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Dark Roast Java

Executive Summary

Opportunity

Problem

Every day, millions of Americans stop for an espresso-based coffee drink. People who would not have dreamed of spending more than 50 cents for a cup of coffee a few years ago now gladly pay $3 to $5 for their cappuccino, mocha latte or vanilla ice blended drink.

The specialty-coffee business is growing at a healthy pace. During the past 20 years, there has not been a single year, despite war and recession, in which specialty coffee sales have not grown. In many years the increase has been in double digits. In addition, no coffeehouse chains have failed during this time, although the list of casualties in other industries is quite long.

Solution

A niche exists that has yet to be filled for a high-volume, upscale, quality-driven coffeehouse with a warm, inviting atmosphere. Dark Roast Java meets this need and fills this niche. We offer high-quality products in an upscale environment. Furthermore, our high-profile location in Pleasantville provides a mixed customer base that will maintain high levels of business in every season, at all times of the day, every day of the week.

Market

Despite economic downturns in recent years the specialty coffee business has been a bright spot. While literally hundreds of businesses in many categories are facing poor sales, negative balance sheets and even bankruptcy, coffee chains continue to show strong growth.

It’s clear that America’s love for good coffee continues during good times and bad.

Pleasantville:  The Perfect Launch Market
By launching Dark Roast Java in the Pleasantville market we maximize our potential for success due to several factors:

  • The highly affluent local population
  • Year-round tourist activity
  • Ever-changing upscale student population
  • Excellent auto and pedestrian traffic by our location
  • Low media costs
  • High number of local special events
  • Prime site location

Dark Roast Java is located at what is arguably one of the best locations for a coffeehouse in Pleasantville—in the heart of the tourist and business district, adjacent to fine dining and shopping, next to the historic Egyptian Theatre and just steps from the busiest intersection in town.

Dark Roast Java Coffee has all the ingredients necessary for immediate success.

Competition

The specialty retail coffee business as we know it today began in 1982 after Howard Schultz purchased the Starbucks name and began the expansion of the modern Starbucks chain. Prior to his transformation of the business, Starbucks sold only whole bean coffee.

Coffeehouses in America have existed since the 1600’s, and the coffeehouse concept is more than 400 years old. In the United States, even as recently as the 1970’s, coffeehouses have been primarily independent businesses, typically with an eclectic Bohemian style.

Why Us?

Our goal is to be the coffeehouse of choice for the local Pleasantville community, downtown business workers, tourists who visit the city, and students, by providing a higher quality experience than any competitor. As a result, we intend to create coffeehouses that quickly achieve profitability and sustain an attractive rate of return (20% or more annually) for our investors.

We also want to make our contribution to the welfare of the local community by supporting charitable and civic activities. We will support the farmers who grow our coffee by using Fair Trade, Sustainable Production and Organic products whenever possible.

Dark Roast Java also awards its business to as many local suppliers as possible, keeping the business in the community or, at the least, in the state.

Expectations

Forecast

The company anticipates rapid acceptance of the Dark Roast Java concept in Pleasantville, with revenues of $750,000+ in the first fiscal year, rising to more than $1,000,000+ in year three. We will be able to start giving investors dividends by year 4

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

We will get investors to put in $250,000 to get us up and  running.

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Opportunity

Problem & Solution

Problem Worth Solving

Thanks primarily to Starbucks, within the past 20 years the coffeehouse has become a familiar feature of American life. Every day, millions of Americans stop for an espresso-based coffee drink. People who would not have dreamed of spending more than 50 cents for a cup of coffee a few years ago now gladly pay $3 to $5 for their cappuccino, mocha latte or vanilla ice blended drink.

The specialty-coffee business is growing at a healthy pace. During the past 20 years, there has not been a single year, despite war and recession, in which specialty coffee sales have not grown. In many years the increase has been in double digits. In addition, no coffeehouse chains have failed during this time, although the list of casualties in other industries is quite long.

Starbucks, The Coffee Bean, Peet’s, Diedrich’s and other major chains serve average quality drinks in establishments that have the same generic design appearance. Indeed, Starbucks and The Coffee Bean are often referred to as "fast food" coffeehouses due to their "cookie cutter" design. Now that Americans’ coffee preferences have broadened and matured, many are asking for more from their coffeehouse.

Our Solution

Dark Roast Java launches with its first coffeehouse located in downtown Pleasantville. Dark Roast Java will offer residents and visitors a totally new style of coffeehouse – one offering a uniquely flavorful coffee drink and a comfortable, upscale environment at which to socialize, relax or work.

  • Variety: No other coffeehouse in the area will provide the range of coffee drinks, tea, cocoa, juice, smoothies and other products that Dark Roast Java does.
  • Location: Dark Roast Java will be located in the prime section of downtown Pleasantville in the heart of the shopping and entertainment district. Dark Roast Java locations are designed for high volume year round, with revenues and profits to match.
  • Expansion: Assuming this store is successful, it will be the first of a chain of Dark Roast Java coffeehouses located in markets that have similar demographic profiles, significant traffic by the store, year-round tourist activity and a sizeable student population.

Target Market

Market Size & Segments

Market Segmentation

Dark Roast Java’s customer base in Pleasantville is comprised of five target groups.

  1. Affluent local residents
  2. Tourists
  3. Local business people
  4. Students
  5. Travelers passing through

These groups are all potentially strong customer segments. The benefit of this mix of customers is that it helps maintain 

consistent business throughout the year
. For example, while tourism is strong all year long in Pleasantville, it peaks during the summer months. Conversely, the student population is not as strong during the summer as it is from September through June of each year.

The other customer segments (local residents, local business and pass-through traffic on US 66) provide a consistent foundation all year long.

Also, by appealing to several market segments, Dark Roast Java does not become overly dependent on any single consumer group. For example, several local coffeehouses with primarily student customers do poorly during the non-school months. They must also market themselves anew each year to the incoming students. Dark Roast Java will avoid these peaks and valleys in business with a mix of customers.

  • Affluent locals. Within five miles of Dark Roast Java are 200,000 of the most affluent people in America. Homes in adjacent Niceburg sell for $1 million to $50 million. Key influencers, trendsetters, artists, writers and celebrities have homes in Pleasantville.
  • Tourists. More than 5,000,000 tourists visit Pleasantville every year. Most will pass by the Dark Roast Java location. Tourist come to "America’s Riviera" for the beaches, shopping, dining and nearby vineyards.
  • Local business people. Dark Roast Java is located on the corner of ‘A’ Street and First Avenue in the heart of the prime downtown business district. It’s across from the exclusive, chic, Descarte (I Spend, Therefore I Am) department store, and one block from the number one shopping destination in Pleasantville, Lucre Galerie. ‘A’ Street and Frist Avenue are the two most heavily traveled streets in Pleasantville.
  • Students. Pleasantville is home to a major branch of the State University as well as dozens of other schools, including many prestigious private schools and academies. Pleasantville High School is less than a mile from Dark Roast Java.
  • Travelers on US 66. One of the state’s two major north/south routes passes through Pleasantville. According to Dept of Transportation, more than 35 million auto trips will pass through the city. Many of these travelers will stop for a meal, to refuel and have a cup of coffee. US 66 is also a heavily traveled commuter route to Shorewood and Beachey Head to the south.

Sources:  Department of Transforation, State University, Pleasantville Chamber of Commerce.

Target Market Segment Strategy

Overall, our strategy is to maintain a constantly high customer count by leveraging our appeal to five groups of potential customers.

Local Residents. Approximately 200,000 people live within five miles of our Dark Roast Java location. The most affluent of these live even closer, within three miles. It is a short 5 minute drive to Dark Roast Java for most of our potential local customers. Excellent public parking is available within 100 yards.

Local customers form the loyal core of our business. We will reach out to them through local marketing, involvement in the Chamber of Commerce, support of local charitable organizations and sponsorship of events and youth sports teams.

Tourists. Pleasantville has excellent year-round tourist activity. About 5 million people will visit the area during the next year. While hotels are virtually sold out during the summer months, tourism all year is exceptionally strong. This is due in large part to the temperate climate, weekend or day-trip visitors from the greater Ontopolis area and an unusually large number of special events (e.g. film festivals, concerts, art shows) scheduled throughout the year.

With a troubled economy and fears of terrorism, more people are opting for the relatively inexpensive, easy and safe short trip to Pleasantville for recreation. And, according to the Chamber of Commerce, 90% of all tourists visiting Pleasantville will pass by the Dark Roast Java location.

We will target these potential customers with ads in local tourism guides.

Local businesses. Many local businesses, both private and government, are within two blocks of Dark Roast Java. Lucre Galerie, the prime shopping center of Pleasantville, is one block away. The county courthouse is two blocks away. Dark Roast Java is in the heart of the shopping and dining area.

Because much of the employee parking is out of the immediate area with shuttle service to downtown, most people stay near their place of employment during breakfast, lunch and for after-work relaxing. A significant number of these local business people find Dark Roast Java an inviting and convenient destination.

We also offer coffee service to local restaurants, night spots and businesses. Coffee service brings in additional revenue and promotes Dark Roast Java among employees at these businesses.

We will also reach business customers through Chamber of Commerce activities and by personally visiting the shops and businesses to distribute discount coupons and menus.

Students. The area has more than 30,000 students in several schools, including nearby City College and State University. Students, most of whom are under the drinking age, have few places they can go to meet their friends. Coffeehouses have proven to be very popular with students—even high school students—as an "in" place to go that’s also affordable.

To reach students we offer special student discount cards, pass out free coffee coupons at student events and offer entertainment on weekends.

Students represent an excellent customer segment for several reasons:

  • Students bring an energy and youth to the coffeehouse

  • By attracting students we generate excellent word-of-mouth

  • Students represent a large base of potential part-time employees

  • Often under the drinking age, students need an affordable place to hang out with their friends

Travelers on US 66. The Dept of Transportation estimates that there will be 35 million auto trips through Pleasantville this year, a number that is increasing every year. US 66 is one of two major freeways in the state and the one favored by travelers who want to take a bit more time and make a few stops during their trip. It’s also a major commuter route to the cities to the south in Sunshine County.

Our primary method of reaching this target customer group will be our participation as a AAA member, offering a 20% discount on all coffee and tea drinks when AAA members show their membership card.

We also conduct PR activities in media outside the local market to expose the Dark Roast Java name to a wider state and national audience.

Source:  Dept of Transportation, Pleasantville Chamber of Commerce, US Census Bureau.

Competition

Current Alternatives

4.3.1 Competitive Comparison

"Until everybody can walk to a coffeehouse and get a properly prepared espresso drink, we’re not even approaching market saturation." 

— Mike Ferguson, Marketing & Communications Director
Specialty Coffee Association, Long Beach. 2002.

Leaders in the specialty coffee chain category in the United States include:

Starbucks (6,300 stores). Started the specialty coffee chain phenomena in America in 1982. 99% are company owned. Revenues exceeded $6 billion in 2002. Average store gross revenue is $805,000. Now in 30 countries. Same store sales increased by 10% in 2002.

Caribou Coffee (260 stores). Second largest all company-owned chain. Founded in 1992 in Minneapolis.

Tully’s (103 stores). The third largest company-owned chain. Another Seattle-born company. The only coffeehouse chain that has not experienced excellent growth every year; business.com cites poor management as as the reasonNew management seems to leading a turnaround.

Coffee Bean & Tea Leaf (210 stores). Oldest privately held specialty coffee retailer in the U.S. (founded 1963). 90% of stores are franchises.

Peet’s (58 stores)  One of the few successful IPO’s in 2001. 58% of revenues come from sales of whole coffee beans. Gross profit last year was 49.5%.

Gloria Jean’s (291 stores, 195 in U.S.). Only 19 stores are company owned.

Seattle’s Best (150 stores). Owned by AFC, which also owns Popeye’s Chicken, Church’s, Cinnabon and Torrefazione Italia Coffee (21 stores). Seattle’s Best is also distributed at 7,000 locations such as grocery stores and office buildings.

Diedrich Coffee Company Originally founded in 1916 when the owners inherited a coffee plantation. Headquartered in Southern California. First coffeehouse in 1982. Owns the Gloria Jean and Coffee People chain. 386 outlets total and 370 wholesale accounts. Although they serve an excellent product they have operated "below the radar."

Bucks County Coffee A Mid-Atlantic chain of 40 stores founded in 1982. Has a very good reputation.

PJ’s Coffee & Tea (22 stores). This New Orleans-area chain owns four of their stores.

Java Dave’s (14 stores). Mostly in the Oklahoma area, 12 are franchises and two are company owned.

Quikava (68 locations). A unit of the Massachusetts-based Chock Full O’Nuts organization. Many are kiosks. All but three are franchises.

New World Coffee (33 stores). Mostly concentrated in the New Jersey/New York area. All but three are franchises. A division of Manhattan Bagel.

Bad Ass Coffee Company (29 stores). Begun in Hawaii, this company has grown rapidly by offering a Hawaiian-grown coffee and a milder, mellower brew.

It’s a Grind (86 stores). Fast-growing chain that began in Long Beach, California seven years ago. Most locations are franchises. Concentrated in Southern California and Las Vegas. Company reported $12 million in revenue in 2002. Its stores average more than $500,000 gross revenue.

Dunkin’ Donuts More than 800 outlets serving a surprisingly good coffee. Many people think it’s the best.

Specialty coffee chains in Canada:

Blenz (27 stores).

Second Cup (401 stores)

Tim Horton’s (2,100 stores/150 in U.S.). This store is very close to being a Dunkin’ Donuts style operation where baked goods are the primary products.

Although the specialty coffee industry is successful and expanding rapidly, there is still much room for growth—especially in niche market segments, according to The Specialty Coffee Association of America. Market maturity is not expected to be reached until at least 2019.

Sources:  Business.com, Yahoo Business, Dun & Bradstreet, Hoover’s Business Data, Starbucks Corporation, Specialty Coffee Association, National Coffee Association. 2002.



Local Competition

Surprisingly, the leading coffeehouse chain, Starbucks, has only mediocre stores in the Pleasantville area (eight locations). Its highest volume store (1,150 customers daily) is at an excellent location on ‘A’ Street, the main thoroughfare in town, but the store is unattractive, small and lacks outside seating.

The other high-volume Starbucks is located at the end of a shopping mall in Mount Hill and averages 952 customers daily. It is not a particularly attractive store, although it does have a sizeable lounge area and some outside seating.

Other Starbucks locations in the Pleasantville area are even less memorable, with small facilities and mediocre locations. Photos of some of these locations are shown in the appendix.

Coffee Bean also has an excellent location directly across the street from Starbucks on ‘A’ Street in downtown Pleasantville. This busy coffeehouse is very small. A counter inside and a couple of tables outside are the only areas for customers to sit down. A second Coffee Bean opened in 2002 on the northern end of ‘A’ Street, about three miles from downtown. Another location in Mount Hill is scheduled to open in Summer 2004.

Other competitors include three independent coffeehouses. Paradiseo is located on State Street in a good location. They serve good coffee but have a limited menu and a very "funky" decor. It is a big hangout for the "Goth" and "punk" crowd. A second Paradiseo is located in Shorewood. New managers are trying to improve the store but without success so far.

Another independent is Grounds for Action, located in a residential neighborhood but on a busy street in what was once a gas station. This coffeehouse is also very "collegiate" in its decor, and a favored haunt of the law school students, but manages to average more than 250 customers per day. They have a second location in Springfield.

Ambrosia Kaffe is primarily a student hangout located about three blocks off First Avenue in the northern end of the business district. Its business is modest. The business has undergone changes in management during recent years.

Both Barnes & Noble and Borders Books have integrated cafes that serves espresso drinks into their store plans. Both of these are within two blocks of the Dark Roast Java site.

The Barnes & Noble coffee cafe is very small, located in the rear of the store, and not very busy despite serving Starbucks coffee.

The Borders Books cafe is larger, about 1,000 square feet, and does a good business. They are in a good location, adjacent to the same major parking garage as Dark Roast Java and they also draw from book shoppers and drop-ins from ‘A’ Street. The quality of their coffee and pastries does not compare with ours, and the service can often be quite slow.

The Pleasantville Roastery is a bean roaster and coffeehouse with brick walls and a "San Francisco" style. The coffee is roasted on site. They do much of their business by mail order. They suffer from a very poor location in a difficult to find (or even see) shopping mall off lower ‘C’ Street. A second, small outlet opened in 2003 in Lucre Galerie. Despite their poor location, this is probably the most formidable competitor in town. They make a quality cup of coffee and have a loyal following.

Our Advantages

Our competitive edge, compared to the other coffeehouses in the greater Pleasantville area includes the following:

  • A significantly higher quality, better tasting coffee product.

  • Our current location can arguably be considered the best in the market—in the heart of the downtown shopping, dining, entertainment and cultural district in Pleasantville and adjacent to the historic Egyptian Theatre.

  • An ambiance superior to all other coffeehouses in the area with upscale "Cote d’Azur" look. It features stained glass decorations, art glasswork, Mediterranean Riviera style furnishings and outdoor dining.

  • The only coffeehouse downtown to provide regular weekend evening entertainment.

  • A wider variety of popular drinks than our competitors, including flavored coffee drinks, tea, chai, cocoa, juice and Italian sodas. We have several drink options for people who don’t drink coffee: tea, cocoa, juice and smoothies.

  • Our Internet website will include sales of whole coffee beans, tea, chocolates, gift items and gift baskets.

Keys to Success

Keys to Success

The keys to our success will be:

  • A superior-tasting product backed by a unique quality store
  • A relaxing, upscale interior design
  • Prime site selection with an upscale affluent population, year-round tourist activity, heavy pedestrian traffic by the site, a dynamic student population and a concentration of local businesses
  • A market that exposes Dark Roast Java to high-profile "trend-setters" and "key influencers"
  • Ongoing, aggressive marketing
  • Highly trained and friendly staff
  • Multiple revenue streams including gift items, gift baskets and coffee gift/frequency cards in addition to coffee, pastry, chocolates, tea, juice, water and soft drinks
  • A dynamic website with online sales capability
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Execution

Marketing & Sales

Marketing Plan

Other coffeehouses rely almost entirely on word-of-mouth marketing to generate business. We will engage in an ongoing aggressive marketing program that will help us establish profitability quickly and set the stage for continual growth.

Our strategy will be to position Dark Roast Java as the "Lexus" of coffeehouses, offering a high quality product and superb service in a superior environment.

Most coffeehouse chains do little or no marketing and advertising. For example, Starbucks’ philosophy is that their ubiquity in the marketplace is all they need to sustain and grow their customer base. They spend less than 1% of gross revenues on advertising, and when they do spend, it is usually to introduce a new product.

The retail coffee industry is a sales-oriented business with historically very little experience in marketing and advertising. This is likely why little is done. As yet, the major players have not been taken over by sophisticated companies like Pepsico, where marketing is viewed as essential to gaining market share. 

We will be using advertising and social media marketing to gain awareness, build customer traffic and establish a strong brand image. We intend to create immediate customer awareness and not wait for word-of-mouth. We are also building customer traffic immediately with an aggressive Facebook and Twitter marketing campaign 

Sales Plan

Our sales strategy includes:

Staff salaries that are 10% above the industry average in order to attract the best people

Hiring for attitude so that we always have a friendly, enthusiastic staff to make customers feel welcome and appreciated; constant staff training to assure the best quality possible

State-of-the-art sales/inventory system to (A) reduce customer waiting time, and (B) create efficient product ordering

Create a mobile kiosk to take Dark Roast Java into the community at special events, farmer’s markets, art shows, etc.

Sell coffee, gift baskets and glass artwork on our website

Establish coffee service at local businesses

Sell gift cards, frequency cards, pre-paid cards, and offer discounts to key groups

Create an ongoing sampling program

Conduct a consistent, aggressive marketing program

Be an active member of the community; be visible at charitable functions

Solicit customer feedback to constantly improve and streamline our operation
Key Strategy: an advanced and expandable point-of-sales system

After carefully tracking the performance of the Pleasantville store through an expandable and highly detailed point-of-sale system, we will use this as a "blueprint" for expansion. For example, daily sales are tracked and analyzed by item, time period and cost of goods. Labor requirements are matched to projected in-store sales based upon past performance for maximum efficiency. Even after paying higher than average wages we expect to allocate no more than 25% to labor costs.

Sales are linked to inventory to both streamline the efficiency of ordering and reduce "shrinkage" by instantly alerting us to unusual shortages compared with revenues.

Scheduling can be done online and easily revised to accommodate changes—all while projecting weekly, monthly, quarterly or annual labor costs. Schedules can be sent via email to staff members.

Cost of goods can be monitored for increased efficiency too. As we continually research methods of delivering a high quality but cost-efficient product, and by making small incremental improvements in the costs of items we expect to increase overall COG by a minimum of 5% during the first year of operation.

As expansion occurs, the POS system can be adapted to each individual location and allow the central office to monitor the stores remotely as well as the overall combined operation. Close monitoring will allow us to achieve a high level of communication between stores as well as spot problems immediately and take corrective action.

Operations

Locations & Facilities

The location of the first Dark Roast Java in Pleasantville is a prototype of future sites. Our second site on busy Shoreline Road in Mount Hill will feature our flagship store. It will be located just off the Oak Patch Road and Highway 66 exit, across from the Mount Hill Inn and The Junction Restaurant. It is by far the best location in Mount Hill—one of America’s most affluent cities.

We will build Dark Roast Java coffeehouses in the best locations possible, as this is the key element in a successful operation.

Site selection criteria include:

  • High traffic location
  • Small or mid-size affluent market
  • Year-round tourist activity
  • Nearby (within 5 miles) student population
  • Outside dining

Other sites that meet these criteria include Newburg, Springfield, Bayview, Shorewood, Orchard Valley, Beachey Head, and Capital City.

Exceptions will be made for some sites if they are deemed to be potentially very profitable.

Sites in other states might include Utah, New Mexico, Oregon, Washington, Montana, Idaho, Colorado, etc. Plans are to locate Dark Roast Java coffeehouses in the Western states for efficiency of supply and management.

Outside Dining

The coffeehouse/cafe experience is indelibly linked to its European origins, where al fresco dining is a way of life. Americans have embraced sidewalk dining. It is one of the fastest growing additions to the American dining scene.

Sidewalk dining also provides an excellent way for prospective customers to see and "check out" the coffeehouse for the first time.

Sampling

We will engage in several sampling activities to introduce potential customers (and current customers) to Dark Roast Java’s range of drink options.

  • Samples will be distributed at the coffeehouse
  • Samples will be given to passers-by on the street
  • Discount coupons will be distributed on the street, via direct mail and at special events
  • Complementary coffee will be served at charitable and civic events
  • Free coffee service will be provided to the Chamber of Commerce, a radio station, the newspaper and at select government offices (e.g. the Planning and Zoning Department)

Portable Kiosk

Within 6 to 8 months we will create a portable Dark Roast Java kiosk to sell and market our products at special events and community activities. Pleasantville has more than 130 such events every year. It will be an excellent way to publicize Dark Roast Java coffee.

The kiosk will be highly visible and fun. It will also potentially be very profitable, although it’s hard to determine how profitable with any accuracy until the local response is measured. We believe it could generate $75,000 – $100,000 annual revenue.

Pre-paid, re-loadable, frequency and discount cards

We will promote our program of gift cards and customer frequency cards to drive business and stimulate cash flow. Industry records indicate that 25% – 40% of all gift card amounts go unused. Also, gift cards have proven to be a popular holiday item accounting for more than 5% of total sales during December.

Pre-paid and re-loadable cards have also proven to be very popular with the major chain coffeehouses, again accounting for a significant percentage of sales. These cards promote customer loyalty as well.

Frequency cards rewarding the repeat customer with a free drink after a specified number of visits are popular and proven methods to forge customer loyalty.

Discount cards are used to build goodwill among specific groups such as the Chamber of Commerce members and college students.

By tying in with our computerized sales and inventory system we will be able to track usage and allocate the expense to marketing.

The Future

The number of Dark Roast Java locations could easily reach 20 – 25 within five years. While the financials in this Business Plan only address the Pleasantville location, we can extrapolate from the store’s performance (which will be carefully monitored and tracked) to get a general idea of the chain’s projected profitability.

With ten coffeehouses the gross revenues, when fully realized, would be more than $10 million using the third year performance figures. Even factoring in the cost of additional staff and other resources, a 10-store chain would likely generate a minimum of $1 million in profits annually, while building significant valuation. A 25-store chain would easily top $2.5 million in annual profits.

Dark Roast Java’s start-up, implementation and operation in Pleasantville will be the "blueprint" for future efficient expansion. Our new Mount Hill location will incorporate the knowledge we gain with our first store as well as new creative ideas, and become our "flagship" operation.

Sources:  SRDS, Interep Radio, Scarborough Market Data Survey.

Technology

Equipment & Tools

Milestones & Metrics

Milestones Table

Milestone Due Date
Structure Company Type
May 23, 2020
Select and order furnishings
June 06, 2020
Health Dept
June 06, 2020
Site Plans
June 20, 2020
Join Spec coffee roasters
June 27, 2020
Create employee manual
July 04, 2020
Select business insurance
July 11, 2020
Alliance with water company
July 18, 2020
Join chamber of commerce
July 25, 2020
Select cash register
Aug 08, 2020
Business license
Aug 15, 2020
Choose paint palette
Aug 29, 2020
Select and order flooring
Aug 31, 2020
Gift Items suppliers order
Sept 05, 2020
Select pastry supplier
Sept 12, 2020
Select equipment supplier
Sept 26, 2020
Select confection supplier
Oct 06, 2020
Select Juice suppliers
Oct 10, 2020
Create training program
Oct 17, 2020
Select music
Oct 31, 2020
Hire manager, baristas
Nov 07, 2020
Install wireless
Nov 14, 2020
Pre-Opening Parties
Dec 19, 2020
Grand opening
Jan 03, 2021

Key Metrics

Our Key metrics are: 

  • # of customers who purchase caffeinated drinks in a day
  • # of customers who purchase caffeinated drinks in a month 
  • # of customers who tweet or retweet our tweets 
  • # of Facebook page views 
  • # of website shares 
  • # of customers purchasing pastries or non alcoholic drinks 
  • product cogs vs price 
  • month to month inventory 
  • # of coffee bean bags sold 
  •  

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Company

Overview

Ownership & Structure

Dark Roast Java is a privately held corporation. It is registered as a state LLC Corporation, with ownership shared by Ned Powers-Sebastiane, Victor Lubitsch, Curt Yamaguchi and other outside investors.

Team

Management Team

*Confidential and proprietary information omitted from this sample plan.

The expansion of the Dark Roast Java concept will be managed by Ned Powers-Sebastiane and Victor Lubitsch, with assistance from our outside support team.

Ned Powers-Sebastiane

Ned has more than 35 years experience in marketing/sales with special expertise in the retail sector.

  • President of Powers-Sebastiane Advertising & Public Relations. 

  • Owner/founder of Pan National Motor Tours.

  • Sr. VP/Chief Creative Officer at ******.

  • President/General Manager of ******.

  • VP/Director of Marketing & Advertising at ******.
  • VP/Chief Marketing Officer at ******.

  • VP/Creative Director and Team Leader at ******.

Ned Powers-Sebastiane will be responsible for the site development, construction supervision, equipment ordering, marketing/PR, website design/development and government issues. Ned is a graduate of the Specialty Coffee Association’s training program for coffeehouse operation and management.

Victor Lubitsch

Victor has more than 25 years experience in business and selling. He has been a motivational speaker and image consultant as well.

  • President/CEO of the Pleasantville Chamber of Commerce, 
  • Founder/Owner of Specialty Agency, 
  • State Business Man of the Year.
  • Owner/founder of Brilliant! Idea company.
  • Director of Placement, Local Business College.
  • Top recruiter at ****** Company.
  • Top recruiter at ******.

Victor will be responsible for staffing, menu development, training, product ordering, interior design and accounting supervision. Victor is a graduate of the SCAA coffeehouse management program and recently attended several training seminars at Coffee Fest 

 

Personnel Table

2020 2021 2022
Ned (0.92) $45,000 $61,200 $62,424
Victor (0.89) $40,000 $61,200 $62,424
Manager $48,000 $48,960 $49,939
Part Time Baristas (3.81) $75,400 $127,296 $162,300
Website Manager (0.83) $22,800 $46,512 $47,442
Book Keeper $36,000 $36,720 $37,454
Manager (0.33) $48,000
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Financial Plan

Forecast

Key Assumptions

Our key assumptions are: 

  • The 20-year record of positive growth for specialty coffee drinking will continue at a healthy rate. The Specialty Coffee Association says that the market is far from saturation and will not reach maturity until at least 2019.
  • The resilience of the coffeehouse industry to negative national and world events will continue. Despite recession and war the coffeehouse industry has shown strong growth every year for the past two decades.
  • The quality of national chains will remain the same or decline slightly rather than improve as they standardize their stores, increase automation of espresso drinks and mass-produce the roasting process.
  • Coffee drinks will continue to be considered an "affordable luxury."
  • 15% minimum sales growth rate over the next three years as Dark Roast Java becomes well known.

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

Start-up expenses are in line with those of other coffeehouse chains. For example, Starbucks spends approximately $380,000 on average to build-out a new store location. Our costs are an estimated $225,000 and $25,000 for opening inventory and operating capital. Future stores should cost no more than $175,000 to build out since many of the costs incurred here will not have to be repeated later.

The Start-up requirements, below, include $77,000 of short and long-term assets.

Long term assets: $62,000

 

Undercounter Refrigerators $5,000

Service/Prep Counter

$12,000

Ice Machine $3,500

Large Refrigerator $1,000

Milk Coolers (3) $1,000

Cash register (2) Point of Sale System $14,000

Espresso Machine $11,000

Fetco Coffee Brewer $2,500

Counters/Condiment bar/shelving $12,000

Short-term assets: $15,000

Tables, Chairs, Furnishings $12,000

Persian Carpet $1,000

Lighting Fixtures $2,000

Site design, architectural plan $10,000

Demolition/Construction $25,000

Electrical, Lighting $12,000

Electrical, Other $10,000

Flooring/installation $5,000

Bathroom Construction $4,000

Plumbing $10,000

Fireplace Construction $5,000

Painting $2,500

City permits/licenses/fees $6,500

Accounting $2,000

Legal $4,000

Insurance$2,500

Opening marketing/advertising $3,000

Graphic design for signage, menu boards $2,000

Outside Signage $1,500

Office equipment $600

Computer, scanner, printer $2,000

Telephones/Fax/DSL $500

Stationery etc.$1,000

Gift item displays (3)$1,500

Preparation equipment $1,000

Dishwasher $3,500

Blenders (3) $2,000

Microwave $500

Panini maker $700

Storage racks $1,000

Music system $800

Food display case $6,000

Storage room shelving $1,000

Bulk bean grinder $700

Sinks (2), prep counters $1,200

Menu board construction $2,500

Cups/Lids (50,000) $14,000

TOTAL START-UP EXPENSES $147,000

 

Start-up Inventory $25,000

Other Current Assets $15,000

Long-term Assets $62,000

TOTAL ASSETS  $103,500

Total Requirements $250,500

Sources of Funds

We will be getting investors to give us a total of $250,000. 

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin $444,631 $593,527 $758,005
Operating Expenses
Salaries & Wages $267,200 $381,888 $469,983
Employee Related Expenses $31,160 $43,574 $54,046
Rent $45,600 $45,600 $45,600
Utilities $9,600 $9,600 $9,600
Insurance $2,400 $2,400 $2,400
Legal/Accounting $6,000 $6,000 $6,000
Marketing $1,800 $1,800 $1,800
Sales $4,800 $4,800 $4,800
Maintenance $9,600 $9,600 $9,600
Cleaning $10,800 $10,800 $10,800
Training $8,400 $8,400 $8,400
Amortization of Other Current Assets $0 $0 $0
Interest Incurred
Depreciation and Amortization $6,000 $6,000 $6,000
Gain or Loss from Sale of Assets
Income Taxes $6,191 $9,459 $19,347
Total Expenses $709,048 $920,462 $1,097,815
Net Profit $35,080 $53,605 $109,630

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash $13,343 $58,194 $111,175 $230,022
Accounts Receivable $0 $0 $0
Inventory $25,500 $31,712 $37,453 $37,453
Other Current Assets $15,000 $15,000 $15,000 $15,000
Total Current Assets $53,843 $104,906 $163,628 $282,475
Long-Term Assets $60,000 $60,000 $60,000 $60,000
Accumulated Depreciation ($6,000) ($12,000) ($18,000)
Total Long-Term Assets $60,000 $54,000 $48,000 $42,000
Accounts Payable $10,343 $16,113 $17,078 $17,824
Income Taxes Payable $4,213 $2,365 $4,836
Sales Taxes Payable $0 $0 $0
Short-Term Debt
Prepaid Revenue
Total Current Liabilities $10,343 $20,326 $19,443 $22,660
Long-Term Debt
Long-Term Liabilities
Paid-In Capital $250,500 $250,500 $250,500 $250,500
Retained Earnings ($147,000) ($147,000) ($111,920) ($58,315)
Earnings $35,080 $53,606 $109,629

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit $35,080 $53,605 $109,630
Depreciation & Amortization $6,000 $6,000 $6,000
Change in Accounts Receivable $0 $0 $0
Change in Inventory ($6,212) ($5,741) $0
Change in Accounts Payable $5,770 $964 $746
Change in Income Tax Payable $4,213 ($1,848) $2,471
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
Change in Long-Term Debt
Cash at Beginning of Period $13,343 $58,194 $111,175
Net Change in Cash $44,851 $52,981 $118,847
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