Business Plan for Crave Cupcake

This assignment provides a detailed business plan for Crave Cupcake, including a sales forecast based on collected information, loan requirements from a bank, and marketing strategies to increase customer awareness. The plan also outlines the importance of financial planning in identifying expenses and extra costs associated with carrying out business activities successfully.

Crave
Cupcakes
and Cookies
Business plan 2018
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2. EXECUTIVE SUMMARY
a) An overview of the business idea and goals
Crave cupcake is a shop which is located in the shopping center in Sydney. This shop can
be described as a quick service restaurant which provides a wide range of flavored bakery
products to its customers. The goal of firm is to deliver high-quality products and services to its
customers in order to gain a competitive position in the market. The business is all about selling
of bakery items including different varieties of cupcake. In present time people prefer to boy
healthy product so it can be stated that business will be successful. The present business structure
is proprietorship and reason for choosing this structure is that it is simplest form of business and
it no need to pay corporate tax payments.
Marketing
A Crave cupcake accomplishes success through using effective competitive pricing
strategy to sell its products and services. Marketing strategy will be used to attract new
customers and educate those who can become loyal towards the firm. Product of the firm are
different from other companies because they are healthier and tasty. In order to advertise
products and services company will use social networking sites which help in making aware of
new products in all over the world. Issues which can be faced while determining the location is
related to higher price and tough competitor at that place. Targeted customers are younger age
people who mostly prefer to buy cupcakes. Sales fluctuates as because at the time of Christmas
sales increase which help in increasing profit.
Operational
All business operations are carried out in a systematic manner with proper planning in
order to deliver quality services on time. All ingredients which are required for making the
products will be purchased locally and fresh in every two weeks. Manager should be highly
skilled who can easily handle day to day activities. In order to start new business all legal
procedure should be strictly followed. Company is operating at small scale so less staff is
required for managing work. New technologies will be adopted in order to make quality product
and services.
Financial
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A startup cost will include initial inventory for the first store which will include shipping,
cold, storage and all expenses associated with product. All the financial statements are based on
the operations, marketing strategies and human resources which help in increasing the sales.
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TABLE OF CONTENTS
2. EXECUTIVE SUMMARY.........................................................................................................2
a) An overview of the business idea and goals.......................................................................2
BACKGROUND ............................................................................................................................2
a) Detailed description of business including product being sold..........................................2
b) Business goals, strategy and vision....................................................................................2
c) Ownership and legal structure............................................................................................2
d) Funding Requirement.........................................................................................................3
IMPLEMENTATION TIMETABLE..............................................................................................3
FINANCIAL PROJECTIONS.........................................................................................................5
Projected profit and loss statement.........................................................................................1
Break even analysis................................................................................................................1
Balance sheet..........................................................................................................................1
Reference.........................................................................................................................................4
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BACKGROUND
a) Detailed description of business including product being sold
Cupcake is a niche market in the baking and culinary industry in Australia. New cupcake
shop that is Crave cupcake has been open which is located in a shopping center in Sydney. To
start up a business, Crave cupcake bakery shop expects to raise $20000 its own capital and rest
of the cost will need to come from bank loan as a 12-month plan. There are different types of
bakery items which will be offered by Crave cupcake shop. The bakery will provide freshly
prepared flavors of cupcake and pastry products at all time while carrying out business
operations. Company will bake and retail the cupcake of various designs, themes, and flavors.
b) Business goals, strategy and vision
The goal of Crave cupcake shop is to offer high-quality bakery products at a competitive
price in order to meet the demands of the middle level to higher income level people. There are
various marketing strategies which will be used by the firm in order to grab the attention of a
large number of customers (Swamidass, 2016). As a part of strategy, younger age people will be
targeted by company who mostly prefer to buy bakery products occasionally and on daily basis.
The vision of company is to become a number one choice for customers while making a
purchase decision of cupcake.
c) Ownership and legal structure
Crave cupcake shop is a sole proprietorship company because it is established and carried
out by an individual. It is a small business that carries out all operational activities in an effective
manner. All the decisions are made by the owner of the firm (Zimmerer, Scarborough and
Wilson, 2005).
Legal structure
Crave cupcake has established in Sydney a shopping center. There is only one owner of
the firm who makes all decisions. Crave cupcake is a small company and so, it enjoys less tax
rate and it also provides flexibility in time to its employees (Carrier, Raymond and Eltaief,
2004).
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Figure 1: Organisation structure
d) Funding Requirement
Crave cupcake is a start up company in which finance will be gathered from retained
profit and a bank loan. To start a business, own money will be used which is $20,000. After
establishing a business for extra cost, bank loan can be taken by the firm to carry out all the
business operations in an effective manner (Maxwell, Foley and Marty, 2015).
IMPLEMENTATION TIMETABLE
Activit
y 1th
Month
2nd
Mon
th
3rd
Month
4th
Mon
th
5th
Mont
h
6th
Mont
h
7th
Month
8th
Mont
h
9th
Mon
th
10th
Mo
nth
11th
Mo
nth
12th
Month
Formu
lating
busine
ss plan
Searc
hing
locatio
3

n
Apply
for
loan
Gathe
ring
inform
ation
Finalis
e
suppli
er
Plan
shop
and
interio
r
design
Mark
eting
materi
als and
distrib
uted
Monit
or the
plan
Make
change
s if
requir
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ed
At the time of establishing a new business, it is important to schedule each and every
activity in a timeframe in order to complete it successfully (Skoog and Trosdahl, 2017). Along
with this, it is important to complete all the activities in a given period of time as delay in one
activity can affect other activity’s cost and time.
FINANCIAL PROJECTIONS
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Projected profit and loss statement
According to the given profit and loss statement of 12 months, Crave Cupcake expects to continue its steady growth in
profitability in 12 months of operations. One of the important assumptions while calculating profit and loss is to enhance its sales
monthly. The assumption is based of Crave cupcake is based on increase in sales from first month to 12 month. Below provided
statement clearly shows continuous increase in the sales and profit.
Sales budget
Jan Feb March April May June July August September October Novem
Sales
Units 3,000 3,150 6,500 6,100 6,500 9,800 6,400 6,800 6,700 9,500 3
Unit Selling Price $5 $5 $5 $5 $5 $5 $5 $5 $5 $5
Sales Revenue $13,500 $14,175 $29,250 $27,450 $29,250 $44,100 $28,800 $30,600 $30,150 $42,750 $15
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Purchases Budget
Jan Feb March April May June July August September
Sales Units for Month/Year 3,000 3,150 6,500 6,100 6,500 9,800 6,400 6,800 6,700
Add Required ending inventory
50% next months inventory 1575 3450 3150 3300 3300 3150 3450 3300 4725
Total Units required 4575 6600 9650 9400 9800 12950 9850 10100 11425
Less Beginning Inventory 0 1575 3450 3150 3300 3300 3150 3450 3300
Total Purchases Units 4575 5025 6200 6250 6500 9650 6700 6650 8125
Purchases Cost Per Unit 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25
Purchases Cost 1143.75 1256.25 1550 1562.5 1625 2412.5 1675 1662.5 2031.25
Cost of sales
Jan Feb March April May June July August September October
Estimated Sales 3,000 3,150 6,500 6,100 6,500 9,800 6,400 6,800 6,700 9,50
Cost of Goods Sold 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.
Total 750 787.5 1625 1525 1625 2450 1600 1700 1675 23
Selling and administrative expenses budget
Jan Feb March April May June July
Estimated Sales 3,000 3,150 6,500 6,100 6,500 9,800
Variable Expenses Per Unit 0.25 0.25 0.25 0.25 0.25 0.25
Total Variable Expenses 750 787.5 1625 1525 1625 2450
Fixed Selling and Administrative Exepenses
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Bank Fees 50 50 50 50 50 50
Interest On
Loan 150 150 150 150 150 150
Office Supplies 750 750 750 750 750 750
Equipment 583.333333 583.333333 583.333333 583.333333 583.333333 583.333333 583
Depreciation:
Vehicle 500 500 500 500 500 500
Shop
Fittings 416.666667 416.666667 416.666667 416.666667 416.666667 416.666667 416
Total Fixed Expenses 2450 2450 2450 2450 2450 2450
Total Selling and Administrative Expenses 3200 3237.5 4075 3975 4075 4900
Income statement budget
Here, below provided is Income statement budget of Crave cupcake shop:
Jan Feb March April May June July Au
Sales Revenue $6,300 $6,300 13800 $12,600 $13,200 $19,800 $12,600
Less Cost of Goods Sold 787.5 787.5 1725 1575 1650 2475 1575
Gross
Profit $5,513 $5,513 12075 $11,025 $11,550 $17,325 $11,025
Less Operating Expenses
Selling and Administrative Expense:
Bank Fees 50 50 50 50 50 50 50
Office Supplies 83.3333333 83.3333333 83.3333333 83.3333333 83.3333333 83.3333333 83.3333333 83.
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Equipment 666.666667 666.666667 666.666667 666.666667 666.666667 666.666667 666.666667 666
Rent 1600 1600 1600 1600 1600 1600 1600
Depreciation:
Vehicle 416.666667 416.666667 416.666667 416.666667 416.666667 416.666667 416.666667 416
Shop
Fittings 333.333333 333.333333 333.333333 333.333333 333.333333 333.333333 333.333333 333
Total Operating Expense 3150 3150 3150 3150 3150 3150 3150
Operating Profit $2,363 $2,363 8925 $7,875 $8,400 $14,175 $7,875
Interest on Loan 200 200 200 200 200 200 200
Net Profit $2,163 $2,163 8725 $7,675 $8,200 $13,975 $7,675
Sales forecast
Crave cupcake is established with the purpose of earning profit in the bakery industry. It is essential for the firm to state its
sales forecast which is based on the collected information at the time of feasibility studies and survey. Along with this most of
assumption are available in this field.
Conclusion statement
From the above business plan, it can be concluded that for business plan, it is important to collect information from different
sources so that business can be established successfully. Along with this, loan is required to be taken from bank in order to carry out
the business activities successfully. Through adopting proper marketing strategy, customers can easily come to know about new
company and its products which help in increasing the sales and profit of firm. Further, it can be concluded that financial plan helps in
identifying the expenses and extra cost that occur while carrying out business activities successfully.
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Reference
Carrier, C., Raymond, L. and Eltaief, A., 2004. Cyberentrepreneurship: a multiple case study. International Journal of Entrepreneurial
Behavior & Research, 10(5), pp.349-363.
Liana, L., Andraini, F. and Mariana, N., 2016. INCUBATION OF CREATIVE INDUSTRY AND INFORMATION
TECHNOLOGY BUSINESS BASED ON STIKUBANK UNIVERSITY (CASE STUDY OF SBS INCUBATOR STIKUBANK
UNIVERSITY). Proceeding ICOBAME.
Maxwell, E., Foley, M., Braman, J., Sopeth, J. and Marty, R., 2015. Rosemount Eco-Green Business Park Feasibility Study.
Skoog, C. and Trosdahl, K., 2017. Strategic Business Plan for Christine's Sweet Confections (Doctoral dissertation, The College of
St. Scholastica).
Swamidass, P., 2016. Engineering Entrepreneurship from Idea to Business Plan: A Guide for Innovative Engineers and Scientists.
Cambridge University Press.
Zimmerer, T.W., Scarborough, N.M. and Wilson, D., 2005. Essentials of entrepreneurship and small business management. Upper
Saddle River, NJ: Pearson/Prentice Hall.
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