ORGANIC RESTAURANT BUSINESS PLAN
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.
………………………….39 c..……20 iii.……………………………………………......……………………………………………………. Organic Food in Restaurants….2 c.. The Mission……………………………………………………….21 v. METHODOLOGY……………………………………..14 c.8 c.…………………………….……….. Business Plans……….…………………..21 iv. Management Summary…………………………………………………....17 IV..………. Organic Food………………...………..………19 ii...…………..………………………………………….. INTRODUCTION…………………………………………………………………….3 II. Location…………………………………………………………………..…...……………………………………………19 b. DEVELOPMENT OF THE STUDY……………………………………………………19 a....12 a.………………………………………………10 III.………. SWOT Analysis…………………. SWOT Analysis………………………………………………………….. Significance of the Study…………………………….41 Appendix……………………………………………………………………………………….TABLE OF CONTENTS
I..……………………………….19 i. SUMMARY.4 a..22 vii. & RECOMMENDATIONS…………………………39 a.…1 a.…………………………………………...4 b.…………………………………………………. Procedures for Data Collection……………….63 Food Costs………………………………………………………………………………64
. Conclusions……………………………………………………………. Hypothesis…………………………. Market Summary………………………………………………...43 Business Plan……………………………………………………………………………43 Equipment Costs……………………………………………………………………….39 b... REVIEW OF THE LITERATURE………………. Recommendations……………………………………………………..24 viii.………. Assumptions and Limitations……………….………. Data Collection……………………..22 vi..2 d.………………………….………………………………..32 V. Procedures for Data Analysis……. Products and Services…………………………………………..……………………………………..8 d..……….12 b... Summary………………………………………………………………. Financial Analysis……………………………………………..... Statement of the Problem. Summary…………………………….. CONCLUSIONS.40 References Cited………………………………………………………………………………. The Restaurant………………………………………………….…………………………………………………………2 b. Objectives of the Study………………………………………………………….
4-6.27 SWOT Matrix………………………………………………………………………. 4-6.LIST OF TABLES Table 2-1. 4-13.………………………...25 SWOT Analysis – Weaknesses…………………………………………………….31 Competitive Analysis – Opportunities & Threats…………………………………….. 4-12.…………….Opportunities & Threats………………………………………….. Page Organic Food Sales in the United States……………………………………………. 4-7.…………………….. 4-4.26 SWOT Analysis . 4-3. 4-5. 4-5.35 Cash Flows……………………………………………………………………………36 Balance Sheet…………………………………………………………………………36 Breakeven Analysis…………………………………………………………………..………………………. 4-1.……………..33 Sales Forecast………………………………………………………………………. Page Organic Food Prices…………………….. 4-1.28 Startup Funding…………………………………………………………………….…………………………6 Joobilance Payroll……….37
LIST OF FIGURES Figure 1-1.. 4-4. 4-14.5 Comparison of Pesticide Residues…………….29 Competitive Analysis – Strengths & Weaknesses…………………………………….... 3-1.. 2-2.15 QSPM Template……………………………………………………………………..23 SWOT Analysis .…. 4-2..22 SWOT Analysis . 4-8. 3-2. 4-11..31 Startup Funding……………………………………………………………………….Strengths………………………………. 4-2.. 4-10..27 Quantitative Strategic Planning Matrix……………………………………………….………………….1 SWOT Template…………………………………………………………………….. 4-3.…26 SWOT Analysis – Threats…………………………………………………………….34
...32 Sales Forecast…………………………………………………………………………34 Income Statement……………………………………………………………………..16 San Luis Obispo Census Data……………………………………………………….25 SWOT Analysis – Opportunities…………………………………………………. 4-9.Strengths & Weaknesses………………………………………..………………………….
“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. organic and natural foods combined represent a $20 billion business.” (Davis 2006: 1) Figure 1-1: Organic food sales in the U.Chapter 1
The organic food industry has experienced tremendous growth in the past two decades. sales of organic food have increased by nearly 20% annually. Restaurants that embrace these better quality. Since 1990.
.S. (Davis 2006)
According to the Organic Trade Association. organic ingredients benefit by gaining the support of consumers concerned with eating well and preserving the environment.
chef. and Arby’s are already making the transition to these ingredients.and consumer-driven trend that is nestling into a growing number of independent restaurants. higher-quality meat is currently preferred by consumers. “The demand for natural and organic foods is a well-documented. beef. college campuses and grocery stores” (Leahy 2006). Animals raised organically are free of antibiotics. and are seeing increased sales as a result. Conduct a financial analysis of the first three years of business operations
. Create a business plan for a new organic restaurant in San Luis Obispo 2. Panera. despite higher prices. not with chicken.
Objectives 1. The success of an independent organic restaurant is entirely possible.
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. Conduct a SWOT analysis 3. Top restaurant chains such as Chipotle.The word “organic” is most often associated with fruits and vegetables. However. and other protein sources. and other drugs (Davis 2006). genetically
modified (GMO) feed. added hormones.
This hypothesis will be carefully investigated by creating a business plan and performing a profitability study. an independent organic restaurant has potential to be successful.Significance of the study/Justification Currently. Due to the increasing popularity of organic food. there are no fully organic restaurants in San Luis Obispo.
. California. evident in the market statistics provided by the Organic Trade Association. This project will show if it is feasible to open one capable of earning a profit.
and natural supermarkets was $3. or genetically modified organisms (Dahm 2009). synthetic fertilizers. The establishment of a USDA standard has increased consumer acceptance and there is also an increasing interest in healthy foods (Knudson 2007).Chapter 2
Organic Food Organic foods are made according to certain production standards. organic food has become mainstream (Knudson 2007). agriculture can be described as organic. mass merchandisers. 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. Organic Trade Association. For the vast majority of human history. sales of organic food increased by 38. only during the 20th century was a large supply of new synthetic chemicals introduced to the food supply. United States Department of Agriculture. and is driven by a number of factors. sewage sludge. The market for organic foods is growing dramatically. From 2004 through 2006.8 billion in 2006. Clearly.. The OTA. defines organic foods as products grown without the use of pesticides.4 percent. double the figure in 2000.
. The USDA. It is estimated that organic sales of food products through supermarkets.S. The market for organic foods continues to grow.6 billion in 2006 in the U. Furthermore.
Surveys indicate that many consumers purchase organic foods because of the perceived health and nutrition benefits of organic products. large (doz. and hydrogenated fat. for health and nutrition (67%).39 0.89 2. In one survey. 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). When compared to conventional food. but the increase in sales makes it worth it.99 1.79 Organic 1. and other health risks (Knudson 2007). lower pesticide residues. the main reasons consumers purchased organic foods were for the avoidance of pesticides (70%).The primary demand driver for the increased consumption of organic food is health concerns.99 2. for freshness (68%). Table 2-1: Organic food prices (Kuchment 2008) Produce Non-organic 1.49 1. Higher quality protein and increased concentrations of antioxidants
.49 1.99 3. 2% (half gallon)
There are many benefits to eating organic: higher nutrient levels. Consumers are increasingly interested in foods that are free of pesticides.99 1. Eating organic comes at a price. colorings and flavorings.99 4. such as artificial sweeteners. branded can Eggs. and the absence of food additives. Such consumers appear to be willing to pay the typical 10% to 40% price premium that organic products command (Davis 2006: 7). store-brand loaf Carrots (lb) Celery hearts (lb) Corn. MSG. providing higher nutrient levels.49 3.) Milk.29 1. Red Delicious (lb) Bread.49 3. organic has more dry matter on a pound-for-pound basis. and to avoid genetically modified foods (55%). these foods can cost more than twice as much.39
and molecules that can damage human cells (Arvaniti 2003). 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 monitoring programs are constantly showing that nearly one in three nonorganic food samples tested contained a variety of pesticide residues. and microbiological properties). which are ions. at levels higher than those being found in and on organic produce. However. The quality of organic food includes social and environmental dimensions as well as the common measurements of conventional foods (Arvaniti 2003). organic foods are also contributing to the health of the environment in which
. Pesticide residues in conventional foods are known to be safe and within acceptable health limits. In conventional practices. quality should also be considered. Consuming organic foods is not the only way to increase nutrient consumption. and nervous systems (Heaton 2009). texture. food quality is determined by properties that can easily be measured and quantified (i. Organic produce will contain 10-50% higher phytonutrients than conventional produce (Heaton 2009).and other phytonutrients have been found in organic food. but it may be the safest. immune. 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. atoms. nutrient content. Table 2-2: Comparison of pesticide residues (Davis 2006)
In order to make useful comparisons between organic and conventional food. Besides an individual’s own personal health.e. Phytonutrients are molecules that remove the presence of free radicals.
or eat only organic foods. ensuring a safer world for our future generations to live in. and a desire to become “healthy” have increased the global awareness of organic food products. From the simple stance of hazard avoidance. but few believed they were offered in restaurants. a toxico-pathologist at the University of Liverpool. 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. an increasing public interest. less than twenty-two years old. The results of this study found that the younger students. but it will be assumed that these findings apply to both animals and humans. Vyvyan Howard. Similar findings are yet to be identified in humans. Nearly 50% of students in this study said that they accept organic foods. At the University of Wisconsin at Madison a study among college students was performed to examine their attitudes towards organic food. organically produced food is the best option that we have” (Heaton 2009). There is minimal soil. 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. Harmful chemicals are not used in organic farming. Most students knew organic foods were available in grocery and health food stores. air. and growing. New research.people live. were able to define organic and recognize the official USDA seal. and water pollution. Dr. Animal feeding experiments indicate that animal health and reproductive performance are improved when they are organically fed (Arvaniti 2003). voiced her opinion on the move towards organic food by the new.
. Data analysis linked students who live a healthy lifestyle with regular consumption of organic foods (Dahm 2009).
and were given access to open pasture the carnitas became the most popular meat selected. When starting a new business there are two roles an individual might play.1 billion. It is critical to acquiring funds and for charting a successful course of action (San Diego Public Library 2005). 57 percent of restaurants with per person checks of $25 or more now offer organic items on their menus. despite an increase in price. ate a vegetarian diet. successful
. and it now operates more than 700 restaurants around the country and expects to open an additional 130 to 140 before the year-end. The first is that of a franchisee. an individual who buys into an already successful company and builds his business off their already established. according to the National Restaurant Association. Its stock price has more than doubled since January 2006.Organic Food in Restaurants Chefs are also joining the organic craze by embracing the flavorful quality and incorporating organic foods into their restaurant menus. but once they began serving carnitas from pigs that received no antibiotics. Since receiving an ecofriendly makeover." And.
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. Chipotle carnitas were once the least popular meat at the restaurant. 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. Chipotle's revenues have grown tenfold to reach $1. Organic food availability in restaurants is expected to increase dramatically over the coming years (McIver 2004). Food & Wine magazine's Chef's Survey found that 76 percent of the chefs surveyed said that they "actively seek out organically grown ingredients.
The executive summary answers the questions who. but it is not enough to run a business with (Berry 2004). The mission statement defines in a sentence or a paragraph an entity's reason for existence. the records to back up statements made in the previous first three sections (Pinson 2001). a summary description of the business followed by administrative information. The business description follows.” (Pinson 2001) A business plan includes a summary. It is not written until the business plan is completed as it is a summary that reflects the contents of the finished plan. a conceptual dream. financial documents. how. it anticipates and provides answers to critical questions regarding the
. a discussion of all components contributing to the market strategy. market analysis. why. mission statement. The business plan typically starts with a mission statement. the quantitative interpretation of everything stated in the preceding sections. It embodies the company’s philosophies. “A good mission statement should accurately explain why your organization exists and what it hopes to achieve in the future” (Radtke 1998: 1). and transforms that vision into a working reality through the development of a unique business plan (Buzza 2009). the thesis statement of the business plan. an independent business owner who takes an idea.business plan. and supporting documents. when. it tells if there is a business worth pursuing. “every business will benefit from the preparation of a carefully written business plan. Regardless of the chosen role. what. keys to success. and how much. A startup plan is good for deciding whether or not to proceed with an idea. ambitions and moral. 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 plan begins with an executive summary. where. A business plan is composed of four parts: the organizational plan. the marketing plan. and break-even analysis. goals. The second role is that of an entrepreneur.
Guth in Business Policy.G. Opportunities are future factors that allow the organization to improve its relative competitive position. It can be applied to the corporate level. and promotions . The SWOT framework was first described in the 1960’s by Edmund P. and Cases. The three phases of the SWOT analysis are detect. and total net worth. Weaknesses are potential limitations and defects in an organization and/or weak factors relative to direct competitors. The financial plan provides a detailed financial plan for profit and loss forecasts. price. weakness. and implement/monitor the strategy (Clauson. and Threats. opportunity. marketing. SWOT stands for Strengths.business. place. while threats can reduce its competitive position. liabilities. Strengths are those potential factors that make a firm more competitive than its direct competitors.product.and applies them to the development of a strength.
SWOT Analysis The SWOT analysis is a simple framework for generating strategic alternatives from the analysis of a business situation. Opportunities. Weaknesses. The balance sheet should include your company’s total assets. C. J. determine. 2001). The total assets should be equivalent to the total liabilities plus total net worth. and will forecast at least 24 months into the future. Roland Christiansen. as well as the level of individual business units. Learned. and also provides an analysis of the target customer. product/service. Text. Kenneth Andrews and William D. The marketing plan describes what kind of product the company will provide and explains how the product is different from that of the competition. A summary of key ratios is also used to measure financial benchmarks of success (San Diego Public Library 2005). and threat analysis. A comprehensive plan looks at four essential marketing tools . Kenneth Andrews went on to further discuss the topic in 1971 with his book The Concept
provides an organization with a catalyst that stimulates positive activity.of Corporate Strategy. J. increases the likelihood of achieving goals.
. The General Electric Growth Council used this form of analysis in the 1980's. facilitates organizational change. A SWOT analysis identifies and addresses strategic issues.G. and improves a company’s competitive position (Clauson. 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.
The process of creating this business plan will require broad. Data must be collected to develop the marketing plan and financial documents. comprehensive research on the public opinion towards organic food. suppliers of organic food. Every business plan is built from the same basic structure: an executive summary. To begin the business plan the offered products/services of the business must be described.Chapter 3
Procedures for data collection To determine if a new organic restaurant can successfully generate profitable revenue in San Luis Obispo. and on competing businesses within the restaurant industry. startup and operation costs. population demographics within San Luis Obispo. Foodsupplier. To determine what dishes can be offered to customers. organizational plan. marketing plan.
. Restaurant managers of San Luis Obispo will also be interviewed to identify additional possible sources of organic food and ingredients. and supporting documents. local organic farms represent other potential food suppliers.com provides a state by state directory of both broad line and specialty food distributors. For a restaurant this would involve a description of the available cuisine. will need to be contacted about what ingredients they can provide and at what prices. a business plan must be created. financial documents. preferably those located in the Central Coast area of California.
The desired size for this restaurant is between. 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. furniture. bank loans) must be determined. Contractors available for remodeling and restoration in San Luis Obispo include Beem Peterson Gen Contractors. labor. These include a section on startup costs and operation costs.net has a huge selection of supplies and equipment. PP&E (plant. preparation. renovation. Information on these costs will be needed to calculate the total cost of the first year of operation. If the property requires renovation.400 to 1. websites like showcase. initial inventory.g. property. 1. small business loan. A strategic and competitive analysis will give an assessment of the strengths and weaknesses of current and potential local competitors. and will come from many sources. Labor costs will be set according to minimum wage laws. as well as per capita income and household income distribution.The financial documents are the quantitative parts of the business plan. and storage. The majority of this information can be found on websites selling the products that will be needed for start-up. and total rent per year. supplies. advertising. and any other similar costs (e. It must be determined if all employees are paid hourly. as well as links to other websites that can provide furniture for food service businesses.com contain listings of commercial real estate for rent in San Luis Obispo. and 40% is used for cooking. An SBA 7(a). Approximately 60% of this space is used for dining. or if any receive a salary. To produce a concrete marketing plan. Restaurantequipment. industry standards. To find a rental space for the business.
. and norms for the location. and give the rent per square foot. The cost of rent. Census data will provide accurate details of the population demographics within San Luis Obispo.800 square feet. and Pacific Builders. and equipment). marketing. Pro Builders. will pay for the majority of startup costs. the population must be researched.
weaknesses. securities. The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. and business information. Additional information on Evos can be found via the LexisNexis database. Internal factors are commonly the strengths and weaknesses. The absence of certain strengths may be viewed as a weakness. To get an idea of its strengths a business could ask itself many questions: what advantages does the company have.
Procedures for data analysis: Analysis of the collected data will be both qualitative and quantitative. legal. opportunities." It provides a vast amount of information including SIC codes. what does the company do better than anyone else. while external factors are opportunities and threats. Changes in the external environment also may present threats to the firm. LexisNexis describes itself as the "world’s largest collection of public records. forms. A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. and the number of employees. up to 7 years of sales/net income. news. Data on these competitors can be obtained via their websites. A SWOT analysis will be developed from the competitive analysis and market data to identify the strengths. and possibly from interviewing managers and owners if they are willing. what unique resources does the company
.which have been identified as Natural Café and Evos. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats to the business. unpublished opinions. The external environmental analysis may reveal certain new opportunities for profit and growth. Most businesses use the same basic questions during a SWOT analysis. and threats facing the restaurant.
SWOT is stage 2. and 1. or QSPM. evolving technology. unimportant. A 4 means the response is superior. while at the same time overcoming threats and weaknesses (Slezak 2009b). Threats can be determined by a company making itself aware of obstacles. or what do people in the market see as the strengths of the company. and cash flow problems (Slezak 2009a). the competition’s strategy. strategies are formulated within a SWOT matrix that take advantage of strengths and available opportunities. and 1 means below average. the final step of the competitive analysis will be to create a Quantitative Strategic Planning Matrix. Rank measures how well the company is currently responding to the factor on a scale of 1 to 4. To identify weaknesses a business looks at what could be improved. 2 means the response is average. The sum of all weights must equal 1. very important. It is an approach taken to compare feasible
. Opportunities are usually identified by examining interesting trends in the market or by listing competitive advantages. After analyzing the SWOT data. The QSPM is referred to as a stage 3 management tool. a rank and weight is assigned to each factor. Weights are assigned values between 0. 3 means above average.have access to. Figure 3-1: SWOT template
Strengths Opportunities Weaknesses
Following the completion of the SWOT matrix. and what should be avoided. Using the factors discussed in the SWOT analysis. The weight indicates the importance of that factor in achieving success in the industry.
This study will take the form of a financial analysis. 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. to determine if the restaurant will be able to earn and maintain a profit.” Upon completion of the QSPM the alternative with the greater sum total score will be the action taken by the company (Slezak 2009b).alternative actions/strategies. It
. 3 is probably acceptable. Finally. The attractiveness of each strategy is computed by determining the cumulative impact of each external and internal factor. 1 is not acceptable. 2 is possibly acceptable. a profitability study will be performed. A score of 0 means a factor has no effect. It scores how acceptable a factor is for the strategic alternative being examined. and 4 is most acceptable. Figure 3-2: Quantitative Strategic Planning Matrix template
Key Factors Wei ght Ra nk Total Score (Wei ght x Ra nk)
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
In a QSPM the rank is different from that of the SWOT analysis.
The balance sheet is a projection of assets. ax+by+cz = total sales. Sales forecasts will be created to help determine profit/loss per month and per year. The breakeven point is the point at which a company's expenses exactly match the sales or service volume. It shows cash inflow and outflow over a period of time and is typically used for internal planning. b. and z are representative of total units sold. and equities of the company at the end of the fiscal year. balance sheet. these values will be placed into a mathematical formula. drinks. y. the income statement will provide an estimate of net income. The data collected for start-up costs will be represented in the first year of these statements. 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. statement of cash flows. pre-bottled beverages) based on competitor prices. Revenue and expense figures are drawn from the three-year income projection.
Assumptions The assumption made in this business plan is that organic food.e. and c are representative of the unit values previously mentioned and x.requires a sales forecast. Cash flow statements show both how much and when cash must flow in and out of the business. ingredients. To produce the forecasts an estimated unit value will be applied to meals. and other items (i. liabilities. and a breakeven analysis to determine if the restaurant is indeed profitable. can be easily obtained by the restaurant through distributors and suppliers.
. The income statement shows projections for the restaurant over the next three years. where a. and must follow the formula A=L+E (Assets=Liabilities+Equity). The statement of cash flows projects what the business plan means in terms of dollars. income statement.
Limitations The limitation of the business plan is that the estimated revenues. costs. Also. CA. and sales may not be accurate. With limited time and resources it is not possible to be certain these values are correct. 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.
Every meal is to be freshly prepared for customers. United Natural Foods Inc. was created.com. The key information of this business plan is summarized in this chapter. All equipment costs are from websites that include ablekitchen. can be found in the appendix
Summary The Restaurant Joobilance is going to be a new healthy. and a buyer’s catalog for the distributor. New Frontiers Marketplace. meeting the individual dietary needs and preferences of each one. and bestbuy. To determine the answer to this problem statement a business plan for a hypothetical organic restaurant. 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.com.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 figures used in the financial section were based off of food prices from the Cal Poly Organic Farm. Joobilance. Data used in the strategic analysis was collected by researching local restaurants via their websites. organic restaurant chain inspired by the increasing health conscious attitudes of Americans. as well as the business plan. This data.com. The location offers a relaxing atmosphere
Since it is located in a small college community. also providing the option of takeout. 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. but also that of the environment.” using sustainable. The restaurant will be established as a sole proprietorship initially by Jesse Godsey. even using products of California Polytechnic State’s organic farm. Joobilance will make use of alternate energy to run operations and decrease the location’s carbon footprint. pollution and environmental degradation. and reducing waste. strong community ties and support are important to Joobilance. The building will be LEED certified. and even catering for special events. and are not limited to wind and solar energy.
. The restaurant not only cares about its customer’s health. healthy. Green buildings are designed to reduce the overall impact of the built environment on human health and the natural environment by: efficiently using energy. Investors will be sought out when expansion becomes the desired goal. resource efficient models of renovation and operation. Alternate energy sources include. delicious dining experience from environmentally sustainable locations. protecting occupant health and improving employee productivity. commonly known as “green.for customers to enjoy their meal.
The Mission The mission of Joobilance is to provide a unique. water. The majority of food to be used will come from local suppliers along the central coast. To help finance the startup of this restaurant an SBA 7(a) loan will be needed. and other resources. delivery.
Management Summary Joobilance will be starting as a small business. Annual salaries will be paid to an accountant and the owner. The founder will act as an overall manager. $38. and chefs. the first location was chosen to be 728 Marsh Street in San Luis Obispo. the customers during the owner’s absence.
. All other employees will be compensated using hourly rates for their specific job function. 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. This retail lot is 1. line cooks. Assistant managers may be needed eventually to handle personnel.825 square feet and is available for rent at $21 per square foot per year. so employee costs will be kept to a minimum. downtown San Luis Obispo. 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. bussers. Department of Labor 2010). and more importantly. The location’s potential lies in the fact it is a heavily trafficked area. Positions to be filled include cashiers. An accountant and marketing team will be hired and work separate from other restaurant employees. most day to day finances. approving all hires and financial decisions.325 per year.showcase.com to view available property in the Central Coast. dishwashers/kitchen aid. a location that gives the restaurant a strong chance for success.Location After using www.
400.00 5. and perishable foods.366.33 220.67
To account for hourly employee raises and taxes an extra $1.000.000.00 2.00 18.00 2.00 5.00 50. organic and specialty foods in the United States….00
44.000. United Natural Foods. and proteins.
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 3.000.67 8.400.33 62.083.00 61.000.400.400.00 4.000.583. a local organic grocery store provided guidance to the organic food distributor UNFI.500.00 3.33 30.00 3.
43.67 52.000.00 12.166.000.00 10.666. provides freshly cooked meals and blended smoothies from organic ingredients.333.00 Salary 60.000.116.000.67 33. Joobilance. as previously mentioned.000. and the environment are what make this restaurant stand out among its competitors.00 230.400.366.166. and the Cal Poly Organic Farm provides Joobilance with every ingredient from herbs and spices to fruit. the atmosphere.00 3. “UNFI is the leading independent national distributor of natural.200. vegetables.00 4.” This distributor.00 241. frozen.00 20.00 28.750.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. The manager of New Frontiers Marketplace.200.00 2.67
Owner/founder Cashiers/Bussers (3) Line/Prep Cooks (2) Chefs (2) Accountant Total Payroll
42.00 50.00 5.283.00 4.
Products and Services The combination of organic products.33 51.00 4.000 will be added to payroll for each position’s yearly payroll budget total. The product selection includes a broad array of natural and organic groceries.750.000.500.00 19.400. Inc.000.00 3. the New Frontiers Marketplace.333.
000 students.” Accompanying this change.000 and Cuesta had just over 11. This demographic will be very important in achieving success as there is more disposable income available when compared to the college students. The combined age groups of adults (25 to 34. the quality of food on which income is spent rises. There are currently two institutions of higher learning in San Luis Obispo: California Polytechnic State University and Cuesta Community College. As of Fall 2007 the enrollment at CPSU was near 20. 35 to 44.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. the proportion of income spent on food falls. and 45 to 54) working in the San Luis Obispo area makes up 33% of the population. an even larger proportion than the college age group. even if actual expenditure on food rises. “As income rises. Engel’s Law states. The primary focus
. this is typically where the move to organic food takes place because the bundle of characteristics with which the customer is concerned increases.
. People can come and not only enjoy a great meal. at Joobilance all employees are experienced with customer service and share a passion for the food they are serving. a salad. The strengths of this restaurant come from a combination of the menu and the building itself. 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. and a healthy place to live or work. A branded image will also be designed to provide instant recognition of the business. inviting feel. By offering a variety of cuisines Joobilance can appeal to multiple tastes and bring in more customers. profitable. or pasta they will be able to choose from a selection that leaves him/her satisfied. In fact.of marketing for the restaurant is the growing health conscious group of Americans within these age demographics. but the nutritional value of these items is as well. weaknesses. Not only is the variety of the menu a notable strength. This quality service provides an enjoyable experience for any customer and will keep them coming back. commonly referred to as “green.” LEED certification provides independent. opportunities. it is believed to be the reason people will come to the restaurant. The building itself has been designed to provide a comfortable. Whether someone is looking for a burrito. Also. A key to the success of any business is the quality of service provided. but a great atmosphere as well. a fact that all individuals can appreciate is that the building is LEED certified. and threats of the organic restaurant are listed below along with their weighted impact on the mission.
SWOT analysis The strengths. third-party verification that a building project is environmentally responsible.
As a new business. These will likely only be weaknesses. The restaurant will build this buzz by marketing through social media. if this can be considered reasonable by consumers than this weakness can be overcome.24 13% 0.52 5% 0.36 10% 0.28 8% 0.Table 4-2: SWOT Analysis .18 7% 0. Joobilance must also overcome its initial startup debt and limited supply of funds.Strengths
Rating 3 3 4 3 4 3 3 2. but the key to achieving this lies in the marketing of the restaurant. A new business must initially build a public buzz and make a good amount of positive information available.00%
.15 6% 0.5556 Strengths: multiple cuisines/variety inviting appearance branded image quality service nutritional value meet special needs/diets green building Wgt Wgt Score 5% 0. Table 4-3: SWOT Analysis . flyers posted around San Luis Obispo. unknown business and that organic food can be quite expensive when compared to its conventional counterpart.72 14% 0.2 8% 0. and other public ads. These weaknesses can be overcome.18 50.00%
The weaknesses of this business rest in the facts that this is a brand new. The higher price of organic food is associated with its increased nutritional value.15 6% 0.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. obstacles to success.08 50. during the first year of operations.
There are also many demographics that exist within these groups. CA that can make Joobilance a successful restaurant. the most important being the student population of California Polytechnic State University and Cuesta Community College. both pedestrian and vehicular. area is an opportunity within itself. Table 4-4: SWOT Analysis .Figure 4-2: SWOT Analysis – Strengths & Weaknesses
Various opportunities exist within San Luis Obispo. which continues to grow as a result of obesity statistics and television shows. The building’s location in a high traffic.Opportunities
. Individuals who are not members of the sought after age demographics may provide business out of simple curiosity and walk-ins. The numerous age groups supply a variety of potential clientele. The largest opportunity for success lies in the growing health conscious attitude of Americans. as it will give the business constant public exposure. such as The Biggest Loser.
4 5% 0.48 0.14 0.4 Threats: many local restaurants current economy industry high turnover rate EVOS/natural café wgt 16% 13% 7% 14% 50.18 9% 0.56
Figure 4-3: SWOT Analysis – Opportunities & Threats
. The main competitors to Joobilance out of all San Luis
Obispo restaurants are EVOS and natural café.5
wgt wgt score 7% 0.Threats
rating 3 3 2 4 2. Jooiblance must work to differentiate itself from these restaurants in order to become a thriving business.00%
While there are only a few threats to the success of Joobilance.21 15% 0. they must all be handled strategically or this business could fail. especially when it comes to restaurants.3 0.24 6% 0.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 2.00% wgt score 0.36 50. San Luis Obispo is populated by many small businesses. Table 4-5: SWOT Analysis .15 8% 0. Both restaurants are health oriented and serve food created from similar ingredients.
After analyzing the SWOT data the next step is to create a SWOT matrix. The following strategies were formulated to take advantage of the restaurant’s strengths and available opportunities. Figure 4-4: SWOT Matrix
. while at the same time overcoming threats and weaknesses.
Table 4-6: QSPM
.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.
24 0 0.64 0.12 0.27
3 3 0 4 0 3
0.28 3.16 0.28 4.56 1
.15 0.4 0 0.33 0 3 3 4 4 3 0 0.3 0 0.32 0.32 0.48 0.046961
4 2 0 2 < <
16% 12% 10% 8%
3 4 0 4
0.12 0 0
7% 10% 5% 8% 6% 9%
2 3 0 1 0 3
0.11 0.28 0.08 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 0.64 0.48 0.09
16% 10% 7% 14%
1 4 0 2
0.32 0 0.27
3 1 3 2 2 1
0.68 1.14 0.28 0.15 0.21 0.58 1.48 0 0.28 3.1 0 0.18 0.42 0.16 0.18 0.33 0 0 3 3 4 1 4 0 0.1 0.42 0.32
4 2 0 2
3 1 0 2 > >
3 1 0 0
0.16 0.48 0.2 0 0.3 0 0.
Using the tabulated data above. and T3. S1. and salads. EVOS does not handle them as well as Natural Café and Joobilance. EVOS is a “healthy and environmentally sound fast food chain” located on South Higuera in San Luis Obispo. "The Natural Café is focused on using fresh. T4. EVOS’ short coming is the lack of variety and creativity in the menu. O6.” but the restaurant itself only recycles to make an impact. The three competitors share
. The variety of food offered by Joobilance is considered one of its top strengths. the goal Joobilance will be focused on is overcoming competitors in the market. San Luis Obispo has many restaurants competing for success. The same opportunities exist for all restaurants. the restaurant is somewhat similar to Joobilance from a decorative interior to sustainable daily practices. 2. All three of these restaurants face the same threats . We're committed to providing a good value for your health and your budget. EVOS and Natural Café have a slight advantage as they are not affected by W1. to give customers a significantly different and more enjoyable experience. Joobilance’s location. and 4 because they have already been operating and possess multiple locations. and its menu give it the competitive advantage in this situation. The website for Natural Café does make some quality suggestions for how to “live green. We will depend on the restaurant’s atmosphere and service. regional ingredients to create healthy and delicious food. Regarding its presentation. only offering a small choice of burgers. but the direct competition for Joobilance comes from EVOS and Natural Café. Joobilance is also making more of an effort to live sustainably. S2/S4. wraps. S6. However. across both California and the country. T1. T2. but EVOS and Natural Café only capitalize on O2.T1." Joobilance overcomes this competitor in a somewhat opposite manner as the menu of Natural Café is similar. While taking a similar stance on health and providing customers with organic ingredients.
42 3 0.14 2 0.21 3 0.05 3.15 1 0.12 3 0.21 6% 3 0.2 3 0.24 3 0. The weighted scores of the identified strengths and weaknesses are very close.28 15% 4 0.3 3 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 0.09
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 0.12 2.03.05 5% 3 0.48 1 0.14 6% 3 0.1 100% 3. A closer look was taken at these competitors.72 2 0.52 10% 2 0.06 Nautral Café Rating Weighted Score 3 0.32 7% 4 0.08 4 0.6 4 0.24 2 0.S2.36 1 0.36 14% 3 0.39 4 0.15 3.15 2 0.09 8% 3 0.76 Nautral Café Rating Weighted Score 2 0.28 3 0.06 5% 3 0.52 3 0.3 . a difference of 0.24 2 0. however.
. at Joobilance the effort is made to go above and beyond what other restaurants in San Luis Obispo can offer.05 100% 3.21 3 0.31 2.36 2 0.16 7% 2 0.42 4 0.18 1 0.24 3 0.18 1 0. analyzing them with Joobilance’s SWOT charts.24 3 0.21 2 0.18 6% 3 0.36 4 0.16 14% 4 0.56 4 0. making it a top competitor for any restaurant in the area.6 3 0.24 8% 1 0. and 5.39 2 0.4.26 9% 4 0.21 4 0.16 3 0.48 3 0.6 13% 3 0.14 7% 3 0.56 2 0.52 4 0.42 13% 4 0.06
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 3 0.3 8% 3 0.18 3 0.18 3 0.15 1 0.
00 9.00 4.00 1. paper rolls.00 550.089.00 2.0 Speaker System LG . like any other business.00
. etc. The financial analysis determined whether or not the restaurant would become a profitable investment by its third year of operations.325.00 6.00 1.The weighted scores of Joobilance’s opportunities and threats is much greater than Natural Café and imply that Joobilance can overcome the competition.00 11.000.595. The startup funding table details all costs associated with opening the restaurant and its first month of operations.00 38.00 200.387.)
52. Table 4-9: Startup Funding Startup assets Cash and cash equivalents Leasehold improvements Equipment Fixtures 24V Sunwize wind turbine Mirage .256.500.930.00 734. uniforms.500.822.000. was to turn a profit.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.748.00
2.00 230.00 3.050.00 60.276.00 2.00 5.00 130.
Financial Analysis The main goal.Nanosat 5.00 750.500.
75.00 75.00 94.00 2.e.00 150.00 $120.000.000.000. napkins.00 $140.613.000.00
75. silverware.000.00 25. etc.00 $40.00
$160.Pre-opening Labor-staff/Mgmt/Trainers Customer needs (i.00 94.000.350.00 $100.00 225.00
150.000.000.00 225.000.000.00 $80.00 $0.387.00 $60.00 1.000.000.00
130.00 $20.00 150.343.000.000.000.000.) 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
4.00 Assets Expenses Loan Investment
the statement of cash flows shows that the business will only experience minor cash inflow at the end of
.501 $79.050 $26.775 $11 $4 $5 Year 1 $269.388 $338.The various categories of startup costs associated with this business are shown by the above figure.676
*Please see appendix for the detailed thirty-six month forecast Figure 4-6: Sales Forecast
$600.591 19.182 $32. The restaurant’s sales forecast predicted an increase in sales each month equal to 3% of its first month sales for three years.433 Year 2 32.013 5. Unit sales Meals Drinks Other Total Sales Unit prices Meals Drinks Other Meals Drinks Other Total Sales Year 1 24.000 $300.000 $100. While the restaurant began generating positive income in its second year of operations.233 4. Table 4-10: Sales forecast 3% monthly increase in sales
.025 16.993 $547.599 65.000 $500.375 $11 $4 $5 Year 2 $352.465 12.985 $11 $4 $5 Year 3 $435.115 $48.338 53.000
$400.796 6. Table 4-9 provides the resulting sales totals.000 $0
Using the data generated by the sales forecast an income statement was developed for the first three years.013 Year 3 39.688 $443.275 $64.000 $200.930 $20.078 40.
00 0.493.073.501 $79.000.940 409.00 4.00 24.312.00
Year 2 $352.300. 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 269.00 6.00 0.00 241.00 8.90 320. The balance sheet that follows is a projection of assets.676 $137.00 6.993 $547.400.736.940
Year 3 $435.433.343.00 4.325.00 38.000.325.00 113.00 1.00 3.556.325.068.00 4.688 $443.00 230.00 0.00 89.914.400.00 1.00 38.172.575.500.00 5.00 12.500.500.00) $0.year three. liabilities.500.00 24.00 220.300.388.00
224.304.00 38.00 $0.00 3.050 $26.914.940.00 4.000.182 $32.00 24.00 1.000.914. and verifies the statement of cash flows with the proof that assets = liabilities + equity.00 0.00 0.901.000.343.013 125.00 338.00 (91.90 3.930.000.00 20.00 317.115.275 $64.343.00 48.400.00 6.00 4. and equities of the company at the end of each fiscal year.00 3.90 316.00 313.00
0.00 0.000.000.00 12.468.Table 4-12:Cash flows Year 1 Year 2 Year 3 (91.00 75.674.00) 150.00)
(78.00 3.00) 1.915.00) 1.242.518.104.22.1688.205.575.00) 46.894.00 10.00 0.00 75.00 75.00 81.595.00 0.220.889.00 75.000.00 3.00 (1.000.595.00 89.00
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 41.595.915.00 66.383.00) 3.915.00 2.00 (41.242.085.00 (91.582.00 0.00
.000.312.00) (9.901.00) (49.000.00 4.000.00 9.000.00) 2.901.00) (87.00 81.00
Cash Prepaid expenses Inventory Fixed Assets Total Assets Loan Payable Capital Stock Retained earnings Total Liabilities and Equity
0.00 70.00 87.00 2.00 (41.00 87.000.595.795.242.843.00 3.00) 41.00 74.220.220.00) (49.000.000.843.556.00 (2.00 1.00 Year 3 46.00
Table 4-13: Balance Sheet Year 1 Year 2 1.00 (43.00)
000.00 11. the breakeven analysis calculates the point is the point at which the company's expenses exactly match the sales or service volume. those directly associated with sales volume.820.000.000.36 19.00 4.081 48.500.200.Finally.100. These numbers are used to determine the direct and indirect costs per unit.15 $4.029.00 4.616. which allow the number of units to cover these costs to be calculated.135
.00 24.00 377. 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. those that remain the same over the range of sales.00 114. Costs are split into the categories of direct costs.975. and indirect costs.00 72. the breakeven point.00 409.0 0 283. The sum of these units is the breakeven point.744.014 160.0 0
96.041 16.70 Direct Costs Operating expenses Perishable inventory Direct labor
4.21 $8.00 14.000.
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.
. but break even by the end of its third year of operations.
Joobilance. and provided by grocery stores and food distributors. CONCLUSIONS. It is very helpful in getting the business started and
. the hypothesis was not supported as Joobilance failed to break even by the third year of operations. California to the hypothetical restaurant. Following the SWOT analysis a competitive analysis compared all the local competition in San Luis Obispo. All costs associated with running the restaurant are accurate according to prices listed on websites. The location for the restaurant was selected from property listings on showcase. By satisfying all the objectives. AND RECOMMENDATIONS
Summary The author created a bare bones business plan. which was further examined by a Quantitative Strategic Planning Matrix. many details used were real. and to perform a breakeven analysis. Lastly. and included a thorough SWOT analysis. While the plan was hypothetical. such as restaurantequipment. balance sheet.Chapter 5
SUMMARY.com. statement of cash flows. 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. as well as a financial analysis that investigated three years of business operations.
Conclusions After looking back on all the research done it seems as though the business plan is essential to running a successful business.com.
The problem statement was to determine if it is feasible to open an organic restaurant in San Luis Obispo. After looking at the financials it appears that at this time it is not feasible to open an organic restaurant.
. For anyone interested in expanding. 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. A financial analysis can show what a business owner can expect to gain or lose. the financial analysis at the end of the project is still the most important factor in opening up any business. The time constraint experienced could be seen as a major limitation of the study. 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. Joobilance will see a strong increase in sales during its second and third years of operation. but this would require some changes in the methodology. According to the financial forecast.helping find the potential customer base. research on this topic I recommend taking the 2010 sales of organic food into consideration. non-organic food. but will still fail to break even by the end of year three. or continuing. as well as a much more detailed look into the growing consumer market for organic food.
Recommendations After completing this study I believe that an organic restaurant this day and age would be a great business move for anyone interested. and different fixed assets could be obtained. However. However. The planning phase would require a much more in depth look into the financial analysis: different distributors and suppliers could be found. payroll can be altered. It is entirely possible to have a successful restaurant by the end of its third year of operations. alternative funding could be utilized.
" American Journal of Business Education.17 Aug 2009. Tim J." International Journal of Food Sciences and Nutrition. 2008. Chambers." Journal of Food Science 71. Leahy. CT: Praeger Publishers. Fotini.. Inc.5 Athens. Berry. "Spreading the Organic Word.References Cited Arvaniti. 2004. Tim J. Shows. "Organic food: nutritious food or food for thought? A review of the evidence. "Organic Foods.com/2005/12-27/health-benefits-organicfood-article. and Joseph B. Dennis K." Organic Food News Quarterly 27 Dec 2005 Web. 54. Winter. Molly J. Hurdle: The Book on Business Planning. Texas: (2009). Eugene: Palo Alto Software.7 Littleton: (2009). 2008. Heaton. Dahm. Davis. Westport. Food and Natural Resources.htm Knudson. William A. Canada: Entreneur Media Inc. Buzza. Sarah F. and Carl K. The Plan as You Go Business Plan. Berry. http://www. Faidon Magkos.9 Chicago.
. Shane. Kate. and Antonis Zampelas." Business Innovation in Agriculture. Mosca. The Entrepreneur's Guide to Writing Business Plans and Proposals. John. "The Naturals. Michigan State University: 2007.. "The Organic Food Market. Greece: (2003). Samonte.3 Beaumont." Restaurants & Institutions 16 Jul 2006: 1 Mar 2010. and Amy R. Aurelia V.. "Create The Plan. "Organic Foods: Do Eco-Friendly Attitudes Predict Eco-Friendly Behaviors?. 2. 58.grinningplanet. Work The Plan: A Look At Why The Independent Business Owner Has Trouble Calling A Franchisee A True Entrepreneur." Journal of American College Health. Illinois: (2006).
CA: 2009. San Luis Obispo. "Successful Business Plans. Slezak. 2001. Radtke.” Better Nutrition Feb 2004: 28 Mar 2010. 1 Mar 2010. San Luis Obispo. Agribusiness Strategy Formulation. California Polytechnic State University." San Diego Public Library.sandiego.gov/public-library/pdf/tidelinebusplan0705. How to Write a Mission Statement. California Polytechnic State University. Steven E. CA: 2009.pdf>.McIver. “Organic Food Consumption on the Rise. Dearborn Trade Publishing. <http://www. Heather. Steven E. Anatomy of a Business Plan. SWOT Spreadsheet.
. An Introduction to the Dynamic Strategic Planning Process. Web. 1998. Slezak. Linda. Janel M. Pinson. Agribusiness Strategy Formulation. 2005. The Grantmanship Center.
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
will be responsible for our personnel.
2. Start-up funds:
Startup Funding Startup assets Cash and cash equivalents Leasehold improvements
52. I will be split between building customer relationships and spending time in the kitchen. An accountant will focus on the control and handling of financial issues while the owner. 2.and entertaining. myself. 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.00
.00 4.1 Company ownership The restaurant will be established as a sole proprietorship initially.2 Start-up summary Joobilance is a sole proprietorship. While working in the restaurant. Investors will be sought out when expansion becomes the desired goal. To help finance the start-up of this restaurant I plan on a $150.000 SBA 7(a) loan at an interest rate of 8% and funding the remainder of start-up needs with my personal savings.089.000.
00 734.00 550.00 6.000.276.000.00 200.00 1.00
.000.00 75. china.930. napkins.000.00
150.350.00 130.387.613.500.00 1.) 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
60.00 9.748.00 25.0 Speaker System LG .343.55" / 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.00
2.256.00 94.00 225.00 1.00 4.000.613.Nanosat 5.00 2.00 230.00 2.500.00
130. uniforms.00 94. etc.000.050. silverware.822.e.00 150. paper rolls.) Pre-opening Labor-staff/Mgmt/Trainers Customer needs (i.00 38.00 3.325.595.00 750.00
75.387.00 5.000.00 2.500.Equipment Fixtures 24V Sunwize wind turbine Mirage . etc.00 11.000.
ensuring a safer world for our future generations to live in. a local organic grocery store provided guidance to the organic food distributor UNFI. Organic produce will contain 10-50% higher phytonutrients than conventional produce. organic foods are also contributing to the health of the environment in which we live. MSG. and hydrogenated fat. and others. at levels higher than those being found in and on organic produce.” This distributor. Besides our own personal health. air. frozen.000. There is minimal soil. as previously mentioned. providing higher nutrient levels. the New Frontiers Marketplace.
. and nervous systems. Phytonutrients. and proteins. Most pesticide residue safety levels are set for individual pesticides.00 225. The product selection includes a broad array of natural and organic groceries. and water pollution. but it may be the safest. plant compounds thought to have health-protecting attributes such as antioxidant.Startup funds: Total capital Total liabilities Total funds 3.1 Organic Joobilance. and perishable foods. food monitoring programs are constantly showing that nearly one in three non-organic food samples tested contain a variety of pesticide residues. immune boosting. are also higher in organic produce. Inc. The manager of New Frontiers Marketplace. and the environment are what make this restaurant stand out among its competitors.000. lower pesticide residues. Consuming organic foods is not the only way to increase nutrient consumption. provides freshly cooked meals and blended smoothies from organic ingredients. 3. United Natural Foods. the atmosphere. 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. but most fresh produce can carry multiple pesticides that can have negative impacts on the reproductive.0_Products and Services:
75. and the absence of food additives. There are many benefits to eating organic: higher nutrient levels. organic and specialty foods in the United States….00
The combination of organic products. colorings and flavorings. such as artificial sweeteners. 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. immune. and the Cal Poly Organic Farm provides Joobilance with every ingredient from herbs and spices to fruit. It is reported that pesticide residues in conventional foods are known to be safe and within acceptable health limits.00 150. vegetables.000. However. organic has more dry matter on a pound-for-pound basis. Harmful chemicals are not used in organic farming. When compared to conventional food. “UNFI is the leading independent national distributor of natural.
one of our goals is to accommodate every customer’s needs. 4. they can enjoy music while watching anything ranging from international sports to movies to the food network. or simply place orders for pick-up and delivery with an estimated wait time and digital receipt provided. 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." 3. Our atmosphere makes Joobilance a place people will want to be even when they are not hungry. For those customers that prefer to sit and dine inside the restaurant. listen to and view the work of featured artists. Vyvyan Howard. 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. and growing. 4. organically produced food is the best option that we have.Dr.0 Market summary As the founder of Joobilance. the population of San Luis Obispo can be broken down as follows: The gender proportion is relatively equal with 1. We will have a fully functional flash website where they may read about the restaurant and what we hope to accomplish. voiced her opinion on the move towards organic food by the new.
The age groups of San Luis Obispo have a much more significant divide:
. a toxico-pathologist at the University of Liverpool. From the simple stance of hazard avoidance.2 Services At Joobilance.1 Market Segmentation Using available census data.06 males per female.
the quality of food on which income is spent rises. 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.” Accompanying this change.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
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. furthering our customer base and increasing revenue. Over the years we are open it is even possible that the growth rates may increase. this is typically where the move to organic food takes place because the bundle of characteristics with which the customer is concerned increases. 35 to 44. 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.000 and Cuesta had just over 11. or decrease. This demographic will be very important in achieving success as there is more disposable income available when compared to the college students. There are currently two institutions of higher learning in San Luis Obispo: California Polytechnic State University and Cuesta Community College. The combined age groups of adults (25 to 34. Engel’s Law states.
. an even larger proportion than the college age group. for certain age groups. “As income rises. The taste of the food and atmosphere is meant to appeal to this younger demographic. As of Fall 2007 the enrollment at CPSU was near 20. High school students of the area (15 to 19 years) will also be indirectly marketed to by these same elements. the proportion of income spent on food falls.000 students. and 45 to 54) working in the San Luis Obispo area makes up 33% of the population. even if actual expenditure on food rises. However.
Currently in San Luis Obispo the median household income is nearly $50. By combining our care.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.340 45 to 54 years 1. and the quality of our food. these groups can be satisfied. people on diets. “foodies.” etc.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%. willingness to cater to special dietary needs.370 35 to 44 years 1. The large unemployment rate of California may interfere with a willingness to dine out.00% 8.00% 7. but for the economy.
The trend in the unemployment graph shows a spike just before April 2009 and it appears to be declining.000.120 20 to 24 years 3.Initial # of potential Demographic customers 15 to 19 years 1.00% 7. which is not just ideal for the restaurant.00% 6. with an unemployment rate of 8.00% 4.
.400 25 to 34 years 1.00% 12.
weaknesses.15 0.28 0.0641026 0.24 0.5.0897436 0.1666667 0.52 0.28 0.0576923 0.2307692 0.52 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.5556
Wgt 5% 6% 7% 8% 13% 5% 6% 50.18 0.00%
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% 50.18 0.15 0.0576923 0.1_SWOT analysis The strengths.025641 0.1346154 0.72 0.24 0.15
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 2.0769231 0.08
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]
wgt 18% 14% 13% 10% 8% 8% 7% 6% 6% 5%
wgt score 0. opportunities.0480769
.08 0.42 0.2 0.36 0.18 0. Wgt Score 0. and threats of Joobilance are listed below along with their weighted impact on our mission.72 0. 5.00%
Wgt Score 0.2 0.
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 2.36
rating 3 3 2 4 2.4
Threats: many local restaurants current economy industry high turnover rate EVOS/natural café
wgt 16% 13% 7% 14% 50.5
wgt 7% 15% 5% 8% 6% 9% 50.56
.3 0.15 0.00%
wgt score 0.00%
wgt score 0.21 0.15 3.18 0.14 0.S
meet special needs/diets [S]
0634441 0.1178248 0.1812689 0.31
0.14 0.1087613 0.1450151 0.2 SWOT matrix After analyzing our SWOT data the following strategies were formulated to take advantage of our strengths and available opportunities.36 0.1691843 0.39 0.48 0.6 0.0453172
5. while at the same time overcoming threats and our weaknesses.24 0.18 0.0725076 0.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.
.56 0.21 0.0422961 0.0543807 0.15 3.
Weaknesses establish a student following. 5. Joobilance will feature a wide array of food choices in a unique. This will be accomplished through informative health facts featured throughout the restaurant in various places.
. reducing turnover work to make inner appearance more appealing than competitors. company information. and advertise heavily during Cal Poly’s introductory WOW week. our primary focus is the growing health conscious group of Americans. inviting environment. to appeal to them and give them an understanding of the benefits Joobilance offers. the three most appealing were discussed and analyzed using the following Quantitative Strategic Planning Matrix. 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.Strengths interactive website (feature menu. using Cal Poly students
As mentioned earlier. 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. we will distribute coupons. have special offers. 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. To overcome the threats presented by other restaurants in San Luis Obispo. To establish our student following.3 Quantitative Strategic Planning Matrix Various goals were set to make this organic restaurant a success.
64 0.4 0 0.28 4.27
3 3 0 4 0 3
3 1 0 0
0.58 1.08 0 0.16 0.15 0.09
16% 10% 7% 14%
1 4 0 2
0.15 0.3 0 0.27
3 1 3 2 2 1
0.32 0.33 0 0 3 3 4 1 4 0 0.42 0.24
16% 12% 10% 8%
3 4 0 4
0.48 0.28 0.42 0.2 0 0.32 0 0.28 3.64 0.21 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 0.48 0.56 1
.68 1.16 0.11 0.046961
4 2 0 2 < <
0.1 0.28 3.32
4 2 0 2
0.18 0.1 0 0.32 0.16 0.12 0 0
7% 10% 5% 8% 6% 9%
2 3 0 1 0 3
0.14 0.33 0 3 3 4 4 3 0 0.28 0.301104972
3 1 0 2 > >
0.48 0 0.18 0.48 0.24 0 0.3 0 0.12 0.
" Joobilance overcomes this competitor in a somewhat opposite manner as the menu of Natural Café is similar. Regarding its presentation. and its menu give it the competitive advantage in this situation. The website for Natural Café does make some quality suggestions for how to “live green. EVOS and Natural Café have a slight advantage as they are not affected by W1. San Luis Obispo has many restaurants competing for success. S2/S4. Joobilance’s location. The three competitors share S2. S1. T1. and 4 because they have already been operating and possess multiple locations. While taking a similar stance on health and providing customers with organic ingredients. making it a top competitor for any restaurant in the area. T2.Using the tabulated data above. but EVOS and Natural Café only capitalize on O2. However. The competitive analysis produced the following data:
. however. across both California and the country. and 5.” but the restaurant itself only recycles to make an impact. EVOS is a “healthy and environmentally sound fast food chain” located on South Higuera in San Luis Obispo. O6. wraps. The variety of food offered by Joobilance is considered one of its top strengths. We're committed to providing a good value for your health and your budget. at Joobilance the effort is made to go above and beyond what other restaurants in San Luis Obispo can offer.3 .T1.4. to give customers a significantly different and more enjoyable experience. The same opportunities exist for all restaurants. We will depend on the restaurant’s atmosphere and service. regional ingredients to create healthy and delicious food. EVOS does not handle them as well as Natural Café and Joobilance. S6. the goal Joobilance will be focused on is overcoming competitors in the market. A closer look was taken at these competitors. the restaurant is somewhat similar to Joobilance from a decorative interior to sustainable daily practices. 2. "The Natural Café is focused on using fresh. T4. but the direct competition for Joobilance comes from EVOS and Natural Café. All three of these restaurants face the same threats . EVOS’ short coming is the lack of variety and creativity in the menu. and T3. only offering a small choice of burgers. and salads. Joobilance is also making more of an effort to live sustainably. analyzing them with Joobilance’s SWOT charts.
18 1 0.3 3 0.05 5% 3 0.21 2 0.S.05 3.2 3 0.08 4 0. the customers during the owner’s absence.21 3 0.14 7% 3 0.24 8% 1 0.56 4 0.48 3 0. An accountant and marketing team will be hired and work separate from other restaurant employees.18 3 0.42 3 0. bussers.18 5% 3 0.”
. dishwashers/kitchen aid.32 7% 4 0.0 Management summary Joobilance will be starting as a small business.1 100% 3.36 1 0. Positions to be filled include cashiers.6 3 0.18 3 0.39 2 0.24 3 0.24 3 0.24 2 0. and chefs.36 2 0.21 4 0.28 3 0.Joobilance Competitive Profile Matrices Strengths and Weaknesses Joobilance EVOS Weight Rating Weighted Score Rating Weighted Score 18% 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
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
6.06 Nautral Café Rating Weighted Score 2 0.31 2.16 14% 4 0.36 14% 3 0.39 4 0.15 2 0.42 13% 4 0. Annual salaries will be paid to an accountant and the owner.52 4 0.15 1 0.12 3 0.76 Opportunities and Threats Joobilance EVOS Weight Rating Weighted Score Rating Weighted Score 16% 3 0.52 10% 2 0.24 2 0.15 1 0. The founder will act as an overall manager. 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.06 5% 3 0.26 9% 4 0.09 8% 3 0.21 6% 3 0.48 1 0. line cooks.6 13% 3 0.21 3 0.3 8% 3 0. so employee costs will be kept to a minimum.42 4 0.15 3. 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.24 3 0. most day to day finances.72 2 0.36 4 0.05 100% 3.52 3 0. All other employees will be compensated using hourly rates for their specific job function. Department of Labor 2010).56 2 0.16 7% 2 0.18 1 0.14 6% 3 0.28 15% 4 0. and more importantly.14 2 0. Assistant managers may be needed eventually to handle personnel.15 3 0.16 3 0.06 Nautral Café Rating Weighted Score 3 0.6 4 0.12 2. approving all hires and financial decisions.18 6% 3 0.
546.400.83 $29.166.08 4054 March 2485 1243 $4.00 511 $2.589.00 563 $2.33 4317 June 2643 1321 $5.75
$43.292.00 397 $1.839.00 3.235.744.202.25 5543 August 3378 1689 $6.33 3617 $30.50 $29.08 3354 July 2.00 $34.00 519 $2.1_Sales forecast When forecasting sales and financial documents.550.808.58 $34.000. food supply.655.75 5718 $47.25 $45.990.366.447.58 $31. and utilities.013 1006 $4.468.390.00 28.400.803 901 $3.025.025.00 2.00 414 $2.58 4929
$26.083. 7.25 O ctober 2.00 5.00
$48.920.00 546 $2.908 954 $3.00
44.007.500.828.00 292 $1.00 $38.852.33 51.00 4.000.00 230.000.276.250.50
$24.000.25 $42.902.441.333.00 10.583.83 3442 August 2.50 $27.166.50 5455 July 3326 1663 $6.560.33 $36.33 4667 $38.960 980 $3.00 537 $2.00 $32.58 3529 September 2.00 493 $2.939.50 $37.33 September 2800 $30.08 April 2538 1269 $5.00 449 $2.00 589 $2.00 1400 $5.50 $39.445.33 220.870.735. like any other business.00 2.33 3267 June 2.00 50.83 January 3011 1505 $6.464. It is probable that actual costs encountered will be higher than these estimated values.532.00 344 $1.00 4.83 $38.336.858.923.00 388 $1.002.00 $35.375.00 309 $1.197.000.067.470.33 2885 February 1.756.970.126.420. loan payments.00 4.280.071.075.245.602.00 5.715.00 $19.08 $35.502.982.861.50 5105 March 3116 1558 $6.50
$27.00 362 $1.50 $43.102.00
$41.693.500.710.333. The prediction is for a steadily increasing sales volume.83 3092 April 1.800.00
$38.458.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 40.750.912.729.00 432 $2.552.00 528 $2.83 4492 August 2748 1374 $5.75 $46.50 $33.00 $25.137.33 $27.00 Salary 60.00 18.33 45.180.000.366.645.660.00 12. month by month.934.946.683.00 440 $2.333.50 $36.67
7. and year by year.000.00 318 $1.08 $27.313.67 33.021.113.824.58 4229 May 2590 1295 $5.640.08 O ctober 2853 1426 $5.425.00 19.00 50.115.727.00 554 $2.00 327 $1.00 300 $1.08 3004 March 1.67 8.907.83 January 2380 1190 $4.000.000.00 $36.83 $32.666.00 353 $1.000.08 O ctober 3483 1742 $6.08 4754 November 2905 1453 $5.50
$32.50 $28.335.00 3.00
.114.340.289.50 $46.605. is to turn a profit.83 3792 December 2.565.405.912.283.58 $25.760.58 $22.214.171.1240.08 4404 July 2695 1348 $5.771.750 875 $3.649.00 5980
$33.00 335 $1.895.720.33 September 3431 $37.25 5193
$35.00 572 $2.000.070.00 4.508. All financial statements are based off of the following thirty-six month sales forecast.50 $25.677.915.377.50 $20.08 3704 November 2.757.00 405 $2.00 379 $1.33 $33.222.33 $24.065 1033 $4.200.645.00 423 $2.83 4142
$26.495.275 1138 $4.00 5280 May 3221 1610 $6.67 52.67
42.400.596.00 $44.158.50 $48.00 $23.118 1059 $4.500.000.003.83 4842 December 2958 1479 $5.848.400.58 $37.00 5.0 Financial Planning Our main goal.58 3879
$19.292.377.815.550.181.33 3967 February 2433 1216 $4.185.855 928 $3.170 $23.00 484 $2.705. we factored in an estimated cost that the restaurant faces each year based on payroll.00 61.810.634.
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 1.00 467 $2.08 April 3168 1584 $6.158.00 458 $2.455.651.580. rent.33 30.00 3.270.231.00 598 $2.50 $21.33 62.00 $30.75 5018 February 3063 1532 $6.00 475 $2.097.018.00 2.750.50 5805 November 3536 1768 $7.00 20.545.75 5368 June 3273 1637 $6.815.400.00 241.600.983.400.000.50
$31.50 $31.83 $40.459.00 3.00 370 $1.633.00 $29.75 $49.966.25 5893 December 3588 1794 $7.865.285.764.00 $22.208.00 502 $2.200.733.827.955.328 1164 $4.387.00 3.50 $22.00 5630
$39.00 581 $2.58 3179 May 1.58 $40.176.490.027.554.67
43.50 1715 $6.00 1085 $4.58 4579
$30.223 1111 $4.130.
940 Year 3 $435.940.000.00 241.00 320.00 24.000.343.00 220.00
.00 1.914.914.000.00 3.00 4.00 6.493.940
317.930.343.993 $547.325.00 338.068.736.000.400.00 12.00 113.90 3.073.00 4.00 48.00 0.00 3.00 38.00 6.304.275 $64.00 8.3126.96.36.1995.00 6.00 0.2 Financial Documents Income Statement
Year 1 Sales .501 $79.172.901.400.00 3.182 $32.300.00 89.00 224.914.00 0.575.00) Year 2 $352.388.500.00 24.00 $0.00 409.Meals Sales .90 316.00 4.325.00 230.00 4.676 $137.00 $0.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 38.115.00 4.300.00 20.000.312.00 24.500.00 0.00 1.Drinks Sales .00 5.500.050 $26.000.00 0.556.500.00 1.90 313.400.00 (91.013 125.433.688 $443.00 38.
00 Total Liabilities and Equity 87.000.00
0.00 89.00) (87.000.00 Capital Stock 75.00 (9.00 1.00 10.00 0.00 41.242.383.00 0.843.00 3.00) (49.595.00) 1.915.00)
Net income Add depreciation Decrease/increase in: Prepaid expenses Inventory Purchase/Sale of: PP&E
(2.894.242.00) Loan Payable Borrowing150.795.00 2.000.00) 1.843.901.556.00 0.242.00) 0.882.00 66.00 (41.00 0.312.00
Increase/decrease in: Loan Payment (46.000.242.Statement of Cash Flows Year 1 Year 2 Year 3 (91.901.00) 41.00 Retained earnings (91.843.00 2.00 Balance Sheet
Year 1 Year 2 Year 3 1.085.00 70.575.000.00) (1.00) 46.00 81.00 53.468.00 75.00 74.00) (49.194.595.00) 3.00)
0.000.00 Change to cash Beginning cash Ending cash 1.00 Capital Stock 75.298.00 87.00 (41.00 0.000.220.00) 46.915.00 (41.00 3.194.00 (43.00 81.00 12.889.674.00 2.00
.220.000.00 4.220.595.575.000.000.00 9.00) (2.582.00 3.915.205.000.00 41.595.220.00 75.00 0.00
Cash Prepaid expenses Inventory Fixed Assets Total Assets
Loan Payable 103.
00 Direct labor
96.00 14.00 24.00 Operating expenses Perishable inventory 377.00 11.616.00 72.100.975.820.000.200.000.081 48.000.21 $8.7.36
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
.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
19.500.014 160.041 16.00 114.744.15 $4.135
Direct Costs 4.00 409.00 283.000.00 4.
85 4.20 104.132.310.983. 6.50 1.00 231. 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 .18 1.One Section.32 514.50 199.00 2.004.78 1.733.65 1.95 106.76 2.800.000.170.00 4.71 1.00 1.364.95 25.47 194.54 1.88 186.859.90 1.00 49.04 1.40 158.748.50 961.879.00 3.50 89.276.944.92 60.Equipment Costs
KITCHEN Single Tank Door Type Dishwasher Spice Shelves Dishtable Package Hand Sink Shelving Unit Three Compartment.75 4.227.2 Cu.018.740.64 3.25 257.43 1.537.778.40 643.00 32. cups w/ lid (1000) straws (2000) napkins (250) x 4 2.79 1.76 100.36 3.96 9.256.017.19 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.06 269.37 2.144.60 268.08
.30 88.767.44 209.Ft.608. 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 8.008.65 248.01 6.
75 $4.00 $10. green.45 $11.60 Sprouts-alfalfa $1.35 Squash-zucchini $2.05 $16.chunks Mangoes $1.98 $3.92 $9. red and chiogga Certified Organic
.organic Onions-red Peas Shallots.00 Sweet potato.05 Blueberries $4.35 $5.35 $14.00 Scallions $0.07 $5.85 $16.90 $16.70 Cost for one Cost per unit week (5 units) Peas-in the pod $2.60 Peppers-red $3.70
Cal Poly Organic Farm: Item FAVA BEANS Lettuce.29 $2. red.85 $5.26 $3.40 $10.75 $602.25 $13.34 Cost for one week (5 units) $6.85 $12.60 $7.94 $4.29 $2.45 $9.bunch Cauliflower-white Celery Cilantro Corn Cucumber Edamame Eggplant Garlic Green beans Lettuce-Boston Lettuce-green leaf Lettuce-romaine Mushrooms-cremini Mushrooms-white Onions.33 $16.11 $2.72 $13.40 $4.65 $6.65 Bananas $0.37 $1.72 $0.70 Peppers-green $1.82 $1.Food Costs
Produce Cost per unit Artichokes Asparagus-bunch Bok Choy Broccoli Cabbage-red Carrots.65 $15.70 Blackberries $4.88 $0.13 $3.47 $2.55 Potato.88 $2.92 $3.60 Tomatoes-plum $1.35 Herbs-cup $2.37 $1.10 $8.05 Cranberries $3.57 $2.00 Oranges-Florida valencia $0.16 $15.45 $12.72 $1.61 $3.50 $6.55 $13.30 $21.36 $11.09 $0.76 $0.66 $18.30 $16.82 $4.85 Nectarines Pears Raspberries Peas-Snow $2.47 $1.5lb bag russet $3.26 $4.00 $5.65 $23.25 $2.97 $3.61 $23.80 Kiwi $0.95 $0.15 $5.84 $1.80 Potatoes-red $1.94 $4.13 $1.61 $23.45 $4.20 $7.12 $10.56 $7.80 Squash-spaghetti $1.04 $15.75 Squash-butternut $1.47 $12.45 $14.30 Peppers-yellow $4.80 $9.20 Avocados $3.29 $1.29 $2. 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.15 $10.30 $1.60 $16.70 Spinach $2.Jewel $2.14 $10.60 $4.80 $4.cup Strawberries Pineapple .53 $4.10 Grapes-seedless $2.11 $20.
Dairy.00 $60. Herbal Jack Swiss – (specify) Salted or NoSalt Soaked Bread (specify) Spelt.00 $6. etc.50 $6.5lbs chickens) Salmon
$7.75 $3. Grains.80 $197. Cost for 2 weeks Cost per unit (10 units) $5.00 $57.50 $7.00 $12.60 $4.50 $3.60 $247.94 $6.00 $45.25 $7.00 $12.00 $0.20 $140.59
$300.089.00 $1.50 $125.50 $5.92 $4.78 $3.50
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. Swiss.80 $191.50 $6. Wheat.00 $60.40 $6.00 $276.06 $7.00 $220.18 $3. Monterey Jack.00 $6.50 $30.00 $260. (specify) Salted or NoSalt Cheddar.20
.00 $60.00 $220.00 $3.00 $6.00 $6.00 $406.50
Yogurt Cow Milk Feta cheese. Pepper Jack.20 $140.045.80 $263.00 $0.50 $5.52 $4.00 $130.00 $60.50 $10.00 $60.00 $300.00 $4.50 $3.00 $201.00
$5.50 $203.25 $6.00 $60.00 $60.20 $290.00 $260. (specify) Salted or NoSalt Mozzarella cheese. 7-Grain Best Salad Vinegar Homemade Mayonnaise Honey Mustard Potato Chips Non Organic/Lard
$6. Spelt.85 $77.00 $6.00 $75.50 $125.00 $35.00 $100. Cinnamon-Raisin Wheat Sourdough Breads (specify) Rye.00 $6.