Post on 06-Apr-2018
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Business plan
Holy Doughnuts
423 Route 59
Monsey, NY 10952
845-825-4226
Joseph Faerber
jfaerbers@gmail.com
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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,
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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
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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.
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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.
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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
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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.
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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
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Monthly Revenue - $40,000
Yearly Revenue - $480,000
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