Coffee Shop Business Plan

04 Mar Coffee Shop Business Plan

Opportunity

Problem

The University of Oregon has many amenities that people near it need. These include coffee, tea, pastries and snacks as well as a place for them to gather comfortably, have a discussion with others, or simply sit down and work. That is available now near the University of Oregon campus, but too crowded too often, and not the right combination of factors for everybody.

Solution

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

Market

Java Culture will direct its marketing efforts towards University students and faculty. This includes people working in offices near the coffee bar, as well sophisticated teenagers. Our market research shows that these are the customer groups that are most likely to buy gourmet coffee products. Since gourmet coffee consumption is universal across different income categories and mostly depends on the level of higher education, proximity to the University of Oregon campus will provide access to the targeted customer audience.

Competition

Java Culture will face competition from other coffee shops located close to the University of Oregon campus. These include Starbucks Coffee, Cafe Roma, The UO Bookstore, as well other coffee-serving establishments.

Why Us?

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

Expectations

Forecast

As shown below, we plan to grow as derived from our sales forecast. We want to maintain a 60% industry-standard gross profit margin and allow for reasonable operating costs, and to make reasonable profits in our second and third years.

Financial Highlights by Year

Financing Required

To finance the initial expenses, assets, and deficient spending in the beginning months, the owners will put $140,000 into the business and borrow $30,000 from a bank.

The start-up expenses of $27,000 include:

• Legal costs for obtaining licenses, permits, and accounting services total $1,300
• For the grand opening of Java Culture, marketing promotion expenses were $3500. Flyer printing costs of 2,000 flyers at $0.04/copy was also covered.
• ABC Espresso Services paid $3,000 to consultants for their assistance with setting up the coffee shop.
• The total premium for insurance (general liability, workers&#8217's compensation and property accident) is $2,400
• Pre-paid rent expenses for one month at $1.76 per square feet in the total amount of $4,400.
• Remodeling of premises up to $10,000
• Other expenses include stationery (500 USD) and phone/utility deposits (2500 USD).

These expenses will be incurred before launch, so they take their place in our financial projections as negative retained earnings of $27,680 at the end of the month before we begin. It is included in the balance.

The start-up capital required for $143,000 includes:

• Cash in bank at $67,000. This includes sufficient cash to cover salaries for employees and owner of $23,900 during the first two-months and cash reserves of approximately $14,400 for the next three months.
• Start-up inventory starting at $16,000. This includes:
  • Coffee beans (12 regular brands, five decaffeinated ones) #8211 $6,000
  • Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. – $7,900
  • Retail supplies (napkins, coffee bags, cleaning, etc.) – $1,840
  • Office supplies &#8211, $287
• Equipment for the total amount of $60,000:
  • Espresso machine – $6,000
  • Coffee maker &#8211, $900
  • Coffee grinder – $200
  • Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.) – $18,000
  • Storage hardware (bins. Utensil rack, shelves. food case) #8211 $3,720
  • Counter area equipment (counter top, sink, ice machine, etc.) – $9,500
  • Serving area equipment (plates, glasses, flatware) – $3,000
  • Store equipment (cash register, security, ventilation, signage) – $13,750
  • Office equipment (PC, fax/printer, phone, furniture, file cabinets) – $3,600
  • Other miscellaneous expenses $500

Funding for the company comes from two major sources–owners' investments and bank loans. Arthur Garfield & James Polk have contributed $70,000 & $30,00, respectively. All other investors contributed $40,000 which brings the total invested to $140,000. The $30,000 remaining to cover start-up expenses, assets and costs came from two bank loans: a $10,000 one-year loan and $20,000. long-term (20 years) loans. Both loans were secured through the Bank of America. Therefore, the total start-up cost is $27,000

The amounts show up in the balance sheet in the month prior to opening. Paid in Capital appears as the $140,000 invested. Negative retained earnings is shown for the $27,000 expense. Assets and liabilities are there. Financial standards dictate that this happens.