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The Hideout Cafe

BUSINESS PLAN By Danny George, Anam Iqbal, Caleb Kabasele, Collin

Roberton, and Taurai Zengeni

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TABLE OF CONTENTS

Section 1:

• Introduction 3

• The Keys of Success 4

• Organization’s Mission Statement 5

• Executive Plan 5

Section 2:

• Business Overview-Coffee industry 5

• Our Position in This Business 6

• The Competition 7

• What Makes Us Unique? 8

Section 3:

• Type of Structure & Culture 9

• Departments (Functional, Geographic, Product-based, Teams) 9

Section 4:

• Incentive Plans 11

• SMART Goals 11

• Leadership Roles 12

• Performance Management 13

Section 5:

• Individual Differences 14

• Decision Making 14

Section 6:

• Recommendations to Fix the Company’ Problem 15

• Conclusion 16

Works Cited 19

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Section 1:

Introduction

Building any type of business always has its fair share of complications, it could either be

financial problems, poor management skills or decision-making. While these are common

obstacles for all startup businesses, what about the people component of it? This is called

Organizational Behavior and it is defined as “the manner of in which individuals and groups act

and relate with each other in the workplace,” (Bizfluent, Wicks, 2018). Various factors influence

these acts and relations which are directly related to workers satisfaction. They involve

leadership style, corporate culture, and other workplace characteristics. In addition to these

influences, there are other factors that affect how workers feel about their job and performance.

The bottom line of organizational behavior is to explain and predict behavior at three different

levels of influence- the individual, group and organization level. All of these elements work

together to establish a culture within an organization and to provide direction and guidance for

employees. By understanding how to get the best out of employees, the company can become

more productive. Setting core values, mission and a vision are the most important initiatives

when launching a company. These three identity elements define what a company believes,

stands for and values where the company is going and why the company exists.

Establishing a well-defined organization culture heavily influences how the business

runs. We want to create a culture in which our employees do not fear and instead they speak up

about an issue. We can influence company culture by both clarifying the vision and value putting

them into practice on a daily basis. Defining a workplace culture will encourage and model

positive organizational behavior. The next thing we will focus on is the reward system. While a

paycheck is a sure way for our employees to show up to work, we want to implement other

motivational elements, so they can perform to the best of their ability. Studies show that,

“Employees are most likely to feel motivated when they see a clear link between the effort they

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put in and the reward they receive,” (Chron, MacDonald, 2018). The employees must consider

the reward system as fair and equitable to inspire them to increase performance. The way our

cafe works is by giving our student employees a chance to match a 5, 10 or 20 percent portion

of their paycheck to a secure account with the University of Texas at Dallas. We believe that

providing this stipend will help to motivate employees by showing them we have their back,

reinforcing our organizational culture.

In an organization, people make decisions whether that be in an individual or

organizational level. Communication mechanisms should be effective to enable managers and

employees to make informed decisions. All companies must respond to changing markets,

technical advances and customer demands to survive. Discussing the need for change in an

open forum will allow employees to ask questions freely without fear of reprisal. Managers must

set the standard for accepting and negotiating change.

Businesses do not thrive solely by successfully selling goods and services. Providing

positive experiences to employees is equally important as offering good services to customers.

Such experiences include how staff members engage in their work, how they interact with

colleagues, superiors, as well as customers. A supportive working environment will encourage

and model positive organizational behavior among employees, and thus ensuring high

productivity in the workplace. The Hideout cafe is determined to build a work environment that is

based on teamwork, give impeccable customer service, and provide a great ambiance for all of

us!

The Keys of Success:

1. Store design that will be both visually attractive to customers and efficient for operations

2. Employee training that is diverse to insure the highest quality of service

3. Culture and atmosphere that exudes health and happiness

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Organization’s Mission

The Hideout Cafe will make its best effort to create a unique place where customers can

socialize in both a comfortable and relaxing environment while enjoying the finest brewed coffee

in addition to organic sandwiches and baked goods. We will be in the business of helping

customers to relieve their daily stress by providing piece of mind through great ambiance, a

convenient location, friendly customer service and products of organic and fresh quality.

Executive Summary

“More of us are drinking coffee, and younger consumers appear to be leading the

charge,” Bill Murray, NCA president and CEO, said in an announcement of the report’s release

in conjunction with the convention. “A steadily growing taste for gourmet varieties is also driving

a wider trend toward specialty beverages.” The Hideout Cafe is determined to become a daily

necessity for local coffee enthusiasts, a place to dream as you try to escape your daily stressors

of life and just a comfortable place for people to meet up with their friends. It will capitalize on

the proximity to the University of Texas at Dallas to build a core group of repeat customers. We

will offer its customers the best prepared coffee in the area that will be complemented with

organic sandwiches and pastries as well as a quiet place to study for the students. The Cafe will

offer a five, ten or twenty percent cut on the employee’s paycheck towards tuition if they so

choose. In addition to providing the previous mentions, The Hideout Cafe will deliver our local

farmers with 10% of our revenue from the customer’s bill.

Section 2

Business Overview: Coffee Industry

Coffee is one of the most widely consumed beverages worldwide. Coffeeshops come in

a variety of forms but traditionally they are small establishments selling prepared coffee, tea and

other hot beverages. Our Cafe goes one step further and has added sandwiches and baked

goods to complement out beverages. We believe that the retail coffee business looks positive

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because there is a steadily growing consumer base of specialty coffee. The article, 10 benefits

of Starting a Coffee Shop in 2018, states “Demographics in the US, also points to millennials’

strong caffeine consumption, which ensures a strong demand on the retail market for the next

ten years,” (Coffee Shop Startup, 2018). The growth of customers demanding better coffee is

leading the way for in store sales and increasing profitability. The National Coffee Association

shows that we are one very caffeinated nation.

The graph below exhibits the numbers of coffee consumption in 2017.

According to the NCA, “This represents a gradual but fundamental shift in the American coffee

landscape, it’s coffee that is distinct from the commodity market, celebrated for unique flavors,

specific origins and the absence of defects,” (Forbes, Sethi, 2017).

Our Position

The Hideout Cafe will be heavily influenced by being a diverse community, relying on

effective communication, motivating one another and enabling favorable attitudes with each

• Of all the coffee consumed, 59% was specialty versus 41% non-specialty.

• Over the last 18 years, the number of daily specialty drinkers has seen the strongest overall growth in the coffee market. In 2017, that number hit 41%.

• The number of drinkers has increased 10 percentage points in the last year alone, up from 31% in 2016.

• When broken down into single servings, specialty drinkers consumed 2.97 cups of coffee per day in 2017.

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other. As a team we have discussed that starting a coffee business will be beneficial to the

community. We are all college students who would greatly benefit by having a coffee shop that

fits our social and emotional needs. It's bothersome to have a packed library or loud noises

disrupting our work. We are in a business to build to a lifestyle where customers can truly feel

that we value our organization, acquire high involvement within the employees for better job

performance and satisfaction.

The Competition

Today we stand witness to a new coffee era, filled with Frappuccino’s, Macchiatos and

Espresso. Specialty coffee is starting to rise which means increase in competitions. To better

illustrate the competition we will be experiencing, below is The Porter’s Five Forces Competitive

Landscape.

Depicted in the image, UKEssays elaborates that starting a business coffee is not hard, the

barriers to entry are low, there are alternative ways to gather caffeine because of the large

number of suppliers. Our biggest competitor will be Starbucks, they are the top of the hierarchy.

They specialize in creating various coffee drinks, study and work environment with an addition

to practicing positive organizational behavior. With that being said, a successful coffee shop

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needs to put time and effort to their employees. Creating a workspace that is goal orientated,

engages in efficient communication and enables one another to perform well will help with our

success. The way we manage our employees and truly show them we have their back is what

makes us different than our competitors. Coffee chains such as Starbucks does not provide

stipends for their employees which plays to our advantage. We also provide rotational study

periods in which our staff can focus on their exams. Our employees will be able to work with the

assurance that we have their back. This will hopefully improve employee loyalty and increase

production.

What Makes The Hideout Cafe Unique?

Our coffee business is unique in many aspects. The first being that we offer salary cut

towards tuition. If you are a student going to a local university, we will match a portion of your

paycheck and put it in a secured account with the college. This will make us much more

attractive because students will jump on this opportunity to work and pay off their student loans.

Majority of companies deliver scholarships that need to be met with certain criteria, but there are

no rules for this. All you do is choose a percentage (5, 10 or 20 percent) and work a minimum of

25 hours. The second thing we are offering is that with every transaction we do, 10 percent will

go to the local farmers. Many organizations state they are organic and provide a long list of

ingredients or stickers that say they are properly certified of being organic. Our customers will

see first-hand where their 10 percent will go to, the products will have a label including where

the local farm is, a small description on how that specific product is grown and a website or

phone number for additional questions. The third and final piece that makes Hideout Cafe

unique is the ambiance we are creating. We will do this by having quiet study places in addition

to the regular areas. These three factors are the main things that make our company unique

and will help to promote positive organizational behavior.

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Section 3:

Type of Structure & Culture

The structure of the company will be more mechanistic in nature but will have some

organic qualities as well. This type of structure allows for our company to have a more

centralized approach which helps to make sure all the employees are on the same page and so

that everything is consistent in our organization. We want to ensure that our inventories and

nightly deposits are done correctly so that if any discrepancies come up it is easy to identify

what happened. To do this, we will delegate one of us to manage weekly accounts of all

supplies. The other main controlled aspect of the organization will be scheduling and arriving on

time, as at the beginning there will only be the five of us and as such all of us will need to be

reliable to make the store runs smoothly. We want to make sure that one employee isn’t getting

burned out with too much responsibility, so this task will be delegated to someone else. When

we gain enough employees over time these responsibilities will continue to be important values

ingrained in our company to help set the pace that we work hard and mean what we say. We

want to make sure these basic rules are strict because they will make the job significantly easier

as you know exactly what is expected of you and what all you need to do. This means that over

time when new employees begin to work at The Hideout Cafe it is easy to train them on how to

do everything and can be shown a list of all of their responsibilities. When everyone works

together and knows they can trust everyone to do their job correctly with the clear

responsibilities it can be a more laid-back environment as no one needs to micromanage the

workers.

Departments

When we first open our doors, we will have one cashier, two workers helping to make

drinks, and one worker helping to make food. Over time when there are enough employees to

go around, we will also have a manager on each shift to help the employees and the guests.

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Seeing as creating culture is significantly harder than maintaining culture, we will also help one

another with whatever the others need and train new hires on how to do their duty to make sure

everything is running smoothly. With us being the founders, we will have the option to become

managers if we so chose to while also setting up advertisements to find more experienced

individuals to help run our operation. One of the more important parts of our culture will be

helping our employees that attend local colleges pay for college by matching up to 20% of their

paycheck to go straight to their account with the school to help pay off any loans they have. If

our team members opt into this program the money will be taken out of their paycheck and

matched by us to help them save and pay off college that much sooner. This will help exemplify

how much we value education, continually bettering oneself, and saving money to help plan for

the future.

Those that join the organization over the next few years will start at an hourly position.

We will focus more on promoting within instead of bringing in outside individuals for

management, to help keep our culture within the store so that we remain similar to how we

started multiple years down in the future. If we are successful, we will continue to be effective

while having a tight group of individuals that will truly care about the organization and help it to

be the best it can be. Our hourly employees will include our team members that work the regular

stations as well as the shift leaders, which will give our employees managerial experience while

not having to work 40 hours every week. Team members can move up to be a shift leader after

showing they are efficient in all stations and have earned the respect of management as well as

their peers through their performance and willingness to learn managerial duties. This will allow

them to have potential to move up in the structure while having plenty of time for their studies or

anything else they have going on in their life. The general manager will be at the top making

sure everything is done smoothly and helping out whenever and wherever needed. The shift

leaders would make sure the team members are doing their jobs correctly and helping with

deposits and inventory counts while the general manager will be in charge of ordering new

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supplies, scheduling workers, and keeping up with bank deposits to make sure all the drawers

are at the correct amount and we are not losing money. This separation of responsibility will

make sure every has a defined role. However, we also believe that our staff should help each

other in times of need.

At the Hideout Cafe we want to ensure that our guests have a positive experience within

our doors while being efficient and effective workers. This is why we want to strive to have all

workers find a station they enjoy and are efficient at, but also have the knowledge of how to do

other stations so that if they are needed to assist other stations they have the ability to do so.

This will also help increase job satisfaction as they will not be trapped in one single role and as

such they will not get bored doing the same things every single day.

Section 4:

Incentive

At our café, we pride ourselves in being able to have the best incentives for our

employees. A big perk for college students employed is that they can choose a percentage of

their wages to go towards their tuition (up to 20%) that we will match. This will be directly wired

into their school account, lifting some financial burden off their tuition or fees. We want to

encourage higher education and invest ourselves in the students since they are the future. In

addition, we are offering a 30% employee discount on anything we sell. As for our customers,

they are able to earn free drinks through our punch card system. Any time they purchase

anything from our cafe, they are eligible to receive a stamp. After obtaining 10 stamps they are

able to trade in the card for a free item of their choice. This helps retain our customers bringing

them back as they work towards their free menu item.

SMART GOALS

It is extremely important as an organization to set SMART goals. Our goals have to be

specific, measurable, attainable, reasonable, and time sensitive. One goal we have is to attain

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and maintain an 85% guest satisfaction. This will be measured by surveys displayed at the

bottom of their receipts for them to complete. The completion of the survey results in 15% off

their next order which further incentivizes them to complete our survey as well as speak highly

of us in the process. The same system applies for our employees, omitting the discounted

items. The employees will fill out their survey every month while leaving comments about the

organization. They are free to add any comments regarding improvements necessary to keep

them satisfied. This is an important part of our culture because we like to give those that may

not have as much power and equal say in the functions and efficiency of our business. Within

the 1st year of business we would like to be able to have at least 100 loyal customers which can

be identified through our rewards system. The way we plan to attain this is by investing heavily

in social media and direct marketing to increase our reach in the community. By the end of our

2nd year we hope to be a critically acclaimed and make Forbes as one of the most innovative

companies of 2020. The tuition paying incentives, our organic produce use, and our 10%

contribution to farmers sets us apart from all cafes making this goal very feasible. Lastly in the

3rd year we hope to partner with the local universities so that more students are aware of our

product and environment. This sponsorship will lead to more locations opened around different

university campuses. Our wider reach will help assist more college students and local farmers

while providing a great atmosphere for productivity.

Leadership Roles

Leadership roles in any organization is very important. We will be following the traditional

vertical hierarchy as do most restaurants/cafes in our market. There will be one general

manager who delegates to a group of shift leaders. Those shift leaders in turn oversee and

guide the team members that may not have as much responsibility as they do. The team

members are at the lowest end of the pyramid, but they may also report directly to the general

manager if they have any comments or requests that cannot be completed by the shift leaders.

The team members are Danny George, Collin Robertson. These 3 members of our group

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encapsulate characteristics that make team members so great. They are sociable,

approachable, and competent. Duties include greeting customers as they walk in, maintaining

positive attitudes, assisting in whatever medium they can, having a deep knowledge of our

menu and products and lastly cleaning up as necessary throughout their shift. They will also be

in charge of ringing up orders as well as constructing the drinks ordered. Our Team leaders will

be Caleb Kabasele and Anam Iqbal as they have strong qualities of leadership. The Team

leaders will be responsible for the same tasks throughout their shift while making sure that their

peers are also doing their best. Added responsibility includes efficient closing and opening

duties as well as increased knowledge of store operations so they can delegate tasks to utilize

team members Collin, Joselyn, and Danny to their full potential. I, The General Manager is the

overseer and essentially the day to day owner of the cafe. Due to experience i, Taurai Zengeni

will be General Manager and handle the back end of the cafe making sure money gets sent to

appropriate places and persons. General Managers are in charge of full operations including

inventory, staff management, hiring, training, payroll, marketing, analytics and also providing the

same level of customer service required by team members. A strong Manager is able to

motivate the employees while being stern and positive.

Performance Management:

The general manager oversees the performance of the employees. As mentioned

earlier, there are monthly reviews conducted by both the general manager and his subordinates.

Neither parties get to review what is said by the other. All the surveys get automatically sent to

the owner of the establishment and we dictate what to implement and what is to be addressed

and with whom. These performance reviews really do assist in keeping the organization on its

toes getting rid of any dead weight or unsatisfactory practices. The point of these monthly

reviews is to make sure all employees are accountable for their responsibilities. Making sure

everyone is held to the same standards makes working as a collective much easier.

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Section 5:

Individual Differences

Each and every one of us are unique. Physically, we have different skin colors, face

shapes, body types, and attributes. We also have different personality traits: agreeableness,

conscientiousness, neuroticism, extraversion, and openness to experience. These factors

contribute to our individual differences. Due to our diverse background of employees, we each

have a different personality trait that is critical in making our business successful. When different

problems emerge in the company, the individual differences of each person can be a factor in

finding the right solution. The more diverse our employees, the more backgrounds we will have

in solving the issue. For example, an angry customer walks up to Collin, the cashier, demanding

to know who got her drink order wrong. Anam, one of our shy and reserved employees, quietly

announces it was her. The customer escalates her voice and gets vengeful, letting other

customers in the store know she is outraged. Anam slowly starts to sob in embarrassment as

the customer calls her an idiot and unfit to be a barista. Caleb, who carries an agreeable

personality, steps up to the counter and slowly apologies and tells the customer her drink will be

remade. The customer still airs her complaint as Caleb calmly listens and sympathize with her.

He insures her he will make her drink and make sure it is crafted thoroughly. She begins to

compose herself and lets out a little smile. The customer thanks him for understanding and

handling the situation. While Anam carries a less emotionally stable personality, she tries to be

consciousness. She is always mindful of her fellow employees and memorizes the names of the

regulars who walk into the shop. We need our individual differences to work together as a team

and improve ourselves in productivity, creativity, and performance.

Decision Making

Individual differences could create bias in decision making for our company. A first issue

that could arise in the business for us is overconfidence bias. Since we are a café serving

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organic drinks and pastries, we have projected ourselves to be hot sellers. Many people in the

DFW area are all about organic food and supporting local businesses, something our café has

to offer. We may become too confident in how well our business is doing from the volume of

customers that come into the store the first couple months, that we neglect what has become

trendy at other coffee shops. That could result in losing some business aka profits we need to

continue running our café. We do not want to be operating at a loss, so we will hand out surveys

to random customers, asking them what they would like to see on the menu in the future and

carefully consider or fulfil consumer need. Another issue that could emerge is hindsight bias. It

is understandable that if our café is plummeting in sales, nobody wants to take the blame for

being in the red. Members may start making claims that they knew beforehand that the products

were poor choices for the market. We will eliminate this issue by hiring a consultant who will

look into our company every six months to check our progress and identify any mistakes we

have made while making a decision. Anchoring bias and confirmation bias may occur when we

are experimenting new drinks to offer at the café. If we are relying on one research that says

putting pomegranates in lattes are good but ignore anybody else that opposes mixing

pomegranates in lattes, which leads to a confirmation bias. We are not paying attention to those

research that do not match our data and only focus on facts that will confirm our decision. Our

solution to that would be have an independent research team who will make suggestions on our

new products.

Section 6:

The Fix

While we are very enthusiastic about the potential of the company, there are problems

and other needs that have to be addressed. We understand that in implementing our mission

statement of having a great environment for customers and employees, there will need to be a

way to balance relationships. One problem we have to address is how our employees and

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customers will interact with each other. These two different groups will be interacting a lot with

each other and we want to make sure they know how to contribute to an overall positive culture.

In order to accomplish this, we hope to have special events such as “employee talent shows”

where customers can get a better understanding on the individuals that are serving them. While

this event might be great for extraverted employees, we are also in the process of creating

events that will cater to all kinds of our staff. It is one of the most important things for our

company to be able to manage the interactions and create great bonds between the foundations

of our business. Another problem that we need to address is managing the schedules of our

student employees. Since most of our staff will consist of students in the nearby university, our

employee schedules will be greatly impacted by school events such as programs and exams.

This would be a problem because when testing periods arrive, we will be greatly understaffed. It

would be difficult for our employees to serve happily if they are stressed about their classes. In

addition, this would impact their interactions with customers. To resolve this issue, we would

institute overtime pay for our employees when they come in to work during those days. In

addition, we will implement “study rotations.” The mechanism behind this solution is simple. We

will provide a certain period of time (2 hours at work) for employees to study for their exams in

the day. While they are studying, other employees will be working and interacting with

customers. When the time period ends, we will then rotate the studying employees with the

ones who are working. The new workers will interact with the customers while the old ones will

get time to catch up in school. We understand that this solution might not be enough for our

employees to get all of their studying done. However, this will at least provide some time for

them to catch up with their school work and still get paid.

Conclusion

In conclusion, we are very excited about our company and hope to live up to our mission

statement. We hope to create a positive atmosphere where customers can be relieved of their

stress and employees enjoy interacting with them. This will be accomplished in multiple ways.

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First, we want to create the right type of environment as far as an aesthetic and calming

physical store. We also provide and serve finely brewed coffee in addition to organic foods.

Finally, we will have a unique employee base. We will hire from the nearby university and

employ students of diverse backgrounds and talents. As part of our compensation, we will

provide multiple rewards in addition to a system where we take part of their paycheck and help

with their tuition if they wish. Our company has competition in the form of many other

restaurants and cafes. We will compete in this market through the factors mentioned before

about the style of the store and hiring of diverse backgrounds. In addition to having unique

backgrounds, we hope to be able to hire special talents that can make the store reach another

level. We are gearing between a mechanistic and organic structure. While although each

individual structure has their faults, we believe that a mixture of the two will provide the right

balance. It is also very important for us to manage the performance of our employees. While we

believe in a family like atmosphere, we are not naive in the fact that numbers do not matter. We

believe in SMART implementation for our goals. The main goal for the company is to attain and

maintain an 85% customer satisfaction. We believe that this is a specific, measurable and

attainable goal. It is reasonable if our entire staff believes in the mission and if management is

great in conveying the owner’s desires throughout the company. We want to be able to attain

the goal within the first 6 months of the opening of the business. If the goal is attained, there will

be bonuses for the entire staff. Our main source of tracking management performance is

through the use of surveys conducted by both employees and customers. Customers will have

the ability to rate the services of our employees through their receipts and receive a discount on

their next visit. Employees will be able to fill out surveys that will help in the production of quality

managers. Both groups will also be able to provide feedback that management can then

consider improving the company. We have many incentive plans in the form of discounts,

prizes, stipends and we also believe that each individual is unique and very capable. The

company strongly believes that our staff will determine future success and put our faith in them.

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In implementing all of our strategies, we hope that our company will become very successful

and create a positive atmosphere in which both employees and customers can enjoy.

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“2017 US Coffee Drinking Trends Include More Gourmet, More Youth.” Daily Coffee News by Roast Magazine, 31 Aug. 2017, dailycoffeenews.com/2017/03/27/2017-us-coffee- drinking-trends-include-more-gourmet-more-youth/.