Costs of Richard's Caffee:

The hourly rate charged by service providers - 90$ (competitors)

Printing services, scanner, latest office software, no kitchen, imported baked products from locals, 5 computers, booths, some sofas, and a general cafe area with tables and chairs. Pastries and coffee.

- Targeting 18 to 35y/o

- 50 seat totals: 15 at computer terminals (3 per booth), 15 in the wine lounge, and 20 in the general area.

Staffing university students working 15 hours per week @ 40$ / hour

- Total staff needed for 90 hours/week as cafe opened for 84 hours and 6 days/week

- 2 employees on duty each shift

40.000$ salary per month for a manager with restaurant experience

Lease cost of 30.000 per month

Telephone bills and utilities at 15.000$ per month w/ initial deposit of 7.000$

Link to the internet at 10.000$ per month

- Internet service at 60$ per computer per hour

Insurance 10.000$ per month

Advertising, marketing, a promotion at 10.000$ per month

- Fixed of 20.000$ prior to opening cafe

Fixed of 120.000$ for upfront costs like legal fees, incorporation expenses, licenses, and permits and decorating

Misc admin and maintenance expenses @ 50.000$ per month

EXERCISE:

1. How many customers visit Richard will need to break even in the first year?

UNIT COST TOTAL COST (US$) (JAS) $150 $10,000 $2,000 $5,250 $350,000 $140,000 $50,000 $28,000 $800 $2,000 $350,000 $400 EQUIPMENT LIST NUMBER OF ITEM ITEMS General Equipment Telephone system 1 Counter fixtures 1 Espresso machines 2 Cash register 1 Photocopier 1 Hardware Pentium systems, colour monitors, CD 5 ROMs and modems Colour ink-jet printer 1 Laser printer 1 Software Windows 95 1 Microsoft Office 1 Furniture Tables or booths 20 Chairs or stools 50 Sofas 2 Other Artwork/sculptures 4 China, cutlery, glassware Flowers/plants TOTAL $14,000 $28,000 $800 $100 $3,500 $12,250 $350 $150 $100 $105,000 $175,000 $50,000 $10,000 $100,000 $5,000 $1,426,000 UNIT COST TOTAL COST (US$) (JAS) $150 $10,000 $2,000 $5,250 $350,000 $140,000 $50,000 $28,000 $800 $2,000 $350,000 $400 EQUIPMENT LIST NUMBER OF ITEM ITEMS General Equipment Telephone system 1 Counter fixtures 1 Espresso machines 2 Cash register 1 Photocopier 1 Hardware Pentium systems, colour monitors, CD 5 ROMs and modems Colour ink-jet printer 1 Laser printer 1 Software Windows 95 1 Microsoft Office 1 Furniture Tables or booths 20 Chairs or stools 50 Sofas 2 Other Artwork/sculptures 4 China, cutlery, glassware Flowers/plants TOTAL $14,000 $28,000 $800 $100 $3,500 $12,250 $350 $150 $100 $105,000 $175,000 $50,000 $10,000 $100,000 $5,000 $1,426,000