A Business Plan

For starting
Caf coffee - HUGS WITH MUGS

Submitted By:
Amit gupta
00113303913

Executive Summary
I am planning to start a business of coffee shop. Name of the shop is HUGS WITH MUGS
.Our target market is Rohini. The customers to whom our products will be supplied are retailers,
wholesalers and traders in the Rohini market .
The HUGS WITH MUGS will be a one of a kind coffee house / caf located in ROHINI SEC24. The 200 square foot caf will be located in the newly constructed Market Square Plaza
located on the Pocket 7, sec 24.

The HUGS WITH MUGS aptly named for the aromatic brown liquid that will fill the cup, fills
the void of original cafes in the market area, stands out from its corporate peers with their fast
food concepts and fast services. The HUGS WITH MUGS is the alternative to fast
food/commercial/coffee shops and offers a much calmer, civilized gourmet coffee experience.
There are no televisions in the caf, the background music is subtle and work from local artists
will hang on the walls. The caf is well appointed with overstuffed leather chairs and sofas in a
library like setting. The caf is reminiscent of times gone by yet is cutting edge technologically
with WIFI and state of the art espresso machines.

The HUGS WITH MUGS measures its financial success in terms of increased market share and
in earnings. With a total local market of rs 54 million, this is a tremendous opportunity! The keys
to success will be the ability to offer quality gourmet coffees, take advantage of its small size,
and reliance on an outstanding barista staff. In order to achieve these goals, the caf will offer
some the areas finest gourmet beans from local distributors. Because of its small size, the caf
can enjoy larger margins in the form of lower overhead. The cafe will hand select baristas and
offer salaries comparable to the chains. In turn the baristas will be trained to cross-sell, and sell
the higher margin products.

General Company Description

My company will be in the confectionary business. Hugs with mugs is a coffee shop which is
into providing quality coffee to the customers

Vision
Our vision is to be the leading coffee provider all over India.

Mission
Hugs with mugs is committed to its products and employees which they believe is the recipe for
market success. We seek to produce high quality products at competitive price using modern
technology to provide high satisfaction to the consumers.

Objectives
To provide the customers with the quality products to the best interest of the customers.
To create Price competitive Products as part of the effect to increase the world access to
high quality coffee.
To ensure a hygiene & clean working environment as to continue to produce Safe &
Tasty Products
To strive to Meet & Exceed Customer's Expectations so as to ensure a sustainable
business relationship.

Target Market

Upper class
Middle class
Lower middle class
All age groups

About Industry
Hugs with mugs will be a coffee house / caf located in the sec-24, rohini. Located in the rohini,
the cozy caf will be located in the newly completed Market Square Plaza. The caf will serve
gourmet coffees, espresso and drip coffee, lattes, and smoothies. The simple pastry offerings may
vary with seasonality but the primary line will be muffins, breads, cookies, scones, and rolls. All
pastries will be supplied daily by a local bakery.
The caf will be owned and operated by amit gupta. The caf will be open for business Monday
Thursday 7-10, Fridays and Saturdays 7-11 and closed Sundays.
Core Competencies
The core competencies on which our company will compete are:
Taste
By consuming the hugs with mugs coffee flavors there is so much pleasure in tasting
the chocolate, gourmet, ice cream and cold milky coffee makes the coffee tasty. First
perception the consumer would describe for the coffee as chocolaty tasty and
delightful
Quality
The raw ingredients are of finest quality and also care is taken of the production process;
roasting and crushing the cocoa beans and mixing the cocoa paste with sugar and other
ingredients such as milk.

Ownership

Our company will be a sole proprietor ship firm.

Guiding Principles
Hugs with mugs is committed to values such as excellence, passion, quality, integrity and
leadership which allow them to navigate challenges and provide for future opportunities. These
core beliefs start with their commitment to their products and their employees.Hugs with mugs
rewards excellence and cherishes loyalty. The caf will work with its employees to build strong
businesses and a secure future.
Keys to Success
Hugs with mugs stands out from the competition. Below are their Keys to Success:
Great Products providing exemplary products at market prices will make customers want to
return again and again
Hire Quality Baristas Pay employees rates similar to the larger chains with opportunities for
long term careers and opportunities for advancement with long term plans to open a second
facility
Convert Customers to Connoisseurs - Only 40% of the nations coffee drinkers consume
premium ground and whole bean coffee this will aid in continued growth

Competitor Analysis
COMPANY

FOUNDED IN

BRAND PORTFOLIO

Caf

1996

(confectionery products)
Sandwitch, coffee, tea, burger

coffee day
starbucks

1971

Coffee, coffee beans, ice

creams, sandwitches, tea and

2000

pastries
Coffee, ice cream, muffins and

Mc

1940

pastries
Cold coffee, burger French fries

donalds
Costa

1971

Expresso Coffee, tea, chocolate

1938

pastries
Coffee, powdered coffee,

barista

coffee
nescafe

muffins, pastries, chocolates,

tea

Our Products
Our company will be dealing in the serving of 4 products. They are:
1. Expresso coffee
2. Plain Coffee
Hot coffee
Cold coffee
3. Mocha coffee
4. Rounding out the simple menu line will be pastries obtained with an outside supplier,
freshly made and delivered daily. The pastry offerings may vary with seasonality but the
primary line will muffins, breads, cookies, sandwitch and rolls.

Financial plan
Total amount required for the investment is Rs. 10 lakh (approx).
Debt: The debts has been borrowed from relatives and loans from banks. 6 lakh would be taken
from bank at the rate of interest for 9% p.a.
Equity: ownership fund (4 lakh would be invested by me ).
FINANCIAL PLAN FOR TWO-FIVE YEARS
Financial Plan: To get the business up and running, we will need to obtain financing.
The tables show annual figures. Break-even Analysis. The monthly break-even point is
approximately Rs 10 ,20,000.
Projected Profit and Loss.
The following table and charts highlight the projected profit and loss for three years.

Profit Yearly
3000000
2500000
Profit Yearly

2000000
1500000
1000000
500000
0
Year 1

Year 2

Year 3

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marketing Plan
Economics
Total size of coffee market is 500 million tonnes

Trends in Consumer Preferences

The range and variety of coffee available in malls seems to be growing day by day,
which leads to lot of impulse sales for coffee companies.
Branded coffee shakes have become more popular.
Cold drinks are becoming the substitute of coffee shakes
People prefer caf s for studying, conferences, meetings and hanging out

Barriers to entry

Huge startup costs

Ensuring good quality products to the customers
High Level of competition from the well established brands
To keep price of the product low, as it is a price sensitive market

Overcoming the barriers to entry

To overcome the barrier of huge start up costs our machinery would be taken for lease for
first few years of business.

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 Marketing of our products would be on the basis good quality and healthy products to
provide a competitive advantage.

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Product
From customers point of view, coffee is the product which shows their impulse buying
behavior. Customers are looking for low priced coffee shakes and also it should have good taste.
Positioning Statement
Hugs with mugs is a gourmet coffee lovers gem. It is truly one of a kind coffee house offering
outstanding gourmet coffees and blends, served by enthusiastic and knowledgeable baristas, in a
warm, relaxed environment. It is the place to go to visit with friends or cozy up in a quiet corner
with a good book either from the library or from one of the patrons personal E-Books.
Pricing Strategy
Hugs with mugs primarily utilizes competition based pricing. The caf does not utilize coupons
and discounts (other than opening promotion) because they believe that the most valuable
customer demographic of daily coffee consumers is not influenced by discount programs or
coupons.
Promotion and Advertising Strategy
Online Advertising hugs with mugs will advertise regularly on popular social media sites,
such as Facebook. Compared to traditional print advertising, this is a cost effective tactic that
will allow them to reach prospects in a highly targeted way (e.g., based on criteria such as age,
gender, geography, etc.).
Web Site hugs with mugs will develop a simple Web site, hugs with mugs coffeehouse.com
which will provide basic information about the business, the menu, and links to their presence on
the aforementioned social media channels.
Radio Advertising - During the first six months of operation, and during the busy holiday
shopping season, the business will advertise on local radio stations.

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Website
Hugs with mugs will have a simple website- hugs with mugs coffeehouse.com identifying its
menu items of gourmet coffees, smoothies and pastries, along with the address, map and hours of
operation. The website will also have a calendar of any upcoming events or sponsorships . The
site will also have links to their social media sites such as Facebook, Twitter, and Pinterest.

Sales Strategy
Hugs with mugs will use the following methods to increase sales revenue :
The menu will focus on the most profitable products sold. The caf will always draw customer
attention to the most profitable products.
As warranted, the caf will raise prices to bolster brand image. Prices communicate a perceived
value of a product; so if set too low, the customers might assume that the beverages are inferior
compared to the competition.
Monitor flavoring inventory Excess flavoring inventory ties up capital and valuable back room
space for storage. The caf will utilize 4-6 varieties, including sugar free offerings.
Control waste and theft audit sales and inventory reports to evaluate ingredient waste due to
inefficient preparation, returned drinks and employee consumption. Retail locations can easily
waste 20% or more of their daily sales these three key categories, which is a substantial and
unnecessary loss.
Monitor and evaluate hours of operation
Run employee sales contests The baristas are the salespeople and have a great deal of
influence over the customer ordering process. All baristas will have some form of sales and
customer service training to make each transaction active, rather than passive. Sales contests will
emphasize high margin items or cross selling

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Customers (Wholesalers and Retailers)

Ansh Marketing
Unit No. 7, CSC Pocket D, DDA Market, Sarita Vihar ,
New Delhi - 110076, Delhi
www.anshmarketing.com
08048411044

Blue Orchard Inc.

AM- 183, 2nd Floor, Shalimar Bagh ,
Delhi - 110088, Delhi
www.indiamart.com/blueorchardinc
09643007925

JPH Enterprises
No. 18/500, D D A Flats, Madangir ,
New Delhi - 110062, Delhi
www.indiamart.com/jphenterprises
08046071262

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Himalayan Leaf Pvt Ltd

B-85, 1st Floor, Udyog Vihar, Phase- 5 ,
Gurgaon - 122002, Haryana
www.himalayanleaf.com
09953363680

jeet Enterprises
Fateh Nagar ,
New Delhi - 110018, Delhi
www.indiamart.com/jeet-enterprises-delhi
08826123828

Craft House
Bangla Sahib Road ,
New Delhi - 110001, Delhi
www.indiamart.com/craft-house
011-41515250

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Competitors

Caf coffee day

Costa coffee
Mc donalds
starbucks

Niche
Our niche market would be the children and young generation as coffee is mostly liked by
children and youngsters.

Promotion

Local news paper

Local TV channel
Local radio Station
Website- www.hugs and mugs coffeehouse.com
Through pages and account on Social Networking Sites (Facebook & Twitter)

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Distribution channels
Our products would be distributed through outlets like wholesalers, retailers and our own sales
force.
Proposed Location
For our business, the proposed location would be the model town.

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Operational Plan
The product will be distributed in the restaurant by food servers. The food will be
cooked on site, except for some of the baked goods.
When a customer enters Coffee house they will be greeted by a hostess who will seat
them and provide them with menus. A server will greet them and give them water. The
server will inquire what they would like to drink. The drink order will be prepared by the
server.
The server will deliver the drinks and then take the food order if the customer is ready.
The server will take the food order, ring it up and the order will appear on the cook's
computer screen. The cook will prepare the food, in the order the tickets are given. The
cook places the order . The server must pick the food up within two minutes. The food is
placed on the table and the server will ask if there is anything else which the customer
needs. The server will check all the drinks and replenish water, ice tea and plain coffee.
The server will familiarize the customer with the operations of Coffee house. They will
explain to the customer that a number of table games are available if they wish to play.
The server will let the customer know about the reading room and present them with a
schedule of events. The server is responsible for checking on the customer in a timely
manner. This should be done in an unobtrusive manner. The server will maintain the
tables in a clean and sanitary condition. Dirty dishes and plates must be removed
immediately.
The orders will appear on the computer monitor and the cook will prepare them
according to the order given.
Cleanliness is required above all else. The servers will keep all of their work areas clean
at all times. Spills must be cleaned immediately. After each shift, servers will check the
side work chart and have it finished before they leave. The cooking area will be
maintained in a clean and sanitary manner. All areas will routinely be wiped down and
swept.

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All employees must read and be knowledgeable of health regulations and follow those
rules. Training will be provided by hugs with mugs. Hands must be washed on a routine
basis. Smoking must be prohibited
The servers will be required to present a clean appearance. The servers must be polite,
friendly, and helpful, not only to the customer but to the other staff as well. At no time
will employees be allowed to discriminate by remarks, actions or jokes.
Production
The product will be manufactured by Full Automatic Coffee Production Line (QH200), with this
system, baking the moulds, depositing, forming etc. series procedure can be achieved
automatically. It's available to depositing all shape of chocolate. Such as double color filledinside, nuts etc chocolate. Since our product are plain as well as nut are added this machine is
appropriate.
This machine can produce 100-300 litres coffee per hour. It can produce coffee of different
falvours .. By Producing Coffee in different flavours we can attract all segments of market.
The production capacity is fully automated as mentioned above, so the need of personnel is
comparative less than other semi-automatic machine.

Location
Our coffee shop will be located in rohini sec-24.

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Legal formalities:
I could get DIN (Director Identification Number) which is printed, signed, and sent to
Ministry of Corporate Affairs.
Get a TAN (Tax Account Number) for income taxes from Income Tax Departments
Assessing Office.
I must be registered Enroll with Establishment Act (State/Municipal), Shops, and Office
of Inspector.
I should also get food process order certificate from ministry of food processing
industries and also doing as business certificate required for our chocolate industry.

Personnel
The machine is fully automatic so need of personnel is less. I need skilled worker for
maintainance of ambience and serving properly that satisfies the customers to the fullest. There
would be a need of professional for checking and maintaining the quality of product.

Inventory
The basic raw material required for making coffee is coffee beans, Sugar, Full Cream Milk ,
Cocoa powder, ice cream,and Flavors.

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Management and organization

Company Name:

Owner :

hugs with mugs

amit gupta

General administration Manager : amit gupta

Job Description:
Increasing management's effectiveness by recruiting, selecting, orienting, training,
coaching, counseling, and disciplining managers
Communicating values, strategies, and objectives; assigning accountabilities
Accomplishes subsidiary objectives by establishing plans, budgets, and results
measurements; allocating resources; reviewing progress; making mid-course corrections.
Maintains quality service by establishing and enforcing organization standards.
Contributes to team effort by accomplishing related results as needed.

Finance Manager:

Divij sharma

Job Description:

providing and interpreting financial information;

monitoring and interpreting cash flows and predicting future trends;
developing financial management mechanisms that minimise financial risk;
conducting reviews and evaluations for cost-reduction opportunities;
managing a company's financial accounting, monitoring and reporting systems;
liaising with auditors to ensure annual monitoring is carried out;
managing budgets;
arranging new sources of finance for a company's debt facilities;
handles accounting

Marketing Manager : rishi mehta

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Job Description:
manage and coordinate all marketing, advertising and promotional staff and activities
conduct market research to determine market requirements for existing and future
products
analysis of customer research, current market conditions and competitor information
develop and implement marketing plans and projects for new and existing products
manage the productivity of the marketing plans and projects
monitor, review and report on all marketing activity and results
determine and manage the marketing budget
deliver marketing activity within agreed budget
develop pricing strategy
deal with media and advertising

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CRITICAL RISK

Non acceptability of the product.

Most critical is the customers' changing tastes.

High rent cost

Customers brand loyality

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EXIT STRATEGY
If the project does not run successfully I would wind it up and payback the loan by selling
machineries, equipments and tools or Company will hire a qualified business broker to sell the
business.

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