Tim's Coffee Shoppe Case Study

Title: Tim’s Coffee Shoppe Evaluation
Date of submission:
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Executive Summary
Tim Coffee Shoppe is a flourishing coffee shop located in Sunnydale, Illinois. Its owner Tim Slick is being replaced by a new owner, Mike. Mike needs to evaluate the coffee shop to see how it can be improved further. The coffee shop is located at an ideal location; with a university and a busy business district nearby. The coffee shop needs to improve in a few areas though; it needs to be more tech savvy; accept credit cards and introduce Wi-Fi. Proper rules should be introduced to ensure that the employees work efficiently.
1. Regulations
Summary: Tim’s Coffee Shoppe does not follow a strict set of codes or regulations. Employees have to follow only a few rules, as observed from the business. Employees are made aware that they have to report the correct time in the time card reporting stating that their shift starts when they actually start working and not when they arrive at
the coffee shop. Employees cannot exchange their duties with other employees according to their own will and cannot leave early without informing the supervisor. Employees are encouraged to work hard and are then rewarded by a $100 Employee of the Month award at the end of each month. Employees are reviewed by the owner or by their supervisors, they are given warnings but no proper action is taken against these warnings by Tim. Immigrants are also hired by Tim.
Action Items: Tim’s Coffee Shoppe needs a set of proper rules and regulations for the employees. Mike should make sure that the employees are on time and should cut back their pay if they are late. He should introduce an electronic system to record their accurate arrival and departure times. Mike should ensure that proper actions are taken such as cutting pay or firing against the person who is given more than the set number of warnings. Mike should fire Darryl Pettitte (full-time employee) as he has been given 5 warnings. Mike should ensure that each employee receives on-the-job training and off-the-job training (presentations or workshops) so that they can work efficiently.
2. Management:
Summary: The owner of the coffee shop is Tim Slick. He has employed two full-time workers who act as supervisors and manage the other employees- which consist of part-time workers. The supervisors conduct performance reviews on employees and give them warnings if they go against a regulation. The supervisors are reviewed and given warning by Tim Slick.
Action Items: Mike should make sure that the supervisors are providing training to the new employees because they are more experienced. Performance of each employee should be reviewed monthly by both the supervisors to set aside any biasness towards a particular employee. The supervisors should be reviewed by their subordinates as well monthly, so as to be sure that they are fulfilling their roles of motivating and helping the employees.

3. Finance and Accounting:
Summary: Tim has to pay a sales tax based on the receipts collected by the coffee shop. Tim also has to pay a monthly payment on the refrigerator bought by him for the coffee shop. These payments of $316.50 will end on December 1, 2014 and have been paid regularly by Tim Slick. Tim also has to pay taxes on a quarterly basis cut from his employee’s wages if the wages are of taxable amounts. An annual tax of FUTA has to be paid too by the coffee shop. The FUTA tax provides funds for paying unemployment compensation to workers who have lost their jobs.
Action Items: As seen from the documents attached that Tim pays taxes and loan payments on time. Mike should follow Tim and should continue this practice of paying taxes and loan payments on time. Mike should also not understate any value in the tax forms.
4.
Financial statements:
Summary: The financial statements show that the business is flourishing and is earning profits. The statement of comprehensive income shows a net income (profit) of $74,511 from the previous year (2010).. The major expenses are rents or lease on equipments and property, wages, supplies and taxes and licenses. The balance sheet shows total current liabilities ($4746.92) and long term liabilities ($7214.22) which need to be paid.
Action Items: Mike needs to make sure that accounts payable ($1250.14) are paid immediately. The bank loan is a monthly payment and has to be paid on time. The depreciation expense ($6750) on the balance sheet show that the assets (equipment and property) are decreasing in value. Mike needs to constantly upgrade the equipment. The balance sheet and net income shows profits. Mike can use these profits to buy new property to open new outlets. Tim’s competitor Queequeg has 7 outlets and Mike should focus on expanding the business.
5. Problem
Solving:
Summary: Tim Coffee Shoppe has customer feedback cards. These cards show what the customer want and how they rate the coffee taste, prices, people, atmosphere and the location of the shop. Customers mostly want a Wi-Fi system and payment through credit cards. The coffee shop has a cash-only policy; they do not accept credit or debit cards. Complaints about the staff being slow and rude are also made. On the other hand the timings of the shop (6 a.m. - 2 a.m.), availability of Jenna bakery Products and live entertainment are preferred by the customers.
Action Items: Mike should ensure that the customer complaints are dealt with immediately. He should focus foremost on modernizing the place by introducing Wi-Fi to cater to the needs of the students. Mike should also introduce credit and debit cards. He should also focus on expansion of the business to compete against Queequeg. As it is a coffee shop, mike should ensure that the coffee tastes exceptionally good. The staff should be given a training session on how to deal with employees when they join the business.