appendix X: Flyer and Loyalty Card
Flyer
Loyalty Card
229
Appendix Y: Website
Appendix Z: Advertising Costs
Advert Cost Supplier

Performer £20 Amy Sloman
Free samples of food and 200 coffee tasters = £1.20
drink Milk (Approximately 5ml to
go with each taster) -£0.10
50 shortbreads, 50 Victoria
sponges, 50 flapjacks (tasters
will be 1/4 the normal size) –
Shortbread- £1.75
Victoria sponge- £6.88
Flapjack- £1.63
100 strawberry milkshake
tasters (50ml each)= £4.88
= £16.44
Posters A2 25 for £55 Instant print
Flyers 250 A5 for £20.99 Vista Print
Loyalty Cards 500 for £25.49 Vista Print
Website 3.25 per month Weebly
Food board £14.11 Ebay
Logo £11.40 Vista Print
230
Appendix Z. A: Ingredient/ Cost of Production List
Drinks
Product Ingredients Cost Quantity Total Cost

Pot of Tea Tea bag £0.01 1
Milk £0.05 50ml
Hot water
£0.06

Pot of Decaf Tea bag £0.03 1
Tea
Milk £0.05 50ml
Hot water
£0.08

Tea Pigs
Chamomile Tea bag £0.22 1
Flowers
Hot water
£0.22
Super Fruit Tea bag £0.23 1
Hot water
£0.23
Chai Tea Tea bag £0.21 1
Hot water
£0.21
Mao Feng Tea bag £0.21 1
green
Hot water £0.21
Peppermint Tea bag £0.20 1

leaves
Hot water
£0.20
Chocolate Tea bag £0.26 1
flake
Hot water
£0.26
231

coffee Coffee £0.06 8 grams
Milk £0.05 50ml
Hot water
£0.11

expresso Coffee £0.06 8 grams
£0.06

double Coffee £0.12 16 grams
expresso
£0.12

Mocha Coffee £0.06 8 grams
Hot chocolate £0.40 6 grams
Milk £0.22 230ml
£0.68

Latte Coffee £0.06 8 grams
Milk £0.22 230ml
£0.28

Cappuccino Coffee £0.06 8 grams
Milk £0.22 230ml
£0.28

Hot chocolate Hot Chocolate £0.79 11 grams
Milk £0.22 230ml
£1.01
232

Iced Coffee £0.06 8 grams
americano
Milk £0.05 50ml
Water
Ice £0.01 5 cubes
£0.11

Iced latte Coffee £0.06 8 grams
Milk £0.22 230ml
Ice £0.01 5 cubes
£0.28

Iced Mocha Coffee £0.06 8 grams
Hot chocolate £0.40 6 grams
Milk £0.22 230ml
Ice £0.01 5 cubes
£0.69

Marshmallows Marshmallows £0.14 5 large
and Cream marshmallows
(42g)
£0.14
Cream £0.07 12.5g
£0.07

Flavoured Syrup £0.08 12ml
syrups
£0.08
233

Milkshakes Crusha £0.08 25ml
chocolate syrup
Chocolate Milk £0.12 400ml
Ice cream £0.19 2/3 of cup
£0.39
Banana Crusha banana £0.08 25ml
syrup
Milk £0.12 400ml
£0.39
Strawberry Crusha £0.08 25ml
strawberry
syrup
Milk £0.12 400ml
£0.39
Vanilla Vanilla extract £0.12 3ml
Milk £0.12 400ml
£0.43
Caramel Caramel syrup £0.08 12ml
Milk £0.12 400ml
£0.39
Cookie Crusha £0.39 25ml
chocolate syrup
Cookie £0.46 1
Milk £0.12 400ml
£0.77

Cans
Coke £0.40 1 can 330ml £0.40
Diet coke £0.40 1 can 330ml £0.40
7up £0.31 1 can 330ml £0.31
234

Fruit juices
Orange £0.54 400ml £0.54
Apple £0.30 400ml £0.30
Cranberry £0.41 400ml £0.41
Tropical £0.30 400ml £0.30
Mango £0.31 400ml £0.31
Pineapple £0.31 400ml £0.31
Cakes

Victoria Cake
sponge (whole
cake that
serves 10)
Caster sugar £0.31 200g
Butter £1.08 200g
Eggs £0.64 4
Self-raising flour £1.60 200g
Baking powder £0.05 1 tsp (5g)
Milk £0.03 2tbsp (30ml)
Topping/ filling
Butter £0.54 100g
Icing sugar £0.76 140g
Vanilla extract
Strawberry jam £0.49 170g
£5.50
£0.55 per
slice
235

Chocolate Cake
fudge cake
(whole cake
that serves 10)
Self-raising £1.20 175g
flour
Cocoa powder £0.34 2 tbsp (30g)
Baking powder £0.05 1 tbsp (15g)
Eggs £0.32 2
Sunflower oil £0.18 150ml
Milk £0.06 150ml
Golden syrup £0.04 2 tbsp (30ml)
Topping/ filling
Unsalted butter £0.41 75g
Cocoa powder £0.51 3 tbsp (45g)
Drop of milk
£3.66
£0.37 per
slice

Coffee cake Cake
(whole cake
that serves 10)
Unsalted butter £1.35
Caster sugar £0.39
Eggs £0.64
Expresso coffee £0.12
Self-raising flour £2.00
Walnuts £1.84
Topping
Unsalted butter £0.68
Icing sugar £0.36
Expresso coffee £0.12
Walnut halves £0.37
£7.87
£0.79 per
slice
236

Lemon drizzle Cake
cake (whole
cake that
serves 10)
Unsalted butter £1.35 225g
Eggs £0.64 4
Zest of lemon £0.30 1
Topping
Juice of lemon £0.45 1½
£5.30
£0.53 to
make slice

Fairy cakes Cake
(makes 14
cakes)
Butter £1.08 200g
Eggs £0.64 4
Baking powder £0.05 1 tsp (5g)
Milk £0.03 2tbsp (30ml)
Topping
Edible roses on £0.08
7 cakes
Sprinkles on 7 £0.07
cakes
£4.70
£0.34 per
cake
237

Flapjack Porridge oats £0.35 £250g
(serves 10)
Butter £0.68 125g
Sugar £0.20 125g
Golden syrup £0.04 2-3tbsp (30g)
£1.27
£0.13 per
serving

Shortbread Plain flour £0.80 100g
(serves 10)
Butter £0.54 100g
£1.42
£0.14 per
serving

Chocolate Shortbread
caramel
shortbread
(serves 10)
Plain flour £0.80 100g
Butter £0.54 100g
Caramel
Condensed milk £1.21 387 g
Golden syrup £0.02 Tbsp (15g)
Butter £0.64 120g
Topping
Chocolate £0.22 100g
£4.01
£0.40 per
serving
238
Meals

The Hugamug Bacon £1.55 2 pieces
special
Sausage £1.16 2
Mushroom £0.11 44g
Tomato on the £0.56 4
vine
Baked beans £0.06 100g
Egg £0.32 2
Hash brown £0.11 45g
Buttered toast £0.09 2
£3.96

The mini Bacon £1.55 2 pieces
Hugamug
special
Sausage £0.58 1
Mushroom £0.11 44g
vine
Egg £0.16 1
£3.18
239
Product Ingredients Cost Quantity Total cost

Veggie Vegetarian £0.66 2
Hugamug Sausage
breakfast
Mushroom £0.11 44g
vine
Egg £0.32 2
£1.91

Scrambled Toast £0.09 2
egg on toast
Egg £0.32 2
Dash of milk
£0.41

Toast with
choice of
spread
Strawberry £0.18
jam
Toast £0.09 2
£0.27
Peanut butter
Toast £0.09 2
£0.18
Tiptree £0.18
orange
marmalade
Toast £0.09 2
£0.27
Marmite £0.24
Toast £0.09 2
£0.33
Nutella £0.16
Toast £0.09 2
£0.25
240

Sausage and
bacon
Sandwich Bacon £1.55 2 pieces
Sausage £1.16 2
Bread £0.09 2
£2.06
Baguette Bacon £1.55 2 pieces
Sausage £1.16 2
Baguette £0.20 1
£2.17

Sausage
Sandwich Sausage £1.16 2
Bread £0.09 2
£1.25
Baguette Sausage £1.16 2
Baguette £0.20 1
£1.36

Bacon
Bread £0.09 2
£1.64
Baguette £0.20 1
£1.75

Extra egg Egg £0.16 1
£0.16
To go with
each
sandwich/
baguette
Salad Lettuce £0.04
Tomato £0.14 1
Cucumber £0.04
Crisps £0.12
£0.34
241

Tuna
Sandwich Tuna £0.52 100g
Mayonnaise £0.07 2 tbsp (30ml)
Bread £0.09 2
£0.68
Baguette Tuna £0.52 100g
Mayonnaise £0.07 2 tbsp (30ml)
Baguette £0.20 1
£0.79

BLT
Lettuce £0.05 4 slices
Tomatoes £0.56 4 sliced
Bread £0.09 2
£2.25
Tomatoes £0.56 4 sliced
Baguette £0.20 1
£2.36

Sweet chilli
chicken
Sandwich Chicken £1.00 100g
Tomatoes £0.28 2
Sweet chilli £0.15 30ml
sauce
Bread £0.09 2
£1.57
Baguette Chicken £1.00 100g
Tomatoes £0.28 2
Sweet chilli £0.15 30ml
sauce
Baguette £0.20 1
£1.68
242

Chicken tikka
Tikka paste £0.23 30ml
Mayonnaise £0.07 30ml
Bread £0.09 2
£1.39
Tikka paste £0.23 30ml
Mayonnaise £0.07 30ml
Baguette £0.20 1
£1.50

Coronation
Coronation £0.15 60ml
Mayonnaise
Bread £0.09 2
£1.24
Coronation £0.15 60ml
Mayonnaise
Baguette £0.20 1
£1.35

Bacon, brie
and cranberry
Brie £0.32 5 slices
Cranberry £0.14 30g
Bread £0.09 2
£2.10
Brie £0.32 5 slices
Cranberry £0.14 30g
Baguette £0.20 1
£2.21
243

Prawn Marie
Sandwich Prawns £0.93 100g
Marie rose sauce
Mayonnaise 70ml
Tomato ketchup 1/3 tbsp
Lemon juice Dash
Salt and pepper £0.21
Bread £0.09 2
£1.23
Baguette Prawns £0.93 100g
Marie rose sauce
Mayonnaise 70ml
Tomato ketchup 1/3 tbsp
Lemon juice Dash
Salt and pepper £0.21
Baguette £0.20 1
£1.34

Roasted red
pepper and
hummus
Sandwich Red pepper £0.30 56g
hummus
Avocado £1.53 1
Feta £0.40 28g
Bread £0.09 2
£2.33
Baguette Red pepper £0.30 56g
hummus
Avocado £1.53 1
Feta £0.40 28g
Baguette £0.20 1
£2.43
244
Appendix Z. B: Price List
Product Price
Pot of tea £1.80
Tea pigs £1.95
Coffee £2.00
Expresso £1.60
Expresso double £1.90
Mocha £2.50
Latte £2.45
Cappuccino £2.45
Hot choc £2.50
Iced Americano £2
Iced Latte £2.45
Iced Mocha £2.80
Marshmallows 25p
Cream 25p
Syrups 30p
Milkshakes £2.45
Cans 80p
Fruit Juices £1.40
Slice of cake £2
Fairy cake £1
Squares
Shortbread £1.35
Flapjack £1.35
Chocolate caramel shortbread £1.55
The Hugamug special £5.95
Mini Hugamug special £4.95
Veggie Hugamug breakfast £4.95
Scrambled egg on toast £3.45
Buttered toast £1.50
Sausage & bacon £4.15
245
Sausage Sandwich £3.25 Baguette £3.50

Bacon Sandwich £3 Baguette £3.25
Extra egg 50p
Tuna Sandwich £3 Baguette £3.25
BLT Sandwich £3.50 Baguette £3.75
Sweet chilli chicken Sandwich £3.50 Baguette £3.75
Chicken Tikka Sandwich £3.50 Baguette £3.75
Coronation chicken Sandwich £3.50 Baguette £3.75
Bacon, Brie & Cranberry Sandwich £3.50 Baguette £3.75
Prawn Marie Rose Sandwich £3.50 Baguette £3.75
Roasted red pepper hummus, avocado Sandwich £3.50 Baguette £3.75
and feta
Appendix Z. C: Insurance Quote
246
Appendix Z. D: Job Contract
Example of Job Contract
Adapted from Human Resources Solutions (2016)
Hugamug
35 Morgan Arcade, Cardiff,
CF10 1AF
Telephone No: 07787404028
Date: xx/xx/xxxx
CONFIDENTIAL
«Name1»
«Address1»
«Address2»
«Town» «Postcode»
Dear «Name2
PRINCIPAL STATEMENT OF TERMS AND CONDITIONS
I am pleased to confirm your appointment as «Posttitle» with Hugamug This document
outlines the Terms and Conditions which apply to your contract and other information
which is relevant to your employment.
1. The commencement date of this contract is «xx/xx/xxxx».
2. Your date of commencement of continuous service with Hugamug or its

subsidiaries is «xx/xx/xxxx».
3. Your base will be 35 Morgan Arcade, however the Company reserves the right,
with appropriate consultation with you, to change your base should the needs of
the Company require this.
247
4. Your working hours will be «Hours» per week. The Company may require you to
vary the pattern of your working hours if required on a temporary or permanent
basis should the needs of the post require this. Overtime payments are made in
line with the Company Remuneration Policy.
5. You will be subject to the terms and conditions as agreed and amended from time
to time by the Company as outlined in its policies, procedures, handbooks and
other relevant documents.
6. The pay grade for this post is «Grade» and the current salary scale is £«Scale1» .
This will be reviewed annually. You are also eligible for individual / team
performance bonuses as outlined in the Company Remuneration Policy.
7. If the Company makes an overpayment to you to which you are not entitled, or is
more than that to which you are entitled, you agree to allow the Company to
recover the overpayment by deductions from your salary or other payments due to
you. Any deductions will normally be made over the same period that the
overpayment was made. It is in your interests to regularly check your pay slips.
8. You will be paid monthly» on the last working day of the month in arrears to a
bank account of your choice.
9. The Company leave year runs from the 1st of April to the 31st of March. You are
entitled to 28 days for someone working a 5 day week and pro rata for part-timers,
inclusive of statutory / local holidays as agreed annually by the Company.
Arrangements for payment of holiday pay are as follows..........
10. You are obliged to give the Company 4 weeks notice to terminate your contract of
employment. The Company is obliged to give you the statutory minimum amount
of notice before terminating your contract.
11. You are expected to comply with the Company dress code, your line manager will
explain the details of this, and provide you with any relevant company policy on
this.
12. Should the need for disciplinary action be deemed necessary, this will be taken in
accordance with the Company Policy and Procedure on Disciplinary Action. You
have a right of appeal against this as outlined in the Procedure.
248
13. If you have a grievance in relation to your employment, then you should follow
the procedure outlined in the Company Grievance Policy and Procedure. You
should initially discuss any grievance with your immediate superior.
14. You are required to report any sickness absence as soon as is practicably possible
to your immediate superior, and provide certification of sickness in line with
Company policy.
15. Smoking in Company premises is prohibited (except in those external areas

specifically designated for that purpose). Breach of this regulation may result in
disciplinary action being taken.
16. In the course of your employment you may have access to confidential material
both in paper and electronic form. On no account should this information be
divulged to any unauthorised person. Breaches of confidentiality will be dealt with
through the Company Policy and Procedure on Disciplinary Action.
17. The Company has a strict anti-bribery and corruption policy in line with the
Bribery Act (2010). If you bribe (or attempt to bribe) another person, intending
either to obtain or retain business for the company, or to obtain or retain an
advantage in the conduct of the company's business this will be considered gross
misconduct. Similarly accepting or allowing another person to accept a bribe will
be considered gross misconduct. In these circumstances you will be subject to
formal investigation under the Company’s disciplinary procedures, and
disciplinary action up to and including dismissal may be applied.
18. It is a condition of your employment that the Company is satisfied on your

medical fitness to carry out your duties. This appointment is conditional on a
satisfactory Occupational Health Service / Company Doctor assessment. Should it
be deemed necessary during the course of your employment, you may be required
to attend for a medical examination from the Company Doctor / Occupational
Health Service.
19. Your employment with the Company may be dependent upon the possession of
particular qualifications or registration with a statutory Body or other Authority;
evidence of this must be produced on request. Failure to produce such evidence
may lead to the termination of your employment.
If you are in agreement with the above terms and conditions please sign both copies of
this statement, retain one and return the other to me.
249
Yours sincerely,
Rebecca Howells
Owner/ Managing director

For Hugamug Café
FORM OF ACCEPTANCE: I accept this appointment on the terms and

conditions stated above
SIGNATURE______________________________________
DATE_______________________
250
Appendix Z. E: Social Media Competitions
251
Appendix Z.F: Cost of production
Product Cost to Make Selling Price Gross Profit
Pot of Tea £0.06 £1.85 £1.79
Decaf Tea £0.08 £1.85 £1.77
Tea pigs- £1.95
Chamomile £0.22 £1.73
flowers £0.23 £1.72
Super fruit £0.21 £1.74
Chai tea £0.21 £1.74
Mao feng green £0.20 £1.75
Peppermint leaves £0.26 £1.69
Chocolate flake
Coffee £0.11 £2 £1.89
Expresso £0.06 £1.55 £1.49
Expresso double £0.12 £1.80 £1.68
Mocha £0.68 £2.50 £1.82
Latte £0.28 £2.45 £2.17
Cappuccino £0.28 £2.45 £2.17
Hot choc £1.01 £2.50 £1.49
Iced Americano £0.29 £2 £1.71
Iced Latte £0.29 £2.45 £2.16
Iced Mocha £0.69 £2.50 £1.81
Marshmallows 14p 25p £0.11
Cream 7p 25p £0.18
252
Syrups £0.08 30p £0.22
Milkshakes £2.45
Chocolate £0.39 £2.06
Banana £0.39 £2.06
Strawberry £0.39 £2.06
Vanilla £0.43 £2.02
Caramel £0.39 £2.06
Cookie £0.77 £1.68
Cans £0.80
Coke & diet coke £0.40 £0.40
7up £0.31 £0.49
Fruit Juices £1.40
Orange £0.54 £0.86
Apple £0.30 £1.10
Cranberry £0.41 £0.99
Tropical £0.30 £1.10
Mango £0.31 £1.09
Pineapple £0.31 £1.09
Slice of cake £2
Victoria sponge £0.55 £1.45
Chocolate fudge £0.37 £1.63
Coffee cake £0.79 £1.21
Lemon Drizzle £0.53 £1.47
Fairy cake £0.34 £1 £0.66
Squares
253
Shortbread £0.14 £1.35 £1.21
Flapjack £0.13 £1.35 £1.22
Chocolate caramel £0.40 £1.55 £1.15
shortbread
The Hugamug £3.96 £5.95 £1.99
special
Mini Hugamug £3.18 £4.95 £1.77
special
Veggie Hugamug £1.91 £4.95 £3.04
breakfast
Scrambled egg on £0.41 £3.45 £3.04
toast
Toast £1.50
Buttered toast £0.09 £1.41
Strawberry jam £0.27 £1.23
Peanut Butter £0.18 £1.32
Tiptree orange £0.27 £1.23
marmalade £1.17
Marmite £0.33 £1.25
Nutella £0.25
Sausage & bacon £4.15
Sandwich £2.06 £2.09
Baguette £2.17 £1.98
Sausage
Sandwich £1.25 £3.25 £2.00
254
Baguette £1.36 £3.50 £2.14
Bacon
Sandwich £1.64 £3 £1.36
Baguette £1.75 £3.25 £1.50
Extra egg £0.16 £0.50 £0.34
Sandwiches all £0.34 taken off
served with a side profit of each
salad and crisps sandwich meal
Tuna
Sandwich £0.68 £3 £1.98
Baguette £0.79 £3.25 £2.12
BLT
Sandwich £2.25 £3.50 £0.91
Baguette £2.36 £3.75 £1.05
Sweet chilli
chicken
Sandwich £1.57 £3.50 £1.59
Baguette £1.68 £3.75 £1.73
Chicken Tikka
Sandwich £1.39 £3.50 £1.77
Baguette £1.50 £3.75 £1.91
Coronation
chicken
Sandwich £1.24 £3.50 £1.92
255
Baguette £1.35 £3.75 £2.06
Bacon, Brie &
Cranberry
Sandwich £2.10 £3.50 £1.06
Baguette £2.21 £3.75 £1.20
Prawn Marie Rose
Sandwich £1.23 £3.50 £1.93
Baguette £1.34 £3.75 £2.07
Roasted red
pepper hummus,
avocado and feta
Sandwich £2.33 £3.50 £0.83
Baguette £2.43 £3.75 £0.98
256
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Enterprise Project Rebecca Howells 2016

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Enterprise Project Rebecca Howells 2016

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Rebecca Howells st20044474

A feasibility study into setting up a unique café in Cardiff, which

will provide a different but cosy café experience.

BA (Hons) Events Management

Cardiff Metropolitan University

©Cardiff Metropolitan University 2016

in substance for any degree and is not concurrently submitted in

candidate for any degree. It is the result of my own independent

research except where otherwise stated.

Number of Words: 13,176

Name: Rebecca Howells

the aim of the project:

 Conduct a comprehensive literature review

 Identify financial resources and legal requirements to establish the café

evaluate the feasibility of setting up the café

 Finally conclude and make recommendations that could be made to the

funds to consider development within the business.

completion of this project.

without them the enterprise could not have been completed.

through her time at university.

Chapter 1: Introduction ................................................................................................ 11

1.0. Introduction ........................................................................................................... 12

1.1. Overview of Enterprise Project ......................................................................... 12

1.2. Background of business .................................................................................... 12

1.3. Background of the café industry ....................................................................... 13

1.4. Main Aim: ......................................................................................................... 13

1.5. Objectives of Enterprise: ................................................................................... 14

1.6. Project Structure ................................................................................................ 15

1.7. Summary ........................................................................................................... 15

Chapter 2: Literature Review ....................................................................................... 16

2.0. Literature review ................................................................................................... 17

2.1. Introduction ....................................................................................................... 17

2.2. Entrepreneurship ............................................................................................... 17

2.3. Young Entrepreneurs......................................................................................... 18

2.4. Female Entrepreneurs ........................................................................................ 18

2.5. Setting up a small business................................................................................ 19

2.6. Finance for setting up a small business ............................................................. 20

2.7. Consultation with banks .................................................................................... 21

2.8. Hospitality industry ........................................................................................... 22

2.9. Trends in the Coffee shop culture ..................................................................... 23

2.10. Trends in food and drink ................................................................................. 25

2.11. Customer analysis ........................................................................................... 26

2.12. Developing a business plan ............................................................................. 27

2.13. Summary ......................................................................................................... 28

Chapter 3: Business Plan ............................................................................................. 29

3.0. Business Plan ........................................................................................................ 30

1.0. Executive Summary .......................................................................................... 31

1.1. Financial Highlights....................................................................................... 32

2.0. Company Information ....................................................................................... 33

3.0. Introduction ....................................................................................................... 34

3.1. Mission Statement ......................................................................................... 34

3.2. The Business Name ....................................................................................... 34

3.3. Current Shareholdings ................................................................................... 34

3.4. Business Structure ......................................................................................... 34

3.5. Key Personnel ................................................................................................ 36

3.6. Premises ......................................................................................................... 36

3.7. SWOT Analysis for “Hugamug” ................................................................... 37

4.0. Business Objectives ........................................................................................... 39

4.1. Business Goals Years 1-3 .............................................................................. 41

5. Products and Services ........................................................................................... 44

5.1. Product Description ....................................................................................... 44

5.1.1. Food and Beverages ................................................................................ 44

5.2. Unique Features ............................................................................................. 45

5.3. Production Methods ....................................................................................... 47