Introduction Painter/businessplans... · Web viewThe Facebook page and Twitter account will go live...

i

Gelato Mobile Business Plan April 8, 2009

ENGAGING SASKATOON’S ONLINE-SAVVY

RESIDENTS AND THEIR TASTEBUDS

Business Plan Submitted By:

Stephen Leask

Arvind Kumar

Stephanie Hughes

ii


Executive Summary

Gelato Mobile is a new and innovative way to market and sell gelato to Saskatoon. Gelato

Mobile is exactly what the name implies: it’s mobile, and offers delicious gelato to customers all

over Saskatoon. Gelato Mobile will offer 12 flavours of gelato on any given day. The location of

Gelato Mobile will depend on events scheduled around Saskatoon, as well as any high

pedestrian traffic areas that appear attractive and conducive to sales. The mobility factor of this

business plan is one of the key advantages. Gelato Mobile offers convenience and a unique

purchasing experience to its customers. By targeting events and high traffic areas, consumers

can purchase a great product without having to make a separate trip to a given location.

One of the key factors in this business plan is the marketing and promotion of the business. The

marketing is heavily based on a newer concept referred to as “social media”. This type of

marketing, which relies on the internet and mobile communications, has been rapidly

increasing in popularity over the past few years. The ability of the business to use social media

marketing techniques is almost as important as the product the business sells. Gelato Mobile is

not only selling Gelato, but an experience. Consumers will be actively engaged in the sales

process. Gelato Mobile will capitalize and promote social media techniques in an effort to

capture market share in Saskatoon.

Start up costs for Gelato Mobile will be about $6,000. Each of the 3 owners will contribute to

this evenly. This capital will be used to purchase initial inventory and help with expenses

occurred in the first month. No debt funding will be required due to the small size of the

business operation. Should the business require more capital, each owner will contribute

evenly. Based on the financial projections calculated, Gelato Mobile will be profitable,

averaging an annual net income of about $8,813 over the next five years, based on an annual

increase of 5% in sales.

Strategic use of social media marketing, careful cost control, and a fantastic product should

enable Gelato Mobile to be a successful small business opportunity.

1


Table of ContentsExecutive Summary..................................................................................................................................... ii

1.0 Introduction.....................................................................................................................................3

1.1 Food Industry, Social Media Phenomenon & Social Media Marketing..............................................3

1.2 Mission Statement.............................................................................................................................5

1.3 Goals and Objectives.........................................................................................................................5

2.0 Operations Plan.....................................................................................................................................5

2.1 Location.............................................................................................................................................6

2.2 Floor Plan...........................................................................................................................................6

2.3 Average Business Cycles....................................................................................................................7

2.3.1 Average Day................................................................................................................................7

2.3.2 Average Week.............................................................................................................................8

2.3.3 Average Month...........................................................................................................................8

2.3.4 Average Year...............................................................................................................................8

2.4 Supply Analysis..................................................................................................................................9

2.5 Capital & Net Working Capital Budget...............................................................................................9

2.6 Operating Expense.............................................................................................................................9

2.7 Cost of Goods..................................................................................................................................10

3.0 Human Resource Plan..........................................................................................................................10

3.1 Job Descriptions...............................................................................................................................10

3.1.1 Owners.....................................................................................................................................10

3.1.2 Operational Staff.......................................................................................................................11

3.2 Scheduling.......................................................................................................................................12

3.3 Labour Costs Breakdown.................................................................................................................12

3.4 Training Programs............................................................................................................................13

2


4.0 Marketing............................................................................................................................................13

4.1 Marketing Introduction...................................................................................................................13

4.1.1 Product.....................................................................................................................................13

4.1.2 Pricing.......................................................................................................................................14

4.1.3 Promotion.................................................................................................................................14

4.1.4 Place.........................................................................................................................................15

4.1.5 Segmentation, Targeting, and Positioning................................................................................16

4.2 Market Analysis...............................................................................................................................17

4.4 Marketing Strategy..........................................................................................................................18

4.5 Selling and Advertising.....................................................................................................................19

5.0 Financial Plan.......................................................................................................................................21

Table 5.1 Base case / Worst case / Best case Scenario variables.......................................................22

Table 5.2 Base case / Worst case / Best case Scenario results..........................................................22

Table 5.3 Summary of Financial Data.................................................................................................22

6.0 Conclusion...........................................................................................................................................23

Appendix A: Supplier Letters of Agreement

Appendix B: Facebook and Twitter Screen Shots

Appendix C: Competitive Industry Analysis

Appendix D: Saskatoon Events Calendar

Appendix E: Yearly Financial Projections

Appendix F: Assumptions

Appendix G: 2006 Industry Canada Small Business Profile for Mobile Food Services in Saskatchewan

3


1.0 Introduction

1.1 Food Industry, Social Media Phenomenon & Social Media Marketing

The food industry in Saskatoon is somewhat diverse, with a variety of restaurants, fast food

places and shops to obtain anything from breakfast burritos and mouth-watering muffins to

Vietnamese bun and delectable desserts.

As in any food service establishment, ice cream places usually warrant about a 70% gross

margin, with an average ticket per person of $3.00-$5.60.1 In addition, start up costs can range

from $50,000-$250,000 depending on location and equipment, and fixed costs usually depend

on square footage.2 Typical of Saskatoon food establishments, more than just the quality of the

food is key: it’s the atmosphere, cleanliness, and customer experience that contribute to a

successful business.3

As for the Mobile Food Services industry, a 2006 Industry Canada Small Business Profile

indicated 1230 businesses in Saskatchewan.4 Saskatoon’s portion of these businesses is

approximated at 2535 (21%, assuming there is a correlation between high concentrated

population areas and number of businesses). From the report (see Appendix G), 79.2% of the

businesses are profitable, showing a net profit of 19.2% of total revenue.

Social media marketing, the basis of Gelato Mobile’s marketing, and business, strategy stems

from social media. Since it is relatively new and ever-evolving, a clear definition of social media

does not truly exist. However, social media can be defined as the “editor-less content

prioritized by popularity”6, “information content created by people using highly accessible and

scalable publishing technologies [. . .] intended to facilitate communications, influence

1 http://answers.yahoo.com/questions/index?qid=20070924111911AA4eM55 2 Ibid 3 Ibid4 http://www.ic.gc.ca/app/sbp/prfpls/prfl/rprtStp/sv.do;jsessionid=0000ZslYz__NEm3c5AHPr8C13rF:1247mpv0c 5 Equals 2006 Saskatoon population of 202340 (http://www12.statcan.ca/english/census06/data/trends/ Table_1.cfm?T=CSD&PRCODE=47&GeoCode=11066&GEOLVL=CSD) divided by 2006 SK population of 985386 (http://www.stats.gov.sk.ca/pop/POP%20AGE%20GENDER%202006.pdf) multiplied by 12306 http://www.nudgelondon.com/blog/2008/07/define-social-media/

http://www.nudgelondon.com/blog/2008/07/define-social-media/

http://www.stats.gov.sk.ca/pop/POP%20AGE%20GENDER%202006.pdf

http://www12.statcan.ca/english/census06/data/trends/%20Table_1.cfm?T=CSD&PRCODE=47&GeoCode=11066&GEOLVL=CSD

http://www12.statcan.ca/english/census06/data/trends/%20Table_1.cfm?T=CSD&PRCODE=47&GeoCode=11066&GEOLVL=CSD

http://www.ic.gc.ca/app/sbp/prfpls/prfl/rprtStp/sv.do;jsessionid=0000ZslYz__NEm3c5AHPr8C13rF:1247mpv0c

http://answers.yahoo.com/questions/index?qid=20070924111911AA4eM55

4


interaction between peers and with public audiences [, . . .] typically done via the Internet and

mobile communications networks.”7 Also, social media “most often refers to activities that

integrate technology, telecommunications and social interaction”8 with [t]his interaction, and

the manner in which information is presented, depends on the varied perspectives and

"building" of shared meaning among communities, as people share their stories and

experiences.”9

Visit the following link for a You Tube video that explains “Social Media in Plain English”, using ice cream production as an analogy for social media:

http://www.youtube.com/watch?v=MpIOClX1jPE

The social media phenomenon has caught fire in the past few years, and is now being adopted

by a variety of businesses to reach and engage customers. In the past year, “consumers’ use of

social media grew 48%”10 and “49% of consumers [interviewed] who use the Internet

technology do so at least once a day.”11 This ever growing use, and repetitive use, makes an

attractive two-way channel to reach people; in fact, “61% turn to social media when researching potential purchases, with 31% saying they find the online sources more credible than advertising.”12 Businesses have now caught on to exploiting social media which has led to the term social media marketing to be dubbed. Social media marketing is “[u]tilizing social networking and user-generated content platforms to promote a product, service or content [which] [o]ften involves creating and participating in a dialogue with the target audience, rather than forcing an advertisement upon them. [. . .] When approached properly, social networks can be extremely effective channels for building product evangelism, reputation management or corporate branding.”13

7 http://en.wikipedia.org/wiki/Social_media 8 Ibid9 Ibid10 http://www.upi.com/Top_News/2009/04/06/So-called-social-media-soaring-in-Canada/UPI-84441239050428/ 11 Ibid12 Ibid13 http://www.yoursearchadvisor.com/glossary.php

http://www.yoursearchadvisor.com/glossary.php

http://www.upi.com/Top_News/2009/04/06/So-called-social-media-soaring-in-Canada/UPI-84441239050428/

http://www.youtube.com/watch?v=MpIOClX1jPE

http://en.wikipedia.org/wiki/Social_media

5


1.2 Mission Statement

To be innovative in the Saskatoon mobile food industry by combining the uniqueness of gelato

with the ever-growing trend and business strategy of social media marketing, to fully engage

the customer throughout the entire consumer process.

1.3 Goals and Objectives

Serve a niche market in Saskatoon with a unique, healthier alternative

Provide Saskatoon with social media experience, engaging customers in the purchasing

process

Provide University of Saskatchewan Edwards School of Business co-op and high school

students an integrated business opportunity

Maximize sales at $77,859 by Year 2013

Achieve average monthly sales of $ 1,540 between May and September

2.0 Operations PlanGelato Mobile will be a retail initiative, selling gelato products to a Saskatoon market who want

an engaging purchasing experience through use of social media (Facebook, Twitter). Sales will

be based on one-on-one direct interaction through the window at the mobile unit, with this

traffic generated through social media channels. Staff will be Facebook / Twitter enthusiasts

and will be well trained on all aspects of this special gelato experience.

Gelato Mobile’s hours will be as follows:

Store Hours

Wednesday - Friday 11:00AM to 9:00PM

Saturday - Sunday 10:00AM to 9:00PM

Gelato Mobile will operate only on the weekends during the month of May and September;

however, June through August, the above hours will be in effect. Gelato Mobile will not operate

Monday and Tuesday, to allow for cleaning, any maintenance, review of traffic statistics and

planning.

6


To provide a high level of customer service by managing customer flow, two employees will be

working in peak times (12pm – 6pm). In down times, the employees will be responsible for

analyzing traffic generated through various channels (i.e. Twitter, Facebook, etc) and providing

reports to Management. Traffic numbers will be recorded through the following:

Facebook ad click-through rates

Facebook Fans in Gelato Mobile Page

At unit site, for Twitter feeds generating immediate traffic (i.e. Gelato Mobile is at the

Centre Mall – first person to come up and say “Twitter” gets 2 free gelatos).

2.1 Location

Mobile by name, mobile by nature, Gelato Mobile will travel about Saskatoon, targeting

different high traffic areas, including major events (i.e. Prairieland Park for The Ex, car shows –

see Appendix X). A mobile unit was chosen rather than a stationary building due to the social

media integration in creating so much more than just another “ice cream truck.” Travel will be

partially determined based on Facebook / Twitter messages. Other factors influence location

choices are as follows:

1. Easy accessibility to pedestrian / car traffic

2. Visibility and neatness of the site

3. Unique shopping district

4. Synergy based on other food stores in the area

2.2 Floor Plan

The floor plan of the Gelato Mobile trucks is designed to allow for adequate storage for gelato,

cones, cups, spoons, napkins, a cash till, and a revolving passenger seat for the employees to

use during non-peak times for administration tasks. The floor plan is also designed to allow staff

to quickly access the product and to easily move around to quickly serve customers. The layout

can be seen below.

7


The serving window will be located on one side of the unit to allow for good traffic flow,

efficient customer transactions, and for quick customer service for newly arriving customers.

On average, the unit will have three days’ worth of inventory stock piled in the freezers located

in the unit.

2.3 Average Business Cycles

2.3.1 Average Day

A typical day for Gelato Mobile would start before opening the service counter as per the pre-

decided schedule/location for the unit. Every night before closing, staff will go through the pre-

opening check list and get the unit ready for opening next day. This list may include interior

signage, cleaning, and checking inventory. Once the counter is open for sales, staff will simply

take the orders from customers and delight them with delicious gelato, friendly service and

satisfaction for finding the Gelato Mobile. It is anticipated that noon to early evening will be the

busiest time, especially on the weekends, while before noon and late in the evening will be

slower. During less busy times, one staff (the high school student) will be required to restock

8


supplies and maintain a clean sales environment in and around the bus. At the end of each

business day, this employee will be expected to clean the shop including sweeping the floor and

wiping the counters for any spills, etc. The Manager (Co-op student) will be responsible for

performing the daily cash outs and making any bank deposits as necessary. In addition s/he will

also be responsible for basic bookkeeping and marketing.

2.3.2 Average Week

Every third day, the manager will assess the week’s sales and inventory levels and submit an

order to the Jerry’s (the supplier) to restock inventory. Inventory will be restocked in the

morning by driving to Jerry’s. A weekly special will be determined during the week to be

announced for the following week. The Manager will also do payroll twice a month.

2.3.3 Average Month

The operations will be very similar on daily, weekly, and monthly basis for many aspects.

However, at some point the Manager will need to generate and analyze monthly financial and

sales statement, and submit reports to the owners. This analysis will be used to assess the

business and adjust the marketing focus and supplies as required. In addition the manager will

also be doing monthly environmental analysis to find out trends in the gelato and ice cream

industry in Saskatoon.

2.3.4 Average Year

The Manager will need to produce season-end financial statements, for review by the Owners.

A complete analysis of Gelato Mobile will be carried out by the Owners to look into marketing,

sales, HR issues, and any issues that may arise. The environmental analysis will be compared

9


with previous years of operation. This analysis should indicate if any change in the business and

marketing strategy is required.

2.4 Supply Analysis

All supplies (gelato, spoons, napkins, cups, cones) will be directly procured from a reliable and

quality manufacturer/distributor (Jerry’s) to reduce costs. Gelato is purchased from Jerry’s Food

Emporium in Saskatoon at a wholesale price of $88 per 11.4 L pail. The mobile unit will be

obtained from a rental company in Regina. Appendix A contains the supplier letters of

agreements, with conditions and details of the agreements, for the ice cream truck rental, the

gelato, cones, cups and spoons.

2.5 Capital & Net Working Capital Budget

The capital budget for Gelato Mobile is nil, since no capital expenditures are incurred. The total

net working capital required for this business is approximately $6000 ($2000 from each of the 3

owners). The majority of this net working capital will be used for inventory and salary expenses

in the first few months. Account Receivables is nil as all sales will be on cash/debit basis.

Accounts Payable is based on purchasing of the sales goods from suppliers, also on a cash basis.

2.6 Operating Expense

Gelato Mobile will be open 5 days a week (Wednesday-Sunday), June through August,

weekends in May and September, and Victoria Day (May) and Labour Day (September). Hours

may be adjusted during special events throughout the season. The anticipated operating costs

for the first year of operation are listed below.

Fixed Overhead Costs

Truck Rental $3,250

Insurance $1,000

Business License $100

10


Business Incorporation Fee $265

Telephone/Internet $450

Total Fixed Overhead $5,065

Total Overhead $9,826

2.7 Cost of Goods

The cost of goods for the gelato includes the price of gelato, and cones or spoons and cups, and

napkins.

Item Unit Cost Units Purchased Total Cost

Ice-cream $88 202 $17,724

Cups $0.25 8,864 $2,216

Cones $0.20 8,860 $1,772

Spoons $0.05 17,724 $886

Napkins $0.15 17,724 $2,659

Total $25,257

3.0 Human Resource Plan

3.1 Job Descriptions

3.1.1 Owners

Stephanie Hughes, Stephen Leask, and Arvind Kumar will be the owners and General Managers

of Gelato Mobile Inc. Each will have 33.3% of stake in the company and thus also will share the

responsibilities at same level. Their duties would include the following:

- Oversee coordination of the scheduling of employees;

11


- Fill in if any employee quits or get sick;

- Weekly meetings with staff to review business and peripheral issues;

- Work with staff in any procurement or other problems;

- Cash outs and deposits as needed, book-keeping and payroll duties when Supervisor is

on leave.

3.1.2 Operational Staff

Gelato Mobile will need to employ 2 full time employees. One direct-sales staff will be a co-op

student from the University of Saskatchewan and the other will be a high school student;

individuals that may have some or little experience in selling ice-creams, and are daily engaged

in social media. Great customer service and delivery on Twitter / Facebook contest and location

promises will be key to satisfying customers. The Operational Staff will report directly to the

Owners. Their duties will include the following:

Co-op Student (Supervisor)

- Order inventory every third day (or as needed) to maintain proper inventory levels;

- Bookkeeping and payroll duties;

- Direct sales to customers;

- Cash outs and deposits as needed;

- Answer any general questions that may arise from the customer;

- Restocking of inventory

High School Student (Assistant)

- Direct sales to customers;

- Answer any general questions that may arise from the customer;

- Restocking of inventory

- Daily cleaning

- Anything else that the Supervisor asks him/her to do, including assessment of social

media traffic reports

12


Both the Supervisor and Assistant will require a class 5 license to operate the mobile unit. 14 As an

incentive for the operational staff, they and their immediate family will be allowed to purchase gelato

for personal consumption at cost plus 10%.

3.2 Scheduling

To maintain a high level of customer service to their customers, Gelato Mobile will have two

employees at the peak hours of operations. This will allow for better customer service as well

as allow for staff to take breaks. The two hourly employees will each work 40 hours per week

and they will close up the shop and park the truck at Jerry’s every night. Employees will be paid

through their lunch breaks, because they might have to respond to customer needs and not be

able to take their full breaks.

3.3 Labour Costs Breakdown

The 5 year projection for labour costs is shown below. The figures are based on the two direct-

sales staff working 40 hours per week each.

2009 2010 2011 2012 2013

Total Labour Wages

Wage $ 12.50 $ 12.81 $ 13.13 $ 13.46 $ 13.80

Hours per worker 640 640 800 800 825

Total wages (Wage x Hrs x Staff) $16,000 $16,400 $21,013 $21,538 $22,766

Total Direct Labour $16,000 $16,400 $21,013 $21,538 $22,766

Benefits for Labour

Employment Insurance $493 $505 $647 $663 $701

Canada Pension Plan $752 $771 $988 $1012 $1070

Holiday Pay $928 $951 $1,219 $1,249 $1,320

Workers Compensation $480 $492 $630 $646 $683

Total Benefits for Wage-Earning Employees $2,653 $2,719 $3,484 $3,571 $3,775

Total Direct Labour + Benefits 18,653 19,119 24,496 25,109 26,541

14 As stipulated by SGI, www.sgi.ca

http://www.sgi.ca/

13


Owners Compensation

As indicated in the Income Statement, owners will be compensated with any profits that occur from

normal business operations. Startup capital of $6,000 will be left in the business at all times. Profits will

be split evenly between the three owners.

3.4 Training Programs

Minor training will be needed for Gelato Mobile, regarding scoop size, how to maintain the cold

plates and drive the truck. By hiring a co-op student, Gelato Mobile will benefit from lower-cost

salary, yet gain a young business student who has gained Management knowledge, and who

regularly uses social media. Training may need to occur each year, depending on retention of

the high school and co-op students. However, despite the high turnover, one of Gelato Mobile’s

objectives is to provide an integrated business opportunity to students, which by nature

recognizes turnover is inevitable. As for the Owners, they all are MBA Candidates and have

diverse experience in business planning and operations. Resumes are available for the Owners

upon request.

4.0 Marketing

4.1 Marketing Introduction

4.1.1 Product

While Gelato Mobile will offer a range of mouth-watering gelato flavours, it will be truly

providing a healthier, delectable cool escape on a summer day, accessible throughout the city

of Saskatoon through social media engagement. A niche market will be served, as gelato

products are not available elsewhere in Saskatoon in a traditional mobile unit.

“Gelato is Italian style ice cream with twice the flavour, half the butterfat and less air than ice

cream. These flavours are rich and creamy and have a more indulgent flavour profile.”15

15 http://www.jerrys.ca/artisanicecreams/icecreams.shtml

http://www.jerrys.ca/artisanicecreams/icecreams.shtml

14


16

Partnering with the fun treat alternative will be the social media driving form behind Gelato

Mobile: creating a daily engagement with customers through use of social media marketing. As

described in the Industry section, social media has become main stream amongst people and is

being adopted more each day by firms to conduct business and reach target markets, making

the consumer process customizable and fun.

4.1.2 Pricing

Few places currently sell gelato, other than Jerry’s Emporium, and Gelato Mobile is the first to

offer gelato on wheels through social media engagement. Gelato Mobile will use a competitive

pricing strategy, to compete with other regular ice cream trucks and stores. Average sale of a

gelato serving will be $3.75 – a good deal when considering the higher quality of the product

versus regular ice cream. Competitive pricing will also tie in with the social media aspect; Gelato

Mobile will not want a higher price to deter people’s interest in becoming Facebook Fans or

Twitter Followers of the product.

4.1.3 Promotion

Gelato Mobile’s promotion strategy aligns with its business strategy: social media marketing,

using primarily Facebook and Twitter. As outlines in Appendix B, Facebook will be used to

create a Page, generating Gelato Mobile “Fans”, allowing Fans to write on the “Wall” and

communicate with each other, promoting events, polling Fans as to what location the unit will

be at or what flavours are favoured, and overall exploiting Facebook’s users’ own social

networks to virally expand Gelato Mobile awareness. Twitter will be used to instantly send

16 http://blogs.townonline.com/wellesley/wp-content/uploads/2009/01/gelato4.jpg

http://blogs.townonline.com/wellesley/wp-content/uploads/2009/01/gelato4.jpg

15


“Tweets” to “Followers”, and allow Followers to send messages back to Gelato Mobile. Updates

from both promotional tools will instantly sent to Fans and Followers, some who will also

immediately receive these updates on their mobile phones (should they have their social media

accounts set up to redirect to mobile phones).

The Facebook page and Twitter account will go live by April 20, to build awareness prior to day

one of operations. Traditional advertising will be only the free Star Phoenix “New Business

Feature”, following the trend that “63 percent of global Chief Marketing Officers expect to

increase interactive/online marketing spend while 65 percent expect to decrease traditional

advertising.”17

Gelato Mobile’s Customer Value Proposition:

Engaging Saskatoon’s Online-Savvy Residents and Their Tastebuds

4.1.4 Place

Mobile by name, mobile by nature: Gelato Mobile will serve the Saskatoon public, moving

about high traffic areas, such as downtown, riverside parks (including River Landing), shopping

centres and near major events, such as car shows at Prairieland Park, Pet Day in the Park and

Fringe Festival on Broadway.

More importantly is the social media channel to reach the target market, using channels such as

Facebook and Twitter, since “[c]onsumers are accelerating their adoption of digital content

services such as Twitter, YouTube, and Facebook with varying levels of engagement. Between

2007 and 2008, the adoption of social networking tools soared to 60 percent from 33 percent;

online/portable music services more than doubled to 46 percent from 22 percent; mobile

internet data plans nearly tripled to 41 percent from 15 percent; and access to mobile music

and video quadrupled to 35 percent from seven percent.”18

17 http://tinyurl.com/cuooxc 18 Ibid

http://tinyurl.com/cuooxc

16


4.1.5 Segmentation, Targeting, and Positioning

Segmentation of the market is vital to determine which Saskatoon residents actively engage in

social media and would like to try / re-try the delectable treat gelato. Segmentation by age

(those who can drive to the mobile unit’s location), and by current engagement with Facebook

and Twitter is key for this market. Other segmentation could include tourists, vehicular and foot

traffic, and people attending large Saskatoon events (where Gelato Mobile will park).

The target market will be Saskatoon and area residents who currently engage in social media

and not only like ice cream, but would enjoy a healthier alternative. Since Gelato Mobile is not

just another ice cream truck, the social media engagement is key. Therefore, it is truly those

currently engaged in social media, between the ages of 16-50 in Saskatoon, who will be

primarily targeted. Ages were chosen to incorporate the youngest drivers (as Gelato Mobile will

be “tracked down” some days) and baby boomers who would probably be on Facebook and

have cell phones. As shown below, there are 101,620 people who fall into this target market in

Saskatoon who currently are on Facebook – a user number that is almost 50% of Saskatoon’s

population.

17


Gelato Mobile’s Positioning Statement:

Providing a unique product combined with convenience and innovative delivery

of the product through active customer online engagement.

4.2 Market Analysis

The market for Gelato Mobile can be estimated using a few sources, and although this venture

offers a unique product through unique channels, competition does exist in the form of other

mobile food units (ice-cream, hotdogs) and fixed food services (Dairy Queen, other restaurants,

as mentioned in Appendix C).

Based on Facebook users who fall into the target market (101,620), if 4% (4064

customers) were engaged through social media enough to consume Gelato Mobile just

18


once, and 40% of them (1625 customers) were retained for a second visit, Gelato

Mobile would receive 5689 customers.

Twitter user numbers in Saskatoon is not available. However, conservatively assuming

5% of Facebook target market users also use Twitter, and 8% of them were engaged

through social media enough to consume Gelato Mobile just once, 406 customers would

be obtained. With 40% retention for a second visit, this number increases to 569.

These numbers do not include children under 16, people above 50, or those non-social

media user who may accompany the social media target consumer. These

“accompaniers” would increase projected number of customers.

Foot and vehicle traffic: assuming 5% of the Saskatoon population (209,40019) would be

aware of Gelato Mobile through word of mouth and seeing the unit, and 1% of the 5%,

104 customers could be obtained.

These numbers also do not include the number of tourists who visit Saskatoon each

summer, both from surrounding areas in Saskatchewan and those from out-of-province,

who may come across Gelato Mobile in one of its high-traffic areas.

Based on the market analysis above, and on the viral nature of its social marketing channels,

Gelato Mobile is estimated to have on average 20 individual customers per hour, with a total

16,880 customers, as show in the Financial Section below.

4.4 Marketing Strategy

Gelato Mobile’s marketing strategy is social media marketing: utilizing two-way social media

channels to create community and awareness of; drive traffic to; and engage customers in the

total, fun purchasing process of gelato. This fun process engagement will be through letting

customers choose locations, flavours of the week, and track down Gelato Mobile to receive free

product. The channel of distribution is social media, such as Facebook and Twitter, which is

intricately part of the business strategy: “[s]ites will adopt Facebook Connect for two reasons:

First, their users are already actively using it. And second, because it’s not just a registration

system, it’s a marketing channel.”20

19 http://www.city.saskatoon.sk.ca/org/quick_facts/index.asp 20 cnet News Article: (Facebook Connect officially open): http://news.cnet.com/facebook-connect-officiallyopen/

http://news.cnet.com/facebook-connect-officiallyopen/

http://www.city.saskatoon.sk.ca/org/quick_facts/index.asp

19


Other channels include foot/vehicular traffic unaware of the social media communications, who

may come across Gelato Mobile and want a delectable, cool treat on a summer day.

However, it is the two-way communication using social media channels, through social media

marketing, that is key to this business. Not only will Gelato Mobile communicate to potential

customers, it will be creating a community centered on Gelato Mobile. This community will be

fostered by customer engagement by allowing people to communicate with Gelato Mobile

through Facebook and Twitter, by voting to choose the unit’s location, and by overall creating a

fun purchasing process. In fact, 40% percent of Canadian interviews use social media “to communicate with organizations”21 and “in the current stormy economy, as companies look

for new ways to market their products and engage their customers, chief executive officers

are finally looking more and more at how social networking tools can extend their brands,

create corporate cultures based on listening and learning [. . .] .”22

Due to the ever changing online environment, Gelato Mobile will need to closely monitor

competitors’ movements and emerging trends that could affect its position.

4.5 Selling and Advertising

The advertising objective will be to create high awareness, or “word of mouse”, through social

media marketing, to generate traffic to ultimately purchase gelato and be actively engaged in

the Gelato Mobile community. As discussed below, the advertising mix has been determined to

optimize social media channels and minimize advertising costs.

The advertising mix includes:

21 http://www.upi.com/Top_News/2009/04/06/So-called-social-media-soaring-in-Canada/UPI-84441239050428/ 22 Forbes.com Article: (Yes, CEO’s should Facebook and Twitter): http://tinyurl.com/cb2swt

http://tinyurl.com/cb2swt

http://www.upi.com/Top_News/2009/04/06/So-called-social-media-soaring-in-Canada/UPI-84441239050428/

20


Facebook – Facebook’s number of users has grown exponentially in the past few years (77% of

Canadians interviewed use Facebook23) and continues to be one of the most popular social

media spaces. As shown above, there are currently 101,620 Facebook users who fall into Gelato

Mobile’s target market. A Facebook page will be created and published by April 20, promoting

Gelato Mobile, gathering fans listing events (i.e. Grand Opening) and informing fans of current

promotions – all of which is instantly sent to its fan base, either online or redirected to fans’

mobile phones. As well, once a week, Gelato Mobile will set up a poll through Facebook, asking

its fans where it should park for the day. The highest chosen answer (i.e. Centre Mall) is where

Gelato Mobile will park for that day. Facebook expenses will be $500 for the season.

Twitter – Twitter is relatively newer than Facebook, and immediately ‘Tweets” a specific

message to all your “Followers” about what you are currently doing. The following shows the

age of visitors to Twitter24 (US stats) indicating a favourable alignment to Gelato Mobile’s target

market.

Gelato Mobile will use Twitter to inform its Followers of location movement, of “2 Hour Price

Promos”, and to immediately drive traffic (i.e. sample Tweet Gelato Mobile is at The Centre

Mall – first 2 people to find us and say “Gelato” get a free scoop!”). These “Tweets” are

immediately sent to Twitter Followers’ accounts, and cell phones connected to the Twitter

account. This means these mobile phone users will immediately receive the messages,

wherever they are.

23 Ibid24 http://weblogs.hitwise.com/heather-dougherty/2009/01/twitter_catches_up_to_digg.html

http://weblogs.hitwise.com/heather-dougherty/2009/01/twitter_catches_up_to_digg.html

21


Newspaper Ad – The Star Phoenix will provide a “New Saskatoon Business” article, featuring

Gelato Mobile, to be published in May 2009, at no cost. This will be the only newspaper

advertising Gelato Mobile will do.

Website – A website in the first 5 years may not be necessary, since Gelato Mobile will be

creating awareness through social media, which is much more engaging and involves two-way

communication. Should Gelato Mobile grow to an unforeseen size, a website could be

developed in future years.

Signage – As outlined in the mobile unit supplier unit, Mr Cool will include customized signage

for the truck. This will include the logo, Jerry’s name (as per Jerry’s supplier letter of

agreement), as well as “Find us on Facebook” and “Be a Twitter Follower”.

For selling, co-op and high school students will be selected based on personality, experience

and expertise with social media outlets. Staff will be encourage to interact with customers,

asking them how they found out about Gelato Mobile, providing small samples to taste, and

encouraging them to become Gelato Mobile Facebook Fans and Twitter Followers to be

constantly updated about the location and current promotions Gelato Mobile offers.

5.0 Financial PlanBased on the data presented in Appendix E, it appears that Gelato Mobile will make a profit in

2009 of about $7,100. The assumptions that contributed to this figure are listed in Appendix F.

Conservative estimates were used in almost every situation. After analyzing the variables for

revenues and expenses, it would appear that the most crucial variable is in fact sales. As noted

in Table 5.1 and 5.2, under the worst case scenario, if sales drop 25%, the NPV changes

substantially by $ 66,501, and becomes negative. Alternatively, under the best case scenario, if

sales were 25% higher than planned, the NPV changes to $91,668.

Table 5.1 Base case / Worst case / Best case Scenario variables

Variable Base Case Worst Case Best Case

22


Sales (Year 1) 63,300 47,475 79,125Margin 60% 47% 68%

Table 5.2 Base case / Worst case / Best case Scenario results

Scenario NPV IRR Avg Annual Net Income

Base Case 30,612 N/A 8,813Worst Case -35,889 N/A -6,990Best Case 91,668 N/A 23,342

Table 5.3 Summary of Financial Data

Year 2009 2010 2011 2012 2013

Sales Revenue 63,300

68,127

71,371

74,615

77,859

Cost of Goods Sold 25,257

25,888

26,535

27,199

27,879

Gross Margin 38,043

42,239

44,835

47,416

49,980

Total Expenses 28,564

29,278

34,909

35,782

37,481

Net Income Before Taxes 9,480

12,961

9,926

11,634

12,500

Income Taxes 1,765

2,348

1,799

2,108

2,265

Net Income(Loss) 7,714

10,612

8,128

9,526

10,235

Net Present Value (NPV) 32,417 IRR N/A

The NPV calculated for the base case noted above in Table 5.3 is based on projected net income for 5

years, plus a multiple of 3 in the fifth year (2013).

To break even, Gelato Mobile will need $54,536 in revenue (to achieve $0 net income).

Worst BestChange in Sales -25% 25%Change in NPV $66,501.00 $61,056

23


Should projected revenues not be realized and Gelato Mobile cannot survive financially, the exit strategy

is to simply close up shop. Gelato Mobile would simply sell remaining gelato at a discounted price

and return the leased equipment. Worst case scenario, the Owners are out their initial

investment of $2000 each, yet can chalk this business venture up to a social experiment in

Saskatoon.

6.0 ConclusionAs noted earlier, strategic use of social media marketing, careful cost control, and a fantastic

product should enable Gelato Mobile to be a successful small business opportunity. The

marketing and promotion methods presented are new and innovative, and should successfully

engage Saskatoon residents in the purchasing process.

Financially speaking, Gelato Mobile is projected to be profitable, and could consider

incorporating for tax and liability considerations. As with many businesses, the critical variable

for Gelato Mobile is sales. As noted in the sensitivity analysis, a 25% swing in customers in the

wrong direction would ultimately cause the business to have negative net income. In a worst

case scenario, the high school student position can be eliminated, and an owner can step in if

necessary, as each of the owners have the flexibility to do this.

Overall, a new market can be created, providing value for the owners from this unique

combination of gelato and social media, fully engaging Saskatoon’s online-savvy residents and

their taste buds.


Appendix A: Supplier Letters of Agreement

Gelato Mobile

3152 Cairns Avenue

Saskatoon, SK S7L 4R5

April 1, 2009

Re: Gelato & Cone Supplier Letter of Agreement

To the Owners of Gelato Mobile:

This letter confirms the agreement between Jerry’s Artisan Ice Creams and Gelato Mobile. Jerry’s will

supply the following:

Gelato at a wholesale cost of $8825 per 11.4 L pail of gelato (apprx. 192 pails in total needed May-September)

Cones (regular and waffle) at a wholesale cost of $0.20 each (apprx. 10,640 cones in total needed May-September)

Cups at a wholesale cost of $0.25 each (apprx. 10,640 cups in total needed May-September) Spoons at a wholesale cost of $0.05 each (apprx. 10,640 spoons in total needed May-

September)

This agreement will be in effect from April 14, 2009 through October 14, 2013. Gelato Mobile will

receive the exclusive mobile distribution rights for Jerry’s gelato during this agreement. Gelato Mobile

will receive gelato supply of 12 different flavours and 528 each of cones, spoons and cups prior to May

1, 2009, with consistent weekly supply, or as based on demand, provided by Gelato Mobile

Management. Gelato Mobile will pick up supply from Jerry’s location and will pay for each supply by

cash or cheque. In exchange, Gelato Mobile will advertise that it sells ‘Jerry’s Gelato’ on its mobile unit

signage, on its Facebook page and any other promotion/social media outset. As well, Gelato Mobile will

not park and operate (sell its gelato products) within 1km of Jerry’s Emporium at 1115 Grosvenor

Avenue in Saskatoon. A contract will be drafted and signed prior to the start of this agreement.

Morgan Woodsen

Morgan Woodsen, Food Service Manager, Jerry’s Artisan

25 As per the April 4th, 2009 phone call

http://www.jerrys.ca/artisanicecreams/index.shtml

Gelato Mobile

3152 Cairns Avenue

Saskatoon, SK S7L 4R5

April 1, 2009

Re: Ice Cream Truck Rental

To the Management of Gelato Mobile:

This letter confirms the agreement between Mr. Cool Ice Cream Truck Rental and Gelato Mobile. This

agreement will be in effect from April 14, 2009 through October 14, 2013. Gelato Mobile will rent a 1990

GMC Ice Cream Truck (VIN# KZS1468JHW98) from Mr Cool for $650 per month, payable with 5 post-

dated cheques, for the months of May through September. The Ice Cream Truck comes totally outfitted

with the following:

Cold plates for 12 x 11.4L pails of ice cream/gelatoo These cold plates do not require power throughout the day. Just plug the truck in at

night and the plates will remain a consistent, cool temperature for 24 hours. 2 front row seats for driver and passenger (passenger seat revolves to face back of truck) GPS System (Tom Tom system, with subscription covered by Mr Cool) Storage, cash till, debit machine All other regular ice cream truck features (to be further described in the contract) Back up battery for lighting at night Customized signage for one season

In exchange, Gelato Mobile will advertise the truck as a Mr Cool Ice Cream Truck on the back of the

truck. For a fee of $500, Mr Cool will create and place Gelato Mobile signage to the vehicle (Gelato

Mobile to forward creative). Gelato Mobile is responsible for insurance and registration of the vehicle

from May 1 through September 30 each year. Mr Cool will deliver the vehicle to Saskatoon prior to May

1 and pick the vehicle up in Saskatoon after September 30. A contract will be drafted and signed prior to

the start of this agreement.

Andrew Corrigan

Andrew Corrigan, CEO, Mr Cool Ice Cream Truck Rentals, 814 Albert Street N, Regina, SK S4V 0G7


Appendix B: Facebook and Twitter Screen Shots

Below are screen shots of Facebook and Twitter social media channels, showcasing the

following examples of how Gelato Mobile will be promoted:

Event notification which shows up on a Friend’s profile under Highlights, along with

Friends who are attending this event. Clicking on this link redirects someone to the

Event Page, which provides more information and the option to attend.

Facebook Event Page providing more information, along with everyone who’s attending,

and option to attend, which builds community amongst these Facebook Fans /

Attendees

Actual Facebook Page, promoting Gelato Mobile, what it’s about, who’s a Fan, the

option to become a Fan, again building community and a social group centered around

Gelato Mobile. This page would also provide daily updates (top of page) about where

Gelato Mobile will be that day, or special offers, along with photos of Gelato Mobile and

comments by Gelato Mobile fans: creating a social community where two way

communication and engagement occurs between Gelato Mobile and its Facebook Fans.

Twitter Page, showing the current “Tweet” (Free gelato for first 2 people who find the

Gelato Mobile), the number of followers Gelato Mobile has (number of people who will

instantly receive Gelato Mobile’s “Tweets” about location, promotion, events, etc), and

the number of people Gelato Mobile is following: creating an online social community

where two way communication and engagement occurs between Gelato Mobile and its

Twitter followers.

NAME: GELATO MOBILELOCATION: WHEREVER YOU WANT US TO BE, SASKATOON!

MessageNudge


GELATO MOBILE WILL BE AT THE CENTRE MALL TODAY! FIRST 2

PEEPS TO FIND US AND SAY “GELATO” GET A FREE SCOOP!


Appendix C: Competitive Industry Analysis

Gilato Ice-Cream Shops near Saskatoon, SK, Canada

Ice-Cream Shops Gilato AvailabilityJerry's Food Emporium Yes

Co-op Market Place at Attridge Yes

Dad’s Nutritional Centre (Organic Gelato) Yes

Noodle King & Ice Cream Queen Yes

Mister Tasty Dairy Mobile No

Sweet Memories Ice Cream Parlor No

Dairy Queen No

Laura’s Ice Cream No

McDonald No

Western Development Museum No

Lynn’s Icedreams No

Broadway Ice Cream Works No

Tastebuds No

Sweet Revenge No

Harlan Fairbanks No

Bus Stop Refershments No

George Wakefield Foods Inc No

Harden & Huyse Chocolates Ice Cream & Coffee No

Parlour Treats No

Homestead Ice Cream & Cappuccino No

Harden & Huyse Chocolates Ice Cream & Coffee No

The list above represents known gelato retailers in Saskatoon. Continuous analysis would have to be pursued as other competitors could enter the market place at any time.


Appendix D: Saskatoon Events CalendarListed below are events that are scheduled for Saskatoon between May 2009 and September

2009. The events with a red star behind them denote a major event. While it may not be

possible, or realistic, for Gelato Mobile to be at all of these events, this list is meant to show just

how many events actually take place in Saskatoon over the months that Gelato Mobile will be

in operation.

Order of the Eastern Star Annual Meeting

April 30 - May 2, 2009

Man Show

Apr 30, May 1, May 2, 2009

Western Canada Cosmopolitan Federation Convention

May 1-3, 2009

Hub City Conformation and Obedience Club and Show

May 1 - 3, 2009

Comedian Lewis Black

May 1, 2009

Saskatoon Log & Cottage Show

May 1, May 2, May 3, 2009

Saluki Club of Canada Western Regional Specialty

May 2, 2009

Gala Fundraiser for the Sasaktoon Cancer Centre

May 2, 2009

Creedance Clearwater Revisited

May 2, 2009


Celtic Thunder

May 3, 2009

Street Legal Opener - Saskatchewan International Raceway

May 3, 2009

DOROTHY THE DINOSAUR

May 4, 2009

Michael Kaeshammer

May 4, 2009

Montgomery Gentry in Concert

May 7, 2009

Bad Jazz

May 8-10, 2009

Street Legal Racing - Saskatchewan International Raceway

May 8, 2009

Alice in Wonderland - Off Broadway Children's Lunchtime Theatre

May 9-June 13, 2009

Saskatoon Symphony Masters Series 7

May 9, 2009

Volunteer Race - Saskatchewan International Raceway

May 9, 2009

Shane Yellowbird in Concert

May 9, 2009

Emerson Drive in Concert

May 19, 2009

Billy Graham

May 9, 2009

Video Games LIVE!

May 10, 2009

Season Opener/Mother's Day - Auto Clearing


Motor Speedway

May 10, 2009

Keeping Up With the Keepers - SOLD OUT

May 10, 2009

Leadership Conference 2009

May 12 & 13, 2009

Bad Jazz

May 14-17, 2009

Matt Andersen

May 14, 2009

Round 2 Racing - Auto Clearing Motor Speedway

May 15, 2009

Association for International Agricultural & Extension Education

May 15 - 20, 2009

National Canadian Chinese Language Education Conference

May 15 - 17, 2009

Olympian Sports City of Bridges AAA Hockey Tournament

May 15-18, 2009

BILL GAITHER and the HOMECOMING FRIENDS

May 16, 2009

Bikes on Broadway

May 16-18, 2009

Changing Landscapes CCA/SSCA 2009

May 19 - 22, 2009

5th Annual Metis Cultural Celebration

May 20-21, 2009

The Annual Canadian Association for Parish Nursing Ministry (C.A.P.N.M.) Conference

May 21 - 24, 2009

Thoroughbred Racing

May 22-23, 2009


May 22, 2009

Bulls and Bikes

May 22-23, 2009

"The Littlest Showboat in North America"

May 22, 2009

Saskatoon Symphony Masters Series 8

May 23, 2009

Siemans Western Elite 125 - Auto Clearing Motor Speedway

May 23, 2009

Test and Tune - Saskatchewan International Raceway

May 23, 2009

George Fox Dinner Show

May 23, 2009

Saskatchewan Marathon

May 24, 2009

Season Opener Race 1 - Saskatchewan International Raceway

May 24, 2009

Rob Lutes

May 25, 2009

Quilts Saskatchewan

May 27-30, 2009

Thoroughbred Racing

May 29-30, 2009


May 29, 2009


The Mudd Brothers

May 29, 2009

WOOD'09

May 30-Jun7, 2009

Mac's ARCA West Late Model Challenge 150 - Auto Clearing Motor Speedway

May 30, 2009

Doors Open Saskatoon

May 31, 2009

Saskatchewan Children's Festival

Jun 2-6, 2009

John Fogerty in Concert

Jun 2, 2009

Canadian Open Bowling Championships

June 3-6, 2009

CMT On Tour Featuring Jason Blaine, The Higgins & Tara Oram

Jun 3, 2009

Soup du jour

Jun 5-Jul 25, 2009

Theology of the Body

Jun 5-7, 2009

Thoroughbred Racing

Jun 5-6, 2009

Street Car Test Drive - Auto Clearing Motor Speedway

Jun 5, 2009

Broadway Art Encounter

Jun 5-6, 2009

An Evening with Mpho Tutu

Jun 5, 2009


Jun 5, 2009

Knights of Columbus 8th Annual Show and Shine

Jun 6, 2009

Martensville A & W 100 and Super Trucks 100 - Auto Clearing Motor Speedway

Jun 6, 2009

Canadian Multidisciplinary Road Safety Conference

June 7-10, 2009

La Boh � me

Jun 10-20, 2009

Silence

Jun 11-14, 2009

50th International Square and Round Dance & Clogging Convention

June 11 - 13, 2009

Thoroughbred Racing

Jun 12-13, 2009

Legends Cars of Alberta Test Drive - Auto Clearing Motor Speedway

Jun 12, 2009


Jun 12, 2009

Waterfront Craft Art Festival

Jun 13, 2009

Legends Cars of Alberta - Mac's Froster 50 - Auto Clearing Motor Speedway

Jun 13, 2009

Test and Tune/Big Bucks Jackpot 1 - Saskatchewan International Raceway

Jun 13. 2009

University of Saskatchewan Amati Quartet - � A Summer � s Evening in Vienna �


Jun 14, 2009

Points Race 2 - Saskatchewan International Raceway

Jun 14, 2009

The Great Plains Comedy Festival

Jun 15-21, 2009

LAUGHTER & REFLECTION WITH CAROL BURNETT

Jun 16, 2009

Charley Pride

Jun 17, 2009

Silence

Jun 18-21, 2009

Thoroughbred Racing

Jun 19-20, 2009


Jun 19, 2009


Jun 19, 2009


Jun 20, 2009

Motorcycle Ride for Dad

Jun 20, 2009

Aboriginal Day Celebrations

Jun 21-22, 2009

Keeping Up With the Keepers

Jun 21, 2009

Imagination Station: The Prequel - Off Broadway Children's Lunchtime Theatre

Jun 25-Jul 24, 2009

SaskTel Saskatchewan Jazz Festival

Jun 26-Jul 5, 2009

Thoroughbred Racing

Jun 26-27, 2009


Jun 26, 2009

Kinsmen Day at the Zoo

Jun 26, 2009

The Ricasso Duo

Jun 26, 2009

Fiddler on the Roof

Jun 27 - Jul 5, 2009

Jet Feature Race 3 - Saskatchewan International Raceway

Jun 27, 2009

Shakespeare on the Saskatchewan Festival

Jul 1-Aug 16, 2009

Optimist Canada Day Celebrations

Jul 1, 2009

Master Bowlers Association of Canada Championships

July 1-4, 2009

Canada Day

Jul 1, 2009

Xavier Rudd in Concert

Jul 2, 2009

Prairieland Junior Ag Showcase

July 3-6, 2009

Thoroughbred Racing

Jul 3-4, 2009


Jul 3, 2009


On s’regaroche à Batoche ~ Fransaskois Festival

Jul 3-6, 2009

Super Trucks Racing Series 100 - Auto Clearing Motor Speedway

Jul 4, 2009

StarPhoenix Family Day at the Zoo

Jul 5, 2009

Siege of Battleford

Jul 6, 2009

Canadian Tour - Saskatchewan Open

Jul 6-12, 2009

Experience Downtown Sidewalk Sale

Jul 9-11, 2009

Thoroughbred Racing

Jul 10-11, 2009


Jul 10, 2009


Jul 10, 2009


Jul 10, 2009

Pion-Era 2009

Jul 11-12, 2009


Jul 11, 2009

Pets In The Park

Jul 12, 2009

Victorian Tea and Fashion Show

Jul 12, 2009


Jul 12, 2009

Fort Battleford Ghost Walk

Jul 13, 2009

Chicken Farmers of Canada Summer Meeting

July 13-16, 2009

A Taste of Saskatchewan presented by Conexus Credit Union

Jul 14-19, 2009

2009 ISF XII World Men's Softball Championships

Jul 17 - 26, 2009

Ness Creek Music Festival

Jul 16-19, 2009

Thoroughbred Racing

Jul 17-18, 2009

Super Trucks Racing Series 100 - Auto Clearing Motor Speedway

Jul 18, 2009

Parks Day

Jul 18, 2009

Siege of Battleford

Jul 20, 2009

Peters & Pilon Celebrity Golf Tournament in support of Kidsport

Jul 23-24, 2009

Mass at Historic Church

Jul 23, 2009

Rotary Club of Saskatoon Nutana Dragon Boat Festival

Jul 24-25, 2009



Jul 24, 2009


Jul 24, 2009

Back to Batoche Days

Jul 24-26, 2009


Jul 25 ,2009

Community Appreciation Day

Jul 25, 2009

Victorian Tea and Fashion Show

Jul 26, 2009


Jul 26, 2009

NASCAR Canadian Tire Series

Jul 29, 2009

Saskatoon Fringe Theatre Festival

Jul 30-Aug 8, 2009

Thoroughbred Racing

Jul 31-Aug 1, 2009


Jul 31, 2009


Jul 31, 2009

Family Fun Fest

Aug 1-2, 2009

Saskatoon Exhibition

Aug 4-9, 2009

John Arcand Fiddle Fest

Aug 6-9, 2009

Legends Cars of Alberta Test Drive - Auto Clearing Motor Speedway

Aug 7, 2009


Aug 7, 2009

Legends Cars of Alberta - Auto Clearing Motor Speedway

Aug 8, 2009

Test and Tune/Fastest Street Car Challenge - Saskatchewan International Raceway

Aug 8, 2009


Aug 9, 2009

Siege of Battleford

Aug 10, 2009

Folkfest 2009

Aug 13-15, 2009

Thoroughbred Racing

Aug 14-15, 2009


Aug 14, 2009


Aug 14, 2009

Cameco Canada Remembers International Airshow

Aug 15-16, 2009

Siege of Battleford

Aug 15, 2009


Aug 15, 2009

Canadian Medical Assocation


Aug 16 - 19, 2009

Rock 102 Cruise Weekend

Aug 21-23, 2009

Thoroughbred Racing

Aug 21-22, 2009


Aug 21, 2009


Aug 21, 2009

Ukraine Day in the Park

Aug 22, 2009

Alcohol Feature Race 9 - Saskatchewan International Raceway

Aug 22, 2009

Fort Battleford Ghost Walk

Aug 24, 2009

Thoroughbred Racing

Aug 28-29, 2009


Aug 28, 2009


Aug 29, 2009

Saskatoon Fireworks Festival

Sep 4-5, 2009

Thoroughbred Racing

Sep 4-5, 2009

Super Trucks 100 and Pro Trucks Points Final - Auto Clearing Motor Speedway

Sep 5, 2009


Sep 11, 2009

Broadway Street Fair

Sep 12, 2009

Mac's ARCA West Late Model Challenge 150 - Auto Clearing Motor Speedway

Sep 12, 2009

New York Islanders Training Camp

Sep 12-20, 2009

Test and Tune/Big Bucks Jackpot 2 - Saskatchewan International Raceway

Sep 12, 2009

Season FInal Race 10 - Saskatchewan International Raceway

Sep 13, 2009

Keeping Up With the Keepers

Sep 13, 2009

New York Islanders Alumni Celebrity Golf Tournament

Sep 18, 2009

NHL New York Islanders vs Calgary Flames

Sep 19, 2009

Siemans Western Elite 125 and Points Final - Auto Clearing Motor Speedway

Sep 19, 2009

NHL New York Islanders vs Edmonton Oilers

Sep 20, 2009


Sep 20, 2009

Premier Festival

Sep 25-27, 2009

Annual Ultimate Enduro - Auto Clearing Motor Speedway

Sep 27, 2009



Sep 27, 2009

Saskatoon Tourism: (www.tourismsaskatoon.com/events.)

http://www.tourismsaskatoon.com/events


Appendix E: Yearly Financial Projections(Please refer to Excel files for all details relating to the financial projections)


Appendix F: AssumptionsDerivation of Sales

- The average selling price of a gelato product is $3.75- Sales target of 20 customers/hr on average- $75 Sales revenue/hr

Operating Hours for May = weekends only

Operating Hours for June/July/August = Wed-Sun;

Operating Hours for September = weekends only

Total Operating hours for 2009 = 844 Hours

Total estimated customers for 2009 = 844hrs x 20/hr = 16,880

Therefore, 844hrs x $75 = $63,300 Sales revenue for 2009

Derivation of Expenses

Truck

- Ice Cream Truck rental = $650/month x 5 months = $ 3,250- Truck Maintenance = $200/month x 5 months = $1,000- Power for cold plates = $50/month x 5 months = $250- Insurance on truck = $200/month x 5 months = $1,000- Business License = $100 for 5 months- Fuel costs = 33litres/day x 112 days of operations in 2009 x $.95cents/litre = $ 3,511

Derivation on Inventory Costs

Cups – $0.25 x 8,440 customers (50% of sales) = $2,110


Spoons – $0.05 x 16,880 customers = $844

Cones – $0.20 x 8,440 customers (50% of sales) = $1,688

Napkins – $0.15 x 16,880 customers = $2,532

Gelato – Jerry’s Wholesale price is $88 for 11.4L. Based on about ½ cup serving size, there should be

about 88 servings per 11.4 L container. .4L will be a buffer for waste and taste samples for prospective

customers. Therefore, the gelato costs should be about $16,880.

** In order to be conservative in the estimated Inventory costs noted above, all cost figures in the

attached financial statements have been increased by 5%**

Derivation of Marketing Expenses

Facebook: $500 for sidebar ads, based on a pay-per-click rate of $0.28, which will generate 1786 click

throughs to the Gelato Mobile Facebook Page. Facebook Page and Events are no cost.

Promotions: $300 (free gelato giveaways, discounts)

Scenario Analysis

Worst

- The average selling price of a gelato product is $3.75- Sales target of 15 customers/hr on average- $56.25 Sales revenue/hrTherefore, 844hrs x $56.25 = $47,475 Sales revenue for 2009

Best

- The average selling price of a gelato product is $3.75- Sales target of 25 customers/hr on average- $93.75 Sales revenue/hrTherefore, 844hrs x $93.75 = $79,125 Sales revenue for 2009


Appendix G: 2006 Industry Canada Small Business Profile for Mobile

Food Services in Saskatchewan26

Report Criteria: 2006 Canada All Businesses % of Total Revenue 722330 STATISTICS CANADA2006 SMALL BUSINESS PROFILES - Canada NAICS Number: 722330 - Mobile Food Services

Average of all Businesses WholeIndustry

(Reliability)

LowerHalf

(50%)

UpperHalf

(50%)

BottomQuartile(25%)

LowerMiddle(25%)

UpperMiddle(25%)

TopQuartile(25%)

Percent ofBusinessesReporting

Number of Businesses 1230

Revenue Range: Low Value ($ 000) 30 30 82 30 50 82 126 High Value ($ 000) 5000 82 5000 50 82 126 5000

(percent of total revenue) Total revenue 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Cost of sales (direct expenses) 49.8 41.3 52.0 40.1 42.1 46.4 53.8 92.1 Wages and benefits 2.9 1.8 3.2 1.0 2.3 2.0 3.6 11.8 Purchases, materials and

sub-contracts 46.9 39.2 48.9 38.5 39.7 44.6 50.3 90.9 Opening Inventory 2.8 1.4 3.2 1.8 1.2 1.3 3.8 39.2 Closing inventory 2.8 1.1 3.2 1.2 1.0 1.5 3.8 38.1Operating expenses (indirect expenses) 40.2 46.6 38.6 49.7 44.8 39.8 38.1 99.9 Labour and commissions 10.9 7.7 11.7 7.1 8.1 7.7 13.1 47.7 Amortization and depletion 3.5 5.1 3.0 5.3 5.0 4.0 2.7 74.6 Repairs and maintenance 2.3 2.8 2.1 3.3 2.5 2.0 2.2 66.7 Utilities and

telephone/telecommunication 3.0 3.6 2.8 3.9 3.5 3.3 2.7 83.5 Rent 3.4 4.0 3.3 4.4 3.7 3.2 3.3 45.1 Interest and bank charges 2.3 3.0 2.1 3.8 2.5 2.2 2.0 65.8 Professional and business

fees 1.3 1.2 1.3 1.3 1.1 1.4 1.3 77.9 Advertising and promotion 0.5 0.5 0.5 0.5 0.5 0.6 0.4 50.9 Delivery, shipping and

warehouse expenses 0.2 0.2 0.1 0.3 0.2 0.2 0.1 13.5 Insurance 1.3 1.7 1.2 1.9 1.5 1.5 1.1 71.6 Other expenses 11.7 16.9 10.3 17.9 16.3 13.8 9.1 98.8Total expenses 90.0 88.0 90.5 89.7 86.9 86.3 92.0 100.0Net profit/loss 10.0 12.0 9.5 10.3 13.1 13.7 8.0 100.0

FINANCIAL RATIOS Interest coverage ratio 5.4 5.0 5.5 3.7 6.2 7.1 4.9Gross margin (%) 50.2 58.7 48.0 59.9 57.9 53.6 46.2

26 http://www.ic.gc.ca/app/sbp/prfpls/prfl/rprtStp/sv.do;jsessionid=0000ZslYz__NEm3c5AHPr8C13rF:1247mpv0c

http://www.ic.gc.ca/app/sbp/prfpls/prfl/rprtStp/sv.do;jsessionid=0000ZslYz__NEm3c5AHPr8C13rF:1247mpv0c


PROFITABLE vs NON-PROFITABLE BUSINESSES (thousands of dollars)

Profitable Percent of businesses (%) 79.2 Total revenue 128.2 52.7 194.7 39.3 65.2 102.4 287.3 Total expenses 108.9 40.5 169.2 29.3 51.1 83.2 255.4 Net profit 19.2 12.1 25.5 9.9 14.2 19.2 31.9Non-Profitable Total revenue 120.7 51.4 234.2 40.1 65.1 99.7 366.6 Total expenses 133.2 61.9 249.8 51.0 75.1 113.6 384.0 Net loss -12.4 -10.5 -15.6 -10.9 -10.0 -13.9 -17.4

Introduction Painter/businessplans... · Web viewThe Facebook page and Twitter account will go live...

Documents

Transcript of Introduction Painter/businessplans... · Web viewThe Facebook page and Twitter account will go live...