Professional Documents
Culture Documents
EDWARD INGRAM
AUGUST 23, 1988
TABLE OF CONTENTS
. . . . . . . . .
Product . . . . . . . . . . . .
Market
............
Business Design . . . . . . .
Insurance . . . . . . . . . . .
Introduction
.
.
.
.
.
. . . . . . . . .
........
........
. . . . . . . . .
........
. . . . . . . . . . . . . . . . . .
Advertising . . . . . . . . . . . . . . . . . .
Financial . . . . . . . . . . . . . . . . . . . .
Conclusions . . . . . . . . . . . . . . . . . .
Exhibits . . . . . . . . . . . . . . . . . . . . .
Notes . . . . . . . . . . . . . . . . . . . . . .
Bibliography . . . . . . . . . . . . . . . . . .
Regulations
.
.
3
5
12
13
15
17
20
21
38
39
INTRODUCTION
The peerless sensation of something icy and flavorful
melting on the tongue is not new to the world's food lovers.
A delicacy once reserved for nobility, American's eat more
than 800 million gallondof ice cream each year.
Moreover,
fying ones own taste buds, almost everyone has a fond memory of a Birthday party, picnic or romance which included
some form of ice cream.
Another American passion is the dream of owning ones
own business.
orities in life, controlling ones own destiny, being independent from direct supervision and receiving profits from
ones own labors are a few of the rationales for this dream.
This research paper unites these two passions; the
love for ice cream and the dream of owning ones own business.
soft serve ice cream parlor near the north end of Hagerstown,
Maryland.
This feasibility study describes the product which the
ice cream parlor will offer to the public.
1
'
PRODUCT
How-
In addition, the
--
candy.
c'
MARKET
Markets consist of buyers which differ in one or more
respects.
This geograph-
In addition,
Access in an6
additional information.
The projected growth of the proposed market is extremely
promising.
In the Maug-
ansville area there are 2 3 single family homes and 40 multifamily homes approved for development.
Slightly northeast
One half of a
jl
! I
units.
Combined, these six developments increase the housing
I1
I
(-:
'L
four of the six proposed sites and development of the remaining two areas is scheduled to begin by the end of the 1 9 8 8
calendar year.
In April of 1 9 8 8 a developer showed the Planning and
Zoning Commission of Hagerstown his plans for a 40 acre
tract of land on Route 11 within city limits.
His plans
Therefore, this
In addition, the
$1.25.
Although
BUSINESS DESIGN
Available to the entrepreneur are three basic forms of
ownership:
The
Partner-
DisaGvantages
10
Disadvantages in-
clude double taxation, expense and difficulty of organization and government regulations.
Probably the best form of organization for the small
ice cream parlor is a proprietorship.
Although corporations
in a small business such as the ice cream parlor would probably want to maintain the authority rather that share it
with a partner.
Personnel needed for the ice cream parlor would. vary
according to the season.
ll
can be given to this category of employee to justify the
higher rate needed to secure these people.
The manager
Restaurants
INSURANCE
By law, if a person has employees, they must carry
Workmen's Compensation insurance.
Workmen's Compensation
The expense to
property and
three conditions:
(not including
ibility by a contract which harms the insured and tort liability which covers harm due to negligence.
An adequate
12
REGULATIONS
One of the major obstacles of opening the ice cream
parlor is getting beyond the regulations of the Health
Department.
to opening, the business must submit a "finishing" schedule which outlines the materials which will be used to
finish the walls, ceilings and floors.
The materials
A list of food
service equipment must be submitted including the manufacturer, model number and a descriptive pamphlet for
each piece.
inspected and if city water and sewer are not used, then
there must be approval.
In addition, the
,--.
14
c-
fee,
the operator will receive a Sta-te registration certificate with an identification number and forms to include
with sales tax collections.
F--
.-
and is re-
..-.
ADVERTISING
The ice cream parlor's most important advertising
objective will be to inform customers of its existence.
Two types of customers must be informed; those who live
in the target market and those who will be traveling
through the target market.
One of the
From
16
(Exhibit # 8 ) ,
Also
FINANCIAL INFORMATION
The sales forecast is comprised of an estimate for
the summer season (June through August) (Exhibit
#lo),
divided by an estimated time it takes to wait on a customer (two and one half minutes) to produce the number of
purchasing customers distinguished by purchasing type
(A = small purchase; B = large purchases).
An ice cream sale projection is calculated by
multiplying the estimated number of purchasing customers
by the average sale
Cake
ia
According to the projected Income Statement, (Exhibit
#13), the ice cream parlor will lose more than $34,000.00
Combined, these
Also,
the cost of goods sold estimates assume the ice cream machine
can produce the product for $ .07 per ounce.
Salesman for
to be very elastic, therefore, increasing prices will sacrifice sales on an already marginal gross profit margin.
In
There
-I-
----
19
..L_
,-.,
...
CONCLUSIONS
The ice cream parlor is not feasible as proposed.
An optimistic projection of revenues nets to a loss of
almost $31,000.00 on the Income Statement.
Moreover,
Dairy Queen/Brazier
20
21
EXHIBIT 1
MENU
Customer Type
A
B
.20
.10
.20
.10
.10
.04
.04
.04
.03
.04
.08
.03
.13
.05
.05
.12
.05
.08
.08
.08
.06
.08
.16
.06
Item
Cones
Cones Dipped
Sundae
Shakes
Floats
Banana Split
Brownie Dessert
Strawberry Shortcake
O l d Fashion Soda
Parfait
Candy Shake
Candy Sundae
Cakes
Soft Drinks
Price
.70
.85
1.15
1.20
1.20
1.70
1.70
.60
.75
1.05
1.05
1.05
.45
.60
.80
.95
.95
1.80
1.50
1.35
1.25
8.50
.60
.50
1.70
1.70
1.50
2.25
1.85
11.50
I
-
70
22
8-
'..-
t----
23
EXHIBIT 3
:k
Proposed Location
24
EXHIBIT 4
Additional Housing
Planned
Approved
26
EXHIBIT 6
COMPETITION
27
EXHIBIT 7
Work Hours Paid.
Winter
1
1
1
1
1
1
-1
D
A
1
1
1
1
1
2
2
1
1
1
1
1
2
2
1
1
1
1
1
2
2
Time
1
1
1
1
1
1
1
1
2
2
1
1
2
2
1
1
1
1
2
2
2
1
1
1
1
2
2
2
1
1
1
1
2
2
2
1
1
1
1
1
1
1
2
2
2
2
2
3
5
3
3
3
3
3
3
5
3
3
3
3
3
3
5
3
3
3
3
3
3
5
3
3
3
3
4
5
5
Total Hrs.
10
10
10
10
13
18
18
89
5 Employees
Summer
D
A
Y
M
T
W
T
F
S
S
2
2
2
2
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
Time
2
2
2
2
2
3
5
3
3
3
3
4
5
5
2
2
2
2
4
5
3
x
x
x
x
3
3
x
13 Employees
Winter: 3 @ $ 3 . 7 5 x 2280 hrs = $ 8550
2 @ 3 . 3 5 x 1102
=
3692
$12242
Summer: 3 @ $ 3 . 7 5 x 840 h r s = $ 3150
9146
10 Q 3 . 3 5 x 2730 h r s =
$12296
Total
31
31
31
31
38
44
49
255
28
EXHIBIT 8
.
.
a
...I
. . . .% deep
. . . 2 deep
3 r o l ~ ., . . 3 deep
cnI
COIS
Insertior
- Cols. 3
l.( 1. H o x 439
I O 0 Summit Avenue
MI). 2 1740
:Io I /7:19-5 I.? I
Ilagt-rstown.
1 COL
2 COL
Sunday, Xxxxxxxx XX
10 AeMe 10 P e M e
XXXX Pennsylvania Avenue
000~0000
Stop By ForA Taste!
29
EXHIBIT 9
Grand Opening
Celebration
Sunday, Xxxxxxx XX
10 A.M. - 10 P.M.
at
XXXX Penna. Ave.
3
3"
4g
4;
Copy Below
30
EXHIBIT 10
Summer Sales
TYPe
A
B
A
A
B
B
B
B
A
B
B
B
B
B
Period
Mon-Fri
Mon-Fri
Mon-Fri
Mon-Fri
Mon-Fri
Mon-Thu
Fri-Sat
Fri-Sat
Sat-Sun
Sat-Sun
Sat
Sat
Sun
Sun
Days
5
5
5
5
5
4
2
2
2
2
1
1
1
1
Time
Lines
10-12am
1
12- 2pm
2
2- 4pm
2
4- 6pm
2
6- 9pm
2
9-10pm
1
9-10pm
3
10-llpm
2
10-llam
1
11- 2pm
2
2- 7pm
2
7- 9pn
3
2- 9pm
3
9-1Opm
2
SM
600
1200
1200
1200
2700
240
360
240
120
720
600
360
1260
120
1 4 W k s SM
8400
16800
16800
16800
37800
3360
5040
3360
1680
10080
8400
5040
17640
1680
152880
;c[
31
EXHIBIT 11
Winter Sales
I
~
Type
A
B
A
B
B
B
B
Period
Mon-Thu
Mon-Thu
Fri
Fri-Sun
Fri-Sun
Sat-Sun
Sat-Sun
Days
4
4
1
3
3
2
2
Time
11- 6pm
6 - 9pm
11- 6pm
6- 8pm
8 - 9pm
12- 6pm
11-12am
Lines
1/4
1/4
1/4
1/2
1/4
1/2
1/4
A: 19950/2.5 =
7980 customers x $2.00 =
B: 30210/2.5 = 12084 customers x $4..00 =
Total Ice Cream Sales
SM
420
180
105
180
45
360
30
38 Wlcs SM
15960
6840
3990
6840
1710
13680
1140
50160
$15960
$48336
$64296
32
EXHIBIT 1 2
Cost Of Goods
Sales
Units
CGS
Item
.20
.10
.20
.10
.10
.04
.04
.04
.03
.04
.08
.03
10182
5090
10182
5090
5090
2036
2036
2036
1527
2036
4072
1527
16968
6787
9697
4848
4848
1198
1198
1198
898
1357
2262
1018
6477
3256
5366
3352
2684
1253
963
1022
483
1107
2084
869
Cones
Dip Cone
Sundae
Shakes
Floats
B. Split
Brownie
Stwb Short
Soda
Parfait
Can Shake
Can Sundae
Winter
$28916
Sales
Units
CGS
.13
.05
.05
.12
.05
.08
.08
.08
.06
.08
.16
.06
28998
11153
11153
26768
11153
17844
17844
17844
13383
17844
35689
48330
14871
10622
25493
10622
10496
10496
10496
7872
11896
19827
8922
18448
7134
5878
17626
5880
10974
8432
8957
4230
9701
18269
7614
13383
Summer
$123143
33
EXHIBIT 12 A
COST OF GOODS BY PRODUCT
Cones
Small (302)
Medium (502)
Large (802)
Ice Cream
Sundae
Small (302)
Medium(5oz)
Large (802)
Ice Cream
.2100
.3500
.5600
.2100
.3500
.5600
cost
Plain Dip
.2340 .2940
.3817 .4797
,5936 .6936
Cost
.3518
.5534
.8134
Shakes
Ice Cr Flav Milk Cup
Napk Straw/Lid
Sm (1Ooz) _.;35OD
+ l o 0 0 .0700 ,0189 . 0 0 2 0
.0135
Md (1202)
.4200 .1500 .0840 .0210 .0020 .0144
Lg (1602)
.5600 ,2000 .1120 .0313 .0020 .0178
Cost
.5544
.6914
,9231
Floats
Ice Cr
Soda
Sm (1002)
.2100 .0500
Md (1202)
.3500 .0600
Lg (1602)
.5600 .0800
cost
.2944
.5536
-8279
Banana Split
Ice Cr
,5600
Cup
.0189
.0210
.0313
Napk Straw
.0020 .0026
.0020 .0026
.0020 .0026
Lid
.0109
.1180
.1520
Top
Bana Spoon Dish Napk
.3500 .0800 .0080 ,0455 .0020
cost
1.0455
Brownie Dessert
Ice Cr
.3500
cost
-8034
Short Cake
Ice Cr
.3500
Top
Cake Spoon Dish Napk
.2000 .2500 .0080 .0434 .0020
cost
.8534
Soda
Ice CR
.2100
.3500
.5600
Flav
cost
.3444
.5374
.9479
Parfait
Ice Cr
.5600
Top Dish
Napk Spoon
.2000 .0455 .0020 .008
cost
.8155
Candy Shake
Sm (1002)
Md (1202)
Lg (1602)
Ice Cr
,2800
.3500
.4900
Flav Milk
,2500 .0700
.4500 .0840
.6500 .1120
Candy Sundae
Sm
Md
Ice Cr
.2100
.3500
.5600
Dish Napk
.0318 .0020
.0434 .0020
.0434 . 0 0 2 0
Spoon Top
Sm (1002)
Md ( 1 2 0 2 )
Lg (1602)
L9
Cakes
8 Inch
10 Inch
Ice Cr
2.1000
2.8000
Cup
Napk
Straw
Lid
Candy
Cost
.1500 .5018
.0080 .1500 .3000 .8534
.0080 .2000 .4500 1.2634
.0080
.lo00
cost
2.93
3.99
34
EXHIBIT 1 3
Income Statement
For Twelve Months
Sales
Ice Cream
Soft Drinks
Cakes
Total Sales
$273,960
4,873
$152,059
650
5,232
$ 1 5 7 I 94.1
Gross Profit
$136,012
$ (34,072)
35
EXHIBIT 14
Statement A
Salaries
- Operating Expenses
- Manager
- Hourly
Rent
Employer Payroll Taxes
Advertising
Legal
Depreciation
Accounting
Repairs & Maint
Supplies
Insurance
License
Real Estate Taxes
Workmen's Comp
Association Fees
Common Area Maint
Utilites
Total Operating Expenses
$ l8,OOO
24,538
108 I 000
3 I 200
3,158
2 ,000
2 ,646
1,000
1,000
1,000
600
447
400
215
200
200
3,480
$170 I 084
36
i.
EXHIBIT 1 5
Balance Sheet
Current Assets
Cash
Inventory
Total Current Assets
$ 2,000
3 ,0 0 0
$ 5,000
Fixed Assets
Equipment
Leasehold Improvements
Total Fixed Assets
$18,125
25 000
$43 125
Total Assets
$48,125
Current Liabilities
Accounts Payable
$ 5,000
Owners Equity
Paid in Capital
Net Loss
Total Equity
$73,997
( 3 0 ; 872)
$43 125
$48,125
38
NOTES
1Cindy Mills, "The Scoop on Ice Cream", Haqerstovn
(Maryland) The Daily Mail, 13 July 1988, sec. C, p . 1.
2Joyce and Christopher Dueker, The Old Fashioned
Ice Cream Cookbook (New York: The Bobbs-Merrill Company,
Inc., 1974), 11.
3Census Population and Housinq 1980.
DC, 1980) Summary Tape File 3A.
(Washington,
loclerk for the Comptroller of the Treasury, interviewed by author, Hagerstown, Maryland, 19 July 1988.
11Clerk for the County Court House, interviewed by
author, Hagerstown, Maryland, 12 July 1988.
laaudit Bureau of Circulations, ABC
January 1988.
N&Tspapcr,
131bid..
---
Audit Report:
39
BIBLIOGRAPHY
'C
(;.,
I
25
EXHIBIT 5
State Of Maryland Traffic Volume Map
40