NATIONAL OPEN UNIVERSITY OF NIGERIA

UYO STUDY CENTRE

BUSINESS PLAN FOR THE ESTABLISHMENT

OF A BREAD PRODUCTION AND SALE
COMPANY

BY

ETUK, ABASIFREKE BONIFACE

FACULTY: SOCIAL SCIENCE

COURSE TITTLE: BUSINESS CREATION AND

GROWTH

COURSE CODE: GST302

MAY, 2020
 ABAS’ ’BITES

STUDENT PERSONAL DETAILS:

NAME: Etuk, Abasifreke Boniface

MATRIC NUMBER: NOU181051438

EMAIL ADDRESS: johnmonica556@gmail.com

PHONE NUMBER: 08071547925

SEMESTER: 2020/2

SEX: Female

DISABLITY: None

CURRENT PROFESSION: Student

PROGRAMME OF STUDY: Political Science

FACULTY: Social Science

STUDY CENTRE: Uyo Study Centre

ZONE: South-South

S. D. G: Zero hunger, good health and

wellbeing for people

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TABLE OF CONTENTS
1.0 EXECUTIVE SUMMARY
 Introduction
 The Company
 Product and Services
 The Market
 Financial Considerations
1.1 Goals and Objectives
1.2 Mission Statement
1.3 Key to Success
2.0 COMPANY SUMMARY
2.1 Company Ownership
2.2 Start-up Plan
2.3 Company Location
3.0 Situation Analysis
3.1 SWOT Analysis
4.0 Marketing Analysis Summary
4.1 Market Segmentation
4.2 Target Market Segment Strategy
4.3 Market Mix
4.4 Market Needs
4.5 Competition Research
4.6 Sustainable Competitive Advantage
5.0 Strategy and Implementation Summary
5.1 Competitive Edge
5.2 Sales Strategy
6.0 Management Summary
6.1 Organizational Structure
6.2 Management Team
6.3 Payment Options
7.0 Financial Indicators
7.1 Source of capital
7.2 Proforma Forecast and Projection
7.3 Proforma profit and loss
8.0 Sustainability and expansion strategy
9.0 Conclusion
Appendix: Bakery Equipment

1.0 EXECUTIVE SUMMARY

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Introduction

Awareness of high-quality baked goods is on the rise. Good

bread is a rare combination of nutrition, convenience, and luxury.
Today's consumer has less time to create wholesome bread, but
increasingly appreciates the nutritional and sensory benefits it
provides. Good bread provides fiber and carbohydrates in a
convenient, low fat form that is portable and delicious. Good bread
never goes out of style.
ABAS’ Bites will be start-up bakery retail establishment located
in Uyo, Akwa Ibom State. ABAS’ Bites expects to catch the interest
of a regular loyal customer base with its broad variety of bread and
pastry products. The company plans to build a strong market
position in the town, due to the partners' love of baking.
ABAS’ Bites aims to offer its products at a competitive price to
meet the demand of the middle-to higher-income local market area
residents.

The Company

ABAS’ Bites will be incorporated in Uyo, Akwa Ibom State. It is

owned and managed by Miss. Arerosuoghene. The company
intends to hire two full-time pastry bakers and six part-time
salesclerks to handle customer service and day to day operations.

Products and Services

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ABAS’ Bites will stand out from the competition due to their
uniqueness and outstanding quality. ABAS’ Bites will offer a broad
range of bread and other pastry products. ABAS’ Bites caters to all
of its customers by providing freshly prepared pastry products at
all times during business operations. Six to eight moderate
batches of bread and pastry products are prepared during the day
to assure fresh baked goods are always available.
After establishing the business, ABAS’ Bites will research the
possibility of producing cakes to increase revenues. This
investment would require approximately N1,000,000 for the
purchase of equipment and ingredients. The company will also
pursue wholesale contracts.

The Market
With bread being the country’s second staple after rice, the
bakery business is one of those ventures that are sure to bring
multiple returns with just a minimal investment.  Bread is the
country’s second staple and everyone eats bread. Though
consumed mainly as breakfast and snack fare, bread is also taken
at lunch, usually as burgers and even dinner time. Bread is a
convenience type of food. You do not have to sit and have a formal
dinner just to eat bread. In fast food shops, you may get your
bread right at the counter and you even do not have to call a waiter
to serve you. Bread, may be consumed while walking, riding a bus
or even while whiling away time anywhere.

ABAS’ Bites wants to establish a large regular customer base

and will therefore concentrate its business and marketing on local
residents, which will be the dominant target market. This will

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establish a healthy, consistent revenue base to ensure stability of

the business.

Financial Considerations

ABAS’ Bites is armed with N1,000,000 in startup funds and a lot

of guts, we are going to take plunge of starting our own business.
It is composed of N250,000 investment of each of the partner and
a loan of N500,000 from a bank that will cover the bulk of
expenses. We will used our N1,000,000 capital in acquiring one
bakeshop and that included some goodwill money for the recipe
and training.

ABAS’ Bites anticipates sales of about N1,000,000 in the first

year, N1,500,000 in the second year, and N2,250,000 in the third
year of the plan. ABAS’ Bites should break even by the third year
of its operation as it steadily increases its sales. Profits for this time
are expected to be approximately N653,792.60 on its third year,
N1,076,777.45 on its fourth year, and N1,671,352.05 on its fifth
year. The company does not anticipate any cash flow problems.

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1,400,000.00

1,200,000.00

1,000,000.00

800,000.00

600,000.00

400,000.00

200,000.00

-
Year 1 Year 2 Year 3

Pastries Drinks Deliveries

1.1 Goals and Objectives

a. Attain sales of N1,000,000 in the first year.

b. Increase second year sales by 50% and third year by 50%
base on second year sales.
c. Expand by the third year of business.
d. To develop a full menu by the end of our third year.

1.2 Mission Statement

ABAS’ Bites loves to bake! Through baking we aim to connect
with our community by creating great bread and pastry products at
a competitive price to meet the demand of the middle- to higher-
income local market area residents.

1.3 Key to Success

Keys to success for ABAS’ Bites will include:

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1. Providing the highest quality product with personal customer

service.
2. Competitive pricing.
3. The neatness of the environment and the security of the
location
4. Finding and hiring the most qualified and skillful employee

2.0 COMPANY SUMMARY

2.1 Company Ownership

ABAS’ Bites is a bakery managed by Mrs Umoh and her family.

The company plans to build a strong market position in the town,
due to the owners’ love in baking.

2.2 Start-up Plan

Start-up Cost
ABAS’ Bites is a start-up company. Financing will come from
the owners’ savings and loans. The following chart and table
illustrate the company's projected initial start-up costs.
START- UP REQUIREMENTS

Current Assets:
Cash Required N 100,000.00
Start- up Expenses
Legal (licenses, clearance
etc…) N 18, 500.00
Building Improvements N 50,000.00

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Machineries & Equipment N 150,000.00

Rent Expense N 120,000.00
Advertising Expense N 8,000.00
Contract Labor N 10,500.00
Total Requirements N 457,000.00

2.3 Company Location

ABAS’ Bites is headquartered in the town of Uyo, where all of
our products are made from, stored in and shipped from.

3.0 Situation Analysis

3.1 SWOT Analysis

Strengths
 We do have a creative flair
 Sustainable competitive edge of adaptability to all occasions,
trends, and consumer market needs
 Personal and flexible Customer Service
 Good ambiance for customers

Weaknesses
 First time business venture
 Start-up costs are only estimates
 Potentially could be understaffed if our product demand
increases drastically

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Opportunities
 Capitalize on changing market
 Join the trend of modern cupcakes and cakes design
 Focus on large sales through participating at bridal fair
 Increased demand from a successful customer using the
Internet to reach new markets new technologies that allow
you to improve product quality

Threats
 Financial problems could threaten our first year’s success
 Competitors
 The emergence of a new competitor, more sophisticated,
attractive, or cheaper versions of your product or service,
and a downturn in the economy - reducing overall demand

4.0 Marketing Analysis Summary

ABAS’ Bites focus is on meeting the demand of a regular local
resident of Uyo, Akwa Ibom State, as well as a significant level of
tourist traffic from nearby highways.

4.1Market Segmentation

ABAS’ Bites focuses on the middle- and upper-income

markets.  The price will be kept as lower as the known bakeshops.
Mark up will probably be from 35% to 50% depending on the
quantity.

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ABAS’ Bites will also identify its market that consist of people
who have a higher level of discretionary income to indulge in and
appreciate the exquisite creativity and flair to consume
extraordinary pastry products that taste and look good at a low
price.
Among potential customers identified to be a part of our target
market we have identified special events that would involve those
customers such as:
o Anniversary parties
o Baby showers
o Birthday parties
o Bridal showers
o Congratulatory celebrations
o Graduations
o Holidays i.e., Easter, Christmas, Fathers’ Day,
Mothers’ Day, St. Patrick’s Day, Thanksgiving,
Valentine’s Day, Earth Day, Passover, Memorial Day,
etc.
o New Home Welcoming
o Retirements
o Weddings
o And other Special Days

4.2 Target Market Segment Strategy

The dominant target market for ABAS’ Bites is a regular stream
of residents. Personal and expedient customer service at a
competitive price is key to maintaining the local market share of

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this target market. ABAS’ Bites will try to reach out to the market
outside Uyo, Akwa Ibom State.

4.3 Market Mix

1. (Product): Our product is a high-quality, organic dessert that is
extremely adaptable to both special events, and to the special
dietary needs of our customers.
2. (Price): The smallest amount of our bread will be sold at N100
each box of 6's which includes the product and delivery of product
to consumers within Uyo.
3. (Place): ABAS’ Bites will market its products’ adaptability and its
utility adaptability in a venue of different online and offline
approaches which include:
[Online].electronic press releases, website, e-mail marketing
campaign, web video ad, social networking sites ad etc.
[Offline]…press release, brochures, menus, direct mail, television
spot, radio ads, business cards.
4. (Promotion): Our promotional plans include but are not limited
to:
• Create online and offline press releases to introduce new
business
• Radio commercials
• Handbills

4.4 Market Needs

Nothing smells or tastes quite as delicious as a freshly baked

loaf of bread straight from the oven. Bread is the country's second
staple and everyone eats bread. Though consumed mainly as

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breakfast and snack fare, bread is also taken at lunch, usually as

burgers and even dinner time. Bread is a convenience type of
food. You do not have to sit and have a formal dinner just to eat
bread. In fast food shops, you may get your bread right at the
counter and you even do not have to call a waiter to serve you.
Bread can be consumed while walking, riding a bus or even while
whiling away time anywhere.

4.5 Competition Research

Competition in the local comes in many sizes and types, from

other independent bakeries to chain stores, superstores, and
specialty bakeries. Local customers are looking for a high-quality
product but affordable. The leading competitors purchase and
bake high quality, ingredients, bread, pastries, and cakes. They
offer a wide variety of breads and cakes that the market is
enjoying. They bake wedding cakes, others specialize in French
pastries and serves donut. In addition to sales through company-
operated retail stores, leading competitors sell coffee and tea
products through other channels of distribution.
Technologically, some competitors make fresh bread and cakes
products conveniently available via mail order and online.
Additionally, mail order catalogs offering cakes, breads, cupcakes
have been made available by a few larger competitors. Websites
offering online stores that allow customers to browse for and
purchase bread, gifts, and other items via the Internet have
become more commonplace as well.

4.6 Sustainable Competitive Advantage

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Based on our main competition mentioned above, ABAS’ Bites

actually has quite a few competitive advantages which include
ADAPTABILITY:

1. Our price structure remains competitive

2. Our selection of cupcake designs is much more diverse
3. We are adaptable to our customers’ dietary needs offering:
a) Fresh bread
b) Sliced bread
c)Toasted Bread
d) Sugar free bread
4. We can adapt any bread design to any specific occasion

5.0 Strategy and Implementation Summary

ABAS’ Bites will succeed by offering consumers the lowest
price. Increasing the quality of our baked goods; we would aim to
be the cheapest producer of baked goods. Alternatively, we could
cater to a consumer by using organic or vegan products. We will
offer consumer with value-adding features, offering a delivery
service and quick service to be the fastest bakeshop service.

5.1 Competitive Edge

ABAS’ Bites competitive edge is the relatively low level of
competition in the local area in this particular niche. We are
offering the customers a completely new experience and far higher
quality product.
5.2 Sales Strategy

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As the chart and table show, ABAS’ Bites anticipates sales of

about N1,000,000 in the first year, N1,500,000 in the second year,
and N2,250,000 in the third year of the plan.

6.0 Management Summary

6.1 Organizational Structure

6.2 Management Team

There will be a total of 2 full time position for the
management, 2 full time Baker, and 4 part-time Sales Clerk,
Cashier and Janitor.
The business will be open 7 days a week (Monday-Sunday).
Online orders can be accepted 24 hours per day. The actual
operating hours of the business will be 7:00 a.m. – 9:00 p.m. The
job descriptions are as follows:

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(1) Web Master/Marketing Specialist (On- call)

Duties Include:
a) Designing, and maintaining website
b) Processing online order requests
c) Handling customer inquiries, and special requests
d) Managing e-mail list
e) Maintaining blogs
f) Posting online press releases
g) Collecting customer data
h) Implements marketing techniques

(2) Bakers/Creative Cake Artist (2 Full Time/President) (Part-

Time as needed)
Duties Include:
a) Process and log in customer order
b) Schedule order on calendar
c) Handle customer inquiries/confirm customer requirements
d) Create customized cupcakes
(3) Delivery Driver (On- call)
Duties Include:
a) Confirm details of delivery (location specifics/time) with staff and
customer
b) Contact customer to notify estimated time of delivery and terms
of receipt
c) Load and secure product/seeds in vehicle
d) Deliver and setup product
e) Thank customer, provide any additional customer service, leave
business
card

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f) Maintain vehicle (gas, oil change, general repairs/upkeep)

(4) Cashier
a) Receive payment by cash, check, credit cards, vouchers, or
automatic debits.
b) Issue receipts, refunds, credits, or change due to customers.
c) Count money in cash drawers at the beginning of shifts to
ensure that amounts are correct and that there is adequate
change.
d) Greet customers entering establishments.
e) Maintain clean and orderly checkout areas.
f) Establish or identify prices of goods, services or admission, and
tabulate bills using calculators, cash registers, or optical price
scanners.

(5) Sales Clerk

a) Greet customers and ascertain what each customer wants or
needs.
b) Recommend merchandise based on customer needs and
desires.
c) Maintain knowledge of current sales and promotions, policies
regarding payment and exchanges, and security practices.
d) Answer questions regarding the store and its merchandise.
e) Place special orders or call other stores to find desired items.
f) Ticket, arrange and display merchandise to promote sales.
g) Inventory stock and requisition new stock.

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h) Watch for and recognize security risks and thefts, and know
how to prevent or handle these situations.
i) Exchange merchandise for customers and accept returns.
j) Clean shelves, counters, and tables.
k) Prepare merchandise for purchase
l) Bag or package purchases, and wrap gifts.
m) Sell or arrange for delivery, insurance, financing, or service
contracts for merchandise.

6.3 Payment Options

The payment policy that will be adopted by Udy’s Bites is all

inclusive because we are quite aware that different customers
prefer different payment options as it suits them but at the same
time, we will ensure that we abide by the financial rules and
regulation of the state.

Here are the payment options that Udy’s Bites will make available
to her clients;

 Payment via bank transfer

 Payment with cash
 Payment via online bank transfer
 Payment via check

In view of the above, we have chosen banking platforms that will

enable our client make payment for farm produces purchase
without any stress on their part. Our bank account numbers will be
made available on our website and promotional materials to clients
who may want to deposit cash or make online transfer for the
purchase of palm oil in wholesale.

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7.0 FINANCIAL INDICATORS

7.1 SOURCE OF CAPITAL

- Personal saving
- Loan

7.2 PROFORMA FORCASTED AND PROJECTION

Proforma forecast is a financial forecast based on income

statement, balance sheet and cash form. This firm is expected to
generate 100,000 per week after the first seven months
thereafter maybe more than that as the company gains
popularity with increasing customers.

7.3 PROFORMA PROFIT AND LOSS

year1 year2 year3

Gross profit 4,000,000 6,000,000 10,000,000

Expenses 1,200,020 2,000,000 4,000,000

Net profit 3,200,020 4,000,000 6,000,000

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7.4 GROSSPROFIT

year1 year2 year3

Sales 6,000,000 7,000,000 13,000,000

Purchase 2,000,000 1,000,000 3,000,000

Gross profit 4,000,000 6,000,000 10,000,000

8.0 SUSTAINABILITY AND EXPANSION STRATEGY

One of our major goals of starting Udy’s Bites is to build a
business that will survive off its own cash flow without the need for
injecting finance from external sources once the business is
officially running. We know that one of the ways of gaining
approval and winning customers over is to retail our palm products
a little bit cheaper than what is obtainable in the market and we are
well prepared to survive on lower profit margin for a while.

We will make sure that the right foundation, structures, and

processes are put in place to ensure that our staff welfare are well
taken of. Our company’s corporate culture is designed to drive our
business to greater heights and training and retraining of our
workforce is at the top burner.

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We know that if that is put in place, we will be able to successfully

hire and retain the best hands we can get in the industry; they will
be more committed to help us build the business of our dreams.

9.0 CONCLUSION
We have the potential to become a highly regarded resource in
local, regional, national, and international markets.  Due to the
company's marketing strategy, establishment of the company as a
"unique" entity in its industry and careful development of our
products, we have the potential to provide lucrative returns to
potential investors.

Appendix: Bakery Equipments

Convection Oven

Every kitchen has an oven, but in bakeries

the oven is where the foods succeed or fail.
For this reason, bakers often use a
convection oven, which is much more
dynamic than the regular kitchen style. These come in several
varieties, but they all follow the same basic specifications.
Convection ovens have a sophisticated system of fans to evenly
distribute the heat, which can be set as high as 550 degrees. The
controls and thermostats are ultra-accurate and can be fine-tuned
more easily than those of normal ovens. Also, the items inside a
convection oven are much more visible because of the large glass
panes and the high wattage light bulbs inside.

Proofer

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A piece of equipment specifically

designed for bakeries, a proofer is what
dough items, from bread to croissants, go
into before being baked in the oven. The
proofer is similar to an oven, in that there are
several racks that rest inside a controlled heat chamber. Along
with the heat, however, is controlled humidity, and the combination
helps yeast ferment and rise faster and more fully than it would in
a regular oven.

Dough Scales

 Dough scales are an important piece in a baker's culinary arsenal.

When it comes to fragile baked goods like
pastries and croissants, getting the right
amount of ingredients is crucial. Unlike
regular scales, dough scales are designed for sturdiness and for
dealing with the messy ingredients that bakers often use.

Stand Mixer

Whether its a standard kitchen style or an

industrial model, most mixers have the same basic
design: two or more whisks that spin around inside a
secured bowl. Any mixer can save a baker hours
while making dough or whipping cream. The
different settings allow for gentler or more forceful whisking.

Refrigerator/Freezer

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All bakeries need a refrigerator and freezer

in which to keep essential baking items
such as eggs and milk. Refrigerators and
freezers are also used to store items that
require certain temperatures.

Stove

In addition to ovens, having a

commercial stove is a must as well. Some
items need to be cooked before being used.

Display Stands

Having a display stand allows you to show

off your baked goods such as cookies,
cakes, and pies. The most common display
stand is the countertop, which displays the
baked goods underneath.

Cash Register

A cash register is necessary to ring up all

items and calculate order totals

Cake Depositors

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Cake depositors deposit cake batter into

pans and molds. Though cake batter can be
poured by hand, cake depositors ensure
swiftness and uniformity, which, in turn,
increase productivity and the end result. Manufacturers have made
significant technological advances to cake depositors. Cake
depositors are now used to deposit bread batter into loaf pans,
deposit pie filling into crusts, and even ice and decorate the entire
circumference of a cake in a matter of seconds.

Proof Boxes

When baking at home, dough can

take up to two hours or more to proof.
However, bakeries need a quicker
turnaround, and proof boxes allow
them the quick turnaround they need.
Proof boxes are high-humidity/high-temperature boxes that allow
for dough to proof in as little as 15 minutes. Additionally, proof
boxes provide bakeries with increased moisture in the dough,
which, in turn produces a moist and flaky bread or crust.

Dough Preparation Equipment

Bakeries should be stocked with mixers, dough dividers and

rounder, dough sheets, and presses. Proof boxes provide warm,
moist areas encouraging dough to rise. This bakery equipment
should be able to maintain temperatures around 100 degrees
Fahrenheit with humidity hovering around 85 percent, according to
Practically Edible, an online baking information resource.

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Specialized bakery dough equipment can reduce labor-intensive

bakery responsibilities but may also clog up counter space,
according to Bakery Equipment, a bakery supply resource
provider.

Dough divider

Dough rounder dough

sheets

Dough Sheeter

Cutlery and Utensils

Bakeries need cutlery and utensils to make their products.

Knives, spoons, cutting boards and rolling pins are all tools used in
bakeries. Certain products require the use of specialty tools, such
as cookie cutters, bread slicers and cake decorating tools. Bowls
in all shapes and sizes are required for making dough and mixing
ingredients. The cutlery and utensils used by a bakery do vary,
however, depending on the specific needs of the bakery. Baking

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requires an arsenal of smaller equipment items necessary for

culinary success. Examples include grinders for peanuts and figs;
pulverizes for crushing sugar and spices; pretzel rolling equipment;
mixing bowls; and pans for
loaves, muffins and specialty
items.

Bakeries will also need to be

equipped with measuring utensils, whisks, beaters, temperature
gauges, cake decorating tools and special plates. Other small
items include brushes, rolling pins, sifters, pie crimpers and can
openers.