Describe the Investment Rationale of your product or service and include which of Brigham and Daves’ categories fit your product or service:
Replacement for maintenance of business
Replacement of existing products or market
Expansion of existing products or market
Expansion into new products or markets
Safety or environmental projects
Research and development
Long-term contract
Identify at least three Capital Investment items needed. Be sure to list amounts associated with items and why each item is needed. (For example: identify any licenses needed and costs, equipment rental/purchase, etc.)
Identify at least two Financial Assumptions: cost of materials and selling price. Discuss how you determined the costs and price.
Sample Answer
Investment Rationale: A Gourmet Coffee Food Truck
My proposed service is a gourmet coffee food truck that will operate in a major metropolitan area with a vibrant, underserved business district. The investment rationale for this venture is rooted in capitalizing on a growing market trend toward mobile, convenient food and beverage options. The goal is to provide high-quality, specialty coffee and espresso drinks to a professional clientele during peak commuting and workday hours. This business model offers a lower overhead and greater flexibility compared to a traditional brick-and-mortar cafe, allowing for a higher profit margin and the ability to test new locations based on demand.
This investment falls under Brigham and Daves' category of "Expansion into new products or markets." The new product is the high-quality, mobile coffee service, and the new market is the specific business district that lacks sufficient gourmet coffee options. We are not simply replacing an existing product, but rather introducing a novel service delivery model to a segment of the market that has an unmet demand.
Capital Investment Items
Gourmet Food Truck ($75,000): This is the single largest capital investment. A custom-built food truck is essential to house all the necessary equipment, meet health and safety regulations, and provide a professional, branded appearance. The high cost reflects the need for a specialized build-out with plumbing, electrical, and commercial-grade finishes.
Commercial-Grade Espresso Machine and Grinder ($15,000): These are core to the product offering. A commercial espresso machine is needed to produce high volumes of coffee and maintain quality, while a professional-grade grinder ensures the freshness of the beans. The investment in durable, high-capacity equipment is critical for meeting demand during busy rushes.
Licenses and Permits ($5,000): This includes a variety of legal and regulatory fees. We will need a business license, a food handling permit, a mobile food vending permit, and potentially permits for operating in specific public spaces. These items are non-negotiable and are required by law to operate the business.