Entrepreneurship and Innovation
Chik Lung Fung
Table of Contents
Part A – Analysis of the entrepreneur
I choose Nodi Coffee Shop’s Co-founder Derek as the entrepreneur I interviewed. Nodi Coffee Shop is a coffee shop locate in the business district in Hong Kong and they sell coffee and different foods including vegan foods. Derek happens to be here in Melbourne for a short business trip. The reason I choose Derek and Nodi Coffee Shop is because I used to work as a barista in the coffee shop and Derek is a friend of mine, so he is willing to share his idea and reliable information about the business with me. Another reason I chose Derek is because he shares a very passionate attitude towards coffee culture and he make me fall in love with not only the coffee bean but the culture behind it as well. Derek is good at grasping the trend and being sensible he taught me that market opportunities is what is fashionable in the market, what is popular, what people like now, what they don’t like, may indicate the direction of your business. Besides that, Sharp business sense, commercial sensitivity is what we can found on Derek. He told me that if I am interested in being a businessman, i should train my business sense like a training hound. A good business sense is the best guarantee for the success of an entrepreneur.
Hong Kong’s business district is very similar compare to Melbourne’s business district. They are both full of different business company and businessman. At that moment, the area has a couple of coffee shops, they are those typical coffee shop which have seats and newspaper to read. Derek told me that he saw an opportunity to open a coffee shop that is focus on the speed. Because the pace of normal businessman is usually in a hurry, they do not have much time to sit down and enjoy a cup of coffee. We can see that is happening in Melbourne as well. After Nodi coffee was opened. At first, the business was not that good because no one heard of the new coffee shop before. However, as time flows, people found that Nodi Coffee shop are really quick of making coffee, but the quality still remain at a high level, so people work at the business district start to buy Nodi’s Coffee. Today, Nodi Coffee Shop is one of the most successful coffee in Hong Kong’s Central business district. Derek told me that people are loving the fact that a coffee shop doesn’t necessarily need a sit or a newspaper, they can just order the coffee and just grab it and leave to work or doing their own things. Many other coffee shops are copy the style that Nodi Coffee Shop innovated. A major problem Derek encounter during start up is unclear positioning and unclear business direction. the first issue that must be considered when opening a cafe is the location of the cafe. To determine which type of customer your coffee shop needs to provide services, what these customers need, only if the positioning is determined, then I can decide how much money you need to invest, whether to choose to join, choose the location in the area, decoration style, menu products The type, the pricing of the product, the price of the raw material purchase, and the choice of marketing means before and after the opening must first determine the business direction, and then plan other details. But now many people are just the opposite. It is often the most fatal mistake to decide on the design and decoration of the location and then consider what type of cafe to open. Any business has people making money, but when you see others making money, you just want to do it, it is difficult to make money. Once you have set your goals, it’s easier to succeed by focusing on your goals. Another problem is the café will look messy at first. Derek tells me that While doing the external work that customers can see, they must also do the management and hygiene work inside the coffee shop. For example, coffee cups should be placed in order from left to right in the order of concentrate cups, card cups, and latte cups; coffee machines, grinders, etc. should be cleaned every day; all timers, thermometers, carved needles, etc. Items should be placed in a fixed position; often the ingredients in the refrigerator and the things on the bar, etc., all need the store manager to develop a code of conduct and strictly abide by. Only carefully organize the storefront and equipment of the coffee shop and formulate and abide by the code of conduct rules, so that the clerk can develop a good habit, so that the customers who step into the coffee shop are more comfortable, more conducive to the management of the coffee shop, and make the customer more Reassuring consumption.
Part B – Analysis of the Entrepreneur’s Business
Coffee has always been a main industry in Australia especially in Melbourne. In the 1950s, with the influx of European immigrants, high-quality espresso was introduced to Australia; with the introduction of espresso machines, cafes have developed in Australia, and the style and choice of coffee is also in full swing. Increasingly rich, People’s taste for coffee is also increasing, and now coffee has become a selection of drinks for many Australians. According to statistics, each Australian now consumes an average of 2.4 kilograms of coffee per year, compared with 0.6 kilograms 50 years ago (Inside small Business 2015). However, Melbourne is a very unique place and franchise coffee shop usually will not uphold to that long. In 2000, the ambitious Starbucks made its first foray into Australia. The company also deliberately developed a comprehensive coffee to please Australians picky coffee taste buds. But in 2008, the 85 Starbucks in Macao closed down 61, not the opponents of local coffee shops. Starbucks Coffee implements the Corporate system. The head office assigns store managers or hires managers locally. The salaries of employees are uniformly distributed from the Sydney headquarters. Any problems should be reported to the regional manager before being communicated to the headquarters management. After the decision, it will be released to the regional manager, then to the store managers and employees (Warwick Frost et al. 2010), and the most well-operated chain coffee shops in Australia use the Franchise system, and the parent company formulates a unified management policy and strategy. Execution, self-financing, self-employed, Australian brand Gloria Jeans is a very successful example. Therefore, our coffee shop will try to learn from Gloria jeans and avoid the mistake Starbucks made. Derek’s café is famous for its speeds and variety of foods including vegan foods and It attract a lot of customer. According News.com.au, Melbourne will soon become the vegan capital in the world. (news.com.au 2017) However, despite the number of vegans increasing, vegan café still only is a small portion in the large coffee industry.
1. Excellent sales staff with strong knowledge of existing products
2. Good relationship with customers
3. Good internal communications
4. Only café in the area sell vegan food
1. High rental costs
2. Place is too small (suggested if we want to open a café choose a place not too small)
3. Not enough staff
1. Loyal customer base
2. Other cafés are way more expensive
3. Opening another shop later this year
1. Competitors are trying to copy the way of how Derek run the café
2. Competitors have launched a new advertising campaign
3. Many other chain coffee shop are located near the café
The strengths of the café is the variety of vegan food options and freshly ground coffee to make wonderful coffee. Therefore, I think the café should focus on advertising the vegan and other foods provide by the café and the location to let more people know about the café. Besides that, lack of staff can be solved by training more barista or hired more people. The café should focus on building relationship with its customer because of more and more chain coffee shop opening and they should try to keep them loyal by giving discount or doing promotion. Last but not least, because the coffee shop is expanding, they should focus more on the new shop and try to advertise and notice new customer that their new coffee shop is opening and where it will be located.
Proposed Business Venture:
The business idea that is proposed here is to open a cafe which will serve wonderful coffees, usual café food and food items specially made to cater to different dietary requirements of the ever-changing customer base of today’s market. The dietary requirements that we are focusing on to start with are Gluten free, Lactose free, Vegetarian items, Vegan items and other varied requirements. The uniqueness of our business is to have a place where people with special food requirements can come and enjoy food options available to them adhering to their different dietary requirements. This was struck to our group as a great idea as when we visited the Gluten4U café earlier a couple of months back, we could hear customers referring to such food outlets as “heaven” for them as they can come and eat there without any stress while still getting heaps of food options available. The Café would sell food items made specially for customers who have any such requirements while making sure that contamination does not take place. This will have its challenges and limitations, but that would be discussed at a later point in this report.
The location decided for the business setup is Melbourne CBD, Possible location near a busy hub spot such as a train station or an important place so we can attract more and more customer traffic. Being in the CBD would also mean we can also attract the casual tourist traffic as CBD always has tourists visiting from all over the world.
As the business is supposed to be located in Melbourne CBD, getting all the supplies to deliver wonderful coffees and all the food items would be an easy and efficient task as lots of suppliers would be already serving the Melbourne CBD area, which will help us gain a good price and easy access to any supplies we may require.
If we talk about the transportation around our proposed business location, Melbourne CBD has a diverse public transport network as well as other means such as private cars, taxis and Ubers. This will mean easy access for customers to our business. Easy access will mean customers would not have to think too much about travelling to our business. If we are based in the CBD, we can also use the food delivery services in the future such as Menulog, Ubereats and Deliveroo. These all will give us an advantage to get our products to customers whenever and wherever they want.
Strategic Analysis of Business Idea and Sustainability measures:
Feasibility analysis is the method of evaluating if a business idea is workable, which means if the resources planned to be spent on it would be worth the gain or revenue in the future. It helps an potential entrepreneur like us to make a decision if the business idea is practical to start with. There are a few elements of the feasibility analysis such as Financial, Social, Environmental and Organizational.
Financial element includes the capital or money involved in setting up and running of the business in the beginning. If the business would be able to generate enough profit to cover its expenses and last in the market. If a business idea has a huge start-up cost and a big uncertainty attached to the future returns, an entrepreneur may decide to not go ahead with the idea as it is very risky and high chances of having a big loss exist. Social element includes if the product is right for the market is it going to be offered to. For example, you would not want to market a product that is against the culture, society or legal system of the market. Environmental element will include having a product or business idea that is not environment friendly, such as having a factory that would generate hazardous or toxic waste then indulge in bad practice of dumping it in the landfill or a water source like a river or ocean. Organizational element includes having access to sufficient supply of resources to go ahead with the business idea without any undue hardship. Simply, it means If a business has enough resources to even make the business idea a reality.
The plan to deal with emissions from the business is by installing solar panels and generating own energy as well as reducing the waste generated by using re-usable supplies, recyclable waste and using supplies made from recycled materials.
Marketing is a key element for any new business trying to set a strong foot in the market. This is also referred to as getting the word out to public, so the business can attract more and more customers which will mean more revenue and more profit in return. Our plan for the marketing of our business idea is to get a hype up in the public even before the launch of the cafe. This will give us a good start as we will have a chance to promote our business through word of mouth from the customers we get in the starting days of our business. Once we start getting customers, we plan to positively network with them to recommend our café to their friends and relatives. This way we can make sure we are getting maximum customer base. We believe that we should market our business to potential customers all the time and everywhere we can.
To preserve our customer base, we need to have great customer service, great coffee, great food and a great atmosphere in our café. This all will make sure that the customers feel welcome in our café and are willing to keep coming back, in turn be our loyal customer base.
The main target market for our business would be customers looking for a casual place to just have a coffee or to hang out with friends or family while having different varieties of food which is suitable for people with any special dietary requirement. The market size is quite huge as we can have customers just looking for a new coffee place or to be a casual, friendly and relaxed place for customers to spend time reading a book and customers looking for food items that suit their dietary needs while enjoying a freshly ground coffee. Advertising would be done through social media as we all know how impactful social media is for any business, word-of-mouth and advertising through local businesses by offering special deals and loyalty discounts to regular customers.
There are a few risks to our business as there would be for any new business. Main risk would be not able to make enough sales to reach our break even point. Break event point is when our sales would be able to cover all over fixed costs, variable costs and other overheads. Other risk would be from the competitors as there are many great coffee places, casual takeaways and restaurants in Melbourne CBD (our chosen location), So we need to make sure to make our business have a better reputation, great affordable prices and better coffee and food to keep attracting customers, instead of losing them to our competitors. Environmental risk would be using large amounts of energy from non-renewable sources and generating a large amount of waste, which would become a problem when it comes to disposal. Alternatives to this would be having solar panels installed to generate our own energy instead of totally depending on the conventional energy sources. Second alternative would be to offer reusable or environment friendly (made from as much recycled materials as possible) cups and other supplies used in our café.
Applying your learnings:
From all the above findings, we are sure that we have covered most of the basic elements that we would have to look upon while proposing our business idea and to make it a reality. The feasibility analysis made us investigate elements that would ensure that our business idea is realistic and practical to start with. This would also mean having a business that can stand strong in market while giving a fair and effective competition to our competitors. Marketing side is taken care by promoting the business before the launch and after the launch, even in the future after the business hopefully becomes successful. Marketing should never stop for a business. Marketing would also be assisted by doing promotions, special offers and generous discounts offered to our loyal customers through cheaper prices or free food product items after spending a certain amount on our products.
Feasibility analysis helped us understand that the business idea is practical and can generate good amounts of profit with the right mindset and approach. The social element would fit good with the Australian culture of coffees as well as specific food products for people who need something to fit their dietary needs. As more and more technology advances, the medical field can help people find what their body is sensitive to or allergic to, so such food solutions have a bright future ahead and a good potential to make big profits. Environmentally, the business idea would be a good fit as our idea is to reduce waste by either having reusable supplies or having them made from recyclable materials. Also, having proper waste disposal methods in place would mean least pollution created and minimum impact on the environment is done. Installing solar panels to generate own energy would be good as to use minimum conventional sources of energy as they are depleting day by day.
Market for our business is huge and lots of potential to make a good revenue exists. Market for anything related to food and drinks is always going to be there and we, humans would not be able to exist for long without food and drinks.
In conclusion, I would say that the business idea of having a café with the extra food options to cater for all customers including vegans, vegetarians, lactose intolerant and gluten intolerant would be a profitable and possibly a successful business idea to go ahead with. This would give the business a bigger market to sell products to as well as being the favourable café for a larger number of customers. More customers would mean more sales, more sales would mean more profit. Higher the profit the business can make, the easier it would be to break even and last long in the market. Marketing would need to be active and done all the time to make our business known to a larger customer base. This is implied by the saying that they can’t buy from you if they don’t know you exist (‘they” refers to the customers here). Even with the strong competition and other limitations, the business would have a high chance of surviving and being successful.
Peer Evaluation Table
Student Name 1. Vaibhav RAURA Self Assessment2. Chik Lung FUNG Self AssessmentPeer assessment Peer assessment NI S E NI/ S/ E NI S E NI/S/E
Performance Level X S X S
Worked collaboratively X S X S
Contributes to team meetings X E X E
Showed initiative X E X E
Showed commitment and responsibility X S X E
Showed respect for the team X E X E
Initiative and willingness to resolve conflict X E X S
% Contribution 60% 55% 40% 45%
217868588900This section has been added to build your team work skills and to address the issue of ‘free riders’ getting the same mark regardless of their contribution. This also means that based on your peer evaluation you may end up having different marks from your group member, even though you submitted the assignment in group.
020000This section has been added to build your team work skills and to address the issue of ‘free riders’ getting the same mark regardless of their contribution. This also means that based on your peer evaluation you may end up having different marks from your group member, even though you submitted the assignment in group.
NI Needs Improvement
Insides small business 2015, Coffee consumption in Australia- which, where when and how much, retrieved 11 September 2018, https://insidesmallbusiness.com.au/latest-news/coffee-a-national-obsession-which-where-when-and-how-muchLee Jolliffe 2010, Coffee Culture, Destinations and Tourism, Channel View, UK, pp.99 https://books.google.com.au/books?hl=zh-TW&lr=&id=LnpwfgQvAMsC&oi=fnd&pg=PA99&dq=starbuck+in+melbourne&ots=tH8kO5j57_&sig=eDBBwMsbtwG9cRUur69Imv4qODk&redir_esc=y#v=onepage&q&f=falseNews.com.au 2017, ‘Melbourne fast becoming the vegan capital of the world’, news.com.au, retrieved 11/9/2018
Questions used for the Interview:
Who are you and can you introduce yourself to us?
When did you have the idea to open a coffee shop with vegan food and why?
During the opening phase, is there any encounter?
Do you think there are any difference between Hong Kong and Melbourne?
What do you think about opening a similar idea café in Melbourne?
What elements do you think is the most challenging when opening a café?
What elements do you think is the most important when opening a café?
What do you think about Melbourne’s coffee industry and culture?
What area do you think opening a café in Melbourne is better?
How many staffs we should hire?
What kind of vegan food you think will be the best to sell?
Do you think we should do special coffee such as drip coffee?
Deakin Air Video Link: