Agec 495 - Tuesday, December 4, 2007 Business Plan Lynden Butler, Janina Gislason, Chantal Bauche,...

Agec 495 - Tuesday, December 4, 2007

Business PlanBusiness Plan

Lynden Butler, Janina Gislason, Chantal Bauche, Katelyn OlsenLynden Butler, Janina Gislason, Chantal Bauche, Katelyn Olsen


OutlineOutline

IntroductionIntroduction Operations & Human Resource PlanOperations & Human Resource Plan Marketing PlanMarketing Plan Financial PlanFinancial Plan ConclusionConclusion


IntroductionIntroduction

CompanyCompany FoundersFounders Company historyCompany history

ProductProduct

Business Plan FocusBusiness Plan Focus


Operations & Human Operations & Human Resource PlanResource Plan

Organizational StructureOrganizational Structure

Work FlowWork Flow

Cost of Goods SoldCost of Goods Sold

Administration, Marketing & General Administration, Marketing & General ExpensesExpenses


Organizational StructureOrganizational Structure

Organizational structureOrganizational structure PresidentPresident

DutiesDuties InvestorsInvestors AccountantAccountant

DutiesDuties Contract workContract work


Work FlowWork Flow

Products procured

Transported to STPC

Production of N.Y. Sticks

at STPC

Order picked up and

transported to Versa Cold

Sold to Denbar

Distribution to

convenience stores by Denbar


Cost of Goods SoldCost of Goods Sold

Data suppliedData supplied Different per Different per

SKUSKU Cost breakdownCost breakdown

Southwest Chicken Per Unit Master CaseChicken Dark $0.13 $6.03 White $0.16 $7.78 50/50 $0.30 $14.16Spice Ingredients $0.04 $2.02Wooden Sticks $0.00 $0.23Product Label $0.05 $2.21SCC Scan Label $0.01 $0.48Tamper Proof Label $0.01 $0.24Master Case Box $0.07 $3.46Processing Charge $0.22 $10.56Pallet $0.01 $0.38Transport $0.00 $0.18Total $0.71 $33.91


Administrative, Marketing Administrative, Marketing &&

General ExpensesGeneral Expenses

Description $/ trip Company $/ year Hotel $300.00 Travelodge $2,400.00 Meals Breakfast $16.00 $128.00 Lunch $42.00 $336.00 Supper $38.00 $304.00 Total $96.00 $768.00 Flight $500.00 Westjet $4,000.00 Car Rental $270.00 Budjet $2,160.00

Total $10,096.00

Description Amount Accountant $19,000.00 Manager's Salary $36,000.00 Mileage $13,680.00 POS Advertising $3,154.00 Office Rental $3,600.00 Cell Phone $2,400.00 Travel $10,096.00

Total $87,930.00

• Yearly basis

•Total breakdown of costs


Marketing PlanMarketing Plan

Marketing MixMarketing Mix

SWOT AnalysisSWOT Analysis

Market AnalysisMarket Analysis


Marketing MixMarketing Mix

ProductProduct

PricingPricing

PromotionPromotion

PlacePlace

N.Y. StickN.Y. Stick StrengthsStrengths WeaknessesWeaknesses

Human ResourcesHuman Resources - Personal interest in the - Personal interest in the businessbusiness

- Utilizing lots of resources - Utilizing lots of resources from other companiesfrom other companies

- DenBar will eventually - DenBar will eventually

handle all the marketinghandle all the marketing

- Costly to hire out work at - Costly to hire out work at every level of productionevery level of production

- Markets are not easily - Markets are not easily accessed, personal accessed, personal connections can not be connections can not be forged (DenBar becomes forged (DenBar becomes an asset) an asset)

Physical Physical ResourcesResources

- Less start- up costs- Less start- up costs

- No interest payment on - No interest payment on loansloans

- No need for maintenance - No need for maintenance of equipment of equipment

- Still paying for the use of - Still paying for the use of others equipmentothers equipment

- No significant long- term - No significant long- term

assetsassets

Financial Financial ResourcesResources

- Virtual company- Virtual company

- Not a significant amount - Not a significant amount

of liabilitiesof liabilities

- Profitability= fine margin- Profitability= fine margin

- Not a significant amount - Not a significant amount

of assetsof assets

SWOT Analysis


SWOT Analysis Cont’dSWOT Analysis Cont’d

OpportunitiesOpportunities ThreatsThreats

-Expansion into larger Expansion into larger convenience store chainsconvenience store chains-New healthy product with New healthy product with potentialpotential

-Not large knowledge of Not large knowledge of product in market placeproduct in market place-Many competitorsMany competitors


Market AnalysisMarket Analysis• Past Performance

•The Market

•Competition

•Customers

•Product features

•Opportunity


Financial PlanFinancial Plan

Dividend PolicyDividend Policy

Financial Performance AssessmentFinancial Performance Assessment

Risk AnalysisRisk Analysis


Dividend PolicyDividend Policy

Dividends retained vs. PaidDividends retained vs. Paid Best Case ScenarioBest Case Scenario No dividends until eighth yearNo dividends until eighth year


Financial Performance Financial Performance AssessmentAssessment

Cash Flow StatementCash Flow Statement NegativeNegative

Net Income StatementNet Income Statement NPVNPV IRRIRR ERRERR

Base runBase run Best case scenarioBest case scenario


Summary of Financial Summary of Financial ResultsResults

Year 2008 2009 2010 2011 2012Sales 63,072 73,983 86,783 101,796 119,407COGS 51,102 60,942 71,485 83,852 98,359Gross Margin 11,970 13,041 15,297 17,944 21,048Admin. & Marketing Expenses 93,166 95,511 97,988 100,611 103,402Net Income before Taxes -81,196 -82,470 -82,690 -82,667 -82,354 Income Tax 0 0 0 0 0Net Income after Taxes -81,196 -82,470 -82,690 -82,667 -82,354 Net Cash Flow to Equity -79,383 -82,763 -83,045 -83,096 -82,870

Year 2013 2014 2015 2016 2017Sales 140,064 164,295 192,718 226,058 265,167COGS 115,375 135,334 158,747 186,210 218,425Gross Margin 24,690 28,961 33,971 39,848 46,742Admin. & Marketing Expenses 106,384 109,583 113,031 116,766 120,831Net Income before Taxes -81,694 -80,622 -79,060 -76,918 -74,089 Income Tax 0 0 0 0 0Net Income after Taxes -81,694 -80,622 -79,060 -76,918 -74,089 Net Cash Flow to Equity -82,312 -81,360 -79,939 -77,963 -75,829

Net Present Value (NPV) -341,284 Internal Rate of Return on Equity Investment Not computable due to negative returns


Risk AnalysisRisk Analysis

Critical VariablesCritical Variables

Critical Values Base case IRR = 0% Allowable % changeSelling Price $0.90 $1.44 160%Sales Growth 15% 50% 330%Quantity Sold 1460 8200 561%


Risk Analysis (Cont’d)Risk Analysis (Cont’d)

Break- even AnalysisBreak- even Analysis

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

year

$ p

er S

KU base case

cash flow breakeven

net income quantity break even

economic break even


Risk Analysis (Cont’d)Risk Analysis (Cont’d)

Contingency PlanContingency Plan Worst CaseWorst Case Best CaseBest Case

Variable Worst Case Base Case Best CaseSelling Price $0.85 $0.90 $1.12Sales Growth 0% 15% 30%Quantity Sold 732 1460 2920NPV -$389,100 -$341,284 $175,790IRR Negative Negative 46%


ConclusionConclusion

With the assumptions and numbers used in this With the assumptions and numbers used in this business plan, Meat on a Stick can not operate business plan, Meat on a Stick can not operate at a profit. They will have to adjust critical at a profit. They will have to adjust critical variables to realize a profit.variables to realize a profit.


QuestionsQuestions

Date post:	27-Dec-2015
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Agec 495 - Tuesday, December 4, 2007 Business Plan Lynden Butler, Janina Gislason, Chantal Bauche,...

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