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Prepared by:Dianne Wingerak
Seshni Naidoo
The DeliDianne Wingerak and Seshni Naidoo
Contents1.0 Introduction....................................................................................................................42.0 Executive Summary.......................................................................................................53.0 Business and Industry Overview...................................................................................7
3.1 Mission.......................................................................................................................7To Provide Great Tasting, Value-priced Food in a Friendly Atmosphere.......................7Goals................................................................................................................................73.2 Competitor Analysis..................................................................................................7
3.2.1 Direct..................................................................................................................73.2.2. Indirect...............................................................................................................7
4.0 The Marketing Plan.......................................................................................................84.1 Target Market............................................................................................................84.2 Product.......................................................................................................................94.3 Price...........................................................................................................................94.4 Place.........................................................................................................................10
4.4.1 Promotion..........................................................................................................104.4.2 Signage..............................................................................................................104.4.3 Grand Opening.............................................................................................104.4.4 Contests.............................................................................................................104.4.5 Festivals............................................................................................................114.4.6 Social Media.....................................................................................................114.4.7 Print Advertisement..........................................................................................114.4.8 Website.............................................................................................................114.4.9 Branding............................................................................................................12
5.0 The Operations Plan.....................................................................................................125.1 Organizational Structure..........................................................................................125.2 Ongoing operations..................................................................................................12
5.2.1 Hours of Operation...........................................................................................125.2.2 Site Plan............................................................................................................135.2.3 Floor Plan..........................................................................................................135.2.4 Suppliers...........................................................................................................135.2.5 Service Providers..............................................................................................145.2.6 Capital Budget..................................................................................................145.2.7 Working Capital, Planning and Management...................................................165.2.7 Operating Expenses..........................................................................................165.2.8 Cost of Food......................................................................................................17
6.0 The Human Resources Plan.........................................................................................176.1 Shareholders.............................................................................................................176.2 Job Descriptions.......................................................................................................18
Weekly Activities would include:...............................................................................186.3 Wages.......................................................................................................................206.4 Work Schedule.........................................................................................................206.5 Strategies..................................................................................................................21
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7.0 Financial Plan..............................................................................................................217.1 Overview..................................................................................................................217.2 Income Statement....................................................................................................22
7.2.1 Sales and Net Income.......................................................................................227.2.2 Contribution Margins........................................................................................227.2.3 Profit Objectives...............................................................................................23
7.3 Analysis...................................................................................................................247.3.1 Risk Analysis....................................................................................................247.3.2 Sensitivity Analysis..........................................................................................25
8.0 Conclusion...................................................................................................................26Appendix 1: Competitor Map...........................................................................................27Appendix 2: Take out Menu/Mail out..............................................................................28Appendix 3: Marketing Budget........................................................................................29Appendix 4: Site Plan.......................................................................................................30Appendix 5: Floor Plan.....................................................................................................31Appendix 6: Capital Costs................................................................................................32Appendix 7: Operating Expenses.....................................................................................33Appendix 8: Gross Profit Margin per category................................................................34Appendix 9: Income Statement.........................................................................................35Appendix 10: Balance Sheet.............................................................................................36Appendix 11: Cash Flow Statement.................................................................................37Appendix 12: CCA Schedules..........................................................................................38Appendix 13: Investment Analysis...................................................................................39Appendix 14: Human Resource (Financial) Data.............................................................40
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The DeliDianne Wingerak and Seshni Naidoo
1.0 Introduction
This business plan will discuss the feasibility of a deli in the south downtown area of
Saskatoon. This plan will examine the operational, marketing and financial plans of the
Deli as well as come to valid conclusions on the future of this project.
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The DeliDianne Wingerak and Seshni Naidoo
2.0 Executive Summary
South Downtown Saskatoon is an up and coming business and tourist area that will
show significant growth in the near future according to the Saskatoon South Downtown
development project.
This business plan will discuss the feasibility of a deli in the south downtown area of
Saskatoon. Building 275 is a 12 story office tower which will be built on 2nd Ave South in
downtown Saskatoon. This business plan discusses the opening of a deli in this tower
and will specialize in gourmet salads and sandwiches, specialty coffees and beverages as
well as provides catering services
The Deli’s mission is to provide great tasting value-priced food in a friendly atmosphere.
The establishment will provide customers with an inviting atmosphere, as well as online
ordering for quick service, where they can get their morning coffees, stop in for lunch
(or takeout) and enjoy their afternoon sweet fixes. The Deli customer experience will
prove to be welcoming, effortless and consistent every time.
The Deli’s target market consists of business people between the ages of 22-65 with an
income of at least 25,000/year. The base of its clientele will come from the office
building in which it is located where approximately 300-500 staff will be employeed.
The deli will also focus on building their core business with the other business people
working in the downtown core, as well as the new River landing complex.
This business will be incorporated and financed with 150,000 dollars equity from two
equal shareholders, Seshni Naidoo and Dianne Wingerak. This will be enough financing
for capital costs as well as one and a half months of operational expenses. A minimum
return on investment of 15% is required for this business to be feasible. This business
plan reflects a internal rate of return of 39.4% with a payback on equity invested.
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The Deli will be a great addition to the south downtown business community by offering
great food and beverages in a friendly environment. The Deli plans on being one of the
“go to” lunch places for the Saskatoon business community.
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3.0 Business and Industry Overview
3.1 Mission
To Provide Great Tasting, Value-priced Food in a Friendly Atmosphere
Goals To earn 15% return on investment
To provide great customer service
3.2 Competitor Analysis
3.2.1 DirectThere are numerous restaurants and cafes in the downtown area, the ones closest to
the Deli include:
Souleio, McDonalds, Jake’s on 21st, Winston's, O’Sheas, Otowa, Pita Pit, 2nd Ave Grill
and various Vietnamese and Asian restaurants.
There are also options for places similar to the Deli that also offer catering; these include
Mulberry’s, Jake’s, Pita Pit, Grandma Lees and Riverbend Plantation
3.2.2. IndirectThere are other types of establishments where people purchase their lunch; these
include convenience stores, grocery stores with pre-packaged meals and fast food
restaurants where people pick up sandwiches with their morning coffee.
Overall, The Deli does not expect customers to choose them every day; they
differentiate themselves with their menu that offers different choices than many of its
competitors. They are not expecting to have their customers having lunch with them
daily; they do however want to be part of the lunch circuit as one of the main choices
for business people. They do expect to build a solid, loyal customer base for coffee in
the morning as people stop in on their way to the office.
See Appendix 1: Competitor Map
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4.0 The Marketing Plan
There are approximately 20,000 business people who work in downtown Saskatoon and
building 275 will have approximately 300-500 people working there, as well as 400
parking spaces that may or may not be used by business people in the building. The Deli
plans to build their core customer based on these individuals.
The Deli believes that the service provided is its largest component of their marketing
strategy. That is why one or both of the owners will be working in the establishment
daily and will ensure exceptional customer service will be provided and that every
customer leaves happy. The service provided is crucial to the business; consistency is
the key and will keep customers coming back.
The Deli will fill a gap in the downtown restaurant industry as there currently are not
many options for this type of food and dining and it will be the only deli operating
downtown.
The Deli plans to use a variety of marketing techniques to promote their establishment.
These include social marketing, print advertisements, grand openings, contests and food
fairs. These will be discussed in greater detail later in this section.
4.1 Target Market
The Deli will appeal to both males and females with income over $25,000, ages
22-65. These individuals will be working in the downtown area of Saskatoon.
The Deli will focus on the people in building 275 to build their core customer
base as this is a captive market, especially with the cold winters in Saskatchewan.
The rest of the customer base will be made up of people who are coming and
going to the businesses represented in the building as well as street traffic.
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The customers that frequent the Deli will value quality products, timely service, healthy choices and variety in an inviting atmosphere.
Customers that the Deli will target for their catering business include primarily corporate business as well as small weddings and parties.
4.2 ProductThe products offered will provide a variety of flavors and textures, as well as
wholesome, fresh and nutritious ingredients. It will provide a healthier alternative to
many of the deep fried fast food choices of the competitors.
The Deli will serve up made to order sandwiches and salads, and fresh soups. Baked
goods will also be made daily on site using recipes created by their own Executive Chef.
The Deli will offer catering for businesses, small weddings and parties and will provide a
selection of meat and cheese platters, sandwich trays and baked goods. The catering
will not only expand the target market, it will also provide good exposure of the quality
products provided.
See appendix 2: Take out Menu/Mail out
4.3 Price The pricing strategy for the Deli is market based. The owners have looked at the
competitors, both direct and indirect and found that the average price of a sandwich or
salad and a drink is approximately 7.00-10.00. They have priced themselves within this
range towards the higher end of this spectrum. The reasoning behind pricing towards
the higher end is reflected in the food and service that they will provide.
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4.4 PlaceThe property to lease is at address 275 2nd Ave South, Saskatoon. The location is
centrally located, within one or two blocks from landmarks such as Midtown Shopping
Plaza, the new River Landing project, Galaxy Cinemas and several office towers, which
offers many opportunities for walk-by customers. The Deli will be located on the ground
floor of building 275, a 12 story office tower which also has a parkade with four hundred
parking stalls. It will have large windows with signage facing the street.
4.4.1 PromotionThe Deli will use a variety of promotion techniques including signage, grand opening,
contests, festivals, social media, print advertising, website and branding.
4.4.2 SignageIt is important for customers to be aware of the Deli therefore there will be large
sandwich boards on 2nd avenue as well as 20th street displaying the logo and the specials
of the day. They will also be a large painted Deli logo on the window which will make
the restaurant easy for customers to identify as well as be able to look into the
restaurant.
4.4.3 Grand OpeningThe grand opening of the Deli will be promoted with invitations which will be delivered
to businesses in building 275, as well as businesses and buildings in a three block radius.
4.4.4 ContestsThere will be a weekly free lunch draw that customers can enter when they go to the
Deli’s Facebook™ page and become a “friend”.
There will also be a monthly free lunch draw using customers’ business cards that will be
in store.
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4.4.5 FestivalsTaste of Saskatchewan is an annual event held in the middle of July on the South
Saskatchewan River. The festival runs for five days and provides Saskatoon businesses
with a venue to display some of their products. This event draws thousands of people
and provides great exposure for local businesses. Because the Deli and this food fair are
both located downtown it is the perfect event to showcase the Deli’s products to their
target customers. The Deli will feature three of their top selling products, including
salads, sandwiches and baked goods.
4.4.6 Social MediaThe Deli will have a Facebook™ page that will be linked to its website. On this page,
customers can enter contests, can see the menu and pictures of the restaurant, as well
as see and contribute to customer testimonials. It is also a good promotion tool for
when they try new menu items as they can broadcast in real time to their customers to
come down and try. This would appeal to the younger age range of their target market
as Facebook™ is part of their daily routine.
4.4.7 Print AdvertisementAs part of their print campaign, the Deli will target the downtown postal codes and do a
take-out menu mail out to this group. These take out menus will also be located in store
and will be distributed with all caterings. The Deli will also place a yellow page ad in the
Saskatoon phone book under both restaurants and catering.
4.4.8 WebsiteThe Deli will have a website that features the full menu as well as daily specials. It will
also have on line ordering capabilities where customers can order and pay for their
meals online and go into the Deli to pick it up. This is a differentiating feature that they
feel sets them apart from their competitors.
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The DeliDianne Wingerak and Seshni Naidoo
4.4.9 BrandingIt is important for the customers to recognize the Deli’s logo, therefore it will be
displayed on aprons, take out cups, napkins and on stickers that are placed on all take-
out orders and caterings.
See Appendix 3: Marketing Budget
5.0 The Operations Plan
5.1 Organizational StructureSeshni Naidoo and Dianne Wingerak will both be salaried employees and will alter
duties each month between the Production Manager and the Operations Manager. This
will ensure both people understand all aspects of the business and the work is divided
equally. The Deli will be an incorporated company with Seshni and Dianne owning an
equal number of shares. Included in the business contract would be a buy-out clause so
if either shareholder wanted to leave the business the business could still survive.
5.2 Ongoing operations
5.2.1 Hours of OperationWeekdays 630-430Saturday 800-430Sunday-closed
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The DeliDianne Wingerak and Seshni Naidoo
5.2.2 Site Plan The Deli will be located in a newly developed office building located on the corner of
2nd avenue and 20th Street. It will be on the ground floor with the main doors facing
2nd avenue but will also have a door inside the office building so customers have two
ways to access The Deli. The location was chosen because it will be the largest high-rise
built in Saskatoon since 1979 and will have a total square footage of 184,000 square feet
on 12 floors. It is the heart of downtown and is within walking distance to many office
complexes as well as two blocks from Meewasin Trail and River landing. There are also
future plans for a phase II which would be another business high-rise at the corner of
20th and First Avenue.
See Appendix 4: Site Plan
5.2.3 Floor PlanThe Deli will be approximately 1500 sq feet of leased space. The layout of the Deli will
accommodate a serving area with large deli coolers to showcase products, a front
production area, and a customer seating area as well as customer washrooms. At the
back there is a production area as well as a staff washroom and office space. The Deli
floor plan is designed so when entering the restaurant the customer is forced to walk by
the display coolers filled with delicious, decadent baked goods and colourful salads and
hearty sandwiches. This will increase sales of impulse buying as customers may
purchase more than what they came in for.
See Appendix 5: Floor Plan
5.2.4 Suppliers
Most of the supplies the Deli will use are perishable and will need to be purchased from
local and chain supermarkets. The Deli will try to use local ingredients and products so
they can support other local businesses. The combination between short shelf life and
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The DeliDianne Wingerak and Seshni Naidoo
the small number of products needed from each supplier the Deli will not have the
purchasing power to have a wholesaler deliver. This will be added work but the
advantage of having the owners purchase the products and ingredients is that it
provides for better quality control and allows them to take advantage of seasonal
ingredients.
Prairie Meats
Prairie meats will supply the Deli with meats and cheeses for sandwiches and deli trays.
Great Canadian Wholesale Club
The Great Canadian Wholesale Club will supply all grocery and miscellaneous items.
Earthbound Bakery
Earthbound bakery will supply specialty breads which are not made on-site.
McQuarrie’s Tea & Coffee Merchants
McQuarrie’s will supply all teas and coffees
5.2.5 Service ProvidersThe services that we will be purchasing include payroll, accounting, and courier services.
5.2.6 Capital BudgetWhen going into a business such as a restaurant there are many fixed costs due to
equipment and leasehold improvements. The Deli will be requiring approximately
116,000 dollars to acquire all equipment as well as leasehold improvements.
See Appendix 6: Capital Costs
Details of capital requirements are as follows:
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The DeliDianne Wingerak and Seshni Naidoo
o 2 deli display cases for displaying baked products and ready-made salads and
sandwiches—this gives customers the opportunity to see products available
o Sandwich prep tables with fridge underneath—this will be at the front of the
store which will offer convenience when preparing sandwiches and salads for
customers
o 2 soup kettles for daily soups—this will ensure soups are kept at appropriate
temperatures throughout the day and will be convenient for service
o 2 Panini presses—The Deli plans to offer these types of sandwiches and they
will be located in the sandwich prep area for convenience
o Espresso and Chiller machines—these are for specialty drinks, hot and cold
o Double convection oven—to be used for preparing freshly baked products as
well as roasting the meats served
o Gas range—for preparation of soups and other products
o Walk in fridge—to ensure proper storage of perishable items
o Upright freezer—for storage of perishable items
o Meat slicer—for preparing meat and cheese
o Scale—for portion control and weighing out for baked goods
o Cash Register—to keep payments in order for customers
o Mixer—for preparation of baked goods
o Computer and printer—for office use, orders and daily accounting
o Blackboards—for displaying menu to customers
o 8 tables and 20 chairs—for customers to dine in and weather permitting to
sit outside
o Dishwasher and sinks—to ensure proper sanitation of dishes
o Pan racks, dishware and bake ware—for preparation and serving of our
products
o Microwave—for warming of food items
o Office equipment—to furnish office
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The DeliDianne Wingerak and Seshni Naidoo
o Leasehold improvements—will ensure the essential components of the
operations as well as details to enhance atmosphere are met
5.2.7 Working Capital, Planning and Management
The Deli will require approximately a month and a half of operating expenses to ensure
that there is sufficient cash on hand to pay bills and wages. This will be approximately
34,000 dollars.
The Deli will have accounts receivable for the catering side of their business. This will
allow customers thirty days to pay.
The Deli will have accounts payable for Prairie Meats, McQuarries and Earthbound
bakery. They will invoice the Deli on a monthly basis with an average of thirty days to
pay suppliers.
Inventory turnover for the Deli will average fourteen days. Perishable items will
turnover more quickly than non perishable items, therefore on average the turnover will
be approximately fourteen days.
5.2.7 Operating Expenses
Total operating expenses for the Deli will be approximately 213,266 dollars annually.
The greatest portion of this would come from wages which would be 148,060 dollars to
cover two managers, one executive chef and one part time employee. The second
largest expense would be the lease of space. Since the Deli is in a prime location of the
downtown area, it would be paying a premium price per square foot of space. This will
be approximately 27.50 dollars per square foot. Utilities, including telephone, internet,
power and gas would be approximately 12,000 dollars annually would be the third
greatest expense.
See Appendix 7: Operating Expenses
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5.2.8 Cost of Food
The cost of goods sold would relate to all food products and beverages that the Deli
serves, as well as a small expense for take-out containers, cutlery and napkins. The Deli
serves an assortment of products and on average the gross profit margin would be 65%.
See Appendix 8: Gross profit margin per category
6.0 The Human Resources Plan
6.1 ShareholdersDianne Wingerak and Seshni Naidoo are equal shareholders of the Deli. They will both
be involved in day to day operations of the business.
Their individual experiences in the food service industry, coupled with their
management experience will be the key factors to the Deli’s success. Seshni and Dianne
have worked together in the past; they share common values and strong work ethics.
The strength of this relationship is a mutual respect for each other’s ideas and
knowledge. This allows them to challenge each other and build synergistically on ideas.
Dianne has over twenty five years of a variety of food service management experience.
She has owned and operated a successful food service establishment in Saskatoon.
Dianne’s strengths are human resource management and organizational skills. She is in
the process of completing a degree in labour relations and human resources through
Athabasca University. She is committed to lifelong learning and thrives in new
experiences and challenges.
Seshni has gained five years experience in food service management after completing a
Bachelor of Science in Nutrition from the University of Saskatchewan in 2004. She is a
registered dietitian with skills in menu planning and human resource management. She
has also worked part time for five years in the banking industry which will bring a strong
insight into the financial side of the operation.
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The DeliDianne Wingerak and Seshni Naidoo
6.2 Job DescriptionsOperations Manager
Operations Manager works 630-300 and is responsible for front of the house and part-
time employee, menu, cleanliness of the front and accounts payable and receivable.
Daily Activities would include:
Opens store
Serves customers
Makes specialty coffees
Stocks deli case
Starts making sandwiches
Weekly Activities would include:
Making menu adjustments to take advantage of seasonal fruits and vegetables
Monthly and Yearly
Bank reconciliations
Accounts payable and receivable
Yearly (in collaboration with production manager) income tax
Production Manager
Production Manager works 800-430 and is responsible for back of the house,
production, procurement, inventory and deposits.
Daily Activities would include:
Helps with service as needed
Fills catering orders
Makes salads
Slices cheeses, meats, pickles etc for sandwich bar
Cashing out and having float ready for the next day
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Weekly Activities would include:
Inventory and ordering
Picking up grocery items that are not delivered
Monthly and Yearly
Inventory
Yearly (in collaboration with operations manager) income tax
Baker/Chef
Baker/Chef works 500-200 and is responsible for production
Baking
Cooking meats
Making soups
Getting salad and sandwich ingredients prepped
Keeping deli case stocked
Preparing catering orders
Preparing pre-ordered lunches
Weekly Activities would include:
Putting away stock
Part time employee
Part time employee works1100-300
Serving customers
Cleaning
Restocking
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6.3 Wages
Below is a table displaying total wages and benefits. The benefits total 17.5 percent
which includes WCB, EI and CPP. Total annual wages for the Deli will be approximately
148,060 dollars.
6.4 Work Schedule
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Production Manager
Benefits (17.5%) 22,058TotalTotal Wages and Benefits 148,060
Production Manager
OperationsManager
The DeliDianne Wingerak and Seshni Naidoo
6.5 StrategiesOne of the main strategies for success that the Deli will have will be the owners working
full time in the operation, as well as on opposite shifts so that there is always on owner
on site. This would ensure that the customer service standards and quality of product
required is consistent.
The Executive Chef will be a qualified journeyman cook and baker with experience in the
industry. A retention strategy The Deli plans to use is to provide a competitive wage as
well as creative flexibility for new menu items and features. This will allow a creative
license to participate in the daily operations of the Deli and be part of the Deli team.
To retain a part time employee may be more challenging as no experience is necessary
and wages are just above the minimum wage. It may be suitable for a mother of school
age children as the hours would be within the time of the school day. Strengths that will
be required for this employee include someone who enjoys a busy, fun atmosphere with
a good work ethic. Attitude will be more important than work experience as they will be
easy to train.
7.0 Financial Plan
7.1 Overview
Total start up costs for the Deli will be $150,000. This will be financed through equity
from both owners at $75,000 each. The $150,000 will cover capital costs and
operational costs for a month and a half.
The five-year financial plan in Appendices 1 to 6 is an integration of financial projections
made according to our marketing plan, operating plan, and human resource plan. The
financial plan consists of:
- Appendix 9: Income Statement
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- Appendix 10: Balance Sheet
- Appendix 11: Cash Flow Statement
- Appendix 12: CCA Schedules
- Appendix 13: Investment Analysis
- Appendix 14: Human Resource (Financial) Data
7.2 Income Statement
7.2.1 Sales and Net IncomeAs shown in Appendix 9, the Deli will generate roughly $19k in first-year and will grow to
roughly $77k in year five. The growth will be approximately 10% in first year, 7% growth
in second year, and 3% growth in the following 3 years. With a new business there will
be growth since customers are checking out the new establishment. Throughout the
first year, there will be marketing events and campaigns to produce growth in year two.
After year two, the expectation is to have established a solid, loyal customer base and
continue to grow with inflation rates.
7.2.2 Contribution MarginsThe critical factors established for the Deli include number of customers per day and
average sale per customer. The following tables show the breakdown of average
customers and average sales per day as well as total daily sales. Assumptions made
include:
o Monday-Friday—will be the same volume of customers daily; the rush being
between 7-9am and 1130-130pm
o Saturday—don’t expect am coffee rush like the weekday but expect to be
busy with lunch from 1130-130 but not as busy as a weekday
o Morning: Approximately 300-500 in office building and around 50 passing by
(20% of this base would be 80 customers)
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Weekdays # Customers Average Bill TOTAL
Morning 80 5.00 400
Lunch 60+20 10.00 800
Afternoon 30 5.00 150
Daily 1350
Saturday # Customers Average Bill TOTAL
Morning 50 5.00 250
Lunch 30 10.00 300
Afternoon 20 5.00 100
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The DeliDianne Wingerak and Seshni Naidoo
o Lunch: anticipate an average of 80 lunches being served per day during the
week which the Deli could comfortably accommodate. This would include
60 sandwiches that are prepared at time of purchase and 20 prepared prior
to lunch rush with online ordering. The Deli anticipates the radius of
customers being greater than the morning and anticipates a 3-4 block radius
in the winter, possibly larger in summer.
o Afternoon: do not expect a large number of customers in the afternoon so
went with a fraction of what morning sales are since coffee sales are typically
highest in the morning.
7.2.3 Profit Objectives
The Deli expects on average two caterings per week for approximately 20 people each
which would provide about 400 dollars in weekly sales. Adding this to the projected
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sales mentioned above, the Deli anticipates approximately 405,600 dollars in annual
sales revenue. Details are listed below.
TOTALS ($)
Weekday Sales 6750Saturday Sales 650
Catering Sales 400
TOTAL Weekly Sales 7800
Annual Sales Revenue 405,600
7.3 Analysis
7.3.1 Risk AnalysisThis chart shows base case, worst case and best case for the Deli based on its two
critical variables. The base case shows that there will be 175 customers per day
spending an average of $7.04 per purchase. This provides for a healthy net present
value as well as internal rate of return. The worst and best case represents a 20%
decrease and 20% increase respectively on these variables. With an operation with such
high fixed costs, there only needs to be a slight variation in the critical factors to make a
large difference in the success or failure of the business.
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Variable Base Case Worst Case Best Case
# Cust/Day 175 140 210
# Days Open 301 301 301
Avg. Purchase Price 7.04 5.63 8.45
TOTAL Revenues 370,832 237,332 533,998
NPV 184,782 negative 706,047
IRR 39.4% non existent 79.9%
The DeliDianne Wingerak and Seshni Naidoo
7.3.2 Sensitivity AnalysisA sensitivity analysis was done based on both critical variables: number of customers
per day and average purchase per customer. The following two tables show this
analysis over five years.
Average number of customers per day
The number of customers anticipated on a daily basis was 175. This table shows that to
break even, there would need to be 158 customers per day in year one with the average
purchase being $7.04.
# Customers/day 158 163 161 159 158
# Days Open 301 301 301 301 301
Avg Purchase/ Customer
7.04 7.22 7.40 7.58 7.77
Average sale per customer
This is another critical factor in the success of the Deli. If there were 175 customers on a
daily basis, the average purchase would need to be $6.37 in order to break even.
# Customers/day 175 193 206 212 219
# Days Open 301 301 301 301 301
Avg Purchase/ Customer
6.37 6.10 5.77 5.69 5.62
8.0 ConclusionBased on the financial plan, the Deli is an attractive investment for the following
reasons:
o Positive cash flow from first year of operation
o IRR of 39.4% on base case
o Payback period of five years
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o New development in the growing downtown Saskatoon area
o Relatively low start-up capital
o Unique product offering and service (online ordering)
o Operated by two experienced owners
However, there are some factors that are influencing the feasibility of this venture,
these include:
o Building 275 is not built yet and is already behind schedule as it was to be
started in 2009
o There are some unknowns including who the clientele would be leasing
space in the building—this could affect the number of customers the Deli
would have, i.e. a call centre has more employees than a law office would
o River Landing is slow to develop, which could reduce the customer base
the Deli would have
o This would be an easy business to duplicate for our competitors, the Deli
would be the only establishment of its type in downtown but with low start
up costs, it could be easy to duplicate
o The online ordering and catering is one way the Deli differentiates itself
from competitors but this too would be easy to duplicate by competitors
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 1: Competitor Map
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 2: Take out Menu/Mail outBrochures – Inside (see accompanying pdf files for full-size versions)
Brochures – Outside
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 3: Marketing Budget
Promotion Tool Cost ($)
Website 500
Festivals 800
Flyer Drop 820
Social Media FREE
Signage-Window and sandwich board
500
Take out Menus/Brand Labels 600
Aprons with Logo 100
Yellow page Advertisement 300
TOTAL 3,620
Appendix 4: Site Plan
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The DeliDianne Wingerak and Seshni Naidoo
(A) - 275 2nd Avenue South, Saskatoon, SK
Appendix 5: Floor Plan
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The DeliDianne Wingerak and Seshni Naidoo
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Bar seating
Windows
Prep Area
Display Cases
Cash Register
fd
Office O ff
Staff Washroom
Customer Washroom
Walk in Fridge
Baker Table
Oven Range
Prep Area
Coffee and Sandwich Prep Area
Sink and Dishwashing Area
The DeliDianne Wingerak and Seshni Naidoo
Appendix 6: Capital Costs
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 7: Operating Expenses
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 8: Gross Profit Margin per category
Products Gross Profit MarginSpecialty Coffee & Tea 150Sandwiches 60Salads 75Dessert/Pastries 70Cheese Platters 50Meat Platters 50
Pickle Trays 50
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 9: Income Statement
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 10: Balance Sheet
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 11: Cash Flow Statement
Appendix 12: CCA Schedules
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 13: Investment Analysis
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The DeliDianne Wingerak and Seshni Naidoo
Appendix 14: Human Resource (Financial) Data
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The DeliDianne Wingerak and Seshni Naidoo
Page 40
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