Tea Room Business Plan

Jasmine Teahouse is a new tea room in Simsbury, Connecticut. It is managed by owners Earl and Lady Grey. Earl Grey has five years of experience managing a successful boutique coffeehouse in Maryland. Lady Grey has 3 years of herbalist training and 4 years of experience as a teatender in Boston. She is also training to be a nutritionist.

Jasmine Teahouse offers a full range of teas, pastries, premium chocolates, tea accessories, and loose teas. Earl has been learning brewing techniques from Lady Grey for the last four months, and all our teatenders will be trained in the proper storage, brewing, and serving of each tea.

The American tea market is growing rapidly, with the number of tea rooms rising about 15% to 1,500 shops. Tea sales have increased 165% in the last fifteen years. This increase can be partly attributed to the popularity of gourmet coffee shops like Starbucks and Seattle’s Best. Starbucks estimates that 7% of its annual sales come from tea.

In Simsbury, our potential clientele includes local residents and tourists (about 100,000 per year). We expect to attract committed tea drinkers who will recognize the quality of our products and services. For those not familiar with premium teas, we will market our atmosphere, prestige-value, and wide array of potential gifts. Sales to tourists will depend on a highly-visible location, association with the town’s charm, and promotional efforts.

We have no direct competitors in our area. Our upscale approach sets us apart from Dunkin’ Donuts and the local cafe, and the nearest Starbucks is 5 miles away. Simsbury’s growing affluence and gentrification work in our favor.

Our well-researched sales forecasts project sales of over $190,000 in the first year, with continued moderate increases. We project a net profit of over $13,000 in the first year.

The owners are investing $10,330 into the business. Jasmine Teahouse is seeking a 6-year loan of $53,633 to fund startup costs.

1.1 Mission

Our goal is to provide the finest premium teas and chocolates to Simsbury residents in a relaxed and fun atmosphere.

1.2 Objectives

  • To operate a successful tea and chocolate store in Simsbury, employing one to two employees in the first year.
  • To obtain a minimum of 200 regular customers in the Simsbury market in the first year.
  • Achieve first year sales of $190,000.
  • Maintain an average gross margin of 58 percent.
  • To produce a reasonable net profit by the end of the third year.

1.3 Keys to Success

  1. Experienced Owners/Managers.
  2. Product Quality.
  3. Excellent Customer Service.
  4. No direct competition within 20 miles.
  5. Enough working capital to survive the first year.
  6. Broad cross-seasonal offerings.

Tea Room Business Plan Example

Jasmine Teahouse is a start-up business located in Simsbury, CT. Our main focus is the variety of loose tea we offer, including black, green, herbal, and flavored teas. We serve both hot and iced tea and sell loose tea by weight. Additionally, we sell premium chocolates, gift baskets, and pastries to accompany tea orders. While we don’t aim to compete with coffee giants like Starbucks, we do brew one type of coffee daily as a gesture to our customers. Simsbury, incorporated in 1670, is one of Connecticut’s oldest communities. The population has grown from 5,000 in 1950 to over 23,000 today. Simsbury is committed to preserving its rural environment and historic charm, making it a popular tourist destination. The town offers four state parks, wildlife habitats, and Talcott Mountain, a great destination for hiking. Visitors come year-round for outdoor activities, historic sightseeing, and shopping. The Talcott Mountain Music Festival in the summer and antiques and craft fairs in the autumn attract crowds from Hartford, Boston, and New York City. Winter brings cross-country skiers, historic downtown tours, and ice skating, while spring offers the Simsbury Light Opera season and the River Run Road Race. Jasmine Teahouse is a Limited Liability Company in Connecticut, owned by managers Earl Grey and Lady Grey, each controlling 50% of the business. Earl Grey has five years of experience managing a boutique coffeehouse in a similar location in Maryland, and Lady Grey has three years of herbalist training and four years of experience as a teatender in Boston. She is currently training to be a nutritionist. When it comes to start-up requirements, equipment and inventory make up 75% of the budget, while leasehold improvements and general expenses account for the remaining 25%. The owners are investing $10,330 in the business and are seeking a long-term loan of $53,633 with a 9.25% interest rate, which they plan to repay in full within six years.

Tea Room Business Plan Example

Jasmine Teahouse specializes in premium teas, fine chocolates, and gift baskets. We offer a full teahouse experience with an assortment of loose teas, premium chocolates, tea accessories, and gift baskets suitable as souvenirs and gifts. Our goal is to be a destination store for visitors and a resource for locals seeking unique gifts, new experiences, and tea knowledge.

We offer 52 kinds of tea, including black teas like Assam, Ceylon, Darjeeling, and Keemun, blends like Chai and Earl Grey, and our own creations like "New London Garden Party." We also have a variety of green teas and herbal infusions. All our teas can be enjoyed hot, iced, or purchased loose for home brewing.

To complement our beverages, we offer freshly-baked pastries from a local bakery. These items help create the feeling of a real teahouse without requiring additional kitchen equipment. Market research suggests that up to 2/3 of our sit-down customers will order a pastry with their tea, so offering these treats is important.

We also sell premium chocolates such as Godiva, Scharffen Berger, and Garrison, as well as environmentally-friendly options like Dagoba and vegan chocolates. Our selection includes truffles, dipped chocolates, loose bars, and chocolate gift baskets.

While we focus on tea, we also brew one kind of coffee daily for those accompanying tea lovers.

Our store offers specialty teapots, teaballs, tea tins, books, and various small, seasonal, non-food, tea-related items as part of our tea paraphernalia.

We have a selection of pre-made gift baskets and can create custom baskets for any occasion. Our tea tins come in various sizes and designs, and we always have at least five colors of baskets and liners in stock.

The American tea market is growing rapidly, with tea sales increasing 165% since 1990. Additionally, the number of tea rooms offering sit-down service has risen by about 15%. American consumers are turning to tea as a more unique and affordable luxury, thanks to studies highlighting its health benefits and increasing familiarity with Asian and South Asian cuisine.

Simsbury, the location of our teahouse, is a rural town that is gradually adopting sophisticated tastes and priorities. The community’s affluence is growing, leading to increased interest in specialty establishments like ours.

According to market research, the premium chocolate market in the United States is expected to grow from $408 million per year in 2002 to $1.2 billion per year by 2005. Europeans consume twice as much chocolate as Americans, indicating potential for growth in the U.S. market.

Our target market consists of approximately 10,000 local residents between the ages of 25 and 60. Additionally, Simsbury attracts around 100,000 tourists annually, providing a substantial customer base for our business.

All members of our target market have moderate to sizable disposable income and a preference for quality products.

Tea Room Business Plan Example

Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Local Residents 5% 10,000 10,500 11,025 11,576 12,155 5.00%
Tourists 3% 100,000 103,000 106,090 109,273 112,551 3.00%
Total 3.19% 110,000 113,500 117,115 120,849 124,706 3.19%
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4.2 Target Market Segment Strategy

Jasmine Teahouse will provide the local upper-middle-class community with a place to socialize, indulge in fine teas and pastries, and find unique chocolates and tea for gifts. For tourists, Jasmine Teahouse will be a destination stop in their tour of the town, whether as a break from shopping, a warm-up visit after skiing, or a place to buy unique souvenirs of their holiday.

Customers will gladly pay a premium for our products due to the high quality, great taste, and sense of prestige they offer. In fact, higher prices may actually encourage higher sales as these customers believe that higher prices equal higher quality. They want to buy "only the best," regardless of whether their palate is educated enough to appreciate the subtle differences.

4.3 Service Business Analysis

The tea market is relatively new in rural and suburban areas like Simsbury. Currently, locals and sophisticated tourists looking for coffee or tea can go to Dunkin Donuts, Peaberry’s cafe, or travel up to five miles to reach the nearest Starbucks. None of these options cater to tea drinkers or offer the convenience and upscale feeling available at Jasmine Teahouse.

Teahouses have done well in urban areas like Boston and New York, as well as in smaller tourist areas like the Berkshires. In areas like Simsbury, teahouses’ success relies on word of mouth, visibility, and year-round tourist appeal. We aim to capitalize on these factors to build a strong customer base.

  • Most people do not consume tea as a morning ritual like they do with coffee.
  • Tea is consumed in the afternoon and before bed.
  • People drink tea mainly during cold weather, making the business seasonal.
  • Tea is associated with an image of old ladies, china cups, and doilies.
  • Tea is growing in popularity and more people are drinking it in the mornings as a substitute for coffee.
  • Tea is being consumed throughout the day due to its milder caffeine effect.
  • Today’s tea drinkers do not limit their purchases to one season but drink tea all year long.
  • Tea has become the drink of choice for today’s baby boomer and has a more active, youthful, and healthy image.

Premium Chocolate Sales

In the Hartford area, the premium and near-premium chocolate market is made up of three major competitors: Godiva, Munson’s, and Lindt. Lindt is expanding in the market, while Godiva’s sales are expected to be stronger in 2004. According to chocolate statistics, Americans purchase 3.1 billion pounds of chocolate a year, translating into $13.7 billion dollars. The outlets for chocolate fall into three categories: premium, boxed chocolates, and mass market boxed chocolates. Jasmine Teahouse offers only premium chocolates.

  • Valentine’s Day is a significant holiday for chocolate sales, with Americans spending $1.06 billion on candy.
  • American men over the age of 50 prefer receiving chocolate over flowers on Valentine’s Day.

4.3.1 Competition and Buying Patterns

In the gourmet teahouse industry, competition depends on the quality of teas, knowledgeable teatenders, and cultivation of a loyal customer base. Consumers used to low-quality tea bags are often amazed at the range of tastes, textures, and fragrances of real, high-quality tea. Our challenge is to attract customers to our store in the first place.

Our potential customers vary in their knowledge of tea and their desire for different experiences and products.

Tea Drinkers
Tea drinkers are looking for a pleasant, relaxing place to indulge in tea, share it with friends, and learn more about tea. Committed tea drinkers value quality over price or convenience and seek out the freshest teas in the area. Our challenge with these customers is to spread awareness of our store and hold events to showcase our quality.

Local Socializers
The middle and upper-middle-class women of Simsbury and surrounding towns currently have no place to be spoiled at a moderate price outside of a full restaurant. Our challenge with socializers is to create a buzz that we are exclusive, pleasant, and high-quality without generating overcrowding.

Comestible Gift Buyers
Currently, upscale comestibles suitable for gifts in the Simsbury area are limited. We will offer residents a convenient, attractive, and satisfying gift-buying experience at a reasonable price, with a bit of prestige.

Tourists
Tourists have a sophisticated urban palate and seek high-quality food, beverages, gifts, and service. Our challenge with tourists is to be visible without losing our local charm. Once they try our teahouse, they will want to return.

Other Potential Customers:

  • New Tea Drinkers
  • Health-Food Aficionados

Strategy and Implementation Summary

We will combine print advertising, special events, and targeted promotions to introduce Simsbury’s residents and tourists to Jasmine Teahouse and premium teas. Repeat sales depend on high-quality products and service. Our teatenders will be trained in the proper storage, brewing, and serving of our teas.

We offer our teas and chocolates at a price premium to discourage customers seeking cheap, low-quality goods. This enhances the feeling of prestige when patronizing our teahouse and ensures that customers have similar expectations of service and quality. The status and sophistication associated with our brand will become valuable in themselves.

5.1 Competitive Edge

Key Competitive Strengths

  • Earl Grey’s experience managing a successful boutique coffeehouse in a similar locale
  • Lady Grey’s four years of experience as a teatender and training as an herbalist
  • We are the only full-scale teahouse within 20 miles
  • We have competitive distribution contracts with high-end tea growers
  • We are the only retailer offering a wide array of premium chocolates in the area
  • Our interior design gives Jasmine Teahouse an intimate, cozy, comfortable, and chic feeling
  • We are committed to providing high-quality products and services

Our primary weakness is that we are a new business competing against established chains. To build sales, we must not only find new customers but also take customers away from existing stores. We can accomplish this by offering a superior selection of teas and chocolates and focusing on high-quality service and delivery.

5.2 Marketing Strategy

Our marketing strategy needs to make potential customers aware of Jasmine Teahouse’s opening and location, as well as educate them about what a teahouse is and why it is wonderful. Our highly visible location in the historic shopping district of downtown Simsbury will encourage walk-in traffic.

The marketing budget will not exceed 3% of our gross annual sales.

Tea Drinkers
Appeal to their gourmet palates:

  • Advertisements in local papers
  • Flyers in gourmet grocery stores and coffeehouses
  • Ads in local magazines
  • Review by the food writer for the Hartford Courant

Socializers
Appeal to their sense of prestige and good taste:

  • Advertise through local churches and women’s organizations
  • Monthly "Tea Tasting" party with a different theme each month
  • Coupons in local papers for "free friends" pots
  • Flyers in local upscale boutiques, salons, and restaurants

Gift Buyers
Focus on our wide gourmet selection and convenient location:

  • Ads in all local papers
  • Press releases to local papers
  • Walk-ins: Increase the visibility of our store to encourage visits from tourists.
  • Destination Visitors: Advertise in event programs and provide brochures in local sites
  • Alliances with local Inns: Provide coupons and brochures to guests at local inns and bed & breakfasts

5.3 Sales Strategy

Because Jasmine Teahouse is a new entity, we must prove our company’s worth to upscale tea and chocolate buyers to earn their respect and business. Repeat business depends on consistently high-quality products and service. Every customer, whether on their first visit or their hundredth, will be treated graciously and with respect.

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Part of our mission is to educate our customers about tea and tea brewing, but this must be done respectfully. Our knowledge is a resource and must never be used to make a customer feel uncomfortable or ignorant.

Tea Profiles
In addition to our menu, we have developed a "Tea Profile" card for new tea drinkers or customers looking to expand their tea experience. These cards include questions about taste preferences to help our teatenders guide customers to teas they will enjoy.

"Tea Tasting" Plates
Every week, we will offer a different selection of teas as a "tasting." These plates will allow customers to try new teas without committing to a full pot.

Special Events
In addition to monthly tea tasting parties, Jasmine Teahouse will offer the option of reserving the entire teahouse for a party or special event.

5.3.1 Sales Forecast

The following table and chart highlight our sales forecast. We expect sales to start conservatively and increase during holidays like Christmas, Valentine’s Day, Easter, and Mother’s Day.

Jasmine Teahouse expects average monthly sales of just over $16,000 in the first year. In the second and third years, we anticipate approximately 10% annual sales growth as we gain a larger market share and expand beyond Simsbury.

  • Hot Tea: We offer small and large pots of tea for sit-down customers, as well as to-go cups
  • Iced Tea: Available in different sizes
  • Pastries: A range of prices depending on the item
  • Chocolates: Prices vary based on the type of chocolate
  • Gift Baskets: Prices start at $15 with an average sale of $25

Tea Room Business Plan Example

Tea Room Business Plan Example

Review:

Sales Forecast:

Year 1 Year 2 Year 3

Sales

Hot Teas $52,400 $62,000 $66,000

Iced Teas $22,400 $24,000 $25,500

Pastries $14,400 $15,000 $16,000

Chocolate $88,000 $92,000 $100,000

Tea Paraphernalia $3,000 $3,200 $3,400

Gift Baskets $3,895 $4,000 $4,200

Loose Teas $10,150 $10,920 $13,104

Total Sales $194,245 $211,120 $228,204

Direct Cost of Sales:

Year 1 Year 2 Year 3

Hot Teas $15,720 $18,600 $18,480

Iced Teas $7,168 $7,680 $7,650

Pastries $9,504 $9,900 $10,240

Chocolate $39,600 $41,400 $43,000

Tea Paraphernalia $1,500 $1,600 $1,666

Gift Baskets $1,558 $1,600 $1,596

Loose Teas $4,060 $4,368 $4,980

Subtotal Direct Cost of Sales $79,110 $85,148 $87,612

Management Summary:

We are a small company owned and operated by Earl and Lady Grey, husband and wife, as a Limited Liability Corporation. Lady is the designer and marketer of the products, and Earl manages the store. Both partners have extensive experience in this and related industries and will leverage their knowledge of tea purchasing, brewing, marketing, and running small upscale beverage business to create success for Jasmine Teahouse.

Our management style reflects the participation of the owners. We encourage all employees to learn as much as possible about all aspects of the business. The company respects its community of co-workers and treats all workers well. As a family business, we understand that our teatenders, cleaners, and other help are not just workers, but individuals with their own lives, personalities, and hopes. In such a small town, many customers will know our part-time teatenders personally. Thus, it is important to us that they enjoy their jobs and feel well-rewarded.

Personnel Plan:

Personnel Plan

Year 1 Year 2 Year 3

Earl Grey $24,000 $30,000 $35,000

Lady Grey $6,000 $12,000 $14,000

Part-time tea-tenders $13,600 $14,000 $14,500

Total People 4 4 4

Total Payroll $43,600 $56,000 $63,500

Financial Plan:

Our Financial Plan is based on sound research into similar businesses in similar communities and cost estimates obtained for equipment, rent, and other operating expenses. As an owner-operated business, we have some leeway in adjusting our own compensation if sales are low in a given month, but our forecasts are conservative. Our top financial priorities in the first three years are repaying our long-term loan, paying our employees fairly, covering our expenses on time, and generating a modest profit.

We are opening this shop because we love tea, tea drinkers, and we will enjoy all the hard work we must do to maintain the business. We do not expect to get rich doing this, but we do anticipate steadily increasing profits and net worth as Jasmine Teahouse becomes well-known and establishes a loyal clientele.

Sales growth will be aggressive the first 18 months as we sharpen our merchandise assortment, size scales, and stock levels to better meet our customer’s requirements. We anticipate a sales increase of roughly 10% during our second year of operation.

Marketing expenses are budgeted at approximately 3% of total sales.

We will invest residual profits into reducing debt.

Company expansion, while not a necessity, will be an option if sales projections are met and/or exceeded. The location we have chosen contains an additional area we can annex for extra seating if and when it becomes necessary, for a small additional rental charge.

Important Assumptions:

Tax and interest rate assumptions for this plan are on the following table. In addition, there are some non-financial assumptions guiding our forecasts. We assume:

– No other teahouses opening in Simsbury in the next year. (A safe assumption)

– A continued gradual increase in the population and socio-economic class of the Simsbury area.

– Continued tourist interest in our area.

– Increasing consumer interest in tea and other “health” foods.

– That premium chocolates will continue to symbolize luxury and romance as gift choices.

General Assumptions:

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 9.50% 9.50% 9.50%

Long-term Interest Rate 9.25% 9.25% 9.25%

Tax Rate 30.00% 30.00% 30.00%

Other 0 0 0

Break-even Analysis:

Our break-even analysis is based on our cost and price structure for the first year. As we grow, the fixed costs will grow in proportion to the number of employees. We should surpass our Break-even point early on.

Tea Room Business Plan Example

Break-even Analysis

Monthly Revenue Break-even: $11,612

Assumptions:

– Average Percent Variable Cost: 41%

– Estimated Monthly Fixed Cost: $6,883

7.3 Projected Profit and Loss

The table below shows our profit and loss projections for the next three years. We will become profitable early in the first year, with net profits continuing to rise as sales increase. Sales and Marketing expenses include the costs of advertisements and promotions such as monthly tastings and 1/2 off coupons for tourists. Depreciation reflects straight-line depreciation of our long-term assets over 10 years.

Tea Room Business Plan Example

Tea Room Business Plan Example

Tea Room Business Plan Example

Tea Room Business Plan Example

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $194,245 $211,120 $228,204
Direct Cost of Sales $79,110 $85,148 $87,612
Other Costs of Goods $0 $0 $0
Total Cost of Sales $79,110 $85,148 $87,612
Gross Margin $115,135 $125,972 $140,592
Gross Margin % 59.27% 59.67% 61.61%
Expenses
Payroll $43,600 $56,000 $63,500
Marketing/Promotion $5,400 $6,000 $6,000
Depreciation $1,380 $1,380 $1,380
Rent $18,000 $19,000 $20,000
Utilities $8,010 $8,200 $8,600
Monthly disposable supplies $1,200 $1,200 $1,200
Insurance $5,000 $5,000 $5,000
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $82,590 $96,780 $105,680
Profit Before Interest and Taxes $32,545 $29,192 $34,912
EBITDA $33,925 $30,572 $36,292
Interest Expense $4,513 $3,721 $2,894
Taxes Incurred $8,410 $7,641 $9,606
Net Profit $19,622 $17,830 $22,413
Net Profit/Sales 10.10% 8.45% 9.82%

Projected Cash Flow

Our projected cash flow is outlined in the following chart and table. The table shows our planned loan principal repayment. We will be responsible for collecting and repaying sales tax at the 6% rate charged by Connecticut.

Tea Room Business Plan Example

Pro Forma Cash Flow

Cash Received

Cash Sales

Subtotal Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received

New Current Borrowing

New Other Liabilities (interest-free)

New Long-term Liabilities

Sales of Other Current Assets

Sales of Long-term Assets

New Investment Received

Subtotal Cash Received

Expenditures

Expenditures from Operations

Cash Spending

Bill Payments

Subtotal Spent on Operations

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing

Other Liabilities Principal Repayment

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Long-term Liabilities Principal Repayment

Purchase Other Current Assets

Purchase Long-term Assets

Dividends

Subtotal Cash Spent

Net Cash Flow

Cash Balance

Projected Balance Sheet

Assets

Current Assets

Cash

Inventory

Other Current Assets

Total Current Assets

Long-term Assets

Long-term Assets

Accumulated Depreciation

Total Long-term Assets

Total Assets

Liabilities and Capital

Current Liabilities

Accounts Payable

Current Borrowing

Other Current Liabilities

Subtotal Current Liabilities

Long-term Liabilities

Total Liabilities

Paid-in Capital

Retained Earnings

Earnings

Total Capital

Total Liabilities and Capital

Net Worth

Business Ratios

Sales Growth

Percent of Total Assets

Inventory

Other Current Assets

Total Current Assets

Long-term Assets

Total Assets

Current Liabilities

Long-term Liabilities

Total Liabilities

Net Worth

Percent of Sales

Sales

Gross Margin

Selling, General & Administrative Expenses

Advertising Expenses

Profit Before Interest and Taxes

Main Ratios

Current

Quick

Total Debt to Total Assets

Pre-tax Return on Net Worth

Pre-tax Return on Assets

Additional Ratios

Net Profit Margin

Return on Equity

Activity Ratios

Inventory Turnover

Accounts Payable Turnover

Payment Days

Total Asset Turnover

Debt Ratios

Debt to Net Worth

Current Liab. to Liab.

Liquidity Ratios

Net Working Capital

Interest Coverage

Additional Ratios

Assets to Sales

Current Debt/Total Assets

Acid Test

Sales/Net Worth

Dividend Payout

Appendix

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

Hot Teas

$1,500

$2,500

$3,000

$3,000

$3,200

$4,000

$6,000

$6,200

$6,500

$6,000

$5,500

$5,000

Iced Teas

$2,500

$3,000

$3,800

$3,400

$2,000

$1,400

$800

$600

$500

$900

$1,500

$2,000

Pastries

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

Chocolate

$3,000

$5,000

$8,000

$7,000

$7,000

$7,000

$7,000

$7,000

$7,000

$14,000

$7,000

$9,000

Tea Paraphernalia

$250

$250

$250

$250

$250

$250

$250

$250

$250

$250

$250

$250

Gift Baskets

$200

$220

$225

$250

$300

$300

$800

$200

$600

$200

$400

$200

Loose Teas

$600

$500

$500

$600

$700

$950

$1,100

$1,000

$1,000

$1,100

$1,000

$1,100

Total Sales

Direct Cost of Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Hot Teas

$450

$750

$900

$900

$960

$1,200

$1,800

$1,860

$1,950

$1,800

$1,650

$1,500

Iced Teas

$800

$960

$1,216

$1,088

$640

$448

$256

$192

$160

$288

$480

$640

Pastries

$792

$792

$792

$792

$792

$792

$792

$792

$792

$792

$792

$792

Chocolate

$1,350

$2,250

$3,600

$3,150

$3,150

$3,150

$3,150

$3,150

$6,300

$3,150

$4,050

$3,150

Tea Paraphernalia

$125

$125

$125

$125

$125

$125

$125

$125

$125

$125

$125

$125

Gift Baskets

$80

$88

$90

$100

$120

$120

$320

$80

$240

$80

$160

$80

Loose Teas

$240

$200

$200

$240

$280

$380

$440

$400

$400

$440

$400

$440

Subtotal Direct Cost of Sales

TABLE: Personnel Plan

Earl Grey | 0% | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000

Lady Grey | 0% | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500

Part-time tea-tenders | 0% | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,400 | $1,400 | $1,000 | $1,400 | $1,000 | $1,400 | $1,000

Total People | | 3 | 3 | 3 | 3 | 3 | 4 | 4 | 3 | 4 | 3 | 4 | 4

Total Payroll | | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,900 | $3,900 | $3,500 | $3,900 | $3,500 | $3,900 | $3,500

TABLE: General Assumptions

Plan Month | | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12

Current Interest Rate | | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50% | 9.50%

Long-term Interest Rate | | 9.25% | 9.25% | 9.25% | 9.25% | 9.25% | 9.25% | 9.25% | 9.25% | 9.25% | 9.25% | 9.25% | 9.25%

Tax Rate | | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00%

Other | | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0

TABLE: Pro Forma Profit and Loss

Sales | | $9,250 | $12,670 | $16,975 | $15,700 | $14,650 | $15,100 | $17,150 | $16,450 | $24,050 | $16,650 | $18,850 | $16,750

Direct Cost of Sales | | $3,837 | $5,165 | $6,923 | $6,395 | $6,067 | $6,215 | $6,883 | $6,599 | $9,967 | $6,675 | $7,657 | $6,727

Other Costs of Goods | | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0

Total Cost of Sales | | $3,837 | $5,165 | $6,923 | $6,395 | $6,067 | $6,215 | $6,883 | $6,599 | $9,967 | $6,675 | $7,657 | $6,727

Gross Margin | | $5,413 | $7,505 | $10,052 | $9,305 | $8,583 | $8,885 | $10,267 | $9,851 | $14,083 | $9,975 | $11,193 | $10,023

Gross Margin % | | 58.52% | 59.23% | 59.22% | 59.27% | 58.59% | 58.84% | 59.87% | 59.88% | 58.56% | 59.91% | 59.38% | 59.84%

Expenses | | | | | | | | | | | | |

Payroll | | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,900 | $3,900 | $3,500 | $3,900 | $3,500 | $3,900 | $3,500

Marketing/Promotion | | $1,500 | $300 | $300 | $300 | $300 | $300 | $600 | $300 | $600 | $300 | $300 | $300

Depreciation | | $115 | $115 | $115 | $115 | $115 | $115 | $115 | $115 | $115 | $115 | $115 | $115

Rent | | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500

Utilities | | $621 | $621 | $621 | $621 | $621 | $621 | $621 | $621 | $621 | $621 | $900 | $900

Monthly disposable supplies | | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100

Insurance | | $417 | $417 | $417 | $417 | $417 | $417 | $417 | $417 | $417 | $417 | $417 | $417

Payroll Taxes | 20% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0

Other | | $0 | $0 | $0 | $0 | $0

Pro Forma Cash Flow

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Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from Operations
Cash Sales $9,250 $12,670 $16,975 $15,700 $14,650 $15,100 $17,150 $16,450 $24,050 $16,650 $18,850 $16,750
Subtotal Cash from Operations $9,250 $12,670 $16,975 $15,700 $14,650 $15,100 $17,150 $16,450 $24,050 $16,650 $18,850 $16,750
Additional Cash Received
Sales Tax, VAT, HST/GST Received 6.00% $555 $760 $1,019 $942 $879 $906 $1,029 $987 $1,443 $999 $1,131 $1,005
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $9,805 $13,430 $17,994 $16,642 $15,529 $16,006 $18,179 $17,437 $25,493 $17,649 $19,981 $17,755
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $3,500 $3,500 $3,500 $3,500 $3,500 $3,900 $3,900 $3,500 $3,900 $3,500 $3,900 $3,500
Bill Payments $124 $3,870 $8,353 $13,013 $9,840 $9,544 $10,222 $11,969 $10,762 $18,814 $7,471 $13,279
Subtotal Spent on Operations $3,624 $7,370 $11,853 $16,513 $13,340 $13,444 $14,122 $15,469 $14,662 $22,314 $11,371 $16,779
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $555 $760 $1,019 $942 $879 $906 $1,029 $987 $1,443 $999 $1,131 $1,005
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $745 $745 $745 $745 $745 $745 $745 $745 $745 $745 $745 $745
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $4,924 $8,875 $13,616 $18,199 $14,964 $15,094

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