Bakery Business Plan PDF

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JAYBIE BAKERY P.O. BOX 69-20406, MLIPUKO. TEL:+254710049664 E-MAIL:[email protected]

BUSINESS PLAN JAYBIE BAKERY NAME OF THE OWNER: JAMES BRIAN OMUSOLO

INDEX NUMBER

: 31515101080

COURSE

: DIPLOMA IN INFORMATION COMMUNICATION TECHNOLOGY

PRESENTED TO

: THE KENYA NATIONAL EXAMINATIONS COUNCIL IN PARTIAL FULFILLMENT FOR THE REWARD OF DIPLOMA IN INFORMATION COMMUNICATION TECHNOLOGY

SUPERVISOR

: MR. MASILA TITO

EXAM SERIES

: NOVEMBER/DECEMBER 2017

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TABLE OF CONTENTS CHAPTER ONE 1.1 Declaration ……………………………………………………………………………………4 1.2 Dedication……………………………………………………………………………………..5 1.3 Acknowledgement…………………………………………………………………………….6 EXECUTIVE SUMMARY……………………………………………………………………….7

CHAPTER TWO 2.0 BUSINESS DESCRIPTION…………………………………………………………………..8 2.1 BUSINESS NAME……………………………………………………………………………9 2.2 BUSINESS LOCATION AND ADDRESS…………………………………………………..9 2.3 FORM OF BUSINESS OWNERSHIP……………………………………………………....11 2.4 TYPE OF BUSINESS……………………………………………………………………….11 2.5 PRODUCTS AND SERVICES……………………………………………………………...11 2.6 JUSTIFICATION OF THE OPPORTUNITY………………………………………………12 2.7 THE INDUSTRY…………………………………………………………………………….13 2.8 OBJECTIVE OF THE BUSINESS………………………………………………………….13 2.9 ENTRY STRATEGY……………………………………………………………………..…14 2.10 GROWTH STRATEGY……………………………………………………………………14

CHAPTER THREE 3.0 MARKETING PLAN………………………………………………………………………..15 3.1 CLASSIFY CUSTOMERS…………………………………………………………………..15 3.2 MARKET SHARE…………………………………………………………………………..16 3.3 COMPETITION……………………………………………………………………………..17 3.4 METHODS OF SALES AND PROMOTION………………………………………………18 3.5 PRICING STRATEGY………………………………………………………………………18

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3.6 SELLS TACTICS OR STRATEGY…………………………………………………………19 3.7 DISTRIBUTION STRATEGY………………………………………………………………19

CHAPTER FOUR 4.0 ORGANIZATIONAL STRUCTURE……………………………………………………….20 4.1 BUSINESS EMPLOYEES AND QUALIFICATIONS……………………………………..21 4.2 PERSONNEL NUMBER AND THEIR DUTIES…………………………………………..22 4.3 RECRUITMENT, TRAINING AND PROMOTIONS………………………………...........24 4.4 RENUMERATION AND INCENTIVES…………………………………………………...24

CHAPTER FIVE 5.1 PRODUCTION FACILITIES AND CAPACITY…………………………………………..26 5.2 PRODUCTION STRATEGY……………………………………………………………….28 5.3 REGULATIONS AFFECTING OPERATIONS……………………………………………29

CHAPTER SIX 6.1 OPERATIONAL COST…………………………………………………………………….30 6.2 CAPITAL REQUIREMENTS………………………………………………………………31 6.3 TRADING PROFIT AND LOSS ACCOUNT………………………………………………31 6.4 PERFORMANCE BALANCE SHEET……………………………………………………..32 APPENDIX…………………………………………………………………………………. …..35

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DECLARATION I strongly agree openly that this is original work one of my own and has never been presented elsewhere either in KNEC or any place.

Name

: JAMES BRIAN OMUSOLO

Signature: : 16th June 2017

Date

This project has been presented with the approval of my supervisor. Name

: MR. MASILA TITO

Signature: Date

:

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DEDICATION I dedicate this project to my brothers, sisters, parents, friends and lecturers who assisted me by giving me most of the encouragements up to this end where I enjoy the success of the project.

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ACKNOWLEDGEMENT I thank and acknowledge the help of my parent who really helped me to the successful of my project and also my friends and brothers who encouraged in a unique way though there were challenges and without forgetting my father spiritually who is GOD for the favor and promises.

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EXECUTIVE SUMMARY The business has been involved with the production for the past five years. The organization started as a small shop thereby because of the good quality products many of the items has been praised and have attained a special notoriety for the desserts. After years of requests for our flavored whipped creamed toppings, we have decided to pursue marketing these products from restaurants to the bakery level. The flavored toppings have been used in most products produced in large quantities whereby the estimated shelf life of the products is 21 days at refrigeration temperatures and up to six months when frozen. Special attention has been given to developing an attractive label that will stress the gourmet nature of the products. Distribution of the products to the customers is done on a daily basis depending on the customers’ order and need by use of the vehicles purchased in the business. Financial analysis shows that the organization will have both a positive cash flow and profit in the first year being 10.88%. The business is projected to expand to greater level whereby leading to accompany level because the products being produced are so unique and of good quality attracting more customers.

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CHAPTER II 2.0: BUSINESS DESCRIPTION Jaybie bakery is a confectionery organization in Mlipuko town; that sells high-end baked goods to retail and wholesale customers. The company also offers cake decorating classes from Monteil, the leading food crafting company in the industry. The organization rests on experience, business skills, relationships and enthusiasm.

RETAIL The retail portion of the business services walk-in customers Monday through Saturday from 10am to 6pm. The products offered at the retail location includes: cakes, cupcakes, cookies, pies and beverages the-at either pre-made or made to order. In addition to providing high quality products, our retail location will also serve as the venue for decorating classes.

WHOLESALE Our wholesale customer consists of cafes and coffee shops, restraints and hotels and local street market. We are preferred channel providing cakes, cupcakes, cookies and pies for the county clubs, wedding planners, caterers and other channels to take advantage of seasonal demands for confections.

CLASSES We offer more than just a cake decorating class – Jaybie bakery represents an “experience.” The students are provided with the instructor, hands-on experience, basic understanding of the basis in baking and decorating and design know-how.

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2.1: BUSINESS NAME The name of the business is “JAYBIE BAKERY” derived from my first and second name as they appear because most of my friends used to call me that name that why I decided to be that way and it’s so unique among all other bakeries that I have ever heard of.

2.2: BUSINESS LOCATION AND ADDRESS It’s located along Mauzo road, ZiaraStreet, plot number: 6449886-72 past Musto Petrol station on Moghe plaza opposite Talas Supermarket. Land registration number 649-8649BH9 and the location is 100 by 300 feet with the 22,700 square foot buildings. The raw materials are easily reachable because its only five kilometer from the bakery in addition to that, the site is furnished with the large second hand equipment needed for the operation thus unnecessary to purchase large and expensive machinery. The postal address is: P.O. BOX 69-20406, MLIPUKO. +254710049664 [email protected]

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MLIPUKO TOWN ARIEL VIEW

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2.3: FORM OF BUSINESS OWNERSHIP Jaybie bakery is a limited liability company in order to blend characteristics of a corporation and sole proprietorship and take advantage of flow through income taxation.

2.4: TYPE OF BUSINESS The business belongs to me because I was the founder that is the Manager. The initial capital was one hundred thousand (Ksh.100,000) where I started as a small bakery supplying the products to the mere retail shops, hotels, cafes and supermarkets but as time went by, it has expanded reaching to an extent where I only contribute 20% from my basic salary to finance the business.

2.5: PRODUCTS AND SERVICES RETAIL Jaybie bakery sells a wide range of high-quality cakes, cupcakes, cookies and treats whereby each item is made from scratch using all natural ingredients sourced from largely local suppliers. These supplies involve no preservatives to provide for high-end and divine flavor and taste. It’s important that our items not only taste delicious but also look appealing and attractive to the eye because we add the extra little touch to every product, whether it is a sparkling sugar daisy on a chocolate cupcake or a buttery harvest leaf on a thanksgiving pumpkin pie. Our location is designed in a way that customers are able to enjoy a setting that is a pleasant as the product they are consuming.

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WHOLESALE The products that our wholesale customers order are of very high quality. Just as with the retail portion of the business, the products are the wholesale are made with quality ingredients and properly prepared. While a few of the products will be the same at the retail and wholesale locations, certain items will be specifically made for particular wholesalers depending on customer orders. The bakery also manages delivery to wholesale customers.

CLASSES The students that take the decorating courses are provided with the engaging, exciting and authentic experiences. Our trainers teach students the very basics of how to frost a cake in Discover Cake Decorating to make edible yet delicate carnations. As the business grows, unique specialized classes are offered covering baking techniques and more advanced sugar and pastry classes.

2.6 JUSTIFICATION OF THE OPPORTUNITY This business originated because people in the surrounding region in the olden days used to enjoy the cake from one of the companies but due to bad organization it failed an idea came to my mind and I started the business in order the peoples demand and fulfillment of their needs. I stood in order to fill the left gap in order to satisfy the local demand thus it has really brought impact to the whole county and bordering places by form of employment opportunities and also the economy to rise.

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2.7: THE INDUSTRY The bakery covers a total area of about 3 hectares of land whereby comparing of offices and other buildings. We have improvised our business whereby almost all the work was done manually but now there is use of computer for easy access of information and communication with the supplier and customer and also the machines are being used to reduce the workload.

WORK PLAN 4:00AM-Start baking 8:00AM-Bakery opens Leave for farmers market 6:00PM-Bakery closes

2.8: OBJECTIVES OF THE BUSINESS Our aim is to bring and create employment opportunities, to improve the people’s living standards of the community and the entire county in general. We provide confection products and services by retailing and wholesaling tasty treats and hosting treats design classes. The bakery is dedicated to providing high quality deserts to a variety of customers and we are also concentrating on the high end market of products as we maintain the focused differentiation strategic position in the food and education industries. We are also intending to generate profit to provide a fare return to our investors and to expand to the business into other surrounding communities.

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2.9: ENTRY STRATEGY Our committee decided to lower down the prices of our products so that we could attract more customers through open day and special event offers that really motivate and attract more customers. We have been using the word of mouth and public perception which has been immensely important in both aspects. Customers must first understand that our products are made with quality ingredients and thus taste better than many of our competitors. The former students spread word of mouth in two ways; experiencing the enjoyment of the class and encouraging others to take the class and encouraging others to take the class and also developing a trust and relationship with Jaybie Bakery and therefore recommending the business to others. The bakery will advertise in cooperating with other businesses thereby recommending our partnering businesses to customers for example wedding planners and photographers. Our wholesale customers will be promoting and advertising our product branding order to develop further business for themselves through their menu, display case, Jaybie Bakery logo among others.

2.10: GROWTH STRATEGY For our bakery to be the way it’s today it required much reinforcement in different departments whereby we recruited and employed new qualified personnel who had a lot of experience. Created more space for expansion where the building was enlarged and extra resources put in place because had raised so high and also more vehicles were increased in the stock to enhance faster delivery and distribution of products to customers’ shortest time possible. The untrained staff was all taken to be trained on most concepts and operating the new purchased computerized instruments and equipment. In the past time there were no activities such as the workers being motivated but we had to introduce them in order to increase their morale of working and their salaries boosted that really encouraged and motivated them.

CHAPTER III

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MARKETING PLAN 3.0: MARKETING PLAN The company expects to use a variety of marketing tools including web advertising, affiliate programs, public relations and key strategic alliances to drive traffic. The company believes that it is extremely important to use word of mouth marketing campaigns especially in the early phases of the launch. The company has also been placing banners ads with major portal sites to increase awareness whereby it automatically serves when someone any keyword during a web search. This effort will focus on both online as well as print media in many towns. We have been offering new viewers debates and free subscriptions as an added advantage to purchase from the sitewww.jaybiebakery.ac.ke.

3.1: CLASSIFY CUSTOMERS RETAIL The market segmentation for the retail is divided into two physiological groups: celebrators and soccer moms. The group represents people sharing similar behavioral patterns and reasons for supporting Jaybie Bakery. These groups purchase either pre-made or made-to-order products. Celebrators are people that have reasons to do just that, celebrate: Birthday, anniversaries, graduation, valentine’s day and Christmas among the most occasions of many holidays or special occasions that family and loved ones celebrate encompassing a variety of people including the young, middle aged, old and both men and women. Soccer moms encompass not just moms but all family members and it serves as a place where family feels both welcome and comfortable.

WHOLESALE

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Our wholesale customers will be successful businesses in the food industry and we are focusing our attention in the following customers and expand to a broader list as the company grows.

CAFES AND COFFEE SHOPS

RESTRAUNTS AND HOTELS

MARKET

Broadway cafe

Acoma

Front street

Hummingbird café

War bonnet 64

Junction

Jupiter coffee house

Derby

Bus stage

Park street café

Land of favor

Street 004

Jailhouse coffee shop

Glory centre

96 Highway

Season cafe

Joy king mansion

Middle centre

In addition we also focus on seasonal wholesale customers for example summer weddings, holidays and other photographers, caterers.

3.2: MARKET SHARE Our organization has some of the projects that are income generating that is through leasing of our equipments and our qualified person being requested by other companies for motivational talks and workshops.

3.3: COMPETITION

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Nationwide, supermarket chains dominate the baked goods market in Mlipuko town. These grocery stores are locally owned, operated and their products are of poor quality often mass produced at an outside location and simply baked in the actual store. The ingredients are processed thus lowering the quality and taste of the product in order to sell the item at a lower cost. Town Talk Bakery is a locally owned bakery specializing in donuts, cakes and other treats are also sold at this location but are not made with high quality ingredients. The cake choices are very limited and icing is made with shortening and low quality for a low cost. Jaybie Bakery is set apart from the competition in four main ways:  Each of our products contains extra detail to set it apart from the

competition. We ensure that our products appeal to the eye as well as to the stomach.  The sky is the limit when developing a pastry design and we cater to the wants and needs of our customers in every way possible.  Customers’ service is our number one priority where we ensure that each customer is treated with kindness, respect and warm welcome on each visit.  In an era where food is becoming chemistry, we focus on raw, natural and sometimes organic and local ingredients to create its product. Thus our products taste better and better for you.

3.4: METHODS OF SALES PROMOTION AND ADVERTISING

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Word of mouth and public perception are immensely important in both aspects of the business. Customers must understand that our products are made with high quality ingredients and thus taste better than many of our competitors. The word of mouth will be created when someone experiences for example a cake at a party. The cake will be enjoyed by many and thus the word of mouth seed for the bakery aspect of the portion will be created. The students who had passed in our company earlier on will spread word of mouth in two ways: experiencing the enjoyment of the class and encouraging others to take the class and also developing a trust and relationship with Jaybie Bakery and therefore recommending the business to others. We branded our vehicles and designed posters in different forms, adverts on television or the electronic and print media that is Facebook, Google+, and OLX among others. We designed also business cards that we have been distributing in different occasions that we have really seen the impact on our business and brochures has been a helpful tool and also on newspapers.

3.5: PRICING STRATEGY Due to high quality of ingredients made from scratch products carefully and at times customized decorated goods, the pricing will be slightly higher than that of the typical grocery store bakery. The table below illustrates the initial mark-up of the bakery products based on the cost of goods sold. Depending on the detail of special orders, the margin may increase for that specific item.

ITEM

MARGIN

Cookies Cakes Cupcakes Pies Wedding cakes Beverages

3X 4X 4X 4X 5X 5X

3.6: SELLS TACTICS OR STRATEGY The company has entered into many strategic relationships in order to quickly build credibility as well as traffic to its brand web site. This includes partnerships with major search engines, magazine publishers, high retailers and international community Web sites. Our layout and

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design is user friendly and cutting edge in the eyes of our audience to attract repeat users. We have a strong branding message that will extend to all aspects of the site and truly provide the best experience for our customers. Since we started marketing, we have employed a number of selling methods for example personal selling whereby nearer customers come on the bakery and in the whole town there are agents who help us in the marketing the products and we have been motivating them by giving them allowances and commissions among others.

3.7: DISTRIBUTION STRATEGY We have developed a number of ways of distributing our products that is retail products may be picked up at the retail location by the customers or delivered for a nominal fee depending on the distance. Wholesale products are delivered to the w...