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Egger's Roast Coffee
Egger's Roast Coffee
Business Plan
Invest $800,000 cash savings for capital equipment and "working capital. " (In an emergency, I can borrow up to an
Buy Capital Equpment (Roasting Machines) for $540,000 during organizing period for business
Buy Green (unroasted) Coffee Beans for cash on delivery - $2/pound after receiving bulk order for roast beans ("v
Additional variable cost per pound roasted for fuel, labor, packaging, transportation, etc to deliver beans to retailer
Average time from order to delivery is 1 month
Rent, Utilities, Insurance, Bookkeeping, etc (fixed costs) - $10,000/month - $120,000 per year"Fixed Cost" (Called a
Sell roasted, packaged, and delivered beans to retailer for $6/pound
Average time from delivery until when retailer pays is 2 months (Typical "Net 60" Payment Terms)
Sounds like a no-lose proposition!
Scenario 1- Assume steady orders & sales of $25,000 pounds per month
All assumptions the same as Scenario 1 Above, but assume sales of:
25,000 pounds per month for months 1-3
50,000 pounds per month for months 4-6
100,000 pounds per month for months 7-9
200,000 pounds per month for months 10-12
and so on…
0 per year"Fixed Cost" (Called a "fixed cost" because it doesn’t depend on amount of beans roasted)
ayment Terms)
first order placed in January, first product delivered in February, first cash pay
($10,000) ($10,000)
($100,000) ($100,000)
($15,000) ($15,000)
$25,000 $25,000
$275,000 $300,000
Year 2
November December January
25,000 25,000
$150,000 $150,000 $150,000
November December
200,000 200,000
$1,200,000 $1,200,000
($10,000) ($10,000)
($800,000) ($800,000)
($15,000) ($15,000)
$375,000 $375,000
$1,575,000 $1,950,000
Year 2
November December January
200,000 $200,000 $400,000
$600,000 $600,000 $1,200,000
$150,000 $150,000
($10,000) ($10,000)
($100,000) ($100,000)
$40,000.00 $40,000.00
($70,000.00) ($30,000.00)
$730,000.00 $770,000.00
[Return of original Capital invested - January Year 3]
November December
800,000 800,000
$4,800,000 $4,800,000
($10,000) ($10,000)
($3,200,000) ($3,200,000)
$1,590,000.00 $1,590,000.00
$3,080,000.00 $4,670,000.00