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Coffee Shop Business Plan

3 March 2023 Businnes Plan


Coffee Shop Business Plan


Opportunity

Problem

Not only do people living near the University of Oregon want coffee, tea, pastries or snacks, they also need a place to relax, have a group discussion or just sit and read. 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 bar is a local necessity. It’s a place you can dream about as you seek to escape daily stress and a place where you can meet friends or read a book.

Market

Java Culture will be focusing its marketing efforts to reach University students, faculty, and people who work in close proximity to the coffee bar. These are the customers most likely to purchase gourmet coffee products, according to market research. Access to the University of Oregon campus is a good way to reach the target customer group, since gourmet coffee consumption is universal across income levels.

Concurrence

Java Culture will face competition from other coffee shops located close to the University of Oregon campus. These include Starbucks, Cafe Roma, The UO Bookstore, and other Food service establishments that offer coffee.

Why Us?

Good coffee, pastries, additional tea options, very welcoming atmosphere.

Expectations

Forecast

As shown in the chart below (taken from our sales forecast), we intend to grow. 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 per Year

You will need financing

The owners will invest $140,000, and obtain a $30,000 bank loan to pay for the assets and start-up expenses.

$27,000 for start-up expenses

  • Legal expenses to obtain licenses and permits, as well as accounting services, total $1.300
  • Marketing promotion expenses to celebrate the grand opening Java Culture were $3.500. Flyer printing (2,000 copies @ $0.04 per page) was also part of the $3.580 total.
  • ABC Espresso Services received $3,000 in consultants fees for setting up the coffee bars.
  • The total premium for insurance (general liability, workers&#8217’s compensation and property accident) is $2,400
  • Pre-paid rent expenses per month for a total of $4,400 at $1.76 per sq.
  • Renovation of the premises in the amount $10,000
  • Other startup expenses include stationery ($500), phone and utility deposits ($2,500), and stationary ($500).

These expenses are expected to be incurred before launch. We therefore include them in our financial projections with negative retained earnings (negative earnings) of $27 6,680 at end of each month. That number shows up in the balance sheet.

The necessary start-up assets, which are $143,000

  • Cash in Bank in the Total Value of $67,000. This includes enough to cover owner and employee salaries of $23,900 for two months and cash reserves (approximately $14,400 per month).
  • A start-up inventory valued at $16,000 that 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
    • Supplies for offices – $287
  • Equipment for the total amount of $60,000:

    • Espresso machine – $6,000
    • Coffee maker – $900
    • Coffee grinder #8211 $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 registers and security systems, signage, ventilation, etc.) #8211; $13,750
    • Office equipment (PC, fax/printer, phone, furniture, file cabinets) – $3,600
    • Other miscellaneous expenses -#8211: $500

The company is funded by two main sources: bank loans and investments from owners. Two major owners, Arthur Garfield and James Polk, have contributed $70,000 and $30,00 respectively. The total investments now stand at $140,000. $40,000 has been contributed by all other investors. 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 via the Bank of America. The total start-up loss of the company is therefore assumed to be $27,000

The balance sheet shows these amounts for the month that preceded 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. All this is according to financial standards.

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