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Namaaria Company

Ms. Pattamaporn Phutsadee Mr. Kasinont Kositanont


Mr. Jackhapong Jinasawat
Financial Manager Marketing Manager
General Manager

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Mr. Kanchanok Toodang Mr. Natchapon Kitudom Ms. Somrutai Mahakkaphan Mr. Patiphat Popan Mr. Sanhawat Eakenuntakul

Marketing Assistant General Manager Sales Manager Assistant Manager Sale Assistant
Chapter 1: Introduction

Background and Significance of the Project

Coffee shop is the meeting and relaxing restaurant of every age from teenage to older
because time of relax is time of drink such sleeping time. Why sleeping time? Sleep is release
body to feel free like drink, drink is release weary from heart to chill out. Coffee shop also
provide food and dessert to eat with beverage to give you enjoy your free time with smooth
taste of dessert and delicious meal. Now a day

Process of coffee shop is running on small business and planning for provide good
service with low price. So we plan to study the process of small business about level of
management, service, supplier, target segment, operation cost and function of internal and
external. Coffee shops just small businesses and use less budget to launch. Coffee shops not
clear level of command because everyone can be every level. So we confirm that no one
study this business seriously before and if we know this business clearly every one can build
this kind of carrier.

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Project Objectives

First way to study the project compliable and know the market of
business by knows the competitor advantage and analyzes them to compete. And look
backward to study business launching from investment to start the business.

Benefits of Project

In order to study in Project feasibility course, the subject is to know


how to perform the business and forecast the way to establish business whatever to
want by knowing of study 3Cs dimension to analyze risk of the business.
So we’re going to study the business. Now a day, many people pay more
attention to coffee, Thai coffee specifically. Our group understands customer and
what demand while study competitor, find out the way to make profit from customer
and try to do anything that customers are satisfied. We take the feedback to improve
our service or make a new product. We choose right strategies to adapt with the
situation. We can manage risk and take advantage on competitors. So we can keep
money and decrease cost after close business because we calculate income and cost to
perform business in next day. If we can branch our company and our coffee can make
satisfaction for customer, we will increase several products and promotion for
customers. If we can branch our company and our coffee can make satisfaction for
customer, we will increase several products and promotion for customers.

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Time Frame of Namaarie Company

Date and time Designations Problems/Events

- Planning strategic competitive

- Planning strategic market


17 – 24
- Planning to conduct people in the group to -
Nov 2009
perform in each sector of task

- Selection the best alternative of strategy

- Distribution of tasks to each department


25 – 30 - Setting specific time for conducting - Some strategies are
Nov 2009 business complicate

1–8 - Conclusion before conducting business

Dec 2009 - Solving the appeared problems -

- Customers don’t
want to drink coffee
9 Dec 2009 due to recession.

– - We also serve to
- Conducting customer not
25 Jan 2010 actively

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26 Jan 2010
- Analyzing appeared events or problems
-
during conducting business
2 Feb 2010 -
- Find solution to solve the problem

- The company want


- Planning to improve and develop the to expand branch
3–9
strategies. - No more market to
Feb 2010 perform

10 – 16 - Planning to expand the branch of the


Feb 2010 company -

Plan to perform this project in 7-8 weeks

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Gantt chart

November December January

w w w w w w w w w w w w
Designations e e e e e e
e e e e e e
e
e
e
e
e
e
e
e
e
e
e
e
k k k k k k k k k k k k
1 2 3 4 1 2 3 4 1 2 3 4
Planning strategic
Distribution of tasks to each department
Define the business opportunities
Conclusion before conducting business
Study to conducting
Analyzing appeared events or problems during
conducting business
Planning to improve and develop the strategies
Planning to possible expand the branch of the
company
Prepare a possible way to launch a business

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Chapter 2: Industry Profile

Nature of Industry
 History of coffee

World coffee history

Coffee began from local plant of Abyssinia and Arabia discovered in century 6th
around 575 BC. Someone told that the coffee found in Kaffa city in Ethiopia then they called
that plant a Kaffa and turn into coffee till now. In fact the true history of coffee was discover
in Abyssinia around Arabia or Middle East Arab many people not interest about coffee since
it go through century 9th one goat of Arabian name Kaldi pet their goats then one goat eat a
red fruit and it act impetuously. Kaldi told this story to Islam monk and the monk took the red
fruit and peeled it of, roasted and boiled in a hot water to drunk. The monk found that the
black water make him impetuously and told this to another one. The Arabian knew this story
and drunk coffee more and more soon coffee
went to Italy, Netherlands, German and France.

The Arabian called the coffee plant


Kawah or Kaweh it’s mean strength or vigor.
The Turkey called Kaveh then the name of
coffee called differently around the world like
Koffee and coffee in England till now. In
Thailand called Gobee Kaewfee and Gafaar till now.

Coffee originated in tropical Africa, from where it has since been introduced to most
tropical countries throughout the world. Coffee was introduced to Southeast Asia and the
West Indies in the 17th and 18th centuries.

The real start of the Thai coffee industry is relatively young. According to
governmental statistics, the total coffee plantation area in 1960 was only about 19,000 rai
(approximately 7,600 acres), producing a mere 750 tons of coffee. In the same year, Thailand
had to import almost 6,000 tons of coffee. To improve the trade balance, the Thai government
started a successful campaign promoting Robusta coffee growth in Southern Thailand.

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This campaign was further cemented when opium crop replacement became an
official Thai Government program in the 1970s. Supported by the Royal Family, the UN and
many other governmental and non-governmental organizations, the hill tribe farmers in the
Golden Triangle and along the borders of Burma and Laos started to grow Arabica coffee.

In 1976, Thailand officially became a coffee exporting nation, selling 850 tons of
Robusta coffee in the world market. Helped by strong world market prices in the 1980s,
exports thrived in the following years and culminated in 1991-2 at almost 60,000 tons. The
collapse of the "International Coffee Agreement" in July 1989 and the following slump in
world coffee prices has since hurt the coffee farmers hard.

Facing the threat of an oversupply situation, the Thai government made a turnaround
and, under a 5-year-plan (1992-1997), began to encourage the coffee farmers to switch to
other crops in an effort to reduce the total coffee planting area from a level of almost 500,000
rai (approximately 200,000 acres).

Thailand is a coffee nation, ranked third (after Indonesia and Vietnam) in Southeast
Asia in annual raw coffee production. While there are many species of coffee trees in the
world, only Arabica and Robusta have major economic significance, both of which are grown
in Thailand.

At present, Thailand produces approximately:

• 50,000 - 80,000 tons of Robusta coffee, of which 40% (ca. 30,000 tons)

are processed locally and about 60% (ca. 50,000 tons) is exported.

• A few thousand tons of Arabica coffee, which are almost entirely


processed locally.

Thai Robusta

Robusta is grown on plantations in Southern Thailand, mainly in the following provinces:


Surat Thani, Chumporn, Ranong, Nakorn Si Thammarat, Phang-Nga and Krabi.
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Robusta coffee grows in lower altitudes. For the growers, Robusta has many advantages: the
trees are easier to cultivate, more disease-resistant, can tolerate
larger temperature and moisture extremes, produce more beans
and their fruits mature considerably quicker than their Arabica
counterparts. At the same time, however, Robusta is generally
regarded as lesser quality beans and accordingly yield lower
prices.
Thai Robusta is of good quality and internationally well
established. Major export markets are the United States,
Europe, Japan and Singapore. In the local market, Robusta is
mainly used for all kinds of canned coffee drinks as well as soluble (instant) coffee. Proper
processing and new roasting technologies, however, allow gourmet and bean coffee roasters
to also create good quality blends with Thai Robusta.

Thai Arabica

Arabica is grown on plantations in Northern Thailand, mainly in the following provinces:


Chiang Mai, Chiang Rai, Lampang, Mae Hong Son and Tak.
Arabica trees thrive at higher altitudes, which in Thailand is between 800 to 1,500 meters. In
These altitude, the beans mature at a slower pace, producing generally a richer, denser, more
flavorful bean. Arabica in Thailand is still in a kind of experimental stage, which helps
explain its low yearly harvest. Most Thai Arabica coffee is grown by small holders, such as
hill tribe families and villages, as well as in research stations (Wawi, Chang Khian, etc.) and
development programs. The few hundred tons of beans that are annually picked are brought
almost entirely by local traders and roasting factories for producing roast and ground coffee.

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Situation Analysis

Coffee shop businesses expand continually since 2002-2003after Starbuck coffee brand
divide Coffee shop’ s market share in Thailand and Thai brand “Ban Rai Coffee” also
expand quickly in the same time that make many people pay attention and invest to coffee
business. Investors trust this business can refund more benefit and stable. But 2-3 years ago,
many coffee shops go bankrupt cause from recession economic since 2008-2009. Analyst
consider coffee shop business are grow and worse because coffee shop are effected from
economy. By the way it has increasing in consumers and segment. The medium coffee shops
are most growing segment because they are easy to reach with consumer, can keep standard
and coffee taste. Coffee shop business can grow up continually in the future because more
increasing in net order coffee bean.

Ban Rie Coffee

Since 1994-1996, Mr.Saichon Payaonui (President) had to travel around Thailand in


order to learn the different culture to use in his job. Along the way, he usually stopped in gas
station to drink a cup of coffee. Fortunately, he found a little coffee shop and he was very
impressed about grinding and brewing manners. They made the coffee cup by cup in order to
keep it fresh for each customer. For those reason, it called “Fresh Coffee”.

He began to explore his idea by using the beautiful modern building, cleanliness,
convenience and etc. His first coffee shop was opened on December 21, 1996. In the first
period, he tried to positioning as a traditional Thai coffee shop by using Thai brand name
“Banrie Coffee”. Many things around the shop show being Thai style. The building was
designed by using old Thai style but also look modern. He used yellow spotlight to make it
feel warming and around with many kinds of trees to relax.

Now we give the significant to screening the coffee. We get 100% Arabica coffee
from Royal Project in the north of Thailand. It has to growth on the hill high 800 meters
above sea level. Then it is roasted at roasting facility in Saraburi province at different levels
of temperature to make a unique taste of Thai coffee as follow:

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1. Asia BORK Blend (Arabica strong bitter)
2. Banrie BORK Blend (Arabica medium bitter)
3. Bangkok BORK Blend (Arabica light bitter)
4. Thai Pak Tai BORK Blend (Robusta strong bitter)

All of them will be contained in a small bag (250 grams) then we will refresh it every
15 days to make it fresh. Each customer will get a real fresh coffee because our staff will
make it one cup per one customer and they will serve a hot coffee by containing in pottery in
order to keep it taste and aroma.

By all of the above, it indicated that we have a strong intention to satisfy the customer. All of
the idea and process are operated by Thai then we enlighten the world with Thai business as
our slogan “Banrie Thai Style”.

In Chaing Rai have many coffee shops such as Shong Café has branch in muang
Chaing Rai and the front of Mae Fah Laung University, Parabola locate on Mae Chan district,
Sweet Mae Salong locate on Doi mae Salong and Doi Chaang Coffee, Lepetit café and
Wawee coffee locate on muang Chiang Rai. So Shong Café and Parabola is important
competitor of our coffee shop because two shops is nearly our shop and very popular in
customer.

Latte art

The mere mention of this magical phrase incites


reverence; reverence and awe...a universal awe...a
smooth, dark, slightly bitter awe...an awe felt by the
most utilitarian of laymen as well as the
"traditional" art masters of the world.

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Ancient Latte

The origins of latte art are shrouded in mystery, but historians have unearthed clues
that prove the art form is thousands of years old. Assyrian reliefs from nearly 1000 BC show
the great King Ashurnasirpal II partaking of this activity, perhaps as a leisure interest in
between conquering the lands of the ancient Near East, murdering his enemies and stealing
ideas from the Sumerians. By all accounts, however, Ashurnasirpal's attempts at the "godly
art" were quite dismal - a fact undoubtedly vexing to the ruler, and perhaps the source of the
furiously warlike tendencies his civilization is today remembered for.

The Egyptians soon learned of this wondrous way of life, but not soon enough to save their
ailing culture. After wandering in a haze through the periods historians now call the Old,
Middle and New Kingdoms, the Latte Period, when the Egyptians discovered and explored
the terrific power of the Art, proved to be only a last gasp before the Persians conquered the
kingdom. But what a mighty gasp it was! Hieroglyphics record the great introduction of latte
art into Egypt and the hope it seemed to bring. What use had the Egyptians for denial any
longer, with this new savior now in their apparently capable hands? Alas, it was the very
power of the latte itself that proved the undoing of this great civilization. The hands and
minds that built the pyramids were yet too weak to control the possibilities of latte art, and
they perished at the hands of anti-lattate barbarians. For centuries the secret of latte art was
believed to have been buried with the Egyptians.

Medieval Latte

Fortunately, the latte had only given the Greek and Roman civilizations a pass. Latte again
surfaced during the middle Ages with the institution of church monasteries. One of the most
important duties of the monks during this period was the preservation of knowledge through
the copying of texts. Many a monk ruined his carefully-inked illumination by falling asleep in
the middle of the writing process. A call came from all corners of Europe to find a way to
ward off sleep to maximize the amount of work that could be done, and the small monastery
of Cluny, after years of searching and experimenting, formulated a curious mixture of ground
coffee beans and milk that could keep one alert. Latte had been rediscovered – but latte art,
the one true manifestation of latte, had not. It would not be until the Renaissance that the art
of the latte would once again grace the world.
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Renaissance Latte

During the Renaissance latte art was reintroduced and reached its height. Great baristas such
as Leonardo da Vinci, Bob Dole, Dante Alighieri and Niccolo Machiavelli created latte
works of staggering beauty and meaning; no original works now exist due to the ephemeral
nature of the medium, but the influence of the latte can be seen in many surviving works in
other formats. Michelangelo’s The Creation of Adam, painted on the ceiling of the Notre
Dame, shows the primeval father of mankind reaching out with his finger to touch a latte,
anthropomorphized in the picture as an old bearded man.

Unfortunately, the popularity of latte art during the Renaissance led to a glut of amateur latte
artists, who created works that were insubstantial shades next to the cups of the masters. At
the close of the Renaissance latte art had lost its sacredness and become mainstream. The
dream was dying.

Modern Latte

Today, insidious new forces have crept into latte art. Self-proclaimed artists arrogantly crow
about their “extreme pours” and “physics-influenced mixes,” and the unassuming public
allows such heresies to be crammed down their gobs because they know nothing of the past
glories of the latte. Artists, once rare, now number in the thousands and tens of thousands,
plying their distorted craft like parlor magicians delighting children with simple sleight-of-
hand. It will be difficult, if not impossible, for the art of the latte to regain its magnificence at
this point.

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Product/Service (in General)

We have main product is coffee such as Mocha, Late, Cappuccino, Espresso and Americano
and also have soft drink and bakery such as Cocoa, Ice tea , shot cake, and Italian food.

Coffee Products

Espresso Only black Coffee

Latte Black coffee with fresh milk

Americano black coffee with hot water

Cappuccino Black coffee with milk foam and Cinnamon

Mocha Espresso with hot Chocolate

Soft Drink

- Hot & Cool Cocoa


- Kiwi Soda, Apple Soda, Blueberry Soda and Strawberry Soda
- Ice Tea, Milk Tea, Ice lemon tea
- Orange juice, Tamarind juice

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Bakery

- Choc Cake, Black-forest-cake, Green Tea cake


- Banana cream pie, Blueberry pie, Coconut pie, lemon pie, Cherry-Cheese-Pie,
Macadamia Pie
- Brownie

Italian Food
- Spaghetti
- Pasta
- Macaroni

Service

The important of service is “Service Mind” because customers always want to take
care. It can make customer to be loyalty and give word of mouth to other people which by the
way to promote of our coffee shop. Then we provide another service such as internet café,
reading zone, music zone and meeting zone.

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Vision of our organization

Vision of our organization is bringing Thai’s coffee specifically to produce coffee for
Thai customer and sell product low price. We have hi-technology coffee processing.

In about sell coffee, we have several style and taste of coffee that customer can
choose by themselves. In social responsible, we plants coffee by employ people in local
place, it make opportunity in work and income and develop to product of community and we
have save and develop environment plan in business.

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Mission

We try to develop taste of coffee and present several kind of coffee for customer. In
about marketing, we target main group people such as teenagers and adults because most
people in this group are drink coffee by we sell coffee low price but high quality.

We try to make loyalty and word of mouth in customer group and try to increase branch of
business around province in 2 years

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Strategy

Corporate Level

Our coffee shop is the small business the use the use fewer budgets to launch and the
target is the teenage then our product and good service are low price.

1. Vision
-Our vision is to become the number 1 of Coffee Shop in front of university with the
low price.

2. Policy

- Fun, Talk, Work, Food. We’ll be the center all of these kinds for teenage.

3. Objectives

- We are going to be the coffee shop that teenage can come with less money but will
back with invaluable happiness.

4. Process project teams


-The most employees is the teenage because they know what they want

5. Individual job performance


- We’ll train them to be the best server to service the customers but we’ll not change their
mine

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Business Level

Target Group is Teenager

1. Competitive advantages
- Planning for provide good service with low price
- Close to the customers
- Style of coffee shop

2. Cost leadership
- Close to the coffee suppler
- use fewer budgets to launch

3. Quick-responses
- Take the feedback to improve our service or make a new product
- The most employees is teenage that we can ask them to try of our new
product to make the customer satisfaction

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Functional Level

1. Marketing
- Can support every targets group

2. Financial
- Keep money and decrease cost after close business because we calculate
income and cost to perform business in next day.

3. Human resource management


- The most employees must become from the local because they are the best who
can know what the local people want
- They should have great looking
- Our employees must know ever position and process in our shop by on the job
training

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Chapter 3: Market Feasibility Study
Market Analysis

 General Environment Analysis


- Political Analysis

Politic is out of control by business. Many competitors have to face with this too.
Politic might positively affect to business investment or negatively affect as obstacle in
business success. So, we always follow political news and apply in our business.

• Government policy is factor that both support and obstruct some kinds of business
success.

• Laws and regulations of government affect directly to success/failure and cost of


some kinds of business such as determine business open-close time and determine
zone of business.

• Price control policy; government determines ceiling price some kinds of necessary
goods. This operation affect to profit rate of small business or new market business
normally has high cost already that can’t compete at ceiling price.

• Open free and restricted import affect to advantages/disadvantages in competition and


determining goods price of involved business.

- Economy Analysis

It is out of control from business and others competitors must face as same as politic.

• National economy condition; average income per person, unemployment condition,


growth/slow down of GDP, inflation, deflation, all of these affect directly to
purchasing power of customers who are target group.

• Currency exchange affect to cost and risk of imported/exported business and


competition in international market.

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• Tax rate that government determine for business and product will affect to
advantages/disadvantages in determining price selling and cost of competition
including import tax and specific business tax.

• Cost of labor and production compare with important competitors, especially


international competitors.

- Social and environment Analysis

Business in different industry, market, region might face with risk. It has different
business feasibility because business operation environment and market environment that is
different.

• Business life cycle; industry or market products/services mostly have cycle short or
long that may be different such as fashion product has short life cycle, fast outdated
and low demand in market faster than other products.

• Consumer behavior in each market including more or less brand loyalty, price
conscious if it’s high, high price competition and low profit rate.

- Technology Analysis

Technology has changed rapidly today that is called the digital age. Marketing is the
same. Result of technology change make marketing change too. E-Commerce has grown
continuously and force marketing must adapt following trade system. So, E-Marketing
happens. It helps to operate marketing activity by using electronic equipment such as
computer. E-Marketing is the two way communication activity that marketers can connect
with customers around the world and all time. E-mail and website (www) are main
equipment and important in E-Marketing.

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 Competition Analysis (3C Analysis)
- Competitor Analysis

We define the competitors who provide service as same as us. Then, we divide
competitors into two groups; the strong group and weak group such as strong group
are Black Canyon and Star Buck, and weak group is local coffee.

For local coffee shop or weak group that we think they will become a high
performance competition will be

Sa Wat Dee Chiang Rai

Sa Wat Dee Chaing Rai has good location that improves the shop to be good
look for high customer. Because the shop decoration invest by the modern furniture
and make a attraction to attract customer who is traveler (the most) go to buy a coffee
and take some of picture a big windmill like they stay in Netherlands

About the performance Sa Wat Dee Chaing Rai going to use a good coffee
machine Brazign duels and cook a new food every time they have an order. The most
interesting is food that never see in the coffee shop is Tim Sum, the Chinese stream
food, because only open table coffee shop in the old town at south of Thailand do this.
As the reasons that why Sa Wat Dee Chaing Rai attract both old customer and new
customer to come.

In the other way, Sa Wat Dee Chaing Rai always take care customer well and every
waiter have train to have a good service mind.

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Phuvaree “The coffee by Phuvaree”

Phuvaree invest a high coffee machine from Marcfi they build the shop to be
the choice of customer when they come apart Chiang Rai. Phuvaree part the shop into
outside and inside, outside perform a good atmosphere but inside present a
comfortable for customer.

Biggest thing that push Phuvaree interesting are the alcoholic coffees, the
coffee that mix with some kinds of whisky, such as Cappuccino Vienna, Latte Malibu,
Mocha Callus and Caramel Macgearto that take Phuvaree a good feedback.

The good performance of Phuvaree is they have their own land to build a shop
and family work doesn’t have to hire the other. They do the shop and serve a good
thing for customer to ensure that customer will like taste of coffee.

Blue coffee

They target is close to student who study in university. Blue coffee is a small
coffee shop that the Blue dormitory owner open, even the shop is small but the
material they use a good quality material same like other coffee shop.

The shop plan, owner said that they don’t count on competition because
customer always come and on coffee shop around their.

So we have to move on by learn competitor and take them good thing for win
over them.

- Customer Analysis

We focus on needs, wants, and demands of customers first. After we know


their demands, we make sure that we understand their behavior by survey and study.
We have to understand the customer and we analysis into this;

Walk in, family, teenage, business man etc.

Our brand will be first choice in the customers’ information search. We sure
that our brand must be in all stages of customers’ buying decision process, especially
final choice or decision.

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- Competitive Analysis

Our competitors are coffee shop that set up around Mae Fah Luang University
such as Ban Nofee coffee, Parabola, Boss coffee etc. Each coffee shop is present taste
of coffee and modern style coffee shop but not more loyalty customer. We research
and collecting information about customer needs and want, we found customer want
to drink fresh high quality coffee and low cost so our business will focus in coffee that
produce, we bring high quality coffee from local places so we will get low price and
can this main point to strengths. About weakness, first we must try to promote product
and make loyalty customer then same with competitors and increasing to leader of
business. From research, we found Parabola even set up far away from community
but taste of coffee can pull customer, Sawatdee Chiangrai is new coffee business
where set up near University and they present style model coffee shop, customer can
use several corner in shop to photographing but will not famous about coffee and
bakery. Boss coffee is low cost business and can pull more customers but they not
important about decorate shop. Everything information we will use to improve and
developing our coffee business then we set plan and strategy about sell coffee, pull
customers, promotion. When we can success business, we will develop next mission
and try to leader coffee business in province.

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STP Analysis

Like I said about the Strategy that I targeted on teenage, so most of customer would
be people who free and have a fill time to relax or small meeting even date. The segmentation
we divide in to 4-5 segments for service suitable in each:

Mean target will be teenage, why? Because teenager love to drive they life freely with
out any rules, Namaarie provide a free time for them so they can spend they time in the shop
and they have to spend a money too because food not free.

Teenager love in low price, once of strategy that set the price lower for this kind
because I point that low price will attract people more. But we didn’t say that low price with
less quality.

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Marketing Mix Strategy

Product – We are provider, we make shop for coffee drinking so we set only our
product that we set to sell with beverage such as bakery in the shop. Other then we sell the
shop atmosphere, we make a shop for relax and informally.

Price - due to strategy that we set a price lower than usual to motivate customer and
challenge competitor to earn market segment. We going to survey competitor product price
because a lot of coffee shop in coffee market and they earn a lot of segment.

Place – The shop build in small café because we launch in a small business but big
power to move a business. We plan to start around the campus that we study and expand the
branch. First sign, we have to let people know our name. Second sign, we will expand the
branch if the first targets will archive.

Promotion – Technology is big society in our life if the customer knows us name and
tell to other and other tell to another that would be great to continue the next plan is promote
in the internet. We create a blog site in the web and let’s every one know about us from
history to income and we will post update of us every time we up to date.

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Sales Forecast/Profit Estimation
 Sales Forecast/

From the chart we estimate that first time we start and not much sales because
only friend and other one who want to try a new one to use. Then people will know
from a word of mouth because we good in service, food is good taste and service
mind on employees. However we can make more sales and more customers in the
second year and next year. In every year, we have the high sales on October to
January of the next year because it is high season of Chiang Rai province. We have
the new customers who travel in Chiang Rai to get in our shop. So high season of
Chiang Rai can help increase sales of our shop. But on October we have fewer sales
because it’s end of semester and have few customer together.

Year 1
Month Sales
1 65,880
2 63,660
3 71,700
4 62,580
5 78,420
6 67,950
7 83,610
8 89,760
9 82,140
10 81,060
11 86,160
12 100,080

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Year 2
Month Sales
1 99,930
2 89,490
3 89,610
4 89,940
5 82,920
6 84,600
7 88,400
8 83,400
9 80,670
10 80,580
11 93,960
12 105,450

Year 3
Month Sales
1 103,650
2 87,480
3 93,840
4 93,510
5 92,610
6 92,280
7 91,410
8 87,060
9 86,820
10 91,890
11 99,060
12 103,800

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Year 4
Month Sales
1 105,660
2 99,510
3 98,250
4 100,140
5 99,000
6 97,020
7 98,190
8 95,130
9 95,460
10 87,960
11 109,500
12 112,950

Year 5
Month Sales
1 110,400
2 100,050
3 95,700
4 100,050
5 98,580
6 97,830
7 100,380
8 98,730
9 98,160
10 89,760
11 113,910
12 120,300

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 Profit Estimation
From the chart sale forecast we estimate the first of semi-annual has less profit
because customer don’t know about our shop and this time we try to promote our
shop to customer. As third quarter, we have increase profit because many people
begin get in to our shop and customer help to promote by word of mouth to other
people or their friends. But we have less profit in October because it’s the end of
semester and we spend to marketing expense for increase advertisement. However,
we have the highest profit on December and January for every year. So we have pay

back period about 2-3 years.

Year 1
Month Income
1 7,560
2 9,030
3 13,740
4 8,640
5 17,070
6 11,790
7 21,030
8 24,840
9 20,310
10 16,870
11 22,140
12 29,820

31
Year 2
Month Income
1 30,480
2 25,080
3 23,400
4 21,930
5 18,870
6 19,770
7 23,420
8 20,940
9 20,640
10 16,900
11 26,910
12 33,930

Year 3
Month Income
1 31,530
2 23,520
3 25,320
4 22,680
5 22,530
6 20,850
7 23,700
8 21,240
9 22,350
10 22,630
11 30,180
12 23,590

32
Year 4
Month Income
1 32,970
2 29,160
3 27,480
4 25,320
5 25,140
6 24,690
7 21,680
8 23,700
9 25,380
10 19,300
11 34,290
12 33,920

Year 5
Month Income
1 35,760
2 28,830
3 26,370
4 23,580
5 24,960
6 25,200
7 22,310
8 25,350
9 25,830
10 19,600
11 36,720
12 37,520

33
Marketing Expenses
Namaaria coffee shop has marketing expense for make people
know about our company by make brochure, poster and temporary
billboard near the shop as first month. The high season of Chaing Rai
province about November to January of next year, so we plan to make the
new billboard in October of every year. It can attract and interesting for
tourist who travel in Chaing Rai. By the way, it will the good way
promote such word of mouth. Some time in December of the third to fifth
year, we increase marketing expense for increase advertisement and
billboard on road site. Cause we spend marketing expense about this
because the high season of Chiang Rai make more sale and more profit
for our company. Which important thing for attract the customer to come
in our shop.

Year 1
Month Sales
1 3,000
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 2,000
11 -
12 -

34
Year 2
Month Sales
1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 2,000
11 -
12 -

Year 3
Month Sales
1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 2,000
11 -
12 4,000

35
Year 4
Month Sales
1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 2,000
11 -
12 2,000

Year 5
Month Sales
1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 2,000
11 -
12 2,000

36
Conclusion

Coffee shop is small business that we make shop to provide a hot and cool drinking,
dessert and food with atmosphere that make up style Elf art. This is the new style for
customers that love to enjoy with everything new. Teenage is the main one to sell because it
easy to attract with similar motivation of them, art, technology and independent style. If the
estimate is right coffee will go through the high competitor market like Starbuck and Ballista
because this is the world competition and if we can touch that line in mean we can be a
famous coffee shop but then we have to past a border of province. We have main price of
product such as price of coffee about 60 baht, soft drink 35 baht, bakery 55 baht and Italian
food 49 baht. But those have cost of product in each month. These table shows about cost of
product in each of 5 years

First Year

Cost of
product Jan Feb March April May June July Aug Sep Oct Nov Dec

Bakery 23  13,200 11,550 14,850 9,900 16,500 6,600 11,550 13,200 11,550 9,900 13,200 14,850

Coffee 15  36,000 36,000 37,800 36,000 39,600 41,400 46,800 50,400 46,800 45,000 46,800 54,000

Soft drink 25  10,800 11,700 11,700 10,800 13,500 12,600 13,500 14,400 13,500 14,400 14,400 18,000

Italian Food 25  5,880 4,410 7,350 5,880 8,820 7,350 11,760 11,760 10,290 11,760 11,760 13,230

Total Cost /
Month 65,880 63,660 71,700 62,580 78,420 67,950 83,610 89,760 82,140 81,060 86,160 100,080

37
Second Year

Cost of
product Jan Feb Mar April May June July Aug Sep Oct Nov Dec

Bakery 23  6,900 6,210 6,210 6,210 6,900 4,830 4,830 6,210 4,830 4,830 6,900 8,970

Coffee 15  13,500 12,600 11,700 11,250 10,350 11,700 12,600 11,700 12,150 10,800 12,600 13,500

Soft drink 25  13,500 12,000 13,500 16,500 13,500 15,750 13,500 12,000 9,750 10,500 12,750 12,750

Italian Food 25  6,750 5,250 6,000 5,250 4,500 3,750 5,250 3,750 4,500 6,750 6,000 7,500

Total Cost / Month


40,650 36,060 37,410 39,210 35,250 36,030 36,180 33,660 31,230 32,880 38,250 42,720

Third Year

Cost of
product Jan Feb Mar April May June July Aug Sep Oct Nov Dec

Bakery 23  8,970 6,210 5,520 4,830 4,830 4,830 6,210 5,520 5,520 6,210 8,280 9,660

Coffee 15  12,600 11,700 11,700 11,700 11,700 10,800 11,700 11,250 12,150 11,250 13,050 13,500

Soft drink 25  14,250 10,500 13,500 19,500 18,750 20,250 15,000 14,250 13,500 12,000 12,750 12,750

Italian Food 25  7,500 6,750 9,000 6,000 6,000 6,750 6,000 6,000 4,500 9,000 6,000 7,500

Total Cost / Month


43,320 35,160 39,720 42,030 41,280 42,630 38,910 37,020 35,670 38,460 40,080 43,410

38
Fourth Year

Cost of
product Jan Feb Mar April May June July Aug Sep Oct Nov Dec

Bakery 23  7,590 6,900 5,520 5,520 6,210 4,830 6,210 4,830 4,830 6,210 7,590 8,280

Coffee 15  13,050 12,150 11,700 11,250 10,350 11,700 11,250 10,800 11,700 9,900 13,050 13,950

Soft drink 25  13,500 12,750 13,500 20,250 17,250 18,750 17,250 16,500 15,000 12,000 14,250 12,750

Italian Food 25  9,750 9,750 11,250 9,000 11,250 8,250 9,000 10,500 9,750 9,750 11,250 11,250

Total Cost / Month


43,890 41,550 41,970 46,020 45,060 43,530 43,710 42,630 41,280 37,860 46,140 46,230

Fifth Year

Cost of
product Jan Feb Mar April May June July Aug Sep Oct Nov Dec

Bakery 23  7,590 5,520 4,830 5,520 5,520 4,830 5,520 4,830 4,830 6,210 7,590 8,280

Coffee 15  13,500 12,150 11,700 9,900 10,800 11,250 11,250 11,250 11,700 9,900 13,050 13,950

Soft drink 25  13,500 13,500 12,750 21,000 18,000 17,250 18,000 18,000 17,250 13,500 14,250 12,750

Italian Food 25  11,250 11,250 11,250 11,250 10,500 10,500 10,500 10,500 9,750 9,750 13,500 15,000

Total Cost / Month


45,840 42,420 40,530 47,670 44,820 43,830 45,270 44,580 43,530 39,360 48,390 49,980

39
Chapter 4: Technical Feasibility Study

Production and Operations Analysis


Product Characteristics (in Detail)
Coffee Products
Espresso Only black Coffee from Doi Chang Arabica seed serve both of ice and hot.

Latte Black coffee with fresh milk most of customers like to drink with ice.

Americano Pure black coffee with hot water but you can mix with milk or sugar by
yourself serve in hot.

Cappuccino Black coffee with milk foam and Cinnamon sometime draw foam a picture
for enjoy art drinking in hot (ice can’t make up a foam).

Mocha Espresso with hot chocolate serve in warm ready to drink mostly they
drink in ice but hot is the best.

Soft Drink
Cocoa Cocoa powder of Hershey brews with sweet milk of carnation.

Soda Kiwi, Apple, Blueberry and Strawberry strong juice dilute with soda and mix
with ice.

Tea Ice, Milk and honey lemon.

Juice Orange Tamarind also seasonal fruit.

Bakery
Choc Cake Chocolate cake dip with hot choc topping.

Black-forest-cake Dark shot cake from 2shipphons cake and plus with cream between layer and
dip with choc cream.

Green Tea cake Vanilla chiphon cake and paint with green tea cream and vip cream.

Banana cream pie Banana mix with cream cheese and pour in pie.

Blueberry pie Blueberry jam simmer with sugar in pie.

Coconut pie Coconut cream pour in pie eat in cool.

Lemon pie White cream cook with lemon juice in pie


40
Cherry-Cheese-Pie Cream cheeses in pie paint with cherry jam.

Macadamia Pie Macadamia mix with cream cheese and pour in pie eat when cold.

Brownie Hot chocolate cake paint with coco sauce

Italian Food
Spaghetti Italian food eats with sauce and noodle.

Pasta Italian food from egg noodle in several kind and eat with sauce.

Macaroni Italian food from egg noodle and fry with many sauces.

Specification, Feathers, Dimension, Life Time, etc.


We use machine to make coffee cup by cup but control by human so mistake won’t avoid, by the
way once a day the machine will break down sometime employee will know how to make a coffee
manually.

Production/Services Process
The important of service is “Service Mind” because customers always want to take care. It
can make customer to be loyalty and give word of mouth to other people which by the way to promote
of our coffee shop. Then we provide another service such as internet café, reading zone, music zone
and meeting zone.

Location
Target is main decision to choice location. We choice the place nears the campus in 4 Rais for
10 Million to build the shop.

Facility Layout
We depart the shop into 2 zones indoor and outdoor, indoor have 5 tables and 4 seats per table
and decoration with modern western style, outdoor have 2 seats in the small garden.

41
Machine/Tools/ Equipments
Equipment
 Table
 Sofa
 Chair
 Counter
 Chandelier
 Book shelf
 CD-Player
 Glass
 Plate
 Shelf
 Air-Conditioner
 Electronic Fan
 TV LG 42”

Tools
 Coffee machine
 Fruit blender
 Coffee grinder

Logistics Management
We take an order from bakery shop such as cake and pie by deliver from the shop, but for
coffee seed we order from Tak and Chaing Mai and they sent monthly.

Facility Management
In the shop, we depart toilet out of shop to take care customer. And we also set electricity for
customers who want to use laptop and internet, because we provide WIFI network for customer.

Cost of Investment
Pre-Operating Cost
 Insurance(Fire) 25,000 Baht / Year
 Land Rental 120,000 Baht / Year
42
Investment Cost
Buildings
 Environment structure 85,000 Baht
 Structure 200,000Baht
 Built in 130,000Baht
Total 415,000 Baht

Equipments
 Writing pad 1 dozen 350 Baht
 Account book 1 dozen 540 Baht
 Pen 1 pack (20) 60 Baht
Total 950 Baht

 Table
 Mirage90 8,000 Baht
 Stena 24,000 Baht
 Design Table 5,000 Baht
Total 34,000 Baht

 Sofa
 Venus 22,000 Baht
 Anna 6,900 Baht
 Persia 18,500 Baht
Total 47,400 Baht

 Design Chair 10,000 Baht


 Counter 140,000 Baht
 Chandelier 70,000 Baht
 Book shelf 3,000 Baht
 CD-Player 2,000 Baht
 Glass 3,000 Baht
 Plate 1,500 Baht
 Shelf 4,000 Baht
 Air-Conditioner 25,000 Baht
 Electronic Fan 2,000 Baht
 TV LG 42” 30,000 Baht
Total 372,850 Baht

43
Tools
 Coffee grinder 25,000 Baht
 Coffee machine 170,000 Baht
 Fruit blender 10,000 Baht
Total 205,000 Baht

Etc
 Frame & picture 8,000 Baht
 Miscellaneous 200,000 Baht
Total 208,000 Baht

Depreciation
Equipment
 Table 10 years 283 Baht /Month
 Sofa 10 years 395 Baht /Month
 Design Chair 15 years 55 Baht /Month
 Counter 30 years 389 Baht /Month
 Chandelier 20 years 292 Baht /Month
 Book shelf 10 years 25 Baht /Month
 CD-Player 5 years 33 Baht /Month
 Shelf 10 years 33 Baht /Month
 Air-Conditioner 15 years 139 Baht /Month
 Electronic Fan 10 years 17 Baht /Month
 TV LG 42” 20 years 125 Baht /Month
Total Depreciation Equipment 1786 Baht /Month

 Tools
 Coffee grinder 20 years 104 Baht /Month
 Coffee machine 30 years 472 Baht/Month
 Fruit blender 20 years 42 Baht /Month
Total Depreciation Tools 618 Baht /Month

44
Operating Cost
Inventory
 Cake (Chocolate Cake ,Black-forest-cake, Green Tea cake)
300 Baht/ pound
 Pie (Banana cream pie, Blueberry pie, Coconut pie, lemon pie, Cherry-
Cheese-Pie, Macadamia Pie) 20 Baht/ piece
 Brownie 10 Baht/piece

Raw material Cost


 Coffee Bean
 Strong 600 Baht/Kg.
 Medium 550 Baht/Kg.
 Smooth 600 Baht/Kg.
 Cocoa powder (Hershey’s) 125 Baht/ 200g.
 Green tea powder (Coffman) 450 Baht/500 g.
 Tea Powder (Coffman) 150 Baht/500 g.
 Sugar 30 Baht/Kg.
 Cream 45 Baht/450 g.
 Carnation Milk 60 Baht /405g.
 Italian Soda
 Syrup (Davinci syrup) 330 Baht/750 ml.
 Soda (Chang Soda) 5 Baht/ 325 ml.
 Italian foods
 Spaghetti 20 Bath/Dish
 Macaroni 25 Bath/Dish
 Pasta 30 Bath/Dish
Direct Labor Cost
 Salary
Coffee maker and cooker 8,000 Baht/Month/ Person
Waiter ( 2 person) 5,400 Baht/Month/ Person
 Management Analysis
Administration Cost
 Electricity 1,500 Baht / Month
 Wi-fi 500 Bath / Month

45
Conclusion
Our products don’t have only favorable coffee drink, but include popular soft drink and
bakery like cake and pie, and special food in Italian style. We produce coffee cup by machine under
control of professional to get the best quality. In production and service process, we focus on “Service
Mind” to very well take care our customers and they pay back loyalty and positive word of mouth.
We also provide supplementary services like internet zone and reading zone, too.

Location, we choose the best appropriate place to locate our shop near the university and road
for easy to customers access and transport materials. The characteristic of our shop, we set indoor that
decorate in western style and outdoor with small garden.

All equipments in our shop, we use as same as with other but more concern about quality. We
order coffee bean from suppliers in Tak and Chiang Mai and they send every month for refreshment.

In facility management, we provide internet zone with WIFI network to facilitate customer
who want to do business or entertainment.

Last is about the cost of invest business such building, land, inventory and equipment. Our
technical analysis is considering and analyzing machine, equipment, raw material, and people.
According to all components, they have relationship between each other to create the common core
that calls “Management” and we also analyze and consider in other factors such as control quantity,
quality, and production throughout raw material and budget planning.

46
Chapter 5: Financial Analysis

Income Statement

47
Income statement 1st year
Jan Feb March April May June July Aug Sep Oct Nov Dec
Revenues 65,880 63,660 71,700 62,580 78,420 67,950 83,610 89,760 82,140 81,060 86,160 100,080
cost of Revenues 26,520 25,830 29,160 25,140 32,550 27,360 33,780 36,120 33,030 33,390 35,220 41,460
gross profit 39,360 37,830 42,540 37,440 45,870 40,590 49,830 53,640 49,110 47,670 50,940 58,620
expense
*selling expense 3,000 - - - - - - - - 2,000 - -
*administrative 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800
Net
income(loss) 7,560 9,030 13,740 8,640 17,070 11,790 21,030 24,840 20,310 16,870 22,140 29,820

Income statement 2nd year


Jan Feb March April May June July Aug Sep Oct Nov Dec
Revenues 99,930 89,940 89,610 89,940 82,920 84,600 88,400 83,400 80,670 80,580 93,960 105,450
cost of Revenues 40,650 36,060 37,410 39,210 35,250 36,030 36,180 33,660 31,230 32,880 38,250 42,720
gross profit 59,280 53,880 52,200 50,730 47,670 48,570 52,220 49,740 49,440 47,700 55,710 62,730
expense
*selling expense - - - - - - - - - 2,000 - -
*administrative 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800
Net income(loss) 30,480 25,080 23,400 21,930 18,870 19,770 23,420 20,940 20,640 16,900 26,910 33,930

Income statement 3rd year


Jan Feb March April May June July Aug Sep Oct Nov Dec
Revenues 103,650 87,480 93,840 93,510 92,610 92,280 91410 87,060 86,820 91,890 99,060 103,800
cost of Revenues 43,320 35,160 39,720 42,030 41,280 42,630 38,910 37020 35,670 38,460 40,080 43,410
gross profit 60,330 52,320 54,120 51,480 51,330 49,650 52,500 50,040 51,150 53,430 58,980 60,390
expense
*selling expense - - - - - - - - - 2,000 - 8,000
*administrative 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800
Net income(loss) 31,530 23,520 25,320 22,680 22,530 20,850 23,700 21,240 22,350 22,630 30,180 23,590
48
Income statement 4th year
Jan Feb March April May June July Aug Sep Oct Nov Dec
Revenues 105,660 99,510 98,250 100,140 99,000 97,020 98,190 95,130 95,460 87,960 109,500 112,950
cost of Revenues 43,890 41,550 41,970 46,020 45,060 43,530 43710 42,630 41,280 37,860 46,410 46,230
gross profit 61,770 57,960 56,280 54,120 53,940 53,490 54,480 52,500 54,180 50,100 63,090 66,720
expense
*selling expense - - - - - - 4,000 - - 2,000 - 4,000
*administrative 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800
Net income(loss) 32,970 29,160 27,480 25,320 25,140 24,690 21,680 23,700 25,380 19,300 34,290 33,920

Income statement 5th year


Jan Feb March April May June July Aug Sep Oct Nov Dec
Revenues 110,400 100,050 95,700 100,050 98,580 97,830 100,380 98,730 98,160 89,760 113,910 120,300
cost of Revenues 45,840 42,420 40,530 47,670 44820 43,830 45270 44,580 43,530 39,360 48,390 49,980
gross profit 64,560 57,630 55,170 52,380 53,760 54,000 55,110 54,150 54,630 50,400 65,520 70,320
expense
*selling expense - - - - - - 4,000 - - 2,000 - 4,000
*administrative 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800
Net income(loss) 35,760 28,830 26,370 23,580 24,960 25,200 22,310 25,350 25,830 19,600 36,720 37,520

49
Cash Flow

50
1st year

Jan Feb March April May June


Cash Be. Balance - 429,531 406,286 390,155 371,328 363,335

Cash flow from operating


net income(loss) 7,560 9,030 13,740 8,640 17,070 11,790
Depreciation 2,404 4,808 7,212 9,616 12,020 14,424
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory - 15,000 - 1,000 1,000 - - - 1,000
change in account payable 13,500 1,000 - 1,000 - - 1,000
Total cash flow from operating - 3,619 1,755 8,869 6,173 17,007 14,131

Cash flow from investing


Building - 415,000 - - - - -
Equipments - 246,850 - - - - -
Tools - 205,000 - - - - -
Total cash flow from investing - 866,850 - - - - -

cash flow from financing


Borrowing 1,300,000 - - - - -
Interest - - 3,250 - 3,196 - 3,141 - 3,086 - 3,032
Repayment - - 21,750 - 21,804 - 21,859 - 21,914 - 21,968
Total cash flow from financing 1,300,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
Change in cash 429,531 - 23,245 - 16,131 - 18,827 - 7,993 - 10,869

Net cash flow 429,531 406,286 390,155 371,328 363,335 352,466

1st year (Cont.)

51
July Aug Sep Oct Nov Dec
Cash Be. Balance 352,466 353,241 360,230 365,093 368,920 380,421

Cash flow from operating


net income(loss) 21,030 24,840 20,310 16,870 22,140 29,820
Depreciation 16,828 19,232 21,636 24,040 26,444 28,848
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory - - 1,000 - - - 1,500
change in account payable - - - 1,000 - - 1,500
Total cash flow from operating 25,775 31,989 29,863 28,827 36,501 46,585

Cash flow from investing


Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from
- - - - - -
investing

cash flow from financing


Borrowing -
Interest - 2,977 - 2,922 - 2,867 - 2,811 - 2,756 - 2,700
Repayment - 22,023 - 22,078 - 22,133 - 22,189 - 22,244 - 22,300
Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
Change in cash 775 6,989 4,863 3,827 11,501 21,585

Net cash flow 353,241 360,230 365,093 368,920 380,421 402,006

52
2nd year

Jan Feb March April May June


Cash Be. Balance 402,006 424,251 443,500 463,473 484,380 504,631

Cash flow from operating


net income(loss) 30,480 25,080 23,400 21,930 18,870 19,770
Depreciation 28,848 31,252 33,656 36,060 38,464 40,868
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory - 2,500 4,000 - - - -
change in account payable 2,500 - 4,000 - - - -
Total cash flow from operating 47,245 44,249 44,973 45,907 45,251 48,555

Cash flow from investing


Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from investing - - - - - -

cash flow from financing


Borrowing
Interest - 2,644 - 2,588 - 2,532 - 2,476 - 2,420 - 2,363
Repayment - 22,356 - 22,412 - 22,468 - 22,524 - 22,580 - 22,637
Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
Change in cash 22,245 19,249 19,973 20,907 20,251 23,555

Net cash flow 424,251 443,500 463,473 484,380 504,631 528,186

53
2nd year(Cont.)

July Aug Sep Oct Nov Dec


Cash Be. Balance 528,186 557,795 587,328 618,965 649,266 691,981

Cash flow from operating


net income(loss) 23,420 20,940 20,640 16,900 26,910 33,930
Depreciation 43,272 45,676 48,080 50,484 52,888 55,292
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory - - - 1,500 500 2,000 - 7,500
change in account payable - - 1,500 - 500 - 2,000 7,500
Total cash flow from operating 54,609 54,533 56,637 55,301 67,715 77,139

Cash flow from investing


Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from
- - - - - -
investing

Cash flow from financing


Borrowing
Interest - 2,307 - 2,250 - 2,193 - 2,136 - 2,079 - 2,022
Repayment - 22,693 - 22,750 - 22,807 - 22,864 - 22,921 - 22,978
Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
Change in cash 29,609 29,533 31,637 30,301 42,715 52,139

Net cash flow 557,795 587,328 618,965 649,266 691,981 744,120

54
3rd year

Jan Feb March April May June


Cash Be. Balance 744,120 793,859 837,992 886,329 934,430 984,785

Cash flow from operating


net income(loss) 31,530 23,520 25,320 22,680 22,530 20,850
Depreciation 55,292 57,696 60,100 62,504 64,908 67,312
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory 6,500 - 1,500 - - 3,500 -
change in account payable - 6,500 1,500 - - - 3,500 -
Total cash flow from operating 74,739 69,133 73,337 73,101 75,355 76,079

Cash flow from


investing
Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from investing - - - - - -

cash flow from financing


Borrowing
Interest - 1,964 - 1,907 - 1,849 - 1,791 - 1,733 - 1,675
Repayment - 23,036 - 23,093 - 23,151 - 23,209 - 23,267 - 23,325
Total cash flow from
- 25,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
financing
Change in cash 49,739 44,133 48,337 48,101 50,355 51,079

Net cash flow 793,859 837,992 886,329 934,430 984,785 1,035,864

55
3rd year
(Cont.)

July Aug Sep Oct Nov Dec


Cash Be. Balance 1,035,864 1,092,197 1,148,474 1,208,265 1,270,740 1,343,169

Cash flow from operating


net income(loss) 23,700 21,240 22,350 22,630 30,180 23,590
Depreciation 69,716 72,120 74,524 76,928 79,332 81,736
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory - - - - - 2,000 - 4,000
change in account payable - - - - 2,000 4,000
Total cash flow from operating 81,333 81,277 84,791 87,475 97,429 93,243

Cash flow from investing


Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from investing - - - - - -

cash flow from financing


Borrowing
Interest - 1,617 - 1,558 - 1,500 - 1,441 - 1,382 - 1,323
Repayment - 23,383 - 23,442 - 23,500 - 23,559 - 23,618 - 23,677
Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
Change in cash 56,333 56,277 59,791 62,475 72,429 68,243

Net cash flow 1,092,197 1,148,474 1,208,265 1,270,740 1,343,169 1,411,412

56
4th year

Jan Feb March April May June


Cash Be. Balance 1,411,412 1,489,035 1,565,252 1,642,193 1,719,378 1,798,787

Cash flow from operating


net income(loss) 32,970 29,160 27,480 25,320 25,140 24,690
Depreciation 81,736 84,140 86,544 88,948 91,352 93,756
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory 2,000 200 - 200 - - -
change in account payable - 2,000 - 200 200 - - -
Total cash flow from operating 102,623 101,217 101,941 102,185 104,409 106,363

Cash flow from investing


Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from investing - - - - - -

cash flow from financing


Borrowing
Interest - 1,264 - 1,204 - 1,145 - 1,085 - 1,025 - 966
Repayment - 23,736 - 23,796 - 23,855 - 23,915 - 23,975 - 24,034
Total cash flow from
- 25,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
financing
Change in cash 77,623 76,217 76,941 77,185 79,409 81,363

Net cash flow 1,489,035 1,565,252 1,642,193 1,719,378 1,798,787 1,880,150


57
4th year
(Cont.)

July Aug Sep Oct Nov Dec


Cash Be. Balance 1,880,150 1,960,907 2,046,088 2,135,353 2,220,942 2,323,925

Cash flow from operating


net income(loss) 21,680 23,700 25,380 19,300 34,290 33,920
Depreciation 96,160 98,564 100,968 103,372 105,776 108,180
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory - 200 - 500 1,000 1,500 -
change in account payable 200 - - 500 - 1,000 - 1,500 -
Total cash flow from operating 105,757 110,181 114,265 110,589 127,983 130,017

Cash flow from investing


Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from investing - - - - - -

cash flow from financing


Borrowing
Interest - 905 - 845 - 785 - 724 - 664 - 603
Repayment - 24,095 - 24,155 - 24,215 - 24,276 - 24,336 - 24,397
Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
Change in cash 80,757 85,181 89,265 85,589 102,983 105,017

Net cash flow 1,960,907 2,046,088 2,135,353 2,220,942 2,323,925 2,428,942

58
5th year

Jan Feb March April May June


Cash Be. Balance 2,428,942 2,535,799 2,638,130 2,740,405 2,842,294 2,947,967

Cash flow from operating


net income(loss) 35,760 28,830 26,370 23,580 24,960 25,200
Depreciation 108,180 110,584 112,988 115,392 117,796 120,200
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory - 2,000 - - - - -
change in account payable 2,000 - - - - -
Total cash flow from operating 131,857 127,331 127,275 126,889 130,673 133,317

Cash flow from investing


Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from investing - - - - - -

cash flow from financing


Borrowing
Interest - 542 - 481 - 419 - 358 - 296 - 235
Repayment - 24,458 - 24,519 - 24,581 - 24,642 - 24,704 - 24,765
Total cash flow from
- 25,000 - 25,000 - 25,000 - 25,000 - 25,000 - 25,000
financing
Change in cash 106,857 102,331 102,275 101,889 105,673 108,317

Net cash flow 2,535,799 2,638,130 2,740,405 2,842,294 2,947,967 3,056,284

59
5th year
(Cont.)

July Aug Sep Oct Nov Dec


Cash Be. Balance 3,056,284 3,189,115 3,327,390 3,468,549 3,605,882 3,762,739

Cash flow from operating


net income(loss) 22,310 25,350 25,830 19,600 36,720 37,520
Depreciation 122,604 125,008 127,412 129,816 132,220 134,624
pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,083 - 12,083
change in inventory - - - - 300 300 200
change in account payable - - - 300 - 300 - 200
Total cash flow from operating 132,831 138,275 141,159 137,333 156,857 160,061

Cash flow from investing


Building - - - - - -
Equipments - - - - - -
Tools - - - - - -
Total cash flow from investing - - - - - -

cash flow from financing


Borrowing
Interest - 173 - 111 - 62 - 14 - -
Repayment - 24,827 - 19,318 - 19,318 - 5,571 - -
Total cash flow from
- 25,000 - 19,429 - 19,380 - 5,585 - -
financing
Change in cash 132,831 138,275 141,159 137,333 156,857 160,061

Net cash flow 3,189,115 3,327,390 3,468,549 3,605,882 3,762,739 3,922,800

60
Balance Sheet

61
1st year Jan Feb March April May June
Asset
cash 429,531 406,286 390,155 371,328 363,335 352,446
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 2,404 - 4,808 - 7,212 - 9,616 - 12,020 - 14,424
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 2,000 3,000 2,000 2,000 2,000 3,000
soft drink product 1,500 1,500 1,500 1,500 1,500 1,500
bakery product 10,000 10,000 10,000 10,000 10,000 10,000 62
Italian food product 1,500 1,500 1,500 1,500 1,500 1,500
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 1,453,977 1,429,328 1,409,793 1,388,562 1,378,165 1,365,872
Liabilities
Account payable 13,500 14,500 13,500 13,500 13,500 14,500
Note payable 1,300,000 1,278,250 1,256,446 1,234,587 1,212,673 1,190,705
Equity
owner capital 140,477 136,578 139,847 140,475 151,992 160,667
Total L&E 1,453,977 1,429,328 1,409,793 1,388,562 1,378,165 1,365,872

63
1st year (cont.) July Aug Sep Oct Nov Dec
Asset
cash 353,241 360,230 365,093 368,920 380,421 402,006
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 16,828 - 19,232 - 21,636 - 24,040 - 26,444 - 28,848
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 3,000 3,000 2,000 2,000 2,000 3,500
soft drink product 1,500 1,500 1,500 1,500 1,500 1,500
bakery product 10,000 10,000 10,000 10,000 10,000 10,000
Italian food product 1,500 1,500 1,500 1,500 1,500 1,500
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 1,364,263 1,368,848 1,370,307 1,371,730 1,380,827 1,401,508
64
Liabilities
Account payable 14,500 14,500 13,500 13,500 13,500 15,000
Note payable 1,168,682 1,146,603 1,124,470 1,102,281 1,080,037 1,057,737
Equity
owner capital 181,081 207,745 232,337 255,949 287,290 328,771
Total L&E 1,364,263 1,368,848 1,370,307 1,371,730 1,380,827 1,401,508

65
2nd year Jan Feb March April May June
Asset
cash 424,251 443,500 463,473 484,380 504,631 528,186
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 28,848 - 31,252 - 33,656 - 36,060 - 38,464 - 40,868
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 3,000 2,000 2,000 2,000 2,000 3,500
soft drink product 1,500 1,500 1,500 1,500 1,500 1,500
bakery product 13,000 10,000 10,000 10,000 10,000 10,000
Italian food product 1,500 1,500 1,500 1,500 1,500 1,500
Building 415,000 415,000 415,000 415,000 415,000 415,000
Totol asset 1,426,253 1,439,098 1,456,667 1,475,170 1,493,017 1,515,668
66
Liabilities
Account payable 17,500 13,500 13,500 13,500 13,500 15,000
note payable 1,035,381 1,012,970 990,502 967,978 945,398 922,762
Equity
owner capital 373,372 412,628 452,665 493,692 534,119 577,906
Total L&E 1,426,253 1,439,098 1,456,667 1,475,170 1,493,017 1,515,668

67
2nd year (cont.) July Aug Sep Oct Nov Dec
Asset
cash 557,795 587,328 618,965 649,266 691,981 744,120
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 43,272 - 45,676 - 48,080 - 50,484 - 52,888 - 55,292
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 2,000 2,000 1,500 3,000 3,000 3,500
soft drink product 1,500 1,500 1,500 1,500 1,500 1,500
bakery product 10,000 10,000 12,000 10,000 8,000 15,000
Italian food product 1,500 1,500 1,500 1,500 1,500 1,500
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 1,541,373 1,568,502 1,599,235 1,626,632 1,664,943 1,722,178
68
Liabilities
Account payable 13,500 13,500 15,000 14,500 12,500 20,000
Note payable 900,069 877,319 854,512 831,648 808,728 785,749
Equity
owner capital 627,804 677,683 729,723 780,484 843,715 916,429
Total L&E 1,541,373 1,568,502 1,599,235 1,626,632 1,664,943 1,722,178

69
3rd year Jan Feb March April May June
Asset
cash 793,859 837,992 886,329 934,430 984,785 1,035,864
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 57,696 - 60,100 - 62,504 - 64,908 - 67,312 - 69,716
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 2,000 3,500 3,500 3,500 2,000 2,000
soft drink product 1,500 1,500 1,500 1,500 1,500 1,500
bakery product 10,000 10,000 10,000 10,000 8,000 8,000
Italian food product 1,500 1,500 1,500 1,500 1,500 1,500
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 1,763,013 1,806,242 1,852,175 1,897,872 1,942,323 1,990,998

70
Liabilities
Account payable 13,500 15,000 15,000 15,000 11,500 11,500
Note payable 762,714 739,620 716,470 693,261 669,994 646,669
Equity
owner capital 986,799 1,051,622 1,120,705 1,189,611 1,260,829 1,332,829
Total L&E 1,763,013 1,806,242 1,852,175 1,897,872 1,942,323 1,990,998

71
3rd year (cont.) July Aug Sep Oct Nov Dec
Asset
cash 1,092,197 1,148,474 1,298,265 1,270,740 1,343,169 1,411,412
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 72,120 - 74,524 - 76,928 - 79,332 - 81,736 - 84,140
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 2,000 2,000 2,000 1,500 3,500 3,500
soft drink product 1,500 1,500 1,500 1,500 1,500 1,500
bakery product 8,000 8,000 8,000 8,000 8,000 12,000
Italian food product 1,500 1,500 1,500 1,500 1,500 1,500
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 2,044,927 2,098,800 2,246,187 2,215,758 2,287,783 2,357,622
72
Liabilities
Account payable 11,500 11,500 11,500 11,000 13,000 17,000
Note payable 623,286 599,844 576,343 552,784 529,166 505,489
Equity
owner capital 1,410,141 1,487,456 1,658,344 1,651,974 1,745,617 1,835,133
Total L&E 2,044,927 2,098,800 2,246,187 2,215,758 2,287,783 2,357,622

73
4th year Jan Feb March April May June
Asset
cash 1,489,035 1,565,252 1,642,193 1,619,378 1,798,787 1,880,150
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 86,544 - 88,948 - 91,352 - 93,756 - 96,160 - 98,564
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 3,200 3,000 3,200 3,200 3,200 3,200
soft drink product 1,700 1,700 1,700 1,700 1,700 1,700
bakery product 10,000 10,000 10,000 10,000 10,000 10,000
Italian food product 1,700 1,700 1,700 1,700 1,700 1,700
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 2,430,941 2,504,554 2,579,291 2,554,072 2,731,077 2,810,036
74
Liabilities
Account payable 14,900 14,700 14,900 14,900 14,900 14,900
Note payable 481,753 457,957 434,102 410,187 386,213 362,178
Equity
owner capital 1,934,288 2,031,897 2,130,289 2,128,985 2,329,964 2,432,958
Total L&E 2,430,941 2,504,554 2,579,291 2,554,072 2,731,077 2,810,036

75
4th year (cont.) July Aug Sep Oct Nov Dec
Asset
cash 1,960,907 2,046,288 2,135,353 2,220,942 2,323,925 2,428,942
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 100,968 - 103,372 - 105,776 - 108,180 - 110,584 - 112,988
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 3,500 3,500 3,000 2,000 3,500 3,500
soft drink product 1,700 1,700 1,700 1,700 1,700 1,700
bakery product 10,000 10,000 10,000 10,000 10,000 10,000
Italian food product 1,700 1,700 1,700 1,700 1,700 1,700
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 2,888,689 2,971,666 3,057,827 3,140,012 3,242,091 3,344,704
76
Liabilities
Account payable 15,200 15,200 14,700 13,700 15,200 15,200
Note payable 338,084 313,929 289,714 265,438 241,102 216,704
Equity
owner capital 2,535,405 2,642,537 2,753,413 2,860,874 2,985,789 3,112,800
Total L&E 2,888,689 2,971,666 3,057,827 3,140,012 3,242,091 3,344,704

77
5th year Jan Feb March April May June
Asset
cash 2,535,799 2,638,130 2,740,405 2,842,294 2,947,967 3,056,284
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 115,392 - 117,796 - 120,200 - 122,604 - 125,008 - 127,412
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 3,500 3,500 3,500 3,500 3,500 3,500
soft drink product 1,700 1,700 1,700 1,700 1,700 1,700
bakery product 12,000 12,000 12,000 12,000 12,000 12,000
Italian food product 1,700 1,700 1,700 1,700 1,700 1,700
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 3,451,157 3,551,084 3,650,955 3,750,440 3,853,709 3,959,622

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Liabilities
Account payable 17,200 17,200 17,200 17,200 17,200 17,200
Note payable 192,246 167,727 143,146 118,504 93,800 69,035
Equity
owner capital 3,241,711 3,366,157 3,490,609 3,614,736 3,742,709 3,873,387
Total L&E 3,451,157 3,551,084 3,650,955 3,750,440 3,853,709 3,959,622

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5th year (cont.) July Aug Sep Oct Nov Dec
Asset
cash 3,189,115 3,327,390 3,468,549 3,605,882 3,762,739 3,922,800
Equipment
Table 34,000 34,000 34,000 34,000 34,000 34,000
Sofa 47,400 47,400 47,400 47,400 47,400 47,400
Chair 10,000 10,000 10,000 10,000 10,000 10,000
Counter 14,000 14,000 14,000 14,000 14,000 14,000
Chandelier 70,000 70,000 70,000 70,000 70,000 70,000
Book shelf 3,000 3,000 3,000 3,000 3,000 3,000
CD-Player 2,000 2,000 2,000 2,000 2,000 2,000
Glass 3,000 3,000 3,000 3,000 3,000 3,000
Plate 1,500 1,500 1,500 1,500 1,500 1,500
Shelf 4,000 4,000 4,000 4,000 4,000 4,000
Air-Conditioner 25,000 25,000 25,000 25,000 25,000 25,000
Electronic Fan 2,000 2,000 2,000 2,000 2,000 2,000
TV LG 42” 30,000 30,000 30,000 30,000 30,000 30,000
office equipment 950 950 950 950 950 950
Tools
Coffee machine 170,000 170,000 170,000 170,000 170,000 170,000
Fruit blender 10,000 10,000 10,000 10,000 10,000 10,000
Coffee grinder 25,000 25,000 25,000 25,000 25,000 25,000
Accumulated depreciation - 129,816 - 132,220 - 134,624 - 137,028 - 139,432 - 141,836
Pre-operating cost
Insurance(Fire) 25,000 25,000 25,000 25,000 25,000 25,000
Land Rental 120,000 120,000 120,000 120,000 120,000 120,000
Inventory
coffee product 3,500 3,500 3,500 3,500 3,700 3,500
soft drink product 1,700 1,700 1,700 2,000 1,500 1,500
bakery product 12,000 12,000 12,000 12,000 12,000 12,000
Italian food product 1,700 1,700 1,700 2,000 1,500 1,500
Building 415,000 415,000 415,000 415,000 415,000 415,000
Total asset 4,090,049 4,225,920 4,364,675 4,500,204 4,653,857 4,811,314

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Liabilities
Account payable 17,200 17,200 17,200 17,500 17,200 17,000
Note payable 44,207 24,889 5,571 - - -
Equity
owner capital 4,028,642 4,183,831 4,341,904 4,482,704 4,636,657 4,794,314
Total L&E 4,090,049 4,225,920 4,364,675 4,500,204 4,653,857 4,811,314

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Payback Period

YEAR1 202,840
YEAR2 282,270 485,110
YEAR3 290,120 775,230
YEAR4 323,030 1,098,260
YEAR5 332,030 1,430,290

1,300,000 - 1,098,260 = 201,740

201,740 / 332,030 = 0.607596

PAYBACK PERIOD = 4+0.607596

= 4.6076 Years

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Chapter 6 Risk Management

Business Risk Analysis

The analyzing of business risk factors, we will use our business as a set. Then look
environment around business and business itself that what is the important point. If this point
is very important and adverse impact occur to this point, our business may get some problem.
It is called critical point. The business risk analysis starts from;

Determine risk

We verify our business that there are anything can have chance to get the risk in
following factors;

Marketing factor: Strong competitors; Chong Café and Parabola are the two important rivals
who open business nearly us and gain more customers and market share.

Even it can be the best competition of us but everything must now from begin
from analyze 4 dimension from

Political

Politic is out of control by business. Many competitors have to face with this too.
Politic might positively affect to business investment or negatively affect as obstacle in
business success. So, we always follow political news and apply in our business.

• Government policy is factor that both support and obstruct some kinds of business
success.

• Laws and regulations of government affect directly to success/failure and cost of


some kinds of business such as determine business open-close time and determine
zone of business.

• Price control policy; government determines ceiling price some kinds of necessary
goods. This operation affect to profit rate of small business or new market business
normally has high cost already that can’t compete at ceiling price.

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• Open free and restricted import affect to advantages/disadvantages in competition and
determining goods price of involved business.

HR factor: Inefficient employees who are lack of performance and cannot satisfy customers.
In Chaing Rai many of employees are from Myanmar and a lot of law to go through until
they become full performance and ready to work. The laws that concern to perform labor are;

Labour Protection Act of 1998

Section 5 In this Act:


"Boss" shall mean a person who agrees to accept an employee for work in return for a wage
and shall also mean

• (1) A person who has been assigned to work on behalf of an employer;


• (2) Where a boss has legal personality, "boss" shall also mean the persons who are
authorized to act on behalf of such a boss and the persons who are assigned by
persons authorized to act on behalf of such a boss to act on their behalf.
• (3) Where the operator of a business has contracted out the supervision of work and
payment of wages, or has assigned any person to recruit employees for work, other
than an employment service, such that the work is a part of the entire production or
business which is under the responsibility of the business operator, the business
operator shall be deemed to be the boss of the said employees.

Section 17 An employment agreement shall terminate upon a date specified in an


employment agreement for such termination without need for advance notice.

Section 118 A boss shall pay compensation to an employee whose employment has
been terminated as follows:

• (l)An employee who has worked consecutively for a full one hundred and twenty days
but less than one full year shall be paid not less than thirty days the last wage rate or
not less than the wages for the last thirty days of work in respect of an employee who
is paid a wage on a piece work basis.
• (2)An employee who has worked consecutively for one full year but not a full three
years shall be paid at least an amount equivalent to ninety days' pay at his or her most

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recent wage rate or not less than the wages earned for the last ninety days of work in
respect of an employee who is paid a wage on te basis of piece work.
• (3)An employee who has worked consecutively for a full three years but not a full six
years shall be paid an amount at least equivalent to one hundred and eighty days' pay
at his or her most recent wage rate, or not less than the wages earned for the last one
hundred and eighty days of work in respect of an employee who is paid a wage on the
basis of piece work.
• (4)An employee who has worked consecutively for a full six years but not a full ten
years shall be paid an amount equivalent to at least two hundred and forty days' pay at
his or her most recent wage rate or not less than the wages earned for the last two
hundred and forty days of work in respect of an employee who is paid a wage on the
basis of piece work.
• (5)An employee who has worked consecutively for a ten full years or more shall be
paid an amount equivalent to at least three hundred days at his or her most recent
wage rate, or not less than the wages for the last three hundred days of work in respect
of an employee who is paid a wage on the basis of piece work.

Section 119 A boss need not pay compensation to an employee whose employment is
terminated in any of the following cases:

• (1)Dishonesty in carrying out duties or deliberate commission of a crime against the


boss.
• (2)Intentionally causing the boss to suffer damage.
• (3)Negligence, causing the boss to suffer serious damage.
• (4)Violation of the work rules and regulations or the boss' lawful and legitimate
regulations or orders, where the boss had already issued a written warning, except that
in serious cases the boss need not issue such a warning. A letter of warning shall be
enforceable for not more than one year calculated from the date on which the
employee committed the offence.
• (5)Abandonment of post for three consecutive working days, regardless of whether
there was a holiday in between or not, for no appropriate reason.

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• (6) Imprisonment under a final judgement ordering imprisonment, unless the sentence
was for an offence which was committed out of negligence or a petty offence.

Section 123 When a boss violates or is not in compliance with the requirement to pay
any form of compensation under this Act and the employee who claims to have a right to
such compensation wishes to ask the Labour Inspection Officer to proceed in accordance
with this Act, the employee shall have the right to submit a petition to the Labour Inspection
Officer of the locality in which the employee is working or in which the boss is domiciled in
the form prescribed by the Director-General.

Section 124 When a petition is submitted under Section 123, the Labour Inspection
Officer shall conduct an inquiry into the facts and issue an order within sixty days from the
date of receipt of the petition.

Section 125 After the Labour Inspection Officer has issued the order under Section
124, if the boss, the employee or the legitimate heirs of a deceased employee are not satisfied
with that order, the case may be brought to court within thirty days as calculated from the
date of notification of the order.

The laws that show have to follow and agree with that because Department of labor
also set up the labor law for both of employee and employer know they right and reduce the
risk of HR factor

Economic factor: Today recession economic affect directly to our business, so there are many
coffee business have to fail and close their business. We also use this analysis below to make
decision
- Economy Analysis

It is out of control from business and others competitors must face as same as politic.

• National economy condition; average income per person, unemployment condition,


growth/slow down of GDP, inflation, deflation, all of these affect directly to
purchasing power of customers who are target group.

• Currency exchange affect to cost and risk of imported/exported business and


competition in international market.

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• Tax rate that government determine for business and product will affect to
advantages/disadvantages in determining price selling and cost of competition
including import tax and specific business tax.

• Cost of labor and production compare with important competitors, especially


international competitors.

Customers’ behavior factor: Many customers have low brand loyalty but high price
conscious, so they always look for brand that offer low price first. By the way our customer,
mean target, will be teenager, why? Because teenager love to drive they life freely with out
any rules, Namaarie provide a free time for them so they can spend they time in the shop and
they have to spend a money too because food not free.

Teenager love in low price, once of strategy that set the price lower for this kind
because I point that low price will attract people more. But we didn’t say that low price with
less quality.

We’re determining the customer behavior to know them buying activity. Satisfy them
in the right way can improve our benefit and low risk consider.

Evaluate risk

When we determine the critical point and risk already, must well evaluate again that
how risk is violent. We set list of risk and order following violence level that what risk
adversely affect to our business.

Customers’ behavior factor: customer is god and most important

Marketing factor: know rival help to gain competitive advantage

Economic factor: study and evaluate economic condition

HR factor: prepare knowledge and training

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Set the solution and risk protection

Customers’ behavior factor, we offer low price product but remain high quality to
attract customers. We also create service mind to make our customers feel good and
satisfaction, so they will pay high brand loyalty and create positive word of mouth to our
business.

Marketing factor, we study our competitors and must know them everything. We
have to gain the competitive advantages by planning provide good service with low price,
close to our customers, cost leadership and close to suppliers, and quick respond.

An economic factor affects directly to purchasing power of customers and can make
our business decline. So, we always follow and study the national economic condition for can
response to every situation that can occur in the future.

HR factor, employees must come from the local because they can know best what the
local people want. Then, we give training and knowledge program to our employees to have
high performance to give well service.

Evaluate solution and risk protection

We check and evaluate the solution that can be effective in handle risk. Prepare for
the risk that will occur in the future and prepare effective solution too. The important thing is
we determine the frequency of evaluate solution and protection to adapt new strategic plan
when old is not work.

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Financial Risk

We will use the financial risk to control our financial to be useful and reach our
company goal.

Market Risk is most useful factor from financial risk that we can use to evaluate and
control the financial. The main effect of our company in market risk is come from 3 of
external such as

Political
Become the one of main effect to our company because the political always create the
policy and raw that will control the price and quality of some kinds of necessary goods that
we have to buy it from supplier such as coffee bean, mike, cocoa powder, green tea powder,
sugar, etc.

Solution

We have to catch up the political news all the time to make our company gain by the
political and make more profit and get better than competitor.

Economic

Become the one of main effect to our company because the economic is the factor that
we use to evaluate our income, outcome and future plan. That we are checking on the
National economy or average income per person who are the target group.

Solution

We should to have the second plan to support the company because the economic is
not certain.

Social and Environment

Become the one of main effect to our company because the social and environment are
the factor that will let our know about who should to be the main target group of our
company and let us investment at the right point. Then we have to study in this factor clearly
for make a lot of benefit by less money.

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Chapter7: Summary

As we are determined the possibility of possible business performs, so we are going to know
the feasibility of business so far.

Coffee shop is the meeting and relaxing restaurant of every age from teenage to older
because time of relax is time of drink such sleeping time. Coffee shop also provide food and
dessert to eat with beverage to give you enjoy your free time with smooth taste of dessert and
delicious meal.

Process of coffee shop is running on small business and planning for provide good
service with low price. Even coffee shop just small businesses and use less budget to launch.
Coffee shops not clear level of command because everyone can be every level. So we
confirm that no one study this business seriously before and if we know this business clearly
every one can build this kind of carrier.

When we set up coffee business, we must thinking and planning about objective that
clear, reliable and make high profit to business. We must understand customer and what
demand while study competitor, find out the way to make profit from customer and try to do
anything that customers are satisfied. We take the feedback to improve our service or make a
new product. We choose right strategies to adapt with the situation. We can manage risk and
take advantage on competitors. Timeframe, tell about period of time in processing business.

In set up business, we must tell about company, product and process of product so in
about coffee shop business. In about history of coffee, Coffee began from local plant of
Abyssinia and Arabia discovered in century 6th around 575 BC. The Arabian called the coffee
plant Kawah or Kaweh it’s mean strength or vigor. In Thailand called Gobee Kaewfee and
Gafaar till now. Coffee originated in tropical Africa, from where it has since been introduced
to most tropical countries throughout the world. Coffee was introduced to Southeast Asia and
the West Indies in the 17th and 18th centuries. The real start of the Thai coffee industry is
relatively young. The Thai government started a successful campaign promoting Robusta
coffee growth in Southern Thailand. In 1976, Thailand officially became a coffee exporting
nation. Thailand is a coffee nation, ranked third (after Indonesia and Vietnam) in Southeast
Asia in annual raw coffee production. While there are many species of coffee trees in the

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world, only Arabica and Robusta have major economic significance, both of which are grown
in Thailand.
Beyond from detail of coffee, in about business we must know situation analysis,
detail competitive in near around our business, type of coffee to serve to customer [Latte,
Espresso, Americano, Cappuccino, Mocha and soft drink]. When we set objective, know
about of our business. We will set vision and mission. Vision of our organization is
bringing Thai’s coffee specifically to produce coffee for Thai customer and sell product low
price. We have hi-technology coffee processing. So we have several style and taste of coffee
that customer can choose by themselves. In social responsible, we plants coffee by employ
people in local place, it make opportunity in work and income and develop to product of
community and we have save and develop environment plan in business.
About mission, we try to develop taste of coffee and present several kind of coffee for
customer and we try to make loyalty and word of mouth in customer group and try to
increase branch of business around province in 2 years. In about strategy, we know about
business level such as corporate level [vision, policy, objective, process project teams and
individual job performance.]. We try to make loyalty and word of mouth in customer group
and try to increase branch of business around province in 2 years. Business level [competitive
advantages, cost leadership, quick response] and Functional level [marketing, Financial,
Human resource management.

In about market analysis we must know about political analysis. Politic is out of
control by business. Many competitors have to face with this too. Politic might positively
affect to business investment or negatively affect as obstacle in business success. So, we
always follow political news and apply in our business. Economy analysis, it is out of control
from business and others competitors must face as same as politic. Social and environment
analysis, business in different industry, market, and region might face with risk. It has
different business feasibility because business operation environment and market
environment that is different [business life cycle, consumer behavior]. Technology analysis,
changed rapidly today that is called the digital age. Marketing is the same. Result of
technology change make marketing change too. E-Commerce has grown continuously and
force marketing must adapt following trade system. So, E-Marketing happens. It helps to
operate marketing activity by using electronic equipment. Competition analysis [3c analysis]
such as competitor analysis, we define the competitors who provide service as same as us.

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For local coffee shop or weak group that we think they will become a high performance
competition will be.

Our competitors are coffee shop that set up around Mae Fah Luang University such as
Ban Coffee coffee, Parabola, Boss coffee etc. Each coffee shop is present taste of coffee and
modern style coffee shop but not more loyalty customer. We research and collecting
information about customer needs and want, we found customer want to drink fresh high
quality coffee and low cost so our business will focus in coffee that produce, we bring high
quality coffee from local places so we will get low price and can this main point to strengths.
About weakness, first we must try to promote product and make loyalty customer then same
with competitors and increasing to leader of business. From research, we found Parabola
even set up far away from community but taste of coffee can pull customer, Sawatdee Chaing
Rai is new coffee business where set up near University and they present style model coffee
shop, customer can use several corner in shop to photographing but will not famous about
coffee and bakery. Boss coffee is low cost business and can pull more customers but they not
important about decorate shop. Everything information we will use to improve and
developing our coffee business then we set plan and strategy about sell coffee, pull
customers, promotion. When we can success business, we will develop next mission and try
to leader coffee business in province.

In about STP analysis, like we said about the Strategy that I targeted on teenage, so
most of customer would be people who free and have a fill time to relax or small meeting
even date. The segmentation we divide in to 4-5 segments for service suitable in each:
Teenage [large segmentation], Family, Business man and old man. Marketing mix strategy
we focus on 4P.

Product – We are provider, we make shop for coffee drinking so we set only our product that
we set to sell with beverage such as bakery in the shop.

Price - due to strategy that we set a price lower than usual to motivate customer and
challenge competitor to earn market segment.

Place – The shop build in small café because we launch in a small business but big power to
move a business.

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Promotion – Technology is big society in our life if the customer knows us name and tell to
other and other tell to another that would be great to continue the next plan is promote in the
internet.

Finally we must know and understanding about risk in management of


business. The analyzing of business risk factors, we will use our business as a set. Then look
environment around business and business itself that what is the important point. If this point is very
important and adverse impact occur to this point, our business may get some problem. It is called
critical point. The business risk analysis starts from

(1) Determine risk such as marketing factor, we look from 4 dimensions. Political, Politic is
out of control by business. Many competitors have to face with this too. Politic might
positively affect to business investment or negatively affect as obstacle in business success.
So, we always follow political news and apply in our business. HR factor, we look from
Labor protection act 1998. Economic factor, today recession economic affect directly to our
business, so there are many coffee business have to fail and close their business. We also use this
analysis below to make decision. Customer behavior factor, many customers have low brand
loyalty but high price conscious, so they always look for brand that offer low price first. We’re
determining the customer behavior to know them buying activity. Satisfy them in the right
way can improve our benefit and low risk consider.

(2)Evaluate risk, When we determine the critical point and risk already, must well evaluate
again that how risk is violent. We set list of risk and order following violence level that what risk
adversely affect to our business. Customers’ behavior factor [customer is god and most important],
Marketing factor [know rival help to gain competitive advantage], Economic factor [study and
evaluate economic condition], HR factor [prepare knowledge and training].

(3)Set the solution and risk protection, Customers’ behavior factor, we offer low price product
but remain high quality to attract customers. We also create service mind to make our customers feel
good and satisfaction. Marketing factor, we study our competitors and must know them everything.
Economic factor affects directly to purchasing power of customers and can make our business
decline. HR factor, employees must come from the local because they can know best what the
local people want. Then, we give training and knowledge program to our employees to have high
performance to give well service.

(4)Evaluate solution and risk protection, We check and evaluate the solution that can be
effective in handle risk. Prepare for the risk that will occur in the future and prepare effective solution
too and finally financial risk, we will use the financial risk to control our financial to be useful and
reach our company goal.

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Reference

http://uncyclopedia.wikia.com/wiki/Latte_art

http://teakdoor.com/williams-legal-section/2313-thailands-labour-protection-act-1998-
english.html

http://www.pattanakit.net/index.php?lay=show&ac=article&Id=534548991&Ntype=136

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