MOCHA COFFEE SHOP BUSINESS PLAN

Executive Summary

In the world we live today, people are so much attracted to the drinking of coffee, this they do when they have a break at work, when they want to meet and discuss important business issues, and when they want to meet and catch up on various exciting issues shared between friends. These trends have made the food and drink industry grow so much faster. The people in need of drinks such as coffee in London are many compared to the number of coffee shops that can serve every person’s coffee needs, especially those that make cappuccino and mocha latte coffee. They are very limited in London. To cater for the rising coffee needs of the people in the area, they never fail to have their needs well satisfied; different shops need to be established, which is why the Mocha coffee shop is a proposed shop to be established in London.

This coffee shop will ensure that the cappuccino and mocha latte coffee needs are well provided, such that all people will get what they deserve to satisfy their pressing coffee needs.

Macro Environment Overview.

When evaluating the macro environment likely to affect how the Mocha coffee shop will operate, six sectors need to be checked and thoroughly assessed to ensure that they align with what the coffee shop will provide. The first sector to check is the demographic sector, which describes the population in London. There has been a rise in the population whereby it stands at 9.4 million in 2021, from 9.3 million in 2020 (Service, 2021). This rise in population is a good indicator that more people will need coffee, whereby Mocha Coffee shop will be ready to serve all the people’s coffee needs.

On the political sector, the favorable laws and regulations will make it possible for the coffee shop within London to operate effectively. The adoption of technology in London is high and shows a more significant percentage of positivity. This makes it possible for coffee shops to use different technologies in the form of machines and techniques for the preparation of the best coffee, for people to order beverage products on the online platform or even provide the review on the products served to them, such that when there is a problem it becomes easily solved.

On the other hand, the ecological sector makes it easy for coffee shop owners to access ingredients used in the preparation of different coffee flavors with ease, such that the environment is not a hindrance to accessing good suppliers. The economic sectors define the positive employment rate in London and the favorable spending rates among the people which is contributed by the good personal income people get from their employments. The sociocultural sector is well defined in London since the people are great lovers of coffee. The people in the area have a culture of spending their income on a drink that will bring them together to talk about serious matters. Therefore, the macro-environment in London will be favorable for any coffee shop that is about to be established in the area, as all factors will favor its existence.

Market And Industry Analysis

The establishment of the coffee shop will address the problem of the lack of adequate coffee shops in London. Therefore, it will provide a solution to coffee lovers by ensuring that people always get what they need in terms of coffee, on time.

Thus, the target market is in the London area, targeting business people and other persons who might need coffee (Limited, 2021). The target market is big and wide, considering the 9.4 million persons in London (Service, 2021). Being a major city in the United Kingdom, it has many business personnel who are likely to be the major consumer of cappuccino and mocha latte coffee. Bearing the growing trend in population within London, an increase in employment among people aged between 16- 64 years, is a good indication that the disposable income will be great, and so people will be willing to spend (Limited, 2021), the favorable government’s law and regulations that supports business operations in the region, and good culture of Londoners to drink coffee, the market for coffee drinks within London is likely to continue growing, which will support the broader expansion of the food and beverage industry in the UK.

London’s food and drink industry, which helps businesses such as coffee shops, also shows some great positivity. For instance, in the last couple of years, the sales for this industry contributed about 29 billion euros to the th United Kingdom economy (economics and stats, 2021), offering a good indication that the market in this industry is growing, the employment rates also increase each year, because of the need to serve the peoples in time and with quality services.

The exports from this UK industry also shows some great positivity; for instance, in 2019, the industry was able to export products worth 23 billion euros to France, and the United States of America markets, all these factors coupled together, indicates that this is a fast-growing industry that attracts a lot of customers more than the aerospace and automotive industry (economics and stats, 2021).

With this assurance, there is the positivity that establishing a coffee shop that will be part of the food and beverage industry will result in much better productivity and success.

Competitors

In every booming industry, there must be great competition, whereby various competitors serve the purpose of ensuring that a business is always performing the way it is supposed to perform. In London, various significant competitors can be encountered when one is dealing with a coffee shop business. The first competitor is Prufrock coffee, which serves customers high-quality coffee with milk along Leather Lane. The coffee from these places has won various awards for being the best to customers.

The coffee shop also ensures that it provides classes to its customers regarding making coffee, both for the pros and the amateurs, and by so doing, the shop can attract a good number of customers to its product (Nast, 2021). The other competitor is Monmouth coffee, which opened in 1978 along Monmouth Street in Covent Garden. The coffee shop has an excellently trained staff that offers customers with all the best tastes customers would love in a coffee, and so they get to attract new customers while maintaining the existing ones. This coffee company has grown well such that it has been able to establish branches in areas such as the Borough market.

Kaffeine Fitzrovia is another excellent competitor coffee shop in London. The coffee shop has two branches found on East Castle Street, Fitzrovia, and was established because the original coffee shop could not have enough space to handle the significant number of customers at Fitzrovia.

They are attracted to the smooth, and great coffee offered at the shop offers (Nast, 2021). Considering all these competitors in the line of coffee provision, it will be essential to borrow one or two tactics used, and incorporate them into the proposed coffee shop, so that it will always be in line with competition existing in the market.

Marketing And Pricing Strategies

Bearing the great competition in coffee provision in London, great marketing strategies and pricing strategies should be incorporated for the proposed coffee shop business to be a success. Since the company will focus on a business-to-customer relationship, the following marketing strategies will be effective in promoting the proposed coffee shop to the potential consumers; there is the paid media advertising marketing strategy that involves advertising about the existence of the coffee shop through major televisions channels.

There is also an internet marketing strategy whereby the social media platforms such as YouTube, Instagram, and Facebook, can be incorporated with ads explaining the existence of the proposed coffee shop in London (Woschnick, 2021). There is also a direct marketing strategy, where sales agents can be recruited to have a one-on-one relationship with potential customers to the proposed coffee shop, advising them to try the coffee provided therein. Having identified the strong marketing strategies that will likely promote the acceptance of the proposed coffee shop to the potential customers, there is the need-to-know which pricing strategy will work best for the coffee shop.

There is a variety of pricing strategy to be used, and a few that can work for the proposed coffee shop includes; the market penetration pricing, whereby instead of charging so high for the coffee, low prices should be set, and as the best customers base is established the business can increase the costs to match those of competitors in the food and drink market (Dunsby, 2021). The proposed coffee shop can also use the dynamic pricing strategy to ensure that prices of coffee products change with changing market states so that it may not lose its customers, and also, it may not make losses in the process of providing better products to customers.

Operations Plan

For the coffee shop to produce great coffee that will serve the customers with the best experiences, the coffee shop needs to have the following major equipment’s; the milk coolers, a refrigerator, an ice machine, a cash register, a coffee brewer, tables, chairs and major utensils for making and serving coffee. The coffee shop will be based in Covent Garden in London because it’s the liveliest place in the area, where people enjoy having outside drinks.

Potential customers can get to the site by using bus or taxi means of transportation, and if customers are coming from within the Covent Garden area, they can get to the place on foot (Garden, 2021). Legal considerations for the coffee shop business are also a must, whereby if there is a need to change the location of operation, there is need to check who the customers will be in a different area, the suppliers, the mode of transportation, and the government laws and regulations concerning the establishment of such business in other regions.

Swot Analysis

This section outlines the strengths, weaknesses, opportunities, and threats for the new business operations. The strength of the proposed business operations will lie in the management of the business, whereby the management will ensure that all the business budgets are thoroughly done such that expenses are well accounted for so that there will be no any instance where the customers will lack their favorite coffee provision. The weaknesses of the coffee shop business lie in the competition’s inadequate knowledge of the area of operation, which will likely cause the coffee shop to lack some of the critical ingredients in the preparation of coffee, which can be mostly water.

The coffee shop business’s opportunity will lay on the big gap of people’s need for coffee in the Covent Garden area, bearing the fact that there are few coffee shops in the region. The threat to the shop will be the entrance of new smaller shops that are likely to provide similar coffee products as the ones of the proposed coffee shop, which are likely to result to the reduction of sales of the proposed coffee shop.

Financial Requirement

The financial requirement for the proposed business will include the renting of space and setting up of the important sections that will make the coffee shop an effective place of business operations. The start-up cost that will incorporate equipment, furniture, and opening stock costs is estimated to stand at € 250,000. The source of funding for the business is expected to come from investors. The cost of sale is expected to stand at € 126,000. The fixed running cost is expected to stand at € 20,000. In contrast, the profitability and the break-even point will be arrived at when the business can attain a profit of € 94,000 from its monthly operations.

References List

Dunsby, M., 2021. The seven pricing strategies every business owner has to know. [online] Startups.co.uk. Available at: [Accessed 1 December 2021].

Economics, B. and stats, F., 2021. Food and drink industry – Facts and stats. [online] The Food & Drink Federation. Available at: [Accessed 1 December 2021].

Garden, C., 2021. Getting to Covent Garden | Covent Garden London. [online] Covent Garden London | CoventGarden.com Official Site. Available at: [Accessed 1 December 2021].

Limited, M., 2021. Mintel Reports market analysis and market studies. [online] Mintel. Available at: [Accessed 1 December 2021].

Nast, C., 2021. The 27 best coffee shops in London. [online] CN Traveler. Available at: [Accessed 1 December 2021].

Service, U., 2021. Census forms — UK Data Service. [online] UK Data Service. Available at: [Accessed 1 December 2021].

Woschnick, V., 2021. Top 10 Most Effective Marketing Strategies for B2B and B2C. [online] Weidert.com. Available at: [Accessed 1 December 2021].

Appendix

Financial Plan

ITEMS

COST IN €

COSTS IN €

Startup cost

250,000

Expenses

Legal expenses

Insurance expenses

Website expenses

1500

2000

3000

Cost of renting/month

Cost Of Equipment

the milk coolers,

a refrigerator,

an ice machine,

a cash register,

a coffee brewer,

a counting machine

Cost Of Furniture

tables

chairs

counters

Installation Of Electricity

TOTAL EXPENCES

REMAINING CAPITAL

Cost of sales

Cost of

direct material

Direct labour

Indirect labour

Manufacturing cost

Indirect material

Total manufacturing costs

Starting inventory

Finishing inventory

COST OF SALES

7000

1500

3000

2500

3500

4000

2000

5000

6000

3000

1000

20000

30000

20000

40000

25000

11000

45,000

205,000

146000

(20000)

126000

Fixed and running costs

Equipment

Supplies

Revenue costs

Expenses

Profitability and break even point

15000

20000

(256000+ 44000)

35000

300000

206000

94000

References

Dunsby, M., 2021. The seven pricing strategies every business owner has to know. [online] Startups.co.uk. Available at: [Accessed 1 December 2021].

Economics, B. and stats, F., 2021. Food and drink industry – Facts and stats. [online] The Food & Drink Federation. Available at: [Accessed 1 December 2021].

Garden, C., 2021. Getting to Covent Garden | Covent Garden London. [online] Covent Garden London | CoventGarden.com Official Site. Available at: [Accessed 1 December 2021].

Limited, M., 2021. Mintel Reports market analysis and market studies. [online] Mintel. Available at: [Accessed 1 December 2021].

Nast, C., 2021. The 27 best coffee shops in London. [online] CN Traveler. Available at: [Accessed 1 December 2021].

Service, U., 2021. Census forms — UK Data Service. [online] UK Data Service. Available at: [Accessed 1 December 2021].

Woschnick, V., 2021. Top 10 Most Effective Marketing Strategies for B2B and B2C. [online] Weidert.com. Available at: [Accessed 1 December 2021].

The post MOCHA COFFEE SHOP BUSINESS PLAN Executive Summary In the world we live appeared first on PapersSpot.