Accounting. Costa Rican Sweet Cake Business Plan. Tara HIll, Elizabeth Pittman, and Stephanie Rojas. 1. Executive Summary

Transcription

1 Accounting Costa Rican Sweet Cake Business Plan Tara HIll, Elizabeth Pittman, and Stephanie Rojas 1. Executive Summary Costa Rican Sweet Cake is a Limited Liability Company (LLC) that will be part of the dessert industry. We produce cakes for college students with a reputation for integrity, trust, and quality customer service backed by excellent management concept. We bring happiness with a slide of our Costa Rican delicacy and happiness is the key of success. Our main responsibility is to deliver a product of quality and wholesomeness to every customer that has a need for a unique sweet. By having a reasonable price for the product, our company will satisfy the need of our target market and support our company goals within three months. It is our vision to expand to a more professional and sophisticated business sector and by doing this it will ensure our company s long term goals of reaching a larger customer base outside campus. The introduction of an international product is challenging; however, with the simple homemade recipe it will bring comfort to every customer and make them less skeptical about trying our product. Our business was established in There are three owners: Stephanie Rojas (President and CEO), Tara Hill (Vice President of Finance), and Elizabeth Pittman (Vice President, Project Manager). Our company is producing a sweet cake that is made with a distinctive homemade Costa Rican recipe. Rojas was homesick after coming back from her country Costa Rica; she decided to share her favorite recipe with her colleagues and started a company. Our company is located in LaGrange College campus. Therefore, our main selling location will in the Plaza which is a central location to students, faculty, and staff. Each member will contribute $200 each which will be included in the startup capital. Also, our company will be asking for a loan of $500 which is needed to cover the fixed and variable costs. Costa Rican Sweet Cake is selling each unit for $1. Thirty minutes to produce is required twenty-five units and only one employee is needed for the process. This employee is paid minimum wage labor of $7.50 per hour. The unit material cost is $0.35 and the direct labor cost is $0.15 per unit. Our company is expecting that our sale are going to increase in the second month and decrease in January because part of the campus population will be away during Jan Term. We planned to pay the loan back with interest in a period of six months. This will ensure the sustainability of our company and build credibility with the bank and investors.

2 Our primary research method was a survey that was distributed with a sample of our Costa Rican Sweet Cake. This process was done to find out how the population of LaGrange College would respond to our international product. This survey was a part of our marketing strategy along with a Facebook page and the flyers that we will post in specific locations on campus. 2. Description of Proposed Business Costa Rican Sweet Cake is a small company dedicated to bringing unforgettable sweet moments to customers who want to make a dessert a unique experience. Our company is producing a sweet cake that is made with a distinctive homemade Costa Rican recipe. Our baking and packing process is located in Candler 303, La- Grange College, LaGrange, GA. Therefore, Costa Rican Sweet Cake has the taste, quality, and artistic designs that will provide enjoyable dessert for our faculty and students of LaGrange College. 3. Industry Analysis Costa Rican Sweet Cake is introducing a new creation at the LaGrange College Campus. There is no doubt that we are competing with a variety of similar businesses. We must compete against the ideas that dessert is something that only follows a special dinner. We want every day to be a reason to celebrate and college students love to celebrate! Price may be a factor when competing against the cafeteria due to no out of pocket expense, but the college students, faculty, and staff are willing to pay a dollar for a slice of Costa Rican heaven and rave about a better quality product. We believe they will be equally as willing to spend a little extra for an extraordinary dessert in a warm and friendly setting. Also, Costa Rican Sweet Cake has the challenge to compete against big companies, such as Publix, Kroger s, Wal-Mart, and local bakeries which all ready established loyal customers. The comfort factor also plays an important role in consumer decisions about sweets. We feel that people are more apt to try desserts that are more comforting to them. While making our desert, we mix the ordinary with the exotic, but we will always present our desserts in a comforting manner. 3.1 SWOT Analysis Strengths: No local competitor for a Costa Rican dessert. Portion size. Product is diverse and international. Delivery capabilities

3 Tara HIll, Elizabeth Pittman, and Stephanie Rojas Convenience Quality Short cooking process. Affordable price for college students, faculty, and college organizations. Weaknesses: Limited space for mass production. Marketing and advertising in the community. Lack of staff. Lack of diversification of products. Limited customer base. Opportunities: Growth and expansion. Introduction of a product to different cultures. Sell our recipe Reach local consumers Expand internet possibilities Improve our equipment. Threats Competitors with more resources. Rejecting product because of lack of culture myopia. Slow cash flow. Extinction of family traditions. Economy recession. Costa Rican Sweet Cake is introducing a new creation at the LaGrange College Campus. There is no doubt that we are competing with a variety of similar businesses. We must compete against the ideas that dessert is something that only follows a special dinner. We want every day to be a reason to celebrate and college students love to celebrate! Price may be a factor when competing against the cafeteria due to no out of pocket expense, but the college students, faculty, and staff are willing to pay a dollar for a slice of Costa Rican heaven and rave about a better quality product. We believe they will be equally as willing to spend a little extra for an extraordinary dessert in a warm and friendly setting. Also, Costa Rican Sweet Cake has the challenge to compete against big companies, such as Publix, Kroger s, Wal-Mart, and local bakeries which all ready established loyal customers. The comfort factor also plays an important role in consumer decisions about sweets. We feel that people are more apt to try desserts that are more comforting to them. While making our desert, we mix the ordinary with the exotic, but we will always present our desserts in a comforting manner.

4 4. Mission Statement Costa Rican Sweet Cake believes that our main responsibility is to provide the best service to customers that are considering buying a sweet cake for their special occasions. We are a college based business that has expectations of growth and success. Our unique Costa Rican family recipe will change our customer s vision of regular cakes. We love what we do; therefore, we work each sweet cake in its unique and yummiest way without hurting your wallet. 5. Company Objectives Gain target customers and market our new product on campus. Satisfy the needs of our target market and support our company goals within three months. Expanding our business from a college based business to a more professional business sector. The company s overall objective is to satisfy our market segment that demands higher quality products, and to maintain a steady growth in sales volume that will sustain the company for future years. 6. Management Plan 6.1 Legal Form of Organization Our company, Costa Rican Sweet Cake has decided to enter into a Limited Liability Company. It combines the advantages of both a partnership and corporation. We would not be held personally liable for most events occurring within the company and also our assets will not be held accountable for the company s debts. There is no double taxation coming from this business industry. 6.2 Qualifications of Management Team Our management team consists of three women: Stephanie Rojas, President and CEO Tara Hill, Vice President, Finance Elizabeth Pittman, Vice President, Project Manager Their backgrounds consist of more than 20 years of experience. Our President and CEO have a total of six years of corporate experience. Rojas is an active member of the Honor Council, International Student Organization, and Student International Free Enterprise (SIFE). She has been involved in numerous mediations and presentations. Our president is part of the Tutoring Center for Spanish and accounting; in addition she acquires bilingual capabilities which will not limit

5 communication with our target market. Rojas has organizational, computer, and operational skills that makes her very qualified to help start our business. Our Vice President of Finance has a total of eight years of corporate development with corporations such as accounting, administrative, merger and acquisition and banking experience with other financial institutions. Hill has experience in a banking industry which involves reading and analyzing financial reports and projecting future forecasts for budgets. Her experience of financial reports in Bank of America and customer service benefits our company. Also our Vice President of Finance has leadership skills developed as an active member of the Honor Council and SIFE. Our Project Manager has ample leadership experience being on the executive council of Phi Mu holding the position of Director of New Members. Pittman is President of her pledge class and also a Teacher Assistant for a freshmen cornerstone class about leadership. Our Project Manager has a total of six years of managing that involves recruiting, training, and overseeing finalization of projects. 6.3 Organizational Structure of the Business is divided into three sections: Rojas will handle managing, marketing and overall operation which includes formal meeting, advertising, and research. Hill is responsible for the financial statements, budgeting, and supply management. Pittman will handle production, time lime management, and distribution. Costa Rican Sweet Cake is committed to distributing the work load equally among the employees by using strengths and experience. (See diagram, appendix 10.1) 7. Product and Production Tara HIll, Elizabeth Pittman, and Stephanie Rojas Costa Rican Sweet Cake will be operating on campus in a dorm facility located at La- Grange College. Our three employees are committed to operate in a clean and safe environment. We promise to use high quality ingredients and modern equipment which will make a superior product. Our product will be done in small batches to ensure the finest ingredients and detailed care is taken during the process. Our product will be carefully packaged with the latest technology to ensure wholesomeness. The presentation will depict a high quality product and authenticity of the Costa Rican culture. This product will be marketed as a unique item in college campus atmospheres. Our product will be available all year round for the enjoyable experience. Suppliers, employees, and all who we associate with will be treated with all due respect and acknowledgment. Our costumer will retain high customer base, employee retention, and to maintain our commitments as good corporate citizens. Costa Rican Sweet Cake has only three employees; however, only one employee is needed to bake and prepare the cake. There are three cakes that are forecasted to sell in November. The labor hours for this cake is.5 and the cost per labor hour is $7.50 therefore, the total direct labor cost is $ There are five cakes that are

6 forecasted to sell in December. The labor hours for this cake is.5 and the cost per labor hour is $7.50 therefore, the total direct labor cost is $ There are three cakes that are forecasted to sell in January. The labor hours for this cake is.5 and the cost per labor hour is $7.50 therefore, the total direct labor cost is $ Equipment Blender Mixer Oven Refrigerator 3 Mixing Bowl Non-stick baking pan Measure Cups 1 Tea Spoon 1 Fork Rubber Spatula Plastic Wrap Packaging 7.2 Procedure Making the Cake 6 Eggs Preheat 6 Eggs the oven to 350 degrees Preheat Preheat the oven the to oven 350 to degrees 350 degrees a extract powder milk milk ipping Cream 1 ½ cup Separate 1 ½ of cup flour of six flour egg yolk from the eggs Separate whites Separate in six two egg six yolk egg from yolk the from eggs the whites eggs whites in two in two separate bowls. separate separate bowls. bowls. 1 cup of 1 cup sugar of sugar Whipped the eggs whites until they Whipped are light Whipped and the eggs fluffy. the whites eggs whites until they until are they light are and light fluffy. and fluffy. 1 tea spoon 1 tea spoon of Vanilla of Vanilla extract extract Whipped one egg yolk at a time into Whipped eggs Whipped whites one until egg one yolk egg at yolk a time at a into time eggs into whites eggs whites until until 1 tea spoon 1 all tea is spoon of mixed Baking of evenly. Baking powder powder all is mixed all is mixed evenly. evenly. 1 can of Add 1 can Condensed one of Condensed cup of milk sugar milk to the mixture Add once one Add spoon cup one of full cup sugar at of to sugar the to mixture the mixture once spoon once spoon full at full at a time. a time. a time. 1 can of 1 can Evaporated of Evaporated milk milk Combine one and one half cup of flour Combine with Combine one tea and one one and half one cup half of cup flour of with flour one with tea one tea 1 quart 1 of spoon quart Heavy of of Heavy Whipping baking Whipping powder Cream into Cream a separate spoon mixing spoon of baking bowl. of baking powder powder into a separate into a separate mixing mixing bowl. bowl. Take this mixture and mix it to the egg Take and this Take sugar mixture this mixture and mix and it to mix the it to egg the and egg sugar and sugar mixture, one spoon full at a time. mixture, mixture, one spoon one spoon full at a full time. at a time. Evenly pour mixture into a non-stick Evenly baking Evenly pour pan. mixture pour mixture into a non-stick into a non-stick baking baking pan. pan.

7 1 tea spoon of Vanilla extract 1 tea spoon of Baking powder Whipped one egg yolk at a time into eggs whites until all is mixed evenly. 1 can of Condensed milk Add one cup of sugar to the mixture once spoon full at Tara HIll, Elizabeth Pittman, and Stephanie Rojas a time. 1 can of Evaporated milk Making the Cake continued Combine one and one half cup of flour with one tea 1 quart of Heavy Whipping Cream spoon of baking powder into a separate mixing bowl. Take this mixture and mix it to the egg and sugar 6 Eggs Preheat the oven to 350 degrees mixture, Preheat one spoon the oven full at to a 350 time. degrees ur r f Vanilla extract f Baking powder 1 ½ cup Separate of flour six egg yolk from the Evenly eggs pour Separate whites mixture in six two egg into yolk a non-stick from the baking eggs pan. whites in two separate bowls. separate bowls. 1 cup of sugar Cook in the oven for 12 minutes. Do not open the oven Whipped the eggs whites until during they Whipped the are light first six the and minutes eggs fluffy. whites of cooking until they time. are light and fluffy. 1 tea spoon of Vanilla extract Whipped one egg yolk at a When time into cake Whipped eggs is done whites one poke egg until holes yolk through at a time all into the eggs cake whites with until 1 tea spoon all is of mixed Baking evenly. powder a fork. all is mixed evenly. ensed milk 1 can of Add Condensed one cup of milk sugar to the Making mixture the Add once milks one spoon cup mixture: of full sugar at to the mixture once spoon full at a time. a time. rated milk 1 can of Evaporated milk Combine one can of evaporated milk, one can of la Combine one and one half cup lechera of flour Combine milk, with one one quart tea and of one heavy half whipping cup of flour cream, with and one tea vy Whipping Cream 1 quart of spoon Heavy of Whipping baking powder Cream into one a separate tea spoon mixing of baking vanilla bowl. extract powder in into a blender. a separate mixing bowl. Take this mixture and mix it to the egg Take and this sugar mixture and mix it to the egg and sugar mixture, one spoon full at Blend a time. for 5 mixture, seconds. one Then spoon pour full the at milk a time. mixture evenly over the warm cake. Evenly pour mixture into a non-stick Evenly baking pour pan. mixture into a non-stick baking pan. Let it sit for two hours Cook in the oven for 12 minutes. Do Cook not open in the the oven oven for 12 minutes. Do not open the oven during the first six minutes of cooking during time. the first six minutes of cooking time. When cake is done poke holes through When all cake the cake is done with poke holes through all the cake with a fork. a fork. Decorating Making the milks mixture: Making the milks mixture: Ingredients Combine one can of evaporated Directions milk, Combine one can one of la can of evaporated milk, one can of la 6 Eggs Preheat the oven to 350 degrees Preheat the oven to 350 degrees lechera milk, one quart of heavy whipping lechera cream, milk, one and quart of heavy whipping cream, and 1 container of whipped cream Wrap cake in plastic wrap and refrigerate overnight. ur 1 ½ cup Separate one of flour tea six spoon egg of yolk vanilla from extract the eggs in Separate whites a one blender. tea in six spoon two egg of yolk vanilla from extract the eggs in whites a blender. in two 1 jar of cherries separate bowls. Take the cake separate out of bowls. the refrigerator the next morning and remove plastic wr r Blend for 5 seconds. Then pour the Blend milk mixture for 5 seconds. evenly Then pour the milk mixture evenly Take the cake out of 1 the cup refrigerator of sugar over the warm the next cake. morning and remove Whipped over plastic the the warm wrap. Whipped the eggs whites until they are light and eggs fluffy. cake. whites until they are light and fluffy. f Vanilla extract 1 tea spoon of Vanilla extract Wrap Spread cake a thick in plastic layer of wrap whipping and refrigerate cream overnight. the whole cake. Let it sit for two hours Let it sit for two hours Whipped one egg yolk at a Wrap time into Whipped eggs whites one egg until yolk a time into eggs whites until Spread a thick layer of whipping cream over the whole Take cake. the cake cake in plastic out of wrap the refrigerator and refrigerate the next overnight. morning and remove plastic w f Baking powder 1 tea spoon all is of mixed Baking evenly. powder Spread Take the a thick cake all is out layer mixed of of the evenly. whipping refrigerator cream the over next the morning whole and cake. remove plastic w Place Spread cherries a thick on layer top of of whipping cake as desire. cream over the whole cake. ensed milk 1 can of Add Condensed one cup of milk sugar to the Eat Place mixture and cherries enjoy. Add once one on spoon cup top of of full sugar cake at as to desire. the mixture once spoon full at Eat and enjoy. a time. a time. rated milk 1 can of Evaporated milk Combine one and one half cup of flour Combine with one tea and one half cup of flour with one tea vy Whipping Cream 1 quart of spoon Heavy of Whipping baking powder Cream into a separate spoon mixing of baking bowl. powder into a separate mixing bowl. Take this mixture and mix it to the egg Take and this sugar mixture and mix it to the egg and sugar mixture, one spoon full at a time. mixture, one spoon full at a time.

8 8. Marketing Plan 8.1 Target Market Costa Rican Sweet Cake is has the commitment to create a product that will be affordable and enjoyable to our student body. With the students body our company has different student organizations such as sports teams, sorority, fraternity, or other social groups that will increase our market by all the annual events hold. The second target markets are faculty and staff members. The final target is people in our community that hear about our product. 8.2 Customer Needs and Product Characteristics Costa Rican Sweet Cake realizes that each target market has its unique needs and characteristics. Some students complain that the dessert section of the cafeteria is not of high quality and authenticity. Our home made product will fulfill those needs. 90% of the people who were able to take our survey were positive to buy and order our product. Also, our company understands that students who are part of sororities and fraternities have different events that require a sweet treat with their logo. Also, our second target is a more mature and knowledgeable group of customers that are more open to new desserts. Our company is expecting that these customers will buy the whole pan. (See appendix 10.2 for the complete survey description.) 8.3 Pricing After careful research Costa Rican Sweet Cake estimates that each pan of sweet cake produces twenty-five units. We will sell each unit for $1 so that equals $25 per pan in units. Our company will be sale the whole cake for $15. Our competitors, La Tienda and Publix, offer a similar product; however, they only offer a unit for $2.75 at La Tienda and $6.59 at Publix. Costa Rican Sweet Cake has the advantage of being on located on campus because it will satisfy the needs of customers without having to drive to our competitors. 8.4 Distribution Costa Rican Sweet Cakes will be selling our products directly to the customers. With the Facebook, , or telephone orders we will deliver it to the consumers. When the company expands our goal is to have contracts with retail outlets and local stores. Costa Rican Sweet Cake is very committed to build a close relationship with each client which is why we are want to create our own sales force. 8.5 Promotion Our company decided to have a small marketing campaign. Nowadays, internet is so global that our company took advantage of it to have mostly free marketing. As planned we are going to send out a massive to campus students, faculty

9 members, and staff. Then set up a Facebook page that will be beneficial to know how many customers like it and how many people are talking about it. Also, this page will be used to take orders for future production. Then as planned we are going to give away samples of our product to students, staff, and faculty. Finally, we will distribute flyers on designated locations on campus. We project that by December, the word will be out about our product and this will be part of our free marketing strategy. 9. Financial Plan 9.1 Financial Assumptions Costa Rican Sweet Cake will not have credit sales, only cash because this will assure a quicker cash cycle. Each LLC member of Costa Rican Sweet Cake will contribute $200 to the contributed capital which totals $600. This contribution will be included in the startup capital for the company. In order to guarantee success, our company will be need a $500 loan from the bank which will be needed to cover our fixed and variable cost. Costa Rican Sweet Cake is planning to depreciate the equipment used for 5 years. We are expecting that the loan has a tax rate of 35% and prime of 6%. 9.2 Breakeven Point Assumptions Tara HIll, Elizabeth Pittman, and Stephanie Rojas Sales price: $1 Unit variable cost: This includes materials per unit, napkins, spoons, cupcake liners, and labor per unit. Fixed cost: This is depreciation of equipment, water, electricity, and administrative salary November December January

10 9.3 Sales Forecast Our company forecasts that one cake produces twenty five units. Our selling price is $15 per cake and $1 per unit. Costa Rica Sweet Cake is forecasting a total of 12 cakes which is equivalent to 335 units within three months. This chart explains how many cakes and units are going to be produced in each month. This chart demonstrates the profit made per cake and per units. With this information we are able to base all our financial statements on units produced.

11 Tara HIll, Elizabeth Pittman, and Stephanie Rojas 9.4 Proforma Income Statements Costa Rican Sweet Cake Proforma Income Statement For the month ended November 30, 2011 Costa Rican Sweet Cake Proforma Income Statement For the month ended December 31, 2011 Costa Rican Sweet Cake Proforma Income Statement For the month ended January 31, 2012

12 9.5 Proforma Balance Sheets Costa Rican Sweet Cake Proforma Balance Sheets For the month ended November 30, 2011 Costa Rican Sweet Cake Proforma Balance Sheets For the month ended December 31, 2011

13 Tara HIll, Elizabeth Pittman, and Stephanie Rojas Costa Rican Sweet Cake Proforma Balance Sheets For the month ended January 31, 2012

14 9.6 Proforma Statements of Cash Flows Costa Rican Sweet Cake Proforma Cash Flows For the month ended November 30, 2011 Costa Rican Sweet Cake Proforma Cash Flow For the month ended December 31, 2011

15 Costa Rican Sweet Cake Proforma Cash Flow For the month ended January 31, Net Income Graph Tara HIll, Elizabeth Pittman, and Stephanie Rojas

16 9.8 Financial Ratios

17 Tara HIll, Elizabeth Pittman, and Stephanie Rojas

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19 Tara HIll, Elizabeth Pittman, and Stephanie Rojas 9.9 Amortization Table for Loan 10. Appendix: Customer Survey and Results We cooked a cake and were able to take forty eight samples out of it. We distributed the samples among the LaGrange College students, staff, and faculty along with a short survey.

20 11. Results The results of the survey concluded that 90% of the population was interested in our product. This survey helped us to reach a small representation of our target market which represented the entire college population. With this information we are able to ask how much money they were willing to pay and 74% of the survey takers were willing to pay $1.50 for our product. Most individuals preferred to eat sweets once a day during dinner time. The significant data taken from the survey was the positive rating of our sweet cake of 60%. These inform us that Costa Rican Sweet Cake has future customers in a demanding market 12. References