The Mocha Cafe Is A Hookah Lounge Marketing Essay

The Mocha Cafe is a hookah lounge which is a very prosperous business co – owned by three people, Venkat Alavandi, Rishi Sachdeva, Kristina Goranskaya. The history behind hookah is it has been around for a millennium and was founded in the northern parts of India. Hookah has been a popular entity as of late in the U.S. and hookah cafes are now becoming a lucrative business. We are all equal shareholders in this business and we all have great experience in leading the company to the right path. We feel that we are very special in what we do and how we do it, the ability to give customers the best in hookah and food requires great amounts of patience and enthusiasm. The Mocha Cafe strives to be the best cafe/lounge in the Metro Detroit Area. The ethnic food collection that we possess is cooked by great chefs who are diverse in many ways.

According to our statement (mission statement) we strive to give you the best in our business, the flavors which are offered by our name the Mocha Cafe. The location gives the perfect environment for the people of Detroit and of the University Of Wayne State to get together and have a enjoyable time alongside a bowl of hookah. Our business is strictly focused on the service aspect which we believe that we can exceed the expectations of the customer and we believe that we can exceed the competition at any level. What will mostly set us apart from other hookah lounges is the ability to form our own flavors in our kitchen and then be able to serve it to you for smoking purposes.

Mocha Cafe is a very well organized business with managers that are very experienced and want to give customers the best products possible. Our goals and objectives are focused more towards customer satisfaction. Our objectives are to maintain high customer service, we provide the best in house hookah flavors which are custom made, help provide comfortable and a fun and safe environment, and we strive to be innovated and keep attracting more customers each and every day. We will be marketing our business in ways which are attractive and appealing to the general public as well as the younger generation which attend Wayne State University. We believe that if we market around Detroit and the suburban areas that we will catch on in popularity.

Mocha Cafe is a very special business due to the fact that we believe in top to bottom service. We believe that we must satisfy the customer before anyone else because they do bring the money. Since our main purpose is to cater to the Wayne State University students so we are focused on the products because we must make the product affordable and as high quality as possible. What we believe will eventually set us apart from other hookah lounges are the fact that we have custom made products, live deejay, dance floor, private rooms/VIP sections. As a hookah lounge we believe that financially we should be bringing in about 500,000 to 800,000 when the business is in its prime time. The amount of money made will help benefit the gross profit and will in turn help with the operating costs and other expenses which are regular throughout the year. The planning regarding the expenses for our start-up of the business include the building cost, kitchen cost, restaurant interior, tobacco, hookah sets, advertisement, furniture. The addition of private rooms/VIP is going to set Mocha Cafe apart because there is no hookah bar in the metro Detroit area which brings you the opportunity to bring in a crowd and have private seating to enjoy just between your friends and colleagues. We believe that our expenses will decrease in the coming years and will be the difference in the profit made by the business.

BUSINESS DESCRIPTION

The focus of Mocha Cafe as stated before is the ability to serve the customers with the utmost attention and take care of them as if they were family because they bring in the money which will help us in the long run. The long-term affects of owning a hookah lounge are in our favor because right now there is large rise in hookah cafes around the U.S. and hookah is being advertised around college campuses because the target is 18-24. These so called hookah cafes have sprung up in states where there is a strong law against smoking. We believe that as long as we stick around the Wayne State University campus we should be in good shape because we will be attracting the 18-24 crowds each and every year for as long as we are in business. The Mocha Cafe also expects to attract other types of crowds too such as the older crowd which ranges from ages 25-40.

The name of our business is the Mocha Cafe, a hookah lounge and an eatery. Our mission statement relates mostly to our customers and our expectations and goals that we should have for another when we look back at the statement. Our mission statement is, the vision of Mocha Cafe is to provide the general public with the best home style hookah flavors. Our goal is to provide a fun and comfortable college friendly atmosphere while enjoying your hookah. We are a hookah lounge that specializes in service to our customers. The ownership of our business is based on a partnership between Venkat Alavandi, Rishi Sachdeva and Kristina Goranskaya. The unique product we will be selling is the tobacco (shisha) for the hookah. Since we custom produce the products in our kitchen, we will be selling it at the front desk for a affordable price of $8.00 for 250 grams of the product which the customer pleases to buy.

The Mocha Cafe caters to all types of people who are looking for a good time in the late-night life. The price for each person is going to be $10 which is an affordable price since our competition loves to charge anywhere above $12 The potential customers that will be highly catered to are the college students from the surrounding areas but mostly students from Wayne State University. The location of Mocha Cafe is located 1.4 miles from the intersection of Warren Ave. and Cass Ave. The Mocha Cafe is located on the corner of Woodward and Edmund. The address is 2944 Woodward Ave.

The surrounding areas of Detroit are not economically stable, but it is a city that is going through a rebuilding time. The demographics of the city are 47.13% male and 52.87% females in the city. The 18 and over age group stands at a respectable 68.91% and the 21 and over age group stands at 64.71% of the population. These statistics show that there is a good chance for our business to prosper in this economy because of the percentages. The geography of Detroit is perfect because it is located by the river, it is perfect for transportation of products. Detroit is constructed like a perfect city but the crime rates which are through the roof make the normal traveler want to stay away. Those are some of the risks we will have to face during the span of this business because there are people that will not want to come to downtown Detroit because of the fear of something happening to them. That is one risk we have to take by building a business in downtown Detroit.

Our business the Mocha Cafe is a partnership, the three of us are very experienced in the areas in which we will be responsible. As managers we all have experience in leading a team to success. Venkat Alavandi is the financial officer and in charge of the entertainment and food, Venkat has great communication skills, interpersonal skills, and the ability to be a creative thinker. Venkat has a masters degree from Wayne State University in the area of business administration. Rishi Sachdeva is well established in the area of accounting and is responsible for the bookkeeping of the cafe. Rishi also graduated from Wayne State University with a master in accounting and finance. Kristina Goranskaya is very creative; detail oriented and organized which can help them for their business with creating new ideas to make their hookah lounge more successful. Kristina is a well rounded person and also a graduate of Wayne State University with a master in economics and management. The three of us are all from the Detroit area which suits us well because we are able to analyze the city without the need of outside advising.

MANAGEMENT AND OPERATIONS

Our company will earn it status and get noticed in a short period of time. Because of our great quality and customer service it won’t be too hard for us to gain more success. We can see us in the future as a strong and the most known hookah lounge in Detroit. We will provide our customers with great environment and will make sure to always keep them satisfied.

Organization chart

Night-time Managers

Venkat Alavandi & Kristina Goranskaya

Day- time Manager

Rishi Sachdeva

Cook

Cook

Cook

Waiters/Waitresses

Waiters/Waitresses

The Team

(Venkat, Kristina and Rishi)

Our team is very familiar with hookah, and the business industry. Kristina Goranskaya is very familiar with business since her parents owned different businesses; she knows most of the principles and the basics. Her dad had and still has a cafe/ restaurant in Russia, so she helped and learned from her dad since early age. She is studying business management and can take all the management responsibilities. She is also responsible for marketing, since she has a great experience in that field. Kristina has to be in charge of prices and the quality of products. Kristina and Venkat are both very creative; detail oriented and organized which can help them for their business with creating new ideas to make their hookah lounge more successful. Kristina has to make sure that customers are satisfied with their products.

Venkat Alavandi has great skills in business as well. He is responsible for finance, since he has a great background for that. He has excellent communication skills and a very creative thinker, which is great for our business because he can create new ideas to make our business better and more successful. Venkat has great interpersonal skills, which is great for our business because he will have to manage people and work as part of a team to solve problems. He is also in charge of entertainment and food. Venkat has to keep control over chef, make sure all of the food products are fresh and clean.

Rishi Sachdeva has a great potential in business industry, since he learned a lot about it. Rishi is in charge of accounting, all of the bills. Rishi has to keep track of all the money that come in and come out of the business. He has great technical skills, which include knowledge of relevant regulations and policies. He studies accounting, so he is a great potential for our business. Rishi is in charge of our inventory. He is the one, who is going to decide what our stuffs’ salaries are going to be like.

Our team is very positive and enthusiastic about our future. We pose the ability to work in fast-paced environment that requires a certain level of professionalism that all of us surround. All of us are great in multitasking; we will make sure that everything goes well and under control. We will communicate well and make sure we create a healthy and positive environment with our customers and for them.

Responsibilities/resumes

Director of Accounting

In charge of inventory

Salaries

Technical problems

Bills

Rishi Sachdeva

Financial Officer

In charge of entertainment and food

Venkat Alavandi

Marketing Officer

In charge of prices and quality

Entertainment and customers satisfaction

Kristina Goranskaya

For the first year, we will hire 3 chefs, who will work part- time. We will have 2 chefs working at nighttime, and only one chef working in the daytime, because most of our customers will be visiting us during later in the day hours. So we will make sure that our customers won’t have to wait for their food too long, that is why we will have 2 chefs at the most busiest time. We will hire 2 waitresses/waiters for the daytime, for the nighttime we are going to have 3 waiters/waitresses. We will most likely to have a busboy come in to clean up all the dishes and to wash floors and stuff. We are planning on making events maybe on the weekends, so maybe later as our business gets more successful and noticeable, we will have Dj come in and play music for our customers. We were also thinking about inviting belly dancers, but this most likely won’t happen in first couple of months because we will need some profit and more customers in order to pay off the expenses for Dj and belly dancers.

Advertisement and Marketing

We are going to advertise our hookah lounge through: magazines, TV commercials, newspapers, radio, billboards and web sites (including facebook, myspace and etc.). We are going to create flyers, and coupons with discounts and special events notice.

We expect our sales increase in first year. First month is going to be slow because we would have to spend a lot of money on expenses such as furniture, all the kitchen supplies, hookahs, lightening, interior design and etc.

For marketing, we are also going to sell our hookah and tobaccos for our customers. The price of hookahs will be somewhere in between $10 to $100. It will be great for our business.

Operations

We are going to attract new customers and maybe potential investors, we believe that the best customer service goes with the best quality of products. Our main goals are satisfy the customers and create the most affordable prices. Our target group is majority of Wayne State students; we are going to make sure that we give them quality and cheaper price. Plus maybe third month of our business or so, we will bring more entertainment in our business, with exciting belly dancers and great music. Our business is about eastern qualities. We will make sure to make our lounge different from others and bring more excitement in our customers’ lives.

GANTT CHART

May

June

July

August

Planning

*

Construction

*

*

Designing

*

Training

*

From our time line you can see that the most of the timing will be spend on the construction, since the place is not so new, we will have to make some major changes and rebuilding some of the parts of the building. We are aiming for planning to take us about a month; all the money and other issues will have to be negotiated in that period of time. Construction will take approximately a moth and a half. Interior design will take another month and stuff training couple weeks. Our business will be ready in approximately 4 months.

FINANCIAL PLANS (STATEMENTS)

(Starting Loan = $200,000 = Start-Up money)

Mocha Cafe

Balance Sheet

December 31, 2010

Assets:

Current Assets:

Cash $40,000

Accounts receivable 50,000

Notes Receivable 500

Inventory 10,000

Total Current Assets $100,500

Fixed Assets

Building and improvements $55,000

Less: Accumulated Depreciation – 2,000

53,000

Equipment $ 2,000

Less: Accumulated Depreciation – 75

1,925

Furniture and Fixtures $20,000

Less: Accumulated Depreciation – 1,000

19,000

$ 174,425

Liabilities and Owner’s Equity

Current Liabilities

Account Payable $30,000

Accrued Taxes $ 5,000

Accrued Salaries $50,000

Total Current Liabilities $85,000

Long-term liabilities

Notes Payable $15,000

Bonds Payable $15,000

Total long-term liabilities $30,000

Total Liabilities $115,000

Owner’s Equity

Common Stock $30,425

Retained Earnings $29,000

Total Owner’s Equity 59,425

Total Liabilities & Owner’s Equity $174,425

Mocha Cafe

Balance Sheet

December 31, 2011

Assets:

Current Assets:

Cash $65,000

Accounts receivable 83,000

Notes Receivable 3,000

Inventory 8,000

Total Current Assets $159,000

Fixed Assets

Building and improvements $55,000

Less: Accumulated Depreciation – 4,000

51,000

Equipment $ 3,000

Less: Accumulated Depreciation – 200

2,800

Furniture and Fixtures $20,000

Less: Accumulated Depreciation – 2,500

17,500

$ 230,300

Liabilities and Owner’s Equity

Current Liabilities

Account Payable $20,000

Accrued Taxes $ 6,000

Accrued Salaries $60,000

Total Current Liabilities $86,000

Long-term liabilities

Notes Payable $55,000

Bonds Payable $35,000

Total long-term liabilities $90,000

Total Liabilities $176,000

Owner’s Equity

Common Stock $25,150

Retained Earnings $29,150

Total Owner’s Equity 54,300

Total Liabilities & Owner’s Equity $230,300

Mocha Cafe

Balance Sheet

December 31, 2012

Assets:

Current Assets:

Cash $95,100

Accounts receivable 40,000

Notes Receivable 1,000

Inventory 15,000

Total Current Assets $151,100

Fixed Assets

Building and improvements $55,000

Less: Accumulated Depreciation – 6,000

49,000

Equipment $ 2,000

Less: Accumulated Depreciation -1,000

1,000

Furniture and Fixtures $20,000

Less: Accumulated Depreciation – 5,000

15,000

$ 216,100

Liabilities and Owner’s Equity

Current Liabilities

Account Payable $25,000

Accrued Taxes $10,000

Accrued Salaries $65,000

Total Current Liabilities $100,000

Long-term liabilities

Notes Payable $35,000

Bonds Payable $20,000

Total long-term liabilities $55,000

Total Liabilities $155,000

Owner’s Equity

Common Stock $35,100

Retained Earnings $26,000

Total Owner’s Equity 61,100

Total Liabilities & Owner’s Equity $216,100

Mocha Cafe

Income Statement

For the Year Ended December 31, 2010

Revenues

Gross Sales $402,000

Less: Sales Return and allowances $1,500

Sales Discounts 500 – 2,000

Net Sales $400,000

Cost Of Goods Sold

Beginning Inventory, Jan.1 $100,000

Merchandise Purchases $75,000

Freight $10,000

Net Purchases 85,000

Cost of goods available for sale $185,000

Less ending inventory, Dec. 31 -128,000

Cost of Goods Sold -57,000

Gross Profit $343,000

Operating Expenses

Selling Expenses

Salaries for salespeople $90,000

Advertising 5,000

Supplies 1,000

Total Selling Expenses $96,000

General Expenses

Office Salaries $60,000

Depreciation 750

Insurance 1,000

Lease(4 years) 55,000

Light, Heat, and Power 3,000

Miscellaneous 1,000

$120,750

Total Operating Expenses $216,750

Net Income before Taxes $126,250

Less: Income Tax Expense 10,000

Net Income After Taxes $116,250

Mocha Cafe

Income Statement

For the Year Ended December 31, 2011

Revenues

Gross Sales $467,750

Less: Sales Return and allowances $500

Sales Discounts 250 – 750

Net Sales $467,000

Cost of Goods Sold

Beginning Inventory, Jan.1 $128,000

Merchandise Purchases $83,000

Freight $15,000

Net Purchases 98,000

Cost of goods available for sale $226,000

Less ending inventory, Dec. 31 -166,000

Cost of Goods Sold -60,000

Gross Profit $407,000

Operating Expenses

Selling Expenses

Salaries for salespeople $90,000

Advertising 1,500

Supplies 500

Total Selling Expenses $92,000

General Expenses

Office Salaries $60,000

Depreciation 1,000

Insurance 1,000

Light, Heat, and Power 3,000

Miscellaneous 1,000

$66,000

Total Operating Expenses $158,000

Net Income before Taxes $249,000

Less: Income Tax Expense 15,000

Net Income After Taxes $234,000

Mocha Cafe

Income Statement

For the Year Ended December 31, 2012

Revenues

Gross Sales $549,200

Less: Sales Return and allowances $1000

Sales Discounts 200 – 1,200

Net Sales $548,000

Cost of Goods Sold

Beginning Inventory, Jan.1 $166,000

Merchandise Purchases $85,000

Freight $15,000

Net Purchases 100,000

Cost of goods available for sale $266,000

Less ending inventory, Dec. 31 -192,500

Cost of Goods Sold -73,500

Gross Profit $474,500

Operating Expenses

Selling Expenses

Salaries for salespeople $100,000

Advertising 750