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Introduction: Organizational Structure

Discuss about the Coffee Shop Business Plan In Australia.

Location

The Sunrise Coffee Shop will be located in the prime section of the commercial, shopping, entertainment, and tourist district of the downtown Queensland. The café will be located on the ground floor in a location which offers a beautiful view of the busy district and is still away from the hustle and bustle of the downtown. It’s a busy place throughout the year and offers an opportunity for generating good business all the year round (Hu, 2014).

Renting the shop

During the start up phase we plan to rent the premises and a beautiful 2500 square foot space has been leased for a period of 2 years, which was earlier occupied by a book café. The place has an eclectic feel to it and the woodwork and interiors are aesthetically suitable for the atmosphere we would like to create in our coffee shop (Ruta, Saul, & Tomasz, 2012).

In the coffee business the staff and the team make a huge difference to the sales as people look for a coffee culture and not just the beverage. The management team of the Sunrise Coffee shop would be led by a manager who already has a five year experience in the  management aspects of the beverage industry and is well versed with the inventory requirements of a Coffee shop and will devise business strategies and look after other marketing and managerial functions and the daily operations of the Sunrise Coffee (Bouncken, & Kraus, 2013).

Besides the manager there will be three full time baristas who would be in-charge of the coffee preparations. To meet the other staffing needs, six more employees would be hired on a part-time basis in the first year of the operation. Looking at the sales volume the strength of the part time employees would be increased accordingly in the second year (Hu, 2014).

The Sunrise Coffee shop would like to create a unique place in the busy world today, where the people would like to come, sit down, and read or socialize over a cup of their favourite coffee and a bite of the best pastry in town. It will be a place where we hope to provide an ambience, a customer friendly serving staff, and some of the best coffee. We want the Sunrise Coffee to be a place where people can get rid of their tension and stress and enjoy a leisure time with their coffee (Xie, Zhang, & Zhang, 2014).

Location

The main objectives for the Sunrise Coffee in the first year are:

  • To make it to the list of the “Best Coffee Shops” by the local coffee bar and restaurant guide book and be the most preferred destination for a coffee experience in the district.
  • To achieve a 20% profit margin towards the end of the first financial year and increase the profit margin by a minimum of 5% every subsequent year (DaSilva, & Trkman, 2014).

The main product offering of the Sunrise Coffee will be roasted gourmet coffees with varieties like espresso, cappuccino, candy-bar latte, carmelicious, Mocha, White mocha, and brewed coffee. The coffees will be offered with skimmed and whole milk and also an option of soy milk. Along with the coffee line we also plan to offer teas, some other refreshment beverages, and pastries and sandwiches to go along with the beverages. We also plan to sell coffee beans to our gourmet clientele (Xie, Zhang, & Zhang, 2014).

There is high rate of both entry and exit in the coffee shop business because there are very few entry barriers to the industry in Australia. However, the coffee shops and café industry in Australia has reflected a strong growth and is expected to grow even further as the economy of the country strengthens further. The industry revenue forecast for the industry predicts a growth rate of 4% every year over the period of the next five years starting from the year 2016-17 (Cafes and Coffee Shops in Australia, n.d.).

The demand for good quality gourmet coffee has increased in Australian consumers to such a level that even during the phase of global economic recession the coffee industry continued its growth in profits as compared to the other sectors of the food and hospitality industry. This has increased the demand for smaller coffee shops and gourmet coffee houses in the different locations in the city where consumers have a quick reach to their favourite blends of coffee (Café or coffee shop - Business – ABLIS, n.d.).

The start up costs of a coffee shop is pretty low as compared to the other industries. The coffee machines can be a costly equipment to be purchased by a new entrant and the best models can cost anything near $ 10000. However, coffee machines along with the other equipment and fittings can be leased, making it much more cost effective in the initial years. The industry is very fragmented and the coffee shops have a much lower share of market concentration in comparison to the other industries (Cafes and Coffee Shops in Australia, n.d.).

A coffee shop is a very customer service oriented business and therefore the risk that the services might not live up to the standards perceived by the customers can prove to be bad for the business. The industry suffers from a high rate of employee turnover especially in the casual staff and this may affect the services being offered by the coffee shop adversely. Since the coffee industry has very few entry barriers, therefore it is very important to maintain the high quality of the products being offered at prices which are competitive (Salerno, DaSilva, & Bagno, et al, 2015).

The coffee shops face a lot of competition not just from the local cafes but also from the big national and international chains like Starbucks, Costa Coffee, and much more. Therefore, one has to plan the marketing and advertising campaigns effectively and aggressively and top up the menu with new product offerings to tap into the target market (Souto, 2015).

 The pricing of the final products is dependent on the supplier costs. Therefore, the menu has to carefully planned and regulated so that our products can be competitively priced and to ensure that the cost of raw materials does not exceed the cost of sales and the quality is also maintained (Souto, 2015).

The Sunrise Coffee Shop’s strategy will be to target new customers, retain the old customers, and getting the existing and new customers to come back repeatedly and more often. The USP of the Sunrise Coffee Shop is providing its customer with not just a coffee of their preference but also an ambient environment in which they would like to spend some leisure time. Comfortable sofas instead of chairs and soft music will help the customers feel relaxed and will differentiate The Sunrise Coffee shop from the other competitors in the market (Salazar, Soto, & Mosqueda, 2012).

The baristas have been all handpicked and have a high level of professionalism along with passion for coffee which reflects in their beverages. The marketing and advertising strategy plans to use this point as a selling point in its promotional campaigns. Sunrise Coffee shop plans to promote the message of environmental awareness through its marketing and advertising campaigns. We also plan to enter into collaboration with the local environment preservation groups and promote both health and environmental awareness on our product packaging and displays in the coffee shop (Velu, 2015).

One of the key factors which affect the success rate of a coffee shop business is the target market that you select and devising a business strategy to focus on that particular segment. Another factor is to manage the cash flows and quality controls in the coffee shop and to hire not just skilled baristas but also good business managers. The other crucial element is to operate the coffee shop at full capacity and also be flexible enough to adjust the products and services according to the changing dynamics of the target customers (Saeed, Henk, & Ilan, 2017).

References

  1. Bouncken B. Ricardo, Kraus Sascha (2013). Innovation in knowledge-intensive industries: The double-edged sword of cooperation. Journal of Business Research, Volume 66, Issue 10, pp. 2060-2070. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0148296313000568
  2. Cafes and Coffee Shops in Australia. (n.d.). Retrieved August 09, 2017, from https://www.ibisworld.com.au/industry-trends/market-research-reports/accommodation-food-services/cafes-coffee-shops.html
  3. Café or coffee shop - Business - ABLIS. (n.d.). Retrieved August 9, 2017, from https://ablis.business.gov.au/QLD/resource/
  4. DaSilva M. Carlos, Trkman Peter (2014). Business Model: What it is and What it is not. Long Range Planning, Volume 47, Issue 6, pp. 379-389. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0024630113000502
  5. Hu Baoliang (2014). Linking business models with technological innovation performance through organizational learning. European Management Journal, Volume 32, Issue 4, pp. 587-595. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0263237313001254
  6. RutaAidis, Saul Estrin, Tomasz Marek Mickiewicz (2012). “Size matters: entrepreneurial entry and government”. Small Business Economics, Springer Publication, Volume 39, Issue 1, pp. 119-139. Retrieved from: https://link.springer.com/article/10.1007/s11187-010-9299-y
  7. SaeedKhanagha, HenkVolberda, &IlanOshri (2017). “Customer co-creation and exploration of emerging technologies: The mediating role of managerial attention and initiatives”. Long Range Planning, Volume 50, Issue 2, pp. 221-242. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0024630115000953
  8. Salazar L. Alejandra, Soto C. Ricardo, Mosqueda E. Rafael (2012). The impact of financial decisions and strategy on small business competitiveness. Global Journal of Business Research, Vol. 6, No. 2, pp. 93-103. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1945906
  9. Salerno S. Mario, daSilva O. Debora, Bagno B. Raoni, et al. (2015). Innovation processes: which process for which project.Technovation, Volume 35, pp. 59-70. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0166497214001072
  10. Souto E. Jaime (2015). Business model innovation and business concept innovation as the context of incremental innovation and radical innovation. Tourism Management , Volume 51, pp. 142-155. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0261517715001120
  11. VeluChander (2015). Business model innovation and third-party alliance on the survival of new firms. Technovation, Volume 35, pp. 1-11. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0166497214001291
  12. Xie L. Karen, Zhang Zili, & Zhang Ziqiong (2014). The business value of online consumer reviews and management response to hotel performance. International Journal of Hospitality Management, Volume 43, pp. 1-12. Retrieved from: https://www.sciencedirect.com/science/article/pii/S027843191400125X
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