Modern Donuts
BUSINESS PLAN
PRESENTED BY:
Tori Hislop
 Angela Ko
 Zara Nanji
 Selina Wong

AGENDA
Executive Summary
Introduction
Marketing Plan
Human Resources Plan
Operations Plan
Financial Plan
Conclusion
EXECUTIVE SUMMARY
What we are asking for:
$250K operating loan
 Why we need it:
To establish the 1st gourmet doughnut cafe in Saskatoon
Site renovations, Equipment, and Marketing
 Proven Business:
Financial profitable Calgary location
 Anticipated IRR from our Saskatoon Location:
57%

MISSION

To be the first high quality gourmet doughnut cafe
located in Saskatoon.

By providing fresh tantalizing flavours of doughnut for all
occasions.
VISION

Jelly Modern Doughnuts is
the ultimate quality
experience.
“Offering delicious, gourmet
doughnuts made fresh
throughout the day for
everyone in Saskatoon who
wants to indulge in a quality
experience.”
COMPETITIVE ADVANTAGE
MOVE OVER CUPCAKE!

Modern take on an old classic

Fresh, healthy, organic
20 (+) unique flavors of doughnuts
including our new Maple Bacon Doughnut


Commitment to the community
through daily doughnut donations
MARKETING PLAN – MARKETING MIX
Product:







Handcrafted Gourmet Donuts
Baked fresh daily
Eco-friendly packaging
Organic & high quality local
Ingredients
Catering & Delivery
Offer wide array of coffee, tea,
espresso to compliment your
doughnut choice
Price of quality:
$2.25/Doughnut
$24.95/Dozen
MARKETING PLAN – STORE LOCATION
Location: 5B - 1501 - 8th. St.
East, Saskatoon, SK
List Price: $185,000
Size:
1,620 sq ft
Surrounding Amenities
Safeway
Boston
Pizza
Original Joes
Bookstore
MARKETING PLAN

Segmentation


Target group



We will cater to health-conscious dessert
loving individuals
Ranging from children to adults
Moderate to high income individuals and
families
Positioning
“We provide the total quality
experience in indulgence.”
MARKETING PLAN – MARKETING MIX
Promotion:
Create hype & awareness during first
year


Grand Opening:
•
Media Coverage:
Global News Saskatoon, CBC Radio,
Wire 96.3FM
•
Giveaway donuts
•
Promotional vouchers & Free
Samples
•
Groupon advertising
Local events
Folk festival
 Taste of Saskatoon

MARKETING PLAN
Strengths
Weaknesses
-Premium gourmet products
- No direct competitors
-Low brand awareness
-Choice of suppliers is limited
-New to the community
Opportunities
Threats
-First-mover advantage
-Booming economy and increased
disposable income
-Unsaturated market of Saskatoon
-Entrance of rivals
-Regulations on food and safety
MARKETING PLAN – COMPETITIVE ANALYSIS
Competitor
Product
Price
Smaller
Alternatives
Cupcake Corner
Cupcakes
Cupcake Conspiracy
Cupcakes
3.00/each
27/dozen
2.50/each
25/dozen
1.75/each
16.00/dozen
N/A – only available for
special events/orders
Tim Horton’s
Doughnuts
0.79
N/A – no smaller
alternatives
JELLY MODERN
DOUGHNUTS
Doughnuts
2.25/each
24.95/dozen
1.95/each
24.95/16
MARKETING PLAN – COMPETITIVE ANALYSIS
Jelly
Modern
Cupcake
Corner
Cupcake
Conspiracy
Tim
Hortons
HUMAN RESOURCE PLAN

Motivational Incentives
Employee of the Month Program
• Employee discounts
• Employee incentive to attract business
•

Compensation
•

Committed to providing a happy, positive and professional
work environment
Suggestion Box
HR 5 YEAR COST PROJECTION
Benefits
hourly staff
Hourly staff
CPP
EI
WCB
Vacation Pay
Total payroll expenses
2012
2013
2014
2015
2016
78,260
3,874
1,393
1,260
4,151
80,216
3,971
1,428
1,291
4,628
82,222
4,070
1,464
1,324
4,744
82,278
4,172
1,500
1,357
4,862
86,384
4,276
1,538
1,391
4,984
89,302 91,534 93,823 96,168 98,572
OPERATIONS PLAN – HOURS OF OPERATION
Monday – Friday
Saturday
Sunday
7 am – 7 pm
8 am – 6 pm
9 am – 5 pm
OPERATIONS PLAN – TYPICAL DAY

Bake & prepare doughnuts

Take orders & serve customers

Upkeep facility

Reconcile cash/credit
transactions
OPERATIONS PLAN – SUPPLY ANALYSIS
“Quality Ingredients for a Quality Product”

Reputable suppliers from Saskatoon
Local ingredients
 Organic products


Basic Mix:
Sugar, Eggs, Flour, Milk
OPERATIONS PLAN – CAPITAL BUDGET
Capital Asset Investment
Machinery Equipment
Oven (3 ovens @ 10,000/oven)
$
30,000
Small walk in refridgerator (including installation)
Industrial dishwasher (including installation)
Industrial mixers
Espresso Machine
Utensils and tools
$
$
$
$
$
12,000
12,000
3,500
5,000
4,000
Land & Building
$
185,000
Renovations
$
35,000
Computer System (printer, cash register, computer)
Computer System (printer, cash register, computer)
System Software
$
$
2,000
4,000
Furniture and fixtures
Sales counter and display case
Shelving/Cupboards
Furnitures and fixtures
$
$
$
20,000
7,000
15,700
Total
$
335,200
Land & Building
OPERATIONS PLAN – FLOOR PLAN
STORE FRONT
Entrance
Espresso
bar
Table
Display
Case
Table
Table
Order
here
Pick
up
here
Bathroom
P
a
c
k
i
n
g
s
u
p
p
li
e
s
M
e
n
u
B
o
a
r
d
OPERATIONS PLAN – FLOOR PLAN
BACK OF STORE
Glass Window
Entrance
Oven
Counter Space
Oven
Walk-in
Fridge
Freezer
Dishwasher
Oven
FINANCIAL PLAN: DEBT TO EQUITY
2011
2012
2013
2014
2015
Debt
$230,000
$210,000
$190,000
$170,000
$150,000
Equity
$230,005
$302,500
$388,249
$482,225
$599,280
1.00
0.69
0.49
0.35
0.25
Rate
Assumptions
•No dividends are being paid out
•No additional debt will be added
•Our projected sales are reached to give us the R/E projection
used in calculation
FINANCIAL PLAN:
BREAK-EVEN ANALYSIS
2011
2011
Fixed cost
Selling-VC
w/out capital
investment
2012
2013
2014
2015
498,264 163,064 176,278 195,917 215,583 215,275
1.48
1.48
1.48
1.48
1.48
1.48
Unit Sales
(Doughnuts)
336,488 110,120 119,044 132,307 145,588 145,380
% of anticipated
sales
176%
58%
59%
63%
66%
63%
FINANCIAL PLAN: SCENARIO ANALYSIS
Possibility
Sales Sensitivity Analysis
Unlikely
Possible
Likely
% of projected sale
50%
75%
80%
90%
100%
Annual sales ($)
95,328
142,992
152,525
171,590
190,656
Net income
(At the end of Yr 5)
(72,693)
30,818
51,520
92,925
117,055
Cash Flow
(At the end of Yr 5)
(449,686)
15,493
108,529
294,601
528,413
NPV
(@ 25%)
(595,556)
-58,555
48,845
263,646
697,465
Nil
N/A
-7%
29%
57%
Nil
>5
>5
3.25
2.4
IRR
Payback period
(years)
CONCLUSION

Proven market (e.g. Calgary)

Knowledge & expertise from the Sisters

Large potential market in Saskatoon

Healthy & delicious doughnuts
QUESTIONS?
RISK FACTORS
Easily Imitable
 No brand recognition in Saskatoon
 Can customize doughnut recipes according to Saskatoon
taste eg. Saskatoon Berry Jam Doughnut

MARKET DRIVERS
Health issues – both negative (obesity, diabetes) and
positive (natural, organic) have continued to generate
new products
 Consumers crave indulging in richness and luxury
 Carry super-premium image to healthier segments

FINANCIAL PLAN - ASSUMPTIONS