The Daily Perc

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Coffee Kiosk Business Plan

Management Summary

The Daily Perc is a relatively flat organization. Overhead for management will be kept to a minimum and all senior managers will be "hands-on" workers. There is no intention of having a top-heavy organization that drains profits and complicates decisions.

At the zenith of this three-year plan, there will be four "Executive" positions: chief operating officer, chief financial officer, chief information officer, and director of marketing. There will be other mid-management positions, such as district managers for every four Drive-thrus, and a facilities manager to oversee the maintenance and stocking of the Mobile Cafes, as well as overseeing the maintenance and replacement of equipment in the Drive-thru facilities.

6.1 Management Team

The Daily Perc has selected Mr. Barton Fisher to perform the duties of chief operating officer. Bart has a highly entrepreneurial spirit and has already started a company from scratch (NetCom Services, Inc.) that ran in the black within three months of inception, and paid off all initial debt within six months. Upon leaving NSI in April 2001, the company had again paid off all debt and was running a profit monthly. Combine his experience, leadership, and desire with three years of research in speciality drinks and drive-thru service, and TDP knows that Bart is the individual who will get the company out of the gate and up to full speed for a long time to come.

Ms. Mary Jamison has been selected to fulfill the position of bookkeeper and office manager. Mary has been the business administrator of Jones International, Inc. for the past four years. Jones is a $4 million company that retails vitamins and other betterment products. Over those four years, Mary has written numerous corporate policies and directed the financial reporting and reconciliation. The Daily Perc considers Mary to be a great addition to the team when she becomes available in November of 2001. Until that time, she will be working with Mr. Fisher on a part-time basis to help establish the corporate accounts and policies.

Mr. Tony Guy has been selected to perform the duties of corporate events coordinator on a part time basis. Mr. Guy has over five years in the business-to-business sales realm. Last year he was responsible for over $250,000 in sales of promotional material to corporate and educational clients.

Mr. Chuck McNulty has been selected to fulfill the position of warehouse/trailer manager. Chuck has been working for Nabisco, Inc. as a service representative for over ten years. His experience in account services, merchandising, and inventory control is a welcome addition to The Daily Perc team. Chuck will use his knowledge in conjunction with the rest of the team to establish inventory and warehouse policies. The warehouse manager is responsible for inventory of all products sold by The Daily Perc. Some merchandising experience is a welcome addition. Training in the First In First Out (FIFO) style of inventory control is a requirement. Also, knowledge of ergonomics and health issues would be important. Chuck's domain will be the headquarters, the trailers, and the drive-thrus--ensuring that minimum and maximum inventories are maintained. Working with the mobile and drive-thru Baristas will be integral to his task as well.

6.2 Management Team Gaps

The Daily Perc knows that it is going to require several quality management team members over the next three years, beginning with a district manager for every four Drive-thrus. This person will oversee the quality of product, the training of the Baristas, the inventory management, and customer satisfaction. Ideally, as The Daily Perc grows, it will be able to promote from within for this position. This individual will be responsible for the operation of up to four drive-thrus under his/her management. They will be required to visit between locations and possibly even join administrative personnel on training or marketing travel. Clearly, as the need arises, these individuals will ideally be selected from the Mobile Cafe or Drive-Thru team.

By the beginning of the third year, The Daily Perc will hire three key senior managers. They are: a chief financial officer, a chief information officer, and a director of marketing. The role of each of these individuals will be discussed in subsequent sections of this plan.

6.3 Organizational Structure

The organization will be a relatively flat one, since the majority of personnel are involved in production and there will be a relatively low headcount in management.

There are three functioning groups within the company: Production, Sales and Marketing, and General and Administrative. For purposes of this plan--and to show the details of adding senior level management--The Daily Perc has broken management down as a separate segment, but it is an integral part of the General and Administrative function.

Production involves the Baristas, or Customer Service Specialists, who will be manning the Drive-thrus and Mobile Cafes and blending the beverages for the customers. Sales and Marketing will handle the promotion and scheduling of the Mobile Cafes, as well as the promotion of the Drive-thrus and the Community Contribution program. General and Administrative manage the facilities, equipment, inventory, payroll, and other basic, operational processes.

6.4 Personnel Plan

The Daily Perc expects the first year to be rather lean, since there will only be two locations and one mobile unit--none of which will be deployed for the entire year. The total headcount for the first year, including management, administrative support, and customer service (production), will be 15, with a payroll and payroll burden total expenditure as shown in the following table and in the monthly breakdowns appendices.

The second year, with the addition of two Drive-thrus and two mobile units, The Daily Perc will add customer service personnel, as well as a district manager and some additional support staff at headquarters, including an Inventory Clerk, Equipment Technician, and administrative support. The headcount will increase by nearly 100% in the second year to 29, with a proportionale increase in payroll of and payroll burden.

The third year will see the most dramatic growth in headcount, due to the addition of nine Drive-thrus and another mobile unit. In the third year, there will also be an increase of 180% over the previous year. Total payroll and payroll burden for the third year will reflect this, as well as the significant increase in the senior management team, with the addition of a chief financial officer, a chief information officer, and a director of marketing. There will also be a second and third district manager, and a corporate events sales executive. Total personnel will reach 81.

The chief financial officer will be brought on to oversee the increase in numbers of retail outlets and to manage a dramatically more detailed P&L statement and to manage the Balance Sheet. The chief information officer will be brought in to help us with the deployment of a Point-of-Sale computerized cash register system that will make tracking and managing receipts and charitable contributions more robust. Ideally, this individual will have a large amount of point of sale and Internet experience. Specifically, how to tie in POS systems to the Internet and inventory controls. Also, knowledge in establishing technology guidelines for the company and franchisees in the future. This individual will also be added in fiscal year three.

The director of marketing will be charged with managing the relationships with advertising agencies, public relations firms, the media, and our website.

Personnel Plan
Year 1 Year 2 Year 3
Production Personnel
Drive-thru Team $135,474 $439,250 $1,098,650
Mobile Cafe Team $9,400 $172,800 $225,600
Equipment Care Specialist (Headquarters) $0 $22,000 $77,000
Other $0 $12,000 $24,000
Subtotal $144,874 $646,050 $1,425,250
Sales and Marketing Personnel
District Manager (Four Drive-thrus) $0 $22,000 $77,000
Corporate Events Sales Exec $0 $0 $36,000
Director of Marketing $0 $0 $72,000
Other $0 $0 $0
Subtotal $0 $22,000 $185,000
General and Administrative Personnel
Bookkeeper/Office Administrator $24,500 $46,000 $54,000
Warehouse/Site Manager $7,000 $42,000 $48,000
Inventory Clerk $0 $12,000 $42,000
Other $0 $6,000 $12,000
Subtotal $31,500 $106,000 $156,000
Other Personnel
Chief Operating Officer $66,000 $72,000 $78,000
Chief Financial Officer $0 $0 $96,000
Chief Information Officer $0 $0 $84,000
Other $0 $0 $0
Subtotal $66,000 $72,000 $258,000
Total People 15 29 81
Total Payroll $242,374 $846,050 $2,024,250