Pizookie Pals Business Plan
ACC 242
By: John Gurczak, Haley Ankenbauer, Shafqat Huq,
Jack Ferrito & Kevin Krone
Company Overview
Description of Product:
We are selling pizookies, popular desserts, which consist of warm, freshly
baked cookies with vanilla ice cream scooped in between. The cookie is generally about
half an inch in height, 4 inches in diameter, and baked in a pizza pan. We will be offering
customers the options of either chocolate chip or sugar cookies as the base of their
pizookie. Another option customers have is whether they want the pizookie delivered to
them, as opposed to stopping by our store, located on Mill Avenue in Tempe. Our store
provides delivery, for a small fee, to customers located within a quarter of a mile from
the boundaries of the Tempe campus. Orders can be placed over the phone or in the
store. People can order over the phone and choose to pick up their pizookie in the store.
Chocolate Chip Cookie Pizookie
Sugar Cookie Pizookie
Ingredients
Butteri
White Sugarii
Brown Sugariii
Saltiv
Vanilla Extractv
Flourvi
Baking Sodavii
Chocolate Chipsviii
Baking Powder ix
Vanilla Ice Creamx
Components
Pans
Refrigeratorxi
Freezerxii
Ovenxiii
Mixerxiv
Freezer Backpacksxv
Bicyclesxvi
Cash Registerxvii
Clear Plastic Bagsxviii
Market
Our company will be targeting people living on or near ASU campus, primarily
freshmen living in the dorms, as well as people shopping on Mill.
Benefits of our Product:
A majority of the students we are targeting as our market do not have access to
cars in order to buy food, and have limited dining options at late hours of the night.
Even fewer options include cold desserts that can be delivered directly to the
customers’ dorm rooms, making us a very unique and appealing option. Because of high
temperatures in Arizona during a significant portion of the year and cravings for sugar at
late hours of the night (especially while studying), we can anticipate a great demand for
our product year round.
Business Description
Pizookie Pals is a student run business located on Mill Avenue that strives to
provide top quality dessert options for students living on and near the Tempe campus,
launching in the spring of 2013. Mill is an ideal location for our business because of its
close proximity to the ASU campus, as well as the additional factor of other businesses
and nightlife being located there as well.
Mission Statement
Our company mission is to provide high quality dessert options to students on
the Tempe campus of ASU, at an affordable price and in a convenient manner. These
students will comprise the majority of our customer-base, along with people shopping
on Mill. We will be competing with other cookie/dessert business in the Tempe area by
providing a delivery service, something we feel would be very appealing to students and
make us a more favorable option. We will be operating late hours, to offer stressed
students the tantalizing option of having a delicious cold dessert delivered right to their
dorm room. Our marketing strategy will compose of advertising these business
strengths on campus to students through flyers, a Facebook page, and word of mouth.
Through this strategy, we hope to achieve our economic goal of selling 100,000
pizookies. Aside from making a profit, our other objective is to offer students the option
of rewarding themselves for a long night of hard work with a delicious treat.
Management Plan
Our business will have 2 employees working at a time, with one baker/cashier,
and one deliverer. Start-up activities will consist of obtaining all the equipment we need
to operate as a business. We will need to obtain 2 bicycles to be used for delivery, an
oven to bake cookies in, a refrigerator and freezer to store ingredients in, and most
importantly, a store location on Mill Ave. with a kitchen.
Startup
Pizookie Pals will operate from a 500 square foot facility located at 100 W.
University Dr., Centerpointxix. The facility will be made available through a 1 year lease
agreement that obligates the management of Pizookie Pals to pay the monthly cost of
$833.33. Our company will purchase one refrigerator, one freezer, one bicycle, a cash
register, one mixer, one oven, and one freezer backpack.
Licenses/fees
As a business we must first register our business as a limited liability company
(LLC). Next we must obtain an employer identification number which is free of charge.
Next we must register for a trade name, which costs 25 dollars and 10 dollars to
expedite the service. Once we finish filling out the trade name registration application,
return it to 1700 W. Washington Street. Next we reserved a corporate name, which has
no fees associated with it. After we have a corporate name and trade name we consider
our business location, which we have already declared to be at 100 W. University Dr.,
Centerpoint. Our total licensing costs will be $444xx.
General and Administrative Activities
1. Pizookie Pals’ operating hours are Sunday- Thursday 12 P.M.-12 A.M. and FridaySaturday 12 P.M.-2 A.M.
2. The management team consists of five different managers that are in rotation.
They have a weekly schedule of when they need to manage the store.
3. Potential managers of Pizookie Pals need to have a college degree and have
some leadership experience in the business management field.
4. The managers have several duties to make sure the store runs smoothly.
 Make sure all employees are doing their job correctly and efficiently
 Open the store at opening time and close the store at closing time
 Assign employees their work shifts and breaks
 Clean and make sure the store looks presentable to customers
 Help count the cash in the cash register at the end of the night
 Take inventory and determine what materials to purchase
 Clock in and clock out employees
5. Our personnel need to have some experience in the food industry and have to
be hard working. They must have a clean track record and not have any felonies
or arrests attached to their record.
6. Managers (us) make the profit.
Line and Staff activities
We started relatively new relationships with Alibaba, webstaraunt,com, Walmart,
and Lowe’s. We get our direct materials from Alibaba such as butter and sugar.
Webstaraunt supplies us with clear plastic cookie bags. Walmart supplied us with eggs.
Lowe’s supplied us with overhead such as Refrigerators and Freezers. Once we have
everything we need to run our business such as land, labor and capital, we start producing
our signature Pizookies for our cherished customers.
Marketing Strategies
Customer Profile
Pizookie Pals is an ice cream cookie business located on Mill Avenue in Tempe,
Arizona. Mill Avenue is located directly adjacent to the campus of Arizona State
University. Due to this close proximity to a big college campus, the majority of Pizookie
Pals customers are going to be students who live on campus. Out of all these students,
more than likely most of the customers will be freshmen because 70% of all first year
students live on campus. On campus students are definitely Pizookie Pals primary
targeted group of consumers. The low prices warrant a high demand of low income
students and low income families of the Tempe area. College students are always
looking for a good snack to eat and Pizookie Pals will provide them this luxury with a
close walk from campus!
Market Analysis
Arizona State University is the largest public university in the country with over
70,000 students enrolledxxi. There are about 9,200 freshman enrolled at ASU. Out of the
9,200, 70% of them live on campus. There are about 58,000 undergraduates and 43% of
them reside in Tempe. 19% of them live on the Tempe campus. Thus, there are a lot of
students who either live on campus or close proximity to campus. This is why our target
market is going primarily consist of the student body of ASU. Cheap entertainment
costs, close proximity to campus, and estimated student expenses. Collegeboard.com,
estimated on-campus students costs are $23,000 and estimated off-campus student
costs are $24,000. $2000 of these costs are personal entertainment costs. With the low
price of two dollars per pizookie, Pizookie Pals becomes a very affordable option for ASU
students. Pizookie Pals can also be a very delectable option for the late night patrons on
Mill Avenue. There are many bars and clubs located on Mill Avenue that attract a huge
group of young adults every weekend. Due to Pizookie Pals’ prime location to this night
life, there will be an abundant amount of party goers that will want a delicious snack to
complement their night.
Competition Analysis
Of course when starting a business, a person must consider their competition
and how their business will attract more customers than their competitors. Pizookie
Pals’ main competitor of business is going to be Slickables, an ice cream sandwich shop
that is also located on Mill. One of the advantages of Slickables’ business is there
location. Since, they are also located on Mill they are in a hot spot for consumers.
Another advantage to Slickables’ business operations are their prices. Their prices for
their products are also low charging $2 per unit. A disadvantage for Slickables’ business
operations is that they don’t deliver their products and Pizookie Pals does delivery.
Delivery is a very important aspect to a business when targeting college students who
may not have a source of transportation. Even with Pizookie Pals’ prime location and
close proximity to campus, there are going to be a large amount of students who do not
have any source of transportation and do not want to leave the comfort of their oncampus dorm or near campus appartment.
Another competitor for Pizookie Pals is Cookiez on Mill. One of their biggest
disadvantages of Cookiez on Mill is their lack of a website for marketing and customer
service. They also only rely on social media for marketing which is a problem because
not everyone participates in social networking. Cookiez on Mill has higher prices
charging $5 for two half sandwiches. This will not even compare to Pizookie Pals’ pricing
structure. One big advantage for Cookiez on Mill, is their large variety of options and
their notoriety amongst consumers in Tempe. Cold Stone Creamery would probably be
considered by the average man to be Pizookie Pals’ biggest competitor; however, this is
not the case. Cold Stone charges premium prices for their less homemade variety. Cold
Stone’s big advantage is their wide variety of flavors and their established reputation in
the desert market.
Pizookie Pals will always have direct competitors to their business operations.
They will also have indirect competitors. For instance, Gordon Biersch is very popular
dining spot on Mill Avenue. Many people that choose to dine here may or may not
choose to get dessert with their meal. This will reduce some possible customers for
Pizookie Pals. An advantage to choosing to dine and order desert at Gordon Biersch is
their luxurious dining experience. Although it is nice to enjoy a luxurious dining
experience, it will be quite pricy. This will inherently discourage customers who cannot
afford to spend that much money on desert. Another indirect competitor for Pizookie
Pals is Z’Tejas. They also offer deserts, which complement their unique Mexican cuisine.
A disadvantage of Z’Tejas, however, is their prices are even higher compared to Gordon
Biersch and their work ours are shorter: Z’Tejas closes at 11 PM on the weekends
compared to Pizookie Pals’ weekend closing time of 2 PM.
Industry Analysis
Pizookie Pals falls under the fast food restaurants type of industries. In our
industry, which falls under and meets the requirements of fast food restaurants, there
was 4.9% total sales growth from 2009 to 2012 in this industry.
Sales Estimate
There are 2 times of the day when dessert is commonly eaten, after dinner and
after lunch. If each undergraduate student ate Pizookie pals twice a year, then we would
meet our sales estimate. 52,734 of the total amount of undergrads attend Tempe campus.
Our sales estimate of 100,000 units is based on the results of the following survey we
conducted.
Product Costing
Costing System
The costing system that we are implementing is a process costing system. We
are using a method of allocating manufacturing costs to products to determine the
average cost per unit. Since all of our units are the same every unit receives the same
manufacturing input. Our manufacturing input consists of three categories: direct
materials, direct labor, and manufacturing overhead. Our direct material costs slightly
differ between the two products since each requires a different recipe. Direct labor and
manufacturing overhead are both equal. The following pie charts display our subdivided
manufacturing costs for chocolate chip and sugar pizookies.
Chocolate Chip
0.24
0.39
Direct Materials
Direct Labor
Manufacturing Overhead
0.62
Sugar
0.22
0.24
Direct Materials
Direct Labor
Manufacturing Overhead
0.62
Markup and Selling Price
We calculated our selling price by researching what prices our competitors sold
their product at. We figured that our main competitor was Slickables. Slickables is also
located on Mill Avenue and sells a similar product. Slickables sells their ice cream
sandwiches for $2.00 each which is why we are selling our pizookies for $2.00 each.
Because our average cost per unit is $1.25 for chocolate chip and $1.08 for sugar, our
markup costs are about 160% and 180%.
Chocolate Chip
Product Cost:
Markup Price:
Selling Price:
Sugar
$1.25
159.65%
$2.00
$1.08
185.41%
$2.00
Variable and Fixed Input Costs
Our variable costs consisted of all of our direct materials plus our utilities. Our
fixed costs consisted of our direct labor and the our manufacturing overhead except for
our utilities.
Direct Materials:
Butter
White Sugar
Eggs
Brown Sugar
Salt
Vanilla Extract
Flour
Baking Soda
Chocolate Chips
Baking Powder
Vanilla Ice Cream
Clear Plastic Cookie
Bag
V/F
V
V
V
V
V
V
V
V
V
V
V
V
Direct Labor:
Delivery Driver
Cashier/Baker
Overhead:
Refrigerator
Freezer
Rent
Utilities
Bicycles
Cash Register
Mixer
Oven
Freezer Backpack
Miscellaneous
Expenses
F
F
F
F
F
V
F
F
F
F
F
F
Break-Even Point
In order to find the break-even point in units we first found the weighted
average contribution margin for both chocolate chip and sugar. We took the sum of
those and found the weighted average contribution margin per unit. From there, we
divided our total annual fixed costs by our weighted average contribution margin per
unit.
WACM:
BEP:
CC: (2.00-0.48)*0.50=$0.76
Total Annual Fixed Cost
+
S: (2.00-0.31)*0.50=$0.85
= $1.60
WACM
= $73,196.40 = 45626 Units
$1.60
Break-Even Point Compared To Our Demand Forecast
Our break-even point is well below our demand forecast, which gives us a fairly
large safety net in case our sales fall short of our demand forecast. In order to breakeven we need to sell 45,626 units, which is not even half of our demand forecast of
100,000 units. If we reach this moderate sales estimate then we will be making a large
amount of profit each month.
Start-Up Budget
Our estimate to start up the business is $25,811.6. This includes all fixed costs
such as equipment that we will purchase, a fourth of a year of labor costs and a fourth
of a year of material costs. Once we start up our business and start pushing product
then we should be able to operate off the $25,811.6 plus our revenue generated. We
are going to invest all of our own cash into the business. Each member of our five
person team will invest $5,162.32.
Start Up Budget
3 Months Labor $15,511.60
3 Months Rent
$2,500.00
Oven
$2,500.00
Refrigerator
$1,650.00
Freezer
$1,550.00
Mixer
$1,450.00
Furniture
$400.00
Cash Register
$100.00
Bicycle
$100.00
Backpack
$50.00
Total
$25,811.60
Sales Budget
Sales Estimate:
January CC
January S
February CC
February S
March CC
March S
April CC
April S
May CC
May S
June CC
June S
July CC
July S
August CC
August S
September CC
September S
October CC
October S
November CC
November S
December CC
Percentage of
Sales:
Units:
Dollars:
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
5.00%
2500
5.00%
2500
5.00%
2500
5.00%
2500
5.00%
2500
5.00%
2500
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
10.00%
5000
5.00%
2500
December S
5.00%
2500
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$5,000.00
$5,000.00
$5,000.00
$5,000.00
$5,000.00
$5,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$10,000.00
$5,000.00
$5,000.00
Production Budget
Our production budget equals our sales budget because we are not going to
carry excess inventory.
Labor Budget
Our business has two necessary job positions, a delivery person and a
cashier/baker. The delivery driver position requires 88 labor hours per week and the
cashier/baker position requires 98 labor hours per week. The cashier and delivery driver
works during regular business hours and the baker comes in before opening for a total
of 10 hours per week. The delivery drivers are paid $4.65 per hour plus tips. If the
average of their tips added to their hourly pay does not exceed $7.65, we will pay the
difference. The cashiers/bakers are paid $8.00 per hour.
Hours
Worked/Week
Weeks In A Year
Rate Per Hour
Total Labor
Delivery Driver
88
52
$4.65
$21,278.40
Cashier/Baker
98
52
$8.00
$40,768.00
Selling and Administrative Budget
Selling & Administrative Budget
Building Rent
$10,000.00
Phone Expense
$200.00
Advertising
$1,000.00
Repairs & Maintenance $1,000.00
Depreciation:
Refrigerator
Freezer
Oven
Mixer
Furniture
Bicycle
Cash Register
Backpack
Total
$165.00
$155.00
$250.00
$145.00
$40.00
$10.00
$10.00
$5.00
$12,940.00
Balance Sheet
Dec. 31
2013
Dec. 31
2014
Dec. 31
2015
$83,209.60
$151,747.60
$223,791.85
$2,500.00
$1,650.00
$1,550.00
$1,450.00
$100.00
$100.00
$50.00
$400.00
$790.00
$2,500.00
$1,650.00
$1,550.00
$1,450.00
$100.00
$100.00
$50.00
$400.00
$1,580.00
$2,500.00
$1,650.00
$1,550.00
$1,450.00
$100.00
$100.00
$50.00
$400.00
$2,370.00
Liabilities
Loan Payable
$25,811.60
$25,811.60
$25,811.60
Shareholders' Equity
Retained Earnings
$64,408.00
$132,156.00
$203,410.25
Current Assets
Cash
Property, Plant & Equipment:
Oven
Refrigerator
Freezer
Mixer
Cash Register
Bicycle
Backpack
Furniture
Less Accumulated Depreciation
Income Statement
Year
Expected Yearly Growth
Net Sales
COGS
Gross Margin
Advertising
Phone
Repairs & Maintenance
Depreciation Expense
Operating Income Before Tax
Tax Deduction(20%)
Net Income
2013
5%
$200,000
$116,500
$83,500.00
2014
5%
210,000
$122,325
$87,675.00
2015
5%
$220,500
$128,441.25
$92,058.75
$1,000.00
$200.00
$1,000.00
$790.00
$80,510.00
$16,102.00
$64,408.00
$1,000.00
$200.00
$1,000.00
$790.00
$84,685.00
$16,937.00
$67,748.00
$1,000.00
$200.00
$1,000.00
$790.00
$89,068.75
$17,813.75
$71,254.25
Cash Flow Statement
Year
2013
2014
2015
$64,408.00
$67,748.00
$71,254.25
$790.00
$790.00
$790.00
Total Cash Flow
$65,198.00
$68,538.00
$72,044.25
Beginning Cash
$18,011.60
$83,209.60
$151,747.60
Ending Cash
$83,209.60
$151,747.60
$223,791.85
Operating Activities
Net Income
Depreciation
i
http://www.alibaba.com/product-tp/119524386/Butter.html
ii
http://www.alibaba.com/product-tp/128577311/White_Sugar.html
iii
http://www.webstaurantstore.com/domino-light-brown-sugar-1-poundbox/99933122.html?utm_source=google&utm_medium=cpc&utm_term=99933122&utm
_campaign=PLA&gclid=CPDb1IOO87MCFal_QgodhTgAWA
iv
http://www.webstaurantstore.com/iodized-table-salt-4-lbbox/102SALT4.html?utm_source=google&utm_medium=cpc&utm_term=102SALT4&u
tm_campaign=PLA&gclid=CIPnz-mO87MCFSXZQgodGiAAzw
v
http://www.alibaba.com/productgs/575904972/100_Natural_Food_Flavour_Pure_Vanilla.html?s=p
vi
http://www.alibaba.com/productfree/105877517/AL_KHUBZ_BAKING_FLOUR_MAIDA_.html
vii
http://www.alibaba.com/product-gs/479342716/baking_soda_144_55_8.html?s=p
viii
https://www.google.com/shopping/product/7792685818688191465?q=where%20to%20b
uy%20cheap%20chocolate%20chips&hl=en&bav=on.2,or.r_gc.r_pw.r_qf.&bpcl=39314
241&biw=1600&bih=799&sa=X&ei=csm2UPKfKqOWiAKno4CAAQ&ved=0CGUQ8
wIwAQ
ix
http://www.alibaba.com/productgs/315722122/baking_powder_manufacturers.html?s=p
x
http://www.dreyers.com/
http://www.lowes.com/pd_263551-2251FCGM201RFB_4294789498%2B4294796421%2B4294796415__?identifier=Commerci
al-Refrigerators%2FStainless-steel%2FStainlesslook&productId=3340592&rpp=32&Ns=p_product_avg_rating%7C1&searchQueryType
=1
xi
xii
http://www.lowes.com/pd_263559-2251FCFS201LFB_4294789496__?goToProdList=true&identifier=Appliances%2FFreezersIce-Makers%2FCommercial-UprightFreezers&productId=3294602&rpp=32&Ns=p_product_avg_rating%7C1&searchQuery
Type=1
xiii
http://www.lowes.com/pd_183691-2251FGET2765KF_0__?productId=3101785&Ntt=commercial+oven&pl=1&currentURL=%
3FNtt%3Dcommercial%2Boven&facetInfo=
xiv
http://compare.ebay.com/like/150665645503?var=lv%3Cyp=AllFixedPriceItemTypes&v
ar=sbar
xv
http://compare.ebay.com/like/360522307760?var=lv&ltyp=AllFixedPriceItemTypes&var
=sbar
xvi
http://www.walmart.com/ip/Genesis-26-Men-s-V2100-Dual-SuspensionBicycle/14089739
xvii
http://www.jr.com/casio/pe/CAS_PCRT280/
xviii
http://www.webstaurantstore.com/clear-plastic-cookie-bag-2000cs/130DP5555PCK2M.html
xix
http://www.loopnet.com/Listing/16555974/100-W-University-Dr-Tempe-AZ/
http://www.legalzoom.com/limited-liability-company/limited-liability-companypricing.html?utm_source=2618&utm_medium=affiliate&utm_campaign=llc&cm_mmc=
affiliate-_-ck-_-2618-_-na
xxi
http://educationportal.com/form/school.html?ctfid=32869451&formId=Arizona+State+University&caid
=3652
xx