The trend of dining and relaxing in the cafe space is growing, an opportunity to expandmarket share and attract new customers.New technologies, like ordering drinks online or paying by p
COMPANY INTRODUCTION
Introduction of projects
1.1.1.Project’s name: THE DREAM COFFEE
For business people and freelancers, a coffee shop is a familiar place that people often go to to handle their work But not any restaurant is suitable for you to meet your partner and focus on doing important things with your laptop.
Of course, our coffee and drinks are also very rich and diverse for you to freely choose according to your liking They will be arranged in the most unique way to stimulate your sight and taste Besides, we wish our customers a great experience when enjoying drinks. Our Motto"Coffee awakens creativity and inspiration”
1.1.2.Reasons for choosing the project
Drinking coffee is not only a habit but also a culture of Vietnamese people Many coffee addicts choose to drink 1 cup of coffee every morning to stay awake before work In addition, going to coffee is also an opportunity for people to gather together to chat and exchange feelings The word "go to coffee" is used familiarly when you invite others to have a drink, even if you don't drink coffee at the shop.
Analysis of strengths and weaknesses
Convenient geographical location, close to residential areas, offices, schools or tourist attractions.
The space is beautifully and luxuriously arranged, creating a feeling of comfort, warmth and attracting customers.
The staff is friendly, professional, experienced and ready to serve customers.
Diverse in drinks and food, quality assurance, rich flavor, attractive to customers. Reasonable price, suitable for many customers.
Effective advertising and marketing, regularly organizing events and promotions to attract customers.
There is no effective risk management and cost control policy, leading to financial risks and high costs.
Staff is inexperienced or not in sufficient number, leading to unsatisfactory service quality.
Lack of creativity in space and menu design, leading to boredom and not attracting new customers.
There is no product that is exclusive or different from competitors, which makes it difficult to compete and gain market share.
Unable to meet the needs of some other customers, such as customers who need a quiet, exclusive space or health drinks.
The coffee market is growing strongly, the needs of customers are increasing.
Customers are increasingly interested in product quality, space and service experience.
The trend of dining and relaxing in the cafe space is growing, an opportunity to expand market share and attract new customers.
New technologies, like ordering drinks online or paying by phone, increase convenience and attract younger customers.
Incentives, discounts or promotions can help attract new customers and retain existing customers.
Fierce competition from competitors, resulting in a decrease in market share and revenue. The change in the tastes of customers, it is difficult to meet their diverse needs. The increase in raw material prices, operating and rental costs, leads to increased production costs and reduced profits.
Food safety, hygiene and environmental issues can affect a cafe's reputation and reputation.
Changes in tax policy and legal regulations may affect the business of the cafe.
APPRAISAL OF INVESTMENT PROJECTS
Project introduction
Main products: we deal in all kinds of coffee, fruit tea, cakes.
The dream coffee address:12 Luong Khai Sieu, Binh Tho, Thu Duc, Ho Chi Minh City, Vietnam
According to the survey, about 2% of current customers are under 18 years old In addition, about 88% of the total surveyed are 18-22 years old and about 6% of customers are 23-25 years old This shows that customers interested in this model are students. students and office workers So we've chosen a location that's close to a lot of middle schools, high schools, universities and offices, so it's good to have potential customers in this age group.
Lines of distribution: food and beverage service
To serve customers of different ages, our coffee shop has a variety of food and drinks. Here, you will enjoy flavorful cups of coffee and delicious pastries made according to the shop's own unique recipe.
In addition, you can enjoy the open space filled with light and greenery It gives a feeling of freshness and freshness that helps the brain to be strongly awakened to start work. 2.1.2 Scale of project implementation
Our coffee shop has a basic design with gold and wood tones With 80 square meters, we divided into four areas:
- Reception area: The seating area is designed to create a cozy and friendly space, using decorative lights and plants to create a green, relaxing space The interior layout is simple but comfortable, with tables and chairs suitable for the target audience.
- Dispensing area: The dispensing area is designed to be clean, neat and full of equipment for dispensing, using good lighting to help bartenders work efficiently.
- Beverage and food storage area: The area for drinks and food is designed to be easily accessible and convenient for customers, with suitable tables and chairs so that customers can enjoy their drinks and food individually comfortably, using good lighting to create a cozy and inviting space.
- Upstairs sitting area: The upstairs sitting area is designed to create a private and quiet space besides using some ornamental plants and decorative lights to create a comfortable and relaxing space.
Lighting and sound system: Lighting and sound system should be designed to create a comfortable and attractive space for customers, using soft light, melodious sound to help customers enjoy space comfortably.
To further support customers, we also provide a restroom on the ground floor and upstairs with necessary items such as power sockets, game boards for customer groups. 2.1.3 services
Dream Coffee always wants you to understand the value and deep meaning in every sip of water so that the development of the shop is sustainable and long-lasting We expect every element of young plant growth, every stage of raw material creation From farmers on the other side of the world, to vast oceans carrying bags of coffee the world loves, to people who care.
We want to create an open and sustainable community where everyone - employees,customers, suppliers - feels safe, finds opportunities, grows and feels supported in building a strong industry We always put the customer first, the staff is ready to help you when you have trouble at our store In addition, if you are not satisfied with anything at the store, you can scan the QR code to share with us The Dream coffee will support you.
We value diversity and multiculturalism, transparency and fairness Our goal is the common development of mankind.
To thank customers on the holidays, The Dream coffee offers you many promotions such as: buy 2 get 1 free, upsize free, Buy large size coffee get small size coffee, bill over 200,000 VND get 1 free the cake…
- Business planning and financial management of the restaurant.
- Manage and supervise the operation of the restaurant, ensuring compliance with the provisions of law and internal processes.
- Manage and train restaurant staff.
- Establish and monitor the quality standards of products and services.
- Marketing, promoting and building the brand image of the shop.
- Waiters: serve customers, plan menus, prepare drinks and food, collect money and process payments.
- Baristas: prepare drinks and food, clean and maintain dispensing equipment.
- Counter staff: taking orders, providing information to customers, keeping the counter area clean.
- Cleaning staff: clean, sanitize and maintain the bar area.
- There is an official staff in charge of keeping motorbikes and bicycles of guests.Make sure the bakery and customers are safe.
2.1.5 Expected salary schedule amount (person) salary (VNĐ/ month) into money
Table 1: Expected salary Source: Article 3 Decree 38 2022
Appendix I, II and III issued together with Decree No 15/2022/ND-CP dated 2.1.6 Project capital upon establishment
Revenue Forecast
Table 14: Total depreciation 2.4.2 Interest expense
We plan to borrow 500,000,000 VND (25% of the initial investment) at Sacombank interest rate of 9.6%.
Table 15: Interest expense 2.4.3 Net working capital
Table 16: Net working capital 2.4.4 Expected income statement
The project is expected to be implemented in 5 years Revenue is expected to grow 10% year-on-year, we estimate variable costs to account for 38% of revenue, COGS for about 43% of revenue, and tax at 20% under Corporate income tax law revised 2013.
2.6 Calculate the cost of capital of the project
We calculate WACC from our equity and bank loan, in which, the debt is 500,000,000 VND that covers 53% of total investment, the remaining weight of the Initial investment cost (47%) from our equity The cost of debt is the bank loan interest, cost of equity is calculated by the following formula:
Cost of equity = Risk Free Rate + ( Beta* Equity Risk Premium)
Tax rate Debt/Equity Unlevered beta
CTCP Bánh kẹo Hải Hà -
Weighted average cost of capital (WACC)
WACC : Weighted Average Cost of Capital
Ke: Cost of equity/equity
D : Value of loan t : Corporate income tax rate
Building cash flow
The project is expected to be implemented in 5 years Revenue is expected to grow 10% year-on-year, we estimate variable costs to account for 38% of revenue, COGS for about 43% of revenue, and tax at 20% under Corporate income tax law revised 2013.
Calculate the cost of capital of the project
We calculate WACC from our equity and bank loan, in which, the debt is 500,000,000 VND that covers 53% of total investment, the remaining weight of the Initial investment cost (47%) from our equity The cost of debt is the bank loan interest, cost of equity is calculated by the following formula:
Cost of equity = Risk Free Rate + ( Beta* Equity Risk Premium)
Tax rate Debt/Equity Unlevered beta
CTCP Bánh kẹo Hải Hà -
Weighted average cost of capital (WACC)
WACC : Weighted Average Cost of Capital
Ke: Cost of equity/equity
D : Value of loan t : Corporate income tax rate
Project appraisal by NPV, IRR
Net present value (NPV) is net worth In general, if the calculated NPV of a project is positive, the project should be invested because it increases income and increases assets, while negative it should not NPV is often used in capital budgeting, investment planning to analyze the profitability of an investment or projected project From the table above, it can be seen that this is a project to invest in because the NPV is positive and in the future it can bring in a profit of nearly 3.9 billion dong.
As for IRR, IRR is the internal rate of return, which is a measure of the profitability of a project The higher the IRR, the better the project's return on investment and profitability.Therefore, IRR is 71.79 % greater than WACC i.e project's rate of return is greater than the cost of capital invested, the project should be accepted.
PROJECT RISK ANALYSIS
Types of Risks of the Project
The model of coffee shop and accompanying cakes is a popular business and is favored by a large number of consumers, so the number of coffee shops is also relatively large.There are many famous and popular coffee shops known as Starbucks, highland coffee,The Coffee House, etc Besides, there are many shops around our coffee shop with similar models, so the competition is quite a lot Making a difference, caring about the needs and satisfaction of customers is what we aim to make customers trust and choose our bakery.
Because the main customer of the shopcafe are workers and students, so they have a very simple and approachable lifestyle When entering a cafe, what they care about most is service style and comfortable atmosphereroof or not In addition, according to the survey through conversations with guests, we know that when entering a cafe, they often consider issues such as:
– The shop cafe Is there enough light?
– Is the waiter enthusiastic and happy?
In order to attract customers to pay attention to the items on the menu of the coffee shop, attractive promotions are important Customers will grasp drinks and cakes more easily because of this Customers are advertised through leaflets and other forms of advertising on social networking sites, email notifications The goal of the above strategies is to increase the revenue of the coffee shop, however, if there is not a certain number of customers as required, the revenue will decrease and the project will go bankrupt due to no loyal customers Long-term customers for the restaurant.
3.1.4 Initial cost of the project
The cost of renting space: This is the biggest cost when starting a coffee shopget high.The cost of renting a space depends on the location, the area of the premises and the rental period.
Equipment cost: Including equipment such as coffee machine, coffee grindereh, ice cream machine, air conditioner, cash register, serving utensils and furniture.
Construction and design costs: Including costs of construction, painting, flooring, decoration and interior design.
Cost of buying ingredients and food: Includes ingredients and food such as coffee, sugar, milk, cream powder, fruit, snacks and other beverages.
Management and staff expenses: Including staff salaries, insurance, taxes and other expenses related to the management and operation of the cafe
Marketing and Advertising Expenses: Includes marketing and advertising costs online, offline, print, social media advertising and other marketing channels
Compared to Clause 1, Article 66, Decree 78/2015/ND-CP stipulating on individual business households: “Household business is run by an individual or a group of people including individuals who are Vietnamese citizens who are full 18 years old age, having full civil act capacity, or a household owned by a household, may only register a business at one location, employ less than ten employees, and be responsible with all its assets for business activities.”
Scenario analysis
Best, Worst and Base Case Parameter Assumptions
The project is put to the test for scenario analysis using three cases with three different parameters: Best Case, Base Case, and Worst Case.
Best case: If sales increase 12%, the net present value will increase to VND 10.28 billion and IRR will increase to 97.34% This case provides investors with a significant increase in profit.
• Base case: This is the base case, 10% each year.
• Worst case: If revenue drops by 10%, the NPV is negative 1.37 billion dong and the IRR decreases to negative 3.94% This case will give investors reduced profits.
From the analysis of the above 3 scenarios, it can be determined that revenue, investment capital and COGS make the net present value less than 0, then it is allowed to be eliminated, and if the net present value is greater than 0 feasible project can be implemented Besides, we should advertise and offer promotions on special days to attract more customers Not only selling directly at the shop but also selling online to increase revenue.
Sensitivity analysis
In this project, it will bring profit when the revenue is about 12 billion dong and the cost of goods sold is 5.2 billion dong From the table above, using the assumptions of Revenue Growth, Cost of Goods Sold Ratio, it is possible to construct a simple forecast for the next 9 years, thereby calculating the net present value of Free Cash Flow for the next 9 years period.
From the sensitivity analysis panel, more thorough analysis and better decision-making can then be performed In order for the company to limit the risks that may arise, these analyzes can be used to view the risk in a given investment Wherein we can expect positive returns in the end which will help us to make more informed decisions.
CONCLUSION OF THE PROJECT
According to the above research, The Dream Coffee shop operates effectively thanks to high revenue, reasonable costs, convenient location near many schools, easy access to consumers, especially students.