bus 600 presentation rev 1 cherri edmond 043010
TRANSCRIPT
• Caketail Music Café (CMC) is a start-up bakery and coffee retail establishment based in Palo Alto, California.
• CMC offers beverage, light food and desserts at a moderate price to meet the demand of the middle-to higher-income local market area residents and students.
• CMC is equally owned and managed by two partners.Miss Cherri Chiang (CALMAT MBA)
extensive experience in bakery & beverage, sales & marketing.5 years of experience in food industry (Restaurant/ Bakery & beverage) in Europe, US and Taiwan.
Mr. Edmond Low (CALMAT MBA)experience in the area of operation, management and administration. 8 years of experience in food industry (Bakery/ Banquet/ fast food chain) in US, Malaysia, Australia and Thailand.
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• Financial Considerations•$150k of its own capital, borrow $100k (SBA - 10year loan)•CMC Sales forecast:
• $ 1.04 mil – 1st yr, $1.2 mil – 2nd yr, $1.39 -3rd yr.•CMC should break even by the fourth month•Profits expectation
• ~$319k in 1st yr, $375k 2nd yr, and $452k 3rd yr.
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Mission:• To offer high quality coffee, tea, and pastry
products at a competitive price.
• The inspiration of the current active and healthy social life around the world.
Vision:• The hub of leisure/ entertainment for 61,200 Palo Alto populations.
It will attract Bay Area customers 7.4 million people and soon expand.
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– Introduce main and new product of “Caketail” that gives consumers a new option on a dessert. (create their own favorite dessert)
– Customers are able to create their own favorite dessert by choosing homemade cake base, freshest fruit, and unique sauce.
– We also provide low-calories combination.
– We have open kitchen where customers can watch the chef create their dessert
– Also provide freshly classic desserts and pastry products at all times
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• CMC improve social interaction in Bay Area. CMC features:
– heaven for all live sports entertainment with giant HD TV screen & > 10 TVs – free wi-fi internet service for work/ leisure/ stay connected with world and
people.– free magazines and social business board for the customer– Evening Live performers (soft music and all time favorites music
performance)
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• CMC focuses:
– the middle-upper income markets
• Students
– Stanford University yearly enrollment ~ 30,000 students.
– High visibility/ competitive products/ service - critical to capture segment
• Local Residents
– establish a large regular customer base lead to a healthy, consistent revenue base to ensure stability of the business.
– Palo Alto population is 61,200 (2009). Home of high-tech firms.
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• The location : Palo Alto, California
– 7,000 businesses with 98,000 jobs.
– premier business location in the
Bay Area and Silicon Valley for
a variety of reasons.
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• Target Market Segment Strategy– Personal and expedient customer service
at a competitive price is the key to maintaining
the local market share of this target.
• Market Needs– Coffee and Bakery products are very much
in demand daily. – Much of the day's activity occurs
• Early in the morning 7am to 10am,
• lunch hours 11am to 2pm,
• tea break 3pm to 4pm,
• happy hour 6pm to 11pm.
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• Service Business Analysis– Cool marine climate in Bay Area stimulates
consumption of hot beverages throughout
the year.
– Palo Alto Coffee drinkers are finicky about
beverages quality offered at the numerous
coffee bars across the region.
– CMC will position itself as a place
where customers can enjoy a cup of
delicious coffee with a fresh pastry in
a relaxing environment.
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• Competition and Buying Patterns– No near level of competition on product quality
and customer service as CMC.
– High quality product in a relaxing atmosphere demand• desire a unique, friendly and classy experience. • Caketail will be our new leading product
– Leading competitor sell product through
company-operated retail stores.
– Smaller stores and kiosks sell whole-bean coffees
– Current industry retail sales mix –
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• Unique products and environment combination• A unique food alternative:
– The look, feel and taste of our products.– Value for money reputation– loyal follower of coffee dessert lovers and
connoisseurs.• Our products will be served fresh and ready to consume • Emphasize on the importance of the customer
satisfaction.• Excellent Service /store concept.• Highly entertained environment.
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• Focus to attract new customers, educate those customers and create a loyal base.
• The following marketing strategies will be
employed in the first year of business:– Signage– Media advertising– Flyers– Book coupons– Word of mouth– Alliances– Internet Marketing
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• Sales Strategy– CMC anticipates sales
• $1,040,250 in the first year, • $1,202,493 in the second year, • $1,388,548 in the third year.
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• Success in providing our customers a combination of – delicious food – appealing environment– outstanding customer service.
• Ensure their experience with CMC is enjoyable. • To establish a loyal customer base.• Our coffee and cakes will be cooked throughout
the day, • We need to offer fast and quality service.• Punch cards, meal deals and weekly menu
specials to encourage more customers.
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• Sell the company as well as the product. – comprehensive employee training to offer customers
the finest experience. • Implement a Point-of-Sale (POS) computerized cash
register system via internet. • Strategy focus can be accomplished by:
– Hiring employees who appreciate our unique products.
– Continually assessing the quality of all aspects.– Interacting with our customers personally.– Food choices evaluation and keeping favorites on the
menu/seasonal specials.
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• Strength:– Products of extremely good quality and taste. – Youth oriented brand - huge potential 55 % population is below 24 – Friendly/ customer first service employee.– Understand the social/ consumer needs.– Utilization of new technology as marketing tools
• Weakness:– New brand image/ lacks strength to maintain brand loyalty. – Target market characteristics (youth) may risk market potential.
• Opportunities:– Coffee - fastest growing industry all time ($18billion yearly in US). – Strategic Location - student. – New lifestyle trend - active social life/ entertainment – Healthy lifestyle hang out place – non alchoholic/ educated consumer.
• Threats:– Competition with other coffee cafes - 7 others café. (but no bakery café concept)– New entrants of competitor with similar concept.
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• CMC expects to continue its steady growth in profitability over the next three years of operations.
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• to meet CMC's needs as the business generates cash flow sufficient to support operations
2010 2011 2012Cash Received
Cash from OperationsCash Sales $1,040,250 $1,202,493 $1,388,548 Subtotal Cash from Operations $1,040,250 $1,202,493 $1,388,548
Additional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $1,040,250 $1,202,493 $1,388,548
Expenditures 2010 2011 2012
Expenditures from OperationsCash Spending $575,500 $579,551 $634,147 Bill Payments $91,200 $105,260 $120,673 Subtotal Spent on Operations $666,700 $684,811 $754,820
Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $10,000 $15,000 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $20,000 $20,000 Dividends $0 $0 $0 Subtotal Cash Spent $666,700 $714,811 $789,820
Net Cash Flow $373,550 $487,682 $598,728 Cash Balance $456,883 $944,565 $1,543,293
Cash Flow
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2010 2011 2012Assets
Current AssetsCash $456,883 $944,565 $1,543,293 Other Current Assets $15,000 $15,000 $15,000 Total Current Assets $471,883 $959,565 $1,558,293
Long-term AssetsLong-term Assets $65,000 $85,000 $105,000 Accumulated Depreciation $60,000 $129,000 $208,350 Total Long-term Assets $5,000 ($44,000) ($103,350)Total Assets $476,883 $915,565 $1,454,943
Liabilities and Capital 2010 2011 2012
Current LiabilitiesAccounts Payable $14,574 $15,438 $19,907 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $14,574 $15,438 $19,907
Long-term Liabilities $100,000 $90,000 $75,000 Total Liabilities $114,574 $105,438 $94,907
Paid-in Capital $150,000 $150,000 $150,000 Retained Earnings ($100,000) ($60,000) ($10,000)Earnings $319,098 $375,021 $452,477 Total Capital $357,309 $854,127 $1,463,386 Total Liabilities and Capital $471,883 $959,565 $1,558,293
Net Worth $357,309 $854,127 $1,463,386
Balance Sheet
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• Key ratios– for the retail bakery and coffee shop industry. – Standard Industry Classification
(SIC) Index code,5812, Eating Places.
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Thank you!!