LAPEKINDICA - Caffè Verde The Coffee of Green and Healthy

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The key takeaways are that Caffè Verde aims to establish an organic cafe in Sto. Tomas, Davao del Norte that offers health-conscious food and beverages. It evaluates the feasibility and viability of the business through financial projections and analysis.

Caffè Verde is an organic cafe that offers a range of hot and cold coffee-based beverages and frappes produced by well-trained baristas. Its prices range from P15-P150 and it aims to promote a healthy lifestyle through its products.

The proponents chose to locate Caffè Verde in Sto. Tomas, Davao del Norte because the commercial building is new and accessible. It is also near the public market where many residents and vendors frequent.

CAFF É VERDE :

THE COFFE OF GREEN & HEALTHY


A FEASIBILITY STUDY ON ESTABLISHING AN ORGANIC CAFE
IN STO. TOMAS, DAVAO DEL NORTE

A Feasibility Study
Presented to the Faculty of
Sto. Tomas National High School
Menzi, Sto. Tomas, Davao del Norte

In Partial Fulfillment of the Requirements of


Business Enterprise Simulation

CHARMIE LHYN E. LAPE


KRISHEA KAYE A. KINDICA

JUNE 2021

1
EXECUTIVE SUMMARY

This feasibility study attempted to determine the financial viability of an organic cafe in Sto.

Tomas, Davao del Norte. The researchers sought to prove the feasibility of this business through the

evaluation and presentation of the different aspects concerned in its establishment. Through this

summary, the business concept will be explained and the feasibility of the business will be proved.

Coffee drinkers are the majority of the people of the Philippines. The increasing number of

coffee shops in almost every corner of the metro is the clearest sign that the coffee industry is booming.

Drinking coffee has become an unavoidable trend, whether as a form of social activity or simply a

favorite pastime, drinking coffee has become an inevitable trend. Caffè Verde: the Coffee of Green

and Healthy is a cafe where they offer health-conscious food and beverages, especially caffeine-free

coffee, which is situated in Sto. Tomas, Davao del Norte. The proponents have chosen this location as

the commercial building remains new and many people visit it. The residents of Barangay Tibal-og are

also convenient because it is situated only near the public market, which is home to many people from

the various areas and subdivisions of the barangay. The place are very accessible to the residents and

especially to the target markets of the cafe such as bus and jeepney drivers, as well as to the vendors,

who are early risers and would like to have a sip of coffee before starting their own business and to those

coffee lovers who wanted to taste new variety of coffee.

Caffè Verde’s marketing strategy is to show people that it has an excellent product, convenient

accessibility, and with a community benefit. The product will be a range of hot and cold coffee-based

beverages and frappes similar to the market produced by well-trained baristas. The cafe’s pricing is

affordable to priced high and the average price of beverages is between P15.00- P150.00. The coffee

shop will be implementing a low cost promotion campaign which will include flyers, banners and

tarpaulins installed at strategic areas of the public market.

Caffè Verde will be directly under the supervision of the partners, Miss Charmie Lhyn Lape and

Miss Krishea Kaye Kindica. The functions of Marketing, Finance and Administrative will be handled by

the Supervisor but will be under the partners’ stewardship while another will be the Head Barista and

Head Cook, and will be in charge of the Production aspect. Personnel for the Coffee shop will come

2 Caffè Verde: the Coffee of Green and Healthy


from both graduates or must have Vocational Diploma or Short Course Certificate appropriate for their

position. There are two functioning groups within the Coffee Shop: Production and Marketing, Finance

and Administrative. Production involves the Baristas, Cook or production staff, who will be operating

the coffee shop and blending the beverages for the customers as well as the daily inventory, maintenance

of equipment and the bar area. Marketing, Finance and Administrative will handle the promotion of the

coffee shop and its beverages as well as managing the training of Baristas, maintenance of equipment,

purchase and request, and monitoring of financial performance.

With the financing carried by the partners, income is expected to be derived from the first year of

operation until the fifth year projection. Net income will be incurred for the first year computed at

Php79,950.

Return on Equity is computed at 20% by the second year which is significantly efficient in terms

of generating income for every peso of asset invested in the business.

The proposed income generating project is deemed feasible and viable. It is therefore

recommended for implementation for the year 2021. Further studies on increasing customer retention

and marketing, as well as development of signature product lines are also suggested.

3 Caffè Verde: the Coffee of Green and Healthy


TABLE OF CONTENTS

1. EXECUTIVE SUMMARY 2 4.2.5 Manpower Requirements

2. BUSINESS CONCEPT 5 4.2.6 Organizational Structure 17

2.1 Introduction 4.2.7 Job Description and Duties

2.2 Overview of the Business Concept 4.2.8 Motivating and Rewarding Employees 19

2.3 Business Name 6 4.3 Productions and Operations Aspect

2.4 Business Offerings 4.3.1 Equipment and Supplies

2.5 Business Structure 4.3.2 Floor Plan 21

2.6 Location of the Business 7 4.3.3 Floor Sketch

2.7 Business Feasibility Study Objectives 4.3.4 Organizational Procedure 22

3. SITUATION ANALYSIS 8 4.3.5 Business Culture

3.1 Related Studies 4.4. Legal Aspect 23

3.2 History of Coffee and Coffee Surrogates 4.4.1 Legal Requirements

3.3 Industry Review 9 4.5 Financial Aspect

3.4 Key Drivers and Barriers 4.5.1 Financial Assumptions

3.5 Target Market 10 4.5.2 Project Financing 24

3.6 SWOT Analysis 4.5.3 Project Cost

4. BUSINESS VIABILITY 12 4.5.4 Projected Statement of Financial Position 25

4.1 Marketing Aspect 4.5.5 Projected Income Statement 26

4.1.1 Area Covered 4.5.6 Profitability Analysis 27

4.1.2 Demand and Supply Analysis  Net Profit Ratio

4.1.3 Advertising and Promotion 13  Return on Asset 28

4.2 Management and Personnel Aspect 14  Return on Equity

4.2.1 Tagline 5. CONCLUSION AND 29

4.2.2 Mission Statement 15 RECOMENDATION

4.2.3 Vision Statement 6. REFERENCES 30

4.2.4 Core Values

4 Caffè Verde: the Coffee of Green and Healthy


CHAPTER I

BUSINESS CONCEPT

Introduction

The essence of coffee as a satisfying drink that most people are looking for, considering that

Filipinos consume about 21,600,000 cups of coffee a day according to Nestlé’s consumer marketing

division.

With each new year, the coffee shop industry sees new trends and innovations. And many people

are wondering how coffee can be a healthier addition to their day as the movement toward more health-

conscious living continues. With the rise of turmeric coffee, rice coffee, and other healthier choices that

are beginning to appear on coffee shop menus, supplements and new additions to coffee will see a boom

in 2021. Cold coffee options are now being promoted as healthier alternatives to sugar-laden soft drinks.

Customers may continue to prefer cold coffees as well as conventional coffees in 2021.

These drove the owners to start a new coffee shop business, “Caffè Verde: the Coffee of Green

and Healthy”, where they offer healthy food and beverages that people will love. It is because these

days people become increasingly health - conscious and that is why coffee makers also go with the trend

of adding health benefits.

For the judgment of feasibility of establishing a health-friendly cafe or coffee shop, this study

will provide a historical background of the business project, description of the service, market analysis,

details in operation and management, research and policies and financial data. This study will be most

beneficial to those who want to venture into the cafe or coffee shop industry.

Overview of the Business Concept

The Business concept of Caffè Verde is unlike any other existing traditional coffee shops in the

municipality or even in the whole province. The main factor that makes it different is the introduction of

healthy coffees in local area of Sto. Tomas, Davao del Norte. Aside from that, we will also be offering

in our menu other healthy local delicacies and beverages that can be enjoyed by the patrons, that will

make Caffè Verde a local product advocate.

Business Name

5 Caffè Verde: the Coffee of Green and Healthy


The business name is the first component of communications to the customers as it will reflect

the nature of the business. The proposed name of the business, “Caffè Verde”, is derived from Italian

language which means, “Green Coffee”. The “verde” from Caffè Verde stands for the color green (berde

in Filipino language) which represents health and balance. It is associated with growth, health, renewal,

youth, harmony, freshness and fertility. It calms the nerves and helps us feel comfortable which Caffè

Verde aims to achieve to offer their customers, as well as the green and healthy food and beverages in

Caff Verde
their menu.

è the coffee of green & healthy

Business Offerings Figure 1: Logo

The business’ main offerings are food and beverages service. It will be up to the customers’ judgement

to what they would like to order in our menu. But our main products are rice coffees and turmeric

coffees, which are both organic and healthy.

 Organic rice coffees - organic rice coffee which we all know as Sara-Sara. It is an ancient term

used by the Philippines as an alternative to coffee, as it was a concoction of boiled rice germ

and caffeine-free.

 Organic turmeric coffee - also known as turmeric latte. These are steamed milk beverages

flavoured with golden turmeric, nutmeg, cinnamon, and sometimes even ginger. The resultant

concoction is a soothing, immuno-boosting, caffeine-free hot drink.

 Other local food and beverages (Halo-halo, mais-con-yelo, durian, avocado, and mango float,
fruit smoothies, etc.)
Business Structure

Caffè Verde is a privately organized coffee shop and will be run as a partnership. When two or

more people combine money, industry, and property to form a company or business, they form a

partnership. Forming, managing, and running a business is usually simpler. They are less tightly

governed than corporations in terms of the laws regulating their establishment, and they are much more

6 Caffè Verde: the Coffee of Green and Healthy


flexible in terms of management because only the partners have a say in how the business is run. A

partnership is also a good choice of legal arrangement for a new company if it is a small business with a

low turnover. The duties of running a company or business can be shared by partners. And Caffè Verde

is registered with the ownership shared by Charmie Lhyn E. Lape and Krishea Kaye A. Kindica.

Location of the Business

Caffè Verde is located at a commercial space (2nd floor) in a commercial building along

Bougainvillea Street, Barangay Tibal-og, Santo Tomas, Davao del Norte. The proponents have chosen

this location as the commercial building remains new and many people visit it. The residents of

Barangay Tibal-og are also convenient because it is situated only near the market, which is home to

many people from the various areas and subdivisions of the barangay. The place are very accessible to

the residents and especially to bus and jeepney drivers, as well as to the vendors, who are early risers

and would like to have a sip of coffee before starting their own business.

Business Feasibility Study Objectives

The primary objective of this study is to provide conclusive information and important insights

for the feasibility of establishing a health-friendly cafe in terms of the following information:

 Nature and concept of a cafe advocating health and wellness

 Access of green cafes in the market

 Potential credibility of coffee shops advocating healthy products

 Provide financial projection for potential funding, marketing and business development

 Management Aspects of a health-friendly cafes

 Develop operational impacts and recommendations for facilities

 Additional relevant information to support the formation of a feasibility study

 Other Consideration for the business establishment

 Inferences and findings of the study

CHAPTER II

SITUATION ANALYSIS

7 Caffè Verde: the Coffee of Green and Healthy


Related Studies

Coffee and other hot beverages are very common among Filipinos. Caffeine-sensitive people and

those who avoid caffeine-containing drinks, on the other hand, turn to coffee alternatives. Coffee

alternatives are roasted plant parts that are made into a product that produces a coffee-like brew when

mixed with hot water. They can also be used as a coffee mix. Coffee alternatives have been on the

market for a long time, such as chicory coffee or transparent beverages made from roasted cereals

(Belitz et al. 2009). Grains like rye and barley are used to make some popular coffee substitutes.

History of Coffee and Coffee Surrogates

Coffee drinking is said to have originated in Kaffa, a province in Ethiopia. The Ehiopians were

the first to discover the beverage in the beans of a tropical evergreen tree of the genus Coffea. They

grounded and roasted these coffee beans, then poured boiling water on it. People in Yemen, Arabia, and

Egypt soon learned of this discovery, until coffee drinking spread in many areas in the West, and

became part of the everyday lives of people for around 300 years now.

Until Europeans began growing coffee on colonial plantations, it remained an expensive luxury

item imported irregularly in modest quantities. Until the 1690s Yemen was able to meet European

demand for the new, hot beverage that had brought forth a new sociability of the coffee house and was

fast revolutionizing the rhythms and recipes of mealtimes across Europe. The first charge of colonial

beans reached Europe in 1712, and by 1726 the VOC controlled between half and two-thirds of

worldwide coffee production. By 1740 France, Spain, Portugal, and England had founded colonial

coffee plantations in the Americas and the West Indies, many also dependent on slave labour.

Coffee substitutes, known as ‘surrogates’ in late eighteenth- and nineteenth-century Germany,

emerged more or less in parallel with consumption of the true coffee bean. Europeans started coming up

with local alternatives to the exotic coffee bean in the later seventeenth century: some of these were

roasted wheat, chestnuts, rye, almonds, and oats. Rather many consider oat coffee so beneficial that they

prefer it in many aspects to true coffee’. Over the course of the eighteenth century, coffee surrogates

were a topic of intense discussion in the burgeoning literary-intellectual public.

Industry Review

8 Caffè Verde: the Coffee of Green and Healthy


Coffee is one of the most prominent drinks in the world, and the coffee bean is the second most

traded product after petrol on the global market. In more than 50 countries, more than 25 million farmers

are active in the production of coffee. The market for organic coffee is fueled by the many health

benefits it provides. It's high in antioxidants including polyphenols, flavonoids, and catechins, for

example. These prevent large-scale cellular degradation by stabilizing dangerous free radicals found in

the human body. Furthermore, the trend of out-of-home coffee consumption is increasing, indicating that

coffee consumption will increase in the coming years. As a result, the global organic coffee market is

expected to expand as a result of this rise. The global demand for organic coffee is expected to be driven

by the health benefits associated with coffee, as well as changing consumer trends.

According to studies, global coffee consumption continues to rise. Experts forecast that

consumption will rise in tandem with population growth. Furthermore, domestic demand grows at a rate

of 2.25 percent per year. This may be due to the rise of coffee specialty shops that appeal to a broader

and younger clientele.

In our country, no morning is complete without coffee. We have our own Batangas barako to be

proud of. Instant coffee then came into the scene, and lately, gourmet and specialty coffee with the

introduction of foreign cafés such as Starbucks, Seattle's Best, and the like. Coffee drinking has now

become more than just a way to wake up one's nerves, it has become a trend.

Key Drivers and Barriers

DRIVERS BARRIERS
• Large gap in supply and demand • Capital Intensive
• Low cost of service • Rural Area Location
• Cash Business • Acceptance in the market
• New trend in the market • Seasonal raw materials

Table 1: Key Drivers and Barriers

Target Market

Our target market is determined from the number of people within the mentioned Barangays of

the said municipality. In order to identify the population demand for the proposed coffee shop for that

area in Sto. Tomas, Davao del Norte, we used the Slovin’s formula in determining the number of

9 Caffè Verde: the Coffee of Green and Healthy


respondents that will be surveyed. We use the actual number of people aged between 15-29 for our

young clientele (33,817) and 30-44 for the working patrons (23,716), a total of 57,593 and a 10%

margin of error. Margin of error denotes the allowed probability of committing error in selecting a small

representative of the population.

Where:

N = Number of samples
n = Total population
e = Margin of error

57,593
Therefore: N= 2
(1+ 57,593 x 0.1 )

N=99.8 rounded off to 100, the appropriate sample size

for the said total population.

SWOT Analysis

Strength

• Based on its smaller size, the fact that it is not a franchise, Caffè Verde is a unique coffee shop

concept unlike any other in Davao del Norte market, for they serve organic and healthy coffees.

• Handpicked baristas will bring professionalism and enthusiasm to the shop.

• Affordable price of coffee drinks

• Easily located

• Caffè Verde offers products that are unique or newlydeveloped.

• Excellent customer service experience.

Weakness

• Franchises are the easiest way and often the safest conduit to start a café; the café will not have the

backing of one of these established entities.

• Caffè Verde has a minimal budget and is competing against larger and more established

coffeehouses for market share.

• New name in a coffee industry.

Opportunity

10 Caffè Verde: the Coffee of Green and Healthy


• Offers newlydeveloped products such as their main products, Sara-sara: organic rice coffee,

Turmeric Latte, and Organic Corn coffee.

• No direct competitors around the area

• Can create a good name

• Using “word of mouth” as a marketing strategy for every satisfied customer.

• Government programs that pays attention to SME’s

Threats

• Increasing inflation rates of coffee beans and rice.

• Customers transferring to other alternatives

• Rising number of local fast food chains and their lower meal prices.

• Sophisticated taste of consumers in coffee drinks

Chapter III

BUSINESS VIABILITY

 Marketing Aspect

11 Caffè Verde: the Coffee of Green and Healthy


Caffè Verde will offer its customer the best tasting coffee drinks and other food and beverages in

the area. This will be achieved by using good quality ingredients and strictly following preparation

guidelines.

In this part, the description of the market, target customers and the location of the business will

be elaborated. This also includes the competitors, the supply and demand of the business, the demand

structure, and the activities and strategies in marketing the business.

Area Covered

The area covered refers to where the business is to be set up and the areas surrounding it.

Geographically, the target area is in Brgy. Tibal-og primarily located at Sto. Tomas, Davao del Norte.

There are a total of 57,593 people aged between 15-44 in this municipality which are the primary

subjects of this study.

This location is composed of establishments, apartments, boarding houses, the municipal’s

public market and public transportation terminal.

The total number of people in age sub-groups was obtained from the list of National

Statistics’ Survey of Population and Household by the said municipality as of the year 2015.

Age Sub-groups Number of people


15 to 19 11,288
20 to 24 11,571
25 to 29 11,018
30 to 34 9,227
35 to 39 7,956
40 to 44 6,533
TOTAL 57,593

Table 2: Target Market

Demand and Supply Analysis


Demand Analysis
Age Sub-groups No. Of people in sub- Percentage Total no. Of
groups (b) population who are
(a) willing to avail healthy
coffees
15-19 11,288 48% 5,418
20-24 11,571 51% 5901
25-29 11,018 47% 5178
30-34 9,277 36% 3334
35-39 7,956 34% 2705
40-44 6,533 50% 3267
TOTAL 57,593 25,803
Table 3: Demand Analysis

Supply Analysis

12 Caffè Verde: the Coffee of Green and Healthy


Existing Coffee Working Hours per No. Of Working Capacity of Cycle
shops in the Day Machines Holidays per per Week
Area week
0 0 0 0 0
TOTAL 0 0 0 0
Table 4: Supply Analysis

Upon further research, it was found that there is no existing cafe or coffee shop around the area of Sto.
Tomas, Davao del Norte.

Demand and Supply Gap Analysis


Demand Supply Demand and Supply Gap
25,803 0 25,803
25,803
Table 5: Demand and Supply Gap

Market Share Analysis


Age No. Of people % who are People who are % of willing to Total of people
Sub- in sub-groups willing to willing to avail avail healthy who are willing
groups (a) avail Healthy coffees coffees to avail
healthy offered in the healthy coffees
coffees given location
15-19 11,288 48% 5,418 47% 2546
20-24 11,571 51% 5901 75% 4426
25-29 11,018 47% 5178 61% 3159
30-34 9,277 36% 3334 56% 1867
35-39 7,956 34% 2705 35% 947
40-44 6,533 50% 3267 40% 1307
TOTAL 57,593 44.8% 25,803 14,252
Table 6: Market Share Analysis

Advertising and Promotion

1. Grand Opening or Ribbon Cutting

The partners will coordinate with a local event coordinator to organize the launching of the

business. This is one of the most effective ways in attracting customers and making them aware that

we’re “Open”. The expenses for the grand opening will be shouldered by the partners from their

personal funds.

2. Light Signage

This is a common way to direct customers to your shop. It must be clearly readable and

recognizable from the street so that customers will easily identify and find your business place. The

lighting is important during night hours. According to business.ph, a common sized signage costs

around Php1350.00 including the electrical works and light bulb.

3. Leaflets and flyer

13 Caffè Verde: the Coffee of Green and Healthy


This will include the information such as the services offered, price list, company address and

contact number, business hours and business slogan. The design will be personally done by the partners

and the total amount of Php2500.00 will be allotted for the printing and distribution of the leaflets and

flyer.

4. Caffè Verde’s Loyalty Card

After the business become stable and the cafe already established their very own

customers. Caffè Verde will distribute loyalty cards to those frequent individuals who will buy 8 cups of

the Php 50.00 (medium cup) of any organic coffees, They can also avail an on the house coffee in any

flavor they want upon receiving the said loyalty card.

5. Promos

Caffè Verde will also offer a promo where the customers will have chances to win prizes, like

free biko or a cup of coffee, underneath the paper cups. Monthly promos will likewise be offered. Every

January of the year, the coffee drinks will be offered on “Resolu-cups” where customers can write in the

coffee cups their resolutions for the year and will be placed on a designated spot in the shop. During the

Valentine’s weekend, a 50% discount will be given on the second coffee drink for every one coffee

drink bought in a single purchase. And on December, the coffee shop will offer a 15% Christmas

discount in every coffee and biko pair bought. There will also be a group promo on the months of

August to October and January to March where you can have a free cup of coffee drink on every five

(5)cups of coffee bought in a single purchase. And during the anniversary week of the coffee shop, 25%

discount on all rice cake products will be offered to every customer and an additional 30% discount,

inclusive of the 20% SC discount, for senior citizens.

 Management and Personnel Aspect

Tagline

The coffee of green and healthy.

Mission Statement

To establish a trusted predecessor in coffee businesses in the greater of Davao del Norte.

Heading the innovation, service and quality sector, that promotes local rice farmers and producers to

14 Caffè Verde: the Coffee of Green and Healthy


create sustainable employment and to show Filipino hospitality as a business that promotes the

environment.

Vision Statement

Caffè Verde as a coffee shop dedicated to bring the best in providing high-quality and organic

coffee drinks in coffee bags and serve healthy foods in silver platter, to empower local farmers and their

goods, to demonstrate the pleasing Filipino lifestyle and culture, using environmentally friendly

products and enhancing employee satisfaction while providing their shareholders with a stable return.

Core Values

 CLIENT VALUE CREATION

Be understanding, and friendly to develop a long term relationship to the customers.

 INTEGRITY

Be transparent in communication and honest as integrity is the foundation of our guiding principles.

 SOCIAL RESPONSIBILITY

To treat our employees with respect and dignity they deserve and take preservation to our environment.

 ACCESSIBILITY

Be considerate for our customers in terms of a fair price value of a satisfactory kind of service and

timeliness of availability of the service for our customers.

Manpower Requirements

a) Supervisor

Male or Female

Age must be 18-25 years old

• At least 2 years Food and Beverage Management Experience as a manager or supervisor

• Leadership and Management skills

• Good at Oral & Written Communication

• Has a pleasing personality

• Computer Literate

• Knowledgeable in food and beverage business and financial analysis

• Should be knowledgeable in operating/ handling commissary.

b) Service Crew

15 Caffè Verde: the Coffee of Green and Healthy


Male or Female

Age must be 18-25 years old

• At least high school graduate

•Has knowledge in customer service.

• Has good interpersonal and communication skills

• Always maintain the cleanliness of the station

• Smart and with pleasing personality.

c) Barista

Male or Female

Age must be 18-30 years old

•Has at least a Vocational Diploma or Short Course Certificate, or

•Bachelor's Degree in Culinary, Food and Beverage Services

•Extremely knowledgeable about making coffee and mixing coffee and other beverages.

d) Cook

Male or Female

Age must be 18-30 years old

• Should have at least 2 years of cooking experience in a business.

• Physically healthy (free from communicable diseases)

• Must be knowledgeable about the product of the business.

• Attentive and productive in the working place.

e) All-rounder (Dishwasher and Maintenance)

Male or Female

Age must be 20-30 years old

Without any movement restriction

• At least high school graduate

• Work willingness

• Multitasking ability

• Considerate

Organizational Structure

16 Caffè Verde: the Coffee of Green and Healthy


PARTNER C PARTNER K

SUPERVISOR

COOK BARISTA

SERVICE CREW DISHWASHER & MAINTENANCE

Figure 2: Organizational Structure

Job Description and Duties

A) Partner C

• Accounting and record keeping.

• Preparing tax and other legal and regulatory requirements.

B) Partner K

• Auditor and assets custodian.

• Inspection of the operational and technical processes of the business

C) Supervisor

• Monitors the team’s performance and reports to the partners when required

• Must be able to demonstrate skills in business, managerial knowledge and smooth interpersonal

relationship with his team.

• Attracts patrons by developing and implementing marketing, advertising, public and community

relations programs; evaluating program results; identifying and tracking changing demands.

• Maintains patron satisfaction by monitoring, evaluating, and auditing food, beverage, and service

offerings; initiating improvements; building relationships with preferred patrons.

D) Barista

• will be extremely knowledgeable and offer assistance in any coffee purchase while simultaneously

providing customers with outstanding service.

17 Caffè Verde: the Coffee of Green and Healthy


E) Cook

• Responsible for preparing and cooking the product.

F) Service Crew

• Greets guests and suggestively sells and fills food and beverage orders.

• Provides customers with a quick and accurate service and show sensitivity to their individual

needs.

• Prepares food and drinks offered involving use of a broad range of equipment and tools.

• Handles cash, credit card and discount transactions with the assistance of a POS (Point of Sale)

register.

• Verifies a starting bank and completing a daily audit report when balancing the drawer at the end

of the shift.

• Straightens chairs and tables, and maintains a clean, sanitized food service area by picking up

litter and following established cleaning procedures.

• Uses a variety of cleaning utensils and chemical cleaning products along with the correct

protective equipment.

• Ensures extraordinary guest service by providing positive interactions with guests in a

friendly and courteous manner.

G) All-rounder (Dishwasher and Maintenance)

• The one who ensures the cleanliness and orderliness of the coffee shop before and after each shifts.

• The one who is responsible in washing the dishes.

Motivating and Rewarding Employees

Aside from the basic salary and necessary benefits given to the employees, 13th Month Pay must

be given as stated in the 13th Month Pay Law, Memorandum Order, P.D. No. 851 and also, De Minimis

Benefits such as Uniform Allowance and Laundry Allowance. Furthermore, it is important for the

partners to have a tight bond with their employees to avoid hostility and to promote trust and loyalty.

There will also be celebrations during special occasions such as Birthdays, Christmas and New Year to

be organized by the partners.

 Productions and Operations Aspect

18 Caffè Verde: the Coffee of Green and Healthy


Equipment and Supplies

Coffee Drip Kettle Dripper and Pot Drip Station Coffee Drip Scale Bar Spoons

Coffee Grinder Cappuccino Cup & Steaming Pitcher


Shot Glass
Latte Cup & Saucer
Brush Saucer

Water Goblets Highball Glass Ice Shovel


Irish Coffee Glass Collins Glass

Automatic Drip
Blind Filter Basket Rancillo Classe7E
Tong Spatula Coffee Maker
Espresso Machine

Blender French Press Siphon Coffeemaker Pour-over Bialetti Moka Pot

Whipped Cream Milk Carafe


Serving Trays Display Fridge Double Glass Door
Dispenser
Refrigerator

Sofas & Coffee


POS Cash Register Table and Highchairs
Tables Wireless Router
Telephone

19 Caffè Verde: the Coffee of Green and Healthy


Plate & Utensils
Recycled Paper Frappe Take-away

Coffee Cups Cups Various Beverage

Glasses

Floor Plan

20 Caffè Verde: the Coffee of Green and Healthy


TOILET
KITCHEN

FIRE EXIT
COUNTER

READING
AREA
RECEPTION

ENTRANCE

Figure 3: Floor Plan

Floor Sketch

(Figure 4.1 : Floor Virtual Sketch, Reception POV)

21 Caffè Verde: the Coffee of Green and Healthy


( Figure 4.2: Aerial View of Entrance POV)

Operational Procedure

Figure 5: Operational Procedure

Business Culture

I. Operating hours from 6:00 am to 6:00 pm – Sunday off

First Shift: 6:00 am to 12:00pm

Second Shift: 12:00pm to 6:00pm

II. Day to Day Monitoring

22 Caffè Verde: the Coffee of Green and Healthy


The partners will keep a close watch on the employees' attitudes and performance, as well as

provide ongoing coaching and directions. When an employee arrives, they should sign in to the record

book, which will include their time in and out as well as their signature, in order to keep track of their

daily time records. Customers will be greeted by the service crew as they enter the coffee shop, and they

will be assisted in placing their food and coffee orders. The barista will be in charge of creating the

coffees, while the cook will be in charge of the kitchen cooking. The whole amount traded from clients

will be returned to the asset custodian at the end of the day's operations.

 Legal Aspect

LEGAL REQUIREMENTS YEAR: 2021


Barangay Clearance ₱150.00
Barangay Garbage Fee 700.00
Community Tax Certificate: 500.00
Fire Safety and Inspection Fee 176.00
Fire Extinguisher 2,100.00
SEC Certified Articles of Partnership:
Reservation of Partnership Name 100.00
Filing Fee 2,020.00
Various Notarial Fee 500.00
BIR Business Registration:
Annual Registration Fee 500.00
Documentary Stamp Tax for Lease 361.00
Purchase of Book of Accounts 100.00
Mayor’s Business Permit:
Mayor’s Permit Fee 1,000.00
Sanitary Inspection Fee 350.00
Eco-Solid Waste Management 100.00
Health Clearance 30.00
Certification Fee 50.00
Tax Clearance 50.00
Health Examination 50.00
Occupational Fee 50.00
Business Plate No. 80.00
Sticker 10.00
Business Tax 200.00
TOTAL ₱9,177.00
Table 7: Legal Requirements

 Financial Aspect

The purpose of this is to provide proof on the financial feasibility of the Caffè Verde: the Coffee

of Green and Healthy. This will focus on the assessment of the projected starting capital investments,

expenses, revenues, disbursements and returns. The results in this aspect will be most

relevant to investors who are planning to venture into the cafe industry.

23 Caffè Verde: the Coffee of Green and Healthy


Financial Assumptions

• The business will operate as a General type of partnership wherein the partners will be considered

General Partner.

• A five-year projection is made starting from the current year 2021.

• The revenue of the company will be generated from the coffee and food products to be sold by the

company.

• There will be 5% increase to employees’ salary each year.

Project Financing

The proposed business’ initial investment will be P 500, 000 which will be divided to the partners. Their

capital contribution will be coming from their savings or loans. In order for them to sustain the

operation of the proposed business - Caffè Verde.

DESCRIPTION % of the TOTAL AMOUNT


CONTRIBUTION
LAPE, CHARMIE LHYN E. 50% ₱250,000.00
KINDICA, KRISHEA KAYE 50% ₱250,000.00
A.
TOTAL 100% ₱500,000.00
Table 8: Capital Contribution

Partner’s Capital Contribution

Lape
50% 50%
Kindica

The partners’ equity and their share in the profit and loss would be based on the partners’

contribution which is equally distributed.

Figure 6: Partners’ Capital Contribution Pie Chart

Project Cost

PROJECT COST
CAPITAL EXPENDITURE
Furniture and Fixtures ₱200,000.00
Tools and Equipment ₱200,000.00
TOTAL ₱400,000.00
WORKING CAPITAL

24 Caffè Verde: the Coffee of Green and Healthy


Maintenance Supplies ₱5,000.00
Sanitary Supplies ₱2,500.00
Food Supplies ₱50,000.00
Utensils ₱17,500.00
TOTAL ₱75,000.00
TOTAL PROJECT COST ₱475,000.00
Table 9: Project Cost

Caffè Verde: the Coffee of Green and Healthy


Statement of Changes in Partners’ Equity

Initial 2021
Beginning Capital ₱500,000 ₱500,000
Add: Net Income 79,950
₱500,000 ₱579,950
Beginning Capital
Lape ₱250,000 ₱289,975
Kindica 250,000 ₱500,000 289,975 ₱579950
Ending Capital ₱500,000 ₱579,950

2022 2023
Beginning Capital ₱579,950 ₱711,290
Add: Net Income 131, 340 145, 812
₱711,290 ₱857,102
Beginning Capital
Lape ₱355,645 ₱428,551
Kindica 355,645 ₱711,290 428,551 ₱857,102
Ending Capital ₱711,290 ₱857,102

2024 2025
Beginning Capital ₱857,102 ₱1,013,095
Add: Net Income 155, 993 158, 468
₱1,013,095 ₱1,171,563
Beginning Capital
Lape ₱506,647.50 ₱585,781.5
Kindica 506,647.50 ₱1,013,095 585,782 ₱1,171,563
Ending Capital ₱1,013,095 ₱1,171,563
Table 10: Statement of Changes in Partners’ Equity

Projected Statement of Financial Position

A statement of the assets, liabilities, and capital of a business or other organization at a particular

point in time, detailing the balance of income and expenditure over the preceding period.

Caffè Verde: the Coffee of Green and Healthy


Statement of Financial Position

INITIA
2021 2022 2023 2024 2025
L
ASSETS
Current Assets

25 Caffè Verde: the Coffee of Green and Healthy


₱192,23 ₱331,04
Cash ₱25,000 ₱61,890 ₱482,535 ₱636,753
0 2
Accounts Receivable 0 0 0 0 0 0
Purchases/Supplies 75,000 75,000 80,000 87,000 91,500 95,750
₱100,00 ₱136,89 ₱272,23 ₱418,04
TOTAL Current Assets ₱574,035 ₱732,503
0 0 0 2
Non-Current Assets
₱200,00 ₱200,00 ₱200,00 ₱200,00
Kitchen Equipment ₱200,000 ₱200,000
0 0 0 0
Furniture and Fixtures 200,000 200,000 200,000 200,000 200,000 200,000
TOTAL Non-Current ₱400,00 ₱400,00 ₱400,00 ₱400,00
₱400,000 ₱400,000
Assets 0 0 0 0
₱500,00 ₱536,89 ₱672,23 ₱818,04 ₱1,132,50
TOTAL ASSETS ₱974,035
0 0 0 2 3

LIABILITIES &
CAPITAL
Current Liabilities
Accounts Payable 0 0 0 0 0 0
Partners' Capital
₱250,00 ₱268,44 ₱336,11 ₱409,02 ₱487,017. ₱566,251.
Lape, C.L.
0 5 5 1 5 5
566,251.5
Kindica, K.K. 250,000 268,445 336,115 409,021 487,017.5
0
₱500,00 ₱536,89 ₱672,23 ₱818,04 ₱1,132,50
TOTAL LIABILITIES ₱974,035
0 0 0 2 3
& CAPITAL
Table 11: Statement of Financial Position
Projected Income Statement

An income statement or profit loss account is one of the financial statements of a company and

shows the company’s revenues and expenses during a particular period. It indicates how the revenues

are transformed into the net income.

Caffè Verde: the Coffee of Green and Healthy


Income Statement
For the Year ended December 31, 2021

Sales Revenue (17,572.69 x 26 weeks) ₱456,890


Cost of Sales (10,690 x 26 weeks) -277,940
Gross Profit ₱178,950
Less: Operating Expenses
Salaries and Wages ₱75,000
Utilities 15,000
Miscellaneous 9,000 -99,000
Net Income ₱79,950

Caffè Verde: the Coffee of Green and Healthy


Income Statement
For the Year ended December 31, 2022

Sales Revenue(₱ 20, 400 x 52 weeks) ₱1, 060, 800


Cost of Sales( ₱ 10, 690 x 52 weeks) -555,880

26 Caffè Verde: the Coffee of Green and Healthy


Gross Profit ₱ 504, 920
Less: Operating Expenses
Salaries and Wages ₱ 319, 680
Utilities 44,400
Miscellaneous 9,500 -373,580
Net Income ₱ 131,340
Caffè Verde: the Coffee of Green and Healthy
Income Statement
For the Year ended December 31, 2023

Sales Revenue(22,440 x 52 weeks) ₱ 1,166,880


Cost of Sales( ₱ 11, 759 x 52 weeks) -611,468
Gross Profit ₱ 555,412
Less: Operating Expenses
Salaries and Wages ₱ 335,664
Utilities 63,936
Miscellaneous 10,000 -409,600
Net Income ₱ 145,812

Caffè Verde: the Coffee of Green and Healthy


Income Statement
For the Year ended December 31, 2024

Sales Revenue (₱ 24, 684 x 52 weeks) ₱ 1,283,568


Cost of Sales ( ₱ 12, 934 x 52 weeks) -672,568
Gross Profit ₱ 611,000
Less: Operating Expenses
Salaries and Wages ₱ 352,440
Utilities 92,067
Miscellaneous 10,000 -455,007
Net Income ₱ 155,993

Caffè Verde: the Coffee of Green and Healthy


Income Statement
For the Year ended December 31, 2025

Sales Revenue(₱ 27, 152 x 52 weeks) ₱ 1,411,904


Cost of Sales ( ₱ 14, 227 x 52 weeks) -739,804
Gross Profit ₱ 672,100
Less: Operating Expenses
Salaries and Wages ₱ 370,056
Utilities 132,576
Miscellaneous 11,000 -513,632
Net Income ₱ 158,468
Table 12: Five Year Projection of Income Statement

Profitability Analysis

1. Net Profit Ratio

27 Caffè Verde: the Coffee of Green and Healthy


For the purpose of this ratio, net profit is equal to gross profit minus operating expenses and income tax.

All non-operating revenues and expenses are not taken into account because the purpose of this ratio is

to evaluate the profitability of the business from its primary operations.

2021 2022 2023 2024 2025


Net Income 79,950 131,340 145,812 155,993 158,468
Sales Revenue 456,890 1, 060, 800 1,166,880 1,283,568 1,411,904
Net Profit Ratio 0.17 0.12 0.12 0.12 0.11
Table 13: Net Profit Ratio

2. Return on Assets

Return on Assets (ROA) is a financial ratio that shows the percentage of profit a company

earns in relation to its overall resources. It is commonly defined as net income divided by total

assets.

2021 2022 2023 2024 2025


Net Income 79,950 131,340 145,812 155,993 158,468
Total Assets 536,890 672,230 818,042 974,035 1,132,503
Return on Asset 0.15 0.20 0.18 0.16 0.14
Table 14: Return on Asset

3. Return on Equity

It measures the rate of earnings on resources provide by owners.

2021 2022 2023 2024 2025


Net Income 79,950 131,340 145,812 155,993 158,468
Total Equity 536,890 672,230 818,042 974,035 1,132,503
Return on Equity 0.15 0.20 0.18 0.16 0.14
Table 15: Return on Equity

28 Caffè Verde: the Coffee of Green and Healthy


CHAPTER IV

CONCLUSION AND RECOMMENDATIONS

Results of the projected income statement, projected statement of financial position and

profitability analysis under the base case show that the project is feasible and viable. This is based on the

positive net present value and return on equity greater than the cost of capital or prevailing interest rate.

The projected information is deemed relatively low in risk with a high market sustainability and possible

growth, especially the business has no direct competitor around the area. Therefore, it is recommended

that the partners proceed with operating Caffè Verde as an income generating project of the institution by

the month of July this year 2021.

A number of actions are recommended for the business. First, the business has to maintain high

customer traffic in its store to sustain all sales targets. This would include studies on maximizing store

hours and including weekends in store operations. Second, ensuring sustainability will require a periodic

evaluation of strategies used on all aspects of the venture and adjusting the strategies to fit the needs and

wants of customers. Extensive promotion of products is recommended through a launch of the Caffè

Verde complete with social media exposure which the institution can harness through media

connections. Moreover, grassroots promotion within the public market is suggested through taste tests in

the various buildings and periodic promos for repeat customers. Congruent to the strategy in customer

service is ensuring that the personnel producing the coffee and beverage are in high morale and

effective. It is then proposed that an incentive scheme be studied for all employees of Caffè Verde.

Further studies on ensuring consistency in taste and production efficiency is also recommended,

including time and motion studies. The cafe will also benefit in developing its own distinct product line

such as the organic coffees of Caffè Verde and introducing a signature taste on some of its beverage.

29 Caffè Verde: the Coffee of Green and Healthy


REFERENCES

https://tacadaojmd.wixsite.com/sarasararicecoffee

https://www.intoxicatingspaces.org/2019/11/18/faking-it-a-little-history-of-coffee-substitutes/

https://sarasararicecoffeeblog.wordpress.com/

https://www.bar.gov.ph/index.php/digest-home/digest-archives/100-2001-3rd-quarter/3368-july-

sep01-the-philippine-coffee-industry-a-profile

https://esquirescoffee.co.uk/news/coffee-shop-trends/

https://www.philatlas.com/mindanao/r11/davao-del-norte/santo-tomas.html

https://www.philatlas.com/mindanao/r11/davao-del-norte/santo-tomas/tibal-og.html

30 Caffè Verde: the Coffee of Green and Healthy

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