Business proposal

on
“Opening a Coffee House in Jagat farm”

A report submitted to IIMT, Greater NOIDA as a partial fulfilment

of full time Post Graduate Diploma in Business Management (BM).

Submitted to: Submitted by:

Dr. D. K. Garg Ankit Mishra(BM15013)

Chairman Indrajit Chakraborty (BM15115)

IIMT, Gr. NOIDA 15th Batch

Ishan Institute of Management & Technology

1 A, Knowledge Park-I, Gr. NOIDA, District; G.B. Nagar (U.P.)

Website: www.ishanfamily.com, E-mail: ishan_corporate@yahoo.com

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 TABLE OF CONTENTS

TOPIC PAGE NO
1. Acknowledgement........................................................................2
2. Declaration....................................................................................3
3. Preamble.....................................................................................4-6
4. Purpose of study.........................................................................7-8
5. Business &location...................................................................9-10
6. Market analysis............................................................................11
7. Products and services.............................................................12-13
8. Machinery &materials...........................................................14-16
9. Technical knowhow....................................................................17
10. Manpower requirement.........................................................18-19
11. Raw materials.........................................................................20-21
12. Main competitors...................................................................22-24
13. Financial planning.................................................................25-28
14. Marketing strategy................................................................29-32
15. Legal aspects &tax applications...........................................33-35
16. Why we interested in this project..............................................36
17. Conclusion...................................................................................37
18. Words of thanks..........................................................................38

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 ACKNOWLEDGEMENT

we would like to acknowledge with extreme gratitude, the unfailing wise

counsel, intellectual and moral support extended to us by my esteemed mentor
honourable Dr. D. K. GARG, (Chairman) Ishan Institute of Management &
Technology, Greater Noida. His indispensable suggestions have led to the
successful culmination of the work and completion in the form of the present
dissertation.

We would like to extend my thanks to Dean Mr. M.K VERMA, and all other
faculties for all the guidance and support received during the course of
Proposal and for inspiring us time to time.

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 DECLARATION

We hereby declare that this project work done on ‘business proposal’ for
“opening a coffee house in Jagat farm” to Ishan Institute of Management &
Technology, Greater Noida in partial fulfilment of the degree of Post Graduate
Diploma in Management is an original work and is not submitted or published
at any time or before for any other place.

Ankit mishra(15013)

Indrajit chakraborty(15115)

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 PREAMBLE

Coffee shop is an establishment which primarily serves prepared coffee or

other hot beverages. It shares some of the characteristics of a bar, and some of
the characteristics of a restaurant, but it is different from a cafeteria. As the
name suggests, coffeehouses focus on providing coffee and tea as well as light
snacks. So we have an idea of preparing a business plan for opening a coffee
house. Keeping in view the workload peoples facing in today’s competitive
scenario make us to think of preparing an action plan that can be realized to
establish a coffee house where such peoples can sit over there and get rid of
whole day’s tiredness.

The retail specialty coffee industry is unique in that it attracts as many

admirers of the product (coffee) as it does those who are looking for a
lucrative business investment. It is human nature to focus on those things that
are of greatest personal interest to us, and in the case of the coffee fanatic that
is all things coffee! Let’s spend the next few moments talking about
something even more important than the product, the critical business issues
that will define your retail coffee business - we promise that it will be worth
your time and that you can go back to the taste testing when we’re done.

If you start your business from scratch, you can fit your space out as you like
from day one. You are completely designing your store from scratch. On the
other hand, start-up businesses are riskier because you don't have a proven
track record in the business as you have created it at that location, and it costs
a lot more to start a brand new business as opposed to buying an existing one.

If you have already started your new shop and recognize the example
questions above as being yours, don’t worry, it’s never too late to start fixing
the items addressed within this proposal. For all others that may be
considering starting a new coffee shop but have not yet taken action, we hope
that the ideas listed herein will be helpful to give you some insightful
reflection on the true issues that will impact your business so that you may
continue to pursue your goals with a new found sense of confidence. Before
you start a coffee shop you need to have a solid understanding of how this
type of business operates. You may have a vision of people coming in all day
long to get their favourite drinks. Yet that may not be what happens if you

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rush into things without a solid plan of action. It is possible to be successful as
many people do buy their coffee in the mornings and at other times of the day.

And the best thing about opening a coffee shop is...

 You don't need to be a coffee expert

 You don't need to know anything about the Internet
 You don't need to know how to build a website
 It's not multi-level marketing
 It's not a pricey franchise or distributorship
 It's not some mailing scheme
 It doesn't require a lot of money to get started

Here we have a business proposal for establishing a coffee house in Gr. Noida
city so people interested in having their own coffee house can seek some help
using this plan because in Gr. Noida there are mainly students and peoples
working in companies. Coffee house will provide a relaxing, student-focused,
neighbourhood-centred place with fresh roasted coffee, specialty drinks, good
books, and music. Coffee is the answer to an increasing demand. Our target
market wants:

 Neighbourhood businesses in Greater Noida

 Great coffee at a competitive price
 A comfortable place to socialize with others with similar interests

Coffee house goal is to provide the community with a social, entertaining

atmosphere where students from different colleges can meet each other in a
neutral, non-denominational setting.

Coffee house will be incorporated as a Social corporation. This will shield the
owner from issues of personal liability and double taxation.

This proposal is prepared to obtain financing in the amount of Rs.40 lakhs.

The supplemental financing is required to prepare the selected site, purchase
equipment, and cover expenses during the first year of operations. The half of
finance will be borrowed and half will be invested from owner side.

This financing will allow coffee house to successfully open and maintain
operations. The large initial capital investment will allow coffee house to

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provide its customers with an inviting atmosphere and quality products. A
unique, upscale and innovative environment is required to provide customers
with an atmosphere that will create socialization. Successful operation in year
one will provide it with a customer base that will allow it to be self sufficient
in year two.

Even with our conservative sales forecast, we will maintain a positive cash
flow in all months and have a positive net worth over 7 lakhs by year three.
We project that our net profits will increase from 3 lakhs to over 4.5 lakhs
over the next three years.

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 Purpose of study:
We know when a person engaged in a business and having knowledge of local
market conditions like customer taste and preference, demand of the product
then he can have an edge to click into the market. So our purpose of study is
to give an idea to somebody interested in having his own coffee shop in Gr.
Noida city because this is market which has a huge potential for coffee and tea
industry. So for that we have set some objectives, keys to success and mission
to accomplish this purpose opening a coffee shop in the city. So these are as:

1.1 Objectives

Coffee house objectives for the first three years of operation include:

 The creation of a unique, upscale, innovative spiritual environment

that will differentiate coffee house from local coffee shops.
 To make coffee the destination for quality coffee in a welcoming
atmosphere for peoples who are serious about their coffee and growing
in their spirituality.
 The formation of an environment that will bring people with diverse
backgrounds and interests together in a common forum.
 To be an active and vocal member of the community, and to provide
continual re-investment through participation in community activities
and financial contributions.
 Consistently providing excellent specialty beverages, bakery items,
inspirational and educational books, and music.

1.2 Keys to Success

The keys to the success for coffee house are:

 The creation of a unique, innovative, upscale atmosphere that will

differentiate coffee house from other local coffee shops and future
coffee shops.
 Fresh Coffee roasted on-site daily will give customers a unique
experience as well as excellent product.
 Selling beverages and products that are of the highest quality.
 The creation of an environment that won't intimidate the spiritual
seeker. Coffee house will position itself as an educational resource for
individuals wishing to learn about the benefits of growing spiritually.

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  The establishment of coffee house as a community hub for
socialization and entertainment.
 Encourage the two most important values in students: love and service.

If your ideas are clear, then the next part, your mission statement - should be
easier. Will you only serve coffee, what foods will you serve and what
objectives can you set yourself? Do you want to be the number one shop in a
specific area? A mission statement will help you be precise your goals and
ideas and it's a great way to impress potential investors with your ambition.

1.3 Mission

As people are becoming more interested in their spiritual side, a

neighbourhood shop with excellent freshly roasted coffee and non-
denominational educational books and tapes is a welcomed alternative and/or
addition to the local institutions. Coffee is a specialty beverage establishment
focused on providing freshly roasted coffee beans, coffee/espresso drinks and
information to enhance our customers' spiritual experience. We also
understand that coffee drinkers interested in growing spiritually want a
destination, not just a location; we provide them with the best of both.

Our goal is to be the destination for students coffee drinkers seeking a non-
secular environment in the City area. People of all ages and backgrounds will
come to enjoy the unique upscale, educational, motivational and innovative
environment that coffee house provides.

We believe it is important to remain an active member of the community and

to impact our customers' lives in more ways than the selling of specialty
drinks.

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BUSINESS AND LOCATION

The tea and coffee industry in the Twin Cities (Noida and Gr. Noida)
experienced rapid growth at the beginning of the 2000's along with
development of industries and is now moving into the growth stage of its life
cycle.
Many factors contribute to the demand for excellent coffee and specialty
beverages in Gr. Noida. The climate in city is extremely conducive to coffee
consumption; coffee consumption increases in colder months. Current trends
in the Jagat Farm and Alpha markets reflect the popularity of fresh, quality
coffee and specialty drinks.
Coffee house, Greater Noida, will offer great specialty beverages and easy
access to exciting educational information & will sell quality products and
provides excellent customer service for coffee lovers and persons looking to
enhance their knowledge base. We are looking to lease a well decorated shop
where we will use to market and merchandise our products.
The popularity of book and music entertainment is growing immensely as
people are searching for meaning during these uncertain times. Those who are
familiar with reading more books and listening music, sales are looking for
authors and performers to keep up with the seemingly insatiable demand.
Our book and music selection and helpful staff will appeal to the audience that
is seeking to grow and learn spiritually in this age of uncertainty. This aspect
will attract younger aspiring to get knowledge and elderly members alike who
are gaining interest in their spiritual condition.
The central location will provide easy access from most points of origin
throughout the City area for those who will recognize coffee house as a
destination point, as well as provide local community residents with
convenient access to freshly roasted coffee.
The primary factor in getting your own coffee house going is location. Should
you choose to start a coffee shop it will mainly stand or fall by where you set
up? Any potential location needs research, but that does not have to be
expensive. Head into your town centre or shopping mall and do some people
watching. Where do they naturally stop to look at a statue or spectacular
building? When they go into work in the morning, what way does the traffic
mainly flow? With a little thought, you will soon find yourself walking round
instinctively eyeing up possible locations for your business.
The site, Greater Noida, is located in NCR Delhi. The initial space will be
approximately 1000 square feet and ample space for the first three years of
growth. The shop will be having ample parking outside it.  This area was
chosen for various reasons, including:

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 Proximity to other areas within the City; Central location easily
accessed.
 High Visibility.
 Proximity to the large no. Of institutions.
 Diverse population within the Gr. Noida specially students.
 Scarcity of other coffee houses in the area.

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MARKET ANALYSIS SUMMARY

Coffee house will be faced with the exciting challenge of being the first-
mover in the Gr. Noida coffee house and roaster market. The consistent
popularity of coffee and specialty drinks, combined with the ever growing and
ever profitable inspirational bookselling and music market, is a winning
concept and will produce overwhelming results. Our target market includes
coffee drinkers, spiritual seekers, students seeking fellowship (and snacks),
and local neighbourhood residents.
Target Market Segment Strategy
We know in Gr. Noida there are large number of institutes and schools. In the
city there are large no. Of companies (domestic as well as MNC) and peoples
working in these are almost staying in city itself. So after the 5o’clock when
these employees and students will leave their place then our coffee house can
be a favourite destination for them where they can sit to get rid of their whole
day tiredness. Here they can sit together with peoples they have never meet
before can share their experiences in their respective companies and
institutions and can come to know about environment in each other’s working
place and can exchange word regarding any opportunity in each other
company.
This is our market strategy in target market and USP of our coffee house. To
an estimate in this area lakhs of peoples leave and in them there are 15000 to
20000 students and rest of them are working somewhere leaving very aged
peoples and some percent of house wives. This is amazing to say that a large
percent of housewives work somewhere.
Market Needs
Current trends and historical sales data both indicate that the high demand for
coffee will remain constant over the next five years. The inspirational book
and music business is expected to continue to grow at high rate. In addition to
the increased sales in these areas, Generation X'ers are more a follower of
western culture and trends than their parents. The life style of peoples here is
high and their requirements too are high so better understanding their needs
and fulfilling them is the need to run a business successfully.
The needs of this market are decidedly soft in nature. The soft needs of this
market include a general feeling of acceptance, a place of belonging, and non-
judgmental atmosphere but these may not be limited.

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 PRODUCTS AND SERVICES

Coffee house will sell the entire array of coffee and espresso-based drinks,
specialty drinks, and bakery items, as well as music and books geared toward
the spiritual reader.
Specialty Coffees
the primary product of our coffee house is the specialty coffee. Several unique
blends will be micro roasted for daily serving or specially roasted to order at
our customers' request which will give our customers the variety they seek.
Espresso & Coffee Drinks
The Straight Shot - The foundation of every espresso beverage; served in a
demitasse, when consumed alone.
Cappuccino - Espresso mixed with foamed milk upon the pour; can be
garnished with shaved chocolate.
Caffé Latte - Espresso mixed with steamed milk, and topped with foamed
milk; can be garnished with shaved chocolate.
Flavor-Based Drinks
Hot Chocolate and Steamers - These drinks are made like latte without the
addition of coffee. Flavoured syrups are added to steamed milk and may be
topped with whipped cream at the customer's request.
Other specialty drinks include: hot tea, iced Tea, Chai, smoothies, blended
coffee and tea-based drinks, and bottled soft drinks.
Books and Music
Books - The most popular titles will be stocked in limited supply. Such books
as Winning by Jack Welch; In Pursuit of Purpose, by Dr. Myles Munroe;
Prayers That Heal The Heart, by Mark & Patti Virkler; A Fresh Word For
Today, by Bob Gass; communicate or die, by Thomas D. Zweifel; You can
Win, by Shiv Khera, and others.
Music – coffee house will carry the finest in all kind of music. We can find
Indian old as well as latest music materials, English songs by Ricky Martin,
and more.
Bakery Items
coffee house will also offer its customers a variety of baked goods, including
pastries, cookies, and cakes. Bread for sandwiches and buns for soup will also

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be secured. Negotiations with several local bakeries will be made. Quality and
consistency will be the determining factors for this decision.

Future Products
As coffee house will grow, more features will be added to the existing store. A
key part of this is the addition of live entertainment. This entertainment will
be in the form of Jazz singers, poetry readings, Comedy for the King,
motivational speakers, and local musical Artists.
Food items will be added to the menu of offerings. The soup will be made
fresh daily, one kind per week. The soups are: Chicken Noodle, Vegetable,
Chicken and Rice, and others. Sandwiches are made to order and include
delicious favourites such as egg salad, veg. salad, and roast chicken. The salad
sandwiches will be made fresh on-site.
Coffee house will establish itself as the destination for non-secular and
motivational entertainment. We will also add meeting rooms, hosting
receptions, and adding small devotional rooms for private reflection. The
meeting rooms will be perfect for small business and non-profit organizations
with limited office space. Coffee and pastries will be served to ensure a
successful atmosphere for business. Coffee house will also be available for
private receptions, such as birthday parties, anniversaries, or showers.
Customer provided catering will go a long way to ensure the guests' parties
are successful. The devotional rooms will be wired for individual music
selection, equipped with one-way TV cameras, LCD panel equipped with
DTH facility and furnished with a comfortable chair and table.
These additions complete the vision for coffee house, and provide its
customers with a place for socialization, relaxation, and reflection.

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MACHINARY& MATERIALS REQUIREMENT

Coffee house’s start-up costs will cover coffee, espresso, and specialty drink
making equipment, micro-roasting equipment, training, site renovation and
modification, capital for operating expenses in the first year, and the inventory
necessary to provide customers with the information needed to grow.
A large portion of our start-up requirements will go towards the purchase of
specialty drink equipment from Espresso Services, Inc. Our long-term assets
will include:

 One espresso machine

 One micro-roasting system
 an Espresso grinder
 water filtration system

Additionally, we need funding for initial inventory, both for the coffee shop
side of things and the other specialty merchandise, books, and music. Music
items will be purchased from Music material Distributors. Books and other
inspirational material will be purchased from famous Publishers, House
Distributors, and others.
The site coffee house chooses will require funds for renovation and
modification. A single estimated figure will be allocated for this purpose. The
renovation/modification cost estimate will include the costs associated with
preparing the site for opening business.
Current Assets, includes furniture and fixtures.
However a detail of equipment required for the coffee house can be given as:
Cash register or POS computer – A computer POS (point of sale) system is
good there is no doubt about it. These are the ones that have the touch screen
monitors and such. However, they are probably best for analyzing your sales
and inventory only, and not much more. They do not speed up your customer
line.

Espresso Machine

This is the daddy of the whole business, your life blood. DO NOT SKIMP ON
IT! However, having said that there is the line of overkill you do not need to

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cross either. There are three basic types of espresso machines: Semi-
Automatic, Automatic or Super Automatic. Well our choice is always the
automatic because you can program them to cut off a shot at 23 seconds, or
whatever you choose but still do it manually. The semi-automatic requires
manual shut off by the operator.

Espresso Grinders

We will need one of it for regular espresso. There are several manufacturers
and models. They make a doserless model that grinds right into the port filter
and though this is freshly ground espresso, it does not work well in a rush!
The units with a hopper allow the hopper to fill with ground espresso and have
a lid to keep out the air. The bigger units have a bigger hopper and vice versa.
Also, these have a bean hopper that you can get about 2 lbs of espresso beans
in.

Coffee Maker (drip)

Be sure to buy for your volume. Automatics are best as they are plumbed to a
water line. Pour over units will you need to fill manually! The air pot brewers
are the better fits because they brew the coffee directly into the air pots. There
are single unit models and double unit models. we will save a lot of time
especially in a rush, with a double brew unit.

Pastry Case (refrigerated and none)

There are several different sizes. Take your floor space into consideration but
also buy for capacity and visual display. A nice, attractive unit that holds and
displays a nice array of pastries is key for merchandising. Dual zone cases are
a good idea because they let you have part cold and part room temperature
(dry case) pastries that do not need to be refrigerated.

Freezer for storage

This is for the back of your shop. This will be your commercial refrigerator in
the back area to house your back stock of refrigerated items such as milk, as
well as your baking ingredients, food items, etc. There are double and single
door units.

Ice Maker

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Getting an ice maker that can make an average of 600-1000 lbs per day is
good. It will give you enough and still be able to make more within 24 hours.
In a busy shop, you’d be surprised how much ice you can go through: sodas,
fruit smoothies, frappes, frozen chai.

Freezer

You will need one of these to keep your ice cream, and other food ingredients
that can and need to be frozen.

Oven

Get this based on your baking level. A ¼ size may be too small and a full size
may be too big. The median unit is a ½ size and has 3 racks.

Hand Sink(s)

Check your health department requirements because you may need a hand
sink every so many feet or based on how many employees you have, or based
on your floor plan. These are sinks only big enough to wash your hands in and
that is it. That is why they are so small.

Furniture

Pick and choose what is in between comfortable and not. This will help you
avoid squatters that love to stay all day. Ordinarily, people in your store are a
good thing but not if they are taking up space and just being comfy! This will
include your tables and chairs, as well as couch, wing hairs, etc. If you are an
eclectic coffee house, good finds can be had at Goodwill and other resale
shops.

Phone

Just get one that you can hear when it rings! A cordless phone is a great idea.

Music System

If you can, get extra speakers and have one in at least all four corners for best
sound quality.

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Credit Card Machine

This is the swiper pin pad – If you accept credit and debit cards, this is
essential. Usually they are purchased from your credit card processor. Leasing
one of these is usually a rip-off. Try to buy it outright.

TECHNICAL KNOW-HOW
Technology tools are available to reduce the skill level required of your
people to perform their jobs. Take, for example, super automatic espresso
machines that perform all of the steps of a trained Barista, from grinding the
whole bean coffee to extracting the espresso shots and even dispensing
frothed milk, all at the press of a single button. As helpful as these devices
may be, we caution you to use technology as a tool and not a crutch; whereas
technology is helpful to assist your employees, not all problems can be solved
with the application of technology alone in the name of cost savings. The
technology coffee house will use is dependent upon is the micro-roasting
equipment it will use to roast the beans on-site. This equipment is serviced
through the supplier; Espresso Services, Inc. Coffee house will also use our
website to advertise specials and events, and to post the monthly menu and
talent offerings. We will use email to communicate with customers wishing to
sign-up for email specials. Eventually, we would like to institute online
ordering for roasted coffee and specialty merchandise, but that plan is at least
two years off.
The Point of Sale (POS) technology coffee will use allows for order taking
when the lines are long, keeps customer discount information, inventory, and
revenue/profit information. The system has a battery back-up in case of power
surges and temporary power losses. The coffee house logo will be Federally
Trademarked. Although the beverages will not be protected in content,
beverage names for specialty drinks reflecting the theme of the shop will be
protected under the Trademark laws. The security system coffee house uses
will protect the contents of the store and reduce insurance premiums.
Coffee preparation is the process of turning coffee beans into a beverage.
While the particular steps needed vary with the type of coffee desired and
with the raw material being utilized, the process is composed of four basic
steps; raw coffee beans must be roasted, the roasted coffee beans must then
be ground, the ground coffee must then be mixed with hot water for a certain
time (brewed), and finally the liquid coffee must be separated from the now
used and unwanted grounds.
Roasting: Roasting coffee transforms the chemical and physical properties of
green coffee beans into roasted coffee products.

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Grinding: The whole coffee beans are ground, also known as milling, to
facilitate the brewing process.

Brewing: Coffee can be brewed in several different ways, but these methods
fall into four main groups depending upon how the water is introduced to the
coffee grounds.

MANPOWER REQUIREMENT

Coffee house will be owned and operated by well educated having good and
soft communication skills with power to take right decisions. The company,
being small, requires a simple organization structure. Implementation requires
the owner to make decisions on the mission and vision, while an expert
operator to make operational decisions. Major decisions affecting the
execution of the plan will be made jointly by the owner and operations
manager.

The owners need to have an entrepreneurial spirit which will make their
corporate venture successful. They need to have an ability to turn vision into
strategy, and strategy into tactics, will be key elements of success for coffee
house. It is not our intent to argue the effectiveness of any model with this
recommendation to invest in your employees - it is our intent to recommend
that with any model, you should choose the best possible candidates for their
position and compensate them accordingly.

The best approach in any situation is to hire the best people and give them the
training, support and compensation (monetary or otherwise) that they need to
be comfortable and grow with their position. Thousand percent employee
turnover rates may be common in minimum wage fast food restaurants, but
consider what real cost this has on the small retail business: product
inconsistencies resulting from inexperienced staff, exorbitant recurring
training costs for all of the new hires, poor employee morale resulting from
low wages and the personalities that low wages attract and most importantly,
how these staff members interact with your regular customers. Those who are
able to develop a customer rapport are not likely to remain with your business
for long as better paying opportunities develop elsewhere.

Your employees are the face and best representatives of your business; they
will interact with your customers, prepare your beverages and monitor the
safety and well-being of your investment.

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There are several workforce models that may be applicable to your business,
ranging from the foodservice model of unskilled workers hired at low wages
to “press the buttons” to the fine dining model of premium customer service.
We recommend by attracting enthusiastic potential employees with stable job
histories and good references looking for a long-term position you may spend
more out-of-pocket in the short term, but that the returns you receive in
reliable job performance, increased sales and decreased training costs will far
outweigh the upfront investment. Stable candidates are generally influenced
not solely by monetary compensation, but also through the sort of support
workplace that fosters advancement and other benefits, such as medical
insurance coverage; be certain to work with your payroll professional or
human resources leasing company in order to develop a packaged offering
that reflects the type of candidates that you wish to have representing you and
your business.

So the manpower to run the coffee house properly includes:

 Owner
 Operations manager
 Baristas(3)

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Raw materials:
Coffee comes from the seed, or bean, of the coffee tree. Coffee beans contain
more than 100 chemicals including aromatic molecules, proteins, starches,
oils, and bitter phenols (acidic compounds), each contributing a different
characteristic to the unique flavour of coffee. The coffee tree, a member of the
evergreen family, has waxy, pointed leaves and jasmine-like flowers. Actually
more like a shrub, the coffee tree can grow to more than 30 feet (9.14 meters)
in its wild state, but in cultivation it is usually trimmed to between five and 12
feet (1.5 and 3.65 meters). After planting, the typical tree will not produce
coffee beans until it blooms, usually about five years. After the white petals
drop off, red cherries form, each with two green coffee beans inside. Because
coffee berries do not ripen uniformly, careful harvesting requires picking only
the red ripe berries: including unripened green ones and overly ripened black
ones will affect the coffee taste.

Coffee trees grow best in a temperate climate without frost or high

temperatures. They also seem to thrive in fertile, well-drained soil; volcanic
soil in particular seems conducive to flavourful beans. High altitude
plantations located between 3,000 and 6,000 feet (914.4 and 1,828.8 meters)
above sea level produce low-moisture beans with more flavour. Due to the
positive influences of volcanic soil and altitude, the finest beans are often
cultivated in mountainous regions. Today, Brazil produces about half of the
world's coffee. One quarter is produced elsewhere in Latin America, and
Africa contributes about one sixth of the global supply.

Currently, about 25 types of coffee trees exist, the variation stemming from
environmental factors such as soil, weather, and on the other hand, comprise
the bulk of the premium coffees that are typically sold in whole bean form so
purchasers can grind their own coffee. Whether served in a coffee house or
prepared at home, coffee made from such beans offers a more delicate and
less acidic flavour.

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Before starting any business, it is advisable that you fully understand (and
ideally, enjoy) the product that you intend to offer. The specialty coffee
industry has enjoyed such stellar growth in modern times and received so
much positive publicity, that sometimes the one thing that the new coffee shop
owner seems to overlook is, well, the coffee! Coffee, you say? What could be
so difficult to understand about making coffee: it’s a bean, grind it, mix it with
hot water and you’ve got a high margin drink… right? Well, perhaps, but only
in the sense that wine is “old grape juice in a bottle.” The danger in the
specialty coffee industry is that most people do not realize that coffee and its
resulting beverages exhibit a similar level of complexity. So our main focus
should be on raw materials which are green beans which should be fresh and
well roasted and grinded.

The other main material is water which plays an important role in preparation
of coffee. Take, for example, water: water is over 98% of the coffee that you
will serve. It is shocking to us how many new coffee shop owners give little or
no thought to their water source, specifically, the current and optimal levels of
total dissolved solids, mineral hardness, alkalinity (pH), silica, iron and
chlorine in their water. Imbalanced water will completely alter the flavour of
any coffee or tea and can destroy valuable equipment. When you truly
understand coffee, you will recognize all of the elements that are part of
coffee and of the beverages that you will serve and give them the due attention
that is required. The milk we will use should be fresh one not one or two days
old that can deteriorate the taste of coffee.

Coffee house will associate itself with the finest coffee supplier in the Twin
Cities area, Espresso Services, Inc. We will bring fine coffees from all over
the NCR, where residents, other Midtown tenants and passers-by can enjoy a
freshly roasted quality cup of coffee, an espresso or specialty drink in an
inviting and friendly atmosphere.

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 Main Competitors
When we open any business competitors are always there to give you
challenge. Due to competition, cafe owners must look for ways to differentiate
their place of business from others in order to achieve and maintain a
competitive advantage.
The founder of this coffee house will realize the need for differentiation and
strongly believe that combining freshly roasted coffee, a cafe, spiritual books
and music, and entertainment are the keys to success.
The fact that no other such cafes are established in the Twin Cities presents
such coffee house with a chance to enter the window of opportunity and take
hold of a very profitable niche market. So some main competitors are:
Nescafe
The main competitor in the coffee segment is Nescafe, Jagat Farm, as they
also sell freshly prepared coffee. In fact, the largest part of Nescafe revenue is
generated from the sale of the speciality coffee and other eatables to the
consumer. The difference is Nescafe does not roast their beans on-site, nor do
they have the ability to custom roast for their customers. This will give us an
advantage over our competitor.
Coffee day
Coffee day is situated in Ansal plaza will be one of competitor who will give a
tough competition to our coffee shop because it pricing strategy is really
competitive than other coffee makers and provides more facilities.
Small tea and coffee makers
In Gr. Noida outside all institutes and companies you will find small tea as
well as coffee makers that can directly impact any new business in tea and
coffee segment.
But one thing to note is that only workers and some students prefer to sit and
take tea because of lack of hygenity and cleanness which is main factor that
attract customers. So here also we can have competitive advantage over these
small tea and coffee makers.

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Strategy and Implementation Summary
Coffee house will use a strategy of total market service. Our promise is in
our uniqueness in the market and the products we sell, the people we attract,
the atmosphere we create.
We will create an atmosphere that lures the "spiritual seeker." The "coffee
lover" and others will come because of the quality and the atmosphere.
Ultimately, we aren't selling either products or coffee. We are selling the
experience. We want to be part of the community, part of their lives, and part
of the search for meaning. Strategic Assumptions:

1. Every person is a potential customer and all potential markets

experience growth.
2. Marketing to the soft needs of the customer will produce sales of
products.

Our Value Proposition

Coffee house will position itself as an upscale coffee house, spiritual resource
and entertainment provider. It will serve on-site roasted, high quality coffee
and espresso, as well as specialty beverages at a competitive price.
Due to the other coffee and small tea shops in the Gr. Noida, it is important
that we will set competitive prices for the freshly roasted coffee. Customers
will see coffee as it roasts throughout the day, and they will be able to order
coffee beans roasted to their specifications while they enjoy a beverage.
Competitive Edge
The competitive advantage of coffee house is threefold:
Our uniqueness in the market
Coffee will be the only spiritually centred coffee shop in the Twin Cities
metropolitan area (Noida and Gr. Noida) which will roast its own beans daily,
sells quality coffee and espresso based beverages, and specialty drinks, along
with inspirational music and books. Coffee house will be upscale, not stuffy.
Our community-based focus will be hard to duplicate, even if products and
service are similar.
Excellent Customer Service
Because competition in the specialty beverage market is high, coffee house
will work to ensure that each customer is treated in the same respectful
manner as the next. Technology will play a key role in ensuring that our
customers get that special one-on-one feeling they might experience at a high-
end retail store.

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Our Point of Sale system will not just ring orders, but keep key data on
customers' previous purchases in the area of freshly roasted coffee. In this
manner, sales staff will know about the customer's buying habits and
tastes, and will be able to make suggestions for purchases that will likely
result in increased sales and make the customer feel special.
Excellent service in a community focused environment will be a unique
undertaking. We will ensure that coffee house is a fun place for people to
gather. We will employ the principles such as: Play, Make Their Day, Be
there, and choose Your Attitude.
We will ensure that each employee understands the fundamentals at the base
of any successful service organization.
Quality - We are committed to serving only the best quality beans and
beverages. Moreover, the training the staffs receive will ensure that the art of
espresso making is understood. There is more to a good espresso than the
beans and the machine. At coffee house, we understand it, and will ensure our
customers do as well.
It's the combination of these three elements that make up the competitive
advantage of coffee house.

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Financial planning:
Finance is blood of the business without which every plan is fail so a proper
financial planning is required where you need to invest your money carefully
keeping in view that all requirement are fulfilled. We know the capital we are
investing is 40 lakhs out of which half is borrowed and rest is of owner itself.
A full fledge planning is required that how much is to be invested on different
areas like rent, equipments, building, manpower, furniture etc. and the return
we will get after investment should be well calculated. Coffee house is basing
projected sales on the market research, industry analysis and proximity of
other coffee houses in the area. We are looking to obtain a modest 10% of the
market share.
The cost of goods sold is based on the price list of Espresso Services, Inc., and
is consistent with costs in the coffee and espresso industry. The cost of the
bakery items and candies is 50% of the selling price.
Coffee house will use its POS System to keep cash flow and sales goals on
track, and to indicate which marketing efforts are worth the investment. We
expect sales to easily exceed the break-even point from the first month
onward.
Start up summary:

Start up expense (in rupees only)

Legal 10,000

Stationery etc. 20,000

Brochures/Mailings 8,000

Insurance 2,000

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Rent 10,000

Build Out Expenses 30,000

Initial Marketing 10,000

60,000
Expensed Equipment

20,00
Other 0

Books& Music materials 50,00

0

Total Start-up Expenses 2,20,000

Start-up Assets

Cash Required 2,00,000

Start-up Inventory 80,000

Current Assets 1,00,000

Long-term Assets 4,00,000

Total Assets 7,80,000

Total Requirements 10,00,000

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Break-even Analysis
For our break-even analysis, we assume fixed costs of approximately
Rs.60, 000 per month, which includes our full payroll, rent, and utilities, and
an estimation of other running costs. Average percent variable cost is 25%.
We need to sell about Rs.75, 000 per month to break-even, according to these
assumptions.
Break-even Analysis:
Monthly Units Break-even Rs.15, 000

Monthly Revenue Break-even Rs.75, 000

Assumptions:

Average Per-Unit Revenue Rs.17

Average Per-Unit Variable Cost Rs.15

Estimated Monthly Fixed Cost Rs.60, 000

Marketing Strategy
Coffee house’s marketing strategy focuses on the key elements of the target
markets' soft needs, and the focus of the venture.
Soft Needs:

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 Spiritual Growth
 A place of belonging
 Learning & communication

Venture Focus:

 On-Site Roasted Coffee

 Community Involvement

Pricing Strategy

Pricing in this industry is very competitive. The price of freshly brewed coffee

and specialty beverages doesn't vary by more than a few rupees between the
corner coffee shop and the large chains.
The price of roasted coffee beans can vary. Larger chains, having the benefit
of volume, can charge slightly lower prices per pound. Coffee house will
charge a slightly higher price as our coffees are freshly roasted on-site
daily. Coffee house will roast its coffee to maximize the flavour of the specific
bean. We will also roast coffee to the customer's specifications. This strategy
of bringing the customer in to the whole coffee experience, gives the customer
an additional service, for which a slightly higher price will not be any hurdle..
Promotion Strategy
Coffee house will use several ways to reach new customers. We will leverage
schools, institutes, community organizations, print ad, internet advertising and
word of mouth.
1. Advertising--We'll be developing our core positioning message: "On-Site
Roasted Coffee, Made to Order." to differentiate our service from the
competition.
2. Postcards—coffee house will employ targeted mailings to our customer
base (students). These postcards will announce Grand Opening Specials.
3. Internet Advertising--As customers come in, they will be asked if they
wish to sign up on our internet mailing list. Special promotions will be
available only through Internet "coupons."
4. Media—coffee house will work with local media on several different
"story of interest" venues. The Homework Happy Hour is one example that
would gain media attention at no cost to this coffee house.
Marketing Programs
The programs coffee house will initiate are well designed. These programs
support the soft needs and product offerings listed in the Marketing Strategy

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section, and have been transliterated into "Vision Focus" and "Customer
Focus" programs.
Vision Focus

1. Community Involvement
o Community gathering
2. Spiritual Information
o Product Offerings
o Speakers and Entertainment
3. Welcoming Environment
o Vision Communication

Customer Focus

1. Roasting Expertise
o Micro Roasting Program
2. Custom Offerings
o POS System
3. Excellent Training

o Training Programs

Positioning Statement
For the students who need a place to seek, have fun, relax, and enjoy quality
beverages, this coffee house will be a place to feel welcome, special,
informed, and energized. It will meet the needs of this market. Unlike the
other coffee shops in the city area, this coffee house will be having character
and a purpose.
For the neighbourhood, coffee house will bring a positive message with a
community centred focus. This is a place where all are welcomed and
embraced with a warm greeting and hot coffee. The look and feel of the shop
will ensure that anyone who walks through the door feels right at home. We
want our customers to learn about coffee, and experience quality first hand.

Sales Strategy
The trained baristas at coffee house will handle the sales transactions. To
speed up the customer service, at least two employees will be servicing
clients--while one employee prepares the customer's order, the other one will
take care of the sales transaction. All sales data logged on the computerized

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point-of-sale terminal will later be analyzed for marketing, Cost of Sale, and
volume purposes.
In order to build up its client base, coffee house will use banners, fliers,
postcards and other advertising; utilize customer referrals and cross-
promotions with other businesses in the community. At the same time, we will
use customer retention programs like drink punch-cards to make sure the
customers are coming back and spending more at the coffee bar.
Sales Programs
Internet Coupons - As customers come into the store, they will be asked if
they'd like to put their name on the internet mailing list. Once added, these
customers will receive special "internet only" solicitations for discounts and
specials, as well as a calendar of events.
Community Based Programs – coffee house will partner with community
organizations, schools, and colleges to provide unique offerings which
strengthen the community and provide sales for the store. The Homework
Happy Hour is a prime example of leveraging community needs with sound
sales techniques and business practices.
Direct Mailing – coffee house will periodically mail special product
offerings to people. This promotion will also be used to announce the Grand
Opening of this coffee house.
Sales Forecast
Coffee house will be taking a modest approach to forecasting. Coffee house is
forecasting an 5% average growth which is in line with industry estimates.
With our unique product and service offerings, along with our aggressive
marketing strategies, the sales forecasts are actually on the conservative side.
Strategic Alliances
Coffee house will align itself with key players in the industry. We can put an
appraisal for opening the specialty Coffee Association of Gr. Noida. This
organization will be nationally and internationally known for their knowledge
of, and expertise in, the specialty beverage industry.
Coffee house will also form key alliances with non-competing experts in
Restaurant and Retail markets.
Finally, coffee house will have established itself within the community
through developing relationships with the surrounding Neighbourhood
Associations, key developers and planners of the city and various City
Officials and city Council Members.
These alliances will serve to be conducive to the company's success and
marketability.

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Web planning:

Coffee house will use our website to advertise specials and events, and to post
the monthly menu. We will maintain a confidential email list to
communicate with customers wishing to sign-up for email specials. Our
website is being developed by the owners, and will be hosted with a
professional hosting service which allows us to post our own changes as often
as we wish.
Although we would eventually like to institute an on-line ordering system, we
realize this development may have to wait until the business is firmly
established and has sufficient cash for designing and maintaining these
dynamic features. Online ordering will not only increase sales geographically,
but allow coffee house to utilize the full spectrum of its POS system's
capabilities.

Legal aspects and tax applications:

So when we open any coffee house then we are to go through some legal
formalities and tax applications. These legal aspects and tax applications are
given ahead as:

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Registering name

We will need to register our business name with our state. We can do this by
contacting the Secretary of State's office and requesting the forms that we will
need to fill out. Also, ask them how to search for state trade marks to see if
any part of our name is registered. We may need to do this, also, in our county
at our county clerk's office.

Licenses and Permits

There may be various licenses and permits required for our business. Business
licensing requirements vary from city to city, county to county, and state to
state. Some require all businesses to register, and they collect annual business
licensing fees. Others don't require licenses or registration for unincorporated
businesses unless we are doing business under a fictitious name.We may need
a license or permit for occupancy, sanitation, fire safety and liquor. Our first
step should be to check with our city or town clerk for any local requirements.
We should also check on zoning and sign regulations that may apply to our
business and location.

Apart from these legal formalities we also need to focus on some of other
aspects which government specify to follow strictly for sake of customers and
corporate social responsibilities so these are as:

Food quality

If the problem is the quality of the coffee and other products rather than the
service and it is so poor as to be a breach of contract, again you are entitled to
reduce the bill or refuse to pay.

However, if you are going to do this you need to tell the waiter at the time the
food is served or if you first taste it. The coffee house is entitled to have the
opportunity of putting good the problem.

Under protest

If you do not like making a fuss or you is with a party and do not want to
upset the atmosphere, you can always pay 'under protest' and write on the
back of the bill that you are doing so. This gives you the chance of claiming
against the coffee shop at a later date. Usually only worth it if you are with a
big party

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Free coffee

It is a criminal offence on your part to go into a coffee shop and order a coffee
with the intention of not paying for it. Coffee shop often wrongly believes this
means you have to pay for a meal whatever the circumstances. This is not the
case. So long as you have a genuine reason for not paying and you leave your
name and address, you have not acted in any way dishonestly.

Clear prices

The law provides that you should be given a chance to check the prices before
you get to your table, as well as having a menu at the table. They must make
clear, or show as prominently as the food prices, any minimum charge or
service charge. If these charges aren't there and on your menu and you were
not otherwise told, you can refuse to pay. They are not part of your contract. If
they are displayed you must pay then unless they are unreasonable for the
standard of the coffee shop.

If the coffee shop fails with any of these obligations if runs the risk of a
prosecution by Trading Standards. You can threaten to report the restaurant if
you are in an argument. Most coffee shops will not wish to run this risk, but
frankly there are few examples of prosecutions beings successfully taken.
Trading Standards Officers claim they are too overworked with other
problems to deal with this type of prosecution.

Credit card abuse

Many coffee leave credit card slips 'open' next to the space marked "gratuity"
so that you can leave a tip on the credit card. Some coffee shops continue to
do this even though they have already charged a service charge within the bill.
This may suggest that the service charge was not going to the waiting staff at
all and you may want to ask the manager if this is the case. To avoid abuse of
the credit card you should strike out the empty space and fill the total.

If extra amounts are added afterwards this will be 'unauthorised debit' and you
should refuse to pay. You should check your statements carefully and keep the
copy of the signed slip at least until the amount appears on your statement.
You can then have evidence to put to the credit card company if a dispute
arises.

VAT & Service charges

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VAT must be included in the price on the menu. You should never therefore
have VAT as an additional item on your bill (although it can show a
breakdown of how much VAT you are being charged).

If a percentage charge for service is said to be included in the meal price you
are entitled to reduce the bill if the service has been poor. You are entitled to
reduce it by the amount shown to be the service charge. If it is not specified,
anything up to 15% would be acceptable. But currently government charge
13.5 % sales tax as the charge. For example in Nescafe if manufacturing cost
is 18 rupees and 3 rupees are added into this price as sales tax

To avoid costly legal problems in your coffee house we need to follow some
of legal aspects announced by government. This completely practical, jargon-
free guide gives you the tools you need to protect your coffee house from
legal exposure of every kind. It prepares operations managers to comply with
the law and avoid or limit liability in virtually any situation---from hiring and
managing employees and dealing with customer complaints to ensuring safety
and security, obeying regulatory requirements, and much more. The features
are:

* Manager's Briefs that focus on critical legal aspects of your operations

* Realistic scenarios that are analyzed to help prepare you to make the right
decisions in challenging situations
* Checklists to help you avoid liability before any incident occurs
* A companion Web site that provides additional resources, training
assistance, and more

We can arrange a meeting with an accountant to discuss tax strategies and

ways to maximize your business tax deductions. You can get referrals from
other business owners you know or sometimes your banker.

Why we interested in this project:

We thought a lot on making business plan on different businesses but I found

coffee business that can provide me more profit with small investment. We
know now a day’s peoples have lot of work and hectic schedules due to which
they get tired and then they need a suitable place nearby their workplace
where they can sit, talk and remove their tiredness and feel fresh and attached
with others.

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Coffee is a legendary beverage that has many wondrous tales and a ton of no
nonsense business. This beverage has been a great liquid that has done
everything from heal to quench thirsts around the globe. Billions have enjoyed
this strong, sometimes bitter drink. Over the centuries the health effects of
coffee drinking have ranged from good to extraordinary. Even though some of
the hype is not true, there are some facts about its benefits.

Coffee is exchanged in cities around the world and more than 40 million cups
are consumed every year. The drink continues to increase in popularity and
even though only 10-20% of coffee drinkers have more than a cup a day,
retails sales come in around the 9 billion mark every year.

In addition to the drink there are plenty of accessories that fuel the coffee
culture. Raw beans, roasters, brewers and grinders are purchased on a regular
basis. These home models often come at a hefty price.

Cappuccino and Latte are names that most of us are very familiar with. With a
few extra ingredients, you can turn a cup of coffee into a mini meal. There are
flavoured coffees and toppings that you can add to your drink. There are
endless varieties to choose from.

Conclusion:
After completing this business proposal I can say that you will get fruitful
results when you would have implemented it. We know in today’s competitive
taking any investment decision is really a daring and risky step because we are
taking decisions in phase of uncertainty where sometimes even all marketing
theory may not work then their practical experience work there. Owning your
own coffee business has mass appeal. Picture yourself as the proprietor of a

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successful coffee shop and just think of the many positive attributes that you
associate with that image: freedom to make your own decisions, financial
independence, respect from the local community, your family and staff, and
the satisfaction of providing a sought-after product to your customers in a
social environment that brings people together, just to name a few. Just smell
that fresh coffee brewing! What could be better? Before you commit yourself
to that new reality, make sure that you are basing your decision on facts and
not solely on your desires and a well intentioned misinterpretation of the facts
- accept that there is a difference between what happens and what you want to
happen.

We know Gr. Noida is growing at a rapid rate with opening of so many

companies and institutions thus lifestyle of peoples too getting high with
increase in their purchasing power but they people really have some workload
in this competitive environment and this idea of coffeehouse will be an right
decision in the city because after they leave their offices and institutes look for
an place where they can relax and have some entertainment so at that moment
of time a coffee house can be a better place for them to get that instinct. So in
conclusion we can say that understanding the need and demand of this rapidly
growing market we can really click in market with such a fresh project which
is really different from others and have uniqueness that giving it an
competitive edge.

Have fun with your coffee shop, design it, manage it and personalize it as your
own - just be careful to not lose your identity to the business, as this will only
create problems for you and inhibit your ability to make potentially difficult
but necessary decisions for the good of both owner and business.

WORD OF THANKS

In the end we thanks to all those who directly or indirectly helped me to

conduct the survey and complete this project successfully.

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We would also like to thank all the readers who would study this project. We
request the readers to let us know the mistakes we have committed if any.

MR ANKIT MISHRA.

MR. INDRAJIT CHAKRABORTY.

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