Operations & Finances
Hifriends
Example3.pdf
Running head: FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES
Assignment 4 – Final Business Plan Submission C’real Bar & Smoothies
International Hotel Management
IHMN440
Royal Roads University
Jason Ripley, Instructor
April 10, 2020
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 2
Business Plan
C’real Bar & Smoothies
705 Johnson Street, Victoria, BC
Canada
587-225-9338
Email: [email protected]
April 14, 2020
Jacqueline Parra/Owner
2005 Sooke Road
Victoria, BC Canada
V9B 5Y2
587-225-9338
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 3
Table of Contents
Executive Summary ......................................................................................................................... 6
Company Description ...................................................................................................................... 7
Introduction ................................................................................................................................. 7
Company History ......................................................................................................................... 7
Mission Statement ....................................................................................................................... 7
Tagline ......................................................................................................................................... 7
Legal Status & Ownership ........................................................................................................... 8
Feasibility Analysis ......................................................................................................................... 9
Part 1: Product & Service Feasibility .......................................................................................... 9
Part 2: Industry/Target Market Feasibility ................................................................................ 10
Part 3 Organizational Feasibility ............................................................................................... 10
Financial Feasibility .................................................................................................................. 11
Overall Financial Attractiveness ............................................................................................... 13
Industry Analysis ........................................................................................................................... 15
Definition of Industry ................................................................................................................ 15
Description of Industry .............................................................................................................. 15
Industry Trend Analysis ............................................................................................................ 15
Key Success Factors. ............................................................................................................. 16
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 4
Organizational Structure ................................................................................................................ 17
Introduction ............................................................................................................................... 17
Market Analysis ............................................................................................................................. 20
Market Segmentation ................................................................................................................. 20
Selecting a Target Market ......................................................................................................... 20
Competitive Analysis Direct & Indirect Competitors ............................................................... 20
Competitive Analysis Grid ........................................................................................................ 22
Marketing Plan .............................................................................................................................. 23
Overall Marketing Plan ............................................................................................................. 23
Positioning ................................................................................................................................. 23
Points of Differentiation ............................................................................................................ 23
Pricing Strategy ......................................................................................................................... 24
Promotions Mix ......................................................................................................................... 24
Operating Plan ............................................................................................................................... 26
Operations Plan ......................................................................................................................... 26
Operations Strategy & Tactical Plans ........................................................................................ 26
Challenges and Risks ................................................................................................................. 27
Heart Of The House ................................................................................................................... 27
Front Of The House ................................................................................................................... 28
Hours of Operations .................................................................................................................. 28
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 5
Business Location ...................................................................................................................... 29
Facility & Equipment ................................................................................................................ 31
Operation Flow Diagram ........................................................................................................... 33
Explanation ............................................................................................................................ 34
Financial Projections ..................................................................................................................... 35
Sources and Uses of Funds ........................................................................................................ 35
Financial Statements .................................................................................................................. 35
Income Statement. ................................................................................................................. 35
Balance sheet. ........................................................................................................................ 36
Cash Flow Statement. ............................................................................................................ 36
References ..................................................................................................................................... 37
Appendix A ................................................................................................................................... 40
Appendix B .................................................................................................................................... 41
Appendix C .................................................................................................................................... 42
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 6
Executive Summary
The juice bar industry reaches the 5 billion dollar mark each year. With the upcoming
health trend, the juice bar industry will only increase in the years to come. However, these juices
and smoothies can cost anywhere over the $8 dollar mark for a fulfilling snack. There is a gap in
the industry specifically for the younger working individuals between the ages of 18-35 as there
is a lack of healthy food offerings at competitive prices. Cereal Bar & Smoothies (CBS) will fill
the gap in this industry and become the only cereal and juice bar in the city of Victoria.
CBS offers healthier food alternative options for those individuals who want to purchase
ready to eat meals and are budget conscious. They are proposing to operate in a prime location as
it is in the core of downtown Victoria. The cafe will feature local and international cereal and
offer nutritional cheat sheets for customers to be aware of sugar and calorie count they are
consuming. This youthful welcoming facility will provide good value for the product they are
purchasing.
The growth rate for juice bars is at a constant increase of 1.4 percent. This 5 billion
dollar industry is in its growth phase life cycle. This has been due to the movements of
substantiality and the trend of health. Moreover, the management team at CBS is composed of
highly skilled individuals with several years of Hospitality and leadership experience. These
CBS members will be able to take great care of the young target market demographic who will
be eager to enter the CBS premises.
Join the CBS Team during its 2021 brand opening of the first and only cereal bar the city
of Victoria has ever witnessed.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 7
Company Description
Introduction
This business plan caters to C’real bar & Smoothies (CBS), a self-serve cereal bar that
also provides healthier juices and smoothies. The focus for CBS is to sell nutritional cereal bowls
and smoothies. This bar will offer seating but will mostly be a grab and go for the smoothie.
Seating will be more utilized by those purchasing a delicious cereal bowl. At CBS, there will be
endless cereal bowls combinations based on each individual’s taste as well as a menu for those
who like to follow patterns. Moreover, C’real will be located in downtown Victoria, BC.
Company History
The creator of this company—Ms. Jacky thought of this idea as she was walking through
downtown Victoria and wanted to have a quick grab and go bite, but most options were either
fast food or high-priced healthy smoothie bowl. Since there was not an option, Ms. Jacky came
up with CBS so no one in Victoria would ever have to choose between a non-healthy food
alternative and going over-budget for breakfast or lunch.
Mission Statement
The mission statement for CBS is to create budget-friendly healthier food and drinks alternatives.
Tagline
The slogan for CBS is ‘C’riously good food and drinks’. Their values are honesty,
efficiency, and loyalty. At CBS, they want their stakeholders to know they work with the utmost
honesty and efficiency, so they never have to worry about their food taking too long and that is
how they obtain their stakeholders’ loyalty.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 8
Legal Status & Ownership
CBS will work under a Limited Liability Corporation (LLC) incorporated in the
province of BC. It is currently owned by Jacqueline Parra. LLC was implemented to minimize
any potential risk or liability towards the owner.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 9
Feasibility Analysis
For further detail regarding feasibility, refer to Appendix B and C for the SWOT and
PEST analysis.
Part 1: Product & Service Feasibility
Desirability. The concept of CBS is exciting and reasonable towards potential
customers as it targets younger people between the ages of 18-35 years of age who are looking
for healthy budget-friendly options. Customers will be excited about having an alternative to go
out for breakfast or lunch other than conventional restaurants that take long-seating times, quick
unhealthy options like fast-food or high-end on the go juice bars. As per the concept test shown
to 5 individuals, CBS would be highly beneficial as an alternative for on-the-go food and
beverage. Nonetheless, CBS will be heavily relying on individuals who live close or work in the
Victoria downtown area. Thereby, during the off-season it will be hard for CBS to stay
competitive and remain open unlike many restaurants situated near that are unfortunately only
open for a limited time during the year.
Demand. Due to CBS’ serious intent to succeed during its first three years, they have
created a short buying intentions survey and surveyed 15 Royal Roads University students.
These were conducted in the city of Victoria with the participants aging between the ages of 20-
35. Students were given a concept statement explaining CBS and its benefits. At the end of this
survey, 93% of surveyed people circled “definitely would buy” to CBS. This shows how there is
a demand for a cereal bar and juice bar to open in the Victoria as there is not an abundance of
budget-friendly healthier food and beverages alternatives. Moreover, CBS owner will also attend
industry conferences and trade shows after contacting with representative from IBIS World,
BizStats, and County Business Patterns.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 10
Part 2: Industry/Target Market Feasibility
Industry attractiveness. The attractiveness of a bar that offers both unlimited cereal
options and a juice bar are high. As per the Skift article, the trends that CBS contains being
health and sustainability have heavily increased in the past five years and are expected to keep
growing (Skift, 2019). The industry’s cycle is young and has a steady current growth rate. On top
of that, there are low barriers to entry and the industry is fragmented with two businesses taking
a large market share being Booster Juice and Jugo Juice Canada wide (CourseHero, 2020). For
instance, different competitors are entering the market in Victoria pointing out its popularity.
Target Market Attractiveness. CBS targets working individuals between the ages of
18-35 years old. The competitors for CBS that share a similar target market are Jusu Bar, Orange
Bubble Tea, and Booster Juice. Jusu’s growth rate has been exceedingly high as their opening
was in 2014 and they have 3 stores total in Victoria (JusuBar, 2018). Booster Juice is the leading
juice bar in Canada and holds over 300 stores mostly in Canada and the USA (Financial Post,
2017). This shows a growth rate in CBS’ target market.
Market Timeliness. This is good time to enter the juice and cereal industry due to the
momentum it has gained over the past five years with the strong health trend. In addition,
competitors do not offer competitive prices for their products and services as they have
positioned themselves on the high-end product levels. This is advantageous for CBS as they do
not directly compete for the same audience. On top of that, there are no cereal bars in the city of
Victoria, making CBS a popular opportunity to enter the hip and youth market.
Part 3 Organizational Feasibility
Management Prowess. CBS is heavenly blessed with a strong management team as
they are highly educated, they all hold a bachelor’s degree and have over 10 years of experience
in the service industry showcasing their innate passion for Hospitality. These individuals have
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 11
been selected due to their innovative leadership skills and creativity for coming up with short-
and long-term solutions. The following section will better analyse the management team of CBS.
Resource Sufficiency. The resources needed to start CBS will be mostly comprised of
the rental space, refrigeration suppliers, and equipment like blenders. The cereal section will be
self served and charged by the weight. This will help with profit margins. Canadian suppliers
will be looked at first like ‘Holy Crap’ from Vancouver but due to proximity, CBS will have to
get some of their supplies from USA. The support of the local community is expected to be large
as CBS is intriguing towards the younger generation and the title alone is welcoming to
wandering individuals of the city of Victoria. There is a potential to form favorable business
partnerships with Destination Greater Victoria to bring more than just locals to CBS.
Financial Feasibility
The total start-up cash needed is $56,723.64 CAD. The total amount will be an
investment from the owner Ms. Jacky as she has recently inherited a large sum amount of money
from her grandmother. The following financials have been gathered through market comparison,
industry analysis, and strategic analysis.
Capital Investments Amount Property $ 0.00 Furniture and fixtures $ 10,000.0
Computer equipment $ 1,200.0
Other equipment $ 5,000.0
Operating Expenses Amount
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 12
Legal, accounting, and professional services $ 1,800.0
Advertising and promotions $ 4,000.0
Deposits for utilities $ 1500.0
Licenses and permits $ 350.0
Prepaid insurance $ 3,500.0
Lease payments $ 3,650.0
Salary and wages $ 355.0
Payroll taxes $ 18.6
Signs $ 350.0
Tools and supplies $ 10,000.0
Starting inventory $ 10,000.0
Cash (working capital) $ 5,000.0
Total Startup Cash Needed = $ 56,723.64
Comparison of the Financial Performance of Proposed Venture to Similar Firms
The following estimates are off the industry averages.
Estimate of Proposed Venture’s Annual Sales—Year 1
Explanation of How the Estimate Was Computed
Estimate of Year 1 Sales $ 163,676.36
Summary: How proposed annual sales, on average, compares to similar firms
Below Average Average Above Average
The Annual Sales for year one was calculated by estimating the number of sales per day being $600. This number includes both cereals and smoothies’ sales. Then, the number was multiplied by 365 days to get the annual sales. The start-up cash
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 13
needed was subtracted to attain the year one estimate of sales.
Due to the first year being opened, it is expected for C’real Bar & Smoothies to perform below average compared to its competitors.
Estimate of Year 2 Sales $ 273,750.00
Summary: How proposed annual sales, on average, compares to similar firms
Below Average Average Above Average
The Annual Sales for Year two was calculated by estimating that the number of customers per hour will go up by 1.5 increasing the sales per day by $150 which ultimately results in $750 in daily sales. The $750 was multiplied by 365 which concurred to the Year Two estimate of sales
Net Income
Estimate of Proposed Venture’s Net Income—Year 1
Explanation of How the Estimate was Computed
Estimate of Year 1 Net Income -$ 2,398.64
Summary: How proposed net income, on average, compares to similar firms
Below Average Average Above Average
The net income was a result of utilizing salaries and wages of $355 multiplied by 365 and the cost of goods sold (COGS) also multiplied by 365. The total expenses of $166,075 was then subtracted from the estimated year one sales.
Estimate of Year 2 Net Income $107,675.00
Summary: How proposed net income, on average, compares to similar firms
Below Average Average Above Average
The Year two Net Income estimate was computed with the same methods as previously stated on year one.
Overall Financial Attractiveness
The financial performance of similar businesses is higher than both year one and year
two estimate of sales. The reason for this is that they have arrived in the industry earlier and
situated themselves with a more luxurious product as well as they do not offer a cereal bar.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 14
However, CBS remains feasible as their main advantage is that consumers have an alternative for
healthier food items and drink at competitive prices.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 15
Industry Analysis
Definition of Industry
CBS falls under the code of 722515 as per the NAICS Association (NAICS Association,
2018). This code emphasizes on the retailing of non-alcoholic drinks and lighter meals which are
the essentials of CBS as their focus will mostly be selling smoothies and cereal bowls.
Description of Industry
The juice bar industry remains steady as it has continuously grown over 4 percent with
more than 5 billion USD sales each year (Egelhoff, 2020). In Victoria alone, new juice bars are
opening up just highlighting the industry growth. However, the growth rate for cereal
consumption in Canada has slowed down in the five years due to people having higher
disposable income and opting to buy ready to eat meals on the go (IBIS World, 2019). CBS will
take advantage of the decline in cereal consumption to mix it with a juice bar to offer a
completely different product and create its own niche.
Industry Trend Analysis
Environmental trend. CBS provides a healthier food and drink alternative, although it
still contains medium-high levels of sugar. In the marketing section, this will further be analyzed
to prevent a negative image to CBS. On top of that, CBS will provide a ‘cheat-sheet’ where all
products will have a standard average calories and sugars content to show transparency to
customers. Furthermore, CBS hits the environmental trend as it focuses on wellness and heath.
As per the BBC news article, people have already begun to alter their diets and lifestyles to heal
and take better care of their body (BBC News, 2019). With global viruses currently occuring, it
is now more important for individuals to take better care of what they consume which enhances
this environemtal trend.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 16
Economic trend. People are choosing to dine out and purchase less cereal from retail
stores due to higher disposable income. This is an advantage for cereal bars and juice bars as
they can obtain that same clientele that want to dine out and that are health and budget conscious
with their meal purchase.
Growth Projections. As highlighted on Appendix A, the size of the industry in the
following three years is expected to grow at 1.4 percent as per IBIS world as that has been its
steady growth from 2013-2018 (IBIS World, 2018). With that, it is expected that CBS will grow
at a slightly lower than average yearly growth for its first three years. Based on the trend analysis
and the current growth rate, the industry of Juice Bar & Smoothies is expected to reach just
under the 5.5 billion dollar mark.
Key Success Factors.
• Adaptability
• Great Profit Margin
• Low Operating Costs, specifically Labor
Because of the health trend, CBS will obtain different types of cereals from regular low
sugar base to the higher end gluten-free. In general, cereals have a long shelf life minimizing
food wastage. Cereals can also be customized to reflect holidays and celebrations of the city of
Victoria. Additionally, cereal cafes can be a high profit margin business due to the low labor
involved and the non-perishable items (Katom, 2020).
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 17
Organizational Structure
Introduction
The team at CBS is composed of an owner, general manager, supervisor, and 3 full-time
employees. All these essential employees of CBS share similar values which is to serve guests
and to innovate current processes to create more efficient and memorable moments for
customers. Due to CBS being a limited liability corporation, the only investor is the owner—Ms.
Jacky.
Jacqueline P., Owner
Jacqueline P. has had previous experience working in a Food & Beverage and Rooms
Operations department consisting of diverse teams of over 100 employees. Working within those
departments was where her leadership skills, attention to detail, critical thinking, and friendly
demeanor were highly exercised. She possesses excellent communication skills enhanced by her
former Sales Leadership role. Moreover, she was the previous Executive Chef for Blue Compass
Restaurant located in Calgary, Alberta. The restaurant achieved high levels of success during its
Owner (Jacky P.)
General Manager (Claire
S.)
Team Member (Yuto)
Team Member (Lylianne)
Team Member (Yuri)
Team Member (Amy)
Supervisor (Ryan H.)
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 18
first three years and was published in local magazines as one of the “Best New Top 10
Restaurants”. During her time at Blue Compass, she created an innovative upscale menu
consisting of small portions of international seafood dishes that aided in their early success.
Claire S., Manager of CBS
Claire S. has worked in the hospitality industry for over 12 years. After graduating from
university in 2014, she immediately gained a Food & Beverage leadership position for over two
and half years in Edmonton, Alberta. In addition, she worked at two Marriott properties in both
Edmonton and Victoria as a Guest Service Supervisor with over 20 employees for three years.
These intensive work experiences provided her with valuable opportunities to build her
leadership, innovative, and creativity skills. She is a great positive leader which is why she will
be a lovely addition to the CBS team.
Ryan H., Supervisor
Ryan H. has over 19 years as a front-line operation supervisor in the Housekeeping,
Front Desk, and Food & Beverage departments. Ryan thrives in an industry that is built on
interpersonal interaction where you can get to know the guest, which helps serve them better. In
addition, he was part of a task force to improve banquet food delivery processes where he
excelled with his creativity and innovation tactics. His vast educational background including a
college diploma and a bachelor’s in the Hospitality industry will serve as an asset as he joins the
CBS team.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 19
Team Members
Yuto, Lylianne, Yuri, and Amy are all valuable assets to the CBS team. They all have
over 25 years combined experience in the Hospitality industry. They each have graduated from
the same university with a bachelors in Hotel Management showing their capability towards a
greater future. These four members were selected as they have shown promising skills when
soling problems in the scholar and professional area. Most importantly they truly care about
customers which makes them ideal to be the front-line operators.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 20
Market Analysis
Market Segmentation
The target market for C’real Bar & Smoothies are women and men ages 18 to 35 that are
working professionals earning between $20,000 - $35,000. As per the website Statistics Canada,
the city of Victoria has on average 23,857 people from ages 18 to 35 (Statistics Canada, 2016).
CBS wants to target the people earning between $20,000-$35,000 who are just over 14,000. This
is a positive news for CBS as the city of Victoria workforce has been increasing which states
more people between the said age segment will have easy entry to a job therefore ensuring the
target market has access to a disposable income (Duffy, 2019).
Selecting a Target Market
The primary market for CBS are working individuals with a focus on the health trend,
millennials, centennials, students on a budget, and working professionals in the downtown area
looking for budget friendly food alternatives. These were selected as they better highlight CBS’
age demographic.
Buyer Behavior
The decision makers to purchase a product from CBS are the end user juice and cereal
eater. Therefore, the target market is the target audience. The decision to purchase something
from CBS is not complex as it can be easily bought at the spur of the moment as most of the
products will be $10 CAD or less. Once the customer purchases the product, they can choose to
sit or take it to go. The buying process would take no longer than 6 minutes or less. This is a
competitive advantage due to the good products and great fast service.
Competitive Analysis Direct & Indirect Competitors
Jusu Bar. A higher end nutritious juice bar that serves food at most prices being $10
(JUSU Bar, 2018). Their target market are consumers with a heavy focus on health and with
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 21
dietary need like dairy free, gluten free, and vegan. Their menu consists of juices, sandwiches,
and snacks. Due to their high prices, individuals with a narrower disposable income will think
twice before purchasing a product from Jusu.
Booster Juice. This Edmonton born franchise has successfully expanded to downtown
Victoria (Booster Juice, 2018). Their menu consists of smoothies, paninis, and juices. Booster
Juice has shown great amounts of success Canada-wide. However, because they are a franchise,
they do not resemble a sense of locality which the people of Victoria tend to seek for.
Big Orange Bubble Tea. This franchise offers different types of juices and a limited
food menu not including their lack of sustainable to-go plastic-free alternatives. Because they are
located inside the Bay Centre mall, it truly limits their audience to those inside the mall.
Moreover, Big Orange has a very limited uniqueness and wow-factor to many of their stores
including the Victoria franchise. Thereby they are unable to provide an experience but rather a
humble product.
Rise N Grind 1294. This local restaurant offers a variety of hot sandwiches, wraps,
coffees, and basic cereal menu (Rise N Grind 1294, 2019). Their biggest competitive advantage
is the hot food they serve are at competitive price in the downtown Victoria area. Obtaining hot
food at competitive prices in the entire Greater Victoria area are rare to find.
Furthermore, CBS has indirect competitors being: La Fogata Latina Restaurants, Freshii
and Chatime. All of these competitors offer similar services and products, but they do not
position themselves in the healthier alternatives at competitive prices. Although they all offer
juices and some offer meals, none of them provide a healthier ready to eat food and drink
alternative.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 22
Competitive Analysis Grid
Factor JUSU Bar Booster Juice Rise N Grind 1294
Location Even Advantage Even
Service Even Even Advantage
Quality Disadvantage Advantage Even
Price Advantage Even Even
Table 1-Competitive Analysis Grid. (2020).
As shown on the table above, CBS has multiple strengths upon its competitors. This is
because of the prime location of downtown Victoria as well as the efficient quality of service and
products. In addition, the selling price is a key factor for having advantages over competitors.
There is a potential risk as CBS products sell for less, they need to sell more quantities to
become profitable which can be done as long as staffing is done properly, and mistakes can be
minimized during the first 2 years.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 23
Marketing Plan
Overall Marketing Plan
The overall marketing plan for CBS: Ceriously Good Food and Smoothies is to attract
people who fit under the age range of 18 to 35 years old who live in the Downtown Victoria area
and are looking for an inexpensive healthier alternatives to a quick grab & go food and drink
replacement. These youthful individuals who happened to be health-focused will be aware of
CBS by the marketing methods which will be social media with a focus on Instagram and
Facebook, magazine ads, posters, and flyers. CBS will also contain partnerships with local Food
magazines and destination Greater Victoria to better demonstrate both locals and tourists of
Victoria’s latest and only Cereal Bar & Smoothies.
Positioning
CBS’ main target market would be working individuals between the age of 18-35. As
previously stated on the market analysis, CBS will position itself as a mid-range healthier food
and beverage alternative for individuals with a desire for healthier food and drinks alternative at
a reasonable price (Parra, 2020). CBS is meeting the hole in the market as it will be providing
healthier food and drink items at mid-range prices. Customers will be able to choose between an
abundant yet organized menu, order a product, and enjoy the innovative youthful atmosphere of
CBS. If they opt for a quick grab and go product on a recyclable or compostable container, they
may also do so.
Points of Differentiation
• CBS offers a cereal bar with unlimited yet organized options that customers can choose
from. They do not have a fixed charge for cereal but instead CBS will sell by the weight
similar to frozen yogurt franchises. This gives flexibility to people who wish to customize
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 24
their food based on their dietary or financial needs as well as give them a diverse
selection to choose from. CBS competitors do not have these options available.
• CBS will also be serving juices and smoothies, which will be strategically priced at the
$5.50-$10 range. Customers will be able to spend $10 and obtain a nutritious large-size
smoothie or a small size smoothie and a cereal bowl.
• CBS service will be personalized to the individual with a heavy focus on friendliness and
efficiency. If a customer wants to take their time deciding which toppings they would like
on their cereal, CBS members will adapt their services to best accommodate each
customer. If a customer would prefer an efficient transaction, then the team members will
be properly trained to adapt to that setting as well. This is a competitive advantage from
their competitors as most choose to focus on either a fast transaction or a sitting down
restaurant style.
Pricing Strategy
CBS will abide by a cost-plus pricing method which can be successfully done by
calculating the costs of food and beverage ingredients from the suppliers and human labor
involved, then adding a mark-up. The mark up will be a percentage of the cost of goods sold
(COGS) to guarantee CBS has a large enough profit margin to pay for all costs and still remain
profitable. CBS has a risk of potential setting prices too low thus risking profits. For this reason,
CBS will sell similar healthier alternatives at competitive lower prices but not at the expense of
losing profits.
Promotions Mix
CBS will utilize the best platform to advertise to its target market including advertising
through public relations, online marketing, direct marketing, and seasonal sales promotions. CBS
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 25
will be active in social media specifically in Instagram and Facebook as they are both best for
aesthetics advertisement. Public relations will be completed by attending local events including
Dine Around Gala, IMPACT Conference and YYJ Eats. As well, attending events where the
majority of CBS demographic will attend in large quantities including Victoria Pride week and
Ska Festival would provide CBS great exposure. The point is to expose CBS to as many of the
young working individuals as possible within their target market range to increase a boost of
sales during its first few months. The direct marketing will be completed by acquiring potential
customers emails so they can sign into the C’realist so they can get reminder of our monthly and
weekly popular products. This information will be gathered through Mail Chimp to more
efficiently send emails. Lastly, the promotions area will attract customers at the opening week of
CBS as they will be proving free cereal samples and do random prizes for individuals who sign
up on the C’realist to get the latest on Victoria’s only cereal and juice bar.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 26
Operating Plan
Operations Plan
Having CBS be a mid-scale healthier alternative food store implies they must be
extremely cautious of their cost and prices as their profit margins can change if prices become
too low. CBS would cater to young working individuals that would opt for a reasonably priced
healthier alternative which is they must work hard to achieve just that and ensure our prices do
not increase unreasonably over the years due to inflation.
The strategy for their prices to not increase unreasonably is to have a great staff team, to
increase efficiency daily sales target, and minimize turnover which can be a killer for small local
businesses. A different approach will be by maintaining a positive cash flow after the first three
years of operation and if worse comes to worst, set up a financial facility to aid in improving
cash flow and negotiate a new rental agreement a basically help free up cash for CBS (WF
Financial Solutions Ltd, 2017)
Operations Strategy & Tactical Plans
Development Status & Tasks. Upon funding from the owner, CBS is will open at
Ground Floor - 705 Johnson Street, Victoria, BC. The following table displays milestones that
have been both finished and are yet to be completed to the opening of the cereal store.
Completed Milestones January – December 2019 Completed feasibility analysis January 2020 Selected Management department February 2020 Successfully applied for licenses and rental
agreements Conducted surveys to an audience similar to the target market and over 90 percent of surveyed would purchase products from CBS
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 27
Milestones to be Completed September 2020 Purchase equipment and adapt the facility to
CBS aspired atmosphere December 2021 Hire and train CBS members December - January 2021 Initiate marketing strategies January 2021 Create a grand opening with CBS with
random prizes and samples
Challenges and Risks
The first risk would be a malfunctioning of the refrigerators which can happen. If this
occurs, the perishable items will be lost and thousands of dollars will be wasted thus delaying the
opening day or starting the year off with a loss of assets before opening. For this reason, is why
CBS will only be purchasing reliable equipment that has had positive reviews in the past by food
and beverage providers. The second risk is the exceeding costs of budgeted items as that would
require further funding from the owner and maybe frown upon. This will be avoided by being as
accurate as one can possibly be when creating the financials section of this plan.
Heart Of The House
The ingredients for everything related to the cereal bar will be purchased locally as much
as possible. CBS will use Sysco as a supplier due to its proper reliability. It is also in their best
interest to build a relationship with Sysco to ensure a smooth business. Regarding seasonality,
CBS will have to acquire many of its fruits and vegetables frozen to last longer during the
offseason. Inevitably, some cereal will have to come from the U.S.A. but CBS will do its best to
obtain its basic ingredients like milk, eggs, and apples from Vancouver Island and British
Columbia as its ingredients (BC AITC, 2014). With regards to quality control, cereals have a
long shelf-life but anything perishable will have to be monitored on a weekly basis. There will be
a weekly inventory done by both the general manager and supervisor. In addition, a monthly
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 28
inventory will be performed on the first Monday of the month by the owner and manager of the
store which will result in great and fresh quality products at each purchase. When suppliers drop
off food and drinks, employees will be able to arrange the products in dry storage and
refrigerators in FIFO mode (First In First Out). All employees at CBS already hold a WHIMIS
and MSDS certification as it was a requirement when completing their college diploma. With
that, they will be aware of how to practice food-safe sanitations including responsible receiving
and storing of food and handling chemicals for deep cleaning.
Front Of The House
Customers at CBS will be welcomed by a friendly demeanor and the delicious smell of
ready to eat food. The properly trained friendly ‘C’real members’ staff will be able to explain
how CBS works as the store is composed of a cereal bar with a personal choice of items or a
menu cereal bar and smoothies bar section where you order the smoothie size and pick from our
10 delicious nutritious flavors. Staff will be trained in upselling to incentivize customers to get
that extra spoonful of chia seeds to start the day right and create a higher amount of revenues.
Upon the success of the business, new store goals will be set weekly and if the team achieves it,
each member will win a $10 gift card which they can redeem right away.
Hours of Operations
CBS will be open seven days a week from 6:30 am to 2:30 pm. Opening hours during
holidays will start at 8:00 am and close at 2:30 pm and will be announced via social media as
well as there will be signs posted at the entrance door. The number of people needed from 8:00
am – 2:30 pm are 2 to 3 CBS members including a manager or supervisor on shift. One team
member will overlook the cereal area while the other will look at the juice area and cash register.
When it becomes busy, there will be one person at the cash register to ensure efficiency. The
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 29
next table highlights the usual working day. The table would adapt according to the climate and
the season it is on.
Time Details CBS Manager CBS Member 6:00 am Opens cash register
and ensures everything is set for the day including light cleaning
6:30 am Open Store Start Shift 7:00 am Breakfast rush
begins In charge of the cereal section
In charge of the juice section and cash register
9:30 am Breakfast rush over Ensures everything is stocked after rush and heads to back to answer emails and update any CBS information as necessary
Takes care of juice and cereal section. Does cleaning during the slow time
11:45 am Lunch rush begins Manager goes to the front of the house and takes over the juice section. Upsells juices and smoothies accordingly.
Takes over juice section and cash register. Upsells cereal bowls.
1:30 pm Lunch rush ends Manager stays at front and helps with any stocking cleaning and any mistakes or errors during lunchtime
Member stocks store and performs light cleaning duties
2:00 pm – 2:30 pm CBS closes Manager ensures everything is sealed and stored appropriately. Then takes the member to the back to count cash register and sign member off.
Member re-stocks and preps for the next day. Finishes cleaning all areas of CBS, including small areas to deep clean
Table 2 - Regular Working Day (2020)
Business Location
CBS will be located in the downtown area of Victoria, specifically on the Ground Floor -
705 Johnson Street, Victoria, BC. This location is of great importance because it has a heavy
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 30
traffic load due to transit stops and people walking nearby to get to their respective destinations.
CBS will take advantage of pedestrian traffic and lure them into the cereal cafe as the property
has large glass doors and windows that serve as a marketing window. During the summer, this
area gets more populated due to tourists which is one more advantage of having this location.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 31
Facility & Equipment
The main three appliances for CBS will be a bar to hold the cereal and cold toppings,
Vitamix blenders as they have been used by other juice companies due to their durability and
Figure 2- Photograph of Johnson Street Retail Space. (2020). Retrieved from: https://sl2- prod.s3.amazonaws.com/user_assets/original/9b2eb7bba27805a4a5525febdba0260917996a43.?1585650176
Figure 1- Photograph of Johnson Street Retail Space. (2020). Retrieved from: https://sl2- prod.s3.amazonaws.com/user_assets/original/9b2eb7bba27805a4a5525febdba0260917996a43.?1585650176
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 32
reliability, fridges, and freezers. On top of this, CBS will also have a dishwasher and
technological tablets to have more efficient transactions. It is important to acquire a reliable bar,
blenders, and fridges because they ensure the quality of our products is up to the highest
standards. The following list details the equipment needed to start CBS:
Type Equipment Reasoning Furniture 3 x Small plastic tables
6 x Medium to large bar stools
This is to provide options for those customers who would prefer to sit down at a youthful cereal bar. Material is plastic for easy cleaning as cereal and juices are bound to get sticky.
Kitchen equipment: 5 x Vitamix blenders 1 x under-counter dishwasher 1 x Samsung 30 in. 21.6 cu.ft Stainless Steel French Door Refrigerator with Digital Inverter Technology 1 x Eurodib 23 cu. ft. Solid Door Freezer
Vitamix blenders are highly durable and reliable and are used by other competitors. The under-counter dishwasher is recommended by juice bar companies. Both the refrigerator and the freezer have great reviews and truly make their money worth.
Electronic equipment: 2 x Low-cost POS system (Micros) 2 x NFC Payment Machines 1 x Security Camera 1 x 65in Television
The POS system has great reviews and is at a low cost which CBS is focusing on. The security camera will be partnered with Telus as they will be the providers for the WiFi. The television is of 65 inches to give the youthful customers of CBS a moment of relaxation.
Table 3- Equipment for CBS.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 33
Operation Flow Diagram
Start Customer enters CBS
Employees greet customers
- Share Specials - Explain menu
Customer decides what to order and whether they’re staying or not
Employee takes
payment
Customer chooses to sit or
take it to go
Clean sitting area
Exit
Employee makes cereal
bowl/smoothie
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 34
Explanation of CBS Flow Diagram. The diagram above shows a CBS’ customer’s
journey at this cereal store. Upon entering CBS, they are welcomed by a friendly member who
shares the daily special and explains how CBS works. When the customer decides what to order,
they have the option to take the items to go or sit at the café. The customer can either make their
customizable cereal, order one from the menu, or order a smoothie. Upon receiving their order,
the customer would have gotten a product to fulfill their physiological need of hunger but also
their need for esteem as a member of CBS would have brightened up their day with their
uplifting customer service.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 35
Financial Projections
Sources and Uses of Funds
The total capital needed to start CBS is $56,723.64 CAD. The owner Jacqueline has
received a recent grant from her grandmother which she will be able to utilize to open up CBS.
The use of funds will be the following:
Furniture
$ 10,000.0
Computer equipment
$ 1,200.0 Appliances
$ 5,000.0
Legal & accounting services
$ 1,800.0 Advertising and promotions
$ 4,000.0
Deposits for utilities
$ 1,500.0 Licenses and permits
$ 350.0
Prepaid insurance
$ 3,500.0 Lease payments
$ 3,650.0
Salary and wages
$ 355.0 Payroll taxes
$ 18.6
Signs
$ 350.0 Tools & Supplies
$ 10,000.0
Starting inventory
$ 10,000.0 Cash (working capital)
$ 5,000.0
Total Required Funds
$ 56,723.64
Financial Statements
Income Statement. It shows a promising start for CBS as the revenue for the first year
is just with the industry average, but the net income becomes right under the industry average of
nearly 25% which is expected since it is Year One of operations. Due to CBS being part of the
cereal café and juice bar, a 25% profit margin is just under the industry average. The COGS is 15
percent of the total net sales. Moreover, wages and labor are calculated as 30 percent of net sales.
Overall all expenses are distributed through the years with a heavy load on labor, marketing, and
lease payments. In the years 2022 and 2023, CBS is expected to slowly increase its revenue and
profits to that of the industry average.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 36
Balance sheet. The strength of the balance sheet is that it limits its liabilities due to the
owner Jacqueline providing a robust investment from the beginning. The assets CBS has are
potent as the positive cash flow statement aid in the help of it.
Cash Flow Statement. The cash flow statement perfectly highlights how much
inventory is going to be purchased each month and the net income surrounding it. It is expected
to be working with over $4000 positive cash from the beginning due to a strong marketing
campaign.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 37
References
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FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 40
Appendix A
Figure 3-Parra, J. (2020). Size of Juice Bars & Smoothies Graph.
5.15 5.2 5.25 5.3 5.35 5.4 5.45
Year 2020
Year 2021
Year 2022
Size of Juice Bars & Smoothies
Sales Billions
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 41
Appendix B
Strengths: • Strong management and team members as they are all experienced and contain high skills in the hospitality industry
• More than one target market including millennials, centennials, students on a budget, and working professionals in the downtown area looking for budget-friendly food alternatives
• Fills the gap in Victoria by providing competitive prices of healthier food products
• Takes advantage of the health trend • A low number of direct competitors and only cereal bar place in Victoria
for the unique factor
Weaknesses: • Direct competitors are well established Canada-wide and are mostly franchises which mean they have easier access to marketing
• Strategy to sell products may fail due to internal mistakes hindering financial performance
• Although CBS uses new technology, they are choosing a lower-cost tech with a good reputation. There is always a cost to having lower-end products.
Opportunities: • Hitting the niche market for young working individuals looking for budget-friendly healthier food alternatives
• There is a global influence of consuming and purchasing healthier products—health trend
• When the US dollar becomes strong, more tourists will be inclined to purchase products from CBS
• The target market looks for inexpensive alternatives as they look for more than a product but an experience. CBS provides good products and a great efficient experience.
• Depending on the season, it will be easy to follow sunny trends for the development of juices and smoothies. It would be easy to advertise those delicious summery drinks on CBS social media platforms for extra exposure.
• The City of Victoria workforce is growing which means the target market for CBS will have access to a disposable income
Threats: • If a pandemic occurs, it will inevitably affect the hours of the business and will likely close as it is not an essential business.
• If the US dollar drops, tourists will be more inclined to save their traveling money as CBS products will no longer be as affordable.
• The city of Victoria is in close proximity to the state of Seattle, USA. If they undergo an attack, the city of Victoria will be affected as many of its tourists come from that area.
FINAL BUSINESS PLAN: C’REAL BAR & SMOOTHIES 42
Appendix C
Political Economic Social Technological
The government of Canada states that the consumption of drinks with higher sugar amounts such as juices and smoothies have declined over the past decade.
Due to the more stable economy in Canada and a decline in unemployment, people may not desire to eat cereal.
Environmental concerns for healthier options are on the rise.
With technological advances, it is easier to purchase different products like a POS system at much more competitive prices than 5 to 10 years ago. This facilitates start- up costs.
Imports to Canada has decreased in the month of January to a peak. This is disadvantageous for CBS as it will have fewer options to gather supplies from (Government of Canada, 2020).
Due to the increase in disposable income, people opt to dine out and spend ready to eat food outside.
Different generations including millennials and centennials demand a healthier alternative to lower price items.
Easier access to promote a business to active social media users. This can even be further tracked down to location and range within the CBS facility.
The manageable process to acquire a business license through the city of Victoria (City of Victoria, n.d.)
The CAD dollar has been at a stable average of 75 cents per 1 USD for the past 12 months which will aid the sales of CBS products to USA tourists during the summer season.
The city of Victoria holds a strong pride in the locality which CBS will exploit this advantage to its demographic.
The advanced technology in Japan and South Korea is now able to cook a hot breakfast without the use of human labor. This is a threat for CBS if an investor decides to bring that concept into the city of Victoria.
