Our lecture today is on Writing A Business Plan (Chapter 4). We have given an assignment on business plan & business model. There task are :
1. Search an outstanding Business Plan of your choice and upload it in your Group's Blog.
2. Brainstorm among your company members and Develop a Business Model for a typical business of your choice and upload it in your Group's Blog.
From what we have discuss, we decide to do on 'bakery". For details, www.bplans.com/bakery_business_plan
BUSINESS PLAN
1.0 Executive Summary
Introduction
Jolly's Java and Bakery (JJB) is a start-up coffee and bakery retail establishment located in southwest Washington. JJB expects to catch the interest of a regular loyal customer base with its broad variety of coffee and pastry products. The company plans to build a strong market position in the town, due to the partners' industry experience and mild competitive climate in the area. JJB aims to offer its products at a competitive price to meet the demand of the middle-to higher-income local market area residents and tourists.
The Company
JJB is incorporated in the state of Washington. It is equally owned and managed by its two partners.
Mr. Austin Patterson has extensive experience in sales, marketing, and management, and was vice president of marketing with both Jansonne & Jansonne and Burper Foods. Mr. David Fields brings experience in the area of finance and administration, including a stint as chief financial officer with both Flaxfield Roasters and the national coffee store chain, BuzzCups.
The company intends to hire two full-time pastry bakers and six part-time baristas to handle customer service and day to day operations.
Products and Services
JJB offers a broad range of coffee and espresso products, all from high quality Columbian grown imported coffee beans. JJB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail.
The bakery provides freshly prepared bakery and pastry products at all times during business operations. Six to eight moderate batches of bakery and pastry products are prepared during the day to assure fresh baked goods are always available.
The Market
The retail coffee industry in the U.S. has recently experienced rapid growth. The cool marine climate in southwest Washington stimulates consumption of hot beverages throughout the year.
JJB wants to establish a large regular customer base, and will therefore concentrate its business and marketing on local residents, which will be the dominant target market. This will establish a healthy, consistent revenue base to ensure stability of the business. In addition, tourist traffic is expected to comprise approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.
Financial Considerations
JJB expects to raise $110,000 of its own capital, and to borrow $100,000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required.
JJB anticipates sales of about $491,000 in the first year, $567,000 in the second year, and $655,000 in the third year of the plan. JJB should break even by the fourth month of its operation as it steadily increases its sales. Profits for this time period are expected to be approximately $13,000 in year 1, $36,000 by year 2, and $46,000 by year 3. The company does not anticipate any cash flow problems.
1.1 Mission
JJB aims to offer high quality coffee, espresso, and pastry products at a competitive price to meet the demand of the middle- to higher-income local market area residents and tourists.
1.2 Keys to Success
Keys to success for JJB will include:
- Providing the highest quality product with personal customer service.
- Competitive pricing.
2.0 Company Summary
JJB is a bakery and coffee shop managed by two partners. These partners represent sales/management and finance/administration areas, respectively. The partners will provide funding from their own savings, which will cover start-up expenses and provide a financial cushion for the first months of operation. A ten-year Small Business Administration (SBA) loan will cover the rest of the required financing. The company plans to build a strong market position in the town, due to the partners' industry experience and mild competitive climate in the area.
2.1 Company Ownership
JJB is incorporated in the state of Washington. It is equally owned by its two partners.
2.2 Start-up Summary
JJB is a start-up company. Financing will come from the partners' capital and a ten-year SBA loan. The following chart and table illustrate the company's projected initial start-up costs.
3.0 Products
JJB offers a broad range of coffee and espresso products, all from high quality Columbian grown imported coffee beans. JJB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail.
The bakery provides freshly prepared bakery and pastry products at all times during business operations. Six to eight moderate batches of bakery and pastry products are prepared during the day to assure fresh baked goods are always available.
4.0 Market Analysis Summary
JJB's focus is on meeting the demand of a regular local resident customer base, as well as a significant level of tourist traffic from nearby highways.
4.1 Market Segmentation
JJB focuses on the middle- and upper-income markets. These market segments consume the majority of coffee and espresso products.
- Local Residents : JJB wants to establish a large regular customer base. This will establish a healthy, consistent revenue base to ensure stability of the business.
- Tourists : Tourist traffic comprises approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.
4.1.1 Market Analysis
The chart and table below outline the total market potential of the above described customer segments.
4.2 Target Market Segment Strategy
The dominant target market for JJB is a regular stream of local residents. Personal and expedient customer service at a competitive price is key to maintaining the local market share of this target market.
4.2.1 Market Needs
Because Washington has a cool climate for eight months out of the year, hot coffee products are very much in demand. During the remaining warmer four months of the year, iced coffee products are in significantly high demand, along with a slower but consistent demand for hot coffee products. Much of the day's activity occurs in the morning hours before ten a.m., with a relatively steady flow for the remainder of the day.
4.3 Service Business Analysis
The retail coffee industry in the U.S. has recently experienced rapid growth. The cool marine climate in southwest Washington stimulates consumption of hot beverages throughout the year. Coffee drinkers in the Pacific Northwest are finicky about the quality of beverages offered at the numerous coffee bars across the region. Despite low competition in the immediate area, JJB will position itself as a place where customers can enjoy a cup of delicious coffee with a fresh pastry in a relaxing environment.
4.3.1 Competition and Buying Patterns
Competition in the local area is somewhat sparse and does not provide nearly the level of product quality and customer service as JJB. Local customers are looking for a high quality product in a relaxing atmosphere. They desire a unique, classy experience.
Leading competitors purchase and roast high quality, whole-bean coffees and, along with Italian-style espresso beverages, cold-blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, and a line of premium teas, sell these items primarily through company-operated retail stores. In addition to sales through company-operated retail stores, leading competitors sell coffee and tea products through other channels of distribution (specialty operations).
Larger chains vary their product mix depending upon the size of each store and its location. Larger stores carry a broad selection of whole bean coffees in various sizes and types of packaging, as well as an assortment of coffee- and espresso-making equipment and accessories such as coffee grinders, coffee makers, espresso machines, coffee filters, storage containers, travel tumblers and mugs. Smaller stores and kiosks typically sell a full line of coffee beverages, a more limited selection of whole-bean coffees, and a few accessories such as travel tumblers and logo mugs. During fiscal year 2000, industry retail sales mix by product type was approximately 73% beverages, 14% food items, eight percent whole-bean coffees, and five percent coffee-making equipment and accessories.
Technologically savvy competitors make fresh coffee and coffee-related products conveniently available via mail order and online. Additionally, mail order catalogs offering coffees, certain food items, and select coffee-making equipment and accessories, have been made available by a few larger competitors. Websites offering online stores that allow customers to browse for and purchase coffee, gifts, and other items via the Internet have become more commonplace as well.
5.0 Strategy and Implementation Summary
JJB will succeed by offering consumers high quality coffee, espresso, and bakery products with personal service at a competitive price.
5.1 Competitive Edge
JJB's competitive edge is the relatively low level of competition in the local area in this particular niche.
5.2 Sales Strategy
As the chart and table show, JJB anticipates sales of about $491,000 in the first year, $567,000 in the second year, and $655,000 in the third year of the plan.
6.0 Management Summary
Austin Patterson has extensive experience in sales, marketing, and management, and was vice president of marketing with both Jansonne & Jansonne and Burper Foods. David Fields brings experience in the area of finance and administration, including a stint as chief financial officer with both Flaxfield Roasters and the national coffee store chain, BuzzCups.
6.1 Personnel Plan
As the personnel plan shows, JJB expects to make significant investments in sales, sales support, and product development personnel.
7.0 Financial Plan
JJB expects to raise $110,000 of its own capital, and to borrow $100,000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required. In this financial plan, they implement 5 type of planning which are :
- Break-even Analysis
- Projected Profit & Loss
- Projected Cash Flow
- Balanced Sheet
- Business Ratios
BUSINESS MODEL
What?
UTM’s Bakery Retail Shop is going to be the first retail shop that caters bread in UTM Skudai campus where students, lecturers and staff can buy bread, pizza and even cakes for special occasions on order.
Why?
Bakery products have been popular snack for students. Especially, if we consider that majority of international students in UTM are from Middle East, there is a big gap in the market in UTM in producing bakery products. The only available bread is sandwich bread which is full of additive and most of the students keep complaining because they can only buy loafs of bread in Jusco Taman U. Hence, our bakery retail shop will take this opportunity to fill in this gap in UTM.
How?
Since our shop will be opened in UTM Student’s Mall, the business will be handled by students. So that students can get part time jobs and the cost of employees will be low. The main product of our bakery shop will be bread which we will order from bakery of Jusco Taman U. Besides, there will be pizzas and cakes will be catered in case of order by customers. All our products will be fresh as we will bring products in two times a day.
Objectives
Our first business objective is to provide bakery products for students. Due to the limitation of bakery products in UTM, students will be happy with our service. As the location of bakery shop will be in Student Mall in UTM, students who sit and eat at the food court there, can also have fresh bread beside their dish or they can also take away.
Secondly, we aim to provide job opportunities for students; thus, all employees and team of bakery will be consisting of students only. Students do not need to look for job far away from their hostels and faculties.
Secondly, we aim to provide job opportunities for students; thus, all employees and team of bakery will be consisting of students only. Students do not need to look for job far away from their hostels and faculties.
Market
Our market focus on students, lecturers, staff and visitors due to localized in UTM campus. As our bakery shop will be in central of the campus, it is expected to have big number of customers in any time of the day; especially during convocations and festivals being held in the university campus.
Competitors
Our potential competitors are minimarts in arcades in some places of campus and Jusco Taman U where students can find several types of bakery products.
Sales & Marketing Strategy
In order to be successful with our bakery, we believe that we need to develop good marketing and sales strategies. Our customers will be students, lecturers, staff and visitors. We are expecting to have more of international students in our bakery. Our location is in central point and nearby students’ hostels. We offer fresh and daily bakery products and opportunity to order cakes for students’ special occasions so that they don’t need to go to shopping malls of bakeries outside of the campus and they can save more money. Besides, our prices will be same as it is in bakery of Jusco as we will buy their products in wholesale price. Since we know our market, it is easy and low costly to advertise ourselves at certain advertisement boards and at UTM website.
