OWNERS

‘The Beans café’ has three owners who will manage the business, they are:

NATURE OF BUSINESS

‘The Beans Café’ is basically a coffee shop , serving a variety of hot and cold coffees , and quick
meals like rolls, sandwiches, muffins and doughnuts amidst the hub of corporations and educational
institutions, to serve them with corporate quality along with comfort.

Our target market will be OFFICES and UNIVERSITIES. After attaining awareness and profitability in
a time span of 6 months to 1 year, the partners will expand the business as well, and open outlets in
other parts of Karachi, then later to the rest of Pakistan.

FINANCE REQUIRED

An estimated capital of Rs.3.5 million is calculated to initiate and manage the business. Projected
recovery of the initial financing is calculated for 3 years. Table 1.2.a reflects the financial breakup.

Profit Sharing Ratio

AKBAR ALI PARYANI 40%

STATEMENT OF CONFIDENTIALITY
FEHAN BIN MUHAMMAD 40%
HAFIZ AHMED SIDDIQUIE 20%
This report is confidential and is the property
AHMED BIN HAMID
MUHAMMAD IBRAHIM of the partners mentioned above. It is
intended only for use by the persons to whom it is transmitted and any reproduction or divulgence of
any of its contents without the prior written consent of the company is prohibited.

INDUSTRY ANALYSIS

FUTURE OUTLOOK AND TRENDS

The coffee drinking trend in Pakistan began to grow in around 2000, AT first it was coffee at home or
if it was winter in Karachi then the local coffee machine would do.But now it has changed it is more of
especially going out to a café etc to chat, meet up, or discuss corporate matters over a cup of coffee.
As the research suggests, the coffee trend in Pakistan is increasing, more people have become
aware of these types of places. Actually it has become more of a status symbol and fashion., as the
present day Cafés say that sales are increasing day by day and the coffee houses are full even at
closing time. But these outlets are concentrated in the areas of Clifton and Zamzama etc.
According to the research done, future trends are for the coffee shops to spread out into the rest of
Karachi and Pakistan and more youngsters and professional people would be interested to
experience this phenomenon.And more international names would come like Starbucks etc.

ANALYSIS OF COMPETITORS

The main coffee shops in Karachi are:

Local:
• Espresso
• Roasters
• Caffeine
• Lattetude

Franchises
• Costa Coffee (UK)
• Café Coffee Day (India)

Local Coffee Shops

These shops are more of a hangout place for teenagers, couples. Actually more of a dating place.
These outlets have been made with a western touch(even copied)They cater to middle and high
income groups.
For example Caffeine is a hangout for guys, where smoking, drinking etc is allowed. Not a family
place!

Franchised Coffee Shops

Especially when we talk about Costa Coffee it is a status symbol to even be there, the coffee is quite
expensive, as all the coffee is imported from London. One can catch many models, politicians there!
Café coffee Day also serves good coffee, and gives a real warm welcome, however their prices are
cheap as it all comes from India.

INDIRECT COMPETITORS

There may be more brands then the ones mentioned above. These are the direct competitors in the
Coffee cafe. In addition, the cafes are the indirect competitors

Some of the indirect competitors are:

- dunkin donuts
- subway
- indulge
- ciao

This all are small sized restaurants in the sense that they serve a limited type of items. For Example
Dunkin Donuts is not a coffee House , as it focuses on Donuts and also serves coffee. Subway
focuses on sandwiches but also serves coffee and drinks.

MARKET SEGMENTATION
We have divided the market in the two major segments:
1. Office executives
2. Students

1. Office executives
This segment consists of those consumers who are working in offices especially on Shahrah e Faisal
as they are main focus, the other end i.e. Zamzama is saturated with coffee houses but there was no
reasonable one in the PECHS, Shahrah-e-Faisal where there are also many offices. They are so
many offices but less decent places to eat, as the coffee trend has increased, and as the survey
supports there are many people who like to drink coffee and would buy other snacks too.
2. Students
There are many schools in the PECHS area and universities like Mohammad Ali Jinnah University,
FAST, PAF KIET etc the students there are also from middle and upper class families and therefore
follow fashion and new trends, and drinking coffee is an upcoming trend.

INDUSTRY FORECAST

According to the research done by both the study of competitors and through questionnaires, we can
for surely say that the there will be an increase in coffee drinkers.
Drinking coffee is a trend of the West, and it is increasing here too, like the other fashions are being
imitated. Places like McDonalds, KFC, and Subway etc all are successful because of being
associated with the West.

As it is predicted by the present coffee shop managers more franchises are going to come like
Starbucks etc therefore the competition will increase, but as they will be franchises their prices would
be higher.

Some of the survey questionnaires are attached at the end.

DESCRIPTION OF VENTURE

PRODUCTS

Coffee and Espresso Drinks

ESPRESSO

Name Description
Espresso A double shot of straight espresso.
Caffe
Espresso combined with hot water, a gourmet brewed coffee.
Americano
Cappuccino Espresso with a smooth topping of milk foam.
 Espresso combined with steamed milk, topped with a small amount of velvety milk
Caffe Latte
foam.
A Caffe Latte combined with Ghirardelli chocolate, topped with whipped cream and
Caffe Mocha
chocolate shavings.
Espresso
A straight shot of espresso topped with a spoonful of rich milk foam.
Macchiato
Espresso Con
A straight shot of espresso topped with a generous dollop of whipped cream.
Panna
Espresso
Our famous latte made even more creamy with half and half.
Latte Breve
Espresso
Espresso combined with our gourmet coffee of the day
"Red Eye"

COFFEE DRINKS

Name Description
The
Coffee. Warm milk. Banana, macadamia nut and vanilla syrups. Topped with whipped
Banana
cream and cinnamon dusting.
Nut Java
The Cafe
Coffee. Warm milk. Amaretto and vanilla syrups topped with whipped cream and almonds.
Milano

FLAVORED ESPRESSO DRINKS

Name Description
Vanilla
Cappuccino made with vanilla flavored milk foam.
Cappuccino
Vanilla Latte A Caffe Latte with vanilla essence added.
White
Espresso, white chocolate flavoring and steamed milk topped with velvety foam and
Chocolate
white chocolate shavings.
Latte
The 50/50
Espresso. Vanilla and orange syrups, steamed milk and whipped cream topping.
Latte
The
Raspberry Coffee. Raspberry and chocolate syrups. Half and half. Whipped cream topping.
Mocha Latte
HOT COCOA DRINKS

Name Description
French Vanilla
Hot cocoa with vanilla and whipped cream.
Cocoa
White
Chocolate Hot cocoa with white chocolate and whipped cream.
Cocoa
Chocolate
Rich dark hot cocoa with whipped cream topping.
Truffle Cocoa
Holiday Spice
Rich hot cocoa and holiday spices. Topped with whipped cream.
Cocoa
Peppermint
Rich chocolate and refreshing peppermint. Topped with whipped cream.
Cocoa
Ovaltine Ovaltine Chocolate Malt and milk.

SMOOTHIES

Name
The Espresso Chocolate Malt
The Double Dutch Chocolate
Smoothie
The Mocha Smoothie
The Vanilla Smoothie
50/50 Smoothie (Orange and
Vanilla)

Snacks and Pastries

Items
Cheesecake,
Fresh scones
Apple Pie
Brownies
Blueberry Muffins
Croissants
Black Forest Cake
Chocolate Mousse Cake

SIZE OF BUSINESS

As per the definition of SMEDA and ILO, our business will be considered as a small business with a
total investment of Rs. 3,500,000, total people employed are 15, Productive Assets limit is of Rs.
1,007,760.

LOCATION

On asking the professional people, we were told a suitable location for the café on Shahrah-e-Faisal
SHOP# 10, GROUND FLOOR, AMBER CASTLE, PLOT #21-A
BLOCK #6, PECHS, SHAHRAH-E-FAISAL, KARACHI

The shop has two storeys and is over 700 square feet, the shop has electricity and water connections
and the gas has to be acquired.

The plot will be obtained on rent. Six months rent will have to be given in advance,along with a 6
monh fixed deposit, the rent will be increased by 10% per year.,and a one year agreement will be
made on legal paper. Further extension of the contract will be based on mutual understanding.

INFRASTRUCTURE
The infrastructure shall include the following:
1. 3 phase K.E.S.C. electricity connection
2. K.W.S.B. line connection
3. Telephone, Internet and Sui Gas connections
Details are below:

OFFICE EQUIPMENT & PERSONNEL

Personnel:
Monthly Annual
Per Head
Designation Staff Salary Cost
Salary (Rs)
(Rs) (Rs)
Sales and Marketing Manager 1 15,000 15,000 180,000
Financial Manager 1 18,000 18,000 216,000
Administrator 1 12,000 12,000 144,000
Accountant 1 8,000 8,000 96,000
Waiters 10 4,000 40,000 480,000
Driver 1 5,000 5,000 60,000
Washer 2 5,000 10,000 120,000
Sweeper 1 2,500 2,500 30,000
Watchman 1 4,000 4,000 48,000
Total 20 73,500 114,500 2,718,000

Furniture and Fixture:

Equipment Quantity Per Unit Cost Total Cost
(Rs) (Rs.)
2 Seater Table 10 3,000 30,000
Chairs 20 4,000 80,000
Sofa Seats 12 3,200 38,400
Center Table 04 4,500 18,000
Counter 1 30,000 30,000
Cabinets 6 2,000 12,000
Counter Stool Chair 6 2,300 13,800
Wood Flooring 700 sq. 35 per sq. feet 24,500
Feet
Wall Paintings 8 1,000 8,000
Music System 1 15,000 15,000
Total - - 269,700

Office Equipment:
Equipment Quantity Per Unit Cost Total Cost
(Rs) (Rs)
Computer 2 22,000 44,000
Laser Printer 1 15,000 15,000
UPS 2 8,500 17,000
Air Conditioner 4 35,000 140,000
Generator 1 450,000 450,000
- - 666,000

BACKGROUND OF ENTREPRENEURS
The three entrepreneurs, Akbar ali paryani. Fehan bin Muhammad, hafiz ahmed siddiqui, ahmed bin
hamid and Muhammad ibrahim are completing their degrees in Business Administration. Having fresh
and innovative ideas and knowledge of these areas creates an ideal triangle of creativity and
coordination among these entrepreneurs.

Throughout their professional education, they have completed different related projects and attended
many seminars which help them understand the real life assessments of risks and opportunities.

As there was a gap for this type of business in the market, especially on Shahra-e-Faisal, they
decided to go ahead with this business.

MERCHANDISING PLAN

The basic import will be Coffee Beans which is imported from India from the Amalgamated Coffee
Beans Company. The address is:

The Coffee Beans that will be used are :

- Arabica
- Robusta
 - Peberry

The Coffee sacks contain the coffee beans in the following ratios:

- Arabica 50%
- Robusta 30%
- Peberry 20%

The Coffee Beans Sacks come in 40kg sacks with Rs. 600 per kg.
Other than that the major products needed are milk, cocoa, various syrups,chocolate,cream and
sugar from whole sale market with the following prices.

Everyday Milk Powder at Rs 150 per kg

Sugar at Rs 45 per kg
Cocoa at Rs70 per kg
Syrups at Rs90 per 500ml
Chocolate at Rs400 per kg
Cream at Rs 200 per kg

The stock will be kept for monthly use approx 5 sacks per month will be imported the usual use is 4
sacks but 1 would be kept as safety stock.The rest of the stock would be kept also for monthly use
and bought from Wholesale market in Karachi therefore could be purchased immediately in case of
increase.

All the dry items would be kept in a pantry made in the café and the items like cream, chocolate would
be kept in the fridge.

The snacks would be bought from United Bakery, as settled with them they stock could be delivered
on daily basis, to minimize any losses.At least 7 to 10 of each item would be kept and the amount
changed according to what is liked by t he customer.

MARKETING PLAN

PRICING WOULD BE AS FOLLOWS

3.2.1 Coffee and Espresso Drinks

ESPRESSO

Name Description Regular Large

Espresso A double shot of straight espresso. Rs.50.00 Rs. 75.00
Caffe
Espresso combined with hot water, a gourmet brewed coffee. Rs.60.00 Rs.85.00
Americano
Cappuccino Espresso with a smooth topping of milk foam. Rs.70.00 Rs.95.00
Espresso combined with steamed milk, topped with a small Rs.75.00 Rs.95.00
Caffe Latte
amount of velvety milk foam.
A Caffe Latte combined with Ghirardelli chocolate, topped Rs.80.00 Rs.100.00
Caffe Mocha
with whipped cream and chocolate shavings.
 Espresso A straight shot of espresso topped with a spoonful of rich milk Rs.60.00 Rs.80.00
Macchiato foam.
Espresso Con A straight shot of espresso topped with a generous dollop of Rs.60.00 Rs.80.00
Panna whipped cream.
Espresso Rs.60.00 Rs.80.00
Our famous latte made even more creamy with half and half.
Latte Breve
Espresso Espresso combined with our gourmet coffee of the day to get Rs.60.00 Rs.80.00
"Red Eye" your day going.

COFFEE DRINKS

Name Description Small Large

Coffee. Warm milk. Banana, macadamia nut and vanilla Rs.75.00 Rs.100.00
The Banana Nut
syrups. Topped with whipped cream and cinnamon
Java
dusting.
Coffee. Warm milk. Amaretto and vanilla syrups topped Rs.70.00 Rs.90.00
The Cafe Milano
with whipped cream and almonds.

FLAVORED ESPRESSO DRINKS

Name Description Regular Large

Vanilla Rs.80.00 Rs.110.00
Cappuccino made with vanilla flavored milk foam.
Cappuccino
Vanilla Latte A Caffe Latte with vanilla essence added. Rs.75.00 Rs.100.00
White Espresso, white chocolate flavoring and steamed milk Rs.90.00 Rs.120.00
Chocolate Latte topped with velvety foam and white chocolate shavings.
Espresso. Vanilla and orange syrups, steamed milk and Rs.75.00 Rs.100.00
The 50/50 Latte
whipped cream topping.
The Raspberry Coffee. Raspberry and chocolate syrups. Half and half. Rs.75.00 Rs.100.00
Mocha Latte Whipped cream topping.

HOT COCOA DRINKS

Name Description Regular Large

French Vanilla Rs.75.00 Rs.95.00
Hot cocoa with vanilla and whipped cream.
Cocoa
White Rs.85.00 Rs.110.00
Chocolate Hot cocoa with white chocolate and whipped cream.
Cocoa
Chocolate Rs.75.00 Rs.100.00
Rich dark hot cocoa with whipped cream topping.
Truffle Cocoa
Holiday Spice Rich hot cocoa and holiday spices. Topped with Rs.75.00 Rs.100.00
Cocoa whipped cream.
 Peppermint Rich chocolate and refreshing peppermint. Topped with Rs.80.00 Rs.100.00
Cocoa whipped cream.
Ovaltine Ovaltine Chocolate Malt and milk. Rs.65.00 Rs.85.00

SMOOTHIES
All smoothies are Rs. 75.00

Name
The Espresso Chocolate Malt
The Double Dutch Chocolate
Smoothie
The Mocha Smoothie
The Vanilla Smoothie
50/50 Smoothie (Orange and
Vanilla)
Description
A chocolate malt for grownups.
Very chocolatey!
An all-time favorite.
Rich natural vanilla flavor.
A 50's favorite.

3.2.6 Snacks and Pastries

Item Price
Cheesecake Rs. 140
Fresh scones. Rs. 110
Apple Pie Rs. 60
Brownies Rs. 60
Blueberry Muffins Rs. 60
Croissants Rs. 70
Black Forest Cake Rs. 120
Chocolate Mousse Cake Rs. 120

PROMOTION
ADVERTISING MEDIA
Two advertising media would be used:

• Banners
One hoarding will be placed on main Sharah-e-Faisal
The cost of designing = Rs. 3,000 + 1,100 = 4,100

• Newspapers and Magazines

Columns will be published in English Daily Dawn and Urdu Daily Roznama Jung on Sundays.
Publication Place Rate Per Column Per CM Extra Charges 4. Colr Spot Classi
s d
Casual Contract Supplem Front Back
Page Page
Urdu
Dailies
Jang Karachi 1100 830 200% 100% 100% 25% 150
Jang Karachi 1210 200% 100% 100% 165
(Sunday)

English
Dailies
Dawn Karachi 1600 1200 17
Dawn Karachi 1900 18
(Sunday)

Total budget for promotional activities for the first year is as follows:
We’ll publish 4 column advertisements, budgeted as follows
4 columns X 27 cms = 108 cms
For Jang Sunday 108 X 1210 = Rs.130,680 X 12 = Rs. 1,568,160
For Dawn Sunday 108 X 1900 = Rs. 205,200 X12 = Rs. 2,462,400
Total Rs. 4,030,560
.

Total Promotional Cost per annum = 4,100 + 4,030,560= Rs. 4,034,660

PRICING
Since coffee consumption has an elastic demand, our strategy is to price our product competitively
and a little below the prevailing prices in the market. The lower price will produce more total revenue.
This will result in attaining consumer acceptance and market share quickly delivering economies of
scale with commensurate increases in margins and earnings.

COMPETITOR BASED PRICING

Our goal is to maximize our market share. We believe that a higher sales volume will lead to lower
unit costs and higher long run profit. Therefore we will set prices similar prevailing prices in the
market. We determined the prices by first looking at our own costs and then how the competitors have
priced their product, which is lower than most cafes.
PRODUCT FORECASTS

ORGANIZATIONAL PLAN
FORM OF OWNERSHIP

This business has five partners, thus the form of owner ship is the partner ship of these five
entrepreneurs. The partnership terms and conditions is enclosed in the Appendix section in the end of
this report.

ROLES AND RESPONSIBILITIES OF THE PARTNERS

Miss Sabeen Khan – Manager Finance

She will look after the financial operations of the organization. The cash flows, income statements etc
will be prepared and managed by her and all the salaries management will be cover by her post.
Miss Saher Farooq– Manager Marketing

Marketing department will be managed by her. She will pave the way to market the product and will
look after the area of Sales Management.

Miss Arshia– Manager Administration

She will look after the Production Processes, Human Resource and issues related to labor force she
will also be responsible for keeping track of the inventory etc.

ASSESSMENT OF RISK

Surveys and research showed that since there is scarcity of provision of clear drinking water, this
business has wide acceptance and there is very low risk of failure. Although every business has to
undergo different shocks and obstacles, we are sure that our knowledge and dedication will result in a
success and our revenues will grow smoothly.

FINANCIAL ASSUMPTIONS

Year 2 Year 3

Debt 35% 35%

Equity 65% 65%
Tax Rate 40% 40%
Down payment on machinery and equipment lease 20% 20%
Interest rate on machinery and equipment lease 25% 25%
Depreciation on Machinery and Equipment (Straight Line) per 10% 10%
annum
Depreciation on Office Furniture and Fittings (Straight Line) per 10% 10%
annum
Depreciation on Office Equipment (Straight Line) per annum 10% 10%
Growth in Sales 10% 5%
Increase in Cost 9% 5%
Increase in Salaries 5% 5%
Increase in promotional expense 15% 5%
 PRO FORMA INCOME STATEMENT

Year 1 Year 2 Year 3

124,786,20 143,504,13
Sales 113,442,000 0 0
117,763,60 123,651,78
less COGS 108,040,000 0 0
Gross Profit 5,402,000 7,022,600 19,852,350
General, admin & selling expenses
Rent 900,000 990,000 1,089,000
Utilities Expense 420,000 441,000 463,050
Advertising 4,034,660 4,236,393 4,448,213
Salaries Expense 1,374,000 1,442,700 1,514,835
Depreciation Expense - Furniture and
Fittings 53,940 53,940 53,940
Depreciation Expense - Equipment 198,000 198,000 198,000
Other Expenses 50,000 50,500 51,005
Total General, admin & selling expenses 7,030,600 7,412,533 7,818,043
EBT -1,628,600 -389,933 12,034,307
Less Tax (15%) -244,290 -58,490 1,805,146
Net Income -1,384,310 -331,443 10,229,161
Share of Earnings
Sabeen -553,724 -132,577 4,091,664
Arshia -553,724 -132,577 4,091,664
Seher -276,862 -66,289 2,045,832
 9.1.III PROJECTED CASH FLOW

Year 1 Year 2 Year 3

Cash Inflows
Sales Revenue 113,442,000 124,786,200 143,504,130
Tax Benefit 244,290 58,490 0
Total Cash Inflow 113,686,290 124,844,690 143,504,130

Cash Outflows
Cost of Goods Sold 108,040,000 117,763,600 123,651,780
Rent of Building 900,000 990,000 1,089,000
Advertisement 4,034,660 4,236,393 4,448,213
Salaries 1,374,000 1,442,700 1,514,835
Other Expenses 50,000 50,500 51,005
Purchases of Furniture and
Fittings 269,700 0 0
Purchases of Equipment 666,000 0 0
Tax Payment 244,290 58,490 1,805,146
Total Cash Outflow 115,578,650 124,541,683 132,559,979

Net Cash Inflow/Outflow -1,892,360 303,007 10,944,151

Opening Balance 2,500,000 607,640 910,647
Closing Balance 607,640 910,647 11,854,798
 9.1.IV PRO FORMA BALANCE SHEET

Year 1 Year 2 Year 3

Fixed Assets

Furniture and Fixtures 269,700 269,700 269,700

less accumulated depreciation 53,940 215,760 107,880 161,820 161,820 107,880

Equipment 990,000 990,000 990,000

less accumulated depreciation 198,000 792,000 396,000 594,000 594,000 396,000
1,007,76
Total Fixed Assets 0 755,820 503,880

Current Assets
Bank 607,640 910,647 11,854,798
Prepaid Rent 450,000 450,000 450,000
1,107,93 2,412,73 13,225,28
Stock 50,290 0 1,052,090 7 920,483 1
2,115,69 3,168,55 13,729,16
Total Assets 0 7 1

Equity

Capital
Sabeen 1,500,000 1,500,000 1,500,000
Arshia 1,500,000 1,500,000 1,500,000
Seher 500,000 500,000 500,000
3,500,00 3,500,00
Total Capital 0 0 3,500,000
1,384,31 10,229,16
Add Net Income/ Less Net Loss 0 331443 1
2,115,69 3,168,55 13,729,16
Total Equity 0 7 1
APPENDIX