Short-term funding: The Grind roastery
Table of contents
Executive Summary
Information about the Industry
Marketing Plan
Competitor Analysis
3 Year Income Statement
Assumptions
3 Year Proposed Funding Schedule
Break-Even Analysis
Expanding Internationally
Disadvantages and Advantages of Debt Financing
Venture Capital
Academic and Business References
Within my presentation, I will be reviewing my marketing plan along with an analysis of my competitors and why I feel I would be successful. I will review a 3 year plan with you with the hopes you can invest in my start up business.
2
Executive summary
All coffee is different. From the region, to the farm, to the roaster, to the brewer, all coffee is different. The key is to inform and educate ourselves on these variables and make small decisions in order to ensure excellency in flavor and consistency.
39% of younger consumers drink gourmet coffee – suggesting new opportunities for coffee companies.
40% of daily consumers are drinking coffee prepared out-of-home, reflecting a continuing trend in behavior as lifestyles become increasingly mobile. (Infographic: National Coffee Drinking Trends 2017).
The Grind Roaster provides the highest quality coffees, teas, sourced from the 13 nations in the world and crafted in unique and exciting ways. The company creates new coffee and tea recipes and improves upon existing ones to create that novelty that 62% of consumers love. There is a growing public awareness of organic products and a responsible sourcing and that is what The Grind Roaster looks to target: the needs, cares and concerns of both modern-day coffee lovers. The Grind realizes that it is not just the modern-day coffee drinkers, but also those that can just appreciate a good “cup of joe.” The Grind will offer low cost cups of pick-me-up. The company will offer coffee, tea and desserts; all created by company owners and associates. The company is seizing the moments of coffee needs and will use that to capture customers. “The average U.S. coffee drinker consumes 2.7 cups per day, with the average size of a coffee cup measuring 9 ounces. In total, approximately 150 million Americans drink 400 million cups of coffee per day -- or more than 140 billion cups per year” (Saad, 2015). The retail value of the U.S. coffee market is estimated to be $48 billion, according to the National Coffee Association (NCA). All coffee is different. From the region, to the farm, to the roaster, to the brewer, all coffee is different. The key is to inform and educate ourselves on these variables and make small decisions in order to ensure excellency in flavor and consistency.
“39% of younger consumers drink gourmet coffee – suggesting new opportunities for coffee companies.
40% of daily consumers are drinking coffee prepared out-of-home, reflecting a continuing trend in behavior as lifestyles become increasingly mobile” (Infographic: National Coffee Drinking Trends 2017).
I have been in management for many years and my loyalty and integrity is very high for my own expectations. I am committed to make this business work and I am searching for an investor that would believe and trust in my ability to make this business work. I am looking for $500k to help me get started in this project.
3
Industry Information
Frequency of Daily Coffee Consumption
This refers to consumers who reported having consumed a coffee beverage within the past day:
Ages 13-18: 37 percent, up 6 percent from last year
Ages 18-24: 50 percent, up 2 percent from last year
Ages 25-39: 63 percent, up 3 percent from last year
Ages 40-59: 64 percent, up 11 percent from last year
Ages 60+: 68 percent, up 4 percent from last year
Daily ‘Gourmet’ Consumption Daily consumption of ‘gourmet’ coffee beverages generally saw much higher rates of increase in 2017:
Ages 13-18: 29 percent
Ages 18-24: 39 percent, up 3 percent from last year
Ages 25-39: 50 percent, up 9 percent from last year
Ages 40-59: 39 percent, up 15 percent from last year
Ages 60+: 34 percent, up 10 percent from last year (11 percent); and nitrogen-infused (3 percent).
Coffee is one of the most consumed commodities in the world; loved by billions worldwide. It is attributed to maintaining production levels of all workers globally. Coffee is also the second-most-traded commodity. Consumption is chiefly seen in industrialized nations, however, its production in less developed nations. The coffee supply chain consists of growth, harvest, import/export, roasting, distribution, and retail. It is the top agricultural export for twelve countries and over 25 million small producers rely on coffee for a living. According to The National Coffee Association, experts measured all the ways that coffee contributes to the U.S economy:
“The total economic impact of the coffee industry in the United States in 2015 was $225.2 billion
Coffee-related economic activity comprises approximately 1.6% of the total U.S. gross domestic product
Consumers spent $74.2 billion on coffee in 2015
The coffee industry is responsible for 1,694,710 jobs in the US economy
The coffee industry generates nearly $28 billion in taxes (including ancillary goods)” ("National Coffee Association", n.d.).
The above information was gathered from Brown, N. (2017). Daily Coffee News. Retrieved from https://dailycoffeenews.com/2017/03/27/2017-us-coffee-drinking-trends-include-more-gourmet-more-youth/
4
Marketing Plan
Marketing Objectives
Competition
Trends: Pricing:
Distribution: Offerings
Promotions
Logo Placement
The marketing plan will emphasize the company’s commitment to bringing a less expensive and flavorsome cup of coffee to customers. This plan will cover the target market, competition within the market and any trends, both current and foreseeable. It will also cover pricing, distribution, offerings and promotions.
Marketing Objectives: Establish the company as a leading coffee retail sales chain in Monmouth County, NJ. The most recent census totaled 625,846 residents inside the county ("U.s. Census Bureau", 2016). Target consumers consist of coffee and tea drinkers of all ages and races.
Competition: Dunkin Donuts and Starbucks are the main competitors, however both lack the “hometown appeal.” The Grind Roaster will focus on locally owned and ran and emphasize this quality.
Trends: The Grind Roaster will be located in a commercial area with a hospital across the street, a high school and middle school close by and a train station that travels the Jersey Shore Coastline and enters into New York City. These are advantages that would not only attract the professionals who are in need of coffee, but also attract those that want a safe place to hang out with friends after school and be able to do homework.
Pricing: The high expense of sourcing will be offset by creating a lean enterprise that systematically reduces and eliminates waste. The higher cost will be justified to the consumer by emphasizing the quality of the product, and its minimal impact on the environment.
Distribution: The product will be supplied from physical retail locations similar to Starbucks and Dunkin Donuts. Coffee drive-up kiosks will also be used to increase availability in high population areas. Customers will also be able to purchase coffee grounds and teas from the company’s online website.
Offerings: The Grind Roasters will offer a rewards program that uses a business card that gets punched for each coffee you purchase. After 10 coffees, you get the eleventh one free.
Promotions: The company will employ online and radio promotions. The radio promotions will be short and evoke a feeling of community. Online promotions will be used via social media venues. Word of mouth for local businesses is huge!
Brand Recognition is key to any business. Th Grind Roaster will include a logo placement on cups and merchandise.
5
Competitor Analysis
Starbucks:
23,000 chain stores globally. Its
High brand recognition
Market share is 39.8%
Offerings include coffee, tea, and other consumables such as breakfast items, sandwiches, and prepackaged goods
Dunkin Donuts:
12,000 locations in 36 countries
Market share is 29.1%
Offerings include donuts, bagels, and other baked goods.
Coffee and other beverage sales account for over 65% of sales
McDonalds:
McDonald’s McCafe chain have more than 1300 operations world-wide
Success credit to McDonald’’s name brand
Starbucks, Dunkin Donuts and McDonald’s McCafe all have brand recognition on their side. The Grind Roaster will prioritize brand recognition and logo creation.
As a start-up business we must remember the customers and competition. We must constantly assess how wel or porrly they are doing. We must also assess what the needs of our customers are, constantly.
6
3 Year income statement projections
The Grind Roaster | 3 Year Income Statement | |||||||
INCOME | 2017 | 2018 | 2019 | % of TS | ||||
SALES | ||||||||
Q1 | $455,000 | $515,000 | $595,000 | |||||
Q2 | $465,000 | $570,000 | $675,000 | |||||
Q3 | $445,000 | $525,000 | $660,000 | |||||
Q4 | $455,000 | $550,000 | $635,000 | |||||
Total Sales (TS) | $1,820,000 | $2,160,000 | $2,565,000 | |||||
COST OF GOODS | ||||||||
Beginning Inventory | $255,000 | $267,000 | $268,000 | |||||
Purchases and Production Costs | $260,000 | $255,000 | $262,000 | |||||
Shipping and Delivery | $110,000 | $112,000 | $115,000 | |||||
Labor (wages and payroll) | $625,000 | $635,000 | $636,000 | |||||
Other | $27,000 | $28,000 | $28,000 | |||||
Less Ending Inventory | $95,000 | $96,000 | $89,000 | |||||
Total Cost of Goods Sold | $1,372,000 | $1,393,000 | $1,398,000 | |||||
GROSS PROFIT | $448,000 | $767,000 | $1,167,000 | |||||
Non-Operating Income | ||||||||
Interest Income | ||||||||
Rental Income | ||||||||
Other | ||||||||
Total Non-Operating Income | ||||||||
Total INCOME | $448,000 | $767,000 | $1,167,000 | |||||
EXPENSES | ||||||||
OPERATING EXPENCES | ||||||||
Accounting and Legal | $18,000 | $18,000 | $18,000 | |||||
Advertising | $150,000 | $150,000 | $150,000 | |||||
Deprecition | $45,000 | $45,000 | $45,000 | |||||
Dues and Subscriptions | ||||||||
Insurance | $12,000 | $12,000 | $12,000 | |||||
Interest Expense | ||||||||
Maintenance and Repairs | $8,000 | $8,000 | $8,000 | |||||
Office Supplies | $10,000 | $10,000 | $10,000 | |||||
Payroll Expenses | $9,500 | $9,500 | $9,500 | |||||
Postage | ||||||||
Rent | $26,000 | $27,000 | $28,000 | |||||
Research and Development | ||||||||
Salaries and Wages | ||||||||
Taxes and Licenses | $13,000 | $13,000 | $13,000 | |||||
Telephone | $3,000 | $3,000 | $3,000 | |||||
Travel | 10,000 | 12,000 | 12,000 | |||||
Utilities | $15,000 | $15,000 | $15,000 | |||||
Web Hosting and Domains | $1,200 | $1,200 | $1,200 | |||||
Other | ||||||||
Total Operating Expenses | $320,700 | $323,700 | $324,700 | |||||
NON-REOCURRING EXPENSES | ||||||||
Furniture, Equipment and Software | $80,000 | $80,000 | $80,000 | |||||
Gifts | $2,000 | $2,000 | $2,000 | |||||
Other | ||||||||
Total Non-Reocurring Expenses | $82,000 | $82,000 | $82,000 | |||||
Total EXPENSES | $402,700 | $405,700 | $406,700 | |||||
Net income Before Taxes | $245,300 | $553,300 | $942,800 | |||||
Income Tax Expense | $78,917 | $238,037 | $389,942 | |||||
NET INCOME | $166,383 | $315,263 | $552,858 | |||||
Owner Distributions / Dividends | $83,192 | $157,632 | $276,429 | |||||
Adjustment to Retained Earnings | $83,192 | $157,632 | $276,429 |
The 3 year income statement projections shows that The Grind Roasters will turn a profit and that expenses remain steady.
7
Assumptions
Sales growth will average 25-27% annually
Payroll (25-34% of revenue)
Beginning inventory (10-14% of revenue)
Purchases and production goods (10-14% of revenue)
Advertising (6-8%)
The Grind will focus the assumption of growth with how the average coffee companies initially performed. Production and payroll will be the greatest expenses. Other costly expenses are associated with advertising (to raise awareness), initial startup (location, hiring, machinery/equipment, and inventory acquisition), and any costs that may be driven by promotions and/or special offers. Coffee and tea consumers visit their establishments on average, 6 times weekly. The Grind Roaster knows that if we are able to stay within the price rates or cheaper and stay committed to the community, then we will be able to build or customer base, not only by the value of our work but also from word of mouth from our customers.
8
3 year proposed funding schedule
3 Year Proposed Funding Schedule | ||||||
Amount | Firm | Amount Approved | Date | Date Received | Fund Application | |
$250,000 | Founder/Owner | $250,000 | 1/8/18 | 1/23/18 | Start-up acquisition of store front rent ($26,000) and equipment/furniture ($80,000) | |
$500,000 | Bank | $500,000 | 1/9/18 | 1/24/18 | Inventory acquisition ($255,000) and hiring labor ($84,500) | |
$325,000 | Partner | Capital infusion, utiities and legal services | ||||
$100,000 | Partner | Capital infusion (owner equity) | ||||
Total Requested | $1,175,000 | |||||
Total Approved | $750,000 | |||||
Difference | $425,000 |
This funding schedule is based on The Grind Roaster’s need for capital. Total requested is $1.175M in funding with $750,00 having been approved and applied.
9
Break-even analysis
Breakeven = Fixed costs / (Unit Selling Prices – Variable Costs)
Average unit selling price for cup of coffee across all chains = $2.70
Assumed average unit selling price for The Grind Roaster coffee $2.75
Fixed costs = $1,492,700
Variable costs per unit = $1.65
Breakeven = $1,492,700 / ($2.75 - $1.65) = 1,357,000
The break-even analysis shows that The Grind Roaster must sell over 1 million cups of coffee to make a profit. Please keep in mind that this analysis is based off a regular cup of coffee priced at $2.75 and not on any of the specialty coffees on our menu. A separate break-even analysis was also performed for a Guatemalan medium roast is priced at $3.25 a cup would create a break-even analysis under 1 million.
10
Fixed Cost
Variable Cost
Cost Bid Pricing
Price Bid Costing
Formula
International Expansion
Japan: one of largest consumers of coffee and tea in the world
United Kingdom: coffee sales exceed $1B
Italy: tremendous love for coffee and mass consumer per capita
Expanding internationally to outsource labor and reduce manufacturing costs is of interest to The Grind Roaster. The counties selected for expansion represent some of the greatest industrialized coffee drinking countries in the world.
Japan: one of largest consumers of coffee and tea in the world
United Kingdom: coffee sales exceed $1B
Italy: tremendous love for coffee and mass consumer per capita
The factors to be considered are the economic indicators such as status of import/exports, market size, the rate of growth and the country’s economy. U.S. market share and how hard it is to enter into the industry are key factors as well as cultural and legal differences.
Tax rates for each country:
Japan: 30.86%
United Kingdom: 19%
Italy: 27.9%
11
Decision tree
Start-up of $300,000
Location size
Paper Ads
Social Media
Small
Radio Ads
Paper Ads
Social Media
Medium
Advertising Methods
Advertising Methods
This decision tree is based on $300,000 initial funding. The size of the storefront would definitely be an issue and that will then affect advertising, which in turn will affect sales. Having $200,000 given in 3 years is not sufficient.
12
Advantages and disadvantages of debt financing versus selling company stock
Debt Financing
Advantages include:
Owners retain ownership of the firm provides greater degree of financial freedom than equity financing
Less administrative costs
Debt interest is tax deductible.
Disadvantages include:
The firm is obligated to pay back the debt monthly, lenders may impose harsh penalties for late payments, failure to pay can adversely impact a company’s credit score, and it can be hard for newer firms to obtain since they have no established credit.
Selling Company Sock
Advantages:
No New Debt
Shared Risk
Disadvantages:
Loss of Ownership
Loss of Control
Advantages: Retain control over decision making and business relationship ends once you repay loan in full. Amount you pay in interest is tax deductible, which reduces net obligation. It is easier to plan how much capital and interest you will pay back each month.
Disadvantages: Must have good enough credit rating to receive financing. Good financial judgement is needed to make repayments; do not be overly dependent on debt because they could be considered “high risk”. Business assets could be at risk as collateral, including personally.
Common Stock: Investors have a say at meetings and benefit from higher stock prices and dividends. Companies pay the cost of issuance for underwrites the new issue. Maintain credit rating by issuing stock and not taking on debt.
13
Venture capital
Business Plan
Proposed meeting
Due diligence
Term Sheet
Venture capital is the financing that investors provide start-up companies that are believed to have long-term growth potential. These investors are usually monetarily rich people or an investment bank. It does not have to be monetary, however, it can also be in some form of expertise. Investors are looking for above-average returns. One downside is that investors often get equity or stock in the company and are able to help make decisions for the company. One can see venture capitals more so for new or emerging companies.
First there is a business plan proposed and meeting, which includes a description of the opportunity at hand and market size; thorough investigation of the management; review of competitive landscape and solutions; financial projections; executive summary and business plan and capitalization table. All of this will be reviewed by the investor. Then a meeting will occur if you fit with the investors preferences. Then there is a due diligence phase that will include a lot of communication, interviews, references, strategy evaluations, just to name a few. Then, a term sheet will be presented by the investor that states the basic terms and conditions of the investment agreement.
I would not advise venture capital for The Grind Roaster. The issue with the start-up company I have presented is that there are so many alternatives. This industry and the product is not truly unique. I further believe that the return will not be as great, right away and the fact that an investor may play a role in how I am dreaming to open and run the company is not cohesive to my business plan and strategy.
14
Academic and business references
Bank, E. (n.d.). Chron. Retrieved from http:// smallbusiness.chron.com/advantages-issuing-common-stock-vs-long-term-debt-76860.html
Brown, N. (2017). Daily Coffee News. Retrieved from https://dailycoffeenews.com/2017/03/27/2017-us-coffee-drinking-trends-include-more-gourmet-more-youth/
Investopedia. (n.d.). Retrieved from https://www.investopedia.com/terms/v/venturecapital.asp
Kunigis, a. (n.d.). Business Owner's Playbook. Retrieved from https:// www.thehartford.com/business-playbook/in-depth/debt-financing
National Coffee Association. (n.d.). Retrieved from http://www.ncausa.org
National Coffee Association. (2017). Retrieved from https://nationalcoffeeblog.org/2017/04/03/infographic-national-coffee-drinking-trends-2017/
Academic and business references
Saad, L. (2015). GALLUP News. Retrieved from http:// news.gallup.com/poll/184388/americans-coffee-consumption-steady-few-cut-back.aspx
Statistica. (2017). Retrieved from https://www.statista.com/statistics/543629/us-coffee-retail-sales /
TradingEconomics. (2018). Retrieved from https:// tradingeconomics.com/united-kingdom/corporate-tax-rate
TradingEconomics. (2018). Retrieved from https:// tradingeconomics.com/japan/corporate-tax-rate
TradingEconomics. (2018). Retrieved from https:// tradingeconomics.com/italy/corporate-tax-rate
U.S. Census Bureau. (2016). Retrieved from https://www.census.gov/quickfacts/fact/table/monmouthcountynewjersey/PST045216
Personality Test
Based upon the International Personality Item Pool (IPIP)
Everybody is curious about their personality, so psychology to the rescue!
Our personality test is similar to the Myers Briggs (MBTI) and the Jung personality tests, and is based upon an open-source set of personality testing items. These items are based upon scientific research and will provide results typical of a five-factor model of personality. The five factors measured by this test are extraversion, agreeableness, conscientiousness, emotional stability, and intellect/imagination. Please remember that these are only personality traits or preferences -- they do not predetermine every action you prefer in every situation.
This test consists of just 50 questions and takes about 7 minutes for most people to complete. Answer as many questions as you can to get the most accurate score possible. Your answers are held in strictest confidence and are not shared with anyone. At the end of the test, you will receive a free, comprehensive personality report on these five personality traits and where your answers put you in relationship to each trait.
Personality Test
For each item, simply indicate how much you agree or disagree whether each statement describes you. Think of yourself as you generally are right now (not how you were or how you would like to be). Answer honestly for the most accurate result.
1. I'm not easily bothered by things.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
2. I make friends easily.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
3. I do just enough work to get by.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
4. I respect others.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
5. I'm not very interested in abstract ideas.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
6. I dislike myself.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
7. I make plans and stick to them.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
8. I tend to vote for liberal political candidates.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
9. I would describe my experience as somewhat dull.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
10. I regularly insult others.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
11. I have a vivid imagination.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
12. I carry out my plans.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
13. I am the life of the party.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
14. I seldom feel blue or depressed.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
15. I have a sharp tongue.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
16. I don't care much for art.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
17. I don't talk a lot.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
18. I don't often see things through.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
19. I accept people as they are.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
20. I enjoy hearing new ideas.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
21. I often feel blue, sad or depressed.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
22. I often have little to say.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
23. I'm always prepared.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
24. I avoid philosophical discussions.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
25. I have a good word for everyone.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
26. I often waste my time.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
27. I panic easily.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
28. I get back at others.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
29. I believe in the importance of art and music.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
30. I'm skilled in handling social situations.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
31. I rarely get irritated.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
32. I believe others generally have good intentions.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
33. I often shirk my duties.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
34. I often have frequent mood swings.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
35. I like to keep in the background.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
36. I carry any conversation I'm in to a higher level.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
37. I suspect hidden motives in others.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
38. I usually pay attention to details.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
39. I feel comfortable with myself.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
40. I don't enjoy going to art museums.
Disagree strongly (not at all me)
Disagree a little
Neither agree nor disagree
Agree a little
Agree strongly (this is very like me)
Your Personality Test
Results
Extraversion
42
Agreeableness
38
Conscientiousness
42
Neuroticism
14
Openness
38
The personality test that you've just taken is based on the Five Factor Model of personality. Personality psychologists believe this is a pretty good description of the broad traits or general areas that go to make up a person's core personality. Personality isn't set in stone, however, so keep that in mind if you see anything you'd like to alter below. Teenagers and young adults should take the below results with a bit of caution, as their personalities are still under development (personality is generally pretty well formed by one's mid 20's).
What do each of the 5 traits mean?
Extraversion - Energy, enthusiasm, socialable
Agreeableness - Altruism, helping others, affection, friendliness
Conscientiousness - Control, will, constraint, dependability
Neuroticism - Negative emotions, nervousness
Openness to Experience - Originality, culture, open-minded, intellect
Extraversion
This trait reflects a person's preference for certain kinds of social situations, and how they like to behave in such situations. People high in extraversion are energetic and seek out the company of others. People low in extraversion -- what some might call introverts -- tend to be more quiet and reserved.
You scored really high on this trait, suggesting you have a lot of energy and tend to enjoy most social situations.
Agreeableness
This trait reflects how we tend to interact with others, especially in terms of our altrusim and friendliness. People who score higher in agreeableness tend to be more trusting, friendly and cooperative than others. People who score lower tend to be more aggressive and less cooperative.
You scored really high on this trait, suggesting you are a very friendly, cooperative and trusting person.
Conscientiousness
This trait reflects how organized and persistent a person is in pursuing their goals. People who score high on this trait tend to be more methodical, well-organized and dutiful than others. People who score lower tend to be less careful, less focused and more likely to be distracted from tasks.
You scored really high on this trait, suggesting you're a well-organized, focused and methodical person.
Neuroticism
This trait reflects the tendency for a person to experience negative thoughts and feelings. People who score high on this trait tend to be more prone to insecurity and emotional distress. People who score lower tend to be more relaxed, less emotional and less prone to distress.
You scored really low on this trait, suggesting you're less emotional and fairly secure in who you are.
Openness to Experience
This trait reflects a person's open-mindedness, and interest in culture and art. People who score high on this trait tend to be imaginative, creative, and to seek out cultural and educational experiences. People who score lower on this trait tend to be more down-to-earth, less interested in art and more practical in nature.
You scored really high on this trait, suggesting you love art and try to keep open-minded.
Recommendations
You have 4 significant personality traits that we've identified.
If the traits are hurting your life, you may consider seeking out further assistance for them, by consulting a psychologist or other mental health professional.
You have 1 personality trait that you've scored very low on.
Please remember, this is not an official diagnostic test. It is only a general quiz to give you a broad understanding of common personality factors.
Interpersonal Communication Skills Test - Abridged
10 questions, 05 min
1.
People don't get what I am saying.
2.
I find it hard to express my feelings to others.
3.
I get so caught up in what I have to say that I am unaware of the reactions of my listeners.
4.
When I know what someone is going to say, I finish the sentence for him or her.
5.
I find it difficult to express my opinions when others don't share them.
6.
If I don't understand someone's explanation the first time around, I feel stupid asking for clarification.
7.
I try to divert or end conversations that don't interest me.
8.
I find it easy to see things from someone else's point of view.
9.
When I talk to someone, I put myself in his or her shoes.
10.
I am able to resolve problems without losing control of my emotions.
*All answeres were (Somewhat true/false).
Interpersonal Communication Skills Test - Abridged
There's no doubt that communication is an integral part of any relationship, be it familial, friendship, business or romantic. In fact, an absence or breakdown of communication can put even the best relationships in serious jeopardy. Poor communication often leads to feelings of betrayal, distrust, misunderstandings, and even social isolation. Contrary to popular belief, the foundation of solid communication is not making yourself be heard or expressing yourself clearly. While these are elements of good communication, the real core involves understanding where the other person is coming from. Productive communication simply can't exist without both parties expressing ideas and making efforts towards genuine listening. Though this may seem paradoxical, the key to communication is more about listening to the other person then flooding him/her with information about who you are, what you want, and how you feel. Remember, disappointing or not, the ultimate goal of communication is most often compromise.
Overall results
50
According to your score on this test, your communication skills are average, leaving plenty of room for improvement. You scored somewhere in the middle on the communication scale - not picture perfect, but not at the bottom of the barrel either. You already have some skills, and have shown the potential to master the communication process. However, some time and concentrated effort is needed to develop these abilities even further. Communication plays a significant role in the impression you make on others. It also influences your self-esteem, assertiveness, and social adjustment. If you want to reach your full communicating potential, all it takes is a little know-how and effort. Like most things in life, practice makes perfect - and you're already halfway there!
Emotional IQ Test - Abridged
10 questions, 10 min
1.
When I mess up, I say self-depreciating things such as "I am such a loser," "Stupid, stupid, stupid," or "I can't do anything right."
2.
I run into obstacles that keep me from reaching my goals.
3.
Even when I do my best, I feel guilty about the things that were not done perfectly.
4.
I am able to stop thinking about my problems.
5.
I am bored most of the time.
6.
I feel like I worry about things that other people don't even think about.
7.
When someone I care about is sad, I feel sad too.
8.
Some people make me feel bad about myself, no matter what I do.
9.
Everything I try to do ultimately ends in failure.
10.
I am not satisfied with my work unless someone else praises it.
*All answeres were (completely false).
Emotional IQ Test - Abridged
In the late 1990's, emotional intelligence (EIQ) was one of the hottest buzz-phrases in contemporary psychology. In the business world, it became a hot topic, largely due to one author's claim that a high EIQ was one of the best predictors of success in the workplace. In his 1995 book, Emotional Intelligence, Why it Can Matter More than IQ, author Daniel Goleman used an early definition by researcher Peter Salovey which stated that the construct of EIQ includes knowing one's emotions, emotional self-control, motivation and persistence, recognizing emotions of others, and successfully handling relationships. Goleman made some very strong statements in his book, including the suggestion that EIQ is one of the main keys to success in life. He implied that emotional intelligence is at the root of many of life's puzzles. Why are some smart people unsuccessful? Why do certain individuals strike out at others in a violent manner? Why do some excel at managing people while others struggle? He hinted that EIQ was an answer to all these, and many others, of life's questions.
Since the birth of the concept in a 1985 thesis by Wayne Leon Payne, researchers have been working to discover what factors play a part in emotional intelligence. Many conceptions of emotional intelligence are divided into two main parts; aspects related to understanding and dealing with one's own emotions, and those related to understanding the emotions of others and handling social interactions. For many prominent EIQ researchers, including most notably Goleman and Reuven Bar-on, the construct also includes broader traits such as motivation, interpersonal and other personal attributes (this is often called a mixed model). For others, including Peter Salovey and John Meyer and their colleagues, the latest models of EIQ are strictly related to the test-taker's abilities in this area (often called an ability model). Like the classical notion of intelligence, they feel that emotional intelligence is a cognitive ability that can be accurately and concretely defined and measured.
Overall results
80
Your Emotional IQ is excellent ? much higher than average in fact. This means that for the most part, you are able to express your feelings clearly in appropriate situations. You are optimistic and positive, and adapt well to altering circumstances. You are comfortable with yourself, and you know and appreciate your talents and strong points as well as your weaknesses. You are able to motivate yourself, and find the energy and the strength necessary to complete what you need to do to reach your goals. You are one of the resilient people who bounce back after major drawbacks, survive hardship without bitterness, and still manage to empathize with others. These skills will certainly bring you long-term benefits such as stronger relationships, better health and personal happiness.
Depression Test
By Ivan Goldberg, M.D.
~ 2 min to take
Use this brief 18-question online automated quiz to help you determine if you may need to see a mental health professional for diagnosis and treatment of depression, or for tracking your depression and mood on a regular basis.
Instructions: You can print this scale out or take it online, using it on a weekly basis to track your moods. It also might be used to show your doctor how your symptoms have changed from one visit to the next. This scale is not designed to make a diagnosis of depression or take the place of a professional diagnosis.
Answer each of the 18 items below about how you have felt and behaved during the past week. Be honest for the most accurate result.
I am a year old Female / Male / Other
1. I do things slowly.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
2. My future seems hopeless.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
3. It is hard for me to concentrate on reading.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
4. The pleasure and joy has gone out of my life.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
5. I have difficulty making decisions.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
6. I have lost interest in aspects of life that used to be important to me.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
7. I feel sad, blue, and unhappy.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
8. I am agitated and keep moving around.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
9. I feel fatigued.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
10. It takes great effort for me to do simple things.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
11. I feel that I am a guilty person who deserves to be punished.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
12. I feel like a failure.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
13. I feel lifeless -- more dead than alive.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
14. My sleep has been disturbed -- too little, too much, or broken sleep.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
15. I spend time thinking about HOW I might kill myself.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
16. I feel trapped or caught.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
17. I feel depressed even when good things happen to me.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
18. Without trying to diet, I have lost, or gained, weight.
Not at all
Just a little
Somewhat
Moderately
Quite a lot
Very much
Results of your
Depression Quiz
You scored a total of 0
No depression
You have answered this self-report questionnaire in such a way as to suggest that you do not likely currently suffer from a depressive disorder. You should not take this as a diagnosis or recommendation for treatment in any way, though. You experience the normal ups and downs of life.
------------------------------------------------------------------------------------------------
How Stressed Are You? Stress Test
By Psych Central Staff
~ 1 min to take
In the PAST WEEK, have you felt…
… strained?
… inadequate?
… overextended?
… confident?
… no sense of getting ahead?
… swamped by your responsibilities?
… that the odds were against you?
… that there wasn’t enough time to get to everything?
… like you were rushed?
… like you couldn’t cope?
… like you had a lot on your mind?
… powerless?
* All answers were (NEVER).
Results of your
Stress Test
You scored a total of 28
Stress is Unlikely
People who've scored similar to people experiencing every day, healthy levels of stress. Congratulations! You are living life and apparently coping with stress in a healthy manner.
Short-term funding: The Grind roastery
Table of contents
Executive Summary
Information about the Industry
Marketing Plan
Competitor Analysis
3 Year Income Statement
Assumptions
3 Year Proposed Funding Schedule
Break-Even Analysis
Expanding Internationally
Disadvantages and Advantages of Debt Financing
Venture Capital
Academic and Business References
Within my presentation, I will be reviewing my marketing plan along with an analysis of my competitors and why I feel I would be successful. I will review a 3 year plan with you with the hopes you can invest in my start up business.
2
Executive summary
All coffee is different. From the region, to the farm, to the roaster, to the brewer, all coffee is different. The key is to inform and educate ourselves on these variables and make small decisions in order to ensure excellency in flavor and consistency.
39% of younger consumers drink gourmet coffee – suggesting new opportunities for coffee companies.
40% of daily consumers are drinking coffee prepared out-of-home, reflecting a continuing trend in behavior as lifestyles become increasingly mobile. (Infographic: National Coffee Drinking Trends 2017).
The Grind Roaster provides the highest quality coffees, teas, sourced from the 13 nations in the world and crafted in unique and exciting ways. The company creates new coffee and tea recipes and improves upon existing ones to create that novelty that 62% of consumers love. There is a growing public awareness of organic products and a responsible sourcing and that is what The Grind Roaster looks to target: the needs, cares and concerns of both modern-day coffee lovers. The Grind realizes that it is not just the modern-day coffee drinkers, but also those that can just appreciate a good “cup of joe.” The Grind will offer low cost cups of pick-me-up. The company will offer coffee, tea and desserts; all created by company owners and associates. The company is seizing the moments of coffee needs and will use that to capture customers. “The average U.S. coffee drinker consumes 2.7 cups per day, with the average size of a coffee cup measuring 9 ounces. In total, approximately 150 million Americans drink 400 million cups of coffee per day -- or more than 140 billion cups per year” (Saad, 2015). The retail value of the U.S. coffee market is estimated to be $48 billion, according to the National Coffee Association (NCA). All coffee is different. From the region, to the farm, to the roaster, to the brewer, all coffee is different. The key is to inform and educate ourselves on these variables and make small decisions in order to ensure excellency in flavor and consistency.
“39% of younger consumers drink gourmet coffee – suggesting new opportunities for coffee companies.
40% of daily consumers are drinking coffee prepared out-of-home, reflecting a continuing trend in behavior as lifestyles become increasingly mobile” (Infographic: National Coffee Drinking Trends 2017).
I have been in management for many years and my loyalty and integrity is very high for my own expectations. I am committed to make this business work and I am searching for an investor that would believe and trust in my ability to make this business work. I am looking for $500k to help me get started in this project.
3
Industry Information
Frequency of Daily Coffee Consumption
This refers to consumers who reported having consumed a coffee beverage within the past day:
Ages 13-18: 37 percent, up 6 percent from last year
Ages 18-24: 50 percent, up 2 percent from last year
Ages 25-39: 63 percent, up 3 percent from last year
Ages 40-59: 64 percent, up 11 percent from last year
Ages 60+: 68 percent, up 4 percent from last year
Daily ‘Gourmet’ Consumption Daily consumption of ‘gourmet’ coffee beverages generally saw much higher rates of increase in 2017:
Ages 13-18: 29 percent
Ages 18-24: 39 percent, up 3 percent from last year
Ages 25-39: 50 percent, up 9 percent from last year
Ages 40-59: 39 percent, up 15 percent from last year
Ages 60+: 34 percent, up 10 percent from last year (11 percent); and nitrogen-infused (3 percent).
Coffee is one of the most consumed commodities in the world; loved by billions worldwide. It is attributed to maintaining production levels of all workers globally. Coffee is also the second-most-traded commodity. Consumption is chiefly seen in industrialized nations, however, its production in less developed nations. The coffee supply chain consists of growth, harvest, import/export, roasting, distribution, and retail. It is the top agricultural export for twelve countries and over 25 million small producers rely on coffee for a living. According to The National Coffee Association, experts measured all the ways that coffee contributes to the U.S economy:
“The total economic impact of the coffee industry in the United States in 2015 was $225.2 billion
Coffee-related economic activity comprises approximately 1.6% of the total U.S. gross domestic product
Consumers spent $74.2 billion on coffee in 2015
The coffee industry is responsible for 1,694,710 jobs in the US economy
The coffee industry generates nearly $28 billion in taxes (including ancillary goods)” ("National Coffee Association", n.d.).
The above information was gathered from Brown, N. (2017). Daily Coffee News. Retrieved from https://dailycoffeenews.com/2017/03/27/2017-us-coffee-drinking-trends-include-more-gourmet-more-youth/
4
Marketing Plan
Marketing Objectives
Competition
Trends: Pricing:
Distribution: Offerings
Promotions
Logo Placement
The marketing plan will emphasize the company’s commitment to bringing a less expensive and flavorsome cup of coffee to customers. This plan will cover the target market, competition within the market and any trends, both current and foreseeable. It will also cover pricing, distribution, offerings and promotions.
Marketing Objectives: Establish the company as a leading coffee retail sales chain in Monmouth County, NJ. The most recent census totaled 625,846 residents inside the county ("U.s. Census Bureau", 2016). Target consumers consist of coffee and tea drinkers of all ages and races.
Competition: Dunkin Donuts and Starbucks are the main competitors, however both lack the “hometown appeal.” The Grind Roaster will focus on locally owned and ran and emphasize this quality.
Trends: The Grind Roaster will be located in a commercial area with a hospital across the street, a high school and middle school close by and a train station that travels the Jersey Shore Coastline and enters into New York City. These are advantages that would not only attract the professionals who are in need of coffee, but also attract those that want a safe place to hang out with friends after school and be able to do homework.
Pricing: The high expense of sourcing will be offset by creating a lean enterprise that systematically reduces and eliminates waste. The higher cost will be justified to the consumer by emphasizing the quality of the product, and its minimal impact on the environment.
Distribution: The product will be supplied from physical retail locations similar to Starbucks and Dunkin Donuts. Coffee drive-up kiosks will also be used to increase availability in high population areas. Customers will also be able to purchase coffee grounds and teas from the company’s online website.
Offerings: The Grind Roasters will offer a rewards program that uses a business card that gets punched for each coffee you purchase. After 10 coffees, you get the eleventh one free.
Promotions: The company will employ online and radio promotions. The radio promotions will be short and evoke a feeling of community. Online promotions will be used via social media venues. Word of mouth for local businesses is huge!
Brand Recognition is key to any business. Th Grind Roaster will include a logo placement on cups and merchandise.
5
Competitor Analysis
Starbucks:
23,000 chain stores globally. Its
High brand recognition
Market share is 39.8%
Offerings include coffee, tea, and other consumables such as breakfast items, sandwiches, and prepackaged goods
Dunkin Donuts:
12,000 locations in 36 countries
Market share is 29.1%
Offerings include donuts, bagels, and other baked goods.
Coffee and other beverage sales account for over 65% of sales
McDonalds:
McDonald’s McCafe chain have more than 1300 operations world-wide
Success credit to McDonald’’s name brand
Starbucks, Dunkin Donuts and McDonald’s McCafe all have brand recognition on their side. The Grind Roaster will prioritize brand recognition and logo creation.
As a start-up business we must remember the customers and competition. We must constantly assess how wel or porrly they are doing. We must also assess what the needs of our customers are, constantly.
6
3 Year income statement projections
The Grind Roaster | 3 Year Income Statement | |||||||
INCOME | 2017 | 2018 | 2019 | % of TS | ||||
SALES | ||||||||
Q1 | $455,000 | $515,000 | $595,000 | |||||
Q2 | $465,000 | $570,000 | $675,000 | |||||
Q3 | $445,000 | $525,000 | $660,000 | |||||
Q4 | $455,000 | $550,000 | $635,000 | |||||
Total Sales (TS) | $1,820,000 | $2,160,000 | $2,565,000 | |||||
COST OF GOODS | ||||||||
Beginning Inventory | $255,000 | $267,000 | $268,000 | |||||
Purchases and Production Costs | $260,000 | $255,000 | $262,000 | |||||
Shipping and Delivery | $110,000 | $112,000 | $115,000 | |||||
Labor (wages and payroll) | $625,000 | $635,000 | $636,000 | |||||
Other | $27,000 | $28,000 | $28,000 | |||||
Less Ending Inventory | $95,000 | $96,000 | $89,000 | |||||
Total Cost of Goods Sold | $1,372,000 | $1,393,000 | $1,398,000 | |||||
GROSS PROFIT | $448,000 | $767,000 | $1,167,000 | |||||
Non-Operating Income | ||||||||
Interest Income | ||||||||
Rental Income | ||||||||
Other | ||||||||
Total Non-Operating Income | ||||||||
Total INCOME | $448,000 | $767,000 | $1,167,000 | |||||
EXPENSES | ||||||||
OPERATING EXPENCES | ||||||||
Accounting and Legal | $18,000 | $18,000 | $18,000 | |||||
Advertising | $150,000 | $150,000 | $150,000 | |||||
Deprecition | $45,000 | $45,000 | $45,000 | |||||
Dues and Subscriptions | ||||||||
Insurance | $12,000 | $12,000 | $12,000 | |||||
Interest Expense | ||||||||
Maintenance and Repairs | $8,000 | $8,000 | $8,000 | |||||
Office Supplies | $10,000 | $10,000 | $10,000 | |||||
Payroll Expenses | $9,500 | $9,500 | $9,500 | |||||
Postage | ||||||||
Rent | $26,000 | $27,000 | $28,000 | |||||
Research and Development | ||||||||
Salaries and Wages | ||||||||
Taxes and Licenses | $13,000 | $13,000 | $13,000 | |||||
Telephone | $3,000 | $3,000 | $3,000 | |||||
Travel | 10,000 | 12,000 | 12,000 | |||||
Utilities | $15,000 | $15,000 | $15,000 | |||||
Web Hosting and Domains | $1,200 | $1,200 | $1,200 | |||||
Other | ||||||||
Total Operating Expenses | $320,700 | $323,700 | $324,700 | |||||
NON-REOCURRING EXPENSES | ||||||||
Furniture, Equipment and Software | $80,000 | $80,000 | $80,000 | |||||
Gifts | $2,000 | $2,000 | $2,000 | |||||
Other | ||||||||
Total Non-Reocurring Expenses | $82,000 | $82,000 | $82,000 | |||||
Total EXPENSES | $402,700 | $405,700 | $406,700 | |||||
Net income Before Taxes | $245,300 | $553,300 | $942,800 | |||||
Income Tax Expense | $78,917 | $238,037 | $389,942 | |||||
NET INCOME | $166,383 | $315,263 | $552,858 | |||||
Owner Distributions / Dividends | $83,192 | $157,632 | $276,429 | |||||
Adjustment to Retained Earnings | $83,192 | $157,632 | $276,429 |
The 3 year income statement projections shows that The Grind Roasters will turn a profit and that expenses remain steady.
7
Assumptions
Sales growth will average 25-27% annually
Payroll (25-34% of revenue)
Beginning inventory (10-14% of revenue)
Purchases and production goods (10-14% of revenue)
Advertising (6-8%)
The Grind will focus the assumption of growth with how the average coffee companies initially performed. Production and payroll will be the greatest expenses. Other costly expenses are associated with advertising (to raise awareness), initial startup (location, hiring, machinery/equipment, and inventory acquisition), and any costs that may be driven by promotions and/or special offers. Coffee and tea consumers visit their establishments on average, 6 times weekly. The Grind Roaster knows that if we are able to stay within the price rates or cheaper and stay committed to the community, then we will be able to build or customer base, not only by the value of our work but also from word of mouth from our customers.
8
3 year proposed funding schedule
3 Year Proposed Funding Schedule | ||||||
Amount | Firm | Amount Approved | Date | Date Received | Fund Application | |
$250,000 | Founder/Owner | $250,000 | 1/8/18 | 1/23/18 | Start-up acquisition of store front rent ($26,000) and equipment/furniture ($80,000) | |
$500,000 | Bank | $500,000 | 1/9/18 | 1/24/18 | Inventory acquisition ($255,000) and hiring labor ($84,500) | |
$325,000 | Partner | Capital infusion, utiities and legal services | ||||
$100,000 | Partner | Capital infusion (owner equity) | ||||
Total Requested | $1,175,000 | |||||
Total Approved | $750,000 | |||||
Difference | $425,000 |
This funding schedule is based on The Grind Roaster’s need for capital. Total requested is $1.175M in funding with $750,00 having been approved and applied.
9
Break-even analysis
Breakeven = Fixed costs / (Unit Selling Prices – Variable Costs)
Average unit selling price for cup of coffee across all chains = $2.70
Assumed average unit selling price for The Grind Roaster coffee $2.75
Fixed costs = $1,492,700
Variable costs per unit = $1.65
Breakeven = $1,492,700 / ($2.75 - $1.65) = 1,357,000
The break-even analysis shows that The Grind Roaster must sell over 1 million cups of coffee to make a profit. Please keep in mind that this analysis is based off a regular cup of coffee priced at $2.75 and not on any of the specialty coffees on our menu. A separate break-even analysis was also performed for a Guatemalan medium roast is priced at $3.25 a cup would create a break-even analysis under 1 million.
10
Fixed Cost
Variable Cost
Cost Bid Pricing
Price Bid Costing
Formula
International Expansion
Japan: one of largest consumers of coffee and tea in the world
United Kingdom: coffee sales exceed $1B
Italy: tremendous love for coffee and mass consumer per capita
Expanding internationally to outsource labor and reduce manufacturing costs is of interest to The Grind Roaster. The counties selected for expansion represent some of the greatest industrialized coffee drinking countries in the world.
Japan: one of largest consumers of coffee and tea in the world
United Kingdom: coffee sales exceed $1B
Italy: tremendous love for coffee and mass consumer per capita
The factors to be considered are the economic indicators such as status of import/exports, market size, the rate of growth and the country’s economy. U.S. market share and how hard it is to enter into the industry are key factors as well as cultural and legal differences.
Tax rates for each country:
Japan: 30.86%
United Kingdom: 19%
Italy: 27.9%
11
Decision tree
Start-up of $300,000
Location size
Paper Ads
Social Media
Small
Radio Ads
Paper Ads
Social Media
Medium
Advertising Methods
Advertising Methods
This decision tree is based on $300,000 initial funding. The size of the storefront would definitely be an issue and that will then affect advertising, which in turn will affect sales. Having $200,000 given in 3 years is not sufficient.
12
Advantages and disadvantages of debt financing versus selling company stock
Debt Financing
Advantages include:
Owners retain ownership of the firm provides greater degree of financial freedom than equity financing
Less administrative costs
Debt interest is tax deductible.
Disadvantages include:
The firm is obligated to pay back the debt monthly, lenders may impose harsh penalties for late payments, failure to pay can adversely impact a company’s credit score, and it can be hard for newer firms to obtain since they have no established credit.
Selling Company Sock
Advantages:
No New Debt
Shared Risk
Disadvantages:
Loss of Ownership
Loss of Control
Advantages: Retain control over decision making and business relationship ends once you repay loan in full. Amount you pay in interest is tax deductible, which reduces net obligation. It is easier to plan how much capital and interest you will pay back each month.
Disadvantages: Must have good enough credit rating to receive financing. Good financial judgement is needed to make repayments; do not be overly dependent on debt because they could be considered “high risk”. Business assets could be at risk as collateral, including personally.
Common Stock: Investors have a say at meetings and benefit from higher stock prices and dividends. Companies pay the cost of issuance for underwrites the new issue. Maintain credit rating by issuing stock and not taking on debt.
13
Venture capital
Business Plan
Proposed meeting
Due diligence
Term Sheet
Venture capital is the financing that investors provide start-up companies that are believed to have long-term growth potential. These investors are usually monetarily rich people or an investment bank. It does not have to be monetary, however, it can also be in some form of expertise. Investors are looking for above-average returns. One downside is that investors often get equity or stock in the company and are able to help make decisions for the company. One can see venture capitals more so for new or emerging companies.
First there is a business plan proposed and meeting, which includes a description of the opportunity at hand and market size; thorough investigation of the management; review of competitive landscape and solutions; financial projections; executive summary and business plan and capitalization table. All of this will be reviewed by the investor. Then a meeting will occur if you fit with the investors preferences. Then there is a due diligence phase that will include a lot of communication, interviews, references, strategy evaluations, just to name a few. Then, a term sheet will be presented by the investor that states the basic terms and conditions of the investment agreement.
I would not advise venture capital for The Grind Roaster. The issue with the start-up company I have presented is that there are so many alternatives. This industry and the product is not truly unique. I further believe that the return will not be as great, right away and the fact that an investor may play a role in how I am dreaming to open and run the company is not cohesive to my business plan and strategy.
14
Academic and business references
Bank, E. (n.d.). Chron. Retrieved from http:// smallbusiness.chron.com/advantages-issuing-common-stock-vs-long-term-debt-76860.html
Brown, N. (2017). Daily Coffee News. Retrieved from https://dailycoffeenews.com/2017/03/27/2017-us-coffee-drinking-trends-include-more-gourmet-more-youth/
Investopedia. (n.d.). Retrieved from https://www.investopedia.com/terms/v/venturecapital.asp
Kunigis, a. (n.d.). Business Owner's Playbook. Retrieved from https:// www.thehartford.com/business-playbook/in-depth/debt-financing
National Coffee Association. (n.d.). Retrieved from http://www.ncausa.org
National Coffee Association. (2017). Retrieved from https://nationalcoffeeblog.org/2017/04/03/infographic-national-coffee-drinking-trends-2017/
Academic and business references
Saad, L. (2015). GALLUP News. Retrieved from http:// news.gallup.com/poll/184388/americans-coffee-consumption-steady-few-cut-back.aspx
Statistica. (2017). Retrieved from https://www.statista.com/statistics/543629/us-coffee-retail-sales /
TradingEconomics. (2018). Retrieved from https:// tradingeconomics.com/united-kingdom/corporate-tax-rate
TradingEconomics. (2018). Retrieved from https:// tradingeconomics.com/japan/corporate-tax-rate
TradingEconomics. (2018). Retrieved from https:// tradingeconomics.com/italy/corporate-tax-rate
U.S. Census Bureau. (2016). Retrieved from https://www.census.gov/quickfacts/fact/table/monmouthcountynewjersey/PST045216

Get help from top-rated tutors in any subject.
Efficiently complete your homework and academic assignments by getting help from the experts at homeworkarchive.com