MGT310: A Strategic Business Development Plan for Jolly Bakery, 2019

This report presents a detailed business development plan for Jolly Bakery, a startup coffee and bakery retail business in Carlton, Victoria, Australia. The plan outlines the organizational and industrial background, market scope for coffee and bakery products in Australia, and specific strategies for business development. It covers the mission and KPIs, startup conditions, strategy and implementation, pricing strategy, equipment setup, and break-even analysis. The report emphasizes the importance of high-quality products, competitive pricing, and excellent customer service to establish a strong market position. Recommendations for future development and a conclusion are also included.

Running Head: SMALL BUSINESS MANAGEMENT
Small Business Management
Student’s Name
University Name
Author’s Note

2
SMALL BUSINESS MANAGEMENT
Executive summary
Jolly Bakery is a Startup organisation for coffee E and Bakery retail which is located in Carlton,
Victoria, Australia. Jolly Bakery intendsto gather the extraction of oil customer base and develop
large varieties of coffee as well as pastry products. The organisation needs to plan for
development of strong market position because of the industry experience of the partners as well
as mild competitive climate in their business region. Jolly Bakery aims to offer their products at
competitive price so that they can meet the consumption demand of the middle to higher income
range local market area residents as well as the interstate as well as International tourists.

3
SMALL BUSINESS MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Organisational and industrial background.......................................................................................3
Market Scope of coffee and Bakery products in Australia..............................................................4
Business Development Plan............................................................................................................6
Mission and KPI...........................................................................................................................6
Startup conditions........................................................................................................................7
Strategy and implementation.......................................................................................................7
Pricing strategy and sales outcome..............................................................................................9
Equipment setup strategy.............................................................................................................9
Break even analysis.......................................................................................................................10
Recommendations..........................................................................................................................10
Conclusion.....................................................................................................................................11

4
SMALL BUSINESS MANAGEMENT
Introduction
This report incorporates thoroughly researched as well as justified business development plan for
Jolly Bakery. In the business development plan, suitable enterprise development strategies have
been identified. In the report, specific metrics have been applied for measuring the success of the
organisation. The initial part of the report provides a business background with a short overview
of the industry, market and Organisation. This is followed by identification of development
opportunity under current market atmosphere and coverage of all specific aspects of the business
development plan. The last part of the report comprises of recommendations for future
development and the conclusion.
Organisational and industrial background
Jolly Bakery is a partnership business that has currently opened as a office canteen Store in
Carlton, Victoria. After two months of operation, the organisation wants to open their individual
Store in one of the busiest office junctions of Carlton. One of the partners has experience in sales
marketing and Management and another is expert in the domain of finance and administration.
The current intention is recruit to full time Bakers as well as 5 stars who will be handling
customer service along with day-to-day operations.
Jolly Bakery will offer a wide range of coffee as well as Expresso products former ranging from
high quality imported Colombian coffee to locally produced flash coffee. One of the primary
missions of the organisation is to provide coffee and espresso products, made to suit the
customer need, down to the minutest detail. Jolly Bakery provides fresh Bakery as well as pastry
products throughout the day. The work of baking will be done during their business operation
hours, but the products will be available all through the day. As per the initial plan, five to six

5
SMALL BUSINESS MANAGEMENT
moderate batch of Bakery as well as pastry products will be developed during the day in order to
you are sure that the customers get freshly baked goods whenever they arrive the stores up till 12
a.m. in the night.
Market Scope of coffee and Bakery products in Australia
Australia is one of the primary coffee consuming countries in the entire Ocean region. In
Australia the demand for instant coffee consumption and freshly brewed coffee is equally high.
75% of the coffee consumers in Australia for visiting coffee shops for freshly brewed coffee. The
market value of Australian coffee is expected to witness a growth by 20% CAGR. Considering
the market of coffee consumption in Victoria, companies like Seven Seeds Australia and Coffee
Alchemy have been holding the retail value share by 58%.there is a value for continuous
Innovation and product development in the market with the consumers referring the release of
new flavour varieties. The most demanded coffee products among the customers of Victoria and
generally all over Australia include Americano Intenso, classic Express, Cappuccino, Ristretto
Ardenza (Huang, Delcour and Brijs 2017).
The culture of coffee consumption in the café outlets is supposed to experience stronger growth
which number of Australian consumers referring to consume coffee in cafeterias during working
days, at the work hours as also during their leisure time during the weekends and holidays. the
coffee shop industry has developed at a vibrant rate in Australia providing scope for many new
entrants to operate in the retail coffee market. The love for quality coffee as well as the vibrant
coffee culture among Australians is providing entrepreneurship scope for several businesses
personal. However, the new information culture in Australia makes the customer is eager to
know how their coffee is prepared, what is the source of the coffee beans and these interests and
curiosity is smartly reflected in the strategic planning of the upcoming coffee companies. For

6
SMALL BUSINESS MANAGEMENT
evidence Jacobs Douwne is a coffee brewery and confectionery outlet chain which advertisers
there certified green coffee beans that is utilised in their freshly flash coffee. However, according
to the information provided by Giri (2018), about 95% of the Australian Café and confectionery
outlets are independent and therefore there is massive scope for development of new retail coffee
chain outlets in the Australian cities. Further evidence shows that big coffee outlet chains like
Starbucks have only 20 outlets throughout Australia. This implies that it is difficult for foreign
coffee brands to set up retail coffee outlets change by copiously catering to the Australian coffee
culture.
Considering the major Trends for coffee detail in Australia, can be deflected that that demand for
cold drip coffee is enhancing in Australia. Outlets like Central Melbourne, Krimper as well as
Manchester press are some of the top spots for enjoying cold drink coffee in Australia. In many
gastropub of Australia, the culture of nitro coffee is in vogue. This is a foamy and creamy
brewed coffee that gives a mouthfeel similar to beer with less added milk and sugar (Phan 2016).
The entire Australian coffee market is segregated into choice preferences over aerobic, robusta as
well as liberica coffee. Considering product type, the younger generation of coffee consumers
prefer powder and instant coffee products and the whole bean coffee. Among the younger
generation, capuchin of labours like Vanilla, Irish cream, caramel, hazelnut and so on earth
famous. Although there is market demand for decaffeinated coffee, 80% of consumers prefer
caffeinated coffee ().
The market for Bakery product is equally high with expectation of reaching 530 million
Australian dollars market value by 2023 with a CAGR rate of 2.6 %. The big market is demand
driven including the convenience of ready to eat food products, changing lifestyle and changing
food preferences along with inclusion of large variety of flavoured bakery foods. The Bakery

7
SMALL BUSINESS MANAGEMENT
market is mainly differentiated over products type, distribution channel as well as geography.
Considering the consumption preferences of Victorian customers, it can be classified that breads
and Rolls, doughnuts, pastries and other products are primary bakery foods. These product
categories comprise about 45% of Bakery food consumption demand in Australia (Giri 2018).
Market development plan
The organisation wants to develop regular customer base concentrating on their marketing for
local residents who will comprise a dominance target market segments. This will help to develop
healthy and consistent revenue base and ensure business stability. However 35% of revenue is
supposed to be activated from tourist’s traffic. The point of sales for this company will be high
visibility as well as competitive product and smart pricing strategy in order to capture the coffee
consuming segment of Victoria, rapidly.
In the initial part of the business setup from up to the year 2025 the organisation has no plans to
spread outside Australia. However, Jolly Bakery wants to open stores in Melbourne other than
Victoria in the coming five years.
Business Development Plan
Mission and KPI
The primary mission of the organisation is to offer high quality coffee, pastry as well as
Expresso product at competitive prices in order to meet the demand of middle, lower as well as
the highest income local market residents as well as tourist.
The two primary KPI of Jolly Bakery include
 Providing best quality coffee products with maximum focus on personal customer service

8
SMALL BUSINESS MANAGEMENT
 Competitive pricing
Startup conditions
Since, Jolly Bakery is a start-up company, financing will be provided by capital of partners as
well as undertaking of a 10 year SBA loan.
The initial start-up costs are formulated in the following graph.
The initial start-up requirements for setting up the individual facility include legal requirements
for plot purchase, facility setup and extraction of the business licence. The next stages will be
renovation of the premise which bright retro look decor and purchase of equipment and
machineries. After the setting up of the store, there will be the need of new store managers who
will be internally recruited by the company. The total start-up assets required cash of aggregate
valuation $70000 Australian dollars, long term Assets of 65000 Australian dollars and other
current assets of 12000 Australian dollars.
Strategy and implementation

9
SMALL BUSINESS MANAGEMENT
The success of the organisation depends on offer in high quality coffee, Expresso as well as
Bakery products with personally customised service. In this context, the biggest competitive
edge is the low market competition level. Most of the individual and small coffee outlet owners
want to promote their stores in shopping malls, around shopping localities or in the the internal
canteens and cafeteria of the office spaces. The unique mission undertaken by the partners of
Jolly Bakery to develop their own coffee outlets in residential and office Centre location is to
attract customers by means of their product quality, customer service quality as well as
competitive pricing strategy. It is anticipated that sales volume in the first year will be about
491001 Australian dollars which is expected to grow about 8% in the second year and 14% in the
third year. The apprehended monthly sales for the next one year are depicted in the graph below.
The following chart shows the annual sales increase in the first three years of operations.

10
SMALL BUSINESS MANAGEMENT
Pricing strategy and sales outcome
The unit price for expresso drinks will be kept5 Australian dollars in the first year, 5.50
Australian dollars in the second year and gradually it will increase at rate of 5 to 6%. The price
of pastry items will vary between 1.75 to 2.50 Australian dollars in the first year with
apprehended annual interest rate of 7 to 8 percent.
Equipment setup strategy
The entire facility will be divided into a live brewery counter, parallel to a customised pastry
making counter, Store front sitting facility, and the rest of the part will include a small office and
kitchen and pantry. There will be sitting facilities in the form of long setup as well as coffee
tables. Unique equipment includes electronic menu and electronic order placing facility. There
will be a large feedback Canvas to the store front where the customers can read the service of
waiters as well as the baristas and leave remark about the taste of coffee. Since the initial date of
setup, the organisation will develop contract with online food ordering companies for local area

11
SMALL BUSINESS MANAGEMENT
distribution. For the initial equipment and facility Centre, is expected to raise 1.1 million
Australian dollars from their personal capitals and their supposed to borrow 10 million
Australian dollars from 10 year SBA loan.
Break even analysis
The break-even analysis is conducted on the basis of the first year Sales figures for total unit
sales as well as by the operating expenses. These figures are presented according to the
individual unit revenue, unit cost as well as the fixed cost. The conservative assumptions done
here, indicates more precise estimation of the real risk. Jolly Bakery is supposed to attain its
break even in the first quarter of its operations and the sales are supposed to steadily increase
henceforth (refer to appendix 1)
Recommendations

12
SMALL BUSINESS MANAGEMENT
The organisation should employ structures foreclose survey of consumer reactions. Every
individual customer should be attended to and ask for their preferences of coffee. The waiters are
expected to develop informal relationship with maximum customers possible. The idea is extract
their likeability for coffee and their preferred coffee type. Since organisation is small and the
marketing that it will be very low, they should depend on customer facing promotional strategies
including guerrilla marketing as well as brand marketing over word of mouth. For evidence with
every customer who makes purchase over 80 Australian dollar, the free goodies with printed
brand name on them. The children visiting the store can be provided with free balloons or small
toys. The take away packaging should be innovative and there should be attractive offers over
online food delivery.
Conclusion
Analysing the market situation and the business development strategies discussed in this report,
which can be highlighted that lesser market competition and experience in consumer service
business of the partners can help this business to achieve unique point of sales.