Business proposal
Coffee Bistro Finance Proposal
Prepared for VanCity Credit Union Commercial Lenders
Submitted by (name)
(date)
Table of contents
Letter of Transmittal …………………………………………………………….1
Overview ………………………………………………………………………..2
Introduction ……………………………………………………………………..2
Challenges ………………………………………………………………………3
Costs …………………………………………………………………………….3
How to measure results? ………………………………………………………..4
What are my recommendations? ………………………………………………..4
Appendices ……………………………………………………………………...5
References …………………………………………………………………........6
Letter of Transmittal
date
name
1765 Coffee Bean Lane
Vancouver, BC
V6L 3K8
Mr. Jeffrey Morgan
Manager, Commercial Lending
VanCity Credit Union
123 Main Street
Vancouver, BC
V6E 3Z7
Dear Mr. Morgan:
Please accept the enclosed business proposal regarding the opening of a coffee bistro on Main Street in east Vancouver. Through my proposal I hope to show you and the VanCity Board the need for a neighbourhood coffee shop in the proposed area of Main Street, its viability through reaching out to and meeting the needs of the community, and establish a “green” venue where our environment and waste are considered factors.
The goal of this proposal is to persuade you and VanCity Credit Union to lend me the capital to make this venture a reality. I would like to lease property located at Main Street and Campbell Drive which is located adjacent to the East Vancouver Community Centre. I have included the results of a survey I conducted over a two-week span in September which shows local support for a coffee bistro that focuses on the community, its people and the environment. I am grateful for the cooperation of the residents and patrons along Main Street in assisting me in my research and convincing me that this plan is not only viable, but necessary for the community.
Please contact me if you have any further questions. I would welcome your feedback. Thank you for your time and consideration.
Sincerely,
(name)
Overview
Since moving to Vancouver in 1998, I have seen coffee shops come and go. My observations have been that they haven’t had anything special to offer the public and the larger commercial coffee shops could offer much more variety at a lower cost.
For past two years, I have lived in east Vancouver and have grown to love the special community in which I live. I recognized the need for place within the Main and Campbell area where residents and visitors of the area could meet their neighbours, enjoy conversation, and enjoy some of the finer things in life, such as a quality cup of coffee, without the huge price tag. I also am acutely cognisant of the heightened awareness on environmental issues this neighbourhood has. As a result, I believe a coffee bistro with a strong recyling and environmental ethic, which serves Free Trade coffee from around the world, would be a perfect fit for this area.
The purpose of my proposal is to persuade VanCity Credit Union to lend me the capital to start this business. VanCity is very strong in its community efforts and is a strong supporter of entrepreneurs who want to make a difference to better Vancouver and provide a viable service to its residents. I strongly believe a partnership between my venture and VanCity is very fitting.
Introduction
I’m writing to propose a that VanCity assist me with the funding necessary to establish a coffee bistro on Main Street. As the city of Vancouver is becoming more environmentally aware and as people’s lives become more pressed for time, it is necessary to have a place for people to meet and share ideas with like-minded individuals.
I think there is much to be done beyond just giving serving great coffee. I believe that developing a place for neighbours to congregate find out about events in and around the community, to savour the finer coffees with a clear conscience knowing that all products are Fair Trade and environmentally sound are essential. This will make a difference to customer satisfaction and allow patrons to feel they are making a difference by raising their standards and insisting on ethically-obtained products. This will be the “feel good” café!
This bistro is about community and awareness and responding to the wants and needs of customers and how they make their choices. I would like to take this time to point out the benefits that would be realized as a result of implementing my plan and creating a coffee bistro on Main Street:
Improve the morale of the community
Provide individuals with the choice of purchasing fair trade coffee
Create awareness of environmental issues
Participate in community events, serving as a resting place for groups or individuals to gather
Produce a higher level of quality and standards in the hope that other businesses in the area will feel obligated to follow suit.
Challenges
There are a number of challenges which need to be recognized.
According to the Vancouver Business Bureau statistics, one out of every three coffee shops goes out of business within the first year of opening their doors.
Response: Many fly-by-night coffee shops have suffered due to the fact that they have either too vast a menu, are situated in an area riddled with coffee shops, and they have nothing unique to exciting to offer the clientele. (Vancouver Business Bureau, 2002.)
Funding for this project is risky.
Response: With the carefully mapped out budget plan, attached, I plan on keeping overhead costs as low as possible. Coffee will be purchased directly from a supplier, reducing the need for a middleman and ultimately reducing the costs. Profits from the sale of coffee are high, and funds will be returned directly into the business.
There are many coffee shops in the Campbell Drive area already.
Response: Campbell Drive does, indeed, have many coffee houses. Main Street, however, does not have a coffee shop within a 4 block radius of my proposed site. With the community centre directly adjacent to this building, I believe I will have the clientele to ensure a profitable business. In addition, none of the Campbell Drive coffee shops focus on free trade coffee nor on environmental awareness that the community seems to value. I am looking to improve is the quality of the service be competitive. To do that, I need to provide this “extra”, and make the community and patrons think “wow”.
Costs
The costs associated with the opening of this bistro are as follows:
Upfront payment for 3-year Lease of space: $ 2,500
($ 1,250 per month x 36 months: $45,000)
Upgrades (furniture, coffee makers, equipment): 8,750
Product (coffee beans, baked goods for first month, etc.): 1,900
Business Licence: 450
Signage: 445
Start up Cost:s $14,045
Breakeven point for business per month:
Lease $1,250
Loan repayment (estimated) 500
Coffee supplies and baked goods 1,000
Utilities 300
Incidentals 350
$3,400
How to measure results?
I implemented a survey (attached) over a two-week span in September, 2017. The survey was not only to see how many people felt they would frequent my coffee bistro, but also to see if there was a desire for a “green” space where neighbours would want to congregate, socialize and express ideas.
Six months after the bistro opens, I will re-survey the community to get a sense of whether or not they find the services provided are worthwhile. Another key indicator, the obvious one, would be if the business is making a profit.
What are my recommendations?
Based on the survey results, I believe an environmentally-aware coffee bistro in the Main Street/Campbell Drive area is needed. The survey respondents noted that, although the community centre was a popular place for activities, a coffee shop that focuses on the values of the community was needed. I believe there is a need for a coffee shop “for the people” and I would like VanCity to partner with me to make this a reality.
I will be happy to discuss this proposal with you at ant time at your convenience.
Appendices
In the appendices of this proposal I have enclosed a
Survey
Survey Responses
References
Vancouver Business Bureau, Business Statistics 2002. Appendix A
As a member of this neighbourhood, I greatly value your opinion and would like you to help me with a few quick questions regarding the need of a community-based, environmentally-friendly coffee bistro at Main & Cambell. This survey should take approximately five minutes. 1. What area of Vancouver do you live in? 2. Gender: 3. Please indicate your current annual income range? Less than $25,000 $25,001 to $45,000 $45,001 to $65,000 Greater than $65,000 4. Do you drink coffee? 5. Do you usually drink Regular or Decaf? 6. Does it matter to you whether your coffee is free trade? 7. In order of preference, please rank these items: (1= Most preferred 7= Least preferred) Coffee Bean and Tea Leaf Starbucks Coffee you make at home Tim Hortons Seattle's Best Coffee made at your work place Other (i.e. coffee carts and small business) 8. On average, how many cups of coffee do you consume? One or less cups per day 2 to 3 cups per week 4 to 5 cups 6 to 7 cups More than 7 cups 9. List all that apply for the coffee drinks that you consume most often: Drip Coffee Cappuccino Latte (plain) Iced/ Blended drinks Espresso Macchiato Flavored Latte Other Mocha Flavored Mocha Americano 10. On average, how much you typically spend per visit at a coffee shop? $0 -$2.00 $4.01 - $6.00 $2.01 - $4.00 More than $6.00 11. Do you feel that your coffee drinking at coffee shops has increased over the last 5 years? Yes No 12. If so, why do you think that is? List all that apply. Work related/ Professional life Convenience of coffee shops Drink menu options School/ Study activities Social atmosphere/ meeting place Family responsibilities Coffee popularity 13. What season do you drink the most coffee? Spring Summer Fall Winter Same for all seasons
14. Do you recycle?
Yes No
15. Would you be more apt to frequent an establishment that recyled and operated “green?”
Yes No
16. Do you see a coffee shop as an extension of your community?
Yes No
17. With the community centre being adjacent to the corner of Main & Campbell, do you see a coffee shop as being a place that would:
complement the centre,
detract from the centre
Thank you for taking the time to complete this survey.
Appendix B
Survey Responses