Business Plan Internet Coffee-Shop

8/8/2019 Business Plan Internet Coffee-Shop

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Plan For An Internet Coffee Shop Start-up

Contact Information:

3500 Spur AvenueColumbus, OH 42874Tel# (513) [email protected]

This document contains confidential information. It is disclosed to you for informationalpurposes only. Its contents shall remain the property of Plan For An Internet Coffee ShopStart-up and shall be returned to Plan For An Internet Coffee Shop Start-up when requested.

This is a business plan and does not imply an offering of securities.


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Table of Contents

1. Executive Summary 1

Business Opportunity

Product/Service Description2. Company Background 3

Business DescriptionCompany History

3. Business Plan For An Internet Coffee Shop Start-up 5

4. Services 6

5. The Industry, Competition, and Market 7

Market DefinitionPrimary CompetitorsCustomer Profile

6. Marketing Plan 10

7. Financial Plan 12

Investment PlanBreak-even AnalysisLiquidity PlanEarnings Plan

Risk Analysis

8. Conclusion 20


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Plan For An Internet Coffee Shop Start-up 1

1. Executive SummaryDue to shrinking profit margins the classical catering services industry is turning towardinnovative business concepts. Coffee bars with internet access are just one such concept thatlately showed significant growth potential. For selected locations the industry expectssignificant growth rates to persist in the near future so that investments in that segment are

very profitable.

The goal of this start-up is the operation of a coffee bar that offers computer terminals withinternet access and technical support. for the user Additional to this core business the coffeeshop offers a selection of coffee, tea and additional equipment for sale which will helpoptimize and increase sales revenues and utilize personnel capacity.

1.1 Business Opportunity

The restaurant industry is currently experiencing an economic crisis marked by shrinkingrevenues and growing costs. The development of new business strategies and solutionsseems critical for industry players to survive this crisis and regain a market share in this

highly competitive industry. The choice of food and beverages as well as the architectureand additional services can be one strategy in this development. Additionally a soundcost management is of critical importance for a solid stream of revenues. Big industryplayers have shown that even in a stagnating market growth rates of more than 20% canbe sustained.

Many businesses in the industry have failed to adjust their strategy when customerdemands and environmental factors changed. The most critical failures in such timeswere non-competitive offerings, unsatisfactory service, slacking cost control andmanagement mistakes. On the other hand, companies that reacted flexibly to theirchanging environment show significantly higher revenues and margins and increased

shareholder value.

The operation of a coffee bar with internet access that offers a range of classical and newcoffee products and a selection of food is the core of this start-up. A strong focus of thisbusiness will be placed on the development and marketing of broadband internet access.As an add-on the shop will sell the entire range of goods from the restaurant segmentover-the-counter which will help utilize store and employee capacity. This offer willinclude coffee and tea as well as other coffee equipment but also technical equipment.The range of products is selected to provide solid growth potentials.

The operation of this business requires a good knowledge of the restaurant industry aswell as a competitive service concept to increase customer satisfaction. The demand toexplain the handling of computers and internet software is likely to require a high degreeof individual customer advise. However, it is critical that this service is offered with astrong focus on cost management.

One central goal of the proposed business strategy is the development of an owncorporate identity. Such identity will create customer loyalty and help gain a competitive


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advantage. Therefore it is planned that additional to the selection of shop products acompany design is developed.

The required investment for the proposed business are moderate compared to othercompanies in the industry. Labor is expected to be the main cost driver whereas no other

substantial investment in fixed assets is required. Depending upon the location therequired investment amount ranges between $1,200,000 and $1,500,000 in the start-upphase based on a 15-18% revenue margin. This amount is well within the financialrequirements observed for comparable companies.

1.2 Product/Service Description

The business will operate in the specialized industry segment of providing cateringservices in a coffee shop. An additional source of revenues is the sale of internet accessand technical equipment. Cross selling is planned to be one of the prime strategies in thisbusiness since all products are targeted to serve a similar need and can easily becombined. Synergies in selling product across business segments is likely to boost

earning further. Net earning are expected to be at least 6% above traditional coffee bars.

Figure 1.1 shows the revenue mix across segments in the start-up phase. This projectionis based on the expected strategic direction, investment amount and businessenvironment. Being the core business the catering segment is expected to generate thelargest share in revenues. The sale of a limited assortment of refreshments and snacks isexpected to be another important generator of revenues which also helps utilize investedcapacity. The sale of internet access time is expected to be intensified depending uponmarket conditions.


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2. Company Background

The goal of this start-up is the operation of a coffee bar with internet access terminals and aninside and outside service area. The focus of this business will be on the catering servicesegment, i.e. the preparation and sale of food and beverages as well as on the sale of aselection of coffee beans. Additionally, the sale of internet access and technical equipment isplanned to guarantee an optimal utilization of personnel and store capacity. An initialinvestment amount of $450,000 is required which will allow the operation of 220 square feetof store with 10 employees. Sales revenues are expected to range between $900,000 and$1,500,000 in the start-up phase and the operation is expected to generate profits starting inthe second or third business year.

2.1 Business Description

Management is expected to have a solid knowledge of bringing the coffee experience tothe customer as well as table service knowledge. The goal is to create a modernatmosphere in which the customer experiences competent service. A well chosen andtargeted food and beverage selection will complement this strategy. Both aspects are acore requirement to build customer loyalty. In the mean run repeat customers areexpected to generate revenues of 40% and more. Although this strategy is likely torequire additional investments it is expected that revenues per customer will increasesignificantly and range above industry average. Furthermore this strategy will provide aclear entrance barrier for prospective competitors.

The development and promotion of a corporate identity is another central task formanagement. Given the homogeneity of businesses in this industry the development of acorporate identity will markedly increase sales revenues and build a customer base.Furthermore a corporate identity will support expanding the business to a larger regionaltarget market.

2.2 Company History

In the start-up phase the business is operated as a one-man-business. This set up carries acertain risk potential because of the high equity stake the manager bears and the personaland statutory liability assumed. However, this set-up preserves a high degree offlexibility in managerial decision taking.

The number of personnel to be employed depends on the structural complexity of the

operations and the desired size. Figure 2.1 shows a break up of costs in the industry. It isexpected that the target employee earns a monthly salary of $2,400 to $2,500 based on 40hours per week. The sales and service area requires 4 employees on average working in 2shifts. Due to illness and vacation times in the long run an average of 10 permanentemployees will be required. With increasing sales and better utilization of employeework time revenue margins, and thus costs per employee will decrease on average. Withrevenues ranging around $2,000,000 capacity utilization is expected to be around 85%.


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During the start-up phase a single person will attend to all necessary management task,coordinate employees and provide strategic direction to the developing business.Accounting, administrative and machine maintenance will be outsourced to externalpartner since those tasks can typically be provided at better rates externally. Sourcing andmarketing will require one employee.

Finding the optimal location for a business is one of the key success factors in the shortand long run. The following analysis is based on 10 businesses in the restaurant industryin a demographic environment comparable to the location planned for the coffee shopand with very similar product offerings. Since a coffee shop is recruiting its businesstypically only from the area immediately near by the shop this proximity is regarded asthe relevant market for the shop.

For the planned location the following factors are regarded as relevant:

The passenger frequency is expected to be high given the close proximity to a walkingarea. This will positively affect demand.Administrative costs are expected comparably small given the expected revenues.The possibility to recruit additional personnel is favorable.Public institutions are expected to provide additional sponsoring.

Because of the favorable growth perspectives in the chosen market and growinginvestment activities we expect to realize yearly growth rates in revenues of 20-25%given a 4% economic growth rate.


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3. Business Plan For An Internet Coffee Shop Start-up

The catering service area is planned for 15 tables inside and outside the bar. This sizeprovides capacity for 60 people. This area is planned as a full service area in refreshmentsand snacks. The refreshment choice will include a selection of specialty coffees and othermiscellaneous drinks. The selection of coffees will include traditional flavours as well as newand innovative mixtures. This strategy provides a competitive edge against other coffee barsin the close vicinity and is expected to generate additional demand and the possibility for aprice mark-up. Such mark-ups are impossible to achieve in the classical coffee segment sincethe high competitiveness of this segment competes away any price differentials. New coffeeflavours still have a mark-up potential of 15-20% above average while the additional cost isminimal at 5%. This provides a 10-15% margin. Since such new coffee flavours meet a highcustomer demand the selection of flavours can be extended regularly. Such strategy shouldfocus on flavours with the highest mark-up potential.

To complement the assortment of coffee we plan to offer a limited selection of snacks. Thefocus in this segment will be on light Italian style food that is easy to prepare. This strategywill keep the investment in kitchen appliances within limits. Additionally, the variable costof preparing the food will be small which will allow a pricing strategy targeting thelow-budget clientele. The specific selection of foods offered will be monitored constantlyover time and vary according to business needs.

The offer of coffee and beverages over the counter will be a another important source ofrevenues. For food storage a cooling unit will have to be installed on the premise. Coffee willbe sold over the counter ground or unground by weight. A selected assortment of Italian stylefood will be sold over the counter as well. The individual sales service of each customer is akey element of this segment.

This strategy will help utilize the capacity in personnel since it allows for an optimalcoordination of employees. All employees will be trained to cover all aspects of service,internet knowledge, sales, over-the-counter sale and service area work. This requires thateach employee has full knowledge of the food and beverages selection in the shop. Thisconcept is adaptive to changes in customer demand.


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4. Services

One of the key elements of a successful business in the coffee-shop industry is the selectionof services that are currently as profitable as possible. One key element of a productpresentation against the customers is to minimize the costs and to increase the profit. Theinternet access demand shows high growth rates and will boost earning in the othersegments. Initially, the investments in inventory of this segment are limited. The experienceof the employees will support customer demand and also increase sales. The additionalselling of technical equipment will also be positive for sales and earnings.


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5. The Industry, Competition, and Market

A careful analysis of the market and competitive forces in this industry is a key element inassessing the business potential of our project. This analysis will provide marketing- andsales data that are indispensable to develop the business potential optimally. The maincompetitors are internet- and coffee-shops with a similar selection of services, food andbeverages and comparable size. Since the planned project is of regional scope only thecompetitive analysis will have to focus on the local market environment. The market analysiswill be based on the entire market.

5.1 Market Definition

Figure 5.1 shows average growth figures in revenues of coffee shops during the past 5years and revenue estimates for the year 2003. Despite slowing global economic growthin general and in the restaurant industry in particular, coffee bars have experiencedconstant growth rates of more than 20% since 2001. For 2003 a growth of 25% isexpected while the 3rd quarter is expected to show a very pronounced growth.

Despite slowing economic growth and decreasing customer demand the catering industryunderwent a relatively favorable development. New and innovative business conceptswith internet access terminals still show high growth potentials while growth rates oftraditional businesses in that industry were below average. The significant growth of newbusiness concepts is primarily due to sharp cost control and more efficient businessstrategies that accounted for higher revenue and earning figures. According to industryestimates 35% of such innovative businesses gained from cross-selling activities betweentheir business segments. Sinking prices of products and raw materials have allowed theindustry to partially compensate for slowing demand. Savings in input costs were alsodue to decreased labor costs. However, starting in 2004 this trend is expected to reverseand growth rates will pick up markedly despite the uncertainty in the development ofinput prices and governmental tax policies.

5.2 Primary Competitors

The competitive environment is primarily determined by the choice of location. Butregardless of the location high mark-ups are not feasible in the long run since this will


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attract competitors who compete away any rents. With a high density of businesses in onelocation businesses with the highest marginal cost will be driven out of the market. Suchlocations will yield a return of 12-15% on average. This is the expected equilibriumreturn in a saturated market. To further analyze the competitive environment it isnecessary to define the players in that environment. A firm that generates $1,000,000 to

$1,500,000 in revenues and employs 25 people should regard a firm with revenues andpersonnel 3 times this figures as a viable competitor. On the product and service side,businesses with a comparable selection of offers are regarded competing in the samemarket segment. Since the planned business is in the coffee bar segment of the restaurantmarket with a very specialized range of offers we regard any business that trades in asimilar segment and similar location as a competitor. Figure 5.4 shows the size ofbusinesses in this market segment which also includes coffee chains. The numbers arebased on average revenues of a single branch in a highly frequented location.

5.3 Customer Profile

The specialized product and service offerings are primarily targeting a young andfinancially strong clientele. A possible segmentation to identify this group is income aswell social groups which allows to determine revenue and earnings per customer or totalrevenues and earnings. Segmenting the target market is a key element for the design of anappropriate marketing strategy.

Figure 5.2 shows revenues by social group. Numbers are based on average sales percustomer of a particular group multiplied by the member of individuals in the respectivegroup. This gives total revenues per group. As can be seen businessmen, pupils andstudents generate high revenue streams. Members of these groups are frequent internetcoffee bar visitors. Although the total visits of tourists and random visitors are relatively

higher total revenues from this segment are smaller because members in this group areless frequent visitors.

Figure 5.3 shows revenues by yearly income. The figure shows revenues generated perincome group. Numbers are based on the average income per customer and the number ofcustomers per income group. As can be seen customers in the middle income cohortgenerate the highest revenues. High frequented low income groups such as students andpupils also generate relatively high revenue streams although revenues per customer are


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relatively lower.


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6. Marketing Plan

In the start-up phase it is a central task of the marketing concept to establish a namerecognition and own trade mark. Later on the strategy will primarily be targeted to gain newcustomers and create customer loyalty of repeat customers. Several marketing and salespromotion strategies are available in the catering industry. Figure 6.1 shows differentmarketing elements and their use in marketing strategies as well as their estimated potentialsuccess factor. The figure can serve as a direction for the planning of a marketing and salespromotion strategy. The numbers are based on typical businesses in the catering industry. Ascan be seen printed advertisements targets a large potential customer group but at a relativelyhigh cost. Printed advertisements in regional newspapers and magazines is regarded as verybeneficial in the start-up phase to attract a large group of potential customers and drawattention to the range of articles offered. 39% of businesses in the catering industry useprinted advertisements and about 50% of this group regard this as the most beneficial form ofmarketing. Sales promotion strategies have temporary effects only. They are used at shopopenings primarily and offer special discounts. 49% of businesses use sales promotionstrategies frequently and 81% of the users responded that this instrument is successful.Marketing alliances of regional businesses to generate cost savings and increase efficiencyare used rarely. Such strategies include mutual use of marketing and web promotion eventsand joint promotion arrangements. Only 41% of businesses have used these elements and81% of these regard this instrument as beneficial. Web and e-mail marketing is not usedfrequently in the catering industry although this would be a relatively inexpensive additionaleffort especially for an internet coffee shop. Direct mailings are a very efficient strategy thatsends mailing to selected student or businessmen groups. Since spreading costs of suchmailing are very low this marketing element provides a useful tool for special offerpromotions.

The use of marketing and sales promotions proceeds as follows: to a broad base attract newcustomers the strategy will include a combination of printed advertisements and specialoffers with opening discounts. Furthermore a group of customers will be selected for directmailings. This strategy is expected to continue for 3-4 months after which the effort will turntowards creating a customer loyalty for regular customers. This strategy is supplemented by aregular marketing strategy and direct mailings to regular customers. A marketing allianceand online advertisements will also come to use.


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7. Financial Plan

A sound financial plan is the key factor for the success of a business start-up. Investors andbanks will base their funding decision on the information given in this plan. Besides a plan ofthe financial needs this plan must insure that the business is always liquid and ultimatelyprofitable. Since the sales and earnings projections in the business plan are based onexpectations, the financial plan has to be revised and refined on a constant basis so thatdiscrepancies can be uncovered and solved instantly. The inputs for this financial plan arebased on 10 businesses of different size and market segments in the catering industry whichserve as a group of comparable firms as well as own estimates based on the planned businessenvironment. Revenue estimates are conservative and expense projections include a cushionfor unforeseen contingencies.

The initial capital requirement is estimated to be $450,000 . The sales margin is expected tobe 14-15% whereby each business segment contributes differently to sales and earnings. Theclassical catering segment which involves the servicing of food and beverages on-site will ofall segments have the smallest contribution to sales in relative terms (11%) but given thehigh sales volume the largest in absolute terms. Revenues from internet access sales can bedifferentiated into those from flat fees to time dependent fees. The sale of coffee is expectedto generate a 10% sales margin while the margin from sales of internet access is expected tobe closer to 12%. Since the sales revenue of lower priced coffee and coffee products isexpected to be larger this segment will generate a significantly higher profit. Figure 7.1shows the source of revenues by segment during the start-up phase.

Depending on the initial investment sum cost and revenue estimates vary. Figure 7.2 showsthe expected relationship of cost and revenues. As can be seen the relationship is not lineareverywhere but costs decrease relative to sales at an initial investment of $1,500,000. Thiseffects is due to the better utilization of capacities in personnel at rising revenues at constantcost. If capacity is fully utilized additional personnel must be recruited. At an investmentsum of $2,000,000 administrative costs are expected to return to a linear relationship of sales.At sales levels between $1,000,000 to $2,000,000 costs increase by the factor 1.85. The costrevenue relationship is important not only during the start-up phase but also for plannedfurther expansion. Often such expansion strategies are based on this relationship. Otherindustries are able to generate cost savings of 30-50% during expansion periods while for thecatering industry this factor is close to 15%. At a specific size this relationship reversesbecause administrative costs rise sharply. This affects small businesses between 10 and 20employees most severely.

The details of the financial plan are laid out in more detail as follows:

Section 7.1 gives an investments schedule. This includes all investments necessary during thestart-up phase.

Section 7.2 gives a break-even analysis that shows revenues at the break-even point. Everyadditional sales revenue adds to profit and vice versa.


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Section 7.3 gives a liquidity plan. This plan is based on current cost and revenue estimatesfrom Section 7.2. Liquidity must always be positive.

Section 7.4 contains a long-term profit projection for the first 4 years of business. Theprojection shows that the critical amount of revenues at which the business is profitable and

how profit develops over time.

Section 7.5 provides a risk analysis. The risk analysis contains critical factors that mayimpact the financial numbers presented in this plan.

7.1 Investment PlanThe investment plan comprises primary capital needs for the foundation and operation ofan internet coffee-shop with a selected offer of coffee, tea and additional equipment forsale. The plan also includes initial marketing and sales promotion expenses.

The figures are based on a business with 12-15 employees and expected revenues of$1,500,000 in year 2-3.


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7.2 Break-even Analysis

The break-even analysis shows how earnings rise as a function of sales. The break-evenpoint is the point at which revenues from sales cover total costs (fix costs and costs risingwith sales). This analysis is important for the development of the liquidity plan. If thebreak-even point is not achieved in the long run the business loses liquidity and maybecome insolvent. This requires that a critical amount of revenues must be generated.

At a sale revenue of $1,250,000 and given fixed costs the business will generate a profit.

Fixed costs are estimated at $350,000 to $400,000 and variable costs at $900,000 .

At a realizable revenue of $1,500,000 after 2-3 years profits will rise to $225,000 pre-tax.This represents an earnings margin of 15% pre-tax and 10% after-tax. These estimatesare realistic in this market segment. Increasing sales volume will increase pre-taxearnings margins but this development reverses when administrative costs begin to risesharply. Up to a sales volume of $2,000,000 earnings margins rise to 17.5% after whichthe margin decreases to constant 15.5%.


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Figure 7.3 shows at which critical sales volume the business generates a profit. Thisserves as a base for a pricing strategy. Additionally the graph shows the amount of salesat which a marketing campaign can be run profitably.

7.3 Liquidity Plan

The liquidity plan shows the amount of finances necessary to assure permanent liquidityof the business. The plan is based on 4 representative months of a typical business with15 employees and annual sales of $1,500,000. Revenue estimates are drawn from astandard normal distribution.


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7.4 Earnings Plan

The earnings plan shows the results from ordinary operations. The plan is based on thefirst 4 years of business. Revenue estimates are drawn from a normal distribution with anestimated growth rate of 15 to 20%.


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7.5 Risk Analysis

The risk analysis considers critical factors that may lead to a failure of the businessconcept. Such factors can involves failures during the implementation phase as well asduring operations. Such potential factors are ordered according to the probability atwhich they can arise. Shown is the key factor that led to the failure only. Data are drawnfrom questionnaires of 10 catering businesses with comparable product offerings andrevenue- and cost structures that went bankrupt during the last 3 years as well as analysesof different research institutes.

1. Insufficient demand: This is the most frequent reason that leads to businessfailure. This includes permanently low demand as well as a temporary collapse indemand. Often demand estimates were too optimistic at the outset. Such failures mightalso come from external shocks instead of operating deficiencies. 19% of businesses withinsufficient demand go bankrupt. 50% of these businesses report that once demandslacked they did not react accordingly because they believed that this phenomenon wasonly temporary. Since the expected frequency of customers during the start-up phase are


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still low a critical success factor is to focus promotional effort so as to generate customerloyalty early on which will help minimize the effects of demand fluctuations.

2. Behavior of Competition: Due to low entry barriers additional businesses canenter the market at low cost. Approximately 16% of insolvent businesses were driven out

of the market by that competition. A better service concept, innovative ideas andconcentration on core businesses are an easy means for an entrant to gain a competitiveedge.

3. Personnel and capacity utilization: Often personnel capacity cannot be adjustedflexibly easily when demand slows down. Currently catering businesses have a capacityutilization rate of personnel of 70%, i.e. 70% of employee working hours can be directlycredited to sales. At small businesses this value is often lower which means that 30% ofworking hours arise without generating any further revenue. 13% of such businesses gobankrupt for this reason.

4. Liquidity constraints: Another frequent reasons for bankruptcy is in sufficientliquidity. In that case it is possible that all liquid funds are used to cover losses or thatliquidity needs were planned too tight. To be able to flexibly react to changing liquidityneeds it is important that sufficient funds be planned even during the start-up phase thus5-10% of the investment sum should be held as liquidity reserve permanently. 13% ofinsolvent businesses reported liquidity as the reason for bankruptcy.

5. Over-indebtedness: Many business are run on a small equity base. The majority ofinvestments are funded by debt. If the business becomes unprofitable, debt obligationscannot be covered. Little more over 10% of insolvent firms reported over-indebtedness asthe reason for going bankrupt. It is therefore important that a share of earnings is retained

for debt service.

6. Macroeconomic Conditions: In a cyclical downturn revenue expectations my notcome in according to expectation. Although this factor does not affect the business initself it does have an impact on profitability, liquidity and leverage. Cost remain constantduring such period but revenues typically decrease which affects overall profitability.10% of all insolvent businesses report that they went bankrupt due to macroeconomicconditions although the relevant indicators of the business looked healthy.

7. Location: The business location is an important success factor and one of thefundamental decisions that have an impact on the future prosperity of the firm. Therefore

a careful analysis with detailed data is indispensable. More than 10% of insolventbusinesses reported that they went bankrupt because of the wrong location. Oftenstart-ups did not consider that even when the choice of location may not be wrong at theoutset it may later become so when economic conditions worsen. This may be due tostructural of demographic changes.

8. Wrong Business Decisions: Often wrong business decisions and difficult situations gounnoticed for some period which can lead to a failure of the business. A critical and


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independent reflection of a decision are critical factors to determine the value of amanagement decision and evaluate the business' profitability. Studies have shown thatmany businesses fail in their start-up phase because of managements inability to makesound business decisions while one a business is settled such mistakes are very rare. Acritical management instrument is the ability to detect potential failures and problems.

Certain key figures can help measure this ability and allow to objectively determine adecision's chance for success. Small businesses should use such indicator ratios to assesstheir business outlooks.

Figure 7.5 shows the relative importance of each factor for businesses that went bankrupt.The numbers are based on the most relevant reason that triggered bankruptcy but not thereason responsible for bankruptcy. As can be external factors that changed thecompetitive environment and changing macroeconomic conditions were the mostimportant reasons relative to internal factors.


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8. Conclusion

The coffee shop segment with internet access terminals is one of the most profitable with inthe catering service industry while almost any other segment in the market currently livesthrough a difficult time. This situation is mostly driven by the competition of larger chains. Abusiness that successfully survives the current temporary slow down can be certain ofincreased profitability one the situation rebounds.

The relatively modest investment requirements and running costs (compared to a classicalcatering services business) are a favorable argument since external funds from banksbecomes more difficult since the risk aversion to finance such ventures has risen. A personwith specific knowledge and innovative ideas has good chances to move into profitablemarket niches and run a successful business. Market conditions chance constantly as docustomer demands. This is the chance for businesses with innovative ideas and new offeringsto secure a dependable customer basis. Service is a critical factor that can earn a competitiveedge. This is also true for new trends in the industry to better control costs and increaseefficiency.

For a successful operation of an internet coffee shop 5 factors are critical and central for thebusiness strategy:

- In the catering industry it is important that the customer experiences a friendly andcompetent service. This will secure customer loyalty in a market that is very competitive.

- The utilization of personnel capacity is critical for the long-term profitability because ofchanging margins and the constraints to flexibly reduce personnel. Therefore the cateringservice segment of the business is integrated in the sale of technical equipment.

- A carefully selected assortment of food and beverages as well as the selected choice ofcoffee specialties is a potential to gain a competitive edge against competitors. Furthermorea service that aims to give the customer an added value through a 'coffee experience' canjustify price mark-ups.

- A critical factor in the services industry is quality management. Better quality at lower costincreases customer satisfaction. Deficiencies in service quality can lower demand whilegood service quality can help create customer loyalty.

- Cost management is a critical success factor for businesses in industries where margins are

low. Computer aided planning is an integral part of cost management.

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Business Plan Internet Coffee-Shop

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