perfection of small business project

43
Entrepreneurship and Small Business Subject: Entrepreneurship and Small Business Instructor: Mr. Cường Date: April 23 rd , 2012 A Project of Business Plan For The EFFOC Coffee (Franchising)

Upload: duy-nguyen

Post on 25-Jul-2015

69 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Perfection of Small Business Project

Entrepreneurship and Small Business

Subject: Entrepreneurship and Small BusinessInstructor: Mr. CườngDate: April 23 rd , 2012

1. Executive Summary and Background…………………………………. page 4

2. Description of the Management Team………………………………… page 5

3. Business Objective………………………………………………………. page 6

4. Market Approach

A Project of Business PlanFor

The EFFOC Coffee (Franchising)

Table of Content

Page 2: Perfection of Small Business Project

4.1 Description of the Target Market……………………………… page 7

4.2 Uncontrollable Factors………………………………………….. page 7

4.3 Marketing Strategy.……………………………………………… page 8

5. Location

5.1 Trading area……………………………………………………… page 10

5.2 Specific site……………………………………………………… page 10

6. Physical facilities…………………………………………………………. page 14

7. Financial

7.1 Market potential…………………………………………………. page 18

7.2 Market share…………………………………………………….. page 18

7.3 Projected income……....……………………………………….. page 19

7.4 Depreciation Schedule………………………………………….. page 21

7.5 Financing (Start – up costs)……………………………………. page 22

7.6 Cash flow statement ……………………………………………. page 23

7.7 Financing…………………………………………………………. page 24

7.8 Bookkeeping / Accounting System…………………………….. page 24

8. Personnel

8.1 Administrative structure…………………………………………. page 25

8.2 Employee Recruitment and Training…………………………... page 26

9. Legal Requirement

9.1 Legal Structure…………………………………………………… page 28

9.2 Licensing………………………………………………………….. page 28

9.4 Tax………………………………………………………………… page 29

The EFFOC coffee is a franchising brand. This brand was found in 2008 and now, it has 4 coffee shops in Ho Chi Minh City. Therefore, we have decision to establish a EEFOCT coffee shop in Go Vap district to meet customers’ demand and operate this brand

The EFFOC coffee had origin which is "coffee to go" (take away) for customers. However, Our business evaluate the competition ability of this brand based on information and data of franchisor so we decided to open a coffee shop which has

Group8- The EFFOC coffee business plan Page 2

Executive Summary and Background

Page 3: Perfection of Small Business Project

98 square met and 2 floors for servicing customers with 2 major of kinds (take away and at shop)

Our coffee shop locates on Nguyen Thai Son Street, Go Vap district. It nears university, high schools, market, offices. Thus, it can attract more customers

The EFFOC coffee shop will be operated by the conditions of franchisor; actually, we have an contact between franchisor and franchisee about training, profit, supplying, brand cost and so on

The EFFOC coffee is used material from Italy and Italian formulation with suitability prices for Vietnamese consumers. The coffee shop like take away coffee, this is a kind of coffee, buyer can buy it and bring their home to enjoy it or they can enjoy at shop

The new EFFOCT coffee in Go Vap district is established from equity from 6 shareholders and they own this shop. The profit of shop will share 6 parts with particular proportion.

In there, the first owner and manager of this shop is Nguyen Hieu Ngoc. She graduated Business Administration from SIAST Canada. This program is evaluated

Group8- The EFFOC coffee business plan Page 3

Description of Management Team

Page 4: Perfection of Small Business Project

highly in international cooperation programs of Viet Nam. She has 2 years of experience in selling and marketing in Mead Johnson Co. and Abbout Co.

After that, this is a list of all shareholders who will manage this coffee shop with Ms. Ngoc in the next time:

• Tran Thi My Linh - Human resource managerShe graduated Business Administration from SIAST Canada, she has 1 year in training and human resource management in TGM Corporation

• Le Hoang My – Marketing managerHe has the degree of Diploma Business Administration about Marketing in HCM City University of industry. Also, he has also experiences of working in marketing department for Nike Viet Nam Company

• Dang Thi Cam Thuy - Financial ManagerShe graduated Business Administration from SIAST Canada, she had 2 years in selling in family business

• Nguyen Quoc Tuan – Marketing departmentHe has the degree of Diploma Business Administration. He had 3 years as assistance in family business

• Truong Thi Thanh Ngoc - Human resource departmentShe has the degree of Diploma Business Administration. She had 2 years assistance in volunteer for foreign coffee shop

In the fact that, 6 shareholders divide time and job management of shop, because they has their own job and depend on free time of person for shop management

The objectives for EFFOC coffee shop are following:

The first objective is attracting customers by our special coffee from Italy; contribute a good brand in customers’ mind with good service style

The second relates the profits of this coffee shop. Although each member just contribute one-sixth of business but they hope can have return as soon as possible (

Group8- The EFFOC coffee business plan Page 4

Business Objectives

Page 5: Perfection of Small Business Project

about 18 months) and after that they gain profit higher than in stock or bond investment in financial market with the same budget

The third is based on performance that is a medium-term goal. Market share should increase about 8% for each year in 5 years. We hope that the business grows, it will have loyal customers and the brand reputation to overcome threaten when our business's new in Go Vap district

The fourth is the long-term goals after 5 years this shop still exists. We will franchise 3 or 5 coffee shops in other districts such as Binh Thanh, Tan Binh, 8, 4 and 2 to cover all located in Ho Chi Minh City

1. Description Of The Target Market

The geographic market area for EFFOC coffee shop is required by franchisor. However, because it is take a way of coffee shop so it needs to located lethebridge for convince when customer waiting and purpose of advertising reputation brand

Group8- The EFFOC coffee business plan Page 5

Market Approach

Page 6: Perfection of Small Business Project

Geographic : focus on center of district, which has a lot of schools, university, offices

Demographic : It is also targeting the low, medium and high income people and it is purchased by both genders, either male or female. The main age frame for the target market is from 15 to 60 years old. Particularly:

Teenagers Students Officers Foreigners People who like mix-drinking from Italy

Psychographic : People who like the special coffee with weird favors which made from

Cookie, Chocolate, Cappuccino, Mocha, Smoothies, Tea, and so on target is focus on low , medium and high income because our coffee

glass is cheaper than other with Italy formula

Behavoiur: The consumers’ personality who love Italy coffee Have habit drink coffee everyday Need a place to talking & chatting with friend , can enjoy drinking Love Italy coffee or mix-drinking

2. Uncontrollable Factors

There are 4 uncontrollable factors that the small business owner must understand:

Economy : At this point, the economy in Vietnam is restored. The business inside and outside trend reinvestment Vietnam market. Therefore, they need a proficient human resource. Moreover, quality of products is vital too.

Competition : There are several coffee shops and milk tea shop so the market seems saturation; thus, we need to contribute reputation brand to attract consumers

Legal Restrictions : Partnership with 6 members so this is hard in taxes and not major owner so legal document has some complication

Social/Cultural Trends : Because Vietnamese cultural people like the traditional coffee so it’s difficult to bring a new coffee & drinking for them. and the kind of products is not various; thus, the customer

Group8- The EFFOC coffee business plan Page 6

Page 7: Perfection of Small Business Project

3. Marketing Strategy (4P)

Product:

Group8- The EFFOC coffee business plan Page 7

Page 8: Perfection of Small Business Project

Group8- The EFFOC coffee business plan Page 8

Page 9: Perfection of Small Business Project

Group8- The EFFOC coffee business plan Page 9

Page 10: Perfection of Small Business Project

Distribution (Place):

Now, The EFFOC coffee has 4 shops in Ho Chi Minh City and a new shop in Go Vap district which is established by us

Store 1: Effoc Võ Thị Sáu14a Võ Thị Sáu08 66 789 563

Group8- The EFFOC coffee business plan Page 10

Page 11: Perfection of Small Business Project

Store 2: Effoc Nguyễn Văn Tráng29 Nguyễn Văn Tráng08 66 793 436

Store 3: Effoc Nguyen Thuong Hien369 Nguyen Thuong Hien08 66 725 549

Store 4: Effoc Tran Quoc Toan3 Tran Quoc Toan Street, District 308 62 551 555

Store 5: Effoc Nguyen Thai Son148 Nguyen Thai Son, Go Vap District

Price:

The price fluctuates from 24.000 VND to 32.000 VND which depends on the kind of drinking

See the Menu picture following:

Group8- The EFFOC coffee business plan Page 11

Page 12: Perfection of Small Business Project

Promotion:

To attract and let the consumers know a new store. Franchisor will support us give Voucher in other 4 coffee shop. When customer give Voucher in EFFOC coffee shop to exchange 5 cups in any EFFOC store to take 1 cup free (the program will held in a month)

Group8- The EFFOC coffee business plan Page 12

Page 13: Perfection of Small Business Project

The every promotion in year in summer, because in summer, almost students and high school students will off in school so we have promotion to earn points which can change a EFFOC glass

4. SWOT:

Strengths Weakness Italian Coffee with low price Reputation brand due to

franchising Save advertising cost New favours coffee to attract

curious of customers

Just have drinking, not food Limited kinds of drinking Not famous in Go Vap

district

Opportunities Threatens Location near schools, offices attract customer easily

Weird favour to demand customers’ need

Saturation market ( have a lot of competitors)

Some people likes Vietnamese traditional coffee

1. Trading Area

Economic Base:

Group8- The EFFOC coffee business plan Page 13

Location

Page 14: Perfection of Small Business Project

Ho Chi Minh City has 14 districts and has total surface of 2,095.01 km². Go Vap District is a district of Ho Chi Minh City. The process of rapid urbanization has made the Go Vap district became one of the three growth rate the highest population of the city. Specifically, in 1976, with 144 thousand residents of Go Vap, then in 1995 was 223 thousand, 231 thousand in 2000 and 2003 were 413 thousand and 455 thousand in 2004. As from 1980 to 2003, the population of Go Vap increased 2.87 times, average 13.66% increase per year. According to census population 01/04/2009 Go Vap district is 515,954 people.

Population: 515.954 (Census 1/4/2009) Density: 24.640 people /km²

Competition:

In terms of general coffee shop competition in the trading area in Go Vap district, there are about 150 coffee shops and they have been evaluated at a total of 12,000 square meter (150 x 80 square meter)

Attitudes Of The Trading Area Toward Having A New Business

The new coffee shop has increased the trading area and has shown a positive attitude toward development of the area. Therefore, establishing coffee shop in Go Vap District area is good and satisfied of that anxiety. In addition,it is convenient because it is near a center of Go Vap district

2. Specific Site

Accessibility

We choose a house for rent which located 196C Nguyen Thai Son with Lethbridge is 98 square meter, 2 floors and cost is 15 million VND for each month. This place is very convenient because it’s near market, offices, schools and university. Moreover, this house just need fix and decorate something so it helps business save fixing cost

Site Costs

The specific site costs prediction includes the following:

Group8- The EFFOC coffee business plan Page 14

Page 15: Perfection of Small Business Project

The site area is 98 square meter (7 x 14) with 2 floors. The contact will be signed with 5 year. Moreover, the rent expense is 15.000.000 VND for each month in the first year.

After first year, the rent expense will increase 1.000.000 VND every year by host’s requiring. By this mean,- The second year is 16.000.000 VND for each month- The third year is 17.000.000 VND for each month- The fourth year is 18.000.000 VND- The fifth year is 19.000.000 VND

Restriction: Limited 5 years for rent & pay first 3 months for host Site history: the shop was a grocery store in 5 years so can attract more

consumers or contribute the noticing Proximity to other businesses: near 7 coffee shops and 3 milk tea shops

The Figure 1: Selling Space

Floor 1

Floor 2

Group8- The EFFOC coffee business plan Page 15

Item PriceRent 135.000.000 VND per yearUtilities 12.000.000 VND per yearTelephone 6.000.000 VND per yearBusiness Taxes 24.555.182 VND

( 98.220.728 x 0.25)25% of Profit per year

City Business License 1.000.000 VND per yearTotal 178,555,182

Page 16: Perfection of Small Business Project

The Figure 2 : The EFFOC coffee shop in designing 3D:

1st Floor:

Group8- The EFFOC coffee business plan Page 16

Page 17: Perfection of Small Business Project

Group8- The EFFOC coffee business plan Page 17

Page 18: Perfection of Small Business Project

2nd floor:

Group8- The EFFOC coffee business plan Page 18

Physical Facilities

Page 19: Perfection of Small Business Project

Equipment, fixtures, and supplies are an integral part of business and list of these items is included below. The costs have been obtained from prospective suppliers.

EquipmentItem No. Each Total Value

Bar 8m 2,500,000 20,000,000Coffee machine 1 70,000,000.00 70,000,000Blender machine 3 10,000,000 30,000,000Fringe 2 8,000,000 16,000,000Shelf 2 3,000,000 6,000,000Sink 1 2,000,000 2,000,000Cash machine 1 10,000,000 10,000,000Water Filter 2 500,000 1,000,000Others 5,000,000

Furniture and FixturesSet of Tables & Chairs 25 1,200,000 30,000,000Air Conditions 4 7,000,000 28,000,000Salon & coffee table 3 10,000,000 30,000,000Sound 5,000,000 5,000,000Television 32inch 2 8,000,000 16,000,000Telephone 1 200,000 200,000Uniform 20 100,000 2,000,000Fixing & Decoration 15,000,000 15,000,000Computer 1 7,500,000 7,500,000

Total 293,700,000 VND

The Figure 3: Layout EFFOC Coffee Shop

Group8- The EFFOC coffee business plan Page 19

1st Floor

Page 20: Perfection of Small Business Project

Group8- The EFFOC coffee business plan Page 20

Financial

2nd Floor

Page 21: Perfection of Small Business Project

Feasibility Analysis

1. Market Potential:

- The estimate of average each person expenditure on eating, drinking and entertainment on survey is about 1.500.000 VND for each month - The population in Go Vap district for the target market is consisting of approximately 515.954 in 2009 (source: http://www.govap.hochiminhcity.gov.vn)

Using a percentage of 10 percent of total expenditure for drinking in Go Vap district

Our business estimated 15 percent should be conservative as The EFFOC coffee shop’s revenue - The market potential estimate is as follows: Population x each person expenditure x percent of expenditures for target market

= (515.954 x 20%) x (15.000.000 VND x 10%) = 154.786.200.000 VND

2. Market Share:

The number of all Coffee shop in Go Vap district is about 150 coffee shops and the average area is 80 square meter on prediction and statistic by experience

An estimate of EFFOC coffee‘s proposed market share is shown below:

This share should be decrease to 0.8 % because of the fact that the EFFOC coffee is new and will take some time to build revenues. The start - up delay should not be significant; however, the EFFOC coffee is quite famous Italian coffee so it’ll gain potential market share easily

Projected share in revenue = market share x market potential = 0.8 % x 154.786.200.000 VND = 1.238.289.600 VND

3. Projected Income:

Group8- The EFFOC coffee business plan Page 21

Page 22: Perfection of Small Business Project

Below are the projected income statements for the first five years of operation. Revenue figures from above are used as the basis behind this information, which was provided by franchisor of EFFOC coffee for a new store. Amounts and sources of expenses are as follows:

- Cost of Goods Sold 35% of sales (by franchisor)

- Wages and Salaries 1.700.000 VND for each employee

- Depreciation See schedule for calculation

- Repairs and Maintenance 10.000.000 VND for each year - Utilities 12.000.000 VND for each year - Phone 6.000.000 VND for each year

- Rent 15.000.000 VND for each month for the first year (And increase 1.000.000 each year)

- Legal fees 1.000.000 VND

- Advertising & Promotion 10.000.000 VND for each year (by franchisor)

- Business Taxes 25 % of profit (Taxation Department of City)

- Other Expenses 2% of Revenue (by franchisor)

The projected income for EFFOC coffee is found below.

Percent of sales, revenue, cost, salaries and others will increase about 1.5 for each year

Group8- The EFFOC coffee business plan Page 22

Page 23: Perfection of Small Business Project

Group8- The EFFOC coffee business plan Page 23

Page 24: Perfection of Small Business Project

Items Year 1 Year 2 Year 3 Year 4 Year 5Sales (VND) 1,238,289,600 1,857,434,400 2,786,151,600 4,179,227,400 6,268,841,100

Cost of goods sold (VND) 433,401,360 650,102,040 975,153,060 1,462,729,590 2,194,094,385Gross Margin (VND) 804,888,240 1,207,332,360 1,810,998,540 2,716,497,810 4,074,746,715Expense:          Wage & Salaries (VND) 351,600,000 527400000 791100000 1186650000 1779975000Depreciation (VND) 18,430,000 18,430,000 18,430,000 18,430,000 18,430,000Repairs and Maintenance (VND)

10,000,000 10,000,000 10,000,000 10,000,000 10,000,000

Utilities (VND) 12,000,000 12,000,000 12,000,000 12,000,000 12,000,000Phone (VND) 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000Rent (VND) 180,000,000 192,000,000 204,000,000 216,000,000 228,000,000Legal Fee (VND) 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000Advertising (VND) 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000Business Taxes (VND) 201222060 301833090 452749635 679124452.5 1018686679Other expense (VND) 8048882.4 12073323.6 18109985.4 27164978.1 40747467.15Total Expense (VND) 798,300,942 1090736414 1523389620 2166369431 3124839146Net Income (VND) 6,587,298 116,595,946 287,608,920 550,128,379 949,907,569VND => USD ($) 316.544815 5602.880654 13820.70733 26435.77027 45646.68761

Page 25: Perfection of Small Business Project

4. Depreciation Schedule:

Equipment YearItem No. Each Total Value Life (years) 1 to 5 6 to 10 11 to 15 16 to 20

Bar (VND) 15m 2,800,000 42,000,000 20 10,500,000 10500000 10500000 10500000Coffee machine (VND) 1 70,000,000.00 70,000,000 10 35,000,000 35,000,000 35,000,000 35,000,000Blender machine (VND) 3 10,000,000 30,000,000 10 15,000,000 15,000,000 15,000,000 15,000,000Ice machine (VND) 1 30,000,000 30,000,000 10 15,000,000 15,000,000 15,000,000 15,000,000Fringe (VND) 2 8,000,000 16,000,000 5 16,000,000 0 0 0Shelf (VND) 2 3,000,000 6,000,000 20 1,500,000 0 0 0Sink (VND) 1 2,000,000 2,000,000 5 2,000,000 0 0 0Cash machine (VND) 1 12,000,000 12,000,000 5 12,000,000 0 0 0Water Filter (VND) 2 500,000 1,000,000 5 1,000,000 0 0 0

Furniture and FixturesTables & Chairs (VND) 25 1,200,000 30,000,000 20 7,500,000 7,500,000 7,500,000 7,500,000Air machine (VND) 7 7,000,000 49,000,000 5 49,000,000 0 Salon & coffee table (VND) 3 12,000,000 36,000,000 20 9,000,000 9,000,000 9,000,000 9,000,000Television 32inch (VND) 3 10,000,000 30,000,000 5 30,000,000 0 0 0Telephone (VND) 1 200,000 200,000 5 200,000 0 0 0Computer (VND) 2 7,500,000 15,000,000 5 15,000,000 0 0 0Total 218,700,000 92000000 92000000 92000000

Group8- The EFFOC coffee business plan Page 25

Page 26: Perfection of Small Business Project

Group8- The EFFOC coffee business plan Page 26

Page 27: Perfection of Small Business Project

5. Financing: Start – up costs are found below

Item Cost Source Initial equipment & fixtures & other thing (VND) 293,700,000 See physical facilities sectionRent (required pay first 3 month) (VND) 45,000,000 See location sectionUtility deposit (VND) 1,000,000 See location sectionLegal fees (VND) 1,000,000 See Legal sectionAdvertising and promotion ( first 3 month) (VND) 2,520,000 See Promotion sectionTotal Start-up cost 343,220,000

6. Cash Flow Statement

Quarter Endings 30-Jun 30-Sep 31-Dec 31-MarCASH INFLOWSSales 309,572,400 309,572,400 309,572,400 309,572,400Equity Investment 0 0 0 0TOTAL CASH INFLOW 309,572,400 309,572,400 309,572,400 309,572,400CASH OUTFLOWSEquipment & Supplies 293,700,000 0 0 0Inventory 108,350,340 108,350,340 108,350,340 108,350,340Wages & Salaries 30,200,000 30,200,000 30,200,000 30,200,000Advertising 6,000,000 2,000,000 2,000,000 2,000,000Legal fee 1,000,000 Business Taxes 0 0 0 0Rent 45,000,000 45,000,000 45,000,000 45,000,000Repair & Maintenance 2,500,000 2,500,000 2,500,000 2,500,000Utilities 3,000,000 3,000,000 3,000,000 3,000,000Telephone 1,500,000 1,500,000 1,500,000 1,500,000Other Expense 6,191,448 6,191,448 6,191,448 6,191,448TOTAL CASH OUTFLOW 497,441,788 198741788 198741788 198741788NET CASH INFLOW -187,869,388 110,830,612 110,830,612 110,830,612

7. Financing

Page 28: Perfection of Small Business Project

The start-up cost for the EFFOC coffee shop is 343,220,000 and we will plus 40% of start-up cost as another cost for time return: 343,220,000 + (343,220,000 x 0.4) = 480,508,000

So the equity investments are divided 6 parts with the following proportion:

Name Percentage Investment on Profit

The financial investment on proportion

Nguyen Hong Ngoc 25% of Cost 120,127,000 VNDNguyen Quoc Tuan 15% of Cost 72,076,200 VNDTran Thi My Linh 15% of Cost 72,076,200 VNDLe Hoang My 15% of Cost 72,076,200 VNDTruong Thi Thanh Ngoc 15% of Cost 72,076,200 VNDDang Thi Cam Thuy 15% of Cost 72,076,200 VND

There is example of financial budget for Nguyen Hieu Ngoc who has the highest percentage investment (25%)

- he makes a loan in ACB bank with a contact has interest rate is 20% in each years, she was invested 20,127,000 and was borrowed 100,000,000 from bank

(120,127,000 – 20,127,000) x 0.2 = 20,000,000 VND

- If he has financial budget, she wouldn’t make loan from bank. And her return:

8. Bookkeeping / Accounting System

The computer system that will be purchased and take care of all aspects of the coffee shop, including the financial aspects. The accounting software program for small business will utilized to monitor and evaluate performance. Monthly financial statements will be prepared and received by Nguyen Hong Ngoc.

The payment for this coffee shop is only accepted by cash. There will be no credit granted.

1. Administrative structure :

Group8- The EFFOC coffee business plan Page 28

Personnel

Page 29: Perfection of Small Business Project

The EFFOC coffee is joint-stock including 6 shareholders. Moreover, Nguyen Hong Ngoc invest 25% of total capital ,5 remaining owners invest 15% of total capital so Nguyen Hieu Ngoc play a role as boss and other investors are manager

In addition, Time management of investors is divided 6 parts of time. In particularly, Schedule of managers

Time Monday Tuesday Wednesday Thursday Friday Saturday Sunday8h to 13h Thuy Tuan Thuy Tuan Thuy Tuan My – H.Ngoc13h to 17h30 Linh T.Ngoc Linh T.Ngoc Linh T.Ngoc Linh - Thuy17h30 to 10h My H.Ngoc My H.Ngoc My H.Ngoc T.Ngoc - Tuan

The organizational chart for the staff can be seen below:

The basic profit of Coffee shop will be divided by following:

Name Percentage Investment on Profit

Return of Investor

Nguyen Hong Ngoc 25% of Profit 24,550,182Nguyen Quoc Tuan 15% of Profit 14,730,109.2Tran Thi My Linh 15% of Profit 14,730,109.2Le Hoang My 15% of Profit 14,730,109.2Truong Thi Thanh Ngoc 15% of Profit 14,730,109.2Dang Thi Cam Thuy 15% of Profit 14,730,109.22. Employees Requirement and Training

Job Description :

Group8- The EFFOC coffee business plan Page 29

Boss (H.Ngoc)

Manager (Linh)

Manager (Tuan)

Manager (My)

Manager (T.Ngoc)

Manager (Thuy)

Page 30: Perfection of Small Business Project

Time Working—Store hours for the EFFOC will be as follows:- Monday – Friday, 8:00a.m – 10:00p.m- Saturday & Sunday, 8:30a.m- 10:30p.m

Duties:

- Employees have a mission like welcoming customers, serving drinking, care about customer’s opinion

- Any employees can be bartender because franchisor will train all employees

- So 2 employees have responsibility as bartender (experience is preferred) and 5 employees as servicer

- 1 security people has responsibility as taking and caring customers’ motorbike

- 1 worker has responsibility as cleaning tables, toilet.

Requirement:

- All employees have to train except worker and security- Have a right manner with customers- Always smiling & welcoming customers- Friendly, greets, care customers, good communication, carefully

Recruitment:

- Through advertising (Students are preferred)- Interviewing applicators

Salaries and Wages:

Position Number of Employees

Hours Salaries (VND)

Employees ( bartender & servicer)

14 7 ( part-time) 23.800.000(1.700.000 x 14)

Worker 1 14 (full-time) 2.500.000Security 1 14 (full-time) 3.000.000Total 16 29.300.000 VND

Policies:

- Go to work and go home in time

Group8- The EFFOC coffee business plan Page 30

Page 31: Perfection of Small Business Project

- Must to wear the store uniforms- Trial working in the first 3 months- The customers are always right- Employees work in 1 year for the coffee shop that will receive a gift

depends on reasonable expectations of employees in their birthday

1. Legal Structure

Group8- The EFFOC coffee business plan Page 31

Legal Requirements

Page 32: Perfection of Small Business Project

Internal Business

Nguyen Hieu Ngoc will be as representative for 5 other investors to register contact with Franchisors of EFFOC coffee. Moreover, Nguyen Hong Ngoc have to create contact with 5 other investors

Small Business and the owners are shareholder so we will use the Legal Structure as PARTNERSHIP. And we will use the second type of partnership that is General Partnership.

- Here’s advantages & disadvantages of business

Advantages DisadvantagesSimple and inexpensive to start

Unlimited liability

Pooling of financial and skill resources

Death of a partner terminates the partnership unless a provision to the contrary is specified in the partnership agreement

Tax advantage Greater possibility for disagreements (buy-sell agreements should be drawn up in the event that a partner wants to leave the business)

- To solve all disadvantages, we should create an appropriate partnership agreement includes the following provisions:

1) Duration of the partnership2) Administrative responsibilities and authority of each partner.3) Withdrawals and salaries of the partners.4) Provision for the arbitration of policy disputes among the partners.5) Provisions for the withdrawal of partners or the admission of additional

partners. 6) Amount of capital invested by each partner.7) Division of profit or loss. (Regardless of the amount of capital invested,

general partners must share profit or loss equally unless there is an agreement among the partners to the contrary).

8) Distribution of assets in the event of dissolution. ( As in the case of profits or losses, this distribution must be on an equal basis unless otherwise agreed on in writing).

Group8- The EFFOC coffee business plan Page 32

Page 33: Perfection of Small Business Project

9) Settlements in the event of death or disability of a partner. This might include a buy-sell agreement funded with business life insurance in amounts equal to the interest of each partner; thus surviving partner(s) would be assured of full title to the business, and the deceased partner's estate would be assured of receiving the full value of his or her share of the business. In the absence of such an agreement, the business might well be forced into liquidation to satisfy demands of the deceased partner's estate.

Investigate the Legal Requirements (External Business)

1. Registration and disclosure with Commercial Agencies or Ministry of Trade. Registration form includes:

- Application for franchise operations form of the Ministry of Commerce - The introduction of the franchise from - A copy of the certificate of business registration or investment certificate, for foreign franchisors can replace it with other papers of equivalent value - A notarized copy protection of industrial property rights in Vietnam or in foreign countries in case of transfer of rights to use for objects of industrial property rights have been granted protection titles

2. The required business licenses and incorporation *Registration in Department of Planning and Investment Ho Chi Minh City

3. Other laws regulating the operations of franchises

These are individual clauses which are required in franchise agreements:

1. Term and Renewal 2. Site Selection 3. Franchisor Approval of Lease 4. Exclusive Territory 5. Trademark Restriction 6. Training by Franchisor 7. Franchisor Help with Operating 8. Operating Manual 9. Advertising by Franchisor 10. Advertising by Franchisee 11. Advertising, Control of

Group8- The EFFOC coffee business plan Page 33

Page 34: Perfection of Small Business Project

12. Royalty 13. Franchisor - Right to Inspect 14. Franchisor - Right to Audit 15. Standard of Cleanliness 16. Standard of Operations 17. Noncompetition 18. Confidential Information 19. Permitted Incorporation 20. Termination by Franchisor 21. Termination by Franchisee 22. Right of First Refusal 23. Sale Approval by Franchisor 24. Sale of Equipment to Franchisor

2. Licensing

The licenses necessary to operate this college are as follows :

Name of Licensing FeeBusiness license 1.000.000 VND per yearFranchising fee 30.000.000 for oneTotal 31.000.000 VND

3. Tax

This is a joint – stock company. Because it operate following adulation pattern, it don’t incur GST tax .The kinds of other taxes which it must pay per month such as :

Name of Tax FeeBusiness license 1.000.000 VNDBusiness Tax 25% of profit

Group8- The EFFOC coffee business plan Page 34