buisness paper (1)

8/3/2019 Buisness Paper (1)

http://slidepdf.com/reader/full/buisness-paper-1 1/20

Business plan

Holy Doughnuts

423 Route 59

Monsey, NY 10952

845-825-4226

Joseph Faerber

[email protected]



I. Table of Contents

I. Table of Contents

II. Executive Summary 2

III. Company Background 3-4

IV. Products 5

V. Marketing Plan 6-13

VI. Operational Plan 14

VII. Management and Organization 15

VIII. Personal Financial Statement 16

IX. Startup Expenses and Capitalization 17

X. Financial Plan 18

II. Executive Summary



Holy Doughnuts is a start-up coffee and bakery retail

establishment located in Monsey, New York. Holy Doughnuts

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

guaranteed freshness of all of their products.

Additionally, Holy Doughnuts 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.

III. General Company Description



Mission Statement

The Doughnut Shop’s mission is to become the recognized leader

in its targeted market for quality donuts and beverages.

Company Background

Holy Doughnuts is a new business venture. The need for a

neighborhood cholov yisroel doughnut shop that specializes in

producing fresh products a couple of times a day was identified in

this location and after further research a decision was made to

pursue this venture. In the next nine months the company intends

to open for business and to implement a targeted advertising. The

company anticipates 10 percent annual sales growth, and at the

end of five years the company anticipates gross sales of

$250,000.

The goal of this business venture is to deliver a quality product

to customers in a friendly and efficient manner. Holy Doughnuts

will market their products to the orthodox community ranging in

age from eighteen - forty five. The doughnut industry appears to

be on the rise, because consumers find comfort in doughnuts.

Some of the reasons consumers are seeking their comfort in



doughnuts is new products have been developed without trans

fats, in smaller portion sizes and new flavors.

Holy doughnuts will succeed as a business venture for several

reasons. The location will be along the business sector of the town

which will help generate a substantial amount of business from

the town’s residents. Additionally, our keen ability to assist our

customers in a quick and efficient manner will help insure that our

customers are in and out without bother.

The store’s major competitive strength without a doubt would

have to be the freshness of our products. The products will be

made several times throughout the day. There are many

competitors in this type of business including bakeries, bagel

stores, and supermarkets. However, in terms of freshness, there

products are mediocre.

I bring to the business some form of experience in being a part

time cashier for a bakery for a single summer. Holy Doughnuts

will be a sole proprietorship based on the decision to be my own

boss and the capability to make decisions that I feel will benefit

the company based on past experiences and judgments.



IV. The Product

At Holy Doughnuts our products will consist of a variety of

doughnuts, regular and low fat muffins, and coffee.

Upon it's inception, Holy Doughnuts will set it's pricing to be

competitive within the market to cover startup costs. However,

over time, with increased sales, Holy doughnut will lower it's

prices a bit under the standard market price. The reasoning for

this will be based on the philosophy that a quality product offered

at a discounted price will produce more sales based on the

increases of demand.

V. Marketing Plan

Economics - Within the United States, there are more than seven

thousand businesses that operate one or more retail locations

that specialize in the sale of donuts and pastries. Each year, these

businesses aggregately generate more than three billion of

revenues and provide jobs to more than seventy thousand



people. Currently, the economic market condition in the United

States is mediocre. However, donut shops operate with great

economic stability as people continue to purchase donuts/coffee,

because they are inexpensive and there are many different

flavors to choose from.

The growth potential for the business is substantial, because the

city of Monsey, New York lacks a doughnut shop that delivers

fresh products to the public.

A major challenge that the business will face is consumer

acceptance and brand recognition. The owner will have to

experiment with many different ingredients in order to develop

the perfect recipe to satisfy the customers, and receive positive

feedback from the customers. A major focus in the business will

be the quality of the staff. This will include bakers, kitchen staff,

and cashiers. Every member of our staff will be interviewed

thoroughly and will have to be prepared to give one hundred

percent to their fellow co-workers and customers. A major

obstacle for the doughnut industry is the unhealthiness of the

product. Many people are health conscious and very careful about



the foods that they consume on a daily basis. Therefore, the

business will offer low fat products on their menu to

accommodate this type of customer in the marketplace.

Product - Holy Doughnuts will offer a variety of doughnuts,

(including mini doughnut holes), regular and low fat muffins, and

brewed coffee. All of our products will be made with superior

ingredients and quality.

Customers - Our target audience will specifically be made up of

males and females ranging in age from eighteen - forty five. The

middle class will account for up to forty five percent of all Holy

Doughnuts purchases. Our target audience will earn in between

forty thousand and a hundred thousand dollars annually, and a

large part of this demographic will come from family units. A

typical customer in our doughnut shop will be a working individual

who desires to start their day with a fresh doughnut/muffin, and a

hot coffee, to give him/her energy to get through the morning.

Competition - The competitors of the business will include

bakeries, bagel stores, and supermarkets. Competition with other



businesses will relate to the sales of doughnuts, muffins, and

coffee.

Competitive Analysis - The business will offer a limited of

products, relative to it’s competitors. This will serve as a

disadvantage, because the customer will not have the option of

choosing from a variety of different products.

The price of our products will be competitive at the start of the

business, but will be decreased over time. This will serve as a

major advantage for the business, because it will boost demand

and help generate the necessary funds needed to keep our

business striving.

The business will pride itself on treating every customer with

the utmost respect and quality of service. The reasoning for this

will be based on the premise that a product can be undeniably

superior, but if the customer is not treated properly the business

will not be a success.

Upon it’s inception, the company’s reputation will serve as a

major disadvantage, because the business will not be familiar to

the general public. However, over time, with the success of the



product, and development of a customer base, the business

hopes to earn a positive name for itself.

The location of the business will be along a major busy street

that connects several towns together. This will serve as a major

advantage for the business, because it will insure easy access to

all those who wish to visit the store.

The business will be kept clean and organized at all times. This

will be based on the premise that a customer’s first impression is

of prime importance, and must be satisfied in order to insure any

type of success in business.

Promotion - A large sign will be posted outside the business

displaying the grand opening of the new store. Upon it’s

inception, the business will advertise weekly in local jewish

publications, post flyers, hand out business cards, and use word

of mouth, to develop a customer base in the city of Monsey. The

business will offer discounts for their products, such as coupon

vouchers to their regular customers, and special pricing to

schools or businesses that order in bulk. Holy Doughnuts will be



popular among the general public, because it will stress the

importance of the customer’s needs and preferences.

Pricing - Upon it's inception, Holy Doughnuts will set it's

pricing to be competitive within the market to cover startup costs.

Over time, however, with increased sales, the business would like

to lower it's prices a bit under the standard market price. The

business believes in the philosophy that a customer is willing to

go elsewhere if the price is not appealing. Therefore, the future

plan of the business is to decrease the prices of their products,

and make up the earnings in demand.

The business will pride itself on quality customer service and

professionalism. This will help insure that the customer visit the

business often and spread the word to his/her friends.

Proposed Location - The location of the business will be

important, because the majority of the customers will be working

people going to the store to purchase a quick breakfast in route to

their job location. The business will be located along a busy street

connecting several towns to insure easy access to all of it’s



customers. Parking on site will be limited, but the business will

contain a drive-thru pickup option to accommodate extra traffic.

Distribution Channels - Holy doughnuts will strive to become a

major competitor in the retail business of selling various baked

goods and beverages.

Sales Forecast -

Year 1 Year 2 Yea

Unit Sales

Espresso Drinks 86,000 94,600 104,

Pastry Items 135,000 148,500 163,

Total Unit Sales 221,000 243,100 267,3

Unit Prices Year 1 Year 2 Yea

Espresso Drinks $3.00 $3.00 $2

Pastry Items $1.10 $1.10 $1

Sales

Espresso Drinks $100,000 $115,000 $135,

Pastry Items $300,000 $360,000 $425,



Total Sales $400,000 $475,000 $560,0

Direct Unit Costs Year 1 Year 2 Yea

Espresso Drinks $0.25 $0.26 $0

Pastry Items $0.50 $0.53 $0

Direct Cost of Sales

Espresso Drinks $33,750 $38,981 $45,

Pastry Items $43,000 $49,665 $57,

Subtotal Direct Cost of Sales $76,750 $88,646 $102,3

Personnel plan

Year 1 Year 2 Year 3

Owner- Manager $80,000 $84,750 $89,250

Pastry Bakers $55,800 $57,840 $60,920

Staff Members $30,000 $32,500 $35,700

Total People 9 9 9

Total Payroll

$165,80

0

$175,09

0 $185,870



VI. Operational plan -

Production – All of the store’s products will be made on site. The

company’s production costs will vary with demand of the product.

If the product sells, the company will invest in machinery and

supplies that can produce more baked goods at a faster rate.

Additionally, the company will encourage customer suggestions

about possible new flavors and variations of the products.

Location – The business has selected a facility that contains five

thousand square feet. Power and other utilities will be necessary

to run this business efficiently. The business will operate Sunday -

Thursday between the hours of 6 a.m. and 7 p.m. and Friday

between the hours of 6 a.m. and 2 p.m.

Personnel - The business will employ two full time bakers, two

full time kitchen staff members, three counter/drive-thru window

staff members, one mashgiach, and one owner. The bakers will be

required to have a minimum of two years experience in the

bakery/restaurant business. The kitchen and drive-thru staff will

be hired without any experience necessary, provided that they

will be committed to their fellow staff members and customers.



The pay structure will vary from earnings of thirty thousand a

year to eighty thousand a year.

Inventory - The business will order bakery equipment that will

help produce the finished product.

Suppliers - Belshaw Adametic Bakery group is headquarted in a

120,000 square foot facility located in Seattle, Washington. The

group has supplied world class bakery equipment to an

international customer base for more than eighty years.

Credit Policies – The business will not sell their products on credit,

because the products will be relatively inexpensive to purchase.

VII. Management and Organization

-

The owner of the company will manage the store on a daily basis.

Professional and Advisory Support - The business will employ an

accountant to record all the daily transactions, and an attorney to

assess the legal fees that will be necessary to incorporate the

company.



VIII. Personal Financial Statement

Assumptions - Holy Doughnuts will have an annual revenue

growth rate of 10% per year.

The Owner will acquire $100,000 of debt funds to develop the

business.

The loan will have a 10 year term with a 9% interest rate.

Financing

Equity contributions

Management investment - $25,000

Total equity Financing - $25,000

Banks and Lenders

Banks and Lenders - $75,000

Total Debt Financing - $75,000

Total Financing - $100,000

Year1

Year 2 Year 3



Short-Term Interest Rate 9%

9% 9%

Long - Term Interest Rate 10%

10% 10%

IX. Startup Expenses and

Capitalization

Equipment - $6,000

Rent - $5,000

Advertising - $5,000

Renovation - $25,000

Other - $38,000

Unforeseen Costs - $7,500

Total - $86,500

The Company will not go public until they have successfully

found a niche in their market. If this occurs, stockholders will be

guaranteed a 4% return for every share that they purchase.



X. Financial Plan -

12 Month Profit and Loss projection –

Sales - $400,000

Gross Margin - $300,000

Net Profit - $135,000

Projected Cash Flow

Total Cash Inflow - $340,000

Total Cash Outflow - $250,000

Net Cash Flow - $90,000

Balance Sheet

Total Assets - $190,000

Total Liabilities - $130,000

Net worth - $60,000

Break- Even Analysis



Monthly Revenue - $40,000

Yearly Revenue - $480,000

buisness paper (1)

Documents