B P (B) SKS : Usiness LAN Coffee Usiness Plan THE Coffees Takbeer Ascade Plaza Jorraypull Lahore

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BUSINESS PLAN

(COFFEE BUSINESS PLAN)

THE SKS COFFEES

(TAKBEER ASCADE PLAZA


JORRAYPULL LAHORE)

(DATE)

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TABLE OF CONTENTS

1.0 Executive Summary.................................................................................................................4


1.1 Business Objectives.......................................................................................................................................4
1.2 Mission Statement.........................................................................................................................................4
1.3 Guiding Principles.........................................................................................................................................4
1.4 Keys to Success.............................................................................................................................................5
2.0 Company Description.........................................................................................................5
2.1 Ownership.....................................................................................................................................................5
2.2 Legal Form....................................................................................................................................................5
2.3 Start-Up Summary.........................................................................................................................................5
2.4 Location and Facilities..................................................................................................................................6
3.0 Products/Services................................................................................................................7
3.1 Products/Services Descriptions.....................................................................................................................7
3.2 Competitive Comparison...............................................................................................................................7
3.3 Product/Service Sourcing..............................................................................................................................9
3.4 Future Products/Services...............................................................................................................................9
4.0 Market Analysis..................................................................................................................9
4.1 Industry Analysis.........................................................................................................................................10
4.1.1 Market Size.............................................................................................................................................11
4.1.2 Industry Participants...............................................................................................................................11
4.1.3 Main Competitors...................................................................................................................................12
4.1.4 Market Segments....................................................................................................................................14
4.2 Market Tests................................................................................................................................................15
4.3 Target Market Segment Strategy.................................................................................................................16
4.3.1 Market Needs..........................................................................................................................................16
4.3.2 Market Trends.........................................................................................................................................16
4.3.3 Market Growth........................................................................................................................................17
4.4 Positioning...................................................................................................................................................17
5.0 Marketing Strategy and Implementation.......................................................................17
5.1 SWOT Analysis...........................................................................................................................................18
5.1.1 Strengths.................................................................................................................................................18
5.1.2 Weaknesses.............................................................................................................................................18
5.1.3 Opportunities...........................................................................................................................................18
5.1.4 Threats.....................................................................................................................................................18
5.3 Unique Selling Proposition (USP)..............................................................................................................19
5.4 Competitive Edge........................................................................................................................................19
5.5 Marketing Strategy and Positioning............................................................................................................19
5.5.1 Positioning Statement.............................................................................................................................19
5.5.2 Pricing Strategy.......................................................................................................................................20
5.5.3 Promotion and Advertising Strategy.......................................................................................................20
5.5.4 Website....................................................................................................................................................20
5.5.5 Marketing Programs................................................................................................................................20
5.6 Sales Strategy..............................................................................................................................................20
5.6.1 Sales Forecast..........................................................................................................................................21
5.6.2 Sales Programs........................................................................................................................................21
5.8 Milestones...................................................................................................................................................21
5.9 Table 5.8 Milestones....................................................................................................................................22
5.10 Exit Strategy................................................................................................................................................22

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6.0 Organization and Management.......................................................................................22
6.1 Organizational Structure..............................................................................................................................22
6.2 Management Team......................................................................................................................................22
6.3 Management Team Gaps.............................................................................................................................22
6.4 Personnel Plan.............................................................................................................................................22
6.5 Board of Directors.......................................................................................................................................23
7.0 Financial Plan....................................................................................................................23
7.1 Important Assumptions...............................................................................................................................23
7.2 Start-Up Costs.............................................................................................................................................24
7.3 Source and Use of Funds.............................................................................................................................25
7.4 Break-Even Analysis...................................................................................................................................26
7.5 Projections...................................................................................................................................................26
7.5.1 Projected Profit and Loss........................................................................................................................26
7.5.2 Projected Cash Flow...............................................................................................................................28
7.5.3 Projected Balance Sheet..........................................................................................................................29
7.6 Business Ratios...........................................................................................................................................29

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1.0 Executive Summary
The SKS coffee will be a one of a kind coffee house located in takbeer arcade plaza at jorray
pull near askari 10. The 500 square foot coffee shop will be located in the newly constructed
Market takbeer arcade plaza at joraypull near askari 10. The anchor tenant, the Price Chopper
grocery store, has already taken occupancy and the excellent location brings more than 1000
shoppers weekly.

The sks coffee aptly named for the aromatic brown liquid that will fill the cup, fills the void of
original cafes in the market area, stands out from its corporate peers with their fast food concepts
and fast services. The sks coffee is the alternative to fast food/commercial/coffee shops and
offers a much calmer, civilized coffee experience. There are no televisions in the café, the
background music is subtle and work from local artists will hang on the walls.
The café is well appointed with overstuffed leather chairs and sofas in a library like setting. The
café is reminiscent of times gone by – yet is cutting edge technologically with WIFI and state of
the art machines.

The sks coffee measures its financial success in terms of increased market share and in earnings.
This is a tremendous opportunity! The keys to success will be the ability to offer quality coffees,
take advantage of its small size, and reliance on an outstanding staff. In order to achieve these
goals, the café will offer some the area’s finest beans from local distributors. Because of its
small size, the café can enjoy larger margins in the form of lower overhead. The cafe will hand
select baristas and offer salaries comparable to the chains. In turn the employes will be trained to
cross-sell, and sell the higher margin products.

1.1 Business Objectives


The primary objectives of the business plan for SKS coffee are below:
 To increase revenues 5% in Year 2 and 10% by Year 3
 Achieve a profit margin of 5.2% Year 2 and 6.90% by Year 3
 Be the Café of Choice in the Overland Park area and recipient of the Best Coffee
house Award

1.2 Mission Statement


The SKS COFFEE is committed to its products and employees which they believe is the
recipe for market success.

1.3 Guiding Principles


The sks coffee is committed to values such as excellence, passion, quality, integrity and
leadership which allow them to navigate challenges and provide for future opportunities.
These core beliefs start with their commitment to their products and their employees .
The sks coffee rewards excellence and loyalty. The café will work with its employees to
build strong businesses and a secure future.

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1.4 Keys to Success
The sks coffee stands out from the competition. Below are their Keys to Success:

 Great Products – providing exemplary products at market prices – will make


customers want to return again and again
 Hire Quality Baristas – Pay employees rates similar to the larger chains with
opportunities for long term careers and opportunities for advancement with long term
plans to open a second facility
 Convert Customers to Connoisseurs - Only 40% of the nations coffee drinkers
consume premium ground and whole bean coffee – this will aid in continued growth

2.0 Company Description


The sks coffee will be a coffee house / café located in the takbeer arcade plaza at jorraypull near
askari 10 located in the Lahore city, the cozy café will be located in the newly completed
Takbeer arcade plaza . The café will serve coffees, espresso and drip coffee, lattes, and
smoothies. The simple pastry offerings may vary with seasonality but the primary line will be
muffins, breads, cookies, scones, and rolls. All pastries will be supplied daily by a local bakery.
The café will be operated by our own. The café will be open for business Monday – Thursday 7-
10, Fridays and Saturdays 7-11 and closed Sundays.

2.1 Ownership

2.2 Legal Form


The sks coffees will be formed as an S-Corporation wholly owned by

2.3 Start-Up Summary


The sks coffees will have seating for 40 patrons.. The site consists of 500 square feet of
leased space, a coffee bar, and a storage room in back. To be used as a restaurant, this
storefront needs to be plumbed and wired appropriately. Painting, new floors, and
countertops are also needed. A custom coffee bar needs to be built. With materials bought
on sale and volunteer labor the coffeehouse equipment will consist of two commercial
espresso machines, air pots and urns, a commercial blender, commercial brewer, top
loading coffee bins, barista syrups, cold drink dispenser, frothing equipment, a commercial
refrigerator, microwave and stainless steel prep bar. The cost for the equipment is. The
furniture will consist of leather couches, and chairs (purchased at auction), coffee tables,
bookcases, and window treatment. The artwork will come from local artists and will be
sold on a consignment basis. The books were secured via donations. Total cost to furnish
is . Other startup expenses will be dishes, furniture, rent deposit, and marketing.

2.4 Location and Facilities


The new coffeehouse is located in the highly desirable new Takbeer arcade plaza, area at
jorraypull near askari 10 lahore. The property is located in an excellent location it is a
popular place near golf club .this bazaar is main bazaar where no coffee shop is available

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now a days .we will provide our customers a relaxing environment..we will also provide
them a wifi facility .we provide them an airconditioned coffee shop in a very reasonable
rate .

3.0 Products/Services

3.1 Products/Services Descriptions


The sks coffee primary offering is roasted coffees with such varieties such as mocha,
carmelicious, white mocha, candy bar latte, and brewed coffee. Complementing the coffee
will be a smoothie line including wild berry, strawberry, peach, mango and lemonade.
Rounding out the simple menu line will be pastries obtained with an outside supplier,
freshly made and delivered daily. The pastry offerings may vary with seasonality but the
primary line will muffins, breads, cookies, scones, and rolls.

3.2 Competitive Comparison


The research methodology is based on unique coffee shops/cafes in the greater metro area
and omits larger chains or franchises. The findings reveal eight unique competitors.

Buttler’s chocolate café


Gulberg lll Lahore.

Café cosa nostra


Gulberg ll Lahore

Gloria jean’s coffees


25-A mian mehmood ali kasoori rd Lahore

Masooms coffee and bake


Mm alam road Walton Lahore

3.3 Product/Service Sourcing


The SKS coffee has negotiated supplier agreements with several local food-service
wholesalers and coffee wholesalers in karachi that have a reputation for quality and
reliability:

 Dua impex international.


 Awam group of campanies

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In the event that one of the aforementioned specialty suppliers cannot meet their needs, the
following national suppliers can both provide all of the food-service products that they
require. In addition, the following wholesalers will supply the café with general restaurant
supplies:
 Ampack ltd Karachi pakistan
 Fari traders ltd Karachi pakistan

3.4 Future Products/Services


Young families which comprise the third largest market share in takbeer plaza, are often
overlooked in the coffee market. Coffee houses traditionally have not been considered
‘kid’ friendly. To overcome this hurdle, the SKS coffee has long term plans (5 years) to
open a 2nd coffee shop: A combination indoor play area / coffee bar. This concept allows
parents and caregivers an opportunity to meet and relax with other adults while the
children can enjoy the indoor playground amenities.

Additional future services will include in-store sales for home purchase as well as an
online store.

The website will have an option to purchase prepaid gift card program – Prepaid gift cards
not only provide immediate cash, but also reduce credit card transaction charges and draw
new customers to the business.

4.0 National publications and organizations recognize jorraypull for its business
environment and livability.

Drive

4.1 Industry Analysis


The coffee shop industry includes about 20,000 stores with combined annual revenue of
about $10 billion. Major cafes include Gloria jeans coffee, buttler’s coffee shop ,masooms
coffee and bake, café cosa nostra. The industry is concentrated: the top 50 companies
generate more than 70 percent of sales. Coffee shops are part of the specialty eatery
industry, which also includes retail outlets specializing in products such as donuts, frozen
yogurt, and ice cream.

Competitive Landscape
Consumer taste and personal income drive demand. The profitability of individual
companies depends on the ability to secure prime locations, drive store traffic, and deliver
high-quality products. Large companies have advantages in purchasing, finance, and
marketing. Small companies can compete effectively by offering specialized products,
serving a local market, or providing superior customer service. Specialty eateries, which
include coffee shops, are labor-intensive: average annual revenue per worker is about

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50000. Coffee shops compete with businesses such as convenience stores, gas stations,
quick service and fast food restaurants, gourmet food shops, and donut shops. (First
Research)

Products, Operations, Technology


Major products include beverages and food. Beverages include brewed coffee and tea;
espresso drinks (cappuccinos, café lattes); cold blended beverages; bottled water; soft
drinks; and juices. Food includes pastries, bakery items, desserts, sandwiches, and candy.
Many coffee shops sell whole or ground coffee beans for home consumption. Some coffee
shops sell coffee or espresso-making equipment, grinders, mugs, and other accessories.

4.1.1 Industry Participants

Within 5 miles of the subject, are 37 businesses involved in the coffee industry,
including chains, restaurants, and tea houses reporting annual revenues in excess of
$54 million. Of these 37 businesses, 20 are Starbucks coffee shops capturing $35.7
million in revenues or 66% of the market share. An additional 8 coffee houses are
franchises capturing $9.7 million represent 18% of the market share. The
comparables – those closely held coffee shops/cafes that will compete for the
subject’s business represent $8.3 million in annual revenues or 15% of the total
market.

The sks coffees is


targeting three primary groups residing in their direct marketing area. These
individuals prefer unique venues and avoid the big chains and franchises. They
prefer their local neighborhood and will support local businesses if the business
warrants.

4.1.2 Main Competitors

 Gloria jeans coffees :

This competitor Gloria Jean's Coffees is a franchised specialty coffeehouse company


that has opened more than 1,000 coffee houses across 39 markets worldwide, including
over 460 in Australia. In 2014 Gloria Jeans was purchased by the Retail Food Group for
$163.5 million.

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Gloria Jean's Coffees was founded by Gloria Jean Kvetko in 1979 in Chicago, USA.
Gloria Jean's Coffees began as a small coffee and gift shop in Chicago USA which now
has over 110 locations throughout the US.

 Masooms café and bake:


                   Masooms café and bake is a chan cafe and its branches are in lslamabad ,Rawalpindi
Lahore.

 Buttler’s  chocolate café:
Butlers Chocolates is an Irish owned manufacturer of luxury chocolate and
chocolate products. Founded by Ms. Bailey-Butler in 1932, it has been
owned by the Sorensen family since 1959. Butlers Chocolates is an Irish
chocolate producer and operates from a custom built production facility in
North Dublin and in Pakistan too. It produces a wide range of confectionery
products including chocolate assortments, truffles, fudge, toffee, chocolate
bars and seasonal novelties. The company has also created a chain of
Butlers Chocolate Cafes.

                 

4.1.3 Market Segments


The SKS coffees is targeting the three top segments of the population representing
39% of the population in sadar

 Boomburbs (29%) – Younger families with a busy, upscale lifestyle.


Median age of 34. Most households operate on two incomes; median
household income is $100,000. Product purchases reflect a suburban
lifestyle; one of the top markets for SUVs, lawn /garden purchases and
casual apparel. Technically savvy; active in golf, tennis and swimming.
 Enterprising Professionals (10%) – Young, highly educated, working
professionals. Single or recently married, median age of 32, median
household income is $65,000. Lifestyle reflects youth, mobility, and
growing consumer clout. Residents go where the jobs are located. Love to
travel and exercise; rely heavily on cell phones, PCs and the internet to
stay connected.
 Prosperous Empty Nesters (12%) – Well educated and experienced,
residents are enjoying the transition from child rearing to retirement.
Median age is 46; median household income is $64,000. This market
segment is active physically and financially. Display interest in
homes/communities.

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4.2 Market Tests
Research from Yelp, FourSquare, and GooglePlaces, indicates the Overland Park market is
in need of a new local café. The locals have been clamoring for the current private shops
to improve service and/or reduce prices to keep pace with larger chains and franchises,
thus providing a unique niche for the right entrant.

While employed by a national restaurant chain, Mr. Jones was constantly directing patrons
to offsite coffeehouses for those seeking that final dessert and cup of coffee prior to
finishing their evening. This is the reason he ultimately began seeking the location for his
coffee house.

4.3 Target Market

 Askari 10 and sadder bazaar


 Jorraypull
 Phase vi bedian road lahore

Most adult coffee drinkers said their lifelong habit began during their teenage years. In fact,
54% said they began drinking coffee between 13 and 19. Another 22% reported their coffee
cravings started between the ages of 20 and 24. This means that 76% of adult coffee
drinkers began drinking coffee by the time they were 24. So, despite the large amount of
marketing and advertising directed at the younger age groups, savvy coffee shop owners
will not forget to cater some of their offerings to the adult and senior market. (National
Coffee Drinking Study).

The SKScoffees will offer a unique experience for coffee aficionado by offering a quiet
and cozy yet sophisticated cafe and offer a sense of refinement and peace in an otherwise
hectic and fast paced world. While other coffee shops cater to convenience with drive
throughs or loud music venues late into the night, itwill stand apart from its competitors
with its quiet yet soothing ambience, capturing a truly unique (and much needed) market
niche
.

4.3.1 Market Needs


Coffee shop customers, by nature, are looking for something special — that’s why
they are willing to pay so much for a cup of coffee! Many customers of the big
national chains, while satisfied with their daily coffee would be intrigued to find a
local coffee that is different.

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4.3.2 Market Trends
 Unique products (specialized roasts, local ingredients, locally themed or
named drinks, custom drinks by the‘star’ barista, etc.)
 Games, puzzles, mind benders and other activities that encourage
customers to linger over their coffee
 Hosting or sponsoring local events (entertainment, readings, book clubs,
etc.)
 Using technology to creatively compete in marketing with the big chains
— services like FourSquare, Yelp, and Google Places can increase visibility in the
local market.
 Delivering amazing service from knowledgeable baristas — spend lots of time
training staff and utilize online services like the American Coffee & Barista School
 Selling coffee-related items (and track down any co-marketing opportunities with
a local community college or other student-related group in the area)

4.3.3 Market Growth


Despite the economic woes, 37% of total coffee consumed in the United States in
2011 was classified as “Gourmet.” According to the National Coffee Drinking Study
This suggests consumers were set on drinking good coffee and visiting their local
coffee shop even in the face of an uncertain economy.
The sales of coffee dominate sales of hot beverages, making up 70.3% of the total
hot beverage market in pakistan. Coffee consumption is expected to increase through
2015 at an average annual rate of 2.7%, while tea consumption is expected to
increase through 2015 at an average annual rate of 3.1%. Positive expectations for
continued growth in coffee sales, despite its “mature” product position in the market,
are due to the innovations in premium coffee products (pods, single-serving instants,
etc.

4.4 Positioning
The SKS will position itself as a local coffee house or a ‘suburban’ coffeehouse providing
a sanctuary for those in the ‘burbs’ without the hassle of having to drive downtown
 By charging similar prices as the large chains – the service and quality of the
product will commensurate with the price
 The SKS coffees is genuinely unique place to gather and meet friends, and enjoy
coffee
 Amenities such as free WIFI, chess games, comfy overstuffed chairs, create a
relaxing environment
 The market does not need a café offering fast food breakfasts or another after
hours bar
 The SKS coffees will position itself as the alternative to the chain/franchise/fast
food coffee house.

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5.0 Marketing Strategy and Implementation
The Russet Cup will provide a quiet and relaxing environment to enjoy gourmet roasted coffee
and smoothies and an opportunity to visit with friends, catch up on one’s email, or read a chapter
of a book. The Café will fill the great void providing originality in a sea of facsimile, corporate
coffee shops. The café’s baristas will be extremely knowledgeable and offer assistance in any
coffee purchase while simultaneously providing customers with outstanding service.

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5.1 SWOT Analysis
The SWOT analysis examines the café’s strengths and weaknesses that need to be
addressed. Further, this section examines the opportunities presented to Café as well as
potential threats.

5.1.1 Strengths
 Based on its smaller size, the fact that it is not a franchise, the SKS coffees
is a unique coffee shop concept unlike any other in the market.
 The owner has firsthand experience, in operating and starting new
restaurants,
 Handpicked baristas will bring professionalism and enthusiasm to the
shop.

5.1.2 Weaknesses
 Franchises are the easiest way and often the safest conduit to start a café; the
café will not have the backing of one of these established entities.
 The SKS coffees has a minimal budget and is competing against larger and
more established coffeehouses for market share.

Opportunities
 The jorraypull bazaar demographics support the need for a unique coffee
shop.
 Additional opportunities to target the active and recently retired target market
and 45 years+ age group.
 A small slice of a much bigger pie is the goal. Only 40 percent of the nation’s
coffee drinkers are consuming premium ground and whole bean coffee.
Encouraging coffee drinkers to become coffee connoisseurs is the key to
continued growth.

5.1.4 Threats
 The Morning Glory Coffee shop is currently for sale; should another
independent purchase this café, it could pose significant threat to market
share.

5.2 Strategy Pyramid


 In the short-term, a number of promotions and activities are planned around launch of
the business to create awareness. The coffee shop will have a contest offering 20
bottomless mugs and will publicize this promotion via radio advertising, as well as
countertop displays and posters in the shopping plaza.

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 In addition, during its first year of operations the coffee shop will pass out a limited
number of coupons for a free cup of coffee to prospective customers visiting the
shopping center.

5.3 Unique Selling Proposition (USP)


The Russet Cup truly stands out from a crowded sea of coffee chains and franchises. What
sets them apart from the competition is primarily its smaller cozier size combined with
premium coffees served by knowledgeable baristas providing so much energy and
enthusiasm for the products they sell.

5.4 Competitive Edge


The SKS coffess’s competitive edge, its size, is also its greatest attribute. Because they are
small there is no red tape, and they can easily adjust business hours to say accommodate an
afterhours book reading session whereas the corporate chains do not provide such an
accommodation. The SKS coffees will truly cater to its patrons needs.

5.5 Marketing Strategy and Positioning


The SKS coffess utilizes a focus strategy on its market. By specifically targeting three
primary segments they can cater specifically to their needs.

Senior Market (age 45+)


The SKS coffees will target this market simply by its well selected location. Although this
demographic group could readily drive downtown, they prefer a local café to unwind and
relax and historically become some of the most loyal patrons.

Newly Hired Employees


The café will attract regular customers (weekly or more) - particularly the newly employed
(first job) by providing free WIFI services and providing interesting games in the customer
area.

Young Families
The third targeted markets, younger families, often find that coffeehouse are not ‘kid’
friendly. The company has long term plans to create a combination coffee shop / play area
so that parents and caregivers will have a place to meet with other adults while the children
can enjoy the bounce houses, slides and indoor playground equipment.

5.5.1 Positioning Statement


The SKS COFFEES is a gourmet coffee lover’s gem. It is truly one of a kind coffee
house offering outstanding gourmet coffees and blends, served by enthusiastic and
knowledgeable baristas, in a warm, relaxed environment. It is the place to go to visit
with friends or cozy up in a quiet corner with a good book either from the library or
Pricing Strategy
The SKS coffees primarily utilizes competition based pricing. The café does not
utilize coupons and discounts (other than opening promotion) because they believe

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that the most valuable customer demographic of daily coffee consumers is not
influenced by discount programs or coupons.

5.5.2 Promotion and Advertising Strategy


 Online Advertising - The SKS coffees will advertise regularly on popular social
media sites, such as Facebook ,twitter. Compared to traditional print advertising, this
is a cost effective tactic that will allow them to reach prospects in a highly targeted
way (e.g., based on criteria such as age, gender, geography, etc.).
 Web Site – the SKS coffees will develop a simple Web site, which will provide
basic information about the business, the menu, and links to their presence on the a
forementioned social media channels.
 Radio Advertising - During the first six months of operation, and during the busy
holiday shopping season, the business will advertise on local radio stations.
:
5.5.3 Website
The SKS coffees will have a simple website identifying its menu items of coffees,
smoothies and pastries, along with the address, map and hours of operation. The
website will also have a calendar of any upcoming events or sponsorships . The site
will also have links to their social media sites – such as Facebook, Twitter, and
Pinterest.
 www.skscoffees.com

5.5.4 Marketing Programs


The café will also rely on signage and draw to its location.

5.6 Sales Strategy


The SKS coffees will use the following methods to increase sales revenue :
 The menu will focus on the most profitable products sold. The café will always draw
customer attention to the most profitable products.
 As warranted, the café will raise prices to bolster brand image. Prices communicate a
perceived value of a product; so if set too low, the customers might assume that the
beverages are inferior compared to the competition.
 Monitor flavoring inventory – Excess flavoring inventory ties up capital and valuable
back room space for storage. The café will utilize 4-6 varieties, including sugar free
offerings.
 Control waste and theft – audit sales and inventory reports to evaluate ingredient
waste due to inefficient preparation, returned drinks and employee consumption.
Retail locations can easily waste 20% or more of their daily sales these three key
categories, which is a substantial and unnecessary loss.
 Monitor and evaluate hours of operation
 Run employee sales contests – The baristas are the salespeople and have a great deal
of influence over the customer ordering process. All baristas will have some form of

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sales and customer service training to make each transaction active, rather than
passive. Sales contests will emphasize high margin items or cross selling

5.6.1 Sales Forecast


The sales forecast assumes a conservative 5% increase in revenues during Year Two
and 10% increase in Year Three. The following chart shows estimated sales over the
next three years.

5.6.2 Sales Programs


The SKS coffees will run employee sales contests – The baristas are the salespeople and
have a great deal of influence over the customer ordering process. All baristas will be
required to have sales and customer service training to make each transaction. The sales
contests will emphasize high margin items and cross selling.

5.7 Milestones
Listed below are the milestones for the SKS coffees

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5.8 Table 5.8 Milestones
Milestone Date
Secure occupancy Overland Park location Completed
Tenant improvements and build outs Mar 20XX
Purchase furniture and décor Apr 20XX
Assemble and hire barista team May 20XX
Advertise on local radio station / mail fliers May 20XX
Open for Business Jun 20XX

554ew554ewz Euxit Strategy


In the event the store would have to close for business all assets would be sold at auction

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6.0 Financial Plan
The financial plan will cover the following:

 Required Cost of Start-Up


 Profit and Loss
 Cash Flow
 Balance Sheet
 Financial Ratios

6.1 Important Assumptions


 The sales forecast is conservative and assumes a 5% increase in Year 2, and a 10% in
Year 3.
 The analysis accounts for economic seasonality – wherein some months revenues peak
(such as holidays ) and wane in slower months.
 The analysis assumes the owner will take a much smaller salary compared to his baristas;
at any time it is assumed that owner’s withdrawal is available at his discretion.
 Sales are cash basis – nonaccrual accounting
 Moderate ramp- up in staff over the 3 years forecast
 The average barista salary in 2012 is $50,000.
 In general, most cafes have an 85% gross profit margin
 In general most cafes have a 3% net profit margin

6.2 Start-Up Costs


Following are the needed start-up costs associated with the sks
coffees

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6.2.1 Projected Profit and Loss
The estimated profit and loss for the SKS coffees are as follows:

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Table 7.5.1 Pro Forma Profit and Loss

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6.2.2 Projected Cash Flow
The statement of cash flow shows the incoming and outgoing cash of the business.

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