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LEGAL ISSUES
Legal & Regulatory items that need to be addressed
Health Inspection
Food safety and hygiene are some of the requirements that our shop must ensure. Health inspections are performed to ensure that food products are handled and prepared according to state and local laws to protect all consumers. To avoid and mitigate food safety risks, the Certificate of Food Hygiene and Safety has become a mandatory condition for beverage manufacturers. According to our research, providing food and beverage services without a certificate will result in a fine of 20,000,000 VND (~ $1090 CA) to 30,000,000 VND (~ $1650 CA). For that reason, our store will apply for a health permit by contacting our local Health Department. The Ministry of Health issues a certificate means that the business has met food safety standards as required, and the Certificate of Food Hygiene and Safety is valid for 3 years since the date issues a license. (Accgroup, nd)
Contract Agreement
The contract agreement for our business is a lease contract agreement. This is a contract between two parties in which the landlord permits the tenant to live on their property in the period mentioned in a contract. The agreement contains a detailed description of the property including its full address, all services/amenities/facilities as well as the amount of rent. Our brand will commit with the landlord to clarify the responsibility for both parties as Richard Harroch mentioned (2016):
● Space fits our needs.
● The term of the lease is reasonable with a right to extend if necessary.
● The landlord’s obligations are explicitly stated in the lease.
● Our coffee shop could have some flexibility in assigning or subletting the lease.
Business licenses
(Business Registration Certificate for partnerships)
To apply for the Business Registration Certificate, we need to fill out an application form for business registration in the form prescribed in Appendix I-5 of Circular No. 02/2019/TT-BKHĐT, Charter, Lists of members according to the form provided in Appendix I-9 of Circular No. 02/2019/TT-BKHĐT. After that, we will apply for the business registration and pay the fee at the Business Registration Office in District 5, Ho Chi Minh City. (National Business Registration Portal, n.d.)
Intellectual Property
(i.e. patents, trademarks, and copyright)
After preparing a trademark sample with sizes from 3x3 cm to 8x8cm, a list of drinks&products and services offered by the coffee shop, a trademark registration declaration, and proof of fee payment, the owners will submit the documents to the competent state agency for obtaining a trademark registration and granting the protection title. The processing time is between 13 and 18 months. (Vietnamlaw, n.d.)
Industry-specific licenses
(Food Safety Certificate)
Food Safety Certificate application requires a written request for the certificate, the copy of the Business Registration Certificate, description of the required food safety equipment, Health Certification of owners and staff working in the kitchen area, certificates of food safety training of the owners and workers making food. The documents will be submitted to the Department of Health. It takes approximately 15 days for the Department of Health to decide about issuing the certificate. (Vietnamlaw, n.d.)
HUMAN RESOURCES
Recruitment plan:
Although the shareholders of coffeeHolic are responsible for daily business operations, the recruitment plan is prepared to search for potential candidates once the brand achieves its expanding objectives. Therefore, coffeeHolic founders would like to plan well by addressing a multi-step recruitment process.
Firstly, CoffeeHolic needs to create a job description establishing the requirements of the positions. While the job description should include the “position title, qualifications, and information about your company” (Business Development Bank of Canada, n.d., Prepare an effective job description section), the hiring manager also has to inform potential candidates about the working conditions, employment accomplishments, and career prospects. Thereafter, the human resources department promotes the positions using available recruitment tools, such as online job boards/social media/employment agencies. Before selecting a successful candidate by an interview assessment, the hiring manager carefully performs background and reference checks on that candidate (Business Development Bank of Canada, n.d.). Finally, the candidate will be offered the job with an invitation to attend the employee orientation.
Talent acquisition is crucial to small businesses for effectively recruiting the right candidates to support entrepreneurship growth in the future. As a result, CoffeeHolic carefully defines its core values in the job description to reach the most talented individuals to assist the brand with nationwide expansion.
Customer Service skills - CoffeeHolic
Customer Service skills - CoffeeHolic
The Tourism and Hospitality industry has been restricted by the COVID-19 pandemic and the Food and Beverage Service operations are one of the most affected sectors. Team members who work at CoffeeHolic will be equipped with innovative service skills that are in high demand within the industry to exceed customer expectations during this time of difficulty. In particular, the employees are encouraged to participate in training workshops and team building activities on the weekends so that customer service representatives can develop stronger teamwork skills. Therefore, every individual is motivated to have a willingness to improve in both industry knowledge and personal characters. Besides that, coffeeHolic team members are responsible for effective listening, persuasive speaking, and workplace adaptability so that they can use positive language dealing with unhappy customers with patience (Salesforce, n.d.).
CoffeeHolic team members
There is five full-time self-employed staff at CoffeeHolic responsible for various positions, from the marketing department to the operation sector. Our members are introduced with their titles and roles below:
Mi Nguyen (Co-owner & Co-founder) – Cafe Manager
The Cafe Manager takes responsibility for developing business strategies for the team to achieve sales growth and organizational objectives while she has to improve operational performance by conducting performance assessments and assigning responsibilities to other staff. Besides that, the Cafe Manager also schedules team meetings to discuss growth opportunities and other essential issues.
Cam Hua (Co-owner) – Shift Supervisor & Full-time Barista
The Shift Supervisor will share daily duties and responsibilities with the Cafe Manager as an important assistant. Cam Hua will be responsible for scheduling staff member hours and shifts, managing store inventory, and preparing daily reports of the business operation. Furthermore, as a Full-time Barista, Cam Hua provides customers with product preparation, clean service, and payment processing.
Nhu Tran (Co-owner & Co-founder) – Shift Supervisor
As the second Shift Supervisor at CoffeeHolic, Nhu Tran takes care of sales growth, merchandising sector, and industry regulations. The supervisor also assists the Cafe Manager in completing action plans for business development. Moreover, the Shift Supervisor collaborates with another Shift Supervisor in shift scheduling, store inventory, and cash management.
Minh Phong (Co-owner) – Cafe Associate & Cafe Marketer
While Minh Phong is in charge of providing quality service for customers by taking orders, preparing beverages, and sanitizing work areas, he also makes sales referrals, resolves customer complaints, and suggests new promotion programs as a Cafe Associate. Additionally, as a Cafe Marketer, Minh Phong is asked to lead the social marketing department, assisting with public relations, and other administrative duties required.
Bao Han Nguyen (Co-owner) – Cafe Associate & Accountant
As the second Cafe Associate at CoffeeHolic, Bao Han supports the other team members to describe menu items to customers, process customer payments and manage retail products. However, Bao Han is also working as an Accountant for CoffeeHolic and she is responsible for managerial accounting duties including reporting financial data, preparing budgets, and computing taxes.
Payment structure:
Payment structures are an incredibly important factor that measures employee performance and increases “staff retention, satisfaction, and productivity” (Paydata, 2019, para. 6). For CoffeeHolic, the founders are eager to organize suitable pay structures that are beneficial to both the business’ growth and the total rewards of staff members. CoffeeHolic would like to choose individual pay rates, also known as the most common types of pay structure, to reward its employees. Although this approach may reduce the ability to engage employees in large corporations, “for smaller organizations, individual pay rates might be the only viable option” (Paydata, 2019, para. 10). A person working at CoffeeHolic earns at least 5,000,000 VND (274.33 CAD) as a full-time barista, while individuals at the higher position (Cafe Manager) get paid around 11,500,000 VND (630.96 CAD) per month. The average monthly salary at CoffeeHolic is considered higher than the lowest average wages in the Tourism and Hospitality industry while “the minimum salary in Hanoi and Ho Chi Minh is 4,420,000 VND per month” (243.43 CAD), (Stotz, 2020, para. 4). Furthermore, staff members working at CoffeeHolic also get an amount of monthly salary distributed from service fees charged by the business from customers.
RISK ASSESSMENT
Potential risks in Marketing & Mitigation plan
Changing trends: Nowadays, with the development of information technology, café shops have many ways assisting them to advertise their products. Our potential risks are seen that our marketing strategies may be considered to be outdated.
Solution: We need to keep up with the latest types of marketing to attract new customers. (Guest Author, 2019)
Lack of Research and Testing: Before promoting a new product to customers, sometimes we just believe that this type of advertisement is fit and could attract many customers. We just take it for granted without doing research and testing what customers are interested in. Therefore, we could waste time and financial budget investing in the product and advertise it and may not be able to gain what we expect. (Laura Lake, 2019)
Solution: We should always perform thorough research on the marketing and other related fields to fully understand what the costumes expect. (Lieberman, 2017)
Focusing on attracting only new customers: When we focus on only new customers, we are missing an important segment of our market (Laura Lake, 2019). They are still one kind of the target customers that we need to serve. They are also potential customers and could advertise to others about our products and services.
Solution: Offer deals or discounts is a great way to attract returning customers (CBN, 2018). We can offer loyalty cards for customers. After customers buy 10 times at the store, they will get free or discounted services in the store.
Potential risks in Operations & Mitigation plan
There are numerous risks to consider when opening a new coffee shop and it comes with both internal and external risks
External Risks:
Government regulation: Do not pursue a Certificate of Food Hygiene and Safety when opening a coffee shop.
Vendors/Suppliers: Greg Kester illustrated that a third- party could cause financial performance for a business. For instance, the revenues of a coffee shop could be impacted after a supplier provides a faulty component, impairing sales (2019).
Contracts: In a contract, the landlord for coffee shop space has a right to stipulate things like when your business can open, what things we could serve, where our customers could park, and signage (Start my coffee shop, nd).
Solutions:
Government regulation: Pursuing required certificates/licenses from the local authority. This proves that the coffee shop meets food safety regulations from the government and ensures the quality of service and customers’ health (FOSI, nd).
Vendors/Suppliers: To avoid unwanted problems caused by cost, we need to research to find a reputable supplier with a consistent price, and always have backup plans/alternatives.
Contracts: Read the lease agreement carefully to acknowledge immediately any stipulations included. Consider other details such as the age of a location, window existence, or hydro and water system before signing a contract (Start my coffee shop, nd).
Internal Risks:
HR: Employees are an important factor in the development of a brand. It takes time to train an employee. Repeating duties can make one quit their job suddenly, and we have to repeat the process of hiring and training. This will significantly affect the business’s progress. However, over-staffing might create an ineffective working environment.
Solutions:
Control the quantity and quality of the staff, and effectively distribute the workloads among the employees. Providing opportunities for employees to promote during training time and increase their skills development (Mathew French, 2013).
Business Closure - coffeeHolic
Business Closure - coffeeHolic
When we are no longer able to generate sufficient profit to maintain the business.
This is one of the top reasons for business closings. As mentioned, there are fees and expenses that a start-up business needs to cover initially, according to David Loretta (Loretta, n.d.):
❖ Tools and equipment needed
❖ Business registration and licensing fees
❖ Office space
❖ Inventory
❖ Marketing
❖ Website
❖ Internet and phone bill (other utilities)
❖ Payroll
❖ Insurance
❖ Travel
❖ Shipping costs
❖ Taxes
There are a lot of fees and expenses that we all need to pay to maintain a business. So, if we are not making any profit at all, it is most likely a sign that we need to take a break. In addition to that, failing to meet the annual sales expectations also means that we are not meeting our goals (Businessify, 2020). We acknowledge that there are still methods to refinance or fund our business that is offered by the banks and other organizations (Finance a business in Vietnam, n.d.), but we have considered it carefully that we will take a break if the situation is not heading to where we aim for.
2. When there is tough competition and we no longer pursue the ability to compete
As we are a small and newly established business, it can be difficult to start in the beginning days, especially during this pandemic. Big businesses with big amounts of the invested capital can offer more products at a lower price, making it even harder for small businesses to compete with. With that being said, when we can’t compete anymore, it is a good time for us to take a break to seriously look into what we have done and what we will need to do (Vitez, 2017).
INSURANCE ISSUES
To protect our business and obey the law, we plan to purchase insurance. According to the Social Insurance Law 2014, compulsory insurance includes the following types:
Social insurance: Including sickness and maternity fund; retirement and death fund
Labour accident and occupational disease insurance
Health Insurance
Unemployment insurance
(Ngan, 2021).
We also buy fire insurance which became mandatory in Vietnam in 2018 (Khang, 2018).
We decided to purchase insurance from Prudential Vietnam Life Insurance Co., Ltd, and Bao Viet Insurance Company because these two companies are in the top ten insurance companies in Vietnam (life and non-life insurance) & (VietnamCredit, January 1, 2020).
PROCESS PRODUCTION
Our coffee shop’s hours of operation will be Monday to Sunday and from 7 A.M -11 P.M daily.
Order Fulfillment – Process & Strategy
For CoffeeHolic, we are going to follow the process below:
1.Purchasing inventory
For roasted ground coffee powder/whole grain coffee beans/other coffee-related products that are used to make the beverages, we are going to purchase from 90S Coffee Vietnam. They have a wide variety of products and packages as well special prices for coffee shops ((90S coffee - Cà Phê Sạch, cafe RANG xay nguyên chất, n.d.). All five members of the team will take several trips to the supplier’s business place to ensure that the packaging, the quantities, and the qualities of their coffee-related products are met before making any purchases. During this time, we will make any inquiries (if any) about prices, the frequency of delivery, and what we need. For fresh fruits, all five team members are also making trips to Vietnam Fruits Vegetables JSC (Vietnamfruits, n.d.) to observe and check the quality of fruits that we are going to purchase. We will also check other vendors at nearby markets out to get the best deals (Do, 2020), (Binh Tay MARKET, n.d.).
For kitchenware and kitchen appliances, we are going to purchase from the vendors at Binh Tay Market and other nearby markets (if required). However, for specific items such as coffee grinders, blenders, and other machines, we are planning on purchasing them from big, certified companies such as Cholon Electronics Supermarket (Cho Lon Electrical Accessory Supermarket, n,d.) and Nguyenkim Shopping Center (Nguyenkim shopping center, 2020).
For general-used furniture, we will purchase from potential wholesalers such as Long Thanh Plastics (Long Thanh Plastic Co., Ltd., n.d.) and Duy Tan Plastics (Company overview, n.d.). They are the two leading plastic manufacturers in Vietnam and have showrooms and franchises all around the city, so it is easy to access and purchase. For customized furniture such as tables, chairs, shelves, and other handmade furniture (if required), we have targeted Son Kim Furniture (Kim, n.d.) and Do Go Cu Xua Lam Hai Quang (Mua đồ decor vintage tphcm đẹp, độc, rẻ ở đâu?, n.d.). We will also check out vendors along Bach Dang Street which is one of the most popular streets to buy furniture for people in the city.
For decorations, we will contact Do Go Cu Xua Lam Hai Quang and D-Floral. We will also check out vendors at nearby markets as they as well have a lot to offer (Not to MISS: Best Furniture & home Decor shops In Saigon, 2021).
For desserts, we are looking at these four potential suppliers: Tiem Ban Banh, Bep Banh Anh Hai, Banh Nha Minh, and Banh Ngot Kim Ngoc Le. We are going to visit these places and will try to figure out which ones that will be our main suppliers. (We will consider several factors such as location, pricing, quality, and quality).
2.Scheduling employees
+Mi Nguyen (Co-owner & Co-founder) – Cafe Manager
Mi will report to the Shop at around 6 A.M. daily. Then, she will be responsible for assisting other members to start the day at the Shop. Throughout the day, she will be in charge of conducting individual performance assessments, assigning tasks to members, and scheduling meetings if needed.
+Cam Hua (Co-owner) – Shift Supervisor, Full-time Barista
Cam will report to the Shop at around 6 A.M. daily and will share daily duties with Mi as an assistant. Cam will also be responsible for making schedules and preparing daily reports. Cam Hua will be responsible for making schedules, managing our shop’s inventory, and preparing daily reports. As a Full-time Barista, Cam will receive orders from the associates and prepare beverages accordingly. Cam will also be responsible for cleaning and processing payments.
+Nhu Tran (Co-owner & Co-founder) – Shift Supervisor
Nhu will report to the Shop at around 6 A.M. daily. Nhu will take care of sales growth, merchandising sector, and industry regulations. Nhu also assists Mi in completing action plans for business development. Moreover, Nhu will collaborate with Cam Hua in shift scheduling, store inventory, and cash management.
+Minh Phong (Co-owner) – Cafe Associate, Cafe Marketer
Ming Phong will report to the Shop at around 6 A.M. daily. Minh Phong is in charge of providing quality service for customers by taking orders, preparing beverages, and sanitizing work areas, he also makes sales referrals, resolves customer complaints, and suggests new promotion programs as a Cafe Associate. Additionally, as a Cafe Marketer, Minh Phong is asked to lead the social marketing department, assisting with public relations, and other administrative duties required.
+Bao Han Nguyen (Co-owner) – Cafe Associate, Accountant
Bao Han will report to the Shop at around 6 A.M. As the second Cafe Associate at coffeeHolic, Bao Han supports the other team members to describe menu items to customers, process customer payments and manage retail products. However, Bao Han is also working as an Accountant for coffeeHolic and she is responsible for managerial accounting duties including reporting financial data, preparing budgets, and computing taxes.
*At the end of each day, all members are responsible for cleaning up and preparing the Shop for the next day. At this time, all members will share the same responsibilities.
**Breaks are to be taken between the orders and when there is no new order.
(Pulido, 2019), (Admin, 2020)
3.Creating products
All beverage-related products and fruit platters will be made as ordered. For other products such as desserts and cookies, they will be reserved and ordered from local vendors and suppliers as mentioned above. All orders of desserts and cookies will be made accordingly to ensure their quality and freshness.
4.Communicating with partners
Firstly, we will be communicating with our team members to ensure that we have enough inventories. Secondly, we will communicate with the vendors that we chose as suppliers for our Shop to figure what we need and what & when they need to deliver to us. Thirdly, we will communicate with local officers about regulations and licenses as required.
5.Serving customers
We will ensure that all team members are trained and informed well about general duties as well as their specific ones. We will all greet the customers (except for Cam Hua as she works as a Barista and her duties are mainly in the kitchen). Minh Phong and Bao Han will provide the customers with a menu and take their orders, then they will handle them to Cam to prepare. Minh Phong will join Cam during this process. After that, the orders will be distributed accordingly by the Associates and will be joined by other members (except Cam) if needed. Then, when the customers ask for their bills, the process will be handled by Bao Han and joined by Cam and Nhu if needed. Last but not least, Minh Phong will be in charge of sanitizing after the customers leave as well as other working areas, and this process will be joined by Mi and Nhu if needed.
Key suppliers
In-text Citations for the Key Suppliers:
(90S coffee, n.d.), (Vietnam Fruits, n.d.), (Do, 2019), (Hotels Expedia Group, n.d.), (Alamy, n.d.), (Điện Máy Chợ Lớn, n.d.), (Yellow Pages, n.d.), (Wikipedia, n.d.), (Angloinfo, n.d.), (i Tour Vietnam, n.d.), (Duy Tan Plastics, n.d.), (Facebook, n.d.), (Kim, N, n.d.), (Đồ Gỗ Cũ Lâm Hải, n.d.), (Le, K, n.d.), (Bep Banh Anh Hai, n.d.), (Bánh Nhà Mình, n.d.), (D-Foral, n.d.), (Top list, n.d.), (Grapevyne, n.d.).
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