Fresin Fries Bussiness Plan

party Summary What is Fresin fries? Fresin fry sellsgourmet fries in a c acewith a excerption of sauce. We use the concept of Belgian hot up, where the fries be each made from fresh potatoes and heat twice. Our electric receptacle likewise pictures excellent and golden customer helper to support the ambience of manoeuvre, energetic and y awayhful life style. naturalborn-fashioned and fresh surround We lead imitate self-made establishments, such(prenominal) as Jamba Juice and Starbucks, which represent the volume of our core tail market, between 18 to 35 years of age. Our chime in get out feature screening cooking of our featured Belgian fries from cutting to frying.Our customers lead oerly be able to submit our in-house brochures in regards to entirely knowledge about Belgian Fries and our featured sauces. Our store allow for be decorated with unbendable diet setting, such as a bright counter and display carte du jour on the wall. Quality viands Each store leaveoffer nothing but new fried Belgian fries, sandwiches and variety of unique go bad sauces, all served with aged(prenominal)-fashioned home-style c ar. Open free-and-easy Our store is open everyday from 10 am to 9 pm. Variety, variety, variety A different extract of sauces leave be featured every collar calendar months and we leave alone besides change our Italian soda pop flavors to ac keep company our fries. . 1 Company Ownership Fresin Fries is a privately held company. It go away be registered as a Limited company, with ownership 25% Guy Fry, 25% surface-to-air missile Sauce, 25% Carl Cone, 25% consideratele Hip. Guy Fry and Sam Sauce have to a greater extent than 10 years of incur in the food sedulousness. Both are currently employed as Corporate Staff of Company A. Sam Sauce holds an MBA degree from University V. A true entrepreneur by heart, his latest entrepreneurial project is a diamond store in the heart of capital of capital of Singapore. Guy Fry holds a BA degree in Graphic Design from the Academy of Arts.His projects are widely varied from product design to brand evolution of several reputable companies. get at Hip holds a MS degree from Institute Y. He complete several projects and served as project manager for multi-national companies in Singapore. Carl Cone holds a BS degree from University Z, majoring in Management and In micturateation Technology. Prior to his return to Singapore, he has held several management positions in a U. S. -establish IT company. 2. 2 Start-up Summary The sell electric receptacle will be rented at one of the target arrangement obtain malls. Our preference is Space A, for the main agent of reaching larger traffic.Startup requirements will be financed by means of owner investments. pic pic pic Start-up requirements Start-up Expenses Kitchen and Fixtures $21,600 Furniture and Interior $16,500 Legal $3,000 Rent $15,000 Packaging and Stationary $8,500 Contingencies $4,200 heart Start-up Expenses $68,800 Start-up pluss change demand $50,000 Other accredited Assets $0 long-run Assets $0 check Assets $50,000 Total Requirements $118,800 2. 3 Company Locations and Facilities Fresin Fries locations will range in size from 50 70 clock measure square and will topographic point from15 25 guests.Our source location will be on the larger end of this range. The location will feature its own originality in merchandise display and other brand building attributes. We will equip the outlet with modern furniture andaim forcleanlinessand anopen feeling. We are currently looking at several possible sites in shop malls a dogged Orchard Road. The space selection will be chosen based upon the next criteria Community size minimum of 800,000 people within a gas constant of 8 kilometers. Tourist reference. Easy access. Large percentageof teenagers in the community.All of these qualities are consistent with Fresin Fries tendency of p roviding a top grapheme fast food experience. We want word-of-mouth to be our best form of marketing, where our customers value our brand as something exciting and cannot wait to tell their friends and neighbors. Fresin Fries will pick outly fence with several fast food joints inside the chosen shopping mall,including Tori-Q (yakitori specialist), Bee Che Hiang (chinese sausages), lettuce scold (one of the well-nigh successful bakehouse franchises), and Pizza Walker ( local anaestheticly own pizza pie chain). ProductsWe want to focus wholly on sell fries. Alcoholic drinks will not be sell in our outlet, as Fresin Fries promotes a salubrious and positive Singaporean lifestyle. Instead, we will offer Italian soda ashto complement the fries. In promotingtheFresin Frieslifestyle, we will offer various merchandisewith our logo and colors, from hats to t-shirts to potato cutters to our signature sauces, so that our customers can enjoy Fresin Fries at home. Our signature sauce is exclusively manufactured by Company Q. They can be withal purchased at selected retailers. 3. 1 Product DescriptionFresin Fries primarily sells fries and ourunique dipping sauces. Main products sold are Belgian fries, Italian sodas and corporate merchandise. Belgian-style fries are available in large (choose 2 dips), small (choose 1 dip), with addition of garlic Fresin (add S$0. 25). The dips for Belgian style fries can to a fault be served with sandwiches theyare available in more than 20 flavors Pesto Mayo Satay Sauce Teriyaki Sauce Thai chile Ketchup Creamy Wasabi Mayo Roasted black pepper Mayo Lava Cheese Black Pepper Sauce Curry Ketchup Barbecue Jalapeno Ketchup Caribbean Islands Traditional Sambal Korean BBQ Hot Chili Sauce Garlic Dip 3. 2 Competitive Comparison Fresin Fries has several advantages over its leading(a) competitors Unique fusion concept of dipping sauce. We expect a spirited degree of enthusiasm and offer a fun store with friendly ply, that reflects the companys youthful and energetic culture. Supporting merchandise items that support the companys brand building. Our fried potato is made 100% fresh, compared to closely fast food outlets that use frozen fries. Our dipping sauce is also made fresh without preservatives. Our innovative packaging will be more entertaining than our competitors a wiz cone with a cup reserved for dipping sauce. Company 2005 2006 2007 2008 2009 Potential Customers Growth CAGR Young Singaporeans 15% 5,000,000 5,750,000 6,612,500 7,604,375 8,745,031 15. 00% works Singaporeans 10% 3,000,000 3,300,000 3,630,000 3,993,000 4,392,300 10. 0% Tourists 20% 3,800,000 4,560,000 5,472,000 6,566,400 7,879,680 20. 00% Total 15. 52% 11,800,00013,610,00015,714,50018,163,77521,017,01115. 52% 4. 2 Target Market component dodge Fresin Fries intends to cater to the bulk of teenagers and youngsters in Singapore. We have chosen this assembly for several measurable reasons. It is our goa l to be the extraordinary fast food place and we believe that the age group from 15 to 25 is the primary age where brand building efforts could hire place.They are on limited or fixed incomes and seek a value/ terms human relationship that will not stretch their budgets. Our junior-grade target isbetween the ages of 25and 37, which are a heavy lounge/restaurant user group. They are more flexible in budgets and seek more than a value/p sieve relationship. Our lunch dodging is dual purposed. First, we are featuring fresh fries to fill Singapores craving for fast food as most ideas of lunch is a rapid bite not a heavy meal. Second, we want to keep the price point at lunch as fair as possible to keep us in competition with other fast food outlets.At S$4. 00 for a medium size fries, we are only slightly above the segment, but we offer much more excitement than the rest of the competition. 4. 2. 1 Market Needs Fresin Fries sees our targeted market group as having many makan ( consum e) Singaporean Dollar needs. A recent Consumer Trend and psychoanalysis by Euromonitor identified the following needs among our target markets. Our core group Wants variety and flavor in its food, preferably something fried Looks for speed of service Wants an entertaining and fun experience Insists upon a clean, friendly, and attractive environment Adopts a global lifestyle Is computer literate Enjoys eating out Has an active lifestyle Comes from various ethnic backgrounds According to a GAIN Report published in 2000, potatoes arethe second largest commodity of US exports to Singapore subsequently fresh fruit, valuing almost USD $13 cardinal per annum. This is caused by the increasingly younger demographic and rising incomes without Singapore that have led to lifestyle changes that are influencing consumer purchases, food, and entertainment choices.Some changes taking place include a larger professional sieve with more working women,which means greater disposable income s. 4. 2. 2 Market Trends In the past, Singaporeans preferred horse opera chain restaurants. This was the time when KFC, McDonalds, Long John Silversand Pizza Hut were dominating most of the chains. But the flair seems to have shifted in the last decade, with the success of the locally grown brands, such as Bread lambaste and Bee Che Hiang. Many of these local brands grew to becomegiant franchisesthat dominate the Southeast Asia region.For instance, Bread blither controls 55% of Indonesias bakery market. The key to success for these foreign chains was mainly due to the popularity of Singapore as tourist destination for these countries. Tourists are the strongest buzzer. Usually afterthey went back from vacationing in Singapore, they told friends and families about new things in Singapore, including new shopping malls, new boutiques, new restaurants, and new fast food joints. The fascination of Asian tourists coming to Singapore has positioned the city itself as an aspiration to modern life in the region.Many local entrepreneurs camouflaged their retail stores as an international brand in accordance to what they sell. For instance, there is a local entrepreneur who created a Japanese name to sell yakitori (Japanese BBQ meat skewers), and there is a fashion boutique named after an old Italian movie. 4. 3 application Analysis Despite the prolonged personal effects of the Asian Economic Crisis followed by political turmoil up to mid 2001, Singapores food service industry witnessed harvest-tide over 2000/2001 at 4 5% in terms of units and transaction (Euromonitor).Much of this growth was contributed by the cafes/bars, fast food, and food retail sectors, whose wide appeal amongst a young population, for whom time is of a premium, led to high levels of growth. This growth is underpinned by market demand and lifestyle changes, such as seeing eating out as part of trendy lifestyle. Entry of major multi-national food service operators into major shopping destinat ion in the late 1980s until the 1990s led to growth in competition in the marketplace, mainly from fast food chains. This stimulated the rise in the tot of fast food units, both of internationaland local chains, that started in the early 1990s.Although there was aslowdown during the economic crisis in 1998,the food service industryrecovered faster than others, particularly during 2000 and 2001. Recent bombing tragedies have also proven thatnegative effects on this sectorare moderately short-term. Franchising became popular in the food service industry through the introduction and entry of multi-national food service brands, primarily U. S. -owned enterprises, such as KFC, Pizza Hut and McDonalds. genuinely, there are many local chains that have also experienced growth by applying this carcass to their operations. 4. 3. 1 Trends in Food Service RetailAccording to government surveys, Singapores spending on eating out is continuing to increase. Spending on cooked food as a percentag e of total mean(a) food-spend reached 55% in 1998. The growth in spending in the food service sector arises from a number of factors Increased affluence amongst Singaporeans, especially those under the age of 40 years. Increases in the number of throw out residents, which has more than doubled since 1988. Increased convenience-seeking amongst younger Singaporeans who live in a hectic city instantly compared to the much s pooh-pooh pace of life that existed 20 years ago.When they want convenient cooked food, Singaporeans have long turned to the local hawker stalls, rather than prepared externalizet-to-cook or ready-to-eat processed convenience foods. As the metrical composition and variety of food service outlets has increased in Singapore, locals have adopted the convenient products of other food service outlets, especially the fast food outlets, as alternative sources of convenient cooked food. Younger bosom and stop number income group families and case-by-cases are al so frequent users of the full service restaurants, modern-style coffee shops and cafes that now exist all across Singapore.Over the past 5 years, there has been a general upgrading in the food service sector which has seen the establishment of more air conditioned food centers (food courts) that are considerably cleaner than the conventional hawker markets. At the same time, increased investment from foreign and local businesses in the sector has also produced an increase in the numbers of Foreign chains, including chains such as Outback Steakhouse. Modern retail bakery/cafe outlets such as Bread Talk. Modern coffee shops such as Starbucks. 4. 3. 2 Competition and Buying PatternsThe competition in this arena is the fiercestin allother metropolitan areas in SE Asia. Singapore is a compact city, but has a lot to offer. Usually there are a minimum of cardinal of the same outlets withina radius of less than 300 meters. For instance, Bread Talk opens one outlet inside the Ngee Ann City Shopping Centre and another just across the street inside the Far East Plaza Shopping Centre. It is quite common for retailers to implement this kind of strategy, due to the high volume of people strolling around the main area of Orchard Road.Another reason is because many retailers do not want to lose sales opportunity, as the competitors are offering substitutions and resembling product categories. This phenomenon has made Singapore the best place to shop. If you just missed Haagen Dazs waffle at CK hell dust Shopping Mall, there is another Haagen Dazs across the street at the new Paragon Shopping Centre. 4. 3. 3 Main Competitors Our main competitors in this segment are any food outlets within the 300 meter radius along the Orchard Road. In our location, there are Tori-Q, Pizza Walker, Starbucks, Bread Talk, and Rotiboy. Tori-QTori-Q is locally owned franchise who sells Japanese BBQ skewers. Established in 1998, Tori-Q had set forthed its operation into neighboring countr ies, Indonesia, Malaysia, and Thailand. Tori-Q is popular among local teenagers as it offers fast service to its customers. Commonly, Tori-Q outlets are rather small,and can only serve a maximum of 6 guests. It is a choice for those who are in a hurry and would like to grab a ready(a) lunch on the way. Pizza Walker Pizza Walker is a joint venture positioned as gourmet pizza joint in Singapore. Most of its retail outlets are decorated with welcoming ambience, such as flowers and see-through kitchens.Pizza Walker is a good place to hang out, and the place is eer full during lunch hour. It has more than enough tables to serve a maximum of 55 guests. Its specialty is all-you-can-eat pizza Starbucks Starbucks strategy entering the lunch market had made some impact in Singapore. Usually, a lunch menu in Singapore consists of fried and BBQ stuff such as roast pork with rice or the Big Mac. Starbucks is one of the first food retailers that popularized light and healthy alternatives such a s salad or lean sandwich as an options for Singapores lunch accommodations.Bread Talk As the most successful franchiser in Singapore, Bread Talk is surely becoming a threat for most food retailers. Bread Talk not only rented most of the retail space along Orchard Road, but now they are doing delivery to offices and apartments nearby. Bread Talk outlets usually consist of a huge see-through kitchen, and bread trays ready for pick-up by customers, with three or four cashiers at front, to speed up the queue. Rumor has it that Bread Talk sold more than 35,000 breads each day in just one of their retail outlets. Rotiboy A Malaysian franchise.Rotiboy is quite popular in the region as it is now billowing into several cities in Indonesia, Vietnam, Thailand, and the Philippines. Rotiboy offers simplicity for quick lunch franchiser, and often considered alternatives for its long queueing rivals. 4. 3. 4 Foreign Vs. Local Franchising Around 40% of the franchises operating in Singapore are for eign. Home grown franchises are still in their maturing stages as they start to expand globally. Franchises from the U. S. account for 65% of foreign brands, with big players such as KFC, Starbucks, Pizza Hut, etc.Due to high capital investment, Singapore conglomerates tend to dominate the industry. Home grown franchises are moreoften sought-after(a) more by young entrepreneurs thanare their Western counterparts, asthey offer greater flexibility and lower franchise fees to operate. Unlike Western license holders, home grown franchisesare more efficient in the overall supply chain management as the basic raw ingredients are commonly entrap anywhere in the region. Strategy and Implementation Summary At first, we will open one outlet inside the New Paragon Shopping Centre.This will become our market testing area, and as we go further, Fresin Fries is planning to open another in nearby shopping malls. In attracting customers to try our fries, we will provide a see-through kitchen, so t hat people will see how we are committed to incrustation in our products. The kitchen will also let out an aroma of our freshly fried fries into the surroundings area, so that people will come and try our products. 5. 1 Competitive Edge Our unique dipping sauces blend local taste and international into one fusion recipe for the signature sauce. Enthusiastic and friendly stave Supporting merchandise items that support companys brand building. Ourfriesare made of 100% fresh potatoes, strange the frozen fries used by competitors. Innovative packaging will position us at the same level with foreign fast food franchises. 5. 2 trade Strategy Our strategy is based on serving our markets well. We will start our first outlet as a market examiner that could become a model of the expanding number of outlets in the succeeding(a). Concentration will be on maintaining quality and establishing a strong identity in the local market.A combination of local media and local store marketing pro grams will be utilized at each location. Local store marketing is most effective, followed by print ad. As soon as a concentration of stores is established in a market, then broader media will be explored. We believe, however, that the best form of advertising is still buzz. By providing a fun and energetic environment, with unbeatable quality at an acceptable price in a clean and friendly outlet, we will be the talk of the town. Therefore, the execution of our concept is the most critical element of our plan.We will actively build our brand, through the selling of supporting materials, such as merchandise, promotional items and other marketing gimmicks equal to those of other fast food franchises. 5. 2. 1 Pricing Strategy Our pricing strategy is positioned as generic wine, meaning that S$4. 00 is the average consumer spending for a snack or light lunch in Singapore. Leveraging the volume of fries, Italian Soda, and signature style sauces to be sold, we are serving the majority o f Singaporeans. 5. 2. 2 Brand Challenges Fresin Fries must establish a distinct brand to stand out from the other Western-style fast food competitors. Our logo is distinct as fresh, energetic and playful with color elements that are centre catching. Product names are geared toward the target market (teens), with items such as Frenzy Fresin and Uber Fresin which are fun and easy to remember. 5. 2. 3 marketing Programs We will deploy three different marketing tactic to increase customer awareness of Fresin Fries. Our most important tactic will be word-of-mouth and in-store marketing. This will be by far the cheapest and most effective of our marketing programsbecause ofthe high traffic in targeted shopping locations. The second tactic will be local store marketing.These will be low-budget plans that will provide community support and awareness of our facility. The last marketing effort will be utilizing local media. Although, this will be the most costly, this tactic will be used sparingly as a supplement where necessary. In-Store Marketing o In-store brochures containing our concept and school of thought. o Wall posters. o Design concept. o In-store masking of making fries process from cutting to frying. o Standing signage inside malls lobby/aisle. o alfresco signage (if possible). o Grand scuttle promotion. o Party catering. o Merchandising items. Local Store Marketing o Brochures. Free occasional t-shirts at local stores events. Local Media o Direct mail function containing brochures sent to surrounding addresses. o Web page containing company philosophy, explanation and news. o Local magazines that target our core customers, such as Free Magazine. o Newspaper campaign placing several large ads passim the month to explain our concept to the local area. 5. 2. 4 Positioning Statement Our main focus in marketing will be to increase customer awareness in the surrounding community. We will direct all of our tactics and programs toward the goal of explaining who we are and what we are all about.We will price our products fairly, keep our standards high, and fly the coop the concept so that word-of-mouth will be our main marketing force. 5. 3 gross revenue Strategy The sales strategy is to build and open new locations in order to increase revenue. However, this plan will be implemented when the one market tester outlet showed potential growth. As each individual location will continue to build its local customer base over the first three years of operation, the goal of each store isS$104,250 in annual sales, with the original flagship store evaluate to earn almost S$200,000 per year. . 3. 1 gross revenue Forecast We anticipate the highest peak on the months of November and declination in our sales forecast, due to the holiday seasons. In November, there is Ramadan, and for non-muslim Malaysians and Indonesians, it means vacation time. Approximately 1. 5 millionIndonesians visit Singapore each year, mostly for shopping and d ining. Then in December, we anticipate more tourists coming into Singapore this explains the jumped of sales in these last two months of the year. pic pic pic pic pic gross sales Forecast 2005 2006 2007 Unit gross sales Belgian Fries 49,464 98,928 197,856 Italian Soda 27,692 55,384 110,768 Merchandising 3,889 7,778 15,556 Signature Packaged Sauces 3,356 6,712 13,425 Total Unit Sales 84,401 168,802 337,605 Unit Prices 2005 2006 2007 Belgian Fries $4. 00 $4. 00 $4. 00 Italian Soda $1. 50 $1. 50 $1. 50 Merchandising $8. 50 $8. 50 $8. 50 Signature Packaged Sauces $2. 00 $2. 00 $2. 0 Sales Belgian Fries $197,856 $395,712 $791,424 Italian Soda $41,538 $83,076 $166,152 Merchandising $33,057 $66,114 $132,228 Signature Packaged Sauces $6,712 $13,425 $26,849 Total Sales $279,163 $558,327 $1,116,654 Direct Unit Costs 2005 2006 2007 Belgian Fries $0. 80 $0. 80 $0. 80 Italian Soda $0. 15 $0. 15 $0. 15 Merchandising $3. 83 $3. 83 $3. 83 Signature Pac kaged Sauces $1. 00 $1. 00 $1. 0 Direct Cost of Sales Belgian Fries $39,571 $79,142 $158,285 Italian Soda $4,154 $8,308 $16,615 Merchandising $14,876 $29,751 $59,503 Signature Packaged Sauces $3,356 $6,712 $13,425 Subtotal Direct Cost of Sales $61,957 $123,914 $247,827 5. 4 strategical Alliances Our business requires a long relationship with raw suppliers as well as partner vendors. In Chinese, this relationship is called guanxi, meaning business bonding.We already have a long and good standing relationship withCompany Vin our previous ventures. For Company Y, Mr. Joe Shmo, the managing director,is a prominent figure in the partnership and we hope to strengthen further our business relationship with him andthe company. 5. 5 Milestones During the initial set up of the company, the 4 founders (Guy Fry, raise Hip, Sam Sauce, and Carl Cone) will conduct the planning and implementation in building the brand and the bend of our first outlet. The planning and constructio n will take approximately 8 months, in addition to the alteration and refinement process that will take the rest of the 12 month period before our opening in early 2005. pic pic pic Milestones Milestone Start Date End Date Budget Manager part Presentation materials for all 1/12/2004 3/12/2004 TBD Carl Cone melody stakeholders exploitation bond up with suppliers 1/21/2004 3/22/2004 $100 Sam Sauce Business Development Follow up with developers 1/21/2004 9/8/2004 $50 Sam Sauce Business Development Printing materials 2/13/2004 4/10/2004 $8,000 Guy Fry Marketing Marketing communication program 2/21/2004 6/23/2004 TBD Sam Sauce Marketing Constructions 5/22/2004 12/3/2004 TBD Harry Hip Business Development In store signage, democratic 5/23/2004 10/11/2004 TBD Guy Fry Marketing Grand opening materials 6/2/2004 10/13/2004 TBD Guy Fry Marketing Hiring staff 7/14/2004 8/12/2004 $900 Harry Hip Human Resources Open second location 7/1/2005 7/1/2005 $10,000 Carl Cone Business Development Open 3rd and 4th locations 1/1/2006 6/1/2006 $15,000 Carl Cone Business Development Open 5th, 6th, and 7th locations1/1/2007 12/31/2007 $20,000 Carl Cone Business Development Training staff 9/12/2004 12/10/2004 $1,000 Harry Hip Human Resources Totals $55,050 Web Plan Summary The website will, of course, show visitors everything about Belgian food culture, including the history of french fries over time. To make the website interactive, Fresin Fries will offer gift cards and promotions via the Internet, so our visitors can print the promotional coupon in PDF format and bring it when they visit Fresin Fries. Visitors can also download Fresin Fries theme song as ring tones, or order potato cutters for delivery.Besides the traditionalistic formats of customer service hotline and in-store form, customers can now write their comments and suggestionson our website, which will be directed to one of our staff. So, the website itself will act as the medium between our company and our audience. In the future, our website will show schooling on franchising/licensing our brand name. 6. 1 Website Marketing Strategy We will leverage the visibility of our shopping malls website by getting them to include a link to ours. We will also postbanners on an official Singapore tourism website. 6. 2 Development Requirements To adequately serve our audience, the front end strategy of our website should be analog with our corporate color.The front end design of our website will be entirely trustedto Mr. Guy Fry. The renewal of founders background in our company has enabled a cost efficient development in our venture. As Mr. Harry Hip and Mr. Carl Cone are experts in Information Technology, the back end of our website will be developed bythese gentlemen. Management Summary The initial management team depends on the founders themselves, with little back-up. As we grow, we will take on additional help in certain key are as. Part of our basic philosophy will be able to run our executive management as a knowledge communion fellowship. We will not add additional overhead until absolutely necessary.This will mean that the initial staff support team will have to work extra. By doing this, we will keep our overhead as low as possible, allowing us to adequately staff our outlets. This will also allow us and future business partners to recoup investments as quickly as possible and enjoy a higher return. At present time, Fresin Fries is being owned by its 4 founders. Others that have helped on the development of this business venture will be offered an opportunity to grow together with the company at the appropriate time, and when the time comes, the 4 founders share will be consolidated as one entity. 7. 1 Management team up Fresin Fries is currently the creative idea of its four founders.As the company is small in nature, it only requires a simple organizational structure. Implementation of this organiz ation form calls for all four individuals to make all major management decisions in addition to monitoring all other business activities. As we expand into multiple locations, each location will have a primary site manager. 7. 2 organisational Structure Future organizational structure will include a director of store operations when the store locations exceed four units. We hope that this individual will come out of the ranks of our stores management. This will provide a supervisory level between the executive level and the store management level.Current plan is to have our invoice and payroll functions done by an in-house bookkeeping. Mr. David Lu will be responsible for accounting and business development of Fresin Fries, helped by Mr. Harry Hip, acting Head of Human Resources Division. Possible positions might be added at a later date include marketing manager, purchasing manager, controller, human resources, R&D and administrative support team. 7. 3 Personnel Plan Our initial e mployees willinclude twocashiers, two cooks and two bus boys per location, with one of each on the premises during open hours. This is considered an ideal personnel number for a food outlet the size of our own.Each employee will work for 38-40 hours per week. In the long run, as we expand our product category and retail outlets, we will employ more people in the middle management to ensure the focus of our work, including site managers. pic Personnel Plan 2005 2006 2007 Site Managers $0 $60,000 $96,000 propertyiers $36,000 $80,000 $144,400 Cook $28,800 $66,000 $115,200 waiters assistant $23,400 $56,000 $94,000 Total People 12 26 40 Total Payroll $88,200 $262,000 $449,600 Financial Plan The company is now privately held by Harry Hip, Guy Fry, Carl Cone, and Sam Sauce. Future shares will be offered after two consecutive years of operating in Singapore. 8. 1 Projections 8. 2 Start-up Funding Currently, the company is owned by the original 4 founders, who each will contr ibute $200,000 for the same amount of share, 25%. This will more than cover start-up requirements, and provide the business with a cash cushion to use for expansion over the first three years. pic Start-up Funding Start-up Expenses to Fund $68,800 Start-up Assets to Fund $50,000 Total Funding Required $118,800 Assets Non-cash Assets from Start-up $30,000 Cash Requirements from Start-up $50,000 superfluous Cash Raised $681,200 Cash Balance on Starting Date $731,200 Total Assets $761,200 Liabilities and crown Liabilities Current acquire $0 Long-term Liabilities $0 Accounts Payable (Outstanding Bills) $0 OtherCurrent Liabilities (interest-free) $0 Total Liabilities $0 swell Planned Investment Eric Yam $200,000 Martin Ng $200,000 David Lu $200,000 Sagita Suwandi $200,000 Additional Investment Requirement $0 Total Planned Investment $800,000 personnel casualty at Start-up (Start-up Expenses) ($68,800) Total Capital $731,200 Total Capital and Liabilities $731,200 Total Funding $800,000 8. 3 Break-even Analysis Our break-even analysis shows that we need unit sales over 9,700 per month to break even. We do not expect to begin turning a profit until year three. pic pic pic Break-even Analysis Monthly Units Break-even 9,706 Monthly Revenue Break-even $32,104 Assumptions Average Per-Unit Revenue $3. 31 Average Per-Unit Variable Cost $0. 73 Estimated Monthly Fixed Cost $24,979 8. 4 Projected Profit and Loss As the Profit and Loss shows,Fresin Fries will run at a loss for the first two years, using up some of the cash reserves initially invested by the founders. As sales increase, we will expand into new locations to aggressively spread brand recognition. This increase in visibility will allow us to take up less expensive locations off of Orchard Road, while maintaining our flagship operation, the first store, in a visor spot. pic pic pic pic pic pic pic pic pic Pro Forma Profit and Loss 2 005 2006 2007 Sales $279,163 $558,327 $1,116,654 Direct Cost of Sales $61,957 $123,914 $247,827 Other Costs of Sales $0 $0 $0 Total Cost of Sales $61,957 $123,914 $247,827 Gross boundary line $217,207 $434,413 $868,826 Gross Margin % 77. 81% 77. 81% 77. 81% Expenses Payroll $88,200 $262,000 $449,600 Marketing/Promotion $10,000 $10,000 $10,000 Depreciation $0 $0 $0 Rent $174,000 $248,000 $298,000 Utilities $2,550 $5,000 $8,000 New location setup $25,000 $50,000 $50,000 Total Operating Expenses $299,750 $575,000 $815,600 Profit Before raise and Taxes ($82,543) ($140,587) $53,226 EBITDA ($82,543) ($140,587) $53,226 Interest Expense $0 $0 $0 Taxes Incurred $0 $0 $0 sack up Profit ($82,543) ($140,587) $53,226 last-place Profit/Sales -29. 57% -25. 18% 4. 77% 8. 5 Projected Cash FlowThe following chart and table show the Projected Cash Flow for Fresin Fries. pic pic pic Pro Forma Cash Flow 2005 2006 2007 Cash get Cash from Operations Cash Sales $279,163 $558,327 $1,116,654 Subtotal Cash from Operations $279,163 $558,327 $1,116,654 Additional Cash reliable Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $279,163 $558,327 $1,116,654 Expenditures 2005 2006 2007 Expenditures from Operations Cash Spending $88,200 $262,000 $449,600 Bill Payments $244,265 $430,245 $599,286 Subtotal fatigued on Operations $332,465 $692,245 $1,048,886 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Di vidends $0 $0 $0 Subtotal Cash Spent $332,465 $692,245 $1,048,886 Net Cash Flow ($53,301) ($133,918) $67,767 Cash Balance $677,899 $543,981 $611,748 8. 6 Projected Balance aeroplane Fresins projected company balance sheet follows. We expect to run at a loss for the first two years, decreasing our net worth slightly. As the operation becomes more profitable in the thirdly year, our net worth rises again. pic Pro Forma Balance Sheet 2005 2006 2007 Assets Current Assets Cash $677,899 $543,981 $611,748 Other Current Assets $0 $0 $0 Total Current Assets $677,899 $543,981 $611,748 Long-term Assets Long-term Assets $0 $0 $0 hive away Depreciation $0 $0 $0 Total Long-term Assets $0 $0 $0 Total Assets $677,899 $543,981 $611,748 Liabilities and Capital 2005 2006 2007 Current Liabilities Accounts Payable $29,242 $35,911 $50,452 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $29,242 $35,911 $50,452 Long-term Liabilities $0 $0 $0 Total Liabilities $29,242 $35,911 $50,452 Paid-in Capital $800,000 $800,000 $800,000 Retained Earnings ($68,800) ($151,343) ($291,930) Earnings ($82,543) ($140,587) $53,226 Total Capital $648,657 $508,070 $561,296 Total Liabilities and Capital $677,899 $543,981 $611,748 Net value $648,657 $508,070 $561,296 . 7 Business Ratios The following table outlines some of the more important ratios from theFast Food Restaurants and Standsindustry. The final column, exertion Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code 5812. pic Ratio Analysis 2005 2006 2007 Industry Profile Sales Growth 0. 00% 100. 00% 100. 00% 8. 7% pct of Total Assets Other Current Assets 0. 00% 0. 00% 0. 00% 37. 31% Total Current Assets 100. 00% 100. 00% 100. 00% 45. 97% Long-term Assets 0. 00% 0. 00% 0. 00% 54. 03% Total Assets 100. 00% 100. 0% 100. 00% 100. 0 0% Current Liabilities 4. 31% 6. 60% 8. 25% 17. 94% Long-term Liabilities 0. 00% 0. 00% 0. 00% 22. 26% Total Liabilities 4. 31% 6. 60% 8. 25% 40. 20% Net Worth 95. 69% 93. 40% 91. 75% 59. 0% Percent of Sales Sales 100. 00% 100. 00% 100. 00% 100. 00% Gross Margin 77. 81% 77. 81% 77. 81% 59. 05% Selling, General & Administrative Expenses 107. 37% 102. 99% 73. 04% 39. 24% Advertising Expenses 0. 00% 0. 00% 0. 00% 1. 96% Profit Before Interest and Taxes -29. 57% -25. 8% 4. 77% 1. 92% Main Ratios Current 23. 18 15. 15 12. 13 1. 04 Quick 23. 18 15. 15 12. 13 0. 66 Total Debt to Total Assets 4. 31% 6. 60% 8. 25% 50. 2% Pre-tax Return on Net Worth -12. 73% -27. 67% 9. 48% 6. 90% Pre-tax Return on Assets -12. 18% -25. 84% 8. 70% 13. 87% Additional Ratios 2005 2006 2007 Net Profit Margin -29. 57% -25. 18% 4. 77% n. a Return on Equity -12. 73% -27. 7% 9. 48% n. a Activity Ratios Accounts Payable Turnover 9. 35 12. 17 12. 17 n. a Payment Days 27 27 26 n. a Total Asset Turnover 0. 41 1. 03 1. 83 n. Debt Ratios Debt to Net Worth 0. 05 0. 07 0. 09 n. a Current Liab. to Liab. 1. 00 1. 00 1. 00 n. a Liquidity Ratios Net Working Capital $648,657 $508,070 $561,296 n. a Interest Coverage 0. 00 0. 00 0. 00 n. Additional Ratios Assets to Sales 2. 43 0. 97 0. 55 n. a Current Debt/Total Assets 4% 7% 8% n. a Acid Test 23. 18 15. 15 12. 13 n. a Sales/Net Worth 0. 43 1. 10 1. 99 n. a Dividend Payout 0. 00 0. 00