Feasibility Analysis of Elixir Coffee's Business Model in Buderim

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Wisdom College Of Education *

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Jun 11, 2024

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1 FEASABILITY REPORT ON ESTABLISHING A COMPANY FA3 Business Report

Introduction This comprehensive feasibility report provides an in-depth analysis of "Elixir - Coffee on Buderim," a unique coffee shop concept envisioned by Megan Williams, a seasoned barista with a decade of experience in the coffee industry. Megan seeks to carve a niche in the Buderim coffee scene by introducing a distinctive coffee experience, highlighted by a specialty blend sourced from the Bugisu Project, a non-profit organization based in Uganda. The viability of this innovative business proposal is critically evaluated, focusing on key aspects such as the competitiveness of the business, stakeholder satisfaction, and strategic market influences. This analysis incorporates a wide lens view of the dynamic business environment of Buderim, integrating robust analytical tools like the PESTLE analysis, and addressing Elixir's potential stage in the business lifecycle. By dissecting these integral components, this report aims to present a conclusive evaluation of Elixir's potential for success within Buderim's coffee industry. 2

Business Pathway Options As a start-up, Elixir – Coffee on Buderim is currently navigating the initial phase of the business lifecycle, a stage distinguished by high risk, potential for rapid growth, and substantial investment in resources. During this stage, businesses typically face challenges such as the acquisition of capital, customer base development, and competitive pressure. Strategies such as comprehensive market research, proactive customer engagement, and constant innovation are critical to overcoming these hurdles. In the case of Elixir, Megan has opted for the path of founding a new venture, leveraging her successful experience running a mobile coffee van. This choice, although providing maximum control and flexibility to implement her unique business concept, also carries inherent risks and new challenges as she transitions to a permanent establishment. Starting a new business, as opposed to purchasing an existing one or entering a franchise agreement, requires managing significant initial operational set- up, including regulatory and legal requirements. Megan must ensure compliance with various regulations like local council rules, food safety standards, and licensing requirements pertinent to selling food and beverages in Queensland. This extends to business registration, tax obligations, health and safety regulations, and employment laws that vary by region. She also needs to focus on developing efficient operations, carefully managing cash flow, and nurturing her customer base, building upon the loyalty garnered through her mobile van venture. In essence, this start-up phase presents Megan with both new opportunities and challenges as she strives to create a market presence for Elixir in Buderim. It is a period of significant effort and learning, demanding careful navigation through market risks, operational hurdles, and regulatory landscapes while capitalizing on the potential for high growth. This entrepreneurial journey, if managed effectively, holds the promise of transforming Elixir – Coffee on Buderim into a successful coffee shop, carving out its niche in the local market. 3

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SWOT Table Strengths Weaknesses - Megan's vast barista background solidifies her position within the coffee industry. (Stimulus 1) - From her mobile coffee business, Megan has cultivated a dedicated following who appreciate her unique coffee brand - this offers an immediate customer base. (Stimulus 1) - Leveraging her proficiency, Megan has the ability to produce exceptional and distinctive coffee mixes, including the notable blend obtained from the Bugisu Project. (Stimulus 2) - With her keen sense for trends and tastes, Megan is continually innovating and expanding her range, which further solidifies her standing in the competitive coffee market. (Stimulus 1) - Venturing into Buderim's saturated coffee scene presents a hurdle, given the abundance of existing cafes and coffee joints. (Stimulus 7) - Operating as a sole proprietor, Megan might encounter constraints in resources, decision-making capacity, and managing her workload. (Stimulus 4) - Depending solely on the success of her mobile coffee business might not necessarily assure a seamless and immediate shift to a traditional coffee shop setting. (Stimulus 1) - Megan's potential lack of experience in managing a fixed location coffee shop may pose operational challenges and require quick adaptation to a different business model. (Stimulus 1) Opportunities Threats - The dedicated following that Megan has garnered from her mobile coffee business could serve as a substantial initial support network for her new coffee house. (Stimulus 1) - By presenting a distinctive coffee blend obtained from the Bugisu Project, Elixir has the potential to carve out a unique position in the market and appeal to customers in search of something out of the dozens of cafes In the area. (Stimulus 2) - The community in Buderim could provide latent potential, offering chances to serve the local residents, visitors, and the broader community of coffee enthusiasts. (Stimulus 3) - Megan's reputation as an experienced barista and her commitment to quality could be leveraged to drive customer confidence and loyalty in the new establishment. (Stimulus 1) - The prevalent competition from Buderim's current cafes and coffee spots could pose a challenge for Elixir to differentiate itself and secure a portion of the market. (Stimulus 7) - External elements, such as shifts in the coffee market or economic fluctuations, have the potential to affect the prosperity and feasibility of Elixir. (Stimulus 3) - Maintaining a steady supply and consistent quality of the unique blend from the Bugisu Project could present difficulties, as reliance on a sole supplier carries inherent risks. (Stimulus 2) - The potential learning curve involved in transitioning from a mobile coffee van to a brick-and-mortar establishment could bring unforeseen operational and management challenges that need to be addressed promptly. (Stimulus 1) 4

STEEPLE Table Social - The increasing allure of gourmet coffee and the thriving café scene can create a beneficial backdrop for the success of Elixir's coffee house. (Stimulus 9) - It's vital to comprehend and satisfy the culinary inclinations and desires of the Buderim community in order to establish a robust clientele. (Stimulus 13) - Establishing a commendable brand persona via active participation in local matters, social initiatives, and demonstrating responsibility can elevate Elixir's stature in the community. (Stimulus 5) - Elixir can enhance its business prospects by introducing unique, innovative coffee blends or offering curated coffee tasting experiences to differentiate itself from competitors. (Stimulus 13) Technological - Harnessing the power of digital tools like online ordering systems and mobile payment solutions can enhance customer convenience, drawing in a digitally inclined audience. (Stimulus 11) - The deployment of social media and digital marketing tactics can aid in fostering brand recognition, fostering interaction with customers, and broadcasting Elixir's distinct offerings. (Stimulus 10) - Offering loyalty programs or exclusive discounts can encourage repeat patronage and foster a dedicated customer base for Elixir's coffee house. (Stimulus 11) Economical - Fluctuations in the economy, such as changes in disposable income levels and employment rates, can directly influence the consumer spending patterns at Elixir's coffee house. (Stimulus 3) - Understanding and adapting to changes in commodity prices, particularly coffee beans, can help Elixir maintain its profit margins and offer competitive pricing to its customers. (Stimulus 5) - Regulatory changes, such as alterations in taxation or wage laws, may impact the operational costs of Elixir's coffee house and should be considered in strategic planning. (Stimulus 13) - Potential government grants or funding for small businesses and sustainability initiatives could provide financial benefits and growth opportunities for Elixir's coffee house. (Stimulus 13) Environmenta l - Highlighting Elixir's dedication to green practices, such as employing sustainable packaging materials and procuring ethically cultivated coffee, can resonate with customers who value environmental stewardship. (Stimulus 8) - Implementing effective waste handling and energy conservation strategies in everyday operations can further underscore Elixir's commitment to being a responsible environmental steward. (Stimulus 8) - Actively participating in local environmental initiatives or campaigns could enhance Elixir's reputation as a community-conscious business, fostering goodwill and boosting customer loyalty. (Stimulus 8) 5

Political & Legal - Adherence to food safety guidelines and health department norms is vital to guarantee a clean and safe setting for patrons. (Stimulus 4) - Staying informed about amendments or rules related to employment laws, licensure, and permissions is key to sidestep any legal issues in the operation of the coffee house. (Stimulus 4) - Implementing a strong internal policy for staff training and development can help maintain high service quality and improve employee satisfaction, which can indirectly influence Elixir's overall success. (Stimulus 6) Ethical - Upholding principled procurement methods, including endorsing fair trade and collaborating with trustworthy suppliers, can harmonize with the ethical values and choices of customers. (Stimulus 6) - Cultivating an inclusive and varied workplace, along with treating staff with equity and regard, can bolster employee contentment and draw a devoted workforce. (Stimulus 9) - Implementing robust customer service training programs can improve customer experience and foster a culture of exceptional service, leading to higher customer retention and positive word-of-mouth referrals. (Stimulus 1) 6

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SWOT and STEEPLE Analysis The SWOT analysis suggests a somewhat challenging, but not insurmountable, environment for Megan's new coffee house. While her extensive barista background, innovation, unique blends, and dedicated customer base from her mobile business are significant strengths, they are offset by her potential lack of experience in managing a fixed location coffee shop and the intense competition in Buderim's saturated coffee scene. The transition could bring unforeseen operational and managerial challenges. Her opportunities lie in her existing customers' loyalty, the potential uniqueness of the Bugisu Project blend, and the untapped market in the Buderim community. These opportunities, however, could be thwarted by the competitive landscape, market volatility, and potential supply issues with the unique blend. Therefore, it's critical that Megan mitigates these threats and leverages her strengths to seize the opportunities. This scenario, while possessing challenges, also holds great potential for Megan's success if navigated strategically. The STEEPLE analysis presents an advantageous environment for Megan's new coffee house, Elixir, revealing numerous areas for strategic leverage and growth. The increasing popularity of gourmet coffee and unique blends socially supports Elixir's success, while technology enables Elixir to attract a digitally inclined audience via online ordering and loyalty programs. Economically, understanding and adapting to fluctuations in the economy and commodity prices will be key to maintaining profitability. Government grants could provide additional support. Environmentally, Elixir has the opportunity to distinguish itself through sustainable practices, waste management, and local environmental participation, resonating with environmentally conscious consumers. Politically and legally, staying updated on relevant laws and regulations and ensuring proper staff training are essential for smooth operation and service quality. Ethically, Elixir can appeal to customers' values through fair trade practices, workplace inclusivity, and exceptional customer service. 7

The STEEPLE analysis suggests that Megan’s coffee house has the potential to succeed if she successfully navigates the diverse influences within her business environment. However, she needs to stay proactive and adaptable to changing trends and circumstances across all these domains. The feasibility of Megan's coffee house, Elixir, rests on a careful navigation of challenges and strategic leveraging of opportunities. Key findings indicate her robust background and distinctive offerings as crucial strengths, although operational challenges in a saturated market may pose risks. Leveraging digital tools and unique coffee experiences, responding to economic changes, and demonstrating environmental and ethical responsibility can foster a competitive advantage. For the start-up stage, these insights inform the importance of strategic planning, operational preparedness, and ongoing adaptability, shaping a promising outlook if effectively executed. Evaluation and Recommendations Megan's planned coffee house, Elixir, in Buderim presents an exciting but challenging business opportunity. Her unique coffee offerings and extensive barista experience provide a solid foundation, yet the competitive coffee scene and operational challenges in transitioning from a mobile to a brick-and-mortar business model require careful consideration. To enhance the business model, Megan should leverage technological tools for customer convenience, implement a loyalty program, and use digital marketing to boost brand recognition. She should also remain adaptable to economic fluctuations and changes in regulations. A strong emphasis on ethical sourcing, environmental sustainability, and community involvement can enhance her brand reputation, fulfilling the expectations of multiple stakeholders, from customers to local community. The table below provides a summary of how the recommendations meet the business criteria of effectiveness and competitiveness. 8

Recommendations Effectiveness Competitiveness Technological tools for customer convenience Streamlines customer experience, meeting modern consumer expectations Directly addresses the need for quick service in a busy marketplace Implementation of a loyalty program Encourages repeat visits, fostering a strong customer base Provides a value proposition to stand out in a crowded marketplace Use of digital marketing Increases brand visibility, attracting a wider customer base Allows Elixir to reach customers beyond its physical location Adaptability to economic changes and regulations Enables swift response to market changes Helps maintain business viability amidst competition Emphasis on ethical sourcing, sustainability, community involvement Meets expectations of multiple stakeholders Enhances brand reputation, a critical factor in consumer choice The decision to invest should hinge on her preparedness to navigate the foreseen challenges. If Megan feels she can strategically manage these, then investing in the new coffee house could be a rewarding enterprise. If she's not fully confident, considering an alternative business option where she can exploit her strengths and the potential of the market might be more viable, such as expanding her existing mobile coffee business or branching into online sales of her unique coffee blends. Ultimately, the choice should reflect Megan's business goals, risk tolerance, and readiness to adapt to a dynamic business environment. Conclusion In conclusion, Megan's planned coffee house, Elixir, holds potential for success, provided she is prepared to meet the associated challenges. The strategic implementation of technological tools, a loyalty program, digital marketing, adaptability mechanisms, and a focus on ethical and sustainable practices will be key in enhancing effectiveness and competitiveness. The final decision should align with Megan's business goals, risk tolerance, and readiness to adapt. Her unique coffee blends and barista experience are solid building blocks for a successful venture in whichever path she chooses. 9

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References Australian Bureau of Statistics. (2023). Buderim Census All Persons . Retrieved from Australian Bureau of Statistics: https://abs.gov.au/census/find-census-data/quickstats/2021/SAL30408 Biason, K. (2023). Legal Considerations for Setting up a Café . Retrieved from Legal Vision: https://legalvision.com.au/legal-aspects-of-starting-a-cafe/ Busby, C. (2019, Febuary). The Bugisu Project is bringing Uganda’s single origin coffee to Australia . Retrieved from Startup Daily: https://www.startupdaily.net/advice/student-startup-bugisu-project-bringing- ugandas-single-origin-coffee-australia/ Landau, C. (2023). 13 Tips to Open a Successful Coffee Shop . Retrieved from Bplans: https://articles.bplans.com/13-tips-open-successful-coffee-shop/ Statistica. (2023). Coffee market in Australia - statistics & facts . Retrieved from Statistica: https://www.statista.com/topics/4615/coffee-market-in-australia/#topicOver view Thompson, A. (2021). Starbucks Stakeholders & Corporate Social Responsibility . Retrieved from Panmore Institute: https://panmore.com/starbucks-coffee- stakeholders-csr-analysis 10

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