Judul: One Good Cookie: A Business Plan
Penulis: V. Hire Damrauer
ONE GOOD COOKIE
A Final Business Plan
Presented to Professor Hal LefkowitzSchool of Business and Management
National UniversityIn Partial Fulfillment
of the Requirements for MGT 610C and the Degree
Master of Business Administration
by
Virginia C. Hire Damrauer
September 2010
Copyright 2010
Virginia C. Hire Damrauer
ALL RIGHTS RESERVED
Executive SummaryWhen I was traveling for work, it struck me that the interesting places were *not* the chains I find at home, it was the unique experiences that I was craving. Not a franchise, and not an internet thing, just a face-to-face unique experience kind of place.
One Good Cookie is a sole proprietorship business with the vision of providing "One Good Cookie at a Fair Price." Our slogan is "One Good Cookie Deserves Another! TM" and our mission is "To make unique, creative, high quality cookies and provide them locally at a fair price in a single-store cookie shop." Our values are community, quality ingredients, and fair prices.
Our financial objectives are to achieve an average sales transaction of $4.50 per customer by the end of the first year and to increase the first year profit by 5% in the second year of business. The top local competitors are profitable with revenues of over $500,000 per year (Manta.com, 2010b, 2010d) and are sustainable as most have been in business for 15 years or more (Manta.com, 2010a, 2010b, 2010d). Financial projections show that the business will have positive cash flow in the first month of operations as 34% of revenue generated. Start up expense will be $22,605 with a net profit in the first year of just over $75,000.
Table of Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc273106701 \h iiiTable of Contents PAGEREF _Toc273106702 \h ivSituational Analysis PAGEREF _Toc273106703 \h 1Market Research PAGEREF _Toc273106704 \h 2Secondary Research Information PAGEREF _Toc273106705 \h 2Demographics. PAGEREF _Toc273106706 \h 2Industry Trends. PAGEREF _Toc273106707 \h 3Supply Sources. PAGEREF _Toc273106708 \h 4Industry Information Sources. PAGEREF _Toc273106709 \h 4Competitive Intelligence PAGEREF _Toc273106710 \h 4Strengths and Weaknesses. PAGEREF _Toc273106711 \h 9Opportunities. PAGEREF _Toc273106712 \h 10Threats. PAGEREF _Toc273106713 \h 11The Marketing Mix PAGEREF _Toc273106714 \h 11Summary PAGEREF _Toc273106715 \h 12Quantitative Market Research PAGEREF _Toc273106716 \h 13Sampling Methodology & Sample Size. PAGEREF _Toc273106717 \h 13Target Respondent Profile. PAGEREF _Toc273106718 \h 13Questionnaire. PAGEREF _Toc273106719 \h 14Primary Research Analysis of Quantitative and Data PAGEREF _Toc273106720 \h 14Survey Data. PAGEREF _Toc273106721 \h 14Research Conclusions PAGEREF _Toc273106722 \h 26Marketing Plan PAGEREF _Toc273106723 \h 28Vision PAGEREF _Toc273106724 \h 28Slogan PAGEREF _Toc273106725 \h 28Mission Statement PAGEREF _Toc273106726 \h 28Values PAGEREF _Toc273106727 \h 28Objectives PAGEREF _Toc273106728 \h 28The Target Customer PAGEREF _Toc273106729 \h 28The Marketing Mix PAGEREF _Toc273106730 \h 29Product. PAGEREF _Toc273106731 \h 30Price. PAGEREF _Toc273106732 \h 31Place. PAGEREF _Toc273106733 \h 31Promotion. PAGEREF _Toc273106734 \h 31Branding PAGEREF _Toc273106735 \h 32Advertising PAGEREF _Toc273106736 \h 32Customer Service and Suggestive Selling PAGEREF _Toc273106737 \h 32Uncontrollable Variables PAGEREF _Toc273106738 \h 33Conclusion PAGEREF _Toc273106739 \h 33Financial Plan PAGEREF _Toc273106740 \h 34Narrative Introduction PAGEREF _Toc273106741 \h 34Financial Objectives PAGEREF _Toc273106742 \h 34Revenue Forecast PAGEREF _Toc273106743 \h 34Pro Forma Cash Flow Analysis PAGEREF _Toc273106744 \h 36Pro Forma Income Analysis PAGEREF _Toc273106745 \h 39Pro Forma Balance Sheet PAGEREF _Toc273106746 \h 40Schedule of Estimated Start-Up Expenses PAGEREF _Toc273106747 \h 40Furniture ($900). PAGEREF _Toc273106748 \h 41Fixtures ($2,000). PAGEREF _Toc273106749 \h 41Kitchen Equipment ($4,380). PAGEREF _Toc273106750 \h 41Tenant Improvements ($2,000). PAGEREF _Toc273106751 \h 42Signs ($8,600). PAGEREF _Toc273106752 \h 42Business Computer Equipment ($620). PAGEREF _Toc273106753 \h 42Leased Space ($1,200). PAGEREF _Toc273106754 \h 42Restaurant Supplies ($1,100). PAGEREF _Toc273106755 \h 42Office Supplies ($400). PAGEREF _Toc273106756 \h 43Kitchen Dishes ($150). PAGEREF _Toc273106757 \h 43Kitchen Utensils ($150). PAGEREF _Toc273106758 \h 43Printing Services ($625). PAGEREF _Toc273106759 \h 43Licenses & Permits ($630). PAGEREF _Toc273106760 \h 43Plan for Financing the Business PAGEREF _Toc273106761 \h 44Narrative Conclusions PAGEREF _Toc273106762 \h 45Operations Plan PAGEREF _Toc273106763 \h 46Legal Form of Business PAGEREF _Toc273106764 \h 46Staffing Plan PAGEREF _Toc273106765 \h 46Training and Motivation. PAGEREF _Toc273106766 \h 46Organizational Chart. PAGEREF _Toc273106767 \h 46Risk Management PAGEREF _Toc273106768 \h 47Insurance. PAGEREF _Toc273106769 \h 47Contractual PAGEREF _Toc273106770 \h 47Other Needs PAGEREF _Toc273106771 \h 48Research & Development. PAGEREF _Toc273106772 \h 48Supply Chain. PAGEREF _Toc273106773 \h 48Production Procedures. PAGEREF _Toc273106774 \h 48Service Procedures. PAGEREF _Toc273106775 \h 48Implementation Plan PAGEREF _Toc273106776 \h 48CONCLUSION AND STATEMENT OF VIABILITY PAGEREF _Toc273106777 \h 50Appendix A – Resumes PAGEREF _Toc273106778 \h 53APPENDIX B – SURVEY QUESTIONS PAGEREF _Toc273106779 \h 56
List of Tables and Exhibits
TOC \h \z \c "Figure" Figure 1. Working population by zip code. PAGEREF _Toc272603589 \h 2Figure 2. The majority of the cookie manufacturing industry in California PAGEREF _Toc272603590 \h 3Figure 3. Survey question 1 PAGEREF _Toc272603591 \h 15Figure 4. Survey question 2 PAGEREF _Toc272603592 \h 16Figure 5. Survey question 3 PAGEREF _Toc272603593 \h 17Figure 6. Survey question 4 PAGEREF _Toc272603594 \h 18Figure 7. Survey question 5 PAGEREF _Toc272603595 \h 19Figure 8. Survey question 6 PAGEREF _Toc272603596 \h 20Figure 9. Survey question 7 PAGEREF _Toc272603597 \h 21Figure 10. Survey question 8 PAGEREF _Toc272603598 \h 22Figure 11. Survey question 9 PAGEREF _Toc272603599 \h 25Figure 12. Survey question 10 PAGEREF _Toc272603600 \h 26Figure 13. Organizational Chart. PAGEREF _Toc272603601 \h 47 TOC \h \z \c "Table"
Table 1. Competitive Intelligence about Financials and Employment PAGEREF _Toc272602922 \h 5Table 2. Competitive Intelligence about Product PAGEREF _Toc272602923 \h 6Table 3. Competitive Intelligence about Price PAGEREF _Toc272602924 \h 7Table 4. Competitive Intelligence about Promotion PAGEREF _Toc272602925 \h 7Table 5. Competitive Intelligence about Place PAGEREF _Toc272602926 \h 8Table 6. Summary of competitive intelligence findings. PAGEREF _Toc272602927 \h 12Table 7. Secondary research indicates ideal characteristics for a local cookie company. PAGEREF _Toc272602928 \h 30Table 8. Sales per month as a percentage of total annual sales PAGEREF _Toc272602929 \h 36Table 9. Adoption curve applied to start up revenue projection PAGEREF _Toc272602930 \h 36Table 10. Cost per Cookie Calculation PAGEREF _Toc272602931 \h 37Table 11. Simple Pro-Forma Cash Flow Analysis PAGEREF _Toc272602932 \h 38Table 12. Pro Forma Income Statement PAGEREF _Toc272602933 \h 39Table 13. Pro Forma Balance Sheet PAGEREF _Toc272602934 \h 40Table 14. Start Up Expenses PAGEREF _Toc272602935 \h 44Table 15. Implementation Schedule PAGEREF _Toc272602936 \h 49
Situational AnalysisMy vision is for a one-location cookie shop in the San Diego area. When I was traveling for work, it struck me that the interesting places were *not* the chains I find at home, it was the unique experiences that I was craving. Not a franchise, and not an internet thing, just a face-to-face unique experience kind of place. Location will be critical, but I'm looking at more of a grass-roots type thing, very local, very old-fashioned.
The focus is strictly cookies - do one thing and do it well. There are tons of exceptional 'bakeries' here in San Diego (with French trained culinary wizards at the helm) and I do not want to put myself in their niche. I'm looking for that little, local, comfy, home-made, grassroots feeling. More along the lines of "the Livingroom" but not a coffee shop. I don't want it to be about beverages, and I thought about this a lot, there are too many of those out there already. I really want to keep it simple and focus on this niche where I can excel. Nothing too corporate, I'd like to keep it smaller and more quaint. Just a little local hole-in-the-wall (in a cute and clean way) best-kept-secret-that-is-not-a-secret type of thing.
My desired endpoint is to have a complete business plan in place that will show me what I need to do (operationally) and how much money I will need (financially) to actually get this business started within 12-18 months. As a result of this business plan, "I will understand the market, financial commitment, profit potential, and other aspects of the business and establish its viability" (Lefkowitz, 2010).
The company will begin as a sole proprietorship. The distinctive core competencies are that my husband is a cook and is in Culinary School, I am finishing my Master of Business Administration, and I have unique family recipes to offer.
Market ResearchMarket research includes secondary and primary research on available information for single-location fresh cookie stores in San Diego County.
Secondary Research InformationSecondary research methods were used to find business information about target customers, product and current industry trends, sources of supply and competitive intelligence.
Demographics.Demographic information was gathered from the US Census Bureau website from the year 2000 Census results for the zip codes 92123 and 92124 which are potential store locations. In each of these communities gender is balanced 50/50. The total population of working people ages 16 and over is distributed as shown by zip code in Figure 1.
Figure SEQ Figure \* ARABIC 1. Working population by zip code.Industry Trends.NAICS code 311821 corresponds to the "Cookie and Cracker Manufacturing" industry. Data was gathered from the Economic Census of 2007, which indicates that there are 56 establishments in California for this industry. Of these 56 establishments, 43% are in the Los Angeles-Long Beach-Riverside combined statistical area, and 13% are in the Santa Ana-Anaheim-Irvine combined statistical area (Orange County). This means that at least 56% of these establishments are nearby in Southern California, but there is no specific census line for the San Diego County area for this industry code. There may be a strong market opportunity here.
Figure SEQ Figure \* ARABIC 2. The majority of the cookie manufacturing industry in CaliforniaSupply Sources.Restaurant supplies in San Diego are mostly ordered from Sysco Corporation (www.sysco.com ). Some entrepreneurs also shop at Costco for Wholesale prices on bulk items (www.costco.com). Both companies offer delivery service to business locations.
Industry Information Sources.This industry poses challenges in that some cookie stores have categorized themselves as bakeries or snack bars rather than as cookie manufacturers. Additionally, these are small private companies, therefore there is not a lot of information available about their finances or production. Informal yet valuable sources of information included Manta.com and Yelp.com, and official information sources included the City of San Diego Business License database and each company's own website.
Competitive IntelligenceProduct sales information is private, and these are all privately owned small companies. According to Manta.com, the City of San Diego, and Yelp.com, each company has the following financial and employment characteristics:
UNCLE BIFF'S SEAPORT COOKIE CO. THE CRAVORY GIRARD GOURMET
Location Type Single Location Single Location Farmers markets Single Location
Annual Sales (Est.) Less than $500,000 $500,000 to $1 million Unknown $500,000 to $1 million
Employees (Est.) 1 to 4 (D&B: 2) 5 to 9 (D&B: 30) Unknown 5 to 9
NAICS code 722213, Snack & Nonalcoholic Beverage Bars 445299, All Other Specialty Food Stores Food stands, desserts 311811, Retail Bakeries
Years in Business 18 years Since 3/1/1993
17 years Unknown – est. 2009 Since 8/1/1987
23 years
Business Owner John Ledgerwood Mike Baker
"Torrey Point Inc" Derek Jaeger, Adam Koven, & Nate Ransom Francois and Diana Goedhuys
Table SEQ Table \* ARABIC 1. Competitive Intelligence about Financials and EmploymentAn analysis of the San Diego County businesses that fit the business model of a single location cookie store reveals that there are very few in the area, but the few that are here are well known and successful. Customer review comments from the yelp.com for each of the four main competitors were analyzed to reveal forty-three different elements of concern for their patrons.
The current demand in the market is high, as many cite in online comments a willingness to pay a premium for a good product as well as willingness to put up with what is occasional poor service or long lines to get their 'cookie fix.'
Tables 2 through 5 provide a summary of the online reviews for each competitor and have been categorized with respect to (a) product, (b) price, (c) promotion, and (d) place.
UNCLE BIFF'S SEAPORT COOKIE CO. THE CRAVORY GIRARD GOURMET DESIGNER COOKIES
PRODUCT
1. Moist or dry? Moist Moist Moist Dry
2. Fresh or stale? Fresh Fresh Fresh Sometimes stale
3. Chip ratio? Good Good Good Good
4. Quality ingredients? Good Ok Good Ok
5. Buttery or oily? Buttery Oily Ok Dry
6. Scent? Good Good Good Good
7. Soft or hard? Soft Chewy Soft Hard
8. Thick or flat? Thick Flat Thick Flat
9. Warm? Warm Warm Not Not
10. Healthy options? Oatmeal Oatmeal Gluten Free Oatmeal
11. Undercooked? Sometimes No No No
12. Size? Too small (3") Good (5") Good Good (5")
13. Appearance? Good Average Average Excellent
14. Firm edges? Yes Yes Unknown Yes
15. Flavor/taste? Good – 15 flavors Average – 10 flavors 950 custom,
9 signature,
& 3 monthly cookie flavors Average – 12 flavors
16. Custom orders? Yes No Yes Yes
17. Beverages? Few Yes No Yes
18. Creativity? No No Yes Yes
Table SEQ Table \* ARABIC 2. Competitive Intelligence about Product
UNCLE BIFF'S SEAPORT COOKIE CO. THE CRAVORY GIRARD GOURMET DESIGNER COOKIES
PRICE
19. One cookie? $1.75 $1.50 $2.00 $4.00
20. Deals? Yes (day old 6 for $5) Yes (buy 3 get 1 free) Yes (6 for $10) No
21. Credit Cards? Yes ($5 minimum) Yes (problems) Unknown Unknown
22. Reviews? Too expensive Good deal Worth it Overpriced
Table SEQ Table \* ARABIC 3. Competitive Intelligence about Price UNCLE BIFF'S SEAPORT COOKIE CO. THE CRAVORY GIRARD GOURMET DESIGNER COOKIES
PROMOTION
23. Supply? Sometimes wait Good supply Run out quick Good supply
24. Wait? No lines No lines Long lines Long lines
25. Samples? No No Free samples No
26. Watch production? Yes Yes No No
27. Delivery? Unknown No Yes Yes
28. Donate to charity? Yes Unknown Yes Unknown
29. Service? Ok Ok Excellent Ok
Table SEQ Table \* ARABIC 4. Competitive Intelligence about Promotion
UNCLE BIFF'S SEAPORT COOKIE CO. THE CRAVORY GIRARD GOURMET DESIGNER COOKIES
PLACE
30. Location? Hillcrest Downtown Farmers markets in La Jolla & Scripps Ranch La Jolla
31. Store? Yes Yes Not yet Yes
32. Signage? Good Good Poor Good
33. Parking? Yes- their own lot Validated Street Street
34. Décor? No frills Average N/A Average
35. Indoor seating? Yes No No Yes
36. Outdoor seating? No Yes No Yes
37. Hours? Unknown 10 am- 10 pm Sat/Sun 9-1 7am - 7 pm
38. Music? Unknown Yes Unknown Unknown
39. Cleanliness? Ok Ok Ok Sometimes poor
40. Restrooms? No Outside Outside No
41. Pan Handlers? Unknown Unknown Unknown Sometimes
42. Microwaves? Unknown Unknown Unknown Yes
43. Air conditioning? Unknown No No No
Table SEQ Table \* ARABIC 5. Competitive Intelligence about PlaceStrengths and Weaknesses.Strengths of the competitors are that they are well established and well known. They have each generated a unique following and have differentiated themselves in the marketplace. Yet each business has its unique challenges as well, and that leaves room for opportunity.
Uncle Biff's Killer California Cookies
Located in the walking-friendly area of Hillcrest, Uncle Biff's has a simple storefront with a big, eye-catching neon sign. They have a huge and loyal following, and their signature cookie is the "California Killer Cookie." One unique strength is their deal on day-old cookies of buy 6 for $5. Their weaknesses include that their one-cookie price is perceived as too high, their no-frills decor, lack of outdoor seating, and there are grumbles that the cookies could be larger for the price. Website: http://unclebiffskillercookies.com/ourcookies.html
Seaport Cookie Company
With a perfectly sized, double-window booth in the heart of Seaport Village, the Seaport Cookie Company could not ask for a better location. The double-window booth eliminates long lines, and fresh baking lures plentiful tourists with yummy aromas. As if that was not enough, their 'buy 3 get one free' deal is the perfect value. Weaknesses include that the cookies are flat rather than thick, parking must be validated, and there have been problems with credit card mischarges. Website: http://www.seaportvillage.com
The Cravory
Overcoming the challenge of selling at local Farmer's Markets, the Cravory has generated a vocal and loyal following who are yearning for a local storefront. The owners actually respond to their fans on yelp. In addition, they allow custom orders and unique grown-up flavors that you won't find anywhere else, including gluten-free varieties. A major weakness is a lack of signage, making it difficult for patrons to locate them at the various markets. In addition, since they can't bake on-site, they often run out of popular flavors and there are long lines. Website: http://www.thecravory.com/ and also http://410degrees.com/
Girard Gourmet Designer Cookies
This competitor started as more than just a cookie store, but in their cookie offerings simply cannot be ignored. The real draw is their unique eye-catching sugar cookies. Not only are they beautiful, they are witty in their attention to current events, such as a Shawn White snowboarder cookie during the Winter Olympics. Pair that with their La Jolla location and the premium price of $4 each makes sense. They feature a sugar 'cookie of the day' in their windows which draws the curious to stop by often and look to see what is new for the day. Website: http://www.funcookies.com/ and http://www.girardgourmet.com
Opportunities.There are quite a few opportunities here for a great business. First, the market is not over-saturated with competition. It an effort to identify competitors in the San Diego County area, I came up with only four unique local cookies specialty stores, and three cookie franchise locations. For a city with over 2 million residents, seven cookie stores spread out over the entire county does not seem to be an overwhelming amount of competition. And of the cookie stores that I have discovered, most have been in business for over 10 years each, showing that they are very stable. Customers want a product that is warm, fresh, moist, soft, flavorful, and attractive, and they are willing to pay for quality. They want a clean facility, easy parking, air conditioning, restrooms, indoor and outdoor seating options, and a pleasant atmosphere with no microwaves and no pan handlers. They are looking for quality and value. They will pay up to $2 per cookie with few grumbles for gourmet quality with excellent visual appeal. The ideal price point seems to be $1.50 each with a deal of "buy 3 get 1 free." The other popular deal was day-old cookies at a price of $5 for 6 cookies.
Threats.The biggest threat is that the location would not prove to be profitable. There are enormous benefits to having a fixed location, but the drawback is that if surrounding demographics are not suitable it can kill a business before they even get off the ground. Other threats include that new competitors can enter the market, that knock-offs could be developed, or that economic conditions become worse than they currently are which would leave people with little or no disposable income for small luxuries like cookies.
The Marketing MixCompetitive intelligence reveals that the ideal company would have the following characteristics for product, price, place, and promotion:
ONE GOOD COOKIE
PRODUCT PRICE PLACE PROMOTION
Moist 1.50 each Good location for walking Good supply
Fresh Buy 3 get one free; day old 6 for $5 Storefront No lines
Good chip ratio Careful with credit cards Good signage Free samples
Good quality ingredients A good deal Good parking Watch production
Buttery Comfortable décor Delivery optional
Good scent Indoor seating Donate to charity
Soft and chewy Outdoor seating Excellent service
Thick 10 am – 7 pm daily
Warm Good music
Healthy options Good cleanliness
Not undercooked Restrooms
5" or larger No pan handlers
Good appearance No microwaves
Firm edges Air conditioning
Good flavor with 12+ choices for variety
Custom orders
Variety of beverages
Creative
Table SEQ Table \* ARABIC 6. Summary of competitive intelligence findings.SummarySecondary market research has been incredibly valuable as it has informed not only the ideal marketing mix but also revealed that the local market is far from saturated and has only a handful of very strong, well established competitors for this industry. By learning from the established companies before the new business is started, we can avoid some of the problems that they currently face.
Quantitative Market ResearchIt is important to conduct primary market research in addition to gathering the secondary market information that is summarized in the previous section. For the following primary market research, a ten question survey was developed and posted on the internet via a free survey software company called Survey Monkey. Responses remain anonymous, but ample room for comments was provided in order to gain more insight into what potential customers would like to see in the product, price, place, and promotion mix.
Sampling Methodology & Sample Size.This first primary research survey will be conducted with non-probability based sampling, with a goal of 50 responses. Without the time or funds to conduct a probability based sampling, the minimum of 50 responses will give a small glimpse into the mind of potential consumers, and can point the way for further more in-depth primary market research.
Target Respondent Profile.The target respondent for the proposed shop location is someone who lives, works, or goes to school in the 92123 or 92124 zip code. Since I work in the 92123 zip code, I will ask people who I come into contact with at work to complete the survey. In addition, however, I will also contact people I know who live in other cities and states, to get their input as well. Responses from people outside that zip code will be considered for general information, and it is possible that they may live, work, or go to school near one of the four local major competitors being analyzed.
An online survey was created in Survey Monkey, the free internet survey software mentioned above. This survey (Appendix B – Survey Questions) asks 10 key questions for this early stage of business development as a single-location cookie shop. The link to this online survey was sent to 14 classmates, and was posted to Facebook with approximately 150 contacts listed there. I work in the 92123 zip code, and also asked co-workers to participate. While this is clearly a convenience sample, and therefore biased, it has been noted that it is a starting point to gather some basic ideas and then refine the questions for a future more in-depth and statistically valid probability sample survey of the target zip code for the store itself.
Questionnaire.A ten question survey was designed with feedback from the professor and classmates. It was refined and posted on 22 August, 2010 (Appendix B – Survey Questions). This type of primary research, survey research, is very important to any business but it is especially helpful to a new business. The purpose of primary research is to "quantify the opportunity which will include determining the total demand, the unmet demand, how competitors are or could satisfy this demand, how your offering is to be distinctive in this market, and your reasonable sales projections at your proposed selling prices" (National University, 2010, p. 14).
Primary Research Analysis of Quantitative and DataAnalysis of the data gathered from the primary research survey provides some important clues as to customer preferences, especially from the comments where participants elaborated on their responses.
Survey Data.Survey responses are displayed below and comments have been summarized. For all responses, the sample size "N" is equal to 45, which means that 45 people completed the survey.
Question 1
The other zip codes are:
Figure SEQ Figure \* ARABIC 3. Survey question 1Question 2
Figure SEQ Figure \* ARABIC 4. Survey question 2Question 3
Figure SEQ Figure \* ARABIC 5. Survey question 3Question 4
Figure SEQ Figure \* ARABIC 6. Survey question 4Question 5
Figure SEQ Figure \* ARABIC 7. Survey question 5Question 6
Figure SEQ Figure \* ARABIC 8. Survey question 6Question 7
Figure SEQ Figure \* ARABIC 9. Survey question 7Question 8
Figure SEQ Figure \* ARABIC 10. Survey question 8Question 9
Figure SEQ Figure \* ARABIC 11. Survey question 9Question 10
Figure SEQ Figure \* ARABIC 12. Survey question 10
Research ConclusionsThe most beneficial result was input on the company name, with "One Good Cookie" coming out significantly ahead of the other choices. In addition, it was discovered that the survey participants would look for a business like this at the mall more frequently than they would look for it in their neighborhood. That result was surprising, and requires additional market research before an actual location is selected for the store itself. For the product, the likely time of purchase indicates that business would be best from lunchtime/afternoon through evening hours, with few customers in the early morning or late at night.
But with N=45 but only 5 of those actually in the target zip code, I would not rely entirely on these survey replies for creating a product marketing plan. Some of the comments provide sound advice, and when added to the secondary research comments from actual local cookie patrons this provides an interesting picture of the market potential. Further study should be made within the targeted neighborhoods to get a larger sample, and a mall area should also be surveyed for comparison to see if it is more supportive of this type of business than a neighborhood shopping strip.
Marketing PlanThe marketing plan includes the company vision, slogan, mission, values, objectives, marketing mix, branding, and advertising strategy.
VisionOne Good Cookie at a Fair Price. TM
SloganOne Good Cookie Deserves Another!TM
Mission StatementTo make unique, creative, high quality cookies and provide them locally at a fair price in a single-store cookie shop.
ValuesCommunity
Quality Ingredients
Fair Prices
Objectives1. Achieve an average sales transaction of $4.50 per customer within the first year.
2. Increase profit by 5% in the second year of business.
The Target CustomerThe target customer for this business is a person who totally loves cookies. The cookie lover is a niche market, as demonstrated in the comments of the primary research survey. Cookie lovers, like myself, tend to take it for granted that everyone else loves cookies as much as they do. While enthusiasm is important for any business, I cannot allow it to blind me to the cold fact that not everyone is in love with cookies. More importantly, among cookie lovers I am seeking those who are not the health nuts looking for 'alternative' cookies. My vision is for good old fashioned high calorie splurge type cookies. Locating these cookie lovers is no simple task, as it is more of a psychographic characteristic than any sort of easily identifiable demographic. Within my primary research, I had one potential customer out of 45 who stated "I'd go anywhere for a cookie" – this is my target customer, the one who will, in theory, go the extra mile in the middle of the night to satisfy that cookie craving. It is said that the rule of 80/20 in business is that 80% of your profits will come from 20% of your customers. The 20% of my customers who will sustain the business are these true cookie lovers.
The Marketing MixBased upon secondary data research, the ideal company would have the following characteristics for product, price, place, and promotion:
ONE GOOD COOKIE
PRODUCT PRICE PLACE PROMOTION
Moist 1.50 each Good location for walking Good supply
Fresh Buy 3 get one free;
Yesterday's @ 6 for $5 Storefront No lines
Good chip ratio Careful with credit cards Good signage Free samples
Good quality ingredients A good deal Good parking Watch production
Buttery Comfortable décor Delivery optional
Good scent Indoor seating Donate to charity
Soft and chewy Outdoor seating Excellent service
Thick 10 am - 7 pm daily
Warm Good music
Healthy options Good cleanliness
Not undercooked Restrooms
5" or larger No pan handlers
Good appearance No microwaves
Firm edges Air conditioning
Good flavor with 12+ choices for variety
Custom orders
Variety of beverages
Creative
Table SEQ Table \* ARABIC 7. Secondary research indicates ideal characteristics for a local cookie company.Product.Cookie lovers want a moist, fresh cookie with ample ingredients. They prefer a 5" diameter or larger size with firm edges and a soft chewy thick warm center, but not undercooked. Scent and appearance should both be attractive, and they want a nice variety of choices for flavor. Creativity is important, plus a variety of beverages and the ability to place custom orders. Most want real butter in their cookies, while some want a healthy alternative too.
Price.Customers want a good deal. They are willing to pay $1.50 per cookie, but not much more than that. Two of the most popular deals were "buy 3 get 1 free" and also 6 cookies that were 1 day old for $5. Credit cards may be more trouble than they are worth – one mistake with those and customers were extremely unhappy and vocal about it.
Place.The location should be accessible to those who walk around, yet have good parking too. Customers prefer a storefront over a farmer's market location, and good signage is an absolute must. The décor should be comfortable rather than spartan, and both indoor and outdoor seating are desired. Indoor areas should be air conditioned and clean, with restrooms for customers. No pan handlers and do not warm things up in the microwave – it's not authentic. Good music is welcomed, and hours of operation should be approximately 10 am – 7 pm every day.
Initial primary market research revealed that a shopping mall is one of the stronger possibilities for a store location, rather than a neighborhood location which was being considered before primary market research was completed. Further primary market research will need to be conducted regarding the ideal location for the business. Location will be critical to generate the appropriate volume of business. Shopping mall patrons will need to be surveyed, and further studies should be done at the neighborhood strip mall locations as a comparative before the location is determined.
Promotion.Be sure to have a good supply of product on hand, and give out samples so they can try before they buy. Don't make people wait in line, be sure to help them promptly. Let them watch the process of products being made – it inspires trust. Delivery is a nice service, but it is optional. Overall, good customer service is very important and customers value a company that donates their product to charity fundraisers and events.
Promotion will use an integrated marketing approach that includes public relations, sales promotion, customer service, and suggestive selling techniques to help keep sales at target levels. Promotion will include a strong branding element, as described in the next section.
BrandingA graphic designer will be hired to create three brand image choices for the logo, website for promotion only (no online sales), packaging, décor, signage, employee attire, and product display designs. They will use feedback that we have from our primary research indicating that neutral colors like off-white, peach, beige, and brown are colors people associate with our concept of fresh, warm, and tasty cookies. We will do market research with those three choices and select the most popular of the three designs to be implemented.
AdvertisingOur primary research indicates that the number one information source for us will be word of mouth, closely followed by signage on location and information on the internet. Signage and internet branding will be designed by a graphic designer and tested with market research before being implemented. Word of mouth will require that we are good about getting the initial word out so people can tell others about our product. To encourage word of mouth we will provide free product samples to local businesses and community organizations in the first 90 days that we are open for business.
Customer Service and Suggestive SellingCustomer service must be of the highest quality in a small business like this, and extensive care will be taken to select the right employees for the job of working with the public and representing the brand. Suggestive selling techniques will be used, and each customer should be offered the 'buy 3 get 1 free' opportunity. In addition, free samples will be provided, to help customers find their favorite flavors and not be disappointed in paying for something they may not like as much as another flavor.
Uncontrollable VariablesThe uncontrollable variables include changes in the economic, legal, and political climate; changes in technology; and socio-cultural changes. Changes in these areas require adaptation of the business itself in order to survive as the world around the business changes. Therefore, it will be important to stay informed on these local environmental factors throughout the lifespan of the business. For example, if there are legal changes in any health permit laws, then it will be critical to keep up to date with these changes.
ConclusionPrimary and secondary research have been insightful in designing a strong marketing plan. The vision is clear, the slogan is sensible, the mission and objectives are achievable, and all of these integrate well with the values of the company. The marketing mix of product, price, place, and promotion were developed based upon these research results. Branding, advertising, customer service, suggestive selling, and uncontrollable variables are each addressed. Overall, the marketing plan is viable and will help create a strong new business.
Financial PlanNarrative IntroductionThe purpose of the plan is to illustrate the revenue and expense situation for starting this business and generating a profit. The financial plan includes financial objectives, revenue forecast, pro forma cash flow analysis, pro forma income analysis, pro forma balance sheet, and estimate of start-up expenses. The financial plan for this business has been developed with information gathered from secondary and primary market research as well as US Economic Census data. Projections have been made with the unit sales method.
Financial Objectives1. Achieve an average sales transaction of $4.50 per customer within the first year.
2. Increase profit by 5% in the second year of business.
Revenue ForecastBased on the secondary data information for Seaport Cookie Company, they had at least $500,000 in sales in one year with a cookie price of $1.50 each (Manta.com, 2010b; yelp.com, 2010b). This is most similar to the pricing and financial model that I wish to follow, so it is being used as a basis for financial projections. Since their most popular deal is 'buy 3 get 1 free' I am going to add in 1 'free' cookie for every 3 sold when making production estimates.
If sales in 12 months are $500,000 divide that by $1.50 and you get 333,333 cookies that were paid for. Since their most popular deal is 'buy 3 get 1 free' we will estimate that they produced 444,444 cookies to generate that much revenue. That is a daily average of 1,218 cookies sold in a year with 365 days. They are open from 10 am to 10 pm for 12 hours each day, so that is an hourly sale rate of about 102 cookies per hour. In order to reach this target, production will have to match that pace, with approximately 2 cookies per minute being produced and given out. That requires heavy foot traffic, which Seaport Village definitely has, so we must look not at neighborhood locations which are low density, but at high density areas like tourist spots, large shopping malls or downtown nightlife areas. Other possibilities would be to lease space in college campus food courts or airports where there is high foot traffic.
Seaport Village Cookie Co. is well established and has been in business for at least 10 years. To be more reasonable in our projections, if we did 50% of their annual business volume in our first year it would be a great year. That's $250,000 in sales in the first year as a new start-up with a rate of 1 cookie per minute being produced and given out, or about 5 dozen per hour.
Our plan, however, calls for 9 hours per day of work time versus their 12 hours per day, which would mean either an increase in number of cookies per hour to achieve the revenue target of $250,000 in sales, or a decrease in target revenue for the first year. That would mean sales of 68 cookies per hour or 1.13 cookies per minute to stay on target with a first year sales revenue of $250,000 before taxes and other expenses. That would be approximately $76 per hour of incoming revenue during open business hours. If business is distributed evenly across all months.
Monthly sales are not normally equal, so ratios were obtained from the US Census Bureau (2009) for Retail and Food Services Sales by Kind of Business for two categories – "Food and Beverage Stores" (NAICS 445) and also "Limited Service Eating Places" (NAICS 7222), and were compared to each other and found to be almost identical. The sales per month was calcualted as a percentage of total annual sales as shown in the following table.
Table SEQ Table \* ARABIC 8. Sales per month as a percentage of total annual salesJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
8% 7% 8% 8% 9% 9% 9% 9% 8% 8% 8% 9%
Source: http://www.census.gov/retail/#mrts Retail and Food Services Sales: Excel (1992-present)
An adoption curve from MBA class lecture notes (Lefkowitz, 2010) is factored in for the first six months of business, to give a more accurate picture of start up revenue. Table 9 below has an adoption curve of 60% of capacity in the first month and grows to 97% capacity in the sixth month of business.
Table SEQ Table \* ARABIC 9. Adoption curve applied to start up revenue projectionJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Full revenue 20,000 17,500 20,000 20,000 22,500 22,500 22,500 22,500 20,000 20,000 20,000 22,500
Adoption curve 60% 66% 73% 80% 88% 97% 100% 100% 100% 100% 100% 100%
Revenue 12,000 11,550 14,520 15,972 19,765 21,862 22,500 22,500 20,000 20,000 20,000 22,500
Pro Forma Cash Flow AnalysisTo calculate gross profit, we need to take the adoption curved revenue and then subtract the cost of goods sold. To find an accurate cost of goods sold, we need to know our cost per cookie and how many cookies were produced. It is important to remember we're offering "buy 3 get 1 free" so for every 3 cookies paid for in revenue, one will be given away for free.
Using a list of ingredients for an average cookie recipe, and current figures from a leading national grocery chain, the cost per cookie was calculated at $.25 each. Note that this is a conservative estimate because we would actually be able to lower the cost per cookie by buying in bulk from wholesalers or club stores instead of retailers.
Table SEQ Table \* ARABIC 10. Cost per Cookie CalculationIngredients (36 cookies)
3 eggs 1.05
1 tsp vanilla extract .06
1 cup butter 2.99
1 cup brown sugar .64
1 cup sugar .32
2.5 cups flour .60
1 tsp cinnamon .21
2 tsp baking soda .03
2 cups oats 1.60
1 pkg secret ingredients 1.50
BATCH TOTAL 9.00
Cost per Cookie .25
Once the cost per cookie is known, we need to figure how many cookies are being made. If we have a revenue of $12,000 at $1.50 per cookie that means that 8,000 cookies were sold, but with our special there is one cookie given for free for every 3 cookies sold, so 8,000 is only 75% of the cookies that were actually made and distributed. Therefore, we will produce and distribute 10,667 cookies in the first month of business. At $.25 each that is a cost of goods sold of $2,667 for that month, which will result in a positive cash flow in the first month of business, as shown in the table below. Table SEQ Table \* ARABIC 11. Simple Pro-Forma Cash Flow Analysis Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Balance 0 4,053 7,954 12,858 18,254 24,930 32,315 39,915 47,515 54,271 61,027 67,783
Revenue (curved) 12,000 11,550 14,520 15,972 19,765 21,862 22,500 22,500 20,000 20,000 20,000 22,500
Cookies "Sold" 8,000 7,700 9,680 10,648 13,177 14,574 15,000 15,000 13,333 13,333 13,333 15,000
Cookies Made 10,667 10,267 12,907 14,197 17,569 19,433 20,000 20,000 17,778 17,778 17,778 20,000
Cost per Cookie 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25
COGS 2,667 2,567 3,227 3,549 4,392 4,858 5,000 5,000 4,444 4,444 4,444 5,000
Gross Profit 9,333 8,983 11,293 12,423 15,373 17,004 17,500 17,500 15,556 15,556 15,556 17,500
O&A ratio 0.44 0.44 0.44 0.44 0.44 0.44 0.44 0.44 0.44 0.44 0.44 0.44
O&A expense 5,280 5,082 6,389 7,028 8,697 9,619 9,900 9,900 8,800 8,800 8,800 9,900
This month's cash 4,053 3,901 4,904 5,395 6,676 7,385 7,600 7,600 6,756 6,756 6,756 7,600
End of month Cash Balance 4,053 7,954 12,858 18,254 24,930 32,315 39,915 47,515 54,271 61,027 67,783 75,383
ASSUMPTIONS
Working capital needed = $0
Break even = Month 1
From MBA class lecture notes, adoption curve percentages are used for revenue smoothing (Lefkowitz, 2010).
Expense ratios are based on the Bakery industry average of 44% for small businesses (Troy, 2008, pg. 48).
Pro Forma Income AnalysisThis business will have positive cash flow from the first month of business. The product is offered at a fair price that will generate a net profit of 34% of revenue with expenses estimated at 44% of revenue based upon bakery industry averages for NAICS codes 311800 (Troy, 2009, pg. 48).
Table SEQ Table \* ARABIC 12. Pro Forma Income Statement Ratio Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL
Revenue (curved) 100 12,000 11,550 14,520 15,972 19,765 21,862 22,500 22,500 20,000 20,000 20,000 22,500 223,269
COGS 22 2,667 2,567 3,227 3,549 4,392 4,858 5,000 5,000 4,444 4,444 4,444 5,000 49,614
Gross Profit 78 9,333 8,983 11,293 12,423 15,373 17,004 17,500 17,500 15,556 15,556 15,556 17,500 173,655
O&A expense 44 5,280 5,082 6,389 7,028 8,697 9,619 9,900 9,900 8,800 8,800 8,800 9,900 98,238
Net Profit 34 4,053 3,901 4,904 5,395 6,676 7,385 7,600 7,600 6,756 6,756 6,756 7,600 75,417
ASSUMPTIONS
From MBA class lecture notes, adoption curve percentages are used for revenue smoothing (Lefkowitz, 2010).
Expense ratios are based on the Bakery industry average of 44% for small businesses (Troy, 2008, pg. 48).
Pro Forma Balance SheetThe owners will need to invest $22,605 to start the business, as shown on the balance sheet below.
Table SEQ Table \* ARABIC 13. Pro Forma Balance SheetASSETS LIABILITIES
Current Assets Current Liabilities Cash 4,105 Accounts Payable 0
Total 4,105 Total 0
Fixed Assets Long Term Liabilities Furniture 900 Debts 0
Fixtures 2000 Kitchen Equipment 4380 Tenant Improvements 2000 Signs 8600 Computer equip. 620 Total 0
Total Liabilities 0
Total 18,500 Net Worth 22,605
Total Assets 22,605 Net Worth + Liabilities 22,605
Schedule of Estimated Start-Up ExpensesStart up expenses for this business will include leasing the space, acquiring pre-owned furniture, pre-owned fixtures, and pre-owned kitchen equipment (including dishes and utensils). Tenant improvements may be needed, as well as signage and business computer equipment. In addition to these fixed capital items, we will need consumables such as restaurant supplies and office supplies. Then there are also services to pay for including printing, licenses, and permits. Pre-owned equipment prices were averaged from current listings on e-bay with knowledge of standard industry prices from several years of work at Williams-Sonoma cooking specialty retailer plus kitchen industry experience.
Furniture ($900).Secondary market research demonstrated that cookie store patrons prefer to have the option to sit inside or outside. Therefore there is a need for indoor and outdoor tables and chairs, and some sort of shade in the form of umbrellas or awnings for the outdoor seating area. Outdoor patio bistro sets for two can be purchased for $100 each through discount retailers. Two would be needed, for a total of $200 for outdoor tables/chairs. Indoor sets to match would be 4 for $100 each for a total of $400 for indoor tables/chairs. Two umbrellas with stands would be needed for outdoors, at $150 each and can be branded with the company logo for better visibility and marketing, so these would total $300.
Fixtures ($2,000).Fixtures that may be needed include ensuring that all plumbing and lighting are in good working order. Estimate $600 for these items. Two bakery cases with lighting and temperature control are also required at $700 each pre-owned.
Kitchen Equipment ($4,380).One pre-owned Vulcan commercial triple oven at $1,200, plus one rolling bake rack at $100 with 20 commercial cookie sheets at $7 each to fill the rack will be required. Two electric hot plates will also be needed at $20 each, plus one well-hidden small microwave in the prep area (not to be used for re-warming anything!) for melting chocolate without burning it at $25. An industrial 3 bay sink with appropriate sanitizer and drainage is also required at $800 (may be included in the leased space, see below)*. A commercial refrigerator with prep counter for $1,215 is required, and a commercial freezer at $500. An additional 4 stainless steel prep surfaces will be needed at $100 each, plus two units of shelving for dishes and utensils at $80 each. And two commercial quality KSM-5 stand mixers will also be required at $300 each.
Tenant Improvements ($2,000).Secondary market research demonstrated that cookie store patrons prefer an air conditioned environment. With a baking operation it is essential to ensure a comfortable climate indoors, so the air system must be in good working order for the comfort of patrons and employees. Ideally, we will not lease a location that requires any improvements to the air system, and therefore will save costs in this area, but realistically we will budget $2,000 for any unforeseen needs.
Signs ($8,600).Signage will be needed for the storefront and for any local directional signs, such as a mall marquee. Signage costs are $1,600 for a standard storefront sign lit with aluminum floodlights. A mall sign lit from within is $7,000.
Business Computer Equipment ($620).Our personal computer is in need of repair at $500, so that it can be used for the business. Internet service would need to be paid for also. Backup memory storage will be needed in case of equipment or software failure at $120. We will avoid a computerized cash register for simplicity and ambience.
Leased Space ($1,200).Local space lease rates, as gathered from craigslist san diego, show that there is a restaurant space of 750 sq. ft. in the college area which includes the three bay sanitation sink for $1,200 per month. *This would save the $800 start up cost estimated for a three bay sink.
Restaurant Supplies ($1,100).Inventory will need to be purchased for the ingredients at an estimate of $500 for starting inventory. Aprons, chef pants, logo jackets and prep towels will be required at $200 per kitchen worker also with 2 workers at the start of business. Paper towels, toilet paper, and cleaning supplies are needed as well, at an estimate of $300 for start up supplies.
Office Supplies ($400).These include pens, paper, ink for the printer, stapler, scissors, scotch tape, and paperclips and other miscellaneous office supplies for a total of $200 at start up. An old-fashioned mechanical cash register will be obtained for $100, and we will need a small safe for cash and change storage at about $100.
Kitchen Dishes ($150).Mixing bowls, prep bowls, and measuring cups will be needed for two kitchen workers at $75 each. The owners have a personal collection of over 300 specialty cookie cutters that will be used for the business.
Kitchen Utensils ($150).These include spoons and scrapers as well as cookie spatulas and rolling pins at approximately $75 per kitchen worker with 2 kitchen workers. The owners will also provide some equipment from their own collection at home.
Printing Services ($625).This will include business cards at approximately $25, preprinted bakery receipt books at $100, and any promotional printing or advertising with a start-up budget of $500.
Licenses & Permits ($630).The executive chef has an up to date ServSafe certificate as well as a current food handler permit. The second kitchen worker will need a food handler permit at $25. State sales tax permit which is free, and local business license for $75 will need to be acquired, as well as a health permit for the location estimated at $500 and a fictitious business name fee of $30. Details were obtained from the County of San Diego website and the "Guide to Opening a New Food Business in San Diego County" (County of San Diego, 2010a; County of San Diego, 2010b).
Table SEQ Table \* ARABIC 14. Start Up ExpensesFixed Capital DISCOUNTED or
PRE-OWNED
Furniture 900
Fixtures 2,000
Kitchen Equipment 4,380
Tenant Improvements 2,000
Signs 8,600
Computer equip. 620
Total Fixed Capital 18,500
Start-Up Expenses Leased space 1,200
Restaurant Supplies 1,100
Office Supplies 400
Kitchen dishes 150
Kitchen utensils 150
Printing 625
Licenses & permits 630
Total start-up expenses 4,105
Capital Needs Analysis Working Capital 0
Fixed Capital 18,500
Start-up expense 4,105
Total Capital Needed 22,605
NOTE Fixed capital needs were reduced with pre-owned items at approx. 50% savings. Plan for Financing the BusinessOur main source of funding would be cash that we earn and set aside for the purpose of starting our own business. It is clean and simple, with little or no debt looming at the beginning of the enterprise to add unnecessary financial pressure to the challenges of starting a business. We can buy most equipment pre-owned or at discount prices.
Narrative ConclusionsThe business itself is financially viable with break even in the first month at 34% of revenue. Start up costs are reasonable provided that the larger items are purchased pre-owned. The owners will need to invest the start up capital of $22,605 in order to start the business with no long term debts. Net profit in the first year will be just over $75,000.
Operations PlanThe plan for operations includes an organization chart and job descriptions, a summary of owner qualifications to run the business, and daily management plans. Also included are details on the legal form of business, insurance, licenses, production, supply chain, and trademarks.
Legal Form of BusinessThe legal form of business is a sole proprietorship. The owner will file schedule C for the tax year when paying their personal income taxes.
Staffing PlanThe staffing plan for the first year is for the owners to do all of the work themselves. Virginia will be the operations manager and the point of contact for customer service, and David will be the Executive Chef. Since they are owners of the business, the business itself will have no employees, no wages or salaries, and no employee tax withholding.
Training and Motivation.Virginia has extensive experience and training in customer service, and David has over 20 years of culinary experience and training. Owners of a business are highly motivated to see their operations succeed.
Organizational Chart.The organizational chart for the first year is extremely simple, with Virginia as the Sole Proprietor and David as the Executive Chef.
Virginia C. Hire Damrauer
Sole Proprietor
David J. Damrauer
Executive Chef
Figure SEQ Figure \* ARABIC 13. Organizational Chart.Risk ManagementVirginia's father works in the insurance industry and he will be consulted to ensure that insurance needs are being met for the business. Insurance will be needed for General Liability, Product Liability, Property, and Business Loss.
Insurance.General liability insurance will cover things like slip and fall incidents. Product liability insurance covers any illness or allergic reactions to the product. Property insurance is to protect against any damage such as vandalism. Business Loss insurance is used when a business is closed due to uncontrollable circumstances like a natural disaster.
ContractualAn attorney will be retained to assist with all contracts, leases, and licenses. These will include any business space leases, insurance contracts, supply contracts, health permits, license agreements, and trademark applications.
Other NeedsOther needs for the business will include research and development of new products, management of the supply chain, and the establishment of production and service procedures.
Research & Development.We plan to start with family recipe cookies, and then monitor their success. More successful products will be analyzed for commonalities, and then new products can be developed based on the known success factors.
Supply Chain.The supply chain will have to be established very clearly. Ingredient and supply orders will be placed once a week with major suppliers who will deliver to the premises once a week.
Production Procedures.Culinary industry standard procedures, such as mise en place, will be used to ensure a clean and safe production environment that is in compliance with all health regulations.
Service Procedures.Customer service will be critical, as word of mouth is an essential good marketing tool for any start-up business.
Implementation PlanA six month implementation plan is outlined in the following table. This is the steps needed to get the business started and open the doors.
Table SEQ Table \* ARABIC 15. Implementation ScheduleItem Task Start Date Resources needed Due Date
Find attorney 1/1/2011 Research the BBB website for good prospects, interview potential candidates 2/1/2011
DBA 1/1/2011 Follow the procedures on County website 5/1/2011
Seller's Permit 1/1/2011 Follow the procedures on State website 5/1/2011
Business License 1/1/2011 Follow the procedures on County website, must have seller's permit first 5/1/2011
Trademarks 5/1/2011 Must have attorney and capital first 6/1/2011
Graphic Artist 1/1/2011 Research the BBB website for good prospects, interview potential candidates 5/1/2011
Insurance 5/1/2011 Must have capital first 6/1/2011
Rent Property 5/1/2011 Must have capital first 6/1/2011
Health Permit 5/1/2011 Follow the procedures on County website 6/1/2011
Procurement of tangible items 5/1/2011 Must have capital first 6/1/2011
CONCLUSION AND STATEMENT OF VIABILITYThe cookie business itself is a very viable venture. Cash flow is positive in the first month, and net profit is 34% of revenue generated. Start up expenses are $22,605 with a net profit in the first year of just over $75,000. Competitive intelligence demonstrates that this local industry is both sustainable and profitable, with two of the top competitors generating over $500,000 in annual revenue and they have been in business for over 15 years each.
Further primary market research will need to be conducted regarding the ideal location for the business. Location will be critical to generate the appropriate volume of business. Shopping mall patrons will need to be surveyed, and further studies should be done at the neighborhood strip mall locations as a comparative before the location is determined.
Operationally, culinary industry standard procedures will be implemented in the kitchen area. An attorney will be hired to help with all contracts and licensing, and a graphic designer will be hired to help with branding and advertising. A six month implementation schedule will be followed beginning January 1, 2011. One Good Cookie is going to be one good business.
REFERENCES
City of San Diego. (2010). Business license company directory. Retrieved from http://www.sandiego.gov/directories/business.shtml
County of San Diego. (2010a). Licenses and Permits. Retrieved from http://sdpublic.sdcounty.ca.gov
County of San Diego. (2010b). Guide to Opening a New Food Business in San Diego County. Retrieved from http://sdpublic.sdcounty.ca.gov
Girard Gourmet. (2010). Fun Cookies. Retrieved from http://www.girardgourmet.com and http://www.funcookies.com
Lefkowitz, H. (2010, August-September). MGT 610C Lecture Notes. La Jolla, CA: National University.
Manta.com (2010a, September). Girard Gourmet. Retrieved from Manta.com
Manta.com (2010b, September). Seaport Cookie Company. Retrieved from Manta.com
Manta.com (2010c, September). Uncle Biff's Killer Cookies. Retrieved from Manta.com
National University. (2010, January 1). Graduate Business Project Handbook. La Jolla, CA: National University.
Seaport Village. (2010). Seaport Cookie Company. Retrieved from http://www.seaportvillage.com
The Cravory. (2010). The Cravory. Retrieved from http://www.thecravory.com and http://410degrees.com
Troy, L. (2008). Almanac of Business and Industrial Financial Ratios. Chicago, IL: CCH.
Uncle Biff's Killer Cookies. (2010). Our Cookies. Retrieved from http://unclebiffskillercookies.com
US Census Bureau. (2000). Demographic Data. Retrieved from http://www.census.gov
US Census Bureau. (2007). Economic Data. Retrieved from http://www.census.gov
Yelp.com (2010a, September). Girard Gourmet. Retrieved from yelp.com
Yelp.com (2010b, September). Seaport Cookie Company. Retrieved from yelp.com
Yelp.com (2010c, September). The Cravory. Retrieved from yelp.com
Yelp.com (2010d, September). Uncle Biff's Killer Cookies. Retrieved from yelp.com
Appendix A – ResumesDavid J. Damrauer – Executive Chef
Specific Interests
Sauces
Health and Nutrition
Completed Classes in Culinary Arts
Intermediate Culinary Skills
Essential Skills for Culinary Arts
Principles of Soup, Stock, & Sauce Prep
Principles of Buffet and Catering
Healthy Lifestyle Cuisine
Food Purchasing
Realities of Nutrition
Relevant Work Experience
Worked as a cook in the US Navy for six years
Seasonal work as a cook at SeaWorld
Virginia C. Hire Damrauer – Operations Manager
Degrees
2010 Master of Business Administration, Marketing emphasis (in progress), National University
2010 Master of Fine Arts, Videogame Production, National University, Honors
2007 Master of Library and Information Science, San Jose State University
1993 Bachelor of Arts , History major, Biology minor, UCSD Revelle College, Regents Scholar
Related Employment
2006-presentLibrary System Administrator, National University Library System
2005-2006Instruction Librarian, National University Library System
2003- 2005 Document Delivery Specialist, National University Library System
2000-2002Administrative/Database Assistant, SDSU Foundation
1999-2000GS-05, Secretary (Office Automation), Internal Revenue Service, Salt Lake City
1998Administrative Assistant, Plant Operations Data Systems, University of Utah
1997Program Representative, Information Technology, UCSD Extension
1993-1996Administrative Assistant, UCSD Extension
Certificates & Training
20097 Habits of Highly Effective Managers, National University Extended Studies
2006 National University Supervisor Development Program
2000 Certificate in Geographic Information Systems, SDSU Extended Studies
1996 Certificate in Meeting Management & Special Events Planning, UCSD Extension
1993 Certificate in Transportation Demand Management, UCSD Extension
Awards & Achievements
2006 "Club 1000" recipient of $1,000 peer award for excellence, UCSD Extension
1988-1989 Freshman Honors Group, UCSD Revelle College
1987 Girl Scout Gold Award (female equivalent of Eagle scout)
Selected Publications
Hire, V. C., & Lockerby, R. A. (2008). Accessibility of psychology and education test kits: Identifying common practices and problems. Journal of Interlibrary Loan, Document Delivery & Electronic Reserve, 18(2), 181-193.
Hire, V. C. (2007). Academic Libraries, Student Expectations, and College Admissions (Master's thesis). Available from ProQuest Dissertations and Theses database.
Selected Presentations & Posters
Stillwell, B. N., Hire, V. C., & Lockerby, R. A. (2010, March). Academic Library in a Virtual World: Library Services to a Growing Online Teacher Education Population. Poster session presented at the Society of Information Technology in Education Conference, San Diego, CA.
Stillwell, B. N., Hire, V. C., & Lockerby, R. A. (2010, March). Advanced Research in Education Tutorial and Quiz. Poster session presented at the Society of Information Technology in Education Conference, San Diego, CA.
Hire, V. C. (2010, March). Academic Library Sharing Session. Conference session led at the SirsiDynix Conference, Tampa, FL.
Hire, V. C. (2008, April). Catalog Search Box for MySpace. Conference session led at the SirsiDynix Conference, Detroit, MI.
Hire, V. C. (2008, January). Academic Libraries, Student Expectations, and College Admissions (Master's thesis). Paper presented at the Hawaii International Conference on Education, Honolulu, HI.
Selected Instruction
Hire, V. C. (2005-present). Library Instruction [Classes or Individuals]. National University, San Diego, CA.
Green, V. C. (2002, May). Intermediate Microsoft Excel for Research Administrators [Hands-On]. Three hour computer workshop developed and presented twice at the Society of Research Administrators Western Region, Tucson, AZ.
Reviewer
Hire, V. C. (2010, April). CIS 620 Capstone presentations. National University, San Diego, CA.
Hire, V. C. (2007, May). Innovation & Technology session proposals. Library Orientation Exchange, San Diego, CA.
Committees
2005-2006 2006 Conference Planning, Association of Mental Health Librarians
2001-2002 Purchase Order Process Improvement, SDSU Foundation
Memberships
1993 UCSD Alumni Association, Lifetime Member
APPENDIX B – SURVEY QUESTIONS*
1. What is your zip code at home?What is your zip code at work and/or at school?
92123 Kearny Mesa
92124 Tierrasanta
Other
(please specify)
Cancel CopyAdd Question HereSplit Page HereEdit QuestionMoveCopyDeleteAdd Question Logic*
2. How do you find out about new stores or where do you get your information?
Internet
I see the Sign or Store Front
Radio
Television
Word of Mouth
Other
(please specify)
Cancel CopyAdd Question HereSplit Page HereEdit QuestionMoveCopyDeleteAdd Question Logic*
3. Would you buy a new local cookie from a store that only sells cookies?
Yes
No
Comments
Cancel CopyAdd Question HereSplit Page HereEdit QuestionMoveCopyDeleteAdd Question Logic*
4. What is a fair price for a freshly baked 3" diameter cookie in a unique flavor that you will not find anywhere else?
Under $1 each
Between $1 and $1.50 each
Between $1.50 and $1.95 each
$2 or more each
Comments
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5. What time of day would you most likely buy a cookie from a store that only sells cookies (mark up to three of the following):
Before work/school
Morning
Lunchtime
Afternoon
After work/school
Evening
Late Night
Other
(please specify)
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6. In which of the following locations would you most likely buy a cookie from a store that only sells cookies?
Near the grocery store
At the mall
On vacation
Downtown
Near the high school
In my neighborhood within walking distance
Other
(please specify)
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7. In your mind, what is a good color for the logo of a cookie store, something that says 'fresh' 'warm' and 'tasty' when you see it?
Pink
Red
Peach
Orange
Green
Blue
Violet
Brown
Other
(please specify)
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8. Which of the following names for a cookie store would be most appealing to you?
Gingerbread: A Cookie Store
Gingerbread: Family Recipe Cookies
San Diego Sugar Cookies
Tierrasanta Cookie Company
Kearny Mesa Cookie Company
One Good Cookie
Damrauer's Cookies
Other
(please specify)
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9. What suggestions would you offer to someone who wants to open a unique cookie store in your area?
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10. Approximately how much do you spend or budget in one week for sweets like cookies, ice cream, chocolate, or candy?
Zero
$5 or less
$5 to $10
$10 to $20
$20 or more
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