This is a business plan that presents a new business opportunity Throughout my final semester, we worked in groups to identify a new business opportunity and layout a path for executing it. The new business opportunity had been positioned to generate a profit and distinguishable from incumbent products and services through its innovative nature.

1. EXPRESSO
Group 15
Summary business plan
MANT303

2. 1
Executive overview
Expresso is a mobile/web platform that connects buyers of coffee with suppliers. Its aim is to
improve service efficiency by receiving the order and payment before the customers even
arrive, giving them a no wait VIP experience. We want our customers to be able to kick-start
their days with premium coffee, anywhere, anytime with the touch of their fingertips. Not only
does Expresso give the customer simplicity but also the speed of a no wait experience. It also
provides the social feature for customers to rate the coffee outlets based on the quality of the
coffee and experience, of which they can share with friends. The application will display
excessive coffee menu information to suit the needs of a range of tastes. Expresso will support
real-time order tracking to ensure your coffee is served to you at a premium temperature.

3. 2
Table of Contents
1. Business Mission.............................................................................................................. 3
2. Target customers.............................................................................................................. 3
3. Basis of differentiation..................................................................................................... 3
4. Product/market scope....................................................................................................... 3
5. Revenue Streams and Monetization strategy.................................................................... 4
6. Key assets ......................................................................................................................... 4
7. Competencies.................................................................................................................... 5
8. Production........................................................................................................................ 5
8.1 Application software development...........................................................................................5
8.2 Creating and maintaining relationships with coffee outlets .......................................................5
9. Industry analysis .............................................................................................................. 6
9.1 Threat of substitutes.................................................................................................................6
9.2 Threat of new entrants .............................................................................................................7
9.3 Rivalry among existing firms...................................................................................................7
9.4 Bargaining power of suppliers .................................................................................................7
9.5 Bargaining power of buyers.....................................................................................................8
9.6 SWOT Analysis.......................................................................................................................8
10. Marketing analysis ......................................................................................................... 9
10.1 Segment.................................................................................................................................9
10.2 Target....................................................................................................................................9
10.3 Position ...............................................................................................................................10
11. Financials..................................................................................................................... 12
11.1 Summary Statement of Capital and Start-Up Expenses.........................................................12
11.2 Sources of capital.................................................................................................................12
11.3 Start-up Expenses ................................................................................................................13
11.4 Pro-forma Income Statement................................................................................................15
11.5 Net Sales .............................................................................................................................15
11.6 Operating Expenses .............................................................................................................17

4. 3
1. Business Mission
“Kickstart your day with coffee, anywhere, anytime at the touch of your fingertips.”
2. Target customers
Buyers: young professionals who are busy and want a unique, convenient and personalised
coffee experience through buying coffee on the go. We will connect them to coffee outlets
through our app in order to facilitate their own customized coffee experience different to the
currently accepted norm.
3. Basis of differentiation
• Personalised coffee experience- no wait, no hassle
• Pricing and detailing transparency
• Easily accessible peer-reviewed medium for purchase
• Cost-effective
• Convenient- no payment over the counter, in and out model.
• Express (option) Freemium- consumers can pay more for faster coffee.
4. Product/market scope
Product scope is specific to the singular application - hopeful to become a specialist and utilise
a currently undeveloped niche in the market/industry starting locally and eventually growing
nationally, with potential for expansion to cabinet-food ordering in future.
• Launch - single product/regional users.
• 1-2 years into existence - single product/regional users.
• 3-4 years into existence - two products/national users.
• 5 years into existence - two products/national users. T
The market scope is specifically refined and tailored to the out-of-home coffee industry, acting
as a facilitator for both buyers (targeting young professionals/students’ niche) and sellers (local
cafes and coffee cart businesses).

5. 4
5. Revenue Streams and Monetization strategy
We have three monetization methods that we will be pursuing from a customer stand-point, the
first being a 3% commission on sales through the app. This will be done by taking 3% of the
sale per unit sold. This commission will be charged to suppliers, so the cost is not passed on to
the consumers and users of the app. By doing so we can guarantee that prices will not exceed
the standard price for a cup of coffee as to not deter consumers by making the use of the app
more expensive. This revenue stream can be considered one of our main revenue sources and
is extremely important to the business.
Ad revenue is the second monetization strategy which generates further cash flow and
capitalizes the empty space within the app. With the expected growing consumer base, we can
see ad revenue increasing as the number of consumers using the app will increase. It is possible
to incorporate a paid promotion of other businesses within the ad space creating a more stable
ad revenue. With businesses having to pay to have their promotion shown on our platform.
The last monetization strategy is a freemium option involving a free and a paid version of the
app with advanced features to paid users. Advanced features include ad free, express coffee
(skips the wait line for expresso orders), and rewards. At $12.99 a month, this option can
provide the user base extensive privileges at affordable prices. This generates a recurring
payment monthly and provides stable cash flow and revenue. By making the app free at first
point of download, it allows consumers to familiarise themselves with the app landscape and
will increase the likeliness purchasing the premium version of the app. Through making this
an in-app purchase, it is more likely to capture consumers attention driving sales. With a goal
of 5% of the users in the first year in the premium option, we can see it growing exponentially
in future years.
6. Key assets
Expresso possess a range of key assets, our key asset being the mobile-based application that
connects buyers with coffee suppliers. Secondly, being the trusted relationship between
suppliers and consumers, which has been facilitated by Expresso’s peer to peer business model.
Expresso is protected intellectual property and a protected brand and reputation earned through
being a pioneer and innovator in the New Zealand coffee industry. Expresso holds a
combination of human and financial key assets also, including the dedicated and ambitious

6. 5
team assembled to create it, and the various revenue streams Expresso generates, paired with
original investments.
7. Competencies
• Expresso’s core competency is providing superior convenience and efficiency through
connecting busy, young professionals (buyers) with coffee outlets, without the hassle.
• Expresso brings value to consumers by allowing consumers to personalise their
experience of purchasing coffee on-the-go by matching their demand for coffee with
what is most convenient for them. Expresso adds further value to consumers by
providing transparency to the out-of-home/takeaway coffee market which includes the
price, environmental friendliness, waiting time, distance from the consumer’s location
and customer service.
• Expresso generates a strong relationship with both suppliers and customers which
ensures trust and enhances the overall experience for consumers and suppliers.
8. Production
8.1 Application software developments
• Employment of an application software development team, strict specifications must
be followed for the complex application to run with as little errors as possible.
• Bringing the free application online, available on app stores for both Android and
iPhone users.
• Constant maintenance and updates after app’s release minimise bugs and constantly
improve the user experience.
8.2 Creating and maintaining relationships with coffee outlets
• Approach outlets before the app development and present the benefits/opportunities our
app presents to them.
• Have a minimum number of outlets agreed to participate before app launch.

7. 6
9. Industry analysis
9.1 Threat of substitutes
The threat of substitutes for Expresso is relatively low. This is because there are currently no
apps that cater towards pre-ordering coffee in Dunedin, which is our primary market for start-
up. Although, we believe that our product and services are unique and beneficial enough to
succeed and prosper in the current coffee market, there are however some similar services
currently available that could be used as a substitute to Expresso.
Deliver Easy/Uber Eats
Although these food delivery services may not necessarily be directly competing with Expresso,
there are definitely still elements of substitutability between the companies. While Expresso
aims to advise its customers on decisions regarding coffee quality and waiting times, it will be
ultimately used to save time and effort by having the coffee hot and ready to go when the user
is. Deliver Easy and Uber Eats both works by delivering food products (including coffee) to
the customers desired address for a small delivery fee. Although both services have been
created with different intentions of how they will be used (on the go, ready for you vs delivered
to your door), they both serve the same purpose of eliminating time and effort to get your food
product. These services will compete in situations depending on how much time, and money
is of importance. For example, someone who was planning to use Expresso to get their coffee
on the way to work may decide they have a bit more time than usual and decide to get the
coffee delivered to them. Similarly, if a customer was keen to get their coffee quickly at home,
Expresso might be their service of choice as the coffee will most likely be ready faster, and the
customer avoids the $5-$10 delivery fee.
Coffee outlets own website/app platform
Although not a current major threat, Coffee outlets introducing their own online coffee order
platform with similar speed and efficiency to Expresso will be a direct competitor. The speed
and simplicity that customers can get their coffee are one of the leading traits that make our
service possible, and if coffee outlets start matching our speedy order systems then customers
will likely ignore all the other features of our app and order directly from their favourite coffee
outlet.

8. 7
9.2 Threat of new entrants
Barriers to entry for Expresso include capital requirement, and access to distribution channels.
Developing a mobile application requires a significant amount of capital ranging from $50,000
to $100,000 especially for more complex apps such as Expresso which will involve a mapping
system. As our upfront capital costs to build the application is relatively high, it forms a barrier
to entry making it difficult for new entrants to imitate. Expresso will also have first mover-
advantages such as having already built a network of suppliers that will be difficult for new
entrants to imitate, especially business relationships. This will be a barrier for new entrants to
access distribution channels. Another threat for Expresso could be imitation by bigger
companies. For example, an already well-established business such as UberEATS could see
our idea and realise its potential and then create a similar offering to its already established
market of customers. To combat this, we may have to look at getting a patent as it is the ideal
protection for barriers to entry.
9.3 Rivalry among existing firms
Expresso does not compete in the coffee market, it simply connects users with coffee outlets.
Since there are no existing firms that Expresso will be competing within the same industry in
Dunedin, rivalry among existing firms is very low. However, as we set to expand nation-wide,
there is at least one existing firm that has a similar business model. This firm is Onthegoapp1
,
which is also a pre-ordering mobile application for coffee. This firm is also a start-up based in
Tauranga, but is yet to kick off. Their Facebook page has a limited 137 likes and their Instagram
account has only 47 followers with no content. As this is the only existing app that is similar
to Expresso, there is low intensity of rivalry currently, but as this market grows, rivalry is likely
to grow with it.
9.4 Bargaining power of suppliers
Expresso’s suppliers are coffee outlets. By having a large network of suppliers, Expresso will
bring more value to customers by providing more choice and convenience. More suppliers
imply that the threat of substitution between outlets is high, lowering their ability to exert
pressure on buyers. Therefore, the bargaining power of suppliers will be low. A possible risk
that we anticipate from suppliers is if all of the coffee retailers started developing their own
online/app order system and eliminating the costs of a middleman (us). However, this would
1
Onthegoapp. (2018). Home | On the Go. Retrieved from https://www.onthegoapp.co.nz/

9. 8
require a lot of time and some money input from the coffee retailers, so they will likely not
bother with that type of venture.
9.5 Bargaining power of buyers
At Expresso we are very aware that this service will only thrive with critical mass. Expresso’s
margins on coffee sales are very small and so the Expresso concept relies on coffees being
purchased in high volumes for it to generate a worthwhile profit. Although Expresso doesn’t
cost the consumer anything, it is completely up to the consumer to decide whether our app is
worth ordering through, depending on factors such as time actually saved, and the value of our
information on each outlet/barista. If coffee consumers decide that it is easier to order their
coffee directly through the outlet rather than Expresso, Expresso will most likely fail. Therefore,
the bargaining power of buyers is high. As a consequence, it is crucial that customer
relationship management and customer feedback are taken very seriously in order to make sure
Expresso stays the logical option, first in consumer minds for ordering coffee.
9.6 SWOT Analysis
Strengths
There is a gap in the market that our product fulfills as there are no other direct competitors
that have the same offerings as Expresso, providing us with uncontested market space. A cost
related strength is that our business only really requires start-up costs. Although this will be
large, our on-going costs will be low. We believe that our unique selling proposition is a
personalised coffee experience that offers full transparency for consumers and is cost-effective
and convenient.
Weaknesses
A weakness that may lose sales is the large market of coffee drinkers that would be resistant to
adopting our technology. These people are an older demographic and would be known as the
late majority or laggards in the diffusion of innovation theory2
because they are sceptical or
resistant to change. Another weakness is that due to high start-up costs, we forecast that we
won’t generate a profit for the first few years.
2
Behavioural Change Models. (n.d.). Retrieved from http://sphweb.bumc.bu.edu/otlt/MPH-
Modules/SB/BehavioralChangeTheories/BehavioralChangeTheories4.html

10. 9
Opportunities
There is a noticeable trend based on the consumption of coffee in different demographics. Older
demographics consumer coffee socially (i.e. sitting down in the café), whereas younger
demographics have shown that coffee is consumed more as a ‘pick-me-up’, on the go drink.
There is a large opportunity for Expresso to be effective not only for residents of Dunedin, but
also visitors. Because of Forsyth Barr Stadium, Dunedin hosts a lot of major concerts and
events which bring thousands of people into Dunedin therefore customers for us.
Threats
The main obstacle that we face is the start-up costs required to develop our app which we
estimate to be $77,900. This would likely have to come from an investment from each of the
founders and from an angel investor. A threat to our business is the two companies in Dunedin
that have a big footing in the technology food ordering business.
10. Marketing analysis
10.1 Segment
Expresso’s ability to connect consumers with coffee much quicker offers us a very wide range
of potential consumers. Expressos customer base is incredibly broad and includes any coffee
drinking smartphone user. The variables we have used to segment our industry is age, time,
and lifestyle. Expresso’s segment by age lie generally around the 29 years old and under. The
age segment of 29 and under is best suited for Expresso as this represents the students and
young professionals. We are segmenting the market to those with low available time and aim
to provide value to this segment by providing convenience that allows them to save their limited
time for more meaningful activities. The lifestyle we are segmenting the market by is a fast-
paced, working lifestyle as opposed to a relaxed and unpressured consumer lifestyle. A fast-
paced lifestyle has a higher need for convenience which Expresso will deliver.
10.2 Target
Expresso will initially target the under 29, urbanized fast pace workers and students that are
coffee loving enthusiasts who require their daily fix. Our focus on this segment is driven by
the poor availability of time and the likelihood to adapt time-saving applications into their

11. 10
everyday life. This target market is also the most technologically adept who are most likely to
adopt and integrate new consumption habits, thus giving Expresso consistent customer base
from early on in the company lifespan. We will target this select group through mediums we
find most generate the most appeal, being primarily social media mixed in with some
advertising done through the University student magazine (as start-up based in Dunedin), The
Critic, as this will generate exposure to the student population. However, even with these
investments in advertising through social media and the student magazine, the basis of what
we hope grows the popularity of our product is word of mouth.
10.3 Position
Expresso positions itself as a solution to a problem consumers face when purchasing a coffee;
the time it takes to order and wait in line to receive a coffee. Expresso is positioning itself as a
brand that is looking to greatly improve an experience that consumers routinely go through.
Standing out in our target segment will be much more dependent on our advertising methods,
coupled with securing key cafes to run the physical provision of coffee. The positioning of
Expresso bases itself around the idea that we can offer consumers the ability to order and pay
for their coffee with merely the touch of an app and collect their cup of coffee from their chosen
provider instantly. Given that our concept has never been seen in this market, if we can at
minimum deliver a suitable product, it should serve as the greatest point of difference for
standing out/cut through. Our highest priority will be to secure key contracts with North
Dunedin cafes that deal routinely with our target market, and ensuring that there are no
significant geographic gaps between vendors. Expresso is shaving minutes off of time-poor
coffee consumers manic morning routine or limited lunch breaks. Expresso is positioning itself
in a relatively uncharted market as nothing quite like this currently operates, making it
somewhat of a disruptive force to an industry that has been largely unchanged for years in
aspects such as this.

12. 11

13. 12
11. Financials
11.1 Summary Statement of Capital and Start-Up Expenses
11.2 Sources of capital
Owners’ and other investments:
As owners, we will invest $5,000 of our own money each (seven members). We are looking to
seek investment from Ice Houses “ice angles” they are a leading angel investor network that
invests in and supports exceptional teams that are exploiting global opportunities. Since 2003.

14. 13
Ice angels have invested $80million into 1263
companies. Their portfolio represents a broad
range of industries including software, mobile, gaming, web medical devices, biotech, and
advanced manufacturing.
11.3 Start-up Expenses
Buildings/real-estate
The costs of office space are based on a residency package at Innov8HQ in Dunedin. Is a
collaborative workspace, providing a supermarket of resources to house, connect and support
business through start up, growth and sustainability in the digital age. The price is $375 Per
month, therefore we will pay 1 month up front. 4
Location/administration expenses
Accounting fees at $250 per month, therefore we will pay 1 month upfront. 5
Insurance
$49 per month are the average costs of small business insurance across all industries in NZ. 6
Product/service development expenses
The estimated cost of the app development is $77,900. This estimate is generated through a
website that estimates costs based on features of the app based on 30,000+ project submissions.
The budgets are based on averages for hitting a high-quality standard for the final product.7
Advertising / Promotional expenses
We will be taking 40% of net sales (excl. GST) to fund marketing and advertising campaigns.
Other expenses
These expenses include uniforms for staff and stationary.
3
https://www.iceangels.co.nz/about-us
4
https://innovatehq.co.nz/
5
Accountant NZ. (2018). Accounts Services Pricing Plan. Retrieved from
https://www.accountantnz.co.nz/PricingPlan
6
https://www.bizcover.co.nz/public-liability-insurance-cost/
7
http://howmuchtomakeanapp.com/

15. 14
Contingency Fund
The contingency fund is 3% of expected sales in the first year.8
Working Capital
Current assets (expected sales) / Current liabilities (operating expenses) = 161,916/54,444 =
2.973. Calculations are as follows:
• 161,916 * 2.973 = $4,813
Working capital is small as we are a company that is based on an app we don’t hold inventory.
Businesses that provide intangible products or services, such as consultants or online software
providers, generally require much lower working capital.9
8
https://smallbusiness.chron.com/create-contingency-reserve-38236.html
9
https://www.investopedia.com/ask/answers/102915/how-much-working-capital-does-small-business-need.asp

16. 15
11.4 Pro-forma Income Statement
11.5 Net Sales
Commissions from Sales
Year 1:
There are 19,721 people in Dunedin aged between 20-29 (target market)10
. Sales are
based on the average figure that New Zealanders spend on takeaway coffee of $13.67
per week or $710 per year11
. We estimate capturing 20% of this market in the first
10
DCC. (2018). Population and demography - Dunedin City Council. Retrieved from
http://www.dunedin.govt.nz/your-council/long-term-plan-2015-2016/section-1-major-issues-and-strategies/city-
profile/population-and-demography
11
Register Retail Intelligence. (2018). Canstar Blue survey results: We're obsessed with coffee. Retrieved from
https://theregister.co.nz/news/2017/05/canstar-blue-survey-results-were-obsessed-coff

17. 16
year in which we will collect 3% commission per coffee sold. Calculations are as
follows:
Year 2:
Increase customer base to 50% through increased brand awareness and intensive
marketing efforts. Calculations are as follows:
Premium Subscription Sales
Year 1:
Premium subscription is $12.99 per month and $156 per annum. We aim for 5% of
our customer base in the first year to be premium subscribers.
3945 x 0.05 = 198 Premium subscribers: 198 people
198 x 156 = 30,888 Premium subscription sales: $30,888
Year 2:
Increase premium subscribers to 6% through marketing and rewards.
9861 (year 2 customer base) x 0.06 =
592
Premium subscribers: 592 people
592 x 156 = 92,352 Premium subscription sales: $92,352
19,721 x 0.2 = 3,945 Customer base: 3,945 people
3,945 x 710 = 2,800,950 Total coffee sales of our customer base
will be $2.8 million.
2,800,950 x 0.03 = 84,028 3% commission of sales equate to
$84,028 in the first year.
19,721 x 0.5 = 9,861 Customer base: 9,861 people
9,861 x 710 = 7,001,310 Total coffee sales of our customer base
will be $7 million.
7,001,310 x 0.03 = 210,039 3% commission of sales equate to
$210,039 in the second year.

18. 17
Advertising revenue
Year 1: $1000 of advertising revenue for general ads per month.
Year 2: Increase to $1500 per month through an increase in customer base and exposure.
GST
15% GST from net sales.
Cost of Sales: Professional services
20% of commission sales for maintenance, updates and running of the app.
11.6 Operating Expenses
Marketing
As a platform business, a heavy focus will be put on marketing to increase the customer base.
This will require large sums of money, therefore, we will be taking 40% of net sales (excl.
GST) to fund marketing and advertising campaigns.
Administrative Expenses
Accounting fees at $250 per month12
equating to $3,000 per annum.
Public liability insurance at $4913
per month equating to $588 per annum.
Utilities
Electricity used by Expresso is based on the average power bill per annum in Dunedin of
$2,12414
. The internet use will be based on an unlimited internet plan ($90 per month)15
.
12
Accountant NZ. (2018). Accounts Services Pricing Plan. Retrieved from
https://www.accountantnz.co.nz/PricingPlan
13
BizCover. (2018). How much does Public Liability Insurance cost? - BizCover. Retrieved from
https://www.bizcover.co.nz/public-liability-insurance-cost/
14
Switch. (2018). Infographic: What is the average New Zealand power bill?. Retrieved from
https://www.stuff.co.nz/business/industries/92920513/infographic-what-is-the-average-new-zealand-power-bill
15
Stuff Fibre. (2018). Unlimited fibre broadband from Stuff Fibre. Retrieved from https://www.stuff-
fibre.co.nz/?gclid=CjwKCAjwxILdBRBqEiwAHL2R84lfBGccsQHRGEZrA5TMZ4CNXUsCttEVqw7Bui97N
GWQrdVSchGpBhoCu7cQAvD_BwE

19. 18
Rent
As a platform business start-up, we only require a small single office 16m x 2 in Dunedin
CBD to conduct business from. This comes at a rate of $4500 per annum.16
Tax
The tax rate for income between $14,000-$48,000 is set at 17.5%.17
Income above $70,000 is taxed at a rate of 33%.
16
Harcourts NZ. (2018). Dunedin Central, 3/2 Stafford Street | Harcourts Dunedin | NAI Harcourts. Retrieved
from https://naiharcourts.co.nz/Property/859502/DU94989/3-2-Stafford-Street
17
Inland Revenue. (2018). Income tax rates (Tax rates and codes). Retrieved from https://www.ird.govt.nz/how-
to/taxrates-codes/rates/itaxsalaryandwage-incometaxrates.html