Refresh Cafe Business Plan

This report presents a comprehensive business plan for a coffee cafe named "Refresh Cafe," operating as a sole proprietorship in Sydney, New South Wales. The plan outlines the business's current and future goals, including expansion and competitive advantage. It details the roles of personnel in startup and management, and provides a thorough financial plan, including resource requirements, capital acquisition strategies (equity and debt), and projected financial performance. The financial projections encompass sales and purchase forecasts for various coffee products, a cash flow statement demonstrating operating, investing, and financing activities, and a master budget incorporating a profit and loss statement and balance sheet. The report concludes with major assumptions underlying the financial projections and a list of references.

Running Head: Accounting
Accounting

Accounting 1
Contents
Description of the business..............................................................................................................1
Current goals of the company......................................................................................................1
Future goals of the company........................................................................................................2
Role of personnel in the start-up and management of the entity.................................................2
Financial plan...................................................................................................................................2
Projected finance performance........................................................................................................4
Master budget..................................................................................................................................6
References........................................................................................................................................8

Accounting 2
Description of the business
The businesses that have been chosen deal in coffee. The name of the café will be –Refresh cafe.
This business is run by a single individual for earning a profit for himself. This form of business
organization is known with the name of the sole proprietorship. It is a separate entity for the
accounting purpose. A small business starts out as a sole proprietor. In this kind of business, the
owner itself has to bear the responsibilities for day to day operations.1 The location of the
business is New South Wales, Sydney. The reason behind the selection of the location is that this
place is a most populated place where people visit. Most of the tourist who visits Australia likes
to stay in Sydney only. The business will be able to sustain in the market and will be able to earn
a profit. This is the reason New South Wales in Sydney is the best location for opening a
business.
Current goals of the company
The current goals of the business are related to the product and the customers. At the initial stage
company goal is to achieve the quality in the product. Based on the quality of the production
company can attract the customers. Quality of the product enforces the customer to consume the
product again and again.2 The company also form a goal to maximize the customer satisfaction.
The goal of the company is to create a brand image in the market. Brand images come with the
customer awareness about the product.
1 Segal, Steven P., and Jae-Sung Choi. "Ownership form and quality of care in sheltered care facilities: Chain-
affiliated business vs. sole proprietorship." Adult Residential Care 10, no. 1 (2016).
2 Evans, Vaughan. The FT Essential Guide to Writing a Business Plan: How to win backing to start up or grow your
business. Pearson UK, 2015.

Accounting 3
Future goals of the company
The Future goals of the business are related to expanding the business outlets within Australia or
outside Australia. The company also wants to enhance the sales and profitability of the company.
The company wants to create the competitive advantage over the rival competitors. this
ultimately fulfills the other future goals of the company.
Role of personnel in the start-up and management of the entity
Personnel role plays a vital role in the start-up and management of the entity. The workforce can
provide innovative ideas to the business. So that company will be able to attract more and more
customer towards the company. The workforce can also help the owner on a day to day
activities. In the day to day operations, personnel needs to work with coordination. In the
business, workforce needs to maintain the coordination among the employees so that the smooth
working take place in the organization.
Financial plan
The financial plan consists of the resources that are required in the business. So the resources
required in the coffee business are stated below.
Resource Requirements
Resource Amount ($)
Stores and Supplies
50,000.
00
Machinery (2 coffee machine)
200,000.
00
Equipment’s (used for making
coffee)
150,000.
00
Labor (30 workers*$3,000)
90,000.
00
Office Staff (10 officials*$10,000)
100,000.
00

Accounting 4
Working capital
410,000.
00
Total
1,000,000.0
0
These are few resources that are required in the business of coffee. These resources consist of the
stores and supplies that include the stores from where the owner will buy the beans. The
machinery consists of the coffee makers and coffee drip machines that can be used by the owner
in the business.3 Equipment’s consist of the coffee grinder and other equipment’s that the
company going to use while making coffee. Lobar and office staff is required while opening a
business. Working capital of the business is 410,000.00$.
Capital Requirement
and Sources of
Capital 1,000,000.00$
Equity
Common stock 600,000.00$
Debt
Loan from bank 300,000.00$
Cash Credit 100,000.00$
The capital requirement can be fulfilled by the company through different sources. Over here, a
company can utilize equity and debt. From equity company can fulfill approximately 60% of the
requirement of the capital. On the other hand from debt company can fulfill approximately 40%
3 McKeever, Mike. How to write a business plan. Nolo, 2016.

Accounting 5
requirement. Debt includes a loan from bank and cash credit. The company can take a loan of
approximately 300,000.00$ and remain as a cash credit.
Projected finance performance
This section covers the forecasting related to the sales and purchase of the product.4 Below given
tables throw light on the sales and purchase forecast of the Refresh café. The table shows the
expected sales of the product that includes espresso, café latte, cappuccino, and macchiato.
Similarly, the purchase forecast includes the amount that the company needs to purchase for the
business. This includes coffee beans, milk, sugar, and flavors.
Refresh Plc: Sales Forecast
Product
Unit
s Average price Total
Espresso 1000 150.00 150,000.00
Café Latte 1000 200.00 200,000.00
Cappuccino 800 250.00 200,000.00
Macchiato 300 100.00 30,000.00
Total 580,000.00
Refresh Cafe: Purchase Forecast
Product Units Average price Total
Coffee beans 700 250.00 175,000.00
Milk 800 50.00 40,000.00
Sugar 500 40.00 20,000.00
Flavors 200 80.00 16,000.00
Total 251,000.00
4 Haddock-Millar, Julie, and Chris Rigby. "Business Strategy and the Environment: Tesco PLC’s Declining
Financial Performance and Underlying Issues." (2015).

Accounting 6
Projected finance performance also consists of the cash flow statement. The cash flow statement
how changes in the balance sheet accounts affect the cash and cash equivalents. This activity is
categories in operating, investing and financing activities. 5
New Look Fashion Boutique Plc
Cash Flow Statement
Amount ($)
2016 2017 2018
Cash Flow from
Operating
Activities
Cash sales 174,000.00 194,880.00 243,600.00
Realization from
Debtors 203,000.00 430,360.00 511,560.00
Payment to
Creditors - - -
Expenses paid (289,800.00) (378,182.00) (568,148.00)
Total 87,200.00 247,058.00 187,012.00
Cash Flow from
Investing Activities
Machinery
Purchased (200,000.00) - -
Equipment
Purchased (150,000.00) - -
Total (350,000.00) - -
Cash Flow from
Financing
Activities
Equity capital 600,000.00 -
Borrowings 400,000.00 (50,000.00) (50,000.00)
Total 1,000,000.00 (50,000.00) (50,000.00)
Cash surplus/ deficit 737,200.00 197,058.00 137,012.00
Opening balance - 737,200.00 934,258.00
Closing balance 737,200.00 934,258.00 1,071,270.00
5 Collins, Daniel W., Paul Hribar, and Xiaoli Shaolee Tian. "Cash flow asymmetry: Causes and implications for
conditional conservatism research." Journal of Accounting and Economics 58, no. 2 (2014): 173-200.

Accounting 7
Master budget
The master budget is the aggregation of all lower-level budgets that are produced by the
company in various functional areas.6 Basically, it consists of the profits and loss statement of
the company including a balance sheet.
Refresh café Plc
Profit & Loss Statement
Amount ($)
2016 2017 2018
Sales $580,000 $649,600 $812,000
Miscellaneous income $0 $64,960 $81,200
A. Total $580,000 $714,560 $893,200
B. Cost of Sales $377,000 $357,280 $446,600
C. Gross Profit (A-B) $203,000 $357,280 $446,600
D. Operating Expenses
Salary $100,000 $105,000 $110,250
Rent $12,000 $12,600 $13,230
Utilities $1,000 $1,050 $1,103
Insurance $500 $525 $551
Depreciation $35,000 $36,750 $38,588
Marketing $10,000 $10,500 $11,025
Maintenance & Repairs $5,000 $5,250 $5,513
Other $2,500 $2,625 $2,756
Total $166,000 $174,300 $183,015
Operating profit $37,000 $182,980 $263,585
Less: Interest $20,000 $17,500 $15,000
Profit before tax $17,000 $165,480 $248,585
Less: Tax @ 30% $5,100 $49,644 $74,576
Net Profit AT $11,900 $115,836 $174,010
Refresh café Plc
Balance Sheet
Amount ($)
6 Braun, Karen Wilken, Wendy M. Tietz, Walter T. Harrison, Linda Smith Bamber, and Charles T. Horngren.
Managerial accounting. Pearson, 2014.

Accounting 8
Assets 2016 2017 2018
Current $900,000 $1,080,000 $1,296,000
Fixed $350,000 $350,000 $350,000
Other assets $140,000 $100,000 $100,000
Total Assets $1,390,000 $1,530,000 $1,746,000
Liabilities
Non-Current (Borrowings) $400,000 $350,000 $300,000
Total Liabilities $400,000 $350,000 $300,000
Equity $990,000 $1,180,000 $1,446,000
Total Liabilities & Equity $1,390,000 $1,530,000 $1,746,000
Major Assumptions for Financial Projections: Refresh Café
S.
No. Assumptions
1 In regard to sales, it has been assumed that sales of Latte and
cappuccino will be highest. Further assumed that sales of business
clothing will be 50% of Latte and that of cappuccino and espresso will
be 40% and 20% respectively.
2 In regard to sales, it has further been assumed that the overall sales
revenues will increase at the rate of 12% in 2017 and then accelerate
at the rate of 25% in 2018 and 2019.
3 Cost of sales has been assumed to be 65% in the initial years and then
it has been considered to go down to 55% due to economies of scale.
4 The interest rate for borrowings is assumed to be 5% per annum.
5 Depreciation has been assumed to be 10% as per straight line method.
6 Tax rate 30%, it has been assumed to be constant for all the years.

Accounting 9
References
Braun, Karen Wilken, Wendy M. Tietz, Walter T. Harrison, Linda Smith Bamber, and Charles T.
Horngren. Managerial accounting. Pearson, 2014.
Collins, Daniel W., Paul Hribar, and Xiaoli Shaolee Tian. "Cash flow asymmetry: Causes and
implications for conditional conservatism research." Journal of Accounting and Economics 58,
no. 2 (2014): 173-200.
Evans, Vaughan. The FT Essential Guide to Writing a Business Plan: How to win backing to
start up or grow your business. Pearson UK, 2015.
Haddock-Millar, Julie, and Chris Rigby. "Business Strategy and the Environment: Tesco PLC’s
Declining Financial Performance and Underlying Issues." (2015).
McKeever, Mike. How to write a business plan. Nolo, 2016.
Segal, Steven P., and Jae-Sung Choi. "Ownership form and quality of care in sheltered care
facilities: Chain-affiliated business vs. sole proprietorship." Adult Residential Care 10, no. 1
(2016).