Sjort Term Funding

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1/27/2020 Originality Report

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SafeAssign Originality Report FIN/571: Corporate Finance • Wk 6 – Signature Assignment: Short-Term Funding [due Mon]

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Word Count: 1,557 Allen-Venture Capitalism-Week6-CorpFin.pptx

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Requesting Initial Funding For Coffee Shop

Corporate Finance/571

Dr.

01/27/2020

Executive Summary

Industry Information

Marketing Plan

Analysis of Competitors

Income Projections for 3 Years

https://vle.phoenix.edu/webapps/mdb-sa-BB300502SF160441/originalityReport?attemptId=2e49e8e1-6538-47e5-b367-3a94c7ef3bd6&course_id=_133632_1&includeDeleted=true&paperId=2505460910&print=true&force=true

1/27/2020 Originality Report

https://vle.phoenix.edu/webapps/mdb-sa-BB300502SF160441/originalityReport/ultra?attemptId=2e49e8e1-6538-47e5-b367-3a94c7ef3bd6&course_id… 2/6

Assumptions for Achieving Sales Growth

Proposed Funding Schedule for 3 Years

Break-Even Analysis

References

Table of Contents

This presentation is intended to request for initial capital of $500,000 to start and run a coffee shop. It examines information about the coffee beverage industry,

the marketing plan for the proposed coffee shop, an analysis of the existing competition, a three-year projection of profit or loss, and assumptions on how grow the sales of the company.

The proposed name of the coffee shop is Mamba Cups

The shop will open every day of the week from 6:00 AM to 8:00 PM

Mamba Cups will provide a pleasant and conducive environment for customers

The coffee prices will be affordable

Mamba Cups will also offer snacks

Executive Summary

Mamba Cups coffee shop will be open every day of the week. It will be set up to ensure that coffee customers have a calm and pleasant place where they can drink coffee and enjoy snacks at reasonable prices. Customers will also have a range of choices such as soft drinks, fast snacks, coffee, and Milo. The various

types of snacks will be muffins, coffee cakes, and breakfast sandwiches that are flavored with ginger and cinnamon.

The business will be located at WestPoint City

It will target anybody who enjoys coffee

With city has a population of 35000 people

Mamba Cups coffee shop will face competition from Coffee Stop shop located at 824 Kobe Bryant Street

Marketing Plan

Among the 35,000 people living at WestPoint City, an estimated 27,000 people are above 18 years. This forms a suitable target population. This also implies that this segment of customers can avail themselves during prime hours of the morning and evening. The main competition for Mamba Cups coffee shop is likely to come from Coffee Stop shop located at Street ABC in the eastern part of WestPoint City. Mamba Cups’ main strength is that the shop appears prestigious and stylish. Further, the shop has ample parking space for customer’s vehicles.

Mamba Cups plans to offer delivery services to customers’ offices

There will be coupons that customers can redeem

The global production of coffee has increased by 10% over the last 2 years

Production will increase by 25% over the next 5 years

Marketing Plan (Cont’d)

Mamba Cups plans to offer delivery services to customer’s places of work. It will also offer customers coupons that they can redeem. This will be a great way to attract and retain customers. With over 5 years of existence in business, Mamba Cups has already established good customer rapport. Increasing consumption of coffee products, the global production of coffee has been increasing over the last one decade. Statistics show that, over the last two years, coffee production worldwide

has increased by 10%. This is projected to rise to 25% over the next five years (Vegro & Almeida, 2020). This implies that consumption of coffee products is on a rising trend.

The following are the methods that will be used for publicizing Mamba Cups Coffee shop: Posters and flyers given out to customers

Internet advertising through the company website and other websites

Offering discounted means once in a while

Social media marketing

Marketing Promotion

To reach out to both new and existing clients, Mamba Cups will combine several marketing methods. For instance, posters and flyers will be designed, printed and h d d t t t h i it th t bli h t S ill l b t k th P t d fl ill b f t k ti th d b f th i

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1/27/2020 Originality Report

https://vle.phoenix.edu/webapps/mdb-sa-BB300502SF160441/originalityReport/ultra?attemptId=2e49e8e1-6538-47e5-b367-3a94c7ef3bd6&course_id… 3/6

handed out to customers who visit the establishment. Some will also be stuck on pathways. Posters and flyers will be a perfect marketing method because of their visual nature. Secondly, the business will make use of internet marketing. This will be done through the website of the business. When combined with proper search engine optimization, internet advertising goes a long way in ensuring that the shop gets highly ranked by search engines such as Google, Bing, Yahoo, among others. Thirdly, Mamba Cups will offer discounted meals that will be aimed at attracting customers to give them a taste of the foods and drinks that the shop provides. Finally, social media will be used to target potential customers since most of them use social media platforms.

Company name Strength Weaknesses Coffee Stop Has been in operation for more than 5 years

Offers delivery services

Has earned customer trust Low hygiene standards

Not active in social media platforms

Does not have an active website Century Fast Foods Friendly staff

High quality products Lacks enough staff

The building is narrow

Its location is hidden

The location is unattractive

Brandstakes Has a spacious parking lot

Online payments

Has a website through which customers can make orders online Lacks enough staff

Lacks competent staff

New entrant in the market

Analysis of Competitors

Mamba Cups coffee shop has three main competitors. The major one is Coffee Stop. It has three main strengths which are; being in operation for the last five

years, offers deliver services and has already earned the trust of customers.

The second competitor is Century Fast Foods. Its main strengths are that it has high quality products and its staff are friendly. Century Fast Foods has several weaknesses. For instance, the company lacks enough staff and the available ones are incompetent. Further, the premise is built in an area which is hidden and unattractive. The third rival is Brandstakes. Its main strengths are the fact that its website is active and allows customers to make orders online and has a spacious parking lot. The weaknesses of the company are that it lacks enough staff and the available ones are incompetent. In addition to this, Brandstakes is a new entrant in to the market.

Type of advert Fixed Asset ($) Monthly Expenses ($)

Internet marketing 10000 Flyers and Posters 5000 Discounted Meals 10000 Total 20000 5000

Marketing Budget

The competitor analysis of Mamba Cups coffee shop focuses on beating the three main competitors who are Coffee Stop, Century Fast Foods, and Brandstakes.

To win against its rivals, Mamba Cups will spend $10,000 on internet advertising, $5,000 on flyers and posters, and 10,000 on discounted meals. This will amount to a total of $20,000.

3-Year Income Projections

Given the size of operation, location, and the uniqueness of Mamba Cups’ business idea, it would be reasonable to assume that sales will exceed operating costs. However, the projections used in this plan are based on a conservative estimate.

Sales 1st Year 2nd Year 3rd Year 150000 300000 450000 Cost 1st Year 2nd Year 3rd Year 100000 200000 300000

First Year Second Year Third Year Variable Costs ($) 60000 150000 250000 Fixed Costs ($) 40000 50000 50000

Assumption of Expected Sales, Expenses and Investments to Achieve Revenue Goals

The assumption made in this case is that costs have been expressed in terms of fixed and variable cost respect to the $ 300,000 capitation provided

1/27/2020 Originality Report

https://vle.phoenix.edu/webapps/mdb-sa-BB300502SF160441/originalityReport/ultra?attemptId=2e49e8e1-6538-47e5-b367-3a94c7ef3bd6&course_id… 4/6

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The main source of financing for Mamba Cups coffee shop will be willing and potential investors. The funds will be used to finance operations. For any business to prosper and thrive, it should have sufficient capital. Without adequate funds, businesses crumble. This is what often causes startups or even existing businesses to seek financial help from the various available sources.

3 Year Proposed Funding Schedule

Break even analysis shows the point in which the company’s yearly sales revenue must reach in order to reach a break-even point. Mamba Cups coffee shop

needs to make sales of $ 1,400,000 to reach a break-even point. The above sales will be able to cover all the expenditure and the direct cost of sales.

Break-Even Analysis

Mamba Cups plans to expand to China

The country is highly mechanized

China is also highly populated

Other factors to consider when expanding are: foreign business regulations, political stability, and the general lifestyle of the country

Expanding to Another Country

There are several reasons why Mamba Cups plans to expand into China. For instance, the country is highly mechanized. There is wide acceptance of technology

business dealings. This will help our company to use the technology to safe on operations costs. China is also among the countries in the world that are highly populated and hence there is a good supply of both skilled and unskilled labor. There will be supply of cheap labor in China. The factors that I should consider when expanding internationally include; Foreign business regulations, political stability in the foreign country, the preference and the general lifestyle in the international markets. 13

In China, the tax rate is 25% This could decrease to 15% within the next few years

The tax rate is quite conducive for business environment

The net profits generated in China are better off than what would be generated in the home country (Li, Pittman, & Wang, 2019).

Corporate Tax Rate in China

Li, W., Pittman, J. A., & Wang, Z. T. (2019). The determinants and consequences of tax audits: Some evidence from China. The Journal of the American Taxation Association, 41(1), 91-122. Vegro, C. L. R., & de Almeida, L. F. (2020). Global coffee market: Socio-economic and cultural dynamics. In Coffee Consumption and Industry Strategies in Brazil (pp. 3-19). Woodhead Publishing.

References

Student paper

Requesting Initial Funding For Coffee Shop

Original source

PROPOSED FUNDING FOR A NEW COFFEE SHOP

Student paper

Corporate Finance/571

Original source

FIN/571 Corporate Finance

Student paper

01/27/2020

Original source

January 27, 2020

Student paper

Income Projections for 3 Years Assumptions for Achieving Sales Growth

Original source

Income Statement Projections for three years Assumptions for achieving sales growth and

Student paper

Proposed Funding Schedule for 3 Years

Original source

3 Year Proposed Funding Schedule

Student paper

Break-Even Analysis

Original source

Break-even analysis

1/27/2020 Originality Report

https://vle.phoenix.edu/webapps/mdb-sa-BB300502SF160441/originalityReport/ultra?attemptId=2e49e8e1-6538-47e5-b367-3a94c7ef3bd6&course_id… 5/6

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Table of Contents

Original source

Table of contents

Student paper

This presentation is intended to request for initial capital of $500,000 to start and run a coffee shop.

Original source

Similarly, the presentation has submitted a proposal to request an initial funding of $500,000 to start and run a coffee shop, Extreme-Flavor

Student paper

Customers will also have a range of choices such as soft drinks, fast snacks, coffee, and Milo.

Original source

A range of choices will be availed to customers including but not limited to coffee, fast snacks, soft drinks and milo

Student paper

The various types of snacks will be muffins, coffee cakes, and breakfast sandwiches that are flavored with ginger and cinnamon.

Original source

Coffee cakes, muffin, black-forest and breakfast sandwiches flavored with cinnamon and ginger will be available

Student paper

Production will increase by 25% over the next 5 years

Original source

This explains how sales will increase over the next 5 years

Student paper

Marketing Plan (Cont’d)

Original source

The marketing Plan

Student paper

Statistics show that, over the last two years, coffee production worldwide has increased by 10%.

Original source

Statistics also show that there has been an increase by 10% over the past two years in the production of coffee overall

Student paper

Posters and flyers given out to customers

Original source

Posters and flyers

Student paper

Social media marketing

Original source

Social Media Marketing

Student paper

The major one is Coffee Stop.

Original source

The major strength the coffee stop has is spacious

Student paper

To win against its rivals, Mamba Cups will spend $10,000 on internet advertising, $5,000 on flyers and posters, and 10,000 on discounted meals.

Original source

Internet Advertising 10,000 Posters and Flyers 5,000 Discounted meals 10,000 TOTALS 20,000 5,000

Student paper

3-Year Income Projections

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3 Year Income P&L Projections

Student paper

However, the projections used in this plan are based on a conservative estimate.

Original source

The projections set out in this plan, however, are based on a conservative estimate

Student paper

Sales 1st Year 2nd Year 3rd Year 150000 300000 450000 Cost 1st Year 2nd Year 3rd Year 100000 200000 300000

Original source

Sales 1st Year 2nd Year 3rd Year 150000 300000 450000 Cost 1st Year 2nd Year 3rd Year 100000 200000 300000

Student paper

Assumption of Expected Sales, Expenses and Investments to Achieve Revenue Goals

Original source

ASSUMPTION OF EXPECTED SALES, EXPENSES AND INVESTMENTS TO ACHIEVE REVENUE GOALS

Student paper

The assumption made in this case is that costs have been expressed in terms of fixed and variable cost respect to the $ 300,000 capitation provided

Original source

The assumption of costs has been expressed in terms of fixed and variable cost respect to the $ 300,000 capitation provided

1/27/2020 Originality Report

https://vle.phoenix.edu/webapps/mdb-sa-BB300502SF160441/originalityReport/ultra?attemptId=2e49e8e1-6538-47e5-b367-3a94c7ef3bd6&course_id… 6/6

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3 Year Proposed Funding Schedule

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3 Year Proposed Funding Schedule

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Break even analysis shows the point in which the company’s yearly sales revenue must reach in order to reach a break-even point. Mamba Cups coffee shop needs to make sales of $ 1,400,000 to reach a break-even point.

Original source

Break even analysis shows the point in which the company’s yearly sales revenue must reach in order to reach a break-even point The coffee shop needs to make sales of $ 1,400,000 to reach a break-even point

Student paper

The above sales will be able to cover all the expenditure and the direct cost of sales.

Original source

The above sales will be able to cover all the expenditure and the direct cost of sales

Student paper

Break-Even Analysis

Original source

Break-even analysis

Student paper

The country is highly mechanized

Original source

China is a country which is highly mechanized

Student paper

For instance, the country is highly mechanized. There is wide acceptance of technology business dealings. This will help our company to use the technology to safe on operations costs. China is also among the countries in the world that are highly populated and hence there is a good supply of both skilled and unskilled labor.

Original source

China is a country which is highly mechanized There is wide acceptance of technology business dealings This will help our company to use the technology to safe on operations costs China is also among the countries in the world that are highly populated and hence there is a good supply of both skilled and unskilled labor

Student paper

There will be supply of cheap labor in China. The factors that I should consider when expanding internationally include; Foreign business regulations, political stability in the foreign country, the preference and the general lifestyle in the international markets.

Original source

There will be supply of cheap labor in China The factors that I should consider when expanding internationally include The preference and the general lifestyle in the international markets

Student paper

Corporate Tax Rate in China

Original source

Corporate tax rate in Canada