w York e N
BUSINESS PLAN Prepared by: Antonio J Gonzalez Yelitza G Montilla Owner-Managers
Coffee In a Box, LLC 308E 92nd Street. Apart. 2W New York, NY. 10128 917-7481257 / 212-3630615 coffeeinabox@gmail.com www.coffeeinabox.us October 2011
w York Ne
TABLE ON CONTENT INTRODUCTION
3
EXECUTIVE SUMMARY
4
MANAGEMENT AND ORGANIZATION PLAN
5
Legal Form of Business Management Team Recruitment and Selection of Employees Compensation and Ownership Training of Managers and Personal Employee Reward and Incentive Plan Communication
PRODUCT SERVICE PLAN
6
Purpose of Product Service Features and Benefits Stage of Development Product Service Limitations Product Service Liability Production Facilities. Suppliers Related Products Services and Spin-Offs Trademarks, Patents, Copyrights, Licenses, Royalties Governmental Approvals
MARKETING PLAN
8
Industry Profile Current Size Growth Potential Industry Trends Other Characteristics Distribution Channels Competitive Analysis Direct Competition Indirect Competition Future Competition Competitive Analysis Market Analysis Target Market Profile Customer Profile Future Markets 1
w York Ne
TABLE ON CONTENT MARKET PENETRATION
9
Company Image Customer Service Location Direct-Sales Force Sales Representatives Licensing or Distributors Advertising and Promotion Publicity Telemarketing/Direct Mail Internet Trade Shows Market Penetration Effectiveness
PRICING
10
Pricing Strategy Price List Pricing Policies Break-Even Analysis
FINANCIAL PLAN
11
Start-up Costs Sales Projections Capital and Cash Requirements Exit Strategy
APPENDIX
12
Equipment Cost Initial Supplies Lease Agreement Floor Plan Price List
2
w York Ne
INTRODUCTION
The coffee business has boomed in recent years, especially with regards to specialty coffees shops. The market for specialty coffees has grown as consumers become more educated about espresso-based drinks and how they are made. According to a National Coffee Association Annual Drinking Trends Survey, specialty coffee consumption has risen from 18 percent in 2007 to 29 percent in 2010. Every day, more than half of the adult population drinks coffee. The United States accounts for 126 million of those coffee drinkers. While fast food chains are growing at a rate of 2 percent each year, coffee shops grow more than10 percent annually. Even though 75 percent of the cups of coffee brewed daily are consumed at home, 66 percent of Americans buy their coffee outside of their homes. The Specialty Coffee Association of America reported at the end of 2010 that the total number of retail coffee shops in the country had reached 21,400 or 4% more than in 2009. The coffee market size grew from $9 billion in 2009 to $12 billion in 2010, where specialty coffee shops have a share of 25% of the total coffee business..
Gourmet coffee consumption has risen in the past five years. According to Scarborough Research, a market research firm that studies media, lifestyle, and shopping patterns in the United States, in October 2010, 26 percent of adults have been to a coffee shop in the past month, that represent 65 million people.
Snapshot: Coffee Shop Coffee Cafes: (beverage retailers with seating) 21,400 locations averaging $550,000 in annual sales. For adults who have visited a coffeehouse in the past week: Average weekly spending $5 or more: 49% Rarely or never purchase food: 49% Consume the beverage off-premises: 52%
3
w York Ne
EXECUTIVE SUMMARY Venture Description Coffee in a Box is a modern casual coffee shop, which will serve high quality coffee drinks, companions and international tea’s with the outmost comprise with quality and good service in a free stress environment. The interior will include sitting for 35 persons, and a standing bar for 15, all the tables and bar will included hook up for laptop’s and free Wi-Fi for customers. Our slogan : The Real Sense of Coffee.
Management and Organization Plan Coffee in a Box is Limited Liability Company Partnership owned and managed by Antonio Gonzalez and Yelitza Montilla in equal shares, both have a combined 40 years of experience in marketing, sales and management of business.
Marketing Plan Our marketing strategies will be focusing in the zip codes 10128, 10028 of New York City, which have a combined population of 110,319 Hab., with a median age of 40,1 years. The marketing media use will be internet ads in social media’s, web search providers, social networks and discounts coupons in the New Times and New York Post newspaper. Radio will be use in special occasion. A reward loyal customer club will be created with any purchase, this reward program will be the key for the usage of Wi-Fi.
Financial Plan The acquisition cost , the cost of training employees and licenses is $186,000.00, this cost is before taxes. The Gonzalez - Montilla will invest $26,000.00 for start up expenses, marketing research. Sales are conservatively projected to reach almost $625,000 by Year 3 of the plan. A line of credit is needed . The exit plan will be to sell the Coffee Shop.
4
w York Ne
MANAGEMENT AND ORGANIZATION PLAN Legal Form of Business Coffee in a Box is a privately held limited liability corporation owned by Antonio Gonzalez (50%) and Yelitza Montilla (50%). Incorporated in New York City on the 23 of July 2010.
Management Team Antonio Gonzalez: General Manager. Bachelor degree in Mechanical Engineer, pursuing Bachelor degree in Finance in the University of Maryland, 18 years experience in marketing, business and graphic design, photographer, military organization experience actual US service member. Yelitza Montilla: Operation and Administration Manager. Bachelor degree in Administration and Marketing, 16 years of experience in marketing and business.
Recruitment and Selection of Employees Yelitza Montilla will be selecting the personal, with previous experience in multinational firm as Hyundai Motors, Fiat Motors and Cargill.
Compensation and Ownership Antonio and Yelitza will be paid a salary as managers, for the first 3 years the owners cash draw will be reinvested depending the needs. All the employees will earn hour salary’s. averaging $8.33 hr. All the employees will compensate their salary’s with tip’s.
Training of Managers and Personal Managers and personal will be train in multiples areas of operation. The training will be focusing on the mastering of coffee preparation with International standards, customer service and maximization quality, sanitation and profits.
Employee Reward and Incentive Plan The employee of the month will be the one with better customer service, and the one who embraces the company policies of quality. The employee of the month will have a bonus of 15% extra salary for the next month. College students will have flexible schedule.
Communication Two daily meetings will be held 3 times a week, one opening and the other at closing business. Focusing in perpetual improvement of service and quality.
5
w York Ne
PRODUCT SERVICE PLAN Purpose of Product-Service The tradition of coffee houses or coffee shops are more than 600 years old, they first where established in Arabia in the 1400’s, in North America the first coffee house was established in St. Mary’s City, Maryland in the late 1600’s, in New York City one of the first coffee house was the Merchant’s Coffee House in 1784 where the plans for the founding of the Bank of New York where formulated. During centuries the coffee houses have serve both has a space for gathering or a tranquil spot for the enjoyment of a splendid cup of coffee. Coffee in a Box in honor to this tradition will serve as space of enjoyment of a splendid cup of coffee in accordance with the new times.
Features and Benefits Coffee in a Box, as a speciality coffee shop will offer a international diverse coffee menu, with the already popular cappuccino, americano, latte as well as other, brew with the finest beans, roasted in house at different level of strength and flavor. We will offer too original Coffee in a Box recipes and special flavoring choices that will make the coffee experience unique at our shop. Tea’s from around the world and companions cakes with low fat/no sugars will be also offered to our customers.
Stage of Development 49% of US population over 18 drink some type of coffee drink, and Coffee in Box will take part of a industry of great growth in the last years. In pursuit of this share we selected the zip codes 10028 and 10128 which in 2010 had $134,206,532.00 in retails sales.
Product/Service Limitations Perish ability of inventory is the major product limitation. Care must be taken to order proper amounts and use fresh foods immediately, like milk of different types and cakes.
Product/Service Liability Coffee in a Box faces food poisoning liability. Food poisoning is a real threat. The resulting medical costs and possible punitive damages can significantly affect the bottom line. Safe food handling and employee sanitation must be constantly monitored. Proper training is essential along with adequate Insurance.
Production In honor to our statement of the outmost comprise with quality and good service, the essential and most important part is selecting the right coffee bean and roasted in house so it’s freshness will be conserve resulting in a feel and sense with first taste of that cup of coffee. All the cakes and companion will be fresh of the day, and the date of fabrication will be printed in the container.
6
w York Ne
PRODUCT SERVICE PLAN Facilities We are in the market for a retail space between 700 and 1000 sqf. Ideally in a corner located in the zip codes of 10028 or 10128, along the 2nd Av, 3er Av or Lexington Av near a future subway station on the F line or 6,5, 4 subway line. We are looking to sign a 10 year contract.
Suppliers All the major food distributors in the region make regular deliveries to local grocers and restaurants. As a startup business we are currently creating our suppliers database.
Trademarks, Patents, Copyrights, Licenses, Royalties Recipes are in process of copyrighting. The logo will be trademarked and registered to allow for the possibility of future licensing or franchising opportunities.
Governmental Approvals * The city will issue a Certificate of Occupancy . The Health Department permit will be in place and will be contingent on periodic inspections.
7
w York Ne
MARKETING PLAN Industry Profile Current Size: The size for the Limited Service Restaurant sector (Definitions for North American Industry Classification System categories: 722211 Limited-Service Restaurants.) for the combine zip codes 10028 and 10128 is $128,206,532 for the year 2009. Growth Potential: Coffee is the second largest commodity market next to oil, and growth is expected to continue at a strong pace for the foreseeable future. Industry Trends: The specialty beverage industry is growing at an equally strong pace, with sales growth in some categories projected to grow at rates of 40% per year. This growth offers excellent opportunities for new companies to enter this market.
Competitive Analysis Direct Competition: In the zip codes areas of 10028 and 10128 they are 9 competitors in the same sector of coffee shops, they are some other restaurants that serve coffee but not in the type of a coffee shop; 8 Starbucks Coffee and Viand Coffee Shop. The business is predominated by Starbucks Coffee, which represents an advantage for Coffee in a Box. Competitive Analysis: Starbucks Coffee main weakness are standard to poor service, its represents a standard in the industry but its no longer an innovation and high prices are one of the main critics of consumers. Starbucks Coffee strengths is a big store key a variety of products and a well known name that’s represent trust in the clients. Coffee in a Box will offer to its clients a coffee of superb quality and taste at reasonable price, bringing back what our slogan pronounces “The real sense of coffee”. As a new alternative we are in business for a share of this market.
Market Analysis Target Market Profile: Our potential market group of individuals are both sex between 25 and 64 years, residents of zip codes 10028 and 10128. The population for this zip codes is 110,319 representing this range group the 66,70% of the combined zip code (czc) population ( 73.583). Customer Profile:The median age for the combined zip code is 40 and the median income is $93,462. For the year 2009 they spent $124.30 in any type of coffee drinks, representing 0,11% of the total annual income. Future Markets: The projections for the year 2014 is that the average house income for the combined zip code will be $211,319.00, representing a 12,5% increase and for coffee drinks will be an increase of 10.4%
8
w York Ne
MARKET PENETRATION Company Image Coffee in a Box, is a coffee shop with a fresh a modern look with an attitude toward client satisfaction; Quality of our products is our most precious valor. Clients will have complete information of the quality of the coffee, certification of the quality of the grain and origin as well as the tea or companion that they are enjoin.
Customer Service Our baristas and personal will be trained to bring quality with kindness in a quick and efficient manner that will be one the motive to come back and enjoin the real sense of coffee.
Location Our main location will be in the Upper East Side of Manhattan.
Advertising and Promotion Our main promotion will be the degree of excellence of our product and professional attendance; Banner with promotion or the product/drink of the week will be display in the front of the store. Facebook and other social media will be used to advertise our opening and regular operation.
Telemarketing/Direct Mail Will be used to inform of our opening and the unique style and quality of our coffee shop.
Internet We are currently developing a web page an application for smartphone. our address is www.coffeeinabox.us and www.coffeeinabox.mobi
Trade Shows Trade shows may be attended in the future as a way to promote our trademark.
Market Penetration Effectiveness We will promote our special blend for our customer to take home also hotels and restaurants special and unique blends will be offer.
9
w York Ne
PRICING Pricing Strategy Prices will between 5% to 10% lower than Starbucks Coffee in order to introduce our products and give customer to set the difference in quality. Better quality with a lower prices will be our main pricing strategy.
Price List Since we are in the startup fase our price list is not yet set.
Pricing Policies No volume price discounts will be offered. We will have special of the week in order to push volume of certain product.
Break-Even Analysis Sales of approximately $24,000 per month will cover basic operating expenses. Wages and salaries ............................................................................................... $ 11,995.20 The hours of operation will be from 7:00 am to 10:00 pm seven days a week, a total of 112 hours of weekly operation and will require 2 shifts of 1 Manager, 1 Barista and 1 Server, which require 6 employees for daily operation. Resulting 48 hr/man per day and with an average wage of $8.33 hr, the amount require for monthly wages will be $11,995.20.
Rent, Electricity, Water, Heat, Phone, Internet....................................................... $ 4,500.00 Supplies, Bakery, Cleaning and Maintenance ....................................................... $ 7,500.00 Total minimum require for operation ...................................................................... $ 23,995.20
10
w York Ne
FINANCIAL PLAN Start-up Costs Star up cost will be (projected) $ 186,000.00 Legal conformation Coffee in a Box, LLC, market reseach.......................... Equipment .................................................................................................... Lease (First Month + Deposit )...................................................................... Interior Design, Decoration, Installation, Furniture, Lighting System............ Initial Supplies .............................................................................................. Training of Personnel ................................................................................... Licenses New York City ............................................................................... Advertising, marketing and unforeseen expenses .......................................
$ 7500.00 $ 55000.00 $ 10000.00 $ 75000.00 $ 20000.00 $ 5000.00 $ 5000.00 $ 8500.00
Total Star-up Cost........... $ 186,000.00
Sales Projections The first year sales are estimated to be $378,000. Sales are conservatively projected to reach almost $625,000 by Year 3 of the plan. Projections are based on industry standards average. The total retail sales for coffee and tea expenditure for this zip codes 10028 and 10128 in the year 2010 was $12,509,348.00, Coffee in a Box intends to get initially the 5% of this share, representing sales for $625,467.40 a year. Capital and Cash Requirements The cash requirement is base on the stage of opening business. Stage 1: Legal formation of Coffee in a Box, initial market research, contact with vendors and suppliers, permits, design, establishing needs..........................
$12,500.00
Stage 2: Lease, equipment purchase, order supplies, selection and contract personnel, decoration and preparation of retail space..........................................
$160,000.00
Stage 3: Training personnel, equipment test, permit verification advertising, marketing, web page, pre-opennig run...........................................................
$13,500,00
Stage 4: Opening Business (cash for 4 month operation) ...............................................
$96,000,00
Total Capital ............................................................................................. $282,000,00
11
w York Ne
APPENDIX Equipment Cost **
** Cost include tax, shipping and installation.
12
w York Ne
APPENDIX Initial Supplies
13
w York Ne
APPENDIX Lease Agreement
14
w York Ne
APPENDIX Floor Plan
15
w York Ne
APPENDIX Price List
16