Business Plan

J & J Bakers

Submitted to:
Mr. Jawad Javed

Submitted By:
M. Waqas Abdullah (9579)
Ghulam Mustafa (9605)
Ghulam Murtaza (9606)
Farhan Jamil (9578)
M. Qasim (9585)

Department of Management Sciences

National University of Modern Languages
Sector H-9 ISLAMABAD
 DEDICATION

The Business Plan is dedicated to our beloved mothers who have

always prayed for our successful carriers
 ACKNOWLEDGEMENTS

First of all we would like to thank Almighty Allah for his mercy that we were able to do
this work with full enthusiasm.

We are thankful to our loving parents and teachers whose invaluable prays, admire and
embodying attitude kept our spirit alive to strive for knowledge and integrity which enable
us to reach milestone.

We would also like to express enormous gratitude to our respectable teacher “Mr. Jawad
Javed” for providing the direction, all scope of this project and for helping us in refining
our effort and ideas.
Vision:

Become a socially responsible corporate citizen – demonstrating respect for its

customers, employees, and the community it serves by providing an open and holistic
atmosphere in its bakery along with purchasing locally produced and fairly traded goods,
donating goods or labor to community organizations and actively participating in
community initiatives

Mission Statement:

o J & J Bakers aims to be a cornerstone in the community creating a neighborhood

atmosphere where customers feel comfortable and become instant regulars.
o We are sensitive to the often over-looked population regarding their health and
provision of hygienic food and cater to their needs for healthy, delicious baked
prepared goods.
o We seek fair and responsible profit, enough to keep the company financially
healthy for the long term and to fairly compensate owners for their money and
risk.
o To make J & J a global brand, recognizable for uniqueness worldwide.
o To be an innovative and pioneer company continuously offering unique products
and interesting service concepts others cannot even dream of.

Company Summary:

J & J is a bakery, sweets and coffee shop managed by five partners. These partners
represent sales, management, finance and administration areas, respectively. The partners
will provide funding from their own savings, which will cover start-up expenses and
provide a financial base for the first months of operation.
Industry Analysis

J & J bakery competes in the Food Services Industry. In addition to competing with other
organic and non-wheat bakeries, it competes with all restaurants, delis, bakeries and
supermarkets for a share of its customers’ food dollar. J & J is most concerned with
competitors who differentiate their products and services with a healthy, organic focus.
Because this group is so large, J & J has chosen to limit its analysis to other gluten-free
bakeries.

Start-up Summary:

The primary expense to establish the business is the loan estimated at 5,000,000 to
purchase two adjacent shops for the business in Blue Area. The building was previously
used as a bakery and we plan to buy the used equipment along with the space. This cost is
also calculated into the loan estimate. All five owners are willing to invest in equal
proportions in company for meeting the other cost of start-up.
These costs include:
o Advertising brochures.
o Bakery ingredients.
o Insurance.
o Bakery accessories, i.e. paper bags, cartons, etc.
A ten-year Commercial loan will cover the rest of the required financing. The company
plans to build a strong market position in the twin cities, due to the partners' industry
experience and mild competitive climate in the area.

Company Ownership

J & J is incorporated in the province of Punjab and federal. It is equally owned in

percentage by its all five partners.
Start-up Summary

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

Start UP Cost:

Start-up Cost
Requirements

Legal
Premise renovation 100,000
Expensed equipment 1,555,000
Other 50,000

Total Start-up Expenses 1,730,000

Start-up Assets
Cash Required 5,000,000
Other Current Assets 500,000
Long-term Assets 4,000,000
Total Assets 9,500,000
Total Requirements 11,230,000
Start-up Funding
Start-up Expenses to Fund 1,730,000
Start-up Assets to Fund 9,500,000
Total Funding Required 11,230,000
Assets
Non-cash Assets from Start-up 3,000,000
Cash Requirements from Start-up 5,000,000
Additional Cash Raised 0
Cash Balance on Starting Date 1,500,000
Total Assets 9,500,000
Liabilities and Capital
Liabilities 117,500
Long-term Loan 5,000,000
Accounts Payable (Outstanding Bills) 90,000
Other Current Liabilities (interest @15%-One month) 62,500
Total Liabilities 5,270,000
Capital
Planned Investment (5 partners equal proportion) 2,500,000
Loss at Start-up (Start-up Expenses) 1,730,000
Total Capital 4,230,000
Total Capital and Liabilities 9,500,000

Start-Up Cost Diagram:

5000
4500
4000
3500
3000
2500
200
00
1500
1000
0
Expenses Assets Investment Loans
Products

J & J Bakers Plans to offers a broad range of coffee aim is to produce and sell all kinds of
breads, buns, rusks, cookies, biscuits, cakes, pastries, nimko and doughnuts etc.

In sweets, (traditional milk based Indian sweet products) we deal in all sorts of traditional
products like burfi, gulab jaman, rassgulla, patisa, jalebee, ladoo and rass malai etc.

Pizzas, patties, meat rolls, vegetable rolls, sandwiches will also be the part of our bakery
products.

We dedicate our shelves for retail of products like juices, soft drinks, pickles, jams and
jellies, dairy products, ice creams, canned vegetables and fruits, drinking water and cereal
products from the world leading brands. J & J will cater to all of its customers by
providing each customer coffee and bakery products made to suit the customer, down to
the smallest detail.

Business Expansion Plan:

In pursuit of our continuing efforts to provide our consumers with maximum range of
quality products we are:
o Doing backward integration for the provision of best quality raw materials for our
products. In this regard setting up a self-milk collection system and a dairy plant
for the production of raw cheese and khoya (the two main raw materials of all
sweet products) is our new move.
o Constructing a start-of-the-art bakery plant, where the facility and systems are
being set up to meet all the requirements of food safety system.
o Extending our retail outlets in Lahore and other cities of Pakistan to outreach the
awaiting consumers all over the country.
 o Providing best services as third party retailer to sell innovative food products to
be sold out at our outlets.

Sales Forecast

Our sales forecast assumes the following changes:

o Bread sales in the summer months will be slightly higher since more
people will be having BBQs and picnics requiring items such as hamburger and
hotdog buns.
o Bread and pastry sales will be higher in November and December because
of the food-oriented holidays.
o Coffee sales will be higher in winter months, and for summer months sales
of sodas and iced beverages will increase.

Market Analysis Summary

J & J'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 areas.

Market Segmentation

J & J focuses on the middle- and upper-income markets. These market segments consume
the majority of coffee, cold drinks, fast food and bakery products.

Local Residents

J & J wants to establish a large regular customer base. This will establish a healthy,
consistent revenue base to ensure stability of the business. The purpose is to attract and
target the customers who are the resident of the twin cities. Further segmentation of
customer is made on the basis of class of population. The upper middle and elite class of
the city is target of our business.

Tourists

The cities, Rawalpindi and Islamabad, are the where the visits are more frequents of the
people. The estimation provides that Tourist traffic will comprise approximately 35% of
the revenues. High visibility and competitive products and service are critical to capture
this segment of the market.

Target Market Segment Strategy

The dominant target market for J & J 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 Islamabad has relatively cool climate for five to six months out of the year, hot
coffee products are very much in demand. During the remaining warmer three and three
moderate months of the year, iced coffee products and juices are in significantly high
demand, along with a less 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.

Strength:

The Strength of J & J Bakers will the QUALITY, we believe in purity of all material used
in the manufacturing of each and every product we will sell. Provision of nutritious food
 in every way is the aim. Our motto “Our wealth is your health” truly serves the
customers.
J & J Bakers having prominent and the major strength is the unavailability or lack of the
sitting areas in café shops and bakery of such kind. Men coming from offices and
teenagers from their schools and colleges to buy some foodstuff, they don’t have to stand
while their desired order is prepared freshly in the kitchen beside.
o A new, innovative product or service.
o Company owned delivery vans for special occasions and home delivery.

Weakness:

o Lack of marketing expertise.

o Undifferentiated products or services (i.e. in relation to your competitors).
o Cannot take small orders with reference to home delivery.
o Heavily financed by financial institutions.
o The selling price is out of the reach of consumers from low income group
where the sweet consumption is relatively higher.

Opportunities:

We are an organized firm that plans to generate business in the wholesale baking industry
and the allied stuff like sugar, milk, wheat etc. We will welcome all inquiries from the
dealers of these products. Make a contact through the form shown above and we shall see
what deal can be made here.
o A developing market such as the Internet.
o Moving into new market segments that offer improved profits.
 o A market vacated by an ineffective competitor.
o It has ISO 9001 quality assurance certificates in sweets lines or divisions will be
our strength in future.

Threats:

The threat faced by the J & J Bakers that can hinder its performance is the existence of
Competitors. As it will exist in the competitive structure, it will face problems by its
competitors, Bread and Butter and United Bakers will be the biggest competitors of J & J
bakers. As they launch of new product, which cause the attraction of customers toward,
that product cause threat to J & J bakers at the early stage, later on the Rahat, Gourmet
and Nirala will be in Competition.
o A new competitor in your home market.
o Price wars with competitors.
o A competitor has a new, innovative product or service.
o Products of other bakeries and Methai Shops are cheap.
o Taxation in advertisement is increasing the marketing cost hence, reducing the
profits.
o Strong and established competition in Milk industry like CDL Foods and Nestle.

Competition and Buying Patterns

Competition in the local area is somewhat sparse and does not provide nearly the level of
product quality and customer service as J & J our bakery does. Local customers are
looking for a high quality product in a relaxing atmosphere. They desire a unique, classy
experience.
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 coffee-making 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.

Planned Motivation and Reward system to get employees motivated

and their retention

Special incentives:

o On the marriage of any employee, a gift of 10 kg sweets.

o On EID 1kg sweet will be given as free to each employee.

Team work and employee involvement:

o Team work, mutual trust and respect leads to personal growth and dynamic
improvements in organizational team work.
o Team work shifts the culture of organization into a more productive atmosphere.
o Strong believes on friendly environment.

Effects of team work on business:

o Less duplication of work and rework.

o Improved morale
o Greater efficiencies in processes.
o Less office miscommunication.
o Greater profitability.
Strategy and Implementation

J & J will succeed by offering consumers high quality coffee, Sweets, and bakery
products with personal service at a competitive price.

Competitive Edge

J & J’s competitive edge is the relatively high quality food, coffee and sweets as their of
competitors in the local area in this particular niche. Although the prices have been set
higher for all products as the target market is high and upper-middle class so it does
serves as the competitive advantage for the our business.

Mile Stone Achieved

Milestone Start Date Budget Manager Department

First Advertising Farhan
12/8/2009 250,000 Marketing
Campaign Jamil
Full-Service Coffee Muhammad
2/8/2009 455,000 Bakery
Bar Integration Qasim
Establishing a Lunch Ghulam
3/6/2009 20,000 Bakery
Menu Mustafa
Ghulam
Outdoor Cafe Seating 5/11/2009 300,000 Bakery
Murtaza
Totals 1,225,000
Sales Strategy

As the chart and table show, J & J anticipates sales of about Rs. 2,100,000 in the first
year,
Rs. 3,150,000 in the second year, and Rs. 5,000,000 in the third year of the plan.
Management Summary

Ghulam Murtaza has extensive experience in sales, marketing, and management, and is
having vast experience of marketing. Ghulam Mustfa brings experience in the area of
finance and administration.

Consolidated Sales Statement for 3 Years

Department wise:
Year 1 Year 2 Year 3
Total sales forecast 2,100,000 3,150,000 5,000,000
Cost of items sold
Retail items 200,000 330,000 600,000
Bakery Items 300,000 480,000 650,000
Sweet items 350,000 450,000 675,000
Fast food items 450,000 650,000 975,000
Other 200,000 140,000 325,000
Direct Cost of Sales 1,500,000 2,050,000 3,225,000
Estimated Profit (Gross) 600,000 1,100,000 1,745,000

Personnel Plan

As the personnel plan shows, J & JB expects to make significant investments in sales,
sales support, and product development personnel.

Personnel Plan
Year 1 Year 2 Year 3
Outlet Manager 20,000 22,000 25,000
Plant Manager 15,000 17,000 22,000
Finance Manager 35,000 39,000 45,000
Other 30,000 35,000 36,000
Total People 10 10 10
Total Payroll (in Rupees) 100,000 113,000 128,000

Projected Profit and Loss

As the Profit and Loss table shows, J & JB expects to continue its steady growth
in profitability over the next three years of operations.

Profit and Loss statement

Year 1 Year 2 Year 3
Sales 2,100,000 3,150,000 5,000,000
Direct Cost of Sales 1,500,000 2,050,000 3,225,000
Gross Margin 600,000 1,100,000 1,745,000
Gross Margin % 28.57% 34.92% 34.9%
Expenses
Payroll 100,000 113,000 128,000
Sales and Marketing and Other Expenses 90,000 70,000 50,000
Depreciation 25,000 25,000 25,000
Utilities 20,000 22,000 27,000
Total Operating Expenses 235,000 230,000 230,000
Profit Before Interest and Taxes 365,000 870,000 1,150,000
Interest Expense 45,000 45,000 45,000
Earning before taxes 320,000 825,000 1,105,000
Taxes Incurred 7,700 54,450 63,700
Net Profit 312,300 770,500 1,041,300
Net Profit/Sales 14.87% 24.46% 20.826%

Cash Flow:

The cash flow statement is given below

Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash Sales 2,100,000 3,150,000 5,000,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending 260,000 450,000 660,000
Bill Payments 90,000 115,000 120,000
Pay rolls 100,000 113,000 128,000
Subtotal Spent on Operations 450,000 678,000 908,000
Long-term Liabilities Principal Repayment 0 500,000 2,000,000
Drawings 250,000 500,000 800,000
Net Cash Flow 1,400,000 1,472,000 30,92,000