UPer Crust Pies will specialize in quality pies and pastries, imported frozen from the Upper Peninsula of Michigan and baked fresh every day. The premium taste, presentation and quality of our pies will not only be unique in Yubetchatown and the greater megalopolis area, but in the entire United States.
UPer Crust Pies are low in fat, free of genetically modified ingredients and made with premium ingredients. After oven baking, pies are put into warmers and held at a steady temperature to ensure rapid service and high customer satisfaction.
The company will also sell frozen pies that can be taken home and cooked in an oven or microwave. New technology in manufacturing has enabled New Zealand producers to develop a pie that can be heated by microwave in less than three minutes with the pastry remaining flaky as if it had been cooked in a convection oven for thirty minutes.
Our pies experience will be complemented by an assortment of premium salads and desserts as well as cold beverages. Savory samples will also be offered to first-time visitors.
What is a Pie?
The meat pie is a traditional old-country food consisting of savory fillings in a pastry shell. Traditional fillings include beef and cheese, steak, bacon and egg, and chicken and vegetable to name a few.
Usually eaten hot from a paper bag, with flaky golden pastry and savory fillings, the pie is unpretentious comfort food. UPer Crust Pies will bring the Upper Peninsula pie experience to the U.S. and endeavor to establish the humble meat pie as gourmet fare for Americans while bringing a taste of home to “UPers” living throughout America.
The Menu
The Classic Pie Selection (6.25 oz)
The Gourmet Pie Selection (9.5 oz)
Rolls & Savories: Sausage rolls, beef rolls, garlic and cheese rolls and small savories all wrapped in a low-fat flaky pastry.
Desserts & Fruit Pies: Low-fat lattice-top dessert pies in cherry, apple, apricot, custard, apple and a selection of cheese cakes.
Salads: Caesar Salad, Greek Salad, French Salad, Potato Salad, Fruit Salad.
Cold Beverages: Coke, Sprite, 7-Up, Carrot, Apple and Orange Juice, spring water, energy drinks.
The market we will engage in first is the downtown Yubetchatown district. Yubetchatown is centrally located in the Bigriver Valley, home to approximately 3.5 million people. It is an integral part of greater Megalopolis.
Yubetchatown is the seventh largest city in the state with a population of 84,560 and a geographic area of 29 square miles. With a growth rate of 8.5% Yubetchatown’s population is projected to grow well over 100,000 by 2008. It is anticipated that Yubetchatown will become the largest city in south Bigriver Valley.
Yubetchatown’s trade area consists of approximately 160,000 residents and is home to a diverse economic base including corporate offices, retail, industrial and manufacturing companies and one of the largest warehouse and distribution centers in North America.
The median household income in the Yubetchatown area is around $91,000 and the median age is 34 years old. Of the south Bigriver Valley population 13% are under 14, 14.5% are 15-24, 21.5 % are 25-34, 36% are 35-59 and 15% are over 60 years of age.
Demographically the UPer Crust Pie customer will come from all age and income levels of the market. Within this population we will focus on three separate groups with different needs: 15-24 year olds (including students), young adults and business people (25-34) and families with children under 14.
UPer Crust Pies intends to market to a wide customer base. However, we have defined the following groups as targeted segments that contribute to our growth projections:
The largest target market is young adults and businesspeople. Our next largest market and the one with the greatest growth potential is families with children followed by the 15-24 year-old segment.
Market Analysis | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
Potential Customers | Growth | CAGR | |||||
15-24 Year Olds | 2% | 80,662 | 82,275 | 83,921 | 85,599 | 87,311 | 2.00% |
Young Adults and Businesspeople | 3% | 122,282 | 125,950 | 129,729 | 133,621 | 137,630 | 3.00% |
Families with Children | 3% | 115,498 | 118,963 | 122,532 | 126,208 | 129,994 | 3.00% |
Total | 2.75% | 318,442 | 327,188 | 336,182 | 345,428 | 354,935 | 2.75% |
Young adults and businesspeople have the potential of providing large volume sales to the company during the peak hours of 11 a.m. to 2 p.m. The lunch business is driven by individuals. Many go out to lunch to get out of the office setting or have business meetings at lunch either in or out of the office. We will endeavor to accommodate surrounding businesses placing phone-in orders for business meetings. Satisfaction of this group will provide a vital long-term revenue stream.
Families with children are a growing population, both numerically and in their choice for convenient foods. Two-income families have less time to prepare meals so they are an easy group to market to because their lifestyle is very specific. We will aggressively target single and working mothers who tend to turn to fast and convenient food choices to accommodate family demands. By targeting this group, we not only generate a large volume of immediate business, but also create long-term customers in their children.
Our downtown location and increasing customer base will probably draw in customers outside of our targeted groups to include visitors and downtown shoppers. We believe these customers will be glad to pay a reasonable price for our products in exchange for high quality, great taste and the uniqueness they receive.
The United States Fast Food Industry
The U.S. has 277,208 fast-food outlets from coast to coast, that’s one for every 1,000 people. According to the U.S. department of Agriculture, consumption of food away from home accounted for 47% of total food expenditures in 2001, up from 45% in 1990 and 26% in 1960. The National Restaurant Association estimates that by 2010, total sales in the fast food industry will exceed $577 billion. At that time, consumers will spend 53% of every food dollar on meals, snacks and beverages away from home.
The strong demand for takeout food, prepared and packaged for busy customers to eat at home, should continue to grow solidly over the next few years, especially with a significant decline in the cost difference between dining out and cooking at home. The NPD Group, Inc.’s 2003 Consumer Spending Survey indicated the recent drop in the economy has encouraged more people to eat ‘on-the-go’ fast foods. Food on the run has now become the food of choice from executives to blue collar workers. According to Technomic Inc., a Chicago based research firm, take out sales accounted for 67% of total sales at the top 25 limited service chains.
The NPD 2003 Consumer Spending Survey also found that 18 to 34 year olds are turning towards new dining venues that are more likely to serve specialty foods like, sandwiches, Mexican wraps and home meal replacements instead of fried foods. NPD found that consumers frequenting these types of outlets are interested in higher quality food preparation and taste, better physical eating conditions and superior customer service, and are willing to pay a higher price.
Increases in income, especially when coupled with exposure to new and different foods, will stimulate Americans’ continuing quest for increased variety in their diets. Technomic Inc. suggests the most successful food companies in 2020 are likely to be those that tap most effectively into Americans’ appreciation for diversity in their lives, especially the insatiable desire for new and different food choices.
The United States Pie Industry
The U.S. Retailer’s Bakery Association stated in 2001 that bakeries will become the new springboard for successful retail meal programs. The Association believes there are unlimited opportunities for fresh pizza, quiche, pot pies, vegetable pies, soup, pasta and sandwiches.
According to the Bakery Production & Marketing Red Book, total U.S. fresh pie sales for 2003 were $204,567,600 compared to fresh pie sales in 2000 which totaled $182,602,096. Total U.S. frozen pie sales were $339,121,696 in 2003, a substantial increase when compared to 2000 sales of $141,488,000.
An estimated 70% of total pie sales in the U.S., including both frozen and fresh pies, are sweet pies. Although statistics complied by the American Institute of Baking stated that frozen pot pies contributed $68,705,000 to the total figure of $141,488,000 frozen pie sales in 2000.
An increase in consumer demand for the convenience of pot pies corresponds with U.S. consumer’s passion for meat and poultry. In 2002 total meat consumption (red meat, poultry and fish) reached 195 pounds per person, 57 pounds more than the average annual consumption in the 1950s. Each American consumed an average of 7 pounds more red meat than in the 1950s, 46 pounds more poultry and 4 pounds more fish and shellfish.
The Upper Peninsula Pie Industry
The pie is considered the national food of Michigan’s Upper Peninsula and the pie making business is a serious endeavor. Pie sales contributed substantially to the UP’s economy according to a statistics report in 2002.
UP brand Chequamegon is the present market leader in fresh pies with a 54.7% market share, well ahead of their closest competitor on 15% share. Chequamegon offers fresh single and multi-pack pies in as well as a range of sausage rolls and savories. Chequamegon also produces frozen family pies, single pies, frozen single sausage rolls and unbaked sausage rolls.
According to Rosemary Ontonagon, marketing manager for Chequamegon, frozen family pies and multi-pack pies are being used as convenient value-for-money family meal solutions. Single pies are purchased with snacking in mind, being a handy product for households to have on hand for hungry family members. Sausage rolls and savories are being used for more social occasions.
Within the restaurant and fast food industry there are several different segments:
Local Competitors
The Tintagel Pasty Company
The Tintagel Pasty Company has been operating since 1998. The company recently opened its second store, a small retail outlet on Bass Street in the heart of downtown which is supplied by their original store. The company is owned and operated by Anne Thracite, a Cornish woman with no previous baking or relevant industry experience.
Limited planning and organization have affected the company and there are no procedures or sufficient systems in place to deal with rapid expansion or substantial increases in production. The company is presently struggling to fulfill the demands of having a second retail outlet, regularly running out of product or unable to fulfill customer requests during peak times of the year. The quality of the company’s products can vary from week to week. Product is sometimes overcooked or very dry and equipment is not reliable. Product is sometimes baked twice and then sold frozen to customers in order to fulfill demands.
The company’s products include six varieties of beef pie, three varieties of Chicken pie and one vegetable pie. Pies come in Lunch size (5 inch, $3.25 to $3.75), Family size (9 inch, $10.75) and Party size (2 inch, $10.00 per dozen). There are also spinach and sausage rolls ($2.50 each) and rotational weekly specials that include, Thai Curry Chicken, Indian Butter Chicken, plain Chicken, Ham and Brie, and Beef Stroganoff. Of the customers that have entered both stores, one in five has asked for sweet pies and desserts.
All product ingredients are presently bought by the owner and purchased at locally. Beverages are out-sourced and delivered weekly by Fizzy Beverage also locally based. Cornish dry foods sold through the store are imported by the owner through her brother in Falmouth, Cornwall, U.K.
The estimated gross profit for the company after the cost of goods in 2000 was $70,185, in 2001 $69,531, 2002 $82,029, in 2003 $100,729 and in 2004 around $132,353. Shipping of frozen product accounts for around 30% of the gross profit for each year. These figures show a healthy growth rate of over 20% in the last 3 years of business. Based on income and expenses over the last five years, wages have averaged between 25-30%, cost of goods around 20% and rent around 20%.
These figures do not take into account the gross profit of the new Bass Street store which started operations in late October 2004. Gross profit after three months of business at this store was $22,730. Based on the present growth rate and an influx of tourists during the summer months the annual gross profit of the Pike Street store alone is estimated to be between $90,000 and $100,000 gross.
The Quern Flour Bakery (Tidalborestad)
The Quern Flour Bakery is based in Tidalborestad, on the East Coast and has been operating since December 2003. Maltese owner and operator Siggiewi Gozo is a former corporate recruiter with an Masters Degree in Psychology who originally came to Tidalborestad for a job with a national sportswear company. He has no previous baking or relevant industry experience.
A one man shoe-string operation, Siggiewi works 15 hour days to make between 700 and 900 pies per week. In early 2004 Gozo was making and selling about 400 pies per month. In January of 2005 he sold 4,000 in bars and Irish pubs alone. Business is now good enough for him to take on extra staff and to scout a bigger location for the bakery. Currently he operates out of a rented nightclub kitchen after hours.
Quern Flour produces seven varieties for the Tidalborestad market, including steak and mushroom, beef and cheese and a shepherd’s pie. He also makes a breakfast egg and bacon pie and a sausage roll. He sells his pies to several midtown pubs, caters events around town and delivers by the dozen directly to customers’ homes by bicycle or subway. Quern Flour Bakery now offers overnight shipping via FedEx anywhere in the country.
The majority of his clientele hail from British Mediterranean areas. There are around 2,300 Maltese and Gibraltarian customers in Tidalborestad that make up the company’s customer base. Quern Flour supplies around six restaurants and pubs with frozen and hot pies within the Tidalborestad area. Gozo also caters for holiday parties and his pies were served at some consulates during morning tea in 2004.
All the ingredients considered carefully. The flagship ‘chunky steak’ pie is made from sirloin steak and all cuts of meat are inspected to make sure there is no gristle. To develop the perfect pie crust, Quern Flour Bakery sources special margarine directly from Malta.
Quern Flour Bakery pies retail for up to $5.00, and last year the company turned over $90,000 gross. Based on the current market Siggiewi Gozo expects the company to quadruple turnovers by 2005.
Buying Patterns
The most difficult function in predicting customer buying patterns is following the fine line of baking too much product or not having enough product left to serve customers late in the day. Despite implementing sophisticated POS systems that track hourly sales figures, there is no predictable pattern of daily activity. One Tuesday could be a sellout and the next Tuesday there could be pie warmers left full of product.
Despite customer unpredictability, buying patterns typically revolve around several different factors:
The proposed business location for the first UPer Crust store will be in downtown Yubetchatown. Five possible sites are being considered in three areas: the new Yubetchatown Station presently under construction, central downtown Yubetchatown, and the area of Chambers Street and 18th Avenue.
Each will need approximately 500-700 square feet. This area will include freezer space for on-site storage of frozen product. The operating space will consist of an oven, counter and serving area, pie warmers and ambient display cases, cold beverage display, an eating area and a restroom.
The stores will be located on high traffic commuter routes and close to shopping facilities in order to catch customers going to or from work, while they are out for lunch, or on a shopping expedition. The business will operate from Monday through Sunday. Hours of operation will depend entirely on the area and final location of each store.
Pie warmers are custom designed and manufactured display cases. Chilled and ambient display cases that house salads, desserts and cold beverages, uniform in design, will also be purchased. Commercial ovens, cash registers and point of sale (POS) accounting systems will be necessary capital asset acquisitions.
UPer Crust Pies is in negotiations with two Michigan Upper Peninsula pie manufacturers to supply frozen pies, rolls and a small selection of dessert pies. It will establish a relationship with a reputable shipping company and a freight agent to aid in the smooth transition of product from the UP to our distribution center.
The company is also currently seeking reputable organizations to supply its stores with fresh salads and desserts on a daily basis, and will also establish contracts with a beverage company to provide popular product brands. Credit and delivery policies will be established; to avoid fluctuating costs the company will endeavor to build a fixed product rate into the contracts.
UPer Crust Pies wishes to establish long-term loyal relationships with its suppliers. Factors such as history, reliability, reputation, delivery system, service, product guarantees and liability issues will be crucial in the final decision. Due to the company’s expansion plans in years two and three, it is important that our suppliers have regional and possibly national coverage.
Our imported products will be stored locally with a company that specializes in cold storage. Lead time for ordering, production, shipping and receiving is expected to be two months, although this will depend on sales volumes and product demand during the first year of business. This lead time will be reviewed constantly and altered in accordance with company expansion and seasonal demands.
Frozen and chilled pastries will be distributed to stores on a weekly basis, dependant on turnover, and will be kept frozen on site. Perishables such as salads and some desserts will be delivered fresh directly to our stores on a daily or two- to three-day schedule. Cold beverages will also be delivered directly to stores according to demand. A small back-up supply of products will also be kept on site.
A submission of application for a food license to the State Department of Health will include prepared plans and specifications for review and approval before the construction or remodeling of the initial establishment. The application fee is $300.00.
The State Department of Health will conduct one or more pre-operational inspections to verify that the establishment is constructed and equipped in accordance with the approved plans and in compliance with the Food Code.
The State Department of Health also requires that each employee possess a Food Handlers Permit. This permit is $10.00 and is obtained after a simple exam.
The company will adhere to the State Department of Health and U.S. Food and Drug Administration Food Code standards. An appropriate insurance policy will also be taken out in accordance with State Department of Health regulations.
Establishing company policies and procedures will be important the company’s growth and employee development. The following policies and procedures will be adopted:
The company’s credit policy will be to accept only cash, Visa or MasterCard credit cards.
UPer Crust Pies will penetrate the commuter and captive consumer markets by setting up stores in highly visible and accessible locations. With the proliferation of coffee and fast-food chains across America, customers expect product consistency. Although our unique products will initially captivate a curious market and compete on a consistency level, it will be our fast and cheerful customer service that will differentiate us from competitors and keep our customers returning.
UPer Crust Pies has identified its market as busy, mobile people whose time is already at a premium. This market desires exciting, new-tasting products with familiar ingredients for lunch time or while commuting to or from work or school.
Strategic Assumptions:
UPer Crust Pies’ unique products and focus on the customers experience will give it a significant market edge and differentiate the company from its competitors.
The company has several distinct advantages over its two leading competitors; its authentic products, modern baking and presentation equipment, and the latest operating systems and technology.
A fast and unique food alternative: We offer our customers a completely new experience through our pies, pastries, salads and desserts. The look, feel and taste of our products when compared to the competition will initially establish a sense of curiosity, followed by a value for money reputation and eventually a loyal following of pie lovers and connoisseurs.
Products are made from the finest quality ingredients and are low in fat and free of genetically modified foods. Many products, such as the authentic Upper Peninsula pies, will not be available anywhere else.
Our products will be served fast and ready to consume and will be an alternative to the usual fast-food options available in today’s market.
The importance of the experience: With so many fast food restaurants and prepared foods being offered at grocery markets, the customer experience becomes extremely important as an effective way of distinguishing offerings. It is this experience that remains in the customer’s mind well after they have consumed their food. This memory is what is communicated to their friends and colleagues.
We realize that our business is a lot more than just pies. It’s our pies, our people and the experience the customers have in our stores. The store environment will play a major role in a positive customer experience. The cleanliness, smoke-free environment, color scheme and nostalgic Upper Peninsula/Great Lakes images will create a completely new experience.
The focus of our marketing strategy will be to attract new customers, educate those customers and create a loyal base. Our goal is to be known as a unique food experience with superior customer service.
The following marketing strategies will be employed in the first year of business:
Signage: Highly visible, eye catching and recognizable signs and logos at each store.
Print media advertising: Weekly and monthly food and dining out guides will be used for print advertising.
Flyers: Distributed to local businesses to create customer awareness, accompanied with buy-one get one-free coupons during our Grand Opening.
Entertainment book coupons: Create initial customer awareness and economic incentive to try our products. The effectiveness of these books diminishes after approximately eight months and UPer Crust Pies will turn to more cost effective marketing.
Word of mouth: Unsurpassed customer service and our unique products will help develop strong word-of-mouth advertising and in turn help extend the company brand.
Alliances: Although the company is primarily in the fast-food industry, it’s unique products and cultural origins could be used as a tourism vehicle to promote the Upper Peninsula through a strategic alliance with Michigan Tourism.
We intend to succeed by giving our customers a combination of delicious food in an appealing environment with outstanding customer service. Once a customer enters our store, it is our job to make sure their experience with us is enjoyable. To establish a loyal customer base, it is vitally important we develop repeat business.
Our pies will be cooked throughout the day, ensuring they can be served with confidence while guaranteeing our customers supreme freshness and taste. We will also offer fresh baked samples free of charge to those who enter our store for the first time.
We need to offer fast service at peak times. To speed up customer service, at least two employees will be servicing customers. One employee will be preparing the customer’s order, the other one will be taking care of the sales transaction. All sales data logged on our computerized POS system will be analyzed for marketing purposes.
We will offer punch cards, meal deals and weekly menu specials and keep accurate track of what types of pies and associated foods sell well through a customer feedback program. With this information we will be able to streamline our food line to match local tastes and encourage more people to eat at the pie shop.
We need to sell the company as well as the product. All employees will go through a comprehensive training process on how to offer customers the finest experience. Employees will be empowered to resolve issues and are encouraged to seek assistance from managers for any conflicts they are unable to resolve.
Part of our mission is to educate our customers about pies. However, this must be done in a respectful fashion. Our knowledge is a resource, and must never be used to make a customer feel uncomfortable or ignorant.
In the first year of business we will implement a Point-of-Sale (POS) computerized cash register system that will make tracking and managing receipts and charitable contributions more robust. We will seek a professional who has experience in how to tie in POS systems to the Internet and inventory controls. This individual’s knowledge will also help establish technology guidelines for the company.
Our sales strategy requires consistently high quality food and fast service in a relaxed atmosphere. We can accomplish this by:
Our sales forecast shows modest estimates for the first year of operations beginning in July 2005. Cost control is a critical focus for UPer Crust Pies. Because we are importing our product from Michigan, we will negotiate a flat purchase price for the first three years of business to compensate for fluctuating economic conditions. We have projected a 60% gross mark up over the first three years of business. Keeping costs low while increasing sales will be vital to the company’s profitability in subsequent years.
UPer Crust Pies envisions the first three months of sales to be fairly slow due to limited product awareness, the competitive nature of the market and existing customer loyalty. We have therefore forecasted a 5% growth rate over the first year. In the second year, UPer Crust Pies will add two more stores and in the third year, an additional two stores. The addition of these stores will nearly triple the gross revenue in the second year and increase half again as much in the third year. Compared to industry standards we have taken a very conservative 10% growth rate over the first three years of operations.
Not projected in this sales forecast is the possibility of additional revenue generated from shipping via an e-commerce facility to be added to our website in year two. Based on current market research, shipping could be a significant profit center. We would sell frozen products that could be shipped overnight via DHL or FedEx to customers throughout the U.S. Shipping would also become an integral part of the company’s marketing plan to help develop brand recognition and build product awareness.
We understand product sales will also vary according to the season. Dessert and salad sales in the summer months are expected to be slightly higher since more people will be having barbecues and picnics requiring ad-on products. Pie and pastry sales should be higher in winter because of food oriented holidays and pies tend to be viewed as a comfort food. It is anticipated that sales of sodas during the summer months should be substantially higher.
Please note that the sales forecast for the first year reflects store number one at a 5% growth rate. In the second year, the forecast reflects the combined sales of three stores at a 10% growth rate, and in the third year, the combined sales of five stores at a 10% growth rate.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Pies & Pastry | $56,149 | $185,298 | $308,820 |
Pies & Pastry (Frozen) | $36,531 | $120,552 | $200,921 |
Desserts | $18,726 | $61,796 | $102,993 |
Desserts (Frozen) | $5,444 | $17,965 | $29,942 |
Salads | $3,586 | $11,834 | $19,723 |
Cold Beverages | $3,154 | $10,408 | $17,347 |
Total Sales | $123,589 | $407,853 | $679,746 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Pies & Pastry | $19,652 | $61,904 | $103,173 |
Pies & Pastry (Frozen) | $12,786 | $40,276 | $67,127 |
Desserts | $6,554 | $20,645 | $34,409 |
Desserts (Frozen) | $1,905 | $6,001 | $10,001 |
Salads | $1,255 | $3,953 | $6,589 |
Cold Beverages | $1,104 | $3,478 | $5,796 |
Subtotal Direct Cost of Sales | $43,256 | $136,257 | $227,095 |
In the first year of operation UPer Crust Pies will establish a basic Internet presence. The website will be a virtual business card and portfolio for the company with a simple yet contemporary design to keep up with the latest trends in user interface. The site will have general information about the company, its products, prices, store locations, hours of operation and contact information.
In year two, the company will launch an e-commerce facility for customer ordering and shipping of frozen products throughout the U.S.
Marketing efforts will start with our existing brick-and-mortar store customer base, informing them of our Internet presence and encouraging their word-of-mouth recommendations. Further awareness will be heightened by utilizing search engine submissions, URL links and e-mail marketing.
The company website and email address will be referenced on all printed material and correspondence including menus, business cards and advertising media.
The launching of our e-commerce facility for shipping in year two will also be marketed in our stores through word of mouth and on all printed media. Expansion into outside sales will help us to create greater community awareness.
Development Costs
Ongoing Costs
The strength of our management team positions us for success. We have assembled a team that embraces different disciplines with expertise in all areas of the business. Overhead for management will be kept to a minimum and initially all managers will be hands-on workers. There is no intention of having a top-heavy organization that drains profits and complicates decisions.
UPer Crust Pies’ management style will encourage all employees to learn as much as possible about all aspects of the business and be involved in decision making where appropriate. The company respects its community of co-workers, and will treat all workers well. It is important to us that they enjoy their jobs, feel part of the company and are well rewarded for their work.
In addition to the day-to-day operations, the management team, as principals within the company, will oversee product development, purchasing, positioning, pricing, inventory control and approval of all financial obligations of the company. They will plan, develop, and establish customer service policies and objectives, write employee job descriptions and draft an employee manual for all employee-related policies. They will:
Lina Mackinac-Gogebic, CEO – Accounting, Marketing, Legal, Human Resources
Confidential and proprietary information removed from this sample plan.
Olie Mackinac-Gogebic, COO – Operations, Marketing, Financial, Business Development
Misty Glade – Vendor Relationships, Sales, Recruitment, Training
Full Time Employee – Operations, Inventory, Store Development
Advisory Board
UPer Crust Pies will be slow to hire people in the first year of operation, but very loyal to those who are hired. Initially all employees will be part time as the majority of work will be done by the owner. As the company grows, we intend to hire employees with relevant skills and reward them accordingly. From that point, we intend to increase the responsibilities of each employee as opposed to hiring more people.
Retail and restaurant businesses live or die on customer service, yet their employees have among the lowest pay and worst benefits of any industry. We know we have great products, but it’s the way those products are delivered that will determine our success. We realize that our employees are our biggest asset and that the image of our company is built by the people who work for us.
Compensation for employees will include direct monetary payments and as the business progresses, performance bonuses will be paid to full-time employees. Because this is a small business, employees will be paid a comfortable wage that is fair to both the employees and the business.
Our opening employment goal is one full-time and one part-time employee with an additional two full-time and three part-time employees by the end of the second year. All employees with be trained in food handling and store procedures and will be required to hold a food handlers permit.
Our employee policies will include:
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Olie Mackinac-Gogebic | $27,040 | $27,040 | $29,120 |
Misty Glade | $0 | $27,040 | $29,140 |
Full-time Employee 1 | $0 | $27,040 | $27,040 |
Lina Mackinac-Gogebic | $0 | $0 | $0 |
Full-time Employee 2 | $0 | $0 | $24,960 |
Full-time Employee 3 | $0 | $0 | $24,960 |
Part-time Employee 1 | $7,000 | $7,000 | $9,000 |
Part-time Employee 2 | $0 | $7,000 | $9,000 |
Part-time Employee 3 | $0 | $7,000 | $9,000 |
Name or Title or Group | $0 | $0 | $0 |
Total People | 2 | 6 | 8 |
Total Payroll | $34,040 | $102,120 | $162,220 |
A bank relationship will be established as soon as possible. Sales could very well increase at a much sharper rate than assumed in these conservative projections. Sharper sales will result in a greater need for funds in support of inventory and store growth and a line of credit will need to be established.
We will set a budget for marketing and advertising and will continue to reinvest residual profits into company expansion and personnel.
Sales growth will be aggressive during the first 18 months as we sharpen our product line and inventory to better meet our customer’s requirements. Although we anticipate substantial growth in years two and three we are forecasting a very conservative 10% growth rate.
Total startup funding amounts are shown in the table below. This includes initial start-up expenses, liquid cash for operating expenses, unforseen expenses, to help cover wages, and also includes start-up inventory. This inventory will include the purchase and storage costs of frozen products, purchasing of cold beverages and daily delivery of fresh salads and various other desserts.
The purchase of long-term assets that will include an oven, two pie warmers, an ambient display case, freezers and refrigerators, a dishwasher and microwave, a three-compartment sink, decor and furnishings, utensils, a cash register and Point-Of-Sale software and accessories.
A long-term loan has been secured for the purchase of the long-term assets.
A first round of private investment from outside investors and family members will begin in April 2005. A second round will commence at the end of April 2006 for the purchase of further inventory and long-term assets to service the next two stores.
Profits will be reinvested and the owners will be employees collecting a very modest wage. This will ensure that any operating debts incurred are paid for within the shortest possible time period.
Start-up Funding | |
Start-up Expenses to Fund | $45,000 |
Start-up Assets to Fund | $195,000 |
Total Funding Required | $240,000 |
Assets | |
Non-cash Assets from Start-up | $77,000 |
Cash Requirements from Start-up | $118,000 |
Additional Cash Raised | $0 |
Cash Balance on Starting Date | $118,000 |
Total Assets | $195,000 |
Liabilities and Capital | |
Liabilities | |
Current Borrowing | $0 |
Long-term Liabilities | $170,000 |
Accounts Payable (Outstanding Bills) | $0 |
Other Current Liabilities (interest-free) | $0 |
Total Liabilities | $170,000 |
Capital | |
Planned Investment | |
Investor 1 | $8,000 |
Investor 2 | $8,000 |
Investor 3 | $8,000 |
Investor 4 | $8,000 |
Investor 5 | $8,000 |
Investor 6 | $10,000 |
Investor 7 | $10,000 |
Investor 8 | $10,000 |
Additional Investment Requirement | $0 |
Total Planned Investment | $70,000 |
Loss at Start-up (Start-up Expenses) | ($45,000) |
Total Capital | $25,000 |
Total Capital and Liabilities | $195,000 |
Total Funding | $240,000 |
Payroll burden is calculated at an estimated 12.65% made up of 7.65% for social security and medicare, 2% for unemployment, and 3% for worker’s compensation.
The tax rate has been left at 0% in the first year plan due to accumulated losses carried forward and that as an LLC the the owners will be taxed personally.
Our long-term interest rate is 6%.
Our State Sales tax is 4%. This does not affect our total profitability, but monthly payments to the State does impact our cash flow and cash balance.
Our financial plan depends on important assumptions. Our key underlying assumptions are:
Our break-even analysis is summarized by the following chart and table.
Break-even Analysis | |
Monthly Revenue Break-even | $10,862 |
Assumptions: | |
Average Percent Variable Cost | 35% |
Estimated Monthly Fixed Cost | $7,060 |
The following table and charts indicate projected profit and loss.
Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $123,589 | $407,853 | $679,746 |
Direct Cost of Sales | $43,256 | $136,257 | $227,095 |
Other Costs of Sales | $0 | $0 | $0 |
Total Cost of Sales | $43,256 | $136,257 | $227,095 |
Gross Margin | $80,333 | $271,596 | $452,651 |
Gross Margin % | 65.00% | 66.59% | 66.59% |
Expenses | |||
Payroll | $34,040 | $102,120 | $162,220 |
Marketing/Promotion | $3,000 | $9,000 | $15,000 |
Depreciation | $9,285 | $9,285 | $9,285 |
Rent | $24,000 | $72,000 | $120,000 |
Utilities | $2,700 | $8,100 | $13,500 |
Liability insurance | $2,400 | $7,200 | $12,000 |
Payroll Taxes | $0 | $0 | $0 |
Legal fees | $0 | $0 | $0 |
Accounting | $1,200 | $3,600 | $6,000 |
Bank Service Charges | $1,500 | $5,000 | $7,000 |
Telephone/Cell Phone | $900 | $1,500 | $2,100 |
License and Permits | $500 | $1,500 | $2,500 |
Cold Storage | $2,500 | $6,000 | $12,000 |
Office Supplies | $500 | $1,000 | $2,000 |
Repairs and Maintenance | $1,000 | $2,500 | $6,000 |
Gas/Auto Expenses | $1,000 | $2,000 | $5,000 |
Postage | $200 | $400 | $1,200 |
Total Operating Expenses | $84,725 | $231,205 | $375,805 |
Profit Before Interest and Taxes | ($4,392) | $40,391 | $76,846 |
EBITDA | $4,893 | $49,676 | $86,131 |
Interest Expense | $9,810 | $9,060 | $8,160 |
Taxes Incurred | $0 | $9,399 | $0 |
Net Profit | ($14,202) | $21,932 | $68,686 |
Net Profit/Sales | -11.49% | 5.38% | 10.10% |
Our projected cash flow is outlined in the following chart and table.
Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $123,589 | $407,853 | $679,746 |
Subtotal Cash from Operations | $123,589 | $407,853 | $679,746 |
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $4,944 | $16,314 | $27,190 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $0 | $60,000 | $60,000 |
Subtotal Cash Received | $128,533 | $484,167 | $766,936 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $34,040 | $102,120 | $162,220 |
Bill Payments | $89,311 | $294,893 | $461,222 |
Subtotal Spent on Operations | $123,351 | $397,013 | $623,442 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $4,466 | $16,314 | $27,190 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $12,000 | $14,000 | $16,000 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $65,000 | $30,000 | $30,000 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $204,817 | $457,327 | $696,631 |
Net Cash Flow | ($76,284) | $26,840 | $70,304 |
Cash Balance | $41,716 | $68,556 | $138,861 |
The following table explains the projected balance sheet.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $41,716 | $68,556 | $138,861 |
Inventory | $16,744 | $52,744 | $87,906 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $58,460 | $121,300 | $226,767 |
Long-term Assets | |||
Long-term Assets | $130,000 | $160,000 | $190,000 |
Accumulated Depreciation | $9,285 | $18,570 | $27,855 |
Total Long-term Assets | $120,715 | $141,430 | $162,145 |
Total Assets | $179,175 | $262,730 | $388,912 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $9,899 | $25,522 | $39,018 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $478 | $478 | $478 |
Subtotal Current Liabilities | $10,376 | $26,000 | $39,496 |
Long-term Liabilities | $158,000 | $144,000 | $128,000 |
Total Liabilities | $168,376 | $170,000 | $167,496 |
Paid-in Capital | $70,000 | $130,000 | $190,000 |
Retained Earnings | ($45,000) | ($59,202) | ($37,270) |
Earnings | ($14,202) | $21,932 | $68,686 |
Total Capital | $10,798 | $92,730 | $221,416 |
Total Liabilities and Capital | $179,175 | $262,730 | $388,912 |
Net Worth | $10,798 | $92,730 | $221,416 |
Projected business ratios are provided in the table below. The final column, Industry Profile, shows ratios for the Fast-Food Restaurant, Independent industry, as determined by the Standard Industry Classification (SIC) Index code 7999.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 230.01% | 66.66% | 8.67% |
Percent of Total Assets | ||||
Inventory | 9.35% | 20.08% | 22.60% | 3.24% |
Other Current Assets | 0.00% | 0.00% | 0.00% | 37.31% |
Total Current Assets | 32.63% | 46.17% | 58.31% | 45.97% |
Long-term Assets | 67.37% | 53.83% | 41.69% | 54.03% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 5.79% | 9.90% | 10.16% | 17.94% |
Long-term Liabilities | 88.18% | 54.81% | 32.91% | 22.26% |
Total Liabilities | 93.97% | 64.71% | 43.07% | 40.20% |
Net Worth | 6.03% | 35.29% | 56.93% | 59.80% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 65.00% | 66.59% | 66.59% | 59.05% |
Selling, General & Administrative Expenses | 76.49% | 61.21% | 56.49% | 39.24% |
Advertising Expenses | 7.51% | 0.00% | 0.00% | 1.96% |
Profit Before Interest and Taxes | -3.55% | 9.90% | 11.31% | 1.92% |
Main Ratios | ||||
Current | 5.63 | 4.67 | 5.74 | 1.04 |
Quick | 4.02 | 2.64 | 3.52 | 0.66 |
Total Debt to Total Assets | 93.97% | 64.71% | 43.07% | 50.22% |
Pre-tax Return on Net Worth | -131.51% | 33.79% | 31.02% | 6.90% |
Pre-tax Return on Assets | -7.93% | 11.93% | 17.66% | 13.87% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -11.49% | 5.38% | 10.10% | n.a |
Return on Equity | -131.51% | 23.65% | 31.02% | n.a |
Activity Ratios | ||||
Inventory Turnover | 2.78 | 3.92 | 3.23 | n.a |
Accounts Payable Turnover | 10.02 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 21 | 25 | n.a |
Total Asset Turnover | 0.69 | 1.55 | 1.75 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 15.59 | 1.83 | 0.76 | n.a |
Current Liab. to Liab. | 0.06 | 0.15 | 0.24 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $48,083 | $95,300 | $187,271 | n.a |
Interest Coverage | -0.45 | 4.46 | 9.42 | n.a |
Additional Ratios | ||||
Assets to Sales | 1.45 | 0.64 | 0.57 | n.a |
Current Debt/Total Assets | 6% | 10% | 10% | n.a |
Acid Test | 4.02 | 2.64 | 3.52 | n.a |
Sales/Net Worth | 11.45 | 4.40 | 3.07 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
New restaurants and fast-food outlets often make one of two mistakes: they are either unprepared or under prepared for opening. Initial poor service or product quality discourages customers from returning. Many first businesses spend all of their efforts at opening and are unable to maintain the quality customers expect on return visits, decreasing word-of-mouth advertising and leading to poor revenues.
UPer Crust Pies will be as prepared as it can possibly be with back–up equipment, alternative suppliers and at least three month’s inventory of frozen product.
Initial costs will be planned accordingly and kept to a minimum. The company recognizes the importance of its image, first-time impressions and customer service and it will not sacrifice this in order to satisfy the bottom line.
It is anticipated that marketing costs will be significantly higher in the first three months of business. Marketing activities will be closely monitored and constantly analyzed to decide what marketing activities are successful and what are not. A marketing budget will be set for the first store and for each subsequent store.
UPer Crust Pies will establish a loyal and long-term relationship with our suppliers and always pay on time. We wish to establish fixed-product rates with our suppliers as a buffer to avoid fluctuating economic conditions that may affect our purchasing capabilities.
Changes in importation policies and health regulations will always affect UPer Crust Pies. We need to establish a strong working relationship with the relevant authorities to ensure all procedures are followed correctly and ensure that we have a steady supply of product.
Because our products are unknown to the general consumer, marketing activities are vitally important. We plan on implementing several marketing strategies as outlined in the marketing section of this business plan. To establish product and brand awareness, we will give-away small samples to encourage first timers to try our products. Although we have quality products, building a loyal customer base will take time. We realize that training and empowerment of our employees will be reflected in their customer service and that word-of-mouth advertising will be paramount to our success.
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Pies & Pastry | 5% | $3,644 | $4,559 | $3,772 | $3,208 | $5,426 | $6,020 | $3,934 | $5,360 | $4,234 | $5,426 | $5,435 | $5,131 |
Pies & Pastry (Frozen) | 5% | $2,208 | $2,100 | $2,976 | $2,685 | $3,024 | $3,930 | $3,114 | $3,168 | $3,546 | $3,103 | $3,258 | $3,421 |
Desserts | 5% | $1,536 | $1,707 | $1,213 | $1,442 | $1,392 | $1,299 | $1,730 | $1,548 | $1,625 | $1,451 | $1,792 | $1,992 |
Desserts (Frozen) | 5% | $504 | $396 | $331 | $347 | $397 | $551 | $514 | $422 | $443 | $465 | $489 | $585 |
Salads | 5% | $413 | $360 | $370 | $292 | $235 | $206 | $188 | $232 | $230 | $322 | $321 | $418 |
Cold Beverages | 5% | $263 | $212 | $198 | $208 | $254 | $196 | $246 | $253 | $279 | $279 | $365 | $399 |
Total Sales | $8,568 | $9,334 | $8,859 | $8,183 | $10,729 | $12,201 | $9,726 | $10,983 | $10,356 | $11,046 | $11,659 | $11,946 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Pies & Pastry | $1,638 | $1,638 | $1,638 | $1,638 | $1,638 | $1,638 | $1,638 | $1,638 | $1,638 | $1,638 | $1,638 | $1,638 | |
Pies & Pastry (Frozen) | $1,066 | $1,066 | $1,066 | $1,066 | $1,066 | $1,066 | $1,066 | $1,066 | $1,066 | $1,066 | $1,066 | $1,066 | |
Desserts | $546 | $546 | $546 | $546 | $546 | $546 | $546 | $546 | $546 | $546 | $546 | $546 | |
Desserts (Frozen) | $159 | $159 | $159 | $159 | $159 | $159 | $159 | $159 | $159 | $159 | $159 | $159 | |
Salads | $105 | $105 | $105 | $105 | $105 | $105 | $105 | $105 | $105 | $105 | $105 | $105 | |
Cold Beverages | $92 | $92 | $92 | $92 | $92 | $92 | $92 | $92 | $92 | $92 | $92 | $92 | |
Subtotal Direct Cost of Sales | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Olie Mackinac-Gogebic | 0% | $2,253 | $2,253 | $2,253 | $2,253 | $2,253 | $2,253 | $2,253 | $2,253 | $2,253 | $2,253 | $2,253 | $2,253 |
Misty Glade | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Full-time Employee 1 | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Lina Mackinac-Gogebic | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Full-time Employee 2 | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Full-time Employee 3 | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Part-time Employee 1 | 0% | $583 | $583 | $583 | $583 | $583 | $583 | $583 | $583 | $583 | $583 | $583 | $583 |
Part-time Employee 2 | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Part-time Employee 3 | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Name or Title or Group | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total People | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | |
Total Payroll | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $8,568 | $9,334 | $8,859 | $8,183 | $10,729 | $12,201 | $9,726 | $10,983 | $10,356 | $11,046 | $11,659 | $11,946 | |
Direct Cost of Sales | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | |
Other Costs of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | $3,605 | |
Gross Margin | $4,963 | $5,729 | $5,254 | $4,578 | $7,124 | $8,597 | $6,121 | $7,378 | $6,751 | $7,441 | $8,054 | $8,341 | |
Gross Margin % | 57.93% | 61.38% | 59.31% | 55.95% | 66.40% | 70.46% | 62.94% | 67.18% | 65.19% | 67.37% | 69.08% | 69.82% | |
Expenses | |||||||||||||
Payroll | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | |
Marketing/Promotion | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | |
Depreciation | $774 | $774 | $774 | $774 | $774 | $774 | $774 | $774 | $774 | $774 | $774 | $774 | |
Rent | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | |
Utilities | $225 | $225 | $225 | $225 | $225 | $225 | $225 | $225 | $225 | $225 | $225 | $225 | |
Liability insurance | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Payroll Taxes | 13% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Legal fees | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Accounting | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | |
Bank Service Charges | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | |
Telephone/Cell Phone | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | |
License and Permits | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | |
Cold Storage | $208 | $208 | $208 | $208 | $208 | $208 | $208 | $208 | $208 | $208 | $208 | $208 | |
Office Supplies | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | $42 | |
Repairs and Maintenance | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | |
Gas/Auto Expenses | 15% | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 | $83 |
Postage | $17 | $17 | $17 | $17 | $17 | $17 | $17 | $17 | $17 | $17 | $17 | $17 | |
Total Operating Expenses | $7,060 | $7,060 | $7,060 | $7,060 | $7,060 | $7,060 | $7,060 | $7,060 | $7,060 | $7,060 | $7,060 | $7,060 | |
Profit Before Interest and Taxes | ($2,097) | ($1,331) | ($1,806) | ($2,482) | $64 | $1,536 | ($939) | $318 | ($309) | $381 | $994 | $1,281 | |
EBITDA | ($1,323) | ($558) | ($1,032) | ($1,708) | $837 | $2,310 | ($165) | $1,092 | $465 | $1,155 | $1,768 | $2,054 | |
Interest Expense | $845 | $840 | $835 | $830 | $825 | $820 | $815 | $810 | $805 | $800 | $795 | $790 | |
Taxes Incurred | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Profit | ($2,942) | ($2,171) | ($2,641) | ($3,312) | ($761) | $716 | ($1,754) | ($492) | ($1,114) | ($419) | $199 | $491 | |
Net Profit/Sales | -34.34% | -23.26% | -29.81% | -40.48% | -7.10% | 5.87% | -18.04% | -4.48% | -10.76% | -3.79% | 1.71% | 4.11% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $8,568 | $9,334 | $8,859 | $8,183 | $10,729 | $12,201 | $9,726 | $10,983 | $10,356 | $11,046 | $11,659 | $11,946 | |
Subtotal Cash from Operations | $8,568 | $9,334 | $8,859 | $8,183 | $10,729 | $12,201 | $9,726 | $10,983 | $10,356 | $11,046 | $11,659 | $11,946 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 4.00% | $343 | $373 | $354 | $327 | $429 | $488 | $389 | $439 | $414 | $442 | $466 | $478 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $8,911 | $9,707 | $9,214 | $8,510 | $11,158 | $12,689 | $10,115 | $11,422 | $10,770 | $11,488 | $12,125 | $12,424 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | $2,837 | |
Bill Payments | $343 | $10,295 | $10,090 | $4,485 | $10,280 | $10,075 | $4,470 | $10,065 | $4,460 | $10,255 | $10,050 | $4,445 | |
Subtotal Spent on Operations | $3,180 | $13,131 | $12,926 | $7,321 | $13,116 | $12,911 | $7,306 | $12,901 | $7,296 | $13,091 | $12,886 | $7,281 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $343 | $373 | $354 | $327 | $429 | $488 | $389 | $439 | $414 | $442 | $466 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $5,417 | $5,417 | $5,417 | $5,417 | $5,417 | $5,417 | $5,417 | $5,417 | $5,417 | $5,417 | $5,417 | $5,417 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $9,597 | $19,891 | $19,717 | $14,093 | $19,860 | $19,757 | $14,211 | $19,707 | $14,152 | $19,922 | $19,745 | $14,165 | |
Net Cash Flow | ($686) | ($10,184) | ($10,503) | ($5,582) | ($8,703) | ($7,068) | ($4,096) | ($8,285) | ($3,382) | ($8,434) | ($7,620) | ($1,741) | |
Cash Balance | $117,314 | $107,130 | $96,627 | $91,045 | $82,342 | $75,274 | $71,178 | $62,893 | $59,511 | $51,076 | $43,457 | $41,716 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $118,000 | $117,314 | $107,130 | $96,627 | $91,045 | $82,342 | $75,274 | $71,178 | $62,893 | $59,511 | $51,076 | $43,457 | $41,716 |
Inventory | $12,000 | $14,395 | $16,791 | $13,186 | $15,581 | $17,977 | $14,372 | $16,767 | $13,163 | $15,558 | $17,953 | $14,349 | $16,744 |
Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Current Assets | $130,000 | $131,710 | $123,921 | $109,813 | $106,626 | $100,319 | $89,646 | $87,945 | $76,056 | $75,069 | $69,030 | $57,806 | $58,460 |
Long-term Assets | |||||||||||||
Long-term Assets | $65,000 | $70,417 | $75,833 | $81,250 | $86,667 | $92,083 | $97,500 | $102,917 | $108,333 | $113,750 | $119,167 | $124,583 | $130,000 |
Accumulated Depreciation | $0 | $774 | $1,548 | $2,321 | $3,095 | $3,869 | $4,643 | $5,416 | $6,190 | $6,964 | $7,738 | $8,511 | $9,285 |
Total Long-term Assets | $65,000 | $69,643 | $74,286 | $78,929 | $83,572 | $88,215 | $92,858 | $97,500 | $102,143 | $106,786 | $111,429 | $116,072 | $120,715 |
Total Assets | $195,000 | $201,352 | $198,207 | $188,742 | $190,198 | $188,534 | $182,504 | $185,446 | $178,199 | $181,855 | $180,459 | $173,878 | $179,175 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $0 | $9,952 | $9,947 | $4,142 | $9,937 | $9,932 | $4,128 | $9,923 | $4,118 | $9,913 | $9,908 | $4,103 | $9,899 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $343 | $373 | $354 | $327 | $429 | $488 | $389 | $439 | $414 | $442 | $466 | $478 |
Subtotal Current Liabilities | $0 | $10,295 | $10,320 | $4,497 | $10,265 | $10,362 | $4,616 | $10,312 | $4,557 | $10,327 | $10,350 | $4,570 | $10,376 |
Long-term Liabilities | $170,000 | $169,000 | $168,000 | $167,000 | $166,000 | $165,000 | $164,000 | $163,000 | $162,000 | $161,000 | $160,000 | $159,000 | $158,000 |
Total Liabilities | $170,000 | $179,295 | $178,320 | $171,497 | $176,265 | $175,362 | $168,616 | $173,312 | $166,557 | $171,327 | $170,350 | $163,570 | $168,376 |
Paid-in Capital | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 | $70,000 |
Retained Earnings | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) | ($45,000) |
Earnings | $0 | ($2,942) | ($5,113) | ($7,754) | ($11,067) | ($11,828) | ($11,112) | ($12,866) | ($13,358) | ($14,472) | ($14,891) | ($14,692) | ($14,202) |
Total Capital | $25,000 | $22,058 | $19,887 | $17,246 | $13,933 | $13,172 | $13,888 | $12,134 | $11,642 | $10,528 | $10,109 | $10,308 | $10,798 |
Total Liabilities and Capital | $195,000 | $201,352 | $198,207 | $188,742 | $190,198 | $188,534 | $182,504 | $185,446 | $178,199 | $181,855 | $180,459 | $173,878 | $179,175 |
Net Worth | $25,000 | $22,058 | $19,887 | $17,246 | $13,933 | $13,172 | $13,888 | $12,134 | $11,642 | $10,528 | $10,109 | $10,308 | $10,798 |
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Proper site selection for your business influences whether you succeed or fail in making money. Your business location analysis should take into account demographics, psychographics, census and other data. Whether you’re trying to decide where to open a new store or where to locate a second office, follow this business plan location analysis example to maximize your chances of success in site selection.
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Location analysis definition : using data to figure out where to locate your business.
Determining where to put your store, office or even online presence requires careful thought. If you get this wrong, you could be trapped with a commercial lease that costs you a lot of money but doesn’t result in getting new customers.
There is a saying that the three most important considerations in business are location, location, location. If you’re starting a new business that operates primarily offline, location is critical. You want to be near your customers.
But is it critical for online businesses, too? Yes, in a different way. Online location is akin to having the right domain name, online advertising, and search engine optimization so that prospects can find your business.
In two slightly different ways, location is still an important part of doing business. A business plan has two purposes and will serve one or both: 1) raise additional capital and 2) outline in detail how you can succeed in your business (like a user’s manual).
Essentially, you want to answer two questions:
You will need to answer both of these questions for your site selection analysis.
Answering “why here,” for a brick and mortar location, will address the physical address (or addresses) where your business will take place.
For an online business, “why here” will address your website’s domain, web hosting service, and presence in search results.
Some of this material may overlap with your marketing plan (download a free sample marketing plan ).
Provide data for each of these elements in your business location analysis:
Food chain Whole Foods , now owned by Amazon, picks their locations based on many factors, not just population density in a neighborhood. They found that one of the key drivers that determines whether patrons will shop at their grocery stores is their level of education. As a result, their site selection process looks at locations with a higher per capita level of college degrees.
Costco takes into account population trends to ensure that the neighborhoods in which they locate their stores can sustain sales of their bulk-packaged products.
Walmart uses advertisements to see how far people will go to buy products at their stores. They track usage of mobile advertisements and create a geofence boundary to identify who goes where to buy what. This analysis helps them with their site selection for new stores.
Next, analyze the data you gathered above. This is an important step because it shows the considerations and thought process you put into your business location analysis. Many location analysis examples overlook this part.
Including only the data reduces your chances of success. Add these elements to put perspective on your reasoning:
Avoid picking a new location just because it has cheap rent. Signing such a business lease could spell disaster for your business because you may not have access to the clientele and workforce you need to succeed. Paying a little more for for the right address can boost your profits in a big way.
Do the research and think through the implications of your data to dramatically improve your chances of success at your new location.
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This is part 2 / 12 of Write Your Business Plan: Section 5: Organizing Operations and Finances series.
A manufacturer will likely need all sorts of equipment, such as cars, trucks, computers, telecom systems, and machinery of every description for bending metal, milling wood, forming plastic, or otherwise making a product out of raw materials. A lot of this equipment is expensive and hard to move or sell once purchased.
Moreover, manufacturers often require a facility to house this equipment and operate the business.
Related: How to List Personel and Materials in Your Business Plan
Naturally, investors are very interested in your plans for purchasing equipment and facilities. But this part of your plan doesn't have to be long—just be sure it's complete.
Make a list of every sizable piece of equipment you anticipate needing. Include a description of its features, its functions, and, of course, its cost. In addition, list all facilities you plan on buying or leasing.
Be ready to defend the need to own the more expensive items. Bankers and other investors are loath to plunk down money for capital equipment that can be resold only for far less than its purchase price. Also, consider leasing what you need if you are starting out. Once you show that you are responsible for paying your bills and sales look good, you can apply for a small business loan or a line of credit with greater success.
Related: How to Write an Operations Plan for Manufacturers
Unless you're a globe-trotting consultant whose office is his suitcase, your plan will need to describe the facilities in which your business will be housed. Even home-based business owners now describe their home offices as the trend continues to snowball, thanks largely to mobile communications.
Land and buildings are often the largest capital items on any company's balance sheet. So it makes sense to go into detail about what you have and what you need. Decide first how much space you require in square feet. Don't forget to include room for expansion if you anticipate growth. Now consider the location. You may need to be close to a labor force and materials suppliers. Transportation needs, such as proximity to rail, interstate highways, or airports, can also be important. Next, ask whether there is any specific layout that you need.
Related: What Technology to Include In Your Business Plan
Draw up a floor plan to see if your factory floor can fit into the space you have in mind. Manufacturers today do most of their ordering and communications online, so you need to ensure that your location has excellent connectivity.
To determine the cost of facilities, you'll first have to decide whether you will lease or buy space and what your rent or mortgage payments will be for the chosen option. Don't forget to include brokerage fees, moving costs, and the cost of any leasehold improvements you'll need. Finally, take a look at operating costs. Utilities, including phone, electric, gas, water, and trash pickup are concerns; also consider such costs as your computer connections, possibly satellite connections, maintenance, and general upkeep.
Related: Bursting at the Seams? Tips for Expanding Your Startup's Office Space
Use this checklist to analyze your facility's requirements.
These aren't the only operations concerns of manufacturers. You should also consider your need to acquire or protect such valuable operations assets as proprietary processes and patented technologies.
Related: How to Determine How Much Real Estate Your Business Needs
For many businesses— for example, Coca-Cola with its secret soft drink formula comes to mind—intellectual property is more valuable than their sizable accumulations of plants and equipment. Investors should be warned if they must pay to acquire intellectual property. If you already have it, they will be happy to learn they'll be purchasing an interest in a valuable and protected technology.
Section 1: the foundation of a business plan, section 2: putting your business plan to work, section 3: selling your product and team, section 4: marketing your business plan, section 5: organizing operations and finances, section 6: getting your business plan to investors.
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So you want to open a restaurant? Then you need a business plan.
A restaurant business plan is your roadmap to success. It outlines and forecasts every aspect of your restaurant’s operation and management —from menu design and location to financial planning and staff training. A comprehensive restaurant business plan demonstrates professionalism and a clear understanding of goals, increasing your chances of achieving long-term success in the competitive restaurant industry.
Why is a strong business plan important? Because it turns your restaurant idea into reality. According to the National Restaurant Association , having a business plan increases your chances of success by preparing you for problems before they arise and attracting investors and partners.
Planning is the key to restaurant success. Without a plan, you risk being part of the 30% of restaurants that fail in the first year. To make sure your restaurant succeeds, you can start by creating a business plan. Financial projections are a crucial component, helping to secure funding and plan for the future. Here’s how to get started.
Think of your business plan as your ultimate guide, showing business owners, stakeholders, and investors how you’re going to turn your vision into reality. It ensures nothing is overlooked as you grow your restaurant . When you’re deep in the chaos of construction, licensing, staffing, and other challenges, your business plan will keep you on track and focused. Without one, navigating the complex world of opening a restaurant becomes much tougher.
A solid business plan is also key to attracting investors. Most new restaurants need some outside capital from hospitality investors or silent partners. Before they invest in your dream, they need to see that you’ve got a solid, thought-out plan for success. Your business plan shows investors that you’ve considered every expense and every possible scenario. It provides a complete description of your strategy, highlights the experience and skills of your management team, and explains why and how it will succeed.
Every business should have a business plan, whether new or existing. Business plans help you focus on your goals and can help get back on track if you stray from them.
Whether this is your first business plan or your 10th, using a template specifically designed for the restaurant industry can be incredibly helpful. Our restaurant business plan template includes all the necessary sections you need. You can download a customizable copy of the business plan template here.
Conducting a thorough market analysis to understand customer demographics and competition is crucial for the success of your restaurant. Keep reading to learn about the key elements that make a restaurant business plan successful.
Start with a branded cover page that showcases your logo, brand fonts, and all relevant contact information. This sets a professional tone and makes your business plan easily identifiable.
Begin your restaurant business plan with an executive summary . This section introduces and sums up your entire vision, making sure to grab the reader’s attention. It should make investors feel invested in your idea and eager to read more.
Key elements to include are your restaurant’s mission statement , proposed concept, how you’ll execute the plan, an overview of potential costs, anticipated return on investment, as well as a business succession plan. Describe your restaurant concept, detailing the type of food being served, service style, design elements, and unique features. This is also a great spot to highlight your business’s core values. A strong executive summary sets the tone for your business plan and helps attract investor interest.
Additionally, include a management team write-up to highlight the credentials and past experiences of your management team, demonstrating their ability to run a successful establishment.
A well-conceived mission statement can provide a guiding light to keep your restaurant moving in the right direction. It helps ensure that every decision you make and every interaction you have is in line with your core values and goals.
In this section, you’ll lay out the foundational details of your restaurant. Start by introducing the basic information: the restaurant’s name, address, and contact details. Include information about the owner and their background, showcasing their experience and passion for the industry. This sets the stage for your business’s credibility.
Next, describe the restaurant’s legal standing and its short- and long-term objectives. This helps potential investors understand the structure and vision of your business.
Highlight your understanding of the local food industry with a brief market research summary. Explain why your restaurant will succeed in this market by demonstrating awareness of local dining trends and consumer preferences. Crafting your own restaurant business plan is crucial to showcase your dedication and strategic planning, learning from others' mistakes to ensure success.
Here’s a sample layout for this section:
Company description
Restaurant Name : [Restaurant Name]
Location: [Restaurant Address]
Contact: [Restaurant Phone Number] | [Restaurant Email Address]
Owner: [Owner Name]
Experience: [Owner Name] has over [Number] years of experience in the restaurant industry. They have worked in various roles, including [List of Roles]. They are passionate about food and creating a memorable dining experience for their guests.
Legal Standing: [Restaurant Name] is a [Type of Legal Entity] registered in [State/Province].
First describe the current state of the market sector your restaurant will be in and the specific area you will be in. This should include local economic growth, existing restaurants, infrastructure projects, nearby businesses, residential areas and foot and car traffic counts.
To create an effective and professional business plan, it is important to study restaurant business plan samples.
1. Review your target market
The restaurant industry is competitive so you need to find your niche. What will make your restaurant different? Who will your restaurant attract and who will be your repeat customers? Describe your target market and compare it to the overall restaurant industry in terms of diner demographics, characteristics and behaviour.
2. Location analysis
Even if you don’t have a specific location yet, focus on the general area or city where you will be opening your restaurant and explain why. Include local economic growth, major events and nearby infrastructure projects. Compare the current market conditions to your target market to show the proposed location fits your ideal customer profile. Investors will be looking closely at this section to make sure the location is right for your concept.
3. Competitive analysis
Get into the competitive landscape around your proposed location. Detail the number of other restaurants in the area, especially those with similar concepts. Investors want to know what will make customers choose your restaurant over the competition. What will make your food and service stand out and what other advantages do you have, like longer hours? Use a competitive matrix to show you understand your niche in the market.
The marketing section outlines how you’ll promote your restaurant before and after opening. Not sure where to start? Check out our guide here. A well-thought-out marketing plan is crucial to grow a successful restaurant and distinguish it from competitors.
Start by listing out specific tactics you’ll use pre and post-launch. Will you work with a PR manager? Launch a social media account to document the build-out and generate buzz. Share those details. If you already have a large social media following , make sure to mention it.
Once the restaurant is open , which channels will you use to keep the momentum going? Email marketing? Regular social media posts? Charity partnerships? Local TV and radio ads? Will you invest in customer relationship management software to keep in touch with regulars or implement a loyalty program?
This section should give a clear picture of your promotional strategy and how you plan to engage with potential customers from the start.
Outline your operation plan
Here’s how to outline your restaurant’s day-to-day operations once the doors open. Cover these key areas:
Clearly defining the service style of your restaurant, whether it is fine dining , quick-service, self-service, or another type, is important to ensure a consistent customer experience.
Think about the positions you'll need and how many people you'll need for each role. What will make your place a fantastic workplace? Outline the pay for each position, how you'll recruit the right people, and what the hiring criteria will be.
How will you ensure an exceptional and consistent guest experience every time? Detail your service values, policies, and procedures, and explain how you'll enforce or encourage them.
How will you keep track of sales and inventory, manage takeout and delivery, control labor, handle cash, process payroll, and accept various payment types? Cover the systems you'll use for all these tasks.
Where will you get your ingredients? Think about both one-time equipment purchases and items that need regular replenishment. Detail your plans for sourcing these essentials.
The financial analysis usually wraps up your business plan, and it’s where investors really focus in. They want to see exactly how you’ll spend their money in the first year and how you expect costs and revenue to stack up. Make sure to hit these key points in this section.
Here’s where you put in the initial investment and how you’ll use it in the first year. Think kitchen equipment, furniture, decor, payroll, legal fees, marketing, and a bit of working capital.
Since the business plan is done way before you open your restaurant you’ll need to make some educated guesses for your P&L statement. Estimate costs and sales based on your restaurant’s size, target market and the local competition. Use this P&L template and guide to dive deeper into P&L statements and create one for your future restaurant.
This is where you show investors how much monthly revenue you’ll need to cover all your overhead and operational costs. Remember there are always variable costs so highlight what you think those will be. How will you hit that revenue target during slow months?
Your cash flow expectations hinge on your inventory purchases, staff size, payroll, and payment schedule. Some months will be better than others once your restaurant is up and running. This cash flow analysis will show investors that, based on your forecasts, your restaurant can sustain itself during leaner months without needing extra investments.
Once your business plan is polished and ready, it's time to become its number one expert. Investors want to see that you know every nook and cranny of your business and are confident you can make it happen.
When you're ready, email your business plan to anyone in your network who might be interested in investing. With any luck, you'll get some interest, and investors will want to meet to discuss your restaurant.
Some investors might want a pitch presentation alongside the printed business plan. Use a professional template from Google Sheets or PowerPoint, and practice until you can nail the presentation without notes.
Be prepared for any questions—both the expected ones and those that come out of left field. If you don’t know an answer on the spot, it’s fine to say you’ll find out and get back to them quickly.
A well-crafted restaurant business plan serves as a roadmap to success, guiding every aspect of the venture from menu design to employee training.
By carefully considering each component of the plan, aspiring restaurateurs can increase their chances of securing funding, attracting customers, and achieving their long-term goals. Including a sample menu in the business plan is necessary to showcase planned dishes and prices, which helps in selling the restaurant concept to potential investors and customers.
Remember, a restaurant business plan is not just a document to satisfy investors; it is a living tool that should be revisited and updated regularly as the business grows and evolves.
By staying committed to the plan and adapting it as needed, restaurateurs can ensure that their culinary dreams have a solid foundation for success.
How much profit does the restaurant make.
When it comes to restaurant profitability, the numbers can widely vary. On average, restaurants report profit margins between 3% and 5% annually.
Fast-food establishments often have lower margins but benefit from a high volume of customers and quick turnover rates. In contrast, fine dining venues, although charging higher prices, see fewer customers and slower turnover, which influences their profit margins differently.
Our research indicates that, regardless of the type of restaurant, the average monthly profit usually falls between $15,000 and $25,000.
Starting a restaurant can be a daunting task, especially when funds are tight. However, with some creativity and determination, you can turn your dream into a reality. Here’s how:
Consider a unique, low-cost restaurant concept. Instead of a full-scale establishment, perhaps a pop-up restaurant or a delivery-only kitchen could better fit your budget. Flexibility in your concept can significantly reduce initial costs.
Traditional bank loans aren't the only option. Look for investors who believe in your vision or explore crowdfunding platforms like Kickstarter or GoFundMe . Sometimes, you can even find grants aimed at smal l business startups.
Start by building a strong online presence. Create a website and utilize social media to attract and engage customers. Online marketing can be a cost-effective way to generate buzz and gather a customer base before you even open your doors.
Partnerships can pave the way for mutual growth. Collaborate with food suppliers, local farms, or even other small businesses to share costs and resources. This strategy can also expand your network and increase visibility within your community.
Consider launching your concept through a food truck, catering service, or pop-up stand. These options require significantly less capital than a traditional sit-down restaurant and can help you build your brand and customer base.
Growth Marketing Manager at Eat App
Saif Alnasur used to work in his family restaurant, but now he is a food influencer and writes about the restaurant industry for Eat App.
Reviewed by
Nezar Kadhem
Co-founder and CEO of Eat App
He is a regular speaker and panelist at industry events, contributing on topics such as digital transformation in the hospitality industry, revenue channel optimization and dine-in experience.
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Home » Insights » Consulting » Strategic facility planning: an overview, the process and importance
Growth is the objective for most businesses. And while you plan for that growth, you need to consider, among other factors, whether you have the space to expand your business. Strategic facility planning helps organizations set the strategic direction for all further planning activities.
Strategic facility planning (SFP) is a structured planning process that helps organizations align their short and long-term facility plans with their business plans. The SFP process typically includes the entire real estate (network or facility) portfolio, although it can also focus on a single aspect of the plan. It is a data-driven, defensible, high-level look at what facilities and strategic solutions are needed for an organization to achieve its business goals.
Strategic facility planning is the first phase of the overarching facility planning process.
Many organizations use “master plan” as an all-encompassing term that groups together the strategic facility plan and master plan. But there are differences between the two and it’s important to recognize them as separate steps in the planning process.
The SFP process answers questions and identifies the facility requirements needed to meet your short and long-term goals. With the right people and data, the SFP process can quickly and accurately look at an organization’s facility demands, gaps, and help guide an organization toward a more efficient and cost-effective facility strategy to inform the development of a full master plan.
The first objective of strategic facility planning is to clearly define the facility implications of your business plan for both the near and long term. For most SFPs a near-term planning horizon is 3-5 years, and the long term is 6-10+ years.
For some organizations, the business plan is simple. They want to grow by a certain percent per year with accompanying revenue, expenses, and profit goals. For others, the business plan also includes strategies to respond to changing markets or demographics, a change in its distribution network, the adoption of new technologies, or perhaps potential mergers and acquisitions. For a complex organization, the list of business drivers can be quite extensive.
Given that the cost of facilities is predictably the second largest expense line item for most organizations (payroll is the number one expense), it would serve any organization well to not only have a robust business plan but to also have a dynamic strategic facility plan to understand and predict its facility expenses as the business changes.
The SFP kick-off meeting must focus on communicating the business goals, assumptions to be made, and questions that need to be answered.
The SFP process begins with a review of the business plan. Some of the most important points to discuss include goals for growth, pipeline of products that will trigger that growth, as well as any other business drivers, growth initiatives and/or operational changes that are envisioned for the planning horizon (typically 3-10 years). The goal is to get a comprehensive picture of the business and where you want to take it in as much detail as necessary to be able to lay out the facility implications.
Who is involved in this initial SFP meeting? C-suite executives and directors/managers that can speak to the organization’s current and future business and operations, and those empowered to make appropriate business, operations, and facility assumptions.
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downloadable strategic facility planning checklist for biopharma
Once you have laid out your organization’s business and operational plans, the next step is to clearly define what assumptions are being made about the facilities and operations. For example, an organization with a large manufacturing operation may do all their quality control testing activities in-house. If the organization is planning to grow manufacturing, it stands to reason that the supporting testing operations may also need to grow, unless excess testing capacity currently exists (more on that later).
Alternatively, these types of testing services can be outsourced. So, what is the assumption for the future? Testing in-house or outsourced? Does a deeper study need to be triggered to compare the costs? During the kick-off meeting, develop a list of assumptions, determine if those assumptions need to be challenged, and identify potential follow-up actions. This will ultimately inform the strategic facility plan.
Here is the key – as the SFP is revisited annually (ideally), these assumptions may need to change. And that is OK. Having a comprehensive list of the assumptions at the forefront of the SFP deliverable is critical to understanding the SFP findings and recommendations, and it allows the SFP to evolve and change with changes to the business.
Given that facilities are a major cost item on the expense side of the P&L, many organizations leverage the SFP process to answer strategic questions about their growth.
While organizations often focus on the revenue-producing part of their business and facilities (i.e., manufacturing), a good strategic facility plan should evaluate the entire real estate and space portfolio to identify the entire facility demand implicated by the business plan . To continue building on our example from above, an increase in manufacturing will likely trigger the need for additional warehouse space and even offices—beyond those additional testing labs.
While the SFP process identifies what facilities are needed for the organization to meet its goals and objectives of the business plan, this can only start with a comprehensive understanding of your current facilities’ capacity and utilization. Work with the day-to-day operational managers to understand how well the existing facilities are operating and where opportunities and limitations currently exist for adding capacity and/or increasing utilization. In other words, you need to know what you have before you can define what you need.
In the case where an organization is completely new and has no existing facilities, CRB leverages benchmarks from other similar facilities to make assumptions regarding space utilization, capacity, and facility demand. In a nutshell, the SFP process lays out the facility supply, facility demand, and facility gaps for the organization for the specified planning horizon.
In addition to talking with managers and compiling operational data, leverage a space management tool for SFP to establish the facility supply (baseline). Most organizations that have more than 250,000 square feet of facility space have adopted (and are using for tactical space planning) an Integrative Workplace Management System or IWMS . If populated correctly, this database contains helpful information for every room in every building. Most importantly, this provides quick access to floor plans, square footage, and space utilization. With this database in hand, you can quickly assess your organization’s baseline supply for the SFP and add attributes and additional data points as needed for establishing the facility gaps.
The next step is to develop a deeper understanding of both the utilization and capacity of the existing facilities and develop planning metrics that capture this information. This is where SFP can help an organization develop the most appropriate approach given the nature of the space functions and the data available. Each space function will likely have a different strategy for establishing capacity, and corresponding metrics once the current utilization is understood. Lab capacity may be driven by samples, equipment, or even headcount. The capacity of a warehouse, on the other hand, will be driven by storage pallets; and offices will most likely be organized by headcount and/or seats.
The SFP must identify, for each space function, the existing utilization and capacity as well as future potential capacity if the utilization strategy is changed. Existing and future utilization may require a deeper dive into the operations to identify specific strategies to improve efficiency and increase capacity – thus addressing the facility demand and minimizing the gaps. For example, an existing manufacturing floor or warehouse may not be efficiently organized from an equipment layout and operational flow perspective. It is not uncommon for CRB to assist companies to “re-work” their production and warehouse spaces to increase capacity and defer spending capital on new facilities.
Once you determine the baseline facility supply and forecast the facility demand, you can develop the gap analysis. The facility gap analysis gets the most attention in the SFP process because it provides the unmet facility demand data. With a robust data-driven SFP process, these gaps are very defensible, providing leverage to make strategic decisions about future growth and capital planning . However, these gaps are identified based on the many assumptions you’ve made about your organization’s business drivers and operations.
Re-stacking strategies allowed the square footage of the warehouse to reduce from 33 percent of the total space portfolio to 11 percent.
Case in point: CRB provided a strategic facility plan for a growing biopharma client. Our team worked with the client’s leadership to translate projected manufacturing forecasts to space and facility demands. Three major demand drivers impacted the facility gap analysis:
Reducing the gap by optimizing warehouse space CRB determined that additional space was required to accommodate manufacturing growth. Being located adjacent to the warehouse created an opportunity to leverage an underutilized space for this growth. Re-stacking strategies allowed the square footage of the warehouse to reduce from 33 percent of the total space portfolio to 11 percent. This provided enough space for manufacturing to add the equipment needed to meet the five-year production forecasts.
When the facility gaps are large, you need to revisit the assumptions made about operations and utilization. In our testing lab example from above, the lab may currently operate from 8 am – 5 pm, five days a week. Because this is the current work culture, it was likely the assumption for the SFP analysis. But what happens if a second shift is added for lab testing? Or even a third shift? Assuming this is a doable strategy and aligns with the manufacturing schedule, it could potentially reduce the testing lab space demand considerably. In this case, the organization may also explore potential outsourcing of select lab tests to reduce in-house lab demand.
The most common assumptions to be re-visited to help minimize the facility/space gaps include the following:
The final step in the SFP process is to lay out all the credible strategic facility solutions to address the facility gaps. You may develop solutions to correspond to different operational assumptions. There may also be a series of options that align with various real estate opportunities. Clearly define each option, and identify the pros and cons. Additionally, develop and consider both capital and operational costs.
During this process we develop and consider both capital and operational costs.
Example heat map from a gene therapy client's SFP
Once all the quantitative data about each option is defined, it is important to add any qualitative criteria that would influence the viability and success of the strategic planning options. For example, a facility planning option may work great from a space layout perspective, but the implementation of it may significantly disrupt current operations, making that option very costly. Supply chain and regulatory impacts must also be considered as appropriate. Also, worth noting are impacts to employees. When considering real estate options, for example, employees can be significantly affected if a new facility on a campus is out of a comfortable walking range from their current workspace, or if a new real estate option extends their commute distance.
Once you have identified all the qualitative and qualitative evaluation criteria, you can score and weigh the options. A heat map is a valuable tool to leverage for evaluating and comparing strategic planning options and presenting them to executives and decision-makers.
The SFP process is a thoughtful, robust, and necessary step for any organization whose business is growing or changing in some fashion. Whether you are a manufacturer looking to expand into new markets, or a university looking to change the way students learn on a campus, SFP is a necessary first step in the facility planning process.
Are you ready to better understand your business implications for your facility? Our Consulting Team is here to help our clients with space utilization, reducing capital cost, and more.
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Need support creating your business plan? Check out these business plan examples for inspiration.
Any aspiring entrepreneur researching how to start a business will likely be advised to write a business plan. But few resources provide business plan examples to really guide you through writing one of your own.
Here are some real-world and illustrative business plan examples to help you craft your business plan .
The business plan examples in this article follow this template:
Your executive summary is a page that gives a high-level overview of the rest of your business plan. It’s easiest to save this section for last.
In this free business plan template , the executive summary is four paragraphs and takes a little over half a page:
You might repurpose your company description elsewhere, like on your About page, social media profile pages, or other properties that require a boilerplate description of your small business.
Soap brand ORRIS has a blurb on its About page that could easily be repurposed for the company description section of its business plan.
You can also go more in-depth with your company overview and include the following sections, like in the example for Paw Print Post:
Your mission statement may also make an appearance here. Passionfruit shares its mission statement on its company website, and it would also work well in its example business plan.
The market analysis consists of research about supply and demand, your target demographics, industry trends, and the competitive landscape. You might run a SWOT analysis and include that in your business plan.
Here’s an example SWOT analysis for an online tailored-shirt business:
You’ll also want to do a competitive analysis as part of the market research component of your business plan. This will tell you who you’re up against and give you ideas on how to differentiate your brand. A broad competitive analysis might include:
This section of your business plan describes your offerings—which products and services do you sell to your customers? Here’s an example for Paw Print Post:
It’s always a good idea to develop a marketing plan before you launch your business. Your marketing plan shows how you’ll get the word out about your business, and it’s an essential component of your business plan as well.
The Paw Print Post focuses on four Ps: price, product, promotion, and place. However, you can take a different approach with your marketing plan. Maybe you can pull from your existing marketing strategy , or maybe you break it down by the different marketing channels. Whatever approach you take, your marketing plan should describe how you intend to promote your business and offerings to potential customers.
The Paw Print Post example considered suppliers, production, facilities, equipment, shipping and fulfillment, and inventory.
The financial plan provides a breakdown of sales, revenue, profit, expenses, and other relevant financial metrics related to funding and profiting from your business.
Ecommerce brand Nature’s Candy’s financial plan breaks down predicted revenue, expenses, and net profit in graphs.
It then dives deeper into the financials to include:
You can use this financial plan spreadsheet to build your own financial statements, including income statement, balance sheet, and cash-flow statement.
A one-page business plan is meant to be high level and easy to understand at a glance. You’ll want to include all of the sections, but make sure they’re truncated and summarized:
A startup business plan is for a new business. Typically, these plans are developed and shared to secure outside funding . As such, there’s a bigger focus on the financials, as well as on other sections that determine viability of your business idea—market research, for example.
Your internal business plan is meant to keep your team on the same page and aligned toward the same goal.
A strategic, or growth, business plan is a bigger picture, more-long-term look at your business. As such, the forecasts tend to look further into the future, and growth and revenue goals may be higher. Essentially, you want to use all the sections you would in a normal business plan and build upon each.
Your feasibility business plan is sort of a pre-business plan—many refer to it as simply a feasibility study. This plan essentially lays the groundwork and validates that it’s worth the effort to make a full business plan for your idea. As such, it’s mostly centered around research.
Building a good business plan serves as a roadmap you can use for your ecommerce business at launch and as you reach each of your business goals. Business plans create accountability for entrepreneurs and synergy among teams, regardless of your business model .
Kickstart your ecommerce business and set yourself up for success with an intentional business planning process—and with the sample business plans above to guide your own path.
How do i write a simple business plan, what is the best format to write a business plan, what are the 4 key elements of a business plan.
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Ayush Jalan
Choosing a business location is one of the key decisions you’ll have to make as an entrepreneur. Doing so shouldn’t be based on a personal whim, but rather on a detailed understanding of your needs and limits. To do this, you need to understand how you can choose the right location.
In this article, we’ll see how to pick the right location for your business, and the factors that influence your decision.
You’ll need to make a strategic decision regarding the state, city, and neighborhood where your business will be located in order to select the right taxes, zoning laws, and regulations. It also affects the factors that influence your operations, profitability, scalability, expenses, etc.
A well-planned location can help you increase your market share , reduce labor and raw material costs, minimize risk, and take advantage of local laws and policies.
“The precept that location is key to the success of a business applies to art, and even to life itself: we thrive or wither depending on how nourishing our environment is.” – Yann Martel
Picking the right business location depends greatly on what you want that location to do for you.
Asking the following question can be a great start to conducting your location analysis:
Depending on your business, your requirements will vary. Once you’ve identified your company needs, look at the factors that affect your business location to get a better idea of your options.
Several factors determine how your business functions and sustains itself. These are some of them you should consider before picking your business location:
In most cases, it pays to be in a location where there’s a high demand for your product. However, depending on your business type, you can decide whether you need to be near your target customers.
For instance, if you’re planning to start a restaurant , it might be more profitable to be in an urban locality where people eat out frequently. Conversely, if you plan on starting a manufacturing business , being close to your target customers might not be a priority.
Regardless of your business type, your proximity to your customers becomes more significant if:
Picking a location closer to a competitor can impact your business in many ways. Done wisely, it can even turn out to be a good strategy.
If your products have a competitive advantage , setting up a shop near your competitors can work in your favor. Not only can you capture their market share, but also provide your customers with a sense of choice.
Here are the benefits of setting up your business near a competitor:
If you’re afraid that your competitors’ offerings may outperform yours, you may choose other locations that will place you in the center of the market.
It’s not just customers and suppliers you need to worry about when picking a location; you also need to consider your recruitment needs.
If you plan to build a team, you need to check the following:
The location of your business will greatly influence the expenses you will have to incur.
Some of those expenses to look out for are:
There are a variety of taxes you would have to pay once you’ve set up your business. These vary depending on state and location. Moreover, some areas favor particular industries, creating favorable tax conditions. So, it’s essential to consider the same before deciding on the location of your business.
A few of the commonly levied taxes on businesses are:
Most young entrepreneurs are constantly on the lookout for funding and support. The good news is that some local and state governments do offer help. This can be in the form of financial incentives, business grants , low-interest loans, tax relaxations, and other benefits.
Make sure to research these before you lock your decision.
Some websites where you can find relevant info are:
Converse to the last point, there could be several government laws and policies that may restrict or negatively impact your business activities. Make sure to consider these before finalizing your business location.
Some of the aspects you should look into are:
Local authorities have fixed rules and regulations regarding land usage—these laws are called zoning ordinances. Check if your plans of using and modifying the property comply with local laws to avoid running into problems later down the line.
Some locations have laws that deny permits for specific industries or restrict certain business activities. So, verify with the local municipal corporations or similar authorities to ensure you’re allowed to do business in that location.
While opening your business, it’s crucial to consider the impact of the local community on your business.
Asking the below questions might help you to choose the right business location:
Feeling safe and conducting your business without any disturbances is critical.
Inquire about the following while looking for a location:
Going through a myriad of business location ideas can often cause decision fatigue due to the irreversibility of the action. However, you can increase your chances of success by evaluating your options via extensive research.
Examine the above factors to analyze your compatibility with your desired location and identify potential fits to check if it’s viable. Make sure to take your time to avoid making the wrong investment. You can even consider hiring an advisor to choose the right business location.
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About the Author
Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.
Facility location and layout, learning outcomes.
Of all the pieces of the planning puzzle, facility location is the most strategic and critical. Once you build a new manufacturing facility, you have made a substantial investment of time, resources, and capital that can’t be changed for a long time. Selecting the wrong location can be disastrous. Some of the key factors that influence facility location are the following:
The next step, after planning the production process, is deciding on plant layout—how equipment, machinery, and people will be arranged to make the production process as efficient as possible.
Facility layout.
After the site location decision has been made, the next focus in production planning is the facility’s layout. The goal is to determine the most efficient and effective design for the particular production process. A manufacturer might opt for a U-shaped production line, for example, rather than a long, straight one, to allow products and workers to move more quickly from one area to another.
Service organizations must also consider layout, but they are more concerned with how it affects customer behavior. It may be more convenient for a hospital to place its freight elevators in the center of the building, for example, but doing so may block the flow of patients, visitors, and medical personnel between floors and departments.
There are four main types of facility layouts: process, product, fixed-position, and cellular.
The process layout arranges workflow around the production process. All workers performing similar tasks are grouped together. Products pass from one workstation to another (but not necessarily to every workstation). For example, all grinding would be done in one area, all assembling in another, and all inspection in yet another. The process layout is best for firms that produce small numbers of a wide variety of products, typically using general-purpose machines that can be changed rapidly to new operations for different product designs. For example, a manufacturer of custom machinery would use a process layout.
Figure 1. An Example of a Process Facility Layout. Source: Adapted from Operations Management, 9th edition, by Gaither/Frazier.
Products that require a continuous or repetitive production process use the product (or assembly-line ) layout . When large quantities of a product must be processed on an ongoing basis, the workstations or departments are arranged in a line with products moving along the line. Automobile and appliance manufacturers, as well as food-processing plants, usually use a product layout. Service companies may also use a product layout for routine processing operations.
Figure 2. An Example of a Product Facility Layout. Source: Adapted from Operations Management, 9th edition, by Gaither/Frazier.
In the following video, Jansen, a Swiss steel maker, describes how the company’s offices were designed to maximize the productivity and creativity of its engineers:
You can view the transcript for “Office Space – Jansen” (opens in new window) or text alternative for “Office Space – Jansen” (opens in new window ).
Some products cannot be put on an assembly line or moved about in a plant. A fixed-position layout lets the product stay in one place while workers and machinery move to it as needed. Products that are impossible to move—ships, airplanes, and construction projects—are typically produced using a fixed-position layout. Limited space at the project site often means that parts of the product must be assembled at other sites, transported to the fixed site, and then assembled. The fixed-position layout is also common for on-site services such as housecleaning services, pest control, and landscaping.
Figure 3. An Example of a Fixed-Position Facility Layout. Source: Adapted from Operations Management, 9th edition, by Gaither/Frazier.
To see an excellent example of fixed-position layout, watch the following video that shows how Boeing builds an airplane. (Note that this video has no narration; only instrumental music. Access audio description by using the widget below the video.)
Access the text alternative for “Making of a Boeing Airplane” (opens in new window).
Cellular layouts combine some aspects of both product and fixed-position layouts. Work cells are small, self-contained production units that include several machines and workers arranged in a compact, sequential order. Each work cell performs all or most of the tasks necessary to complete a manufacturing order. There are usually five to 10 workers in a cell, and they are trained to be able to do any of the steps in the production process. The goal is to create a team environment wherein team members are involved in production from beginning to end.
Learn the Essential Elements of a Full Business Plan
The following business plan for the fictional firm of "Acme Management Technology" (AMT) is an example of what a completed business plan might look like. This example is provided as part of the instructions and detailed descriptions included in the Components of a Business Plan.
1.0 executive summary.
By focusing on its strengths, its key customers , and the company's underlying core values, Acme Management Technology will increase sales to more than $10 million in three years, while also improving the gross margin on sales and cash management and working capital .
This business plan leads the way by renewing our vision and strategic focus of adding value to our target market segments—the small business and high-end home office users in our local market. It also provides a step-by-step plan for improving our sales, gross margin, and profitability.
This plan includes this summary, and chapters on the company, products & services, market focus, action plans & forecasts, management team, and financial plan.
AMT is built on the assumption that the management of information technology for business is like legal advice, accounting, graphic arts, and other bodies of knowledge, in that it is not inherently a do-it-yourself prospect. Smart business people who aren't computer hobbyists need to find quality vendors of reliable hardware, software, service, and support and they need to use these quality vendors as they use their other professional service suppliers—as trusted allies.
AMT is such a vendor. It serves its clients as a trusted ally, providing them with the loyalty of a business partner and the economics of an outside vendor. We make sure that our clients have what they need in order to run their businesses at peak performance levels, with maximum efficiency and reliability.
Many of our information applications are mission-critical, so we assure our clients that we'll be there when they need us.
AMT is a 10-year-old computer reseller with sales of $7 million per year, declining margins, and market pressure. It has a good reputation, excellent people, and a steady position in the local market, but has been having difficulty maintaining healthy financials.
AMT is a privately-held C corporation owned in majority by its founder and president, Ralph Jones. There are six part owners, including four investors and two past employees. The largest of these (in percent of ownership) are Frank Dudley, our attorney, and Paul Karots, our public relations consultant. Neither owns more than 15%, but both are active participants in management decisions.
AMT has been caught in the vise grip of margin squeezes that have affected computer resellers worldwide. Although the chart titled "Past Financial Performance" shows that we've had healthy growth in sales, it also indicates declining gross margin and declining profits .
The more detailed numbers in Table 2.2 include other indicators of some concern: As can be seen in the chart, the gross margin percentage has been declining steadily, and nventory turnover is getting steadily worse as well.
All of these concerns are part of the general trend affecting computer resellers. The margin squeeze is happening throughout the computer industry, worldwide.
Past Performance | 2015 | 2016 | 2017 |
---|---|---|---|
Sales | $3,773,889 | $4,661,902 | $5,301,059 |
Gross | $1,189,495 | $1,269,261 | $1,127,568 |
Gross % (calculated) | 31.52% | 27.23% | 21.27% |
Operating Expenses | $752,083 | $902,500 | $1,052,917 |
Collection period (days) | 35 | 40 | 45 |
Inventory turnover | 7 | 6 | 5 |
Short-Term Assets
Long-Term Assets
Debt and Equity
Other Inputs: 2017
We have one location—a 7,000 square-foot brick & mortar facility located in a suburban shopping center conveniently close to the downtown area. Along with sales, it includes a training area, service department, offices, and showroom area.
AMT sells personal computer technology for small business including personal computer hardware, peripherals, networks, software, support, service, and training.
Ultimately, we are selling information technology . We sell reliability and confidence. We sell the assurance to small business people that their business will not suffer any information technology disasters or critical downtimes.
AMT serves its clients as a trusted ally, providing them with the loyalty of a business partner and the economics of an outside vendor. We make sure that our clients have what they need to run their businesses at peak performance levels, with maximum efficiency and reliability. Since many of our information applications are mission-critical, we give our clients the confidence that we'll be there when they need us.
In personal computers , we support three main lines:
In peripherals , accessories and other hardware, we carry a complete line of necessary items from cables to forms to mousepads to... (add relevant information)
In service and support , we offer a range of walk-in or depot service, maintenance contracts, and on-site guarantees. We haven't had much success in selling service contracts. Our networking capabilities include... (add relevant information)
In software , we sell a complete line of... (add relevant information)
In training , we offer... (add relevant information)
The only way we can hope to differentiate effectively is to brand the vision of the company as a trusted information technology ally to our clients. We will not be able to compete in any effective way with the chains using boxes or products as appliances. We need to offer a real alliance that feels personal.
The benefits we sell include many intangibles: confidence, reliability, knowing that somebody will be there to answer questions and help at critical times.
These are complex products that require serious knowledge and experience to use, which we have, while our competitors sell only the products themselves.
Unfortunately, we cannot sell the products at a higher price simply because we offer services; the market has shown that it will not support that concept. We must also sell the service and charge for it separately.
Copies of our brochure and advertisements are attached as appendices. Of course, one of our first tasks will be to change the messaging of our literature to make sure we are selling the company, rather than the product.
Our costs are part of the margin squeeze. As price competition increases, the squeeze between the manufacturer's price into channels and the end-users ultimate buying price continues.
Our margins are declining steadily for our hardware lines. We generally buy at... (add relevant information) Our margins are thus being squeezed from 25% from five years ago to closer to 13 to 15% at present. A similar trend shows for our main-line peripherals, with prices for printers and monitors declining steadily. We are also starting to see that same trend with software...(add relevant information)
To hold costs down as much as possible, we concentrate our purchasing with Hauser, which offers 30-day net terms and overnight shipping from the warehouse in Dayton. We need to continue to make sure our volume gives us negotiating strength.
In accessories and add-ons, we can still get decent margins of 25 to 40%.
For software, margins are: (add relevant information)
For years, we have supported both Windows and Macintosh technology for CPUs, although we've switched vendors many times for the Windows (and previously DOS) lines. We are also supporting Novell, Banyon, and Microsoft networking, Xbase database software, and Claris application products.
We must remain on top of emerging technologies because this is our bread and butter. For networking, we need to provide better knowledge of cross-platform technologies. We are also under pressure to improve our understanding of the direct-connect Internet and related communications. Finally, although we have a good command of desktop publishing, we are concerned about improving integrated fax, copier, printer, and voicemail technology into the computer system.
AMT focuses on local markets, small business, and home office, with a special focus on the high-end home office and the five-to-20 unit small business office.
The segmentation allows some room for estimates and nonspecific definitions. We focus on a small-medium level of small business, and it's hard to locate data to make an exact classification. Our target companies are large enough to require the kind of high-quality information technology management we offer but too small to have a separate computer management staff (such as an MIS department). We say that our target market has 10 to 50 employees, and requires five to 20 connect workstations in a local area network, however, the definition is flexible.
Defining the high-end home office is even more difficult. We generally know the characteristics of our target market, but we can't find easy classifications that fit into available demographics. The high-end home office business is a business, not a hobby. It generates enough money to merit the owner's paying real attention to the quality of information technology management, meaning that both budget and productivity concerns warrant working with our level of quality service and support. We can assume that we aren't talking about home offices used only part-time by people who work elsewhere during the day and that our target market home office needs powerful technology and sufficient links between computing, telecommunications, and video assets.
We are part of the computer reselling business, which includes several kinds of businesses:
Small business buyers are accustomed to buying from vendors who visit their offices. They expect the copy machine vendors, office products vendors, and office furniture vendors, as well as the local graphic artists, freelance writers, or whomever, to visit their office to make their sales.
There is usually a lot of leakage in ad-hoc purchasing through local chain stores and mail order. Often the administrators try to discourage this but are only partially successful.
Unfortunately, our home office target buyers don't expect to buy from us. Many of them turn immediately to the superstores (office equipment, office supplies, and electronics) and mail order to look for the best price, without realizing that there is a better option for them at only a little bit more.
The small business buyers understand the concept of service and support and are much more likely to pay for it when the offering is clearly stated.
There is no doubt that we face stiffer competition from box pushers than from other service providers. We need to effectively compete against the idea that businesses should buy computers as plug-in appliances that don't need ongoing service, support, and training.
Our focus group sessions indicated that our target home office buyers think about the price but would buy based on quality service if the offering were properly presented. They think about the price because that's all they ever see. We have very good indications that many would rather pay 10 to 20% more for a relationship with a long-term vendor providing back-up and quality service and support, however, they end up in the box-pusher channels because they aren't aware of the alternatives.
Availability is also very important. The home office buyers tend to want immediate, local solutions to problems.
Chain stores:
Other local computer stores:
The home offices in Tintown are an important growing market segment. Nationally, there are approximately 30 million home offices, and the number is growing at 10% per year. Our estimate in this plan for the home offices in our market service area is based on an analysis published four months ago in the local newspaper.
There are several types of home offices. For the focus of our plan, the most important are those that are real businesses offices from which people earn their primary income. These are likely to be people in professional services such as graphic artists, writers, and consultants, some accountants—and the occasional lawyer, doctor, or dentist. We will not be focusing on the market segment that includes part-time home offices with people who are employed during the day but work at home at night, people who work at home to provide themselves with a part-time income, or people who maintain home offices relating to their hobbies.
Small business within our market includes virtually any business with a retail, office, professional, or industrial location outside of the home, and fewer than 30 employees. We estimate there are 45,000 such businesses in our market area.
The 30-employee cutoff is arbitrary. We find that the larger companies turn to other vendors, but we can sell to departments of larger companies, and we shouldn't give up such leads when we get them.
Market Analysis . . . (numbers and percentages)
We must differentiate ourselves from the box pushers. We need to establish our business offering as a clear and viable alternative to the price-only kind of buying for our target market.
Build long-term relationships with clients, not single-transaction deals with customers. Become their computer department, not just a vendor. Make them understand the value of the relationship.
We need to focus our offerings on small business as the key market segment we should own. This means the five to 20 unit system, connected by a local area network, in a company with five to 50 employees. Our values—training, installation, service, support, knowledge—are more clearly differentiated in this segment.
As a corollary, the high end of the home office market is also appropriate. We do not want to compete for buyers who go to chain stores or buy from mail-order outlets, but we definitely want to be able to sell individual systems to the smart home office buyers who want a reliable, full-service vendor.
We can't just market and sell service and support; we must deliver as well. We need to make sure we have the knowledge-intensive business and service-intensive business we claim to have.
The marketing strategy is the core of the main strategy:
We must charge appropriately for the high-end, high-quality service and support we offer. Our revenue structure has to match our cost structure, so the salaries we pay to assure good service and support must be balanced by the revenue we charge.
We cannot build the service and support revenue into the price of products. The market can't bear the higher prices, and the buyer feels ill-used when they see the same product priced lower at the chains. Despite the logic behind it, the market doesn't support this concept.
Therefore, we must make sure that we deliver and charge for service and support. Training, service, installation, networking support—all of this must be readily available and priced to sell and deliver revenue.
We depend on newspaper advertising as our main outlet to reach new buyers. As we change strategies, however, we need to change the way we promote ourselves:
We'll be developing our core positioning message: "24 Hour On-Site Service—365 Days a Year With No Extra Charges" to differentiate our service from the competition. We will be using local newspaper advertising, radio, and cable TV to launch the initial campaign.
Our collaterals have to sell the store and visiting the store, not the specific book or discount pricing.
We must radically improve our direct mail efforts, reaching our established customers with training, support services, upgrades, and seminars.
It's time to work more closely with the local media . We could offer the local radio station a regular talk show on technology for small business, as one example. We could also reach out to local news outlets to let them know we have experts who are able to address issues relating to technology for small business/home offices should the need arise.
The Yearly Total Sales chart summarizes our ambitious sales forecast. We expect sales to increase from $5.3 million last year to more than $7 million next year and to more than $10 million in the last year of this plan.
The important elements of the sales forecast are shown in the Total Sales by Month in Year 1 table. The non-hardware sales increase to about $2 million total in the third year.
Sales Forecast … (numbers and percentages)
Other miscellaneous expenses include:
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10 free catering business plan templates and examples
When starting a catering business, it’s essential to have a well-structured business plan in place. A comprehensive business plan not only helps you outline your goals and strategies but also serves as a detailed roadmap for success. However, creating a business plan from scratch can be a daunting task. That’s where catering business plan templates come in handy. Understand the importance of a well-devised plan for your catering venture , as it can significantly improve your chances of overcoming challenges and achieving long-term success.
Once you’ve found a suitable template, the next step is to customize it to fit your unique catering business. This involves filling in the specific details of your business, such as your target market, menu offerings, pricing, marketing strategies, and financial projections. Customizing key elements of the template allows you to tailor it to your specific goals and vision, ensuring that your business plan accurately reflects catering businesses. Understanding the challenges that come with taking on the catering industry, developing a strategy through a tailored catering service business plan from the onset can significantly influence your path towards achieving long-term success and stability.
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In the catering industry, having a well-thought-out business plan is crucial for success. It provides a roadmap for your business and helps you make informed decisions. Here are some key reasons why creating a catering services business plan is essential:
Defining Your Goals: A business plan allows you to clearly define your goals and objectives. It helps you identify what you want to achieve with your catering business.
Understanding Your Target Market: By conducting market research and analysis, you can gain valuable insights into your target market. This information will help you tailor your services to meet the needs and preferences of your customers.
Outlining Strategies: Your business plan serves as a guide to outline the strategies you will implement to achieve profitability. It includes details on your menu, pricing, marketing tactics, and financial projections.
Setting Yourself Up for Success: By carefully considering all aspects of your business and planning for potential challenges, you can set yourself up for long-term success in catering companies.
If you’re dreaming of starting your catering biz, you’re in the right place. We selected 10 catering business plan templates to help you get from daydreaming to doing. We’ve broken them down into three categories: Basic, Intermediary, and Complete, so you can find just what you need, no matter where you’re at in your catering business planning process.
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Template 01: the quick start guide.
This business plan template is like the fast food of business plans – quick, easy, and gets the job done. It’s perfect if you’re just getting your feet wet. Considering launching a catering service? Ensure you have a robust plan for your catering venture by understanding the essential components and pitfalls to steer clear of.
Use the Quick Start Guide Template
Focused on the numbers, this one helps you figure out your starting costs and financial plan for how you’ll keep the lights on.
Use the Budget Buddy Template
This template helps you outline your business concept’s initial needs, legal structure, and pricing strategy.
Use the Startup Planner Template
Template 04: conscious catering strategy.
Focusing on the growing trend for healthy and dietary-specific menus, this sample menu template is perfect for caterers wanting to market and specialize in health-conscious catering industry food offerings. Learn to adapt and enhance your catering business plan to cater to health-conscious consumers, ensuring the long-term growth and success of your business.
Use the Conscious Catering Strategy Template
Designed for established catering services and catering companies ready to expand, this template focuses on operational and pricing strategies, detailed menu planning, and advanced, marketing strategies and techniques. It’s ideal for caterers looking to scale their operations and refine their service offerings. Discover strategies on constructing a lucrative catering business plan , with guidance on enhancing operations, menu selections, and marketing approaches. Visit Metrobi’s website to delve deeper.
Use the Full-Service Catering Plan Template
Unless you’re planning to do everything yourself (spoiler: not a good idea), this template helps you plan out your dream team.
Use the Catering Growth Accelerator Template
Template 07: the full feast.
This is the big one – a comprehensive marketing plan for a full catering company template that covers everything from A to Z. If you’re ready to dive deep, this is for you. Planning to launch or manage a catering service? Ensure you have a detailed catering service business plan to guide you through every step.
Use the Full Feast Template
Specializing in events? This template focuses on planning for different types of clients at events and managing bookings at networking events.
Use the Event Ace Template
Thinking ahead? This template helps you map out marketing strategy detailed plan for how you’ll expand and grow over time.
Use the Growth Guru Template
Every serious business owner faces challenges. This template helps you identify potential risks to business goals and plan how to handle them.
Use the Risk Wrangler Template
Now is the time to take action and start creating your catering business plan. While examples and templates can be helpful starting points, it’s important to customize them to fit your unique business needs. Remember, your catering business plan template is a living document that can be updated and adjusted as your business grows and evolves. Learn how you can adapt and refine your catering business plan to ensure it aligns with your goals, enabling sustainable growth and success in the competitive catering landscape. Explore strategies to advance and update your catering business plan , positioning your venture for enduring prosperity and distinction in the bustling catering market.
Starting a catering business is super exciting, but it can also be a bit overwhelming. That’s where the catering business plan template comes in. They’re like your road map to success, whether you’re just starting to sketch out your catering equipment ideas or you’re ready to launch. So, grab the first operations plan template that fits your stage and start cooking up your new catering business and plan!
Why you must have a solid catering business plan
How will your catering business plan evolve as you grow your catering business
How to create a profitable catering business plan
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After a deadly stabbing at a children’s event in northwestern England, an array of online influencers, anti-Muslim extremists and fascist groups have stoked unrest, experts say.
By Esther Bintliff and Eve Sampson
Esther Bintliff reported from London, and Eve Sampson from New York.
Violent unrest has erupted in several towns and cities in Britain in recent days, and further disorder broke out on Saturday as far-right agitators gathered in demonstrations around the country.
The violence has been driven by online disinformation and extremist right-wing groups intent on creating disorder after a deadly knife attack on a children’s event in northwestern England, experts said.
A range of far-right factions and individuals, including neo-Nazis, violent soccer fans and anti-Muslim campaigners, have promoted and taken part in the unrest, which has also been stoked by online influencers .
Prime Minister Keir Starmer has vowed to deploy additional police officers to crack down on the disorder. “This is not a protest that has got out of hand,” he said on Thursday. “It is a group of individuals who are absolutely bent on violence.”
Here is what we know about the unrest and some of those involved.
The first riot took place on Tuesday evening in Southport, a town in northwestern England, after a deadly stabbing attack the previous day at a children’s dance and yoga class. Three girls died of their injuries, and eight other children and two adults were wounded.
The suspect, Axel Rudakubana , was born in Britain, but in the hours after the attack, disinformation about his identity — including the false claim that he was an undocumented migrant — spread rapidly online . Far-right activists used messaging apps including Telegram and X to urge people to take to the streets.
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In the new book "Write Your Own Business Plan," business expert Eric Butow takes the anxiety and confusion out of planning and offers an easy-to-follow roadmap to success.
After Texas Children's confirmed this week it's laying off 1,000 staff members, a state representative has raised questions about a contract the hospital lost.
If borrowing money, lenders will demand it. This workshop will show you how to estimate monthly sales and expenses using a free SCORE forecasting template. This workshop will cover the following topics: • How to estimate monthly sales • What expense categories need to be in your forecast and how to estimate them. • How to use the free SCORE template to automate your forecast.
After a deadly stabbing at a children's event in northwestern England, an array of online influencers, anti-Muslim extremists and fascist groups have stoked unrest, experts say.