MV3D BUSINESS PLAN
MV3D Café Business Plan
Dustin Maki
Dustin.Maki@usask.ca
Contents
Executive Summary.......................................................................................................................... i
Introduction .................................................................................................................................... 1
Operations Plan............................................................................................................................... 1
Organizational Structure ............................................................................................................. 1
Site and Floor Plan....................................................................................................................... 1
Quality Control ............................................................................................................................ 2
Average Business Day.................................................................................................................. 2
Supply Analysis ............................................................................................................................ 3
Service Providers ......................................................................................................................... 3
Technical Processes ..................................................................................................................... 4
Capacity Limits and Capital Budget ............................................................................................. 5
Environmental Limitations .......................................................................................................... 6
Costs of Goods Sold ..................................................................................................................... 6
Operating Expenses..................................................................................................................... 6
Working Capital Planning ............................................................................................................ 7
Human Resources Plan ................................................................................................................... 8
Roles ............................................................................................................................................ 8
Marketing Plan ................................................................................................................................ 9
Place ............................................................................................................................................ 9
Price ............................................................................................................................................. 9
Product ...................................................................................................................................... 10
Promotion ................................................................................................................................. 10
Segmentation, Targeting, & Positioning ................................................................................... 11
Revenue Projections.................................................................................................................. 12
Financial Plan ................................................................................................................................ 13
Financing Budget ....................................................................................................................... 13
Debt Amortization Schedule ..................................................................................................... 13
Capital Budget & Depreciation.................................................................................................. 13
Corporate Income Taxes ........................................................................................................... 14
Dividend Policy .......................................................................................................................... 14
Financial Analysis....................................................................................................................... 14
Risk Analysis .............................................................................................................................. 15
Summary of the Business Plan ...................................................................................................... 15
List of Figures
Figure 1: Site Plan
Figure 2: Daily Operation Hours
Figure 3: Capital Budget Summary
Figure 4: Costs Of Goods Sold
Figure 5: Year 1 Operating Expenses
Figure 6: Schedule Draft
Figure 7: Positioning Map
Figure 8: Yearly Revenue Projections
Figure 9: Financing Schedule
Figure 10: Debt Amortization Schedule
Figure 11: CCA & Depreciation
Figure 12: Corporate Income Taxes
Figure 13: Retained Earning Account
Figure 14: Cash Flow to One Shareholder
Executive Summary
MV3D Café is a modern styled coffee boutique paired with a 3D Printing service facility. Located
in Saskatoon in the new green space plaza in front of TCU Place on 22 nd Street. MV3D Café was
found by myself, Dustin Maki, and Victor Valois. M-V = Maki-Valois. Victor and I have been
experimenting with 3D Printing for about a year and we want to take it to the next level and
share our experiences with the world by creating our 3D Café.
MV3D Café will encourage our guests to enjoy a fresh brewed coffee from exotic geographic
locations while being immersed in a modern style Café surrounded by 3D Print artifacts. There
are two 3D Printers in the Café for guests’ observation and there are four in the lab for 3D
Printing clients. This business is about pairing an infant industry, 3D Printing, with a classic
business model and mature industry of beverage service. This business plan is designed to give
you the best understanding possible of the complete operations of MV3D Café. The business
plan will include:
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Operation Plan
o Full day-to-day operations
Human Resources Plan
o Roles, Responsibilities, & Scheduling of employees
Marketing Plan
o Place, Price, Product, Promotion
Financial Plan
o Financing Schedules, Paybacks, and Overall Feasibility
MV3D Café was thoroughly analysed and all projections are as accurate as possible. Based on
this plan the business is feasible; however, feasibility is very sensitive to any fluctuation in
average purchase price or guests per day.
i
Introduction
MV3D Café is a modern styled coffee boutique coupled with a clean state of the art 3D Printing
facility located in Saskatoon, Saskatchewan. The Café provides our guests with fresh coffee
beverages, prepared deli sandwiches and snacks. The 3D Printing facility allows our guests to
explore their creativity on 27 inch iMac computers which gives them access to 3D design
software, graphic software, and ultimately the ability to 3D Print their own creations.
Operations Plan
Organizational Structure
MV3D Café only has a two tier organizational structure: Management (Myself and Victor) on top
and employees below. Victor and I are 50/50 in this project and will be devoting all of our time
to this project. As Managers we will oversee all operations and operate the 3D Printing lab. The
employees will be Baristas and will operate the Café.
Site and Floor Plan
The primary location for MV3D Café is in the new Green Space Plaza to be located in the parking
lot across from TCU Place. This location on is ideal for 2 reasons; highly visible because of high
traffic, and central location within Saskatoon. Having a central location is essential to the 3D
Printing sector of MV3D Café because the 3D Printing industry and knowledge is still in its infant
stages. In order to provide as many Saskatoon residents with the ability to 3D Print their creations
the store location must be accessible.
To the right is a proposed floor plan for the Café. It
would be ideal to get a corner section of a building
so that printers could be displayed in the windows
to the public. The first thing our guests will see
when they walk in is a large wooden bar top in front
of them, and to the left a Printing lab. The Printing
lab and Café are separated by a glass wall to allow
Café guests to see the printing facilities and also
prevent any risk of damage to machines from
coffee. The lab also requires authorized entry. The
Fig. 1 Site Plan
Café will be furnished with comfortable leather
seats and modern style light fixtures. The color of the interior will be very neutral (White, Black,
and Wood Grain); however, 3D Printed artifacts will provide vibrant colours within the Café.
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Quality Control
MV3D Café provides premium coffee and fresh deli sandwiches to our guests. In order to
maintain our clientele we will highly standardize our behind-the-counter operations to ensure
that our quality is consistent and delicious. Victor and I will personally pick out the assorted
coffee products we will serve as well as design a simplistic deli menu that will cater to a wide
range of guests. To ensure our deli sandwiches are fresh we will prepare them daily in the
morning before operating hours and give the left over sandwiches a homeless shelter.
Maintaining the 3D Printers and computers will provide quality control for the lab. Also
educating the lab guests on best practices for 3D printing will contribute to the quality control
of MV3D Café.
Average Business Day
The average business day will be 12 hours long. Totalling 80 hours of operation in a week. The
average business day is outlined below:
7 a.m. – Manager – turns lights on, brew coffee, start printers and
computers. Prepare daily deli selection until opening at 8 a.m.
8 a.m. – Manager – Open for operation, provide guests with coffees
until first employee arrives at 8:30
8:30 a.m. – Manager Focuses on 3D print guests and helping the
barista as needed.
11:00 a.m -2nd Manager comes in to assist with the rush
Busy Times: 11:00 - 1:00, 3:00 – 6:00
Mon
Tue
Wed
Thur
Fri
Sat
Sun
-
8-8
8-8
8-8
8-8
8-8
9-8
12 - 8
Fig. 2 Daily Operating Hours
1:00 p.m. – 2nd Barista comes into work and will close the shop down at 8:00 p.m. and has an
hour to finish closing duties.
3:00 – 1st Manager Leaves
4:30 – 1st Employee Leaves
8:00 – Closed
The operation of the coffee equipment is simple and 2 Baristas assisted with a Manager would
be able to assist approximately 60 guests an hour.
2
Supply Analysis
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MV3D Café will get fresh produce for deli sandwiches from Gordon Food Services (GFS)
3D Printers and Material will be sourced from Thorstand Computers located in Outlook.
iMacs will be purchase from Apple Inc.
Coffee Equipment will be purchased from a variety of distributors.
Coffee and Espresso will come from many different places; Local and International
Listed above are the most essential suppliers to MV3D Café because it is the foundation of the
company. A relationship with Thorstand Computers has already been established because of
previous 3D Printing projects. Coffee Equipment, iMacs, and Furniture are a one-time purchase;
however, when making these purchase decisions we took into consideration the warranty
covered and whether or not there were service providers in the Saskatoon area. Gordon Food
Services has a good reputation in Saskatoon and has been selected to supply MV3D Café with
all the necessities for the deli cooler.
The most essential relationship to build is with our coffee and espresso providers. Preoperation Victor and I will travel to areas around the world and find a variety of premium coffee
beans for our coffees. MV3D Café wants to provide our guests with a diverse variety of coffee
and espresso from exotic locations. We have 1 supplier on the Galapagos Islands that will be
supplying Lava Java to MV3D Café but we want to develop five new suppliers for coffee and
espresso before the opening for operation.
Service Providers
MV3D Café offers many different options than the average Café therefore it is important that
the time spent in operation is spent operating and not fixing broken assets. To prevent any
down time in the business MV3D has a list of service providers:
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3D Printers: ThorStand Computers
Coffee Equipment: Bunn or MotherParkers
Computers: AppleCare from Apple Inc. (3 Year Warranty)
Email, Internet, Phone: SaskTel
External Audit: Deloitte LLP
Our service providers will provide MV3D Café with immediate Troubleshooting if any problems
have occurred and fix any issues with the specific asset. We will have a back-up espresso
machine in case 1 of the 2 operating espresso machines cannot be fixed promptly.
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Technical Processes
3D Printing: Machines must be properly maintain in order to keep the asset operatable.
Maintenance requires daily calibration of the machine (leveling and nozzle calibration). This
daily maintenance will take approximately 5 minutes a machines. Monthly maintenance
required is lubrication of gears and rods. Lubrication of the machines can be done in a minute
and keeps the machines running smoothly and accurately.
The 3D Printing process is highly automated while printing; however, it requires work before
and after the action of printing. Prior to printing a 3D design must be completed on a computer
and must be uploaded to the Makerbot Makerware as an obj. or stl. file. Once the file is
uploaded the Makerware splices the design and computes exactly how the printing process will
go. Once the print is fully printed there will be a rafting on the bottom of the print as well as
support materials that require manual removal. Once all of the rafting and supports are
removed then the print is complete and our guests are encouraged to attempt different
finishing processes on their own.
Coffee: Regular coffee from our 6 different geographically locations will be brewed in large
brewers and are easily poured into a cup for our guests. Espresso and specialty coffees require
more manual labour and the process goes as follows: pour milk in to steel steaming holder,
grind espresso into espresso container and firmly insert this into the espresso machine, begin to
steam and froth milk in steel container, put liquid espresso into serving or takeout cup, add milk
and froth as required, add additional toppings or flavor shots as required, hand beverage to
guest with a smile.
Delivery and Stocking: Delivery for MV3D Café will happen quite frequently due to the many
different supply channels. In the beginning the managers will be in charge of receiving any
shipments and putting them away in either the dry storage space or the walk in fridge. Stocking
of the coffee on line will be the duty of the Baristas. MV3D Café will sell bagged coffee, MV3D
mugs, and 3D Printing artifacts within the store and keeping these stocked is the duty of all
employees. If we are out of stock for any coffee or other items for purchase we will put a cute
3D Printed creature there that will be holding an apology sign with a potential date for re stock
of that specific item.
Busy Hours: During our busy hours between 11 a.m. – 1 p.m. and 3 p.m. – 6 p.m. to ensure the
greatest operating efficiency we will create an assembly line type process. 1st employee will
take orders and payments while 1 or 2 other employees will start and finish the beverage order
which is the best practice for coffee shops during busy hours.
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Capacity Limits and Capital Budget
The layout of MV3D Café can provide 28 guests with seating at a table at one time. Assuming
people would stay on average an hour means during our hours of operation 336 guests would
be able to sit and enjoy a coffee and read the newspaper. However, we do believe lots of our
guests will be on the go and come in for a coffee and leave promptly. Our Baristas will be
trained to be able to make a coffee and take payment in 2.5 minutes. With an average business
day being 12 hours and having an average of 2.5 Baristas on at all times our maximum capacity
would be 720 guests in a day.
The 3D Printing lab contains 4 desktop computers and 4 3D Printers therefore the maximum
capacity for this facility is 4 at any given time. It is impossible to decipher how busy these
stations will be; however, if there is an extreme demand for the computers and printers an
online sign-up schedule will be made with a maximum of 4 hours per individual. If a print takes
more time than 4 hours then one of the two 3D Printers located within the café will be utilized
for a day-long print.
Below is the Capital Budget for MV3D Café to be located in the new green space plaza in front
of TCU Place. This table represents the initial Capital Expenditure as well as the additional
$20,000 invested in the newest 3D Printing technologies in the second year of operation.
Schedule 5: Capital Budget
Lease Improvements
3D Printers and Materials
Furniture and Fixtures
Total
2015
65,000
45,000
20,000
130,000
2016
2017
2018
2019
20,000
-
20,000
-
-
Fig. 3 Capital Budget Summary
Continual investment in computers and 3D Printing technologies will ensure that MV3D Café
does not utilize dated technology and will keep loyal clientele coming in to use these services.
The initial 3D Printers and Computers total $45,000 (6 Printers ranging from $3,000 - $6,000
each, 20 spools of material are $1,000; $50/Kg, 5 iMacs for $2,500 each).
Lease Improvements include all renovations to the 1390 sq/ft floor plan; flooring, front desk,
espresso machines, fridges, and shelving). $65,000 will cover all of these expenses.
Furniture and Fixtures purchase will total $20,000 mainly because lots of modern styled
furniture and tables are quite expensive but essential to the overall perceived value MV3D Café
wants our guests to experience.
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Environmental Limitations
There are no Environmental Limitations for MV3D Café. We will be using biodegradable takeout
cups for our coffee as well as 100% recycled plastic in our 3D Printers in our efforts to reduce
our environmental impact.
Costs of Goods Sold
MV3D has 3 main revenue streams; Coffee & Specialty Coffees, Deli Snacks, and 3D Printing
Services. In order to cover our operating costs we will be charging a premium price for all of our
Coffee and Deli options. As discussed earlier we will have many suppliers for coffee which will
drive our costs of goods sold for coffee up. To mitigate this expense our coffee will be priced
higher than the average in order to maintain a gross margin close to industry standards.
Schedule 3: Cost of Goods Sold
Gross Profit Margin
Coffee
Deli
3D Printing
2015
COGS
85%
50%
90%
15%
50%
10%
Fig. 4 Costs of Goods Sold
3D Prints has the highest margin due to the low costs of materials; however, our guests will be
charged based on time used to ensure that these assets will generate a sufficient profit related
to their useful life. Deli costs are at 50% of the sale price due to lower quantities of supplies
purchased. If our Deli begins to gain more interest we will increase its capacity and production
which will increase the margins and lower the costs associated with purchasing the raw goods.
Operating Expenses
Due to the long business hours of MV3D Café the majority of our operating expenses are wages
for our employees. Victor and I will pay ourselves $30,000 each a year which will allow us to
continue on with our current standard of living. Employees at MV3D Café will be paid $12/hour
which is well above minimum wage in Saskatchewan. The reason for this is to mitigate
employee turnover and try and retain employees for possible job promotion.
Below is a table which contains all of the operating expenses for the first year in operation.
Accounting will all be done by myself unless we reach a net income above 250,000 a year then I
will consult Deloitte LLP for an external audit. Legal costs are mostly associated with the startup of MV3D Café, a lawyer will assist us with the incorporation process as well as dividing our
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shares in the company. The advertising expense is very low each year because our marketing
efforts will mostly be focused around providing free 3D Printing time and discounts on coffee.
Schedule 4: Operating Expenses
Accounting and Legal
Advertizing (Marketing)
General Supplies
Insurance
3D Printing Supplies
Telephone
Utilities
Repair and Maintenance
Wages
Employee Benefits
Misc Variable Costs % Sales
Capital Cost Allowance
Debt Interest
Total operating Expenses
2015
13.96%
0.5%
Fig. 5 Year 1 Operating Expenses
1,500
2,000
20,000
1,500
5,000
1,200
6,000
2,000
107,040
14,943
972
7,800
12,000
181,955
$20,000 for general supplies will
include all administration material
for the office as well as takeout
supplies for coffee and other
products. 3D Printing supplies will
be purchased throughout the year
when needed such as; spools of
plastic, Teflon tape for print
platform, and tools to assist with
maintenance and raft/support
removal. Telephone, internet and
email will be supplied by Sasktel and
$1,200 will cover this cost. Utilities
are based on square footage
discussed in class; Natural Gas
$0.45/sq/ft, Electricity $3.50/sq/ft,
and Water $0.25/sq/ft.
Repair and Maintenance has been estimated at $2,000 for the year. Wage expenses are broken
up above and the employee benefits are 13.96% of wage expenses which is required in
Saskatchewan. Approximately $1,000 is allotted to variable miscellaneous costs. CCA is
calculated based on the depreciation of the building as well as depreciation of 3D Printing and
Coffee equipment. Debt interest is $12,000 because we will be paying off our debt completely
within 7 years. Total operating expenses are $181,955 for the first year and increase slightly
year to year with an increase in guests entering our establishment.
Working Capital Planning
Cash: The maximum cash balance MV3D Café will have on hand is $30,000 at the end of the
year. Any excess cash will be paid out to myself and Victor as dividends.
Liquidity: Many of the assets that belong to this organization have a high liquidity. In case of
foreclosure 3D Printer and computers would be easily liquidated as well as Coffee equipment.
Inventories: Coffee inventories will be provided bi-weekly. MV3D Café would like to have
$1,500 of inventory on hand at any given time.
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There are no accounts receivable for MV3D Café because we require payment at the time of
purchase and in the case of 3D Printing we require payments before the service is provided.
Human Resources Plan
MV3D Café wants to employ four part time employees to allow flexibility in the workplace.
Below displays a chart that displays the potential shift requirements for each employee. Each
employee will work approximately 24 hours with the exception of one employee getting an
extra shift each week. Managers will work every day which is not ideal; however, for a start-up
project this is expected. Once logistics are solidified and the employees know how to operate
the business it will be possible for each manager to get one or two days off each week.
Total Hours of Work
Managers (Salary) Part time #1 Part time #2 Partime #3 Part time #4 Daily Total
Monday
16
8
8
16
Tuesday
16
8
8
16
Wednesday
16
8
8
16
Thursday
16
8
8
16
Friday
16
8
8
16
Saturday
16
8
8
16
Sunday
16
8
8
Total Hours
112
24
24
32
24
104
Fig. 6 Schedule Draft
Paying my part time employees $12/hour will allow me to recruit and maintain good employees
and hopefully find someone we can trust enough to take on a management role in the near
future. The 3D Printing process is quite technical and complex therefor victor and I will be
assisting guests in the lab; however, we would like to recruit one of the 3D Printing enthusiasts
that we see in our lab. The reason we would like to recruit an individual to deal with the
printing lab is so Victor and I can have a break at some point during this venture.
Roles
Managers: Oversee and operate entire business, primary focus on the 3D Printing lab. All
administration work; hiring, firing, and scheduling is done by managers. Receiving and stocking
external orders. To start managers will be the first people to open the door at MV3D Café each
morning. Managers will prep the deli daily with the time before opening.
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Baristas: There will be four Baristas employed to begin this venture. Their duties include:
Maintaining the store, stocking the interior with bagged coffee and 3D Printed Artifacts,
preparing fresh beverages for guests, taking all POS payments for coffee and printing, closing
the store, and shutting everything down.
MV3D Café can be ran with the six employees listed above to start off operation. Once the
business is fully operating we will have open discussions regarding scheduling and hours
worked to ensure that our employees are satisfied with how we are operating. The Employees
at MV3D Café will have to be energetic and happy. Since this is a brand new start up with next
to no brand recognition it is important that every guest that enters our facility leaves feeling
great about their time with us.
Marketing Plan
MV3D Café is a brand new type of venture to be introduced to Saskatoon. Being a first mover
has its advantages; however, with low brand recognition marketing efforts are pivotal to its
success.
Place
The location of the store is essential to success. The initial location that MV3D Café is planned
to be located is in the new green space plaza to be constructed across the street for TCU Place.
This is an ideal location due to heavy traffic going down 22nd street as well as its proximity to
the central downtown business district. This is also a central location within Saskatoon which is
important for the 3D Printing sector of MV3D Café. This location will allow the most access by
the most individuals and when people are enjoying the beauty of the green space they can have
a refreshing beverage from MV3D Café
Price
MV3D Café will have a premium price for coffee because of our diverse and unique offering
within Saskatoon. As discussed above Victor and I will be travelling and creating supplier
relationships from around the globe to supply our Café with the most unique coffee in
Saskatoon. In order to keep the margins relative to that of industry standards (87%) we will be
charging a premium price around $3 for a large premium coffee.
3D Printing will be assessed by printing time and design time. To keep this service attractive to
anyone interested in 3D Printing it will be approximately $20/hour. The other shops in Europe
and Japan charge about $1.50 a minute; however, I find this to be very unattractive and could
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not justify that price. If all four Stations were occupied for an entire day they could reel in close
to $1,000 in revenues.
Product
MV3D Café offers three different products. 1) Coffee, Tea, and Specialty Coffee. 2) Deli Snacks
such as: sandwiches, salads, and fruit cups. 3) 3D Printing Services
1) Coffee, Tea, and Specialty Coffees: These products will be premium products served to our
guests at a premium price. MV3D Café wants to be completely unique in not only the aspect of
offering 3D Printing but in offering our guests coffee that they otherwise would never have
even known about. We have one supplier from Galapagos Islands which will provide Lava Java
but we will be traveling the world to find five new suppliers to make our selection like no other.
2) Deli Snacks: All deli sandwiches will be prepped in the morning prior to opening the doors.
We will use food supplied by GFS and with my past culinary experience will create some
delicious sandwiches. We would also like to provide our guests with some fresh salads prepped
daily which will be a healthy alternative than most downtown locations are offering.
3) 3D Printing Services: We would like to invite our guests to explore their creativity in our
State-of-the-art 3D Printing Lab. This lab will be fully equipped with everything it takes to get an
product from the idea phase into the palm of your hand. We will have one manager overseeing
the lab operations who will be able to assist anyone with any issues they are having. Due to the
high cost of buy a 3D Printer this allows residents of Saskatoon and Area a chance to test out
there design skills and see an end product.
The major benefits that 3D Printing will bring Saskatoon is product development. Usually when
an individual want to start a product they will be interested in doing a plastic mold injection.
These molds are $10,000 - $40,000 each. 3D Printing does not yet produce things in a high yield
like mold injection; however, it is a great place to get started before such a hefty investment.
Promotion
MV3D Café will first utilize the local media in its promotional efforts. This is a brand new type of
business being introduced and one of the advantages this will have is the access to media.
Global News, CTV, The Sheaf, The Verb, and Planet S are all media outlets that I will contact and
get the initial buzz going for the café.
Also to begin the 3D Printing sector off strong we will be offering free 3D Printing and designing
for the first 2 months of operation. Online there will be a sign up sheet for a maximum of 4
10
hours a week per individual allowing the maximum amount of people access to this service. This
will kickstart the 3D Printing sector off and hopefully create quite a buzz around town.
A year prior to the grand opening of MV3D Café there will be an online catalogue of 3d Printed
good under the same brand MV3D. This catalogue is partially developed and is hoped to launch
in the next few months. Using channels such as Facebook, Twitter, and Instagram we will
attempt to gain as much brand recognition as possible. We will try and connect with as many
local 3D Printers as possible as well as any individuals interested in 3D Printing. These online
channels will be switched over to MV3D Café a month prior to opening the doors to let our
following know exactly what is going on and when it will open.
Segmentation, Targeting, & Positioning
MV3D Café has many offerings for a diverse array of people therefore we have segmented the
market into downtown professionals and free-lance creative professionals. The downtown
district of Saskatoon employees a majority of the Saskatoon population and MV3D Café will be
there to provide them with coffee and snacks during their busy days.
Free-Lance professionals such as website designers or graphic designers are the primary focus
for the 3D Printing lab. These individuals work on their own schedules and are available to
utilize our resources during all of our operating hours.
To target the business professionals we will drop off loyalty cards to surrounding businesses.
These loyalty cards will have two free coffees, the first to get them in the door and the tenth to
ensure that they will keep on coming. With my past experiences in Entrepreneurship this is a
realistic approach to getting the guests into the doors and I have had many business
professionals tell me that this is a great way to start off a relationship.
To target individuals interested in our 3D Printing services we will utilize our following online.
Using our Facebook, Twitter, and Instagram to communicate with our 3D Printing enthusiast
will be a critical channel in making sure that the public is aware of what we have to offer and
how they can use their creativity to create unique and personalized 3D Printed goods. By
offering the first 2 months of free 3D Printing this will show our guests that we are truly
conducting this business in the interest of the creative entrepreneur. For people who would like
to 3D Print but have no experience we will make it clear that we have assistance in the lab at all
time.
MV3D Café is in the Coffee House industry and would like to be unique in every aspect. As
discussed above we will have a premium price due to our unique offerings. Below is a chart
showing MV3D Café in relation to other competition in the industry.
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As seen to the left we have used an
x-axis which is generic to unique and
a y-axis from low price to high price.
We want to be in the top right
quadrant; Unique and High Price.
This suits our atmosphere that we
are building in MV3D Café and will
set us apart from other competitors.
By creating filling this gap in the
positioning map we believe we will
supply the coffee lovers of
Saskatoon with a unique new
experience that they will have to tell
all of their peers about.
Fig. 7 Positioning Map
Local coffee shops are the major threat for MV3D Café because of their ability to be unique and
not have to follow the corporate orders of the franchise. Most of these local coffee shops have
adopted a natural and cozy atmosphere. This is where MV3D Café differs completely because of
the modern clean interior style which aids in the featuring of the 3D Printing lab.
Marketing Expenses will be very low because most of our efforts will be online. To offset the
free 3D Printing and coffees we will be offering we have allotted $2,000 dollars to cover this
expense.
Revenue Projections
Revenue projections are based off of an average purchase of $6.00 and getting an average of 90
guests per day. This is well under capacity; however, this is a realistic projection of what we
expect to be able to capture. As the years go on there is an increase in customer per day but
the COGS do not very perfectly with the revenues and the reason for this is we projected an
increase in 3D Printing services yearly. Ending on year 5 at 15% of revenues coming from 3D
Printing which has a Profit Margin of 90%.
2015
Sales
COGS
Gross Profit
194,400
37,130
157,270
81%
2016
266,620
50,524
216,095
81%
2017
2018
2019
320,410
61,519
258,891
81%
378,885
66,494
312,391
82%
419,710
70,092
349,618
83%
Fig. 8 Yearly Revenue Projections
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Financial Plan
Financing Budget
Schedule 6: Financing Budget
MV3D Café will be primarily funded by
Bank debt
debt at 52% debt and 48% equity coming Equity
from Victor and myself. We want to pay
Total
off all of our debt within 7 years in case
we do well and see an opportunity to franchise the business.
2015
80,000
75,000
155,000
52%
Fig. 9 Financing Schedule
Debt Amortization Schedule
Schedule 7: Debt Ammortization
Beg Balance
Addition
Payment
Interest
Principal Reduction
End Balance
2015
7
80,000
19,229
12,000
7,229
72,771
2016
72,771
19,229
10,916
8,313
64,458
2017
64,458
19,229
9,669
9,560
54,898
2018
54,898
19,229
8,235
10,994
43,904
2019
43,904
19,229
6,586
12,643
31,260
Fig 10 Debt Amortization Schedule
MV3D Café will make Payments of $19,229 yearly to get out of debt quickly. We expect to get
our debt at a cost of 15%. All of the financials are built on a base case of 90 guests; however, if
we get demand much higher than that our biggest priority is to become debt free.
Capital Budget & Depreciation
The Capital Budget is seen in Fig. 3 in the previous pages. Most of the assets owned by MV3D
Café are considered class 8 assets which are depreciated at a rate of 20%. The lease
improvements are depreciated at 4%. Below is a chart to visual the depreciation and CCA of
these assets.
Schedule 8: CCA
Class: Leasehold Improvements (Class 1)
Beg Balance
4%
Addition
CCA Expense
End Balance
2015
2016
2017
2018
2019
65,000
1,300
63,700
63,700
2,548
61,152
61,152
2,446
58,706
58,706
2,348
56,358
56,358
2,254
54,103
Class: Furniture and Fixtures and Appliances (Class 8)
Beg Balance
20%
Addition
65,000
CCA Expense
6,500
End Balance
58,500
58,500
11,700
46,800
46,800
20,000
11,360
35,440
35,440
7,088
28,352
28,352
5,670
22,682
Total CCA Expense
14,248
13,806
9,436
7,925
7,800
Fig 11 CCA & Depreciation
AA
13
Corporate Income Taxes
Income Before Taxes
Accumulated Loss Carryforward
Loss Carryforward Used
Taxable Income
1
2
3
(24,685)
(24,685)
-
24,236
(24,685)
(24,236)
-
64,213
(449)
(449)
63,763
118,708
118,708
154,361
154,361
0.0%
0.0%
17,854
(10,840)
1,275
8,289
12.9%
33,238
(20,180)
2,374
15,432
13.0%
43,221
(26,241)
3,087
20,067
13.0%
Federal Tax
Small Bus Tax Credit
Provincial Tax
Total Taxes
4
5
Fig 12 Corporate Income Taxes
In our projections MV3D Café will have a net loss in the first year and receive a loss carry
forward. Although we have a net loss in the first year we do have positive cash flows. We must
see a growth of 20 – 30 % of guests per day to see a positive net income in year 2.
Dividend Policy
Year
Retained Earnings Account
Beg RE
Net Income
Dividends
End RE
30,000
1
2
3
(24,685)
(24,685)
(24,685)
24,236
(449)
(449)
55,923
1,364
54,110
4
54,110
103,276
40,177
117,209
5
117,209
134,294
101,726
149,777
Fig 13 Retained Earnings Account
Victor and I will pay ourselves out dividends starting in year 3. MV3D Café dividend policy will
enforce that $30,000 must remain in the cash account at all times.
Financial Analysis
Based on the financial analysis I have conducted, at this capacity, this project is feasible.
Although the coffee industry is Saskatoon is fairly saturated MV3D Café has product offerings
that differ from ever other coffee shop. The most critical variables in these projections are the
average purchase per individual as well as number of guests.
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Risk Analysis
As stated above the critical variables are: average purchase and guests per day. The best way to
evaluate this start-up is by total cash flow to equity. Victor and I require a 20% ROI. The table
below outlines the total cash flow to an individual shareholder.
Guests Per Day
Total Cash Flow To Equity
80%
2,012
90%
57,969
100%
110%
120%
113,925 169,882 225,679
Fig 14 Cash Flow to One Shareholder
As seen above by increasing or decreasing the guests per day by 10% increments it has huge
effects on the feasibility of this business. However, with high risk is also high reward as seen
with the 20% increase in customer per day the cash received is significant.
Summary of the Business Plan
MV3D Café is a modern styled coffee boutique paired with a state of the art 3D Printing facility.
Victor Valois and I will be fifty-fifty partners in this venture contributing a total of $75,000 of
initial capital. An additional $80,000 will be borrow from a bank with 15% interest. We plan to
spend $130,000 on getting our location renovated and ready for operation while the rest will be
in a cash reserve to ensure we can pay debt.
The Café will employ four part time Baristas to operate the café while Victor and I assist people
in the 3D Printing lab. The employees will all be paid above minimum wage, receive benefits,
and work an average of 28 hours a week. Our Café offers a variety of coffee personally selected
from exotic locations around the world and our Baristas will serve the most refreshing of
beverages to all guests.
The business will be located in the green space plazas to be constructed in front of TCU Place.
The downtown area is filled with the majority of Saskatoon residents working in these quarters.
Premium pricing will be used to keep margin high because there will be extra costs associated
with getting coffee from different geographic locations. We will hand out promotional loyalty
cards to nearby businesses which offers them there first and tenth coffee free to get people
coming in the door. For the 3D Printing market segment MV3D Café will offer free printing for
the first two months of operation to get people involved.
Overall based on my analysis of the finance projections and my passion for 3D printing I believe
this project is feasible.
15