Management Information System Decision Support

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Table of Contents

Executive Summary

Muffin Tops bakery seeks to earn a competitive advantage over other local bakeries and food stores by using our unique products and cost saving techniques to operate on an efficient frontier that will aid us in providing return to our investors and reinvest into expanding our business. Commercial space in the downtown area of Evansville has opened and we believe that there is an opportunity for a specialty muffin shop to step in and take over a large market share in the greater Evansville area. We believe that this opportunity combined with our patented Tops Only! baking technique will allow us to recover our initial capital investment and return a profit within the first 5 years of operation.

Muffin Tops Bakery seeks to keep costs low and margins as high as possible for our specialty muffins especially within the first 5 years. We plan to initiate our market penetration plan by June 1st, 2016 and have our Main St. Evansville location open by July 1st, 2016 to capture the potential rise in demand from the Independence Day crowd. When our outstanding product hits the market, we expect demand to hit approx. 1000 muffins per day which will allow us to cover our fixed costs rather quickly. In order to operate, our store only needs 1 baker and 1 cashier per shift, operating from 6am to 7pm daily keeping our wages cost quite low. No specialty equipment is required to create our patented Tops Only! muffins, allowing us to build our competitive advantage. All of these elements in combination means that we will have the capital required to pay back any well-rated loan from any institution.

We understand the risks associated with our specialty business and are prepared to face them head on. Our biggest risk is that another product will come into the market that mimics our Tops Only! technique thereby removing our competitive advantage. Another risk that we face as a business that prepares food is the possibility of food poisoning deriving from our products. Our expert chefs are loyal and well-trained, which should reduce these risks extensively. These are two primary risks that we felt needed addressed in this section; Other risks that we have discovered can be found in the “Risks” section.

Muffin Tops Bakery is an exciting new business venture that is sure to draw the attention of the entire greater Evansville area. After the five-year schedule that we have planned, we expect that there will be room to grow into other markets all across the tristate and continue to operate at a profit. Our Tops Only! muffins are sure to be the talk of the town, and we couldn’t be happier to provide them to our customers!

Team Profile

Ben Phillips - Finance ‘16 - Ben has had extensive experience in finance, accounting, and managerial practices during his time at the University of Evansville (2012 -2016). While holding positions at Vectren and SS&C in Evansville, IN, Ben earned the respect of his coworkers and superiors with a hearty work ethic and dedication to the job. Ben currently works as an assistant to Financial Advisor Nate Monroe through Old National Investments and works extensively in managing clients, investment research, and client prospecting. He hopes to bring his experience, entrepreneurial mindset, and love of cooking to the Muffin Tops Bakery project. He will be responsible for organizing the company’s CRM and maintaining relations with suppliers and investors/loan officers.

Gabriel James - Finance/Economics ‘18 - Gabe currently is in pursue to acquire a bachelor's degree in both Economics and Finance by the year 2018. Through his first 2 years of college he has worked at a Managerial internship for TJ Maxx and also in their HR department, this summer he is also going to be an intern for One Main Financial as a financial advisor's assistant all while swimming for the University of Evansville. With his great understanding in the HR occupation and having a great skillset in time management skills, Gabe is responsible for the workers of Muffin Tops Bakery and their salaries. He also is responsible for finding the technology to innovate the company.

Justine Suanes - Accounting/Finance ‘18 - Justine graduated Summa Cum Laude from Vincennes University with an Associate’s Degree in Business Administration (2013-2015).  In the summer before and during her last semester at Vincennes University, she interned in the office at King’s Great Buys Plus in Lawrenceville, IL where she applied and strengthened her skills in accounting.  Justine is currently pursuing her Bachelor’s Degree in Accounting and Finance at University of Evansville by 2018.  She is also participating in the CFA Investment Research challenge in 2017, where she is further developing her analysis skills.  During her time in school, she worked at the YMCA in Vincennes from 2011 to 2015, and just started working at the YMCA in Evansville this year, 2016.  Justine hopes to utilize both accounting and analysis skills in the Muffin Tops Bakery Project.  She will be the accountant in this project.

Courtney Nelson - Multimedia Production ‘16 - Courtney is graduating the University of Evansville in the Communication Department with a focus in Video Production and a minor in Computer Science. For the last 2 years she has done freelance work building websites for a couple start-up companies and producing videos for bigger organizations such as Vectren, Evansville-Vanderburgh County Schools, Vanderburgh Humane Society, and WNIN. She has created several different marketing campaigns for nonprofit organizations and is a keynote speaker for Hope Harbor’s yearly fundraising events. She interns at WFIE on set in the production crew and works part time for WNIN as a videographer for location shoots. Courtney is in charge of the Marketing department for Muffin Tops Bakery.

Blake Adams - Culinary Arts ‘18 - Blake is in the process of graduating from the University of Evansville with a culinary arts degree. Through his first two years of school he worked as an intern for Rolling Hills Country Club as a chef. Here, he learned hands how the culinary world operates. Blake has worked at Rolling Hills Country Club two years and has slowly and the head chefs respect. He is a hard worker and will take on whatever responsibilities are thrown at him. Over his two years, he has gained much more responsibility than a beginning chef through determination and teamwork.  Blake hopes to bring his previous experiences and his hard-working mindset to Muffin Tops Bakery.

Business Plan

Operations Summary:

Muffin Tops Bakery will operate as a simple specialty muffin shop in the downtown Evansville area. We will build our business on the foundation of our industry and local knowledge, and the expertise of our staff. We plan to have two cashiers and two bakers on staff that will allow for streamline production and sales. Our world class bakers have also perfected the Tops Only! baking technique and carry a specialized set of talents.

Muffin Tops Bakery also seeks to keep overall equipment costs low by starting off with top of the line cooking equipment and on-site technology. Our mixing and baking equipment is top of the line from a great supplier, and we believe our depreciation schedule will span the next 15 years before it is cost effective to replace. The TPS and computer system we have purchased will also last us quite a long time.

In combination, all elements of Muffin Tops Bakery will provide any lending institution a full return on investment. With a small start-up loan, we expect to be making a profit within two years, allowing us space in the budget to stay on time with loan payments.

Technology Requirements:

Technology is a very important thing to consider when developing a company and expecting it to thrive. Technology is needed to not only keep up with your competitors but also make it a lot easier for your employees to acquire data and analyze the data to make decisions regarding our company going forward For starting up our company there are 4 mandatory things we need to help run our business.

Credit Card Machine/Cash Register (TPS)- We purchased a uAccept POS which is a cash register/ credit card machine that is a cloud-based system that does the following:

· 9.7" touch screen plus a customer display screen makes operation easy

· Plug-and-play cloud-based software gets you up and running quickly

· Touch screen allows custom screen views with the option to change as sales fluctuate throughout the day

· Connect to the POS from any Internet-connected device to keep you in touch with real-time business data

· Generates sales reports and helps manage loyalty programs with the option to easily add products and categories or manage multiple devices from a single account for streamlined management

· Monthly software subscription includes free upgrades and web portal access for affordable, up-to-date software

· Comes with a cash drawer, card reader and receipt printer to make it a complete POS

· Payment options include cash, credit, debit, checks and Bitcoin for flexibility

· Allows customers to submit inquiries or orders via text message for expanded sales options

· Optional USB barcode scanner allows for faster sales transactions

This machine not only helps us analyze and gather data on our sales but it is also more user friendly, its touch screen, gives visuals on the sales we made throughout the day, and is also cloud based which makes it easier recording the data on our business computer and analyzing from there.

Business Computer- We purchased a “Dell - Inspiron 23.8" Touch-Screen All-In-One - AMD A8-Series”  This computer can do it all, it has tons of space and memory to store data and other information on it and is also compatible with our TPS, Its touch screen and user-friendly. The computer has Windows 10 software, accelerated processor, 8GB system memory, and a 1TB hard drive which is enough to start off our business and expand.

Security System- We purchased a Security system with ADT who is most well-known for providing security for many businesses and homes. We not only want our customers to feel safe, but we also want our data and building to be protected if anything should happen. Another good thing for having this system with ADT is that it also comes with a Timestamp so if anything were to occur we will have the exact time and date to bring to the court of law.

Company phones- Communication with our employees and co -workers are very important to our company in order to thrive. That's why we have a business phone for the store and our providers are AT&T. we chose AT&T because it had the better bundle then the other competitors.

Marketing Strategy:

The main objective for Muffin Tops marketing campaign is to grow awareness in the Evansville area about this new business. We want to let the community know who we are, where we are, and what we do so that we can start bringing in those sales. To start, we created a simple and elegant logo through Adobe Illustrator. This logo will be seen on the business’ sign, memo letterhead, and business cards. This software allowed us to export the design in both CMYK and RGB colors as well as different file formats such as PNG, JPG, and TIFF so that it can be used in many different platforms and mediums.

When deciding our target audience we realized that our location greatly impacted this. Opening the business downtown on Main St. means that we are not only surrounded by corporate and local businesses but also schools and younger families who walk around the area. Therefore we are targeting business men and women to get a quick breakfast before work or a midday snack. Students on their way to school or on lunch break or looking for an afterschool snack. And young families who are walking the strip, easily interested in a light, sweet, and somewhat healthier snack. This targeted demographic would be able to use our muffin tops for special events as well such as birthdays, sport games, and/or office meetings.

Considering we live in the “digital age”, it was pertinent to our startup plan that we create a strong online presence for the bakery. This consists of both a website and social media pages. For the website, we chose to use the host, GoDaddy, this was based off of the reviews for the quality, convenience, and price. In the initial startup costs we have allotted for a good portion of the marketing budget to go to the website being professionally built and to create a strong Search Engine Optimization for the site. GoDaddy will also be in charge of website maintenance and upkeep. Maintenance plus the domain fee adds up to only $22 per month. The business will also be on Facebook, Twitter, Instagram, and Google+. Here we hope to build a two way communication with our customers, so not only will we be posting about deals, muffin tops updates, events, and promotional items but we will also be asking for feedback from our followers. We will inquire about what their favorite muffin top kind is, what they hope to see from us in the future, what muffin top kinds would they like us to bake, and any other requests, suggestions, and/or feedback they wish to contribute.

Much of our advertising will be in print or radio ads. In the Evansville area it is only $18 to $30 for a 30 second advertisement, so those will be running on Evansville’s top 3 stations. Much of our print advertisements will be located in the local paper and magazines, with a more concentrated amount in the Evansville Living magazine and the Crescent, the University of Evansville’s magazine. Our other print advertisements will be on flyers and business cards. You can print 1,000 flyers for $230 and we will post them around town and on school campuses, posting a greater amount within a 5 mile radius of the bakery’s location. 1,000 business cards can be printed for only $38 so we will print a large amount of those and place them all around town. Many of the businesses in Evansville have a little section devoted to business cards from other local businesses in the area, so we will be taking advantage of that.

After some extensive research on the businesses in the area, it was discovered that many are a part of the Southwest Indiana Chamber of Commerce. Its popularity is due to the extensive amount of events they host that bring the local businesses and the community closer together. Muffin Tops Bakery would join this with a classic membership for $435 a year. A grand opening will be hosted as well to try and bring the community into the store and get our name out there. Advertising for this will start a little over a month prior to the opening. Shown below is an overview of the Marketing plan’s calendar along with the monetary value of each stage in the plan. The colored cells show when each part of the marketing plan is active throughout the first year.

To evaluate the effectiveness of this marketing plan we will be looking at sales by the end of the first year and see at what points in the year was sales the highest then we will cross examine that with our marketing calendar and see what advertising mediums were being used most at those times as well as documenting the times of the year, in relation to seasons and holidays, where the sales were highest. Then with this information we will create a new calendar that better compliments these patterns in sales data. We will also look at the data social media platforms provide to see which posts were the most popular and which events or promotions brought us more followers.

Budget:

Start Up Costs

Based on the market demand in Evansville and average costs of bakeries and cafes, we came up with the startup costs shown above. A total estimate of $33,775 goes towards our property and equipment. This category includes a computer, oven, refrigerator, two display cases, two food mixers, and business phone. Each item helps accommodate the bakery and its needs. The computer is used to process transactions to provide financial statements and help facilitate the communication between suppliers and customers. The oven, refrigerator, and food mixers are needed to keep the supplies fresh and make the muffins for the customers. The business phone will be used to receive pick-up orders from customers and contact suppliers.

The systems category totals up to an estimate of $1,560. The transaction processing system is needed to process all the transactions within the bakery. These transactions may include purchase orders for the supplies and inventory, marketing costs, and customer orders. The security system will be used to protect the asset and information the bakery will have and hold in both the store and on the computer. QuickBooks will be used for the accounting department to produce the financial statements and tax forms needed for investors and other government entities.

The last category will include all the initial marketing costs to get the business started. A total estimate of $3,237 will be needed. Under the marketing category, the items include social media, print advertising, radio advertising, website, business cards, flyers, promotional events, the grand opening of the bakery, and SWI Chamber of Commerce.

Operating Costs

These figures are also based on the market demand in Evansville and average costs of bakeries and cafes.  We have separated the operating costs from the initial startup costs.  Additionally, the operating budget costs are also made on an annual basis.  Each month, we pay a certain amount at the end of each month.  We aren’t buying a building, but instead renting at an estimated price of $18,000 per year.  Utilities are at a cost of $14,400 and marketing is at a cost of $8,062.  The team decided that we would hire two bakers and two cashiers to accommodate the demand of the market.  The bakers’ salaries are combined at a price of $47,200 and the cashiers are at a combined price of $53,964.  We estimated the price of supplies at $26,373.  Supplies include the utensils and ingredients needed by the bakers to make the muffins.  The average price of internet service providers come out to $1140.  Total operating costs is at an estimated $169,139.

Summary Costs

Total start up and operating costs sum up to an estimated $207,711.  We wanted to separate the startup costs from the operating costs to show which items are more likely to be a one-time purchase, plus depreciation, versus the items that are ongoing costs.  As mentioned above, the costs are based on the market demand and average costs of bakeries and cafes.

Risks:

Although the idea of starting up a bakery sounds great, there are many potential risks that come along with it. One of the big risks of starting bakery is the limited growth opportunities. There is already a vast community of bakeries around every corner. Therefore, it will be hard for Muffin Tops to gain customers when they are already loyal to other bakeries. Muffin Tops will have to provide a product and service that separates itself from the competition in order to thrive in the industry.

Another big risk that Muffin Tops faces are health concerns.  When operating a small bakery there are many health codes that have to be followed. When baking specialty items light gluten free, it is imperative that there is no cross-contamination. If Muffin Tops is not careful they could potentially get gluten in a gluten-free roll and cause someone physical harm. Also, if someone gets sick from a product of Muffin Tops, they will spread bad reviews and no one will go there anymore.

Summary

In summation, we believe that Muffin Tops Bakery has the formula to succeed in the Evansville area. Our killer recipes, baking systems, employees, and potential customers will provide Muffin Tops Bakery with everything required to thrive in this market. The detailed planning and budgeting information included in this document gave a detailed look at how everything will come together. We have covered all of our points and have proven our business strategy.  All of the pieces of the puzzle are in the right place. For everything to come to fruition, all that is required is a start-up loan.

References

"Business Plan Risks." Entrepreneur. N.p., 10 Dec. 2004. Web. <https://www.entrepreneur.com/article/49042>.

"QuickBooks Premier Desktop 2016:." QuickBooks Premier. N.p., n.d. Web.

"Southwest Indiana Chamber | Evansville & Posey County." Southwest Indiana Chamber. N.p., n.d. Web.

"10 Key Risk Factors to Minimize for Startup Success." Startup Professional Musings. N.p., 28 Apr. 2013. Web. <http://blog.startupprofessionals.com/2013/04/10-key-risk-factors-to-minimize-for.html>.

"UAccept POS 9.7'' Touch Screen." Fryselectronics. N.p., n.d. Web.

"The Ultimate Startup Marketing Strategy by Venture Harbour." Venture Harbour. N.p., n.d. Web.