Sample Business Plan for Starting “Café”

1. Executive Summary

This is a business plan proposal for the establishment of cafe having the name “Mars café” in Addis
Ababa. The name Mars derives from the partners name by taking and conjoining first latter. This
profile envisages the establishment of a cafe for the delivery of cafeteria services. The present demand
for the proposed service delivery is estimated from different perspective and it expected to decline
after five year of its operation but through diversifying the customer service approach we intend to
handle the existing customers along with attracting new customers. The cafe will expect to create
employment opportunities for 14 persons. The total investment requirement is estimated at about Birr
344,360 and out of which Birr 245,000 is required for furniture and kitchen equipment. From the total
cost investment 20% covered by Owens capital the rest 80% will borrow money from Dashen
International Bank.

2. Background of the Business and Justification for The Business

Mars café is a new café partnership with an expected to open in July, 2022 G.C at the heart of Addis
Ababa, and expected to give a standardize café service in Addis Ababa. Mars will specialize in Fast
foods, Dinners, Coffee, Tea, Cappuccino, Frozen, Ice-cream, homemade cookies and other related
activities. In Addis Ababa there are many cafe that give services to their customers but they cannot
still satisfy the need and want of the customer in terms of both quality and quantity. In order to
maximize customer satisfaction so that Mars decide to open a café in Addis Ababa city. Mars target
customers are intellectuals, artists, and writers with reserved VIP seats, and students, couples, families
and foreigners. Mars café expected to serve this area well.

This plan offers financial institutions an opportunity to review our vision and strategic focus. It also
provides a step-by-step plan for the business start- up, establishing favorable sales number, gross
margin and profitability. Establishing this cafe has beneficiary in maximizing the wellbeing of the
society from different perspective. Some of them are:
 Increase the income of the owner
 It create employment opportunity
 It satisfy the need of the customer(quality and quantity) within a reasonable price
 It provide better place for younger’s in spending their time.
 It contributes for the development of the surrounding area.
 Increasing government revenue through taxation (Business profit tax and VAT).
In general these business increases the welfare of society and this business does not result any
environmental pollution, since it have very low by- product and if any (is use as food for
cattle’s especially for pig farms)

3. Feasibility Study
3.1. Marketing and Demand
3.1.1. Marketing Survey

Addis Ababa is experiencing a trend toward the creation of evening dining/entertainment venues. They
are popular and gaining more recognition. Evidence of this is found in local news and magazine
coverage. These venues are finding new homes in the areas close to and/or adjacent to downtown.
Target Customer

One of Mars target customers are artists, teachers and writers who need a nice quite cozy place to
think and do their work with reserved VIP seats and for commons and foreigners. The other target
customer of Mars is couples that want to recreate themselves. Mars strategy is based upon targeting
and serving:
 The typical Addis Ababa intown resident. This urban professional works long hours and has
relatively little time to cook at home. She/he has an active social life and spends a substantial
amount of disposable income maintaining it.
 The many businesses which regularly use restaurant dining as an function of conducting
business.

Market Segmentation

A restaurant/coffee house would provide one of the best food and beverage opportunities for more
than 30,000 per month and adjacent neighborhoods.

Market Analysis

3.1.2 Business Demand

Estimated demand levels based on Central Statistics Agency household income, consumption, and
expenditure surveys as well as based on a sample survey undertaken using observation of the current
demand for existing cafés and restaurant beside the population size. The demand for the service is
directly related with the growth of the population and income of the society. Taking this in to
consideration annual average growth of 6.6% is applied to forecast the future demand then it expected
to decline after its maturity over the 5 year period. But through diversifying the service that provided
to the customers, the café will able to maintain keeping its customers.

3.2. Technical Analysis

Description of Products and Services

The mars café will offer high quality coffee, tea and cappuccino, fast foods and dinner at a very
reasonable price. Also sell homemade cookies, cakes, brownies, and Doughnuts, with fair price.

Key Features of the Products and Services

All drinks will be made with filtered water and the highest quality ingredients can get. Frozen drinks
will have caramel or chocolate syrup drizzled in the glass and over the drink. Cappuccino will have
whipped cream toppings as well as the option for candy sprinkles. Cookies will have the option of a
chocolate or caramel dip and sprinkles. also offer designer flavored cream and five kinds of sweetener,
i.e. sugar, honey, Equal, Splenda, and Sweet-n-Low. Cream and sweetener is at no extra charge.
Furthermore, the fast foods includes chips, cookies, Burger, pizza, Mushebek, Baklaba, Halawa,
Fetera, and dinner include Kitffo, Key Wott, Minchet.

Production of Products and Services

Mars will use only filtered water and will brew our coffee in commercial coffeepots that will be
thoroughly cleaned between uses. Mars will bake and cook cookies, brownies, fast foods and dinner in
our own on-site oven from proven recipes, daily.

Future Products and Services

Within the next three to five years we expect to branch out into catering and offer homemade pies,
whole or by the slice.

Comparative Advantages in Production

Mars low overhead and cheaper pricing will be the key to Mars success.

3.3. Industry Analysis Size of the Industry

In Addis, the industry is quite large, for example in Piassa there are many cafeterias, we can found
cafeterias in average almost 50 meter apart but around Sidist kilo there are a few cafeterias.

Key Industry Trends

This industry is booming at the present time, there is a trend toward small cozy places and away from
the large generic chain. The cafeteria business does not show signs of slowing down. With new
innovations such as flavorings and additives, it should continue for some time.

Mars customers will be attracted by service in addition to this they may be attracting through
standardize customer approach, building, chairs, tables, glasses and strategic placement. The
restaurants and cafes that make up the community of establishments in the area surrounding. Their
concepts range from typical fast food/chain venues to expensive fine dining establishments. However,
the predominating nature of the immediately surrounding restaurants and ccafeteria is casual/upscale.

Description of Key Competitors

Of the few cafeterias in the area, some are large chain with a very expensive product, others are really
home style cafeterias, the last one, and competitors are a traditional store with a "tea room".

Mars Café: Located in the heart of Addis, while its location near many longstanding restaurants and
cafeteria would seem to offer considerable overflow, the café is easily seen from the street and parking
is at a premium. Its concept has received very favorable press in Sidist kilo.

Strength
Consider quality of food and service with a reasonable price, and its skilled manager together with its
bright waiter can attract customers, so it has acceptance (brand name) by the customer.

Weakness

No variation on menu or service it provides. Most of its activities like the menu are limited.

Romina Restaurant: Located in Arat kilo. The location is on the street and can be perceived as a
marginally safe area. Nevertheless, the café remains wildly popular given the parking difficulties.

Strength

Often have interesting alternative dishes on the menu and designer décor. The evening atmosphere is
also so attractive and suitable for customers.

Weakness

Even if there is widely varying standards of food and service, they are often expensive which does not
consider the buying capacity of the customers.

Oasis Cafe: Located on nearer to Addis Ababa Institute of technology, this is a corporate coffeehouse
which provides coffee, tea, cakes and sandwich service.

Strength

This cafeteria has relatively many customers because of its good location.

Weakness

The quality of the goods, not giving evening service and are not that much satisfactory beside the low
price.

Analysis of Competitive Position

None of these establishments features a coffeehouse atmosphere or live or recorded evening

entertainment. Relative to the location of these establishments, the center of town is centrally
geographically located. Its location will easily allow for passengers from those who came others area.
Mars pricing strategy and comfortable atmosphere will be the key to our success. None of the other
cafeteria in the area can offer this.

Competitive Edge

Mars will position itself as unique cafeteria where its customers can not only enjoy a cup of perfectly
brewed coffee but also spend their time in an ambient environment. Comfortable sofas and chairs,
dimmed light and quiet relaxing music will help the customers to relax from the daily stresses and will
differentiate Mars cafeteria from current competitors.
3.4. Financial Analysis

Mars want to finance growth mainly through cash flow. Mars recognize that this means we will have
to grow more slowly than we might like. The most important indicator in Mars inventory turnover.
And have to make sure that food inventory turnover stays at approximately four turns per month. Mars
do not want to let average collection days get above 45 under any circumstances. This could cause a
serious problem with cash flow, because our working capital situation is tight. Most credit sales will
be via credit and debit cards. Also do have plans to initiate direct billing for law firms and other
businesses conducting regular visits. Mars must target a net profit of 14% at the least, and hold
marketing costs to no more than one to three percent of gross sales.

The Start-Up Expenses

Include:
 Legal expenses for obtaining licenses and permits as well as the accounting services totaling
Birr 3,000.
 Marketing promotion expenses for the grand opening of Java Culture in the amount of Birr
3,000 and as well as flyer printing (1160 flyers at Birr 0.50 per copy) for the total amount of
Birr 3,580.
 Consultant’s fees of Birr3, 000 paid to ABC Espresso Services for the help with setting up the
coffee bar.
 Insurance (general liability, workers' compensation and property casualty) coverage at a total
premium of Birr 2, 400.
 Pre-paid rent expenses for one month total amount of Birr 20,400.
 Premises remodeling in the amount of Birr 10,000.
 Other start-up expenses including stationery (Birr 800) and phone and utility deposits (Birr
3,500).

Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table.
The key underlying assumptions are:
 Assume a slow-growth economy, without major recession.
 Assume of course that there are no unforeseen changes in technology to make equipment
immediately obsolete.

4. Business Goal, Mission and Objective

4.1. Objectives of the Business

Mars primary goals over the next year are:

 Renovate our space in Addis Ababa, Sidist kilo.
 Acquire equipment necessary for business, i.e. coffee pots, cappuccino machines, blenders, etc.
 Make agreement with the supplier of Mars raw material and bakery vendors.
 Create a cozy, artist friendly environment (i.e. choice of colors, choice of music, decor)
 Open for business and become the most popular café in the area.
 Expand our business in different in area of the country
 Targeting and maintaining a net profit of at least 14 % by the second year.
  To generate monthly sales to reach Birr 15000 by the end of forth month of operation, and Birr
30,000 monthly by the end of the first year of operation. Mars use different attractive methods
to get more customers over time. For instance we provide less price compare to the another
cafeterias and we also provide some entertainment activities for the customers like showing
DSTV, inviting music bands for special days like Valentine ’s Day and there will also be
candle night on Sunday.

This plan includes chapters on the company, products and services, market focus, action plans and
forecasts, management team and financial plan.

4.2. Vision and Mission

Mars cafe will become the foremost coffee shop in the area. We will serve a perfect product at a very
reasonable price. We will also be a meeting place for every individual that want to use cafeteria
service. Mars will create an atmosphere conducive to creative expression and promote the creative
process. The cafe's aim is simple. It will provide a completely sophisticated, sensual, yet casual dining
and/or coffee house experience for the many Addis people and visitors who frequent the city's casual
dining spots and entertainment venues. Mars aim to be able to employ several full time members of
staff and build up a team so that the partners can be clear of routine tasks and consentret on day to day
activities like meeting customer, supervising the cafeteria, holding extensive promotion activity and so
on which help the business to develop well.

4.3. Keys to Success

The keys to success in this business are:

1. Product quality: Food, coffee-based beverages, and entertainment are our products. They must be
of the high quality and value.
2. Service: Mars patrons are paying to have a good time. Their experience will suffer if service is not
of the highest caliber. Each member of the staff will be courteous, efficient, and attentive.
3. Marketing: Mars will need to target our audience early and often. While the business is located in
a central and accessible location, many people will have to be re-introduced to the neighborhood.
4. Management: Mars will need to have a firm grasp on food, beverage, and labor costs. The
dining/entertainment/coffeehouse experience must be delivered in a fashion that will not only
inspire repeat business, but encourage word-of-mouth recommendations to others. Proper
inventory, employee management, and quality control is key.
5. The greatest locations - visibility, high traffic pattern, convenient access.
6. The finest reputation - word-of-mouth advertising, promotion of our community mission of
charitable giving.

4.4. Strategies

4.4.1 Sales Strategy

My sales strategy includes:
 Establish coffee service at local businesses
 Sell gift cards, frequency cards, pre-paid cards, and offer discounts to key groups
 Create an ongoing sampling program
 Conduct a consistent, aggressive marketing program
  Be an active member of the community; be visible at charitable functions
 Solicit customer feedback to constantly improve and streamline our operation
 Staff salaries that are 10% above the industry average in order to attract the best people
 Hiring for attitude so that Mars always have a friendly, enthusiastic staff to make customers
feel welcome and appreciated; constant staff training to assure the best quality possible
 To reduce customer waiting time, and create efficient product ordering
 Create a mobile kiosk to take Dark Roast Java into the community at special events, farmer's
markets, art shows, etc.

4.4.2 Pricing Strategy

Food, drinks, and entertainment options are priced to give us an attractive margin while at the same
time offering value to the consumer. Mars want repeat business. And also want the experience to
remain fresh. Within lies why the food, beverages, and musical/entertainment programming will be
relatively flexible.

Comparing with other competitive cafeterias we will provide fewer prices to our customers. Mars will
offer two sizes of drinks, small Birr 4.00 and large Birr 7.00. Our cookies and brownies will sell for
Birr 12.00 each.

4.4.3 Promotion Strategy

The first step that Mars take in promoting our cafeteria is conducting an opening ceremony. On this
ceremony different well known peoples will be invited and some part of the customers will also be
invited. Also invite our neighbors to have a good public relationship.

Intend to advertise in the local newspapers and offer a "frequent drinkers club" discount to our best
customers. We will also send out advertise through direct mail, which will include cents off coupons.

Mars will promote our company name and label almost more than the product itself, because to be
successful besides have to stand for brand-name integrity, excellent menu offerings, and first class
entertainment and fun.

Mars will have Happy Hour, price reduction for special days, like holidays, Valentine’s Day. As well
as provide special Torta cake for those of who celebrate their birthday parties in our cafeteria with low
price.

One thousand one hundred sixty flayers will be distributed in the adjacent neighborhood, on the
University campus, at the malls and in the selected office buildings within two weeks prior to the
opening of Mars cafeteria. Subsequently, free postcards with Mars endorsement will be printed to
increase the company visibility among the patrons

5. Implementation, Resource Plan and Organizational Structure

5.1. Time Plan

The operation of the project will start at the beginning of 2022 after certain pre-request activities are
accomplished.
The time-schedule is stated as follows:

5.2. Resource Plan

5.3. Human Resource Plan

The personnel plan calls for hiring 14 full-time salaried employees at start-up. Any additional hires
will be part time and devoted to the expansion of any catering function, as well as increased
capacity/operation of a private party function.

Employee salaries are as follows:

5.4. Organizational Structure

Mars organizational structure will be a simple pyramid style with the owners putting in as much work
as the employees. An additional manager (to be hired) will assist in maintaining and reviewing
operations of the restaurant and the entertainment venue/bar.
A chef (to be hired) will manage kitchen operations and be crucial to maintaining food inventory
stability and assistance in menu development.
An assistant manager/senior server (to be hired) who will be a salaried employee will provide regular
table service as well as assistance to the manager and the general manager. A sous-chef/line cook (to
be hired) will perform secondary management functions in the kitchen as well as provide assistance to
the chef in main kitchen/cooking functions.
Part-time personnel will be hired to handle bartending, serving, and dishwashing functions. The
marketing and accounting function will be handled by independent contractors/consultants.

6. Financial Plan
6.1 Sales Projection
The most important indicators in our case are daily seating "counts" and weekly sales numbers. Also
make sure that we are turning our inventory rapidly so as to avoid food spoilage. Our project to
perform at five years projects .from those out of which one would be a small scale and others would
be of an intermediate implementation. The source of sales would be the fees for the feasibility studies.

6.2 Income Projection

6.3. Cash Requirement

The business at least needs 344,360.00 birr for business establishment, commencement of operations
and liquidity support.
The shareholders will have equal share and business are obtained in two ways.
 From shareholders 20%
 From Bank 80%
6.4 Source of Financing

The finance for this business would be obtained from shareholders and banks. From bank Mars
provide the start up cash of 275,485.00 birr it have interest from bank. Each members of the company
should buy share by 11,478.60. Hard work is expected from us to be successful in competition and to
return birr taken from the bank with interest.

7. Supporting Documents

7.1. Legal agreements

The following agreements hold for all partners involved in the venture:
 In case one partner wants to part ways from the company he or she must inform the company
one month ahead of time
 All company secrets should be protected by all members of the organization
 Salaries of employees would be paid when revenues of the organization exceed 50% of first
months cost
 Dissolving of partnership is allowed if the venture has returned the costs involved ahead of the
six month.

8. References
 Ethiopian business development service network (EBDSN), How to write a business plan
2005/6 E.C.