Topic: Feasibility Study of a Coffee Shop

Student Name: SUVASH NEPALI

Word count: 3171

EXECUTIVE SUMMARY

 Objectives
 Mission
 Summary of Business

CHAPTER I

 Introduction
 Location
 Financial Plan
 Product Description

CHAPTER II

 Marketing plan
 Market Segmentation
 Market and Sales Strategy
 Management Team

CHAPTER III

 Conclusions and Recommendation

REFERENCES
 Executive Summary

Ceres coffee bar is set on becoming a daily requirement for local coffee junkies, a location to
fantasize about while you try to escape the rigors of everyday life, and just a nice place to meet
friends or read a book, all in one. Ceres coffee shop will take use of its closeness to Xavier's
college to establish a core group of regular clients in response to the growing demand for high-
quality gourmet coffee and exceptional service.

Ceres Coffee Bar will provide its guests with the best freshly brewed coffee in the
neighborhood, as well as pastries and free books to read while they enjoy their stay. The
company plans to open a 2,300-square-foot coffee shop near Xavier's College in Kathmandu.
This location has been secured by the owners through a three-year lease with the option to
extend. They've also contributed $7,560,000.00 of the required $9,180,000.00 in seed money.
Nepal Rastra Bank would be used to get the remaining funds. Sales revenue is predicted to
increase from 1,536,00 in fiscal year 2022 to 38,124,00 in fiscal year 2023. Ceres Coffee Bar will
seek to maintain a 65 % gross profit margin and appropriate operating expenses, and its net
profits will increase from $5,400,000 to $6,750,000.00 during the same time period.

Objectives

o Ceres Coffee Bar's goals for the first year of business are as follows:
o The local restaurant guide named you the "Best New Coffee Bar in the Area."
o Profits are generated within the first month of operations.
o Maintain a 65% gross margin.

Mission

Ceres Coffee Bar will make every effort to create a one-of-a-kind environment in which
customers can socialize with one another while enjoying the best brewed coffee or espresso
and pastries in town. We shall be in the business of assisting our customers in reducing their
everyday stress levels by giving peace of mind through a welcoming environment, convenient
location, helpful customer service, and consistently high-quality items. Ceres Coffee Bar will use
its profits to improve employee satisfaction while maintaining a consistent return for its
investors.

Summary of the Business

Ceres Coffee Bar, an ABC limited liability company, sells coffee, other beverages, and snacks in
its 2,300 square foot premium coffee shop near Kathmandu's Xavier's College. Samyam
Shrestha and Binay Thapa, who together hold over 70% of Ceres Coffee Bar, are the company's
principal investors. The company's start-up loss is estimated to be in the amount of Rs
1,494,720.
 CHAPTER I

INTRODUCTION

Ownership of the Business

Ceres Coffee Bar is a Limited Liability Corporation based in Kathmandu's Jawalakhel area.
Samyam Shrestha controls 51% of the business. Ceres Coffee Bar, LLC is owned by his friend
Binay Thapa, as well as Sajan Shrestha and Utshab Shrestha.

Start-up Summary

o Legal fees for obtaining licenses and permissions, as well as accounting services, are
included in the startup costs.
o Marketing and advertising expenses for Ceres Coffee Bar's grand launch was
$179,000.00, including flyer printing (2,000 flyers at $2.16 per copy) for a total of
$193,320.00.
o XYZ Services was paid 162,000.00 in consultant fees for their assistance in putting up the
coffee bar.
o A total premium of 129,600.00 was paid for insurance coverage.
o Pre-paid rent fees of 237,600.00 for one month at 95.04 per square foot.
o Remodeling of the premises in the amount of $540,000.00. Other startup costs include
stationery ($27,00) and phone and utility deposits ($135,000).
o Operating capital of 3,624,642. 00, which comprises employees and owner's salary of
1,290,600. 00 for the first two months, and cash reserves for the first three months of
operation are included in the needed start-up assets of RS 142,320. (Approximately
777,600. 00 per month).
o Start-up inventory of 865,458. 00, which includes:
o Coffee beans – 324,000. 00
o Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. 426,600.00
o Retail supplies (napkins, coffee bags, cleaning, etc.) – 99,360. 00
 o Office supplies – 15,498. 00
o Equipment for the total amount of 3,195,180. 00:
o Espresso machine – 324,000. 00
o Coffee maker – 48,600. 00
o Coffee grinder 10,800. 00
o Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc. ) –
972,000. 00
o Storage hardware (bins, utensil rack, shelves, food case) 200,880. 00
o Counter area equipment (counter top, sink, ice machine, etc.) – 513,000. 0
o Serving area equipment (plates, glasses, flatware) – 162,000. 00
o Store equipment (cash register, security, ventilation, signage) – 742,500. 00
o Office equipment (PC, fax/printer, phone, furniture, file cabinets) – 194,400. 00

Other non-essential expenses – RS 27,000.00 The company is financed by two key sources:
owner investments and bank loans. Samyam Shrestha and Binay Thapa, two big proprietors,
have given RS 3,780,000.00 and RS 1,620,000.00, respectively. Other investors have donated a
total of RS 2,160,000.0, bringing the total investment to RS 7,560,000. 00. The remaining
1,620,000. 00 came from two bank loans–a one-year loan of 540,000. 00 and a long-term (five-
year) loan of 1,080,000. 00–to cover startup expenses and assets. Nepal Rastra Bank was used
to secure both loans. As a result, a total start-up loss of 1,494,720. 00 is projected.

Financial Plan

Ceres Coffee Bar will take advantage of the rising demand for premium gourmet coffee. The
company's start-up capital has been given by the proprietors. The company's net value will
double in two years thanks to strong management focused on creating and growing a loyal
customer base. Ceres Coffee Bar will maintain a solid gross margin of 65 percent, which, when
combined with modest operating expenses, will produce enough income to fund future
expansion.
Locations & Facilities of the Company

Ceres coffee bar will be on the ground floor of a commercial building on the corner of Laxmi
and Civil Bank, opposite the zoo. The vacant 2,500 square foot building, which was previously
inhabited by a fabric business, has been leased for a year by the company. Ceres Coffee Bar has
the option of renewing the leasing contract for another three years at a fixed rate, which it will
do depending on its financial status. A 200-square-foot back office and a 2,300-square-foot
coffee bar will be included in the floor design, which will include a seating area with 15 tables, a
kitchen, storage space, and two bathrooms. The coffee bar's size will be divided roughly as
follows: 1,260 square feet for the seating area, 600 square feet (26 percent) for the
manufacturing area, and 440 square feet (19 percent) for the customer service area. This
property is on the junction of a major street connecting an affluent neighborhood with the busy
downtown commercial sector, and is within walking distance of Xavier's college. The espresso
bar, kitchen, and storage area will only require modest modification in the commercially zoned
space, which already has the requisite water and electrical hookups.

Ceres coffee bar's open and clean interior design with modern wooden furniture will reflect the
high quality of the supplied beverages and food, as well as the establishment's stance as an
eccentric location where people can relax and enjoy their cup of coffee. Clear window displays,
which will allow passers-by to see consumers enjoying their beverages, as well as exterior
electric signs, will be used to attract customer traffic.

Products

Ceres Coffee Bar will provide the best-tasting coffee beverages in the neighborhood to its
clients. This will be accomplished by utilizing high-quality ingredients and meticulously adhering
to the recipe's preparation instructions. The store layout, menu items, and marketing efforts
will all be geared at increasing sales of higher-margin espresso drinks. In addition to espresso
drinks, the coffee shop will provide brewed coffee and teas, as well as other refreshing
beverages. Ceres Coffee Bar will also serve pastries, small salads, and sandwiches to its
customers. Ceres Coffee Bar will also sell coffee beans to gourmet customers who prefer to
make their own coffee at home. Customers will be able to peruse free books and periodicals
inside the coffee shop in addition to the food options.

Product Description

The Ceres coffee bar's menu will focus on espresso-based coffee drinks such lattes, mochas, and
cappuccinos. Whole, skimmed, or soy milk will be available in each of the espresso-based
cocktails. Each of these coffee drinks starts with a'shot' of espresso, which is made by forcing
warm water through ground coffee at high pressure in an espresso machine.

To make espresso-based beverages, these espresso shots are blended with steamed milk
and/or other ingredients such as cocoa, caramel, and so on. Such drinks necessitate the use of
proper preparation techniques. Minor variations in the amount of coffee in the shot, the size of
the coffee particles, the temperature of the milk, and other factors might have a negative
impact on the prepared drink's quality.

Literature for Sales

Within two weeks after the inauguration of Ceres Coffee Bar, 2,000 fliers will be distributed in
the surrounding neighborhood, on the college campus, at malls, and in chosen office buildings.
 CHAPTER II

MARKET PLAN

Coffee consumption in Nepal has been steadily increasing, with gourmet coffee showing the
most rise. Coffee drinkers in metropolitan areas are among the most discerning. They prefer
freshly produced gourmet coffee drinks and expect excellent service. With its liberal and
outgoing population, Mumbai has been a terrific place for coffee shops. Ceres Coffee Bar will
try to establish a loyal client base by providing excellent coffee in a peaceful environment close
to Xavier's college.

Market Segmentation

Ceres Coffee Bar will concentrate its marketing efforts on students and educators, as well as
adults who work in offices near the coffee shop and sophisticated youngsters. According to our
study, these are the customers who are most inclined to purchase gourmet coffee goods.
Because gourmet coffee consumption is universal across all economic groups and is mostly
determined by one's level of higher education, proximity to Xavier's college and nearby banks
will allow access to the targeted client demographic.

Market Segmentation Strategy

Ceres Coffee Bar will cater to those looking for a pleasant environment in which to enjoy their
daily cup of great-tasting coffee. Customers range in age, albeit given our proximity to a college
campus, the majority of our clients will be college students and professors. According to our
study, these are sophisticated customers who like better-tasting coffee. Furthermore, many
college students regard coffee shops as convenient study or meeting spots, where they can
read or chat with peers without having to pay a cover charge. This will present us with a one-of-
a-kind opportunity to cultivate a devoted customer base.
Market Requirements

The current growth in gourmet coffee in Kathmandu is undoubtedly due to a general trend
toward quality among Kathmandu consumers. Furthermore, elements such as a desire for
modest indulgences, as well as a desire for something more exotic and distinctive, create a
fantastic selling opportunity for coffee shops.

Industry Analysis

Furthermore, Nepal has become one of the most popular destinations for coffee shops, often
known as cafes. The market for coffee chains in Nepal has grown fast in recent years and is
predicted to continue to do so between 2011 and 2016. Coffee shops are booming in Nepal,
thanks to the country's growing middle class, which is eager to spend more and participate in
global lifestyles and cultures. Leading coffee merchants such as Himalayan java, Barista, and
Cafe Soma have all been battling hard to attract Nepal's increasing middle class, from little
coffee parlors to upscale coffee lounges. According to our estimates, the market for coffee
chains in Nepal will boom in the near future.

The forecast for the cafe outlet business in Nepal appears to be highly positive, as general
consumer expenditure in the country is expanding. Fast expansion and shift in demand patterns
have been caused by rising per capita income, higher literacy, and rapid urbanization.
Consumers are more willing to try high-end things now that they have more discretionary
income. Having said that, industry operators must become more innovative in order to capture
a larger share of Nepal's rising coffee consumption market.

Competition and Buying Patterns Competition

According to XYZ Services' study, Espresso Room's direct competitors will be other coffee shops
around the Xavier University campus. Himalayan Java, Cafe Swotha, Cafe Soma, and other
coffee-serving restaurants fall into this category. Because of its solid financial position and well-
established marketing and operational techniques, Himalayan Java will undoubtedly be a big
contender. Despite Himalayan Java's dominant market position, many consumers prefer
smaller, independently owned businesses that provide a welcoming atmosphere and
outstanding coffee at reasonable costs.

Cafe Soma is an excellent example of this type of rivalry. Himalayan Java and Karma Coffee Cafe
are estimated to have a 35 percent market share in that neighborhood, while Cafe Roma
attracts 25 percent of customers and the remaining market share is shared among other
businesses. Ceres Coffee Bar will distinguish itself as a one-of-a-kind coffee shop that not only
serves the greatest coffee and pastries, but also delivers a homey, pleasant, and welcoming
atmosphere that established corporate institutions lack. We will cater to the bodies and minds
of our customers, allowing us to expand our market share in this competitive sector.

Buying Patterns

Customers return to a coffee shop for a variety of reasons, including superb coffee, quick
service, and a pleasant ambience. Ceres Coffee Bar will price its product offers competitively,
despite the fact that, as previously indicated, coffee consumption is uniform across all income
segments. We are confident that selling coffee while providing excellent service in a pleasant
environment will help us create a solid foundation of devoted customers.

Summary of Strategy and Implementation

Ceres Coffee Bar's marketing plan will be geared around attracting new customers, maintaining
existing customers, and encouraging customers to spend more and return more frequently.
Establishing a loyal client base is critical since such a customer base will not only create the
majority of revenue but will also provide positive references.

Competitive Advantage

Ceres Coffee Bar will promote itself as a one-of-a-kind coffee shop where customers may not
only enjoy a cup of freshly brewed coffee but also spend time in a relaxing atmosphere.
Customers will be able to rest from their daily concerns thanks to comfortable sofas and chairs,
subdued lighting, and peaceful relaxing music, which will set Ceres Coffee Bar apart from its
competitors.
Sales Strategy

The sales will be handled by the baristas at Ceres Coffee Bar. At least two staff will be serving
customers to speed up the service–one will be preparing the customer's order, while the other
will be handling the sales transaction. All sales information recorded on the electronic point-of-
sale terminal will be examined for marketing purposes later. Ceres Coffee Bar will use banners
and leaflets, as well as customer referrals and cross-promotions with other local companies, to
expand its client base. Customer retention programs will be implemented at the same time to
ensure that customers return and spend more money at the coffee shop.

Summary of Management

Samyam Shrestha and Binay Thapa own the bulk of Ceres Coffee Bar. Mr. Thapa graduated
from Nepal's Ace Institute Of Management with a Bachelor's Degree in Business Administration.
He has worked as an independent business consultant for several years. She formerly owned
the JKL Travel Agency, which he sold four years ago for a profit. Mr. Thapa has a large network
of business contacts in Kathmandu, which he will use to make his new business prosper. Mr.
Shrestha graduated from Ecole Hoteliere Lavsa with a Bachelor's Degree in Hospitality
Management. However, due to their other obligations, the investors will not be involved in the
day-to-day management choices at Espresso Room. A skilled manager will be hired to oversee
all aspects of the coffee shop. The preparation of coffee will be handled by two full-time
baristas. To meet the staffing needs, four more part-time employees will be hired. To meet the
increased sales volume in the second and third years of operation, another part-time employee
will be hired.

Management Group

Ceres Coffee Bar will appoint a full-time manager to oversee daily operations. Three years of
management experience is required of the candidate. This person will be in charge of managing
the personnel, ordering inventory, working with suppliers, devising a marketing strategy, and
other day-to-day managerial tasks. Our applicant, we believe, has the necessary experience for
this position. Based on the first year's operating results, a profit-sharing plan for the
management may be proposed.
Management Team Gaps

Despite the owners' and managers' experience in the industry, the company will retain the
services of XYZ Services, the consultants who assisted in the development of Ceres Coffee Bar's
business model. This company has over two decades of retail coffee experience and has
successfully opened dozens of coffee shops throughout Kathmandu. Market research, customer
satisfaction surveys, and further input into the appraisal of new company prospects will be the
primary functions of consultants.
 CHAPTER III

CONCLUSIONS AND RECOMMENDATIONS

Based on the foregoing research, it can be stated that Ceres Coffee Bar is worth running
because it meets all of the criteria in terms of market and marketing, legal considerations,
technical and technological factors, and environmental aspects. Ceres Coffee Bar mainly fits the
criteria for being a viable business, according to the feasibility study that was conducted with
numerous aspects. However, as time passes, changes will inevitably occur, encouraging this
company to be prepared. As a result, it is required to have more innovative ideas and be able to
collaborate with other parties and governments to build markets and marketing in order for the
company to thrive in an increasingly competitive environment. In terms of technical and
technological issues, mentoring and continual supervision are anticipated to ensure that the
process and production outcomes meet Ceres Coffee Bar's requirements.
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