final report subject project management topic establishing a coffee shop pm coffee project

Overview of the project - Name of the project: PM COFFEE - Type of the project: Business plan providing beverage service - Type of the products: Black coffee Peach green tea Black sugar

TON DUC THANG UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

LECTURE: Mr Nguyen Chinh Quang

CLASS: 701, Friday 2* shift

Ho Chi Minh City, Dec 2022

GROUP MEMBERS AND EVALUATION

Dinh Nguyen | 720i049 @ Chapter 1 100%

@ Create PowerPoint

TABLE OF CONTENTS

CHAPTER 1: CASH ELOW ANALYSIS EXERCISE «< 7

2.1 ProJect descripfIo - c1 020112011101 11111 1111111111 111111111 1111111111111 te II 2.1.1 Overvlew of the prOJ€Ct 2 Q2 00020111101 1111111 11 1111111111111 11 k2 II 2.1.2 The related parftIes - 2 Q20 00220111011 111111111111 1111111111111 1x e2 II 2.1.3 Timeline of the prOJ€CE - 0 222122111211 12211 122111211 11811 121k 12 2.1.4 ProJect ÌocatIO - ác 20 1220112111121 1 112111511 1181111011101 11 0111112 vá 12 2.1.5 Size of the prOJeCf - Q02 1020111211121 1121111811152 1 1811118112011 xk, 13

PA Ã0)9)i-viì,- aẠỘỤŨỒŨ 16 2.2.1 ProJect obJ€CtIV€S - 0 0120102201121 1 1121111211 112011 1111120111119 011 11c Hài 16 2.2.2 Management obJectIV€S - - L1 01122011211 1121111211121 1 112211111 17

3.1 Outline of the main phases of the project 0 0c cc ccc ecccceeesseeenteeeeeenes 18

3.2 General approach and methods - 5-2 2222222212211 1221222122 11252 19

CHAPTER 4: PROJECT ANALYSIS AND EVALUATION 20

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ALL Market co nn 20

Noo non eO 21

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4.2 ProJect arnaÏySIS - - c1 20111101112 11121 1110111111101 11101 111011101110 11kg 23 4.2.1 Produet anaÏyS1s 1 2 1022111121112 11121111 1112211111111 1181k 23 4.2.2 Supplier anaÏySIs L1 2.12201112111211 112111121112 211 18111181121 k 25 4.2.3 SWOT evaluation and competitiveness of the coffee shop 27

4.2.4 Analyze and evaluate the financial feasibility of the project 30

4.3 Project risk analySis 00 c ccc ccc cece 101111211 112111 1111111111101 11 10111101112 11k 33 4.3.1 Investment-related cash ÍÏow T 2n HH 12011111211 H1 Hà 34 4.3.2 Risks of remvestment and debt settlementt - c2 scs>>y 34 4.3.3 Market purchasing poWer rIsk - L2 1 2221222111121 1111152111222 35 CHAPTER 5: ORGANIZING, PLANNING, AND IMPLEMENTING PROJECT 36 5.1 Organization of the prOJ€CE L0 1221112111121 1112111211110 1112211112 36 5.1.1 ProJect organization structure điàram - 2c 222212 c2ss+2 36 5.1.2 General responsibilities of department/position in the organizational Harte 36

5.1.3 Work Breakdown Structure (WBS) and Responsibility Matrix 38

bì s00 ìiï ÉBiaatddididd 42 5.2.1 The analysis of Gantt chart 5 c2 2221122111 22111 1211112111111 222 42

5.2.2 Budgeting proJect - c1 1211122111211 1121112 111011110111 11112 1k1 áu 45

5.3: ProJect CorntroÌL - - 12c 112011110111 211111 1111121111111 1110111110211 1 111g tk 48 5.3.1 Techniques and tools to measure perforimance - :- 48

TABLE OF FIGURES

Figure 1: Model ofthe PM COFFEE spaee 2 2220122212 2211 1212k ra 13 FIgure 2: Management teain's strUCfUF© - - 0 220122211121 1121111211181 11 112k 36 FIgure 3: BusIness tearm's StFUCẦUFC - - 2L 220 1220112211 1211 11115211 11111811111 36 Figure 4: Work Breakdown Stru€fUfe .- - L 2.11201112111211 121111211128 111g 39 FIgure 5: The Gantt chart of PM Coffee proJect - - c2 2221121 22 2xx sey 45 FIgure 6: Customer relatlonsh1p managemerit - + + 2222222222212 *2+222*++s2 49

TABLES

Table 1: Cash FlOW 2.000 7 Table 2: Calculate NPVS 0 8 Table 3: Calculate Paybaek period - c1 2201120112111 1211 111115511111 551 111k r ray 9 Table 4: Caleulate Profitability Index 2-2 2221122112121 1221122212 10 Table 5: Type of produefs c0 1201121112111 1211152111211 11 0111520111112 11kg gàu II Table 6: Total capital of the proJect - 2c 2122211121111 1121111111821 11 111k 15 Table 7: Bref After prediction ofinitial Investtment coSfS cc 22c 2252 16 Table 8: Detailed price list of products - 5c 2 22221122213 2211121 11221222 22%2 24 Table 9: The number of employees and saÏarles ¿52522222522 s+sss2 30

Table 11: The adjusted eost - - 2 22 2222111211111 112111221118 1111112211111 32 Table 12: The NPV of the proJect L1 21 121111211 11211121 1111111011128 12g 33 Table 13: ResponsIbility Matrix L2 1 1111121112211 1211112 1111122111111 42 Table 14: Job description and analys1s table + 2c 22211221221 12211 222k 44 Table 15: Detailed budgeting table - + 1 221 2211121111211 1121112211111 1111 m2 48

As well as all of us know, coffee is a familiar and almost indispensable drink in today's world, associated with the Vietnamese people's long-standing culture and tradition In this industry, the amount of customer demand and the potential market is large, so many startups always want to step in Currently, students and office workers need a space to study, work and stay open 24 hours To solve this problem, PM COFFEE was born with a commitment to being a cafe that never closes for busy people Besides, PM COFFEE offers a spacious, and lovely space suitable for studying and teamwork We are so fortunate when studying the subject Project Management so that we can contribute efforts to implement this project for the social community

Our project “PM COFFEE” is made based on the efforts of the team members

as well as the references, lessons learned from books, research works, and information from news sites In the process of implementation, although we have tried our best, because of limited knowledge and lack of practical experience, it is difficult to avoid shortcomings Therefore, we are looking forward to receiving your attention and comments to improve this report

Finally, we wish you all good health and good work

We sincerely thank you!

Sign Team PM Coffee

CHAPTER 1: CASH FLOW ANALYSIS EXERCISE

Based on the Cash Flow that the proposal gives, our team decides to choose cash flow 2 to do this task Therefore, we apply the profitability models to evaluate investment opportunities:

After 1 After 2 After 3

Table 1: Cash Flow 2

1 Net Present Value (NPV):

Because we have a required rate of return of 10% with an inflation of 5% so we calculate

300 350

the required rate of return, and

initial cash investment (because this is an outflow, it will be negative)

To include the impact of inflation (or deflation) where p, is the predicted rate of inflation dur-

ing period ¢, we have

NPV (project) =A) t 2Z+k+p} F,

opportunity

2 Payback Period (PP)

- It is the number of years required to repay the initial investment

- Fomulas: Payback Period = Initial Investment / Cash Inflow per Period

e

Annual Annual Annual

— Project C is the best opportunity

3 Profitability Index of those opportunities:

- Fomulas: Profitability Index (PI) = 1 + NPV/10

Table 4: Calculate Profitability Index

In summary, our team found that Project D fits all the criteria set by our team through the process of calculating NPVs, Payback period and Profitability Index

CHAPTER 2: OVERALL OF THE PROJECT

2.1 Project description

2.1.1 Overview of the project

- Name of the project: PM COFFEE

- Type of the project: Business plan providing beverage service

- Type of the products:

Black coffee Peach green tea Black sugar pearl milk tea Mochi cake

Capuchino Hibiscus tea Grass jelly roasted milk tea Macaron cake

Table 5: Type of products 2.1.2 The related parties

- Project owner: Project team, including 05 members of the Project Management Class

at Ton Duc Thang University

- Target customers: Students of Ton Duc Thang University and surrounding areas in District 7, who want a quiet space to study and research exercises Besides, there are people who want to meet or talk with their friends

- State management agency:

+ Business Registration Office - Ho Chi Minh City Department of Planning and Investment (registering for a business license)

+ Food Safety and Hygiene Sub-department of Ho Chi Minh City (certificate of food safety)

+ The suppliers: Trung Nguyen Legend Coffee, Chinh Son Tea Company Limited, ABC Bakery

+ Landlord: Mr Long - real estate agent at S Home Company

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2.1.3 Timeline of the project

- Estimated time of operation: The project is expected to operate for 5 years

- Starting time of project: 01/10/2022

- Official opening time: 1/04/2023

2.1.4 Project location

After researching, referring to many different sources as well as surveying the market, our team decided to choose the premises in Kim Son residential area for the business of the PM COFFEE store for the following three main reasons Firstly, the cafe is located on the main road in the center of District 7, surrounded by Ton Duc Thang University and RMIT, making it easy to attract many potential customers Students often go to coffee shops to study, have group meetings, meet and talk together When the exams come, students will study together from morning till night, even many groups study overnight This is the most familiar source of customers that the PM needs to target Secondly, the rented premises have been arranged very cleanly and beautifully, and the surrounding scenery is so fresh and covered by trees, creating

a comfortable feeling for everyone to focus on studying and working Therefore, we did not need to repair too much because the design was relatively consistent with PM's orientation, helping the shop save repair costs when putting the project into operation The last reason is that although located in the center, its price is quite cheap compared

to the common ground of shops in the same segment This helps the shop save significant monthly space rental costs

Detailed information about the location of PM COFFEE:

- Address: No 9, Kim Son residential area, Tan Phong ward, District 7, Ho Chi Minh

City

- Area: 20m*20m, including ground floor and second floor with terrace

- Rent costs: 60 million VND/month; 6-month deposit: 360 million VND

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2.1.5 Size of the project

a) Features and highlights of PM COFFEE

Currently, people between the ages of 16-35 tend to go to cafes to study and work a lot The purpose of these groups when going to cafes is that they want to change the working space, help them feel comfortable and find more ideas at work This is also one of the points that PM COFFEE pays great attention to, which is the space of the shop During the market survey to determine the needs of customers, PM understood that space is one of the first things that customers think about when they decide to go to any coffee shop Therefore, PM has focused a lot to be able to design a coffee shop with a space that suits the needs of customers and the goals that PM is aiming for - A coffee shop for students to meet deadlines

DESIGN OF THE PM COFFEE

Figure 1: Model of the PM COFFEE space

The space is decorated in a modern and attractive style with black, wood grain and brown as the main colors The space of the cafe is designed with many glass doors

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to be able to get as much natural light as possible The highlight in the design of the

PM is that we design a space that is not only modern and full of light but also decorated with many trees to create a green space for the cafe PM will bring its customers a space that is both modern and "green" The quiet and convenience with lots of natural light will help customers have the most comfortable experience when coming to PM COFFEE Besides that, we take advantage of all the empty space in the shop so that we can put as many trees as possible, creating a green working space for

our customers

In short, with a space that combines modern and "green", drinks are good for the body and health, reasonable prices and professionalism, and dedication to the service style and services that PM brings We are confident that this is one of the coffee shop projects with great potential and worth trying In the future, we believe

PM will become one of the biggest coffee shops in Ho Chi Minh City for university students due to the products, space and service quality provided by the cafe

Table 6: Total capital of the project

Table 7: Brief After prediction of initial investment costs

d) Employment

As PM coffee will open 24 hours a day so we will have 3 shifts per day (6am- 2pm, 2pm-8pm, |0pm-G6am) so we assume that we will need | manager, | security guard and 2 service staff for each shift, the coffee shop also demands to have | accountant for the shop Theresore, in total, there will be 13 hired employees:

experiencing the service of the shop

- Marketing target: Advertising the shop's image to customers by taking advanataage

of the social media and promotional campaigns

- Environmental target: Building a comfortable environment to socialize and relax, at the same time ensuring an ideal space to study and work for the customers

- Products target: Trying to research and create new drinks and develop seasonal products, along with guaranteeing the quality of each drink and dessert in the shop to

be able to satisfy the needs of customers

- Suppliers target: Creating a professional reputation to the suppliers and partners for the long-time cooperations

- Service target: Making sure each staff must have a friendly and enthusiastic attitude

to welcome and be ready to serve customers Moreover, PM COFFEE will make drink

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deliveries through applications such as Grab, ShopeeFood, Baemin,, for remote

customers

2.2.2 Management objectives

- Project implementation time: from 1-Oct-2022 to 1-April-2027

- Project implementation phases:

® Conception phase: from 1-Oct-2022 to 30-Oct-2022

¢ Definition phase: from 31-Oct-2022 to 6-Dec-2022

® Execution phase: from 7-Dec-2022 to 1-April-2023

¢ Operation phase: from 2-April-2023 to 1-April-2027

- Project progress: The members of the PM Coffee project must complete the project at the perfect level on schedule and set up an appropriate time budget for each stage and each task

- Revenue: Gaining the set expected revenue; continue to maintain and expand the market

- Cost: Controlling and optimizing costs to bring quality products at reasonable prices and provide clear specific solutions for financial risks

- Human resources: Ensure staffs are well tratned, avoid making mistakes; and take the most advantage out of the human resources

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CHAPTER 3: DRAFTING THE PROJECT

3.1 Outline of the main phases of the project

To complete the PM Coffee project as best as possible, our team drafted this project and divided it into 3 main implementation phases:

a) Conception phase: from 1-Oct-2022 to 30-Oct-2022

Planning the concept and scale of the shop

Analyzing the market, competitors, and the customer's demand

Analyze project using SWOT method

Analyzing the financial viability of the capital

b) Definition phase: from 31-Oct-2022 to 6-Dec-2022

Choosing the location of the cafe's premises

Making Financial planning:

+ Capital structure and the need for initial investment capital

+ Working capital needs

+ Employee salary expenses by month/quarter/year

+ Forecast of expected revenue and operating expenses in | year, 2 years, 3 years, etc

Making plans to manage and operate the cafe

Making marketing plan for coffee shop

c) Execution phase: from 7-Dec-2022 to 1-April-2023

Selecting suppliers

Buying the shop design and recipes

Signing all kinds of contracts with suppliers

Building menu, and serving process

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® Collecting raw materials

* Constructing the facilities and buying furniture and other necessary items

e Asking for a business license and food safety certificate

® Making employee management plan

e Hiring and training the staffs

© Officially put into operation in the actual market

d) Operation phase: from 2-April-2023 to 1-April-2027

® Evaluating the shop's activities

e Enhancing services and products

3.2 General approach and methods

PM coffee is a passionate project of our team and throughout this project, we have used a lot of methods to be able to build the project and manage it

From the first steps, to be able to come up with ideas and build this project, we had to research and collect information through reports, websites, magazines as well as refer to the opinions of experts

Next, to better understand the market, competitors, and customer needs, we conducted a survey based on the Google Form platform and invited people to participate in through social networking sites such as Facebook

Then, from the information and the survey responses, we proceed to evaluate our project through the SWOT model to know the feasibility and risks so that we can make project management plan

At the same time, we also adopt quantitative methods that can calculate indicators such as total cost, expected revenue, and payback period, to assess the financial viability of the project, as well as using Cost Engineering to make the budget table of the project

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In addition, Work BreakDown Structure (WBS) and Gantt Chart are also used

so that we can easily divide the tasks and manage the project progress effectively Finally, to measure performance against objectives we will use the rating chart

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CHAPTER 4: PROJECT ANALYSIS AND EVALUATION

4.1 Market analysis:

In this section, we have collected more than 100 surveys of students and residents living in the Kim Son residential area Based on the survey results, we can analyze the market, offer suitable products, and set the prices

4.1.1 Market demand

Currently, people come to the coffee shops not only for refreshments but also for many other purposes such as studying, working, and talking with friends, The survey showed that most of them usually go to a coffee shop more than 3 times a week, about 60.8% The second place belongs to the group of people who go to the coffee shop to study 2 to 3 times a week, around 25%:

How many times you go to a study coffee shop?

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other requests, such as for friendly staff, on-trend and allowed pets at 24.8%, 20.7%, and 14.9%, respectively:

What kind of learning coffee do you need? (only choose 3) II Copy

0 20 40 60 80

4.1.2 Potential customers

It can be seen that the need to find a suitable cafe for studying and working with young people is very high The evidence is that 62% of search demand is in the 18-25 age group, which is the age of university students In addition, the proportion of working people is also relatively high, about 29.8%:

Since PM Coffee's customers are mostly students, the price must be

inexpensive Here, most people accept prices below 30.000 VND At such a reasonable price (around 30.000 VND), PM Coffee make sure that we will provide a delicious and nutritious menu while ensuring prices and hygiene for students:

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Reasonable price for a drink at the coffee shop

121 responses

@ < 30000 VND

@ 30 000 VND - 50 000 VND

@ 50 000 VND - 60 000 VND PTT @ > 60 000 VND

4.1.3 Competitors

In the Tan Phong area in general and the Kim Son residential area, regular customers will go to Ong Bau restaurant The proof is that the rate of this restaurant is 39.5%, accounting for the highest proportion in the competitor chart Mr Bau provides all the following convincing factors: quiet, reasonable prices, diverse drinks, and open

24 hours, The lowest is Open Glass, with a 26.9% rate, despite the reasonable price, but the shop does not serve after 11 p.m., which causes Open Glass to lose many

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¢ The need to find a suitable coffee shop for students has relatively strict regulations

¢ Minimum requirements must meet the criteria: being open 24 hours a day, having reasonable prices, and having a quiet space

® The price is suitable for students, so it is less than 40,000 VND

¢ Coffee shops that meet the above criteria will be loved by most students and working people, for example: Ong Bau, Bamos, Open Glass 4,2 Project analysis

4.2.1 Product analysis

With the strategy of diversifying products, to create more choices for

customers, PM Coffee has released coffee, milk tea, fruit tea, and dessert Besides, the above products all ensure food hygiene and safety, suitable for daily consumption To avoid confusing customers, we specially train knowledgeable cashiers to advise customers on the right products for their needs when choosing

PM Coffee offers a variety of drinks and cakes, with different prices to suit the needs of many customers However, most still fluctuate at a level enough for students

to pay:

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tea

milk tea

tea

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Through searching and consulting with friends and other coffee shops, we have selected a few ingredient suppliers for PM Coffee:

a) For coffee products: We choose supplier Trung Nguyen Coffee

Trung Nguyen is the largest coffee brand in Vietnam With more than 25 years

of experience, Trung Nguyen has developed a chain of large and famous coffee shops

in Vietnam and some other countries around the world So, the quality of the coffee ingredients is not in dispute The process of picking 100% fully ripe coffee by hand, natural fermentation with strict brewing conditions, international standard roasting, testing, and tasting in batches to ensure the best quality products reach people for consumption in addition, the source of premium, carefully selected coffee materials, ingenious mixing recipes, and modern production technology have brought quality and prestige to Trung Nguyen for more than 25 years Trung Nguyen Coffee has become one of the coffee suppliers for PM Coffee We guarantee that each cup of coffee delivered to our customers will be made from delicious coffee beans The types of Trung Nguyen coffee that PM Coffee imports are:

¢ Whole-roasted Trung Nguyen coffee

¢ Whole bean Trung Nguyen coffee

b) For fruit tea and milk tea products: We choose supplier Chinh Son Tea company

¢ Organic: all virgin areas selected by Chinh Son must be cultivated with 100% organic technology

¢ Environment: Chinh Son understands that for sustainable development, it

is necessary to protect the environment for the social community

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® Safety: All products of Chinh Son are only put on the market when they have been censored for the absolute health and safety of users

Currently, PM Coffe is importing the following items:

® Japanese tea: modern tea, suitable for office workers, students, and students

® Tea cakes, tea ice cream products with modern Japanese style

¢ Basic types of tea such as oolong tea, green tea, lotus tea, and jasmine tea

c) For dessert: We choose supplier ABC Cake Company

Today, ABC Bakery has more than 30 stores not only in Ho Chi Minh City but also expanding to other provinces such as Dong Nai, Binh Duong, Tien Giang, Not only that, but ABC bakery is also gradually asserting and identifying itself with the Southeast Asian market with the initial presence of a branch in Cambodia

As a brand known for its quality and delicious products from bread, cakes, cakes to other products, ABC Bakery always has a wide variety of items at reasonable prices Maintaining the tradition of product quality, besides constantly improving methods, and applying advanced techniques, ABC Bakery always wishes to develop

to meet more and more increasing demands of consumers

Some products at ABC ensure all 3 criteria: no refined sugar, no preservatives, and no food additives So, customers can feel secure when experiencing PM Coffee's pastry products without worrying about the price and quality of the cakes

4.2.3 SWOT evaluation and competitiveness of PM COFFEE

a) The market overview

The most common option for both men and women when finding thr locations for leisure, studying, and working among young people is a coffee shop One of the reasons is Vietnamese typically drink coffee According to the International Coffee

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Organization (ICO), Vietnam is a second-world coffee exporter, accounting for about 10% of the export turnover of the country

In addition, coffee symbolizes both a distinct culture and the normal way of life

of Vietnamese people Consequently, the coffee market is a challenging but lucrative one for startups

- Besides that, prices of goods are in line with students’ abilities, and several student-specific discounted schemes are available

- Having a reliable source of food and drink on the market, so people don't have

to be concerned about the product's quality or the labor used to manufacture the products

- Students can reserve rooms to study more privately in groups You will receive

a 10% discount, making PM Coffee unique and more alluring than other coffee shops, especially when making reservations and making full purchases in groups of more than

5 persons

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Weaknesses

- Human resources in the service industry are not few, but experienced, skilled, and high-quality human resources are not many Most of the staff working at the cafe are students, students, and young people in general Although they are dynamic, flexible and have enthusiastic friends, they have not been trained much The selection and training of human resources are one of the difficulties when opening a cafe that you need to face

- Opening a cafe is more expensive because the raw materials of coffee beans also have a higher price than other drink ingredients, especially roasted coffee This is considered a big difficulty when opening a cafe that PM Coffee needs to face, calculate it reasonably

Opportunities

- Products will easily appeal to tastes with a varied and well-researched menu

- Concentrate on the caliber of the food and drink Additionally, by continually attending to customer needs, businesses will have the chance to draw in new clients

- Few cafes on the market provide bookable rooms for conferences and study groups, thus PM Coffee's investment in bookable rooms will set it apart from the competition, especially when PM Coffee seeks out young people who come to the area

to study, work, and communicate with each other

Threats

- When growing the market, one factor that must be considered 1s the price of food and beverages In Kim Son residential area, there are many cheap coffee shops for students and have been open for a long time such as Ong Bau, Open Glass, Lalo Therefore, the competitions of PM Coffee is extremely huge

- Coffee is a popular drink but difficult to please people Although coffee is a popular drink, it is difficult to prepare and has the most diverse flavors Just change a little of the ingredients, a little bit of quantity or the coffee beans are not ripe, the coffee is not roasted properly, and the taste of the coffee cup has also changed Each

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