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?