executive summary
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ZihanKongCapstoneCourseProject85cBakeryCafeBusinessPlanv.7.pptxCapstone Course
Project “85c Bakery Café”
Business Plan
Zihan Kong
1
Agenda
Main Business Idea Plan
Problem
Solution & Value Proposition
Product Development
Operating Model
Operation Management
Administrative Structure
Target Consumers-Segments
Market Analysis
Competitive Challenge
Business Model
Branding
Executive Summary
Main Business Idea
Plan:
Expand new store in NYC and offering new meal plan and food delivery service in 2021
In 2022-2023, expand new service to all US stores.
Products: Beverage & bakery
Service: Food delivery
Location:
New York City in 2021
All US in 2022 and 2023
Price: Affordable
Target: Young adults, busy workers, college students
85C
Bakery Cafe
Problem Solution & Value Proposition
New Yorkers have the longest average working week among the 30 major cities in the United States
Those people live in New York who cannot have enough time to enjoy their breakfast or lunch.
Many people, especially young people, or young mothers, don't know how to match nutrition.
Waste time in process of ordering
We offer customized (DIY) meal plans as weekly and monthly, also we hire professional nutritionist to design meals.
Affordable price with high quality
We offer delivery service as weekly, or monthly depend on your meal plan.
We have own storage warehouse and delivery system of raw materials to ensure every materials are fresh and non-reused
We offer both instore and online service that save people ordering time
Product Development
The company plan to open a new store in NYC and offer meal plan with food delivery service both online and instore
Manufacturing & Sourcing (Supply Chain)
Every raw material will be offered by our own warehouse directly from industry.
The raw materials will be processed in the store
Sale directly to customers
Pricing:
Bakery: $3-5,
Drinks: $2.75 to 4.25
Delivery fee
Weekly plan - $7.99/week ($1.14 per day)
Monthly plan - $17.99/month ($0.6 per day)
Membership
$9.99/Month
$2.99/Week
Operating Model
Inventory Management
Order
Material list
Production
Quality Assurance
Safe production
Partially Prepared Products/ Finished product
Customer feedback
Instore
Shipment
Project Management
| Before Launch | Year 1 | Year 2 | Year 3 | |
| Hire and Training Employees: (managers, nutritionist, pastry makers, drivers) Advertising | Jan.-March | Open new store and launch new service Evaluation of operations and performance Promotions for sale | Launch new service all over the US. Launch new products (food and drink) Negotiate cooperation with College and companies | Negotiate cooperation with College and companies Evaluation of operations and performance |
| April-June | Unit sold surpass 80,000 Promotions | Evaluation of operations and performance Unit sold surpass 2,000,000 | Unit sold surpass 2,000,000 | |
| July-Sep. | Evaluate Social media campaign Promotions | Launch seasonal product Evaluate the operations | Back-to-school campaign with New York University Evaluate the operations | |
| Oct.-Dec. | Total revenue surpass 1,500,000 Brand awareness increase 80%, reach 0.1 million customers Feedback and evaluate | Get online and instore feedback Total revenue surpass 50,000,000 | Growth rate increase 40% Brand awareness increase 200% |
ADMINISTRATIVE STRUCTURE
Location:
New York City in 2020, and all over the US in next two year.
Online and instore.
Legal Formation:
A Branch store of 85C Bakery
Intellectual Property (patents, trademarks, copyrights, etc.)
85C Bakery ,
Management:
Wu Cheng-Hsueh (CEO),
Bakery Manager: Marissa Lopez
Supervisor: Ricky Avello
Director of HR :Rhea Manansala
Strategic Partners:
US Food manufacturers
College
Company in Manhattan
Organization Chart
85C Bakery Administrative Team
Meal Nutritionist Designer
Marketing
Production
Manager
Logistics and Finance
Research
| Demographic | Age 16-39, Students or young professionals, working moms Medium income |
| Geographic | US, City area |
| Psychographic | Urban dwellers Price-performance focused, taste-oriented but also price-sensitive Healthy & organized lifestyle with busy schedule Trend-chaser, interested in new “hit” food |
| Use-based | Everyday food, quick breakfast or afternoon tea, daily drinks, cakes for leisure time |
| Benefit | convenience, time-saving, high performance price ratio |
Target Consumers-Segments
Persona 1
Persona 2
Market Analysis of Bakery and Cafe Industry
Political
Many regulations about business license, sanitation, customers' rights and business contracts.
Political status is stable.
Economy
Revenue for the Bakery Cafes industry has grown moderately over the five years to 2020
The market size, measured by revenue, of the Bakery Cafes industry is $11.1 billion in 2020.
The market size of the Bakery Cafes industry is expected to decline -1.3% in 2020.
Social
There are 8,920 Bakery Cafes businesses in the US as of 2020.
The number of businesses in the Bakery Cafes industry has grown 1.8% per year on average over the five years between 2015 - 2020.
The United States has about 30% population aged between 15 and 40
Trend
A 2.8% growth of commercial bakery product consumption in the U.S. will increase slightly to 3.0% due to the employment growth.
Increasing health awareness will continue to impact consumer preferences.
25 % consumers visit bakery-cafés at least once a week, 54 % bakery-café consumers visit these locations more so for their food or a specific food product, and 25 % visit these locations more so for their beverages or a particular beverage.
Market Analysis of Food Delivery Service
Economy
Revenue in the Online Food Delivery segment is projected to reach $26 billion in 2020.
Revenue is expected to show an annual growth rate (CAGR 2020-2024) of 5.1%.
The market‘s largest segment is Restaurant-to-Consumer Delivery with a projected market volume of US$15 billion in 2020.
Social
In the year 2019 a share of 31.5% of online food delivery users is 25-34 years old.
Food delivery companies such as DoorDash, Uber Eats, Postmates and Grubhub serve upward of 3,000 cities, or more than 70% of the U.S. population.
People would like to save ordering time and eat out often, since they rarely have time to cook before or after work and commute.
Trend
A projected market volume of US$32 billion by 2024
In the digital world, ordering food from online has become a trend.
In the Platform-to-Consumer Delivery segment, the number of users is expected to amount to 69.9m by 2024.
The growth of internet users, change in lifestyles and increasing disposable incomes are some of the drivers of growth for the online food delivery
It is expected to grow over USD 30 billion by 2027
85Cafe Market Analysis (PEST)
Political (New York)
Many regulations about business license, sanitation, customers' rights and business contracts.
Political status is stable.
Following the NY employment law and many local(NY) laws, even taxes.
Economical
Great economy potential.
Economy growth positively.
NYC dominates the economy of New York state.
The sales of US market has 22% of global market with $0.12 billion
Net income is more than $32 million, and financial leverage is 1.18 in 2019
The US inflation rate in 2019 is 1.81%
Social
This is a densely populated area with small apartments for most people.
People would like to save time and get healthy food, since they rarely have time to cook before or after work and commute.
Large mix of immigrants who have brought a wide variety of cuisines, so the population is used to experimenting.
Trendy, styles conscious consumers.
There are 18 million population in NYC
Technology
More than 81% New Yorkers are internet users
Government has spent over 1 billion in New York's technology.
Promotions on social media will be welcomed
Completed ordering and supply chain management and communications between stores will be easy with the current infrastructure available
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Competitive Challenge
Competitors:
Similar products stores: Where people always choose to buy their breakfast like Starbucks and Dinkins (direct)
Similar service providers: Food delivery apps like UberEATS, etc.(Indirect)
Storage:
Hard to keep fresh.
Cost:
Hire professional nutritionist/employees/drivers
Training employee
Waste
Rent
Shipment
New idea maybe hard to accept
Current Market Competitors – direct
| USA | Complex Coffee Chain Stores | Starbucks |
| The Coffee Bene & Tea Leaf | ||
| Pret A Manger | ||
| Coffee Chain Stores | Joe Coffee Company | |
| Blue Bottle Coffee | ||
| Bakery Stores | Paris Baguette | |
| Ole & Steen |
Bakery & café store
Target market :
Both men and women
Ages of 25-44, 18-24 young adults, officers, college student
Middle income
Urban dwellers
Current Market Competitors – indirect
Food Delivery App
Target Market
Both men and women
Age of 18-40, young adults, busy workers and college student
Less-dense suburban communities
Low er and middle income
| Delivery Service Apps | Delivery Fee | Notes: |
| Instacart | $5.99 or $0 with $149 annual membership | Grocery. Membership pays for itself after ordered 26 times |
| UberEats | Start at $4.99, varies based on distance | GPS-based notification Order history and one-step re-ordering. Tip on apps |
| Grubhub | Varies by restaurants | Can pay bill directly from PayPal, good for people who do not want to share credit card info, no transfer time and fees. |
| DoorDash | $5.99 | With operating hours to get breakfast, lunch, and dinner. Flat delivery fee. bring alcoholic beverages from restaurants, stores, and breweries |
| Seamless | $6 | Number of filters. Cons: Limited availability. |
| Postmates | $1.99-$9.99 depending on merchant | Combine service from restaurant, grocery, retail stores, and others. Postmate Unlimited - $9.99 per month, free delivery for all orders over $20 |
| goPuff | $1.95 | From convenience stores, huge number of products can buy, works until 4am. |
Personnel
| Year | （Only in New York）1 | (All Over the US) 2 | (All Over the US) 3 | ||
| Units Sold | 180000 | 6336000 | 6969600 | Average Price | $9 |
| Revenue | $1,620,000 | $57,024,000 | $62,726,400 | ||
| Cost of Good Sold | $ (286,200) | $ (10,074,240) | $ (11,081,664) | ||
| Gross Profit | $1,333,800 | $46,949,760 | $51,644,736 | ||
| Operating Cost: | |||||
| Advertising Cost | $ (310,000) | ($1,550,000) | ($1,550,000) | ||
| Social Media | $ (100,000) | $ (500,000) | $ (500,000) | ||
| Website | $ (50,000) | $ (250,000) | $ (250,000) | ||
| Paid Search | $ (150,000) | $ (750,000) | $ (750,000) | ||
| $ (10,000) | $ (50,000) | $ (50,000) | |||
| Employee Cost | $ (495,000) | $ (7,755,000) | $ (7,755,000) | ||
| Equipment | $ (6,000) | $ (92,400) | $ - | ||
| Customer Service Cost | $ (10,000) | $ (50,000) | $ (50,000) | ||
| Depreciation | $ (200) | $ (20,328) | |||
| R&D Expense | $ (12,415.05) | $ (248,301) | $ (248,301) | ||
| Waste | ¥ (100,000) | ¥ (4,400,000) | ¥ (4,400,000) | ||
| Net Income | $500,385 | $37,254,059 | $42,041,435 | ||
| Gross Margin Ratio | 31% | 65% | 67% | ||
| ROI | 83% | 177% | 191% |
Branding
85 C Bakery Café
The coffee is finished and served to the customers, the temperature should be controlled at 85 degrees Celsius, which means that they take the enjoyment of the customers as their standard.
Red color represents fearlessness and youth.
Business Model
B2C
Bundling: package related goods and services together.
Low price with high quality
Membership Policy
Thank You
EXECUTIVE SUMMARY
Current situation:
85 bakery has reputation in the US market, and it has plan to expand its brand awareness into East Coast.
There are more and more fast-food restaurants open in the New York market
New Yorkers have the longest average working week among the 30 major cities in the United States, with 6 hours and 18 minutes to work, nearly an hour more than Chicago, the second longest city which means New York has busiest crowed.
Those people live in New York want to get the faster and on time food that delivery to their home or office.
People's demand for healthy food has increased
Desired Outcome (The concept)
Aim to expand 85c bakery into NYC while offering meal plan and food delivery service.
This meal plan can be daily, weekly, and monthly
Both online and instore ordering services
Membership
Promotions
Recommended Strategies (Opportunity)
we have stable funds
we are experienced in the business, easy to open more stores quickly, quickly expansion achieve
New Service to NYC
Target Demand
Funding Request:
Budget will be from headquarters
break even in year 1 and and profitable within 3 years
(financial analysis and budget located)
reference
https://www.85cafe.com/file/original/yearreport/merged_compressed.pdf
https://www.masterfoxconsultinggroup.com/reports/product/online-food-delivery-market
https://www.ibisworld.com/united-states/market-research-reports/bakery-cafes-industry/
https://www.statista.com/outlook/374/109/online-food-delivery/united-states
Reading 7-01 Anatomy of a Business Plan – Linda Pinson – 7th. Edition – Chapter 3: Executive Summary
Executive Summary of the Reading:
As mentioned in the introduction, the executive summary is the subject statement of your business plan. It summarizes the content and purpose of your completed business plan, covering all the key points. It dictates who you are, what your company does, where your company is going, why, and how it will get there.
Key concepts that you got from the reading:
From the reading, I have learned that an accurate executive summary is an important start to help you complete your business plan. It can attract investors or your leaders. He can clearly define your goals such as financing, innovation, product promotion, etc. Start with your executive summary At this time, start with a short and concise overview of your business: who you are, where you are, what you do, when (or will be) the company established, and what makes your company unique.
Insights from this reading to your Business Plan (What and how can you apply this reading to your Business Idea?)
I know that write an executive summary before you complete your business plan. Therefore, after your plan is completed, write an executive summary most effectively. At that time, all information and financial data will be available, and you can extract them from written text and financial spreadsheets.
