Brewsters Business Plan
MPAcc 809
Business Plan:
Brewsters Brewing Company & Restaurant
Prepared by:
Nicole Powlowski
Kristi Gilbert
Chelsea Harman
Rita Sandhu
June 30, 2009
Nicole Powlowski
Kristi Gilbert
Chelsea Harman
Rita Sandhu
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Table of Contents
Executive Summary
4
1.0 Introduction
1.1 Mission Statement
1.2 Goals and Objectives
1.3 Industry Overview
7
7
8
2.0 Operations Plan
2.1 Description of Operations
2.2 Organizational Structure
2.3 Board of Directors
2.4 Management
2.5 Site Plan
2.6 Building and Floor Plan
2.7 Capacity
2.8 Average Business Day at Brewsters Saskatoon
2.9 Common Activities
2.10 Brewing Process
2.11 Working Capital Planning
10
10
10
11
11
12
13
13
14
15
15
3.0 Human Resources
3.1 Shareholders/ Board of Directors
3.2 Shareholder/ Board of Director Profiles
3.3 Team Member Key Qualities and Profiles
3.4 Training Programs
3.5 Shareholder Agreement
3.6 HR Projections
18
18
20
23
25
26
4.0 Marketing Plan
4.1 Competition
4.2 Customer and Target Markets
4.3 Product Strategy
4.4 Pricing Strategy
4.5 Place
4.6 Promotional Strategy
29
30
30
31
31
32
5.0 Financial Plan
6.0 Conclusion
References
36
39
41
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Kristi Gilbert
Chelsea Harman
Rita Sandhu
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LIST OF TABLES
Table 3.0 Hours per Position per Week
Table 3.1 Overall Summary of HR Expenses
Table 4.0 Advertising Expenses
26
27
34
LIST OF FIGURES
Figure 2.1 Site Plan
Figure 2.2 Floor Plan
Figure 2.3 Brewing Process
Figure 3.1 Organizational Structure
11
13
15
20
LIST OF APPENDICES
Appendix A: Income Statement with Investment Analysis
Appendix B: Mortgage
Appendix B.1: Debt Financing
Appendix C: Balance Sheet
Appendix D: Marketing Budget
Appendix E: Capital Budget
Appendix F: Wages and Benefits
Appendix G: Ratio Analysis
Appendix H: Best Case Scenario for a Sensitivity Analysis
Appendix I: Worst Case Scenario for a Sensitivity Analysis
Appendix J: Break Even Analysis
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Kristi Gilbert
Chelsea Harman
Rita Sandhu
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Executive Summary
Brewsters Brewing Company (Brewsters) is a small-scale, privately held brewery
committed to providing high quality handcrafted beer on premise at the various
locations that it has established. Brewsters Saskatoon will be located on the corner of
Attridge Drive and Heal Avenue, which is in close proximity to the target market, which
consists of young male professionals working in trades, between the ages of 20 to 35. By
having the location positioned within this area, the growth and expansion that
Saskatoon has experienced into these new areas will be capitalized on. The
establishment of restaurants, pubs and breweries has been lacking in comparison to this
growth that has taken place, leading to a greater need of such businesses.
The main competition that Brewsters will face in this area will be by Specklebelly’s
Alehouse & Eatery, Maguire’s Irish Pub & Brewery and Original Joe’s, with all other
restaurants working to compete indirectly against the business. In addition to the twelve
types of draft beer that will be brewed and the beer “sampler” that will be offered,
allowing customers to taste five half pints of Brewsters own draft, the “Saskatoon Berry
Ale” will be offered as well. The Brewsters location will include thirty flat screen plasma
televisions in order to meet the sporting entertainment needs of the target market.
Pricing will be consistent with the other franchise locations across Canada and will
involve the use of a premium pricing strategy. Promotion will take place in several ways
such as through Facebook and radio advertising. Also many promotional strategies will
be implemented such as “Rider Pride” events during various nights and recreational
sports team sponsorships.
The business will operate as a corporation in order for benefits to be reaped on features
such as the small business deduction and limited legal liability. Each 25% equity stake
will be purchased, by Nicole Powlowski, Kristi Gilbert, Chelsea Harman and Rita Sandhu,
for $250,000 and to fund additional startup capital requirements we are requesting a
$1,000,000 mortgage from TD Canada Trust. The Board will consist of Kristi, Rita,
Chelsea, and Nicole, as well as one member of the Lanigan family. Brewsters Saskatoon
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Chelsea Harman
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will have a floor plan that consists of an office, male and female washrooms, brewery,
bar, and a large kitchen and total capacity will equal approximately 175 patrons. An
activity such as inventory counts in the bar and kitchen and inventory ordering and
receiving will be conducted on a daily basis. Activities such as preparing staff schedules
and posting secret shopper results will take place on a weekly basis. Other activities
such as updating budgets and financial statement preparation will be performed on a
monthly and annual basis respectively.
We have four highly qualified shareholders who are exceptionally capable and have the
drive to make this venture a success. All shareholders are graduates of the Master of
Professional Accounting program and are qualified Chartered Accountants. Kristi Gilbert
has trained as a chef in France and has a true passion to own a pub. She has managed
kitchens in small bistros to large chain restaurants. Chelsea Harman has worked
extensively with the Lanigan family, the Brewsters founding family, as the lead
accountant for all Brewsters locations. It is through this connection we have secured
this exciting opportunity. Nicole Powlowski has extensive expertise in restaurant and
bar management. She also holds a double major in accounting and marketing. Rita
Sandhu is an award winning beer brewer. She has crafted a secret recipe for Saskatoon
Berry Ale which will be exclusively available at Brewsters Saskatoon.
One of the key success factors for Brewsters Saskatoon will be outstanding customer
service. This will be accomplished through exceptional customer service training for
front-line staff and management. This training will be reinforced through monthly menu
tests for servers and bartenders to ensure their knowledge remains current. As well,
mystery shoppers will be regular customers at Brewsters Saskatoon. Outstanding
service will be publicly acknowledged while poor service will be reprimanded. Our
service will define this establishment and will ultimately grow the profits of the business
through satisfied customers.
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Kristi Gilbert
Chelsea Harman
Rita Sandhu
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After performing a thorough financial analysis, the return on equity that will be
generated is 27.3%, before additional financing is taken into consideration and 13.5%
after the financing is included, see Appendix A. Total sales will increase from $7.0 million
in 2010 to $8.9 million in 2014. Total expenses will also increase from $2.2 million in
2010 to $2.6 million in 2014. Even after a sensitivity analysis and break even analysis
was performed, Brewsters would still be performing well in almost all cases.
With the strategic positioning of the business and the steady economy in Saskatoon,
Brewsters will be able to capture market share in the city relatively fast. The high
quality brew that is offered and the friendly atmosphere will attract large volumes of
customers.
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Kristi Gilbert
Chelsea Harman
Rita Sandhu
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1.0 Introduction
Brewsters was created in 1989 by the Lanigan family in Regina, Saskatchewan as a
family business and has developed into Canada’s largest Brewpub and Restaurant
group. This small-scale, privately held brewpub focuses on providing high quality
handcrafted beer on premise at the eleven locations that is has currently established
across Alberta and Saskatchewan. Recently, plans have been finalized to open two new
locations in Alberta, one location being in Edmonton and the other in Airdrie. Brewsters
is known for having “the widest selection and highest production volume of all brew pub
operations in Canada”1. It is able to feature twelve premium beers, at any given time,
chosen from its range of ales, lagers, and seasonal brews.
1.1 Mission Statement
Although Brewsters does not have an official mission statement; it describes its business
philosophy and outlines its desired image in the following statement:
“Brewsters Brewing Company and Restaurant.....We demand more from our
beer.”1
The company is dedicated to providing fresh, good tasting beer and has concentrated on
high quality, which has lead it to experience growth and success. In order to produce
high quality beer, draft lines that are thoroughly cleaned and sterilized are used to serve
beer. Brewsters uses the finest ingredients in its brews and each brand is brewed
regularly and in small batches by skilled brewers allowing for fresh beer to be created.
The company has remained competitive on the basis of quality.
1.2 Goals and Objectives
The company’s primary objective is “to provide a genuine alternative for beer lovers
1
http://www.brewsters.ca/brewery.html
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who want to sample different styles of beer from around the world while enjoying its
extensive menu designed to compliment its handcrafted beers”1.
1.3 Industry Overview:
Saskatoon has been experiencing growth in population as people originally from
Saskatoon are moving back and people from other cities are moving as well. This is
primarily due to the fact that the economic downturn has impacted other parts of
Canada to a greater degree. Saskatoon has maintained one of the lowest
unemployment rates, which is currently 5% with Regina, Quebec City, and Winnipeg also
having relatively low unemployment rates at 3.8%, 4.5% and 4.9% respectively2.
Saskatoon also experienced a growth rate of 7% in 2008 and 1.7% in 2009, which was
the highest growth rate in Canada for 20093. Therefore, Saskatoon has not been
impacted by the economic slow down to the extent that other areas in the country
have. The growth the city has been experiencing is also creating growth in the pub and
brewery industry. New areas within the city are developing which is creating the need
for more pub and sports bar establishments. Therefore, Brewsters can capitalize on this
trend by expanding into such areas in Saskatoon.
1
http://www.brewsters.ca/brewery.html
http://www40.statcan.ca/l01/cst01/labor21a-eng.htm
3
http://www.entrepreneur.com/tradejournals/article/170863975.html
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Kristi Gilbert
Chelsea Harman
Rita Sandhu
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OPERATIONS PLAN
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Kristi Gilbert
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2.0 Operations Plan
2.1 Description of Operations
The establishment of Brewsters Saskatoon would mark the twelfth location in addition
to the eleven locations that already exist. Also, in addition to the wide selection of high
quality brews that are currently offered we are proud to announce that we will be
producing a new specialty Saskatoon Berry Ale in our Saskatoon location.
Brewsters is dedicated to providing different types of beer that compliment the
extensive menu that it has developed.
Patrons must be of legal drinking age.
2.2 Organizational Structure: Corporation
Brewsters Saskatoon will operate as a corporation in order to take advantage of the
small business deduction and limited legal liability.
Shareholdings will be as follows. Each 25% stake will be purchased for $250,000 and to
fund additional startup capital requirements we are requesting a $1,000,000 mortgage
from TD Canada Trust.
Kristi
Gilbert
25%
Chelsea
Harman
25%
Nicole
Powlowski
25%
Rita
Sandhu
25%
Brewsters Saskatoon
2.3 Board of Directors
The Board will consist of Kristi Gilbert, Rita Sandhu, Chelsea Harman, and Nicole
Powlowski, as well as one member of the Lanigan family. The strong financial
backgrounds of the Venturers in combination with their spectrum of relevant
experience in restaurants, pubs, and brewing will contribute to a well rounded direction
for Brewsters Saskatoon. The addition of a member of the Lanigan family ensures that
Brewsters Saskatoon will operate in a manner consistent with the original Lanigan family
vision. This will also bring to the table the specific experience that has been attained
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through involvement in the other 11 Brewsters locations across Alberta and
Saskatchewan.
2.4 Management
Management in the early years of business will be as follows (please see the HR plan for
further details):
 Kristi Gilbert – Kitchen
 Rita Sandhu – Brew Master
 Chelsea Harman – Financial
 Nicole Powlowski – Pub
2.5 Site Plan
Figure 2.1 Site Plan
SASKATOON, SASKATCHEWAN
BREWSTERS
ORIGINAL JOE’S
SPECKLEBELLY’S
MAGUIRE’S
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Kristi Gilbert
Chelsea Harman
Rita Sandhu
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Parking
Parking
Heal Ave
N
Brewsters Brewing
Company & Restaurant
Waste,
Recycling
Trees
Attridge Drive
For further details on the location of Brewsters Saskatoon, see the Marketing plan
section.
2.6 Building & Floor Plan
The layout of the floor plan includes an office, male and female washrooms, brewery,
bar, and a large kitchen. This floor plan provides a basic overview of the use of space
within the Saskatoon location.
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Kristi Gilbert
Chelsea Harman
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Figure 2.2 Floor Plan
Front Door
Office
Brewery
Waste/
Recycle
Bar
Kitchen
Tables
Washrooms
2.7 Capacity:
 9 x 6-person tables
 21 x 4-person tables
 1 x 8-person table
 29 x bar stools
 Total = 175 patrons
2.8 Average Business Day at Brewsters Saskatoon
 8:00 a.m.: Kitchen Manager & Kitchen Prep staff arrive; Brew Master & Brew
support staff arrive.
o Prep cooking
o Inventory management performed (ordering, receiving, monitoring for
outdated items, etc)
o Brewing processes initiated
 11:00 a.m.: Servers & bartenders arrive.
o Bar is prepared
o Front-of-house prep work completed
 11:30 a.m.: Open for business. Additional kitchen staff arrives.
o Customer service – food & drink
 11:30 p.m.: Kitchen closes.
 12:00 a.m. (Sunday – Thursday) or 2:00 a.m. (Friday & Saturday): Pub closes; final
clean up and cash out. Staff will be out of the building by 3:00 a.m.
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Kristi Gilbert
Chelsea Harman
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2.9 Common Activities
 Daily
o Morning: Bank deposit, inventory counts in bar & kitchen, prep work,
inventory ordering, receiving
o Throughout the day: server cash out
o Evening/upon closing: prepare bank deposit, sanitize kitchen
 Weekly
o Prepare staff schedule
o Secret shopper results posted
 Monthly
o Financial reports
o Comparison to benchmarks
 Gross margin
 Inventory waste
 Total sales
o Update rolling budget
o Monitor staff levels; hiring as necessary
 Yearly
o Financial statements
o Tax return
o T4’s for staff
o Annual return
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Kristi Gilbert
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2.10 Brewing Process
Figure 2.3 Brewing Process
Saskatoon
Berry Ale
2.11 Working Capital Planning
 Inventory Management
o Inventory will be ordered after every count based on budgeted sales.
o Inventory counts of:
 fresh food Sunday, Wednesday, Friday
 frozen food Sunday, Wednesday
 Liquor every second Tuesday
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

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Brewing supplies monthly
Cash Conversion Cycle
o Brewsters Saskatoon will have a negative cash conversion cycle, as cash
will be collected from customers immediately while suppliers will not
need to be paid for an average of two weeks. This means Brewsters will
be self-financing and should not have a need for a line of credit or bank
overdraft.
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Kristi Gilbert
Chelsea Harman
Rita Sandhu
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HR PLAN
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Kristi Gilbert
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3.0 HR Plan – Brewsters Brewing Company
3.1 Shareholders / Board of Directors
Nicole Powlowski
Board of Directors
Shareholder 25%
Lounge Expertise
Kristi Gilbert
Board of Directors
Shareholder 25%
Kitchen Expertise
Rita Sandhu
Board of Directors
Shareholder 25%
Brewing Expertise
Chelsea Harman
Board of Directors
Shareholder 25%
Financial Expertise
3.2 Shareholder / Board of Director Profiles
We met while completing the Master of Professional Accounting degree at the
University of Saskatchewan. Subsequently we have all obtained designations as
Chartered Accountants. Through this education we developed in-depth knowledge
regarding accounting but also business operations and management. Our technical
knowledge has been applied in accounting firms and in independent ventures we have
pursued.
Kristi Gilbert
Kristi has extensive knowledge in the management and operations of food service
industries. Originally, trained as a chef in France, Kristi has extensive experience
managing kitchens from small bistros to large national chains. She has expertise in
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accounting, achieved through time spent articling at a major accounting firm. Kristi’s
career in accounting held promise, however, her true passion is to own a pub.
Chelsea Harman
Chelsea has worked closely with the Lanigan family, founders of the Brewsters brand,
for many years as the primary accountant for all Brewsters locations. This connection
has allowed us to secure the opportunity in Saskatoon. Due to Chelsea’s close
involvement with the company, we have firsthand knowledge regarding the proven
track record of financial success and outstanding brand reputation all locations have
achieved.
Nicole Powlowski
Nicole’s expertise in restaurant and pub management is a great asset to this
partnership. She has experience with all facets of successfully running a new, exciting
pub which is sure to provide great benefits to the team. Prior to obtaining her
accounting designation, Nicole received an undergraduate business degree with a
double major in accounting and marketing. Nicole had the opportunity to master her
marketing skills to promote the previous pub she managed.
Rita Sandhu
Rita has spent many years perfecting brewing techniques and mastering traditions. She
has attended brewing conventions throughout Europe and has won several awards for
her own brews. Her secret recipe for the specialty beer, Saskatoon Berry Ale, has been
coveted by many Saskatchewan brew pubs. Brewsters Brew Pub and Brasserie in
Saskatoon will be the lucky beneficiary of her exceptional talents and this secret recipe.
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Figure 3.1 Organizational Structure
General Manager
Manager – Kitchen
Manager - Brewing
Chef
Brew Master
Bartender
Support Staff
Server
Cook
Prep Cook
Manager – Lounge
Support Staff
Dishwasher
3.3 Team Member Key Qualities and Profiles
Management – Key Qualities
Ultimately, these roles will not be filled until 1-2 years after the initial challenges
associated with starting a business have been completed. The shareholders will fill the
roles of section managers and general manager during this start-up period.
The ideal profile for management at Brewsters includes a self-starting individual with
exceptional interpersonal skills due to the high level of customer interaction. The
individual must be willing and able to learn quickly. Effective multi-tasking is an
absolute requirement as there are often many problems to tackle each day when
dealing with the public. A university education in business and experience in
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restaurant/bar management are additional assets but not requirements to perform
successfully.
Management - Profiles
General Manager

Oversee all business operations

Provide monthly financial reports

Responsible for regular communications over business issues and successes with
the shareholders

Motivate and inspire all employees

Support all other managers in their roles
Manager – Kitchen

Provide direction and motivation for all kitchen employees

Responsible for hiring and firing kitchen personnel in conjunction with the Chef

Acquisition of kitchen resources

Financial reporting related to kitchen activities

Provide performance reviews for the Chef and other kitchen employees in
conjunction with the Chef

Prepare kitchen schedules

Opening the establishment
Manager – Brewing / Brew Master

Depending on the individual, the Manager of Brewing may also be the Brew
Master

Motivate and encourage all brewing employees

Responsible for hiring and firing brewing support staff

Acquisition of brewing resources
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
Financial reporting related to brewing

Provide performance reviews for the Brew Master and associated support staff

Prepare and monitor brewing schedule

In addition the Brew Master requires:
o Extensive knowledge and skill to craft the Brewsters unique brand of beer
o Creativity to develop new and seasonal flavors to satisfy demanding
customers
Manager – Lounge

Encourage and reward positive customer interaction

Direct reports include the bartenders, servers, and lounge support staff

Responsible for hiring and firing lounge staff

Acquisition of lounge resources

Financial reporting related to the lounge

Provide performance reviews for all direct reports

Prepare lounge work schedules

Closing the establishment
At least one manager must be present on location at all times. This will require all
managers to be comfortable with the roles of the rest of the management team.
Chef – Key Qualities
The chef must exhibit a passion for quality food attainable at a moderate price.
Completion of culinary school is required. This individual must be adventurous in their
ideas for menu creation but also willing to adopt some of the traditional Brewsters'
meals and snacks. The menu provides a key centerpiece of the Brewsters experience.
This individual must also exhibit managerial skills.
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Chef – Profile

Ordering and receiving food (pending management approval)

Direct reports include cooks, prep cooks, and dishwashers

Responsible for organizing and directing these reports

Menu creation above and beyond the Brewsters standard menu items
Key Qualities for other positions
Servers, Bartenders and Support Staff – Key Qualities
It is absolutely imperative these individuals have outstanding interpersonal skills. They
are the representatives of the Brewsters brand and make or break the customer
experience. By hiring the right people and providing industry leading training, we will
have a steady flow of repeat customers. It is very hard to resist a place where you feel
special as a customer.
Cooks, prep cooks, and dishwashers – Key Qualities
These individuals require a commitment to unprecedented quality in the meals they
prepare and clean. The dishes they prepare are a key factor in the customer’s
experience.
3.4 Training Programs
Challenges
The key industry challenges include staff retention and customer service. Additionally,
our challenge includes finding quality management to eventually run the day-to-day
operations of the business.
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Front-Line Staff
Our customer service is a major point where we can differentiate Brewsters from its
competition. One way to achieve great service is to carefully scrutinize staff during the
hiring process. We are also prepared to offer outstanding customer service training to
our front-line staff. We want to combat the edict that “Service stinks everywhere”.
While there are additional costs associated with investing in our staff, they will reap the
rewards through larger tips and we will earn greater profits due to repeat business.
They will receive extensive training over the menu and bar selections in addition to
sessions on interpersonal skills.
Mystery customers / shoppers will be on site regularly and will report back to the
partners regarding staff performance. Exceptional performers will receive public
recognition while poor performers will be reprimanded and fired after the third
infraction.
Servers and bartenders will be tested monthly on menu and bar content to compliment
and improve their exceptional customer service.
Management
During the first year of operations, we will carefully monitor internal employee
performance to determine which individuals have the skills we are looking for to
manage our three key operational areas on a day-to-day basis. These skills will be
compared to the management key qualities and profiles previously identified. Once
potential employees have proved themselves as potential managers, we will invest in
high quality training to provide exceptional managerial skills to these employees. This
training will also be available to any external management which is hired.
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3.5 Shareholder Agreement
A shareholder agreement has been established between the four shareholders. Each
holds a 25% interest. In the first year to two years of operations each shareholder will
take a management salary associated as we will each be acting as managers in our area
of expertise. Once division managers have been hired, due to her financial expertise,
Chelsea will likely stay on as general manager of the business and earn a larger general
management salary in addition to any dividends paid out by the company. The
shareholders will also act as the Board of Directors for the company.
Should any shareholder choose to sell their shares in the business, the other
shareholders have the first right to purchase. Market value of the shares will be
assessed on a yearly basis and agreed to by each partner to ensure no discrepancies in
purchase price valuation.
Decisions will be made based on a majority vote. Each shareholder / board member has
the right to one vote. If all shareholders / board members choose to exercise their vote,
three votes are required to pass a decision. If one shareholder / board member chooses
to abstain or is not present at the meeting, two votes out of three are required to pass a
decision.
Quorum at all shareholder / board of director meetings will be at least three
shareholders / board members in attendance.
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3.6 HR Projections
Table 3.0 Hours per Position per Week
Total Hours of work / week
Sunday to Thursday 11:30 – 12:00 midnight
Friday and Saturday 11:30 - 2:00am
- Kitchen closes at 11:30pm nightly
hours
Sun - Thurs Bartenders, Servers, Lounge Support Staff
12.5
Fri & Sat Bartenders, Servers, Lounge Support Staff
14.5
Cooks, Prep Cooks and Dishwashers work
12
Support Staff Brewing
8
#s
required
*
Sun
Mon
Tues
Wed
Thurs
Fri
Hr /
Week
Sat
Cooks
4
48
48
48
48
48
48
48
336
Prep Cooks
4
48
48
48
48
48
48
48
336
Dishwashers
3
36
36
36
36
36
36
36
252
Bartenders
3
37.5
37.5
37.5
37.5
37.5
43.5
43.5
274.5
Servers
5
62.5
62.5
62.5
62.5
62.5
72.5
72.5
457.5
Support Staff Lounge
2
25
25
25
25
25
29
29
183
Support Staff Brewing
1
8
8
8
8
8
8
8
56
265
265
265
265
265
285
285
1895
Hours per Day
* Note: No staff will work more than 8 hrs in a day. The #s required reflect the number of full-time
equivalent staff hours required throughout the week. The mix between part-time and full-time hourly
employees will be dynamic throughout the life of the business and reflect the availability in the labor
pool.
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Table 3.1 Overall Summary of HR Expenses
Year 1
Year 2
Year 3
Year 4
Year 5
Total Wages - 5%
increase per year
$995,566
$1,045,344
$1,097,612
$1,152,492
$1,210,117
Total Management
Salaries
$330,000
$334,500
$369,225
$387,686
$407,071
Total Wages + Salaries
$1,325,566
$1,379,844
$1,466,837
$1,540,178
$1,617,187
Benefits = 15% of
Total Wages + Salaries
$198,835
$206,977
$220,025
$231,027
$242,578
Total Training
$132,557
$137,984
$146,684
$154,018
$161,719
$1,656,958
$1,724,805
$1,833,546
$1,925,223
$2,021,484
Total HR Expenses
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Kristi Gilbert
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MARKETING PLAN
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4.0 – Marketing Plan
Saskatoon’s growth over the past eight years has resulted in increased construction
especially in suburban areas. The commercial development has not caught up with
growth in the new areas and as such, there is a shortage of local restaurants and other
services. We have identified a need in one of these growing areas in terms of
entertainment and cuisine.
Although Saskatoon does have a large number of restaurants, the number of authentic
pubs and breweries is limited. These pubs are generally small in size with a limited
number of tables. Also, the number of televisions and sporting event promotions at
these locations is minimal. Saskatoon has a need for a large pub and brewery, with a
large selection of high quality beer and food accompanied by good entertainment with
sporting events.
4.1 Competition
There are three direct competitors Brewsters will face within Saskatoon. These
competitors are as follows:

Specklebelly’s Alehouse & Eatery;

Maguire’s Irish Pub & Brewery and,

Original Joe’s
The location of these competitors is portrayed graphically in the Operations Plan. The
above three pubs are located on the east side of Saskatoon and brew their own draft
beer. Specklebelly’s and Maguire’s have been in operation for over ten years, while
Original Joe’s opened in Saskatoon in late 2009. Each restaurant also has a large menu
with a variety of food options.
In terms of indirect competition, all other restaurants in Saskatoon are considered
competition.
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4.2 Customers and Target Markets
The Brewsters franchise is catered to the male market with a focus on the large
selection of draft beer and high number of televisions. As Saskatoon is home to the
University of Saskatchewan, there are a large number of young men who live on the
east side of the city. There are also a significant number of young men who are
professionals, work in the trades and on the oil rigs that generate a significant level of
income. These men are often single and eat out at least three nights a week.
Saskatoon’s economy has attracted a large number of these males. Young working
males, between the ages of 20 to 35 is Brewsters target market.
4.3 Product Strategy
The Brewsters menu consists of a wide variety of food including appetizers, pizza, pasta,
burgers, wraps and steaks. The menu is comparable to that of Original Joe’s with
original Brewsters creations and high quality. The menu also offers group platters to
accommodate large groups.
The main offering that differentiates Brewsters from its competitors is the wide
selection of draft beer brewed exclusively by Brewsters. At the Saskatoon Brewsters,
twelve types of draft beer will be brewed, including flavors such as:

Rig Pig pale ale;

Black & tan, and

Hammerhead
We are also going to brew our own flavor of beer, exclusive to the Saskatoon location
called “Saskatoon Berry Ale”. This beer will be brewed with Saskatoon berries
purchased from a distributor in Saskatoon. This recipe has already been perfected by
our brewing expertise partner, Rita Sandhu.
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Another unique product that is offered by Brewsters and is not offered at any other
restaurant in the city is a beer “sampler”. This sampler is priced at $6.50 and allows
customers to sample five half pints of Brewsters own draft, served in five glasses on a
silver platter. Not only is the beer sampler well priced, it exposes customers to various
types of Brewsters draft.
Brewsters also offers entertainment in the form of sporting events. The Brewsters
location will include approximately thirty flat screen plasma televisions of various sizes.
The televisions will be programmed to exclusively show sporting events. Customers will
be able to enjoy a meal and drinks while viewing multiple sporting events on quality
screens.
4.4 Pricing Strategy
Brewsters employs a premium pricing strategy to accompany the atmosphere and
quality of the food and beverages provided. The prices will be consistent with the rest
of the franchise locations across Canada.
4.5 Place Strategy
Brewsters will be located at the corner of Attridge Drive and Heal Avenue on the east
side of the city. Please refer to the Operations Plan which portrays where Brewsters is
located in relation to its three main competitors.
This location backs on to three wealthy communities, Willowgrove, Arbor Creek and
Erindale. Based on our market research studies and overall knowledge of the
communities, a large number of young men live in these three areas. There are a
significant number of single family homes, condos and townhouses as well, which are
starter homes for young people. The location is within walking distance to Erindale and
Willowgrove as well as six condominium units.
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There are two restaurants close to this location, which are Boston Pizza and the Asian
House. Boston Pizza is a competitor but is targeted as a family restaurant more than a
pub. The Asian House offers food different from that of Brewsters. Therefore, the
Brewsters location will be able to penetrate the target market.
The land to be purchased is large enough to house the building and will also be able to
accommodate a large number of vehicles for parking.
In terms of distribution, all food and draft ingredients will be purchased through
Brewsters National and shipped directly to our location.
4.6 Promotion Strategy
Promotion will occur in three ways:
1. Facebook – As our target market is young employed males, and almost all young
people have Facebook, a large advertising spot will be purchased from Facebook
and will be targeted to people in the Saskatoon and Saskatchewan networks.
This allows the advertising to be focused towards our potential users. This
advertising will start one month prior to Brewsters opening.
2. Radio advertising with Wired 96.3 – Wired is a new radio station to Saskatoon
that has had tremendous success with young listeners. Air time will be
purchased from Wired representatives. This advertising will start three weeks
prior to Brewsters opening.
3. Signage – As Brewsters is located on Attridge drive, which is the road that must
be taken to access the three communities above, a portable sign will be
purchased in which the grand opening and other promotions can be displayed.
4. Brewsters' website – Brewsters currently has a website that advertises for all
locations. The website shows when new locations open and shows a listing of all
beers exclusive to Brewsters. The Facebook advertising will have a link to this
website.
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The following promotional strategies will be used to attract customers to the
restaurant:

Saturday – “Hockey Night in Canada”: The NHL season runs from October to May
(8 months) annually. Almost every week, Saturdays are hockey night in Canada.
Brewsters will offer reduced prices on pitchers and platters.

Various nights – “Rider Pride”: The CFL season runs from July to November
which complements the NHL season. As Saskatchewan residents are loyal fans,
Brewsters will be offering specials on “green beer” which will be the Rig Pig pale
ale with green food coloring. Each Rider game, jerseys and other Rider
paraphernalia will be offered as door prizes.

Thursday nights – “Wing Night”: All flavors of Brewsters' wings will be
discounted.

Monday nights – “Rib Night”: All flavors of Brewsters' ribs will be discounted.

Special event – “Ultimate Fight Nights”: UFC fights occur approximately every six
weeks. These events are expensive to purchase at home and therefore a large
number of young men go out to watch the events at local bars. There are only
five pubs and bars in the city that show the fights. Brewsters will show the fights
and also offer specials on high balls and platters.

Recreational sports team sponsorship – One hockey team and one slow pitch
team a year will be sponsored by Brewsters. Brewsters will pay 50% of each
team’s fee as long as the team has Brewsters in their name. These sports teams
will be offered unique specials on game nights.
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Table 4.0 Advertising expenses
Marketing Expenses Projection
Medium
Facebook
Radio
Signage
Franchise expense
Door Prizes
Team Sponsorships
2010
3,000
30,000
3,600
5,000
4,000
3,500
49,100
2011
3,090
20,000
3,600
5,150
4,000
3,500
39,340
2012
3,183
20,000
3,600
5,305
4,000
3,500
39,587
2013
3,278
20,000
3,600
5,464
4,000
3,500
39,842
2014
3,377
20,000
3,600
5,628
4,000
3,500
40,104
Based on our market research surveys, these are the events our target market are
interested in.
.
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FINANCIAL PLAN
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5.0 Financial Plan
To fund the start-up of Brewsters Saskatoon, each of the 4 shareholders will contribute
$250,000 for a total equity investment of $1,000,000. This will be supplemented by a
mortgage on the land and building for $1,000,000. To fund the working capital required
in the first year, we request debt in the amount of $700,000 for a return of 20%.
This will result in a 27% return on equity (before the return on your financing) to the four
shareholders. This means that there is room for deviation from expected conditions and
the return on debt of 20% will still be achieved.
The financial analysis provided in the appendix includes five year forecasts (from 2010
to 2014, inclusive). Although a negative net present value is shown, this indicates only
the return on the first 5 years’ operations for illustrative purposes and in reality the
operations will be continuing into the foreseeable future, generating an overall positive
return.
The analysis illustrated in the appendices is based on the following assumptions:
Sales:
Appendix A: Annual sales for 2010 will be $7,000,000. This is based on the average sales
of Edmonton and Regina locations. However, in a worst case scenario (worst sales in
past 3 years of any location) sales could be up to 10% lower than this, for total sales of
$6,300,000. Likewise, sales could be 10% higher at $7,700,000. This is detailed in the
sensitivity analysis area of the appendices. Based on trend analysis of other Brewsters
locations and lack of market saturation near the new Brewsters location we believe that
sales of $7,000,000 is a reasonable estimate.
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Growth:
Appendix A: A nominal growth rate of 10% in the first year and 5% thereafter has been
used in calculating future income and expenses. This amount includes inflation, which
cannot be predicted with reasonable certainty, but if we realize an average inflation rate
of 3% then the real growth is 7% and 2% respectively.
Purchases:
Appendix C: Purchases are expected to make up 40% of sales, comparable to industry
averages.
Inventory:
Appendix C: Average inventory levels will be equal to 5 days’ sales. This constitutes the
expected weighted average of fresh food (with a shelf life of approximately 2 days) and
frozen/non-perishable food and liquor. We will be receiving regular deliveries and
reviewing inventory regularly to ensure minimal capital is tied up in inventory.
Accounts payable:
Appendix C: Average cash conversion cycle for accounts payable is expected to be 15
days. This is because most of our suppliers will invoice once per month, but on varying
dates.
Capital assets:
Appendix E: We will be building and owning our own premises. $1,000,000 of the total
cost will be financed through TD Canada Trust at a rate of 8%. We have been able to
obtain a reasonable rate based on the equity contributions of the shareholders and the
bank’s lein on the property itself.
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Long term debt:
Appendix B.1: This balance represents your $700,000 investment in Brewsters. It will be
repaid over 5 years at an interest rate of 20%, for a total return on investment of
$470,000.
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6.0 Conclusion:
Brewsters has a long standing reputation for offering a wide selection of high quality
beer with a variety of food options as well. The new location in Saskatoon on the corner
of Attridge Drive and Heal Avenue should bring in many customers in the surrounding
communities, especially young men working in trades. The new location will benefit
from the brand value of the Brewsters franchise chain that has already established itself
across Alberta and Saskatchewan. This would also allow Brewsters to take over
substantial market share.
After a sensitivity analysis was performed it seems more then feasible with our modest
projection for all variables that Brewsters will be profitable. In the best case scenario,
Brewsters will generate a return on equity investment of 59.8% before the additional
financing is considered. After additional financing is taken into consideration a return on
equity investment of 13.5% will result, see Appendix H. Under the worst case scenario, a
return on equity investment of (8.8%) will take place before additional financing.
However, after additional financing a return on equity investment of 13.5% will result,
see Appendix I. As additional financing will be included in the capital structure the
worst case scenario would still generate a positive return on investment. Although a
negative net present value is show in the sensitivity analysis, this only takes into
consideration the return on the first five years of operation. As the company will
continue operating in the future, a positive return would result over the long run. A
break even analysis was also conducted, which shows that the company would generate
a 20% return on equity before financing is considered if it did not generate a profit or
loss through operations. The return on equity with the additional financing taken into
consideration would be 13.5% if the company did not produce a profit or a loss, see
Appendix J. After discussing the operations plan, marketing plan, human resource plan
and financial plan in this business plan there is no doubt in an investors mind that this is
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a great opportunity that can be rewarding on various dimensions. Brewsters is a great
opportunity and a great investment for Saskatoon, especially over the long run.
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References
Brewsters Brewing Company and Restaurant. (n.d.). Home page. Retrieved June 21,
2009, from http://www.brewsters.ca/
Saskatoon’s Economy. (n.d.). Retrieved June 24, 2009, from
http://www.entrepreneur.com/tradejournals/article/170863975.html
Statistics Canada. (2009). Distribution of Unemployed People in Canada, 2009 (No.
71F0004XCB). Ottawa,
Ontario: Author. Retrieved June 20,2009, from
http://www40.statcan.ca/l01/cst01/labor21a-eng.htm
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