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Business Plan

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  • 1. 1 Business Plan AGSC 229 Mr. Pierre Madani TarekAmro 201202108
  • 2. 2 3 Meal Box Business Owners: TarekAmro, Ibrahim Amro, Desiree Amro Beirut, Lebanon + 961 3823429
  • 3. 3 Table of Contents Contents Executive Summary............................................................................................................... 4 General Company Description:......................................................................................6 Mission Statement .................................................................................................................... 6 Goals and Objectives................................................................................................................. 6 Philosophy ................................................................................................................................. 7 Value Proposition...............................................................................................................9 Marketing Plan ....................................................................................................................9 Market research ........................................................................................................................ 9 Economics................................................................................................................................ 10 Product .................................................................................................................................... 12 Customers................................................................................................................................ 13 Competition............................................................................................................................. 13 Niche........................................................................................................................................ 14 Promotion................................................................................................................................ 15 Promotional Budget ................................................................................................................ 16 Pricing...................................................................................................................................... 16 Proposed Location................................................................................................................... 17 Distribution Channels.............................................................................................................. 17 Operational Plan..............................................................................................................17 Production ............................................................................................................................... 17 Location................................................................................................................................... 18 Legal Environment.................................................................................................................. 18 Management and Organization ..................................................................................20 Personal Financial Statement .....................................................................................22 Startup Expenses and Capitalization........................................................................24 12-Month Profit and Loss Projection........................................................................27 Income Statement............................................................................................................29 Resources ................................................................................................................................ 30 Annex....................................................................................................................................... 33
  • 4. 4 Executive Summary When we sat down, myself and the two other business partners (my father, and my mother) to brainstorm about an idea of a new business, we wanted to come up with something the people wanted, and is accessible for all. We thought what is better than creating a diet box with an affordable price, because nowadays everyone is looking after eating less or cleaner. Having a diet is sort of a woman thing to practice nowadays. But we wanted an idea that will bring men and women to eat healthier and in fewer quantities, and this is why we are creating this diet box that will be stored in supermarkets at affordable prices. This idea stroke us, because my mother as well as my sister are always on a diet, constantly visiting dieticians and buying special food from at high prices as well as going to the supermarkets and spending big on ingredients that they won’t totally consume. 3 Meal Box is a diet box as stated before that will have a private kitchen in Ain el Mrayse, where the cooking will be held and then delivering the boxes to all of TSC and Spinneys branches in Beirut. We are targeting mostly adults, women who constantly seek a diet and men that are aiming to change their eating habits. We are offeringdiet food, but we are not a diet clinic. We are simply a specialized kitchen that offers the best quality of food in a box that will have a 3 day expiry date, with healthy ingredients and a lot of care. Our boxes will contain breakfast, lunch, dinner, a salad and a small desert or a fruit. Everyday we offer two types of menus, so that the consumer can have a choice
  • 5. 5 of buying what he prefers, and everyday a new menu is in stores. People have the misconception that healthy food is expensive, but not inside our box. As for our customers, average to rich, everyone that is shopping in Beirut’s Supermarkets is a target to us. With the hard work and the extensive marketing and word of mouth, our business is set to expand by visible rates, and expand more into the food industry and the market in supermarkets. As for the funding, we have savings in the bank, but we are not going to invest in it. Because our funding will not be enough to carry on with the needed operations. That is why we are asking and reaching for a loan from the bank that will take into consideration of our business proposal. With the needed funds in our hands, our business will carry more operations; more sell out, and eventually higher return on investments rates.
  • 6. 6 General Company Description: Mission Statement “Eat right, Live tight” The purpose of our mission statement is to give the targeted consumers an overview of us, without even saying. Our mission statement is brief, straight to the point and describes our business directly. Our own reason for existence in this market is to provide the proper type of nutrition and food supply to the consumer. Lots of people complain about their weight problem, and how diet food is more expensive than the normal food. Nowadays, everybody is busy,women and men are always at work, and cooking time have decreased, so people tend to deliver fast food to their homes because it’s a cheap meal. But we aim to provide the real taste, with the supply of the best nutritional requirements. Goals and Objectives Our goals are not tied down; rather they are wide and ever lasting until they reach the destination we have in mind. Goals of our company are bound by our growing aspiration and potential. Many of our goals would be having a solid market share in the diet business by the end of our 3rd year in business. In addition to that, our business has goal for expanding and supplying in many other supermarketslikeLe CharcutierAoun,Goodies,
  • 7. 7 Shoppers, and reaching areas outside Beirut and maybe for the nearby countries. But also to have our own loyal customers who can take programs with us and we can deliver to their houses later on. Other than that, one of the main goals is to provide a better quality of food and healthy way of eating, and creating market recognition. Objectives are progress markers to goal achievement. Objectives help the business planner to guide down the road for goals. Many of our objectives in this business are to introduce a new product in the supermarket, providing more options to consumers. Philosophy Our business delivers what matters of care and wellbeing. We initiated this business to provide the healthy way of living for people, by eating in a healthy way. This is the most important core idea that we will try to preserve and implement. Our products can be consumed by everyone who is in TSC or Spinneys branches in Beirut.We will start by targeting gym members, we will be contacting several gyms in Beirut, where we will be hanging an advertisement poster about our product, as well as creating a Facebook page, and other social media intermediaries for 3 Meal Box, and definitely we will be concentrating on the word of mouth news spreading from public relations, as well as having some television, radio, magazines and internet advertising. The food industry is an ever growing industry for a simple reason which is people always have to eat in order to survive. That is why we have great potential to grow, in this sector.
  • 8. 8 The industry is always changing and evolving in a better way. On the short term, the changes might be simple and effective, but on the long run, they will either make the company grow bigger or demolish it to ruins. For example, a simple marketing strategy may not be effective and attract customers on the short term, so the company will be forced to close down. Being a smart business operator means making use and taking advantage of every opportunity given by the market and the competitors. This means to use any defeat of competitors in order to benefit and grow bigger. Every company needs a set of competencies in order to stand out and have a strong base structure. We believe that a business cannot succeed if it does not have the proper management and an efficient hierarchy. Although as a startup business the number of employees issmall, yet it is important to act as a functional system to enhance efficiency. This, we consider as our main strength. Our own competitive strengths will be that we are putting 3 diet meals inside a box and that is accessible to everybody. We are going to putdetailed calorie distribution inside each box. We will not hire unprofessional and inexperienced people. In order to move forward in the market, our business must have a special kind of expertise in which we can utilize to our benefit. One of the aspects of building up a business is choosing which legal form of ownership to apply. After looking and differentiating between different types of legal forms, we found out that the limited liability corporation is the best type of legal form. LCC has an unrestricted purpose for operations, with a minimum capital of LBP 5,000,000. In addition to that, transfers to third parties require the approval of partners representing 75% of the LLC's capital. This means in case of disassembling the
  • 9. 9 company, it can be done in an easy way. LCC requires members from 3 to 20 partners, and it is suitable for small businesses and start-ups. Value Proposition We offer a variety of homemade and calorie counted food in our meals, from traditional Lebanese stews, to international cuisines, and in addition to salads and desserts. We are basically modern nutritionists with a twist that attracts those few extra kilograms that need to go away. Our boxes are highly affordable taking into account that the customer is receiving 3 meals, a salad and a dessert at a price of 18,750LBP. Marketing Plan Market research In order to have a successful business, it is important to know what the consumer wants, create it, and make it a need. This will create an enormous demand if we knew that preferences of costumers. This is where the market research comes, in order to guide us through our business. Market research happens through two channels, primary and secondary.
  • 10. 10 Secondary data is everything that has been collected before by other researches, which we can use in our own studies. And the primary data is the data we collect through statistical studies and surveys. To know more about the market, we conducted an online survey of 63 people to ask them more about what they know about healthy food. 95.08% of the surveyed people have at least tried healthy food before. 53.97 % of them perceived healthy as expensive. 69.84% of the people surveyed eat outside their homes more than three times per week. In addition, 57.14% of the people surveyed more than once in a typical day bring food from the outside to eat at home. The information we gathered will guide us in order to perform the best work Economics When we will open our business, we will not have a big consumers share. We want at first to start producing 250 meals per day and distribute them to TSC Hamra, Ashrafie, Jnah, Beirut Sook and Verdun and in Spinneys Jnah, Hazmieh, Ashrafieh and Dbayeh. This is around 27-28 boxes a day in each supermarket. We can estimate that the niche constitutes around 70 % of this market, and then the rest is 30 % of the market share. Our business is not a large business, with a huge budget. Rather it is almost a small business with an adequate budget. This implies that we will grow, but not high rates in the first few months. In addition to that, there will be some bumps
  • 11. 11 along the way. These bumps will be obstacles and barriers that will make it hard for us to reach our objectives and goals. As a new food type of product, consumers might be hesitant to try something new they are not familiar with. We may not be accepted directly, nor will the people recognize the product we are offering. That is why we should really implement a powerful marketing campaign. In other words, market penetration will not be that easy at first, although we are a new concept in the Supermarkets. Another obstacle would be the wide and various competitors. Today in Lebanon there is a lot of diet centers and dieticians who have their loyal customers. And the Supermarket itself is competitors where the ingredients we use in creating our formula are sold out there. So it would be hard for a large portion of the consumers to change accept this new idea. The only way to overcome these bumps and later ones in the future is at first to have a solid management and doing the right things at the right time. Our business may get affected when the industry changes. That is because our business is in the heart of the industry. Any change in the industry will either break us down, or make us grow bigger. That’s why it is very important to breakeven in the first year of operation. In addition, any change in the economy will directly affect our business. For example, in a case of economic recession, people will tend to consume less and keep their money safe. That will directly affect the food industry, directly or indirectly.
  • 12. 12 Product Our product is something new in the market. This is why we have to be very prudent and intelligent in how we’re going to market it. Along the years, many food innovations have been created and succeeded, as well as failed and diminished. We are hoping that our product can become a durable business, because we are strong believers in our motto and business idea. The products we have are healthy, tasty, affordable for everyone, satisfies every kind of taste. Our products are packed freshly, and packed in special way to be re-heated at home. In addition, the box package we use is biodegradable and ecofriendly. Our food will be stored inside plastic cases and stored inside a carton box. Now, that you have bought our 3 Meal Box. What is next? How can our product be good and beneficial? Why to have a boring eating routine, full of fatty burgers and junk food? It is the same to try something new that will change your habits and lifestyle upside down. Eating healthy is the new thing, where everyone can have that amazing body he/she dreamt of having. We offer Low-Cal full taste food, with even lower prices than most of the market. We are giving our customers 3 meals a salad and a desert all for 18,750LBP.
  • 13. 13 Customers In order to sell a product, and have amazing big profits from it, we have to know well our customers. That is why we should to know the demographic profile of our customers. Most of the Supermarket customers are Moms and Dads in another way Adults. Age, Gender: 30+ years old, females and males Location: TSC and Spinneys Beirut and its Suburbs. Income level: Average working salary and more Social class: Medium to Rich Competition Everyone that sells food is technically a competitor, whether being direct or indirect. Different shops sell different kinds of food, and they attract different kinds of people, depending on tastes and preferences of theirs, but mostly diet center are our competitors Our main products that we are going to be serving inside the box are ready to eat or heat and eat meals. Some of the Diet centers do that as well, but do not sell in supermarkets per meal; they do a monthly program with their customers.
  • 14. 14 Many of the major competitors might be Carla’s Good Food, Centimeal, Diet Delights, Diet Secrets, Le Gabarit, Health Box and Kcateries. We consider our products to be one of a kind in the market. No diet center offers 3 meals a salad and a dessert for this small amount of money, they either sell one meal for a similar amount or 3 meals for a much higher amount, and as stated before they do not put their products in supermarket for the consumer to have the choice to pick from 2 kind of daily different menus. This added value differentiates us from the rest of the dieticians in the market. Competition will be based on the cheap box that we are offering in parallel to the other diet centers.In addition to the type of customers, not all people that come across Spinneys and TSC will be familiar or ready to try something new such as our products. That is why it will be harder to compete for customers, and attract them to our product and try the food. The indirect competitors in addition to the ones mentioned before, might be the normal restaurants that serves diet food such as La Fitness, Roadster, Fiber and more. They are considered as indirect competitors because they offer an addition value different than ours which is sitting inside and having a meal with friends, but still these restaurants are mostly targeted by students and young adults, and which are not our market. Our pros are that we offer fresh, healthy, tasty food that satisfies the needs of the customers. In addition, it is hard to make enormous profits in the first year. We aim to sustain an increasing sales margin on the long run. Niche Nowadays, people have become busier in their lives, the woman is working as hard as the man, she still manage to cook and raise the kids too, but sometimes she just can’t, that’s why we are bringing a product that is ready and you can consume it
  • 15. 15 any day you want no need to follow a certain program like the in other diet centers, we want the customers to drift away from eating fast food when there is no food at home, and try our healthy Low-Cal 3 Meal Box. Then we come, and help change this reality. We at our business aim for the wellbeing of our customers before we think of anything else. Certainly everyone is a regular visitor to his nearby supermarket, so sooner or later they will notice our product and would like to try it, because we will be having some marketing advertisement and it will impact their lives in a way or another. We are here to create a change from the beginning, if we can, to stay with this niche for years. Promotion There are many and various ways that we can get the word out to customers. Our first method is to put in a commercial on Nostalgie Radio Station, because it’s a highly listened station by adults, in addition we will appear on Mtv Channel for free to promote our product on the show Men el Ekhir which is a huge watched show that talks about new ideas going on in Lebanon, and because we have a connection with one of its hosts, as well as broadcasting on Whatsapp and on Facebook which are for free, we will be putting posters in some gyms in Beirut, and finally the word of mouth of customers. We will not aim to advertise on television due to the high costs. As any other company, we ought to have a logo design, business cards for the top managers, and in addition to our day to day menus that we will be posting on our Facebook page.
  • 16. 16 Promotional Budget We will be spending first of all 3000$ for Nostalgie Radio Station that will play our 15 seconds commercial 20 times a day for 15 days, and then there are the flyers and posters that we will be hanging in gyms that have agreed to let us put in (Avalon, Panacea and Fitness Zone have accepted to let us put a poster inside because myself and some of my family members are registered in these gym and we are old and loyal customers), as well as some flyers on peoples doors. Before the startup, the flyers and posters will cost around 1000 $ as a maximum. After starting the business and starting with the operations, these costs will be less because we will not need brochures as before. Pricing What differentiates us from other healthy food shops and diet centers is that we are not as expensive as they are. When we conducted our survey, most people have the perception that healthy food is expensive. But we are going to erase this misconception, in a way that our prices are affordable to the quality we offer. Our prices are fixed at 18,750 LL per diet box. This pricing strategy is not more expensive than our competitors, as our competitive analysis shows. We are mid-range pricedin a way to a normal meal, but if we combine what we offer we are way below the market pricing, and this creates our competitive advantage. Our personal pricing is 14,750 LL but the supermarkets we have contacted will take 4,000LL per each box sold so that they can generate profit thus making our product available on shelves for 18,750 LL.
  • 17. 17 Proposed Location We are going to rent a 170 meter square place in Ain el Mrayse where we will be having the kitchen and offices to operate our production. And delivering from there daily the 250 meals, that are proper to increase if the demand increases to the supermarkets in Beirut. Distribution Channels We will need two Renault Kangoo LCV cars that will be responsible for the daily delivery between our kitchen and the Supermarket, which will cost us around 18,000$. Operational Plan Production Our production techniques happen in our kitchen; we chop, cook, prepare, and pack our meals. Our kitchen is our theatre. One of our characteristics is our high-end quality and cleanliness. That is why we are careful about our quality control. We will coordinate with Boecker and ISO for the quality control and keeping up the high standards of cleanliness. In addition to that, we care about the wellbeing of our image between the customers; we care about the customer service and the feedback that we get back
  • 18. 18 from the customers. We will have discussions on our Facebook page making everyone able to see others comments and feedback and participate in the discussion. Inventory count is essential for the knowing what we will produce on the next day. We have to count our food quantities and the needed materials. We will neither over stock, nor under stock our inventory because it will reduce cost and efficiency, but we will be having a constant inventory because we will be producing the same exact amount of meals every day. Location The 170 square meter space we are renting in Ain el Mrayse will cost us 18000$ a year. And storing our products in Supermarkets as listed before. Legal Environment Our company is going to be registered as a LLC, thus not listed in the Beirut Stock Exchange. We need to contact a lawyer which he will facilitate this work. We already have a lawyer who will start with the papers and permits and register them in the specialized ministries. These permits and regulations are such as the NSSF, the TVA, health permit, trade permit, and so on. Personnel We do not need a lot of employees to carry out our operations because we are a rather small to medium enterprise. We will be having 16 employees, including the
  • 19. 19 top 3 managers which one of them is an accountant, the two drivers, the chef and his cooks, 2 cleaners, and a nutrion expert. Our type of business requires a certain expertise and professionalism because there is a certain mode of work that must be taken. We have almost every kind of labor at our business. We will have part time jobs and full time jobs, based on the type of labor. High end and experienced employees will have higher salary than the unskilled and the inexperienced employees. For example, the drivers will have a lower pay than the nutritionist and the chef that are the backbone of the business. Inventory The inventory that we will keep in our store is the raw material that we are going to use in our everyday processes. They are basically the food, fruits, vegetables and everything else in between. In addition to the finished goods such as pastes, salts, oils and so on. Suppliers Many of the suppliers that we are going to deal with are Fattal Holding placed at Jisr el Wati, which are going to supply us with everything canned, frozen foods, and everything in between. We will be paying in cash, and have an account payable on credit. In addition, we will get out fruits and vegetables from the Wholesale market from Sin el Fil. We will be paying by cash. We will be getting our bread from Wooden Bakery, and we will be paying with cash also, unless we have a credit policy with them. As for the fresh meat and chicken, we know a very reputable and clean
  • 20. 20 butchery in Caracole el Druze called Louhoum Market. For this butchery, we will be having a credit policy. Management and Organization Our business has a low number of employees and it is small relatively. That is why we do not need a complicated and difficult hierarchy. Most of the tasks will be divided among the managers and specified employees. The business owners will direct the whole management, in order to reduce costs and increase efficiency. Myself, and the top business partners will do our day-to-day basis management directly, without any need to require any other external management sources. Since we are opening a business, we have a strong business background. I am almost a graduate in Agribusiness from AUB, my dad already owns his business, and my mother is an accountant and head of a department in a company, so we have an experience in running a business. Top Managers (3) Personel (2) Nutritionist Chef Inventory and Supplies Division Fattal and Wooden Bakery sales Butchery and Wholesale market for fruits and vegetables Logistics Division (4) 2 Drivers 2 Cleaners Operational Division (6) 2 Cooks 4 Assistant Cooks Miscellaneous Divison Tech Supplies Taxes and VAT Media and Prints Legal Aspects Figure 1 - Organizational Hierarchy by Function
  • 21. 21 The top managers themselves will do the miscellaneous activities. Therefore in total, our personnel will include 16 employees, including the 3 managers themselves. This is ofcourse the initial number of employees at first. We might need extra employees depending on the expansion of our business and operations. In addition to that, we will contact an external insurance company to take care of the insurance expenses. The insurance company that we will work with is Libano-Swiss Insurance. This will cost us around 2,500 $ per year. The insurance is against fire, theft, work accident, cars tout risque and other miscellaneous events. As for the tasks of the personnel, the top 3 managers we will take care of technological supply and usage, such as the accounting system and any related software. This is because one of the top managers has a wide experience in programming. For this issue, we do not need to contact any other external programming company. In addition, we as top managers will be our own accounting managers, taking care of the taxes and TVA in the ministry of Finance. Other than that, we will take care of the media and all digital prints. As for the kitchen operations, we need 7 employees in the startup: the chef, which is the head of this operational division, 2 cooks under his command, and 4 assistant cooks. The 2 cooks each one of them will prepare one of the 2 menus that will be stored every day in the supermarkets. Their salaries will be ranging from 700$ to 900$, as for the 4 assistant cooks, they will be mainly part timers who can apply for the job and get a salary of 350$ per month. We will need 2 drivers to deliver the boxes to the supermarkets. Their salaries will range from 400 $ to 500$. As for the cleaners, we have contacted Jalloul Office for cleaning purposes. This service will cost us around 800$ per month. As for the inventory and the supplies division, the top managers will be in direct contact with the suppliers and order the
  • 22. 22 needed goods and products. In addition, the goods will be delivered to us for free, so we are free of the transportation costs. As for the personnel division, we need a As for the personnel division, we need a chef with a good food expertise that can help us with our demands, his services will cost us around 2000$, and an experienced nutritionist that will help us prepare the healthy food recipes and indicating us the amount of calories in each meal, her salary will constitute of 3000$ every 6 months, she will change coordinate with the chef to change or adjust the menu twice a year. Personal Financial Statement The main entrepreneurs of this business are 3 people. It was a family idea and all the partners are related to each other. These 3 people are Ibrahim Amro, TarekAmro and Desiree Amro. We are a father, a son and a mother. In addition to our own contribution to the business, it won’t be enough to carry out the business. That is why we need an external source of money. We are going to contact Bank Audi in order to get a loan. But any loan requires a certain procedure, which requires the presence of a personal financial statement for the major owners of the business. This includes the personal assets, which are available. In the personal financial statement of the 3 owners, we have included the total liabilities and the total assets of the owners combined. This is important to let the bank loaners know that we are worth this funding.
  • 23. 23 PERSONAL FINANCIAL STATEMENT Top Three Managers Assets Amount in Dollars Cash - checking accounts n/a Cash - savings accounts 220,000 Certificates of deposit n/a Securities - stocks / bonds / mutual funds n/a Notes & contracts receivable n/a Life insurance (cash surrender value) 500,000 Personal property (autos, jewelry, etc.) 300,000 Retirement Funds (eg. IRAs, 401k) 100,000 Real estate (market value) 2,000,000 Total Assets 3,120,000$ Liabilities Amount in Dollars Current Debt (Credit cards, Accounts) 60,000 Notes payable (Loans) 70,000 Taxes payable 30,000 Real estate mortgages (describe) 14,000 Total Liabilities $174,000 Net Worth $2,946,000
  • 24. 24 Startup Expenses and Capitalization Setting up a financial scheme for any business is essential in order to predict any losses or profits. Before opening up the business for the customers, the entrepreneurs must keep track of the expenses and costs of operations. The food industry is very strong in Lebanon, and especially in the Beirut area. There is many and different food and equipment suppliers, giving us a lot of choices to choose from. But still, we should be careful when selecting our suppliers, resources and machinery. In addition to these expenses, we need also to add a separate line item, called the contingencies to account for everything unexpected that will come in the way of our operations. We will need a lot of machinery and supplies to start our business. After an extensive research in the market and asking other business owners about the prices and costs, we came up with the perfect prices and expenses combination for our operations. The first expense we have is the space. We have found a place in Ain el Mrayse that will allocate our needs to construct the kitchen and offices.This 170m² space will cost us around 18,000$ per year. We will pay this value in advance. As for the fixed expenses or costs, we have several points. Our fixed costs are indifferent of the production level, and do not depend on the operations. These include of rent services, cars purchase, the registration expenses at the beginning, the salaries of the employees, the insurance fee, and the cleaning and delivery services. These add up to 109,850$ the first year. (The coming year will not include the
  • 25. 25 registration fees again, nor the car purchase). So the fixed cost per month will be 7,509 $ (90,100$ per year). The variable costs are the expenses that we pay to get supplies and raw material, the electricity, the water, the taxes, the maintenance, and any expected future expense. These add up to 291,100 $. As a forecast, we will sell 250 meals per day. SOURCES OF CAPITAL Owners' Investment: We won’t be investing from our personal savings; we will directly get a loan from the bank. TarekAmro 0 Ibrahim Amro 0 Desiree Amro 0 Total Investment $0 Bank Loans Bank Audi $200,000 Total Bank Loans $200,000 STARTUP EXPENSES Buildings/Real Estate Purchase $- Construction - Remodeling 5,000 Generator 10,000 Total Buildings/Real Estate $15,000
  • 26. 26 Capital Equipment List Furniture $1,000 Equipment 25,000 Fixtures 2,000 Machinery 10,000 Total Capital Equipment $38,000 Location and Admin Expenses Rental $18,000 Legal and accounting fees 6,000 Prepaid insurance 2,500 Pre-opening salaries 0 Cleaning servies 9,600 Total Location and Admin Expenses $36,100 Opening Inventory Fattal $500 Butchery 1,000 Fruits and Vegetables 800 Wooden Bakery 300 Total Inventory $2,600 Advertising and Promotional Expenses Advertising $3,000 Signage - Printing 1000 Travel/entertainment - Other/additional categories - Total Advertising/Promotional Expenses $4,000
  • 27. 27 SUMMARY STATEMENT Sources of Capital Owners' and other investments - Bank loans 200,000 Other loans - Total Source of Funds $200,000 Startup Expenses Buildings/real estate 15,000 Capital equipment 36,100 Location/administration expenses 38,000 Opening inventory 2,600 Advertising/promotional expenses 4,000 Other expenses 1,000 Contingency fund - Working capital - Total Startup Expenses 96,700$ 12-Month Profit and Loss Projection The 12-month profit and loss projection will be our wild guess of the sales and profits and expenses we are going to have. It is based on the costs, and the market prices including our markup value.
  • 28. 28 Our expenses are mostly going to be paid at the first, before the startup, so in the coming next month’s our expenses and costs will not be as high as the beginning. We have a lot of expenses, such as the materials and supplies and marketing strategies. We will over stock our inventory that is why we will make day-by-day orders from the suppliers. The bread will cost us around 25,000 LL per 2 days, the meat, chicken and fish combined around 625,000 LL per day, fruits and vegetables around 300,000 LL every 2 days, and finally the other products such as cheese, oils, peppers etc.., around 300,000 LL every 3 days. In addition, the equipment and shop supplies from the kitchenware to the desk, toilet and other stuff, will cost us around 38,000$. These supplies will be bought from China to reduce costs, yet they are of excellent quality. As for the marketing and advertising campaign, we will do a big buzz in the first few weeks in order to ensure that all the comers to the supermarkets hear about our product. At the end of the fiscal year, we have to pay the income tax, which is 10 % of the total sales. For this purpose, we will pay 94,500 $ in the first year as an extra expense not included in the 12 month projection sheet.
  • 29. 29 Income Statement Revenue from the 250 meal per day over 1 year: 250x14,750x30x12 = 1,327,500,000/1500 = 885,000$ Expenses: Bread: 3,000$ Meat: 150,000$ Fruits and Vegetables: 36,000$ Other Goods: 2,400$ Loss on goods and perishing: 5,000$ Taxes: 88,500$ Rent: 18,000$ Supplies: 38,000$ over 5 years making it per year 7,600$ Legal and accounting fees: 6,000$ Insurance: 2,500$ Interest: 66,667$ Cleaning Services: 9,600$ Advertisement: 4,000$ Chef: 24,000$ Cooks: 19,200$ Assitant Cooks: 16,800$ Delivery Boys: 10,800$ Nutrionsit: 6,000$ Cars: 18,000$ Generator: 10,000$ Remodeling: 5,000$ Utilities: 5,000$ Total Expenses: 520,067$ So our net profit is 885,000 – 520,067$ = 364,933$ We have told the bank that the 200,000$ that we are going to get from them will be paid in 3 years with an interest of 12% per year so this makes it 66,666.67$ a year + 24,000$ the first year, + 16,000 the second year and finally + 8,000$ the final year. As we can see our net profit the first year is of 364,933$ which will be divided into three parts for the shareholders to get their revenues and profits as well to re-invest or sell their shares in the future.
  • 30. 30 Resources The logo design and name of the company is created by me – TarekAmro The Sultan Center TSC Achrafieh, Tilal Beirut, Baydoun Street Tel: + 961 1 339299 Jnah Boulevard, Adnan Al Hakim Tel: + 961 1 858590 Verdun, Concorde Galleria Tel : + 961 1 746990 Hamra, Sadat Street Tel: + 961 1 746989 CityMall, 14 Dora Highway Tel: + 961 1 905520 Beirut Souk, Downtown Tel: + 961 1 986444 Hotline: + 961 1 905805 Email: customerservice@tsclebanon.com Spinneys Head Office Lebanon Dbayeh Highway Standard Chartered Bank Bldg. P.O.Box: 90-1532 Jdeidet El Metn, Lebanon Phone: +961 4 541441 Fax: +961 4 542409 e-mail: info@spinneys-lebanon.com Customer Service: customer.service@spinneys-lebanon.com Khalil Fattal et Fils Fattal Building, DanyChamoun Street, Jisr El Wati (Sin El Fil) Beirut - Lebanon Telephone: +961-1-485 250 AfifAyad
  • 31. 31 Trade Marketing Executive Telephone: 03086365 www.kff.com.lb Wooden Bakery - Jdeideh, Lebanon Tel: +961 4 410 666 www.woodenbakery.com Louhoum Market Butchery Caracole el Druze, Beirut Liban Fruits Beirut, Sin el Fil Fruits and Vegetables Market Tel: 01 483454 Boecker - Boecker Bldg., Furn El Chebbak, Beirut Tel: + 961 1 285111 Assad Daoui, Furnitures and Ofiice Supplies Clemenceau, Beirut http://www.adaoui.com/ Liabno-Swiss Insurance Kantary, Beirut Commerce and Finance Building, 2nd floor P.O. Box 11-3821 Beirut 1107-2150 Lebanon Jalloul Office for Manpower Rawche, Australia Street, Rawche Center Bldg. Second Floor
  • 32. 32 Survery Monkey www.surveymonkey.com Lebanese Ministry of Economy and Trade http://www.economy.gov.lb Ministry of Finance www.finance.gov.lb Jubaili Bros for Electric Diesel Generators http://www.jubailibros.com Bank Audi http://www.banqueaudi.com/Pages/Default.aspx Original Kitchens http://www.originalkitchensqld.com/page/1467083 Food Network Http://www.foodnetwork.com Eating Healthy http://www.helpguide.org/life/healthy_eating_diet.htm
  • 33. 33 Anex A Low Potential (- 1) Moderate Potential (0) High Potential (+1) 1. Extent to which the idea: o Takes advantage of an environment al trend o Solves a problem o Addresses an unfilled gap in the marketplace Weak Moderate 0 Strong +1 +1 2. Timeliness of entry to market Not timely Moderately timely 0 Very timely 3. Extent to which the idea “adds value” for its buyer or end user Low Medium High +1 4. Extent to which the customer is satisfied by competing products that are already available Very satisfied Moderately satisfied 0 Not very satisfied or ambivalent 5. Degree to which the idea requires customers to change their basic Substantial changes required Moderate changes required Small to no changes required
  • 34. 34 practices or behaviors 0 Part 2: Industry-Related Issues Low Potential (- 1) Moderate Potential (0) High Potential (+1) 1. Number of competitors Many -1 Few None 2. Stage of industry life cycle Maturity phase or decline phase Growth phase 0 Emergence phase 3. Growth rate of industry Little or no growth Moderate growth Strong growth +1 4. Importance of industry’s products and/or services to customers “Ambivalent” “Would like to have” 0 “Must have” 5. Industry operating margins Low Moderate 0 High Part 3: Target Market and Customer-Related Issues
  • 35. 35 Low Potential (- 1) Moderate Potential (0) High Potential (+1) 1. Identification of target market for the proposed new venture Difficult to identify May be able to identify 0 Identified 2. Ability to create “barriers to entry” for potential competitors Unable to create -1 May or may not be able to create Can create 3. Purchasing power of customers Low Moderate High +1 4. Ease of making customers aware of the new product or service Low Moderate 0 High 5. Growth potential of target market Low Moderate High +1
  • 36. 36 Part 4: Founder- (or Founders-) Related Issues Low Potential (- 1) Moderate Potential (0) High Potential (+1) 1. Founder or founders experience in the industry No experience -1 Moderate experience Experienced 2. Founder or founders skills as they relate to the proposed new venture’s product or service No skills Moderate skills 0 Skilled 3. Extent of the founder or founders professional and social networks in the relevant industry None Moderate 0 Extensive 4. Extent to which the proposed new venture meets the founder or founders personal goals and aspirations Weak Moderate Strong +1 5. Likelihood that a team can be put together to launch and grow the new venture Unlikely Moderately likely Very likely +1
  • 37. 37 Part 5: Financial Issues Low Potential (- 1) Moderate Potential (0) High Potential (+1) 1. Initial capital investment High Moderate 0 Low 2. Number of revenue drivers (ways in which the company makes money) One -1 Two to three More than three 3. Time to break even More than two years One to two years Less than one year +1 4. Financial performance of similar businesses Weak Modest Strong +1 5. Ability to fund initial product (or service) development and/or initial startup expenses from personal funds or via bootstrapping Low -1 Moderate High
  • 38. 38 Overall Potential Score (-5 to +1) Overall Potential of the Business Idea Based on Each Part Suggestions for Improving the Potential Part 1: Strength of Business Idea +3 High potential x Moderate potential  Low potential  Part 2: Industry-Related Issues 0 High potential  Moderate potential x Low potential  Part 3: Target Market and Customer- Related Issues +1 High potential x Moderate potential  Low potential  Part 4: Founder- (or Founders-) Related Issues +1 High potential  Moderate potential x Low potential 
  • 39. 39 Part 5: Financial Issues 0 High potential  Moderate potential x Low potential  Overall Assessment 5 High potential x Moderate potential  Low potential  Summary: The overall assessment of this product got a +5, making it a successful business to create and invest in.
  • 40. 40 Annex B