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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


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


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.


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.


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.


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


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.


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.


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.


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.


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


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


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:


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


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


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.


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



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


Putting away stock

Part time employee

Part time employee works1100-300

Serving customers

Cleaning

Restocking


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

Production Manager

Benefits (17.5%) 22,058TotalTotal Wages and Benefits 148,060

Production Manager

OperationsManager


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


- 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)

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

650


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


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.

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%


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


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


Appendix 1: Competitor Map


Appendix 2: Take out Menu/Mail outBrochures – Inside (see accompanying pdf files for full-size versions)

Brochures – Outside


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


(A) - 275 2nd Avenue South, Saskatoon, SK

Appendix 5: Floor Plan


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


Appendix 6: Capital Costs


Appendix 7: Operating Expenses


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


Appendix 9: Income Statement


Appendix 10: Balance Sheet


Appendix 11: Cash Flow Statement

Appendix 12: CCA Schedules


Appendix 13: Investment Analysis


Appendix 14: Human Resource (Financial) Data

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