Part V

Business Plan Part IV

Student’s Name

Institutional Affiliation

Financials Plan

In-Depth Narrative Demonstrating the Viability of This Business

Millers Coffee Company will have a unique selling proposition that will lead to business success. Being unique will keep the business ahead of the competition in the coffee selling industry. Second, it will develop a stable customer base. This means that the customers will be loyal to this company. Third, Millers will develop a strong competitive advantage. It will achieve this by determining the potential competitors and creating a marketing strategy that beats that of the competitors.

Financial Estimates and Rationale for the Viability of the Proposed Business

The business expenses for Millers Coffee will be grouped in two categories, namely the startup expenses and operating expenses. Some startup costs will include business registration fees, starting inventory, licensing fees, down payments on equipment and property, rent deposits, and utility setup fees (McKenzie, 2019). The operating expenses will include salaries, rent payment, shop supplies, maintenance, utilities, and distribution payments. The starting number of customers is estimated to be 50 customers each day, for 26 open working days a month.

Description of the Form of Business

Millers Coffee House will function as a sole proprietorship. Miller Louise Carter, the owner, will allow private investors to venture into other related businesses that go in hand with the coffee business. But these investors will be silent stakeholders, and the owner will pay them off within three years of business establishment (Jackson, 2020). The private investors will be paid two times a year in equal installments with interests. The proposed budget for this business is $99,900. The owner has a cash contribution of $10,000 and plans to loan the remaining amount after investors input.

Three-Year Financial Projection

The financial predictions for this company are based on the historical trends within the coffee brewing industry. The international coffee market is estimated to grow at 5.3% during the projection period from 2021 to 2025 (Jackson, 2020). More than 70 percent of consumers will possibly prefer home-brewed coffee, which will lead to the production of convenient forms of coffee such as capsules and coffee pods. The market will likely be driven by several factors that have been prevalent in the coffee business in the past. Some of these factors include increase customer demand for fortified coffee products, continuous innovation, and single-serve brew systems.

Assumptions

General Assumptions
Plan Year	1st	2nd	3rd
Current Interest Rate	10%	10.05%	11%
Long-term Interest Rate	10%	11%	12%
Tax Rate	29%	29%	%
Other	0	0	0

Changes in Funding during Different Stages of the Company's Growth

During the launching stage, the company will start its operations as a coffee shop. During this stage, the owner will fund 90 percent of the startup expenses. The second phase will be the growth phase, whereby the business will likely experience exponential growth (Green-Douglas, 2020). There will be a need for a change in funding because of business expansion to selling coffee products. The owner will welcome private investors for additional financing. During the third or the shakeout stage, sales will continue to improve. There will be a need for further expansion to beat the rival companies. The owner will revert to the bank loan and business loans for funding. The last stage (maturity) stage will be the time when business matures. There will be a steady but slow income and sales. But there will be no need for funding during this stage.

The rationale for the Projections

The projects for this company are viable for several reasons. First, they evaluate the company's practicability. They will help the business determine if the operations will generate enough income and profits (Jackson, 2020). Second, they will help the manager to plan and prepare for the future of business operations. Third, the financial projections will enable the business to develop attainable goals and objectives. Finally, these projections will attract the right investors and ultimately lead to the expansion of business internationally.

Startup Costs for the Business

The startup cost for Millers Coffee Shop will be $100,000.

Operation	Cost
Rent Deposit	$25,000
Starting cash for business	$30,000
Initial Inventory	$5,000
Equipment and Furniture	$40,000

Current Capital and Other Sources of Funding

The initial capital comes from the owner's pocket. This is a concept known as bootstrapping, an effective way to startup financing a business. The company will also raise money through bank loans, capital loans, or funding (Green-Douglas, 2020). The owner will also obtain financing from microfinance providers in Kansas for conventional banking services. Finally, the business will also involve angel investors to fund the business operations, especially during the business's growth and expansion stages.

Continuous Improvement System used for Quality Management

The company will use the principles of a continuous improvement system to manage quality standards in business operations. This principle takes on four significant steps to achieve the proper product development and customer service (Green-Douglas, 2020). In this light, the company will plan by identifying various opportunities and using them for change management. Second, it will implement the change on a short-term basis. Third, it will analyze the outcome of evolution and determine whether it made a difference. Finally, the company will implement this change on a broader scale to achieve quality.

References

Green-Douglas, P. L. (2020). Accounting Information Systems Used by Small Business Owners to Support Forecasting Profitability (Doctoral dissertation, Capella University).

Jackson, M. (2020). Business plan development for a coffee and cake shop: Business structure, SWOT analysis, and market research. GRIN Verlag.

McKenzie, D., & Sansone, D. (2019). Predicting entrepreneurial success is hard: Evidence from a business plan competition in Nigeria. Journal of Development Economics, 141, 102369.