Starbucks
Project Business
91L Fall
2013
The goal of
this project is to come up with an estimate of how much profit a local
Starbucks store, on the corner of McKee and Capitol, will make in an average
month. The coffee shop at McKee and Capitol is open 18.5 hours a week MF, 18
hours on Saturdays and 17.5 hours on Sundays. The minimum wage is $10 per hour.
To solve this
problem, you will need to come up with several estimates. I’ve given you
some pointers on how to find the key numbers.
·
An
estimate of the total sales revenue (Gross Revenue) per month
Multiply the number of customers times average amount purchases using data in this Excel file. These are actual numbers, not estimates. http://bus91L.altervista.org/Data/Copy%20of%20coffeecustomers.xlsx
·
An
estimate of the Ingredient costs per month (cost of goods sold.)
·
An
estimate of the Net Revenue (gross revenue minus ingredient costs.) per month.
This is a simple Excel calculation. No research is necessary,
·
An
estimate of the payroll cost per month.
a.
You
could use the number of hours open per day times Staffing levels per hour times
Pay rates plus Benefit costs.
b.
Then
multiply the total by 30 to get a monthly cost.
For staffing
levels you could stop at the coffee shop at different times during the day and
count how many employees are working. Or you could assume that the number of
employees working would be based on the average number of customers they would
expect to serve. For example every hour with 16 or more customers would need
four employees, from 1015 customers would require three employees, under 10
customers would need two employees. Any reasonable idea is ok.
http://www.glassdoor.com/Salary/StarbucksCaliforniaSalariesEI_IE2202.0,9_IL.10,20_IS2280.htm
·
An
estimate of the operating expenses per month.
a.
You
can use ratios from a 10K report. Here’s the Starbucks website
b.
http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irolreportsannual
c.
You’re
looking for the Consolidated Statement of Earnings. You’ll find it on
page 50 of the 2012 report, on page 43 of the 20111 report, and page 39 of the
2010 report. I gave you two older sets of numbers. You might want to find some
more recent numbers and take an average over 3 or 4 years.
·
An
estimate of the monthly profit (Earnings Before
Interest and Taxes.)
a.
Net
revenue minus payroll costs and minus operating expenses. This is an Excel
calculation. No research is necessary.
http://bus91L.altervista.org/Data/Copy%20of%20coffeecustomers.xlsx
Deliverables
1. Onepage project report, in Word, describing the methods or
resources your team will use to come up with the estimates. Due date: The
seventh week of class. This piece of the project is worth 5 points. Include the
names of all team members on the report.
What I'm
looking for is an explanation of how your team will estimate the numbers. You
will have to do some research on your own.
2. Excel
Workbook showing your estimates, calculations, and conclusions. Due date: The
ninth week of the class. This piece of the project is worth 5 points. Include
the names of all team members on the report.
Team
members 
Member 1 

Member 2 

Member 3 

Member 4 
Customers per
hour 

Hours open
per day 
18.57 
Customers
per day 

Days open
per month 
30 
Customers
per month 

Average
purchase 
$ 
Monthly
revenue 
$ 
Cost of
Goods Sold as a percent of revenue 
% 
Cost of
Goods sold in dollars 
$ 
Net Profit
on sales 
$ 
Payroll Cost
in dollars. (Include a table in
the worksheet showing the calculation,) 
$ 
Benefits
costs as a percent of payroll 
% 
Total
benefit costs in dollars 
$ 
Total
Payroll + benefits in dollars 
$ 
Other
Expenses as a percent of revenue 
% 
Other Expenses
in dollars 
$ 
Net Profit 
$ 