essay about 85c Bakery
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ZihanKongCapstoneCourseProject85cBakeryCafeBusinessPlanv13.pptxCapstone Course
Project “85c Bakery Café”
Business Plan
Zihan Kong
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Agenda
Business Plan
Executive Summary
Operation
Marketing Analysis
Marketing Plan
Financial Plan
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85C Bakery Cafe
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 student.
Mission: “offering various, high quality bakery and beverage with affordable price. Give convenient lifestyle and warm welcoming service.”
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EXECUTIVE SUMMARY
85 bakery has reputation in the US market, and it has plan to expand its brand awareness into East Coast. Expanding 85c bakery into NYC in 2021 while offering meal plan and food delivery service. And launching new service all over the US in next two year.
New Yorkers have the longest average working week among the 30 major cities in the United States.
Satisfy the demand of healthy and fast food for young student and professionals.
Distribute though 85c bakery store and website, as well meal plan are daily and monthly with membership and promotions .
Multichannel campaign strategy and cooperation strategy
Stable capacity will be funded by headquarter
Obtain positive increase in New York store
Sale revenue increase 10% end of 2023, reach 0.2 billion
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Problem
New Yorkers More Crowed
People 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
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We offer customized (DIY) meal plans as weekly and monthly, also we hire professional nutritionist to design meals.
Affordable price with high quality and nutrition
We offer delivery service as weekly, or monthly depend on your meal plan.
Own storage warehouse and delivery system of raw materials to ensure every materials are fresh and non-reused
Offer both instore and online service that save people ordering time
Solution & Value Proposition
Product Development
In 2021, The company plan to open a new store in NYC and offer meal plan with food delivery service both online and instore
In 2022 and 2023 launch the new service all US
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: $3-7
Drinks: $2.75 to 4.25
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Delivery fee
Weekly plan - $7.99/week ($1.14 per day)
Monthly plan - $17.99/month ($0.6 per day)
Membership
$2.99/Week
$9.99/Month
Operating Model
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Inventory Management
Order
Material list
Production
Quality Assurance
Safe production
Partially Prepared Products/ Finished product
Customer feedback
Instore
Shipment
ADMINISTRATIVE STRUCTURE
Location:
Online and offline
Legal Formation:
A Branch store of 85C Bakery
Intellectual Property (patents, trademarks, copyrights, etc.)
85C Bakery ,
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Strategic Partners:
Management:
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Wu Cheng-Hsueh: CEO
He graduated from National Taiwan University of Science & Technology with a master’s degree. Currently, He has more than 20 years of management experience and talent training. He is responsible for the operation, decision-making and development of the whole group.
Ricky Avello: Supervisor
He is Success-driven sales and account management professional with more than 20y ears of expertise in multiple products. Bilingual/Fluent: English and Spanish. Self-directed salesperson with exceptional communication and management skills.
Bruce Zhang: Director in New York Store
He graduated from University of Warwick-Warwick Business School with Management and Organization Analysis, master’s degree. He is good at strategic business acumen focusing on how to make a successful business for foreign companies in China. helping Chinese enterprises going global
Organization Chart
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85C Bakery Administrative Team
Meal Nutritionist Designer
Marketing
Production
Manager
R&D
Beth Warren MS RD CDN
Marissa Lopez
HR: Rhea Manansala
Production: Bjorn W
Connie Banning
YuLai Jin
Gonzalo Huerta
Marketing: Jillian Richman
Lexi Henkel
Logistics and Finance
Market Analysis of Bakery and Cafe Industry
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Economy
Revenue for the Bakery Cafes industry has grown over the five years to 2020, $11.1 billion 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 between 2015 - 2020.
Large Target market
Trend
A 2.8% growth of commercial bakery product consumption in the U.S.
Increasing health awareness
Political
Many regulations about business license, sanitation, customers' rights and business contracts.
Trend:
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.
Increasing health awareness will continue to impact consumer preferences.
Social
The United States has about 30% population aged between 15 and 40
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Market Analysis of Food Delivery Service
Economy
Revenue in the Online Food Delivery segment is projected to reach $26 billion in 2020 , annual revenue growth rate of 5.1%.
The Largest service segment is Restaurant-to-Consumer Delivery market volume of $15 billion
Social
Most online food delivery users is 25-34 years old.
Increasing Food delivery companies upward of 3,000 cities and Serve 70% of the U.S. population.
People would like to save ordering time
Trend
In the digital world, the growth of internet users,
A projected market volume of $32 billion Sby 2024
In the Platform-to-Consumer Delivery segment, the number of users is expected to 69.9m by 2024 and growth to 30 billion by 2027
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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
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85Cafe Market Analysis (PEST)
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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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Political
Many regulations requirement
Economical
Great economy potential.
Technology
More than 81% New Yorkers are internet users
Social
Huge target customer base
Political status is stable.
Following the NY employment law and many local(NY) laws, even taxes.
Economy growth positively.
Enough Capacity
The sales in 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
Convenience and healthy life-style
Large mix of immigrants
Trendy, styles conscious consumers.
Government support development of technology.
Multiple Media publicity channels
Easy reach
SWOT
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Strength
Unique and Convenient Service
Opportune
Enough Capacity
Threat
High-Cost of Expansion
Innovative menu, differentiated product, continuous addition of new items and seasonal offerings
Nutritious Suggestion
Multiple Order Options
Low Brand Awareness in Eastern Coast
Limited Market Share
Low Social Media Influence
Shortage of skilled labor
Government continue to promote
Quickly Expansion
Quickly Service
Large Customer Base
Inflationary Pressure
Strong Competitive Pressure
Maintain High Quality
Weakness
Multiple Immigrants
Current Market Competitors – direct
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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
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Food Delivery App
Target Market
Both men and women
Age of 18-40, young adults, busy workers and college student
Less-dense suburban communities
Lower and middle income
Marketing Strategy
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Differentiation
New ideas for varying product characteristics for various user segments
Promotions
Campaigns
Social media
Back-to-school
Competitive Advantage
Quality, 85c Bakery make sure to delivery the best quality products to their customers
Freshness, keep fresh from raw material to finished products,
Price, offer the reasonable and afford price in the market
Distribution, 85c bakery have good supply chain, product monitors, and already have 44 stores in US
Target market and customer profile
The company focus on the young adults who are college student and young workers
Urban Citizen
Trendy products
Price sensitive
Convenience life-style
Media savvy
Connie Banning
https://www.linkedin.com/in/conniebanning/
YuLai Jin
https://www.linkedin.com/in/yulai-jin-82bb825b/
Gonzalo Huerta
https://www.linkedin.com/in/gonzalohuertapastrychef/
Bjorn W
https://www.linkedin.com/in/bjorn-w-b706713/
Jillian Richman
https://www.linkedin.com/in/jillian-richman-92144b87/
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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.
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Start
Consideration Business
Ideas
Marketing Research
Consider new store location, how to launch new service and New Products
Hire and Training Employees
Advertising
Open New Store and Launch Service
Evaluation of operation and performance
Promotion and Campaign
Estimate Cost
Operation Model
Meet Goal
And Feedback
Improve Product and Service
Project Methodology
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Business Model
B2C
Bundling: package related goods and services together.
Low price with high quality
Membership Policy
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SMART GOALs
Specific
Place order online on Apple and Android products via an App
Advocate, advertising and upload new products and promotions on Instagram and Twitter quarterly
Create new hashtag every month
Launch new product every 45 days
Measurable
Social media traffic level: Focusing on engagement such as conversation rate. Growing the followers on Instagram to 500,000 and Facebook to 1M by the end of 2023
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Achievable
Brand Awareness: Increase 200% brand awareness by the end of 2023
Relevant
Customer Experience/Service Satisfaction: improve user experience/customer service satisfaction by 15% every year (Metrics: Reviews, Twitter and ratings from Yelp, Instagram, Twitter and Website)
Increase sale revenue in 2020
Timely
Increase 10% sale revenue in 2023 in US market
Marketing Plan
Customer Analysis
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| Demographic | Age 16-39, Students or young professionals, working moms Medium income and high 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 |
Persona 1
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Persona 2
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Market Mix
Products
High product quality, cleanliness and sanitation
All bakery and beverage use quality ingredients, including gluten-free diet, high-fiber breads
Creating new product flavors
Meal plan as weekly or monthly
Delivery service
Presale:
Reasonable and afford price
Price lower than competitors
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Place:
Concentrated in the business district on the west coast
Expand to downtown, Manhattan, New York
Online ordering system
Promotion:
Membership
Free samples of the tasty treats
Coupon
PR Package for business community or influencers
Gantt Chart
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Main Activity
Sub Activity
Less Important Activity
Sales Projection Average Price: $9/Order
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| Year 1 | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total Units | Total Revenue |
| Unit Sold | 1000000 | 1000000 | 1000000 | 1500000 | 1500000 | 1500000 | 2000000 | 2000000 | 1960000 | 2400000 | 2700000 | 2500000 | 21060000 | |
| Revenue | 9000000 | 9000000 | 9000000 | 13500000 | 13500000 | 13500000 | 18000000 | 18000000 | 17640000 | 21600000 | 24300000 | 22500000 | $189,540,000 |
| Year 2 | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total Units | Total Revenue |
| Unit Sold | 1000000 | 1000000 | 1000000 | 1500000 | 1500000 | 1500000 | 2000000 | 2000000 | 2566000 | 3000000 | 3200000 | 2900000 | 23166000 | |
| Revenue | 9000000 | 9000000 | 9000000 | 13500000 | 13500000 | 13500000 | 18000000 | 18000000 | 23094000 | 27000000 | 28800000 | 26100000 | $208,494,000 |
| Year 3 | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total Units | Total Revenue |
| Unit Sold | 1100000 | 1100000 | 1100000 | 1650000 | 1650000 | 1650000 | 2200000 | 2200000 | 2822600 | 3300000 | 3520000 | 3190000 | 25482600 | |
| Revenue | 9000000 | 9000000 | 9000000 | 13500000 | 13500000 | 13500000 | 18000000 | 18000000 | 23094000 | 27000000 | 28800000 | 26100000 | $229,343,400 |
Personnel
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| 2021(Year 1) | 2022(Year 2) | 2023(Year 3) | |
| Operating Cost: | $ (30,000,000) | $ (37,500,000) | $ (47,500,000) |
| Advertising Cost | $ (23,680,000) | $ (20,200,000) | $ (20,200,000) |
| OOH | $ (13,500,000) | $ (9,000,000) | $ (9,000,000) |
| Event&Campaign | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) |
| Social Media | $ (1,500,000) | $ (2,000,000) | $ (2,000,000) |
| Website | $ (1,000,000) | $ (1,000,000) | $ (1,000,000) |
| Paid Search | $ (2,500,000) | $ (3,000,000) | $ (3,000,000) |
| $ (180,000) | $ (200,000) | $ (200,000) | |
| Employee Cost | $ (40,500,000) | $ (44,550,000) | $ (50,625,000) |
| Equipment | $ (9,000,000) | $ (9,000,000) | $ (9,000,000) |
| Customer Service Cost | $ (1,000,000) | $ (1,000,000) | $ (1,000,000) |
| Depreciation | 0 | $ (800,000) | $ (800,000) |
| R&D Expense | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) |
Average employee cost is $2750/ month
Straight line method for depreciation
Packaging cost including in COGS
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Media Plan
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| Year 1-3 | Time | Platform | Activity | Goal |
| Social Media | Jan-Dec (continuous) | Instagram Facebook Tiktok Twitter 85c Bakery App | Upload new products Promotion Campaigns Short video Product Menu | Increase 200% brand awareness Increase social media traffic level |
| Website | Jan, Apr, July, Oct | 85c Bakery Website Gifts | Upload new products Seasonal products, events, Adverting Menu Customer service | Customer Experience/Service Satisfaction Increase Revenue |
| Paid Search | Aug-Dec | Google Pay-Per-Click Ad Banner Ad | Launch new product Campaigns Promotions | Increase brand awareness Increase campaign engagement Increase conversion Rate |
| Jan-Dec | 85c Bakery official Email | Launch new product Campaigns Promotions Thanks/Birthday/Holiday coupon Customer Feedback | Increase brand awareness Increase customer satisfaction Improve innovation |
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Media Plan
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| Year 1 | Reach | $/Reach | Conversion | Customers | |
| Social Media | 70,000,000 | $0.10 | 0.70% | 490000 | |
| Website | 40,000,000 | $0.05 | 1.95% | 780000 | |
| Paid Search | 50,000,000 | $0.04 | 1.95% | 975000 | |
| 50,000,000 | $0.13 | 3.19% | 1595000 | ||
| Total Sale: | 3840000 |
| Year 2 | Reach | $/Reach | Conversion | Customers | |
| Social Media | 100,000,000 | $0.10 | 0.70% | 700000 | |
| Website | 60,000,000 | $0.05 | 1.95% | 1170000 | |
| Paid Search | 90,000,000 | $0.04 | 1.95% | 1755000 | |
| 90,000,000 | $0.13 | 3.19% | 2871000 | ||
| Total Sale | 6496000 |
| Year 3 | Reach | $/Reach | Conversion | Customers | |
| Social Media | 110,000,000 | $0.10 | 0.70% | 770000 | |
| Website | 60,000,000 | $0.05 | 1.95% | 1170000 | |
| Paid Search | 100,000,000 | $0.04 | 1.95% | 1950000 | |
| 100,000,000 | $0.13 | 3.19% | 3190000 | ||
| Total Sale: | 7080000 |
85c Bakery CRM
85c Bakery Sweet Reward
The 85c App
Scan upon checkout — Get points each time
Choose your reward – Pick your favorites
Redeem in Store – Your rewards, your way
Shipping Membership
Monthly
Weekly
1. Select your shipping plan
2. Free shipping
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Customer Service Center
Contact US
Website page
Social Media Platforms
Phone number
Profit & Loss Statement
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Except any stocks/bunds/equity/inflation
Financial Analysis
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| 2019 | 2020 | 2021 | 2022 | 2023 | |
| Revenue | $ 180,049,003 | $ 146,230,893 | $ 189,540,000 | $ 208,494,000 | $ 229,343,400 |
| Net Income | $ 7,258,608 | $ 2,448,868 | $ 8,487,220 | $ 11,793,292 | $ 11,042,809 |
| Growth Rate | -19% | 30% | 10% | 10% | |
| Profit Margin Ratio | 4% | 2% | 4% | 6% | 5% |
| CAGR | 8% | ||||
| NPV | $ 31,361,783 |
KPI
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Short-term
Brand awareness increase 80%
Long-term
Brand awareness increase 150%
Increase social media engagement
Instagram follower increase to 500,000
Twitter follower increase to 500,000
Facebook follower increase to 1M
Revenue growth 10%
Obtain positive income
Increase customer satisfactions
Reading 13 Anatomy of a Business Plan – Linda Pinson – 7th. Edition – Chapter 11: Financing your business
According to the article, ask funding is an important part to implement the business plan. First you should consider about your situation about your plan and make decision to choose your funding options. Moreover, business should think about how much should plan need that the most optimistic. And remember to show that your industry has good potential for profit. You will also have to present a strong case for the ability to manage your company through the period of debt.
Key concepts that you got from the reading:
I think that I need to consider about the 85C bakery’s financial situation. Is it need to loan funds or where should I earn investment. After research I know that 85c bakery financial situation is stable and have enough capacity to support expand service.
Insights from this reading to your Business Plan (What and how can you apply this reading to your Business Plan?)
After reading article, I learn that the more approach to have more investment. For the 85c bakery I would like to use equity financing because 85c bakery is high percentage of debt to equity
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Thank You
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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
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Reading 9-01 Anatomy of a Business Plan – Linda Pinson – 7th. Edition – Chapter 6 Part III: Financial Documents
Executive Summary of the Reading
There are four sections of financial document. It shows the physical setup of your operation and your plans for finding and reaching your customers. And Well-executed financial statements will provide you with the means to look realistically at your business in terms of profitability.
2. Key concepts that you got from the reading:
I know that he can understand the development level of a company, whether it keeps good development, whether it is profitable, and the future enterprise specifications. Through him, I can make my business plan and improve the return on investment as much as possible
3. Insights from this reading to your Business Plan (What and how can you apply this reading to your Business Plan?)
I could analyze the company’s financial document to get the status of the 85c Bakery. And it 4 type statements that help me to allocate the budget and business plan.
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