Executive Summary

Java Culture coffee bar is determined to become a daily necessity for local coffee addicts, a place to dream of as you
try to escape the daily stresses of life and just a comfortable place to meet your friends or to read a book, all in one.
With the growing demand for high-quality gourmet coffee and great service, Java Culture will capitalize on its
proximity to the University of Oregon campus to build a core group of repeat customers. Java Culture will offer its
customers the best prepared coffee in the area that will be complimented with pastries, as well as free books that its
patrons can read to enjoy their visit.

The company will operate a 2,300 square foot coffee bar within a walking distance from the University of Oregon
campus. The owners have secured this location through a three-year lease with an option for extending. The have
also provided $140,000 of the required $170,000 start-up funds. The remaining capital will be obtained through Bank
of America commercial loans.

The company is expected to grow sales revenue from $584,000 in FY2001 to $706,000 in year three. As Java
Culture will strive to maintain a 65% gross profit margin and reasonable operating expenses, it will see net profits
grow from $100,000 to $125,000 during the same period.

1.1 Objectives
Java Culture's objectives for the first year of operations are:

 Become selected as the "Best New Coffee Bar in the area" by the local restaurant guide.
 Turn in profits from the first month of operations.
 Maintain a 65% gross margin.
1.2 Keys to Success
The keys to success will be:

 Store design that will be both visually attractive to customers, and designed for fast and efficient operations.
 Employee training to insure the best coffee preparation techniques.
 Marketing strategies aimed to build a solid base of loyal customers, as well as maximizing the sales of high
margin products, such as espresso drinks.
1.3 Mission
Java Culture will make its best effort to create a unique place where customers can socialize with each other in a
comfortable and relaxing environment while enjoying the best brewed coffee or espresso and pastries in town. We
will be in the business of helping our customers to relieve their daily stresses by providing piece of mind through great
ambience, convenient location, friendly customer service, and products of consistently high quality. Java Culture will
invest its profits to increase the employee satisfaction while providing stable return to its shareholders.

Company Summary
Java Culture, an Oregon limited liability company, sells coffee, other beverages and snacks in its 2,300 square feet
premium coffee bar located near the University of Oregon campus.  Java Culture's major investors are Arthur Garfield
and James Polk who cumulatively own over 70% of the company. The start-up loss of the company is assumed in the
amount of $27,680.

2.1 Company Ownership

Java Culture is registered as a Limited Liability Corporation in the state of Oregon. Arthur Garfield owns 51% of the
company. His cousin, James Polk, as well as Megan Flanigan and Todd Barkley hold minority stakes in Java Culture,
LLC.

2.2 Start-up Summary

The start-up expenses include:

 Legal expenses for obtaining licenses and permits as well as the accounting services totaling $1,300.
 Marketing promotion expenses for the grand opening of Java Culture in the amount of $3,500 and as well as
flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
 Consultants fees of $3,000 paid to ABC Espresso Services <name changed> for the help with setting up the
coffee bar.
 Insurance (general liability, workers' compensation and property casualty) coverage at a total premium of
$2,400.
 Pre-paid rent expenses for one month at $1.76 per square feet in the total amount of $4,400.
 Premises remodeling in the amount of $10,000.
 Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).

The required start-up assets of $142,320 include:

 Operating capital in the total amount of $67,123, which includes employees and owner's salaries of $23,900
for the first two months and cash reserves for the first three months of operation (approximately $14,400 per
month).
 Start-up inventory of $16,027, which includes:
o Coffee beans (12 regular brands and five decaffeinated brands) - $6,000
o Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. - $7,900
o Retail supplies (napkins, coffee bags, cleaning, etc.) - $1,840
o Office supplies - $287
 Equipment for the total amount of $59,170:
o Espresso machine - $6,000
o Coffee maker - $900
o Coffee grinder - $200
o Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.) - $18,000
o Storage hardware (bins, utensil rack, shelves, food case) - $3,720
o Counter area equipment (counter top, sink, ice machine, etc.) - $9,500
o Serving area equipment (plates, glasses, flatware) - $3,000
o Store equipment (cash register, security, ventilation, signage) - $13,750
o Office equipment (PC, fax/printer, phone, furniture, file cabinets) - $3,600
o Other miscellaneous expenses - $500
Funding for the company comes from two major sources--owners' investments and bank loans. Two major owners,
Arthur Garfield and James Polk, have contributed $70,000 and $30,00 respectively. All other investors have
contributed $40,000, which brings the total investments to $140,000. The remaining $30,000 needed to cover the
start-up expenses and assets came from the two bank loans--a one-year loan in the amount of $10,000 and a long-
term (five years) loan of $20,000. Both loans were secured through the Bank of America. Thus, total start-up loss is
assumed in the amount of $27,680.

The following chart and table summarize the start-up assumptions.

Start-up
Requirements
Start-up Expenses
Legal $1,300
Stationery etc. $500
Brochures $3,580
Consultants $3,000
Insurance $2,400
Rent $4,400
Remodeling $10,000
Other $2,500
Total Start-up Expenses $27,680
Start-up Assets
Cash Required $67,123
Start-up Inventory $16,027
Other Current Assets $0
Long-term Assets $59,170
Total Assets $142,320
Total Requirements $170,000

Start-up Funding
Start-up Expenses to Fund $27,680
Start-up Assets to Fund $142,320
Total Funding Required $170,000
Assets
Non-cash Assets from Start-up $75,197
Cash Requirements from Start-up $67,123
Additional Cash Raised $0
Cash Balance on Starting Date $67,123
Total Assets $142,320
Liabilities and Capital
Liabilities
Current Borrowing $10,000
Long-term Liabilities $20,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $30,000
Capital
Planned Investment
Arthur Garfield $70,000
James Polk $30,000
All other investors $40,000
Additional Investment Requirement $0
Total Planned Investment $140,000
Loss at Start-up (Start-up Expenses) ($27,680)
Total Capital $112,320
Total Capital and Liabilities $142,320
Total Funding $170,000
2.3 Company Locations and Facilities
Java Culture coffee bar will be located on the ground floor of the commercial building at the corner of West 13th
Avenue and Patterson Street in Eugene, OR. The company has secured a one-year lease of the vacant 2,500 square
feet premises previously occupied by a hair salon. The lease contract has an option of renewal for three years at a
fixed rate that Java Culture will execute depending on the financial strength of its business.

The floor plan will include a 200 square feet back office and a 2,300 square feet coffee bar, which will include a
seating area with 15 tables, a kitchen, storage area and two bathrooms. The space in the coffee bar will be
approximately distributed the following way--1,260 square feet (i.e., 55% of the total) for the seating area, 600 square
feet (26%) for the production area, and the remaining 440 square feet (19%) for the customer service area.

This property is located in a commercial area within a walking distance from the University of Oregon campus on the
corner of a major thoroughfare connecting affluent South Eugene neighborhood with the busy downtown commercial
area. The commercially zoned premises have the necessary water and electricity hookups and will require only minor
remodeling to accommodate the espresso bar, kitchen and storage area. The coffee bar's open and clean interior
design with modern wooden decor will convey the quality of the served beverages and snacks, and will be in-line with
the establishment's positioning as an eclectic place where people can relax and enjoy their cup of coffee. The clear
window displays, through which passerby will be able to see customers enjoying their beverages, and outside electric
signs will be aimed to grab the attention of the customer traffic.

Products
Java Culture will offer its customers the best tasting coffee beverages in the area. This will be achieved by using
high-quality ingredients and strictly following preparation guidelines. The store layout, menu listings and marketing
activities will be focused on maximizing the sales of higher margin espresso drinks. Along with the espresso drinks,
brewed coffee and teas, as well as some refreshment beverages, will be sold in the coffee bar. Java Culture will also
offer its clients pastries, small salads and sandwiches. For the gourmet clientele that prefers to prepare its coffee at
home, Java Culture will also be selling coffee beans.

The menu offerings will be supplemented by free books and magazines that customers can read inside the coffee
bar.

3.1 Product Description

The menu of the Java Culture coffee bar will be built around espresso-based coffee drinks such as lattes, mochas,
cappuccinos, etc. Each of the espresso-based drinks will be offered with whole, skimmed, or soy milk. Each of these
coffee beverages is based on a 'shot' of espresso, which is prepared in the espresso machine by forcing heated
water through ground coffee at high pressure. Such espresso shots are combined with steamed milk and/or other
additives like cocoa, caramel, etc., to prepare the espresso-based beverages. Proper preparation techniques are of
paramount importance for such drinks. A minor deviation from the amount of coffee in the shot, the size of the coffee
particles, the temperature of milk, etc., can negatively affect the quality of the prepared drink.
3.2 Sales Literature
Two thousand flyers will be distributed in the adjacent neighborhood, on the University campus, at the malls and in
the selected office buildings within two weeks prior to the opening of Java Culture. Subsequently, free postcards with
Java Culture endorsement will be printed to increase the company visibility among the patrons.