Mera Bakery: Business Plan for Establishing a Bakery in the UK

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BUSINESS PLAN: MERA BAKERY
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Executive Summary
The present business plan has aimed at highlighting the reason for operating in the bakery
industry, as it is a profitable business. In this regard, the new business named Mera Bakery will
be consolidated in the metropolitan cities of UK. Through operating bakery business, it has been
found that the bakery industry can share a retail market with three full-time bakers of pastry and
five part-time barista bakeries to provide quality service to its customers. The business need to
have efficient management system, operating plan and financial plan to run bakery business.
Finally it can be said that the business of Mera Bakery will get established in the UK market in
the next three years.
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Table of Contents
1. Introduction..................................................................................................................................4
2. Company description...................................................................................................................4
3. Marketing plan.............................................................................................................................5
4. Operation plan.............................................................................................................................7
5. Financial plan...............................................................................................................................8
6. Management and organization...................................................................................................10
7. Recommendation.......................................................................................................................11
Presentation....................................................................................................................................13
Reference list.................................................................................................................................14
Appendices....................................................................................................................................16
Appendix 1: Cash Flow Projection (12 months)........................................................................16
Appendix 2: Income statement..................................................................................................18
Appendix 3: Balance Sheet........................................................................................................20
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1. Introduction
Small business is basically owned independently and operated by a company, which is small in
size and capital. Small business is privately owned with less number of staffs. The revenue of
small business depends on the industry. Entrepreneurs of small business exercise initial plans by
determining the benefit and opportunity. The present study is based on presenting a business plan
for a small business named Mera Bakery. This study is intending to analyze the overview of
Mera Bakary, which is a retailer of cake, biscuits, pastries as well as cappuccino. Moreover, this
report presents multiple growth strategies, leadership strategy and persuasive business case of the
bakery company. The target market and financial position of this small business organization
have also been analyzed.
2. Company description
Mera Bakery will be consolidated in the metropolitan cities of UK. It is equitably owned as well
as managed by the two main partners. Mr. Paul Ballmer and Mr. David Watson are greatly
experienced in the field of not only sales but also management and marketing. Vice president of
the company is Jeff Buffett, who is renowned as the professionally experienced manager.
Moreover, as a CEO of the company, Larry Federer has extensive knowledge in the field of
finance as well as administration. The officer of the chief financial department is Fred Jeansonne.
Mera Bakery will be mainly intending to share a retail market with three full-time bakers of
pastry and five part-time barista bakeries to provide quality service to its customers. Moreover,
these two types of stores operate in day to day basis.
The company offers a wide range of cakes, biscuits, pastry, patties as well as cappuccino
products of high quality. The source of its caffeine products is Honduras coffee beans. The
company contemplated building a capable market position in the Bakery industry of Scotland.
The company also established an experienced supply chain in the city. The CEO of the company
intends to offer various products not only within the local city but also within the whole country.
Due to this reason, he specifically aims to open the supply chain in the tourist area, urban area as
well as in residence. It registers its company with local restaurants and hotels. They sell products
online as well as continue selling in shops.
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They charge a reasonable amount such as ￡8 or ￡9 per pound of cake. Moreover, the company
wants to create a welcoming environment for their customers to enable them to buy the product
and goods. Mera Bakery is promised to their customers to consistently improve the bakery
process in the industry with the help of their eligible and reliable employees. Both online, as well
as offline order and parcel service, are accepted in this company.
The mission of the company is to establish a bakery market, which produces the best quality
bakery products keeping the customer's health in mind. The vision of this company is to create
an atmosphere where they can present, contain as well as motivate the most talented workers. In
addition, the company aims to improve their products and develop quality by traditional baking.
The most important value of the company is to ensure their employees attain and therefore take
care of the consumers, clients as well as guests. Moreover, to provide sufficient opportunity to
their employees, as they choose to engage and enhance their productivity. Therefore, they try to
keep their recipe at the top quality in the bakery industry.
3. Marketing plan
Growth strategy- In order to maintain as well as develop the market share, the company Mera
Bakery produces its products and addresses a reputed image in the bakery industry.
Manufacturers are continuously innovating and reformulate the recipe to make their products
with the best quality of cereals. The company also aim to grow profit in business by focusing on
better quality of donuts, pastry, buns of authentic ingredients. Otherwise, it is impossible for the
company to meet the customer demand. Mass production is essential for the company to achieve
its leading position. As opined by Burns (2016), moreover, it is the easiest way to experiment
with various ingredients in making products. In order to ensure innovation, it offers poster in
short term trial and assesses the reviews. Most of the entrepreneurs aim to grow in promotion for
this business. Therefore, the company helps to grow them by setting up the workflow. As
mentioned by Armstrong (2015), in order to improve the bakery business, the key is to
communicate in the right way with the target customers and care about them.
Leadership strategy- The bakery business needs a leader who is able to analyze the vision and
mission in multiple segments of the bakery industry. An experienced leadership in company with
spanning management knowledge ensures to create a brand reputation which impacts on a
business model. A democratic leader is intending to believe in people's contribution to problem-
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solving and decision making. Through adopting democratic leadership, the company gets
professional teamwork who works well together. This leadership requires development ideas and
cooperation of the other members in a consistent and fair way. As stated by Kotler (2015),
moreover, strong leadership helps to provide innovative ideas to the employees by receiving
customer’s feedback in the market. This also includes promoting the signature item to the
customers. In addition, eligible leadership creates strategic planning to improve profitability and
to reduce unnecessary expenses.
Method of getting potential funding- In order to get potential funding in the business, the
company share its partnership with various small business entrepreneurs. Moreover, it registered
its company name with multiple branded restaurants as well as hotels. As mentioned by Yang
and Gabrielsson (2017), they help to grow the supply chain and promote their brand in local
customers and tourists of another country as well.
Persuasive business case- The Company starts off by analyzing the distractions that exist and
the way to solve. It helps the audiences to convince in the course of its activities. The business
case also includes the acknowledgment of the hazards and risks in the business with an
appropriate solution. The risk mitigation helps to make manageable the risks. As stated by Stark
(2016), it contains procedures of minimizing risks.
SWOT analysis of Mera Bakery-
Strengths
● Brand Reputation
● Registered with renowned hotel and restaurants
● Huge eligible employees
● High-quality ingredients in manufacture.
Weaknesses
● Limited resource
● Lack of innovative ideas for the betterment of products
● Poor equipment
Opportunities
● Emerging demand for bakery products in the locality
● Media coverage including online and offline to promote brand name
● New target audience
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Threats
● High market competition
● Fast changing of the regulatory environment
● Changing consumer attitude and expectation towards healthy food
Brand development- In order to develop the brand reputation of the company, it targets to spread
its supply chain in the urban area. Moreover, it focuses on promoting its brand by online ads,
blogs, e-magazines and offline such as books, fliers. Through market segmentation, the company
organizes the business case and customers by analyzing demographic and geographic factors as
well. Using this strategy, the company increases the target market and a manageable group. As
mentioned by Goll (2017), demographics are the general factor, which divides consumers by
structure of population according to their age, occupation, and income. Younger consumers
within the age of 8-20 years prefer the pastries and cakes from Mera Bakery. Moreover, in high
society neighbourhood, where peoples of age 25-55 years, work in high sectors, are more
interested in bread and roll. Geographic population helps to sell product and provide service.
Lifestyle segmentation focuses on consumer's expectation within urban areas from the bakery
industry.
4. Operation plan
Operating time
The time of operation of the stores are sorted according to peak purchase hours for food and
beverages. Bakery items are mainly consumed in the morning. Therefore, the operating time for
the stores under Mera Bakery business project will be scheduled with an opening time at 8:00 am
in the morning and a closing time of 7:00 pm in the evening.
Branches
The branch locations for the stores of Mera Bakery are to be selected according to the startup
business survival rates in the major popular cities in UK. The preliminary plan for opening
branches includes cities of Northampton, Bristol and Edinburgh. Further branch options also
include London, Brighton and Oxford. The branch locations considered in this plan are
strategically chosen after evaluating the startup success rates in these selected cities. All of the
primarily selected cities have startup survival rates of more than 70% which make them ideal for
this startup business.
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Growth projection
Following the projected income for the following years till 2021, it can be expected that the
profits are to be significantly incremental. The percentage increase in the year 2021 is expected
to be equal to 47.87% compared to the previous year which indicates high profitability of the
venture in future.
Figure 1: Growth Projection graph of Mera Bakery
The percentage increase in the growth of the profitability of firm can be calculated through
comparing the previous year income with the following year incomes. Alternative ways of
calculating growth patterns in any business also included comparison of sales growths in the
consecutive years after commencement of business. Both the approaches find the difference
between the two values in terms of percentages.
5. Financial plan
Balance sheet
The details included in the balance sheet are statement of liabilities, value of assets, net working
capital available for business and balance of income and expenditures for the firm. Projected
balance sheets are prepared based on assumptions and expectation from a business (Refer to
Appendix 3). The projected balance sheet details show the estimated net values of the assets and
liabilities of the venture. The working capital variation is also calculated through finding the
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difference between the current assets and liabilities values of Mera Bakery for the following
three years.
Cash Flow
The projected cash flow for the initial 12 months of starting the business operation are indicative
that the company might run into some temporary debts in cash balance with cash flow deficits.
The recovery of the deficits and cash balance is projected to obtain within three months post
commencement of trading activities by Mera bakery. The estimated total cash flow surplus at the
end of the year 2019 is expected to be equal to £102136 (Refer to Appendix 1).
Income statement
Mera bakery income statement projection shows the expenses related to the business, amount of
revenues to be collected through sales and investments and tax repayment obligation of the
business for the initial years. The total expenses estimated in the report are equal to £9553 and
the estimated revenue acquisition is equal to £257939 for the year 2020 (Refer to Appendix 2).
Break Even analysis
Break-even analysis is mainly based on the calculation of the average figures of the first year of
operation of business. All the unit variables such as unit revenues, sales, fixed costs and variable
costs are presented as assumptions in the planning phase. Such estimations are in turn used for
obtaining accurate estimation of risks in the near future.
Figure 2: Break even analysis
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Based on the estimation from the financial and marketing analysis of Mera bakery, it can be
projected that the company can multiply it sales in each of the following years resulting
increased revenues and net incomes.
Break even analysis
Monthly Units Break-even 20,706
Monthly Revenue Break-even $46,003
Assumptions:
Average Per-Unit Revenue $2.66
Average Per-Unit Variable Cost $0.42
Estimated Monthly Fixed Cost $38,812
The projection reports are indicative of successful break-even achievement within the first year.
The target profit levels at the end of the first year of business are equal to £152628. The per unit
price for the manufactured products to be sold in the stores are to be variable from £10.00 to
£87.00. The number of units required to be sold for achievement of break-even will be varying in
this case depending on the type of products sold.
6. Management and organization
Organization culture- Mera Bakery starts to expand in the current market by recruiting a huge
number of efficient employees. The company will receive a lot of orders from customers as well
as various restaurants. In order to gain customers, it is important to offer them at the low price
and value-added features. As opined by Hobbs (2016), the management strategy also involves in
focusing the upper market. They offer various discounts on seasonal products, festival or
occasion discounts. The bakery industry involves in achieving the target of profit market. This
allows the company to produce a high volume of product with a smaller price of ingredients. It
increases the productivity of the company.
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Procedures for setting up start-up business- Bakeries generally prefer high volume of sales of
coffee, cake, pastries. It creates successful business through customer base target and good
profile location as well. The specialty of good involves in producing and offering the unique
items made in house tags. Bakery industry buy products, however, they can’t sale those quickly.
Therefore, this makes ordering and anticipating various critical factors. As mentioned by Lange
(2018), correctly forecasting of demand helps the company to reduce its cost.
The company starts the business by determining the slot market, which drives it to serve initially.
Therefore, they restricted their products according to financial strength. The company designed a
menu professionally, which helps to create a smart impression to the customers. Moreover, they
decorate the shop to reflect a good appearance and to draw the attention of customers. As stated
by McKenzie (2015) the personal contact with suppliers and market vendors has a positive
impact on the bakery business. One of the important keys is to consider a unique and significant
logo for the company.
Owner of the business- Mr. Paul Ballmer and Mr. David Watson are both widely experienced in
the field of sales and management. They involved in employing, controlling and directing in the
business. Moreover, they initiate various projects and take relevant action during crisis of the
company. They negotiate a contract, budget as well as sales. CEO of the company, Larry Federer
determines the company's mission, vision, and objectives. As opined by Zupic and Čater (2015),
in addition, his function includes marketing strategies and accounting. The CFO of the company
Fred Jeansonne manages financial risks, manages financial planning and record keeping as well.
Number of staffs, their level, and experience- The Company has numerous eligible staffs
around 20 to meet the customer demand and improve service quality. The company employs
mainly experienced employees in order to grow fair work culture, pressure, and ethics. They are
the backbone of the company, as they help to identify strength as well as the weakness of the
company. Moreover, they help to fill the gap between expectation and implementation.
7. Recommendation
As the vision of the company is mostly concerned with the health of customers, Mera Bakery
should provide the necessary nutritional information for their products. According to various
bakers association, the nutritional information of products helps the consumers to identify the fat
and calorie contained in the product. The customers will be more interested in the products if the
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company makes more availed products. This helps Mera Bakery to ensure the consumer's health
by providing nutrition product. Moreover, the ever-changing lifestyle, the company should adopt
innovative recipes and ingredients to manufacture their product. As stated by García-Holgado
(2015), more option in the product such as ready-to-serve lunch and dinner helps the customers
to enjoy great shopping.
Mera Bakery can control cash flow as well as profit margin through the constant flow of funds.
The monthly expenditure sheet helps to invest extra capital in the business. As mentioned by
Karadag (2015), moreover, the budget helps to plan in dispute season. The company needs to
have multiple platforms for online delivery to make their products availed to the customers. They
should integrate various online stores. A company website consisted of the company logo is
essential to increase the scope of business. Through modern technology, the company can
improve its products and make tastier of products. Another factor is to ensure fresh product
delivery.
Mera Bakery should manufacture products in different of other bakery industries in the city, as
they can offer quality products to the customers. Location plays a crucial role in running the
business. They should target a highly urban area and retail area as well to be closer to the
customers. In addition, the company should design a sales forecast to handle financial operation
based on the food cost of purchasing items. Therefore, it needs to carry on a weekly project of
the budget.
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