Entrepreneurial development

1. Think of a Burger…
In China…

2. Entrepreneurial Development
Business Proposal for Build Your Own Burger (B.Y.O.B)
Prepared for: Professor Edgar Puch
Joshua (11340696072)
Maaya (11340696043)
Sosuke (11340696040)
Reynold (11340696071)
Prepared by:

3. Introduction speaker1 speaker2
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BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
B.Y.O.B straddles fast-food and restaurant menus
Opportunity Set & Business Plan
Business PlanOpportunity Set
Lack of highly customizable,
premium quality meals
Rising middle-income-group
and associated affluence
Development of an F&B joint that offers
fully-customizable burgers, aiming to
promote two unique selling points:
1) Individuality in crafting one’s meal
2) Belief in high quality meat selections
Titled B.Y.O.B (Build Your Own Burger)
or “个个汉堡”…
We aim to fill the void between fast-
food’s standardized, low quality food,
and a typical restaurant’s expensive and
slow-moving menus
Increasing western influence,
including higher meat
consumption

4. Introduction speaker1 speaker2
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BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
2-phase + 3-stage strategic buildup
Implementation Strategy
Business Implementation
Business Stages Main Event 1 2 3 4 5 6 7 8 9 10 11 12 Beyond
Market Sizing and Research
Equipment Sourcing
Shopfront Location Sourcing
Supplier Sourcing
Minimum Viable Product (MVP) Part I
Budgeting and Financial Planning
Registration / Licensing / Copyrighting
Investor Pitch
Capital Raising
Rennovation & Equipment Outfiting
Décor and Furnishing
Minimum Viable Product (MVP) Part II
Launch of Marketing Strategy
Store Launch
Ongoing Marketing Campaign
Daily Operating Cycle (elaborated in )
Minimum Viable Product (MVP) Part III
Registration for Franchisor License
Expansion via Franchise Model
Pilot-Launch Phase
(Self-Managed)
Franchise-Based
Expansion Phase
Execution
Stage
Expansion
Phase
Preparation
Stage
Installation
Stage
Month

5. Introduction speaker1 speaker2
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Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Organisational Structure
The BYOB Team
Franchised Outlets
Franchised Outlets
B.Y.O.B
Franchise
(Xxx 3/per year)
Finance
(Reynold)
Business Development
(Joshua)
Self-Managed Stores (x3) Franchised Outlets
Marketing and Sales
(Sosuke)
Operations + F&B
(Maaya)

6. Introduction speaker1 speaker2
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Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Our Main Consumers
Target Market
Target Market: Gen Y
• Our main targets are
teenagers and young
adults (Ex: students
and workers)
• Customers seeking
differentiated burgers
• Those who demand
quality hamburgers
• Those who seek
originality
Localized
Heathliness
Indulgence
Internationalized
BYOB

7. Introduction speaker1 speaker2
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Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Customer Acquisition
Marketing Strategy
Word of Mouth
Overall aim of marketing strategy word of
mouth has higher perceived credibility
Out of Home
Standing billboards placed in the vicinity of our
outlets  extend the brand physical presence
Social Media
• Landing Page on Weibo
• Promotions rolled out on social media
Pricing
Promotion
• To drive up traffic during non-peak hours

8. Introduction speaker1 speaker2
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Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Sales Order Process & Burger Preparation
Operations
1) Customer places
order 2) Captain’s Order
Received in the Kitchen
3) Prepare Bun
and Patty
(4 Mins)
4) Add Topping and
Sauce (2 mins)
sadfasdfGood to go!

9. Introduction speaker1 speaker2
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Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Key Figures
Financial Evaluation
Initial Capital Outlay
RMB 2.2 mil
Internal Rate of Return
(IRR)
28.47%
NPV
RMB 946,000
Breakeven
~9 Customers/
hour per store
Year
Income Projection 1 2 3 4 5 6 7
Reveue (self-managed stores)
Revenue per day (mains) 3,200 3,520 4,160 4,800 5,440 5,440 5,440
Revenue per day (sides & beverage) 800 880 1,040 1,200 1,360 1,360 1,360
Total revenue per day 4,000 4,400 5,200 6,000 6,800 6,800 6,800
Total Revenue (self-managed) 1,460,000 1,606,000 1,898,000 2,190,000 2,482,000 2,482,000 2,482,000
Expenses
Total COGS 846,800 931,480 1,100,840 1,270,200 1,439,560 1,439,560 1,439,560
Total Expenses 1,996,464 1,741,446 1,940,006 2,138,566 2,337,126 2,337,126 2,337,126
Operating Income per Store -536,464 -135,446 76,794 299,614 526,814 660,574 794,334
Operating Income (whole business) (1,609,391) (406,339) 230,381 898,841 1,580,441 1,981,721 2,383,001
Licensing & legal fees (30,000) 0 (30,000) 0 0 0 0
Income before Franchise -1,639,391 -406,339 200,381 898,841 1,580,441 1,981,721 2,383,001
Franchise Income 1 2 3 4 5
# of franchised outlets 3 8 13 18 23
Annual fees 75000 200000 325000 450000 575000
Revenue per store 1,460,000 1,606,000 1,898,000 2,190,000 2,482,000
Royalties per store 43800 48180 56940 65700 74460
Total Revenue (franchise) 118,800 248,180 381,940 515,700 649,460
Taxes paid 0 0 (50,095) (224,710) (395,110) (495,430) (595,750)
Net Income (1,639,391) (406,339) 269,086 922,311 1,567,271 2,001,991 2,436,711

10. Introduction speaker1 speaker2
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Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Key Risks and Sensitivity Analysis
Risks and Mitigating Factors
Internal Rate of Return (IRR, %)
0 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50%
4 6.5% 6.9% 7.2% 7.6% 7.9% 8.3% 8.7%
6 12.4% 12.7% 13.1% 13.4% 13.8% 14.2% 14.5%
8 19.3% 19.6% 19.9% 20.2% 20.6% 20.9% 21.3%
10 27.6% 27.9% 28.2% 28.5% 28.8% 29.1% 29.5%
12 34.9% 35.2% 35.4% 35.7% 36.0% 36.4% 36.7%
14 40.2% 40.4% 40.7% 41.0% 41.3% 41.6% 41.9%
16 46.4% 46.6% 46.9% 47.1% 47.4% 47.7% 48.0%
Net Present Value (NPV, RMB millions)
1 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50%
4 (3.39) (3.36) (3.32) (3.28) (3.24) (3.20) (3.15)
6 (2.24) (2.20) (2.16) (2.11) (2.07) (2.01) (1.96)
8 (0.92) (0.87) (0.82) (0.77) (0.71) (0.65) (0.58)
10 0.75 0.81 0.88 0.95 1.02 1.09 1.17
12 2.24 2.31 2.38 2.46 2.55 2.63 2.72
14 3.27 3.34 3.43 3.51 3.60 3.69 3.79
16 4.50 4.58 4.67 4.77 4.87 4.97 5.08
CustomerperHour
(launchyear)
Long-term growth rate
CustomerperHour
(launchyear)
Long-term growth rate
Risk 1 – Initial Business Traction
1. Store Location – Initial stores placed
in areas with higher concentrations
of foreigners
2. Enhanced Marketing Effort –
Emphasis on unique brand
proposition
MitigatingFactors
Risk 2 – Expansion Opportunities
(Long-Term Growth)
MitigatingFactors
1. Increasing Store Concentration –
Markets in 1st-tier cities are
sufficiently big
2. Flexibility of Franchise Model –
Allows risk-sharing (min. resource
outlays)

11. Introduction speaker1 speaker2
blah
Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Key Takeaways
The BYOB Concept
BYOB
Perfect Opportunity to Exploit
• Gap between standardized,
low quality food, expensive
restaurant food

12. Introduction speaker1 speaker2
blah
Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Key Takeaways
The BYOB Concept
BYOB
Strong Growth
Potential in Target
Market
Perfect Opportunity to Exploit
• Gap between standardized,
low quality food, expensive
restaurant food

13. Introduction speaker1 speaker2
blah
Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Key Takeaways
The BYOB Concept
BYOB
High Returns
• IRR of 28.5%
• NPV of RMB
946,000
Strong Growth
Potential in Target
Market
Perfect Opportunity to Exploit
• Gap between standardized,
low quality food, expensive
restaurant food

14. Introduction speaker1 speaker2
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Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
Financial Projections
Appendix
Year
Income Projection 1 2 3 4 5 6 7
Reveue (self-managed stores)
Customers per hour 10% 10 11 13 15 17 17 17
# of operating hours 8 8 8 8 8 8 8
Customers per day 80 88 104 120 136 136 136
Revenue per day (mains) 3,200 3,520 4,160 4,800 5,440 5,440 5,440
Revenue per day (sides & beverage) 800 880 1,040 1,200 1,360 1,360 1,360
Total revenue per day 4,000 4,400 5,200 6,000 6,800 6,800 6,800
Total Revenue (self-managed) 1,460,000 1,606,000 1,898,000 2,190,000 2,482,000 2,482,000 2,482,000
Expenses
COGS per day (mains) 1,920 2,112 2,496 2,880 3,264 3,264 3,264
COGS per day (sides & beverage) 400 440 520 600 680 680 680
Total COGS 846,800 931,480 1,100,840 1,270,200 1,439,560 1,439,560 1,439,560
SG&A 146,000 160,600 189,800 219,000 248,200 248,200 248,200
Salary expense (fulltime) 180,000 180,000 180,000 180,000 180,000 180,000 180,000
Salary expense (partime) 180,000 180,000 180,000 180,000 180,000 180,000 180,000
Depreciation expense 39,366 39,366 39,366 39,366 39,366 39,366 39,366
Construction expenses 354,297 0 0 0 0 0 0
Annual lease expense 250,000 250,000 250,000 250,000 250,000 250,000 250,000
Total Expenses 1,996,464 1,741,446 1,940,006 2,138,566 2,337,126 2,337,126 2,337,126
Operating Income per Store -536,464 -135,446 76,794 299,614 526,814 660,574 794,334
Operating Income (whole business) (1,609,391) (406,339) 230,381 898,841 1,580,441 1,981,721 2,383,001
Licensing & legal fees (30,000) 0 (30,000) 0 0 0 0
Income before Franchise -1,639,391 -406,339 200,381 898,841 1,580,441 1,981,721 2,383,001
Franchise Income 1 2 3 4 5
# of franchised outlets 3 8 13 18 23
Annual fees 75000 200000 325000 450000 575000
Revenue per store 1,460,000 1,606,000 1,898,000 2,190,000 2,482,000
Royalties per store 43800 48180 56940 65700 74460
Total Revenue (franchise) 118,800 248,180 381,940 515,700 649,460
Taxes paid 0 0 (50,095) (224,710) (395,110) (495,430) (595,750)
Net Income (1,639,391) (406,339) 269,086 922,311 1,567,271 2,001,991 2,436,711
General Assumptions
All cost/ revenue figures in RMB unless stated otherwise
Company will be all-equity funded
USD/ RMB Foreign Exchange Rate 6.0919
Company Assumptions
Discount rate for company (Cost of Equity) 22.00%
Company effective tax rate 25.00%
Long-term growth rate 3.00%
Inflation rate 3.00%
# of stores in intial launch 3.00
Revenue Assumptions
Revenue per Unit (Mains) 40
Units per Customer 1
Revenue per Unit (Sides and Beverage) 10
Units per Customer 1
Customer per Hour (launch year) 10
Working Hours a Day 8
Operating Cost Assumptions
Gross margin (Mains) 40%
Gross margin (Sides & Beverage) 50%
# of local fulltime employees 3.00
Salary per local employee 60,000.00
# of local fulltime employees 5.00
Salary per local employee 36,000.00
Licensing & Legal Fees 30,000.00
Selling, general, administrative expenses 10%
Annual lease expense 250,000
Initial working capital 1,000,000
Capital Expenditure Assumptions
Equipment, furniture and interior design 393,664
Depreciable # of years 10
Annual depreciation expense 39,366
Franchise Assumptions
# of franchise outlets (year 1 of commencement) 3
Outlet growth per year 5
Annual fees 25,000
Royalties (% of sales) 3%

15. Introduction speaker1 speaker2
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Blah BlahIntro & Business Plan Team & Corporate Structure Target Market Financial Evaluation
NPV and IRR Calculations
Appendix
Year
Valuation Calculation 1 2 3 4 5 6 7
Free cash flow to equity holders (1,600,025) (366,973) 308,452 961,677 1,606,637 2,041,357 2,476,077
Discount factor 0.82 0.67 0.55 0.45 0.37 0.30 0.25
Present value of cash flows (1,311,496) (246,555) 169,867 434,100 594,455 619,099 615,524
Terminal value of company @ Year-8 13,422,944
Discount factor @ Year-8 0.16777216
Initial Investment (2,180,991)
PV of cash flows 874,994
PV of terminal value 2,251,996
Net Present Value of Investment 945,999 RMB 0.9459993
IRR Calculation Year
Year 0 1 2 3 4 5 6 7
Cash flows (2,180,991) (1,600,025) (366,973) 308,452 961,677 1,606,637 2,041,357 2,476,077
100 100 100 100 100 6 7
IRR: 11.97% Payback (Year #) 6