Business Plan of Grab and Go Bakery
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The structure of the business plan below is in line with Longenecker (1997, p.134).
Executive Summary
Grab and Go Bakery will be located within a few meters from several schools. The founder of Grab and Go bakery is a second year student at the university. Grab and Go Bakery will be set up as a basic kiosk where basic baking, decorating and packaging of pastry will take place.
The mission of Grab and Go bakery, is to provide freshly baked pastries prepared in hygienic conditions and packaged in a convenient pack that a customer will consume at their own convenience and even store in.
Grab and Go Bakery intends to attract the students in the locality by setting up stands at strategic points with free samples. Grab and Go Bakery will ensure the online presence by posting a few videos online on how to bake simple pastry. These videos will be shared on social networking sites and instant messaging. Fliers will be passed on during parties and the word of mouth will be part of the marketing techniques. The packages for the pastries will also serve as marketing tools. Corman (1996, p.30)
Grab and Go Bakery will be registered as a sole proprietorship with two employees. Grab and Go Bakery is currently seeking for $250,000 in loans to set up the business. Majority of the funds will go into purchasing kitchen appliances, packaging materials and interior decorating. Some of the funds will go into paying rent for the kiosk and the two employees for the first three months in operation.
General Company Description
The business will be registered as a sole proprietorship, Stevenson (1999, p.211) with two employees. One of the two employees will be working part time during ‘rush-hours’. Rush hours refer to the moments in the day when heavy traffic of customers is expected, this is between 7am and 9am in the morning and from 4pm to 8pm in the evening. The other employee will work fulltime from 7am to 8pm. The owner of the business will be available during the rush hour period to help out at the kiosk and will be responsible for doing the accounts and record keeping for the day. The employees will be paid on a weekly basis.
Grab and Go Bakery will have an open plan, where the customers can view the preparation, baking and packaging of the pastries. Grab and Go Bakery intends to deliver, simple, delicious and satisfying pastries. Specialization will be on Cakes, doughnuts, cookies and buns. Grab and Go bakery will provide drinks alongside such as hot coffee and fresh juice.
The location of Grab and Go bakery is ideal because it is close to the campus where the owner goes to school and lives. This makes for easier monitoring and marketing as this is a familiar market for the owner. The location and the style of delivery are ideal as it meets the needs of the target market who are students. They can get fresh pastry within their locality and they can get proper packaging on time.
In the near future, Grab and Go Bakery will set out to provide fresh pastries to catering companies and local groceries. The business will also create a network by currently supplying fresh pastries to parties on campus and to the employees in the schools.
Products and services
Grab and Go Bakery products will be biscuits, buns, cakes, cookies and doughnuts. The shapes, favoring and size of the pastry will depend on the preference of the customers but a default standard will be made at any time for the customers in a rush.
Biscuits will come in two forms, the shortbread form and the shortcake form. Both will be readily available on display and if the customer wants certain adjustments to their biscuits, they will be allowed to place an order one hour in advance. They can stay at the kiosk to watch it get prepared or return later.
The buns baked early in the morning will have had their dough prepared well in advance the night before after closing shop. This is done to help the yeast get ample time to rise the dough.
The cakes are prepared into two forms, the traditional six inches by eleven inches and the cupcakes. The large cakes can be cut into smaller pieces for the customers to carry along in their packages.
The doughnuts will either be baked or fried. The doughnuts will have individual and special topping depending on the taste of the customer.
The cookies will have the most varieties. The cookie dough will also be rolled the night before and stored in the refrigerator for use the next day.
Market and competition
In as much as small businesses are closing down due to the high cost of operations such as rent and salaries. According to Holopainen (2006, p.75) the small bakery owners are re-inventing by selling from carts, delivering from their living premises. Grab and Go Bakery will set out to remain ahead of the competition through the unique experience they offer by displaying the process of baking and the unique touch of customized pastries. The special kind of packaging also sets the business apart as customers will go for comfort at a favorable price.
Management plan
The current management of the Grab and Go Bakery will revolve around the entrepreneur due to cost reasons. The entrepreneur will make the decisions that will affect the day-to-day operations of the business. The entrepreneur will also take stock of invoices on a daily basis.
The employees will be responsible for the preparation, baking and packaging of the pastry. They will also embark on cleaning the premises.
Balance Sheet 2015 2016
Assets
Cash 19848 44480
Accounts Receivable 17188 28438
Total Current Assets
Fixed Assets 133000 133000
Accumulated Depreciation 12467 24933
Net Fixed Assets
Total Assets
Liabilities
Accounts Payable & Accrued Expenses 21003 30240
Total Liabilities
Owners Equity
Unrestricted Net Assets 250000 275000
Retained Earnings/Deficit (113434) (124256)
Net Income (113434) (10822)
Total Equity 136566 150744
Liabilities + Net Equity 157569 180984
Income Statement 2015 2016
Revenue
Wholesale 125250 240250
Café/retail 180750 289031
Specials 12000 14000
Total Revenue 318000 543281
Cost of Goods Sold
Labour 202597 227470
Ingredients 111300 179283
Total Cost of Goods 313897 406753
Gross Margin $ 4103 136528
Gross Margin % 1% 25%
Operating Expenses
G&A 62585 93652
Depreciation 12467 12467
Total Operating Expenses 75052 106119
Operating Profit/ (Loss) (70949) 30410
Financial Projections Key Assumptions
Initial Capital Required - $250,000 including $106,000 for the interior decoration and improvement of the kiosk. $27,000 to be spent on the kitchen appliances. The remainder to be working capital.
Revenue Growth- The growth in two years for the Grab and Go Bakery and wholesale operations due to the small revenue base.
Labour expenses- The rate at which cash burns is approximately $21,000 per month. This includes payment of all the employees. Other labour expenses include taxes on payroll and the health benefits for the employees.
Operating expenses – Ingredient Cost of goods sold is set to start at 35% of the earnings, narrowing to 31% by the second year. The remaining expenses represent the predicted fixed costs such as the rent of Kiosk, the utilities, health insurance for employees and the maintenance of equipment.
Working Capital – The initial working capital is $117,000 which is enough to cover the fixed costs for six months
Financing
The presented business plan seeks finances that will amount to $275,000. The funds are to be used in renovations of the kiosk and purchase of the equipments. The funds are also necessary to sustain the operating losses in the initial months. Grab and Go Bakery, hopes to source for capital from the existing retail sales that the intended owner makes from their personal quarters and also the wholesale deliveries of pastries that the intended owner makes during the weekends or during the weekdays on order.
The funds will also be sourced from In-kind donations of kitchen appliances, equipment and also the upgrade of the kiosk. The intended owner may get functional appliances from some of the customers who hope to see Grab and Go bakery take off as a business.
Social investors such as you will be the greatest contributors. After analysis of the business plan and the operations that the intended owner already has in place, the entrepreneurial metrics are available for analysis. Dinsmore (1993, p.107).
Grab and Go Bakery has raised $145,000 in funds committed to them by a non- profit foundation dealing with funding of small and medium enterprises. The business is also targeting $250,000 from you as the social investor. According to Hatten (1997, p.40) if the business does not get the intended capital in time, Grab and Go Bakery has committed for the non-profit foundation, a loan on working capital. Operations will take off as the owner of the Kiosk has offered the premises as in-kind donation on rent for three months. The catering companies that are supplied with wholesale pastry by the intended owner of Grab and Go Bakery will also donate in-kind donations of the basic kitchen appliances needed to do the baking.
Regulatory Environment
Sarbanes-Oxley Act, Title III, section 302 mandates the executives of an institution to take personal responsibility for the accuracy and competence of the financial reports. The entrepreneur will enlist the services of an external auditor for consultation purposes to ensure that the entrepreneur is keeping his records in line. This is necessary to ensure the business is working in line with the federal law.
Sabanes-Oxley Act, section 1001 states that the chief executive officer who in this case is the entrepreneur should sign the company tax returns. This will be followed to the letter as the responsibility for the accounts lies wholly with the entrepreneur. Ghauri (1995, p.63).
Sabanes-Oxley Act, Title IV enhances the requirements for the reporting of financial transactions. These financial transactions records include off-balance sheet transactions and figures of the pro-forma. It requires the internal control of the financial reports for accuracy purposes. The timely reporting of material changes is required. The latter will be executed as the entrepreneur will be dealing with the day –to day operations and hence will report any changes on time.