Bakery Business Plan Jollys Java And Bakery

Bakery Business Plan Jollys Java And BakeryJollys Java and Bakery (JJB) is a start-up java and bakery retail establishment placed in souwest Washington. JJB expects to catch the interest of a regular loyal customer buttocks with its broad variety of burnt umber and pastry dough products. The company plans to gain a strong foodstuff position in the town, due to the partners industry experience and mild competitive climate in the ara.JJB aims to offer its products at a competitive legal injury to meet the demand of the middle-to towering uper-income local market area residents and tourers.The associationJJB is incorporated in the state of Washington. It is equally owned and managed by its both 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 palm brings experience in the area of finance and administration, including a s guttert as c hief 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 half-time baristas to handle customer service and twenty-four hours to day operations.Products and ServicesJJB offers a broad range of coffee and espresso products, all from high quality Columbian openhanded imported coffee beans. JJB caters to all of its customers by providing separately customer coffee and espresso products made to suit the customer, down to the smallest detail.The bakery provides impudently 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 sunbaked goods are always available.The martThe 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 forget 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 pass judgment to comprise approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.Financial ConsiderationsJJB expects to scold $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 stern 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 $46,00 0 by year 3. The company does not anticipate any cash flow problems.Company SummaryJJB is a bakery and coffee shop managed by two partners. These partners represent sales/management and finance/administration areas, respectively. The partners will provide financial condense from their own savings, which will covering 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 OwnershipJJB is incorporated in the state of Washington. It is equally owned by its two partners.2.2 Company HistoryJJB is a start-up company. Financing will come from the partners capital and a ten-year SBA loan. The following map and table illustrate the companys projected initial start-up costs.ProductsJJB 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.Market Analysis SummaryJJBs 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 SegmentationJJB focuses on the middle- and upper-income markets. These market segments consume the majority of coffee and espresso products.Local ResidentsJJB wants to establish a large regular customer base. This will establish a healthy, consistent revenue base to ensure stability of the business.TouristsTourist traffic compris es 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 AnalysisThe chart and table below outline the total market potential of the above described customer segments. 4.2 Target Market Segment schemeThe 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 NeedsBecause 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 gradual but consistent demand for hot coffee products. Much of the days activity occurs in the morning hours before ten a.m., with a relatively potent flow for the remainder of the day.4.3 Service Business AnalysisThe retail coffee ind ustry 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 PatternsCompetition 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 eq uipment, 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(prenominal) 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 much 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 percen t 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.Strategy and death penalty SummaryJJB will succeed by offering consumers high quality coffee, espresso, and bakery products with personal service at a competitive price.5.1 Competitive adjoinJJBs competitive edge is the relatively low level of competition in the local area in this particular niche.5.2 gross revenue StrategyAs the chart and table show, JJB anticipates sales of about $491,000 in the first year, $567,000 in the second year, a nd $655,000 in the third year of the plan.Sales Forecast200120022003Unit SalesEspresso Drinks135,000148,500163,350pastry Items86,00094,600104,060Other000 add up Unit Sales221,000243,100267,410Unit Prices200120022003Espresso Drinks$3.00$3.15$3.31Pastry Items$1.00$1.05$1.10Other$0.00$0.00$0.00SalesEspresso Drinks$405,000$467,775$540,280Pastry Items$86,000$99,330$114,726Other$0$0$0 broad(a) Sales$491,000$567,105$655,006Direct Unit speak tos200120022003Espresso Drinks$0.25$0.26$0.28Pastry Items$0.50$0.53$0.55Other$0.00$0.00$0.00Direct Cost of SalesEspresso Drinks$33,750$38,981$45,023Pastry Items$43,000$49,665$57,363Other$0$0$0Subtotal Direct Cost of Sales$76,750$88,646$102,386Management SummaryAustin 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 Flaxfi eld Roasters and the national coffee store chain, BuzzCups.6.1 force out PlanAs the personnel plan shows, JJB expects to make significant investments in sales, sales support, and product development personnel.Personnel Plan200120022003Managers$100,000$105,000$110,250Pastry Bakers$40,800$42,840$44,982Baristas$120,000$126,000$132,300Other$0$0$0Total People101010Total Payroll$260,800$273,840$287,532Financial PlanJJB 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.7.1 Break-even AnalysisJJBs Break-even Analysis is based on the average of the first-year figures for total sales by units, and by operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. These conservative assumptions make for a more accurate estimate of real risk. JJB should break even by the fourth month of its operation as it steadily increases its sales.Break-even Ana lysisMonthly Units Break-even17,255Monthly Revenue Break-even$38,336AssumptionsAverage Per-Unit Revenue$2.22Average Per-Unit Variable Cost$0.35Estimated Monthly firm Cost$32,3437.2 Projected Profit and LossAs the Profit and Loss table shows, JJB expects to continue its steady growth in profitability over the next three years of operations.Pro Forma Profit and Loss200120022003Sales$491,000$567,105$655,006Direct Cost of Sales$76,750$88,646$102,386Other$0$0$0Total Cost of Sales$76,750$88,646$102,386 receipts Margin$414,250$478,459$552,620Gross Margin %84.37%84.37%84.37%ExpensesPayroll$260,800$273,840$287,532Sales and Marketing and Other Expenses$27,000$35,200$71,460Depreciation$60,000$69,000$79,350Utilities$1,200$1,260$1,323Payroll Taxes$39,120$41,076$43,130Other$0$0$0Total Operating Expenses$388,120$420,376$482,795Profit Before Interest and Taxes$26,130$58,083$69,825EBITDA$86,130$127,083$149,175Interest Expense$10,000$9,500$8,250Taxes Incurred$3,111$12,146$15,650 moolah Profit$13,01 9$36,437$45,925Net Profit/Sales2.65%6.43%7.01%7.3 Projected currency string upThe cash flow projection shows that provisions for ongoing expenses are adequate to meet JJBs needs as the business generates cash flow sufficient to support operations.Pro Forma Cash Flow200120022003Cash ReceivedCash from OperationsCash Sales$491,000$567,105$655,006Subtotal Cash from Operations$491,000$567,105$655,006Additional Cash ReceivedSales Tax, VAT, HST/GST Received$0$0$0New period Borrowing$0$0$0New Other Liabilities (interest-free)$0$0$0New Long-term Liabilities$0$0$0Sales of Other on-line(prenominal) Assets$0$0$0Sales of Long-term Assets$0$0$0New Investment Received$0$0$0Subtotal Cash Received$491,000$567,105$655,006Expenditures200120022003Expenditures from OperationsCash Spending$260,800$273,840$287,532Bill Payments$143,607$186,964$237,731Subtotal Spent on Operations$404,407$460,804$525,263Additional Cash SpentSales Tax, VAT, HST/GST Paid Out$0$0$0Principal Repayment of Current Borrowing$0$ 0$0Other Liabilities Principal Repayment$0$0$0Long-term Liabilities Principal Repayment$0$10,000$15,000Purchase Other Current Assets$0$0$0Purchase Long-term Assets$0$20,000$20,000Dividends$0$0$0Subtotal Cash Spent$404,407$490,804$560,263Net Cash Flow$86,593$76,301$94,744Cash Balance$156,593$232,894$327,6377.4 Balance SheetThe following is a projected Balance Sheet for JJB.Pro Forma Balance Sheet200120022003AssetsCurrent AssetsCash$156,593$232,894$327,637Other Current Assets$12,000$12,000$12,000Total Current Assets$168,593$244,894$339,637Long-term AssetsLong-term Assets$65,000$85,000$105,000Accumulated Depreciation$60,000$129,000$208,350Total Long-term Assets$5,000($44,000)($103,350)Total Assets$173,593$200,894$236,287Liabilities and Capital200120022003Current LiabilitiesAccounts Payable$14,574$15,438$19,907Current Borrowing$0$0$0Other Current Liabilities$0$0$0Subtotal Current Liabilities$14,574$15,438$19,907Long-term Liabilities$100,000$90,000$75,000Total Liabilities$114,574$105,438 $94,907Paid-in Capital$110,000$110,000$110,000Retained Earnings($64,000)($50,981)($14,544)Earnings$13,019$36,437$45,925Total Capital$59,019$95,456$141,381Total Liabilities and Capital$173,593$200,894$236,287Net Worth$59,019$95,456$141,3817.5 Business RatiosThe following table represents key ratios for the retail bakery and coffee shop industry. These ratios are intractable by the Standard Industry Classification (SIC) Index code 5812, Eating Places.Ratio Analysis200120022003Industry ProfileSales Growth0.00%15.50%15.50%7.60%Percent of Total AssetsOther Current Assets6.91%5.97%5.08%35.60%Total Current Assets97.12%121.90%143.74%43.70%Long-term Assets2.88%-21.90%-43.74%56.30%Total Assets100.00%100.00%100.00%100.00%Current Liabilities8.40%7.68%8.42%32.70%Long-term Liabilities57.61%44.80%31.74%28.50%Total Liabilities66.00%52.48%40.17%61.20%Net Worth34.00%47.52%59.83%38.80%Percent of SalesSales100.00%100.00%100.00%100.00%Gross Margin84.37%84.37%84.37%60.50%Selling, General Administrative Expenses74.74%71.43%71.39%39.80%Advertising Expenses0.49%1.76%6.87%3.20%Profit Before Interest and Taxes5.32%10.24%10.66%0.70%Main RatiosCurrent11.5715.8617.060.98Quick11.5715.8617.060.65Total Debt to Total Assets66.00%52.48%40.17%61.20%Pre-tax Return on Net Worth27.33%50.90%43.55%1.70%Pre-tax Return on Assets9.29%24.18%26.06%4.30%Additional Ratios200120022003Net Profit Margin2.65%6.43%7.01%n.aReturn on Equity22.06%38.17%32.48%n.aActivity RatiosAccounts Payable Turnover10.7912.1712.17n.aPayment eld272927n.aTotal Asset Turnover2.832.822.77n.aDebt RatiosDebt to Net Worth1.941.100.67n.aCurrent Liab. to Liab.0.130.150.21n.aLiquidity RatiosNet Working Capital$154,019$229,456$319,731n.aInterest coverage2.616.118.46n.aAdditional RatiosAssets to Sales0.350.350.36n.aCurrent Debt/Total Assets8%8%8%n.aAcid Test11.5715.8617.06n.aSales/Net Worth8.325.944.63n.aDividend Payout0.000.000.00n.a