COFFEEHOUSE PLAN COFFEEHOUSE PLAN What is the goal of tonight? - - PowerPoint PPT Presentation

COFFEEHOUSE PLAN COFFEEHOUSE PLAN

What is the goal of tonight?

• Provide you with more information

more information regarding the coffee house.

• Allow you to ask questions

ask questions at the end.

• So that you can make informed

decision September 7th.

Why a coffeehouse?

• The most effective method to

reach “un-churched people un-churched people” is starting new churches and new ministries.

• This coffeehouse is a creative

church plant.

• The business end is really a

means to fund the ministry.

Why a coffeehouse?

• To reach college students and the

community where they are.

• To win people for Jesus Christ
• ne cup of coffee at a time.
• We want to “go” where the fish

are and create a place they will be.

What would it look like?

• A place where college students and

community members would love to hang out, visit, dialogue, connect.

• It would have free wifi, different

seating options, a place for groups to meet to be utilized for meetings, Bible studies, and church services.

What would it look like?

• A place where college students and

community members would love to hang out, visit, dialogue, connect.

• It would have free wifi, different

seating options, a place for groups to meet to be utilized for meetings, Bible studies, and church services.

What would it look like?

• All profits would go back into the

community for missions as well as global missions.

• Each month might have a theme

for missions.

• The ministry would be done by

pastors and lay people who would utilize it for ministry.

What would it look like?

• The church would not make

money off of the coffee shop.

• We essentially would be daily

creating possibilities and possibilities and

• pportunities for ministry
• pportunities for ministry to

take place both by pastors and laymen.

Would the church go back in Would the church go back in debt? debt?

• The church has no plans to take
• ut loans to purchase the lot or to

build coffeehouse.

• We would raise the money

through church funding, grants, possible outside funding.

• Our plans would be to open

doors debt free.

What would it cost?

• Lot would be $154,000. ($40k given)

$114k left.

• Building would need be drawn up by

architect, but would be approximately 350,000 to 400,000.

• Total project could be $500-650K

depending on materials etc. Could be more or less.

Something to consider…

If we were building a new sanctuary If we were building a new sanctuary we would spend much more than we would spend much more than that and we wouldn’t think much that and we wouldn’t think much about it. But, because it is off-site about it. But, because it is off-site and a creative approach we might and a creative approach we might have some hesitation. have some hesitation.

Shouldn’t we build here first?

• We can go to three services and

that would add another 300 seats.

• We also want to stay mission

focused and this would put the community first.

• By doing so it keeps us focused
• n others rather than on us.

Shouldn’t we build here first?

• Also, this project could drastically

affect building plans here.

• We want to put a net in the water

in another location.

What will we be voting on?

• To “raise funds

raise funds” to purchase lot over by college on rouse street.

• This vote does not guarantee

does not guarantee lot.

• It allows us to pursue raising of

raising of funds funds for lot.

• The vote does not include a

does not include a building plan building plan. That would come later.

Strategy & Planning Session

(Nazarene Church Coffee House)

October 2013 Document for Feb 2014 Church Board Meeting

Prepared by:

Randy Robinson

Business Consultant

(620)687-5340 Randy66762@gmail.com

17

Report Outline

Page #

• Project Overview

3

• Recap Summary of Top 3 Items

4

• Review of Items

5-21

• Appendix:

– Additional Marketing & Sales Tips 22-29 – CoffeeStats 30-31

– Church Board Questions 32

18

Project Overview

• A Start-up Strategy & Planning meeting was conducted on October 1, 2013

by Randy Robinson, Consultant, for First Church of the Nazarene in Pittsburg, KS.

• The Goal of the half day meeting was to discuss the possible opening of a

Coffee House for College Student Outreach.

• The observations/recommendations from this half day meeting are on the

following pages.

19

Project Overview

• A Start-up Strategy & Planning meeting was conducted on October 1, 2013

by Randy Robinson, Consultant, for First Church of the Nazarene in Pittsburg, KS.

• The Goal of the half day meeting was to discuss the possible opening of a

Coffee House for College Student Outreach.

• The observations/recommendations from this half day meeting are on the

following pages.

20

Recap Summary

(Nazarene Church CoffeeHouse )

• Ultimate Objective:

– Lay foundation for a satellite worship service location for College Students.

• Self Sustaining profit wise & Attractive to Students
• Location Preferences:

– Walkable from PSU campus (via current sidewalk or possible future sidewalk)

• Within geographic borders of Rouse, Broadway, Centennial & Quincy streets

– Located on busy traffic route to catch non-student traffic for sustainability

• Rank Order: #1 Rouse, #2 Broadway, #3 Centennial, #4 Joplin or Quincy

– Lot big enough for Drive-thru & parking

• Building Preferences:

– Indoor:

• Front “coffee shop” area approx. size of Pittsburg Starbucks

– Key Feature: easy internal workflow drive thru window required

• Back “meeting room/lounge room” area big enough for 2 adjacent rooms with a

removable wall between that when removed would hold 100 people for special events/future worship services. (100 people could be mixture of row seating/table seating/counter bar standing – doesn’t have to be dedicated restaurant seating)

– Outdoor:

• Courtyard type area for outdoor dining w/ 4-5 tables w/ umbrellas (ala Starbucks)

– Parking: check city requirements & possible adjacent unused parking lots

21

What do you want from this effort?

(Measures of Success) Nazarene Church:

• Plant a satellite Church for College Students

– Size: 30 to start service, with goal to approach 100 students – Timing: Within 2 yrs of opening (Bible Study feeder in interim)

• Self Sustainable

– Profit: Breakeven (expect profitability during semesters/loss during breaks) – Timing: Ongoing Breakeven within 12 months (expect 9 months)

22

Ownership Structure

• 3rd Party LLC entity to ensure it’s run profitably like a business

– Profits: All profits, after maintenance reserves set aside, donated back to Nazarene Church?

• Timing of any Profit Donation

– Monthly, Qtrly, last day of Tax period?

– Losses: All losses, after reserves within LLC are depleted, will be contributed into the LLC from the Nazarene Church

• Timing of any Loss contributions back into the business:

– Monthly (or as needed in case of emergency)

– LLC Board: 5? member Board comprised of Harvey Dean, Nazarene Church Reps (2-3?), other community influencers/business minded individual(s)

• Timing of Board Meetings:

– Monthly (weekly for first 6 weeks, every 2 weeks for weeks 7-12, monthly for weeks 13+)

• Thoughts?

23

What is going to deliver those results?

• Coffee House Offerings

– Gourmet Coffee (37% of all coffee consumed in U.S. is Gourmet)

• hottest beverage category, replacing soda & energy drinks for college kids

– 40% of 18-24 yr olds drink coffee daily (2012) up from 31% in 2010 – 54% of 25-39 yr olds drink coffee daily (2012) up from 44% in 2010 – 75% of U.S. adults drink coffee, with 58% drinking it daily – Avg cups per drinker is 2.5 cups daily

• Requirement: Premium Coffee Supplier (ala The Roasterie, KC known)

– Gourmet Tea

• can represent 10% of business, also growing category (174m daily tea

drinkers vs 183m coffee drinkers – coffee has just exploited and innovated more than tea recently) (Supplier: The Roasterie or other premium supplier)

– Food

• 20% of Starbucks Revenue is from Food (the trick is to be able to do it

quickly, simply, profitably – Starbucks microwaves their pre-made & shipped pannini’s!)

• Current Thoughts:

– Bagel sandwiches & bagels with toppings (smears) to address Breakfast, Lunch, Dinner, Snack times (possible Einstein Bros Bagels as supplier – KC known) – Pre-Packaged Re-Sale Offerings: Biscotti, Scones, Cookies, Chips, Mints

24

What is going to deliver those results?

(Continued)

• Coffee House Offerings

– Drive Thru is key

• up to 60% of Revenue can come via Drive Thru
• Key item of note: make sure it’s integrated well with inside work flow so

front counter can handle both if needed, don’t want it too far removed from front equipment and counter

– Meeting Rooms

• Nice meeting room for College Groups or Business/Community Groups to

meet (& eat/drink)

• Use fee (waived if certain $$ amount in goods purchased)?
• Gets people in the door that may not have come in otherwise

– Special Events

• Pre-Launch Events

– Free Tastings for targeted key influencer groups & neighbors for goodwill – Social Media (Facebook shares/likes via NazChurch Members, Targeted influencer groups; etc)

• Opening Week Events

– Free Tastings during anticipated slow times; pre-punched reward card for free drink to get customers used to using the card; Radio Remotes; Collegio story; Morning Sun Patrick’s people story (free); Local TV news story; etc

25

What is going to deliver those results?

(Continued)

• Coffee House Offerings

– Special Events (continued)

• On-Going Events

– Periodic Free Tastings (monthly?) – “Open All Night Finals Week” Nights – Bible Study Groups – Campus Group meetings (Greeks, MBA Association, etc) – FCA meetings? – Boy Scout/Girl Scout Meetings (while parents relax/drink coffee) – Chamber of Commerce Coffees – Community Civic Group meetings (Rotary, etc) – Special Concerts/Open Mic Nights/Comedy Nights, etc (indoor or out under tent) – Slow Time Promotions: Half Priced drinks after 8pm or Tuesday after 5pm or daily “Energy Hour” (or traditional Happy Hour), etc.

– Hours of Operation

• Mirror Starbucks DriveThru. Daily (including Sunday’s, otherwise customers

go to competitors & may not come back); Extended Hours during Finals Week and other special Campus events.

– Anything Else?

• Laundry Mat idea: Not now, but revisit after 1st year if lot size allows

(otherwise distraction of starting 2 separate businesses could overwhelm)

26

CoffeeHouse New Product Opportunity Assessment Criteria Go/No-Go Signals vs Current Surrogates – Each needs confirmed

• 1. Functionality (includes Ease of Use)
• 2. Price
• 3. Other Criteria (includes Distribution Network,

Brand/Customer Base, Company Synergies, etc)

Red: Lacks something Meaningful Yellow: Same Relative Functionality Green: Meaningfully Better Functionality Red: Higher Price Yellow: Same Relative Price (within 10%) Green: Sustainable Lower Price Red: Competitor has Significant Advantage Yellow: No Real Advantage, although competitor has headstart Green: Significantly Superior Unfair Advantage

• 4. Recommendation (the below table outlines the

recommendation for each assessment configuration)

Assessment

• 1. Functionality
• 2. Price
• 3. Other Criteria

Definite GO! Green Green Yellow/Green Weak GO Weak NO Definite NO! No Reds, at least 1 Green All Yellows No Greens, at least 1 Red

New Product Idea Evaluation Depends on Location & DriveThru & Hours

27

CoffeeHouse Evaluation Detail

• Product Functionality – Superior Difference?

– Score: Yellow

• Starbucks drive-thru & 2 campus locations & new CoffeeHouse opening in Mall causes

this to be a yellow – as gourmet coffee options are available

• Price – Indifferent?

– Score: Yellow

• Price will most likely be within 10% of Starbuck offerings & unknown vs soon to be
• pened Mall Coffeehouse.
• Recommendation: may be able to get by with charging same price as Starbucks,

although a 5-10% discount could allow people another reason to not go to Starbucks

• Other – Location/DriveThru/Hours of Operation?

– Score: Yellow, possible Green

• Location: Possible green if location is Campus walking friendly & located on Rouse to

intercept S.Pittsburg traffic going to Starbucks.

• DriveThru: DriveThru on South side of town will give a green advantage vs Starbucks

Campus locations & Mall CoffeeHouse for superior convenience

• Hours of Operation: Open on Weekends & Extended Finals Week hours will be green

vs Campus Starbucks & slightly green vs Mall CoffeeHouse

• Overall Score Result: Possible Weak Go

– From a pure profit return perspective, this would be a weak go with good location & DriveThru. However, given breakeven sustainability & student outreach is the goal, this would be a stronger green for this project.

New Product Idea Evaluation

28

Know yourself

Companies need to know if they are

• Product Leaders

– Isn’t the product great, I don’t have time to help you figure it out (Starbucks own coffee language for sizes, etc)

• Price Leaders

– Best Price going for what we offer, flexibility would cost more (McDonald’s McCafe Coffee offerings)

• Customer Intimate/Easy to Do Business With

– We help you find the best solution to your need

• Nazarene Church is here (convenience to Campus, drive-thru, meeting space, loyalty

card, finals week extended hours, helpful education around coffee/teas via website, facebook, coffee tastings, menu board (ala chipotle with this means this, etc), affordable food/snacks)

• Jack of all Trades/master of none – Dabblers in all the above

– Companies can survive as a Jack of all Trades, as long as all other competitors are also jack of all trades, once competitors focus on each of the 3, Jack is doomed!

29

Positioning

• What Nazarene Church Coffee Shop is:

– Hip, Friendly, relaxing, low stress meeting place – Good Drinks/Good Food – Informational (about Coffees & about Happenings in Pittsburg & surrounding communities) – Clean

• What Nazarene Church Coffee Shop is NOT:

– Bar that serves alcohol – Coffee Snobs (although the product does qualify) – Preachy/overly Bibley (although there is Ministry outreach in meeting rooms) – Just for College kids

30

Name

• 2-3 Syllables is best (otherwise it is abbreviated or forgotten)
• Theme? (PSU or Nazarene Church Tie-in?)

– Pitt Theme

• Perk Pitt

Coffee Pitt Jungle Coffee Jungle Perk

• Campus Coffee

Java Pitt Gorilla Joe ?

– Religious Tie-in

• Nazbucks

Holy Perk ?

– Other

• Planet Coffee/Planet Joe (KC Students know Planet Sub as good quality food)
• KC Coffee (aspirational brand name for students via large city plus homage

to Roasterie based in KC)

• 3 Name Finalists from meeting:

– Java Pitt (homage to coffee & PSU) – KC Coffee (Big City aspirational; home comfort for KC kids; many tie-in

• pptys with Roasterie, possible activity ticket hub for KC events in

addition to Pittsburg & surrounding communities)

– Planet Joe (a little funkier & fun name, planet sub equity for KC area students)

• Recent Entries via PSU Design Class: Mugs or Beans

31

Logo

• Logo

– Naz tie-in subtle (yes or no): No – KC Coffee: KC circle logo with Roasterie Coffee & Einstein Bros Bagels signage (borrow premium brand halos w/ KC students) – Planet Joe: Globe Circle with coffee cup – Java Pitt: – Logo stills need work once name is decided upon

32

Documentation

(Document your processes – separate ½ day for each of these)

• Financial process

– from daily countdown of registers to annual filing of taxes

• Marketing Process

– Who to market to, how/what to market to them, when market to them, review what’s working & what’s not & why.

• Sales Process

– Do you want Fries with that type approach before order (would you like to try

• ur “?” today & after order (would you like any “?” with that), etc.
• Production & Quality Manual

– How to make each item on menu (quick tabs for Coffees/Teas/Food) & speak to what to do if something goes wrong (fix or discard, safety)

• New Product development Plan

– List what steps to undertake when thinking about adding (& even deleting) something from the menu (don’t overlook inventory complexity, prep complexity

• r altering price as important factors for successes/failures)
• Inventory/Order Process (projecting needs & when to re-order or promote)
• Employee manual

– Timeline of what an employee needs from applying for a job to termination (including timeline of activities during typical workday (work, breaks, sweeping, mopping, cleaning bathrooms, locking up, etc.) & Emergencies

33

Compulsories

• Initial Employee Hires

– Look for experience (possibly hire Campus Starbucks ones for Weekend shifts since already trained & Campus ones aren’t open on weekends. – Be willing to pay a little more to get the experience – it will pay off in better employee retention (less training expense) & better quality product (better return customer $$’s)

• Bookkeeping

– Could split off-site since Ft.Scott struggles with this with their employee hires (easier to off-site than find barista bookkeeper)

• Equipment

– Don’t overlook Craigs List for relatively brand new equipment at a discount due to store closings, etc

34

Know your Audience

Before any Marketing/Sales Effort, ask:

• Who’s the Target Customer
• What are my Customers Problems &
• How does my Product solve those problems better
• Who’s the Decision Maker that you are talking to and what is their

motivation that should be messaged to (Owner, Purch.mgr, end user,

etc)

– Ego (you deserve it) – Fear (you need it) or – Greed (What a great deal!)

35

Messaging

(Materials or in-person)

• Specific to Nazarene Church CoffeeShop
• Ego
• KC (aspirational city) or PSU (school) Tie-in
• Charitable give back via Naz
• Roasterie scores higher than Starbucks in taste competitions
• Fear
• Free Samples before you order (ala Baskin Robbins)
• Free Tastings periodically (try before you buy)
• Greed
• Better quality, lower price vs Starbucks
• Convenient for time proximity vs Starbucks (drive thru req’d)
• FREE Tastings periodically

36

Competitive Assessment

(Visit these competitors to view operations)

• Competitors

– Starbucks (North Pittsburg Location) – Signet Coffee Roaster (Broadway) – Ron’s Supermarket – New Mall CoffeeHouse – PSU Campus (Axe Grind & Jazzman’s) serving Starbucks

• Hours: M-Th: 7:30am-8pm; Fri: 7:30am-5pm
• Most Popular PSU drinks: Caramel Lattes/White Chocolate Mochas

– Special mention of Caramel Delight for sweet tooth customers

• Prices: roughly $2 for Plain, $3 for Latte/Cappucino & $3.99 Mocha

– Bonus: Roasterie in KC for a Saturday tour (9am, 10am, 11am, noon)

• Items to Review: Worker Attire, Seating, Signage, Prices, Offerings

(Drink & Food), Taste, Music

37

Appendix

• Additional Information to consider
• Coffee Industry Stats
• Board Questions

38

Marketing Strategy

(Simplified Basics)

• Document why the current customers are customers
• Find Similar Customers
• Build/refine marketing strategy to deliver what those

customers need (be careful not to confuse need with want)

• Deliver

If I would have asked my customers what they wanted, they would have said “faster horses” – Henry Ford

39

Marketing Overview

(Sometimes firms jump to execution of activities before they have a sound plan & that just wastes their money & time!

Typical Marketing Activities

Brochures and Print Collateral Websites Mailings Publicity Advertising Programs Branding Programs Trade Shows / Booths Telemarketing Merchandising Materials & Programs Market Research

Foundation Elements typically

• verlooked
• Sound Market Strategy formulation
• Business Development Initiatives
• Sales Process Disciplines
• Performance Management

Cost $$$$$$$$$$ $$ Benefit $$ $$$$$$$$$$$$$$

40

Top Tip for Success

#1: A Written Marketing & Sales Plan

– Writing down your plan successfully will:

• Force Focus on the Big Stuff that matters (80/20 rule)
• Force Trade-offs (efforts & $$’s)
• Force Honest Competitive Assessment
• Highlight Competitive Advantage (sometimes surprises folks)
• Align the organization to better understand what is needed
• Increase your chances of hitting goals by 4x (WashU study)

– Is only good if it has $$’s & Action Plans tied to it & is reviewed Quarterly by the Lead Team & Sales Team

41

Marketing Material Tips

• Use #’s in marketing claims when possible (increases believability)

– 50% faster, lasts twice as long, etc

• Ensure all Marketing & PR Materials have easy to find contact info

for Phone, Email, Website

• Periodically test for the best messages

– different email addresses, phone #’s (or ask for “Rita” – made up employee to test an ad vehicle, etc), website address or promo codes per piece, etc (great way to measure effectiveness)

42

Measures of Success

(things that are Measured get Attention)

• Focus on the Big Leading Indicators to help budget/forecast

– Primary

• Revenue
• Expense
• # of people attending Bible Study (& eventually service) @ CoffeeHouse
• Other?

– Secondary

• Satisfaction Scores (customers & employee)
• # of Complaints vs # of accolades
• Other?

– Timing (Measured Monthly, Quarterly, Yearly, possibly weekly)

• Compare the Month to previous Month and the same month previous year
• Quarter over Quarter and to Previous Year
• Year over Year
• These comparisons will highlight seasonality vs when you should panic (layer

in any “non-normal” activity such as “doubled our Google budget that month last year, etc)

– Monthly Reviews (some weekly) will help identify Best Practices and/or issues

43

Feedback Loop

• Periodic Meetings
• Internal:
• Weekly Sales Meeting - Quick 30 minutes on Monday
• New News from manager

– 5 minutes

• Review the Numbers

– 5 minutes

• Big Win for Week

– 5 minutes

• Help needed from manager – 5 minutes
• Anything Else

– 10 minutes

• Quarterly Sales Ops Reviews (all key employees)
• External: meetings with Key Customers/Influencers for feedback
• Survey
• Following Page

44

Customer Satisfaction Survey

In an effort to make sure that PRG Prototyping is meeting our customer needs, we are asking companies like yours how we are doing. We appreciate you taking a couple of minutes to provide us with this valuable feedback. Thank You, ? Please rate your satisfaction on the following items with 1 being terrible 2 being below average 3 being above average 4 being Great

• Overall Satisfaction with ?:

1 2 3 4

• Wait Time in Line @ Drive-Thru:

1 2 3 4

• Wait Time inside:

1 2 3 4

• Friendliness of Staff:

1 2 3 4

• Coffee Quality:

1 2 3 4

• Tea Quality:

1 2 3 4

• Food Quality:

1 2 3 4

• Cleanliness of Facility:

1 2 3 4

• Hours of Operation meets your needs:

1 2 3 4

• Would you Recommend ? ____Yes, strongly

____Probably ____No

• What is the one thing that you wish you could change about ?:__________________

_____________________________________________________________________________

• What is the one thing that you would never want to change about ?: _____________

_____________________________________________________________________________ www.?.com (620)???-????

?, Pittsburg, KS 66762

45

Coffee Stats

(2012 National Coffee Assoc Report & SBDCNet.org/coffeeshop)

• US Coffee Stats

– 20k Cafes/5k Kiosks/1k Carts/$10B Rev

• 6.6% closed in 2010
• 50% of CoffeeHouses are 3 or fewer locations

– 37% of Coffee consumed is Gourmet – Daily Coffee Drinkers

• 18-24 yr olds

40% (2012) 31% (2010)

• 25-39 yr olds

54% (2012) 44% (2010)

• U.S. Adults

75% drink coffee/58% drink it daily

» 183m Coffee vs 173.5m Tea drinkers

• Avg Start-up Costs:

– Coffee Cart: $20-$25k – Kiosk: $25-$75k – Drive-Thru: $35k (small) to $80-$200k – CoffeeHouse (1200sq ft): $200k-$375k

• US avg CoffeeHouse

– 230 cups per day – $250k per year – $50k Rev per worker

46

Coffee Stats

(Starbucks Avg Revenue Breakdown)

• Starbucks Revenue Breakdown

– Beverages: 75% – Food: 19% – WholeBean/Soluble Coffee: 4% – Coffee Making Equip&Other: 2%

47

Church Board Questions

• Comfort Level with this approach to Church Staking?

– Investment Required: $500k ($150k land/$350k building)

• Raise Funds & buy Land first & then raise 50% of needed

building cost and break ground while raising other half to pay

• ff temporary loan for difference (utilize Sponsor wall, etc for

donations to building fund) – Prioritized Timing:

• Outreach Staking of new “College” church ($500k) before

New Sanctuary at current Church ($1-$1.5m) – Q: should we do any New Sanctuary tie-in modifications to existing bldg now, if within $100k range, to ensure congregation knows we aren't overlooking core church updates & raise excitement for new sanctuary? – Plan B: if someone drops in a “Corridor” Dunkin Donuts or CoffeeHouse before us, roll money into New Sanctuary or ?