INTRODUCTION

BENEFITS OF BUSINESS PLAN

There are many more traditional benefits to creating a business plan

for a new business, which can be broken down into three main area,
symbolism, learning and efficiency. Symbolism is the ability to
communicate the needs and desires of the new venture to that
financiers want see it.

One of the ways that has been shown to help reduce this risk is
having a business plan. Business plans have been defined multiple
ways, but are generally recognized as formal written documents, that
describes the current and future goals of the business in question.
Business plans can take on different forms but seem to have a
positive influence on the financial strength of a business.

The first benefit of symbolism to a business plan is being able to

communicate the vision and legitimizes a new venture proposal. This
also improves communication of the plan to both internal and
external stakeholders by laying out the needs and desires of the
firm.

Financiers often want to see the specifics of a new firm so that they
can make an educated decision about the likelihood of success of the
new venture. Despite the conflicting research, most investors and
financiers require a business plan to even consider investing in a
small business. Thus if a business wishes to get outside financing,
one must create a business plan to even be considered for financing

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Business plans lead to the new venture learning and communicating
the business concept to match both internal goals and external
conditions. This can lead to internal growth, managerial
development, opportunity evaluation and better understanding of
the risks an entrepreneur must undertake. Learning can also lead to
better planning that is related to long-term business survival by
being better able to react to environmental change. Efficiency of a
business is greatly enhanced by having a business plan.
Communication and cost savings are improved by having well
coordinated plans as coordination is already arranged through the
plan.

Another benefit of efficiency is the details of the start-up are done

before the business opens. Also, this means that resources are
better conserved and not wasted during the start-up, as all the needs
for the business have already been determined

Purpose

The purpose of this paper is to create a business plan for the Velwet
Sky Cafe. While the commonly known statistic of 85% to 90% of
restaurants and cafe’s fail within the first year is false, approximately
60% of restaurants do fail within their first three years of operation .
The problem for entrepreneurs starting a restaurant is how does one
reduce this risk of failure. One way to minimize this risk is to create a
business plan. Thus, the main objective of this paper is to create a
business plan that will not only help the restaurant

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develop and plan for the future but will also help the restaurant gain
capital, the other common reason restaurant fail. As the two most
common reasons restaurants fail are poor planning and under
capitalization . A business plan is not a static document, but a
document that must be modified as the business develops and
grows. A subsequent objective of this business plan is to create the
foundations of a business plan that can be modified as the business
grows out of its infancy of a single restaurant into a more mature
and growing restaurant group.

Justifications

With so many restaurants failing the literature shows that one way to
reduce the risk of failure is to have a solid business plan cite
references here. One can therefore reduce the risk of failure by
creating a business. The other way to reduce the risk of failure within
a restaurant is to have capital. Increasing capital can also be
associated with having a business plan as most financial institutions
require a business plan including a feasibility study to determine if
they will finance the business.

Constraints

This paper is not written without some fairly large constraints. The
first major constraint is that the business plan is only an estimate of
both the costs and needs of the restaurant that is being planned. The
need for estimates are based upon the timing of the plan and do not

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consider how things within the hospitality industry can change very
quickly. These changes can be caused by a variety of things, but the
most prevalent today is the economy. The economy is having a huge
impact on everything in the hospitality industry, from numbers of
guests to the amount of financing available. By recognizing that the
economy and other estimates may change one can create a business
plan that is flexible and incorporates many different scenarios.

An additional constraint of this business plan is that it is being

written by one researcher and not a team of business advisors. This
means that the paper may have biases based upon the researchers
own opinions and experiences. Other business advisors would help
reduce these biases, but as an academic exercise having or hiring
advisors would be unethical. This researcher will attempt to remove
their personal biases from the paper. If this researcher were to move
forward with this plan, a financial advisor would be hired to help
prepare formal financial forms and acquire proper financing.

The final constraint recognized by this researcher is the lack of peer-

reviewed articles on restaurants serving breakfast, or even business
plans for restaurants and their likelihood of success. This researcher
will provide information from trade journals on the subject as much
as possible, but most information on this subject must be deduced
from information on other subjects such as general business.

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 Executive Summary

The Business

Velwet Sky Cafe has selected the sole proprietorship as its formal
legal entity. This structure was chosen because of its operational
simplicity. Although this structure exposes the owner to unlimited
liability, risk management and insurance protection will be
established to offset this risk.

Velwet Sky Cafe will be an independent, start-up venture. The

proposed starting date for the venture will be 12/01/2025. This
business plan documents the precise strategies and activities that
will be taken in order to commence operations of the business.

The kitchen will be equipped with a commercial stove, refrigerator,

freezer, walk-in-cooler, oven, microwave, and small commercial
dishwasher. With bargain (but quality) equipment, the cost will be
6.5L. The walk-in cooler will be custom-built. Other start-up expenses
will be dishes, furniture, food inventory, rent deposit, and marketing.

Velwet Sky Café will serve a Indo-Italian style eateries and desserts,
with an emphasis on healthy, tasty food. Low-fat and Gluten free
recipes will be used whenever possible in such a way as not to
sacrifice taste or appeal. Coffees and other beverages will range
from 250 - 700. Pastries and Desserts will range from 250 - 600.
Seasonal specials will be offered. See the attached menu for details.

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Hours of operation will be 10:30 a.m. - 10:30 p.m., 6 days a week, and
10:30 a.m. - 11:30 p.m. on Sundays.

Velwet Sky Cafe will be located at XYZ Street, ABC nagar, Chennai
with seating for 40 people. The rent is lakh a month, with a five-year
lease available. The site consists of a 40 x 30 square-foot dining
room, and a roof top space of 20x30sq and a 15 x 15 square-foot
kitchen, two bathrooms, and a storage room in back. To be used as a
restaurant, this storefront needs to be plumbed and wired
appropriately. Painting, new floors, pastel themed photo booth area,
crotons hanging at the roof top and countertops are also needed.
With materials bought on sale and the cost to renovate will be
2,00,000.

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COMPANY’S LOGO

COMPANY’S TAGLINE:

HAVE A BREW-TIFUL EXPERIENCE

PRODUCT AND SERVICES

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MARKET ANALYSIS
FEASIBILITY STUDY:

Problem

There is a shortage of coffee spots with aesthetic ambience where

customers can get high quality coffee and freshly baked pastries in a
higher income market in Chennai. Most of them provide lesser
quantity with higher price.

The menu will address this by preparing favourites in such a way that
people won’t realize that much of the unhealthy fat has been
removed.

Focusing only on the cozy plattering of the food rather than

providing good quality and quantity of the dish.

Solution

Velwet sky offers a broad range of coffee, espresso, and other beverage
products, all from high quality imported coffee beans. Velwet Sky caters
to all of its customers by providing each customer coffee and espresso
products made to suit the customer, down to the smallest detail.
Velwet Sky offers freshly baked high quality of pastries and bakeries.

The menu will address this by preparing favourites in such a way that
people won’t realize that much of the unhealthy fat has been
removed.

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Market

Because Chennai has a hot climate for eight months out of the year,
cold coffee products are very much in demand. During the remaining
warmer four months of the year, hot coffee products are in significantly
high demand, along with a slower but consistent demand for both cold
and hot coffee products. Much of the day’s activity occurs in the
evening hours after 3 p.m., with a relatively steady flow for the
remainder of the day.

Competition

Competition in the local area is somewhat sparse and does not provide
nearly the level of product quality and customer service as Velwet Sky
does. Local customers are looking for a high quality product in a
relaxing atmosphere and aesthetic ambience. They desire a unique,
classy experience.

Why Us?

Velwet Sky is a bakery and coffee shop is managed by sole

proprietorship. I represent all sales / management/ finance/
administration areas, respectively. I manage to provide funding from
my own savings and from investors, which will cover start-up
expenses and provide a financial cushion for the first months of
operation.

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Financial feasibility:

Startup requirements:

1. Startup expenses of 6L excluding, 2L legal, 12L location

premises and renovation, 60K expensed equipment, and 40K
other. These show up as negative retained earnings in the
initial balance because they are incurred before launch.
2. Starting cash in the bank of 3L. (in initial balance)
3. Other current assets of 2.5L (in initial balance)

Funding

1. 15L initial investment from founders (Shows up in initial

balance.)
2. 17L loan from bank.

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Opportunity

Problem & Solution

Problem Worth Solving

There is a shortage of coffee spots where customers can get high-

quality coffee and beverages and also freshly baked pastries and
desserts in a higher income market in the mid suburban part of
Chennai city. 

The menu will address this by preparing favourites in such a way that
people won’t realize that much of the unhealthy fat has been
removed.

Our Solution

Velwet Sky offers a broad range of coffee ,espresso and bakery

products, all from high-quality Columbian grown imported coffee
beans and Italian pastries. Velwet Sky caters to all of its customers by
providing each customer coffee and espresso products made to suit
the customer, down to the smallest detail.

The menu will address this by preparing favourites in such a way that
people won’t realize that much of the unhealthy fat has been
removed.

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PRODUCTION FEASIBILITY:

Market Size & Segments

Velwet Sky focuses on the middle- and upper-income markets. These

market segments consume the majority of coffee, espresso and
pastries products at cafes.

Local Residents

Velwet Sky wants to establish a large regular customer base. This will
establish a safe and healthy products. It constantly check upon
revenue base to ensure the stability of the business.

Tourists

Tourist traffic comprises approximately 35% of the revenues. High

visibility and competitive products and service are critical to capture
this segment of the market. Many new pastries ,desserts, beverages
has to be constantly introduced to attract these kind of customers .

Innovations

1. For every 7th coffee, its on us, if you follow us in our official
Instagram page ( @Velwetskyy_)
2. For every 6th pastry you get an additional 2 beverages for 75%
discount, if you follow us in our official Instagram page.
3. Setting up a pastel themed photo booth area.
4. A free mini cup cake for new visitors.
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 5. 24% offer on every 24th of the month.
6. Collect your birthday coupons.
7. Play area for children below 8 years.

Competition

Current Alternatives

Leading competitors purchase and roast high quality, whole-bean

coffees and, along with Italian-style espresso beverages, cold-
blended beverages, a variety of pastries and confections, coffee-
related accessories and equipment, and a line of premium in quality
of all the eateries ,they sell these items primarily through company-
operated retail stores. In addition to sales through company-
operated retail stores, leading competitors also sell coffee, Pastries
and beverages products through other channels of distribution and
has a wide range of collaborations with them such as Swiggy and
Zomato.

Larger chains vary their product mix depending upon the size of

each store and its location. Larger stores carry a broad selection
of whole bean coffees in various sizes and types of packaging, as well
as an assortment of coffee- and espresso-making equipment and
accessories such as coffee grinders, coffee makers, espresso
machines, coffee filters, storage containers, travel tumblers and
mugs. Smaller stores and kiosks typically sell a full line of coffee
beverages, a more limited selection of whole-bean coffees, and a few
accessories such as travel tumblers and logo mugs. According to the
most recent data available, industry retail sales mix by product type

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was approximately 64% beverages, 20% pastries , 11% other food
items , and five percent coffee-making equipment and accessories.

Our Advantages

The retail coffee industry and opening of new cafés in the India has
recently experienced rapid growth. The hot marine climate in south
of India stimulates consumption of cold beverages majorly
throughout the year.

Velwet Sky wants to establish a large regular customer base, and will
therefore concentrate its business and marketing on local residents,
which will be the dominant target market. This will establish a
healthy, consistent revenue base to ensure stability of the business.
In addition, tourist traffic is expected to comprise approximately 35%
of the revenues. High visibility and competitive products and service
are critical to capture this segment of the market.

Additionally, commencing the Café near the surroundings of Metro

station/ bus stops/ anywhere to easy access of transportation will be
quite easy for the visitors to come.

Tying up our café with major distribution sectors like Swiggy and
Zomato will be a major advantage to attract new customers.
Providing seasonal desserts.

STRATEGY AND IMPLEMENTATION

SWOT Analysis

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SWOT analysis (or SWOT matrix) is a strategic planning and strategic
management technique used to help a person or organization
identify Strengths, Weaknesses, Opportunities, and Threats related
to business competition or project planning. It is sometimes called
situational assessment or situational analysis.

 It is intended to identify the internal and external factors that are
favourable and unfavourable to achieving the objectives of the
venture or project. Users of a SWOT analysis often ask and answer
questions to generate meaningful information for each category to
make the tool useful and identify their competitive advantage. SWOT
has been described as a tried-and-true tool of strategic analysis, but
has also been criticized for its limitations, and alternatives have been
developed.

One form of TOWS matrix combines each of the four components

with another to examine four distinct strategies:

 WT strategy (mini–mini): Faced with external threats and

internal weaknesses, how to minimize both weaknesses and
threats?
 WO strategy (mini–maxi): Faced with external opportunities
and internal weaknesses, how to minimize weaknesses and
maximize opportunities?
 ST strategy (maxi–mini): Faced with external threats and
internal strengths, how to minimize threats and maximize
strengths?
 SO strategy (maxi–maxi): Faced with external opportunities
and internal strengths, how to maximize both opportunities
and strengths?
Strengths and weaknesses are usually considered internal,
while opportunities and threats are usually considered
external. The degree to which the internal strengths of the firm

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 match with the external opportunities is expressed by the
concept of strategic fit.
Internal factors are viewed as strengths or weaknesses
depending upon their effect on the organization's objectives.
What may represent strengths with respect to one objective
may be weaknesses (distractions, competition) for another
objective. The factors may
include personnel, finance, manufacturing capabilities, and all
of the marketing mix's 4Ps.

 Strengths:

characteristics of the business or project that give

it an advantage over others.

 Weaknesses:

characteristics that place the business or project

at a disadvantage relative to others.

 Opportunities:

elements in the environment that the business or

project could exploit to its advantage

 Threats:

elements in the environment that could cause

trouble for the business or project

Keys to success for Velwet Sky will include:

STRENGTH ANALYSIS :

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1. Providing the highest quality product with personal customer
service.
2. Competitive pricing.

3. Aesthetic ambience.

4. Offers and discounts.

5. Providing seasonal cuisines.

6. Quick service.

7. Peace full environment for business officials to work.

8. Easy feasibility of transportation.

9. We arrange surprise events and parties, if booked 2- 3 days

priorly.

WEAKNESS ANALYSIS :

1. Sole proprietorship

2. Huge investment of money

3. Has more pressure

4. Responsible for all the liabilities and loss

5. To maintain stability in the market

6. More competitors

7. Revenue is uncertain

THREATS :

1. Less Market Data.

2. Manual System.

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 3. Difficult to Estimate Capital & Profit.

4. Less Market Share.

5. Difficult to Make a Name.

6. Highly Competitive.

7. Cost Disadvantage

8. Changes in consumer preferences or trends.

9. Economic downturns or market instability.

10. Supply chain disruptions or sourcing challenges.

11. Labour disputes or employee turnover.

OPPORTUNITIES :

1. Developing a Direct Relationship with Customers.

2. Innovation & New Techniques.

3. Develop Brand Loyalty by Offering Rewards.

4. Better Customer Experience.

5. Increase Product Line.

6. Increase the Target Geographic Area.

7. Advertisement to Build Brand Awareness.

8. Mobile Application & Home Delivery Service.

Execution

Marketing & Sales

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Marketing Plan

Our marketing is rooted in the quality of the experience, to generate

good word of mouth and repeat visits. That should generate good
reviews on google and Google Maps and similar review platforms. 

Of course we will pay attention to reviews and work with promotions

to encourage reviews without being too blatant about it. 

Digital marketing is the fast developing sector in recent days,

henceforth, keep an up-to-date in Instagram page ,Facebook page
and Twitter persona with regularly updated content. We will be slow
to do promotions over social media, emphasizing useful content
instead. Some of that will include community content. 

Collaborating with social media influencers is quick way to seek

market and customers attention.

For every 7th coffee, its on us, if you follow us in our official Instagram
page ( @Velwetskyy_)

For every 6th pastry you get an additional 2 beverages for 75%
discount, if you follow us in our official Instagram page.

Providing them Birthday coupons and seasonal offers and discount

is a way to attract and stabilise the customers.

Operations

Locations & Facilities

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Locations like centre part of the city is already been trafficked with
many restaurants and cafés and food trucks. Commencement of new
café at these locations may end up at loss or seek less customer
attentions.

As people at urban part of Chennai city has a wide range of

restaurants, cafes, bakeries and food truck, most of the people tends
to explore new cafes and restaurants. These kind of people are
tourist/ irregular customers. They are mostly one time visitors who are
not loyal regular customers. Henceforth, Velwet Sky wants to establish
a large regular customer base, and will therefore concentrate its
business and marketing on local residents, which will be the dominant
target market.

This will establish a healthy, consistent revenue base to ensure the

stability of the business. In addition, tourist traffic is expected to
comprise approximately 35% of the revenues. High visibility and
competitive products and service are critical to capture this segment of
the market.

Velwet Sky will be located in mid of suburban and urban part of the city
which will have a storefront that is easily accessible from 2 different
highways and near to one of the metro station.

Gist of Velwet Sky future promotion dates

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Promotion dates

  Velwet Sky Due Date Who’s Responsible

Launch Promotion
Mid of Jan, 2025 Myself and Team

Social Media Setup

Nov, 2024 Myself and Team

Summer Iced Coffee Promotion

Feb, 2025 Myself and Team

Fall Coffee Specials

Feb, 2025 Myself and Team

Key Metrics

Of course, the main metrics are the obvious ones: sales, direct, costs,
expenses, and cash flow. But we will also be watching for units,
customers, and social media metrics including Instagram likes and
Twitter follows.  

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With the help of each and every increase in the followers, share and
like rates in Instagram and twitter will be closely monitored by our
team, therefore we can self estimate the growth/ fall of the café .

It will easily help us to determine the status of our café at day to day
scenarios.

ORGANIZATION AND MANAGEMENT

Overview

Ownership & Structure

Velwet sky is incorporated in Chennai, Tamil Nadu. It is owned and

managed by Myself and my team respectively.

The company intends to hire two full-time  managers (who will also
handle our social medias and constantly update us about trending
things/ seasonal specific eateries) , one pastry chef, one beverage and
coffee beans expert, and 3 part-time baristas to handle customer
service and day to day operations.

Team

Personnel Table

  FY2025 FY2026 FY2027

Managers (2) 3,70,000 3,90,000 4,15,000

Pastry chef(2) 4,50,000 5,00,000 5,45,000

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 Baristas (3) 6,00,000 6,75,000 7,35,000

Totals 14,20,000 15,65,000 16,95,000

FINANCIAL PLAN AND PROJECTIONS  

Forecast

Revenue Forecast

  FY2025 FY2026 FY2027

Revenue      

Coffee and beverages 15,50,000 18,75,000 20,00,00

Pastries 8,80,000 11,80,000 10,95,000

Other 6,20,000 5,55,000 10,55,000

Total Revenue 30,50,000 36,10,000 41,50,000

Direct Cost      

Coffee and beverages 3,62,000 4,70,000 5,50,000

Pastries 2,49,000 3,60,000 4,10,000

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 Other 2,00,000 3,50,000 4,80,000

Total direct costs 8,11,000 11,80,000 14,40,000

Financing

Use of Funds

We will be financing initial assets of 6,50,000 long-term assets

(equipment, etc.) and 2,50,000 current assets plus initial inventory and
the early months before break-even occurs. 

We can segregate our net income for our future renovations,

incentives, to find profit/loss

Sources of Funds

Statements

Projected Profit & Loss

  FY2025 FY2026 FY2027

Revenue 30,50,000 36,10,000 41,50,000

Direct Costs 8,11,000 11,80,000 14,40,000

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Operating Expenses      

Salaries & Wages 14,20,000 15,65,000 16,95,000

Rent 12,00,000 12,00,000 12,00,000

Depreciation and
50,000 60,000 70,000
Amortization

Income Taxes 40,000 45,000 50,000

Total operating Expenses 27,10,000 28,70,000 30,15,000

Net Profit 3,40,000 7,40,000 11,35,000

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