Caf\u00e9 Royale\u2019s Coffee and Snack Vending Machines:
\nA Comprehensive Feasibility Analysis<\/p>\n
Name
\nInstitution
\nCourse
\nProfessor
\nDate<\/p>\n
Caf\u00e9 Royale\u2019s Coffee and Snack Vending Machines:
\nA Comprehensive Feasibility Analysis
\nCoffee and Snack Vending machines are highly profitable business ventures in contemporary society. These machines do not require any human resources to operate; instead, by inserting enough money in the machine, customers can get their coffee or snack and change, if any (Bodhale & Kulkarni, 2017). Hence, to determine the feasibility analysis of this business venture, this presentation will look into the industry feasibility assessment and operational mapping, market condition, the marketing plan, financial plan, and the ethical, social, and environmental responsibilities.
\nIndustry Feasibility Assessment and Operational Mapping
\nOver the years, Caf\u00e9 Royale has focused its attention on the walk-in customers in need of snacks and coffee. Today, the company has been able to open fifteen more branches across Mesa City, which has contributed to the high-profit margins even during the Covid-19 pandemic. The executive team is passionate about the business venture, given their experience dealing with the caf\u00e9 branches. Hence, the company can lease vending machines and acquire working space in the established strategic areas.
\nThe goal of venturing into vending machines is to expand the company\u2019s operations from one centralized area to others areas to serve our customers better and improve the company\u2019s productivity through increased profit margins. The strategic team identified five possible working areas. The business venture is viable due to the availability of the company to afford the nonfinancial resources as indicated by the annual budget and the founders’ passion for the business.
\nMarket Analysis
\nMesa city accommodates several small businesses, including fast food cafes. Recently, the city introduced the Mesa CARE Initiative and relief programs to Help businesses in coping with the drawback of the Covid-19 pandemic. As local cafes’ company, we can now expand our patio areas to accommodate many customers. Besides, our recent survey revealed that the city’s population loves take-away fast foods and drinks to avoid long queues and congestions, which are regulated due to the Covid-19 pandemic.
\nAs a result of this change in customer preferences, other companies have begun the vending machine business. The market has four competitors engaged in soda vending machines, cold food vending machines, and a few coffee and snack vending machines. Caf\u00e9 Royale’s strategic goal is to provide quality hot beverages and snacks through the vending machines and ensure consistency of stocking to survive the level of competition.
\nThe targeted market is Medical Centers, Education institutions, Office buildings, and Maintenance areas. These four areas in Mesa City are usually high populated due to the kind of services offered. That allows the company to get an easy market share for the business venture to thrive effectively. The target market is lovers of hot beverages, which go hand in hand with snacks, hence the idea for operating both coffee and snack vending machines.
\nMarketing Plan
\nCaf\u00e9 Royale will introduce its coffee and snack vending machines designed attractively to capture consumers’ attention. The company will utilize a penetrative pricing strategy, extensive advertising, and expansion of service provision to increase our revenues and growth rate (Fotiadis, Mombeuil & Valek, 2018). The marketing plan incorporates the product, price strategy, distribution, and promotion.
\nProduct
\nProducts required in the coffee vending machine are paper cups, sugar stirrers, milk, chocolate sprinkles, and condiment units to compliment the machine and hot water boiler. The reusable cups will be tulip-shaped 350ml and branded with the company’s name Caf\u00e9 Royale for a unique description. The snack vending machine products will include but are not limited to the snickers bar, sun chips, planters trail mix, granola bars, and cheez-its. Having both vending machines in one place is advantageous since customers who purchase coffee will need a snack.
\nPrice
\nA coffee cup will be sold at a suggested retail price of $2.40 as an entry pricing strategy to attract customers in the initial six months of operation. All snacks will sell based on the current retail market price.
\nDistribution
\nThe vending machines will be located at the patio areas in the identified strategic locations. However, one of the company’s employees will be within the area if the customers may need any Helpance.
\nPromotion
\nThe company will hire sales representatives to promote the items at the relevant outlets by giving coffee samples for the first month. Our company will engage in advertising to create awareness of the new vending machines and the quality of our coffee. The costs incurred in the promotion are within the company’s budget.
\nFinancial Plan
\nThe company will incur costs in purchasing the required resources to begin the business, leasing the vending machines, and paying rent in the target placement areas. Leasing machines is expected to cost the company lots of money. Hence, we opt to source a loan from a bank of $18,000 to cater for the expense in the two years of operation. The figures below represent the Balance sheet and the income statement for the subsequent two years.
\nCaf\u00e9 Royale
\nBalance Sheet
\nYear
\n2021\t2022
\nAssets
\nCurrent assets:
\nCash \t100,000.00\t112,590.00
\nAccounts Receivable \t7,500.00\t8,600
\nPrepaid expenses \t500\t830
\nInventory \t45,500.00\t50,740.00
\nTotal current assets \t153,500.00\t172,760.00<\/p>\n
Property & Equipment \t60,000.00\t48,000.00
\nTotal Assets \t213,500.00\t220,760.00<\/p>\n
Liabilities
\nCurrent liabilities:
\nAccounts Payable \t1,400.00\t1,895.00
\nAccrued expenses \t900\t945
\nUnearned revenue \t250\t520
\nTotal current liabilities \t2,550.00\t3,360.00<\/p>\n
Long-term debt \t18,000.00\t18,000.00
\nOther long-term liabilities \t1,500.00\t1,750.00
\nTotal Liabilities \t19,500.00\t19,750.00<\/p>\n
Shareholder’s Equity
\nEquity Capital \t2,500.00\t2,100.00
\nRetained Earnings \t1,450.00\t9,500.00
\nShareholder’s Equity \t3,950.00\t11,600.00
\nTotal Liabilities & Shareholder’s Equity \t23,450.00\t31,350.00<\/p>\n
Fig 1. A table showing Caf\u00e9 Royale\u2019s vending machine business balance sheet for the years ended 2021 and 2022.
\nCaf\u00e9 Royale\u2019s
\nIncome Statement
\nYear
\nDescription\t2021\t2022
\nRevenue stream 1\t30,000.00\t45,000.00
\nRevenue stream 2\t32,000.00\t47,000.00
\nReturns, Refunds, Discounts\t-560\t-590
\nTotal Net Revenue\t61,440.00\t91,410.00<\/p>\n
Cost of Goods Sold\t15,000.00\t19,000.00
\nGross Profit\t46,440.00\t72,410.00<\/p>\n
Expenses
\nAdvertising & Promotion\t3,000.00\t3,000.00
\nDepreciation & Amortization\t1,450.00\t1,595.00
\nInsurance\t1300\t1300
\nMaintenance\t850\t750
\nOffice Supplies\t500\t400
\nRent\t8500\t8500
\nSalaries, Benefits & Wages\t10,000.00\t10,000.00
\nTelecommunication\t100\t90
\nTravel\t68\t72
\nUtilities\t50\t65
\nOther Expense 1\t75\t55
\nOther Expense 2\t80\t60
\nTotal Expenses\t25,973.00\t25,887.00
\nEarnings Before Interest & Taxes\t660\t514<\/p>\n
Interest Expense\t55\t28
\nEarnings Before Taxes\t605\t486<\/p>\n
Income Taxes\t300\t255
\nNet Earnings\t305\t231<\/p>\n
Fig 2. A table showing Caf\u00e9 Royale\u2019s vending machine business income statement for the years ended 2021 and 2022.
\nEthical, Social, and Environmental Responsibilities
\nAt Caf\u00e9 Royale, we believe that a responsible approach to the broader community is essential. Implementation and improvement of policies and systems are regularly updated to ensure that the company business is conducted according to the ethical, social, and environmental issues since they represent its reputation. Business ethics incorporates a whistle-blowing policy in the event of any emergency to be reported to the management by the employees, recognizes the global group business ethics, and sets standards that all employees should strive to achieve. To protect the environment, the company will use products that can be recycled and continue to work with environmentally conscious suppliers and distributors.
\nReferences
\nBodhale, A. P., & Kulkarni, J. S. (2017). Case Study on Different Vending Machines.
\nFotiadis, A., Mombeuil, C., & Valek, N. S. (2018). Designing and implementing a marketing plan. In The Emerald Handbook of Entrepreneurship in Tourism, Travel, and Hospitality. Emerald Publishing Limited.<\/p>\n","protected":false},"excerpt":{"rendered":"
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