University of West London

Claude Littner Business School

Project Management

Business Plan

Project Matcha Tengoku Coffee Shop

Student ID: 21236743

Module: Project Management

Deadline: 7 th December 2015

Plagiarism Statement

I declare that this project was written by me and in my own words, except for quotations from published and unpublished sources which are clearly indicated and acknowledged as such.

Table of Contents

Plagiarism Statement ………………………………………………………………………………………………………………2

Project Summary ……………………………………………………………………………………………………………………..5

1.0 Project Scope ……………………………………………………………………………………………………………………..6

1.1 Business Need …………………………………………………………………………………………………………………….6

1.2 Opportunity Statement ……………………………………………………………………………………………………….6

1.3 Project Goal …………………………………………………………………………………………………………………………6

1.4 Project Objectives ……………………………………………………………………………………………………………….7

1.5 Project Benefits …………………………………………………………………………………………………………………..7

1.6 Project Considerations ………………………………………………………………………………………………………..7

1.7 Critical Success Factors ………………………………………………………………………………………………………..7

1.8 Project Deliverables …………………………………………………………………………………………………………….8

1.9 Critical Assumptions and Constraints …………………………………………………………………………………..8

1.10 Product characteristics ………………………………………………………………………………………………………8

1.11 Project Stakeholders ……………………………………………………………………………………………………….10

1.12 Kick-off Meeting ………………………………………………………………………………………………………………10

2.0 Project Planning ………………………………………………………………………………………………………………..10

2.1 Project Integration Management ………………………………………………………………………………………10

2.2 Project Work Breakdown Structure …………………………………………………………………………………..10

2.3 Project Time Management ………………………………………………………………………………………………..11

2.4 Cost Management …………………………………………………………………………………………………………….11

3.0 Project Execution ………………………………………………………………………………………………………………11

3.1 Project Quality Management …………………………………………………………………………………………….11

3.2 Project HR Management ……………………………………………………………………………………………………12

3.3 Project Communication Management …………………………………………………………………………12

3.4 Project Risk Management ……………………………………………………………………………………………..12

4.0 Monitoring and Controlling ………………………………………………………………………………………………12

5.0 Closing the Project …………………………………………………………………………………………………………….13

6.0 Recommendation ………………………………………………………………………………………………………………13

References ………………………………………………………………………………………………………………………………14

Appendix 1. Business Case ………………………………………………………………………………………………………15

Appendix 2. Stakeholder Register ……………………………………………………………………………………………20

Appendix 3. Work Breakdown Structure …………………………………………………………………………………21

Appendix 4. Responsibility Matrix …………………………………………………………………………………………..22

Appendix 5. Gant Chart …………………………………………………………………………………………………………..23

Appendix 6. Cash Flow …………………………………………………………………………………………………………….24

Appendix 7. Technical Plan ……………………………………………………………………………………………………..25

Appendix 8. Communication and HR plan ……………………………………………………………………………….26

Appendix 9. Risk Management Plan ………………………………………………………………………………………..28

Project Summary

Project name: Project Matcha Tengoku Coffee Shop

Project start date: 5th November 2015

Project end date: 10th December 2015

Project goal: The goal of this project is preparations for opening a coffee shop in Japanese style

Project location: Covent Garden Arcade, Covent Garden, London WC2E 8RF

Project Need: This coffee shop is intended to be a wonderful place for friends and family meetings, for workers and professionals releasing stresses. The shop also offers “all in one” service consisting of books, arcade games and a lot of occasional vouchers and discounts which will definitely attract a large customer base.

Project Description: The coffee shop will suit customers who want to experience a new taste of high quality blended matcha coffee. The coffee shop size is estimated around 40 square feet with fitted sitting areas and tables and can host up to 50 customers. The coffee shop will also provide customers with free Wi-Fi, books and arcade games.

Project Budget: The estimated initial budget is £200,000.

Success criteria: The project will be successful if it is launched at the expected date 10 th Dec 2015 so that it can fully operate for Christmas season.

Project manager: Albert Abc

Project team: Ted Def – Financial Officer Emily Acb – Remodelling Supervisor

Owen Xyz – Risk Analyst

1.0 Project Scope

1.1 Business Need

London – a traditional but luxurious city in Europe - is famous with a wide range of nicely brewed coffee shops. With the long tradition of drinking coffee, the introduction of a new kind of smooth drink like matcha (green tea) is believed to create a fresh image for the city. As a result, Matcha Tengoku Coffee Shop is established with the purpose of becoming a frequently must-come place for local people who love or even addict to matcha and coffee consumption as well as Japanese culture. This coffee shop is intended to be a wonderful place for friends and family meetings, for workers and professionals releasing stresses. The shop also offers “all in one” service consisting of books, arcade games and a lot of occasional vouchers and discounts which will definitely attract a large customer base. With the increasingly high demand for quality green tea products and services, Matcha Tengoku will take an advantage of renting a place at the centre of London so as to build up a pool of repeat customers. Matcha Tengoku will deliver to its customers the best brewed cups of matcha together with cakes, waffles, ice cream and other free compliments.

1.2 Opportunity Statement

Statistical data have shown great opportunities for coffee shop start-up. According to Mintel Coffee UK August 2014 Report, two thirds of consumers purchase coffee or hot drinks in coffee shops. Another Mintel report (2014) on coffee further states that around 19% of out-of-home coffee purchasers prefer coffee shops that have unique products on sale and the age group 16-14 is mostly likely to not drink coffee out of home at all, suggesting coffee shops widen their menus on non-caffeinated drinks to broaden the appeal amongst those specific consumers. The project team has also conducted a research on demand of young people for Asian drinks made from green tea powder and received positive feedbacks. The analyst from the project team has also noticed that there are relatively few coffee shops that offer Japanese drinks and pastry related to matcha in London. The chosen location for the premises, which is Covent Garden Arcade, also plays a significant role as it is a prime location where a lot of people come to have a meeting over a drink. The Covent Garden Market also helps to draw customers. With such opportunities, Matcha Tengoku coffee shop project has been initialised.

1.3 Project Goal

To lease a premises and set up the shop with needed assets and decorations.

1.4 Project objectives

The main objectives of Matcha Tengoku during the first year of running are:

- To be ranked top in most of websites, forums for foodies.

- To be selected as the “Best Matcha Shop” in London.

- Achieve profits from the third month of operations.

- Maintain profit margins above 65% annually.

1.5 Project Benefits

- To promote new, unique types of hot and cold drinks- To bring the Japanese culture closer to Londoners- To provide customers with a unique, cosy and comfortable place for meetings or tasting drinks

1.6 Project Considerations

- Strong competition with branded coffee shops or fast food chains selling coffee and hot drinks- Not everybody is familiarised with Asian drinks and thus might not be willing to try - Saturated market for coffee drinks- High prices for ingredients and thus products will be a bit more expensive than normal drinks

are- Ecological impact on the environment, such as utilising more plastic cups causes more waste

being produced

1.7 Critical Success Factors

- Unique and cosy design that is attractive not only to outside people, but also to sitting-in customers

- Shop designs are to serve fast and efficient operations- Staff will be trained in-depth for the purpose of delivering the best services to customers

- Promotional and marketing campaigns for promoting and developing a large base of customers, together with pushing up sales of quality and high priced coffee types, for instance, espresso

- Regulations, taxations and food safety are consistently followed to ensure effective operations

1.8 Project Deliverables

The coffee shop will be available for customers on the 11th of December 2015. The shop will appeal to all age groups and will be functioning 7 days a week, from 8am till 10pm on week days and 12pm on weekends.

1.9 Critical Assumptions and Constrains

Assumptions

- Work to acquire lease contract for the premises and decorations will be completed within approximately a month and will take place from the 5th of November 2015 to the 10th of December 2015

- The coffee shop will be available for customers from 11th of December 2015- Tip Top Builders Ltd. Will be in charge for premises refurbishment - Project will fill in the market gap in coffee retail- Matcha Tengoku will meet the need of highly demanding customers- Project will meet food safety standards and regulations

Constraints

- Capital budget is restricted - Time reserved for project completion is limited - Pressure due to the urgent need to finish before Christmas season

1.10 Product characteristics

The main aim of the project is to open a coffee shop that sells drinks related to green tea powder, teas of various oriental flavours and pastry.

The main product will be “Matcha Drinks”

There are variety of Matcha drinks could be offered:

Matcha Latte

Vanilla Red Bean Latte

Matcha Coconut Latte

Matcha Almond Latte

Mint Matcha Latte

Matcha Latte Oatmeal

Matcha Latte with Soy milk

Peppermint Mocha Mocha Matcha Latte

Iced Matcha Latte

Iced Matcha Azuki

Also, several types of other tea would be served to satisfy customers who look for diversity:

Jasmine tea

Sencha

Genmaicha

Hojicha

Shincha

Kamairicha

Patisserie, cakes can be served in companion with matcha drinks

Matcha Green Tea Macaroons

Matcha Macaroon with Guava

Matchamisu - Green Tea Tiramisu

Matcha Cheesecake

Matcha Cake Roll

Matcha soufflé

Matcha donuts

Matcha cupcake

The major service is carried out in-store. Boutique and friendly staffs will serve customers to the best satisfaction by providing both take-away and eat in options for visitors.

1.11 Project Stakeholders

Various project stakeholders are involved in the project that include internal and external stakeholders. Internal stakeholders are those who run the day-to-day operations inside a business whereas external stakeholders do not work inside the business but hold a significant role for the business. A detailed stakeholder register is included in Appendix 2.

1.12 Kick-off meeting

A kick-off meeting is held for all stakeholders so that they can meet and discuss about the desired goals of the project, as well as future actions. Project manager will be in charge to invite correct people to the meeting, as well as to hand out an agenda prior to the meeting. During the meeting, the business case (Appendix 1), scope of the project and work breakdown structure (Appendix 3) will also be discussed.

2.0 Project Planning

2.1 Project Integration Management

Project integration management involves processes that ensure that all elements of the projects are coordinated. The main task of project integration management is to develop a project management plan. Other activities may include, for instance conducting a team contract to highlight teamwork or team communications.

2.2 Project Work Breakdown Structure

Work Breakdown Structure (WBS) is “one of the key scope management tools used to subdivide the scope of work (…) into manageable work packages that can be estimated, planned, assigned and controlled” (Burke, 2006, 95). A detailed WBS for Project Matcha Tengoku Coffee Shop is attached in Appendix 3.

2.3 Project Time Management

To complete the project successfully, finishing all tasks and activities within the specified project length is crucial. Otherwise, it will lead to more costs associated with extended time to complete the project. The estimated time schedule for this project is 1 month and 5 days. A Gant chart (Appendix 5) shows the detailed time for each task or activity.

2.4 Cost Management

The estimated initial funds for the project is about £200,000. The cash flow statement attached in Appendix 6 illustrates a breakdown of costs

3.0 Project Execution

3.1 Project Quality Management

It is exceptionally essential to “plan for quality in performing the project to assure that the work is done according to specifications and applicable standards and that deliverables meet acceptance criteria” (Clements and Gido, 2012, 95). Project quality plan involves quality planning, quality assurance and quality control. A quality plan usually includes ‘’specifications, industry or government standards and codes’’ (Clements and Gido, 2012, 96) that must be followed throughout the whole length of the undertaken project. Quality assurance includes “written procedures for using various quality tools and techniques, such as audits” (Clements and Gido, 2012, 96). The quality control plan includes monitoring quality of the work performed during the project, comparing results and making any necessary corrections (Clements and Gido, 2012). Project Matcha Tengoku Coffee shop is subject to many quality standards that include for instance supplier selection standards.

3.2 Project HR Management

Human resources management plays a vital role in achieving success in any business. Hence, it is extremely important to clearly define roles and responsibilities among staff by creating a HR plan (Appendix 8) and responsibility matrix (Appendix 4).

3.3 Project Communication Management

A documentation on communication management plan (Appendix 8) describes how often communication should occur and under what form.

3.4 Project Risk Management

To some extent, a project success greatly depends on how effective risk management is. For Matcha Tengoku Coffee Shop to succeed, risks must be identified and a contingency plan established. A detailed risk management for this project is included in Appendix 10.

4.0 Monitoring and Controlling

To ensure that the project meets its objectives and standards as changes may occur during the length of the project, project manager (Albert Abc) will be monitoring and controlling the project. Activities for this stage include collecting, measuring and disseminating performance information.

5.0 Closing The Project

The Project Matcha Tengoku Coffee Shop will be closed on the 10 th December 2015. After closing the project, a final report on undertaken work types and their outcomes will be conducted by the project manager (Albert Abc). The Match Tengoku Coffee Shop will be open to customers on the 11 th December 2015.

6.0 Recommendations

The main purpose of the project is to create a place with unique mix of drinks in Japanese style where customers can experience a new taste of oriental culture, as well as spend quality time with friends, family or enjoy time on their own. The recommendations for this projects are the following:

- Transform the Matcha Tengoku coffee shop into a local meeting destination- Focus on speed-fast service to meet customer expectations- Keep the menu expanding for more unique products to attract more customers

References

CHILDE, H., 2014. Coffee Shops - UK - December 2014. Mintel.DOUGLAS, F., 2014. Coffee - UK - August 2014. London: Mintel.J., Clements and J., Gildo, 2012. Effective Project Management. 5th edn. South-Western/Cengage Learning.R., Burke, 2006. Project Management: Planning and Control Techniques. 5th edn. John Wiley & Sons.

Appendix 1. Business Case

Business Case

1.0 Introduction/Background

Covent Garden Arcade is a hectic place where Londoners and tourists come to visit the Covent Garden Market and many other attractions. The currently unused pop up stores are available for lease and this gives an opportunity to open a coffee shop to serve customers coming by Covent Garden.

2.0 Business Objectives

The primary objective of this project is to bring a Japanese-style coffee shop into operation and to promote a new kind of oriental drinks to Londoners. This will give customers an opportunity to spend quality time with friends or family over a fine drink in a uniquely designed café.

3.0 Current Situation and Problem/Opportunity Statement

Currently, there are few coffee shops in London that offer drinks or pastries made from green tea powder. Research has shown that the market for coffee drinks has been saturated due to a large number of coffee shops in the capital city and that people, especially younger group age, are now looking for new types of non-caffeinated drinks. Therefore, this is a golden opportunity to fill in the market gap by establishing an oriental coffee shop. Central London is also proven to be a prime location for setting up such business as it is always full and crowded.

4.0 Critical Assumptions and Constraints

Assumptions

- Work to acquire lease contract for the premises and decorations will be completed within approximately a month and will take place from the 5th of November 2015 to the 10th of December 2015

- The coffee shop will be available for customers from 11th of December 2015- Tip Top Builders Ltd. Will be in charge for premises refurbishment - Project will fill in the market gap in coffee retail- Matcha Tengoku will meet the need of highly demanding customers- Project will meet food safety standards and regulations

Constraints

- Capital budget is restricted - Time reserved for project completion is limited - Pressure due to the urgent need to finish before Christmas season

5.0 Analysis of Options and Recommendations

Recommendations

- Transform the Matcha Tengoku coffee shop into a local meeting destination- Focus on speed-fast service to meet customer expectations- Keep the menu expanding for more unique products to attract more customers

6.0 Preliminary Project Requirements

The main requirements of the selected project are:

- The products offered by the coffee shop fully meet the expectations of customers- Risks are fully assessed throughout the whole length of the project - Supervising refurbishment work so that everything is finished prior to specified end of the

project- Communication between project members to ensure the project meets the deadline

7.0 Budget estimate and Financial Appraisal

The estimated budget for the project is £200,000.

Financial Statements

7.1 Income Statement

Year 1(£) Year 2 (£) Year 3 (£)

Sales 180,000 260,000 400000

Costs of sales 45,000 70,000 100,000

Gross margin 135,000 190,000 300,000

Gross margin % 75% 73% 75%

Staff cost 30,000 40,800 48,000

Marketing expenses 10,000 12,000 15,000

Rent 42,000 54,000 60,000

Other operating expenses 12,000 17,000 20,000

Profits before interests and taxes 41,000 66,200 157,000

Interests 0 0 0

Taxes 9,430 15,226 36,110

Net profit 31,570 50,974 120,890

Net profit margin % 17.5% 19,6% 30.2%

7.2 Cash Flow Statement

Matcha Tenguko will maintain a healthy cash flow position, sufficiently for repaying any debts and funding for future development. Assuming that initially the cash balance is £50,000

Year 1 (£) Year 2 (£) Year 3 (£)

Cash received from sales 180,000 260,000 400,000

Operating cash flow 180,000 260,000 400,000

Cash spending 50,000 90,000 130,000

Bills payment 64,000 83,000 95,000

Net cash flow 66,000 87,000 175,000

Cash balance 116,000 203,000 378,000

7.3 Payback Period

Using the cash flow statement allows calculating the payback period for Matcha Tengoku Project which is the following:

Years Cash flow

0 (£200,000)

1 £116,000

2 £203,000

Payback Period 2 Years

7.4 Return on Investment (ROI)

ROI is calculated can be calculated using the following formula

ROI = Average Annual ProfitOriginal Investment x 100%

ROI for Project Matcha Tengoku is the following:

Annual Profit = 724,000−200,000

3=£174,666 per year

ROI = 174,666200,000 x 100% = 87,3%

8.0 Schedule Estimate

The project is estimated to take 1 month and 5 days, from 5th November 2015 to 10th December 2015.

The coffee shop will be ready to operate on 11th December 2015.

9.0 Potential Risks

The risks associated with the project are that refurbishment job is outsourced which may cause delays to completing the project on time and that communication between stakeholders may be vague. Other risks may include additional funding costs.

Appendix 2. Stakeholders register

Stakeholders register

5th

November 2015

Name Position Project Role Internal/External

Contact info

Albert Abc Project manager

Project supervisor

Internal Albert.abc@hotmail.co.uk

Ted Def Financial officer

Team member

Internal Ted.def@gmail.co.uk

Emily Acb Remodelling supervisor

Team member

Internal Emily@gmail.co.uk

Owen Xyz Risk analyst Team member

Internal owenxyz@gmail.co.uk

Mai Le Shop owner Internal mailekhanh@gmail.com

Customers Local community

External

Barista Staff Internal

Tip Top Builders

Ltd.

Contractor Outsourced job

External Tiptop.buildersltd@hotmail.co.uk

Kioko Japanese grocery

Supplier of raw materials

External Kioko.london@gmail.com

Toraya Supplier of External toraya@gmail.co.uk

raw materials

Appendix 3. Work breakdown Structure (WBS)

November 5th 2015

1. Initiating stage1.1. Identify stakeholders1.2. Prepare Business Case1.3. Prepare Project Charter1.4. Prepare scope statement

2. Planning Stage2.1. Project integration management2.2. Project scope management2.3. Project time management2.4. Project cost management2.5. Project quality management2.6. Project human resource management2.7. Communication management plans2.8. Project risk management2.9. Project procurement management

3. Executing Stage3.1. Project design acceptance3.2. Budget acceptance3.3. Compare contractors and suppliers3.4. Contracts drawn up with contractors3.5. Order materials3.6. Receive materials3.7. Remodelling works begin3.8. External risk assessment

4. Monitoring and Controlling5. Closing the project6. Post Project review

Appendix 4. Responsibility matrix

Task

Albe

rt

Ted

Emily

Ow

en

Shop

ow

ner

Cont

ract

ors

Supp

liers

Needs assessment A R I I I

Research local community A R

Appendix 5. Gant Chart

Start date Duration

Project initiating and planning 11/5/15 3 daysStakeholder meeting 11/8/15 1 dayBudget acceptance 11/9/15 1 dayProject design accepted 11/10/15 1 dayContractors selection 11/11/15 1 dayOrdering materials 11/14/15 3 daysMaterials delivery 11/15/15 1 daysRefurbishment works 11/15/15 17 daysMachinery delivery 12/2/15 2 daysFurniture delivery 12/3/15 3 daysMonitoring and controlling 11/5/15 35 daysExternal risk assessment completed 12/5/15 4 daysProject report completed 12/8/15 1 daysClosing the project 12/9/15 1 days

Task

Albe

rt

Ted

Emily

Ow

en

Shop

ow

ner

Cont

ract

ors

Supp

liers

Needs assessment A R I I I

Research local community A R

Appendix 6. Cash Flow Statement

Matcha Tenguko will maintain a healthy cash flow position, sufficiently for repaying any debts and funding for future development. Assuming that initially the cash balance is £50,000

Year 1 (£) Year 2 (£) Year 3 (£)

Cash received from sales 180,000 260,000 400,000

Operating cash flow 180,000 260,000 400,000

Cash spending 50,000 90,000 130,000

Bills payment 64,000 83,000 95,000

Net cash flow 66,000 87,000 175,000

Cash balance 116,000 203,000 378,000

Appendix 7. Technical Plan

Appendix 8. Communication and HR plan

Communication Management Plan

5TH November 2015

Project Name: Project Matcha Tengoku

1. Stakeholder Communications RequirementsCommunication tools and techniques that will be used during the project include verbal communication, emails, meetings ad reports. Internal project team members will provide project manager with information regarding the progress and problems related to the project. Communication between project team member and contractors or suppliers is needed for assuring that guidelines, as well as deadlines, are followed and met. The shop owner and local community will need communication with the project team member so that they are well informed about the project progress.

2. Communications Summary The following table illustrates how, in what form or how often communication will be delivered between stakeholders.

Stakeholders Communications Name

Delivery Method/Format

Producer Due Date/Frequency

Shop owner Weekly Status Report

Hard copy and short meeting

Mai Le Khanh Fridays at 4p.m

Project Team Weekly status report

Short meeting All team members

Fridays at 9a.m

Contractor Daily status report

Verbal Communication

Tip Top Builders Ltd.

Every day by 5.30pm

Suppliers Status report Email Kioko Japanese grocery, Toraya

According to order placement

Local Community Monthly status report

Short Notice on website

5th December

3. Guidelines Easy communication should be used to avoid misunderstanding Templates should be used for producing reports

4. Escalation procedures for resolving issues:Issues should be resolved at the lowest level of management. In case of unable to do so, project manager should be instantly informed about arising problems.

Appendix 9. Risk Management Plan

A. Evaluate Weakness of Business

Abbreviation: (L: low; M: medium; H: high)

Risk description Possibility Impact Priority How to prevent and mitigate the risk

Fire damage to property and life

M H H Always ensure the proper working and positions of smoke alarms, fire extinguishers by conducting regular check and test. Staff training must be provided for cases of fire, including how to evacuate. Adequately cover the negative impact of fire to life and property by purchasing insurances.

Suppliers amend their terms and conditions of supply

M M M Establish and sustain the good relationship with long-term suppliers. Ensure proper plan B in case the suppliers change the terms and conditions.

Hygiene of food is not ensure or food is poisoning

L H H Always utilize the most quality ingredients and ensure the hygiene of food preparation by providing training to staff. Manage the expiry date of the inventory in a timely manner.

Suppliers do not fulfil their obligations of

L M M Prepare a list of more than one supplier for more choices. Also, substitute

supplying products should also be taken into account.

Disputes or agreements with the owner of the rented place.

L M H Develop and maintain friendly relationship with the area owner by using the area properly, keeping it tidy, and paying the rent on time.

Key staff resigns or takes maternity leave

L M M Let experienced staff train other less-experienced one in terms of knowledge and skills.

B. Contingency Plan

Risk description Contingency plan

Fire damage to property and life After the fire damages, the shop must immediately rebuild and re-operate the business as quickly as possible whilst waiting for insurance payments.

Suppliers amend their terms and conditions of supply

Opt for alternative suppliers or increase working capital via personal cash reserves.

Hygiene of food is not ensure or food is poisoning

Promptly investigate on the grounds of the food poisoning. Support the affected customers as much as possible. Enable the complaint handling process.

Suppliers do not fulfill their obligations of supplying

Make purchases from alternative suppliers or opt for suitable substitute products.

Disputes or agreements with the owner of the rented place.

Hire lawyer for advice or lawsuit.

Key staff resigns or takes maternity leave Offer short term contract for suitable replacement (until the permanent staff can do the job).