Executive Summary
Plush is a specialty café that will serve various foods from small businesses in Kuwait. The café will offer home- made meals and desserts from the best ten online cuisine businesses. Through a special selection process the top ten businesses will be featured at Plush, and their dishes will be available for customers to enjoy in the comfort of a relaxing homelike atmosphere.
During the last three years, there has been a considerable rise in the number of bakeries, sandwich, national food, and dessert shops that have popped up on the social network scene. A simple explanation of the existence of these previously mentioned services could be attributed to our cultural habits of gathering around a meal on every possible occasion.
Plush will offer the convenience of enjoying home cooked foods from the top entrepreneurs in Kuwait without having to go home to enjoy them. We simply wish to offer a place where persons of all ages can gather to have their favorite meal served in a comfortable atmosphere and in a relaxing ambience.
Products
We will target the top ten small businesses that serve savory and sweet foods. Fifteen of the industry’s best entrepreneurs will be selected based on a survey that we will conduct on our target market. Chef Adla, a prominent figure in the food and beverage industry, will then select the top ten.
The management
Plush co-founders Haya AlMansour and Ahmed AlOmair bring a unique mix to the business. For instance, Haya Almansour has over 5 years of experience ordering specialty foods from small businesses. Including family gatherings as well as friends’ functions and business meetings she has organized no less than thirty-five events.
Ahmed AlOmair possesses a unique talent of putting things together, his experience abroad as well as his current position as projects manager makes him a highly suitable candidate to bring the project and its participants to a successful start.
The Capital
With a modest capital in mind we aim to put the focus on the food. Our capital will include costs for construction and marketing.
The Market
One might say the market is saturated with cafes and dessert shops, with the existence of certain Franchise coffee shops. As such, the line that differentiates a restaurant from a café has become blurry. Plush, however, will strictly serve pre-packed, homemade well-known existing meals that have already built up their fan base. This concept is one of a kind and does not exist in the Kuwait market. Our main focus will start, remain, and continue to be on the small businesses and their star dishes.
Company Summary
Plush café will be located in downtown Sharq, KIPKO tower. This is a new commercial tower that is home to some of the best small businesses in Kuwait. You can find a variety of products and services under one roof including a health club, designer shops, photography services, restaurants and cafes and offices.
It is also a prime location for surrounding businesses, towers and governmental organizations. This makes it a suitable spot to open Plush café as it would be easily accessible and highly convenient. The café will provide top selling meals and snacks from the best home cooks in the country to their surrounding community of businesses and homes; including Shuwaikh, Shameya, Kifan, and Abdullah AlSalem residential areas.
Start Up Summary
Company Goals and Objectives
The major goal of Plush café is to offer a place where persons of all ages can gather to have their favorite meal served within a comfortable atmosphere and a relaxing ambience. Moreover, Plush café’s aim is to bring to our client the food that they crave and put it in a cafe so that they can enjoy it here rather that stay at home.
The objectives are to:
- Provide top selling meals and snacks from the best home cooks in the country
- Offer homemade meals and desserts from the best ten online cuisine businesses
- Offer the convenience of enjoying home cooked foods
- Be the best food provider for customers of all ages.
- Gain a market share of more than 10% in the first financial year.
Legal form of ownership
The Plush café is owned by two partners which makes it a partnership. The choice of partnership over other legal forms of ownership is the high ability to make decisions and share losses at the same time. Moreover, it will be possible to generate the required capital.
Owners
The owners of Plush are its co-founders namely, Haya AlMansour and Ahmed Al-Omair. The two have a wealth of experience in the food industry. Moreover, they have unique business acumen necessary for starting up a successful business.
Relevant owner experience
Haya Almansour has over 5 years experience in ordering specialty foods from small businesses. Including family gatherings as well as friends’ functions and business meetings she has organized no less than thirty-five events. Ahmed Al-Omair possesses a unique talent of putting things together, his experience abroad as well as his current position as a project manager makes him a highly suitable candidate to bring the project and its participants to a successful start.
Haya AlMansour has a Bachelors’ degree in Management and a Masters Degree in Advertising and Marketing. She has prior experience in marketing and HR, in branding and marketing, and a small business of personal fashion line. Currently, AlMansour is a HR officer at Kuwait Oil Company.
Based on the past experience, AlMansour shall bring marketing, branding, and human resource experience on the table. This shall boost the marketing and human resource departments respectively. On the other hand, Ahmed AlOmair holds a Bachelors’ degree in Electrical Engineering. He is a visionary leader who is committed, determined, and cooperative. His working experience in Abu Dhabi and Sharja will boost the operations of the business.
Management & Leadership style
The owners (Haya AlMansour and Ahmed Al-Omair) are tasked with the responsibility of running the company at the management level. We shall be involved in daily decision making process, management, and overseeing that the business runs smoothly. In addition, each of the partners shall delegate his skills and knowledge on areas of expertise.
Since the business is a partnership, a contract shall be drawn to briefly outline percentage share, role in the business, and the strengths of each partner. Lastly, a partnership agreement shall be established. The most important and interesting function of management in Plush shall be leadership.
The dynamics of leadership in the company starts with the owners who shall use inspirational, collaborative, and delegative form of leadership (Alkahtani, Abu-Jarad, Sulaiman and Nikbin 78). Other employees shall be expected to be cooperative, innovative, and customer friendly.
Startup Capital
The major source of capital is personal savings and borrowing from family members and friends. Other than the stated sources, the partners seek financial backing from people willing to invest in small businesses. The capital is required for initial onset of the business. The capital will be spent on four categories; cutlery and crockery, construction, marketing, and licensing, and employees.
Different cutlery and crockery will be purchased to be used to in the process of serving the customers. Types of crockery to be purchased are such as serving plates, cups, and bowls. For self service, large bowls, platters, plates are essential for holding significant amounts of food. The necessary cutlery required shall entail different sets of spoons, forks, and knives, forks.
The folks and the serving spoons major purpose will be serving dishes and food from communal serving bowls and plates during personal diners. Finances will be required for construction purposes and installation of different café equipment. Food refrigerating system and heating machines will also be purchased
Marketing and Licensing
Under marketing, finances will be required for the branding, the website design, promotion and advertising, and for undertaking any form of marketing research. The city’s business license department will be contacted with the aim of acquiring a business license. A business license will be applied for a cost of 800KWD. Since the business will operate in the hotel industry health department permits will be sought for the business and respective employees at a cost of 800 KWD.
Employees
Other than the partners, five employees (a cook, a cook helper who also cleans the plates, a cashier, and two waiters) will be employed.
Table 1: The table represents the four categories discussed that require capital start up
Plush café will provide all prepared savory and sweet foods, pre-packed, homemade well-known existing meals to the targeted customers. This means that the provided food will be already be prepared. Moreover, Plush café will provide top selling meals and snacks from the best home cooks in the country, coffees, desserts cup cakes, molten, cakes, hot snacks and salads, and all kind of hot drinks.
Market position
The products provided are competitive because the concept is the first of its kind and does not exist in Kuwait’s food market. Also, there is limited competition as homemade food will be provided to the targeted consumers on their convenience.
Unique selling position
The fact that the provided products are homemade, gives Plush Café a competitive advantage over the traditional food providers. Based on our market research, we are optimistic that the business will succeed.
Anticipated demand
Since there is an already built up fan base for pre-packed, homemade well-known existing meals, the anticipated quantity of products is very high. In a period of 12 months, we anticipate an individual customer to buy out 10 to 15 times in a month.
Pricing strategy
Competitive and penetrative pricing strategies will be adopted while pricing the products. The implication made is that Plush Café will ensure quality-price relationship so as to create value for consumers’ money. Penetrative pricing which involves the use of lower prices will be used with the expectation that quantity demanded will increase.
Value to customer
Plush café products will create value for the consumers through quality food and customer services, customer satisfaction, and convenience as customers will not be required to eat their homemade dishes from home any longer.
Growth potential
A high growth is expected since there is an already built up fan base for pre-packed, homemade well-known existing meals. As such, we anticipate a market share of more than 10% in the first financial year
Marketing Analysis
Market analysis entails the exploration of the market segmentation, positioning, and targeting (Lamb, Hair and McDaniel 3). The major target group for Plush café products is persons of all ages. This means that old and the young, and men and women of different ages are prime targets.
Persons of all ages have been chosen because they can gather to have their favorite meal served within a comfortable atmosphere and a relaxing ambience. This provides them with convenience because they can enjoy home cooked foods from the top entrepreneurs in Kuwait without having to go home to enjoy them.
Human capital and money will be focused on all people so as to create a great yield return. Persons of all gender, age, education, ethnicity, employees, with different hobbies, lifestyles, and values, as well as with different usage rates and benefits are Plush café target. Specializing in strictly pre-packed, homemade well-known existing meals to customers provide a competitive advantage to Plush Café.
To determine the market size, existing data related to the food industry in Kuwait will be collected. Five Porter’s competitive forces of threat of entry, bargaining power of buyers, competitive rivalry, bargaining power of suppliers, threat of substitutes will be adopted (Porter 87). Threat of entry by other operators in the near future is most likely to reduce the profitability of Plush Café.
The bargaining power of buyers is very low since the concept is new in the industry which means that Plush Café products will have power over the buyers. The market is saturated with cafes and dessert shops, with the existence of certain Franchise coffee shops. As a result, the line that differentiates a restaurant from a café has become blurry.
Nonetheless, plush café is expected to have a low competitive rivalry because it uses service and product differentiation to create a competitive advantage. The bargaining power of suppliers is very high because Plush café depends of its suppliers to provide already prepared food.
As such, Plush café has less control over its suppliers. The presence of other food providers is an indication of threat of substitutes (Porter 87). This implies that Plush café will be affected by threat of substitutes which may reduce its profitability.
Financial Analysis
Financial objectives Plush café are:
- Gain a market share of more than 10% in the first financial year.
- Increase sales by 10 percent in the second year
- Increase sales by 25 percent in the third year
The financial tables on the subsequent pages are based on the assumptions listed below:
- The costs of labor, rent, and groceries will remain constant for the first of the year but change by 3 percent in the consecutive years.
- The business will not be affected by macroeconomic factors such as financial instability, increased interest rates.
- There is an anticipated increase in demand for homemade meals and desserts
- The advertising costs will reduce by 75% after the first year, as a result of word of mouth.
Start-up costs [First Month]
In the first month, Plush café requires a monthly start-up costs of 11,250 KWD coupled by 125,000KWD total equipment/capital costs invested as a down payment. The equipment/capital cost (inclusive of business price, cutlery and crockery, food refrigerating system, and heating machines) will be incurred during the inception of the business.
Start-up costs for [YEAR]
In the first year, Plush café requires a start-up costs of 91,000 KWD coupled by 125,000KWD total equipment/capital costs invested as a down payment. The equipment/capital cost (inclusive of business price, cutlery and crockery, food refrigerating system, and heating machines) will be incurred during the inception of the business. Therefore, the business requires a financial backing of 216,000 KWD.
Profit and Loss Forecast
The profit and loss forecast show that Plush café as a potential business venture which will make profits in the first year, second year, and the third year consecutively. The profits are expected to increase as the demand increases as a result of world of mouth. Moreover, the market is anticipated to increase by 10 percent in the first financial year.
First year Gross profit = (120,000-26000)/120,000 x 100=78%
First year, the Net profit = 36,000/120,000 x 100 = 30%.
Second year Gross profit = (132,000-26720)/132,000 x 100=79.75%
Second year, the Net profit = 45,520/132,000 x 100 = 34.48%.
Third year Gross profit = (165,000-27000)/165,000 x 100=83.36%
Third year, the Net profit = 77,650/165,000 x 100 = 47.06%.
From the above calculations, the both gross and net profits will increase annually as a result of the anticipated demand in the food industry. The profits will however be realized if the stated assumptions are upheld.
Works Cited
Alkahtani, Ali Hussein, Ismael Abu-Jarad, Mohamed Sulaiman & Davoud Nikbin.” The impact of personality and leadership styles on leading change capability of Malaysian managers.” Australian Journal of Business and Management Research 1.1 (2011): 70-98. Print.
Lamb, Charles, Joseph Hair, and Carl McDaniel. Essentials of Marketing. Mason, Ohio: South-Western Cengage Learning, 2010. Print.
Porter, Michael. “The Five Competitive Forces that Shape Strategy.” Harvard Business Review, 86.1(2008):78-93. Print.