1

BUSINESS PLAN

DECEMBER 2014

Prepared By

Kaleigh Reagan

Chandni Panchal

Aileen Pan

Megan Negrich

2

EXECUTIVE SUMMARY

Company

Go Nuts Donuts Cafeacute will strive to be the best local cafeacute and donut shop in the New

Stanton PA area Our objective is to become a leading competitor in the Coffee Snack Industry

We will accomplish our objective by provide a relaxing ecofriendly environment that will make

customers feel comfortable With a growing demand for gourmet coffee shops and outstanding

customer service we will capitalize on travelers locals local businesses and college students in

and around the area

Go Nuts Donuts Cafeacute mission statement is to provide high-quality personalized donuts

and beverages using green products We strive for customer satisfaction and achieve top notch

customer service by training our employees to the highest levels and establishing a solid

relationship with our clientele We aspire to develop our relationship with the community by

giving back to those in need

Target Market

Our major customer groups are college students and white collar workers who live in or

travel to New Stanton PA College students and local white collar workers tend to gravitate to

places that are convenient and provide a nice environment for studying or lunch breaks Our

local demographics suggest that we should target customers in the age group 22-49 Because our

location is located off three major highways the commuters most likely will be white-collar

workers college students or travelers

3

Operations

The company will operate in a 1100 square foot space that rents for $1314month At

the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members and two

managers one marketing director and one accountant Pending business growth we may add

additional employees later Our hours are 5am to 10pm on Monday through Thursday and on

Friday and Saturday we close at 11pm

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competitors are

the restaurants and fast food chains in and around New Stanton PA This includes places like

McDonalds Dunkinrsquo Donuts and Starbucks Our indirect competition would be the Keurig K-

Cups Go Nuts Donuts Cafeacutersquos strengths relative to its competition is that we offer a unique and

customizable product We also will be environmentally friendly which some of our competitors

are not Lastly with our organic donuts we offer a healthier alternative to other snacks in the

industry Some of our weaknesses relative to our competitors is that we are a small business with

no recognizable brand We also lack the convenience of a drive thru With our small market

share and competition with already established companies in this market we will have to stand

out from our competitors

Advertising

Our primary source of advertising will be direct mailing using Vista Print to reach the

New Stanton and Youngwood regions We will also purchase half page ads in Tribune Review

for 44 editions This will enhance our exposure in the Greensburg market We are relying on our

4

customers to communicate our quality products and excellent customer service through

Facebook Twitter and Instagram

Management

Go Nuts Donuts Cafeacute was founded by four upcoming graduates from the University of

Pittsburgh at Greensburg Each partner has a 20 share in the company We have selected

positions based on past experience and expertise Our management team will consist of Chandni

and Kaleigh handling day to day operations Aileen will be marketing director and will be

responsible for promoting and advertising Megan will be our accountant and will handle

financial reports including accounts payable federal tax forms and payroll

Financials

Ratios 2017 2016 2015

Degree of Operating Leverage 235 303 303

Break Even 2 3 3

Current Ratio 1138 624 421

Quick Ratio 1115 601 399

Inventory Turnover 2038 1910 1987

Total Asset Turnover 124 177 277

Debt Ratio 009 016 023

Gross Profit Margin 068 063 066

Operating Profit Margin 029 033 033

5

I COMPANY

Company Description

Go Nuts Donuts Cafeacute is part of the Snack and Nonalcoholic Beverage Bars (NCIS Code

722515) industry We will serve fresh customizable donuts and specialty gourmet coffees We

will be located in the Stanton House Center plaza on 111 Center Avenue New Stanton PA

15672 This is a high traffic area that is located off three major highways State Route 119 State

Route 70 and the PA turnpike It is within walking distance for some members of the

community and accessible by the Route 8 (GreensburgYoungwoodNew Stanton) bus of the

Westmoreland Transit Authority The business will be set up as an S-Corporation This will help

protect assets pass-through taxation tax favorable characterization of income straight forward

transfer of ownership and heightened credibility

Mission Statement

Our mission at Go Nuts Donuts Cafeacute is to provide high quality personalized donuts and

beverages using green products We strive for customer satisfaction and achieve top notch

customer service by training our employees to the highest levels and establishing a solid

relationship with our clientele We aspire to develop our relationship with the community by

giving back to those in need

Objective To become a leading competitor in the Coffee Snack Industry

Logo Pink Green Yellow and Blue

6

Marketing Strategy

We will accomplish our goal by creating and maintaining customer relationships within

the community We plan to listen and cater to our customer needs we understand that every

customer has distinct taste and they may like some toppings but not others We also will be

generous to our loyal customer base and treat them well Most importantly we will strive to keep

our employees happy in a fun and safe environment We at Go Donuts Cafeacute understand that

happy employees are productive employees and their productivity benefits the employees

Slogan Premium coffee and donuts done your way

7

II INDUSTRY MARKET ANALYSIS

Coffee Industry

Prior to the 1960s Americans purchased coffee from grocery stores and brewed it at

home In the late 1960s entrepreneurs opened coffee shops carrying hard to find blends of

gourmet coffee During the 1980s the demand for flavored coffee caused producers to add

different flavors to the coffee beans This attracted a younger customer base In 2010 it was the

worldrsquos second most traded commodity to oil The Specialty Coffee Association of America

estimated the United States coffee market was worth more than $30 billion in 2013 The United

States was also named the leader in coffee consumption (Specialty Coffees)

The United States has shown steady growth in gourmet coffee Coffee consumption is

universal throughout different income categories Specialty coffee is a billion dollar industry and

itrsquos expected to grow 31 percent per year over the next 5 years About 52 million Americans

drink coffee and on average they consume about 23 gallons a year (Business Global Insights)

Projected Industry Outlook

Over the years coffee has become an increasingly desired beverage for many consumers

Even with the threat of coffee shortages due to severe weather conditions the industry is still

expected to grow With the economy in recovery it is an ideal situation for consumers to be able

to spend their money on more luxury products such as higher quality gourmet coffee Their

ldquospending is expected to increase 28 percent per yearrdquo over a five-year period until 2019

(IBISWorld) After all coffee is no longer just ldquoa shot of caffeinerdquo every morning to fill a

physiological need (USA TODAY) Coffee has become an epicurean past time with gourmet

coffee in the front of the line ldquoIts a $30 billion-a-year national industry a foodie fixation an

8

affordable luxury a boost of disease-fighting antioxidants a versatile ingredient an intoxicating

aroma and a beverage that brings people togetherrdquo (USA TODAY) Joe DeRupo the National

Coffee Association president describes coffee as part beverage and another part pop culture that

will not be going away anytime soon According to IBISWorld ldquothe industryrsquos recent growth is

expected to continue over the next five years to 2019rdquo As a result ldquorevenue is projected to rise

at an average of 38 percent to $364 billion during the five year periodrdquo (IBISWorld)

Industry Trends

Single cup brewing systems are becoming more popular within coffee shops They

provide a better variety than just brewing one blend they are great for convenience and

freshness These systems can also keep costs down by brewing only the amount of coffee

necessary for each sale

Specialty (gourmet) drinks are on the rise by 34 percent in 2014 a 31 percent increase

from 2013 according to the NCA (Daily Coffee News) The ldquoconsumption was found to be

highest among those between the ages of 25-29 (42 percent) second highest among the 18-24

and 40-59 demographics (about one third) and lowest among 60-plus-year-oldsrdquo (Daily Coffee

News) One of the leading gourmet coffee types is specialty espresso which saw a 5 percent rise

in consumption from 13 percent in 2013 to 18 percent in 2014 Over 30 million Americans drink

specialty espresso daily While gourmet coffee consumption is increasing regular non-gourmet

coffee consumption decreased by four points to 35 percent (Daily Coffee News) This change

is a result of the aging millennial population A spokesperson for the Thompson Rueters

Corporation points out that millennials are willing to spend more on coffee because they are

feeling better about their financesrdquo (Whole Lattee Love Community) The millennial and

previous generations are also educated or becoming educated about where the coffee beans are

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

2

EXECUTIVE SUMMARY

Company

Go Nuts Donuts Cafeacute will strive to be the best local cafeacute and donut shop in the New

Stanton PA area Our objective is to become a leading competitor in the Coffee Snack Industry

We will accomplish our objective by provide a relaxing ecofriendly environment that will make

customers feel comfortable With a growing demand for gourmet coffee shops and outstanding

customer service we will capitalize on travelers locals local businesses and college students in

and around the area

Go Nuts Donuts Cafeacute mission statement is to provide high-quality personalized donuts

and beverages using green products We strive for customer satisfaction and achieve top notch

customer service by training our employees to the highest levels and establishing a solid

relationship with our clientele We aspire to develop our relationship with the community by

giving back to those in need

Target Market

Our major customer groups are college students and white collar workers who live in or

travel to New Stanton PA College students and local white collar workers tend to gravitate to

places that are convenient and provide a nice environment for studying or lunch breaks Our

local demographics suggest that we should target customers in the age group 22-49 Because our

location is located off three major highways the commuters most likely will be white-collar

workers college students or travelers

3

Operations

The company will operate in a 1100 square foot space that rents for $1314month At

the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members and two

managers one marketing director and one accountant Pending business growth we may add

additional employees later Our hours are 5am to 10pm on Monday through Thursday and on

Friday and Saturday we close at 11pm

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competitors are

the restaurants and fast food chains in and around New Stanton PA This includes places like

McDonalds Dunkinrsquo Donuts and Starbucks Our indirect competition would be the Keurig K-

Cups Go Nuts Donuts Cafeacutersquos strengths relative to its competition is that we offer a unique and

customizable product We also will be environmentally friendly which some of our competitors

are not Lastly with our organic donuts we offer a healthier alternative to other snacks in the

industry Some of our weaknesses relative to our competitors is that we are a small business with

no recognizable brand We also lack the convenience of a drive thru With our small market

share and competition with already established companies in this market we will have to stand

out from our competitors

Advertising

Our primary source of advertising will be direct mailing using Vista Print to reach the

New Stanton and Youngwood regions We will also purchase half page ads in Tribune Review

for 44 editions This will enhance our exposure in the Greensburg market We are relying on our

4

customers to communicate our quality products and excellent customer service through

Facebook Twitter and Instagram

Management

Go Nuts Donuts Cafeacute was founded by four upcoming graduates from the University of

Pittsburgh at Greensburg Each partner has a 20 share in the company We have selected

positions based on past experience and expertise Our management team will consist of Chandni

and Kaleigh handling day to day operations Aileen will be marketing director and will be

responsible for promoting and advertising Megan will be our accountant and will handle

financial reports including accounts payable federal tax forms and payroll

Financials

Ratios 2017 2016 2015

Degree of Operating Leverage 235 303 303

Break Even 2 3 3

Current Ratio 1138 624 421

Quick Ratio 1115 601 399

Inventory Turnover 2038 1910 1987

Total Asset Turnover 124 177 277

Debt Ratio 009 016 023

Gross Profit Margin 068 063 066

Operating Profit Margin 029 033 033

5

I COMPANY

Company Description

Go Nuts Donuts Cafeacute is part of the Snack and Nonalcoholic Beverage Bars (NCIS Code

722515) industry We will serve fresh customizable donuts and specialty gourmet coffees We

will be located in the Stanton House Center plaza on 111 Center Avenue New Stanton PA

15672 This is a high traffic area that is located off three major highways State Route 119 State

Route 70 and the PA turnpike It is within walking distance for some members of the

community and accessible by the Route 8 (GreensburgYoungwoodNew Stanton) bus of the

Westmoreland Transit Authority The business will be set up as an S-Corporation This will help

protect assets pass-through taxation tax favorable characterization of income straight forward

transfer of ownership and heightened credibility

Mission Statement

Our mission at Go Nuts Donuts Cafeacute is to provide high quality personalized donuts and

beverages using green products We strive for customer satisfaction and achieve top notch

customer service by training our employees to the highest levels and establishing a solid

relationship with our clientele We aspire to develop our relationship with the community by

giving back to those in need

Objective To become a leading competitor in the Coffee Snack Industry

Logo Pink Green Yellow and Blue

6

Marketing Strategy

We will accomplish our goal by creating and maintaining customer relationships within

the community We plan to listen and cater to our customer needs we understand that every

customer has distinct taste and they may like some toppings but not others We also will be

generous to our loyal customer base and treat them well Most importantly we will strive to keep

our employees happy in a fun and safe environment We at Go Donuts Cafeacute understand that

happy employees are productive employees and their productivity benefits the employees

Slogan Premium coffee and donuts done your way

7

II INDUSTRY MARKET ANALYSIS

Coffee Industry

Prior to the 1960s Americans purchased coffee from grocery stores and brewed it at

home In the late 1960s entrepreneurs opened coffee shops carrying hard to find blends of

gourmet coffee During the 1980s the demand for flavored coffee caused producers to add

different flavors to the coffee beans This attracted a younger customer base In 2010 it was the

worldrsquos second most traded commodity to oil The Specialty Coffee Association of America

estimated the United States coffee market was worth more than $30 billion in 2013 The United

States was also named the leader in coffee consumption (Specialty Coffees)

The United States has shown steady growth in gourmet coffee Coffee consumption is

universal throughout different income categories Specialty coffee is a billion dollar industry and

itrsquos expected to grow 31 percent per year over the next 5 years About 52 million Americans

drink coffee and on average they consume about 23 gallons a year (Business Global Insights)

Projected Industry Outlook

Over the years coffee has become an increasingly desired beverage for many consumers

Even with the threat of coffee shortages due to severe weather conditions the industry is still

expected to grow With the economy in recovery it is an ideal situation for consumers to be able

to spend their money on more luxury products such as higher quality gourmet coffee Their

ldquospending is expected to increase 28 percent per yearrdquo over a five-year period until 2019

(IBISWorld) After all coffee is no longer just ldquoa shot of caffeinerdquo every morning to fill a

physiological need (USA TODAY) Coffee has become an epicurean past time with gourmet

coffee in the front of the line ldquoIts a $30 billion-a-year national industry a foodie fixation an

8

affordable luxury a boost of disease-fighting antioxidants a versatile ingredient an intoxicating

aroma and a beverage that brings people togetherrdquo (USA TODAY) Joe DeRupo the National

Coffee Association president describes coffee as part beverage and another part pop culture that

will not be going away anytime soon According to IBISWorld ldquothe industryrsquos recent growth is

expected to continue over the next five years to 2019rdquo As a result ldquorevenue is projected to rise

at an average of 38 percent to $364 billion during the five year periodrdquo (IBISWorld)

Industry Trends

Single cup brewing systems are becoming more popular within coffee shops They

provide a better variety than just brewing one blend they are great for convenience and

freshness These systems can also keep costs down by brewing only the amount of coffee

necessary for each sale

Specialty (gourmet) drinks are on the rise by 34 percent in 2014 a 31 percent increase

from 2013 according to the NCA (Daily Coffee News) The ldquoconsumption was found to be

highest among those between the ages of 25-29 (42 percent) second highest among the 18-24

and 40-59 demographics (about one third) and lowest among 60-plus-year-oldsrdquo (Daily Coffee

News) One of the leading gourmet coffee types is specialty espresso which saw a 5 percent rise

in consumption from 13 percent in 2013 to 18 percent in 2014 Over 30 million Americans drink

specialty espresso daily While gourmet coffee consumption is increasing regular non-gourmet

coffee consumption decreased by four points to 35 percent (Daily Coffee News) This change

is a result of the aging millennial population A spokesperson for the Thompson Rueters

Corporation points out that millennials are willing to spend more on coffee because they are

feeling better about their financesrdquo (Whole Lattee Love Community) The millennial and

previous generations are also educated or becoming educated about where the coffee beans are

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

3

Operations

The company will operate in a 1100 square foot space that rents for $1314month At

the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members and two

managers one marketing director and one accountant Pending business growth we may add

additional employees later Our hours are 5am to 10pm on Monday through Thursday and on

Friday and Saturday we close at 11pm

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competitors are

the restaurants and fast food chains in and around New Stanton PA This includes places like

McDonalds Dunkinrsquo Donuts and Starbucks Our indirect competition would be the Keurig K-

Cups Go Nuts Donuts Cafeacutersquos strengths relative to its competition is that we offer a unique and

customizable product We also will be environmentally friendly which some of our competitors

are not Lastly with our organic donuts we offer a healthier alternative to other snacks in the

industry Some of our weaknesses relative to our competitors is that we are a small business with

no recognizable brand We also lack the convenience of a drive thru With our small market

share and competition with already established companies in this market we will have to stand

out from our competitors

Advertising

Our primary source of advertising will be direct mailing using Vista Print to reach the

New Stanton and Youngwood regions We will also purchase half page ads in Tribune Review

for 44 editions This will enhance our exposure in the Greensburg market We are relying on our

4

customers to communicate our quality products and excellent customer service through

Facebook Twitter and Instagram

Management

Go Nuts Donuts Cafeacute was founded by four upcoming graduates from the University of

Pittsburgh at Greensburg Each partner has a 20 share in the company We have selected

positions based on past experience and expertise Our management team will consist of Chandni

and Kaleigh handling day to day operations Aileen will be marketing director and will be

responsible for promoting and advertising Megan will be our accountant and will handle

financial reports including accounts payable federal tax forms and payroll

Financials

Ratios 2017 2016 2015

Degree of Operating Leverage 235 303 303

Break Even 2 3 3

Current Ratio 1138 624 421

Quick Ratio 1115 601 399

Inventory Turnover 2038 1910 1987

Total Asset Turnover 124 177 277

Debt Ratio 009 016 023

Gross Profit Margin 068 063 066

Operating Profit Margin 029 033 033

5

I COMPANY

Company Description

Go Nuts Donuts Cafeacute is part of the Snack and Nonalcoholic Beverage Bars (NCIS Code

722515) industry We will serve fresh customizable donuts and specialty gourmet coffees We

will be located in the Stanton House Center plaza on 111 Center Avenue New Stanton PA

15672 This is a high traffic area that is located off three major highways State Route 119 State

Route 70 and the PA turnpike It is within walking distance for some members of the

community and accessible by the Route 8 (GreensburgYoungwoodNew Stanton) bus of the

Westmoreland Transit Authority The business will be set up as an S-Corporation This will help

protect assets pass-through taxation tax favorable characterization of income straight forward

transfer of ownership and heightened credibility

Mission Statement

Our mission at Go Nuts Donuts Cafeacute is to provide high quality personalized donuts and

beverages using green products We strive for customer satisfaction and achieve top notch

customer service by training our employees to the highest levels and establishing a solid

relationship with our clientele We aspire to develop our relationship with the community by

giving back to those in need

Objective To become a leading competitor in the Coffee Snack Industry

Logo Pink Green Yellow and Blue

6

Marketing Strategy

We will accomplish our goal by creating and maintaining customer relationships within

the community We plan to listen and cater to our customer needs we understand that every

customer has distinct taste and they may like some toppings but not others We also will be

generous to our loyal customer base and treat them well Most importantly we will strive to keep

our employees happy in a fun and safe environment We at Go Donuts Cafeacute understand that

happy employees are productive employees and their productivity benefits the employees

Slogan Premium coffee and donuts done your way

7

II INDUSTRY MARKET ANALYSIS

Coffee Industry

Prior to the 1960s Americans purchased coffee from grocery stores and brewed it at

home In the late 1960s entrepreneurs opened coffee shops carrying hard to find blends of

gourmet coffee During the 1980s the demand for flavored coffee caused producers to add

different flavors to the coffee beans This attracted a younger customer base In 2010 it was the

worldrsquos second most traded commodity to oil The Specialty Coffee Association of America

estimated the United States coffee market was worth more than $30 billion in 2013 The United

States was also named the leader in coffee consumption (Specialty Coffees)

The United States has shown steady growth in gourmet coffee Coffee consumption is

universal throughout different income categories Specialty coffee is a billion dollar industry and

itrsquos expected to grow 31 percent per year over the next 5 years About 52 million Americans

drink coffee and on average they consume about 23 gallons a year (Business Global Insights)

Projected Industry Outlook

Over the years coffee has become an increasingly desired beverage for many consumers

Even with the threat of coffee shortages due to severe weather conditions the industry is still

expected to grow With the economy in recovery it is an ideal situation for consumers to be able

to spend their money on more luxury products such as higher quality gourmet coffee Their

ldquospending is expected to increase 28 percent per yearrdquo over a five-year period until 2019

(IBISWorld) After all coffee is no longer just ldquoa shot of caffeinerdquo every morning to fill a

physiological need (USA TODAY) Coffee has become an epicurean past time with gourmet

coffee in the front of the line ldquoIts a $30 billion-a-year national industry a foodie fixation an

8

affordable luxury a boost of disease-fighting antioxidants a versatile ingredient an intoxicating

aroma and a beverage that brings people togetherrdquo (USA TODAY) Joe DeRupo the National

Coffee Association president describes coffee as part beverage and another part pop culture that

will not be going away anytime soon According to IBISWorld ldquothe industryrsquos recent growth is

expected to continue over the next five years to 2019rdquo As a result ldquorevenue is projected to rise

at an average of 38 percent to $364 billion during the five year periodrdquo (IBISWorld)

Industry Trends

Single cup brewing systems are becoming more popular within coffee shops They

provide a better variety than just brewing one blend they are great for convenience and

freshness These systems can also keep costs down by brewing only the amount of coffee

necessary for each sale

Specialty (gourmet) drinks are on the rise by 34 percent in 2014 a 31 percent increase

from 2013 according to the NCA (Daily Coffee News) The ldquoconsumption was found to be

highest among those between the ages of 25-29 (42 percent) second highest among the 18-24

and 40-59 demographics (about one third) and lowest among 60-plus-year-oldsrdquo (Daily Coffee

News) One of the leading gourmet coffee types is specialty espresso which saw a 5 percent rise

in consumption from 13 percent in 2013 to 18 percent in 2014 Over 30 million Americans drink

specialty espresso daily While gourmet coffee consumption is increasing regular non-gourmet

coffee consumption decreased by four points to 35 percent (Daily Coffee News) This change

is a result of the aging millennial population A spokesperson for the Thompson Rueters

Corporation points out that millennials are willing to spend more on coffee because they are

feeling better about their financesrdquo (Whole Lattee Love Community) The millennial and

previous generations are also educated or becoming educated about where the coffee beans are

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

4

customers to communicate our quality products and excellent customer service through

Facebook Twitter and Instagram

Management

Go Nuts Donuts Cafeacute was founded by four upcoming graduates from the University of

Pittsburgh at Greensburg Each partner has a 20 share in the company We have selected

positions based on past experience and expertise Our management team will consist of Chandni

and Kaleigh handling day to day operations Aileen will be marketing director and will be

responsible for promoting and advertising Megan will be our accountant and will handle

financial reports including accounts payable federal tax forms and payroll

Financials

Ratios 2017 2016 2015

Degree of Operating Leverage 235 303 303

Break Even 2 3 3

Current Ratio 1138 624 421

Quick Ratio 1115 601 399

Inventory Turnover 2038 1910 1987

Total Asset Turnover 124 177 277

Debt Ratio 009 016 023

Gross Profit Margin 068 063 066

Operating Profit Margin 029 033 033

5

I COMPANY

Company Description

Go Nuts Donuts Cafeacute is part of the Snack and Nonalcoholic Beverage Bars (NCIS Code

722515) industry We will serve fresh customizable donuts and specialty gourmet coffees We

will be located in the Stanton House Center plaza on 111 Center Avenue New Stanton PA

15672 This is a high traffic area that is located off three major highways State Route 119 State

Route 70 and the PA turnpike It is within walking distance for some members of the

community and accessible by the Route 8 (GreensburgYoungwoodNew Stanton) bus of the

Westmoreland Transit Authority The business will be set up as an S-Corporation This will help

protect assets pass-through taxation tax favorable characterization of income straight forward

transfer of ownership and heightened credibility

Mission Statement

Our mission at Go Nuts Donuts Cafeacute is to provide high quality personalized donuts and

beverages using green products We strive for customer satisfaction and achieve top notch

customer service by training our employees to the highest levels and establishing a solid

relationship with our clientele We aspire to develop our relationship with the community by

giving back to those in need

Objective To become a leading competitor in the Coffee Snack Industry

Logo Pink Green Yellow and Blue

6

Marketing Strategy

We will accomplish our goal by creating and maintaining customer relationships within

the community We plan to listen and cater to our customer needs we understand that every

customer has distinct taste and they may like some toppings but not others We also will be

generous to our loyal customer base and treat them well Most importantly we will strive to keep

our employees happy in a fun and safe environment We at Go Donuts Cafeacute understand that

happy employees are productive employees and their productivity benefits the employees

Slogan Premium coffee and donuts done your way

7

II INDUSTRY MARKET ANALYSIS

Coffee Industry

Prior to the 1960s Americans purchased coffee from grocery stores and brewed it at

home In the late 1960s entrepreneurs opened coffee shops carrying hard to find blends of

gourmet coffee During the 1980s the demand for flavored coffee caused producers to add

different flavors to the coffee beans This attracted a younger customer base In 2010 it was the

worldrsquos second most traded commodity to oil The Specialty Coffee Association of America

estimated the United States coffee market was worth more than $30 billion in 2013 The United

States was also named the leader in coffee consumption (Specialty Coffees)

The United States has shown steady growth in gourmet coffee Coffee consumption is

universal throughout different income categories Specialty coffee is a billion dollar industry and

itrsquos expected to grow 31 percent per year over the next 5 years About 52 million Americans

drink coffee and on average they consume about 23 gallons a year (Business Global Insights)

Projected Industry Outlook

Over the years coffee has become an increasingly desired beverage for many consumers

Even with the threat of coffee shortages due to severe weather conditions the industry is still

expected to grow With the economy in recovery it is an ideal situation for consumers to be able

to spend their money on more luxury products such as higher quality gourmet coffee Their

ldquospending is expected to increase 28 percent per yearrdquo over a five-year period until 2019

(IBISWorld) After all coffee is no longer just ldquoa shot of caffeinerdquo every morning to fill a

physiological need (USA TODAY) Coffee has become an epicurean past time with gourmet

coffee in the front of the line ldquoIts a $30 billion-a-year national industry a foodie fixation an

8

affordable luxury a boost of disease-fighting antioxidants a versatile ingredient an intoxicating

aroma and a beverage that brings people togetherrdquo (USA TODAY) Joe DeRupo the National

Coffee Association president describes coffee as part beverage and another part pop culture that

will not be going away anytime soon According to IBISWorld ldquothe industryrsquos recent growth is

expected to continue over the next five years to 2019rdquo As a result ldquorevenue is projected to rise

at an average of 38 percent to $364 billion during the five year periodrdquo (IBISWorld)

Industry Trends

Single cup brewing systems are becoming more popular within coffee shops They

provide a better variety than just brewing one blend they are great for convenience and

freshness These systems can also keep costs down by brewing only the amount of coffee

necessary for each sale

Specialty (gourmet) drinks are on the rise by 34 percent in 2014 a 31 percent increase

from 2013 according to the NCA (Daily Coffee News) The ldquoconsumption was found to be

highest among those between the ages of 25-29 (42 percent) second highest among the 18-24

and 40-59 demographics (about one third) and lowest among 60-plus-year-oldsrdquo (Daily Coffee

News) One of the leading gourmet coffee types is specialty espresso which saw a 5 percent rise

in consumption from 13 percent in 2013 to 18 percent in 2014 Over 30 million Americans drink

specialty espresso daily While gourmet coffee consumption is increasing regular non-gourmet

coffee consumption decreased by four points to 35 percent (Daily Coffee News) This change

is a result of the aging millennial population A spokesperson for the Thompson Rueters

Corporation points out that millennials are willing to spend more on coffee because they are

feeling better about their financesrdquo (Whole Lattee Love Community) The millennial and

previous generations are also educated or becoming educated about where the coffee beans are

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

5

I COMPANY

Company Description

Go Nuts Donuts Cafeacute is part of the Snack and Nonalcoholic Beverage Bars (NCIS Code

722515) industry We will serve fresh customizable donuts and specialty gourmet coffees We

will be located in the Stanton House Center plaza on 111 Center Avenue New Stanton PA

15672 This is a high traffic area that is located off three major highways State Route 119 State

Route 70 and the PA turnpike It is within walking distance for some members of the

community and accessible by the Route 8 (GreensburgYoungwoodNew Stanton) bus of the

Westmoreland Transit Authority The business will be set up as an S-Corporation This will help

protect assets pass-through taxation tax favorable characterization of income straight forward

transfer of ownership and heightened credibility

Mission Statement

Our mission at Go Nuts Donuts Cafeacute is to provide high quality personalized donuts and

beverages using green products We strive for customer satisfaction and achieve top notch

customer service by training our employees to the highest levels and establishing a solid

relationship with our clientele We aspire to develop our relationship with the community by

giving back to those in need

Objective To become a leading competitor in the Coffee Snack Industry

Logo Pink Green Yellow and Blue

6

Marketing Strategy

We will accomplish our goal by creating and maintaining customer relationships within

the community We plan to listen and cater to our customer needs we understand that every

customer has distinct taste and they may like some toppings but not others We also will be

generous to our loyal customer base and treat them well Most importantly we will strive to keep

our employees happy in a fun and safe environment We at Go Donuts Cafeacute understand that

happy employees are productive employees and their productivity benefits the employees

Slogan Premium coffee and donuts done your way

7

II INDUSTRY MARKET ANALYSIS

Coffee Industry

Prior to the 1960s Americans purchased coffee from grocery stores and brewed it at

home In the late 1960s entrepreneurs opened coffee shops carrying hard to find blends of

gourmet coffee During the 1980s the demand for flavored coffee caused producers to add

different flavors to the coffee beans This attracted a younger customer base In 2010 it was the

worldrsquos second most traded commodity to oil The Specialty Coffee Association of America

estimated the United States coffee market was worth more than $30 billion in 2013 The United

States was also named the leader in coffee consumption (Specialty Coffees)

The United States has shown steady growth in gourmet coffee Coffee consumption is

universal throughout different income categories Specialty coffee is a billion dollar industry and

itrsquos expected to grow 31 percent per year over the next 5 years About 52 million Americans

drink coffee and on average they consume about 23 gallons a year (Business Global Insights)

Projected Industry Outlook

Over the years coffee has become an increasingly desired beverage for many consumers

Even with the threat of coffee shortages due to severe weather conditions the industry is still

expected to grow With the economy in recovery it is an ideal situation for consumers to be able

to spend their money on more luxury products such as higher quality gourmet coffee Their

ldquospending is expected to increase 28 percent per yearrdquo over a five-year period until 2019

(IBISWorld) After all coffee is no longer just ldquoa shot of caffeinerdquo every morning to fill a

physiological need (USA TODAY) Coffee has become an epicurean past time with gourmet

coffee in the front of the line ldquoIts a $30 billion-a-year national industry a foodie fixation an

8

affordable luxury a boost of disease-fighting antioxidants a versatile ingredient an intoxicating

aroma and a beverage that brings people togetherrdquo (USA TODAY) Joe DeRupo the National

Coffee Association president describes coffee as part beverage and another part pop culture that

will not be going away anytime soon According to IBISWorld ldquothe industryrsquos recent growth is

expected to continue over the next five years to 2019rdquo As a result ldquorevenue is projected to rise

at an average of 38 percent to $364 billion during the five year periodrdquo (IBISWorld)

Industry Trends

Single cup brewing systems are becoming more popular within coffee shops They

provide a better variety than just brewing one blend they are great for convenience and

freshness These systems can also keep costs down by brewing only the amount of coffee

necessary for each sale

Specialty (gourmet) drinks are on the rise by 34 percent in 2014 a 31 percent increase

from 2013 according to the NCA (Daily Coffee News) The ldquoconsumption was found to be

highest among those between the ages of 25-29 (42 percent) second highest among the 18-24

and 40-59 demographics (about one third) and lowest among 60-plus-year-oldsrdquo (Daily Coffee

News) One of the leading gourmet coffee types is specialty espresso which saw a 5 percent rise

in consumption from 13 percent in 2013 to 18 percent in 2014 Over 30 million Americans drink

specialty espresso daily While gourmet coffee consumption is increasing regular non-gourmet

coffee consumption decreased by four points to 35 percent (Daily Coffee News) This change

is a result of the aging millennial population A spokesperson for the Thompson Rueters

Corporation points out that millennials are willing to spend more on coffee because they are

feeling better about their financesrdquo (Whole Lattee Love Community) The millennial and

previous generations are also educated or becoming educated about where the coffee beans are

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

6

Marketing Strategy

We will accomplish our goal by creating and maintaining customer relationships within

the community We plan to listen and cater to our customer needs we understand that every

customer has distinct taste and they may like some toppings but not others We also will be

generous to our loyal customer base and treat them well Most importantly we will strive to keep

our employees happy in a fun and safe environment We at Go Donuts Cafeacute understand that

happy employees are productive employees and their productivity benefits the employees

Slogan Premium coffee and donuts done your way

7

II INDUSTRY MARKET ANALYSIS

Coffee Industry

Prior to the 1960s Americans purchased coffee from grocery stores and brewed it at

home In the late 1960s entrepreneurs opened coffee shops carrying hard to find blends of

gourmet coffee During the 1980s the demand for flavored coffee caused producers to add

different flavors to the coffee beans This attracted a younger customer base In 2010 it was the

worldrsquos second most traded commodity to oil The Specialty Coffee Association of America

estimated the United States coffee market was worth more than $30 billion in 2013 The United

States was also named the leader in coffee consumption (Specialty Coffees)

The United States has shown steady growth in gourmet coffee Coffee consumption is

universal throughout different income categories Specialty coffee is a billion dollar industry and

itrsquos expected to grow 31 percent per year over the next 5 years About 52 million Americans

drink coffee and on average they consume about 23 gallons a year (Business Global Insights)

Projected Industry Outlook

Over the years coffee has become an increasingly desired beverage for many consumers

Even with the threat of coffee shortages due to severe weather conditions the industry is still

expected to grow With the economy in recovery it is an ideal situation for consumers to be able

to spend their money on more luxury products such as higher quality gourmet coffee Their

ldquospending is expected to increase 28 percent per yearrdquo over a five-year period until 2019

(IBISWorld) After all coffee is no longer just ldquoa shot of caffeinerdquo every morning to fill a

physiological need (USA TODAY) Coffee has become an epicurean past time with gourmet

coffee in the front of the line ldquoIts a $30 billion-a-year national industry a foodie fixation an

8

affordable luxury a boost of disease-fighting antioxidants a versatile ingredient an intoxicating

aroma and a beverage that brings people togetherrdquo (USA TODAY) Joe DeRupo the National

Coffee Association president describes coffee as part beverage and another part pop culture that

will not be going away anytime soon According to IBISWorld ldquothe industryrsquos recent growth is

expected to continue over the next five years to 2019rdquo As a result ldquorevenue is projected to rise

at an average of 38 percent to $364 billion during the five year periodrdquo (IBISWorld)

Industry Trends

Single cup brewing systems are becoming more popular within coffee shops They

provide a better variety than just brewing one blend they are great for convenience and

freshness These systems can also keep costs down by brewing only the amount of coffee

necessary for each sale

Specialty (gourmet) drinks are on the rise by 34 percent in 2014 a 31 percent increase

from 2013 according to the NCA (Daily Coffee News) The ldquoconsumption was found to be

highest among those between the ages of 25-29 (42 percent) second highest among the 18-24

and 40-59 demographics (about one third) and lowest among 60-plus-year-oldsrdquo (Daily Coffee

News) One of the leading gourmet coffee types is specialty espresso which saw a 5 percent rise

in consumption from 13 percent in 2013 to 18 percent in 2014 Over 30 million Americans drink

specialty espresso daily While gourmet coffee consumption is increasing regular non-gourmet

coffee consumption decreased by four points to 35 percent (Daily Coffee News) This change

is a result of the aging millennial population A spokesperson for the Thompson Rueters

Corporation points out that millennials are willing to spend more on coffee because they are

feeling better about their financesrdquo (Whole Lattee Love Community) The millennial and

previous generations are also educated or becoming educated about where the coffee beans are

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

7

II INDUSTRY MARKET ANALYSIS

Coffee Industry

Prior to the 1960s Americans purchased coffee from grocery stores and brewed it at

home In the late 1960s entrepreneurs opened coffee shops carrying hard to find blends of

gourmet coffee During the 1980s the demand for flavored coffee caused producers to add

different flavors to the coffee beans This attracted a younger customer base In 2010 it was the

worldrsquos second most traded commodity to oil The Specialty Coffee Association of America

estimated the United States coffee market was worth more than $30 billion in 2013 The United

States was also named the leader in coffee consumption (Specialty Coffees)

The United States has shown steady growth in gourmet coffee Coffee consumption is

universal throughout different income categories Specialty coffee is a billion dollar industry and

itrsquos expected to grow 31 percent per year over the next 5 years About 52 million Americans

drink coffee and on average they consume about 23 gallons a year (Business Global Insights)

Projected Industry Outlook

Over the years coffee has become an increasingly desired beverage for many consumers

Even with the threat of coffee shortages due to severe weather conditions the industry is still

expected to grow With the economy in recovery it is an ideal situation for consumers to be able

to spend their money on more luxury products such as higher quality gourmet coffee Their

ldquospending is expected to increase 28 percent per yearrdquo over a five-year period until 2019

(IBISWorld) After all coffee is no longer just ldquoa shot of caffeinerdquo every morning to fill a

physiological need (USA TODAY) Coffee has become an epicurean past time with gourmet

coffee in the front of the line ldquoIts a $30 billion-a-year national industry a foodie fixation an

8

affordable luxury a boost of disease-fighting antioxidants a versatile ingredient an intoxicating

aroma and a beverage that brings people togetherrdquo (USA TODAY) Joe DeRupo the National

Coffee Association president describes coffee as part beverage and another part pop culture that

will not be going away anytime soon According to IBISWorld ldquothe industryrsquos recent growth is

expected to continue over the next five years to 2019rdquo As a result ldquorevenue is projected to rise

at an average of 38 percent to $364 billion during the five year periodrdquo (IBISWorld)

Industry Trends

Single cup brewing systems are becoming more popular within coffee shops They

provide a better variety than just brewing one blend they are great for convenience and

freshness These systems can also keep costs down by brewing only the amount of coffee

necessary for each sale

Specialty (gourmet) drinks are on the rise by 34 percent in 2014 a 31 percent increase

from 2013 according to the NCA (Daily Coffee News) The ldquoconsumption was found to be

highest among those between the ages of 25-29 (42 percent) second highest among the 18-24

and 40-59 demographics (about one third) and lowest among 60-plus-year-oldsrdquo (Daily Coffee

News) One of the leading gourmet coffee types is specialty espresso which saw a 5 percent rise

in consumption from 13 percent in 2013 to 18 percent in 2014 Over 30 million Americans drink

specialty espresso daily While gourmet coffee consumption is increasing regular non-gourmet

coffee consumption decreased by four points to 35 percent (Daily Coffee News) This change

is a result of the aging millennial population A spokesperson for the Thompson Rueters

Corporation points out that millennials are willing to spend more on coffee because they are

feeling better about their financesrdquo (Whole Lattee Love Community) The millennial and

previous generations are also educated or becoming educated about where the coffee beans are

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

8

affordable luxury a boost of disease-fighting antioxidants a versatile ingredient an intoxicating

aroma and a beverage that brings people togetherrdquo (USA TODAY) Joe DeRupo the National

Coffee Association president describes coffee as part beverage and another part pop culture that

will not be going away anytime soon According to IBISWorld ldquothe industryrsquos recent growth is

expected to continue over the next five years to 2019rdquo As a result ldquorevenue is projected to rise

at an average of 38 percent to $364 billion during the five year periodrdquo (IBISWorld)

Industry Trends

Single cup brewing systems are becoming more popular within coffee shops They

provide a better variety than just brewing one blend they are great for convenience and

freshness These systems can also keep costs down by brewing only the amount of coffee

necessary for each sale

Specialty (gourmet) drinks are on the rise by 34 percent in 2014 a 31 percent increase

from 2013 according to the NCA (Daily Coffee News) The ldquoconsumption was found to be

highest among those between the ages of 25-29 (42 percent) second highest among the 18-24

and 40-59 demographics (about one third) and lowest among 60-plus-year-oldsrdquo (Daily Coffee

News) One of the leading gourmet coffee types is specialty espresso which saw a 5 percent rise

in consumption from 13 percent in 2013 to 18 percent in 2014 Over 30 million Americans drink

specialty espresso daily While gourmet coffee consumption is increasing regular non-gourmet

coffee consumption decreased by four points to 35 percent (Daily Coffee News) This change

is a result of the aging millennial population A spokesperson for the Thompson Rueters

Corporation points out that millennials are willing to spend more on coffee because they are

feeling better about their financesrdquo (Whole Lattee Love Community) The millennial and

previous generations are also educated or becoming educated about where the coffee beans are

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

9

grown how the coffee beans are roasted what types of coffees there are etc with the wide

availability of technology

Technology also allows the public to be connected globally whenever and wherever

Thus offering free WIFI is an important feature in a coffee shop It provides a great work

environment for people According to ldquomy place connectrdquo WIFI allows businesses to attract new

customers According to recent surveys 53 percent of people would be happy to sit in a cafeacute by

themselves with WIFI available WIFI also helps people not feel like they are sitting alone

because it allows them to connect with people online WIFI also helps differentiate your business

from competitors It gives customers more reasons to come to your business over the

competition

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

10

III MARKET

Target Market

Go Nuts Donuts Cafeacute will focus on providing a comfortable environment that will attract

consumers of all gender ethnicities and age groups Our major customer groups are college

students and white collar workers who live in or travel to New Stanton PA College students and

local white collar workers tend to gravitate to places that are convenient and provide a nice

environment for studying or lunch breaks Our local demographics suggest that we should target

customers in the age group 22-49 Because our location is located off three major highways the

commuters most likely will be white-collar workers college students or travelers We are also

within a short proximity of several hotels and motels Marriot Fairfield Inn amp Suites the

Comfort Inn Super 8 Express Inn Econo Lodge New Stanton Garden Inn and the Budget Inn

These hotelsmotels have over 560 rooms Most of the nearby hotelsmotels (Marriot Comfort

Inn Express Inn Days Inn and Econo Lodge) have event rooms that can hold up to several

hundred people Because of our location we must cater to a variety of clientele in many different

age groups

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

11

Demographics

The zip code 15672 (New Stanton PA) has a nearby population of 366 for 20-29 year

olds 454 for 30-39 year olds 511 for 40-49 year olds and 1565 for 50+ About 525 percent or

547 people are married homeowners or high school graduates Residents of New Stanton have

careers in the office administration sales executive and education fields The population is also

on the rise by 14 percent from last year The cost of living is less than the state average by 17

percent The population is 3602 with a median age of 45 and a median household income of

$43645 Close to 35 percent of the population are long term residents that have lived there for

more than 5 years and 22 percent have moved in the past year (Realtorcom)

Table 31 Population Age Distribution

0

100

200

300

400

500

600

700

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+

Population Age Distribution 2013

Column1

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

12

Table 32 Gender

Table 33 Marital Status

50364964

Gender Population Percentage 2013

Male

Female

9

5310

28

Marital Status 2013

Singles

Married

Single Parents

Married w kids

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

13

Table 34 Household Income

New Stanton is only one of the boroughs of Westmoreland County Westmoreland

County is home to a population of 362437 people according to the United States Census Bureau

in 2013 19 percent of people are under the age of 18 and females make up 511 percent of the

population Of the local population whites make up the majority at 952 percent BlacksAfrican

Americans only make up about 25 percent and 23 percent is Other Between 2008 and 2012 91

percent of people live in the same house for one year or more The median value of the

households between 2008 and 2012 was $131800 The median household income for 2008 to

2012 was $49734 The closest locations near New Stanton are Youngwood with a population of

2998 Hunker with a population of 283 Calumet-Norvelt with a population of 1682 and

Greensburg with a population of 14660

0

100

200

300

400

500

600

700

800

$0-$39k $40-$74K $75-$149K $150K+

Household Income 2013

Series 1

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

14

Market Demand

The National Coffee Association in 2010 released a study estimating that over 75 percent

of adults drink coffee and 58 percent say they drink it daily Coffee shops have a large customer

base Many people start drinking coffee by the time they are 24 People between the ages of 18-

34 are more likely to purchase coffee from a coffee shop At the end of 2014 the consumption of

coffee in the US grew from 22006 per thousand 60-kilogram bags in 200910 to 24991 in

201314 (United States Department of Agriculture)

Recent general trends in 2014 show there is an increase in demand for gourmet coffee

even with the increasing prices of coffee beans ldquoThere is a very low price-elasticity-of-demand

for coffeerdquo said Paul Christopher the St Louis-based chief international strategist at Wells

Fargo Advisors (Bloomberg LP) The National Coffee Association USA found that 42 percent

of 25-39 year olds are the strongest consumers of gourmet coffee Of the 25+ individuals

researched 48 of percent Hispanic-Americans 42 percent of Asian-Americans 32 percent of

Caucasian-Americans and 23 percent of African-Americans said they drink gourmet coffee

daily

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

15

IV COMPETITION amp SWOT

Competition

Go Nuts Donuts Cafeacute has both direct and indirect competition Our direct competition

includes both restaurants in New Stanton PA and nearby locations within Westmoreland

County Our indirect competition includes alternatives to restaurants such as home-brewing

coffee machines

Some of our direct competitions are chain-restaurants owned by large corporations They

include Starbucks Co Dunkin Brands Group Inc (owner of our competitor Dunkinrsquo Donuts)

and McDonaldrsquos Co Both Dunkinrsquo Donuts and McDonaldrsquos offer low-cost coffee with high-

quality Arabica beans McDonalds Premium Roast Coffee cost range from $090 for the smallest

to $129 for the largest Dunkin Donuts Coffee prices range from $149 for the smallest to $219

for extra-large Dunkin Donuts is also known for their assortment of donuts They offer 1 piece

for $095 $549 for half-a-dozen and $899 for a dozen They also offer a variety of choices of

beverages including ice coffee cappuccino hot chocolate tea soft drinks etc which can be

drink inside the restaurant or taken out at the customerrsquos discretion

Since some of our competitors are under large corporations they also have enough

revenue to expand their brand through their products services and collaborations with other

companies Starbucks for example has enough money to pay many employees to go to college

and get a higher education The amount of revenue they bring in makes them an ideal

collaborator with other businesses As a result they have high bargaining power with suppliers

for both quality and large quantity of produce For example McDonaldrsquos was able to purchase

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

16

30 percent of the blackberries in the United States of America for their Wild Berry Real Fruit

Smoothie released on July 13 2010 (Bloomberg News)

Our indirect competitors include the makers of coffee machines and brew-at-home coffee

mixes along with the bakeries in any retail or grocery stores One of our biggest indirect

competitors is Keurig Green Mountain Inc the most well-known makerdistributor of single-cup

brewing system and the creator of the K-cups They provide customers with a system of easy

on-the-go coffee without the hassle of cleaning and refilling a coffee machine with coffee filters

and ground coffee All that is required for their machines is the K-cup a small packet filled with

an assortment of ground coffee beans

While both our direct and indirect competitors can be strong they also have their

weaknesses Unlike Dunkinrsquo Donuts and McDonaldrsquos Starbucks is not cheap Some of their

specialty drinks can cost up to $6 and their bakery items can cost around $5 Since Starbucks

Dunkinrsquo Donuts and McDonaldrsquos are a large corporation they lack internal focus They can be

more focused on their employees in the corporate building than those working in their

restaurants The size of their company and popularity also means that they have trouble

providing a large quantity of products in each store They have to rely on factory production and

various mode of transportation to ship their products out to each restaurant nationwide Since the

products arenrsquot being made directly in the restaurants quality and freshness can suffer on its way

to the destination

One large issue with our indirect competitor Keurig Green Mountain begins with the cost

of their product The lowest price for a Keurig coffee machine is $9999 A 5 sample K-cups cost

more than $3 A package of 24 K-cups costs would be more than $16 Aside from the cost

Keurig Green Mountain is not very concern about the environment nor is completely concern

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

17

about the health factors involved in making their products They make their K-cups with only 5

percent biodegradablerecyclable materials while the rest is made of plastic The plastic is a

mixture of polystyrene which contains the chemical styrene that ldquocan wreak havoc on the

nervous systems of those handling it according to the Centers for Disease Control and

Preventionrdquo (Mother Jones) According to Zagg Keurig Green Mountain is trying to monopolize

the single-cup coffee brewing system industry by trying to block other companies from

manufacturing K-Cups for their machine As a result they are limiting choices for their

consumers

In comparison to our competitors Go Nuts Donuts Cafeacute will strive to be a company that

promotes valuable service quality food and a relaxing environment to our customers To

provide this two of our top priorities include employeesrsquo happiness and business transparency

We will provide training help and encouragement to our employees Additionally we will

rectify our wrongs if any occurs We want to be a company without secrets and one that cares not

just about people but the environment as well As we grow we will continue to provide a

positive and beneficial atmosphere to work and eat We will listen to concerns about our

products ideas for new products and provide more options for our customers to choose from

We will continue to value the environment by using organic materials biodegradable products

and do what we can to increase our green footprint

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

18

SWOT Analysis

Strengths- Our strengths include an environmentally friendly establishment We are

entering into a rapidly growing industry We are offering unique and customizable donuts

alongside gourmet coffee We are providing excellent customer service The industry has low

barriers to entry Cafeacutes have relatively low startup costs and government regulations This

industry also has a high turnover rate for new and closing coffee shops

Weaknesses- The industry already has established recognized leaders who have a large

portion of the market share The location we have selected does not have a drive thru which

would bring in more business and provide convenience to our customers Low barriers to entry in

this market increase the chance of new competitors entering the market Our location does not

have a large parking area for our customers

Opportunities- Expanding into other locations and possibly making a franchise would

create many opportunities to establish a larger market share

Threats-Increase of local competitors is always a risk when opening a business People

are more conscientious of the food they consume today For that reason trends that push people

into healthier habits away from junk food and caffeine could greatly impact our business

Droughts and shortages of coffee beans can cause prices to increase dramatically which could be

problematic This would directly affect costs and product availability

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

19

Table 41 SWOT Analysis Table

SWOT

Analysis

Go Nuts Donuts

Cafe

Starbucks Dunkin Donuts McDonalds

Strengths Environmentally

friendly establishment

Growing Industry

Low Barriers to entry

Customizable product

Popular worldwide

establishment

Variety of products

Benefits for

employees

Recognizable Brand

Popular national

establishment

Variety of products

High bargaining power

Recognizable Brand

Popular national

establishment

Variety of products

Cheap products

Recognizable Brand

Weaknesses Competition with

already established

companies and local

businesses

Recognizable brands

and logos

Low barriers to entry

Limited parking

Low Market share

Competition with

already established

companies and local

businesses

Expensive

Not-freshly made

food

Competition with

already established

companies and local

businesses

Factory-made donuts

Less internal focus

Unhealthy

Competition with

already established

companies and local

businesses

Factory-made food

Low wages for

employees

Less internal focus

Unhealthy

Opportunities Expansion into new

areas

Technological

advancements

New Products

Threats Increased competition

Market saturation

Consumer trends

away from caffeine

and pastries

Contamination and

droughts

Scarcity

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

20

V ADVERTISEMENT

Our advertising strategy includes handing out flyers sending direct mail and

spreading the word through social media sites Facebook Twitter Pinterest etc We also

plan to advertise in the Tribune Review offer coupons and hold special events that can

be reported by the local news The advertising cost for our chosen advertisement options

are listed below on Table 61

Table 51 Advertising Schedule

Advertising Cost

Direct Mail (New Stanton) $182800

Tribune Review $44400

Social Media $000

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

21

VI DISTRIBUTION CHANEL

Suppliers

Go Nuts Donuts Cafeacute is dedicated to doing the best for the community and its customers

Starting a business that deals in green products will hopefully change the environment and the

community around us If we want to offer a better experience for the community we need to start

with the right distributors that have the same values as Go Nuts Donuts Cafeacute Thatrsquos why we are

choosing suppliers who will provide more organic ingredients to use and green products to serve

for our coffee teas and donuts Some of our suppliers include Nicholas Coffee Company

Costco Eco-Products and Bobrsquos Red Mills

Nicholas Coffee Company practices fair trade and is certified USDA organic A company

that values the hard work of farming coffee beans and wants the best for its customers by

offering organic beans is very important for Go Nuts Donuts Cafeacute

Costco is a company that is improving their footprint in the world They are reducing

their environmental impact in the world by reducing the usage of plastic recycling and

providing organic food They also value their employees and provide them higher salaries along

with health benefits for all

Eco-Products provide disposable green products that are beneficial to the earth They see

their business venture as an incredible opportunity to benefit the world and change the business

industry

Bobrsquos Red Mills is a certified organic company and also provides gluten free products

They focus on providing awareness and a wide range of healthy products both on a national and

international scale

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

22

Supplies

Donuts There will be a single-base donut that the customers will have the option to

customize with various coatings and toppings The donut will be organically-made and will be

made fresh periodically throughout the day The choices for coatings are powdered sugar

cinnamon sugar vanilla icing strawberry icing peanut butter icing maple icing glaze and

chocolate icing The topping choices include regular and premium choices The regular choices

are rainbow sprinkles chocolate sprinkles graham crackers shredded coconut chocolate chips

and white chocolate chips The ldquoGo Nutsrdquo toppings include crushed Oreos cherry pie fillings

apple pie fillings bacon MampM and Reesersquos Pieces The nuts will be kept separately from the

other ingredients so people with nut allergies can enjoy our donuts without having to worry

about cross contamination

Coffee Go Nuts Donuts Cafeacute will be buying whole coffee beans from the Nicholas

Coffee Company Our house blend will be Colombian Supremo a well-balanced flavorful coffee

with an exceptional body and a nutty taste The Colombian Supremo is available in regular and

decaf For customers whom crave a stronger gourmet coffee we will also be offering an espresso

ldquoa blend of Central and South American Coffees great for a heavy old world espressordquo

(Nicholas Coffee Company) All coffees will be offered hot or iced To appeal to people with a

taste for more flavor Go Nuts Donuts Cafeacute has the possibility of making a variety of different

flavors by offering Torani Syrups for any coffee

Tea A variety assortment of specialty teas will also be available The teas will also be

bought from Nicholas Coffee Company They offer a wide variety of name brand tea such as

Twining of London Bigelow Tea Celestial Seasonings Chai Tea and Tazo Tea Most of our

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

23

customers will be familiar with these brands It is also beneficial to provide an alternative for

consumers who may not like the taste of coffee

Green Paper Products The cups we will be using are Eco-Products Green Stripe

Compostable Hot Cups and Eco-Products Compostable Corn Cups for cold beverages The hot

cups are lined with vegetable base coating which makes the cups 100 percent biodegradable The

cold cups are made with corn instead of plastic also making the cups 100 percent compostable

The cutlery used is Eco-Products Compostable Plant ware Cutlery The Plant ware cutlery is

certified compostable by Biodegradable Products Institute (Greenstaurant)

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

24

VII OPERATIONS

Employees

At the start of business Go Nuts Donuts Cafeacute will have four bakers six crew members

and two managers one marketing director and one accountant Pending business growth we

may add additional employees later

Employee Training

All employers will be trained and certified by ServSafe a program administrated

National Restaurant Association in compliance with the U S Food and Drug Administrationrsquos

(FDA) Food Act At the time of hire employees will be trained by the managers for their

specified positions and will be required to be certified by ServSafe Manuals for the machineries

will be provided for the employees Bakers will be required to learn how to operate and clean the

electric donut machine Baristas will be a fellow employee who will be trained and certified

Like our bakers they will learn how to operate and clean the coffee machines All employees

will also be taught the recipes for both drinks and donuts They are required to know and abide

by these recipes in order to maintain consistency in the quality

Daily Operations

The morning shift begins at 5am we project this to be our busiest time of day We will

provide extra crew members to meet the demands For the afternoon shift we will reduce the

number of crew members accordingly

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

25

Table 71 Hours of Operation

Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Hours 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-10pm 5am-11pm 5am-11pm

5am to

Table 72 Crew Members Shifts

Shift 1 Shift 2 Shift 3 Shift 4 Weekend Shift

430am-11am 5am-1130am 11am-530pm 4pm-10pm 530pm-1011pm

Table 73 Bakers Shift

Shift 1 Shift 2 Shift 3

430am-1030am 11am-5pm 5pm-1011pm

Table 74 Managers Shift

Monday 700 AM- 300 PM Sunday 900 AM - 500 PM

Wednesday 900 AM - 500 PM Monday 700 AM- 300 PM

Thursday 700 AM- 300 PM Tuesday 900 AM - 500 PM

Friday 700 AM- 300 PM Thursday 700 AM- 300 PM

Saturday 900 AM - 500 PM Friday 700 AM- 300 PM

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

26

Table 75 Accountant Marketing Director

Monday 800 AM- 400

PM

Tuesday 800 AM- 400

PM

Wednesday 800 AM- 400

PM

Thursday 800 AM- 400

PM

Friday 800 AM- 400

PM

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

27

VIII MANAGEMENT amp STAFF

Table 81 Primary Responsibilities

Job Titles Descriptions

Manager Train and manage employees and schedules certifications and inventory

Market

Director

Design implement execute and update marketing plan

Promote products to consumers

Implement and test the introduction of new products into market

Accountant Work on financial reports including accounts payable federal tax forms and

payroll

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

28

IX FINANCIALS

Go Nuts Donuts Cafeacute is starting out with each partner contributing $10000 cash for a total

of $40000 Based on research there are approximately 18000 cars that are passing in the area

From the 18000 we are assuming that 15 of those cars will be stopping in the first quarter of

business Each quarter from then on will increase sales by 0775 We are assuming since the

Coffee and Snack Industry is growing by 3 that our business will also grow by 3 The next

year will increase to 5 and the third year of operations will increase by 8

Based on the sales projection the company has decided to borrow the bare minimum from

the bank of $5000 at a rate of 6 interest We want to establish a great relationship with the

bank and show that we are a profitable company Therefore making expansion in the near future

a possibility rather than a probability During the projection of sales the net income for the first

year totals to be a little over $100000 For each year after that the profits will steadily increase

The company will have a fifth of the inventory rollover from quarter to quarter Ensuring

quality products at all time we will be using the FIFO (First In First Out) All other expenses are

staying about the same each quarter and only increasing based on the sales for each year

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

29

XI

Work Cited

Specialty Coffee Encyclopedia of Emerging Industries Farmington Hills MI Gale 2014

Business Insights Global Web 3 Oct 2014 (Retrieved from

httpbigalegroupcomglobalarticleGALE|RN25015000938f821134740995e3ce6afe710c9b1

7f2u=upitt_main)

IBISWorld (1994-2014) Coffee and Snack Shops in the US Market Research Report Retrieved

September 15 2014 from httpwwwibisworldcomindustrydefaultaspxindid=1973

2014 Coffee Consumer Trends Report More Gourmet Single Cups (2014 May 9) Retrieved

November 17 2014 from httpdailycoffeenewscom201405092014-coffee-consumer-trends-

report-more-gourmet-single-cups

Daily Coffee Drinking Increases for Young Adults (nd) Retrieved November 17 2014 from

httpcommunitywholelattelovecomblogs2135daily-coffee-drinking-increases-for-young-

adults

5 Reasons Why Your Business Should Provide Free WiFi-MyPlace Connect (nd) Retrieved

November 17 2014 from httpwwwmyplaceconnectcom5-reasons-why-your-business-

should-provide-free-wifi-to-customers

New Stanton Hotels (nd) Retrieved November 17 2014 from

httpwwwtripadvisorcomHotels-g53328-New_Stanton_Pennsylvania-Hotelshtml

Realtorcom (nd) Retrieved November 17 2014 from

httpwwwrealtorcomlocal15672lifestyle

United States Census Bureau (2013 January 1) Retrieved November 18 2014 from

httpquickfactscensusgovqfdstates4242129html

United States Department of Agriculture Foreign Agricultural Service (2014) Coffee World

Markets and Trade (Retrieved from httpappsfasusdagovpsdonlinecircularscoffeepdf)

Perez M amp Doan L (2014 March 13) Coffee Cravers Ignoring Bean-Price Surge for Caffeine

Fix Retrieved October 6 2014 from httpwwwbloombergcomnews2014-03-12coffee-

cravers-ignoring-bean-price-surge-for-caffeine-fixhtml

New Stanton Pennsylvania (nd) Retrieved November 18 2014 from httpwwwcity-

datacomcityNew-Stanton-Pennsylvaniahtml

30

Turk S (2014 September 1) IBISWorld Industry Report 72221b Coffee amp Snack Shops in the

US Retrieved November 18 2014 from

httpclients1ibisworldcomreportsusindustrydefaultaspxentid=1973MP

McDonalds Prices - Fast Food Menu Prices (nd) Retrieved November 18 2014 from

httpwwwfastfoodmenupricescommcdonalds-prices

Dunkin Donuts Prices - Fast Food Menu Prices (nd) Retrieved November 18 2014 from

httpwwwfastfoodmenupricescomdunkin-donuts-prices

College Plan (nd) Retrieved November 18 2014 from

httpwwwstarbuckscomcareerscollege-plan

Bloomberg News (2013 July 24) McDonalds Test Kitchen Where Fast Food Is Born

Retrieved from httpswwwyoutubecomwatchv=SRSjY6fWg1s

Richmond H (2014 March 20) Trash from the K-Cups sold last year would circle the Earth

almost 11 times Retrieved November 17 2014 from httpgristorglisttrash-from-the-k-cups-

sold-last-year-would-circle-the-earth-almost-11-times

Nicholas Coffee Company Retrieved October 22014 from

httpwwwnicholascoffeenetwebstorestorefrontSubcatsListcfmCatID=23

Taking Red Mill global - Portland Business Journal (2005 February 20) Retrieved November

19 2014 from

httpwwwbizjournalscomportlandstories20050221story4htmljst=cn_cn_lk

We are not a disposable products company trying to act green (nd) Retrieved November 19

2014 from httpwwwecoproductscomabout_ushtml

BizFilings by CT (2014 November 11) Employers Responsibility for FICA Payroll Taxes

Retrieved from BizFilings by CT httpwwwbizfilingscomtoolkitsbgtax-infopayroll-

taxesemployers-responsibility-fica-payroll-taxesaspx

Intuit Turbo Tax (2014) 2014 Federal Tax Rate Schedules Retrieved November 11 2014

IRS (2014 November 11) Topic 751 Retrieved from Social Security and Medicare

Withholding Rates httpwwwirsgovtaxtopicstc751html

Morningstar (2014 November 24) Starbucks Corp Retrieved from

Financialsmorningstarcom financialsmorningstarcomratiosrhtmlt=SBUX

PA Power Switch (2014 November 18) Pennsylvania Public Utilities Commission Retrieved

from PApowerswitchcom PApowerswitchcom

31

Pennsylvania Department of Revenue (2014 November 11) General Tax Information

Retrieved from Current Tax Rates

httpwwwrevenuepagovGeneralTaxInformationCurrent20Tax20RatesPagesdefaultasp

xVHN7Y_m-2G5

Tax Policy Center (2014 November 11) Tax Facts Retrieved from State Unemployment Tax

Rates 2008-2014 httpwwwtaxpolicycenterorgtaxfactsdisplayafactcfmDocid=541

Westmoreland Development Council (2014 November 11) Tax Summary Retrieved from

Corporate Income Tax httpwwwcowestmorelandpausindexaspxNID=624