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Modern Donuts B USINESS P LAN

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P RESENTED BY : Tori Hislop Angela Ko Zara Nanji Selina Wong

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A GENDA Executive Summary Introduction Marketing Plan Human Resources Plan Operations Plan Financial Plan Conclusion

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E XECUTIVE S UMMARY What we are asking for: $250K operating loan Why we need it: To establish the 1 st gourmet doughnut cafe in Saskatoon Site renovations, Equipment, and Marketing Proven Business: Financial profitable Calgary location Anticipated IRR from our Saskatoon Location:57%

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M ISSION Saskatoon To be the first high quality gourmet doughnut cafe located in Saskatoon. By providing fresh tantalizing flavours of doughnut for all occasions.

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V ISION Jelly Modern Doughnuts is the ultimate quality experience. Offering delicious, gourmet doughnuts made fresh throughout the day for everyone in Saskatoon who wants to indulge in a quality experience.

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C OMPETITIVE A DVANTAGE MOVE OVER CUPCAKE! Modern take on an old classic Fresh, healthy, organic 20 (+) unique flavors of doughnuts including our new Maple Bacon Doughnut Commitment to the community through daily doughnut donations

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M ARKETING P LAN M ARKETING M IX Product: Handcrafted Gourmet Donuts Baked fresh daily Eco-friendly packaging Organic & high quality local Ingredients Catering & Delivery Offer wide array of coffee, tea, espresso to compliment your doughnut choice Price of quality: $2.25/Doughnut $24.95/Dozen

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M ARKETING P LAN S TORE L OCATION Location: 5B - 1501 - 8th. St. East, Saskatoon, SK List Price: $185,000 Size: 1,620 sq ft Surrounding Amenities Safeway Boston Pizza Original Joes Bookstore

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M ARKETING P LAN Segmentation We will cater to health-conscious dessert loving individuals Target group Ranging from children to adults Moderate to high income individuals and families Positioning We provide the total quality experience in indulgence.

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M ARKETING P LAN M ARKETING M IX Promotion: Create hype & awareness during first year Grand Opening: Media Coverage: Global News Saskatoon, CBC Radio, Wire 96.3FM Giveaway donuts Promotional vouchers & Free Samples Groupon advertising Local events Folk festival Taste of Saskatoon

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M ARKETING P LAN Strengths -Premium gourmet products - No direct competitors Weaknesses -Low brand awareness -Choice of suppliers is limited -New to the community Opportunities -First-mover advantage -Booming economy and increased disposable income -Unsaturated market of Saskatoon Threats -Entrance of rivals -Regulations on food and safety

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M ARKETING P LAN C OMPETITIVE A NALYSIS CompetitorProductPrice Smaller Alternatives Cupcake CornerCupcakes 3.00/each 27/dozen 1.75/each 16.00/dozen Cupcake ConspiracyCupcakes 2.50/each 25/dozen N/A only available for special events/orders Tim HortonsDoughnuts0.79 N/A no smaller alternatives JELLY MODERN DOUGHNUTS Doughnuts2.25/each 24.95/dozen 1.95/each 24.95/16

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M ARKETING P LAN C OMPETITIVE A NALYSIS

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H UMAN R ESOURCE P LAN Motivational Incentives Employee of the Month Program Employee discounts Employee incentive to attract business Compensation Committed to providing a happy, positive and professional work environment Suggestion Box

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HR 5 Y EAR C OST P ROJECTION 20122013201420152016 Hourly staff78,26080,21682,22282,27886,384 Benefits hourly staff CPP3,8743,9714,0704,1724,276 EI1,3931,4281,4641,5001,538 WCB1,2601,2911,3241,3571,391 Vacation Pay4,1514,6284,7444,8624,984 Total payroll expenses89,30291,53493,82396,16898,572

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O PERATIONS P LAN H OURS OF OPERATION Monday Friday7 am 7 pm Saturday8 am 6 pm Sunday9 am 5 pm

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O PERATIONS P LAN T YPICAL D AY Bake & prepare doughnuts Take orders & serve customers Upkeep facility Reconcile cash/credit transactions

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O PERATIONS P LAN S UPPLY A NALYSIS Quality Ingredients for a Quality Product Reputable suppliers from Saskatoon Local ingredients Organic products Basic Mix: Sugar, Eggs, Flour, Milk

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O PERATIONS P LAN C APITAL B UDGET Capital Asset Investment Machinery Equipment Oven (3 ovens @ 10,000/oven) $ 30,000 Small walk in refridgerator (including installation) $ 12,000 Industrial dishwasher (including installation) $ 12,000 Industrial mixers $ 3,500 Espresso Machine $ 5,000 Utensils and tools $ 4,000 Land & Building $ 185,000 Renovations$ 35,000 Computer System (printer, cash register, computer) $ 2,000 System Software $ 4,000 Furniture and fixtures Sales counter and display case $ 20,000 Shelving/Cupboards $ 7,000 Furnitures and fixtures $ 15,700 Total $ 335,200

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O PERATIONS P LAN F LOOR P LAN S TORE F RONT Order here Display Case Pick up here Menu BoardMenu Board P a c k i n g s u p p li e s Entrance Table Espresso bar Bathroom Table

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O PERATIONS P LAN F LOOR P LAN B ACK OF STORE Glass Window Counter Space Oven Oven Dishwasher Oven Oven Oven Oven Freezer Freezer Walk-in Fridge Walk-in Fridge Entrance

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F INANCIAL P LAN : D EBT TO E QUITY Assumptions No dividends are being paid out No additional debt will be added Our projected sales are reached to give us the R/E projection used in calculation 20112012201320142015 Debt$230,000$210,000$190,000$170,000$150,000 Equity$230,005$302,500$388,249$482,225$599,280 Rate1.000.690.490.350.25

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F INANCIAL P LAN : B REAK -E VEN A NALYSIS 2011 2011 w/out capital investment 2012201320142015 Fixed cost 498,264 163,064 176,278 195,917 215,583 215,275 Selling-VC 1.48 Unit Sales (Doughnuts) 336,488 110,120 119,044 132,307 145,588 145,380 % of anticipated sales176%58%59%63%66%63%

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F INANCIAL P LAN : S CENARIO A NALYSIS Sales Sensitivity Analysis Possibility UnlikelyPossible Likely % of projected sale 50%75%80% 90%100% Annual sales ($) 95,328 142,992 152,525 171,590 190,656 Net income (At the end of Yr 5) (72,693) 30,818 51,520 92,925 117,055 Cash Flow (At the end of Yr 5) (449,686) 15,493 108,529 294,601528,413 NPV (@ 25%) (595,556)-58,55548,845 263,646697,465 IRR NilN/A-7%29%57% Payback period (years) Nil>5 3.252.4

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C ONCLUSION Proven market (e.g. Calgary) Knowledge & expertise from the Sisters Large potential market in Saskatoon Healthy & delicious doughnuts

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Q UESTIONS ?

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R ISK F ACTORS Easily Imitable No brand recognition in Saskatoon Can customize doughnut recipes according to Saskatoon taste eg. Saskatoon Berry Jam Doughnut Why go Independent? Business model of franchise is easily imitable Marble slab does not yet have traction in Saskatoon so the value of goodwill associated with the name is not known Flexibility to run the business how you choose Ability to change store layout to improve customer flow Can set prices Can offer products not offered by Marble Slab but competitive with local market (eg Sundays, Floats, etc) Successful model as seen in Vancouver namely Dolce Amore and Casa de Gelato, two local stores that are incredibly successful. Ditto for Mondo gelato. May be worth looking into how much startup and design costs would actually be as these could be commensurate with initial franchise fee Potential for franchising the brand if it becomes popular! (Taco del Mar) Could just buy dairyland ice cream and sell

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M ARKET D RIVERS Health issues both negative (obesity, diabetes) and positive (natural, organic) have continued to generate new products Consumers crave indulging in richness and luxury Carry super-premium image to healthier segments

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F INANCIAL P LAN - A SSUMPTIONS