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24h Coffee Shop Model

Essay by   •  November 6, 2017  •  Case Study  •  1,002 Words (5 Pages)  •  519 Views

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Group 1:

24h coffee shop model

1, Summary:

Sleepless coffee shop is determined to become a coffee shop open 24 hour per day for everyone who cannot sleep at night want to find a safe place to go or a comfortable place to meet friends and do their stuff. With high security requirements, great service and good prices, Sleepless coffee shop will capitalize on its proximity to the Old Quarter to build a core group of repeat customer.

24 hours coffee shop business model in Vietnam is very rare because Vietnamese people still think the night is very complex but nowadays a lot of people cannot sleep at night especially designers or artists, because this is a time of abundant ideas and creative is free to fly. In Hanoi, there is lack of safe places for citizens to go out at night; a warmly and safely coffee shop will be a place to attract customers.

2, Project selection:

When our team started to choose project, we thought about 2 options:

Option1: The first idea is open an 24hours coffee shop and it also our choice because it is a rare business model in Vietnam, low competitors. Not simply a regular coffee shop, with slogan “You Press the Sleepless Coffee, We Do the Rest.” Sleepless Coffee will provide for customers full service in 24/7 through hot trend in food industry, special drink and warmly atmosphere.

Option2: The second idea, to avoid some risks, we will not open an 24 hours coffee shop. We just open a normal business model coffee shop but still provide service through hot trend in food industry, special drink and warmly atmosphere.

Option 3: We have a option , we just provide 24/7 service through online but not open a real coffee shop.

Now, the biggest question is:

“How can we make sure that we choose right option?”

So our team have a market research and we decide that option 1 is the best choice:

2.1        Through Checklist Model

Project

Criteria

High

Medium

Low

Option 1

Cost

x

Profit Potential

x

Time to Market

x

Development Risks

x

Option 2

Cost

x

Profit Potential

x

Time to Market

x

Development Risks

x

Option 3

Cost

x

Profit Potential

x

Time To Market

x

Development Risks

x

Throughout the above table,  Option 1 has high advantages => CHOOSE Option 1.

2.2.         Through Financial Model

a.        Payback Period

Option 1

Option 2

Option 3

Initial Investment

334,400,000

334,400,000

50,000,000

Monthly Cash Flow

30,000,000

27,000,000

4,000,000

Payback Period (Month)

12

12,3

12,5

Rate of Return

8.9%

8.08%

8%

We can see that payback period chart and rate of return of Option 1 is highest => CHOOSE Option 1.

  1. Net Present Value

Supposed that, we do all project in 12 months, the minimum return is 15% and the inflation is 4% (according to inflation rate of Vietnam in 2017)

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