Business Plan: Mr Sandwich (Fresh Sandwiches) - Analysis and Forecast

This business plan outlines the strategy for Mr. Sandwich, a UK-based fresh sandwich service. It details the business idea, targeting busy professionals with healthy food options. The plan includes a comprehensive costing analysis, breaking down start-up, staff, and operational expenses. A budgeted profit forecast projects sales, variable costs, and fixed costs, culminating in a profit analysis. The report also presents a budgeted cash flow statement, tracking monthly inflows and outflows. A cost-volume-profit analysis determines the break-even point and margin of safety. Key performance indicators (KPIs) are suggested, focusing on sales growth, cost reduction, customer satisfaction, and operational efficiency. The plan concludes with recommendations, emphasizing the importance of advertising for growth.

BUSINESS PLAN

Table of Contents
Mr Sandwich (Fresh sandwiches) Business Plan............................................................................3
Business idea...............................................................................................................................3
Costing.........................................................................................................................................3
Budgeted profit forecast..............................................................................................................5
Budgeted Cash flow.....................................................................................................................6
Cost volume profit analysis.........................................................................................................6
Key performance indicators.........................................................................................................7
RECOMMENDATION...................................................................................................................8
REFERENCES................................................................................................................................1

Mr Sandwich (Fresh sandwiches) Business Plan
Business idea
It refers to the idea of the business that will lead the business towards the direction of
growth and success. It is like the base on which the entire business depends (Kant and Gaba,
2020). With refers to the Mr Sandwich the main business idea is to serve the customers of the
UK with the freshly made and healthy sandwiches. It is planning to propose its business with the
purpose of serving almost every person. However, its main focus will be towards the people
those belong to the service and job sector. This means that its main focus will be towards
population who are engaged with the tough schedule of jobs and have no time an access of
healthy food. By enabling fresh sandwiches and food Mr Sandwich will serve towards the better
health of its customers. apart from raising the percentage of sales and revenue its main objective
also includes the serving of best and healthy food to its customers so that they can have access to
good health. Initially it is planning to serve its services in the cities of London, Bristol, Norwich
and various other big cities.
Like other business it will also face many risk in the initial stage but with its continuous
efforts it will move out of the tough situation. Risk includes, intense competition, non-acceptance
of customers, changing rules and regulation with the context of environmental conditions
including the Covid pandemic and many other risk it may have chance to face (Kiseleva and
et.al., 2018).
Apart from facing risk it will also need to be funded in order to have an establishment of
the business. As no company can survive without the availability of funds and money so in case
of Mr Sandwich also an adequate source of funds is important. For supporting its initial start-up
its will move towards the start-up loan facility which was introduced by the UK government.
Taking of loan from the bank would enable the Mr Sandwich to make start its business initially.
The estimated amount of loan that it will require would be around £5000.
Costing
Income:
Before having an estimation of costing with regard to the business it is essential to have
an analysis and estimation of income which the business is planning to achieve in the initial year

of its establishment. Mr Sandwich is planning to have a sale of 20000 units at a rate of £25 per
unit. As its sale will be explored towards the whole year so an estimation of sales for the year is:
January 1000 May 1200 Sept 2100
February 1200 June 1650 Oct 2500
March 1250 July 1600 Nov 2000
April 1300 Aug 1700 Dec 2500
Cost:
It is one of the important element of every business. It is basically the expenses that is
incurred by the organization behind the production and sales of the ultimate products among the
customers (Pylypenko, 2020). With regard to Mr Sandwich, the cost structure will be comprised
of basically fixed and variable cost wherein the fixed cost included those expenses that is needed
to be bear by the company whether the production and sales of products will be executed or not.
However, variable cost will vary as per the situation and requirement. The cost structure of Mr
Sandwich is as follows:
Start-up cost:
It refers to the cost that is associated with the start-up and establishment of the business
(Picken, 2017). With regard to Mr Sandwich an estimated start-up cost would be £70000. This
cost will be depreciated over a period of three years at £23333 each year.
Staff cost:
It refers to the cost that is associated with the staff and their salary. An estimated salary of
£60000 per year which will be segregated at as £20000 per employee.
Raw material:
It includes the cost that is concerned with the raw material for the production of the
products. With regard to the Mr Sandwich an estimation of raw material cost would be around £5
per product.
Rent:
It refers to the amount of cost that is spend by the Mr Sandwich for the shop and the
restaurant. An estimated and amount of rate would be £5000 per quarter.
Electricity:

It is counted as semi variable cost in which an estimated cost of £7000 would be fixed
from an overall estimated electricity expenses of £50000.
Along with the above expenses and cost an addition of fixed administrative fee of £8000
would be incurred by Mr Sandwich that will be related with all the legal, audit and various other
fee which will be spread over the whole year. Mr Sandwich also have to bear an interest @ 3%
over the loan amount. Simultaneously, an advertisement cost of £0.5 per brochures will be spend
by the Mr Sandwich. Estimated brochures of 5000 units will be used for making advertisement.
Also an insurance cost of £5000 will need to be bear by Mr Sandwich in February per year.
Cost analysis:
Cost type £ Fixed/Variable Notes
Start-up cost 70000 Fixed Depreciation of £ 23333
Raw material 30000 Variable 60000 kg @ 5 per unit
Electricity 50000 Semi variable 7000 fixed and remaining variable
Advertisement 2500 Variable 5000 estimated brochures @0.5
Administration 8000 Fixed
Rent 20000 Fixed 5000 per month
Staff cost 20000 Fixed
Insurance cost 5000 Fixed
Bank interest 1500 Fixed 5000 @ 3%
Total 207000
Budgeted profit forecast
It refers to forecasting the profit that is being estimated and budgeted. It is a statement
which determine the amount of profit that is being budged and expected to be generated by the
organization (Gilchrist, 2018). With regard to Mr Sandwich, like other organizations budgeted
profit forecast will act as an assistance that will guide the Mr Sandwich to move in a determined
direction.
Particular £ £
Income from
sales 500000
Less: Variable
cost
Material 30000

Advertisement 2500
Electricity 43000
-75500
Contribution 424500
Less: Fixed cot
Insurance 5000
Rent 20000
Administration 8000
Electricity 7000
Bank interest 1500
Staff cost 20000
-61500
Profit 363000
Analysis:
From the above calculation of profit, it is cleared and analysed that the Mr Sandwich will
earn a profit of £363000 by having sales of £500000. This means that the Mr Sandwich’s net
margin is 72.6%. while contribution sales ratio is 84.9%.
Budgeted Cash flow
Cash flow refers to a statement that is concerned with the cash inflows and outflows of the
company (Jaafar, Hassan and Ismail, 2021). With regard to budgeted cash flow an analysis of the
budgeted cash inflows and outflows will be analysed so that Mr Sandwich can determine and
predict the cash position and perform its actions and business operations accordingly. This will
on the one hand enable the Mr Sandwich to have adequate availability of cash while at the same
time it will also lead to maintenance of cash.
Particular jan feb march april may june july august sep oct nov dec
inflow
sales 10 27 32 28 30 35 45 50 35 25 55 50
outflow
staff cost 3 3 3 3 3 3 3 3 3 3 3 3
set up cost 75
material 2 3.5 2 1 1.5 2.5 3.5 4 2.5
rent 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6
electricity 2 5 4 3 2 1.5

administration 7 7 7 7 7 7 7 7 7 7 7 7
advertisement 1.2 3 2.5 1.5 2.3 3.7 4
insurance cost 4 4 4 4 4 4 4 4 4 4 4 4
bank interest 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8
total outflow 94.4 24.1 24.4 25.4 21.4 18.9 20.4 19.7 21.9 24.6 26.9 19.9
net cash flow -
84.4 2.9 7.6 2.6 8.6 16.1 24.6 30.3 13.1 0.4 28.1 30.1
From the above cash flow it can be analysed that the net cash flow in the first month is
negative. This means that the cash inflows are lower than outflows. However, with the passage
of time the net cash inflows turn positive and remain positive which shows that the company’s
cash position is good. Or it would be right to said that the company’s inflows are quite enough
that it can manage its outflows.
Cost volume profit analysis
Breakeven point:
It refers to a situation and point where the cost of production will be equal to the revenue
of the product. It is a situation wherein the company will cover its entire cost of operation and
will fall in the situation where there will be no profit and no loss (Sintha, 2020). This means it is
the point of no profit and no loss situation or a point where the company will cover its entire
cost.
Calculation of BEP of Mr Sandwich:
Particular Calculation
Total fixed cost £61500
Contribution £424500
Number of sold units 20000
Contribution per unit £424500/20000=21.22
Break even units £61500/21.22=2898.20
Breakeven point in sales value 2898*25= £72450
Margin of safety (MOS)=
Budgeted output-BEP
=20000-2898
=17102
=17102/20000

= 85.51%
Thus, from the above analysis of the break even, it is found that Mr Sandwich will
achieve its break even at a sale of 2898 units which is again equal to the sales values of £72450.
The margin of safety with regard to Mr sandwich is 85.51%. this clearly means that the
sales of the units will fall at 85 percent before incurring sales. This is not to be said a good
margin of safety.
Key performance indicators
It refers to those indicators that are concerned with the measurement of performance of the
organization with reference to the actual performance. These indicators are taken as base and
standards against which the actual performance of the company is being measured (Harvey and
Sotardi, 2018). This means that every company including the Mr Sandwich perform their
business operation in such a manner that they can hit the target and indicators.
With regard to Mr Sandwich the KPI may include an average raise in the sales percentage
of its sandwiches by 10% every quarter. Likewise, it can also set KPI under which it will try to
mitigate the percentage of cost of operation by 12-15%, so that it can earn better share of profit.
Likewise, raise in the customer share or an average raise of 30 customers per month may also be
consider as KPI for the company. An increase in the percentage of customer satisfaction with
respect to the company’s product and sales may also be counted as KPI for Mr Sandwich.
However, along with setting up of external KPI, Mr Sandwich may also set the internal
KPI in the form of reduction of the product life cycle under which it will try that in minimum
time product will be delivered to its customers. As it will deal in fresh sandwiches so
maintenance of its quality will also be a KPI which it need to hit on every order.
Along with maintain and keeping KPI for the sales and the business a setting up of KPI in
terms of maintenance and raising of employee’s morale and satisfaction by 95% will also be
considered as KPI.
Thus, from the above analysis it can be said that setting and hitting of KPI will not only
lead to the achievement of objective of the Mr Sandwich but it will also assist towards the
direction of success so that better services will be rendered along with enhancing customer’s
satisfaction and share.

RECOMMENDATION
 From the above business plan, it can be recommended to Mr Sandwich that an adequate
focus or exploration towards the advertisement will lead to better success and growth
along with raising the percentage of sales. Although it will raise its expenses but at the
same time by creating awareness among the public regarding its products it will
definitely raise the sales and revenue percentage which will again automatically over the
expenses. Thus, focus over the advertisement and marketing is recommended.
 As the percentage of margin of safety is high with respect to Mr sandwich so it would be
recommended that a high focus towards the raising of sales of the product along with a
reduction of the fixed cost is highly recommended. Likewise, reduction of variable cost,
raising the selling price, substituting non-productive and useful product from the menu is
also recommended to Mr Sandwich. Thus, by enabling a decline in margin of safety, it
would better serve the sales and bear the situation of loss if any occurs.
 As customers are the main part and target of every business so along with changing
trends an exploration in the variety of products apart from fresh sandwiches will also be
recommended. In short an introduction of healthy version of the diet food would enable
the Mr Sandwich to better serve its customers.

REFERENCES
Books and journals
Gilchrist, R.R., 2018. Managing for profit: The added value concept. Routledge.
Harvey, H.B. and Sotardi, S.T., 2018. Key performance indicators and the balanced
scorecard. Journal of the American College of Radiology. 15(7). pp.1000-1001.
Jaafar, S.B., Hassan, H. and Ismail, S., 2021. Cash Flow Statement as a Tool to Predict Financial
Distress. Available at SSRN 3838158.
Kant, U. and Gaba, A.K., 2020. Unit-9 Business idea generation. Indira Gandhi National Open
University, New Delhi.
Kiseleva, and et.al., 2018. Risk management in business: concept, types, evaluation
criteria. Espacios. 39(27). p.18.
Picken, J.C., 2017. From startup to scalable enterprise: Laying the foundation. Business
Horizons. 60(5). pp.587-595.
Pylypenko, O., 2020. THE CONCEPT OF COST MANAGEMENT IN ENTERPRISES. on
economics, accounting and finance, p.61.
Sintha, L., 2020. Importance of Break-Even Analysis for the Micro, Small and Medium
Enterprises. International Journal of Research-Granthaalayah. 8(6).
1