Groovy Beans CafèNutrition 404

Sarah Daily, Jessica Katinszky, Chelsea Magro, Sarah Pinney, Kelsey Rieger, Mikayla Sommers, Madeleine White

Table of Contents1. Company Summary………………………………………………………………….. 1

1.1. Product/Service Description1.2. Mission Statement

2. Executive Summary…………………………………………………………………... 12.1. Team Structure: promoting from within2.2. Ownership Structure: Sole Proprietorship, owner/founders2.3. Facilities2.4. Marketing Strategies

3. Company Description…………………………………………………………………. 33.1. Team & Organization

3.1.1. Company History3.1.2. Corporate Culture3.1.3. Individual Roles3.1.4. Business Structure & Reason

3.2. Products & Services 3.2.1. Methods of Service3.2.2. Table of Products

3.3. Operating Plan3.3.1. Location & Size3.3.2. Estimated lease & Utility Costs3.3.3. Table of Major Equipment, Source, Energy Requirements & Cost3.3.4. Chart of Staff & Shift Hours

4. Health Repercussions & Analysis…………………………………………………….. 84.1. “Green Planning”

5. The Market…………………………………………………………………………….. 105.1. Market Size and Trends

5.1.1. Trends5.1.2. Competing Oragnizations5.1.3. Target Market

5.2. Competitive Analysis 5.2.1. Competitive Analysis Table5.2.2. SWOT Analysis Competitor #15.2.3. SWOT Analysis Competitor #2

5.3. Marketing Strategy5.3.1. Web & Community Presence5.3.2. Social Media5.3.3. Advertising Outlets5.3.4. Emerging Technology

6. Goals, Risks & Strategies…………………………………………………………….. 136.1. Two short term goals with analysis of two potential barriers and mitigation

2

6.2. Two long-term goals with analysis of two potential barriers and mitigation7. Financial Assumptions………………………………………………………………. 15

7.1. Costs & Expenses7.2. Total Investment Required7.3. Financing Plan

8. References…………………………………………………………………………… 219. Appendices……………………………………………………………………… 22-3

3

1. Company Summary We are a local and sustainable business offering affordable and convenient cafe-like

beverages and food products. We are the solution for on-the-go business lifestyles striving to make healthy and environmentally conscious choices. Located in the heart of Pacific Beach, we serve an array of customers varying from professionals on the go, local residents, and beach goers. As coffee enthusiasts, we are seeking a $200,000 grant to expand and further saturate the Pacific Beach market.

1.1 Product/Service DescriptionWe sell organic, fair trade coffees from Bird Rock Coffee Roasters, and our food

products are made with local and organic ingredients. Offering transparent food products, nutrition facts and ingredient lists are always provided upon request. Service is quick and efficient, yet friendly, satisfying the wide array of customers.

1.2 Mission Statement Our mission is to serve our customer promptly, efficiently, and professionally. To

maintain a presentable, clean, and welcoming environment for customers and employees. To provide convenient and on-the-go meals focusing on healthy foods. To welcome customer feedback and to extend gratitude by offering incentives for customer loyalty. By maintaining these values, we shall offer a new, healthy, breakfast experience customers can look forward to.

2. Executive SummaryOur company is still 100% owned by the founders. Funding was accomplished without giving away equity of the company. The owners and management team is comprised of individuals from various backgrounds including sales, management, food service, hospitality, and nutrition which makes for a multi-faceted and talented team. The following section consists of background experience from our Company’s partners that is relevant to the success of the company

2.1 Team Structure: Owners - > General Manager - > Shift Manager -> Team MemberThe owners are still active members in business. They are a part of the everyday decision making process and know each staff member by name. The General Manager is involved in every aspect of the business including: scheduling, inventory, staffing, organization, operational issues, maintenance, and sanitation. The Shift Managers are appointed managers after showing dedication and commitment to the company and proving mastering the menu, products, and operations. While on shift, the Shift Manager is expected to treat each Team Member equally and to actively participate, not just delegate, in the daily tasks. Positions for Shift Managers and General Managers are always considered from Team Members within the company before looking elsewhere.

2.2 Ownership Structure: Partnership

1

Our business ownership is a partnership. The partners including Jessica Katinszky, Mikayla Sommers, Kelsey Rieger, Madeleine White, Sarah Daily, Chelsea Magro, and Sarah Pinney. A partnership was decided upon because each owner manages different aspects of the business. Kelsey handles the finances including risk management, allocation of funds, and record keeping. Mikayla runs our collaborative marketing department by keeping our target market enthused and by attracting and retaining new customers. Jessica manages the staff by scheduling, running payroll, hiring and training. Each team member brings a unique skill set to the table. Both Chelsea Magro and Sarah Pinney have B.S. degrees in Hospitality and Tourism Management with specializations in Restaurant Management. Combined their leadership experience and entrepreneurial skills work to keep our customers happy, satisfied and returning for more. Additionally, Sarah D. and Madeleine are soon to be registered dieticians with B.S. degrees in Food and Nutrition. Their passion and knowledge for health and nutrition help align the business to provide customers with food and beverages that are not only delicious, but also nutritious.

2.3 FacilitiesGroovy Beans is a cafe for those on-the-go and for those who want to enjoy the coffee

shop atmosphere. With a location of around 2,000 square feet, Groovy Beans has a spacious yet homey ambiance. We have bar counter top seating for individuals as well as sturdy tables and comfortable chairs for those who want to gather and stay a while. We offer password protected wifi to all of our customers so they can access their favorite websites whilst enjoying their preferred food or beverage. Behind the counter, the layout facilitates a streamlined operations with minimal backtracking and cross tracking. blueprint/floor plan sketch. Reference Appendix II

2.4 Marketing StrategiesGroovy Beans is the perfect place for both people on the go and people wanting to stay

and enjoy the “coffee shop environment”. Our convenient location positions us perfectly to cater to the commuting students, workers, and passerby traffic in and out of the Pacific Beach area. Groovy Beans is suited for individuals who are environmentally and/or health conscious. By serving organic, fair-trade coffees in compostable cups we are showing our consideration of the environment. By offering organic products whenever possible, non-dairy milk options, fresh ingredients with minimal processing we are showing our commitment to improving individuals health by making eating healthy as convenient and affordable as possible.

In order to drive sustainable business sales, we will employ the following marketing strategies:

2

Flyers:Flyers will be distributed throughout the community of San Diego, including restaurants, business and schools. These flyers will include information about the cafe’s hours, products, and any upcoming deals.

Social Media: Groovy Beans will advertise online through Facebook, Instagram, and Twitter. The location and special’s of the day will be posted through these pages. In addition, customers can receive a discount on their first purchase by following/liking our page.

Customer Loyalty: In order to stay current with the emerging technology, our company is supporting green practices by reducing paper waste and paying through the LevelUp application. This application allows our customers to set up an account and pay through their smartphones. Not only is this a super convenient way to pay, but it also speeds up the wait time and reduces the paper use needed to printing receipts. In order to reward our customers for helping us reduce paper use, they will be given a 5% discount on every purchase, creating a win-win situation for the customer and our company.

3. Company Description

3.1 Team and Organization Groovy Beans is an innovative organization where management is continually working to

improve the quality of work life. We strive to promote empowered decision-making, sociability, and self-fulfillment among all employees. We have worked hard to formulate clear visions and values to which employees can commit them. Our employees are hard working, detail-oriented, and possess leadership and entrepreneurial qualities. We take the hiring process very seriously, and will go above and beyond to ensure that our employees are of superior quality. We provide our new employees with three days of on-the-job training. On each training day, the training manager observes, takes notes, and gives the employee a test at the end of the shift. If the new employee does not meet expectations by the third day of training, they will be let go. This strict but important policy is what allows our company to provide the excellent, top quality service that we are known for.

3.1.1. Company History

3

The seven Groovy Bean owners are Jessica Katinszky, Mikayla Sommers, Kelsey Rieger, Madeleine White, Sarah Daily, Chelsea Magro, and Sarah Pinney. All seven owners hold equal share in the company. Jessica, Mikayla, and Kelsey were college roommates living in Pacific Beach. As business majors and coffee lovers nearing graduation, they found themselves looking for a new local coffee shop to study at. Unable to find an adequate shop to meet their needs, Jessica, Mikayla, and Kelsey took matters into their own hands and began to brainstorm ideas to develop their own local coffee shop. They recruited the help of their next-door neighbors, Chelsea and Sarah P., college students and unhappy baristas looking for new jobs. Chelsea and Sarah were happy to lend their knowledge of the coffee industry to help turn the promising idea into a reality. The last two owners, Sarah D. and Madeleine, were also college students who lived in Pacific Beach. Jessica asked them to join the team to help with the food service and nutrition aspects of the company. As future dietitians, Sarah and Madeleine welcomed the opportunity to gain experience working in food service management. All seven partners have been with the company from the very beginning and are committed to going above-and-beyond the industry standards to create a product and customer service experience unlike all others.

3. 1.2. Corporate Culture As a company who strives to create a positive corporate culture, Groovy Beans values

every single employee and treats them as part of the team. Our close-knit company strives to promote integrity among all members of the organization, promoting trust and honesty as fundamental values. Our bottom style of management allows for open-communication and promotes employee participation at every level of management.

As a company who is committed to providing healthy and environmentally conscious choices, we strive to participate in community events to support local San Diego organizations. Every year our team participates in local beach clean ups and charity runs. We also hold fundraisers for local schools and organizations on a weekly basis. Furthermore, we place an emphasis on employee physical health and wellness. As a team, we encourage each other to live healthy lifestyles. Every month, our management team coordinates a company wide outing such as a hike or beach day.

Most importantly, we strive to provide a comfortable, relaxing environment for both employees and customers. We want our employees to look forward to coming into work just as much as our customers look forward to coming in for their specialty coffee beverage or favorite coffee dish. In order to make this goal a reality, we empower hourly employees and recognize superior performance.

3.1.3. Individual RolesOur multi-faceted and talented team is made up of seven different owners from different

backgrounds. Our company has experienced a great deal of success as a result of this diversity in experience. Jessica Katinszky, owner and general manager, has a B.A. in Business Administration with a specialization in Management. As a result, she has a broad knowledge of the practice of business management, the workings of business and the economy, and the

4

behavior of people. Mikayla Sommers, owner, has a B.A. in Business Administration with a specialization in Marketing. This has provided her with training in developing decision models to aid in solving marketing problems. Her excellence in planning and analysis of strategies for products and services allows our company to target our market effectively. Kelsey Rieger, owner, has a B.A. in Business Administration with a specialization in Finance. Her vast knowledge concerning the allocation of resources and the risk and uncertainty in the decision-making process has facilitated the company in making difficult monetary decisions. Both Chelsea Magro and Sarah Pinney have B.S. degrees in Hospitality and Tourism Management with specializations in Restaurant Management. With a strong background in leadership and entrepreneurial skills, both Chelsea and Sarah work to keep our customers happy and satisfied. Finally, Sarah D. and Madeleine both have B.S. degrees in Food and Nutrition. Soon to be registered dietitians, they strive to provide customers with food and beverages that are both nutritious and delicious. As a team, the owners of Groovy Bean are committed to working as a team to provide the Pacific Beach community with a one-of-a-kind dining experience that will keep customers coming back with a smile.

3.1.4. Business Structure and Reason At Groovy Beans, we recognize the importance of each individual employee, not just the

job that they perform. We encourage a team-based work ethic where all employee’s opinions and ideas are taken into consideration. This open communication is what allows our management team to stimulate and facilitate change, a critical component of our organization. In order to promote participative management where employees can participate in decisions about their work and employment, the general manager will send out a group text to shift managers on a weekly basis. This text asks for feedback about weekly operations and employee relations. It also gives the shift manager an opportunity to express any questions or concerns that may need addressed. The general manager will then take this feedback and report it back during the weekly management meetings. Weekly management meetings include all owners and the general manager. During these meetings, the management team reviews any operational issues, employee relations, potential company improvements, and expansion plans. After each management team meeting, a company-wide email is sent to update and inform employees about important information regarding operations. This weekly email serves as a company wide source of communication and is key to upholding our company’s visions and values.

3.2 Products & Services 3.2.1 Methods of Service

5

There are many steps that Groovy Beans takes to provide effective and efficient service to our customers. We schedule 2-3 employees at all times to ensure that every customer's needs are met in a timely fashion without compromising quality. There is always a cashier scheduled who is responsible primarily for taking orders and handling payments. While doing this, they are also in charge of handing customers any pastries or prepackaged snacks ordered, and preparing the simple drinks on the menu, such as drip coffee, and iced tea. Also the cashier is responsible for delivering condiments like cream cheese or butter to the customers if it follows their order. By having the cashier be responsible for this, we have added to our competitive advantage by reducing wait times and limiting crowds.

The next employee is Barista 1. If there are only two employees scheduled on a shift, barista 1 is in charge of preparing and delivering all drink orders. If three employees are scheduled, barista 1 is in charge of espresso drink prep, and maintaining the coffee bar area. This barista will be responsible for the more complicated drinks items ordered.

Responsibilities for barista 2 includes but is not limited to: restocking, cleaning, taking out the trash, keeping the coffee bar clean and stocked, brewing coffee and iced tea, preparing carafes. Also, when scheduled, barista 2 should offer additional help and relief for barista 1 when it is busy to keep wait times to a minimum. Barista 2 will also be in charge of preparing made to order items, such as oatmeal.

It is the responsibility of ALL employees to maintain a clean and organized space, take out the trash, restock and serve customers efficiently and effectively.

Groovy Beans will be utilizing a POS system and iPad technology for payments and tracking orders and inventory. With the iPad we will be using Square to process credit cards and ensure a lower percent cost for our business.

3.2.2 Table of Products *See Appendix I for calculationsItem Purchase Price Selling Price ProfitPlain Bagel with Cream Cheese

Bagel: $41.95/48 bagels = $0.87 eachCream cheese: $39.95/100 packets = $0.36 each

Bagel = $2.50 eachWith cream cheese: $2.99

$1.76

Green Matcha Tea $25.25/168 tea bags = $0.15 each $0.99 each $0.84Oatmeal (Irish Steel Cut Oats)

$73.95/288 oz. = 72 servings = $1.03 $3.00 per ½ cup serving (includes three free toppings and $0.75 extra for additional toppings)

$1.97

Coffee - Cafe Moto Organic Indo Noir

$42.25/5lb bag$0.74/serving (small)

small: $1.99medium: $2.15large: $2.55

$1.25 for small

Yogurt cups - Wallaby Organic single serve cups

$27.85/12 cups = $2.32 $3.99 each $1.67

3.3 Operating Plan

6

3.3.1 Location & Size An existing 1,850 square foot building will be leased at 933 Garnet Avenue in Pacific

Beach, San Diego. We assume that we can seat approximately 30 people comfortably. Improvements will include patio chairs and tables outside on the sidewalk and a coffee bar/counter inside the building. Our product line will be purchased from outside vendors.

3.3.2 Estimated lease & Utility Costs

Rent: $41.51/sq. ft./year = $76,793.50/year Water: with a usage of about 100 HCF units per month, the average water bill would be roughly $630/month (3).SDG&E: We are a low energy use business and qualify for the A-rate plan, using less than 12,000 kWh/month. Our total bill would be approximately $1,500/month (4).COX Internet: Internet Ultimate package - $79.99/month (12 month contract) - public Wi-Fi (5).

3.3.3 Table of Major Equipment, Source, Energy Requirements & CostOperating equipment needed consists of typical, standard restaurant fixtures. We will

require no further specialized equipment. Most of our equipment will be purchased through “Webstaraunt.com” distributors and we will purchase any Energy Star and WaterSense appliances that can be used at this location (1, 2).

Appliance Cost Energy RequirementsLa Marzocco 3 group head; semi-auto Espresso machine

$11,800.00 240 V6,500 W

Mahlkonig K 30 Twin Espresso Grinder (decaf and regular)

$4,450.00 115 V5,000 W

Portafilters (3) $174.00 ($58.00 each) N/ABaskets (3) $53.85 ($17.95 each) N/AFrothing Pitchers (6) $107.94 ($17.99 each) N/ABar Spoons (2) $2.70 (1.35 each) N/ACoffee Brewer - Bunn BrewWISE twin brewer

$2,072.00 120-240 V6,000 W

Grinder - Bunn BrewWISE Multi-Hopper

$1,386.13 120 V6,000 W

Refrigerator - True TUC-72-ADA 72” Undercounter Refrigerator w/ Energy Star

$2,682.47 Temp range: 32-41 Degrees F9 Amps

3.3.4. Staff and Shift hours

7

We have a team of personable, hard-working, and dedicated staff members who emanate passion for customer service and the greater good of the business. We run with a smaller team of ten staff members, all having thorough knowledge of how to open, close, and operate the store while serving our customer population. Both owners take responsibility for managerial duties such as inventory, business operation/organization, and customer service.

STAFF: Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total hours

Chelsea Shift 2 Shift 5 Shift 2 Shift 1 Shift 1 30.5

Jessica Shift 5 Shift 5 Shift 4 Shift 2 Shift 3 29

Kelsey Shift 4 Shift 2 Shift 1 Shift 3 Shift 4 29

Maddie Shift 1 Shift 1 Shift 4 Shift 4 Shift 5 27.5

Mikayla Shift 3 Shift 3 Shift 5 Shift 3 Shift 1 31

Sarah D. Shift 4 Shift 3 Shift 2 Shift 3 Shift 4 29.5

Sarah P. Shift 2 Shift 1 Shift 5 Shift 5 Shift 2 30

Shift 1: AM Opener: 5:30 am - 12:00 pm; 30-minute break = 6 hoursShift 2: AM Mid: 6:00 am - 1:00 pm; 30-minute break = 6.5 hoursShift 3: AM Closer: 7:00 am - 2:00 pm; 30 minute break = 6.5 hoursShift 4: PM Opener: 2:00 pm - 7:00 pm; 10 minute break = 5 hoursShift 5: PM Closer: 3:00 pm - 8:30 pm; 10 minute break = 5.5 hours

4. Health Repercussions & AnalysisThe corporate world is full of successful, dedicated and hard-working people, but often

times these people put the demands of their jobs in priority over the demands of their health. The rate of Americans who consume breakfast every morning has dropped dramatically over past decades, according to the International Food Information Council Foundation’s review on Breakfast and Health (6). Being a team of nutrition experts, Groovy Beans was built to meet the needs of busy professionals by offering quick and efficient service without compromising the health and nutrition of our customers. A wide array of menu items allow customers with all tastes and preferences a number of healthy options to choose from, which is important since much of the customer base is steady and regular, with many choosing Groovy Beans daily or almost daily.

At Groovy Beans we believe that in order to make healthy people, we need a clean and healthy planet from which we obtain our products. We do this through the practice of business sustainability to ensure that all of the processes needed to obtain our products address the current

8

environmental concerns. Using a Farm-to-Table approach, most products are grown and bought locally, drastically reducing processing, manufacturing, and transportation costs and impacts while improving freshness and flavor (7). Additionally, this concept helps support our local farmers by reducing competition with large-scale agricultural operations that negatively impact the local economy (7). Additional sustainable practices include use of green cleaning products, launching of the venue’s recycling assistance program (Appendix III), and the use of ENERGY STAR equipment and products. Use of these products developed by the Environmental Protection Agency under the Clean Air Act contributes to health and environmental benefits by reducing energy consumption, pollution, and greenhouse gas emissions as well as improving energy security (8). By making environmental sustainability a priority in the business, Groovy Beans can serve its customers knowing they are receiving the cleanest and healthiest of products.

Using fair trade products is our effort to support trading partnerships that are based on transparency and respect in order to create great equality in international business. These partnerships aim to offer better working and trading conditions to farmers in production of coffee, cocoa, and fruit and support businesses that prioritize sustainability and preserving of the environment (9). All of our coffee is procured from Cafe Moto, a business committed to the just compensation for farmers and workers. We chose this company not only because of it’s great tasting organic coffees, but more importantly because it helps farmers in developing countries build sustainable businesses that positively influence their communities (10).

4.1 Green Planning At Groovy Beans we promote environmentally conscious practices throughout our café.

By using biodegradable and compostable cups and lids, we significantly reduce the amount of waste contributed to landfills by using other plastic or Styrofoam options. We buy our cups and lids from Green Paper Products, they use a renewable resin made from corn to line cups and lids instead of petroleum based liners. These cups and lids are guaranteed to withstand both boiling temperatures and refrigeration. Also, because they are plant based, they are made with no toxic materials.

Item Price per Case Price per Item Items per CaseHot Cups

4 ounce $55.75 $0.06 100012 ounce $106.60 $0.10 100016 ounce $119.96 $0.12 100020 ounce $74.40 $0.15 500

Iced Cups16 ounce $117.77 $0.11 100020 ounce $144.58 $0.14 100024 ounce $117.90 $0.20 600

LidsHot lids $104.86 $0.09 1000

9

Iced flat lids 16/24 oz. $55.27 $0.06 1000Iced flat lids 20 ounce $56.67 $0.06 1000

Iced Dome lid 16/24 oz. $80.20 $0.08 1000Iced Dome lid 20 ounce $79.80 $0.08 1000Hot container lids 16 oz. $66.76 $0.13 500Food Containers

Oatmeal cups $88.17 $0.18 500

5. The Market

5.1 Market Size & TrendsA). Trends

Dairy free milk alternatives – soy milk, rice milk, almond milk Environmentally conscious paper/plastic products Organic, fair trade coffee and teas Fast and convenient service Study space with outlets Vibe – domestic, refurbished furniture items, rustic woodB). Competing Organizations

Better Buzz Pros: drive thru, ‘locally grown’ coffee, Best Drink Ever

Cons: limited indoor seating, busy, long lines, high prices, very limited-no parking, food items?, complaints of poor service or employees getting orders wrong when drive thru line gets busy

Starbucks Pros: drive thru, knowing what to expect, indoors seating

Cons: awkward drive thru route, slow drink output, faster to dine in than go drive thru, slow Wi-Fi connection

Caffe VelocePros: acai bowls, wide variety of non-dairy milks, gluten free foods, drive thru, organic coffee, locally owned business

Cons: cash only, minimal seating, expensiveC). Target Market

People both on the go and wanting to stay and enjoy the “coffee shop environment” Commuting students, workers, and passer-by in the Pacific Beach area. Individuals who are looking for an environmentally conscious company serving organic,

fair trade coffees with a variety of non-dairy milk options. Patrons who are looking for quick, on-the-go service and high quality drinks and food

products.5.2. Competitive Analysis

10

Currently, there are no other cafes in San Diego that serve fair trade coffees and food items made with local and organic ingredients at such an affordable price. Our on the go breakfast options make it easy for people to start eating breakfast again. We are conveniently located on the main drag of Pacific Beach to provide coffee to those both coming and leaving the area in a hurry. Compared to other coffee shops, we have sufficient staff during the rush hours, resulting in a quicker wait time of under four minutes compared to the average wait of over five minutes at other companies. Having sufficient employees on staff allows us to serve more customers, which generates ample revenue.

5.2.1 Analysis tableCompany name

Trend Location Hours Products Price How they excel

Areas to improve

Groovy Beans

Cafe 933 Garnet AveSan Diego, Ca

6am-8pm / 7days

BagelsOatmeal CoffeeTeasSpeciality beverages VegetablesPastries

$1.99 Fast service, offer quality products at an affordable price, drive through for those in a hurry

Looking to expand to more locations to better serve the San Diego community.

Starbucks Cafe 1774 Garnet AveSan Diego, Ca

5am-10pm /7days

EspressoCoffee DrinksTea JuicesSmoothiesItalian SodasSnacks/Pastries

$2.95 Standardized, frequent and convenient locations

Need more affordable prices, speed up the wait time

Better Buzz Coffee

Cafe 1909 Garnet AveSan Diego, Ca

5am-8pm/7 days

CoffeeEspresso TeasPastries

$2.15 A variety of menu options, brand recognition

Lack of seating,

Caffe Veloce

Cafe 4450 Ingraham StreetSan Diego, Ca

M-F: 5:30am-1:30pmSat/Sun: 6:00am-1:30pm

Organic CoffeeTeasMilks (almond, soy, rice, hemp, low fat) AcaiItalian Sodas

$2.25 A variety of options for gluten and dairy allergies, there is a drive through, organic coffee.

Cash only, minimal seating, expensive

5.3 Marketing Strategy

11

Groovy Beans will promote the sale of affordable and convenient cafe-like beverages and food products through:

Flyers:Flyers will be distributed throughout the community of San Diego, including restaurants, business and schools. These flyers will include information about the cafe’s hours, products, and any upcoming deals.

Social Media: Groovy Beans will advertise online through Facebook, Instagram, and Twitter. The location and specials of the day will be posted through these pages. In addition, customers can receive a discount on their first purchase by following/liking our page.

Customer Loyalty: In order to stay current with the emerging technology, our company is supporting green practices by reducing paper waste and paying through the LevelUp application. This application allows our customers to set up an account and pay through their smartphones. Not only is this a super convenient way to pay, but it also speeds up the wait time and reduces the paper use needed to printing receipts. In order to reward our customers for helping us reduce paper use, they will be given a 5% discount on every purchase, creating a win-win situation for the customer and our company.

6. Goals, Risks and Strategies Groovy Beans will use organic products and sustainable approaches to provide our customers with food and beverage items that meet their utmost satisfaction. Our society has seen a rising trend in health consciousness, so our practices and services will insure customer satisfaction, leading to financial success.

6.1 Business goalsGroovy Beans intends to reach the following goals:

1) Reduce the amount of waste and materials sent to landfills annually2) Develop an app for text-to-order to meet the evolving needs of the on-the-go

customer without compromising quality of food and a friendly environment within year one.

3) By year three, withhold a high success rate by serving returning satisfied customers and remaining profitable with a net income of $100,000 per year.

4) Expand our company by opening another location in San Diego to better serve the commuting customer by year three.

6.2 Strategies, Barriers, Mitigation

12

Groovy Beans will use the following strategies to cope with barriers in achieving company goals:

1) Using biodegradable and compostable cups and lids, utensils and napkins, along with joining the sustainable packaging coalition, an industry-working group dedicated to more robust environmental vision for packaging, will help our company maintain sustainability and reduce waste. Groovy Beans must find a company that collects compostable waste from our location, which could create a barrier in reducing waste sent to landfills. Although the supplies are eco-friendly, they must meet standard specifications for plastics and paper that are designed to be aerobically composted (19). If the composting company finds that the inventory products don't meet the standards, a new product brand will be selected. The company will also inquire other biodegradable and compostable inventory items to increase the amount of compostable waste, and decrease overall waste sent to landfills

2) The text-to-order app will allow customers to place their order with the estimated time of arrival to ensure there order is ready and fresh when approaching the premises. This will compensate for our lack of a drive-thru, and still target on-the-go individuals. A potential barrier could arise for customers who previously placed an order, by having a long wait time due to other customers in the store. A separate line and register will be used for text orders to avoid an increased wait time and deliver well-organized, quick service.

3) Groovy Bean’s success will come from providing customers with products that meet their nutrition and lifestyle needs. Customers will be reached through advertising, social media, and newsletters that will be used to promote the products sold. So-called “trendsetters” and “key influencers” will be targeted to create word-of-mouth recommendations amongst the small community of Pacific Beach. A comfortable environment will be presented, along with a highly trained and friendly staff. Appealing promotions and loyalty programs will be offered to maintain consistent customers. These components will help us reach our high success rate goal by remaining profitable. Barriers to our success could stem from local competition that decreases our net sales and returning customers. This goal was based of off estimated annual gross profit from the first year of operation of $112,728.16. Although each year we wont have the contributed cash of $300,000 from investments, three years should allow us with enough time to make improvements and changes necessary to maintain customer satisfaction and success to reach a net income of $100,000 per year.

13

4) Expecting that Groovy Beans will be a financially successful business, the partners will make future plans to expand their business. Expanding the company by opening another location will yield an increased customer basis and provide more marketing and advertising opportunities. Despite the success of the Pacific Beach location, financial barriers may still arise. We will be seeking a $200,000 grant funding the expenses of the new location. Inquiring a grant for funding and maintaining budgets will ensure that the company remains profitable. Locations similar to pacific beach, such as Mission Beach and Ocean Beach will be explored to expand the customer base. These high traffic areas will allow for a sit-down atmosphere. The close proximity between locations will benefit the company when transporting materials, products and equipment needed in multiple locations. Current conditions will be used to make predictions about changes in the new location. Consequences of any changes will be considered before action.

7. Financial AssumptionsIn this section, start-up expenses are summarized to construct financial assumptions by

taking into account supplies, food cost, utilities, rent, equipment, planning, and labor for the first month of operations. The company’s starting capital and profit from sales is also projected. The current population of Pacific Beach is approximately 40,000 people (12). It was estimated that in one month, we would serve 15% of the total Pacific Beach population, which would be 6,000 customers a month, and about 200 customers a day.

7.1 Costs and Expenses Food CostGroovy Beans plans on having shipments each day and each week for inventory on hand

due to the perishability of our products and also to insure the freshest ingredients possible. Estimations for the cost of food during the first month of operation is based on five menu items and 200 customers served each day. Assumptions are that 30% of customers per day (60 customers) will order a plain bagel, and of those 60 customers, 45 will order their bagel with cream cheese. Ten percent of customers (20 customers) will order oatmeal and 10% of customers (20 customers) will order a yogurt cup. Furthermore, it is estimated that 75% of customers (150 customers) will order a small coffee and 20% of customers (40 customers) will order a green matcha tea. Using the purchase price of each menu item, food cost was calculated using the estimated number of customers and meals served each day for one month.  These food products are also listed in the Inventory table; however, this table shows the expense of food alone. See appendix for calculations.

Menu Item Food Cost per Month Plain Bagel $1,566.00Cream Cheese $486.00Oatmeal $618.00Yogurt $1,392.00Coffee $3,330.00Green Matcha Tea $180.00

14

Total Food Cost per Month $5,352.00

Total Cost of Goods SoldThe total cost of goods sold is the food cost plus inventory used to create the final

product served. The 12 oz small coffee cups are $0.10 each and lids are $0.09 each. The cost for lids/cups for 150 small coffees a day for one month would be $855.00 The cost for lids/cups for 40 Green Match Teas a day for one month would be $228.00. The 16oz. containers for oatmeal are $0.18 each and the lids are $0.13 each. The cost for containers/lids for 20 oatmeals a day for one month would be $186.00. . Refer to section 4.3 for a breakdown of the number of cups, lids, and containers per cases for each size. See Appendices for calculation.

Total Cost of Goods Sold for One Month $6,681.00

InventoryBelow is the inventory, a table of expenses needed to create our selling products. It was

estimated that 150 coffees would be sold a day, totaling 4,500 a month and 50 green teas would be sold each day, totaling 2,700 a month. Enough cups and lids were ordered to slightly overstock these estimations and have enough on hand. Refer to section 4.3 for a breakdown of the number of cups, lids, and containers per cases for each size. Toppings for our oatmeal bar were purchased at Vons (13). The total inventory expense for one month is $9,170.82.

Hot Cups - 4oz, 12oz, 16oz, 20oz $431.11Hot Lids (4 cases) $419.44Cold Cups (16oz, 20oz, 24oz) $380.25Cold Dome Lids (16oz, 20oz, 24oz) $160.00Cold Flat Lids (16oz, 20oz, 24oz) $111.9416 oz. Containers $88.1716 oz.  Lids (for containers) $66.76Otis Spunkmeyer Plain Bagels $1,566.10Cream Cheese Packets $486.00Green Matcha Tea Bags $180.00Irish Steel Cut Oats $618.00Sun-Maid Seedless Raisins $13.18Safeway Brown Sugar $3.98McCormick Ground Cinnamon $17.18Safeway Walnuts $16.98Diamond Sliced Almonds $37.20Pumpkin Seeds $6.59Chia Seeds $21.98Honey $22.72Safeway Banana ($0.32 each) $6.40Safeway Strawberries $17.56Safeway Unsweetened Whole Blueberries $10.00Café Moto Organic Indo Noir Coffee $3,330.00

15

Wallaby Organic Single Serve Yogurt Cups

$1,392.00

Total Inventory Expenses for One Month $9,403.50/ month

SuppliesStart up supplies needed for safety, sanitation, maintenance, inventory control, storage,

service etc. for the first month of operation can be purchased from Costco Wholesale (14). Total supplies expense for one month is $1,990.27.

Recycled Paper Sleeves for 12/16oz Hot Cups ($34.99/1000 count)

$69.98

Recycled Napkins ($4.79 each/250count) $95.80Eco-Products Renewable Plant Starch Knife ($64.99/1,000 count)

$259.96

Eco-Products Renewable Plant StarchSpoon ($64.99/1,000 count)

$259.96

Eco-Products Renewable Plant Starch Fork ($64.99/1,000 count)

$259.96

Reynolds Food Service Foil Sheets ($27.99/1000 sheets)

$55.98

Sugar in the Raw packets ($9.19/500 count)

$91.90

Pure Organic Stevia Sweetener Packets ($39.99/1000 count)

$159.00

Rubbermaid Slim Jim Trash Can ($44.79/ 2 for front of store)

$89.58

Rubbermaid Trash Can-32 Gal ($32.99/ 2 for back of store)

$37.98

Earthsence Recycled Large Trash Bags ($13.99/80 count)

$69.95

Large Angler Broom ($9.79) $19.58Rubbermaid Heavy Duty Dustpan ($5.28) $10.56Quick Change Metal Head Mop Handle ($8.49)

$16.98

Loop Wet Cotton Mop Head ($6.89) $27.56Rubbermaid 35-Quart Wringer/Bucket $76.89Rubbermaid “Caution” Floor Sign $13.89Clorox Germicidal Bleach ($16.99/121 oz Bottle-3 count)

$67.96

Palmolive Antibacterial Liquid Dish Soap ($3.29)

$32.90

Purell Instant Hand Sanitizer Dispenser ($8.19)

$16.38

Purell Advanced Instant Hand Sanitizer Gel Refill

$16.49

Scotch-Brite Power Sponge ($13.59/5 $54.36

16

count)Disposable Gloves $109.90Centerpull Paper Towel Dispenser $18.99Centerpull Towel Rolls (6 count) $44.79Sharpies $12.99Total Supply Expenses for One Month $1,990.27/month

UtilitiesTotal Utilities for one month was calculated from the water bill, SDG&E bill, and the

Cox Internet bill.

Water $630.00/monthSDG&E $1,500.00/monthCox Internet $79.99/monthTotal Utilities for One Month $2,209.99

Labor Cost- Salaries and Payroll  Groovy Bean’s pays 9$ per hour to all staff, however, the General Manager Jessica earns

12$ per hour. Salary cost was based on the company’s shift schedule and total hours a week each owner as an employee will me making. ADP small business payroll service is used to assist with preparing checks, preparing and reporting payroll taxes (including tax duties), direct deposit and human resource services, which costs $72.00 per payroll (15). Groovy Beans processes payroll bi-weekly, costing us $144.00 each month. Total labor cost is the total salary cost plus the total payroll processing cost.

Staff Total Hours worked per week

Total Hours worked per month

Total pay per month

Chelsea 30.5 hours 122 hours $1,098.00Sarah P. 30 hours 120 hours $1,080.00Kelsey 29 hours 116 hours $1,044.00Maddie 27.5 hours 110 hours $990.00Mikayla 31 hours 124 hours $1,116.00Sarah D. 29.5 hours 118 hours $1,062.00Jessica 29 hours 116 hours $1,392.00

Total Salary Cost for One Month $7782.00Total Payroll Processing and Taxes for One Month

$144.00

Total Labor Cost for One Month $7926.00

Equipment

17

Refer to section 3 for the breakdown of appliances cost.  Other equipment necessary for start-up are listed below and found for purchase at Restaurant Depot (16). Enough chairs and tables to comfortably fit approximately 30 customers are represented, including indoor and patio seating.

Appliances $22,657.00Point of Sale System Cash Register $1,399.00Framed Menu Letter Board- Vertical $48.24Framed Menu Letter Board- Horizontal $64.34High Visibility LED Open Sign $55.4236 in. Square Black Table with 4 Black Banquet Chairs ($176.80 ea./5 purchased)

$884.00

Havana Classic Bar Stool (8 stools) $150.00Wicker Square Folding Table with Umbrella $180.00Savannah High Back Stacking Armchair (37.20 ea./ 4 purchased)

$148.80

Tabletop Napkin Dispensers ($8.99 ea./7 purchased)

$62.93

Total Equipment Expense $25,648.93

Operating ExpensesBelow is a summary of the total operating expenses for one month. It is important to note,

many of these expenses have been broken down in the tables above. Utilities include the water bill, SDG&E bill, and Cox bill. The partners of the company use their personal telephone and computers when needed;

therefore we have no company telephone. Emerging technology will allow us to use a phone line via Google with our wireless Internet; Internet expenses would already cover these costs.

Advertising expenses are based of the estimated ad rate for the San Diego Reader of $89.00 per inch of black and white ad. A five-inch ad would cost $445.00 (17).

Menus will be printed through Uprinting online and 150 flat menus will cost $62.79 (18). Maintenance and Repair cost was estimated to be $200.00 a month based on previous

business experience.

Operating Expenses Cost for One MonthInventory $9,403.50Supplies $1,990.27Utilities $2,209.99Rent $6,399.50Appliances $22,657.00Other Equipment $2,991.93Labor cost $7,926.00Advertising $445.00Menu Printing $62.79Maintenance and Repair $200.00 Total Operating Expenses for One Month $54,285.057.2 Total Investment Required

18

The owners of Groovy Beans have provided the company with sufficient start up capital. Each owner invested $43,000, totaling $301,000 contributed cash as the starting capital for the company’s start up expenses. Gross Profit from food sales totaled $12,946.80 for one month. See Appendix for calculations.

Revenue (sales) $18,298.80Cost of Goods Sold $6,681.00Net Sales $12,946.80

7.3 Financing PlanLooking at the total operating expenses for one month ($54,285.05), and subtracting the

total equipment expense ($25,648.93), since those expenses will most likely be one time start up expenses, yields the total operating expense on average for one month ($28,636.12). Therefore, operating costs for one year would be $343,633.44. The owners invested $301,000, so that yields an annual gross cost of $42,633.44. Since net sales for one month was $12,946.80, net sales for one year would be 155,361.60. This leaves the company with an annual gross profit of $112,728.16.

In long term, Groovy Bean’s plans to capitalize on the high demand for affordable, high quality coffee beverages and food products. Since the company is not borrowing money for start up expenses, there will be no interest cost. Contributed cash, gross profit, and reasonable operating expenses will provide with enough cash to finance the company and allow further growth. Keeping the inventory costs less than 40% of projected values will help the company remain profitable.

References:

19

1. http://www.wholelattelove.com/commercial.cfm?cid=1

2. http://www.webstaurantstore.com/viewcart.cfm

3. http://www.sandiego.gov/water/rates/

4. http://www.sdge.com

5. http://www.cox.com/residential/internet.cox?

sc_id=lfo_sem_goog_hsi_z_z&SRCHCAMPAIGN=Google+Corp+-+Brand+PST+-

+National+-

+Exact&SRCHKW=cox+internet&gclid=COm_hqbxgsICFU0oKgodB0UAjw&gclsrc=d

s

6. Kant AK, Graubard BI. Secular trends in patterns of self-reported food consumption of

adult Americans: NHANES 1971-1975 to NHANES 1999-2002. Am J Clin Nutr.

2006;84:1215-1223.

7. http://greensproduce.com/locally-grown-food.html

8. http://www.energystar.gov/about

9. Foodservice Organizations Text Book

10. http://cafemoto.com/fair-trade-and-cafe-moto/

11. http://greenpaperproducts.com/biodegradable-cups.aspx

12.  http://www.city-data.com/neighborhood/Pacific-Beach-San-Diego-CA.html

13. http://shop.safeway.com/ecom/home

14. http://www.costco.com/

15. http://www.adp.com/solutions/small-business/services/payroll-and-tax-services/payroll-

packages.aspx

16. http://www.restaurantdepot.com/

17. http://www.gaebler.com/San+Diego+Reader-CA-Newspaper-Advertising-Costs++10618

18. http://www.uprinting.com/menu-printing.html

19. http://www.astm.org/Standards/D6400.htm

20

APPENDICES:

I. Menu item pricing calculationsII. Sample floor plan

III. Recycling Startup ProgramIV. Sample MenuV. Food Cost Calculation

VI. Cost of goods sold for one monthVII. Total Revenue (Sales)

VIII. Net Sales

21

Appendix I: Menu Pricing Calculations

Plain Bagel: (Otis Spunkmeyer) $41.95 / 48 bagels =$0.87 each / 0.40 = $2.17 = 2.50 selling price per bagel -cream cheese: ($35.95/100packets = $0.36 each) *selling price for bagel WITH cream cheese = $2.99 -it is estimated we will sell about 60 bagels per day.

Green Matcha Tea: (Lipton) $25.25 / case of 6 (168 tea bags) = $0.15 each / 0.40 = $0.375 = $0.99 selling price

Oatmeal (Irish Steel Cut Oats) : $73.95 / case of 12 (24 ounces in each) = 288 ozserving size = .5 cups (4 ounces) = 72 servings$1.03 per serving / 0.40 = $3.00 selling price per ½ cup oatmeal (with 3 free toppings,

and each additional topping at $0.75)

Coffee: Cafe Moto - Organic Indo Noir $42.25/5 lb bag (5lbs = 80 oz)selling price: small - $1.85 / med: $2.15 / large: $2.35

Yogurt Cups: (Wallaby organic greek yogurt) $27.85 / 12 single serve cups$2.32 per serving / 0.40 = $5.80 = $4.99 selling price

22

Appendix II: sample floor plan

23

Appendix III: Recycling Program

24

Appendix IV: Sample Menu

25

Appendix V- Food Cost CalculationMenu Item Amount served per day X

(single serving cost)Food cost/ month

Plain Bagel 60 X ($0.87)=$52.20/day $1,566.00Cream Cheese 45 X ($0.36)=$16.20/day $486.00Oatmeal 20 X ($1.03)=$20.60/day $618.00Yogurt 20 X ($2.32)=$46.40/day $1,392.00Coffee 150 X ($0.74)=$111.00/day $3,330.00Green Match Tea 40 X ($0.15)=$6.00/day $180.00Total Food Cost $5,352.00/month

26

Appendix VI- Cost of goods sold for one month

Food Cost =$5,352.00 Cups/lids for coffee =$855.00 Cups/lids for tea= $228.00Cups/lids for oatmeal= $186.00

Total cost of goods sold = $5,352.00 + $855.00 + $228.00 + $186.00 = $ 6,681.00

27

Appendix VII- Total Revenue (Sales)

Menu Item Amount served per day X (Profit from food sales)

Total Revenue/ Month

Plain Bagel 60 X ($2.50)=$150.00/day $4,500.00Cream Cheese 45 X ($0.49)=$22.05/day $661.50Oatmeal 20 X ($3.00)=$20.60/day $618.00Yogurt 20 X ($3.99)=$79.80/day $2,394.00Coffee 150 X ($1.99)=$298.50/day $8,955.00Green Match Tea 40 X ($0.99)=$39.01/day $1,170.30Total Revenue for one month $18,298.80/month

28

Appendix VIII: Net Sales

Revenue- Cost of Goods Sold = Net Sales($18,298.80) – ($6,681.00) = $12,946.80

29