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Tim’s Coffee Shoppe is located in Sunnydale, Illinois. Sunnydale is a mid-sized city with a busy business district and a large university and Tim’s is located smack dab in the middle of all the traffic. Tim’s Coffee Shoppe is in need of some much needed improvements and needs things to run more smoothly. Some of Tim’s problems were customer satisfaction, employee loyalty and marketing. The following pages have a detailed review of what Tim needs to become more successful. One of the most important things Tim needs to accomplish is a makeover of his human resource program to address employee training, thus creating better customer service as well as expanding the types of marketing he utilizes. If he follows suggestions he would have the opportunity to obtain his long term goals such as * To double revenue by the end of the current fiscal year. * To receive at least 95 percent positive customer feedback regarding the service we provide.
Regulations and Management
The attempt is to suggest to Tim’s Coffee Shoppe’s areas of weaknesses where subtle improvement to business strategies which can bring in the much desired and needed revenues and increase customer traffic. It is also an attempt to provide cost effective products through a change in supply and logistics for Tim’s Coffee Shoppe. The market segmentation is also to be altered to expand his customer base.
The vision statement chosen is: “To ensure that each guest receives prompt, professional, friendly and courteous service. To maintain a clean, comfortable and well maintained premises for our guests and staff. To provide at a fair price – nutritional, well-prepared beverages and foods- using only quality ingredients. To ensure that all guests and staff are treated with the dignity and respect they deserve. To thank each guest for the opportunity to serve them. By maintaining these goals we shall be guaranteed a fair profit that will allow us to contribute to the community we serve” (Missionstatements.com, 2013). There are various things Tim could do to help achieve living up to this vision for his business. The following are Short Term Goals which would be actions that should ideally be completed within the next three months.
* Spend the next month analyzing the competition and brainstorm on what they don’t offer that we do or can offer. * Choose one or two high-profile local charity events to sponsor * Redesign the customer service research process to include new questionnaires and incentives, such as monthly drawings for free products or discounts on future purchases for customers who take the time to respond. (Williams, 2013) The next few items are actions that would be Long Term Goals which should be completed by the end of the business’ fiscal year. * To build the company’s name recognition within the community through community outreach projects (Williams, 2013) What else could Tim do to help achieve these very important goals? * Create actionable steps within committees to break down workload * Be positive and energetic
* Decide how you are going to measure your success and keep track of it at regular intervals. * If your company is achieving its goals, be sure to recognize employees that helped. (Slutsky, 2013)
Human resources help the business in many ways. However, Tim has not been taking full advantage of this valuable tool. “While human resources handle many of the matters pertaining to the employees of a company, such as recruiting and benefits management, they also work with management to help develop long-term strategies for the growth and development of a company. HR departments often act as a middleman between employees and management and should be where employees go for basic company information” (Christensen, 2013). According to the files in Tim’s office most of his employees are valuable assets. Employees are a critical component of any business. Successfully managing the human resource aspect of business can be important, even for very small businesses such as Tim’s Coffee Shoppe.
After all, in a service economy, employees are part of the delivery of the product and service. Their performance, commitment and loyalty to the job are critical and can be boosted through successful HR management. However, there are a few that need coaching to achieve higher customer service and company loyalty standards, such as Darryl. The files also need to be better organized to achieve higher efficiency. It can become the single largest consumer of your time and energy if you don’t know how to handle things well. And, it’s still a big consumer of your time and energy, even if you’re adept at handling such things.
There are numerous actions Tim should take to help this area of his business run more smoothly and effectively. These include; to have a staffing plan, find good employees, how to screen potential candidates, conduct personal interviews and the actual hiring process and most important of all, retaining the valuable employees and evaluating their performance as well as maintaining high standards. There are several steps to follow to help stay organized and achieve a highly valuable staff. The following are actions to take to maintain and educate the staff Tim already has. * Put together a human resource guideline handbook that states what policies and procedures you will and expect the employees to follow. This handbook should address issues such as:
* at will employment
* perquisites and bonuses
* performance reviews
* lay offs
* conflicts of interest
* disciplinary process
* vacation time
* sick time
* family time
* leave of absence
* employee behavior
* “To retain employees, your human resource management philosophy should be to eliminate things that push employees out. It should also, within reason, provide a number of things that keep pulling employees into the organization. Both approaches should be successful in retaining good employees as they both counteract the “pulls” from outside organizations” (Sensible Small Business Ideas, 2013). Some employees will lose interest and need something new to keep their interest in your company.
It might be necessary to provide challenges, opportunities for advancement and other rewards. * It is important to remember that everyone including yourself, the owner, is a team. Everyone needs to be quietly evaluated on their performance and their pay should reflect that. Make sure to recognize high performing employees to upkeep their motivation to better your company and take the time to coach your lower performing employees. Also make sure they all know you are there to support and help them with any issues that they come across.
The competitive environment, also known as the market structure, is the dynamic system in which your business competes (Mack, 2013). It is the part a company’s external environment that consists of other organizations trying to secure clientele in the same market. It is the part of the trade that includes all immediate rivals. Tim has not effectively advertised his coffee shop. He has signage in the office that is not being put to use and the only sign that is noticed in the coffee shop is the Buy 10, Get 1 Free. Also, I believe that Tim heavily relies on his location of being near the university, bus stop and business district to attract customers. It may work well but there is always more that he could do to take his business from being good to booming. Some possibly effective marketing ideas to promote Tim’s Coffee Shoppe might be:
* To create a website- Even if it is just 1-3 pages of general information, it’s better than nothing. Blog sites are best because Tim would be able to easily update. * Neighborhood Marketing- Take advantage of areas that are outdoors like billboards, bus-stops, park benches… anywhere that potential customers might frequent. Also, partner up with other small businesses and exchange flyers to pass out to customers. * Social Sites- Facebook and Twitter
* Use Guerilla Marketing tactics- Go pass out coupons at malls, pass out fliers at the college, etc. Take samples of coffee and pastries to churches or community centers. Get reviewers to come in and write an article about the coffee shop. * Celebrate holidays or create a family day with free drinks for kids under a certain age. * Educate your customers- Host a seminar on the use of coffee or on different brewing methods. Have a “Coffee of the Month” where you can educate on the origin country of the coffee. (Reynolds, 2013)
The majority of Tim’s Coffee Shoppe’s customers are the university’s students and also business professionals stopping by on their lunch breaks. A lot of the customers have filled out satisfaction surveys. This is a great tool and lets Tim know what they are doing right or wrong and what they need to improve on to make their business more successful and profitable. Especially when there is space for the consumer to fill in their own suggestion or comment, such as the survey at Tim’s which stated “I just love Tim’s. I love the special attention, atmosphere and a coffee shop that isn’t a chain for once.” This shows Tim that the customer is extremely pleased and he should be proud of his product and staff.
However, the surveys can also show Tim where his business needs to improve to keep people coming back, such as the comment “The morning staff is RUDE” or “The coffee always tastes burnt. Don’t know why I come back”. This shows the Tim where there is opportunity for improvement. By making customer satisfaction surveys available, this is another tool they can utilize by taking suggestions to make their company better than the competition. Taking these suggestions and considering them an opportunity to improve will attract more customers to come back as well as giving Tim and his employees a goal to work towards and achieve.
Creating a SWOT analysis — identifying the good, bad and potential ugly — for your business is essential before moving forward. Strengths: Tim needs to stand out from the rest of his competition. One strong strength would be his location. Being close to the university, Business Park and bus stop is a prime location to attract business. Weaknesses: Weaknesses noted on the marketing surveys are rude staff, old cash registers which make customers order incorrect, cramped seating, slow service, not taking debit cards and so on. Opportunities: Some opportunities for Tim’s might include a coffee of the month club, or adding more items to the menu. Threats: Some of the threats might be, of course, Queequeg’s and even the campus coffee machine.
Economic Environment/Finance and Accounting/Financial Statements
Looking at the economic situation at Tim’s Coffee Shoppe it is decent but could definitely be better. To have a strong and successful business, you need to have a clear understanding of the financial impact that your most business decisions may have. Tim is expecting an increase in sales volume due to several large businesses moving into the area around the coffee shop. With more traffic going by the coffee shop, one would expect an increase in customers which would mean an increase in income for Tim. Virtually all of your business’s costs will fall, more or less neatly, into one of two categories: variable costs and fixed costs. “Variable costs are costs which increase directly in proportion to the level of sales in dollars or units sold” (BizFilings, 2012). Variable expenses for the coffee shop would be some examples would be cost of goods sold, costs of supplies, and salaries of the employees.
The total expenses will increase if the sales volume will increase due the variable expenses increasing. The company’s total costs are a combination of the fixed and variable costs. “Assuming your sales exceed your variable costs, each additional unit of sales volume increases your gross profits and your net income. If you can lower your costs without impacting revenue and maintain the same sales volume, your profits will go up” (Kokemuller, 2013). This means if Tim’s profits increase so does his net income. “It is very important for small business owners to understand how their various costs respond to changes in the volume of goods or services produced. The breakdown of a company’s underlying expenses determines the profitable price level for its products or services, as well as many aspects of its overall business strategy” (Inc.com, 2013).
The salaries of the employees will increase due to the fact Tim will have to hire more employees or increase the hours of existing employees to accommodate the additional customer base. The cost of supplies and goods sold will increase with the more customers and products sold. Fixed cost will remain the same regardless of the level of sales. These expenses would include Tim’s rent, depreciation, the lease on the refrigerator, taxes and insurance.
There are several things Tim could do to improve his coffee shop, especially to get it to become more marketable for him to sell. The following are good recommendations to start with: * Redesign the customer service research process to include new questionnaires and incentives, such as monthly drawings for free products or discounts on future purchases for customers who take the time to respond. * Create actionable steps within committees to break down workload * Put together a human resource guideline handbook that states what policies and procedures you will and expect the employees to follow * Expand advertising to other venues
* More employee training and recognition
Associates Capstone in Management. (2012). Retrieved from Tim’s Coffee Shoppe simulation: http://extmedia.kaplan.edu.edgesuite.net/buness/AB299/Tims_Coffee_Shop/index.html BizFilings. (2012). Business Decisions and Finances: Cost-Volume-Profit Analysis. Retrieved June 24, 2013, from