I – EXECUTIVE SUMMARY:
The city of Fargo, ND, has had a steady increase in population over the past decade; most of which, has been in the southern part of the city. West Acres shopping center has become a centralized hub for shopping and entertainment for not only the city of Fargo, but also the surrounding area. I would like to introduce a new type of fast-food option to the
vicinity. Babs’ Big Apple Bagels Deli provides a unique variety of options such as, bagels, muffins, coffee, smoothies, pizza bread, deli sandwiches, and salads. One economic trend that will help Babs’ succeed is that dine-in restaurants, who typically charge more per meal, dine-in the current
economic situation, will be surpassed in an attempt by the consumer to save money.
The proposed location for Babs’ Big Apple Bagels Deli is on the corner of 13th Ave. S. and 38th St. S. An extra bonus is that this location is visible from interstate 94 and off a heavily traveled business route on13th Ave. S.
The primary target market will be young, Caucasian, married
business men age 25-35 that pass this location on their way to work. They will be college graduates and have a steady household income of $65,000 and above.
The projected profit for the first year of operations is $41,019, approximately 5% of net sales. For year two it is projected there will be a 7% increase in sales and 5% increase in expenses with profit totaling $60,345. Year three is estimated to have an 8% increase in sales and 5% increase in expenses with a profit totaling $90,048.
Currently, I am a senior at Fargo North High School. I plan to further my education at North Dakota State University this fall. My intended major is Management Information Systems, which will be very beneficial to the future of Babs’. My strengths are: taking initiative, seeking personal responsibility, human relations, problem solving, and creativity. My strong work ethic, patience, and self-motivation will keep me dedicated to this business. I look forward to meeting with you soon to discuss the future of Babs’ Big Apple Bagels Deli.
II – DESCRIPTION AND ANALYSIS OF THE BUSINESS SITUATION:
A. Rationale and Marketing Research:
The city of Fargo, ND, has had a steady increase in population over the past decade; most of which, has been in the southern part of the city. West Acres shopping center has become a centralized hub for shopping and entertainment for not only the city of Fargo, but also the surrounding area. Even in the economic recession the Fargo-Moorhead area has seen minimal impact. Last year’s Christmas sales, at West Acres shopping center, was one of the best years on the book. Many shoppers hit the mall early in the morning in attempt to beat the crowd or hit early-morning sales. Yet there are few fast-food options at that time in the morning. This area is highly underserved for morning commuters. There are a total of four restaurants in the area that serve breakfast, two of which, are dine-in only, the others are not visible from the main stretch around West Acres.
I would like to introduce a new type of fast-food option to the area. Babs’ Big Apple Bagels Deli provides a wide variety of options such as, bagels, muffins, coffee, smoothies, pizza bread, deli sandwiches, and salads. This unique variety of food serves not only the breakfast crowd, but also lunch and dinner as well. Babs’ is known for their variety and unsurpassed quality. This fast food restaurant will strive because of its’ proposed prime location, early hours, friendly atmosphere, and variety.
I am currently a senior at Fargo North High School. I have taken the following classes that will be helpful in my business venture:
marketing, management/entrepreneurship, advanced math, economics, and web design. I am actively involved in Fargo North Key Club and DECA. In 2008 I received 2nd place in the travel and tourism team event at the state DECA competition. From there I went on to the national competition in Atlanta, GA, where my team placed in the top 30% in our event. I was also a member of the girls golf team from 2003-2008. I was a senior captain and was voted “most inspirational” my senior year on the team. My strengths are: taking initiative, seeking personal responsibility, human relations, problem solving, and creativity. My weaknesses include: number sense, use of outside resource persons, and risk taking.
having a major in this field will definitely be an asset to my business and help with one of my current weaknesses, mathematics. My strong work ethic, patience, and self-motivation will keep me dedicated to this business. Once I start on an idea I want to see it through to the end, therefore I am fully committed to running this restaurant.
D. Analysis of Business Opportunity, Customer & Location:
Fargo is the largest city in North Dakota with a population of 92,660 with 92.5% being Caucasian. The median age is 30 and the median family income is $50,486. Fargo is located in the South Eastern edge of North Dakota, neighboring Moorhead, MN across the Red River. Local attractions include: the FARGODOME, Fargo Theatre, Red River Zoo, West Acres Shopping Center, Fargo Air Museum, FM Redhawks, Fargo Force hockey, and Plains Art Museum. These attractions regularly pull in many visitors from neighboring towns. Fargo has become a centralized hub for shopping and entertainment within a 200 mile radius. Fargo-Moorhead colleges are: North Dakota State University, Minnesota State University Moorhead, Concordia College, Rassmusen College, and Minnesota State Community & Technical College. The local colleges contribute significantly to the economy of the F-M area. Fargo-Moorhead is a rapidly growing community with increased college enrollment,
The proposed location for Babs’ Big Apple Bagels Deli is on the corner of 13th Ave. S. and 38th St. S. This is the previous location of T.G.I. Friday’s in front of West Acres. This location is visible from the interstate 94 and 13th Ave. Accessibility is also excellent, all visitors to West Acres shopping center who enter from 13th Ave. will pass by the entrance to Babs’. This location is perfect, as it’s one of the busiest spots in town. Competition in the immediate area includes: Chili’s, Grizzly’s, Taco Bell, and West Acres food court (McDonald’s, Subway, Dairy Queen, Virgo’s Pizza, China Doll, Cajun Café & Grill, Great Steak & Potato, Taco John’s, and Rising Bread Co.). Down the road on 13th Ave. and 39th St. there is even more competition including: Perkins, Burger King, Applebee’s, Arby’s, Texas Roadhouse, Spitfire, iHop, Denny’s, Culver’s, Olive Garden, KFC, Big D’s, Buffalo Wild Wing’s, Valentino’s, and a few others.
Competition is mostly dine-in restaurants that do not open until 11am or later.
One economic trend that will help Babs’ succeed is that dine-in restaurants, who typically charge more per meal, in the current economic situation, will be surpassed in an attempt by the consumer to save
The primary target market will be young, Caucasian, married
Our secondary market will focus on the weekend travelers near West Acres shopping center. These shoppers are typically Caucasian, married women and their children who have a household income of $50,000 and above, and are between the ages of 30 and 40.
E. Proposed Organization:
Babs’ will be run as a franchised sole proprietorship. My first step in this process is to get approval for a business loan from the Bank of North Dakota. Secondly, I will then attain the lease for the property on 13th Ave., the future location of Babs’. The next steps will be remodeling the building to suit the requirements of the franchise, including some renovations adding a drive-up window, signage, painting, and furniture. Nearing the final months of remodeling I will start posting available jobs online and in the local newspaper. Approximately three weeks prior to the grand
opening staff will be hired and begin training with a franchise
headquarters employee. The night before grand opening everything will be looked though one more time to ensure a smooth day for opening.
Staffing needs will include three full-time cashiers, two full-time cooks, and one full-time manager to cover the hours of 6am-2pm. The same number of cashiers, cooks, and managers will be needed on a part-time basis to cover the shift from 2pm-8pm. Occasionally, part-part-time or full-time employees will be asked to fill hours in opposite shifts if
windows and doors, restrooms, mop floors, and take out trash. Please see chart below for full staffing assignments.
III – PROPOSED MARKETING / PROMOTION PLAN:
A. Proposed Product or Service:
Babs’ is known for its wide variety and unique selection of
sandwiches and coffee. Specialty sandwiches, signature salads, breakfast sandwiches, bagels, gourmet muffins, and a variety of coffee and
smoothies will be served. Gourmet sandwich options include classic
turkey, kick-n roast beef, holey guacamole, Mediterranean veg-out, Babs’
tuna salad, and build your own, on an option of either a bagel, twist, or bread. Triple Deckers are stacked high on tasted bread, options include: California club, classic club, the clubhouse, and Manhattan club. On the menu for salads are: calypso grilled chicken, grilled chicken club,
Mediterranean bread, and grilled chicken Caesar. Breakfast sandwiches include: Breakfast B.L.T., Morning Classic, Southern Tradition, Northern omelet, just veggies omelet, Lox & Cream cheese, bagel & cream cheese. A variety of bagels and muffins will be served along with a variety of pizza breads, and other deli sandwiches. Beverages include Brewster’s Coffee, smoothies, and soft drinks. Catering service is also available to local businesses and events.
B. Proposed Pricing Policy:
Babs’ has approved suppliers where products can be purchased to maintain consistency throughout their franchise. They also provide
guidelines for pricing. Gourmet sandwiches will be sold for $5.19, specialty sandwiches $5.49, toasted sandwiches $6.19, triple deckers $7.49, and overstuffed sandwiches $7.49. All meals can be upgraded to a value meal for $1.79. Signature salads will cost $6.49. Breakfast
sandwiches will range in cost from $2.25 to $3.39, except the lox & cream cheese, which will cost $7.39. Jumbo muffins individually cost $1.89 and a dozen bagels $7.59.
Subway’s pricing is similar to Babs’, charging upwards of $5, depending on sandwich choice. Approximately 35% of the menu price for an item is the cost it took to create it (shipping of goods, cost of food, and labor) thus the markup policy is approximately 35%. This pricing policy is typical for many restaurants and will provide approximately 5% profit for the first year of operations.
C. Personal Promotion:
Word-of-mouth will be a beneficial form of promotion for Babs’ Big Apple Bagel. The hours and variety of food is unique to the West Acres area. Those who eat breakfast, or stop by for their morning coffee, will pass on the experience to co-workers, family and friends. Businesses that do catering will pull-in employees who have never visited the location. Word will spread that Babs’ is a great place to eat breakfast, lunch, dinner or just grab a cup of Brewster’s coffee. The convenient location, unique variety of food, and great service will keep customers coming back, and bringing their family and friends.
D. Nonpersonal Promotion:
The main form of advertisement that will be used will be print advertising, specifically, newspaper flyers. These flyers will include
weeks prior to opening. Mainly the billboards will promote the opening of Babs’ Big Apple Bagel and indicate its location and hours. Billboard
placement will be on heavily traveled routes. One will be located by the North bound exit for the West Acres Shopping Center are off of interstate 94. The second billboard will be located a few blocks East on 13th Ave. The business will benefit from some national advertisement. The weekly 5% royalty fee will help pay for national advertising costs.
The grand opening will be on a Monday morning the main
promotion will offer a free cup of coffee to customers. This will work well for the business, because many people on their way to work like to stop and get a cup of coffee. Since, the restaurant’s location is on a busy road and visible off the interstate, it will be easy for many people to take advantage of the special grand opening offer. After new customers taste the fresh Brewster’s coffee and perhaps a bagel or muffin they will pass on their experience to co-workers who will have to come and try it for themselves. This type of promotion will work well as word-of-mouth will also be in conjuncture; exposing more and more new customers to Babs’.
Distribution of products will be from designated food service
putting an employee in charge of unloading products into designated locations. All deli meats, cheeses, vegetables, etc. will be stored in the cooler. Nonperishable products such as baking materials and coffee cups, napkins, utensils, etc. will be stored in the back storage room. Ordering of products will be done by managers once a week for perishable products. Physical inventory will be taken weekly as well on nonperishable goods, and will be ordered as needed by managers.
IV – PROPOSED FINANCING PLAN:
A. Projected Income/ Cash Flow Statement:
Income: % of Sales
Net Sales $ 836,000 100.00%
Costs of Goods Sold:
Total COGS: $ 292,600 35%
Gross Profit: $ 543,400 65 %
Payroll/ Benefits/ Taxes $ 259,160 31%
Advertising 12,540 1.5%
Supplies 20,900 2.5%
Legal/Accounting 4,180 .5%
Repairs/Maintenance 8,360 1%
Utilities 16,720 2%
Banking/Credit Card 8,360 1 %
Rent 54,340 6.5%
Depreciation 16,720 2%
Tax & License 12,540 1.5%
Insurance 8,360 1%
Royalty Fee 41,800 5%
Miscellaneous 4,180 0.5%
Amortization/Interest 30,041 3.6%
Other: Grand Opening 4,180 0.5%
Total Expenses: $ 502,381 60.1 %
Beginning Cash: $ 3,000 Plus Receipts: $ 836,000 Less Disbursements: $ 778,261 Ending Cash: $ 60,739
B. Projected 3- Year Plan:
YEAR1 YEAR 2 YEAR 3 Beginning Cash: $ 3,000 $ 60,739 $ 138,084 Estimated Receipts: $ 836,000 $ 894,520 $ 966,082 Estimated Disbursements: $ 778,261 $ 817,175 $ 858,034 Estimated Profit $ 41,019 $ 60,345 $ 90,048 Ending Cash: $ 60,739 $ 138,084 $ 246,132
C. Capital and Repayment Plan:
VI – BIBLIOGRAPHY
“American FactFinder: Fargo city, North Dakota.” US Census Bureau. 2000. 26
Sept. 2008. <http://factfinder.census.gov/servlet/ACSSAFFFacts? _event=Search">
“BAB, Inc.” 2009. 16 February 2009. <"http://www.babcorp.com"> Erickson, Craig. Personal Interview. 20 February 2009.
“Loan Calculator.” 2003. 22 February 2009. <http://calculatorloan.info/index.php?