BUSINESS PLAN

Mini Burger Palace

By: Kory Gill, Owner

April 11, 2014

3030 Ionia Grand Rapids Michigan, 49503

Mini

Palace

Burger

Table of Contents

BUSINESS PLAN ............................................................................. 1

Mini Burger Palace .......................................................................... 1

Abstract…………………………………………………….......…..3

1.0 EXECUTIVE SUMMARY................................................... 4

1.1 Product ................................................................................... 4

1.2 Customers .............................................................................. 4

1.3 What Drives Us...................................................................... 4

2.0 COMPANY DESCRIPTION .................................................. 6

2.1 Mission Statement ................................................................. 6

2.2 Principal Members................................................................ 6

2.3 Legal Structure...................................................................... 6

3.0 MARKET RESEARCH .......................................................... 7

3.1 Industry .................................................................................. 7

3.2 Customers .............................................................................. 7

3.3 Competitors ........................................................................... 8

3.4 Competitive Advantage ........................................................ 8

3.5 Regulation .............................................................................. 8

4.0 PRODUCT/SERVICE LINE .................................................. 9

4.1 Product or Service ................................................................. 9

4.2 Pricing Structure ................................................................. 10

4.3 Product/Service Life Cycle ................................................. 10

4.4 Intellectual Property Rights ............................................... 10

4.5 Research & Development ................................................... 10

5.0 MARKETING & SALES...................................................... 12

5.1 Growth Strategy .................................................................. 12

5.2 Communication ................................................................... 12

5.3 Prospects .............................................................................. 12

6.0 FINANCIAL PROJECTIONS ............................................. 13

6.1 Profit & Loss........................................................................ 13

6.2 Cash Flow (01/23/2015 to 05/29/2015) ............................... 14

6.3 Balance Sheet ....................................................................... 15

6.4 Break-Even Analysis ........................................................... 17

6.5 Financial Assumptions ........................................................ 18

6.5.1 Assumptions for Profit and Loss Projections ................ 18

6.5.2 Assumptions for Cash Flow Analysis ............................. 18

6.5.3 Assumptions for Balance Sheet ....................................... 18

6.5.4 Assumptions for Break-Even Analysis ........................... 19

10.0 Management styles .............................................................. 24

Glossary…………………………………………………………25

Works cited……………………………………………………...26

Abstract

The business plan outlines how much money it will take to get the Mini Burger Palace up and running.

My Mini Burger Palace is a unique restaurant idea that sells mini hamburgers. Mini hamburgers is what

the restaurant’s success will be based on. The mini hamburgers are made with 100% beef patties.

Customers will be able to build their own mini burgers just the way they want them. All of the food

items in the restaurant are made with quality ingredients.

Mini Burger Palace will add one new product every six months to compete with our competitors. In

addition, Mini Burger Palace will be adding some temporary products for the holidays for customers

who want to celebrate the holidays the right way.

Furthermore, Mini Burger Palace feels strongly in picking the right managers to lead the burger shops.

Once the company expands, the managers will be required to be friendly with customers and

employees. However, management will be trained on how to give out a command without disrespecting

the employees. The employees are the life in the blood at every Mini Burger Palace that is built. For

this reason, the restaurant wage will start at $11/hour once the company become stable.

1.0 EXECUTIVE SUMMARY

1.1 Product

I will be selling mini hamburgers (it will be in between a white Castle burger and a regular size

hamburger), regular size fries, and coke products. Mini hamburgers will be made with 100% beef. The

French fries will be hand cut by one my employees. I will serve a hand-spun shake, similar to the ones

at Dairy Queen. As, my business grows, I will be adding new products. In addition, I will be looking

for alternative products that could make my burgers less calories.

1.2 Customers

Mini Burgers Palace target customers who have busy lives, that want to eat a real hamburger but don’t

have the time to make it themselves. This shop targets customers who wants to try something different

but not too out of the ordinary. To be exact, the restaurant will be marketing to young adults who don't

have the time to make their own meals.

1.3 What Drives Us

Even though the Fast food industry is extremely competitive, I believe there is a place for a unique

restaurant that sells 100% beef burgers. My goal is to make burgers that are healthier for my customers.

The reasons why I will not fail are:

Not too many fast-food places serves 100% beef hamburgers

Hand cut fries

Hand spun-shake

Customers will be able to pick whatever they want on their hamburgers

People are leaning towards better food products

Happy workers

I will be performing extensive research on what drives the fast food industries.

Nklmnk;ml;

Mini Burger Palace coming

soon!

Attention employees! The management is going to serve you

for a change.

Employee of the

month

Manager of the

month

2.0 COMPANY DESCRIPTION

2.1 Mission Statement

To build hand crafted-hamburgers made from just the ingredients that the customers loves and nothing

they don't.

2.2 Principal Members

I am starting this company small. Therefore, I will be the only member in operating the company in the.

As the company grows, I look to promote my top of the line workers and bring in proven people to

help with the operation of the company.

2.3 Legal Structure

Mini Burger Palace is a sole proprietorship.

3.0 MARKET RESEARCH

3.1 Industry

Mini Burger Palace will be part of the fast-food industry. There are not too many fast food chains that

sells mini size hamburgers like the Mini Burger Palace will offer. The most noticeable food chain that

sell mini hamburgers being White Castle. The differences between White Castle and Mini Burger

Palace will be, Mini Burger Palace will allow customers to put whatever they want on their

hamburgers. The hamburgers will be bigger than a White Castle burger. This is not to mention that

Mini Burger Palace will use only 100% beef to make hamburgers.

The fast food industry is really competitive. However, in 2012 there were a 5% growth in the fast food

industry according to Euromonitor International. Experts are saying that the fast food industry will rise

3% a year (2013). I will expect Mini Burger Palace to have a good growth margin in the first five years.

This is because the restaurant will gain brand awareness, and most fast food chains already have brand

awareness. After the first five years, I am expecting my restaurant to grow 5% to 10%. This is because

the restaurant growth will stabilize after the first five years. If I decide to build another Mini Burger

Palace in a different location, I will expect the company’s growth margin to be in the negatives the first

couple of years. I will expect my growth margin to be 20% for the next two years. The growth margin

will level off after the new shop has been in business for four years.

3.2 Customers

Mini Burger Palace will attract people who want fast food but also want quality. The company will be

able to satisfy anybody who is willing to pay for quality ingredients, as Mini Burger Palace will make

burgers with 100 percent beef. The fast food place will be affordable for anybody with a job and will be

able to bring in picky eaters since they will be able to build their own burgers.

3.3 Competitors

Mini Burger Palace's competitors will be: Checkers (or Rally's), White Castle, McDonalds, Burger

King, Sonic, and many other fast food chains.

3.4 Competitive Advantage

Mini Burger Palace has the following advantages compared with competitors:

· 100% beef hamburgers · Small size

· Burgers that customers can eat with one hand

· Costumers are able to build their own burgers

· Hamburgers are less calories

· allows customers to think about what they want to try on their hamburgers.

3.5 Regulation

Mini Burger Palace must meet all government regulation (federally and locally). Specifically, Code of

Federal Government regulation in title 21 section 10.

4.0 PRODUCT/SERVICE LINE

4.1 Product or Service

Mini Burger Palace will have hand crafted hamburgers and customers will be able to pick whatever

they want to put on their hamburgers. The hamburger will be made with 100% Beef. The hamburgers

will be in between the size of a White Castle burger and a regular hamburger. The addition of French

fries and pop will be added when somebody orders a combo meal. Vanilla Shake will be offered as

well. The topping that customers will be able to put on their mini burger includes:

· Lettuce

· Tomato’s · Onion

· Pickles

· Liquid cheese

· Bacon

· Fries · Shrimp

· Blue cheese

· pepper Jack cheese

· American Cheese

· Swiss cheese · BBQ sauce

· Continents

· Mini Burger Palace ranch

4.2 Pricing Structure

· The Mini hamburger will be $ 5 dollars for five of them

· Small French fries will be .89 cents

· Regular size fresh fries will be $1.25 · Large French fries will be $4.00

· Small pops will be .89 cents

· Medium pops will be $1.00

· Large pops will be $1.25

· Vanilla shake will be $3.45

4.3 Product/Service Life Cycle

All of the products are pending for more research before opening up the restaurant.

4.4 Intellectual Property Rights

Mini Burger Palace is a trademark name in the state of Michigan. The hamburger recipe is a family one

that is handed down from generation to generation.

4.5 Research & Development

Mini Burger Palace is preparing to do the following: · Conduct Research on how White Castle got successful.

· Do research on the amount of time a fast food place can take to get the food out to the customers

before losing them.

· Planning to introduce a chocolate shake after a couple of months being open.

5.0 MARKETING & SALES

5.1 Growth Strategy

In order to gain market share, Mini Burger will do the following:

· Extensive research on the fast food Industry?

· Provide quality service and products · Get customers in and out of the restaurant at a fast pace.

· Make sure all of the food is fresh.

5.2 Communication

Mini Burger Palace will communicate with the customer by:

· Advertising on build boards · Greeting customers and making sure all of them are taken care of.

· Making sure all of our products are fresh and enjoyable.

5.3 Prospects

The company is planning to get customers into the shop by word of mouth. Mini Burger Palace is

planning to advertise to customers. Also, we will provide outstanding customer service to maintain our

customer base.

6.0 FINANCIAL PROJECTIONS

6.1 Profit & Loss

Year 1 Year 2 Year 3

Sales $207,360 $217,728 $228,614

Costs/Goods Sold $105,000 $110,000 $118,000

GROSS PROFIT

OPERATING EXPENSES

$102,360 $107,728 $110,614

Salary (Office & Overhead) $61,568 $61,568 $61,568

Payroll (taxes, etc.) $3,694 $3,694 $3,694

Outside Services $0 $0 $0

Supplies (office & operation) $200 $150 $100

Repairs & Maintenance $0 $100 $150

Advertising $10,000 $500 $750

Car, delivery & travel $0 $200 $350

Accounting & legal $1,000 $1,000 $1,000

Rent $3,333 $3,333 $3,333

Telephone $50 $50 $25

Utilities $1,200 $1,200 $1,225

Insurance $5,000 $5,000 $5,000

Taxes (real estate, etc.) $6,000 $6,100 $6,100

Interest $0 $0 $0

Depreciation $0 $200 $400

Other expenses

TOTAL EXPENSES

$92,045 $83,095 $83,695

NET PROFIT BEFORE TAXES

Income Taxes

NET PROFIT AFTER TAX $10,315 $24,633 $26,919

Owner Draw/Dividends

ADJUSTED TO RETAINED $10,315 $24,633 $26,919

6.2 Cash Flow (01/23/2015 to 05/29/2015)

Pre-Startup

EST

Year 1 Year 2 Year 3 Total Item

EST

Cash on hand $150,000 $-442,766 $-282,631 $-73,947 $-649,344

CASH RECEIPTS

Cash Sales $25,000 $20,000 $23,000 $27,000 $95,000

Collections from CR

Accounts

$125,000 $100,000 $150,000 $120,000 $495,000

Loan/Cash Injection $100,000 $100,000 $100,000 $100,000 $400,000

TOTAL CASH RECEIPTS $250,000 $220,000 $273,000 $247,000 $990,000

TOTAL CASH

AVAILABLE

$400,000 $-222,766 $-9,631 $173,053 $340,656

CASH PAID OUT

Purchases $300,000 $25,000 $30,000 $24,000 $379,000

Gross Wages $3,333 $3,332 $3,333 $3,333 $13,331

Outside Services $0 $0 $0 $0 $0

Supplies $5,000 $5,000 $5,000 $5,000 $20,000

Repairs & Maintenance $0 $0 $250 $100 $350

Advertising $10,000 $0 $100 $0 $10,100

Car, delivery & travel $0 $0 $100 $150 $250

Accounting & legal $1,000 $1,000 $1,000 $1,000 $4,000

Rent $3,333 $3,333 $3,333 $3,333 $13,332

Telephone $1,200 $1,200 $1,200 $1,200 $4,800

Utilities $2,400 $2,400 $2,400 $2,400 $9,600

Insurance $10,000 $10,000 $10,000 $10,000 $40,000

Taxes (real estate, etc.) $6,000 $6,100 $6,100 $6,000 $24,200

Interest $0 $0 $0 $0 $0

Other expenses $0 $0 $0 $0 $0

SUBTOTAL $342,266 $57,365 $62,816 $56,516 $518,963

Loan principal payment $500 $500 $1,500 $3,000 $5,500

Capital purchase $500,000 $2,000 $0 $1,000 $503,000

Other startup costs $0 $0 $0 $0 $0

Reserve and/or Escrow $0 $0 $0 $0 $0

Others withdrawal $0 $0 $0 $0 $0

TOTAL CASH PAID OUT $842,766 $59,865 $64,316 $60,516 $1,027,463

CASH POSITION $-442,766 $-282,631 $-73,947 $112,537 $-686,807

6.3 Balance Sheet

Assets Start Date: End Date:

CURRENT ASSETS

Cash in bank $50,000 $112,537

Accounts Receivable $100,000 $80,000

Inventory $5,000 $1,000

Prepaid Expenses $500,000 $400,000

Other current Assets $5,000 $5,000

TOTAL CURRENT ASSETS $685,000 $623,537

FIXED ASSETS

Machinery & Equipment $15,000 $10,000

Furniture & Fixtures $1,000 $500

Leaseholder improvements $2,000 $1,500

Land & Buildings $500,000 $400,000

Other fixed assets $0 $0

TOTAL FIXED ASSETS (net of depreciation)

$518,000 $412,000

OTHER ASSETS

Intangibles $2,000 $2,500

Deposits $25,000 $25,000

Other $0 $0

TOTAL OTHER ASSETS $2,000 $2,500

TOTAL ASSETS $1,205,000 $1,038,037

Liabilities & Equity

CURRENT LIABILITIES

Accounts Payable $15,000 $10,000

Interest Payable $1,000 $500

Taxes Payable $2,000 $1,500

Notes, short term (due in 12 months) $500,000 $400,000

Current part, long-term debt $2,000 $2,500

TOTAL CURRENT LIABILITIES $520,000 $414,500

LONG TERM DEBT

Bank loans payable $5,000 $2,000

Notes payable to stockholders $1,000 $1,000

LESS: short-term portion $500 $200

Other long-term debt $0 $0

TOTAL LONG-TERM DEBT $6,500 $3,200

TOTAL LIABILITIES $526,500 $417,700

OWNER'S EQUITY

Invested Capital $0 $0

Retained Earnings $678,500 $620,337

TOTAL OWNERS EQUITY $678,500 $620,337

TOTAL LIABILITIES & EQUITY $1,205,000 $1,038,037

6.4 Break-Even Analysis

VARIABLE COSTS Fixed Costs ($) Variable Costs (%)

Cost of Goods Sold $125,000 20,000%

Inventory $1,000 500%

Raw Materials $500 2,800%

Direct Labor $6,000 61,500%

FIXED COSTS

Salaries $6,000 51,568%

Supplies $200 5,000%

Repairs & Maintenance $0 100%

Advertising $10,000 0%

Car, delivery & travel $0 200%

Rent $3,333 0%

Telephone $0 1,200%

Utilities $0 2,400%

Insurance $10,000 0%

Taxes $0 6,000%

Interest $0 0%

Depreciation $0 200%

Other Costs $0 0%

Principal portion of debt payment

Owners draw

Total Fixed Costs $132,500 84,800%

Total Variable Costs $29,533 66,668%

BREAKEVEN SALES LEVEL:

6.5 Financial Assumptions

In this section I will be explaining how I came up with my numbers in my chart. Be advised, all of the

numbers in the chart shown above is just an educated guess. There are no guarantees that Mini Burger

Palace will hit the projected numbers.

6.5.1 Assumptions for Profit and Loss Projections

My revenue assumption is based off of a restaurant in the same area that I want to build my Mini

Burger Palace by. I figured out there are 30 customers that goes into the restaurant and spends at least

$8. I have calculated my earning by taking an average of 20 customers per day who spends an average

of $8 dollars during a visit. I figured out my expenses by taking an educated guess on how much

products would cost at a fast food place and adjusting it because I sell 100% beef burgers. My

employees’ expense assumption is based off a hiring of eight part-time employees and having me as the

general manager of the store. I will have a delivery service, after the first year in business, for

customers who spends $25 dollars or more. I will do a lot of advertising in the first year of business by

using build boards, posters, and internet.

6.5.2 Assumptions for Cash Flow Analysis

I have estimated that I will be in the red the first three years of this company because fix expenses will

be high when I start off my business (like paying for the building). I assume that I will buy most

products with cash until I run out but I may need to revise this assumption later.

6.5.3 Assumptions for Balance Sheet

Mini burger Palace will be armed with assets in the beginning of the company life. The biggest asset

being the building which will be owned by me.

6.5.4 Assumptions for Break-Even Analysis

Mini burger palace don’t have a break-even analysis we will be seeing how the first few years go

before making a guess about when we should be at the break-even point. Instead I have listed

everything that could possible go wrong when starting a fast-food chain.

6.5.5 Things that can go wrong

The setbacks Mini Burger Palace may see in the start of the company are as follows:

Restaurant don’t meet sell expectations in the first couple of years.

Workers steals money from the store

Store burns down

Food is not delivered on time

Restaurant becomes infested with bugs and rodents

Tree falls on the restaurant

Somebody robes the restaurant

Insurance refuses to cover full cost of building after a flood

6.5.6 Financial Charts

Current Assets chart:

Fixed Asset chart:

Current Liabilities chart:

50000 1000005000

500000

250005000

685000

Current asset

Cash in bank Accounts Receivable Inventory

Prepaid Expenses Deposits Other current Assets

TOTAL CURRENT ASSETS

15000 1000 2000

500000

0

518000

Fixed asset Chart

Machinery & Equipment Furniture & Fixtures

Leaseholder improvements Land & Buildings

Other fixed assets TOTAL FIXED ASSETS(net of depreciation)

Long-term debt chart:

Cash flow chart:

150001000

2000

500000

2000

520000

Current liabilities

Accounts Payable Interest Payable

Taxes Payable Notes , short term (due in 12 months)

Current part, long-term debt TOTAL CURRENT LIABILITIES

5000

1000500

0

6500

Long-term debt

Bank loans payable Notes payable to stockholders

LESS: short-term portion Other long-term debt

TOTAL LONG-TERM DEBT

7.0 strategies

I will use the permanent item strategy so customers will be will be aware of something’s that is

on the menu at all times. The Fast-food industry is always adding new permanent items on the

menu. In order to keep up with the competition, I will be adding something new to the Mini

Burger Palace every six months. To give the customers something new to try, I will have some

temporary products that are just for the holidays (Clark).

8.0 Best practices

I will be training my workers so they have the opportunity to move up in my company when the

time comes for me to expand my business. This is an important step for the Mini Burger Palace

because it will help raise the employee’s self-confidence. This will make the employees more

likely to stay with my company. The employees will feel like they have an opportunities to

move up in the company and make more money. McDonalds adopted this strategy to boost up

employees self-esteem.

The areas that I will help my employees improve are:

4%

0% 1%4%

3%

7%

11%

0%

9%

0%0%0%0%0%0%0%0%0%0%0%0%0%0%

10%

0%

14%

0%

0%0%

24%

-13%

cash flowCash on hand

CASH RECEIPTS

Cash Sales

Col lections from CR Accounts

Loan/Cash Injection

TOTAL CASH RECEIPTS

Communication skills- this is a must have skill to have to be able to run one of my stores

Computer skills- mainly for marketing purposes

Negotiation skills- this skill will be handy to get vendor prices down.

Decision making- this skill has to be learned to become a boss

Mini Burger Palace will sign a deal with McDonalds, so we are able to recycle oil and use the

recycle oil for other use in the business. This will help cut-down recycling costs. Mini burger

Palace will recycle all of its trash as well. For the first two years that the company is in business, I

will have the wrappers put into some see through tables and chairs. This will help promote my

company as being “green” (Product Development Strategy for McDonald's, 2014).

9.0 S.W.O.T Analysis

Strengths

Quality products

research

Opportunities

Use of marketing

People want to eat

better

Weaknesses

Products cost

competitive industry

Threats

Setbacks

McDonalds

10.0 Management styles

I am going to be the only manager at Mini Burger Palace in the beginning. In order to keep operations

cost low, the restaurant will be open for ten hours/five days a week. I will extend my restaurant hours

when I get enough business to promote one of my works to management. Additionally, there are a

combination of management styles that I will require all of my managers to manage my restaurant with.

The management styles that will be used in the Mini Burger Palace are:

Participatory Style- Managers using this style tells their employees the job role of the

employees and why the role is so important. Managers gives each one of their employers a task

to complete in a certain amount of time as well. This helps employees understand their role in

the company.

Why is it important? This will guarantee that employees will know what they supposed to be

doing. Also, employees will be less likely to stand around waiting to be told to do something.

Directing style- Manager tells employees how to do the task that they assigned to employees.

Management tells employees when the task must be accomplished as well. This management

style is used when there is a tight dead line.

Why is it important? - My managers will have to know when to demand the best out of their

workers. Management has to get things done and they need help from their employees. Also,

workers need to know how to do the task that managers are asking them to get done.

I will allow management to pick their own management style. I only require that they have

these two qualities, listed above, in their management style. I believe these two management

qualities are critical for driving sales as long with the manager being customer friendly (The

Effective Management Styles).

Glossary

Liabilities- something that you are accountable for.

Break-Even Analysis- A prediction on when a start-up company will stop losing money. It could be

looked as the turning point of the company.

Management- A group of people who keep the store running.

Long-term debt- Money owed to someone that will get paid out for multiple years.

Short-term debt- Money owed to someone that will get paid in less than a year.

Cash flow-money that is coming into the company

Fix assets- items that are for long-term use

Variable assets- items for short-term use.

Accounts payable-money that the company owes

Accounts Receivable-Money that is owed to the company.

Cash receipts- check, money order, or other transactions that is giving to a company as a form of

payment.

Works Cited

Clark/Demand Media, W. (n.d.). Product Development Strategy for McDonald's | Chron.com. Re-

trieved April 10, 2014, from http://smallbusiness.chron.com/product-development-strategy-

mcdonalds-12207.html

The Effective Management Styles. (n.d.). Retrieved April 13, 2014, from www.allbusiness.com/hu-

man-resources/workforce-management/11438-1.html

Fast Food in the US. (2013, September 13). Retrieved April 19, 2014, from http://www.euromoni-

tor.com/fast- food-in-the-us/report

McDonald's Corporation (n.d.). McDonald's Announces "Global Best Practices" in Sustainable

Supply and Green Initiatives – Press Releases on CSRwire.com. Retrieved March 11, 2014,

from http://www.csrwire.com/press_releases/29527-McDonald-s-Announces-Global-Best-

Practices-in-Sustainable-Supply-and-Green-Initiatives-