Businnes Plan

Coffee Shop Business Plan


Coffee Shop Business Plan


Opportunity

Problem

People near the University of Oregon need not just coffee and tea, or pastries and snacks, but also a place to meet comfortably, have a group discussion, or just sit quietly, work, and read. This is what’s available on the University of Oregon campus. But it’s too crowded, too often, and doesn’t have the right combination of factors.

Solution

Java Culture coffee bars are a must-have for local coffee drinkers. They offer a safe place to relax and enjoy a cup of coffee, as well as a cozy place to share stories with friends.

Market

Java Culture will direct its marketing efforts towards University students and faculty. This includes people working in offices near the coffee bar, as well sophisticated teenagers. Based on market research, these customers are the most likely to purchase gourmet coffee. The proximity of the University of Oregon campus, which is accessible to the targeted customer group, will enable gourmet coffee consumption to be universal across all income levels.

Competition

Java Culture’s direct competitors will be other coffee bars located near the University of Oregon campus. These include Starbucks coffee shops, Cafe Roma, The UO Bookstore and other Food service establishments offering coffee.

Why Us?

Great coffee, pastries, additional options for tea etc, very welcoming atmosphere, good wireless, desk space, comfortable chairs and tables, good pastries, a location close to the university campus.

Expectations

Forecast

As shown below, we plan to grow as derived from our sales forecast. We plan to achieve a standard 60% gross profit margin, reasonable operating expenses, as well as reasonable profits in the second year.

Financial Highlights Year-by-Year

Finance Required

The owners will spend $140,000 to start the company and then take out a $30,000 loan from the bank to cover any deficient spending or assets.

$27,000 for start-up expenses

  • Legal expenses for obtaining licenses and permits as well as the accounting services totaling $1,300.
  • Marketing promotion expenses for the grand opening of Java Culture in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • Consultants fees of $3,000 paid to ABC Espresso Services for the help with setting up the coffee bar.
  • A total premium of $2,000.
  • Pre-paid Rent expenses for one Month at $1.76 per Square Foot in the Total Value of $4,000.
  • Remodeling premises for $10,000
  • Other start-up costs include stationery ($500) as well as phone and utility deposits ($2,500).

These expenses will not be incurred until launch so they appear in our financial projections at negative retained earnings ($27,680) at the end each month. This number is shown in the balance sheet.

The required start-up assets of $143,000 include:

  • Cash in the bank totaling $67,000. This includes enough cash to pay employees and owners salaries of $23,900 in the first two months, and cash reserves for three months (approximately $14,400 per month).
  • Start-up inventory of $16,000, which includes:

    • Coffee beans (12 regular and five decaffeinated varieties) #8211 $6,000
    • Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. – $7,900
    • Retail supplies (napkins, coffee bags, cleaning, etc.) – $1,840
    • Office supplies $287
  • Equipment valued at $60,000

    • Espresso machine – $6,000
    • Coffee maker – $900
    • Coffee grinders #8211 $200
    • Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.) – $18,000
    • Storage hardware (bins and utensil racks, shelves, food cases) #8211; $3720
    • Counter area equipment (counter top, sink, ice machine, etc.) – $9,500
    • Flatware (plates/glasses, flatware and serving area equipment) #8211 $3,000
    • Store equipment (cash registers and security systems, signage, ventilation, etc.) #8211; $13,750
    • Office equipment (PC, fax/printer, phone, furniture, file cabinets) – $3,600
    • Other miscellaneous expenses: #8211 $500

Funding for the company comes from two major sources–owners’ investments and bank loans. Arthur Garfield and James Polk are the two major investors. They have each contributed $70,000, and $30,00, respectively. All other investors have contributed $40,000 to bring the total investments up to $140,000. The rest of the $30,000 required to cover start-up costs and assets was provided by two bank loans. One-year loan amounting to $10,000, and long-term loan amounting $20,000. Both loans were secured with the Bank of America. Thus, total start-up loss is assumed in the amount of $27,000.

These amounts are shown in the balance sheet for the month before opening. Paid in Capital appears as the $140,000 invested. The $27,000 expenses are shown as negative retained earnings. Both assets and liabilities exist. This is all according to financial standards.