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First Year Business Plan
Owner: Morgan Ashley Chang
1.0 Executive Summary
Introduction Brownie Points (BP) is a start-up brownie specialty retail establishment located in San Francisco. BP expects to catch the interest of a regular loyal customer base with its vast selection of brownies, including not-so-traditional flavors. The company plans to build a strong market position in the town due to the mild competitive climate in the area. BP aims to offer its products at a competitive price to fit within the range of the middle-to-higher-income local market area residents and tourists. The Company BP is incorporated in the state of California. It is solely owned and managed by Morgan Ashley Chang. This will be Ms. Chang’s first company though she brings extensive experience in sales, marketing, and start-up businesses. The company intends to hire two full-time bakers and two part-time baristas to handle customer service and day to day operations. Products and Services BP offers a broad range of brownies, all from high quality chocolate made at local factory Scharffen Berger. BP also plans to sell both hot and cold beverages to satisfy each customer’s taste. BP caters to all of its customers by providing each customer brownie products and beverages made to suit the customer, down to the smallest detail. The bakery provides freshly prepared brownies at all times during business operations. Five to seven moderate batches of brownies are prepared during the day to assure fresh brownies are always available. The Market The baked goods industry in the U.S. has recently experienced rapid growth as a subcomponent of the rapid coffee industry expansion. The Marina location of the shop stimulates consumption of baked goods after exploring the many indulgent shops throughout the year. BP wants to establish a large regular customer base, and will therefore concentrate its business and marketing on local residents, which will be the dominant target market. This will establish a healthy, consistent revenue base to ensure stability of the business. In addition, tourist traffic is expected to comprise approximately 35% of the revenues as Union Street is a high traffic area for go-kart tours and other tourists. High visibility and competitive products and service are critical to capture this segment of the market. 1.1 Mission
BP aims to offer high quality brownies at a competitive price to meet the demand of the middle- to higherincome local market area residents and tourists.
Financial Considerations BP expects to raise $50,000 of its own capital, and to borrow $500,000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required.
1.2 Keys to Success
Keys to success for BP will include: 1. Providing the highest quality product with personal customer service. 2. Competitive pricing. 3. New ideas and flavors.
2.0 Company Summary
Brownie Points is a dessert bakery concept based in the Marina District of San Francisco. It emphasizes handmade gourmet desserts in a high end, yet relaxed atmosphere. Being the only brownie specialty bakery in the Bay Area is the unique selling point of our business.
2.1 Company Ownership
Brownie Points is a sole proprietorship seeking seed money. There is no interest in incorporation at this time though the topic may be open to discussion at a later date if it seems that investors are to be secured.
2.2 Start-up Summary
Our start-up costs come to $300,000 which is mostly kitchen equipment, store furnishings and construction, and starting inventory expenses associated with opening our first store. The start-up costs are to be financed by personal capital. The assumptions are shown in Table 1 and Illustration 2.
Start-Up Start-Up Requirements Start-Up Expenses Legal Office Supplies Beginning Inventory Menus, etc Insurance Rent Design & Construction Furnishings Kitchen Equipment Dishes, Silverware, Glassare, Etc. Total Start-Up Expenses $1000 $500 $2000 $200 $2000 $5000 $100000 $10000 $10000 $2000 $132,700 Roughly $150,000
3.0 Products and Services
Brownie Points sells gourmet brownies coupled with exceptional customer service in a warm atmosphere. Customers can dine-in and enjoy a warm or cold beverage to complement their brownie. Toppings are also available when customers dine in for children, as well as the young at heart. We also offer carry-out so customers can enjoy the treats at their own convenience. We will also offer special promotions such as our Brownie Points Club, and Brownie Points Junior Club. The Brownie Points Club offers customers the chance to contribute to their favorite organization (hence earning brownie points). For every five brownies the customer buys, we will send over a box of brownies to the organization of their choice. For the Brownie Points Junior Club, we offer parents the chance to teach their child good habits by way of motivation with our brownies. We give each child a chart which they must fill out with their parent. When they have completed ten things that the parent deems worth a “brownie point”, the child and parent can come into BP and receive a free child-sized brownie. Parties at BP are negotiable with the owner.
4.0 Market Analysis Summary
Brownie Points focuses on local markets, with a special focus on coffee shop and bakery customers. The Marina district of San Francisco provides an excellent climate for our brownie specialty store as Union Street is heavily trafficked by tourists, and is known to cater to the more affluent of residents.
4.1 Market Segmentation
Our market is divided into four different psychographics: Comfort Creatures, Celebrators, Soccer Moms, and Gourmet Wanna-bes. They represent groups of people sharing similar behavior patterns and reasons for frequenting Brownie Points. Comfort Creatures are mainly the more successful of workers who are driven by status and prestige yet miss homemade comfort foods of their childhood. They may stop in on their own or bring clients in for a gourmet brownie experience. Celebrators fit into the vast category of people celebrating special occasions. Birthday, anniversary, graduation, valentine's day, etc., families and loved ones will gather at Brownie Points for a fun, tasty, and festive atmosphere. Soccer Moms is the title given to all family members of the “Soccer Mom” family. Brownie Points is a gathering place where families are welcome and feel comfortable. "Moms" can come in for after school treats with their children and relax while we pamper the little ones. Or they can meet up with friends for a fun day out - a little civilized time stolen in the midst of a busy day. Gourmet Wanna-bes are those that religiously watch the Food Network and easily spend $50 for the latest cookbook. They'll be the adventuresome diners at Brownie Points, and frequent faces at BP events.
4.2 Target Market Segment Strategy
We have specifically targeted segments of people with an appreciation for delicious desserts and a need for comfort and relaxation. Brownie Points is a haven for the busy & successful who want to treat themselves to something soothing and a little sinful! It doesn't take a lot of time, yet is so rewarding. These people will value the high quality product presented. Our customers will also appreciate the fun and fast service - whether celebrating a birthday or stopping in for a break between shopping.
4.3 Service Business Analysis
Although Brownie Points is creating a new niche in the food service industry, we do share similarities, and therefore compete with several kinds of quick-service dessert businesses:
1. Restaurants: any restaurant offering dessert. 2. Bakeries: Neighborhood Bakeries 3. Coffee Shops: any place coffee and pastries are available for carry-out or dine-in consumption. 4. Supermarket: in-store bakeries as well as frozen specialty desserts offer some competition.
4.3.1 Competition and Buying Patterns
Although Brownie Points is opening up a new niche in the restaurant industry, there is no doubt that we are competing with a variety of similar businesses. We need to compete against the ideas that dessert is something that only follows a special dinner and needn't be any better than a frozen cake. We want every day to be a reason to celebrate. And being able to have a vast array of options for your favorite chocolatey treat is an idea that appeals to everyone. While price may be a factor when competing against Coffee Shops and High End Supermarkets, these same consumers who are willing to pay five dollars for a latte or a scoop of ice cream are already
conscious of a better quality product. We believe they will be equally as willing to spend a little extra for an extraordinary dessert in a warm and friendly setting. The comfort factor also plays an important role in consumer decisions about sweets. Both the atmosphere and staff of Brownie Points excel at warm & friendly. At the same time, the menu will reflect familiar favorites such as chocolate chunk or turtles, while there will be flavors for the more adventurous as well, such as pistachio brownies. We will use the highest quality products; sometimes paring the ordinary with the exotic, but we will always present our brownies in a stylish and aesthically pleasing, but still unintimidating manner.
5.0 Competitive Edge
Our competitive edge is our unique niche in an old market. Although restaurants, cafes, bakeries, ice cream shops, etc have an established position in the marketplace, none are quite like Rutabaga Sweets. We are offering the customers a completely new experience and far higher quality product. No where else will they find a professional chef preparing gourmet desserts right in front of them. The amazing popularity of the Food Network is proof of the public's new-found interest in being a spectator in the kitchen.
5.1 Marketing Strategy
Brownie Points' marketing strategy will be education of the consumer and subsequent word of mouth. We will become known as a unique dining experience as well as a superior pastry shop. Customers will be reached through neighborhood advertising, special promotions, and most importantly, word of mouth. Location will also play a crucial role in marketing and promotion. The business will be located in hightraffic retail area in San Francisco known as the Marina. San Francisco's Marina District offers many incentives to businesses operating there because of the high-end reputation and affluent residents nearby. Also, the area is popular amongst tourists, which will be most beneficial. Brownie Points will target progressive and generally well-educated and affluent consumers who are interested in trying new products and experiences and are dissatisfied with the limited selection and lack of personal service found in grocery store bakeries and neighborhood cafes and coffee shops.
5.2 Sales Strategy
1. We need to sell the company as well as the product. Just as Starbucks became synonymous with
great coffee drinks, Brownie Points will come to be known as the only Brownie Specialty Shop in the Bay Area.
2. We have to sell not only an amazing "show" as the desserts are displayed, but also an above and
beyond service team who are knowledgeable and friendly. People will always feel welcome and at home at Brownie Points.
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