PRT3440-001

Kaiyue Kang (Gabriella)

Business Plan

Mission, Vision, Values, Goals & Objectives

My business idea is to operate a bookstore cafe. It will be a full profit business, and the
business structure will be Sole Proprietorship. It will not only be a cafe but includes books,
magazines, table games, and video games. I would like it become a new trend of hanging out
places for young people.

Business values: Teamwork

Communication
Responsibility
Respect
Creativity
Customer Relationships

Mission: The mission of my bookstore cafe is to become a place and a new trend of hanging
out places, and the first and most popular choice for young people where they can enjoy their
coffee time while reading, chatting or playing games with friends.

Vision: The vision of my bookstore cafe is to create a fun and enjoyable place for young
people, and to become a new entertainment trend for young people.

Goal 1: To successfully complete the business plan and make it effective by the end of this
semester.
Objectives: 1. By Sep.28th, complete the draft for section: Mission, Vision, Values, and
Goals & Objectives.
a. Turn in the first draft by Sep.28th.
b. Revise it after getting feedback, and submit with Market Analysis.
2. By Oct.5th, complete the draft for section: Market Analysis.
a. Turn in the first draft by Oct.5th.
b. Revise it after getting feedback, and submit with Operations Plan.
3. By Oct.12th, complete the draft for section: Operations Plan.
a. Turn in the first draft by Oct.12th.
b. Revise it after getting feedback, and submit with Marketing and PR.
4. By Oct. 26th, complete the draft for section: Marketing and PR.
a. Turn in the first draft by Oct.26th.
b. Revise it after getting feedback, and submit with Risk Management Plan.
5. By Nov.2nd, complete the draft for section: Risk Management Plan.
a. Turn in the first draft by Nov.2nd.
b. Revise it after getting feedback, and submit with Business Plan Draft.
 6. By Nov. 16th, complete the draft for section: Business Plan Draft.
a. Turn in the Business Plan Draft by Nov.16th.
b. Revise it after getting feedback.
7. By Dec. 14th, complete the Final Business Plan, and make sure to turn it in
before Dec. 15th at 11:59 p.m.
Goal 2: To get feedbacks on drafts for all the sections and revise them after getting feedbacks
form the instructor.
Objectives: 1. Turn in all the files before the due date, and send e-mail to the instructor to get
feedbacks.
2. After getting feedbacks, revise the draft based on the feedbacks as soon as
possible.
Goal 3: To have a completed business plan to put in my portfolio by the end of this semester.
Objectives: 1. Complete the business section by section, and revise them to make the
business plan more effective.
2. Complete the whole business plan at the end of this semester, and then put in
in my portfolio and put in on my electronic portfolio website as well.

Market Analysis
Industry description and outlook
Cafe industry is a really popular industry not only in the U.S. but also in the world. It has
grown a lot since these years. There are many different famous brands and different styles of
cafes as well. The growth of this industry is based on the changing lifestyles of young
population, the rising spending on beverages and the big number of middle classes.
According to the Coffee Statistics Report 2012 Edition: there are about 83% adults drink
coffees in the U.S., and the coffee consumption represents 75% of all caffeine absorbed in
this country. There is an annual growth rate of 7% of coffee shops and this represents the
fastest growing segment in the food service industry.
The outlook of the cage industry is growing and extending more in the future. There will be
more theme coffee shops than regular coffee shops because they will be more attractive to
customers and will become a better choice for customers because there will be more things
they can do in theme coffee shops than that in regular coffee shops.

Information about my target market

My target market is the population of young people aged from 18 to 29. This age group
includes people who will hang out with friends the most and they like new styles and new
things. As my business plan is to operate a bookstore cafe, I think it will be more attractive to
this age group.
Additionally, this age group is one that has more stresses in the society. These people receive
stresses from their schools, from their jobs and may also from their families. They always
need a place to take a rest or talk with friends to express their emotions, and an appropriate
with an eased atmosphere to hang out is kind of a very important thing in their lives.
Therefore, this age group will be my main target market.

Distinguishing characteristics
Distinguishing characteristics of 18 to 29 age group:
Physical:
Have good condition of physical health, and have desire to participate various activities.
Social:
l Socialize with different people a lot.
l Usually have more complicated social relationships than other age group.
l Desire to meet more people and communicate with others.
Emotional:
l Desire respect.
l Want to confident with their decisions and get others’ supports.
l Receive a lot of stresses.
l Desire to have someone could understand their feelings.
l Want to try new things and accept them quickly.
Intellectual:
l Have abilities to make decisions by themselves and give their comments in different
situations.
l Have the ability to consider things from various perspectives.
l Know what they want and what will benefit them the most.
l Have ability to make better choices.
The age group from 18 to 29 would like to try something new and creative, and if they like
the new style, they will be willing to spend money on it. If the place meets their interests,
they will mostly spend more time and money in that place as well. It is very important to
have my bookstore cafe meets these interests and needs from this age group.

Size of the primary target market

I would like to start my business here in Salt Lake City, and the population of my target
market age group will be approximately 52065 in 2015. The population tends to be younger,
therefore, I will have a larger size of my target market in the future.
There 40% of 18-24 year olds are drinking coffee each day and 54% age 25-39 reported
drinking coffee each day, and the average sales of coffee and tea at restaurant and drinking
places is estimated to total $18.7 billion in 2012. I can tell this age group spends a lot of
money on coffee and they are a very potential market for my business.

Market share
The population was 191, 180 in Salt Lake City in 2013, and there are 338 coffee shops in Salt
Lake City.
As this bookstore unlike other famous coffee shop brand, the market share I think I want to
gain will be 20% of the potential market, which will be around 40,000 people. Because there
are a lot of famous brands and I estimate there are 50% of the market will stick with the
famous brands they always enjoy, and this is also because they trust these brands a lot and
they used to go to these coffee shops and they may not want to change. There will also be 15%
of the market are people who do not really care what kind of coffee shops and brands, and
they just get coffee whenever and wherever they want to. The rest 15% of the market may be
someone who will like my bookstore cafe when they come the first time but they do not have
time or usually spend time in coffee shops and they may not come again, and I think this part
cannot be counted as gained market share.

Pricing and gross margin targets

My bookstore cafe will have an average price for all usual kinds of coffee, and I will have
some seasonal special products with flexible pricing system, which means the prices are
depends on the costs of the special materials in that time.
The average of coffee shop gross margin is 85%, but mine is a bookstore coffee shop, there
will be books, magazines, table games and video games etc. available in the cafe. As these
are more profitable items, my gross margin targets will be 85% to 90%.
I will develop a customer loyalty discounts for customers who always come back and bring
new friends. There are some special discounts based on festivals and special events as well. I
would like to create more interesting and attractive events to involve more potential customer
in my business.

Competitive Analysis
My main competitions are famous brands coffee shops like Starbucks, and they have bigger
market share. Their strengths are they have brands supports in order to have bigger places
and bigger market than my business, they have stable market because they have run the
business for a long time, and they have more resources than me. But their weaknesses are
they have lacks of creativity because they used to the business style they are using, they
become less interesting and less attractive for young people who want to experience
something new and their prices are a littler expensive because the famous brands and these
prices are less acceptable for younger people from my target market. My competitors’ target
markets are usually larger than mine, but my target market is still a very important part for
them because their higher consumption levels. I think my opportunity to enter the market is
that my bookstore cafe will bring something different into the market, and gives customers a
new feeling about coffee shops. It can be a place with more creativity and interesting
activities, and these will be the most attractive point of my business. I think some barriers are
how to break people’s habits of going to those famous brands coffee shops they used to go
and how to build trust between customers and my business.

Operations Plan
Organizational Structure
The organizational structure of my business will be a pre-bureaucratic structure because it is
a small organization and it is a new business. This organizational structure will help me
control the business and the growth and development of this business.
Here is the details of the my organizational structure:
l General Manager:
I will be the general manager of the bookstore cafe, and the responsibilities of the general are
to control the business, monitor different parts of the business, make key decisions and make
sure the business meet the growth and development goals.
l Assistant manager:
A hired employee who will be responsible for providing regular services to customers and
deal with any problems occur during the daily serving processes. He or she will also work as
assistance to the general manager and complete the task the general gives to him or her.
l Marketing and Accounting Coordinator:
A hired employee who will be responsible for making specific marketing plans for the
business and making the financial reports for the business. He or she needs to report to the
general manager about the marketing plans and financial situations of the business.
l Full time and Part time staff (3-5):
Hired employees who will be responsible for these positions: bartenders, servers and
dishwashers.

Ownership Information
l Name of owner: Kaiyue Kang
l Percentage ownership: 100%
l Extent of involvement with the company: General Manager
l Form of ownership: Common stock
l Management Profiles:
Key people in the company:
1. Name: Kaiyue Kang
Position: General manager
Primary responsibilities and authority: Be responsible for the whole business, make
important decisions, control and monitor the business in order to gain its goals and make
sure it develop as expected.
Education: Hospitality degree.
Unique experience and skills: Relevant management experiences, great
communication skills and efficient problem solving abilities.
Special skills: Korean and fluent Mandarin。
2. Position: Assistant manager
Primary responsibilities and authority: Be responsible for providing great services to
all customers, manage all the full time and part time staff, and deal with problems occur
during the serving processes.
Education: Management degree.
Unique experience and skills: Relevant management experiences, be able to work
with the general manager as an assistant and complete the tasks given by the general
manager.
3. Position: Marketing and accounting coordinator
Primary responsibilities and authority: Be responsible for the marketing and
accounting parts of the business. Be able to make marketing plans and strategies and
financial reports as well.
Education: Accounting or marketing degree.
Unique experience and skills: Relevant experiences, familiar with accounting and
marketing processes in this industry.
The Assistant Manager of my business will be able to work with me as my assistant, and
if I am not there, he or she needs to be able to make decisions instead of me and manage
all the staff. The Marketing and Accounting Coordinator of my business will be able to
complete the marketing and accounting jobs of my business and report to me regularly.
They will work with me very close in order to help me make right decisions for the
company and revise our plans and goals whenever we need to.

Marketing and PR
Market Plan
Mission Statement:
To become a place and a new trend of hanging out place, and the first and most popular
choice for young people where they can enjoy their coffee time while reading, chatting
or playing games with friends.
Products and services:
a. The products of the bookstore cafe will be different kinds of coffee, various kinds of
tea, pastries, books, and some other items like notebooks, pens, and mugs. However, the
main products of the bookstore cafe will be the experiences and services.
We want our customers all enjoy their experiences in the bookstore cafe and satisfied
with the services they receive in the cafe.
b. The bookstore cafe will cost between $200,000 and $375,000 to set up.
c. The price of our products and services will be 20% higher than the average price
because we provide books, magazines, table games and video games for our
customers.
Market
a. My target market is the population of young people aged from 18 to 29. This age
group includes people who will hang out with friends the most and they like new
styles and new things. As my business plan is to operate a bookstore cafe, I think it
will be more attractive to this age group.
b. My customers will be mainly the local customers.
c. My target market group is also the most stressful group in the society. These people
receive stresses from their schools, from their jobs and may also from their families.
They always need a place to take a rest or talk with friends to express their emotions,
and an appropriate with an eased atmosphere to hang out is kind of a very important
thing in their lives.
d. The population of my target market age group will be approximately 52065 in 2015.
The population tends to be younger, therefore, I will have a larger size of my target
market in the future.
e. There will be some promotional activities concentrated in specific market like who
introduce his or her friends to the bookstore can get a discount coupon for next visit.
Competition
a. My main competitions are famous brands coffee shops like Starbucks, and they have
bigger market share.
b. Their strengths are they have brands supports in order to have bigger places and
bigger market than my business, they have stable market because they have run the
business for a long time, and they have more resources than me. But their
weaknesses are they have lacks of creativity because they used to the business style
they are using, they become less interesting and less attractive for young people who
want to experience something new and their prices are a littler expensive because
the famous brands and these prices are less acceptable for younger people from my
target market. My competitors’ target markets are usually larger than mine, but my
target market is still a very important part for them because their higher
consumption levels. I think my opportunity to enter the market is that my bookstore
cafe will bring something different into the market, and gives customers a new
feeling about coffee shops. It can be a place with more creativity and interesting
activities, and these will be the most attractive point of my business. I think some
barriers are how to break people’s habits of going to those famous brands coffee
shops they used to go and how to build trust between customers and my business.
c. My competitors may use some more completed marketing techniques that cost more
because they have famous brands supports. They have professional marketing team
and systematical marketing plans. They have great advertisements and they have a
stable market, which can be a guarantee for them. As my business just starts, I will
use some basic marketing techniques like posters, flyers, and the Internet. I think the
Internet will be our main marketing technique and it will be the most effective one
for our business.
Growth Strategy
a. Open the second shop in five year.
b. Have a stable growth of $20,000 in sales in the first three years.
c. Have a growth of $25,000 and $30,000 in the forth and fifth year by opening the
second shop and planning more special events and promotion activities.
Pricing
a. Our products will be all kinds of coffee, tea, various pastries, and we will also
provide video games, different kinds of table games and other special small items
for out customers. Our prices of all coffee products will be 20% higher than the
prices in Starbucks, because we provide more than a regular coffee shop. Our
magazines, book, table games and video games will be free for customers who
purchase our coffee.
 Here is our price list for coffee product:
ITEM TALL GRANDE VENTI
Fresh Brewed $ 2.00 $ 2.40 $ 2.70
Coffee
Caffe Latte $ 3.30 $ 4.40 $ 4.75
Caffe Mocha $ 3.90 $ 5.00 $ 5.35
White Chocolate $ 4.25 $ 5.25 $ 5.60
Mocha
Caramel Macchiato $ 4.25 $ 5.25 $ 5.60
Coffee Frap $ 3.55 $ 4.50 $ 5.00
Mocha Frap $ 4.50 $ 5.00 $ 5.70
Caramel Frap $ 4.50 $ 5.00 $ 5.70
Iced Coffee $ 2.35 $ 2.95 $ 3.55
Iced Mocha $ 4.50 $ 5.35 $ 5.95
Iced Caramel $ 4.40 $ 5.00 $ 5.70
Macchiato
Hot Chocolate $ 2.75 $ 3.05 $ 3.35

b. Our prices will be higher but we provide “added value” to our products and services.
all the customers will be able to enjoy all the books, magazines, various table games
and video games we provide. We provide the special experiences to our customers,
which they may have not experienced in other coffee shops. Our bookstore cafe is
more than a coffee shop, it is a place people can hang out with friend, play games
together, or even people just want to escape from their busy and stressful daily lives
and find a quiet place to enjoy their real lives.

Promotion Mix
a. We may ask some ad agencies to design our logo, flyers and posters.
b. The media we use the most will be the Internet, because our target market is a
population who use the Internet a lot.
c. Some potential public relations activities will be a business opening, we will also
have some table games and video games competitions. During festivals, we will
have different theme parties and we will invite some bands for some special
activities.
Action Plan
a. We will create a website and use electronic marketing as our main market strategy，
and we will upload our promotion activities and special events on our website.
We will also use flyers and posters to let more people know about our business.
b. The most important marketing strategy is e-marketing (website), and then our
promotion activities and special events, and at last are the flyers and posters.
Production
Our production and services are determined to meet the demands of entertainment and
relaxation of our target market, and make our customers enjoy their experiences in the
bookstore cafe.
Summary
This marketing plan defines our main product will be our services and guest
experiences. We will provide the most satisfied services for our target market based on
the market research and make sure they have great experiences in the bookstore cafe.
Our prices and promotion activities and special events will be updated depends on
different situations of the target market. Our purpose is to deliver satisfied guest
services and make sure all the customers enjoy their experiences.

Public Relations
The public relations strategies of my business will be get our customers involved in our
business, create special events and various promotion activities to attract more people
from our target market. I would like all of our guests feel they are a part of the business
during their experiences. We will post our new events and activities on our website,
and also get the website linked to some social website like Twitter, Facebook and
Pinterest in order to reach more people.
I would like to make our public relations become potential networks for my business,
which make my business be able to reach more people and attract more potential
customers as well. I think it will be a great opportunity to expend my business through
public relations, and we can find more opportunities of partnerships through public
relations as well. Therefore, public relations are a very important part for my business,
and it will help my business reach our goals effectively.

Risk Management Plan

Internal Risks
Human Risks:
l Illness:
Short term: there will be some part-time employees work for the bookstore cafe, if
one employee is ill, we will let a part-time employee work for his or her shaft.
Long term: if an employee has a serious illness, we may consider of hiring another
one to instead.
l Work related injuries: we will make sure every employee has health insurance,
and we will be responsible for all the related injuries. There will also have safety
training in the staff orientation.
l Theft and fraud:
Product and inventory theft: any employee finds the product and inventory theft,
should report to the manager immediately, if the manager value the theft is a
serious one, then should call the police in time.
Time sheet fraud: either the Assistant Manager or me will be monitoring the time
 sheet every day in order to prevent time sheet fraud.
Accounting and cash fraud: there will be a numbered copy of every single sale,
and the accounting coordinator will check all the copies daily. There will also be a
document records how much cash in the cashier desk and I will sign the document
every day.
Food Safety Risks:
l All the employees are required to have a food handler certificate to prevent food
safety issues.
l All the foods and drinks making processes should follow strict procedures to
make sure all the foods and drinks we provide to customers are safe.
Equipment and Information Technology Risks:
l Every employee will be trained to be responsible for all the equipment they will
use during the working period, and if they find any problem of the equipment,
they should report to the manager immediately and call for maintenance.
l There will be an equipment checklist to fill out every day, and there will be an all
equipment check every quarter.

External Risks
Loss of customers:
l We will have different special activities to build customers loyalty in order to
decrease the loss of customers.
Loss of employee:
l We have specific rules to protect all the employees’ rights, and we will try to
build good relationships with employees. However, we still have plans to deal
with loss of employee like cross-training and hire new staffs.
Market Changes:
l Decrease in sales prices: we will have some special events and promotions to
increase total sales.
l Increase in vendor costs/ Fixed cost changes: we will have flexible pricing system
to change our prices of products in order to meet our budget.
In order to analyze different risks our bookstore cafe has, I will have monthly meeting
with our Assistant Manager and Marketing and Accounting Coordinator for risk
analyzing. In this meeting, we will analyze the risks our business has for that period,
and discuss with each other for the most appropriate problem-solving methods in
various situations. We will also keep updating our risk management plan in order to
monitor the business and make sure we have plans to make the business run well in
different situations.

Business Insurance
Type of business insurance: Product Liability Insurance.
Our business insurance type will be Product Liability Insurance, and it will protect all
of our products’ safety.
Insurances List:
Commercial general liability insurance
Commercial property insurance
Food spoilage insurance
Workers’ compensation insurance
Commercial auto insurance

Budget: The budget of insurance will be around $150 per month.