Business Plan

Zayed UniversityBUS 324 501

Business PlanMurat Erogul

Wednesday 18th January 2012

Nouf Farid 2008 23714Shamsa Bin Turkeya 2009 20410Manayer Alshawab 2009 20368

We pledge that this is our work and that it conforms to the Zayed University Honor Code.

08Fall

Fall

Sweet Indulgence

Bus Plan –Sweet Indulgence

CONTENTS PAGE

Executive Summary 2

Mission Statement

Marketing Plan 3

Voice of Customer Report

Organizational Plan

Operational Plan

Financial Plan

Contingency Plan

Appendix

EXECUTIVE SUMMARY

1


Market:Sweet Indulgence is a bakery retail company located along Jumeira road in Dubai, U.A.E. Sweet Indulgence aims to attract a wide range of consumers from all ages to enjoy a number of gluten-free pastry products as well as a variety of dairy-free and egg-free pastries. Since gluten-free products are not highly provided to consumers in the U.A.E, Sweet Indulgence is a niche business, as it offers gluten-free products to consumers with Celiac disease, and other consumers that would enjoy a healthy diet. In a competitive environment surrounded by a number of bakeries and coffee shops, Sweet Indulgence plans to build a well-organized company by offering affordable prices and a comfortable area for residents and tourists. Sweet Indulgence will offer customers with free Wi-Fi during their dine-in. The bakery is committed to provide the best quality of goods to its customers.

Management:Sweet Indulgence is equally owned and managed by three partners. Each entrepreneur specializes in a different professionalism and own skills that makes up the business start-up. Nouf Albastaki experiences Marketing and Management skills. Shamsa bin Turkeya holds skills for Accounting and Financial Operations. Manayer focuses her specialty in the Human Resources Management; to hire the right employees who can provide consumers with high quality customer service and freshly baked gluten-free products. With all these skills put together, Sweet Indulgence aims to build a strong business that benefits not only the company but also its consumers.

Money: Sweet indulgence owners will borrow AED 350,000 as a loan from the bank and each owner will add AED 84,000 to the business that makes the bakery’s capital a total of AED 600,000. The loan will be paid in 5% in 2 years, which is of AED 175,000 each year.

MISSION STATEMENTSweet Indulgence's mission is to provide our customers who suffer from gluten intolerance or also known as "Celiac disease" with Gluten-free organic products with a great quality and competitive reasonable prices. Most importantly, these products are made from the finest organic and zero trans fat shortening. Gluten-free products do exist in Dubai but are very limited and not satisfying. This allows Sweet Indulgence to offer customers with a variety of delicious gluten-free choices rather than the unsatisfying tasteless of some available gluten-free options.

The team of Sweet Indulgence bakery is very passionate to exceed customer’s expectations; this will result in increasing customer’s respect and loyalty while achieving adequate profit to finance the company and it's growth. Sweet Indulgence believes that it is very important to treat customers, vendors, and employees with courtesy and respect. Sweet Indulgence strongly believes and feels a profound responsibility to hire the best people, which generate a healthy work environment, where every employee is provided with many opportunities to develop their greatest potential.

Sweet Indulgence caters to its customers in a professional manner by offering quality merchandise, competitively priced and delivered with courtesy and professionalism. Sweet indulgence is devoted to further growth and superiority using whatever measures accessible to carry the company into the future. MARKETING PLAN

2


BackgroundThe marketing plan of a business provides in-depth detail of the market and the competitors. It focuses on having a competitive advantage that is a unique element the business has, which other business do not or cannot provide to its customers. This section introduces the marketing mix, which includes four important elements when having a business start up. It also includes the SWOT analysis, which is an evaluation of the businesses strengths, weaknesses, opportunities and threats. These elements allow the business to focus on its competition as well as improve its weaknesses in time. In addition, by having a voice of customer report, it allows Sweet Indulgence to analyze its customers and their willingness to buy the products. It helps find out whether the business would be a success or not.

Target customersSweet Indulgence is a niche business, as it offers gluten-free products to consumers with Celiac disease, and other consumers of all ages and both genders that would enjoy a healthy diet. By understanding the target customers' needs, demands and wants, it helps the business to provide customers' with satisfying pastries. An addiction to that, Sweet Indulgence also offers some other products for common allergies, such as eggs, and dairy, and so also targets people who wish to have a dairy-free and/or egg-free diet. People who suffer from celiac disease should not suffer from all the variety of food that they cannot eat. Sweet indulgence also offers catering to special events and parties and this is considered to be the reason behind the business being a niche business in the market.

Over that, what customers' evaluate in a business is the customer service. By having friendly and active employees that serve its customers with smiles and friendly tones, Sweet Indulgence hopes to please its customers. The main targeted customers are university and working ages. As they can work on their assignments and projects or surf the Internet using the free Wi-Fi and enjoy gluten-free products from Sweet Indulgence in a calm and relaxing atmosphere.

Marketing Mix1. PricePricing acts as the basis of the business, as it can affect a business’s long-term survival. When pricing the products, Sweet Indulgence concentrates on spending less on advertising to keep prices low. The price will not be too high and expensive for customers, but also not too low that the business cannot gain a profit. By having a voice of customer report during the business planning, interviews and surveys are conducted to see the price customers are willing to pay for these products.

Prices will be distributed depending on each baked good. The prices are divided into three categories, gluten-free, dairy-free, and egg-free baked goods. Each item has its own price range that varies depending on the kind and size. The prices of the baked goods are presented in different categories that is shown below:

Gluten-free baked goods:

3


Description CostBreads 15-40 AEDMuffins 15-20 AEDCakes 30-150 AEDPastries 25-35 AEDCookies 10-15 AEDPan cake and waffles 25-40 AED

Dairy-Free baked goods:Description CostPastries 15-25 AEDMuffins 10-15 AEDCakes 15-100 AEDHot drinks 20-40 AED

Egg-Free baked goods:Description Cost Breads 10-20 AEDMuffins 10-15 AEDCakes 15-100 AED

2. PlaceChoosing a place for the business that is visible and accessible to its targeted customers. The location depends on the location of the customers that are willing to pay the prices of Sweet Indulgence. A number of factors are important to consider when deciding on the place, such as parking, competition and rental fees.

Sweet Indulgence will be located along Jumeira road in Dubai, where it is visible and accessible to the targeted audience. Since it offers products to average income people, having it on Jumeira road allows the prices to be set at good prices for its customers. Setting the place at Satwa for example, would not be a good idea, since the customers found in that area, may not pay to buy these products.

3. Products and servicesSweet indulgence offers freshly prepared variety of non-gluten pastry products at all times for consumers who suffer from wheat allergies. The bakery also provides other goods for consumers that have other common allergies, such as eggs, and dairy. The bakery prepares five to seven batches of baked goods. In addition to that, the bakery also offers catering service where we will be catering any occasion whether it is a birthday party or a wedding.

Example of goods that the bakery offers:Gluten-free pastries, breads, muffins, cookies, pancakes, waffles, and cakes: These all contain of "Spelt flour”, a substance that contains of the exact same substance that wheat provides. It also has a similar taste, texture, and comportments that help in creating these products that will look and taste as any other wheat-baked good. The only difference is that "Splet flour" is tougher than wheat but it contains more nutrients and proteins than the wheat flour.

Dairy-free pastries, muffins, and cakes: The dairy-free products will avoid all dairy products and will be using soya instead but most breads don’t require any dairy

4


products. Consumers will enjoy a variety of breads that do not contain dairy products. On the other hand, some muffins and cakes require butter but Sweet Indulgence will be using other alternatives providing customers with the best-baked goods.

Egg-free goods, such as muffins, breads, cakes, and pastries: Eggs are used in many different recipes. “Applesauce” can be used as a substitute for egg as it provides the same amount of moisture that eggs do.

Products at Sweet Indulgence hope to keep extending its product life, by creating newer products as time goes. As technology, fashion and people’s tastes changes, Sweet Indulgence will make sure to follow these trends to keep the product life cycle going. The figure below is an example of the product life cycle, through the different stages.

Catering:Sweet indulgence offers superb catering services in 4 packages, for adults and children as the following:

Package 1: (For adults only- minimum 15 adults for 350-400 AED each) Breakfasts, brunches, lunches, dinners, appetizers, and deserts of all kinds. Drinks Event management Waiting service Floral design and décor All equipment and furniture (tables and chairs) needed for the occasion DJ Lighting Valet service Event security

Package 2: (For adults only- minimum 10 adults- for 300-350 AED each) Breakfast, brunch, lunch, or dinner (including appetizers) Cakes and sweets Waiting service Chairs and tables Lighting

5


Simple décor

Package 3: (For adults- less than 10 people- for 250-200 AED each) Breakfast, brunch, lunch or dinner Sweets Waiting service Chairs and tables

Package 4: (For Kids birthday parties- minimum 10- for 275 AED each) Kids meal Mini appetizers Mini sweets Birthday Cake Lighting Balloons Face painting Activities Tables and chairs Birthday décor

BrandingSweet Indulgence is the name chosen for the business. Since the main products provided are “sweet” and “indulgence” is the fulfillment of the products. It gives an image of delicious foods that are sweet and satisfying.

The image below is the logo designed for Sweet Indulgence. This logo will be shown on the packaging of its products, as well as any advertising. A logo and tagline, which reads “be healthy be gluten-free” helps in branding a business. When customers see this logo, it sets an image or idea about what the business is about.

4. PromotionMass media: Social mediaThe main advertising promotion method that will be used is social media. Most of the targeted customers are online 24/7, via mediums such as Twitter and Facebook. This gives Sweet Indulgence to advertise online and for free! By designing a poster, it can be posted online for free, and easily spread through the Internet. Sweet Indulgence will have its own Twitter and Facebook accounts to post pictures and information about its products, as well as promote on upcoming products or sales.

6


The following image is an example of a poster that will be posted through social media:The poster is to advertise the grand opening of Sweet Indulgence.

Other mass advertising mediums such as TV, magazines and billboards tend to be expensive. Once the business is launched and gains profits, the business can plan a TV advertisement and a billboard advertisement to be shown around Dubai in specific locations where its targeted customers are found.

Sales promotionsFor a new product, it is a good idea to have a sales promotion as a way in promoting the product to the public. Sweet Indulgence provides customers with free membership cards. When buying a pastry at Sweet Indulgence, the card is stamped by the employee, and when the customers collects 9 stamps, the 10th will be a free purchase for the customer. Below is an example of the Sweet Indulgence membership card:

Publicity and public relationsHaving accounts on Twitter and Facebook, allows Sweet Indulgence to publicize for free! Information on the Internet spreads like “wild fire” and so any information that is posted online can be easily spread between users. Twitter will be used to post tweets about any promotions or upcoming products for Sweet Indulgence, while Facebook will be used as a fan page, where users are able to freely comment and add any suggestions

7


for Sweet Indulgence. On this Facebook page, Sweet Indulgence will post photos of certain products and post about any promotions or new products.

Thoughts wallA thoughts wall will be shown in the shop itself. Through a projector, Sweet Indulgence will display their Twitter account within the shop, where customers are able to tweet to “@sweetindulgence” and see their own tweets show on the wall in the shop. Since a majority of the population use technology, they are able to participate and also tweeting about Sweet Indulgence increases the businesses publicity for free. Taking into consideration that customers may tweet negative comments. By dealing with these in a professional way, Sweet Indulgence hopes to take in negative comments as suggestions to improve it’s customer’s wants.

Competitive analysis SWOT analysisA situational analysis helps the business to gather a detailed assessment of the current marketing conditions facing it and an understanding of the market; it’s targets and competition. Through the “SWOT” analysis, the company can find out its strengths, weaknesses, opportunities and threats.

StrengthsSweet Indulgence focuses on products that are gluten-free, which is rarely found around Dubai. This acts as a strength for the company, since customers have better access to gluten-free products. Also, gluten-free products that are found in Dubai tend to be pricy. Sweet Indulgence is a bakery that offers gluten-free products at affordable prices, and so is a strength for this company in providing customers with delicious, tasty gluten-free products at prices that suit the customers.

WeaknessesThis business might face some barriers and weaknesses. One of the main barriers to Sweet Indulgence is the taste of the products. Since gluten is the element that makes pastries tasty. Having gluten-free products acts as a barrier to the taste of these products. Various recipes and hiring bakers that are able to bake delicious and tasty products, which are also gluten-free, may be a hassle.

OpportunitiesNew products create new experiences for people; from the way the products would be baked, to the different tastes and meeting new employees. These are all opportunities Sweet Indulgence would face. Once the business is launched and starts gaining a profit, it is important to seek newer opportunities that arise. By expanding the shop in size, or changing the look and feel of the shop or opening another branch nationally or internationally. Sweet Indulgence must be aware of trends or special occasions such as national day or Christmas. Where the business can create special products that are only limited to the occasion period.

ThreatsThe main threat would be the competition. From the large number of other bakeries and coffee shops found in Dubai, this gives Sweet Indulgence a bit more challenge in attracting customers. Being in a society with various cultures and traditions, everyone has their own diet and routine. Not just any customers, but having regular customers who enjoy the food and seating of the bakery. By focusing on advertising and public

8


relation methods, it would help the business in gaining regular customers. Sweet Indulgence aims to use certain techniques from advertising to free sampling for its customers, as a way to avoid this threat.

Key Success FactorsSweet Indulgence offers delicious pastries. First experiences are important, when a customer enters the bakery for the first time, the experience should be magical. No food business would offer food or products that are not tasty and so having delicious pastries that are gluten-free is a key success factor for Sweet Indulgence.

Competitive advantageEvery company has its competitors, but having a competitive advantage allows a business to stand out and be seen. The main competitive advantage for Sweet Indulgence, is offering gluten-free products in affordable prices. It is very difficult to purchase gluten-free products in Dubai or other parts of the UAE and this gives Sweet Indulgence a competitive advantage among other bakeries and coffee shops in the UAE. Having a gluten free bakery provided to customers with affordable prices is a competitive advantage.

VOICE OF CUSTOMER REPORTInterviewsFatma Alsayegh, a graduate from Communication and Business SciencesAn interview had been conducted with a targeted customer, as she is a person whom cares about what she eats and is in search of ways on how to become healthy. Fatma Alsayegh will be one of the loyal customers as she was excited and anxious to try one of Sweet Indulgence’s gluten free pastries. However, she commented on whom our customers will mostly be as she believes that our customers will be mostly non-UAE national seeing that most of UAE nationals are fond for heavy food and wheat. She also added that she does see a competitive advantage in our bakery as she stated “now-a-days what you eat depends on everything” in other meanings, people are starting to eat more healthy food as it’s the most guaranteed way to stay healthy for a longer time. She also added that this is a small market, so we will be dominating our market. She added that not only that will our customers be people whom are seeking for healthy food but there might be some nutritionals and hospitals whom will be willing to buy our products for their patients since it is not offered anywhere in the UAE.

Abdulla Bin Turkeya, a Business manAbdulla Bin Turkeya comments that the business plan is well organized and the idea is going to be considered a niche business in the UAE market. Yes, there are lots of bakeries but there isn’t any bakery that is specialized in baking common allergies baked goods.

Bin Turkeya has a couple of friends that suffer from celiac-disease and others who suffer from dairy intolerance. According to them, they suffer in finding the right products and if they do the products are not freshly baked and do not really taste that good. He found that the well-thought-out business plan is a way in increasing an entrepreneur's chance in establishing a successful business. On the other hand, business planning helps a person in operating in a way to avoid future risks. It also helps a person in determining what products and services that are sufficient to the UAE’s market, establishing a competitive advantage, and defining the target customers. Most importantly, a business

9


plan will help a person in understanding the risks involved and anticipating potential problems, so in the future these problems could be solved.

Ahmed Sultan, Business student.Business planning in his opinion is very important. “It’s like a set plan you know what are you doing and when you are supposed to do it. It keeps you on track and you don’t forget anything especially the small things. Planning is very important no matter what you are doing, planning your life or planning your day. Plan it nothing better than that.” Ahmed Sultan adds that he is not allergic to anything so he really can’t say, but he thinks it might work by just have to get the business out there. Sultan is sure that there are tons of people who suffer from certain allergies, so “this is not just a business but it’s for a good cause.”

Ruqaya Jassim, a Business studentRuqaya Jassim is currently a senior business student, studying Finance. Her first thought of this business is that it will not highly succeed! She provides opinionated reasons that people living in Dubai, especially Jumeira, do not care to what they eat, but the place they are eating at. She thinks that people would not be highly attracted just knowing products are gluten-free, although states that she does not know anyone that has allergies to these. She suggested going into more research about the targeted customers, and finding out the percentage of people that have these allergies. Thus, be able to find the right location to sell these products.

Survey Results14 surveys were completed:

o Male 4o Female 10

Age groupo 5-14o 15-24 9o 25-34 4o 45-54 1o 55+

Nationalityo UAE 12o National other 2

Do you know what gluten-free products are?o Yes 9o No 5

Do you know where to find gluten-free products?o Yes 5o No 9

If yes, Where? ___Organic, Waitrose____

Would you buy gluten-free pastries?o Yes 12

10


o No 2

Do you care about having gluten-free products? o Yes 10o No 4

Do you think restaurants should provide gluten-free products?o Yes 13o No 1

How much would you pay for a gluten-free muffin? ___5, 10, 10, 10, 10, 10, 10, 15, 15, 17, 20, 20, 20, 40___

ORGANIZATIONAL PLANOrganizational structureThe bakery will require several employees with different qualifications and skills, however each of these employees should work as a team and communicate with each other so that the work will be accurate and efficient. The selection criteria will be based on the qualifications that Sweet Indulgence requires. The employees needed for this bakery to function are bakers, cashiers, waiters and managers. Since Sweet Indulgence is beginning from the start, the openings of employees will be very minor, though as the bakery grows and hopefully expands, more qualified employees will be needed.

The bakery necessitates staff of 7 whom are willing to work full-time and part-time. The staff needed is 1 baker and 1 manager 1 cashier and 4 waiters. The baker, manager and cashiers are needed to work full-time, on the other hand waiters can choose to work full-time or part time. Staff will be evaluated every month in addition to the food served to customers, where customers will be asked to fill in their opinion regarding staff manners and food quality and taste, via a suggestion card. Staff who are committed and work hard will be rewarded with a bonus in their salary, in addition to their picture on the wall stating “employee of the month”.

Qualifications and job descriptionManager qualifications:Bachelor degree in management. Must have at least 3 years’ experience in bakery department operations.Manager job description:

- “Bakery Managers are responsible for managing department inventory, in-stock position, pricing integrity, merchandising, labor, and other operational processes to company standards” (Foodland, 2012).

- “He/she must follow the company sales and production planning standards and will ensure that the bakery department achieves the standards of performance as outlined in the work plan” (Foodland, 2012).

The baker qualifications:A CIA bachelor's or associate degree in culinary arts or baking and pastry arts.Baker job description:

- “Prepares bread, rolls, muffins, and biscuits and any kind of sweets according to recipe” (Career planner, 2012).

- “Checks production schedule to determine variety and quantity of goods to bake” (Career planner, 2012).

11


- Able to experiment in making new recipes.

Waiter qualifications: High school education preferred or equivalent combination of education and experience.Waiter job description:

- A waiter needs to be well groomed and dress up well to create good impression on the guests (Charlie, 2010).

- They should be qualified with good manners, as they need to speak politely to the customers with good English and at least one waiter good Arabic speaking skills (Charlie, 2010).

- Make sure that their services they have rendered had satisfied the customers(Charlie, 2010).

- Must be able to tackle difficult situations professionally and deal with customers (Charlie, 2010).

- To clean tables after customers and clean bakery after closing time.

Cashier: High school diploma.Cashier job description:

- Count money in cash drawers at the beginning and at the end of shifts to ensure that amounts are correct and that there is adequate change.

- Taking customers orders with good manners.

After employees had been selected each will be trained based on the department they will be in charge of. Bakers will be trained at the beginning and at the end of the year by professional chefs to ensure their cooking skills are accurate and are updated to reach sweet indulgence goals.

Employee salaries are as follows:

Position Salary

Owner/General Manager (10,000 AED each) 30,000 AED

1 Chef /baker 15,000 AED

1 Manager 3,000 AED

4 Waiters (2,000 AED each) 8,000 AED

Cashier 1,500 AED

Total 71,000 AED

Management teamBusiness organizationThe Bakery is systemized as a partnership that consists of 3 owners who are Nouf Al Bastaki, Manayer Al Shawab, and Shamsa Bin Turkeya having an equal ownership to the business.

Board of directorsNouf Albastaki Owner and General Manager: Experienced in Marketing, Public Relations and Management skills. Graduated from Zayed University with a bachelor degree in PR. In

12


charge of the advertisement of bakery and products, in addition to the management of the bakery.

Shamsa Bin Turkeya Owner and General Manager: Holds skills for Accounting and Financial Operations. Graduated from Zayed University with a bachelor degree of finance. Responsible for all the finances of the bakery and the outgoing and ingoing cash flows.

Manayer Alshawab Owner and General Manager: Specialty in the Human Resources Management. Zayed University graduate carrying HRM bachelor degree. Responsible for the efficiency of the whole recruitment and selection process and manages employees’ rewards and wages.

Organizational culture:

Sweet indulgence provides a diverse environment where it certifies that all employees come from different places whom share high skills in hospitality. Members of sweet indulgence must work as a team and communicate with each other to easily achieve the growth of the bakery. Each member will be given the chance to express thoughts and opinions regarding the work in the bakery through staff meetings. In addition the chef will have the rights to create new recipes and update the menu with approval of the management team. Employees working for sweet indulgence will be able to easily reach the managers and owners of the bakery if needed.

OPERATIONAL PLANThese prices are all to approximate to the current industrial sales.

SuppliersContracts with the following companies:Gala source - Fixtures and EquipmentDJ Sharaf- Projector and Music equipmentGargash Lighting- Lights

RentSweet Indulgence aims to rent for 140,000 AED a year, with rent divided into four installments, hence 35,000 AED every 3 months.

Leasehold improvementsThe leasehold improvements that Sweet Indulgence believes are necessary are lighting and projector; for the thoughts wall. An agreement with Gargash Lighting Company to provide yellow lights, which will cost around 1,000 AED. On the other hand, an agreement with DJ Sharaf for music and a projector that will cost us about 1,500 AED.

Depreciable TotalThe depreciable costs are presented in the table bellow: Leasehold improvements 2,500 AEDFixtures and Equipment 57,466 AED

Total 59,966 AED

Other Start-Up Costs Other start-up costs are anticipated as follows:

13


Banking fees 500 AEDLicenses 4,000 AEDGrand Opening 3,000 AED

Total 7,500 AED

Fixtures and EquipmentCertain equipments are needed for the bakery that Gala source is providing with reasonable prices, such as convention ovens, mixers, blenders, dishwashers, and proofers. Gala source is also provides tables, chairs, tablecloths, cups, mugs, forks, knives, spoons, and plates. Most importantly, the catering furniture that consists of catering dishes, floral stands, food carriers, and catering cooking equipments.

Operating costsThe estimated cost of utilities is AED 3,400 per month, including WIFI, phone, fax and electricity.

Sales terms and conditionsThe bakery accepts cash or credit.

Inventory levels Aside from our fresh baked goods Sweet Indulgence will have wide variety of gluten-free products that are shipped from the U.S providing customers with the best quality of goods. Also having some pastry samples on display for customers to order.

Capital equipment in the kitchenOven AED 9,183 For baking purposes Proof boxes

AED 6,611For products that will require the dough to be proofed (rise) (Breads, donuts, bagels etc.)

Dough SheetersAED 11,019

Products that will require the dough to be rolled out (pie crusts, yeast donuts etc.) (saves time and labor expenses)

Mixers AED 9,183Standard Work Table

AED 734

Sinks AED 1,469Total: AED 29,016 All prices are taken from (Equipment Inc, 2011).

Equipment in dining roomSeating:

- 4 Sofas (each fits 3 people) - 2 Coffee tables - 6 Tables (each has 4 chairs) - 24 Chairs

AED 3,000 eachAED 200 eachAED 400 eachAED 150 each

Total: AED18,400

Music: Purchased from Sharaf DG- Stereo Total: AED800

Facilities- Projector - Etisalat Wi-Fi and fax package - Telephone and phone bill - Water and Electricity bill

AED 1,500AED 300/monthAED 100AED 1,500

Total: AED3,400

14


Lighting:- Yellow lighting (bulbs and lights)

Total: AED 1,000

Other facilities - Cashier machine

- Female and Male washrooms2 separated washrooms (for each gender) that can occupy 2 sinks and 2 toilet stalls. Also including toilet necessities, such as: paper towels, tissue, soap, air freshner.

- Cleaning supplies (per month)Such as Brooms, detol, cloth towel etc.

AED 350

Budget: AED 500

Total: AED 4,350

All of equipments will be payed by credit Total 28,450 AED

LayoutThe following images show the layout of the shop.

Outside seating (3 tables) Overview of the layout (bathroom, indoor and outdoor)

Indoor seating with pastries Sofas

FINANCIAL PLANBackground and assumptionsSweet indulgence’s products help in subsidizing and maintaining a good health. The financial projections are that people will continue to buy products by Sweet Indulgence because it is considered to be a niche business in UAE’s market. Sweet Indulgence believes that the prices will be slightly different than any other bakery since it requires more effort in producing and perfecting these goods. The following general assumptions are all estimated in average units because it is much easier to provide these assumptions in sales and revenue, as the values are comparative to the sum.

15


Revenues and profitsRevenues and profits are presented in the table below. The table indicates that the first and second year of the business being operated won’t make any profit until the third year. The first and second year will focus on paying back the loan, rent, and workers. However, in the third year Sweet Indulgence aims to start receiving a salary of 40,000 AED as the owners of the bakery.

General Assumptions: Year 1 Year 2 Year 3

Revenue: 370,000 AED 440,000 AED 510,000 AED

Break-even analysis50,000/0.65= 76,923

To reach break-even point sales must be worth AED76,923 has to be made every month.

Operating BudgetThe bakery’s expenses for the first month are estimated to be 225,870 AED.The bakery's fixed costs on a monthly basis are as follows:Description Cost Rent 10,000 AEDUtilities 3,400 AEDDepreciation 25,000 AEDSalaries 187,500 AEDTotal 225,870 AED

The bakery's Variable costs on a monthly basis are as follows:Advertising 500 AEDCleaning supplies 500 AEDIngredients 5,000 AED

Total 6,000 AED

Balance sheet

Income statementThe following table shows the income statement for the first month.

Current AssetsCash 313,474 AEDAccounts Receivable 1,500 AEDInventory 2,850 AED

Total Current Assets 317,824 AED

Fixed Asset Equipment 57,466 AEDLess Depreciation 25,000 AED

Total Fixed Asset 32,466 AEDTotal Assets 350,290 AED

Liabilities and owners’ equity

16


Current liabilities Short term loans 35,000 AEDAccounts Payable 57,466 AED

Total Liabilities 92,466 AED

Owners’ equity Alshawab, M 10,000 AEDAlBastaki, N 10,000 AEDBin turkeya, S 10,000 AEDRetained earnings 227,824 AED

Total owners’ equity 257,824 AEDTotal Liabilities and Owners’ Equity 350,290 AED

CONTINGENCY PLANThe contingency plan will represent solutions if anything goes wrong or if Sweet Indulgence could not meet our goals. Some scenarios are developed just incase the bakery acceptance goes slower than expected.

The first scenario is if Sweet Indulgence could not meet the expected goals, owners of the bakery won’t receive their salaries, which will reduce expenses up to 160,000 per month that is of 192,000 AED per year.

The second scenario, where the manager’s position can be disregarded, hence, saving 3,000 AED per month, which is 36,000 AED per year. On the other hand, since the partnership is made up of 3 owners the owners could manage it instead.

REFERENCESBakery equipment. (2011). Bakery start up quote form. Retrieved January, 17 2012, from

http://bakeryequipment.com/Bakery-Equipment/Customer-Service/start-up-quote.htm

Career planner. (2012). Job Description and Jobs. Retrieved January, 17 2012, from http://dot-job-descriptions.careerplanner.com/BAKER.cfm

Charlie, S. (2012). Waiter job description. Retrieved January, 17 2012, from http://www.buzzle.com/articles/waiter-job-description.htmlFoodland.

(2012).General Merchandise (GM) Manage. Retrieved January, 17 2012, from http://www.foodland.com/job-categories/general-merchandise-gm-manager

Sales 50,000 AED

Cost of goods sold 15,000 AED

= gross profit 35,000 AED

Operating expenses

Salaries 71,000 AED

Rents 10,000 AED

17

http://www.foodland.com/job-categories/general-merchandise-gm-manager




Utilities 3,400 AED

Advertising 500 AED

Depreciation 25,000 AED

Equipment expenses 57,466 AED

Total operating expenses 167,366 AED

Gross profit 132,366 AED

18

Documents

Business Plan