Coffee Shop Business Plan

Coffee Shop Business Plan coffee tree finis coffee shut is determined to shape a insouciant necessity for local coffee addicts, a place to dream of as you try to escape the daily stresses of life andjust acomfortable place to meet your friends or to demo a book, all in one. With the growing demand for high-quality gourmet coffee and expectant renovation, coffee berry finish leave capitalize on its proximity to the University of Oregon campus to build a core group of repeat customers.The company will operate a 2,300 significant foot coffee bar within a walking distance from the University of Oregon campus. The owners adjudge secured this location by dint of a third-year lease with an option for extending. The collapse also provided $140,000 of the requestd $170,000 start-up funds. The remaining capital will be obtained throughBank of America commercial loans.The company is expected to grow sales taxation from $584,000 in FY2001 to $706,000 in year three. As Java C ulture will strive to maintain a 65% gross profit margin and likely operating expenses,it will seenet profits grow from $100,000 to$125,000 during the same period.1.1 ObjectivesJava Cultures objectives for the first year ofoperations areBecome selected as the take up New Coffee Bar in the area by the local restaurant guide.Turn in profits from the first month of operations.Maintain a 65% gross margin.1.2 Keys to SuccessThe keys to success will beStore design that will be both visually attractive to customers, and designed for card-playing and efficient operations.Employee training to insure the best coffee preparation techniques.Marketing strategies aimed to build a solid base of loyal customers, as well as maximizing the sales of high margin products, such(prenominal) as espresso drinks.1.3 MissionJava Culture will make its best effort to create a unique place where customers can socialize with each other in a comfortable and relaxing environment while enjoying the best brewed c offeeor espresso and pastries in town.We will be in the business of helping our customers to relieve their daily stresses by providing piece of mind through smashing ambience, commodious location, affable customer service, and products of consistently high quality. Java Culture will invest its profits to increase the employee satisfaction while providing stable return to its shareholders.2.0 Company limnJava Culture, an Oregon limited liability company, sells coffee, other beverages and snacks in its 2,300 square feet premium coffee bar set(p) near the University of Oregon campus. Java Cultures study(ip) investors are Arthur Garfield and James Polk who cumulatively own over 70% of the company. The start-up loss of the company is assumed in the amount of $27,680.2.1 Company OwnershipJava Culture is registered as a Limited Liability Corporation in the state of Oregon. Arthur Garfield owns 51% of the company. His cousin, James Polk, as well as Megan Flannigan and Todd Barkley hold minority put on the line in Java Culture, LLC.2.2 Company Locations and FacilitiesJava Culture coffee bar will be located on the ground floor of the commercial construction at the corner of West 13th Avenue and Patterson Street in Eugene, OR. The company has secured a one-year lease of the vacant 2,500 square feet premises antecedently occupied by a hair salon. The lease contract has an option of renewal for three years at a fixed rate that Java Culture will execute depending on the fiscal strength of its business.The floor plan will include a 200 square feet back built in bed and a 2,300 square feet coffee bar, which will include a seating area with 15 tables, a kitchen, storage area and twain bathrooms. The space in the coffee bar will be approximately distributed the following way1,260 square feet (i.e., 55% of the total) for the seating area, 600 square feet (26%) for the production area, and the remaining 440 square feet (19%) for the customer service area.This property is located in a commercial area within a walking distance from the University of Oregon campus on the corner of a major thoroughfare connecting affluent South Eugene neighborhood with the busy downtown commercial area. The commercially zoned premises have the necessary water and electricity hookups and will require only minor remodeling to accommodate the espresso bar,kitchen and storage area. The coffee debar open and clean interior design with modern wooden decor will capture the quality of the served beverages and snacks, and will be in-line with the establishments positioning as an eclectic place where people can relax and enjoy their cup of coffee. The clear window displays, through which passerby will be able to see customers enjoying their beverages, and outside electric signs will be aimed to grab the attention of the customer traffic.3.0 ProductsJava Culture will offer its customers the best tasting coffee beverages in the area. This will be achieved by using high-quality in gredients and strictly following preparation guidelines. The store layout, menu listings and merchandising activities will be foc manipulationd on maximizing the sales of higher margin espresso drinks. A ample with the espresso drinks, brewed coffee and teas, as well as some recreation beverages, will be sold in the coffee bar. Java Culture will also offer its clients pastries, small salads and sandwiches. For the gourmet clientele that prefers to prepare its coffee at home, Java Culture will also be selling coffee beans.The menu offerings will be supplemented by free books and magazines that customers can read inside the coffee bar.3.1 Product DescriptionThe menu of the Java Culture coffee bar will be built around espresso-based coffee drinks such as lattes, mochas, cappuccinos, etc. Each of the espresso-based drinks will be offered with whole, skimmed, or soy milk. Each of these coffee beverages is based on a shot of espresso, which is prepared in the espresso machine by forcing h eated water through ground coffee at high pressure. Such espresso shots are combined with steamed milk and/or other additives like cocoa, caramel, etc., to prepare the espresso-based beverages. Proper preparation techniques are of paramount importance for such drinks. A minor deviation from the amount of coffee in the shot, the size of the coffee particles, the temperature of milk, etc., can negatively affect the quality of the prepared drink.3.2 sales LiteratureTwo thousand flyers will be distributed in the side by side(predicate) neighborhood, on the University campus, at the malls and in the selected office buildings within two weeks prior to the opening of Java Culture. Subsequently, free postcards with Java Culture endorsement will be printed to increase the company visibility among the patrons.4.0 Market Analysis SummaryU.S. coffee consumption has shown steady development, with gourmet coffee having the strongest growth. Coffee drinkers in the Pacific northwestern United St ates are among the most demanding ones. They favor well-brewed gourmet coffee drinks and demand great service. Eugene, OR, with its liberal and outgoing populace and long rainy winter, has traditionally been a great place for coffee establishments. Java Culture will strive to build a loyal customer base by offering a great tasting coffee in a relaxing environment of its coffee bar located close to the bustling University of Oregon campus.4.1 Market SegmentationJava Culture will focus its merchandise activities on reaching the University students and faculty, people working in offices located close to the coffee bar and on forward-looking 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 crosswise 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 custom er audience.The chart and table below outline the total market potential (in number of customers) of gourmet coffee drinkers in Eugene, OR.Java Culture will cater to people who want to get their daily cup of great-tasting coffee in a relaxing atmosphere. Such customers vary in age, although our location close to the University campus means that most of our clientele will be college students and faculty. Our market research shows that theseare discerning customers that gravitate towards better tasting coffee. Furthermore, a lot of college students consider coffee bars to be a convenient studying or meeting location, where they can read or meet with peers without the necessity to pay cover charges. For us, this will provide a unique surmisal for building a loyal client base.4.2.1 Market NeedsGeneral trend toward quality among U.S. consumers definitely plays an important role in the recent growth in gourmet coffee. Additionally, such factors as desire for small indulgencies, for somet hing more exotic and unique, provide a good selling opportunity for coffee bars.4.3 I Industry AnalysisCoffee consumption has shown a steady 2.5% growth rate in the United States over the cobblers last decade. In 1994, total sales of coffee were approximately $7.5 billion with gourmet coffee representing 33% (or $2.5 billion) of that. The retail coffee industry is flourishing in the U.S. Pacific Northwest. The local climate, with a long rainy season, is very conducive for the consumption of hot non-alcoholic beverages. At the same time, hot dry summers drive people into cafes to order iced drinks. Further, coffee has really travel a part of the lifestyle in the Pacific Northwest. Its discerning coffee drinkers are in favor of well-prepared, strong coffee-based beverages, which they can consume in arelaxing environment.4. 4 Competition and Buying patternCompetitionAccording to the 1997 Oregon Food service Statistics (NAICS 72), Eugene had 45 established snack non-alcoholic beverage bars (NAICS 722213) with total sales of $14.2 million. Among other establishments that offer coffee drinks to their customers are most of Eugenes limited- and full-service restaurants. Java Cultures direct competitors will be other coffee bars located near the University of Oregon campus.These include Starbucks, coffee bar Roma, The UO Bookstore, and other Food service establishments that offer coffee. Starbucks will definitely be one of the major competitors because of its strong financial position and established marketing and operational practices. However, despite of Starbucks entrenched market position, many customers favor smaller, independent establishments that offer cozy atmosphere and good coffee at affordable prices. Cafe Roma is a good example of such competition.We estimate that Starbucks holds approximately 35% market share in that neighborhood, Cafe Roma appeals to 25% of customers, The UO Bookstore caters to another 10%, with the remaining market share split among other establishments. Java Culture will position itself as a unique coffee bar that not only offers the best tasting coffee and pastries but also provides home-like, cozy and comfortable environment, which established incorporated establishments lack. We will cater to customers bodies and minds, which will help us grow our market share in this competitive market.Buying PatternsThe major reason for the customers to return to a specific coffee bar is a great tasting coffee, quick service and pleasant atmosphere. Although, as stated before, coffee consumption is uniform crosswise different income segments, Java Culture will price its product offerings competitively. We strongly believe that selling coffee with a great service in a nice setting will help us build a strong base of loyal clientele.5.0 Strategy and Implementation SummaryJava Cultures marketing dodging will be focused at getting new customers, retaining the existing customers, getting customers to spend more and come back more often. Establishing a loyal customer base is of a paramount importance since such customer core will not only generate most of the sales but also will provide favorable referrals.5.1 Competitive EdgeJava Culture will position itself as unique coffee bar where its patrons can not only enjoy a cup of perfectly brewed coffee but also spend their time in an ambient environment. convenient sofas and chairs, dimmed light and quiet relaxing music will help the customers to relax from the daily stresses and will differentiate Java Culture from incumbent competitors.5.2 Sales StrategyJava Culture baristas will handle the sales transactions. To speed up the customer service, at least two employees will be servicing clientswhile one employee will be preparing the customers order, the other one will be taking care of the sales transaction. All sales data logged on the computerized point-of-sale terminal will be later analyzed for marketing purposes.In order to build up its client base, Java Culture will use banners and fliers, utilize customer referrals and cross-promotions with other businesses in the community. At the same time, customer retention programs will be used to make sure the customers are overture back and spending more at the coffee bar.5.3 Sales ForecastFood costs are assumed at 25% for coffee beverages and 50% for retail beans and pastries. Proximity to the University campus will dictate certain sales seasonality with revenues slightly decreasing during the school vacation periods.The chart and table below outline our project sales forecast for the next three years.6.0 Management SummaryJava Culture is majority-owned by Arthur Garfield and James Polk. Mr. Garfield holds a Bachelors Degree in Business administration from the University of ZYX. Hes worked for several years as an independent business consultant. Previously, he owned the ABC Travel Agency, which he profitably sold four years ago. Mr. Garfield has drawn-out business contacts in Orego n that he will leverage to help his new venture succeed. Mr. Polk has a Bachelors Degree in Psychology from the XYZ State University. For the last five years he has worked as a manager of DEF Ristorante, a successful Italian restaurant in Portland, OR. Under Mr. Polks management, the restaurant has consistently change magnitude sales while maintaining a lower than average level of operating expenses.However, because of the investors other commitments they will not be involved into the daily management decisions at Java Culture. A professional manager ($35,000/yr) will be hired who will oversee all the coffee bar operations. Two full-time baristas ($25,000/yr each) will be in charge of coffee preparation. Four more part-time employees will be hired to fulfill the staffing needs. In the second and troika year of operation one more part-time employee will be hired to handle the increased sales volume.6.1 Management TeamA full-time manager will be hired to oversee the daily operations at Java Culture. The candidate (whos name is withheld due to his current employment commitment) has had three years of managerial experience in the definitely industry in Oregon. This persons responsibilities will include managing the staff, ordering inventory, dealing with suppliers, developing a marketing strategy and perform other daily managerial duties. We believe that our candidate has the right experience for this role. A profit-sharing arrangement for the manager may be considered based on the first year operational results.6.2 Management Team GapsDespite the owners and managers experience in the definitely industry, the company will retain the consulting services of ABC Espresso Services, the consultants who have helped to develop the business idea for Java Culture. This company has over twenty years of experience in the retail coffee industry and has successfully overt dozens of coffee bars across the U.S. Consultants will be primarily used for market research, customer s atisfaction surveys and to provide additional input into the military rating of the new business opportunities.7.0 Financial PlanJava Culture will capitalize on the strong demand for high-quality gourmet coffee. The owners have provided the company with equal start-up capital. With successful management aimed at establishing and growing a loyal customer base, the company will see its net worth doubling in two years. Java Culture will maintain a healthy 65% gross margin, which combined with reasonable operating expenses, will provide enough interchange to finance further growth.