Religious Coffeeshop Business Plan
Inspirational Grounds provides a relaxing, Christian-focused place in the neighborhood with freshly roasted coffee, specialty drinks, good books, and music. It meets the increasing demand of our target market:
- Neighborhood businesses in South Central Minneapolis
- Great coffee at a competitive price
- A comfortable place to socialize with others
Inspirational Grounds’ goal is to provide the community with a social atmosphere where Christian neighbors can meet each other in a neutral setting.
Inspirational Grounds is incorporated as an S corporation to shield the owner from personal liability and double taxation.
This proposal is to obtain financing of $80,000 for site preparation, equipment purchase, and first-year expenses. The owner will invest $15,000 of her own money.
This financing will allow Inspirational Grounds to successfully open and maintain operations. The large initial capital investment will create an inviting atmosphere and quality products. A unique and innovative environment is necessary for socialization. Successful operation in year one will provide Inspirational Grounds with a customer base for self-sufficiency in year two.
Even with conservative sales forecasts, we will maintain a positive cash flow, repay the loan in 12 years, and have a positive net worth of over $27,000 by year three. Our net profits are projected to increase from $12,000 to over $14,000 in the next three years.
1.1 Objectives
Inspiration Grounds’ objectives for the first three years include:
- Create a unique, upscale, and innovative spiritual environment that differentiates it from other local coffee shops.
- Make Inspiration Grounds the destination for quality coffee in a welcoming atmosphere for coffee enthusiasts and those seeking spiritual growth.
- Bring people with diverse backgrounds and interests together in a common forum.
- Be an active and vocal member of the community, contributing through participation in activities and financial support.
- Consistently provide excellent specialty beverages, bakery items, inspirational books, and music.
1.2 Keys to Success
Inspiration Grounds’ keys to success are:
- Create a unique, innovative, and upscale atmosphere that differentiates it from other local coffee shops.
- Coffee roasted on-site daily to provide a unique experience and excellent product.
- Sell beverages and products of the highest quality.
- Position itself as an educational resource for individuals interested in growing spiritually.
- Establish itself as a community hub for socialization and entertainment.
- Promote the values of love and service.
1.3 Mission
As people become more interested in their spiritual side, Inspirational Grounds provides a neighborhood shop with excellent freshly roasted coffee and non-denominational Christian books and tapes. It is a specialty beverage establishment focused on providing freshly roasted coffee beans, coffee/espresso drinks, and information to enhance customers’ spiritual experience. Additionally, Inspirational Grounds is committed to remaining an active member of the community and impacting customers’ lives in more ways than just the selling of specialty drinks.
Inspirational Grounds, located in Minneapolis’ South Central area, offers specialty beverages and easy access to spiritual information. It sells quality products and provides excellent customer service for coffee enthusiasts and individuals seeking spiritual growth. The company was formed as an S Corporation in October 2003.
The book and music selection, along with helpful staff, appeal to the audience seeking spiritual growth in uncertain times. The central location provides easy access from throughout the Twin City area and serves as a destination for those recognizing Inspirational Grounds’ unique atmosphere. It also offers convenient access to freshly roasted coffee for local residents.
2.1 Company Ownership
Inspirational Grounds is incorporated as an S Corporation, which shields the owner Regina Brown from personal liability and double taxation. The Corporation was formed in October 2003.
2.2 Company Locations and Facilities
The site, Midtown Commons (also known as the Sears Project), is located in South Central Minneapolis. The initial space is approximately 2,000 square feet and has ample room for the first three years of growth. The complex has ample parking and significant foot traffic from Allina Healthcare Office Facility. The chosen location is easily accessible, highly visible, and in close proximity to local churches, which aligns with Inspirational Grounds’ goal of providing a community hub.
2.3 Start-up Summary
Inspirational Grounds’ start-up costs cover coffee, espresso, and specialty drink making equipment, micro-roasting equipment, training, site renovation and modification, operating expenses, and inventory. Long-term assets include an espresso machine, a micro-roasting system, an Espresso grinder/doser, and a water filtration system. Expensed equipment includes a bulk grinder for drip coffee, a single airpot brewer, a smoothie blender, and minor additional equipment. Funding is also needed for initial inventory, including books and music purchased from various distributors. Renovation and modification costs are included in an estimated figure for preparing the site for business. Current assets include furniture and fixtures, and long-term assets include a POS system.
Start-up Funding
Start-up Expenses to Fund: $29,800
Start-up Assets to Fund: $65,200
Total Funding Required: $95,000
Assets
Non-cash Assets from Start-up: $34,600
Cash Requirements from Start-up: $30,600
Additional Cash Raised: $0
Cash Balance on Starting Date: $30,600
Total Assets: $65,200
Liabilities and Capital
Liabilities
Current Borrowing: $0
Long-term Liabilities: $80,000
Accounts Payable (Outstanding Bills): $0
Other Current Liabilities (interest-free): $0
Total Liabilities: $80,000
Capital
Planned Investment
Owner Investment: $15,000
Investor 2: $0
Other: $0
Additional Investment Requirement: $0
Total Planned Investment: $15,000
Loss at Start-up (Start-up Expenses): ($29,800)
Total Capital: ($14,800)
Total Capital and Liabilities: $65,200
Total Funding: $95,000
Itemized Start-up
The following table represents a list of the equipment, supplies, furniture, and fixtures needed at start-up.
Equipment: Total $15,946.78
Per Item Cost
Total Cost
La Cimabli MN29 Select ESI 1
Supplies: Total $2,667:94
Per Item Cost
Total Cost
Furniture & Fixtures: Total $10,570.50
Per Item Cost
Total Cost
Start-up Inventory: Total $1,812.96
Per Item Cost
Total Cost
Products
Beverages and Baked Goods
Inspirational Grounds sells quality freshly roasted coffee, specialty beverages, and beverage related items. The beverages are made by trained staff members who make recommendations to customers.
The coffee, teas, and other beverage items are supplied by Espresso Services and delivered within 24 hours. The roasting of the green beans will take place on-site for the freshest product. Customers and employees will provide feedback to improve our products and services.
Inspirational Grounds also offers custom roasting services. Customers can order selected coffee varietals roasted to order for enjoyment in their homes or offices.
Books and Music
We sell Christian, uplifting, and life-affirming books and music to complete the atmosphere of the store.
Product Description
Inspirational Grounds sells a variety of coffee and espresso-based drinks, specialty drinks, and bakery items, as well as music and books geared toward the spiritual reader.
Specialty Coffees
The primary product of Inspirational Grounds is specialty coffee. Unique blends are micro roasted for daily serving or specially roasted to order.
Espresso & Coffee Drinks
The Straight Shot – Served in a demitasse.
Espresso Macchiato – Espresso with a small amount of foamed milk.
Espresso Con Panna – Macchiato with whipped cream in place of the foamed milk.
Caffé Americano – Espresso combined with hot water.
Cappuccino – Espresso mixed with foamed milk.
Caffé Latte – Espresso mixed with steamed milk, topped with foamed milk.
Mocha – Espresso, steamed milk, and chocolate syrup.
The Breve – A rich Caffé Latte made with half & half.
Caffé Au Lait – Drip coffee with steamed milk.
Flavor-Based Drinks
Hot Chocolate and Steamers – Made like lattes and mochas without coffee.
Italian Sodas and Creamosas – Flavored syrup and carbonated water or soda with added cream.
Granita – An Italian style granular ice drink.
Other specialty drinks include gourmet hot tea, iced tea, Chai, smoothies, blended coffee and tea-based drinks, and bottled soft drinks.
Books and Music
Books – Popular titles will be stocked in limited supply.
Music – The finest in contemporary Christian music.
Bakery Items
Inspirational Grounds offers a variety of pastries, cookies, and cakes, as well as fresh bread and buns for sandwiches and soup. Quality and consistency are a priority.
Competitive Comparison
Inspirational Grounds differentiates itself by providing a theme based on sound spiritual principles. We will also be the first independently-owned store to roast its own beans on-site.
Sales Literature
Fliers will be distributed throughout the Twin City area one month before the grand opening. Newspaper advertisements and door-to-door flyers will be used to attract customers with special offers.
Sourcing
Inspirational Grounds has associated itself with Espresso Services, Inc., the finest coffee supplier in the area. We bring fine coffees from all over the world to South Central Minneapolis.
Technology
Inspirational Grounds relies on micro-roasting equipment to roast beans on-site. Our website will be used to advertise specials and events, and to post the monthly menu and talent offerings. Email communication will be used for email specials. The Point of Sale (POS) technology will handle order-taking and inventory management. The Inspirational Grounds logo will be Federally Trademarked. A security system will protect the store and reduce insurance premiums.
Future Products
As Inspirational Grounds grows, live entertainment, meeting rooms, private receptions, and devotional rooms will be added. Additional food items will be offered, including fresh soup and made-to-order sandwiches.
Market Analysis Summary
Inspirational Grounds is the first-mover in the Minneapolis/St. Paul Christian coffee house and roaster market. Our target market includes coffee drinkers, spiritual seekers, Christians seeking fellowship, and local neighborhood residents.
Market Segmentation
The target market includes coffee drinkers and spiritual seekers within the 55407 zip code and Hennepin County. This is based on census data, religious adherent research, and coffee consumption statistics. The majority of the target market is between the ages of 15-64 and falls within the income bracket of $15,000-99,999.
Market Analysis:
Neighborhood Resident Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Potential Customers 1% 13,165 13,297 13,430 13,564 13,700 1.00%
Religious Adherent – Henn County 1% 19,731 19,928 20,127 20,328 20,531 1.00%
Other 0% 10,000 10,000 10,000 10,000 10,000 0.00%
Total 0.77% 42,896 43,225 43,557 43,892 44,231 0.77%
4.2 Target Market Segment Strategy
The customers will be between 15-64 years old with an income level of $15,000 to $99,000 annually. They live in the 55407 zip code, the proposed area for Inspirational Grounds. The Hennepin county customer is between 15-64 with income levels ranging from $15-99K annually. They live in the Hennepin county area and are self-professed religious adherents. A limited number, estimated at about 10,000 will come from other areas out of curiosity or to see a particular entertainer or poetry reading. The majority of customers will be those who enjoy a relaxing atmosphere, reading, reflection, and excellent coffee.
4.2.1 Market Trends
The specialty beverage market will continue to grow as younger people opt for non-alcoholic beverages and wholesome entertainment. Religious book retail sales grew 2.3% in 2002, representing 5.25% of all book sales resulting in $1.25 billion in revenue. In 2001, these sales grew 4.7% to $1.3 billion and market share grew to 5.5%. With the increasing interest in spirituality, sales and market share will continue to increase steadily.
4.2.2 Market Growth
The Hennepin County area is expected to grow 0.8% annually, while the 55407 zip code area is expected to grow 1% annually. These estimates are based on recent census data and projected growth rate for the Minneapolis area.
4.2.3 Market Needs
Current trends and historical sales data indicate that the demand for coffee will remain constant over the next five years. The Christian book and music business is expected to continue growing as contemporary Christian artists rival secular music. Additionally, Generation X’ers are more religious than their parents, according to the GlenMary Research Institute. The needs of this market are soft in nature and include a general feeling of acceptance, a place of belonging, and a non-judgmental atmosphere.
The retail coffee industry in the Twin Cities experienced rapid growth in the 90’s and is now in the mature stage of its life cycle. Factors contributing to the demand for excellent coffee and specialty beverages in Minneapolis include the climate, which is conducive to coffee consumption, and the increasing popularity of fresh, quality coffee and specialty drinks. The popularity of Christian entertainment is also growing as people search for meaning during uncertain times. Inspirational Grounds aims to differentiate itself from competitors by combining freshly roasted coffee, a cafe, spiritual books and music, and entertainment in a unique and compelling way.
4.3.1 Competition and Buying Patterns
Inspirational Grounds will face competition from coffee retailers and book & music stores. However, it currently does not face any direct competition from other cafes in the market. The main competitor in the retail coffee segment is Dunn Bros, which sells freshly roasted beans but does not roast them on-site or offer entertainment. Other competitors like Vera’s and Boathouse Coffee have their own unique offerings and target different customer segments.
4.3.2 Main Competitors
Dunn Bros. – Uptown
Local chain cafe that sells freshly roasted beans. The cafe caters to customers who want fresh beans and brewed coffee. They are known for good quality coffee and a clean store.
Vera’s – Lynn/Lake
A specialty coffee cafe with an atmosphere that caters to the “Green Peace” crowd. They have competitive prices, good quality coffee, and an excellent location. They do not offer entertainment, on-site roasted coffee, or books and music.
Boathouse Coffee – 42nd & Cedar Ave South
Serves specialty coffee drinks, sandwiches, soft drinks, and ice cream. The shop is clean and prices are competitive. It can accommodate about 25 patrons, but its location does not allow for easy access.
4.3.3 Industry Participants
There are countless coffee wholesalers who could potentially do business with Inspirational Grounds. These wholesalers distribute coffee and espresso beans to restaurants and retailers. Competition in the industry creates an even amount of bargaining power between buyers and suppliers, resulting in competitive pricing.
Strategy and Implementation Summary
Inspirational Grounds uses a strategy of total market service. Our uniqueness in the market and the products we sell, the people we attract, and the atmosphere we create set us apart. We aim to create an atmosphere that lures spiritual seekers, coffee lovers, and others who appreciate quality and a welcoming environment. Ultimately, we are not just selling products or coffee, we are selling an experience and a sense of community.
Inspirational Grounds positions itself as an upscale coffee house, spiritual resource, and entertainment provider. We serve on-site roasted, high-quality coffee and espresso, as well as specialty beverages at competitive prices. Our coffee is roasted daily to maximize flavor, and customers can order coffee beans roasted to their specifications while they enjoy a beverage.
5.2 Competitive Edge
The competitive advantage of Inspirational Grounds is threefold: our uniqueness in the market, excellent customer service, and a commitment to quality. We are the only spiritually centered coffee shop in the Twin Cities area that roasts its own beans daily and offers a wide selection of inspirational books and music. Our community-based focus and commitment to providing exceptional customer service set us apart. We are also dedicated to serving the best quality beans and beverages, and our staff is trained in the art of espresso making.
Inspirational Grounds’ marketing strategy focuses on the key elements of our target market’s soft needs and the core values of our venture. We market to the spiritual growth, sense of belonging, and love for learning and communication. Additionally, we highlight our on-site roasted coffee and community involvement.
5.3.1 Pricing Strategy
Pricing in the industry is very competitive, but Inspirational Grounds charges slightly higher prices for its freshly roasted coffee due to the unique experience and higher quality. Customers can witness the roasting process and order coffee beans roasted to their specifications.
5.3.2 Promotion Strategy
Inspirational Grounds uses a mix of advertising, postcards, internet advertising, and media partnerships to reach new customers. We also leverage customer referrals and community partnerships to promote our brand. Special promotions and discounts are offered through internet coupons, and targeted mailings are sent to our 55407 customer base.
5.3.3 Marketing Programs
Inspirational Grounds initiates various programs to support our marketing strategy. These programs focus on community involvement, providing spiritual information, creating a welcoming environment, showcasing roasting expertise, offering custom options through our POS system, and providing excellent training to our staff.
5.3.4 Positioning Statement
For the Christian who seeks a place to relax, have fun, and enjoy quality beverages, Inspirational Grounds is a welcoming and informative coffee house that meets their needs. We offer a unique combination of spiritual resources, entertainment, and community focus. For the neighborhood, Inspirational Grounds brings a positive message and a sense of belonging, creating a warm and comfortable atmosphere that encourages customers to learn about coffee and experience quality firsthand.
5.4 Sales Strategy
Trained baristas handle sales transactions at Inspirational Grounds. Multiple employees are available to serve customers, ensuring efficient and personalized service. Sales data is logged on a computerized point-of-sale terminal for analysis and marketing purposes. Various sales programs, including internet coupons and community-based initiatives, are implemented to attract and retain customers.
5.4.1 Sales Programs
Inspirational Grounds utilizes internet coupons, community-based programs, and direct mailing to attract and retain customers. These programs aim to provide special offers, leverage community partnerships, and promote our brand.
5.4.2 Sales Forecast
Inspirational Grounds forecasts an 8% average growth, which is in line with industry estimates. We believe that our unique product and service offerings, along with our proactive marketing strategies, will drive sales and exceed our conservative sales forecasts.
The Sales Forecast for the first three years is as follows:
– Fresh Brewed Coffee:
– Year 1: $41,079
– Year 2: $44,365
– Year 3: $47,914
– Espresso Based Beverages:
– Year 1: $53,507
– Year 2: $57,788
– Year 3: $62,411
– Specialty Drinks:
– Year 1: $34,725
– Year 2: $37,503
– Year 3: $40,503
– Pastries/Desserts:
– Year 1: $14,458
– Year 2: $15,615
– Year 3: $16,864
– Music/CDs:
– Year 1: $11,604
– Year 2: $12,765
– Year 3: $14,041
– Books:
– Year 1: $11,604
– Year 2: $12,765
– Year 3: $14,041
– Fresh Roasted Coffee:
– Year 1: $19,341
– Year 2: $21,275
– Year 3: $23,402
– Misc Candies/Products:
– Year 1: $17,121
– Year 2: $17,977
– Year 3: $18,876
– Total Sales:
– Year 1: $203,440
– Year 2: $220,053
– Year 3: $238,054
Strategic Alliances:
Inspirational Grounds has aligned with Espresso Services, Inc. based in Minneapolis, Minnesota, and the Specialty Coffee Association of America. Both organizations are nationally and internationally recognized for their expertise in the specialty beverage industry.
Inspirational Grounds has also formed alliances with non-competing experts in the Restaurant and Retail markets.
Additionally, Inspirational Grounds has established relationships with five Neighborhood Associations, key developers and planners of the Midtown Exchange project, and City Officials and Council Members.
These alliances will contribute to the company’s success and marketability.
Milestones:
The table below displays important program milestones leading up to the opening date. Further milestones, including live-performance events and marketing and sales goals, are currently being developed and are dependent on receiving adequate funds for opening.
Milestones
Break-even Analysis
Monthly Revenue Break-even: $15,017
Assumptions:
– Average Percent Variable Cost: 22%
– Estimated Monthly Fixed Cost: $11,646
8.3 Projected Profit and Loss
Projected profit and loss:
– Payroll expenses include annual salaries for operations manager and 5 part-time baristas.
– Rental Expense is based on leasing 2,000 square feet at $12.50 per square foot.
We project sales and marketing expenses at $12,000 for the first year. Inspirational Grounds will rely on curiosity, established community involvement, and media human interest stories to spread the word, in addition to traditional sales and marketing tactics.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $203,440 $220,053 $238,054
Direct Cost of Sales $45,657 $47,014 $48,444
Other $0 $0 $0
Total Cost of Sales $45,657 $47,014 $48,444
Gross Margin $157,783 $173,038 $189,610
Gross Margin% 77.56% 78.63% 79.65%
Expenses
Payroll $74,160 $76,968 $86,916
Marketing/Promotion $12,000 $15,000 $18,000
Depreciation $2,004 $2,000 $2,000
Leased Equipment $3,000 $3,000 $3,000
Utilities $4,000 $4,700 $5,800
Insurance $1,800 $1,900 $2,000
Rent $28,380 $31,691 $33,100
Website Hosting and Maintenance $300 $325 $350
Payroll Taxes $11,113 $11,545 $13,037
Other $3,000 $4,000 $4,500
Total Operating Expenses $139,757 $151,129 $168,703
Profit Before Interest and Taxes $18,026 $21,909 $20,906
EBITDA $20,030 $23,909 $22,906
Interest Expense $1,528 $1,400 $1,267
Taxes Incurred $4,124 $5,127 $4,910
Net Profit $12,373 $15,382 $14,730
Net Profit/Sales 6.08% 6.99% 6.19%
8.4 Projected Cash Flow
We will be a medium risk concern with steady cash flows. Sales are in cash, giving Inspirational Grounds an excellent cash structure. Solid product offerings and intelligent marketing will secure a cash balance of nearly $48,000 by December 2005.
Pro Forma Cash Flow
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $203,440 | $220,053 | $238,054 |
| Subtotal Cash from Operations | $203,440 | $220,053 | $238,054 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| Subtotal Cash Received | $203,440 | $220,053 | $238,054 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $74,160 | $76,968 | $86,916 |
| Bill Payments | $102,996 | $125,217 | $133,830 |
| Subtotal Spent on Operations | $177,156 | $202,185 | $220,746 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $6,660 | $6,660 | $6,660 |
| Purchase Other Current Assets | $0 | $4,000 | $4,000 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $183,816 | $212,845 | $231,406 |
| Net Cash Flow | $19,624 | $7,208 | $6,647 |
| Cash Balance | $50,224 | $57,432 | $64,080 |
Projected Balance Sheet
8.5 Projected Balance Sheet
The following table shows our projected assets and liabilities over the next three years. We anticipate a steadily increasing net worth, as we pay off our loan and sales show modest increases. The Balance Sheet also reflects new current asset purchases in years 2 and 3.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $50,224 | $57,432 | $64,080 |
| Inventory | $4,418 | $4,549 | $4,688 |
| Other Current Assets | $12,000 | $16,000 | $20,000 |
| Total Current Assets | $66,642 | $77,982 | $88,767 |
| Long-term Assets | |||
| Long-term Assets | $16,000 | $16,000 | $16,000 |
| Accumulated Depreciation | $2,004 | $4,004 | $6,004 |
| Total Long-term Assets | $13,996 | $11,996 | $9,996 |
| Total Assets | $80,638 | $89,978 | $98,763 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9,725 | $10,343 | $11,059 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $9,725 | $10,343 | $11,059 |
| Long-term Liabilities | $73,340 | $66,680 | $60,020 |
| Total Liabilities | $83,065 | $77,023 | $71,079 |
| Paid-in Capital | $15,000 | $15,000 | $15,000 |
| Retained Earnings | ($29,800) | ($17,427) | ($2,045) |
| Earnings | $12,373 | $15,382 | $14,730 |
| Total Capital | ($2,427) | $12,955 | $27,685 |
| Total Liabilities and Capital | $80,638 | $89,978 | $98,763 |
| Net Worth | ($2,427) | $12,955 | $27,685 |
8.6 Business Ratios
The following table outlines some important ratios from the Coffee Shop industry. The final column, Industry Profile, details specific ratios based on the industry’s Standard Industry Classification (SIC) code, 5812.
Our business, which includes selling books and music, has a different asset structure compared to the standard coffee shop. Most of our assets are short-term due to our extra inventory and our choice to lease our space instead of owning it.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 8.17% | 8.18% | 5.24% |
| Percent of Total Assets | ||||
| Inventory | 5.48% | 5.06% | 4.75% | 2.72% |
| Other Current Assets | 14.88% | 17.78% | 20.25% | 32.59% |
| Total Current Assets | 82.64% | 86.67% | 89.88% | 41.88% |
| Long-term Assets | ||||
| Total Long-term Assets | 17.36% | 13.33% | 10.12% | 58.12% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | ||||
| Accounts Payable | 9.725 | 10.343 | 11.059 | 21.75% |
| Long-term Liabilities | 73.34% | 66.68% | 60.02% | 29.17% |
| Total Liabilities | 83.06% | 77.02% | 71.08% | 50.92% |
| Net Worth | -3.01% | 14.40% | 28.03% | 49.08% |
| Percent of Sales | ||||
| Gross Margin | 77.56% | 78.63% | 79.65% | 55.74% |
| Selling, General & Administrative Expenses | 71.48% | 71.64% | 73.46% | 37.46% |
| Advertising Expenses | 0.99% | 0.91% | 0.84% | 2.06% |
| Profit Before Interest and Taxes | 8.86% | 9.96% | 8.78% | 1.50% |
| Main Ratios | ||||
| Current | 6.85 | 7.54 | 8.03 | 0.81 |
| Quick | 6.40 | 7.10 | 7.60 | 0.51 |
| Total Debt to Total Assets | 103.01% | 85.60% | 71.97% | 53.68% |
| Pre-tax Return on Net Worth | -679.90% | 158.31% | 70.94% | 2.39% |
| Pre-tax Return on Assets | 20.46% | 22.79% | 19.89% | 5.16% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 6.08% | 6.99% | 6.19% | n.a |
| Return on Equity | 0.00% | 118.73% | 53.20% | n.a |
| Activity Ratios | ||||
| Inventory Turnover | 10.90 | 10.49 | 10.49 | n.a |
| Accounts Payable Turnover | 11.59 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 29 | 29 | n.a |
| Total Asset Turnover | ||||
| Sales Forecast | |||||||||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Fresh Brewed Coffee | $3,239 | $3,271 | $3,304 | $3,337 | $3,371 | $3,404 | $3,438 | $3,473 | $3,507 | $3,542 | $3,578 | $3,614 | |
| Espresso Based Beverages | $4,219 | $4,261 | $4,304 | $4,347 | $4,390 | $4,434 | $4,479 | $4,523 | $4,569 | $4,614 | $4,660 | $4,707 | |
| Specialty Drinks | $2,738 | $2,765 | $2,793 | $2,821 | $2,849 | $2,878 | $2,906 | $2,936 | $2,965 | $2,995 | $3,024 | $3,055 | |
| Pastries/Desserts | $1,140 | $1,151 | $1,163 | $1,175 | $1,186 | $1,198 | $1,210 | $1,222 | $1,234 | $1,247 | $1,259 | $1,272 | |
| Music/CDs | $915 | $924 | $933 | $943 | $952 | $962 | $971 | $981 | $991 | $1,001 | $1,011 | $1,021 | |
| Books | $915 | $924 | $933 | $943 | $952 | $962 | $971 | $981 | $991 | $1,001 | $1,011 | $1,021 | |
| Fresh Roasted Coffee | $1,525 | $1,540 | $1,556 | $1,571 | $1,587 | $1,603 | $1,619 | $1,635 | $1,651 | $1,668 | $1,685 | $1,701 | |
| Misc Candies/Products | $1,350 | $1,364 | $1,377 | $1,391 | $1,405 | $1,419 | $1,433 | $1,447 | $1,462 | $1,476 | $1,491 | $1,506 | |
| Total Sales | $16,041 | $16,201 | $16,363 | $16,527 | $16,692 | $16,859 | $17,028 | $17,198 | $17,370 | $17,544 | $17,719 | $17,896 | |
| Personnel Plan | |||||||||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Albert Brown – Operations Manager | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | |
| Owner | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Baristas | $4,680 | $4,680 | $4,680 | $4,680 | $4,680 | $4,680 | $4,680 | $4,680 | $4,680 | $4,680 | $4,680 | $4,680 | |
| Total People | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | |
| Pro Forma Profit and Loss | |||||||||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Sales | $16,041 | $16,201 | $16,363 | $16,527 | $16,692 | $16,859 | $17,028 | $17,198 | $17,370 | $17,544 | $17,719 | $17,896 | |
| Direct Cost of Sales | $3,600 | $3,636 | $3,672 | $3,709 | $3,746 | $3,784 | $3,821 | $3,860 | $3,898 | $3,937 | $3,977 | $4,016 | |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Cost of Sales | $3,600 | $3,636 | $3,672 | $3,709 | $3,746 | $3,784 | $3,821 | $3,860 | $3,898 | $3,937 | $3,977 | $4,016 | |
| Gross Margin | $12,441 | $12,565 | $12,691 | $12,818 | $12,946 | $13,076 | $13,206 | $13,338 | $13,472 | $13,607 | $13,743 | $13,880 | |
| Gross Margin % | 77.56% | 77.56% | 77.56% | 77.56% | 77.56% | 77.56% | 77.56% | 77.56% | 77.56% | 77.56% | 77.56% | 77.56% | |
| Expenses | |||||||||||||
| Payroll | $6,180 | $6,180 | $6,180 | $6,180 | $6,180 | $6,180 | $6,180 | $6,180 | $6,180 | $6,180 | $6,180 | $6,180 | |
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I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
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