Bakery Business Plan Example

Bakery Business Plan

There is a shortage of coffee spots where customers can get high-quality coffee and freshly baked pastries in a higher income market in Washington state.

Solution

JJB offers a broad range of coffee and espresso products, all from high-quality imported coffee beans. JJB caters to its customers by providing coffee and espresso products made to suit each customer, down to the smallest detail.

Market

Because Washington has a cool climate for eight months out of the year, hot coffee products are in demand. During the warmer four months of the year, iced coffee products are also in high demand, along with a slower but consistent demand for hot coffee products. Most activity occurs in the morning before ten a.m., with a steady flow for the rest of the day.

Competition

Competition in the local area is sparse and does not provide the same level of product quality and customer service as JJB. Local customers are looking for a high-quality product in a relaxing atmosphere. They desire a unique, classy experience.

Why Us?

JJB is a bakery and coffee shop managed by two partners representing sales/management and finance/administration areas, respectively. The partners will provide funding from their own savings, which will cover start-up expenses and provide a financial cushion for the first months of operation.

Expectations

Forecast

JJB anticipates sales as shown below during the three years of the plan. JJB should break even by the fourth month of its operation as it steadily increases sales. Profits for this time period are expected to be relatively low in the first two years, increasing somewhat in the third. We project an investment of $140,000 from the two founders.

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Financial Highlights by Year

Financing Needed

Startup expenses of $64K, including $3K legal, $20K premises renovation, $40K expensed equipment, and $1K other. These show up as negative retained earnings in the initial balance because they are incurred before launch.

Starting cash in the bank of $70K. (in initial balance)

Other current assets of $12K (in initial balance)

Long-term assets of $65 (in initial balance)

$110K initial investment from founders (Shows up in initial balance as Paid-in Capital.)

$100K 10-year loan from SBA (in initial balance)

$1K in accounts payable at startup. (in initial balance)

Opportunity

Problem & Solution

There is a shortage of coffee spots where customers can get high-quality coffee and freshly baked pastries in a higher income market in the southwest area of Washington state.

Our Solution

JJB offers a broad range of coffee and espresso products, all from high-quality Colombian-grown imported coffee beans. JJB caters to its customers by providing coffee and espresso products made to suit each customer, down to the smallest detail.

Target Market

JJB focuses on the middle- and upper-income markets, which consume the majority of coffee and espresso products.

Local Residents

JJB wants to establish a large regular customer base. This will establish a healthy, consistent revenue base to ensure the stability of the business.

Tourists

Tourist traffic comprises approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.

Competition

Current Alternatives

Leading competitors purchase and roast high-quality, whole-bean coffees and, along with Italian-style espresso beverages, cold-blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, and a line of premium teas, sell these items primarily through company-operated retail stores. In addition to sales through company-operated retail stores, leading competitors sell coffee and tea products through other channels of distribution (specialty operations).

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Larger chains vary their product mix depending on the store’s size and location. Larger stores carry a broad selection of whole-bean coffees in various sizes and types of packaging, as well as an assortment of coffee- and espresso-making equipment and accessories such as coffee grinders, coffee makers, espresso machines, coffee filters, storage containers, travel tumblers, and mugs. Smaller stores and kiosks typically sell a full line of coffee beverages, a more limited selection of whole-bean coffees, and a few accessories such as travel tumblers and logo mugs. According to the most recent data available, industry retail sales mix by product type was approximately 73% beverages, 14% food items, 8% whole-bean coffees, and 5% coffee-making equipment and accessories.

Our Advantages

The retail coffee industry in the U.S. has recently experienced rapid growth. The cool marine climate in southwest Washington stimulates consumption of hot beverages throughout the year.

JJB 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 establish a healthy, consistent revenue base to ensure the stability of the business. In addition, tourist traffic is expected to comprise approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.

Keys to Success

Keys to success for JJB will include:

Providing the highest quality product with personal customer service.

Competitive pricing.

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