Financial Foundation for Managers: Café+ coffee shop

Key success factors

• Design of the store will be both visually attractive and designed for the quick operations  in order create high brand value.
• Training given to the employee to ensure the best coffee preparations techniques
• Marketing strategies aim to build solid base of loyal customers as well as maximizing the sales
• Varieties of coffee to tea to soft drinks along with free Wi-Fi that is not available with existing competitors (Barrow, 2011).
• Creation of unique and innovative form of atmosphere which will differentiate Café+ with others
• Establish the Café+ club for socializations and entrainment.
• Varieties within the gourmet like muffins, Chocó lava, to fruit cake and smoothies which will create niche market for the café+ among the competitors (Clarke, 2010).
  

Assumption

 The Brisbane market for the coffee shop is been one of the major strength for the business. Most of the population in Brisbane has been habituated to do their breakfast at the coffee shop.  The café+ will be selling the cup of the coffee at value pricing as per the customer orders (Drummond et al. 2012). The café+ will be selling espresso drinks , brewed coffee and teas as well as some of the major refreshments  beverages along with varieties of the gourmet which  is not been sold by the other members. The total capital invested for the café + will be 209,810 that will be break down cost for the monthly expense of 187,300 out of which 22,510 was paid in the advance. 

One of the major marketing objectives is to maintain the sales of 536,650 for the 1^st year and achieve the more than 35% of Brisbane market shares within the 12 months are some of the major marketing objectives for the company.  The product will less costly and will be convenient place for the customer to eat healthy and live healthy (Jackson et al. 2008). Some of the other products which are sold by the Café+ are Green tea, Tulsi tea and cardamom tea along with organic form of gourmet which will be increasing the market share of the company in the current business market. 

Value propositions

3. Budget

Fixed cost

Personnel plan

Although the managers and owns are experience in the chosen industry but some of the major employee are required which will help to garb the opportunity to manage the café+ (Kaufman, 2010). Most of the personnel plans are very much required to control and develop the business objectives to achieve. With the help of flexible work timings and changing shift will help the business to manage and control the business (Rhyne, 2009).

Market segment

Sources of funds

From the above, it has been found that, both the partners will be investing 50,0000  each in order to on the business . The rest of $345000 is been arranged by the debt financing. Debt financing is one of the prominent ways of financing the business (Farrell,  2007). However, with large interest rates make it more riskier and dangerous. Apart from that, next options will be equity financing which has been which will not be easily available for the business because of new entrepreneur. It is less risky than the debt but company has to share with profit with the general share holders (Germain et al. 2008).

4. Expected Profit and loss statement for the Café+

Assumptions

Project profit and loss statements

Profit and loss statements for the Café+

Expected cash flow

Expected Balance Sheet for Café+ for 2015

Ratios

From the above financial feasibility, it has been found that, current ratio for the business is been adequate enough to handle the their operation which is to manage the employee pay roll and the manage the short term purchasing for the company which coffee beans, gourmet raw materials and the various napkins and the utensils for the business (Germain et al. 2008). The Current Ratio and the Quick Ratio (Acid Test) are both very high reflecting the fact that the business has a very strong and positive cash flow. This is due to sales being predominantly cash, whilst purchases are bought on largely on 30 day terms. Liquidity is sound.

The current ratio of the company is there has been numerous occasion  where the companies are looking to spend on the advertisement which will help the company to gather the large customer base of the Brisbane Australia (Glynett, 2012).  After the ROCE of the company is for the  first is more than 5 which shows that company has invested in the right  areas for the owners of the company. The ROCE depicts the return on capital employed which has been one of the most important parts of the business ratios to understand whether or not company is bale to invest in the right areas (Morris et al. 2011).

Apart from that, ROA of the company for the 2015 is very much depicts that company is able to manage and control asset as per the company development. ROA is been one of the major areas for the business which will give an insight for the valuation of asset. Expenditure ratio of the company is very much able to higher which shows that company is able to manage and control the revenue for the company. Besides that, gross profit margin of the company is higher than the expectation which is 0.65 (Godsmark et al. 2009).   The ratio for the café+ shows that company has enough cash and asst to manage its expenditure in the long run for the company.

Conclusion

From the above, it has been found that,  the study, the research project highlights the relationship existent between  the business plan and resources. The entire discussion on the selected topic centers round the aspect of understanding of the business and the financial feasibility which will helps to give an insight for  whether the company is able to create the profitability with current business trend or not . As observed from the primary research, impact of financial feasibility is no doubt shows the positive aspect for the current business process. The study of the chapter described the response of expected financial  plan which helps to gather the information  to explain whether t or not the business is profitable . With help of cash flow ,  it has been found that company has enough cash to maintain the  operation of the company. Apart from that, with help of income statement, it shows company ahs to investment 500, 00 of investment which will give the company enough scope to manage and control the expenditure and income. Lastly, balance of the  café+ very much help to understand whether the company is has  asst like land and building and the equipment which the company ahs top purchase for the sake of the running the business.   With the help of ratio analysis , it has been found that company ROCE is higher rather than what is was expected , therefore the business is very much financially feasible. Lastly, with the help of budgeted financial statements like profit and loss statement and the balance sheet would help to analyses the potential net return on investment of the ownership along with total expenditure.

Reference list

Books

Augenti, L. (2010) How to Start a Home-Based Personal Trainer Business, 4^th ed. London: Palgrave Macmillan.

Baligh, H. H. (2007) Organization Structures: Theory and Design, Analysis and Prescription, 5th ed. Heidelberg, New York: Springer Verlag.

Barney, J.  B. (2009) 'Strategic factor markets: Expectations, luck, and business strategy’, Management Science 32(1), pp.  1231-1241

Barringer, B. (2010) Managing Your New Business' Finances, 4th ed. New Jersey: Person Education

Barrow, C. (2011) Practical Financial Management: A Guide to Business planning and budgeting, 8th ed. London: Kogan Page Limited 

Clarke, G. (2010) Business Start Up and Future Planning, Bringhton: Emerald Publishing

Drummond, G., Ensor, J. and Ashford, R. (2012) Strategic Marketing: Planning and Control, 4^th ed. London: Palgrave Macmillan.

Jackson, S. R., Sawyers, R. B. And Jenkins, G. (2008) Managerial Accounting: A Focus on Ethical Decision Making, 5^th ed. London: Chapman and Hall.

Kaufman, R., (2010). Strategic planning for success, 5^th ed. London: Routledge.

Journals

Farrell, M.A. (2007) The effect of a market-oriented organisational culture on sales-force behaviour and attitudes. Journal of Strategic Marketing, 13(4), 261– 273

Germain, R., Claycomb, C. and Droge, C. (2008) Supply chain variability, organizational structure and performance: the moderating effect of demand unpredictability.  Journal of operations management, 26, 557-570

Glynett, D. (2012) How to Start a Gym Business, 5^th ed. London: Prentice Hall.

Godsmark, E., Arduser, L. and Brown, D. R. (2009) How to Open a Financially Successful Coffee, Espresso & Tea Shop - Page 17, 4^th ed. Germany: Grin Verlag.

Goksoy, A., and Ozsoy, B., (2007). Business Process Reengineering: Strategic Tool for Managing Organizational Change an Application in a Multinational Company. International Journal of Business and Management, 22: 256-264.

Morris, M., Schindehutte, M. and Allen, J. (2011) The entrepreneur’s business model: Toward a unified perspective. Journal of Business Research, 58: 726-735.

Rhyne, L. C. (2009) “The relationship of strategic planning to financial performance,” Strategic Management Journal, 4, 319-337