Executive Summary
Dubai Coffee Experts is a new food outlet that will start its operations on January 1, 2016. This business plan identifies the marketing strategies that will help the firm achieve success. The plan also gives the financial estimates at various stages of operation.
Introduction
Dubai is one of the leading tourist’s destinations in the world today. The city has experienced massive development in the recent past due to the effort put in place by the government and private investors. After conducting a comprehensive market research, it was noted that most of the tourists, especially those from Western countries, struggle to get quality coffee that meets their standards. Some of them even consider preparing their own coffee in their rooms because they consider those offered in most of the hotels to be below their expectations. The market research revealed that there was a gap in the Dubai coffee market. That is why it was decided that it is appropriate to start a coffee shop in Dubai. The coffee shop will be located within the city centers where many tourists and other visitors coming to Dubai frequent. The Dubai Coffee Experts is the proposed name of the coffee shop. The coffee shop will operate throughout the day and night in order to maximize profits and minimize expenses. This will be made possible by the fact that Dubai has become a 24-hour economy city with a lot of business activities going on even at night.
Objectives
It is important to define the objectives given that the decision has been made about starting a coffee shop in the city of Dubai. The following are the objectives that should be achieved once the Dubai Coffee Experts start their operations.
- To maintain high quality coffee production that meets the international standards
- To be the preferred coffee shop for the local and international clients in Dubai
- To expand the operations to the regional markets, especially into the regional cities such as Abu Dhabi, Riyadh and Mecca.
- To maintain a pool of talented employees who will help the firm move to the next level.
Detailed Analysis of the Project
Sales objectives
According to Nash (2000), one of the most reliable metrics used to determine the performance of a firm is its sales volume. High sales volume is considered an indication of progress in the market penetration. It is a sign that a firm has understood the market needs and is offering products that meet these needs in a perfect way. When Dubai Coffee Experts start the operations, the primary objective will be to achieve average sales of $ 950,000 within the first one year. The graph below shows the sales objectives of this firm within the first three years of getting into the market.
As shown in the statistics above, it is expected that by the third year, this firm shall have made a net profit of $ 980,000.
Mission
According to Temporal (2010), when starting a new business entity, it is necessary to define the mission that will guide the operational activities within the firm. The mission of this firm is to be the preferred coffee shop to the local and international visitors in the city of Dubai. We seek to offer high quality products that will meet the unique needs of different customers from different parts of the world. With our team of highly qualified chefs, Dubai Coffee Experts will strive to offer specialized attention to all the visitors.
Keys to success
Achieving success in a highly competitive market such as the one Dubai Coffee Experts is planning to enter may not be easy. Although the current players in this industry have failed to offer products that meet the needs of the highly diversified customers in the city of Dubai, there is always a room to improve. This means that they still pose serious threats in this market. In order to achieve success, the following factors should be given serious consideration.
- Understand the unique market needs and develop superior ways of meeting them as compared to the approach used by the market rivals
- Identify specific market segments that a firm can meet its needs and focus on such segments other than targeting the whole market
- Develop mechanisms that will help in managing the costs of operations
- Maintain a team of highly talented employees and ensure that they are always motivated to give their best at this firm
- Understand the level of market competition and find a way of managing it without provoking price wars.
Company summary
The Dubai Coffee Experts will be a food outlet that focuses only on snacks. Coffee will be our main product. However, the firm will also offer pizza, doughnuts, biscuits, and other beverages for its customers. There will be a friendly atmosphere brought about by a team of employees who understand and appreciate the diversity of the customers. The customers will have a variety of products to choose from, and soft music to entertain them while in our stores.
Company ownership
The Dubai Coffee Experts will operate as a sole proprietorship, wholly owned by me as the only shareholder.
Start-up summary
The following is a break-down of the start-up expenses based on the estimates calculated as per the current market rates and specific activities that will be done.
Architectural designs
The design of the kitchen and serving areas will be designed by Muhameed and Associates
Handbooks/Receipts/Manuals
All the typing, printing, lamination, and binding work will be outsourced. It is estimated that this will cost about $ 1,250 within the first one year. We plan to have our own equipment within the second year.
Pre-opening
The activities at this stage will include the employee –training and organizing the coffee shop ready to start the operations.
The table below shows the estimated start up expenses
Funding
The proprietor has a sum of $ 350,000 for the business start-up. These statistical data can be summarized in the table below.
From the above statistics, it is clear that the current funding is capable of meeting all the start-up expenses. However, it is important to note that a deficit may arise when external environmental factors such as inflation are experienced.
Facilities and Location of the Coffee Outlet
According to Jain (2011), in the food industry, location is very important in defining the success rate. The Dubai Coffee Experts will be located at Burj Khalifa. This location was chosen because of its popularity. According to Knight (2006), everyone who comes to Dubai is always interested in visiting the world’s tallest building. This location will ensure that this firm has a steady flow of clients throughout the year. The outlet will have a capacity of holding 50 visitors at a given time. The chairs and tables that will be used shall be locally-made and that include all the kitchenware. The visitors will use the packing facilities provided within the building. The parking provided to us is less than 50. We believe that not every visitor who comes to our store will be driving.
Service delivery
We know that many food outlets within Dubai offer coffee as one of their main products. However, our product will be unique, especially in the delivery methods. We have multilingual waitresses and waiters who have experience in this industry.
Competitive position
Dubai Coffee Experts is a new firm that is about to enter the market. The inexperience of the firm in this competitive market may act as a disadvantage for this firm. However, there are a number of factors that will improve our competitive position. We will offer high quality products at competitive prices. We will be time conscious in our service delivery to ensure that customers are not kept waiting for long. The facility will be equipped with a music system to entertain the clients. The variety we offer to the customers will also enhance our competitive advantage against that of our market rivals.
Sales literature
According to Keegan, and Green (2013), when starting up a new firm, it is very important to maintain the sales literature in order to know the progress the firm is making and the financial challenges that it may face due to the operational dynamics. All the sales records will be collected electronically and kept in the database for regular reviewing.
Technology
Cook (2005) says that emerging technologies have redefined almost all the areas of business operations in the modern world. The Dubai Coffee Experts will use technology in the production, marketing, customer service, and data management processes in order to improve efficiency and effectiveness.
Target market analysis
The targeted customers for this firm will be the local and international visitors who will be coming to the city of Dubai. We target people of all ages, both men and women. However, there will be a special section meant for the young adults who are expected to form the bulk of our clients. In terms of income, our targeted customers are the middle class who want value from every product they purchase. We do not have a specific preference for issues such as education levels or occupation of the targeted customers as long as they have the capacity to purchase our products. We hope to be the restaurant of choice to the target group defined above.
Market Strategy
The Dubai Coffee Experts will be targeting the clients who want snacks, not heavy meals. For this reason, the coffee shops is expected to be very active in the morning hours before lunch hour, hours preceding supper, and probably after supper. Weekends will be our busiest days.
Marketing programs
We plan to use a series of marketing strategies even before we launch the operations. Wall posters pinned at strategic locations within the premise will be one of the most important initial marketing strategies. We have planned for a grand opening ceremony to help attract the attention of frequent visitors of this building. Once we begin the operations, the marketing unit will use the local media to advertise this facility. The local television and radio channels will be helpful at this stage. Dubai Coffee Experts will also be active in the social media and other online marketing platforms.
Our pricing strategy
According to Aaker (2009), the pricing strategy that a firm uses defines its profitability. The following are the top products that will always feature in our menu. Coffee, tea, kebabs, doughnuts, pizza, water, hotdog,
Estimated variable costs
The above estimation of the variable expenses shows that the total cost of variable expenses will be $ 274,900.
Estimated annual fixed costs
Total annual cost is estimated to be 550400.
This means that if the above figures are maintained, then the revenue within the first year will be $ 429,600.
Assuming that the fixed cost remains the same for the next three years, the following graph shows the break even analysis for this firm.
The firm shall break even in the second year. This means that all the investments shall have been recovered and the firm will now start enjoying profits (Lebow & Spitzer, (2002).
Budgeted Income Statement
Based on the estimates provided in the sections above, an income statement can be developed as shown below.
Dubai Coffee Experts
Income Statement
For the year ended December 31, 2016:
Budgeted Balance Sheet
The figures provided can be used to draw an income statement for the firm as shown below:
Dubai Coffee Experts
Balance Sheet
As at January 1, 2016:
It is important to note that the balance sheet provided above is given as at January 1, 2016 when the firm will be starting its operations.
Conclusions and recommendations
It is clear from the above analysis that starting a business unit demands for a deep understanding of the market forces. An entrepreneur must also have a rough accounting estimate of what the project will cost. This makes it possible to budget for the activities planned without experiencing financial shortage. Dubai Coffee Experts is a new firm that is just starting its operation in the market. It is expected that the firm will face a number of challenges. Having an appropriate financial and accounting strategy may help overcome these challenges. The following recommendations should be observed.
- Develop a proper financial plan that covers the entire accounting year
- Have a contingency fund that can be used in cases of emergency
- Conduct a market research to understand the market needs and how they can be met adequately.
- Develop superior marketing strategies that can counter the strategies used by the competitors.
Works Cited
Aaker, D.A. (2009). Strategic Market Planning. New York: John Wiley & Sons.
Cook, J. (2005). Understanding Marketing Strategy and Differential Advantage. Journal of Business Strategy, 49(2), 137-142.
Jain, S. (2011). Marketing Planning and Strategy. Mason: Thompson Publishing.
Keegan, W. J., & Green, M. C. (2013). Global Marketing. Upper Saddle River: Prentice Hall / Pearson.
Knight, G. (2006). Entrepreneurship and Marketing Strategy. Journal of International Marketing, 8(2), 12- 32.
Lebow, R., & Spitzer, R. (2002). Accountability: Freedom and responsibility without control. San Francisco, Calif: Berrett-Koehler.
Nash, E. L. (2000). Direct marketing: Strategy, planning, execution. New York: McGraw Hill.
Temporal, P. (2010). Advanced brand management: Managing brands in a changing world. Singapore: John Wiley & Sons.