SM

A RT
+

BREAK
CAFE

BUSINESS PLAN



Amanda Cravinho
Paulina Delgado Cuenca
Nutr. 404
11.18.14

TABLE OF CONTENTS
1.0 COMPANY SUMMARY .................................................................................................... 4
1.1 START UP SUMMARY ................................................................................................... 4
1.2

PRODUCT/SERVICES ..................................................................................................... 4

1.3

PROBLEM TO SOLVE ..................................................................................................... 5

1.4

MISSION STATEMENT "Break Fast, Break Smart ................................................... 5

2.0

EXECUTIVE SUMMARY ................................................................................................. 5

2.1

TEAM AND OWNERSHIP STRUCTURE ...................................................................... 5

2.2

PRODUCT AND SERVICE .............................................................................................. 6

2.3

COMPANY FACILITIES.................................................................................................. 6

2.4

MARKETIG STRATEGY ................................................................................................. 6

2.5

MAJOR GOALS ................................................................................................................ 6

2.6

INVESTMENT OPPORTUNITY...................................................................................... 7

2.7

HEALTH REPERCUSIONS ............................................................................................. 7

3.0

COMPANY DESCRIPTION .............................................................................................. 8

3.1

OWNERSHIP..................................................................................................................... 8

3.2

TEAM AND ORGANIZATION ....................................................................................... 8

3.3

ORGANIZATIONAL STRUCTURE ................................................................................ 9

3.4

COMPANY CULTURE .................................................................................................... 9

3.5

PRODUCTS AND SERVICES ....................................................................................... 10

3.6

OPERATING PLAN ........................................................................................................ 11

4.0

HEALTH REPERCUSSIONS .......................................................................................... 13

5.0

THE INDUSTRY, COMPETITION AND MARKET ................................................... 14

5.1 MARKET ANALYSIS.................................................................................................... 14

5.2

THE MARKET POTENTIAL ......................................................................................... 14

5.3

MARKET SIZE................................................................................................................ 15

5.4 TARGET MARKET ........................................................................................................ 15

5.5 MARKET SEGMENTATION ......................................................................................... 16

5.6 MARKET SHARE ........................................................................................................... 17

5.7

MARKETING PLAN ...................................................................................................... 17

5.8

COMPETITIVE ADVANTAGE ..................................................................................... 18

5.9 FEEDBACK ..................................................................................................................... 18

5.10 COMPETITIVE ANALYSIS ........................................................................................... 19
6.0

GOALS, RISKS AND STRATEGIES ............................................................................. 19

7.0

FINANCIAL ASSUMPTIONS ......................................................................................... 20

1.0
1.1

COMPANY SUMMARY

START UP SUMMARY

The founders of Smart Break Caf are experienced and proficient in food preparation and service
having worked in the food service industry for more than 10 years and being licensed Registered
Dietitians. Smart Breaks products have been tested and perfected. Smart Break Caf is ready to
begin moving into a niche market to sell nutritious, convenient, environmentally conscience
coffee, snacks and meals to the public. Considering that a restaurant facility will not be needed
and the meals are being prepared onsite, the startup costs will be minimal. Together the founders
will fund the caf with a $50,000 investment.
As long time residents of San Diego, CA the founders know the market well and founded Smart
Break Caf, Inc. as an S. Corporation. Service of nutritious convenient food and beverages from
a small sustainable cart highlights the founders passion for food and local sustainability The
environment of the caf is upbeat and friendly as Smart Break strives to put a smile on every
customers face. Encouraging healthy life styles and choices is a main goal and Smart Break Caf
does this by offering local organic options that appeal to the savvy environmentally and healthconscience consumer. Constructed from a shipping container the cafs mere appearance sparks
conversations of sustainability and conservation. Smart Break Caf caters to the busy business
professional and is open from 7:30am 3:30 pm Monday Friday. The culture and expectations
of the caf are set by the motivated founders who serve as daily examples for their trustworthy
employees.

1.2

PRODUCT/SERVICES

The traditional landscape for a meal has been meat, starch and a vegetable and often times
includes portions sufficient to completely fill a large plate. This often leads to overconsumption
and undernourishment. At Smart Break Caf portions are complete servings and do not offer
supersized portions in order to separate ourselves from and overindulgence and waste. Smart
Break Caf offers a standing menu with an array of food items and beverages prepared fresh
onsite. (Seasonal options and changes to the menu are made intermittently). Menu items include
breakfast options such as coffee, pastries and oatmeal from our signature self-serve oatmeal
bar. For lunch salads and sandwiches are offered providing 1 cup serving of vegetables.
Features of lunch include options high in protein and low-fat dressings. Pastries such as breads,
scones, muffins and cookies are the only items that are not prepared fresh onsite, yet they are
purchased locally from a high quality retailer only using organic certified ingredients.
According to the California Uniform Retail Food Facility Laws, Smart Break Caf has partnered
with a certified organic local producer licensed to sell produce for procurement of the fresh
seasonal fruits and vegetables that we serve. Only top quality certified products are used on our
menu. Smart Break Caf offers delivery services within a 1 mi radius to patrons who cannot
break away from their day.

1.3

PROBLEM TO SOLVE

Providing healthier meals options during busy working hours is a main goal of Smart Break
Caf. Vegetables and fruits are some of the least purchased food items by consumers today2.
Even more concerning is that when eating away from home, consumers eating habits become
even less nutritious leading to malnutrition, fatigue and lack of concentration2. Positioned in a
busy commercially dense area in Carmel Valley, San Diego, known as Torrey Reserve, Smart
Break caf serves local employees and patrons that do not have the time to plan a nutrient-dense
meal during the work week. High quality ingredients and fresh fruits and vegetables high in
antioxidants and vitamins keep customers focused, energized and happy. Break Fast, Break
Smart is the companys slogan encouraging patrons to see Smart Break Caf as the right choice
during their busy work day.

1.4

MISSION STATEMENT "Break Fast, Break Smart

Smart Break Caf will strive to provide a unique experience of convenience foods by providing
nutritious, locally grown breakfast, lunch and snack options to health conscience customers in
the business district of Carmel Valley, CA. Smart Break Caf will be the choice for busy business
professionals with limited time for meals and the local community of families, adults and seniors.
Smart Break Cafs goal is to provide healthier meal options during working hours.
Employee satisfaction is critical to our success. We pride ourselves on treating our employees as
equals by encouraging staff to share ideas and opinions geared at the success and innovation of
the company. Instilling a sense of pride and collaboration within the company is what will drive
customer satisfaction.
We will be an active supporter of environmental and economic sustainability by supporting our
local community, promoting healthy living and reducing our carbon footprint whenever possible.

2.0
2.1

EXECUTIVE SUMMARY

TEAM AND OWNERSHIP STRUCTURE

Smart Break Caf plans to start as a S. Corporation under the laws of the State of California and
entitled Smart Break Caf, Inc.. The founders are Paulina Delgado and Amanda Cravinho.
Each founder is a practicing Registered Dietitians living in San Diego County and looking to
further their passion for food by service of healthy meal and snack options to the public. Both
founders will participate in management roles as well as day to day operations. Paulina is
delegated as the financial officer and Amanda is designated as the General Manager. Smart
Break Caf employs two part time motivated employees aiding with day-to day operations in
order to adequately serve our customers.

2.2

PRODUCT AND SERVICE

Smart Break Cafe offers busy San Diegans convenient, healthy and delicious food to fuel their
workday. We use fresh, organic and locally grown ingredients for most of our lunch and
breakfast options. We also support local small businesses and out source our pastries, as well as,
local farmers for our green and veggies. Since we are committed to fuel our costumers entire
workday, Smart Break Cafe is open for operation from 7:30 am until 3:30 pm.

2.3

COMPANY FACILITIES

Smart Break Cafe is located inside the Torrey Reserve Business Center in Del Mar
Heights/Carmel Valley area. Four corporate buildings with a combined total of more than 3,000
employees conveniently surround the cafe. The cart is made out of a recycled shipping container
and recycled materials. The interior of the cafe consists of the salad and sandwich prepping area,
smoothie and oatmeal station, coffee station, and self serve deli refrigerator with drinks. There is
also a long communal high table for customers to relax and enjoy their meal. The bathroom
facilities will be shared with one of the buildings

2.4

MARKETIG STRATEGY

In light of the current competition, Smart Break Caf markets its business as a healthy,
convenient and sustainable option to the current standard fare of high fat, sugar and calories that
currently pervade the convenience food market of San Diego. Smart Break Caf uses a
combination of educating consumers about eating locally and seasonally in making healthy foods
choices, while promoting the accessibility of eating a nutritious meal or snack just steps away.
Sustainable and green features adds an allure to consumers to approach, check out the
business, ask questions and possibly make a purchase in the process. Social Media such as
Facebook, Twitter and Instagram are frequently used to promote the business and build a
dialogue about our products offered.

2.5

MAJOR GOALS

To be profitable by month six of operation by consistently increasing sales by at least 15

% each month (first month sales: $30,000).
To increase costumer satisfaction by giving out 100 comment cards and getting at least
50 back and making specific changes to our menu according to their suggestions and
preferences
To increase our costumers vegetable consumption by providing 1.5 cups of vegetables
with every lunch meal we serve to our costumers by serving every sandwich with a side
salad.
To reduce our clients fat consumption by making our own salad dressings and reducing
the fat content by 50% and only adding 4 table spoons of low fat dressing to the salads.

2.6

INVESTMENT OPPORTUNITY

As the organic food industry continues to boom there is still a gap in the market for food
establishments that sell delicious healthy and convenient local meal and snack options that are
certified organic. In addition, the movement for local sustainability and community support has
never had such a sense of urgency that it does today and is increasing in popularity. Investment
into Smart Break Caf and this market base of sustainable organic simple food options shows a
lot of promise. Establishing itself as a small manageable business positioned in the commercial
busy foot traffic area of Torrey Reserve in Carmel Valley, CA gives opportunity of a niche
market in need of our nutritious and convenient products. Lack of competition in the area means
a large market share of potential customers and strong demand. Support of sustainability for the
future and of the local community gives Smart Break Caf an edge to encourage continued
support and investment. If expansion of the business occurs Smart Break Cafs ownership
structure allows it to offer shares of the business to shareholders.

2.7

HEALTH REPERCUSIONS

Consumption of food prepared away from home plays an increasingly large role in the American

diet by providing and increasing amount of calories. The meal that is most often eaten away form
home is lunch and most convenient and affordable lunch options are high calorie unhealthy food
2
. Consequently, most Americans eat too few fruits, vegetables, and whole grains, but also
consume too much saturated fat, sodium, and added sugar 2.
One of Smart Break Cafes goals is to help reduce the association between eating out and higher
levels of obesity by providing healthy convenient food for those who must eat out but do not
want to gain weight. All the meals at Smart Break Cafe are carefully developed to provide 1.5
cups of vegetables, lean high quality protein, and low fat salad dressings. By providing more
than half of the recommended daily amount of vegetables we are providing our clients with an
excellent source of under-consumed nutrients in the United States including: foliate, magnesium,
dietary fiber, vitamin A, C, and vitamin K 4. At the same time, by providing high amount of
vegetables on our meals, we prevent the consumption of extra calories from carbohydrates and
fat. Also, using lean high quality protein and low fat salad dressings in our meals, helps prevent
consumption of extra calories and keeps the meal within the recommended calorie, fat and
protein amounts 4.Smart Break Cafe is an environmentally friendly and health conscious
business. One of the main goals of the organization is to make a positive impact on the
environment by utilizing sustainable materials and implementing sustainable practices. The cafe
is made out of a recycled transportation container, which was refurbished to house a small
prepping kitchen. All the major equipment is energy Star certified and the water faucets are
Water Sense approved. The lighting in the prepping kitchen is energy efficient LED and all the
cutlery and utensils are compostable, recycled and biodegradable. Smart Break Cafe also
recycles the used coffee grains to use as composed material for pants and herbs that will be
grown and used in the cafe. The figure below illustrates the big problem Americans are currently
facing, which Smart Break Cafe will attempt to address with its healthy menu.

3.0
3.1

COMPANY DESCRIPTION

OWNERSHIP

Smart Break Caf was started under the ownership structure of an S. Corporation. The founders
are aware that an S. Corp is more difficult to start and to run operations but investment are from
personal funds and the founders favor the tax break offered5. S. Corporation is favorable due to
the fat that profits and losses can pass through to owners personal tax return and the business is
not taxed itself5. This by-passes double taxation for the company. The two founders are Paulina
Delgado and Amanda Cravinho, who are both registered dietitians with complementary
experience in the food service industry. Both founders invested equal capital in the company and
share equal rights and responsibilities of the company.

3.2

TEAM AND ORGANIZATION

Considering Paulina Delgados prior experience in business operations, she is given

responsibilities for the overall management of the businesses financial aspects, including day-to-

day accounting, inventory and supply, banking and yearly taxes. Based upon Amanda
Cravinhos years of experience in customer satisfaction and quality control, she manages day-today operations and marketing ventures. Both founders split their time to serve and manage the
cart 2 days of the week in order to have one founder present on every open business day. Two
additional employees were hired for Front of Office to serve customers, make deliveries and man
the cash register. These employees are young ambitious and friendly college students with a
passion for nutrition and sustainability and will have 3 years of experience in food handling and
customer service. Organization of this team will keep our high quality services and products at
top quality.
Founders will actively participate each day in the preparation and service of the products. They
will also contribute equally to research, development and analysis of the recipes, products and
materials for Smart Break Caf, with the sole goal of providing quick convenient healthy meals
to the business professional and patrons of Torrey Reserve Carmel Valley, CA.

3.3

ORGANIZATIONAL STRUCTURE

Smart Break Caf employs an innovative organizational structure and encourages bottom up and
horizontal communication. Founders take pride in their employees and believe that team
members perform better and are happier on the job when they feel that they are heard and
considered in business decisions and operations. Founders will encourage open communication
and trust. Part-time employees are still be managed and overseen by owners of the company but
the traditional hierarchy does not exist. Empowered decision making, emphasizing vision and
value, and personal considerations are important aspects to Smart Break Cafs organization.
Founders trust employees to make decisions in the best interest of the company when a manager
is not present. The team based structure of the business breeds recognition and managers give
acknowledgement in order to challenge employees to encourage quality of work life. Staying
ahead of the market by remaining technologically savvy by having both founders and employees
manage social media outlets are crucial to the structure of the organization.

3.4

COMPANY CULTURE

Company culture within Smart Break Caf is fun, accepting, laid back and philanthropic. The
caf encourages social communication and respects ideas and decisions of employees. Integrity
is encouraged within the company as no cameras are in the caf and mangers have no need to
question employees and do not ask for documentation for sick or missed days. Nutrition and
healthy life styles are a staple in the culture of Smart Break Caf. Founders will put together
monthly outings with team members to frequent farmers markets and new healthy food
establishments to encourage health and nutrition while gaining new business ideas for the
company. The company also takes part in non-profit events by quarterly treating team members
to trendy and fun events hosted by non-profits supporting the green movement. Smart Break
Caf is a member of Sustainable Carmel Valley in order to instill the transition initiative in the
company. The transition initiative is a global network of groups committed to building resilient
communities by promoting local food, economies, energy and skills12. Team members share
similar ideas and passions to create a fun, educational and innovative environment.

3.5

PRODUCTS AND SERVICES

Cuisine served and service

Smart break cafe serves convenient, delicious and nutritious breakfast and lunch options for the
busy employees working in the Torrey Reserve Business Center. We offer quick and satisfying
breakfast options including delicious smoothies, oatmeal and pastries that will get the clients
going on their busy work day. We also offer salads and sandwiches as lunch options. All the
menu items are available to purchase at any time during our business hours between 7am and
3:30 pm Monday through Friday. All our items, with exception of pastries, are prepared on site
and at the time they are ordered. We have pre-designed smoothies options, but we are flexible
and allow the costumer to design their own smoothie. We came up with the concept oatmeal
bar, where customers can pick 3 topping to add to their breakfast oatmeal. Also, the salads and
sandwiches are prepared on site and at the time of ordering to ensure freshness and optimize
flavor and nutrient delivery. All sandwiches will include a side salad. The only items purchased
from a local bakery as ready prepared and delivered every other day to the cafe are the breads,
scones, muffins and cookies. Smart Break cafe also has a sitting area for those who want to take
a break from work and relax, as well as, a delivery service for those who prefer to eat healthy
food at their desks. Delivery service for coffee drinks is only available for orders of 3 or more
drinks (See appendix 2).

Menu Items Analysis

Most of the produce and deli meat are purchased twice a week at Restaurant Depot. Some of the
produce used in our salads is delivered to the cafe by Farm Fresh To You. The menu item prices
were determined using the mark up method. The table below summarizes the profit for each
individual item sold and the estimate number of items sold per day. By multiplying those two
numbers we got the daily gross profit of each item and a total gross profit of $885 dollars.
Consequently, the estimated monthly gross profit is of $15, 195 dollars (see Appendix 1).

Table: Analysis of 6 items form the menu

Menu item

Price

Cost

Coffee
drinks
Smoothies

$3.00

$1.50

$3,000

$1.50

$4.50

$2.00

$400

Oatmeal

$5.55

$1.50

$450

Salads

$8.99

$4.00

$4,000

Sandwiches
Pastries

$8.99
$2.50

$ 4.00
$1.00

$4,000
$400

TOTAL

Cost
Month

$12,250

Profit
(for
Each
item)

Daily
items
Sold

Daily Profit

Monthly
Gross
profit
(20days)

100

$1.50x100= $250

$3,000

Calabria coffee

$2.00

10

$2.00 x10= $20

$400

Frozen fruit (RD)

$4.05

15

$4.05x15= $60.75

$1,215

$
4.99
$4.99
$1.50

50

$ 5.50x50= $275

$4,990

50
20

$4.99x50= $249.50
$1.50 x20= $30

$4,990
$600

Quick oats + toppings

(RD)
RD and local farmer for
greens
Deli meat apple gate RD
Brick and bell, La Jolla
(delivery)

245

$885.25

10

$ 15,195

Source

* To determine the month profit for each item we multiplied the profit per item times the average number of items
sold per day and multiplied that by 20 business days per month ($2.50x 12= 30 x 20 days of the month= $600). RD=
Restaurant Depot.

3.6

OPERATING PLAN

Location and size of establishment

Smart break cafe was constructed from an 8 x 20 recycled shipping container that was
purchased from the US Transportation Agency and refurbished to optimal conditions to become
Smart Break Cafe. Smart Break Cafe is conveniently located inside the Torrey Reserve Business
Center in Del Mar Heights/Carmel Valley area immediately outside fours large corporate
buildings with more than 3000 employees and very limited convenient healthy food options. The
total size of the cafe is 16x 20, 8x20 of the cafe plus an additional 8 of seating area directly in
front of the cafe (see appendix 3). The seating area will consist of a long communal high table
and two individual tables on the side. The cafe is directly connected to the citys plumbing and
electricity, so the estimate utility cost per month is summarized in the table below.
Table 2: utility cost estimate
Service

Monthly cost

Annual cost

Space lease

$500

$6,000

Electric

$40

$480

Water

$20

$240

Internet

$40

$480

Total

$610

$7,200

Equipment List
All the major equipment used in the Smart Break Cafes kitchen is energy efficient and Energy
Star certified. Many suggestions of certified equipment suppliers from the Energy star website
were carefully analyzed and many options were compared and demoed before any decision was
made. The suppliers and equipment with the highest efficiency and durability were selected. The
table below lists all the major equipment, the supplier, energy used, price and electrical cost 1

11

Table: Equipment list

Equipment

Supplier

Mop sink
3-compartment sink
Wall shelf
3x refrigerator
1-compartment sink
Dry storage shelf
Espresso machine
Blender
Coffee/tea maker
Hand sink
Ice tea dispenser
Refrigerator/freezer
Toaster Oven
TOTAL

Turbo Air
Turbo Air
Home depot
True refrig.
Turbo Air
Home depot
Bosch
Bandleader
Bunn
Turbo Air
webstaurant
True
Cuisinart

Energy

575W

400W
500W
360W

575W
400W

Price

Energy
Star

E cost/
Day

E cost/
Month

E cost/
year

$290
$527
$100
$1467
$290
$100
$1,000
$100
$500
$290
$50
$1800
$150
$6,664

N/A
N/A
N/A
YES
N/A
N/A
YES
YES
YES
N/A

N/A
N/A
$3.87
N/A
N/A
$0.15
$0.19
$0.13
N/A

N/A
N/A
N/A
$117.69
N/A
N/A
$4.55
$5.68
$4.09
N/A

N/A
N/A
N/A
$1,410
N/A
N/A
$55.00
$68.26
$49.00
N/A

YES
YES

$3.87
$0.15

$117.69
$4.55

$1,410
$55.00

* See appendix 3 for Equipment list with pictures and location within the cafe

Organizational chart of Smart Break Cafe

Smart Break Cafe is a very small business operated by the two owners Amanda Cravinho and
Paulina Delgado and two part time employees. Both, Amanda and Paulina are 100% dedicated to
the business and in charge of inventory, sales and service. They both work full time two days a
week and only half day once a week. Both part time employees work two full time days and half
day one once a week. Together, they cover all operation hours of the week, as shown in the table
below. The Organization has a traditional vertical structure. However, we are such a small
corporation that we highly encourage collaboration, constant communication and suggestions
between both owners and the employees as depicted by the double head arrow in the
organizational chart below

OWNER
Amanda
Manager

OWNER
Paulina
Manager

Half-time Employee

Half-time Employee

12

Employees Shift Table

Monday
Paulina + Employee
1
7:30 am- 3:30 pm

Tuesday
Amanda + Employee 2
7:30 am- 3:30 pm

4.0

Wednesday
Paulina+ Employee 1
7:30 am- 3:30 pm

Thursday
Amanda + Employee 2
7:30 am- 3:30 pm

Friday
Employee 1 +2
7:30 am- 11:30 am
Amanda+ Paulina
11:30-3:30 pm

HEALTH REPERCUSSIONS

Smart Break Cafe provides healthier food options for the busy employees working in the Torrey
Reserve business center. According to the USDA, consumption of food prepared away from
home plays an increasingly large role in the American diet. The meal that is most often eaten
away form home is lunch and most convenient and affordable lunch options are high calorie
unhealthy food 2. Consequently, most Americans eat too few fruits, vegetables, and whole grains,
but also consume too much saturated fat, sodium, and added sugar. Americans spend a large
share of their food budget (42 percent) on food away from home, which has been found to be
less nutritious than food prepared at home 3. Recent research has shown a positive association
between body weight and dietary intake due to higher calorie count and poorer nutritional quality
of away-from-home meals and snacks 2. The research concluded that eating out is associated
with higher overweight and obesity rates 2. One of Smart Break Cafes goals is to help reduce the
association between eating out and higher levels of obesity by providing healthy convenient food
for those who must eat out but do not want to gain weight. All the meals at Smart Break Cafe are
carefully developed to provide 1.5 cups of vegetables, lean high quality protein, and low fat salad
dressings. By providing more than half of the recommended daily amount of vegetables we are
providing our clients with an excellent source of under-consumed nutrients in the United States
including: foliate, magnesium, dietary fiber, vitamin A, C, and vitamin K 4. At the same time, by
providing high amount of vegetables on our meals, we prevent the consumption of extra calories
from carbohydrates and fat. Also, using lean high quality protein and low fat salad dressings in
our meals, helps prevent consumption of extra calories and keeps the meal within the
recommended calorie, fat and protein amounts4.
Smart Break Cafe is an environmentally friendly and health conscious business. One of the main
goals of the organization is to make a positive impact on the environment by utilizing sustainable
materials and implementing sustainable practices. The cafe is made out of a recycled
transportation container, which was refurbished and adapted to house Smart Break Cafe. The
kitchen was designed and constructed by a company specialized in Cargotecture, which is a
new and sustainable area of construction and design where recycled transportation containers are
used for new constructions 6. Transportation cargo containers have a limited life span. After a
few years they are no longer fit for transportation and they become trash 6. It is more expensive
to fixed the used containers than to purchase a new one, so many port around the word including

13

USA ports are filled with old containers that only takes up space. The United States is one of the
countries that recycles and used these containers the least. European countries have been using
them as inexpensive, durable, strong building blocks for almost a decade 6. In order for the
container to be safe to use as a foodservice facility, it was sanded and re-painted with non-toxic
paint adequate for foodservice facility. The flooring was also adapted for a food service facility
with concrete. Since Smart Break Cafe will operate during daytime, we decided to take
advantage of being in Sunny San Diego and utilize as much sun light as possible. Since the
prepping kitchen is small and not very tall we were able to install LED bulbs for direct lightning
above the prepping area. Even though LED lightning was more expensive to purchase, it is
energy efficient and reduces our electric monthly cost. All our major equipment is Energy Star
certified equipment, and the faucets are Water Sense approved 7. All our meals will be served in
biodegradable plates, recycled takeout boxes and compostable cutlery made out of vegetable
starch. We will also use napkins made out of recycled paper 8. As part of our effort to be a
sustainable organization, we recycle our used ground coffee grains and use them as composed
material along with soil to plant herbs and flowers to decorate our siting area, as well as to
potentially using the herbs as ingredients in our menu items. Lastly, we will separate our waste
for recycling and composting of all our food waste. LEED green building certification has very
strict and specific criteria that must be incorporated in a building applying for LEED
certification. Smart Break Cafe was designed with following the LEED criteria and will be
submitted for approval of certification 9.

5.0
5.1

THE INDUSTRY, COMPETITION AND MARKET

MARKET ANALYSIS

Smart Break caf takes advantage of the ever booming organic food industry and will align
themselves with the niche movement to support local farmers and suppliers. The steadily
growing market of blending convenience foods with nutrient dense options has been emerging
over the last decade for the health-conscience consumer. San Diego contains a large
demographic of health nuts who want to do their part in supporting their local community and
it houses plenty of untapped markets to capitalize on.

5.2

THE MARKET POTENTIAL

For the last 20 years the organic food industry has been growing rapidly. With the trend of
healthy eating on the rise, the need for fast, healthy and organic meal options will only increase.
The sale of organic food and beverages has increased from $1 billion in 1990 to $26.7 billion in
201010 which is nearly a $1.5 billion increase in sales every year over the last 20 years. San
Diego is no stranger to the health-conscience consumer but when you add the element that San
Diego is the second largest city in California with thousands of busy adult professionals11, a
demographic with potential for growth becomes apparent. Smart Break Caf will position
themselves in a submarket of San Diego; Carmel Valley. Carmel valley is a wealthy coastal

14

community; unique because in addition to residential units, it is comprised of densely populated

commercial office buildings12 with limited food establishments offering quick healthy choices.

5.3

MARKET SIZE

Carmel Valley, California is a coastal community located in the northwestern corner of San
Diego, California. Carmel Valley is home to 42,047 people which has increased almost 50%
since 200012. Torrey Reserve is a 260,000 sq. ft. office park consisting of 4 commercial office
buildings housing 3,868 employees located at 11512 El Camino Real, San Diego, CA 9213013.
Torrey pines is boasted as a class A office project offering scenic views of the pacific Ocean to
the west and bluffs to the east as well as featuring various amenities and an ergonomic design13.
San Diegos fabulous weather adds a great perk to outdoor food vendors positioned in this
business park to capture foot traffic and busy professionals trying to catch some sun on a busy
day. During daytime business hours the population within a 1mi radius of Torrey Reserve
increases by 334%, bringing the population from 1,388 to 4,63913. Currently, the only other food
establishments on the premises are Ruth Chris Steak House opening for dinner and a small
coffee cart. To find our immediate competitors a drive across the busy street of El Camino Real
is necessary. Smart Break Caf positions themselves to accommodate on-the-go patrons with
easy walk-up access and close proximity to meet their needs.

5.4

TARGET MARKET

The profile for our target customer for Smart Break Caf is the environmentally conscious
person with limited time for planning and preparing a complete and nutritious meal. This will
include busy business professionals, adults and seniors within walking distance of Torrey
Reserve. It is likely that as the company becomes more profitable this target market will expand
to greater Carmel Valley and San Diego. Employees make up 83% of the population surrounding
Torrey Reserve13 and Law Offices, Architecture firms and Engineering offices employ the
majority of young adult professionals that frequent the area. The average income of Torrey
Reserve is $94, 966 with a median age of 39. The population is 74% White, 14% Asian, 6.5%
Hispanic and 4.9% other14.

15

5.5

MARKET SEGMENTATION

According to the Local San Diego Census, the segmentation of the population of Torrey Reserve
by age and race are as follows:

Figure 2: Demographics of Torrey Reserve by

Age
15.80% 11.20%
30.10%

42.90%
1-19 Years Old
20-44 Years Old
45-59 Years Old
60 and Older

Figure 2: Demographics of Torrey Reserve by Race

6.50% 4.90%

14.30%
74.30%

White
Asian
Hispanic
Other

The segmentation of the population of Torrey Reserve by education level is as follows:

16

Education Level

Figure 3: Demographics of Torrey Reserve by

Education
Doctorate Degree
Graduate Degree
Bachelors Degree
Associates Degree
College, No Degree
High School Diploma or Equivalent

7.70%
23.10%
19.60%
12.10%
6.90%
1.10%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

Percentage of Population

Finally, the segmentation of the population of San Diego by income is as follows:

Income of Torrey Reserve
Median Income
$84,200

Average Income
$94,966

To summarize, Smart Break Caf will establish itself within Torrey Reserve within Carmel
Valley, CA, which primarily consists of white customers with income levels above $80,000/year
and between 20-44 years old. In addition, 50% of Torrey Reserve residents have an
undergraduate, masters or doctorate level degree. These favorable statistics comprise the major
portion of Smart Break Cafes primary target market.

5.6

MARKET SHARE

The average number of quick convenient healthy small businesses within a 1 mi walking
distance of Torrey Reserve is currently three. With Smart Break Caf in the market it is the
fourth small business to offer quick nutritious meals geared towards the busy professional. Smart
Break Caf projects it will be able to establish a market share of 1/4 of the market and should
pick up at least 20% of coffee and meal sales in its first month. This relates to a potential
customer base of 773 in which Smart Break will strive to serve at least 30%, or 232, of these
potential customers on an average day. Due to the cafs inviting ambiance and unique
desirability in the current scheme of healthy eating, the founders feel this is a realistic potential
market share.

5.7

MARKETING PLAN

To stand out from competitors, Smart Break Cafe markets its business as a healthy, convenient
and trendy option geared towards busy health-conscience young professionals that feel they are

17

part of the in crowd when they are supporting local sustainability. The current standard
convenience-food choice is high in fat, sugar and calories and will make our products a stark
contrast3. We promote pick-me-up products that fight fatigue during long work days as well as
fun easy nutritious meals that provide adequate servings of vegetables, protein and fat. Smart
Break Caf markets and positions itself within Torrey Reserve as the go to, on-campus, guilty
pleasure with great benefits by promoting its slogan break-fast, break smart. A hype will be
built up throughout the complex by passing out fliers (Appendix 5) containing opening day
coupons and buy 10 get 1 free coffee Smart cards (Appendix 6). The oatmeal bar is our most
unique feature and is highlighted with bright and playful colors. Smart Break Caf has an allure
of intelligent convenience that is fun, hip, relaxing and unique. Educating consumers about
eating locally and seasonally when making healthy food choices is a focus of Smart Break Caf.
Chalk boards provide information on helpful healthy and sustainable tips and feature local
sustainability efforts in the community. Smart Break Caf is establishing an online presence by
starting a Facebook, Twitter and Instagram account and featuring healthy living tips, articles and
information on the best ways to support the local community. This helps to solidify Smart Break
in the marketplace as it is emerging. Sustainable materials and products are feature as new
emerging products used by Smart Break Caf. Price is not a main marketing objective as the
demographic is largely successful but the reasonable prices will help to establish our trustworthy
brand.

5.8

COMPETITIVE ADVANTAGE

One of the most attractive features of Smart Break Caf is that it provides nutrient dense
convenient meals to a population that heavily relies on convenience food because they dont
have time to plan ahead. Providing adequate protein and 1 cups worth of vegetables with every
lunch meal to prevent fatigue and promote health highlights Smart Break as the right choice.
Promotion of sustainability and service of local organic products creates an emotional connection
with the business that encourages return customers. Positioned on the sidewalk of Torrey
Reserve gives Smart Break a proximity advantage to intercept all foot traffic during business
hours. This will all set Smart Break Caf apart from its competition. No other food cart focuses
on this type of fare or provides the diversity in menu options to a small niche population that has
a direct need for our products.

5.9

FEEDBACK

Smart Break Caf recognizes that customer satisfaction is its primary concern for success.
Therefore, Smart Break Caf will provide various avenues for customer feedback. Onsite
comment cards for immediate responses are be provided to customers. A website address is
printed on all comment cards which will encourage feedback and comments about the quality of
food purchases. Smart Break Caf welcomes creative feedback that will help to improve the
experience of its patrons. As a part of accessing the website, there will be opportunities to
receive coupons for discounts on future purchases by providing ideas or commenting on ways to
improve support and sustainability of the local community. The website also has a link to Smart
Breaks Facebook and Twitter page to encourage community feedback and dialogue about the
company. Smart Break Cafs founders are onsite and available for direct communication with
customers Monday through Friday and will actively engage customers for feedback.

18

5.10

COMPETITIVE ANALYSIS

Torrey Reserve hosts only two food establishments on campus, Ruth Chris and a small coffee
cart. Neither of which are direct competitors of Smart Break Caf due to opposite operating
hours or limited product. Within a 1 mi radius there are just a handful of establishments that
provide meal options advertised as healthy or who are open during the same business hours and
provide similar products. These include Pacific Caf and Catering and Market Place Grill. Of
these competitors none of them offer convenient on the go meals that are satisfying and
nutritious. Smart Break Caf is the sole provider of sustainable organic easy access meals and
snacks. The proximity to the target market, hours of operation and easy street access that is
visible from outside provides an advantage that no other competitor has. Competitors have been
established longer and have a solid customer base but being new to the market Smart Break Caf
represents itself as sustainable, trendy and philanthropic. Competitors online presence is
minimal and Smart Break Caf takes advantage of this by using it as a marketing avenue to build
the image of quick, hip fresh and local food with delicious flavors. This allows Smart Break Caf
to have flexibility in the menu, pricing scheme and marketing, giving us the upper hand in the
market. See Appendix 7 for an Analysis of Competitors detailing two competitors within 1 mi of
Torrey Reserve and comparing Smart Break Caf against two of its prime competitors.

6.0

GOALS, RISKS AND STRATEGIES

Short-term goals
1.

To increase our clients vegetable consumption by serving 1.5 cups of vegetables with
every lunch meal we serve. Every sandwich will come with a side salad. The main barrier
to accomplish this short-term goal is that not every costumer will eat the side salad served
with the sandwiches, so that will increase the waste generated by the cafe. Also, clients
could ask for alternative unhealthier sides like chips, which will prevent us from
successfully increasing vegetable consumption of our clients.

2.

To reduce our clients fat consumption by making our own salad dressings and reducing
the fat content by 50% and only adding 4 table spoons of low fat dressing to the salads.
The main barrier to accomplish this goal would be clients asking for extra salad dressing
or not liking our dressings and preferring a commercial creamy high fat dressing on their
salads.

19

Long-term Goals
1.

To be profitable by month 6 of operation by consistently increasing sales by at least 15 %

each month. A barrier to accomplish this goal would be to have a major equipment fail
that required additional investment. Another barrier would be if a major ingredient
shortage that would force us to purchase that ingredient from a more expensive supplier.

2.

To increase costumer satisfaction and returning costumers by giving out 200 comment
cards and getting at least 100 cards back and making specific changes to our menu
according to their suggestions and preferences. A barrier to accomplish this goal would
be to not getting enough feedback from our clients and not being able to determine what
they like and dislike from our menu. This would prevent us from tailoring our menu to
our clients preferences to increase sales.

7.0 FINANCIAL ASSUMPTIONS

The founders of Smart Break Cafe are Amanda Cravinho and Paulina Delgado. Each own 50%
of the company and work full time on the company. Each invested 50% of the star-up cost from
personal savings and no loans or investors were required to start operations. Start-up cost
include: first month lease of the space within the business center, container purchase cost,
container refurbish cost (sanding, repainting, insulating, flooring), kitchen design and
construction, equipment, start-up assets, legal costs, and salary of two part time employees. The
total start-up cost was of $50,000, so each owner invested $25,000. Based on estimated monthly
expenses, the total estimated monthly income and the estimated monthly net profit summarized
in the tables below, the business will pay back for the start-up costs in four moths of increasing
sales.
Table: Start-up cost
Description
Legal

Cost
$1,500

Container purchase
Refurbish cost
Kitchen design/construction+ equipment
Start-up assets needed (2 weeks)
Lease

$900
$10,000
$25,000
8,000
$400

Hourly based salary x2

TOTAL

$1,600
$50,000

Monthly Net-Profit

20

The monthly net profit of an organization is the profit after accounting for the monthly expenses
including: lease, utilities, salaries, and food costs. We estimated the monthly net profit of the
business based on the sales numbers of the first coupe of months of operation. Smart Break
Cafes monthly total sale revenue for the fist month was $27, 295, and the business total monthly
expenses were $15, 550, so the business estimated monthly net-profit in the first month of
operation was of $11,745 dollars. Based on the calculated numbers, and assuming sales will
increase as we get more returning costumers, we estimate to cover the star-up cost by in four
months of operation, begin to return a profit during the fifth month and be profitable after six
months of operation.

Table: monthly expenses

Expenses

Monthly expenses

Lease
Utilities
Salaries (2 part time employees)
Food Cost
TOTAL

$500
$1,200
$1,600
$12,250
$15,550

Table: Revenue
Menu item

Coffee drinks
Smoothies
Oatmeal
Salads
Sandwiches
Pastries
TOTAL

Price

$3.00x100x20
$4.50x10x20
$5.55x15x20
$8.99x50x20
$8.99x50x20
$2.50x15x20

Projected
revenue

$6,000
$ 900
$ 1,665
$8,990
$ 8,990
$750
$27,295

Monthly net-profit = projected income (27,295) monthly expenses (15,550)= $11,745

Financing Plan
Both owners of the company will finance the start-up cost of the organization and no loans or
outside investors are necessary to cover cost.

21

REFERENCES
1. Equipment search. Webstaurantstore. Available at: http://www.webstaurantstore.com. Access
on November 16, 2014.
2. Jessica E. Todd, Lisa Mancino, and Biing-Hwan Lin. The impact of food away from home on
adult diet quality. United States Department of Agriculture. 2010.
3. Joanne Guthrie, Biing-Hwan Lin, Abigail Okrent adn Richard Volpe. Americans Food
choices at home and away: How Do they compare with recommendations? United States
Department of Agriculture.2013
4. Dietary Guidelines for Americans 2010. Health.gov. Available at:
www.health.gov/dietaryguidelines/2010.asp. Accessed on November 15, 2014
5. Choose Your Business Structure. Available at: https://www.sba.gov/content/s-corporation.
Accessed on November 14, 2014.
6. About cargotecture. Cargotecture. Available at: www.Cargotecture.com. Accessed on
November 12, 2014.
7. Energy Star Equipment. Energy star. Available at: https://www.energystar.gov. Accessed on
October 25, 2014
8. Utencils. Lets go green.biz. Available at: www.letsgogreen.biz/pages/utensils/utensils.html.
Access on November 15, 2014.
9. LEED characteristics. USA green building council. Available at: www.usgbc.org/leed.
Accessed on November 16, 2014.
10. Leslie A. Durham. Encyclopedia of Organic, Sustainable and Local Food. ABC-LICO.
2012; 1-3.
11. City of San Diego. Economic Development 2013. Available at:
http://www.sandiego.gov/economic-development/sandiego/business/index.htlml. Accesses on
November 11, 2014.
12. Sustainable Carmel Valley. Demographics for Carmel Valley. Available at:
http://sustainablecounty.org/local/demos.html. Accessed on November 16, 2014.
13. Torrey Reserve Demographics. Available at:
http://loopnet.com/xnet/MainSite/Listing/Profile/Demographics.aspx. Accessed on November
15, 2014.
14. San Diego City Demographics. County of San Diego. Available at:
http://www.sdcounty.ca.gov/awm/farmers_markets.html. Accessed on November 9, 2014.

22