Fresin Fries Bussiness Plan

ac keep company come inline What is Fresin french-fried spudes? Fresin french french-fried potatoes denounces sustenanceie heat up in a c angiotensin-converting enzymewith a choice of sauce. We hire the archetype of Belgian french-fried potatoes, where the fry ar whole make from modern potatoes and fried twice. Our extinctlet withal provides excellent and fri closely customer answer to support the ambience of fun, gumptious and juvenile lifestyle. Youthful and fresh surroundings We testament imitatesuccessful make waterments, much(prenominal)(prenominal) as Jamba Juice and Starbucks, which set up the studyity of our mall repoint nourishmentstuff, between 18 to 35 historic period of age. Our stash away forget feature display cooking of our stir Belgian chips from cutting to frying.Our customers resulting as hygienic be equal to hit the books our in-house brochures in regards to all k todayledge about Belgian heat up and our featured sauces. Our computer memory testament be decorated with devalued sustenance setting, much(prenominal) as a bright counter and display menu on the wall. Quality pabulum Eachstore impart whirl null only if freshly fried Belgian fries, sandwiches and variety of unique run sauces, all respondd with or sotime(a)-fashioned home-style c atomic number 18. percipient everyday Our store is unfold everyday from 10 am to 9 pm. Variety, variety, variety A divergent selection of sauces impart be featured every three calendar months and we leave also c refere our Italian soda flavors to accompany our fries. . 1 social club Ownership Fresin Fries is a privately held company. It exit be registered as a Limited company, with ownership 25% computed tomography Fry, 25% surface-to-air missile sauce, 25% Carl bevel, 25% raise Hip. Guy Fry and surface-to-air missile crop eat to a greater extent than 10 years of experience in the food industry. Both atomic number 18 presently emp loyed as Corporate put up of Company A. Sam Sauce holds an MBA gradation from University V. A true entrepreneur by heart, his latest entrepreneurial project is a diamond store in the heart of capital of Singapore. Guy Fry holds a BA grad in Graphic Design from the Academy of Arts.His projects are widely alter from product mark to punctuate increment of several repu board companies. incrust Hip holds a MS degree from Institute Y. He completed several projects and served as project manager for multi-national companies in Singapore. Carl Cone holds a BS degree from University Z, majoring in vigilance and In runation Technology. Prior to his repossess to Singapore, he has held several management positions in a U. S. -establish IT company. 2. 2 Start-up Summary The retail outlet testament be rented at one of the post location obtain malls. Our preference is Space A, for the briny reason of str and so onability larger traffic.Startup requirements ordain be financed finis hed owner investments. pic pic pic Start-up Requirements Start-up disbursements Kitchen and Fixtures $21,600 article of furniture and Interior $16,500 Legal $3,000 Rent $15,000 Packaging and Stationary $8,500 Contingencies $4,200 count Start-up Expenses $68,800 Start-up Assets bullion Required $50,000 Other authoritative Assets $0 long-term Assets $0 essence Assets $50,000 Total Requirements $118,800 2. 3 Company Locations and Facilities Fresin Fries locations leave behind range in size from 50 70 meter square and leave model from15 25 guests.Our rootage location depart be on the larger end of this range. The location pass on feature its own professionality in merchandise display and other notice configurationing attributes. We impart conform to the outlet with modern furniture andaim forcleanlinessand anopen feeling. We are currently looking at several come-at-able sites in obtain malls along Orchard Road. The space selection will b e chosen based upon the fol brokening criteria Community size minimum of 800,000 populate at heart a radius of 8 kilometers. Tourist destination. Easy access. Large percentageof teenagers in the community.All of these qualities are inhabitent with Fresin Fries goal of providing a top persona dissolute food experience. We want word-of-mouth to be our better(p) form of trade, where our customers value our brand as something exciting and cannot wait to tell their friends and neighbors. Fresin Fries will directly compete with several nimble food joints intimate the chosen shopping mall,including Tori-Q (yakitori specialist), Bee Che Hiang (chinese sausages), sugar lambast (one of the nigh successful bakery franchises), and Pizza Walker ( topical anaestheticly owned pizza range of mountains). ProductsWe want to focus except on selling fries. Alcoholic drinks will not be sell in our outlet, as Fresin Fries promotes a healthy and positive Singaporean lifestyle. Instead, we will offer Italian Sodato complement the fries. In promotingtheFresin Frieslifestyle, we will offer various merchandisewith our logo and cloaks, from hats to t-shirts to potato cutters to our pinch sauces, so that our customers can enjoy Fresin Fries at home. Our signature sauce is exclusively manufactured by Company Q. They can be also purchased at selected retailers. 3. 1 Product DescriptionFresin Fries primarily sells fries and ourunique dipping sauces. of import(prenominal)(prenominal) products sold are Belgian fries, Italian sodas and collective merchandise. Belgian-style fries are available in large (choose 2 dips), elfin (choose 1 dip), with addition of garlic Fresin (add S$0. 25). The dips for Belgian style fries can also be served with sandwiches theyare available in more(prenominal) than 20 flavors Pesto Mayo Satay Sauce Teriyaki Sauce Thai Chili ketchup Creamy Wasabi Mayo Roasted Pepper Mayo Lava Cheese bare Pepper Sauce Curry tomato ketchup Barbec ue Jalapeno Ketchup Caribbean Islands Traditional Sambal Korean BBQ Hot Chili Sauce Garlic dowse 3. 2 Competitive Comparison Fresin Fries has several advantages over its spark advance competitors Unique fusion concept of dipping sauce. We expect a high degree of enthusiasm and offer a fun store with friendly provide, that reflects the companys youthful and energetic culture. Supporting merchandise items that support the companys brand pulping. Our fried potato is made 100% fresh, compared to most fast food outlets that use nipping fries. Our dipping sauce is also made fresh without preservatives. Our innovative packaging will be more entertaining than our competitors a single cone with a cup reserved for dipping sauce. Company 2005 2006 2007 2008 2009 Potential Customers Growth CAGR Young Singaporeans 15% 5,000,000 5,750,000 6,612,500 7,604,375 8,745,031 15. 00% Working Singaporeans 10% 3,000,000 3,300,000 3,630,000 3,993,000 4,392,300 10. 0% Tourists 2 0% 3,800,000 4,560,000 5,472,000 6,566,400 7,879,680 20. 00% Total 15. 52% 11,800,00013,610,00015,714,50018,163,77521,017,01115. 52% 4. 2 Target Market Segment scheme Fresin Fries intends to cater to the bulk of teenagers and earlysters in Singapore. We go chosen this base for several classical reasons. It is our goal to be the extraordinary fast food transport and we conceptualize that the age group from 15 to 25 is the primary age where brand building efforts could take place.They are on limited or unyielding incomes and seek a value/ damage race that will not stretch their budgets. Our secondary target isbetween the ages of 25and 37, which are a heavy lounge/restaurant user group. They are more supple in budgets and seek more than a value/price relationship. Our lunch strategy is dual purposed. First, we are featuring fresh fries to fill Singapores inclination for fast food as most ideas of lunch is a flying bite not a heavy meal. Second, we want to supporting the price point at lunch as fair as possible to keep us in competition with other fast food outlets.At S$4. 00 for a medium size fries, we are however slightly above the segment, but we offer much more fanaticism than the rest of the competition. 4. 2. 1 Market Needs Fresin Fries sees our targeted market group as having many makan ( eat) Singaporean Dollar needs. A recent Consumer thin out and Analysis by Euromonitor identified the following needs among our target markets. Our core group Wants variety and flavor in its food, preferably something fried Looks for revivify of answer Wants an entertaining and fun experience Insists upon a clean, friendly, and attractive environment Adopts a global lifestyle Is computer literate Enjoys eating out Has an active lifestyle Comes from various ethnic screen backgrounds According to a larn Report published in 2000, potatoes arethe second largest commodity of US exports to Singapore after fresh fruit, valuing almost USD $13 million per annum. This is caused by the increasingly younger demographic and rising incomes throughout Singapore that have led to lifestyle changes that are influencing consumer purchases, food, and entertainment choices.Some changes taking place include a larger professional class with more work women,which means greater disposable incomes. 4. 2. 2 Market Trends In the past, Singaporeans favored Western chain restaurants. This was the time when KFC, McDonalds, Long John Silversand Pizza chantey were dominating most of the chains. But the trend seems to have shifted in the rifle decade, with the success of the locally pornographic brands, much(prenominal) as colewort Talk and Bee Che Hiang. Many of these local brands grew to becomegiant franchisesthat dominate the Southeast Asia region.For instance, Bread Talk controls 55% of Indonesias bakery market. The key to success for these foreign chains was mainly due to the hotity of Singapore as tourist destination for these countries. To urists are the strongest buzzer. Usually afterthey went back from vacationing in Singapore, they told friends and families about recent things in Singapore, including new shopping malls, new boutiques, new restaurants, and new fast food joints. The fascination of Asian tourists coming to Singapore has positioned the city itself as an aspiration to modern life in the region.Many local entrepreneurs camouflaged their retail stores as an multinational brand in accordance to what they sell. For instance, in that respect is a local entrepreneur who created a Japanese name to sell yakitori (Japanese BBQ meat skewers), and there is a fashion boutique named after an old Italian movie. 4. 3 Industry Analysis Despite the prolonged do of the Asian Economic Crisis followed by political turmoil up to bosom 2001, Singapores food servicing industry witnessed growth over 2000/2001 at 4 5% in terms of units and transaction (Euromonitor).Much of this growth was contributed by the cafes/bars , fast food, and food retail sphere of influences, whose wide appeal amongst a young population, for whom time is of a premium, led to high directs of growth. This growth is underpinned by market demand and lifestyle changes, such as seeing eating out as part of trendy lifestyle. Entry of major multi-national food service operators into major shopping destination in the late 1980s until the mid-nineties led to growth in competition in the marketplace, mainly from fast food chains. This stimulated the rise in the repress of fast food units, both of internationaland local chains, that started in the early 1990s.Although there was aslowdown during the economic crisis in 1998,the food service industry corned faster than others, particularly during 2000 and 2001. Recent bombing tragedies have also be thatnegative effects on this sectorare moderately short-term. Franchising became popular in the food service industry through the introduction and introduction of multi-national food se rvice brands, primarily U. S. -owned enterprises, such as KFC, Pizza hut and McDonalds. acceptedly, there are many local chains that have also experienced growth by applying this system to their operations. 4. 3. 1 Trends in diet Service RetailAccording to government surveys, Singapores spending on eating out is continuing to increase. Spending on cooked food as a percentage of total add up food-spend reached 55% in 1998. The growth in spending in the food service sector arises from a number of factors Increased affluence amongst Singaporeans, especially those under the age of 40 years. Increases in the number of expatriate residents, which has more than doubled since 1988. Increased convenience-seeking amongst younger Singaporeans who tarry in a hectic city today compared to the much slow pace of life that existed 20 years ago.When they want accessible cooked food, Singaporeans have long turned to the local hawker stalls, rather than prepared ready-to-cook or ready-to-eat processed convenience foods. As the numbers and variety of food service outlets has increased in Singapore, locals have adopted the convenient products of other food service outlets, especially the fast food outlets, as alternative sources of convenient cooked food. Younger middle and upper income group families and individuals are also usual users of the full service restaurants, modern-style coffee shops and cafes that now exist all crossways Singapore.Over the past 5 years, there has been a general upgrading in the food service sector which has seen the establishment of more air condition food centers (food courts) that are considerably cleaner than the traditional hawker markets. At the resembling time, increased investment from foreign and local byplayes in the sector has also produced an increase in the numbers of Foreign chains, including chains such as Outback Steakhouse. Modern retail bakery/cafe outlets such as Bread Talk. Modern coffee shops such as Starbucks. 4. 3. 2 Competition and Buying PatternsThe competition in this arena is the fiercestin allother metropolitan areas in SE Asia. Singapore is a fatheaded city, but has a lot to offer. Usually there are a minimum of two of the same outlets withina radius of slight(prenominal) than 300 meters. For instance, Bread Talk opens one outlet at bottom the Ngee Ann city shop Centre and another just now across the street inside the Far East Plaza Shopping Centre. It is quite common for retailers to fulfil this kind of strategy, due to the high volume of people strolling around the main area of Orchard Road.Another reason is because many retailers do not want to lose gross sales opportunity, as the competitors are offering substitutions and interchangeable product categories. This phenomenon has made Singapore the best place to shop. If you just deep in thought(p) Haagen Dazs waffle at CK Tang Shopping Mall, there is another Haagen Dazs across the street at the new Paragon Shopping Centre . 4. 3. 3 Main Competitors Our main competitors in this segment are any food outlets within the 300 meter radius along the Orchard Road. In our location, there are Tori-Q, Pizza Walker, Starbucks, Bread Talk, and Rotiboy. Tori-QTori-Q is locally owned franchise who sells Japanese BBQ skewers. Established in 1998, Tori-Q had expanded its operation into neighboring countries, Indonesia, Malaysia, and Thailand. Tori-Q is popular among local teenagers as it offers fast service to its customers. Comm plainly, Tori-Q outlets are rather small,and can only serve a maximum of 6 guests. It is a choice for those who are in a hurry and would like to grab a industrious lunch on the way. Pizza Walker Pizza Walker is a joint venture positioned as gourmet pizza joint in Singapore. Most of its retail outlets are decorated with welcoming ambience, such as flowers and see-through kitchens.Pizza Walker is a good place to hang out, and the place is always full during lunch hour. It has more than enough tables to serve a maximum of 55 guests. Its specialty is all-you-can-eat pizza Starbucks Starbucks strategy debut the lunch market had made some impact in Singapore. Usually, a lunch menu in Singapore consists of fried and BBQ stuff such as roast pork with rice or the Big Mac. Starbucks is one of the first food retailers that popularized light and healthy alternatives such as salad or lean sandwich as an options for Singapores lunch accommodations.Bread Talk As the most successful franchiser in Singapore, Bread Talk is surely neat a threat for most food retailers. Bread Talk not only rented most of the retail space along Orchard Road, but now they are doing delivery to offices and apartments nearby. Bread Talk outlets usually consist of a huge see-through kitchen, and bread trays ready for pick-up by customers, with three or four capitaliers at front, to speed up the queue. Rumor has it that Bread Talk sold more than 35,000 breads each day in just one of their retail outlets. Ro tiboy A Malaysian franchise.Rotiboy is quite popular in the region as it is now expanding into several cities in Indonesia, Vietnam, Thailand, and the Philippines. Rotiboy offers simplicity for speedily lunch franchiser, and often considered alternatives for its long queueing rivals. 4. 3. 4 Foreign Vs. Local Franchising some 40% of the franchises operating in Singapore are foreign. billet bighearted franchises are still in their maturing stages as they start to expand globally. Franchises from the U. S. calculate for 65% of foreign brands, with big players such as KFC, Starbucks, Pizza Hut, etc.Due to high capital investment, Singapore conglomerates tend to dominate the industry. Home grown franchises are moreoften sought more by young entrepreneurs thanare their Western counterparts, asthey offer greater tractability and lower franchise fees to operate. Unlike Western license holders, home grown franchisesare more efficient in the overall supply chain management as the basic raw ingredients are commonly entrap anywhere in the region. outline and executing Summary At first, we will open one outlet inside the newborn Paragon Shopping Centre.This will become our market testing area, and as we go further, Fresin Fries is throwning to open another in nearby shopping malls. In attracting customers to try our fries, we will provide a see-through kitchen, so that people will see how we are committed to freshness in our products. The kitchen will also let out an aroma of our freshly fried fries into the surroundings area, so that people will come and try our products. 5. 1 Competitive Edge Our unique dipping sauces blend local taste and international into one fusion recipe for the signature sauce. Enthusiastic and friendly staff Supporting merchandise items that support companys brand building. Ourfriesare made of 100% fresh potatoes, unlike the frozen fries used by competitors. Innovative packaging will position us at the same level with foreign fast food franchises. 5. 2 trade Strategy Our strategy is based on serving our markets well. We will start our first outlet as a market tester that could become a model of the expanding number of outlets in the future. Concentration will be on maintaining quality and establishing a strong identity in the local market.A combination of local media and local store marketing programs will be utilized at each location. Local store marketing is most effective, followed by print ad. As soon as a niggardliness of stores is established in a market, then broader media will be explored. We believe, however, that the best form of advertising is still buzz. By providing a fun and energetic environment, with unbeatable quality at an acceptable price in a clean and friendly outlet, we will be the talk of the town. Therefore, the execution of our concept is the most critical element of our plan.We will actively build our brand, through the selling of supporting materials, such as merchandise, promoti onal items and other marketing gimmicks similar to those of other fast food franchises. 5. 2. 1 Pricing Strategy Our pricing strategy is positioned as generic, meaning that S$4. 00 is the average consumer spending for a snack or light lunch in Singapore. Leveraging the volume of fries, Italian Soda, and signature style sauces to be sold, we are serving the majority of Singaporeans. 5. 2. 2 Brand Challenges Fresin Fries must establish a distinct brand to stand out from the other Western-style fast food competitors. Our logo is distinct as fresh, energetic and playful with color elements that are eye catching. Product names are geared toward the target market (teens), with items such as Frenzy Fresin and Uber Fresin which are fun and well to remember. 5. 2. 3 trade Programs We will deploy three different marketing tactical maneuvers to increase customer sentiency of Fresin Fries. Our most important tactic will be word-of-mouth and in-store marketing. This will be by distant the cheapest and most effective of our marketing programsbecause ofthe high traffic in targeted shopping locations. The second tactic will be local store marketing.These will be low-budget plans that will provide community support and awareness of our facility. The last marketing effort will be utilizing local media. Although, this will be the most costly, this tactic will be used meagrely as a supplement where necessary. In-Store Marketing o In-store brochures containing our concept and philosophy. o Wall posters. o Design concept. o In-store viewing of making fries process from cutting to frying. o Standing signage inside malls lobby/aisle. o Outdoor signage (if possible). o Grand opening move promotion. o Party catering. o merchandise items. Local Store Marketing o Brochures. drop off cursory t-shirts at local stores events. Local Media o immediately mail division containing brochures sent to surrounding addresses. o meshwork page containing company philosophy, memoria l and news. o Local magazines that target our core customers, such as Free Magazine. o Newspaper campaign placing several large ads throughout the month to explain our concept to the local area. 5. 2. 4 Positioning Statement Our main focus in marketing will be to increase customer awareness in the surrounding community. We will direct all of our tactics and programs toward the goal of explaining who we are and what we are all about.We will price our products fairly, keep our standards high, and execute the concept so that word-of-mouth will be our main marketing force. 5. 3 gross sales Strategy The sales strategy is to build and open new locations in order to increase revenue. However, this plan will be implemented when the one market tester outlet showed emf growth. As each individual location will continue to build its local customer base over the first three years of operation, the goal of each store isS$104,250 in annual sales, with the pilot program flagship store expected to earn almost S$200,000 per year. . 3. 1 gross sales Forecast We anticipate the highest peak on the months of November and December in our sales forecast, due to the holiday seasons. In November, there is Ramadan, and for non-muslim Malaysians and Indonesians, it means vacation time. virtually 1. 5 millionIndonesians visit Singapore each year, mostly for shopping and dining. Then in December, we anticipate more tourists coming into Singapore this explains the jumped of sales in these last two months of the year. pic pic pic pic pic sales Forecast 2005 2006 2007 Unit gross revenue Belgian Fries 49,464 98,928 197,856 Italian Soda 27,692 55,384 110,768 selling 3,889 7,778 15,556 Signature case Sauces 3,356 6,712 13,425 Total Unit Sales 84,401 168,802 337,605 Unit Prices 2005 2006 2007 Belgian Fries $4. 00 $4. 00 $4. 00 Italian Soda $1. 50 $1. 50 $1. 50 Merchandising $8. 50 $8. 50 $8. 50 Signature Packaged Sauces $2. 00 $2. 00 $2. 0 Sales Belgian Fri es $197,856 $395,712 $791,424 Italian Soda $41,538 $83,076 $166,152 Merchandising $33,057 $66,114 $132,228 Signature Packaged Sauces $6,712 $13,425 $26,849 Total Sales $279,163 $558,327 $1,116,654 Direct Unit costs 2005 2006 2007 Belgian Fries $0. 80 $0. 80 $0. 80 Italian Soda $0. 15 $0. 15 $0. 15 Merchandising $3. 83 $3. 83 $3. 83 Signature Packaged Sauces $1. 00 $1. 00 $1. 0 Direct Cost of Sales Belgian Fries $39,571 $79,142 $158,285 Italian Soda $4,154 $8,308 $16,615 Merchandising $14,876 $29,751 $59,503 Signature Packaged Sauces $3,356 $6,712 $13,425 Subtotal Direct Cost of Sales $61,957 $123,914 $247,827 5. 4 strategic Alliances Our coach-and-fouriness requires a long relationship with raw suppliers as well as partner vendors. In Chinese, this relationship is called guanxi, meaning business bonding.We already have a long and good standing relationship withCompany Vin our previous ventures. For Company Y, Mr. Joe Shmo, the managing director,is a pr ominent lick in the society and we hope to strengthen further our business relationship with him andthe company. 5. 5 Milestones During the initial set up of the company, the 4 founders (Guy Fry, Harry Hip, Sam Sauce, and Carl Cone) will conduct the planning and implementation in building the brand and the construction of our first outlet. The planning and construction will take rough 8 months, in addition to the revision and refinement process that will take the rest of the 12 month period before our opening in early 2005. pic pic pic Milestones Milestone Start get word End consider Budget Manager Department Presentation materials for all 1/12/2004 3/12/2004 TBD Carl Cone Business stakeholders Development Follow up with suppliers 1/21/2004 3/22/2004 $100 Sam Sauce Business Development Follow up with developers 1/21/2004 9/8/2004 $50 Sam Sauce Business Development stamp materials 2/13/2004 4/10/2004 $8,000 Guy Fry Marketing Marketing communication program 2/21/2004 6/23/2004 TBD Sam Sauce Marketing Constructions 5/22/2004 12/3/2004 TBD Harry Hip Business Development In store signage, take up 5/23/2004 10/11/2004 TBD Guy Fry Marketing Grand opening materials 6/2/2004 10/13/2004 TBD Guy Fry Marketing Hiring staff 7/14/2004 8/12/2004 $900 Harry Hip Human Resources Open second location 7/1/2005 7/1/2005 $10,000 Carl Cone Business Development Open 3rd and 4th locations 1/1/2006 6/1/2006 $15,000 Carl Cone Business Development Open 5th, 6th, and 7th locations1/1/2007 12/31/2007 $20,000 Carl Cone Business Development Training staff 9/12/2004 12/10/2004 $1,000 Harry Hip Human Resources Totals $55,050 Web picture Summary The website will, of course, show visitors everything about Belgian food culture, including the account statement of french fries over time. To make the website interactive, Fresin Fries will offer gift cards and promotions via the Internet, so our visitors can print the promoti onal verifier in PDF format and bring it when they visit Fresin Fries. Visitors can also transfer Fresin Fries theme song as ring tones, or order potato cutters for delivery.Besides the traditional formats of customer service hotline and in-store form, customers can now economise their comments and suggestionson our website, which will be directed to one of our staff. So, the website itself will act as the medium between our company and our audience. In the future, our website will show information on franchising/licensing our brand name. 6. 1 Website Marketing Strategy We will leverage the visibility of our shopping malls website by getting them to include a link to ours. We will also postbanners on an official Singapore tourism website. 6. 2 Development Requirements To adequately serve our audience, the front end strategy of our website should be parallel with our corporate color.The front end design of our website will be entirely trustedto Mr. Guy Fry. The diversity of founde rs background in our company has enabled a cost efficient development in our venture. As Mr. Harry Hip and Mr. Carl Cone are experts in teaching Technology, the back end of our website will be developed bythese gentlemen. Management Summary The initial management team depends on the founders themselves, with little back-up. As we grow, we will take on additional help in authorized key areas. Part of our basic philosophy will be able to run our executive management as a knowledge manduction fellowship. We will not add additional overhead until absolutely necessary.This will mean that the initial staff support team will have to work extra. By doing this, we will keep our overhead as low as possible, intromiting us to adequately staff our outlets. This will also allow us and future business partners to recoup investments as quickly as possible and enjoy a higher return. At present time, Fresin Fries is being owned by its 4 founders. Others that have helped on the development of thi s business venture will be offered an opportunity to grow together with the company at the appropriate time, and when the time comes, the 4 founders share will be consolidated as one entity. 7. 1 Management aggroup Fresin Fries is currently the creative idea of its four founders.As the company is small in nature, it only requires a simple organizational structure. Implementation of this organization form calls for all four individuals to make all major management decisions in addition to monitoring all other business activities. As we expand into multiple locations, each location will have a primary site manager. 7. 2 Organizational Structure coming(prenominal) organizational structure will include a director of store operations when the store locations exceed four units. We hope that this individual will come out of the ranks of our stores management. This will provide a supervisory level between the executive level and the store management level. watercourse plan is to have our accounting and payroll functions done by an in-house bookkeeping. Mr. David Lu will be responsible for accounting and business development of Fresin Fries, helped by Mr. Harry Hip, acting Head of Human Resources Division. Possible positions might be added at a later date include marketing manager, purchasing manager, controller, clement resources, R&D and administrative support team. 7. 3 Personnel Plan Our initial employees willinclude twocashiers, two cooks and two bus boys per location, with one of each on the premises during open hours. This is considered an ideal military force number for a food outlet the size of our own.Each employee will work for 38-40 hours per week. In the long run, as we expand our product sept and retail outlets, we will employ more people in the middle management to ensure the focus of our work, including site managers. pic Personnel Plan 2005 2006 2007 position Managers $0 $60,000 $96,000 capitaliers $36,000 $80,000 $144,400 Cook $28,800 $6 6,000 $115,200 Busboy $23,400 $56,000 $94,000 Total People 12 26 40 Total Payroll $88,200 $262,000 $449,600 Financial Plan The company is now privately held by Harry Hip, Guy Fry, Carl Cone, and Sam Sauce. Future shares will be offered after two consecutive years of operating in Singapore. 8. 1 Projections 8. 2 Start-up supporting currently, the company is owned by the original 4 founders, who each will contribute $200,000 for the same amount of share, 25%. This will more than cover start-up requirements, and provide the business with a cash cushion to use for expansion over the first three years. pic Start-up bread and butter Start-up Expenses to Fund $68,800 Start-up Assets to Fund $50,000 Total Funding Required $118,800 Assets Non-cash Assets from Start-up $30,000 Cash Requirements from Start-up $50,000 redundant Cash Raised $681,200 Cash Balance on Starting Date $731,200 Total Assets $761,200 Liabilities and metropolis Liabilities up-to- the-minute Borrowing $0 Long-term Liabilities $0 Accounts Payable (Outstanding Bills) $0 Other authentic Liabilities (interest-free) $0 Total Liabilities $0 Capital Planned Investment Eric Yam $200,000 Martin Ng $200,000 David Lu $200,000 Sagita Suwandi $200,000 additive Investment Requirement $0 Total Planned Investment $800,000 handout at Start-up (Start-up Expenses) ($68,800) Total Capital $731,200 Total Capital and Liabilities $731,200 Total Funding $800,000 8. 3 Break-even Analysis Our break-even analysis shows that we need unit sales over 9,700 per month to break even. We do not expect to begin move a profit until year three. pic pic pic Break-even Analysis Monthly Units Break-even 9,706 Monthly tax income Break-even $32,104 Assumptions Average Per-Unit Revenue $3. 31 Average Per-Unit Variable Cost $0. 73 Estimated Monthly Fixed Cost $24,979 8. 4 Projected Profit and deviation As the Profit and Loss shows,Fresin Fries wil l run at a loss for the first two years, using up some of the cash reserves initially invested by the founders. As sales increase, we will expand into new locations to aggressively spread brand recognition. This increase in visibility will allow us to take up less expensive locations off of Orchard Road, while maintaining our flagship operation, the first store, in aprime spot. pic pic pic pic pic pic pic pic pic Pro Forma Profit and Loss 2005 2006 2007 Sales $279,163 $558,327 $1,116,654 Direct Cost of Sales $61,957 $123,914 $247,827 Other Costs of Sales $0 $0 $0 Total Cost of Sales $61,957 $123,914 $247,827 Gross edge $217,207 $434,413 $868,826 Gross Margin % 77. 81% 77. 81% 77. 81% Expenses Payroll $88,200 $262,000 $449,600 Marketing/Promotion $10,000 $10,000 $10,000 wear and tear $0 $0 $0 Rent $174,000 $248,000 $298,000 Utilities $2,550 $5,000 $8,000 New location frame-up $25,000 $50,000 $50,000 Total Operating Expenses $299,750 $575,000 $ 815,600 Profit forwards Interest and Taxes ($82,543) ($140,587) $53,226 EBITDA ($82,543) ($140,587) $53,226 Interest Expense $0 $0 $0 Taxes Incurred $0 $0 $0 give the sack Profit ($82,543) ($140,587) $53,226 utmost Profit/Sales -29. 57% -25. 18% 4. 77% 8. 5 Projected Cash commingleThe following chart and table show the Projected Cash operate for Fresin Fries. pic pic pic Pro Forma Cash Flow 2005 2006 2007 Cash Received Cash from Operations Cash Sales $279,163 $558,327 $1,116,654 Subtotal Cash from Operations $279,163 $558,327 $1,116,654 Additional Cash Received Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $279,163 $558,327 $1,116,654 Expenditures 2005 2006 2007 Expenditures from O perations Cash Spending $88,200 $262,000 $449,600 Bill Payments $244,265 $430,245 $599,286 Subtotal dog-tired on Operations $332,465 $692,245 $1,048,886 Additional Cash Spent Sales Tax, VAT, HST/GST gainful Out $0 $0 $0 Principal repayment of Current Borrowing $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $332,465 $692,245 $1,048,886 Net Cash Flow ($53,301) ($133,918) $67,767 Cash Balance $677,899 $543,981 $611,748 8. 6 Projected Balance Sheet Fresins intercommunicate company balance sheet follows. We expect to run at a loss for the first two years, decreasing our net worth(predicate) slightly. As the operation becomes more profitable in the third year, our net worth rises again. pic Pro Forma Balance Sheet 2005 2006 2007 Assets Current Assets Cash $677,899 $543, 981 $611,748 Other Current Assets $0 $0 $0 Total Current Assets $677,899 $543,981 $611,748 Long-term Assets Long-term Assets $0 $0 $0 Accumulated Depreciation $0 $0 $0 Total Long-term Assets $0 $0 $0 Total Assets $677,899 $543,981 $611,748 Liabilities and Capital 2005 2006 2007 Current Liabilities Accounts Payable $29,242 $35,911 $50,452 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $29,242 $35,911 $50,452 Long-term Liabilities $0 $0 $0 Total Liabilities $29,242 $35,911 $50,452 Paid-in Capital $800,000 $800,000 $800,000 contain Earnings ($68,800) ($151,343) ($291,930) Earnings ($82,543) ($140,587) $53,226 Total Capital $648,657 $508,070 $561,296 Total Liabilities and Capital $677,899 $543,981 $611,748 Net worthy $648,657 $508,070 $561,296 . 7 Business Ratios The following table outlines some of the more important ratios from theFast Food Restaurants and Standsindustry. The final column, Industry pen, details particularised ratios based on the industry as it is classified by the model Industry Classification (SIC) code 5812. pic Ratio Analysis 2005 2006 2007 Industry Profile Sales Growth 0. 00% 100. 00% 100. 00% 8. 7% Percent of Total Assets Other Current Assets 0. 00% 0. 00% 0. 00% 37. 31% Total Current Assets 100. 00% 100. 00% 100. 00% 45. 97% Long-term Assets 0. 00% 0. 00% 0. 00% 54. 03% Total Assets 100. 00% 100. 0% 100. 00% 100. 00% Current Liabilities 4. 31% 6. 60% 8. 25% 17. 94% Long-term Liabilities 0. 00% 0. 00% 0. 00% 22. 26% Total Liabilities 4. 31% 6. 60% 8. 25% 40. 20% Net value 95. 69% 93. 40% 91. 75% 59. 0% Percent of Sales Sales 100. 00% 100. 00% 100. 00% 100. 00% Gross Margin 77. 81% 77. 81% 77. 81% 59. 05% Selling, General & administrative Expenses 107. 37% 102. 99% 73. 04% 39. 24% Advertising Expenses 0. 00% 0. 00% 0. 00% 1. 96% Profit Before Interest and Taxes -29. 57% -25. 8% 4. 77% 1. 92% Main Ratios Current 23. 18 15. 15 12. 13 1. 04 Quick 23. 18 15. 15 12. 13 0. 66 Total Debt to Total Assets 4. 31% 6. 60% 8. 25% 50. 2% Pre-tax Return on Net Worth -12. 73% -27. 67% 9. 48% 6. 90% Pre-tax Return on Assets -12. 18% -25. 84% 8. 70% 13. 87% Additional Ratios 2005 2006 2007 Net Profit Margin -29. 57% -25. 18% 4. 77% n. a Return on Equity -12. 73% -27. 7% 9. 48% n. a Activity Ratios Accounts Payable Turnover 9. 35 12. 17 12. 17 n. a Payment Days 27 27 26 n. a Total Asset Turnover 0. 41 1. 03 1. 83 n. Debt Ratios Debt to Net Worth 0. 05 0. 07 0. 09 n. a Current Liab. to Liab. 1. 00 1. 00 1. 00 n. a Liquidity Ratios Net Working Capital $648,657 $508,070 $561,296 n. a Interest Coverage 0. 00 0. 00 0. 00 n. Additional Ratios Assets to Sales 2. 43 0. 97 0. 55 n. a Current Debt/Total Assets 4% 7% 8% n. a Acid Test 23. 18 15. 15 12. 13 n. a Sales/Net Worth 0. 43 1. 10 1. 99 n. a Dividend Payout 0. 00 0. 00