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BUSINESS PLAN 2020

Prepared For:
Date:
Prepared By: Eduardo Aceves
Email: tbd
Phone: tbd

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TABLE OF CONTENTS
STATEMENT OF NON-DISCLOSURE & CONFIDENTIALITY 3
EXECUTIVE SUMMARY 4
BUSINESS DESCRIPTION 5
FOUNDING TEAM 5
LOCATION OF THE BUSINESS 5
PRODUCTS 5
INDUSTRY ANALYSIS 6
LOCAL MARKET ANALYSIS 8
COMPETITIVE ANALYSIS 10
MARKETING PLAN 10
SWOT ANALYSIS 12
FINANCIAL PROJECTIONS 13
REVENUE PROJECTION 13
FINANCING 14
PRO FORMA FINANCIAL STATEMENTS 15
APPENDIX 17

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STATEMENT OF NON-DISCLOSURE & CONFIDENTIALITY

This document contains proprietary and confidential information. All data

submitted is provided in reliance upon its consent not to use or disclose any
information contained herein except in the context of its business dealings with
Xurros. The recipient of this document agrees to inform its present and future
employees and partners who view or have access to the document's content of its
confidential nature.
The recipient agrees to instruct each employee that they must not disclose any
information concerning this document to others except to the extent such matters
are generally known to, and are available for use by, the public. The recipient also
agrees not to duplicate or distribute or permit others to duplicate or distribute any
material contained herein without Xurros’ express written consent.
Xurros retains all title, ownership and intellectual property rights to the material
and trademarks contained herein, including all supporting documentation, files,
marketing material, and multimedia. All information included in this business plan
was provided and approved by Xurros.
BY ACCEPTANCE OF THIS DOCUMENT, THE RECIPIENT AGREES TO BE
BOUND BY THE AFOREMENTIONED STATEMENT.

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EXECUTIVE SUMMARY

Xurros is a churro café opening soon in Springfield, MO. Xurros sells authentic Spanish
churros, made from a recipe developed in Spain. The churro will be the star product at
Xurros. Authentically Spanish-syle churros will be fried while you wait and topped made-to-
order.

The target market for Xurros is primarily students, and sedondarily families. This will ensure
strong community support year-round. Xurros will advertise both offline with University
events and partnerships and online on social media and Google My Business. It will create a
brand personality that is rooted in its authenticity, with levity and a strong sense of fun.

Xurros will have a brick and mortar location in downtown Springfield, MO, near many other
dining establishments. This will attract customers to Xurros, as they seek a dessert after their
meal. It will offer delivery to ensure that even families who are not able to leave their homes
due to coronavirus can enjoy churros.

The founder is planning to invest one-third of the total startup costs, and is seeking a loan for
$30k for the rest. The business is projected to be profitable in Year 1 by a small margin, with
profitability increasing significantly in Years 2 and 3.

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BUSINESS DESCRIPTION
Xurros is a churro café making handcrafted Spanish donuts, opening soon in Springfield,
MO. Xurros sells authentic Spanish churros, made from a recipe developed in Spain. It is the
only dessert café in Springfield, MO to make authentic, Spanish-style churros.

FOUNDING TEAM

Founder:
Eduardo Aceves is a recent graduate of Missouri State University with a Bachelor’s in
Business Administration and a minor in Entrepreneurship. He has been in the restaurant
industry for four years as a server, bartender, and shift leader. He is ready to take the next
step to start his own restaurant.

Eduardo chose a churro café because he was inspired by them when visiting Spain. He is so
passionate about churros that he flew out to Spain with his brother Jorge to take a training
course with JL Blanco. JL Blanco is an automatic churro machine manufacturer. This training
course solidified Eduardo’s passion for the business.

Eduardo will own 70% of Xurros.

Co-Founder:
Jorge Aceves has worked in the food industry for eight years. He is passionate about
foodservice. He knows what customers want and care about. He attended the training
program with JL Blanco as well and is well-versed in how to make the churros.

Jorge will own 30% of Xurros.

LOCATION OF THE BUSINESS

325 E. Walnut St. Springfield, MO

PRODUCTS

The churro will be the star product at Xurros. Authentically Spanish-syle churros will be fried
while you wait and topped made-to-order.

About the Churro:

Churros are deep fried in an automatic churro machine. Xurros will offer both straight and
dipped churros. Filled churros will have Nutella, custard, or milk chocolate in them. There
will be toppings available such as sprinkles, Oreos, and powdered sugar. There will be
dipping sauces and milk chocolate.

Complimentary Desserts:

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Ice cream will also be served with the churros, which will be particularly attractive in the
summer. There will be vanilla, chocolate, and cinnamon flavors.

Beverages:
Coffee, Espresso, Cappucino, Mocha, tea, milk, and chocolate milk will be offered.

INDUSTRY ANALYSIS

While churro cafés are new to Springfield, MO, they are quite common around the world. In
Spain, it is common to see churro cafés and many restaurants sell churros.

Here are some examples of churro cafés in the U.S.:

Dulce Churro Café opened in 2018 in Gilbert, Arizona
“Bringing to the Mesa/Gilbert area the tastiest handcrafted Churros made to order”

3Ten Churro Bar opened in May 2019 in San Diego, CA

“CHURROBAR is an urban dessert shop serving authentic churros, premium ice cream, and
tasty beverages. Unique and Instagrammable menu items have created a buzz within the
community and will have you craving your next visit!”

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Cajeta Churro Café opened in September 2019 in Phoenix, AZ

“Cajeta churro cafe is a Spanish churro inspired cafe. We have a wide variety of caffeinated
and non caffeinated drinks ..from sweet! So chewy or simply too wake you up!! Our churros
are made fresh and are NEVER frozen!”

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LOCAL MARKET ANALYSIS

Xurros will be located in the center of Springfield, tentatively at 325 E. Walnut Street. This is
a popular area with a significant amount of foot traffic.

Xurros will be located near other dining establishments, proving that this area has been
successful for many other restaurants. It is located a block from “Tequila and Mezcal
Mexican Cuisine and Bar” and “Qdoba”. Neither have a churro offering. This provides the
opportunity to have a strong partnership with nearby ethnic restaurants, creating an evening
experience for customers.

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Desserts represent 21% of the dining establishments in Springfield. This shows that there is a
market for this type of restaurant, but it does not overwhelm the other offerings.

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COMPETITIVE ANALYSIS

There is competition for desserts in Springfield, MO, but they are focused on cupcakes and
donuts. There are no churro shops in the area, nor are there any ethnic dessert restaurants.

MARKETING PLAN

Target Market:
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The target market for Xurros is students. There is a significant student population in
Springfield, MO. There are 44,377 students across several Universities, such as Missouri
State University, Drury University, and Evangel University.

While Springfield’s student population will keep Xurros busy during the school year, it’s
important to have community support as well, particularly during the summer months when
school populations are lower. There are 74,000 households in Springfield and 37,700 of these
are family households with an average of 3 people per household.

Brand Voice:
Xurros will develop a brand voice that will appeal to students, while keeping it family-
friendly. The brand personality will be based on the authenticity of the brand. The Founder
flew to Spain in order to receive intensive training on starting a churro café. The training
course was taken with JL Blanco, an automatic churro machine manufacturer. This ensures
the authenticity of the food, and this will be a core tenant of the brand. Authenticity is
appealing to Gen Z consumers. According to CNBC, “67 percent of those surveyed agreeing
that ‘being true to their values and beliefs makes a person cool.’”

While authenticity will be the leading attitude of Xurros, it will ensure that “fun” also
prevails. As a dessert brand, it’s important to keep the attitude light, and somewhat cheeky.

Presence:
Xurros has a physical presence, and it will have a strong online presence that points in the
direction of Xurros.

Physical presence:
• 325 E. Walnut St. Springfield, MO (unconfirmed)

Online presence:
• Website
• Google My Business
• Yelp
• Facebook
• Instagram

Advertising:
Xurros will advertise through both online and offline venues.
• Facebook/Instagram Ads
• Google Ads
• Yelp Ads

Xurros will advertise on these three platforms in Year 1, and by Year 2, it will reassess the
productivity and reach of each method and hone its marketing efforts. Generally speaking,
Yelp ads are less productive than Facebook and Google, and they have a minimum spend. If
this proves to be the case for Xurros, the spend will be adjusted accordingly.

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University Relations:
Xurros will create strong ties with universities and colleges in the area.

Potential events:
• Give out flyers and coupons at sports events
• Create relationship with school clubs by creating a catering form
• Giving out samples during finals week

Events:
Xurros will strengthen ties with students and with the community by attending events, giving
out coupons and samples where possible.

Key Springfield Events:

• Pub Trivia Night at Lost Signal Brewing – to target students
• Tuesday Night Lights at Lindberg’s – to target students
• C-Street City Market – to target families and highlight authenticity
• Farmers Market of the Ozarks– to target families and highlight authenticity

SWOT ANALYSIS

Strengths:
Xurros has a strong value proposition because it is providing a community with an innovative
dessert option that has both authenticity and flavor.
Xurros has a low cost start-up model – by keeping costs low in the beginning, it will help
Xurros to ensure that cash flow stays high. It is currently projecting a profit in Year 2, which
is rare among startups.

Weaknesses:
Xurro’s weakness is that churros are not a dessert that is currently offered in the area, so the
public will need to be educated on the benefits of authentic churros.

Opportunities:
Xurros has an opportunity to create a strong unit model, to be replicated across multiple
cities. Springfield will be the proving ground for this business, and then it can spread to other
cities in the Midwest.

Threats:
The biggest threat to Xurros is the location. Since a previous dessert company went out of
business in this location, Xurros will be careful to put a heavy focus on marketing in order to
ensure its survival.

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FINANCIAL PROJECTIONS
Startup Costs

Startup costs are $45,000. Xurros is seeking a $35,000 loan to support startup costs, while
Eduardo will be investing $10,000 of his own funds.

These are the key projections for starting up Xurros:

1. Legal, Regulatory, and Licenses - $2,000. This will include drafting of initial
contracts, setting up corporate entity, applying for local licenses, and any other
incidental legal requirements.
2. Renovation - $8,000. The intended location is already set up to be a restaurant,
therefore renovations should be minimal. However, investment will need to be
made in signage and décor upgrades.
3. Equipment - $15,825. Includes a POS system, Type 2 Hood, Fridge, Smallwares,
Linens, Janatorial Supplies, and Furniture. It is assumed that the existing furniture
will be sufficient, but some budget has been allocated to replacement.
4. Initial Ingredient Stock-Up - $3,000. This is the cost for half a month of
ingredients to set up for opening day.
5. Utilities deposits - $250. Deposits and upfront payments.
6. Security deposit - $4,750. Commercial leases tend to require 3 months deposit in
advance.
7. Website development - $2,000. This amount includes website development,
including the design elements of the entire company.
8. Contingency – 10% of total start-up costs will be set aside for any unplanned
expenses.

Total Startup Costs - $39,407

REVENUE PROJECTION

The revenue projection is based on average transaction size and transactions per day. These
are based on the intended sales price of items and the average number of customers per
transaction. On weekdays, the assumption is that there could be individuals buying two items
or two people buying one item each, on average. On weekends, there may be larger groups of
3. These are averaged across any seasonality that may exist across months. The student
customers will be higher when school is in session and the family customers will be higher in
the summer.
These averages do not include sales tax as they are passthrough.

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Delivery revenues are likely to be important in Year 1 due to families staying at home more
due to coronavirus. The revenue model will be shaped such that the delivery fee covers the
fees from the companies. The delivery offer demonstrates willingness to serve customers,
regardless of their situation.

FINANCING

Xurros will apply for a modest loan to be paid back over a period of five years. This will
ensure that the Founder has adequate backing for all start-up costs and ongoing operational
costs.

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PRO FORMA FINANCIAL STATEMENTS

Assumptions

• Xurros will achieve 60% of potential sales in Year 1, 80% in Year 2, and 100% in Year 3
• Processing fees are 2.75%
• Ingredient costs are 20%
• Packaging costs are 5%
• Waste is no more than 6%
• The Founder and Co-Founder will take modest salaries

Pro Forma Income Statement

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Pro Forma Cash Flow Statement

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APPENDIX

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Springfield, MO Data & Demographics1 (As of July 1, 2019)

POPULATION
Total Population 169,609
Population in Households 159,644
Population in Familes 105,805
Population in Group Qrtrs 9,965
Population Density 2,060
Diversity Index1 32

INCOME
Median Household Income $37,125
Average Household Income $54,133
Per Capita Income $23,692
Wealth Index3 53

HOUSING
Total Housing Units 82,894 (100%)

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 Owner Occupied HU 34,366 (41.5%)
Renter Occupied HU 40,066 (48.3%)
Vacant Housing Units 8,462 (10.2%)
Median Home Value $125,772
Housing Affordability Index2 148

HOUSEHOLDS
Total Households 74,432
Average Household Size 2.14
Family Households 37,747
Average Family Size 3

NOTES

1. The Diversity Index is a scale of 0 to 100 that represents the likelihood that two persons, chosen at
random from the same area, belong to different race or ethnic groups. If an area's entire population
belongs to one race AND one ethnic group, then the area has zero diversity. An area's diversity index
increases to 100 when the population is evenly divided into two or more race/ethnic groups.

2. The Housing Affordability Index base is 100 and represents a balance point where a resident with a
median household income can normally qualify to purchase a median price home. Values above 100
indicate increased affordability, while values below 100 indicate decreased affordability.

3. The Wealth Index is based on a number of indicators of affluence including average household income
and average net worth, but it also includes the value of material possessions and resources. It
represents the wealth of the area relative to the national level. Values above or below 100 represent
above-average wealth or below-average wealth compared to the national level.

Springfield, MO – Age Group Breakdown2 (2017)

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25.7% of the population for whom poverty status is determined in Springfield, MO
(39.8k out of 155k people) live below the poverty line, a number that is higher than
the national average of 13.1%. The largest demographic living in poverty are
Females 18 - 24, followed by Males 18 - 24 and then Females 25 - 34.
Springfield, MO – Race & Ethnicity Breakdown3 (2017)

Springfield, MO – Profession Breakdown (2017)

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 Springfield, MO – Target Market (Students4)

Most students graduating from

In 2017, universities in Springfield,
Universities in Springfield, MO are
MO awarded 10,505 degrees. The
White (8,483 and 86.1%), followed
student population of Springfield,
by Hispanic or Latino (382 and
MO is skewed towards women, with
3.88%), Two or More Races (316 and
17,997 male students and 26,380
3.21%), and Black or African
female students.
American (303 and 3.08%).

The largest universities in Springfield, The most popular majors in

MO by number of degrees awarded
are Missouri State University-
Springfield (4,880 and 46.5%), Ozarks
Technical Community College (2,933
and 27.9%), and Drury University
(1,030 and 9.8%).
Springfield, MO are Other Liberal
Arts & Sciences, General Studies, &
Humanities (1,144 and 10.9%),
General Business Administration &
Management (712 and 6.78%), and
General Psychology (439 and 4.18%).

Springfield, MO – Students’ Race/Ethnicity

Dessert Market Overview - Springfield, MO

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Some of the Top Dessert Cafes in Springfield, MO

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No. Restaurants5 Rating Cuisines Additional info
11am – 11pm (Mon, Tue, Wed,
1 Andy's Frozen Custard 4.2 Desserts Thu, Sun), 11am – 11:30 (Fri, Sat)
1:30am – 8pm (Mon-
2 The Urban Cup 3.8 Coffee and Tea, Desserts Thu),11:30am – 10pm (Fri-Sat)
Coffee and Tea, Desserts, 6am – 10pm (Mon-Thu),6am –
3 Hebrews Coffee 4.1 Sandwich 11pm (Fri-Sat),Closed (Sunday)
Coffee and Tea, Desserts,
4 Mud Lounge 3.9 Vegetarian (Sun),Dinner, Late (Mon-Sat)
10am – 6pm (Mon-Sat),Closed
5 Star Cakes 3.8 Bakery, Desserts (Sun)
5:30am – 10pm (Mon-Sat),6am
Coffee and Tea, Desserts
6 Krispy Kreme 3.5 – 10pm (Sun)
Closed (Mon, Sun), 11am –
7 Style by the Slice 3.4 Desserts 8pm (Tue-Thu)
Breakfast, Lunch, Dinner (7
8 Braum's Ice Cream & Dairy 3.3 Desserts, Ice Cream days a week)
7am – 6:30pm (Mon-Sat),7am
9 Artisan's Oven 3.5 Bakery, Desserts – 2pm (Sun)
10 St George Donut Shop 4.0 Donuts
11 Hurts Donut 3.9 Donuts
12 Culver's 3.8 Desserts, Fast Food, Seafood 11am – 10pm (Mon-Sun)
13 Cold Stone Creamery 3.7 Ice cream
8am – 9pm (Mon, Tue, Wed,
Aviary Cafe & Creperie Thu, Sun), 7am – 11pm (Fri-
14 3.4 Desserts, French Sat)

Pricing/Menus of Dessert Cafes in Springfield, MO

Urban Cup – Cupcake Pricing
STANDARD: $3.45 | 4-PACK: $12.45 | STANDARD DOZEN: $32.95, GLUTEN-FREE $4.25 | MINI DOZEN:
$19.95 | MINI 2-DOZEN: $29.95
Artisan’s Oven - Pricing
Chocolate Chip Cookie – $1.25, Cranberry Orange Oatmeal Cookie – $1.25, Espresso Cookie – $1.50, Lemon Cookie
– $0.75, Orange Almond Shortbread – $1.25, Macaroon – $1.00, Peanut Butter Cookie – $1.25, Iced Sugar Cookie –
$1.25, Vegan Cookie – $1.25, Cinnamon Roll – $3.25, Muffin – $1.50, Quiche – $4.25, Scone – $1.95, Paleo Muffin –
$3.25, Small Granola – $4.00, Large Granola – $7.50, Chocolate Croissant – $1.95, Danish – $2.25

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