Presentation-8 slides- SWOT analysis

Section 1: Executive Summary

Java Jake’s Coffee House will be the go to place for coffee lovers. We plan on serving the highest quality coffee and snacks in a trendy, comfortable atmosphere. Our convenient location and excellent customer service should build a steady repeat customer base.

Owners Jack Valdez and partner Juanita Sanchez each have over a decade in the food service industry, including management experience.

The main products will be the higher margin gourmet coffee products such as espressos, cappuccinos, lattés, and a variety of snacks, including healthy alternatives.

Strategically located within easy walking distance from the technical school, nursing colleges and a variety of office complexes, we intend to cater to students and young office workers by providing plenty of seating space and superior customer service with a trendy vibe.

In the immediate area our competition consists mainly of fast food vendors such as McDonald’s and Dunkin Donuts. We plan on capturing the upper end of the local coffee market by serving gourmet, non-machine made coffee products at reasonable prices. Along with our superior atmosphere and great customer service, we intend to target the sophisticated coffee consumer.

The location we have selected has 2,000 square feet of space, room for an outdoor patio and requires a minimum of renovations. The space has been vacant for several months and the owner is motivated and has offered a four year lease with a fifth year free.

We expect sales revenue to grow from $200,000 in the first year of operations to $250,000 by the end of the third year. To minimize operating expenses both of the principals will be onsite on a full time basis to reduce staffing costs, supervise and maintain quality control. We expect net profits to grow from $50,000 to $100,000 by year three.

$200,000 in startup funding is required for lease costs, renovations, equipment and furniture. The principals have $100,000 in cash and will obtain the rest from commercial lenders.

Section 2: Business/Industry Overview

The Coffee Industry

According to recent U.S. Census data, the millennials have overtaken the baby boomers as America’s largest living generation. Millennials are more social and mobile than previous generations and prefer to have coffee with friends in trendy, public locations, increasing the popularity of high end coffee shops. U.S. statistics indicate that:

• Specialty coffee sales are increasing by 20 percent per year
• Americans consume over 400 million cups of coffee per day
• Retail sales of coffee exceeds $5 billion per year

Our Position in the Industry

East Clovervale is an affluent area with a high density of students and young professionals, an ideal market for a coffee shop such as Java Jake’s Coffee House. People in this area can afford to spend money on specialty coffees and snacks and are willing to do so.

Our market research has shown that seven out of 10 people polled in East Clovervale consume at least three cups of specialty coffee per week.

The Competition

While there are currently two other coffee shops within the immediate area, neither offer patio seating or plenty of available parking.

What Makes Java Jake’s Coffee House Unique

Java Jake’s Coffee House marketing strategy is to cater to the young and “young at heart” with top quality products, great service, and plenty of seating indoors and out. We aim to be the destination place to meet with friends, relax, and enjoy a great cup of coffee.

Section 3: Market Analysis and the Competition

Given the proximity to schools and office complexes, our primary target market will be students and professional business people. Both groups are heavy consumers of coffee, tea, and snacks.

Based on our customer surveys, there is a strong demand for a high-end coffee shop in a central location that serves great coffee and has both outdoor seating and available parking. The three most common complaints about other businesses in the area are:

• Inconsistent product: Discerning customers are reluctant to become regular patrons of a coffee shop that cannot consistently serve a high-quality product.
• Lack of patio seating: Many people prefer to consume their food and beverages outdoors on a sunny day.
• Not enough nearby parking: The lack of parking makes it difficult to attract vehicle commuters.

The local customer base consists of approximately:

• 3,000 students from the two post-secondary schools
• 200 school staff
• 1,000 business people and office workers

Both schools have solid attendance and are expanding their student population. The local business market is strong and has been relatively unaffected by previous economic downturns.

Java Jake’s Coffee House versus the Competition: We expect our revenues to grow strongly as we build our customer base:

Business

Coffee to Go

Lindens

Java Jake’s Coffee (Year 1)

Est. Annual Revenue

$150,000

$250,000

$200,000

Employees

8

10

6

Price

Low

High

High

Quality

Low

Average

High

Section 4: Sales and Marketing Plan

Our Product Offerings

The existing competition uses lower grade beans, inexpensive equipment, and does not properly train staff—resulting in inconsistent product quality and dissatisfied customers.

At Java Jake’s we are passionate about coffee and intend to focus on consistently serving the highest quality product by:

• Sourcing premium beans and snacks and maintaining freshness at all times.
• Using a top of the line espresso machine and related equipment.
• Properly training our staff—Our baristas will be sent away for proper training.

By focusing on quality, consistency, and great customer service we will build a steady repeat customer base.

Pricing Strategy

We intend to mainly focus on specialty coffees including espresso, cappuccinos, mochas, etc. as the profit margins are much higher than regular coffee. To command a higher price for regular coffee we will not use drip machines. Instead, each cup will be single served using a bodum, so that every cup is up-to-the-minute fresh and delicious.

Our pricing will be competitive with the higher end of the market. We believe that customers will be happy to pay top prices for a great cup of coffee.

Sales

We will be offering counter service in a professionally designed, cozy, inviting interior space. Interior seating will be a mix of smaller individual tables for intimacy and longer, bench style ones for larger groups. Exterior seating will consist of weatherproof tables and chairs with available sunshade umbrellas. We intend to be open from 7:30 AM to 9:00 PM weekdays, and 9:00 AM to 9:00 PM weekends.

In addition to cash, we will accept payment by credit and debit cards

Advertising and Promotion

To minimize costs and connect with our customers we intend to aggressively promote our products using the following methods:

• Posters on the local campus billboards
• Ads in local papers and on the radio
• Daily specials will be posted out front of our store
• Statistics demonstrate that loyalty cards are highly effective—Java Jake’s will use a custom designed rewards card to promote repeat business.

Section 5: Ownership and Management Plan

Ownership Structure

Java Jake’s Coffee House is a private corporation registered in the State of Delaware. The business is currently 100 percent owned by Jack Valdez and Juanita Sanchez:

• Jack Valdez: 60 Class A Shares
• Juanita Sanchez: 40 Class A Shares

Management

• Owners Jack and Juanita will co-manage the business (at least one will be present at all times during opening hours). Both owners have previous food service management experience and are trained, experienced baristas.

External Resources and Services

• Melford’s Design Services will be contracted for the interior design of the premises.
• Jackson and Jackson will provide accounting services for the business.
• Jody’s Catering will supply the baked goods.

Section 6: Operating Plan

Facilities

The premises we have chosen are at 2303 Stewart St. The space features:

• 2,000 square feet of indoor space in a modern, well maintained building in an excellent location
• Approximately 500 square feet of outdoor patio space, with lockup racks for bicycles
• Existing zoning for restaurant usage
• A four-year lease at $3,500/month with a fifth year free
• The building owner is responsible for trash collection, recycling, pest control, and security
• Utilities (water, electricity, gas, internet, phone) are estimated to be $800 per month
• The previous tenant was a restaurant and there are existing kitchen, counter and sufficient washroom facilities already in place. The previous tenant has offered to sell used kitchen equipment at heavily discounted prices.

Staffing

• Two full-time and four to six part-time baristas will be hired at industry standard wages. Baristas will be trained at a regional barista training academy. The two full-time employees are previous employees of the owners. The part-time employees will be sourced from the local post-secondary institutions.
• Owners and staff will share all regular duties, including taking orders, making coffee/tea, clearing tables, restocking, dish washing, maintaining washroom facilities, etc.
• To increase employee loyalty a bonus/profit sharing system will be put in place.

Equipment

The following equipment will be purchased:

• Commercial grade La Marzocco Espresso machine ($25,000)
• Espresso grinder ($1,500)

We are currently negotiating purchase of used commercial equipment from the previous tenant, including:

• Glass door fridge ($1,000)
• Dishwasher ($1,500)
• Microwave ($700)
• Misc. shelving, storage bins, etc. ($500)

Maintenance contracts for the equipment will be negotiated with local vendors.

Supplies

We have negotiated an agreement with Murphy’s Coffee Wholesalers to supply premium gourmet Columbian coffee/espresso beans with two-day shipping. Milk, juices, soft drinks, fruit, etc. will be sourced from the local Costco.

Muffins, scones, cookies, yogurt fruit cups, and sandwiches will be supplied on a daily basis by Jody’s Catering.