3.:Goya, Apsara, Chado
INTERNATIONAL OPPORTUNITIES
1. There are also potential customers for our business in other countries. Tourists are usually interested to try something that is close with Latvian nature and culture. In order to reach them we plan to put advertisements in the internet pages for tourists and also in hotels.
2. As the product we offer is quite specific there are no direct international competitors.
UNIT 2
MISSION STATEMENT
“Tea Culture” is the tea house that provides healthy tea grown in Latvia, versatile cultural and entertaining activities and sophisticated, but comfortable atmosphere. Our visitors are everyone, who appreciates power of nature and being together with interesting people.
POSITIONING STATEMENT
We provide not only high quality herbal tea gathered in Latvia, but also fun activities for you, your friends and family, so that you can spend more time together with them and have a really good time in the tea house “Tea Culture. You can drink herbal tea and spend time dancing and playing games. We provide fun, cultural and educative activities.
LOCATION
Tea Culture will be located in Riga, K. Barona street 70.
Tea Culture location
Advantages:
- near the centre
- first flour
- free car parking
- easy to approach the place by public
- big windows
- good ventilation
- no repair needed
- separate entrance
Disadvantages:
- little space
- the building is not new
PRODUCT LIFE CYCLE
In product life cycle our product is in maturity, because the demand level for teas and tea houses is high and it is not a new product.
FEATURES AND BENEFITS OF TEA HOUSE TEA CULTURE
PRICING STRATEGY
We will use cost-plus strategy. That means that product price will be based on costs and desired profit margin will be added.
In the beginning we will use discounts to be cheaper than other tea houses and to convince customers tying our tea, but after that prices will be raised to middle level. We will also use discounts for regular customers.
Consumer Analysis
We will analyze our market segment by location, age, income and personality.
Location: Riga
Age: 18- 40
Income: 200-1000 Ls/month
Personality: interest in healthy lifestyle, culture, literature and dances.
Our marketing plan has to target our market segment. As it is already mentioned, our customers appreciate healthy and active life style. We have to provide these things and emphasize them in our marketing activities. That is why we will make press releases about healthy herbal teas, organise events etc.- to attract customers.
THE SIZE OF THE POTENTIAL MARKET
- Riga inhabitants 717 371 (2008 year)
- Tourists. People who cross the boarder- 5 236 000, with aim to have entertainment- 26%= 1204280 (2007 year)
To be profitable we need to capture 5% of the market.
The potential customers whom we are planning to approach in the first two month are our friends and acquaintances, people from dance schools, young writers, their friends and supporters.
CUSTOMER NEEDS
In the Maslow's hierarchy of needs there are shown the needs of human. Our product will satisfy needs from 4 levels:
- Physiological needs- having tea and sweets,
- Safety and security- Tea Culture’s herbal tea is good for health,
- Love and belonging- meeting family and friends in Tea Culture and having good time,
- Self esteem- establishing yourself by taking part in cultural events, organized by Tea Culture
Maslow's hierarchy of needs
STRATEGY FOR OUTPERFORMING THE COMPETITION
Our strategy for outperforming the competition will be:
- Being different from the competitors, finding they’re weaknesses and making them our strength.
Competitor weaknesses:
- no parking place,
- low quality tea,
- uncomfortable tables and chairs,
- too little space,
- unkind waitresses,
- improper music.
We will provide all these things and that will make customers to chose our tea house instead of competitor.
- Providing not only tea, but also entertaining activities for free time.
We will provide entertaining activities, because the purpose for our customer to come to the tea house will not be only having healthy tea, but also having a good time with friends or family.
The list of activities:
- dancing (salsa, tango, line dancing etc.),
- games (Alias, Monopoly, shack, scrabble etc.),
- poetry reading,
- exchange of books.
- Doing marketing activities to inform customers.
We will have to inform customers about the opening of tea house, so that they would know about our existence.
To do it, we will make:
- advertisements,
- press releases informing about the new tea house, special events and describing the advantages of herbal tea,
- home page where our customers can find:
- list of provided teas,
- detailed description of each tea,
- information about the future events in the tea house,
- low prices at the beginning, to convince customers to try our tea.
- We will be the first tea house providing Latvian herbal tea.
We will be the only place in Riga, where it will be possible to have Latvian herbal tea.
Advantages:
- new product for tea houses, so Tea Culture will bet the only possible place to come, if customer wants to have Latvian herbal tea,
- tasty, healthy,
- can be used for medical purposes,
- interesting for tourists.
PROMOTION
Tea Culture business slogan: “Have a cup of good time!”
The list of mass media where we plan to advertise is shown in the table.
We will get publicity by organizing special events, so that magazines and newspapers would be interested to right articles about them.
THE WAYS HOW TEA CULTURE WILL PROVIDE SUPERIOR CUSTOMER SERVICE
To provide superior customer service the waitresses will be very important. They will
- always be kind and friendly
- know everything about teas
- tell the necessary information, help to chose suitable tea for customer wants,
- professionally prepare the tea.
We will also have proper atmosphere and interior and entertaining activities.
EXAMPLES OF MARKETING MATERIALS
Tea Culture logo
Marketing material 1
MARKETING COSTS
ORGANIZATIONS AND PEOPLE TO WHICH TEA CULTURE PLAN TO CONTRIBUTE:
- local farmers by buying Latvian herbal tea and making it more popular,
- dance schools by popularizing them in the dancing events,
- events for children from orphanage (special gemes, teaching dances, teaching healthy lifestyle),
- different seminars about green and healthy lifestyle,
- donating books and tees to old people’s homes.
We will publicize our philanthropy by sending press releases to different media. That will make a good reputation for Tea Culture as an organization that cares about society and nature.
UNIT 3
FINANCIAL PLAN
Our financial plan is based on research into similar business in similar communities, and cost estimates obtained for equipment, rent and other operating expenses.
Our top financial priorities in the first three years are repaying our long term loan, paying our employees fairly, covering our expenses on time, and generating a modest profit.
We anticipate a sales increase of roughly 10 % during our second year of operation.
Marketing expenses are budgeted at approximately 3% of total sales.
SOURCE OF FINANCING:
- Bank loan: take a bank loan to cover start up costs and which can help to keep monthly outgoings to a minimum.
- Personal savings: The owners are investing 10 000 Ls of their money into the business.
MONTHLY BUDGET:
- rent
- utilities
- loan repayment
- salary
- property insurance
- car tax/ insurance
- tax
- buying tea/cake and other commodity/ goods
- security
FIXED COSTS
List of our monthly fixed costs
2. INSURANCE
We will have
- Employee Social Insurance
- Property insurance
- Car insurance
We will spend on it 250Ls
RECORDKEEPING
Our staff will make records every day. They will be responsible for keeping accounting journal every day. Journal entries will be made in the end of the work day. But our book-keeper must follow all financial operations and make clear and understandable entries to match both sides on the accounting journal. Bank account will be opened in the bank which company will take a loan from. We will accept credit cards from customers but not personal checks.
SMALL BUSINESS AND GOVERNMENT
Limited liability company „Tea Culture” guarantees service of a high quality. Tea house an action will comply to all the standards of the Latvia Republic conditions. For it will answer enterprise proprietors.
The requirements of strict noticed fire-prevention will reach in an enterprise, let successful prevent and extinguish fires, as also prevent their crop rotations. In an enterprise an evacuation plan will be produced according to standard requirements, extinguisher will be set easily in accessible places, electric facility will be supported in a work order.
Let provide a suitable microclimate workers, in a safety and health protective enterprise, the ventilation systems will be arranged, a conformable microclimate is provided - temperature, air humidity. As also in a work place the natural illumination will be provided and the artificial illumination will be arranged also so that the general illumination seizes occupied safety and health. A special attention will be turned also to the hygiene requirements. Enterprise apartments will be supported in a conformable position and tiras.
The main cost of each enterprise is his workers. Workers are the enterprise sculpture main forming factor. In our enterprise a special attention will be turned welfare of workers, equality principle will be noticed in an enterprise - equal rights on work, just, bold and health harmless work circumstances, as also on a just work pay. Work of each worker time in a day won’t be longer 8 lessons and in a week 40 lessons, the annual paid vacation will be given each worker four calendar weeks, days of holidays won’t be included.
An enterprise provides its visitors high-quality and after the Latvia legislation standards a conformable service. The enterprise main costs will be workers and clients, and then an enterprise will operate in accordance with the Latvia Republic legislation and other normative acts.
FINANCING STRATEGY
Capital assets and depreciation
Transport costs: 1054.20 LVL
All the equipment will be bought from Franke Foodservice Systems GmbH German Company. This company provides high quality equipment for restaurants and cafés for many years, which means that it has experience in this field. Company provides also transportation to other countries.
Dishes:
Nippers,
Nippers for sugar
Shovel for cakes,
Tea – strainers,
Espresso spoon,
Knife,
Tee spoon,
Cake fork,
Sugar – basin,
Cream basin,
Salver,
Serviette holder,
Plates for cakes,
Demitasse,
Tee cup.
All the dishes will be bought from professional kitchen service “Grandus” in Riga. For dishes company will spend 589.00LVL
Total expences-14141,45LVL
Cash reserve -7070,25LVL
4. List the sources of financing for your start-up capital. Indicate the amount
Loan- 15 000Ls
Owners-10 000Ls
- Debt ratio- 12,4 %
- Payback period- 10 years
5. Raising Capital
1. Describe financing sources that might be willing to invest in your business in exchange for equity
Our clients will invest their table games and books for our library.
UNIT 4
LEGAL STRUCTURE
„Tea Culture” will be a Limited Liability company (Ltd). We chose this legal structure because our company is quite small. However, business is quite risky and complicated enough. It would be also easier to increase capital in case of expansion.
There will be 3 shareholders for our company (30%, 30%, 40%). One of them will be also a director of our cafe. By one share 10% of a company is owned. Shares of our company are privately owned.
MANUFACTURING
We don’t intend to manufacture our product. We offer tea in our cafe some cookies, cakes and other sweets and also different cultural activities. Herbal teas can be made with fresh or dried flowers, leaves, seeds or roots, generally by pouring boiling water over the plant parts and letting them steep for a few minutes. We buy latvian herbal tea which is grown by local farmers. One of the company's cooperation partners are Z / S Rūķīšu tēja " (Dobele) - one of the largest herbal farms in Latvia. Herbs at home "Rūķīši 'has been grown since 1997. But the company Z / S "Rūķīšu tēja" was established in 2000. Now they generate about 5 000 kg of medicinal plants a year.
Aromatic camomile, peppermint and other crop fields are harvested by hand, to obtain good-quality plants and use their valuable parts. Plant is used for kiln drying, which was established pursuant to existing law, the Latvian Food and Veterinary Service and the requirements of EU standards
Tea cultivation is a complicated process that includes several steps-spring land preparation, sowing, planting, summer - weeding, gathering, drying, in the autumn - will continue collecting, drying, packaging, and in winter - have to put up and deliver to sellers
In spring, farmers treat the land, sowi and plant tea. In summer the tea plantations are weeded by hand and the growth process doesn’t include any chemicals. Similarly, the harvest "Rūķīšos 'takes place by hand - each plant is carefully plucked and served for drying, to obtain good-quality plants and use their valuable parts. Ultimately, the tea is packed in paper bags and delivered to the necessary company.
BUYING WHOLESALE
We buy sweets and deserts from the cafe „Sala” because we don’t need them in so big amounts to hire a pastry cook.
Teas are bought from farmers who have ecological household. We will cooperate with „Rūķīšu tēja”
PRODUCTION – DISTRIBUTION CHAIN
Teas:
Manufacturer
Name: “Rūķīšu tēja”
Contact Information: Krimūnu civil parish, Dobele district, zip code LV-3719 telephone number 29263846
Markup: 0.60Ls
Markup Percentage: 42.86%
Cakes:
Manufacturer
Name: “Salakafe”
Contact Information: Dzirnavu Street 49, Riga, zip code LV-1010 telephone number 29806874
Markup: 1.00Ls
Markup Percentage: 50%
As we don’t have any suppliers, have a continious contract with manufacturers and deliver tea and sweets ourselves, there is almost no time difference between ordering and being able to use products in our business.
CONTRACTS
The most important is the rent contract. There are quite a lot of tea suppliers and pastry-cooks but place of cafe is an essential part we can’t find and change easily. Company will rent premises from private person. Area of premises is 150 square meters and contract prescribes monthly payment 200.00LVL without pay for public facilities. Address is Krishjana Barona Street 70, Riga. Our contract includes redemption rights after 4 years.
Of course, contracts with farmers and pastry-cooks are also significant because they ensure the product we offer our clients. Other important contracts are insurance and outsourced services such as accounting and security.
HUMAN RESOURCES
There will 6 employees in our cafe. The most specific for our business are waiter-cashiers.
Waiter - cashier
The company hires employee with basic education, secondary education, secondary special education, industrial education in this profession, higher education.
Employee should have license for working with cash – register. (If not, company will provide trainings)
Job responsibilities
- Treat employers property entrusted to him/her with due care and do his/her best to avoid possible loss of given property
- Immediately inform employer about any circumstance that endanger safety of employer’s property
- According to established order keep records prepare and provide balance reports of goods, money and other material values
- Participate at inventory process of entrusted material values
- Clean premises at the end of working day
- To wait tables and serve customers with responsibility to provide for company’s good name
Security staff
Tea culture will use outside service from company “G4S”. The company provides security system mounting and physical guarding. Security system mounting costs 455.55 LVL and monthly payment is 18.70LVL
Accounting
Tea culture will use outside service from company “Latinsoft” It costs 96.80 per month.
Probation period
Upon commencement of the work, employee shall have probation period of three month.
Both parties have the right to terminate the contract by written notification to the other party three days in advance
Salary
Employee’s salary (gross) is 1.70 Ls per hour in probation period.
After probation period employee’s salary (gross) is 1.85 per hour.
Parties agree that salary is paid once a month and the payment is made by money transfer to employee’s bank account indicated by employee.
Working time
Monday
Tuesday
Wednesday 10.00 – 22.00
Thursday
Sunday
Friday
Saturday 10.00 – 24.00
Each employee has 30 minutes for lunch
Example for working week
Average working hours will be 157 hours per month
Company’s manager Anastasija Zenčika
The top manager will be elected by board of directors. The company hires manager with (basic education, secondary education, secondary special education, industrial education in this profession, higher education.)
Job responsibilities
- Ensure appropriate conditions for daily work and full safety of material values entrusted to employee
- To inform employee about responsibility foreseen by company for losses caused to employer as well as about instructions norms and regulations for maintenance receiving preparation selling transporting or processing of material values
- According to established order perform inventory of material values
- Is responsible for delivery of raw materials
Working time
Monday
Tuesday
Wednesday 9.00 – 17.00
Thursday
Friday
Salary
Fixed salary – 180 lat per month
EMPLOYMENT POLICY, FRINGE BENEFITS
We provide all waiter-cashiers with regular training and education so that they are knowledgeable about teas, their features, origin and process of preparing. To increase motivation it is also necessary to show that we care of our stuff. We also provide compulsory insurance for them. Waiter-cashiers will also get tips in addition to salary.
ORGANIZATIONAL CHART
ETHICAL BUSINESS BEHAVIOR
The corporate governance plan of our business will include five policies:
- Keeping accurate records
- Establishing good and trustful relationships with employees
- Using profit to develop
- Decreasing risks
- Provide only good quality products to our customers
SOCIALLY RESPONSIBLE BUSINESS
Our cafe will be ecologically friendly. First of all, we support local farmers who have biological household. We also take care about health and culture of society offering healthy product and high – quality entertaining events. We also encourage young dancers and writers to work and show their skills and art to public.
One of our basic values is to help others. That’s why we will organize events for children from orphanage (special games, teaching dances, teaching healthy lifestyle), different seminars about green and healthy lifestyle. We will also donate books and tees to old people’s homes.
It is also significant to establish a safe and healthy workplace and it is also our ambition to do this.
UNIT 5
We are planning to make 470,95 Ls big profit in the first year.
Profit - loss statement
Balance sheet
Cash flow
We will receive a loan 15000 Ls for 10 years with an interest rate 12,4%.
Loan’s repayment schedule for the first year
