Final CBG Business Plan

7/31/2019 Final CBG Business Plan

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Legal Page

Confidentiality Agreement

The undersigned reader acknowledges and accepts that the information and details provided

by Custom Baked Goods in this business plan is confidential; therefore, reader agrees notto disclose any information contain here-in without the express written permission of Daniel

Lukasavitz or Anna Burns.

It is acknowledged by reader that information to be furnished in this business plan is in all

respects confidential in nature, other than information which is in the public domain through

other means and that any disclosure or use of same by reader may cause serious harm or

damage to Custom Baked Goods.

Upon request, this document is to be immediately returned to:

Custom Baked Goods1223 24th Ave.

Greeley, CO 80634(970) 673-7255

____________________________________________

Signature

____________________________________________

Name (typed or printed)

___________________

Date

This is a business plan. It does not imply an offering of securities.



Executive Summary

Custom Baked good will bring a unique option to Weld County by offering our delicious baked

goods and premium coffee products to the public in multiple locations through a mobile bakery

truck. This business plan will show how our company plans to carry-out the implementation of a

mobile kitchen food truck. By having a mobile commercial kitchen truck our bakery will be able

to avoid the cost of leasing/purchasing and maintaining a physical facility, and pay property tax,

as well as save on energy costs. A mobile Custom Baked Goods will also create a niche in

Greeley that no other company has achieved yet. No other local baking company has attempted

to obtain a mobile commercial kitchen which is at their disposal around the clock. By having a

mobile kitchen Custom Baked Goods can go to the public instead of having the public come to

them. We would be able to travel to area festivals, fairs, community events, and various catering

events.

Mission Statement

Our mission is to provide our clients with the best baked goods custom made to their personal

specifications. We are custom from start to finish. We use all fresh and local premium

ingredients. There is a pinch of love in every product. Your satisfaction is 100% guaranteed!

Company Goals and Objectives:

Our first goal is to have a healthy, successful company that is a leader in customer service,

superior products, and that has a loyal community following. Our second goal is to build and

expand to keep up with our market and stay ahead of our competitors. By doing this we will use

innovative and fresh ideas that break the mold of traditional companies within the market.



Company Overview

Custom Baked Goods prides itself in offering “homemade” baked items made to customers strict

guidelines. We offer consulting with the customer with every order, ensuring we get every detail

right. We will listen to the customer and offer our expert advice to make the customers vision a

reality. When we commit to a project we give 200% into the project from start to finish. Since

our company has the ability to offer customers an endless variety of items, we can not only open

a new customer-base with every project we undertake but learn new and valuable skills that will

in turn improve our overall customer satisfaction. Every Custom Baked Goods product is made

from scratch with fresh, local, and high quality ingredients.

The importance of excellent customer service and building desirable products is

important to us in any business, and of course making money. By providing customer service

beyond that of our competitors we can build a customer base that will not only expects our

superb customer service but will look forward to being served in that manner again. When the

customer goes to competitors they will be disappointed that their needs were not met as well as

when they patronize our bakery.

Customers will learn about Custom Baked goods not only through word of mouth, but

through online and print advertising, as well as intense community involvement. There will be a

large focus on connecting with customers online. The daily location of the bakery truck will be

posted on our Twitter and Facebook accounts, as well as our website. When customers would

like to place a special order they are welcome to either call or place the order through our

internet outlets, and we offer delivery to your location. Our bakery prides itself on our drive to

attend community events and fundraisers; such as our decorate-your-own cupcake both at the



"Zumbathon" Relay for Life fundraiser. Custom Baked Goods will also become a staple at

family friendly events such as Friday Fest and Greeley's annual 4th of July Stampede

celebration.

Management/ Employee Structure Plan:

Our company currently consists of two proprietors, Daniel Lukasavitz and Anna Burns.

The two of us run every aspect of the company with a little help from our hired assistants. Since

we currently do not have funding to pay any employees, we are planning on future hiring’s to go

as follows. After we obtain starting capital and acquire a food truck we would start to hire

additional employees. We would start with an assistant baker and an accountant. These two

positions would be critical to help us competently run a successful business. The accountant

would help to keep the books straight and keep us on track to achieve maximum profits. The

addition of an assistant baker would help to relieve Anna and Dan to help grow the company

further and allow us to do administration work instead of production. After about six months of

operation we would bring on a marketing guru to help us reach a larger group of customers and

help to book community events. Lastly we would have an on-call cake delivery specialist. This

person would help to organizing deliveries, table designs, and other essential logistics. Below is

our organizational chart and expected monthly salaries. The first twelve months would be very

Personnel Plan Month

1 Month

2 Month

3 Month

4 Month

5 Month

6 Month

7 Month

8 Month

9 Month

10 Month

11 Month

12 Daniel Lukasavitz 0% $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300

Anna Burns 0% $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 Baking Assistants 0% $375 $375 $375 $375 $375 $375 $375 $375 $375 $375 $375 $375

Accountant 0% $483 $483 $483 $483 $483 $483 $483 $483 $483 $483 $483 $483Marketing Guru 0% $0 $0 $0 $0 $0 $0 $500 $500 $500 $500 $500 $500 Delivery Specialist 0% $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Total People 5 5 5 5 5 6 6 6 6 6 6 6

Total Payroll $3,558 $3,558 $3,558 $3,558 $3,558 $3,558 $4,058 $4,058 $4,058 $4,058 $4,058 $4,058



tight as far as monthly salaries. We hope to become popular enough to be able to increase all pay

rates by 20% for all employees

Core Product Offerings



Market Research

While doing a market analysis I found that Greeley’s average family spends $572.70

yearly on “ Bakery and Cereal products” (www.businessdecision.info). That equals out to be

$12,035,304 a year for “ Bakery and Cereal product ” sales. I do realize that the majority of this

business is focused in big box stores and franchised businesses, but to even get a 10% market

share would equal to about $300,000 annual business. If we look at the “Snacks and Other Food

at Home Products” category, the chart defines as “ Snacks and Other Food at Home includes

candy, chewing gum, sugar, artificial sweeteners, jam, jelly, preserves, margarine, fat, oil, salad

dressing, nondairy cream and milk, peanut butter, frozen prepared food, potato chips, nuts, salt,

spices, seasonings, olives, pickles, relishes, sauces, gravy, other condiments, soup, prepared

salad, prepared dessert, baby food, miscellaneous prepared food, and nonalcoholic beverages

(http://greeleygov.com/CMO/Documents/Economic%20Development/greeleyretailgoodsandservi

cesreport.pdf).” This categories annual average families spending is $1,506.55, with annual

product sales that reach $31,660,238! A 10% market share would be $759,845.72 of annual

business! With low over head and smart managing this could be the way to make some money.

Marketing Tactics

Custom Baked Goods plans a massive marketing plan, starting the day we receive

starting capital. Using our existing Facebook page, Twitter, and Community Bulletin Boards, we

can effectively reach thousands of people. We also plan on getting into a lot of the area events

which involve print advertisement, such as Taste of Loveland, Greeley Arts Picnic, Oktoberfest

and the various seasonal parades and festivals. Also, using the outside of the truck as a billboard

gives an incredibly inexpensive, and also incredibly functional advertising medium.



Key Demographic

Existing custom order customers for cakes, cupcakes, and deserts.

Office employees

Families

Key Marketing Messages

Quality, Custom Baked Goods

Local, Organic Ingredients

Bring the Goods to YOU!

Importance of Internet and Social Media

Lets our customers know the truck location throughout the day.

Increasing our customer base through word of mouth.

Guest feedback and location requests.



Competition

Much of the competition located in Greeley is from local, well-known Mom & Pop

shops. These include Batter Up Cakes, Eileen's Colossal Cookies, Red's Dogs and Doughnuts,

and Nielsen Family Bakeries. Custom Baked Goods will also have to contend with big box

grocery stores such as Safeway, Wal-Mart, and King Soopers.

Competitive Advantage

Our company will have many advantages over our competitors. Having our bakery

located in a mobile kitchen is our key advantage. The company can be readily moved to areas

where substantial sales can be made. The use of the mobile food truck also allows us to maintain

low over-head costs resulting in a better profit margin, something most of our competitors are

lacking. Because Custom Baked Goods is a small company, we can easily adapt to changing

market conditions by modifying our offerings as well as changing locations.

The bakery intends to do a significant amount of sales via catering, delivery of pastries,

and by having the truck positioned near popular events (such as concerts and sporting events)

during the weekends. Approximately 1/3 of all food and beverage sale revenues will come from

this aspect of Custom Baked Goods operations. By utilizing bio-diesel in our food truck we can

avoid the every looming gas-hike. We can use recycled oil from local restaurants to fuel our

truck. This is a win-win for both Custom Baked Goods and the local restaurants because they

won’t have to pay to dispose of their waste oil and we can get fuel for our trucks for very cheap,

if not for free.

Competitive Barriers



The main barrier that Custom Baked Goods will encounter would be contending with

living in a college community. During the summer months Greeley’s population shrinks when

schools is not in session. Another risk would be that Custom Baked Good’s is still a fresh

company and obtaining brand recognition will be hard, but feasible. Lastly, obtaining enough

capital to start the venture is our biggest risk. We will have to obtain enough capital to sustain

the company for at least the 6 months to a year of starting up.

Resource Analysis

This venture already has about 51% of the needed resources to make this business

succeed. These resources include: personal experience and talent, knowledge, and a growing

customer base. Custom Baked Goods uses an existing “Facebook” page into order to connect and

market to followers. This resource is key to the operation of the business because it allows for a

free approach of sharing product details, pictures, and specials with our customer base. Custom

Baked Goods also already owns a lot of the necessary baking pans, decorating supplies, and tools

needed to produce a majority of our products. The company also currently has a point-of-sale

system along with the ability to accept credit cards and gift cards. The resources we are lacking

are: start-up capital, a functional food truck, and a giant marketing campaign. The food truck will

need to contain a 3 compartment sink, 2 ovens, a freezer and refrigerator, and a stove top.

Without these resources Custom Baked Goods cannot grow into the niche market of food trucks.

Equipment Cost

Food Truck $10,000

Eco-Friendly Retrofit $5,000

Dishwasher, Mixer, Food Processor, 2 $6,000



ovens, freezer, refrigerator, range

Exterior Truck Accoutrement $500

Total $21,500

Legal Environment

Custom Baked Goods will need to meet all health regulations for food service. Because

of our Food Truck status we do not have to be concerned with standing zoning permits, but do

need to be aware of local laws for Mobile Food Operations. Special Events permits will need to

be obtained in certain locations. Commercial insurance will be obtained as required by the

county.

Timeline

The timeline for how we will proceed will start with securing start-up capital. Once we

have the funding we will immediately put in a request for a custom made food truck. The

customization of the food truck will most likely last 3-5 weeks. In that time we will start to

acquire all start up supplies and inventory. We will also be finalizing permits and setting up

appointments for county and city inspections. Once everything is finished and approved we will

immediately begin working. Since the main purpose of the kitchen in to serve as Custom Baked

Goods commercial kitchen, we can begin making all of our packaged goods to sell to local

coffee shops on consignment. We will also be continuing to do our regular cake/cupcake

business.

Growth Potential



In the next five years Custom Baked Goods has the potential to grow exponentially. By

starting out small with a food truck operation, the company can grow into a traditional store

front. In years 5-10, the company will have multiple locations throughout the state serving our

ever-growing customer-base. The company will be in the red to start but within the first year

Custom Baked Goods will be in the black. By utilizing the low overhead of running a “bakery”

truck we can only see the profits growing rapidly. After the first year the business would plan on

hiring staff to cover more shifts so that the owners can work on marketing and finding new

locations or even including another “bakery” truck.

Financial Projections:

Custom Baked Good’s is seeking to raise $50,000 from a bank loan. The interest rate and

loan agreement are to be further discussed during negotiation. This business plan assumes that

the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used

for the following: Development of the Custom Baked Goods Food Truck, Financing for the first

six months of operation, Capital to purchase insurance, permits and licenses. Capital is also

being raised through current sales of in home baked items. Once the truck is up and running we

can predict that the company will generate a profit with-in 2 years. We believe that an estimated

monthly income of $1,200 will allow the company to make all of it payments and purchase

goods. That means that if the truck operates for 28 days out of the month that we will only need

to sell $43 of product a day to achieve this goal.

End Game Strategy

If the business is very successful, Custom Baked Goods may seek to sell the business to a

third party for a significant earnings multiple. Most likely, the Company will hire a qualified



business broker to sell the business on behalf of the Food Truck. Based on historical numbers,

the business could fetch a sales premium of up to 4 times earnings. If the venture has not gone

according to play and we do end up having to close the doors (or in this case, turn of the engine)

Custom Baked Goods will sell of any property it can and claim Chapter 11.

Financial Projections

Table: Profit and Loss

Pro Forma Profit and Loss Year 1 Year 2 Year 3

Sales $166,150 $241,525 $312,751Direct Cost of Sales $32,123 $47,232 $60,499Other Production Expenses $0 $0 $0Total Cost of Sales $32,123 $47,232 $60,499

Gross Margin $134,028 $194,293 $252,252Gross Margin % 80.67% 80.44% 80.66%

Expenses Payroll $45,696 $54,835 $65,802Sales and Marketing and Other Expenses $2,300 $2,500 $3,00

Depreciation $0 $0 $0Leased Equipment $0 $0 $0Utilities $6,000 $6,000 $6,000Insurance $2,400 $2,400 $2,400Misc Truck Expenses $2,000 $2,000 $2,000 Payroll Taxes $7,509 $8,103 $9,058Other $0 $0 $0

Total Operating Expenses $65,905 $75,838 $88,260

Profit Before Interest and Taxes $68,123 $118,455 $163,992EBITDA $68,123 $118,455 $118,455 Interest Expense $0 $0 $0Taxes Incurred $1,727 $18,381 $33,572

Net Profit $66,396 $100,074 $130,420Net Profit/Sales

39.96% 41.43% 41.70%



Chart: Profit Monthly

Chart: Profit Yearly



Chart: Gross Margin Monthly



Chart: Gross Margin Yearly

Table: Cash Flow

Pro Forma Cash Flow Year 1 Year 2 Year 3

Cash Received

Cash from Operations Cash Sales $166,150 $241,525 $312,751Subtotal Cash from Operations $166,150 $241,525 $312,751

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0New Long-term Liabilities $0 $0 $0Sales of Other Current Assets $0 $0 $0Sales of Long-term Assets $0 $0 $0New Investment Received $0 $0 $0Subtotal Cash Received $166,150 $241,525 $312,751

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations Cash Spending $50,063 $54,019 $60,387Bill Payments $104,118 $146,921 $172,515Subtotal Spent on Operations $154,181 $200,940 $232,902



Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $0 $0 $0Purchase Other Current Assets $0 $0 $0Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0Subtotal Cash Spent $154,181 $200,940 $232,902

Net Cash Flow $11,969 $40,585 $79,849Cash Balance $30,969 $71,554 $151,403

Table: Balance Sheet

Pro Forma Balance Sheet Year 1 Year 2 Year 3

Assets

Current Assets

Cash $30,969 $71,554 $151,403Inventory $3,834 $6,467 $7,216Other Current Assets $0 $0 $0Total Current Assets $34,802 $78,021 $158,619

Long-term Assets

Long-term Assets $0 $0 $0 Accumulated Depreciation $0 $0 $0Total Long-term Assets $0 $0 $0Total Assets $34,802 $78,021 $158,619

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities



Accounts Payable $11,774 $12,103 $14,365Current Borrowing $0 $0 $0Other Current Liabilities $0 $0 $0Subtotal Current Liabilities $11,774 $12,103 $14,365

Long-term Liabilities $0 $0 $0Total Liabilities $11,774 $12,103 $14,365

Paid-in Capital $300,000 $300,000 $300,000Retained Earnings ($281,000) ($276,971) ($234,082) Earnings $4,029 $42,890 $78,335Total Capital $23,029 $65,918 $144,253Total Liabilities and Capital $34,802 $78,021 $158,619

Net Worth $23,029 $65,918 $144,253



Table: Sales Forecast

Sales Forecast Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month

8

Month 9 Month10

Month11

Month12

Sales Dessert Sales 0% $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $16,000 $8,000 $12,000 $8,000 $12,000 $16,000POP Sales 0% $200 $200 $200 $100 $100 $100 $300 $50 $500 $100 $300 $500Carry Out 0% $300 $300 $300 $300 $300 $500 $1,000 $200 $700 $200 $500 $500WeeklyLessons

0% $1,800 $1,800 $1,800 $900 $900 $900 $1,800 $900 $900 $900 $900 $900

Total Sales $14,300 $14,300 $14,300 $13,300 $13,300 $13,500 $19,100 $9,150 $14,100 $9,200 $13,700 $17,900

Direct Cost of Sales

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month8

Month 9 Month10

Month11

Month12

Dessert Sales $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $3,200 $1,600 $2,400 $1,600 $2,400 $3,200

POP Sales $30 $30 $30 $15 $15 $15 $45 $8 $75 $15 $45 $75

Carry Out $45 $45 $45 $45 $45 $75 $150 $30 $105 $30 $75 $75

WeeklyLessons

$270 $270 $270 $135 $135 $135 $270 $135 $135 $135 $135 $135

SubtotalDirect Cost of Sales

$2,745 $2,745 $2,745 $2,595 $2,595 $2,625 $3,665 $1,773 $2,715 $1,780 $2,655 $3,485

Final CBG Business Plan

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