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The Bakery Business Plan Heather Haeusler, Whitney Block, Nicole Greenbank, & Andrew Spencer.

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Presentation on theme: "The Bakery Business Plan Heather Haeusler, Whitney Block, Nicole Greenbank, & Andrew Spencer."— Presentation transcript:

1 The Bakery Business Plan Heather Haeusler, Whitney Block, Nicole Greenbank, & Andrew Spencer.

2 Project Overview The bakery is proposed as a means of additional income for the family farm. Products are homemade and of high quality. The bakery will be run the women family.

3 Operations Plan

4 Start Up The bakery will be constructed on the farm. Construction will commence in January The bakery is scheduled to open in May 2006.

5 Organizational Structure Board of Directors President/Manager Head Baker Assistant Baker/Delivery Person Assistant Baker

6 Floor Plan

7 Work Plan 4:00am – Start Baking 8:00am – Bakery Opens Leave for farmers market: 5:00 pm Bakery Closes

8 Quality Control Program Regulations –Local –Consumer Protection Branch –CFIA –Labour –Sanitation

9 Capital Budget DescriptionEstimated Source of Estimates Cost ($)Obtained Buildings: 1000ft 2 Bakery $ 85,000Humboldt Lumber Mart Ltd Total Building Costs $ 85,000 Equipment: Oven $ 2,400Ace Mart Restaurant Supply Co Proofer $ 2,000Ace Mart Restaurant Supply Co Showcase $ 560Ace Mart Restaurant Supply Co Refrigerator $ 2,600Sears Canada Freezer $ 750Sears Canada Used Mixers 20qt $ 3,200Nicholson Equipment Ltd. Shelves/dollies $ 525Ace Mart Restaurant Supply Co Additional equipment $ 5,000 Furniture $ 640Ace Mart Restaurant Supply Co Total Equip. Costs $ 17,600 Total Working Capital $ 1200Monthly requirements for capital* Total Capital Required $ 103,800

10 Cost of Goods Manufactured2006 Total Direct Labour$30,500 Total Direct Materials$16,700 Manufacturing Overhead$10,440 total$57,640

11 Inventories Desired Inventory = 0 Average Days for Inventories –Raw Material Inventory = 30 days –Finished Goods Inventory = 2 days

12 Accounts Receivable/Payable Receivables –From Bulk Cheese Warehouse and Sask Made Market Place –Have 30 days from date of billing to pay –No discounts offered Payables –Saskpower, and Sasktel –Have 21 day grace period

13 Administration, Marketing, and General Expenses Accounting Bookkeeping Management Fuel for delivery Benefits Income Tax Interest on Debt Marketing

14 Human Resources

15 President/Manager Responsibilities: –Oversees daily production –Work Schedules –Assigning Employee Tasks –Traveling –Ensures product quality –Purchases raw materials –Keeps facility running, and clean –Accounting Duties

16 Head Baker Responsibilities: –Working long hours –Ability to follow recipes –Ability to produce quality product –Ability to use ovens and mixers –Dishwashing and janitorial skills

17 Assistant Baker/Waitress Responsibilities: –Assist in baking –Operate Cash register and serve customers –Dishwashing, and basic janitorial skills

18 Delivery Persons Responsibilities –Deliver product to Bulk Cheese Warehouse & Sask Made Market Place –Deliver products to and work at Farmers Markets in Saskatoon, Melfort, and Wakaw

19 Additional Training All staff members will take the one day Safe Food Handling Course Other food safety programs offered by SIAST will be taken

20 HR Stratagies Motivation: –Family Business –Membership benefits

21 Marketing Plan

22 The Marketing Mix Products/Services –Breads-various varieties –Buns –Tarts –Muffins –Cookies –Sitting area with coffee/tea and in-store products

23 Marketing Mix Price –High, but still competitive Promotion –Fresh, homemade, good quality, down home farm feel Place –Wakaw, Saskatoon, Melfort

24 Segmentation, Targeting and Positioning Population of Saskatoon and rural and urban centers of Wakaw and Melfort Target markets –Saskatoon –Rural/small centers –The Country Oven Positioning –Bulk Cheese Warehouse/Sask Made Marketplace –Farmers markets

25 SWOT Analysis Internal Strengths –Family business –Location –Homemade recipes Internal Weaknesses –Location –Inexperience –Increased prices

26 SWOT External Opportunities –Desire for healthier lifestyle –Niche market in urban areas –Large target market area External Threats –Change in lifestyle trends –Increased fuel prices –Competitors having lower prices

27 CompetitionPricesEdge Country Crossroads Very High-located just off highway 41 -many services; gasbar/ Subway/c- store/restaurant -make product from scratch and Ready-Make Wakaw Fine Foods Very Low-use pre-mixed frozen dough, which cuts costs -located downtown Wakaw Melfort Co-op Very Low-located right in co-op grocery store -very wide variety of products Golden Grain Bakery Average-viewpoint of customers is very positive -charge more for individual items -is a café/bakery -located in the city of Melfort Farmers Markets Average-High-located down-town -charge more for individual items -large number of customers -wide variety of products

28 Compared To…. The Bakery ProductsPricesEdge Bread/loafBreadHigh-brand new facilities Buns/dzBuns-products made from scratch OtherMuffins-family owned/operated Tarts-is a café/bakery Cookies

29 Sales and Profit Objectives 26,300 3 farmers markets 6,200 Sask Made and Bulk Cheese Warehouse 5,000 units at Country Oven Objective: achieve a yearly revenue of $121,500

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31 Marketing Plan Budget Marketing Budget AdvertisingExpenses/year Newspaper Western Producer$400 Other Billboard$100 Bulletins$60 Promotion and Development Business cards$90 Travel expenses$200 Total Marketing Expenses$850

32 Financial Plan

33 Financing Total Financing Required $104,000 Long Term Bank Debt$150,000 Owner Equity$30,000 Total Financing$180,000

34 Balance Sheet as of December 31, 2006 Assets Liabilities Current Assets Current Liabilities Total Current Assets44587Total Current Liabilities-6538 Long Term AssetsLong Term Liabilities Total Long Term Assets94431Total Long Term Liabilities Owner Equity Total Owner Equity1080 Total Assets Total Liabilities and Owner Equity139018

35 Ratio Analysis RatioCompany Average 1. Liquidity Ratios Current Ratio Investment Utilization Ratios Inventory Turnover26 Total Asset Turnover1.44 Fixed Asset Turnover Solvency Ratios Debt Ratio86.4% Debt to Equity Ratio Profitability Ratios Gross Profit Margin52.9% Net Profit Margin9.8% Return on Assets14% Return on Equity103%

36 Risk Analysis Critical ValueIRR=0%IRR = 15%Base Case Allowable % Change (when IRR = 15%) Interest rate on debt 29%15.2%8%90 Fuel Prices$21,346$1,2978$1, Driver Wage$14.66$ Quantity of Bread (farmers market) 4, , Quantity of Buns (farmers market) 2,4855,4478, $ of farmers market bread $1.31$1.78$ $ of farmers market buns $1.43$2.15$

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39 Contingency Plan If price of bread decreases: –have to either increase sales to a break even level –the bakery would have to find a way to decrease fixed costs Methods –additional stall at the Saskatoon farmers market –craft sales throughout the province

40 Questions/Comments?


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