business plan for a start (1)

CITY COLLEGE International Faculty of University of Sheffield

Business Plan for a start-up

December 24, 2012


Executive Summary

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Table of contents

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1. Business Concept 1.1. Description of the Company

In nowadays is a large competition in the service sector and especially in

the food sector with large amount of restaurants, café and creperie. In the

competition environment play important role the service quality and location of

the future café&creperie “Tsarskaya”. In other hand, the location needs to be

convenient for the target market, visitors and future visitors. Also, it is vital

necessary to take into consideration the competitors’ location and cost availability

of location for the “Tsarskaya”. The “Tsarskaya” crepes and café will be located in

New York with biggest Russians population. The location of the crepes &café

restaurant will be located in Bronx district and especially in the shopping area of

Bay Plaza and near also the location of baseball stadium of “Yankees”. The

location was chosen in order to face in front some advantages of the street like

the central location, a large amount of student campuses and entertainment

zone. The main disadvantage of the future location is the close proximity to

competitors. The “Tsarskaya” supposed to rent the place of 500-1000 square

meters and the lease contract will be between $10000-30000/annum

(http://bronx.olx.com/q/restaurant-space-for-lease-in-the-bronx/c-368 ).

1.2. Business Idea

The main concept for this business idea is to provide in New York market

with future expansion to the whole country a different and unique type of crepes

or Russian name”Blini”. Also, the atmosphere and design of the place will play

important role in attraction of potential customers. The place will be designed in

traditional Russian ways with representation of traditional Russian palaces and

buildings. Also, the success of the business idea lies in the specially produced

crepes in traditional Russian recipes. Also, “Tsarskaya” will offer a variety of

Russian tea and coffee served in traditional ways. In the beginning, the range of

products and volume of production would be small but later conquest of the

consumer could give opportunity to company to be expanded. In addition, the

company will develop also type of service as ordering products on the Internet,

the delivery of products to home or office. The “Tsarskaya” crepes and café is

planning to provide the following:

1) Russian baking pancakes and fritters.

2) Provision of services "takeaway"

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http://bronx.olx.com/q/restaurant-space-for-lease-in-the-bronx/c-368

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3) The range of cafes which include hot and cold appetizers, main breakfast and

lunch dishes, the wine list will be provided in full.

4) Organization of celebrations, banquets and anniversaries.

1.3. Vision and Mission Statement.

Vision:

Always, in traditional ways at any time of the year - only fresh, high-quality products!

Mission:

The “Tsarskaya” has the objectives to become one of the main players in the

service market of NY by offering new segment of products such as traditional

Russian crepes and pancakes. Through differentiation the companies see the

achievement of objectives achievable.

2. Products and Services. “Tsarskaya” company is engaged to manufacture and sale traditional

Russian pancakes, crepes products and related products. Products are always

created in high quality and fresh. The pancakes and crepes will be manufactured

in traditional ways without yeast dough implementation. Pancakes and crepes

was always the Russian traditional dish that create advantage in New York market

to find Russian customers and not only. In the manufacture of pancakes and

related products will not be used preservatives and concentrates. The company

will offer the following important features comparing with the customers:

• High quality

• Traditional recipe

• Freshness

• Excellent taste

• Low-middle prices

The main products of the “Tsarskaya” will be the most successful in Ex-Soviet

countries recipes of crepes which are: “Crepes Tsarskiye”, “Russian crepes” and

“Ukrainian Crepes”.

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3. Market Analysis Summary. 3.1. Market Situation analysis and opportunities.

Market analysis plays important role in the process of the preparation of

business plan. The restaurant industry growth faster than any other service

industry in United States by offering jobs to more than 12 million employees with

national average rate of 1.85 every year increase in jobs. The statistical

information from National Restaurant association of 2011 show, that the

restaurant industry sales achieved the amount of $610 billion dollars (National

restaurant Association, 2011). Also, more than 35% or U.S. restaurants are locally

owned with simple management form or owned by small restaurant chains.

According to the National restaurant association, the 80% of American citizens

enjoy their meal at locally owned restaurants and café. The people last time

became busier and demographically changes in a worldwide scale. For example,

the globalization is one of the factors which affect the purchasing patterns and

behavior and the second more and more women are engaged to work or prefer

the career and their job. All these factors show that people more will depend in

the future from restaurants. Also, the main trend of nowadays population is the

healthy and traditional food.

3.2 Competitive Analysis.

Since the “Tsarskaya” crepes café will be located in the most populated

districts of New York the downside to this area is the proximity of competitors that

offering similar services and products. In this location there are the main three

competitors of “Tsarskaya” which are the Crêpe du Nord, Crêperie NYC and Vive

la Crepe. Below is presented the table of the competitive factors comparing with

competitors.

Factors Our Business Competitors

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Tsarskaya Crêpe du Nord Crêperie NYC Vive la Crêpe

Quality Fresh, tasty product.

Always warm.

The food is not fresh and of high quality.

Pretty mediocre Always delicious crepes.

Location Bronx district, High traffic of citizens.

Out of center, not busy place.

Very busy place, in the center.

In the center, directly to the bus stop.

Price level Low – middle class prices

High prices Above average. Average

Product exclusivity

Russian traditional crepe's.

Not common product in the market.

Common product

Common product.

Common product.

Variety 10-15 species. Small variety of products

Varied menu Same variety with our business

Reputation of the firm

New firm. Doubtful Known creperie, repeat customers.

Known creperie, constant customers.

Generally, the “Tsarskaya” has a low competition from the competitors

due to the differentiation of products. The most of the restaurants and café in the

area are focusing mostly in lunch time dishes and providing the simple recipes of

crepes. Also, the “Tsarskaya” business concept focuses mainly in ethnic cuisine

and drinks. The others competitors of company is the indirect competitors or local

coffee shops which have an disadvantage in front “Tsarskaya” such as the

atmosphere of the stores that does not make very comfortable place to enjoy the

meal. Also, “Tsarskaya” has a competitive advantage such as extensive menu

with traditional Russian pancakes and crepes with innovative and exciting food,

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focusing in service quality and uniqueness with elegant Russian traditional design

of place.

3.3. SWOT Analysis.

Since the external and Internal environment all the time changing and the

company is under the influence at the current market, it is necessary to identify

the the strengths and opportunities for the “Tsarskaya” in the changing

environment. SWOT analysis helps a new business to understand and analyze the

strengths and weaknesses and the opportunities and threats of the

environment.“Tsarskaya” Creperie SWOT analysis is presented below:

Internal Environment- Strengths

Good geographical location

In the center, near metro station

Affordable prices

Innovative product ( Traditional Russian crepes and tea)

Modern equipment

High quality products

Individual service for customer needs

Internal Environment- Weaknesses

Lack of managerial experience

New business, no experience

Many competitors

External Environment- Opportunities

Unique experience at our store

Friendly environment

Not common product

Prompt and efficient customer service

External Environment- Threats

Unfavorable demographic changes

inflation

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reducing the overall level of purchasing power

Economic crisis

3.4. Market Positioning

“Tsarskaya” creperie will be positioned as unique product in traditional

methods manufactured and one of the most important differentiating factors will

be the affordable price and variety of products. Below is represented the “Market

Positioning map” and the “Tsarskaya” position in the current market.

4. Marketing Plan and Sales forecast.

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4.1. Market Strategy.

The main goal of the”Tsarskaya” creperie is projected market penetration and

successive expansion of the market share. The main strategy established by the

company is to provide products in high quality with lower than competitors prices

with future expansion of the variety of products. Also, the “Tsarskaya” creperie

take into consideration the fluctuations in demand by stimulating the prices by

creating a strong brand image in the market. In order to succeed the established

strategies each company need to develop marketing plan.

4.2. Marketing Plan.

Product

The "Tsarskaya" will provide a large variety of Russian traditional crepes or

Russian well known name for crepes "blini". For Russians the "blini" is a

traditional food with large history which make to "Tsarskaya" to succeed in the

market through differentiation from other creperie. The company will provide also

a variety of non-traditional tea with different forest herbages. The crepes will be

made from wheat, buckwheat and other grains which are the most common in

Russia. The traditional recipes of crepes include also the sauce or the crepes will

be spread with butter, sour cream and caviar which are very popular ingredient

for Russians. Historical heredity of Russian crepes obliges "Tsarskaya" creperie to

honor Russian traditions by offering traditional crepes and other dishes. The main

characters of creperie menu - pancakes, crepes, pancakes pies, fritters. A total

amount of products in " Tsarskaya" creperie menu is more than 80 menu items.

The menu is not limited only with pancakes and crepes, the breakfast customers

will enjoy also for example the same scrambled eggs served on thin pancakes.

Place

Like any other restaurant the location play important role for the creperie. The

creperies are the common and favored food of students and busy people that

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want to enjoy fast healthy food. For that reasons the best location for the creperie

usually the shopping malls, university campuses, the streets with large people

traffic and movie theatres. For the "Tsarskaya" creperie was chosen the shopping

area of Bronx district in New York. The Bay Plaza shopping center is one of the

biggest shopping centers in New York which make location of the creperie

affordable and comfortable for the customers. Also, in the area of Bronx situated

several Universities which make the location of "Tsarskaya" attractive and give an

advantage to have high demand through the year.

Promotion

Due to the new business, the "Tsarskaya" creperie will need to promote carefully

the business in order to cover the customers' needs and desires. At the beginning

the company plans to promote through public relations and media tools like

magazines, printed leaflets, outdoor billboards at the bus and subway station in

the Bronx area and radio. The printed leaflets will be shared and delivered to the

local businesses and residents' home. Due to the increased efficiency and usage

of social network "Tsarskaya" promotion campaign will be set up in social media

tools such as Facebook and Twitter. The magazines in the service and food

industry are the common way of promotion with high reputation for customers.

The "Tsarskaya" creperie had to be published through the famous U.S. cuisine and

food magazines such as Bon Appétit, Fine Cooking, Food & Wine, Gastronomica,

Gourmet and Taste of Home.

Promotion and communication mix elements planning per month.

Advertising Price, USD. Quantity Cost per month, USD

publication per year

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http://en.wikipedia.org/wiki/Taste_of_Home

http://en.wikipedia.org/wiki/Gourmet_(magazine)

http://en.wikipedia.org/wiki/Gastronomica

http://en.wikipedia.org/wiki/Food_%26_Wine

http://en.wikipedia.org/wiki/Fine_Cooking

http://en.wikipedia.org/wiki/Bon_App%C3%A9tit

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Radio 50 25 1.250 4 months

Magazines, newspaper

200 10 2.000 2 months

Brochures 0.15 per brochure

2000 300 5 months

Transport stations

300 4 700 3 months

Total Cost $ 4.250

Price

For the price analysis the "Tsarskaya" creperie used the pricing strategy

"cost plus profit". The price is one of the most important marketing mix elements

due to the company's profits and development depends on price and operational

expenses. The company by establishing price needs to take into consideration the

demand for the products, the operational costs and the competitors' prices. The

price for the crepes will have price variation between $3, 50 -$ 10 depends of

ingredients and extra components ordered by customers. For the drinks the

company will establish the price between $2-$4 depends on drink.

4.3. Target Market and Customer Analysis.

In order to succeed every new business need to understand and identify

the potential customers and to cover their needs and preferences. The

"Tsarskaya" creperie mostly target the New York Ex-Soviet ethnic group and the

local residents of Bronx district. But, for sure the other customers will find the

products useful and unexposed due to traditional ethnic cuisine from another

country. "Tsarskaya" creperie also will focuses on students from the near

Universities and sport- fans of baseball team "Yankees" due to the near location of

their stadium. The demographic structure of customers will vary from 5-50 years

old and especially young generation and business people due to their busy daily

program.

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4.4. Sales Forecast

Product 2012 ($) 2013 ($) 2014($) 2015($)

Drinks and other Beverages

91800 105557 112140 121200

Tsarskye crepes

74520 82800 85700 91116

Ukrainian crepes 54390 59450 65790 70879

Russian crepes

36680 41290 45670 48670

Other crepes

25570 28900 31290 35600

5. Operations Plan 5.1. Operations description.

One of the keys of success is the right operations management. The main

processes and operations of the "tsarskaya" creperie are the service and sales of

the products to the customers in the store and outside the store by delivering the

products. Also, the traditional cooking process is very complicated and need

experienced chef and equipment. For the cuisine the company will order a variety

of crepes "TEFAL" machines in order to make easier and fast preparation of

crepes. The cooking time of crepes vary from 1.5 to 3 minutes depends on recipe

and the amount of ingredients. The crepes and cafe drinks will be offered to

customers during the whole operation hours of "Tsarskaya" creperie with

elasticity program during the week. The production and operational process of

preparation and service of pancakes and crepes would consist of the following

actions operation:

1) Ordering process

2) Cash

3) Quality control of ready crepes

4) Production and preparation of pancakes and crepes

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5) Execution and delivery order

5.2. Facilities

The interior design of "tsarskaya" creperie will be created in traditional

Russian styles and ways. The main concept of the interior is to represent the

Russian interior design during the times of Russian monarchy. The interior will

have a simple, cozy and quiet design. The service room will be more than 200

square meters. The tables and other furniture will be made from valuable wood

and the main part of furniture will be handmade with Russian traditional symbols.

Also, the place will be decorated with old items such as Russian dolls "Matrioshka"

and near the windows will be situated the Russian traditional heated metal

container or "Samovar". All the walls of "Tsarskaya" creperie will be exhibited with

a collection of pictures of the copies of Russian painters. (See the photo examples

of interior design)

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6. The Management and Organizational Structure of the "Tsarskaya" creperie.

Every business and the restaurant or creperie is no exception need a host

of business and employees with management and service skills. The "Tsarskaya"

creperie in the beginning stage will have the form of Limited Liability Company.

The company will be operated and managed by director who also is the owner of

the company. The director will have the legal entity to hire and get out the

employees according to the U.S. Labor laws and will participate in the labor force,

punishments and applies incentives. For the administrator and accountant

positions will be established some limitations of recruitment such as high

education, work experience more than 3 years and communication skills. The

administrator will be responsible for the operation process, the provision of raw

materials and staff negotiations. The accounant will be responsible for the

financial operations of company with monthly reporting to the owner. Also, the

accountant will monitor the cash flows and inventory cash flows. The other staff

of "Tsarskaya" creperie will be presented with following staff:

1Cashier

1 Bartender

6Waiter

2 Cleaning staff

1 Dishwasher

Below is presented the Organizational structure of "Tsarskaya" creperie.

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7. Financial PlanStartup cost

Starts up costs are the costs associated with the creation of a company. Some costs obtained for the creation of "Tsarskaya" creperie is showed below.

Star up cost in USD:

Start up costs:

Rent costs 10.000

Legal services (Lawyer, employment contract) 700

Licenses 50

Taxes ( administration taxes and other taxes) 300

Equipment 50.000

Deposit for utilities 70

Leasehold Improvement 12.000

Salaries 8.000

Initial inventory 11.000

Advertising and promotion 10.250

Other expenses 5.000

Total Startup Cost 107.370

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Income Statement in $

Years 2012 2013 2014 2015

Sales 282.960 317.997 340.770 367.465

COS 30.000 34.000 38.000 40.000

Gross Profit 252.960 283.997 302.770 327.465

Expenses

Salaries 8.000 11.000 14.000 16.000

Salary commission 2.700 3.200 3.800 4.200

Director salary with commission 2.000 2.000 2.000 2.000

Phone 150 200 170 250

Water, electricity and heating 2000 2.500 2.300 2.900

Rent 50.000 50.000 50.000 50.000

Safety 1.000 1.000 1.000 1.000

Accountant 800 800 800 800

Maintenance 1.200 1.200 1.200 1.200

Advertising 4.250 4.250 4.250 4.250

Other expenses 1.500 1.500 1.500 1.500

Total expenses 73.465 77.650 81.000 84.100

Net Profit before tax 179.495 206.347 221.770 243.365

Tax 15% 26.924,25 30.952,05 33.265,5 36.504,75

Net profit after tax 152.570,75 175.394,95 188.504.5 206.860,25

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Break Even point

It is the point where the revenue or sales of a company equal to total costs. That is, the point where the company has neither profit nor loss. To find the neutral must distinguish between variable and fixed costs of our business. As, we can see in the below statement the breakeven point of "Tsarskaya" creperie will occur in second year of operation.

Cash Flow in $

"Tsarskaya" creperie cash flow yearly 2012 2013 2014 2015

Cash Inflows

Owner Investment 101.370

Beginning Balance 88.635,75 104.730,7 100.000

Cash Receipts 282.960 317.997 340.770 367.465

Total Cash Inflows 384.330 406.632,75 445.500,7 467.465

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Cash Outflows

Salaries 8.000 11.000 14.000 16.000

Safety 1.000 1000 1000 1000

Water, electronic and heating 2.000 2.500 2.300 2.900

Advertising 4.250 4.250 4.250 4.250

Accountant 800 800 800 800

Rent 50.000 50.000 50.000 50.000

Maintenance 1.200 1.200 1.200 1.200

Phone 150 200 170 250

Earning Tax 26.924,25 30.952,05 33.265,5 36.504,75

Start up Expenses 101.370 - - -

Total Cash Outflows 195.694.25 101.902,05 106.940,5 112.904,75

Cash at the end 188.635,75 304.730,7 338.560,2 354.560,25

2012 2013 2014 2015

Withdrawals 100.000 200.000 238.560,2 -

* Cash flow is the flow of income and expenditure of money in an account for a period of time. Activities such as funding and donation can be set up to cause cash inflows, while spending unnecessary investments and cash outflows.

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8. Risk Analysis Every business in the first stages can face in front the challenges and

failures or in business words the business risks. The "Tsarskaya" creperie due to

the new venture at the beginning could face risks associated with sales and

delivery service quality. After the economic crisis in 2008 the economic world are

in the non-steady that make the new venture risky. Usually the new ventures

need to take into consideration the economic and political factors of each country.

Below in the market analysis was defined that the U.S. market has slow growth

that reduce the risks for the "Tsarskaya" creperie. Also, the companies usually at

the first stages face in front the risks associated with low demand. But the most of

surveys show that the new ventures failure due to the not detailed market

research, underestimate competition and the financial plan is not achievable.

9. Conclusion and Further Suggestions

In conclusion, the current situation in the service market obliges the new

ventured to develop carefully the business concept and plan in order to succeed

in the competitive market. The business plan for "Tsarskaya" creperie was

developed in order to launch new business in the U.S. market and especially in

the New York. The market situation analysis show thta the market provide a large

amount of advantages and opportunities for the creperie which will provide new

differential product such as traditional Russian crepes and pancakes. The creperie

all the time was popular place for people who enjoy their breakfast or lunch by

eating healthy fast food. The main strategies of the creperie "Tsarskaya" is the

expansion in the market with later increasing of market share. The low prices

comparing with competitors make the objectives achievable. The creperie

"Tsarskaya" has a variety of advantages such as the new business concept with

new ideas and differentiation.

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business plan for a start (1)

Documents

tsarskaya crepes

future location

traditional russian

competitors location

traditional russian

central location

tsarskaya com

traditional russian