BUSINESS PLAN Jollys Java and Bakery a coffee and bakery retail shop I.

I.THE BUSINESS The Description of the Business Jolly's Java and Bakery (JJB) is a start-up coffee and bakery retail establishment located in M. Bacalso Avenue, Cebu City. JJB expects to catch the interest of a regular loyal customer base with its broad variety of coffee and pastry products. The company plans to build a strong market position in the town, due to the partners' industry experience and mild competitive climate in the area. JJB aims to offer its products at a competitive price to meet the demand of the middle-to higher-income local market area residents and tourists. Location of Business JJB is incorporated in M. Bacalso, Cebu City. It is equally owned and managed by its two partners. Mr. Austin Patterson has extensive experience in sales, marketing, and management, and was vice president of marketing with both Jansonne & Jansonne and Burper Foods. Mr. David Fields brings experience in the area of finance and administration, including a stint as chief financial officer with both Flaxfield Roasters and the national coffee store chain, BuzzCups. The company intends to hire two full-time pastry bakers and six part-time baristas to handle customer service and day to day operations. Products and Services JJB offers a broad range of coffee and espresso products, all from high quality Columbian grown imported coffee beans. JJB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail. The bakery provides freshly prepared bakery and pastry products at all times during business operations. Six to eight moderate batches of bakery and pastry products are prepared during the day to assure fresh baked goods are always available. II. The Marketing Plan The retail coffee industry in the Philippines has recently experienced rapid growth. The cool marine climate in southwest Washington stimulates consumption of hot beverages throughout the year. JJB wants to establish a large regular customer base, and will therefore concentrate its business and marketing on local residents, which will be the dominant target market. This will establish a healthy, consistent revenue base to ensure stability of the business. In addition, tourist traffic is expected to comprise approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.

Financial Considerations

JJB expects to raise $110,000 of its own capital, and to borrow $100,000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required. JJB anticipates sales of about $491,000 in the first year, $567,000 in the second year, and $655,000 in the third year of the plan. JJB should break even by the fourth month of its operation as it steadily increases its sales. Profits for this time period are expected to be approximately $13,000 in year 1, $36,000 by year 2, and $46,000 by year 3. The company does not anticipate any cash flow problems.

S. W. O. T. Analysis JJB aims to offer high quality coffee, espresso, and pastry products at a competitive price to meet the demand of the middle- to higher-income local market area residents and tourists. Keys to success for JJB will include: 1. Providing the highest quality product with personal customer service. 2. Competitive pricing. Sources of Merchandise JJB sources out its merchandise from well known commissary in Cebu, including, among others coffee producers in the mountain areas of Cebu. The baking needs will also be addressed by Caro and Marie Cebu. The equipment in the shop will be supplied by Sun Gold Cebu. Pricing JJB will incorporate competitive pricing scheme, with the current pricing scheme of the competitors to consider. Competitors

Competition in the local area is somewhat sparse and does not provide nearly the level of product quality and customer service as JJB. Local customers are looking for a high quality product in a relaxing atmosphere. They desire a unique, classy experience. Leading competitors purchase and roast high quality, whole-bean coffees and, along with Italian-style espresso beverages, cold-blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, and a line of premium teas, sell these items primarily through company-operated retail stores. In addition to sales through company-operated retail stores, leading competitors sell coffee and tea products through other channels of distribution (specialty operations). Larger chains vary their product mix depending upon the size of each store and its location. Larger stores carry a broad selection of whole bean coffees in various sizes and types of packaging, as well as an assortment of coffee- and espresso-making equipment and accessories such as coffee grinders, coffee makers, espresso machines, coffee filters, storage containers, travel tumblers and mugs. Smaller stores and kiosks typically sell a full line of coffee beverages, a more limited selection of whole-bean coffees, and a few accessories such as travel tumblers and logo mugs. During fiscal year 2000, industry retail sales mix by product type was approximately 73% beverages, 14% food items, eight percent whole-bean coffees, and five percent coffeemaking equipment and accessories. Technologically savvy competitors make fresh coffee and coffee-related products conveniently available via mail order and online. Additionally, mail order catalogs offering coffees, certain food items, and select coffeemaking equipment and accessories, have been made available by a few larger competitors. Websites offering online stores that allow customers to browse for and purchase coffee, gifts, and other items via the Internet have become more commonplace as well. Promotion Promotion of JJB include radio promotions, print ads, and a month long promo during the opening of the shop. Channel of Distribution Distribution would be limited in the one shop at M. Bacalso Avenue Cebu City. During the first year of operations, JJB would venture into delivery service. This is one effective mode of distribution. III. FINANCIAL PLAN Sources and applications of fundings JJB expects to raise $110,000 of its own capital, and to borrow $100,000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required. JJB anticipates sales of about $491,000 in the first year, $567,000 in the second year, and $655,000 in the third year of the plan. JJB should break even by the fourth month of its operation as it steadily increases its sales. Profits for this time period are expected to be approximately $13,000 in year 1, $36,000 by year 2, and $46,000 by year 3. The company does not anticipate any cash flow problems. Capital Equipment List

Balance Sheet The following is a projected Balance Sheet for JJB.

Break - Even Analysis

JJB's Break-even Analysis is based on the average of the first-year figures for total sales by units, and by operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. These conservative assumptions make for a more accurate estimate of real risk. JJB should break even by the fourth month of its operation as it steadily increases its sales. Income Statement As the Profit and Loss table shows, JJB expects to continue its steady growth in profitability over the next five years of operations.

Detailed Monthly for the First Year

JJB is a start-up company. Financing will come from the partners' capital and a ten-year SBA loan. The following chart and table illustrate the company's projected initial start-up costs.

Explanations JJB offers a broad range of coffee and espresso products, all from high quality Columbian grown imported coffee beans. JJB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail. The bakery provides freshly prepared bakery and pastry products at all times during business operations. Six to eight moderate batches of bakery and pastry products are prepared during the day to assure fresh baked goods are always available. Cash Flow Projections As the Profit and Loss table shows, JJB expects to continue its steady growth in profitability over the next three years of operations.

Historical Financial Reports for Existing Business Balance Sheet for the past 5 years

Income Statement for the past 5 years

Tax Returns

Supporting Documents Resume of Proposed Personnel

AMY SMITH 123 Main Street Atlanta, Georgia 30339 Home: (555) 555-1234, Cell: (555) 555-1235 asmith@sample~resume.com Objective: Seek the Position of Pastry Chef SUMMARY: Highly knowledgeable, creative and resourceful Pastry Chef with huge background in the preparation and service of gourmet pastries and other foods for catering functions and special pastries for meals/banquets. Summary of Qualifications

than six years experience. techniques, including baking. restaurants.

Sound ability to communicate and work with others. food, and service techniques.

preparation. specifically related to catering and specialty restaurants. standardize recipes for pastries and desserts. Proven ability to supervise junior workers. -depth ability to interpret and work within pre-established budget.

Pastry Chef

Assist in planning, coordinating, and directing a food service catering operation relating to pastries and desserts. Assist in planning, coordinating, and directing specialty pastry programs. Research current trends for pastries and desserts. Assist in the development and standardization of recipes. Order and requisition food and supplies in accordance with established specifications. Practice good public relations with students and guests.

Provide adequate information to food service units regarding menu changes and individual cateringproblems. Prepare recommendations for improvements in catering procedures necessary to maintain an efficient operation and good customer relations. Assist in planning and implementing a marketing strategy for catering services available, especially as it relates to specialty pastry programs. Make budget recommendations regarding food cost and labor cost; follow and implement the budget as established for the catering operations by the catering manager. Oversee the service standards as they relate to catering, special events, and specialty pastry programs. Supervise clerical staff or lower rank employees as assigned. Perform other related duties as assigned.

Assistant Pastry Chef

Assisted in the preparation of pastries and desserts for catering operations. Assisted in the preparation of dessert items for dining services units and specialty restaurants. Assisted in preparing items for the Pastries-to-Order program. Assisted in the standardization of recipes and quality control of the products. Recommended improvements in food preparation methods to obtain better products. Assisted in the implementation of budgets. Assisted in ordering food and supplies in accordance with established procedures. Assisted in the maintenance of proper sanitation techniques and practices. Served food as requested. Performed other related duties as assigned.

Education Bachelor's Degree in Catering & Hotel Management University of New York (2000) Legal Documents license, permits, etc. Operational The first license you should check into is an operational license from your county. Many counties require them for any business that operates within its limits. Essentially, it registers your bakery with the county and gives you the right to run your business. Display requirements may vary by county, but some require it be on display where customers can see it while others just require it to be on file at your bakery's premises. Health Department As a food establishment, your bakery has to follow your county's health department guidelines. It issues you a permit once it verifies that you're baking and serving food under its regulations. To keep your health permit, you submit to and pass regular inspections by the health department. Like the operational license, the health permit has special display requirements depending on the county. Most counties require that you keep your permit in an area customers can easily see it. Food Handlers Permits

In addition to a health permit for the bakery, anyone who handles food in your bakery may need a food handler's permit. Usually, the county distributes these to those who have taken a class about safe food handling procedures. The county also requires you to update these permits each year. Employees who don't handle food, such as those who work exclusively at the register or handle marketing, don't need a food handler permit. Assumed Business Name Many municipalities require an assumed business name (or "doing business as") license unless you are using your entire full legal name in your business name. Others only require that your bakery be a recognizable version of your first and last name. If your bakery doesn't fall under your municipality's rules for using your name, you need an assumed business name permit. This keeps your full legal name and the name of your bakery on file at the county clerk's office where citizens can find out who exactly owns a business. Bureau of Internal Revenue (BIR) Every business enterprise has to register with the BIR for taxation purposes. The Bureau will furnish your business with its own tax identification number (TIN) and the authority to print receipt, invoices, and others. Register at: Bureau of Internal Revenue (BIR) BIR National Office, Agham Road, Diliman, Quezon City Trunkline: (+632) 981.7000 / 981.8888 Email: contact_us@cctr.bir.gov.ph Website: www.bir.gov.ph

Social Security System (SSS) An employer, or any person who uses the services of another person in business, trade, industry, or any undertaking must be registered with the SSS. Register at: Social Security System (SSS) SSS Building, East Avenue, Diliman, Quezon City Tel. Nos.: (+632) 920.6401 / 920.6446 Email: member_relations@sss.gov.ph Website: www.sss.gov.ph Department of Labor and Employment (DOLE) Business establishments with five or more employees are encouraged to register with the DOLE for the purpose of monitoring the firms compliance with labor regulations. Registration is required for firms with 50 or more workers. The Bureau of Local Employment administers the registration of establishments.

Register at: Department of Labor and Employment (DOLE) 2/F, Dy International Building, San Marcelino cor. Gen. Malvar St., Malate, Manila Tel. Nos.: (+632) 339.2013 / 527.8000 Email: osec@dole.gov.ph Website: www.dole.gov.ph

Other Agencies Depending on the type of products, certain companies are required by law to register with other government agencies. The following is a list of regulatory bodies: a. For those engaged in the export of coconuts and coconut by-products Philippine Coconut Authority (PCA) Export Division Elliptical Road, Diliman, Quezon City, Philippines Tel. Nos. (+632) 928.8741 to 45 Email: pca_cpo@yahoo.com.ph Website: www.pca.da.gov.ph b. For all manufacturers of garments and textile for exports

Garments and Textile Industry Development Office (GTIDO) 4F Industry and Investments Building 385 Sen. Gil J. Puyat Avenue, 1200 Makati City Tel. Nos.: (+632) 976.5723 / 976.5700 loc. 5523 Fax: (+632) 976.5722 E-mail: gtido@dti.gov.ph

IV. PRODUCTION PLAN Number or volume of intended production Production of sellable breads is projected to begin at the beginning of the next year. Supply and Demand Raw ingredients will be ordered for twice a month delivery from Claro and Marie at which time a two week production schedule will be drawn up by the proprietor/baker.

Production Space Available Ingredients will be stored in a dry storage area and in a walk in cooler (already on the proposed premises). Rent of the facility will be $1,050 per month with utility costs running approximately $725/month. Inventory Control Scheduling will begin with three large bakes per week (MWF) and two small bakes (T,TH). Due to the extended shelf life of sourdough breads, product can be sold for two days before staling. Each bake day the baker will bake breads in a deck oven. The oven provides intense, even heat and a controllable amount of steam injection, allowing tremendous control of crust crispness. Everything from soft white sandwich breads to thick crusted, dense savory breads to sweet baked goods can be perfectly baked in this oven. While breads are baking, the baker will begin mixing the long fermenting doughs to be baked off the next day. Labor saving equipment including a dough divider and a bread moulder makes this possible. Hot breads will begin coming out of theoven by 7:00 AM, and all baking will be finished by 10:00 AM. The storefront will open at 9:00 AM and close at 6:00 PM Monday through Friday. Saturday hours will be 9:00 AM to 4:00 PM for sales only. Part time employees will work the counter and assist with store maintenance during peak hours while the baker is baking. A beverage cooler and coffee machine will encourage convenience sales at the register. Breadcrafter will economize on bookkeeping costs by handling its payroll duties in house. Year end bookkeeping will be handled by a professional accountant. V. ORGANIZATIONAL PLAN Goals and Objectives JJB aims to offer high quality coffee, espresso, and pastry products at a competitive price to meet the demand of the middle- to higher-income local market area residents and tourists. Keys to success for JJB will include: 1. Providing the highest quality product with personal customer service. 2. Competitive pricing. Strategies JJB strategies include, Market Analysis, Segmentation, Market Target and Service Analysis Market Analysis Summary JJB's focus is on meeting the demand of a regular local resident customer base, as well as a significant level of tourist traffic from nearby highways. Market Segmentation JJB focuses on the middle- and upper-income markets. These market segments consume the majority of coffee and espresso products.

Local Residents JJB wants to establish a large regular customer base. This will establish a healthy, consistent revenue base to ensure stability of the business. Tourists Tourist traffic comprises approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market. Market Analysis The chart and table below outline the total market potential of the above described customer segments. Target Market Segment Strategy The dominant target market for JJB is a regular stream of local residents. Personal and expedient customer service at a competitive price is key to maintaining the local market share of this target market. Market Needs Because Cebu City has a cool climate for eight months out of the year, hot coffee products are very much in demand. During the remaining warmer four months of the year, iced coffee products are in significantly high demand, along with a slower but consistent demand for hot coffee products. Much of the day's activity occurs in the morning hours before ten a.m., with a relatively steady flow for the remainder of the day. Service Business Analysis The retail coffee industry in the Philippines has recently experienced rapid growth. The cool marine climate in Cebu City stimulates consumption of hot beverages throughout the year. Coffee drinkers in the Pacific Northwest are finicky about the quality of beverages offered at the numerous coffee bars across the region. Despite low competition in the immediate area, JJB will position itself as a place where customers can enjoy a cup of delicious coffee with a fresh pastry in a relaxing environment. Strategy and Implementation Summary JJB will succeed by offering consumers high quality coffee, espresso, and bakery products with personal service at a competitive price. Competitive Edge JJB's competitive edge is the relatively low level of competition in the local area in this particular niche. Type of Business Organization Austin Patterson has extensive experience in sales, marketing, and management, and was vice president of marketing with both Jansonne & Jansonne and Burper Foods.

Advantages and Disadvantages David Fields brings experience in the area of finance and administration, including a stint as chief financial officer with both Flaxfield Roasters and the national coffee store chain, BuzzCups. Flow Chart of Duties and Responsibilities of Officers and Employees Personnel Plan As the personnel plan shows, JJB expects to make significant investments in sales, sales support, and product development personnel.

VI. MANAGEMENT PLAN Goals and Objectives Starting or running a bakery will likely challenge even the savviest businessperson because profit margins on baked goods tend to be relatively low and ingredient pricing fluctuates depending upon the price of fuel and commodities. Setting measurable business objectives with deadlines will help you draw a road map to success with your bakery, whether you are launching a gluten-free cupcake service or a storefront bakery in a strip mall. Location One of your early objectives in starting a bakery should be to find a location that satisfies your specific needs, which will vary according to what kind of bakery you are starting. For example, if you are starting a storefront bakery that will rely heavily on foot traffic, you will want to find a space in an area with a lot of pedestrian traffic. If you are starting a boutique mail-order bakery specializing in baked goods safe for people with peanut allergies, you will need to find a nut-free commercial kitchen to rent. Start Date Set your official business start date as one of your business objectives. Setting a specific date for your bakery opening will not only help make it more "real" in your mind, it will also give you an extra nudge to keep moving on your plans in order to make that deadline. Plan an event to make your bakery's start date extra

special. For example, you could hold a private tasting for invited local food critics and bloggers, followed by a community party with free mini-cupcakes or a discount on your offerings. Profit Make a goal to reach a certain level of profit in a certain period of time, allowing for the momentum-gathering that many new businesses need in their first few months. Or you could set your objective to reach a certain sales figure. For example, you could follow the example of David Arrick, founder of The Butch Bakery, who originally aimed for $5,000 per month in sales, according to "Entrepreneur" magazine. Community Service Establish an objective related to serving the community in which your bakery will be located, such as donating breakfast items to a local women's shelter or starting a baking apprenticeship program for underprivileged teens. This objective would be particularly appropriate if you are a staunch community activist or if you plan to make your commitment to community service part of your bakery's brand image. Strategies Profitability Obviously, when writing business goals, money is a consideration. A goal might be to increase overall profitability. Objectives might then focus on ways to increase revenue and/or decrease expenses in order to maximize yearly profits. Examples of viable objectives could include to raise the average ticket amount from $4.42 to $5.50, to increase upsales of bakery merchandise by 20 percent and to decrease overall utility bills by 6 percent by installing highly efficient appliances and light bulbs. Increase Awareness Create goals to increase overall community awareness. Although your goal may be generalized, your objectives will most likely be marketing-oriented. Goals might include to increase overall regional awareness of specific expertise or menu items. Objectives might then include entering an annual citywide baking competition with media coverage. Consider what sets your bakery apart from others and educate the masses; perhaps you make the best bite-sized cupcakes in the county or provide stellar customer service. Production Production goals could have efficiency or operational implications. Goals may include educational, personnel or equipment elements. For example, if your goal is to increase cupcake production by an average of 10 percent each day, consider processes to implement to achieve this goal. Write them into your objectives. Additional Areas There are numerous areas for goal setting and objectives. It is important to consider your priorities as well as short-term and long-term plans. Other areas to delve into might include customer service, community involvement and company culture. Business Policies for Customers

Customer Strategy & Relationships (Marketing) is a good place to start. Most businesses talk about the customer being the most important part of any business. Well, if your customer is so critical, have you mapped out a clear customer strategy and customer relationship process? Do you have customer strategy procedures for developing awareness and education of your business in the marketplace? The Bizmanualz Sales and Marketing Policies and Procedures Manual provides sample policies and procedures to help you set marketing strategy, marketing tactics, and marketing planning to cover the first part of your marketing sales funnel awareness and education. Business Policies for Employees Employee Development & Satisfaction is essential to your business because your employees are the ones that talk to and develop your customers. The Bizmanualz Human Resources Procedures Manual provides example procedures for hiring, administration (e.g., personnel records, compliance), compensation, and the most important part developing your employees. The HR manual also includes a sample Employee Handbook and an HR Managers manual to provide a complete discussion of human resources. Keeping employees and facilities safe is the focus of the Bizmanualz Security Procedures Manual, which includes coverage of guard force management, employee conduct, emergency operations, protection, and safety. VII. ANNEXES Business Ratios The following table represents key ratios for the retail bakery and coffee shop industry. These ratios are determined by the Standard Industry Classification (SIC) Index code 5812, Eating Places.