The Bakery Business Plan

Bakery
Business Plan
2005
Prepared by:
Whitney Block
Nicole Greenbank
Heather Haeusler
Andrew Spencer
Comm 492.3 Agribusiness Venture Management College of Agriculture and

Commerce University of Saskatchewan
1
Bakery
Executive Summary
Introduction
Awareness of high quality baked goods is on the rise. There is an increased desire for
nutritious and delicious baked goods to give a feeling of healthy living. Breads, especially
whole grains, have many nutritious qualities with its abundance of carbohydrates and
fiber. Specialty breads which contain flax seed or other mixed grains are often high in
omega 3 fatty acids which have proven health benefits.
Operations Plan
The Bakery will be located in Saskatchewan. The bakery will be situated on a family
farm. The family wants to supplement the farm income by setting up this business. The
initial costs for establishing The bakeryBakery are shown in Table 1.
Table 1. Initial Capital Costs

Description Cost
Land $1
Building $85,000
Net Working Capital $1,200
Equipment $17,000
Total Capital Cost $103,201
Human Resources
The bakery is being founded by the owner, who has a Bachelor of Science in Agriculture
from the University of Saskatchewan. Her mother, along with her grandmother, and two
sisters, will also be involved with the bakery. The owner will be the head baker as she
brings years of family baking experience to the company. Together, the women of the
this family will bring knowledge, desire to succeed, and a strong work ethic to the
bakery.
Marketing Plan
Goods will be sold in-store as well other farmer’s markets. Goods will also be sold
wholesale. These distribution channels were chosen based on the target market. This
COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan i

Bakery
market includes consumers interested in superior quality and taste in their baked goods,
and have the income to fulfill this desire. The bakery will market to these consumers by
promoting the benefits of a homemade product that is “just like grandma used to make”.
Financial Plan
According to the base run of the financial model The Bakery will be bankrupt by the
second year and therefore is not feasible. With a $150,000 long term loan, and $30,000 in
equity from the family, the bakery achieves an IRR of 24% and an ERR of 17%. By the
second year the equity is completely exhausted, and payments can not be made on the
loan. Cash flows remain positive for all ten years of the financial plan because of the size
of the introductory loan. These positive cash flows do not indicate a feasible plan.
Based on the scenario analysis is a volatile business. In the worst case scenario a quantity
and price drop of 5% results in an IRR of -2.4%. In the best case scenario a quantity and
price increase of 5% creates an IRR of 54.3%. However, the company is still bankrupt in
the best case scenario.
Conclusion
This business plan for the bakery shows that is an infeasible business. According the
financial analysis it is not recommended they proceed with the bakery business plan as
currently established.
COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan ii

Bakery
Table of Contents
EXECUTIVE SUMMARY.............................................................................................................................I
TABLE OF CONTENTS............................................................................................................................III
LIST OF TABLES.........................................................................................................................................V
LIST OF FIGURES.....................................................................................................................................IV
1.0 INTRODUCTION....................................................................................................................................1
1.1 BACKGROUND........................................................................................................................................1
1.2 OBJECTIVES............................................................................................................................................1
2.0 OPERATIONS AND HUMAN RESOURCES PLAN..........................................................................2
2.1 ORGANIZATIONAL STRUCTURE..............................................................................................................2
2.2 SITE PLAN...............................................................................................................................................2
2.3 BUILDING AND FLOOR PLANS................................................................................................................3
2.4 WORK PLAN AND FLOW OF WORK........................................................................................................4
2.4.1 Technical Processes......................................................................................................................5
2.4.2 Quality Control Program..............................................................................................................5
Sanitation Regulations............................................................................................................................7
2.4.3 Suppliers and Wholesalers............................................................................................................8
2.4.4 Environmental Limitations & Regulations:...................................................................................9
2.5 THE CAPITAL BUDGET...........................................................................................................................9
2.6 WORKING CAPITAL PLANNING AND MANAGEMENT............................................................................10
2.6.1 Cost of Goods Sold for manufacturing and/or processing firms.................................................10
2.6.3 Administration, Marketing, and General Expenses.....................................................................11
2.6.4 Working Capital Planning and Management..............................................................................13
3.0 THE HUMAN RESOURCES PLAN....................................................................................................13
3.0 THE HUMAN RESOURCES PLAN....................................................................................................14
3.1 JOB DESCRIPTIONS:...............................................................................................................................14
4.0 MARKETING PLAN.............................................................................................................................17
4.1 OVERVIEW...................................................................................................................................17
4.2 THE MARKETING MIX (4 P’S).....................................................................................................17
4.2.1 Products & Services:...................................................................................................................17
4.2.2 Price:...........................................................................................................................................17
4.2.3 Promotion:...................................................................................................................................17
4.2.4 Place:...........................................................................................................................................17
4.3 SEGMENTATION, TARGETING, AND POSITIONING........................................................................18
4.3.1 Segmentation...............................................................................................................................18
4.3.2 Target Markets............................................................................................................................18
4.3.4 Positioning...................................................................................................................................20
4.4 SWOT ANALYSIS........................................................................................................................21
4.5 MARKET ANALYSIS:.............................................................................................................................24
4.5.1 The Market...................................................................................................................................24
4.5.2 Competition.................................................................................................................................26
4.5.3 Customers:...................................................................................................................................30
4.5.4 Target Markets............................................................................................................................32
4.5.5 Product Features:........................................................................................................................32
4.5.6 The Opportunity:.........................................................................................................................34
4.6 MARKETING STRATEGY...............................................................................................................35
COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan iii
Bakery
4.6.1 Sales and Profit Objectives..........................................................................................................35

4.6.2 Channels of Distribution.............................................................................................................35
4.6.3 Pricing Policy.........................................................................................................................37
4.6.4 Select Markets/Product/Service Mix...........................................................................................38
4.6.5 Selling and Advertising................................................................................................................38
5.0 FINANCIAL DATA AND RISK ANALYSIS......................................................................................40
5.1 JANUARY 1, 2007 BALANCE SHEET.....................................................................................................40
5.2 FINANCING BUDGET.............................................................................................................................41
5.3 DIVIDEND POLICY.................................................................................................................................41
5.3 ECONOMIC FORECAST..........................................................................................................................41
5.4 FINANCIAL ANALYSIS (FEASIBILITY AND OVERALL FINANCIAL PERFORMANCE ASSESSMENT).........42
5.5 SUMMARY OF FINANCIAL RESULTS...........................................................................................42
5.6 RISK ANALYSIS....................................................................................................................................43
6.0 APPENDICES:.......................................................................................................................................48
APPENDIX A: FLOW OF WORK...................................................................................................................48
APPENDIX B: KEY CFIA REGULATIONS....................................................................................................49
APPENDIX C: KEY CFIA FOOD LABELLING REGULATIONS......................................................................50
APPENDIX D: KEY HACCP REGULATIONS................................................................................................51
APPENDIX E: BREAD AND BAKERY PRODUCT EXPENDITURE STATISTICS................................................52
7.0 Refrences:................................................................................................................................................54
COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan iv

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List of Tables
TABLE 1. INITIAL CAPITAL COSTS....................................................................................................................I

TABLE 2. INTRODUCTORY CAPITAL BUDGET...................................................................................................9
TABLE 3. COST OF GOODS MANUFACTURED.................................................................................................10
TABLE 4. COST OF GOODS SOLD....................................................................................................................10
TABLE 5: 2001 CENSUS POPULATION DATA FOR YELLOW CREEK AREA AND SASKATOON...........................25
TABLE 6. ESTIMATED PROJECTED POPULATION DATA FOR YELLOW CREEK AND SASKATOON.....................25
TABLE 7: COMPETITIVE ANALYSIS.................................................................................................................28
TABLE 8: SALES FORECAST............................................................................................................................34
TABLE 9: FACTORS AFFECTING SALES...........................................................................................................35
TABLE 10: THE COUNTRY OVEN: PRODUCTS/PRICES....................................................................................37
TABLE 11: 2007 MARKETING BUDGET...........................................................................................................39
TABLE 12. THE JANUARY 1, 2007 BALANCE SHEET FOR THE BAKERYBAKERY.............................................40
TABLE 13. THE BAKERYFINANCING...............................................................................................................41
TABLE 14: SUMMARY OF FINANCIAL RESULTS..............................................................................................43
TABLE 15. CRITICAL VARIABLES-COUNTRY OVEN.......................................................................................44
TABLE 16. CHANGES IN QUANTITY, PRICE AND IRR.....................................................................................45
Table 17: Current Plant Capacity for the Country Oven................................................................................47
COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan v

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List of Figures
FIGURE 1. ORGANIZATIONAL STRUCTURE OF THE BUSINESS..........................................................................2

FIGURE 2. SITE MAP.........................................................................................................................................3
FIGURE 3. FLOOR/BUILDING LAYOUT...............................................................................................................4
FIGURE 4. BREAK EVEN ANALYSIS FOR THE COUNTRY OVEN......................................................................45
Figure 5: Country Oven Scenario Analysis....................................................................................................46
COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan iv

Bakery
1.0 Introduction
1.1 Background
The owner and her husband are a young couple who farm in Saskatchewan. The couple
operates a grain/cattle farm. The owner works off the farm, but plans to work solely on
the farm by owning/operating a bakery. This bakery would utilize family recipes and hard
work ethic. The business venture would be family oriented, with three generations of
women making the product. The family will utilize their farmyard for the bakery site. The
bakery would first make assorted white and whole wheat breads, buns, muffins, cookies
and tarts.
1.2 Objectives
The purpose of this business plan is to create a plan for starting and running a small, on-
farm bakery. Products offered will include fresh bakery goods such as breads, buns, tarts,
cookies, and muffins. These products will be sold on site to customers coming into the
bakery. Products will also be distributed farmers’ markets, as well as the Sask Made
market and Bulk Cheese Warehouse in Saskatoon.
COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan 1

Bakery
2.0 Operations and Human Resources Plan
2.1 Organizational Structure

The bakery will have a basic organizational structure. The business will have a board of
directors, a president/manager, a head baker, one assistant baker and two assistant
bakers/delivery people. This type of structure is chosen to ensure a hierarchy of
responsibility for all the staff. The board of directors will include two external directors
and three internal directors. There are two external directors. There are three internal
directors. The owner will also serve as the president/manager. The owner will be the
head baker and will dictate baking production. There are three assistant bakers. Figure 1
illustrates the organizational structure.
Board of Directors
President/Manager
Head Baker
Assistant Baker/Delivery
Person
Assistant Baker/Delivery
Person
Assistant Baker
Figure 1. Organizational Structure of the business
2.2 Site plan

The bakery will be built on the Farm. Figure 2 illustrates the family farm, which shows
where the buildings are situated. As shown, the bakery will be positioned on the

Bakery
northwest side of the farm near the driveway, where there is easy access for customers
and transport trucks.
2.3 Building and Floor Plans

The bakery will have the floor plan is illustrated in Figure 3 and is based on 1000 square
feet. The building is not drawn to scale; the approximate dimensions are 40 x 25 ft. The
floor plan consists of a north facing entrance which opens into a sitting/café area with
numerous tables. The bathrooms are located in the north east corner. As you walk into
the building, the display cases are in full view, displaying the products. Situated behind
the display case is shelving to accommodate bread. A wall separates the kitchen from the
rest of the bakery. In the kitchen there is a large area for ovens and mixers, and plenty of
counter space and storage. A cooler is situated in the south west corner for storage of
perishable products. There is also a rack area to cool bread, along with a sink area for
easy clean up. The kitchen also includes a rear entrance for garbage disposal, and
transfer of goods and ingredients.

Bakery
Figure 2. Floor/building layout
2.4 Work Plan and Flow of Work

To produce a finished product for sale, the bakery must have all the essential ingredients,
tools, and equipment on hand. Using family home recipes, the ingredients and equipment
will be utilized to obtain the desired product. These products must be ready to sell fresh
daily. One employee will start work around 4:00am in order to have all the baking
finished in time for the daily sales. The head baker will come in at this time. A second
worker will be come to work at 8:00am to assist in the baking and the serving customers.
An average day for the bakery will require long hours of operation. To bake the amount
of bread required by the bakery, the bakers will have to start around 4:00 am and will not
finish till around noon. (Danish Oven, 2005). The bakery will generally be open to the
public from 8:00 am to 5:00 pm but hours will be flexible since the bakery is on the farm.

Bakery
A floor worker will be needed at the bakery during the day to run the store and serve
customers. The bakers at the rear of the bakery will manage the store till 9:00am.
Raw materials will enter the bakery at the back of the kitchen. All baking will take place
in the kitchen. Finished goods will be loaded into the delivery vans through the back door
or sold at the front counter. Customers will enter through the front door. Appendix A has
a flow of work diagram that shows in detail the flow of materials and people in the
bakery.
2.4.1 Technical Processes

The bakery will begin its operations by making basic bakery products such as whole
wheat and white bread and buns, tarts, muffins, and cookies. These products are simple
to make, package, and distribute. The bakery sitting area will be a great way of
showcasing these products and testing their popularity before larger scale production is
started.
2.4.2 Quality Control Program

Local/RM Regulations and Licensing:
There will be permits and licenses that the bakery will need to obtain, and regulations that
will need to be followed. Each RM has authority to issue its own business license within
its jurisdiction, and to set its own regulations (CSBSC, 2005).
The local fire chief will have to come out to the bakery for an inspection upon its
completion. At this time they will also determine the maximum seating capacity for the
coffee shop portion of the bakery (Bergerman, 2005).
The public health inspector will have to be contacted, and he will have to approve the
plans for the bakery as well as inspect it before it opens for business (Bergerman, 2005).
Once the public health inspector has received an application, as well as all the
information and material needed, and is satisfied with the condition of the bakery he shall
issue a license to operate. This license is subject to any terms and conditions that he
considers appropriate (Government of Saskatchewan Publications Centre, 1988).

Bakery
There must be at least one employee on each shift that has taken the Safe Food Handling
Courses. These are conducted by the local health inspectors (Bergerman, 2005).
Consumer Protection Branch Regulations:

The Consumer Protection Branch requires that the bakery follow The Consumer
Protection Act. This act states that businesses can not operate in an “unfair manner”. It
defines “unfair practices” as the supplier doing or saying anything, or failing to say
anything, if as a result a consumer might reasonably be deceived or mislead. The example
of an unfair practice that was obtained from the Consumer Protection Branch was
to represent that the goods (e.g. the bread) have ingredients, qualities, uses or
benefits that they do not have. (Wilson, Larry, 2005)
CFIA Regulations:
The CFIA requires that the bakery comply with the requirements of the Food and Drugs
Act and the Consumer Packaging and Labeling Act and their related regulations (CFIA
Webmaster, 2005). Sections four through seven of the Food and Drugs Act distributed by
the government of Canada explain regulations that the bakery will have to follow.
Appendix B includes a detailed description of additional key CFIA regulations.
Labeling Regulations:
The CFIA guide to food labeling and advertising was consulted to identify specific
regulations required for labeling and advertising for bakeries. All of the bread products
that are produced by the bakery will have to be labeled because the guide states
“All pre-packaged products require a label with the following exceptions:
One-bite confections, such as candy or stick of gum, sold individually; and
fresh fruits or vegetables packaged in a wrapper or confining band of less then ½
inch” (Section 2.3).
This will not apply to any unwrapped baked goods that are sold to customers in the coffee
shop. There are many other labeling regulations that will need to be considered. They are

Bakery
described in Appendix C. The bakery will have to go through the guide to labeling and
advertising to find out each regulation that they must follow. (CFIA, 2003).
Labour Standards:
According to the labour standards act no employer can require an employee to work more
than eight hours per day, or forty hours per week. If they do work more hours than this
then they must be paid time and a half. Also if an employee works more that six hours per
day they must be allowed at least a thirty minute lunch break within five hours of work
(Saskatchewan Labour, 1995).
Sanitation Regulations
The government of Saskatchewan has sanitation regulations that the bakery must follow.
These regulations are found under the Food, water, and ice section of the sanitation
regulations guide put out by the government of Saskatchewan. The equipment used in the
bakery must be clean and sanitary, and the staff must also be clean and sanitary. All
employees involved in the manufacturing, preparing, making, handling, care and sale of
the baked goods must be cleanly in their habits and mode of working, and must wear
clean washable clothing, and suitable head-dress when required to by the medical health
officer. These employees are also in charge of keeping premises and all machinery,
equipment, appliances, refrigerators in clean and sanitary condition. Food that is offered
for sale or displayed must be protected from sources of contamination. The definition of
protection is determined by the medical health officer. The room, in which the food that
is intended for sale is stored, prepared, or consumed, must not be used as a sleeping
quarters, and it must not house any domestic animals. The food that is being transported
from the bakery in the delivery van must be protected by a wrapping or covering that will
preserve it from contamination. The van used for this transport must be equipped with the
suitable facilities for transporting the goods, and these facilities must be kept clean and
sanitary.
FSEP & HACCP Regulations:
The Food Safety Enhancement Program (FSEP) has been developed by the CFIA to
encourage implantation, maintenance, and development of the Hazard Analysis Critical

Bakery
Control Points system (HACCP). HACCP is a program that the bakery would develop to
implement controls throughout the manufacture of their baked products, and to achieve
food safety standards, and enhance food safety. While it is only necessary for fish and
seafood processing plants, as well as meat slaughtering plants exporting to America, it is
still voluntarily adopted by many companies processing food. This is because the
program has been widely adopted throughout the world.
Producing a safe food product in the bakery will be based upon the Critical Control
Points (CCP) listed in the seven basic principles of HACCP. A CCP is a step in the
manufacturing process that is applied so that a food safety hazard is prevented,
eliminated, or reduced to a suitable level. CCP’s include things such as cooking, chilling,
sanitizing, prevention of cross contamination, and employee and environmental hygiene.
To obtain a HACCP certificate a CFIA agent will verify that the bakery’s HACCP system
is carried out according to the written procedures, and is effective in providing the control
measures outlined. Once certified the bakery will be audited by a CFIA inspector to
ensure that records, procedures, control measures, and corrective action is up to date and
accurate (CFIA, 2005). Appendix D includes further information concerning HACCP
regulations that pertain to the bakery.
2.4.3 Suppliers and Wholesalers

Ingredients for the bakery will come from a variety of sources depending on their nature.
Flour, butters, sugars, salts, and other general ingredients will be purchased from Costco
Wholesale Canada. Specialty ingredients, such as dough relaxants, will come from Dawn
Food Products Inc. (Dawn Food, 2005), a wholesaler specializing in supplying bakery
needs.
2.4.4 Environmental Limitations & Regulations:

Environmental issues and regulations should not be a problem for the bakery. There are
no major environmental regulations that the bakery will need to follow. They will have to
get rid of their garbage in a responsible manner, such as taking it to the local garbage bins
for pick up.

Bakery
2.5 The Capital Budget

The bakery will be creating a new building on the farm, purchasing commercial bakery
equipment, and will require additional working capital. The building will be built by
Humboldt Lumber Mart Ltd. The major bakery equipment will be ordered from Ace Mart
Restaurant Supply Co. Table 2 describes the capital budget and suppliers for the start up
of the bakery.
Table 2. Introductory Capital Budget

Estimated Cost ($) Source of Estimates Obtained
Building: 1000ft2
Bakery $ 85,000 Humboldt Lumber Mart Ltd
Total Building Costs $ 85,000
Equipment:
Oven $ 2,400 Ace Mart Restaurant Supply Co
Proofer $ 2,000 Ace Mart Restaurant Supply Co
Showcase $ 373 Ace Mart Restaurant Supply Co
Refrigerator $ 2,600 Sears Canada
Freezer $750 Sears Canada
Used Mixers 20qt $ 3,200 Nicholson Equipment Ltd.
Shelves/dollies $ 525 Ace Mart Restaurant Supply Co
Additional equipment $5,000
Furniture $ 640 Ace Mart Restaurant Supply Co
Total Equip. Costs $17,600
Total Working Capital $1,200
Total Capital Required $103,800* *rounded to nearest 100
2.6 Working Capital Planning and Management
2.6.1 Cost of Goods Sold for manufacturing and/or processing firms

The cost of goods manufactured for the bakery includes the cost of direct materials, direct
labour and the manufacturing overhead. Direct materials are the raw materials or
ingredients required to make the products. The direct labourers are the only staff that are
directly involved in the making of the products. The manufacturing overhead includes the
power, electric, energy and packaging costs. The cost of goods manufactured breakdown
and total is shown in the Table 3.
Table 3. Cost of Goods Manufactured

Cost of Goods Manufactured 2006

Total Direct Labour and Benefits $30,513
Total Direct Materials $16,689

Bakery
Manufacturing Overhead $10,435

Total $57,637
Cost of Goods Sold

The beginning finished goods inventory for the bakery will be zero because there will be
no finished baked goods when the bakery opens. The cost of goods manufactured is
obtained from above and is $57,637. Based on a two day lifespan of the products, the cost
of ending finished goods inventory for the bakery to be $320 during 2006.
Table 4. Cost of Goods Sold

Cost of Goods Sold 2006
Beginning Finished Goods Inventory 0
Cost of Goods Manufactured 57,637
Cost of Goods Available for Sale 57,637
Ending Finished Goods Inventory 320
Total $57,316
2.6.3 Administration, Marketing, and General Expenses

All other expenses incurred by the bakery will be placed under the heading of
Administration, Marketing and General Expenses. Expenses included in this section are
as follows; management, accounting, benefits and marketing expenses, and general
business expenses such as interest on long term debt. The driver’s wages will be
allocated to administration expenses. The owner’s total salary and a percentage of the
owner’s salary will be allocated to administration expenses. In the first full year of
production, 2007, the total salary expense is $29,000. The total wage expense is $20,808
and grows by 2% per year. Accounting expenses are based on the accountant’s rates.
Assuming that the business has good records, and the accountants are limiting their role
in preparing year end financial statements and engaging in a basic compilation, then it is
estimated that fees be $2000 annually. (John Harder, 2005)
The total marketing expenses for 2007 is $13,549. This includes newspaper advertising,
bulletins, business cards, travel expense, accounting, van rental, and telephone expenses.

Bakery
The bakery will require maintenance of the vehicle. The main expense will be gas for the
vehicle. With gas prices averaging $1.00/litre, gas costs will be $4,500 per year. This
price is based on the van getting 30 miles to the gallon with a 50 litre gas tank.
The interest on debt is calculated based on a $150,000 loan over 10 years. Based on a
8% interest rate. Yearly payments (principle payments plus interest payments) on the
loan would be $17,524 per year.
Canada Pension Plan

According to Revenue Canada, “You have to deduct CPP contributions from an
employee's remuneration if the employee is 18 or older but younger than 70. The
employment must be pensionable during the year, and the employee cannot be receiving
a CPP retirement or disability pension.” (Revenue Canada, 2005)
Canada Pension Plan contributions were calculated by following a guide on the Revenue
Canada website. Calculations were based on the employee contribution rate of 4.95%.
The numbers of pay periods were divided by a basic exemption rate. This was then
subtracted from the employees’ gross pay for each pay period and then multiplied by
4.95%. The owner and Kathy will both be paid a salary once a month. Elizabeth, Laurie
and Lisa will be paid bi-monthly, according to a 5-day work week. Elizabeth is ineligible
for CPP because she is over 70 years old.
Employment Insurance
Employment Insurance premiums are deducted by multiplying the employee’s insurable
earnings by the EI rate for the year, which is 1.95% for 2005.
Vacation Pay
Vacation Pay is determined by the business and is a percentage of the employee’s gross
income. The basic entitlement is two weeks of vacation for every completed "year of
employment". After six consecutive years of employment with the same employer, the
entitlement increases to three weeks of vacation. Vacation pay is calculated as a

Bakery
percentage of the gross wages an employee earns during the "year of employment".
Where the vacation entitlement is two weeks, vacation pay is 4 per cent of earnings in the
entitlement year; where the entitlement is 3 weeks, the vacation pay is 6 per cent of
earnings. (Government of Canada, 2005) The business determined the vacation pay to be
4% of gross income.
Workers’ Compensation
To ensure coverage with the WCB (Workers’ Compensation Board) employers have to
register their business by completing a form which will ensure the business is assessed in
the proper industry classification. The Saskatchewan WCB states, “Most employers in
Saskatchewan are automatically covered by the province's workers' compensation
legislation. All employers operating in industries covered under Saskatchewan's
legislation, which employ workers on a regular, casual or contractual basis, must register
and establish an account with the WCB.” (The Saskatchewan Workers’ Compensation
Board, 2005)
2.6.4 Working Capital Planning and Management

Cash Management
Included in this section are an estimate of the working capital requirements, which can be
found in the capital budget section, and an outline of the cash conversion cycle, which is
illustrated in its own section.
Inventories
Because the product produced by the bakery is a perishable food item the finished goods
inventory is two days. The inventory costs will be low because the product does not
remain in inventory long. Any inventory that is left over will need to be disposed of. The
raw materials inventory will be 30 days so that ingredients do not go stale.
Accounts Receivable
The business will have a short cash conversion cycle because the product is a perishable
item. The accounts receivable for the business will be based on a percentage of total
sales for the year. This total includes sales from the bakery, farmers markets, the Bulk

Bakery
Cheese Warehouse and Sask Made marketplace. Roughly 15% of yearly sales come from
wholesale. There will be an average collection period of 30 days, with no discounts
offered.
Accounts Payable
The business will use a credit card to purchase all raw materials. The credit card is a
Business Card MasterCard, which is often used by small businesses for financial
convenience and control. It has an interest rate is 18.99%, with a grace period of 21 days.
Telephone and power bills, once received, will be paid with a credit card within 30 days.
The store will obtain an interac terminal, for which there is no fee. The suppliers will be
Dawn Foods (Saskatoon), Costco Wholesale Canada (Saskatoon) and Topsyn Packaging
(Saskatoon). All materials bought from suppliers will be paid for using cash.

Bakery
3.0 The Human Resources Plan
3.1 Job descriptions:
President/Manager –
 Must have good business skills to appoint staff members to different jobs, and
design a work schedule for each staff member
 Strong organizational, communication, technical skills
 Knowledge of accounting
 Willingness/ability to travel
 Oversees daily production
 Ensures product quality
 Purchase ingredients from wholesaler
 Ensures facility is kept in good working condition clean
 Salary is $25,000 per year, starting in the first year of full production which is
2007
Head Baker
 Willingness to work long hours (start time: 4:00 am)

 Good ability to read and follow directions/instructions
 Able to produce a premium product
 Ability to follow standard operating procedures when using ovens and mixers
 Salary is $22, 360 per year, starting in the first year of full production which is
2007
Assistant Baker
 Able to take orders, read and follow directions/instructions

 Ability to follow standard operating procedures when using ovens and mixers
 Ability to produce a premium product
 Ability in operating a cash register
 Waitressing duties: serving food and beverages

Bakery
 Dishwasher
 Basic janitorial skills
 Total wage for 2007 is $13,440 based on $9.33/hour
Delivery Persons
 Class 5 drivers license

 Good driving skills
 Good communication/people skills
 Total wage for 2007 is per driver$10,404 based on $8.67/hour
The business will staff approximately five people. If the business does well, and product
orders are high in demand, there may be need for an additional full time staff member.
There is no need for any future planned deletions of staff.
Training programs
According to the Saskatchewan Government website the regulations require that at least
one person who is certified in safe food handling be working in a public eating
establishment at all times when food is being prepared or served. (Government of
Saskatchewan, 2005) Public health inspectors employed by health regions and other
agencies do conduct courses. Courses are usually one day in length and a small fee of
$50 is charged. (Public Health, 2005) For the people enrolled in the course they will
receive a certificate in safe food handling. There are also various food handling programs
available through SIAST, these courses require a lot of investment with regards to time
and money. Courses range from 6 to 20 weeks and vary in prices, which is not cost
effective for this business. (SIAST, 2005) All staff members of the bakery will take the
one day course.
Human Resources Strategy

The human resources strategy will include motivating employees through earnings and
benefits. Employees will all be family members and therefore all share in the profits.
The amount of profit will be a key motivating factor for employees, if profits are high this

Bakery
will signal employees to work harder and produce more products to meet demand. The
basic goals that the business will strive for are good employee relations and a well-trained
workforce. This is accomplished through training and sharing ideas. Standard operating
procedures will be laid out for operating equipment to ensure the safety of employees,
and prevent contamination or damage of the product. All employees will report to the
manager; the owner. (The Long Company, 2005)
The business will consist of five women. The owner who is 23, has a Bachelor of
Science in agriculture and a minor in business, will be the manager and will look after all
accounting and business aspects of the company. The owner also grew up baking with
her family and therefore has somewhat of a baking background. The head baker is 45,
has baked a good portion of her life and often makes her own breads, buns and a variety
of dessert and squares. Assistant bakers will include sisters and grandmother 77. The
sisters will be involved mainly in driving and working in the café area on occasion. One
will work mainly in the bakery and café, although she may help to bake on occasion.
The job that requires technical skills is the managerial position. This job will involve
working with computers by using various accounting programs, and also bookkeeping.

Bakery
4.0 Marketing Plan
4.1 Overview
The bakery will be marketing to six main centers of sale. These include farmers markets,
as well as the bakery itself. These centers are the best way to reach our target market and
sell the number of goods needed to achieve our target profits.
4.2 The Marketing Mix (4 P’s)
4.2.1 Products & Services:

The bakery will be selling homemade unsliced white, 60, 80 and 100% whole wheat, and
rye bread. The bakery will also be selling, white and 80% whole wheat dinner rolls,
hamburger, and hotdog buns. Other products include various flavors of muffins, tarts, and
cookies.
4.2.2 Price:
The bakery will price its products at a premium because they are a fresh baked good of
higher quality and taste than other baked goods in the area. The prices will be slightly
higher but still be competitive with that of the local market for similar goods.
4.2.3 Promotion:
The bakery is going to portray an image of fresh, homemade, quality goods, with a down
home farm feel. On the label the company name and a picture of bread baking in an old
fashioned oven will be featured.
4.2.4 Place:
The product will be sold and Saskatoon. Products will be delivered in the bakery’s
delivery van. The products sold to the RM will be sold out of the bakery. Products will be
sold directly to the customer out of the bakery.

Bakery
4.3 Segmentation, Targeting, and Positioning
4.3.1 Segmentation
The bakery will be selling its baked goods through several different channels of
distribution. Each of these channels will attract different types of people. These channels
include Saskatchewan farmers markets,.
Based upon the geographic area that these distribution channels exist in, it can be
segmented into the population of Saskatoon. The Farmers Markets and the bakery all
cater to the rural or small urban center population in their respective regions.
4.3.2 Target Markets

The target markets of each region, Saskatoon and rural/smaller center will be discussed
separately.
Saskatoon
The target market is the population who seek to purchase a higher quality product that
reminds the consumer of homemade baking from their past. These consumers are usually
between the ages of 30 and 65. They are middle to higher income families or individuals.
The Saskatoon distribution channels each cater to a different segment of the target
market.
Bulk Cheese Warehouse:
The Bulk Cheese Warehouse is located on Broadway Street in Saskatoon, an area that is
traditionally associated with high quality specialty products. The Bulk Cheese Warehouse
attracts customers who are looking for a wide variety of high quality goods, for a
premium price. Its current product mix includes: foreign and local cheeses, specialty
meats, such as jerky and souvilaki that are made in the store, and bagels.
The Sask Made Marketplace:

The Sask Made Marketplace opened in 2003 to showcase Saskatchewan made products
and to attempt to convince consumers to keep their money in Saskatchewan. It is a

Bakery
product of the Saskatchewan Association of Food Processors. (www.saskmade.ca)

Customers are generally those people that have a strong level of regional patriotism.
(www.hsus.org)
Saskatoon Farmers Market:

Saskatoon Farmers’ Market attracts an average of 5000 visitors on Saturdays during the
summers and 1250-1670 visitors on a Saturday during its winter months. Assuming that
its summer Tuesday/Thursday attendance is similar to its winter attendance, during the
summer it attracts about 30,000 visitors monthly and in the winter 5600. Visitors to the
farmers market go for several reasons. Some of these reasons include a desire to support
local people, to find homemade goods, to get the goods they can not produce themselves
and because of the marketplace appeal. Traditionally, visitors are families and of middle
to higher income.
Rural/Small Center
:
Patrons of the farmers markets are categorized in a different way than those that attend
the Saskatoon Farmers Market. Consumers i will attend more for the social benefit of
seeing friends and neighbors and supporting one another (www1.agric.gov.ab.ca). The
farmers market is seen more as a gathering place and as a chance to converse than as a
place to sell.
The Country Oven:

The bakery will be a place where people of the Rural Municipality will come and enjoy a
friendly atmosphere and enjoy homemade baking. They will be friends and neighbors of
the family and will come to have a relaxing visit.
4.3.4 Positioning
Positioning will be divided by channel of distribution and specific venue the product will
be sold in. At the Bulk Cheese Warehouse and Sask Made Marketplace the bakery will
sell its specialty breads and buns. They will be sold to these stores at a lower price. In

Bakery
2006 the prices for specialty bread and buns is $1.13 and $1.50 respectively and will
grow by 2% every year. This is done to allow a profitable mark up by the stores. The
bakery products will be sold as a premium product, and will fit into the Bulk Cheese
Warehouse’s product mix of quality products. At the Sask Made Marketplace, the baking
will be sold as a home made product from Saskatchewan. At the Saskatoon Farmers
Market the full line of baking will be sold, at a premium price. Sales will increase as
reputation and familiarity of patrons to the products increase. The products will be sold as
healthy homemade baking. At the Farmers’ Markets, the baking will be sold as a local
product that is homemade at a premium price, common to products at bake sales and
markets. The bakery will be selling the full range of products at a premium price. Most
items will be sold as individual products, such as tarts or muffins.

Bakery
4.4 SWOT Analysis
Internal Strengths Internal Weaknesses
· an experienced baker with a great · The bakery is not located directly,

work ethic. This will help to ensure making it less accessible to tourists
quality products are produced in passing by.
due time. · The assistant bakers are relatively
· The owner has her degree in inexperienced in baking and will
agriculture from the University of require some time at the job before
Saskatchewan. experience is gained.
· There are five family members · All employees of the bakery are
willing to work full time at the part of the family. This could cause
bakery. This means that there are stress in employee/employer
enough personnel to fill all required relationships as well as in family
positions. relationships.
· The bakery will be located on the · Costs of production per unit are
farm so there is no need for any of relatively high due to high overhead
the workers to commute and land costs and low product demand.
will not have to be rented from an · The family farm does not currently
outside source. have natural gas, therefore ovens
· The family has a strong must be electric.
commitment to succeed. · In order to turn a respectable profit
· The owner and the h family are the bakery will have to increase the
well liked and have a good price of its bread to a value higher
reputation in the local area. This than that of many of its
will help attain and keep consumer competitors.
loyalty.

Bakery
· The family already owns a van that

can be used for delivery, so they
will not have to buy one.
· The bakery is located near a busy
highway making it easier too make
deliveries and for customers to
come to the bakery.
· All wholesalers and suppliers for
goods needed in production can be
obtained in Saskatoon so there will
be no need to travel elsewhere for
needs.
· The bakery will be able to enter a
niche market by selling bread that
is a homemade product using
family recipes.
Internal Strength note:

The owner, having a Bachelor’s of Science in Agriculture with an Ag business minor,
will be a strength, because it will give her insight into the agricultural markets as well as
experience in business and retail work.
Internal Weakness note:
Having a product price higher than that of the competitors may deter buyers, decreasing
product demand. Electric ovens are usually not as efficient as those which are run by
natural gas.
External Opportunities External Threats
· There are few bakeries making · Many of the local bakeries and
products from scratch in the local grocery stores sell whole wheat and

Bakery
area. other specialty bread products at a

· Rural bakeries tend to have less price that is more competitive.
competition than urban bakeries. · Many of the local grocery stores
· Consumers are making a move have their own in–store bakeries
towards a healthier lifestyle which and therefore do not want to sell
includes whole wheat and fresh products, as it would be in direct
made products which the bakery competition with theirs.
will supply. · If the current preference for the
· There is a lot of travel in the area healthier breads and grain products
which may bring consumers into changes to a new health craze-
the bakery who are passing by and which does not include these goods,
would like to stop for a drink or sales at the bakery may drop
treat. significantly.
· Homemade, natural and organic · Utility prices or wholesaler prices
made products are more popular in may increase leading to a higher
urban populations and the trend cost of goods sold.
continues to rise. · Increases in fuel prices will
· The dominant age is the age of the increase the Country Oven’s
bakery’s target market. delivery costs.
· The dominant age of Saskatoon is
below that of the bakery’s target
market.
External Opportunities note:

Currently, producers of baking, at farmers markets, are primarily producing organic
baking and so there exists a niche for homemade bread products. The bakery will be
selling our products in the urban areas where there is greater demand.

Bakery
External Threats note:

The bakery faces the threat of uncontrollable supplier prices of raw materials. They also
are affected by turbulent customer buying trends.
4.5 Market Analysis:
4.5.1 The Market

Information Gathered for the Product Market:
Information to describe the market was obtained from a variety of sources. PCensus
(obtained from Brynna Bergerman), Saskatoon profile key statistics (obtained from
sreda.com), the RM, and Stats Canada were all used to gather population, household, and
consumption of bread products statistics.
Location of the Market:

The market is restricted to the province of Saskatchewan, and more specifically central
Saskatchewan. Products will be made available to citizens of the area.
Total Size of the Market
To determine the size of the market population, statistics from the last census year (2001)
were gathered for the area from PCensus. The 2005 estimated, and 2008, 2010, and 2015
projected populations were also obtained. To differentiate between age and sex the 2005
estimated Population by Sex & Age, and 2005 estimated Population by Age were also
obtained from PCensus. Population numbers are summarized in the following tables.
Table 5: 2001 census population data

Population 20 Km
by Age radius
0-4 0 43 355 40 14,145
5-19 15 181 1125 145 49,790
20-24 0 27 305 30 19,730
25-34 10 67 610 65 31,210
35-44 10 107 750 95 36,720
45-54 10 124 670 5 30,365
55-64 0 104 490 90 17,275
65-74 15 87 500 140 13,570

Bakery
75-84 0 62 510 125 9,440

85+ 0 19 250 100 3,675
Total 45 597 4085 650 225,920
Dominant 65-74 45-54 35-44 65-74 5-19
Age
(PCensus)
Table 6. Estimated projected population data
Total 20 Km
Population radius
2001 Census 56 884 5684 904 231002
2005 Estimate 58 812 4951 831 235034
2008 Projected 57 784 4800 831 236234
2010 Projected 57 765 4698 830 237003
2015 Projected 56 752 4685 822 239906
(PCensus)
Since the bakery will be accessible to all of the people of the RM its population must
also be considered. This was obtained from the RM municipal office. The most recent
stats show that the population is 664 (RM ). It is important to keep in mind that this
population will include the population and 20 Km distance that is listed above.
The bakery will also be selling at the Saskatoon Farmers market so it is important to
know the number of people that shop there on a weekly basis. Deb Claude at the
Saskatoon Farmers market has quoted The bakery that 5000 people pass through the
Saturday market during the summer, and that the Saturday market in the winter draws
1250-1670 people. There were no numbers available for the Tuesday and Thursday
markets but it can be assumed that the numbers for these days would be similar to the
winter Saturday numbers or slightly less.
Trends that will have an impact on future sales:

Social:
Consumer diets will be the major social factor that will have future impact on sales. If the
next diet craze is another low-carb diet similar to the Atkins diet the consumption of all
bread products will decrease and as a result sales will decrease. On the other hand, if the
next popular diet is centered on whole grains consumption of whole grain bread and other

Bakery
baked products, sales will dramatically increase. This will increase the sales of the whole
grain product line.
Economic:
As income increases the amount of money spent on food will also increase. This is
especially true in the bakery type foods such as the breads, buns, muffins, cookies, and
tarts offered by the Country Oven. Canglobal Management Inc. showed that percentage
of bakery products bought was second only to red meat when they looked at the share of
grocery spending on major food groups (35). The opposite is also true. If income
decreases the amount of money that is spent on bakery products will decrease.
4.5.2 Competition
The bakery’s competition will come from bakeries in the town of Wakaw, the city
Melfort, and also from various baking vendors at the Saskatoon farmer’s market.
Located just off of highway 41 by Wakaw there is a bakery located in Country

Crossroads which is a gas station/restaurant supplying its restaurant with bread and
desserts and also sells various baked goods in the convenience store. Crossroads makes
some products from scratch such as bread, tarts and cinnamon buns, while other products
are made from frozen doughs, such as buns. The store has a competitive edge because
the individual products are homemade such as the muffins and tarts, and are very large in
size and quite appealing to the hungry customer. The bakery is also in very close
proximity to Wakaw Lake which is highly populated during summer months. Some
downfalls of the store are the lower variety of products. They do not sell any sliced
bread, or specialty breads, and hamburger and hotdog buns are only available throughout
the summer months. The store also charges a very high price for the baked goods from
scratch. (http://www.countrycrossroads.ca/index.html)
Also in the town of Wakaw the Fine Foods grocery store makes their own in-store bread
from frozen bread dough purchased from Ready-Make. Because all of the goods are

Bakery
made from frozen bread this may not be as appealing to the customer as opposed to
homemade baked goods.
In Melfort, competition includes the Melfort Co-op Bakery, which makes in-store breads
and desserts. There is also the Golden Grain bakery located in Melfort, which is a
café/bakery. The Golden Grain bakery charges more for their product because the
business is smaller than the grocery stores. The bakery also sells items individually in the
café and charge more per item. Also, customers view small-business bakeries in a more
positive way as opposed to bakeries which mass-produce items to be sold in their grocery
store. A breakdown of products and prices of the four competitors is listed in Table 7.
Competition is comparable to the bakery’s pricing as can be seen at the bottom of Table
7. The positive feeling which consumers have towards a family-owned and operated on-
farm bakery will compensate for the higher prices. The bakery will not have the wide
variety of products as the competitors in the first few years, but can diversify once the
business is established. The bakery will charge high prices for products as does
Crossroads.
The population of Wakaw is approximately 880 people, Melfort has a population of

16,834 people and the area (20 km radius of the town) has a population of 805 people
(Bergerman, 2005). This data shows that Melfort has a large majority of the potential
market, while Wakaw and the Yellow Creek area have approximately equal populations
and have a smaller majority of the potential market.
Competition is also present at the Saskatoon farmer’s market. The vendors which sell
baking include; Betty’s Baking, Dianne’s Produce and Baking, Sweet Sensations, To
Heck With Calories, and Unruh’s Baking and Garden. The bread prices range from $1.25
to $4.00 per loaf, while the buns are $1.25 to $1.50 per dozen. The farmer’s market is a
good venue to sell through because of the high numbers of customers who go to the
market every week. The Wakaw and Melfort farmer’s markets will also have
competitive vendors selling baked goods.

Bakery
Table 7: Competitive Analysis
Competition Prices Edge Source

Country Crossroads Very High -located just off highway 41 Manager of
Country
Crossroads
-many services; gasbar/
Subway/c-store/restaurant
-make product from scratch
and Ready-Make
Wakaw Fine Foods Very Low -use pre-mixed frozen dough, Manager of
which cuts costs Wakaw Fine
Foods
-located downtown Wakaw
Melfort Co-op Very Low -located right in co-op grocery Grocery Manager
store of Melfort Co-op
-very wide variety of products
Golden Grain Bakery Average -viewpoint of customers is very Owner of Golden
positive Grain Bakery
-charge more for individual
items
-is a café/bakery
-located in the city of Melfort
Table 7: Competitive Analysis Continued

Competition Prices Edge Source
Farmer’s Markets Average-High -located down-town Personal
communication
-charge more for individual
items
-large number of customers
-wide variety of products
The Bakery Very High -brand new facilities
-products made from scratch
-family owned/operated
-products made from scratch

Bakery
Industry trends show that the small town bakery may not have as many customers as an
urban center, but the net profits may be equal or greater because of the lower overhead
costs. (http://www.nacm.org/bcmag/bcarchives/2003/oct/column4_10_03.html) Also,
while there may be a large number of bakeries in the city, bakeries in small towns are part
of their economy and usually thrive in these areas and there is less competition.
Consumers also look at a small-town bakery as having a more premium, fresher, higher
quality product.
New products and ideas are always being introduced in the industry. The bakery will
have to follow the trends of society such as new diet crazes (Atkins, South Beach) or new
eating habits (whole grains vs. white). The bakery will incorporate whole wheat and
multigrains into the product mix to ensure consumer satisfaction. If the business follows
these new trends they may have an added competitive edge. Bakeries diversify with
different recipes and can develop niche markets for certain products. The length of time
is quite short for competitors to develop a new competitive product to introduce into the
industry.
4.5.3 Customers:
Description of the Customers:
The customers for the product can be grouped in to three categories – local customers,
farmers’ market customers, Saskatoon customers and tourists.
Local Customers:
These are the residents the area, the town of Wakaw, the city of Melfort, and the RM of
Invergordon. Customers will be of all ages, but mostly 20+. There will also be male and
female customers, but the majority of customers will be female because they are the main
grocery shoppers of a family.
Farmers market customers:

Bakery
a) Saskatoon Farmers Market customers:

These are the city dwellers that are willing to pay top dollar for farm fresh bakery
products. They are the residents of Saskatoon and area that visit the Saskatoon farmers
market.
b) Melfort and Wakaw Farmers Market customers:
These are residents of the town of Wakaw and city of Melfort. While they will be willing
to pay a premium price for Country Ovens fresh homemade bread, they will not be as
willing to as much as the people of Saskatoon. As a result sales in Wakaw and Melfort
will be slightly less.
Saskatoon customers:
a) Bulk Cheese Warehouse customers:
These will be residents of Saskatoon and shoppers that come in from out of the city who
are looking for unique, quality food products. Customers will likely be those of the target
market who are more interested in such products.
b) The Sask Made Marketplace customers:
These customers will be much the same as those who visit the farmers markets. They are
interested in quality products but are also interested in the benefits of local products and
the success of Saskatchewan small business.
Tourists: This includes the group of people that vacation at lakes north of Prince Albert or
at Wakaw Lake. It also includes the people that are driving through the Yellow Creek
area and desire fresh homemade products.
When describing the customers it is important to consider what consumers spend on the
product. In Appendix E summarizes the total expenditures, and expenditures per
household made on bakery and cereal products, specifically the products that will be
produced by the Country Oven.
How often customers will buy

The location of the customer will predict how often they buy. Local customers are likely
to buy once or twice a week because the bakery is within close proximity. Farmers
market customers are also likely to purchase products at least once a week all year round.

Bakery
During the summer, purchases may be made two or three times a week because the
market is open three days versus just one day in the winter. Products can be purchased on
Tuesday’s at the Lakewood location, Thursday’s at the 51st St. location, and/or Saturday’s
at the Saskatoon City Hall location during the summer. In the winter months products can
be purchased on Saturday’s at the corner of Ave. A and 19th St.
When and where will customers purchase products?

Local customers and tourists will be able to purchase fresh baked goods Monday through
Friday at The bakery. Products will also be available on Saturdays but these will have
been baked on Friday. Local customers will also be able to purchase Country Oven
products at the local farmers markets in Wakaw and Melfort. The Wakaw farmers market
runs Fridays from May to September, from 2:30 - 6:00. The Melfort farmers market
operates Thursdays from 2:00 - 6:00 from July to September, and Thursdays from 10:00 -
6:00 in May, March, and November. (Kristen and one of her sisters will travel to
Saskatoon, and the other sister will work at the Melfort market).
Saskatoon customers will be able to purchase the bakery baked goods at three different
locations; the Saskatoon Farmers Market, The Bulk Cheese Warehouse, and the Sask
Made Market Place. Saskatoon Farmer’s Market customers will be able to purchase fresh
baked goods on the days and at the locations discussed above. Bulk Cheese Warehouse
customers will be able to purchase products at 732 Broadway Street. Sask. Made Market
Place customers will be able to purchase Country Oven products on 8th Street East.
Who influences buyers decisions?

The buyers’ decision is based on their own personal tastes, and desire for fresh baked,
homemade products. Advertising and word of mouth will also play a role in influencing
the decision to buy.
4.5.4 Target Markets

The target market for Country Oven products will be located in Saskatoon. This target
market has been defined as consumers who are between the ages of 30 and 65, and who

Bakery
are of middle to higher income. Consumers who are purchasing The bakery products
from the Bulk Cheese Warehouse are those which are looking for a wide variety of high
quality baked goods, and are willing to pay a premium price for them. Customers buying
Country Oven products at the Sask Made Market Place will have a strong sense of
provincial loyalty and will be willing to pay a premium price for fresh baked
Saskatchewan made bread, buns, and treats. Buyers at the Saskatoon farmers market are
families of middle to higher income from Saskatoon and surrounding area. They are those
that want to support local business people, want to find homemade baked goods, and who
enjoy the market place appeal.
4.5.5 Product Features:

The key features of The bakery baked products are homemade, fresh, quality goods.
Many of the competitions products are ready make products which means that they are
already premixed and “just add water” recipes. The bakery provides fresh, homemade
bread and bread products that are made right on the farm. Customers will see the products
as 100% homemade because they are made right on the farm by women with many years
bread baking experience.
Specifications of the product

Family recipes will be used to create some of the products produced by the Country
Oven. These products include the traditional white bread, and some of the cookie, muffin,
and tart varieties. New recipes will also be developed by the women running the bakery
in order to meet consumer demands. Products developed from these new recipes include
the 60%, 80%, and 100% whole wheat breads and buns, and some of the cookie, muffin,
and tart varieties.
Key features of the product compared to the competition.

The bakery provides fresh homemade bread that is made on the farm. The products that
are offered by competition are mostly ready make. This means that they just add water to
mixes to create the desired baked goods. The buns, bread, muffins, tarts, and cookies that
are made by The bakery go straight from the farm to the consumers table.

Bakery
List of specifications buyers in the target market are saying they need.
Consumers demand for health foods is increasing, and the demand for foods with high
nutritional properties is expected to increase in the near future (Canglobal Management
Inc, 31). Bread is considered a staple of the Canadian diet (Government of Saskatchewan)
and so will always be in demand. It has been shown that people are moving away from
the traditional products, like white bread, and are consuming a more premium and healthy
variety of bread products such as whole wheat and specialty products. In fact the whole
grains diet is expected to take over the Atkins diet. This increased popularity of whole
grains is partly due to the promotion of whole grain products by Canadian and American
dietary associations (Government of Saskatchewan). Finally, the demand for home-style
breads is increasing. The only statistics that proved this fact are from Quebec, but it can
be assumed that this trend is occurring nation wide. In Quebec there was a 20 - 25%
increase in demand for home-style breads since 2001 (Québec Bakery Industry Outlook).
Does the existing product match the needs of the target market?
Existing products do meet most or all of the needs of the target market listed above.
There are many types of white, partially and 100% whole wheat breads, as well as a
number of specialty breads on the market. This makes the industry very competitive, with
a lot of competitors for The bakery to contend with. The bakery will have an edge when it
comes to home-style breads because their baked products are fresh and homemade on the
farm, compared to the competitors who may use just add water mixes to make their
products.
Does the product match the needs of the target market?

The bakery is providing products that meet consumer needs because they are producing
traditional, white bread and buns, as well as breads that are completely and partially
whole wheat. The bakery is meeting the demand for home-style baked products because
the products they produce are fresh and homemade.

Bakery
4.5.6 The Opportunity:

Summary of Key Aspects of the Market Opportunity:
The key aspect of the marketing campaign is that The bakery provides homemade, fresh,
high quality, healthy bread products.
Sales Forecast
The sales forecast for The bakery is shown in Table 8.
Table 8: Sales Forecast

2006 2007 2008 2009 2010
Total Sales
Volume 30,728 37,896 41,058 44,518 48,309
Total Sales
Revenue $ 90,979 $ 113,396 $ 125,845 $ 139,721 $ 155,215
2011 2012 2013 2014 2015

Total Sales
Volume 52,460 57,011 61,997 67,466 73,465
Total Sales
Revenue $ 172,506 $ 191,820 $ 213,371 $ 237,459 $ 264,393
In 2006, The bakery is projected to be in full production by May. This is in time for the
opening of most of Saskatchewan’s summer farmers markets. After 2006 production
increase to meet the full year’s demand. Sales forecasts are based on the following
factors:
Table 9: Factors affecting Sales

Farmers Percentage of those
Market in attendance
specialty
breads 3.2%
buns for 12 2.4%
muffins for 6 1.2%
tarts for 6 1.2%
cookies for 6 1.2%

Bakery
4.6 Marketing Strategy
4.6.1 Sales and Profit Objectives

· The Country Ovens first objective is to sell yearly beginning in year two:
o 33,043 units of baking will be sold over the counter at the three farmers
markets and at The Bakery
o 6,720 units of baking at the Sask Made Store and the Bulk Cheese
Warehouse.
· The second objective is to achieve total revenue, in year two, based on the above
sales of $113,396.
· The final objective in the first year is to sell 30,278 units of baking, across all
three distribution channels and regions.
4.6.2 Channels of Distribution

Distribution methods are limited, with only two main methods which are over-the-
counter retailing and wholesaling. Products will be distributed through the on-farm
outlet with direct retailing to local customers. Out of store products will be distributed in
the van to the Saskatoon farmers market, The Bulk Cheese Warehouse and the Sask
Made Marketplace all located in Saskatoon, and also to the Wakaw and Melfort farmers
markets. Wholesaling will be done through the Bulk Cheese Warehouse and the Sask
Made Marketplace once per week, while all the rest of the distribution methods will be
over-the-counter retailing. Deliveries to the farmers market in Saskatoon will be every
Saturday throughout the year, and Tuesdays and Thursdays throughout the summer
months. The Wakaw farmer’s market is every Friday from May to September and The
bakerywill participate in the Melfort farmer’s market from July to September and May,
March and November on Thursdays. Competitors in the area will be distributing
products in a similar method.
The over-the-counter type distribution will be suited more towards breads, buns, cookies,
muffins and tarts. This method will be more cost effective as pricing will be quite high.
Since the bakery will not have to sell the goods on a wholesale basis items can be priced

Bakery
individually and therefore average pricing and profits will be higher. This method is the
best match for the business because profits will be higher on a per item basis. Most of the
competitors use the over-the-counter distribution method as well.
The wholesaling method will only include breads and buns because of the nature of the
stores. These products will match both the Bulk Cheese Warehouse and Sask Made
store’s products in that they are both selling high quality, specialty products.
These types of channels will reach the major target markets. The over-the-counter
method will reach the target market readily, because the business is targeting a
demographic which is ages 30-65. This demographic will be abundant at farmers
markets and in the local area.
Over-the-counter retailing will require sales support to work behind the counter at both
the on-farm bakery and the farmers market, while the wholesaling method will not
require any extra staff.
4.6.3 Pricing Policy

The pricing policy for The bakery is based on five products, which are all packaged by
the half dozen with the exception of bread which is packaged by the loaf. Products and
pricing for 2006 are illustrated in Table 10. Prices will grow by 2% in each year after
that. Pricing was determined based on the costs of the raw ingredients and the mark up on
each product in order for the business to maximize profits.
Table 10: The Country Oven: Products/Prices
Price of Product
Specialty Bread Wholesale $1.13
Specialty Bread Farmers Market $2.50
Specialty Buns Wholesale (1/2 dz) $1.50
Specialty Buns Farmers Market (1/2 dz) $3.00
Tarts Farmers Market (1/2 dz) $4.00
Tarts Store (1/2 dz) $8.00
Muffins Farmers Market (1/2 dz) $4.00
Muffins Store (1/2) $8.00
Cookies Farmers Market (1/2 dz) $3.00

Bakery
Cookies Store (1/2 dz) $4.50
The bakery’s pricing will be based on a cost-based approach opposed to market-based.

This approach will allow the bakery to price items according to input costs, and it will
also allow for higher pricing because the product is premium. The pricing is determined
based on competitor’s prices and what the business feels it should charge to ensure it
sufficiently covers the cost of goods manufactured.
The company will have total control over the pricing of its products. But they will have
to take into consideration the prices of competitors and how that will affect their
profitability. Discounts will need to be offered from time to time to get rid of day-old
products so they will not be wasted. The product the bakery is selling is unique in that
there are different prices for different markets. This is because each market is different
and therefore pricing must be differentiated. Over time the bakery will come to the
conclusion whether or not their prices can be maintained. In the future, profits will show
whether or not prices will have to increase or decrease based on consumer demand.
4.6.4 Select Markets/Product/Service Mix

Positioning will be divided by channel of distribution and specific venue the product will
be sold in. At the Bulk Cheese Warehouse and Sask Made Marketplace The bakerywill
sell its specialty breads and buns. They will be sold to these stores at a lower price, $1.13
and $1.50 respectively. This is done to allow a profitable mark up by the stores. At the
Bulk Cheese Warehouse, The bakery products will be sold as a premium product, and
will fit into the Bulk Cheese Warehouse’s product mix of quality products. At the Sask
Made Marketplace, the baking will be sold as a home made product from Saskatchewan.
At the Saskatoon Farmers Market the full line of baking will be sold, at a premium price.
Sales will increase as reputation and familiarity of patrons to the products increase. The
products will be sold as healthy homemade baking. At the Melfort and Wakaw farmers
markets, the baking will be sold as a local product that is homemade at the premium
price, common to products at bake sales and markets. At The bakery a full range of
products will be sold at a premium price. Most items will be sold as individual products,
such as tarts or muffins.

Bakery
4.6.5 Selling and Advertising

The selling and advertising program will include various methods of advertising. These
different methods of advertising will include newspaper, business cards, and posted
bulletins in various stores.
The bakery will try to sell their product by creating an image which people will gravitate
towards. The image will portray things such as: healthy, family-owned, fresh,
homemade, rural and “something that your grandma would make”.
The bakery will not need to expand the staff for advertising and sales. One of the staff
members will post bulletins around the area, while the rest of the advertising will consist
of promotion ads in newspapers, as well as a billboard along the highway. These media
types will be the most effective (cost-wise) to spread the word throughout the central part
of Saskatchewan. Personal promotion will also be an effective tool to promote the
product. Personal promotion will consist of handing out business cards, and word of
mouth. Other methods, such as radio advertising are too expensive. Tradeshows will not
be feasible because they are usually scheduled on Saturdays, which is the Country Oven’s
biggest sales day. The budget for marketing expenses in 2007 is illustrated in Table 11.
Table 11: 2007 Marketing Budget

2007 Marketing Budget
Advertising Expenses/year
Western Producer $410
Bulletins $58
Promotion and Development
Business cards $89
Travel expenses $200
Other
Accounting Expense $2000
Gas $4500
Van Rental $1
Telephone $1200
Van Lease $4500
Business Registration $325
Total Marketing Expenses $13,549

Bakery
The marketing budget will consist of advertising in the Western Producer, which is an
excellent way to get the word out in the rural community. Pricing will be $410.00 for
running a 22 word ad every second week. Bulletins will consist of paper and ink and the
price is $58 based on 500 bulletins. Business cards are $89 for approximately 300 cards.
The latter two will be made by The bakery staff. Travel expenses are $200 based on
traveling for placing bulletins in various businesses.

Bakery
5.0 Financial Data and Risk Analysis

The base case financial plan for The Bakery is included in the last pages of the business
plan.
5.1 January 1, 2007 Balance Sheet.

The building of the bakery will commence on January 1, 2006. Construction will be
completed by May 1, 2006. Full production will begin in 2007. Table 12 shows the
January 1, 2007 balance sheet for The Bakery
Table 12. The January 1, 2007 balance sheet for The Bakery
Balance Sheet
Bakery
As of January 1, 2007
Assets
Current Assets
Cash 49,623
Accounts Recievable 5,891
Inventory 1,842
Total Current Assets 57,356
Fixed Assets
Buildings, Land, Machinery and Equipment 102,589
Accumulated C.C.A. (8,158)
Total Fixed Assets 94,431
Total Assets 151,788
Liabilities
Current Liabilities
Accounts Payable 6,556
Total Current Liabilities 6,556
Non Current Liabilities
Long Term Debt 144,476
Total Non-Current Liabilities 144,476
Total Liabilitites 151,031
Equity
Owners Equity 30,000
Retained Earnings (29,244)
Total Equity 756
Total Liabilities and Owners Equity 151,788
5.2 Financing Budget

The financing will come from a mix of debt and equity financing. Debt financing will be
through the Advantage Credit Union in Melfort. The lender will perform risk analysis to
determine the amount to be loaned. To cover the negative cash flows the business will
need a $150,000 loan. The family will put up 2 quarters of farmland as security for the
loan. The principle payment method will be used for the repayment of the loan. The mix

Bakery
of owner equity will be difficult to raise, due to the high risk associated for the investor.
Risk is much higher for equity holders than debt holders because if the business fails to
bring in profits debt holders are paid first. But if the business makes excess profit, equity
holders will be paid out first. Owner equity will be derived from different internal
investors (family members)., and The owner will all contribute $10,000 each. As Table
13 shows the total financing required, to cover total capital needs, is only $103,767, but
the total financing obtained is $180,000. The reason for the high amount of total
financing is because it is needed to cover negative cash flows.
Table 13. The bakery Financing

Total Financing Required $103,767
Long Term Bank Debt $150,000

Owner Equity $30,000
Total Financing $180,000
5.3 Dividend policy

If the ending cash balance is greater than $60,000 then a 5% of cash balance dividend
will be paid. According to the statement of cash flow on the attached financial plan the
ending balance is not greater than $60,000 until 2014 so dividends will not be paid out
until then.
5.3 Economic Forecast

The expected inflation rate is 2% per year, which is based on the state of the economy.
The expected growth in sales is 5% per year for the store, 2% for the wholesale goods
and 10% for the farmers markets. This projection is optimistic, and is based on the
business becoming very reputable and well known in each of the target areas. The real
growth in inputs, expenses and wages are 2%, which is based on the inflation rate. The
increases must stay in step with the inflation rate to compensate for discrepancies. The
nominal interest rate is 8% which is a set value based on current interest rates.
5.4 Financial Analysis (Feasibility and Overall Financial Performance

Assessment)

Bakery
The base run of the financial model shows that owner’s equity is exhausted by the end of
2007. The retained earnings are negative until 2014. The long term debt of $150,000
allows the cash flows remain positive. Even though the cash flows are positive, the
negative retained earnings and exhausted owners equity indicates that the business is
bankrupt.
NPV of equity using a required rate of return on equity is $26,942. The internal rate of
return (IRR) is the discount rate that equates the NPV to zero. The Country Oven’s IRR is
23.8%. The external rate of return represents the expected return on the investors’
investment based on the dividend policy. The bakeryis offering a low external rate of
return with a high risk rate, which may deter investors. The external rate of return is
16.8%. IRR is greater than ERR which is beneficial, but the company is still not feasible
because of a loss in retained earnings.
5.5 Summary of Financial Results
The projected financial results are summarized in Table 14. All of these values are based
on the base run of the financial model that is attached at the end of the business plan.

Bakery
Table 14: Summary of Financial Results

2006 2007 2008 2009 2010
Revenue $ 90,979 $ 113,396 $ 125,845 $ 139,721 $ 155,215
COGS $ 57,316 $ 67,858 $ 70,930 $ 74,201 $ 77,741
Gross Margin $ 33,663 $ 45,539 $ 54,915 $ 65,519 $ 77,474
Expenses $ 62,907 $ 78,607 $ 78,883 $ 79,136 $ 79,362
Net Income Before Tax
$ (29,244) $ (33,069) $ (23,968) $ (13,616) $ (1,888)
Income Tax $ - $ - $ - $ - $ -
Net Income After Tax
$ (29,244) $ (33,069) $ (23,968) $ (13,616) $ (1,888)
Ending Retained
Earnings
$ (29,244) $ (62,313) $ (86,280) $ (99,897) $ (101,785)
2011 2012 2013 2014 2015

Revenue $ 172,506 $ 191,820 $ 213,371 $ 237,459 $ 264,393
COGS $ 81,575 $ 85,735 $ 90,253 $ 95,172 $ 100,534
Gross Margin $ 90,931 $ 106,085 $ 123,117 $ 142,287 $ 163,860
Expenses $ 79,560 $ 79,726 $ 79,856 $ 79,946 $ 79,993
Net Income Before Tax
$ 11,371 $ 26,359 $ 43,262 $ 62,341 $ 83,867
Income Tax $ - $ - $ - $ 4,252 $ 8,584
Net Income After Tax
$ 11,371 $ 26,359 $ 43,262 $ 58,088 $ 75,283
Ending Retained
Earnings
$ (90,414) $ (64,055) $ (20,794) $ 37,295 $ 107,316
NPV $26,942
IRR on Equity Investment 23.8%
ERR on Equity 16.8%

Investment
5.6 Risk Analysis

The Bakery, just like any other business, has risks associated with it.
The risk analysis provides a list of critical success variables for the business venture, a
breakeven analysis for the bakery, and a scenario analysis indicating the best and worst
case scenarios compared the base case that is in the financial model.
Critical Variables
Critical variables were found using numbers from 2007 base case financial model. This is
because 2007 is the first full year of operation for the bakery. Critical variables were first
found by setting the IRR to 0%. The IRR was then changed to 15% because this is a more
realistic situation, and the same variables were found to be the critical variables. The

Bakery
critical values that were found are shown in the table below. The allowable % change
listed in the table is based on when IRR =15%
Table 15. Critical Variables-Country Oven

Critical Value IRR = 0% IRR = 15% Base Case Allowable % Change
Int. rate on Debt 17% 11% 8% -27.3%
Fuel Prices $15,872 $7,899 $1,200 -84.8%
Driver Wage $13.25 $10.17 $8.50 -16.4%
Quantity of FM 6,570 7,201 8,352 15.6%
bread
Quantity of FM 5,093 7,201 8,352 16%
buns
Price of FM bread $1.69 $2.25 $2.55 13.3%
Price of FM buns $1.97 $2.67 $3.06 14.6%
Four of the most critical variables that were found were driver’s wages, price of
farmers’market bread, price of farmers’ market buns, and quantity of farmers market
bread. These were very sensitive to changes in the IRR from the base case of 23.8% to
15%. The most critical variable was the driver’s wages because that is where the smallest
change occurred, but the price of farmers’ market bread was chosen for the break even
analysis because it is higher risk.
Break Even Analysis
Three types of breakeven analysis performed were cash flow, net income, and economic
(NPV). Figure 4 illustrates the breakeven analysis for the price of farmers’ market bread
which was found to be the most critical variable. The original price is compared to cash,
net income and NPV of the base case financial model. The breakeven analysis in Figure 4
shows that from 2013 to 2015 the price of farmers’ market bread can become negative.
This is due to the bakeries diversification and increased volume of sales is able to cover
fixed costs.

Bakery
Figure 3. Break Even Analysis for The Country Oven
Breakeven Price of Farmers Market Bread Base Case
Cash
$8.00
Net Income
NPV
$6.00
$4.00
$2.00
Price
$-
$(2.00)
$(4.00)
$(6.00)
$(8.00)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Year
Scenario Analysis
Scenario analysis was done showing the best, worst and base case results. Table 16
summarizes the changes in price, quantity and IRR.The best case scenario is a 5%
increase in price of all the products.. This raises the IRR to 54.3%. The worst case
scenario is a price drop of 5%. This drops the IRR to -2.4%. Figure 5 shows the change in
price and quantity of all products, and also shows the change of IRR in the worst, base,
and best case situations. With the best case scenario the company remains bankrupt.
Table 16. Changes in quantity, price and IRR
Worst Base Best

Quantity 95% 100% 105%
Price 95% 100% 105%
IRR -2.4 % 23.8% 54.3%

Bakery
Figure 4: Country Oven Scenario Analysis
Country Oven Scenario Analysis
120% Worst
Base
Best
100%
80%
60%
40%
20%
0%
Quantity Price IRR
-20%
Contingency plans:
It is important for The Bakery to have contingency planning in place to reduce any risks.
The biggest problem with the financials of the business plan is that there is no money
being made on any of the major products. If price of bread decreases, the bakery will
have to either increase sales to a break even level, or the bakery would have to find a way
to decrease fixed costs. Methods that the bakery would employ to increase sales include
adding an additional stall at the Saskatoon farmers market, and during the winter they
could become involved in various craft sales throughout the province. This would
decrease the fixed costs per unit because the fixed costs would be spread out over more
total units.
If sales are greater than expected new staff will have to be hired and additional equipment
will be required. Table 17 shows the current plant capacity.

Bakery
Table 17: Current Plant Capacity for the Country Oven

Amt Amt
Made/Year AmtMade/year Made/year
(1 Oven) (2 ovens) (3 ovens)
Loaves of Bread 9360 18720 40560*
Dozen buns 16640 33280 33280
1/2 Dozen of Other 14560 29120 29120
* The third oven is used only for bread
making
Currently, the bakery is infeasible and bankrupt, so costs would have to be cut in
numerous places in order for the business to be profitable.

Bakery
6.0 Appendices:
Appendix A: Flow of Work
Mixing, Baking, Cooling…

Bakery
Appendix B: Key CFIA Regulations
4. No person shall sell an article of food that:

(a) has in or on it ay poisonous or harmful substance
(b) is unfit for human consumption
(c) consists in whole or in part of any filthy, putrid, disgusting, rotten,
decomposed or diseased animal or vegetable substance
(d) Is adulterated
(e) was manufactured, prepared, preserved, packaged, or stored
under unsanitary conditions
5. (1) No person shall label, package, treat, process, sell, or advertise any food
in a manner that is false, misleading, or deceptive, or is likely to create an
erroneous impression regarding its character, value, quantity, composition,
merit or safety
5.(2) an article of food that is not labelled or packaged as required by, or is
labelled or packaged contrary to, the regulations shall be deemed to be
labelled or packaged contrary to subsection (1)
6.1(1) The Governor in Council may, by regulation, identify a standard prescribed
for a food, or any portion of the standard, as being necessary to prevent
injury to the health of the consumer or purchaser of the food.
6.1(2) Where a standard or any portion of a standard prescribed for a food is
identified by the Governor in Council pursuant to subsection (1), no
person shall label, package, sell or advertise any article in such a manner
that it is likely to be mistaken for that food unless the article complies
with the standard or portion of a standard so identified
7. No person shall manufacture, prepare, preserve, package or store for sale any
food under unsanitary conditions (such conditions or circumstances as might
contaminate with dirt or filth, or render injurious to health or a food)
(Department of Justice Canada, 2005)
Appendix C: Key CFIA Food Labelling Regulations

Bakery
Section 2.4 of the act states that labels must be bilingual with the exception of when the
local products are sold in a local area in which one of the official languages is the mother
tongue of less than 10% of the residents. This allows the bakery to label their products
only in English.
Section 2.7 states that the name and address of the party who is responsible for
manufacturing and or packaging the product must be declared.
Section 2.8 states that the list of ingredients must be shown by their common name on the
package in descending order of the portion by weight as determined before they are
combined to make the food. One exception of this that will apply to the bakery is that
individually wrapped goods that are sold in the coffee shop portion of the store. Also, the
bakery must declare any foods that may cause serious allergic reactions that are present at
the site of production even if they are not an ingredient of the food.
Section 4.7 of the act states that in order to claim that the product is natural, no vitamins,
mineral nutrients, artificial flavoring agents, or food additives may be added. It also
means that there is no removal of, or change of any of its constituents.

Bakery
Appendix D: Key HACCP Regulations

The starting point of HACCP is the hazard analysis. This is a five step system that
identifies and analyzes the hazards involved in food production. The five steps are:
1. Review the incoming material, including ingredients and packaging material
2. Evaluate each step of the processing operations
3. Observe the actual operating practices
4. Take accurate measurements
5. Analyze these measurements
HACCP is a program that is based on seven principles that are aimed at identifying the
hazards involved in food production. These seven principles are
1. Identifying the hazards and listing preventative measures to control them
2. Determining the critical control points (CCP)
3. Establishing limits at each CCP
4. Establishing procedures to monitor CPP
5. Establishing the corrective action that will be taken in case there is a deviation
from the CPP
6. Establishing procedures to verify that they systems are working correctly
7. Establishing effective record keeping for the program

Bakery
Appendix E: Bread and Bakery Product Expenditure Statistics
Saskatoon, SK Farm
Money Spent on: 20 Km Radius of the Bakery
Total Expenditure Total Expenditure Total Expenditure
Expenditure per Expenditure per household Expenditure per household
household
All Bakery & cereal
products $72,273,560 $758 $22,440 $623 $204,230 $608
All Fresh bakery
products $44,242,930 $464 $11,840 $329 $109,496 $326
Bread $14,509,550 $152 $4,320 $120 $40,478 $121
Unsweetened rolls
and buns $7,577,840 $79 $1,780 $49 $16,366 $49
Cookies and sweet
biscuits $6,753,180 $71 $1,340 $37 $12,506 $37
Muffins $1,063,040 $11 $140 $4 $1,293 $4
Dessert pies, cakes
& other pastries $6,543,660 $69 $1,400 $39 $12,810 $38
Melfort Wakaw
Money Spent on:
Total Expenditure Total Expenditure
Expenditure per household Expenditure per household
All Bakery & cereal products $1,192,000 $556 $202,180 $511

Bakery
All Fresh bakery products $724,830 $338 $118,960 $300

Bread $229,940 $107 $38,130 $96
Unsweetened rolls and buns $117,480 $55 $14,850 $38
Cookies and sweet biscuits $113,310 $53 $21,270 $54
Muffins $17,010 $8 $3,120 $8
Dessert pies, cakes
& other pastries $116,380 $54 $20,900 $53

Country Oven Marketing Plan/Kristin Wielgosz
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COMM 492.3 College of Agriculture and College of Commerce, University of 54

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Saskatchewan
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Saskatchewan
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<http://www.cra-arc.gc.ca/E/pub/tg/t4001/README.html>.
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November 1, 2005.
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Saskatchewan
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What’s your baseline: Don’t use the economy,

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24 October 2005.
Wilson, Larry. Deputy Registrar, Consumer Protection Branch of Saskatchewan Justice.

2005. Personal Communication.

Saskatchewan

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The Bakery Business Plan

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Bakery

Comm 492.3 Agribusiness Venture Management College of Agriculture and

Table 1. Initial Capital Costs

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan i

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan ii

4.6.1 Sales and Profit Objectives..........................................................................................................35

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan iv

TABLE 1. INITIAL CAPITAL COSTS....................................................................................................................I

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan v

FIGURE 1. ORGANIZATIONAL STRUCTURE OF THE BUSINESS..........................................................................2

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan iv

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan 1

2.0 Operations and Human Resources Plan

2.1 Organizational Structure

Figure 1. Organizational Structure of the business

2.2 Site plan

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan 2

2.3 Building and Floor Plans

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan 3

Figure 2. Floor/building layout

2.4 Work Plan and Flow of Work

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2.4.1 Technical Processes

2.4.2 Quality Control Program

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Consumer Protection Branch Regulations:

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2.4.3 Suppliers and Wholesalers

2.4.4 Environmental Limitations & Regulations:

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2.5 The Capital Budget

Table 2. Introductory Capital Budget

2.6 Working Capital Planning and Management

2.6.1 Cost of Goods Sold for manufacturing and/or processing firms

Table 3. Cost of Goods Manufactured

COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan 9

Manufacturing Overhead $10,435

Cost of Goods Sold

Table 4. Cost of Goods Sold

2.6.3 Administration, Marketing, and General Expenses

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Canada Pension Plan

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2.6.4 Working Capital Planning and Management

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COMM 492.3 College of Agriculture and College of Commerce, University of Saskatchewan 13

3.0 The Human Resources Plan

3.1 Job descriptions:

 Willingness to work long hours (start time: 4:00 am)

 Able to take orders, read and follow directions/instructions

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 Class 5 drivers license

Human Resources Strategy

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4.0 Marketing Plan

4.2 The Marketing Mix (4 P’s)

4.2.1 Products & Services:

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4.3 Segmentation, Targeting, and Positioning

4.3.2 Target Markets

The Sask Made Marketplace: