Executive Summary

Australia is regarded as one of the fast growing country. Having lots of untouched, undiscovered resources, this mineral rich country is growing in population, economy and opportunities. One such commodity which is fastest growing in Australia is coffee. The per capita consumption of coffee has increased to 2.4kg. People who use to spend a meagre 50cents on a cup of coffee have now started spending at least $4-$5 for one cup of coffee. International Coffee chains and Australian Coffee chains are at logger head to enjoy the biggest pie of market share but considering the consumption of Australia and projected the growing population there is still room for a new international chain in venture in the coffee business. With its expertise in coffee chain business and more than 200 years of experience in coffee industry, Coffee Day has planned to enter the Australian Coffee Market with an innovative service idea of Coffee Aroma. Along with the rich coffee beans of India, it will provide coffee aromatherapy using coffee. Coffee Day will enter the market under the name Mocha with an initial investment of $300,000 funded by the company and partly as an overdraft from the bank. The first outlet will be opened at Surfers Paradise, Gold Coast and a total sale of $627,249 with net profit/sales of 18% is expected. This business report will show 3 year plan of Mocha Cafe and Spa and the business is expected to grow at 62% by the end of the 3rd year. The growth is predicted considering the growing consumption o coffee and the promotion of Wellness Tourism by the Australian Government. A considerable spending on the marketing promotions is planned in the first and the third year to strength the brand image in the market. Marketing concentration will be mover towards the benefits of the innovative coffee aromatherapy service.

2.1 Mission
Mochas mission is to entice not only the taste buds of the caffeine consumers but also their olfactory.

2.2 Company Background

2.2.a Company History and Ownership Mocha is a 100% subsidiary of Amalgamated Bean Coffee Trading Company Ltd. an Indian based company which owns the largest coffee chain in India by the name Cafe Coffee Day. Very well known as Coffee Day, Amalgamated Bean Coffee Trading Company is venturing into Australia under the name Mocha and it will based out of Gold Coast. With Asias second largest coffee network, Cafe Coffee Day sources its coffee from 4249 h.a. of coffee estates and about 11,000 small growers. Ranking 5 th in the world Cafe Coffee Day is worth $0.16 billion. 2.2.b Company Business Divisions Cafe Coffee Day Indias largest and worlds 5th Coffee Chain. It has more than 700 outlets across the country and is expanding in every nook and corner offering world class coffee experience at an affordable price. Coffee Day Square a premium coffee house Coffee Day Xpress roadside coffee shops Coffee Day Mobile caters to the wending machine business Coffee Day Exports primarily into exporting coffee beans and coffee 2.2.c Start-up Summary However considering the growth of the Australian coffee market, Coffee Day has set its target to set up in Down Under but with an innovative business style. Registered in 2009 Mocha is now all set to foray into the business on the Australian streets competing with Worlds largest coffee chains and keeping up the Australian standards of the Caffeine Experience. Unlike its other outlets and other competitor cafe houses, Mocha has planned to launch three different types of shop outlets:

Mocha Cafe regular coffee shop serving coffee and sandwiches Mocha Aroma a coffee shop with Aromatherapy Spa Mocha Spa A big outlet with coffee shop, aromatherapy and body spa.

2.2.d Location

Considering its a first of a kind even for Coffee Day and the finance at disposal for the project, company will first concentrate on Mocha Aroma in Gold Coast. Considerable research has suggested opening the first outlet Mocha Aroma which will house state of the art coffee shop facing the waterfront and a swanky room attached for Aromatherapy at the Surfers Paradise, Gold Coast. There are no plans to open any additional outlets for at least first 2 years. The success of Mocha Aroma will decide the fate of Mocha Spa in Australia.

3. Marketing
3.1 Market Research Coffee is regarded as one of the most popular hot beverages. Available in almost any part of the world, people look forward for that morning cup of coffee. Literature says that humans consumption of coffee is almost 1/3rd of their free tap water consumption1. A key source of economy for many countries, Coffee is not only one of the most important commodity traded today but the production and consumption as seen considerable increase over last year. According to International Coffee Organisation, about 119,894,000 bags of coffee was produced by end of 20092. Talking about consumption, Down Under is regarded as a growing consumer of coffee. Australia comes under a category of developing countries for coffee consumption but looking at recent trends looks like Australia will soon makes its way up on the charts standing with the highest importing ad consuming countries of coffee. Current Market Scenario and projected growth A developing country, Australia, having population of about 2.2 billion3 is assumed to consume 57000 tonnes of coffee by the end of this year.4 The import rate is projected to grow by 1.3% by end of 2010. The per capita consumption of coffee in Australia has gone up to 2.4kg per person. Assuming a healthy growth, Australians are believed to be spending $773.5 million on coffee consumption5. Australian Coffee Traders Association believe that the coffee market in Australia is very competitive but at the same time brand conscious and has lot of brand loyalty and is becoming sophisticated6. The tea sales are trailing and the coffee consumption is moving towards apogee. 3.2 Market Analysis
1 2

http://www.beverageanswers.com/coffee/why-do-people-drink-coffee.html http://www.ico.org/trade_statistics.asp?section=Statistics 3 http://www.abs.gov.au/ 4 PDF: Food and Agriculture Organisation of UN 5 http://news.smh.com.au/breaking-news-business/australia-a-nation-of-coffee-drinkers20100305-pnbb.html 6 http://www.acta.org.au/article.php?a=2

Consumers have the buying power and hence demand the best in terms of quality and taste. Australian market has become so sophisticated when it comes to choosing what coffee to drink. According to the Australian Coffee Trading Association, there is growth in the sale of pure coffee products instead of instant coffee products. Apparently their research found out that price is not a deciding factor when it comes to choosing coffee 7. Nescafe is so far enjoying the instant coffee market and retail coffee market. As per the senior consumer data analyst from Datamonitor, Ms. Niraj Lalka, the sophistication and importance of coffee in life of an Australian has been the key catalyst in the proliferation of coffee shops8. The increase in the demand of pure coffee has opened up horizon for coffee chains in Australia. The top 10 coffee chains9 across Australia are:

Michels Patisseries has more than 1000 outlets across Australia The Coffee Club has above 273 outlets Jamaica Blue 64 outlets Coffee Guru 23 outlets mainly in ACT, NSW and QLD Wild Bean Cafe 109 outlets McCafe McDonalds espresso coffee bar 617 outlets Hudsons Coffee 64 Muffin Break 179 stores Starbucks 22 stores Gloria Jeans 460 outlets

Apart from these there are many other small coffee shops serving coffees, pastries and savouries. Most of these coffee shops provide all the services like serving breakfasts, pastries, sandwiches and hot food on the go. Their shop has the ambience for people to chat, interact, and have small business meetings, some shops even offer Wi-Fi of course it is paid on hourly basis. All the coffee shops are out there attracting customers with innovative services and style of coffee making. For example Jamaica Blue uses a very innovative business idea to attract customers and increase brand loyalty. They have tied up with Caribbean Crew which entitles the Jamaica Blue customers to collect points on cards for every dollar spent in any of the

7 8

http://www.acta.org.au/article.php?a=2 http://news.smh.com.au/breaking-news-business/australia-a-nation-of-coffee-drinkers20100305-pnbb.html
9

http://www.choice.com.au/reviews-and-tests/food-and-health/food-and-drink/beverages/finding-the-best-coffee/page/coffee %20chains%20compared.aspx

Jamaica Blue outlet across Australia and the points can be redeemed or attractive gifts and even a cruise ticket on the dream Caribbean Cruise10. In spite of coffee chains increasing day by day, research shows that there is still lot of scope to enter the market with own franchise chain as the overall Australian Coffee market is trailing behind Japan, Italy and some other European countries11. Along with the coffee industry, Australia is also concentrating on health and wellness. The Spa market too is growing at a very good pace. Private organisation like the Australian Spa Association is actively promoting Wellness Tourism to grow the spa market in Australia. Australia has beautiful location, good weather and about 4.7 million visitors every year mostly coming from United Kingdom, New Zealand and Korea which are good coffee drinking nations. However the highest number of tourists is from China a tea nation but trends are changing there too. Even though Mocha Cafe and Mocha Spa have a healthy competition in Australia there is lot of scope to set up a business and acquire a market share with the niche innovative idea of Aromatherapy. SWOT analysis will further help the company to strategise its marketing plan. Strengths Strong brand name in India Recognised for quality and service Almost 200 years of experience in coffee industry Leading retailer and beverages company Expertise in coffee chain market for last 20 years Known for sourcing quality coffee beans owning second largest coffee estate and coffee providing network in Asia Weaknesses New to the Australian Market Never tried Spa business before First of a kind business venture Coffee Spa with Coffee Shop

Opportunities rapidly growing coffee chain market and spa market respectively first movers advantage Pilot project which can be replicated in other countries to follow

Threats Strong local competitors potential for economic downturns existence of competitors increasing cost of materials retaining suitable staff and reliable subcontractors possible government regulation geographically diverse market

10 11

http://www.jamaicablue.com.au/ http://www.muzink.com/afrn?articleid=614

The Business Idea

Caffeine consumption is increasing in Australia as more and more people are resorting to it as a stress buster. There is a strong belief that caffeine keeps them going on during the day and helps them work efficiently. It is very prevalent in case of the desk jobs 12. It is the stimulating effect of caffeine which without a doubt is also a mild drug. With the benefit of sipping coffee comes great risk of over dosage of caffeine. Medical experts advice to have 2-3 cups of coffee a day and that can help diseases like Alzheimers, type 2 diabetes and other neurodegenerative diseases13. However the making of the coffee plays a very important role in deciding whether it is harmful or beneficial (e.g. Van Dusseldor et. Al)14. There are some compound found is coffee which are harmful to individuals at risk of Osteoporosis (Barrett Connor et.al), pregnant women and epilepsy patients15. Coffee over the years have become a beverage looked upon as an excuse to relax for a moment from the busy life and chat up with friends. Mocha has planned to target caffeine addicted customers and give them the choice of either sipping the coffee or inhaling it and yet enjoy the same freshness. To support its idea, an experiment conducted in the lab on the rats which is reported in The Journal of Agriculture and Food Chemistry is presented. The lab report showed that the rats that were exposed to the aroma of coffee instantly produced antioxidants and chemicals in the brain to combat stress leading to sleeplessness. Inhaling coffee also reduces the risk caffeine inhibition of absorbing nutrients from stomach. 3.3 Marketing Plan Target Market Coffee is a universal drink available in various quality and quantity. Mocha plans to target both the daily coffee drinkers and the drinkers who are deprived of caffeine due to their medical condition not permitting to sip coffee. Mocha Cafe will target the youth and working class individuals giving options of Wi-Fi, hot meal etc. However Mocha Spas concentration will be very specific targeting to the working class to distress them and just relax with a serene music and coffee aroma. A setup which will have a small session of 15 mins of aroma therapy will help to pour in office crowd even at the lunch time or whenever they can step out of the office. Health conscious individuals worried about the various compounds of coffee can now destress by inhaling coffee at Mocha Spa. Targeting from the University students to the retired pensioners, Mocha cafe and Spa will have a large variety of product and services to offer in price, size and maintaining the same quality standards.

12 13 14 15

http://www.beverageanswers.com/coffee/why-do-people-drink-coffee.html PDF: To_sip PDF: To_sip PDF: To_sip

4Ps of Marketing Companies have based their marketing plans around the 4Ps since decades. The Coffee Day will base its marketing plan around Human Emotions revolving around the 4Ps product, price, promotion and place. Emotions play a very important role in consumers decision on selecting a product or service especially when they are confused and made to make a choice from a wide variety16. As we talk about emotions, no research has been able to pin point exact emotions that a company should look into for their products. As result several typologies and research findings are combined together to study and implement further. 3.3.1 Product and Service Pioneer in the Indian Coffee Cain, Mocha aims to serve one of the finest coffees to tantalise the Australian palate. With its varied range of coffees like Lattes, flavoured Cappuccinos, Mocha will serve various kinds of tea and savouries as well. However unlike its competitors it will also provide a very unique service. Mocha plans to open a Mocha Spa aimed at Coffee based Aroma Therapy. Consumers vary about consumption of caffeine but still need to de-stress can opt for this new innovative service offered exclusively by Mocha across Australia. Mocha Spa aims to offer various kind of packages basic one being a 15 minute aromatherapy using coffee beans and oil. Customer can have an option of upgrading it to a foot massage with aromatherapy at an extra cost. Along with the hot coffees and savouries, Mocha Spa will be a very niche and chick coffee house serving the caffeine in a healthy way. 3.3.2 Price Considering the economic downturn in many countries, people are now spending money wisely. In such condition it is important that the customers are taken into confidence regrading the services offered that they are surely value for money. At the same time care has to be taken that the customer willing to spend on service does not feel that the quality is not up to the mark. The pricing of the coffee and other products will be more or less in lines of its competitors. A regular Cappuccino will be priced at $3.00 for a takeaway and $4.25 for a cup. The Spa will be valued depending on the minutes an individual want to have. Smallest session being of about 15 mins offering Indian Roasted Coffee Aroma priced at $15. Customers will have option to upgrade the package with foot massage by paying extra $50 and have a 30 min session. 3.3.3 Place Venue plays a very important role for a new business venture. The selection of the place goes hand in hand with the positioning of the service and target market as it has to do a lot with the consumer emotions. To entice the customers, Mocha Spa and Cafe will open its first outlet on Surfers Paradise in Gold Coast. Being one of the most visited tourist destination of Australia, Surfers paradise gets international and domestic tourist in good numbers. 17 On an average Gold
16

PDF: Understanding and using emotions

Coast sees about 66,404,000 domestic visitors alone off all vivid age group and income group. 3.3.4 Promotions Promotions and advertising go hand in hand with the brand image. Advertising triggers the consumers emotions and promotion triggers one of the 7 sins Greed. In case of Mocha Spa the marketing promotions will be linked to do with the health benefits and tourism Wellness Tourism. Considering using organic coffee beans not only in the coffee products but even for the aromatherapy will send in a message to the customers that Mocha Spa is talking some serious wellness of their consumers. There will be regular ads in the local news papers, pamphlets at the tourists information centre and nearby pubs, there will be ad in the magazines relating to lifestyle and health. On the day of the opening special guests will be invited and to create some hype the entry will be only by invites. This will be followed by 2 days of sampling of certain coffees and free 10 mins aromatherapy on first come first basis. Once Mocha Spa and Coffee is set into business there will be periodic promotions linked with the coffee and the aromatherapy. Overall Mocha plans to spend a good amount on marketing and promotions in the first and the third year. 3.4 Evaluating Market Plan There are various elements in the marketing plan and hence it is difficult to pinpoint any one attribute towards the success or failure of the plan in the new market or new product18. Since Mocha is involved in offering both the product and the service, it is good to evaluate the process as well. Going by the definition of Evaluation as per the American Evaluation Association19, Mocha will assess the policies, product, services and the organisation from time to improve their effectiveness. Product/Service Evaluation This evaluation helps us determine whether to continue the product/service and the desired improvements in them. The measurable criteria would be: Sales Performance in case of coffee products and spa services. This will be measured looking at the sales figures on quarterly basis. Customer Satisfaction Index in case of services at the Spa. Customer feedback, surveys will be a good tool to measure this. Customer Loyalty to evaluate the brand index in order to review the marketing spends and objectives. Tools like Loyalty programme, point system on purchase of coffee products redeemable on Spa etc will help to track Customer Loyalty. Process Evaluation
17 18 19

http://businessgc.com.au/index.php?page=Tourism-Facts-and-Figures PDF: Evaluation of PDF: Mktg7_Eval

Process evaluation helps to evaluate the advertising strategy and promotion campaigns. Sales figures of a particular product will be recorded before an advertising campaign is launched and the sales figure post the campaign will be recorded. If the increase in sale covers at least the advertising cost, the campaign can be considered successful cause it would have created some brand awareness in the market which can be cashed in on latter dates. Another tool to measure the success is also by keeping track of the enquiries generated followed by the usage of our Spa services and or coffee sale. The parameters for Evaluation of Marketing should be set right when the marketing plan is being made and the parameters should be measurable. Careful selection of the parameters is of utmost importance to get accurate results.

4. Operations
Once the marketing plan is set it is time to look into the operations of the business. This would include the legalities, necessary licenses, employment, structure of the organisation, equipments required for the setup and other formalities. This section will lay down the elements and it will be followed by the section of Finance the most crucial of all considering that the business needs to be started within the budget decided by the board. 4.1 Legal and Licensing Requirement 4.1.1 Australian Business Number and Tax File Number There is a full list of Licensing required to start up a business depending on the type of commodity or service the business is dealing with. However irrelevant of the type of business first and foremost legality is to acquire an Australian Business Number (ABN) without which none of the license, insurance for the business etc is possible. Acquired from the Australian taxation office, ABN application enables to procure ABN and Tax File Number (TFN) which is mandatory for business Tax accounts like GST, Fuel Tax Credit etc. 4.1.2 Business Name Registration and Company Registration Since Coffee Day is a foreign company and wants to start a business under the name Mocha it needs to register the name as per the Business Names Act 1962. A three year registration fee for Business name Registration would cost $248.20 and since its a foreign company starting a business in Australia it will have to register as a Foreign Company which will cost another $412 as per the Corporations Act 2001. Apart from these two licenses which are mandatory for any foreign company starting business in Australia there are other licenses like Food License, Safety License, Entertainment license, Waste Disposal license etc. A list of the license required is attached in the appendix.

4.1.3 License for Spa Since Mocha is involved in Spa as well, there is no mandate to have a special spa license since it is an Aromatherapy and not Body massage. However to be on safer side Mocha should consider hiring Licensed Aesthetician and Masseuse. 4.2 Management Details Mocha will be a 100% subsidiary of Coffee Day. The company will setup its office in Brisbane. Initially a team from Cafe Coffee Day the Indian arm of Coffee Day will work on the project along with some of the experts Australian counterparts. The CEO of Cafe Coffee Day will look into to the operations and some of the senior employees of Cafe Coffee Day will be transferred there till the business is in momentum to set up a fully functional office. 4.3 Organisational Structure and Staffing Headed by the CEO of Cafe Coffee Day, Mocha will have its own team of Marketing Professional. The various departments would be Sales and Marketing, Finance, HR, Logistics and Admin. Staff for the Cafe will be locals and will be recruited. Initially it is planned that one cafe manager will be recruited on company payroll and two executives will be on contract for Cafe. For the Spa a fulltime licensed Aesthetician and a Masseuse will be recruited on company payroll. Logistics and Housekeeping will be outsourced. Tie-up with local vendors for on the go food, supplies for making coffee etc will be established and looked after by the Admin manager along with logistics head. Sufficient training will be given to the staff. Staff will wear a work shirt with the business logo to identify them and present a uniformed team approach. 4.3. a Personnel Plan20 Monday to Friday 2 employees on contract working from 7:00 am to 6:00 pm each @ $24000 Manager working from 9:00 am to 7:00 pm @ $42000 The Masseuse and Aesthetician each working from 9:00 am to 7:00 pm each @ $32000 Total Yearly Expense on Salary and Wages : $130,000 4.4 Professional Advisers Being a foreign land for Coffee Day it was wise to render the services of Professional Advisers. After speaking to various professional adviser firms, Coffee Day has finally decided

20

http://www.payscale.com

to hire Moni Solutions Pty Ltd21. A firm based out of Brisbane provides one stop solution and advices for finance, business planning and risk management under one roof. 4.5 Insurance and Security Issue In spite of taking extra care in terms of safety and hazards, accidents dont come knocking o the door. They just happen and so the business and the people have to be insured properly. Coffee Day will be insured well for any unfortunate accidents, burglary, all the machinery and equipments used in cafe and spa, all the employees and even the customer belonging if got stolen or damaged will be insured. Coffee Day will be taking this policy with a leading national insurer Bruce Insurance22 who has expertise from last 20 years in Cafe Insurance. 4.6 Business Premises Office will be in Brisbane and the first outlet will be of 236m2 of area on the main street of Surfers Paradise Gold Coast. The outlet has 170m2 of ground floor where the coffee shop is planned since it requires kitchen and store area and 66m2 on the floor above proposed for Mocha Spa. The lease is for 2 years lock in period. 4.7 Equipment Required There is a list of equipments required to purchase. Apart from the coffee which will be imported from Coffee Days own coffee estate the machinery and equipment to be purchased are: Coffee maker: $2500 each with standard fittings and accessories POS System: $1395 each with touch POS software IT Equipments: $ 2000 (lan network, laptop, printer) Furniture: $20000 for Cafe and $10000 for Spa Counter and Kitchen Equipment: $ 3500 Signage: $ 3000 Flatware and Tableware: $2000 Aromas for Spa This will be imported from India in bulk purchase 4.8 Logistics All the coffee imported to Australia will be stored in a warehouse at Manspo in Brisbane. The warehouse is 198 sq.m. and Mocha will be paying $25000 per year as the lease. The lease is for 2 years for now. A contract has been done with Toll-Express for logistic services.

21

http://www.monisolutions.com/pgtwo.html

22

http://www.bruce.com.au/BruceCafe/tabid/556/Default.aspx? gclid=CI_i6Ias5qUCFYVypAodtSdn2A

4.9 Critical Risks / Contingency Plan The critical risk involved is that of the Coffee Spa concept not picking well among the customers. The Cafe business wont be at much risk as the products sourced are comparatively cheaper since they are from the sister company. One of the reasons to hire licensed Aesthetician and Masseuse is if the coffee spa concept doesnt go well it can be converted into full sledged spa. Provisions in the interiors for this contingency plan will be made in advance.

5 Financial Projections
5.1 Basic Assumptions
Mocha plans to capitalize on the growing demand of premium coffee. The parent company Coffee Day has provided sufficient start-up capital. The initial funding will be around $300000 of which $180000 will be invested by Coffee Day and the rest $120000 will be provided in a overdraft by the bank. An overdraft was agreed to be the most suitable arrangement for our first year as financial requirements will vary substantially from month to month and there will be no profits with which to repay capital. After the first year, trading levels will be more predictable and finance arrangements will be reviewed. Mocha will maintain a healthy 60% gross margin and religiously control the operating expenses to generate enough cash to finance the second year.

General Assumptions Current Interest Rate Long Term Interest Rate Exchange Rate Rs - AUD Year 1 8% 8% AUD 1 @ Rs. 45 Year 2 8% 8% AUD 1 @ Rs. 45

5.2 Analysis of Financial Forecasts 5.2.1 Sales Mix Forecast

Conservatively Mocha is looking at about 300 325 customers each day with an expenditure of an average $4.25. The values are arrived after researching the foot fall in nearby coffee house. In the Spa Mocha is expecting around 10 customers each day for the first few months till the concept picks up by marketing and promotions. Mocha expects growth to occur across all categories. Year one will be a bit slow at a monthly growth of about 9-10% on average. However over the period of years Coffee and Spa is expected to grow well. Spa is expected to grow at 45% and much of the marketing concentration will be on this innovative service to promote the overall chain business. Detailed Sales Forecast is shown in the appendix. The graphs below show the growth range across the category.

Monthly Sale

Yearly Sale 5.2.2 Cash Flow Forecast Detailed cash flow is shown in the appendix. However from the chart it can be seen that Mocha will maintain a healthy cash inflow into the business which will help to pay of the debts on time and yet have enough cash for future operations. At the end of the year it is projected to have at least $574,704 in cash for future operations. Detailed cash flow is shown in the appendix.

5.2.3 Projected Profit and Loss Statement As per the projected profit and loss statement in the first year Mocha is expected to have net sales of $627,249. Being the first year the operating expenses are calculated on the higher side. Taxes are calculated @ 19%. In the first year Mocha expects to have a Net Profit to Sales Ratio as 18.6% and by the third year it should sore up to 30.56%. Mocha has planned an impressive promotional plan and will pump in more money in the third year considering it might come up with more promotional items to push the brand. Appendix shows the whole Proforma Profit and Loss Statement. Since Mocha is a sister concern of a private limited company, the business plan shall not bear owners personal expenses and assets and liabilities. All the expenses and liabilities are taken care by the parent company on the consent of board of directors.

6. Implementation Table
IMPLEMENTATION TABLE Task
Business/Marketing Plan Secure Funding Look for the store outlet locations Select the professional advisers and insurance company Secure lease Secure name licensing Marketing plan Structure company type Develop investor program Select and order furnishings Site plans Select construction contractor Select and order lighting Select supplier for Spa Oils Create employee manual Join Chamber of Commerce Select cash register system Business license, etc. Select paint contractor Select and order flooring Gift items, suppliers, order Select supplier for savouries Select Logistics company Select equipment supplier Graphics/brochure design

Start Date End Date

01/01/20 11 01/02/20 11 26/01/20 11 26/01/20 11 10/02/20 11 10/02/20 11 10/02/20 11 15/02/20 11 15/02/20 11 01/05/20 11 01/03/20 11 15/03/20 11 01/04/20 11 01/04/20 11 01/04/20 11 01/04/20 11 15/04/20 11 15/04/20 11 15/04/20 11 15/04/20 11 15/04/20 11 15/04/20 11 15/04/20 11 15/04/20 11 15/04/20 30/04/20 11 30/04/20 11 09/02/20 11 09/02/20 11 30/04/20 11 30/04/20 11 30/04/20 11 30/04/20 11 30/04/20 11 15/06/20 11 30/04/20 11 15/04/20 11 30/05/20 11 30/05/20 11 30/05/20 11 30/05/20 11 30/05/20 11 30/05/20 11 30/05/20 11 30/05/20 11 15/05/20 11 30/05/20 11 30/05/20 11 15/05/20 11 30/05/20

Department
Marketing Marketing Admin Admin Admin Marketing Marketing Marketing Marketing Admin Admin Admin Marketing Marketing HR Admin Admin Admin Admin Marketing & Admin Marketing Admin Admin Admin Marketing

Select confection suppliers Select juice suppliers Credit card companies Create training program Select music system Install wireless Internet Recruit Employees Recruit licensed Masseuse and Aesthetician Select Security Company Design, print stationery Pre-opening parties GRAND OPENING

11 15/04/20 11 15/04/20 11 30/04/20 11 30/04/20 11 01/05/20 11 01/05/20 11 01/07/20 11 01/07/20 11 01/07/20 11 15/07/20 11 01/09/20 11 15/09/20 11

11 30/05/20 11 30/05/20 11 15/06/20 11 15/06/20 11 15/06/20 11 15/06/20 11 15/09/20 11 15/09/20 11 20/07/20 11 31/07/20 11 15/09/20 11 30/09/20 11

Admin Admin Admin HR Admin Admin HR HR Admin Admin Marketing Admin & Marketing

APPENDIX
Appendix I

APPENDIX II LICENSES REQUIRED

I0034 A - ABN Registration (Companies/Others) S1180 A - Business Name Registration

C0403 A - Company Registration (Foreign) L031-054 Advertising device-Gold Coast C0133 B - Fringe Benefits Tax Registration C0315 B - Superannuation Guarantee Requirements S0162 B - Training (Apprenticeships & Trainees) S0213 B - Workers Compensation L075-054 Commercial vehicle-Gold Coast C0728 D - Music Licence - Background Music (APRA) C0729 D - Music Licence - Music on Hold (APRA) C0395 D - Music Video Clips/Protected Sound Record C0374 D - Trade Mark Registration S0434 D - Vehicle Regn (Commercial Vehicles) L063-054 Development permit (IDAS)-Gold Coast S0052 Food Business Licence L006-054 Food Business Licence-Gold Coast S1125 Food Safety Processing Accreditation S1160 Indigenous Fishing Permit L021-054 Outdoor dining-Gold Coast L051-054 Trade waste-Gold Coast
http://www.sd.qld.gov.au/dsdweb/htdocs/slol/frm_smlic_workspace.cfm? CFID=2832773&CFTOKEN=43605779

APPENDIX IV SALES MIX FORECAST

Monthly Sales in $ for Year 1

Mont h1 CoffeeDri nks Food Spa Total 18000 7500 4500 $300 00 Mont h2 19620 8175 4905 $327 00 Mont h3 22563 9401 5641 $376 05 Mont h4 25200 10500 6300 $420 00 Mont h5 27216 11340 6804 $453 60 Mont h6 28200 11750 7050 $470 00 Mont h7 31020 12925 7755 $517 00 Mont h8 33502 13959 8375 $558 36 Mont h9 36852 15355 9213 $614 20 Mont h 10 40537 16890 10134 $675 62 Mont h 11 44591 18579 11148 $743 18 Mont h 12 49050 20437 12262 $817 49

Yearly Sales in$

Year 1 CoffeeDri nks Food Spa Total 376350 156812 94087 $6272 49

Year 2 400000 196015

Year 3 520000 254820

136427 197819 $7324 $972638 42 .8

APPENDIX V CASH FLOW FORECAST

Year 1 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance

Year 2

Year 3

$627,249 $627,249

$732,442 $732,442

$972,638 $972,638

$0 $0 $0 $0 $0 $0 $0 $627,249 Year 1

$0 $0 $0 $0 $0 $0 $0 $732,442 Year 2

$0 $0 $0 $0 $0 $0 $0 $972,638 Year 3

$219,537 $250,900 $470,437

$219,733 $292,977 $512,709

$340,423 $389,055 $729,479

$0 $0 $0 $0 $0 $0 $15,000 $485,437 $141,812 $141,812

$0 $0 $0 $0 $0 $0 $15,000 $527,709 $204,733 $346,545

$0 $0 $0 $0 $0 $0 $15,000 $744,479 $228,160 $574,704

APPENDIX VI PROJECTED PROFIT AND LOSS STATEMENT

Proforma Profit and Loss Year 1

Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % $627,249 $94,087 $15,000 $109,087 $518,162 82.61%

Year 2
$732,442 $103,000 $18,000 $121,000 $611,442 83.48%

Year 3
$972,638 $110,000 $22,000 $132,000 $840,638 86.43%

Expenses Payroll Sales and Marketing Depreciation Rent Utilities Insurance Legal/accounting Payroll Taxes Misc - maintenance, cleaning, training, fees Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

$130,000 $12,500 $6,000 $143,000 $9,200 $2,400 $6,000 $7,150 $24,000 $340,250 $177,912 $183,912 $0 $64,648 $113,264 18.06%

$160,000 $8,000 $4,000 $143,000 $14,000 $2,400 $6,000 $8,800 $25,000 $371,200 $240,242 $244,242 $0 $70,528 $169,714 23.17%

$230,000 $10,500 $4,000 $150,000 $16,000 $2,500 $6,000 $12,650 $25,000 $456,650 $383,988 $387,988 $0 $86,764 $297,225 30.56%