||Concept / Business Plan
||RM300,000 or less
||The interest by customers in the coffee house industry is sweeping the country. The CK Coffee is determined to become a daily necessity for local coffee addicts, a place to relax especially for people who try to escape the daily stresses of life and want just a comfortable place to meet their friends or to read a book, all in one. With the growing demand for high quality gourmet coffee as well as great environment and service, CK Coffee will capitalize on its proximity to highly density commercial area in Kota Damansara to build a core group of repeat customers. The site comprises of 1377 square foot intermediate lot inside the newly constructed commercial building namely Sunway Nexis.
The CK Coffee will offer its customers varieties of coffee and smoothies, sandwiches, Laksa Sarawak, pasta and cakes including local Borneo cake namely “Kek Lapis Sarawak”. In addition, the CK Coffee will provide free wi-fi and books so that the patrons can read and surfing while enjoying their visit.
The interior design of the leasehold will focus on projecting a relaxed atmosphere. CK Coffee will be divided into different areas. The ground floor will have typical woody tables and chairs while the loft will be occupied with couches, coffee tables and book shelves filled with books and magazines. A PA system will be installed so that the music and entertainment can fill the café throughout.
There will be nightly entertainment featuring local bands playing soft music and instrumentation from Borneo which will be held once in two weeks. On selected nights, there will be some games to be hosted that will involve mostly from the customers. The wall will be used as a featured wall for the music entertainment which will highlight the beauty of Borneo culture and consequently promotes CK Coffee to others.
The cafe will be operated as partnership between Raja Shahrom and Clare. The CK Coffee intends to raise a funding for the amount of RM 300,000 from the Investor. Profit shares will be divided by 34% to the Investor (in 10 years period) and 66% to the company. The investor will be a silent investor with a payoff of 66% from total investment within three years. The investor will be paid monthly in equal installments including interest.
The company is expected to grow sales revenue from RM 385,000 in first year 2016 to RM 1,374,000 in year 2018. The CK Coffee will strive to maintain a 73% gross profit margin and reasonable operating expenses and target to see net profits grow from RM 106,000 to RM 697,000 during the same period.
Kota Damansara is the perfect area for a coffee house such as CK Coffee. Kota Damansara has been experiencing sustainable growth due to its adjoining location to Petaling Jaya and the upcoming new MRT line. One of the major attractions in Kota Damansara is the Sunway Giza Mall which was completed in 2009. This 6.17 acre development comprises 48 units of retail spaces and a 3-storey mall with a 800-bay basement car park with a gross built up area of more than 162,000 sq.ft. Besides the mall, there are institutional centres such as Sri KDU International School, SEGi University and International University College of Nursing. The Giant Hypermarket and AEON BIG, the new Encorp Strand Mall and the Cascades also do contribute to the exponential growth of population of Kota Damansara.CK Coffee will be the perfect complement for Kota Damansara in curricular activities. Live music performance offered by CK Coffee will provide ample reason for customers to fall in love with our coffee house. Another key component to the CK Coffee’s success in Kota Damansara is the fact the younger generations living in this area, namely students and professional ages 18 to 30, which are looking to discover a place to release their daily stresses from school or work apart from gourmet side of food and drink. CK Coffee will be a unique, yet well-round coffee house experience and enjoyable for everyone from the young college to professional.
The food service, and eating and drinking establishment industry in Kota Damansara has been growing consistently over the last 5 years. This makes for the perfect time to start a business that selling one of the most traded commodities in the world. Despite few unique coffee house have been established within this area, it will be more competitive if we can provide the same unique coffee house but with different concept compared to others.
Market Segmentation and Key Customers”
Although each segment of the market is distinctively different, they all hold many of the same attributes regarding coffee consumption, overall consciousness of sustainability issues and personal lifestyle. CK Coffee is targeting four segments of the population within the Kota Damansara area.
a) Student/ Youngster Population (50%)
– The students of Kota Damansara particularly from SEGi University and International University College of Nursing will be the primary customer. This segment, mainly between the ages of 18-30, is comprised of undergraduate from intellectual, engineering, art and culinary. Many of these students are aware of the potential benefits of coffee and live an active lifestyle. Customers from this segment will likely attend the musical performances held at CK Coffee. While the entire segment is looking for a place with comfortable, open environment to relax, and get some work done.
b) Progressive Young Professional (25%)
– This segment which encompasses of Kota Damansara and Damansara Perdana work forces, ages 24-40. These customers are education and health professionals, as well as business and finance professional. Whether they are looking for a quick morning drinks or looking for somewhere to enjoy their conversation after work in a relax environment, this segment will enjoy what the CK Coffee has to offer.
c) Coffee Coinsures (15%)
– This segment knows good coffee, has developed an experienced taste for the drink and knows where to find it. This segment will not usually be found in Coffee Beans or Starbucks.
d) Other (10%)
– This segment includes all other students, youngsters and professionals looking for something new.
Coffee shop customers, by nature, are looking for something special – that is why they are willing to pay so much for a cup of coffee. Many customers of the big national chains, while satisfied with their daily coffee would be intrigued to find a local coffee shop that is different in terms of products and environment. CK Coffee will be the most unique coffee house in the area.
The demand for specialty coffee in general has been growing in Malaysia and all over the country. Current research indicates that the coffee consumption in Malaysia has been increase progressively (i.e., 0.8kg/capita in 2012 to 1.3kg/capita in 2013). The grow of coffee shop is booming since then. Other trends which are currently being followed by customers are as follows:
• Unique products (i.e., specialized roasts, local ingredients, local themed or named drinks, custom drinks etc).
• Games, puzzles, and other activities that encourage customers to linger over their coffee.
• Hosting local events (i.e., entertainment, artists, etc).
• Using technology to compete and marketing the places such as Foursquare, Yelp, which can increase visibility in the local market.
|Revenue / Business Model
||The CK Coffee will provide a unique and relaxing environment to enjoy gourmet roasted coffee and smoothies including the signature dish. The café will also provide an opportunity to visit with friends, catching up sessions, or read a chapter of a book. The café barista will be provided an appropriate training for self-skills improvement to ensure they can offer assistance in any coffee purchase while simultaneously providing customers with outstanding service. The CK Coffee will penetrate the market through a variety of marketing including viral, coffee tasting event promotion, music events and customer loyalty discount programs. Through the use of these advertising mediums and marketing strategies, we believe that we will be able to reach the target market from every angle.
Maintaining the quality and consistency of the products shall be the main key in order for CK Coffee to sustain successfully in the market. Another important factor in the success of CK Coffee will be the continuity of branding the image and the principle behind the brand, by using the logo on everything involved with the coffee house such as on the coffee cups, paper bag and serviette.
In short term, a number of promotions and activities are planned around the launch of the business to create awareness. CK Coffee will provide discount up to 30% during first 2 months of its operations and traditional performance from Borneo will be hosted during its grand opening. The company will publicize the launch of the café via mouth to mouth, flyers distribution, banners and media socials such as Facebook, Twitter and Instagram.
The CK Coffee will use the following methods to increase sales revenue:
• The menu will focus on the most profitable and common coffee flavors. The café also will introduce healthy based smoothies which will allow others to enjoy their drink in a relax environment.
• Monitoring flavoring inventory – excess flavoring will utilize more space in the storage room. The café will utilize eight flavors for the smoothies which can be used from both tea and yogurt bases.
• Control waste – monthly sales and inventory reports will be reviewed to evaluate ingredients waste due to inefficient preparation, incorrect order and other unnecessary loss. This will enable accurate control of the monthly ordering supplies.
• Monitoring and evaluate hours of operation – depending on the demand from customers, the current hours of operation from 8.30am to 12.30am daily may be revised.
• Run employee sales contests – the baristas are the salespeople and have a great deal of influence over the customers ordering process. Sales contests will emphasize high margin items.
||CK Coffee will be owned 100% by CK Coffee & Tea (002530833-V) registered under partnership between Clare bin Kimduit and Raja Shahrom Nizam Shah bin Raja Shoib.
a) Raja Shahrom Nizam Shah bin Raja Shoib, Founder and Director
– Originate from Kuching, Sarawak, Raja Shahrom is a graduate from University of Teknologi Malaysia with master degree in Civil Engineering (Geotechnical). During his college period, he was working as a part-time server in Delifrance Café which allowed him to learn about the business operations, customer services, involved in marketing plans and eventually rising to the position of part-time crew leader throughout his working period. Following graduation of his degree from University of Malaya, he assisted his friend in setting up a small business which provides photography services and involved from registering the company until marketing strategies and customer services.
b) Clare bin Kimduit, Co-Founder and Director
– Clare was born in Beaufort, Sabah and a graduate from University of Teknologi Mara with degree in Civil Engineering (Hons). During student period, he participated in part time job in banquet as well as charity programme that involve preparation and distribution of food to homeless. Following graduation, he assisted his friend in apparels business and involved in finding the materials as well as marketing plans. In addition, he had been assisting his friends in the food selling (i.e., Laksa Sarawak) during the continuous monthly Church events.
Management responsibilities regarding finances, growth, employee and overall operations and both will oversee and contribute equally in the administration and decision making process. Each member will also be responsible for the management of the day-to-day operations including the following:
a) Providing direction for the business
b) Creating, communicating and implementing the company’s mission and overall direction
c) Fixing prices and signing business deals with vendors
d) Responsible for recruitment and payment of salaries
e) Responsible for signing cheques and documents on behalf of the company
f) Evaluate the success of the business
||Company registered on 8/4/2016.
The location has been identified and booked. Currently in the stage of looking for start-up investor before end of June 2016. The target opening of the cafe is on 16 July 2016.
||The CK Coffee & Tea intends to raise about RM 300,000 from an investor. The investment capital will be used for the following startup expenses:
a) Securing the retail store
– The site consists of 1377 square feet of spaced with additional 394 square feet of parcel spaced. The rent is RM 10,000 a month, with minimum of 2 years tenure and 1 year option of lease renewal. RM 40,000 is required for the deposit of 2+1+1 with 6% of GST. Additional of RM 5,200 is estimated for insurance, permit and licenses.
b) Modification of the retail store
– Due to high ceiling of the site, a loft will be introduced to allocate seating capacity of 60 patrons. The site will consists of dining room, a coffee bar, two restrooms (already constructed), and a store room. To be used as a café, this store needs to be plumbed and wired appropriately. Painting, new floors, countertops, furniture, and a custom coffee bar need to be built. The cost to renovate is estimated about RM 120,000.
c) Supply for equipment
– The café equipment will consist of one commercial espresso machine, a commercial bean grinder, a commercial blender, a commercial refrigerator, two commercial chillers, a microwave, plates, glass wares and kitchen utensils. The cost for equipment is estimated about RM 104,405.
d) Supply for raw materials
– Raw materials for beverages include coffee beans, barista syrups, tea bags, chocolate powders, yogurt and bottle juices while for foods include ingredients for Laksa Sarawak, pasta, sandwiches and pastries. The cost for both beverages and foods is estimated about RM 7,183 and RM 6,300 respectively.
e) Advertisement and other startup expenses
– The advertisement is required for introduction of the café to targeted customers as well as for opening ceremony. Other startup expenses include POS system, janitorial and uniforms. The total cost for advertisement and other startup expenses is estimated about RM 15,200.
|% Equity Allocation
|Risks and Mitigation
Unable to achieve volumes of customers due to unforeseen circumstances.Mitigation:
1. Double the effort on marketing strategy by utilizing various marketing techniques.
2. Might employ or seek advice from experienced personnel regarding the issue to help strengthen our position
3. Reconsider and revise financial plan and make readjustments accordingly.
3. Consider deploying more marketing strategies.
4. Establish strong rapport with revisiting customers.
||Within 2 years of operation, if fail to achieve at least break-even, we shall proceed with company valuation and exits
||CK Coffee & Tea
||NO.3, JALAN PINGGIRAN 1/8, TAMAN PINGGIRAN BATU CAVES, 68100 BATU CAVES, SELANGOR
||RAJA SHAHROM NIZAM SHAH