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Presented to the Faculty of the Agribusiness Department California Polytechnic State University
In Partial Fulfillment of the Requirements for the Degree Bachelor of Science
By Jesse Adam Godsey June 2010
© Jesse Godsey 2010
TITLE: AUTHOR: DATE SUBMITTED:
A Business Plan for an Organic Restaurant Jesse Godsey June 2010
Dr. Carol Sexton Senior Project Advisor
This study was undertaken to determine if it is feasible to open an organic restaurant in San Luis Obispo, CA. All collected data went into the development of a bare bones business plan for the organic restaurant. The report utilizes two techniques for analysis of this data. A strategic analysis was used to determine if the restaurant could be a legitimate competitor among the many local restaurants of San Luis Obispo. Strengths, weaknesses, opportunities, and threats were outlined, given weights according to their impact, and used to develop a SWOT matrix. Strategic goals were set after reviewing the matrix and a QSPM, quantitative strategic planning matrix, was created to determine which goal was worth pursuing. The final step in determining if the organic restaurant could compete in San Luis Obispo was to perform a competitive analysis against what were determined to be the top local competitors. Following the strategic analysis, a financial analysis was executed to determine whether the operation offered a profitable investment. This included an examination of startup costs and funding, as well as the creation of an income statement, statement of cash flows, and a balance sheet that were based off of a thirty-six month sales forecast. These financial forms made it possible to perform a break even analysis that had the final say as to whether or not the restaurant could be a profitable investment. The organic restaurant failed to break even after three years of business operations. While the strategic analysis indicated the organic restaurant could not only compete, but overcome the competition, the financial analysis indicated that opening this restaurant would be unfeasible. If the methodology were altered to include more in depth financial planning and analysis this decision could be reversed.
.3 II.12 a..2 d. Summary………………………………………………………………... Organic Food……………….19 i. Hypothesis…………………………..22 vii.4 a.22 vi.……………………………………………. SWOT Analysis………………………………………………………….…………. Management Summary…………………………………………………..8 d. Assumptions and Limitations………………..………………………………………………10 III.…. Location…………………………………………………………………..8 c.. The Mission………………………………………………………..…………………………………………..TABLE OF CONTENTS Chapter Page I.21 v. SWOT Analysis…………………..………..………………………….. METHODOLOGY…………………………………….………………………………………….……….………………………………. Organic Food in Restaurants…. Significance of the Study……………………………. Statement of the Problem. & RECOMMENDATIONS…………………………39 a.…………………………………………………………2 b... Products and Services…………………………………………. Business Plans……….…………………………………….4 b..... Conclusions……………………………………………………………. Procedures for Data Analysis…….41 Appendix………………………………………………………………………………………..... INTRODUCTION……………………………………………………………………. Procedures for Data Collection……………….……20 iii. Data Collection…………………….............39 b.………19 ii..40 References Cited……………………………………………………………………………….17 IV...39 c..………..……………………………….…1 a.2 c. Financial Analysis…………………………………………….. CONCLUSIONS. DEVELOPMENT OF THE STUDY……………………………………………………19 a.………. SUMMARY.32 V.63 Food Costs………………………………………………………………………………64 iv .14 c. Objectives of the Study………………………………………………………….12 b.………………….. Recommendations……………………………………………………...………. Summary…………………………….………………………………………………….. Market Summary……………………………………………….……….24 viii.…………………………………………………….……………………………………………19 b.………..……………………………. REVIEW OF THE LITERATURE……………….21 iv.43 Business Plan……………………………………………………………………………43 Equipment Costs………………………………………………………………………. The Restaurant…………………………………………………...…………………………..
4-13. 4-11.….Strengths & Weaknesses………………………………………..…………………………6 Joobilance Payroll………. 4-10... 4-5. 4-7.. 4-2. 4-8. 4-12.……………. 4-4. 4-4.. 3-1..…………………………. 4-6.. 4-1.. 4-5..35 Cash Flows……………………………………………………………………………36 Balance Sheet…………………………………………………………………………36 Breakeven Analysis………………………………………………………………….33 Sales Forecast……………………………………………………………………….. 4-2.LIST OF TABLES Table 2-1.31 Competitive Analysis – Opportunities & Threats…………………………………….16 San Luis Obispo Census Data……………………………………………………….....Strengths……………………………….23 SWOT Analysis .………………………. 4-1.25 SWOT Analysis – Weaknesses……………………………………………………..……………..37 LIST OF FIGURES Figure 1-1.Opportunities & Threats………………………………………….5 Comparison of Pesticide Residues…………….……………………….15 QSPM Template……………………………………………………………………..22 SWOT Analysis .…26 SWOT Analysis – Threats…………………………………………………………….29 Competitive Analysis – Strengths & Weaknesses……………………………………. 4-3.32 Sales Forecast…………………………………………………………………………34 Income Statement…………………………………………………………………….34 v ..1 SWOT Template…………………………………………………………………….…………………..25 SWOT Analysis – Opportunities…………………………………………………..26 SWOT Analysis . Page Organic Food Sales in the United States……………………………………………. 4-14. 2-2.31 Startup Funding……………………………………………………………………….28 Startup Funding……………………………………………………………………. 4-3. 3-2. 4-9.27 SWOT Matrix……………………………………………………………………….27 Quantitative Strategic Planning Matrix……………………………………………….……………………. Page Organic Food Prices……………………. 4-6....
Chapter 1 INTRODUCTION The organic food industry has experienced tremendous growth in the past two decades. “This rapid growth may be traced to increased consumer confidence in organic foods as well as to concern about possible health risks and environmental impacts of conventional food production methods.” (Davis 2006: 1) Figure 1-1: Organic food sales in the U. organic ingredients benefit by gaining the support of consumers concerned with eating well and preserving the environment.S. (Davis 2006) According to the Organic Trade Association. organic and natural foods combined represent a $20 billion business. 1 . Restaurants that embrace these better quality. sales of organic food have increased by nearly 20% annually. Since 1990.
Create a business plan for a new organic restaurant in San Luis Obispo 2. and other protein sources. chef.The word “organic” is most often associated with fruits and vegetables. Panera. Conduct a financial analysis of the first three years of business operations 2 . college campuses and grocery stores” (Leahy 2006). and are seeing increased sales as a result. Animals raised organically are free of antibiotics. not with chicken. added hormones. The success of an independent organic restaurant is entirely possible. genetically modified (GMO) feed. and Arby’s are already making the transition to these ingredients. However. beef. despite higher prices. Problem Statement Is it feasible to open a new organic restaurant in San Luis Obispo that can be profitable? Hypothesis An independent organic restaurant in San Luis Obispo can generate constant profit by the third year of operations. “The demand for natural and organic foods is a well-documented. Top restaurant chains such as Chipotle. and other drugs (Davis 2006). Conduct a SWOT analysis 3. Objectives 1. higher-quality meat is currently preferred by consumers.and consumer-driven trend that is nestling into a growing number of independent restaurants.
evident in the market statistics provided by the Organic Trade Association. Due to the increasing popularity of organic food.Significance of the study/Justification Currently. there are no fully organic restaurants in San Luis Obispo. This hypothesis will be carefully investigated by creating a business plan and performing a profitability study. 3 . an independent organic restaurant has potential to be successful. This project will show if it is feasible to open one capable of earning a profit. California.
United States Department of Agriculture. mass merchandisers. Furthermore.. and is driven by a number of factors. The market for organic foods is growing dramatically.Chapter 2 LITERATURE REVIEW Organic Food Organic foods are made according to certain production standards. defines organic foods as products grown without the use of pesticides. It is estimated that organic sales of food products through supermarkets. Clearly.4 percent. The OTA. agriculture can be described as organic. double the figure in 2000. synthetic fertilizers. Organic Trade Association. sewage sludge. 4 . The USDA. it is estimated that sales of organic foods will increase by 71 percent from 2006 through 2011. estimates that the total global organic food and beverage sales were $13. From 2004 through 2006.8 billion in 2006. The establishment of a USDA standard has increased consumer acceptance and there is also an increasing interest in healthy foods (Knudson 2007). or genetically modified organisms (Dahm 2009).6 billion in 2006 in the U. For the vast majority of human history. organic food has become mainstream (Knudson 2007). The market for organic foods continues to grow. only during the 20th century was a large supply of new synthetic chemicals introduced to the food supply. and natural supermarkets was $3. sales of organic food increased by 38.S.
39 0. the main reasons consumers purchased organic foods were for the avoidance of pesticides (70%). branded can Eggs. Such consumers appear to be willing to pay the typical 10% to 40% price premium that organic products command (Davis 2006: 7).99 4.49 3. and other health risks (Knudson 2007).) Milk.79 Organic 1. When compared to conventional food.49 3.29 1. these foods can cost more than twice as much. store-brand loaf Carrots (lb) Celery hearts (lb) Corn. large (doz.39 Apples. such as artificial sweeteners. Research by nutritionist Virginia Worthington has shown that the differences in organic foods can be enough to help individuals achieve the recommended daily allowance for certain nutrients that they otherwise may not get (Heaton 2009). MSG. and the absence of food additives. Higher quality protein and increased concentrations of antioxidants 5 .99 1. 2% (half gallon) There are many benefits to eating organic: higher nutrient levels.The primary demand driver for the increased consumption of organic food is health concerns. In one survey. Red Delicious (lb) Bread.99 1.49 1. but the increase in sales makes it worth it. Table 2-1: Organic food prices (Kuchment 2008) Produce Non-organic 1. and to avoid genetically modified foods (55%). for freshness (68%). Surveys indicate that many consumers purchase organic foods because of the perceived health and nutrition benefits of organic products. for health and nutrition (67%).99 3.89 2. Consumers are increasingly interested in foods that are free of pesticides.49 1. Eating organic comes at a price. lower pesticide residues. colorings and flavorings.99 2. and hydrogenated fat. providing higher nutrient levels. organic has more dry matter on a pound-for-pound basis.
which are ions. This is because there is not a regular application of chemical pesticides and the plant must rely on increased production of these compounds within itself. food quality is determined by properties that can easily be measured and quantified (i. However. Most pesticide residue safety levels are set for individual pesticides. texture. Phytonutrients are molecules that remove the presence of free radicals. Table 2-2: Comparison of pesticide residues (Davis 2006) In order to make useful comparisons between organic and conventional food.and other phytonutrients have been found in organic food. food monitoring programs are constantly showing that nearly one in three nonorganic food samples tested contained a variety of pesticide residues. at levels higher than those being found in and on organic produce. Pesticide residues in conventional foods are known to be safe and within acceptable health limits. but most fresh produce can carry multiple pesticides that can have negative impacts on the reproductive. immune. Besides an individual’s own personal health. Organic produce will contain 10-50% higher phytonutrients than conventional produce (Heaton 2009). quality should also be considered. organic foods are also contributing to the health of the environment in which 6 . The quality of organic food includes social and environmental dimensions as well as the common measurements of conventional foods (Arvaniti 2003). Consuming organic foods is not the only way to increase nutrient consumption. In conventional practices. nutrient content. atoms. and nervous systems (Heaton 2009). and molecules that can damage human cells (Arvaniti 2003). but it may be the safest. and microbiological properties).e.
were able to define organic and recognize the official USDA seal. The results of this study found that the younger students. and a desire to become “healthy” have increased the global awareness of organic food products. From the simple stance of hazard avoidance. Data analysis linked students who live a healthy lifestyle with regular consumption of organic foods (Dahm 2009). Animal feeding experiments indicate that animal health and reproductive performance are improved when they are organically fed (Arvaniti 2003). but it will be assumed that these findings apply to both animals and humans. Vyvyan Howard. Most students knew organic foods were available in grocery and health food stores. voiced her opinion on the move towards organic food by the new.people live. Nearly 50% of students in this study said that they accept organic foods. air. There is minimal soil. but few believed they were offered in restaurants. Harmful chemicals are not used in organic farming. less than twenty-two years old. a toxico-pathologist at the University of Liverpool. Dr. and water pollution. organically produced food is the best option that we have” (Heaton 2009). At the University of Wisconsin at Madison a study among college students was performed to examine their attitudes towards organic food. ensuring a safer world for our future generations to live in. or eat only organic foods. The objective of this study was to determine whether student awareness and attitudes about organic foods would predict their behaviors with regard to organic food consumption and other healthy lifestyle practices. an increasing public interest. and growing. 7 . Similar findings are yet to be identified in humans. New research. health conscious market segment: "People are applying the precautionary principle to their own lives by purchasing food that has not been produced by industrial methods.
according to the National Restaurant Association. It is critical to acquiring funds and for charting a successful course of action (San Diego Public Library 2005). ate a vegetarian diet. Its stock price has more than doubled since January 2006. When starting a new business there are two roles an individual might play. an individual who buys into an already successful company and builds his business off their already established. despite an increase in price. and were given access to open pasture the carnitas became the most popular meat selected. successful 8 . Since receiving an ecofriendly makeover. Food & Wine magazine's Chef's Survey found that 76 percent of the chefs surveyed said that they "actively seek out organically grown ingredients. but once they began serving carnitas from pigs that received no antibiotics.1 billion. Writing a business plan is an important part of forming and running a business. Fast food chains like Panera and Chipotle have also started using organic ingredients. and it now operates more than 700 restaurants around the country and expects to open an additional 130 to 140 before the year-end.Organic Food in Restaurants Chefs are also joining the organic craze by embracing the flavorful quality and incorporating organic foods into their restaurant menus. Business plans A business plan is a detailed blueprint used to identify a company’s goals and to explain how a company will achieve financial success. The first is that of a franchisee." And. Chipotle carnitas were once the least popular meat at the restaurant. 57 percent of restaurants with per person checks of $25 or more now offer organic items on their menus. Organic food availability in restaurants is expected to increase dramatically over the coming years (McIver 2004). Chipotle's revenues have grown tenfold to reach $1.
how. when. Every business plan begins with an executive summary.business plan. and supporting documents. the records to back up statements made in the previous first three sections (Pinson 2001). where. it tells if there is a business worth pursuing. the quantitative interpretation of everything stated in the preceding sections. mission statement. The second role is that of an entrepreneur. keys to success. financial documents. why. but it is not enough to run a business with (Berry 2004). “A good mission statement should accurately explain why your organization exists and what it hopes to achieve in the future” (Radtke 1998: 1). a conceptual dream. The executive summary answers the questions who. Regardless of the chosen role.” (Pinson 2001) A business plan includes a summary. the thesis statement of the business plan. It embodies the company’s philosophies. A startup plan is good for deciding whether or not to proceed with an idea. A business plan is composed of four parts: the organizational plan. market analysis. The business plan typically starts with a mission statement. a discussion of all components contributing to the market strategy. and transforms that vision into a working reality through the development of a unique business plan (Buzza 2009). It is not written until the business plan is completed as it is a summary that reflects the contents of the finished plan. Any entity that attempts to operate without a mission statement runs the risk of wandering through the world without having the ability to verify that it is on its intended course. “every business will benefit from the preparation of a carefully written business plan. goals. The mission statement defines in a sentence or a paragraph an entity's reason for existence. ambitions and moral. what. a summary description of the business followed by administrative information. and how much. an independent business owner who takes an idea. it anticipates and provides answers to critical questions regarding the 9 . The business description follows. and break-even analysis. the marketing plan.
A comprehensive plan looks at four essential marketing tools . Roland Christiansen. SWOT Analysis The SWOT analysis is a simple framework for generating strategic alternatives from the analysis of a business situation. Strengths are those potential factors that make a firm more competitive than its direct competitors. and threat analysis. Weaknesses are potential limitations and defects in an organization and/or weak factors relative to direct competitors. Opportunities are future factors that allow the organization to improve its relative competitive position. liabilities. and Threats. as well as the level of individual business units. Learned. SWOT stands for Strengths. The three phases of the SWOT analysis are detect. while threats can reduce its competitive position. C. The balance sheet should include your company’s total assets. weakness. Kenneth Andrews and William D.G. The financial plan provides a detailed financial plan for profit and loss forecasts. The SWOT framework was first described in the 1960’s by Edmund P. Kenneth Andrews went on to further discuss the topic in 1971 with his book The Concept 10 . A summary of key ratios is also used to measure financial benchmarks of success (San Diego Public Library 2005). and implement/monitor the strategy (Clauson. The total assets should be equivalent to the total liabilities plus total net worth. place. and total net worth.business. determine. and promotions . 2001). Guth in Business Policy. Weaknesses. The marketing plan describes what kind of product the company will provide and explains how the product is different from that of the competition. marketing. J.and applies them to the development of a strength. and Cases. It can be applied to the corporate level. and will forecast at least 24 months into the future. Opportunities. opportunity. and also provides an analysis of the target customer.product. product/service. Text. price.
Because it concentrates on the issues that potentially have the most impact. 2001). the SWOT analysis is useful when a very limited amount of time is available to address a complex strategic situation. 11 . facilitates organizational change. A SWOT analysis identifies and addresses strategic issues. increases the likelihood of achieving goals.G. The General Electric Growth Council used this form of analysis in the 1980's. and improves a company’s competitive position (Clauson. J. provides an organization with a catalyst that stimulates positive activity.of Corporate Strategy.
Restaurant managers of San Luis Obispo will also be interviewed to identify additional possible sources of organic food and ingredients. 12 . Every business plan is built from the same basic structure: an executive summary. comprehensive research on the public opinion towards organic food. and on competing businesses within the restaurant industry. will need to be contacted about what ingredients they can provide and at what prices. startup and operation costs. population demographics within San Luis Obispo. To determine what dishes can be offered to customers. local organic farms represent other potential food suppliers. preferably those located in the Central Coast area of California. and supporting documents. The process of creating this business plan will require broad.Chapter 3 METHODOLOGY Procedures for data collection To determine if a new organic restaurant can successfully generate profitable revenue in San Luis Obispo. Foodsupplier. For a restaurant this would involve a description of the available cuisine. marketing plan. Data must be collected to develop the marketing plan and financial documents. organizational plan.com provides a state by state directory of both broad line and specialty food distributors. a business plan must be created. suppliers of organic food. To begin the business plan the offered products/services of the business must be described. financial documents.
com contain listings of commercial real estate for rent in San Luis Obispo. Approximately 60% of this space is used for dining. Restaurantequipment.g.The financial documents are the quantitative parts of the business plan. and total rent per year.400 to 1. Pro Builders. websites like showcase. To find a rental space for the business. furniture. Labor costs will be set according to minimum wage laws. If the property requires renovation. PP&E (plant. and any other similar costs (e. An SBA 7(a). and storage. a contractor will be contacted and provide the information needed for estimating that aspect of the start-up costs. California minimum wage laws are available via the United States Department of Labor website. or if any receive a salary. It must be determined if all employees are paid hourly. supplies. advertising. The desired size for this restaurant is between. A strategic and competitive analysis will give an assessment of the strengths and weaknesses of current and potential local competitors. industry standards. preparation. 13 . marketing. as well as per capita income and household income distribution. the population must be researched. Contractors available for remodeling and restoration in San Luis Obispo include Beem Peterson Gen Contractors. and 40% is used for cooking. property. and will come from many sources. The cost of rent. and norms for the location. 1. and equipment). and give the rent per square foot. renovation. small business loan.net has a huge selection of supplies and equipment. These include a section on startup costs and operation costs. The majority of this information can be found on websites selling the products that will be needed for start-up. labor. bank loans) must be determined. as well as links to other websites that can provide furniture for food service businesses. initial inventory. Census data will provide accurate details of the population demographics within San Luis Obispo. will pay for the majority of startup costs. and Pacific Builders.800 square feet. Information on these costs will be needed to calculate the total cost of the first year of operation. To produce a concrete marketing plan.
what unique resources does the company 14 . Data on these competitors can be obtained via their websites. news. and business information. The external environmental analysis may reveal certain new opportunities for profit and growth. LexisNexis describes itself as the "world’s largest collection of public records. The absence of certain strengths may be viewed as a weakness. A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective.which have been identified as Natural Café and Evos. Internal factors are commonly the strengths and weaknesses. Procedures for data analysis: Analysis of the collected data will be both qualitative and quantitative. and possibly from interviewing managers and owners if they are willing. weaknesses. Additional information on Evos can be found via the LexisNexis database. while external factors are opportunities and threats. and the number of employees. Most businesses use the same basic questions during a SWOT analysis. what does the company do better than anyone else. legal. Changes in the external environment also may present threats to the firm. unpublished opinions. opportunities. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats to the business. up to 7 years of sales/net income. A SWOT analysis will be developed from the competitive analysis and market data to identify the strengths. forms. and threats facing the restaurant. To get an idea of its strengths a business could ask itself many questions: what advantages does the company have. These come from within the company's unique value chain." It provides a vast amount of information including SIC codes. securities.
SWOT is stage 2. a rank and weight is assigned to each factor. Rank measures how well the company is currently responding to the factor on a scale of 1 to 4. Weights are assigned values between 0. and 1 means below average. and cash flow problems (Slezak 2009a).have access to. To identify weaknesses a business looks at what could be improved. unimportant. the final step of the competitive analysis will be to create a Quantitative Strategic Planning Matrix. The sum of all weights must equal 1. or what do people in the market see as the strengths of the company. A 4 means the response is superior. After analyzing the SWOT data. Using the factors discussed in the SWOT analysis. or QSPM. and what should be avoided. The QSPM is referred to as a stage 3 management tool. while at the same time overcoming threats and weaknesses (Slezak 2009b). the competition’s strategy. Figure 3-1: SWOT template Strengths Opportunities Weaknesses Threats Following the completion of the SWOT matrix. very important. and 1. Threats can be determined by a company making itself aware of obstacles. It is an approach taken to compare feasible 15 . The weight indicates the importance of that factor in achieving success in the industry. Opportunities are usually identified by examining interesting trends in the market or by listing competitive advantages. strategies are formulated within a SWOT matrix that take advantage of strengths and available opportunities. 3 means above average. 2 means the response is average. evolving technology.
This study will take the form of a financial analysis. to determine if the restaurant will be able to earn and maintain a profit. A score of 0 means a factor has no effect. a profitability study will be performed.” Upon completion of the QSPM the alternative with the greater sum total score will be the action taken by the company (Slezak 2009b). Figure 3-2: Quantitative Strategic Planning Matrix template Alternative 1 Key Factors Wei ght Ra nk Total Score (Wei ght x Ra nk) Alternative 2 Wei ght Ra nk Total Score (Wei ght x Ra nk) Strengths: a b c d Weaknesses: a b c d Sum Weights Opportunities: a b c d Threats: a b c d Sum Weights Sum Total Scores 100% 100% 100% x 100% y In a QSPM the rank is different from that of the SWOT analysis. The attractiveness of each strategy is computed by determining the cumulative impact of each external and internal factor. Finally. 2 is possibly acceptable.alternative actions/strategies. When assigning these ranks it is helpful to ask “Does the factor affect the strategic choice?” and “Is the strategic choice attractive to dealing with the factor. 3 is probably acceptable. It 16 . 1 is not acceptable. It scores how acceptable a factor is for the strategic alternative being examined. and 4 is most acceptable.
The breakeven point is the point at which a company's expenses exactly match the sales or service volume. It uses the revenue and expense totals from the cash flow of the restaurant for the first year's figures and projects for the next two years according to expected economic and industry trends. The statement of cash flows projects what the business plan means in terms of dollars. liabilities. Assumptions The assumption made in this business plan is that organic food. pre-bottled beverages) based on competitor prices. ax+by+cz = total sales. balance sheet. The data collected for start-up costs will be represented in the first year of these statements. where a. It shows cash inflow and outflow over a period of time and is typically used for internal planning. b. To produce the forecasts an estimated unit value will be applied to meals. and z are representative of total units sold.requires a sales forecast. and a breakeven analysis to determine if the restaurant is indeed profitable. can be easily obtained by the restaurant through distributors and suppliers. and equities of the company at the end of the fiscal year.e. and c are representative of the unit values previously mentioned and x. drinks. The income statement shows projections for the restaurant over the next three years. these values will be placed into a mathematical formula. 17 . and must follow the formula A=L+E (Assets=Liabilities+Equity). ingredients. and other items (i. the income statement will provide an estimate of net income. y. Revenue and expense figures are drawn from the three-year income projection. income statement. Cash flow statements show both how much and when cash must flow in and out of the business. The balance sheet is a projection of assets. Sales forecasts will be created to help determine profit/loss per month and per year. statement of cash flows.
18 . and sales may not be accurate. Also. With limited time and resources it is not possible to be certain these values are correct.Limitations The limitation of the business plan is that the estimated revenues. costs. the fact that there are so few organic restaurants already operating in the country may indicate that it is not feasible to open one in San Luis Obispo. CA.
To determine the answer to this problem statement a business plan for a hypothetical organic restaurant.com. Every meal is to be freshly prepared for customers. and bestbuy. Joobilance. organic restaurant chain inspired by the increasing health conscious attitudes of Americans. as well as the business plan. Data used in the strategic analysis was collected by researching local restaurants via their websites.com. This data. and a buyer’s catalog for the distributor. restaurantequipment.com. Joobilance utilizes the freshest organic produce and lean cuts of meat to provide customers with meals of high nutritional value inspired by cultures across the globe. All equipment costs are from websites that include ablekitchen. meeting the individual dietary needs and preferences of each one. The key information of this business plan is summarized in this chapter.Chapter 4 DEVELOPMENT OF THE STUDY Data Collection The goal of this project was to determine if it is feasible to open an organic restaurant in San Luis Obispo. The location offers a relaxing atmosphere 19 . United Natural Foods Inc. was created. can be found in the appendix Summary The Restaurant Joobilance is going to be a new healthy. New Frontiers Marketplace. The figures used in the financial section were based off of food prices from the Cal Poly Organic Farm.
delivery. Green buildings are designed to reduce the overall impact of the built environment on human health and the natural environment by: efficiently using energy. and reducing waste. protecting occupant health and improving employee productivity. Investors will be sought out when expansion becomes the desired goal.” using sustainable. strong community ties and support are important to Joobilance. healthy. The employees are driven by a passion for the food they are serving while trained in providing the highest level of customer service to make each individual experience enjoyable. The building will be LEED certified.for customers to enjoy their meal. Joobilance will make use of alternate energy to run operations and decrease the location’s carbon footprint. and even catering for special events. The Mission The mission of Joobilance is to provide a unique. 20 . Alternate energy sources include. resource efficient models of renovation and operation. The majority of food to be used will come from local suppliers along the central coast. The restaurant not only cares about its customer’s health. also providing the option of takeout. but also that of the environment. delicious dining experience from environmentally sustainable locations. The restaurant will be established as a sole proprietorship initially by Jesse Godsey. even using products of California Polytechnic State’s organic farm. Since it is located in a small college community. and other resources. To help finance the startup of this restaurant an SBA 7(a) loan will be needed. water. pollution and environmental degradation. commonly known as “green. and are not limited to wind and solar energy.
325 per year. and chefs. Annual salaries will be paid to an accountant and the owner. Any work in excess of 12 hours in one day and any work in excess of eight hours on any seventh day of a workweek shall be paid no less than twice the regular rate of pay (U.825 square feet and is available for rent at $21 per square foot per year. and more importantly. The location’s potential lies in the fact it is a heavily trafficked area. a location that gives the restaurant a strong chance for success. The founder will act as an overall manager.Location After using www. This retail lot is 1. the first location was chosen to be 728 Marsh Street in San Luis Obispo.showcase. dishwashers/kitchen aid.S. All other employees will be compensated using hourly rates for their specific job function. approving all hires and financial decisions. Assistant managers may be needed eventually to handle personnel. $38. bussers. An accountant and marketing team will be hired and work separate from other restaurant employees. most day to day finances. Hourly rates will be paid according to California Labor Code section 310: Any work in excess of eight hours in one workday and any work in excess of 40 hours in one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be at the rate of one and one-half times the regular rate of pay. downtown San Luis Obispo.com to view available property in the Central Coast. the customers during the owner’s absence. 21 . Positions to be filled include cashiers. Management Summary Joobilance will be starting as a small business. so employee costs will be kept to a minimum. line cooks. Department of Labor 2010).
00 3.400.00 3. The product selection includes a broad array of natural and organic groceries.00 12.33 220.00 241. “UNFI is the leading independent national distributor of natural.67 52.00 2.000.00 4. frozen.00 3.00 19. the atmosphere.00 28.000.Table 4-1: Joobilance payroll Pay rate Year 1 per Year 2 per Year 3 per per hour Year 1 month Year 2 month Year 3 month Salary 40.33 62.283.583.000.400.00 230. The manager of New Frontiers Marketplace. United Natural Foods.000 will be added to payroll for each position’s yearly payroll budget total.500.500.400.000.67 8.00 50. the New Frontiers Marketplace.00 5.33 51.00 Salary 60.67 To account for hourly employee raises and taxes an extra $1. and the environment are what make this restaurant stand out among its competitors. organic and specialty foods in the United States….116.666.083.” This distributor.000.200.67 43. and the Cal Poly Organic Farm provides Joobilance with every ingredient from herbs and spices to fruit. and perishable foods. provides freshly cooked meals and blended smoothies from organic ingredients.00 61. a local organic grocery store provided guidance to the organic food distributor UNFI.400.000.33 45.00 2.000.400.750.00 50.00 5.400. 22 .00 20. and proteins.000.333.366.000.00 44.333.200. Marketing Summary San Luis Obispo census data was used to determine age demographics that would be looked at as the restaurant’s client basis.00 5.00 4.67 33.366.000.000.00 4. as previously mentioned. Inc.00 18.67 Owner/founder Cashiers/Bussers (3) Line/Prep Cooks (2) Chefs (2) Accountant Total Payroll 42.000.00 3.33 30.00 3.750. Products and Services The combination of organic products.000.166.00 4. Joobilance.166. vegetables.00 10.00 2.
the quality of food on which income is spent rises. Engel’s Law states. “As income rises. As of Fall 2007 the enrollment at CPSU was near 20. 35 to 44. an even larger proportion than the college age group. The combined age groups of adults (25 to 34. this is typically where the move to organic food takes place because the bundle of characteristics with which the customer is concerned increases.Figure 4-1: San Luis Obispo census data This figure shows that the key market demographic in San Luis Obispo will be the college students (20 to 24 years old) that make up over a quarter of the town’s population. There are currently two institutions of higher learning in San Luis Obispo: California Polytechnic State University and Cuesta Community College. the proportion of income spent on food falls. This demographic will be very important in achieving success as there is more disposable income available when compared to the college students. even if actual expenditure on food rises.” Accompanying this change. and 45 to 54) working in the San Luis Obispo area makes up 33% of the population. The primary focus 23 .000 students.000 and Cuesta had just over 11.
The building itself has been designed to provide a comfortable. A key to the success of any business is the quality of service provided. at Joobilance all employees are experienced with customer service and share a passion for the food they are serving. By offering a variety of cuisines Joobilance can appeal to multiple tastes and bring in more customers. but a great atmosphere as well. 24 . Not only is the variety of the menu a notable strength. it is believed to be the reason people will come to the restaurant. third-party verification that a building project is environmentally responsible.” LEED certification provides independent. profitable. a salad. opportunities.of marketing for the restaurant is the growing health conscious group of Americans within these age demographics. The various health benefits of organic food have been discussed in the literature review and they appeal to various groups of San Luis Obispo residents. This quality service provides an enjoyable experience for any customer and will keep them coming back. In fact. Whether someone is looking for a burrito. and a healthy place to live or work. inviting feel. People can come and not only enjoy a great meal. and threats of the organic restaurant are listed below along with their weighted impact on the mission. commonly referred to as “green. weaknesses. Also. but the nutritional value of these items is as well. The strengths of this restaurant come from a combination of the menu and the building itself. SWOT analysis The strengths. or pasta they will be able to choose from a selection that leaves him/her satisfied. A branded image will also be designed to provide instant recognition of the business. a fact that all individuals can appreciate is that the building is LEED certified.
and other public ads.15 6% 0. during the first year of operations.24 13% 0.36 10% 0. if this can be considered reasonable by consumers than this weakness can be overcome.00% The weaknesses of this business rest in the facts that this is a brand new. These will likely only be weaknesses. The higher price of organic food is associated with its increased nutritional value.18 50. As a new business. The restaurant will build this buzz by marketing through social media.00% 25 . flyers posted around San Luis Obispo.52 5% 0. unknown business and that organic food can be quite expensive when compared to its conventional counterpart. but the key to achieving this lies in the marketing of the restaurant. These weaknesses can be overcome.Weaknesses Rating 4 3 2 1 2 Weaknesses: new/not established limited funds organic foods mean higher prices limited expansion possibilities Wgt Wgt Score 18% 0.72 14% 0.08 50. obstacles to success. A new business must initially build a public buzz and make a good amount of positive information available. Joobilance must also overcome its initial startup debt and limited supply of funds.5556 Strengths: multiple cuisines/variety inviting appearance branded image quality service nutritional value meet special needs/diets green building Wgt Wgt Score 5% 0.Strengths Rating 3 3 4 3 4 3 3 2.18 7% 0. Table 4-3: SWOT Analysis .Table 4-2: SWOT Analysis .2 8% 0.28 8% 0.15 6% 0.
such as The Biggest Loser. The building’s location in a high traffic. CA that can make Joobilance a successful restaurant. which continues to grow as a result of obesity statistics and television shows.Opportunities 26 . Individuals who are not members of the sought after age demographics may provide business out of simple curiosity and walk-ins. both pedestrian and vehicular. Table 4-4: SWOT Analysis . area is an opportunity within itself. as it will give the business constant public exposure. The numerous age groups supply a variety of potential clientele.Figure 4-2: SWOT Analysis – Strengths & Weaknesses Various opportunities exist within San Luis Obispo. the most important being the student population of California Polytechnic State University and Cuesta Community College. There are also many demographics that exist within these groups. The largest opportunity for success lies in the growing health conscious attitude of Americans.
14 0. The main competitors to Joobilance out of all San Luis Obispo restaurants are EVOS and natural café.21 15% 0. San Luis Obispo is populated by many small businesses. Jooiblance must work to differentiate itself from these restaurants in order to become a thriving business. Both restaurants are health oriented and serve food created from similar ingredients.36 50. they must all be handled strategically or this business could fail.rating Opportunities: 3 student population 4 increasing health conscious attitude 3 cal poly organic farm 3 appeal to many demographics 3 central coast suppliers 4 high traffic bldg locations 2.4 Threats: many local restaurants current economy industry high turnover rate EVOS/natural café wgt 16% 13% 7% 14% 50.18 9% 0.24 6% 0.4 5% 0.00% wgt score 0.15 8% 0. Table 4-5: SWOT Analysis .56 Figure 4-3: SWOT Analysis – Opportunities & Threats 27 .48 0.Threats rating 3 3 2 4 2.3 0. especially when it comes to restaurants.5 wgt wgt score 7% 0.00% While there are only a few threats to the success of Joobilance.
The following strategies were formulated to take advantage of the restaurant’s strengths and available opportunities. Figure 4-4: SWOT Matrix 28 . while at the same time overcoming threats and weaknesses.After analyzing the SWOT data the next step is to create a SWOT matrix.
Table 4-6: QSPM 29 .Various goals were set to make this organic restaurant a success. the three most appealing were discussed and analyzed using the following Quantitative Strategic Planning Matrix.
12 0 0 7% 10% 5% 8% 6% 9% 2 3 0 1 0 3 0.301104972 3 1 0 2 > > 0.3 0 0.1 0.2 0 0.64 0.42 0.3 0 0.16 0.32 4 2 0 2 0.1 0 0.Quantitative Strategic Planning Matrix Strengths [S1] multiple cuisines/variety [S2] inviting [S3] branded image [S4]quality service [S5] nutritional value [S6] green building Weaknesses [W1] new/not established [W2] limited funds [W3] organic foods mean higher prices [W4] limited expansion possibilities Opportunities [O1] student population [O2] increasing health conscious attitude [O3] cal poly organic farm [O4] appeal to many demographics [O5] central coast suppliers [O6] high traffic bldg locations Threats [T1] many local restaurants [T2] current economy [T3] industry high turnover rate [T4] EVOS/natural café Strategic score Strategic score ratio Wgt 5% 6% 7% 8% 11% 6% expansion overcome competitors community outreach AS Wgt Avg AS Wgt Avg AS Wgt Avg 0 0 4 2 3 0 0 0 0.08 0 0.48 0 0.56 1 30 .15 0.16 0.32 0.27 3 3 0 4 0 3 0.32 0 0.28 0.48 0.27 3 1 3 2 2 1 0.33 0 3 3 4 4 3 0 0.64 0.32 0.24 16% 12% 10% 8% 3 4 0 4 0.09 16% 10% 7% 14% 1 4 0 2 0.12 0.24 0 0.16 0.15 0.48 0.33 0 0 3 3 4 1 4 0 0.28 0.68 1.11 0.48 0.18 0.58 1.21 0.16 3 1 0 0 0.28 4.046961 4 2 0 2 < < 0.42 0.4 0 0.14 0.28 3.18 0.28 3.
The variety of food offered by Joobilance is considered one of its top strengths. and T3. T2. S1. wraps.” but the restaurant itself only recycles to make an impact. the restaurant is somewhat similar to Joobilance from a decorative interior to sustainable daily practices. We will depend on the restaurant’s atmosphere and service.T1. Regarding its presentation. the goal Joobilance will be focused on is overcoming competitors in the market. We're committed to providing a good value for your health and your budget. All three of these restaurants face the same threats . While taking a similar stance on health and providing customers with organic ingredients. S2/S4. but EVOS and Natural Café only capitalize on O2. However. EVOS and Natural Café have a slight advantage as they are not affected by W1. and its menu give it the competitive advantage in this situation. San Luis Obispo has many restaurants competing for success. T4. The same opportunities exist for all restaurants. only offering a small choice of burgers. EVOS does not handle them as well as Natural Café and Joobilance. S6. Joobilance’s location. The website for Natural Café does make some quality suggestions for how to “live green. O6. EVOS is a “healthy and environmentally sound fast food chain” located on South Higuera in San Luis Obispo. across both California and the country. T1. "The Natural Café is focused on using fresh. but the direct competition for Joobilance comes from EVOS and Natural Café. Joobilance is also making more of an effort to live sustainably. to give customers a significantly different and more enjoyable experience. and salads." Joobilance overcomes this competitor in a somewhat opposite manner as the menu of Natural Café is similar. EVOS’ short coming is the lack of variety and creativity in the menu. 2. regional ingredients to create healthy and delicious food. The three competitors share 31 .Using the tabulated data above. and 4 because they have already been operating and possess multiple locations.
16 7% 2 0.26 9% 4 0.36 4 0.05 5% 3 0.24 2 0.6 3 0. A closer look was taken at these competitors.39 2 0.42 4 0.14 6% 3 0.3 8% 3 0.21 3 0.15 3 0.06 Nautral Café Rating Weighted Score 3 0. however.06 T T O T O O T O O O Critical Success Factors many local restaurants EVOS/natural café increasing health conscious attitude current economy high traffic bldg locations appeal to many demographics industry high turnover rate student population central coast suppliers cal poly organic farm The competitive analysis shows the Natural Café is the main competitor of Joobilance.15 1 0.05 3.32 7% 4 0.3 .36 2 0.76 Nautral Café Rating Weighted Score 2 0.09 8% 3 0.18 3 0. making it a top competitor for any restaurant in the area.2 3 0.52 4 0.12 3 0.24 8% 1 0.12 2.21 6% 3 0.6 13% 3 0.56 2 0. a difference of 0.31 2.18 1 0.15 2 0.28 3 0.42 3 0.16 14% 4 0.09 W W S W S W S S S S S Critical Success Factors new/not established limited funds nutritional value organic foods mean higher prices quality service limited expansion possibilities branded image inviting appearance green building multiple cuisines/variety meet special needs/diets Table 4-8: Competitive Analysis – Opportunities & Threats Opportunities and Threats Joobilance EVOS Weight Rating Weighted Score Rating Weighted Score 16% 3 0.24 3 0.36 14% 3 0.52 3 0.24 2 0.21 2 0.24 3 0. at Joobilance the effort is made to go above and beyond what other restaurants in San Luis Obispo can offer. The weighted scores of the identified strengths and weaknesses are very close.05 100% 3.18 3 0.4.42 13% 4 0.3 3 0.6 4 0.24 3 0.14 7% 3 0.16 3 0.48 3 0.56 4 0.39 4 0.15 1 0. The competitive analysis produced the following data: Table 4-7: Competitive Analysis – Strengths & Weaknesses Joobilance Competitive Profile Matrices Strengths and Weaknesses Joobilance EVOS Weight Rating Weighted Score Rating Weighted Score 18% 4 0.18 5% 3 0.18 6% 3 0.72 2 0.06 5% 3 0.14 2 0.1 100% 3. and 5.15 3.S2.21 4 0. analyzing them with Joobilance’s SWOT charts.52 10% 2 0.36 1 0.48 1 0.08 4 0.28 15% 4 0.03. 32 .21 3 0.18 1 0.
00 130.500. uniforms.00 200.00 .The weighted scores of Joobilance’s opportunities and threats is much greater than Natural Café and imply that Joobilance can overcome the competition.00 38.930. The startup funding table details all costs associated with opening the restaurant and its first month of operations.822.748.387.0 Speaker System LG .00 2.050.00 1.00 5.Nanosat 5.000.595.00 6.500.00 2.256.00 60.00 734. etc. paper rolls.00 4.00 11.00 1.00 230.000. was to turn a profit.00 750.089. Table 4-9: Startup Funding Startup assets Cash and cash equivalents Leasehold improvements Equipment Fixtures 24V Sunwize wind turbine Mirage . like any other business.00 550.325.500. The financial analysis determined whether or not the restaurant would become a profitable investment by its third year of operations.55" Class / 1080p / 120Hz / LED-LCD HDTV 2 year protection plan Full-Motion Wall Mount Geek squad installation 42 inch wall style booth x 4 4 seat island cluster seating x 2 Cluster unit (6 -8 seats) x 2 Website (flash website) Total Startup Assets Startup expenses: Business license Rent Food inventory Advertising budget Office/Miscellaneous Expenses (cleaning supplies.00 2.00 3.276. Financial Analysis The main goal.) 33 52.00 9.
00 $120.000.00 $100.00 94.00 150.00 75.000.00 2.00 150.00 75.000.00 75.000.000.00 $40.000.000.00 150. etc.e.000.000.000.000.00 $60.00 $160.00 225.000. china.00 25.00 1.000.00 $0.613.00 $20.343.000.00 $140.Pre-opening Labor-staff/Mgmt/Trainers Customer needs (i.) Payroll Utilities Total startup expenses Liabilities: Long term liabilities Total liabilities Capital: planned investment Personal Total planned investment Startup funding required: Startup assets to fund Startup expenses to fund Total funding required Startup funds: Total capital Total liabilities Total funds Figure 4-5: Startup Funding Startup Funding 4.387.000.00 225. napkins.613.000.350.00 130.000.000. silverware.00 94.00 $80.00 Assets Expenses Loan Investment 34 .
775 $11 $4 $5 Year 1 $269.013 5.465 12.388 $338. Table 4-9 provides the resulting sales totals. The restaurant’s sales forecast predicted an increase in sales each month equal to 3% of its first month sales for three years. the statement of cash flows shows that the business will only experience minor cash inflow at the end of 35 . While the restaurant began generating positive income in its second year of operations.000 $200.796 6.433 Year 2 32.050 $26.The various categories of startup costs associated with this business are shown by the above figure.025 16.000 $500.375 $11 $4 $5 Year 2 $352.688 $443.078 40.501 $79.993 $547.338 53. Table 4-10: Sales forecast 3% monthly increase in sales .275 $64.985 $11 $4 $5 Year 3 $435.000 $100.000 $400.233 4.000 $300.013 Year 3 39.599 65.676 *Please see appendix for the detailed thirty-six month forecast Figure 4-6: Sales Forecast Total Sales $600.930 $20.182 $32.000 $0 Year 1 Year 2 Year 3 Using the data generated by the sales forecast an income statement was developed for the first three years. Unit sales Meals Drinks Other Total Sales Unit prices Meals Drinks Other Meals Drinks Other Total Sales Year 1 24.115 $48.591 19.
00 Year 2 $352.00 1.90 320.00 24.00 24.90 316.00 5.00 0.275 $64.000.400. liabilities.940.00 4. and equities of the company at the end of each fiscal year.940 409.00 313.115. and verifies the statement of cash flows with the proof that assets = liabilities + equity.00 38. Table 4-11: Income Statement Year 1 Sales – Meals Sales – Drinks Sales – Other Total Sales COGS Gross Margin Advertising Contract Labor Loan Interest Office Expenses Operating Supplies Professional Fees Rent Utilities Wages Depreciation Total Expenses Gain on Sale of Assets Net income 269.068.000.00 220.90 3. The balance sheet that follows is a projection of assets.172.00 4.182 $32.073.00 6.year three.00 12.00 0.00 0.00 0.688 $443.493.00 1.304.00 38.914.400.940 Year 3 $435.00 89.00 6.00 3.00 24.00 $0.300.993 $547.501 $79.914.500.00 338.00 3.00) $0.400.325.433.00 4.901.00 36 .00 (91.343.736.00 224.000.00 1.180.325.575.00 38.050 $26.500.312.300.500.00 4.388.914.00 8.00 20.00 4.00 230.930.343.00 241.676 $137.343.500.00 0.00 3.00 48.000.013 125.00 6.00 113.325.000.00 317.556.000.
00) (87.383.00 (1.00) 0.894.00 Year 3 46.575.00 (41.242.220.085.00) (9.00 Cash Prepaid expenses Inventory Fixed Assets Total Assets Loan Payable Capital Stock Retained earnings Total Liabilities and Equity 103.220.00 0.553.00 53.00 Table 4-13: Balance Sheet Year 1 Year 2 1.000.00 (43.000.00 (41.595.220.Table 4-12:Cash flows Year 1 Year 2 Year 3 (91.00 0.00) 150.00 81.843.556.595.00) 1.00) 41.843.889.00) (49.674.00 74.00 3.000.00) 0.00 0.00 0.000.00) (78.00) (49.00 81.901.00) 3.242.00 4.242.000.00) 2.312.00 (2.00 3.468.915.00 87.00) 1.595.00 3.00 9.00 70.194.00 75.205.795.843.00 Net income Add depreciation Decrease/increase in: Prepaid expenses Inventory Purchase/Sale of: PP&E Increase/decrease in: Loan Payment Loan Payable Borrowing Capital Stock Change to cash Beginning cash Ending cash (2.00 12.00 41.00) 0.00 75.194.901.00 87.242.00 41.00 89.000.575.220.298.00 2.00 2.00 (41.00 37 .00 66.00 0.915.595.915.00 75.000.00 0.582.00 1.882.00 10.00 75.000.00 (46.000.000.00 1.00) 46.000.00 (91.
081 48.00 4.0 0 283.975.36 19. Table 4-14: Breakeven analysis Indirect Costs Advertising Contract Labor Loan Interest Office Expenses Professional Fees Rent Utilities Indirect labor Depreciation # of products sold Meals Drinks Other Total Sales average sales price per unit $8 Direct cost per unit Indirect cost per unit Total cost per unit $4.21 $8.0 0 96.014 160.00 24.00 11.00 72.820.000.029.000. The sum of these units is the breakeven point.041 16.616.100.00 14.000. These numbers are used to determine the direct and indirect costs per unit.15 $4.00 114.70 Direct Costs Operating expenses Perishable inventory Direct labor 4.Finally.500. Costs are split into the categories of direct costs.000.00 409.200. those directly associated with sales volume.00 4. the breakeven point. and indirect costs. which allow the number of units to cover these costs to be calculated.744.135 38 .00 377. the breakeven analysis calculates the point is the point at which the company's expenses exactly match the sales or service volume. those that remain the same over the range of sales.
but break even by the end of its third year of operations. 39 .Breakeven point # of units to cover direct costs # of units to cover indirect costs Total # of units to reach breakeven point 83132 84242 167374 According to this financial analysis Joobilance fails to not only generate a profit.
com. Lastly. All costs associated with running the restaurant are accurate according to prices listed on websites. By satisfying all the objectives. AND RECOMMENDATIONS Summary The author created a bare bones business plan. and included a thorough SWOT analysis. statement of cash flows. Joobilance. many details used were real. California to the hypothetical restaurant.com. as well as a financial analysis that investigated three years of business operations. the hypothesis was not supported as Joobilance failed to break even by the third year of operations. and provided by grocery stores and food distributors. While the plan was hypothetical. balance sheet. The location for the restaurant was selected from property listings on showcase. the author compiled all necessary startup costs and generated a thirty-six month sales forecast to produce the necessary data to create an income statement. It is very helpful in getting the business started and 40 . Conclusions After looking back on all the research done it seems as though the business plan is essential to running a successful business. such as restaurantequipment. which was further examined by a Quantitative Strategic Planning Matrix. Following the SWOT analysis a competitive analysis compared all the local competition in San Luis Obispo. CONCLUSIONS.Chapter 5 SUMMARY. and to perform a breakeven analysis.
It is entirely possible to have a successful restaurant by the end of its third year of operations. but this would require some changes in the methodology. research on this topic I recommend taking the 2010 sales of organic food into consideration. and different fixed assets could be obtained. For anyone interested in developing an organic restaurant I recommend a business plan with much more detail than the bare bones format used in this study. but will still fail to break even by the end of year three. For anyone interested in expanding. alternative funding could be utilized. it is not going to be an easy job as there are higher costs associated with running this type of restaurant when compared to one that serves conventional. The time constraint experienced could be seen as a major limitation of the study. Joobilance will see a strong increase in sales during its second and third years of operation. The planning phase would require a much more in depth look into the financial analysis: different distributors and suppliers could be found. The problem statement was to determine if it is feasible to open an organic restaurant in San Luis Obispo. payroll can be altered. as well as a much more detailed look into the growing consumer market for organic food. After looking at the financials it appears that at this time it is not feasible to open an organic restaurant. Recommendations After completing this study I believe that an organic restaurant this day and age would be a great business move for anyone interested. or continuing.helping find the potential customer base. non-organic food. However. According to the financial forecast. the financial analysis at the end of the project is still the most important factor in opening up any business. 41 . However. A financial analysis can show what a business owner can expect to gain or lose.
7 Littleton: (2009)." Journal of Food Science 71. Samonte.5 Athens. Michigan State University: 2007. "Spreading the Organic Word. John." Organic Food News Quarterly 27 Dec 2005 Web. Shows." International Journal of Food Sciences and Nutrition.References Cited Arvaniti. Kate. Faidon Magkos." Restaurants & Institutions 16 Jul 2006: 1 Mar 2010. 2004. 54. Molly J. 2. CT: Praeger Publishers. Davis.17 Aug 2009. and Joseph B. Chambers.9 Chicago. Shane. Fotini. Sarah F.. Dennis K. The Entrepreneur's Guide to Writing Business Plans and Proposals. Canada: Entreneur Media Inc. Greece: (2003). Mosca. Eugene: Palo Alto Software. "Organic Foods. Inc. Winter. Dahm." Business Innovation in Agriculture." Journal of American College Health.3 Beaumont. and Antonis Zampelas. Texas: (2009).. 58.com/2005/12-27/health-benefits-organicfood-article. William A. Illinois: (2006). Leahy. Berry. "The Naturals.htm Knudson. "The Organic Food Market. Food and Natural Resources. http://www. and Amy R." American Journal of Business Education. Tim J. Tim J. Westport. Work The Plan: A Look At Why The Independent Business Owner Has Trouble Calling A Franchisee A True Entrepreneur. Buzza. "Organic food: nutritious food or food for thought? A review of the evidence. 2008.. and Carl K. Heaton. "Create The Plan. 42 . 2008. Aurelia V. The Plan as You Go Business Plan. Hurdle: The Book on Business Planning. Berry. "Organic Foods: Do Eco-Friendly Attitudes Predict Eco-Friendly Behaviors?.grinningplanet.
pdf>. “Organic Food Consumption on the Rise. 1 Mar 2010. Steven E. CA: 2009. Steven E.” Better Nutrition Feb 2004: 28 Mar 2010.sandiego. San Luis Obispo. California Polytechnic State University. How to Write a Mission Statement. 1998. Anatomy of a Business Plan. Slezak. San Luis Obispo. SWOT Spreadsheet. Radtke. Pinson. 2001." San Diego Public Library. Agribusiness Strategy Formulation. An Introduction to the Dynamic Strategic Planning Process. Agribusiness Strategy Formulation.McIver. Web. "Successful Business Plans.gov/public-library/pdf/tidelinebusplan0705. Dearborn Trade Publishing. Heather. 2005. Linda. <http://www. Slezak. Janel M. California Polytechnic State University. The Grantmanship Center. CA: 2009. 43 .
APPENDIX Business Plan: Joobilance Plan outline 1.0 Executive summary 1.1 Mission statement 1.2 Objectives 1.3 Keys to success 2.0 Company summary 2.1 Ownership 2.2 Start-up summary 3.0 Products and services 3.1 Organic 3.2 Services 4.0 Market summary 4.1 Market segmentation 5.0 Strategy 5.1 SWOT analysis 5.2 SWOT matrix 5.3 QSPM 6.0 Management summary 7.0 Financial planning 7.1 Sales forecast 7.2 Financial Documents 7.3 Breakeven Analysis
1.0 Executive summary Joobilance is a new healthy, organic restaurant chain inspired by the newly increasing health conscious attitudes of Americans, planting its roots in California. Joobilance uses the freshest organic produce and lean cuts of meat to provide our customers with meals of high nutritional value inspired by cultures across the globe. Our beverage selection is limited, consisting of made to order smoothies, bottled water, and juices. Every meal is freshly prepared for customers, meeting the individual dietary needs and preferences of each one. While this may take longer to prepare than some restaurants, we want our customers to believe we’re “Worth the wait.” Our location offers a relaxing atmosphere for customers to enjoy their meal, or the option of takeout, delivery, and even catering for special events. After using www.showcase.com to view available property in the Central Coast, the first location was chosen to be 728 Marsh Street in San Luis Obispo, a location that gives the restaurant a strong chance for success. The location’s potential lies in the fact it is a heavily trafficked area, downtown San Luis Obispo. This retail lot is 1,825 square feet and is available for rent at $21 per square foot per year, $38,325 per year. At Joobilance, we care as much about our customer’s health as we do the environment. Our building will be LEED certified, commonly known as “green,” using sustainable, resource efficient models of renovation and operation. Green buildings are designed to reduce the overall impact of the built environment on human health and the natural environment by: efficiently using energy, water, and other resources; protecting occupant health and improving employee productivity; and reducing waste, pollution and environmental degradation. Strong community ties and support are important to Joobilance. The majority of food to be used comes from local suppliers along the central coast, even using products of California Polytechnic State’s organic farm. Our employees are driven by a passion for the food they are serving while trained in providing the highest level of customer service to make each individual experience enjoyable. As founder of the restaurant I will oversee all operations and business decisions, but will have the aid of assistant managers, a marketing team, and accountant. We have broken the population down into age demographics and formulated strategies to boost sales with each key group to ensure success. While our strategic analysis indicates Joobilance can overcome its competitors, the financial analysis indicates we will fail to break even by the end of the third year. At this point we will most likely seek out additional funding, including an additional, the sales forecast and financial documents indicate that by the end of the fourth year the restaurant should be quite successful. 1.1 Mission statement Our mission is to provide a unique, healthy, delicious dining experience from environmentally sustainable locations while our employees ensure customers always receive exceptional, consistent service.
1.2 Objectives The main objective of Joobilance is to become the premier organic restaurant chain in the market, turning a profit and opening a new location within three years. 1.3 Keys to success Our keys to success lie in the creation of a unique and innovative dining atmosphere that will differentiate Joobilance from the competition (i.e. the restaurant will stand out because of a unique design and décor.) Product quality will be a main point of focus. Not only will great food be served, but exceptional service and atmosphere will also be provided. The menu will appeal to multiple groups of clientele, featuring a variety of cuisines. Most importantly, cost will be controlled at all times without exceptions. 2.0 Company summary Joobilance will feature a menu with widely influenced cuisine that gives customers a freshly cooked meal that is both savory and nutritious. To make customers aware of the benefits of a fit diet, nutritional “fun” facts will be featured throughout the restaurant from wrappers to the typical bathroom wall graffiti. The menu should not only appeal to the growing health conscious group of Americans, but all food lovers. Joobilance will offer lunch and dinner with the options of take-out, delivery, and catering for larger scaled events. We will be open seven days a week from 11:00 AM – 7:00 PM, depending on the restaurant’s success the hours of operation are subject to change. We will be closed for major holidays like New Years Day, Thanksgiving, and Christmas as well as Memorial Day, Fourth of July and Labor Day weekend. During these times, many students in San Luis Obispo leave for long weekends. With a major portion of our customers out of the area, it would be more beneficial to close down. The restaurant interior will feature paintings and drawings of pop culture scenes with music that provides a relaxing, social vibe. Local artists, students or not, will be welcome to put their own art, music, or other talents on display, giving the community an opportunity to show their work in a friendly and exciting atmosphere. Special invitations and announcements will be distributed for the opening day, and other special events we host, both personally and over the popular social networking websites such as facebook, MySpace, and twitter. To show customers that their opinions matter, we will be asking them to vote on the menu items they prefer and those they dislike in the opening weeks. This will allow us to establish a solid menu that is appealing to every customer stepping foot in the restaurant. Due to intense competition, restaurateurs must look for ways to differentiate their place of business in order to achieve and maintain a competitive advantage. As the founder of Joobilance I took this into consideration, designing a unique look and environment that is both sophisticated
2.1 Company ownership The restaurant will be established as a sole proprietorship initially. I will be split between building customer relationships and spending time in the kitchen. The fact that no other restaurants in the area have a similar concept presents us with a window of opportunity and an entrance into a profitable market niche. An accountant will focus on the control and handling of financial issues while the owner. Start-up funds: Startup Funding Startup assets Cash and cash equivalents Leasehold improvements 47 52.00 4.2 Start-up summary Joobilance is a sole proprietorship. myself.000 SBA 7(a) loan at an interest rate of 8% and funding the remainder of start-up needs with my personal savings. will be responsible for our personnel. To help finance the start-up of this restaurant I plan on a $150. 2.and entertaining. Investors will be sought out when expansion becomes the desired goal.089.00 .000. While working in the restaurant.
00 75.00 94.613.) Pre-opening Labor-staff/Mgmt/Trainers Customer needs (i. china.00 225.000.00 2.e.256.050.00 1.00 6.00 230.350. silverware.000.822.613.000.Nanosat 5.55" / 1080p / 120Hz / LED-LCD HDTV 2 year protection plan Full-Motion Wall Mount Geek squad installation 42 inch wall style booth x 4 4 seat island cluster seating x 2 Cluster unit (6 -8 seats) x 2 Website (flash website) Total Start-up Assets Startup expenses: Business license Rent Food inventory Advertising budget Office/Miscellaneous Expenses (cleaning supplies.325.0 Speaker System LG .343.00 130.00 94.595.00 150.00 734.500.00 11.Equipment Fixtures 24V Sunwize wind turbine Mirage .00 4.00 5.00 38.000.00 25.) Payroll Utilities Total start-up expenses Liabilities: Long term liabilities Total liabilities Capital: planned investment Personal Total planned investment Startup Funding: Startup assets to fund Startup expenses to fund Total funding required 48 60.000.387.00 200.000.00 2.500.748.500. napkins.00 . uniforms. etc.00 550.00 1.930.00 75.000.00 1. etc.00 2.00 130.00 150. paper rolls.00 3.387.000.276.00 9.00 750.00 2.
000. providing higher nutrient levels. Inc. plant compounds thought to have health-protecting attributes such as antioxidant. the New Frontiers Marketplace. colorings and flavorings. lower pesticide residues. ensuring a safer world for our future generations to live in. and the Cal Poly Organic Farm provides Joobilance with every ingredient from herbs and spices to fruit. 49 . Harmful chemicals are not used in organic farming. are also higher in organic produce. such as artificial sweeteners.1 Organic Joobilance. Phytonutrients. The product selection includes a broad array of natural and organic groceries.000. Research by American nutritionist Virginia Worthington has shown that the differences in organic foods can be enough to help individuals achieve the recommended daily allowance for certain nutrients that they otherwise may not get. and water pollution. Organic produce will contain 10-50% higher phytonutrients than conventional produce.0_Products and Services: 75. There are many benefits to eating organic: higher nutrient levels. and others. and nervous systems. MSG.000. food monitoring programs are constantly showing that nearly one in three non-organic food samples tested contain a variety of pesticide residues. and perishable foods. a local organic grocery store provided guidance to the organic food distributor UNFI. immune boosting.” This distributor. as previously mentioned. This is because there is not a regular application of chemical pesticides and the plant must rely on increased production of these compounds within itself. organic foods are also contributing to the health of the environment in which we live. but it may be the safest. provides freshly cooked meals and blended smoothies from organic ingredients. 3. but most fresh produce can carry multiple pesticides that can have negative impacts on the reproductive. Most pesticide residue safety levels are set for individual pesticides. United Natural Foods.00 The combination of organic products. vegetables. the atmosphere. frozen. and the absence of food additives. at levels higher than those being found in and on organic produce. There is minimal soil. and the environment are what make this restaurant stand out among its competitors. and proteins. immune.00 225. Besides our own personal health.00 150. and hydrogenated fat. When compared to conventional food. Consuming organic foods is not the only way to increase nutrient consumption. organic and specialty foods in the United States…. “UNFI is the leading independent national distributor of natural.Startup funds: Total capital Total liabilities Total funds 3. organic has more dry matter on a pound-for-pound basis. It is reported that pesticide residues in conventional foods are known to be safe and within acceptable health limits. air. However. The manager of New Frontiers Marketplace.
4. 4. organically produced food is the best option that we have. We will have a fully functional flash website where they may read about the restaurant and what we hope to accomplish. health conscious market segment: "People are applying the precautionary principle to their own lives by purchasing food that has not been produced by industrial methods. Male Female The age groups of San Luis Obispo have a much more significant divide: 50 . the population of San Luis Obispo can be broken down as follows: The gender proportion is relatively equal with 1. they can enjoy music while watching anything ranging from international sports to movies to the food network. Our atmosphere makes Joobilance a place people will want to be even when they are not hungry. and growing. listen to and view the work of featured artists. voiced her opinion on the move towards organic food by the new. a toxico-pathologist at the University of Liverpool. I feel I have a good understanding of the accessible market in San Luis Obispo having spent six years in the relatively small college town." 3. or simply place orders for pick-up and delivery with an estimated wait time and digital receipt provided.06 males per female. For those customers that prefer to sit and dine inside the restaurant.1 Market Segmentation Using available census data.2 Services At Joobilance. one of our goals is to accommodate every customer’s needs. Vyvyan Howard.Dr.0 Market summary As the founder of Joobilance. From the simple stance of hazard avoidance.
Engel’s Law states.San Luis Obispo age demographics 2% 5% 2% 3% 11% 10% 5% 3% 4% 4% Under 5 years 5 to 9 years 1 to 1 years 0 4 1 to 1 years 5 9 20 to 24 years 25 to 34 years 35 to 44 years 45 to 54 years 55 to 59 years 60 to 64 years 11% 13% 27% 65 to 74 years 75 to 84 years 85 years and over This graph shows that they key market demographic in San Luis Obispo will be the college students (20 to 24 years old) that make up over a quarter of the town’s population. an even larger proportion than the college age group. High school students of the area (15 to 19 years) will also be indirectly marketed to by these same elements. furthering our customer base and increasing revenue. or decrease. This demographic will be very important in achieving success as there is more disposable income available when compared to the college students. even if actual expenditure on food rises.000 and Cuesta had just over 11. However. As of Fall 2007 the enrollment at CPSU was near 20. this is typically where the move to organic food takes place because the bundle of characteristics with which the customer is concerned increases. the proportion of income spent on food falls. we would like to keep the growth of the 20 to 24 year old demographic within a range of 10-15% as they are the most important group of customers. The combined age groups of adults (25 to 34. The taste of the food and atmosphere is meant to appeal to this younger demographic. 51 . 35 to 44. for certain age groups.” Accompanying this change. There are currently two institutions of higher learning in San Luis Obispo: California Polytechnic State University and Cuesta Community College. Assuming we are able to appeal to 25-35% of the population within these groups the ideal growth we would like to achieve over the years in these demographics is shown below. Over the years we are open it is even possible that the growth rates may increase.000 students. “As income rises. the quality of food on which income is spent rises. and 45 to 54) working in the San Luis Obispo area makes up 33% of the population.
370 35 to 44 years 1.100 55 to 59 years 500 60 to 64 years 150 Desired Annual Growth Rate 8. there are other market segments to be considered where age becomes unimportant: health conscious individuals.4%. 52 .120 20 to 24 years 3. people on diets. and the quality of our food.00% 7.00% Year 1 1210 3808 1480 1434 1177 530 156 Year 2 1306 4265 1598 1534 1259 562 162 Year 3 1411 4777 1726 1642 1348 596 169 While these demographics are important to our success. which is not just ideal for the restaurant.Initial # of potential Demographic customers 15 to 19 years 1. “foodies.00% 6. Currently in San Luis Obispo the median household income is nearly $50.00% 8. The trend in the unemployment graph shows a spike just before April 2009 and it appears to be declining.400 25 to 34 years 1. The large unemployment rate of California may interfere with a willingness to dine out.00% 12.00% 4.00% 7.000. with an unemployment rate of 8. By combining our care. these groups can be satisfied.” etc. but for the economy. willingness to cater to special dietary needs.340 45 to 54 years 1.
52 0.18 Rating Strengths: 3 multiple cuisines/variety 3 inviting appearance 4 branded image 3 quality service 4 nutritional value 3 meet special needs/diets 3 green building 2. weaknesses.5.08 rating W 4 W 3 S 4 W S W S S S S 2 3 1 4 3 3 3 Strengths and Weaknesses new/not established [W] limited funds [W] nutritional value [S] organic foods mean higher prices [W] quality service [S] limited expansion possibilities [W] branded image [S] inviting appearance [S] green building [S] multiple cuisines/variety [S] 53 wgt 18% 14% 13% 10% 8% 8% 7% 6% 6% 5% wgt score 0.0641026 0.0 Strategy A SWOT analysis was performed to determine how Joobilance would perform in the market with possible weaknesses and threats posing as opposition to success. opportunities.00% Rating 4 3 2 1 2 Weaknesses: new/not established limited funds organic foods mean higher prices limited expansion possibilities Wgt 18% 14% 10% 8% 50.36 0.15 0.025641 0.24 0. 5.18 0.72 0.18 0.0480769 .24 0.28 0.2307692 0.18 0.08 0.0769231 0.2 0.1666667 0.1346154 0.28 0.0576923 0.52 0.2 0.0897436 0.0576923 0.42 0.1_SWOT analysis The strengths.72 0.15 0. Wgt Score 0.15 0. and threats of Joobilance are listed below along with their weighted impact on our mission.5556 Wgt 5% 6% 7% 8% 13% 5% 6% 50.00% Wgt Score 0.
21 0.12 0.00% wgt score 0.4 Threats: many local restaurants current economy industry high turnover rate EVOS/natural café wgt 16% 13% 7% 14% 50.36 rating 3 3 2 4 2.18 0.00% wgt score 0.15 0.3 0.0480769 rating Opportunities: 3 student population increasing health conscious 4 attitude 3 cal poly organic farm 3 appeal to many demographics 3 central coast suppliers 4 high traffic bldg locations 2.48 0.15 3.S 3 meet special needs/diets [S] 5% 100% 0.56 54 .14 0.5 wgt 7% 15% 5% 8% 6% 9% 50.24 0.4 0.
0453172 5.0634441 0. 55 .14 0.18 0.0725076 0.21 0. while at the same time overcoming threats and our weaknesses.1691843 0.56 0.1178248 0.31 0.2 SWOT matrix After analyzing our SWOT data the following strategies were formulated to take advantage of our strengths and available opportunities.T T O T O O T O O O rating Opportunities and Threats: 3 many local restaurants [T] 4 EVOS/natural café [T] increasing health conscious 4 attitude [O] 3 current economy [T] 4 high traffic bldg locations [O] 3 appeal to many demographics [O] 2 industry high turnover rate [T] 3 student population [O] 3 central coast suppliers [O] 3 cal poly organic farm [O] wgt 16% 14% 15% 13% 9% 8% 7% 7% 6% 5% 100% wgt score 0.1450151 0.39 0.1812689 0.48 0.1087613 0.36 0.15 3.0422961 0.6 0.24 0.0543807 0.
3 Quantitative Strategic Planning Matrix Various goals were set to make this organic restaurant a success. typically the time when old students return from summer vacation and the new freshman class arrives and gets to know the area through this unique program. pop culture Weaknesses establish a student following. To establish our student following. company information. 56 . To overcome the threats presented by other restaurants in San Luis Obispo. and advertise heavily during Cal Poly’s introductory WOW week. and order placing) Opportunities integrate pop culture to appeal to students informative "fun" health facts on food wrappers/containers advertise with branded image to gain recognition community ties evident (support Cal Poly) more diverse selection than competitors Threats employees are passionate about the food. reducing turnover work to make inner appearance more appealing than competitors. the three most appealing were discussed and analyzed using the following Quantitative Strategic Planning Matrix. we will distribute coupons. to appeal to them and give them an understanding of the benefits Joobilance offers.Strengths interactive website (feature menu. our primary focus is the growing health conscious group of Americans. using Cal Poly students student discounts/specials As mentioned earlier. inviting environment. This will be accomplished through informative health facts featured throughout the restaurant in various places. Joobilance will feature a wide array of food choices in a unique. have special offers. 5. coupons distributed on campus/WOW week advertise the value of the meal "worth the wait" profitability of location can produce funds for expansion buying from local suppliers decreases costs offer coupons/savings to work with the economy organize a social event for the opening.
56 1 .42 0.18 0.28 0.1 0 0.09 16% 10% 7% 14% 1 4 0 2 0.1 0.18 0.12 0.33 0 0 3 3 4 1 4 0 0.2 0 0.32 0 0.32 0.32 0.64 0.301104972 3 1 0 2 > > 0.Quantitative Strategic Planning Matrix Strengths [S1] multiple cuisines/variety [S2] inviting [S3] branded image [S4]quality service [S5] nutritional value [S6] green building Weaknesses [W1] new/not established [W2] limited funds [W3] organic foods mean higher prices [W4] limited expansion possibilities Opportunities [O1] student population [O2] increasing health conscious attitude [O3] cal poly organic farm [O4] appeal to many demographics [O5] central coast suppliers [O6] high traffic bldg locations Threats [T1] many local restaurants [T2] current economy [T3] industry high turnover rate [T4] EVOS/natural café Strategic score Strategic score ratio Wgt 5% 6% 7% 8% 11% 6% expansion overcome competitors community outreach AS Wgt Avg AS Wgt Avg AS Wgt Avg 0 0 4 2 3 0 0 0 0.58 1.3 0 0.48 0 0.12 0 0 7% 10% 5% 8% 6% 9% 2 3 0 1 0 3 0.15 0.42 0.48 0.28 0.48 0.15 0.08 0 0.3 0 0.046961 4 2 0 2 < < 57 0.28 3.48 0.27 3 1 3 2 2 1 0.14 0.16 0.16 0.27 3 3 0 4 0 3 0.68 1.24 0 0.32 4 2 0 2 0.64 0.28 4.21 0.4 0 0.24 16% 12% 10% 8% 3 4 0 4 0.11 0.33 0 3 3 4 4 3 0 0.28 3.16 0.16 3 1 0 0 0.
Joobilance’s location. The same opportunities exist for all restaurants. at Joobilance the effort is made to go above and beyond what other restaurants in San Luis Obispo can offer. the restaurant is somewhat similar to Joobilance from a decorative interior to sustainable daily practices. but EVOS and Natural Café only capitalize on O2. the goal Joobilance will be focused on is overcoming competitors in the market. San Luis Obispo has many restaurants competing for success. A closer look was taken at these competitors. T2. S1. 2. making it a top competitor for any restaurant in the area. however. We're committed to providing a good value for your health and your budget. The competitive analysis produced the following data: 58 . The three competitors share S2. and its menu give it the competitive advantage in this situation. The variety of food offered by Joobilance is considered one of its top strengths. The website for Natural Café does make some quality suggestions for how to “live green." Joobilance overcomes this competitor in a somewhat opposite manner as the menu of Natural Café is similar. regional ingredients to create healthy and delicious food. S2/S4.T1. S6. While taking a similar stance on health and providing customers with organic ingredients. analyzing them with Joobilance’s SWOT charts. However. across both California and the country. O6. Regarding its presentation. EVOS’ short coming is the lack of variety and creativity in the menu. wraps. T1. EVOS and Natural Café have a slight advantage as they are not affected by W1. and T3. but the direct competition for Joobilance comes from EVOS and Natural Café. and 4 because they have already been operating and possess multiple locations. We will depend on the restaurant’s atmosphere and service.” but the restaurant itself only recycles to make an impact. and 5.4. to give customers a significantly different and more enjoyable experience. EVOS is a “healthy and environmentally sound fast food chain” located on South Higuera in San Luis Obispo. Joobilance is also making more of an effort to live sustainably. and salads. "The Natural Café is focused on using fresh. T4.3 .Using the tabulated data above. only offering a small choice of burgers. All three of these restaurants face the same threats . EVOS does not handle them as well as Natural Café and Joobilance.
06 5% 3 0.36 2 0.36 4 0. An accountant and marketing team will be hired and work separate from other restaurant employees.26 9% 4 0.21 2 0.21 3 0. most day to day finances.21 6% 3 0.24 3 0. so employee costs will be kept to a minimum.15 3.18 1 0.52 4 0.09 8% 3 0.6 4 0.15 1 0.1 100% 3.18 3 0. Hourly rates will be paid according to California Labor Code section 310: “Any work in excess of eight hours in one workday and any work in excess of 40 hours in one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be at the rate of one and one-half times the regular rate of pay.36 1 0. line cooks.24 2 0.18 3 0.32 7% 4 0.36 14% 3 0.06 Nautral Café Rating Weighted Score 2 0.52 10% 2 0.48 1 0. Positions to be filled include cashiers.76 Opportunities and Threats Joobilance EVOS Weight Rating Weighted Score Rating Weighted Score 16% 3 0.24 8% 1 0.3 8% 3 0.31 2. and more importantly.08 4 0.15 1 0.21 3 0.Joobilance Competitive Profile Matrices Strengths and Weaknesses Joobilance EVOS Weight Rating Weighted Score Rating Weighted Score 18% 4 0.0 Management summary Joobilance will be starting as a small business.12 2.42 13% 4 0.16 7% 2 0.28 3 0.6 13% 3 0.14 7% 3 0.42 3 0.18 6% 3 0.18 5% 3 0.28 15% 4 0.56 4 0. All other employees will be compensated using hourly rates for their specific job function.2 3 0.42 4 0.48 3 0.52 3 0. dishwashers/kitchen aid.16 14% 4 0. and chefs.6 3 0. bussers.09 W W S W S W S S S S S Critical Success Factors new/not established limited funds nutritional value organic foods mean higher prices quality service limited expansion possibilities branded image inviting appearance green building multiple cuisines/variety meet special needs/diets T T O T O O T O O O Critical Success Factors many local restaurants EVOS/natural café increasing health conscious attitude current economy high traffic bldg locations appeal to many demographics industry high turnover rate student population central coast suppliers cal poly organic farm 6. Department of Labor 2010).12 3 0. The founder will act as an overall manager.21 4 0.05 3.24 2 0.3 3 0.24 3 0. Assistant managers may be needed eventually to handle personnel.15 2 0.05 100% 3.16 3 0.56 2 0. Any work in excess of 12 hours in one day and any work in excess of eight hours on any seventh day of a workweek shall be paid no less than twice the regular rate of pay (U.14 2 0.” 59 . Annual salaries will be paid to an accountant and the owner.72 2 0.18 1 0.05 5% 3 0.14 6% 3 0.06 Nautral Café Rating Weighted Score 3 0. the customers during the owner’s absence.39 4 0.24 3 0.15 3 0.39 2 0. approving all hires and financial decisions.S.
33 September 3431 $37.50 $24.468.727.00 5.000.50 $37.000.83 4842 December 2958 1479 $5.158.070.25 $45.00 $34.222.280.00 1085 $4.75 $43.08 O ctober 2853 1426 $5.733.00 292 $1.33 3267 June 2.00 5.50 $36.33 30.50 5105 March 3116 1558 $6.000.00 4.58 4579 $30.00 5630 $39.67 33.50 $31.50 $46.25 $42.027.67 43.00 335 $1. and utilities.00 2.915.000.00 4.00 20.83 3442 August 2.939.982.923.908 954 $3.25 5193 $35.852.861.025.633.366.33 3967 February 2433 1216 $4.33 4667 $38.50 1715 $6.200.00 10.50 5455 July 3326 1663 $6.677.00 537 $2.966.00 3.1_Sales forecast When forecasting sales and financial documents.00 362 $1.827.500.285.00 546 $2.00 2.67 8.848. food supply.00 2.00 458 $2.335.000.459.00 $35.67 7.00 370 $1.649.83 $29.00 $19.865.870.33 4317 June 2643 1321 $5.550.00 572 $2.08 3004 March 1.33 $24.580.50 $25.58 $28. The prediction is for a steadily increasing sales volume.113.00 475 $2.710.00 $44.118 1059 $4.464.810.554.500.25 5543 August 3378 1689 $6.33 3617 $30.500.08 $35.83 January 2380 1190 $4.602.729.158.58 4929 $26.00 493 $2. All financial statements are based off of the following thirty-six month sales forecast.58 4229 May 2590 1295 $5.00 Salary 60.08 O ctober 3483 1742 $6.025.00 $20.377.75 5368 June 3273 1637 $6.589.67 42.400.50 $22.58 $40.50 $34.651.839.50 $20.00 440 $2.00 $22.83 $40.00 379 $1.387.371. and year by year.75 $46.552.00 598 $2.00 467 $2.00 $30.550.00 5.08 4054 March 2485 1243 $4.640.180.00 3.000.00 405 $2.405.83 3092 April 1.445.75 $49.333.502.00 1400 $5.Owner/founder Cashiers/Bussers (3) Line/Prep Cooks (2) Chefs (2) Accountant Total Payroll Pay rate Year 1 per Year 2 per Year 3 per per hour Year 1 month Year 2 month Year 3 month Salary 40. we factored in an estimated cost that the restaurant faces each year based on payroll.400.744.735.58 3879 $19.655.00 $48.333.000.25 5893 December 3588 1794 $7.50 $32. rent.750.441.50 $21.00 50.720.33 September 2800 $30.00 484 $2.0 Financial Planning Our main goal.00 $23.00 4.00 18.00 309 $1.455.340.50 $48.00 61. It is probable that actual costs encountered will be higher than these estimated values.08 April 2538 1269 $5.970.33 220.495.00 184.108.40.2066.328 1164 $4.750.018.50 $39.114.990.25 O ctober 2.890.583.660.58 3529 September 2.50 $29.126.00 44.00 3.00 60 .50 $28.565.185.705.683.067.458.00 528 $2.33 $33.102.750 875 $3.560.00 353 $1.377.166.00 318 $1.00 344 $1.275 1138 $4.600.645.545.58 $37.021. month by month.071.50 5805 November 3536 1768 $7. 7.425.490.634.420.00 589 $2.912.336.08 3704 November 2.400.855 928 $3.08 $27.065 1033 $4.83 January 3011 1505 $6.00 230.00 $41.83 4142 $26.231.58 3179 May 1.50 $33.715.800.33 51.00 397 $1.50 $43.00 $38.760. loan payments.400.000.946.08 3354 July 2.176.75 5718 $47.645.983.00 423 $2.67 52.08 4754 November 2905 1453 $5.447.00 554 $2.912.202.083.771.366.007.815.895. Year 1 Sales January Meals (units) Drinks (units) Other (units) Total units Total sales Year 2 Sales Meals (units) Drinks (units) Other (units) Total units Total sales Year 3 Sales Meals (units) Drinks (units) Other (units) Total units Total sales 1.00 $25.08 April 3168 1584 $6. like any other business.00 $29.50 $24.00 $36.000.83 $38.33 $27.532.400.470.808.00 388 $1.00 502 $2. is to turn a profit.596.00 563 $2.907.828.00 28.116.508.00 449 $2.58 $31.00 241.858.400.00 5280 May 3221 1610 $6.000.955.00 $27.00 12.58 $34.902.292.200.00 581 $2.313.097.33 $36.075.170 $23.605.003.115.276.815.137.00 519 $2.289.130.002.00 3.292.283.00 414 $2.764.920.00 $32.00 $26.00 19.00 432 $2.83 3792 December 220.127.116.11 $32.390.180.33 62.000.50 $31.960 980 $3.181.00 50.83 4492 August 2748 1374 $5.00 327 $1.757.33 45.013 1006 $4.000.00 $38.000.693.208.00 300 $1.546.333.33 2885 February 1.00 511 $2.934.666.58 $25.824.223 1111 $4.803 901 $3.375.75 5018 February 3063 1532 $6.00 3.197.270.00 5980 $33.50 $27.08 4404 July 2695 1348 $5.
914.00 $0.343.00 6.00 5.556.Drinks Sales .00 224.325.180.400.182 $32.00 20.073.940.172.325.00 4.914.000.00 38.00 38.00 12.000.00 4.275 $64.00 4.00 89.068.575.930.00 3.993 $547.00 1.00 6.00 338.90 313.312.7.736.00 1.688 $443.300.343.00 48.90 316.Other Total Sales COGS Gross Margin Advertising Contract Labor Loan Interest Office Expenses Operating Supplies Professional Fees Rent Utilities Wages Depreciation Total Expenses Gain on Sale of Assets Net income 269.00 38.400.00) Year 2 $352.000.050 $26.00 0.388.00 6.00 8.493.000.00 320.300.00 61 .433.00 241.00 3.00 0.013 125.676 $137.00 (91.500.501 $79.940 317.000.304.00 $0.400.00 3.500.914.00 220.00 0.940 Year 3 $435.00 1.00 409.00 4.343.115.00 24.00 0.00 113.Meals Sales .2 Financial Documents Income Statement Year 1 Sales .90 3.00 230.500.500.00 24.000.325.00 4.00 24.901.00 0.
000.674.00 3.901.000.00) 0.000.843.00) (87.00 75.595.000.Statement of Cash Flows Year 1 Year 2 Year 3 (91.00 Net income Add depreciation Decrease/increase in: Prepaid expenses Inventory Purchase/Sale of: PP&E (2.220.00 66.00 (41.00) Loan Payable Borrowing150.595.298.00 (9.000.795.843.00 (41.220.00 12.00 Total Liabilities and Equity 87.00 75.00 70.00 2.00 0.889.00 Cash Prepaid expenses Inventory Fixed Assets Total Assets Loan Payable 103.00 1.00 41.085.194.468.00) (2.553.00 53.00) 3.00) (1.220.00 81.915.843.915.915.00 0.00) 46.00) (49.00 0.194.000.00) 41.00 0.000.242.575.242.000.00 10.00) 46.575.00 Capital Stock 75.00 Increase/decrease in: Loan Payment (46.00 89.00 (41.901.00 62 .00 Retained earnings (91.00 Change to cash Beginning cash Ending cash 1.00 0.00 3.00 2.894.242.595.582.00 9.00 87.00 0.00 41.00) (78.00 2.00 4.00 0.00 Capital Stock 75.000.00) 1.00 3.000.00 81.220.00) 0.00) (49.383.00 74.00 (43.00) 1.00 Balance Sheet Year 1 Year 2 Year 3 1.205.556.595.312.882.242.000.
135 $4.820.081 48.100.000.00 72.00 114.00 4.70 Direct Costs 4.014 160.15 $4.00 4.000.00 283.200.00 14.00 11.041 16.00 409.00 24.744.500.616.000.36 Break even point # of units to cover direct costs # of units to cover indirect costs Total # of units to reach break even point Joobilance FAILS to break even 83132 84242 167374 63 .00 Direct labor 96.7.21 $8.029.000.3 Breakeven Analysis Indirect Costs Advertising Contract Labor Loan Interest Office Expenses Professional Fees Rent Utilities Indirect labor Depreciation # of products sold Meals Drinks Other Total Sales average sales price per unit $8 Direct cost per unit Indirect cost per unit Total cost per unit 19.975.00 Operating expenses Perishable inventory 377.
310.Equipment Costs KITCHEN Single Tank Door Type Dishwasher Spice Shelves Dishtable Package Hand Sink Shelving Unit Three Compartment. High Efficiency Series of Gas Fryers Worktables w/ Overshelf Kit 6-burner ranges Pan Racks Rotisserie Roaster Digital Convection Ovens Fire protection system Exhaust hood and fans Pressureless Steamer Slicer Soup warmer Toaster Braising pan Ice maker-80lbs capacity Refrigerated display case Blender Deluxe sneeze guard cookware Cashier station TOTAL 8.04 1.944.778.36 3.76 2.60 268.30 88.50 961.One Section.00 32.65 1. 6.01 6.733.364.018.37 2.132.00 4.00 3.79 1.76 100.983.Ft.65 248.008.004.85 4.859.96 9.2 Cu.170.879.43 1.92 60.75 4.44 209.95 25.800.88 186.47 194.06 269.767.608.08 64 .64 3.276.50 89.20 104.18 1.00 231.00 49. One Drainboard Sink Worktable Heat lamps Walk-In Cooler w/Floor Refrigerated Prep Station Microwave Oven Hot Food Table Overhead Warmer Heat Lamp Worktop Freezer .95 106.00 2.000.50 199.25 257.00 1.40 643.740.256.19 SEATING/FLOOR & Customer needs 42 inch wall style booth x 4 4 seat island cluster seating x 3 Cluster unit (6 -8 seats) x 2 1000 piece plastic silverware set To-go food containers (200 case) x 2 Bulk silverware (200) china dining plate (12) x 5 bowls (36) x 2 12 oz.32 514.227.144. cups w/ lid (1000) straws (2000) napkins (250) x 4 2.78 1.40 158.748.537.50 1.54 1.71 1.017.90 1.
green.70 Cost for one Cost per unit week (5 units) Peas-in the pod $2.75 $602.55 Potato.45 $14.20 Avocados $3.60 Tomatoes-plum $1.85 Nectarines Pears Raspberries Peas-Snow $2.85 $5.60 Sprouts-alfalfa $1.45 $12.61 $23.76 $0.72 $1.60 Peppers-red $3.80 Squash-spaghetti $1.98 $3.35 Herbs-cup $2.16 $15.65 $15.53 $4.65 $6. red and chiogga Certified Organic 65 .00 $10.15 $5.15 $10.60 $16. red. Romaine Rosemary Cilantro Kale (Red Russian) Parsley Organic Status Certified Organic Certified Organic Certified Organic Certified Organic Certified Organic Certified Organic Packed 15lbs 12 hds 12 bunches 12 bunches 12 bunches 12 bunches 12 bunches Price $20 $12 $12 $12 $12 $12 $12 Beets.09 $0.88 $0.11 $2.60 $7.80 Kiwi $0.14 $10.95 $0.72 $13.35 Squash-zucchini $2.60 $4.45 $11.05 $16.65 $23.26 $4.00 Oranges-Florida valencia $0.47 $12.30 $16.72 $0.75 Squash-butternut $1.10 $8.85 $12.cup Strawberries Pineapple .35 $5.45 $9.97 $3.34 Cost for one week (5 units) $6.Jewel $2.33 $16.47 $2.05 Cranberries $3.36 $11.92 $9.29 $2.35 $14.80 $4.50 $6.12 $10.organic Onions-red Peas Shallots.29 $2.66 $18.13 $1.20 $7.70 Cal Poly Organic Farm: Item FAVA BEANS Lettuce.82 $4.40 $10.61 $3.5lb bag russet $3.82 $1.bunch Cauliflower-white Celery Cilantro Corn Cucumber Edamame Eggplant Garlic Green beans Lettuce-Boston Lettuce-green leaf Lettuce-romaine Mushrooms-cremini Mushrooms-white Onions.00 Scallions $0.85 $16.11 $20.13 $3.80 Potatoes-red $1.04 $15.37 $1.29 $1.70 Blackberries $4.47 $1.26 $3.88 $2.25 $2.75 $4.90 $16.chunks Mangoes $1.70 Spinach $2.30 $1.10 Grapes-seedless $2.70 Peppers-green $1.00 $5.94 $4.94 $4.57 $2.Food Costs Produce Cost per unit Artichokes Asparagus-bunch Bok Choy Broccoli Cabbage-red Carrots.80 $9.37 $1.92 $3.45 $4.65 Bananas $0.05 Blueberries $4.40 $4.25 $13.84 $1.29 $2.55 $13.56 $7.30 $21.61 $23.07 $5.00 Sweet potato.30 Peppers-yellow $4.
20 $140.00 $6.00 $5. Cinnamon-Raisin Wheat Sourdough Breads (specify) Rye.00 $220.00 $45.50 $203. Monterey Jack.94 $6.00 $57. Cost for 2 weeks Cost per unit (10 units) $5.00 $60. Wheat.85 $77.00 $60.00 $60.50 $10.00 $6.50 $7.00 $3.5lbs chickens) Salmon $7.25 $6.60 $247.50 $5. etc. Swiss.06 $7. 7-Grain Best Salad Vinegar Homemade Mayonnaise Honey Mustard Potato Chips Non Organic/Lard $6.00 $6.59 $300. Pepper Jack.00 $406.50 $5.92 $4.50 Yogurt Cow Milk Feta cheese.00 $201.25 $7.00 $0.00 $276. (specify) Salted or NoSalt Cheddar.00 $60. Spelt.00 $4.80 $197.00 $12.50 $30.00 $6.80 $263.00 $260.50 $3.40 $6.75 $3.50 $3.00 $260.50 $125.50 $125. Grains.50 $6.50 $6.52 $4.00 $300.60 $4.78 $3.00 $6. (specify) Salted or NoSalt Mozzarella cheese.18 $3.00 $220.00 $60.00 $1.00 $75.045.00 $35.00 $60.089.Dairy.00 $0. Herbal Jack Swiss – (specify) Salted or NoSalt Soaked Bread (specify) Spelt.00 $12.20 66 .20 $290.50 Cost for 2 weeks Cost per unit (40lbs) Protein Round Steak Ground Beef Bacon (dry/cured) Ground Turkey Beef Ribs Brisket Shrimp Pork Chops Spare Ribs Sausage Tilapia Tofu Steak Ham Whole Turkey (specify size 10lbs-20lbs) Breasts Whole Chicken (unit = 10 3-4.00 $6.00 $60.00 $100.80 $191.00 $130.20 $140.
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