De La Salle Araneta University

College of Business












Business Plan
Business Policies and Strategies

Bajamonde, Ralph Jordan A.
Dalangin, Loren Paul I.
Papa, Kimberly O.

To:
Dr. Nelson A. Layague































This Business Plan is a Partial Fulfillment for the Requirement in Business
Policies and Strategies. A similarity to any business is just coincidence thus we are not
reliable. The name is purely made up of our group as we see it as our future business.
In case, the name exists, we do not intend to replace that so. The timeline is year 2020


since we think its our right time to build a business. Data used here are based on the
data from related industry. The amounts and statistics/ surveys are just estimation
and the names, place and establishments used are for presentation purposes only.
Executive Summary
Caf-Diem coffee bar is determined to become a daily necessity for local coffee
addicts, a place to dream of as you try to escape the daily stresses of life and just
a comfortable place to meet your friends or to read a book, all in one. With the growing
demand for high-quality gourmet coffee and great service, Caf-Diem will capitalize on
its proximity to De La Salle Araneta University campus to build a core group of repeat
customers. Caf-Diem will offer its customers the best prepared coffee in the area that
will be complimented with pastries, as well as free books that its patrons can read to
enjoy their visit.
The company will operate a 1,000 square feet coffee bar within a walking
distance from De La Salle Araneta University campus. The owners have secured this
location through a three-year lease with an option for extending. They have also
provided P970,000 of the required P1,000,000 start-up funds. The remaining capital will
be obtained through BDO (Banco De Oro) commercial loans.
The company is expected to grow sales revenue from P584,000 in FY2020 month
one to P706,000 in month three. As Caf-Diem will strive to maintain a 65% gross profit
margin and reasonable operating expenses, it will see net profits grow from P100,000 to
P125,000 during the same period.








Php0
Php100,000
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Php400,000
Php500,000
Php600,000
Php700,000
Month 1 Month 2 Month 3
Highlights
Sales
Gross Margin
Net Profit





1.1 Objectives
Caf-Diem's objectives for the first year of operations are:
Become as the "Best New Coffee Bar in the area".
Turn in profits from the first month of operations.
Maintain a 65% gross margin.

1.2 Keys to Success
The keys to success will be:
Store design that will be both visually attractive to customers, and designed for
fast and efficient operations.
Employee training to insure the best coffee preparation techniques.
Marketing strategies aimed to build a solid base of loyal customers, as well as
maximizing the sales of high margin products, such as espresso drinks.

1.3 Vision Mission Statement
Caf-Diem will make its best effort to create a unique place where customers
can socialize with each other in a comfortable and relaxing environment while enjoying
the best brewed coffee or espresso and pastries. We will be in the business of helping
our customers to relieve their daily stresses by providing piece of mind through great
ambience, convenient location, friendly customer service, and products of consistently
high quality. Caf-Diem will invest its profits to increase the employee satisfaction while
providing stable return to its shareholders.








Company Summary
Caf-Diem, sells coffee, other beverages and snacks in its 1,000 square feet
premium coffee bar located near De La Salle Araneta University campus. Caf-Diem's
major investors are Ralph Jordan Bajamonde and Loren Paul Dalangin who cumulatively
own over 70% of the company. The start-up loss of the
company is assumed in the amount of P374,600.

Description:
Caf-Diem means coffee shop for the day. Caf-
Diem logo represents the main product that the company
serves and distributes, which a warm, good-tasting coffee.
The different shades of brown represent the warm feeling
of having a cup of coffee. The crescent arc and little circles
represent different holidays and events that are worth having a cup of coffee. The three
smoke represent quality, aroma and good coffee. We used the tagline Seize the Day
because it sounds like the company name in Latin which is Carpe Diem. We want our
customers to indulge all the goodness in every sip they take and to remember the good
things that will give a warm feeling.

2.1 Company Ownership
Caf-Diem is registered as a Small-Medium Entity in the Security for Exchange
and Commissions. Ralph Jordan Bajamonde owns 51% of the company. His colleague,
Loren Paul Dalangin, as well as Kimberly Papa and other investors hold minority stakes
in Caf-Diem.

2.2 Start-up Summary
Seize the Day


The start-up expenses include:
Legal expenses for obtaining licenses and permits as well as the accounting
services totaling P28,000.
Marketing promotion expenses for the grand opening of Caf-Diem in the
amount of P35,000 and as well as flyer printing (2,000 flyers at P1.80 per copy)
for the total amount of P3,600.
Consultants fees of P15,000 paid to JavaScript Espresso Services for the help with
setting up the coffee bar.
Insurance (general liability, workers' compensation and property casualty)
coverage at a total premium of P50,000.
Pre-paid rent expenses for one month at P150 per square feet in the total
amount of P150,000.
Premises remodeling in the amount of P73,000.
Other start-up expenses including stationery (P5,000) and phone and utility
deposits (P15,000).
The required start-up assets of P625,400 include:
Operating capital in the total amount of P68,303, which includes employees and
owner's salaries for the first two months and cash reserves for the first three
months of operation (approximately P14,400).
Start-up inventory of P33,027, which includes:
o Coffee beans (12 regular brands and five decaffeinated brands) P16,000
o Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc.
P17,900
o Retail supplies (napkins, coffee bags, cleaning, etc.) - P11,840
o Office supplies P3,287
Equipment for the total amount of P524,070:
o Espresso machine - P60,000
o Coffee maker - P9,000
o Coffee grinder - P2,000


Php0
Php100,000
Php200,000
Php300,000
Php400,000
Php500,000
Php600,000
Php700,000
Php800,000
Php900,000
Php1,000,000
Expenses Assets Investment Loans
Start-up
o Food service equipment (microwave, toasters, dishwasher, refrigerator,
blender, etc.) P180,000
o Storage hardware (bins, utensil rack, shelves, food case) - P33,720
o Counter area equipment (counter top, sink, ice machine, etc.) P19,500
o Serving area equipment (plates, glasses, flatware) - P30,000
o Store equipment (cash register, security, ventilation, signage) - P130,750
o Office equipment (PC, fax/printer, phone, furniture, file cabinets)
P53,600
o Other miscellaneous expenses P5,500
Funding for the company comes from two major sources--owners' investments
and bank loans. Two major owners, Ralph Jordan Bajamonde and Loren Paul Dalangin,
have contributed P510,000 and P340,000 respectively. All other investors have
contributed P120,000, which brings the total investments to P970,000. The remaining
P30,000 needed to cover the start-up expenses and assets came from the two bank
loans--a one-year loan in the amount of P10,000 and a long-term (five years) loan of
P20,000. Both loans were secured through BDO. Thus, total start-up loss is assumed in
the amount of P374,600.
The following chart and table summarize the start-up assumptions.













Start-up Requirements
Start-up Expenses
Legal P28,000
Stationery etc. P5,000
Brochures P3,600
Consultants P15,000
Insurance P50,000
Rent P150,000
Remodeling P73,000
Other P50,000
Total Start-up Expenses P374,600
Start-up Assets
Cash Required P68,303
Start-up Inventory P33,027
Other Current Assets P0
Long-term Assets P524,070
Total Assets P625,400
Total Requirements P1,000,000


Start-up Funding
Start-up Expenses to Fund P374,600
Start-up Assets to Fund P625,400
Total Funding Required P1,000,000
Assets
Non-cash Assets from Start-up P557,097
Cash Requirements from Start-up P68,303
Additional Cash Raised P0
Cash Balance on Starting Date P68,303
Total Assets P625,400
Liabilities and Capital
Liabilities
Current Borrowing P10,000
Long-term Liabilities P20,000
Accounts Payable (Outstanding Bills) P0
Other Current Liabilities (interest-free) P0
Total Liabilities P30,000
Capital
Planned Investment
Ralph Jordan Bajamonde P510,000
Loren Paul Dalangin P340,000
All other investors (including Kimberly Papa) P120,000
Additional Investment Requirement P0
Total Planned Investment P970,000
Loss at Start-up (Start-up Expenses) (P374,600)
Total Capital P595,400
Total Capital and Liabilities P625,400



2.3 Company Locations and Facilities
Caf-Diem coffee bar will be located on the ground floor of a commercial
building in Victoneta Ave., Malabon City. The company has secured a one-year lease of
the vacant 1,200 square feet premises previously occupied by a beauty salon. The lease
contract has an option of renewal for three years at a fixed rate that Caf-Diem will
execute depending on the financial strength of its business. The floor plan will include a
200 square feet back office and a 1000 square feet coffee bar, which will include a
seating area with 10 tables, a kitchen, storage area and two bathrooms. The space in the
coffee bar will be approximately distributed the following way--550 square feet (i.e.,
55% of the total) for the seating area, 260 square feet (26%) for the production area,
and the remaining 190 square feet (19%) for the customer service area.This property is
located in a commercial area within a walking distance from De La Salle Araneta
University campus beside of the Police Station of Araneta Village. The commercially
zoned premises have the necessary water and electricity hookups and will require only
minor remodeling to accommodate the espresso bar, kitchen and storage area. The
coffee bar's open and clean interior design with modern wooden decor will convey the
quality of the served beverages and snacks, and will be in-line with the establishment's
positioning as an eclectic place where people can relax and enjoy their cup of coffee.
The clear window displays, through which passerby will be able to see customers
enjoying their beverages, and outside electric signs will be aimed to grab the attention
of the customer traffic.
Total Funding P1,000,000


Caf-Diem


























Products
Caf-Diem will offer its customers the best tasting coffee beverages in the area.
This will be achieved by using high-quality ingredients
and strictly following preparation guidelines. The store
layout, menu listings and marketing activities will be
focused on maximizing the sales of higher margin
espresso drinks. Along with the espresso drinks,
brewed coffee and teas, as well as some refreshment
beverages, will be sold in the coffee bar. For those who
want their coffees made at home, Caf-Diem will sell
coffee beans in special order. Caf-Diem will also offer
its clients pastries, small salads and sandwiches.









Patries and Salads: P75 - P150
Beverages: P100 - P200
Special Order Coffee Beans


3.1 Product Description
The menu of the Caf-Diem coffee bar will be built around espresso-based coffee
drinks such as lattes, mochas, cappuccinos, etc. Each of the espresso-based drinks will
be offered with whole, skimmed, or soy milk. Each of these coffee beverages is based on
a 'shot' of espresso, which is prepared in the espresso machine by forcing heated water
through ground coffee at high pressure. Such espresso shots are combined with
steamed milk and/or other additives like cocoa, caramel, etc., to prepare the espresso-
based beverages. Proper preparation techniques are of paramount importance for such
drinks. A minor deviation from the amount of coffee in the shot, the size of the coffee
particles, the temperature of milk, etc., can negatively affect the quality of the prepared
drink.

3.2 Sales Literature
Two thousand flyers will be distributed in the adjacent neighborhood, on the
University campus, at the malls and in the selected office buildings within two weeks
prior to the opening of Caf-Diem. Subsequently, free postcards with Caf-Diem
endorsement will be printed to increase the company visibility among the patrons.














Market Analysis Summary
Philippine coffee consumption has shown steady growth, with gourmet coffee
having the strongest growth. Coffee drinkers in the Metro Manila are among the most
demanding ones. They favor well-brewed gourmet coffee drinks and demand great
service. Potrero, Malabon with its liberal and outgoing populace will be a great place for
coffee establishments. Caf-Diem will strive to build a loyal customer base by offering a
great tasting coffee in a relaxing environment of its coffee bar located close to the
bustling De La Salle Araneta Univesity campus.

4.1 Market Segmentation
Caf-Diem will focus its marketing activities on reaching the University students
and faculty, people working in offices located close to the coffee bar and on
sophisticated teenagers. Market research shows that these are the customer groups
that are most likely to buy gourmet coffee products. Since gourmet coffee consumption
is universal across different income categories and mostly depends on the level of
higher education, proximity to De La Salle Araneta University will provide access to the
targeted customer audience.
The chart and table below outline the total market potential (in number of customers)
of gourmet coffee drinkers.




Year 1 Year 2 Year 3 Year 4 Year 5
Potential
Customers
Growth
Students and
Faculty
2% 18,000 18,360 18,727 19,102 19,484
Teenagers 1% 3,000 3,030 3,060 3,091 3,122
Office workers 2% 2,000 2,160 2,323 2,489 2,659
Other 0% 5,000 5,000 5,000 5,000 5,000
Total 1.63% 28,000 28,550 29,110 29,682 30,265

4.2 Target Market Segment Strategy
Caf-Diem will cater to people who want to get their daily cup of great-tasting
coffee in a relaxing atmosphere. Such customers vary in age, although our location close
to the University campus means that most of our clientele will be college students and
faculty. Market research shows that these are discerning customers that gravitate
towards better tasting coffee. Furthermore, a lot of college students consider coffee
bars to be a convenient studying or meeting location, where they can read or meet with
peers without the necessity to pay cover charges. For us, this will provide a unique
possibility for building a loyal client base since there were no coffee bars near the area.

4.2.1 Market Needs
General trend toward quality among Philippine consumers definitely plays an
important role in the recent growth in gourmet coffee. Additionally, such factors as
desire for small indulgencies, for something more exotic and unique, provide a good
selling opportunity for coffee bars.






4.3 Industry Analysis
Coffee consumption has shown a steady 2.5% growth rate in the Philippines over
the last decade. In 2010, total sales of coffee were approximately P7.5 billion with
gourmet coffee representing 33% (or P2.5 billion) of that. The retail coffee industry is
flourishing in Metro Manila. The local climate, with a long rainy season, is very
conducive for the consumption of hot non-alcoholic beverages. At the same time, hot
dry summers drive people into cafes to order iced drinks. Further, coffee has really
become a part of the lifestyle in the Metro Manila. Its discerning coffee drinkers are in
favor of well-prepared, strong coffee-based beverages, which they can consume in
a relaxing environment.

4.3.1 Competition and Buying Patterns
Competition
According to statistics, Metro Manila had 45 established snack & non-alcoholic
beverage bars with total sales of P14.2 million. Among other establishments that offer
coffee drinks to their customers are most of Manila's limited- and full-service
restaurants. Caf-Diems direct competitors will be other beverage bars located near De
La Salle Araneta University campus. These include Ersao, Bubblicitea, Aryanz, and other
Food service establishments that offer coffee and other beverages. Ersao will definitely
be one of the major competitors because of its strong financial position and established
marketing and operational practices. However, despite of Ersao's entrenched market
position, many customers favor smaller, independent establishments that offer cozy
atmosphere and good beverage at affordable prices. Bubblicitea is a good example of
such competition. We estimate that Ersao holds approximately 35% market share in
that neighborhood, Bubblicitea appeals to 25% of customers, Aryanz caters to another
10%, with the remaining market share split among other establishments. Caf-Diem will
position itself as a unique coffee bar that not only offers the best tasting coffee and
pastries but also provides home-like, cozy and comfortable environment, which


established corporate establishment lack. We will cater to customers' bodies and minds,
which will help grow our market share in this competitive market.
Buying Patterns
The major reason for the customers to return to a specific coffee bar is a great
tasting coffee, quick service and pleasant atmosphere. Although, as stated before,
coffee consumption is uniform across different income segments, Caf-Diem will price
its product offerings competitively. We strongly believe that selling coffee with a great
service in a nice setting will help us build a strong base of loyal clientele.




















Strategy and Implementation Summary
Caf-Diem's marketing strategy will be focused at getting new customers,
retaining the existing customers, getting customers to spend more and come back more
often. Establishing a loyal customer base is of a paramount importance since such
customer core will not only generate most of the sales but also will provide favorable
referrals.

5.1 Competitive Edge
Caf-Diem will position itself as unique coffee bar where its patrons can not only
enjoy a cup of perfectly brewed coffee but also spend their time in an ambient
environment. Comfortable sofas and chairs, dimmed light and quiet relaxing music will
help the customers to relax from the daily stresses and will differentiate Caf-Diem from
incumbent competitors.
STRENGTHS WEAKNESSES
Broad range of skill possessed by
the owners
Close to the university
Close to the public transport
Owner operated (lower operating
costs and more control over the
business)
Quality processes and procedures
Marketing expertise
No built in brand equity
Limited semester times (people are
only at university around 30 weeks
of the year)
No experience opening/running a
related business
Undifferentiated products or
services
High rental cost
OPPORTUNITIES THREATS
A developing market such as
internet
Ability to attract customers from
the university
Changing market tastes
Tax in product or service
Price wars with competitors


Ability to appeal to a different
target market
Ability to hire people from the
university
Ability to build brand equity

5.2 Sales Strategy
Caf-Diem baristas will handle the sales transactions. To speed up the customer
service, at least two employees will be servicing clients--while one employee will be
preparing the customer's order, the other one will be taking care of the sales
transaction. All sales data logged on the computerized point-of-sale terminal will be
later analyzed for marketing purposes.
In order to build up its client base, Caf-Diem will use banners and fliers, utilize
customer referrals and cross-promotions with other businesses in the community. At
the same time, customer retention programs will be used to make sure the customers
are coming back and spending more at the coffee bar.

5.2.1 Sales Forecast
Food costs are assumed at 25% for coffee beverages and 50% for retail beans
and pastries. Proximity to the University campus will dictate certain sales seasonality
with revenues slightly decreasing during the school vacation periods.
The chart and table below outline our projected sales forecast for a year.





Sales Forecast
Month 1 Month 2 Month 3
Sales
Coffee beverages P350,400 P385,440 P423,984
Coffee beans P87,600 P96,360 P105,996
Pastries, etc. P146,000 P160,600 P176,660
Total Sales P584,000 P642,400 P706,640
Direct Cost of Sales Month 1 Month 2 Month 3
Coffee beverages P87,600 P96,360 P105,996
Coffee beans P43,800 P48,180 P52,998
Pastries, etc. P73,000 P80,300 P88,330
Subtotal Direct Cost of Sales P204,400 P224,840 P247,324


0
10,000
20,000
30,000
40,000
50,000
60,000
Sales Monthly
Pastries, etc.
Coffee beans
Coffee beverages


Management Summary
Caf-Diem is majority-owned by Ralph Jordan Bajamonde and Loren Paul
Dalangin. Mr. Bajamonde holds a Bachelor's Degree in Accountancy from De La Salle
Araneta University. He's worked for several years as a Senior Auditor of an Accounting
Firm. Previously, he owned the RJB Model Agency, which he profitably sold four years
ago. Mr. Bajamonde has extensive business contacts in Metro Manila that he will
leverage to help his new venture succeed. Mr. Dalangin has a Bachelor's Degree in
Business Administration Major in Financial Management from the same University. For
the last five years he has worked as a manager of LPD Printing, a successful printing
office in Valenzuela City. Under Mr. Dalangin's management, the business has
consistently increased sales while maintaining a lower than average level of operating
expenses.
However, because of the investors' other commitments they will not be involved into
the daily management decisions at Caf-Diem.
Kimberly Papa will be hired to oversee all the
coffee bar operations. Two full-time baristas
will be in charge of coffee preparation. Four more part-time employees will be hired to
fulfill the staffing needs. In the second and third year of operation one more part-time
employee will be hired to handle the increased sales volume.

Sample Uniform


6.1 Management Team
A full-time manager will be hired to oversee the daily operations at Caf-Diem.
The candidate had three years of managerial experience in the definitely industry in
Metro Manila. This person's responsibilities will include managing the staff, ordering
inventory, dealing with suppliers, developing a marketing strategy and perform other
daily managerial duties. We believe that our candidate has the right experience for this
role. A profit-sharing arrangement for the manager may be considered based on the
first year operational results.

6.2 Management Team Gaps
Despite the owners' and manager's experience in the definitely industry, the
company will retain the consulting services of JavaScript Espresso Services, the
consultants who have helped to develop the business idea for Caf-Diem. This company
has over twenty years of experience in the retail coffee industry and has successfully
opened dozens of coffee bars across the Philippines. Consultants will be primarily used
for market research, customer satisfaction surveys and to provide additional input into
the evaluation of the new business opportunities.

6.3 Personnel Plan
The table below outlines the personnel needs of Caf-Diem coffee bar.

Personnel Plan
Manager P35,000 P37,800 P40,824
Baristas P50,000 P54,000 P58,320
Employees P39,600 P52,000 P56,000
Total People 7 8 8
Total Payroll P124,600 P143,800 P155,144




Business Policies and Procedures
Caf-Diem is a coffee shop devoted to preparing some of the best coffee. We
strive to bring the absolute highest quality product and service to our customer for a fair
price. Every workers should be proud to work at Caf-Diem. They should also be friendly
and knowledgeable about the types of drinks we can make. Every barista will also learn
the art of cupping and tasting coffee so that they can describe with reasonable accuracy
the coffees they serve. They will also learn the basics of roasting and levels of roast and
how they affect the flavors of a coffee. Baristas are encouraged to learn about every
aspect of their job, including blending coffees, the history of coffee, scientific facts
about coffee and even barista competitions. They must absolutely learn how to make
drinks properly. This includes adjusting the espresso grinder, tamping, pulling a shot and
frothing milk. Anyone who cannot or will not do these things cannot be a barista. In the
world of espresso crema is an indicator of excellence, of something done right and it is
the same sort of excellence we strive to bring our customer with everything we do.
Excellence, as it relates to coffee, needs to include ethical and moral issues in
addition to preparatory and service issues. No drink can be excellent if it cheats
anyone down the line from the customer to the farmer. For that reason we try to use
only natural ingredients in all of our drinks and deal with vendors that are careful about
where they source their product. This includes things such as flavored syrups and chai
and tea and other consumables but most importantly coffee. Caf-Diem makes every
effort to assure that every coffee it sells comes from a farm where the workers earn a
living wage and are treated fairly. Our resources in that regard are fairly limited but
because true crema demands it, we do our best to make sure everything from seed
to cup is how it should be.
Confidentiality Agreement
Information that pertains to Caf-Diem 's business, including all nonpublic
information concerning the Company, its vendors and suppliers, is strictly confidential


and must not be given to people who are not employed by Caf-Diem . Please help
protect confidential information - which may include, for example, trade secrets,
customer lists and company financial information - by taking the following
precautionary measures:
1. Discuss work matters only with other Caf-Diem employees who have a specific
business reason to know or have access to such information.
2. Do not discuss work matters in public places.
3. Monitor and supervise visitors to Caf-Diem to insure that they do not have access to
company information.
4. Destroy hard copies of documents containing confidential information that is not filed
or archived.
5. Secure confidential information in desk drawers and cabinets at the end of every
business day.
Your cooperation is particularly important because of our obligation to protect
the security of our clients' and our own confidential information. Use your own sound
judgment and good common sense, but if at any time you are uncertain as to whether
you can properly divulge information or answer questions, please consult a Caf-Diem
officer.
Conflict of Interest
Employees must avoid any interest, influence or relationship which might
conflict or appear to conflict with the best interests of Caf-Diem . You must avoid any
situation in which your loyalty may be divided and promptly disclose any situation
where an actual or potential conflict may exist.
Examples of potential conflict situations include:
1. Having a financial interest in any business transaction with Caf-Diem .


2. Owning or having a significant financial interest in, or other relationship with, a Caf-
Diem competitor, customer or supplier.
3. Accepting gifts, entertainment or other benefit of more than a nominal value from a
Caf-Diem competitor, customer or supplier.
Anyone with a conflict of interest must disclose it to management and remove
themselves from negotiations, deliberations or votes involving the conflict. You may,
however, state your position and answer questions when your knowledge may be of
assistance to Caf-Diem.
Anti Discrimination & Harassment
It is Caf-Diem 's policy that we will not discriminate against qualified individuals
with disabilities with regard to any aspect of their employment. Caf-Diem is
committed to complying with Disabilities Act of 1990 and its related Section 504 of the
Rehabilitation Act of 1973. Caf-Diem recognizes that some individuals with disabilities
may require accommodations at work. If you are currently disabled or become disabled
during your employment, you should contact your manager to discuss reasonable
accommodations that may enable you to perform the essential functions of your job.
Equal Opportunity Policy
Caf-Diem provides equal opportunity in all of our employment practices to all
qualified employees and applicants without regard to race, color, religion, gender,
national origin, age, disability, marital status, military status or any other category
protected by federal, state and local laws. This policy applies to all aspects of the
employment relationship, including recruitment, hiring, compensation, promotion,
transfer, disciplinary action, layoff, return from layoff, training and social, and
recreational programs. All such employment decisions will be made without unlawfully
discriminating on any prohibited basis.



Policy Prohibiting Harassment and Discrimination
Caf-Diem strives to maintain an environment free from discrimination and
harassment, where employees treat each other with respect, dignity and courtesy. This
policy applies to all phases of employment, including but not limited to recruiting,
testing, hiring, promoting, demoting, transferring, laying off, terminating, paying,
granting benefits and training.
Prohibited Behavior
Caf-Diem does not and will not tolerate any type of harassment of our
employees, applicants for employment, or our customers. Discriminatory conduct or
conduct characterized as harassment as defined below is prohibited. The term
harassment includes, but is not limited to slurs, jokes, and other verbal or physical
conduct relating to a person's gender, ethnicity, race, color, creed, religion, sexual
orientation, national origin, age, disability, marital status, military status or any other
protected classification that unreasonably interferes with a persons work performance
or creates an intimidating, hostile work environment.
Sexually harassing behavior in particular includes unwelcome conduct such as:
sexual advances, requests for sexual favors, offensive touching, or other verbal or
physical conduct of a sexual nature. Such conduct may constitute sexual harassment
when:
1. It is made an explicit or implicit condition of employment.
2. It is used as the basis for employment decisions.
3. It unreasonably interferes with an individual's work performance.
4. It creates an intimidating, hostile or offensive working environment.


The types of conduct covered by this policy include: demands or subtle pressure for
sexual favors accompanied by a promise of favorable job treatment or a threat
concerning employment.
Specifically, it includes sexual behavior such as:
1. Repeated sexual flirtations, advances or propositions.
2. Continued and repeated verbal abuse of a sexual nature.
3. Sexually related comments and joking, graphic.
54. Degrading comments about an employees appearance.
5. Displaying sexually suggestive objects or pictures.
6. Including cartoons and vulgar email messages.
7. Any uninvited physical contact or touching, such as patting, pinching or repeated
brushing against anothers body. Such conduct may constitute sexual harassment
regardless of whether the conduct is between members of management, between
management and staff employees, between staff employees, or directed at employees
by nonemployees conducting business with the Company, regardless of gender or
sexual orientation.
Harassment by Nonemployees
Caf-Diem will also endeavor to protect employees, to the extent possible, from
reported harassment by nonemployees in the workplace, including customers, clients
and suppliers.
Complaint Procedure and Investigation
Any employee who wishes to report a possible incident of sexual harassment or
other unlawful harassment or discrimination should promptly report the matter to


Kimberly Papa. If that person is not available, or you believe it would be inappropriate
to contact that person, contact another manager.
Caf-Diem will conduct a prompt investigation as confidentially as possible
under the circumstances. Employees who raise concerns and make reports in good faith
can do so without fear of reprisal; at the same time employees have an obligation to
cooperate Caf-Diem in enforcing this policy and investigating and remedying
complaints.
Any employee who becomes aware of possible sexual harassment or other illegal
discrimination against others should promptly advise Kimberly Papa or any other
appropriate member of management. Anyone found to have engaged in such wrongful
behavior will be subject to appropriate discipline, which may include termination.
Retaliation
Any employee who files a complaint of sexual harassment or other
discrimination in good faith will not be adversely affected in terms and conditions of
employment and will not be retaliated against or discharged because of the complaint.
In addition, we will not tolerate retaliation against any employee who, in good faith,
cooperates in the investigation of a complaint. Anyone who engages in such retaliatory
behavior will be subject to appropriate discipline, up to and including termination.
Training
Caf-Diem will establish proper training for all employees concerning their rights
to be free from sexual harassment and other discrimination and steps they can take to
stop it.
Employment at Will
Unless expressly proscribed by statute or contract, your employment is at will.
All Caf-Diem employees are at will, which means they may be terminated at any time
and for any reason, with or without advance notice. Employees are also free to quit at


any time. Any employment relationship other than at will must be set out in writing and
signed by Caf-Diem 's manager.
Compensation & Work Schedule
Attendance & Punctuality
Every employee is expected to attend work regularly and report to work on time.
If you are unable to report to work on time for any reason, telephone your supervisor as
far in advance as possible. If you do not call in an absence in advance, it will be
considered unexcused.
For days requested off at least two weeks notification must be given or
arrangements must be made with another employee to fill in the time missed. Kimberly
Papa must be notified of any schedule changes. Unsatisfactory attendance, including
reporting late or quitting early, may be cause for disciplinary action, up to and including
discharge.
Bonus Compensation
You may become eligible for a periodic bonus. This bonus is optional at the
discretion of management and depends upon our profitability and individual
performance and contribution.
General Pay Information
Certain deductions will be made in accordance with federal and state laws. In
addition, the Company makes available certain voluntary deductions as part of the
Companys benefits program. If an employee elects supplemental coverage under one
of the Company's benefits plans, which requires employee contributions, the
employee's share of the cost will be deducted from his or her check each pay period. If
the employee is not receiving a payroll check due to illness, injury, or leave of absence,
he or she will be required to pay the monthly cost directly to the Company.


Outside Employment
Because of Caf-Diem 's obligations to its customers, the Company must be
aware of any concurrent employment you may have to determine whether or not it
presents a potential conflict. Serving on any public or government board or commission
qualifies as employment for purposes of this policy, regardless of whether such service
is compensated. Before beginning or continuing outside employment, employees are
required to complete a questionnaire detailing the involvement with the other
employer and to obtain the written approval of their managers and . Failing to obtain
prior approval as described may be cause for disciplinary action, up to and including
termination. Employees who are on leave of absence, including FMLA leave or Workers'
Compensation leave are prohibited from having outside employment during their leave.
Overtime
General
Because of the nature of work, employees may be asked to work overtime on
weekends or holidays or additional hours during the regular workday and are expected
to comply with such requests.
Overtime compensation is paid to all nonexempt employees at one and one-half
times their straight time rate for all hours worked in excess of 40 hours per week. If you
are nonexempt, you must receive authorization from your manager before working
overtime. And after you have worked overtime, you must enter it on a timesheet by the
day after it is accrued.
Overtime pay is based on actual hours worked. Time taken for lunch or dinner is
not included as time worked for purposes of computing overtime. And time off on
holidays, sick leave, vacation leave, personal leave, training seminars or any leave of
absence will not be factored in as hours worked when calculating overtime.



Pay Schedule
Employees will be paid every other week. If the regular payday falls on a holiday,
payday will be the last regular workday before the holiday. The pay week starts at the
beginning of your shift on Monday and includes all work you perform up to the close of
business on Sunday.
A few additional facts about pay:
1. You can receive vacation pay in advance if you are taking five consecutive days, and
that check will be distributed on the last payday preceding vacation. To be paid in
advance you must notify your supervisor one week before your vacation begins so that a
check can be prepared.
2. If a paycheck is lost or stolen, notify Kimberly Papa immediately.
Performance Evaluations
Supervisors and employees are strongly encouraged to discuss job performance
and goals informally any time. Additional formal performance reviews will be conducted
to provide both supervisors and employees with the opportunity to discuss job tasks,
identify and correct weaknesses, encourage and recognize strengths, and discuss
positive, purposeful approaches for meeting goals. These formal reviews will be
conducted every three to four months.
Performance Reviews and Salary Increases
Wage reviews are conducted every three to four months for each employee, and
salary increases are based on those reviews, as well as our profitability. However, an
employee receiving a performance appraisal will not necessarily receive a salary
increase.




Time Records
All non-exempt employees must keep accurate time records by completing
timesheets or punching a time clock when entering or leaving the building, including
coming and going during lunch periods. Tampering with, falsifying or altering time cards
or punching another employee's time card will result in disciplinary action, up to and
including discharge. Failing to record work time may also result in disciplinary action.
For payroll purposes, time is rounded to the nearest of an hour.
Conduct Standards
Company Equipment and Vehicles
When using Caf-Diem property, including computer equipment or hardware,
exercise care, perform required maintenance and follow all operating instructions,
safety standards and guidelines. Notify your supervisor if any equipment or machines
appear to be damaged, defective or in need of repair. This prompt reporting could
prevent the equipment's deterioration and could also help prevent injury to you or
others. Should you have questions about the maintenance and care of any workplace
equipment, ask your supervisor.
If you use or operate equipment improperly, carelessly, negligently or unsafely,
you may be disciplined or even discharged. In addition, you may be held financially
responsible for any loss to Caf-Diem because of such mistreatment.
Company Property
Please keep your work area neat and clean and use normal care in handling
company property. Report any broken or damaged equipment to your manager at once
so that proper repairs can be made.


You may not use any company property for personal purposes or remove any
company property from the premises without prior written permission from Kimberly
Papa.
Conduct Standards & Discipline
Caf-Diem expects every employee to adhere to the highest standards of job
performance and of personal conduct, including individual involvement with company
personnel and outside business contacts.
The Company reserves the right to discipline or discharge any employee for
violating any company policy, practice or rule of conduct. The following list is intended
to give you notice of our expectations and standards. However, it does not include every
type of unacceptable behavior that can or will result in disciplinary action. Be aware that
Caf-Diem retains the discretion to determine the nature and extent of any discipline
based upon the circumstances of each individual case.
Employees may be disciplined or terminated for poor job performance, including, but
not limited to the following:
Unsatisfactory quality or quantity of work.
Repeated unexcused absences or lateness.
Failing to follow instructions or Company procedures.
Failing to follow established safety regulations.
Employees may also be disciplined or terminated for misconduct, including, but not
limited to the following:
Falsifying an employment application or any other company records or documents.
Failing to record working time accurately or recording a co-workers timesheet.
Insubordination or other refusal to perform.


Using vulgar, profane or obscene language, including any communication or
action that violates our policy against harassment and other unlawful forms of
discrimination.
Disorderly conduct, fighting or other acts of violence.
Misusing, destroying or stealing company property or another persons property.
Possessing, entering with or using weapons on company property.
Possessing, selling, using or reporting to work with alcohol, controlled substances or
illegal drugs present in the employee's system, on company property or on company
time.
Violating conflict of interest rules.
Disclosing or using confidential or proprietary information without authorization.
Violating the Companys computer or software use policies.
Being convicted of a crime that indicates unfitness for a job or presents a threat to the
Company or its employees in any way.
Dating In the Work Place
Supervisors and employees under their supervision are strongly discouraged
from forming romantic or sexual relationships. Such relationships can create the
impression of impropriety in terms and conditions of employment and can interfere
with productivity and the overall work environment.
If you are unsure of the appropriateness of an interaction with another
employee of the Company, contact Kimberly Papa for guidance. If you are encouraged
or pressured to become involved with a customer or employee in a way that makes you
feel uncomfortable and is unwelcome, you should also notify Kimberly Papa
immediately.


No customer or employee of this company has the right to subject any employee
to sexual or other unlawful harassment, including requests for sexual favors, sexual
advances, offensive touching, and any other unwanted verbal, graphic, conduct or
communications of a sexual nature. You should also be aware of, and are expected to
comply with, Caf-Diem s policyagainst sexual and other forms of illegal harassment in
the workplace.
Appropriate action, which may include a transfer or reassignment, leave of
absence, suspension or termination, will be taken against those who violate this policy.
Dress Policy
Appropriate attire is required. Suppliers and customers visit our coffee shop and
we wish to put forth an image that will make us all proud to be Caf-Diem employees.
Be guided by common sense and good taste. Specific standards may be required.
Drug and Alcohol Policy
Caf-Diem strives to maintain a workplace free of drugs and alcohol and to
discourage drug and alcohol abuse by its employees. Misuse of alcohol or drugs by
employees can impair the ability of employees to perform their duties, as well as
adversely affect our customers' and customers' confidence in our company.
Alcohol
Employees are prohibited from using or being under the influence of alcohol
while performing company business for Caf-Diem , while operating a motor vehicle in
the course of business or for any job-related purpose, or while on company premises or
a worksite.
Illegal Drugs
Caf-Diem employees are prohibited from using or being under the influence of
illegal drugs while performing company business or while on a company facility or


worksite. You may not use, manufacture, distribute, purchase, transfer or possess an
illegal drug while in Caf-Diem facilities, while operating a motor vehicle for any job-
related purpose or while on the job, or while performing company business. This policy
does not prohibit the proper use of medication under the direction of a physician;
however, misuse of such medications is prohibited.
Disciplinary Action
Employees who violate this policy may be disciplined or terminated, even for a
first offense. Violations include refusal to consent to and comply with testing and search
procedures as described.
Searches
Caf-Diem may conduct searches for illegal drugs or alcohol on company
facilities or worksites without prior notice to employees. Such searches may be
conducted at any time. Employees are expected to cooperate fully.
Searches of employees and their personal property may be conducted when
there is reasonable suspicion to believe that the employee has violated this policy or
when circumstances or workplace conditions justify such a search. Personal property
may include, but is not limited to, purses, boxes, briefcases, as well as any Caf-Diem
property that is provided for employees' personal use, such as desks, lockers, and files.
An employees consent to a search is required as a condition of employment and the
employees refusal to consent may result in disciplinary action, including termination.
Drug Testing
Caf-Diem may require a blood test, urinalysis, hair test or other drug or alcohol
screening of employees suspected of using or being under the influence of drugs or
alcohol or where other circumstances or workplace conditions justify such testing. The
refusal to consent to testing may result in disciplinary action, including termination.




Ethical and Legal Business Practices
Caf-Diem expects the highest standard of ethical conduct and fair dealing from
each employee, officer, director, volunteer and all others associated with the Company.
Our reputation is a valuable asset, and we must continually earn the trust, confidence
and respect of our suppliers, our members, our customers and our community.
This policy provides general guidance on the ethical principles that we all must
follow, but no guideline can anticipate all situations. You should also be guided by basic
honesty and good judgment, and be sensitive to others perceptions and
interpretations. If you have any questions about this policy, consult your supervisor or
manager.
Exceptions to this policy may be made only by Kimberly Papa.
You are expected to promptly disclose to the management of the company
anything that may violate this policy. We will not tolerate retaliation or retribution
against anyone who brings violations to management's attention.
Complying With Laws and Regulations
All our activities are to be conducted in compliance with the letter and spirit of
all laws and regulations. You are charged with the responsibility of understanding the
applicable laws, recognizing potential dangers and knowing when to seek legal advice.
Giving and Receiving Gifts
You may not give or receive money or any gift to or from a supplier, government
official or other organization. Exceptions may be made for gifts that are customary and
lawful, are of nominal value and are authorized in advance. You may accept meals and
refreshments if they are infrequent, are of nominal value and are in connection with
business discussions.


If you do receive a gift or other benefit of more than nominal value, report it promptly
to a member of management. It will be returned or donated to a suitable charity.
Employee Privacy and Other Confidential Information
Caf-Diem collects only personal information about employees that relates to
their employment. Only people with a business-related need to know are given access
to this information, and must authorize any release of the information to others.
Personal information, other than that required to verify employment or to satisfy
legitimate investigatory or legal requirements, will be released outside the company
only with employee approval. If you have access to any confidential information,
including private employee information, you are responsible for acting with integrity.
Unauthorized disclosure or inappropriate use of confidential information will not be
tolerated.
Accounting and Financial Reports
Caf-Diem 's financial statements and all books and records on which they are
based must accurately reflect the Company's transactions. All disbursements and
receipts must be properly authorized and recorded.
You must record and report financial information accurately. Reimbursable
business expenses must be reasonable, accurately reported and supported by receipts.
Those responsible for handling or disbursing funds must assure that all transactions are
executed as authorized and recorded to permit financial statements in accord with
Generally Accepted Accounting Principles.
Account and Customer Information
Employees are prohibited from distributing account, client, and/or customer
information to anyone, in any form, except the named account holder, client or
customer.


Compliance
Employees who fail to comply with this policy will be disciplined, which may
include a demand for reimbursement of any losses or damages, termination of
employment and referral for criminal prosecution. Action appropriate to the
circumstances will also be taken against supervisors or others who fail to report a
violation or withhold relevant information concerning a violation of this policy.
Grievances
Employees are encouraged to bring concerns, problems and grievances to
management's attention. You are also obligated to report any wrongdoing of which you
become aware to your manager or, if the situation warrants, to any Caf-Diem officer.
Progressive Discipline
Caf-Diem retains the discretion to discipline its employees. Oral and written
warnings and progressive discipline up to and including discharge may be administered
as appropriate under the circumstances.
Please note that Caf-Diem reserves the right to terminate any employee whose
conduct merits immediate dismissal without resorting to any aspect of the progressive
discipline process.
Smoking Policy
General
Smoking is prohibited inside Caf-Diem facilities. All employees, clients and
other visitors are expected to comply with this policy, and employees who violate it may
be disciplined. Should you have a question, complaint or dispute about smoking in the
workplace, contact managent.



Zero Tolerance for Workplace Violence
Caf-Diem has a zero-tolerance policy concerning threats, intimidation and
violence of any kind in the workplace either committed by or directed to our employees.
Employees who engage in such conduct will be disciplined, up to and including
immediate termination of employment. Employees are not permitted to bring weapons
of any kind onto company premises or to company functions. Any employee who is
suspected of possessing a weapon will be subject to a search at the company's
discretion. Such searches may include, but not be limited to, the employee's personal
effects, desk and workspace.
If an employee feels he or she has been subjected to threats or threatening
conduct by a coworker, vendor or customer, the employee should notify his or her
supervisor or another member of management immediately. Employees will not be
penalized for reporting such concerns.
General Employment
Employee Classifications
Employees at Caf-Diem are either full-time or part-time. The Company may on
occasion hire temporary or seasonal employees, who will not generally be eligible for
benefits. Part-time employees work fewer than 32 hours per week. Unless specifically
stated, parttime employees are not afforded any benefits other than wages; for
example, they do not accrue benefits such as sick days, vacation days, and health
insurance. All other employees are full-time.
Your supervisor will verify whether you are a full-time or part-time employee,
and also whether you are exempt or non-exempt. Exempt employees are not entitled to
overtime under the Labor Standards Act, while non-exempt employees can qualify for
this pay.



Introductory (Probationary) Period
The first 90 days of employment are an Introductory Period for both the
employee and the Company. However, during and after this period, the work
relationship will remain at will.
This time period allows you to determine if you have made the right
employment decision and for Caf-Diem to determine whether your initial work
performance meets our needs. Your manager will monitor your work performance,
attitude and attendance during this time, and be available to answer any questions or
concerns you may have about your new job.
Benefits such as time off for vacation, personal days, sick days or bereavement
leave do not accrue during this period.
The Introductory Period may be extended at management's discretion.
Safety & Emergency
Fire Safety
Every employee is responsible for recognizing potential fire dangers and taking
an active role in preventing fires. Employees are required to observe all OSHA safety
requirements and regulations. Flammable materials are to be stored in covered metal
containers. Employees should not block any fire doors, fire exits, fire extinguishers,
windows or doorways. Review the fire escape routes posted in each work area.
Safety
Caf-Diem is committed to maintaining a safe and healthy environment for all
employees. Report all accidents, injuries, potential safety hazards, safety suggestions
and health and safety related issues immediately to your manager. If you or another
employee is injured, contact your supervisor or manager immediately.


Seek help from outside emergency response agencies, if needed. Contact
information is posted on the corkboard next to the telephone. You must complete an
Employee's Claim for Worker's Compensation Benefits Form if you have an injury that
requires medical attention. If your inquiry does not require medical attention, you must
still complete a Supervisor and Employee Report of Accident Form in case medical
treatment is later needed and to ensure that any existing safety hazards are corrected.
You can obtain the required forms from . A federal law, the Occupational Safety and
Health Act, requires that we keep records of all illnesses and accidents that occur on the
job. OSHA also provides for your right to know about any health hazards which might be
present on the job.
In addition, the state Workers' Compensation Act also requires that you report
any illness or injury caused by the workplace, no matter how slight. If you do not report
an injury, you may jeopardize your right to collect workers' compensation payments as
well as health benefits.
You can get the required reporting paperwork from Kimberly Papa.
Emergency Measures (Inclement Weather)
We realize that bad weather or hazardous commuting conditions may
occasionally make it impossible for employees to report to work on time. However, you
are expected to make a diligent effort to report to work when conditions have
improved. If you determine that you are unable to report to work because of the
conditions, inform your supervisor as soon as possible. Your absence will be charged to
personal or vacation time.
If it becomes necessary to shut down the office due to weather or other
emergency, every effort will be made to notify employees. If there is a question as to
whether the office will be open, call your place of work. If there is no answer within one
hour after the normal start time, assume the office is closed.


Corporate Communications & Technology
Use of Company Communication Systems
Because Caf-Diem reserves the right to access any personal communication
without prior notice, employees should not use company systems to transmit any
messages or to access any information that they would not want a third party to hear or
see. Although incidental and occasional personal use of the company's systems is
permitted, any such personal use will be treated the same as all other communications
under this policy. However, employees are at all times prohibited from accessing or
downloading information from the Internet for personal use.
Telephone Usage
The telephone system (including voicemail) at Caf-Diem is the property of the
company and is provided for business purposes. Caf-Diem may periodically monitor
the usage of the telephone systems to ensure compliance with this policy. Therefore,
employees should not consider their conversations on the company's telephone system
to be private.
Personal Mail
All mail delivered to the company is presumed to be related to company
business. Mail sent to you at the company will be opened by the office and routed to
your department. If you do not wish to have your correspondence handled in this
manner, please have it delivered to your home.
Employee Benefits
Worker's Compensation
Caf-Diem provides insurance to compensate for any illness or injury an
employee might suffer while working on company premises, traveling on official
company business, or attending an activity officially sponsored by the Company. If you


become ill or injured, please get medical attention at once. You must also report the
details to your supervisor immediately. And you must complete a report for every injury,
no matter how small, to keep the coverage in force and to get any benefits or other
compensation to which you may be entitled


























Financial Plan
Caf-Diem will capitalize on the strong demand for high-quality gourmet coffee.
The owners have provided the company with sufficient start-up capital. With successful
management aimed at establishing and growing a loyal customer base, the company will
see its net worth doubling in two months. Caf-Diem will maintain a healthy 65% gross
margin, which combined with reasonable operating expenses, will provide enough cash
to finance further growth.

8.1 Important Assumptions
General Assumptions
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

8.2 Projected Cash Flow
As the chart and table below present, the company will maintain a healthy cash
flow position, which will allow for timely debt servicing and funds available for future
development.






Php0
Php50,000
Php100,000
Php150,000
Php200,000
Cash
Net Cash Flow
Cash Balance


Pro Forma Cash Flow
Month 1 Month 2 Month 3
Cash Received
Cash from Operations
Cash Sales P584,000 P642,400 P706,640
Subtotal Cash from Operations P584,000 P642,400 P706,640
Additional Cash Received
Sales Tax, VAT, HST/GST Received P0 P0 P0
New Current Borrowing P0 P0 P0
New Other Liabilities (interest-free) P0 P0 P0
New Long-term Liabilities P0 P0 P0
Sales of Other Current Assets P0 P0 P0
Sales of Long-term Assets P0 P0 P0
New Investment Received P0 P0 P0
Subtotal Cash Received P584,000 P642,400 P706,640
Expenditures Month 1 Month 2 Month 3
Expenditures from Operations
Cash Spending P124,600 P143,800 P155,144
Bill Payments P327,865 P388,715 P420,945
Subtotal Spent on Operations P452,465 P532,515 P576,089
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out P0 P0 P0
Principal Repayment of Current
Borrowing
P3,300 P3,300 P3,300
Other Liabilities Principal Repayment P0 P0 P0
Long-term Liabilities Principal
Repayment
P0 P3,585 P3,961
Purchase Other Current Assets P0 P0 P0


Purchase Long-term Assets P0 P2,000 P2,000
Dividends P0 P0 P0
Subtotal Cash Spent P455,765 P541,400 P585,350
Net Cash Flow P128,235 P101,000 P121,290
Cash Balance P195,358 P296,358 P417,648


8.3 Key Financial Indicators













8.4 Break-even Analysis
With average monthly fixed costs of P20,300 in FY2020 and an average margin of
65%, Caf-Diems break-even sales volume is around P31,300 per month. As shown
further, the company is expected to generate such sales volume from the out start.



Break-even Analysis
Monthly Revenue Break-even P31,247
Assumptions:
Average Percent Variable Cost 35%
Estimated Monthly Fixed Cost P20,311


8.5 Projected Profit and Loss
Month 1 projected sales of P584,000 in FY2020 translate into P254.00 of sales
per square foot, which is in line with the industry averages for this size of coffee bar.
Overall, as the company gets established in the local market, its net profitability
increases from 17.06% in Month 1 to 17.63% in Month 3. The table below outlines the
projected Profit and Loss Statement for FY2020 (Month 1 3).




(Php25,000)
(Php20,000)
(Php15,000)
(Php10,000)
(Php5,000)
Php0
Php5,000
Php10,000
Php15,000
Php20,000
Break-even Analysis


Pro Forma Profit and Loss
Month 1 Month 2 Month 3
Sales P584,000 P642,400 P706,640
Direct Cost of Sales P204,400 P224,840 P247,324
Other P0 P0 P0
Total Cost of Sales P204,400 P224,840 P247,324
Gross Margin P379,600 P417,560 P459,316
Gross Margin % 65.00% 65.00% 65.00%
Expenses
Payroll P124,600 P143,800 P155,144
Sales and Marketing and Other
Expenses
P25,800 P27,600 P31,000
Depreciation P5,400 P5,500 P5,500
Rent P48,400 P52,800 P52,800
Rent P6,000 P6,000 P6,000
Maintenance P5,840 P6,424 P7,066
Utilities/Phone P9,000 P9,500 P10,000
Payroll Taxes P18,690 P21,570 P23,272
Other P0 P0 P0
Total Operating Expenses P243,730 P273,194 P290,782
Profit Before Interest and Taxes P135,870 P144,366 P168,534
EBITDA P141,270 P149,866 P174,034
Interest Expense P2,821 P2,326 P1,618
Taxes Incurred P33,740 P35,510 P42,424
Net Profit P99,308 P106,530 P124,491
Net Profit/Sales 17.00% 16.58% 17.62%




8.6 Projected Balance Sheet
The company's net worth is expected to increase from approximately P212,000
by the end of FY2020 Month 1 to approximately P443,000 in Month 3. The table below
summarizes the projected balance sheets for this period.
Pro Forma Balance Sheet
Month 1 Month 2 Month 3
Assets
Current Assets
Cash P195,358 P296,358 P417,648
Inventory P21,175 P23,293 P25,622
Other Current Assets P0 P0 P0
Total Current Assets P216,533 P319,651 P443,270
Long-term Assets
Long-term Assets P59,170 P61,170 P63,170
Accumulated Depreciation P5,400 P10,900 P16,400
Total Long-term Assets P53,770 P50,270 P46,770
Total Assets P270,303 P369,921 P490,040
Liabilities and Capital
Current Liabilities
Accounts Payable P31,974 P31,947 P34,836
Current Borrowing P6,700 P3,400 P100
Other Current Liabilities P0 P0 P0
Subtotal Current Liabilities P38,674 P35,347 P34,936
Long-term Liabilities P20,000 P16,415 P12,454
Total Liabilities P58,674 P51,762 P47,390
Paid-in Capital P140,000 P140,000 P140,000
Retained Earnings (P27,680) P71,628 P178,159
Earnings P99,308 P106,530 P124,491
Total Capital P211,628 P318,159 P442,650


Total Liabilities and Capital P270,303 P369,921 P490,040
Net Worth P211,628 P318,159 P442,650

8.7 Business Ratios
The table below outlines the company's business ratios. The last column
represents industry average business ratios for Specialty Eating Places (SIC 5812).

Ratio Analysis
Month 1 Month 2 Month 3 Industry
Profile
Sales Growth 0.00% 10.00% 10.00% 7.60%
Percent of Total Assets
Inventory 7.83% 6.30% 5.23% 3.60%
Other Current Assets 0.00% 0.00% 0.00% 35.60%
Total Current Assets 80.11% 86.41% 90.46% 43.70%
Long-term Assets 19.89% 13.59% 9.54% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 14.31% 9.56% 7.13% 32.70%
Long-term Liabilities 7.40% 4.44% 2.54% 28.50%
Total Liabilities 21.71% 13.99% 9.67% 61.20%
Net Worth 78.29% 86.01% 90.33% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 65.00% 65.00% 65.00% 60.50%
Selling, General &
Administrative Expenses
47.94% 48.47% 47.37% 39.80%
Advertising Expenses 2.26% 2.18% 2.26% 3.20%
Profit Before Interest and Taxes 23.27% 22.47% 23.85% 0.70%


Main Ratios
Current 5.60 9.04 12.69 0.98
Quick 5.05 8.38 11.95 0.65
Total Debt to Total Assets 21.71% 13.99% 9.67% 61.20%
Pre-tax Return on Net Worth 62.87% 44.64% 37.71% 1.70%
Pre-tax Return on Assets 49.22% 38.40% 34.06% 4.30%
Additional Ratios Month 1 Month 2 Month 3
Net Profit Margin 17.00% 16.58% 17.62% n.a
Return on Equity 46.93% 33.48% 28.12% n.a
Activity Ratios
Inventory Turnover 10.91 10.11 10.11 n.a
Accounts Payable Turnover 11.25 12.17 12.17 n.a
Payment Days 27 30 29 n.a
Total Asset Turnover 2.16 1.74 1.44 n.a
Debt Ratios
Debt to Net Worth 0.28 0.16 0.11 n.a
Current Liab. to Liab. 0.66 0.68 0.74 n.a
Liquidity Ratios
Net Working Capital $177,858 $284,304 $408,334 n.a
Interest Coverage 48.16 62.07 104.13 n.a
Additional Ratios
Assets to Sales 0.46 0.58 0.69 n.a
Current Debt/Total Assets 14% 10% 7% n.a
Acid Test 5.05 8.38 11.95 n.a
Sales/Net Worth 2.76 2.02 1.60 n.a
Dividend Payout 0.00 0.00 0.00 n.a



Social Responsibility
9. 1 Community
From the neighborhoods where Caf-Diem are located to those where our coffee
is grown, we are committed to making our communities stronger. Bringing people
together, inspiring change and making a difference in people's lives it's all part of
being a good neighbor. And it's a commitment rooted in the belief that we can balance
profitability and a social conscience.
9. 1 .1 Community Service
More than ever, communities are looking to the private sector to share
resources and create meaningful change. Were tapping into a passionate network of
people eager to be catalysts in their local neighborhoods.
9. 1 .2 Community Store
Through their relationships with local nonprofit organizations, these store are
helping support neighborhood revitalization efforts to improve community education,
employment, health, housing and safety.
9. 1 .3 Youth Leadership
Caf-Diem believes in developing young people to become extraordinary leaders,
by investing in the leadership skills required for the changing global economy.

9. 1 .4 Farming Communities
Were working directly with coffee, tea and cocoa farmers to develop
responsible growing methods. And were investing in their communities to ensure a
sustainable supply of these crops.





9. 1 .4 Diversity & Inclusion
Aside from extraordinary coffee, Starbucks has made a business out of human
connections, community involvement and the celebration of cultures. We are as diverse
as the communities we serve.
9. 1 .5 Create Jobs
Too many Filipino especially fresh-grad are unemployed. Create Jobs for Filipinos
gives customers, partners and businesses an opportunity to support job creation across
the country.
9.2 Green Productivity
We share commitment to the environment. Our comprehensive approach to
reducing our environmental impact means looking at all aspects of our business, how
they intersect and how we can integrate new solutions to create meaningful and
sustained change. By building more energy-efficient stores and facilities, conserving the
energy and water we use, and scaling front-of-store recycling for customers, we are
pushing ourselves to reduce the environmental footprint of our business operations.

9.2.1 Building Greener Store
By building environmentally sound store and facilities, conserving the energy and
water we use and purchasing renewable energy credits, were pushing ourselves to
reduce the environmental footprint of our operations.

9.2.1 Recycling & Reducing Waste
Were working to shrink our environmental footprint and meet the expectations
of our customers. Providing recycling in our stores and ensuring the recyclability of our
cups are two of our foremost priorities.




9.2.1 Cups & Materials
Addressing environmental challenges requires us to think beyond our company.
Were constantly looking to innovate and collaborate with like-minded organizations to
reduce our cup and packaging waste.