CMUS372_ Business Plan

Business Plan Sydney D. Plummer 10/07/2023 CMUS 372-B01 Professor Loral Marsh

2 My vision for my business is that of a music-themed coffee shop called Cafe Allegro. It will have music related names for the drinks and food, and interesting decor and novelties that will create a unique and charming ambiance. This will not be your average coffee shop that looks just like every other one in the market. Cafe Allegro will also have a performance space that offers live music on Friday and Saturday nights, and will be space for friends and family to gather and listen to their loved ones as they perform. It will become a hang-out scene, a place that people can visit several times a week and not feel bored or out of place. It will be welcoming, friendly, exciting, interesting, and relevant. While other coffee shops in the area are focused on quick interactions that are intended to serve you and then have you exit, Cafe Allegro is designed to be a place that a person can enjoy their cup of coffee or food, and sit and talk with friends or neighbors, listen to music, and grow the community together. While Cafe Allegro is most suited to customers that range from 18-35 because of the live entertainment, and the novelty of the drinks and food being music themed, it is open to anyone of any age, race, and gender. Everyone is welcome in this cafe. Friends and family of musicians will love the atmosphere because we will be playing local music, and not simply of random strangers. It will be people that they know and love. It will be a great place for students to come and study, as well as a quiet place for people needing to get work done in a stress-free environment. I will be selling gourmet coffee, so that will entice anyone who enjoys a good, well made cup of coffee. Bands who are promoting their music will find my Cafe accommodating and welcoming, as well as any local musicians who are looking for experience playing in front of a live audience. The environment will be well-suited for people who are lovers of the Arts; the decor and the music we will select will be of good quality and pleasing to the eyes and ears. We are not going to just be selling coffee, we are selling the entire experience.

4 I will be marketing for the Cafe Allegro, but with intention. Instead of sending out thousands of letters and paying for advertisements that I have no idea who is viewing it, or if they will even be interested, I will ensure that I am reaching my targeted audience by using platforms that they frequently use as well. In this case, it will be primarily Instagram. I will post quarterly contests for naming a new drink on the menu, and post coupon and drink specials to entice business. I will also open up advertisements on Instagram that are interesting, unique, and relatable in order to better reach that age group. By engaging with viewers, replying to comments, and making connections I will be generating interest. I will also be creating a website that shows people who I am and what I stand for, as well as give information about my Cafe and what we have to offer. I will create a form on the website that gets the email addresses and social media accounts of people who visit it by offering a drink coupon for signing up. This will allow me to send out advertisements and targeted information to bring in their business. There are several activities that I will need to complete before I am able to start the Cafe Allegro, and operate it on an ongoing basis. First, I will need to apply for a sole-proprietorship. As I will be the sole owner without any partners, I have decided that forming my business as a sole-proprietorship will make more sense than trying to incorporate or forming an LLC. It will require less paperwork at the beginning, and it will be easy enough to change the status of my company in the future if something were to change. I will need to purchase different insurance plans for the business before beginning. These will include: Public Liability insurance, Employment practices insurance, Business property insurance and Workers Compensation. While this seems like a lot of protection, it is important that I ensure the safety of myself, my employees, and my customers as well. I will need to find a building that suits the needs of Cafe

5 Allegro. Then, I will also need to open a Business checking account, and obtain a loan for the start up costs for the business. Business partners are important, especially when starting out. However, finding and identifying the one(s) that works for my specific business is crucial. Although I am not going to be performing, I will be working with different artists on a regular basis, either by promoting their music in the coffee shop, or having them perform live on Friday and Saturday nights in the Cafe. PRO’s (Performing Rights Organizations), specifically SoundExchange, will be essential in collecting royalties owed them by airplay or the use of their songs in any form. As I discuss in the next paragraph, I will also be recording my own music to be used in broadcasting. A PRO will be essential in making this happen, and a partnership with them will be extremely helpful. My goal is to set up my business in a way that protects artists, and find ways to help them succeed. I will not be the type of business owner that is simply out for herself. Instead, I want to promote an atmosphere of trust and caring for one another. A PRO as a partner will be a perfect way to do just that. For revenue, there are several different avenues I can personally pursue to assist in ensuring that the Cafe is able to operate, especially at the beginning. I know that it takes time for a business to become profitable, and so to ensure that I will be able to pay employees, buy inventory, and pay the bills, I plan on pursuing other revenue streams on my own time and use the funds I receive to help pay any costs for Cafe Allegro. First, I will try music licensing. This will require me to write music on the side, record it, and allow other people to use it for a fee. Similarly, I will begin recording music that can be uploaded to stock music websites. When people download the music to use, I will get paid a fee from that as well. At the same time, I will sign up with a PRO and then my music will be in a pool to be used by broadcast companies, and

7 Water Filtration system that will cost $1,168.80, and an oven that is $238.99. I did research on each of these machines and know that they are vital to the operation and success of the Cafe. In total, these machines will cost me $5,170.77. As I am getting a loan, I have calculated the price and split it into 12 monthly payments totalling $430.90. Inventory will also be something that I have to ensure I have enough of. I cannot simply run to the store if I run out, so I will need to make sure that I have backstock to cover whatever I need. These will include coffee, both grounds and beans, milk, whole, 2%, and skim, as well as pastries, sandwich materials such as bread, meats, cheeses, mayonnaise, mustard, and other toppings, cookies, brownies, creamers, and other coffee flavorings. With the traffic into my coffee shop expected to be high, I have a monthly budget for inventory set at $6,300.00. Rent is also something that needs to be factored in. It is also important that my business be located somewhere that has a lot of foot traffic, and easy access by road. It is also important that there is suitable parking, especially for Friday and Saturday nights when I am hosting the live performances. After doing research in my area to find a suitable location, I have determined that monthly rent will be approximately $5,070.00. This will be for a 2,500 square foot building that is already set up to serve food and beverages, and have the space required for live performances as well. For these live performances I am expecting a total cost of $1,702.78 for equipment. This includes: 2 JBL Speakers and stands for them that will cost me a total of $630.00, 5 XLR Cables for a total of $54.95, 5, ¼” Cables that total $134.95, an 18-Channel Mixer that will cost me $449.95, 5 Microphones that will total $205.99, 5 microphone stands that cost $124.95, and 5 guitar stands that cost $101.99. As I am getting a business loan, I have broken this down into 12 monthly payments, and this will be $141.89. For business taxes, I have estimated that I will initially be paying approximately $1,800.00, however I expect that number to rise as my business grows. Utilities are also

8 something that needs to be factored in. After doing research for my area, I have determined that I will be paying around $1,200.00 for water, electricity, phone, and internet. For insurance, research has shown me that I will be paying around $88.00 a month for Public Liability, $66.00 for Employment practices insurance, $67.00 for Business property insurance, and around $50.00 for Workers Compensation. For maintenance and repairs I have budgeted around $500.00 a month, and while I do not expect to use it all the time, it is important to prepare for when the unexpected happens. For employees, I have determined that for my first year I will need a Barista, Manager, and myself in order to properly run the Cafe Allegro. I will also need a part- time technician who will work Friday and Saturday nights in order to operate sound for the Live performances. The barista will make $15.00 an hour, so it will be approximately $2,400.00 a month, the manager will make $20.00 an hour, or approximately $3,200.00 a month, and have set my salary at $30.00 an hour, or $4,800.00 a month. I intend to only draw a salary if the business is profitable. I will also be paying around $960.00 a month to the part-time technician. I will also need to set up a sole proprietorship which will cost me around $267.00 to file. Based on these numbers, in total I am estimating that monthly it will cost my business $29,128.78, and yearly it will cost the company $349,821.36. In conclusion, the Cafe Allegro will be a music-themed coffee shop that will offer a unique, pleasing atmosphere, delicious coffee and food, and lively and engaging entertainment. We will be helping the local community by giving airtime to local artists, as well as giving them the opportunity to perform in front of a live audience. We are going to be successful because of our uniqueness, as well as our appeal to the younger generation. While there are many generic coffee shops out there, there are none that are offering such a benefit to the community. It will cost $29,128.78 a month, or $349,821.36 a year. This is an experience, not just a coffee shop, and one

10 Designed for: Designed by: Date: Version: Business Model Canvas Cafe Allegro Sydney Plummer 10/6/2023 Key Partners Key Activities Value Propositions Customer Relationships Customer Segments ● Sound Exchange ● Apply for Sole- Proprietorship ● Purchase Insurance ● Find financing ● Open a business checking account ● Value in a music themed coffee shop that is a performance space as well. ● Needs to be competitive, and engaging in order to stand out. ● Helping local musicians by given them exposure ● Be friendly and engaging ● Build relationships ● Community nights ● College age - 35 year olds ● Coffee drinkers ● New Musicians ● Bands promoting their music ● Parents of Musicians ● Male or Female ● People who enjoy new places ● Students who need a place to study ● People who like new music ● Any ethnicity ● Students who want to place in front of a live audience ● Musicians needing an audience ● Arts supporters ● People needing to work in a quiet place ● People who enjoy different music Key Resources ● Selling Coffee, pastries ● Drinks and food with music themes ● Live music on Friday and Saturday ● Playing the music of local artists ● Performance space for local musicians Channels ● Purchase ads on instagram ● Use reels with hashtags to target engagement ● Offer discounts and coupons to drive sales ● Create a website that gives details about myself and business ● Use social media to reach prospective customers

11 ● Quarterly contest to name a drink on menu Cost Structure Revenue Streams ● Advertising ● POS ● Machine Supplies ● Inventory ● Rent ● Equipment ● Taxes ● Utilities ● Insurance ● Repairs ● Employees ● Music licensing ● Stock Music ● Broadcasting ● Royalties ● Performing Designed by: The Business Model Foundry (www.businessmodelgeneration.com/canvas). Word implementation by: Neos Chronos Limited (https://neoschronos.com). License: CC BY-SA 3.0