Wonderland cupcakes

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Wonderland cupcakes

1.Executive Summary

Wonderland Cupcakes aims to give cupcakes a whole new dimension. Located in Beirut, it

will be a unique bakery for its creative custom-made cupcakes and its relationship with its

customers. Whether it's an extravagant wedding, or a fun birthday cupcake, we like to talk to

our customers and get a feel for what they want. Our mission is to create a unique bakery

where customers tell their stories and watch their stories turn into cupcakes. We are sensitive

to each and every person’s stories, empathize with them and portray that story in a cupcake.

Our cupcakes not only change their looks with every customer but also tastes delicious and

are inexpensive. We seek fair and responsible profit, enough to keep the company financially

healthy. Owner and founder of Wonderland Cupcakes is starting the business with only

$20,000 in their pocket. But the company has a start-up requirement of about $65,000 which

will be spent in leasing a store-front, registering the business, acquiring insurance,

purchasing equipment for set-up, for e.g., convention oven, microwave oven, fridge,

computer etc, which are the long term assets of the company. Other assets include electronics

like mixers, blenders etc and utensils like pans, spatula etc, while inventory includes flour,

sugar, fondant, gum paste etc. A major portion of the start-up expense also goes into

marketing and advertising. In the projections for Wonderland Cupcakes, the company starts

off with yearly sales of about $100 thousand in its first year of operation. With the growth in

business and expansion into other lines, Wonderland Cupcakes manages to earn revenue of

about $400 thousand in the fifth year. The company will have a high gross margin of about

85% almost throughout its five years of projections, which seems to leaves enough room for

its fixed expenses and other administrative or operating expenses. In the first year,

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Wonderland Cupcakes is projected to turn a net profit of almost 10% in the second year,

which increases to almost 20% by the end of fifth year.

2. Objectives

I. To establish a strong presence in the market as a unique bakery.

II. To specialize in cakes those are different from any other cupcakes available in the

market.

III. To establish a storefront by the end of summer 2013.

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Wonderland cupcakes

3. Mission

Wonderland Cupcakes aims to be a cornerstone in creating a unique bakery sensitive to each

and every customer's stories, empathize with them and portray that story in a cupcake. Our

cupcakes not only change their looks with every customer but also tastes delicious and are

inexpensive. We seek fair and responsible profit, enough to keep the company financially

healthy.

4. Keys to Success

I. Creativity

II. Low price

III. Relationship with customers

5. Company Summary

Wonderland Cupcakes will be located in the heart of Beirut, delivering cupcakes though

out Lebanon area every day of the week. It will be unique for its creative

custom-made cakes and its relationship with its customers. Whether it's an extravagant

wedding, or a fun birthday cupcake, we like to talk to our customers and get a feel for what

they want. We make sure the cake reflects their personal style, the event and the story

behind it. We emphasize on presentation, detail and taste.

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Wonderland cupcakes

6. Start-up Summary

Like any other start-up, Wonderland cupcakes have the usual start-up costs of registering

the company, attaining the license, and since it is registered as an LLC, there is also the

cost of publishing the legal notice in the newspapers. In addition, a store front along

with work space will be leased. The place will be refurbished and equipped with modern

convention ovens, microwave ovens, fridge etc. Other initial costs will include electronics

like mixers, beaters, along with cake pans, utensils etc. Inventory mainly comprises of

flour, baking powder, oil, butter, eggs, sugar, salt, fondant, gum paste and many more.

7. Products

As the name suggests, Wonderland Cupcakes sells cupcakes, but not just any cupcake, it sells

cupcakes that are unique and creative in their own ways. The cupcakes are custom-made and

are made after listening to the tale of each customer. Whether it's a wedding, anniversary or a

birthday party, every occasion has a theme, and stories behind them. We listen to them, relate

to them, forma relationship with them and try to makes the cupcakes from their point of

view. We make sure the cupcake reflects their personal style the event and the story behind

it. Presentation is the key for us, we pay close attention the details and last but not the least,

and we make the cupcakes taste delicious too.

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8 .Market Analysis Summary

The target market for Wonderland Cupcakes are the middle-class population and high

income professionals in Beirut area, who appreciate the finer things, and are willing to pay

for them. They value relationships, art, great food and organic fruits and vegetables, delicious

desserts made from scratch. The company will not chase the $2,75-cupcake market; the same

group that prefers convenience and low prices. But it would be wrong to say that those who

buy cupcakes from the grocery store will not order cupcakes to Wonderland Cupcakes.

Customers who appreciate a homemade treat made from scratch, using only fresh, high

quality ingredients will also fall in the target market. When considering the social

ladder, this target market will be members of the middle class and upper middle class

group , white collar workers. Price is not an issue for them. They would be willing to

pay a decent amount for a unique, creative and impressive as well as delicious homemade

cupcake. But, one thing is common in all of them, they always have a story to tell and it is

represented in the cupcakes.

9 .Competition and Buying Patterns

Porter’s Five Forces analysis is useful when trying to understand the competitive

environment facing a given industry. It involves looking at internal competition, barriers

to entry, the profit-appropriating power of both buyers and sellers, as well as substitutes

to the goods produced. Applied to the bakery industry it shows an average net profit

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that typically does not cover the cost of capital due to low barriers to entry, ease to

production and ease of access to ingredients.

Internal Rivalry: There are many players in the bakery industry. The top four companies

are estimated to account for 11.7 percent of the market. The industry is characterized

by many small bakeries, but there has been a recent trend towards consolidation and

economies of scale. Businesses compete on price, quality, differentiation and

relationships with key suppliers..

Barriers to Entry: Barriers to entry in this industry are low. Economies of scale are

beneficial, but are not required for industry success. As a result, small businesses can

enter the industry with a relatively small amount of capital. The two main determinants

of a new company's success is the leaders' ability to acquire sufficient distribution

channels to cover operating costs and their ability to build up brand recognition and

loyalty. Distribution channels typically involve retail outlets, such as supermarkets and

grocery stores, and they can be more easily acquired if the bakery has an established

I.brand or the marketing resources to create one.

Buyers: Buyers of the bakery industry's products, such as supermarkets, grocery stores

hotel chains and convenience stores, are able to appropriate much of the industry's

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profit due to the large number of small bakeries that are all vying to find outlets for their

products.

Suppliers: Suppliers do not have much negotiating power in the bakery business due to

the well developed markets for their products and the commoditized nature of what they

are selling. Bakeries can be affected by price swings of the raw inputs, but the changes

are a result of global supply and demand determinants rather than suppliers' negotiating

power.

Substitutes: Many substitutes exist for bakery products. All products are viable alternatives

and individuals can also make all of the baked goods switching they want at home. Bakeries

rely upon price and convenience to keep individuals to a substitute or baking what they need

at home.

10 .Web Plan Summary

Wonderland Cupcakes have already launched a website at www.wonder_cupcakes.com.lb. this

website will play a major rule in the business and will be a dynamic marketing tool for the

company sales, catalogues, and expanding to others areas. It will provide sufficient information

about the company products, pricing, and other services. The goal will be to implement a

functional and professionally designed website that can be adapted to meet the needs.

11 .Website Marketing Strategy

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Wonderland cupcakes

A significant amount of marketing budget will be spent on internet marketing, SEOs and

other search marketing tools to make sure Wonderland Cupcakes site appears on the Google,

Yahoo, or Bing when anyone looking for creative cupcakes in Beirut area.

12 .Development Requirements

The website has been created through intuit.com. Any future updates or additions will

also be done through them. Intuit also offers marketing tools to help spread the

company name faster.

13 .Strategy and Implementation Summary

Wonderland Cupcakes will succeed through making high quality, unique, creative custom

made cupcakes. It will focus on a niche market and will attempt to achieve the best

reputation in that segment.

14 .SWOT Analysis

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Wonderland cupcakes

The SWOT analysis for Wonderland Cupcakes provided us with the opportunity to analyze

its internal strengths and weaknesses against the external opportunities and threats. It

gives the company a chance to build on its strengths and work on its weaknesses by

taking advantage of the opportunities and protecting itself from the threats Wonderland

Cupcakes unique strengths of creativity and custom made cakes at lower prices

than its competitors protects its from its potential threats of new entrants. While

targeting its niche market, it also works on its weaknesses by overcoming its

dependence on the distribution system.

Strengths

Uniqueness: Wonderland Cupcakes have made cupcakes and will continue to make cupcake

that are one of a kind. , because each cake represents a person or a relationship or a

celebration by them. So, like each individual or his/her relationship with others, the

cupcakes are unique.

.Creative and custom-made: The cupcakes are creative, and each is a piece of art

There maybe thousands of bakeries out there, but there are only a handful of bakeries

that make as creative cupcakes likes Wonderland Cupcakes.

Inexpensive: Usually cupcakes that are unique, creative and especially custom-made

are not affordable by most people. But, Wonderland Cupcakes make them inexpensive and

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within the reach of middle class customers.

Weaknesses

Short-staffed: When dealing with art, a single problem lies in every field, there are

not many artists available out there. This causes the company to be short-staffed, which

eventually limits its growth and potential to higher earnings.

Transportation: Wonderland Cupcakes serves an unlimited area. Wonderland Cupcakes have

an established distribution system.

Opportunities

Changing consumer tastes have given rise to changing consumer tastes have given rise to

facilities can capitalize on such home-made high quality products: In the recent years,

customers are becoming more and more health conscious and prefer home-made goods made

with quality ingredients and customers are also willing to pay a high price for that.

Threats

Raw-material and energy costs volatile: The costs of major raw materials, such

as wheat, vegetable oils, fuel for delivery fleets, and natural gas for ovens, can change

rapidly. The volatility in prices of raw-materials cannot affect the end-product price, thus

shrinking the profit.

Competitors: Current and potential competitors are the major threats. The creativity and the

uniqueness of its cupcakes cannot be patented and can easily be copied.

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Wonderland cupcakes

15 .Competitive Edge

The competitive advantage comes from its uniqueness, differentiation, high quality at lower

price, all which are key desires for all consumers of the industry.

16 .Marketing strategy

The marketing strategy will include a lot of advertising online and in the

targeted print media. We believe in target marketing and it will be aimed at getting the

right information at the right place. We will make sure that those who will appreciate the

product will know about it.

17 .Sales Strategy

Wonderland Cupcakes focuses first on the increased demand of unique and creative cakes

for birthdays, anniversaries and weddings. People are so tired of having the store bought

square or round cupcakes for these occasions, they want something different and something

that represents them, talks about them. It will make the quality cupcakes which are also

custom-made but will give a fresh new look to cupcakes. One of a kind designs and mouth-

watering cupcakes will be affordable to the middle-class.

18 .Financial Plan

We want to finance growth in terms of increased demand through a combination of,

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short-term debt and cash inflow. Larger purchases of more equipment like oven, fridge

computer etc after full depreciation will require approximately eighty percent debt

financing (long term debt). Additional investments will be primarily financed with cash flow.

Inventory turnover must remain at or above one or we run the risk of backing up

orders and jeopardizing our freshness guarantees. We have had no problems with

accounts receivable and we expect to maintain our collection days at 3 to 5 with minimal

sales on credit. In addition, we must achieve gross margins of eighty-five percent and hold

operating costs no more than seventy-five percent of sales .

19 .Break-even Analysis

The break-even analysis shows that Wonderland Cupcakes have sufficient sales strength to

remain viable. Our break-even point is close to 7525 cakes per month, which amounts to

less than $20,000 in revenue per month. Wonderland Cupcakes have high average cost of

almost $16,500. Although its average variable cost per unit is very low, the high fixed costs

delay its break-even time.

20 .Projected Profit and Loss

In the projections for Wonderland Cupcakes, the company starts off with yearly sales of

about $100 thousands in its first year of operation. With the growth in business and

expansion into other lines, Wonderland Cupcakes manages to earn revenue of about $255

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Wonderland cupcakes

thousand. Wonderland Cupcakes have a high gross margin of about 85% almost throughout

its five years of projections, which seems to leave a lot of room for its fixed expenses and

other administrative or operating expenses. In the first year, Wonderland Cupcakes is

projected to have a loss after paying its operating expenses, taxes and interest payments. But,

it is projected to turn a net profit of almost which increases almost 20% by the end of fifth

year, 10 .%

21 .Projected Cash Flow

Wonderland Cupcakes expects to have all its transactions through online payments, credit

cards, checks or cash, none of which have a transaction time more than a couple of days

and thus is almost as liquid as cash. Wonderland Cupcakes will borrow $50 thousands in

Long Term Loans for purchase of long term assets like convention oven, microwave oven,

fridge etc. the company will repay the loan in 5 years with equal amounts of payment each

month.

22 .Business Ratios

Standard business ratios are included in the following table. The ratios show a solid plan

for growth in order to reach maximum production within the first few years. Asset to

sales ratio doubles from the time of inception to the end of fifth year. Current debt to

total asset ratio is low in the first year, but maintains almost 25% from the next. Last

but not the least the Acid Test maintains an average of 2.5 times throughout the 5 year

period.

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Wonderland cupcakes

23 .Long-Term Plan

The Business Plan covers five years of activities. We consider the financial projections in

the Business Plan as conservative. The sales figures are the minimum amount we wish

to sell. The company also plans to expand to other locations and open up stores in several

other locations in the 6th year, which are not reflected in this business plan. At the end

of fifth year, all large equipment like the ovens, fridge etc. will be sold for salvage value

and new equipment will be purchased for better efficiency.

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Wonderland cupcakes

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Wonderland cupcakes

Start –up

Requirements

Start-up Expenses

Legal $2,500

Insurance $2,500

Lease $12,500

Computer $1,000

Marketing $7,000

Other $2,500

Total Start-up Expenses $28,000

Start-up Assets

Cash Required $10,000

Start-up Inventory $ 12.500

Other Current Assets $2,500

Long-term Assets $12,500

Total Assets $37,500

Total Requirements $65,500

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Market Analysis

20162015201420132012GrowthCustomers

54,12153,06052,02051,00050,0002%Weddings

28,13927,31926,52325,75025,0003%Birthdays

10,40610,30310,20110,10010,0001%Holidays

20,80020,60020,40020,20020,0002%Graduation

113,466111,282109,144106,300105,0002%Total

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Wonderland cupcakes

Bibliographic References

http://www.ehow.com/about_5234246_bakery-industry-analysis.html#ixzz1ODsazdx1

www.hover.com

http://www.entrepreneur.com/businessplan/index.html

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