Dr A.P.J.

ABDUL KALAM TECHNICAL

UNIVERSITY LUCKNOW

A
Project
Report On
Innovation Idea for Product & Services
TOPIC:- START-UP SAMPLE BUSINESS PLAN

UTTAM GROUP OF INSTITUTIONS

Submitted By:- RASNA KASHYAP

MBA 1st Sem.
2006170700080 RASNA KASHYAP
 Start-up Sample Business Plan
TABLE OF CONTENT
Executive Summary ......................................................................................... 1
Objectives .......................................................................................... 1
Mission and Vision ............................................................................ 1
Keys to Success ................................................................................ 2
Start-up costs and funding ................................................................ 3
Company Ownwership ...................................................................... 3
Products and Services ...................................................................... 4
Market ................................................................................................ 4
Strategy ............................................................................................. 4
Management ...................................................................................... 5
Financials .......................................................................................... 5
Investor Considerations..................................................................... 5
Disclaimer .......................................................................................... 6

Company Summary ......................................................................................... 6

Start-up Summary ............................................................................. 7
Start-up Funding ............................................................................... 10
Company Ownership ........................................................................ 11

Products and Services .................................................................................... 12

Business Model ................................................................................ 12
Competitive Landscape .......................................................... 13

Market Analysis Summary .............................................................................. 14

Market Segmentation ....................................................................... 14
Target Market Segment Strategy ..................................................... 15

Strategy and Implementation Summary ......................................................... 16

SWOT Analysis ................................................................................ 16
Strengths ................................................................................ 17
Weaknesses ........................................................................... 17
Opportunities .......................................................................... 17
Threats .................................................................................... 18
Competitive Edge ............................................................................. 18
Sales Strategy .................................................................................. 18
Sales Forecast ........................................................................ 19
Milestones ........................................................................................ 22
Marketing Strategy ........................................................................... 23
Pricing Strategy ................................................................................ 24
Sourcing Strategy ............................................................................. 25
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Acknowledgement
I am using this opportunity to express my gratitude to everyone who supported
me throughout the course of this MBA project. I am thankful for their
aspiring guidance, invaluably constructive criticism and friendy advice
during the project work. I am sincerely grateful to them for sharing their
truthful and illuminating views on a number of issues related to the project.

I express my warm thanks to for their support and guidance.

I would also like to thank my project external guide and all the people who
provided me with the facilities being required and conductive conditions for
my MBA project.

Thank you,

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Executive Summary
This business plan will show how a total investment of only $101,500 could yield
cumulative net profits in excess of $600,000 over a five-year period, and average
monthly sales of $72,000, while maintaining adequate levels of liquidity.

The purpose of this plan is to secure additional funding from an investor and a bank
($29,500 investment, and $30,000 five-year term business loan), to cover the start-up
costs.

Take-Out Pizza, Inc. is a family-run start-up business dedicated to providing excellent

quality New York-style pizza to the residents of Local Bay area, in a manner that
generates fair and equitable returns for present and future owners, and superior value
to our customers. We specialize in creating and offering a variety of deliciously different
pizza.

The Local Bay area has experienced explosive growth over the past five years. Over
one million residents now live in the area. Local businesses are slowly catching up
with this new opportunity. We are opening a new pizza take-out and delivery service
that will focus on the Local Bay area.

Currently, the closest pizza restaurant is one mile away from our intended location in
the Local Bay area. Take-Out Pizza, Inc. will offer a better product, at a reasonable
price, and will deliver it on time to the customer's door.

Objectives
• To attract a minimum of 100 regular customers per day for pizza take-out and
delivery, in the first year of operations;
• To offer our customers excellent pizza services, at a reasonable price, and
provide outstanding customer experience, measured by minimum 5 percent
yearly sales growth, and customer complaints less than 1 percent.
• To generate positive cash flow from operations, and at least 10 percent net
profits to sales.

Mission and Vision

Take-Out Pizza Inc.'s mission is to offer residents of the Local Bay area the best pizza
service in the area. We are committed to providing the service quality and value that
our customers expect.

Take-Out Pizza, Inc. will use its strategy, staff, and systems to provide each customer
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Our vision is to become the first choice of pizza in Local Bay area, and a respected
company -- as measured by our customers, our employees, our shareholders, and the
community we live in.

Our values are critical to our success. They are the strong foundation of Take-Out
Pizza, Inc., define who we are, and set us apart from our competitors. They underlie our
vision of the future. These values include:

• Performance excellence. We act like responsible owners, always seeking to

meet or exceed expectations.
• Teamwork. We act as a team, committed to each other, and bound by trust and
loyalty.
• Integrity. We treat one another, and all our stakeholders with dignity and respect.
Honesty, ethical behavior, and integrity are fundamental characteristics of our
business conduct.

Keys to Success
Our keys to success are:

• Excellent product and service that will build and maintain customer loyalty.
• A business location that will assure high company visibility and a high flow of
customers.
• Proven management ability to successfully run a similar business.
• Our commitment to continuous improvement and total quality services.

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Start-up costs and funding

After spending several months searching for a convenient location, the owners decided
to lease a commercial space in a densely populated area of Local Bay. The start-up
capital will be used for legal expenses, kitchen inventory and equipment, packing and
other materials, insurance, rent, promotion, business sign, and inventory on hand at
start-up, as detailed in the company summary section of this plan.

We have estimated total start-up costs of $131,500. The numbers in the start-up and
the start-up funding tables are meant to reflect these estimates. The company capital
will be $101,500.

John and Lisa Walker, as co-owners, will provide the bulk of start-up financing in the
amount of $72,000 ($36,000 and 35.47 percent ownership each). Approximately
$59,500 additional funding is needed. The purpose of this business plan is to secure
financing for that amount.

An investor and co-owner is welcome to participate in the company's capital for the
amount of $29,500, and could be offered a portion of 29.06 percent ownership of the
$101,500 company capital. The funds provided by the investor will be used to buy
equipment, and to cover part of the start-up expenses. More details about the investor's
potential interest in the company are provided in the important assumptions section of
this plan.

For the remaining $30,000 additional financing needed to cover the start-up costs, the
company plans to receive a five-year term commercial loan facility which will meet
the cash flow requirements. The borrowed funds will be used exclusively to buy
equipment, based on the list that will be made available to the lending institution.The
loan could be repaid in equal monthly installments over a five-year period.

Our cash-flow analysis demonstrates the company's ability to repay the loan and meet
the interest payment obligations, while maintaining adequate liquidity and generating
positive cash flow, and sufficient cash reserves for unforeseen future events.

Company Ownwership
Take-Out Pizza, Inc. will be a privately held C-corporation owned in majority by John
Walker and his wife Lisa. A new investor will be invited to participate in the company's
capital.

At the time of formation, Take-Out Pizza, Inc. plans to issue 10,150 shares of $100 par
value common stock. The issued and outstanding common stock would be $101,500.
John and Lisa Walker, husband and wife, would receive 3,600 shares, at $100 par
value, or 35.47 percent ownership each. Their total contributed capital would be
$72,000.

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2,950 shares at $100 par value, or 29.06 percent ownership. The new investor would
be invited to discuss the quantity and quality of the stock to be issued, before the
incorporation procedures are started. Additional information about investor's interest,
entry, and exit strategy is available in the important assumptions section of this plan.

Products and Services

Take-Out Pizza, Inc. will offer a wide variety of New York-style pizza, as well as sauces,
sodas, fruit juices, and desserts.

Market
The Local Bay area is a growing low-to-middle-class area, counting more than one
million residents. There are about five hundred businesses close to our location. Most
of these residents are families of three or more. The average income for the area is
$45,000.

With continued growth in the area, opportunities to serve the Local Bay residents will
increase. The company will sell to individuals, but it will also accept some occasional
catering jobs to individuals and companies in the area.

The main market segments are: a) individuals (retail customers) accounting for more
than 90 percent of our sales, and b) local businesses (corporate customers) which, in
terms of purchase orders, typically make larger orders for their employees and business
needs.

Strategy
Our strategy is based on delivering a strong customer value proposition in a niche
market. We are looking to offer the Local Bay city and its surrounding areas a new
choice in pizza options.

We are building our marketing infrastructure so that we can eventually reach more
customers with the same pizza offering. We focus on satisfying the needs of low-to-
middle class residents and companies located inside or outside the Loca Bay Industrial
Park.

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Management
Our management is expected to use resources wisely, operate profitably, pay debts,
and abide by laws and regulations. Our management philosophy is based on team
work, responsibility, and mutual respect. People who work at Take-Out Pizza, Inc.
would want to be part of our team because we operate in an environment that
encourages creativity, diversity, growth, and performance.

John Walker will be the manager of Take-Out Pizza, Inc., assisted by his wife, Lisa.
Both of them have successfully owned and operated a similar business in San
Francisco, CA, they have more than seven years relevant experience in the industry,
and hold various degrees and certificates in management and hospitality.

Financials
According to our conservative estimates, Take-Out Pizza, Inc. is expected to maintain a
healthy financial position over the next five years. Our company is expected to break
even in the third month of operations.

We also expect to be profitable in the first year of operations, with profits increasing
over the next four years, as we establish and increase our customer base.

Our main concern will be to have sufficient cash on hand to meet our payment
obligations and be prepared for unexpected needs of cash. Our conservative
projections indicate that our business is able to generate positive cash flows and
sufficient cash reserves.

The ratio analysis clearly shows that Take-Out Pizza, Inc.'s financial position is
expected to remain strong, as measured by its liquidity, long-term solvency, and cash
flow adequacy ratios.

The company's profitability, as measured by its profitability ratios, is excellent, and will
gradually increase over the next five years. This performance will probably be rewarded
by a higher market price when the company decides to go public.

Investor Considerations
For investing $29,500 in the company's capital, the new investor would receive a
portion of ownership of 29.06 percent (2,950 shares of $100 par value). As the investor
will hold between 20 and 50 percent of the voting stock, he or she will exercise
significant influence over the company's policies.

According to our conservative estimates, the cumulative dividends that would be paid to
the new investor, based on 29.06 percent of ownership, over the next five years, would
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Key measures of the expected benefit from the investment are presented in the
important assumptions section of this plan. They clearly show that the risks and benefits
of such an investment would be balanced.

We recognize that any investor in a start-up company, no matter how well on paper,
ultimately needs an exit vehicle. Our purpose is to provide the best alternatives to
protect investor's interest, while maintaining the potential growth of our company, the
liquidity, and the profitability of future operations.

There are several options (exit strategies) that could be discussed while considering
alternative methods for the investor to turn illiquid securities into readily tradable
securities or cash. These options are discussed in the final section of this business plan.

Disclaimer
The current unfavorable economic conditions and prospects are carefully considered,
and the estimates included in the plan are conservative. However, investors are
advised to exercise caution when considering investment alternatives because actual
data almost always differ from projections.

This business plan is designed to help investors better understand the potential risks,
costs and benefits of this business project, but it is not intended, and is not to be
considered in itself or any part of it, as an investment offer or solicitation, as regulated
by law. It was developed for sample purposes, and any resemblance to real situations,
people, or data would be purely coincidental.

Company Summary
Take-Out Pizza, Inc. is a new pizza take-out and delivery service started in the city's
Local Bay area. It is a family-run business (managed by John Walker and his wife Lisa).

John, owner of Take-Out Pizza, Inc. has ten years experience in the hospitality industry.
His wife and company co-owner, Lisa has eight years experience as a cook. Both of
them successfully conducted a pizza delivery business in San Francisco, CA, which
they sold for a handsome profit when they decided, for family reasons, to move to the
Local Bay area.

Their focus is to meet or exceed the customer expectations for an exceptional quality
pizza that is served to be taken out or delivered quickly, and in a friendly manner. The
company will serve a ten-mile area with over 500,000 residents, and a rapidly growing
population. The company's location is very favorable, providing high visibility and a
large flow of customers. Accordingly, the rent that was accounted for in this plan is
higher than in other areas of the city.
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Take-Out Pizza, Inc.'s prices will not beat the competition. We are aware that we
cannot compete on price only. That is why we prefer to focus on assessing customer
expectations, and our core competencies, decide which expectations we can
reasonably meet, then make sure to constantly exceed them wholeheartedly. Thus, we
will be able to maintain and increase the level of customer satisfaction, as a strong
foundation for future growth.

The entire delivery process will be conducted through five main food-catering online
services that have excellent references in the Local Bay area, and we can choose to be
one of their participating suppliers. In this way, we are able to save on delivery costs
and logistics, and simultaneously use the high Internet exposure of our partners. In
addition, delivery people will use their own vehicles, so the business will not have to
purchase delivery vehicles or hire drivers.

Start-up Summary
After spending several months searching for a convenient location, the owners decided
to lease a commercial space in a densely populated area of Local Bay. The start-up
capital will be used for legal expenses, kitchen inventory and equipment, packing and
other materials, insurance, rent, promotion and business sign, and inventory on hand at
start-up, as shown in the table below.

Rent.The commercial property will be leased in August, 2009 for a minimum of five
years, with the option to extend the lease for another five years after that.

Kitchen inventory will include specific tools and accessories that are typically needed
for a pizza production and service facility and includes:

• Food preparation: aprons, blender, gloves, storage containers, trays, work

tables, mixers, condiment bottles, cleaning supplies and equipment, tableware,
pots and pans, glassware, paper, pizza pans, etc.
• Pizza tools: parchment paper, oven brush, bobble popper, pizza tray rack, pizza
separator, and other specific items.
• Utensils: cooking utensils, wheel cutters, cutting guide, rocker knives, etc.

Kitchen equipment includes mainly pizza ovens, pizza dough equipment (digital scale,
mixer, dough docker, automatic dough press, pizza sheeter, manual pizza press), pizza
display merchandiser, refrigerated preparation tables, freezers, cooler package, and
holding table with infrared warmers.

Fifty thousand dollars worth of equipment (long-term assets) will be expensed over the
next five years, using the straight-line depreciation method. A complete list of the
equipment to be purchased, including prices and acquisition terms, will be made
available for both the investor and the bank's consideration.

Our company policy is to purchase only new, state-of-the-art, energy-efficient

equipment from reliable suppliers in the food industry.
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Other expensed equipment consists of neon pizza signs, tables and chairs, coffee
makers, coffee filters, tea dispensers, juice dispensers, cleaning equipment, dish
machines, etc.

Inventory on hand at start-up includes specific ingredients for pizza preparation, flour,
spices and pizza condiments, sauces, juices and other soft drinks, coffee, tea, toppings,
parmesan cheese, cookie doughs, bread sticks and different dessert items that can be
ordered together with the main menu item. It also includes supplies that are used during
the packing, sale, and delivery process, and miscellaneous supplies.

Insurance premium for business risk coverage is initially established at $1,500 for the
first two months, and will be further negotiated with the insurance company.It will be
paid by direct debit on a monthly basis.

Promotion expenses are initially estimated at $1,800 and will be used for various
marketing information materials and advertisements.

Legal expenses include business formation, advice and assistance, basic contracts
reviews, and general business advice.

Office supplies include desks, files, tape, record books, forms, etc.

Permits expenses are the additional costs incurred to operate legally in the Local Bay
area.

There are several U.S.-based manufacturers and suppliers of pizzeria equipment. The
specific vendors will be chosen soon, based on competitive bidding process. All the
selected manufacturers produce and supply high-quality, energy-efficient kitchen and
restaurant equipment, and they compete primarily on price.

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Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $1,200
Kitchen Inventory $6,000
Packing Materials $1,500
Kitchen Equipment $20,000
Insurance $1,500
Rent $2,000
Prom otion $1,800
Other Expensed Equipm ent $5,000
Business Sign $3,000
Permits $1,500
Office Supplies $1,000
Other $3,000
Total Start-up Expenses $47,500

Start-up Assets
Cash Required $10,000
Start-up Inventory $15,000
Other Current Assets $9,000
Long-term Assets $50,000
Total Assets $84,000

Total Requirem ents $131,500

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Start-up Funding
We have estimated total start-up costs of $131,500. The numbers in the start-up and
the start-up funding tables are meant to reflect these estimates. The company capital
will be $101,500.

John and Lisa Walker, as co-owners, will provide the bulk of start-up financing in the
amount of $72,000 ($36,000 and 35.47 percent ownership each). Approximately
$59,500 additional funding is needed. The purpose of this business plan is to secure
financing for that amount.

An investor and co-owner is welcome to participate in the company's capital for the
amount of $29,500, and could be offered a portion of 29.06 percent ownership of the
$101,500 company capital. The funds provided by the investor will be used to buy
equipment, and to cover part of the start-up expenses. More details about the investor's
potential interest in the company are provided in the important assumptions section of
this plan.

For the remaining $30,000 additional financing needed to cover the start-up costs, the
company plans to receive a five-year term commercial loan facility which will meet
the cash flow requirements. The borrowed funds will be used exclusively to buy
equipment, based on the list that will be made available to the lending institution.The
loan could be repaid in equal monthly installments over a five-year period.

Our cash-flow analysis demonstrates the company's ability to repay the loan and meet
the interest payment obligations, while maintaining adequate liquidity and generating
positive cash flow and sufficient cash reserves for unforeseen future events.

For conservative purposes, the annual interest rate has been estimated at 12 percent.
The actual interest rate and the borrowing terms will be negotiated with the participating
bank. Strong collateral could be provided by an SBA guarantee, and by the owners'
personal assets (for example, cash collateral in the form of certificates of deposit, to
cover the remaining collateral requirements in addition to the guarantee).

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Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $47,500
Start-up Assets to Fund $84,000
Total Funding Required $131,500

Assets
Non-cash Assets from Start-up $74,000
Cash Requirements from Start-up $10,000
Additional Cash Raised $0
Cash Balance on Starting Date $10,000
Total Assets $84,000

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $30,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $30,000

Capital

Planned Investment
Owner 1 $36,000
Owner 2 $36,000
Investor $29,500
Other $0
Additional Investment Requirement $0
Total Planned Investm ent $101,500

Loss at Start-up (Start-up Expenses) ($47,500)

Total Capital $54,000

Total Capital and Liabilities $84,000

Total Funding $131,500

Company Ownership
Take-Out Pizza, Inc. will be a privately held C-corporation owned in majority by John
Walker and his wife Lisa. A new investor will be invited to participate in the company's
capital.

At the time of formation, Take-Out Pizza, Inc. plans to issue 10,150 shares of $100 par
value common stock. The issued and outstanding common stock would be $101,500.
John and Lisa Walker, husband and wife, would receive 3,600 shares of $100 par
value, or 35.47 percent ownership each. Their total contributed capital would be
$72,000.

In return for investing $29,500 in the company capital, the new investor would receive
2,950 shares of $100 par value, or 29.06 percent ownership. The new investor would
be invited to discuss the quantity and quality of the stock to be issued, before the
incorporation procedures are started. Additional information about investor's interest,
entry, and exit strategy is available in the important assumptions section of this plan.

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Products and Services

Take-Out Pizza, Inc. will offer a wide variety of New York-style pizza, as well as sauces,
sodas, fruit juices, and desserts.

According to wikipedia.com, New York-style pizza originated in Manhattan, NY in the

early 1900s. It is an American-style pizza which closely resembles that of Naples, Italy.
This type of pizza is known to have thin, wide, and foldable slices. The toppings include
tomato juice and mozzarella cheese. Additional toppings are placed on the cheese part
of the pizza.

Typically, the New York-style pizza is hand-tossed, light-sauced, and the slices are
often eaten folded in half, as street snacks. It differentiate itself from other American
pizza by its specific crust, made of high-gluten bread flour with distinguished flavor.

The pizza is sold by the slice or as whole pies. The slices, taken from a large pizza,
which is about 18 inches in diameter, are cut into 8 slices. When sold by the slice, we
can offer both "regular" or "plain" pizza, and with different toppings. We will always keep
plain items on hand, and will be able to provide our customers with various toppings,
just by adding them on, prior to consumption or re-heating.

The New York-style pizza is served with condiments such as red chili pepper, oregano,
Parmesan cheese, or garlic powder, available for the customer to place on top of the
slice. In addition to pizza, we offer other menu items, such as cookie dough, soft drinks,
bread sticks, and dessert items.

Pizza is served at the counter, for take-out, or delivered to the location indicated in our
customer orders. We take orders online, by phone, or at our location.

For delivery we offer 18-inch plain pies. The slices are sealed and the packaging will
allow our customers to remove individual slices from their freezers as they need them.
The pies are also shipped in leak-proof refrigerant gel packs. Thus, the customer will be
able to pop them into a preheated oven (re-heat instructions are included in the
package), or deep-six them for later use. The pizza can be delivered not only
refrigerated, but also hot, depending on customer preference.

Business Model
Take-Out Pizza, Inc. is a typical take-out restaurant where customers order food and
drinks at the counter, as opposed to sit-down restaurants that provide table service.
Wait-staff is therefore not included in our work team.

As explained in the previous section, our main products are a variety of New-York style
pizza, that are served at the counter, for take-out, as street snacks, or delivered at the
locations indicated in the customer order. We take orders online, by phone, or at our
location.-
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art energy-efficient food preparation equipment and technology will be available to our
kitchen staff, as we plan to invest our capital in valuable long-term assets.

Pizza can be delivered hot or refrigerated. Special package offers protection and quality
conservation during transportation. Re-heating instructions are also included in the
package, along with other items ordered by the customer, such as soft drinks, cookies,
or other dessert items.

The entire delivery process will be conducted through five main food-catering on-line
services that have excellent references in the Local Bay area, and we can choose to be
one of their participating suppliers. In this way, we are able to save on delivery costs
and logistics, and simultaneously use the high Internet exposure of our partners. In
addition, delivery people will use their own vehicles, so the business will not have to
purchase delivery vehicles or hire drivers.

Competitive Landscape
Currently, the closest specialized pizza restaurant is one mile away from our intended
location in the Local Bay area. Take-Out Pizza, Inc. will offer a better product, at a
reasonable price, and will deliver it hot or refrigerated, always on time, to the customer's
door.

However, there are five fast-food restaurants, near our intended location, that also
include pizza among other menu items. The quality of their products is no match for the
New-York style pizza that we offer, but we may consider them as competitors because
they offer better prices (for lower quality) and they are located within a one-mile radius
from our pizzeria.

Other main competitors that we have identified in Local Bay area are: Pizza Concepts.
Pizza-For-You, and Stevenson's Foods. According to our own market survey (see
Appendix M), we distinguish ourselves from them by providing better quality pizza at
reasonable prices, and delivering both hot and special-package refrigerated pizza to the
customer door. Other differences are included in the next table.

Competitors We have, they don't They have, we don't

better quality,
lower prices, table service,
Pizza Concepts specialized products,
various other food items
better equipment
lower prices, own delivery
better location, better
Pizza-For You vehicles, traditional
quality, faster service
customers
skilled pizza staff, luxury environment, high-
Stevenson's Foods better recipes, lower end customers, music and
prices color lighting
Other

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Market Analysis Summary

The Local Bay area is a growing low-to-middle-class area, counting more than one
million residents. There are about five hundred businesses close to our location. Most
of these residents are families of three or more. The average income for the area is
$45,000.

The boom in the area is primarily in response to new business and employment
opportunities in the city's Local Bay Industrial Park. Similar food service businesses
that traditionally do well with this population have proved the potential for Take-Out
Pizza, Inc.

With continued growth in the area, opportunities to serve the Local Bay residents will
increase. The company will sell to individuals, but it will also accept some occasional
catering jobs to individuals and companies in the area.

We estimate that over 90 percent of our sales will go to individuals (retail customers)
and the remaining balance to existing and future businesses (corporate customers).
However, it is important to note that, typically, corporate customers make larger orders
for their employees' needs or special business events.

Market Segmentation
As explained above, the main market segments are: a) individuals (retail customers)
accounting for more than 90 percent of our sales, and b) local businesses (corporate
customers) which, in terms of purchase orders, typically make larger orders for their
employees and business needs.

Next illustration shows the market segmentation, taking into account, for conservative
purposes, only the potential number of individuals that would order pizza (about 100
thousand residents, or 10 percent of the population in the Local Bay area, plus 500
businesses), and less than 5 percent average growth rate.

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Target Market Segment Strategy

Take-Out Pizza, Inc. will focus on its target market, low-to-middle class residents in the
Local Bay area, along with local businesses that are located inside or outside the Local
Bay Industrial Park.

Typically, according to our own market survey, the target individual customers prefer to
order pizza more than once a month, as an occasional alternative to an expensive and
time-consuming lunch or dinner. Businesses prefer to order pizza for their employees,
or on different occasions or less exclusive business events.

We will strive to establish a reputable image from that target market's perspective, by
offering excellent quality New York-style pizza, convenience, expedient delivery
services, service excellence, and by partnering with local businesses and other
interested organizations in our community.

By always focusing on meeting or exceeding our customers' needs, wants and

expectations, we will be able to build customer loyalty and word-of-mouth sales that
many of our competitors are lacking.

Target Market Share. The estimated total total market in Local Bay area is 105,000
pizza pies per month, and our target market share would be 4 percent (4,224 pies /
105,000 pies = .04). We believe this target market share to be reasonable and
achievable. See more details in the sales forecast section of this plan.

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Strategy and Implementation Summary

Our strategy is based on delivering a strong customer value proposition in a niche
market. We are looking to offer the Local Bay city and its surrounding areas a new
choice in pizza options.

We are building our marketing infrastructure so that we can eventually reach more
customers with the same pizza offering. We focus on satisfying the needs of low-to-
middle class residents and companies located inside or outside the Loca Bay Industrial
Park.

We intend to use various forms of marketing communication as an efficient way to

reach our target market and raise their awareness of Take-Out Pizza, Inc., and their
pizza service offerings.

In addition, Take-Out Pizza, Inc. will use effective advertising tools to promote the
business. The Local Bay flyer is a common way to advertise in the area. We will also
hire people to hold signs near Local Bay Industrial Park. Door handle flyer promotion
can be helpful throughout the Local Bay neighborhoods.

Adequate funding has been accounted for when projecting the promotion expenses. We
intend to spend the marketing dollars in the most cost-effective way. Therefore, many
other advertising options will be evaluated during the project implementation, to make
sure that we achieve best results.

SWOT Analysis
The SWOT analysis provides us with an excellent opportunity to examine and evaluate
the internal strengths and weaknesses of Take-Out Pizza, Inc. It also allow us to focus
on the external opportunities presented by the business environment as well as
potential threats.

Next sections explain major strengths, weaknesses, opportunities, and threats that
Take-Out Pizza, Inc. should be aware of.

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Strengths
Take-Out Pizza, Inc. has a valuable inventory of strengths that would help it to be
successful. These strengths include:

a) location

b) excellent quality of New York-style pizza that is currently not available in the Local
Bay area

c) management's proven experience in successfully running a similar business in San

Francisco, CA

d) state-of-the-art, energy-efficient pizza preparation equipment and technology

e) clear vision of the market needs: we know the customers' needs, we are familiar with
the latest technology, and we can offer the pizza services that would bring the two
together

Weaknesses
Strengths are valuable, but it is useful to realize the weaknesses. We have identified
some of our weaknesses:

a) cost factor associated with keeping state-of-the-art equipment and technology

b) we are new in town

c) start-up challenges

d) limited operating capacity during peak sales periods

Opportunities
Take-Out Pizza, Inc.'s strengths and the awareness of its weaknesses will help it
capitalize on emerging opportunities. These opportunities include, but are not limited to:

a) fast growing population in Local Bay area

b) no other specialized pizza take-out and delivery restaurant within a five-mile radius
from our chosen location

c) a large segment of low-to-middle class population, and more than five hundred
businesses in the area

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 Start-up Sample Business Plan
d) consumer behavior changes due to the economic downturn, respectively an
increased preference to buy affordable pizza instead of expensive meals

Threats
Threats the Take-Out Pizza, Inc. should be aware of include:

a) slow recovery process of the economy from the current crisis

b) changes in the business environment that might reduce our sales

c) higher taxes in the future

d) the commercial property is leased, not owned by our company

e) tight credit times, higher interest rate, and higher inflation rate than predicted.

Competitive Edge
QT Pizza Delivery's competitive edge is:
• Location: Take-Out Pizza, Inc. is located in the heart of the Local Bay area ,
near the Local Bay Industrial Center . This is the busiest area in town. The
closest pizza restaurant is a thirty minute drive. There are more than five
hundred businesses in the neighborhood.
• Lower operating cost and reasonable prices: Since Take-Out Pizza, Inc.'s policy
is to purchase latest equipment and technology, and will be operating with a
team of five multi-skilled employees, it will be able to offer reasonable prices for
a high quality New York-style pizza, but it will be impossible to compete on price
only.
• Excellent products and services, timely delivery, and convenience.

Sales Strategy
Because Take-Out Pizza, Inc. is a new entity, we recognize that we will need to prove
our company's worth to Local Bay customers, in order to earn respect and business.

Most important, we need to sell our company, not necessarily our products and
services, and create positive word-of-mouth. We will have to push our service and
delivery capacities.

Our sales strategy is based on the belief that there will be a regular flow of first-time
customers, due to our convenient location. The real sales effort will be to focus on the

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 Start-up Sample Business Plan
friends to share the experience of a great pizza.

This focus recognizes that it would cost our company less money to convert a new
customer into a long-term relationship, than it does to attract a new customer. With this
in mind, our sales activities will concentrate on keeping existing customers happy, and
always meet or exceed their expectations.

Consistent, customer-centric service is the absolute requirement in the hospitality

industry, and so it is for all our employees. Every member of our team will be
empowered to deal with our customers' requests in such a way that no customer should
leave dissatisfied. Problem solving will be encouraged throughout the organization, and
it would also be fair to say that each employee is part of the sales staff, not only the first-
line servers.

Sales Forecast
The following table and charts illustrate the sales forecast for five years. The first few
months will be be slower, a consequence of being a start-up business, struggling to
become more visible within the community, going from nothing to achieving a regular
clientele. A steady growth cycle will occur as the months pass. Profitability is projected
to occur during the first half of the first year.

The increasing sales forecast suggest an important potential growth. Our projected
sales are actually net sales, which consist of the gross proceeds from sales of
merchandise -- gross sales -- less returns and allowances.

The projected average monthly sales are approximately $72,000. Considering an

average price of $17 per pie, Take-Out Pizza, Inc. would need to sell on average 176
pies each day ($72,000 average monthly sales / $17 per pie / 24 business days per
month).

Two weeks are reserved each year for pay vacation, when the restaurant will be closed,
but important maintenance works are scheduled for the equipment and facilities during
this break period. This is the reason why the sales in August are projected at 50
percent of normal sales.

Using our equipment and technology we will be able to produce maximum 400 pies per
day (theoretical operating capacity). However the normal operating capacity, which
takes into account the usual breaks and the idle periods, is only 300 pies per day, or 75
percent (usually 10 working hours per day). That means that the average projected 176
pies per day would be reached at only 58 percent of normal operating capacity (176
pies / 300 pies = .58), which is a reasonable target.

In periods of peak sales, the normal operating capacity could be extended by working
more than 10 hours per day. Therefore we believe that, from the operating point of
view, our sales forecast is feasible.

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 Start-up Sample Business Plan
number of customers required to order 176 pies per day? If each customer would order
one pie it would mean a total of 4,224 customers per month. This figure is disputable
because the companies typically order a larger number of pizza, and the individuals
usually buy by slices, or order full pies for home delivery. However, it is a good starting
point for our analysis.

According to a recent study, pizza sales account for 18 percent of all food service sales
and, despite the economic crisis, continues to outpace overall restaurant growth. Our
own market survey shows that one in five persons interviewed use to order pizza at
least once a month.

The population in the Local Bay area exceeds one million, which means that,
theoretically, the maximum number of pizza (1/2 pie portions) ordered per month at
different restaurants in the area (total market) would be 100,000 pies (1 million
residents / 5 residents / 2 half pies). To this number we would need add the orders that
will be made by many of the five hundred businesses in the area, which we estimate at
5 percent of the retail market, respectively 5,000 pies (100,000 pies x .05).

The estimated total market in Local Bay area is 105,000 pies per month, and our target
market share would be 4 percent (4,224 pies / 105,000 pies = .04). We believe this
target market share to be reasonable and achievable.

Table: Sales Forecast

Sales Forecast
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Unit Sales
NYS Pizza for All 19,230 21,153 23,268 25,130 25,884
NYS Pizza Healthy Style 8,936 9,830 10,813 11,678 12,028
NYS Pizza Vegetarian 4,504 4,954 5,450 5,886 6,062
NYS Pizza Special 3,050 3,355 3,691 3,986 4,105
Other 1,480 1,628 1,791 1,934 1,992
Total Unit Sales 37,200 40,920 45,012 48,613 50,071

Unit Prices FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

NYS Pizza for All $16.00 $16.80 $17.64 $18.52 $19.45
NYS Pizza Healthy Style $18.00 $18.90 $19.85 $20.84 $21.88
NYS Pizza Vegetarian $19.00 $19.95 $20.95 $21.99 $23.09
NYS Pizza Special $21.00 $22.05 $23.15 $24.31 $25.53
Other $25.00 $26.25 $27.56 $28.94 $30.39

Sales
NYS Pizza for All $307,680 $355,370 $410,453 $465,453 $503,388
NYS Pizza Healthy Style $160,848 $185,779 $214,575 $243,328 $263,160
NYS Pizza Vegetarian $85,576 $98,840 $114,161 $129,458 $140,009
NYS Pizza Special $64,050 $73,978 $85,444 $96,894 $104,791
Other $37,000 $42,735 $49,359 $55,973 $60,535
Total Sales $655,154 $756,703 $873,992 $991,107 $1,071,882

Direct Unit Costs FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

NYS Pizza for All $8.32 $8.57 $8.82 $9.08 $9.34
NYS Pizza Healthy Style $9.36 $9.64 $10.12 $10.42 $10.72
NYS Pizza Vegetarian $9.88 $10.17 $10.68 $11.00 $11.32
NYS Pizza Special $10.92 $11.25 $11.81 $12.16 $12.51
Other $13.00 $13.39 $14.06 $14.47 $14.89

Direct Cost of Sales

NYS Pizza for All $159,994 $181,239 $205,226 $228,072 $241,626
NYS Pizza Healthy Style $83,641 $94,748 $109,433 $121,664 $128,948
NYS Pizza Vegetarian $44,500 $50,409 $58,222 $64,729 $68,604
NYS Pizza Special $33,306 $37,729 $43,577 $48,447 $51,347
Other $19,240 $21,795 $25,173 $27,987 $29,662

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Milestones
The following table lists important start-up program milestones, with dates, managers in
charge, and budgets for each. The schedule indicates Take-Out Pizza, Inc.'s emphasis
on planning for implementation.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Market Research 4/1/2009 5/5/2009 $800 John W alker Manager
Business Plan 5/5/2009 5/25/2009 $675 John W alker Manager
Legal Docum ents 5/25/2009 8/1/2009 $1,200 John W alker Manager
Insurace Manager
5/25/2009 8/31/2009 $1,500 Lisa W alker
Assist.
Find Location, Rent Manager
5/25/2009 8/15/2009 $2,000 Lisa W alker
Assist.
Purchase Equipment 8/15/2009 8/25/2009 $20,000 John W alker Manager
Purchase Inventory &
8/15/2009 8/31/2009 $28,500 Lisa W alker Manger Assist
Materials
Loan, Purchase Equipment 8/15/2009 8/31/2009 $50,000 John W alker Manager
Prom otion & Business Sign Manager
8/1/2009 8/31/2009 $4,800 Lisa W alker
Assist.
Other Start-up Activities 7/15/2009 8/31/2009 $22,025 John W alker Manager
Totals $131,500

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 Start-up Sample Business Plan

Marketing Strategy
The marketing strategy of Take-out Pizza, Inc. centers on creating and developing a
corporate identity that clearly defines our market niche in terms that benefit our retail
and corporate customers.

Market needs and trends. Since our target market includes two major segments -- low-
to-middle class residents in the Local Bay area, and local businesses that are located
inside or outside the Local Bay Industrial Park -- their most important needs are service,
price, and delivery, in that order.

One of the key points of Take-Out PIzza, Inc.' strategy is to focus on these target
segments that know and understand these needs, and are willing to pay a reasonable
price to have them fulfilled.

Factors such as current local trends and historical sales data of similar businesses in
the area, ensure that the high demand for pizza will continue over the next five years.
Trends are in our favor: the last study we saw published in the Local Bay area has fast-
food and limited-service restaurant sales growing at 10 percent per year, while fine-
dining restaurants, for example, experienced and will probably continue to see more
than 20 percent decrease in sales.

Our previous experience in running a similar business shows that advertising costs
can easily overwhelm a start-up company, so keeping marketing simple, creative and
cost-efficient will be challenging. Cost-effective use of marketing dollars is one of our
keys to success.

To reach our potential customers, a combination of marketing techniques will be

utilized:

• Local media (radio is most effective in the Local Bay area, followed by print
media). Radio and newspaper advertising will include our core positioning
message, and the New York-style pizza that we offer, in order to differentiate our
service from the competition.
• Sales literature. To drive sales initially, Take-Out Pizza, Inc. will utilize a four-
color catalog with a different cover including the company logo and contact
address. We have developed a price sheet to be enclosed with each catalog.

In addition, we will produce in-house flyers on an as-needed basis that will also
serve to advertise special events and sales promotions. The flyers and catalogs
will be distributed using traditional methods: a) give-away in store, b) enclose in
order shipments, c) hire distributors or personally hand out in the Local Bay
Industrial Park area, e) distribute at local trade shows and other business events
organized by the local Chamber of Commerce, and f) attach business card and
coupons.

Upon release of a new catalog, we will need to check into the financial feasibility
of utilizing direct mail for bulk distribution. Certainly, the main task will be to
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selling the company, rather than the products and services.

• Direct mail
• Grand opening
• Industry specific trade shows and other local business events
• Internet marketing
• Word of mouth

All marketing decisions with regard to specific media choices, frequency, size and costs
will be conducted on an ongoing basis with careful consideration of results (generated
returns).

Pricing Strategy
Our retail and corporate customers are especially sensitive to service value. Take-Out
Pizza, Inc. must ensure that price and service are perceived to be a good value to our
customers. High-quality New York-style pizza will be offered at a reasonable price, but
the price will certainly not be the lowest in the area. In the limited-service restaurants
industry, one message rings true: other competitor can always beat you on price.

Therefore, our pricing strategy will be competitive within the various product range, but
will not rely on the selling price to overshadow other advantages of doing business with
our company, such as a diverse line of high-quality pizza products, that are readily
available, reasonably priced, and backed by service excellence and on-time delivery.

In addition, we recognize that price flexibility is critical to our success. We are prepared
to offer discounts and allowances, sales promotion prices, and to reduce the price over
limited periods of time during the slow-sales hours, in order to increase our operating
capacity usage, and reduce or eliminate idle capacity and subsequent losses.

Freight-out costs will be accounted for in such a manner that delivery prices will not
differ from the prices offered at the counter. One example of pizza delivery prices is
presented below:

18- inch New York-style pizza, vegetarian, plain pies (shipping cost is included in the
price)

• One pie, $19.95

• Four pies, $64.95
• Eight pies, $123.95
• Twelve pies, $ 178.95

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Sourcing Strategy
There are several U.S.-based manufacturers and suppliers of pizzeria equipment,
food supplies, ingredients, packing, and accessories for for pizza preparation.
The specific restaurant equipment vendors will be chosen soon, based on
competitive bidding process.

All the selected manufacturers produce and supply high-quality, energy-efficient

kitchen and restaurant equipment, or materials for pizza preparation and delivery,
and they compete primarily on price.

Maintaining low levels of inventory will help to reduce the cost of financing,
handling and storage. However, too low inventory levels may also result in lost
sales and unhappy customers. Therefore, we will strive to implement the just-in-
time operating environment. This will be achieved by working closely with with our
suppliers to coordinate and schedule shipments so that goods and materials arrive
just at the time they are needed.

Many of the selected suppliers have already committed to special deals for us,
such us waiving their buy-in requirements, sales referrals, and discounts for early
payment (offering terms like 2/10 n/30 for example). Other discounts can be
negotiated gradually, depending on the increasing quantity purchased, and
customer loyalty. We need to focus on making sure our volume gives us
negotiating strengths.

We will purchase our inventory both from local wholesalers and direct from
manufacturers. Because of our past work experience in purchasing materials and
ingredients for pizza preparation, we have a vast number of supplier contacts
within the industry. Ultimately, these suppliers will help us to achieve lower cost-
of-goods and reach our financial performance objectives.
 CONCLUSION

Your conclusion should; reiterate the opportunity, highlight the key strengths of your plan,
summarise your vision, and remind the reader why your business is in a position to
successfully execute the plan. If you are looking to raise funding with your plan, you should
detail the finance required

A start up summary business plan includes the description of your products and services, the
structure of your business, your target market, marketing strategy, funding requirements,
financial projections, and licensing requirements, among others. It serves as a roadmap for
your business.
However, there are 5 elements of a business plan that are absolutely key to making sure that the reader
understands how your company works and plans on growing.
...
You should include:
 Production or Service Delivery;
 Quality Control;
 Inventory;
 Suppliers;
 Credit policies;
 Legal environment;
 Location.