Sim Bakery Business Plan: Market Analysis and Financial Projections

This business plan outlines the strategy for Sim Bakery, a new bakery business aiming to offer bakery products at competitive prices in Saudi Arabia. The plan covers the company overview, market analysis, business offerings, management plan, and financial projections. The market analysis includes PEST analysis to assess political, economic, social, and technological factors. The business will offer various bakery products, including cakes and pastries. The management plan involves hiring key staff like a chef, shop manager, and delivery driver. Financial projections estimate revenues and expenses over three years, demonstrating the viability of the business. The plan emphasizes cost leadership and marketing strategies to establish Sim Bakery as a brand in the competitive market.

Running head: BUSINESS PLAN
Business Plan
Name of the Student:
Name of the University:
Author’s Note

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BUSINESS PLAN
Executive Summary
The main purpose of the assessment is to formulate a business plan for opening a bakery
business which would be selling different types of bakery products in the market and thereby
offer the same at a lower price than its competitors. The name of the business would be Sim
which would also be focusing on market analysis as the same would assist the management
regarding which strategies’ are to be implemented for the business. The business would be
operated and owned by four individuals who would be handling different parts of operations
for the business. The business plan shows that the management intends to hire a chef, one van
delivery driver, one cashier and two waitresses. The business would also be needing a shop
manager who would be the link between the senior management and the staffs of the
business. The business plan would also be including financial projections showing income
and expenses on estimated basis for the purpose of analysis.

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Table of Contents
Company Overview and Description.........................................................................................3
Market Analysis.........................................................................................................................4
Business Offerings.....................................................................................................................7
Management Plan.......................................................................................................................8
Financial Projections..................................................................................................................8
Revenue Analysis...................................................................................................................9
Expenses...............................................................................................................................10
Return on Investment...........................................................................................................10
Reference..................................................................................................................................12

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Company Overview and Description
The main purpose of the assessment is to formulate a business plan which would be
focusing on opening a Bakery shop which would be providing freshly cooked bakery
products to the customers. The name of the business would be Sim which would be providing
all kinds of Bakery products freshly baked. In addition to this, the business would also be
focusing on sustainability aspect and thereby also help in maintaining healthy and hygienic
baking products. The business would also be looking to expand their operations once they
have effectively established their business in the market by opening new outlets for the same
shop.
The business is thought be viable by the management of the new company due to the
favourable market conditions and overall demand for bakery products in the region. The
business would be specializing in baking different kinds of breads and dough based products

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so that the locals can be attracted for the purpose of enhancing the sales of the business. In
terms of managing the business, the business would be hiring a chef for managing the bakery
of stuffs and also providing fresh food for its customers. The business would also be hiring a
shop manager so that he can constantly supervise the operations of the business and thereby
also assist in bringing about efficiency in the operations of the business. The business would
be managed by four individual and the major activities of the business would be distributed
among the four owners. The four different areas which would be analysed by the owners are
marketing activities, finance activities, shop employees and management and different teams
respectively.
Market Analysis
The market of Bakery in Saudi Arabia is considered to be highly favourable and the
same is expected to increase further over the years. The people in the region prefer bread
based products which is the primary reason that the market has flourished. As per research
survey, Saudi Arabia is estimated to be the 20th largest bakery products market worldwide,
with US$5.11 billion worth of retail value sales in 2016. This shows that the market is highly
favourable and it would be a viable option to start off the business of Sim in the region. It is
to be further noted that the bakery products market in Saudi Arabia is estimated to grow at a
8.2% consider the rate of growth of the nation.
In 2013, the retail sale market for bakery was affected due to the shortage of labour in
the market and also due to the tough conditions which the economy of Saudi Arabia was
going through at that time. A proper empirical presentation of the retail sales of bakery
products which is achieved by the country over the years is shown in the table below:

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Figure 1: (Empirical Data showing retail sales of Bakery products)
Source: ()
One other characteristic of the market which can be properly identified is the
competitiveness of the businesses which are offering similar products in the market. This is
the primary reason that the management of Sim needs to formulate proper strategies so that it
can distinguish its products from that of its competitors and thereby develop competitive
advantage in the market. One of the techniques which can be used for effectively for
analysing the market is PEST analysis which considers different factors which can have an
impact on the revenue generation ability of a business.
The PEST Analysis is basically a strategic tool which is used by an entity in order to
identify the possible factors which could impact the business operations on their current and
future basis. It is to be noted that PEST analysis is always conducted when a business is
commencing its operations so that the features of the market can be identified. The Pest
analysis is comprised of four factors that is political, economic, social and technological
factors.
In the current business, the business is engaged with producing and designing bakery
products which would also be including cakes so that the business is able to attract all classes

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of customers. The different products which are being offered would have different flavour
associated with the same and would also be create a small café type space so that the
customers are able to enjoy themselves. The business aims to build a name for itself based on
the quality of bakery biscuits, cookies and cakes which the business would be offering.
Political Factors:
In Saudi Arabia, the government has a large role to play in any business which is
being set up starting from the licensing of the same to the effective commencement of the
business.. The economy is a bit tough which is the main reasons that a low supply of labour
in the market. The country has transparent market with innovation and skills therefore; the
new business will have good opportunity to start (Chen and Zhang 2019). The price level of
the country has stabilised since last times and therefore, it can be said that the market is
efficient In addition to this, due to the opening up of the economy, the country also has an
access to global market which would be further enhancing the sales of the business and
thereby generate more revenue from operations.
Economic Factors:
The economic factors include the inflation rate, labor supply, the cash rate and
economic growth. As per the current situation, the growth rate of the country is not much and
has declined slightly but the conditions are anticipated to be better in future. This reflects that
the inflation rate is high and high inflation rate could affect the currency exchange rate which
would have an impact on foreign condition. The higher inflation rate could increase the cost
of all the goods and might spar uncertainty in business. Therefore, the business needs to
consider all the economic factors in order to effectively establish the specialized home
solution business in Australia.

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Social Factors
The social factors include comfort with technology, customer service experience,
buying habits and many other factors. The customers have most of the powers in their hands
and can easily influence the decisions of buying. The business intends to provide an
appropriate sustainable message so that the attention of the entire society can be attracted
This would be done with the objective of enhancing the sales of the business and thereby also
the profits of the business..
Technological Factors
The technological advances have fostered easy operations and productivity in
business. The technological factors have lowered the cost of labour and made the working
more sophisticated and smarter. The business intends to mix different fruits and dry fruits to
achieve a unique flavour which can be appreciated by all the customers.
The marketing activities which are associated with the business would be handled by
one of the owners who would be taking all the decisions regarding the marketing operations
of the business. The business would also be considering market survey for which PEST
analysis is conducted so that the general marketing trends can be ascertained.
Business Offerings
The business would be offering different kind of Bakery products which also includes
cakes and pastries. The management of Sim intends to freshly bake the products so that the
customers are satisfied with the smooth texture and freshness of the products. In addition to
this, the business would also bake chocolate cakes and cookies so that the customers are
satisfied with the products and the business is able to retain such customers for long run sales.
The business intends to hire a chef who has ample experience for the post so that the business

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is able to maintain a quality for the bakery products of the business. The business would also
be offering a place to sit and enjoy their food in peace so that the customers can decide for
themselves if they want more of the products which is currently being offered. In addition to
this, the shop would also be providing delivery services for customers who are close to the
shop which would be enhancing the distribution circle for the business.
Management Plan
The plan of the management of the company is to enhance the sales of the business
and thereby develop the business as brand in the market. The market is quite favorable for
new entrants and therefore the management of Sim needs to formulate strategies which would
be allowing the business to survive in the market in an effective manner. One of the strategies
which is intended is the cost leadership strategy which the business would be following
thereby offering its products at a lower price in comparison to the prices which is offered by
the competitions. The lower price would attract all kinds of people in the business for the
purpose of enhancing the sales of the business. In addition to this, the management of the
company also plans to expend significantly on enhancing the advertisement and promotion
budget so that a buzz can be created and also for informing the customers exactly what the
business is offering.
Financial Projections
The financial projections has been well done for the Bakery Business for a sum of
three years in order to well draw a budgeted financial statement. The budgeted financial
statement has been well drawn by taking important data in terms of revenue earned, expenses
incurred and various other crucial data which were based on assumptions and those have been
primarily involving key data like revenue growth rate, expenses growth rate and various
products of sales quantity that the business expects to sells. The sales value or revenue for the

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company would be primarily driven by three key products divisions that the business would
be offering and that would be cakes, breads and ice-cream. The financial projection has been
well drawn for a sum of three year in order to assess whether the new planned business will
be viable showing the success of business.
Revenue Analysis
The revenue analysis has been specifically done by taking the total sales amount
which the company expects to generate and the same would be around $750,000 in the first
year and the same is expected to grow at a rate of 10% for the next three years that have been
analysed (McKeever 2016). The revenue analysis reflecting the various units that the
company would be selling has been well shown below:
Particulars Year 1 Year 2 Year 3
Total Sales $ 450,000 $ 495,000 $ 544,500
Cakes $ 360,000 $ 396,000 $ 435,600
Breads $ 36,000 $ 49,500 $ 54,450
Ice-Cream $ 54,000 $ 49,500 $ 54,450
1 2 3
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
360000
396000
435600
36000 49500 5445054000 49500 54450
Sales Forecast
Axis Title

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Expenses
The key expenses that the bakery business would be incurring will be primarily in the
form of the operational expenses that the company will be incurring and the same will be
primarily in the field of rent and rates, salary and wages, accountant fees, payroll tax,
supplier’s contract, marketing expenses, postage & telephone expenses and other expense
like preliminary expenses and lease expenses (Evans 2016). The total operational expenses
that the business expects to well incur in the first year of operations will be around $135,475
and the same is expected to grow at a rate of 5%. On the other hand, the key capital
expenditure that the company expects to well incur will be primarily in the field of
Equipment’s, vehicles and refrigerators & utensils. The total capital expenditure operational
that the company will be incurring will be primarily around $300,000 and the same is
expected to grow well at a constant rate as the business operations of the business grows
(Gill, Dana and Obradovich 2018).
Return on Investment
The return on investment that the business expects to well generate from the business
will be around 7.8% in the first year and the same is expected to grow to around 8.2% and
8.6% constantly as the operations of the business grows and as the consumer base for the
company increases at a sound rate. The growing and positive net profit figure reported by the
company well shows that the management of the company must take important and crucial
steps for the purpose of well improvising the profitability of the company. These can be
specifically in the fields of strategic management and optimum utilisation of resources
(Stewart 2017).

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1 2 3
7.4%
7.6%
7.8%
8.0%
8.2%
8.4%
8.6%
8.8%
7.8%
8.2%
8.6%
Return on Capital Employed