1642 Maple Ave Business Plan by TaeKi Choi

BUSINESS PLAN For TKDS, Inc. (dba Arabica Coffee 1948)

Presented by Taeki Choi March 22, 2016

ARCHITECTURAL CONCEPT SOUTH KOREA

INTRODUCTION In recent years, the number of coffee shops in the United States has rapidly increased and its contribution to tax revenues and employment has had positive impact on the economy of the United States as well. The industry outlook of coffee shops is also promising. According to National Coffee Association’s 2014 annual consumer report, the number of people who regularly purchased coffee from coffee shops rose by 8 percent as well as the average price of coffee for consumers increased by about 8 percent in 2014. Moreover, U.S. consumers are gradually moving their preference from regular coffee to more “gourmet” coffee and espresso-based drinks with 3 percent rise of consumption of premium coffee in 2014. However, Starbucks Corporation is a strong competition for all coffee shops, supplying about 95% of regular and specialty coffee business in Chicago land area, excluding bakery coffee shops. People identify Starbucks as a cultural symbol of coffee shops and its reputation is well recognized. Nevertheless, because of its automated-brewing system, Starbucks cannot provide customized services like Latte art and specialty coffee with a variety of coffee extract methods and there is a great opportunity of market penetration in the coffee retail industry. By analyzing products and service from Starbucks and other premium coffee shops as well as the overall market trend, TKDS, Inc (d/b/a “Arabica Coffee 1948”) can provide personalized and diverse experience with coffee and competitively operate to make a good profit in Chicago land area. In addition, other related products and services like sales of hardwood furniture directly purchased from carpenter’s shop, high-quality designer merchandise, and classes teaching coffee brewing process can generate great sources of income of the coffee shop.

EXECUTIVE SUMMARY Arabica Coffee 1948’s goal is to provide high-quality premium coffee and services and to create a neighbor-friendly place for the development of the community. To meet the increasing demand for espresso-based gourmet coffee and healthy food choices, Arabica Coffee 1948 will serve customized fresh-brewed coffee with freshly-made meals and bakery. Its products and services also include specialty whole/grounded coffee bean, herbal tea and fruit ades, bakery and pastry, and furniture and designer goods. Arabica Coffee 1948 pursues a multi-faceted success for all the stakeholders of the company. The first and foremost responsibility is the financial well-being of the coffee shop and healthy and sustainable employment. It will meet its goal with the following: - The effect of our products and services on the health and well-being of its customers and employees

- The impact that our business’ practices and choices will have on the community

- The quality of its attitude, fairness, understanding, and generosity between management, staff, customers, and vendors.

Arabica Coffee 1948 believes the awareness of all these factors and the responsible actions will give a sense of purpose and meaning beyond the basic financial goals.

BUSINESS OPERATIONS & MANAGEMENT COMPANY SUMMARY

Located at 1642 Maple Ave. Evanston, Illinois, TKDS, Inc (d/b/a Arabica Coffee 1948) will be a welcome addition to the city of Evanston. The market for Arabica Coffee 1948 is a large area of diverse and dense population and business. It is located in commercial area, near Northwestern University, two CTA train stations and a movie theater, all within a walking distance. Arabica Coffee 1948â&#x20AC;&#x2122;s a variety of premium coffee choices and the luxurious hardwood furniture display will be a great attraction for the neighboring communities. Arabica Coffee 1948 has a plan to open the second branch in Schaumburg in 2017 and to expand its business with more franchising branches.

MANAGEMENT

The owner of Arabica Coffee 1948, Eunyoung Hong, is a savvy business woman, who created a new business model, successfully managing two coffee shops in South Korea for several years. The idea of hardwood furniture creates a good source income for her coffee shops. In addition, the display of furniture and interior design of the coffee shops is acclaimed from both locals and on-line bloggers. The general manager of Arabica Coffee 1948, TaeKi Choi, is a skilled architectural designer with prestigious educational background from Illinois Institute of Technology and Seoul National University, and professional experience from Goettsch Partners Inc. He understands the beauty and design of hardwood buildings and furniture. His architectural philosophy is on the irresistible power of design on human lives and nature, and Arabica Coffee 1948 is his most acclaimed work, built on his skills and philosophy.

BUSINESS OPERATIONS & MANAGEMENT EMPLOYMENT

One of the main goals of Arabica Coffee 1948 is the assurance of effective and systemized management of its employees. Overall, one store manager and five to six highly skilled baristas will be operating the coffee shop. These baristas will prepare and serve specialty coffee with latte art, and the coffee stand is an open space for customers waiting for their coffee to be made. The trainings of every employee are pre-requisite to achieve Arabica Coffee 1948’s business goals. Employees will exercise strict standards to the level of the sanitation, quality of drink and food, and presentation and aesthetics of the products. In addition, ongoing training to its employees benefits the all-around customer satisfaction. All employees will be educated of different types of specialty coffee and trained to inform the customers of distinctive characteristics of our products. Under clear working schedule and work description of employee’s position, Arabica Coffee 1948 will also ensure the effectiveness of employees’ working environment and cut off any unnecessary workforce. Arabica Coffee 1948 believes that the quality of its service comes from happy and satisfied employees, who are equally and well treated, so the benefit and wages of employees will be competitively evaluated by their performance.

PRODUCTS & SERVICES Arabica Coffee 1948 provides beverages, bakery, and other products under three main concepts: Organic, Handmade, and Creative. All its products will be prepared and managed under strict quality assurance from the management. In addition to the products, Arabica Coffee 1948 provides educational programs for university students and surrounding communities.

DRINKS

FOOD

Beverage items are the main portion of its business, so a variety choice of premium quality beverages will be served. Coffee - Hand Drip Coffee, Dutch Coffee, and Espresso Beverages(Modern Variations & Special Variations) Fruit Drinks - 100% Organic Smoothies, Fruit Ades and Fruit Yogurts Organic Herbal Teas International Drinks - Shave Ice, Sweet potato latte, and grain drink Selected local suppliers will provide freshly made specialty bakery, sandwiches, and lunch boxes. Bakery – Bagel, muffin, scorn, cheese cake, brownie, and cookies Meal – Prepackaged breakfast and lunch, buffet bar, and sandwiches.

FURNITURE

One of its unique competitive strategies is the sales of luxurious handmade hardwood furniture. Partnered with local and international carpenter shops, Arabica Coffee 1948 displays and sells unique and high-class selections.

COFFEE ACADEMY

Anyone, who has a dream of becoming a barista or having a coffee place at home, can make their dreams come true with Arabica Coffee 1948 Academy. Professional instructors and baristas will go over in detail about how to make hand drip coffee and other more advance coffee extract method for Siphon, Dutch, and Ibrik.

OTHER PRODUCTS

Arabica Coffee 1948 sells mugs, tumblers, Dutch coffee machine, and other products that customers in store wish to take home from the store. Creative designer products with the company logo are good selections for those who are looking for a perfect gifts for the loved ones and the retail sales of high-end industrial and craft design products(Swimming Wear, Accessories and etc.)

10 Merchandising Plan of Arabica Coffee 1948

(3) (4) (5) (6)

MERCHANDING PLAN

_ Offer Experience, not just Coffee

SERVE EXPERIENCE, NOT JUST COFFEE

iii) Hand Drip Coffee (1) Arabica 1948 Blending (3) Affogato (2) Kenya AA (4) Caffe Vienna (3) Ethiopia Yirgacheffe (5) Caffe Sai Gon (4) Mandheling (6) Draft Coffee

1) Retail Merchandising Plan of Arabica a) Retail Merchandise Supplied by TKDS CoffeeInc.1948

i) Furniture ii) Coffee Tools iii) Swim Wear iv) Customized Cups 1) Retail v) Eco Bags a) Retail Merchandise Supplied by TKDS vi) Graphic Design Works Inc. vii) Stationary i) Furniture viii) Etc. ii) Coffee Tools iii) Swim Wear b) Retail Merchandise Supplied by the iv) Customized Cups Local Retails v) Eco Bags i) Pastry and Lunch Menu (Prepacked) vi) Graphic Design Works ii) Flowers vii) Stationary iii) Interior Design Merchandise viii) Etc. iv) Design Merchandise _ Offer Experience, not just Coffee

b) Retail Merchandise Supplied by the c) Art Works from Local Artists Local Retails i) Painting i) Pastry and Lunch Menu (Prepacked) ii) Sculpture ii) Flowers iii) Interior Design Merchandise iv) Design Merchandise 2) Coffee, Drink & Pastry – Arabica Coffee 1948 c) Art Works from Local Artists a) Coffee i) Painting i) Modern Variation ii) Sculpture (1) Americano (2) Cappuccino (3) Caffe Latte 2) Coffee, Drink & Pastry – Arabica Coffee (4) Vanilla Latte 1948 (5) Caramel Macchiato a) Coffee (6) Caffe Mocha i) Modern Variation (1) Americano ii) Special Variation (2) Cappuccino (1) Caffe Con Panna (3) Caffe Latte (2) Shakerato (4) Vanilla Latte (5) Caramel Macchiato (6) Caffe Mocha ii) Special Variation

Affogato Caffe Vienna Caffe Sai Gon Draft Coffee

iv) Cold Water Brew Coffee(Dutch) iii) Hand Drip Coffee (1) Arabica 1948 Dutch (1) Arabica 1948 Blending (2) Kenya AA v) Whole Bean (3) Ethiopia Yirgacheffe (4) Mandheling b) Drink i) Real Fruit Ade iv) Cold Water Brew Coffee(Dutch) (1) Lemon Ade (1) Arabica 1948 Dutch (2) Grapefruit Ade (3) Blue Lemon Ade v) Whole Bean (4) Lime Ade (5) Lemon Dutch Ade b) Drink i) Real Fruit Ade ii) Real Fruit Tea (1) Lemon Ade (1) Lemon Tea (2) Grapefruit Ade (2) Grapefruit Tea (3) Blue Lemon Ade (3) Lime Tea (4) Lime Ade (5) Lemon Dutch Ade iii) Organic Herbal Tea (1) Tropical Crimson ii) Real Fruit Tea (2) Jasmine (1) Lemon Tea (3) Tangerine Ginger (2) Grapefruit Tea (4) Peach Blossom (3) Lime Tea iv) Extraordinary Drink iii) Organic Herbal Tea (1) Mango Cha Cha (1) Tropical Crimson (2) Blueberry Cha Cha (2) Jasmine (3) Grapefruit Shower (3) Tangerine Ginger (4) Green Tea Latte (4) Peach Blossom (5) 12 Grain Honey Shake

iv) Extraordinary Drink (1) Mango Cha Cha (2) Blueberry Cha Cha (3) Grapefruit Shower (4) Green Tea Latte (5) 12 Grain Honey Shake

c) Pastry i) Cub Cake ii) Waffle 3) Education a) Hand Drip Class b) Espresso Machine Class c) Other Brewing Methods Class 4) Exhibition a) Special Items from the Local Retail b) Art works from the Local Artists c) Discovery of Evanston(by TKDS) i) Photographs of the City of Evanston ii) Introductory Poster of Local Shops 5) Space for Events (Reservation and Coordination Required) a) Private Events b) Company and Office Group Lunch or Casual Seminar c) Fund Raising Events i) Non-profit organization ii) Northwestern Music Student – Concert iii) Community Organization

PRODUCTS & SERVICES DRINKS

Grapefruitade

Blue Lemonade

Ice Herbal Tea

Fruit Yogurt

PRODUCTS & SERVICES COFFEE MODERN VARIATION

Iced Caramel Macchiato

Cafe Mocha

Cafe Latte

Caramel Macchiato

PRODUCTS & SERVICES COFFEE SPECIAL VARIATION

Faema E61 Espresso Machine

Caffe Con Panna

Hand-drip Coffee

Affogato

PRODUCTS & SERVICES FURNITURE

Table Chest

Designed & Manufactured by THE QUAD woodworks

PRODUCTS & SERVICES FURNITURE

Armchair

Designed & Manufactured by THE QUAD woodworks

PRODUCTS & SERVICES FURNITURE

Chair

Desk / Sofa

Designed & Manufactured by THE QUAD woodworks

PRODUCTS & SERVICES SWIMMING WEAR

Diana Kim Before settling in Brooklyn, Diana lived in more than four different cities across two continents. The cultural and linguistic adjustments she had to make since she was a child could have overwhelmed her, were it not for her love of art and design: Diana untangled the confusion into coherence through looking, holding, and making beautiful things. And on days when that was not enough, she would walk to the beach or the swimming pool for a dip. Principal Designer

While working as a fashion designer, she came across an idea that could bring together art, design, and the beach: swimwear that take part in making beautiful moments come to life. Inspired by beautiful things abundant in nature and vintage inspired styles, in early 2015, Diana founded Ana Banana to make that vision come true. Ana Banana Ana Banana’s limited small-scale production offers high quality swimwear with simple and elegant designs. It believes swimwear to be extremely personal. That is why Ana Banana’s swimwear are designed to maximize personal choice through variety and playfulness in reversible styles that can be mix-and-matched according to taste. In a flashy swimwear industry, Ana Banana’s vintage inspired styling is refreshing. “I think second-hand vintage designs are great but they can be overwhelming,” Diana said. “So I wanted to make swimwear that retain the vintage look with contemporary aesthetics of sophisticated colors, simpler, slimmer cuts, and fun.” Just in time for the season, Ana Banana will soon be announcing its new designs for the summer.

PRODUCTS & SERVICES SWIMMING WEAR

PRODUCTS & SERVICES ECO BAG

MARKET ANALYSIS SUMMARY

Arabica Coffee 1948 is located in downtown Evanston around Northwestern University, hospitals, and business offices. Within a radius of 3 miles, Wilmette and eastern Skokie area is also located, and many residents of the area frequently shop at downtown Evanston. Arabica Coffee 1948 will be a great attraction the community cannot resist for its high quality coffee and luxurious interior of its space. According to Harvard School of Public Health, among all adults in the U.S., who are over 18 years old, about 58 percent drink coffee every day and total 40 billion dollar is spent on coffee consumption. Market for retail coffee shop has a great potential for business managers with well defined target markets. The core target market of Arabica Coffee 1948 has three different customer profiles: 1. Gourmet coffee mania and hardwood interior lover Serving a limited quantity of various high-end hand drip coffees, Arabica Coffee 1948 will become an attraction that gourmet coffee manias cannot resist. Luxury Dutch coffee machine is a great tool to catch customer’s eye. Plus, display and sales of hardwood furniture in store is a great supplementary item for customers, which offers its customer comfortable and warm feelings. 2. Students from Northwestern University Even late into the evening, coffee shops around the college town are busy with students who purchase coffee for late-night study. According to National Public Radio, young adult population is turning from caffeinated sodas to coffee for their choice of caffeinated drink. By providing delivery service and study area inside, Arabica Coffee 1948 will attract many student customers to our premise. 3. Curious and open-minded people “If you try it, you will like it.” Through marketing, publicity, and word-of-mouth, people will seek out a new experience and learn that customized coffee is tasteful, unique and memorable.

COMPETITION ANALYSIS SUMMARY

There are over a dozen of coffee shops in the Evanston downtown area. Even though the competition presents a challenge in terms of market share, it also indicates the presence of a large, strong market potential. Many of new businesses have made their successful market entry with creative ideas and innovative business models. Arabica Coffee 1948 offers high-quality gourmet coffee and luxurious hardwood furniture at competitive prices. Its competitive edge is on the new business model of a coffee shop selling furniture and displayed products to customers. Also, a variety of choice of food and beverage is also a unique characteristic of Arabica Coffee 1948. Beverages like shave ice with various flavors are some of the many international deserts that Arabica Coffee 1948 serves in addition to traditional menus from other coffee shops. Arabica Coffee 1948 has a main advantage over the competitors in the following three ways:

1. Product identity, quality, and novelty 2. Highly motivated employees and supreme customer services 3. Innovative products and complementary product packaging

Arabica Coffee 1948 is a unique coffee place with customized products, fresh and health choices, and serving of international beverages. The goal of Arabica Coffee 1948 is to become a coffee shop where customer experience gets reinforced by friendly, efficient, and excellent service.

MARKETING SUMMARY

Arabica Coffee 1948 is located in an area which has high visibility with a movie theater and public transportations. Focusing on the unique aspect of its products, a mixture of marketing strategies can effectively convey its presence, image, and message to customers.

1. Social media – Facebook, Instagram, Tweeter, and Yelp 2. Print media – local newspapers, magazines and student publications 3. Direct mail – subscriber lists, offices for takeout 4. Indirect Marketing – Charity events, sales in village flee market, and in-store signs

PROFIT & LOSS ANALYSIS FORCASTED INCOME STATEMENT

5 YEAR PROJECTED INCOME STATEMENT

4.00

TKDS, Inc. (d/b/a Arabica Coffee 1948 - 1842 Maple Ave, IL) Each Period starts on February 1 and ends on January 31

Months Year of 2015 # Weekends - Fri, Sat, Sun # Weekdays - Mon thru Thurs

200 200

250 200

250 250

300 250

300 300

350 300

350 350

400 350

400 400

450 400

TOTAL

Revenue(Café Sales) 12 Days Revenue(Café Sales) 18 Days Revenue(Others)

9,600 14,400

12,000 14,400

12,000 18,000

14,400 18,000

14,400 21,600

16,800 21,600

16,800 25,200

19,200 25,200

19,200 28,800

21,600 28,800

Monthly Total Revenue

24,000

26,400

30,000

32,400

36,000

38,400

42,000

44,400

48,000

50,400

Total Revenue 100% (Annual)

288,000

316,800

360,000

388,800

432,000

460,800

504,000

532,800

576,000

604,800

1,785,600

Less: Cost of Goods Sold 25%

72,000

79,200

90,000

97,200

108,000

115,200

126,000

133,200

144,000

151,200

446,400

216,000 2

237,600 2

270,000 3

291,600 3

324,000 3

345,600 4

378,000 5

399,600 6

432,000 6

453,600 7

1,339,200

11,520

12,672

14,400

15,552

17,280

18,432

20,160

21,312

23,040

24,192

43,200

47,520

54,000

58,320

64,800

69,120

75,600

79,920

86,400

90,720

2,880 2,880

3,168 3,168

3,600 3,600

3,888 3,888

4,320 4,320

4,608 4,608

5,040 5,040

5,328 5,328

5,760 5,760

6,048 6,048

69,120 40,320 28,800 2,880

76,032 44,352 31,680 3,168

86,400 50,400 36,000 3,600

93,312 54,432 38,880 3,888

103,680 60,480 43,200 4,320

110,592 64,512 46,080 4,608

120,960 70,560 50,400 5,040

127,872 74,592 53,280 5,328

138,240 80,640 57,600 5,760

145,152 84,672 60,480 6,048

71,424 267,840 17,856 17,856 428,544 249,984 178,560 17,856

201,600

221,760

252,000

272,160

302,400

322,560

352,800

372,960

403,200

423,360

1,249,920

14,400 1.92

15,840 2.11

18,000 2.40

19,440 2.59

21,600 2.88

23,040 3.07

25,200 3.36

26,640 3.55

28,800 3.84

30,240 4.03

89,280

Gross Profit Operating Expense: Advertising Automobile Expense Bank & Credit Service Charges Compensation of Owner Delivery & Shipping Insurance Legal & Professional Fees Office Supplies Salaries and Wages Rent (w/ triple net) & Utilities Taxes and Licenses Telephone & Internet Total Operating Expenses Net Operating Income

62,400 86,400