Coffee Shop Business Plan

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Java Culture

Financial Plan

Forecast

Key Assumptions

  1. We assume a steadily growing potential market in line with growth at the university, trends. 
  2. We assume industry standard gross margins
  3. We assume relative status quo regarding technology and trends in the coffee industry

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of Funds

The start-up expenses include an estimated $17,000 consisting of several items:

  • Legal expenses for obtaining licenses and permits as well as the accounting services totaling $1,500.
  • Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium of $1,500.
  • Premises remodeling in the amount of $10,000.
  • Other start-up expenses including website ($4,000) and phone and utility deposits ($2,500).

The required start-up assets of $71,000 include:

  • Plates, glasses, etc. worth approximately $2,000
  • Equipment for the total amount of approximately $69,000
    • Espresso machine
    • Coffee maker
    • Coffee grinder 
    • Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.)
    • Storage hardware (bins, utensil rack, shelves, food case) 
    • Counter area equipment (counter top, sink, ice machine, etc.)
    • Serving area equipment (plates, glasses, flatware)
    • Store equipment (cash register, security, ventilation, signage) 
    • Office equipment (PC, fax/printer, phone, furniture, file cabinets) 
    • Other miscellaneous expenses

Sources of Funds

Funding for the company comes from two major sources–owners’ investments and bank loans. Two major owners, Arthur Garfield and James Polk, have contributed $70,000 and $30,00 respectively. All other investors have contributed $40,000, which brings the total investments to $140,000. The remaining $30,000 needed to cover the start-up expenses and assets came from the two bank loans–a one-year loan in the amount of $10,000 and a long-term (five years) loan of $20,000. Both loans were secured through the Bank of America. Thus, total start-up loss is assumed in the amount of $27,680.

Statements

Projected Profit & Loss

FY2019 FY2020 FY2021
Gross Margin $336,606 $392,700 $445,800
Operating Expenses
Salaries & Wages $193,200 $205,860 $219,453
Employee Related Expenses $38,640 $41,172 $43,891
Rent $36,000 $38,000 $42,000
Marketing $28,051 $32,725 $37,150
Utilities, phones, Internet etc. $6,000 $6,000 $6,000
Interest Incurred $951 $583 $427
Depreciation and Amortization $12,000 $12,000 $12,000
Gain or Loss from Sale of Assets
Income Taxes $3,265 $8,454 $12,732
Total Expenses $542,511 $606,593 $670,853
Net Profit $18,499 $47,907 $72,147

Projected Balance Sheet

Starting Balances FY2019 FY2020 FY2021
Cash $67,000 $80,234 $133,240 $214,467
Accounts Receivable $0 $0 $0 $0
Inventory $16,000 $21,815 $24,765 $24,765
Other Current Assets
Total Current Assets $83,000 $102,048 $158,005 $239,232
Long-Term Assets $60,000 $60,000 $60,000 $60,000
Accumulated Depreciation ($12,000) ($24,000) ($36,000)
Total Long-Term Assets $60,000 $48,000 $36,000 $24,000
Accounts Payable $0 $0 $0
Income Taxes Payable $2,232 $2,116 $3,184
Sales Taxes Payable $0 $0 $0
Short-Term Debt $13,683 $3,833 $3,989 $4,152
Prepaid Revenue
Total Current Liabilities $13,683 $6,065 $6,105 $7,336
Long-Term Debt $16,317 $12,484 $8,495 $4,343
Long-Term Liabilities $16,317 $12,484 $8,495 $4,343
Paid-In Capital $140,000 $140,000 $140,000 $140,000
Retained Earnings ($27,000) ($27,000) ($8,501) $39,406
Earnings $18,499 $47,906 $72,148

Projected Cash Flow Statement

FY2019 FY2020 FY2021
Net Cash Flow from Operations
Net Profit $18,499 $47,907 $72,147
Depreciation & Amortization $12,000 $12,000 $12,000
Change in Accounts Receivable $0 $0 $0
Change in Inventory ($5,815) ($2,950) $0
Change in Accounts Payable $0 $0 $0
Change in Income Tax Payable $2,232 ($116) $1,068
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt ($9,850) $156 $163
Change in Long-Term Debt ($3,833) ($3,989) ($4,152)
Cash at Beginning of Period $67,000 $80,234 $133,240
Net Change in Cash $13,234 $53,007 $81,226
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