The Coffee Warehouse

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Coffee Distribution Business Plan

Sales and Marketing

The unique aspects of our business include individual product selection, quality assurance, and high-quality full service distribution. Our strategy is to focus 100% of our efforts on the market for espresso supplies in the Spokane and Northern Idaho area. By focusing all of our effort and energy on this particular area, we expect to quickly develop and maintain a leadership position. The Coffee Warehouse's key personnel will stay in contact with our customers, and will be able to respond to changes in this market much faster than our competitors.

The Coffee Warehouse will offer the best, most highly personalized service in the marketplace. Being a small, owner-operated company, we intend to use this to our advantage to be absolutely certain that every one of our customers receive excellent service. We will go out of our way to make sure that our customers know that they truly matter to us.  Sales reps and in-house personnel who deal with customers will be carefully trained and given wide latitude for insuring that customers are always satisfied.

5.1 Marketing Strategy

Our basic marketing strategy is to work with customers on a one-to-one basis to ensure their supply needs are being met and help develop unique marketing programs for each of them. We intend to prioritize customer service and make it a key component of our marketing programs. We believe that providing our customers with what they want, when and how they want it, is the key to repeat business and positive word-of-mouth advertising. Because we want to develop close working relationships with our customers, we want to establish accounts in as personable a way as possible. It is for this reason that we will overwhelmingly emphasize in-person sales calls to build accounts.

We will closely integrate all of our marketing and sales efforts to project a consistent image of our company and a consistent positioning of our products and services. We will build this image around our name "The Coffee Warehouse, Inc." and emphasize to customers the high-quality service that is behind this name.

To support our marketing initiatives and product knowledge, we will attend as many area conventions and trade shows as possible to ensure we are offering the most up-to-date market trend information.

5.2 Promotion Strategy

Relationships are the key to success in the distribution business. Personal selling will remain our most important means of promotion. Both Steve and Jennifer Smith will lead this effort - Steve, with his skill and experience in sales and distribution, and Jennifer in customer service and relations.  In addition to personal selling, The Coffee Warehouse has identified several other means of advertising and publicity.

The Coffee Warehouse will send news releases to local media and press, as well as trade magazines to try to get product and company feature coverage in front of the eyes of our customers - as well as the end consumer. We will also produce a few generic press releases about the products we are distributing for our customers to use toward publicity coverage for their businesses in local publications such as the Spokesman, The Inlander and Local Planet.

Third, we shall have a monthly newsletter for current of potential customers. This newsletter will highlight new and current trends in the industry, upcoming conventions and trade shows, offer promotions and special deals, as well as provide new recipes, fun tips and other information that can be used in their business. We will also highlight not just our products, but also display ideas and success stories of other business in the industry.   As a more straight forward advertising effort, The Coffee Warehouse will feature an advertisement in the Yellow Pages, frequent ads in the Spokesman Review, the Inlander, and the Local Planet, as well as participation in networking, local trade shows, and personal word-of-mouth advertising.

5.3 Distribution Strategy

To begin, The Coffee Warehouse will operate two delivery trucks with a third vehicle for special deliveries between scheduled delivery days.  Deliveries will be made Monday through Friday, and will be strategically routed to minimize travel time and fuel costs - while maximizing production.   On average, we will service 20-30 accounts per day, with deliveries to each account twice a week. As the number of accounts increase, the need for additional delivery trucks will continue to be evaluated. With each additional delivery truck, routes will be restructured to maintain maximum efficiency.

5.4 Sales Strategy

Distribution sales are dependent on repeat business, therefore the sales strategy for The Coffee Warehouse is based on personal, consistent sales contact, with a high emphasis on customer service and relations.   Because we are a new distributor, we understand that we will have to prove our worth to our customers in order to earn their respect and business. Both of the owners, Steve and Jennifer, will make personal calls on potential customers to review our product line and services, give general information on our company, and discuss how we feel we can help them succeed in their business.

The Coffee Warehouse will begin operations with two full-time delivery/sales representatives, who will be responsible for providing full service and delivery to current customers, but also make sales calls for potential new business. This delivery/sales representatives will receive a base salary, with commission on qualified sales, as well as bonuses for new acquired business.  Customers will be scheduled for a pre-arranged delivery day once or twice a week, depending on the quantity and timeline of product needed. Product orders can be placed in a number of ways to help facilitate the process:

  • Phoned Orders: Customers can easily phone orders into our office, up until 2:30 p.m. of the afternoon prior to their scheduled delivery day.
  • Faxed Orders: Customers can fax in a completed product order sheet, with the same deadline as phoned orders.
  • Tel-Sell: Customers may choose to have a representative from the office call them the day prior to their scheduled delivery to check product quantities and assist them in placing their order.

We understand the hectic schedule of a small business, so if a customer fails to call or fax their weekly order, they will receive a courtesy call from our office to verify that an order is not needed.

5.5 Sales Forecast

As indicated in the table, our sales are forecasted to increase rapidly, with an annual growth rate of approximately 30%.

Sales Forecast
Year 1 Year 2 Year 3
Espresso Syrups $415,362 $477,666 $549,316
Chocolate & Caramel Sauces $275,852 $311,713 $352,235
Specialty Beverage Mixes $176,660 $203,158 $233,632
Energy Drinks $44,372 $51,028 $58,683
Concentrated Milk $113,816 $130,889 $150,523
Paper Supplies $1,185,285 $1,363,078 $1,567,540
Marketing $18,305 $21,051 $24,208
Total Sales $2,229,652 $2,558,584 $2,936,137
Direct Cost of Sales Year 1 Year 2 Year 3
Espresso Syrups $345,347 $397,149 $456,722
Chocolate & Caramel Sauces $244,798 $276,622 $312,583
Specialty Beverage Mixes $134,440 $154,606 $177,797
Energy Drinks $36,542 $42,023 $48,327
Concentrated Milk $97,919 $112,607 $129,498
Paper Supplies $888,964 $1,022,308 $1,175,655
Marketing $6,540 $7,521 $8,649
Subtotal Direct Cost of Sales $1,754,550 $2,012,837 $2,309,230

5.6 Milestones

The following table and chart are the important milestones for The Coffee Warehouse.
Milestone Start Date End Date Budget Manager Department
Market/Trade Research 3/15/2003 5/15/2003 $150 SDS / JLS Marketing
Logo Design/Marketing 4/15/2003 5/15/2003 $1,300 JLS Marketing
Complete Business Plan 4/15/2003 5/30/2003 $90 JLS Marketing
Product/Pricing Comparison 4/15/2003 5/15/2003 $150 SDS / JLS Marketing
Finalize Potential Client List 5/1/2003 5/15/2003 $0 JLS Marketing
Licensing/Incorporation 5/15/2003 6/15/2003 $200 JLS Marketing
Secure Product Line 5/15/2003 6/15/2003 $0 JLS Marketing
Research/Secure Financing 5/15/2003 7/15/2003 $0 SDS / JLS Marketing
Warehouse Selection/Buildout 5/15/2003 6/15/2003 $0 SDS / JLS Marketing
Leasehold Improvements 7/1/2003 8/1/2003 $5,000 SDS / JLS Web
Delivery Vehicle Selection 6/1/2003 6/15/2003 $0 SDS Web
Develop Routing 6/15/2003 7/15/2003 $100 SDS Department
Hire Delivery/Sales Personnel 7/1/2003 7/15/2003 $100 SDS Department
Office Equipment/Computer/Supplies 7/1/2003 8/1/2003 $5,000 JLS Department
Order Beginning Inventory 7/10/2003 7/20/2003 $20,000 SDS / JLS Department
Press Releases/Advertising 7/1/2003 8/1/2003 $250 JLS Department
Organize Grand Opening Trade Show 8/1/2003 8/10/2003 $3,000 JLS Department
Totals $35,340