My Ssec Capstone Project 457200227965 MISY 4341

457200227965 MISY 4341

MISY 4341: Entrepreneurship
Section: 201
Business Plan
Dr. Margaret Annie VietsGroup Members:
Ayesha Almugahwi 200800180
Fatima Alibrahim 200800025
Hadeel Aleisa 200801009
Razan Alsanea 200801164
Roba Algothmi 200700131
Executive Summary
For entrepreneurs, writing a good business plan could return a lot of benefits and help to draw the future path of a business. Coffee industry is flourishing in Saudi Arabia and drive-thru business still young. This Business Plan (BP) aims to sell the idea of establishing drive-thru coffee shop in Khobar that called “Speedy Coffee”. We are predicting making money from selling coffee because it is a daily commodity and the number of coffee addicted is increasing. “Speedy Coffee” will provide its customers the best tasting coffee, tea, sandwiches, Croissant, salads, Brownies, Cheesecakes and Cakes, Muffins, Cookies and Arabic coffee provided with dates and Arabic desserts speedy by being in their way in addition to new service that we called it “Pick-it-Up” service. “Pick-it-Up” is an online service and mobile application that allows our customers to customize their order, specify time then pass by our window and pick their order in the exact time. After analyzing the coffee industry we built some valuable strategies to market our idea. There are number of challenges that could be faced through implementing our business idea but we could overcome them via the suggested strategies. As founder we are going to play a major role in administrating the business. The last section is the Projected Financials for our business. The company is expected to grow sales revenue by $558,034 in first year and $2,348,900 for the second year. As Speedy Coffee strive to maintain a SR1,423,500 gross profit margin at the first year. The balance sheet estimates a net worth of SR 1,679,937.5 for the 3ed year, cash balances of SR 1,566,180 and earnings of SR 668,096.250 as we accept to lose money in the first year.

In order to be able to transfer an idea into a good business opportunity, that idea should solve a problem, satisfy a need and improve the quality of life. A business idea means nothing without an implementation and the most critical step is writing a business plan. Coffee is a big business; our idea is starting up a new coffee drive-thru business named “Speedy Coffee”.
Establishing a drive-thru coffee shop is a good idea because coffee is a daily commodity. There are a lot of people who addicted to caffeine and they cannot wake up in the morning and start their day without having a cup of coffee. It is one of the breakfast drinks that numerous people love. Therefore, drive –thru coffee shop has a huge benefit for people and on the other hand predicting making money from selling coffee is reasonable.
As university students, we sometimes suffer the lack of time and sleep which leads us to go to the nearest café to our houses. Getting off the car, ordering and waiting on a queue consume time and consequently, students cannot attend their classes on time. Also, coffee is one of the most important traditions in Arabic cultures. It considers as a symbol of hospitality and generosity. Which indicate that the demand of coffee will be high throughout the whole year. That drives us to think of establishing “Speedy Coffee”.
Company description
“Speedy Coffee” is a drive-thru coffee shop that located in Khobar. We aim to provide customers the best tasting coffee, beverages, fresh baked pastries and dessert speedily by being on their way in addition to online ordering application that we called it “Pick-it-Up” to give them different experience. “Pick-it-Up” is an online service that allows customers to sign-in using a membership, making an order, specifying date and time, and the order will be ready at the exact arrival time. So they can just pass by and pick the order up from our drive-thru window. Also, we are going to provide “Pick-it-Up” as a mobile application to facilitate the ordering process. Initially, we will open “Speedy Coffee” in only one location then we will expand whenever we capture beneficial opportunity. “Speedy Coffee” is going to be as a time saver for all coffee lovers.
Vision and mission
To be in your way, save your time, and provide each cup with a little pleasant.
Our passion to provide an outstanding quality and service for our customers leads us to choose the best products for their enjoyment. We offer an excellent selection of coffee and tea with their various types, hot and cold beverages, fresh baked pastries, dessert, in addition to seasonal drinks all with suitable prices. Our Baristas are trained for up to two months before taking the responsibility of creating exceptional experience for you. We believe that giving the customers the opportunity to be involved and influential is going to support our development in future.
Product and service position
Speedy Coffee will provide its customers the best tasting coffee and beverages in this region. This is going to be accomplished by selecting high-quality ingredients and conforming the top preparation procedures precisely with exceptional concentration of detail. Whether the customers pass by the drive-thru window or order using “Pick-it-Up” application, they could customize their order and receive it as the exact specifications. The menu will be made of espresso-based coffee drinks such as lattes, mochas and cappuccinos, different types of tea, fresh backed pastries, sandwiches, Croissant, salads, Brownies, Cheesecakes and Cakes, Muffins and Cookies. Also Arabic coffee will be made of the best coffee beans and provided with dates and Arabic desserts.
Besides coffees, Speedy Coffee will offer another items such as coffee beans, syrup in different flavors, coffee mugs, caps, T-shirts and sweatshirts, balls and more
What will make Speedy Coffee stand out from other coffee drive-thru businesses are:
Providing products with convenient way at both methods the drive-thru window and “Pick-it-Up” application. Customers will not need to look for parking place or waiting in a long queue.
“Pick-it-Up” application will differentiate Speedy Coffee and give the customers different experience.
Valuing customers’ involvement and letting them participate in business development. Considering them as an important factor of our succeed and making them play an important role will increase their loyalty.
An effective use of social media with its different types to be close to customers and connect with them continually. That helps to know their expectations, evaluation, and comments.
providing a significant benefit to the community by the participation on charity activities.
The milestone table and chart represent the significant dates for accomplishing several tasks through specific period. That facilitates the management of future activities and show the budget needed in each period.
Task Start year End year Duration Budget
Opening a drive-thru and lunching the application 2013 2014 1 year SAR 150,000
Opening drive-thru 2,3 and 5 2014 2015 1 year SAR 450,000
Install point-of-sale system 2014 2015 1 year SAR 20,000
Expand into the Middle region 2016 2018 2 year SAR 400,000
Table 1: Milestones table

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Figure 1: Milestones chart

Industry Analysis:
Industry Size and Growth Rate:
Coffee industry as whole is a crowded industry in Saudi Arabia, especially in Khobar. We have plenty of cafés in Malls, Pepsi Street, Cornice and almost everywhere. The drive-thru industry is a new growing industry in the Eastern Province especially in Khobar.”The coffee market In Saudi Arabia increased at a compound annual growth rate of 3.4% between the years 2004-2009″ (Research and Marketing, P.8). Coffee industry is one of the existing industries since a long time, but what makes our café different in this industry is that our café is a drive-thru café which is considered to be a new concept in the region. According to Ed Advirson, a consultant at the US-based Bellissimo Coffee Info Group, the coffee culture is growing rapidly around the world especially in Saudi Arabia as it suits the traditional coffee houses in a modern way with more options (Milletto. N, 2008). Even though many drive-cafés exist, the industry is still considered new and we still need more of it in the region. So, the industry is considered young and in an early life cycle.

Industry Structure
Coffee shops industry is a fragmented structured, it accepts new entrants and allow the current competitors to easily improve and change their development strategies. There are many cafés in Khobar, some have distinguished themselves among others who are typically the same. Euro monitor International says that “Overall cafés/bars remained heavily fragmented at the end of the review period due to the strong presence of independent cafés; with chains being present only in specialist coffee shops (Café and Bars in Saudi, 2012).The coffee shop industry is an innovative industry that accepts new ideas. Drive-thru coffee shop industry is narrower, but it still receptive to new entrants and innovative where the current competitors can respond quickly to the changes in the new trends. Coffee shops that do not have a drive-thru service and have already built their names among customers can start spreading drive-thru kiosks in dynamic locations so they can reach their customers. To make Speedy Café different, we have identified key factors to success in the next section.
Key Success factors
We are seeking to be distinguished by our service, quality, promotions, social networking and serving community and dynamic location. By employing those factors we can proudly position Speedy Café among competitors. According to Dr. Kmanthi Thompson, the entrepreneur center manager in PMU, “coffee industry is considered to be a crowded industry in Saudi” (Thompson. K, 2012), and he also said that getting involved in an existed business would not succeed especially with coffee shops because of the competition with the large companies unless the person comes up with new idea that makes his/her business different (Thompson. K, 2012). We thought of making our speedy café different than others, and we came up with two main services. The first service is that it is a drive-thru coffee shop in an attractive crowded location, second is that we provided a pick it up service to reach our customers for saving time and avoiding crowd.
In addition, involving our customers in our decision and providing them with offers and promotions is considered a key factor that leads to success. This is will be explained in details in the marketing strategy.
Industry Trends
To reach and maintain the intended position of our business, we need to keep on track with the trends that influence the industry. We can employ these trends to the benefit of the company.
Currently, people are more attracted to places that follow the technological trends such as applications in their phones and social networking channels. In addition, customers always tend to be loyal to the stores that care about them, value them and consider their suggestions and complains.

People now are living in so quick world; they would appreciate being served quickly. This is considered a trend that we are using for our benefit. We are providing them with a speed service and also a prior arriving ordering service which is “Pick-it-up” service.
Being involved in social community events, occasions and raising awareness among the community is a trend that should be considered as an important trend. It will help in two ways, building our name with caring about the society and cultural occasions, it will also in marketing our café.
Market Analysis:
Market Segmentation
We identified our market segment based on two main categories; demographics and geographic. Demographically, our speedy café is targeting customers who are vary from the age of 12 and above from both genders who have middle to high income. Geographically, our café as it is a drive-thru café that is located in a dynamic location that is in the intersection with king Fahad Road and Prince Fisal bin Fahad Road that is on the way of many companies that are located inside the KFUPM’s fence, KFUPM university and UOD university, this road also comes in the way of many of PMU students who come from Dhahran and Khobar, and it is also of the way to Dhahran Mall and Amwaj mall. So, this location is attracting many of the community’s segments such as shoppers, workers, students and anyone who is passing by this road and has no time to waste for getting a cup of coffee.
Target Market and buyer behavior:
Speedy Café is a drive-thru café that welcomes everyone with its products quality, quick service and attractive location. Speedy Café serves Coffee as main products and tea, donuts, croissants, fresh juices and cookies as additional options, so, it is targeting anyone who is hungry on this crowded location to get his quick snack and drink quickly, we are also targeting coffee lovers and addicts who need coffee in the morning busy time and the whole day crowd with our pick-it-up service. Also customers as students and workers can get their breakfast faster than any other café to save their morning busy time.
Competitor Analysis
For our competitor analysis, we chose Starbucks Café because it is the leading player in the coffee market in Saudi Arabia according to the Market and Research website (Coffee Market in Saudi Arabia to 2014,2012). We chose Coffee Road as it is a well-known café specializes in Drive-thru café on between cities roads.

The following table shows the differences and similarities between us and our candidate competitors.
Factors Speedy Café Coffee Road Starbucks
Located inside the city * *
Located in a dynamic road * Some branches *
Drive-Thru Service * * some branches
Prior arriving ordering service * Involving in Social awareness and events * *
Interacting with customers through social networking channels * *
Providing discounts and promotions * Employing college students * *
Low prices level * * Marketing Plan:
Overall Marketing Strategy:
To stand strong, and position our café in the market among competitors, our marketing strategy is to value our customer’s taste and opinions, get them involved in our improvements and provide them with offers and promotions that show our care and this is what will make us different than our competitors. This will be explained in details in Products, Services and Prices, Promotion and Distribution sections.
Prior the opening of Speedy Café, we will be present in social networking media to advertise for our café and keep people excited about the new café that will open on this crowded road.
We will provide part-time jobs to college students so they can work in their free time; this will help them as new generation to learn to be responsible and get their own income, and it will also help on marketing our Speedy Café among college students which are considered one of our targeted customers.

Speedy Café will participate on its way on the social events and champions such as Eids, Hajj, New Year, Ramadan, back to school week, breast cancer day, autism day and other events. ” it is important for a business to be socially responsible for many reasons because it is an easy way for a company to build its brand, reputation and public profile, and customers are more attracted to social responsible companies” (Taylor.D,2005) . Speedy café will participate through social networking channels, spreading cards or brochures depending on the occasion to the customers.
Products, Service, and prices:
Customer satisfaction is what we seek to gain, by turning our promises to reality customers will be satisfied. We promised to provide quick service with excellent quality products.
Our Pick-It-Up service is also a service that will show our customer that we value their time. Customers can have a membership and order via an application that could be installed on their phones prior they arrive to the café so they just come and pick up their orders without wasting their time with waiting.
In addition, we focused on providing our customers with a menu of various options. These options will lead us to be a daily habit to our customers so they can find what they want and never get bored of the limited of options. In addition, we planned to involve our customers to choose and suggest for new products and flavors, this is mentioned in details under the promotion section.
For the prices, Speedy Café attracts middle class people including students, so we wanted to set prices that are affordable as daily payments for all of the customers under our market segment to keep them loyal to our café and to be their daily habit. Our pricing strategy is not to set prices that exceed the targeted customers’ power to buy daily from our café. Our prices will vary from 3-20 SAR.
Our products and prices are shown in the menu below:
Hot Drinks S M L
Cappuccino 10 12 14
Coffee Mocha 12 14 16
Caramel Latte 12 14 16
Latte 12 14 16
French Coffee 10 12 14
Espresso 10 – –
Arabic Coffee 10 12 14
Black Tea 7 9 11
Tea with Milk 10 12 14
Tea with Mint 10 12 14
Milk with Ginger 12 14 16
Ginger with Mint 12 14 16
Mint Tea 8 10 12
Iced Drinks Iced Mocha 14 16 18
Iced Latte 14 16 18
Iced Tea 12 14 16
Iced Caramel 14 16 18
Cold Drinks Soft Drinks (Coke, Pepsi, Seven Up, Orange and Strawberry Miranda) 3 5 7
Water Bottle 3 4 5
Orange Juice 12 14 16
Strawberry Juice 12 14 16
Cocktail 14 16 18
Apple Juice 12 14 16
Mango Juice 12 14 16
Speedy Mixture 15 17 19
Sandwiches and Snacks Croissant (butter, Cheese, Za’atar, Labna, Chocolate) 7 – –
Turky Sandwich 10 12 14
Tuna Sandwich 10 12 14
Speedy Special Chicken Sandwich 14 16 18
Cookies and Snacks White Cookies 3 4 –
Chocolate Cookies 3 4 –
Red Velvet Cup cake 4 5 –
Carrot Cupcake 3 5 –
Chocolate Cupcake 3 5 –
Coffee Cupcake 3 5 –
*A snapshot and a copy of the menu will be attached under Appendix.
Valuing and respecting our customer is our main promotion. We are providing our customers with memberships through an application that could be installed in their phones. This application helps our customers to order prior arriving to the café for a faster service, in the other hand; it helps us to provide promotions and gifts to our loyal customers. Through this application we can send messages about our new drinks and snacks, our new offers and promotions. This application also will help us to identify our customers’ favorite order so we offer him/her one free order annually based on their membership date, we also can know their birth dates so we provide them a free breakfast with a birthday card with nice words. A snapshot of the application’s interface is attached under Appendix.
Being present in the social networking channels is currently important build a name and attracts customers. Twitter, Instagram and Keeks, these are the main social media that people are obsessed with these days; our plan is to be involved with them, interact with them and provide them with offers and promotions. According to Aleqtisadia online newspaper, “A report from the control and creation program in the collage of Dubai for government control that is named the report of the Arab social network, this report revealed that Saudi Arabia is on the top of the number of active twitter and Facebook users in the Middle East” (Users of Twitter in Saudi Arabia, 2012). We will use twitter for updating our customers with our new offers and promotions, we will interact with our customer by throwing a weekly competition for drawing, photo shooting or questioning about Speedy Café , and then offer the winners with a free drink or a discount. In addition, we will use it to answer our customers’ questions and receive their suggestions. Instagram as it is known for photos posting, we will post photos of our Café, Drinks, Snacks, and other products, we will also post photos of our employee of the week, the weather and such things that keep us in touch with our customers. Through Keeks , a 35-seconds video posting application, we are planning to post videos of our customers opinions, for our employees while working to show our customer how clean the environment is, we will also use it to announce a winner or a new offer.
Furthermore, to follow our customers’ tastes, every two weeks we will add a new drink, sandwich or snack to our menu. This additional offer will be named after a customer suggestion and posted on Speedy Café window. For example, we ask customers about their suggestions, and then we choose one for the current month. When a customer suggest ,for example, a new pizza sandwich that we don’t have in our menu, we will work on creating this sandwich with good taste and quality, print a poster with a photo of it and name it with a name chosen by that customer or even his real name for two weeks.
The location of our Speedy Café is so dynamic; it is on the way of many companies that are located inside the KFUPM’s fence, KFUPM University and UOD University, this road also comes on the way to many of PMU students who come from Dhahran and Khobar, and it is also of the way to Dhahran Mall and Amwaj mall. Thus, customers will be passing by the café on their way to get their matters done.
Product or Service Design and Development Plan
Our marketing strategies that we mentioned in this paper will work on supporting our development plan for future. We are planning to add some features to the business, maintain, and improve other things to keep up with everything new in the market.
The most important thing in our plan is to maintain the high quality that the customer used to receive. That means working on meeting the high standards all the time. Providing good products and services continually will guarantee increasing customer satisfaction, business reputation, employees’ productivity and profits at the same time that will reduce the number of complaints and competitive risk.
As we mentioned in the milestone, we are planning to expand in three more locations by the beginning of 2014. By 2016 we plan to open drive-thru café in the Middle Region. Maintain the same level of products and services provided through the expansion process is significant. Also choosing vital locations in this process is crucial and we plan to open in malls and inside universities or companies.
Also, we are projecting to provide prepaid cards. That could bring a lot of benefits for our business because it is going to offer immediate cash on hand for our customers which going to facilitate the payment process.
See the appendix for our logo, location and materials design.
Challenges and risks:
Maintaining the high quality: since most of our drinks will be based on “shot” from the machines, drinks should prepaid carefully. A minor variation on the amount of coffee, milk, or heat is going to affect the quality of drinks.
Big national coffee shops such as Starbucks and Second Cup: they actually start opening drive-thru windows in their braches.
Finding good location: because we are looking for vital locations, that process could be hard from the term cost and space.

Management Team
The Speedy Coffee management team consists of the CEO, the CFO, and six directors:
Mr. Abdul-Aziz Ahmed, Chief Executive Officer
The founders of speedy coffee had selected Mr. Abdul-Aziz Ahmed for CEO he has been working in coffee shops management and he made researched in specialty drinks and drive-thru service in coffee and foods industry for over ten years. His expertise is in the research and leadership within 10 years. He worked before in managing Best Coffee corporation but he decide to move to Al-khobar and he left his job in Jordan. Mr. Abdul-Aziz is the person who will get the speedy Coffee growth effectively and gain profit for our business future.
Ms. Hadeel Aleisa, Business administrator
Ms. Hadeel Aleisa has been chosen to perform the position of office manager and she will be take the responsibility for visiting and evaluating each place and make daily report directly to the chief operating officer. Hadeel has been the business administrator of Darby Coffee, Inc. for the past five years. Over those five years, Hadeel has written many firm policies and managed the financial reporting and reconciliation. Speedy Coffee considers Hadeel to be one of the greatest founders team and she will start working with them from January 2013. Until that time, she will be working with Mr. Abdul-Aziz on a part-time basis to help establish the corporate performance and policies.

Miss. Sara Ibrahim, Finance and marketing
She has a high experience and expertise in cash flow management for 15 years. She will take the position of finance department and she will work part time as events coordinator and advertising. She has a wonderful history and great experience in sales and financial management, particularly in the beverage industry. As she worked in leading beverage in Saudi Arabia, through this time as her management in sales, she has assisted increase market share from 35 to 45%. Moreover, she has many contacts in beverage industry awareness of the market. Recently she manages five sales representatives but she decides to move to work with her team in Speedy Coffee and shares her experience with them.

Mr. Mohammed Nassir, Human Resource
Mr. Mohammed Nassir is a Human Resource Specialist, he has an innovation and leadership skills, he is responsible of payroll and benefits. Mr. Mohammed has built his knowledge by working as a specialist in different functions of Human Resources such as recruiting, policies, training, organizational development, workforce planning and employee relations. Now he is responsible to pick employees and train because he holds a Human Resource bachelor degree from King Saud University.
Miss. Ayeshah Almugahwi, Technology Director
She serves as the Technology Director for Speedy Coffee. he has an experience in computer and telecommunication field for more than 5 years. During this time, she has held a different management positions working as an information systems manager, a consultant, and as a teacher/trainer. She did her undergraduate study at Prince Mohammed Bin Fahd University. She brings her depth of knowledge, technological skills and management abilities to her current position, Ayeshah and her coworker Razan Al-Sanea are responsible for upgrading our website, mobile application, and everything related to pick-it-up services. Also, she has strong professional skills and social networks through the internet and other media such as Twitter, Facebook, etc.
Miss. Razan Al Sanea, Network Communication
Miss. Razan has had a long career in IT at Le Cafe, with extensive experience in leading and managing services to support researchers at Le Cafe, after 7 years of experience she will help our research department to be developing. Miss. Razan’s major strengths and skills that includes active group working, great social relations, organization person, wide computer knowledge including desktop publishing and graphic layout. Miss. Razan will use her experience in conjunction with her partner Ayeshah to establish a perfect system and applications.
Miss. Fatima Alibrahim, Research and development Director
A graduate from King Faisal University in Research and development, Miss. Fatima Alibrahim rapidly recognized that she wants to apply her knowledge as well as leadership and managerial skills as an administrator in a creating and innovating new attractive strategies. She worked for 4 years in scientific research, as well as a procurement manager in the Al-Riyadh region. She decides to move for workings with her friends to establish a profitable business by join them as one of the business partners.

Miss. Roba Algathmi, Operations Research
She is one of the founders she works with them as a part time until she finishes her contract with Al-slam School. She publishes monthly journal articles in Al-hyat Newspaper. Because she is connoisseur of coffee field, from 1/1/2013 she will let everything out of her mind and she will start working with Speedy Coffee as full time. Miss. Roba responsible of Research about coffee testing and analysis from sources to cup. Testing on coffees depends on physical and sensorial experiments, research and development services. Roba and her director Miss. Fatima will be accountable for research and development and they will think and innovate of attractive ideas.
Organizational Structure
The speedy coffee will be owned and operated by its founders Sara Ibrahim, Hadeel Aleisa, Ayeshah Almugahwi, Razan Al Sanea, Fatima Alibrahim and Roba Algathmi, they will be partners in a 15% shareholding structure. They have an experience that covers many of the efficient aspects of the company. Our management team is involved of employees that they feature many years of experience in the long-term coffee making industries. Our philosophy is to go above consumer expectation by offering a warm coffee, friendly environment, consistent quality coffee with quick costumers’ service. Speedy Coffee is run by our well-trained employees who could make a good quality cup of coffee quickly within three minutes.
The chief operating officer, Mr. Abdul-Aziz Ahmed has extensive relevant on coffee industry experience. He will be responsible on a daily basis operations management of the shop. We have a Chief Financial Officer and she reporting to CEO. Hadeel Aleisa will be responsible for the routing, distribution management and be evaluating and make daily report directly to the chief operating officer. Ms. Sara Ibrahim she will be accountable for customer service, finance and marketing. Ms. Sara Ibrahim can handle day-to-day needs that anyone may have. Even when Sara is out of the shop Hadeel will be on contact with her via phone or emails. Our serving staff will be from the young local generation as they work as a part time .Speedy Coffee goal is to offer good cafe-quality, food and drinks without get out of the car, which is wonderful on those hot days or cold mornings.
-819150-742950Operations Plan:
In this section, we are going to discuss the general approach to operations in terms of what’s most important and what the make-or-break issues are. This can be done using the “back stage” or behind the scenes activities, and “front stage” or what the customer sees and experiences. For our ” Speedy Coffee Project”, the back stage and the front stage issues are as follows:
Back stage:
Staff selection
Relationship with suppliers
Relationship with city government
Employee orientation and training
Staff selection is very important. The success of any business greatly depends on how well you choose your staff. Once you succeed in choosing well qualified, clever staff, you ensure your success. Also, we are going to build good relationships with suppliers. We intend to use the best kinds of coffee seeds. While doing this, a team of us will be responsible for finishing all the arrangements needed from the city government, like getting the license to start our business. Moreover, employees must be trained at how to make, introduce the service in a friendly way.

Front stage:
Operating hours
Staff assistance
Coffee machines
Coffee shop design
We intend to operate our business twenty-four hours a day. Staff assistance will be from Pilipino or Indian. As for the machines, we’ll import them from Japan. Also, we’ll make a contract with famous designers to make the shops very attractive. as for the location of our project, we intend to have our braches in Al-Khobar, on the way to universities and companies so that they’ll be available to university students and the employees going to their work. In this way, we can guarantee too many customers.

Concerning facilities and equipment, we’ll purchase all the equipment needed for the project from Japan, though they’ll be a little expensive. We’ll pay much care for cleaning.
Financial Projections:
Sources and Uses of Funds Statement
Capital Investments Amount
Property SR 70,000
Furniture and fixtures SR 40,000
Computer equipment SR 73,000
Other equipment SR 30,000

Operating Expenses Amount
Legal, accounting, and professional services SR 13,125
Advertising and promotions SR 13,425
Deposits for utilities SR33, 750
Licenses and permits SR 13000
Prepaid insurance SR 9000
Lease payments SR 181, 500
Salary and wages SR 243,750
Signs SR 15000
Tools and supplies SR 29,250
Starting inventory SR 79,406.25
Cash (working capital) SR 732,593
Other expense 1 SR 135,000
Total Startup Cash Needed = SR 1,711,780

Funding for Speedy Coffee derives from two main sources. This includes owners’ investments and bank loans. The major owners bring the total investments to SR 1,000,000. The remaining SR711, 780 needed to cover the start-up expenses and assets came from a one-year bank loan in the amount of SR711,780 .
Assumption Sheet
Year 1 Year 2 Year 3
Current Interest Rate 10% 10% 10%
Long Term Interest Rate 10% 10% 10%
Pro Forma Income Statement
Pro Forma Income statement
Year 1 Year 2 Year 3
Sales SR 2,190,000 SR 2,409,000 SR 2,649,900
Cost of Goods Sold SR 766,500 SR 843,150 SR 927,465
Gross Profit SR1, 423,500 SR 1,565,850 SR1, 722,435
Expenses Payroll SR 243, 750 SR 243, 750 SR 243, 750
Sales and marketing and other expenses SR 13,425 SR 13,425 SR 13,425
Depreciation SR 20,250 SR 20,625 SR 20,625
Rent SR181, 500 SR 198,000 SR 198,000
Maintenance SR 219,000 SR 24,090 SR 26,498
Utilities SR33, 750 SR35, 625 SR 37,500
Others SR 135,000 SR 135,000 SR 135,000
Total Operating Expenses SR 846,675 SR 670,515 SR674, 798
EBIT SR 576,825 SR 895,335 SR 1,046,640
Interest Expense SR 10,578 SR 8,723 SR 6,068
Taxes Incurred (2.5%) SR 14,156.1750 SR 22,165.3 SR 26,014.3
Net Profit SR 552,090.8250 SR 864,446.70 SR 1,014,557.700
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets Current Assets Cash SR732, 593 SR1, 111,343 SR1, 566,180
Inventory SR 79,406.25 SR 87,348.75 SR 96, 083
Total Current Assets SR 811,999.25 SR 1,023,994.250 SR 1,662,263
Long-term Assets Long-term Assets SR 221,887.50 SR 229,387.5 SR 236,887.5
Accumulated Depreciation SR 20,250 SR 40,875 SR 61,500
Total Long-term Assets SR 201,638 SR 188,513 SR 175,378
Total Assets SR 1,013,633 SR1, 387,200 SR 1,837,650
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities Accounts Payable SR 119,903 SR 119,801.25 SR 130,635
Current Borrowing SR 25,125 $12,750 SR 375
Subtotal Current Liabilities SR 145,028 SR 132,551.250 SR 131,010
Long-term Liabilities SR 75,000 SR 61,556.250 SR26, 703
Total Liabilities SR 220,028 SR 194,107.5 SR 157,712.5
Paid-in Capital SR 525,000 SR 525,000 SR 525,000
Retained Earnings (SR 103,800) SR 268,605 SR 668,096.250
Earnings SR 372,405 SR 399,487.5 SR 466,841.25
Total Capital SR 793,605 SR 1,193,092.5 SR 1,679,937.5
Total Liabilities and Capital SR 1,013,633 SR 1,387,200 SR 1,837,650
Net Worth SR 793,605 SR 1,193,092.5 SR 1,679,937.5
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received Cash from Operations Cash Sales SR 2,190,000 SR 2,409,000 SR 2,649,900
Subtotal Cash from Operations SR 2,190,000 SR2, 409,000 SR 2,649,900
Subtotal Cash Received SR 2,190,000 SR2, 409,000 SR 2,649,900
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations Cash Spending SR 467,250 SR 539,250 SR 581,790
Bill Payments SR 1,229,493.750 SR 1,457,681.250 SR 1,578,543.750
Subtotal Spent on Operations SR 1,696,743.750 SR 1,996,931.250 SR 2,160,333.750
Additional Cash Spent Principal Repayment of Current Borrowing SR 12,375 SR 12,375 SR 12,375
Long-term Liabilities Principal Repayment SR 0 SR 13,458.750 SR 14,853.750
Purchase Long-term Assets SR 0 SR 7,500 SR 7,500
Dividends SR 0 SR 0 SR 0
Subtotal Cash Spent SR 1,709,118.750 SR 2,030,250 SR 2,195,062.5
Net Cash Flow SR 480,881.25 SR 378,750 SR454, 837.5
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 10.00% 10.00% 7.60%
Percent of Total Assets Inventory 7.83% 6.30% 5.23% 3.60%
Other Current Assets 0.00% 0.00% 0.00% 35.60%
Total Current Assets 80.11% 86.41% 90.46% 43.70%
Long-term Assets 19.89% 13.59% 9.54% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 14.31% 9.56% 7.13% 32.70%
Long-term Liabilities 7.40% 4.44% 2.54% 28.50%
Total Liabilities 21.71% 13.99% 9.67% 61.20%
Net Worth 78.29% 86.01% 90.33% 38.80%
Percent of Sales Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 65.00% 65.00% 65.00% 60.50%
Selling, General & Administrative Expenses 47.94% 48.47% 47.37% 39.80%
Advertising Expenses 2.26% 2.18% 2.26% 3.20%
Profit Before Interest and Taxes 23.27% 22.47% 23.85% 0.70%
Main Ratios Current 5.60 9.04 12.69 0.98
Quick 5.05 8.38 11.95 0.65
Total Debt to Total Assets 21.71% 13.99% 9.67% 61.20%
Pre-tax Return on Net Worth 62.87% 44.64% 37.71% 1.70%
Pre-tax Return on Assets 49.22% 38.40% 34.06% 4.30%
Additional Ratios Year 1 Year 2 Year 3 Net Profit Margin 17.00% 16.58% 17.62% n.aReturn on Equity 46.93% 33.48% 28.12% n.aActivity Ratios Inventory Turnover 10.91 10.11 10.11 n.aAccounts Payable Turnover 11.25 12.17 12.17 n.aPayment Days 27 30 29 n.aTotal Asset Turnover 2.16 1.74 1.44 n.aDebt Ratios Debt to Net Worth 0.28 0.16 0.11 n.aCurrent Liab. to Liab. 0.66 0.68 0.74 n.aLiquidity Ratios Net Working Capital $177,858 $284,304 $408,334 n.aInterest Coverage 48.16 62.07 104.13 n.aAdditional Ratios Assets to Sales 0.46 0.58 0.69 n.aCurrent Debt/Total Assets 14% 10% 7% n.aAcid Test 5.05 8.38 11.95 n.aSales/Net Worth 2.76 2.02 1.60 n.aDividend Payout 0.00 0.00 0.00 n.aReferences:
Aleqtisadiya (2012), Users of twitter in Saudi, Retrieved Dec,2012 from
Euromonitor International, Café/Bars in Saudi Arabia (oct,2012) retrieved Nov,2012 from
Coffee Market in Saudi Arabia, Research and Marketing (2012), retrieved 20,Dec,2012 from
The American barista coffee school, coffee business in Saudi Arabia, retrieved Dec,2012 from, k. (2012), Marketing and Researching Workshop, Nov-2012.

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