COFFEE CAFE BUSINESS PLAN

Table of Contents

1.0 Executive Summary.......................................................................................................................... 1

1.1 Objectives................................................................................................................................... 2

1.2 Mission....................................................................................................................................... 3

1.3 Keys to Success....................................................................................................................... 3

2.0 Company Summary........................................................................................................................... 3

2.1 Company Ownership............................................................................................................... 4

2.2 Start-up Summary..................................................................................................................... 4

2.3 Company Locations and Facilities........................................................................................ 7

3.0 Products.............................................................................................................................................. 7

3.1 Product Description.................................................................................................................. 7

3.2 Competitive Comparison......................................................................................................... 8

3.3 Sourcing..................................................................................................................................... 8

3.4 Technology................................................................................................................................ 9

3.5 Future Products........................................................................................................................ 9

4.0 Market Analysis Summary................................................................................................................ 9

4.1 Market Segmentation............................................................................................................. 10

4.2 Target Market Segment Strategy.......................................................................................... 12

4.2.1 Market Trends............................................................................................................. 12

4.2.2 Market Growth............................................................................................................ 13

4.2.3 Market Needs.............................................................................................................. 13

4.3 Industry Analysis.................................................................................................................... 13

4.3.1 Distribution Patterns.................................................................................................. 14

4.3.2 Competition and Buying Patterns........................................................................... 14

4.3.3 Main Competitors....................................................................................................... 15

4.3.4 Industry Participants.................................................................................................. 16

5.0 Strategy and Implementation Summary...................................................................................... 17

5.1 Strategy Pyramid.................................................................................................................... 17

5.2 Value Proposition................................................................................................................... 18

5.3 Competitive Edge................................................................................................................... 18

5.4 Marketing Strategy................................................................................................................. 18

5.4.1 Promotion Strategy.................................................................................................... 19

5.4.2 Distribution Strategy.................................................................................................. 19

5.4.3 Marketing Programs.................................................................................................. 20

5.4.4 Positioning Statement............................................................................................... 21

5.4.5 Pricing Strategy.......................................................................................................... 21

5.5 Sales Strategy......................................................................................................................... 21

5.5.1 Sales Forecast............................................................................................................ 22

5.5.2 Sales Programs.......................................................................................................... 25

5.6 Strategic Alliances................................................................................................................. 26

5.7 Milestones............................................................................................................................... 26

6.0 Management Summary.................................................................................................................. 27

6.1 Management Team................................................................................................................ 28

6.2 Management Team Gaps...................................................................................................... 29

6.3 Organizational Structure....................................................................................................... 29

6.4 Personnel Plan....................................................................................................................... 30

7.0 Financial Plan.................................................................................................................................. 31

7.1 Important Assumptions.......................................................................................................... 32

7.2 Key Financial Indicators ..........................................................................................................32

7.3 Break-even Analysis................................................................................................................33

7.4 Projected Profit and Loss .......................................................................................................34

7.5 Projected Cash Flow ...............................................................................................................38

7.6 Projected Balance Sheet ........................................................................................................40

7.7 Business Ratios ................................................................ 41 

7.8 Exit Strategy .......................................................................43

1.1 Executive Summary

The Daily Perc (TDP) is a specialty beverage retailer. TDP uses a system that is new to the beverage and food service industry to provide hot and cold beverages in a convenient and time-efficient way. TDP provides its customers the ability to drive up and order (from a trained Barista) their choice of a custom-blended espresso drink, freshly brewed coffee, or other beverage. TDP is offering a high-quality option to the fast-food, gas station, or institutional coffee.

The Daily Perc offers its patrons the finest hot and cold beverages, specializing in specialty coffees, blended teas, and other custom drinks. In addition, TDP will offer soft drinks, fresh-baked pastries and other confections. Seasonally, TDP will add beverages such as hot apple cider, hot chocolate, frozen coffees, and more.

The Daily Perc will focus on two markets:

The Daily Commuter- someone traveling tofrom work, out shopping, delivering goods or services, or just out for a drive.

The Captive Consumer- someone who is in a restricted environment that does not allow convenient departure and return while searching for refreshments, or where refreshments stands are an integral part of the environment.

The Daily Perc will penetrate the commuter and captive consumer markets by deploying

Drive-thru facilities and Mobile Cafes in the most logical and accessible locations. The Drive-thru facilities are designed to handle two-sided traffic and dispense customerdesigned, specially ordered cups of premium coffees in less time than required for a visit to the locally owned cafe or one of the national chains.

In addition to providing a quality product and an extensive menu of delicious items, to ensure customer awareness and loyalty, as well as good publicity coverage and media support, we will be donating up to 7.5% of revenue to local charities based upon customer choices.

The Daily Perc's financial picture is quite promising. Since TDP is operating a cash business, the initial cost is significantly less than many start-ups these days. The process is labor intensive and TDP recognizes that a higher level of talent is required. The financial investment in its employees will be one of the greatest differentiators between it and TDP's competition. For the purpose of this pro-forma plan, the capital expenditures of facilities and equipment are financed. There will be minimum inventory on hand so as to keep the product fresh and to take advantage of price drops, when and if they should occur.

The Daily Perc anticipates the initial combination of investments and long term financing of $425,000 to carry it without the need for any additional equity or debt investment, beyond the purchase of equipment or facilities. This will mean growing a bit more slowly than might be otherwise possible, but it will be a solid, financially-sound growth based on customer request and product demand.

The Daily Perc chooses to become the Drive-thru version of Starbucks between the mountains, obtaining several million dollars through an initial public or private offering that would allow the company to open twenty to thirty facilities per year in all metropolitan communities in the North, Midwest, and South with a population of over 150,000. This is the preferred Exit Strategy of the Management Team. The danger in this is that competitors would rise up and establish a foothold on a community before--or in the midst of--the arrival of The Daily Perc, causing a potential for a drain on revenues and a dramatic increase in advertising expenditures to maintain market share. Knowing these risks--and planning for them--gives TDP the edge needed to make this scenario work.

The balance sheet estimates a Net Worth of $1,075,969 for the third year, cash balances of $773,623 and earnings of $860,428, based on 13 Drive-thrus and four Mobile Cafes, it is not unrealistic to put a market value of between $4 and $9 million on the company. At present, such companies are trading in multiples of four to 10 times earnings, and it is simple mathematics to multiply the success of TDP by the number of major and smaller metropolitan areas between the mountain ranges of the United States.

Highlights

1.1 Objectives

The Daily Perc has established three firm objectives it wishes to achieve in the next three years:

1.  Thirteen Drive-thru locations and four fully booked Mobile Cafes by the end of the third year.

2.  Gross Margin of 45% or more.

3.  Net After-tax Profit above 15% of Sales.

1.2 Mission

The Daily Perc Mission is three-fold, with each being as integral to our success as the next.

 Product Mission - Provide customers the finest quality beverage in the most efficient time.

 Community Mission - Provide community support through customer involvement.

 Economic Mission - Operate and grow at a profitable rate through sound economic decisions.

1.3 Keys to Success

There are four keys to success in this business, three of which are virtually the same as any food service business. It is our fourth key--the Community Mission--that will give us that extra measure of respect in the public eye.

1.  The greatest locations - visibility, high traffic pattern, convenient access.

2.  The best products - freshest coffee beans, cleanest equipment, premium serving containers, consistent flavor.

3.  The friendliest servers - cheerful, skilled, professional, articulate.

4.  The finest reputation - word-of-mouth advertising, promotion of our community mission of charitable giving.

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