OLIVER’S PASTRY Business Plan CONTENTS 1. 2. 3. 4. 5. 6. 7. 8. EXECUTIVE SUMMARY MISSION STAEMENT PRODUCT DESCRIPTION ADMINISTRATION MARKET ANALYSIS BUSINESS CONCEPT GOALS AND OBJECTIVES FINANCIALS a) Start up costs b) Eight hour production cost(1day). c) Twelve Sales forecast d) Twelve months cash flow e) Twelve months Profit & Lost f) Five year financial plan 1. 2. 3. 4. 5. 6. 7. KEY SUCCESS FACTORS SALES AND MARKETING EQUIPMENT NEEDED INGREDIENTS LISTING PAYROL LISTING PRODUCTION LINE MODEL KEY NOTES Executive Summary Oliver’s Pastry is a producer of high end quality rum cakes as specialty tourism product. We also produce snacks and drinks for schools with a reputation for integrity, transparency, trust and quality customer service backed by excellent management concept. By year two annual sales will increase to well over 67 million dollars. Oliver’s Pastry was formed by Oliver Fagan as a Sole Proprietorship in December 2004. In 2006 a combination of his baking skills, and hired partner Nadia Fagan and succeeded with Gross Sales of $366,000.This business they operate on a part time basis as they were full time employees in hospitality. The Company experienced steady growth since its inception in 2004. In 2005 Oliver’s Pastry was selected to be the supplier of authentic Jamaican delicacies to the Ritz-Carlton Golf & Spa Resort, Rose Hall for their guests recognition program. Other souvenir outlets sought to have these products as well both locally and overseas. The Company has as its address a rented premises at 124 Armstrong Terrace Coral Gardens, Montego Bay, St. James. Its’ activities witch falls under food Industry Classification under the Public Health Act as bake and pastry shop. OLIVER’S PASTRY is involved in three major activities: 1) RUM CAKE (SPECIALITY PRODUCTION). 2) BAKED SNACKS FOODS, 3) DRINK MANUFACTURING. Sixty percent of gross sales are from baked products (rum cakes and snacks) with the remaining 40% is drink manufacturing. At the moment our anticipated employment would be six (6) permanent employees on the payroll and other sub-contracted workers including subcontracting companies for distribution. The company's short term objectives (within the next year) are to acquire equipment to enhance our rum cake plant, increase activity in all areas and to achieve annual net profit after taxes of over $9,000,000 annually by 2010. Its long term objectives are: to maintain the level of current business growth achieved up to 2010 and then to move into expansion restorations, acquiring up-dated machinery, more overseas markets and increased production for the hospitality market while seeking to cover the Island’s schools with snacks. To begin implementing these plans and objectives the company needs: 1. A loan of $3,000,000. This loan to be used for current near term expenses including buying equipment, inventory and to have our products assessed by the JBS. It will be repaid within four years. 2. A line of credit of $500,000 to take advantage of discounts available, avoid associated penalties and expand into high profit areas requiring positive cash flow. The prospects for OLIVER’S PASTRY’ continued growth is excellent, with over 2,000 new hotel rooms being built with other contracts underway creates many prospective clients for customized products. The company's overall objective is to satisfy that market segment that demands integrity and superior quality products, and to maintain a steady growth in sales volume that will sustain the company for future years. Oliver’s Pastry has enhanced it’s reputation to the point where the company is regarded by many as the recommended choice with their clients due to the excellence of its products and services. Market research shows that tourist arrivals will increase by over 2,000,000 between 2007 and 2010. This increase will bring about an increase of over three billion dollars. This increase gives the area existing businesses a potential remodeling market opportunity. Estimates published by the ministry of tourism, 2007, indicate that an additional 20,000 new job opportunities will be created in several areas of the industry between 2007 and 2010. OLIVER’S PASTRY intends to pursue this opportunity to make an input and to penetrate market vigorously. (See sales and marketing for marketing strategy). Financial Objectives The financial objectives of OLIVER’S PASTRY over the next five years are as follows: To earn $9,000,000$ to $11,000,000 2008 to 2009 gross revenue with a gross profit margin of 55% and a net income of not less than 10%. annually. (see financials for clarification) Please review the enclosed business plan and loan proposal and of course feel free to ask for any additional information or explanations you may want. I will make myself available at your request to arrange an appointment so that we can discuss the loan in person. I look forward to a mutually profitable relationship with JAMAICA NATIONAL SMALL BUSINESS LOANS. Sincerely, Oliver Fagan. Executive Summary continue A line of credit of $470,000 to take advantage of discounts available, avoid associated penalties, and expand into high profit areas requiring positive cash flow. The prospects for OLIVER’S PASTRY’ continued growth is excellent, with over 2000 new hotel rooms being built with other contracts underway. With many prospective clients for customized products. For equity the company has assets of $2,758,000 (see Balance Sheet as of year one. Additionally we are expecting to see a growth by year 4 to $38,000,000 total assets. The company's overall objective is to satisfy that market segment that demands integrity and superior quality products, and to maintain a steady growth in sales volume that will sustain the company for future years. Oliver has enhanced his reputation to the point where the company is regarded by many as the recommended choice with their clients due to the excellence of its products and services. Market research shows that the tourist arrivals will increased by over 2,000,000 between 2007 and 2010. This increase will bring about an increase of over three billion dollars. This increase gives the area over 128,000 existing business as a potential remodeling market. Demographic estimates published by the ministry of tourism, 2007, indicate that an additional 20,000 persons will be employed between 2007 and 2010. OLIVER’S PASTRY intends to pursue this market relentlessly. (See sales and marketing for marketing strategy). Financial Objectives The financial objectives of OLIVER’S PASTRY over the next five years are as follows: $9,000,000 to $11,000,000 2008 to 2009 respectivley. Net Income after Tax and will exceed the $11,000,000 by year five while maintaining a gross of between 55% and 60% annually. (see financials for clarification). For equity the company will realize assets of over $6,000,000 as of year one. Additionally we are expecting to see growth by year 4 to over $39,000,000 total assets and liabilities that should reflect an equity exceeding $30,000,000. (See Balance Sheet) Please review the enclosed business plan and loan proposal and of course feel free to ask for any additional information or explanations you may want. I will make myself available at your request to arrange an appointment so that we can discuss the loan in person. I look forward to a mutually profitable relationship with JAMAICA NATIONAL SMALL BUSINESS LOANS. Sincerely, Oliver Fagan. Mission Statement “OLIVER’S PASTRY” pledge to be a global leader in producing authentic Jamaican delicacies of the highest quality and value pricing, with emphasis on product quality, unmatched customer service, employee and owners benefits and to enhance the lives of each individual involved with this company. Through trust, integrity, honesty and loyalty with all transparency And to be a good cooperate citizen. PRODUCT DESCRIPTION 09 SNACKS JAMAICAN BANANA BREADS WHOLE WHEAT REGULAR RUM CAKES FRUIT CAKES LOAVS AND SWEETDOUGHS Drinks Flavored milk drinks. Fruit concentrate drinks. Fresh fruit drinks. Low sugar drinks. Jamaican Easter bun The Administration Team OLIVER P. FAGAN: Managing Director & Chief Baker Responsible for Product Quality and Production. Diploma Restaurant and Hotel Management. Associate Degree Hospitality Management Over ten years five diamond food service experience. Very experienced entrepreneur in business development and operations. Oliver is also managing director and chief consulting officer for Global Hospitality and Restaurant Consulting Services that offer services in other Caribbean islands. Mrs. Nadia Fagan : Director of Sales, Nadia has been a top producer in sales for AAA five diamond resorts and has a very high end market experience, with this experience we are expected to penetrate the overseas market by leaps and bounds as most of these leads are connected to large groups and companies that travels to Jamaica for incentive trips on a regular basis. Market Analysis Our flagship product (Petro’s Authentic Jamaican Rum Cake) is tourism related and in so being we will be targeting the Hotels, Restaurants, Cruise Ships, Gift and Souvenir Shops, with overseas market prospects. Being a tourism related product the development of new mega size resorts expands retail tourism shopping, this gives an expected economic growth that will bring more visitors to the island. This will bring an increase of millions of dollars in spending on genuine authentic products. Through the Jamaica business development agency authentic jamaican products are In demand for the tourism market. None other such product is available on the island that will be offering the oportunities we do for our clients so we will have a dominance of this market and is expected to introduce other exiting products within the first year of operation. We will also be targeting the overseas market. Our overall annual expected growth is approximately 30% to 40% over the first four years. This will be closely monitored with continued market and product research programs. From site visits to prospected overseas clients there is a demand for Jamaican authentic products in the caribbean populated areas (New York area) (please see customer listings). As for our school snack and drink this market has been ignored by producers and suppliers. In and around Montego-bay and its environs there are over 40 primary and secondary schools that consumes over $10,000,000 dollars worth of product weekly without mentioning basic schools, of that market we are expected to take a share of 5% in the our initial stage (year one) and up to a 20% by year two (2) with an eventuality of major market share as we will be focusing on maintaining this market share with improved products and services over time. Business Concept Our products will be done in small batches to ensure the finest ingredients and detailed care is taken during the process and will be carefully packaged with the latest technology to ensure wholesomeness, the natural preservation stays and presentation will depict the high quality product and authenticy of the Jamaican culture (Rum Cake). This product will be marketed as a specialty gift item in resorts and gift shops and as a great dessert menu item for fine-dining and casual restaurants. Seasonal specialty products will be available to visitors all year round for the experience and for Jamaicans who want them to take them overseas (Jamaican Christmas cakes) School snacks and drinks will be our secondary products as these products takes less effort and time to produce larger quantities and these are more stabled year round and will be done to maximize the plants capacity and to make available to school community more nutritious and healthy drinks and snacks at better prices. Special assistance will be given to customers (retailers) in their areas of need in carrying our products . Suppliers, employees and all who we associate with will be treated with all due respect and acknowledgment so as to retain high customer base, employee retention and development and to maintain our commitments as good corporate citizen. Goals & Objectives Our goals and objective are combined with the crave for economic contribution and a high profit driven operation through. 1. Creating employment opportunities directly and indirectly. 2. Sales over $60,000,000 in year one and over $75,000,000 by year three. 3. Gross profit margin higher than 40% of revenue. 4. Net income not less than 10% of revenue. 5. Giving Schools a new approach in providing for their population healthy and reasonably priced snack items. 6. Expansion and upgrading to a multi product bakery for the hospitality industry and the island’s schools with the most modern equipment and technology available in the industry within the next five years. Financials START UP EXPENCES FIRST SIX (6) MONTHS CASHFLOW TWELVE MONTHS CASHFLOW TWELVE MONTHS SALES FORECAST TWELVE MONTHS PROFIT AND LOST BREAK-EVEN ANALYSIS FIVE YEAR FINANCIALS & PROFIT PROJECTION. Key Success Factors 1. 2. 3. 4. 5. 6. 7. 8. 9. As for a company fulfilling our promise we will execute our processes with completeness, confidence, reliability, integrity and trust. Develop new products over time to maximize our capability and capacity. Develop innovative and practical marketing strategies through research and technology. Continue to improve our processes and production to increase and maintain the highest quality product and profit margin to ensure the highest level customer satisfaction and company profitability. (Keep listening to our customers). Manage our resources with actual, realistic and fair judgment. Ensuring that our schools get better quality service to help them better serve their population. Instill the wellbeing of our Owners, Employees, Customers, Suppliers, Financiers all who we do business with. Maintain the high quality product standards. Our relentless effort for new markets on the global seen and establish international food certifications for access to the international market as is required by our enquiries. SALES & MARKETING. Export/Overseas Market We will relentlessly pursue prospective opportunities by ensuring we are ISO and JBS certified and we will be also doing direct customer contacts along with website marketing. Onsite sampling sessions where applicable. Local Market Advertisements in print and electronic media Tasting sessions at major tourist towns With sample sizes available for retail outlets weekly. Special incentive for schools and support for education needs. Better pricing for schools and retailers who sells to students. EQUIPMENT NEEDED 1 Convection double Oven $408,000 1 Kwickpack Stainless Steel L-Bar shrink tunnel with console 15”x 9”-H opening $390,000 1 Vacuum pack Machine 110 Volts $324,000 200 small baking tins $ 35,000 100 medium baking tins $ 29,000 100 Large baking tins. $ 30,000 1 U B-20 Bar sealer $ 60,000 2 Stainless steel Table 8’x 4’ $ 57,000 Bag Juice Machine/ Mixing tank $350,000 2-22 cub ft. Freezers $120,000 50- Plastic crates $ 50,000 Total -----------------------------$2.374,000 INGREDIENTS LISTING RUM CAKE MIX FLOUR EGGS OILS RUM WINE FLAVOURINGS SYRUPS RISING AGENTS Payroll Listing PERSONEL WEEKLY MONTHLY ANNUALY Manager C.E.O. $25,000 $108,334 $1,300,000 Sales team $5,122 $22,195 $266,344 Mixer x2 $9,000 39,000 468,000 Packer $4,500 19,500 234,000 General helper $4,500 19,500 234,000 Driver $5,122 22,195 266,344 TOTAL $53,244 $230,724 $2,768,640 Production line model REQUIRED ROOM SIZE 50’X30’/ 1600-SQFT. Delivery area Office area Raw materials store Room 10x10 Mixing 7-10min Bag juice area 3tub Washing sink Finish goods Portioning 5min Storage for finished goods Baking 45mins Shrink wrap 150phr Cooling 11/2 hrs Vacuum sealing bags 150phr Placed in tins Bagging 150phr KEY NOTES Required production space 1000sqft. Production capacity 112kgs cake = 125 - 1kg cakes 250- 1000gms “ 500- 500 gms “ per eight hour shift. Juice plant will produce over 300 bags per hour. With an average breakeven point of $20,000,000 annually we will maintain our cost and operation expenses at (COG @50%-55%)AND others at 10%-12% so as to maintain a gross profit of 45%-50% and a net of not less than 10% annually. As a proactive measure we will anticipate an inflation effect of a 4% increase in our price on average through to year five and an average 4.3% on our expenses over the same period. On financial security we will seek to secure ourselves a permanent home office by investing in realestates within a five year period and to increase our production and to secure our financial standings for the benefit of our associates. We will overtime purchase equipment as soon as we realize it from our profits in this manner we will not have to close for any period of extended time to disrupt our production flow Some of the items considered, 1) Freezer trucks 2) Baking equipment 3) Improved Packaging equipment. Our operation and facilities will be fully inspected and certified by the health regulations of the authorities (ministry of health). We will control the production line at 85% to 90% capacity this will enable for the equipment to retain their wear and tear advantage prevent over-heating give more time for proper hygiene maintenance and also more time to service our customers the way they need us. All milk products (drinks) will be delivered at controlled temperature to ensure freshness. All materials needed are readily available locally so no importation is required. Shrinkage represents damaged or returned goods for replacement or refund for this we allotted ourselves 2% of revenue in that respect. Transparency will be our gateway to the public. All our assumptions and calculations are based on information from operation experience and actual observations and information from government agency like the business development agency (jbda) website relative to the tourism sector and local observation of the schools snack operations.