Business Plan

This is Life Bookstore and

Cafe

Name:

Executive Summary
This is Life Caf is a start up company operating a caf shop with a bookstore, with the mixed-style
of business, This is Life Caf expected to establish a good start in Halifax and will expand to other
city in next a few years. This business plan will demonstrate the whole prospect of our business by
several parts, which include introductory description, industry analysis, marketing plan, operating plan,
financing plan, risk management and globalization factors.

Contents
1.

Introductory Description..........................................................................................................2

2.

Industry Analysis.....................................................................................................................3

3.

4.

5.

6.

7.

2.1

Starbucks.......................................................................................................................3

2.2

Uncommon Ground.......................................................................................................3

Marketing Plan.........................................................................................................................4
3.1

Target Customers..............................................................................................................4

3.2

Pricing Plan.......................................................................................................................4

3.3

Promotions........................................................................................................................4

3.4

Advertising........................................................................................................................5

Operational Plan......................................................................................................................6
4.1

Location............................................................................................................................6

4.2

Production.........................................................................................................................6

4.3

Customer Service..............................................................................................................7

4.4

Personnel...........................................................................................................................7

Financial Plan..........................................................................................................................8
5.1

Budget...............................................................................................................................8

5.2

Capital Structure...............................................................................................................8

5.3

Revenue Forecast..............................................................................................................8

5.4

Expense Forecast...............................................................................................................9

5.5

Profit and Growth Forecast...............................................................................................9

Risk Assessment....................................................................................................................10
6.1

Risk associated with Accounts Payable..........................................................................10

6.2

Operating Risks: Insurance Plan.....................................................................................10

Globalization..........................................................................................................................11
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1. Introductory Description
This is Life Cafe is a new business type begin operations in August 2016. The business is a Coffee
shop and a Bookstore, intended to serve the community in Halifax. Our goal is to provide customers
with the convenience of reading, chatting and having coffee, have some place to rest and to
communicate.
This is Life Cafe will be running in a partnership. The partners will be Andy, Eunice, Betty, Tim,
Ashman, Sarah. Eunice, Betty, Tim are skilled in cooking, Andy is good at accounting and Ashman,
Sarah do the management.
Our objectives are to complete the start up activities and open the business abstract customers in 2016,
and maintain a high level of service in next three years then become the industry leader in this field of
business to be the best Bookstore in the area and to supply a safe meeting place for the community
where they can meet with their friends and have a cup of coffee. We want to see our store is the most
popular, and brought new friends, have a loyal customer or less. We also want to produce high quality
food, will meet the social age groups.
It is to expand our business and enter different areas. Our shop must be called by its excellent service
throughout the country. We will market our youth department store had a lot of students do not have
laundry facilities, vacationers and ordinary housewife. Cafe will provide the best coffee and a healthy
diet. We feel that society needs a safe place to meet our business will grow rapidly.
We will ensure that our business is not destroyed may bring us bad publicity, leading to a lack of
customers visit the shop live on penalties impede social environment. We will provide a clean
workshop, which will be environmentally friendly.

2.

Industry Analysis

In the past year, the number of home coffee parts outside Canada declined three per cent, while traffic
remained almost unchanged cafe. For coffee chains such as Starbucks and Tim Hortons and restaurants
move into the coffee business, such as McDonald's, which is forced to change strategy.
Canadians like to go to the cafe, but sometimes they are looking for more than just a cup of coffee,
although the whole economy are not very good in recent years, they still contribute a high revenue to
the coffee shop industry.
There are two general competitors in our cafe market. They are the multinational specialty beverage
chain such as Starbucks. and the local coffee houses like the Uncommon ground.
2.1

Starbucks

Starbucks is an international corporation, which is the leading premium coffee cafe in the world, with
more than 23 branches locates in Great Halifax. Due to its distinguishable reputation of Starbucks will
be a threat to This is Life Cafe.
2.2

Uncommon Ground

Uncommon Ground is another large cafe franchise in Canada and Halifax, with stores in most major
residential area and has 3 branches located in the Great Halifax region. With the renowned celebrity
compared to our brand new cafe, it becomes a great challenge for the business to establish a certain
market position.

3. Marketing Plan
Our Primary objective is to break even in our first year of operation; we also hope to establish a good
client base, with regular customers continuing to use our products and services.

3.1

Target Customers

Our cafe s overall business strategy is to implore to the all age subsections of the Halifax Community.
the cafes target market spans among various age groups from seniors to parents of young children to
high school and college students. This will allow the business to capitalize on increased traffic as
numerous school and unrelated school events are held at the High School throughout the year.
Also, our target customers include young working professionals, as they will tend to use all our
services at once. They will enjoy some quiet Sunday afternoon reading with coffee and staying with
their friends in an elegant coffee shop. These customers like to come in and use the laundry services, as
well purchasing Food and Beverages, and using the wireless Internet Access.

3.2

Pricing Plan

The price of the Cafe's products is calculated on the basis of its competitor's prices, as well as the cost
plus margin, which involve a percentage for a profit on top of the total production cost. In regards to
payment, customers have the choice of purchasing their foods/drinks by cash or cards.
Once we have established a strong consumer basis, we will slowly increase prices and thereby
increasing profits, but will still insure that we offer consumers value for money and good service for
them.

3.3

Promotions

Sales Promotion - Being a book cafe, This is Life Cafe has arranged an agreement with the local
bookshop in regards to discounting products from the cafe on the conditions of purchasing an item, i.e.
a book from the shop. Moreover, through a membership scheme, frequent customers will be able to
receive discounts off from selected drinks and beverages.

The business will attempt in gaining publicity by sponsoring local events. Also by ensuring the quality
of our products and service, it will create a reputation amongst its customers and its competitors.
Discounts will be available for the loyal customers. We will also offer a free coffee after the 10th
buying. We will have our own group coupons. These coupons will be good for discounts on purchases
and will be distributed on a promotion to customers to use to encourage them to have a return visit.

3.4

Advertising

The business will advertise through the following methods:

Radio

we will choose a particular week and each week day (Monday to Friday) we will advertise twice, once
in the morning and once in the late afternoon in the morning and evening rush hours where most people
will be listening to their radios in their cars.

Facebook page

We can also use Facebook page to keep customers informed of any menu changes or daily specials. A
presence on Facebook will assist us in getting the word out about the taco stand within the local
community and become the lead focus in our social media presence.

Webpage

We will have its own website with online ordering. The site will list the current menu and any current
available special items. We will link the site to our Facebook page and our various sponsored
organizations within the local community. The webpage will also give a background on the menu items
and the suppliers and farms from which we obtain our all natural ingredients that go into every taco we
produce.

4. Operational Plan
4.1

Location

The location of our premises in the mall is very conveniently situated near the south end Halifax area
closed to major University: SMU and Dalhousie. SO that we can attract many current university
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students. There are some coffee shops here but not so many. Also the South end Halifax has some
young professionals living here they will be our loyal customers. Our image is a modern one so as to
attract all types of people to our shop.
The size of the shop is 100 square meters. There will be 16 tables and 3 coffee machines, 10 big
bookshelves with thousands of books available to sell or to borrow.

4.2

Production

This is Life Cafe provides cold beverages, hot drinks and desserts. It offers a comfortable place with
appealing and unique facilities in which they can choose to relax in. All of our products are guaranteed
with a high quality and great taste and is backed with a policy that guarantees any unsatisfied
customers an alternative choice from our menu free of charge.
In This is Life Bookstore Cafe, there will be espresso machines to make the coffee and kitchen staff
lead by one main chef to make the food. We will have kilns in the shop to supply us with hot water.
Costs of production include; electricity, water and labour.
To enhance the quality of our products, we plan to buy the best quality ingredients for the coffee and
the food. This is Life Bookstore Cafe will strive to always have good quality brand of machine to
provide long lasting usage.
Kitchen is of greatest importance, and cleanliness throughout the restaurant. (Floors, table tops, chairs,
bathrooms are well cleaned) Products are always fresh. Kitchen gears are to be cleaned on a regular
basis. Garbage is to be disposed of correctly. Where its possible recycling is to be done. The delivery of
products meets the environmental regulations.

4.3

Customer Service

This is Life Cafe dedicates itself in providing customers with prompt and amiable service as the
business strives to satisfy its customers. It also provides additional reading resources for the
convenience and enjoyment of its customers, which includes books, magazines and newspapers.
We plan to ensure that our food is served with a minimum waiting time. Management and waitrons
must always be polite, friendly and helpful. The staff of This is Life Bookstore Cafe will be
knowledgeable about the food products and coffee products. We plan to have clear and understandable
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menus that are aesthetically pleasing. We provide customers with a more than adequate rest room. The
staff of the Bookstore will provide sufficient help and service to customers. Our staff will be well
trained in watering, making coffee and making food. Therefore, our products can only get better.

4.4

Personnel

Professional labour is required for the owner and managerial positions. skilled labour is required for
watering positions. Skilled labour for chef positions and semi-skilled for kitchen staff.
Recruitment of new staff members will be done through in store/newspaper advertisement, hand-out
advertisement or recommend by friends. Before the managers are fully employed they will undergo 10
training shifts where as the Bookstore staff, kitchen staff and waitrons.

5. Financial Plan
5.1

Budget

One off start up costs associated with the set up of this business:
Purchase of place
decorating of shop
Advertising / marketing
coffee making equipment
forward order of stock
Uniforms
Staff costs
Other
Total Start up budget costs

5.2

$
50,000.00
$
30,000.00
$
15,000.00
$
20,000.00
$
20,000.00
$
1,500.00
$
1,500.00
$
5,500.00
$
143,500.0
0

Capital Structure

The start-up will be financed by our six founders; each member contributes $25,000 and get 16.67$
owners equity. Total capital will be $ 25000*6 = $150,000. We will use $143,500 to pay the initial
budget and use remaining money as retained money. The start-up bookstore coffee shop business will
run under a partnership business structure.

5.3

Revenue Forecast

We expect to initially serve around 100 customers a day. All the customers we expect that
35% will be over the age of 30 and 20% will be 18 or younger. Other 45% will be between 18 to 30.
Our daily revenue assumption is based off an average customer spending $6. This is a very realistic
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revenue assumption. That means we will have 30*100*6= 18000 revenue on coffee and other products.
We also expect a book selling revenue of 30 books a month, one book per one day. We assume we can
get $20 per book sell. We may also get revenues from coffee mugs and other gears, we assume the
revenue will be same as book selling. So totally revenue expectation is $18000+$600+$600= $19200
per month.

5.4

Expense Forecast

We assume our gross profit margin is 50% for coffee sell and book sell. That means the variable
expense will be 50% of our revenue, which is $9600. Also we have a salary expense like hiring three
two full time workers, the cost will be 2500 per month per person and that is $5000 in total. Other fixed
cost involves rent cost, machine cost, electricity and waters, our estimation is $1500 per month.

5.5

Profit and Growth Forecast

As we calculated above, our profit each month will be $19200-$9600-$5000-$1500 = $3100, That is
not a big number when considering our total capital $ 150,000, we will have a return on equity for one
year $3100*12/$150,000 = 24.8%, which is not bad. Also we assume the revenue will grow quickly in
next three years with same return level. We assume the revenue will grow 20% each year in next three
years.

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6. Risk Assessment
6.1

Risk associated with Accounts Payable

When This is Life Cafe purchases their chemicals and detergents for the Bookstore and supplies for
the restaurant on credit, an accounts payable risk will occur. The suppliers may allow us to purchase
these goods and giving us a chance to pay for it at a later stage, with no interest charge. Trade payables
are an important source of finance to the business because in the short term we can increase the total
internal finance by delaying the payment to trade payables. We will have our financial manager
compare and work out if paying early and receiving discounts is more worthwhile to the business than
delaying payments. If delaying payments is worthwhile we will not abuse the credit system. We want to
have a good relationship with our suppliers, so that we can receive quality goods and have goods
delivered promptly so that we can achieve our budgeted amounts for the working months and earn
maximum profit. Arrangements in our case are not longer than two months, if we take longer than two
months to settle, then interest will be charged.
Each supplier will have an agreement with us in respect of the terms and conditions of credit limit,
early settlement discount offered and interest for overdue settlement. It is therefore advisable to pay
creditors within credit arrangement to ensure that your future credit referrals will be of good standing.
If suppliers cannot be paid, then they should be contacted timeously to make future arrangements for
payments. Day to day purchasing of restaurant goods will be paid in cash e.g. Bakery and dairy
products. Raw meats, other eatable goods and beverages will mostly be bought on credit.

6.2

Operating Risks: Insurance Plan

We use different types of insurance for specific aspects of the business. Property insurance ensures
protection against most risks including fire, flood, theft, etc. Liability insurance offers protection of
your business assets. This insurance covers any damage incurred to the businesses assets. Damage
caused intentionally and contractual is not covered under liability insurance policies. Workers
compensation insurance covers medical care and compensation for employees injured at work.

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7. Globalization
Although we are not considering to expand our business to other countries in a short-term. But in
todays business circumstance a globalization review of our business is quite necessary.
Several factors will be important if we expand our bookstore caf business to a new country:
Culture factors: In different countries the culture will be different. As we know some countries has
religion forbidden about some kind of food. Also the way to deal with customers will be different that
is what we need to consider about.
Economy factors: In some countries the economy situation will be very fluctuating. If we get into this
market in good years and get a good profit level that does not mean, we will have the level of profit for
long. In future the situation can be worse.
Labour Price and regulations: In Canada we have unions and we have minimum wages. In other
countries they may both neither of them. However, they may have different position of labour
regulations.
Financial regulations: Some countries can be a good market but they have restricted financial
regulations such as limitation of foreign direct investment. In this case we may need to consider a local
partner.

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