Documente Academic
Documente Profesional
Documente Cultură
Halcyon
BUSINESS PLAN
12.2.2017
Daphne Imperial
X - Congeniality
1
CHAPTER I. INTRODUCTION
1.1 Mission
Our goal is to be the coffeehouse of choice for the local community of coffee
lovers in Naga City, which include workers, visiLng tourists, and students by
We also want to make our contribuLon to the welfare of the local community by
supporLng charitable and civic acLviLes. We will support the farmers who
grow our coffee by using Fair Trade, Sustainable ProducLon and Organic products
whenever possible.
Café Halcyon also awards its business to as many local suppliers as possible,
1.2 ObjecLves
The objecLves of the business are to become the number one desLnaLon for
coffee in Naga City, to achieve sales of P10,000,000 the first fiscal year,
P13,000,000 the second fiscal year and P15,000,000 the third fiscal year, to
achieve a 15% net profit margin within the first year and 30% by FY3, to achieve a
total net profit of P4,590,000 in FY1 and P5,000,000 by FY3, to be an acLve and
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solid concept in the industry and track performance in order to begin expanding
unique quality store, a relaxing, upscale interior design, prime site selecLon with
"key influencers,” ongoing, aggressive markeLng, highly trained and friendly staff,
mulLple revenue streams including gih items, gih baskets and coffee gih/
frequency cards in addiLon to coffee, pastry, chocolates, tea, juice, water and
soh drinks, and finally, a trendy, dynamic website with online sales capability and
online adverLsing.
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CHAPTER II: COMPANY SUMMARY
Café Halcyon launches its first coffeehouse located in Magsaysay, Naga City. Café
Halcyon will offer residents and visitors of the said town a new and unique style
• Variety: No other café in the area will provide the range of coffee drinks, tea,
cocoa, juice, smoothies and other products that Café Halcyon does.
the city’s nightlife district. Café Halcyon locaLons are designed for high
At one Lme, Nokia was acknowledged as the quality producer of mobile phones
in the United States. Then other companies like Samsung and Apple started
producing more cukng edge mobile phones and Nokia fell into the background.
Café Halcyon intends to follow in the steps of Samsung and Apple for the
coffeehouse chain industry, offering a higher quality product and beQer quality
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service in an excepLonal environment. The only coffeehouse that comes close to
being as upscale as our concept in the Camarines Sur area is Infinitea, with its
The first Café Halcyon is located in Naga City. Other Café Halcyon coffeehouses
will eventually be located in other affluent markets that support the business
Café Halcyon offers a first-rate coffee product, sumptuous pastries, fresh juices,
The Café Halcyon baristas are highly trained and experienced. They know that
Café Halcyon serves only excellent and tasty coffee. We use the highest quality of
Café Halcyon’s design style is unique compared to all other coffeehouses, with an
upscale, classic look. It features stained glass decoraLons, art glassworks, Paris-
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2.1 Company Ownership
Café Halcyon is a privately owned corporaLon registered with the SecuriLes and
Start-up expenses for Café Halcyon are in line with those of other coffeehouse
build a new store locaLon. Our costs are esLmated at P17,000,000 for buildout
and P1,250,000 for the opening inventory and operaLng capital. Future stores
should cost at least P8,750,000 to build since many of the costs incurred in the
The start-up requirements (below) include P3,850,000 for short-term and long-
term assets.
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Long-term assets: P3,100,000
S h o r t - t e r m
Start-up
a s s e t s :
Requirements P750,000
Start-up Expenses
CONSTRUCTION START-UP —
Site design, architectural plan P500,000 Table
DemoliLon/ConstrucLon P1,250,000
Electrical, LighLng P600,000
Electrical, Other P500,000
Flooring/installaLon P250,000
Bathroom ConstrucLon P200,000
Plumbing P500,000
Fireplace ConstrucLon P250,000
PainLng P125,000
City permits/licenses/fees P325,000
LEGAL
AccounLng P100,000
Legal P200,000
Insurance P125,000
MARKETING
Opening markeLng/adverLsing P150,000
Graphic design for signage, menu boards P100,000
Outside Signage P75,000
Frequency Cards, Brochures P75,000
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OFFICE
Office equipment P30,000
Computer, scanner, printer P25,000
Telephones/Fax/DSL P25,000
StaLonery etc. P50,000
Gih item displays (3) P75,000
APPLIANCES/OTHERS
PreparaLon equipment P50,000
Dishwasher P175,000
Blenders (3) P100,000
Microwave P25,000
Panini maker P35,000
Storage racks P50,000
Music system P40,000
Food display case P300,000
Storage room shelving P50,000
Bulk bean grinder P35,000
Sinks (2), prep counters P60,000
Menu board construcLon P125,000
Cups/Lids (50,000) P700,000
Total Start-up Expenses P7,350,000
Start-up Assets
Cash Required P75,000
Start-up Inventory P1,250,000
Other Current Assets P750,000
Long-term Assets P3,100,000
Total Assets P5,175,000
Café Halcyon sells high-quality specialty coffee drinks, tea, juice, soh drinks,
pastries, chocolates, and even gih items. Despite being an upscale coffeehouse,
our prices are in line with leading chains around the country.
3.1 Vendors
Coffee roasLng is provided by Jack and the Beans Coffee Company in Davao City.
Pastries are provided by local companies in the Metro Naga area such as
Chocolates and cocoa are from the Natural Cocoa Farm, Pili, Naga City.
Soh drinks are provided by Coca Cola Company, Naga City Branch.
Gih items are supplied by various bouLques in Naga City, such as Simplicichic and
Style Hub.
The Café Halcyon menu sets us apart from other coffeehouses, giving us a
compeLLve edge.
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• We offer six different drink groups—coffee, tea, sodas, smoothies, juice and
provide more variety than our compeLtors while simultaneously making the
• We take advantage of the immense popularity of flavored drinks and Chai tea
• We are the only coffeehouse that has a wide range of gourmet hot cocoa
drinks.
Prices have been determined aher a thorough analysis of all food costs for every
item in each drink. In some cases, an average price has been calculated and
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applied to similar drinks in order to prevent the menu from becoming confusing
to costumers.
COFFEE
All coffee drinks are brewed with the finest Philippine specialty coffee.
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FLAVORED ESPRESSOS
Name DescripLon
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
Peppermint Rich chocolate and refreshing peppermint. Topped with
Cocoa whipped cream.
OvalJne OvalLne Chocolate Malt and milk.
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SMOOTHIES
Name DescripLon
The Espresso
Chocolate A chocolate malt with a secret energy boost.
Malt
The Double
Dutch
Super chocolatey!
Chocolate
Smoothie
The Mocha
An all-Lme favorite.
Smoothie
The Vanilla
Rich natural vanilla flavor.
Smoothie
3.2.2. Teas
ICED TEAS
Classic Iced Tea, refreshing and sweet. P45 Small, P60 Medium, P75 Large
HOT TEA
• Earl Grey
• Peppermint
• Chamomile
• Lemon
• Tropical Green
• Darjeeling
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3.2.3. Juices
Item Price
Parisian Swirl Cheesecake P100
Fresh scones, hot from the oven. P125
Bagels P115
Brownies P100
Blueberry Muffins P90
Croissants P100
Black Forest Cake P200
Chocolate Chip Cookies $1.75
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Chapter IV: Market Analysis Summary
recepLve and steadily growing market segment which isthe specialty coffee
retail business.
categories are facing poor sales, negaLve balance sheets and even
It's clear that people’s love for good coffee conLnues prevails during both
Café Halcyon is located at what is arguably one of the best locaLons for a
coffeehouse in Naga City. It is in the heart of the tourist and business district,
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adjacent to many fine restaurants, near the downtown area, and easily
2. Tourists
4. Students
These groups are all potenLally strong customer segments. The benefit
throughout the year. For example, while tourism is strong all year long in
Naga, it peaks during the summer months and during the Peñafrancia FesLval
summer. The other customer segments (local residents and local business)
By appealing to several market segments, Café Halcyon does not become too
school months. They must also market themselves anew each year to the
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incoming students. Café Halcyon will avoid these business peaks and valleys
• Affluent locals. Within the area of Naga City are some of the most
• Tourists. Thousands of tourists visit Naga City every year. Most will pass
devoLon to the Lady of Peñafrancia and for the different sights and
the heart of the city. It’s near the downtown area and not far from the
major residenLal areas, schools, and from Panganiban Drive which gets a
Naga City Science High School, Hope ChrisLan School, and Naga City
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Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
PotenDal Customers Growth CAGR
Local residents 2% 75,000 76,500 78,030 79,590 81,181 2.00%
Tourists 5% 100,000 105,000 110,250 115,763 121,551 5.00%
Travelers on US 66 5% 20,000 21,000 22,050 23,153 24,311 5.00%
Students 1% 40,000 40,400 40,804 41,212 41,624 1.00%
Local businesses 1% 20,000 20,200 20,402 20,606 20,812 1.00%
Total 3.22% 255,000 263,100 271,536 280,324 289,479 3.22%
Local residents
Tourists
Students
Local business
11%
22%
11%
56%
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4.2 Target Market Segment Strategy
Local Residents. More than 195,000 people inhabit the area of Naga City
Café Halcyon for most of our potenLal local customers. Local customers form
the loyal core of our business. We will reach out to them through local
Tourists. Naga City has excellent year-round tourist acLvity. Over a million
people will visit the area during the month of September alone because of
the Peñafrancia FesLval. While hotels are virtually sold out during the
summer months and during the week of the fesLval, tourism all year is
excepLonally strong. This is due in large part to the pleasantness of the city,
weekend or day-trip visitors from the greater Metro Naga area and an
We will target these potenLal customers with ads in local tourism guides.
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Local businesses. Many local businesses are near the area of Café Halcyon.
SM City Naga, the prime shopping center of Naga, is only one jeep ride away.
The City Hall is also very close. Café Halcyon is in the heart of the shopping
nearby colleges and high schools. Students, most of whom are under the
drinking age, have few places they can go to meet their friends. Coffeehouses
To reach students we offer special student discount cards, pass out free
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• Students bring an energy and youth to the coffeehouse
The specialty retail coffee business as we know it today began in 1982 aher
Howard Schultz purchased the Starbucks name and began the expansion of
Coffeehouses in America have existed as early as since the 1600s, and the
coffeehouse concept is more than 400 years old. In the United States, even as
business. Today, there are more than 10,000 coffeehouses in the Philippines.
However, compared with Italy, which has 200,000 espresso bars and
coffeehouses, there is sLll much room for growth. The Specialty Coffee
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Retailers AssociaJon believes the market has not approached maturity and,
as yet, no coffee chain has differenLated itself significantly from the others.
While overall coffee sales have not grown significantly in recent years, the
year. The low food cost of coffee drinks, relaLvely modest investment capital
coffeehouse industry.
There are 108 million coffee drinkers in the United States, according to the
P10,000 on coffee annually, and drink an average 3.1 cups daily. Since the
year 1990 up to year 2016, coffee consumpLon has increased from 710 bags
coffee had been consumed in the Philippines. It's easy to see why coffee is
drinks in the United States. Now they account for more than half of all
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Starbucks, once known for quality and customer service, has recently come
under aQack by customers and business commentators for becoming too big.
Their size (6,300 stores worldwide) is the reason why Starbucks is now ohen
a "fast food" purveyor of coffee, it leaves the market open for a smaller, more
nimble compeLtor like Café Halcyon, where quality and service are
paramount.
Leaders in the specialty coffee chain category in the United States include:
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Caribou Coffee (260 stores). Second largest all company-owned chain.
Tully's (103 stores). The third largest company-owned chain. Another SeaQle
company. The only coffeehouse chain that has not experienced excellent
growth every year; business.com cites poor management as the reason. New
Coffee Bean & Tea Leaf (210 stores). Oldest privately held specialty coffee
Peet's (58 stores) One of the few successful IPO's in 2001. 58% of
revenues come from sales of whole coffee beans. Gross profit last year was
49.5%.
Gloria Jean's (291 stores, 195 in U.S.). Only 19 stores are company-owned.
coffeehouse in 1982. Owns the Gloria Jean and Coffee People chain. 386
outlets total and 370 wholesale accounts. Although they serve an excellent
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New World Coffee (33 stores). Mostly concentrated in the New Jersey/New
York area. All but three are franchises. A division of ManhaQan Bagel.
It's a Grind (86 stores). Fast-growing chain that began in Long Beach,
Southern California and Las Vegas. Company reported $12 million in revenue
Dunkin' Donuts More than 800 outlets serving a surprisingly good coffee.
AssociaLon. 2002.
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Local CompeDDon
Surprisingly, the global leading coffeehouse chain, Starbucks, has only one
mediocre store in the Naga City area. Its single store in the city is also at an
excellent locaLon on Magsaysay, but the store is unaQracLve, small, and lacks
There are many other coffeehouses in Naga City, such as Cafe Libro, KopiroL,
Travel Cafe, and Cafe Chicago, but none of these coffeehouses are chains or
mulLple locaLons that quickly grew and sprung up, comfy and beauLful
interiors, but the Infinitea lacks a more varied menu with only tea drinks and
"McDonalds" of the specialty coffee industry. Other major chains are Infinitea
and cafes like Travel Cafe, KopiroL and etc. All of these chains are considered
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FACT: The coffeehouse business has grown every year since 1982.
Despite major economic recessions, and social issues and unrest, the
specialty coffee industry has grown every year. One industry observer said,
"When Lmes are good, the coffeehouse industry is great. And when Lmes are
bad, the coffeehouse industry is great.” People’s love for good coffee is
stronger than ever and increasing in size faster than any other industry.
Lifestyle factors converge to make the coffee industry strong at all Lmes. The
Young people under the legal drinking age are one of the fastest-growing
assures a diverse, recepLve and sophisLcated customer base now and in the
future.
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Older adults also enjoy the fact that for the relaLvely modest price of a cup of
coffee and snack, they can meet with their friends, relax, or work. Instead of
going to a bar and paying for an alcoholic drink or a restaurant where a meal
usually comes with a hehy price tag, the coffeehouse is an inLmate yet
inexpensive venue.
measures.
years, coffee drinking has become an all-day acLvity. Even late at night, many
coffeehouses are packed with patrons. It's not unusual for a well-located
and gih items are added to the menu, the average customer expenditure has
Café Halcyon expects that guest checks will average about P225.
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Chapter V: Strategy and ImplementaDon Summary
service. Our promise is in our locaLon, the products we sell, the people we
Strategic AssumpLons:
events
• Café Halcyon offers several unique advantages over all other coffeehouses
• Our current locaLon can arguably be considered the best in the market
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• An ambiance superior to all other coffeehouses in the area with upscale
entertainment.
coffee drinks, tea, cocoa, and juice. We have several drink opLons for
people who don't drink coffee: tea, cocoa, juice, and smoothies.
• Our Internet website will include sales of whole coffee beans, tea,
program that will help us establish profitability quickly and set the stage for
conLnual growth.
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5.2.1. Launch MarkeLng
they need to sustain and grow their customer base. They spend less than 1%
yet, the major players have not been taken over by sophisLcated companies
share.
awareness and not wait for word-of-mouth. We are also building customer
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Launch MarkeLng
Launch markeLng will promote awareness, build instant traffic and establish
• Public relaLons/publicity
• Community involvement
• Sampling
• Superior locaLon
Public RelaLons
A strong public relaLons and publicity program uses as its primary hook these
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The goal of the PR/publicity is to achieve local market awareness and
establish the brand on a wider scale to set the stage for future expansion.
Local market awareness is vital because more than 50% of sales will come
created by the media buzz and familiarizing people with our brand name. It
Local Media
• Bicol Mail
• Local blogs
• NX Radio
• Manila BulleLn
• Philippine Inquirer
• Rappler
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NaLonal Broadcast Media
Website
• Gih baskets
• Gih items
• A monthly newsleQer
• Store hours
• Special events
• Coffee recipes
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Trend-seQers
Naga City and the Metro Naga area are home to thousands of individuals
and businesses.
Key individuals will be targeted with gih baskets from Café Halcyon
containing samples of our products to enLce them to visit and talk about us
Design style
The interior design of Café Halcyon is unlike any other coffeehouse chain.
While there are some upscale designs, they are all of the modern Italian or
all others.
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Gih Items
We carry a wide variety of quality gih items, including gih baskets. Gih basket
to project at this Lme, they have not been included in the financial
computaLons.
Community Involvement
We will make ourselves an integral part of the local community. This will
LocaLon
The locaLon of the first Café Halcyon in Naga is a prototype of future sites.
We will build Café Halcyon coffeehouses in the best locaLons possible, as this
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Site selecLon criteria include:
• Outside dining
Other sites that meet these criteria include Pili, Legazpi City, Cebu City,
ExcepLons will be made for some sites if they are deemed to be potenLally
extremely profitable.
Outside Dining
The café experience is indelibly linked to its European origins, where al fresco
dining is a way of life. Naga City has not yet embraced sidewalk dining, but it
can become one of the growing addiLons to the Filipino dining scene.
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Sampling
We will promote our program of gih cards and customer frequency cards to
drive business and sLmulate cash flow. Industry records indicate that 25% -
40% of all gih card amounts go unused. Also, gih cards have proven to be a
popular holiday item accounLng for more than 5% of total sales during
December.
Frequency cards rewarding the repeat customer with a free drink aher a
specified number of visits are popular and proven methods to forge customer
loyalty.
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Discount cards are used to build goodwill among specific groups such as the
By tying in with our computerized sales and inventory system, we will be able
The Future
The number of Café Halcyon locaLons could easily reach 20-25 within five
years. While the financials in this Business Plan only address the Naga City
projected profitability.
With ten coffeehouses, the gross revenues, when fully realized, would be
more than P500 million using the third year performance figures. Even
factoring in the cost of addiLonal staff and other resources, a 10-store chain
building significant valuaLon. A 25-store chain would easily top $125 million
in annual profits.
the blueprint for future efficient expansion. Our new Mount Hill locaLon will
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incorporate the knowledge we gain with our first store as well as new
• Staff salaries that are 10% above the industry average in order to aQract
make customers feel welcome and appreciated and constant staff training
• Sell gih cards and frequency cards and offer discounts to key groups
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• Conduct a consistent, aggressive markeLng program
funcLons
We are modestly forecasLng an average of 300 customers per day during the
first year with an average guest check expenditure for all items of P205. This
we will charge for some of our items. Total cost of sales is approximately 25%.
We expect growth to occur across all categories at about 10% annually as the
business becomes more established and well-known, reaching more than 400
customers per day within a year and more than 500 within three years. These
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Coffee drinks
Tea, smoothies, juice
Pastries, snack items
Events
Coffee service to businesses
Online sales
Gift items
Year 1
Year 2
Year 3
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Sales Forecast
Year 1 Year 2 Year 3
Sales
Coffee drinks P13,255,050 P17,231,550 P22,401,050
Tea, smoothies, juice P8,350,350 P10,855,450 P14,112,050
Pastries, snack items P7,706,300 P10,018,200 P13,023,650
Events P0 P0 P0
Coffee service to businesses P165,000 P181,500 P199,650
Online sales P425,000 P513,250 P664,050
Gih items P322,000 P386,400 P463,700
Total Sales P30,223,700 P39,186,350 P50,864,150
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The company will invest residual profits into financial markets or real estate.
• The 20-year record of posiLve growth for specialty coffee drinking will
conLnue at a healthy rate. The Specialty Coffee AssociaLon says that the
market is far from saturaLon and will not reach maturity unLl at least
2019.
events will conLnue. Despite social issues, the coffeehouse industry has
shown strong growth every year for the past two decades.
• The quality of naLonal chains will remain the same or decline slightly
• 15% minimum sales growth rate over the next three years as Café
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General AssumpLons
General AssumpJons
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 3.00% 3.00% 3.00%
Long-term Interest Rate 3.00% 3.00% 3.00%
Tax Rate 20.00% 20.00% 20.00%
A break-even analysis table has been completed on the basis of average costs
and prices. With fixed costs of P1,320,000 and P225 average sale, we need
Break-even Analysis
AssumpLons:
Average Percent Variable Cost 23%
EsDmated Monthly Fixed Cost P1,320,000
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6.3 Projected Profit and Loss
We project high net profits starLng in the first year. Our growth rate is based
of 15% annually for the first three years before leveling off at the 800-900
First fiscal year gross revenues are expected to exceed P10,000,000 and aher-
Our margins are very good. This is due in large part to the low direct cost of
Higher staff salaries, owner/operator salaries, markeLng costs and rent for a
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