Neckers
Company
General Store
Ice Cream Shop Extension
Business Plan
Hannah S. Neckers
Contents
Executive Summary .................................................................................................................................... 3
1.1 Objectives ....................................................................................................................................... 3
1.2 Differentiators and Keys to Success ......................................................................................... 3
1.3 Feasibility ........................................................................................................................................ 4
Market Analysis Summary ....................................................................................................................... 5
2.1 Market Segmentation .................................................................................................................. 5
2.2 Target Market Segment Strategy ............................................................................................. 5
2.3.1 Main Competitors...................................................................................................................... 6
2.3.2 Competitor Breakdown ............................................................................................................ 7
2.3.3 Business Participants ................................................................................................................ 8
Strategy and Implementation Summary ............................................................................................... 9
3.1 Marketing Strategy ...................................................................................................................... 9
3.1.1 Promotion Strategy ................................................................................................................... 9
3.1.2 Distribution Strategy .............................................................................................................. 13
3.1.3 Expected Pricing ...................................................................................................................... 10
3.1.4 Sales Forecast ........................................................................................................................... 10
3.1.5 Growth Potential ..................................................................................................................... 11
Management Summary ............................................................................................................................ 12
4.1 Organizational Structure .......................................................................................................... 12
4.2 Management Team ..................................................................................................................... 13
4.3 Personnel Plan ............................................................................................................................. 13
Costs Summary .......................................................................................................................................... 15
Financial Plan ............................................................................................................................................ 16
5.1 Important Assumptions............................................................................................................. 16
5.2 Forecast ......................................................................................................................................... 16
5.3 Start-Up Costs ............................................................................................................................. 17
5.4 Break Even Analysis .................................................................................................................. 17
5.5 Profit Analysis ............................................................................................................................. 19
Executive Summary
The proposed new venture of Neckers Company General Store is the addition of a homemade ice
cream shop inside the already established business located in the center of downtown Clymer, New
York. For years, we’ve contemplated the idea of adding a walk-up window to the exterior of the
store where ice cream could be available for purchase. Within the past five years, Neckers
Company added a pizza/sub shop, so a kitchen area is now been made readily available to
implement this addition on the north side of the store. Minor remodeling would need to be done to
extend the available working space of kitchen area, and to make room for excess equipment
needed for ice cream production and product storage.
In the Clymer community, the beliefs in supporting small businesses run deep. Through its
establishment nearly 103 years ago, Neckers Company accurately exemplifies these principles in
its ability to maintain a sufficient and loyal customer base, despite larger business establishments
coming to the area. In order to continue our legacy of supporting the local economy, the ice cream
in our store would be produced directly on the premises. We would also affiliate with local dairy
and fruit farmers, using as many of their products as possible in the ice cream production process.
The current lack of an ice cream provider in the Clymer area gives Neckers Company the
opportunity to fill an unmet need. Ice cream has the potential to target an array of markets,
including children, teenagers, and adults. A large portion of the target market will consist of
Clymer’s ever-growing Amish community as well.
1.1 Objectives
1. To remodel the kitchen area and implement a walk-up window on exterior of the building.
2. To sell 20 flavors of premium, homemade ice cream.
3. To create an extension to our business that pays for itself in approximately three years, or
less.
1.2 Differentiators and Keys to Success
Several factors tie into this business proposition’s differentiation and uniqueness:
1. The Fulfillment of an Unmet Need
Scooped, premium, homemade ice cream for impulse purchasing will be the first
business of its kind in town of Clymer.
2. A Homegrown Product
The use of local farmers’ dairy products, fruits, and other various resources all
produced right in small-town Clymer gives it a “homegrown” characteristic.
3
3. Different Flavors:
Rather than simply chocolate and vanilla, the flavor possibilities are endless. By
making our own product, variety is made possible through experimentation and the
use of different ice cream flavor bases and candy or fruit add-ins.
4. Open Year-Round:
Other competitors in surrounding areas that specialize in ice cream alone,
such as Addie’s in Findley Lake, NY, the Ice Cream Shack in Lakewood,
NY, the Straw Hat in North East, PA, or even establishments such as
Dairy Queen, close for extended periods of time over the winter season.
Because Neckers Company is open twelve months of the year, this ice
cream would be available all the time. It’s never too cold for ice cream!
5. Potential Growth:
While the ice cream products will initially be sold out of tubs at Neckers
Company to be scooped on to cones and in dishes, this product has
potential to grow. It may be sold in other locations, or even in carton, takehome form as well.
1.3 Feasibility
By simply making this ice cream business an extension of Neckers Company, it will eliminate the
need for a storefront, and the development of a loyal customer base and new wholesaler to retailer
relationships. Neckers Company has the ability to make remodeling changes to its current location,
a loyal and consistent customer base, and the already implemented delivery of merchandise and on
a weekly basis. We also have weekly ads, a well established Facebook page, and frequently
monitored and updated website. By using these already existent resources, this will eliminate
several start-up costs and tasks associated with opening a new business.
4
Market Analysis Summary
The ice cream extension to Neckers Company General Store will be produced and sold on site at
8742 West Main Street in Clymer, New York. The store’s location is directly in the center of town,
approximately 15 minutes from surrounding towns of Sherman, Findley Lake, and Panama, NY,
and 10 minutes from Corry, PA.
Homemade ice cream is an ideal business for Neckers Company, along with this particular area,
because of the diverse potential market segment, tourist areas such as Peek’n Peak Resort and
Findley Lake, and current lack of yearlong, frozen dessert product availability.
2.1 Market Segmentation
According to Ibisworld.com, nearly 96% of households purchase ice cream. In 2012, scoop shops,
gourmet ice creameries, hotels, cafes, restaurants, and bars offering varieties of ice cream products
accounted for about 47.5% of market revenue ($3.99 billion.) This segment’s share was increasing
up until the recession, when consumers reduced their inclination to eat away from home.
Consumers began to turn to bulk ice cream as a more cost-effective purchasing strategy.
Fortunately, since 2009, food-service demand for specialty ice cream has been slowly recovering,
and is predicted to see revenue growth and profitability as income rises and product innovation
continues.
Based on this information, the market can be divided up into those who purchase ice cream in bulk
at grocery stores, and those who participate in “impulse” or “scoop” buying. While Neckers
Company already offers the bulk and carton ice cream in its freezer section, this brand extension
will be sold by the scoop at a counter inside the establishment and from a walk-up window on the
northeast side of the establishment.
The ice cream shop will target all segments of the Clymer/Western New York population:
children, teenagers, and adults. Because a large portion of the Clymer Township is made up of the
Amish community (approximately 33% according to the town clerk), Amish will also be a large
target market. Based on current ice cream novelty sales, such as ice cream sandwiches, fudge bars,
popsicles, etc., implementing the homemade ice cream shop will target the same type of consumers
coming into Neckers Company: those looking for a dessert that is easily accessible and ready to be
eaten immediately.
2.2 Target Market Segment Strategy
The ice cream extension to Neckers Company will target the low-to-mid-income consumers who
are looking to buy ice cream from a convenient location, without having to compromise for a
lower quality product or higher price. The homemade ice cream will come in an assortment of
approximately 20 premium and gourmet flavors, catering to all tastes.
5
In the overall ice cream market, including bulk ice cream suppliers, small shops, creameries,
grocery stores, and so forth, the main market share holders are Nestle, Dean Foods Company, and
Unilever. Together, they control 54.5% of the overall market. That leaves 45.5% for all other
competitors. According to Ibisworld, the states of New York and Pennsylvania hold 11.9%
collectively of the overall market. These are the potential regions we’d be selling to. Of the
$21,603,855 of total revenue held by these two states, we would anticipate an absolutely minuscule
market share percentage. If we were to aim for .001%, that would be $21,603.55 in revenue for
one calendar year. If we sold an average of 23 ice cream cones per day, at an average cost of $2.60
a piece, we could make this quota. Overall, this would be a mere .00003% of the United States ice
cream market. While crunching numbers and increasing overall national market share is important
to many establishments, Neckers Company’s main goal would be to bring ice cream to local
consumers, filling an unmet need in the area. By entering this currently unoccupied market,
Neckers Company can potentially control 100% of Clymer’s market share. Our future goals do not
entail mass production or exporting to other states and retailers across the nation.
2.3.1 Main Competitors
Currently in Clymer, New York, there is no where community members can go to buy hard ice
cream in a cone or dish form. The Dutch Village Restaurant, also in the center of town, has soft
serve chocolate and vanilla ice cream, but they are most famous for their homemade pies, leaving
the need for an ice cream “shop” in Clymer unmet.
During the summer months, Addie’s Ice Cream shop would be our largest competitor, located 15
minutes away in Findley Lake. The type of homemade, scooped ice cream sold at their
establishment will be very similar to ours, but our prices will be competitive. Essentially our profit
should be higher, once a loyal customer base is gained, because all overhead expenses will be
shared with the entire business. Their main target market is tourists coming to the lake for
vacations during the summer months, while ours would be more of the everyday customers, kids
stopping in after school, and families going out for dessert after dinner or sporting events. With
Neckers Company already having an existing customer base, it will be easier to obtain consumers
for the new product. The potential to target some of Addie’s customer base exists as well, because
several Findley Lake tourists already visit our store to grocery shop. The store has an advantage as
a “one-stop-shop” where customers can buy groceries, fresh cut meat, produce, gift shop items,
order subs and pizzas, or pick up a couple Clymer, NY, souvenirs, all in one place. Adding this ice
cream extension creates one less stop customers have to make somewhere else, upholding our
recently developed catch phrase as “the small town store, with so much more!”
Other competitors in the ice cream and dessert market would be Dairy Queen and TJ’s in Corry,
PA, and Coldstone Creamery in Lakewood, NY.
6
2.3.2 Competitor Breakdown
1. Dutch Village Restaurant
 Strengths- The Dutch Village has an established customer base with loyal regulars
that attend every day. Their pie is excellent quality and prices are reasonable.
 Weaknesses- Their main weakness is the lack of hard ice cream completely. They
attempted to serve vanilla hard ice cream years ago, and then eliminated it from
their menu because it did not sell. Their soft serve ice cream that is still on the menu
is very good, yet flavors are limited with only chocolate and vanilla.
2. Addie’s Ice Cream
 Strengths- Addie’s has excellent ice cream made with the highest quality Upstate
Farms super premium ice cream base. Forty flavors of premium, specialty,
homemade ice cream are offered at a convenient location for tourists staying on
Findley Lake. Addie also distributes ice cream to 4 other vendors in the area during
the summer months.
 Weaknesses- Addie, the owner, struggles to keep freezers stocked with product. Her
inventory management skills are lacking, along with her employee scheduling
skills. Several employees have left because of her poor management skills. Prices
are moderately high, due to the target market of tourists. Also, Addie’s is not open
year-round, they are simply a seasonal business.
3. Dairy Queen
 Strengths- Dairy Queen is a popular brand that is recognizable across the United
States. All locations serve the same products & flavors of desserts, sundaes,
milkshakes, and blizzard treats. They also accommodate special occasions with ice
cream cakes. On top of that, Dairy Queen is also a food distributor.
 Weaknesses- Dairy Queen’s location in Corry is inconvenient for many Clymer
residents. They also have moderately high prices and are not open 12 months of the
year.
4. TJ’s


Strengths- TJ’s has a well established customer base and offers a video arcade,
along with food with their ice cream distribution.
Weaknesses- TJ’s is not open year-round and has been going down hill in quality
over the past few years. They once had a putt-putt course and sand volleyball court
that have both since been neglected, lacking upkeep, causing wasted potential
advantages.
5. Coldstone Creamery
 Strengths- Coldstone is a well established chain and offering several customizable
options that are mixed together in a unique way on a cold surface, or, “cold
stone.” Many Coldstone Creameries are also paired with Tim Horton’s Cafés &
Bakeries in which consumers can purchase food, coffee and other specialty café
drinks, bakery items and so forth. Coldstone locations that are paired with Tim

Hortons are open 24 hours a day, seven days a week, and all Coldstone
establishments are open year- round.
Weaknesses- For Clymer residents, Lakewood is at least a 25 minute drive. It is a
convenient location if you’re shopping or out to dinner in Lakewood, or if you are
a Lakewood resident. But for the people from our area, it’s not somewhere you’d
drive to just to get ice cream. Coldstone’s prices for their signature ice cream can
range anywhere from $4-7, depending on the size you choose, making it a very
expensive treat!
2.3.3 Business Participants
Because Neckers Company is an already established business, relationships with wholesalers and
other various retailers have been made and are securely maintained. Upstate Farms will be the
business providing the ice cream base and milk products. An advantage to using this company is
that the local farmers’ milk (that is sold to Upstate) will be used in production, giving our ice
cream a home-grown and local promotional strategy. This differentiates the homemade ice cream
from regular bulk ice cream sold in stores, or the ice cream sold at several of our competitors.
In addition to Upstate Farms, other relationships have been established with local businesses such
as Maplevale Farms, Olean Wholesale, Carris Fruit Farm and other various fruit farms in
Wattsburg and Waterford, Pennsylvania. Ingredients that will be added to the homemade ice cream
will range from fresh fruit to chopped candy bars. Any ingredients needed to further production are
already available through these relationships, making starting this extension at the store a much
easier process.
8
Strategy and Implementation Summary
The ice cream will be made with a 16% butterfat base from Upstate Farms Dairy. The Federal
Department of Agriculture requires, at minimum, a 10% butterfat base when making hard ice
cream. One of the biggest factors in ice cream’s texture is the amount of butterfat used in the
product. If there is not enough butterfat, ice cream tends to taste icy and not very smooth. Using
the most expensive and highest butterfat content mix our supplier carries will ensure the
smoothest, richest, and creamiest texture possible.
Display freezer cases, an industrial mixer, various bins, tubs, ice cream scoopers, sinks and other
renovations will be added to the already existing establishment at Neckers Company General
Store. We plan to buy as many used pieces of equipment as possible, in an attempt to lower our
start-up costs, from a distributor in Columbus, Ohio. Biannually we attend a craft show where
several vendors sell an array of food service products. Food industry vendors have sold us several
items in the past when we opened a pizza/sub shop back in 2009. Anticipated costs will be
determined in the financial portion of this report.
3.1 Marketing Strategy
Neckers Company’s overall marketing strategy will be to create a product of the highest quality,
offering unique and original flavors that are more than just plain old vanilla, bringing a year-round,
hard ice cream retailer to the Western New York and North East Pennsylvania area. With tourist
attractions in Findley Lake and Peek’n Peak resort just minutes away, Neckers Company will be
able to accommodate those visiting for short periods of time, along with local residents. Customers
will be reached through gateways such as fliers, newspaper ads, and grand opening events.
3.1.1 Promotion Strategy
Neckers Company will promote ice cream to customers through:
1. A sales flier already produced by Neckers Company on a weekly basis that is
distributed on site and in the Corry and Jamestown newspapers.
2. Advertisements announcing the opening printed directly in local newspapers such as:
The Corry Journal, Jamestown Post Journal, the Jamestown Gazette, or even the Penny
Saver.
3. Neckers Company will run promotions such as flavors of the month or frequent buyer
cards, where you buy 10 cones, then receive one free.
4. Signs and fliers will be posted around town and in surrounding areas in heavy traffic
locations. (For example: Post Offices, banks, doctor’s offices, vet clinic, etc.)
5. Announcements and promotions can be added to our already existing and maintained
Facebook page and website that are frequently visited by our current customer base,
and are easily accessible to potential customers, as well.
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3.1.2 Distribution Strategy
Major marketing will be conducted through newspaper advertisements and the already existing
marketing strategies implemented by Neckers Company General Store on a weekly basis. Costs for
marketing distribution will be low because of the business’s ever present marketing operations.
3.1.3 Expected Pricing
Ice cream will be offered in dishes & cones at the following anticipated prices:
Kiddie (4 oz.): $1.50
Small (6 oz.): $2.25
Medium (8 oz.): $3.00
Large (10 oz.): $3.75
An additional cost of 25¢ will be added for extra toppings such as:
-Sprinkles
-Peanuts
-Gummy Bears
An additional cost of 50¢ will be added for toppings to create sundaes:
-Various Fruit Toppings
-Hot Fudge
-Chocolate Syrup
-Peanut Butter Sauce
-Carmel
3.1.4 Sales Forecast
The extension will be up and running after renovations are made and the store is fully equipped to
begin ice cream production and sales. Also, training will be needed to learn optimal ice cream
making techniques. For a cost of $1,890, we can attend a week-long ice cream “short course” in
January of 2013 at Penn State University, teaching the ins and outs of ice cream production: from
cow to cone. Anticipated consumer sales are set for April 2013 (or sooner if construction is
completed before the targeted date)
Sales are anticipated to have some kind of seasonality, increasing during the warm summer
months. In order to meet the anticipated market share of .001%, we’d need to sell an average of 23
ice cream cones per day. Neckers Company averages around 300 customers a day. If we aim for
10% of these customers, following normal trends of new product sales at our store, we would sell
30 ice cream cones, easily meeting the required amount. Assuming sales will fluctuate, this quota
will be not be met some days, yet it will exceed the needed amount on busier days of the week,
such as weekends, and warmer times of the year. A formal forecast that demonstrates how this
quota will be met is included in the Financials portion of this business plan.
10
3.1.5 Growth Potential
Depending on popularity, Neckers Company has several opportunities for growth. Much like
Addie’s does in the summer months, Neckers Company could sell ice cream at other locations,
such as Peek’n Peak Resort or possibly some kind of kiosk in Findley Lake. We would also have
the option to sell ice cream in take home containers, increasing the target market from simply
impulse, or scoop buying, to the sector of bulk and in-home consumption.
In addition, production may continue to grow and eventually outgrow the space available at
Neckers Company. Originally, ideas of opening a production building on the property of Carl
Neckers, where equipment could be run by sustainable methane energy, were tossed around. Given
the circumstances that production outgrew the store, the option of an exterior location just one mile
west of town is very feasible. This would reduce our carbon footprint, open up potential for
government grants for the use of green energy, make productivity and efficiency increase, as well
as create a better location for the exporting of products to other vendors. This potential strategy
would obviously be in the extensive future, after significant revenues have been made.
11
Management Summary
Neckers Company will utilize current employees to operate the ice cream counter, and possibly
hire 1-2 new employees if needed, especially during the busiest summer months. After
establishment, the business will require minimum daily supervision, due to ice cream scooping
being relatively simple.
4.1 Organizational Structure
Approximately 15-20 total employees already staff Neckers Company General Store. Typically, 710 employees are trained to work in our sub and pizza shop counter. Because the ice cream
window and counter will be located in the same kitchen vicinity once remodeling is done, these
same employees will be trained to scoop ice cream. Making the ice cream will be another story:
Kathy Neckers and Hannah Neckers will attend Penn State’s ice cream short course, or seminars
given through Olean Wholesale or Maplevale Farms, and learn the art of homemade ice cream
production. If needed, other employees can be trained in the ice cream production process, but to
start off, only two people will be in charge of making product.
The ice cream extension will be opened during some of the normal hours of operation currently put
in place at the store, in addition to extended hours. Because of the implementation of a walk up
window located on the outside of the store, the business can still operate even when the rest of
Neckers Company is closed. While Neckers Company is not opened on Sundays, the ice cream
shop will be, to accommodate the weekend crowd. Anticipated hours are as follows:
Sunday:
Monday:
Tuesday:
Wednesday:
Thursday:
Friday:
Saturday:
1 PM to 9 PM
11 AM- 8 PM
11 AM- 8 PM
11 AM- 9 PM
11 AM- 8 PM
11 AM- 10 PM
11 AM- 10 PM
8 hours
9 hours
9 hours
10 hours
9 hours
11 hours
11 hours
67 hours total
12
4.2 Management Team
Kathy Neckers and Hannah Neckers will be in charge of the majority of the ice cream shop’s
operations. Management work will be divided and shared between the two of them as follows:
Budget Control and Strategic Planning: Kathy






History Based Budgeting
Program Budgeting
Advertising Budgeting
Long-Range Planning
Total Quality Management
Operational Planning
Supply Chain Management: Kathy and Hannah





Ordering supplies from Wholesaler and Suppliers (Olean Wholesale, Upstate Farms,
Maplevale Farms, Carris Fruit Farm, Brigottas, etc.)
Demand Planning and Forecasting
Managing Efficiency
Focus on Customer Demand and Habits
Practice of Quality Control and Consistency
Personnel Management: Kathy and Hannah







Management by Goals and Objectives
Management by Walking Around
Emphasis on Customer Relationships
Training Employees
Specific lists for Opening/Closing procedures
Development of Weekly Employee Work Schedules
Payroll
Public Relations and Marketing: Hannah







Advertising in Weekly Ad, Newspapers, Penny Saver, etc.
On-Site Signs & Promotions
Social Media Management- Website, Facebook Page, Twitter Account
Brochure Design & Distribution
Marketing Research & Data Analysis
Consumption Patterns/Popular Products
Customer Outreach to Surrounding Areas
13
Community Leadership: Kathy


Donation to Local Causes/Educational Programs
Attending Monthly Clymer Business Association Meetings
4.3 Personnel Plan
Kathy and Hannah are already paid a salary at Neckers Company, so their additional personnel
cost to the store would be $0. Between Hannah and Kathy, approximately 50% of the operating
hours would be covered where extra personnel would not be needed. This leaves an additional
1,742 hours of operation in one year where other employees are needed. By hiring high school or
college age students to cover the additional hours, we can pay them minimum wage ($7.25), to
keep personnel costs to a minimum. Additional employees monthly personnel cost estimates are
included in the following table:
Personnel Plan
Year 1 Year 2
Year 3
Kathy Neckers
$0
$0
$0
Hannah Neckers
$0
$0
$0
Additional Employee 1 $6,314 $6,314
$6,314
Additional Employee 2 $6,314 $6,314
$6,314
Total Payroll
$12,628
$12,628 $12,628
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Costs Summary
Several costs have been calculated in order to determine profits for the financials portion of this
business plan. While creating a forecast, it must be determined how much making the ice cream
will cost, and how much profit can be produced from each cone sold.
One gallon of 16% butterfat ice cream mix from Upstate Farms costs $9.32. Due to overrun (air
within the ice cream) in the production process, this will produce twice as much finished product.
Therefore, each gallon made will cost $4.66. By averaging out the sizes of every size ice cream
cone (4 oz., 6 oz., 8 oz., 10 oz.) an average 7-ounce ice cream cone was used in the forecast.
Approximately 18 of these 7-ounce scoops can be averaged per gallon of product. This creates a
$0.26 average cost per scoop. By factoring in other costs such as a napkin, cone or dish, and spoon,
a total average cost of $0.45 was estimated for each unit sold.
Supply costs were budgeted at $500.00 to cover kitchen utensils needed for start up. Examples of
this include: ice cream scoops, cone dispensers, spatulas, cleaning supplies, ice cream pales, jars or
bottles to store toppings, and other various kitchen items similar to these. Larger equipment was
also accounted for in start up costs: Two large display cases-$2,495 each, and a hard ice cream
mixer at $18,195. Walk-in freezer space is already available on the premises for extra ice cream
storage. The total remodel, which would cover access counters, cupboards, sinks, walk-up
window, neon sign, and everything in between, was budgeted at $25,000. Despite a contractor
giving us an estimate at $20,000, we decided on budgeting a little higher just to cover any
contingency fees that may arise during our remodel project.
Other costs entailed with starting a business involve marketing and advertising costs. Neckers
Company already has a developed and maintained website and Facebook page, eliminating the
costs of starting a new one up. We also run a weekly flyer advertising upcoming sale items. Ads
promoting the ice cream shop could easily be added to the current flyer. All together, a mere
$250.00 was budgeted for advertising costs, covering any flyers posted around the Clymer area, or
radio and newspaper ads run within the first few months of business.
As previously stated in the personnel plan, two workers could potentially be hired to cover the
remaining 1,742 hours of operation not being “boot-strapped” by Hannah or Kathy Neckers. The
totals for this cost came from paying employees a minimum wage of $7.25, totaling approximately
$12,628 in payroll costs.
Lastly, estimated operating costs, such as electricity and water, were determined by taking the total
price of product and adding an additional 15%. This figure was formulated from the current
operations in place at Neckers Company.
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Financial Plan
 Neckers Company plans to initiate and fund start up costs through its retained earnings.
Growth will be financed mainly through cash flow. We realize this may lead to a slower
growth plan.
 By receiving orders on a weekly basis from wholesalers, Neckers Company is given the
ability to order inventory for production of ice cream as demand changes and deems
necessary. Minimal inventory will need to be stored on the premises, lowering overhead
costs, and chance of spoilage.
5.1 Important Assumptions
1. The ice cream shop extension will be funded internally through the retained earnings from
Neckers Company’s previously established departments and operations. This eliminates the
need for financing through a bank, diminishing the excess cost of interest rates.
2. Monthly sales will be our largest indicators for forecasting business. Some seasonal
variations will be present, mostly during warmer-weather months. In the forecast, the
months of April through October are anticipated to produce the highest sales.
3. Because Neckers Company is an already established business, several financial factors are
left out of this business plan. Information on funding from outside sources, such as funding
from investors, will not be needed. Also, burn-rate numbers, rent, licenses, insurance, legal
or professional fees, installation of credit card or cash register systems, and so forth, are all
already covered or in use at the current establishment.
4. The Neckers family is infamously known as being conservative with numbers. That being
said, forecasts are very conservative. Potential for more profitable first year revenues are
possible, along with higher growth rates in the years to follow. We run our company with
the mindset of being prepared for the worst conditions, yet hoping for the best.
5.2 Forecast
The following page includes the forecasts for the first five years of business formulated in
Microsoft Excel. There is a break down in quantities sold during weekends and weekdays of
various months, average cost per cone sold, revenues generated from the forecasted sales, total
costs of product per month, fixed costs (which was generated by adding operating costs with
employee expenses), a net profit, and the number of gallons needed each month. At the bottom of
each column is the projected yearly total.
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5.3 Start-Up Costs
The following chart demonstrates the costs involved in starting up the business. Initial inventory
such as ice cream mix used in production, napkins, cones, and various toppings were all calculated
based on simply the first month’s forecast.
Start-Up Cost
Machine
Remodel
Ice Cream Mix
Napkins
Cones
Toppings
Kitchen Supplies
Coolers
Marketing/Advertising
Building Permit
Total Start Up
$
$
$
$
$
$
$
$
$
$
$
18,195.00
25,000.00
214.36
10.00
84.50
257.50
500.00
4,990.00
250.00
50.00
49,551.36
5.4 Break Even Analysis
The following numbers represent a break even analysis for the first five years of business, based on
annual fixed costs, divided by the contribution margin.
Year One:
Year Two:
17
Year Three:
Year Four:
Year Five:
18
5.5 Profit Analysis
The following chart demonstrates the anticipated profit analysis, based on the forecast for the first
five years. From year 1-2, an increased growth rate of 20% is forecasted. The following years
account for a 5% increase (Year 2-3), 4% increase (Year 3-4), 3% increase (Year 4-5).
Profit Analysis
$25,000.00
$20,000.00
$15,000.00
Net Profit
Linear (Net Profit)
$10,000.00
$5,000.00
$0
1
2
3
4
5
6
Year
19
5.65 Payback Period
In conclusion, after calculating a forecast, profit analysis, and start-up costs, the following chart
demonstrates a yearly break down of when the ice cream extension will pay itself off.
Pay Back Period
$ 49,551.36
$ 37,991.08
$ 21,593.15
$ 3,743.93
$(15,324.38)
Initial Cost Year 1
Costs End of Year 1
Costs End of Year 2
Costs End of Year 3
Profit End of Year 4
3.196 years to pay off initial costs
(Beginning with an initial start-up cost of $49,551.36, it should take approximately 3.2 years to pay off
initial costs. This figure was calculated by taking the net profit per year, minus the initial cost balance
remaining. )
Works Cited
Duerr, Charlie. "Ice Cream Trends: Restaurants Go Beyond Vanilla." Nation's Restaurant News.
N.p., 26 July 2012. Web. 3 Mar. 2013.
"Ice Cream and Frozen Desserts Market Report." Highbeam Business. Cengage Learning, 2013.
Web. 1 Mar. 2013.
"Ice Cream Production in the US." Ibis World (2012): 4-32. Print.
Williams, Neil. Ice Cream Business Guide. Turnkey Parlor, 2013. Web. 12 Feb. 2013.