A Summary of The Business Idea: Cat Café

The cat café business is based upon serving people who love cats with meals, coffee, or any meal in a comfortable where they are surrounded by trained cats to allow them to play with cats. It involves developing a detailed and thorough business plan. The name of the start-up would be Kate Cat Café business which will comprise cat training and taming to allow people who like and love cats to adopt, and for the people that want to play with cats having a relaxing moment and meal or drink. The business will be based in Ohio, United States. The focus of the business is to protect cats, train, and prepare meals for the people who come to visit and tour the cats for various reasons.

Kate Cat Café is where a customer can drink tea, or coffee, or have a meal surrounded by cats that I can feed or pet. The concept was derived from South Korea, and it is very successful in Japan. The idea is to allow people with tiny houses to be a viable and effective alignment grantees business success (Je?ková, 2018). the industry is feasible because it is a new idea that is unique and attractive to the market. It serves as an advantage and risk because the concept is new, and the business may face challenges before catching up in the market. The advantage is that the company has a specific and specialized customer base, unlike the traditional café. It makes the business unique and performs efficiently in a competitive market.

Customers

Kate Cat Café targets customers of Ohio, particularly Youths, children, tourists, and professionals living in Ohio. Kate Cat Café would be a sole proprietorship business which I will be the sole trader, with a team of volunteer staff, support from friends and family that will help in training stray cats, and preparation of a menu for clients and customers to help run the business efficiently.

The target of the business

Kate Cat Café is designed to become the best cat café in Ohio, with the potential of expanding to other states in the United States in the future. The company's goal is to attain forecasted performance over three years, as illustrated in the chart. An estimate of the stray cats in the U.S. ranges up to 70 million; I have decided to convert those undesirable animals into the most desirable ones by giving them proper training and presenting (Rattanasilpkalcharn, 2016). An estimate of the stray cats in the United States ranges up to 70 million; I have decided to train and convert those undesirable animals into the most desirable ones by giving them proper training and presenting them in her cafe in her café.

Key Fixed and Variable Costs

The fixed costs involved in starting the cat café business involve purchasing facilities and equipment utilized in running the business. The costs comprise equipment and supplies costs, startup costs, retail business expenses, software. The concept of a cat café is integrated with serving the customers with coffee, tea, snacks, salads, and meals in the surrounding they love most. Kate café will allow the adoption and sale of trained cats to the customers who seek to have cats as pets.

A Budgeted Profit Forecast for The First Year of Operation

The business has different aspects and elements that represent the operations to generate revenue for the business. The costs associated with the business are instrumental in projecting the potential performance of the business in the first financial year.

The startup expenses of Kate Cat Café capture the following.

A detailed startup is captured in the table below:

Startup Expenses

Legal

$55,300

Consultants

$0

Insurance

$32,750

Rent

$32,500

Research and Development

$32,750

Expensed Equipment

$32,750

Signs

$1,250

TOTAL START-UP EXPENSES

$187,300

Start-up Assets

$0

Cash Required

$332,500

Start-up Inventory

$32,625

Other Current Assets

$232,500

Long-term Assets

$235,000

TOTAL ASSETS

$121,875

Total Requirements

$245,000

START-UP FUNDING

$0

START-UP FUNDING

$273,125

Start-up Expenses to Fund

$11,875

Start-up Assets to Fund

$15,000

TOTAL FUNDING REQUIRED

Assets

$23,125

Non-cash Assets from Start-up

$18,750

Cash Requirements from Start-up

$0

Additional Cash Raised

$18,750

Cash Balance on Starting Date

$21,875

TOTAL ASSETS

$0

Liabilities and Capital

$0

Liabilities

$0

Current Borrowing

$0

Long-term Liabilities

$0

Accounts Payable (Outstanding Bills)

$0

Other Current Liabilities (interest-free)

$0

TOTAL LIABILITIES

$0

Capital

$0

Planned Investment

$0

Investor 1

$332,500

Other

$0

Additional Investment Requirement

$0

TOTAL PLANNED INVESTMENT

$695,000

Loss at Start-up (Start-up Expenses)

$313,125

TOTAL CAPITAL

$251,875

TOTAL CAPITAL AND LIABILITIES

$251,875

Total Funding

$255,000

A Budgeted Cash Flow for The First Year of Operation.

The business generate revenue from the operations and service delivery to customers. Key customer services that are designed to generate revenue for the Kate cat Café are diverse influencing the performance and success of the company. The chart below represents the products the business offers and the unit sales for the first year of operation.

Services for customers that I have assessed are crucial to gaining a competitive advantage in the market to ensure Kate cat café generates revenue include:

Selling Trained Cats: The primary target of Kate Cat Café is offering cat training and taming services and selling domesticated cats after training and beautiful cats to cat lovers who want to adopt them. The customers can freely play and spend time with the trained cats after paying very few charges to know which type of cat they feel the most attached to. The services generate significant revenue for the business that influences the company's performance as a whole.

Playing Temporarily: For the persons who do not have space in their homes and time to keep their lovable pet animals, the Kate cat Café business provides cats to play with by charging a little money. It serves as a source of revenue for the business.

Food & Drinks: The business integrates the food café and cat training and taming services to care for the welfare of pets and human welfare needs. The food and drinks are sold to customers to ensure they enjoy healthy meals and drinks in comfort surrounded by beautiful and well-trained cats. Kate cat café will have an assortment of salads, bread, snacks, teas, cakes, coffees, beverages, light meals, and drinks to provide our customers with a thoroughly relaxing time and energizing diet (Wang & Basso 2019).

Veterinary Services: when dealing with animals, a professional veterinarian must always be around to oversee the health aspect of the business. Kate cat café business will have an experienced vet to treat disorders, diseases, and injuries in pet animals, including cats and dogs.

The business's primary aim is to become the best in the market for the services and the most competitive industry. t

We aim to become the best and most visited cat cafe in the city. Kate cat Café’s main business targets are as follows:

·???????? Attaining a business monthly net earnings of $15,000 by the end of the first year and hit $20,000 monthly income by close of the second year and $25k per month by the end of the third year.

·???????? The business intends to balance the initial cost of the startup with earned profits by the end of the first year of operation.

Calculation Of the Breakeven Point and Margin of Safety.

Start upstarts with costs inform of initial business investments to facilitate the start of business operation. The break-even point is the point in the business operation when the business starts making profits and returns for the investors. The margin of safety is the difference between the expected profitability and the break-even point of the business based on the analysis of variable and fixed costs. The margin of safety formula is equal to current sales minus the break-even point, divided by recent sales.

The margin of safety = actual sales ? break-even sales

The break-even point is when initial investment and revenue are equal, or the profits are zero. It marks the point when the business starts to generate positive returns on investment.

Brake-Even Analysis

Monthly Units Break-even

5530

Monthly Revenue Break-even

$159,740

Assumptions:

Average Per-Unit Revenue

$260.87

Average Per-Unit Variable Cost

$0.89

Estimated Monthly Fixed Cost

$196,410

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Key Performance Indicators (KPIs) To Monitor Progress Towards Business Goals.

The performance indicators reflect the quantifiable measurements that can cause a company's overall long-term performance. It determines Kate Cat café's strategic, financial, and operational fulfillment of the business. The first computed assess the growth in terms of assets and statement of financial elements as captured in the table below compared to industry performance.

Year 1

Year 2

Year 3

Industry Profile

Sales Growth

4.35%

30.82%

63.29%

4.00%

Percent of Total Assets

4.35%

4.71%

5.80%

?9.80%

Accounts Receivable

5.61%

4.71%

3.81%

9.70%

Inventory

1.85%

1.82%

1.79%

9.80%

Other Current Assets

1.75%

2.02%

2.29%

27.40%

Total Current Assets

138.53%

150.99%

163.45%

54.60%

Long-term Assets

-9.47%

-21.01%

-32.55%

58.40%

TOTAL ASSETS

100.00%

100.00%

100.00%

100.00%

Current Liabilities

4.68%

3.04%

2.76%

27.30%

Long-term Liabilities

0.00%

0.00%

0.00%

25.80%

Total Liabilities

4.68%

3.04%

2.76%

54.10%

NET WORTH

99.32%

101.04%

102.76%

44.90%

The comparison to industry depicts Kate Cat Café is performing in a competitive environment reflected in the above percentages of assets compared to industry performance.

Sales Percentage’s

The second performance measures the company's sales performance in the sector about the industry's performance. Marketing and operating help determine the company's performance in the industry.

Percent of Sales

Sales

100.00%

100.00%

100.00%

100.00%

Gross Margin

94.18%

93.85%

93.52%

0.00%

Selling, General & Administrative Expenses

74.29%

71.83%

69.37%

65.20%

Advertising Expenses

2.06%

1.11%

0.28%

1.40%

Profit Before Interest and Taxes

26.47%

29.30%

32.13%

2.86%

The gross margin captures the significant performance of the company in terms of sales revenue. The company can generate gross margins of above 90% across the projected three financial years, which depicts a positive image of the potential performance of the business idea. The viability and performance are significant. Profits before interest and tax define that it will increase from 26.47% across the three years, which is a superior trend compared to industry performance.

Main Ratios

Year 1

Year 2

Year 3

Industry

Current

25.86%

29.39

32.92

1.63

Quick

25.4%

28.88

32.36

0.84

Total Debt to Total Assets

2.68%

1.04%

0.76%

67.10%

Pre-tax Return on Net Worth

66.83%

71.26%

75.69%

4.40%

Pre-tax Return on Assets

64.88%

69.75%

74.62%

9.00%

Net Profit Margin

19.20%

21.16%

23.12%

N.A.

Return on Equity

47.79%

50.53%

53.27%

N.A.

The business's liquidity will be evaluated using the current ratio and quick ratio, which are increasing for the three forecasted financial years. As reflected in the table above, the proportions are superior to industry ratios. The capital structure ratio is ideal for industry ratios, and net earnings and returns on equity are outstanding to industry ratios.

Recommendations based on the results of your analysis above

Based on the analysis and results above and the excel spreadsheet, Kate cat Café is a beneficial and profitable business venture that investors can explore. Investing in the business carries the potential to generate positive returns on investment. For instance, the return on equity investment de [it an increasing trend. The business profit margin is 19.20% in the first projected period and depicts a growing trend across the first three financial years, which implies the business is financially healthy.

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References

Je?ková, Z. (2018). A Business Plan for Establishing a Cat Café in Husker Hardiest.

Rattanasilpkalcharn, R. (2016). A study of factors influencing behavioral intentions to repurchase towards Cat Cafe in Thailand: a case study of Cataholic Cafe

Wang, F., & Basso, F. (2019). “Animals are friends, not food”: Anthropomorphism leads to less favorable attitudes toward meat consumption by inducing feelings of anticipatory guilt. Appetite, 138, 153-173.