BUSINESS PLAN FOR CAKES AND PASTRIES BUSINESS (Essay Sample)

Business Plan – Tasha Cakes and Pastries Student’s Name InstitutionTable of Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc451904317 \h 4 1.Background PAGEREF _Toc451904318 \h 5 1.1.Mission Statement PAGEREF _Toc451904319 \h 5 1.2.Business Goals PAGEREF _Toc451904320 \h 5 2.Marketing PAGEREF _Toc451904321 \h 7 2.1.Market Research PAGEREF _Toc451904322 \h 7 2.2.Market Analysis PAGEREF _Toc451904323 \h 8 2.2.1.Strategic Allies PAGEREF _Toc451904324 \h 10 2.2.2.SWOT Analysis PAGEREF _Toc451904325 \h 11 2.3.Marketing Plan PAGEREF _Toc451904326 \h 12 2.3.1.Products and Target Market PAGEREF _Toc451904327 \h 12 2.3.2.Distribution PAGEREF _Toc451904328 \h 13 2.3.3.Promotion and Advertising PAGEREF _Toc451904329 \h 13 2.3.4.Pricing Policy PAGEREF _Toc451904330 \h 14 3.Operations and Production PAGEREF _Toc451904331 \h 14 3.1.Legal and Licensing Requirements PAGEREF _Toc451904332 \h 14 3.2.Organisational Structure and Staffing PAGEREF _Toc451904333 \h 15 3.3.Insurance Needs PAGEREF _Toc451904334 \h 16 3.4.Business Premises PAGEREF _Toc451904335 \h 16 3.5.Production Processes PAGEREF _Toc451904336 \h 17 3.6.Information and Communication PAGEREF _Toc451904337 \h 17 3.7.Risks PAGEREF _Toc451904338 \h 18 3.8.Contingency Plans to Cover the Risks PAGEREF _Toc451904339 \h 18 4.Feasibility Assessment PAGEREF _Toc451904340 \h 18 5.Financial Projections PAGEREF _Toc451904341 \h 19 5.1.Basic Assumptions and Information PAGEREF _Toc451904342 \h 19 5.2.Financial Forecasts PAGEREF _Toc451904343 \h 20 5.2.1.Sales Mix Forecast PAGEREF _Toc451904344 \h 20 5.2.2.Cash Flows Forecast PAGEREF _Toc451904345 \h 21 5.2.3.Projected Profit & Loss Statements PAGEREF _Toc451904346 \h 22 5.2.4.Balance Sheets PAGEREF _Toc451904347 \h 23 5.3.Analysis of Financial Forecasts PAGEREF _Toc451904348 \h 23 5.3.1.Sensitivity Analysis and Break-even Analysis PAGEREF _Toc451904349 \h 23 5.3.2.Return on Investment (ROI) PAGEREF _Toc451904350 \h 30 5.3.3.Return on the Year (ROY) PAGEREF _Toc451904351 \h 30 6.Implementation Timetable PAGEREF _Toc451904352 \h 31 References PAGEREF _Toc451904353 \h 32 . Executive Summary A business plan is a necessary roadmap for the success of any business idea. This plan presents Tasha Cakes and Pastries, a small business which will be located in Ballarat, Melbourne City. The business will manufacture and sell eggless cakes and pastry products for customers in Melbourne. The business aims to establish itself as a reliable manufacturer of eggless cakes and pastries in the city three years after it starts operations. Marketing will be an essential component of Tasha Cakes and Pastries. The business will market itself on radio, social media, its website, and through relationship marketing. The target market for the products of the business is vegetarians around Melbourne City. The business will also form strategic allies with organisations like the Australian Vegetarian Society in order to reach more customers. The business will rent a kitchen from which it will carry out its operations. The business will be managed by the owner-operator who will be assisted by three employees. All the three employees will work under the owner-operator. As such, the business will be run as a sole proprietorship. The owner-operator will raise the initial $100,000 required to get the business up and running. The money will be used to rent the kitchen, carry out promotional activities, and pay the initial expenses of the business. The investment in the business is expected to make after-tax profits of $23,202, $40,805, and $61,383 in the first, second, and third years of operation respectively. From the above projections, Tasha Cakes and Pastries will be a profitable business. 1 Background This plan presents a start-up firm, Tasha Cakes and Pastries which seeks to manufacture eggless cakes and pastries for customers in Ballarat, Melbourne City. With the economy of the city growing and the number of health-conscious Australians being on the rise, there is a strong potential for the business. Since Tasha Cakes and Pastries is a start-up business, it has no documented history. However, the business is based on well-thought out and researched idea that has potential for success. 1 Mission Statement Tasha Cakes and Pastries aims to provide high-quality eggless cakes and pastry products at competitive prices to vegetarians in Melbourne City. Research has shown that the number of health-conscious Australians is increasing slowly but steadily; from 1,608,000 in 2009 to 1,935,000 in 2013 (Langley, 2014). The business will seek to take advantage of this through provision of eggless cakes and pastry products suited to residents of Melbourne who are conscious about their health. In the process, it is the expectation of the firm that it will create a loyal customer base. 2 Business Goals Tasha Cakes and Pastries aims to achieve a number of goals as it enters the industry. The goals of any organisation describe what it aims to accomplish over a definite period of time. Tasha Cakes and Pastries will therefore have short-term and long-term goals. According to Kourdi (2009), the short-term goals make up the steps required to achieve the long-term goals of the business. The goals of Tasha Cakes and Pastries include the following: 1. Establish itself as a trusted source of healthy cake and pastry products around Melourne within two months of commencing operations. 2. Build and maintain an online platform within three months. The online presence should allow customers to order products and give feedback through the website of the business. 3. Sales rising to over $300,000 by the third year of operation 4. To break-even at the third month of operations 5. Generate a net income of $50,000 in the second year of operations The following are the keys to the success of Tasha Cakes and Pastries; 1. Competitive pricing 2. Diffentiatiation from other normal cakes sellers through promotion of eggless cakes 3. The increasing number of health conscious people in the country 4. The growing economy of Melbourne City As informed by Schaper et al, (2014), the development of an exit strategy is an important aspect of a business plan. Therefore, if the business wishes to exit the market, a strategy that seem workable will be selling the business. Given that Tasha Cakes and Pastry would have established itself in the market after two years, other forms of exiting the market, such as liquidation, do not seem appropriate. The good-will that the business will have created together with trusted customers and assets will have to be sold, and the proceeds shared with the creditors and the owners. Factors which might prompt exiting the industry include inability to expand, or the identification of better opportunities outside the industry. 2 Marketing According to Schaper et al (2014), the marketing segment of the business plan serves to provide the rationale for the business’ existence. The segment, therefore covers market research and analysis, marketing plan, marketing evaluation, and the relevant elements of the marketing mix 3 Market Research Market research forms is an essential component any successful business idea. It is significant that an idea is backed up by justifications for its development. The idea of starting Tasha Cakes and Pastries is backed up by various secondary sources of information. These information sources include IBIS World, Roy Morgan Research, and the municipal government. Based in Australia, IBIS World is regarded as one of the leading publishers of business intelligence in the world. The company has been on the forefront in providing throroughly researched, current, and accurate business information that has helped organisations make better decisions. In this case, the idea to create Tasha Cakes and Pastry is partly influenced by the 2015 industry report by IBIS world. The report indicated that the cakes and pastry industry is experiencing growth and that the majority of the industry players are made up of small enteprises with less than 20 employees. The report also outlined various features that characterise the industry including changing consumer tastes and preferences, market saturation, and volatility in product prices. Roy Morgan Research is another firm whose reports have influenced the idea of creating Tasha Cakes and Pastries. A 2013 report by the company indicated a slow but steady increase in the number of vegetarians in Australia. In addition, a 2016 report by Melbourne City Council showed that the economy of the city is growing(City of Melbourne, 2016). These are the sources of information which justify the concept behind the establishment of Tasha Cakes and Pastries. It is important to note that the sources are backed by other pieces of literature on the theory of entrepreneurship such as Entrepreneurship and Small Business by Schaper et al (2014). 4 Market Analysis As mentioned earlier, there are various features that characterise the cakes and pastry manufacturing industry. As informed by the IBISWorld (2015), the Austalian cake and pastry manufacturing industry is currently characterised by change in consumer trends, volatility in commodity prices, and market saturation. According to the report, the major challenges faced by industry players are intensifying competition and increasing costs of inputs. As Tasha Cakes and Pastries enters the market, it has to take into consideration these signifcant factors. The company has to come up with innovative ways of developing products that are suited to the market. Tasha Cakes and Pastries will achieve through focusing on the specifications of its customers. The report by IBISWorld (2015) goes ahead to state that industy ...