Learn Croatian: Ne, ali jesmo spremni.

smo is the short, everyday form of the verb meaning 'we are'. However, in this sentence, the speaker wants to emphasize that they really ARE ready. To add that emphasis, you must use the full, heavy form of the verb, which is jesmo.

Could I use the short form smo right after ali if I didn't want the extra emphasis?

No, because of where it sits in the sentence. Short verb forms like smo are weak words that cannot be placed immediately after a comma or pause. Since there is a pause before ali, the verb that follows often needs to be the strong form jesmo to keep the sentence structured correctly.

Why does spremni end in the letter -i?

The verb jesmo means 'we are', which is a plural subject. Any adjective describing 'we' must also be in the plural form. The -i ending is used for masculine or mixed (male and female) groups. If the group was entirely female, they would say spremne.

Do I need to include the word for 'we' (mi) in this sentence?

No, you do not need it. In Croatian, the verb form jesmo already clearly means 'we are'. You only add the pronoun mi if you want to contrast who is ready (for example, 'they are not ready, but WE are'). Here, the emphasis is on the fact that they are ready, not on who is ready.