Business Model Canvas for New Bakery - Case Study Example

Bakery Business Plan Name Executive Summary There seem a huge growth in the bakery business in urban and semi-urban areas due to the fact that people nowadays do not have time to prepare products at home; hence, they prefer purchasing from bakeries and visit restaurants. Therefore, the given business plan is expected to provide an overview of a bakery that we are going to open in Victoria region in Australia. The prime products entail: snacks, cakes, sweets, biscuits, nimko, and bread. For restaurants, coffee is also one of the product to complement the bakery products. The given assessment will provide overall plan including marketing, financial, technical, and human resources feasibility analysis. Table of Contents Executive Summary 2 Introduction 3 Business Model Canvas 4 Customer Segments 4 Value Proposition 5 Customer Relationships 6 Distribution Channels 7 Minimum Viable Product 7 Key Activities 8 Key Resources 8 Key Partners 9 Revenue Structure 10 Cost Structure 10 Feasibility Analysis 10 Market Feasibility 10 Technical Feasibility 11 Human Feasibility 11 Financial Feasibility 12 Introduction In this report a business plan for a chain of café is being proposed, with the first outlet being established inside of the Glen Shopping Centre in Victoria, Australia. This shopping centre and the community in the nearby areas which is developing at a rapid rate around it, presents a major business opportunity, that will provide a strong foundation for the expansion of the chain as well. The café is being proposed to be built right at the entrance of the shopping centre, and is planned to have an access from both inside and outside of the shopping centre, so that it is accessible to the customers both inside the mall as well as the residential or commercial customers outside. The main objective in establishing this café is to establish it as the prime choice for all the customers of the shopping centre, staff members and residents around the area. In this business plan, the details related to the operation of a single café outlet at the Glen Shopping Centre is being proposed. Based upon the success and profitability of the café and the time that it takes to break even, decision about establishing its other outlets in different other locations will be taken. This report describes some of the crucial aspects of the business plan, like the business model canvas, identification of the key aspects related to the business operations as well as the financial aspects of the business. This report also performs a brief feasibility analysis of the business operations as well, from multiple perspectives. Business Model Canvas A business model canvas is regarded as a strategic tool for the businesses, used primarily for start-ups or new business ventures and it identifies briefly and concisely, the key aspects associated with the business operations being proposed. In this section, the 10 key elements that are the main pillars of the business model canvas are being described. Customer Segments As already mentioned above, the location of this café makes it accessible to a large number of people which makes it an extremely lucrative business venture. The prime customer segment that it targets are the shoppers who visit the mall as well as the staff members who work there. As it is already established that the shopping centre targets those people who belong to the above average socio economic demographic, and a high level of disposable income, this is also the typical target for the cafes as well. With its focus on the healthy product range, clearly, an important behavioural profile of the target customer segment is health consciousness. There is no specific age related target profile for the target customers, and therefore, it also contains child friendly alternatives as well. In fact, families and young singles are one of the major proportions of the visitors to the shopping centre, and are therefore, a strong target base for the café as well. The café also provides take away beverage options, so that it can appeal to the customers, as they can shop or work on the go, while being able to enjoy the products. A large number of the customers who are targeted are also behaviourally targeted as social drinkers. In other words, for whom visiting cafes is a social activity, through which they can relax and unwind along with their friends. For such customers, the café provides a host of pick me up products, which are great as accompaniments with coffee and are not elaborate meal options. Value Proposition The main value proposition of this café is fresh and healthy snacks made available at affordable prices. The differentiating factor that this café offers is that instead of offering a large variety of sugar rich and unhealthy foods, like cakes and baked goods that usually the cafes offer, the focus of this café would be on providing a healthy range of snack alternatives for the customers, including, range of products that are lactose free and gluten free. Even though the healthy range of food items are priced slightly above the typical product offering that the cafes normally provide, the focus of the café is on value for money and customer convenience, so that it is able to establish a strong presence among the customers. Customer Relationships Customer service is one of the biggest aspects of the value proposition of this proposed café and therefore, ensuring successful customer relationships is one of the most significant areas of focus for it. The main highlight of the café is light and healthy food that is communicated to the customers through the various media to the customers, for example, the physical appeal and décor of the café, promotional activities, etc. It is also ensured that the customers are provided the highest levels of service, in order to maximize their satisfaction and thus repeat business. As the place caters to the need of a wide variety of age groups, there are two different areas constructed, within the café. One which is suitable for children, having special arrangements for entertainment, like colouring sheets, small puzzles to be solved by the entire family and other options for engagement. The seating in this section is also child friendly. The other section on the other hand is more for the loungers, and socializers, and the seating arrangements are made accordingly. This separation also ensures that both of the target customers can have a good time, without being affected by the other customers present there. Emphasis is also made on receiving feedback from the customers, and implementing them. Customers are provided with a small coupon, which promises them a free small drink or snack on their next visit. This also ensures that an incentive is provided to the customers for repeat visits as well. Distribution Channels Since it is a café, all the products are sold directly to the customers at the point of sale, without requiring any external distribution channel to reach out to the customers. As the location of the café would be quite central, it is expected that tit will have an access to a large number of customers as well. However, for the sourcing of the supplies the following approach is used. The sourcing of long shelf life products, like coffee sugar, salts, etc. is performed by quality wholesalers, from where cost savings can be achieved. However, as the focus of the cafe is to provide fresh and healthy food, rest of the items are prepared in house and depending upon the depending upon the demand. Two trained cooks are employed in the café who will be carrying out the food preparation and would be implementing the standardized recipes. The perishable items, like milk, bread, vegetable, etc. are sourced from the local markets. Minimum Viable Product There are two categories of minimum viable products which are applicable for the café. First is the range of coffee which clearly are obvious. The second is the range of healthy snack and beverage options, that add to the value proposition of healthy meal for the customers. Without this category of products, it will be difficult for the café to differentiate itself from the other cafes which are competing with it. Therefore, a range of coffee products, beverages, light healthy snacks and a product offering customized for children are some of the minimum requirements for the café to operate successfully and communicate the right message to the customers, that the place is: Children friendly Provides a nice hang out place for friends and families Provides fresh and healthy snacks at affordable rates Key Activities The key activities identified for the successful operation of the café are as follows: Staff employment and training: As already mentioned in the previous sections, customer engagement and satisfaction are one of the biggest aspects related to the successful operation of this café. Therefore, it is necessary that the staff that is hired for this business are fully trained and are made aware of the business values that they need to exhibit to the customers. Kitchen Staff training and recipe finalization: Since the snacks are being created fresh and in house, it is also important to train the kitchen staff on the finalized recipes and how to accurately forecast the demand, so that food wastage is minimized, while at the same time, ensuring that the customer demands are met. The training for the recipes is important so as to ensure a consistent taste and quality is provided to the customers every time, as repeat purchases is one of the important aspects for the café to run successfully. Ingredient sourcing: Sourcing the fresh ingredients is one of the key activities to be carried out for the café operation. Customer relationship Management: this will ensure that repeat business is generated. This consists of multiple activities, like collecting feedback from the customers, providing them great service, promotional or loyalty programs for repeat visits, etc. Key Resources The key resources for the café can be broadly categorized as following: Human Resources: This is one of the most crucial aspects related to the business as the human resource are the key to provide superior service to the customers along with good quality food to them. Having the right employees with the apt training and skill set is the key for the café. Financial Capital: Clearly, as the café is being proposed to be operated from a prime location, the financial cost associated with it are bound to be significant. In addition to that, hiring of the right staff, establishing the furniture, appliances, etc. will require further financial capital. The promotion activities, working capital, etc. would require a substantial initial investment. Relationship with suppliers and Wholesalers: The ability to form long terms valuable partnership with the suppliers is one of the prime aspects to keep the cost of operations down. This will not only enable the business to provide a more affordable price to the customers, but it will also significantly impact the margins that the café would have. Key Partners As already stated above, one of the major partners for the café operation are the suppliers and wholesalers. The motivation for establishing a long term business partnership with them has three main advantages. Firstly, as mentioned above, it might impact the business margins, that will result in financial gains. The second important function is that in the long run it will provide the café to order supplies on a just in time (JIT) basis, which will reduce its inventory management and handling. Third major importance of this business relationship is that it will eliminate the degree of operational risk that might be present in the café operation, as a long term partnership will imply less variability and more reliability in the business transactions. Yet another key partner or stakeholder in the business are the employees. Café operation is technically a combination of both product as well as service and therefore, the employees who are in fact interacting closely with the customers are an important stakeholder group from a business perspective. Ensuring the employee engagement and satisfaction implies that a greater effort from them towards the customers, which in turn helps in the propagation of the business and generation of a positive word of mouth. Revenue Structure The revenue objectives are as follows: 25,300 units at 3 farmers markets 7,500 units at Bulk Cheese warehouse 7,000 units at country oven 30,000 units at retail shop Objectives: to attain annual revenue of 12,400 for first year. Cost Structure As we are going to start the bakery from scratch, we are required to purchase all the material, which is required for to start baking. The tools that are required on regular basis include ovens, mixers, and other basic necessities. The cost of Building, which will be of 1000ft2 will be equivalent to around $85,000. The working capital will be around $1200, and the total cost of equipment will be 17, 600. This shows that the total initial capital required will be $103,800. Feasibility Analysis Market Feasibility The bakery will concentrates on local markets of Victoria, with a special emphasize on the ice cream parlours and restaurants. The areas as discussed above, is also perfect to open a bakery and people are expected to purchase from there. Market Segmentation The market will be divided into four diverse psychographic groups that include: Group Behaviour Comfort Creatures White collar employees These are driven by success and prestige. Career-oriented, has less access to homemade foods. Celebrators People who always want to celebrate special occasions such as birthday’s anniversaries, Valentine’s Day, graduation, etc. They will purchase cakes and sweets. Also, people who visit them will purchase sweets and cakes. Soccer Moms Working mothers who has busy schedule prefer purchasing bakery products for children snacks as they do not get enough time to prepare at home. Outside Eaters Who are fond of trying outside eateries and can easily spend $50 for tasty food. Technical Feasibility The bakery should have 24X7 power back-up due to the always running instruments that is stopped in between can lead to wastage of raw material or semi-finished product. Power back-up is also required in restaurant. There must always be additional equipment so that the work will keep going without any hurdles. Human Feasibility The following chart shows the skills required for diverse positions in a bakery: Job Title Wage Rate Skill Level Owners/Managers $3,800.00/month Must have a prior experience of 2 years in administering hospitality sector Bakers $15.00/hour Trained from formal culinary school in the field of pastry and bakery Can work under pressure. Can work in morning shift. Prior experience of 2 years Bakers’ Assistants $12.50/hour Trained from formal culinary school in the field of pastry and bakery Can work under pressure. Can work in morning shift. Prior experience of 2 years Clerks $10.00/hour Mathematical Proficiency Able to read, write, and talk in English. 1 year of experience. Servers $12.50/hour Able to read, write, and talk in English. Having experience in hospitality sector. Financial Feasibility The estimated cost of manufacturing will be around $60,000 AUD. Total Manufacturing Cost 2017 Total Direct Labour $29,500 Total Direct Material $18,700 Manufacturing Overhead $11,440 Total $59,640 Read More