Table 5.6.1 Annual Sales Forecast

 

 

Sales Programs

      The Russet Cup will run employee sales contests – The baristas are the salespeople and have a great deal of influence over the customer ordering process. All baristas will be required to have sales and customer service training to make each transaction. The sales contests will emphasize high margin items and cross selling. 

Legal

The Russet Cup is organized as an S-Corporation formed in the state of Kansas.

Milestones

Listed below are the milestones for the Russet Cup:

 

Table 5.8      Milestones

Milestone	Date
Secure occupancy Overland Park location	Completed
Tenant improvements and build outs	Mar 20XX
Purchase furniture and décor	Apr 20XX
Assemble and hire barista team	May 20XX
Advertise on local radio station / mail fliers	May 20XX
Open for Business	Jun 20XX

 

Exit Strategy

In the event the store would have to close for business all assets would be sold at auction. 

Organization and Management

Organizational Structure

The Russet Cup is formed as an S-Corporation wholly owned by Owen Jones.  

Management Team

The Russet Cup will be owned 100% by Owen Jones. Mr. Jones a graduate of Kansas State University, has an undergraduate degree in business administration. During high school he worked as a waiter in a local hospital coffee shop that purchased its beans from a local roaster. In addition to being an avid coffee drinker himself, this job allowed him to learn about the business first-hand. In college, Jones worked in a campus coffeehouse for four years, eventually rising to the position of assistant manager. Following graduation, Jones secured a business development position for regional restaurant chain, which provided additional first-hand exposure to the food and beverage industry—especially the steps involved in establishing new locations.

Management Team Gaps

The Russet Cup will rely on its POS (Point of Sale) system to generate daily accounting and cost activity reports. Mr. Jones will supply these to an outside bookkeeper for preparation of annual income taxes.

Personnel Plan

Initially the café will hire 1 manager, 5 baristas, and 2 part time servers. In Year 2, the café plans to hire 1 additional full time barista.  

 

Table 6.4      Personnel Plan

 

Board of Directors

NA

Financial Plan

The financial plan will cover the following:

 

· Required Cost of Start-Up

· Profit and Loss

· Cash Flow

· Balance Sheet

· Financial Ratios

Important Assumptions

• The sales forecast is conservative and assumes a 5% increase in Year 2, and a 10% in Year 3.
• The analysis accounts for economic seasonality – wherein some months revenues peak (such as holidays ) and wane in slower months.
• The analysis assumes the owner will take a much smaller salary compared to his baristas; at any time it is assumed that owner’s withdrawal is available at his discretion.
• Sales are cash basis – nonaccrual accounting
• Moderate ramp- up in staff over the 3 years forecast
• The average barista salary in 2012 is $50,000.
• In general, most cafes have an 85% gross profit margin
• In general most cafes have a 3% net profit margin

Start-Up Costs

Following are the needed start-up costs associated with the Russet Cup:

 

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