To Build or Buy – Zeke’s Coffee

The business strategy is the acquisition of a coffee business called Zeke’s Coffee. The company is located in Woodridge neighborhood in the District of Colombia between Rainier and Brookland(Zeke’s Coffee, n.d). The company specializes in organically grownFair trade, and sustainable Arabic beans. They feature single origin coffee and also create their custom coffee blends. Their coffee roasts and labs produce excellent coffee varieties including various espressos, iced, drip, French press, pour over and nitro coffees. The company is a family owned enterprise that is being sold due to hardships being experienced in its management resulting from family members being unwilling to manage the business as they diversify into other areas and interests. The company is already making profits but if managed better and well advertised the earnings can be doubled or tripled.Zeke’s is a roasting firm that distributes its coffee to various shops, stores, markets and restaurants.

The business concept I want to put in place to increase the profitability of the firm is tomake coffee shops a greater focus than it is right now. Currently, the company is relying so much on the roasting and supply of their coffee to other shops, coffee selling market stations, stores and restaurants (Zeke’s Coffee, n.d). They are not paying enough emphasis on their own shops and serving their already market accepted coffees in their own shops. The plan is to create a number of coffee shops in D.C. The shops will mainly focus on the sale of coffee in a well-spaced shop equipped with current technology and Wi-Fi. The spacious coffee shops will provide individuals a quiet yet comfy study where they can do their study with access to free Wi-Fi.

The shops will also have lounges equipped with study chairs and tables where students from the various neighboring colleges and universities can conduct their group studies as they enjoy the various excellent coffee blends offered by the business. Working professionals and other groups wishing to conduct group meetings, seminars or studies will be required to make reservations twenty four hours prior to the meetings. The menu will contain the various hot and cold coffees produced by the firm as well as healthy breakfasts and lunch meals. The beverages and meals will be of very high quality and to top it all they will offered at very fair prices. Area university lecturers and students are expected to be frequenting the shops, they will be attracted and maintained by the discounts Zeke’s Coffee shops will offer including reward cards.

To advertise the new shops and increase awareness of the already existing products and services, the firm will use flyers distributing them in local schools and business. New papers and social media will also play a vital role in the advertisement of the business. The space and comfort in the shops will also be conducive for simple events and the business will extend its catering to game tournaments, weddings, work parties, art shows and so on. Upon entry of the shops into the market, local area business will benefit with free coffee for their employees and management for a day, which will act as an introduction of Zeke’s Coffee and their services to the businesses(Zeke’s Coffee, n.d).The main intention is to create a hangout for coffee connoisseurs, authors, artists and any other person looking for a place to relax and enjoy coffee. The community the business is in is divided. Zeke’s Coffee shops will be a warm yet friendly environment where people will meet and do things together. Events such as poetry nights and singles nights will help keep Zeke’s Coffee shops in potential poets and artists minds. These events will be great avenues for professionals and workers from the area to relax and meet new people.

There are plenty of risks and challenges faced when starting a business venture. Some of these risks are minimized by acquisition of an already existing enterprise. This venture is already established and has a good market and therefore it is a little less risky than starting or creating a new business (Zimmerer& Thomas, 2006). Buying anexisting business needs extensive evaluation and analysis to ascertain that it meets my expectations and needs. Proper research as well as accurate evaluation of the market and the business itself will ensure that I get the best deal. Compared to creating or building a new business, buying an existing one remains to be the quickest path to business ownership. It saves time, energy and if the business is already performing well then you get a business which is already making money unlike building a business which is not guaranteed of instant profitability. Business location is critical to business success and therefore remains to be an important factor to consider when creating of buying a business. Strategic location of a business creates a competitive advantage and hence finding a strategically located business makes buying better than building.

The advantages associated with buying an existing business are many. Zeke’s Coffee is a successful business and it is bound to continue being successful due to its expansive clientele. A successful business is a reflection of an established solid market.  Zeke’s Coffee has a great market and the customers are loyal to it since they have been able to roast and produce high quality coffee. The success of the company is intend to create will be based upon the success of the previous owner and therefore change will be gradual to ensure customer, supplier and staff relationships contributing to the current success are maintained. The business secrets leading to the success of the current business are with the current owner and therefore I will need to keep him close.

The current owner will be on board for a period of time to offer consultation and advice on how business is run and how they have been able to counter the challenges expected or experienced in the market. During this time, the current owner will introduce me to the suppliers, the customers and any other person that contributes to the success of the firm (Zimmerer& Thomas, 2006). The current business owner has already established credit with suppliers, there is a big chance that the business already has a proven track record, this track record is with the seller, with the owner on board or with reference from the owner I can get leverage in attaining better trade credit terms (Scarborough et. al, 2012).The contact created between me and the suppliers by the seller will benefit both of us as the suppliers will benefit from my continued purchases while I get what they provide to the firm.

Limited Liability form of ownership is the most appropriate for the firm. Limited Liability Company ownership hybrid structure features elements of a corporation and a partnership. Due to its many advantages and the flexibility that comes with it, this form of ownership the method of ownership has gained popularity over the years compared to the other forms of ownership. This form of ownership puts the owners in access of the benefit from S corporations yet they don’t get subjected to the restrictions imposed on the S corporations (Scarborough et. al, 2012). LLC is a new form of business ownership with a number of advantages over corporations and partnerships. One of its main advantages over partnerships is that owner’s liabilities for obligations and debts, is limited to investment in finances.

The owners of members of a limited liability company can also play roles in the management of the company unless the agreements and organization articles stipulate otherwise. The case of Zeke’s Coffee will be a Single Member Limited Liability Company(SMLLC). IRS rules contain that a Single Member Limited Liability Company be disregarded for tax purposes as long as they have not asked to get corporation treatment. As such, the income and expenses from such a business is reported as an attachment to form 1040 (individual) on Schedule C. These reasons justify the need for the company being an LLC considering the financial position I am in as the owner (Zimmerer& Thomas, 2006). To help in the management of the firm I will have one manager. The general manager will be responsible for the running of the business in my absence. The general manager will be atrustworthy yet experienced one in business management and service provision therefore ensuring efficient running of the firm and customer satisfaction.

Business Plan

Executive summary

Zeke’s Coffee is a DC based Single Member Limited Liability Company. The company is located in Woodridge neighborhood in the District of Colombia between Rainier and Brookland. It has coffee roasting technology that produces excellent quality and tasty coffee beans including but not limited to various espressos, iced, nitro, organically grown teas. Apart from the supply to various markets, shops, stores and restaurants, the company also boasts a chain of comfy fine coffee shops that offer a conducive environment for study and relaxation (Zimmerer& Thomas, 2006).

Description of Business

Zeke’s Coffee cleverly combines postmodern looks, warm colors and excitingtechnology that serves as a community’s source of serenity, relaxation and socialization. The shops are the one stop spots for exceptional beverages and warm comfy surrounding that act as the sooth away from the bustle and hassles if the day. The spots are about community; they act as spots where community can reconnect and contribute to achievement of a common goal (Zimmerer& Thomas, 2006).

Marketing

Zeke’s Coffee Shops are about events and art. There is a host of poet sessions, karaoke, music and art presentations. Beyond that, the environment is child friendly and Wi-Fi, games and television act as a free supplement to the excellent products and services. Zeke’s Coffee shops are about great tasting and healthysnacks and beverages.Their quality based roasted variety of coffees blends will serve as a great attraction for customers. Adverts in news papers and the flyers will still play a major role in introducing the shop chains and expanding the market.

Competition

There are a number of companies competing with Zeke’s Coffee but Zeke’s Coffee has one great advantage over all of them. Zeke’s Coffee is not just a shop or restaurant. They are a coffee roaster and supplier and the varieties they produce have been accepted in the market(Zeke’s Coffee, n.d). They have a strong brand that is playing a major role in the market.The shops are bound to be successful since the customers will be getting the beverages from the roaster therefore having more confidence in Zeke’s Coffee shops compared to the competing shops serving coffee roasted and supplied by Zeke’s Coffee.

My business

Operation hours – Monday –o Saturday from 7 a.m to 9 p.m. • Rent $500.00 a month

  • Employee salary $1,500 a month
  • Supplies and stock $4,000 a month
  • Currently the business makes a profit of about $2,000 monthly

Personnel: There will be three employees; the owner and 2 hired helpers

All the three employees will be given medical cover

  • Property and business insurance $500.00 and $250 respectively monthly

Financial Data

  • Loan application to purchase the store $80,000

The café already has all the necessary tools to ensure its functionality.

Balance Sheet

  • Seller seems to have cleared all debt over the previous financial period.

Three year summary

  • Seller will give financial data relating to the past 3 years
  • Seller will also provide evidence of all transactions conducted over the past month and proof of payment of taxes.
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