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Sample food business plan

Business administration (bsa), lyceum of the philippines university.

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A SAMPLE BUSINESS PLAN FOR SMALL FOOD BUSINESSES Rodney B. Holcomb Associate Professor, Dept. of Agricultural Economics Browning Endowed Professor of Food Science, Food & Agricultural Products Center Philip Kenkel Professor, Dept. of Agricultural Economics Bill Fitzwater Endowed Chair for Cooperative Studies Linda Blan-Byford (Former) Business Planning and Marketing Associate Food & Agricultural Products Center Oklahoma State University January 2006

Why Develop a Business Plan? In the book The Entrepreneur’s Manual, Richard M. White, Jr. states that business plans are “road maps” for business creation: “You identify your origin, select a destination, and plot the shortest distance between the two points.” True, a business plan is essentially a blueprint for a business. However, it also serves many other purposes:  A business plan is a detailed blueprint for the activities needed to establish a business (i. the details of a product or service, the market for that product or service, and the management of the business providing that product or service).  A business plan is also the ‘yardstick’ by which a business owner measures success in meeting stated goals and objectives.  Also, a business plan is a tool for obtaining a loan from a lending agency, or for attracting venture capital. What Does a Business Plan Look Like? There is no standard format for a business plan, but there are many common components of a business plan:  Executive Summary (providing a general overview of the plan’s main points)  Table of Contents  (Brief) Background and History  Business Goals and Objectives  Description of Products/Services  Market Description/Assessment  Competition Assessment  Marketing Strategies  Manufacturing Plans  Pro Forma Financial Analysis  Contingency Plans Many business plans will also include appendixes with additional information related to the business, its operations, its owners/managers, marketing/promotional plans, etc. Of course, the best way to illustrate a business plan is to provide one. The following plan for a completely fictional business is used for a monthly entrepreneur workshop at Oklahoma State University’s Food & Agricultural Products Center, entitled “Food Business Basics: A Guide to Starting Your Own Food Business.” This mock business plan focuses on a whipped topping business, but the format is appropriate for any small food business.

• December 1,

Executive Summary

Marianne and keith bean have been involved with the food industry for several, years. they opened their first restaurant in antlers, oklahoma in 1981, and their second, in hugo in 1988. although praised for the quality of many of the items on their menu,, they have attained a special notoriety for their desserts. after years of requests for their, flavored whipped cream toppings, they have decided to pursue marketing these products, separately from the restaurants., marianne and keith bean have developed several recipes for flavored whipped, cream topping. they include chocolate, raspberry, cinnamon almond, and strawberry., these flavored dessert toppings have been used in the setting of their two restaurants over, the past 18 years, and have been produced in large quantities. the estimated shelf life of, the product is 21 days at refrigeration temperatures and up to six months when frozen., the beans intend to market this product in its frozen state in 8 and 12-ounce plastic tubs., they also intend to have the products available in six ounce pressurized cans. special, attention has been given to developing an attractive label that will stress the, gourmet/specialty nature of the products., distribution of fancy’s foods whipped dream product will begin in the local, southeastern oklahoma area. the beans have an established name and reputation in this, area, and product introduction should encounter little resistance., financial analyses show that the company will have both a positive cash flow and, profit in the first year. the expected return on equity in the first year is 10%.

Contingency Plans 14 Appendices 15 Letters of Endorsement 15 Resumes of Management 15 Product Labels 15

Background and History Marianne and Keith Bean have been involved with the food industry for several years. They opened their first restaurant in Antlers, Oklahoma in 1981, and their second in Hugo in 1988. Although praised for the quality of many of the items on their menu, they have attained a special notoriety for their desserts. After years of requests for their flavored whipped cream toppings, they have decided to pursue marketing these products separately from the restaurants. Description of Products Marianne and Keith Bean have developed several recipes for flavored whipped cream topping. They include chocolate, raspberry, cinnamon almond, and strawberry. These flavored dessert toppings have been used in the setting of their two restaurants over the past 18 years, and have been produced in large quantities. The estimated shelf life of the product is 21 days at refrigeration temperatures and up to six months when frozen. The Beans intend to market this product in its frozen state in 8 and 12-ounce plastic tubs. They also intend to have the products available in six ounce pressurized cans. Market Description The flavored whipped toppings that Fancy’s Foods will market will fall into two distinct categories: Dairy products and gourmet/specialty foods. This business plan will look at these two markets separately. Dairy Products: While the overall consumption of dairy products in the United States declined from 1972 to 1994, the market has seen a slight increase in the past four years (Census of Agricultural Products, 1998, USDA). Dr. John Moore of the University of Florida expects the consumption of dairy product in the United States to continue a modest increase of 1-2% per year, which is significant in this $268 billion annual market. This is attributed in part to more sophisticated processing techniques which have increased the variety of dairy products available, as well as the increased awareness of the benefits of a calcium rich diet (Moore et al, 1998). Gourmet/Specialty Products: Kalorama Information LLC, a market research firm based in New York, indicates that the gourmet/specialty foods market will continue a fast paced growth well into the next decade. This $39-billion domestic industry has doubled since 1992, and is expected to continue double-digit growth through 2002. While demographic information indicates that this sector of the industry is strongest in metropolitan areas, there are also growth opportunities in smaller communities.

Special attention has been given to developing an attractive label that will stress the gourmet/specialty nature of the products. A copy of the label is attached in the appendices. Linda Byford, a business planning and marketing specialist at the Oklahoma Food and Agricultural Products Research and Technology Center at Oklahoma State University assisted with developing the label, and conducted a focus group study to evaluate the image projected by the label as well as the packaging. Manufacturing Plans Because Fancy’s Foods owns and operates two restaurants, they have facilities available to them for a certain amount of the production. Robert Battles, the Pushmataha County inspector for the Oklahoma Health Department, indicates that The Beans can use these facilities to manufacture food available for retail sale provided that the production occurs while the restaurant is not open to the public. Fancy’s Foods has a 50-gallon high speed mixer, a pressurized tank in which the product can be gassed with nitrous oxide, and a 10-foot by 10-foot walk-in freezer, enabling them to both produce and store frozen tubs of Whipped Dream. This process is already established on a commercial scale. They are in fact already making Whipped Dream for use in their restaurant, and storing it in the freezer. Keith and Marianne feel that the specialty nature of the product will lend itself well to the pressurized can, and this was confirmed by the focus group conducted at Oklahoma State University. To pursue that opportunity, Fancy’s Foods has contracted production of the pressurized 6-ounce cans with Farm Fresh, an Oklahoma dairy processing firm. A non-competition/non-disclosure agreement is in place, and a copy of this document is included in the appendices. Financial Projections The following pages include multi year projections for income, cash flow, balance statement, as well as estimated financial ratios. These projections are for the Whipped Dream division of Fancy’s Foods LLC only. Historical financial information on Fancy’s Foods restaurants is available upon request.

Fancy's Foods LLC

Pro forma income statement, january 1999 - december 1999, net sales $240,450., less: cost of goods sold $182,000., gross income $58,450., operating expenses, labor $12,000., utilities $3,000., insurance $2,400., sales promotion $12,000., delivery and transportation $6,000., miscellaneous $1,500., total expenses $36,900., net income before taxes $21,550., less: income taxes $6,465., net income after taxes $15,085., assumptions:, 1 net sales based on price of $2 per, 24,000 units sold in antlers 2,000 units per month, 36,000 units sold in hugo 3,000 units per month, 45,000 units sold in oklahoma city 9,000 units per month for 5, sales estimates based on 5% market share for prepared whipped topping in each, 2 cost of goods sold includes ingredients, packaging materials, labels, and co-, packing expenses for canned product., 3 no salary will be drawn by the owners/managers in the first year. all profits will be, re-invested for new market entry and increased production., january 2001 - december 2001, net sales $592,194., less: cost of goods sold $442,206., gross income $149,988., salary $20,000., labor $30,000., utilities $6,500., insurance $3,600., sales promotion $25,000., delivery and transportation $16,500., total expenses $83,100., net income before taxes $66,888., less: income taxes $20,066., net income after taxes $46,821., 29,040 units sold in antlers 2,420 units per month, 43,560 units sold in hugo 3,630 units per month, 132,000 units sold in oklahoma city 11,000 units per month, 54,000 units sold in tulsa 9,000 units per month for 6, sales estimates based on 10%sales increase from previous year., 3 salary will be drawn by the owners/managers in the third year..

Fancy's Foods LLC Pro Forma Cash Flow Statement January 1999 - December 1999 January February March April May June July August September October November December TOTAL Revenues $11,450 $11,450 $11,450 $11,450 $11,450 $11,450 $11,450 $32,060 $32,060 $32,060 $32,060 $32,060 $240, Expenses Cost of Goods Sold $8,550 $8,550 $8,550 $8,550 $8,550 $8,550 $8,550 $23,940 $23,940 $23,940 $23,940 $23,940 $182, Labor $0 $0 $0 $0 $0 $0 $0 $2,400 $2,400 $2,400 $2,400 $2,400 $12, Utilities $100 $100 $100 $100 $100 $100 $100 $460 $460 $460 $460 $460 $3, Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $2, Sales Promotion $500 $500 $500 $500 $500 $500 $500 $1,700 $1,700 $1,700 $1,700 $1,700 $12, Delivery and Transportation $200 $200 $200 $200 $200 $200 $200 $920 $920 $920 $920 $920 $6, Miscellaneous $50 $50 $50 $50 $50 $50 $50 $225 $225 $225 $225 $225 $1, Total Cash Flow $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $2,215 $2,215 $2,215 $2,215 $2,215 $21,

Financial Ratios

December 31, 1999, return on equity = net profit before taxes = $21,550 = 10%, net equity $198,060., current ratio = current assets = $148,626 = 2., current liabilities $54,408., quick ratio = curr. assets - inventory = $68,584 = 1., debt to equity = total liabilities = $75,116 = 0..

Contingency Plans While careful planning was involved in setting the strategic goals for Whipped Dream, it may be that these goals are not met. The Beans have decided to set a zone of acceptability for meeting sales and financial objectives. For both sales and financial objectives, a 10% negative deviation from expected sales and projected returns on assets will be accepted. However, if sales objectives and returns on investment are less than 90% of projections, certain actions will be taken. These actions include:

• For unacceptable sales levels during the first year: Fancy’s Foods will combat this problem by doubling in-store promotions of Whipped Dream in Antlers and Hugo. The Beans will personally arrange and carry out these promotions on weekends at peak shopping times. If sales do not increase within one month of the in-store promotions, Fancy’s Foods will advertise in the weekly shopping circulars of the stores for one month.
• For unacceptable sales levels in Oklahoma City and Tulsa: After 6 months of marketing products in these two metropolitan areas, sales will be evaluated. If not meeting acceptable sales levels, Fancy’s Foods will consider contracting with local marketing specialists in Oklahoma City and Tulsa to carry out the in-store promotions and push the products to the stores. This contractual relationship will be based upon sales commissions (to be determined by the specialists and Fancy’s Foods), thereby providing incentive for the specialists to generate sales of Whipped Dream.
• For unacceptable business liquidity: In the event that the business lacks liquidity, Fancy’s Foods will examine their accounts receivable procedures to ensure that payment periods are just and that payments are being received in a timely manner. Also, cash flow projections will be reviewed to determine if unforeseen cash layouts/expenses are undermining the financial health of the enterprise.
• For unacceptable returns on equity: If returns on assets and owners’ equity fall below acceptable levels, Fancy’s Foods will first examine and compare the per-unit costs of production and marketing with sales prices. If the margins are too thin, a price increase for products sold in specialty/gourmet shops will be considered. However, because established non-flavored substitutes already exist at lower prices, the lost sales resulting from a price increase may make this option unsuitable for products sold in general food stores. Fancy’s Foods will therefore assess opportunities for minimizing production costs and examine different marketing/distribution alternatives.
• Multiple Choice

Course : Business Administration (BSA)

University : lyceum of the philippines university.

• Discover more from: Business Administration BSA Lyceum of the Philippines University 999+   Documents Go to course
• More from: Business Administration BSA Lyceum of the Philippines University 999+   Documents Go to course

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Food and beverage industry overview

The food and beverage industry includes all businesses involved in the production, distribution, and sale of food and drinks.

The global food and drink market is expected to grow at an annual rate of 11.9%, reaching a market volume of $3.8 billion by 2027. This increase sharply contrasts the declining industry performance over the last three years.

Contributing factors to this performance are:

• Expected ease of inflation over the next year.
• Continued innovation in beverage and grab-and-go options.
• Increased interest in health-conscious options.
• Lifestyle changes as consumers increase travel and return to the office.

Additionally, the increased adoption of app-based and eCommerce purchasing options will continue to fuel discretionary spending in this category. Portable eating, tech-based purchasing, and alternative health and wellness products or services all show great promise for new entrants.

How to start a food and beverage business

To start a food and beverage business, you need to focus on the following:

1. Identify an idea that meets current demand

Identify your target market and potential competitors. Then, develop a unique product or service that serves a specific need—such as a particular cuisine, dietary need, or a unique dining experience.

2. Write a business plan

Create a business plan that thoroughly explains your business model, operations, pricing strategy, and financial projections.

3. Handle health, safety, hygiene and legal compliance

Food and beverage is a highly regulated industry with additional legal, health, and safety requirements. You must develop strict health and safety standards, prepare a staff training plan, and apply for permits or licenses relevant to your food or beverage offering.

4. Operations and relationships with suppliers

Establish relationships with reliable suppliers to acquire consistent quality ingredients. Focus on implementing an effective inventory management system that helps minimize waste and unnecessary expenses.

5. Location, layout, and staffing

Purchasing behavior and workflows are rooted in your business location and how your business is presented. Carefully choose a location and layout that fits your customers’ expectations and provides a healthy working environment for your employees.

Then, focus on training to ensure quality service, adherence to safety protocols, and the representation of your brand values.

6. Startup costs and financial management

Hefty upfront investments can be needed to start a food and beverage business. Kitchen equipment, menus, signage, POS systems, and mobile ordering technology scratches the surface.

You’ll likely be operating on thin margins, making effective financial planning necessary early on. Take direct inventory of what it will cost to start and run your business for the first year. Consider if you need funding and put a system in place to forecast and review your performance regularly.

7. Marketing and branding

You will have plenty of competition as a food and beverage business. Every restaurant, big brand, delivery service, grocery store, and mini-mart is a potential alternative.

So, don’t sleep on your branding and marketing efforts. Remember your target market, choose the proper channels, and develop a memorable visual identity that fits your mission.

For more on starting a business, check out our full selection of startup resources.

How to write a business plan for a food and beverage business

Here are some specific sections and information to focus on when writing a business plan for a food, beverage, or restaurant business.

Market analysis

The food and beverage industry is a highly competitive market with established competition and a steady influx of new entrants. Thoroughly document who you will be competing with, how you are different, and your ideal customers. This information will influence everything else about your business.

Business model

You’ll notice a trend through the rest of these, but you need a detailed description of how you will make money. As mentioned before, food and beverage businesses often operate on incredibly thin margins.

You need to be sure that your revenue streams make sense for the market, can consistently bring in cash, and will be sustainable long-term.

Menu and product offerings

Specific to this industry, you must cover what you offer and provide a sample menu or product list. It should directly relate to the interest of your clientele and showcase what you offer.

Describe your location, including a layout of your store or restaurant and details for how your business will operate—how you will work with suppliers, specific workflows, equipment needs, and staffing.

Focus on demonstrating quality and efficiency when outlining your operations, and don’t forget to revisit it as you run your business.

Financial projections

Provide detailed financial projections to map out your revenue and expenses. At a minimum, cover startup costs, break-even analysis, profit and loss forecasts, and cash flow statements.

Include any assumptions behind your projections and map out funding needs if you intend to pursue a loan or other investment.

You can use any of our food, beverage, or restaurant sample plans to ensure you cover the right information in your plan. For a detailed overview, check out our complete business plan outline.

What is an example of a food and beverage business?

Food, beverage, and restaurant businesses include:

• Agriculture and food production
• Food processing and packaging
• Alcoholic and non-alcoholic beverage production
• Restaurants
• Food transportation services

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