Venture Capitalist Proposal Capital Assets Kirkpatrick

Venture Capitalist Proposal
Capital Assets Kirkpatrick
Joanna Chen – President
Weixian Yu – VP of Operations
Kevin Malcolm – VP of Marketing
Will Chen – VP of Finance
Joon-Yeop Kim – VP of Development
1 Table of Contents
Executive Summary
Operations
Marketing
Technology
Finance
Development
Ethics
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Sources
2 Executive Summary
Bubble tea, a beverage favorite for Pittsburgh
donated after closing, we can promise the
college students, is the perfect pick-me-up
highest level of food quality service.
drink. It is a light and refreshing alternative to
the conventional store-bought coffee offered on
Bubbly will also be offering a unique online
campus that will brighten students’ day. Many
payment service through our website, and
times, students will want to take a break from
phone
their busy day by rewarding themselves with
students can order their drink ahead of time,
some bubble tea but find themselves in a
choose time of pick-up and pay through the web
difficult situation because bubble tea is not
or their smartphones with any major credit/debit
offered
card, Venmo, Paypal, gift cards, or campus
on
campus.
With
a
back-to-back
schedule filled with classes, extracurricular
application.
Through
either
forum,
dollars.
activities, study sessions, and campus job shifts,
students just do not have the luxury of walking
Along with our easy-to-use online payment
off campus.
method,
we
believe
that
Bubbly’s
unique
product and thoughtful business plan has
At Bubbly, we believe that our on campus
positioned us advantageously in the bubble tea
bubble tea stands at Carnegie Mellon University,
market.
University of Pittsburgh, Chatham University,
graduate college students at our targeted
Duquesne University, and Carlow University will
schools, our research shows that 61.9% have
mitigate these issues for students. Not only will
tried bubble tea, and 33.3% would try some if it
we be offering a refreshing pick-me-up beverage
were accessible. This leaves our target market
alternative on campus, our beverages will also
at 53,200. In order to reach our target market,
be easily accessible for students. This is
Bubbly proposes three distinct marketing tactics
possible through our carefully chosen campus
during our start-up phase: tabling with free
locations, which will offer us maximum foot
bubbles and samples, social media campaign
traffic on each campus. Our product also follows
such as utilizing Pinterest, and catering for
an authentic and healthy Taiwanese recipe and
campus events.
is offered in 2 sizes, multiple flavors, and options
involve offering punch cards and promotional
of hot or cold.
offers, which will create awareness amongst
With fresh fruits and tapioca
delivered every morning, and our leftover food
new
Of the 56,000 undergraduate and
customers,
Other marketing initiatives
as
well
as
substantiate
3 customer loyalty to keep exiting customers
coming back for more delicious bubble tea.
In the next few years, we hope to open our
services to catering and providing our drinks for
campus events as well as expand our customer
base
by
adding
more
Bubbly
stands
on
campuses across the nation, which have limited
access to bubble tea.
In order to accomplish our goals, we are
requesting an initial investment of $1,050,000
from Capital Assets Kirkpatrick. Approximately
11% of this investment will cover our start-up
expenses,
including
the
refrigerated
truck,
stands
expenses
and
of
our
bubble
tea
machines, the development of Smartphone apps
and websites, and all necessary licenses.
Additional 80% goes to our first year operations
costs, which cover wages, costs of goods sold,
school partnership fees, office rent, insurance
cost, and other miscellaneous costs such as
marketing cost. The last 9% will serve as a
cushion for any unforeseen circumstances. We
expect to reach our breakeven point by the first
quarter in year two, and begin to make a profit,
which will grow for the years to come.
4 Operations
Location and Coverage
Warehouse and Storage
In our first year, Bubbly will target the 5 main
At our main facility located at 128 North Craig
Universities
Street, Pittsburgh PA 15213 (Appendix A3), we
Carnegie
Pittsburgh,
University,
around
Mellon
Pittsburgh
University,
Chatham
and
the
University
University,
Carlow
Area:
Unversity.
of
will have the main storage area for all our raw
Duquesne
ingredients (including tea leaves, tapioca pearls,
We
are
and fruits). This centralized location provides
granted agreements from each of the five
great proximity to all campuses, and allows
Universities to have our stands on their campus.
efficiency during the delivery process (Appendix
We have strategically chosen to locate our
A5). We are also granted storage space by each
stands at places on each of the campuses that
of the 5 Universities to allow us to store our
will provide us maximum foot traffic, providing
stands on their campuses after operational
great accessibility to our customers (Appendix
hours.
A4).
Quality and Suppliers
Stands
Bubbly takes pride in providing the best quality
Currently, we have 5 stands, which will be
products to our customers. Our tapioca pearls
deployed to each of the Universities for daily
are
business operation. Our stands will have the
Administration (FDA) approved supplier (Adia
dimensions of 33.5” x 94.5” x 85” (Appendix A
Taiwan) in Taiwan to ensure quality as well as
17). On the exterior of our stands, we will have
authenticity. We purchase our high-quality teas
our main logo for Bubbly, as well as the logos of
and fresh fruits from local Pittsburgh organic
each of the individual Universities; for example,
vendors: teas from Gryphon’s Tea and fruits
the clover logo for Lucky Tea’s at Carlow
from Cherry Valley Organics. Bubbly currently
University (Appendix A9). In our stands, we have
has a “quality assurance guaranteed” contract
1 bubble tea machine that is able to make 2
with all our suppliers. Under this contract, we
cups of bubble tea at one time, one refrigeration
ensure that only the freshest products of the
unit (Appendix A16) for storage for fresh fruits.
highest quality are purchased. We receive
By the register counter we will have containers
shipments for tapioca pearls once a month, tea
for toppings so customers can actually see and
leaves every two weeks, and for perishables like
pick what toppings they want.
fruits and syrups, we receive delivery from our
imported
from
a
Food
and
Drug
vendor twice every week to ensure the freshness
5 of our ingredients.
All of our ingredients are prepared every
morning at our main facility by our staff who
follow stringent protocols from the training they
receive during the hiring process (Appendix
A15). The ingredients are then loaded onto the
refrigeration units of our trucks and dispatched
to each of the 5 locations. We do not keep any
of our fresh fruits overnight at our stands, so all
left over fruits will be donated to the Greater
Pittsburgh Community Food Bank at the end of
each day.
Team/Staffing
We are open from 9am to 10pm, Mondays till
Fridays throughout the semester. Employees will
sign up for shifts using the WhenToWork system
(Appendix A8). All employees are required to
work a minimum of 10 hours and a maximum of
20 hours (maximum working hours on campus
for F1 International Students). Two employees
will be staffed at each stand during each shift.
Since Bubbly places a high value on our
customer’s positive experience, all employees
have to follow Bubbly’s code of conduct.
Training will be provided to all our employees to
ensure
that
food
products
are
handled
according to safety protocols. All employees will
also
be
trained
to
follow
standardized
procedures to produce drinks of equally high
quality to ensure consistency amongst our
products (Appendix A15).
6 Marketing
Location and Target Market
will be holding small, free samples of our flavors
Staying close to where our idea was born,
as well as bottles of bubbles to blow (Appendix
Bubbly operates within the campuses of five
B3-2). The bubble containers will bear the logo
Pittsburgh, PA universities.
The decision to
of that campus’ Bubbly branch as well as a QR
begin our operations in this area was as
code. When scanned, the QR code redirects the
strategic as it was sentimental, as bubble tea is
user to our website, where they can find out
quite popular among college-age consumers
about who we are, what we do, and when we
and there are no abundance of suppliers in the
launch.
area(s). By placing our stands along common
smartphone
class-to-class routes, we supply students with a
elaborated in the following technology summary.
convenient snack and they supply us with their
During this event, photos of the visitors will be
business.
taken and uploaded through Pinterest and other
From there, they can download our
application,
which
will
be
social networking sites to make our consumers
There
are
approximately
56,000
total
a part of our beginnings.
undergraduate and graduate students attending
our target colleges (Appendix B1-1).
Our
As for marketing ourselves post-launch, we plan
(ScotTea’s,
to create a relationship with the schools’ student
CaTeadral, KitTea’s, Duke Tea’s, Lucky Tea’s)
organizations. We plan to introduce a program
will help our product assimilate (Appendix B2)
in which a campus organization could have their
specialized
campus
identities
name and information featured on our cups in
Marketing Strategies
exchange for our catering services at one of
Even before our stands officially open, we plan
their events. This would be a win-win for both
to spread our name and generate anticipation
parties, as far as increasing exposure.
through a type of hype campaign called “spread
campus involvement also includes bi-monthly
bubbles spread joy” (Appendix B3).
contests in which our customers help to decide
A few
weeks before our opening, we will set up our
Our
our new, featured flavor.
recognizable stands on the five campuses.
However, rather than selling any products, the
stands will be emitting bubbles from rented
bubble machines (Appendix B3-1). The drifting
bubbles will bring attention to the stand, which
7 Competitive Advantage
Our focus at Bubbly is convenience (Appendix
B7). Our locations are optimal for the on-the-go
student to grab a quick, handheld snack before
class. Our mobile application and website allow
our customers to schedule a drink pick-up in
advance for an even quicker transaction. With
our competitive prices, we expect to be the #1
bubble tea supplier and among the most popular
snack-food establishments in the area.
8 Technology
Website
synced to a username to make the checkout
Our online presence will be centralized at
even quicker.
bubbly.com,
about our different flavors and the ingredients
where
users
will
have
the
opportunity to read about our company, find our
The user can, of course, read
that go into them through the app as well.
contact information, and apply for a job within
the company through a fun and easy to use
Payment Options
interface (Appendix C1-1). From there, the users
While our stands accept cash, credit, debit,
can select the website of their campus’ Bubbly
school funds, and gift cards, online ordering
branch.
accepts credit, debit, Venmo, Paypal, school
funds, and gift card codes. Users can opt-in to
Each campus’ unique website will show the
have their payment information saved on our
featured student organization at that time, any
secured network to speed up the payment
recent news, our menu, ingredients, location,
process in future purchases. They can opt out
and lastly, provide the ability to pre-order
of this feature at any time and their information
(Appendix
will be deleted.
C1-2).
Users
can
sync
their
username with any of our payment options and
We accept Visa, Mastercard,
and American Express cards.
set up a schedule for when they’d like to have
our bubble tea. Using a simple calendar UVI,
Support and Maintenance
our customers will be able to set up a weekly
Any bug reports or questions (unanswered by
schedule to have their drinks made and ready
the
for them (Appendix C1-3).
[email protected]
FAQ)
can
be
sent
by
e-mail
to
Our website will be
hosted through myhosting.com’s Business Web
Mobile Application
Hosting Plan. Our site will be secure through
Another vehicle with which we provide our
VeriSign’s
Authentication
customers with convenience is our mobile app.
purchasing
a
This app has an easy five-step process to help
certificate, we will have a Norton Secured Seal
you skip the line and be on your way (Appendix
on
C2). Just touch a few buttons to tell us what
customers website authenticity, ensure secure
you want, when and where you want it, any extra
and safe transaction, protect personal data and
directions or comments, and one of four
information, and reduce risk of malware and
payment options. The payments options can be
hackers.
our
secure
website,
Services.
sockets
which
will
layer
promise
By
(SSL)
our
9 Finance
Revenues
bubble tea machines, websites and smartphone
Bubbly expects total revenue in our first year of
apps, and city licenses.
operations to be around $920,000 (Appendix
D4). The figure was calculated assuming that
Bubbly’s operation costs in the first year will be
students
from
University
of
Carnegie
Mellon
University,
approximately 88% of first year costs, which
and
Duquesne
amounts to $840,000 (Appendix D3). This
University will buy 1 cup of bubble tea on
amount will account for wages, costs of goods
average per month, and we expect students
sold,
from Carlow University and Chatham University
insurance cost, and other miscellaneous costs
to buy 1.75 cups of bubble tea per month since
such as marketing cost. The wages amount to
bubble tea is more appealing to the female
$370,000 or 44% of the operation costs, and the
students there. In our second year of operations,
costs of goods sold amount to 28% of the
we expect demand to increase by 10% on
operation costs. Since Bubbly operates on 5
Carnegie
colleges,
Pittsburgh,
Mellon
University,
University
of
school
we
partnership
pay
fees,
colleges
office
annual
rent,
school
Pittsburgh, and Duquesne University and 12%
partnership fees of around $140,000 in our first
on Carlow University and Chatham University,
year of operations.
causing total revenue to increase to $1,010,000.
We
expect
our
total
revenue
to
surpass
Since there are no start-up costs in our second
$1,090,000 in our third year of operations, which
year of operations, the second year costs will
is calculated based on the expectation of a
lower significantly to $890,000, which takes into
growth rate at 7.5%. Please note that these
account that the costs of goods sold and school
figures take into account that Bubbly doesn’t
partnership fees will increase by 10%, the same
operate during weekends and holidays.
percentage as the percentage increase of our
projected second year revenue. The operation
Costs
costs will be approximately $940,000 in our third
Bubbly’s first year costs will be approximately
year of operations (Appendix D5).
$950,000. Around 12% of this amount will go to
our start-up costs, amounting to $112,000
Funding Request
(Appendix D2). The start-up costs will cover the
Bubbly will incur a net loss of $34,000 in the first
cost of our refrigerated truck, bubble tea stands,
year of operations, but we expect to break-even
10 by the first quarter of our second year and begin
the last 9% will serve as a cushion for any
to make profits.
unforeseen circumstances.
Bubbly
would
like
to
request
an
initial
investment of $1,050,000 from Capital Assets
Kirkpatrick. Approximately 11% of this amount
will go to our start-up costs. Additional 80%
goes to our first year operating expenses, and
11 Development
Stage 1: Establishment on Campus
During our initial phase, we will try to collaborate
Stage 3: Adding Smoothie and Snacks
with campus organizations on our respective
Through our extensive research, we found that
campuses to create and establish a relationship
students would like to see smoothies as well as
with the community. These relationships will also
snacks added to our menu. (Appendix E3) We
create opportunities for us to partner with
plan on adding many topping topping choices
organization and cater for events.
and flavor choices such as mango, lychee, and
lemon. For our snacks, we hope to bring
As a green company, we also are invested in
cookies, muffins, and scones to our Bubbly
creating an environmentally friendly spirit on
stands to complement our tasty bubble tea.
campus. We hope to raise this awareness
(Appendix E4)
through partnering with green organizations on
our respective campuses. These organizations
Stage 4: Competition for Expansion
may include but are not limited to Carnegie
Bubbles hopes to expand beyond Pittsburgh,
Mellon
of
specifically in other areas where there is a
Pittsburgh’s Blue Gold and Green, Duquesne
concentration of universities. This gives us
University Sustainability Initiative, Chatham’s
increased expansion opportunities and options.
School of Sustainability and Environment, and
By examining these considerations, Bubbles has
Carlow’s ECO Summer Camp. (Appendix E1)
done some preliminary research on our next
Green
Practices,
University
target city to be Boston.
(Appendix E5) We
Stage 2: Expansion on Campus
found that schools such as Tufts University-
We found that the number of students attending
Medford Campus, Massachusetts’s Institute of
University of Pittsburgh will give us a target
Technology (MIT), Berklee College of Music, and
market that is more than what one Bubbly stand
Cambridge College have no stands or shops
can handle. With our current maximum capacity
that focus on providing bubble teas specifically
of 450 drinks a day, we are missing out on 1000
on campus. (Appendix E6) In addition, students
drinks of potential revenue. Therefore we hope
attending these colleges have limited access to
that in the immediate future to expand on
bubble tea within walking distance. We hope to
University of Pittsburgh by adding another stand
recreate the success we have in Pittsburgh
on campus at an advantageously located area.
college campuses to those in Boston and
(Appendix E2)
possibly other college cities as well.
12 Ethics
Customers
most
rigorous
Providing our customers with excellent service is
regulations, as well as green standards. Bubbly
our number one priority at Bubbly. In order to
promises to uphold all agreements between our
provide safe, authentic Taiwanese bubble tea,
suppliers and us. We promise prompt payments.
we have strict sanitary protocols and quality
While we aim to provide more opportunities to
regulations that our employees and suppliers are
local
subject to, additional to the food/beverage
proposals from all potential suppliers and do not
service and storage protocol outlined by the
tolerate acceptance bribery of any sort.
vendors,
sanitary
we
protocols,
promise
fairly
quality
evaluate
Food and Safety Administration and Allegheny
Health Department. All of us at Bubbly take
Investors
maximum precautions to protect our user’s
Bubbly believes in consistent and transparent
privacy and personal information. We also do
communication between our investors and us.
not discriminate based on age, race, ethnic or
We promise to share detailed financial data with
national origin, creed, religion, political belief,
all our investors. Our accountant will follow
gender, sexual orientation, or marital status.
federal guidelines and use GAAP compliant
financial statements to ensure that all financial
Employees
information are accurately represented to our
We are an equal opportunity employer. All
investors.
employees are expected carry out their work
with high levels of integrity and honestly, while
Community
maintaining excellence and professionalism in all
Bubbly believes in doing our part for the campus
of their interactions with customers as well as
communities we are located at, as well as the
with each other. We hire strictly based on these
Pittsburgh community as a whole. We believe
qualities, and do not discriminate based on age,
wholly in keeping our planet green, thus choose
race, ethnic or national origin, creed, religion,
to only use biodegradable cups and straws in
political belief, gender, sexual orientation, or
our business. We aim to support to the student
marital status. We at Bubbly also do not tolerate
organizations at each campus by advertising
discrimination of any sort amongst our staff.
their events on our cups. We also hope to give
back to the Pittsburgh community by providing
Suppliers
opportunities to local vendors.
All our suppliers are required to adhere to the
13 Appendix A
Operations
A1: Organizational Structure
President
VP Operations
Staff
Drivers
VP Marketing
Advertising Events
VP Development
VP Finance
Expansion Maintenance Accounting Legal
A2: Personnel Structure
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A3: Main Facility
-128 North Craig Street, Pittsburgh, PA 15213
14 Appendix A
Operations
A4: Stand Locations
A4-1 Carnegie Mellon University: University Center
Our stand will be located outside the University Center of Carnegie Mellon University, under a
sheltered area right by the Merson Courtyard. There are multiple food vendors inside of the
University Center, as well as the gym and the swimming pool, which will definitely provide us
with great customer traffic throughout the day.
15 Appendix A
Operations
A4-2 University of Pittsburgh: Litchfield Towers
Our stand at the University of Pittsburgh will be located right under the overhead bridge by
Litchfield Towers. This provides shelter in case of rain. Litchfield Towers is a freshman
dormitory in a centralized location of the University of Pittsburgh, nearby the Hillman Library,
thus we are very confident that we will have a strong customer base by locating our stand here.
16 Appendix A
Operations
A4-3 Duquesne University: Duquesne Union
“Duquesne Union is the center of campus life and student activities” –Duquesne University
Website http://www.duq.edu/union/index.cfm
Our stand will be located at the entrance outside of Locus Street. This leads you to the second
floor of Duquesne Union – close to the student lounge and certain shops and dining. The
second floor also has important University offices such as Admissions Welcome Center, Card
Center, and Health Services, which would increase foot traffic around the Duquesne’s Union
entrance near our bubble tea stand. In case of rain, there is a sheltered area right by Duquesne
Union where we could have our stand.
17 Appendix A
Operations
A4-4 Chatham University: Anderson Dining Hall
Our stand will be located at the Anderson Dining Hall at Chatham University. Having multiple
food vendors located at this location (such as the Anderson Café which serves an array of
burgers and sandwiches), we believe that many students will want to grab a on-the-go drink
from our stand after their meals, be it breakfast, lunch, or dinner.
18 Appendix A
Operations
A4-5 Carlow University: Tiernan Hall
Our stand on Carlow University will be located right by Tiernan Hall, one of the main dining
cafeterias on the Carlow University campus, serving lunch and dinner throughout the week. Our
on-the-go bubble tea drink will be the perfect way for the students to end their meals, whether
they are headed back to class afterwards, or just hanging out with their friends.
19 Appendix A
Operations
A5: Distance from main facility to each stand
A5-1 Carnegie Mellon University: University Center
-0.6 miles (Approximately 2 minute by car)
A5-2 University of Pittsburgh: Litchfield Towers
-0.7 miles (Approximately 2 minutes by car)
20 A5-3 Duquesne University: Duquesne Union
-3.0 miles (Approximately 9 minutes by car)
A5-4 Chatham University: Anderson Dining Hall
-1.7 miles (Approximately 5 minutes by car)
21 Appendix A
Operations
A5-5 Carlow University: Tiernan Hall
-1.2 miles (Approximately 3 minutes by car)
22 Appendix A
Operations
A6: Daily Run-Down
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A7: Delivery Route
A: Main Facility
B: Chatham University (Anderson Dining Hall)
C: Carnegie Mellon University (University Center)
D: University of Pittsburgh (Litchfield Towers)
E: Carlow University (Tiernan Hall)
F: University of Duquesne (Duquesne Union)
7.0 miles (Approx 25 minutes by car)
23 Appendix A
Operations
A8: Employee Shifts
Employees can log into the “WhenToWork” system to see what shifts are taken and what is
available. They will be able to pick up shifts according to their own schedule, and also keep
track of their working hours.
24 Appendix A
Operations
A9: Attire / Uniform
All employees working at our stands are required to wear a uniform (a customized t-shirt
depending on which location they are working at). We believe this enhances a sense of unity
amongst our staff and also conveys a sense of professionalism to our customers. Below is a
sample t-shirt for staff working at our Lucky Tea’s branch at Carlow University.
A10: Contracted Suppliers Wholesale Agreements
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25 Appendix A
Operations
A11: Licensure
•
•
•
Allegheny County Health Department Food Permit (Mobile vendors)
City of Pittsburgh – Mobile Vehicle Vendor License
5 Universities (Carnegie Mellon University, University of Pittsburgh, Carlow University,
Chatham University, Duquesne University)
o We are granted agreements from each of the 5 Universities to have our stands on
campus
A12: Insurance Policies
•
•
•
•
Property insurance
General liability insurance
Worker compensation insurance
Food contamination insurance
A13: Food Handing Procedures
Our contracts with our suppliers ensures stringent protocols, such as those outlined by the
Food and Drug Administration (FDA) recommended Hazard Analysis & Critical Control Points
Assessment (HACCP), are promised in all the products we purchase
•
Suppliers [Food and Drug Administration (FDA) – Hazard Analysis & Critical Control
Points (HACCP)]
o Juice HACCP Regulation
o Dairy Grade A Voluntary HACCP
o Retail and Food Service HACCP
•
Employees
o Preparing food
 All employees that come in contact with food must wash their hands in
warm water with soap before handling food
 All surfaces must be wiped down and cleaned often
• Counter tops
• Cutting boards
• Utensils
o Storing food
 Food will be placed in the refrigerator within the hour after delivery
 The temperature of the refrigerator will be 40 degrees F or lower
o Delivering food
 Make sure all food is placed in the refrigeration units of the trucks during
delivery to ensure freshness
 Ensure minimal time between the transfer from refrigeration units in the
delivery trucks to the refrigeration units at the individual stands
26 Appendix A
Operations
A14: Janitorial Procedure
•
•
•
•
Empty all wastebaskets and replace liners
Disinfect and clean all counter tops
Clean all machines and utensils
Make sure all floor surfaces are kept clean and dry for safety purposes
A15: Employee Training Program
All employees have to go through an intensive 3-day program to prepare them for the job, and
ensure high levels of quality and consistency in the service provided to our customers
Day 1
• Introduction to Bubbly
o Who we are
o What we do
o Organizational structure
o Locations of stands
o Hours of operations
Day 2
• Run down of daily activities
o Preparation of fruits
o Preparation of tapioca pearls
• Learning of recipes
o Preparation of products
Day 3
• Interactions with Customers
o Handling special requests
o Handling complaints
• Written test
27 Appendix A
Operations
A16: Other Equipment
Frigidaire 2.5 Cu. Ft. Compact Refrigerator (Color: black) ENERGY STAR (LOWES) 25” x 18” x 17” $139 Automatic Bubble Tea Boba Cup Sealer Sealing Machine 21” x 13” x 12” $289.95 28 Appendix A
Operations
A17: Stands
Material Specifications:
-Double-wall, high-density, polyethylene construction
-Polyurethane foam-insulation
-Two fully polyurethane insulated storage compartments
-Removable menu board with erasable surface included
29 Appendix B
Marketing
B1: Target Market
B1-1
Colleges
Number of
Number of
Undergraduates Graduates
Total
Students
Carnegie
Mellon
University
6,200
5,800
12,000
University of
Pittsburgh
18,500
10,500
29,000
Duquesne
University
5,800
4,500
10,300
Chatham
University
1000
1,300
2,300
Carlow
University
1500
900
2,400
B1-2
56,000 Students Average American spends $60 per year on Fruit Juices $3,360,000 potential market 30 Appendix B
Marketing
B1-3
Potential Market
56,000
Interested 95% 53,200
Expected # of drinks bought per month = 1 x 53,200
= 53,200
B1-4
Survey Question: Do you drink Bubble Tea?
No, are you willing to try? Yes, how often? Yes No Once a year Once a month Once a week Couple a week Every day 7 1 3 7 1 1 1 Interested: 20/21 = 95%
31 Appendix B
Marketing
B2: Specialized Campus Identities
Carnegie Mellon University: ScotTea’s Duquesne University: Duke Tea’s University of Pittsburgh: CaTeadral Carlow University: Lucky Tea’s Chatham University: KitTea’s 32 Appendix B
Marketing
B3: “Spread Bubbles Spread Joy” Campaign
In order to build excitement about ScotTea’s and gain awareness of our brand amongst our
targeted customer base, we plan to have an all-day promotional event a month before the
actual launch of our business. This will be an event happening on the same day across all five
campuses, where we will have our one-of-a-kind Bubbly bubble tea stand at each of the five
locations. These will be the actual stands we will be using in our business, to allow our potential
customers to gain familiarity of our brand.
At each of our stands, we will have bubble machines (which we will rent for a day from an online
vendor) blowing out bubbles throughout the day. The bubbles will be floating all across
campus, acting as a perfect means to grab people’s attention. When people see the bubbles,
they will want to find out where the bubbles are coming from, and they will come to our stands.
Once they are at our stands, not only will they get a chance to try free samples of our delicious
drinks, they will also receive free bubble bottles.
B3-1: Bubbles Machine
33 Appendix B
Marketing
B3-2: Customized Bubble Bottles
On these bottles, we will have our customized school logos on the front, and on the back, we
will have our actual launch date, as well as a QR code. This QR code will bring the customer to
our mobile website where they can easily download our application for future order placements
when our business starts. Upon downloading our app, there will also be an automated alarm
system that will prompt the user to remind them of our business launch date five days before
the date, and of course on the actual day itself.
34 Appendix B
Marketing
B4: Loyalty Rewards Program
Each school that we are located at will have their own tailored design similar to the one above
for Carnegie Mellon.
B5: Marketing Plan
35 Appendix B
Marketing
B6: Marketing Costs
B6-1: Year 1 Marketing Cost: $5,000
B6-2: Year 2 Marketing Cost: $3,000
36 Appendix B
Marketing
B6-3: Marketing Cost Calculations Per School
Spread Bubbles
Spread Joy
Punch Card
Online Visability
Promotional
Offers
College
Organization
Collaboration
Samples
Carnegie
Mellon
University
University
of
Pittsburgh
Duquesne
University
Carlow
University
Chatham
University
Customized Bubbles
Bubble Machine
Printing $50 for 200
cards (x3)
Facebook/Pinterest
100 coupons for free
bubble tea
500
15
800
15
400
15
100
15
100
15
150
0
300
0
150
0
37.5
0
37.5
0
275
412.5
275
68.75
68.75
Printing pamphlets
$50 worth of
samples per month
(x4)
100
200
100
25
25
200
200
200
80
80
B6-4: Total Marketing Costs Across all schools
Spread Bubbles Spread Joy
1975
Promotional Offers
1100
Samples
760
Punch Card
675
College Organization Collaboration
450
Online Visibility
0
37 Appendix B
Marketing
B7: Competitive Advantage
38 Appendix B
Marketing
B8: Sample Menu (Carnegie Mellon University: ScotTea’s)
ZJV[[LHZ
I\IISL[LHÅH]VYZ
milk tea
‹ISHJRVYNYLLU[LH^P[OTPSR
‹Z[YH^ILYY`[HYVJVJVU\[THUNVOVUL`KL^
ISHJR[LH
‹THUNVS`UJOLLSLTVUHWWSLWHZZPVUMY\P[WLHJOZ[YH^ILYY`
NYLLU[LH
‹THUNVS`UJOLLSLTVUHWWSLWHZZPVUMY\P[WLHJOZ[YH^ILYY`
[VWWPUNZ
TVYLJOVPJLZ
‹Z[YH^ILYYPLZTHUNVLZIS\LILYYPLZYHZWILYYPLZRP^P
OV[VYJVSK&‹^HU[P[VYULLKP[&
VaVa
Each school that we are located at will have their own tailored menu design similar to the one
above for Carnegie Mellon.
39 Appendix C
Technology
C1: Website
C1-1: Home Page
C1-2: Campus Specific Page Site
40 Appendix C
Technology
C1: Website
C1-3: Calendar Option
C2: Mobile App
41 Appendix C
Technology C2: Mobile App
42 Appendix D
Finance D1: Funding Request Breakdown
Funding Request: $1,050,000 Cushion 9% Startup 11% Year 1 Operations 80% Items Amounts Year 1 Operations $ 839,828.75 Startup $ 112,294.00 Cushion $ 100,000.00 Total $ 1,052,122.75 43 Appendix D
Finance D2: Startup Costs
Startup Costs: $110,000 Licenses 5% Apps & Website 18% Truck 49% Carts & Machines 28% Items Amounts Refrigerated Truck $ 54,544.00 Customized Stands $ 30,000.00 Apps and Website $ 20,000.00 City Licenses $ 6,250.00 Bubble Tea Machines $ 1,500.00 Total $ 112,294.00 44 Appendix D
Finance
D3: Year 1 Operations Costs
Year 1 Operations Costs: $840,000 Other 11% School Partnership 17% Wages 44% Cost of Goods Sold 28% Items Amounts Wages $ 372,320.00 Cost of Goods Sold $ 238,121.00 School Partnership $ 137,377.50 Loyalty Program Cost $ 22,896.25 Office Rent $ 19,980.00 Paypal & Credit Card Cost $ 18,317.00 Insurance Cost $ 18,317.00 Training Cost $ 5,000.00 Marketing Cost $ 5,000.00 Maintenance of Apps and Website $ 2,500.00 Total $ 839,828.75 45 Appendix D
Finance D4: Yearly Revenues
College Year 1 Year 2 Year 3 CMU $ 234,648.38 $ 258,048.38 $ 277,353.38 UPitt $ 235,018.88 $ 258,418.88 $ 277,723.88 Duquesne $ 234,370.50 $ 257,770.50 $ 277,075.50 Chatham $ 104,742.63 $ 117,300.63 $ 129,021.43 Carlow $ 109,292.63 $ 122,396.63 $ 134,627.03 Total $ 918,073.00 $ 1,013,935.00 $ 1,095,801.20 Revenues are generated by sales at the stands and sales at on-campus events.
Sales at the stands:
•
•
•
•
Annual Sales = Monthly Sales * 8 (Not operating during breaks)
For CMU, UPitt, and Duquesne: Students buy 1 cup of bubble tea per month; 10% sales increase
for Year 2, and 7.5% sales increase for Year 3
For Chatham and Carlow: Students buy 1.75 cups of bubble tea per month (Females love bubble
tea more); 12% sales increase for Year 2, and 10% sales increase for Year 3
Maximum daily capacity for each stand: 450 cups of bubble tea
Sales at on-campus events:
•
•
2.5% of all student organizations hold one event per year with Bubbly
50 cups of bubble tea at each event
46 Appendix D
Finance D5: Yearly Costs
Items Year 1 Year 2 Year 3 Startup Costs $ 112,294.00 $ -­‐ $ -­‐ Wages $ 372,320.00 $ 381,089.60 $ 390,122.29 Cost of Goods Sold $ 238,121.00 $ 263,045.12 $ 284,330.33 School Partnership $ 137,377.50 $ 151,756.80 $ 164,036.73 Loyalty Program Cost $ 22,896.25 $ 25,292.80 $ 27,339.46 Office Rent $ 19,980.00 $ 20,579.40 $ 21,196.78 Paypal & Credit Card Cost $ 18,317.00 $ 20,234.24 $ 21,871.56 Insurance Cost $ 18,317.00 $ 20,234.24 $ 21,871.56 Training Cost $ 5,000.00 $ 5,000.00 $ 5,000.00 Marketing Cost $ 5,000.00 $ 3,000.00 $ 3,000.00 Maintenance of Apps and Website $ 2,500.00 $ 2,500.00 $ 2,500.00 Total Operations Cost $ 839,828.75 $ 892,732.20 $ 941,268.72 Total Annual Cost $ 952,122.75 $ 892,732.20 $ 941,268.72 Wages:
•
•
•
•
Stand Staff & Food Prep Staff: $9/hr
Drivers: $20/hr
For Staff & Drivers: Take 3% inflation into consideration
Executives: $16,000/yr
Year 1 Year 2 Year 3 Stand Staff $ 262,080.00 $ 269,942.40 $ 278,040.67 Food Prep Staff $ 10,080.00 $ 10,382.40 $ 10,693.87 Drivers $ 20,160.00 $ 20,764.80 $ 21,387.74 Executives $ 80,000.00 $ 80,000.00 $ 80,000.00 Total $ 372,320.00 $ 381,089.60 $ 390,122.29 47 Appendix D
Finance D5: Yearly Costs (cont.)
School Partnership:
•
•
CMU: 20% of gross revenue
Average: 15% of gross revenue
Costs of Goods Sold:
•
•
Usual bubble tea: 22% of price
Bubbly bubble tea: 26% of price due to high quality
D6: Three Years Breakdown
Yearly:
$1,200,000 $1,000,000 $800,000 $600,000 Revenues Costs $400,000 Profits $200,000 $0 Year 1 Year 2 Year 3 -­‐$200,000 Annual Costs Year 1 Year 2 Year 3 $ 952,122.75 $ 894,732.20 $ 943,268.72 Annual Revenues Annual Profits $ 918,073.00 $ 1,013,935.00 $ 1,095,801.20 $ -­‐34,049.75 $ 119,202.80 $ 152,532.49 48 Appendix D
Finance D6: Three Years Breakdown (cont.)
Quarterly:
$500,000 $400,000 $300,000 $200,000 $100,000 $0 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 -­‐$100,000 -­‐$200,000 Quarterly Revenues Time Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Quarterly Revenues $ 229,518.25 $ 229,518.25 $ 114,759.13 $ 344,277.38 $ 253,483.75 $ 253,483.75 $ 126,741.88 $ 380,225.63 $ 273,950.30 $ 273,950.30 $ 136,975.15 $ 410,925.45 Quarterly Costs Quarterly Costs $ 315,796.94 $ 206,002.94 $ 137,565.97 $ 292,756.91 $ 216,249.49 $ 218,749.49 $ 145,931.41 $ 311,801.81 $ 227,974.29 $ 230,474.29 $ 153,508.31 $ 329,311.83 Quarterly Profits Quarterly Profits $ -­‐86,278.69 $ 23,515.31 $ -­‐22,806.84 $ 51,520.47 $ 37,234.26 $ 34,734.26 $ -­‐19,189.54 $ 68,423.82 $ 45,976.01 $ 43,476.01 $ -­‐16,533.16 $ 81,613.62 *Seasonality: Bubbly doesn’t operate during breaks
49 Appendix D
Finance D7: Breakeven
Breakeven at Year 2 Quarter 1 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 -­‐$500,000 Accumulated Revenues Time Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Accumulated Revenues $ 229,518.25 $ 459,036.50 $ 573,795.63 $ 918,073.00 $ 1,171,556.75 $ 1,425,040.50 $ 1,551,782.38 $ 1,932,008.00 $ 2,205,958.30 $ 2,479,908.60 $ 2,616,883.75 $ 3,027,809.20 Accumulated Costs Accumulated Costs $ 315,796.94 $ 521,799.88 $ 659,365.84 $ 952,122.75 $ 1,168,372.24 $ 1,387,121.73 $ 1,533,053.14 $ 1,844,854.95 $ 2,072,829.24 $ 2,303,303.53 $ 2,456,811.83 $ 2,786,123.67 Accumulated Profits Accumulated Profits $ -­‐86,278.69 $ -­‐62,763.38 $ -­‐85,570.22 $ -­‐34,049.75 $ 3,184.51 $ 37,918.77 $ 18,729.24 $ 87,153.05 $ 133,129.06 $ 176,605.07 $ 160,071.92 $ 241,685.54 50 Appendix E
Development E1: Green Initiative Partnership
Campus
Green Organizations
Carnegie Mellon University
Carnegie Mellon Green Practices
University of Pittsburgh
Blue Gold and Green
Duquesne University
Duquesne University Sustainability Initiative
Chatham University
School of Sustainability and Environment
Carlow University
Carlow’s ECO summer camp
E2: Expansion on Upitt
•
•
Year 1 Revenue: $234,000.00
Year 1 Cost:
Items
Cart
Bubble Tea Machine
Wages
Cost of Goods Sold
School Partnership
Paypal & Credit Card
Cost
Insurance Cost
Total
•
Amounts
$
6,000.00
$
300.00
$
52,416.00
$
60,840.00
$
35,100.00
$
4,680.00
$
$
4,680.00
164,016.00
Year 1 Profit: $69,984.00
51 Appendix E
Development E3: Snack’s Survey Research
Do you want the option of buying snacks?
No Yes, what would you want 6 13 Candy Brownies or cookies Healthy options Cake Balls Scones Chips/Pretzel Greek Yogurt 1 5 1 1 3 1 1 E4: New Menu Offerings
Smoothie Flavors:
mango, lychee, lemon, apple, passionfruit, peach, strawberry
Toppings:
strawberries, mangoes, blueberries, raspberries, kiwi
Snacks:
cookies, muffins, scones
52 Appendix E
Development E5: Boston College Area
Boston College Area
E6: Boston Competitive Advantage
Boston Colleges Nearest Competition Walking time from College Tufts University-­‐
Medford Campus Sugar and Spice 34 minutes MIT Leisure Station 18 minutes Berklee College of Music Dong Khanh 33 minutes Cambridge College 33 minutes Sugar and Spice 53 Sources
Operations Allegheny County Health Department (ACHD):
http://www.achd.net/food/foodpermit.html
ADIA Taiwan (Tapioca Pearls)
http://www.adiatw.com/
ECO Products (Biodegradable cups and lids)
http://www.ecoproductsstore.com/
Lowes (Refrigerator):
http://www.lowes.com/pd_326294-47224LFPH25M4LB_0__?catalogId=10051&productId=3262657&UserSearch=frigidaire+2.5+cu.+ft.+c
ompact+refrigerator+%28color%3A+black%29+energy+star+&Ntt=frigidaire+2.5+cu.+ft.+comp
act+refrigerator+%28color%3A+black%29+energy+star+&N=0&langId=1&storeId=10151&rpp=24
City of Pittsburgh – Vendor Licensing:
http://www.city.pittsburgh.pa.us/bbi/html/vendors.html
Hazard Analysis & Critical Control Points (HACCP):
http://www.fda.gov/food/foodsafety/hazardanalysiscriticalcontrolpointshaccp/default.htm Pittsburgh Farmer’s Market:
http://pittsburghpublicmarket.org/for-customers/
http://pittsburghpublicmarket.org/for-customers/meet-the-vendors/
Western Plastics: biodegradable bubble tea straws:
http://www.westernplastics.net/mega_straws.php
The La Shop: bubble tea machine (automatic sealing):
http://www.thelashop.com/automatic-bubble-tea-boba-cup-sealer-sealing-machine.html
Marketing Carnegie Mellon University demographics: www.cmu.edu
University of Pittsburgh demographics: www.pitt.edu
Duquesne University demographics: www.duq.edu
Chatham University demographics: www.chatham.edu
Carlow University demographics: www.carlow.edu
Target Market: http://www.waterfyi.com/miscellaneous/money-spent-drinking-year/
Bubble Machine: http://www.partycity.com/product/bubble+machine.do
Bubble Giveaway Gifts: http://www.shindigz.com/party/CreateABubbles.cfm
Technology http://www.verisign.com/ssl/ssl-information-center/trust-verisign-seal/index.html
Finance D2: Startup Costs
Refrigerated Truck:
54 http://www.commercialtrucktrader.com/find/listing/2011-ISUZU-ECOMAX-102390188
Stands:
http://www.webstaurantstore.com/cambro-camkiosk-kvc856c-vending-cart-with-6-pan-wellsand-canopy/214KVC856C.html
Apps and Website:
http://www.howmuchdoesawebsitecost.com/e-commerce-web-design.cfm
http://osxdaily.com/2010/09/07/iphone-development-costs/
City Licenses:
http://www.city.pittsburgh.pa.us/bbi/html/vendors.html
Bubble Tea Machines:
http://www.thelashop.com/automatic-bubble-tea-boba-cup-sealer-sealing-machine.html
D5: Yearly Cost
Costs of Goods Sold:
http://www.bubbleteasupply.biz/bubble-tea-business-kits/business-starter-kit
Office Rent:
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=16719461&SRID=2559
957217&StepID=101
Paypal & Credit Card Cost:
https://www.paypal.com/webapps/mpp/merchant?kw=AGID_US_GSR1_TM_PPGNGen_EX_He
ad_KWID_KYWD_ADID_12916869968&mplx=AGID_US_GSR1_TM_PPGNGen_EX_Head_KWID
_KYWD_ADID_12916869968&mpch=ads&mplx=3484-98128-2056-93
http://usa.visa.com/merchants/operations/interchange_rates.html
http://www.mastercard.com/us/merchant/pdf/MasterCard_Interchange_Rates_and_Criteria.pdf
Insurance Cost:
http://go.galegroup.com/ps/retrieve.do?sgHitCountType=None&sort=RELEVANCE&inPS=true&
prodId=GVRL.businessplan&userGroupName=cmu_main&tabID=T003&searchId=R2&resultList
Type=RESULT_LIST&contentSegment=&searchType=AdvancedSearchForm&currentPosition=2
&contentSet=GALE%7CCX3418000030&&docId=GALE|CX3418000030&docType=GALE
http://go.galegroup.com/ps/retrieve.do?sgHitCountType=None&sort=DASORT&inPS=true&prodId=GVRL.businessplan&userGroupName=cmu_main&tabID=T003&searc
hId=R2&resultListType=RESULT_LIST&contentSegment=&searchType=AdvancedSearchForm&
currentPosition=2&contentSet=GALE%7CCX3439800024&&docId=GALE|CX3439800024&docT
ype=GALE
Development Campus Green Partnerships:
http://www.cmu.edu/environment/get-involved/committee/index.html
http://www.bluegoldandgreen.pitt.edu/
http://www.duq.edu/sustainability/
http://www.chatham.edu/sse/events/silentspring50/
http://www.carlow.edu/summerworkshops/eco/index.html
Boston Colleges: http://en.wikipedia.org/wiki/File:Boston_college_town_map.png
Competitive advantage:
http://www.sugarspices.com/
http://www.yelp.com/biz/leisure-station-cambridge
http://www.yelp.com/biz/new-dong-khanh-boston
55 56