Analysis of the Russet Cup Cafe

Cite this

Executive Summary

In Overland Park, Kansas, The Russet Cup will be a one-of-a-kind coffee shop and café. The 1,500-square-foot café will be located on the northeast corner of 135th Street and Mission Street in the recently completed Market Square Plaza. The anchor tenant, Price Chopper, has already moved in, and the outstanding location attracts more than 10,000 shoppers each week.

On-Time Delivery!
Get your customized and 100% plagiarism-free paper done in as little as 3 hours
Let’s start
322 specialists online

The Russet Cup, named for the pungent brown liquid that will fill the cup, fills a need in the market area for unique cafés and stands out from its corporate competitors with its fast food concepts and fast service. The Russet Cup is a gourmet coffee experience that is considerably calmer and civilized than fast food/commercial/coffee establishments. There will be no screens in the café, the background music will be soft, and local artists’ work will be displayed on the walls.

In a library-like environment, the café is well-appointed with comfortable leather chairs and sofas. The café has the feel of a bygone era while also being technologically advanced, with WIFI and state-of-the-art espresso machines.

The Russet Cup assesses its financial success by looking at market share and earnings growth. This is a fantastic opportunity with a total local market of $54 million! The capacity to deliver high-quality gourmet coffees, take advantage of its tiny size, and rely on an amazing barista team will be the keys to success. In order to achieve these objectives, the café will provide some of the best gourmet beans in the area, sourced from local wholesalers. The café can benefit from bigger margins in the form of lesser overhead due to its small size. The cafe will hire baristas on a first-come, first-serve basis and pay them competitively with the chains. As a result, baristas will be taught to cross-sell and market higher-margin items.

Organizational Goals

The following are the main goals of the Russet Cup business plan:

Increase revenue by $36,000 (5%) in Year 2 and $73,000 (10%) in Year 3 • Achieve a profit margin of 5.2 percent in Year 2 and 6.90 percent in Year 3 • Be the Best Coffeehouse Award winner in the Overland Park region

Statement of the Mission

The Russet Cup is dedicated to its products and staff, believing that this is the key to market success.

Yes, we can!
Our experts can deliver a custom Analysis of the Russet Cup Cafe paper for only $13.00 $11/page
Learn More
322 specialists online

Overarching Principles

The Russet Cup is dedicated to qualities such as excellence, enthusiasm, quality, honesty, and leadership, which enable them to overcome obstacles and create chances for the future. Its commitment to their products and people is the foundation of their key principles.

The Russet Cup recognizes and rewards brilliance as well as devotion. The café will collaborate with its employees to develop strong enterprises and a bright future.

Success Factors

The Russet Cup distinguishes out among the other tournaments. Their Success Keys are as follows:

  • Excellent Products – Customers would want to return again and again if you provide excellent products at market prices.
  • Hire Quality Baristas — Pay staff at a rate comparable to larger chains, with long-term career chances and growth opportunities, as well as long-term ambitions to open a second location.
  • Convert Customers to Connoisseurs – Only 40% of coffee drinkers in the United States consume premium ground and whole bean coffee, which will help the industry thrive.

Business Description

The Russet Cup will open in Overland Park, Kansas, as a coffee shop and café. The small café will be located in the freshly finished Market Square Plaza in the Kansas City neighborhood. Gourmet coffees, espresso and drip coffee, lattes, and smoothies will be available at the café. The simple pastry selections will change with the seasons, but muffins, breads, cookies, scones, and rolls will be the mainstays. A local bakery will provide all pastries on a daily basis.

Owen Jones, a senior restaurateur with years of expertise running and managing chain restaurants, will own and operate the café. The café will be open Monday through Thursday from 7 a.m. to 10 p.m., Fridays and Saturdays from 7 a.m. to 11 p.m., and Sundays will be closed.

Inheritance

Owen Jones will be the sole owner of the Russet Cup. Mr. Jones has a bachelor’s degree in business administration from Kansas State University. He worked as a waitress in a local hospital coffee shop that bought its beans from a local roaster during high school. This employment gave him the opportunity to learn about the business firsthand, in addition to being an avid coffee drinker himself. Jones spent four years in college working in a campus coffeehouse, eventually advancing to the rank of assistant manager. Jones got a job as a business development manager for a regional restaurant chain after graduation, which gave him more first-hand experience in the food and beverage industry, particularly the stages required in opening new sites.

Legal Structure The Russet Cup will be organized as an S-Corporation, with Mr. Jones as the sole shareholder.

Cut 15% OFF your first order
We’ll deliver a custom Company Analysis paper tailored to your requirements with a good discount
Use discount
322 specialists online

The Beginning Summary

Seating for 40 people will be available at the Russet Cup. The monthly rent is $2,075 with a three-to-five-year lease option. The rented facility comprises of 1500 square feet and includes a dining room, a coffee bar, two restrooms, and a back storage area. This storefront must be plumbed and wired properly before it can be used as a restaurant. Painting, new flooring, and new worktops are all necessary. It is necessary to construct a custom coffee bar. The renovation will cost $71,725, including materials purchased on sale and volunteer labor. Two commercial espresso machines, air pots and urns, a commercial blender, commercial brewer, top loading coffee bins, barista syrups, cold drink dispenser, frothing equipment, a commercial refrigerator, microwave, and stainless steel prep bar will be included in the coffeehouse equipment. The kit will set you back $38,275. Leather couches and chairs (bought at auction), coffee tables, bookcases, and window treatments will make up the furnishings. Local artists will create the artwork, which will be sold on a consignment basis. The books were obtained through contributions. The total cost of the furniture is $14,000. Dishes, furnishings, a security deposit, and marketing will be among the other initial costs.

Facilities and Location

The new coffeehouse is located in the new Market Square Plaza in Overland Park, Kansas, at the northern intersection of 135th Street and Mission Street. The location of the property is superb. I-435 and Highway 69 are about a 6-minute drive away. With Price Chopper as the anchor tenant, the property is 95 percent leased. Life Spring Med Spa, Jane’s Canines (Pet Store & Boarding), Pride Cleaners, Kahn Dental, and Swim U are among the other tenants. Price Chopper brings over 10,000 shoppers to the center each week. Within a one-mile radius, there are 9,420 people, 61,102 people within a two-mile radius, and 149,550 people within a five-mile radius, with a typical household income of $120,856. Within 2 miles of the location is Sprint / Nextel’s corporate headquarters.

Services/Products

Descriptions of Products/Services

Gourmet roasted coffees, including mocha, carmelicious, white mocha, candy bar latte, and brewed coffee, are the Russet Cup’s mainstay. A smoothie line with wild berry, strawberry, peach, mango, and lemonade will complement the coffee. Pastries from an outside provider, freshly prepared and delivered daily, will round out the limited menu line. The pastry selection will change with the seasons, but the mainstays will be muffins, breads, cookies, scones, and rolls.

Comparison of Competitors

Larger chains or franchises are excluded from the research technique, which is centered on unique coffee shops/cafés in the broader metro area. The research uncovered eight distinct competitors.

  • Overland Park, KS 66224-8701 Take Five Coffee Bar 5336 W 151st St.
  • Homer’s Coffee House
  • Morning Glory Espresso
  • Revo Cup Coffee 11030 Quivira Rd Overland Park, KS 66210-1239
  • Overland Park, Kansas’s Daily Dose Coffee and Bar is located at 12056 W 135th St.
  • Overland Park, KS 66212-4051 Java Crossing 8830 W 95th St
  • 4195 Somerset Dr Prairie Village, KS 66208-5242 Hattie’s Fine Coffees

Sourcing of Products and Services

The Russet Cup has arranged supplier relationships with a number of local food-service and coffee wholesalers in the Overland Park region who are known for their quality and dependability:

  • Coffee Roasters Mean Beans
  • Brewers of Overland Park
  • Mary’s Organics
  • Healthy Harvest Bread Co.

If one of the aforementioned speciality suppliers is unable to meet their requirements, the national vendors listed below can both provide all of the food-service supplies they require. The café will also be supplied with general restaurant supplies by the following wholesalers:

  • Gerry Food Supply Inc. • Lawrence Food Products Corp.
  • Inventory Control N/A
  • Fulfillment and Warehousing N/A
  • Future Products/Services (3.6)

In the coffee market, young families, who make up the third highest market share in Overland Park, are frequently disregarded. Coffeehouses haven’t always been thought of as kid-friendly. To address this obstacle, the Russet Cup is planning to open a second coffee shop in the next five years, which will be a combination indoor play area and coffee bar. This concept allows parents and caregivers to connect and socialize with other people while their children enjoy the indoor playground.

Get a custom-written paper
For only $13.00 $11/page you can get a custom-written academic paper according to your instructions
Let us help you
322 specialists online

In-store sales for home purchase, as well as an online store, will be available in the future.

Prepaid gift card program – Prepaid gift card program will be available for purchase on the internet.

Sourcing of Products and Services

It has been negotiated supplier agreements with several local food-service wholesalers and coffee wholesalers in the Overland Park area who have established a reputation for quality and dependability. These companies are as follows:

  • Mean Beans Coffee Roasters is a coffee roasting company.
  • Overland Park Brewers is a brewery in Overland Park, Kansas.
  • Healthy Harvest Bread Co. • Mary’s Organics • Healthy Harvest Bread Co.

The following national suppliers can both provide all of the food-service items that they require in the event that one of the aforementioned speciality suppliers is unable to meet their needs. As well as providing general restaurant supplies, the following suppliers will supply the café:

  • Gerry Food Supply Inc. • Lawrence Food Products Corp. • Gerry Food Supply Inc. Inventory Control N/A
  • Warehousing and fulfillment are not provided.

Products and services that will be offered in the future

When it comes to the coffee market, young families, who represent the third largest market share in Overland Park, are frequently disregarded. Coffeehouses have traditionally not been considered a “kid-friendly” establishment. Russet Cup has long-term intentions (5 years) to open a second coffee shop, which they hope will help them overcome this obstacle: A hybrid indoor play area and coffee bar has been created. Parents and caregivers will be able to socialize and relax with other adults while their children will be able to take advantage of the indoor playground features.

In the future, the company plans to offer in-store purchases for home use as well as a web-based shopping experience.

There will be an opportunity to purchase prepaid gift cards through the website — Prepaid gift cards not only provide immediate cash, but they also help businesses avoid credit card transaction fees while also attracting new clients to their establishment.

Market Research and Analysis

Overland Park, Kansas is a multi-award-winning neighborhood with a thriving business community that is regarded the premier business community in the Midwest. Overland Park has received national recognition for its business climate and livability from national media and organizations. Here’s a taste of what you may expect: 6th Place in America’s Best Places to Live Money, according to Money Magazine. Top 50 Cities to Live and Play in the United States, National Geographic Adventure, 3rd Hottest Town in the United States, National Geographic Adventure Money, among the top 20 best places to live and work according to the Employment Review, It is one of only 72 Sterling Tree Cities in the United States. The National Arbor Day Foundation is a non-profit organization dedicated to preserving and celebrating trees.

Overland Park is located at the heart of one of the most dynamic local markets in the United States of America. In addition to being conveniently located near the amenities of the Kansas City region, it is also part of the Kansas City metropolitan area, which is the most centrally located major market in the country. Overland Park is served by four interstate highways: I-35, I-435, I-635, and U.S. Highway 69. No point in the city is more than 3.5 miles from an interstate highway. The city maintains an excellent arterial street network and plans to expand the network by adding lane miles as the population of the area increases. The region is served by three airports. Overland Park is only 25 miles north of Kansas City International Airport (MCI), which is located on Interstate 70. Johnson County Executive Airport, Kansas’ second busiest airport and the state’s second busiest in the country, offers a full range of services for private business jets and general aviation. The New Century AirCenter, located 12 miles southwest of the city, provides general aviation services and can accommodate cargo or passenger jets of any size and configuration.

Overland Park provides some of the most highly educated workers in the country, with 97 percent of adults over the age of 25 in Overland Park possessing at least a high school diploma or equivalent. Johnson County, in which Overland Park is located, is the most populous of the country’s 231 counties with populations greater than 250,000, ranking first in the country overall. With a bachelor’s degree or higher, the county ranks sixth in the percentage of adults with a bachelor’s degree or higher, and 16th in the percentage of adults with a graduate or professional degree or higher.

According to the 2010 census, the Overland Park metro area has a total population of 175,265 people. The median household income in this area is $77,881, and the median age is 379 years of age. (Source: 2010 United States Census)

Market Research and Analysis

The coffee shop industry in the United States consists of approximately 20,000 stores with a combined annual revenue of approximately $10 billion. Caribou Coffee, International Coffee & Tea (The Coffee Bean & Tea Leaf), Peet’s Coffee, and Starbucks are just a few of the major players in the coffee industry. The industry is highly concentrated, with the top 50 companies accounting for more than 70% of total sales. Coffee shops are a subset of the specialty eatery industry, which includes establishments that sell products such as bagels, donuts, frozen yogurt, and ice cream, among other things.

Situational Analysis of the Competitive Environment

Demand is driven by consumer preferences and personal income. Individual companies’ profitability is dependent on their ability to secure prime locations, increase store traffic, and deliver high-quality products. Large corporations enjoy competitive advantages in the areas of purchasing, finance, and marketing. Small businesses can compete effectively by offering specialized products, catering to a specific market, or providing superior customer service to their customers. Specialty eateries, which include coffee shops, are labor-intensive businesses, with an average annual revenue per employee of approximately $50,000 on average. Coffee shops compete with a variety of businesses, including convenience stores, gas stations, quick service and fast food restaurants, gourmet food shops, and donut shops, amongst others. (Initial Investigation)

Products, operations, and technology are all covered.

Beverages and food are two of the most important products. Beverages include freshly brewed coffee and tea, espresso drinks (cappuccinos and café lattes), cold blended beverages, bottled water, soft drinks, and juices, among other things. Pastries, bakery items, desserts, sandwiches, and candy are all examples of food. Many coffee shops sell whole or ground coffee beans for customers to take home and brew themselves. Some coffee shops sell equipment for making coffee or espresso, as well as grinders, mugs, and other accessories. (Initial Investigation)

The Size of the Market

The coffee shop industry in the United States consists of approximately 20,000 stores with a combined annual revenue of approximately $10 billion. Caribou Coffee, International Coffee & Tea (The Coffee Bean & Tea Leaf), Pet’s Coffee, and Starbucks are among the major players in the coffee industry. The industry is highly concentrated, with the top 50 companies accounting for more than 70% of total sales. (Initial Investigation)

Representatives from the industry

Within 5 miles of the subject are 37 businesses involved in the coffee industry, including chains, restaurants, and tea houses, with annual revenues in excess of $54 million. The subject is one of these businesses. There are 37 businesses in total, with 20 being Starbucks coffee shops, which generate $35.7 million in revenue or 66 percent of the market share. An additional 8 coffee shops are franchises, with a combined revenue of $9.7 million, accounting for 18 percent of the market share. A total of $8.3 million in annual revenues is generated by the comparables, which are closely held coffee shops/cafes that will compete for the subject’s business. This represents 15 percent of the total market.

Three hundred and thirty-three square feet is the size of the first competitor’s office. WI-FI is available at the café. Additionally, in addition to serving coffee and smoothies, the café has a full-service kitchen that serves light breakfast items as well as sandwiches and wraps. On Friday and Saturday evenings, musicians play on a tiny stage in the café. In addition, the Café has a full liquor license. Because of the wide range of amenities available, this is not a realistic comparison for the subject.

The Homer’s Coffee House is located at 7126 W 80th St in Overland Park, Kansas, and can be reached at (913) 66204-3715 or by email at [email protected]

Located in a shopping mall, this competitor has a 6,300 square foot location. Established in 2001, the shop recorded $2 million in revenue for the fiscal year 2011 alone. In addition to employing 21 people, the shop also provides live music on weekends. The advantage of the subject’s setting is that it is smaller, cozier, and quieter.

Morning Glory Espresso is a delicious cup of coffee.

Morning Glory Espresso is located at 5606 Johnson Dr in Mission, Kansas 66202-3323.

This competitor is similar in size to the subject and operates out of 900 square feet in a retail shopping center, similar to the subject. Morning Glory Espresso, which has been in operation since 2005 and employs three people, generated revenues of $300,000 in 2011 from its operations. The coffee shop is open for business six days a week, and also serves breakfast. The shop is equipped with a full kitchen and, in addition to pastries, offers a variety of classic breakfast items. The store is now on the market, which could have an impact on market share.

Revo Cup Coffee is located at 11030 Quivira Rd in Overland Park, Kansas 66210-1239 and may be reached at http://revocup.com/blog/.

This competition operates out of a 2,100-square-foot shop with a staff of seven people. Approximately $700,000 in annual sales were recorded for the year 2011. The Revo Cup is a specialty roaster with a small footprint. The Ethiopian coffee is roasted in-store by the store’s owners, who are originally from the country. The result is a truly unique roasted coffee experience. Because of its distinctive roasting procedures and limited food selections, the subject should fare well in comparison to its competition.

The Daily Dose Coffee and Bar is located at 4.1.4. Overland Park, Kansas – 12056 W 135th St.

This competition has been in existence since 2003 and has a total space of 2,700 square feet in a shopping area. The coffee shop/bar is open seven days a week and is equipped with a full-service kitchen. On Saturdays and Sundays, the shop hosts live music from time to time. In 2011, the shop had a staff of nine people and generated revenues in excess of $900,000.

Java Crossing is located at 8830 West 95th Street in Overland Park, Kansas 66212-4051.

This competitor rents a 2,700 square foot stand-alone space in a shopping complex from another competition. There are drive throughs on both sides of the building, as well as a short walk up. The company was founded in 2003 and is currently owned by a single individual. In 2011, the store had nine employees and generated annual revenues of $900,000, according to its financial statements. This shop, which is known mostly for its convenience and breakfast sandwiches, is not in direct competition with the subject’s indoor sit-down dining establishment.

Hattie’s Fine Coffees 4195 Somerset Dr Prairie Village, KS 66208-5242 Hattie’s Fine Coffees 4195 Somerset Dr Prairie Village, KS 66208-5242.

Hattie’s, which opened its doors in 2005, employs 17 people and generates $1,700,000 in revenue annually. The business, which is 5,100 square feet in size, is far larger than the subject. Hattie’s Menu options are comparable to the subject matter, with a focus on coffee, lattes, pastries, and modest breakfast sandwiches as the primary offerings. The facility enjoys a positive reputation and a large following. The subject will have to persuade these customers that a cozier and quieter environment makes for a more delightful café experience in order to capture a share of this market.

Sections of the Market

The Russet Cup is aimed towards the three most influential groups of the population, which together account for 39 percent of the total population in the Overland Park area:

The boomburbs (29 percent) are comprised of younger families that lead a busy, expensive lifestyle. The median age is 34 years old. The majority of households have two sources of income; the median household income is $100,000. Product purchases reflect a suburban lifestyle; the suburbs are one of the most important marketplaces for SUVs, lawn and garden equipment, and casual clothing. Technically astute, he participates in sports such as golf, tennis, and swimming.

Professionals who are young, highly educated, and in the workforce (10 percent) are classified as enterprising. married with children, median age of 32, median income of $30,000.

The household’s annual income is $65,000. Youth, mobility, and increasing consumer clout are reflected in one’s way of life. Residents tend to congregate in areas where jobs are plentiful. Travel and exercise are two of my favorite pastimes, and I rely heavily on my cell phone, PC, and the internet to stay connected.

Families with affluent empty-nesters (12 percent ) – Residents are well-educated and experienced, and they are enjoying the transition from child-rearing to retirement life style. The median age in the population is 46, and the median household income is $64,000. This market segment is active in both the physical and monetary senses. Demonstrate an interest in specific homes or communities.

Market Tests

Research from Yelp, FourSquare, and GooglePlaces, indicates the Overland Park market is in need of a new local café. The locals have been clamoring for the current private shops to improve service and/or reduce prices to keep pace with larger chains and franchises, thus providing a unique niche for the right entrant.

While employed by a national restaurant chain, Mr. Jones was constantly directing patrons to offsite coffeehouses for those seeking that final dessert and cup of coffee prior to finishing their evening. This is the reason he ultimately began seeking the location for his coffee house.

Target Market Segment Strategy

Most adult coffee drinkers said their lifelong habit began during their teenage years. In fact, 54% said they began drinking coffee between 13 and 19. Another 22% reported their coffee cravings started between the ages of 20 and 24. This means that 76% of adult coffee drinkers began drinking coffee by the time they were 24. So, despite the large amount of marketing and advertising directed at the younger age groups, savvy coffee shop owners will not forget to cater some of their offerings to the adult and senior market. (National Coffee Drinking Study).

The Russet Cup will offer a unique experience for coffee aficionado by offering a quiet and cozy yet sophisticated cafe and offer a sense of refinement and peace in an otherwise hectic and fast paced world. While other coffee shops cater to convenience with drive throughs or loud music venues late into the night, the Russet Cup will stand apart from its competitors with its quiet yet soothing ambience, capturing a truly unique (and much needed) market niche.

Market Needs

Coffee shop customers, by nature, are looking for something special — that’s why they are willing to pay so much for a cup of coffee! Many customers of the big national chains, while satisfied with their daily coffee would be intrigued to find a local coffee that is different. (SBA National Information Clearinghouse)

Market Trends

  • Unique products (specialized roasts, local ingredients, locally themed or named drinks, custom drinks by the‘star’ barista, etc.)
  • Games, puzzles, mind benders and other activities that encourage customers to linger over their coffee
  • Hosting or sponsoring local events (entertainment, readings, book clubs, etc.)
  • Using technology to creatively compete in marketing with the big chains — services like FourSquare, Yelp, and Google Places can increase visibility in the local market.
  • Delivering amazing service from knowledgeable baristas — spend lots of time training staff and utilize online services like the American Coffee & Barista School
  • Selling coffee-related items (and track down any co-marketing opportunities with a local community college or other student-related group in the area)

Despite the economic woes, 37% of total coffee consumed in the United States in 2011 was classified as “Gourmet.” According to the National Coffee Drinking Study This suggests consumers were set on drinking good coffee and visiting their local coffee shop even in the face of an uncertain economy. (First Research)

The sales of coffee dominate sales of hot beverages, making up 83.3% of the total hot beverage market in the U.S. Coffee consumption is expected to increase through 2015 at an average annual rate of 2.7%, while tea consumption is expected to increase through 2015 at an average annual rate of 3.1%. Positive expectations for continued growth in coffee sales, despite its “mature” product position in the market, are due to the innovations in premium coffee products (pods, single-serving instants, etc.) (First Research)

Positioning

The Russet Mug will position itself as a local coffeehouse or a ‘suburban’ coffeehouse providing a sanctuary for those in the ‘burbs’ without the hassle of having to drive downtown

  • By charging similar prices as the large chains – the service and quality of the product will commensurate with the price
  • The Russet Cup is genuinely unique place to gather and meet friends, and enjoy coffee
  • Amenities such as free WIFI, chess games, comfy overstuffed chairs, create a relaxing environment
  • The market does not need a café offering fast food breakfasts or another after hours bar
  • The Russet Cup will position itself as the alternative to the chain/franchise/fast food coffee house.

Marketing Strategy and Implementation

The Russet Cup will provide a quiet and relaxing environment to enjoy gourmet roasted coffee and smoothies and an opportunity to visit with friends, catch up on one’s email, or read a chapter of a book. The Café will fill the great void providing originality in a sea of facsimile, corporate coffee shops. The café’s baristas will be extremely knowledgeable and offer assistance in any coffee purchase while simultaneously providing customers with outstanding service.

Analysis of Strengths, Weaknesses, and Opportunities

The SWOT analysis examines the strengths and weaknesses of the café and identifies areas that need to be improved. In addition, this section looks at the opportunities that Café has as well as the potential threats that it faces.

Strengths

As a result of its smaller size and the fact that it is not a franchise, the Russet Cup is a unique coffee shop concept that is unlike anything else available in the Overland Park market.

This shop will be staffed by baristas who have been carefully selected for their professionalism and enthusiasm. The owner has firsthand experience in operating and starting new restaurants.

Weaknesses

Franchising is the quickest and most secure way to start a café; however, the café will not have the backing of one of these established entities. • The Russet Cup operates on a shoestring budget and competes for market share against larger and more established coffeehouses.

Opportunities

The demographics of Overland Park indicate a strong demand for a distinctive coffee shop. • There are additional opportunities to target the active and recently retired target markets as well as the 45 years and older age group. • The goal is to take a small slice of a much larger pie. Only 40% of the nation’s coffee drinkers consume premium ground and whole bean coffee, according to the National Coffee Association. To ensure continued growth, the industry must educate and inspire coffee drinkers to become coffee connoisseurs. • The local coffeehouse/café market is worth $54 million.

Threats

The Morning Glory Coffee Shop is currently on the market for sale; if another independent business were to purchase this café, it would pose a significant threat to market share.

The Pyramid of Strategy

In the short term, a number of promotions and activities are planned to coincide with the company’s official launch in order to raise awareness. The coffee shop will hold a contest in which 20 bottomless mugs will be given away, and it will publicize this promotion through radio advertising, as well as countertop displays and posters in the shopping plaza, among other methods.

www.FASTBusinessPlans.com café business plan template version 5.3,5.4,5.5 • In addition, during its first year of operation, the coffee shop will give away a limited number of coupons for a free cup of coffee to prospective customers who come into the shopping center to browse the selection.

One-of-a-kind Selling Proposition (USP)

The Russet Cup stands out from the crowd of coffee chains and franchises in a crowded sea of them. One of the things that distinguishes them from the competition is their smaller, cozier size, which is combined with premium coffee served by knowledgeable baristas who exude so much energy and enthusiasm for the products they sell to customers.

Advantage in the marketplace

The Russet Cup’s competitive advantage, which is also its most significant characteristic, is also its most important characteristic. It is easier for them to adjust business hours to accommodate an after-hours book reading session because they are small and do not have to deal with bureaucracy; this is not the case for large corporations that have to provide such an accommodation. The Russet Cup will go above and beyond to meet the needs of its customers.

Strategy and positioning in the marketing field

The Russet Cup employs a market-specific concentration strategy. They can cater to the specific needs of three primary segments by focusing their efforts on them specifically.

Senior Market (people over the age of 45)

The Russet Cup will target this market simply because of its strategically placed venue. Despite the fact that this demographic group has the ability to drive downtown, they prefer to unwind and relax at a local café, where they have historically become some of the most loyal customers.

Employees who have recently been hired

The café will attract regular customers (weekly or more) – particularly the newly employed (their first job) – by providing free WIFI services and entertaining games in the customer lounge.

Families with Children under the age of 18

Younger families, who make up the third targeted market, frequently complain that coffeehouses are not ‘kid’ friendly. A combination coffee shop and play area is being planned by the company in the long term, so that parents and caregivers can have a place to meet with other adults while their children enjoy the bounce houses, slides, and other indoor playground equipment.

Positioning Statement

The Russet Cup is a hidden treasure for gourmet coffee connoisseurs. Our unique coffee house serves outstanding gourmet coffees and blends, which are served by enthusiastic and knowledgeable baristas in a warm, relaxed environment. It is truly one of a kind in the area, offering outstanding gourmet coffees and blends, which are served by enthusiastic and knowledgeable baristas in a warm, relaxed environment. It is the place to meet up with friends or to curl up in a quiet corner with a good book, either from the library’s collection or from one of the patron’s personal E-Books collection.

Pricing Strategy

The Russet Cup primarily uses competition-based pricing as its primary pricing strategy. In addition to the opening promotion, the café does not use coupons or discounts because they believe that the most valuable customer demographic of daily coffee consumers is not influenced by discount programs or coupons.

Promotional and advertising strategies are discussed in detail.

Advertising on popular social media sites such as Facebook will be a regular feature of the Russet Cup’s online marketing strategy. When compared to traditional print advertising, this is a more cost-effective strategy that will allow them to reach prospects in a more targeted manner than ever before (e.g., based on criteria such as age, gender, geography, etc.).

In order to promote their presence on the aforementioned social media channels, the Russet Cup will create a straightforward Web site that will provide basic information about the business, as well as a menu and links to their social media profiles.

Business will advertise on local radio stations during the first six months of operation and during the busiest shopping season of the year (the holiday shopping season).

Website The Russet Cup will have a straightforward website that lists its menu items, which will include gourmet coffees, smoothies, and pastries, as well as the location, a map, and operating hours. Additionally, the website will include a calendar of any upcoming events or sponsorship opportunities.

It will also include links to their social media accounts, such as Facebook, Twitter, and Pinterest.

Marketing Programs

In addition, the café will rely on signage to attract customers to its location. On a weekly basis, Price Chopper draws 10,000 customers to its location.

Plan of Action in the Sales Department

According to Andrew Hetzel’s book Better Coffee, Better Business, the Russet Cup will employ the following strategies to increase sales revenue:

The menu will be centered on the most profitable products currently on the market. Whenever possible, the café will direct.

Café Business Plan Template • Hold sales competitions among employees – The baristas are the salespeople, and they have a significant amount of influence over the ordering process of the customers. Everyone who works in the coffee shop will receive some form of sales and customer service training, so that every transaction is active rather than passive. Cross selling and high margin items will be the focus of sales competitions.

Predictions for Sales

A conservative 5 percent increase in revenues is assumed in Year Two, with a 10 percent increase in revenues predicted for Year Three, according to the sales forecast. The sales forecast for the next three years is depicted in the following chart.

Sales Estimates for the Year

Sales Promotional Programs

Employee sales competitions will be held at the Russet Cup – the baristas are the salespeople and have a significant amount of influence over the ordering process for customers. To complete each transaction, all baristas will be required to complete sales and customer service training courses. The emphasis of the sales contests will be on high-margin items and cross-selling.

Legal Considerations

The Russet Cup is a Kansas-based S-Corporation that was established in the state of Kansas.

Significant Milestones

The Russet Cup has reached a number of significant milestones, which are detailed below.

  • Management and Organizational Structure
  • Organizational Structure (in English)

The Russet Cup is established as an S-Corporation, with Owen Jones as the sole shareholder.

The Management Group

Owen Jones will be the sole owner of the Russet Cup for the foreseeable future. Mr. Jones, a graduate of Kansas State University with a bachelor’s degree in business administration, is currently employed. During high school, he worked as a waiter in a local hospital coffee shop, which sourced its beans from a nearby roaster, to supplement his income. In addition to the fact that he is an avid coffee drinker himself, this job provided him with the opportunity to learn about the business firsthand. Jones worked as a barista in a campus coffeehouse for four years during college, eventually rising to the rank of assistant manager. In the months following graduation, Jones accepted a position as business development manager for a regional restaurant chain, which provided him with additional hands-on experience in the food and beverage industry—particularly the procedures involved in opening new locations.

Gaps in the Management Team

When it comes to generating daily accounting and cost activity reports, the Russet Cup will rely on its POS (Point of Sale) software. Mr. Jones will give these to an outside bookkeeper who will use them to prepare the annual income tax returns.

Human Resources Management Plan

In the beginning, the café will employ one manager, five baristas, and two part-time servers. In Year 2, the café intends to hire one additional full-time barista to help with the growing demand.

Usiness and Financial Plan

The following items will be included in the financial plan:

• • • • • • • • • • • • • • • • • • • • • • • • • • • •

  • Start-up expenses must be budgeted for. Profit and Loss Statements
  • Managing Cash Flow
  • Financial Ratios on the Balance Sheet
  • Several important assumptions must be made.

The sales forecast is conservative, with a 5 percent increase in Year 2 and a 10 percent increase in Year 3 being anticipated.

The analysis takes into account economic seasonality, which occurs when revenues peak during certain months (such as holidays) and decline during slower months.

The analysis makes the assumption that the owner will receive a significantly lower salary than his baristas, and that the owner will be able to withdraw money at any time at his discretion, as shown in the graph.

Sales are recorded on a cash basis, rather than using accrual accounting.

Over the next three years, a moderate increase in staff is expected.

In 2012, the average barista salary is $50,000 per year.

In general, most cafes have a gross profit margin of 85 percent or higher. In general, most cafes have a net profit margin of 3 percent.

Cite this paper

Select style

Reference

BusinessEssay. (2022, September 17). Analysis of the Russet Cup Cafe. Retrieved from https://business-essay.com/analysis-of-the-russet-cup-cafe/

Reference

BusinessEssay. (2022, September 17). Analysis of the Russet Cup Cafe. https://business-essay.com/analysis-of-the-russet-cup-cafe/

Work Cited

"Analysis of the Russet Cup Cafe." BusinessEssay, 17 Sept. 2022, business-essay.com/analysis-of-the-russet-cup-cafe/.

References

BusinessEssay. (2022) 'Analysis of the Russet Cup Cafe'. 17 September.

References

BusinessEssay. 2022. "Analysis of the Russet Cup Cafe." September 17, 2022. https://business-essay.com/analysis-of-the-russet-cup-cafe/.

1. BusinessEssay. "Analysis of the Russet Cup Cafe." September 17, 2022. https://business-essay.com/analysis-of-the-russet-cup-cafe/.


Bibliography


BusinessEssay. "Analysis of the Russet Cup Cafe." September 17, 2022. https://business-essay.com/analysis-of-the-russet-cup-cafe/.