Executive Summary
E&F café is a proposed business projected to operate from the Alkhawarimi International College (KIC). The report presents the description of the business, the ownership of the business and marketing strategies essential for creating a competitive advantage. The existing gap in the college, that is, the insufficient staff, creates an opportunity to form the new café. The business’s vision statement is focused on offering the best services o customers at affordable prices. The E&H cafe is in a stiff competition environment whereby there is an existing restaurant and grocery in the college. Some of the strategies that will help in gaining competitive advantage comprise advertisements, promoting products using social media platforms and the use of technology. The café will also provide unique products and services such as outside catering and baking services. The financial projections show that the café will be making more projects in the next five years.
Company Description
An Overview of the Company
The E&F café is formed to serve the residents of the university by availing food to them. In the Alkhawarimi International College (KIC), there are insufficient cafes and restaurants, making it difficult for the students, lecturers, and other staff to get food. The core activity comprises providing food categorized into dinner, lunch, breakfast, and glossary products. E&F will also be offering delivery services for the customers who make online deliveries for the takeaways. Therefore, the core objective o the business is to provide quality and affordable products and services to customers by surviving their delicious food and drinks.
Vision Statement
The vision statement is vital for a business that is starting its operation. It helps the management to align its resources with the business strategies to gen the objectives of the company. Therefore, when setting the vision statement, the management of the business has to evaluate its resources, products, and the type of the targeted market. The vision statement for E&F company is to create a good hospitality environment that will maximize the available resource in the college and provide quality products and services that will fully satisfy customers.
Company Background
E&F café is a new restaurant in Alkhawarimi International College (KIC) formed under the partnership of Eissa and Faisal. The restaurant owners are the students at Alkhawarizmi International College (KIC) perusing a course in catering. The experience and knowledge gained in class are what motivate them to form a café on the college premises. The owner of the restaurant has also been working as a chef on part-time in the college kitchen. Furthermore, the owner has been doing casual jobs in the nearest restaurants while on holiday.
The founders of the E&F are specialilized in bakinh cakes, blending fresh joice, and preparaton of the Arabic dishes. The experience in such area was gained through cattering classes in the institution. The success is in the provision of good products can be reviewed from the good records attained while working in other restarants as chefs.
The restaurant will be operating within the university to provide hospitality services to students, lecturers, and other staff within the college. The café is established to provide different types of dishes to the customers. Based on the market analysis, there is only one restaurant in the college hence leading to overcrowding, price hiking of food and poor services to customers. The café can serve 100 people per session for an average of 1hour. Two partners manage it, that is, Eissa and Faisal, with the help of two employees.
Product/Service
The café will offer a variety of products and services to the customers. The targeted market comprises people from different parts of the world with diversified cultures. Therefore, there is a need to provide food products that can fit into the market. The products will be divided into breakfast, lunch, and dinner. The breakfast comprises tea, coffee, cocoa, eggs, bread with cheese, and dates. The lunch will comprise the main meal, which includes Chips, roast chicken, meat, fish, rice, and other products from the wheat. The café will also be serving soft drinks such as fresh juice, soda, and fruits like pineapple, mangoes, oranges and watermelons. The restaurant will also be providing baking services for students who make orders for birthday cakes. Furthermore, the anticipated service to be provided in the future after stability is outside catering services. Most of the students who graduate would rely on the outside catering services to celebrate with their relatives.
Value Proposition
The products of the E&F café will be differentiated from the other cafes and unique in the industry. The cafe will utilize the exciting technology by going digital. The café will use technology in advertising its products and services. Customers will also be making their orders online, and this will be more convenient for the clients and the management of the restaurant (Sorin et., 2019). Another feature that will also make the café to outstand from the rest is offering door to door services. This will be applied mostly to students who stay within the college. This will increase customer loyalty and gain a large market share.
Industry Description
The hotel/hospitality industry is very competitive, making it hard for new entries into the business. The type of risks and threats presented in the industry is high, exposing the business to losses. The industry is involved in offering accommodation, meals, and catering services to the market. However, at the college, there is low competition in this industry. There is only one café on the college premises, which creates opportunities for one to venture into the business. Furthermore, the legal procedures involved in starting up a restaurant or café are too high to scare away entrepreneurs. The industry is also known for making huge profits which generates revenue. The E&F café will survive in the industry by offering unique products and services of its customers.
Market and Target Customer
When starting up a business, it is essential to analyze and understand the type of market that will be benefiting from the products and services being offered. The market is comprised of the potential customers that will be buying food from the restaurant. The market comprises different segments based on the demographics, psychographics, behaviour, location of the customers, and culture and social values of the customer (Damnjanović et al., 2020). The market for E&F restaurants is made up of people around the Alkhawarizmi International College (KIC). It is through effective analysis of the target market that an individual will be able to determine the targeted customers that will fit their products and services. Therefore, a target market can be defined as a group of people who has identical characteristics that can be identified as potential customers for the business.
The E&F is targeting those who reside around the institution. The targeted market for E&F products is segmented into students, lecturers, college staff, and online customers who make who live outside the university. The students comprise the largest market segment. Most of the students are not financial stable creating a need to provide affordable food for them. This means that the café will be in full operation when the earning sessions are still on. Therefore, food products whose prices are favorable will be prepared in large quantities to ser the students. The majority of the students do not cook in their hostels, and this creates a need to prepare supper/ dinner for them at the care. Since students will be the largest target market, the restaurant’s management should determine ways in which a good relationship with the clients and the restaurant. Another segment of the targeted customers includes lecturers and other workers who work within the college. Lecturers retarget for lunch meals and soft drinks such as fresh juice. Therefore, when applying a pricing strategy, the products for this segment can be higher because lecturers are financially stable.
Competition and Competitive Advantage
Companies operating in the hospitality industry are exposed to Stiff competition. Hotels, restaurants, and cafes are becoming innovative in producing the best dishes for their customers every day. When starting a hotel/ café, it is important to understand that competition is one of the main threats that can lead to the collapse of the business. For instance, at the Alkhawarizmi International College (AIC), there are an existing restaurant and a glossary which creates a competitive environment. E&F café has a responsibility to determine ways in which it can differentiate its products and services from the existing restaurant for it to gain a large market share (Scarborough, 2016). Competitive advantage can help E&F to survive in the market. Competitive advantage entails factors that can be used by E&F to deliver the best dishes that outshine its rivals (Li & Liu, 2018). Through a compentetive advantage, the business will be in a better position to get a large market share. The existing competition in the hospitality sector need thehotel to provide uniqu products and services or it to gain more customers from the market. Competion I s one of the challenges facing the hospitality sector and every firm need to develop, and implement startegies that will help in competing with other firms effectively.
E&F has capabilities that make it gain a competitive advantage in the market. The café will use technology to advertise its products to potential customers. This involves the use of social media platforms such as Facebook, Twitter, WhatsApp, and YouTube. The use of technology in the café will allow customers to make their orders online, which saves time that the client could have used to come and make their orders physically (Scarborough, 2016). The café will also provide unique services that the existing restaurant in the college does not offer. The differentiated services that will be provided by E&F café comprise outside catering and baking services. Outside catering will involve cooking for the students who have graduated and wants to dine with their parents together. Such services will make the company outstanding in the marketing hence gaining a large market share within and outside the college. Furthermore, the E&F will gain a competitive advantage by offering unique brands of dishes. The café will be serving dishes from different cultures, considering that the college has international students. The existing capabilities in E&F will help in gaining a large market share.
Marketing Strategy
An organization uses marketing strategies to help in gaining a competitive advantage and increasing sales. A business in the hospitality sector needs to plan how to get new customers, retain the existing customers and increase sales. The first strategy is social media advertisements. Advertisement involves promoting the brand and name of the organization by posting the products and services being provided. In an institution like a college, everyone has a smartphone, allowing them to access social media (Damnjanović et al., 2020). Therefore, E&F should be sharing the available products and services on YouTube, WhatsApp, Telegram, Facebook, Twitter and Instagram. The content posted should be precise and unique from other cafes to single out E&F café.
The E&F café will also utilize the 4 Ps of marketing to formulate a plan for standing out in the market. The 4 Ps comprise the place, price, product and promotion. The delivery system of the café will involve the provision of door-to-door services to a customer who makes their request online. Other customers will be served at the location of the café, and this much convenient for those students who have a lecture during the day. The café company will also be flexible in providing its products and services in different locations in the college. The products provided by the E&F café will be unique, making the café gain a competitive advantage in the market. Another marketing strategy is creating a good relationship with the customers who are potential buyers of food. This will involve listening to their preference and acting on them immediately. Promotion can be done through advertisement, providing discounts and offers to the products. The management of the café can give free food to customers when opening the café on the first day. Through this, customer loyalty will be gained and E&F café will be in a position to make more sales.
Overall Strategy
The overall strategy for the E&F café is to adopt the technology. With the current globalization, many hospitality companies are going digital through technology. Technology will help Café to design its website and logo, which will help increase its competitive advantage (Wang & Miao, 2021). Through technology, the café can save on time through online delivery. Customers who make their orders online will get them delivered on time. Furthermore, as the cafe grows, technology will be helpful in the store its data and finances in the cloud to avoid the loss of crucial information.
Sales and Competitive Plan
The sales plan for E&F café involves a direct connection with the customers through social media. The management of the café will be communicating with the customers to understand their preferences and needs. The café also plans to increase its sales by advertising and promoting its products. Posters will be designed and posted on different walls of the social media handles. The competitive plan of the café is to differentiate its products and services. The unique dishes offered in the café will attract more customers and contribute to gaining a competitive advantage.
From figure 1 and table one below, it is anticipated that the annual sales for the year will have a gradual increase. This will result from the aspect of the café gaining a competitive advantage over other restaurants in the college. The number of customers is anticipated to be increasing by 20% annually due to increased awareness of the café. For instance, the café will serve 96000 customers son year one, and this is expected to increase to almost 199065 in year five.
Table 1: Sales
Legal and Organizational Structure
The form of business ownership of E&F is a partnership. The café has two partners, that is Eissa and Faisal. A partnership is a type of business operation that involves a formal arrangement between two or more people who come together to manage the business’s operations and share the profit. E&F café settled on forming a partnership business because it has fewer legal obligations and formal arrangements (Ramani, 2022). The partnership does not involve going to the authorities to seek authorization to start the business as compared to co-operations and limited liability companies. The partnership involves the aspect of sharing the burden, meaning that in case of a loss, the two partners will have to suffer, unlike a sole business where the owner suffers alone. Another reason for considering a partnership in E&F café is that more capital will be collected because the efforts have been put together. The partnership is also easily formed when compared to other forms of business which involves many proceedings before forming a business.
Key Personnel (Partners, Advisers, Related Service Providers, and Key Activities and Operations)
The formation of any business has to have specific personnel that will help in providing advice on whether to start a business or quit. Personnel comprises the business partners, service providers, pieces of advice, financial providers, and even customers. One of the key personnel for E&F café is the university’s administration. The management of the Café will have to seek authority from the administration through the dean of the student before setting up the business. The dean of the student will also act as an adviser by providing the owners of the café with the restrictions on products that should not be sold in the restaurant, like alcohol.
Other advisers will comprise the financers of the business. Those providing loans to start a café will advise the owners on the type of business to set up so that to avoid cases of bankruptcy. Suppliers form key personnel for the company. The café will have to get raw products from the suppliers before cooking them. The management of the café has to form a good relationship with the customers to identify their needs. Customers will also provide their preferences as much as consumption is concerned.
The cafe business is established with an objective of providing hospitality. Such acrivities comprise of selling food prducts to the students , lecturers and other staffs at the university. The major products provided by the café include food and beverages. The E&F will be serving their customers with beverages like coffee, tea and fresh juice. The operations of the café will also revolve around providing outside catering services and baking services to the customers. Other activitie of the café will involve offering parttime and casual employment for other students who will help in delivering food and drinks for those customers whor make online orders.
Financial Summary
Financial analysis is vital in any business operation. The financials of the E&F café can be analyzed using the projected income statement, projected cash flows and projected statement of financial positions. The income statement presents the expected profit of the café from its operations from its operation. Profits are generated from the sales made either monthly or annually. Cashflow statements are used to show the inflow and outflow of funds in an organization. Statement of financial position presents the asses, equity and liability of the company. This project will present the financial statement analysis of the café using the income statement.
From the table below, the projected income statement for the café was drafted for five years. The projected sales are divided into three that is the sales from customers who come to the café, from the online delivery and from the outside catering. The daily sales are projected to be for an average of 500 people, for four days in a week. The average consumption of a person in a day is 25. The sales are expected to increase by 50% as presented in the table.
Table 2: Financial statements
The expenses that E&F café is expected to insure include wages, advertisement costs, rent, fixed costs, and technology-related costs. The company will have to spend money on social media adverts and promotion of the products its products. Furthermore, money will be spent on the installation of technology which will be increasing at the rate of 20% per year. Furthermore, the project s viable since it presents signification profit. In the first year, the café will generate returns of 2,497,800, which will increase annually. Effecive budgeting and financial analysis will help the café in predicting future stability of the firm.
References
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