BUSINESS PLANAROLIJA D.O.O.

1.INTRODUCTION
arolija d.o.o is a start up coffee roaster that will develop a fine line of coffees
and esspresos. We are currently at the idea stage as a corporation whose mission
is to bring up old world Italian traditions and recipes to meet the market need for
exclusive coffees. By the statistic of the International Coffee Organisation, BiH is
the 10th country in the world whose people consume coffee the most. That
means an average Bosnian drinks approximately 6 kilograms of coffee per year.
Considering that fact, our country is a market that consumes and demands a lot
of coffee. No one actually knows how and when was coffee discovered, though
there are lot of legends about its origin. The most common one is that coffee was
discovered by Kaldi as he noticed that his goats, after eating berries from a
certain tree, became energetic and couldn't sleep at night. After that, coffee
cultivation and trade began in the 15th century in Arabian Peninsula, and was
called 'wine of Araby'. In the 16th century, coffee was consumed in Persia, Egypt,
Syria and Turkey; and in the 17th century coffee has made its way to Europe and
so far it is consumed every day. Coffee is more than popular: it's ubiquitous. No
other beverage is as revered or respected. It can be seen in offices, during
commutes, and on kitchen counter tops worldwide.
1.1.

Basic information about coffee

Coffee is a beverage made by grinding roasted coffee beans and allowing hot
water to flow through them. Dark, flavorful, and aromatic, the resulting liquid is
usually served hot, when its full flavor can best be appreciated. Coffee is served
internationallywith over one third of the world's population consuming it in
some form, it ranks as the most popular processed beverageand each country
has developed its own preferences about how to prepare and present it. A driving
force behind coffee's global popularity is its caffeine content. Because caffeine
stimulates the cortex of the brain, people who ingest it experience enhanced
concentration. Athletes are sometimes advised to drink coffee prior to competing,
as caffeine renders skeletal muscles less susceptible to exhaustion and improves
coordination. However, these benefits accrue only to those who consume small
doses of the drug.
1.2. Worldwide consumption of coffee
Coffee is after oil, the best-selling product in the world markets, with annual
market growth rate of 2.5 percent, with production of more than eight million
tons of raw (green) coffee, or around 145 million bags. It is a job that is currently
worth more than a few tens of billions of dollars a year and employs millions of
people. At the same time, in the coffee industry each business year is different,

because the price on the shelf is primarily dictated by the quantity and quality of
fruit coffee growers in the country, and then market competition at home.
Coffee is, after water, the most popular beverage. Research shows that in the
world people drank a whopping 400 billion cups of coffee per year. It is estimated
that two out of three people consume coffee, which is an annual average of 4.8
kilograms of coffee per person.
1.3.Consumption of coffee in Bosnia and Herzegovina
The tradition of drinking coffee in Bosnia and Herzegovina is one of the oldest in
Europe (coffee consumption in BiH began back in 1522). According to a survey by
GFK agency, 64% of the population consumed coffee several times per day.
According to research, coffee isusually drunk hot and with sugar, very often with
milk. Traditional drinking coffee in Bosnia and Herzegovina resorts mostly older
population, more women (69%) than men (59%), while the age at which most
consumed 45 to 54 years (82%). Statistics show that half of the population under
45 years are more often drinking instant coffee and it is consumed more by
women.

2. DESCRIPTION OF BUSINESS
arolija d.o.o. will roast only the finest, top grade beans from a company called
Sandalj Trading Company which is based in Trieste, Italy. This company is
specialized in sourcing fine quality coffees. For almost 70 years this company has
searched for sampled and imported a vast selection of green coffees, originating
from over 30 countries around the world. Over the years this company has put
together a strong team, making it the go-to experts of fine coffees and espressos.
They have pioneered and mastered blend composition in the classical Italian style
and we strive to provide roasters and companies with the necessary expertise to
produce an unrivalled cup of coffee, a connoisseur's espresso if you may. They
have experience in along all points of the supply chain, and are here to provide
for any need in terms of coffee.
We will blend coffees that complement each other in acidity and body. Also,
packaging will be used to assure a long shelf life and our attractive and
informative labeling will be used to inform our consumers about our product. Our
concern is to be as environmentally conscious as possible, such that our package
will be recyclable. We want to have a working environment that promotes a
feeling of satisfaction and enthusiasm.
arolija" d.o.o. will target markets such as coffee shops and bars, restaurants,
bakeries, offices etc. We intend to will co-operate with many profitable
businesses who have a successful record in this type of industry and are willing to
accept new partners. work with everyone who is serious with starting a business,
usually those are established with contract where the producer and consumer
come to an agreement.

We will provide high quality coffee to discerning coffee drinkers. We will be

socially and environmentally conscious which will appeal to the same market.

3. SPACE, EQUIPMENT AND LOCATION

3.1. SPACE
We would initially need 60 square meters of workspace and a parking space for a
car. We would also need plumbing with a two bay sink and a gas hook-up, and the
ability to vent a pipe. We would require zoning for light industrial.
3.2. EQUIPMENT
We will need a machine for roasting coffee, a machine for making coffee, a
mill for coffee, a welding machine, a delivery vehicle, shelves, a computer, a
working table and a telephone. This information was obtained from our visit to a
company called Sandalj, which successfully operates in this industry for a long
time.
*Machines

-Machine for roasting coffee, service life (10-15 years), price $30000-$40000 (54
600 KM), supplying from the turkish company Topes. (ime masine, tip, oznaka)

-Machine for making coffee, service life (10-15 years), 3000 KM, supplying from
the italian company Combali.

-Mill for coffee, service life (10 years), 300 KM.

-Welding machine, service life (10 years), 400 KM.

STAVITI ISPOD SLIKA OZNAKE

3.3. LOCATION
The business will be located in Canton Sarajevo, the street name is
HivziBjelevia. The space has 60 square meters of work space, and also 20
square meters of a gallery where we considered to put our inventory. The location
has everything that we considered as necessary.

4.COSTS AND PROFIT

Our first cost in establishing our company will be registration our company to
L.L.C. (Limited Liability Company). In order to register our company to L.L.C., we
need to have 2000 KM of initial capital. Process of registration takes around 1-2
months and it costs around 700-800 KM. Our fixed costs are machines, salaries of
workers, rent, packaging. Variable costs are gas bills, electricity bills, telephone
bills, internet bills.
From the company called Sandalj Trading Company , which is based in Trieste,
Italy, we are providing raw coffee that is mixed in verified recipes. This coffee has
various certificates, 1 kg of raw coffee costs 5 Euros. Then we have to pay excise
taxes which are 1,5 KM for 1 kg of coffee, transport costs are 0,5 KM per kilo,
freight costs are 0,5 KM plus VAT. We are not obliged to pay custom taxes
because we are supplying goods from European Union. Costs for packaging are
0,5 KM for one bag of coffee.
Costs of obtaining coffee
Raw coffee from Italy

Cost in KM per 1 kg
10 KM/kg

Excise taxes
Transport costs
Freight costs
Packaging
Total costs of obtaining
coffee/kg

1.5 KM/kg
0.5 KM/kg
0.5 KM/kg + VAT
1 KM/kg
13.5 KM/kg

Costs of electricity, on the winter when the electricity is more expensive you we
pay (workplace +200 to 300 BAM). On the summer wyou e pay (workplace+100
to 200 BAM). Salaries of workers are not the same. In our company we will have 5
workers; 2 service providers, 1 driver, 1 person who will package coffee, and 1
manager of the company. Salaries for service providers will be 600 KM, salary for
driver will be 600 KM, salary for packaging person will be 600 KM, salary for
manager will be 900 KM. ( gross)
Fixed Assets
Machine for roasting
coffee
Machine for making coffee
Mill for coffee
Welding machine
Scale
TOTAL

Cost of purchase in KM
costs
54 600- 70 000 Additional
KM
3000 KMSalaries (5 workers)
300 KM
400 KM
Bills (electricity, water..)
100 KM
Protection of companies
58 400-73 800 KM logo
Renting
Registration of business
TOTAL

Cost in KM
apprx.600- 650 KM per
worker/month (3250 KM
Total)
500-900 KM
700-900 KM (paid only
once)
800KM
2000 KM (only once)
7250-7850 KM

NOTE: Only salaries, bills (electricity,

water..), renting from additional costs
stated above, are paid every month. So total monthly cost is approximitely :
3250+500+800=4550

In our case we will give all the equipment needed (esspreso machines, mill)
which cost from 2,000 to 10,000 BAM, but in order to make profit we give these
things only to customers that consume at least 20 KG of coffee in one month.
Contracts are made from 3 to 5 years,but for consumers who consume much
more than 20 KG, you can give a shorter contract. (ove masine trebamo ukljuciti
u tabelu iznad sa fixed cost kao da smo ih vec kupili, nadi cijenu i staviti u tabelu)
Onda ovdje dodati koliko smo kupili tih masina (small, medium..)
We are planning to sell our coffee for 35 KM per kilo. This price is determined by
.... of prices of competitors( they are usually selling for 40 km- npr cijena Iulius,
by that we want to differentiate our company from competitors because we are a
starter company. The import of one kilo of raw coffe is 10 BAM. Taxes are 1,5 BAM
per kilo+Transport and freightage is 1 BAM per kilo+17% of PDV. We come to a
price of nearly 20 BAM per kilo.So you have around 15 BAM of profit per
kilo.
After a while successful business we are planning to take a machine that

automatically packs a certain amount of coffee (eg 1 kg). That machine costs 15
000 KM. But by then we will perform using the scale.

4.1 DEPRECIATION OF ASSETS

1. In January 2016 we will purchase machine for roasting coffee for 54 600 KM.
The machine has an estimated service life of 15 years. We will calculate
depreciation using straight-line method. Furthermore, we will calculate
depreciation for first 5 years.
Year

AAC

DR

AD

ACC D

NBV

2016

54,600

6.66%

3,640

3640

50960

2017

54,600

6.66%

3,640

7280

47320

2018

54,600

6.66%

3,640

10920

43680

2019

54,600

6.66%

3,640

14560

40040

2020

54,600

6.66%

3,640

18200

36400

2. In January 2016, we will purchase machine for making coffee for 3000 KM. The
machine has an estimated service life of 10 years. We will calculate
depreciation using straight-line method for first 5 years.

Year

AAC

DR

AD

ACC D

NBV

2016

3000

10%

300

300

2700

2017

3000

10%

300

600

2400

2018

3000

10%

300

900

2100

2019

3000

10%

300

1200

1800

2020

3000

10%

300

1500

1500

3. Depreciation of mill for coffee, whose estimated service life is 10 years, and
purchase price 300 KM
Year

AAC

DR

AD

ACC D

NBV

2016

300

10%

30

30

270

2017

300

10%

30

60

240

2018

300

10%

30

90

210

2019

300

10%

30

120

180

2020

300

10%

30

150

150

5. COMPETITION
Our direct competitors are: Franck, Illy, Lavazza and Cremcaffe. Since arolija
would be the newest coffee roasting company, we obviously lack the name

recognition that all the other competitors enjoy. However, to our advantage, we
have learned from the the crucial importance of producing high quality products
and delivering superior service. It is not only important to produce good coffee,
but also to pay close attention to the needs of retailers and consumers. Franck,
Illy has shown us how quickly can a company expand. After bringing up coffee,
they have also brought up new products such as tea. There is hardly anyone who
didn't hear of Frank Illy, thatwise we have the goal to provide our costumers a
friendly, reliable and expedient service. We want to protect our image so we will
be discerning about the establishments with whom we will do business. arolija
plans a controlled and methodical growth process. In our growth we will be able
to integrate each new business as ours with as much attention as may be needed
without having to sacrifice to the existing accounts.
REVENUES
COSTST
GAIN/LOSS

STUDENTS:
1. ustovi Ena
2. olo Eldar
3. Mei Alen
4. Kreho Amer
5. Musi Ammar
6. Alkan Tayberk