Business Plan Sample: Writing a Plan for your Business

Business Plan Sample: Writing a Plan for your Business

EXECUTIVE SUMMARY

Attahiru Sadiya Ibrahim have been involved with the food industry for several years. Although praised for the quality of many of the items on their menu, Fancy’s Foods have attained a special notoriety for their desserts. After years of requests for their flavored whipped cream toppings, they have decided to pursue marketing these products separately from the restaurants.

Fancy Foods have developed several recipes for flavored whipped cream topping. They include chocolate, raspberry, cinnamon almond, and strawberry. The estimated shelf life of the product is 21 days at refrigeration temperatures and up to six months when frozen.

The Fancy’s intend to market this product in its frozen state in 8 and 12-ounce plastic tubs. They also intend to have the products available in six ounce pressurized cans. Special attention has been given to developing an attractive label that will stress the gourmet/specialty nature of the products.

Table of Contents

Executive Summary

Background and History

Description of Products

Market Description

Competition

Marketing Strategies

Manufacturing Plans

Financial Projections

Contingency Plans

Background and History

Attahiru Sadiya Ibrahim have been involved with the food industry for several years. Although praised for the quality of many of the items on their menu, Fancy’s Foods have attained a special notoriety for their desserts. After years of requests for their flavored whipped cream toppings, they have decided to pursue marketing these products separately from the restaurants.

DESCRIPTION OF PRODUCTS

Fancy Foods have developed several recipes for flavored whipped cream topping. They include chocolate, raspberry, cinnamon almond, and strawberry. The estimated shelf life of the product is 21 days at refrigeration temperatures and up to six months when frozen.

The Fancy’s intend to market this product in its frozen state in 8 and 12-ounce plastic tubs. They also intend to have the products available in six ounce pressurized cans. Special attention has been given to developing an attractive label that will stress the gourmet/specialty nature of the products.

MARKET DESCRIPTION

The flavored whipped toppings that Fancy’s Foods will market will fall into two distinct categories: Dairy products and gourmet/specialty foods. This business plan will look at these two markets separately.

Gourmet/Specialty Products: Kalorama Information LLC, a market research firm based in New York, indicates that the gourmet/specialty foods market will continue a fast paced growth well into the next decade. This $39-billion domestic industry has doubled since 1992, and is expected to continue double-digit growth through 2002. While demographic information indicates that this sector of the industry is strongest in metropolitan areas, there are also growth opportunities in smaller communities. Packaging and point of purchase marketing efforts are especially important in this market, and special attention will be given to these aspects of Whipped Dream.

COMPETITION

There are several brands of whipped topping available in the retail outlets. There are also dry mixes available, but these are not direct competition for Whipped Dream. According to sales figures at grocery outlets, approximately 65% of the national brand prepared whipped topping is sold in frozen tub form, while the remaining 35% is in pressurized can form.

The strengths of these products are their market shares and distribution channels. They are available in virtually any retail grocery outlet, and have gained strong market acceptance. They are also distributed with other refrigerated and frozen dairy products. Finally, they are priced at 800-1050 per 8-ounce tub or 6-ounce pressurized can, an advantage when compared to the suggested retail price of Whipped Dream.

The weakness of these products is in the lack of variety. None of these companies produce or market a flavored topping. Several of the products are also classified as ‘whipped topping’, but are actually not dairy based.

MARKETING STRATEGIES

Distribution of Fancy’s Foods Whipped Dream product will begin in the local Gwagwalada area council. The Fancy’s have an established name and reputation in this area, and product introduction should encounter little resistance.

Special attention has been given to developing an attractive label that will stress the gourmet/specialty nature of the products. A copy of the label is attached in the appendices. James Michaels, a business planning and marketing specialist at the Food and Agricultural Products Research and Technology Center at Kogi State assisted with developing the label, and conducted a focus group study to evaluate the image projected by the label as well as the packaging.

MANUFACTURING PLANS

Fancy’s Foods has a 50-gallon high speed mixer, a pressurized tank in which the product can be gassed with nitrous oxide, and a 10-foot by 10-foot walk-in freezer, enabling them to both produce and store frozen tubs of Whipped Dream. This process is already established on a commercial scale. They are in fact already making Whipped Dream for use in their restaurant, and storing it in the freezer.

Sadiya Ibrahim feel that the specialty nature of the product will lend itself well to the pressurized can, and this was confirmed by the focus group conducted. To pursue that opportunity, Fancy’s Foods has contracted production of the pressurized 6-ounce cans with Farm Fresh, adairy processing firm. A non-competition/non-disclosure agreement is in place, and a copy of this document is included in the appendices.

FINANCIAL PROJECTIONS

The following pages include multi year projections for income, cash flow, balance statement, as well as estimated financial ratios. These projections are for the Whipped Dream division of Fancy’s Foods LLC only. Historical financial information on Fancy’s Foods restaurants is available upon request.

CONTINGENCY PLANS

While careful planning was involved in setting the strategic goals for Whipped Dream, it may be that these goals are not met. The Fancy’s decided to set a zone of acceptability for meeting sales and financial objectives. For both sales and financial objectives, a 10% negative deviation from expected sales and projected returns on assets will be accepted. However, if sales objectives and returns on investment are less than 90% of projections, certain actions will be taken. These actions include:

  1. For unacceptable sales levels during the first year: Fancy’s Foods will combat this problem by doubling in-store promotions of Whipped Dream in Gwagwalada area council. Sadiya will personally arrange and carry out these promotions on weekends at peak shopping times. If sales do not increase within one month of the in-store promotions, Fancy’s Foods will advertise in the weekly shopping circulars of the stores for one month.
  1. For unacceptable sales level: After 6 months of marketing products in these two metropolitan areas, sales will be evaluated. If not meeting acceptable sales levels, Fancy’s Foods will consider contracting with local marketing specialists in Abuja City to carry out the in-store promotions and push the products to the stores. This contractual relationship will be based upon sales commissions (to be determined by the specialists and Fancy’s Foods), thereby providing incentive for the specialists to generate sales of Whipped Dream.
  1. For unacceptable business liquidity: In the event that the business lacks liquidity, Fancy’s Foods will examine their accounts receivable procedures to ensure that payment periods are just and that payments are being received in a timely manner. Also, cash flow projections will be reviewed to determine if unforeseen cash layouts/expenses are undermining the financial health of the enterprise.
  1. For unacceptable returns on equity: If returns on assets and owners’ equity fall below acceptable levels, Fancy’s Foods will first examine and compare the per-unit costs of production and marketing with sales prices. If the margins are too thin, a price increase for products sold in specialty/gourmet shops will be considered. However, because established non-flavored substitutes already exist at lower prices, the lost sales resulting from a price increase may make this option unsuitable for products sold in general food stores. Fancy’s Foods will therefore assess opportunities for minimizing production costs and examine different marketing/distribution alternatives.
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