BUSINESS PLAN DEVELOPMENT

(PAPER-302)

ON

THE CAFE HOUSE

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT FOR THE DEGREE

OF

MASTER OF BUSINESS ADMINISTRATION

PREPARED BY

ROLL- PG/VUOAP02/MBA-IIIS-363

REGISTRATION No- VP225040928 of 2022-2023

MAJOR- FINANCE

MINOR- MARKETING

SUBMITTED TO

EASTERN INSTITUTE FOR INTEGRATED LEARNING IN

MANAGEMENT, KOLKATA

AFFILIATED TO

VIDYASAGAR UNIVERSITY

DECEMBER, 2023
 Executive Summary
The Cafe House coffee bar is determined to become a daily necessity for local coffee addicts, a
place to dream of as you try to escape the daily stresses of life and just a comfortable place to
meet your friends or to read a book, all in one. With the growing demand for high-quality
gourmet coffee and great service, The Cafe House will capitalize on its proximity to the Law and
Science College campus of Ballygunge to build a core group of repeat customers. The Cafe
House will offer its customers the best prepared coffee in the area that will be complimented
with pastries, as well as free books that its customers can read to enjoy their visit.

The target market of The Cafe House are college students and office workers near Hazra Law
College campus of Ballygunge.

The company will operate a 900 square foot coffee bar within a walking distance from the Law
and Science College campus. The owners have secured this location through a three-year lease
with an option for extending. They have also provided Rs.7,00,000 of the required Rs.8,50,000
start-up funds. The remaining capital will be obtained through bank loans.

The company is expected to grow sales revenue from Rs.29,20,000 in FY2024 to Rs.35,33,200
in three years.
 INDEX

SL. NO. Content Page No.

1 Company Description and Synopsis 1-2

2 Market Overview 3-4

3 Customer Analysis 5

4 Product Overview 6

5 Business Model 7

6 Revenue Model 8

7 Competitive and SWOT Analysis 9-10

8 Marketing Plan 11-14

9 Management Team 15

10 Fundings and Financials 16-23

11 Risk Assessment 24

12 Conclusion 25
 Company Description and Synopsis
The Cafe House coffee bar is determined to become a daily necessity for local coffee addicts, a
place to dream of as you try to escape the daily stresses of life and just a comfortable place to
meet your friends or to read a book, all in one. The company will also provide pastries and
snacks along with coffee. As there are very few number of coffee bar in that area, The Cafe
House will utilizing this situation to establish itself in the market.

The Cafe House, an Indian limited liability company, sells coffee, other beverages and snacks in
its 900 square feet premium coffee bar located near the Law and Science college campus. The
Cafe House’s major investor is Adarsh Kumar Singh who owns 100% share of the company.

Company Ownership

The Cafe House is registered as a limited liability company in the state of West Bengal, Kolkata.
Mr. Adarsh Kumar Singh owns the total company.

Mission

The Cafe House’s objectives for the first year of operations are:

 Become selected as the “Best New coffee bar in the area” by the locals.
 Turn in profits from the first year of operations.
 Maintain at least 50% gross profit margin.

Keys to Success

The keys to success will be:

 Store design that will be both visually attractive to customers, and designed for fast and
efficient operations.
 Building good marketing strategies to build loyal customers.

USP

The Cafe House will provide exceptional coffee to customer at affordable price. It will also
maintain a very eco friendly environment by using small plants inside the coffee bar. It will also
play melodious music inside the bar to keep the customer’s mood very happy and refreshing.

Tagline

“Coffee Piyo, aur Jindagi me Jada Jiyo”

1
Company locations and facilities

The Cafe House coffee bar will be located on the ground floor of the commercial building at the
corner of Garcha Road, Ballygunge in Kolkata. The company has secured a one-year lease of the
vacant 900 square feet premises previously occupied by a South Indian restaurant. The lease
contract has an option of renewal for three years at a fixed rate that The Cafe House will execute
depending on the financial strength of its business. The floor plan will include a 100 square feet
back office and a 800 square feet coffee bar, which will include a seating area with 15 tables, a
kitchen, storage area and two bathrooms. This property is located in a commercial area within a
walking distance from the Law and Science College Campus and as well as from Gariahat
market. The commercially zoned premises have the necessary water and electricity hookups and
will require only minor remodeling to accommodate the espresso bar, kitchen and storage area.
The coffee bar’s open and clean interior design with modern wooden decor will convey the
quality of the served beverages and snacks, and will be in-line with the establishment’s
positioning as a diverse place where people can relax and enjoy their cup of coffee. The clear
window displays, through which passerby will be able to see customers enjoying their beverages,
and outside electric signs will be aimed to grab the attention of the customer traffic.

Organizational Structure

Owner

Manager

Barista

Employee 1 Employee 2

2
 Market Overview
Market Dynamics:

The coffee consumption in India has witnessed significant growth in recent years, driven by
factors such as changing consumer lifestyle, increased disposable income and rising preference
for variety of coffee.

Consumer Trends:

Consumers in India are increasingly leaning towards consumption of coffee. There's a growing
demand for diverse flavors and healthier alternatives, influencing manufacturers to introduce
innovative products that cater to these evolving preferences.

Market Players:

The market is highly competitive, featuring both domestic and international players. Established
brands and new entrants continually introduce new flavors to capture a larger market share.

Health and Wellness:

There's a noticeable shift towards healthier drinking options in the Indian market. Coffee bars are
responding by introducing suger-free, low-fat, and natural ingredient-based coffee beverages to
meet the demand for healthier alternatives.

Distribution Channels:

Coffee beverages are widely available through various distribution channels, including coffee
bars, supermarkets, restaurant, and online platforms.

Market Size and Growth Projection:

There are around 15,000 students and faculty member in Law and Science College of
Ballygunge and it is community of around 300k peoples.

According to Statista Research, coffee consumption in India amounted to 1.21 million 60-
kilogram bags across India during financial year 2022, a slight increase over the previous year.

Coffee consumption has shown a steady 6% growth rate in India over the last five years. The
retail coffee industry is flourishing in the country. According to Statista, the Indian coffee
industry is expected to grow at a CAGR of 8.9% from 2024 to 2029. The local climate, with a
long summer & rainy season, is very conducive for the consumption of hot non-alcoholic
beverages. At the same time, hot dry summers drive people into cafes to order iced drinks.
Furthermore, coffee has really become a part of the lifestyle in all parts of India nowadays. Its

3
discerning coffee drinkers are in favor of well-prepared, strong coffee-based beverages, which
they can consume in a relaxing environment.

(source: Statista.com)

Target Market:

Coffee Lovers: Targeting coffee addict people who love to consume coffee on a daily basis.

High income level people: Targeting peoples who loves to consume coffee to feel standard living
life.

Coffee specialty lover: Targeting people who loves a particular coffee flavor.

College students: Targeting college students who need a place to chill with friends, read books in
a refreshing environment while enjoying coffee.

Office workers: targeting office workers who want to refresh themselves after a hardworking
day.

4
 Customer Analysis
Indian consumers are seeking new and varied experiences. Location is clearly important, but so
is atmosphere and distinctiveness. Location is critical to success. Proximity and accessibility to
workers is very important, and so is convenient parking for the customers who look forward to
taking away home delivery so as to compensate for cooking. Price is not very sensitive as long as
we are not too high. Low price or lowest price is not essential. Many target customers are misled
by low price in a restaurant which aims at maintaining high standards. Quality of food matters a
lot. If the price is not too high and the food is good, we shall be able to attain growth through
repeat business and survive in this intense competition.

Demographics:

Age: mostly peoples between age 20-50 years consume coffee in India for different reason.

Income: The middle level and high level income people find coffee beverages affordable.

Location: The people living in urban or city area usually prefer coffee while rural people prefers
tea.

Psychographics:

Standard lifestyle: Most coffee drinkers believe that drinking coffee beverages maintain their
standard lifestyle.

Needs:

Some of customer prefers a particular flavor or type of special coffee. Some of customer prefers
coffee as hot drink in cold weather and cold drink in hot weather.

5
 Product Overview
The Cafe House will offer its customers the best tasting coffee beverages in the area. This will be
achieved by using high-quality ingredients and strictly following preparation guidelines. The
store layout, menu listings and marketing activities will be focused on maximizing the sales of
higher margin espresso drinks. Along with the espresso drinks, brewed coffee, as well as some
refreshment beverages, will be sold in the coffee bar. The Cafe House will also offer its clients
pastries, milk shakes, small snacks and sandwiches.

The menu offerings will be supplemented by free books and magazines that customers can read
inside the coffee bar.

Product Description

The menu of The Cafe House will be built around espresso-based coffee drinks such as lattes,
mochas, cappuccinos, etc. Each of the espresso-based drinks will be offered with whole,
skimmed, or soy milk. Each of these coffee beverages is based on a ‘shot’ of espresso, which is
prepared in the espresso machine by forcing heated water through ground coffee at high
pressure. Such espresso shots are combined with steamed milk and or other additives like cocoa,
caramel, etc., to prepare the espresso-based beverages. Proper preparation techniques are of
paramount importance for such drinks. A minor deviation from the amount of coffee in the shot,
the size of the coffee particles, the temperature of milk, etc. can negatively affect the quality of
the prepared drink. It will be also providing readymade pastries and snacks to who loves sweet
cakes and spicy fast food.

6
 Business Model
Production and Sourcing: Obtain raw materials (coffee beans, milk, sugar and cream) through
efficient supply chains, possibly sourcing locally for freshness and cost-effectiveness. The
pastries and snacks will be procured readymade from distributors.

Manufacturing Process: Efficiently brewing process to ensure high quality and consistency in
taste and texture.

Rich in Flavor : Constantly maintaining flavors to attract customer interest and differentiate the
brand in the market.

Marketing and Branding: Implement effective marketing strategies to create brand awareness,
emphasizing the quality, uniqueness, and flavors of the coffee. This may include social media
campaigns, collaboration with other business, and distribution of flyers.

Cost Management: Implement cost-effective production methods, and manage overhead costs
to maintain profitability.

Quality Control: Establish quality control measures throughout the production process to ensure
consistency and meet customer expectations.

Customer Engagement: Foster customer loyalty through engagement strategies, such as loyalty
programs, customer feedback mechanisms, and responsive customer service.

Sustainability Practices: Consider adopting sustainable and eco-friendly practices in sourcing,

production process and delivery to align with the increasing consumer demand for
environmentally conscious products.

Market Research: Continuously analyze market trends, consumer preferences, and competitive
landscapes to adapt and evolve the product offerings accordingly.

7
 Revenue Model
Sales and Direct Cost Forecast for 3 years:

Sales Forecast FY 2024 FY 2025 FY 2026

Sales
Coffee Beverages 17,52,000 19,27,200 21,19,920
Milk Shakes 4,38,000 4,81,800 5,29,980
Pastries and Snacks 7,30,000 8,03,000 8,83,000
Total Sales 29,20,000 32,12,000 35,33,200

Direct Cost of Sales

Coffee Beverages 4,38,000 4,81,800 5,29,980
Milk Shakes 2,19,000 2,40,900 2,64,990
Pastries and Snacks 3,65,000 4,01,500 4,41,650
Subtotal of Direct Cost of Sales 10,22,000 11,24,200 12,36,620
Sales Forecast for the Financial Year 2024:

Items Rate(Rs.) Quantity(units) Revenue

Coffee
Espresso 50 17520 876000
Cappuccino 50 7008 350400
Cold Coffee 45 3893 175185
Cafe Mocha 60 1460 87600
Cafe Latte 60 4380 262800
Milk Shakes
Chocolate Milk Shake 45 6810 306475
Mango Milk Shake 45 4383 131495
Cakes & Pastries
Dark Chocolate Truffle Pastry 40 1825 73000
Chocolate Chips Pastry 40 7300 292000
Snacks
Vegetable Cheese Pizza (Small) 45 645 29025
Paneer Pizza (Small) 45 810 36450
Chicken Pizza (Small) 45 1622 72990
Chicken Burger 55 2650 145750
Chicken Cheese Sandwich 40 1277 51080
Chilli Paneer Sandwich 40 742 29680
Total 57,870 29,19,920
(Note: Total amount is rounded off to Rs. 29,20,000)

8
 Competition and Swot Analysis
Most of the restaurants which have fructified in achieving a remarkable recognition in North
Kolkata mainly focus on two things － cozy, pleasurable interiors and reasonably priced,
regionally specialized menus. Our major competitors within that particular area where we will
set up our business and also around it are Café Coffee Day, Barista, Remo’s The coffee shop
& Global Bistro and other Food service establishments that offer coffee. However, the
individual managers hardly have any ability to adapt to local desires. In addition, these outlets
are franchised to individual owners. This method of franchising often leads to friction between
office and the local owners that inhibit efficiency, cleanliness and other aspects.

Our competitors are heading in the right direction, but The Cafe House is based on sound market
research in the local market. Our marketing challenge is thus to stand out from our competitors,
not only as the “new” restaurant, but as the one that offers consistently high quality food, menu
variety with a regional flair, and a unique atmosphere. Maintaining our edge will depend partly
on marketing ourselves as an adult-only destination, and not as a family restaurant.

At the end of the day, everyone that sells prepared meals in this area would be deemed to be a
competitor of The Cafe House, because we all compete for the same home meal replacement
value. The only solution to achieve a competitive advantage is to deliver the best food at the best
reasonable price with the highest level of service in one establishment. This is the core definition
of value and the sole concept at the heart of the business model of The Cafe House.

USP’s of:

Cafe Coffee Day- Provides wide range of coffee along with fast foods, allows pet inside the
coffee bar,

Barista- also provides reservation facility along with wide range of coffee flavors.

Global Bistro- serves unique coffee design.

Strategies by The Cafe House:

The Cafe House will provide exceptional coffee to customer at affordable price. It will also
maintain a very eco friendly environment by using small plants inside the coffee bar. It will also
play melodious music inside the bar to keep the customer’s mood very happy and refreshing.

SWOT Analysis

Strengths:

 Different blend of flavors of coffee

 Affordable price

9
  Availability of snacks as well as books and magazines for readers.
 Use of quality products

Weakness:

 Manual System handling

 Market data is limited
 Limited number of employees

Opportunities:

 Creating direct connection with customers

 Growth of coffee industry
 Increase in consumption of coffee
 Situated in a busy market area

Threats:

 Competitors can offer similar product

 Trust factor of customers
 Introduction of similar business in area
 Increase in price inputs due to uncertain economy situation

10
 Marketing Plan
STP

Segmentation:

Demographic Segmentation: Target different age groups, such as young adults, college students,
office workers and professionals, considering preferences of customers and middle and high
level income peoples.

Psychographic Segmentation: Appeal to customers who seek variety of flavors, as well as health-
conscious consumers looking for quality coffee beverage along with pastries and fast food lover.

Behavioral Segmentation: Target frequent coffee drinkers, snacks lover, and those who enjoy
trying new and innovative products.

Targeting:

Primary Target Audience: Young adults (20-35) who loves drinking coffee for refreshing mind
and restoring energy.

Secondary Target Audience: Health-conscious consumers looking for quality and unique,
healthier coffee beverages.

Positioning:

Unique Selling Proposition (USP): The Cafe House will provide exceptional coffee to customer
at affordable price. It will also maintain a very eco friendly environment by using small plants
inside the coffee bar. It will also play melodious music inside the bar to keep the customer’s
mood very happy and refreshing.

Brand Image: Position the brand as a serving quality product and socially responsible choice,
emphasizing sustainable practices and community engagement.

Quality Emphasis: Emphasize on premium quality ingredients and production methods to

position The Cafe House as a brand that prioritizes excellence in flavors.

Marketing Mix (7Ps):

Being a service entity, The Cafe House has a marketing mix of 7 Ps, as follows:-

Product - Basically, it involves introducing new products or improving the existing products.
Here, it refers to the service scope, service quality, service brand, service content, and after-sales
service. It emphasizes on the food items, intrinsic atmosphere and serviceable attributes of the
staff within the cafe premises. It must provide value to a customer but does not have to be

11
tangible at the same time. The Cafe House’s main products will be Coffee beverages, Pastries
and snacks.

Price - Pricing must be competitive and reasonable, and must entail profit. The pricing strategy
comprises of discount and commission, terms of payment, customer perceived value and service
differentiation. The menu of The Cafe House is priced at a low tier level so that it can attract a
wide range of customers and maintain a competitive edge over its rivals.

Items Rate(Rs.)
Coffee
Espresso 50
Cappuccino 50
Cold Coffee 45
Cafe Mocha 60
Cafe Latte 60
Milk Shakes
Chocolate Milk Shake 45
Mango Milk Shake 45
Cakes & Pastries
Dark Chocolate Truffle Pastry 40
Chocolate Chips Pastry 40
Snacks
Vegetable Cheese Pizza (Small) 45
Paneer Pizza (Small) 45
Chicken Pizza (Small) 45
Chicken Burger 55
Chicken Cheese Sandwich 40
Chilli Paneer Sandwich 40

Place - It refers to the place where the customers can buy the product and how the product
reaches out to that place. This is done through different channels, like internet, wholesalers and
retailers. It involves location, convenience, proximity and distribution channels. The Cafe house
will be located on Garcha more and will be handling customer directly.

12
Promotion - It includes the various ways of communicating to the customers with respect to
what the company has to offer. It is about communicating the benefits of using a particular
product or a particular service rather than just talking about its features. It entails advertisement,
press release, promotional campaigns, social networking promotions (Facebook, Instagram, Snap
chat) and word-of-mouth marketing. The company will be using flyers, online social networking
platforms time to time for promoting their products and it will be collaborating with other
companies in the locality as well as with online influencers for promotion of their brand.

People - Here, 'people' refer to the workforce that entails training, participation, retention,
encouragement, personal judgment, explanation capability, appearance condition, interpersonal
relationship, attitude, recruitment, job attrition rate, etc. To be precise, this involves the different
stakeholders such as customers, employees, management and everyone else who are involved in
it. It is essential for everyone to realize that the reputation of the brand lies in the hands of the
people. The employee will try their best to provide best experience to customers with their
efficient customer handling skills and polite way to meet the customers need.

Process - It refers to the methods of providing a service and hence it is essential to have a
thorough knowledge of whether the services are helpful to the customers, whether they are
provided in time, whether the customers are informed in hand about the services, and many such
things. Basically, it refers to the service decision, service process, employee's level of judgment,
guidance to customers and after-sales service. The manager will be looking after the overall
process from entering of a customer to leaving the bar with happy face.

Physical Evidence - It refers to the experience of using a product or a service. It looks at the
environment, equipments, interior decoration, color and arrangement. The company will be using
good quality interior designs to enlighten the environment. It will also using small plants to make
the place more attractive and natural.

Marketing Communication:

Digital Marketing: Utilize social media platforms for engaging content, contests, and
announcements. Leverage influencers to reach a broader audience.

Events and Sponsorships: Participate in local events, or collaborate with food-related activities to
increase brand visibility.

Community Engagement: Encourage customer reviews, testimonials, and user-generated content.

Establish an online community where customers can share their moments with The Cafe House.

Distribution of Flyers: The business will be distributing flyers about the business to promote and
communicate with local peoples and the peoples who will be coming Gariahat market for
shopping purpose.

13
Footfall:

There are more than 200 footfalls on a average per day in competitors store and around more
than 70% becomes potential customer which can be beneficial for The Cafe House by attracting
customer. The Cafe House is estimating around 100 footfalls as it will be located at convenient
distance near the college campus and hoping to convert 80% of them into customers which will
increase in future.

Sales Strategy:

The Cafe House’s baristas will handle the sales transactions. To speed up the customer service,
one employee will be servicing clients, preparing the customer’s order, the other one will be
taking care of the sales transaction. All sales data logged on the computerized point-of-sale
terminal will be later analyzed for marketing purposes.

In order to build up its client base, The Cafe House will use banners and fliers, utilize customer
referrals and cross-promotions with other businesses in the community. At the same time,
customer retention programs will be used to make sure the customers are coming back and
spending more at the coffee bar.

14
 Management Team
The Cafe House is majority-owned by Adarsh Kumar Singh who holds a Bachelor Degree in
Commerce from the University of Calcutta. He’s is also doing MBA in finance to understand
business better and use different business strategies to achieve business growth. The company
will hire a professional manager who will oversee all the coffee bar operations. One full-time
baristas will be in charge of coffee preparation. They will hire two more part-time employees to
fulfill the staffing needs. In the second and third year of operation will add additional employees
if needed.

Management Team

A full-time manager( Mr. Pankaj Patel) will be hired to oversee the daily operations at The Cafe
House. The candidate has three years of managerial experience in the restaurant industry in
Kolkata. This person’s responsibilities will include managing the staff, ordering inventory,
dealing with suppliers, developing a marketing strategy and perform other daily managerial
duties. We believe that our candidate has the right experience for this role. A profit-sharing
arrangement for the manager may be considered based on the first year operational results.

Roles and responsibilities:

Owner: Managing the overall activity of business, Managing and promoting the company’s
brand, taking care of digital marketing of company, different collaboration activities.

Manager: Managing employees, financial activities, proper utilization of funds, procurement of

raw materials etc.

Barista: He will be responsible for making coffees.

Employee 1: He will be responsible for taking orders, serving the order and cleaning.

Employee 2: He will be responsible for making bill and collection of payments from customers
and also act as helping hand for barista.

Personnel Plan:

FY 2024 FY 2025 FY 2026

Manager(1) 2,50,000 2,70,000 2,91,600
Baristas(1) 1,75,000 1,89,000 2,04,120
Other
1,98,000 2,60,000 2,80,000
Employee(2)
Total(4) 6,23,000 7,19,000 7,75,720

15
 Financial Plan
The Cafe House will capitalize on the strong demand for high-quality gourmet coffee. The
owners have provided the company with sufficient start-up capital. With successful management
aimed at establishing and growing a loyal customer base, the company will see its net worth
doubling in two years. The Cafe House will maintain a healthy 65% gross margin, which
combined with reasonable operating expenses, will provide enough cash to finance further
growth.

Start-up Summary

The start-up expenses include:

 Legal expenses for obtaining licenses and permits as well as the accounting services
totaling Rs.6,500.
 Marketing promotion expenses for the grand opening of The Coffee & Mood in the
amount of Rs.17,500 and as well as flyer printing (2,000 flyers at Rs.0.2 per copy) for the
total amount of Rs.17,900.
 Consultants fees of Rs.15,000 paid to ABC Espresso Services for the help with setting up
the coffee bar.
 Insurance (general liability, workers’ compensation and property casualty) coverage at a
total premium of Rs.12,000.
 Pre-paid rent expenses for one month at Rs.8.8 per square feet in the total amount of
Rs.22,000.
 Premises remodeling in the amount of Rs.50,000.
 Other start-up expenses including stationery (Rs.2,500) and phone and utility deposits
(Rs.12,500).

These expenses will be incurred before launch, so they take their place in our financial
projections as negative retained earnings of Rs.1,38,400 at the end of the month before we begin.
That number shows up in the balance sheet.

The required start-up assets of Rs.7,11,600 include:

 Cash in the bank in the total amount of Rs.3,35,615, which includes enough to cover
employees and owner’s salaries of Rs.1,19,500 for the first two months and cash reserves
for the first three months of operation (approximately Rs.72,000 per month).
 Start-up inventory of Rs.80,135, which includes:
Coffee beans (12 regular brands and five decaffeinated brands) – Rs.30,000
Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. – Rs.39,500
Retail supplies (napkins, coffee bags, cleaning, etc.) – Rs.9,200
Office supplies – Rs.1,435

16
  Equipment for the total amount of Rs.2,95,850:

Espresso machine – Rs.30,,000

Coffee maker – Rs.4,500

Coffee grinder – Rs.1,000

Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.) –

Rs.90,000

Storage hardware (bins, utensil rack, shelves, food case) – Rs.18,600

Counter area equipment (counter top, sink, ice machine, etc.) – Rs.47,500

Serving area equipment (plates, glasses, flatware) – Rs.15,000

Store equipment (cash register, security, ventilation, signage) – Rs.68,750

Office equipment (PC, fax/printer, phone, furniture, file cabinets) – Rs.18,000

Other miscellaneous expenses – Rs.2,500

Source of funds:

Funding for the company comes from two major sources–owners’ investments and bank loans.
The owner, Adarsh Kumar Singh has contributed Rs.7,00,000. The remaining Rs.1,50,000
needed to cover the start-up expenses and assets came from the bank loans of 6 years. The loan
was secured through the State Bank of India. Thus, total start-up loss is assumed in the amount
of Rs.1,38,400. The amounts show up in the balance sheet in the month prior to opening. The
Rs.7,00,000 investment shows up as Paid-in Capital. The Rs.1,38,400 expenses show up as
negative retained earnings. Assets and liabilities are there. This is all according to financial
standards.

The following chart and table summarize the start up assumptions:

Start up Amount(Rs.)
Requirements
Start-up Expenses:

Legal 6,500
Stationery etc. 2,500
Brochures 17,900
Consultants 15,000
Insurance 12,000

17
Rent 22,000
Remodeling 50,000
Other 12,500
Total Start-up Expenses 1,38,400

Start-up assets:

Cash Required 3,35,615

Start-up Inventory 80,135
Other current assets 0
Non current assets 2,95,850
Total assets 7,11,600

Total Requirements 8,50,000

Start-up Funding:

Start-up funding
Start-up Expenses to fund 1,38,400
Start-up Assets to fund 7,11,600
Total Funding requirement 8,50,000

Assets

Non cash Assets(includes inventory) 3,75,985

Cash requirement for start-up 3,35,615

Total Assets 7,11,600

Liabilities & Capital

Liabilities:
Long term Borrowings 1,50,000
Capital:
Owners fund 7,00,000
Loss at Start-up (1,38,400)
Total Capital 5,61,600

Total Capital & Liabilities 7,11,600

Total Funding 8,50,000

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EMI Calculation:

Assumption: Interest rate @ 11%

Due
Loan Amount(Rs.) 1,50,000
Year Principal Interest EMI Amount
Interest Rate 11% 1 18956 16500 35456 131044
2 21041 14415 35456 110003
No. of Years 6 3 23356 12100 35456 86647
4 25925 9531 35456 60722
EMI(in Rs.) 35,456 5 28777 6679 35456 31946
6 31946 3514 35456 0

Break Even Point:

Amount(Rs.)
Sales 29,20,000
Less: Variable Cost 10,96,200
(1022000+29200+45000)
Contribution 18,23,800
Less: Fixed Cost 10,59,585
(623000+129000+29585+242000+36000)
EBIT 7,64,215
P/V Ratio 62.45%
BEP(in Rs.) 16,96,693
Monthly Average Sales 2,43,333
Recovery Month 6.97 Months

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Financial Statements:

Income Statement

Particulars FY 2024(Rs.) FY 2025(Rs.) FY 2026(Rs.)

Revenue 2920000 3212000 3533200
Less: Direct Costs 1022000 1124200 1236620
Gross Profit(A) 1898000 2087800 2296580
Gross Profit Margin % 65 65 65
Operating Expenses:
Salaries & Wages 623000 719000 775720
Sales and Marketing Exp. 129000 138000 155000
Depreciation 29585 29585 29585
Rent 242000 264000 264000
Legal. And Administrative Exp. 36000 36000 36000
Maintenance 29200 32120 35330
Utilities & Phone bill 45000 47500 50000
Other Exp 0 0 0
Total Operating Expenses(B) 1133785 1266205 1345635
EBIT(A-B) 764215 821595 950945
Less: Interest Exp. 16500 14415 12100
EBT 747715 807180 938845
Less: Tax @30% 224314.5 242154 281654
Net Profit 523400.5 565026 657192
Net Profit Margin % 17.92 17.59 18.60

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Projected Profit & Loss Account

FY 2024 FY 2025 FY 2026 FY 2024 FY 2025 FY 2026

Particulars Amount Amount Amount Particulars Amount Amount Amount

(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
To Direct 10,22,000 11,24,200 12,36,620 By Sales 29,20,000 32,12,000 35,33,200
Cost A/c A/c
To Gross 18,98,000 20,87,800 22,96,580
Profit A/c
29,20,000 32,12,000 35,33,200 29,20,000 32,12,000 35,33,200
To Salaries 6,23,000 7,19,000 7,75,720 By Gross 18,98,000 20,87,800 22,96,580
& Wages A/c Profit A/c
To Sales and 1,29,000 1,38,000 1,55,000
Marketing
A/c
To 29,585 29,585 29,585
Depreciation
A/c
To Rent A/c 2,42,000 2,64,000 2,64,000
To Legal 36,000 36,000 36,000
Exp. A/c
To 29,200 32,120 35,330
Maintenance
A/c
To Utilities 45,000 47,500 50,000
& Phone A/c
To Interest 16,500 14,415 12,100
A/c
To Income 2,24,315 2,42,154 2,81,654
Tax A/c
To Net Profit 5,23,400 5,65,026 6,57,192
A/c
18,98,000 20,87,800 22,96,580 18,98,000 20,87,800 22,96,580

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Cash Flow Statement(Direct Method)

Particulars Amount(Rs.) Amount(Rs.) Amount(Rs.)

FY 2024 FY 2025 FY 2026
1.Cash flow from Operating activities
Collection from customers
Cash Sales 29,20,000 32,12,000 35,33,200
Less: Cash paid to suppliers 9,41,865 11,24,200 12,36,620
Cash paid to employees 6,23,000 7,19,000 7,75,720
Payment for other operating expenses 4,81,200 5,17,620 5,40,330
Cash Generated from operations 8,73,935 8,51,180 9,80,530
Less: Income Tax paid 2,24,315 2,42,154 2,81,654
Net Cash from operating Activities 6,49,620 6,09,026 6,98,876
2. Cash flows from Investing Activities - - -

3. Cash Flows from Financing Activities

Repayment of Loan (18,956) (21,041) (23,356)
Payment of Interest (16,500) (14,415) (12,100)
Net Cash from Financing Activities (35456) (35456) (35456)
Net Increase/Decrease in Cash & Cash equivalent 6,14,164 5,73,570 6,63,420
Add: Cash & Cash Equivalent at the beginning of 3,35,615 9,49,779 15,23,349
the year

Cash & Cash equivalent at the end of the year 9,49,779 15,23,349 21,86,769

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Projected Balance Sheet

(Amount in Rs.)

Particulars Opening Bal. FY 2024 FY 2025 FY 2026

A. Equity and Liabilities
1. Shareholders Fund
a. Share Capital
(i)Equity Share Capital 7,00,000 7,00,000 7,00,000 7,00,000
b. Reserve & Surplus
(i) Retained Earnings (1,38,400) (1,38,400) 3,85,000 9,50,026
(ii) Profit & Loss 5,23,400 5,65,026 6,57,192
2. Non-current Liabilities
a. Long term borrowings 1,50,000 131044 110003 86,646
3. Current Liabilities - - - -

Total 7,11,600 12,16,044 17,60,029 23,93,864

B. Assets
1. Non-current Assets
a. Property, Plant & Equipment 2,95,850 2,66,265 2,36,680 2,07,095
2. Current Assets
a. Inventories
(i) Stock 80,135
b. Cash & Cash Equivalent 3,35,615 9,49,779 15,23,349 21,86,769

Total 7,11,600 12,16,044 17,60,029 23,93,864

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Risk Assessment regarding the business:

 Machinery breakdown - loss of refrigeration, or failure of crucial equipment, eg coffee

machine
 Untrained staff causing machinery breakdown or loss of stock from poor preparation or
contamination.
 Staff unable to handle customer demands and service needs
 Unable to recruit staff because of labour shortages - the disruption caused by restricted
immigration or regional shortages
 Difficulty for staff with public transport cutbacks and lack of parking.
 Long working hours for key staff leads to burnout, poor performance or resignation.
 Incorrect food storage or preparation, causing sickness or poisoning.
 Inadequate cleaning and sanitation, leading to loss of stock and food safety issues.
 Food allergies not taken seriously, resulting in customer complaints or emergencies.
 Inadequate fire control systems, leading to fire and loss of equipment or the entire
building.

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 Conclusion
Overall implementation of our cafe business, we can conclude that the cafe will grow up in
future in terms of revenue and we will fulfill maximum customer satisfaction by providing
quality service and quality food. I expect in the future that there will be many established coffee
bar and also will come from many expert chefs from other countries, will change the style of cafe
and restaurant.

We will also focus on future expansion of our business; our upcoming targeting will be other
region around Kolkata because of growth of competitive market, after achieving targeted sales
revenue for the planned three years.

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