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Table of Contents

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

Chart: Highlights..................................................................................................................................2
1.1 Mission...............................................................................................................................................2
1.2 Objectives..........................................................................................................................................2
1.3 Keys to Success..................................................................................................................................2
2.0 Company Summary...............................................................................................................................3
2.1 Company Ownership.........................................................................................................................3
2.2 Start-up Summary..............................................................................................................................3
Table: Start-up.....................................................................................................................................3
..............................................................................................................................................................3
Table: Start-up Funding.......................................................................................................................4
Chart: Start-up......................................................................................................................................5
3.0 Products..................................................................................................................................................5
4.0 Market Analysis Summary....................................................................................................................6
4.1 Market Segmentation.........................................................................................................................6
Table: Market Analysis........................................................................................................................7
Chart: Market Analysis (Pie)...............................................................................................................8
4.2 Target Market Segment Strategy.......................................................................................................8
4.3 Industry Analysis...............................................................................................................................9
4.3.1 Competition and Buying Patterns.............................................................................................11
5.0 Strategy and Implementation Summary...............................................................................................11
5.1 Competitive Edge.............................................................................................................................11
5.2 Marketing Strategy...........................................................................................................................12
5.3 Sales Strategy...................................................................................................................................12
5.3.1 Sales Forecast............................................................................................................................13
Table: Sales Forecast.....................................................................................................................13
Chart: Sales Monthly.....................................................................................................................14
Chart: Sales by Year......................................................................................................................14
5.4 Milestones........................................................................................................................................15
Table: Milestones...............................................................................................................................15
Chart: Milestones...............................................................................................................................15
6.0 Web Plan Summary.............................................................................................................................16
6.1 Website Marketing Strategy............................................................................................................16
6.2 Development Requirements.............................................................................................................16
7.0 Management Summary........................................................................................................................16
7.1 Personnel Plan..................................................................................................................................17
Table: Personnel.................................................................................................................................17
....................................................................................................................................................................17
8.0 Financial Plan.......................................................................................................................................18
8.1 Important Assumptions....................................................................................................................18
Table: General Assumptions..............................................................................................................18
................................................................................................................................................................18
8.2 Break-even Analysis........................................................................................................................19
Table: Break-even Analysis...............................................................................................................19
Page 1

Table of Contents

Chart: Break-even Analysis...............................................................................................................19

8.3 Projected Profit and Loss.................................................................................................................20
Table: Profit and Loss........................................................................................................................20
Chart: Profit Monthly.........................................................................................................................21
Chart: Profit Yearly............................................................................................................................21
Chart: Gross Margin Yearly...............................................................................................................22
8.4 Projected Cash Flow........................................................................................................................23
Table: Cash Flow...............................................................................................................................23
Chart: Cash.........................................................................................................................................24
8.5 Projected Balance Sheet...................................................................................................................25
Table: Balance Sheet..........................................................................................................................25
8.6 Business Ratios................................................................................................................................25
Table: Ratios......................................................................................................................................26
Table: Sales Forecast...................................................................................................................................1
......................................................................................................................................................................1
Table: Personnel...........................................................................................................................................2
......................................................................................................................................................................2
Table: General Assumptions........................................................................................................................3
......................................................................................................................................................................3
Table: Profit and Loss..................................................................................................................................4
......................................................................................................................................................................4
Table: Cash Flow.........................................................................................................................................5
Table: Balance Sheet....................................................................................................................................6

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Beanisimo Coffee

1.0 Executive Summary

Beanisimo Coffee is a start up Salem, Oregon based coffee roaster that has developed a line of
premium coffees and espressos. Beanisimo Coffee has been formed as an Oregon S Corporation
by the founder Frank Jones. Frank has brought old world Italian traditions and recipes to meet
the market need for premium coffees.
Keys to Success
Beanisimo Coffee has identified three keys that will be instrumental to its success. The first is
the need to develop the finest coffee available. The second requirement to develop a top notch
customer service organization that exceeds customer expectations. The last element is to
employ strict financial controls. The development and implementation of finance and accounting
controls will help ensure fiscal success.
Target Market Segments
Beanisimo Coffee has identified three distinct customer segments that it will actively pursue.
The first group is made up of coffee houses, drive thru establishments, and espresso carts. This
customer segment has 187 potential customers and is growing at a 7% annual rate. The second
group is restaurants with 107 possible customers and is growing at an 8% annual rate. The last
segment is grocery stores that sell unprepared beans to their customers in either whole bean or
ground forms. This segment has 97 potential customers and a 7% growth rate.
Management
Beanisimo Coffee is being lead by Frank Jones. Frank has a strong educational background and
a wealth of applicable industry experience. Frank received his Bachelor degree and MBA from
Willamette University. Frank has worked at several coffee shops, and has worked in Italy as a
coffee roaster under the wing of an Italian master roaster.
Through a combination of a solid business model, strong educational credentials, and
proprietary coffee roasting techniques, Frank will be able to turn Beanisimo Coffee from a startup business to a significant market player in the high-end coffee market in the Willamette River
Valley. Sales for year two are forecasted to be $312,000 rising to $355,000 in year three. Net
profit is projected to be 7.58% for year two and will jump to 9.58% in year three.

Page 1

Beanisimo Coffee

Chart: Highlights

1.1 Mission
It is Beanisimo Coffee's mission to offer the finest selection of coffees. By using the customs
from a 54-year-old Italian master roaster, Beanisimo Coffee's products will surpass all of its
competition. A strong customer service ethic will support the fantastic product.
1.2 Objectives
Beanisimo Coffee's objectives are to build brand awareness and customer service excellence,
while increasing sales. Beanisimo Coffee intends to utilize the following strategies to achieve
these objectives:

Develop a high-quality menu of different coffee blends.

Provide an excellent service experience, anticipating the needs of the customers and
delivering the best service.
Leverage the old traditional Italian roasting methods to increase market penetration with
the finest product available.

1.3 Keys to Success

Beanisimo Coffee has identified several keys which will be instrumental in the success of the
company.

Develop the finest product.

Exceed customer expectations.
Employ strict financial controls.

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Beanisimo Coffee

2.0 Company Summary

Beanisimo Coffee is a start up Salem, Oregon based coffee roaster that has developed a line of
premium coffees and espressos. Beanisimo Coffee has been formed as an Oregon S Corporation
by the founder Frank Jones. Frank has brought old world Italian traditions and recipes to meet
the market need for premium coffees.
2.1 Company Ownership
Beanisimo Coffee is an Oregon S Corporation. The primary stockholder and founder is Frank
Jones.
2.2 Start-up Summary
The following equipment will be needed for the start up of the company:

Three workstation computers and one central file server.

Two laser printers.
Computer software: Microsoft Office, and Peachtree Accounting.
Assorted office furniture and equipment.
Assorted buckets, labels, bags, labels, and hooks.
Topre Izmir perforated drum roaster.
Heat based bag sealer.
Hobart scale.
Van.

Table: Start-up

Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Consultants
Research and Development
Total Start-up Expenses

$5,000
$500
$1,000
$1,500
$3,000
$11,000

Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets

$116,000
$0
$0
$78,000
$194,000

Total Requirements

$205,000

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Beanisimo Coffee

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$11,000
$194,000
$205,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$78,000
$116,000
$0
$116,000
$194,000

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$0
$0
$0
$0

Capital
Planned Investment
Investor 1
Investor 2
Other
Additional Investment Requirement
Total Planned Investment

$80,000
$65,000
$60,000
$0
$205,000

Loss at Start-up (Start-up Expenses)

Total Capital

($11,000)
$194,000

Total Capital and Liabilities

$194,000

Total Funding

$205,000

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Beanisimo Coffee

Chart: Start-up

3.0 Products
Beanisimo Coffee offers a wide range of specially blended and roasted coffees. Beanisimo
Coffee will be using customs passed down from a 54 year old Italian master coffee roaster.
Beanisimo Coffee first will select and cup the coffee, then blend different beans before roasting.
The key to a wonderful bag of roasted beans is the blending of different coffee beans. Coffee
beans are a global commodity. There are many different types of beans, distinctive in the genre
of plant that the bean comes from as well as the region that the bean is grown. Beyond these
distinctions, beans are still a commodity.
Blending different types of beans makes huge differences. Beanisimo Coffee is privy to decades
old blending recipes from old world Italy.The roasting technique also plays a role in the taste of
the coffee.
Beanisimo Coffee will offer a wide range of coffees including:

Italian Roast
French Roast
Columbian Dark
African Roast
Sumatra
Bistro Blend
Kona
Kenya
Decaf- available in the following blends: Bistro, Sumatra, French and Italian Roasts
Espresso and Decaf Espresso

Page 5

Beanisimo Coffee

Each coffee is available in one pound and five pound packages, in both whole bean and ground
versions. Every product that Beanisimo Coffee produces attempts to be the best in its
respective product category based on quality and taste.
4.0 Market Analysis Summary
Beanisimo Coffee has decided to concentrate on three distinct customer segments. The first is
coffee houses/drive thru/espresso carts, restaurants, and the last is grocery stores. Each of the
customers is distinct. The first segment prepares beverages for their clients, as does the second
group along with meals, and the third segment sells the whole bean and ground coffee
unprepared to their customers.
While the coffee industry as a whole has been stagnate for a while, the high-end gourmet
coffee market is still growing. This can be attributed to a number of factors including the
maturing and increased sophistication of the American palette. Beanisimo Coffee faces
competition from several competitors who focus on convenience or price as opposed to product
quality which is the strength of Beanisimo Coffee.
4.1 Market Segmentation
Beanisimo Coffee has segmented their market into three distinct customer segments:
1. Coffee houses/drive thrus/carts: These customers are purchasing coffee beans for the
preparation and sale of coffee and espresso based drinks. Their establishments serve a wide
variety of coffee and espresso beverages to customers that visit the coffee houses, drive
thrus, or cart based servers.
2. Restaurants: These establishments are purchasing coffee and espresso to serve to their
retail food customers.
3. Grocery Stores: These customers are purchasing the beans for either prepackaged, or bulk,
resale to their customers. The grocers do not prepare the drinks for the customers like the
other customer segments, they only sell the Beanisimo product as is purchased from
Beanisimo Coffee.
Below is some demographic information of the end consumers of the above customer
segments.

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Beanisimo Coffee

U.S. Demographic Coffee Consumption Patterns

2001- 2002 U.S. Coffee Drinking Trends Survey (according to the National Coffee Association):
2002
107 million
57 million

U.S. adults who drank coffee every day

U.S. adults who drank coffee occasionally
Gender:

2003
108.7 million
52 million

Men and women consume the same number of cups per day.
Women are more excited about varieties and source of relaxation (social).
Men like that coffee helps them "get things done."
Women are more price conscious than men.

Age:

18-25: prefer high caffeine, hot or iced drinks, all high octane, richer blends.
30-60: prefer premium and espresso with half the caffeine. Lite blends and half-caffeinated
grew approximately 7% in 2001.

Other:

64% of all coffee is consumed at breakfast; 28% between meals; 8% at all other meals.
Sweetened or plain: 35% drink coffee black; 65% add sweetener and/or creamer.
The average daily coffee drinker consumes 3.1 cups per day.
In 2002, there were 29 million people who drank gourmet coffee every day. Gourmet is
defined as specialty coffee (premium), espresso-based beverages (cappuccino, latte, caf
mocha, espresso), or frozen and iced coffee beverages.

Table: Market Analysis

Market Analysis

Potential Customers
Coffee houses, etc.
Restaurants
Grocery stores
Total

Year 1

Year 2

Year 3

Year 4

Year 5

120
107
97
324

128
207
104
439

137
224
111
472

147
242
119
508

157
261
127
545

Growth
7%
8%
7%
13.88%

CAGR
6.95%
24.97%
6.97%
13.88%

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Beanisimo Coffee

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy

Beanisimo Coffee will be focusing on the three previously mentioned customer segments
because of their desire of having a high-quality product.
The coffee shops/drive thrus/carts segment often appreciates the finest quality coffee/espresso
product. Restaurants are another customer segment that is attractive because they have a
constant need for coffee and coffee/espresso is a common beverage served with meals,
especially when people eat out.
Additionally, restaurants are a year round business that serves coffee at all times during the
day. Lastly, Beanisimo Coffee will target grocery stores which sell coffee in unprepared forms to
a wide range of customers. Grocery stores are a natural customer since many people buy the
bulk of the food they consume during the week from a grocery store, including coffee.

Page 8

Beanisimo Coffee

4.3 Industry Analysis

Global Coffee Market: Coffee is the second-largest commodity traded after oil, with the
worldwide retail coffee market being a $56 billion industry.
The coffee belt is roughly bounded by the Tropics of Cancer and Capricorn and is mainly
comprised of 28 countries. The top-ten coffee-producing countries are, in descending order:
Brazil, Vietnam, Columbia, Indonesia, Mexico, Ethiopia, India, Guatemala, Ivory Coast, and
Uganda.
During the 1990's, Vietnam moved from fourth largest to second largest producer of coffee in
the world, with most of its production in robusta beans. Coffee is available in several forms:
bean, ground, liquid, and soluble: powdered, granules, freeze-dried. Worldwide, with the
exception of North America, people prefer instant coffee and coffee is mainly prepared at home.
Top coffee-importing countries as a % of world supplies:
USA
Germany
Japan
France
Italy
Spain
Holland
UK
Sweden

55.6%
14.0%
7.7%
7.5%
6.2%
3.8%
3.4%
3.4%
2.2%

Top coffee-consuming regions (by pounds consumed per capita per year):
Northern Europe*
Central Europe
South America
Southern Europe
North America
Australia
Japan
* Does not include the UK, which only

23
16
7
10
10
5
5
consumes 5 pounds per capita per year.

U.S. Coffee Market: The total U.S. coffee market is projected to exceed $25 billion in
2002:

Revenues

1993
$13 B

1999
$18.5 B

2001
$20.7 B

The overall U.S. consumption of coffee has stagnated in recent years. However, consumers'
purchase of gourmet coffee (specialty and premium) is increasing, according to the National
Coffee Association.

Page 9

Beanisimo Coffee

Consumers are choosing to drink higher-grade coffees, moving away from price-based
purchasing to trends that focus on increased quality in a wide variety of products. In the U.S.,
the coffee market has been segmented into two major categories: mass-market and specialty
coffees.
1. Mass-Market: Mainly lower-priced product sold through grocery retail outlets and
convenience stores. Mass-market coffee consumption is declining approximately 5% per
year as people of all ages embrace out-of-home specialty coffees. Grocery retail outlets are
providing the consumer with more premium coffee choices and are partnering with specialty
coffee roasters capturing an increasing share of the mass-market sales channels.
2. Specialty Coffee: Characterized by a quality grade product with branding, historically sold
only through coffee shops. Five years ago, there was a clear line between mass-market and
specialty coffees in quality, price and distribution channels. Today, there are two subcategories that make the positioning more blurred: Premium and Specialty coffees.
Specialty coffee retailers sell higher quality coffee at premium prices. Now, premium coffees
have been introduced into other distribution channels to sell below specialty coffee retailer
prices, undercutting the exclusive advantage coffee retailers once had. Specialty coffee
sales grew 38% from $7.76 billion in 2000 to $10.71 billion in 2001, comprising 30% of the
total U.S. coffee market. The specialty coffee market is characterized by being high
fragmented with one large player, several mid-tier companies, and thousands of small
regional companies.
Before the success of the specialty coffee retailers in the 90's, coffee was a breakfast drink and
choices were caffeinated or decaffeinated. The incredible success of the specialty coffee retailer
can be attributed to introducing coffee as a social drink and providing the consumer with new
unimagined choices of coffee drinks while introducing and conditioning the consumer to the
taste of specialty coffees.
Trends within the Industry:

In the U.S., Specialty coffee sales grew 38% from $7.76 billion in 2000 to $10.71 billion in
2001, comprising 30% of the market. Thanks in large part to the marketing efforts of
Starbucks, specialty coffee has become mainstream. It is the primary growth driver in the
otherwise flat or declining coffee industry. Specialty coffee, which was once limited to coffee
shops, is now available in a wide variety of mass-market channels.

Specialty coffee is moving into mass-market channels. Coffee is no longer being viewed as
just a breakfast beverage; it is now a social beverage, and people like to drink premium
branded coffee throughout the day.
This has spurred partnerships with convenience stores and service companies that provide
coffee to offices and throughout the hospitality industry. There is also a change in the type
and quality of vending machines. Coffee vending companies are converting their vending
machines to branded coffee.

Page 10

Beanisimo Coffee

4.3.1 Competition and Buying Patterns

Beanisimo Coffee several different competitors:

Allan Brothers: This Oregon based company operates as both a roaster as well as running
coffee houses in Salem, Eugene, and Corvalis. The price point for their coffee is midway.
The quality is decent, particularly at its price point.

Caffetto: This company widely distributes their roasted coffee throughout the Willamette
River Valley. The quality and price point is pretty low. This company's coffees are attractive
if the customer is very price sensitive and need an inexpensive product.

Assorted varieties distributed by food service vendors (e.g., Food Service of America and
Sysco): These varieties are offered at a mid-price point with a low product quality. What
you do get with these offerings is individual serving sizes. For a lot of restaurants this is
advantageous, but the costs is carried over to the customer for this feature.

The buying patterns for customers is based on convenience, cost, and quality. Some customers
are willing to pay more for the convenience of individual sized servings and the benefit of
buying coffee from their existing food product vendor. For others coffee is just one more thing
on the menu and quality is not that important. Lastly, there are many companies that recognize
high quality coffee and espresso and will not settle for anything less.
5.0 Strategy and Implementation Summary
Beanisimo Coffee will leverage its competitive edge of the highest quality product to quickly
gain market penetration. This competitive edge is sustainable because it is based on the
traditional roasting techniques of an old Italian master roaster. Beanisimo Coffee's marketing
effort will be based on the communications that assert that Beanisimo Coffee has by far the
best products. Beanisimo Coffee will be vocal in their assertion of the message that while its
coffee costs a bit more, the variance is not material and the difference in quality is
immeasurable. The sales strategy will work on converting perspective customers into long-term
customers by emphasizing high-quality products and high levels of customer service. This
strategy recognizes the fact that even though the company may have the best product, without
excellent customer service the organization will not succeed.
5.1 Competitive Edge
Beanisimo Coffee's competitive edge is its market leading product quality. By leveraging
personal relationships, Beanisimo Coffee has gained the recipes and knowledge of an old Italian
master roaster. Part of Beanisimo Coffee's secret is the old world roasting techniques, part of
the winning formula is the art of blending different green beans to come up with special recipes.
Green coffee beans are a commodity, therefore any variations in one company's coffee to
another is based on roasting techniques if they are using the same types of beans. Beanisimo
Coffee is able to stand out among its competitors by using time tested blends of different green
beans to come up with compelling final products. This competitive edge is sustainable in the
sense that this information that Beanisimo Coffee possesses is a trade secret and not available
to other roasters. This will ensure Beanisimo Coffee will always have the finest products.

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Beanisimo Coffee

5.2 Marketing Strategy

Beanisimo Coffee's marketing strategy will communicate to the target customer segments
that its product clearly exceeds all of the competitors. The strategy will employ several methods
to communicate the message. The first will be a print advertising campaign. Several different
sources will be used including a local restaurant industry journal as well as a regional coffee
shop trade publication. Advertisements in these publications will be effective in reaching the
target audience.
A second method that Beanisimo Coffee will use to "get out the word" will be by having several
different cuppings. A cupping is analogous to a wine tasting where many different varieties are
tasted, compared, and analyzed. The cuppings will be a perfect opportunity for Beanisimo
Coffee to have prospective customers taste the difference between its products and the
competition. To develop awareness of the superior product offerings, Beanisimo Coffee must
offer a superior level of customer service to support the products. Beanisimo Coffee recognizes
that you cannot solely compete on product alone, that much of the transaction involves
excellent customer service.
5.3 Sales Strategy
The sales strategy recognizes the need for the company as a whole to back up its superior
product offerings with excellent service. This mantra is important because if there was not a
service organization to back up the product, there would be no customers after the second or
third purchase. Consequently, the sales strategy will focus on customer support and making the
customer's experience with Beanisimo Coffee as positive as possible. This strategy will use
account managers that look after individual customers, ensuring that their needs are being
met. The account managers will be responsible for a certain number of existing accounts as well
as will be provided the resources to attract new accounts.

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Beanisimo Coffee

5.3.1 Sales Forecast

The sales forecast, described graphically in the following charts, is conservative in order to
prevent unrealistic expectations and to help ensure the achievement of these goals. Sales will
grow slowly but incrementally. As a start-up organization, it is realistic to expect that it will take
time to grow the customer base so that it is at a sustainable level.
As mentioned in the previous section, account managers will be used to service existing
customers as well as generate new accounts. Having account managers with a vested interest
in the satisfaction of the customers will help ensure disciplined sales growth. Without account
managers, the management believes that it would be too easy for customers to "fall through
the cracks."
Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

Coffee houses
Restaurants
Grocery stores
Total Sales

$35,824
$22,211
$24,360
$82,395

$136,004
$84,322
$92,483
$312,809

$154,545
$95,818
$105,091
$355,454

Direct Cost of Sales

Coffee houses
Restaurants
Grocery stores
Subtotal Direct Cost of Sales

Year 1
$11,822
$7,330
$8,039
$27,190

Year 2
$44,881
$27,826
$30,519
$103,227

Year 3
$51,000
$31,620
$34,680
$117,300

Sales

Page 13

Beanisimo Coffee

Chart: Sales Monthly

Chart: Sales by Year

Page 14

Beanisimo Coffee

5.4 Milestones
Beanisimo Coffee has developed several milestones that will serve as a goal to which the entire
organization will strive to achieve. All of the milestones are measurable allowing the
responsible department to track progress and assess their ability to reach the milestone.

Business plan completion.

First major account: This will be the first large account that provides the company with a
material recurring revenue stream.
Profitability: For the accounting/finance department, this is a significant milestone.
Revenue exceeding $300,000.

Table: Milestones

Milestones
Milestone
Business plan completion
First major account
Profitability
Revenue >$500,000
Totals

Start Date
1/1/2004
1/1/2004
1/1/2004
1/1/2004

End Date
2/15/2004
6/15/2004
10/30/2005
6/15/2006

Budget
$0
$0
$0
$0

Manager
Frank
Sales Manager
Frank
Sales Manager

Department
Operations
Sales
Accounting
Sales

$0

Chart: Milestones

Page 15

Beanisimo Coffee

6.0 Web Plan Summary

A website will be used to provide information regarding Beanisimo Coffee and the offered
products to current and prospective customers. The site will be used for informational purposes,
it will be not initially used for commerce purposes. Once the organization has been operating
for a while they will reconsider the demand for coffee to be sold via the website.
6.1 Website Marketing Strategy
The marketing strategy for the website will attempt to develop awareness for the website
thereby directing people to the site for more information regarding the complete line of coffees
and espressos that Beanisimo Coffee offers. Beanisimo Coffee will make submissions to search
engines such as Google! to ensure that when a perspective customer types in "gourmet coffee"
or some other such key word that Beanisimo Coffee's site is high up on the list of hits. In
addition to search engine submissions, all of Beanisimo Coffee's promotional material will have
the URL for the website, encouraging people to visit the site.
6.2 Development Requirements
As mentioned before, the website will be used as a source of information. Because it will not, at
least initially, have an e-commerce component to it, the development requirements will not be
that significant. Beanisimo Coffee will leverage the technical expertise of a computer science
graduate student (who typically work at below market wages) to develop the informational site.
7.0 Management Summary
Frank Jones, the founder and driving force of Beanisimo Coffee will be the main component of
the management team. Frank received his Bachelor of Arts and MBA from Willamette
University. Frank has worked as a barista at several different coffee houses, and with an Italian
master roaster who took him under his wing and showed him all aspects of the business. After
one year in Italy Frank returned to the states and began to work on a business plan for a coffee
roasting company.

Page 16

Beanisimo Coffee

7.1 Personnel Plan

Responsibilities within Beanisimo Coffee will be delegated as follows:

Frank: Business development, some accounting, some sales, and roasting.

Sales manager: This person is responsible for the sales effort and will be the account
manager for all of the accounts initially and will develop new sales accounts as well.

Sales: As the business grows a sales person will be hired for account management
responsibilities as well as some new sales development.

Shipping: One person will be hired for the position of shipping and delivery. For delivery
within the Willamette River Valley, deliveries will be made by the company vehicle. Other
shipments that are of greater distance from Beanisimo Coffee will be sent via UPS. This
position will coordinate all aspects of order fulfillment.

Support staff: This position will employ initially one person in a capacity of supporting
operations in a multitude of ways based on need. At times they will help support production
and shipping.

Administrative support: This position will help with some of the accounting activities as well
as other administrative support functions.

Table: Personnel

Personnel Plan
Year 1

Year 2

Year 3

Frank
Sales manager
Sales
Support
Shipping
Administration
Total People

$24,000
$20,000
$10,500
$11,520
$7,680
$10,240
6

$24,000
$24,000
$18,000
$15,360
$15,360
$15,360
6

$30,000
$30,000
$18,000
$15,360
$15,360
$15,360
6

Total Payroll

$83,940

$112,080

$124,080

Page 17

Beanisimo Coffee

8.0 Financial Plan

The following sections will outline important financial information.
8.1 Important Assumptions
The following table details important Financial Assumptions.
Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1

Year 2

Year 3

1
10.00%
10.00%
30.00%
0

2
10.00%
10.00%
30.00%
0

3
10.00%
10.00%
30.00%
0

Page 18

Beanisimo Coffee

8.2 Break-even Analysis

The Break-even Analysis indicates that approximately $19,000 will be needed in monthly
revenue to reach the break-even point.
Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$19,170

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

33%
$12,844

Chart: Break-even Analysis

Page 19

Beanisimo Coffee

8.3 Projected Profit and Loss

The following table will indicate Projected Profit and Loss.
Table: Profit and Loss

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales
Direct Cost of Sales
Other Costs of Goods
Total Cost of Sales

$82,395
$27,190
$0
$27,190

$312,809
$103,227
$0
$103,227

$355,454
$117,300
$0
$117,300

Gross Margin
Gross Margin %

$55,205
67.00%

$209,582
67.00%

$238,154
67.00%

$83,940
$8,394
$15,600
$14,400
$7,800
$9,000
$12,591
$2,400

$112,080
$11,208
$15,600
$14,400
$7,800
$9,000
$16,812
$2,400

$124,080
$12,408
$15,600
$14,400
$7,800
$9,000
$18,612
$2,400

Total Operating Expenses

$154,125

$189,300

$204,300

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

($98,920)
($83,320)
$0
$0

$20,282
$35,882
$0
$6,085

$33,854
$49,454
$0
$10,156

Net Profit
Net Profit/Sales

($98,920)
-120.06%

$14,198
4.54%

$23,698
6.67%

Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Other

Page 20

Beanisimo Coffee

Chart: Profit Monthly

Chart: Profit Yearly

Page 21

Beanisimo Coffee

Chart: Gross Margin Yearly

Page 22

Beanisimo Coffee

8.4 Projected Cash Flow

The following table and chart will detail information regarding Cash Flow.
Table: Cash Flow

Pro Forma Cash Flow

Year 1

Year 2

Year 3

$20,599
$43,327
$63,926

$78,202
$182,958
$261,161

$88,863
$257,031
$345,895

$0
$0
$0
$0
$0
$0
$0
$63,926

$0
$0
$0
$0
$0
$0
$20,000
$281,161

$0
$0
$0
$0
$0
$0
$0
$345,895

Year 1

Year 2

Year 3

$83,940
$77,036
$160,976

$112,080
$178,464
$290,544

$124,080
$193,667
$317,747

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

$0
$0
$0
$0
$0
$0
$0
$160,976

$0
$0
$0
$0
$0
$0
$0
$290,544

$0
$0
$0
$0
$0
$0
$0
$317,747

Net Cash Flow

Cash Balance

($97,050)
$18,950

($9,383)
$9,567

$28,148
$37,715

Cash Received

Cash from Operations

Cash Sales
Cash from Receivables
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

Page 23

Beanisimo Coffee

Chart: Cash

Page 24

Beanisimo Coffee

8.5 Projected Balance Sheet

The following table displays the Projected Balance Sheet.
Table: Balance Sheet

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

$18,950
$18,469
$4,722
$0
$42,141

$9,567
$70,118
$17,927
$0
$97,612

$37,715
$79,677
$20,372
$0
$137,763

$78,000
$15,600
$62,400
$104,541

$78,000
$31,200
$46,800
$144,412

$78,000
$46,800
$31,200
$168,963

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$9,461
$0
$0
$9,461

$15,135
$0
$0
$15,135

$15,988
$0
$0
$15,988

Long-term Liabilities
Total Liabilities

$0
$9,461

$0
$15,135

$0
$15,988

$205,000
($11,000)
($98,920)
$95,080
$104,541

$225,000
($109,920)
$14,198
$129,277
$144,412

$225,000
($95,723)
$23,698
$152,975
$168,963

$95,080

$129,277

$152,975

Assets

Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

8.6 Business Ratios

The following table shows important Business Ratios, specific to Beanisimo as well as the
industry as a whole.

Page 25

Beanisimo Coffee

Table: Ratios

Ratio Analysis
Year 1
n.a.

Year 2
279.64%

Year 3
13.63%

Industry Profile
-2.25%

17.67%
4.52%
0.00%
40.31%
59.69%
100.00%

48.55%
12.41%
0.00%
67.59%
32.41%
100.00%

47.16%
12.06%
0.00%
81.53%
18.47%
100.00%

20.65%
16.07%
21.35%
58.07%
41.93%
100.00%

9.05%
0.00%
9.05%
90.95%

10.48%
0.00%
10.48%
89.52%

9.46%
0.00%
9.46%
90.54%

21.87%
19.28%
41.15%
58.85%

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes

100.00%
67.00%
187.06%
0.00%
-120.06%

100.00%
67.00%
62.46%
0.00%
6.48%

100.00%
67.00%
60.33%
0.00%
9.52%

100.00%
32.41%
21.65%
1.81%
1.84%

Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets

4.45
3.95
9.05%
-104.04%
-94.62%

6.45
5.27
10.48%
15.69%
14.04%

8.62
7.34
9.46%
22.13%
20.04%

2.24
1.31
3.37%
45.32%
6.17%

Additional Ratios
Net Profit Margin
Return on Equity

Year 1
-120.06%
-104.04%

Year 2
4.54%
10.98%

Year 3
6.67%
15.49%

n.a
n.a

3.35
55
10.91
9.14
27
0.79

3.35
69
9.12
12.17
24
2.17

3.35
103
6.13
12.17
29
2.10

n.a
n.a
n.a
n.a
n.a
n.a

0.10
1.00

0.12
1.00

0.10
1.00

n.a
n.a

$32,680
0.00

$82,477
0.00

$121,775
0.00

n.a
n.a

1.27
9%
2.00
0.87

0.46
10%
0.63
2.42

0.48
9%
2.36
2.32

n.a
n.a
n.a
n.a

Sales Growth
Percent of Total Assets
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth

Page 26

Beanisimo Coffee

Dividend Payout

0.00

0.00

0.00

n.a

Page 27

Appendix
Table: Sales Forecast

Sales Forecast
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$0
$0
$0

$0
$0
$0

$0
$0
$0

$2,500
$1,550
$1,700

$2,656
$1,647
$1,806

$2,899
$1,797
$1,971

$3,365
$2,086
$2,288

$3,989
$2,473
$2,713

$4,545
$2,818
$3,091

$4,989
$3,093
$3,393

$5,225
$3,240
$3,553

$5,656
$3,507
$3,846

$0

$0

$0

$5,750

$6,109

$6,668

$7,740

$9,175

$10,454

$11,475

$12,018

$13,009

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Coffee houses

$0

$0

$0

$825

$876

$957

$1,110

$1,316

$1,500

$1,646

$1,724

$1,866

Restaurants

$0

$0

$0

$512

$543

$593

$688

$816

$930

$1,021

$1,069

$1,157

Grocery stores

$0

$0

$0

$561

$596

$651

$755

$895

$1,020

$1,120

$1,172

$1,269

Subtotal Direct Cost of Sales

$0

$0

$0

$1,898

$2,016

$2,200

$2,554

$3,028

$3,450

$3,787

$3,966

$4,293

Sales
Coffee houses
Restaurants
Grocery stores
Total Sales

Direct Cost of Sales

0%
0%
0%

Page 1

Appendix
Table: Personnel

Personnel Plan

Frank
Sales manager
Sales
Support
Shipping
Administration
Total People

Total Payroll

0%
0%
0%
0%
0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$2,000
$0
$0
$0
$0
$0

$2,000
$0
$0
$0
$0
$0

$2,000
$2,000
$0
$0
$0
$0

$2,000
$2,000
$0
$1,280
$0
$0

$2,000
$2,000
$0
$1,280
$0
$1,280

$2,000
$2,000
$1,500
$1,280
$0
$1,280

$2,000
$2,000
$1,500
$1,280
$1,280
$1,280

$2,000
$2,000
$1,500
$1,280
$1,280
$1,280

$2,000
$2,000
$1,500
$1,280
$1,280
$1,280

$2,000
$2,000
$1,500
$1,280
$1,280
$1,280

$2,000
$2,000
$1,500
$1,280
$1,280
$1,280

$2,000
$2,000
$1,500
$1,280
$1,280
$1,280

$2,000

$2,000

$4,000

$5,280

$6,560

$8,060

$9,340

$9,340

$9,340

$9,340

$9,340

$9,340

Page 2

Appendix
Table: General Assumptions

General Assumptions
Month 1
Plan Month

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

10

11

12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Long-term Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Tax Rate

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

Other

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit and Loss

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

$0

$0

$0

$5,750

$6,109

$6,668

$7,740

$9,175

$10,454

$11,475

$12,018

$13,009

Direct Cost of Sales

$0

$0

$0

$1,898

$2,016

$2,200

$2,554

$3,028

$3,450

$3,787

$3,966

$4,293

Other Costs of Goods

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$0

$0

$0

$1,898

$2,016

$2,200

$2,554

$3,028

$3,450

$3,787

$3,966

$4,293

Gross Margin

$0

$0

$0

$3,853

$4,093

$4,467

$5,185

$6,147

$7,004

$7,688

$8,052

$8,716

0.00%

0.00%

0.00%

67.00%

67.00%

67.00%

67.00%

67.00%

67.00%

67.00%

67.00%

67.00%

$2,000

$2,000

$4,000

$5,280

$6,560

$8,060

$9,340

$9,340

$9,340

$9,340

$9,340

$9,340

$200

$200

$400

$528

$656

$806

$934

$934

$934

$934

$934

$934

Depreciation

$1,300

$1,300

$1,300

$1,300

$1,300

$1,300

$1,300

$1,300

$1,300

$1,300

$1,300

$1,300

Rent

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$650

$650

$650

$650

$650

$650

$650

$650

$650

$650

$650

$650

$750

$750

$750

$750

$750

$750

$750

$750

$750

$750

$750

$750

$300

$300

$600

$792

$984

$1,209

$1,401

$1,401

$1,401

$1,401

$1,401

$1,401

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$6,600

$6,600

$9,100

$10,700

$12,300

$14,175

$15,775

$15,775

$15,775

$15,775

$15,775

$15,775

Profit Before Interest and Taxes

($6,600)

($6,600)

($9,100)

($6,848)

($8,207)

($9,708)

($10,590)

($9,628)

($8,771)

($8,087)

($7,723)

($7,059)

EBITDA

Gross Margin %

Expenses
Payroll
Sales and Marketing and Other
Expenses

Utilities
Insurance
Payroll Taxes
Other

Total Operating Expenses

15%

($5,300)

($5,300)

($7,800)

($5,548)

($6,907)

($8,408)

($9,290)

($8,328)

($7,471)

($6,787)

($6,423)

($5,759)

Interest Expense

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Taxes Incurred

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

($6,600)

($6,600)

($9,100)

($6,848)

($8,207)

($9,708)

($10,590)

($9,628)

($8,771)

($8,087)

($7,723)

($7,059)

0.00%

0.00%

0.00%

-119.09%

-134.35%

-145.59%

-136.82%

-104.94%

-83.91%

-70.48%

-64.27%

-54.26%

Net Profit
Net Profit/Sales

Page 4

Appendix
Table: Cash Flow

Pro Forma Cash Flow

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Sales

$0

$0

$0

$1,438

$1,527

$1,667

$1,935

$2,294

$2,613

$2,869

$3,004

$3,252

Cash from Receivables

$0

$0

$0

$0

$144

$4,321

$4,596

$5,028

$5,841

$6,913

$7,866

$8,620

Subtotal Cash from Operations

$0

$0

$0

$1,438

$1,671

$5,988

$6,530

$7,321

$8,454

$9,782

$10,870

$11,872

Cash Received
Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Other Liabilities (interest-free)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$0

$0

$0

$1,438

$1,671

$5,988

$6,530

$7,321

$8,454

$9,782

$10,870

$11,872

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$2,000

$2,000

$4,000

$5,280

$6,560

$8,060

$9,340

$9,340

$9,340

$9,340

$9,340

$9,340

$110

$3,300

$3,317

$3,943

$8,054

$6,607

$7,247

$8,098

$8,696

$9,057

$9,293

$9,314

$2,110

$5,300

$7,317

$9,223

$14,614

$14,667

$16,587

$17,438

$18,036

$18,397

$18,633

$18,654

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$2,110

$5,300

$7,317

$9,223

$14,614

$14,667

$16,587

$17,438

$18,036

$18,397

$18,633

$18,654

Expenditures

0.00%

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

Subtotal Cash Spent

Net Cash Flow

($2,110)

($5,300)

($7,317)

($7,786)

($12,943)

($8,679)

($10,056)

($10,117)

($9,582)

($8,615)

($7,762)

($6,782)

Cash Balance

$113,890

$108,590

$101,273

$93,487

$80,544

$71,865

$61,809

$51,692

$42,110

$33,495

$25,732

$18,950

Page 5

Appendix
Table: Balance Sheet

Pro Forma Balance Sheet

Assets

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$116,000
$0
$0
$0
$116,000

$113,890
$0
$0
$0
$113,890

$108,590
$0
$0
$0
$108,590

$101,273
$0
$0
$0
$101,273

$93,487
$4,313
$2,087
$0
$99,887

$80,544
$8,750
$2,217
$0
$91,512

$71,865
$9,430
$2,420
$0
$83,715

$61,809
$10,639
$2,809
$0
$75,257

$51,692
$12,492
$3,330
$0
$67,514

$42,110
$14,492
$3,795
$0
$60,396

$33,495
$16,185
$4,165
$0
$53,845

$25,732
$17,332
$4,362
$0
$47,427

$18,950
$18,469
$4,722
$0
$42,141

$78,000
$0
$78,000
$194,000

$78,000
$1,300
$76,700
$190,590

$78,000
$2,600
$75,400
$183,990

$78,000
$3,900
$74,100
$175,373

$78,000
$5,200
$72,800
$172,687

$78,000
$6,500
$71,500
$163,012

$78,000
$7,800
$70,200
$153,915

$78,000
$9,100
$68,900
$144,157

$78,000
$10,400
$67,600
$135,114

$78,000
$11,700
$66,300
$126,696

$78,000
$13,000
$65,000
$118,845

$78,000
$14,300
$63,700
$111,127

$78,000
$15,600
$62,400
$104,541

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting Balances

Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital

Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$0
$0
$0
$0

$3,190
$0
$0
$3,190

$3,190
$0
$0
$3,190

$3,673
$0
$0
$3,673

$7,835
$0
$0
$7,835

$6,367
$0
$0
$6,367

$6,978
$0
$0
$6,978

$7,809
$0
$0
$7,809

$8,394
$0
$0
$8,394

$8,747
$0
$0
$8,747

$8,983
$0
$0
$8,983

$8,988
$0
$0
$8,988

$9,461
$0
$0
$9,461

Long-term Liabilities
Total Liabilities

$0
$0

$0
$3,190

$0
$3,190

$0
$3,673

$0
$7,835

$0
$6,367

$0
$6,978

$0
$7,809

$0
$8,394

$0
$8,747

$0
$8,983

$0
$8,988

$0
$9,461

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$205,000
($11,000)
$0
$194,000
$194,000

$205,000
($11,000)
($6,600)
$187,400
$190,590

$205,000
($11,000)
($13,200)
$180,800
$183,990

$205,000
($11,000)
($22,300)
$171,700
$175,373

$205,000
($11,000)
($29,148)
$164,853
$172,687

$205,000
($11,000)
($37,355)
$156,645
$163,012

$205,000
($11,000)
($47,062)
$146,938
$153,915

$205,000
($11,000)
($57,652)
$136,348
$144,157

$205,000
($11,000)
($67,280)
$126,720
$135,114

$205,000
($11,000)
($76,051)
$117,949
$126,696

$205,000
($11,000)
($84,138)
$109,862
$118,845

$205,000
($11,000)
($91,861)
$102,139
$111,127

$205,000
($11,000)
($98,920)
$95,080
$104,541

Net Worth

$194,000

$187,400

$180,800

$171,700

$164,853

$156,645

$146,938

$136,348

$126,720

$117,949

$109,862

$102,139

$95,080

Page 6