Establish and maintain payroll systems in Australia

Finance sources

GrabACoffee Business Plan

Business name:

• GrabACoffee

Ownership structure:

• Sole trader - Meg Latazzo

Business description

• Sale of coffee and associated drinks and snacks to office workers
• Trading hours: 7.00am to 6.00pm Mon to Fri

Market research

• The office building has about 10 floors and probably 500 workers
• It is expected to attract each day, at least:
  • 40 customers for pre-work
  • 70 for morning coffee
  • 70 for lunch time and
  • 20 for mid-afternoon
• Meg knows from her research that:
  • 60% of customers prefer a regular size coffee and
  • 40% prefer large size coffee
• She also knows that approximately 30% of customers will likely order a retail product in addition to their coffee

Marketing strategy

• Signs around the building foyer and posters on each floor
• Loyalty vouchers to generate repeat business
• Excellent quality coffee at an affordable price
• Markup on costs for coffee will initially be 15%
• Markup on costs for the retail pre-packaged products will be 10%

Resources

• One full time barista initially plus Meg will pay herself an hourly rate
• Kiosk type counter and servery with espresso machine, fridge etc
• Chairs and coffee tables are already available nearby in the foyer area and can be used by customers. Seating for 12 people. Most customers are expected to buy 'takeaway' coffees.
• Point of sale payment equipment (card reader)
• Food and drink supplies

Products

• Organic Fairtrade etc coffee with a range of 'milks'
• All sold in takeaway recyclable paper-based containers
• A small range of bottled water and cold drinks
• Pre-packaged snacks (cakes, cookies)
• Later she plans to expand the range of food and drinks

Premises

• Initially to rent a 25sqm floor space in the foyer of a large high rise building in the CBD
• Rental cost $3100.00 per month
• Internet and Wi-Fi set up cost $180, and about $80 per month after that
• Electricity, gas and water connections will initially cost $250, and about $600 per quarter after that

Profit targets

• In the first year, the profit target is to reach $3,000 per month within 12 months

Finance

• Meg has $5,000 of savings to set up and operate the business
• Meg wants to raise any extra $ to set up her business from investors or a bank

Your answer to part a of this activity is one source of finance. How will you raise the rest of the finance

(refer to the GrabACoffee Business Plan which indicates how much cash you have)?

1. List two additional sources of finance, including a private or commercial financier, that can support the financial operations and viability of the business.

Capital requirements:

how much capital is needed to cover start-up costs: $19,530

Cash flow shortfall for July is -$16,545.00

Liquidity is how much cash or credit you worked out was needed in the information above . The finance options you identified on above info. should completely address this need (which is a core part of your business goals and objectives).

2. Explain how the finance options you identified in part a and b of this activity will provide the required liquidity to complement the business goals and objectives.