24h Coffee Shop Model

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NPV of Project A is highest => CHOOSE Project A

3, Start-up Summary:

The Start-up expense include:

• Legal expenses for obtaining licenses and permits as well as the accounting services totaling 600,000VND.

• Marketing promotion expenses for the grand opening of Sleepless Coffee in the amount of 5,000,000 VND and as well as flyer printing (2,000 flyers at 600 VND per copy) for the total amount of 7,200,000 VND.

• Consultants fees of 3,000,000 VND paid to law company for the help with setting up the coffee shop.

• Insurance (general liability, workers' compensation and property casualty) coverage at a total premium of 1,500,000 VND.

• Pre-paid rent expenses for one month at 325,581 VND per square feet in the total amount of 14,000,000 VND.

• Premises remodeling in the amount of 150,000,000 VND.

• Other start-up expenses including stationery (500,000VND) and phone and utility deposits (1,500,000 VND).

The required start-up assets of 92,000,000 VND include:

• Operating capital in the total amount of 92,000,000 VND, which includes employees and owner's salaries of 50,000,000 VND for the first two months and cash reserves for the first three months of operation (approximately 14,000,000VND per month).

• Start-up inventory of 7,300,000, which includes:

o Coffee beans (12 regular brands and five decaffeinated brands) - 4,800,000VND

o Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. – 6,000,000VND

o Retail supplies (napkins, coffee bags, cleaning, etc.) – 2,000,000VND

o Office supplies – 500,000VND

• Equipment for the total amount of 70,800,000VND:

o Espresso machine – 19,000,000VND

o Coffee maker – 1,200,000VND

o Coffee grinder – 1,600,000VND

o Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.) – 15,000,000VND

o Storage hardware (bins, utensil rack, shelves, food case) – 3,000,000VND

o Counter area equipment (counter top, sink, etc.) – 10,000,000VND

o Serving area equipment (plates, glasses, flatware) – 5,000,000VND

o Store equipment (cash register, security, ventilation, signage) – 10,000,000VND

o Office equipment (PC, fax/printer, phone, furniture, file cabinets) – 5,000,000VND

o Other miscellaneous expenses – 1,000,000VND

Funding for the company comes from two major sources: owners' investments and bank loans. Three major owners have contributed 80,000,000/person, which brings the total investments to240,000,000VND. The remaining 83,000,000 needed to cover the start-up expenses and assets came from the two bank loans--a one-year loan in the amount of 30,000,000VND and a long-term (five years) loan of $64,400,000VND. Both loans were secured through the Vietcombank. Thus, total start-up loss is assumed in the amount of 334,400,000VND.