BUSINESS PLAN

TABLE OF CONTENTS

I. COMPANY SUMMARY
A. Mission
B. Organization
C. Organization Chart
II. BUSINESS ADDRESS
III.PRODUCT OFFERING
A. Product
B. Pricing
C. Promotion
IV. MARKET ANALYSIS
A. Target Market
B. Competition
V. FINANCIAL PLAN
A. Organization Timeline
B. Total Project Cost
C. Projected Sales
D. Return on Equity

I. Company Summary

The Hearbreak Caf is a specialty Coffee Shop that caters to the

younger generation. It aims to provide a luxurious experience at an
affordable price. Heart Break Caf aims to introduce Third Wave Caf in
Los Banos. Third Wave Caf references the current movement of
specialty coffee that appreciates coffee as an artisan or craft beverage.
 The Hearbreak Caf offers specialty beverages which aims to
serve both Cofee Connoisseurs while still catering to those who simply
want coffee without distrinction.

A. Mission

To serve the finest Coffee in Los Banos and provide a friendly and
cozy environments for student costumers.

B. Organization

The Organization form to be used by Heart Break Caf will be

that of Partnership. The partners shall compose of:

ATTY. Mohammad Fyzee Alim and ATTY. Hyacinth Marie Salig will
act as administrators of the Business and will be in charge of
overseeing the health of the business as a whole. Eliza Jane SALIG will
be in charge of the day to day business. The Heartbreak Caf will also
have a consultant as an advisor who would form a permanent part in
the organization.

Asides from the partnership, the Heart Break Caf will be formed
by Four Barristers and Two Chefs in two shifts. The Barristers and Chefs
shall as far as possible, come from the within the area or from the
nearby schools in order to fulfill the mission of Heart Break Caf to be
ingrained in the school community.

The Barristers and Chefs shall be well trained in the art of

making fine coffee and serving the customers.

C. Organization Chart

JOBTITLE No. TASKS QUALIFICATION SALARYRATE

S
Administrator 2 Marketing Good background in P 20,000.00 plus
Executivedecisions business Profitsharing

Manager 1 Supervising Goodbackground P 20,000.00 plus

SimpleBookkeeping inbusiness profitsharing
Contracting and Capable of
maintainingsuppliers logistics
Inventorycontrol
Barrista 4 ProducingCoffee Highschool P10,000.00
 Diploma
Servefood (preferably a
Cleaning the work area Collegestudent)
andequipment Friendly
demeanor
Simplemath
High standard of
cleanliness
Knowledgeablein
preparing Coffee
andbeans
Chef 2 Preparing and AtleastinSecond P15,000.00
cookingfood yearcollege
Inventorycontrol Knowledgeablein
Cooking

II. Business Address

TheHeartBreakCafwillopenitsstoreonLopezAvenue,LosBanos.The
ideallocationwouldbeTwoHundredtoSevenHundredMeters(200700m)
fromthefrontgateoftheUniversityofthePhilippinesLosBanosorColegioDe
LosBanos.IdeallytheHeartBreakCafwouldbesituatedwithinsomedistance
ofitscompetitors.

TheRequirementsforthelocationwouldhavethequalityof:

(a) Accessibility The Heart Break Caf should be situated Two Hundred to
SevenHundredMetersfromtheschoolsnearbyLopezAvenuewhichwould
compromisesthemajorityofitscustomers.

(b) VisibilewithHeavyFoottrafficThelocationoftheHeartBreakCafshould
bevisibleandhaveheavyfoodtraffic.??

(c) AtmosphereThelocationshouldbelocatedinacleanandquietarea,which
allowsforsunlightduringthedaytimeandpromoteacozyatmosphereforthe
customers.

(d) Spacious Theideal locationwouldholdat least 20patrons duringpeak

hours while maintaining a luxurious and comfortable experience for each
customers.Abusinessspaceof150200sqmwouldbeidealforthispurpose.

III. PRODUCT OFFERING

A.PRODUCT

The Heart Break Caf aims to serve only the highest quality of
products.Theproductscanbecategorizedbythefollowing:(1)coffee,(2)
colddrinks,(3)pastriesand(4)pasta.Thesearetheproductsthatstudents
oftenpurchasewhentheyaregoingtoandfromschoolandwheneverthey
havebreaks.Theproductswillbewrappedinreadytotakeoutcontainer
andpapercupstoservetheneedsofthestudentswhowantstotakeiton
thego.Thepackagingwillbedesignedtobeinlinewiththethemeofthe
CoffeeShop.

Coffeethemainmerchandiseofourbusiness.Thecoffee,whichI
will offer, shall strive for balance between affordability and quality.
AlthoughthirdwavecoffeehasbeenreachingManila,itisnotverylikely
thatitwillmakeitswaytoLagunawithinthenextthreetofiveyears.Thus,
Iaimtoservetheneedsofconsumerswithrefinedtasteaswellasthose
whojustwantcoffeeintheirhandswithintheminute,onthego.

PastaAlongwiththecoffee,pastashallbeoneofthebestselling
points for our business. The pasta I plan to offer will be a little more
expensivethancoffeebutshouldbewellworthitfortheprice.Comefor
thecoffeestayforthefood.

ColdDrinks Colddrinksareverypopularwithstudentsduring
summertime.Iplantohavesoftdrinksandfruitjuice.

Pastries Thepastriestobeofferedshallbeshortordersofcake
andcookies. Thesupplieswillmostprobable beoutsourcedinorderto
utilizemorespaceforthecostumers.

B.Price

For pricing, the method of comparative pricing shall be used.

Experience and research suggests that students are more inflexible with
regardstopricing.Theywillnotbewillingtospendmorethanwhatthey
already spend for the luxury of coffee. Further, the spending habits of
studentssuggestthatinconsideringtheirpurchase,studentsthinkmoreof
whatissustainableforpurchaseeveryday.Theytendtolimittheireveryday
choiceswithinaspecificpricerangeof70150pesos.Thus,HeartBreak
 Cafsproductshallbelimitedwithinthatrange.However,forthepricing
ofthepasta,themethodofvaluereceivedwillbeused.Thusthepastawill
bepricedabitmoreexpensivethanthecompetition.

Discounts and promos may be given during offpeak season and

enrollment period to introduce new customers to our business. Loyalty
promoswillalsobegiventostudentsforrepeatpurchases

C.Promotion

TheHeartBreakCafwillutilizealowcostadvertisingcampaign
whichshallbelimitedtothesurroundingschools.Couponsforfreedrinks
canbe given atthe door duringschoolevents. This will encourage the
studentstoinvitetheirfriendsandspreadwordofmouthofourbusiness.

Discountcardsandstampswillbegiventotheloyalcustomersof
HeartBreakCafaswellasdiscountsduringholidaysandspecialevents.

Additionally due to the prevalence of Facebook and other social

media events, having an online account is a costefficient way of
advertisingourbusiness.Finally,weplantobuildagoodrelationshipwith
theschoolandbeactiveinthecommunitytoenhancetheimageofour
business.

V. MARKET ANALYSIS

A. Target Market

TheHeartBreakCafebusinesswillfocusononemarketsegment,
whicharethestudentsofUniversityofthePhilippines,LosBanosandthe
studentsofColegiodeLosBanos.Thatsegmentcanbefurtherdividedinto
two,inaccordancewithconsumerhabits,asfollows:

TheStudentPasserbyThesearethestudentswhopurchasecoffeeonthe
goandcometocoffeeshopsfortakeoutorstayforthemaximumof30
minutes.

TheCaptiveCostumer targetmarketwillcompriselargelyofstudents
andemployeesoftheUniversityofLosBanosandColegiodeLosBanos.
Theymostlikelystayforanaverageofanhourtorendezvousandchatwith
 their friends. Although they bring a lot of costumers, not all of them
purchasebeverageorfood.

B. Competition

NATIONAL CHAINS

Thedirectcompetitionshallbethesurroundingbusinessesoffering
Coffee,Milkteaandothershortordersoffood.Thesebusinessesarethose
situatedwithin500meterfromthegatesofUniversityofLosBanosand
ColegiodeLosBanos.

Ourplantogetafirmfootholdofthecompetitiveenvironmentisto
bemoreaccessiblethanmostofourcompetitorsandbyofferingahigher
qualityofcoffeethanthesurroundingbusinesses.TheHeartBreakCaf
will cater to the more artisanal senses and will aim to create its own
demandapartfromthesurroundingcoffeeshops.

In terms of pricing the Heart Break Cafs Coffee and Cold

Beverageshallbepricedalmostthesamewithintheimmediatevicinitybut
forahigherquality.ForHeartBreakCafsfood,twooptionwhicharethe
PastaandthePastries.Thepastaispricedslightlymoreexpensivethanthe
foodwithintheareabutitwillbepreparedwithahighqualityrecipeand
ingredients. A cheap option is given for the consumer in the form of
pastrieswhichshallrangefromP30toP70.

VI. FINANCIAL PLAN

A. Organization Timeline

The Heart Break Caf shall be organized within Eight (8) months
from the time that it has found a suitable location. A time chart for its
organization is as follows:

ACTIVITY MONTH
1 2 3 4 5 6 7 8
Business Registration XXX
Interior Design XX
X
Contractor Selection XX
 X
Building Construction XX XX XX
Equipment/Furniture XX
Purchases
Supplier Selection XX
Initial Inventory XX
Purchase
Recruitment & Training XX
Normal Operations XX

B. Total Project Cost

The total project cost for Heart Break Caf is as follows:

TOTALPROJECTCOST
Line# PREOPERATINGEXPENSE AMOUNT
1 License,PermitsandRegistrationfees P10,000
2 Businessplan/Feasibilitystudypreparation P20,000
3 Trainingcosts P15,000
4 Transportationexpenses P3,000
5 AdvertisingExpense P5,000
6 TrialProductionruns P2,000

FIXEDCAPITALINVESTMENT C. Projected
7 CoffeeMachineryandequipment P300,000 Sales
8 KitchenSupplies P20,000
9 Furnitureandfixtures P100,000
10 Renovationexpense P200,000

WORKINGCAPITAL
11 Rawmaterialinventory P100,000
12 Disposables P3,000
13 Salaryofemployees P70,000
14 Utilities P10,000
15 Rent P15,000
TOTAL P874,000
ThesevaluesassumethatHeartBreakCafissituatedinanareaof
150sqmwhichcanaccommodateanaverageof20personsatagiventime.
The daily average of customers would be 100 persons with an average
 consumerwithapurchasinghabitofCoffee(70%),Beverage(30%),Pasta
(50%) and Pastries (35%). Inventory expense1 is pegged at 30% of the
purchaseprice.

ProfitsareexpectedtobeonadeclineduringQuarter3ofevery
financial year during school break and also on financial year 4 where
renovationswillmostlikelybeconducted.Taxesarealsonotincludedin
thecomputation.

Averagepriceperproduct:

Coffee=110Pesos
ColdBeverage=120Pesos
Pasta=150Pesos
Pastries=50Pesos

SALESVOLUME
UnitSold ExpectedProfits
FinancialYear1

Quarter1Coffee 1,260 Php77,616

Beverages 540 Php36,288
Pasta 900 Php75,600
Pastries 630 Php17,640

TOTAL Php207,144

Quarter2Coffee 3,150 Php194,040
Beverages 1,350 Php90,720
Pasta 2,250 Php189,000
Pastries 1,575 Php44,100

TOTAL Php517,860

Quarter3Coffee 3,150 Php194,040

Beverages 1,350 Php90,720
Pasta 2,250 Php189,000
Pastries 1,575 Php44,100

TOTAL Php517,860

Quarter4Coffee 4,410 Php271,656

Beverages 1,890 Php127,008
Pasta 3,150 Php264,600

1 Includes raw material and condiments

 Pastries 2,205 Php61,740

TOTAL Php725,004

ANNUALPARTIALNETPROFIT:PHP1,967,868.00

FinancialYear2

Quarter1Coffee 6,300 Php388,080

Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200
TOTAL Php1,035,720

Quarter2Coffee 6,300 Php388,080
Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200
TOTAL Php1,035,720

Quarter3Coffee 5,040 Php310,464

Beverages 2,025 Php136,080
Pasta 3,375 Php283,500
Pastries 2,362.50 Php66,150

TOTAL Php796,194

Quarter4Coffee 6,300 Php388,080

Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200

TOTAL Php1,035,720

ANNUALPARTIALNETPROFIT:PHP3,903,354.00

FinancialYear3

Quarter1Coffee 6,300 Php388,080

Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200

TOTAL Php1,035,720

Quarter2Coffee 6,300 Php388,080
Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
 Pastries 3,150 Php88,200

TOTAL Php1,035,720

Quarter3Coffee 5,040 Php310,464

Beverages 2,025 Php136,080
Pasta 3,375 Php283,500
Pastries 2,362.50 Php66,150

TOTAL Php796,194

Quarter4Coffee 6,300 Php388,080

Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200

TOTAL Php1,035,720

ANNUALPARTIALNETPROFIT:PHP3,903,354.00

FinancialYear4

Quarter1Coffee 5,040 Php310,464

Beverages 2,160 Php145,152
Pasta 3,600 Php302,400
Pastries 2,520 Php70,560

TOTAL Php828,576

Quarter2Coffee 5,040 Php310,464
Beverages 2,160 Php145,152
Pasta 3,600 Php302,400
Pastries 2,520 Php70,560

TOTAL Php828,576

Quarter3Coffee 3,360 Php206,976

Beverages 1,440 Php96,768
Pasta 2,400 Php201,600
Pastries 1,680 Php47,040

TOTAL Php552,384

Quarter4Coffee 6,300 Php388,080

Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200
 TOTAL Php1,035,720

ANNUALPARTIALNETPROFIT:PHP3,245,256.00

FinancialYear5

Quarter1Coffee 6,300 Php388,080

Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200

TOTAL Php1,035,720

Quarter2Coffee 6,300 Php388,080
Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200

TOTAL Php1,035,720

Quarter3Coffee 5,040 Php310,464

Beverages 2,025 Php136,080
Pasta 3,375 Php283,500
Pastries 2,362.50 Php66,150

TOTAL Php796,194

Quarter4Coffee 6,300 Php388,080

Beverages 2,700 Php181,440
Pasta 4,500 Php378,000
Pastries 3,150 Php88,200

TOTAL Php1,035,720

ANNUALPARTIALNETPROFIT:PHP3,903,354.00

EXPENSES

(FixedQuarterlyExpenses)
EmployeesSalary2=Quarterly:Php210,000
Utilities3 =Quarterly:Php22,500
Lease =Quarterly:Php45,000

2 Includes two barristas and one chef with two rotations

3 includes water and electricity
TOTALQUARTERLYEXPENSES:PHP277,500

Quarter04

Construction/Installation =Php200,000
CoffeeShopEquipment =Php300,000
Advertising/MarketingExpense =Php10,000
KitchenUtensils =Php20,000
Licensefee =Php10,000
Consultingfee =Php20,000

TOTALSTARTUPEXPENSE:PHP550,000.00

Inventoryexpense Overhead Maintenance

FinancialYear1

Quarter1 Php110,970 Php277,500
TOTAL Php388,470

Quarter2 Php277,425 Php277,500

TOTAL Php554,925

Quarter3 Php277,425 Php277,500

TOTAL Php554,925

Quarter4 Php388,395 Php277,500

TOTAL Php665,895

ANNUALPARTIALEXPENSES:PHP1,714,215.00

FinancialYear2

Quarter1 Php554,850 Php277,500 Php40,000

TOTAL Php872,350

Quarter2 Php554,850 Php277,500
TOTAL Php832,350

Quarter3 Php426,532.50 Php277,500

TOTAL Php704,032

Quarter4 Php554,850 Php277,500

TOTAL Php832,350

4 Start-up expense
ANNUALPARTIALEXPENSES:PHP2,131,082.50

FinancialYear3

Quarter1 Php554,850 Php277,500 Php40,000

TOTAL Php872,350

Quarter2 Php554,850 Php277,500

TOTAL Php832,350

Quarter3 Php554,850 Php277,500

TOTAL Php832,350

Quarter4 Php554,850 Php277,500

TOTAL Php832,350

ANNUALPARTIALEXPENSES:PHP2,131,082.50

FinancialYear4

Quarter1 Php443,880 Php277,500 Php40,000

TOTAL Php872,350

Quarter2 Php443,880 Php277,500
TOTAL Php832,350

Quarter3 Php295,920 Php277,500 Php100,0005

TOTAL Php673,420

Quarter4 Php554,850 Php277,500

TOTAL Php832,350

ANNUALPARTIALEXPENSES:PHP1,738,530.00

FinancialYear5

Quarter1 Php554,850 Php277,500 Php40,000

TOTAL Php872,350

Quarter2 Php554,850 Php277,500

TOTAL Php832,350

Quarter3 Php426,532.50 Php277,500

TOTAL Php704,032

Quarter4 Php554,850 Php277,500

5 Renovation expense
 TOTAL Php832,350

ANNUALPARTIALEXPENSES:PHP2,131,082.50

TOTAL:

SALESPROFIT EXPENSE NETPROFIT

FINANCIALYEAR1

PHP1,967,868.00 Php2,264,215.00 Php296,257.00

FINANCIALYEAR2

PHP3,903,354.00 Php2,131,082.50 Php1,772,271.50

FINANCIALYEAR3

PHP3,903,354.00 Php2,131,082.50 Php1,772,271.50

FINANCIALYEAR4
PHP3,245,256.00 Php2,378,120.00 Php867,136.00

FINANCIALYEAR5
PHP3,903,354.00 Php2,131,082.50 Php1,772,271.50

AVERAGETOTALPROFITFORFIVEYEARS Php4,115,422.00

D.ExpectedReturnofEquity

TheprojectedsalesoftheHeartBreakCafwouldshowanexpected
returnofEquityforthepartnersshallbeinQuarter2ofFinancialYear2.
ThiswouldshowthattheHeartBreakCafwouldpresentagoodpotential
asaninvestment.