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 !"#$%$"&' !"#$%&'(#)* 52'(#2)* 9&4::* * ()*+,-'".'/%0..' +* 6* ;0*&8*.0* /010-2'345' ,-./000*1#2*3#42* ,60*1#2*78%2* ,<*1#2*78%2* 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 !"#$% !"##$%& 7"89$%&& ?"##$%& 8#"##2%& 8#"##2%& &'()*"'+% '$()&*$+(,(-.& '$()&*$+(,(-.&:& ;$%245&5-$)65& ;$%245&5-$)65& ;$%245&5-$)65& ;$%245&5-$)65&:& '$()&*$+(,(-.& ,(*"-"*.% /012$0$-(3)&3*&*04(-5&$)6&-$2(3+$&21$0,5& <1,(=10.&3*&*04(-5&$)6&-$2(3+$&21$0,5&-3&1$+>& +$%245&5-$)65& @-$0-&3*&3210$-(3)5& A)6&3*&3210$-(3)5& ;3,,1+-(3)&3*&$,,&,1*-&3=10&*04(-5&$)6&61,(=10.&-3& ->1&B01$-&/(--5C40D>&;3%%4)(-.&E336&F$)G& & A7: Delivery Route A: Main Facility B: Chatham University (Anderson Dining Hall) C: Carnegie Mellon University (University Center) D: University of Pittsburgh (Litchfield Towers) E: Carlow University (Tiernan Hall) F: University of Duquesne (Duquesne Union) 7.0 miles (Approx 25 minutes by car) 23 Appendix A Operations A8: Employee Shifts Employees can log into the “WhenToWork” system to see what shifts are taken and what is available. They will be able to pick up shifts according to their own schedule, and also keep track of their working hours. 24 Appendix A Operations A9: Attire / Uniform All employees working at our stands are required to wear a uniform (a customized t-shirt depending on which location they are working at). We believe this enhances a sense of unity amongst our staff and also conveys a sense of professionalism to our customers. Below is a sample t-shirt for staff working at our Lucky Tea’s branch at Carlow University. A10: Contracted Suppliers Wholesale Agreements !"##$%&'()*+&( !"#$%&$#'$(%% 123%,.*"4+50% A-05-.(%,/$05#+0% B.C)D*(E0%&-$% 2D-..C%H$//-C%3.7$(#+0% % ,-.$&/*$&(01'&&+&23/( &$)#*+$%,-$./0%% 6#*"-7.$"$8/-%+4)0%9:;%*<=%>%:?%*<=%@% 6#*"-7.$"$8/-%8488/-%5-$%05.$'0% &-$%F-$G-0% I.4#50%$("%0C.4)0% 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¤tPosition=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
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