AgEc 495 College of Agriculture & Bioresources University of Sasaktchewan Café Tanya Gleim Leah Fullerton Kyle Mackow Michael Yeager.

AgEc 495 College of Agriculture & AgEc 495 College of Agriculture & Bioresources University of SasaktchewanBioresources University of Sasaktchewan

CaféCafé

Tanya GleimTanya Gleim

Leah FullertonLeah Fullerton

Kyle MackowKyle Mackow

Michael YeagerMichael Yeager


Café LocationCafé Location


Site PlanSite Planz

H W Y # 5 5

………..Roses……………xxxxxxxxxxxxxx

Cafe

Deckk

Tree Row

Tree Row

Tree Row

Tree Row

Parking

Tree Row

Tree Row

Tree Ro

w

Tree Row

Tree

Tree

Entrance Sign

Split Railed Fence

Split Railed Fence

Perennial Flower Gardens


CaféCafé


Operations & Human Resource Operations & Human Resource PlanPlan


Organizational Organizational StructureStructure

Board of Advisors

Joint Managers

Cooks

Servers


Floor PlanFloor Plan


Hours of OperationHours of Operation

May & JuneWeekdays 11:00AM-4:00PMWeekends 11:00AM-8:00PM

July & AugustWeekly 10:00AM-9:00PM

September & OctoberWeekly 11:00AM-8:00PM

Hours of Operation


Human Resources PlanHuman Resources Plan

Managers : $20,000 Managers : $20,000 each annuallyeach annually

Cooks : $12.00/hourCooks : $12.00/hour

Servers : Servers : $10.00/hour$10.00/hour


Marketing PlanMarketing Plan


Marketing MixMarketing Mix

Products and ServicesProducts and Services

PricePrice

Promotion Promotion

PlacePlace


Target MarketsTarget Markets

TravellersTravellers

Local populationLocal population

Young familiesYoung families

School groupsSchool groups


Positioning StatementPositioning Statement

The Cafe will provide a The Cafe will provide a wholesome and home-made wholesome and home-made dining experience. dining experience.

The Café will provide a place to The Café will provide a place to experience the tranquil country experience the tranquil country atmosphere, within the serene atmosphere, within the serene prairie landscape.prairie landscape.


SWOTSWOT

Strengths Weaknesses

Human Resources

- Managers are ambitious, dedicated and optimistic of the business and have previous business management experience

- Two managers to split duties and assist each other with responsibilities

- Managers are new to restaurant industry

- Managers have a lack of expertise and training in cooking and restaurant management

Physical Resources

- Building, Corn Maze & Berry Patches are already established

- Located on Highway 55

- Renovations, Landscaping & Capital Equipment

Financial Resources

- Negative CCC- No Accounts Receivable- 30 day Accounts Payable on

credit

- Seasonal profits- Profits are dependent on sales

and number of customers


SWOTSWOT

Opportunities Threats

Customers - Home-cooked - Country setting

- Competition in cities/towns, where customers don’t have to drive

Competition - Not many restaurants in area- Meath Park restaurant (with full

menu) currently for sale-large opportunity if it does not sell & shuts down

- Café in Albertville (14 kms from Pickin’ Patch)

- Large threat if Meath Park restaurant is sold & operational prior to café opening

Market Trends

- Healthy eating choices-no deep-fried foods-fresh fruit from the farm

- Low population in direct area - Café promotes dessert menu

items, which are higher calorie


The MarketThe Market

Prince Albert’s population = Prince Albert’s population = 34,14034,140

Candle Lake’s population = 792Candle Lake’s population = 792

R.M. of Garden RiverR.M. of Garden River = 633 = 633


CompetitionCompetition

Mapletrees Restaurant – Mapletrees Restaurant – Prince AlbertPrince Albert

Rosewood Grille – Rosewood Grille – Prince AlbertPrince Albert

Waters Edge Restaurant & Lounge Waters Edge Restaurant & Lounge – – Candle LakeCandle Lake

Candle Castle Restaurant – Candle Castle Restaurant – Candle Candle LakeLake

Rails – Rails – Meath ParkMeath Park

Country Coffee - Country Coffee - AlbertvilleAlbertville


Sales ObjectivesSales Objectives

To gain customer loyalty by serving To gain customer loyalty by serving approximately 17,724 customers per yearapproximately 17,724 customers per year

Suppers = 44% of sales profit Suppers = 44% of sales profit

Desserts = 34% of sales profitDesserts = 34% of sales profit

Lunches = 22 % of sales profitLunches = 22 % of sales profit


Marketing Plan BudgetMarketing Plan Budget

Highway signs (5 signs at $520) 2,600$ Chartered Accountant fee 1,500$ Lawyer Fee 2,400$ Food Safe Course 300$ Travel expenses 116$ Newspaper advertisements 1,968$ Pamphlets 1,200$ Web site 1,199$ Total Marketing Expenses 11,283$


Financial PlanFinancial Plan


Capital Budget Capital Budget SummarySummary

Working Capital

Accounts Recievable 1,452$ Inventories 1,398$ Accounts Payable ($25,127)

Net Working Capital ($22,277)


Administration & Administration & General Marketing General Marketing

ExpensesExpensesAdministration Expenses

Management Salary 43,560$ Total Administration Expenses 43,560$

Marketing expensesHighway signs (5 signs at $520) 2,600$ Chartered Accountant fee 1,500$ Lawyer Fee 2,400$ Food Safe Course 300$ Travel expenses 116$ Newspaper advertisements 1,968$ Pamphlets 1,200$ Web site 1,199$ Total Marketing Expenses 11,283$

Total administration and marketing expenses 54,843$


Manufacturing Manufacturing OverheadOverhead

Fixed and Variable Manufacturing Overhead

DepreciationBuilding @ 10% 4,437$ Computer Equipment @ 30% 375$ Office Equipment Depreciation @ 20% 386$ Restaurant Equipment @ 20% and 100% 3,152$

Total Depreciation 8,350$ Maintentance and Utilities

Repairs @ 1.5% of building cost 1,200$ Water/sewer @ $100/month 1,200$ Power @ 225/month 2,700$ Telephone @ $150/month 1,800$ Internet @ $54/month 648$ Property Taxes (18.2 Mill Rate) 1,159$ Insurance (2% of build.& equip.cost) 2,040$

Total Manufacturing Overhead 19,097$


Cost of Goods Cost of Goods ManufacturedManufactured

Cost of Goods Manufactured

Total Direct Materials 37,157$ Total Direct Labour 49,245$ Total Manufacturing Overhead 19,097$

Total Cost of Good Manufactured 105,499$


Cost of Goods SoldCost of Goods Sold

Cost of Goods Sold

Beginning Inventory 1,398$ Cost of Goods Manufactured 105,499$ Cost of Goods Available for Sale 106,898$ Ending Inventory -$

Cost of Goods Sold 106,898$


Cash Conversion CycleCash Conversion Cycle

CCC = -20CCC = -20

Raw Materials (7) + Average Collection Raw Materials (7) + Average Collection Period (3) – Accounts Payable (30)Period (3) – Accounts Payable (30)


Summary of Financial Summary of Financial ResultsResults

Year 2008 2009 2010 2011 2012Sales 176,634$ 183,770$ 191,194$ 198,919$ 206,955$ COGS 106,898$ 114,252$ 113,902$ 115,236$ 116,906$ Gross Margin 69,736$ 69,518$ 77,292$ 83,682$ 90,048$ Expenses 54,843$ 50,617$ 51,629$ 52,662$ 53,715$ Net Income Before Tax 14,893$ 18,901$ 25,663$ 31,020$ 36,333$ Income Tax 1,489$ 1,890$ 2,566$ 3,102$ 3,633$ Net Income After Tax 13,404$ 17,011$ 23,097$ 27,918$ 32,700$ Net Cash Flow to Equity 19,400$ 31,935$ 34,899$ 38,195$ 41,698$

Year 2013 2014 2015 2016 2017Sales 215,316$ 224,015$ 233,065$ 242,481$ 252,277$ COGS 118,870$ 121,095$ 123,555$ 126,232$ 129,110$ Gross Margin 96,446$ 102,920$ 109,510$ 116,249$ 123,167$ Expenses 54,789$ 55,885$ 57,003$ 58,143$ 59,306$ Net Income Before Tax 41,656$ 47,035$ 52,507$ 58,106$ 63,861$ Income Tax 4,166$ 4,703$ 5,251$ 5,811$ 6,386$ Net Income After Tax 37,491$ 42,331$ 47,256$ 52,296$ 57,475$ Net Cash Flow to Equity 45,409$ 49,335$ 53,481$ 57,854$ 62,462$

Net Present Value (NPV)Internal Rate of Return on Equity Investment

$59,06632.7%


Sensitivity AnalysisSensitivity Analysis

Critical Value Base Value IRR = 0% Allowable % ChangeQuantity of Sales:

Dessert 8,752 7,352 (-)16%Lunch 3,842 3,227 (-)16%

Supper 5,130 4,309 (-)16%Selling Price:

Dessert 7.00$ 5.88$ (-)16%Lunch 10.00$ 8.40$ (-)16%

Supper 15.00$ 12.60$ (-)16%Direct Materials:

Groceries 33,557 59,060 (+)76%Interac 3,600 6,336 (+)76%

Wages 11.22$ 18.29$ (+)70%Salaries 40,000$ 68,000$ (+)70%


Best & Worse Case Best & Worse Case ScenarioScenario

Variable Worst Case Base Case Best CaseNumber of Sales 16,128 17,724 19,320

Average Price 9.71$ 10.67$ 11.63$ NPV (72,668)$ 59,066$ 201,254$ IRR 2.5% 32.7% 61.5%


Break-Even AnalysisBreak-Even Analysis

Break-Even Analysis

60.00%

70.00%

80.00%

90.00%

100.00%

110.00%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Year

Qu

an

tity

of

Sa

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(%

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)

Base

Economic

Net Income

Cash Flow


Financial ConclusionFinancial Conclusion

A financially viable businessA financially viable business Very strong IRRVery strong IRR $100,000 Initial Investment$100,000 Initial Investment + Net Present Value+ Net Present Value +Net Cash Flow Each Year+Net Cash Flow Each Year


Questions???Questions???

AgEc 495 College of Agriculture & Bioresources University of Sasaktchewan Café Tanya Gleim Leah Fullerton Kyle Mackow Michael Yeager.

Documents

hour slide

servers slide

sales profit slide

higher calorie slide

restaurant industry

candle lakes population

sales profit suppers

sales profit desserts