The Bakery

Business Plan
Heather Haeusler, Whitney Block, Nicole Greenbank, & Andrew Spencer.

Project Overview
• The bakery is proposed as a means of additional income for the family farm. • Products are homemade and of high quality. • The bakery will be run the women family.

Operations Plan

Start Up
• The bakery will be constructed on the farm. • Construction will commence in January 2006. • The bakery is scheduled to open in May 2006.

Organizational Structure Board of Directors President/Manager Head Baker Assistant Baker/Delivery Person Assistant Baker/Delivery Person Assistant Baker .

Floor Plan .

Work Plan • • • • 4:00am – Start Baking 8:00am – Bakery Opens Leave for farmers market: 5:00 pm Bakery Closes .

Quality Control Program • Regulations – Local – Consumer Protection Branch – CFIA – Labour – Sanitation .

600 750 3. Ace Mart Restaurant Supply Co Ace Mart Restaurant Supply Co Monthly requirements for capital* $ 103.800 . Costs Total Working Capital Total Capital Required $ $ $ $ $ $ $ $ $ $ 2.000 $ 85.000 640 $ 17.200 525 5.600 1200 $ 85.000 1000ft2 Humboldt Lumber Mart Ltd Ace Mart Restaurant Supply Co Ace Mart Restaurant Supply Co Ace Mart Restaurant Supply Co Sears Canada Sears Canada Nicholson Equipment Ltd.Capital Budget Description Estimated Cost ($) Source of Estimates Obtained Buildings: Bakery Total Building Costs Equipment: Oven Proofer Showcase Refrigerator Freezer Used Mixers 20qt Shelves/dollies Additional equipment Furniture Total Equip.000 560 2.400 2.

440 total $57.Cost of Goods Manufactured 2006 Total Direct Labour Total Direct Materials Manufacturing Overhead $30.500 $16.700 $10.640 .

Inventories • Desired Inventory = 0 • Average Days for Inventories – Raw Material Inventory = 30 days – Finished Goods Inventory = 2 days .

and Sasktel – Have 21 day grace period .Accounts Receivable/Payable • Receivables – From Bulk Cheese Warehouse and Sask Made Market Place – Have 30 days from date of billing to pay – No discounts offered • Payables – Saskpower.

Marketing. and General Expenses • • • • • • • • Accounting Bookkeeping Management Fuel for delivery Benefits Income Tax Interest on Debt Marketing .Administration.

Human Resources .

President/Manager • Responsibilities: – – – – – – – – Oversees daily production Work Schedules Assigning Employee Tasks Traveling Ensures product quality Purchases raw materials Keeps facility running. and clean Accounting Duties .

Head Baker • Responsibilities: – Working long hours – Ability to follow recipes – Ability to produce quality product – Ability to use ovens and mixers – Dishwashing and janitorial skills .

Assistant Baker/Waitress • Responsibilities: – Assist in baking – Operate Cash register and serve customers – Dishwashing. and basic janitorial skills .

Melfort.Delivery Persons • Responsibilities – Deliver product to Bulk Cheese Warehouse & Sask Made Market Place – Deliver products to and work at Farmers Markets in Saskatoon. and Wakaw .

Additional Training • All staff members will take the one day Safe Food Handling Course • Other food safety programs offered by SIAST will be taken .

HR Stratagies • Motivation: – Family Business – Membership benefits .

Marketing Plan .

The Marketing Mix • Products/Services – – – – – – Breads-various varieties Buns Tarts Muffins Cookies Sitting area with coffee/tea and in-store products .

homemade. Melfort • Place – . good quality.Marketing Mix • • Price – High. Saskatoon. but still competitive Promotion – Fresh. down home farm feel Wakaw.

Segmentation. Targeting and Positioning • Population of Saskatoon and rural and urban centers of Wakaw and Melfort • Target markets – Saskatoon – Rural/small centers – The Country Oven • Positioning – Bulk Cheese Warehouse/Sask Made Marketplace – Farmer’s markets .

SWOT Analysis • Internal Strengths – Family business – Location – Homemade recipes • Internal Weaknesses – Location – Inexperience – Increased prices .

SWOT • External Opportunities – Desire for healthier lifestyle – Niche market in urban areas – Large target market area • External Threats – Change in lifestyle trends – Increased fuel prices – Competitors having lower prices .

which cuts costs -located downtown Wakaw Melfort Co-op Very Low -located right in co-op grocery store -very wide variety of products Golden Grain Bakery Average -viewpoint of customers is very positive -charge more for individual items -is a café/bakery -located in the city of Melfort Farmer’s Markets Average-High -located down-town -charge more for individual items -large number of customers -wide variety of products . gasbar/ Subway/cstore/restaurant -make product from scratch and Ready-Make Wakaw Fine Foods Very Low -use pre-mixed frozen dough.Competition Country Crossroads Prices Very High Edge -located just off highway 41 -many services.

Compared To…. The Bakery Products Prices Edge Bread/loaf Bread High -brand new facilities Buns/dz Buns -products made from scratch Other Muffins -family owned/operated Tarts -is a café/bakery Cookies .

300 units @ 3 farmers markets • 6.000 units at Country Oven • Objective: achieve a yearly revenue of $121.Sales and Profit Objectives • 26.200 units @ Sask Made and Bulk Cheese Warehouse • 5.500 .

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Marketing Plan Budget Marketing Budget Advertising Newspaper Western Producer Other Billboard Bulletins Promotion and Development Business cards Travel expenses Total Marketing Expenses $90 $200 $850 $100 $60 $400 Expenses/year .

Financial Plan .

000 Total Financing $180.000 .000 $30.Financing Total Financing Required $104.000 Long Term Bank Debt Owner Equity $150.

Balance Sheet as of December 31. 2006 Assets Current Assets Total Current Assets Long Term Assets Total Long Term Assets Liabilities Current Liabilities 44587 Total Current Liabilities Long Term Liabilities 94431 Total Long Term Liabilities Owner Equity Total Owner Equity Total Liabilities and Owner 139018 Equity 1080 144477 -6538 Total Assets 139018 .

Investment Utilization Ratios Inventory Turnover Total Asset Turnover 26 1. Liquidity Ratios Current Ratio 2. Solvency Ratios Debt Ratio Debt to Equity Ratio 4.Ratio Analysis Ratio 1.34 52.9% 9.8% 14% 103% .93 86.4% 6.67 Company Average Fixed Asset Turnover 3.44 -6. Profitability Ratios Gross Profit Margin Net Profit Margin Return on Assets Return on Equity 2.

50 $3.2% $1.15 $2.5 36.9 55.3 $ of farmers market bread $ of farmers market buns $1.50 10.608 Allowable % Change (when IRR = 15%) 90 981.485 5.447 8.2978 $11.200 8.Risk Analysis Critical Value Interest rate on debt Fuel Prices Driver Wage Quantity of Bread (farmers market) Quantity of Buns (farmers market) IRR=0% IRR = 15% 29% $21.352 53.78 $2.66 4.1 2.4 42.3 .346 $14.571 15.64 7001 Base Case 8% $1.06 40.43 $1.31 $1.

00 6.00 year 2009 2010 2011 2012 2013 2014 2015 Base Case Cash Net Income NPV price .00 2.00 -4.Breakeven price of Farmers Market Bread 8.00 0.00 4.00 -6.00 2006 2007 2008 -2.

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Contingency Plan • If price of bread decreases: – have to either increase sales to a break even level – the bakery would have to find a way to decrease fixed costs • Methods – additional stall at the Saskatoon farmers market – craft sales throughout the province .

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