Business Making Decision Assignment 3 BTEC Nguyen Huu Phong 2017

ASSIGNMENT FRONT SHEET No.3
Qualification

BTEC Level 5 HND Diploma in Business

Unit number and title

Unit6: Business Decision Making

Assignment due

Assignment submitted

Learner’s name

Assessor name

Class: GBS0405

Ms. DuyenNTN

Learner declaration:
I certify that the work submitted for this assignment is my own and research sources are fully acknowledged.
Learner signature

Date

Grading grid
P4.
1

1

P4.
2

P4.
3

M1

M2

M3

D1

D2

D3

1


Assignment title

Enhancing Business Decision Making

In this assignment, you will have opportunities to provide evidence against the following criteria.
Indicate the page numbers where the evidence can be found.

Assessment criteria

Expected evidence

Task
no.

Assessor’s
Feedback

LO4. Be able to use software- generated information to make decisions in an organisation
4.1 use appropriate
information processing tools

4.2 prepare a project plan for
an activity and determine the
critical path

2

□Student individually use Microsoft Excel and Microsoft Project in information
processing

2

 Achieved
Not achieved

Students manage □to draw the Gantt chart, construct network diagram, □identify
critical path from the given information.

1

 Achieved
Not achieved

2


4.3 use financial tools for
decision making.

Assessment criteria

Students can calculate two financial indicators: □NPV and IRR. And
□provide the suggestion for the most appropriate project tool based on
results of NPV and IRR.

Expected Evidence

Merit descriptor No. (M1)

□Good data analysis techniques

Merit descriptor No. (M2)

□Good analysis of the results to draw valid conclusions in a business
context.

Merit descriptor No. (M3)

□Clear assignment structure with □appropriate level of academic English
writing

Distinction descriptor No. (D1)

□Provide critical analysis of information for decision making by
summarizing data.

Distinction descriptor No. (D2)

□ An appropriate recommendation
□ Sources of information are correctly cited

Distinction descriptor No. (D3)

□ Smart recommendation for decision making by summarizing data

3

3

2

 Achieved
Not achieved

Feedback
(note on
Merit/Distinction if

applicable)

 Achieved
Not achieved
 Achieved
Not achieved
 Achieved
Not achieved
 Achieved
Not achieved
 Achieved
Not achieved
 Achieved
Not achieved


Summative feedback

Assessor’s Signature

4

Date

4


<ATTACHED EVIDENCE>

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5


Contents
Introduction

8

4.1 Use appropriate information processing tools

8

4.2 Prepare a project plan for an activity and determine the
critical path
10
4.3 Use financial tools for decision making.
Conclusion

14

References

15

6

6

12

Introduction
Today, the drinking coffee have gradually become a habit of everyone from everyone to students, people
of all ages. People who like speed and an aromatic essence of coffee, this has gradually changed the way
that people who sell coffee or do. Instead of content makers to coffee now many places have espresso
machine to do, you know those big coffee chain in the world such as Starbucks uses espresso machine.
Use the espresso for a delicious coffee and tasty more, because of this reason that gradually more people
like to drink in places with espresso more than filter coffee . Capture this trend, I open a small shop selling
coffee espresso to serve everyone.

4.1 Use appropriate information processing tools
Project name: My coffee shop is named "COFFEE in BLACK" which sells espresso coffee
Location: On No.10 Street, District 6, Ho Chi Minh City. It then the next Kinh Duong Vuong - Galaxy
Cinema and in dining area of district 6. This place is very crowded in the evenings and lasts until mid-late
at night and during the day there are quite many employees work. The ground we rent include a foothold
to sell wide 10m2 in the middle of this bustling area.
Segment: With cheap prices, great and fast, becoming an expresso coffees for everyone especially those
who like the strong flavor of the coffee.
Project size:

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THINGS TO PURCHASE TO START THIS PROJECT
Quantity(unit,
kg)
BREVILLE BES 870XL – AUSTRALIA (Espresso

machine)
Specialized car for selling coffee and espresso
machine

Price
(VND)

Value

1 18.900.000 18.900.000
1

5.000.000

5.000.000

Sign

2

1.000.000

2.000.000

Knock Box

2

365.000

730.000

Hot cup (cover lid, logo)

500

3.000

1.500.000

Cold cup (cover lid, logo)

500

2.500

1.250.000

1000

50

50.000

30.000

30.000

5

266.000

1.330.000

Milk

48

20.000

960.000

Sugar

3

16.000

48.000

1000

65

65.000

Drinking Straw
Ice
Coffee Roasters

Plastic Bag
TOTAL

31.863.000

The total amount of money to buy related equipment is 31,863,000 VND
In addition, the space rent is 2,000,000 VND / month and we have to deposit 3 months is 6 million.
BUSINESS SPACE
Location: No.10 Street, District 6, Ho Chi Minh City
Space: 10m2
Rental deposit

3 months
2.000.000
6.000.000
I hired a bright employee from 5am to 8pm with a monthly salary of 1.500.000VND and an employee
working with a midday employee from 11am to 2pm with a salary of 1.500.000 VND. In the evening, I
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8


will stand for sale due to not busy learning, thus saving part of the cost of hiring staff. So in total, I spend
3,000,000VND per month for 2 employees.

Salary for employees
2 employees
1.500.000
3.000.000
Rental cost

2.000.000
TOTAL
5.000.000
As a coffee shop, we will continue to operate all day except for big holidays. The total amount calculated
above is 5.000.000 VND.
Working capital in the first three months is 15,000,000 VND. In addition, because of the curb sale, we
need some small fees to be allowed to trade about 500,000 VND
TOTAL INVESTMENT
Cash
15.500.000
Equipment and tools
31.863.000
Costs incurred
5.000.000
TOTAL
52.363.000
This is my total investment cost for this project. The above cost will help my project to operate in 3
months, 3 months is the time that I have to ensure the project operation smoothly and smoothly.

4.2 Prepare a project plan for an activity and determine the
critical path
Task 1
Task 2
Task 3
Task 4
Task 5
Task 6
Task 7

Weekly

Ideas and concept
Market search

1

2

3

4

5

6

7

8

9

Search for supplier
Production
Search for location,
decorate
Buying equipment and tools
Training employees

Gantt chart: the chart above is the weekly Gantt chart, after this period I will be able to start my own
business.

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9

10


Task description:

Task 1: Ideas and concept
I am a coffee lover and especially black coffee and milk coffee are the best coffee in Vietnam. Vietnamese
people sometimes like to drink coffee like that and have a little more modernity. At present, there are
many models selling coffee as fast as we do, but they use filter coffee and instant coffee. These things take
away the essence of coffee, so also with their business model but we instead use espresso machines to
make coffee. This will break the concept of coffee taken in the morning that it will not be delicious. That
is why "COFFEE in BLACK" was born and brought the wonderful coffee to anyone at affordable prices.
Task 2 & 3: Market search and search for supplier
As mentioned above, we refer to surveys of some friends in community groups. We recognize that
morning workers tend to enjoy coffee, but they are usually in a hurry, and we rely on them to bring them
the best coffee in the mornings to bring to work place.
Black coffee and milk coffee are also the favorite drinks of a large segment of consumers in Vietnam
including young people. Another special thing is, the coffee takes away as we sell very little in the evening
although a large number of customers like to drink these kinds of coffee in the evening. We will appear all
day, all the time and in the future is everywhere so people can enjoy the fastest, cheapest and best coffee.
Task 4: Production
Due to the quickest criteria, we will train employees to use espresso machines and make coffee that are
designed to meet the needs of our customers at all times while maintaining the best quality. The next job is
to add milk, sugar and ice. Customers just carry and enjoy. In addition, we will give away our own ice
cubes to keep our customers' best quality coffee while on the road.

Task 5: Search for location, decorate
I have observed and visited many places around me live, luckily next to the place where I eat every day
there is an easygoing owner whom I know. They let me rent space and freely use electricity and water
from their homes, of course included in the 10m2 rental price that I hired. On decor, we will decorate the
simplest of the two colors WHITE and BLACK. This represents the culture for us. "COFFEE in BLACK"
Task 6: Buying equipment and tools
Because my friends have opened cafes, they should introduce me to buy products and tools from
Khoinghiepcafe.com. The facilities and equipment for making coffee here are of good quality and I choose
them.
The other items I buy at the market and stores for convenience and maximum cost savings.
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Task 7: Training employees
Because our menu is simple and they are drinks that any Vietnamese can make it. Of course, I have
individual formulas with appropriate levels so that the coffee is always delicious and impressive. The
training of staff took place quite quickly in 2 days
Week 1: Instruct the staff to use the Espresso machine, mix the coffee by the formula available. Of course
I will give them a try and the drinkers are me and my friends. If all accepts more than 90%, then the
employee meets the requirement.
Week 2: Learn how to greet and take care of your customers. Smile, talk briefly with them and pay
attention to the habits of frequent customers. I will supervise them in the later working sessions.
Absolutely not emotionless.

4.3 Use financial tools for decision making.
Prices of ice coffee and hot coffee are the same and milk coffee is higher than black coffee 2,000 VND.
Milk coffee will cost 14.000 VND and black coffee is 12.000 VND. We will count on black coffee at
12,000 VND for a profit of 6,000 VND.

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CASHFLOW

Sales growth rate in the first 9
months: 20%

r=12%/year

Months

Q

Variable
cost

Price

Revenue

Fixed cost

0
1

600

2

720

3

864
1.03
7

4
5

12

6

1.244
1.49
3

7

1.792

8

2.150

9

2.580

10

2.580

11

2.580

12

2.580

13

2.580

14

2.580

15

2.580

16

2.580

17

2.580

18

2.580

19

2.580

20

2.580

21

2.580

22

2.580

12.00
0
12.00
0

12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0
12.00
0

12.00
0
12.00
0
12.00
0
12.00
0
12.00
0

Profit

Discount
cashflow

Accummulative CF

52.363.000

-52.363.000

-52.363.000

7.200.000

3.600.000

5.000.000

-1.400.000

-1.386.139

-53.749.139

8.640.000

4.320.000

5.000.000

-680.000

-666.601

-54.415.740

10.368.000

5.184.000

5.000.000

184.000

178.589

-54.237.151

12.441.600

6.220.800

5.000.000

1.220.800

1.173.165

-53.063.987

14.929.920

7.464.960

5.000.000

2.464.960

2.345.325

-50.718.662

17.915.904

8.957.952

5.000.000

3.957.952

3.728.570

-46.990.092

21.499.085

10.749.542

5.000.000

5.749.542

5.362.702

-41.627.390

25.798.902

12.899.451

5.000.000

7.899.451

7.295.010

-34.332.379

30.958.682

15.479.341

5.000.000

10.479.341

9.581.679

-24.750.701

30.958.682

15.479.341

5.000.000

10.479.341

9.486.811

-15.263.890

30.958.682

15.479.341

5.000.000

10.479.341

9.392.882

-5.871.008

30.958.682

15.479.341

5.000.000

10.479.341

9.299.883

3.428.875

30.958.682

15.479.341

5.000.000

10.479.341

9.207.805

12.636.680

30.958.682

15.479.341

5.000.000

10.479.341

9.116.639

21.753.319

30.958.682

15.479.341

5.000.000

10.479.341

9.026.375

30.779.694

30.958.682

15.479.341

5.000.000

10.479.341

8.937.005

39.716.699

30.958.682

15.479.341

5.000.000

10.479.341

8.848.520

48.565.218

30.958.682

15.479.341

5.000.000

10.479.341

8.760.911

57.326.129

30.958.682

15.479.341

5.000.000

10.479.341

8.674.169

66.000.298

30.958.682

15.479.341

5.000.000

10.479.341

8.588.286

74.588.584

30.958.682

15.479.341

5.000.000

10.479.341

8.503.253

83.091.837

30.958.682

15.479.341

5.000.000

10.479.341

8.419.063

91.510.900

12


23

2.580

24

2.580

12.00

0
12.00
0

30.958.682

15.479.341

5.000.000

10.479.341

8.335.706

99.846.606

30.958.682

15.479.341

5.000.000

10.479.341

8.253.174

108.099.780

Breakeven analysis is the analysis between price, revenue, profit and cost to calculate break-even point
and generate profit. Based on these calculations, we set up a table to find out the breakeven point.

Based on this table, I can see the sales calculated by the formula (Revenue = Selling Price x quantity).
With each cup of coffee we make is priced at 6.000 VND, this is the cost of sales, we have calculated the
reasonable price for each cup of coffee sold 12,000 VND, suitable for the majority of people in Vietnam.
It is estimated that we will sell 600 cups in the first month and reach sales of 7,200,000 VND, then 9
months continuous will have a growth rate of 20%. By the third month, we sold 864 cups and achieved a
turnover of 10,368,000 VND and profit of 184,000 VND, at which we will maintain the operation without
loss.
Quantity
revenue
fixed cost
variable
cost
profit

850
10.200.00
0
5.000.000
5.100.000
100.000

From statistics, it can be seen that if the growth rate of 20% is continuous for 9 months and stopped at the
highest level, then after 11 months, we will pay back in 12 months.
NPV = net
present value
IRR
Payback

107.029.485
9% per months

12 months

Payback period: I reached the breakeven point of my project in 12th month when I sold 2580 cups per
month with sales of 30,958,682 VND and profit of 10,479,431 VND
Thereby, we can see, my project has the potential to grow and be able to recover capital in just 12 months
with the standard set.

Conclusion

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It can be seen that setting up a clear business plan will tell us what needs to be done and what needs to be
done to evaluate whether the project is viable and potential. In addition, during project implementation, it
is necessary to continuously monitor and adjust deviations from the plan.

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References
Khoinghiepcafe (2016) How to open Cafe Espresso, Available at: (Accessed: 29 April 2017)
Caphenguyenchat (2017) Coffee price, Available at: (Accessed: 29 April 2017)
Dungcubarcafe (2017) Knock Box, Available at: (Accessed: 29 April 2017)

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