Business Plan of a Bakery

Honey Coffee and Bakery is a start-up coffee and bakery retail establishment located in jos. HCB 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 partners’ industry experience and mild competitive climate in the area. HCB 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. The Company

JJB is incorporated in jos. It is owned and managed by a sole partner. Mrs Oyindamola Coker has extensive experience in sales, marketing, and management. The company intends to hire two full-time pastry bakers and six part-time baristas to handle customer service and day to day operations. Products and Services

HCB offers a broad range of coffee and espresso products, all from high quality Columbian grown imported coffee beans. HCB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail. The bakery provides freshly prepared bakery and pastry products at all times during business operations. Six to eight moderate batches of bakery and pastry products are prepared during the day to assure fresh baked goods are always available. The Market

The retail coffee industry in Nigeria has recently experienced rapid growth. The harsh and cold period stimulates consumption of hot beverages throughout the year. HCB wants to establish a large regular customer base, and will therefore concentrate its business and marketing on local residents, which will be the dominant target market. This will establish a healthy, consistent revenue base to ensure stability of the business. In addition, tourist traffic is expected to comprise approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market. Financial Considerations

HCB expects to raise #1,000,000 of its own capital, and to borrow #1,000,000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required. HCB anticipates sales of about #000,000 in the first year, #17,000,000 in the second year, and 19,000,000 in the third year of the plan. HCB should break even by the fourth month of its operation as it steadily increases its sales. Profits for this time period are expected to be approximately #3,000,000 in year 1, #4,000,000 by year 2, and 6,000,000 by year 3. The company does not anticipate any cash flow problems.

1.1 Mission
HCB aims to offer high quality coffee, espresso, and pastry products at a competitive price to meet the demand of the middle- to higher-income local market area residents and tourists. 1.2 Keys to Success

Keys to success for HCB will include:
1.Providing the highest quality product with personal customer service. 2.Competitive pricing.

Company Summary
HCB is a bakery and coffee shop managed by a sole partner. This owner represents sales/management and finance/administration areas. The owner will provide funding from her own savings, which will cover start-up expenses and provide a financial cushion for the first months of operation. A ten-year Small Business Administration (SBA) loan will cover the rest of the required financing. The company plans to build a strong market position in the town, due to the owner’s industry experience and mild competitive climate in the area. 2.1 Company Ownership

JJB is incorporated in jos. It is owned by a sole partner.
2.2 Start-up Summary
HCB is a start-up company. Financing will come from owner’s capital and a ten-year SBA loan. START-UP

Requirements

Start-up Expenses
Legal#30,000
Premise renovation#200,000
Expensed equipment#400,000
Other#10,000
TOTAL START-UP EXPENSES#640,000

Start-up Assets
Cash Required#700,000
Other Current Assets#120,000
Long-term Assets#650,000
TOTAL ASSETS#1,470,000

Total Requirements#2,110,000

START-UP FUNDING

Start-up Expenses to Fund#640,000
Start-up Assets to Fund#1,470,000
TOTAL FUNDING REQUIRED$2,110,000

Assets
Non-cash Assets from Start-up#770,000
Cash Requirements from Start-up#700,000
Additional Cash Raised#0
Cash Balance on Starting Date#700,000
TOTAL ASSETS#1470,000

Liabilities and Capital

Liabilities
Current Borrowing#0
Long-term Liabilities#1,000,000
Accounts Payable (Outstanding Bills)#10,000
Other Current Liabilities (interest-free)#0
TOTAL LIABILITIES#1,010,000

Capital

Planned Investment
Patterson#550,000
Fields#550,000
Other#0
Additional Investment Requirement#0
TOTAL PLANNED INVESTMENT#1,100,000

Loss at Start-up (Start-up Expenses)(#640,000)
TOTAL CAPITAL#460,000

TOTAL CAPITAL AND LIABILITIES#1,470,000

Total Funding #2,110,000
Products
HCB offers a broad range of coffee and espresso products, all from high quality Columbian grown imported coffee beans. HCB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail. The bakery provides freshly prepared bakery and pastry products at all times during business operations. Six to eight moderate batches of bakery and pastry products are prepared during the day to assure fresh baked goods are always available. Market Analysis Summary

HCB’s focus is on meeting the demand of a regular local resident customer base, as well as a significant level of tourist traffic from nearby highways. 4.1 Market Segmentation
HCB focuses on the middle- and upper-income markets. These market segments consume the majority of coffee and espresso products. Local Residents
HCB wants to establish a large regular customer base. This will establish a healthy, consistent revenue base to ensure stability of the business.
Tourists
Tourist traffic comprises approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market. 4.2 Target Market Segment Strategy

The dominant target market for HCB is a regular stream of local residents. Personal and expedient customer service at a competitive price is key to maintaining the local market share of this target market. 4.2.1 Market Needs

Because JOS has a cold climate for most months out of the year, hot coffee products are very much in demand. During the remaining warmer fewer months of the year, iced coffee products are in significantly high demand, along with a slower but consistent demand for hot coffee products. Much of the day’s activity occurs in the morning hours before ten a.m., with a relatively steady flow for the remainder of the day. 4.3 Service Business Analysis

The retail coffee industry in the Nigeria has recently experienced rapid growth. The cold climate in JOS stimulates consumption of hot beverages throughout the year. Coffee drinkers in the other closer areas are finicky about the quality of beverages offered at the numerous coffee bars across the region. Despite low competition in the immediate area, HCB will position itself as a place where customers can enjoy a cup of delicious coffee with a fresh pastry in a relaxing environment. 4.3.1 Competition and Buying Patterns

Competition in the local area is somewhat sparse and does not provide nearly the level of product quality and customer service as HCB. Local customers are looking for a high quality product in a relaxing atmosphere. They desire a unique, classy experience. Leading competitors purchase and roast high quality, whole-bean coffees and, along with Italian-style espresso beverages, cold-blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, and a line of premium teas, sell these items primarily through company-operated retail stores. In addition to sales through company-operated retail stores, leading competitors sell coffee and tea products through other channels of distribution (specialty operations). Larger chains vary their product mix depending upon the size of each store and its location. Larger stores carry a broad selection of whole bean coffees in various sizes and types of packaging, as well as an assortment of coffee- and espresso-making equipment and accessories such as coffee grinders, coffee makers, espresso machines, coffee filters, storage containers, travel tumblers and mugs. Smaller stores and kiosks typically sell a full line of coffee beverages, a more limited selection of whole-bean coffees, and a few accessories such as travel tumblers and logo mugs. During fiscal year 2009, industry retail sales mix by product type was approximately 73% beverages, 14% food items, eight percent whole-bean coffees, and five percent coffee-making equipment and accessories.

Technologically savvy competitors make fresh coffee and coffee-related products conveniently available via mail order and online. Additionally, mail order catalogs offering coffees, certain food items, and select coffee-making equipment and accessories, have been made available by a few larger competitors. Websites offering online stores that allow customers to browse for and purchase coffee, gifts, and other items via the Internet have become more commonplace as well. Strategy and Implementation Summary

HCB will succeed by offering consumers high quality coffee, espresso, and bakery products with personal service at a competitive price.
5.1 Competitive Edge
HCB’s competitive edge is the relatively low level of competition in the local area in this particular niche. To develop good business strategies, perform a SWOT analysis of your business. SWOT(Strength, weaknesses, opportunities and threats)