 PRICES OF OTHER GOODS

Lowering prices in an already low margin environment, such as a coffee shop, isn’t usually a good idea.
Unless the prices are currently a good deal higher than the competition, lowering them won’t add a
great deal of new customer traffic.

So, this type of business succeeds with one of two approaches:

Great location, with limited competition, or Unique products that are popular, and not offered by the
competition. It can usually charge a little more for “unique”.

If you drop your prices by 10% (which might not be enough for people to notice), you would have to
increase your customer counts by over 20% just to break even on the deal (based on standard
restaurant profit margins). Even then, the strategy only works if your competition doesn’t decide to start
dropping prices too.

The competition can always cut their prices. The 2 points listed above are things that the the
competition will have difficultly duplicating.

• PRICES FACTORS OF PRODUCTION

There are many, many factors that go into the price of coffee beans. These include the type of bean, the
cupping quality, the availability of coffee beans in general, and even something like the weather in
coffee growing regions.

All of these factors, plus any additional fees for certified coffee beans (like Organic, Rainforest Alliance,
Fair Trade, etc.), the cost to import the coffee and the cost to roast and grind the coffee are factored in
when reaching a wholesale or retail price for ground coffee.

It is a complex process, and most roasters have a department who works with Cooperatives, importers
and coffee growers, as well as a team that monitors the price of coffee and determines when to buy
based on calculated risk (hedging). Another important factor is the geographical location of the farm
which we chose a location near an office park or in a business center. Many hardworking people, who
are normally quite busy, appreciate coffee. Which makes it easy for employees to stop by and get their
favorite caffeinated beverages.

• STATE OF TECHNOLOGY

As the world comes to rely on accessibility and mobility Modern technology is affecting absolutely
everything with no exception for the restaurant industry. Coffee owners need a quick upgrade onto their
current technology that gives them optimistic results & make their business run more efficiently. During
this situation of pandemic, it will have a solution that users can, just like coffee gear is also improving
rapidly, but there remains a massive problem grinders. Brewers and filters are getting better and better,
but grinder technology remains the same. Today’s grinders are quick and programmable (convenient)
but still terribly inconsistent. A grinder that minimizes the presence of fines will be one heck of machine.
And also, by the help of technology, customers will be more safe during this pandemic because they can
order in just a minute and it will proceed in any available grab.

• GOVERNMENT POLICY

The government provides various schemes and concessions for small businesses through loans and
other ways. Government also helps in taxing policies for small businesses which supports the business to
improve economically and also internally by hiring extra personnel and also this helps to achieve goals of
company which is derived while starting the business. Some of the small businesses are started with the
help of bank loans which are under government norms and policies. For some businesses government
helps by providing monthly loans to increase turnover of a business.

WHEREAS, the 20% tax imposed by said Sec. 206 on proprietors or operators of restaurants,
refreshment parlors, bars and cafes and other eating places maintained inside the premises of a cockpit,
cabaret, day or night club and the 20% amusement tax imposed under Sec. 268 of the same Code on the
same establishments have been found to be prohibitively high and adversely affect the development of
the tourist industry in our country.

• CALAMITIES

Starting or running a coffee shop successful business all depends on your Market and Environment. We
only have to take these risk factors. Risks are incidents, situations or circumstances which can cause
negative consequences for a business. And this was the risks will face to the owners.

-Strategic risks (operation)

-Compliance risks (complying with laws and regulations)

-Financial risks (financial structure of the business, transactions and the financial systems)

-Operational risks (operational and administrative procedures)

-Market/Environmental risks (storms or natural disasters, economic turmoil, global financial crisis,
changes in government legislation/policies)

Even though these are not ideal situations, they show us how important it is to act together, work
together as an industry, and keep the supply chain connected. If we want our industry to thrive and
keep growing, we need to support the base of the chain and keep working together.

 GOALS/OBJECTIVE OF THE FIRM

In opening the business its understandable that it might have concerns and goals. There are so many
reasons why a coffee shop is a great business to get into, for social, financial, and personal reasons.
During this pandemic, many people will tend to love the coffee most especially for the students.
Everyone loves a deal, it increasingly become a place where potential customers can find deals and
discounts for their next coffee or meal. It could try offering customers a small discount on their meal if
they follow your Instagram account or share your post but it’s always a smarter strategy to tie your
discount to loyalty, rather than a one off purchase. The aim is to encourage people to keep on coming
back to your cafe, not come once to claim a cheap meal. It is more likely to attract customers to your
café if it looks interesting. People are drawn to different things some like small, cosy cafe with exposed
brick interiors, and some like large, leafy spaces with plenty of light. Just ensure that aesthetic aligns
with the vision, and that will to create a space to the customers and they will love.

 Price of the Given Commodity

Coffee is now widely regarded as an artisanal product rather than merely an energy drink. As a result,
the majority of coffee users favor locally owned coffee shops and high-quality, specialty coffee items like
flavored coffee. They are also willing to pay more for a one-of-a-kind coffee experience that appeals to
all of their senses. As a result, coffee roasters and baristas are incorporating new approaches by
experimenting with coffee's qualities, such as cold coffee brewing with more nutrients.

People are beginning to appreciate coffee more fully. People can openly discuss specialty coffee, and
businesses are now looking to develop innovative procedures that will eventually add value to the
finished product. Flavor profiles, scent, and other natural features are now sought after by consumers.
Customers are increasingly seeking for unique coffee interpretations. And when the price of coffee is
high and farmers produce more, supply increases, willing or not, coffee shop could also affect their
pricing. During the subsequent times of continuous demand, however, the greater volume on the
market exerts downward pressure on pricing which could also affect the production of the coffee shop
since the major products will be sold is coffee.

 Natural Conditions

The Philippines is one of the few nations producing economically viable Arabica, Robusta, Liberica, and
Excelsa coffee varietals. Locally called as Barako/Baraco, Philippine Liberica is a coffee bean that creates
a very strong and powerful cup. The larger cherries and beans, which are mostly cultivated in the
provinces of Batangas and Cavite, are a staple in the Philippine coffee landscape. With its archipelagic
nature and tropical weather, the Philippines combines climactic and soil conditions from lowlands to
mountainous regions that are ideal for all four varieties. Coffee trees can be found in the three main
islands of Luzon, Visayas, and Mindanao. The general harvest season lasts from October to March.

Coffee has been cultivated in the Philippines for hundreds of years. Commercial robusta has been grown
in the nation for decades, with specialized arabica production accounting for only a small portion of the
local coffee business. A variety of problems have hampered the spread of Philippine speciality coffee. In
recent years, natural disasters, environmental challenges, and volatile economic situations have
impeded output. Demand is also far outstripping supply: the Philippines drank 170,000 metric tons of
coffee in 2018, but only produced 35,000. While 2020 may bring new problems, such as the Covid-19
pandemic and the eruption of the Taal Volcano, it may also usher in a new age for Philippine speciality
coffee.