Experience The Best Flavors Of Tea From Around The World At Our Quaint Café

Our Vision and Mission

Question:

Discuss about the Impact of the business environment on the output.

Drinking tea is known is often associated with sophistication and class, we intend to bring the best flavors of the world to the customers so that they can experience the beauty of brewing tea and clamming the senses (Summerfield, 2015). The café is going to be a warm hide out for people who are looking for quaint, clam place to enjoy tea and time with friends and loved ones. The idea of this kind of a “teahouse” experience is taken from the tea shops situated in various hill stations of India. The customers will be open to experimenting with exotic tea flavors from around the world as well as complement that with an assortment of various kinds of bakery items form biscuits to pies etc (Alstete, 2014). The customers can also buy loose teas, tea accessories like different types of kettles and cups from a collection of items from around the world. There will also be premium chocolates, and gift baskets, along with souvenirs and gifts for our tourist customers. Customers can also buy loose tea form our online website.  The café will apply to be a member of the Tea association of Canada (Summerfield, 2015).

The vision statement

The organisation seeks to be fist choice of the tourists as well as localities when it comes to enjoying quality time with friends and loved ones.

The mission statement

To serve best quality tea from around the world and to offer a nostalgic good time to the customers

Goals of the company

• To popularize the tea culture
• To introduce a new kind of café in the locality
• To educate people regarding the benefits of tea

It is a café and the customers can either choose to sit and enjoy a cup of tea and other complimentary items from the bakery or they can take away their cup of tea in a to-go style sipper they can also take away bakery items. The customers can buy loose tea form our variety of tea section. The shop will also have tea accessories which are not easily available like tea cozies, bone china tea sets etc.

Tea will be available from various parts of the world like: India, Nepal, Sri Lanka, China, Japan, Morocco, Turkey at the beginning and slowly other flavors will be introduced. There are a number of subdivisions of the kind s of tea that will be made available to the customers from these countries. For example: there will be Assam, Darjeeling as well as tea from the Nilgiri region of India. The café will have tea experts who will explain the benefits and tastes of each tea so that it is easy for the customers to decide (Tea.ca, 2018).  Apart from that there will freshly baked items to compliment the tea and the customers can also take away the order.

From the perspective of the customers the café will be a place to talk and have a good time with friends; people who love drinking tea will love the tea assortment that we have to offer. It will also be a good place for the tourists to visit and spend time among the gorgeous location of the quaint café. The company will focus on the quality of the product and the service, the hostess and the waiters of the café will be provided with training regarding various kinds of teas and their benefits this will ensure a value relation in between the company and the customers. The customers will also get an opportunity to learn about various health prospects of tea consumption and they will also be able to purchase tea from around the world. The customers of the organisation will be also lured by the cozy environment of the café as the ambience of the café will smell of tea and bakery items.

Our Goals and Services Offered

The café will encourage young people to understand the benefits of the tea and use the café as a place for afternoon meetings and discussions. People who have an idea about tea drinking and are accustomed with the culture will enjoy their time in this café. People who are tired of buying commercially packed tea from department stores and tea bags will get their favorite tea in the café. The café also targets the tourist; the population of tourists is also significant in the location of the café.

Demographics:

• The age group of the target market is in between 18-55 this is a wide target group as the organisation does not want to promote tea drinking as the practice adopted by only older people, the company wants to educate the young population regarding the benefits of tea.
• The café will provide the neighboring upper-middle-class community with a place to socialize and meet people.
• Most of the people are localities and the ones who come to visit the place.
• Well-educated, aware, politically and socially conscious, responsible and aspirant citizens

Psychographics:

• The café will target people who enjoy and appreciate a good cup of tea and good company.

Tourists are the secondary customers of the café that are being targeted as potential buyers. Tourists who are looking for a place to sit and rest along with a cup of tea and snacks can not only enjoy the view of the area, but also enjoy the claim environment.

The organization is a café cum tea store where the customers can come and sit and enjoy the quaint and peaceful ambience of the café. There will be around twenty table arrangements five on the ground floor and fifteen in the first floor with. The café will have strength to accommodate maximum 50 guests at one time. In the ground floor there will be a counter of display of the complimentary items which the customers can purchase along with the billing counter. There will be an array of display of the various kinds of tea preparations that will be available in the café, the person at the billing counter will help the customer to make their choice in case they are unaware of what to order (Armstrong, 2014).

There will also be takeaway facility for the customers where they can choose to take their cup of tea and sip it along the way back home or to the office.

The café will also have a tea library where people can go and choose to take loose tea. The specialists will help the customers pick out the best kind of tea as per their choice of taste and will also help them with the brewing instructions as different tea has a different brewing procedure.

After a few years of establishment and enough popularity among the locals as well as the tourists the company will develop e-commerce facility as well. This will help the customers to order loose packaged tea online.

These distribution channels are decided based on the target market portfolio that has been stated above, as the primary customers are the localities and the idea of the organisation is a café. Hence the distribution of the product or service channel is justified.

Barrie City is one of the quaint yet popular tourist sites in Ontario of Canada. This is a famous tourist spot in the country and people usually come here to enjoy ski and snow. Therefore it will be perfect to serve the target market as mentioned above (Tourismbarrie.com, 2018).  Tourists from various parts of the world come to visit the beautiful city; it is popular for the skiing destination and natural beauty.

A Wide Range of Exotic Tea Flavors

Location criterions are as follows:

• The café should be located beside or near a famous tourist spot but not away from the town. This will help in catering both the primary as well as the secondary customers. For a small business it is essential to ensure that the target market can see the establishment and the existence of the place.
• The place should be easily accessible by the employees and the owner of the café as the opening times are from morning 8 am. This will help the café to attract people who are going to office, as they can quickly grab a cup of tea and few bakery items on their way
• The location should also be on a main road so that people are aware of the existence of the café without even promoting the place. As a small set up promotional aspects are restricted hence location of the café will play an important role.
• The location should not be near any other café or restaurant as that would take away from the secondary tourists who might visit the place to rest after travelling or shopping a lot

As mentioned above the café will have two floors where the ground floor will have some seating arrangements with the billing counter and the bakery display and another side will have the tea library where the customers can choose their choice of loose tea and also learn how to brew them from the experts of the team. The owner will be available in the café and will look after the management. The first floor will have 15 tables where arrangement of 40 people will be made.  Whereas there will be place for five table and 10 people accommodation on the ground floor. Refer to the picture in Appendix 1

Tea is the second-most consumed beverage in the world, and sales are consistently increasing. Drinking tea as a beverage is gaining popularity in Canada as well. According to a market research firm, tea is the most popular drink after water in the world (Tea.ca, 2018). Canadians are not only developing a taste for tea they are also experimenting with various kinds of teas, one of the major reason for this increase demand for tea in Canada is  immigration from countries with strong tea-drinking cultures like India, China, the Middle East and Russia etc. Another major aspect that is recognized to be increasing the popularity of the beverage is the health benefits associated with tea; people are becoming more and more health conscious and want healthy alternatives of every food aspect. The sales of tea reached $1.3-billion in Canada in 2015 – a 23 per cent increase from the previous years (Siddiqi, 2017). There are two tea markets in the tea industry of Canada one is the packaged loose tea and tea bags that are found in supermarkets and grocery stores etc. Another slew of players in the market are, the online e-commerce market like the Davids Tea, There are also distributor like in cafes and tea houses etc. Therefore it can be concluded that there is enough scope for the company as the tea industry is in the growth stage (Siddiqi, 2017).

There are a number of cafés in the Barrie, but there are very few direct competitors of the café in the region. There are just two cafes in the region that specialize in selling tea. This is a great advantage for the company as it will not only make it unique but will also help in building a new culture in the town. These two cafes are: Hamley’s Tea & Coffee Co and Campbell’s British Food & Tea Room (Bah and Fang, L, 2015).

Other cafés that sell coffee and other hot beverages are indirect competitors of the company as they are substitute for tea. For example: Alchemy café, Riverwest Bistro, Cheekcakos bakeshop are the three important indirect competitors.  The strength of these cafes are that they have been here for a long time and people are more used to coffee than tea in this region, but another important opportunity and weakness of the substitutes are the fact the tea is gaining popularity and people like to enjoy change.

A Place to Enjoy Quality Time with Friends and Loved Ones

The company is a humble and quaint place among the popular tourist attraction of Barrie City the prices of the items and the service are structured according to the target market that has been described above and also according to the prices of the competitors that are prevalent in the local market. Therefore, it can be said that the pricing strategy that will be undertaken by the company is competitive in nature it will be priced so that it can attract the secondary tourist customers as well. The company not only serves people a place to sit and enjoy tea the café will also consist of a place where they can choose to buy the choice of loose tea. The company will have an assortment of tea from over the world and will also have complimentary fresh bakery items for sale.

Products and services	Price / Price Range
Tea (serving 3) (any type)	$5
Tea (serving 5) (any type)	$7
Cost of loose tea 50 gm	$898 –  $1098
Bakery items	$2-$8
Take away extra	50 c.

The price list that has been stated above is arrived with the help of a small market research that has been undertaken by the company with the target market was taken as the population and a sample size of 50 people were randomly selected to conduct the survey. They were asked to fill a questionnaire which was analyzed, not only that the research also consists of an observation process where the competitors that has been stated in the previous paragraph has been visited and their prices has been taken into consideration while formulating the price list. The stakeholder who is given precedence while taking such decisions are the consumers, the idea is to provide the people a place to have visitors of the café a clam and quaint ambience where they can indulge in discussions and have a good time with the friends or family. Therefore the prices are kept within the reach of the target market. The company will be charging a minimum amount for the packing that will be required for take away.  

Month	Anticipated sales
January	$6,000
February	$7,500
March	$8,000
April	$9,200
May	$10,000
June	$12,300
July	$15,500
August	$19,900
September	$22,000
October	$25,000
November	$26,000
December	$30,500
Total sales	$191,900

The list that is provided is based on the calendar year which will be considered for this plan. For the first month it has been anticipated to be $6,000 based on daily sale for the month which consists of 26 working days. Therefore approximately $230 per day sales will help in achieving this amount. Furthermore, on an average the café caters to around 60 people this amount is achievable for the café owing to the location and the demand among the target market.

Any business organisation communicates with the customers and other stakeholders of the company with the help of promotional tools. As a small startup company the focus of the organisation is on the quality of the products and services that are provided in the organisation. The company will therefore not spend a fortune on promoting the café, as the owner believes that the quality of the products and services will help in reaching its objectives.

The objectives of promotion strategy  are:

• To establish the entity of the café
• To communicate with the customers
• To build a valuable customer relation

The company will use two medium in the promotional strategy Advertising and digital media. Firstly in order to establish the presence of the company the company will indulge in   advertising is a platform that is both traditional and contemporary, and it has been observed that the target market both primary and secondary are impacted with this platform hence local newspaper will run the story of the launch of the café. This will not be an advertisement rather it will be an advertorial where a journalist of the newspaper will write a promotional piece about the café and the vision of the company along with the owners vision and how it is different from the other cafes around. The write up will also include a section of information regarding the various kinds of tea that will be sold in the organisation this will have health benefits as well as brewing process explained in the article juxtaposing the harm that coffee consumption may have on the health.  Starting from the day before the opening till the end of that week pamphlets will be distributed among the local area as well as in the nearby tourist place. This will also help the company spread the news of its launch. This pamphlet will be designed by the entrepreneur as he has the expertise and the budget that has been allocated in the table is the dedicated to the printing charges of the pamphlet. People usually read newspaper and hence the print advertorial will be a good idea for the company on the other hand the people will also get to know about the goodness of tea.

A Shop with Loose Teas, Tea Accessories, Premium Chocolates, and Gift Items

To communicate with the customers and also to save money the company will extensively use internet and social media platforms like Facebook, Instagram and twitter (Mata & Quesada, 2014). In each of the platforms the company will use creative methods and pictorial articles to garner the attention of the target market.

Feedback is another way to directly communicate with the customers, in digital space the company can even personally chat with the customers and also use other methods such as Facebook like and Instagram comment to communicate.

In order to establish a valuable relation with the customers the digital marketing strategy will be use mixed with sales promotion. The company will publish discount codes and offers with the help of the social media platforms to gain the attention and popularity of the people. The owner will be handling these website pages and will also provide inputs in making the portal attractive (Khan, 2014). The main aim is also to create a platform for gaining instant feedbacks and reviews from the customers, this review will help the company gain popularity among the other cafes in the region. The company is also focused in developing a valuable relation with the primary target market therefore these platforms will be used to improve and develop the products and services of the café. These portals will also be used as a place to provide knowledge regarding the various kinds of tea. There is a focus on spreading more awareness and knowledge as there is a constant rise of people who are looking for alternative healthy beverage options and tea is certainly healthier than many other hot beverages (Khan, 2014)

The budget that has been allocated to the promotional strategy of the café is sated below:

Medium of Promotion	Amount Allocated
Advertising
Print advertising (local news paper)	$500
Pamphlets (printing charge)	$40
Distribution of the pamphlets	$20
Digital media promotion
Listing in Zomato	$0
Facebook page	$0
Instagram page	$0
Twitter handle	$0
Total budget	$560

The nature of business that is undertaken by the organisation is Sole proprietorship. It is the nature of business structure where there is one owner of the organisation; the owner is responsible for all the liabilities of the business and is also the sole beneficiary of the revenues of the business. The owner of the company wanted to keep the process of business simple and hence he did not take help from anyone in the process of starting up the business. Tax benefit is one of the most important advantages that are enjoyed by this structure and because this is a small organisation this form is best suited.

Checklist of items

1. Choose a name of the company
2. Check accessibility of the anticipated names of the enterprise
3. Registration of the business name that has been selected
4. Get a Business Number
5. Incorporation federally
6. Application for HST number that was previously known as the GST number
7. As the café will have employees application of payroll number is the next step as well as WSIB Account
8. The owner already have the land where the café is going to be situated
9. Construction of the place should be over by the time of inauguration
10. Employees have to be hired

All these above stated factors can be achieved with the help of this link: https://www.bdccanada1.com/bdc_order/index.php?website=index&page=commerce&op=options&packageId=64&a_aid=3785&a_bid=a0dd5df4&chan=code3 

Red Tape is the rigidity in the authoritative conformity in Canada there is hardly any practice of red tape as the government policies and practices of the country is liberal in terms of trade practices, as the registration and approval of the business enterprise is very easy and hassle free.

As a sole proprietorship organisation, the will have all the operations as well as liabilities on the owner of the company. The following organisation chart will explain the situation of the structure of the organisation (Ho, 2014).

Target Market and Distribution Channels

The above chart clearly sates the major role the owner of the organisation has to play when it is a sole proprietorship. The operations of the company which are baking, making tea, serving the people, assisting the customers with their choice of tea etc will be done with the help of employees.  The owner of the company wishes to maintain a cordial and friendly relation with the employees there will be a hierarchy which will be maintained in the company as the decisions will be taken by the owner, the Human resource will be divided in two sections one is front of the house ad other is back of the house (Fiore et al., 2013). Two employees in the back of house will be employed and two members in the front of the house at the initial stage of the café (Kew  & Stredwick, 2017).

Owner: The owner of the business is responsible for the marketing and promotion of the company, looking after the proceeds of the business, as well as looks after all the associated operations o the business as well. The owner will also provide assistance to the people who are looking to buy loose tea. The owner has the full liability of the business is responsible for any kind of risks and challenges associated with the business at any point of time. The success of the business depends on the owner and his vision.

Front of the house employees: They are the servers or the waiters, they will serve the order to the table and will also provide them with the bill and collect the cash from them while they are done these employees are also responsible for cleaning and maintaining the café.

Back of the house employees: these are the two cooks of the café who will look after the order and ensure that the order is served in time. One of the employees is the cook who will bake the items and is also skilled to brew any kind of tea perfectly and the other employee will assist the cook and will help him in the work and maintaining the kitchen, these two employees will be also responsible for cleaning the kitchen. Another responsibility of these people is to keep the  owner informed about the usage on the raw materials of the kitchen on a daily basis. (Botha & Robertson, 2014).

The initial capital investment that is brought in by the owner is Income statement of the company is as follows:

Particulars	Year 1	Year 2	Year 3
Inflation Rate		2.50%	2.50%
Sales Growth Rate		7%	7%
Sales Volume	400000	428000	457960
Selling Price Per Unit	$5	$5	$5
Total Sales Revenue	$2,000,000	$2,193,500	$2,405,721
Cost of Good Sold per unit:
Raw Material Consumed	($1)	($1)	($1)
Direct Labor Cost		$0	$0
Total Cost of Goods Sold p.u.	($1)	($1)	($1)
Total Cost of Goods Sold	($400,000)	($438,700)	($481,144)
GROSS PROFIT	$1,600,000	$1,754,800	$1,924,577
Variable Manufacturing Overhead p.u	($650)	($666)	($683)
Insurance	($12,000)	($12,300)	($12,608)
Rates & Taxes	($6,500)	($6,663)	($6,829)
Salary of Office Staffs
Cleaning Charges	($500)	($513)	($525)
Electricity for Office	($15,000)	($15,375)	($15,759)
Telephone & Internet
Total General Administrative Expenses	($34,000)	($34,850)	($35,721)
Net Profit before Tax	$1,566,000	$1,719,950	$1,888,856
Net Profit after Tax	$1,566,000	$1,719,950	$1,888,856
Gross Profit Margin	80.00%	80.00%	80.00%
Net Profit Margin	78.30%	78.41%	78.52%

Above is the income statement of the first year have been provided, which initiates that the company will earn a net profit of $1,566,000 at the end of first year of establishment.

As sole entrepreneur the owner will bring the capital of the business. 

Following is the cash flow statement for the first month:

Particulars	Year 1	Year 2	Year 3
Cash Flow from Operating Activities:
Cash Sales	$2,000,000	$2,193,500	$2,405,721
Cash Purchase	($400,000)	($438,700)	($481,144)
Insurance	($12,000)	($12,300)	($12,608)
Rates & Taxes	($6,500)	($6,663)	($6,829)
Cleaning Charges	($500)	($513)	($525)
Electricity for Office	($13,750)	($15,344)	($15,727)
Cash Inflow/(Outflow) from Operating Activities	$1,567,250	$1,719,981	$1,888,888
Cash Flow from Investing Activities:
Preliminary Expenses	($245,000)
Cash Inflow/(Outflow) from Investing Activities	($245,000)	$0	$0
Cash Flow from Financing Activities:
Dividend Payment	($548,100)	($601,983)	($661,099)
Cash Inflow/(Outflow) from Financing Activities	($548,100)	($601,983)	($661,099)
Net Cash Increase/(Decrease) for the period	$774,150	$1,117,999	$1,227,788
Add: Opening Cash Balance	$0	$774,150	$1,892,149
Closing Cash Balance	$774,150	$1,892,149	$3,119,937

There are several expanses that a new company that is going to incorporate has to go through. The organisation will concentrate on the quality of the products and services and hence the company will focus on the raw material and preliminary expenses in the first month.

Reference List:

Alstete, J.W.,(2014). Strategy choices of potential entrepreneurs. Journal of Education for Business, 89(2), 77-83.

Armstrong, G., Adam, S., Denize, S. & Kotler, P., (2014). Principles of marketing. Pearson Australia

Bah, E.H. & Fang, L., (2015). Impact of the business environment on output and productivity in Africa. Journal of Development Economics, 114, 159-171.

Botha, M. & Robertson, C.L., (2014), “Potential entrepreneurs’ assessment of opportunities through the rendering of a business plan”, South African Journal of Economic and Management Sciences, vol. 17, no. 3,  249-265.

Fiore, A.M., Niehm, L.S., Hurst, J.L., Son, J. & Sadachar, A., (2013). Entrepreneurial marketing: Scale validation with small, independently-owned businesses. Journal of Marketing Development and Competitiveness, 7(4), 63.

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Siddiqi, M. (2017). Something’s brewing. theglobeandmail.com. Retrieved 2 March 2018, from https://www.theglobeandmail.com/life/food-and-wine/food-trends/somethings-brewing-canada-warms-up-to-luxury-teamarket/article34016227/

Summerfield, R. (2015). Are Canadians trading their double-doubles for tea?. cbc.ca. Retrieved 2 March 2018, from https://www.cbc.ca/news/canada/are-canadians-trading-their-double-doubles-for-tea-1.3246849

Tea.ca. (2018). About Us. tea.ca. Retrieved 2 March 2018, from https://www.tea.ca/about-us/        

Tourismbarrie.com. (2018). Barrie, Canada. Tourismbarrie.com. Retrieved 5 March 2018, from https://www.tourismbarrie.com/