1.

0 Executive Summary
Jaroy, unlike a typical cafe, will provide a unique forum for communication and entertainment through the medium of the Internet. Jaroy is the answer to an increasing demand. The public wants: 1. access to the methods of communication and volumes of information now available on the Internet, and 2. access at a cost they can afford and in such a way that they aren't socially, economically, or politically isolated. Jaroy's goal is to provide the community with a social, educational, entertaining, atmosphere for worldwide communication. Jaroy is incorporated as a Limited Liability Company, with its head office at 17, Salawu Olabode Avenue, Idi Aba, Abeokuta, Ogun State. The Company is a Corporate Member of the Nigeria Computer Society. The financing, in addition to the capital contributions from the owner, and a Bank Loan, will allow Jaroy to successfully open and maintain operations through year one. The large initial capital investment will allow Jaroy to provide its customers with a full featured Internet caf. A unique, upscale, and innovative environment is required to provide the customers with an atmosphere that will spawn socialization. Successful operation in year one will provide Jaroy with a customer base that will allow it to be self sufficient in year two.

1.1 Objectives
Jaroy's objectives for the first three years of operation include: The creation of a unique, upscale, innovative environment that will differentiate Jaroy from local coffee houses. Educating the community on what the Internet has to offer. The formation of an environment that will bring people with diverse interests and backgrounds together in a common forum. Affordable access to the resources of the Internet and other online services.

1.2 Keys to Success

The keys to the success for Jaroy are: The creation of a unique, innovative, upscale atmosphere that will differentiate Jaroy from other local coffee shops and future Internet cafes. The establishment of Jaroy as a community hub for socialization and entertainment.

The creation of an environment that won't intimidate the novice user. Jaroy will position itself as an educational resource for individuals wishing to learn about the benefits the Internet has to offer.

1.3 Mission
As the popularity of the Internet continues to grow at an exponential rate, easy and affordable access is quickly becoming a necessity of life. Jaroy provides communities with the ability to access the Internet, enjoy a bottle of cold drink, and share Internet experiences in a comfortable environment. People of all ages and backgrounds will come to enjoy the unique, upscale, educational, and innovative environment that Jaroy provides.

1.4 Risks
The risks involved with starting Jaroy are: Will there be a demand for the services offered by Jaroy ? Will the popularity of the Internet continue to grow, or is the Internet a fad? Will individuals be willing to pay for the service Jaroy offers? Will the cost of accessing the Internet from home drop so significantly that there will not be a market for Internet Cafes such as Jaroy?

2.0 Company Summary

Jaroy, soon to be located in the Mawuko Campus of UNAAB, and will offer the community easy and affordable access to the Internet. Jaroy will provide full access to email, WWW, FTP, Usenet and other Internet applications such as Telnet and Gopher. Jaroy will also provide customers with a unique and innovative environment for enjoying great coffee, specialty beverages, and bakery items. Jaroy will appeal to individuals of all ages and backgrounds. The instructional Internet classes, and the helpful staff that Jaroy provides, will appeal to the audience that does not associate themselves with the computer age. This educational aspect will attract younger and elderly members of the community who are rapidly gaining interest in the unique resources that online communications have to offer. The downtown location will provide business people with convenient access to their morning coffee and online needs.

2.1 Company Ownership

Jaroy is a privately held Oregon Limited Liability Corporation. Cale Bruckner, the founder of Jaroy, is the majority owner. Luke Walsh, Doug Wilson, and John Underwood, all hold minority stock positions as private investors.

2.2 Start-up Summary Jaroy's start-up costs will cover coffee making equipment, site renovation and modification, capital to cover losses in the first year, and the communications equipment necessary to get its customers online. The communications equipment necessary to provide Jaroy's customers with a high-speed connection to the Internet and the services it has to offer make up a large portion of the start-up costs. These costs will include the computer terminals and all costs associated with their set-up. Costs will also be designated for the purchase of a coloured laser printer, a photocopier / network printer and a scanner. Startup Requirement S/N Start Up Expenses Details Computer System: Pentium IV 2.4GHz or more with 80GB 1 Harddisk, 2GB RAM, 10/100 ethernet card 2 Coloured Network Laserjet Printer 3 Sharp Network Printer / Photocopier 4 A4 Flatbed Scanner 5 UPS Generator: 40 - 50KVA Pekins Generator Internet Connection / Communication Line 512Kbps Internet Connection (months) Internet Connection Backbone Equipment, Installation and Civil works Total Startup Expense Startup Assets Computer Table Computer Chairs Fan Rent / Building for Operation per annum Long Term Assets Other Current Assets Qty Unit Price Total Price

50 50,000.00 1 60,000.00 1 300,000.00 1 10,000.00 50 5,000.00 1 800,000.00

2,500,000.00 60,000.00 300,000.00 10,000.00 250,000.00 800,000.00 1,200,000.00 300,000.00 5,420,000.00

3 400,000.00 1 300,000.00

1 2 3 4

50 50 6 1 0 0

7,000 8,000 15,000 100,000 0 0

350,000.00 400,000.00 90,000.00 100,000.00 -

Total Start - Up Asset Total Start Up Requirement

940,000.00 6,360,000.00

Start - Up
7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 Investments Assets Expenses / Requirement

2.3

Proposed Locations and Facilities

The INHURD Department of University of Agriculture Abeokuta is given us a space inside their Mawuko Village Campus for the following reasons Proximity to the university community. Proximity to Staff and Students of the College. Proximity to the Male and Female Hostels

High visibility. All of these qualities are consistent with Jaroy's goal of providing a central hub of communication and socialization for the university community.

3.0 Services Jaroy will provide full access to email, WWW, FTP, Usenet and other Internet applications such as Telnet and Gopher. Printing, scanning, and introductory courses to the Internet will also be available to the customer. Jaroy will also provide customers with a unique and innovative environment for edutainment. 3.1 Competitive Comparison Jaroy will be the first Internet cafe in the Mawuko Campus of UNAAB. Jaroy will differentiate from other caf in Abeokuta by providing its customers with Internet, training and computing services. 3.2 Service Description Jaroy will provide its customers with full access to the Internet and common computer software and hardware. Some of the Internet and computing services available to Jaroy customers are listed below: Access to external POP3 email accounts. Customers can sign up for a Jaroy email account. This account will be managed by Jaroy servers and accessible from computer systems outside the Jaroy network. FTP, Telnet, Gopher, and other popular Internet utilities will be available. Access to Firefox or Internet Explorer browser. Access to laser and colour printing. Access to popular software applications like Adobe PhotoShop and Microsoft Word. Jaroy will also provide its customers with access to introductory Internet and email classes. These classes will be held in the afternoon and late in the evening. By providing these classes, Jaroy will build a client base familiar with its services. The computers, Internet access, and classes wouldn't mean half as much if taken out of the environment Jaroy will provide. A place to enjoy the benefits of computing in a comfortable and well-kept environment. 3.3 Fulfillment Jaroy will obtain computer support and Internet access from Suburband, Jaroy Head Office, and Gloworld. Bellevue will provide the Internet connections, network consulting, and the hardware required to run the . 3.4 Technology Jaroy will invest in high-speed computers to provide its customers with a fast and efficient connection to the Internet. The computers will be reliable and fun to work with. Jaroy will

continue to upgrade and modify the systems to stay current with communications technology. One of the main attractions associated with Internet cafes, is the state of the art equipment available for use. Not everyone has a Pentium PC in their home or office. 3.5 Future Services As Jaroy grows, more communications systems will be added. The possibility of additional units has been accounted for in the current floor plan. As the demand for Internet connectivity increases, along with the increase in competition, Jaroy will continue to add new services to keep its customer base coming back for more.

Market Analysis Summary Jaroy is faced with the exciting opportunity of being the first-mover in the Eugene cybercafe market. The consistent popularity of coffee, combined with the growing interest in the Internet, has been proven to be a winning concept in other markets and will produce the same results in Eugene. 4.1 Target Market Segment Strategy Jaroy intends to cater to people who want a guided tour on their first spin around the Internet and to experienced users eager to indulge their passion for computers in a social setting. Furthermore, Jaroy will be a magnet for students, Lecturers and other Professionals who desire to work or check their email messages in a friendly atmosphere. These professionals will either use Jaroy's PCs, or plug their notebooks into Internet connections. Jaroy's target market covers a wide range of ages: from members of Generation X who grew up surrounded by computers, to Baby Boomers who have come to the realization that people today cannot afford to ignore computers. 4.1.1 Market Trends A market survey was conducted in the Fall of 1996. Key questions were asked of fifty potential customers. Some key findings include: 35 subjects said they would be willing to pay for access to the Internet. One Hundred and Fifty Naira an hour was the most popular hourly Internet fee. 24 subjects use the Internet to communicate with others on a regular basis. 4.1.2 Market Needs The rapid growth of the Internet and online services, that has been witnessed worldwide, is only the tip of the iceberg. The potential growth of the Internet is enormous, to the point where one day, a computer terminal with an online connection will be as common and necessary as a telephone. This may be 5 or 10 years down the road, but for the next three years, the online service provider market is sure to experience tremendous growth. Being the first cyber-cafe in Universitys Mawukos Campus, Jaroy will enjoy the first-mover advantages of name recognition and customer loyalty. Initially, Jaroy will hold a 100 percent share of the cyber-cafe market in the University Community. In the next three years, competitors will enter the market. Jaroy has set a goal to maintain greater than a 50 percent market share. 4.2 Market Segmentation

Jaroy's customers can be divided into two groups. The first group is familiar with the Internet and desires a progressive and inviting atmosphere where they can get out of their offices or bedrooms and enjoy a great cup of coffee. The second group is not familiar with the Internet, yet, and is just waiting for the right opportunity to enter the online community. Jaroy's target market falls anywhere between the ages of 18 and 50. This extremely wide range of ages is due to the fact that both coffee and the Internet appeal to a variety of people. In addition to these two broad categories, Jaroy's target market can be divided into more specific market segments. The majority of these individuals are students and business people. See the Market Analysis chart and table below for more specifics.

Market Analysis Pie

University Students University Workers Others

Market Analysis Year 1 Potential Customers University Students University Workers Others Total Growth 5.00% 3.00% 2% 2000 500 500 3000 Year 2 2100 515 510 3125 Year 3 2205 530.45 520.2 3255.65 Year 4 2315.25 546.3635 530.604 3392.218 CAGR 5.00% 3.00% 2%

4.3 Service Business Analysis The retail coffee industry in Eugene experienced rapid growth at the beginning of the decade and is now moving into the mature stage of its life cycle. Many factors contribute to the large demand for good coffee in Eugene. The University is a main source of demand for

coffee retailers. The climate in Eugene is extremely conducive to coffee consumption. Current trends in the Northwest reflect the popularity of fresh, strong, quality coffee and specialty drinks. Eugene is a haven for coffee lovers. The popularity of the Internet is growing exponentially. Those who are familiar with the Internet are well aware of how fun and addictive surfing the Net can be. Those who have not yet experienced the Internet, need a convenient, relaxed atmosphere where they can feel comfortable learning about and utilizing the current technologies. Jaroy seeks to provide its customers with affordable Internet access in an innovative and supportive environment. Due to intense competition, cafe owners must look for ways to differentiate their place of business from others in order to achieve and maintain a competitive advantage. The founder of Jaroy realizes the need for differentiation and strongly believes that combining a cafe with complete Internet service is the key to success. The fact that no cyber-cafes are established in Eugene, presents Jaroy with a chance to enter the window of opportunity and enter into a profitable niche in the market. 5.0 Strategy and Implementation Summary Jaroy has three main strategies. The first strategy focuses on attracting novice Internet users. By providing a novice friendly environment, Jaroy hopes to educate and train a loyal customer base. The second, and most important, strategy focuses on pulling in power Internet users. Power Internet users are extremely familiar with the Internet and its offerings. This group of customers serves an important function at Jaroy. Power users have knowledge and webbrowsing experience that novice Internet users find attractive and exciting. The third strategy focuses on building a social environment for Jaroy customers. A social environment, that provides entertainment, will serve to attract customers that wouldn't normally think about using the Internet. Once on location at Jaroy, these customers that came for the more standard entertainment offerings, will realize the potential entertainment value the Internet can provide. 5.1 Strategy Pyramid The following subtopics provide an overview of Jaroy's three key strategies. Strategy pyramid graphics are presented in the appendix of this plan. 5.1.1 Attract Power Internet Users

Jaroy's second strategy will be focused on attracting power Internet users. Power Internet users provide an important function at Jaroy. Jaroy plans on attracting this type of customer by: Providing the latest in computing technology. Providing scanning and printing services. Providing access to powerful software applications. 5.1.2 Social Hub The third strategy focuses on building a social environment for Jaroy customers. A social environment, that provides entertainment, will serve to attract customers that wouldn't normally think about using the Internet. Once on location at Jaroy, these customers that came for the more standard entertainment offerings, will realize the potential entertainment value the Internet can provide. 5.1.3 Attract Novice Internet Users Jaroy's first strategy focuses on attracting novice Internet users. Jaroy plans on attracting these customers by: Providing a novice friendly environment. Jaroy will be staffed by knowledgeable employees focused on serving the customer's needs. A customer service desk will always be staffed. If a customer has any type of question or concern, a Jaroy employee will always be available to assist. Jaroy will offer introductory classes on the Internet and email. These classes will be designed to help novice users familiarize themselves with these key tools and the Jaroy computer systems. 5.2 SWOT Analysis The SWOT analysis provides us with an opportunity to examine the internal strengths and weaknesses Jaroy must address. It also allows us to examine the opportunities presented to Jaroy as well as potential threats. Jaroy has a valuable inventory of strengths that will help it succeed. These strengths include: a knowledgeable and friendly staff, state-of-the-art computer hardware, and a clear vision of the market need. Strengths are valuable, but it is also important to realize the weaknesses Jaroy must address. These weaknesses include: a dependence on quickly changing technology, and the cost factor associated with keeping state-of-the art computer hardware. Jaroy's strengths will help it capitalize on emerging opportunities. These opportunities include, but are not limited to, a growing population of daily Internet users, and the growing

social bonds fostered by the new Internet communities. Threats that Jaroy should be aware of include, the rapidly falling cost of Internet access, and emerging local competitors. 5.2.1 Weaknesses 1. A dependence on quickly changing technology. Jaroy is a place for people to experience the technology of the Internet. The technology that is the Internet changes rapidly. Product lifecycles are measured in weeks, not months. Jaroy needs to keep up with the technology because a lot of the Jaroy experience is technology. 2. Cost factor associated with keeping state-of-the-art hardware. Keeping up with the technology of the Internet is an expensive undertaking. Jaroy needs to balance technology needs with the other needs of the business. One aspect of the business can't be sacrificed for the other. 5.2.2 Opportunities 1. Growing population of daily Internet users. The importance of the Internet almost equals that of the telephone. As the population of daily Internet users increases, so will the need for the services Jaroy offers. 2. Social bonds fostered by the new Internet communities. The Internet is bringing people from across the world together unlike any other communication medium. Jaroy will capitalize on this social trend by providing a place for smaller and local Internet communities to meet in person. Jaroy will grow some of these communities on its own by establishing chat areas and community programs. These programs will be designed to build customer loyalty. 5.2.3 Threats 1. Rapidly falling cost of Internet access. The cost of access to the Internet for home users is dropping rapidly. Internet access may become so cheap and affordable that nobody will be willing to pay for access to it. Jaroy is aware of this threat and will closely monitor pricing. 2. Emerging local competitors. Currently, Jaroy is enjoying a first-mover advantage in the local cyber-cafe market. However, additional competitors are on the horizon, and we need to be prepared for their entry into the market. Many of our programs will be designed to build customer loyalty, and it is our hope that our quality service and up-scale ambiance won't be easily duplicated. 5.2.4 Strengths

1. Knowledgeable and friendly staff. We've gone to great lengths at Jaroy to find people with a passion for teaching and sharing their Internet experiences. Our staff is both knowledgeable and eager to please. 2. State-of-the art equipment. Part of the Jaroy experience includes access to state-ofthe-art computer equipment. Our customers enjoy beautiful flat-screen displays, fast machines, and high-quality printers. 3. Upscale ambiance. When you walk into Jaroy, you'll feel the technology. High backed mahogany booths with flat-screen monitors inset into the walls provide a cozy hideaway for meetings and small friendly gatherings. Large round tables with displays viewable from above provide a forum for larger gatherings and friendly "how-to" classes on the Internet. Aluminum track lighting and art from local artists sets the mood. Last, but not least, quality cappuccino machines and a glass pastry display case provide enticing refreshments. 4. Clear vision of the market need. Jaroy knows what it takes to build an upscale cyber cafe. We know the customers, we know the technology, and we know how to build the service that will bring the two together. 5.3 Competitive Edge Jaroy will follow a differentiation strategy to achieve a competitive advantage in the cafe market. By providing Internet service, Jaroy separates itself from all other cafes in Eugene. In addition, Jaroy provides a comfortable environment with coffee and bakery items, distinguishing itself from other Internet providers in Eugene. 5.4 Marketing Strategy Jaroy will position itself as an upscale coffee house and Internet service provider. It will serve high-quality coffee and espresso specialty drinks at a competitive price. Due to the number of cafes in Eugene, it is important that Jaroy sets fair prices for its coffee. Jaroy will use advertising as its main source of promotion. Ads placed in The Register Guard, Eugene Weekly, and the Emerald will help build customer awareness. Accompanying the ad will be a coupon for a free hour of Internet travel. Furthermore, Jaroy will give away three free hours of Internet use to beginners who sign up for an introduction to the Internet workshop provided by Jaroy. 5.4.1 Pricing Strategy

Jaroy bases its prices for coffee and specialty drinks on the "retail profit analysis" provided by our supplier, Allann Brothers Coffee Co., Inc. Allann Brothers has been in the coffee business for 22 years and has developed a solid pricing strategy. Determining a fair market, hourly price, for online use is more difficult because there is no direct competition from another cyber-cafe in Eugene. Therefore, Jaroy considered three sources to determine the hourly charge rate. First, we considered the cost to use other Internet servers, whether it is a local networking firm or a provider such as MTN, GLO, Etisalat. Internet access providers use different pricing schemes. Some charge a monthly fee, while others charge an hourly fee. In addition, some providers use a strategy with a combination of both pricing schemes. Thus, it can quickly become a high monthly cost for the individual. Second, Jaroy looked at how cyber cafs in other parts of the town went about pricing Internet access. Evaluating these two factors resulted in Jaroy's hourly price of One Hundred and Fifty Naira. 5.4.2 Promotion Strategy Jaroy will implement a pull strategy in order to build consumer awareness and demand. Initially, Jaroy has budgeted $5,000 for promotional efforts which will include advertising with coupons for a free hour of Internet time in local publications and in-house promotions such as offering customers free Internet time if they pay for an introduction to the Internet workshop taught by Jaroy's computer technician. Jaroy realizes that in the future, when competition enters the market, additional revenues must be allocated for promotion in order to maintain market share.