Letter of Transmittal

14 July, 2010.

Mr. Faisal Dhedhi

IQRA University

Respected Sir,

3
Here is the Business Plan on the Software House namely “N S” that you had authorized
and is ready for your perusal.

This report highlights the difference of this Bakery to the rest and of course states its pros
and cons.

We are immensely thankful to you- for your kind support, generous contributions, that
encourages your humble students to do better.

Sincerely,

Vajita Kumar
Saima Hyder
Sana Sarfaraz

1
 Table of Contents

S. No Contents Pg. No
1. Executive Summary 2
2. Introduction 3
3. Target Market 3
4. The Company 3
5. Product & Services 3
6 Mission 4
7 Key to success 4
8 Company Summary 4
9 Company Ownership 4
10 Products 5
11 SWOT Analysis 5
12 Financial Consideration 6
13 Start-up Expenses 7
14 Balance Sheet In Start 8
15 Sales Strategy 9
16 Strategy & Implementation Summary 9
17 Competitive Edge 9
18 Salary & Fixed Expenses 10
19 3 years Sales Forecast 11
20 Product Pricing 12
21 Profit & Loss 13
22 Balance Sheet 14
23 Conclusion 15

2
Executive Summary
This business plan gives an overview of a bakery business. This bakery will be run by
three partners that would be investing equally in the business, hence sharing profit
accordingly.
The bakery is located in Sindhi Muslim society (round about), offering various bakery
products made from high quality ingredients. Due to mild competitive climate the
business seems to be running from the very first month of opening.
Each partner will be paid of in 14 months time through monthly salary as well as profit
share.

3
Introduction

Baker’s Secret (BS) is a start-up bakery retail establishment located at main Sindhi
Muslim Society in Karachi. BS expects to catch the interest of a regular loyal customer
base with its broad variety of bakery products. The company plans to build a strong
market position in the town, due to the mild competitive climate in the area.

Target Market

BS aims to offer its products at a competitive price to meet the demand of the middle-to
higher-income local market area & residents

The Company

BS is incorporated in the state of Karachi. It is equally owned and managed by its three
partners.
All Three have invested in the business equally & will be sharing profit accordingly.
The company intends to hire one full-time Head baker and one Junior baker in the first
year.

Products and Services

BS offers a broad range of Bakery products, all from high quality food ingredients.

The bakery provides freshly prepared bakery products at all times during business
operations. Two to three moderate batches of bakery products are prepared during the
day to assure fresh baked goods are always available.

4
Mission

BS aims to offer high quality bakery products at a competitive price to meet the demand
of the middle- to higher-income local market area residents and tourists.

Keys to Success

Keys to success for BS will include:

1. Providing the highest quality product

2. Competitive pricing.

Company Summary

BS is a bakery launched by three partners. The partners will provide funding from their
own savings, which will cover all expenses required and provide a financial cushion for
the start up The Company plans to build a strong market position in the town, due to mild
competitive climate in the area.

Company Ownership

BS is incorporated in the state of Karachi. It is equally owned by its three partners.

5
Products

BS offers a broad range of Cakes and pastry products, all from high quality Ingredients.
Our main products include:

• Cakes (Plain)
• Cakes (Fancy)
• Patties
• Pizzas
• Doughnuts
• Casseroles

SWOT ALALYSIS

Strengths
The bakery has a good commercial location.

• The price of the bakery products and the quality is good.

• Less competition in surrounding

• Excellent Ambience

Weaknesses
• no marketing instruments are being used.

• No Expertise in the business

Opportunities

• Branch Expansion within citiy & outside

• Re- Develop & launch new Bakery Products

6
 • Expand into a coffee shop

Threats

• New bakeries in the locality.

• Already established bakeries in the area

• Additional taxes from government in future.

• Bakery products on no sale are complete waste of ingredients.

(High Risk for new sellers)

Financial Considerations

BS expects to raise Rs. 900,000 of its own capital,. This provides the bulk of the current
financing required.

BS anticipates sales of about Rs. 1,825,000 in the first year, Rs.3, 832,500 in the second
year, and Rs.6, 205,000 in the third year of the plan.

Total Sales
2009 2010 2011

6,205,000.00

3,832,500.00

1,825,000.00

2009 2010 2011

7
 Product Sales by Year
3,000,000.00
2,500,000.00
2,000,000.00
1,500,000.00
1,000,000.00
500,000.00
-
Cakes (Fancy
Cakes (Plain) Patties Pizzas Dounuts Casseroles
Cakes)
2009 547,500.00 730,000.00 109,500.00 146,000.00 109,500.00 182,500.00
2010 1,095,000.00 1,642,500.00 219,000.00 273,750.00 273,750.00 328,500.00
2011 1,660,750.00 2,737,500.00 365,000.00 438,000.00 492,750.00 511,000.00

Start-up Expenses

Legal (Food Department) 14,400 @1200*12

Office Supplies 20,000
Start up Inventory 43,600
Packaging (Boxes & Paper Envelops) 12,000
Insurance 50,000
Rent 20,000
Design & Construction 200,000
Equipment 300,000
Dishes, silverware, glassware, etc 35,000
Total Start-up Expenses 695,000

Start-up Assets
Cash Required 205,000
Start-up Inventory -
Other Current Assets -
Long-term Assets -
Total Assets 205,000

Total Requirements 900,000

8
Start-up Funding
Start-up Expenses to Fund 695,000
Start-up Assets to Fund 205,000
Total Funding Required 900,000

9
Assets
Non-cash Assets from Start-up -
Cash Balance on Starting Date 205,000
Total Assets 205,000

Liabilities and Capital

Liabilities
Current Borrowing -
Long-term Liabilities -
Accounts Payable -
Other Current Liabilities (interest-free) -
Total Liabilities -

Capital
Planned Investment
Investor 1 300,000
Investor 2 300,000
Investor 3 300,000
Other -
Start-up (Start-up Expenses) (695,000)
Cash In Hand (205,000)
Total Funding 900,000

10
Strategy and Implementation Summary

BS will succeed by offering consumers high quality Cakes and bakery products at a
competitive price.

Competitive Edge

BS competitive edge is the relatively low level of competition in the local area.

Sales Strategy:
{Company growth & performance for coming three years}

As the chart and table show, BS anticipates sales of about 1,825,000/- in the first year,
3,832,500 in the second year, and 6,205,000 in the third year of the plan.

Company Performance
Sales Gross Margin Net Prof it

6,205,000.00

3,832,500.00 4,316,672.00

1,825,000.00 2,602,815.00
1,808,244.00
1,203,040.00 732,324.00
101,673.00

2009 2010 2011

11
EXPENSES:

SALARIES EXPENSE:-
As the below table indicates each partner will be given salary in the first three years
2009,20010 & 2011 of amount Rs.15000,Rs.22000 & Rs.27000 respectively.
The only Head baker in the first year will be paid Rs.12000, in second year there will be
two bakers paid 15000 individually.
For junior bakers the salary would be Rs. 7000, Rs.8000 & Rs. 9000 in 1st, 2nd & 3rd year.

SALARY EXPENSE 2009 2010 2011

Partners 540,000 792,000 972,000
Head Baker 144,000 360,000 432,000
Junior Baker 84,000 192,000 216,000
Total People 5 7 7
Total Payroll 684,000 1,152,000 1,404,000

Fixed Cost:

Fixed Expenses 2009 2010 2011

Payroll 684,000. 1,152,000. 1,404,000.
00 00 00
Utilities 96,000.0 144,000. 180,000.
0 00 00
Insurance 50,000.0 50,000.0 50,000.0
0 0 0
Rent 240,000. 360,000. 480,000.
00 00 00
Total Fixed Expenses 1,070,000.00 1,706,000.00 2,114,000.00

12
3 Yrs Sales Forecast:

2009 2010 2011

Sales
Cakes (Plain) 547,500.00 1,095,000.00 1,660,750.00
Cakes (Fancy Cakes) 730,000.00 1,642,500.00 2,737,500.00
Patties 109,500.00 219,000.00 365,000.00
Pizzas 146,000.00 273,750.00 438,000.00
Doughnuts 109,500.00 273,750.00 492,750.00
Cass Rolls 182,500.00 328,500.00 511,000.00
Total Sales 1,825,000.00
3,832,500.00 6,205,000.00
Direct Cost of Sales
2009 2010 2011
Cakes (Plain) 191,625.00 361,350.00 514,833.00
Percentage cost on 35% 33% 31%
sales
Cakes (Fancy ) 240,900.00 509,175.00 821,250.00
Percentage cost on 33% 31% 30%
sales
Patties 37,230.00 72,270.00 109,500.00
Percentage cost on 34% 33% 30%
sales
Pizzas 48,180.00 84,862.50 131,400.00
Percentage cost on 33% 31% 30%
sales
Doughnuts 38,325.00 90,337.50 147,825.00
Percentage cost on 35% 33% 30%
sales
Cass Rolls 65,700.00 111,690.00 163,520.00
Percentage cost on 36% 34% 32%
sales
Subtotal Direct Cost 621,960.00 1,229,685.00 1,888,328.00
of Sales

13
Product Pricing for 3yrs:

Unit Prices
2009 2010 2011
Cakes (Plain) 100.00 120.00 130.00
Cakes (Fancy Cakes) 200.00 225.00 250.00
Patties 15.00 20.00 25.00
Pizzas 20.00 25.00 30.00
Doughnuts 20.00 25.00 30.00
Casseroles 25.00 30.00 35.00

Quantity
2009 2010 2011
Cakes (Plain) 15.00 25.00 35.00
Cakes (Fancy Cakes) 10.00 20.00 30.00
Patties 20.00 30.00 40.00
Pizzas 20.00 30.00 40.00
Doughnuts 15.00 30.00 45.00
Cass Rolls 20.00 30.00 40.00

14
Profit & Loss:-

The following is a projected Profit & loss for BS

Bakers Secrets
Profit and Loss
2009 2010 2011
Sales 1,825,000. 3,832,500. 6,205,000.
00 00 00
Direct Costs of Goods 621,960. 1,229,685. 1,888,328.
00 00 00
Other Production Expenses - - -
Cost of Goods Sold 621,960. 1,229,685. 1,888,328.
00 00 00

Gross Margin 1,203,040.00 2,602,815.00 4,316,672.00

Gross Margin % 65.9 67.9 69.5
2 1 7

Expenses
Payroll 684,000. 1,152,000. 1,404,000.
00 00 00
Packaging (Boxes & Paper 12,00 25,000.0 50,000.0
Envelops) 0 0 0
Depreciation - - -
Utilities 96,000.0 144,000. 180,000.
0 00 00
Insurance 50,000.0 50,000.0 50,000.0
0 0 0
Rent 240,000. 360,000. 480,000.
00 00 00
Other - - -
------------ ------------ ------------
Total Operating Expenses 1,082,000. 1,731,000. 2,164,000.
00 00 00

Profit Before Interest and Taxes 121,040. 871,815. 2,152,672.

00 00 00
Taxes Incurred (19,367. (139,491. (344,428.0
00) 00) 0)

15
 Net Profit 101,673.0 732,324.0 1,808,244.00
0 0
Net Profit/Sales 5.5 19.1 29.1
7 1 4
Balance Sheet

The following is a projected Balance Sheet for BS

16
 FY 2009 FY 2010 FY 2011
Assets
Current Assets
Cash 205,000.00 800,907.00 2,000,360.00
Inventory 136,673.00 221,842.00 237,841.00
Other Current Assets - - -

Total Current Assets 341,673.00 1,022,749.00 2,238,201.00

Long-term Assets
Long-term Assets - - -
Accumulated Depreciation - - -

Total Long-term Assets - - -

Total Assets 341,673.00 1,022,749.00 2,238,201.00

Liabilities and Capital FY 2009 FY 2010 FY 2011

Current Liabilities
Accounts Payable 35,000.00 75,000.00 105,000.00
Current Borrowing - - -
Other Current Liabilities - - -

Subtotal Current Liabilities 35,000.00 75,000.00 105,000.00

Long-term Liabilities - - -

Total Liabilities 35,000.00 75,000.00 105,000.00

Paid-in Capital 900,000.00 900,000.00 900,000.00
Retained Earnings (695,000.00) (684,575.00) (575,043.00)
Earnings 101,673.00 732,324.00 1,808,244.00
Total Capital 306,673.00 947,749.00 2,133,201.00
Total Liabilities and Capital 341,673.00 1,022,749.00 2,238,201.00

Net Worth 101,673.00 732,324.00 1,808,244.00

CONCLUSION

17
Analysis of the project regarding opening a bakery showed us that it is a feasible project
and is a profitable business. The locality selected is in the heart of the city and there are
less bakeries in the locality therefore the sales would be higher.
Hence it can be concluded that the project ‘Baker’s Secret’ would be the profit
generating business and it will maintain its standard to serve the best quality bakery
products to its customers.

18