Café Paradiso – Sample Business Plan Business Plan 2007/2008
Commercial-in-Confidence Date
Table of Contents 1.0
2.0
3.0
Executive Su Summary
1
1.1
Business Opportunity 1
1.2
Product/Service Of Offering
1.3
Marketing Plan
1
1.4
Management eam
1
1.!
"inancial Plan 2
Business Op Opportunity
3
2.1
Business Opportunity 3
2.2
#ision and Mission
2.3
$oals an and O% O%&ectives 3
2.4
'ature of t(e Business
Market An Analysis 3.1
1
3 4
5
Situatio tional nal ) S*O *O +nalysis ! Table Table 1: SWOT analysis and strategy development
3.2
,ndustry +nalysis
3.3
ompetitor +nalysis -
5
-
Table 2: Analysis of competitors competit ors
7
Table Table 3: Analysis of competitors’ competitors’ prodcts and services services
4.0
Elements o Success 4.1 arget arget Market 4.2
5.0
7
!
omp ompeti etiti tive ve +dvant dvantage age and and 0ni 0niue ue Sell Sellin ing g Propo Proposi siti tion on
Marketin" #l #lan
$
!.1
Marketing O%&ectives
!.2
Marketing Mi
Table !: "ale #ropositions$ #ropositions$
!.3
+ction Plan
11
!.4
Sale ales +nalysis and "orecast 11 %igre 1 Sales forecast forecast
%.0 %.0
11
&e"a &e"all Matt Matter ers s an' an' (isk (isk Mana Mana"e "eme ment nt 12 -.1 -.1
Busi usiness ness Struc tructu ture re and and Bus Busin ines ess s 'am 'ame e
-.2 -.2
egi egis strat tratiions5 ons5 6ice 6icenc nces es and and Perm Permiits 12
12
Table Table 5: &isting of registrations' li cences and permits 12
-.3
ontracts and +greements
13
Table Table (: &isting of contracts and agreements 13
-.4
isk Management
14
Table 7 )is* assessment 1!
-.!
,nsurances
1!
Table Table + &isting of insrance policies15 policies15
-.-
,ntellectual Property 1! Table Table $ &isting of intellectal property property o,ned 15 15 Table Table 1- &isting of permissions for se of intellectal property 15
).0 ).0
*uma *uman n (es (esou ourc rce e Man Mana"em a"eme ent 1% 7.1
Organisational (art 1-
7.2 7.2
O8ne O8ner/ r/Op Oper erat ator or Skil kills and and 9 9per perienc ience e
17
Table Table 11: Smmary of o,ners’ *no,ledge' s*ills' .alifications' and relevant e/perience
7.3 7.3
,ndu ,ndust stry ry :no8 :no8le ledg dge e and and 9p 9per erie ienc nce e of :ey :ey Per Perso sonn nnel el
17
Table Table 12: 0etails of personnel ,it specific indstry *no,ledge and e/perience
7.4
;uman e esource e euirements
1
Table Table 13: Analysis of man resorce re.irements Table Table 1!: Staff and ,ages estimate 1+
7.!
1
1+
17
17
7.-
9mployment o onditions
1
7.7
raining and =evelopment
1
7.
!.0
Table Table 15: Analysis of .alificationss*ills .alificationss*ills competencies
1$
Table Table 1(: 4/ternal or internal onte6ob training corses
1$
*orkplace ;e ;ealt( an and Sa Safety 1
Operations 20 .1
Busi usines ness Pr Premises and and 6oc 6ocation
.2
Plant an and 9u 9uiipment e eu uirements nts 2> Table Table 17: &isting of plant and e.ipment
.3
Purc(asing and Supply
2> 2-
21
Table Table 1+: &isting of ma6or sppliers 21
.4 .4
Oper Operat atiing and and Produ roduc ction tion Proc rocesse esses s22 Table Table 1$: Analysis of operating facilities and processes
.!
Stock or ,nventory
..-
,nfo ,nform rmat atio ion n omm ommun unic icat atio ion n e ec(no c(nolo logy gy Sy System stems s
.7
Operational "orecast 23
22
23
%igre 2 Operational targets
23
23
Table Table 2-: Analysis of operational performance e/istingplanned8
$.0
+inancial #l #lan .1
2!
25
Start?0p Budget
2!
%igre 3 Startp bdget 25
.2
+nnual Pr Profit Bu Budget 2%igre ! 9ear 9ear 1 financial igligts 2( %igre 5 9ear 9ear 2 financial igligts 2(
.3
as( "lo8 "orecast 27 %igre ( #ro6ected cas flo, by .arter
.4
27
Balance S( S(eet2 %igre 7 #ro6ected opening balance seet and yearend yearend balance seet 2+ seet 2+
.!
Break?9ven +nalysis 2 %igre + rea*even analysis
.-
"inancial +nalysis
2
%igre $ %inancial ratio analysis Assmptions
3-
2$
2$
10.0 10.0
+ina +inanc ncia iall ,or ,orks ks-e -eet ets s
11.0
Action #lan 40
31
12.0 12.0 (ei (ein nin" in" t-e t-e pla plan 41 Appen'ices or Business #lan 42 +ppendi 1@ Situational analysis A eternal environment
42
+ppendi 2@ Situational analysis A internal environment
43
1.> 9ecutive Summary 1.1 Business Opportunity Brendan and Margaret 9lliott (ave entered into negotiations to purc(ase a caf %usiness5 called af Paradiso5 %ecause of its great location in t(e Mountain $len S(opping entre 8it( t(e (ig(est num%er of passing s(oppers 8(ic( is supported %y a large and gro8ing local population. (ere are a limited num%er of cafs 8it(in t(e centre and 8it( %ot( BrendanCs and MargaretCs eperience 8it( (aving successfully operated and o8ned a num%er of cafes in +ustralia and overseas t(ey 8ill %e a%le to increase t(eir market s(are from 3!D to 4>D in 12 mont(s. (e competitive advantages of t(e %usiness are@ location uality of food and service kno8ledge and eperience of t(e industry availa%le financial resources • • • •
1.2 Product/Service Offering (e main activity of t(e company is t(e operation of t(e af Paradiso. Business activities include purc(asing5 storing5 preparing5 selling and serving our products to our valued customers. *e epect to serve over -5>>> customers EFdine inC and Ftake a8ayCG per mont(. (e af is open from @>>am to !@>>pm Monday to Saturday and from @>>am until midday on Sunday. (e caf comforta%ly seats 3- persons. (e mission of t(e %usiness is to satisfy customersC needs and 8ants for (ig( uality coffee5 delicious nutritious meals and ecellent service. Our main point of differentiation from ot(er cafes and coffee s(ops in t(e entre is t(at one of t(e %usiness o8ners is an internationally trained c(ef 8(o 8ill %e a%le to produce fres(5 lig(t and (ealt(y meals eac( day as 8ell as develop ne8 menu items to meet t(e c(anging needs and tastes of people 8(o care a%out 8(at t(ey eat. (e (ig( uality coffee 8ill target staff and s(oppers in t(e S(opping entre 8(o en&oy good coffee t(at simply offers good value for money at (ig(ly competitive prices
1.3 Mareting Plan (e o%&ectives of t(e company are to@ maintain market s(are t(roug( t(e c(ange of o8ners(ip t(en gro8 market s(are to 4>D5 and generate a %efore ta net margin of 2>D. −
−
(e %usiness 8ill ac(ieve t(ese o%&ectives %y@ retaining t8o key staff mem%ers of af Paradiso to maintain continuity of customer relations(ips during t(e c(angeover upgrading signage to %e more visually appealing maintaining t(e eisting price levels and controlling costs undertaking more aggressive marketing and promotion. −
− − −
Page 1
1.! Manage"ent Tea" Brendan and Margaret 9lliott5 o8ners of Seavie8 Pty 6td are %ot( eperienced af o8ners/managers (aving successfully operated a num%er of cafes in +ustralia and overseas. Brendan is a ualified c(ef and (as previously 8orked for t(e ;ilton and t(e Sofitel groups %efore o8ning (is o8n caf. Margaret (as a degree in Business Management E;ospitalityG and s(e too (as 8orked for t(e ;ilton group of companies and for t(e ydges group. Brendan and Margaret 8ill 8ork full?time in t(e %usiness5 retain t8o key staff from t(e previous o8ner to maintain t(e continuity of relations(ips 8it( customers during t(e transition5 and 8ill employ an additional four staff. 8o of t(ose staff 8ill 8ork on a part?time %asis. .
1.# $inancial Plan Our pro&ected performance is summarised %elo8@ urnover@ Hear 1 I!3-5-!> Hear 2 I!>5>>> $ross margin I375-> E71DG 'et profit E%efore taG of I1>5- in t(e first year5 gro8ing to I131517! in t(e second year of operation. (e %usiness is cas( flo8 positive from t(e first mont( of operation Break?9ven is estimated at a mont(ly sales level of I3>5- eturn on otal +ssets@ 37.3D eturn on 9uity@ !1.2D (e purc(ase price of t(e %usiness is I17>5>>>. otal start?up cost (as %een calculated at I2>51> and is to %e funded %y 8ay of a I1>45>! %ank loan and euity in&ection of I1>45>! from Brendan and Margaret. ,t is proposed t(at t(e loan %e paid %ack over a t8o year period from cas( flo8.
Page 2
2.> Business Opportunity 2.1 Business Opportunity Purc(ase of an esta%lis(ed cafe 8it(in t(e Mountain $len S(opping entre t(at is part of a large5 8ell developed master planned community 8(ic( is still gro8ing5 incorporating a regional s(opping centre5 residential5 retail and commercial development. (e %usiness is ideally located for a af5 %eing situated on t(e main mall 8it( a (ig( passing trade due to its close proimity to t8o national supermarket c(ains and a num%er of 8ell kno8n retail fas(ion clot(ing c(ains. (ere are a limited num%er of cafes 8it(in t(e centre and af Paradiso (as t(e %est location5 8it( t(e (ig(est num%er of passing s(oppers. af ParisdoCs primary customers are s(oppers and staff 8it(in t(e S(opping entre 8(o take a %reak from t(eir s(opping or 8ork and en&oy fine coffee or ot(er %everages as 8ell as for people 8anting a lig(t5 uick and (ealt(y meal t(at provide a good alternative to t(e fast food options. (e success of t(e %usiness is %ased on its ecellent location5 uality of management and staff5 great Fvalue for moneyC coffee and meals and superior service.
2.2 %ision and Mission ision ? (e companyCs vision is Fto %e t(e af of preference for Mountain $len S(opping entre customersC. Mission ? (e mission of t(e %usiness is to satisfy customersC needs and 8ants for (ig( uality coffee5 delicious nutritious meals and ecellent service.
2.3 &oals and Ob'ectives $oal one@ maintain continuity of customer relations(ips during t(e c(angeover %y@ etaining t8o key staff mem%ers of af Paradiso Maintaining t(e eisting price levels • •
$oal t8o@ maintain market s(are and sales t(roug( t(e c(ange of o8ners(ip t(en gro8 market s(are to 4>D in 1 mont(s. (e strategies to ac(ieve t(is goal are@ ,ncrease t(e num%er of customers ,ncrease t(e average sales siJe ,ncrease repeat trade from customers 0ndertaking more aggressive marketing and promotion • • • •
$oal t(ree@ generate a %efore ta net margin of 2>D for t(e net t8o financial years %y@ 9liminating (ig( cost purc(ases ,mproving cost control ,mproving stock control • • •
Page 3
2.! (ature of t)e Business af Paradiso 8ill serve take a8ay %everages Eespecially fine coffeeG and moderately priced good uality lig(t meals to t(e casual dining market 8it(in t(e s(opping centre precinct. (e caf is profita%le5 (as a strong positive cas( flo8 and may %e seen as a strong via%le and gro8ing %usiness. Seavie8 Pty 6td 8as recently esta%lis(ed for t(e purpose of acuiring t(e eisting caf %usiness kno8n as af Paradiso5 located at t(e Mountain $len S(opping entre. af Paradiso 8as one of t(e first s(ops to open at t(e centre and en&oys an ecellent location from 8(ic( to operate. Seavie8 Pty 6td 8ill %e acuiring t(e %usiness name af Paradiso. Brendan and Margaret 9lliott5 o8ners of Seavie8 Pty 6td are %ot( eperienced af o8ners/managers (aving successfully operated a num%er of cafes in +ustralia and overseas. Brendan is a ualified c(ef and (as previously 8orked for t(e ;ilton and t(e Sofitel groups %efore o8ning (is o8n caf. Margaret (as a degree in Business Management E;ospitalityG and s(e too (as 8orked for t(e ;ilton group of companies and for t(e ydges group. Brendan and Margaret 8ill 8ork full?time in t(e %usiness and 8ill employ an additional four staff. 8o of t(ose staff 8ill 8ork on a part?time %asis.
Page 4
3.> Market +nalysis 3.1 Situational * S+OT ,nalysis S/(E/* S/(A/E Sales Marketin" A urrently (olds largest Maintain and gro8 market s(are %y market s(are in t(e s(opping improving marketing and promotions %ot( 8it(in and outside t(e S(opping entre &ocation 8it(in t(e S(opping entre for Provide uality products and services to point of sales generate 8ord of mout( endorsements and repeat %usiness Skills A kno8ledge5 skills and eperience of rain and develop staff to deliver superior o8ners/managers in running successful caf uality of products and services %usinesses previously +inancial A o8nersC access to financial "und training5 marketing and develop ne8 resources and strong cas( flo8 from menu items operations ,EAESS S/(A/E &ocation A capped capacity due to floor ,nvestigate t(e option of negotiating space acuisition of additional floor space from ad&oining s(ops
O##O(/6/ Economy A *ell positioned to take advantage of a strong economy5 lo8 interest rates and (ig( disposa%le income Social #atterns A Population gro8t( Eresidential developmentG and increased standard of living #-ysical +actors A ,mproved pu%lic transport and infrastructure ,EAESS Environmental A ,ncreased cost of utilities5 suc( as 8ater and electrical po8er
S/(A/E 9pand marketing and promotion and maintain prices at current market levels ,ncrease advertising and investigate potential to increase floor space ,ncrease advertising in t(ese surrounding areas to attract ne8 clients S/(A/E 6ook at alternatives to develop capacity to use gas and implement 8ater saving policies and practices
/a7le 18 S,O/ analysis an' strate"y 'evelopment See appendi for t(e situational analysis done on %ot( t(e internal and eternal environments
Page !
3.2 -ndustry ,nalysis (e caf market is a competitive market 8it( franc(ised operators starting to emerge in t(e coffee s(op segment Ealso offering lig(t mealsG5 8(ic( 8ill over time increase concentration in t(is segment. *(ile t(e level of competition is increasing5 t(e s(opping centre in 8(ic( af Paradiso 8ill %e located (as capped t(e num%er of cafs and coffee s(ops 8it(in t(e comple E%y covenant in t(e 6ease +greementG. o t(is etent5 t(ere 8ill %e limited competition and it is anticipated t(at all cafs and coffee s(ops 8it(in t(e comple 8ill %e uite profita%le. :ey points a%out t(e caf and restaurant industry@ $reater concentration in (ig(er t(an average (ouse(old income areas Sensitive to c(anges in real (ouse(old disposa%le incomes rend to8ards singles5 families and %usiness people meeting and eating out $ro8t( 8it( (ouse(olds increasing purc(asing freuency and t(e amount spent in eac( transaction in t(is area • • • •
(e current general trend is for cafes and restaurants to concentrate on offering value for money 8it( an emp(asis on family restaurants5 as 8ell as franc(ised opportunities. (e industry 8ill continue to %enefit from (ig(er incomes and time constraints on some (ouse(olds as 8ell as lifestyle c(anges. (is 8ill include more dining out or take a8ay food consumption. (ere are t(ree key success factors in t(e caf industry t(at are essential for t(e %usiness to do 8ell in order to %e competitive. (ese factors are %ased on t(e positioning of t(e %usiness as 8ell as itsC place and p(ysical appearance@ •
•
•
6ocation of caf in terms of@ Proimity to surrounding attractions o S(ort distance to consumers o onvenience and accessi%ility o P(ysical appearance in terms of@ leanliness of premises o Kuality of food o Kuality of service o lear market position
3.3 Co"petitor ,nalysis Our t8o main competitors are lu% af and offee 9travaganJa as t(ey %ot( (ave strong %rand recognition5 8it( (ig( product uality and 8ell?documented processes for (o8 t(e %usiness s(ould %e run 8(ic( comes from %eing a national franc(ise %usiness. ;o8ever5 t(ey (ave t(e operating %oundaries of t(e franc(isor t(at doesnCt give t(em t(e flei%ility to c(ange menu items so easily. (is flei%ility is somet(ing af Paradiso can take advantage of 8it( (aving a c(ef 8(o can develop ne8 menu items to meet t(e c(anging preferences of customers. L(avargoCs af is a%le to %e more flei%le to market needs attracting t(e price conscious clientele 8it( an average uality product %ut t(is is not t(e market space af Paradiso is competing in. Our competitors (ave no (istory of discounting and 8(ilst t(e num%er of cafs 8it(in t(e centre is capped5 pricing s(ould remain very sta%le. (e follo8ing ta%les outline an analysis of Page -
t(e cafCs competitors5 t(eir products and targeted customers@
/a7le 28 Analysis o competitors 9ompany ame lu% af
offee 9travaganJa
L(avargoCs af
Si:e
'ational franc(ise ? 2>D market s(are 'ational franc(ise A 2>D market s(are 6ocal su%ur%an caf.
Sales Mix ;#ro'uct< Service= offee5 8ine and %eers and ot(er %everages5 lig(t meals5 cakes and desserts liuor licence offee and ot(er %everages5 lig(t meals. "ocussing more on coffee and %everages offee and ot(er %everages5 lig(t meals
ears in Business
2 years ? since t(e centre 8as opened 2 years ? since t(e centre 8as opened 2 years A since t(e centre 8as developed
(eputation (atin" ;1>10= ? "ranc(ise c(ain (as a sound reputation
? "ranc(ise c(ain (as a sound reputation ! A -. #aria%le uality
/a7le 38 Analysis o competitors? pro'ucts an' services Marketing mix
9lu7 9ae
9oee Extrava"an:a
@-arvar"o?s 9a
#ro'uct uality #rice
;ig( 0pper end of t(e market
;ig( 0pper end of t(e market
#lace
"ranc(ise A +ustralia 8ide. 6ocally only t(e one outlet. S(op signage5 loyalty cards5 side%oards and 8ell kno8 %rand "ranc(isees and staff trained up to t(e standards of franc(isor =ocumented processes and standards to manage and get t(e most value out of t(e %usiness 9veryt(ing to t(e standard of t(e franc(ise from t(e uality of t(e product5 service5 fit?out of t(e premises and staff uniforms etc
"ranc(ise A +ustralia 8ide. 6ocally only t(e one outlet. S(op signage5 loyalty cards5 side%oards and 8ell kno8 %rand "ranc(isees and staff trained up to t(e standards of franc(isor =ocumented processes and standards to manage and get t(e most value out of t(e %usiness
#aria%le 6o8 end of t(e market Only t(e local outlet.
#romotion
#eople
#rocesses
#-ysical evi'ence
9veryt(ing to t(e standard of t(e franc(ise from t(e uality of t(e product5 service5 fit?out of t(e premises and staff uniforms etc
S(op signage5 side%oards Only t(e local outlet. Mainly in t(e (ead of t(e o8ner
Standards vary in terms of uality of products5 services5 staff and p(ysical surroundings
af Paradiso 8ill need to maintain current marketing activities and a (ig( level of service and product uality to ensure its competitiveness. ,t needs to (ave a clear market position to target and promote t(e uality and value for money of products and services. Page 7
Page
4.> 9lements of Success !.1 Target Maret (ere is su%stantial population gro8t( in t(e area as residential development continues and commercial development commences. (e master planned community attracts a (ig( socio? economic demograp(ic 8it( (ig( employment and (ig(er t(an average per capita income. af Paradiso customers are t(e passing s(oppers and s(opping centre staff of all ages 8(o en&oy a fine coffee Edine?in5 or take a8ayG and a (ealt(y5 value?for?money meal. (e ma&ority of t(e general pu%lic consulted in t(e s(opping centre 8ere families and young singles. (e cafe 8ill make it particularly easy for a young family to en&oy a meal %y providing a range of c(ildrenCs meals and activities. Our take a8ay %everages 8ill also appeal to t(is group and t(e segments made up largely of singles %et8een t(e ages of 1 A 4> 8(o s(op or 8ork 8it(in t(e s(opping centre precinct. (ey tend to (ave moderate incomes 8it( (ig( discretionary spending. (e ma&ority of customers 8(o purc(ase coffee from af Paradiso are Fsocial drinkersC5 follo8ed %y customers 8(o 8ant t(eir daily fi or a pick me up. (ey are 8anting a convenient5 friendly and relaing environment to Frec(arge t(eir %atteriesC or socialise over a fine coffee5 c(oice of %everages and uality fres(5 lig(t and (ealt(y meals t(at provide an alternative to fast food options. (e market need %eing satisfied is %ased on convenience5 uality and value for t(e coffee drinkers as 8ell t(e (ealt( conscious consumer 8(o is concerned a%out 8(at t(ey eat.
!.2 Co"petitive ,dvantage and niue Selling Proposition Our first and main competitive advantage t(at 8e possess is our location. af Paradiso is in t(e %est possi%le location for a caf and (as 3 years of t(e initial ! year lease to run5 plus t(e option of anot(er ! years. Our second competitive advantage is t(e uality and value of t(e 8ide variety of lig(t and (ealt(y meals offered %y t(e %usiness t(at cannot %e matc(ed %y ot(er %usinesses in t(e centre. ,n addition5 one of t(e o8ners is an ,nternational (ef 8(o can create ne8 menu items overnig(t 8(ic( gives t(e %usiness t(e flei%ility to sell products to meet t(e c(anging preferences of customers. Our t(ird competitive advantage is t(e industry eperience and epertise of %ot( o8ners running successful caf and restaurant %usinesses in t(e past. (ese competitive advantages form t(e %asis of our uniue selling proposition 8it( t(e slogan of NParadisoCs A convenient5 lig(t and (ealt(y and 8ill also include 8idely promoting t(e culinary skills of our ,nternational (ef.
Page
!.> Marketing Plan #.1 Mareting Ob'ectives (ere are t(ree key marketing o%&ectives@ • • •
o ac(ieve sales of I!3-5-!> for t(e first year and I!>5>>> for t(e second year. o ac(ieve estimated 4>D market s(are net 12 mont(s. o position t(e %usiness as a convenient place to eat lig(t and (ealt(y meals
o %e revie8ed in - mont(s.
#.2 Mareting Mi0 #(OC9/ ;ealt(y and lig(t meals are t(e key point of differentiation for t(e %usiness %ecause t(e af (as t(e capa%ilities and flei%ility to develop ne8 menu lines to meet t(e c(anging needs and tastes of customers5 8(ereas t(e t8o franc(ise %usinesses in t(e centre must conform to t(e reuirements of t(e franc(isor. *(ile t(e ot(er products5 in particularly fine coffee5 are not uniue t(ey do offer ecellent Fvalue for moneyC t(at fill t(e price points %et8een t(e (ig( and lo8 ends of t(e ot(er coffee and caf %usinesses in t(e centre. (e caf 8ill provide t(e relaed and friendly environment t(at our customers seek 8(en searc(ing for a Fdine inC meals5 %everages and cakes and desserts t(at offers ecellent value for money5 %ut do recognise t(at t(is is not uniue as s(o8n in ta%le 4 %elo8@
/a7le 48 alue #ropositions Features
Benefits
Cafe en$ironment )ine coffee Be$erages )res# lig#t meals nternational c#ef Ca&es desserts
Rela% and ta&e a 'rea& *n+o,ment social connector Refres# and rela% "ealt# ell 'eing ualit, and $ariet, of meals Comlements coffee meals
Importance (1 to 10 8 7 . 8 8 .
!ni"ue# $%& (o (o (o es es (o
Rating: 1 = Lo! 10 = "ig#
#(69E *e propose to offer (ig( uality food and service at a price comparative to our ma&or competitors A 8e 8ill meet t(e market on price to retain market s(are if 8e need to. Our clientele (ave a medium to (ig( disposa%le income and seek (ig( uality products and good service5 pricing 8ill reflect t(e value of our products and services. (e s(opping centre (as a Fcaptive marketC and given t(e limited num%er of cafs in t(e centre5 prices (ave not %een discounted in t(e market. (ere is no intention to discount to %uy Page 1>
market s(are as af Paradiso currently (olds t(e largest market s(are of approimately 3!D and 8e intend to take it to 4>D5 8(ilst maintaining eisting margins.
#&A9E ;i.e. C6S/(6B/6O= ustomers access and purc(ase our products and services t(roug( our s(op front. (e location of t(e caf is at t(e sout(ern end of t(e Mountain $len S(opping entre. Mountain $len is a very large regional s(opping centre dra8ing customers from up to 1! kilometres a8ay and is surrounded %y a FmarketC of approimately 2!>5>>> persons. ,t is situated on t(e main mall5 near t(e ma&or EnationalG supermarkets and retail fas(ion clot(ing c(ains. ,t (as a (ig( passing trade due to its close proimity to t8o national supermarket c(ains and a num%er of 8ell kno8n retail fas(ion clot(ing c(ains. (e caf is -> m and t(ere is t(ree years to run on t(e current ! year lease. +n option to take anot(er ! years is availa%le under t(e lease. *(en t(e proposed commercial development goes a(ead5 t(e %usinesses located t(ere are potential customers for a catering %usiness. (e %usiness plan 8ill %e revisited at t(is time. #(OMO/6O ,n con&unction 8it( Mountain $len entre Management 8e 8ill %e undertaking a range of promotions 8(en 8e take over t(e cafe promoting t(e ne8 o8ners(ip of t(e caf. (ese promotions 8ill include offers of discounted meals and coffee5 %ut t(ey 8ill only run for t8o 8eeks. *e estimate t(at t(is 8ill %e sufficient time to allo8 a smoot( transition to ourselves as ne8 o8ners. Our regular advertising 8ill consist of s(opfront +?frame advertising %oards5 8eekly ne8spaper advertising and a t(ree mont(ly flyer drop in local mail %oes. +s most of our %usiness 8ill %e passing trade5 s(op front signage 8ill %e %rig(t and appealing. *e 8ill develop and offer a loyalty card sc(eme to increase repeat %usiness. *ord of mout( advertising is very important and t(e %est advertising 8e 8ill %e providing is t(e uality of our products and service. #EO#&E Bot( Brendan and Margaret 9lliott (ave %een successful o8ners and managers of cafs. Brendan is a "renc( trained c(ef and (is skills 8ill %e used ne8 product lines to meet t(e c(anging needs and preferences of consumers 8(ic( 8ill %e a point of differentiation for t(e %usiness Margaret 8it( (er %usiness and (ospitality %ackground 8ill %e responsi%le for t(e day to day operations of t(e af. 8o key staff mem%er 8(o 8orked 8it( t(e previous o8ner 8ill %e retained to (elp 8it( t(e continuity of eisting relations(ips 8it( customers. #(O9ESS Ma&or processes are flo8?c(arted in t(e cafCs procedure manual t(at are geared to providing uality and responsive services to clients as 8ell as efficient and effective operations of t(e cafe. (is includes sufficient num%ers of staff are 8orking during t(e peak periods to make sure customers are served in a timely manner. "urt(er information a%out t(e processes in place are detailed in section of t(is %usiness plan. #*S69A& E6CE9E (e caf is fully fitted out 8it( ta%le5 c(airs and dcor t(at pro&ects t(e desire image of uality and value as 8ell as aligns 8it( t(e 0SP of F6ig(t and ;ealt(y A af ParadisoC. (is also applies to uniforms for t(e staff. (e cleanliness of t(e premise5 ta%les and c(airs 8ill %e Page 11
maintained to a consistently (ig( standard at all times.
Page 12
#.3 ,ction Plan ,n con&unction 8it( Mountain $len entre Management 8e 8ill %e undertaking a range of promotions 8(en 8e take over t(e cafe promoting t(e ne8 o8ners(ip of t(e caf. (ese promotions 8ill include offers of discounted meals and coffee5 %ut t(ey 8ill only run for t8o 8eeks. *e estimate t(at t(is 8ill %e sufficient time to allo8 a smoot( transition to ourselves as ne8 o8ners. Our regular advertising 8ill consist of s(opfront +?frame advertising %oards5 8eekly ne8spaper advertising and a t(ree mont(ly flyer drop in local mail %oes. +s most of our %usiness 8ill %e passing trade5 s(op front signage 8ill %e %rig(t and appealing. *e 8ill develop and offer a loyalty card sc(eme to increase repeat %usiness. *ord of mout( advertising is very important and t(e %est advertising 8e 8ill %e providing is t(e uality of our products and service. ,n t(is area 8ill %e training t(e staff in customer service skills *(en t(e proposed commercial development goes a(ead5 t(e %usinesses located t(ere are potential customers for a catering %usiness. (e marketing plan 8ill %e revisited at t(is time.
#.! Sales ,nalysis and $orecast Our sales analysis (as revealed t(at 8e can epect on average -5>>> customers EtransactionsG per mont( 8it( a general mi of customers %uying only coffee5 usually Ftake a8ayC and t(ose Fdining inC %uying a lig(t meal and coffee. Our sales forecast is %ased on an average industry selling price of I3.!> per cup for coffee and average lig(t meal selling price of I13.>>. *e epect t(at t(e mi of coffee to meals 8ill %e approimately 1.!@1 and (ave %ased t(is on t(e cafs current figures. On t(is %asis 8e (ave pro&ected sales of I!3-5-!> for t(e first year and I!>5>>> for t(e second year. Sales 8ill spike in t(e %uild?up to (ristmas and at times of seasonal cele%ration e.g. Mot(erCs and "at(erCs days5 9aster etc. Our Sales "orecast %y uarter is s(o8n in t(e figure %elo8. Sales performance 8ill %e analysed on t(e %asis of sales EIG per employee.
+i"ure 1 Sales orecast
Page 13
-.> 6egal Matters and isk Management .1 Business Structure and Business (a"e Seavie8 Pty 6td (as %een esta%lis(ed to carry on t(e %usiness af Paradiso5 8it( Brendan 9lliott and Margaret 9lliott %eing t(e s(are(olders and management of t(e company. +'. 111111111 +B'. 3 111111111 (e Business 'ame af Paradiso is an eisting registered %usiness name t(at is %eing acuired %y Seavie8 Pty 6td. B'. 9pires. Septem%er 2>>
.2 egistrations 4icences and Per"its /a7le 58 &istin" o re"istrationsD licences an' permits Cescription o (e"istration<&icence egistration of ompany egistration of Business 'ame +ustralian Business 'um%er E+B'5 "'5 P+H$5 $SG "ood Business 6icence
Cate O7taine'
Expiry Cate
>7
Ongoing
>7
>
>7
Ongoing
urrent licence A Septem%er 2>>-
3rd Septem%er 2>>7
Page 14
.3 Contracts and ,gree"ents
/a7le %8 &istin" o contracts an' a"reements 9ontract
Business Purc(ase ontract "ranc(ise
9ontract or A"t es<o Hes 'o
S(op 6ease
Hes
Plant ) 9uipment Purc(ase/ Maintenance +dvertising ontracts ,ntellectual Property =istri%ution ig(ts Purc(ase/Supply ontracts Service ontracts 6oan =ocumentation
Hes
+greements 8it( ustomers and ontractors ooperative +greements 8it( ot(er Businesses
'o 'o 'o 'o 'o Hes
9urrent Status
+8aiting copy from vendorCs solicitor. Su%&ect to due diligence and finance approval. efer Business Purc(ase ontract. o %e acuired as part of t(e %usiness.
,nformal agreements ;ave (eld an initial discussion 8it( t(e %ank A a8aiting a copy of t(e contract5 loan application documentation and finalisation of t(e %usiness plan.
'o 'o
Page 1!
.! is Manage"ent /a7le ) (isk assessment E6Qlo85 #6Qvery lo85 MQmedium. ;Q(ig(5 #;Qvery (ig(G ' o o i l e k i &
t c a p m 6
y t i r o i r #
"ire A loss of property/life
M
;
;
(ange in suppliers terms
M
M
M
"ood poisoning
#6
#;
;
0se uality products5 correct storage of food stuffs5 train staff in (ygiene principles as part of a Kuality ontrol Process
Supplier una%le to supply
6
M
M
+rrange alternative suppliers5 evaluate su%stitute products
Ma&or dispute 8it( centre o8ner 6oss of key person
6
M
;
#6
M
M
9nsure formal lease agreement is in order. =evelop and maintain a sound 8orking relations(ip 8it( t(e entre Manager. ake out key person insurance5 effect kno8ledge and skill transfer to ot(er staff
(isk Cescription
#reventative Action
,nstallation of smoke alarms and sprinkler system5 fire etinguis(ers installed and regularly c(ecked5 regular staff training in emergency fire procedures including evacuation plans Es(op ) centreG5 9nsure insurances including fire5 pu%lic lia%ility and %usiness interruption are adeuate and in place Maintain good relations(ips 8it( suppliers and maintain access to personal cas( reserves
9ontin"ency #lans
,mmediate access to personal resources to re%uild s(op and %usiness uickly 8(ilst 8aiting for insurance payments 0tilise alternative suppliers or increase 8orking capital Efrom personal cas( reservesG =evelop a complaint (andling process. ,nvestigate source of food poisoning and remediate Purc(ase from alternative suppliers or use suita%le su%stitute products 9ngage la8yer for advice S(ort term contract for suita%le replacement Euntil permanent staff can do t(e &o%G. all up insurance policy
Page 1-
.# -nsurances /a7le ! &istin" o insurance policies /ype o 6nsurance Business Package
6nsurer an' #olicy KB9
Annual #remium I 154>>
,ndemnity ,nsurance
KB9
I !>>
:ey Person ,nsurance
+MP
I !>>
*orkers ompensation
*orkover
I 2>>
9ommencement Cate ,nsurances 8ill %e arranged upon eecution of t(e contract. ,nsurances 8ill %e arranged upon eecution of t(e contract. ,nsurances 8ill %e arranged upon eecution of t(e contract. ,nsurances 8ill %e arranged upon eecution of t(e contract.
Expiry Cate
(e %usiness package 8ill include pu%lic lia%ility5 fire5 t(eft5 %urglary and %usiness interruption insurance. (e a%ove is %ased on uotes o%tained from our ,nsurance Broker. ,nsurances 8ill %e finalised once t(e contract (as %een signed. Brendan and Margaret (ave life insurance and income protection policies already in place.
. -ntellectual Property /a7le $ &istin" o intellectual property oFne' 6# Cescription
(e"istere' Gyes
9ommencement Cate
Expiry Cate
(e %usiness does not (old any ,ntellectual Property at t(is stage.
/a7le 10 &istin" o permissions or use o intellectual property 6# Cescription
(e"istere' Gyes
9ommencement Cate
Expiry Cate
(e %usiness does not reuire any permission for use of ,ntellectual Property at t(is stage. (e caf 8ill not %e providing eit(er live or recorded music.
Page 17
7.> ;uman esource Management (e management of t(e %usiness comprises Brendan and Margaret 9lliott 8(o %et8een t(em (ave significant eperience in t(e (ospitality industry. Brendan is a ualified c(ef and (as successfully managed a num%er of restaurants %ot( (ere and overseas. Margaret (as eperience in t(e FfrontC and F%ackC offices of resort (otels and is (ig(ly respected in t(e industry for (er management skills. (e maimum staff reuirement Eincluding t(e o8nersG is estimated at - employees. 8o of t(e employees 8ill %e employed on a part?time %asis. (e main skill sets reuired are food preparation5 sales5 customer service5 front counter5 stock control and management. ,t is planned to retain t8o staff mem%ers from t(e previous o8ners(ip and recruit t8o more appropriately ualified staff. *e 8ill %e taking t(em t(roug( our in?(ouse induction program prior to opening. Salaries and 8ages in t(e first year are estimated at I125>>> and I2>>5>>> in t(e second year of operation.
5.1 Organisational C)art 3ners/4anagers
5eam Leader 1
5eam Leader 2
5eam 1
5eam 1
Staff at af Paradiso 8ill %e organised into t8o teams. eam 1 8ill %e (eaded %y Margaret 9lliott and 8ill %e responsi%le for customer service and administration. Brendan 9lliott 8ill (ead eam 2 8(ic( 8ill %e responsi%le for t(e food preparation and t(e kitc(en. Margaret 8ill (ave primary responsi%ility for staff5 accounting5 sales5 marketing5 and managing t(e operation of t(e af. Brendan 8ill %e responsi%le for ;5 stock control5 t(e kitc(en and food preparation.
Page 1
5.2 O6ner/Operator Sills and 70perience /a7le 118 Summary o oFners? knoFle'"eD skillsD HualiicationsD an' relevant experience ame
#osition
Brendan 9lliott
O8ner/Manager (ef
Margaret 9lliott
O8ner/Manager Business Manager responsi%le for t(e day to day running of t(e af
noFle'"eD SkillsD ualiications an' Experience "renc( trained c(ef5 international and local eperience. 6ocal restaurant and caf eperience =egree in Business Management E;ospitalityG. *orked for t8o national franc(ise c(ains5 8it( t(e last role involving turning around t(e underperforming restaurants of t(e ;otel/Motels
5.3 -ndustry 8no6ledge and 70perience of 8ey Personnel /a7le 128 Cetails o personnel Fit- speciic in'ustry knoFle'"e an' experience ame
Staff Mem%er 1 Staff Mem%er 2 Staff M
#osition
noFle'"e
ustomer Service
*orked 8it( previous o8ners
ustomer Service ustomer
*orked 8it( previous o8ners
Page 1
5.! 9u"an esource euire"ents /a7le 138 Analysis o -uman resource reHuirements +ull /ime Sta
eam 1 eam 2 atering otal
#ermanent #art /ime
9asual Sta
2 2
1 1
4
2
9ontractors
(e team of staff 8ill %e comprised of Brendan and Margaret5 plus t8o service staff Ecounter and 8aitingG5 one assistant Fc(efC5 and one Fkitc(en (andC. 8o of t(ese staff 8ill %e casual and 8ill 8ork on a part?time %asis. (is euates to ! full time euivalents E"9sG.
/a7le 148 Sta an' Fa"es estimate ,a"es I
um7er o Sta 9urrent ear
+dministration Sales/Marketing Management Production Secretarial O+6
ext ext 9urrent ear 1 ear 2 ear
ext ear 1
ext ear 2
3 2
3 2
4 2
I25>>> I1>>5>>>
I>5>>> I11>5>>>
I1>>5>>> I12>5>>>
!
!
-
I125>>>
I2>>5>>>
I22>5>>>
(e a%ove includes casual staff. Staff 8ill %e employed under t(e ;ospitality +8ard.
5.# :ob ;escriptions 0nder revie8.
5. 7"ploy"ent Conditions +s per ;ospitality +8ard.
Page 2>
5.5 Training and ;evelop"ent
/a7le 158 Analysis o Hualiications
Actual ;1>10=
+orecast ;1>10=
1> ? 1> ? 1> 1
1> ? 1> ? 1> 1
(e skills and competencies are largely covered %y Brendan and Margaret and professional epertise 8ill %e provided %y our eternal la8yer and accountant.
/a7le 1%8 External or internal on>t-e>Jo7 trainin" courses Sta Mem7er
+ll team mem%ers E! "9G
/rainin" 9ourse Cetails ,nduction ourse
Cate
Curation
Prior to opening5 t(en as reuired.
2 days
9ost
I254>>
5.< +orplace 9ealt) and Safety (e 8orkplace (ealt( and safety plan is %ased on t(e advice and guidance provided %y *orkplace ;ealt( and Safety Kueensland 888.8orksafe.ld.gov.au and t(eir fact s(eets for t(e restaurant and caf industry.
Page 21
.> Operations <.1 Business Pre"ises and 4ocation +t present t(e only facility 8e 8ill %e using is t(e caf. ,t is ideally located 8it(in t(e s(opping centre to attract passing customers and is also relatively close to our main suppliers i.e. grocer and %akery. (e caf is fully fitted out and is fit for purpose. (ere is no need for a separate operating location at t(is point in time. (ere is an opportunity to roast coffee %eans and manufacture t(e cafCs o8n %lends at a later date. ,f t(is occurs5 it may %e necessary to acuire operating premises to implement t(e idea.
<.2 Plant and 7uip"ent euire"ents Set out %elo8 is a listing of t(e minimum plant and euipment items t(at are reuired to successfully operate t(e af. + sc(edule of t(e plant and euipment Eand t(eir valuesG contained in t(e purc(ase price 8ill %e included in t(e contract documentation and 8ill %e su%&ect to due diligence. (e purc(ase price of t(e plant and euipment items listed %elo8 is stated in t(e contract at I!>5>>>. (e items to %e acuired in t(e purc(ase price are t8o years old and 8ill %e su%&ect to a Mortgage =e%enture (arge as part collateral for t(e %ank loan. *e 8ill undertake routine maintenance and plan t(e replacement of plant and euipment items on t(e %asis of annual condition assessments.
/a7le 1)8 &istin" o plant an' eHuipment Cescription o #lant < EHuipment 6tem Kuality coffee maker
Small commercial kitc(en
um7er reHuire'
9ost an' -oF inance'
1
,ncluded in t(e purc(ase price. ,ncluded in t(e purc(ase price.
1
Benc(es ) cup%oards5 sinks/drains
On"oin" costs Maintenance 0nder 8arranty
an'
+nnual maintenance c(eck
,ncluded in t(e purc(ase price.
eplace as necessary
"urniture A (airs ) ta%les
3- c(airs 1> ta%les
,ncluded in t(e purc(ase price.
eplace as necessary
Signs
3
,ncluded in t(e purc(ase price.
rockery5 cutlery and linen POS 9uipment Eincluding soft8areG5 computer
72 settings of crockery and cutlery 1 of eac(
,ncluded in t(e purc(ase price. ,ncluded in t(e purc(ase price.
eplace 8it(in mont(s as part of promotional strategy eplace as necessary 0nder 8arranty
Page 22
<.3 Purc)asing and Supply Brendan (as contacted all eisting suppliers and (as negotiated supply arrangements on very attractive terms. +t t(is point t(ere are no 8ritten contracts alt(oug( t(ree suppliers (ave indicated t(at t(ey are currently preparing contracts for eecution. *(ere suppliers do not provide formal contracts 8e 8ill %e reuesting an ec(ange of letters to confirm t(e %asic arrangements. ,n most instances local alternative suppliers eist. *(ere local alternative suppliers do not eist5 8e (ave identified alternative suppliers from near%y regions 8(o (ave t(e capacity to meet t(e cafCs needs in a timely manner at a reasona%le cost.
/a7le 1!8 &istin" o maJor suppliers #ro'uct< Service "res( fruit and vegeta%les
olume #urc-ase' I154>> per 8eek
3> days
+lternative local supplier F(e $reengrocerC
asty Meat ) =elicatessen Supplies
"res( meat5 manufactured meat5 and delicatessen items
I!>> per 8eek
3> days
+lternative local supplier FMavs Meat SuppliesC
Mountain $len Bakery Supplies
"res( %read5 rolls5 and flour etc
I152>> per 8eek
3> days
+lternative local supplier F(e =aily BreadC
af Supplies Pty 6td
Plant and euipment
+s reuired.
3> days
'o local alternative supplier ,nterstate options
;ot S(ot offee Supplies
offee %eans
I1!> per 8eek
14 days
'o local alternative supplier ,nterstate options
B*S E=rink SuppliersG
*ines5 %eer5 soft drinks
I3!> per 8eek
3> days
0niforms 0s
Staff uniforms ) 4 per uarter %adges
ame
Mountain $len "ruit ) #egeta%le Supplies
af Supplies
Serviettes5 ta%leclot(s5 promotional material
/ra'in" /erms Alternate Suppliers
+ num%er of alternative suppliers eist #arious
3> days
+lternative local supplier F*ork8earC
3> days
'o local alternative supplier ,nterstate options
Page 23
<.! Operating and Production Processes Our ma&or processes are sales5 food and %everage preparation5 ta%le service and stock control Eordering5 storing5 controllingG. Ma&or processes are flo8?c(arted in t(e cafCs Procedures Manual. + copy of t(is is appended to t(e %usiness plan. (e processing of Point of Sale EPOSG transactions is electronic5 8it( transactions %eing automatically posted into t(e accounting system E8(ic( incorporates a stock control systemG. (e ta%le %elo8 represents t(e current and t(e planned level of operation and t(e standard of t(ese operations.
/a7le 1$8 Analysis o operatin" acilities an' processes Cetail
9urrent &evel o Operation< Stan'ar'
Meets 6n'ustry Stan'ar'
#lanne' &evel o Operation< Stan'ar'
Meets 6n'ustry Stan'ar'
Plant/Office apacity
F=ine inC seating for 3-.
Hes
3- R May need to increase floor space
Hes
Sc(eduling Eoperation5 seuences ) timingG
urrent sc(edules 8orking 8ell.
Hes
9fficient5 effective ) economical
Hes
9uipment/ooling euirements
9uipment sufficient for our needs
Hes
Maintain and replace as reuired.
Hes
6ayout of %usiness premises
Premises 8ell designed and lay out ecellent.
Hes
evie8 design and lay out if additional space acuired
Hes
Material euirements
+ll goods and produce readily availa%le at reasona%le prices
Hes
'o c(ange envisaged at t(is time.
Hes
6ocation
9cellent
Hes
9cellent location
Hes
=istri%ution
ustomers come into t(e caf.
Hes
ustomers come into t(e caf.
Hes
Kuality ontrols
K+ system 8orking 8ell
Hes
Ongoing continuous improvement
Satisfies all industry reuirements
Staffing 6evels
+deuate at present
Hes. +ll appropriately trained
+ppropriate
Hes
Purc(asing lead times
9cellent. $reat service from suppliers
Hes
'o c(ange envisaged at t(is time.
Hes
Page 24
<.# Stoc or -nventory +ll stock at t(is stage 8ill %e stored Fon siteC at t(e caf. "res( produce suc( as vegeta%les are purc(ased in vacuum sealed %ags or cartons and meat in vacuum sealed packs. (ese 8ill %e stored in a small commercial refrigerator. Ot(er items suc( as coffee %eans5 canned and packaged products 8ill %e kept in t(e storage cup%oards. Ot(er peris(a%les including cakes and c(eese cakes 8ill %e kept in refrigerated display ca%inets and 8ill %e stored for a maimum of t(ree days. On average5 8e epect to turn stock over once per 8eek. Stock 8ill %e controlled using our stock control system5 8(ic( is a module of t(e accounting soft8are package.
<. -nfor"ation Co""unication Tec)nology Syste"s , systems include t(e computerised 9"POS system5 linked to t(e accounting system. (e 9"POS system 8ill process =irect =e%it5 redit ard5 and as( transactions directly to t(e %ank and t(e accounting system. (e accounting system 8ill process t(e payroll5 stock control5 general ledger transactions and maintain t(e ;uman esource records. (ese systems effectively reduce manual accounting and processing to a minimum. (ey provide real time reports5 t(us en(ancing productivity and management decision making.
<.5 Operational $orecast *e (ave pro&ected sales transactions at 175>> for K 15 15!>> for K 25 1!5>> for K 35 and 15->> for K 4. Our average sale price is estimated to %e I7.4- 8it( t(e average cost of sales at I2.2>. Our average num%er of employees is estimated at ! 8it( - reuired at peak times. (is includes %ot( full time and casual employees. Profit per person is pro&ected at I4544 per mont(. Our target for client satisfaction is a rating of !D for t(e first year.
+i"ure 2 Operational tar"ets
Page 2!
/a7le 208 Analysis o operational perormance ;existin"
Expecte' ;in next % mont-s=
ost
Kuality
7
*astage
"lei%ility Skill 6evels
7
1>
1> 1> 1>
1> 1> 1> 1>
=ependa%ility Sc(eduling =o8ntime Safety Service
1>
1>
ec(nology
7
,nnovation
7
otes > Met-o's or 6mprovement
(ange menu to matc( seasonal availa%ility and cost of food items Ongoing K+ audits and training Monitor stock control Eorders ) 8astageG *orkplace +greement On t(e &o% training5 mentoring and coac(ing 'one at present 'one at present 'one at present 'one at present rain staff and encourage ecellence in service On t(e &o% training for t(e 9"POS 9valuate c(anges in consumer tastes and %e(aviour and monitor t(e menus of t(e leading restaurants and cafs
(e current rating is %ased on our o%servation of t(e eisting operation under t(e current o8ner. *e propose to lift standards significantly 8it(in a fe8 mont(s of taking over. *e %elieve t(at t(is is necessary and ac(ieva%le.
Page 2-
.> "inancial Plan a%les attac(ed@ Sales "orecast Start?up Budget +nnual Profit Budget Profit and 6oss Statement E2 years pro&ectedG +nnual as( "lo8 Budget Balance S(eet E2 years pro&ectedG Break?9ven +nalysis "inancial +nalysis • • • • • • • •
=.1 Start>p Budget (e start?up %udget is estimated at I 2>51> %roken up into Fone offC costs of I1753>> and mont(ly epenses in advance of I 225!1>. ,ncluded in t(e Fone offC costs is good8ill valued at I12>5>>> and plant and euipment of I !>5>>>. (e start?up %udget is s(o8n in "igure 3 %elo8.
+i"ure 3 Start>up 7u'"et
Page 27
Page 2
(e Start?up %udget is to %e funded %y 8ay of euity in&ection of I1>45>! %y t(e o8ners and a loan over t8o years from t(e %ank. (e %ank loan 8ill %e repaid out of t(e %usinessC strong cas( flo8. ,f cas( flo8 is reduced for any reason5 Brendan and Margaret (ave personal financial resources to more t(an adeuately cover t(e loan repayment. + Mortgage =e%enture over t(e %usiness is %eing offered as collateral along 8it( t(e =irectors personal guarantees.
=.2 ,nnual Profit Budget (e pro&ected profit for t(e first year of operation is I1>5-5 8it( t(e second year pro&ected at I131517!. (ese pro&ections (ave %een %ased on t(e +nnual Profit Budget Ecopy attac(edG. "inancial ;ig(lig(ts over t(e 2?year period are summarised in t(e figures %elo8.
+i"ure 4 ear 1 inancial -i"-li"-ts
+i"ure 5 ear 2 inancial -i"-li"-ts
$ross Margin is calculated at 71D for Hear 1 and 71.!D for Hear 2. 'et Profit Margin EBefore aG is calculated at 2>.!D. for Hear 1 and 22.-D for Hear 2. (e %usiness is uite profita%le and margins are sustaina%le over t(e medium to longer term. Page 2
=.3 Cas) $lo6 $orecast (e as( "lo8 "orecast pro&ects a very (ealt(y cas( surplus on trading for eac( mont( 8it( t(e end?of?year Fcas( from operationsC calculated at I1>!547 and an ending cas( %alance of I14!5-!7. Brendan (as negotiated very favoura%le credit terms of 3> days from all suppliers for t(e first 12 mont(s5 alt(oug( in most cases t(ese arrangements are not in 8riting. ,f all suppliers reduced t(eir terms to 7 days cas( flo8 for t8o trading mont(s5 t(e peak cas( s(ortfall 8ould %e approimately I152>> for a%out 2 mont(s. Brendan and Margaret (ave significant liuid assets to call upon s(ould t(is eventuate. On t(e figures provided and t(e arrangements negotiated5 t(e %usiness (as a strong and positive cas( flo8. "igure - %elo8 s(o8s t(e pro&ected cas(?flo8 %y uarter.
+i"ure % #roJecte' cas- loF 7y Huarter et 9as-loF Bu'"et 7y /( ->5>>> !>5>>> 4>5>>> I
Budget
3>5>>> 2>5>>> 1>5>>> > Budget
K 1
K 2
K 3
K 4
!2517
2!54>2
27547
15-1
Page 3>
=.! Balance S)eet (e opening Balance S(eet s(o8s an euity position of I1>45>! gro8ing to I2145774 at t(e end of Hear 1 and to I34!54 at t(e end of Hear 2. By t(e end of Hear 2 t(e %usiness 8ill %e clear of any de%t and %e Fcas(ed upC to take advantage of furt(er opportunities in t(e market place.
+i"ure ) #roJecte' openin" 7alance s-eet an' year>en' 7alance s-eet
Page 31
=.# Brea>7ven ,nalysis (e Break?9ven point (as %een calculated at 413 transactions at an average selling price of I7.4-. (is euates to a contri%ution margin of I-.3 per transaction and a Break?even sales point of I3>5- per mont(. (e pro&ected level of sales for eac( mont( is 8ell a%ove t(e Break?even level Eapproimately 3>D a%oveG.
+i"ure ! Break>even analysis Mont(ly unit sales
Break>Even 9-art
Break?9ven IMont(ly Sales
->5>>> !>5>>> 4>5>>> I 3>5>>>
2>5>>> 1>5>>> > 15-!!
2543
3531>
4513
45--
!573
-5-21
Mont-ly nit Sales
=. $inancial ,nalysis (e eturn on O8ners 9uity calculated on t(e pro&ected end of year financial performance and position indicates a return on investment of !1.2D. eturn on otal +ssets is calculated at 37.3D. $ross Profit Margin over t(e period is estimated at 71D 8it( t(e 'et profit Margin estimated at 2>.!D.
+i"ure $ +inancial ratio analysis
(e a%ove ratios indicate a very solid financial performance over t(e period.
Page 32
(e urrent atio and t(e Kuick atio E+cid estG are %ot( very (ig( reflecting t(e fact t(at t(e %usiness (as a very strong and positive cas( flo8. (is is due to sales %eing predominantly cas(5 8(ilst purc(ases are %oug(t on largely on 3> day terms. 6iuidity is sound. (e %usiness also en&oys a sound financial position 8it( t(e =e%t to 9uity ratio calculated at 37.2D and =e%t to otal +ssets at 27.1D.
Assumptions +verage sale price I7.4- per transaction +verage cost I2.2> per transaction Sales transactions range from !>> per mont( to 7!>> in peak period ;istorical gross profit margin of 7>D 8ill (old. Seasonal fluctuations A (ristmas and 'e8 Hear are peak periods of sales activity E%uild up from 'ovem%er5 t(e after 'e8 Hear slo8 to "e%ruaryG (e %usiness operates on a cas( %asis for reporting and paying ta. P+H$ E8it((oldingG is remitted mont(ly on t(e ,nstalment +ctivity S(eet E,+SG5 8it( $S remitted uarterly in arrears on t(e Business +ctivity Statement EB+SG.
Page 33
1>.> "inancial *orks(eets (e follo8ing documents (ave %een attac(ed@ Sales "orecast Start?up Budget +nnual Profit Budget Profit and 6oss Statement E2 years pro&ectedG +nnual as( "lo8 Budget Balance S(eet E2 years pro&ectedG Break?9ven +nalysis "inancial +nalysis • • • • • • • •
Page 34
Page 3!
Start? 0p Budget
MO';6H 9P9'S9S Salary of o8ner?manager +ll ot(er salaries and 8ages ent/lease +dvertising ) promotion =elivery epense Supplies Estock?in?tradeG elep(one Ot(er utilities Eelectricity5 gas etcG ,nsurance onsuma%les ,nterest Maintenance 6egal and Professional costs Miscellaneous Su%total
Pro&ected Mont(ly 9penses
as( D of needed to otal Start
I5>>> I75>>> I252>> I2>>
I5>>> I75>>> I252>> I2>>
3.D 3.3D 1.>D >.1D
I351>> I3>> I!>>
I351>> I3>> I!>>
1.!D >.1D >.2D
I3>> I4-> I2>> I2!>
I3>> I4-> I2>> I2!>
>.1D >.2D >.1D >.1D
I225!1>
I225!1>
1>.7D
I!>5>>>
23.D
I35>>> I4>> I257!> I15>>> I!!> I!5>>> I1245->> I1753>>
1.4D >.2D 1.3D >.!D >.3D 2.4D !.4D .3D
One OffT osts "itures and 9uipment "itout ,nstallation c(arges Starting ,nventory =eposits for utilities Eelectricity5 gas etcG 6egal and professional fees egistrations5 licenses and permits +dvertising and promotion for opening as( Ot(er Su%total
Page 3-
Page 37
Page 3
Page 3
Page 4>
Page 41
Page 42
11.> +ction Plan
+ction
omplete due diligence Eincluding purc(ase contractG evie8 insurances and arrange as reuired (eck t(at all necessary licences and permits are (eld evie8 %usiness plan Prepare finance proposal Su%mit finance application +rrange settlement date ) (andover
=ate Priority ,nitiated
1
May 1t(
=ate for follo8 up May 2!t(
1
May 1t(
May 2!t(
1
May 1t(
May 2!t(
Person/s *ork/ esponsi%le Stages to %e done +ccountant 6a8yer
=eadlines
Outcome
osts
ontract terms and conditions revie8ed
I15-!>
,nsurance Broker
,nsurances arranged
I25->>
Brendan 9lliott
+ll reuired licenses and permits (eld
1
t(
+ccountant
t(
#ia%ility esta%lis(ed
2
+ccountant
Su%mit for approval
2
+ccountant
2
6a8yer
"inance approved/not approved ake over af
Page 43
12.> efining t(e plan (is section 8ould not %e retained 8(en presenting t(e %usiness plan to ot(er parties e.g. potential lenders and investors.
Page 44
+ppendices for Business Plan ,ppendi0 1? Situational analysis @ e0ternal environ"ent External Environment
Opportunity
/-reat
6nluence ;1>10=
E9OOM698 Stage of t(e economic cycle
Hes
7
urrent interest rate
Hes
7
+verage disposa%le income
Hes
-
Population gro8t( and make?up
Hes
!
;ouse(old structure Ee.g. singles. familiesG
Hes
-
$eograp(ic distri%ution
Hes
6evel of education
Hes
7
=9MO$+P;,
/E9*O&O8 ,nnovations in t(e manufacturing process ec(nological developments Esu%stitute productsG SO,+6/060+6 Hes
orporate social responsi%ility
!
9nvironmentally friendly FgreenC products
Hes
-
Standard of living
Hes
7
Percentage of 8ork to leisure time
Hes
!
PO6,,+6/69$+6@ egulatory environment and legislation ompliance 8it( standards and codes E6(OME/A& limate (ange ) ar%on rading 9co?efficient manufacturing P;HS,+6 "+OS@ limatic conditions *ater restrictions
Hes
-
,nfrastructure ? transport5 communications and services
Hes
Page 4!
,ppendi0 2? Situational analysis @ internal environ"ent
Page 4-
6nternal Environment
Stren"t-
,eakness
+actor ;1>10=
Hes
7
S/(A/E ompetitive advantage ? a%le to differentiate :ey drivers of t(e %usiness are kno8n
Hes
Strategy and resources for gro8t(
Hes
!
=etailed action plan
Hes
lear evidence of market need for your product/service :no8 your specific market ) competitors in detail :no8 eactly 8(o your target audience is and %e a%le to descri%e t(em in detail Spend more resources on your current and most profita%le customers ompetitive and profita%le pricing strategy
Hes
7
Hes
Hes
-
Hes
Hour marketing plan and %udget
Hes
SA&ES MA(E/6
Hes
Measure5 learn from and adapt your marketing activities
Hes
7
7
S/(9/(E Business structure A maimise 8ealt( and minimise risk Ee.g. sole trader5 company5 partners(ip5 trustG
Hes
!
=istri%ution and sales to target markets
Hes
+re your %uildings and facilities adeuateU ,s your euipment effective and up to dateU +%le to protect your ,P from %eing copiedU
Hes for current level of demand Hes
Hes A limited capacity for epansion
7
!
SS/EMS ,nformation and management systems Ee.g. MG
Hes
!
Performance measurement and re8ards
Hes
!
=ocumented processes and systems
Hes
-
Strong de%t collection systems
Hes
Purc(asing systems and inventory management
Hes
Hes
S/A++6 S6&&S ecruit t(e rig(t people raining and development of staff
Hes
7
Page 47
