The document is the first iteration of budget estimation and economic
evaluation of a coffee retail business. The
estimation and valuation have been conducted by 1) web-based surveys of costs
of the business set up, 2) simulating cash flows, 3) assessing business
feasibility by calculating the net present value (NPV), internal rate of return
(IRR), and break even analysis.
At this stage, the valuation on the business has shown that it is an
economically feasible business. The NPVs at 10%, 12.5%, 15% and 17.5% discount
rates are 6.206, 5.740, 5.321, and 4.945 billion IDR, respectively.
Gross profit in the first year is found to be 2.269, and reach up to
4.468 billion IDR in the fifth year. Gross profits from coffee based drinks are
from 1.337 billion IDR in the first year, up to 2.633 billion IDR in the fifth
year. It is projected that sales of coffee based drinks will be 95,503 cups
annually in the first year, and almost double by the fifth year at 188,074
cups. Combined gross profits of frappe, smoothie and food items are slightly
lower than those of coffee based drinks, at 0.931 billion IDR in the first
year, and up to 1.8 billion IDR by the fifth year.
Subsequent business development plan development activities are to
consolidate business development plan:
- · Reiteration to improve budget estimation and business economic valuation, including, for example, rescaling of business and assessing potential techniques/technologies to increase efficiencies of processes.
- · Expansion of budget estimation and business valuation to include coffee roaster business component
- · Mapping of competition in the coffee retail and roaster
- · Supply chain assessment
- · Development of business and marketing strategy which include assessment of suitable business typology, assessment of key factors affecting business profitability, and market assessment.
Full report can be accessed at: https://www.dropbox.com/s/doswp8y2g3wuuf7/Development%20of%20CoffeeX%20Business%20Plan_2.docx?dl=0
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