Portland Kids Kitchen Business Plan

Portland Kids Kitchen

Sara James, Sara Bindl & Jessica Yutrzenka

Portland Kids Kitchen Business Plan

April 25th, 2015

1 Portland Kids Kitchen Business Plan

April 25th, 2015

Table of Contents Business Summary2

Market .3 Market and Competitive Advantage..3 Problem..3 Competitive Advantage..3 Target Consumer..4 Marketing Plan4

Business Model & Financials.5 Business Model and Execution...5 Basic Activities and Operations.6 Financial Plan...6 Needs.6 Revenue & Expense Breakdown6 Cash Flow Positive......7 Expected Return7

Current Status7 Team.. 7 Ask..8 Current Status...8

Appendix9 Article 1. Business Model..9 Article 2. Product Summary..10 Article 3. Basic Activities and Schedule....11 Article 4. Team12 Article 5. Financial Projections13 Works Cited...16


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Business Summary

Portland, Oregon is a city widely known throughout the United States for being food loving,

health-focused, and made up of a wide variety of interests. The Portland Kids Kitchen aims to

target this quirky culture through cooking classes offered to kids in the Portland metro

area. Our mission is to provide lifelong, healthy habits to children through cooking classes in a

fun and creative way.

The Portland Kids Kitchen offers classes to children ages 3 to 12, breaking them up into similar

age groups throughout the week. Not only is cooking a lifelong skill, but it also provides kids

with a learning experience beyond the classroom, challenging them in math, science and literacy

skills. PKK will target all aspects of a childs development process, fostering self-confidence, cooperation, and general academic knowledge.

The following plan will feature the opportunity at hand, target market, logistics, and financial

structure of the Portland Kids Kitchen. We are seeking an initial investment of $35,000 as

funding for startup costs, appliances and food and ingredients for the first year. We understand

the high risk of starting a business in a newly developing industry, but with the citys unique and health-focused culture, PKK presents itself as an opportunity that is viable and full of potential.

Problem

With over a third of kids in the United States being overweight, we see a great need for

improving the diets and lifestyles of our youth. Additionally, many parents dont know a lot about how they can prepare healthy, nutritious and delicious meals for their kids, so we hope

to provide insight to them as well.

Market

Our target market encompasses families with children between the ages of 3-12, so most likely

parents in their late 20s through early 40s. The Portland Kids Kitchen is targeted toward

middle to upper class families living in and around the Portland metro area, home to

approximately 532,807 kids under the age of 18 (American Fact Finder). The Portland Kids

Kitchen will be located in the Southeast Portland neighborhood, an area inhabited by

approximately 19 elementary schools (Portland Public Schools). The parents of the children we

hope to attract are health conscious, active, adventurous and hip. Ideally these parents are

working during the day and in need of a fun, creative, extracurricular activity for their child to

do until they can pick them up after work. The children we hope to attract are between the

ages of three and twelve who enjoy food, being creative and trying new things.

Industry

The industry we are entering encapsulates both the industry of after school programs, whether

it be sports, camps, music lessons, etc. as well as the culinary/food industry.


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Competition

The Merry Kitchen in Portland is our biggest competition, and offers cooking classes to kids out

of a womans home in the northeast area. There are also cooking classes offered to kids through the Portland Culinary Workshop, summer camps at Sur La Table, and cooking classes

held on Saturdays in the summer at the Portland Farmers Market. Aside from the Merry Kitchen, none of these other programs are both year round or after school.

Competitive Advantage

The biggest strength of Portland Kids Kitchen, and probably its most attractive aspect to

parents, is the fact that it is health-focused. All of our recipes cater to the health conscious

parent and we work to show kids both the benefits of a healthy lifestyle as well as the fact that

food can be healthy but still taste good. None of the other kids cooking programs in Portland

have a healthy focus, so this is what sets us apart. Additionally, our classes range from pre-

school aged children to junior high, which is a larger span of age groups than many programs

offer. We are located in a bustling part of the city and the southeast area is just a few minutes

from downtown.

Market

Market Analysis

The Portland Kids Kitchen will launch in Portland, Oregon (specifically in the Southeast

neighborhood) because Portland has the ideal market fitting the mission of the program. There

are approximately 356,981 children under the age of 12 living in the Portland metro area

(American Fact Finder). There are roughly 70 elementary schools in Portland, 19 of these

being in Southeast (Portland Public Schools). It is very important that the parents of these

children have a fun, safe, and educational environment for their children to go to while they are

at work. Laughlin reports that half of grade-school aged children were in childcare

arrangements on a regular basis outside of school and self-care (Laughlin 2013). These parents

need somewhere for their children to spend their time, and our program offers a creative

learning space for their children. Parents are willing to spend a lot of money on childcare;

therefore theyre within the market that would pay for the after school cooking classes. The national annual average spent on daycare by families with kids under five years old was $9,300

in 2011 (Laughlin 2013), which is around $775 per month; Portland Kids Kitchen plans to move

in on this market by offering a more creative and educational alternative to daycare.

Portland is also known for being a city that is food loving. With 7,225 restaurants and 72,233 mobile food services in the Portland metro area, there is a large demand among Portlanders for

food related businesses (County Business Patterns 2012). Portland also places a strong emphasis

on healthy eating and living, but there is a lack of businesses targeted towards helping the next

generation live a nutritious life style. Portland Kids Kitchen aims to penetrate this underserved

market and take advantage of the ideal opportunities available.


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Problem

About 17% of children ages 2-19 years old in the United States are obese, and over a third of

children are considered overweight (Childhood Obesity Facts, CDC). As a cooking school we want to teach our children about healthy living so that they can both make healthy meals to

share with their families at home and learn to make healthy choices when they are on their

own.

Competitive Advantage

The Portland Kids Kitchen is unique from any other cooking class offered in Portland because

of the focus on healthy living and our emphasis on incorporating learning techniques that

stretch beyond what they learn in the classroom. As an after school program, its important for kids to have fun, to feel safe and to feel cared for. What makes us at PKK unique, however, is

that we hope to additionally offer children the social skills necessary to develop into a happy,

well-rounded and successful adult. This means emphasizing working in teams and interacting

with other children, sharing, setting goals, promoting a positive and encouraging environment to

establish confidence in our children, and hopefully providing them with a newfound passion for

cooking.

An additional factor that sets PKK apart from the competition is our facility. We will have a

customized, kid-friendly space that allows kids to express themselves creatively and to be

inspired by the environment around them. Our kitchen will be furnished with top of the line

appliances, kid-friendly and safe utensils, knives and other kitchen tools, as well as a relaxing

lounge space for story time, arts and crafts, or resting if kids choose to do so. Furthermore,

we will have a comfortable waiting area for parents, caregivers and siblings if they choose to

show up to watch the class or if they arrive early for pickup.

A last important component of PKK that sets us apart is our passion for utilizing locally grown,

seasonal ingredients and our support for sustainable farming. All of our food and ingredients

will be locally sourced and we hope to establish a partnership with farmers markets and potentially a neighborhood grocery store so that we can both support our local economy and

our planet. Finally, after we turn a significant profit following year three, we hope to implement

a garden near our facility so that we can teach kids to grow their own vegetables and herbs.

Not only would this be a fun and potentially brand new learning experience for the kids, but it

would also foster a sense of accomplishment in them after they see their hard work and care

come full circle through incorporating their final product (herb or veggie) in a homemade meal.

Target Consumer

Our target consumers are children between the ages of 3 and 12, but in order to reach the

consumer, we must also target the parents. These parents will most likely be in their mid-20s to early 40s. The Portland Kids Kitchen is focused on enabling kids to live healthy lifestyles, thus it will be targeted towards active families because they are most likely to put their kids in

this type of program. The kitchen will be located in Southeast Portland, so the families enrolling

in the classes will probably live in and around the Southeast area. The families will be actively

involved in the community, with kids participating in afterschool clubs and sports. These

parents are middle to upper class, and likely shop for groceries at New Seasons because they


April 25th, 2015

are health conscious and hip. Ideally the parents are busy with work during the day, so they

want beneficial, fun, and creative extracurricular activities for their children until they get off

work. Portland Kids Kitchen targets kids who are active, enjoy learning, and like to try new

activities.

Marketing Plan

Building awareness for Portland Kids Kitchen will be one of the most important, but also most

challenging, aspects of starting out in a metropolitan area like Portland. PKK must first gather

interest from both parents and children. In order to bring attention to the new cooking classes,

we will reach out to the local community through school and events. Southeast Portland has 19

elementary schools and there are roughly 70 elementary schools in the Portland Public School

District and Douglas School District combined (Portland Public Schools). We plan on getting

fliers, posters and handouts in each of these schools, as well as other elementary schools

around Portland. To reach the parents of our target consumer, we will have a presence at PTA

events and work with Portland schools to be in newsletters that are sent out to parents, and

hopefully even get into the classroom to market our program to students. We will also market

with fliers and brochures in local gyms, grocery stores, and fitness studios because these are

the locations that our target families are likely to spend their time. This is how we plan to get

our foot in the door with parents and children of Portland.

Portland Kids Kitchen will also have a presence on social media; this will not be the largest

focus of marketing because our target consumers do not tend to be the most active on social

media sights. However, by having well-developed accounts, parents will have the ability to share

the information about PKK online through their social media and expand our audience.

Once we have a customer base, we strongly believe that word-of-mouth will be our biggest

form of marketing. Parents of elementary age children tend to talk to each other often about

what their children are involved in. Once we show some parents how beneficial and fun the

cooking classes are for the children, they will in turn tell other parents about the classes, and it

will become an ongoing cycle of marketing for Portland Kids Kitchen.

Once PKK is off the ground in full force, we foresee sponsorship of local youth sports teams

and active events like 5Ks or triathlons to show our support of active, healthy living and our

community. By showing our support at these events, we are also targeting our ideal consumer

who will likely already attend these events.

Business Model & Financials

The business model for Portland Kids Kitchen is primarily centered on relationships. Our

customer acquisition and retention, key partners, and success in general all revolve around the

relationship we establish with both the community that we serve as well as the reputation we

establish through interacting with our customers and partners. We pride ourselves on a few

key value propositions: offering kids a fresh and unique experience in the kitchen that they

wont find anywhere else, encouraging creativity in children that most likely wont come out in the classroom, teaching kids the importance and benefits to healthy eating and living, and

providing parents with a safe, educational and fun place for their kids to be either during the

day or after school. With this wide array of value propositions we hope to acquire a variety of


April 25th, 2015

different customers that will contribute to the success and diversification of our program. A

key factor in our ability to acquire customers is going to be by word of mouth. We plan to go

into schools, post flyers, talk to parents at local community events and more in order to

acquire our initial network of customers and hopefully provide them with a fantastic experience

so that they might spread the word about our program. Through word of mouth and social

media as well we hope to build strong positive relationships with our customers so that they

can help us expand our network.

Other important relationships that come into play for Portland Kids Kitchen are with our key

partners. We hope to partner with local grocery stores, schools, farmers markets and local government in order to further improve our program, raise awareness about it and give back

to our community. Our partnerships also emphasize the importance of consuming local and

seasonal products and well as promoting local community building. A true sense of community

is important to us, and we want to do our part to improve and shape our community to help it

grow and prosper. (See Article 1)

Basic Activities and Operations

Entering into a new and developing industry with a huge market means we need to start out

slow. Our basic activities when starting out are going to be marketing and raising awareness

about our program, so going into schools, community centers and talking to parents about

what we are doing will be crucial. Getting the word out is the most essential part to starting

out because we cant give a cooking class if we dont have any kids to take it. After we acquire a client base and enough sign ups to hold a class, well lay out the schedule for when we plan to start, giving us enough time to prep and get menus and recipes locked down for the first

session of classes. We will most likely refrain from hiring anyone onto the team full time for

the first year just because we need to accumulate more of a client base and profits in order to

pay employees. For the first year, Sara James, the founder of PKK, will teach classes with

assistance from Sara Bindl and Jessica in terms of individual help for kids, food prep, and

cleanup. Additionally we will rely on high school or community volunteers for any extra work

we might have. Once weve established a steady revenue stream and client base after the first year, we will go on to offer more classes, hire on two full time employees, a primary teacher

and a marketing specialist, and improve our brand in whatever means necessary (social media

marketing, renovations, expansion, etc.). (See Articles II & III)

Financial Plan

Needs

PPKs financial projections in this plan are based on the context of receiving a $35,000 investment from the University of Portlands Launchpad in return for a 10% equity stake in the company. This investment will go towards rent, startup costs that mainly include appliances

and minor renovations, and food and ingredients. Prior to this investment we will also run a

crowdfunding campaign to gather additional funding for startup costs as well as test the market

potential.


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Revenue & Expense Breakdown

Revenue is driven by product sales, or in our case, sale of class packages, event bookings, and

camp sign-ups. Product sales will mostly be conducted through online sign ups via our website

calendar and booking tool, but there will also be the option of drop in sign-ups for classes and

calling in to book an event or party. During years two and three the company will grow by

increasing class sizes, acquiring more signups for classes, holding more birthday parties and

events, and expanding the seasonal camp programs.

The primary expenses for PKK are going to be rent, paying employee salaries, and COGS.

COGS are made up of food, ingredients, and art supplies as well as an initial down payment for

appliances in the first month of operations. Other fixed costs include monthly payments for

rent, appliances, insurance, social media and marketing, and utilities.

Cash Flow Positive

With the investment of $35,000 PKK will be cash flow positive by the end of year one.

If we are able to conduct a successful crowdfunding campaign we may even reach this

milestone before the end of the first year of operations. Following the first year we will

be positive just shy of $2,500 and by the end of year three we predict be somewhere

around $55,000 in net cash flow.

Expected Return

Assuming we were to value the company at $700,000 based off of the $139,670 net cash

flow at the end of year five, and a conservative 5 times multiple, this would produce a

100% return on the $35,000 investment over the 5 year plan period, given

investors 10% equity in the company. We expect to see significant growth after five years of operation, beginning with the 19% increase in net margin from year two to year

three as a result of the expansion of our classes as well as our client base. Year five is

predicted to yield another 19.4% increase in our net margin as we accumulate more

notoriety and establish our brand within the city through an enhanced marketing

campaign and continuous growth of our client base. (See Appendix V)

Current Status & Team

Currently the venture consists of a team of three co-founders: Sara James, Sara Bindl and

Jessica Yutrzenka. Sara James, the CEO of Portland Kids Kitchen has always dreamt of bringing

two of her passions, working with kids and cooking, together to make an exciting and

rewarding career. The idea of PKK came together when she discovered that programs

encompassing these two concepts already existed in food-loving cities like New York and San

Francisco. Sara brings the passion and vision for the business to the table. Sara Bindl and

Jessica Yutrzenka are currently studying finance and global business, respectively. They both

enjoy working with children as well as cooking and living healthy, balanced lifestyles. The two

of them contribute their knowledge of the business world as well as a real eye for creativity and

design. (See Article IV)


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The team at PKK recognizes the gap in staffing that we will eventually need to fill once we

acquire the funds. We are still in need of a primary instructor, preferably a young man or

woman with teaching experience. We also would be interested in hiring a marketing specialist

to manage advertising and social media. We plan to outsource our accounting needs to local

firms and are considering hiring a part time chef or nutritionist as a consultant for new recipes,

ingredients and techniques that will improve the program over the years.

Ask

We are asking for $35,000 to fund the startup of our business which will be put towards an

initial down payment of $5,000 to lease all of our appliances (like a refrigerator, stovetops,

utensils, blenders, bowls, etc.), our COGS (food, ingredients and art supplies), and some

general renovation expenses for the first year (paint, bookshelf, furniture, computer).

Current Status

Currently Portland Kids Kitchen consists of the team members discussed prior and a strong

vision for what the future will look like. We are in the beginning stages of designing and

developing our classes, with a few trial runs under our belt. A studio design and location are

still in the works, but we hope to connect with other business partners and culinary

professionals that share our vision for developing a fresh, exciting, and creative space for

Portland kids in the years to come!


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Appendix

Article I. Business Model


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Article II. Product Summary


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Article III. Basic Activities and Schedule


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Article IV. Team

Left to Right: Co-founders of PKK Jessica Yutrzenka, Sara James, and Sara Bindl expanding

their culinary knowledge at BaiPai Thai Cooking School in Bangkok, Thailand.


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Article V. Financial Breakdown


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Financial Projections: Summary

Total Revenues Total Expenses

& COGS

Net Cash Flow Net Margin %

Year 1 $102,865 $100,400 $2,465 2.4%

Year 2 $182,675 $178,800 $3,875 2.1%

Year 3 $264,010 $208,200 $55,810 21.1%

Year 4 $301,650 $204,900 $96,750 32.1%

Year 5 $344,570 $204,900 $139,670 40.5%


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Works Cited

"American FactFinder - Results." American FactFinder - Results. United States Census Bureau, 2009.

Web. 17 Apr. 2015.

.

"Childhood Obesity Facts." Centers for Disease Control and Prevention. Centers for Disease Control

and Prevention, 11 Dec. 2014. Web. 14 Apr. 2015.

.

"County Business Patterns (NAICS) 2012: Accommodation and Food Services." Censtats Database.

United States Census Bureau, 2012. Web. 18 Apr. 2015. .

Laughlin, Lynda. "Who's Minding the Kids? Childcare Arrangements: Spring 2011." Household Economic

Studies. United States Census Bureau. United States Census Bureau, Apr. 2013. Web. 16 Apr. 2015.

.

"Portland Public Schools." Portland Public Schools - Portland, OR. Portland Public School District, n.d.

Web. 18 Apr. 2015. .

Documents

Portland Kids Kitchen Business Plan