"the project feasibilty study and evaluation . aj. chaiyawat thongintr. mae fah luang university...

8/14/2019 "The Project feasibilty Study and Evaluation . Aj. chaiyawat Thongintr. Mae Fah Luang University (MFU) 2010." Namaaria

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Ms. Pattamaporn Phutsadee

Financial ManagerMr. Jackhapong Jinasawat

General Manager

Namaaria Company

Mr. Kanchanok Toodang

Marketin Assistant

Ms. Somrutai Mahakkaphan

Sales Mana er

Mr. Natchapon Kitudom

General Mana er

Mr. Patiphat

Assistant M


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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 were 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 toperform 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

17 24

Nov 2009

- Planning strategic competitive

- Planning strategic market

- Planning to conduct people in the group toperform in each sector of task

-

25 30

Nov 2009

- Selection the best alternative of strategy

- Distribution of tasks to each department

- Setting specific time for conductingbusiness

- Some strategies arecomplicate

1 8

Dec 2009

- Conclusion before conducting business

- Solving the appeared problems -

9 Dec 2009

25 Jan 2010- Conducting

- Customers dontwant to drink coffeedue to recession.

- We also serve tocustomer notactively


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10 16

Feb 2010

- Planning to expand the branch of thecompany -

Plan to perform this project in 7-8 weeks

26 Jan 2010

-

2 Feb 2010

- Analyzing appeared events or problemsduring conducting business

- Find solution to solve the problem-

3 9

Feb 2010

- Planning to improve and develop thestrategies.

- The company wantto expand branch

- No more market to

perform


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Gantt chart

November December January

Designations week 1

week 2

week 3

week 4

week 1

week 2

week 3

week 4

week 1

week 2

week 3

week 4

Planning strategicDistribution of tasks to each departmentDefine the business opportunitiesConclusion before conducting businessStudy to conducting

Analyzing appeared events or problems duringconducting businessPlanning to improve and develop the strategiesPlanning to possible expand the branch of the

companyPrepare 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 6 th

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 9 th 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 its 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 turnaroundand, 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 tokeep 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 asour slogan Banrie Thai Style.

In Chaing Rai have many coffee shops such as Shong Caf 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 caf and

Wawee coffee locate on muang Chiang Rai. So Shong Caf 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, andthey 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 throughthe 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. Michelangelos 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. Atthe 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 caf,

reading zone, music zone and meeting zone.


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Vision of our organization

Vision of our organization is bringing Thais 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. Well 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

- Well train them to be the best server to service the customers but well not change their

mine


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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 cant 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 its 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 ascomputer. 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 doesnt 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 dont 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 knowtheir 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 businesswhere 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 didnt say that low price withless 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 caf 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 lets 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 its end of semester and have few customer together.

Year 1 Month Sales

1 65,8802 63,6603 71,7004 62,5805 78,4206 67,9507 83,6108 89,7609 82,140

10 81,06011 86,16012 100,080


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Year 2Month Sales

1 99,9302 89,490

3 89,6104 89,9405 82,9206 84,6007 88,4008 83,4009 80,670

10 80,580

11 93,96012 105,450

Year 3Month Sales

1 103,650

2 87,4803 93,8404 93,5105 92,6106 92,2807 91,4108 87,0609 86,820

10 91,89011 99,06012 103,800


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Year 4Month Sales

1 105,6602 99,510

3 98,2504 100,1405 99,0006 97,0207 98,1908 95,1309 95,460

10 87,960

11 109,50012 112,950

Year 5

Month Sales1 110,4002 100,0503 95,7004 100,0505 98,5806 97,8307 100,3808 98,730

9 98,16010 89,76011 113,91012 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 dont know about our shop and this time we try to promote our

shop to customer. As third quarter, we have increase profit because many peoplebegin 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 its 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 1Month Income

1 7,5602 9,0303 13,7404 8,6405 17,070

6 11,7907 21,0308 24,8409 20,310

10 16,87011 22,14012 29,820


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Year 2Month Income

1 30,4802 25,0803 23,4004 21,9305 18,8706 19,7707 23,4208 20,9409 20,640

10 16,900

11 26,91012 33,930

Year 3

Month Income1 31,5302 23,5203 25,3204 22,6805 22,5306 20,8507 23,7008 21,2409 22,350

10 22,63011 30,18012 23,590


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Year 4Month Income

1 32,9702 29,160

3 27,4804 25,3205 25,1406 24,6907 21,6808 23,7009 25,380

10 19,30011 34,29012 33,920

Year 5 Month Income

1 35,7602 28,8303 26,3704 23,5805 24,9606 25,2007 22,3108 25,3509 25,830

10 19,600

11 36,72012 37,520


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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 thisbecause 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 1Month Sales

1 3,0002 -3 -4 -5 -6 -

7 -8 -9 -

10 2,00011 -12 -


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Year 2Month Sales

1 -2 -

3 -4 -5 -6 -7 -8 -9 -

10 2,000

11 -12 -

Year 3Month Sales

1 -2 -3 -4 -5 -6 -7 -8 -9 -

10 2,000

11 -12 4,000


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Year 4Month Sales

1 -

2 -

3 -4 -

5 -

6 -

7 -

8 -

9 -

10 2,000

11-

12 2,000

Year 5Month Sales

1 -

2 -

3 -

4 -

5 -

6 -

7 -

8 -

9 -

10 2,000

11 -12 2,000


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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


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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


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


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Fourth Year

Cost of


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 / Month43,890 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


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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 cant 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


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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 wont 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 caf, reading zone, music zoneand 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.


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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 ManagementIn 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


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Investment Cost

Buildings Environment structure 85,000 Baht Structure 200,000 Baht

Built in 130,000 Baht

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


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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


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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 (Hersheys) 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


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Conclusion

Our products dont 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.


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Chapter 5: Financial Analysis

Income Statement


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Income statement 4th yearJan Feb March April May June July Aug S

venues 105,660 99,510 98,250 100,140 99,000 97,020 98,190 95,130 95,46st of Revenues 43,890 41,550 41,970 46,020 45,060 43,530 43710 42,630 41,280oss profit 61,770 57,960 56,280 54,120 53,940 53,490 54,480 52,500 54,18penseelling expense - - - - - - 4,000 - dministrative 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,80t income(loss) 32,970 29,160 27,480 25,320 25,140 24,690 21,680 23,700 25,380

Income statement 5th yearJan Feb March April May June July Aug S

venues 110,400 100,050 95,700 100,050 98,580 97,830 100,380 98,730 98,160st of Revenues 45,840 42,420 40,530 47,670 44820 43,830 45270 44,580 43,53

oss profit 64,560 57,630 55,170 52,380 53,760 54,000 55,110 54,150 54,63penseelling expense - - - - - - 4,000 - dministrative 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,80t income(loss) 35,760 28,830 26,370 23,580 24,960 25,200 22,310 25,350 25,830


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Cash Flow


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

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

Cash flow from investingBuilding - - - - - Equipments - - - - - Tools - - - - - Total cash flow from

investing- - - - -

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

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


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2nd year

Jan Feb March April May Cash Be. Balance 402,006 424,251 443,500 463,473 48

Cash flow from operatingnet income(loss) 30,480 25,080 23,400 21,930 18Depreciation 28,848 31,252 33,656 36,060 38pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12,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 4

Cash flow from investingBuilding - - - - Equipments - - - - Tools - - - - Total cash flow from investing - - - -

cash flow from financingBorrowingInterest - 2,644 - 2,588 - 2,532 - 2,476 - 2Repayment - 22,356 - 22,412 - 22,468 - 22,524 - 22Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - 2Change in cash 22,245 19,249 19,973 20,907

Net cash flow 424,251 443,500 463,473 484,380 50


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2nd year(Cont.)

July Aug Sep Oct NoCash Be. Balance 528,186 557,795 587,328 618,965 64

Cash flow from operatingnet income(loss) 23,420 20,940 20,640 16,900 2Depreciation 43,272 45,676 48,080 50,484 5pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12change in inventory - - - 1,500 500 change in account payable - - 1,500 - 500 - Total cash flow from operating 54,609 54,533 56,637 55,301

Cash flow from investingBuilding - - - - Equipments - - - - Tools - - - - Total cash flow from

investing- - - -

Cash flow from financingBorrowingInterest - 2,307 - 2,250 - 2,193 - 2,136 - Repayment - 22,693 - 22,750 - 22,807 - 22,864 - 2Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - Change in cash 29,609 29,533 31,637 30,301

Net cash flow 557,795 587,328 618,965 649,266 69


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3rd year

Jan Feb March April May Cash Be. Balance 744,120 793,859 837,992 886,329 93

Cash flow from operatingnet income(loss) 31,530 23,520 25,320 22,680 2Depreciation 55,292 57,696 60,100 62,504 6pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12change in inventory 6,500 - 1,500 - - change in account payable - 6,500 1,500 - - - 3Total cash flow from operating 74,739 69,133 73,337 73,101

Cash flow frominvestingBuilding - - - - Equipments - - - - Tools - - - - Total cash flow from investing - - - -

cash flow from financingBorrowingInterest - 1,964 - 1,907 - 1,849 - 1,791 - Repayment - 23,036 - 23,093 - 23,151 - 23,209 - 2Total cash flow from

financing - 25,000 - 25,000 - 25,000 - 25,000 - Change in cash 49,739 44,133 48,337 48,101

Net cash flow 793,859 837,992 886,329 934,430 98


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3rd year(Cont.)

July Aug Sep Oct NoCash Be. Balance 1,035,864 1,092,197 1,148,474 1,208,265 1,27

Cash flow from operatingnet income(loss) 23,700 21,240 22,350 22,630 3Depreciation 69,716 72,120 74,524 76,928 7pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12change in inventory - - - - - change in account payable - - - - Total cash flow from operating 81,333 81,277 84,791 87,475

Cash flow from investing

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

cash flow from financingBorrowingInterest - 1,617 - 1,558 - 1,500 - 1,441 - Repayment - 23,383 - 23,442 - 23,500 - 23,559 - 2Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - Change in cash 56,333 56,277 59,791 62,475

Net cash flow 1,092,197 1,148,474 1,208,265 1,270,740 1,34


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4th year

Jan Feb March April May Cash Be. Balance 1,411,412 1,489,035 1,565,252 1,642,193 1,719

Cash flow from operatingnet income(loss) 32,970 29,160 27,480 25,320 2Depreciation 81,736 84,140 86,544 88,948 9pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12change 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 10

Cash flow from investingBuilding - - - - Equipments - - - - Tools - - - - Total cash flow from investing - - - -

cash flow from financingBorrowingInterest - 1,264 - 1,204 - 1,145 - 1,085 - Repayment - 23,736 - 23,796 - 23,855 - 23,915 - 2Total cash flow from

financing - 25,000 - 25,000 - 25,000 - 25,000 - Change in cash 77,623 76,217 76,941 77,185

Net cash flow 1,489,035 1,565,252 1,642,193 1,719,378 1,79


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4th year(Cont.)

July Aug Sep Oct NovCash Be. Balance 1,880,150 1,960,907 2,046,088 2,135,353 2,22

Cash flow from operatingnet income(loss) 21,680 23,700 25,380 19,300 34Depreciation 96,160 98,564 100,968 103,372 105pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12change in inventory - 200 - 500 1,000 change in account payable 200 - - 500 - 1,000 - 1Total cash flow from operating 105,757 110,181 114,265 110,589 12



cash flow from financingBorrowingInterest - 905 - 845 - 785 - 724 - Repayment - 24,095 - 24,155 - 24,215 - 24,276 - 24Total cash flow from financing - 25,000 - 25,000 - 25,000 - 25,000 - 2Change in cash 80,757 85,181 89,265 85,589 1

Net cash flow 1,960,907 2,046,088 2,135,353 2,220,942 2,32


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5th year

Jan Feb March April May Cash Be. Balance 2,428,942 2,535,799 2,638,130 2,740,405 2,84

Cash flow from operatingnet income(loss) 35,760 28,830 26,370 23,580 2Depreciation 108,180 110,584 112,988 115,392 117pre-operating cost - 12,083 - 12,083 - 12,083 - 12,083 - 12change in inventory - 2,000 - - - change in account payable 2,000 - - - Total cash flow from operating 131,857 127,331 127,275 126,889 13



cash flow from financingBorrowingInterest - 542 - 481 - 419 - 358 - Repayment - 24,458 - 24,519 - 24,581 - 24,642 - 2Total cash flow from

financing- 25,000 - 25,000 - 25,000 - 25,000 -

Change in cash 106,857 102,331 102,275 101,889 10

Net cash flow 2,535,799 2,638,130 2,740,405 2,842,294 2,94


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5th year(Cont.)

July Aug Sep Oct Nov Cash Be. Balance 3,056,284 3,189,115 3,327,390 3,468,549 3,605,882

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


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

cash flow from financingBorrowingInterest - 173 - 111 - 62 - 14 - Repayment - 24,827 - 19,318 - 19,318 - 5,571 - Total cash flow from

financing - 25,000 - 19,429 - 19,380 - 5,585 - Change in cash 132,831 138,275 141,159 137,333 156,857

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


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Balance Sheet


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LiabilitiesAccount payable 13,500 14,500 13,500 13,500 13,500

Note payable 1,300,000 1,278,250 1,256,446 1,234,587 1,212,673Equity

owner capital 140,477 136,578 139,847 140,475 151,992Total L&E 1,453,977 1,429,328 1,409,793 1,388,562 1,378,165


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LiabilitiesAccount payable 14,500 14,500 13,500 13,500 13,5Note payable 1,168,682 1,146,603 1,124,470 1,102,281 1,080,0Equityowner capital 181,081 207,745 232,337 255,949 287,2Total L&E 1,364,263 1,368,848 1,370,307 1,371,730 1,380,8


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LiabilitiesAccount payable 17,500 13,500 13,500 13,500 13,5note payable 1,035,381 1,012,970 990,502 967,978 945,3Equityowner capital 373,372 412,628 452,665 493,692 534,1Total L&E 1,426,253 1,439,098 1,456,667 1,475,170 1,493,0


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LiabilitiesAccount payable 13,500 13,500 15,000 14,500 12,Note payable 900,069 877,319 854,512 831,648 808,7Equityowner capital 627,804 677,683 729,723 780,484 843,7

Total L&E 1,541,373 1,568,502 1,599,235 1,626,632 1,664,9


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LiabilitiesAccount payable 13,500 15,000 15,000 15,000 11,5Note payable 762,714 739,620 716,470 693,261 669,9Equityowner capital 986,799 1,051,622 1,120,705 1,189,611 1,260,8Total L&E 1,763,013 1,806,242 1,852,175 1,897,872 1,942,3


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LiabilitiesAccount payable 11,500 11,500 11,500 11,000 13,0Note payable 623,286 599,844 576,343 552,784 529,1Equityowner capital 1,410,141 1,487,456 1,658,344 1,651,974 1,745,6

Total L&E 2,044,927 2,098,800 2,246,187 2,215,758 2,287,7


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LiabilitiesAccount payable 14,900 14,700 14,900 14,900 14,9Note payable 481,753 457,957 434,102 410,187 386,2Equityowner capital 1,934,288 2,031,897 2,130,289 2,128,985 2,329,9Total L&E 2,430,941 2,504,554 2,579,291 2,554,072 2,731,0


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LiabilitiesAccount payable 15,200 15,200 14,700 13,700 15,

Note payable 338,084 313,929 289,714 265,438 241,1Equityowner capital 2,535,405 2,642,537 2,753,413 2,860,874 2,985,7Total L&E 2,888,689 2,971,666 3,057,827 3,140,012 3,242,0


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LiabilitiesAccount payable 17,200 17,200 17,200 17,500 17,Note payable 44,207 24,889 5,571 - Equityowner capital 4,028,642 4,183,831 4,341,904 4,482,704 4,636,6Total L&E 4,090,049 4,225,920 4,364,675 4,500,204 4,653,8


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Payback Period

YEAR1 202,840

YEAR2 282,270 485,110YEAR3 290,120 775,230YEAR4 323,030 1,098,260YEAR5 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 Caf 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 cant 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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(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 didnt say that low price with

less quality.

Were 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 knowthe feasibility of business so far.

Coffee shop is the meeting and relaxing restaurant of every age from teenage to olderbecause time of relax is time of drink such sleeping time. Coffee shop also provide food anddessert to eat with beverage to give you enjoy your free time with smooth taste of dessert anddelicious 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 weconfirm 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 6 th around 575 BC. The Arabian called the coffee

plant Kawah or Kaweh its 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 Thais 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 li

"the project feasibilty study and evaluation . aj. chaiyawat thongintr. mae fah luang university...

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