3. Body / Narrative (discuss the following)

A. Capital Structure State total money your business will need (start up items + 1 month expenses). Then, how do you plan to get it? What is your debt equity ratio? If you need a loan, give bank name, payments and interest charged. Each group member can contribute a maximum of $10,000 equity. Short and sweet paragraph or two, written after the rest of the draft is finished.

4. Chart /Appendix Section

I. Start Up Items The items you need to buy to be ready for the first day of business, subtotaled by category, as well as a grand total. This is the place for details on items needed and their cost.

Tips:

1. Complete all charts first, THEN write about it for the body. Take this advice!

2. Make sure you include all relative numbers from previous drafts (HR, Promotion, etc)

3. Always summarize the biggest idea first, which is usually the total number or cost. Give all totals up front (Start up costs, capital structure, etc). Smaller details can be mentioned last or saved for the appendix.

4. Start up items is a lengthy process—make sure to tackle it with plenty of time

5. Your Break Even (BE) estimates don’t need to cover the total loan amount—only the payment each month.

6. For highest marks–in the Body, clearly state your business reasons for all decisions you’ve made.

7. For the Body, look at what you’ve written and ask yourself, “would I like to read this? Would I clearly understand all the facts?” and if the answer is ‘no’, then organize it better.

8. Page numbers, page numbers, page numbers! For the drafts, they can be handwritten.

9. Please use the Assignment Details as a template for the order of information.

10. Label each chart! Each chart needs to fit on one page.

11. Watch the typos and grammar; they count.

Read directions carefully. Points are taken from missing information or not following directions.

Table of Contents

Body/Narrative Section:

A. Business Description….……………………………………………………………………………………………….2

B. Target Market………….……………………………………………………..……………………………..……………..2-3

C. Competitor Analysis………………………………………………………………………………………………………3-5

D. Pricing…………………………….………………………………………………………………………………………………5-6

E. Promotional Plan..……………………………………………………………………………………………..………..6-7

Chart/Appendix Section:

I. Promotional Budget Chart.…………………………………………………………………………………………..7

II. Pricing Chart……………………………………………………………………………………………………………………8

Appendix:

A. References………………………………………………………………………………………………………………………9

Body and Narrative Section

A. Business Description

Our business is a coffee shop with a slight twist by being able to buy in-house made Kombucha on tap. Our products are coffee, kombucha, and some food items. We serve coffee of many types so there is nearly anything for any coffee drinker. We serve food items so the people that come in not wanting any beverages can still be happy. We also serve our signature in-house made kombucha. This is the main product that we are trying to sell to the people.

The location of our business is in the downtown part of Portland by the Portland State University campus and around the banks and firms that are located near it. We target the area where there is a lot of foot traffic from various types of people, including students as well as business people. We think that by targeting the demographics of students and workers we can gain the most profit by satisfying the main type of people that go in the area quite often.

Our business will serve the community around PSU by getting early workers and some caffeinated beverages and college students a weird beneficial drink to quench their thirst. Serving the community is one of the top goals of our business. Not only are we supplying the people of PSU the products of coffee, kombucha, and more, we are supplying them with a community with every cup what we sell. We hope to have a place for anyone and everyone in our shop.

B. Target Market

We have two main different target markets, the first one being students at Portland State University or Portland Community College as well as high school students who are into the hip Portland coffee shops that are seen on social media platforms such as Instagram, Facebook, Snapchat, etc. According to the PSU website, there are over 28,000 students attending PSU and 77.5% of them were residents of Oregon so they are most likely familiar with the Portland vibe and all the local coffee shops. Not only that but there are over 90,000 students that attend PCC, these students all need somewhere to study and they don’t have dorms so we know if we inform the students about our coffee/ kombucha shop some of them wouldn’t mind trying it out. These students will be most likely people who enjoy coffee and/or kombucha and like to have a place to study, hang out, or socialize with friends.

Our other target market is going to be working business people around the PSU area. There are over 30,000 workers in downtown Portland and almost 22,000 of them are white collar workers meaning they are business people. These people are going to come here because they as well enjoy drinking coffee and/or kombucha and want a nice relaxing place to possibly have a business meeting or to sit down and get some work done.

These customers are going to want a great experience and high quality products which they will receive to keep them coming back for more. They also want somewhere they feel comfortable to hang out for extended periods of time. One of the reasons they will be coming to our coffee and kombucha shop is because we are providing them with free Wifi which is good for anyone trying to study or get work done. We know people like free Wifi because of how successful Starbucks (A coffee shop competitor) is. Wifi isn’t the only reason to pull customers our way, another thing that's going to keep these customers coming back is the quality of our products. A lot of consumers only go to Starbucks because it is so popular and well known but we will make sure our coffee is higher quality and our customers feel comfortable and relaxed while studying unlike how loud and busy Starbucks is. We are going to make coffee and kombucha that our customers are going to enjoy and look forward to purchasing.

C. Competitor Analysis

Three competitors that we chose were Starbucks, Case Study Coffee Roasters, and Oracle Coffee Company. We chose Starbucks because we wanted a comparison of a brand name coffee that has thousands of locations across the world. We chose Case Study Coffee Roasters because we wanted a local store that’s been in business for a while but hasn’t gone national. We also chose Oracle Coffee Company because their store is fairly new and quite popular so it would be nice to know if there’s anything that we can learn from them.

Starbucks

Starbucks is a coffee shop chain founded in Seattle, Washington in 1971. Worldwide there are over 20,000 locations. Starbucks is an extremely popular brand with a revenue of over $19 billion with around 238,000 employees. They are considered a competitor to us because they are one of the most popular coffee shops in the world whose target market is similar to ours.

Pros:

· Large variety of drinks

· Quick service

· Friendly (depending on who you’re talking to)

· Some locations have a convenient drive through

· Same flavors no matter which location you go to

· Seasonal flavors

Cons:

· Bad sandwiches (dry and flaky)

· “Scalding hot drinks”

· Noisy shops

· Busy shops

· Dirty bathrooms

· Not many options for those that don’t want caffeine

How can it impact our business?

Since we serve both coffee and kombucha we won’t have to worry about customers who can’t have caffeine. For a larger variety of drinks, we can also have seasonal flavors that could last 1 to 2 weeks longer than the Starbucks flavors, mainly so people could savor the season a little while longer. For the bathroom problems, we could simply clean them more regularly. For customers who can’t have hot drinks, we could serve them iced. Although it isn’t probable that a new business like ours would have a drive through, we are located in an easily accessible place where many people can order to-go.

Case Study Coffee Roasters

Case Study Coffee Roasters is a coffee shop with 3 locations in Portland, Oregon. Their products include a small variety of coffee and various souvenirs. They can be considered a competitor because they have a similar business to us and there are many positive reviews of their facility on sources such as “Yelp!”.

Pros:

· Professional and knowledgeable staff

· Friendly service

· Offer catering services

· Located next to a parking lot and a bus stop

· Simple yet popular flavors

· Seasonal flavors

Cons:

· No attempt to cover hair at all

· Lack of cleanliness

· The underside of their tables have gum stuck underneath

· Boring view of:

· Parking lot

· Road

· Loud due to the streetcar passing by frequently

How can it impact our business?

Hopefully, the people that we hire will have some knowledge about the products that they make. Since our location is near a mall we won’t have to worry about our location. Although we won’t provide a catering service we can provide coffee beans so that customers can make their own coffee at home. We will require that our employees wear hats, aprons, and gloves whenever they come near/into contact with our products. Also, one of the jobs we can give to our employees is scraping dried gum off from under the table which isn’t a common job.

Oracle Coffee Company

Oracle Coffee Company is a multi-roaster coffee shop where they serve coffee from several different roasters at a time. They serve coffee that comes from different roasters from all around the country.

Pros:

· Serves items with plant-based milks

· People who are lactose intolerant are able to drink their products

· Bakery that serves vegan products

· Nearly completely vegan options

· Popular for places like Portland where people are starting to become more health conscious

· “Beautiful décor”

· “Tastes like their cost”

· Actually worth their high prices

· No dairy at all

· Registered in top 10 coffee shops in Portland

· Serves tea as well

· Spacious and well lit

Cons:

· Not many flavors compared to other shops

· Employees don’t say why they only have plant based milks

· Don’t serve real milk at all

· Relatively new so not many people know about them

How can it impact our business?

Like them, we can have an option serving alternative milks for those who don’t prefer cow-based milks. We can serve vegan products because this is Portland, a city filled with health-conscious people. Although we won’t automatically rank in the top 10 coffee places to go to, as long as we work hard and keep a good reputation it won’t be hard to get noticed

D. Pricing

We will start out with a penetration price for our products offered. We want them to be fairly inexpensive so new customers aren’t afraid to come in and try the variety of kombucha and coffee products we offer along with pastries. We will also incorporate psychological pricing, more specifically the “even/odd pricing”. We believe more people will be willing to try and buy our products if everything is priced at an odd number. This is due to seemingly making it seem like it’s more inexpensive than what it actually is. We will also be offering discounts for certain drinks on certain days to promote the sale of specific items. We believe this will be a good for marketing as well because it may prompt people to think of us first if they know they can get a cheaper deal than the competitors around us. In addition to all of that, we will also be offering a customer loyalty discount in the form of punch cards to better promote repeat business and build a strong customer base (Magloff, “Cage Pricing Strategy”).

After reviewing menus and pricing from our competitors, we gathered ideas for our prices. We looked at their base prices and adjusted our prices due to factors like sizes as well as the products needed to make our beverages. We attempted to find a balance with our product prices. A latte from Starbucks ranges from $2.95-$4.15 and at Case Study Coffee $4-$4.50; here at Koffee + Combucha! the price of a latte ranges from $2.65-$3.95. We aim to be affordable, but also make a profit.

E. Promotional Plan

Our top competitor, Starbucks, doesn’t spend billions of dollars on conventional advertising such as billboards, being in newspapers, or even television. They gain their reputation mainly through the customers’ reviews and from their well-known brand name. Starbucks also advertises by using social media platforms such as Twitter and Facebook. One of our other competitors is Case Study Coffee Roasters. They have a good reputation from their customers so it is one of their promotional advantages. They use social media to promote their products as well as having their own blog to build a relationship with customers. Another competitor, Oracle Coffee Company, is relatively new so not many people know about them. They only have Facebook and their own website as their social media advertisement.

Our promotional budget for the year is $1,690. Every business must have a promotional strategy during the startup process. One of our promotions that we will be offering is a “customer loyalty” punch card as mentioned above. For every 10 beverages purchased, the customer will get a free one. This will promote repeat business and as our customer base grows, it will also, in turn, increase our sales. It will also be used as a marketing tool. A Pack of 500 business cards purchased monthly, will cost $9.99 through Vistaprint.com. The punch cards will be given out to customers, dropped off at local businesses and given out to students on campus with the first of the 10 beverages punched to give our potential customers even more of an incentive to visit our shop and try our beverages.

Content marketing will be done through our website as well as through other social media websites. We will have a Facebook page, an Instagram account, and a Snapchat account. We will post pictures of our products and our baristas and customers enjoying their beverages or food. We will also use these platforms to market our daily/weekly promotions. In order to get our customers to like our pages, we will offer a 10% discount on their bill when they like our page and check in. They can also receive a 10% discount for leaving a Yelp or Google review of the business. We believe this will be the most effective form of marketing for our business because many consumers rely on reviews to decide where to spend their money. In addition to the that, the more likes and followers a page gains on social media, the bigger the chance that people will see it. As a result, it will be an avenue of creating awareness of our product to more future potential clients and the process will repeat itself over and over again.

This method will only cost our staff time and can be accessed by our customers immediately through their own social media pages via their phones or laptops. We will make a point to take pictures of our products and post them on social media platforms such as Facebook, Instagram, and Snapchat to gain the attention of current customers and future customers. We can decorate the shop area to make it look inviting and take pictures of the shop area to post on our social media, (such as a photo booth area) so customers may be more informed about our place and what the business feels like and what it has to offer. Live streaming to introduce the shop can also make people feel the vibe of our coffee and kombucha shop. Moreover, we can also post customer reviews and experiences on our website to promote the excellent customer service and products that are offered. Another way to reach out to customers is to do email marketing. We will have the manager sending weekly promotional emails to customers to keep them informed of our deals and sales. The following chart is a breakdown of the budget that will be allocated for the sake of promotion.

Appendix

I. Promotional Budget Chart

 Promotional Budget Chart 2.PNG

II. Pricing Chart

*Beverages            Sleepy    (12oz)         Tired (16oz)        Exhausted (20oz)

Coffee (regular/decaf)    2.45               2.95             3.15

Lattes                2.65                      3.25             3.95

Mochas               3.15               3.85             4.35   

Cappuccino            2.65               3.25             3.95

Americano            1.50               1.65             2.15

Chai latte            3.45               3.95             4.45           

Hot tea            1.35               1.75             2.25

Frappuccino            2.85               3.45             4.15           

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