Cafe Business Plan

7/18/2019 Cafe Business Plan

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BUSINESS PLAN

(CAFÉ BUSINESS PLAN)

THE RUSSET CUP

13351 MISSION STREET

(OVERLAND PARK, KS)

(DATE)

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TABL !" C!#T#T$

%&' (ecuti)e $ummary&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&*1.1 Business b!ectives......................................................................................................................................."1.# $ission %tatement........................................................................................................................................."1.& 'uiding Principles........................................................................................................................................."1." (eys to %uccess.............................................................................................................................................)

+&' Company ,escription&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&-#.1 wnership.....................................................................................................................................................)#.# *egal +orm....................................................................................................................................................)#.& %tart-p %ummary.........................................................................................................................................)#." *ocation and +acilities..................................................................................................................................

.&' Products/$er)ices&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&0&.1 Products/%ervices 0escriptions.....................................................................................................................

&.# 2ompetitive 2omparison...............................................................................................................................&.& Product/%ervice %ourcing..............................................................................................................................3&." 4nventory $anagement.................................................................................................................................3&.) 5arehousing and +ulfillment........................................................................................................................3&. +uture Products/%ervices...............................................................................................................................3

*&' 1ar2et Analysis&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&3".1 4ndustry 6nalysis.........................................................................................................................................17

".1.1 $ar8et %i9e.............................................................................................................................................11".1.# 4ndustry Participants...............................................................................................................................11".1.& $ain 2ompetitors...................................................................................................................................1#".1." $ar8et %egments....................................................................................................................................1"

".# $ar8et Tests................................................................................................................................................1)".& Target $ar8et %egment %trategy.................................................................................................................1

".&.1 $ar8et :eeds..........................................................................................................................................1".&.# $ar8et Trends.........................................................................................................................................1".&.& $ar8et 'rowth........................................................................................................................................1

"." Positioning...................................................................................................................................................1

-&' 1ar2eting $trategy and 4mplementation&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&%0).1 %5T 6nalysis...........................................................................................................................................1;

).1.1 %trengths.................................................................................................................................................1;).1.# 5ea8nesses.............................................................................................................................................1;).1.& pportunities...........................................................................................................................................1;).1." Threats.....................................................................................................................................................1;

).# %trategy Pyramid.........................................................................................................................................1;).& -ni<ue %elling Proposition =-%P>..............................................................................................................13)." 2ompetitive ?dge........................................................................................................................................13

).) $ar8eting %trategy and Positioning............................................................................................................13).).1 Positioning %tatement.............................................................................................................................13).).# Pricing %trategy.......................................................................................................................................#7).).& Promotion and 6dvertising %trategy.......................................................................................................#7).)." 5ebsite....................................................................................................................................................#7).).) $ar8eting Programs................................................................................................................................#7

). %ales %trategy..............................................................................................................................................#7)..1 %ales +orecast..........................................................................................................................................#1)..# %ales Programs........................................................................................................................................#1

). *egal............................................................................................................................................................#1

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).; $ilestones...................................................................................................................................................#1).3 Table ).; $ilestones....................................................................................................................................##).17 ?xit %trategy................................................................................................................................................##

5&' !rgani6ation and 1anagement&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&++.1 rgani9ational %tructure..............................................................................................................................##.# $anagement Team......................................................................................................................................##.& $anagement Team 'aps.............................................................................................................................##." Personnel Plan.............................................................................................................................................##.) Board of 0irectors.......................................................................................................................................#&

0&' "inancial Plan&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&+..1 4mportant 6ssumptions...............................................................................................................................#&.# %tart-p 2osts.............................................................................................................................................#".& %ource and -se of +unds.............................................................................................................................#)." Brea8?ven 6nalysis...................................................................................................................................#.) Pro!ections...................................................................................................................................................#

.).1 Pro!ected Profit and *oss........................................................................................................................#

.).# Pro!ected 2ash +low...............................................................................................................................#;.).& Pro!ected Balance %heet..........................................................................................................................#3. Business @atios...........................................................................................................................................#3

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%&' (ecuti)e $ummary

The @usset 2up will be a one of a 8ind coffee house / cafA located in verland Par8, (ansas.The 1,)77 s<uare foot cafA will be located in the newly constructed $ar8et %<uare Pla9a located

on the northeast corner of 1&)th %treet and $ission %treet. The anchor tenant, the Price 2hoppergrocery store, has already ta8en occupancy and the excellent location brings more than 17,777shoppers wee8ly.

The @usset 2up, aptly named for the aromatic brown li<uid that will fill the cup, fills the void oforiginal cafes in the mar8et area, stands out from its corporate peers with their fast food conceptsand fast services. The @usset 2up is the alternative to fast food/commercial/coffee shops andoffers a much calmer, civili9ed gourmet coffee experience. There are no televisions in the cafA,the bac8ground music is subtle and wor8 from local artists will hang on the walls.The cafA is well appointed with overstuffed leather chairs and sofas in a library li8e setting. ThecafA is reminiscent of times gone by yet is cutting edge technologically with 54+4 and state of

the art espresso machines.

The @usset 2up measures its financial success in terms of increased mar8et share and inearnings. 5ith a total local mar8et of C)" million, this is a tremendous opportunityD The 8eys tosuccess will be the ability to offer <uality gourmet coffees, ta8e advantage of its small si9e, andreliance on an outstanding barista staff. 4n order to achieve these goals, the cafA will offer somethe areaEs finest gourmet beans from local distributors. Because of its small si9e, the cafA canen!oy larger margins in the form of lower overhead. The cafe will hand select baristas and offersalaries comparable to the chains. 4n turn the baristas will be trained to crosssell, and sell thehigher margin products.

%&% Business !b7ecti)esThe primary ob!ectives of the business plan for @usset 2up are belowF

• To increase revenues C&,777 or )G in Year # and by C&,777 or 17G by Year &

• 6chieve a profit margin of ).#G in Year # and .37G by Year &

• Be the 2afA of 2hoice in the verland Par8 area and recipient of the Best

2offeehouse 6ward

%&+ 1ission $tatement

The @usset 2up is committed to its products and employees which they believe is therecipe for mar8et success.

%&. 8uiding PrinciplesThe @usset 2up is committed to values such as excellence, passion, <uality, integrity andleadership 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 @usset 2up rewards excellence and cherishes loyalty. The cafA will wor8 with itsemployees to build strong businesses and a secure future.

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%&* 9eys to $uccess

The @usset 2up stands out from the competition. Below are their (eys to %uccessF

• 8reat Products : providing exemplary products at mar8et prices will ma8e

customers want to return again and again

• ;ire <uality 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

• Con)ert Customers to Connoisseurs = nly "7G of the nations coffee drin8ers

consume premium ground and whole bean coffee this will aid in continued growth

+&' Company ,escription

The @usset 2up will be a coffee house / cafA located in the verland Par8, (ansas. *ocated in

the (ansas 2ity area, the co9y cafA will be located in the newly completed $ar8et %<uare Pla9a.The cafA will serve gourmet coffees, espresso and drip coffee, lattes, and smoothies. The simple pastry offerings may vary with seasonality but the primary line will be muffins, breads, coo8ies,scones, and rolls. 6ll pastries will be supplied daily by a local ba8ery.

The cafA will be owned and operated by wen ones, a veteran restaunteur with several yearsexperience running and managing chain restaurants. The cafA will be open for business $onday Thursday 17, +ridays and %aturdays 11 and closed %undays.

+&% !wnership

The @usset 2up will be owned 177G by wen ones. $r. ones a graduate of (ansas %tate-niversity has an undergraduate degree in business administration. 0uring high school he

wor8ed as a waiter in a local hospital coffee shop that purchased its beans from a localroaster. 4n addition to being an avid coffee drin8er himself, this !ob allowed him to learnabout the business firsthand. 4n college, ones wor8ed in a campus coffeehouse for fouryears, eventually rising to the position of assistant manager. +ollowing graduation, onessecured a business development position for regional restaurant chain, which providedadditional firsthand exposure to the food and beverage industryIespecially the stepsinvolved in establishing new locations.

+&+ Legal "orm

The @usset 2up will be formed as an %2orporation wholly owned by $r. ones.

+&. $tart=Up $ummaryThe @usset 2up will have seating for "7 patrons. The rent is C#,7) a month, with a threefiveyear lease available. The site consists of 1)77 s<uare feet of leased space consisting ofa dining room, a coffee bar, two restrooms, and a storage room in bac8. To be used as arestaurant, this storefront needs to be plumbed and wired appropriately. Painting, newfloors, and countertops are also needed. 6 custom coffee bar needs to be built. 5ithmaterials bought on sale and volunteer labor, the cost to renovate will be C1,#). Thecoffeehouse e<uipment will consist of two commercial espresso machines, air pots and

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urns, a commercial blender, commercial brewer, top loading coffee bins, barista syrups,cold drin8 dispenser, frothing e<uipment, a commercial refrigerator, microwave andstainless steel prep bar. The cost for the e<uipment is C&;,#). The furniture will consist

of leather couches, and chairs =purchased at auction>, coffee tables, boo8cases, and windowtreatment. The artwor8 will come from local artists and will be sold on a consignment basis. The boo8s were secured via donations. Total cost to furnish is C1",777. therstartup expenses will be dishes, furniture, rent deposit, and mar8eting.

+&* Location and "acilities

The new coffeehouse is located in the highly desirable verland Par8, (ansas area at thenortheastern intersection of 1&)th %treet and $ission %treet in the new $ar8et %<uarePla9a. The property is located in an excellent location. 5ith an easy minute drive time to4"&) and 3 Highway. The property is 3)G leased with Price 2hopper as the 6nchorTenant. ther tenants includeF *ife %pring $ed %pa, aneEs 2anines =Pet %tore J

Boarding>, Pride 2leaners (ahn 0ental and %wim -. Price 2hopper brings more than17,777 shoppers per wee8 to the center. The location is comprised of a population of 3,"#7within a one mile radius, 1,17# within # mile radius and 1"3,))7 within a ) mile radius with a median household income of C1#7,;). %print / :extelEs corporate office is locatedwithin # miles of the site.









.&' Products/$er)ices

.&% Products/$er)ices ,escriptions

The @usset 2upEs primary offering is gourmet roasted coffees with such varieties such asmocha, carmelicious, white mocha, candy bar latte, and brewed coffee. 2omplementingthe coffee will be a smoothie line including wild berry, strawberry, peach, mango andlemonade. @ounding 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, coo8ies, scones, and rolls.

.&+ Competiti)e Comparison

The research methodology is based on uni<ue coffee shops/cafes in the greater metro areaand omits larger chains or franchises. The findings reveal eight uni<ue competitors.









Roasterie Café4511 W 119th St

Leawood, S !!"#9

httpF//www.theroasterie.com/2afe/

Ta$e Fi%e Coffee &ar

5''! W 151st St (%er)and *ar$, S !!""4+-#1

htt./00wwwta$efi%e2offee3ar2o0We)2oetoTa$eFi%eCoffee&ar

6oer7s Coffee 6ouse

-1"! W #th St

(%er)and *ar$, S !!"#4+'-15

htt./00wwwhoers2offeehouse2o0a3out.h.

8orning )ory :s.resso5!#! ;ohnson <r

8ission, S !!"#"+''"'

htt./00wwworningg)oryes.resso2o /

Re%o Cu. Coffee

11#'# =ui%ira Rd (%er)and *ar$, S !!"1#+1"'9

htt./00re%o2u.2o03)og0

<ai)y <ose Coffee and &ar

1"#5! W 1'5th St,

(%er)and *ar$, ansas

;a%a Crossing

'# W 95th St (%er)and *ar$, S !!"1"+4#51

6attie7s Fine Coffees

4195 Soerset <r *rairie >i))age, S !!"#+5"4"

htt./00wwwhattiesfine2offee2o06oe*ageht)

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http://www.theroasterie.com/Cafe/

http://www.takefivecoffeebar.com/Welcome_to_Take_Five_Coffee_Bar







.&. Product/$er)ice $ourcing

The @usset 2up has negotiated supplier agreements with several local foodservicewholesalers and coffee wholesalers in the verland Par8 area that have a reputation for

<uality and reliabilityF• $ean Beans 2offee @oasters• verland Par8 Brewers• Healthy Harvest Bread 2o.• $aryKs rganics

4n the event that one of the aforementioned specialty suppliers cannot meet their needs, thefollowing national suppliers can both provide all of the foodservice products that theyre<uire. 4n addition, the following wholesalers will supply the cafA with general restaurantsuppliesF• *awrence +ood Products 2orp.• 'erry +ood %upply 4nc.

.&* 4n)entory 1anagement

:/6

.&- >arehousing and "ulfillment

:/6

.&5 "uture Products/$er)ices

Young families which comprise the third largest mar8et share in verland Par8, are oftenoverloo8ed in the coffee mar8et. 2offeehouses traditionally have not been consideredL8idE friendly. To overcome this hurdle, the @usset 2up has long term plans =) years> to

open a #nd

coffee shopF 6 combination indoor play area / coffee bar. This concept allows parents and caregivers an opportunity to meet and relax with other adults while thechildren can en!oy the indoor playground amenities.

6dditional future services will include instore sales for home purchase as well as anonline store.

The website will have an option to purchase prepaid gift card program Prepaid gift cardsnot only provide immediate cash, but also reduce credit card transaction charges and drawnew customers to the business.

*&' 1ar2et Analysisverland Par8, (ansas is an awardwinning place to live and wor8 and is considered the leading business community in the $idwest. :ational publications and organi9ations recogni9everland Par8 for its business environment and livability. HereEs a samplingF th Place,6mericaEs Best Places to *ive $oney, Top )7 2ities to *ive and Play, :ational 'eographic6dventure, &rd Hottest Town in the -.%., $oney, 6mong #7 Best Places to *ive J 5or8?mployment @eview, ne of only # %terling Tree 2ities in -.%., :ational 6rbor 0ay+oundation, Top 17 best *ocations to @aise a +amily, %outhern Business and 0evelopment, 1st

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Place, (id +riendly @eport 2ard, Population 2onnection, #nd Best 2ity in 6merica to *iveBusiness 0evelopment utloo8.

verland Par8 is at the core of one of the most dynamic local mar8ets in the -.%. 4t offers easyaccess to the (ansas 2ity regionEs amenities and, as part of the (ansas 2ity metropolitan areaM itis within the most centrally located ma!or mar8et in the nation. 4&), 4"&), 4&) and -.%.Highway 3 all pass through verland Par8, and no point in the city is more than &.) miles froma freeway. The city maintains an excellent arterial street networ8 and plans to constructadditional lanemiles as the area grows. Three airports serve the region. (ansas 2ity4nternational 6irport =$24> is !ust #) interstate highway miles north of verland Par8. ohnson2ounty ?xecutive 6irportIthe second busiest in (ansasIprovides complete services for private business !ets and general aviation. :ew 2entury 6ir2enter, !ust 1# miles southwest of thecity, offers general aviation services and accommodates cargo or passenger !ets of any si9e.

verland Par8 supplies some of the most highly educated wor8ers in the nation, with 3G ofverland Par8 adults over age #) holding at least a high school diploma. ohnson 2ounty, inwhich verland Par8 is located, ran8s first among the countryEs #&1 counties with populationsgreater than #)7,777. The county ran8s sixth in percentage of adults with at least a bachelorEsdegree and 1th in the percentage with a graduate or professional degree.

The verland Par8 area has a total population of 1),#) based on the #717 census. The medianhousehold income is C,;;1 and the median age is &.3. =#717 -% 2ensus>Drive

*&% 4ndustry Analysis

The -% coffee shop industry includes about #7,777 stores with combined annual revenue of about C17 billion. $a!or companies include 2aribou 2offee, 4nternational 2offee J Tea=The 2offee Bean J Tea *eaf>, PeetEs 2offee, and %tarbuc8s. The industry is concentratedFthe top )7 companies generate more than 7 percent of sales. 2offee shops are part of thespecialty eatery industry, which also includes retail outlets speciali9ing in products such as bagels, donuts, fro9en yogurt, and ice cream. =+irst @esearch>

Competiti)e Landscape

2onsumer taste and personal income drive demand. The profitability of individualcompanies depends on the ability to secure prime locations, drive store traffic, and deliverhigh<uality products. *arge companies have advantages in purchasing, finance, and

mar8eting. %mall companies can compete effectively by offering speciali9ed products,serving a local mar8et, or providing superior customer service. %pecialty eateries, whichinclude coffee shops, are laborintensiveF average annual revenue per wor8er is aboutC)7,777. 2offee shops compete with businesses such as convenience stores, gas stations,<uic8 service and fast food restaurants, gourmet food shops, and donut shops. =+irst@esearch>

Products? !perations? Technology

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$a!or products include beverages and food. Beverages include brewed coffee and teaMespresso drin8s =cappuccinos, cafA lattes>M cold blended beveragesM bottled waterM softdrin8sM and !uices. +ood includes pastries, ba8ery items, desserts, sandwiches, and candy.

$any coffee shops sell whole or ground coffee beans for home consumption. %ome coffeeshops sell coffee or espressoma8ing e<uipment, grinders, mugs, and other accessories.=+irst @esearch)

*&%&% 1ar2et $i6e

The -% coffee shop industry includes about #7,777 stores with combined annualrevenue of about C17 billion. $a!or companies include 2aribou 2offee,4nternational 2offee J Tea =The 2offee Bean J Tea *eaf>, PetEs 2offee, and%tarbuc8s. The industry is concentratedF the top )7 companies generate more than7 percent of sales. =+irst @esearch>

*&%&+ 4ndustry Participants

5ithin ) miles of the sub!ect, are & businesses involved in the coffee industry,including chains, restaurants, and tea houses reporting annual revenues in excess ofC)" million. f these & businesses, #7 are %tarbuc8s coffee shops capturing C&).million in revenues or G of the mar8et share. 6n additional ; coffee houses arefranchises capturing C3. million represent 1;G of the mar8et share. Thecomparables those closely held coffee shops/cafes that will compete for thesub!ectEs business represent C;.& million in annual revenues or 1)G of the totalmar8et.

The @usset 2up istargeting three primary groups residing in their direct mar8eting area. Theseindividuals prefer uni<ue venues and avoid the big chains and franchises. They prefer their local neighborhood and will support local businesses if the business

warrants.

*&%&. 1ain Competitors

Roasterie Café

4511 W 119th St Leawood, S !!"#9

httpF//www.theroasterie.com/2afe/

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This competitor has been operating in the greater $%6 since #77) opening its firstcafA in Broo8side, (ansas and then at the *eawood location in #717. The &,&77

s<uare foot cafA offers an assortment of pastries, bagels and coo8ies. Beveragesinclude Harney and %ons teas, signature blends, espresso and specialty drin8s. ThecafA has 11 employees and generated C11 million in revenues in #711. The sub!ectEsadvantage is its smaller, co9ier environment.

Ta$e Fi%e Coffee &ar

5''! W 151st St (%er)and *ar$, S !!""4+-#1

htt./00wwwta$efi%e2offee3ar2o0We)2oetoTa$eFi%eCoffee&ar

This competitor operates from a &,&77 s<uare foot space. The cafA has 54+4. 4n

addition to serving coffees and smoothies, the cafA offers more food offerings with afull service 8itchen offering light brea8fasts, and sandwiches and wraps. 4n theevenings the cafA has musicians performing on a small stage. The 2afA also has afull li<uor license. The broad offerings of amenities do not ma8e this a true compfor the sub!ect.

6oer7s Coffee 6ouse

-1"! W #th St

(%er)and *ar$, S !!"#4+'-15

htt./00wwwhoers2offeehouse2o0a3out.h.

This competitor operates from a ,&77 s<uare foot space in a shopping center. Theshop was established in #771 and in #711 reported C# million in revenues. The shopemploys #1 employees and provides music on the wee8ends. The sub!ectEsadvantage is its smaller, co9ier, and <uieter environment.

8orning )ory :s.resso

5!#! ;ohnson <r

8ission, S !!"#"+''"'

htt./00wwworningg)oryes.resso2o /

This competitor is similar in si9e to the sub!ect operating from 377 s<uare feet in a

retail shopping center. The $orning 'lory ?spresso has been operational since #77)and has & employees and reported revenues of C&77,777 in #711. The coffee shop isopen days a wee8 and open for brea8fast. The shop has a full 8itchen and inaddition to pastries provides traditional brea8fast offerings. The store is for sale,which could potentially impact mar8et share.

Re%o Cu. Coffee

11#'# =ui%ira Rd

1#











(%er)and *ar$, S !!"1#+1"'9htt./00re%o2u.2o03)og0

This competitor occupies a #,177 s<uare foot shop and has employees. 4n #711 itsannual sales were reported to be C77,777. The @evo 2up is a speciali9ed roaster.The owners from ?thiopia roast the ?thiopian coffee in the store themselves, providing a truly uni<ue roasted coffee experience. 0ue to its uni<ue roastingmethods, and its limited food offerings, the sub!ect should do well against thiscompetitor.

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<ai)y <ose Coffee and &ar

1"#5! W 1'5th St,

(%er)and *ar$, S

This competitor occupies #,77 s<uare feet in a strip center and has been in operationsince #77&. The coffee shop/bar is open days a wee8 and has a full 8itchen. Theshop occasionally offers live music on the wee8ends. The shop employs 3 andreported revenues in excess of C377,777 in #711.

;a%a Crossing

'# W 95th St

(%er)and *ar$, S !!"1"+4#51

This competitor leases a #,77 s<uare foot stand alone pad in a shopping center. Theshop has drive throughs on both sides with a small wal8 up. The business wasestablished in #77& and is privately held. The store employs 3 and reported annualrevenues of C377,777 in #711. (nown primarily for its convenience and brea8fastsandwiches, this shop does not directly compete with the sub!ectEs indoor sit downexperience.

6attie7s Fine Coffees

4195 Soerset <r *rairie >i))age, S !!"#+5"4"

htt./00wwwhattiesfine2offee2o06oe*ageht)

?stablished in #77), HattieEs has a staff of 1 and annual revenues of C1,77,777.The store is larger than the sub!ect and occupies ),177 s<uare feet. HattieEs $enuoptions are similar to the sub!ect with a focus primarily on coffee, lattes, pastries andsimple brea8fast sandwiches. The facility has a great reputation and following. Tocapture a portion of this mar8et, the sub!ect will have to convince these customersthat a co9ier and <uieter atmosphere is a more en!oyable cafA experience.

*&%&* 1ar2et $egments

The @usset 2up is targeting the three top segments of the population representing&3G of the population in the verland Par8 areaF

• Boomburbs =#3G> Younger families with a busy, upscale lifestyle.

$edian age of &". $ost households operate on two incomesM medianhousehold income is C177,777. Product purchases reflect a suburbanlifestyleM one of the top mar8ets for %-Ns, lawn /garden purchases andcasual apparel. Technically savvyM active in golf, tennis and swimming.

• ?nterprising Professionals =17G> Young, highly educated, wor8ing

professionals. %ingle or recently married, median age of &#, median

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household income is C),777. *ifestyle reflects youth, mobility, andgrowing consumer clout. @esidents go where the !obs are located. *ove totravel and exerciseM rely heavily on cell phones, P2s and the internet to

stay connected.• Prosperous ?mpty :esters =1#G> 5ell educated and experienced,

residents are en!oying the transition from child rearing to retirement.$edian age is "M median household income is C",777. This mar8etsegment is active physically and financially. 0isplay interest inhomes/communities.

=%ourceF :orth %tar>

*&+ 1ar2et Tests

@esearch from Yelp, +our%<uare, and 'ooglePlaces, indicates the verland Par8 mar8et isin need of a new local cafA. The locals have been clamoring for the current private shopsto improve service and/or reduce prices to 8eep pace with larger chains and franchises,thus providing a uni<ue niche for the right entrant.

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5hile employed by a national restaurant chain, $r. ones was constantly directing patronsto offsite coffeehouses for those see8ing that final dessert and cup of coffee prior tofinishing their evening. This is the reason he ultimately began see8ing the location for his

coffee house.

*&. Target 1ar2et $egment $trategy

$ost adult coffee drin8ers said their lifelong habit began during their teenage years. 4n fact,)"G said they began drin8ing coffee between 1& and 13. 6nother ##G reported their coffeecravings started between the ages of #7 and #". This means that G of adult coffeedrin8ers began drin8ing coffee by the time they were #". %o, despite the large amount ofmar8eting and advertising directed at the younger age groups, savvy coffee shop ownerswill not forget to cater some of their offerings to the adult and senior mar8et. =:ational2offee 0rin8ing %tudy>.

The @usset 2up will offer a uni<ue experience for coffee aficionado by offering a <uietand co9y yet sophisticated cafe and offer a sense of refinement and peace in an otherwisehectic and fast paced world. 5hile other coffee shops cater to convenience with drivethroughs or loud music venues late into the night, the @usset 2up will stand apart from itscompetitors with its <uiet yet soothing ambience, capturing a truly uni<ue =and muchneeded> mar8et niche.

*&.&% 1ar2et #eeds

2offee shop customers, by nature, are loo8ing for something special I thatEs whythey are willing to pay so much for a cup of coffeeD $any customers of the big

national chains, while satisfied with their daily coffee would be intrigued to find alocal coffee that is different. =%B6 :ational 4nformation 2learinghouse>

*&.&+ 1ar2et Trends

• -ni<ue products =speciali9ed roasts, local ingredients, locally themed or

named drin8s, custom drin8s by theLstarE barista, etc.>

• 'ames, pu99les, mind benders and other activities that encourage

customers to linger over their coffee

• Hosting or sponsoring local events =entertainment, readings, boo8 clubs,

etc.>

• -sing technology to creatively compete in mar8eting with the big chains I services li8e +our%<uare, Yelp, and 'oogle Places can increase visibility in thelocal mar8et.

• 0elivering ama9ing service from 8nowledgeable baristas I spend lots of time

training staff and utili9e online services li8e the 6merican 2offee J Barista %chool

• %elling coffeerelated items =and trac8 down any comar8eting opportunities with

a local community college or other studentrelated group in the area>

1





https://foursquare.com/


http://www.yelp.com/


http://www.google.com/places/

http://coffeeschool.org/




http://www.google.com/places/






*&.&. 1ar2et 8rowth

0espite the economic woes, &G of total coffee consumed in the -nited %tates in#711 was classified as O'ourmet. 6ccording to the :ational 2offee 0rin8ing %tudy

This suggests consumers were set on drin8ing good coffee and visiting their localcoffee shop even in the face of an uncertain economy. =+irst @esearch>

The sales of coffee dominate sales of hot beverages, ma8ing up ;&.&G of the totalhot beverage mar8et in the -.%. 2offee consumption is expected to increase through#71) at an average annual rate of #.G, while tea consumption is expected toincrease through #71) at an average annual rate of &.1G. Positive expectations forcontinued growth in coffee sales, despite its Omature product position in the mar8et,are due to the innovations in premium coffee products =pods, singleserving instants,etc.> =+irst @esearch>

*&* PositioningThe @usset $ug will position itself as a local coffeehouse or a LsuburbanE coffeehouse providing a sanctuary for those in the LburbsE without the hassle of having to drivedowntown

• By charging similar prices as the large chains the service and <uality of the

product will commensurate with the price• The @usset 2up is genuinely uni<ue place to gather and meet friends, and en!oy

coffee• 6menities such as free 54+4, chess games, comfy overstuffed chairs, create a

relaxing environment

• The mar8et does not need a cafA offering fast food brea8fasts or another after

hours bar • The @usset 2up will position itself as the alternative to the chain/franchise/fast

food coffee house.

-&' 1ar2eting $trategy and 4mplementation

The @usset 2up will provide a <uiet and relaxing environment to en!oy gourmet roasted coffeeand smoothies and an opportunity to visit with friends, catch up on oneEs email, or read a chapterof a boo8. The 2afA will fill the great void providing originality in a sea of facsimile, corporatecoffee shops. The cafAEs baristas will be extremely 8nowledgeable and offer assistance in anycoffee purchase while simultaneously providing customers with outstanding service.

1





http://www.ncausa.org/i4a/pages/index.cfm?pageid=731

http://www.ncausa.org/i4a/pages/index.cfm?pageid=731





-&% $>!T Analysis

The %5T analysis examines the cafAEs strengths and wea8nesses that need to beaddressed. +urther, this section examines the opportunities presented to 2afA as well as potential threats.

-&%&% $trengths

• Based on its smaller si9e, the fact that it is not a franchise, the @usset 2up

is a uni<ue coffee shop concept unli8e any other in the verland Par8 mar8et.

• The owner has firsthand experience, in operating and starting new

restaurants,

• Handpic8ed baristas will bring professionalism and enthusiasm to the

shop.

-&%&+ >ea2nesses

• +ranchises are the easiest way and often the safest conduit to start a cafAM the

cafA will not have the bac8ing of one of these established entities.

• The @usset 2up has a minimal budget and is competing against larger and

more established coffeehouses for mar8et share.

!pportunities

• The verland Par8 demographics support the need for a uni<ue coffee shop.

• 6dditional opportunities to target the active and recently retired target mar8et

and ") yearsQ age group.• 6 small slice of a much bigger pie is the goal. nly "7 percent of the nationEs

coffee drin8ers are consuming premium ground and whole bean coffee.?ncouraging coffee drin8ers to become coffee connoisseurs is the 8ey tocontinued growth.

• The local coffeehouse/cafA mar8et is C)" million

-&%&* Threats

• The $orning 'lory 2offee shop is currently for saleM should anotherindependent purchase this cafA, it could pose significant threat to mar8etshare.

-&+ $trategy Pyramid

• 4n the shortterm, a number of promotions and activities are planned around launch of

the business to create awareness. The coffee shop will have a contest offering #7 bottomless mugs and will publici9e this promotion via radio advertising, as well ascountertop displays and posters in the shopping pla9a.

1;









• 4n 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 theshopping center.

-&. Uni@ue $elling Proposition U$P

The @usset 2up truly stands out from a crowded sea of coffee chains and franchises. 5hatsets them apart from the competition is primarily its smaller co9ier si9e combined with premium coffees served by 8nowledgeable baristas providing so much energy andenthusiasm for the products they sell.

-&* Competiti)e dge

The @usset 2upEs competitive edge, its si9e, is also its greatest attribute. Because they aresmall there is no red tape, and they can easily ad!ust business hours to say accommodate anafterhours boo8 reading session whereas the corporate chains do not provide such an

accommodation. The @usset 2up will truly cater to its patrons needs.

-&- 1ar2eting $trategy and Positioning

The @usset 2up utili9es a focus strategy on its mar8et. By specifically targeting three primary segments they can cater specifically to their needs.

%enior $ar8et =age ")Q>The @usset 2up will target this mar8et simply by its well selected location. 6lthough thisdemographic group could readily drive downtown, they prefer a local cafA to unwind andrelax and historically become some of the most loyal patrons.

:ewly Hired ?mployeesThe cafA will attract regular customers =wee8ly or more> particularly the newly employed=first !ob> by providing free 54+4 services and providing interesting games in the customerarea.

Young +amiliesThe third targeted mar8ets, younger families, often find that coffeehouse are not L8idEfriendly. The company has long term plans to create a combination coffee shop / play areaso that parents and caregivers will have a place to meet with other adults while the childrencan en!oy the bounce houses, slides and indoor playground e<uipment.

-&-&% Positioning $tatementThe @usset 2up is a gourmet coffee loverEs gem. 4t is truly one of a 8ind coffeehouse offering outstanding gourmet coffees and blends, served by enthusiastic and8nowledgeable baristas, in a warm, relaxed environment. 4t is the place to go to visitwith friends or co9y up in a <uiet corner with a good boo8 either from the library orfrom one of the patronEs personal ?Boo8s.

13









-&-&+ Pricing $trategy

The @usset 2up primarily utili9es competition based pricing. The cafA does notutili9e coupons and discounts =other than opening promotion> because they believe

that the most valuable customer demographic of daily cofee consumers is notinfluenced by discount programs or coupons.

-&-&. Promotion and Ad)ertising $trategy• (n)ine Ad%ertising + The @usset 2up will advertise regularly on popular socialmedia sites, such as +aceboo8. 2ompared to traditional print advertising, this is acost 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.>.• We3 Site + the @usset 2up will develop a simple 5eb site, which will provide basic information about the business, the menu, and lin8s to their presence on theaforementioned social media channels.• Radio Ad%ertising + 0uring the first six months of operation, and during the busyholiday shopping season, the business will advertise on local radio stations.

F-&-&* >ebsite

The @usset 2up will have a simple website identifying its menu items of gourmetcoffees, 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 lin8s to their social media sites such as +aceboo8, Twitter,and Pinterest.

-&-&- 1ar2eting Programs

The cafA will also rely on signage and draw to its location. Price 2hopper brings17,777 shoppers wee8ly to its location.

-&5 $ales $trategy

The @usset 2up will use the following methods to increase sales revenue =asrecommended by 6ndrew Het9el on Better 2offee, Better Business>F

• The menu will focus on the most profitable products sold. The cafA will always draw

customer attention to the most profitable products.

• 6s warranted, the cafA will raise prices to bolster brand image. Prices communicate a

perceived value of a productM so if set too low, the customers might assume that the beverages are inferior compared to the competition.

• $onitor flavoring inventory ?xcess flavoring inventory ties up capital and valuable

bac8 room space for storage. The cafA will utili9e " varieties, including sugar freeofferings.

• 2ontrol waste and theft audit sales and inventory reports to evaluate ingredient

waste due to inefficient preparation, returned drin8s and employee consumption.@etail locations can easily waste #7G or more of their daily sales these three 8eycategories, which is a substantial and unnecessary loss.

#7









• $onitor and evaluate hours of operation

• @un employee sales contests The baristas are the salespeople and have a great deal

of influence over the customer ordering process. 6ll baristas will have some form ofsales and customer service training to ma8e each transaction active, rather than passive. %ales contests will emphasi9e high margin items or cross selling

-&5&% $ales "orecast

The sales forecast assumes a conservative )G increase in revenues during Year Twoand 17G increase in Year Three. The following chart shows estimated sales over thenext three years.

Table -&5&% Annual $ales "orecast

-&5&+ $ales Programs

The @usset 2up will run employee sales contests The baristas are the salespeople andhave a great deal of influence over the customer ordering process. 6ll baristas will bere<uired to have sales and customer service training to ma8e each transaction. The salescontests will emphasi9e high margin items and cross selling.

-&0 Legal

The @usset 2up is organi9ed as an %2orporation formed in the state of (ansas.

-& 1ilestones

*isted below are the milestones for the @usset 2upF

#1









-&3 Table -& 1ilestones

1ilestone ,ate

%ecure occupancy verland Par8 location 2ompleted

Tenant improvements and build outs $ar #7RR

Purchase furniture and dAcor 6pr #7RR

6ssemble and hire barista team $ay #7RR

6dvertise on local radio station / mail fliers $ay #7RR

pen for Business un #7RR

-&%' (it $trategy

4n the event the store would have to close for business all assets would be sold at auction.

5&' !rgani6ation and 1anagement

5&% !rgani6ational $tructure

The @usset 2up is formed as an %2orporation wholly owned by wen ones.

5&+ 1anagement Team

The @usset 2up will be owned 177G by wen ones. $r. ones a graduate of (ansas%tate -niversity, has an undergraduate degree in business administration. 0uring highschool he wor8ed as a waiter in a local hospital coffee shop that purchased its beans froma local roaster. 4n addition to being an avid coffee drin8er himself, this !ob allowed him tolearn about the business firsthand. 4n college, ones wor8ed in a campus coffeehouse for

four years, eventually rising to the position of assistant manager. +ollowing graduation,ones secured a business development position for regional restaurant chain, which provided additional firsthand exposure to the food and beverage industryIespecially thesteps involved in establishing new locations.

5&. 1anagement Team 8aps

The @usset 2up will rely on its P% =Point of %ale> system to generate daily accountingand cost activity reports. $r. ones will supply these to an outside boo88eeper for preparation of annual income taxes.

5&* Personnel Plan

4nitially the cafA will hire 1 manager, ) baristas, and # part time servers. 4n Year #, the cafA plans to hire 1 additional full time barista.

##









Table 5&* Personnel Plan

5&- Board of ,irectors

:6

0&' "inancial Plan

The financial plan will cover the followingF

• @e<uired 2ost of %tart-p

• Profit and *oss• 2ash +low

• Balance %heet

• +inancial @atios

0&% 4mportant Assumptions

• The sales forecast is conservative and assumes a )G increase in Year #, and a 17G in

Year &.

• The analysis accounts for economic seasonality wherein some months revenues pea8

=such as holidays > and wane in slower months.

•

The analysis assumes the owner will ta8e a much smaller salary compared to his baristasMat any time it is assumed that ownerEs withdrawal is available at his discretion.

• %ales are cash basis nonaccrual accounting

• $oderate ramp up in staff over the & years forecast

• The average barista salary in #71# is C)7,777.

• 4n general, most cafes have an ;)G gross profit margin

• 4n general most cafes have a &G net profit margin

#&









0&+ $tart=Up Costs

+ollowing are the needed startup costs associated with the @usset 2upF

Table 0&+ $tart=Up Costs

#"









0&. $ource and Use of "unds

#)









0&* Brea2=)en Analysis

0&- Pro7ections

0&-&% Pro7ected Profit and Loss

The estimated profit and loss for the @usset 2up are as followsF

#









Table 0&-&% Pro "orma Profit and Loss

#









0&-&+ Pro7ected Cash "low

The statement of cash flow shows the incoming and outgoing cash of the business.

Table 0&-&+ Pro "orma Cash "low

#;









0&-&. Pro7ected Balance $heet

Table 0&-&. Pro "orma Balance $heet

0&5 Business Ratios

The analysis is based on :642% =:orth 6merican 4ndustry 2lassification %ystem> ###1& @estaurant / *odging %nac8 and :on6lcoholic Beverage Bars.

#3









Table 0&5 Ratio Analysis

&7









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Cafe Business Plan