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The Bakery Business Plan

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Presentation on theme: "The Bakery Business Plan"— 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 2006. The bakery is scheduled to open in May 2006.

5 Organizational Structure

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 Description Estimated Source of Estimates Cost ($)
Cost ($) Obtained Buildings: 1000ft2 Bakery $ ,000 Humboldt Lumber Mart Ltd Total Building Costs $ 85,000 Equipment: Oven $ ,400 Ace Mart Restaurant Supply Co Proofer $ ,000 Showcase $ Refrigerator $ ,600 Sears Canada Freezer $ Used Mixers 20qt $ ,200 Nicholson Equipment Ltd. Shelves/dollies $ Additional equipment $ ,000 Furniture $ Total Equip. Costs $ 17,600 Total Working Capital $ Monthly requirements for capital* Total Capital Required $ 103,800

10 Cost of Goods Manufactured
2006 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 Promotion Place High, but still competitive
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 Farmer’s markets

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

26 SWOT External Opportunities External Threats
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 Competition Prices Edge Country Crossroads Wakaw Fine Foods
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 -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 Farmer’s Markets Average-High -located down-town -large number of customers -wide variety of products

28 Compared To…. The Bakery Products Prices Edge Bread/loaf Bread High
-brand new facilities Buns/dz Buns -products made from scratch Other Muffins -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

30 Distribution Path

31 Marketing Plan Budget Marketing Budget Advertising Expenses/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 Assets 44587 Total Current Liabilities -6538 Long Term Assets Long Term Liabilities Total Long Term Assets 94431 Total Long Term Liabilities 144477 Owner Equity Total Owner Equity 1080 Total Assets 139018 Total Liabilities and Owner Equity

35 Ratio Analysis Ratio Company Average 1. Liquidity Ratios Current Ratio
-6.67 2. Investment Utilization Ratios Inventory Turnover 26 Total Asset Turnover 1.44 Fixed Asset Turnover 2.93 3. Solvency Ratios Debt Ratio 86.4% Debt to Equity Ratio 6.34 4. Profitability Ratios Gross Profit Margin 52.9% Net Profit Margin 9.8% Return on Assets 14% Return on Equity 103%

36 Allowable % Change (when IRR = 15%)
Risk Analysis Critical Value IRR=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 $1,200 981.5 Driver Wage $14.66 $11.64 8.50 36.9 Quantity of Bread (farmers market) 4,571 7001 10,608 55.1 Quantity of Buns (farmers market) 2,485 5,447 8,352 53.3 $ of farmers market bread $1.31 $1.78 $2.50 40.4 $ of farmers market buns $1.43 $2.15 $3.06 42.3



39 Contingency Plan If price of bread decreases: Methods
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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