Hot Chocolate Business Plan

Andover Business Club 
Phillips Academy 
Hot Chocolate Business Plan 

Background Information 
In the recent years, bubble tea has come in high demand. Its presence and high demand has carried onto Andover’s campus, driving some students to great extents to obtain the drink. Andover Business Club senses this high demand amongst our peers. Our calculations also show high margins of profit. Though initially introduced as a possible venture in the 2018-2019 school year, time limitations have affected our club’s ability to execute the plan. With more time and new members of the club in the 2019-2020 

Mission 
For students seeking a warm drink on a cold winter evening in New England, Andover Business Club will sell hot chocolate during dinner time so that students can purchase the drink at the convenience of the dining hall, saving both time and money.  

Management Team 
Ava Long ’21, Founder and Co-President of Andover Business Club 
Ava manages the equipment, communication with Commons, and overall operations for this venture. 
Nick Buehler ’21, Co-President 
Nick brought this idea to the attention of the Board in 2019. He is responsible for the finances for this venture.  
Sabby Clemmons ‘22, Board Member 
Sabby head the production team and is in charge of producing the hot chocolate.  
Luc Boesch-Powers ‘22, COO 
Manages the operations team for this venture and for ABC 
Melissa Damasceno ‘22, Manager for venture 
Melissa helps manage the operations for the hot cocoa sale by communicating with house counselors and Commons with details about the venture. 

Operations 
We will be using Ghirardelli hot cocoa powder, whipped cream, whole milk, marshmallows, and Hersey's chocolate syrup. All of these ingredients must be purchased ahead of time on Amazon and locally at Stop and Shop.  
The success of this venture lies in communication and teamwork. Sabby, Luc, and Melissa will be making the hot cocoa in Bancroft Hall on a Wednesday evening.  
Reese DiBase ‘23, Ava Long ‘21, and Luc Boesch-Powers ‘22 are in charge of transporting the product to Commons and setting up the table.  
Various club members will be helping serve the hot chocolate in 30-minute shifts during Commons.  
Nick Buehler ‘21, Luc Boesch-Powers ‘22, and Ava Long ‘21 will clean up the sale at 7 PM on Wednesday.  

Marketing and Sales 
The timing of marketing is important. Advertisements and notices must be published the day before and the day of the sale, no earlier. Any advertisements published earlier will be forgotten. Instagram posts and stories will be our primary means of marketing.  
On the day of the sale, word of mouth will be critical. As students enjoy the drinks around campus or in Commons, ABC expects the visual presence of the drink to draw questions. C2C communication will draw more customers to the table. B2C communication at the table throughout the sale will also be critical. 

Financial Projections 
We expect 52% gross profit margins, assuming we sell 100 cups at $3 per cup.1 The COGS total $145 and we plan to sell the hot chocolate at a starting price of $3, with additional add-ons to the drink totaling up to $4. We have purchased 100 paper cups (included in the COGS).  

Debrief (after sale) 
It is difficult to keep track of the number of cups we sold because some people paid in cash whereas others paid with their blue cards. Furthermore, we offered some younger children free cups of hot chocolate towards the end of the sale.  
We did not sell out of hot chocolate. We started with 7 gallons of hot chocolate and have roughly 4 gallons left. This will be distributed to girls in Bancroft Hall during the cluster munch. All supplies will be stored for ABC’s future use.  
Revenue: $226.50 
COGS: $145.00 
Gross Profit Margin: (226.50-145.00)/226.50 = 36.0%  
This GPM is less than what we expected (52%). ABC overestimated the number of cups we would sell, having noticed 100 cups of bubble tea sold out within one hour in our previous venture. This is the cause of a lower GPM than expected. To increase profit margins in the future, ABC will create enough product for roughly 65 cups. 

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