Business Plan: Coffee Shop Report
Executive summary, introduction, market feasibility, technical feasibility, financial feasibility, human resource feasibility.
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Our new coffee shop will be situated in Melbourne. The business will target only female clients. The hotel will concentrate on gaining the allegiance of customers by providing them with an unparalleled experience of coffee beverage services. The cafe will offer many crafted dishes to fulfill our clients’ banquet, lunch, and supper desires. Our menu will comprise of omelets, benedicts, toasted bread, and toasties.
The article below focuses on a coffee shop’s business plan. The café will be registered as a sole proprietorship. It will be wholly owned and operated by one entrepreneur. The cafe will be established in the city of Melbourne.
What is the size of the market?
In Melbourne and its neighboring cities, coffee shop industry is estimated to generate revenue worth $4.78 billion annually (David 2015). The business is large and varied. Over the last few years, the number of coffee shops and cafes has increased.
What is the growth rate of the industry?
The industry’s revenues are expected to increase by 7.3% annually for the next two years (Hunter 2015). The increase has been boosted by growing incomes and the citizens’ unceasing love for quality coffee.
Is the market at full capacity?
We are predominantly interested in a coffee café because currently there are a few businesses that offer these services. Therefore, our venture aims to fill this market gap by delivering exceptional beverage services.
Where are our customers getting the product now?
The leading coffee cafes in Melbourne include Auction Rooms, Three Bags Full, Hardware Sociate, Di Bella Roasting Warehouse, Market Lane, Proud Mary, and Sensory Lab (Purnama 2013). All these cafes offer services to both male and female clients. We expect to face competition from these shops and other medium food kiosks spread across the city of Melbourne. The other competitors are restaurants and food stalls that offer beverage services.
Where are the customers?
We will target female clients who work or study in regions around Melbourne. The city currently has a population of 4.35 million people (Johnny 2015). Half of these residents are women. In the future, the population is expected to increase to surpass that of Sydney. The main reason for positioning itself in this segment is that the business has the opportunity of incorporating new features to the existing services to cater for the changing demands and needs of our targeted customers. We will offer our services to females. Through this, we will differentiate our services from our competitors.
To gain a competitive advantage over our competitors, we will differentiate our products and services (Agnihotri 2015). One major way of fulfilling the above is through value addition. We will focus on improving our beverages’ package to enhance their aesthetic appeal. All drinks and snacks will be packed and served in impressive food packages designed to surpass our customers’ expectations.
We will only offer services to female clients to differentiate ourselves from our rivals. In Melbourne, a few coffee shops focus on particular communities such as religious, age, sex, or political minorities. If our café focuses on specializing in satisfying only women’s community, we will attract many clients and enhance our market share. The market segment presents an opportunity for the business.
How many would purchase from you?
With increased government expenditure, vibrant tourism, transport, and trade in the region, our business will be favorable and convenient to many women. An increase in government expenditure implies that there is more money in circulation, and more people can afford to enjoy the food services at our business center (Kwek 2015). We expect to serve up to 300 clients in a day.
What external factors come to bear? Government, Industry Dynamics
An important external factor that will affect our business is government regulations. We will have to satisfy all the standards required by the local governments.
How long will this opportunity last in the market?
Our projections indicate that during our earlier years of operation, we will experience less competition because we will only focus on female clients. However, competition is expected to increase in the future because we have a window period of two years. Over time, several players will enter the market eating into our company’s customers. Because of this, our company will experience enormous pressure from the new entrants. Such risks put pressure on our business’ future success. The above imply that we must always differentiate our products and services from those offered by our competitors. If we fail to do so, our rivals will fill the gap and gain an advantage over the company.
What keeps new competition from entering this market?
A threat faced by new entrants has been the inability to adapt to the ever changing service features and standards required by the clients. Another threat that prevents new competitors in the industry is competition from established rivals.
In the first months of our operation, we plan to focus on understanding the thoughts, desires, and behaviors of our clients. Through this, we will be able to come up with the appropriate targeting and positioning techniques in future. Equally, the chance will enable the business to identify efficient and reliable marketing channels to be utilized in the future.
Options for developing the technology
Our café will be registered as a sole proprietorship. The shop will be wholly owned and operated by five entrepreneurs. The cafe will be established in the city of Melbourne. The coffee shop will serve clients throughout the week as indicated below:
Options for producing the product or service
Our products and services will be generated in house. Equally, we will utilize the same approach in our sales and distribution. As such, we expect our clients to visit our establishment. There will be no outside catering services. With increased turnover for startup cafes, the owners are expected to offer their skills and labor to fill in where required until the business starts to generate profits.
Options for sales and distribution
To reach our customers, we will utilize some approaches. Advertising will be our primary marketing strategy. We will create a series of television, the internet, and technology advertisement platforms. Through this, we will subcontract these functionalities to other firms. The firms will comprise of individuals knowledgeable in product information as well as customer service. Through social media, we will encourage more potential clients to access our services. The social media will also enable us to interact with potential customers to understand their expectations
Resources required for development
With respect to our limited inexperience in the industry, we will collaborate with reputable and competent suppliers. The vendors will offer sensibly priced products. The merchandise will be delivered according to an approved time timetable. The cost of establishing the shop is $363,000. The majority of the expenses will be used in purchasing the raw materials including furniture fixtures. Raw materials to be used at the café will be sourced from experienced suppliers. They include kitchenware, food processors, utensils, dishwasher, clothing, and stainless steel tables.
The laws and regulation relating to the business
Before opening our enterprise, we will obtain accreditation from relevant business licensing regulators in Melbourne. Similarly, we will get a permit that will illustrate that our company will work towards environment conservation.
Any moral or ethical issues that you are uncomfortable with
Our research identified that ethical issues of workers being mistreated by their supervisors are prevalent in the hospitality industry. The business will formulate and implement appropriate ethical cultures to prevent such incidences. The code of ethics should articulate the accepted standards. Similarly, ethical culture will be enhanced by all levels of supervision.
Technological changes are changing or emerging that may affect the business
During our research, we noted that a significant threat faced by coffee shops and other beverage outlets is speedy technological transformations. Many clients enjoy cafes with the latest technological facilities such as Wifi access. The threat puts pressure on the company’s future success. Every year, we will be required to adopt new technologies to be ahead of our rivals. If we fail to do so, our competitors will fill the gap and gain an advantage over our company.
Projected revenues from sales of our products and services
The table below illustrates the expected sales volume in units sold and in dollars sold. Our approximate selling price per unit is $ 11.37. The expected revenues are indicated below.
Financial dynamics and opportunities
Indicated below are the cost structures illustrated based on unit basis:
- Price per unit minus is $11.37
- Variable costs are estimated to be $4.51 per meal
- Gross margin per unit minus is 44.90
- Fixed costs per unit are 48.0
- Net margin per unit is 8.0%
Indicated below is the income statement used in the calculations:
Is the project worthwhile financially?
Indicated below are assumptions utilized in our financial plan
- Meal Price ranges from $8.00 – $15.00
- Average lunch price is 8.79
- Average dinner price is13.74
- The restaurant is located in the Melbourne City
Gross margin 45% and net profit are 8.0%. The figures indicate that the venture is economically viable. Below is a 1-year monthly cash flow statement:
How much investment is required and how they will be used
Financial risk.
Total fixed costs linked with the coffee shop are $669,186. They represent yearly expenses. The variable cost is $ 4.51 for each meal. The breakeven revenue will be $1,108,970. It equals to 97,535 meals. We would not get better returns elsewhere, so we better invest in the shop. I will have to give up my mortgage to finance the project. The return of investment is $1, 229,334 after three years. The above illustrations are indicated in the table below:
Sources of funds
The money needed will be sourced as shown in the table below. There are higher chances that we are going to get all the money required for the project. We will have to sacrifice money needed for other investments to attain our objectives.
What technical and management experience is required?
The business will hire 20 employees. They will comprise of two managers and subordinate staff. The managers will be needed to have more than three years of experience in a similar environment.
The technical team should have at least one year of experience. Together, the management team will select every applicant. We have implemented an up-to-date interview procedure. The process will staff the coffee café with highly experienced persons for every position. Every candidate will be evaluated and ranked based on a pre-defined set of values intended for each vacancy. Hiring efforts will focus on recommendations.
Who are the owners and what are their roles?
The restaurant’s management team will comprise of the owner, the manager, and technical expert. The owner has a restaurant career. He has served for over 20 years in the foodservice industry. He will be the general manager of the business. The manager will oversee smooth operation of the facility.
As such, the hotel manager will manage the overall undertakings like hiring and making financial arrangements. The manager will report to the owner of the shop. A technical expert will direct every functional group. As such, the technical expert will ensure that all installations in the shop are up and working. The supervisor reports to the general manager.
What is the ownership structure?
The organizational fabric of the shop will represent a corporate divisional order. The divisional order will be predominant service sections of the cafe. They include housekeeping segment, food and beverage section, concierge block, and front desk management. For instance, the prominent sectors of the enterprise will be separated into semi-autonomous bodies. The smaller sections will be apportioned to a particular field of service.
Every semi-autonomous will have a group head. As such, the group leader will be selected as the managing officer of that particular segment. At the top of the hierarchy will be the hotel manager. The present-day economic conditions in the beverage industry are characterized by increased competition.
In this regard, the coffee shop will adopt the above organizational structure to save on the cost of operation. The organizational structure has many advantages. Through this structure, every section functions effectively for the reason that they are centered on certain precise task. By doing so, the shop will be able to enhance the output of every section.
What are the labor requirements?
Attracting, inspiring, and retaining a skilled workforce is significant and often challenging for today’s businesses (Hazelton 2014). Appropriate staffing measures will aid our coffee shop intensify the satisfaction of its workers, reduce recruiting costs and increase the hotel’s productivity.
In this regard, the business has put in place appropriate sourcing policies that attract a diverse variety of high-performing candidates. We have also implemented a transparent hiring procedure, which guarantees objective selection using pertinent criteria. Through this, the company will attract competitive and competent candidates. Our orientation processes guarantee that new employees are informed about the business’ values, objectives, key policies, and measures.
The shop will offer a positive working environment for its staff. Through this, the business will be able to attract and retain qualified workers. A positive work environment enables the employees to undertake their roles without challenges. Thus, the productivity of the cafe will increase.
Similarly, the business should identify, compensate, and support the right behavior to attract and retain a competent workforce. Through this, the worker’s morale will be boosted. By involving and engaging the employees, the shop will be able to motivate its workforce. As such, individuals are more dedicated and involved if they are allowed to add their thoughts and proposals towards the improvement of the business.
Equally, the firm will adopt fun in the workplace to motivate the employees. The initiative will enable the employees develop a positive staff culture, boost their morale and motivation, and enhance employer and employee relationship. Likewise, the approach will improve teamwork, increase employee satisfaction, help attract and retain the best people, and improve customer satisfaction. The initiative will also enhance creativity and problem solving, resolve conflict and difficult issues, and augment productivity and performance.
Likewise, the hotel manager will come up with policies that encourage relationship among the employees. Through building relationship among the employees, the managers will enable the employees to understand and appreciate each other’s social, religious, or racial background (Stafford 2013). They will be achieved by offering the employees with regular seminars, workshops, and other social events. Through this, they will get to know one another better enhancing mutual respect.
The managers acknowledge that recruitment and hiring of new employees contribute to the increase in operating costs. Therefore, the business has adopted a competitive reward scheme to reduce the employee turnover. Because the firm is aiming to be among the top coffee shop in Melbourne, its reward system is expected to be competitive.
As such, the reward scheme will indicate the individuals to be awarded and the reason behind the rewards. The practice will enhance individual performance and firm’s outcomes. The reward system will balance with the organization’s culture.
To enhance and maintain quality, the cafe’s executives will implement performance measurement strategies (Carlson 2013). The shop will adopt quality and time performance measures. Quality performance test will assess the value of the services rendered by the employees. Equally, time performance will determine the period it takes the employees to perform their services.
The hotel will undertake the above assessment regularly to enhance the efficiency of the performance measures. Changes in performance measures and requirements related to increasing the competency-base of workers to meet global requirements will also be monitored. Therefore, the cafe will implement a culture of accountability.
Similarly, they will focus on results. When goals and visions are brought into line with organizational accountability, the administration can hold employees answerable for their tasks. Equally, performance measures will encourage workers to accomplish the lounge’s goals, missions, and objectives.
What is the company’s growth strategy?
The shop’s organizational culture will change as the business grows. The appropriate succession planning measure will be instituted to recognize and develop internal staff with the possibility to fill future vacancy positions in the cafe (Catherine 2014). The process is the most efficient and appropriate way of filling organization’s vacancies.
Through this approach, the shop will reduce its recruitment costs and orientation training expenses and time. The approach will offer employees with abilities to advance their career through regular training. As a result, employees will progressively develop and advance their careers. Through career advancement, workers’ morale will be enhanced enabling them to dispense their knowledge and capabilities effectively. By improving on the workforce’s morale, the business will increase its productivity leading to an increase in returns.
In conclusion, it should be noted that the cost of establishing the shop is $363,000. The majority of the expenses will be used in purchasing the raw materials including furniture fixtures. The business will target only female clients. As such, the coffee bar will offer many crafted dishes.
Start-up Expenditures and Expenses Worksheet
Swot analysis.
Agnihotri, A. 2015, ‘Extending boundaries of Blue Ocean Strategy’, Journal of Strategic Marketing , vol. 32, no. 8, pp.1-10.
Carlson, K. 2013, ‘Designing Business Training for Fun and Results’, Performance Improvement , vol. 52, no. 9, pp. 45-46.
Catherine, F. 2014, ‘Sustainable cultures: Engaging employees in creating more sustainable workplaces and work styles’, Facilities, vol. 32, no. 8, pp. 438-454.
David, B. 2015, Coffee culture in Australia . Web.
Hazelton, S. 2014, ‘Positive emotions boost employee engagement: Making work funbrings individual and organizational success’, Human Resource Management International Digest, vol. 22, no. 1, pp. 34-37.
Hunter, B. 2015, Melbourne CBD, Melbourne . Web.
Johnny Y. 2015, Start a new business/Café Business . Web.
Kwek, G. 2015, Australia makes its mark on global coffee culture . Web.
Purnama, M. 2013, Melbourn Top 10 Cafes . Web.
Stafford, K. 2013, ‘Does Fun Pay? The Impact of Workplace Fun on Employee Turnover and Performance’, Cornell Hospitality Quarterly , vol. 54, no. 4, pp. 370-382.
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Coffee House
BUSINESS PLAN
COFFEE CIRCUS
3005 37th Avenue Santa Fe, AZ 68002
Coffee Circus' owners are taking advantage of the coffee house rage that has been sweeping the country. Along with taking advantage of this trend, they are also planning for the future. Coffee Circus is also marketing itself as a full service restaurant to maintain stability, in case the coffee trend begins to fizzle.
EXECUTIVE SUMMARY
Mission statement.
- PURPOSE OF BUSINESS
BUSINESS GOALS
Description of business, opportunities and strengths, critical risks and problems.
The interest by consumers in the coffee house industry is sweeping the country. Coffee Circus is positioned to bring this to the Northwest Santa Fe area. To date it has been confined to the Central and East areas.
Coffee Circus will provide a friendly, comfortable atmosphere where the customer can receive quality food, service and entertainment at a reasonable price. The coffee house will offer a variety of choices to the customers. Coffee and tea of all sorts will be offered. Juice, soda, and non-alcoholic beverages also will be available. Both wine and beer will be on sale. Coffee Circus will serve breakfast, lunch and dinner.
The interior design of the building will focus on projecting a relaxed atmosphere. Coffee Circus will be divided into different areas. Some will have tables and chairs, another will have large antique stuffed couches and chairs, end tables, coffee tables, book shelves filled with books and magazines, tiffany style lamps and braided rugs. A PA system will be installed so that the music and entertainment can be heard throughout. A large selection of table games will be provided.
There will be nightly entertainment featuring acoustic jazz, blues and folk music. On selected nights there will be poetry readings and an open microphone. The walls will be used as an art gallery and from time to time there will be an artist in residence.
The site contains a 3,525 square foot building which was used as a sports bar and restaurant. The building has substantial parking. The site shares the Hart Plaza with Folk Limited and Ryan Sports. Remodeling will consist of removing the existing booths, new carpet and some new furniture. The kitchen and bathrooms will require only minimum remodeling. The property is currently zoned for restaurants.
The area comprising a three mile radius around Coffee Circus is heavily populated with young, upwardly, mobile persons with expendable income. This is complemented by a large number of upper middle class "Baby Boomers" who are a large portion of those persons who frequent coffee houses.
A strength which this business will possess is the ability to change with the times. Rather than limiting the future opportunities by having a small area, Coffee Circus will have 3,525 square feet of space and a kitchen designed for flexibility. As the fad of coffee houses fades, Coffee Circus will be able to change to a full course restaurant or whatever the situation calls for.
The advertising and promotion will take a number of avenues. First, flyers will be distributed in the neighborhood. Ads will be taken out in all of the Catholic church bulletins in the area. Since Coffee Circus will be the first union restaurant in the state, ads will be placed in all of the union newsletters. Ads will also be placed in the target areas of the Burns' Grocery, and the local neighborhood newsletters. For businesses in the area, menus will be distributed and ordering will be available by fax. A customer mailing list will be developed with a calendar of events being mailed on a monthly basis.
Coffee Circus will be operated as a Sole Proprietorship. There will be private investors. However, these investors will be silent investors with a payoff of investment within three years. These investments will be paid twice-yearly in equal installments including interest. The total needed capital for Coffee Circus is $99,900. Owner's cash contribution is $10,000 and other investors and family members is $16,000. The amount needed in loans is $30,800 for equipment, $20,000 for remodeling, and $23,000 for operations. This is a total of $73,800.
Overall management will be the responsibility of the owner. The owner brings to the business over 20 years of business experience including over five years in restaurant management and five years in directing a multifaceted non-profit housing program. The general manager will have a minimum of 10 years experience. A major emphasis of Coffee Circus will be to hire economically disadvantaged or at-risk persons and provide them with job training. The majority of these persons will be identified through the City of Santa Fe Job Training Partnership.
To provide a friendly, comfortable atmosphere where the customer can receive quality food, service and entertainment at a reasonable price.
PURPOSE OF BUSINESS PLAN
This document is intended to outline the start-up of the business known as Coffee Circus. The business plan has a two-fold mission. One is to obtain financing. The other is to help define the who, what, where, when and how for the business so that the business will have a clear cut plan and operations map.
The goals of the business are to provide a substantial income and to create a business and working environment where both the customer and employee are treated with dignity and respect.
The specific goals of the business are:
Profit - personal income in excess of $50,000 per year within three years
Clientele - create a base clientele of persons who live and work in the area. These persons will like a relaxed atmosphere where they can "hang out"
Employees - Competent employees (at least 51% from low-income neighborhoods) who are committed and loyal
Coffee Circus will be a coffee house/restaurant located in the Hart Plaza on the southeast corner of 37th Ave. and Holgate.
The coffee house will offer a variety of choices to the customers. Coffee and tea of all sorts will be offered. The choices of coffee will range from espresso to latte, from regular flavor to raspberry-mocha. The teas will range from English to flavored varieties.
Juice, soda, and non-alcoholic beverages also will be available. For those who want something else to drink, both wine and beer will be on sale. Wine can be ordered by the glass or by the carafe. Bottled micro-brewed beer will be available.
The breakfast menu will feature croissants, muffins, bagels, donuts, french pastries, fruit filled crepes, etc. Except for the crepes, the baked goods will be purchased from The Works. Lunch and dinner will feature sandwiches, salads and seven different soups. In hot weather, a variety of cold soups will be offered. In addition, Coffee Circus will feature a vast array of appetizers. These will include artichokes (Both stuffed or served with butter); stuffed mushrooms; mini loaves of bread served with your choice of a bowl of pesto, queso, or green chile, etc. Desserts will consist of cheesecakes (some fat-free), pastries, pies, fresh fruit and cheese.
The interior design of the building will focus on projecting a relaxed atmosphere. The bottom portion of the walls will be forest green with the upper being eggshell white. The carpeting will be forest green. The table and chairs will be custom made from light oak. The chair coverings will be of forest green material and heavily padded for comfort. The table tops will be a marbleized forest green laminate. Plants will abound in gold pots. The dishes and eating utensils will be mismatched and purchased from antique and thrift stores. The coffee cups will be from the forties and fifties era. They will be provided by a local antique business and will be for sale.
Coffee Circus will be divided into different areas. An advantage to having different areas is that customers can partake in different activities without bothering anyone (i.e., political discussions will not interfere with the music, or the music will not interfere with those playing board games or reading).
The emphasis will be on providing a comfortable environment for the customer where they will want to linger and return many times.
The time is right for opening a coffee house in the city of Santa Fe. Coffee houses are having a great deal of success, which is evidenced by the full houses every day of the week. The southeast side of Santa Fe has no such places. The closest competition is the Coffee Club located at Santa Fe Park and Main. In order to reach a coffee house, a customer from our area must drive 20 to 30 minutes. The majority of these establishments are located on the West side of town. A few are beginning to open in the downtown area.
The area comprising a three mile radius around Coffee Circus is heavily populated with young, upwardly, mobile persons with expendable income. This is complimented by a large number of upper middle class "Baby Boomers" who are a large portion of those persons who frequent coffee houses.
An additional strength which this business will possess is the ability to change with the times. Rather than limiting the future opportunities by having a small area, Coffee Circus will have 3,525 square feet of space. The kitchen will be designed for flexibility. As the fad of coffee fades, Coffee Circus will be able to change to a full course restaurant or whatever the situation calls for.
The business will bring with it a strong group of persons with an extensive background in both restaurants and business.
There are risks inherent with any business. However, the restaurant business carries with it very unique risks. Most critical is the customers' changing tastes. Another is the economy. Restaurants rely heavily on serving persons who have expendable income. When the economy takes a down turn, people change their spending priorities. There are less trips to restaurants.
A problem also in restaurants is finding dependable help who will stay with the business. Many restaurant employees tend to be younger and are attempting to move into a career. When either their schooling ends or they find their "dream job," they move on. Often servers filling the positions are non-skilled, and tend to be single mothers or lower educated persons. These persons come with specific circumstances which must be accounted for by management. A single mother may experience child-care problems, or a bus person may have problems with reading. A good owner must learn to deal with these problems in a manner which benefits the business as well as the employee.
Generate monthly sales revenues of $71,000 per month of 3% of the target market within 18 months of opening.
- Maintain a high standard of food quality and service
- Provide first-rate live entertainment without a cover charge
- Ensure a friendly comfortable atmosphere
- Place monthly ads in neighborhood publications
- Distribute monthly fliers to neighborhood, businesses and churches
- Offer discount coupons
- Maintain and use a customer mailing list
Target Customer
The customer will be between 18 to 55 years old. The income level is between $20,000 and $100,000 per year. They will live within three miles of Coffee Circus. They will be white collar workers (managers, professionals, etc.) with expendable income. The education level will range from some college to post-graduate work. A limited number (10%) will come from other areas. This 10% will generally be persons who are coming to see a particular entertainer or poetry reading. A majority of the customers will be persons who enjoy a relaxing atmosphere, conversation and table games.
Estimated Market Share and Sales
Based on the customer profile for Coffee Circus the following numbers were compiled. The report used was prepared by Phoenix Real Estate using information obtained through the Facts Report. The report was prepared using Coffee Circus as the focal point and delineating numbers by a one, three and five mile radius. For purposes of determining market share for Coffee Circus, a three-mile radius was used. National statistics show that most persons do not travel more than three miles to eat or to listen to entertainment. The report shows that 162,908 persons live in the three mile radius. The following is the breakdown of target customers.
Formula For Market Share
The formula takes the total population and then multiplies that number by the percentages in order of importance to the Target Customer.
Total Population × Age% × Income% × Education% × Occupation% = Total Market 162,908×47.08%×55.90%×56.78%×50.91% = 12,393 persons
Market Share For Coffee Circus 2.2% Of Market=276 Cust./Day or 17 Cust./Hour 1.8% Of Market=230 Cust./Day or 14 Cust./Hour 1.6% Of Market=202 Cust./Day or 12 Cust./Hour
Occupancy Levels
The occupancy of Coffee Circus is 127 persons. Two different methods can be used to determine occupancy levels.
Hourly - If you estimate percent of occupancy on an hourly basis, the customer rate would be 9.4% of occupancy. 12 cust/hr /127 = 9.4% occupancy per hour
Mealtime - Typically, you will have two turnovers per meal. Based on projections the percentages would be 23% for breakfast, 27% for lunch and 32% for dinner.
Breakfast - 57 cust/2 = 29 cust/127 = 23% occupancy level
Lunch - 67 cust/2 = 34 cust/127 = 27% occupancy level
Dinner - 79 cust/2 = 40 cust/127 = 32% occupancy level
In reality, the true occupancy rate lies somewhere in the middle. Not all of the customers will come in during those dinner times nor will they be spaced evenly throughout the day.
Promotion & Advertising
The advertising and promotion will take a number of avenues. First, flyers will be distributed in the neighborhood. Ads will be taken out in all of the Catholic church bulletins in the area: Holy Martyr, Queen of Peace and St. Christopher's. These ads will offer 10% off, if the parishioner brings the bulletin with them. The restaurant is located one block from Holy Martyr Church and school. The owner's family attend the church and have a son who has been a student in the school for 7 years. Special events will be promoted with a portion of the proceeds going to the school. Since Coffee Circus will be the first union restaurant in the state, ads will be placed in all of the union newsletters offering a 10% discount to anyone showing their union card. Ads will also be placed in the target areas of the Burns' Grocery, and the local neighborhood newsletters. For special entertainment nights, radio and newspaper ads will be placed. Entertainment and food critics will be given an invitation. On opening night we will have an invitation only party, with over 1,200 invitations being sent.
For businesses in the area, menus will be distributed and ordering will be available by fax. A customer mailing list will be developed with a calendar of events being mailed on a monthly basis.
Sales Tactics
Servers will always ask the customer if they want added items, i.e. specialty coffee, soup with the sandwich, appetizers, and dessert. This will not only increase sales for the business but will also increase the amount of money the server makes. Most people tip according to a percentage of the check. The higher the check the greater the tip. The server can control their own income.
All tables also will have "table tents" or advertisements. The tents will describe upcoming events. Also, pictures and descriptions of items for sale, such as micro-brewed beers, desserts, etc., will be on the tents. The menus will provide detailed descriptions of the items available, including a section describing the different types of beers available. For example, the chili beer.
Service/Warranty
If the customer has a complaint, everything will be done to satisfy them. If that does not work, the customer will be given their meal free of charge.
Competition
Chicken Little - Northwest corner of Holgate and 37th Ave. One block north of Coffee Circus.
Provides home-style cooking. Known for their southern style cooking. Pleasant homey surroundings. The restaurant caters to families who want to eat and leave. No live entertainment is provided. Their prices are moderate with little or no variation. They are known for good quality food and service. Extremely clean and well managed. There is little or no product comparison. They have become successful due to location and reputation.
Burger's Joint - Northwest corner of Holgate and 37th Ave.
A well-known fast food franchise with a good presence and marketing plan. The food and prices are about the same as their competition. There is no product comparison.
LaJolla - Southeast corner of 37th Ave. and Holgate
Serves Mexico City style food. The atmosphere is upscale and the food pricing is moderately high. The food is highly specialized and caters to a certain type of clientele. There is no comparison.
Steve's - Northeast corner of 37th Ave. and Holgate
Serves a full course menu. The pricing is moderate, but cheaper than Chicken Little. The quality is fair. Most persons eat there because of pricing and because they are shopping at the store. There is very little competition for Coffee Circus.
Keep cost of goods sold at or below 30%. Provide customers with prompt and courteous service.
- Provide initial training for all employees
- Hold monthly employee meetings
- Have an open door policy for employee suggestions and concerns
- Implement the use of the Business Plan systems
- Purchase and use the Food Fax software package
- Have clearly defined job descriptions and duties
- Have an employee policy handbook
- Do employee reviews every six months
- Customer suggestion box
- Design kitchen and service area to be efficient
Product Distribution
The product will be distributed in the restaurant by food servers. The food will be cooked on site, except for some of the baked goods. Some of these, such as croissants will be purchased in the raw frozen form and baked daily.
When a customer enters Coffee Circus they will be greeted by a hostess who will seat them and provide them with menus. A server will greet them and give them water. The server will inquire what they would like to drink. The drink order will be prepared by the server. If the drink is either beer, wine or coffee, that will be prepared by the bartender. The drink order will be given to the bartender on a written check, which will be rung up on the register. If the server fixed the drink, it will be rung up on the register by the server. The server will deliver the drinks and then take the food order if the customer is ready. The server will take the food order, ring it up and the order will appear on the cook's computer screen. The cook will prepare the food, in the order the tickets are given. The server will prepare the salads, desserts, hot and cold soups and other items. The cook places the finished food on the window. The server must pick the food up within two minutes. The food is placed on the table and the server will ask if there is anything else which the customer needs. The server will check all the drinks and replenish water, ice tea and plain coffee. The server will ask if the customer needs another drink. Specialty drinks are not refill items. Non-specialty drinks are free refills. The server will familiarize the customer with the operations of Coffee Circus. They will explain to the customer that a number of table games are available if they wish to play. The server will let the customer know about the reading room and present them with a schedule of events. The customer will always be asked if they would like dessert or an after dinner coffee. The server is responsible for checking on the customer in a timely manner. This should be done in an unobtrusive manner. The server will maintain the tables in a clean and sanitary condition. Dirty dishes and plates must be removed immediately. Condiments must be kept full and the containers clean. The server is responsible for presenting the check, payment of the check and returning a receipt to the customer.
The cook is responsible for cooking and preparing all dishes not prepared by the server. The orders will appear on the computer monitor and the cook will prepare them according to the order given. The cook and their assistants are responsible for preparing all items in the morning such as the soups for the day, slicing meat, making specialty items and other dishes for the day. The assistant cooks are responsible for the prep work of all items for the servers and the cooks. This includes stocking all supplies, cutting cheese, fruit, salad items, ice, filling soup tureens, etc.
Cleanliness is required above all else. The servers will keep all of their work areas clean at all times. Spills must be cleaned immediately. After each shift, servers will check the side work chart and have it finished before they leave. This work will be checked by the shift supervisor. The cooking area will be maintained in a clean and sanitary manner. All areas will routinely be wiped down and swept. The cooks and assistants will also have side work which must be completed before leaving. The dishwasher is responsible for keeping the dishes washed and helping with busing the tables if needed. The dishwasher is responsible for mopping the kitchen floor. All employees must read and be knowledgeable of health regulations and follow those rules. Training will be provided by Coffee Circus. Hands must be washed on a routine basis. Smoking is allowed only in designated areas. No smoking is allowed in any food preparation area.
The servers will be required to present a clean appearance. A uniform consisting of an eggshell white polo shirt with Coffee Circus logo, forest green walking shorts or long pants, black sneakers and black ankle socks. The servers must be polite, friendly, and helpful, not only to the customer but to the other staff as well. At no time will employees be allowed to discriminate by remarks, actions or jokes.
Additional regulations are contained in the Employee Handbook.
Cash Register
The cash register system will be Quix 3000 Touchscreen. The built-in system software prints hard or soft guest checks, uses single or multiple remote printers, and reports and tracks data terminal to terminal, or throughout the network. Produces management reports for system, terminal, or revenue center; current and/or to-date totals for:
- Employee/cashier balance reports
- Employee tip reports
- Open and closed check reports
- Time period sales analysis
- Detailed or summarized menu item sales analysis
- Detailed or summarized sales group and category analysis
The food price will be in the moderate range and comparable to other coffee houses in the area. The cost will be determined by not only what the going rate in the area is but also by the percentage of actual cost of the food. The price will not only be competitive, but the food will be tasty, well presented, and large portions will be served in a relaxing atmosphere where the customer will be comfortable. The image projected by the pricing will be that the customer will be getting a fair value for their money; that they do not need to be rich to eat at Coffee Circus and anyone can afford to come in. They will be able to use the books and games. In the evening, they will be able to listen to the live entertainment. During the day, music will be played over the PA.
Credit terms will be offered only in the form of credit card service, such as Visa, MasterCard and Discover. Many people who eat out prefer to pay with credit cards, whether it is to keep track of expenditures or for a work expense account.
The cost of the food will be based on a set percentage. Restaurants traditionally keep food costs between 26% to 32%. Based on the type of food to be served and the delivery system, the percentage for Coffee Circus will be an average of 30% of the actual cost of the food. In order to accomplish this, Food Fax software will be utilized. The software contains the following features.
Inventory Accounting System
Calculates cost of goods, provides shelf-order inventory forms, receiving logs, compares actual usage to average usage by item, ranks highest over and under use items. Tracks vendors, allows look-up by name or vendor item codes. Automatic distribution of invoice amounts to general ledger account numbers. Purchase and transaction recap reports, inventory level control reports, price history and fluctuation reports.
Recipe Costing and Sizing
Plate and batch recipes instantly costed as prices change. Sizing and modeling capabilities.
Menu Analysis
Complete menu and sales analysis reporting. Evaluate menu performance, run products by contribution. Product cost reports available by day or any combination of days. Sales mix can be sequenced to follow "Z" tape order for fast data entry.
Ideal Use/Perpetual Inventory
Tightest possible method of inventory control compares actual use to ideal use by item and computes variance. Includes ability to run perpetual inventories and track batch recipe production variances.
Bid and Purchase Order
Built-in bid pricing system allows entry of vendor bids and automatic selection of best price available. Shopping list feature, automatic PO creation, price history reports and more.
POS Interface
Import sales mix data directly from almost any cash register. POS system or polling package.
Accounts Payable Interfaces
Export purchases to accounts payable system.
The suppliers have all been in business for a number of years and have dependable reputations.
They will supply all of the bread products such as croissants, loaves of bread, pastries, etc. The Works is a major supplier to restaurants in the area.
Genevieve Pie Company
Since 1987, Genevieve Pie Company has been creating a quality line of dessert products satisfying even the most discerning palate. One of their best known customers is The Big Easy.
Genevieve's is also the distributor for Verson Amos. Verson Amos has built a reputation of manufacturing the finest products since 1980. They will supply the cheesecakes.
Southwestern Coffee Roasters
This family owned and operated company has been roasting coffee for almost a decade. They will supply all of the coffee, teas, and equipment. They also provide ongoing barista training for all Coffee Circus employees at no cost.
Lewis Business Systems
Lewis will provide the Purveyor system. For 25 years, Lewis has provided operational solutions to the hospitality industry. Their specialized focus on restaurants, hotels and bars has made them one of the largest dealers of Quix systems in the country.
Powerhouse, Inc.
Powerhouse, Inc. will provide the software package to track the food inventory and pricing. This system was explained in depth previously.
For over a decade, Powerhouse has specialized exclusively in food and beverage management. In addition to its Food Fax software, recognized world-wide as the industry standard, Powerhouse's consulting and training expertise has been utilized by trade associations, publishers, governments and private companies to help operators reduce costs and improve profits.
Brite Lite will provide the outside signage.
Dirt Out will lease the dishwashing system to Coffee Circus. The lease includes all servicing, parts, labor, and chemicals. There is never an added charge. Dirt Out builds, guarantees and services its dishwashers. They provide regular and emergency service whenever you need it.
In Line has been in business for four years doing tenant improvements and design coordination. Clients include, Tasmania Restaurants, Red Bank and St. John's Boats. In Line is versed in all areas of restaurant permitting, design and regulations.
To have a competent and knowledgeable management staff which functions as a team.
- Hire experienced, qualified persons
- Conduct weekly management meetings
- On-going training to include outside classes in food service, management, etc.
- Reviews every six months
- Performance incentives
- Encourage creativity
Organization
Coffee Circus will be operated as a Sole Proprietorship. There will be private investors. However, these investors will be silent investors with a payoff of investment within three years. These investments will be paid twice-yearly in equal installments including interest.
Overall management will be the responsibility of the owner. There will be a general manager and shift supervisors.
As owner, Kirby Pitt brings to Coffee Circus an extensive and varied background. She has been General Manager for two restaurants and has been the Dining Room Captain for a major private club.
Her most recent experience was with a non-profit agency. She was responsible for overseeing three housing programs for the agency and a staff of six persons. Her duties included: monthly reports to Santa Fe Bank, City of Bradford and State Housing Trust Fund; over a $500,000 yearly budget. Ms. Pitt is competent in all areas regarding regulations for the above mentioned organizations, and other government programs.
Also, she performed the grant writing, and was responsible for fundraising and public speaking on behalf of the agency. She worked closely with the Executive Director on purchases of properties for affordable rental from Santa Fe Properties and also wrote the Sante Fe Properties monitoring reports.
In addition, she helped case-work clients, advocated for low income persons, performed housing counseling for persons in danger of foreclosure and worked with union members in need of services.
She serves as a commissioner for the City of Santa Fe Human Service Commission. She is also a member of the executive committee and the community services committee, and serves on the advisory board for the Oasis Family Service Center. In 1984, she was appointed by Mayor Gilda Raye to the Southwestern Village Planning Committee and is a registered lobbyist.
General Manager
Qualifications.
This position has not been filled. The requirements of the position require 10 years experience in restaurants, at least five of those years in some type of supervisory position. A bachelor's degree in hotel and restaurant management is preferable. The candidate for this position will be required to submit a resume and verifiable references. The candidate will be interviewed and hired by the proprietor.
Job Description
The general manager will report directly to the owner. They will be responsible for the overall management of the staff. They will work in conjunction with the owner in ordering supplies, maintaining inventory, handling customer complaints and scheduling staff. Other duties would include ensuring staff coverage for all shifts and reports to the owner.
Shift Supervisor
Must have five years experience in restaurant work. At least three years as a server. They must be at least 21 years old. They must possess a friendly and outgoing personality and have good personal hygiene.
The candidate for this position will be required to submit a resume and applications.
The candidate will be interviewed and hired by the proprietor and general manager.
They will be responsible for the oversight of the servers, bus person and hostess on their shift. They will work under the general manager.
The shift supervisor also works in the capacity of a server and is responsible for waiting on tables, taking the customers' food and drink orders and acting as cashier for their customers. They are responsible for helping to keep the serving area and the customer areas clean and sanitary. They are responsible for helping the assistant cook keep the service area stocked. At the end of their shift, they will be required to complete all side work as assigned.
Qualification
The cooks must have a minimum of five years experience, three of which must be as a cook not an assistant. They must have at a minimum a GED or high school diploma.
The cook will submit a resume and fill out an application. They will be interviewed and hired by the owner and general manager.
The cook is responsible for cooking food served in the restaurant. They also are responsible for preparing food items in advance and seeing that the service area is kept stocked. Their responsibility is to see that the kitchen is kept in a clean, sanitary and working order. They oversee and train the assistant cook.
Assistant Cook
The assistant cook must at a minimum have a GED or be attending school or a training program. They must be at least 18 years of age.
Will be required to submit an application. Will be interviewed and hired by the cook, general manager and owner.
The assistant cook is responsible for assisting the cook in his duties. He/she is responsible for helping to keep the kitchen clean and sanitary. When needed will help with dishwashing duties. He/she is responsible for keeping the service area stocked.
The servers must have at a minimum a GED or be attending school or a training program and one year's experience working in a restaurant. They must be at least 21 years of age. They must possess a friendly and outgoing personality and have good personal hygiene.
Will be required to submit an application. Will be interviewed and hired by the shift supervisor, general manager and owner.
The server is responsible for waiting on tables, taking the customers' food and drink orders and acting as cashier for their customers. They are responsible for helping to keep the serving area and the customer areas clean and sanitary. They are responsible for helping the assistant cook keep the service area stocked. At the end of their shift, they will be required to complete all side work as assigned.
The hostess must have at a minimum a GED or be attended school or a training program. She must be at least 18 years of age and must possess a friendly and outgoing personality and have good personal hygiene.
The hostess is responsible for greeting customers as they arrive at the restaurant and seating them. She is required to take reservations and answer the phones. Also to assist with busing tables or assisting the servers when available. Duties include keeping the lobby area clean.
The bus person must be attending school or a training program, must be at least 16 years of age and have good personal hygiene.
The bus person is responsible for keeping dirty dishes off the tables. When customers leave they must clean the table and prepare it for future customers. They are to help the servers with getting non-alcoholic drinks. They also are responsible for helping the servers. They are responsible for helping the assistant cook keep the service area stocked. At the end of their shift, they will be required to complete all side work as assigned.
To maintain costs of goods sold to 30% or less. To increase sales within an 18 month period to 3% of the target market. To maintain financial records according to GAAP.
- Purchase and use Food Fax software
- Train employees proper food handling to prevent waste
- Maintain a weight and portioning system for food
- Check for quality of food from suppliers when food is delivered
- Maintain storage equipment in proper working condition
- Hire an experienced and qualified accounting firm
- Contract out payroll
- Purchase a personnel computer
- Utilize Business Plan equipment Use Accounting software
Financing Plan and Exit Strategy
The total needed capital for Coffee Circus is $99,000. Owner's cash contribution is $10,000 and other investors and family members is $16,100. The amount needed in loans is $30,800 for equipment, $20,000 for remodeling, and $23,000 for operations. This is at total of $73,800.
An acceptable exit strategy for Coffee Circus is to sell the business to another company. The restaurant business is booming in Santa Fe.
The least desirable plan would be to sell the equipment, furniture and other assets. The remaining balance would have to be renegotiated and a payment plan worked out.
Advertising Schedule
Cost Analysis
Capital Equipment
Mortgage Schedule
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- 1. The Business Plan for Your Coffee Shop Fourth Edition
- 2. The Business Plan for Your Coffee Shop Other Titles of Interest from 125aday.com Publishing Company, Inc. Helping Small Business Do More Business! More Coffee Shop Related Products • Start Your Own Coffee Shop Top Business Books • New Customer Development Program • Customer Care Guide • Market Research: Surveys and Questionnaires • Human Resources: Independent Contractors Special Offers Business Talk™ Newsletter For more information, go to www.125aday.com to sign up or e-mail us at [email protected] ii
- 3. The Business Plan for Your Coffee Shop The Business Plan for Your Coffee Shop Fourth Edition Starting, operating and managing a coffee shop is a complex task. A functional business plan is not only valuable when seeking investment funds, but in the day to day management of the coffee shop. This eleven step business plan will help you create your coffee shop business plan with confidence. This user friendly business plan was prepared with ProBP, the professional business plan software solution. Be sure that you have all of the components; the workbook, the Excel spreadsheet and the Word Option document. Jack Samson 125aday.com Publishing Company, Inc. PO Box 2432 Frisco, Texas USA 75034 866-900-7887 www.125aday.com iii
- 4. The Business Plan for Your Coffee Shop Publisher: 125aday.com Publishing Company, Inc. Cover Design: Chad Wade Photographs & Graphs Copyright © 2007 David Lee This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering professional services. If legal, account, medical, psychological, or any other expert assistance is required, the services of a competent professional person should be sought. ADAPTED FROM A DECLARATION OF PRINCIPLES OF A JOINT COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND PUBLISHERS. Copyright 2004-2008 by 125aday.com Publishing Company, Inc. All rights reserved. Reproduction or translation of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to the Permissions Department, 125aday.com Publishing Company, Inc. 125aday, 125aday.com, Business Talk and ProBP (business plan software) are trademarks of Dallas Distribution and Publishing Company, Inc. Third-Party Materials and Linked Materials - The publisher is not responsible for the content of those "third-party" materials which are not directly related to the publisher, and not under its control or auspices. Further, the publisher makes no representations regarding the content, products, services, advertising or other materials available from "third-party" materials and is not responsible for the legality, decency, copyright compliance, or accuracy of information provided by those individuals/companies which have paid to be linked to this material. Additionally, the publisher will not be held liable for damage or loss (caused or alleged to be caused) in connection with the use of a "third party" material. Please be advised that when you use affiliated services or third-party materials, you may be subject to additional terms and conditions. As with a multitude of other web materials, we ask that you exercise due diligence in browsing any "outside" vendor page. Trademark Notice - The words contained in this text which are believed to be trademarked, service marked, or otherwise to hold proprietary rights have been designated as such by use of initial capitalization. No attempt has been made to designate as trademarked or service marked any personal computer words or terms in which proprietary rights might exist. Inclusion, exclusion, or definition of a word or term is not intended to affect, or to express judgment upon, the validity of legal status of any proprietary right which may be claimed for a specific word or term. iv
- 5. The Business Plan for Your Coffee Shop The Business Plan for Your Coffee Shop Table of Contents Introduction ................................................................................................. 1 Customizing the Business Plan ................................................................. 2 Changing the Page Setup.......................................................................... 2 The Page Tab ...................................................................................... 2 Orientation ...................................................................................... 2 Paper Size ....................................................................................... 2 Print Preview .................................................................................... 2 The Margins Tab .................................................................................. 2 The Header/Footer Tab ......................................................................... 2 Changing the Header......................................................................... 2 Changing the Footer .......................................................................... 2 The Sheet Tab ..................................................................................... 3 Changing the Font and Font Size ............................................................... 3 Changing the Color of the Text .................................................................. 3 Adding or Removing Worksheets................................................................ 3 Renaming the Pages in the Spreadsheet ..................................................... 4 Renaming the Pages in the Spreadsheet ..................................................... 5 Adding or Removing Rows or Columns........................................................ 5 Inserting Pictures .................................................................................... 5 Changing the Formulas............................................................................. 5 Excel Help .............................................................................................. 5 Word® Option........................................................................................... 5 Samples and Illustrations ......................................................................... 6 Changing Chart Information ..................................................................... 6 Mutual Non-Disclosure Agreement............................................................ 8 Step One ...................................................................................................... 9 Your Personal Evaluation .......................................................................... 9 Your Net Worth ....................................................................................... 9 Instructions on How to Complete in Excel ................................................ 9 Your Personal Budget ............................................................................... 9 Why This Information Is Important ............................................................ 9 Step Two .................................................................................................... 11 The Cover Sheet...................................................................................... 11 First Impression! ....................................................................................11 Elements of the Cover Sheet ....................................................................11 Complete the Cover Sheet Section ............................................................11 Saving Your Business Plan File..................................................................11 Cover Sheet Sample ...............................................................................13 v
- 6. The Business Plan for Your Coffee Shop Step Three.................................................................................................. 14 The Executive Summary.......................................................................... 14 The Basics of the Executive Summary .......................................................14 Applying for Loans or Investors ................................................................14 Information That Should Be Included ........................................................14 Mistakes to Avoid ................................................................................16 Mission Statement ..................................................................................16 The Basics of the Mission Statement ......................................................16 Mistakes to Avoid ................................................................................17 Products and Services .............................................................................17 Complete the Executive Summary.............................................................18 When You Have Completed the Executive Summary ....................................18 Executive Summary Sample.....................................................................19 Step Four ................................................................................................... 22 General Company Description ................................................................. 22 Company Description: Business Plan Basics................................................22 Mistakes to Avoid ...................................................................................23 Company Goals and Objectives.................................................................23 Business Philosophy................................................................................23 Legal Form of Ownership .........................................................................24 Complete the General Company Description Section ....................................24 When You Have Completed the Company Goals and Objectives .....................24 General Company Description Sample .......................................................25 Step Five .................................................................................................... 26 Products and Services Description .......................................................... 26 Competitive Advantages or Disadvantages ..............................................26 Pricing Structures................................................................................26 Products and Services Description: Business Plan Basics ..............................27 Mistakes to Avoid ...................................................................................27 Complete the Products and Services Section...............................................28 When You Have Completed the Products and Services Description .................28 Products and Services Description Sample .................................................29 Step Six...................................................................................................... 31 Start-Up Costs and Capitalization ........................................................... 31 Qualified and Non-Qualified Start-Up Costs ................................................31 Qualified Start-Up Costs .......................................................................31 Non-Qualified Start-Up Costs ................................................................31 Budget Allowances..................................................................................31 Evaluating Start-Up Costs ........................................................................32 Start-Up To Do List .................................................................................33 Start-Up Narrative ..................................................................................34 Instructions on How to Complete in Excel ...............................................35 Complete the Start Up Costs Section .........................................................36 When You Have Completed the Start Up Costs and Capitalization Section .......36 Start-Up Narrative Sample.......................................................................37 Step Seven ................................................................................................. 41 The Marketing Plan ................................................................................. 41 Marketing & Sales: Business Plan Basics ....................................................41 vi
- 7. The Business Plan for Your Coffee Shop Mistakes to Avoid ...................................................................................42 Target Market: Business Plan Basics..........................................................43 Mistakes to Avoid ...................................................................................44 Market Research Basics ...........................................................................44 Market Research - Why? ......................................................................44 Market Research - How?.......................................................................45 Primary Market Research ..................................................................45 Secondary Market Research ..............................................................45 Economics of the Industry .......................................................................45 Product .................................................................................................46 Features and Benefits ..........................................................................46 Customers.............................................................................................47 Competition ...........................................................................................47 Niche Market .........................................................................................48 Marketing Strategy .................................................................................48 Promotion ..........................................................................................48 Promotional Budget .............................................................................48 Pricing ...............................................................................................49 Proposed Location ...............................................................................49 Complete the Marketing Plan....................................................................50 When You Have Completed the Marketing Plan ...........................................50 Marketing Plan Sample ............................................................................51 Step Eight................................................................................................... 54 Sales Forecast......................................................................................... 54 Financial Projections: Business Plan Basics .................................................54 Sales Forecast .......................................................................................55 The Excel Spreadsheet ............................................................................55 Instructions on How to Complete in Excel ...............................................55 Complete the Sales Forecast Section .........................................................56 When You Have Completed the Sales Forecast............................................56 Step Nine ................................................................................................... 57 The Operational Plan .............................................................................. 57 Operational Plan: Business Plan Basics ......................................................57 Mistakes to Avoid ...................................................................................57 The Operational Plan...............................................................................58 Production .............................................................................................58 Location ................................................................................................59 Physical Requirements .........................................................................59 Access ...............................................................................................59 Construction.......................................................................................59 Cost ..................................................................................................59 Legal Environment..................................................................................59 Personnel ..............................................................................................59 Inventory ..............................................................................................60 Suppliers...............................................................................................60 Managing your Accounts Receivable ..........................................................60 Managing your Accounts Payable ..............................................................61 Complete the Operational Plan Section ......................................................61 When You Have Completed the Operational Plan .........................................62 Operational Plan Sample..........................................................................63 vii
- 8. The Business Plan for Your Coffee Shop Step Ten ..................................................................................................... 66 Management and Organization ............................................................... 66 Management Team: Business Plan Basics...................................................66 Specific Team Members ...........................................................................66 Board of Directors ..................................................................................67 Board of Advisors ...................................................................................67 Consultants ...........................................................................................67 Mistakes to Avoid ...................................................................................68 Professional and Advisory Support ............................................................68 Complete the Management and Organization Section...................................68 When You Have Completed the Management and Organization .....................68 Management and Organization Sample ......................................................69 Step Eleven ................................................................................................ 71 The Financial Plan................................................................................... 71 Financial Projections: Business Plan Basics .................................................71 Mistakes to Avoid ...................................................................................72 The Financial Plan for Your Company .........................................................73 Instructions on How to Complete the Profit-Loss Narrative ........................73 Profit-Loss Projection ..............................................................................73 Instructions on How to Complete the Profit-Loss Statement.......................74 Projected Cash Flow................................................................................74 Instructions on How to Complete the Projected Cash Flow.........................75 Opening Day Balance Sheet .....................................................................76 Instructions on How to Complete the Balance Sheet .................................76 Break-Even Analysis ...............................................................................76 Instructions on How to Complete the Break-Even Analysis ........................77 When You Have Completed the Financial Plan .............................................77 Financial Plan Sample .............................................................................78 Appendixes ................................................................................................ 81 Your Business Plan Now Complete and Ready for Printing ......................... 82 In Conclusion ............................................................................................. 82 PowerPoint:Demonstrations ................................................................... 82 Non-Disclosure Agreement......................................................................... 84 Attachment One ......................................................................................... 87 A Discussion of the Basic Legal Forms of Ownership .............................. 87 Proprietorship, Partnership or Incorporation?..............................................87 Advantages and Disadvantages of Proprietorship .....................................87 Advantages.....................................................................................87 Disadvantages.................................................................................88 Advantages and Disadvantages of Partnership.........................................88 Advantages.....................................................................................88 Disadvantages.................................................................................89 Advantages and Disadvantages of Incorporating ......................................89 Advantages.....................................................................................89 Disadvantages.................................................................................90 Registering a Proprietorship or Partnership .............................................90 Registering a Corporation .....................................................................90 Incorporating a Company in your State ..................................................90 viii
- 9. The Business Plan for Your Coffee Shop Attachment Two ......................................................................................... 91 Information Resources ........................................................................... 91 U.S. Small Business Administration (SBA) ..................................................91 Service Corps of Retired Executives (SCORE) .............................................92 Small Business Development Centers (SBDCs) ...........................................92 Small Business Institutes (SBIs) ...............................................................92 SBA Business Development Programs........................................................92 Other U.S. Government Resources ............................................................92 Federal Publications ................................................................................92 Consumer Information Center (CIC) ..........................................................93 Consumer Product Safety Commission (CPSC) ............................................93 U.S. Department of Agriculture (USDA) .....................................................93 U.S. Department of Commerce (DOC) .......................................................93 U.S. Department of Health and Human Services (HHS) ................................93 U.S. Department of Labor (DOL)...............................................................94 Internal Revenue Service (IRS) ................................................................94 U.S. Environmental Protection Agency (EPA) ..............................................94 U.S. Food and Drug Administration (FDA) ..................................................94 For More Information ..............................................................................94 Government and State Websites ................................................................ 96 Index ......................................................................................................... 97 ix
- 10. The Business Plan for Your Coffee Shop Introduction There are few very secrets and absolutely no short cuts to preparing a business plan for a coffee shop. Careful investigation, complete research, and a through thought process is required to complete an accurate business plan for a coffee shop. The real value of creating a business plan is not in having the finished product in your hand; rather, the value lies in the process of researching and thinking about your business in a systematic way. The act of planning helps you to think of things thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later. This business plan is carefully structured to take you a step at a time. In order to complete this business plan accurately, you should take each step, in order, and then move on to the next step. You do not have to complete the entire business plan at once. We do suggest that you complete each step before leaving your work. Important Notes and Tips Throughout this business plan, there will be important notes and tips about entering information into the business plan spreadsheet template, formatting the business plan spreadsheet template, Word option narratives, and printing suggestions and alerts. If you have any problem with these areas, check the Appendix on page 81 for trouble shooting information related to these important notes and tips. So when you see these, carefully read the information! Let’s get started. The Business Plan for Your Coffee Shop is divided into eleven (11) steps. These steps are: Step One – Your Personal Evaluation on page 7 Step Two – The Business Plan Cover Sheet on page 11 Step Three – The Executive Summary on page 13 Step Four – General Company Description on page 22 Step Five – Products and Services on page 26 Step Six – Start Up Costs on page 31 Step Seven - The Marketing Plan on page 41 Step Eight – Sales Forecasts on page 54 Step Nine – The Operational Budget on page 57 Step Ten - Management and Organization on page 66 Step Eleven – The Financial Plan on page 71 Appendixes on page 81 Your business plan Is Now Complete and Ready for Printing on page 82 1
- 11. The Business Plan for Your Coffee Shop In Conclusion on page 82 Customizing the Business Plan You can customize the business plan and how it looks when viewed on the computer and when the business plan is printed. Here we explain some of the basics of customizing the Excel® spreadsheet. Changing the Page Setup The Page Tab Orientation Here you can select to view and print your business plan in portrait (vertical) or landscape (horizontal) format. The default setting is portrait. Paper Size Here you can select to and view print in letter, legal or custom paper sizes. The default setting is letter. Print Preview Here you can select to print the business plan from the back to the front, or vice versa. The default setting is back to front. The Margins Tab Here you can select the margins for your business plan. The default settings are the recommended settings. The Header/Footer Tab Changing the Header Click on the Custom Header button and you can customize the header for your business plan. Also notice that you can select a print preview from this screen that allows you to see the entire page, with headers and footers. After changing the header, click OK to save your changes. Changing the Footer Click on the Custom Footer button and you can customize the header for your business plan. After changing the footer, click OK to save your changes. 2
- 12. The Business Plan for Your Coffee Shop The Sheet Tab Here you can adjust and set the: Print Area Print Titles Print Instructions for: Gridlines Row & Column Headings Comments Page Order Changing the Font and Font Size You can select the entire worksheet or specific text to assign font and font size to in the workbook and make your changes on the toolbar. You can have different size fonts on the same page. The default font is Trebuchet MS and the font size varies. You can select the Formatting Toolbar that will show the font and font size. It will look like this: Changing the Color of the Text You can select the entire worksheet or specific text to assign font and font size to in the workbook and make your changes on the toolbar. You can have many different colors on the same page. The default color is the color that is on the worksheets now. Adding or Removing Worksheets You can add worksheets by clicking on Insert, Worksheet. You will want to click on the tab next to the area where you want to insert the worksheet. You can delete a worksheet by clicking on Edit, Delete Sheet. Spreadsheet Note Important Note Regarding Deleting a Worksheet WARNING: if you delete a sheet with formulas that extend to other pages in the spreadsheet, you will receive errors in the formulas. So be sure you want to delete the worksheet before doing so! 3
- 13. The Business Plan for Your Coffee Shop Viewing the Pages in the Spreadsheet The pages of the spreadsheet are shown at the bottom of the page as tabs. To view the different pages, the sheet tabs Sheet tab bar appears at the bottom of the screen with tab scrolling buttons displayed on the left side. If the Sheet Tabs are not there, you can restore them by the following: 1. On the Tools menu, click Options. 2. On the View tab, under Window options, select or clear the Sheet tabs check box. You will notice that the columns are labeled with letters (A, B, C, etc) and the rows are numbered. As we go through spreadsheets, we will refer to the column letter and the row number. The column letter is across the top of the spreadsheet. The row number is along the left hand side of the spreadsheet. Each individual block in the spreadsheet is called a cell. Rows, Columns and Cells While we have attempted to include everything necessary in these spreadsheets, if you add rows to the spreadsheets, the totals may not add up! You will need to adjust the formulas to add up the figures if you add rows. While this is not difficult, you will need to ensure that you can adjust the totals so the figures will be correct. You can also change the text colors, fonts, and sizes of the fonts as you work. 4
- 14. The Business Plan for Your Coffee Shop Renaming the Pages in the Spreadsheet Select the tab you want to rename. Right click on the tab and select Rename. Type the new name of the page, but there is a character limit. Adding or Removing Rows or Columns You can rows or columns by selecting where you want to add the row or column. Then select Insert, then row or column. You can remove an entire row by clicking on the row number (far left) and selecting Edit, delete. You can remove an entire column by click on the column and selecting Edit, delete. Spreadsheet Note Important Note Regarding Deleting a Rows or Columns WARNING: if you delete a cell, row or column with formulas that extend to other pages in the spreadsheet, you will receive errors in the formulas. So be sure you want to delete the cell, row or column before doing so! Inserting Pictures You can insert pictures from your computer into the business plan by selecting the cell where you want the picture to be inserted. Then select Insert, Picture and browse to the picture you want to insert. Double click the picture and then format the cell. Changing the Formulas Changing or adding formulas is not extremely difficult in Excel®. However, it does require a working knowledge of the formulas. You can search the Help section for information pertaining to the formula you want to change or add. Excel Help Depending on the version you are using, you can use the Help section in the application and later versions have online extend help resources. Just click on Help on the toolbar or you can hit F1. Word® Option If you are not familiar with how to enter text into the Excel® spreadsheet, you might find it easier to enter all of the narrative information in the Word® Option document. If you use the Word® Option document, you will need to manually enter the page numbers onto each page of your business plan. 5
- 15. The Business Plan for Your Coffee Shop Samples and Illustrations In each step of the business plan, we provide you either a sample or an illustration of the information that you will need to provide in the step. Sample Illustration Excel Step 1 Net Worth √ Step 2 Cover Sheet √ Step 3 Executive Summary √ Step 4 General Company Description √ Step 5 Products and Services Description √ Step 6 Start-Up Costs Narrative √ Step 6 Start-Up Costs √ Step 7 Marketing Plan √ Step 8 Sales Forecast √ Step 9 Operational Plan √ Step 10 Management and Organization √ Step 11 Financial Plan Narrative √ Step 11 Profit-Loss Statement √ Step 11 Projected Cash Flow √ Step 11 Balance Sheet √ Step 11 Break-Even Analysis √ Changing Chart Information We have provided charts in the Excel® spreadsheet for the information that bankers, investors, and other lenders want to see in your business plan. The charts are automatically produced from the information that you enter. Based on the information that you enter, you may need to change the information on the axis of the chart. For example, this Chart Example 1 is from Step One, Personal Net Worth. As you can see, the Income Needed axis on the left is in the increments of $100,000 and $200,000. The axis information needs to be changed to make the information look better and more visible. 6
- 16. The Business Plan for Your Coffee Shop Chart Example 1 We have changed the axis information to increments of $10,000 up to $90,000. See the difference in Chart Example 2 below. Chart Example 2 How to change entries on the X-axis or Y-axis: 1. Right click on the Axis that you would like to change and then click the tab labeled Scale. 2. When you have determined what range of numbers you want to use insert them into the proper boxes to the minimum and maximum units that you want to use. 3. With this option you can also change the font, sizing of the font, the category and alignment. 7
- 17. The Business Plan for Your Coffee Shop Mutual Non-Disclosure Agreement A non-disclosure agreement (NDA) can send up red flags to your intended audience. A seasoned banker or venture capitalist is bound by client confidentiality and may find a NDA insulting. Secondly, if the business needs to protect its ideas and concept at this stage of the game then there may not be any barriers to entry for others to enter the market. A simple confidentiality clause at the front of the plan should suffice. In some cases, such as setting up a strategic alliance a non-disclosure may be necessary. If in doubt, consult with a lawyer. A sample agreement is shown on page 84. We have chosen to include a Confidentiality and Recognition of Risks statement on the Cover Sheet. You can view this statement on the Cover Sheet Sample on page 13. 8
- 18. The Business Plan for Your Coffee Shop Step One Your Personal Evaluation Your Net Worth Before starting your coffee shop, you need to have a firm grasp on your own personal financial situation. For that reason, the first step in preparing your business plan will be to determine your personal financial picture. Instructions on How to Complete the Excel Spreadsheets Refer to your Excel® Spreadsheet. The first page is entitled Step 1 -Your Net Worth. In viewing the first page of the Excel® spreadsheet entitled Step 1 -Your Net Worth, you will find that this information is very straight forward and simple, so a detailed discussion is unnecessary. Just fill in the blanks. At the bottom of the page, you will see your Estimated Net Worth. The areas in the light blue color automatically fill themselves in, so do not enter any figures in these cells. Hopefully, this will be a positive number. Your Personal Budget Refer to your Excel® Spreadsheet, Step 1 – Your Net Worth and scroll down to the section entitled Your Personal Budget. Again, this information is commonplace and you should know what dollar amounts to enter into the cells. For instance, in Column C, Row 56, this is monthly mortgage. If you monthly payments are $1,500.00, enter 1500 in Column D, Row 56. You will see that this Personal Budget is for 1 month, 3 months, 6 months, and 1 year. You should also notice that as you enter your monthly mortgage payment, the spreadsheet automatically totals the rest of the row. So you only need to enter the monthly amounts to get the 3 and 6 months totals and the yearly total. Why This Information Is Important In starting your coffee shop, you need to have your personal financial situation firmly planted on the ground. Starting a business is difficult enough without personal financial problems getting in the way of your success. If the Total Income Needed (Column D, Row 89) is greater than your Total Income (Column D, Row 87), you have some financial issues to fix before starting your coffee shop. We can’t tell you how to fix this problem, but we 9
- 19. The Business Plan for Your Coffee Shop can tell you that your will be starting your coffee shop in financial trouble and that is no way to start a business! In the example below, the total income is $8,000 a month with monthly expenses of $4,355. Therefore, there is a surplus of funds monthly for savings, investment and/or starting a business. Figure 1-1. Income Differential Figure 1-2. Income Differential Now, assuming that your personal financial situation is acceptable, you are ready now to begin preparing The Business Plan for Your Coffee Shop. 10
- 20. The Business Plan for Your Coffee Shop Step Two The Cover Sheet First Impression! The Cover Sheet is the first page of your business plan. The cover of the document is often the "First Impression" of your shop for any interested parties or investors. The purpose of a cover is to tell the reader what the document is about. Your cover sheet should include: Name and business name Company logo Address Telephone number Fax number E-mail address Other contact information Tip Important Tip Cover Sheet The cover should be attractive and professional looking. Fonts used should be easily read and color contrasts should be pleasant to the eye. Elements of the Cover Sheet The information is very basic. You can view an example of a Cover Sheet on page 13. Complete the Cover Sheet Section You can prepare the Cover Sheet in Excel® or Word®. To complete the Cover Sheet in Excel®, go to the Excel® spreadsheet to the tab labeled Step 2 – Cover Sheet. Fill in the information and save your work. To complete the Cover Sheet in Word®, go to the Word® options file and complete the information. Saving Your Business Plan File As you complete the Steps in this business plan, be sure to save your work often. 11
- 21. The Business Plan for Your Coffee Shop Tip Important Tip Save Your Work Often Nothing is worse than working on your business plan for an hour and then having the computer shut down expectedly. Save your work often and you won’t lose your information! When you have completed the Cover Sheet, you are ready for the next step in the preparation of your business plan. So proceed to Step Three, the Executive Summary on page 13. 12
- 22. The Business Plan for Your Coffee Shop The Business Plan For Perk Me Up Coffee Shop Perk Me Up Coffee Shop 2738 Commerce Way Any Town, State, Zip Contact Person: Dustin Roberts Telephone: 222-333-4444 Fax: 111-222-3333 Email: [email protected] Confidentiality and Recognition of Risks Confidentiality Clause The information included in this business plan is strictly confidential and is provided on the understanding that it will not be disclosed to third parties without the expressed written consent of Dustin Roberts. Recognition of Risk This business plan represents management's best estimate of the future potential of our business venture. It should be recognized that not all-major risks can be accurately predicted or otherwise avoided and that few business plans are free of errors of omission or commission. Therefore investors should be aware that this business has inherent risks that should be evaluated prior to any investment. 13
- 23. The Business Plan for Your Coffee Shop Step Three The Executive Summary The Basics of the Executive Summary The Executive Summary is a narrative and should be one to two pages in length. We certainly suggest you make it two pages or less, especially if investors or bankers will be reviewing your business plan for loan or investment purposes. You should explain the fundamentals of your coffee shop: 1. What will your menu products and store services be, 2. Who will be your customers, 3. Who are the owners of your coffee shop, and 4. What you think the future holds for your coffee shop and the industry. You should make this narrative enthusiastic, professional, complete and concise without overstating the financial figures. If You Will Be Applying For Loans or Investors If you will be applying for a loan or looking for investors, state clearly how much you want, precisely how you are going to use it, and how the loan or investment will make your coffee shop more profitable and successful, thereby ensuring repayment. Tip Important Tip Applying for Loans or Approaching Investors If you are going to use your business plan for applying for loans and especially if you are going to be looking for investors, make sure that your business plan meets any requirements as it can be construed as a Securities Offer. You consult with your attorney regarding this matter. What Information Should Be Included in the Executive Summary? We have provided a sample Executive Summary to help give you an idea of the way the information can be formatted. See the sample Executive Summary on page 19. The following are commonly used sub-headings to cover the key points. Avoid general statements and be sure to clearly articulate key numbers. • The Company 14
- 24. The Business Plan for Your Coffee Shop • Mission statement • Management • Products & Markets • Sales and Profit Summary • Funding Requirement • Investment Proposal Regardless of how you organize your Executive Summary, be sure to answer the following questions (note - due to the sensitive, confidential nature of what you might say in such a document, you might want to restrict your disclosure in certain areas and only reveal such information to others if you are assured of confidentiality). You should address these questions, and any others which you consider important, under headings such as those noted above. We have provided a sample of a simple Executive Summary to help give you an idea of the way the information can be formatted. See the sample Executive Summary on page 19. Questions to Address: 1. What is the full, legal name (and jurisdiction of incorporation) of your coffee shop (if it exists) and a brief history (when incorporated, ownership and capital structure, track record, accomplishments to date if any, etc)? Don't forget to include a complete address and contact details (email address, telephone numbers, etc). 2. What is the "Mission" of your coffee shop (i.e. what is it setting out to achieve or accomplish)? 3. What is the market which your business is going after (who, where, size -in dollars) and what is the unique (i.e. proprietary advantage in the form of patents, trade secrets, trademarks) or new product or service which is being offered to this market? A comment on competition is useful. Also, identify and current and potential customers. Testimonials are helpful. 4. Who are the key people behind your coffee shop (i.e. why would someone entrust them with their money?) and what are their credentials? Include all board members and key management people. 5. What does your coffee shop expect to achieve in sales and profit (before tax) (in $) in years 1, 2, 3 and beyond? 6. How much capital is needed (at various stages over the first 3 years)? And what are the uses to which these funds will be applied? 7. What has already been invested (# of years sweat equity, or seed investment amounts, i.e.#[email protected]$xx, and by whom)? 8. What is being offered for the investment (e.g. equity %, board seat, etc.) 9. What kind of return might an investor expect? Over what time frame? And what is the "exit strategy"? 10.What else is important to note? (that hasn't been covered elsewhere) 15
- 25. The Business Plan for Your Coffee Shop Executive Summary: Mistakes to Avoid Here are several common mistakes that can make your Executive Summary less effective: • Lacking a specific focus • Too long and wordy, and failing to get to the point • Trying to be all inclusive (it should be a powerful summary) • Failing to demonstrate a special or unique opportunity • Failing to outline the terms of the investment sought • Failing to generate enthusiasm in the reader Some suggestions to combat these problems: • Limit your Executive Summary to a maximum of 3 pages (at the very most) • If possible, attempt to present your Executive Summary on 1 or 2 pages • Focus on the opportunity you are presenting your investor and explain why it is special • Make certain that the opinions and claims in your Executive Summary are fully supported in the other sections of your business plan • Attempt to use only concrete facts and figures that explain your business concept, market niche and financial projections • Don't forget to include the details of your investment (the amount you need, what you will spend it on, and the return you offer your investor) • Keep your reader in mind - why are they reading the plan and what response/action to you hope to generate? Mission Statement Many companies have a brief mission statement, usually in thirty words or less, explaining their reason for being in business and their guiding principles. Some are very complex. You should carefully think through your own personal Mission Statement for your coffee shop, also referred to as Mission and Vision Statements. You might write down whatever comes to mind now. The good news is that you can change, revised, and detail your Mission Statement later on, as you should with your entire business plan over the years. The Basics of the Mission Statement The Mission and Vision Statements set the tone for not only your business plan, but also for your company. They define the path your company will follow and act as a guiding principle by which your company functions. 16
- 26. The Business Plan for Your Coffee Shop Your Mission and Vision Statements tell your reader what you and your business are all about - what your company stands for, what you believe in, and what you intend to achieve. Economy of words is critical. This doesn't necessarily mean that they should be short at the expense of effectiveness, but that each word should be powerful and meaningful. Be clear and concise and make it obvious what your company is attempting to do. Is there a difference between a mission and vision statement? Yes, the differences are: Your VISION defines your long-term dream. It should not be achievable. That may sound ridiculous, but the objective is for your vision to always be just slightly out of your reach. It's what you constantly strive to attain, and it becomes your reason for being. Your MISSION is what you intend to become or accomplish. It should be challenging but achievable. A well-written mission statement demonstrates that you understand your business, have defined your unique focus, and can articulate your objectives concisely to yourself and others. Mission & Vision: Mistakes to Avoid Here are some of the "don'ts" to avoid when writing your Mission Statement or Vision Statement: • Don't regurgitate a description of your business. • Don't make it boring. • Don't make it the length of a Ph.D. thesis. • Don't fake emotion. • If you don't believe it, don't include it. • Don't lie or claim to be something you aren't (i.e. intend to do exactly what you say you are going to do in your mission statement). • Don't forget to get the input of everyone on your team. Products and Services This is a SUMMARY of the menu products and store services that you will offer in your shop. The detailed products and services section is in Step 5 of the business plan. For now, you might have a good idea of the menu products and store services that you will offer. Some might include the following: Coffee Club Blends Special Blend Full Service Menu Buffet Specials 17
- 27. The Business Plan for Your Coffee Shop Grab and Go Menu Café Rental Delivery Service Banquet Facilities Smoking Facilities Business Meetings Souvenirs Other Retail Sales Bakery Products Cold and Hot Beverages (Other) Describe each of the menu products and store services you will offer in your coffee shop. Go into as much detail as necessary for the reader to get an understanding for what the enterprise will be. Make it interesting. It is important to point out how your coffee shop is different from other coffee shops. Just saying "It is better" is not enough. You must tell how it is better. Every business claims to be "high quality, better service". While a business must have quality and good service, it is no real selling point, since the consumer is bombarded with that claim at every turn. One can not bore a reader into buying their proposal! One must convince them about their product or service. If it can not be done here, it won’t be done in the market place when your business starts. Complete the Executive Summary To complete the Executive Summary in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 3 – Executive Summary. Fill in the information and save your work. To complete the Executive Summary in Word®, go to the Word® options file and complete the information. When You Have Completed the Executive Summary Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Four, General Company Description. 18
- 28. The Business Plan for Your Coffee Shop The Business Plan For Perk Me Up Coffee Shop Executive Summary The Company Perk Me Up Coffee Shop is incorporated in the state of Washington. It is equally owned and managed by its two partners. The company intends to hire six full-time waitresses and six part-time workers/students to handle day to day operations. Mission Statement Perk Me Up Coffee Shop aims to offer beverages, coffee, and pastries at a competitive price to meet the demand of the local market area residents. Management Dustin Roberts has extensive experience in sales, coffee products, and management. Mr. Roberts was manager of Coffee and Donuts. Lynn Baur brings experience in the area of office management and financial accounting. Ms. Baur was operating manager of Coffee To Go. Products & Markets The Company will provide the following products and services: Coffee Club Blends Special Blend Full Service Menu Buffet Specials Grab and Go Menu Café Rental Delivery Service Banquet Facilities Smoking Facilities Business Meetings Souvenirs Other Retail Sales Bakery Products Cold and Hot Beverages (Other) 19
- 29. The Business Plan for Your Coffee Shop The Company will target the following market: local market area residents. Sales and Profit Summary Perk Me Up Coffee Shop is a start-up company. Financing will come from the partners' capital and a ten-year SBA loan. The following chart and table illustrate the company's projected initial start-up costs. Start-up Funding Requirement Perk Me Up Coffee Shop expects to raise $110,000 of its own capital and to borrow $100,000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required. Perk Me Up Coffee Shop anticipates sales of about $389,000 in the first year, $443,000 in the second year, and $590,000 in the third year of the plan. The company should break even by the fourth month of its operation as it steadily increases its sales. Profits for this time period are expected to be approximately $33,000 in year 1, $56,000 by year 2, and $76,000 by year 3. The company does not anticipate any cash flow problems. 20
- 30. The Business Plan for Your Coffee Shop Investment Proposal The company is currently seeking total capital in the amount of $110,000 to be repaid as follows: Interest only for five (5) years at a negotiated rate (APR). Principal payments of $10,000 per year plus interest payable as negotiated, but quarterly payments are preferred. Stock, equity or ownership is available as negotiated. 21
- 31. The Business Plan for Your Coffee Shop Step Four General Company Description The General Company Description is made up of the following: Company Goals and Objectives on page 23 Business Philosophy on page 23 Legal Form of Ownership on page 24 Company Description: Business Plan Basics The Company Description section of your business plan should outline your company’s basic background information and business concept. Explain in general terms who you are and what you do. It should also cover the history of your company, how you reached this point, and where you intend to go in the future. Consider covering the following in your company description section: Legal Description Include details about where and when the company was formed, where and when it was incorporated, a one line description of what business you are in, and a brief overview of what your shop offers. If the location of your shop is important, explain the advantages and benefits to your reader. History of the Company Provide a general overview of the history of your company. Organize details of your company into a timeline or narrative format, and include your achievements and significant milestones. Explain why you started the shop, the driving force behind its inception, and how your company’s product/service mix has changed over time. Include historical data on sales, profits, individual menu products and store services, number of employees, and other important facts to build a case for your company. Current Status Provide a snapshot of where your company is today. Are you in one location, what do you offer to your customers now, how many employees do you have, and how successful are you? Point out your current strengths, but also honestly and frankly address your weaknesses. Investors know all businesses have weak points. You demonstrate business maturity by acknowledging your weaknesses and outlining steps to combat them. Future Goals This section gives your reader an idea of where your company is heading. What are looking to accomplish over the next 1, 3, 5 and 10 years? Relate these goals to the investment you seek so an investor understands why you need their money and what you intend to do with it. Explain the overall approach for reaching growth and profit goals in optimistic language, but 22
- 32. The Business Plan for Your Coffee Shop make sure it's realistic. It's easy to make rosy projections about the future of your coffee shop, but it's harder to make them believable. Company Description: Mistakes to Avoid The company description should clearly explain your shop and the products and services you offer. This section could be considered the who, what, why, where, when and how of your company, with the focus on significant highlights of your business. Here are some of the most common mistakes that we find in the company section: • Including far too much detailed information about your business • Providing information that an investor would consider your "personal opinion" • Appearing as though you have no business history or business purpose • Leaving out important business and legal particulars • Writing the section in an unorganized or confusing manner Company Goals and Objectives for Your Coffee Shop Your goals and objectives for your shop are destinations; where you want your shop now and in the future. Objectives are progress markers along the way to measure goal achievement. For example, a goal might be to have a healthy, successful shop that is a leader in freshly brewed import JavaBest brand coffee availability and world famous Southern Style® pecan pie. Objectives might be annual sales targets and some specific measures of customer satisfaction. Tip Important Tip Goals & Objectives This particular area of the business plan may be difficult to completely fill out at this time. You might need additional financial data to reasonable determine your goals and objectives. Nevertheless, you should make some notes in on the page and then proceed. Business Philosophy This is a description of what is important to you in your business as the owner and operator of a coffee shop. You will need to address, in some detail, the following: 1) To whom will you market your products and services. 2) Describe who your target market is. 3) Describe the coffee industry with some emphasis on the following items: 4) Is the shop in a growth industry? 23
- 33. The Business Plan for Your Coffee Shop 5) What changes do you foresee in your industry, short term and long term? 6) How will your company be poised to take advantage of the changes mentioned above? 7) Your most important company strengths and core competencies. 8) What factors will make your shop succeed? 9) What do you think your major competitive strengths will be? 10) What background experience, skills, and strengths do you personally bring to this new venture? Legal Form of Ownership Describe what legal form of ownership you have decided to form for your coffee shop; Sole Proprietor, Partnership, Corporation, Limited Liability Corporation (LLC) and describe why you have selected this form. Tip Important Tip Legal Form If you haven’t determined the legal form of ownership, you certainly need to discuss with your attorney and/or accountant. We will provide you some information here about this, but in no way is this information to be assumed to be legal advice. Only your professional legal and accounting team can correctly advice you what you should do in this regard as to the legal form of ownership of your coffee shop. For a general discussion on the legal forms of business ownership, please see Attachment One – A General Discussion on page 84. We have provided a sample General Company Description to help give you an idea of the way the information can be formatted. See the sample General Company Description on page 25. Complete the General Company Description Section To complete the General Company Description in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 4 – Gen Co Description. Fill in the information and save your work. To complete the General Company Description in Word®, go to the Word® options file and complete the information. When You Have Completed the Company Goals And Objectives Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Five, Products and Services on page 26. 24
- 34. The Business Plan for Your Coffee Shop The Business Plan For Perk Me Up Coffee Shop General Company Description Company Goals and Objectives The initial goal of the Company will be to gain enough customers in the first six (6) months of operation to reach a break even point between expenses and revenue. In the following twelve months of operation, the Company will strive to increase the total base increase of new customers by 10% per quarter. Thereafter, the Company will strive for a total base increase of new customers by 5% per quarter. Business Philosophy The Company will provide top quality menu products and store services to a market consisting of local market area residents. The coffee industry is a staple growth industry, as rated by Standard & Poor’s when reporting on the condition of the industry as of December 2007. With an increase in expected population growth, the expected marketplace will increase 30% over the next three (3) years in the state of Washington. By gaining a foothold in the next six (6) months with the Company’s new customer base, the Company will be firmly situated to take advantage of increases in the marketplace. The experience and past success of the main participates in the Company will enhance the success potential of Perk Me Up Coffee Shop. Legal Form of Ownership Perk Me Up Coffee Shop is a corporation form in the state of Washington in September 2007. All corporate documentation is available for inspection upon request. 25
- 35. The Business Plan for Your Coffee Shop Step Five Products and Services Description The Products and Services Description section of your business plan will describe in detail the products and services you will provide in the course of your operating your coffee shop. We have provided an illustrative Products and Services Description to help give you an idea of the way the information can be formatted. See the Products and Services Description on page 29. How to Describe In Depth Your Products and Services Here, you will describe in depth your menu products and store services. Here is a general list of potential products and services, but you will need to elaborate and breakdown the pricing for each products and services. Coffee Club Blends Special Blend Full Service Menu Buffet Specials Grab and Go Menu Café Rental Delivery Service Banquet Facilities Smoking Facilities Business Meetings Souvenirs Other Retail Sales Bakery Products Cold and Hot Beverages (Other) Competitive Advantages or Disadvantages You will need to list what factors will give you competitive advantages or disadvantages. For example, the level of quality or unique or proprietary features you will offer in your coffee shop. Pricing Structures You will need to list what the pricing structures are for the menu products and store services. If you have any drawings, photos, sales brochures, etc, these can be shown in your first Appendix. We have provided an example Appendix One on page 30. 26
- 36. The Business Plan for Your Coffee Shop Tip Important Tip Appendixes The Appendixes will be at the back of your business plan, so keep this in mind when saving your files. Products and Services Description: Business Plan Basics The products and services section is one of the most important parts of your business plan. It's your chance to clearly explain your menu products and store services, identify their features and benefits, and discuss what needs or problems they address in the market. Product Overview In explaining each of the products you will offer, your reader will want to know what it is, what it does, and its features and benefits. Consider including pictures if they would help your reader get a better understanding of your product. Service Overview In explaining each of the services you will offer, your reader will want to know what it is, what it does, and its features and benefits. Consider including pictures if they would help your reader get a better understanding of your service. Write this section with enough information to satisfy an outsider's need to understand your service without boring them with trivial details. Products and Services Description: Mistakes to Avoid The following are the some of the most common mistakes we find in the products and services description section: • Failing to identify the benefits of the menu products and store services (focusing instead on the features) • Describing the products and services in language that is too technical, with too many industry specific words or phrases • Omitting the specific problem the products and services addresses and how that problem is solved • Assuming an improved products and services will "sell itself" • Describing the products and services in terms that are too broad • Failing to include a third-party evaluation or analysis of your menu products and store services • Underestimating the importance of legally protecting your products and services 27
- 37. The Business Plan for Your Coffee Shop Complete the Products and Services Description Section To complete the Products and Services Description in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 5 – Prod and Servs. Fill in the information and save your work. To complete the Products and Services Description in Word®, go to the Word® options file and complete the information. Tip Important Tip Appendixes If you use Appendixes, be sure to number them in the actual order that you use them. When You Have Completed the Products and Services Description Section Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Six, Start Up Costs and Capitalization on page 31. 28
- 38. The Business Plan for Your Coffee Shop The Business Plan For Perk Me Up Coffee Shop Products and Services Description (As described in the instructions, you will need to elaborate on your products and services. You can start with this list.) Coffee Club Blends Special Blend Full Service Menu Buffet Specials Grab and Go Menu Café Rental Delivery Service Banquet Facilities Smoking Facilities Business Meetings Souvenirs Other Retail Sales Bakery Products Cold and Hot Beverages (Other) 29
- 39. The Business Plan for Your Coffee Shop Appendix One Products and Services Attachments 30
- 40. The Business Plan for Your Coffee Shop Step Six Start-Up Costs and Capitalization You will have many expenses before you even begin operating your coffee shop. It is important to estimate these expenses accurately and then plan where you will get sufficient capital. This is a research project. The more thorough your research, the less chance you will leave out important expenses or underestimate them. Qualified and Non-Qualified Start-Up Costs Qualified Start-Up Costs Start-up costs include costs for the following: Surveys of potential markets. Analyses of available facilities, labor, supplies, etc. Advertisements for the opening. Salaries and wages for employees who are being trained, and their instructors. Travel and other necessary costs for securing prospective distributors, suppliers, or customers. Salaries and fees for executives and consultants, or for similar professional services. Non-Qualified Start-Up Costs Start-up costs do not include the following. Deductible interest. Taxes. Research and experimental costs. Budget Allowances Even with the best of research, however, opening a coffee shop has a way of costing more than you anticipate. There are two ways to make allowances for surprise expenses. The first is to add a little “padding” to each item in the budget. The problem with that approach, however, is that it destroys the accuracy of your carefully thought out plan. The second approach is to add a separate line item, which we call contingencies, to account for the unforeseeable. This is the approach we recommend, and you will see a “Contingencies” line in our spreadsheet. 31
- 41. The Business Plan for Your Coffee Shop Tip Important Tip Contingencies You should talk to other individuals who have started similar coffee shops to get a good idea of how much to allow for contingencies. If you cannot get good information, we recommend a rule of thumb that contingencies should equal at least 20% of the total of all other startup expenses. Evaluating Start-Up Costs When starting a new coffee shop, moving to a new location, opening a new branch or expanding your shop, there will be start-up or one-time expenses. Know what these expenses will be by filling in the amounts of dollars required for each of the items listed below. Item Dollar Cost Real Estate, furniture, fixtures, machinery, equipment: a) Purchase price - if paid in $ full with cash ______________ b) Cash down payment - if $ purchased on contract ______________ c) Transportation &$ installation costs ______________ $ Starting Inventory ______________ Decorating, refurbishment, &$ remodeling costs ______________ Deposits Required: $ a) Utilities ______________ $ b) Rent ______________ c) Other (identify) $ ______________ Fees Required: $ a) Legal, accounting, others ______________ b) Licenses, permits, etc. $ ______________ $ c) Other (identify) ______________ 32
- 42. The Business Plan for Your Coffee Shop Initial Advertising & Marketing Costs $ (i.e., flyers, sales letters and calls, ______________ signs, brochures, etc.) Accounts Receivable (_____ days of $ sales) ______________ Salaries and owners draw until $ business enterprise opens or until ______________ cash flow is positive Other miscellaneous expenses: Merchant Association fees, $ equipment rental, office ______________ supplies, cleaning service, other supplies, signs, etc. $ Payments on other fixed obligations ______________ Total Start-Up Costs $ ______________ Start-Up To Do List _____ 1. Know what type of business you would like to start and learn al you can about it. _____ 2. Appraise your business strengths and weaknesses. Be strict and objective. _____ 3. Conduct thorough research of potential customers, your industry, your competition, your licensing and tax requirements, location, and name. _____ 4. Determine type of business organization (i.e. Proprietorship, Partnership, or Corporation) _____ 5. Evaluate possible shop locations. Check physical condition suitability, traffic flow, parking, utility requirements, and cost. _____ 6. Prepare a comprehensive business plan – include your action timetable. _____ 7. Decide on your business hours. _____ 8. Secure necessary capital. (Bank loan, budget to save, borrow on insurance, etc.) _____ 9. Obtain needed facilities, equipment, furnishings, signage, supplies, stock. _____ 10. Recruit personnel. Establish job descriptions and a training program. 33
- 43. The Business Plan for Your Coffee Shop _____ 11. Print business cards, stationery, invoice or statement forms. _____ 12. Register name of business (your assumed name) and/or file articles of incorporation with the Secretary of State. Publish notice in newspaper. _____ 13. Secure any necessary permits, licenses, or zoning variations. Check with both local and state licensing agencies. _____ 14. Register your business with the state and obtain a Sales & Use Tax Permit (if applicable). _____ 15. Register for Federal tax number (Form SS-4) and obtain employee tax and withholding information from the IRS. _____ 16. Establish bank account (separate from personal account). Shop for the bank and services that best suit your needs. _____ 17. If you intend to hire employees in your business, phone your Department of Economic Security or Workforce Commission. _____ 18. Phone the IRS for a free "Small Business Tax Kit" at 1-800-829-3676. For information about free Tax Education Workshops, call 1-800-829-1040 or check out the IRS website (http://www.irs.gov/) for this information. _____ 19. Issue news releases. Publicize your new coffee shop. Start-Up Narrative We have provided a sample Start-Up Narrative to help give you an idea of the way the information can be formatted. See the sample Start-Up Narrative on page 37. To complete the Start-Up Narrative in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 6 - Startup Costs Narrative. Fill in the information and save your work. To complete the Start-Up Narrative in Word®, go to the Word® options file and complete the information. Explain your research and how you arrived at your forecasts of expenses. Give sources, amounts, and terms of proposed loans. Also explain in detail how much will be contributed by each investor and what percent ownership each will have. 34
- 44. The Business Plan for Your Coffee Shop Instructions on How to Complete this Section in the Excel® Spreadsheet In the Excel® spreadsheet, you will either enter the dollar amount that you know will reflect the projected cost of the item to the left or use the best estimate approach we told you about earlier. In Column C, these dollar amounts will reflect the actual start up costs while the dollar amounts in Column G will reflect a gross amount spent over a 3 month period. This is considered your Start-Up Period. Start-Up Costs (to be completed in Excel®) C G Start-up Operating Costs Costs (Pre-Revenue (3-Months Cash assuming no Requirements) revenue) Audit / Accounting Fees $0 $0 Bus Dev. - Travel $0 $0 Bus. Dev. - Entertainment $0 $0 Bus. Dev. - Meals $0 $0 Capital Acquisitions $0 $0 Charitable Contributions $0 $0 Commissions $0 $0 Conferences & Seminars $0 $0 Consulting Fees $0 $0 Contingencies $0 $0 Employee Benefits $0 $0 Entertainment $0 $0 Equipment Lease $0 $0 Facilities - Insurance $0 $0 Facilities - Phone $0 $0 Facilities - Property Taxes $0 $0 Facilities - Rent $0 $0 Facilities - Security $0 $0 Facilities - Utilities $0 $0 Facility - Other $0 $0 Financial Charges $0 $0 Furniture $0 $0 Insurance $0 $0 Inventory Purchases $0 $0 IT Consulting $0 $0 Legal Fees $0 $0 35
- 45. The Business Plan for Your Coffee Shop Loan Interest $0 $0 Loan Capital $0 $0 Miscellaneous $0 $0 Office Supplies $0 $0 Payroll - Administrative Staff $0 $0 Payroll - Sales / Marketing $0 $0 Payroll - Owner / Directors $0 $0 Payroll Taxes $0 $0 Postal / Shipping $0 $0 PR / Advertising $0 $0 Repairs & Maintenance $0 $0 Research and Development $0 $0 Storage $0 $0 Subscriptions & Dues $0 $0 Taxes & Licenses $0 $0 Telecommunications $0 $0 Vehicle Expenses $0 $0 Total Start-Up Costs $0 $0 The total amount in Column G represents the total Start-Up Cost for start-up period. Complete the Start-Up Costs Section in the Excel® Spreadsheet Go to the Excel® Spreadsheet to the tab labeled Step 6 – Start Up Costs. Fill in the information and save your work. When You Have Completed the Start-Up Costs and Capitalization Section Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Seven, The Marketing Plan on page 41. 36
- 46. The Business Plan for Your Coffee Shop The Business Plan For Perk Me Up Coffee Shop An Explanation of the Facts, Assumptions, and Information Pertaining to the Start-Up Costs Section The Company estimates that the total Monthly Start-Up Costs to be $192,960. Therefore, the total Start-Up Costs for the Start-Up Period will be $578,880. The Company will use Larry Belcher, CPA for all accounting needs and functions. The anticipated Audit/Accounting Fees for the Start-Up Period will be $1,000. The Company estimates the Business Development expenses to be $2,000. Of this amount, $1,500 is for Travel, $400 for Entertainment and $100 for Meals. The Company does not anticipate any Capital Acquisitions during the Start-Up Period. The Company will not make any Charitable Contributions during the Start-Up Period, but will consider such expenses based on profitability. The Company estimates that Commissions will be $3,000 per month and will be funded directly from revenue. The Company plans to attend one Conferences or Seminars. The cost has already been included in the Business Development section. The Company estimates that Consulting Fees will be paid in the amount of $1,000 for training related to safety issues and food delivery/handling techniques. The Company estimates Contingencies to be $32,160 which is 20% of the total Start-Up Costs estimates. 37
- 47. The Business Plan for Your Coffee Shop The Company plans to offer Employee Benefits after the first year of operation, so no allocations have been made for employee benefits for the Start-Up Period. The Company plans to lease certain office equipment and may lease coffee shop equipment and fixtures. The Company estimates that the Equipment Lease amount will be $2,000. The Company estimates Facility expenses for the shop as follows: Facilities – Insurance, $1,000 Facilities – Phone, $500 Facilities - Property Taxes, $1,500 Facilities – Rent, $1,300 Facilities – Security, $75 Facilities – Utilities, $300 Facility – Other, $200 The Company estimates Financial Charges will be $200 and will result from credit card finance charges. The Company estimates Furniture expense to be $2,000, which will be primarily office furniture purchases. The Company estimates Insurance expenses will be $700. This insurance will be a policy purchased to cover general liability, employee dishonesty, dining area furniture, fixtures, kitchen appliances and equipment, and premise from damage. The Company estimates Inventory Purchases will total $130,000. The inventory will consist of food items, dining room furniture, initial kitchen appliances and equipment, and other related products and support items. The Company estimates that there will be IT Consulting expenses in the amount of $1,000. The Company plans to explore the use of staffing resources for kitchen help, wait staff, and building maintenance. The Company also plans to study, design, development, implement, support or manage computer-based information systems, particularly software applications and computer hardware by using computers and computer software to convert, store, protect, process, transmit, and securely retrieve information. 38
- 48. The Business Plan for Your Coffee Shop The Company estimates that Legal Fees will be incurred in the amount of $2,000. These costs represent incorporation and filing fees. The Company has not included Loan Interest which might result from the Investment Needed Proposal. The Company will revise the Start- Up Costs for the loan interest costs when the negotiated investment proposal is completed. The Company estimates Miscellaneous and unforeseen costs might be $1,000. The Company estimates Office Supplies to be $200. The Company estimates Payroll expenses to be: Payroll - Administrative Staff, $2,000 Payroll - Sales / Marketing, $3,000 Payroll - Owner / Directors, $500 Payroll Taxes, $1,500 The Company estimates Postal / Shipping costs to be $200. These costs will result from a Direct Mail program. The Company estimates PR / Advertising to be $1,000. These costs will result from print and media advertising. The Company estimates Repairs & Maintenance budget to be $500. The Company estimates Research and Development to be $1,000. This cost can result due to menu product research, Consumer Report comparisons of cold storage equipment, and traffic studies. The Company estimates Storage costs to be $100. This cost will result from storing excess inventory, extra dining room furniture, spare equipment and parts. The Company estimates Subscriptions & Dues costs to be $25. This cost will be for subscriptions. The Company estimates Taxes & Licenses costs to be $300. This cost will result from municipal business license, occupancy license, and police, building and sellers permits. Also for regulations that might include health regulations and requirements, fire safety standards or regulations, retail sales tax, and/or zoning by-laws. 39
- 49. The Business Plan for Your Coffee Shop The Company estimates Telecommunications expenses will be $300. These costs include land lines and mobile (wireless) expenses. The Company estimates Vehicle Expenses to be $400. This cost includes insurance and possible lease fees. 40
- 50. The Business Plan for Your Coffee Shop Step Seven The Marketing Plan Marketing & Sales: Business Plan Basics Every good marketing plan should include two major parts - a definition of your target market and a specific outline to market, promote and sell your menu products and store services. Target Market It's critical to clearly define your target market in your business plan - investors expect it. Tell your business plan reader about your customers and describe their defining characteristics in detail. Include information such as age, gender, geographic location, income bracket, buying similarities, and more. The goal of this section is to build a demographic profile of your typical coffee shop customer. The more clearly you pinpoint the defining traits of your customer, the easier it is to construct a marketing program to reach them effectively. The information and research included in your target market section should originate from primary and secondary sources. Primary sources includes information that you discover or conclude from personal observation and research, such as personal studies, results of questionnaires, site visits, and conversations with experts in your coffee industry. Secondary sources include such sources as journals, books, published reports, government statistics, or internet findings. Marketing Program After you define your target market, you need to determine specifically how you will reach them. Outline the details and steps necessary to reach potential customers and convert them from prospects to paying customers. Tip Important Tip Market Avenues and Procedures It is important to demonstrate to investors that you have identified specific marketing avenues and procedures to effectively sell your products and services. Answer questions such as the following in your marketing program section: • What specific marketing mediums will you use to reach your customer? 41
- 51. The Business Plan for Your Coffee Shop • How often will each be used? What will they cost? Why did you choose these marketing avenues over others? • What marketing materials will you need? (brochures, website, etc) • Who will design your marketing materials? What will they cost? • What is the cost of marketing materials per customer? (You may choose to include marketing pieces in the appendix of your business plan) • Will your shop be able to attract PR? Why will they run your story? What's the "angle"? Which publications and mediums will you target? Marketing & Sales: Mistakes to Avoid Here are some of the most common mistakes found in the marketing and sales section: • Defining your target market too widely and assuming success will result from simply capturing a "small portion" of this enormous market. • Unclear definition of your target market. • Attempting to attack an entire market instead of a narrow niche. • Making assumptions about your target market without research or concrete support. • Not specifically identifying the mediums you will use to advertise and promote your products and services. • Omitting details such as when, where, why and how you will reach your target customer - along with costs. • Making the assumption that offering a lower price will lead to increased sales. • Underestimating the importance of packaging, brand name, and reputation. • Attempting to immediately fill several lucrative but unrelated markets. • Lacking clarity about how future changes might affect your market. We have provided an illustrative Marketing Plan to help give you an idea of the way the information can be formatted. See the Marketing Plan on page 51. The Marketing Plan consists of six (6) primary sections and five (5) sub- sections under Marketing Strategy. Those sections are: Economics on page 45 Product on page 46 Customers on page Competition on page 47 Niche on page 48 Marketing Strategy on page 48 Promotion on page 48 Promotional Budget on page 48 Pricing on page 49 42
- 52. The Business Plan for Your Coffee Shop Proposed Location on page 49 You will gather the information necessary for these sections to fit your exact demographical area. This is not something that can be a “One Size Fits All” scheme. Someone starting a coffee shop in Chicago, IL will have different statistics than someone starting a coffee shop in Charlotte, NC. The only way to gather this information is by conducting market research for your specific demographical area. Target Market: Business Plan Basics The target market section of your business plan must clearly identify the current and prospective buyers of your menu products and store services. Your goal in preparing the target market section is to demonstrate to readers that you clearly understand who your customers are and how your products and services directly meet the needs of the marketplace. Properly identifying your potential customer base also helps to drive overall marketing and sales strategies that you will include within other sections of your business plan. Although your product or service may meet the needs of a large constituency of potential customers, the goal is to define your customer base as specifically as possible, both quantitatively and qualitatively. Consider the follow types of characteristics for inclusion in the target market section of your business plan: Size How large is your target market? Are there 1,000 business customers? 10 million potential customers ready to purchase your product or service? Or a small handful of very large target customers? Demographics The demographic traits of your customers often vary based on whether you are focused on serving the consumer or business markets: • Consumer - Income, Occupation, Gender, Single/Married, Ethnic Group, Education • Business - Industry, Product/Service, Years in Business, Revenue, Employee Size, Private/Public Geographic Where are your customers located? While technology has made location less of an issue for many companies, it doesn’t mean you should overlook the importance of defining the geographic location of your coffee shop customers. Clarifying these issues also helps to ensure that your marketing and sales strategies/budgets properly match your goals to capture market share. 43
- 53. The Business Plan for Your Coffee Shop Other Characteristics What are some of the more subjective traits that define your customers? This might include things such as current buying motivations, perceived shortcomings of other solutions in the market, and trends/purchasing shifts likely to occur within your target market. Naturally, the more you understand your customers, the better your chances of success. Many times the best approach to answer the target market question: Who is our customer? Invest time and resources in primary market research. Conduct simple surveys or focus groups. If feasible, work with a reputable market research firm to guide you through the process. At the very least, use the Internet and industry groups to locate market research studies and statistics for your business plan. These resources can range from free information available on websites to expensive professional market research studies prepared by experts in the field. Performing primary research enables you to gather and document the quantitative and qualitative information needed to prepare a solid target market section for your business plan. Target Market: Mistakes to Avoid Here are some of the "don'ts" to avoid when writing the Target Market section of your business plan: • Don't assume that everyone is a buyer of your products and services. • Don't be unclear about the characteristics that define who your target customers are. • Don't assume you must have a "huge" target market - a well-defined target market that your coffee shop can serve is far better. • Don't jump to conclusions about why your target market needs you - instead explain how you meet their needs. • Don't underestimate the value of focus - sell a specific product or service to a specific group. • Don't try to attack too many markets at once - particularly if you are a startup or early-stage coffee shop. Market Research Basics Market Research - Why? No matter how good your product or service, your coffee shop cannot succeed without effective marketing. This begins with careful and systematic research. It is very dangerous to simply assume that you already know about your intended market. You need to do market research to make sure that you are on correct track. Use the business planning process as your opportunity to uncover data and question your marketing efforts. Your time will be well spent. 44
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Coffee Shop Business Plan
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Coffee Shop Marketing Plan
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Selvin Dubon Selvin Dubon Strategic plan for the management of the café, bakery and chocolates neighborhood and internet business Strategic plan for the management of the café, bakery and chocolates neighborhood and internet business Buday’s Sweet Temptations Cafe Strategic Plan Buday’s Sweet Temptations Cafe Strategic Plan Contents Strategic Plan Part 1: Business Concept 2 Buday’s Sweet Temptations Cafe 2 Mission 2 Vision 2 Guiding Principles and Values 2 Strategic Direction 3 Competitive Advantage 4 Strategic Plan, Part II: SWOTT Analysis 6 Introduction 6 SWOTT 6 Buday’s Sweet Temptations Café SWOTT Table 7 External Forces 8 Internal Forces 10 Economic and Legal/Regulatory Trends 11 Adapting to Change 11 Supply Chain Operation 12 Issues and/or Opportunities 12 Conclusion 12 Balanced Scorecard 14 Financial 16 Internal Business Process 16 Customer 17 Learning and Growth (Employees) 17 Communication Plan 18 Communication Plan Table 19 Conclusion 21 References 22 Strategic Plan Part 1: Business Concept Buday’s Sweet Temptations Cafe Buday’s Sweet Temptations Café will be a neighborhood café and catering business offering specialty chocolates, baked goods, sandwiches, and gourmet coffee and other assorted drinks; and it will be an online virtual café that offers products for sale through a sophisticated website. The business will be designed to be a meeting place and a focal point for the community in person and online; as well as a resource for organizing and creating special events in and around the city of Long Beach, California. Mission The mission of Buday’s Sweet Temptations Café is to provide a happy, comfortable little corner of contentment in our cozy café, and online in our friendly little website. Buday’s will accomplish this with integrity, quality and sustainability at every step,...
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...This business plan is intended to serve as a starting point for a potential coffee shop at Kelana Jaya, Petaling Jaya. While the plan provides an extensive look into the feasibility studies of such an endeavour, we recognize that further research may be required before undertaking this business. We have provided all the financials including the balance sheet, income statement and cash flow statements. However, our research shows that the starting and sustaining of a coffee shop in the KJ area is viable, given the incredible demand for a community-oriented coffee destination. Asbek Coffee House is committed to providing quality coffee and related products in a relaxing community-based atmosphere. The shop will serve assorted drinks and baked goods in an environment conducive to business meetings and casual rendezvous alike. By serving a narrow product line, Asbek Coffee House will minimize the start-up and operating costs required and increase the likelihood of survival and sustainability. With a community focus, Asbek Coffee House will attract and retain consumers from the KJ who seek a gathering place in addition to quality coffee. 1.2 COMPANY SUMMARY Asbek Coffee House is a coffee shop that provides the KJ area coffee and food, a tranquil environment, and a step toward new development in the community. With the area in desperate need of new development, Asbek Coffee House was created with the intent to create a place for the KJ community to gather and enjoy coffee. In......
Words: 3327 - Pages: 14
...When it comes to starting a business it is important to have Business Plan. The value of a business plan is important in the startup of an organization. The value of proper business plan in an organization can determine if the organization will withstand over of time or for years to come for that matter. In implementing a proper business plan, proper planning in it self is important and valuable to the process. Planning helps in ensuring that the organization can withstand and remain as an essential asset to the needs of the community and helps in providing an impact on the city tax base. A valuable business plan can also allow the company to look at ahead at its projected profits and loss to be able to give their shareholders the return on their investment. The business plan can be the measuring rod to how the company will perform from the inside and out. The plan will show the roles of all their employees and what will be required and expected of them and what they can expect in return from there employer. Most people are wondering if they should open their own company or business. Personally I would open my own business. I know a few people that have tried to open their own business and it didn't work. I think that their problems were that they were not organized enough and didn't have their priorities straight so their business fell through. It is very important that your business relates to your surroundings in the community. For example it would be pointless to......
Words: 1648 - Pages: 7
Trung Nguyen Coffee
...Business - University of Economics ho chi minh city | TRUNG NGUYEN 2014 ANNUAL MARKETING PLAN | GROUP 2 | 12/18/2013 | | | Group 2: Le Hoai Tram – Pham Thanh Tu – Tran Thi Hong Van | Table of Contents Executive Summary 3 I. Introduction 4 II. Situational analysis 4 1. PEST 4 2. Company analysis 6 3. Market Potential and Sales Forecast 8 4. Customer analysis 9 5. Competitor analysis 12 III. Marketing objectives 16 IV. Marketing strategy 16 1. Product: Coffee G7 16 2. Service: Trung Nguyen Coffee Chain 18 V. Supporting Marketing Programs 19 VI. Financial Projection 20 VII. Monitors and Controls 21 1. Sales force efficiency 21 2. Advertising efficiency 21 3. Sales promotion efficiency 21 4. Distribution efficiency 21 VIII. Contingency Plan 21 IX. Marketing Plan Timeline 22 Appendices 23 Reference 33 Executive Summary This report aims to propose marketing activities for Trung Nguyen Coffee in the year of 2014. The marketing plan includes (1) situational analysis, (2) marketing objectives, and (3) marketing strategies. First, situational analysis reveals that Trung Nguyen coffee is in the top 3 leaders in the industry with a market share of 38%, chasing after are Nescafe and Vinacafe with 27% and 31% respectively. It also shows that although the government has supported the development of coffee industry, some market volatility has had negative effects on Trung Nguyen’s......
Words: 6540 - Pages: 27
Marketing Outline
...Biggby Coffee Marketing Plan Proposed by: Olivia Daley Submitted to: Devry University Date: 1/22/2014 Five Year Marketing Plan Table of Contents 1. Executive Summary 2. Company Description 3. Strategic Focus & Plan 4. Situation Analysis 5. Market-Product Focus 6. Marketing Program 7. Financial Data & Projections 8. Organizational Structure 9. Implementation 10. Evaluation & Control 11. Bibliography Biggby Coffee 1. Executive Summary Biggby Coffee Shop is a unique middle of the road coffee shop that provides made to order coffee drinks for the casual coffee drinker to the serious coffee connoisseur. Its headquarters are based out of Lansing, Michigan and the company has been in business for over 15 years. They franchise their coffee shops to Sole Proprietorships’ and or L.L.C’s. Biggby Coffee offers a middle of the road price point for coffee consumers in that it is more expensive than McDonald’s , but less than Starbucks. My Biggby Shop will be formed under an L.L.C. and will be based in Columbus, Oh. Columbus currently has either lower end chain coffee shops or higher end chain coffee shops. It will be located in an area of town that currently has no coffee shop presence which is the northeast side. It has an untapped market of early adopters, college age and business people. The average salary range for this area is $40,000 per year,......
Words: 5452 - Pages: 22
Pdf, Docx, Doc, Wps
...simple email marketing. Get started today with Campaign Monitor for FREE! Yes please! <iframe src="//www.googletagmanager.com/ns.html?id=GTM-BLDN" height="0" width="0" style="display:none;visibility:hidden"></iframe> * * LivePlan * MPlans * BPlans * Palo Alto Software Home ------------------------------------------------- Top of Form Search Bottom of Form * Sample Marketing Plans * Marketing Software * Marketing Articles * Marketing Resources * Calculators * Marketing Plan Outline * Restaurant, Cafe and Bakery * Hospitality & Events * Retail & Online Stores * Additional Categories * Sales & Marketing Pro * Business Plan Software * How To Write A Marketing Plan * Product Marketing * Branding * Market Research * Public Relations * Lead Generation * Email Marketing * Marketing Strategy * Marketing eBooks * Marketing Blogs * Break Even Calculator * Cash Flow Calculator * Pay-Per-Click ROI Calculator * Starting Costs Calculator * Email ROI Calculator * Conversion Rate Calculator * Investment Offering Calculator * Discounted Cash Flow Getting ready to create a marketing plan? Start your marketing plan Related Marketing Plans * Organic Bakery Marketing Plan * Restaurant Marketing Plan * Catering Marketing Plan * Food Services Marketing Plan * Internet Coffee Shop Marketing Plan ......
Words: 1536 - Pages: 7
Cafe Business Plan
...www.FASTBusinessPlans.com BUSINESS PLAN (CAFÉ BUSINESS PLAN) THE RUSSET CUP 13351 MISSION STREET (OVERLAND PARK, KS) (DATE) Use and Reprint Rights for Your FAST Business Plan Template This template has been written to include instructions for creating your final business plan. You are free to edit and use the material within your organization. However, please do not distribute this template online or elsewhere publically without explicit permission from us. www.FASTBusinessPlans.com Café Business Plan Template TABLE OF CONTENTS 1.0 Executive Summary ................................................................................................................ 4 1.1 1.2 1.3 1.4 Business Objectives .....................................................................................................................................4 Mission Statement ........................................................................................................................................4 Guiding Principles ........................................................................................................................................4 Keys to Success ............................................................................................................................................5 2.0 2.1 2.2 2.3 2.4 Company Description ........................................................................................................ 5 Ownership ...
Words: 6723 - Pages: 27
...New Wave Coffee Company 3-Year Marketing Plan Assessment Code: 318.1.5-06-15 Student Name: Daniel Coffey Student ID: 000374326 Date: 11/15/2014 Mentor Name: Tashia Bryce Table of Contents Introduction 3 Mission Statement 3 The Product 3 Consumer Product Classification 3 Target Market 3 Competitive Situation Analysis 4 Analysis of Competition using Porter’s 5 Forces Model 4 SWOT Analysis 4 Strengths 5 Weaknesses 5 Opportunities 5 Threats 6 Market Objectives 6 Product Objective 6 Price Objective 6 Place Objective 6 Promotion Objective 7 Marketing Strategies 7 Product Strategies 7 Price Strategies 7 Place Strategies 7 Promotion Strategies 7 Tactics and Action Plan 8 Product Action Plan 8 Price Action Plan 8 Place Action Plan 8 Promotion Action Plan 8 Monitoring Procedures 9 Introduction Throughout most of the 90s and early 2000s, Starbucks has expanded its vast empire and tightened its stranglehold on the brewed coffee and coffee drink marketplace. New Wave Coffee Company looks to make a name for itself with lower prices, quality over quantity, and by setting itself apart by become the premier destination for coffee. Mission Statement “World class customer service and world class products at a world class price while constantly serving the community.” The Product Through the Local Brew Initiative, New Wave Coffee Company purchases and distributes locally grown coffee beans and brews with a proceed going......
Words: 2009 - Pages: 9
Business Plan
...Crossroads Business plan Project realized by: Sandu Elena Amalia Faculty:FABIZ Series:B Group:116 Table of Contents 1.0.Executive Summary 3 1.1. Objectives 3 1.2. Keys to success 4 1.3. Mission 4 2.0. Company Summary 4 2.1. Business location 4 2.2. Company Ownership and Management 4 2.3. Development Stage 4 2.4. Financial Status 5 Table: Start-up 5 2.5. Products and services 6 3.0. Industry analysis and trends 6 4.0.Target market 8 4.1. Geographic segmentation 8 4.2. Demographic segmentation 8 4.3. Psycographic segmentation 8 5.0. The Competition 9 6.0. Company structure, Intellectual property and Ownership 10 7.0. The Marketing Plan and Sales Strategy 11 7.1. Product strategy 11 7.2. Pricing strategy 12 7.3. Channels of distribution 12 7.4. Promotion and Advertising 12 7.5. Sales strategy 13 8.0. The Financial Plan 14 Appendix 17 Actually,this seems to be the basic need of the human heart in nearly every great crisis-a good hot cup of coffee. 1.0.Executive Summary Crossroads is going to be a coffee shop which not only does it satisfy the coffee lovers but it also provides a nice environment for those who want to enjoy a good book or want a nice, quiet place in which they can work. I have decided to start-up this business because of my love for both coffee and reading. I love the way a book shop is and I thought that it could be great to have a place in which we could enjoy a delicious cup of coffee and......
Words: 4319 - Pages: 18
...WEAKNESSES………………………………………………………………………6 OPPORTUNITIES…………………………………………………………………....6 TREATS………………………………………………………………………………7 MARKETING STRATEGIES SUMMARY………………………………...8 PRODUCTS AND SERVICES……………………………………………………....8 PRICING STRATEGIES…………………………………………………………….8 PLACING………………………………………………………………………….....9 PROMOTION STRATEGIES……………………………………………………….9 COMPANY SUMMARY……………………………………………………10 OWNERSHIP……………………………………………………………………….10 LOCATION AND FACILITIES……………………………………………………10 START-UP COST…………………………………………………………………...11 MARKETING ANALYSIS SUMMARY…………………………………...12 MARKETING SEGMENTATION………………………………………………….12 TARGET MARKET…………………………………………………………………13 MANAGEMENT SUMMARY………………………………………………14 MANAGEMENT TEAM…………………………………………………………….14 PERSONNEL PLAN………………………………………………………………...16 IMPORTANT ASSUMPTION………………………………………………………16 1. Executive Summary When the economy is growing fast, the majority of Ho Chi Minh City residents become richer. Their standard of living is higher as a result. People expect higher quality in the products and the services they get. Nowadays, customers do not say “drink a cup of coffee” anymore; instead, they use “enjoy a cup of coffee”. They expect not only high quality coffee, but more than that they expect to have a relaxed, joyful time when they come to a coffee shop. Love café is opened to satisfy that demand. Main products Love Café offers are coffee, soda, smoothes and some other drinks. Love café also sells fast food for...
Words: 2533 - Pages: 11
Nespresso Coffee Shop
...Nespresso coffee shop Salalah Name: __________________________ ID: ______________________________ Table of Contents Executive summary 2 Company Summary 3 Product/ Services Summary 5 Strategies – Marketing & Sales 7 Management Summary 8 Organizational Chart 9 Financial Statements 10 Balance sheet 12 Feasibility Business Idea and its suitability to Oman 12 Conclusion 13 Executive summary Nespresso coffee shop is a coffee shop that is located in Salalah exactly in the Alsaada north . That is a complete list of moderately priced "comfort" food influenced by Arab cooking traditions but on the basis of time-honored recipes from around the world. Section of the cafe and Nespresso coffee shop features a cafe with candy bar, and magazines, and space for live performers. This shop is basically the franchise that was introduced by the Nespresso the international brand of Coffee. This Coffee shop was not till now available in Salalah Oman. So, the opening of Salalah branch will provide a unique taste of coffee of an international brand. This business plan offers financial institutions an opportunity to review our vision and strategic focus. It also provides a step-by-step plan for the business start-up, establishing favorable sales numbers, gross margin, and profitability. This plan includes chapters on the company, products and services, market focus, action plans and forecasts, management team, and financial plan. Company Summary The......
Words: 2190 - Pages: 9
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