Start Up Cost

Capital Expenditures Amounts

Telephone System 2000

Computer System 8000
Espresso Machine 8000
Regular Coffee 4000
Machines
Stereo System 3000
Coffees Grinders 3000
Roaster 50000
Packaging Heat Sealer 4000
Scales 250
Bar 20000
Tables 15000
Chairs 6000

Couches 2000
Shelves 4000
Décor 10000
Dishes 5000
Initial Marketing Cost 10000
Legal Cost 10000
Utilities Deposit 2000
Rent Deposit 6000
Roaster 10000
Total Startup Cost 217250
 Variable Costs

Variable Costs Y1 Y2
Regular Drip Coffee 21900 32850
Specialty Drinks 29200 43800
Backed Goods 45625 68437.5

Coffers Beans 48180 72270

Total Variable Cost 144905 217357.5

List of sale items and their selling prices

Items Selling Price
Regular Drip Coffee 3$
Specialty Drinks 4$
Backed Goods 1.25$
Coffee Beans 6.60$

Note: Depreciation of fixed assets has

been included in fixed costs in above table
 Assumption: Sales units in year
1 are 200 and 300 in year 2.

Fixed Costs
Fixed Costs Year 1 Year 2
Rent 70695 70695
Machine 6000 6000
Maintenance
Pt Manager Wage 25000 25000
Utilities 23565 23565
Marketing 12000 12000
Interest Expense 300 32500
Wages 251596.8 251596.8
Miscellaneous 4200 4200
Internet 3600 3600
Insurance 3000 3000
Depreciation 14425 14425
Full Time Manager 60000

Lehnert Salary 35000 35000

Total Fixed Cost 481581.8 516581.8
 Budgeted (Annual) Contribution M

Specialty Drinks Year 1 Year 2

Revenue 182500 182500
Variable Cost 36500 36500
Contribution Margin 146000 146000

Baked Goods Year 1 Year 2

Revenue 114062.5 114062.5
Variable Cost 57031.25 57031.25
Contribution Margin 57031.25 57031.25
 Budgeted (Annual) Contribution Margin Income Statement

Regular Drip Coffee Year 1 Year2

Revenue 136875 136875
Variable Cost 27375 27375
Contribution Margin 109500 109500
Year 1
Total Contribution 402868.75
Fixed Costs 481581.8
PBIT -78713.05
Capital Employed 325000
Coffee Beans Year 1 Year 2 ROI 24%
Revenue 150562.5 150562.5
Variable Cost 60225 60225
Contribution Margin 90337.5 90337.5
 Year 2
402868.75
541581.8
Company is facing loss, it is not sufficient to cover the borrowing costs.
-138713.05
325000
43%
Break-Even in Sales Revenue
(YEAR 2)

Selling Price
26
Variable Cost 9.25

Fixed Cost 541581.8

Contribution 16.75

Contribution %
64%
Breakeven Revenue 840664

The breakeven point is indicating the cut-off point of the revenues. If Café earns les
face losses.

If company earns more than break

even, it indicates margin of safety.
It means that if company earn
revenue more than 840664 the
above value will be
 Margin of Safety (MOS)
(Year 2)

Breakeven Units 32333.24179

Total Sales Units 146000

Margin Of Safety 78%

%
Margin Of Safety 113666.7582
Units

revenues. If Café earns less than $8407 it will

s.
Sales Revenue for Year 2

Target Profit $50000

Fixed Cost 541581.8
Contribution 591581.8
Revenue 924346.5625
NOTE:
Cost to sales ratio = 36% Contribution will
be 64% Total 100%
 Income statement for Year 2.

200 drinks 300 drinks

Revenues $ $
Regular Drip Coffee 109500 164250
Specialty Drinks 146000 219000
Backed Goods 91250 136875
Coffees Beans 120450 180675
Total Revenue 467200 700800
COS
Regular Drip Coffee 21900 32850
Specialty Drinks 29200 43800
Backed Goods 45625 68437.5
Coffees Beans 48180 72270
Total Cost 144905 217357.5
Gross Profit 322295 483442.5
Operating Costs
Rent 70695 70695
Machine Maintenance 6000 6000
PT Manager Wage 25000 25000
Utilities 23565 23565
Marketing 12000 12000
Interest Expense 32500 32500
Wages 251596.8 251596.8
Miscellaneous 4200 4200
Phone Expenses 3600 3600
Insurance 3000 3000
Depreciation 14425 14425
Full Time Manager 0 60000
Lehnert Salary 35000 35000
Total Fixed Cost 481581.8 541581.8
Net Profit -159286.8 -58139.3
 Cash budget on annual basis.

Inflows $

Cash Received From Customers 467200

Loan Received 250000
Equity 75000
Total Inflow 792200
Outflows
Cash Paid To Customers 144905
Rent 70695
Machine Maintenance 6000
PT Manager Wage 25000
Utilities 23565
Marketing 12000
Interest Expense 32500
Wages 251596.8
Miscellaneous 4200
Internet 3600
Insurance 3000
Lehnert Salary 35000
Startup Cost 182250
Total Outflow 794311.8
CASH OUTFLOW -2111.8
 Cash budget on monthly basis.

ITEMS JULY $ AUG $ SEPT $ OCT $ NOV $

Cash From Customers 38933 38933 38933 38933 38933

Loan
Received 250000
Equity 75000

Total Inflow 363933 38933 38933 38933 38933

OUTFLOWS
Cash Paid To Customers 12075
Rent 5891 12075 12075 12075 12075
Machine Maintenance 500 5891 5891 5891 5891
PT Manager Wage 2083 500 500 500 500
Utilities 1964 2083 2083 2083 2083
Marketing 1000 1964 1964 1964 1964
Interest Expense 1000 1000 1000 1000
Wages 20966 2708 2708 2708 2708
Miscellaneous 350 20966 20966 20966 20966
Internet 300 350 350 350 350
Insurance 250 300 300 300 300
Lehnert Salary 2917 250 250 250 250
Startup Cost 182250 2917 2917 2917 2917
Total Outflow 230547 51005 51005 51005 51005
- - - - -
Cash Outflow 133386 12072 12072 12072 12072
 DEC $ JAN $ FEB $ MAR $ APRIL $ MAY $ JUN $

38933 38933 38933 38933 38933 38933 38933

38933 38933 38933 38933 38933 38933 38933

12075 12075 12075 12075 12075 12075 12075

5891 5891 5891 5891 5891 5891 5891
500 500 500 500 500 500 500
2083 2083 2083 2083 2083 2083 2083
1964 1964 1964 1964 1964 1964 1964
1000 1000 1000 1000 1000 1000 1000
2708 2708 2708 2708 2708 2708 2708
20966 20966 20966 20966 20966 20966 20966
350 350 350 350 350 350 350
300 300 300 300 300 300 300
250 250 250 250 250 250 250
2917 2917 2917 2917 2917 2917 2917
51005 51005 51005 51005 51005 51005 51005
- - - - - - -
12072 12072 12072 12072 12072 12072 12072