Business Plan
Pizza Bella, Inc.
2707 Congress St * San Diego, CA 92110 * Phone 619-692-4333 * Fax 858-726-7200
AGREEMENT OF CONFIDENTIALITY
I agree that reading of this Business Plan is strictly limited to me as authorized by
Franci Kasawdish, Robert Kasawdish and Jason Qasowdish and Pizza Bella,
Inc. (the Company). I agree that I shall not divulge or reproduce the content of
this Business Plan without the written consent of the Company.
I understand that any information provided in this Business Plan is in all respects
confidential in nature, other than information which is in the public domain
through other means. I agree not to disclose any information without the express
written permission of Franci Kasawdish, Robert Kasawdish and Jason
Qasowdish and Pizza Bella, Inc.
Upon request, I will return this document to Franci Kasawdish, Robert Kasawdish
and Jason Qasowdish and Pizza Bella, Inc.
This Business Plan includes “forward-looking statements and projections.” All
such statements and projections within this Business Plan, other than statements
of historical fact, regarding Pizza Bella, Inc. or its strategies, plans, objectives
and expectations, are all forward-looking statements. Although Pizza Bella, Inc.
believes that the projections reflected in this plan are reasonable at this time, it
can give no assurance that these projections will prove to have been correct.
This Business Plan is not a financing offer. A financing offer is only valid
with an approved Private Placement Memorandum.
___________________
___________________
Signature
Date
___________________
Name (typed or printed)
TABLE OF CONTENTS
EXECUTIVE SUMMARY
The Business Concept
The Opportunity
Operations of the Business
Product and Service Offerings
THE COMPANY
1
1
1
6
6
7
Mission of the Company
Company Structure
7
7
1. Legal Status
2. Physical Location
3. Intellectual Property
7
7
7
Company History
7
GROWTH STRATEGY
8
Business Objectives
Targeted Customers
Key Initiatives
Competition and Competitive Advantages
Size of the Market
Marketing Activities
Sales Strategy
CORPORATE MANAGEMENT
Management
Founder and Owner:
Founder and Owner:
Founder and Owner:
KEY FINANCIAL PROJECTIONS
Financial Needs and Use of Funds
Assumptions
Revenues
Expenses
Cash Flow
Projected Profit and Loss
Projected Balance Sheets
Projected Cash Flow
Break Even Calculation
Summary of Lender Return and Risk
8
8
9
9
10
11
12
12
12
12
12
12
12
12
13
13
14
14
14
15
17
18
18
REFERENCES
19
APPENDICES
20
12 Month Projected P & L
12 Month Projected Balance Sheet
12 Month Projected Cash Flow
5 Year Projected P & L
5 Year Projected Balance Sheet
5 Year Projected Cash Flow
20
21
22
23
24
25
Pizza Bella, Inc.
EXECUTIVE SUMMARY
The Business Concept
Pizza Bella, Inc. (P
Pizza Bella or the Company) is a pizza and pasta restaurant
that is expanding into a casino environment in San Diego, California. It will
provide delicious hot food in a food court that is part of an extremely busy casino.
The Company serves the BEST pizza and pasta in America.
The Company’s restaurant will present well-liked food items in the casino’s food
court. Pizza Bella will target all casino patrons looking for economical, but
delicious, food. It will also target the casino workers.
The Company’s location within the casino provides a built-in customer base. The
casino is always busy. The food court provides easy access and attracts the
casino attendees who will pass by and be able to see the restaurant.
Pizza Bella will take advantage of its location and the casino’s visitors to drive its
growth. Pizza Bella expects to gain a profitable market share within a very short
period of time. Determinations have been made for the size of the market,
amounts of budgeted advertising and promotional dollars and the competitive
landscape.
Projections call for the Company to generate revenues of $1.1 million in its first
twelve months. Pizza Bella will achieve strong growth over the next several
years, reaching $2.28 million in revenues and more than $773,000 of net income
by the fifth year.
The Opportunity
Pizza Industry Growth
In a report released by PMQ Magazine entitled Pizza
Power Report 2007, staff writer Tom Boyles says, “Based
on statistics provided by InfoUSA, the unit growth for the
pizza segment between July 2006 and July 2007 was very
active. Not only did the pizza industry increase its volume
of units between July of 2006 and July of 2007, sales saw
one of the most significant rises in a few years. During this
period the pizza segment saw a 3% increase in sales in
both the QSR** and the CD** segments, which equates to
an overall increase of $936,433,802 and brings the total
U.S. pizza sales for these segments to $32,150,893,862.”
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Pizza Bella, Inc.
Additionally, the National Restaurant Association (NRA) stated that pizza sales,
from period July 2006 to July 2007, of nearly $32.2 billion represented 6.29% of
total ‘eating place’ U. S. restaurant sales of $511 billion in 2006. The NRA
reported, at year end 2006, there were approximately 925,000 restaurants in
America, of which 8.03% were in the pizza segment, as compared to 7.7% in
2005.
Independent Pizza Market
Analysts agree that the U. S. pizzeria industry is healthy and growing. Between
July 2006 and July 2007 average sales were $432,723. The Independent market,
classified as pizzerias not in the top 25 chains, are currently gaining ground on
bigger chains gaining market share in the industry’s total sales for the second
consecutive year.
According to Pizza Power 2007, independents comprised 66.51% of all U.S.
pizzerias; up from 64.81% in the 2006 Pizza Power report. The report showed
that as far as overall industry growth, “Independents also marched forward in this
area and now earn 50.21% of the U.S. pizza industry’s sales, up from 49.47% of
total U.S. industry sales reported in last year’s Pizza Power Report. Average
store sales for independents also rose to $326,478, which is up from the
$323,411 that was reported in last year’s Pizza Power Report.”
On average ‘mom and pop’ sales are less than average sales at a Top 25 chain,
but independents continue to claim market share. In 2000, when the first PMQ
Pizza Power Report was released, store sales for independents reflected 59.7%
of total U. S. stores; in 2006 independents had increased their percentage to
66.51%. At year end 2000, independents owned 48.5% of all U.S. pizza sales;
currently these independent stores own 50.21%. 1
Pizza Facts
For decades “Pizza Pie” has been one of America’s most loved foods. And,
everyone seems to have a favorite style as well as topping. Today it’s difficult to
find someone who hasn’t tried a slice of pizza.
A recent Gallup Poll reported that 82% of children ages 3-to-11 would rather
have pizza than other food for lunch and dinner, such as hot dogs, macaroni &
cheese, chicken nuggets, and hamburgers. We love pizza so much in the U. S.
we have honored it with its own month - October! Crust and style choices of
pizzas may include:
 Chicago
 New York
 California
 Stuffed
 Pan
 Cracker crust
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Pizza Bella, Inc.
 Thick
 Thin
 Hand tossed
 Focaccia
 Deep Dish
 Take n’ Bake
Every day Americans consume about 100 acres of pizza (the equivalent of 350
slices per second). The U.S. has over 69,000 pizzerias that sell more than 3
billion pizzas each year. Americans love pizza but they did not invent it, but
neither did the Italians as most people believe; however, they did improve it
bringing it to the world market.
Research shows that, “From about 730 B.C. until about 130 B.C., Greeks, who
were considered to be some of the greatest bakers in ancient times, occupied the
southernmost regions of Italy. The Greeks baked round, flat breads and
garnished them with oils, garlic, vegetables and other foods, leaving a rim of
crust to serve as a handle." 3
The Wisconsin Milk Marketing Board released the following Italian/pizza fun
facts: 4
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Italian food ranks as the most popular ethnic food in America.
(Courtesy of the National Restaurant Association)
Everyone in the United States eats about 23 lbs., or 46 slices,
every year.
36% of all pizza orders want their pizza topping pepperoni
Americans consume around 251,770,000 pounds of pepperonis
every year
In 1987 the U.S. designates October as National Pizza Month
93% of Americans eat a minimum of one pizza per month. (Source:
Bolla Wines.)
66.66% of Americans order pizza for a casual evening with friends.
(Source: Bolla Wines.)
Americans eat more pizza on Super Bowl Sunday than any other
day of the year
A study done by a USDA statistician and home economist found
that in a three-day survey period, 42% of children between ages 6and-11 had eaten pizza. (Source: Smithsonian Magazine.)
94% of the population of the U.S. eats pizza. (Source: Parade
Magazine.)
Pizza is a $37+ BILLION per year industry
Pizzerias represent 17% of all restaurants. (Source: Food Industry
News.)
Pizza is America's fourth most-craved food, behind cheese,
chocolate, and ice cream
Pizza accounts for more than 10 percent of all food service sales
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Pizza Bella, Inc.


On Super Bowl Sunday, pizza delivery drivers can expect $2 tips to
sometimes soar as high as $20
The National Restaurant Association estimates that 1-in-7
Americans order takeout or delivery food from a restaurant for
Super Bowl Sunday; 58% order pizza
The charts below were published in PMQ’s 2006 Annual Pizza Industry Analysis
Report: 2
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Pizza Bella, Inc.
U. S. Restaurant Industry Growth
According to the National Restaurant Association's 2008 Restaurant Industry
Forecast, restaurant industry sales are expected to reach $558 billion in 2008; a
4.4% increase over 2007. NRA’s research stated the industry will employ a total
of 13.1 million people in 945,000 restaurant-and-foodservice outlets. Furthermore, this industry represents 4% of the U. S. gross domestic product and
employs 9% of America’s workforce. The NRA said, “While 2008 will bring some
economic challenges, consumers remain hungry for the variety, convenience and
socialization restaurants provide.”
Dawn Sweeney, President and CEO of the Association added, "The restaurant
industry is entering its 17th consecutive year of real sales growth in 2008, and
while the overall economy is slowing, the industry will still show respectable
growth. As industry sales continue to increase and its total economic impact
exceeds $1.5 trillion, the workforce is also growing. In 2007, we added 400,000
career and employment opportunities, and we expect to add an additional two
million in the next decade. With consumers now spending 48% of their food
budget in restaurants, our industry is a major part of Americans' lifestyle."
In 2008, at full service restaurants, sales are projected to reach $187.4 billion; an
increase of 4.3% over 2007. Because Americans continue to love convenience,
quick service restaurants’ total sales are projected to be $156.8 billion in 2008; a
gain of 4.4% over 2007. On average, Americans buy a restaurant meal or snack
5.8 times per week; total spending on ‘away from home food’ is $1,078 per
person annually. 5
Many restaurant analysts believe that our nation’s 935,000 restaurant locations
will remain the cornerstone of our economy for decades. From 2007 and 2017,
the restaurant industry, one of the nation’s largest private-sector employers, is
expected to add more than 2 million new jobs.
The following charts show the breakdown of 2007 U. S. Restaurant sales:
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Pizza Bella, Inc.
There is a large opportunity to build a dominant and respected pizza and pasta
restaurant in this market space.
Operations of the Business
Pizza Bella will attract casino patrons as customers. It will operate within the
casino’s food court and advertise its delicious food items.
The Company will be open 24 hours per day during
the week and weekends. This allows casino
customers to partake of the food at any hour.
The Company will buy its products and ingredients
from reliable suppliers. It will use only the freshest
ingredients to assure the quality taste of its pizza
and pasta.
Marketing efforts of the Company will focus on
several activities. These include print advertising,
signage, and referrals.
Product and Service Offerings
Pizza Bella provides a wide range of pizza and toppings, pasta and soft drinks for
its customers.
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Pizza Bella, Inc.
THE COMPANY
Mission of the Company
Pizza Bella will be a recognized provider of quality food within the casino
environment. The Company will continually provide the best and most delicious
food in the casino food court. Our food will be sought after for its taste and
excellence. We will treat each customer with respect and we will be known for
our outstanding customer service.
Company Structure
1. Legal Status
Pizza Bella is an S Corporation organized in the state of
California in 2007. The Company is owned by Mr. Franci
Kasawdish, Mr. Robert Kasawdish and Mr. Jason Qasowdish.
2. Physical Location
The Company currently leases 2,500 sq. ft. of space at 2707
Congress St, San Diego, CA, 92110. The Company is seeking
to lease 800-1200 sq. ft of suitable business space inside the
casino to support its operational expansion. This space is
located inside a food court of an extremely busy Casino.
3. Intellectual Property
Pizza Bella owns many proprietary pizza and pasta recipes.
There is no other proprietary intellectual property owned by
the Company.
Company History
Pizza Bella is an expansion of an existing pizza and pasta venture. The
Company’s founders have been established restaurant owners since 1970 and
have won several awards since that time. These include:

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
Pizza Festiva Winner, Orlando, Florida
Pizza Festiva Winner, Las Vegas, Nevada
Golden Medallion Winner, California Milk Advisory Board
1995 Grand Master Pizza Chef Award, California Milk Advisory
Board
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Pizza Bella, Inc.
 Voted Best Pizza In America, ABC’S Nationally Televised Mike
and Matty show
 5 National write up’s in San Diego Union Tribune
In addition, the founders have performed extensive research to determine the
market viability and operational challenges of this type of business. Questions
that were addressed include:

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


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What is the market opportunity (is there a need for the business)?
What type of competition is there?
Can the targeted market support the business?
What types of customers will the business attract?
Are there suitable facilities in the area?
How much funding is needed?
How much monthly revenue is needed to achieve break even?
GROWTH STRATEGY
Business Objectives
The Company is planning on strong growth in the next twelve months. It plans on
achieving the following objectives:




Open its food court location
Grow its brand name within the casino environment
Build a staff of professional employees
Grow twelve month revenue in excess of $1.1 million
In succeeding years, Pizza Bella will continue to grow its business and will
achieve these objectives:
 Grow the annual number of new customers each year
 Develop a reputation that will exceed competitors in every area
 Achieve excellent customer loyalty by placing strong emphasis
in the areas of outstanding service and support
 Build an experienced and professionally trained staff
 Attain $2.28 million in annual sales in Year 5
Targeted Customers
Pizza Bella has identified a clear and substantial target market. Targeted
customers will include:
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Pizza Bella, Inc.
 Casino patrons
 Men and women
 Single or married
The Company will target these types of customers within the casino.
Key Initiatives
Pizza Bella has developed the following key initiatives to achieve its growth
goals:
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


Launch its marketing efforts to reach its target audience
Establish an aggressive program to secure customers
Hire and train qualified staff
Provide the best food at the most competitive pricing
Provide a satisfying experience for every customer
With the proper financing and adherence to this business plan objectives, the
Company believes it can complete these initiatives and achieve success.
Competition and Competitive Advantages
Pizza Bella has identified that the main competitors come from large pizza
chains. These include:
Dominoes
www.pizzahut.com
Pizza Hut
www.dominos.com
Papa Johns
www.papajohns.com
The Company believes that it can compete effectively in this market. Several
factors driving its competitive advantage include:
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Taste of the food
Quality of the food
Best ingredients
Freshest ingredients
Family owned and operated
Superior customer service
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Pizza Bella, Inc.
Size of the Market
Pizza Bella is focused on obtaining customers in the xxx geographic area. This
area is large enough to support the Company’s business objectives.
Population by Age & Gender
San Diego, CA
2006 Census Bureau Demographics
Subject
Total
Male
Female
Total Population
Under 5 years
5 to 9 years
10 to 14 years
15 to 19 years
20 to 24 years
25 to 29 years
30 to 34 years
35 to 39 years
40 to 44 years
45 to 49 years
50 to 54 years
55 to 59 years
60 to 64 years
65 to 69 years
70 to 74 years
75 to 79 years
80 to 84 years
85 years and over
Median age (years)
1,261,251
88,288
80,720
78,198
93,333
118,558
110,990
100,900
95,855
90,810
88,288
76,936
61,801
44,144
35,315
27,748
29,009
22,703
17,658
33
633,143
43,687
39,888
41,154
48,119
65,847
56,983
51,285
51,285
47,486
43,054
37,989
30,391
20,261
15,829
11,397
12,663
9,497
6,331
32
628,108
44,596
40,199
37,058
45,224
52,761
54,645
50,249
45,224
43,968
45,852
39,571
31,405
23,240
18,843
15,703
16,331
13,818
10,678
34
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Pizza Bella, Inc.
Households by Income
San Diego, CA
2006 Census Bureau Demographics
Description
Households
Families
Married Couples
Non-Family
Total
Less than $10,000
$10,000 to $14,999
$15,000 to $24,999
$25,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $149,999
$150,000 to $199,999
$200,000 or more
Median income
Mean income
463,321
29,189
22,239
38,919
44,479
65,328
84,324
58,842
68,572
25,946
25,483
$58,815
$78,154
274,263
10,971
7,405
21,118
23,587
34,283
47,722
38,945
50,190
18,650
21,393
$71,026
$91,134
202,051
3,233
3,031
11,517
14,144
23,640
33,338
31,520
44,653
16,972
20,003
$83,548
$104,862
189,058
20,607
15,503
19,473
20,985
30,249
36,299
19,284
16,259
6,239
4,159
$42,922
$56,535
Marketing Activities
Marketing efforts will emphasize the quality and superior taste that Pizza Bella’s
food products offer. Pizza Bella will implement various marketing efforts to attract
customers including:
 Direct mail activities to targeted audiences
Pizza Bella may buy lists of names that match its targeted
customer profile. It may send direct mail pieces (postcards,
letters, etc.) to these names to attract them as customers.
The Company will use commercially available list brokers to
obtain the names.
 Print advertising
The Company will take out ads in local publications that are
matched to its targeted audiences,
 Signage and posters
Pizza Bella will utilize signage and posters that will be
displayed throughout the casino area to promote the
Company’s restaurant.
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Pizza Bella, Inc.
 Customer loyalty programs
The Company will develop strong customer loyalty programs.
Pizza Bella will implement and manage programs that reward
a customer for repeat business with the Company.
 Referrals
Pizza Bella will develop referral programs whereby existing
customers receive incentives to refer friends or associates to
the restaurant.
Sales Strategy
The Company will sell through its retail location only.
CORPORATE MANAGEMENT
Management
Founder and Owner: Mr. Franci Kasawdish
Founder and Owner: Mr. Robert Kasawdish
Founder and Owner: Mr. Jason Qasowdish
KEY FINANCIAL PROJECTIONS
Financial Needs and Use of Funds
The Company is seeking a $160,000 loan to execute this business plan.
Additionally, management of the Company will contribute $40,000 of their own
funds in equity.
Pizza Bella intends to use these funds primarily for start-up expenses, marketing
and staffing expense. Remaining funds will be used for general working capital
needs.
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Pizza Bella, Inc.
Sources and Uses of Proceeds
Sources
Loan
$160,000
Equity
$40,000
Total Sources
$200,000
Uses
Equipment
$49,000
Computers/printers/software
Leasehold Improvements
$3,000
$45,000
Other
$1,000
Working Capital
Total Uses
$102,000
$200,000
Equipment
Oven
Ranges
Walk In Cooler
Refrigerated prep table
Deli prep table
Pizza station
Misc.
$12,000
$6,000
$10,000
$5,000
$5,000
$5,000
$6,000
$49,000
Assumptions
Revenues
Revenue Assumptions
Food Sales
Year 1
Year 2
$1,100,000
$1,320,000
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Year 3
Year 4
Year 5
$1,584,000
$1,900,800
$2,280,960
Pizza Bella, Inc.
Expenses
Expenses
Year 1
Year 2
Year 3
Year 4
Year 5
Payroll Expense
Payroll Taxes & Benefits
Travel & Entertainment
Rent
Utilities
Phone
Professional Fees
Supplies
Marketing Expenses
Insurance
Other
$180,000
$23,994
$1,200
$60,000
$9,600
$2,400
$1,200
$1,800
$6,000
$2,400
$12,000
$183,600
$24,474
$1,224
$61,200
$9,792
$2,448
$1,224
$1,836
$6,120
$2,448
$12,240
$187,272
$24,963
$1,248
$62,424
$9,988
$2,497
$1,248
$1,873
$6,242
$2,497
$12,485
$191,017
$25,463
$1,273
$63,672
$10,188
$2,547
$1,273
$1,910
$6,367
$2,547
$12,734
$194,838
$25,972
$1,299
$64,946
$10,391
$2,598
$1,299
$1,948
$6,495
$2,598
$12,989
Total Expenses
$300,594
$306,606
$312,738
$318,993
$325,373
Cash Flow
Receivables average 0 days
Payables average 30 days
Projected Profit and Loss
Pizza Bella’s revenues are projected to grow significantly in the next twelve
months. For the 12-month period, revenues will total $1.1 million and this will
yield an operating profit of $496,000 and a net income of $273,000. The monthly
projections are illustrated in the following graph:
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Pizza Bella, Inc.
The next two graphs show Pizza Bella’s projected annual revenues and annual
net profit over a five year period.
Detailed profit and loss projections are presented in the Appendix.
Projected Balance Sheets
Based on projected revenues and expenses, the Company anticipates
maintaining a strong balance sheet.
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Pizza Bella, Inc.
Complete projected balance sheet details are shown in the Appendix.
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Pizza Bella, Inc.
Projected Cash Flow
The Company’s cash flow projections show that Pizza Bella will have sufficient
cash to support the business. The following graphs present a view of projected
cash flow of the business.
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Pizza Bella, Inc.
Break Even Calculation
Pizza Bella achieves break even with about $40,000 in monthly revenues. This is
shown in the following graph.
Summary of Lender Return and Risk
Pizza Bella is requesting a $160,000 loan to execute this business plan. These
funds are sufficient to allow the Company to achieve its business goals and they
provide a satisfactory cash safety cushion for the Company.
The Company will make both interest and principle payments monthly to the
lender. Projections in this plan assume an 8% interest rate on the loan with a five
year amortization period. Cash flow projections support the Company’s ability to
meet monthly payments.
Management believes the business plan and projections presented in this plan
show that the lender has minimal risk with this loan.
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Pizza Bella, Inc.
REFERENCES
2007 “Pizza Power Report 2007: The Industry as a Whole”, (By Tom Boyles,
Pizza Magazine Today, PMQ; November 12, 2007) Article Found at:
<http://www.pmq.com/mag/20071112/article.php?story=pizzapower>
2
2006 “PMQ’s Annual Pizza Industry Analysis”, (By Tom Boyles, staff writer for
PMQ Magazine, November 12, 2006) Article Found at:
<http://www.pmq.com/mag/20061112/pizzapower2006.pdf>
3
2008 “Pizza – It’s Simply an American Favorite”, (By William Lockhart, 2008
Ezine Articles) Article Found at:
<http://ezinearticles.com/?Pizza---Its-Simply-An-AmericanFavorite&id=244980>
4
2007 “Pizza Facts”, (2007 Wisconsin Milk Marketing Board, ) Article Found at:
<http://www.wisdairy.com/SpecialOffers/AmericasDairyLand/episode/pizza
cheese/pizzafacts.aspx>
5
2007 “Restaurant Industry to Continue to be Major Driver in Nation’s Economy
Through Sales, Employment Growth in 2008”, (National Restaurant
Association’s 2008 Restaurant Industry Forecast, December 12, 2007)
Article Found at:
<http://www.restaurant.org/pressroom/pressrelease.cfm?ID=1535>
6
2007 “The Restaurant Industry: Driving the U. S. Economy”, (Restaurant
Research by State, September 2007) Article Found at:
<http://www.restaurant.org/pdfs/research/state/california.pdf>
1
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Pizza Bella, Inc.
APPENDICES
12 Month Projected P & L
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Pizza Bella, Inc.
12 Month Projected Balance Sheet
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Pizza Bella, Inc.
12 Month Projected Cash Flow
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Pizza Bella, Inc.
5 Year Projected P & L
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Pizza Bella, Inc.
5 Year Projected Balance Sheet
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Pizza Bella, Inc.
5 Year Projected Cash Flow
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