Coffee Shop Business Plan Coffee Shop Business PlanPeople near the University of Oregon need not just coffee and tea, or pastries and snacks, but also a place to meet comfortably, have a group discussion, or just sit quietly, work, and read. That is available now near the University of Oregon campus, but too crowded too often, and not the right combination of factors for everybody.
Java Culture coffee bar is determined to become a daily necessity for local coffee addicts, a place to dream of as you try to escape the daily stresses of life and just a comfortable place to meet your friends or to read a book, all in one.
Java Culture will focus its marketing activities on reaching the University students and faculty, people working in offices located close to the coffee bar and on sophisticated teenagers. Our market research shows that these are the customer groups that are most likely to buy gourmet coffee products. Since gourmet coffee consumption is universal across different income categories and mostly depends on the level of higher education, proximity to the University of Oregon campus will provide access to the targeted customer audience.
Java Culture’s direct competitors will be other coffee bars located near the University of Oregon campus. These include Starbucks, Cafe Roma, The UO Bookstore, and other Food service establishments that offer coffee.
Great coffee, pastries, additional options for tea etc, very welcoming atmosphere, good wireless, desk space, comfortable chairs and tables, good pastries, a location close to the university campus.
We plan to grow as shown in the chart below, taken from our sales forecast. We aim to maintain an industry-standard 60% gross profit margin and reasonable operating expenses, and to produce reasonable profits in the second and third year.
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The owners will invest $140,000 and take out a bank loan for $30,000 to cover the start-up expenses and assets needed plus deficient spending in the early months.
The start-up expenses of $27,000 include:
These expenses will be incurred before launch, so they take their place in our financial projections as negative retained earnings of $27,680 at the end of the month before we begin. That number shows up in the balance sheet.
The required start-up assets of $143,000 include:
Funding for the company comes from two major sources–owners’ investments and bank loans. Two major owners, Arthur Garfield and James Polk, have contributed $70,000 and $30,00 respectively. All other investors have contributed $40,000, which brings the total investments to $140,000. The remaining $30,000 needed to cover the start-up expenses and assets came from the two bank loans–a one-year loan in the amount of $10,000 and a long-term (five years) loan of $20,000. Both loans were secured through the Bank of America. Thus, total start-up loss is assumed in the amount of $27,000.
The amounts show up in the balance sheet in the month prior to opening. The $140,000 investment shows up as Paid-in Capital. The $27,000 expenses show up as negative retained earnings. Assets and liabilities are there. This is all according to financial standards.
People near the University of Oregon need not just coffee and tea, or pastries and snacks, but also a place to meet comfortably, have a group discussion, or just sit quietly, work, and read. That is available now near the University of Oregon campus, but too crowded too often, and not the right combination of factors for everybody.
Java Culture will make its best effort to create a unique place where customers can socialize with each other in a comfortable and relaxing environment while enjoying the best brewed coffee or espresso and pastries in town. We will be in the business of helping our customers to relieve their daily stresses by providing piece of mind through great ambience, convenient location, friendly customer service, and products of consistently high quality. Java Culture will invest its profits to increase the employee satisfaction while providing stable return to its shareholders.
Coffee consumption has shown a steady 2.5% growth rate in the United States over the last decade. The retail coffee industry is flourishing in the U.S. Pacific Northwest. The local climate, with a long rainy season, is very conducive for the consumption of hot non-alcoholic beverages. At the same time, hot dry summers drive people into cafes to order iced drinks. Furthermore, coffee has really become a part of the lifestyle in the Pacific Northwest. Its discerning coffee drinkers are in favor of well-prepared, strong coffee-based beverages, which they can consume in a relaxing environment.
More specifically, the University of Oregon as close to 25K students and another 5-10K faculty and staff. And it is embedded in the Eugene, OR community of 200K people. Our main market will be students, faculty, staff, and nearby residents. But the campus area is a hub for the community and will attract other customers.
Java Culture’s direct competitors will be other coffee bars located near the University of Oregon campus. These include Starbucks, Cafe Roma, The UO Bookstore, and other Food service establishments that offer coffee. Starbucks will definitely be one of the major competitors because of its strong financial position and established marketing and operational practices. However, despite of Starbuck’s entrenched market position, many customers favor smaller, independent establishments that offer cozy atmosphere and good coffee at affordable prices. Cafe Roma is a good example of such competition. We estimate that Starbucks holds approximately 35% market share in that neighborhood, Cafe Roma appeals to 25% of customers, The UO Bookstore caters to another 10%, with the remaining market share split among other establishments. Java Culture will position itself as a unique coffee bar that not only offers the best tasting coffee and pastries but also provides home-like, cozy and comfortable environment, which established corporate establishments lack. We will cater to customers’ bodies and minds, which will help us grow our market share in this competitive market.
Java Culture will cater to people who want to get their daily cup of great-tasting coffee in a relaxing atmosphere. Such customers vary in age, although our location close to the University campus means that most of our clientele will be college students and faculty. Our market research shows that these are discerning customers that gravitate towards better tasting coffee. Furthermore, a lot of college students consider coffee bars to be a convenient studying or meeting location, where they can read or meet with peers without the necessity to pay cover charges. For us, this will provide a unique possibility for building a loyal client base.
The keys to success will be:
Java Culture will position itself as unique coffee bar where its patrons can not only enjoy a cup of perfectly brewed coffee but also spend their time in an ambient environment. Comfortable sofas and chairs, dimmed light and quiet relaxing music will help the customers to relax from the daily stresses and will differentiate Java Culture from incumbent competitors.
In order to build up its client base, Java Culture will use some strategic banners and fliers during the launch period, utilize customer referrals and cross-promotions with other businesses in the community from time to time, and loyalty programs that work with android and IOS and other mobile phones, which is the preference of our market.
Our main thrust will be getting people to know, like, and trust us with content and engagement in Facebook, Instagram, Snapchat, and Twitter. We intend to maintain social media presences that are light on self-serving promotional quasi-advertising content, heavy on community participation, content, and engagement.
Java Culture baristas will handle the sales transactions. To speed up the customer service, at least two employees will be servicing clients–while one employee will be preparing the customer’s order, the other one will be taking care of the sales transaction. All sales data logged on the computerized point-of-sale terminal will be later analyzed for marketing purposes.
Java Culture coffee bar will be located on the ground floor of the commercial building at the corner of West 13th Avenue and Patterson Street in Eugene, OR. The company has secured a one-year lease of the vacant 2,500 square feet premises previously occupied by a hair salon. The lease contract has an option of renewal for three years at a fixed rate that Java Culture will execute depending on the financial strength of its business.
The floor plan will include a 200 square feet back office and a 2,300 square feet coffee bar, which will include a seating area with 15 tables, a kitchen, storage area and two bathrooms. The space in the coffee bar will be approximately distributed the following way–1,260 square feet (i.e., 55% of the total) for the seating area, 600 square feet (26%) for the production area, and the remaining 440 square feet (19%) for the customer service area.
This property is located in a commercial area within a walking distance from the University of Oregon campus on the corner of a major thoroughfare connecting affluent South Eugene neighborhood with the busy downtown commercial area. The commercially zoned premises have the necessary water and electricity hookups and will require only minor remodeling to accommodate the espresso bar, kitchen and storage area. The coffee bar’s open and clean interior design with modern wooden decor will convey the quality of the served beverages and snacks, and will be in-line with the establishment’s positioning as an eclectic place where people can relax and enjoy their cup of coffee. The clear window displays, through which passerby will be able to see customers enjoying their beverages, and outside electric signs will be aimed to grab the attention of the customer traffic.
