BUSINESS PLAN
PURU LI WENXIAN WANG
WENZHE CAI XUELING WANG
ZHIHAO YE
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CONTENT
EXECUTIVE SUMMARY ......................................................................................................................1 OBJECTIVES .......................................................................................................................................................1
MISSION ............................................................................................................................................................1
KEY TO SUCCESS ...............................................................................................................................................1
COMPANY SUMMARY .........................................................................................................................2 UNIQUE SELLING POINT ...................................................................................................................................2
COMPANY OWNERSHIP ....................................................................................................................................2
COMPANY LOCATION .......................................................................................................................................2
MARKET ANALYSIS ..............................................................................................................................3 INDUSTRY ANALYSIS .........................................................................................................................................3
PEST ANALYSIS ..................................................................................................................................................4
SWOT ANALYSIS ................................................................................................................................................5
FIVE FORCES......................................................................................................................................................6
MARKET SEGMENTATION .................................................................................................................................7
COMPETITION AND BUYING PATTERNS ...........................................................................................................7
MAIN COMPETITORS ........................................................................................................................................7
STRATEGY AND IMPLEMENTATION .........................................................................................9 BUSINESS STRATEGY .........................................................................................................................................9
BRANDING AND POSITIONING STRATEGY ..................................................................................................... 10
PRODUCTS ..................................................................................................................................................... 10
PROMOTION STRATEGY ................................................................................................................................ 11
PRICING STATEGY .......................................................................................................................................... 12
SALES FORECAST ............................................................................................................................................ 13
OPERATION MANAGEMENT .........................................................................................................14 CAPABILITY PLANNING .................................................................................................................................. 14
SERVICE PROCESS .......................................................................................................................................... 15
SUPPLY CHAIN ............................................................................................................................................... 15
HUMAN RESOURCE MANAGEMENT .......................................................................................17 EXECUTIVE TEAM ........................................................................................................................................... 17
CHEF ............................................................................................................................................................... 17
CLERK ............................................................................................................................................................. 17
EMPLOYEE TRAINNING .................................................................................................................................. 18
EMPLOYEE MANAGEMENT ............................................................................................................................ 18
EMPLOYEE BENEFIT ....................................................................................................................................... 18
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FINANCIAL PLAN ..................................................................................................................................19 IMPORTANT ASSUMPTION ............................................................................................................................ 19
KEY FINANCIAL NOTE ..................................................................................................................................... 19
BREAK-EVEN ANNUAL ANALYSIS ................................................................................................................... 20
BREAK-EVEN MONTHLY ANALYSIS (EXCEPT THE FIRST YEAR) ....................................................................... 20
COST OF SALE ................................................................................................................................................ 20
PROJECT PROFIT AND LOSS ........................................................................................................................... 21
PROJECT CASH FLOW ..................................................................................................................................... 22
BALANCE SHEET ............................................................................................................................................. 23
BUSINESS RATIO ............................................................................................................................................ 24
DIVIDEND ....................................................................................................................................................... 24
CONTINGENCY PLAN .........................................................................................................................25 SUPPY CHAIN ISSUE ....................................................................................................................................... 25
DEMAND ISSUE .............................................................................................................................................. 25
OPERATIONAL ISSUE ...................................................................................................................................... 26
ENVIRONMENTAL ISSUE ................................................................................................................................ 26
REFERENCE ...............................................................................................................................................27 APPENDIXES .............................................................................................................................................28
FINANCIAL DETAIL OF FRUITY HOUSE IN 5 YEARS ......................................................................................... 28
GRAPHS OF PRIMARY DATA .......................................................................................................................... 44
MENU OF FRUITY HOUSE.............................................................................................................................. 49
QUESTIONNAIRE ............................................................................................................................................ 51
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EXECUTIVE SUMMARY
Fruity House Limited is a dessert restaurant, mainly serving different kinds of Hong Kong style healthy dessert, which use a variety of fresh fruits as theme, is a combination of western and orient flavours. It’s healthy, fresh and tasty concept strongly in line with the new lifestyle in current society.
Fruity House is a dessert restaurant, mainly serving different kinds of sweet soups as the base in addition to wide range of fresh fruits, nuts and low-calories ice creams as topping, combining together to create the concept of healthy, fresh and tasty which perfectly in line with the new lifestyle in current society.
Sweet soups has been popular for many years, starting from Hong Kong and south of China and soon spread out around Asia. Made of Chinese herbal jelly, Chinese tapioca balls and western smoothies, the sweet soups in Fruity House completely distinct from other desserts in the UK. Furthermore, this kind of desserts not only meets the demand of low-sugar, low-calories and fat-free desserts, but also improves the health level with some nutritional elements in the herbs and fruits.
Therefore, Fruity House successfully fills the gap of the dessert market and will finally achieve the objectives by following the trend of pursuing healthy life.
OBJECTIVES Open a dessert shop in City Centre in 2015.
Maintain 10% growth in sales every year.
Open the second shop in Wales before 2017.
Spread out the brand around the UK after 2018.
Being the top ten dessert brands in the UK.
MISSION Offering the most healthy and fresh dessert to customers, Spreading out the concept of healthy dessert to everyone.
KEY TO SUCCESS
Gap
The proportion of overweight and obesity has increased to 25% in the UK, which is warning British people to eat healthier (Public Health England).
However, in terms of the current dessert market, eating healthier means eating less favourite.
Asian people are not able to taste the home desserts in a foreign country.
Fill the Gap
Fruity House provide customers wide range of tasty ingredients with healthy elements.
Fruity House will be the first company of its kind in Cardiff.
The business will allocate in the place with high flow of target customers.
Fruity House also offer customers a high-end environment to enjoy the dessert.
Fruity House help Asian people ease the homesick with the Asian type of desserts.
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COMPANY SUMMARY
UNIQUE SELLING POINT Different concept of dessert indicating healthy life.
Exceeding healthy ingredients such as Chinese herbal jelly, Chinese tapioca balls and smoothies, with organic and fresh fruits and other health-beneficial toppings like nuts and low-calories ice creams.
Tasty desserts that are low in sugar and calories and fat free.
COMPANY OWNERSHIP Fruity House will be owned by five executives, namely, PURU LI, WENZHE CAI, WENXIAN WANG, XUELING WANG and ZHIHAO YE. In addition, the main chef has 5% of shares in the company.
PURU LI is the finance and accounting manager.
WENZHE CAI is the operation manager.
WENXIAN WANG is the human resource manager.
XUELING WANG is the planning and development manager.
ZHIHAO YE is the marketing manager.
COMPANY LOCATION
Fruity House is located in St Mary Street, which is one of the main streets in Cardiff City Centre. Importantly, this perfect high traffic location is easy to access, due to the connection with each entrance and exit of the historic arcades. In addition, Fruity House is the shop facing to this street, the number of people must be significantly higher than the minimum, 4,000 customers within a four-block radius (or five minutes’ walk time). The pedestrian traffic also must be adequate and the vast majority of customers must be keen on having tasty and healthy dessert. This type of site also Provide customers with both convenience and quiet place to enjoy the dessert is another excellent.
The demographic report of St Mary Street indicated that 89% of people are managerial, administrative or professional positions, mainly at the age of 20-45 years old, with 94% of people living a healthy life (StreetCheck).
Therefore, the vast majority of residents living in St Mary Street are the target customers of Fruity House.
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MARKET ANALYSIS
INDUSTRY ANALYSIS
Market size
Figure 1 Source: Based on IRI/Mintel
Dessert industry is professionally predicted to grow by 2.1% and the market size will become £1.53 billion over the next 5 years.
Food trends
Source: Innova Market Insights
Fruity House meets two trends in the “top five trends for 2015”, which are “From clean to clear label” and “Convenience for foodies”.
In addition, Fruity House significantly follows four trends in the “top 10 trends for 2014”, especially meet the most important trend that health is more holistic.
Top 5 Food Trends for 2015
From clean to clear label
Convenience for foodies
Marketing to millennials
Snacks rise to the occasion
Good fats, good carbs
Top 10 Food Trends for 2014
Waste not want not: cutting food waste
You can trust us still: improving consumer trust
Simpler pleasures: back to basic trends towards simpler food
Look out for the small guy: small-scale innovators rise to the challenge
Health is more holistic: a more holistic approach in providing nutritious food and beverage solutions to consumers
‘New’ superfoods
Rise of the hybrid
The Protein Horizon
New stealth strategies
Alternative alternatives
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PEST ANALYSIS
Political perspective
The stable political environment and Neoliberalism that requires limited government intervention in market ensure more freedom as well as confidence for new entrepreneur.
Stringent food safety regulation requires food suppliers pay more attention to food safety and
standardize food production process. For example, the enforcement of Food Information Regulations
2014 forces food businesses to provide information on the presence of 14 allergens such as milk and
cereals (Department for Environment Food & Rural Affairs).
A sugar tax may be introduced to curb obesity rates supported by many exporters, organizations, including Royal College of Paediatrics and Child Health (BBC NEWS). It increases the cost for producing high-sugar food, especially tradition desserts, which in turn is an opportunity for us as our products do not demand many sugar.
Economic perspective
Country coming out of recession, consumers’ buying power is reviving. In 2014, Big-picture data has been positive, GDP is growing faster than expected. The number of people who describe their financial situation as healthy increase by 4.2% from Feb 09 to Sep 14.
The revival in financial wellbeing has lost momentum. Average wage increases in the year to August 2014 were 0.7%, compared to consumer price inflation of 1.2%. It means wage increase lagged behind the price increase, so the spending power has been slightly eroded. Therefore, people are spending on smaller luxuries such as food or eating out, as opposed to expensive holidays.
Social & cultural perspective
The trend of health awareness allows more people to choose low-sugar desserts. According to the report in 2014, Weight gain and tiredness/fatigue are the top two health concerns, with 38% of people concerned about each. Also, those concerns are more obvious within women and middle ages.
In the globalized world, people are now willing to try new things, not just traditional food. Based on our primary survey, 71% of respondents are willing to try Hong Kong style sweet soup dessert.
More and more Asian population coming to the UK, especially Chinese students, indicates there is a huge potential market. The ethnic minority population, as measured by non-white residents, increased between 1991 and 2011 by 31,800 in Cardiff. The 2011 Census shows 6,182 Chinese in Cardiff, increasing by 105% from 2001.
Faster pace of life and higher pressure of employment mean there is a greater demand for convenience. According to statistics, 39% of out-of-home hot drink purchasers buy hot drinks out of home for a break/coffee break.
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Technological perspective Rapid advancement of ecommerce and online payment require us to build our own website
and sell products online as well to increase sales, which is a big challenge for us in terms of delivery service, web development etc.
New technology in automatic machinery shifts the dessert industry from labour intensity to capital intensity, which makes labour more effective, but also requires us to fund more in machinery update.
SWOT ANALYSIS
Strengths New market niche: offer healthy low-sugar Hong Kong style dessert enable British people to
taste the healthier dessert, indulge without guilty of eating too much sweet food and provide Chinese students the taste of home, the familiar taste for them could be our confidential selling point .
Prices are relatively cheaper compared to traditional Cafés and dessert shops, according to our group survey, products in conventional Cafés and dessert shops, will take one pound more than our products.
Customization and authentic: satisfying the need of customer is our long-term pursuit. Customer can DIY their preferable products, allow the client to choose different bases and sizes, and we must guarantee the quality of our product, no pre-frozen ingredients.
Convenience: standardized ordering process saves the clients’ waiting time and enhances good feeling of the customer experience.
Weakness Lack of reputation and familiarity increase the difficulty of promotion, in terms of our
questionnaires, which can obviously illustrate that native people are inclined to have a try about our Hong Kong style dessert, however, we should clearly have an idea that our product market is totally new, this is the opportunity but meanwhile, it is the challenge.
Lack of experience: we are at a disadvantage in operation process and business negotiation, as investors, this new products are risky to invest, the making process must be authentic and on behalf of Hong Kong original style, so, it is necessary to hire premium chef who has high skill to make sweet desert, this process will spend lots of money to proceed because we must make sure the loyalty of the main chef.
Narrow range of products in comparison to big competitors. Our products are made on the basis of different kinds of fruit, which are seasonal, just to provide healthier sweet food for customers. Unlike our competitors, take BubbleTea as an example, their products are out of limitation of season, and their making process is easier than ours.
Limited revenue until we have an established customer base. To promote our brand and products, it is essential for us to push advertisements and leaflets at the beginning of our business, there is no doubt this promotion will increase our fixed overheads, thus may lead to a negative acceptable contribution.
Opportunities The trend of improving health consciousness, especially within middle ages (38% of people
concern about weight in 2014) Generally speaking, healthy, lower fat and fresh is our topic of this new kind of product, nowadays, more and more people pay attention to their own build and image, it is the perfect chance for them to provide novel kind of sweet dessert.
Increasing willingness to try new things in the UK, according to the data collection from our questionnaire, almost 71% of respondents show positive attitude that they are willing to experience their curious stuff, especially the novel stuff from Hong Kong.
Growing Asian population, especially Chinese students (6,182 Chinese in Cardiff, increasing by 105% from 2001). With the growth of Chinese students even Asian people, authentic Chinese product will generate the feeling of hometown, giving them very comfortable and familiarized environment.
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The economy recovers and strengthens enable clients to afford more premium products (The number of people who describe their financial situation as healthy increase by 4.2% from Feb 2009 to Sept 2014.).
Few similar products and stores in UK market. It is lucky enough to run this new and fresh business, which will attract more people to taste, we can interview people at the live, and get more accurate information feedback regarding our product, the pre-condition is that we must guarantee our product quality is the best.
Threats
Low entry barrier: further competitor may move into market because of the low-skilled requirement, many competitors could imitate the simple and easy making process.
Chef’s turnover risk: if the chef decides to quit, the competence and the flavour of our products would be greatly affected.
Financial risk: if an unforeseen problem arises, the limited funds are insufficient to support the daily operation.
Fruits are seasonal: we must provide fresh fruit to make sure the quality of our products and maintain our brand reputation, but fresh fruits are limited by different seasons.
The leakage of secret making process, even though it is simple, we still have unique method to make original Chinese style dessert.
FIVE FORCES
Threat of New Entrants: Medium Pressure The skill requirements of dessert industry are relatively low, and there is no need for huge initial investment, but the unique flavour is the core of this business, which is in the possession of dessert Chef, and the formula is hard to copy. So the pressure of new competitor is moderate.
Threat of Substitute Products: Medium Pressure There are now no similar dessert shops and products in Cardiff, so we literally occupy a new, uncontested marketplace. However, the traditional British desserts could be our potential substitutes such as Eton Mess, Trifle, High tea, etc. A Certain number of clients prefer traditional products according to our marketing research. Therefore, substitutes pose a medium pressure on us.
The Bargaining Power of Buyers: Low Pressure Customer group has low negotiating leverage in our business because we have a large consumer base (more and more Chinese students and willingness of young British with/without job to try new things) and our products are different as well as unique in Cardiff.
The Bargaining Power of Suppliers: High Pressure As a newly established small dessert shop, our ordering quantity is hard to meet wholesalers’ discount requirement, we have limited choice of choosing suppliers. In addition, we depend heavily on a particular supplier and the switching costs are quite high in changing supplier (because we have to restart negotiation), so our bargaining power in this area is very low.
Rivalry among Existing Competitors: Medium Pressure In the healthy dessert market segment, we have first-mover advantage, and can gain control of large market share that followers may not be able to match, but we still have to arouse and enhance clients’ heath awareness. In addition, in the existing dessert market, there are many contenders, some of which are very large, with great power in this industry. So take all the factors into consideration, the existing rivalry is moderate.
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MARKET SEGMENTATION The primary data (i.e. the questionnaires) indicates that
Purchase Frequency
23% of local teenagers (16~22 years old) never purchase dessert, 9% will purchase more than 3 times a week.
6% of local employed people (22~50 years old) never purchase dessert, 12% will purchase more than 3 times a week.
10% of pensioners (over 50 years old) never purchase dessert, 30% will purchase more than 3 times a week.
5% of males never purchase dessert, 28% purchase dessert more than 3 times a week.
19% of females never purchase dessert, 26% will purchase more than 3 times a week.
Target Market Segment Strategy
According to the result of the question of purchase frequency, Fruity House is targeting the customers who are employed males and females, heath-concerned pensioners.
Furthermore, the products in Fruity House meet the demand of Asian people whose population is considerably increasing currently. Therefore, Asian people, especially Chinese people are another target customers of Fruity House.
In addition, in terms of the way to have desserts, traditional way and other ways based on preferences are similar, with 44% and 56% respectively. In order to target these two kinds of customers, prepared product of dessert can be purchased as well as all the ingredient can be mixed and matched based on preferences.
COMPETITION AND BUYING PATTERNS The sweet soup business is completely new to people in Cardiff. Competitors in this area are few and Fruity House is the pioneer in the healthy sweet soup dessert market and will be successful to grab a noticeable market share. The competitors in a similar market mainly are Fuel Juice Bar, Bubble base, bb’s coffee & muffins and Chain Coffee Shop (e.g. Starbucks, Costa and Nero).In addition, there are potential competitors like supermarkets (e.g. M&S, Tesco, Sainsbury’s).
MAIN COMPETITORS
Bubble base
Website: http://www.bubblebase.co.uk/
Product: Bubble tea, frozen yogurt
Type: take away beverage
Location: Saint David’s shopping mall
Sale number: around 150 cups a day
Saturday peak time 40 cups per hour
Price range: £3-£6
Strengths: The main strength of Bubble base is that the brand has good location in St. David’s shopping mall. In addition, the business provides some healthy desserts like frozen yogurts and some of the products are healthy innovated beverage.
Weaknesses: The obvious weaknesses of Bubble base are the small establishment of the brand and inability of offering seats.
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Fuel Juice Bar
Website: http://fueljuicebars.com/
Product: fruit smoothies, squeezed juice
Type: take away beverage
Location: Saint David’s shopping mall
Sales number: average 150cups weekdays
300cups weekend
Price: around: £3.55 - £4.00
Strengths: The main strength of Fuel Juice Bar is that the brand has good location in St. David’s shopping mall with impressive reputation, focusing on healthy fruit smoothies and fresh juices.
Weaknesses: The primary weaknesses of the business are limited products range with no seats provided.
bb’s coffee & muffins
Website: http://bbscoffeeandmuffins.com
Product: coffee, muffins
Type: stay in & take away
Location: all around the UK, Saint David’s shopping mall in Cardiff.
Strengths: The noticeable strengths of bb’s coffee & muffins are the attractive location with many franchises, good reputation of fresh and unique muffin, with ride range of traditional British food.
Weaknesses: However, the weaknesses are extremely obvious, which are high-sugar and unhealthy products and the higher cost facing this brand due to the potential threat of sugar tax.
Chain Coffee shop (Starbucks, Costa, Nero)
Product: beverage, bakery, dessert
Type: take away, in store
Location: all round Cardiff
Price range: £3~5
Strengths: The similar strengths of each chain coffee shop are diverse products with reputation and strategic distribution.
Weaknesses: There are also some weaknesses existing which are the inconvenience due to long queuing line in peak times and the rapid growth of putting consumer satisfaction on the backburner.
Supermarket (M&S, Tesco, Sainsbury’s, etc.)
Product: ready-to-eat fruit salad pack, dessert cup.
Type: supermarkets
Location: all round Cardiff
Price range: £1.5-£3.
Strengths: The main competitive perspectives of supermarkets are the wide range of ready-to-eat dessert and fruit packs with relatively low price.
Weaknesses: However the weaknesses are high overheads of the supermarkets, position as a supermarket instead of a dessert shop and the non-exquisite products.
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STRATEGY AND IMPLEMENTATION
BUSINESS STRATEGY Based on the internal and external analysis, we choose differentiation as our generic strategy so as to maintain competitive advantage. Basically, keep extending and reinventing our healthy dessert product line, and building unique brand image, which will appeal to Chinese students, British teenagers and the middle ages. Via serving different kinds of Hong Kong style healthy dessert, its healthy, fresh and tasty concept strongly in line with the new lifestyle in current society. Therefore, we can differentiate ourselves from traditional UK competitors as well as potential new entrants. In the light of future development of “Fruity House”, our initial plan as follows:
YEAR 1
Renting the store, proceeding interior design.
Purchasing and installing the corresponding equipment.
Promoting our products online and distributing leaflets at store.
Running regularly.
Training new employees.
Researching new products to adapt different kinds of people`s taste.
Collecting customers` feedback to make progress and improve our skill of making sweet dessert.
YEAR 2
Training staff and provide additional commission for workers who have good performance.
Keep Applying new style and kind of products.
Maintaining the old customers and push ads to attract new customer.
YEAR 3 During our third year we are forecasting to have been making profit and positive cash flow, so we believe this will be the correct time to grow the business. We intend to open another store in Cardiff city centre with larger retail space and more frequent exposure, which provide us with the opportunity to gain much more market share in Cardiff dessert market.
YEAR 4 We will also be looking to open new premises and have a potential location in Bristol city centre. Bristol is England’s 6th and the UK’s 8th most popular city, famous for splendid culture, history and artworks (Banksy’s painting, No Evil, etc.), which attracts tons of tourists especially young people crowding to Bristol. We believe open a new outlet there will help build our reputation very fast that is good for branding, and begin to improve us with economies of scale with our supplier’s through bulk purchasing, reducing our costs and increasing our profit margin.
YEAR 5 After 5 years running, we project that we will have enough cumulative assets and budgets to open chain store all around UK. London, Edinburg, Cambridge, etc. these all could be our target cities, but we will shift some old employees to new store to make sure the quality, diary operation. Meanwhile, establishing strong R&D team to revitalize/ invent new products to keep us in top and preserve core competence.
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BRANDING AND POSITIONING STRATEGY
Brand Name Fruity House is the name of the brand. According the brand name, customers can easily perceive it as a
healthy brand with product containing variety of fruits.
Brand LOGO In terms of the brand logo, which mainly consist of green, orange and a mango shape with two phases,
“Fruity House” and “Healthy Dessert”. This logo reinforces the intended brand positioning, which is healthy
dessert targeting to Asian people and local employed people, and is consistent with the intended brand
associations, dessert with huge range of fruits.
Brand Attribute The dessert in Fruity House mainly attributes to Hong Kong healthy dessert, containing fruit and Chinese
herb sweet soups. In addition, the brand also considers the satisfaction of western customers to add some
western healthy elements into the menu, like smoothies. Due to Hong Kong is a well-known city in the world
and result indicates that 33% of people have heard about Hong Kong healthy dessert. Although 67% of
people do not know Hong Kong healthy dessert, 94% of the participants are willing to try this type of
desserts.
Positioning Strategy Medium-to-premium healthy dessert with low-sugar, low-calories and organic ingredients, focus on
customization and convenience.
PRODUCTS
Product Description The main dessert in Fruity House containing Chinese traditional herb sweet soups as well as a wide range of
fresh fruits is originally from Hong Kong, adding the western smoothies to meet the taste of the local people.
This type of fruity dessert, which is tasty but low sugar and low calories, is different from the British dessert.
It follows the trend of healthy life and meets the increasing demand of homemade style dessert.
Two ways to satisfy different customers One of them is offering customers five excellent desserts recommended by the main chef,
which is called “Amazing Five”. This way is mainly suitable for new customers and a type of customers looking for convenience. The first “Amazing Five” will mainly focus on mango elements.
The other offer is more customizational, which provides customers with all elements in order to mix and match depending on different preferences, and is called “Fruity Mix”.
Natural ingredient and sustainable packaging completely keeps up with the trend of economically friendly
living style.
Future Products Amazing Five
The members in “Amazing Five” will change to different kinds of fruits. The changes will depends on the
relevant sales, therefore, the members in “Amazing Five” will be changed to meet the demand and
preference.
Fruity Mix
In order to maintain the product life, some appealing and healthy toppings like seasonal fruits and new
flavours of low-calories ice cream will be added to the menu as well as some limited offer will be available
during the period of big events.
The detail of the product can be seen in the appendix.
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PROMOTION STRATEGY
Social media (digital marketing) 1. Cardiff University Chinese Student BBS 2. Facebook 3. Twitter 4. Instagram 5. Wechat 6. Redscaft (A website mainly offers the Chinese people information about shopping and eating
in Britain) 7. Post some budget set of dessert on Groupon
Advertising 1. Leaflet (create awareness, educate the market) 2. Other advertising
Spread out the appealing package to 50% of the rubbish bins in city central.
Hire five people, including students, Asian people, and local people, to carry the most eye-attracting product from Fruity House and separately walk around the city central.
Hire five people to cosplay five main fruits in Fruity House and walk around the city central as a model team.
A one-day function in Julian Hodge to display the dessert and provide some free sample and discount coupon. (£100~200)
Direct mail 1. Mail the leaflet including healthy information about different kinds of fruits and the benefit
of Chinese herb sweet soups.
Sales promotion 1. Provide customers with the discount coupon during the function in Julian Hodge, in the direct
mails and leaflets to engage customers buy desserts in Fruity House. 2. In order to penetrate into the market, the discount will retain until the objective market share
is grabbed.
Creative appeals 1. Product orientated appeals
While doing the advertising and sales promotion, Hong Kong dessert in Fruity House will compare to the local British dessert and emphasize the healthy ingredients in the dessert.
2. Customer orientated appeals
In addition, during the advertising and promotion, customers will be informed that they are not only enjoying a high-end dessert in a convenient way, but also building up their healthy life with the healthy elements in the desserts.
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PRICING STATEGY
PRICE OF PRODUCT Base of the dessert Medium: £3.70 Large: £4.20 Extra Large: £5.00
Topping of the dessert £0.70 for each
Amazing Five £5.75 for each Table 1
PRICE ANALYSIS
Figure 2 Figure 3 Figure 4
According to the questionnaires conducted in the ideal location of Fruity House, the customers in that area main purchase dessert for £3 to £5 (approximately 70%-80%). Because of the premium perception strategy, the price for each combination of product will be average £5.75, which is slightly higher than the mainstream. However, the cheapest price of the base is £3.70 and each of the topping only costs £0.70, hence, customers can mix and match their own dessert for the preferable price.
Penetration pricing This kind of dessert in Hong Kong and South of China are considered as premium dessert, however in order to penetrate into the British dessert market and grab at least 3% of the market share in Cardiff In the first year, the price will be discounted to be more affordable for the target customers who are mainly students and young employed people.
Premium pricing As long as the market share grabbed, this brand will become a type of premium dessert and the price will grow up slightly.
Charm pricing The price is significantly flexible for every customer, due to every customer can choose different size of the base and decide the number of toppings.
Psychological pricing Price of the dessert mostly are decided to be magical number, for example, the five stars dessert will cost £5.75 instead of £6.00 to attract people who are price-sensitive.
Medium to premium pricing strategies Including relatively affordable price with high communication expenditure can encourages perceptions of quality as well as new healthy concept.
18%
70%
12%0%
Price for dessert (Young employed people)
Less than £3
£3 to £5
£5.01 to £7
Over £7
9%
73%
18%0%
Price for dessert (Teenagers)
Less than £3
£3 to £5
£5.01 to £7
Over £7
20%
80%
0%0%
Price for dessert (Pensioners)
Less than £3
£3 to £5
£5.01 to £7
Over £7
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SALES FORECAST
Figure 5 Figure 6
Year 1 Because Fruity House is the first sweet soup dessert shop in Cardiff, the sales volume would be low. In
addition, in order to penetrate into the market, Fruity House employs price penetration strategy, which is
provide customers with discounted price. Therefore, revenue will not be very high at the beginning.
Year 2 Base on the strong and effective marketing strategy, the volume and revenue both will increase significantly,
especially, the price will slightly grow by reducing the discount. It is a considerable growth in the second
year.
Year 3-5 Regular change of product, creative promotion and successful development of brand proposition contribute
to the enhancement of sales which meet the objective of 10% growth in every year.
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OPERATION MANAGEMENT
CAPABILITY PLANNING
Figure 7
Employees per dessert shop: 3 people. (1 full time chef + 2 part-time waiter and clerk)
The five initial founders, can work without salary in first 2 years, replaced by equity to make the maximum is reached wherever possible.
Open time: 12:00---19:00, Monday to Sunday.
Maximum capacity per shop: 25 people. (18 seats in-store and 7 seats outdoors).
Layout of the first shop.
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SERVICE PROCESS
Customer Clerk Chef
Come into the shop
Take a seat or take it away
Come to front desk
Look the
menue
Chat wtith
customer
Choose
the base
and size
Wait for customer
Choose
the tops
and size
Write down and chek the order with
custoemr
Pay the
biil
Receive and chek the payment
Pass order to Chef
wait
Review the order and start
cooking
package
Hand it to Clerk
Bring the dessert to
customer
Receive
the dessert
Figure 8
SUPPLY CHAIN Fruit: we purchase fresh fruit from local wholesaler generally every 3 days, and stock them into
fridge and freezer to keep fresh.
Sweet soup’s ingredients: normally purchase from Chinese supermarkets/retailers in UK monthly.
Other ingredients (nuts, ice cream etc.): purchase weekly at Lidl.
Package: we buy disposal cups and spoons from manufactures in China, approximately half a year with 13000 pieces each time, assuming the lead time is a month.
Supplier information.
BUSINESS PLAN
16 | P a g e
Facility Suppliers
http://www.alliancenational.co.uk/
http://comcatengineering.co.uk/
Ingredient Suppliers
https://www.smartfoodservice.com/
Countisbury-Fruitsupply http://www.countisbury-fruitsupply.co.uk/
http://www.chefschoicecatering.co.uk/home
http://www.lidl.co.uk/en/
BUSINESS PLAN
17 | P a g e
HUMAN RESOURCE MANAGEMENT
EXECUTIVE TEAM Fruity House has five main shareholders. ZHIHAO YE will be the CEO of Fruity House as well as marketing manager who takes control of the whole running process of the business. PURU LI will serve as the financial manager. WENZHE CAI will take charge of the operation part. WENXIAN WANG will serve as human resource manager while XUELING WANG will take the responsibility of planning and development.
The five main shareholders will work without salary at all in the first two years because of the low profits at the beginning stage of business and then they will receive equity instead to make the maximum is reached whatever possible.
CHEF Our human resource management Plan begins at hiring a full time experienced and professional
Hong Kong dessert cook, initially served as the only dessert chef of Fruity House.
Our skill requirement is that the chef should be a graduate of professional cooking institute with
working experience in Hong Kong style restaurants in UK.
We expect to have the chef to work 8 hours per day for 6 days per week with £7 per hour wage
which is above minimum wage.
Chef has responsibility of cooking dessert as well as developing new products and training clerk.
In addition, in order to attract and maintain the chef, Fruity House plan to offer 5% share to the chef,
because chef’s skill can either uphold or destroy the asset, it is critical to maintain his support.
Furthermore, chef can be more self-motivated and take more initiative.
Chef owns a share of the business whilst ever he works for it, however if he leaves he will not take
any shareholding with him.
CLERK College and university students will be hired to work at Fruity House, mainly to do the counter and
the serving jobs. Main skills waiters required are sales, customer service as well as help chef prepare
dessert. Clerks will need to take charge of front counter, stock control.
Our employees will have good communicating ability with special talent for learning menu items and
describing them appropriately.
Our employees will share hours during the week because we expect to have a paid part employee
work an average of 4 hours per day for 7 days per week. We will pay wages at £6.5 per hour to
remain employees.
BUSINESS PLAN
18 | P a g e
EMPLOYEE TRAINNING
Our training strategy is developing a program of orientation and training which all Fruity House
employees must pass before starting work. All Fruity House employees will be trained to understand
our service process as well as purchasing supply chain. Customer service, quality control, and
cleanliness training will be conducted too. Waiters will be trained by chef to cook dessert as well. We
know exactly what is expected from employees in Fruity House.
The most distinguish part about our training plan is Fruity House not only plan to focus on ability
and skill training but also devote to convey our healthy life style conception to our employees and
enhance their healthy awareness and their working loyalty and enthusiasm.
EMPLOYEE MANAGEMENT Fruity House has a comprehensive vertical system to develop the employees. Due to the training strategy, all clerks will be familiar with the operation of Fruity House. The clerks will be promoted base on their performance and ability.
The process in the system will be clerks, team leaders, management trainees, manager assistants and managers.
Therefore, Fruity House will provide clerks an excellent opportunity of promotion and it is a perfect starting career for graduates.
Furthermore, instead of hiring a professional store manager for other shops in the future, Fruity House prefer to allocate the new and motive managers trained by the company.
Basically, the main idea of HRM of Fruity House approach will be to have a family atmosphere within the company. It means trust, stability, respectful relationship, empowering personnel with a possibility to exchange ideas on company’s development. We are going to enhance employees’ team spirit by team building activities including volleyball matches, tea parties etc.
EMPLOYEE BENEFIT All the employees will be invited to participate in an outing every year, and the best employees will award bonus.
Fruity House manage to provide employees with measures of job security, a good work life balance, health care.
Last but not least, Fruity House can ensure is that every employee will get national insurance to guarantee employees’ benefits.
BUSINESS PLAN
19 | P a g e
FINANCIAL PLAN
Fruity house expect to raise £50,000 of its own capital, due to the positive prediction of sale, we expect that the sale will grow steadily. Additionally, since we have sufficient generated cash flow, we do not have plan to raise money from bank loan currently, and we expected that the second shop of Fruit House will be opened in the near future (might be in the third year), since prediction of relatively high net cash flow. (This financial plan depends on the assumption of opening only one shop.)
IMPORTANT ASSUMPTION Monthly sales are the largest indicator for this business. There are some seasonal variations
with the month of June to September being the highest sale month.
There is no serious recession in the following five year.
The growth of inflation rate in UK is steadily in the following five-years
The positive growth for healthy food will continue.
KEY FINANCIAL NOTE At the end of our first year our estimated net worth will be £25,273 with a projected net loss of
£24,727.Our net cash flow will start in April 2015 from £50000 reduced to £17908 by Mar 2016. The net profit margin for the first year is -24.41% due to a certain amount of initiate set up cost.
At the end of our second year our estimated net worth will be £32,453 with a projected
accumulated net loss of £7,179. Our net cash flow will start in April 2016 from £17,908 and will
reach £26,412 by Mar 2017.The net profit margin for the second year will become positive to 5.22%
At the end of our third year our estimated net worth will be £52,226 with a projected
accumulated net profit of £19,773. Our net cash flow will start in April 2016 from £26,412 and
will reach £47,231 by Mar 2018.the net profit margin for the third year will continue to increase to 12.65%.
As for the fourth year and the fifth year prediction, we expect that the sale will to be steady and
to be saturated for one shop. The net worth will keep rise and achieve to £10200 at the end of
fifth year, with a projected accumulated net profit of £52000. Our net cash flow will reach to
£97750.73. And the increase of net profit margin will steadily increase to 15.72% ultimately.
The gross profit margin will be approximately 70.82% that the payback period will be approximately 2.89 years, which is slightly earlier than the benchmark in UK (3yrs).
Figure 9 Figure 10
£101,282.50
£137,445.00
£156,365.00
£168,080.00£178,117.50
£17,908.10£26,412.46
£47,230.81
£64,568.78
£83,930.88
-£24,726.51
£7,179.36£19,773.00 £21,962.27
£28,003.42
-£50,000.00
£0.00
£50,000.00
£100,000.00
£150,000.00
£200,000.00
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
sales net cash flow net profit
year1 year2 year3 year4 year5
-30000
-10000
10000
30000
50000
70000
90000
110000
130000
50000
70000
90000
110000
130000
150000
170000
Po
un
ds
(3)
Po
un
ds
(£)
Graph of Sales, Gross Profit and Net Profit: Year 1-5
Total Sales Gross Profit Net profit:
BUSINESS PLAN
20 | P a g e
BREAK-EVEN ANNUAL ANALYSIS Fruity House’s Break-even Analysis is based on the average of each year figures for total sales by units, and by operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed cost. These conservative assumptions make for a more accurate estimate of real risk. As the certain amount of staring up cost, there is no break-even in the first year. The average break-even sale will be around from £130,000 to £132,000 each year.
BREAK-EVEN
year1 year2 year3 year4 year5
REVENUE £101,282.50 £137,445.00 £156,365.00 £168,080.00 £178,117.50
BREAK-EVEN REVENUE
£139,602.93 £130,489.94 £131,101.71 £132,027.45 £132,027.45
BREAK-EVEN UNIT 25382.35 23725.44421 23836.67395 24004.99 24004.99
Table 2
BREAK-EVEN MONTHLY ANALYSIS (EXCEPT THE FIRST YEAR) Monthly Unit Break-even 960 units Monthly Revenue Break-even £5280 Assumptions: Average per-Unit Revenue £ 5.5 Average Per-Unit Variable Cost £ 1.7 Estimated Monthly Fixed Cost (except first year) £ 3650
COST OF SALE We estimate cost of sale depend on the national wholesale price report from UK government and price offer by supplier.
Since there is a wide range of raw materials (main: fruits) which price flow frequently according to seasonal
change, as well as our products are not totally fixed as we also provide individual choice for customer,it is impossible that calculator the exact cost of sale for each product we sale. By aiming to this, we adopt a conservative method, using the standard one, which base on the most common used and its maximum.
Besides, we also consider the problem of wasting, since the main raw materials are fruits, which required being fresh enough. Therefore, we also add 7% of wasting rate into cost of sale
The calculation of cost of sale is as follow:
Type £ per product Fresh fruits: 1.00 Base sweet soup: 0.30 Package: 0.25 Waste (7%) 0.11
Total cost of sales: 1.70
BUSINESS PLAN
21 | P a g e
PROJECT PROFIT AND LOSS As the profit and loss table shows, Fruit House expect to continue its steady growth in profitability over the next five years of operations. Our growth rate based on industry average, factoring in local condition.
We expect a satisfactory gross profit margin; this is due to relatively low direct cost of sales.
Meanwhile, even though the main operation cost such as staff salaries, marketing cost, rent for the premium and council tax depress profit, ultimately, this will contribute to higher earnings and profits.
Table 3
Pro
Fo
rma
Pro
fit
an
d L
os
sye
ar1
ye
ar2
ye
ar3
ye
ar4
ye
ar5
note
Total Sales
101283
137445
156365
168080
178,118
Cost of Sale
29556
40109
45630
49049
51,978
1fruit,packing(including approximately 7 %
waste)
Gross Profit
71726
97336
110735
119031
126140
Gross Margin %
70.82%
70.82%
70.82%
70.82%
70.82%
Exp
en
ses:
wages and Salaries
full time
18,760
20,496
20,440
20,440
20,440
2full time £7 per hour,8hr per day
part time
17,420
20,592
21,346
21,372
21,372
3part time £6.5 per hour,around 8 hr per day
Total wage
36,180
41,088
41,786
41,812
41,812
Oth
er
Ov
erh
ea
ds
Marketing
3,840
3,390
3,390
4,000
4,000
4flyer,social network, discount,one day function
in school,groupon,personnel promotion
Rent
20,004
20,004
20,004
20,004
20,004
5premises
Utilities
6,600
7,200
7,200
7,200
7,200
6electricity,
water,
waste
insurance
1,032
1,032
1,032
1,032
1,032
7employer's liability insurance
national insurance
5,011
5,691
5,787
5,791
5,791
8national insurance rate 13.8%
Stationery
330
360
360
360
360
9printing consumables
council tax
10,000
10,000
10,000
10,000
10,000
10
pay to local government
opening consult
2,000
11
dessert consult
Uniform
180
12
smart shirt ,apron * 6
Refurbishment
10,000
13
including
Depreciation:
sundries(knife,mask, chopping
block,glove...)
44
48
48
48
48
1of1 yrs
straight line over 1 years,with no scrap value
stainless steel sink
55
60
48
48
48
1of5 yrs
straight line over 7 years,with 60 scrap value
commercial tap
33
36
36
36
36
1of5 yrs
straight line over 5 years,with 20 scrap value
salad prep counter
528
576
408
408
408
1of5 yrs
straight line over 7 years,with 700 scrap value
commercial use blender
88
96
72
72
72
1of5 yrs
straight line over 7 years,with 100 scrap value
multifunctional cooker
33
36
24
24
24
1of5 yrs
straight line over 7 years,with 20 scrap value
ice machine
55
60
36
36
36
1of5 yrs
straight line over 7 years,with40 scrap value
furniture
374
408
300
300
300
1of5 yrs
straight line over 7 years,with 40 scrap value
casher machine
11
12
12
12
12
1of5 yrs
straight line over 7 years,with 10 scrap value
refrigerator
55
60
36
36
36
1of5 yrs
straight line over 7 years,with 40 scrap value
Total overheads
60,273
49,069
48,793
49,407
49,407
Total Expenses
96,453
90,157
90,579
91,219
91,219
Profit before Interest and Taxes:
-24,727
7,179
20,155
27,812
34,921
Taxation
00
382
5,850
6,917
Net profit:
-24,727
7,179
19,773
21,962
28,003
Net profit margin
-24.41%
5.22%
12.65%
13.07%
15.72%
accumulate net profit
-24,727
-17,547
2,226
24,188
52,192
pay back period
2.89
BUSINESS PLAN
22 | P a g e
PROJECT CASH FLOW The cash flow projection shows that provision for ongoing experience are adequate to meet Fruity House’s need, as the relatively low inventory required and the business generate cash flow sufficient to support operations.
Table 4
Pro Forma Cash Flow
year1
year2
year3
year4
year5
Note
capital introduced
50000
17908
26412
47231
64569
1start up capital
Product Sales
101283
137445
156365
168080
178118
2sale
Total
151283
155353
182777
215311
242686
Cash outflows
Purchases
30401
40128
45557
49645
51591
3fruit,
packing(
including approximately 7 % waste)
Rent
20004
20004
20004
20004
20004
4premises
Utilities
6600
7200
7200
7200
7200
6electricity,
water,
waste
License
00
00
07
regeister in local government
Stationery
330
360
360
360
360
8printing consumables
sale & Marketing
3840
3390
3390
4000
4000
9flyer,
free taste,
Insurance
1032
1032
1032
1032
1032
10liability insurance
national insurance
5011
5691
5787
5791
5791
11national insurance rate 13.8%
Wages(
full time)
18760
20496
20440
20440
20440
12full time £7 per hour
Wages(
part time)
17420
20592
21346
21372
21372
13part time £6.5 per hour
council tax
10000
10000
10000
10000
10000
14
Uniform
180
--
--
15smart shirt apron * 6
Refurbishment
10000
--
--
16including table chair
sundries(knife,mask
, chopping
44
48
48
4848
17for daily operating use
stainless steel sink
360
--
--
18facility
commercial tap
170
--
--
19facility
salad prep counter
3589
--
--
20displays for preparing tops(
fruit,
nuts)
with
refrigerator
commercial use blender
600
--
--
21*2 use for making base sweet soup
multifunctional cooker
200
--
--
22*2 use for making base sweet soup
ice machine
320
--
--
23*1 use for making base sweet soup
furniture
2100
--
--
24*4 set facility
casher machine
80-
--
-25
*1 use for operation
refrigerator
334
--
--
26*1 for inventory use
Total
133374
128941
135547
139892
141838
dividend pay
5,000
10000
Total outflow
133,374
128,941
135,547
134,892
131,838
Total inflow
151282.50
155353.10
182777.46
215310.81
242686.28
Total outflow
133374.41
128940.64
135546.65
134892.06
131838.21
Net inflow/outflow
17908.10
26412.46
47230.81
64568.78
83930.88
BUSINESS PLAN
23 | P a g e
BALANCE SHEET The following is a projected balance sheet for Fruity House. We expect solid growth in the net worth year by year.
Table 5
Pro Forma Balance Sheet AT 31.03.16 AT 31.03.17 AT 31.03.18 AT 31.03.19 AT 31.03.20Fixed assetsEquipment 7796.50 6568.50 5224.50 4252.50 3280.50
less depreciation 1276.00 1392.00 1020.00 1020.00 1020.00
total non-current asset 6520.50 5176.50 4204.50 3232.50 2260.50
Current Assets
cash in bank 17908.10 26412.46 47230.81 64568.78 83930.88
Inventory 844.90 863.90 790.55 1386.85 1000.18
Total current Assets 18753.00 27276.36 48021.36 65955.63 84931.05
Total Assets 25273.50 32452.86 52225.86 69188.13 87191.55
Current liabilities
Trade Payables 0.00 0.00 0.00 0.00 0.00
Rates and Utilities 0.00 0.00 0.00 0.00 0.00
Corporation Tax 0.00 0.00 0.00 0.00 0.00
Loan Interest 0.00 0.00 0.00 0.00 0.00
total Liabilities 0.00 0.00 0.00 0.00 0.00
Share Capital 50000.00 50000.00 50000.00 50000.00 50000.00
retained profit 0.00 -24726.51 -17547.14 2225.86 19188.13
Current Year Profits -24726.51 7179.36 19773.00 21962.27 28003.42
dividend pay -5000.00 -10000.00
Total Equity 25273.50 32452.86 52225.86 69188.13 87191.55
Total Equity & Liabilities 25273.50 32452.86 52225.86 69188.13 87191.55
BUSINESS PLAN
24 | P a g e
BUSINESS RATIO Even though the operating gearing are relatively high due to the high fixed cost incurred, we expect that our net profit margin, gross margin, and return on assets will increase steadily over the five-year period. Return on capital employ will decrease since the third year, this is because the lower equity needs and higher cash inflow. Net working capital generated by the business will increase steadily each year; assume that we still do not plan to raise money from bank loan.
By comparing to the benchmark, there are some significant data, due to the unique nature of the business. But overall, the ratio of fruity house are showed satisfactorily.
The following table represents key ratios that compare to the industry benchmark.
Table 6
DIVIDEND
Figure 11
Each of five shareholders will give 1% of share to the chef respectively; this is means that there will be 6 shareholders for fruit house, and the chef will got 5% of share, the rest of shareholder will hold 24% share respectively.
We plan to pay the dividend at end of four year, the dividend will be around 20% of retained profit, since we will have sufficient cash flow to generate the business, and it is enough for the planning of opening the second shop.
RATIO ANALYSIS
year1 year2 year3 year4 year5 INDUSTRY PROFILE
GROSS PROFIT MARGIN 70.82% 70.82% 70.82% 70.82% 70.82% 60.50%
net profit margin -24.41% 5.22% 12.65% 13.07% 15.72% 0.70%
OVERHEAD EXPENSES 76.54% 69.21% 66.50% 65.03% 63.70% 39.80%
MARKETING EXPENSES 3.98% 3.76% 3.74% 4.39% 4.39% 3.20%
ROCE -49.45% 40.09% 74.86% 46.50% 43.37% N/A
sale growth 0.00% 35.70% 13.77% 7.49% 5.97% 7.60%
opearting gearing 76.54% 69.21% 66.50% 65.03% 63.70% N/A
NET WORKING CAPITAL 25,273 32,453 52,226 69,188 87,192 0.076
QUICK RATIO 0.00% 0.00% 0.00% 0.00% 0.00% 0.65
CURRENT RATIO 0.00% 0.00% 0.00% 0.00% 0.00% 0.98
DIVIDENT PAY OUT 0.00% 0.00% 0.00% 20.67% 19.16% N/A
pay back period(yr) 3
ASSET & LIABILITIES
year1 year2 year3 year4 year5 INDUSTRY PROFILE
CURRENT ASSET 74.20% 84.05% 91.95% 95.33% 97.41% 43.70%
LONG TERM ASSERT 25.80% 15.95% 8.05% 4.67% 2.59% 56.30%
CURRENT LIABILITIES 0.00% 0.00% 0.00% 0.00% 0.00% 32.70%
LONG-TERM LIABILITIES 0.00% 0.00% 0.00% 0.00% 0.00% 28.50%
2.89
£0 £0 £0
£5,000
£10,000
£0
£5,000
£10,000
£15,000
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
DIVIDENT PAY OUT
DIVIDENT PAY OUT
BUSINESS PLAN
25 | P a g e
CONTINGENCY PLAN
SUPPY CHAIN ISSUE 1. Suppliers’ overwhelming bargain power:
Pro-active: maintain good relationship with existing supplier, and build brand reputation as soon as possible to strengthen power.
Reactive: seek alternative suppliers.
2. Supplier delays: supplier fails to deliver on time (e.g. Chinese suppliers), increasing our stock-out risk.
Pro-active: regular order and deliver scheme, build systematic inventory management system to maintain enough buffer.
Reactive: purchase from local dealer.
3. Damaged goods in transit:
Pro-active: sign disclaimer previously
Reactive: return broken items and claim for replacement.
4. Supplier Bankruptcy: supplier unable to supply, facing financial issues.
Pro-active: take care of suppliers’ financial stability, multi-sourcing.
DEMAND ISSUE 1. Demand fluctuation: sudden peaks or overestimation in consumer demand.
Pro-active: make appropriate marketing strategy, regular scanning of market environment, and keep reinventing products.
Reactive: stock more goods; persuade employee to work overtime; or intensify marketing.
2. Substitution: competitors’ alternative offerings.
Pro-active: highlight our products’ health benefits and unique flavour to differentiate us from other offerings; occupy this niche market quickly, build brand reputation and loyalty, achieve scale economies.
Reactive: lower price.
3. Customer complaints: resulting from service problem, goods’ quality etc.
Pro-active: regular staff training.
Reactive: offer refunds/ alternative desserts and record complains.
4. Changing habits: different preference for taking away or eating in-store.
Reactive: record and observe consumers’ preference to decide which area of service should be improved (e.g. in-store decoration, packaging).
BUSINESS PLAN
26 | P a g e
OPERATIONAL ISSUE 1. Employee turnover: particularly chef turnover.
Pre-active: sign confidential agreement to make sure chef wouldn’t leak formula to competitors if he/she leaves; allocate a part of equity to retain chef; ask chef teaches and trains another employee.
2. Machine failures: water, electricity, fridge failures.
Pro-active: ensure regular fridge and machinery maintenance and cleaning.
Reactive: call technicians immediately.
ENVIRONMENTAL ISSUE 1. Legislation: rigorous food safety restrictions.
Pro-active: keep good relationship with local authorities, and keep up with updated laws.
Reactive: improve control of food safety control. 2. Price increases: unpredicted increase in overhead costs.
Pro-active: monitor industry papers etc. to spot potential cost increases early and adjust prices accordingly.
Reactive: try any possible measures to save cost. 3. Inflation
Reactive: increase price moderately.
BUSINESS PLAN
27 | P a g e
REFERENCE
BBC NEWS. 2014. Sugar Tax May Be Necessary, England’s Chief Medical Officer Says [Online]. Available at:
http://www.bbc.co.uk/news/health-26442420 [Accessed: 09 Feb. 2015].
Department for Environment Food & Rural Affairs. 2012. The Food Information Regulations 2013 Guide to compliance. Public Health England. Trends in Obesity Prevalence [Online]. Available at:
http://www.noo.org.uk/NOO_about_obesity/trends [Accessed: 07 Feb. 2015].
StreetCheck. Area Information for St Mary Street, Cardiff, Wales, CF10 1PL [Online]. Available at:
https://www.streetcheck.co.uk/postcode/cf101pl [Accessed: 07 Feb. 2015].
BUSINESS PLAN
28 | P a g e
APPENDIXES
FINANCIAL DETAIL OF FRUITY HOUSE IN 5 YEARS
Sales
YEA
R 1
Ap
rM
ayJu
nJu
lA
ug
Sep
Oct
No
vD
ecJa
nFe
bM
arTO
TAL
IN Y
EAR
PR
EDIC
T SA
LE/D
AY
5030
3550
6565
6560
6560
6060
5
DA
YS/m
on
th30
3130
3131
3031
3031
3128
3136
5
TOTA
L P
RED
ICT
SA
LE15
5090
010
8515
5019
5020
1519
5018
6020
1516
8018
6018
415
SALE
/HR
7.14
4.29
5.00
7.14
9.29
9.29
9.29
8.57
9.29
8.57
8.57
YEA
R 2
Ap
rM
ayJu
nJu
lA
ug
Sep
Oct
No
vD
ecJa
nFe
bM
arTO
TAL
IN Y
EAR
PR
EDIC
T SA
LE/D
AY
6055
8570
7090
7065
6565
6560
820
DA
YS/m
on
th30
3130
3131
3031
3031
3129
3136
6
TOTA
L P
RED
ICT
SA
LE18
0021
7024
0021
7021
7027
0024
8021
0021
7018
6017
4018
6025
620
SALE
/HR
8.57
10.0
011
.43
10.0
010
.00
12.8
611
.43
10.0
010
.00
8.57
8.57
8.57
YEA
R 3
Ap
rM
ayJu
nJu
lA
ug
Sep
Oct
No
vD
ecJa
nFe
bM
arTO
TAL
IN Y
EAR
PR
EDIC
T SA
LE/D
AY
7570
8580
8095
8575
7075
7570
935
DA
YS/m
on
th30
3130
3131
3031
3031
3128
3136
5
TOTA
L P
RED
ICT
SA
LE22
5021
7025
5024
8024
8028
5026
3522
5021
7023
2521
0021
7028
430
SALE
/HR
10.7
110
.00
12.1
411
.43
11.4
313
.57
12.1
410
.71
10.0
010
.71
10.7
110
.00
YEA
R 4
Ap
r to
Ju
nJu
l-Se
pO
ct-D
ecJa
n-M
arTO
TAL
SALE
PR
EDIC
T SA
LE/D
AY
8075
9090
DA
YS/q
uar
ter
9192
9290
365
TOTA
L P
RED
ICT
SA
LE72
8069
0082
8081
0030
560
SALE
/HR
11.4
310
.71
12.8
612
.86
YEA
R 5
Ap
r to
Ju
nJu
l-Se
pO
ct-D
ecJa
n-M
arTO
TAL
SALE
PR
EDIC
T SA
LE/D
AY
8580
9595
DA
YS/q
uar
ter
9192
9290
365
TOTA
L P
RED
ICT
SA
LE77
3573
6087
4085
5032
385
SALE
/HR
12.1
411
.43
13.5
713
.57
BUSINESS PLAN
29 | P a g e
Cash flow
cash flow forecast for the year ending 31st May 2016
cash inflows Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Note
capital introduced 50000 50000 1 start up capital
Product Sales 8525 4950 5967.5 8525 10725 11082.5 10725 10230 11082.5 9240 10230 101283 2 average 5.5 pround/unit
Total 50000 8525 4950 5967.5 8525 10725 11082.5 10725 10230 11082.5 9240 10230 151283
Cash outflows Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
Purchases 650 2,651 1,303 1,711 2,659 3,104 3,133 3,682 2,868 3,157 2,588 2,892 30401 3 fruit,package(including approximately 7 % waste)
Rent 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20004 4 premises
Utilities - 600 600 600 600 600 600 600 600 600 600 600 6600 6 electricity,water,waste
License 0 0 0 0 0 0 0 0 0 0 0 0 0 7 regeister in local government
Stationery - 30 30 30 30 30 30 30 30 30 30 30 330 8 printing consumables
sale & Marketing - 900 260 300 260 560 260 260 260 260 260 260 3840 9
Insurance 86 86 86 86 86 86 86 86 86 86 86 86 1032 10 employer's liability insurance
national
insurance 464 449 464 464 449 464 449 464 464 419 464 5011 national insurance rate 13.8%
Wages(full
time) - 1,736 1,680 1,736 1,736 1,680 1,736 1,680 1,736 1,736 1,568 1,736 18760 11 full time £7 per hour,8hr per day
Wages(part
time) - 1,612 1,560 1,612 1,612 1,560 1,612 1,560 1,612 1,612 1,456 1,612 17420 12 part time £6.5 per hour,around 8 hr per day
opening consult 2,000 - - - - - - - - - - - 2000 13 dessert consult
council tax 10,000 - - - - - - - - - - - 10000 14
Uniform 180 - - - - - - - - - - - 180 15 smart shirt apron * 6
Refurbishment 10,000 - - - - - - - - - - - 10000 16sundries(knife,m
ask, chopping
block,glove...) 44 - - - - - - - - - - - 44 17 for daily operating use
stainless steel
sink 360 - - - - - - - - - - - 360 18 facility
commercial tap 170 - - - - - - - - - - - 170 19 facility
salad prep
counter 3,589 - - - - - - - - - - - 3589 20
commercial use
blender 600 - - - - - - - - - - - 600 21 *2 use for making base sweet soup
multifunctional
cooker 200 - - - - - - - - - - - 200 22 *2 use for making base sweet soup
ice machine 320 - - - - - - - - - - - 320 23 *1 use for making base sweet soup
furniture 2,100 - - - - - - - - - - - 2100 24 10 set of table
casher machine 80 - - - - - - - - - - - 80 25 *1 use for operation
refrigerator 334 - - - - - - - - - - - 334 26 *1 for inventory use
taxation 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 32,380 9,746 7,635 8,206 9,114 9,736 9,588 10,014 9,323 9,612 8,674 9,347 133374
Total inflow 50000 8525 4950 5967.5 8525 10725 11082.5 10725 10230 11082.5 9240 10230 151283
Total outflow 32,380 9,746 7,635 8,206 9,114 9,736 9,588 10,014 9,323 9,612 8,674 9,347 133374
Net inflow/outflow 17,621 -1220.698 -2,685 -2,238 -589 989 1,494 711 907 1,470 566 883 17908
flyer,social network,
discount,one day
function in
displays for preparing
tops(fruit,nuts)
with refrigerator
BUSINESS PLAN
30 | P a g e
cash flow forecast for the year ending 31st MAR 2017
cash inflows Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total cross checksNote
capital introduced 17,908 17908 1 start up capital
Product Sales 9900 9377.5 14025 11935 11935 14850 11935 10725 11082.5 11082.5 10367.5 10230 137445 2 average 5.5 pround/unit
Total 27808.095 9377.5 14025 11935 11935 14850 11935 10725 11082.5 11082.5 10367.5 10230 155353
Cash outflows Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
Purchases 2,799 3,254 4,117 3,302 3,374 4,295 3,263 3,651 3,126 3,141 2,938 2,868 40128 3 fruit,package(including approximately 7 % waste)
Rent 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20004 4 premises
Utilities 600 600 600 600 600 600 600 600 600 600 600 600 7200 6 electricity,water,waste
License 0 0 0 0 0 0 0 0 0 0 0 0 0 7 regeister in local government
Stationery 30 30 30 30 30 30 30 30 30 30 30 30 360 8 printing consumables
sale & Marketing - - 500 480 260 800 660 100 330 - - 260 3390 9
Insurance 86 86 86 86 86 86 86 86 86 86 86 86 1032 10 employer's liability insurance
national
insurance 449 464 557 464 464 557 464 449 464 464 434 464 5691 national insurance rate 13.8%
Wages(full
time) 1,680 1,736 1,680 1,736 1,736 1,680 1,736 1,680 1,736 1,736 1,624 1,736 20496 11 full time £7 per hour,8hr per day
Wages(part
time) 1,560 1,612 2,340 1,612 1,612 2,340 1,612 1,560 1,612 1,612 1,508 1,612 20592 12 part time £6.5 per hour,around 8 hr per day
council tax 10,000 - - - - - - - - - - - 10000 13
Uniform - - - - - - - - - - - - 0 14 smart shirt apron * 6
Refurbishment - - - - - - - - - - - - 0 15 including table chairsundries(knife,m
ask, chopping
block,glove...) 48 - - - - - - - - - - - 48 16 for daily operating use
stainless steel
sink - - - - - - - - - - - - 0 17 facility
commercial tap - - - - - - - - - - - - 0 18 facility
salad prep
counter - - - - - - - - - - - - 0 19
commercial use
blender - - - - - - - - - - - - 0 20 *2 use for making base sweet soup
multifunctional
cooker - - - - - - - - - - - - 0 21 *2 use for making base sweet soup
ice machine - - - - - - - - - - - - 0 22 *1 use for making base sweet soup
furniture
casher machine - - - - - - - - - - - - 0 23 *1 use for operation
refrigerator - - - - - - - - - - - - 0 24 *1 for inventory use
Total 18,919 9,449 11,577 9,977 9,829 12,055 10,117 9,822 9,650 9,336 8,887 9,323 128941
68221
Total inflow 27808.095 9377.5 14025 11935 11935 14850 11935 10725 11082.5 11082.5 10367.5 10230 155353
Total outflow 18,919 9,449 11,577 9,977 9,829 12,055 10,117 9,822 9,650 9,336 8,887 9,323 128941
Net inflow/outflow 8,889 -71.148 2,448 1,958 2,106 2,795 1,818 903 1,432 1,747 1,480 907 26412
flyer,social
network,
discount,one day
displays for preparing
tops(fruit,nuts)
with refrigerator
BUSINESS PLAN
31 | P a g e
cash flow forecast for the year ending 31st MAR 2018
cash inflows Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total cross checksNote
capital introduced 26,412 26412 1 start up capital
Product Sales 12375 11935 14025 13640 13640 15675 14492.5 12375 11935 12787.5 11550 11935 156365 2 average 5.5 pround/unit
Total 38787.457 11935 14025 13640 13640 15675 14492.5 12375 11935 12787.5 11550 11935 182777
Cash outflows Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
Purchases 3,571 4,000 4,037 3,832 3,856 4,504 4,049 4,101 3,350 3,639 3,266 3,350 45557 3 fruit,packing(including approximately 7 % waste)
Rent 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20004 4 premises
Utilities 600 600 600 600 600 600 600 600 600 600 600 600 7200 6 electricity,water,waste
License 0 0 0 0 0 0 0 0 0 0 0 0 0 7 regeister in local government
Stationery 30 30 30 30 30 30 30 30 30 30 30 30 360 8 printing consumables
sale & Marketing - - 500 480 260 800 660 100 330 - - 260 3390 9
Insurance 86 86 86 86 86 86 86 86 86 86 86 86 1032 10 employer's liability insurance
national
insurance 449 464 557 464 464 557 575 449 464 464 419 464 5787 national insurance rate 13.8%
Wages(full
time) 1,680 1,736 1,680 1,736 1,736 1,680 1,736 1,680 1,736 1,736 1,568 1,736 20440 11 full time £7 per hour,8hr per day
Wages(part
time) 1,560 1,612 2,340 1,612 1,612 2,340 2,418 1,560 1,612 1,612 1,456 1,612 21346 12 part time £6.5 per hour,around 8 hr per day
council tax 10,000 - - - - - - - - - - - 10000 13
Uniform - - - - - - - - - - - - 0 14 smart shirt apron * 6
Refurbishment - - - - - - - - - - - - 0 15 including table chairsundries(knife,m
ask, chopping
block,glove...) 48 - - - - - - - - - - - 48 16 for daily operating use
stainless steel
sink - - - - - - - - - - - - 0 17 facility
commercial tap - - - - - - - - - - - - 0 18 facility
salad prep
counter - - - - - - - - - - - - 0 19
commercial use
blender - - - - - - - - - - - - 0 20 *2 use for making base sweet soup
multifunctional
cooker - - - - - - - - - - - - 0 21 *2 use for making base sweet soup
ice machine - - - - - - - - - - - - 0 22 *1 use for making base sweet soup
furniture 0 23 facility
casher machine - - - - - - - - - - - - 0 24 *1 use for operation
refrigerator - - - - - - - - - - - - 0 25 *1 for inventory use
Operating cash
outflow 19,691 10,195 11,497 10,507 10,311 12,264 11,822 10,272 9,875 9,834 9,091 9,805 135164
taxation 0 0 0 0 0 0 0 0 0 0 0 382 382
Total 19,691 10,195 11,497 10,507 10,311 12,264 11,822 10,272 9,875 9,834 9,091 10,187 135547
Total inflow 38787.457 11935 14025 13640 13640 15675 14492.5 12375 11935 12787.5 11550 11935 182777
Total outflow 19,691 10,195 11,497 10,507 10,311 12,264 11,822 10,272 9,875 9,834 9,091 10,187 135547
Net inflow/outflow 19,097 1740.027 2,528 3,133 3,329 3,411 2,671 2,103 2,060 2,953 2,459 1,748 47231
flyer,social
network,
discount,one day
displays for preparing
tops(fruit,nuts)
with refrigerator
BUSINESS PLAN
32 | P a g e
cash inflows Apr-Jun Jul-Sep Oct-Dec Jan-Mar Total cross checksNote
capital introduced 47,231 47231 1 start up capital
Product Sales 40040 37950 45540 44550 168080 2 average 5.5 pround/unit
Total 87270.806 37950 45540 44550 215311
Cash outflows Apr Jul Oct Jan-Mar Total
Purchases 12,097 11,355 12,948 13,246 49645 3 fruit,packing(including approximately 7 % waste)
Rent 5,001 5,001 5,001 5,001 20004 4 premises
Utilities 1,800 1,800 1,800 1,800 7200 6 electricity,water,waste
License 0 0 0 0 0 7 regeister in local government
Stationery 90 90 90 90 360 8 printing consumables
sale & Marketing 1,200 800 1,200 800 4000 9
Insurance 258 258 258 258 1032 10 employer's liability insurance
national insurance 1,361 1,376 1,707 1,346 5791 national insurance rate 13.8%
Wages(full time) 5,096 5,152 5,152 5,040 20440 11 full time £7 per hour,8hr per day
Wages(part time) 4,732 4,784 7,176 4,680 21372 12 part time £6.5 per hour,around 8 hr per day
council tax 10,000 - - - 10000 13
Uniform - - - - 0 14 smart shirt apron * 6
Refurbishment - - - - 0 15 including table chairsundries(knife,mask,
chopping block,glove...) 48 - - - 48 16 for daily operating use
stainless steel sink - - - - 0 17 facility
commercial tap - - - - 0 18 facility
salad prep counter - - - - 0 19
commercial use blender - - - - 0 20 *2 use for making base sweet soup
multifunctional cooker - - - - 0 21 *2 use for making base sweet soup
ice machine - - - - 0 22 *1 use for making base sweet soup
furniture 0 23 facility
casher machine - - - - 0 24 *1 use for operation
refrigerator - - - - 0 25 *1 for inventory use
Operating cash outflow 41,683 30,617 35,332 32,261 139892
taxation 0 1,472 1,922 2,456 5850
dividend pay 5,000 5000
Total 41,683 32,088 37,254 39,717 150742
Total inflow 87270.806 37950 45540 44550 215311
Total outflow 41,683 32,088 37,254 39,717 150742
Net inflow/outflow 45,588 5,862 8,286 4,833 64569
flyer,social
network,
displays for preparing
tops(fruit,nuts)
cash flow forecast for the year ending 31st MAR 2019
BUSINESS PLAN
33 | P a g e
cash inflows Apr-Jun Jul-Sep Oct-Dec Jan-Mar Total cross checksNote
capital introduced 64,569 64569 1 start up capital
Product Sales 42542.5 40480 48070 47025 178118 2 average 5.5 pround/unit
Total 107111.28 40480 48070 47025 242686
Cash outflows Apr Jul Oct Jan-Mar Total
Purchases 11,912 12,071 13,663 13,945 51591 3 fruit,packing(including approximately 7 % waste)
Rent 5,001 5,001 5,001 5,001 20004 4 premises
Utilities 1,800 1,800 1,800 1,800 7200 6 electricity,water,waste
License 0 0 0 0 0 7 regeister in local government
Stationery 90 90 90 90 360 8 printing consumables
sale & Marketing 1,200 800 1,200 800 4000 9
Insurance 258 258 258 258 1032 10 employer's liability insurance
national insurance 1,361 1,376 1,707 1,346 5791 national insurance rate 13.8%
Wages(full time) 5,096 5,152 5,152 5,040 20440 11 full time £7 per hour,8hr per day
Wages(part time) 4,732 4,784 7,176 4,680 21372 12 part time £6.5 per hour,around 8 hr per day
council tax 10,000 - - - 10000 13
Uniform - - - - 0 14 smart shirt apron * 6
Refurbishment - - - - 0 15 including table chairsundries(knife,mask,
chopping block,glove...) 48 - - - 48 16 for daily operating use
stainless steel sink - - - - 0 17 facility
commercial tap - - - - 0 18 facility
salad prep counter - - - - 0 19
commercial use blender - - - - 0 20 *2 use for making base sweet soup
multifunctional cooker - - - - 0 21 *2 use for making base sweet soup
ice machine - - - - 0 22 *1 use for making base sweet soup
furniture 0 23 facility
casher machine - - - - 0 24 *1 use for operation
refrigerator - - - - 0 25 *1 for inventory use
Operating cash outflow 41,499 31,332 36,047 32,960 141838
taxation 0 1,830 2,281 2,806 6917
Total 41,499 33,162 38,328 35,767 148755
dividend pay 10000 10000
Total outflow 41,499 33,162 38,328 45,767 158755
Total inflow 107111.28 40480 48070 47025 242686
Total outflow 41,499 33,162 38,328 45,767 158755
Net inflow/outflow 65,613 7,318 9,742 1,258 83931
flyer,social
network,
displays for preparing
tops(fruit,nuts)
cash flow forecast for the year ending 31st MAR 2020
BUSINESS PLAN
34 | P a g e
Income Statement
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
Total Sales 0 8,525 4,950 5,968 8,525 10,725 11,083 10,725 10,230 11,083 9,240 10,230 101,283
Cost of Sale
Opening inventory - 650 813 672 642 813 788 687 1,240 1,123 1,046 938 9,412
Total purchases 650 2,651 1,303 1,711 2,659 3,104 3,133 3,682 2,868 3,157 2,588 2,892 30,401
Closing inventory 650 813 672 642 813 788 687 1,240 1,123 1,046 938 845 10,257
Cost of Sale 0 2,488 1,445 1,741 2,488 3,130 3,234 3,130 2,985 3,234 2,696 2,985 29,556
Gross Profit 0 6,037 3,506 4,226 6,037 7,595 7,848 7,595 7,245 7,848 6,544 7,245 71,726
wages and
Salaries
full time - 1,736 1,680 1,736 1,736 1,680 1,736 1,680 1,736 1,736 1,568 1,736 18,760
part time - 1,612 1,560 1,612 1,612 1,560 1,612 1,560 1,612 1,612 1,456 1,612 17,420
Total wage 3,348 3,240 3,348 3,348 3,240 3,348 3,240 3,348 3,348 3,024 3,348 36,180
Other Overheads
Marketing - 900 260 300 260 560 260 260 260 260 260 260 3,840
Rent 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,004
Utilities - 600 600 600 600 600 600 600 600 600 600 600 6,600
insurance 86 86 86 86 86 86 86 86 86 86 86 86 1,032
national insurance 0 464 449 464 464 449 464 449 464 464 419 464 5,011
Stationery - 30 30 30 30 30 30 30 30 30 30 30 330
opening consult 2,000 - - - - - - - - - - - 2,000
council tax 10,000 - - - - - - - - - - - 10,000
Uniform 180 - - - - - - - - - - - 180
Refurbishment 10,000 - - - - - - - - - - - 10,000
Depreciation:sundries(knife,mas
k, chopping - 4 4 4 4 4 4 4 4 4 4 4 44
stainless steel sink - 5 5 5 5 5 5 5 5 5 5 5 55
commercial tap - 3 3 3 3 3 3 3 3 3 3 3 33
salad prep counter - 48 48 48 48 48 48 48 48 48 48 48 528commercial use
blender - 8 8 8 8 8 8 8 8 8 8 8 88multifunctional
cooker - 3 3 3 3 3 3 3 3 3 3 3 33
ice machine - 5 5 5 5 5 5 5 5 5 5 5 55
furniture - 34 34 34 34 34 34 34 34 34 34 34 374
casher machine - 1 1 1 1 1 1 1 1 1 1 1 11
refrigerator - 5 5 5 5 5 5 5 5 5 5 5 55
Total overheads 23,933 3,863 3,208 3,263 3,223 3,508 3,223 3,208 3,223 3,223 3,178 3,223 60,273
Net profit -23,933 -1,173 -2,942 -2,385 -533 848 1,278 1,148 674 1,278 342 674 -24,727
taxation(20%) 0 0 0 0 0 0 0 0 0 0 0 0 0
Profit after tax -23,933 -1,173 -2,942 -2,385 -533 848 1,278 1,148 674 1,278 342 674 -24,727
Income statement Year to 31 MAR 2016
BUSINESS PLAN
35 | P a g e
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
Total Sales 9,900 9,378 14,025 11,935 11,935 14,850 11,935 10,725 11,083 11,083 10,368 10,230 137,445
Cost of Sale
Opening inventory 845 755 1,272 1,297 1,116 1,008 969 749 1,269 1,161 1,068 981 12,489
Total purchases 2,799 3,254 4,117 3,302 3,374 4,295 3,263 3,651 3,126 3,141 2,938 2,868 40,128
Closing inventory 755 1,272 1,297 1,116 1,008 969 749 1,269 1,161 1,068 981 864 12,508
Cost of Sale 2,889 2,737 4,093 3,483 3,483 4,334 3,483 3,130 3,234 3,234 3,025 2,985 40,109
Gross Profit 7,011 6,641 9,932 8,452 8,452 10,517 8,452 7,595 7,848 7,848 7,342 7,245 97,336
wages and Salaries
full time 1,680 1,736 1,680 1,736 1,736 1,680 1,736 1,680 1,736 1,736 1,624 1,736 20,496
part time 1,560 1,612 2,340 1,612 1,612 2,340 1,612 1,560 1,612 1,612 1,508 1,612 20,592
Total 3,240 3,348 4,020 3,348 3,348 4,020 3,348 3,240 3,348 3,348 3,132 3,348 41,088
Other Overheads
Marketing - - 500 480 260 800 660 100 330 - - 260 3,390
Rent 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,004
Utilities 600 600 600 600 600 600 600 600 600 600 600 600 7,200
insurance 86 86 86 86 86 86 86 86 86 86 86 86 1,032
national insurance 449 464 557 464 464 557 464 449 464 464 434 464 5,691
Stationery 30 30 30 30 30 30 30 30 30 30 30 30 360
council tax 10,000 - - - - - - - - - - - 10,000
Depreciation:sundries(knife,mask,
chopping block,glove...) 4 4 4 4 4 4 4 4 4 4 4 4 48
stainless steel sink 5 5 5 5 5 5 5 5 5 5 5 5 60
commercial tap 3 3 3 3 3 3 3 3 3 3 3 3 36
salad prep counter 48 48 48 48 48 48 48 48 48 48 48 48 576
commercial use blender 8 8 8 8 8 8 8 8 8 8 8 8 96
multifunctional cooker 3 3 3 3 3 3 3 3 3 3 3 3 36
ice machine 5 5 5 5 5 5 5 5 5 5 5 5 60
furniture 34 34 34 34 34 34 34 34 34 34 34 34 408
casher machine 1 1 1 1 1 1 1 1 1 1 1 1 12
refrigerator 5 5 5 5 5 5 5 5 5 5 5 5 60
Total overheads 12,948 2,963 3,556 3,443 3,223 3,856 3,623 3,048 3,293 2,963 2,933 3,223 49,069
Net profit -9,177 330 2,356 1,661 1,881 2,641 1,481 1,308 1,208 1,538 1,277 674 7,179
taxation(20%) 0 0 0 0 0 0 0 0 0 0 0 0 0
Profit after tax -9,177 330 2,356 1,661 1,881 2,641 1,481 1,308 1,208 1,538 1,277 674 7,179
Income statement Year to 31 MAR 2017
BUSINESS PLAN
36 | P a g e
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
Total Sales 12,375 11,935 14,025 13,640 13,640 15,675 14,493 12,375 11,935 12,788 11,550 11,935 156,365
Cost of Sale
Opening inventory 864 824 1,341 1,286 1,138 1,014 943 764 1,253 1,120 1,028 923 12,497
Total purchases 3,571 4,000 4,037 3,832 3,856 4,504 4,049 4,101 3,350 3,639 3,266 3,350 45,557
Closing inventory 824 1,341 1,286 1,138 1,014 943 764 1,253 1,120 1,028 923 791 12,424
Cost of Sale 3,611 3,483 4,093 3,980 3,980 4,574 4,229 3,611 3,483 3,732 3,371 3,483 45,630
Gross Profit 8,764 8,452 9,932 9,660 9,660 11,101 10,263 8,764 8,452 9,056 8,180 8,452 110,735
wages and
Salaries
full time 1,680 1,736 1,680 1,736 1,736 1,680 1,736 1,680 1,736 1,736 1,568 1,736 20,440
part time 1,560 1,612 2,340 1,612 1,612 2,340 2,418 1,560 1,612 1,612 1,456 1,612 21,346
Total 3,240 3,348 4,020 3,348 3,348 4,020 4,154 3,240 3,348 3,348 3,024 3,348 41,786
Other Overheads
Marketing - - 500 480 260 800 660 100 330 - - 260 3,390
Rent 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,004
Utilities 600 600 600 600 600 600 600 600 600 600 600 600 7,200
insurance 86 86 86 86 86 86 86 86 86 86 86 86 1,032
national insurance 449 464 557 464 464 557 575 449 464 464 419 464 5,787
Stationery 30 30 30 30 30 30 30 30 30 30 30 30 360
council tax 10,000 - - - - - - - - - - - 10,000
Depreciation: 0sundries(knife,mas
k, chopping 4 4 4 4 4 4 4 4 4 4 4 4 48
stainless steel sink 4 4 4 4 4 4 4 4 4 4 4 4 48
commercial tap 3 3 3 3 3 3 3 3 3 3 3 3 36
salad prep counter 34 34 34 34 34 34 34 34 34 34 34 34 408commercial use
blender 6 6 6 6 6 6 6 6 6 6 6 6 72multifunctional
cooker 2 2 2 2 2 2 2 2 2 2 2 2 24
ice machine 3 3 3 3 3 3 3 3 3 3 3 3 36
furniture 25 25 25 25 25 25 25 25 25 25 25 25 300
casher machine 1 1 1 1 1 1 1 1 1 1 1 1 12
refrigerator 3 3 3 3 3 3 3 3 3 3 3 3 36
Total overheads 12,917 2,932 3,525 3,412 3,192 3,825 3,703 3,017 3,262 2,932 2,887 3,192 48,793
Net profit -7,393 2,172 2,387 2,900 3,120 3,256 2,406 2,507 1,842 2,776 2,269 1,912 20,155
taxation (20%) 0 0 0 0 0 0 0 0 0 0 0 382 382
Profit after tax -7,393 2,172 2,387 2,900 3,120 3,256 2,406 2,507 1,842 2,776 2,269 1,530 19,773
Income statement Year to 31 MAR 2018
BUSINESS PLAN
37 | P a g e
Apr-Jun Jul-Sep Oct-Dec Jan-Mar Total
Total Sales 40,040 37,950 45,540 44,550 168,080
Cost of Sale
Opening inventory 791 1,203 1,484 1,142 4,619
Total purchases 12,097 11,355 12,948 13,246 49,645
Closing inventory 1,203 1,484 1,142 1,387 5,215
Cost of Sale 11,684 11,075 13,289 13,001 49,049
Gross Profit 28,356 26,876 32,251 31,550 119,031
wages and Salaries
full time 5,096 5,152 5,152 5,040 20,440
part time 4,732 4,784 7,176 4,680 21,372
Total 9,828 9,936 12,328 9,720 41,812
Other Overheads
Marketing 1,200 800 1,200 800 4,000
Rent 5,001 5,001 5,001 5,001 20,004
Utilities 1,800 1,800 1,800 1,800 7,200
insurance 258 258 258 258 1,032
national insurance 1,361 1,376 1,707 1,346 5,791
Stationery 90 90 90 90 360
council tax 10,000 - - - 10,000
Depreciation: 0sundries(knife,mask,
chopping block,glove...) 12 12 12 12 48
stainless steel sink 12 12 12 12 48
commercial tap 9 9 9 9 36
salad prep counter 102 102 102 102 408
commercial use blender 18 18 18 18 72
multifunctional cooker 6 6 6 6 24
ice machine 9 9 9 9 36
furniture 75 75 75 75 300
casher machine 3 3 3 3 12
refrigerator 9 9 9 9 36
Total overheads 19,965 9,580 10,311 9,550 49,407
Net profit -1,438 7,359 9,611 12,279 27,812
taxation (20%) 0 1,472 1,922 2,456 5,850
Profit after tax -1,438 5,887 7,689 9,823 21,962
Income statement Year to 31 MAR 2019
BUSINESS PLAN
38 | P a g e
Apr-Jun Jul-Sep Oct-Dec Jan-Mar Total
Total Sales 42,543 40,480 48,070 47,025 178,118
Cost of Sale
Opening inventory 1,387 885 1,142 778 4,192
Total purchases 11,912 12,071 13,663 13,945 51,591
Closing inventory 885 1,142 778 1,000 3,805
Cost of Sale 12,415 11,813 14,028 13,723 51,978
Gross Profit 30,128 28,667 34,042 33,302 126,140
wages and Salaries
full time 5,096 5,152 5,152 5,040 20,440
part time 4,732 4,784 7,176 4,680 21,372
Total 9,828 9,936 12,328 9,720 41,812
Other Overheads
Marketing 1,200 800 1,200 800 4,000
Rent 5,001 5,001 5,001 5,001 20,004
Utilities 1,800 1,800 1,800 1,800 7,200
insurance 258 258 258 258 1,032
national insurance 1,361 1,376 1,707 1,346 5,791
Stationery 90 90 90 90 360
council tax 10,000 - - - 10,000
Depreciation: 0sundries(knife,mask,
chopping block,glove...) 12 12 12 12 48
stainless steel sink 12 12 12 12 48
commercial tap 9 9 9 9 36
salad prep counter 102 102 102 102 408
commercial use blender 18 18 18 18 72
multifunctional cooker 6 6 6 6 24
ice machine 9 9 9 9 36
furniture 75 75 75 75 300
casher machine 3 3 3 3 12
refrigerator 9 9 9 9 36
Total overheads 19,965 9,580 10,311 9,550 49,407
Net profit 335 9,151 11,403 14,032 34,921
taxation (20%) 0 1,830 2,281 2,806 6,917
Profit after tax 335 7,321 9,122 11,226 28,003
Income statement Year to 31 MAR 2020
BUSINESS PLAN
39 | P a g e
Balance Sheet
Fixed assets Cost Depn. Net.
sundries(knife,mask, chopping block,glove...) 44.00 44.00 0.00
stainless steel sink 360.00 55.00 305.00
commercial tap 170.00 33.00 137.00
salad prep counter 3,589.00 528.00 3,061.00
commercial use blender 600.00 88.00 512.00
multifunctional cooker 200.00 33.00 167.00
ice machine 320.00 55.00 265.00
furniture 2,100.00 374.00 1,726.00
casher machine 80.00 11.00 69.00
refrigerator 333.50 55.00 278.50
Total 7,796.50 1,276.00 6,520.50
Current Assets
cash in bank 17,908.10
Inventory 844.90
Total Assets 25,273.50
Current liabilities
Trade Payables 0.00
Rates and Utilities 0.00
Corporation Tax 0.00
Loan Interest 0.00
total Liabilities 0.00
Share Capital 50,000.00
retained profit 0.00
Current Year Profits -24,726.51
Total Equity 25,273.50
Total Equity & Liabilities 25,273.50
Pro Forma Balance Sheet for the year end of 31 MAR 2016
BUSINESS PLAN
40 | P a g e
Fixed assets Cost Depn. Net.
sundries(knife,mask, chopping block,glove...) 48.00 48.00 0.00
stainless steel sink 305.00 60.00 245.00
commercial tap 137.00 36.00 101.00
salad prep counter 3,061.00 576.00 2,485.00
commercial use blender 512.00 96.00 416.00
multifunctional cooker 167.00 36.00 131.00
ice machine 265.00 60.00 205.00
furniture 1,726.00 408.00 1,318.00
casher machine 69.00 12.00 57.00
refrigerator 278.50 60.00 218.50
Total 6,568.50 1,392.00 5,176.50
Current Assets
cash in bank 26,412.46
Inventory 863.90
Total Assets 32,452.86
Current liabilities
Trade Payables 0.00
Rates and Utilities 0.00
Corporation Tax 0.00
Loan Interest 0.00
total Liabilities 0.00
Share Capital 50,000.00
retained profit -24,726.51
Current Year Profits 7,179.36
Total Equity 32,452.86
Total Equity & Liabilities 32,452.86
Pro Forma Balance Sheet for the year end of 31 MAR 2017
BUSINESS PLAN
41 | P a g e
Fixed assets Cost Depn. Net.
sundries(knife,mask, chopping block,glove...) 48.00 48.00 0.00
stainless steel sink 245.00 48.00 197.00
commercial tap 101.00 36.00 65.00
salad prep counter 2,485.00 408.00 2,077.00
commercial use blender 416.00 72.00 344.00
multifunctional cooker 131.00 24.00 107.00
ice machine 205.00 36.00 169.00
furniture 1,318.00 300.00 1,018.00
casher machine 57.00 12.00 45.00
refrigerator 218.50 36.00 182.50
total: 5,224.50 1,020.00 4,204.50
Current Assets
cash in bank 47,230.81
Inventory 790.55
Total Assets 52,225.86
Current liabilities
Trade Payables 0.00
Rates and Utilities 0.00
Corporation Tax 0.00
Loan Interest 0.00
total Liabilities 0.00
Share Capital 50,000.00
retained profit -17,547.14
Current Year Profits 19,773.00
Total Equity 52,225.86
Total Equity & Liabilities 52,225.86
Pro Forma Balance Sheet for the year end of 31 MAR 2018
BUSINESS PLAN
42 | P a g e
Fixed assets Cost Depn. Net.
sundries(knife,mask, chopping block,glove...) 48.00 48.00 0.00
stainless steel sink 197.00 48.00 149.00
commercial tap 65.00 36.00 29.00
salad prep counter 2,077.00 408.00 1,669.00
commercial use blender 344.00 72.00 272.00
multifunctional cooker 107.00 24.00 83.00
ice machine 169.00 36.00 133.00
furniture 1,018.00 300.00 718.00
casher machine 45.00 12.00 33.00
refrigerator 182.50 36.00 146.50
total: 4,252.50 1,020.00 3,232.50
Current Assets
cash in bank 64,568.78
Inventory 1,386.85
Total Assets 69,188.13
Current liabilities
Trade Payables 0.00
Rates and Utilities 0.00
Corporation Tax 0.00
Loan Interest 0.00
total Liabilities 0.00
Share Capital 50,000.00
retained profit 2,225.86
dividend pay -5,000.00
Current Year Profits 21,962.27
Total Equity 69,188.13
Total Equity & Liabilities 69,188.13
Pro Forma Balance Sheet for the year end of 31 MAR 2019
BUSINESS PLAN
43 | P a g e
Fixed assets Cost Depn. Net.
sundries(knife,mask, chopping block,glove...) 48.00 48.00 0.00
stainless steel sink 149.00 48.00 101.00
commercial tap 29.00 36.00 -7.00
salad prep counter 1,669.00 408.00 1,261.00
commercial use blender 272.00 72.00 200.00
multifunctional cooker 83.00 24.00 59.00
ice machine 133.00 36.00 97.00
furniture 718.00 300.00 418.00
casher machine 33.00 12.00 21.00
refrigerator 146.50 36.00 110.50
total: 3,280.50 1,020.00 2,260.50
Current Assets
cash in bank 83,930.88
Inventory 1,000.18
Total Assets 87,191.55
Current liabilities
Trade Payables 0.00
Rates and Utilities 0.00
Corporation Tax 0.00
Loan Interest 0.00
total Liabilities 0.00
Share Capital 50,000.00
retained profit 19,188.13
dividend pay -10,000.00
Current Year Profits 28,003.42
Total Equity 87,191.55
Total Equity & Liabilities 87,191.55
Pro Forma Balance Sheet for the year end of 31 MAR 2020
BUSINESS PLAN
44 | P a g e
GRAPHS OF PRIMARY DATA
Purchase Frequency
23%
68%
0%9%
Purchase Frequency of Teenager
Never
Less than threetimes a week
Three to fivetimes a week
More than fivetimes a week
5%
67%
11%
17%
Purchase Frequency of Male
Never
Less than threetimes a week
Three to fivetimes a week
More than fivetimes a week
6%
76%
12%6%
Purchase Frequency of Employed
Never
Less than threetimes a week
Three to fivetimes a week
More than fivetimes a week
19%
71%
3%7%
Purchase Frequency of Female
Never
Less than threetimes a week
Three to fivetimes a week
More than fivetimes a week
10%
60%
10%
20%
Purchase Frequency of Pensioner
Never
Less than threetimes a week
Three to fivetimes a week
More than fivetimes a week
15%
68%
6%11%
Purchase Frequency of Participant
Never
Less than threetimes a week
Three to fivetimes a week
More than fivetimes a week
BUSINESS PLAN
45 | P a g e
Price range
9%
73%
18%
0%
Price Range of Teenager
less than £3.00
£3.00 to £5.00
£5.01 to £7.00
more than £7.00
22%
67%
11%
0%
Price Prange of Male
less than £3.00
£3.00 to £5.00
£5.01 to £7.00
more than £7.00
18%
70%
12%
0%
Price Prange of Eployed
less than £3.00
£3.00 to £5.00
£5.01 to £7.00
more than £7.00
10%
77%
13%
0%
Price Prange of Female
less than £3.00
£3.00 to £5.00
£5.01 to £7.00
more than £7.00
20%
80%
0% 0%
Price Prange of Eployed
less than £3.00
£3.00 to £5.00
£5.01 to £7.00
more than £7.00
13%
76%
11%
0%
Price Prange of Participant
less than £3.00
£3.00 to £5.00
£5.01 to £7.00
more than £7.00
BUSINESS PLAN
46 | P a g e
Buying Style
Consumers’ Willingness of Purchase
Flavour of Sweet Soup (Base)
44%
5%14%
37%
Buying Style of Participant
Traditional Style
DIY Style
Buffet Style
Homemade
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Teenager Employed Pensioner Male Female Participant
Consumers' Willingness of Purchase
YES NO
0
5
10
15
20
25
30
35
Coconut Chocolate Almond Mango Sesame Smoothies
Flavour of Sweet Soup (Base)
BUSINESS PLAN
47 | P a g e
Flavour of Ingredients (Topping)
Take Away or In Store
Care About Healthy when Choosing Dessert
Flavour of Sweet Soup (Base)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Teenager Employed Pensioner Male Female Participant
Take Away or In Store
Take Away In Store
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Teenager Employed Pensioner Male Female Participant
Carefulness of Purchase
Care Not Care
BUSINESS PLAN
48 | P a g e
Effect of Factors
Teenager Very Important Important Not The Main Factor Don't Care
Price 4 16 3 0
Flavour 18 4 0 0
Types 5 11 6 0
Service 8 5 9 0
Employed Very Important Important Not The Main Factor Don't Care
Price 5 10 1 1
Flavour 15 1 0 0
Types 3 9 5 0
Service 6 5 5 0
Pensioner Very Important Important Not The Main Factor Don't Care
Price 2 3 5 0
Flavour 6 4 0 0
Types 5 4 1 0
Service 4 3 3 0
Male Very Important Important Not The Main Factor Don't Care
Price 3 8 6 1
Flavour 14 4 0 0
Types 7 7 4 0
Service 7 5 5 0
Female Very Important Important Not The Main Factor Don't Care
Price 8 21 3 0
Flavour 25 5 0 0
Types 6 17 8 0
Service 11 8 12 0
All Participants Very Important Important Not The Main Factor Don't Care
Price 13 31 10 1
Flavour 42 11 0 0
Types 15 27 12 0
Service 19 15 19 0
BUSINESS PLAN
49 | P a g e
MENU OF FRUITY HOUSE
BUSINESS PLAN
50 | P a g e
BUSINESS PLAN
51 | P a g e
QUESTIONNAIRE