DISCOVER TEA

[Document subtitle]

[DATE]
[COMPANY NAME]
[Company address]
Contents
Executive summary.....................................................................................................................................2
Introduction and background......................................................................................................................2
Market competition.................................................................................................................................2
Industry development and market trend....................................................................................................3
Business and product definition..................................................................................................................3
The offering.................................................................................................................................................3
Capital required.......................................................................................................................................5
The Competitors..........................................................................................................................................5
Sales and customers....................................................................................................................................6
Management...............................................................................................................................................6
Risks.............................................................................................................................................................7
External risks...........................................................................................................................................7
Internal risks............................................................................................................................................7
Financial performance and forecast............................................................................................................8
Exit strategy.................................................................................................................................................8
Reference list...............................................................................................................................................9
Executive summary
This business plan will show how a total investment of only 65000 pounds might return
cumulative net profits in excess of and average monthly sales of 8000 pounds over a five-year
period while maintaining acceptable liquidity levels.The goal of this strategy is to raise extra
funds from an investor and a bank (a 16,250 pound investment and a 16,250 pound five-year
term business loan) to meet start-up expenditures.
Discover Tea offers a one-of-a-kind experience by bringing the world's most famous teas
together in one place. We have a huge selection of teas from around the world that are served
just as they are in their home country, providing our customers with a one-of-a-kind experience.
Chinese Cha-Dao, Moroccan Mint Tea, Thai Iced Tea, Tibetan Butter Tea, Indian Masala Chai,
Japanese tea, Pink tea, Jasmine tea, Argentinian Yerba Mate, Taiwanese Bubble Tea, and many
other beverages are available on our menu. This allows our customers to respect and appreciate
other tea traditions while also enjoying tea with their loved ones all in one place.

Introduction and background

Discover tea is one-of-a-kind tea house that may seem like a heaven on earth for the tea lovers in
Islamabad capital city of Pakistan. What keeps the world spinning and the days ticking away?
Tea, of course, is a beverage that brings people from all over the world together. It's also a lot
more than a mere beverage. The wild camellia sinensis plant from the Himalayas has governed
the world for the past 2,000 years.
In Pakistan, tea is more than a hot beverage; it is an obsession and one of the most popular drinks
served to visitors, from family to formal meetings, and practically everyone enthusiastically
accepts at least a cup of it. The origins of tea culture in the subcontinent can be traced back to the
world's most famous tea-drinking civilization(Saqib, 2020).In Pakistan is usually consumed with
milk and sweetened with sugar however, around the world the tea is not just a beverage rather it
offers insight to different cultures around the world. Discover tea helps its customer experience
different cultures through medium of most liked beverage in the country under single roof.
Market competition
There is a lot of competition in Pakistani market when it comes to serving tea. Most of the
market is dominated by chain of tea house called “Quetta café “and small stalls that serve tea at
an affordable price and are usually located in busiest streets of urban cities around Pakistan.
However, due to the conservative culture in Pakistan such cafes are usually restricted to men. In
addition to this, the serve only the traditional tea known to people and have a small menu.
Discover tea is a family friendly space targeting all genders and people of all age. In addition to
this, it offers a wide range of teas and snacks from all around the globe. This tea house offers
one-of-a-kind experience and, in this regard, has no competition in the market.
Industry development and market trend
The consumption and love for tea is ever growing in Pakistan with bulk of youth opting to
consume their parents’ favorite hot beverage. This is evident by the fact according to the report
the consumption of imported tea grew by 26% in 2020. Pakistanis consumed $233.632 million
worth of imported tea in the first five months of this fiscal year (July-November). Tea imports
into the country surged by 36% in volume during the period under review, rising from 78,771
metric tons to 107,252 metric tons, according to the data. Black tea consumption in Pakistan is
currently estimated to be 1,72,911 tonnes, with this figure expected to rise to 2,50,755 tonnes by
2027.(APP, 2020)
In addition to this, Tea's global demand is also benefiting from a new customer base. Young
urban consumers in significant producing countries like China, Pakistan and India have emerged
as the fastest expanding group, keen to learn more about the product they consume — its quality,
origin, and contribution to sustainable development — as well as pay a premium for specialty
teas.(Ahmed, 2018) Discover tea is a project that monetize the growing demand of people to
know and experience different types of teas that are willing to pay premium for unique
experience.

Business and product definition

Discover tea provides a unique experience as it brings the most famous teas from around the
globe under one roof. We offer a large variety of teas from around the world that are served
exactly how it is served in its originating country offering on-of-a-kind experience for our
customers. Our menu includes Chinese Cha-Dao, Moroccan Mint Tea, Thai Iced Tea, Tibetan
Butter Tea, Indian Masala chai, Japanese tea, Pink tea, Jasmine tea, Argentinian Yerba Mate,
Taiwanese Bubble Tea and many more. This helps our customers respect and appreciate different
tea cultures while enjoying tea with their loved ones all under single roof.

The offering
The owners opted to lease a business space in a densely populated in Islamabad after months of
searching for a suitable location. Legal fees, kitchen inventory and equipment, packing and other
materials, insurance, rent, promotion and company sign, and inventory on hand at start-up will
all be covered by the start-up capital, as stated in the table below.
Rent: The commercial property will be leased for a minimum of five years in September 2022,
with the option to extend the lease for another five years.
Kitchen inventory and equipment: Teapots, tea dispensers, refrigerators, aprons, blenders,
gloves, storage containers, trays, worktables, mixers, condiment bottles, cleaning supplies and
equipment, tableware, pots and pans, glassware, paper, and other items will all be included in the
kitchen inventory.
Insurance expense: The insurance price for business risk coverage is set at 500 pounds for the
first two months and will be negotiated with the insurance company after that. It will be paid
monthly via direct debit.
Marketing: The cost of promotion is expected to be 900 pounds, which will be used for various
marketing materials and commercials.
Legal fee : Business creation, guidance and help, basic contract reviews, and general business
advice are all legal fees.
Office supplies :Desks, files, tape, record books, and forms are examples of office supplies.
Permit fee : Permit charges are the extra expenditures associated with operating legally in the
Islamabad.
Start-up Expenses
Requirements In Pound sterling
Kitchen Inventory 600
Packing Materials 3000
Kitchen Equipment 10000
Insurance 750
Rent 1000
Marketing expense 900
Other Expensed Equipment 2500
Business Sign 1500
Permits 750
Office Supplies 500
Other 1500
Total Start-up Expenses 23000
Start-up Assets
Cash Required 5000
Start-up Inventory 7500
Other Current Assets 4500
Long-term Assets 25000
Total Assets 42000
Total Requirements 65000
Capital required
The entire start-up expenditures are anticipated to be 65000 pounds. These estimates are
reflected in the numbers in the start-up tables.
Mr. Malik will supply the majority of the startup funding, totaling. (32500 pounds and 50 percent
ownership, respectively). Approximately 32500 further financing is needed. The goal of this
business plan is to get that amount of funding.
An investor and co-owner are allowed to join in the firm's capital for $29,500 and may be
offered a slice of the 65000 pound company capital worth 25percent. The investor's funds will be
utilized to purchase equipment and cover some of the startup costs.
The company intends to obtain a five-year term commercial loan facility to pay the remaining
29500 pounds extra funding required to cover the start-up costs, which will meet the cash flow
requirements. The borrowed funds will only be used to purchase equipment from a list that will
be provided to the lending institution. Over a five-year period, the loan might be repaid in equal
monthly instalments.

The Competitors
Our main competitors are “Quetta Cafe “serving traditional tea. Along with some high-end
restaurants like Chai Khanna, Chai junction and secret sky. However, in comparison to them we
are unique one of its kind establishments that offer a huge menu of tea from across the globe.
Competitors What we offer, they don’t What they offer, we don’t
Quetta café Better environment, different Pocket friendly prices,
varieties of tea traditional tea along with
traditional dishes, indoor
smoking
Secret sky Different varieties of tea, Open air environment, fast
luxury and weather friendly food, and carbonated drinks
environment, unique
experience
Chaai Khanna Unique experience, relatively Fine dining experience
affordable menu, different
varieties of tea
Chai junction Unique experience, relatively Traditional cuisine,
affordable menu, different traditional music and
varieties of tea atmosphere
Sales and customers
As discover tea is a new company, we understand that we will need to demonstrate our worth to
Islamabad’s customers to earn their respect and loyalty.
Above all, we must market our brand, not only our products and services, and generate positive
word-of-mouth. Our service and delivery capacities will have to be pushed.
Our sales approach is founded on the assumption that, due to our advantageous placement, we
will receive a steady stream of new consumers. The main sales effort will be to convert each
first-time client into a long-term customer connection, in which these consumers return to our tea
house on a regular basis and bring or refer new friends to share the joy of amazing tea.
In the hospitality sector, consistent, customer-centric service is a must, and it is also a must for
all our staff. Every member of our team would be trained and equipped to handle our clients'
needs in such a way that no one is left disappointed. Problem solving will be fostered throughout
the business, and it is fair to argue that all employees, not only first-line waiters, are part of the
sales team.
The first several months will be slower as a result of being a new enterprise trying to establish
itself in the community and go from zero to having a regular clientele. As the months pass, a
consistent growth cycle will emerge. Profitability is anticipated in the first half of the first year.
The rising sales projection indicates significant potential growth. Our predicted sales are net
sales, which are the gross profits from merchandise sales minus returns and allowances (gross
sales). The average monthly sales are expected to be around 40000 pounds. Given a 5-
pound average price, discover tea would need to sell 8000 tea cups each day on average
(5000pound average monthly sales).
Each year, two weeks are set aside for paid vacation, during which the restaurant will be closed,
but essential maintenance activities on the equipment and facilities will be carried out. This is
why September sales are expected to be half of normal levels.
We can serve approximately 500 customers daily given the constraint of seating capacity. We
can serve 50 people every hour. So, working at our full capacity and 10 hours per day 7 days a
week. We can serve 15000 people per month(theoretical capacity). However , taking into
account normal breaks, average technical issues and other miscellaneous issues we can surve
almost 12000 customers monthly. While our set goal is of 8000 is 66.67 % of the normal
capacity which is easily achievable.

Management
Our executives are expected to manage resources sensibly, operate profitably, pay debts, and
follow all applicable rules and regulations. Teamwork, responsibility, and mutual respect are the
cornerstones of our management philosophy. Take-Out Pizza, Inc. employees want to be a part
of our team because we work in an environment that promotes innovation, diversity, growth, and
performance.
For our type of firm, we've found that a team of five multi-skilled people works well. Our ability
to work as a team is crucial to our success. We understand that Discover tea's most precious asset
is its people. To promote employee loyalty and performance, our personnel strategy focuses on
choosing, training, rewarding, and encouraging all employees.
Finding and selecting the greatest new members of our team will be simple. Many talented
personnel have been formed and grown as a result of the traditional local food-service business,
which is well-represented in the area, as well as local institutions and schools. In this sector of
work, a background check is a necessary during the hiring process.
Our manager is especially skilled and understand peoples love for tea. He has traveled around the
globe perfecting and collecting most authentic tea recipes from around the world. He would take
up the job of training the employees introducing them to how various teas are made. In addition
to this, he would ensure the quality of our product while also ensuring that Discover tea creates a
unique experience for it`s customers that make them come back for more.

Risks
External risks
Exogenous risks are difficult to predict and account for, while doing business.
Inflation: Due to on growing war in Ukraine there has been surge in the oil price all over the
world causing cost-push inflation. Although the Pakistani government have artificially stabilize
the petrol prices but such polices are difficult to persist in long-run.
Recession: Pakistan is facing troubled times due to on-going political instability which has led to
ignored economic policies. Recession can be predicted in near future
Location: The chosen location will be rented for a minimum of five years, with the option to
renew for another five years. There are no other planned construction projects in this densely
populated Islamabad that could have an impact on our business location in the foreseeable future.
Exchange rate: exchange rate is likely to remain stable as it is now governed by market after IMF
plan. Exchange rate is of crucial importance to us as most of our raw material are imported.
Internal risks
cash flow problem: Our first worry will be having enough cash on hand to satisfy our payment
responsibilities, as well as being prepared for unanticipated cash demands.
Continuity of operations for the next five years. In the event that something goes wrong with
one of our managers, the other will be able to take over and continue operations.
Suppliers: Although we import from many suppliers from different countries however any trade
restrictions would cost us dearly. In order to minimize this risk, discover tea would maintain an
inventory of raw material to continue business in uncertain time.
Financial performance and forecast
We have predicted to sale almost 8000 different teacups per month. Each cup of tea will cost on
average 5 pounds to our cost customers. Our sales proceedings would hence be on average 4000
pounds. As there are many varieties of tea it is difficult to predict the consumption patterns
before operation. On average the cost of each cup would cost 2.50 pounds.
Sep (In pounds) Oct (In pounds) Nov (In pounds) Dec (In
pounds)
Unit sold 5000 6000 8000 8000
Average cost 5 5 5 5
Average sales 25000 30000 40000 40000
Average cost of 12500 15000 20000 20000
goods sold
Average gross 12500 15000 20000 20000
profit
Average expenses 12500 12500 12500 12500
Average net 0 2500 7500 7500
profit

It is predicted that in first month of operation there would be less customers but as the word of
mouth spread around the country it would start to see an increase in influx of customers.
Discover tea might have to operate on low profits in beginning months but the profits would
slowly start to increase as it attracts more customers

Exit strategy
We understand that any investor in a start-up company, no matter how promising on paper, will
eventually want an exit strategy. Our goal is to provide the finest options for protecting investors'
interests while retaining our company's potential for growth, liquidity, and future profitability.
Typically, investors are concerned about becoming stuck into a company that shows no signs of
going public or going bankrupt. To counteract this potential threat, we are willing to discuss
numerous exit options with the investor and put the best conditions in the agreements that are
expected to be finalised before the time of incorporation.
While considering alternate techniques for the investor to convert illiquid securities into readily
tradable securities or cash, there are various solutions that could be addressed.
These choices include, but are not limited to, the following:
• Selling to a friendly bidder
• Acquisition terms
• Liquidation terms
• Investor's right of first refusal in the next round of funding
• Anti-dilution measures
• Buy-back after the initial five years
• IPO
Reference list
Ahmed, A., 2018. Tea consumption up in Pakistan [WWW Document]. DAWN.COM. URL
https://www.dawn.com/news/1415762 (accessed 4.6.22).
APP, 2020. Pakistanis consume $234m of imported tea in five months [WWW Document]. URL
https://www.thenews.com.pk/print/765405-pakistanis-consume-234m-of-imported-tea-
in-five-months (accessed 4.6.22).
Saqib, M., 2020. Tea Culture in Pakistan: The fondest social activity. BaaghiTV Engl. URL
https://en.baaghitv.com/tea-culture-in-pakistan-the-fondest-social-activity/ (accessed
4.6.22).