Executive Summary

The purpose of this business plan is to provide a comprehensive description of HomeBake Recipes and how to outgrow the business. Home Bake Recipes is an ongoing business that offers wide selections of bakeries and local traditional cuisines. This family business has been in the market for 20 years, they cater in big scale for different occasions and special events The main objective of this proposal is to expand this business using strong marketing tools and merge into the industry with a competitive advantage by using differentiation-based strategy. The plan is to expand this business as a family business by outgrowing its distribution and enter the industry as a premium product and engrave a good brand impression.

Company description

Home-bake recipe is a home based business established by two partners operating from their home through internet. Home-bake recipe was founded by a couple named Sunny and Mary and started it as a family business. Home bake recipe had already been a success and they have gained a good portion of loyal customers. They gain their demand from the quality of their cakes, pies and other savouries. Home bake recipes have a lot of products that they offer, products ranging from cakes to pies and simple meals at reasonable prices. The unique taste of their cakes is what captured the attention of the already existing customers. They usually take big orders for different occasions and special events. Their catering services are charged depending on the location of the delivery not less than 10rm. The business is operated more on a big scale rather in small quantity. As for now the business is home-based and cannot be reached if not for internet. To make it reachable to the mass market, to give them the taste of their good quality cakes, the business plan is to expand the business through outlets. The main purpose of the outlet is to expand its distribution channel as well as to promote their brand name in order to gain a good market share in the industry

Missions and objectives

Vision The vision of this plan is to increase the distribution channels where the customers are within close reach to the Home-bake recipe products to grow its market share.

Mission statement With a very consumer attractive marketing philosophy Home-bake recipes slogan is: We make quality home-baked cakes because you deserve more than an ordinary cake

Unique Features: The owners of Home Bake Recipes, Sunny & Marry draws on years of industry-specific experience for their solid knowledge of the world of bakeries, as well as the people who consume them. Therefore, its nature distinguishes itself in this manner by putting the needs of customers first. Quality: Quality is the main focus of the business. As the already existing home based business had gained demand through the quality of the offerings our main target is to sustain the good quality to merge into the lifestyle cafe industry. Dedication: As this business had started as a family business, the plan is to expand it as a family business. This will enhance the founders interest to take risks to reach their desirable goals and corporate with the management team to seize their opportunities with full dedication to maintain the quality. Concept: By differentiating its products from its direct competitors, the whole concept of the plan is to hold the competitive advantage while providing a customer friendly outlet.

Result oriented: With an effective management structure the outlets are to increase in numbers as well as sustaining the good quality by good performance management and customer feedback. Marketing Objectives: Home bake Recipes set its marketing objective to increase the efficiency of distributing its products and services to increase and maintain demand in the industry. A highly visible location coupled with gala grand opening will yield substantial "off-the-shelf" sales by increasing word-of-mouth advertising and foot traffic. Expected Accomplishment: The objective of this plan is to break even within the first year upon starting the first outlet and to invest on other outlets in the following years

Industry Analysis

Analysis of business environment Bangsar is one of Kuala Lumpur's most popular nighttime entertainment districts. The streets of Bangsar, mainly in Telawi and Maarof, are littered with night clubs, pubs and bistros, making it one party area during the weekends. Bangsar is also a large residential area (mainly for the affluent) but residents have grown accustomed to the hive of activity that Bangsar generates during the night. As Bangsar is home to many of Kuala Lumpur's rich crust of society and expatriates, there are many fine dining and international restaurants located around the shopping areas.(Bangsar Area Guide 2010) From previous illustration based on what is happening in Bangsar, there is an opportunity for Home-bake recipes to expand its business, most of them are focusing on entertainment and highly desirable beverages with expensive price, in this part of the market Home-bake recipes can use differentiation-based strategy which provide a friendly place for people to relax, have a seat and enjoy a tasty cake served with a good drink of that comes with a reasonable price. Setting up a reasonable price for the customers is one of the strength for home bake recipe to compete in Bangsar, with the experiences in effectiveness on producing the product it will be easier for Homebake recipes to penetrate into this market. Future Trends When people have a meal or look for the entertainment there is a limitation of time, they dont take meal every time and most of the entertainment in Bangsar is at night. Home-bake recipes can take advantage from those limits; most people can enjoy cakes anytime they want even at night. By using this opportunity Home-bake recipes can create a trend for the customer, they can come anytime they want, dont have to wait until night or spent so much money for entertainment, this co uld be another option for the market or the people, it could be another competitive advantage that Home-bake recipes can achieve

Market Size When expanding existing businesses which already have their own market share, forecasting the size and foreseeing how much more customers Home bake will reach is important. Knowing their cultures and understand the consumer behavior on making decision are vital for the business, what they usually buy in Bangsar, what kind of cakes that people mostly like, those simple thing can be the companys consideration for making new products and services. After learning the environment it is necessary to look out the market size and segmentation of the population. Here is the information taken from ABC Kuala Lumpur 2010:

Population of Kuala Lumpur - Approximately 1.8 Million

Foreign residents - 9% People Below 15 Years - 27% People Below 15 - 59 Years - 67% People above 59 Years - 6%

Looking at the information above, average consumers that goes to restaurants for cakes and meals mostly is about 70% (8% of foreign residents, 20% of below 15, 40% in between and may be 2% of people above 59 years) of the population in Kuala Lumpur. As we know that Bangsar is a popular place for food in Kuala Lumpur there is no doubt that Home bake recipes can gain at least 0.50% of the total population that go to Bangsar, it means our expectation market share for starting the outlet business is about 5,000 people. Demographic Changes The location of Bangsar is a strategic place to start with, its development shows a high expectation of profit and bigger chances to expand a business compared to the business districts like Bukit Bintang or Ampang which already become one of the centre of Kuala Lumpur with competition.
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On (Bangsar Review 2010) there is some information on the development in Bangsar, which is Most of the mid-range to high-class dining outlets are located within the shopping complexes, Telawi Street and along Jalan Maarof. From these restaurants, one can find an endless array of cuisine from around the world as well as local favourites such as Chinese, Indian and Malay food. The restaurants attract many Caucasian expatriates who live in Bangsar.

Competitor Analysis Alexis Bistro Uber-cool and uber-trendy, Alexis Bistro features Asian and Western fusion delights in a super-chic environment. Complemented by an extensive wine list, its dishes are ultramodern takes on classic favourites, and their presentations are often unique and inspired. The bistro also features live jazz from local and international artistes. (Bangsar restaurant and dining 2010) One of the restaurant in Bangsar that provides cakes, it is indirect competitor and they have different market segment. Secret Recipe Their popular cake are chocolate cakes and cheese cakes, it also provide local, western and Italian food. The price is higher than standard but they already have trust and brand image in the market. It is included in direct competitor, they have similar products compare to Home-bake recipes and they are also focusing on mass market. Starbucks coffee Well-known company with strong network and highly competitive in the market, they specialized in making coffees but they also provide cakes. They can be direct competitor in term of the business concept which provide friendly environment and place for relax but totally different in setting the product prices. Starbucks coffee has high expectation in the market because they are international company, in this part they classified to indirect competitor.
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Product and Services

Services plan

A company like Home-bake recipes which is currently based on internet market focuses their services only on delivering the products at the right time and place, when business goes beyond that means its spreading the market share using outlets the business need some spending on training the workers, find the right way to serve the customer and creating new buying experiences to gain the competitive advantage.

One of the ways to do that is by providing a consultant or an event organizer to add extra value for the customer, Home-bake recipe can come up with a package of their products and include the service to manage occasional events or it can be a private consultation to solve customer problems in housing a party, manage a birthday party, choosing the right food for the wedding ceremony, etc.

Product Plan

The concept of the business plan is expanding home bake recipes by opening an outlet by its brand name Home-bake recipe to introduce the products and increase distribution channels, the outlet itself has its own style in structural design which create an atmosphere of a lifestyle caf to build strong competitive advantage for the business. There are some adaptations for Home-bake recipe for its product to match with the new concept, changing the scale or size of the products, provides new attractive menus and also provides beverages as the complement for the cakes

HOME-BAKE-RECIPE

menu

Butter cakes with cream (small) RM7 200grams - German Chocolate, Moist Orange, Prune Cake, Mocha Praline, Moist chocolate 165grams -Almond Suji and Maryland Walnut Butter cakes without cream (small) RM6) Moist Orange and Prune Cake (187.5g) -Almond Suji, Butter Marble and Chocolate Nut (150g) Fresh Creams Cakes (small) RM7 Toffee Banana, Chocolate Banana, Fruit-Top Cake, Black Forest (200g) Orange Chiffon and Rocky Road (145g) Cheese Cakes (small) RM8.25 Chocolate Cheese, Marble Chocolate Cheese, Cappuccino Cheese, Chunky Peach, Frutti Cheese and Chiffon Cheese (150g)

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HOME-BAKE-RECIPE

menu

Tray Cakes (small )4RM Cashew Nut Brownie, Chocolate Macaroon, Nuts & raisins, Walnut Meringue, Lemon Squares and Sesame Banana Blueberry Cheese Tiramisu Loaf Cakes (1 set) Banana loaf Cheese Tea Loaf Carrot Sugar Free Pies (small size) Chicken Pie and Beef Pie Pumpkin Pie (100g) Apple Pie 2.50RM 4.00RM 2.00RM 12.0RM 20.0RM 20.0RM (150g, RM8.50) (125g, RM10)

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HOME-BAKE-RECIPE
Cup Cakes Cheese Cup Cake Cheese Cup Cake with raisins Chocolate Chip Muffins Pumpkin Cup Cake 1.80RM 2.00RM 2.00RM 1.80RM

menu

Other Varieties of Cakes (small size, 100g) Carrot Walnut with cheese cream Carrot Without cheese cream Orange Chiffon Slice Fruit Cake Cheese Tea Cake Yam Cake Pandan Layer (130g) 5.00RM 4.50RM 4.50RM 4.00RM 5.00RM 4.50RM 5.00RM

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HOME-BAKE-RECIPE

menu

New offers: outlet menu

y

Italian Food 15.0RM 15.0RM 15.0RM Western Food 15.0RM 15.0RM 15.0RM

Lasagna Pasta Risotto

y

Chicken Steak Burger Chicken Chop Beef steak

y

Beverages 5.00RM 5.00RM 5.00RM 5.00RM 5.00RM 2.00RM 2.00RM

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Fruit Juices Milk Shakes Bubble Teas Coffee Hot chocolate Teh tarik Ice milo

Marketing plan
Market segmentation strategies The bakery industry is a competitive industry to penetrate and stabilize as at a fast speed. Yet with the demand Home-bake recipe had established in the market the entry wont be a problem. As the industry is growing and the competition is strong, the need for this plan is to build a strong customer driven marketing strategy the market was segmented into demographic, psychographic and behavioural segmentation. Demographic segmentation is used to focus on the behaviour of the customers by their income level. Consumers hold their purchasing power with the amount of income they earn. However it is necessary to focus on the target groups income to determine the value home bake recipes offerings. Home-bake recipe plans to hold as a very good brand image after the style of its penetration into the industry by its first outlet. The lifestyle caf concept is used to attract a pool of customers very much driven by trends, social class and lifestyle or personality characters. So therefore this is psychographic segmentation. The customer decision making process and how consumers willingness to purchase increase and decrease is determined by the behavioural segmentation. For occasions and special events, the amount of money customers are willing to spend is more than an ordinary day. Also there is a usage status in the buyers where market can be segmented into light, medium and heavy product users, therefore this segment is studied to target the customers who deals with sweet tooth or emotional eaters.

Target customers

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Home-bake recipe main objective is to attract customers with the competitive edge in the quality of the cakes so the marketing strategy is to use the mix segmentation bases to identify smaller better identified target groups. Home-bake recipe already have loyal customers because of their quality in producing cakes and the current market is from online website, there is actually bigger market outside the internet scope. Here are new target customers that home bake recipes can gain from expanding its business by using concentrated marketing strategy: Students From middle school up to college students Workers middle paid to highly paid workers Cake lovers mass market (no limitation)

Marketing Mix Product y

Home-bake recipe provide distinguish tasting cake as their most competitive products. It is well known for the quality and therefore to differentiate its product from the rivalry secret recipe the plan is to change the old concept and approach with a pricing strategy to place it in the eyes of the customers.

Home-bake recipe already set menu which is available on www.homebakerecipe.com will be changed with a brand new set of varieties added to best fit the life style caf concept. The theme of this concept is to attract the strong pool of customers by adding value to our products and competition with the range of variety choice available to achieve a bigger market share.

With its well guarded homemade recipes Home-bake recipe offer 46 different variety choices of cakes categorised into 8 sections.

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Other products available from the outlet thats not on the current menu are three varieties of western three varieties of Italian food Beverages ranging from Bubble tea to Teh tarik and milk shakes. Home-bake recipes menu will gradually increase its products available with the demand from the business environment

Future products
y

Investing on the development of new products will take place once the market share is established and as the demand grows. With heavy foot traffic and the busy business environment the possibility of sustaining a good demand is foreseeable within one year of operating the outlet.

After operating the outlet half a fiscal year, Home bake recipe plans to target a new segment of the market to differentiate its offerings. The concern of health is growing all over the world. Home recipes plan is to develop new products to customers with health issues and self esteem issues. Therefore it plans to provide a variety choice of sugar free and trans free cakes in different flavours along with high fibre cheese cakes. This will attract a whole new pool of customers and likely to capture more attention in the bakery industry.

Distribution
y

Through the retail shop located in Bangsar Home bake recipes will distribute its products its products and it will also continue the old catering business for special events and occasions. Small bookings and orders of minimum two products will be made within 5km radius to the outlet.

Price
y

As the industry outgrows and expands its wings with more competition the price holds an important attribute to the purchasing power of the buyers. With Home bake recipes new concept, the good value pricing
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strategy is used is by offering the right combination of quality and good service.
y

Home bake recipes prices are flexible and will be determined by a new approach as it changes its scale of quantity sold to the value of one product. In this proposal Home-bake recipe highlights its flexibility in pricing because home bake recipes already set pricing strategies had been on volume discounts, whole sale pricing and seasonal pricing.

Promotion
y

Home bake recipe will conduct a promotional event to introduce the brand a week before the outlet starts. Here home bake recipe plans to give away free sample of cakes to give a hint of its good taste to attract customers so they will come back for it

This event will be held in front of the home bake recipe premises with a marketing concept of a product awareness programme.

Flyers to be distributed in the Bangsar Village, Help University College and PBD.

The catering services for occasions and special events will be delivered more professionally with consultation services.

Special promotional packages will be made for different occasions such as moon cake festival, deepa wali and haree raya. Attracting customers of different cultures to Home bake recipes offerings

Place
y

Home bake recipes outlet will be located in the most hectic area of Bangsar. Situated on the busy road of Jalan maarof, Home bake recipe estimates a strong force of demand to grow because of its location.

The location would be shown with the map on Homebake recipes site

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Operation and development

Location A good strategic location is very important when expanding the business through an outlet. As Home bake recipe is located in Bangsar which is a very fast business environment it will drive a lot of customers into this outlet. The floor area of our location is 1500 sq.ft which will be designed to hold a back kitchen and the customer lounge.

Operational hours
y

The operational hours of this outlet is from Sunday Thursday 10am to 10pm

y y

The operational hours will be longer on Saturdays 10 am to 12 am. Home bake recipes staff would be required to come in 1 hr before the operation hours for necessary preparation

Operation
y y y y

Mary as the executive chef Two fulltime chefs for baking and pastries. Hire a chef to assist the main chef and cook simple meals 1 full time staff , Diploma or with a hospitality and management background
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y y y

The staffs operate on shifts (night and day) Hire part time staff when full time staffs take leave Sunny(one of the founder) will manage to the daily sales, inventory management and marketing.

Full time waitresses will be assigned to deal directly with the customers.

Supplier
y

Raw materials are provided by the suppliers who has dealt with Sunny and Mary since this business started

Get discount when bought in large quantities as it will be because Home bake recipes would need raw materials in larger bunk with the opening of this outlet

y y

Quality control 30 days credit term

Equipment
y

The furnitures (chairs,tables and other cupboards built in the kitchen) will cost around 25,000 with the settings of the interior to emphasize on its brand

y y

The equipment and the stationary will cost 20,000 rm for the start up The renovation will cost 40,000.

Training

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Training and development of the some staffs before the outlet opens. To give them a brief overview of the business Sunny is to train them to do their skills according to the goals of this Business plan

Mary would train the main chef and the assistance chef to hold and sustain the good quality of their products and learn about the measurements of ingredients of raw material to use in order to hold the richness of their products.

The full time waitresses attending the customers will be well trained on how to deal with customers and how to pass a desirable message to the customers with good service

The full time employee handling the counter and taking orders will be trained on the efficacy in dealing with customers in demand to satisfy its customers to the fullest. The waitresses will be trained to take shifts in doing this job and to rotate the shifts between the 4 full time staffs working in the outlet.

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Management Team
Sunny & Marry are the founders of Home-bake Recipes. This married couple had drawn 20 years in this industry. Both of the owners will handle the accounts, the purchase of raw materials from suppliers. They had decided to train people to manufacture the bakeries. Upon opening an outlet in Bangsar, they had come out with a personnel Plan. Personnel Plan Home-bake recipe would like to hire one person for counter help, one person for delivery services (Driver) and two other assistant bakers and an assistant chef along with 3 waitresses to attend customers.

The table below illustrates the need of the current employees: Position:
Marry - Head Baker New Apprentice baker Full time New Apprentice baker Full time New Apprentice chef Full time Counter Help - Full time Waitress Full time Waitress Full time Waitress Part time Delivery driver - Full time

YEAR of 2010 RM0.00 RM18,000 RM18,000 RM18,000 RM12,000 RM12,000 RM12,000 RM5,000 RM18,000 21

Sunny - Bookkeeper Total people Total Payroll

RM0.00 10 RM113,000

Risk
Description of the risk Every business faces risks in today's perpetually changing economy and market environment, and Home bake Recipes will be no exception. The first identifiable area of risk for Homebake Recipes will be its competition. Seven competitors have been in the Bangsar market for a long time and are already well established. Other companies are expected to launch swift responses to Home-bake recipe entry into the Bangsar market in the form of price competition and more aggressive marketing.

The second identifiable element of risks for Home bake Recipes will be the high fixed prices it will incur for start up. Bangsar facility itself will be expensive, and anticipated expansion costs will be substantial, including advertising and promotional costs, and special low prices. This also leads to the third area of concern for Home bake Recipes - Cash flow shortages. Realizing substantial startup expenses and low initial revenues will make Home-bake recipe a cash-poor enterprise within the first few months of opening a retail shop in Bangsar. Larger competitors may seek to take advantage of this under-funding by increasing advertising expenditures and by slashing prices.

Contingency Plan

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As with other successful businesses, Home-bake recipe has plans of action in place to counter any of the mentioned problems. Competition will be challenging, but alternate plans are in place to face those challenges.

Competitors seeking to responds to the entry of Sunny & Marry into the market will face strong opposition. First, this couples years of experience in this industry will come in handy when facing strong competition, Sunny & Marry have the audacity to charm customers with their friendly and humble personalities, building customer relations is very important in the beginning of the business, and Sunny & Marry had their best at building it. Secondly, Sunny & Marry had great relationship with their suppliers for raw materials, supplier will always give them the best deal, therefore, and the cost of bakeries will be at lowest possible, competing in price wouldn't be a problem for the first few months. Finally, Home-bake recipe will provide access to Sunny & Marry, the owner, to assure customers that if anything do go wrong, there will be someone available who can immediately correct the problem.

Home-bake recipe recognizes that expenses will be high during its initial months of operation in Bangsar, but is extremely confident that a quick entrenchment in Bangsar market will yield a fast build up revenues. Looking to the long-term, both market research and financial projection support the belief Sunny & Marry has the quick, powerful entry into the market is a most successful and necessary strategy for long-term profitability. Finally, Sunny & Marry has contingency arrangements for potential cash-flow problems. Should sufficient investors fail to become available from his business plan, Home-bake recipe has secured a line of credit at local bank on the personal reserves and good name of Sunny & Marry.

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Financial Structure

Sources and Uses of Capital

In order for Home bake Recipes to successfully commence operations, RM223, 480 in start-up funding will be required. The owner will contribute RM100, 000 of his own money and require financing for RM400, 000 from a lender.

Start-up Costs Furniture & Fitting Renovation Kitchen Equipment Total Capital Expenses Business License Grand Opening Advertising Rental (Deposit) Total Deposit & Prepayments Startup Costs Equity Capital Long-term Liabilities Long-term loan Total Equity and Liabilities Calculation of Working Capital
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RM 50,000 90,000 55,000 195,000 3,480 10,000 15,000 28,480 223,480 RM 100,000 400,000 500,000

Total Equity and Liabilities (-) Startup Costs Working Capital

500,000 (223,480) 276,520

Break Even Analysis Home Bake Recipes Break-Even analysis assumes that its average per-unit revenue is RM4.00. Its lowest price for any good would be RM2.50 (Brownie,the tarik and ice milo) and Highest would be RM7.50 (Laksa), so RM4.50 is a fair estimate of the average per-unit revenue. The running costs of production are fairly low since Home Bake Recipes manufacture all their bakeries and cuisines at a low cost. Here are the items included in the average per-unit variable cost:
y y y y
y

Manufacturing ingredients, i.e. flour, sugar, yeast, butter, eggs Payroll Rental Utilities Advertising Year 1

Expenses: Wages payable Advertising Rent Depreciation Utilities Tel Bll Interest Expenses

113,000 8,000 40,000 36,000 4,000 3,600 12,000

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Insurance EPF 12% Total Fix Cost Gross Margin %

12,000 13,560 242,160 72% 336,333

Breakeven Value

Projected Cash Flow ( year 1) Quarter Q1 Beginning Cash 276,520 Balance Cash Inflows (Income) Cash Sales 113,597 Available Cash 390,117 Balance Cash Outflows (Expenses) Salaries and wages 28,250 EPF 3,390 Advertising 2,000 Rent 10,000 Utilities 1,000 Telephone bill 300 Insurance 3,000 Miscellaneous 600 Loan payment 7,500 Interest payment 3,000 Taxes 6,047 Maintenance and 1,200 repairs Total Cash Outflows 66,287 Ending Cash Balance 323,830 Q2 323,830 Q3 443,637 Q4 661,562

202,278 526,108

319,242 762,879

337,054 998,616

28,250 3,390 2,000 10,000 1,000 300 3,000 600 7,500 3,000 22,231 1,200 82,471 443,637

28,250 3,390 2,000 10,000 1,000 300 3,000 600 7,500 3,000 41,077 1,200 101,317 661,562

28,250 3,390 2,000 10,000 1,000 300 3,000 600 7,500 3,000 45,984 1,200 106,224 892,392

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Projected Balance Sheet (year 1) Opening Balance Fixed Assets Furniture & Fixture Kitchen Equipment Renovations Total Fixed Assets Current Assets Cash at Bank Prepayments Total Current Assets Total Assets Equity Capital Retained Earning Retained Earning b/f 50,000 90,000 55,000 195,000 Year 1 40,000 72,000 44,000 156,000

276,520 28,480 305,000 500,000

892,392 28,480 920,872 1,076,872

100,000 100,000

100,000 346,015 446,015

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Conclusion

Home-bake recipes will provide its customers with wide range of bakeries as well as traditional local cuisines available in its shop as well as for delivery. Shelf bakeries will include everything from its menu, from cakes to brownies. Quantity of bakeries will be focus on demands of public consuming habits, with priority given to those bakeries that most popular to be sold. The owners themselves will record the popularity of each individual product time to time for quantity of producing them, to ensure business obtaining healthy cost and sales. Home-Bake recipe plans to services its existing customers, which will comprise most of its regular sales. These customers will be its loyal customers who majority made up of healthy household who will buy cakes from Home-Bake recipes due to selections of natural ingredients as raw materials, worry-free bakeries. Home-bake recipes already established business needs to expand its distributing channels. With this plan Home-bake recipe determines the feasibility of this project with the capital of 500,000rm and a start up cost of 223,480rm. So with a very high start up cost Home-baked recipe is ready to engrave its brand imagine and penetrate into the market with full force for competition. Using efficient cost management and utilizing strategies, Home-base recipe is a feasible project.

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References

Books
  Philip Kotler, Gary Armstrong,12th edition, principles of marketing Longenecker, Moore, Petty, Palich,1st edition, Small Businesses Management(an entrepreneurial emphasis)

Websites
  


http://abckualalumpur.com/info_guide/kl_people.htm http://www.homebakerecipe.com/ http://www.kuala-lumpur.ws/klareas/bangsar-review.htm

http://www.kuala-lumpur.ws/food-dining/bangsar.htm

 

http://www.virtualrestaurant.com/sample.htm http://www.bplans.com/coffee_shop_business_plan/market_analysis_s ummary_fc.cfm#4.1_Market_Segmentation http://en.wikipedia.org/wiki/Break_even_analysis

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