Business Plan for a start-up "Tsarskaya" Creperie and Cafe

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CITY COLLEGE INTERNATIONAL FACULTY OF UNIVERSITY OF SHEFFIELD

Business Plan for a start-up

“Tsarskaya” Creperie and Cafe

Executive Summary

The last decade of years the globalization led to the increased competition and the companies old and new more and more need carefully to understand the market and customer behavior in order to succeed. The main purpose of the project was to develop business plan for a new company and in our case of "Tsarskaya" creperie. The creperie "Tsarskaya" will provide in the U.S. market traditional Russian pancakes and crepes which makes their business objectives achievable and successful. The first part of the business plan provides the presentation of market situation with analytical description of competition, market opportunities and customer profile analysis. The information is very necessary in order to forecast the sales and opportunities for growth. The information about strengths and weaknesses of creperie"Tsarskaya" provided in the business plan and especially in the SWOT analysis where could be seen that the company has more advantages by launching their business idea in the U.S. market. Also, form market situation analysis could be defined that the service sector has steady growth that minimizes the risks for the new business. The creperie"Tsarskaya" will be situated in one of the most populated cities in the world New York which make the perspectives of company to find potential customers. From the customer profile analysis could be defined that "Tsarskaya" creperie mostly target Russian diasporas which are interested and knowledgeable about the product more than other groups of customers. On other hand, in the world a lot people are interested in a new cuisines and tastes which make them also potential customers of the "tsarskaya" creperie. Also, the close to universities and business center location give opportunity to find a large amount of customers who are interested in the fast and healthy food. The final part describes the finance issues of "Tsarskaya" cafe with forecast sales and operating cost in the beginning stage. Also, in the business plan presented the start- up budget where analytically defined every expenditure of company before and after opening.

Table of contents

1. Business Concept

1.1 Description of the company

1.2 Business idea

1.3 Mission and vision

2. Products and services

3. Market analysis summary

3.1 Market Situation Analysis and opportunities

3.2 Competitive Analysis

3.3 SWOT Analysis

3.4 Positioning Strategy

4. Marketing Plan and Sales Forecast

4.1 Marketing Strategy

4.2 Marketing Plan

4.3 Target Market and Customer Analysis

4.4 Sales Forecast

5. Operations plan

5.1 Operations description

5.2 Facilities

6. The management and Organization structure

7. Financial Plan

8. Risk Analysis

Conclusion and Further Suggestions

Reference List

1. Business Concept

1.1 Description of the Company

In nowadays is a large competition in the service sector and especially in the food sector with large amount of restaurants, cafй and creperie. In the competition environment play important role the service quality and location of the future cafй&creperie “Tsarskaya”. In other hand, the location needs to be convenient for the target market, visitors and future visitors. Also, it is vital necessary to take into consideration the competitors' location and cost availability of location for the “Tsarskaya”. The “Tsarskaya” crepes and cafй will be located in New York with biggest Russians population. The location of the crepes &cafй restaurant will be located in Bronx district and especially in the shopping area of Bay Plaza and near also the location of baseball stadium of “Yankees”. The location was chosen in order to face in front some advantages of the street like the central location, a large amount of student campuses and entertainment zone. The main disadvantage of the future location is the close proximity to competitors. The “Tsarskaya” supposed to rent the place of 500-1000 square meters and the lease contract will be between $10000-30000/annum (http://bronx.olx.com/q/restaurant-space-for-lease-in-the-bronx/c-368 ).

1.2 Business Idea

business plan analysis market

The main concept for this business idea is to provide in New York market with future expansion to the whole country a different and unique type of crepes or Russian name”Blini”. Also, the atmosphere and design of the place will play important role in attraction of potential customers. The place will be designed in traditional Russian ways with representation of traditional Russian palaces and buildings. Also, the success of the business idea lies in the specially produced crepes in traditional Russian recipes. Also, “Tsarskaya” will offer a variety of Russian tea and coffee served in traditional ways. In the beginning, the range of products and volume of production would be small but later conquest of the consumer could give opportunity to company to be expanded. In addition, the company will develop also type of service as ordering products on the Internet, the delivery of products to home or office. The “Tsarskaya” crepes and cafй is planning to provide the following:

1) Russian baking pancakes and fritters.

2) Provision of services "takeaway"

3) The range of cafes which include hot and cold appetizers, main breakfast and lunch dishes, the wine list will be provided in full.

4) Organization of celebrations, banquets and anniversaries.

1.3 Vision and Mission Statement

Vision:

Always, in traditional ways at any time of the year - only fresh, high-quality products!

Mission:

The “Tsarskaya” has the objectives to become one of the main players in the service market of NY by offering new segment of products such as traditional Russian crepes and pancakes. Through differentiation the companies see the achievement of objectives achievable.

2. Products and Services

“Tsarskaya” company is engaged to manufacture and sale traditional Russian pancakes, crepes products and related products. Products are always created in high quality and fresh. The pancakes and crepes will be manufactured in traditional ways without yeast dough implementation. Pancakes and crepes was always the Russian traditional dish that create advantage in New York market to find Russian customers and not only. In the manufacture of pancakes and related products will not be used preservatives and concentrates. The company will offer the following important features comparing with the customers:

* High quality

* Traditional recipe

* Freshness

* Excellent taste

* Low-middle prices

The main products of the “Tsarskaya” will be the most successful in Ex-Soviet countries recipes of crepes which are: “Crepes Tsarskiye”, “Russian crepes” and “Ukrainian Crepes”.

3. Market Analysis Summary

3.1 Market Situation analysis and opportunities

Market analysis plays important role in the process of the preparation of business plan. The restaurant industry growth faster than any other service industry in United States by offering jobs to more than 12 million employees with national average rate of 1.85 every year increase in jobs. The statistical information from National Restaurant association of 2011 show, that the restaurant industry sales achieved the amount of $610 billion dollars (National restaurant Association, 2011). Also, more than 35% or U.S. restaurants are locally owned with simple management form or owned by small restaurant chains. According to the National restaurant association, the 80% of American citizens enjoy their meal at locally owned restaurants and cafй. The people last time became busier and demographically changes in a worldwide scale. For example, the globalization is one of the factors which affect the purchasing patterns and behavior and the second more and more women are engaged to work or prefer the career and their job. All these factors show that people more will depend in the future from restaurants. Also, the main trend of nowadays population is the healthy and traditional food.

3.2 Competitive Analysis

Since the “Tsarskaya” crepes cafй will be located in the most populated districts of New York the downside to this area is the proximity of competitors that offering similar services and products. In this location there are the main three competitors of “Tsarskaya” which are the Crкpe du Nord, Crкperie NYC and Vive la Crepe. Below is presented the table of the competitive factors comparing with competitors.

Factors	Our Business	Competitors
	Tsarskaya	Crкpe du Nord	Crкperie NYC	Vive la Crкpe
Quality	Fresh, tasty product. Always warm.	The food is not fresh and of high quality.	Pretty mediocre	Always delicious crepes.
Location	Bronx district, High traffic of citizens.	Out of center, not busy place.	Very busy place, in the center.	In the center, directly to the bus stop.
Price level	Low - middle class prices	High prices	Above average.	Average
Product exclusivity	Russian traditional crepe's. Not common product in the market.	Common product	Common product.	Common product.
Variety	10-15 species.	Small variety of products	Varied menu	Same variety with our business
Reputation of the firm	New firm.	Doubtful	Known creperie, repeat customers.	Known creperie, constant customers.

Generally, the “Tsarskaya” has a low competition from the competitors due to the differentiation of products. The most of the restaurants and cafй in the area are focusing mostly in lunch time dishes and providing the simple recipes of crepes. Also, the “Tsarskaya” business concept focuses mainly in ethnic cuisine and drinks. The others competitors of company is the indirect competitors or local coffee shops which have an disadvantage in front “Tsarskaya” such as the atmosphere of the stores that does not make very comfortable place to enjoy the meal. Also, “Tsarskaya” has a competitive advantage such as extensive menu with traditional Russian pancakes and crepes with innovative and exciting food, focusing in service quality and uniqueness with elegant Russian traditional design of place.

3.3 SWOT Analysis

Since the external and Internal environment all the time changing and the company is under the influence at the current market, it is necessary to identify the the strengths and opportunities for the “Tsarskaya” in the changing environment. SWOT analysis helps a new business to understand and analyze the strengths and weaknesses and the opportunities and threats of the environment.“Tsarskaya” Creperie SWOT analysis is presented below:

Internal Environment- Strengths

· Good geographical location

· In the center, near metro station

· Affordable prices

· Innovative product ( Traditional Russian crepes and tea)

· Modern equipment

· High quality products

· Individual service for customer needs

Internal Environment- Weaknesses

· Lack of managerial experience

· New business, no experience

· Many competitors

External Environment- Opportunities

· Unique experience at our store

· Friendly environment

· Not common product

· Prompt and efficient customer service

External Environment- Threats

· Unfavorable demographic changes

· inflation

· reducing the overall level of purchasing power

· Economic crisis

3.4 Market Positioning

“Tsarskaya” creperie will be positioned as unique product in traditional methods manufactured and one of the most important differentiating factors will be the affordable price and variety of products. Below is represented the “Market Positioning map” and the “Tsarskaya” position in the current market.

4. Marketing Plan and Sales forecast

4.1 Market Strategy

The main goal of the”Tsarskaya” creperie is projected market penetration and successive expansion of the market share. The main strategy established by the company is to provide products in high quality with lower than competitors prices with future expansion of the variety of products. Also, the “Tsarskaya” creperie take into consideration the fluctuations in demand by stimulating the prices by creating a strong brand image in the market. In order to succeed the established strategies each company need to develop marketing plan.

4.2 Marketing Plan

Product

The "Tsarskaya" will provide a large variety of Russian traditional crepes or Russian well known name for crepes "blini". For Russians the "blini" is a traditional food with large history which make to "Tsarskaya" to succeed in the market through differentiation from other creperie. The company will provide also a variety of non-traditional tea with different forest herbages. The crepes will be made from wheat, buckwheat and other grains which are the most common in Russia. The traditional recipes of crepes include also the sauce or the crepes will be spread with butter, sour cream and caviar which are very popular ingredient for Russians. Historical heredity of Russian crepes obliges "Tsarskaya" creperie to honor Russian traditions by offering traditional crepes and other dishes. The main characters of creperie menu - pancakes, crepes, pancakes pies, fritters. A total amount of products in " Tsarskaya" creperie menu is more than 80 menu items. The menu is not limited only with pancakes and crepes, the breakfast customers will enjoy also for example the same scrambled eggs served on thin pancakes.

Place

Like any other restaurant the location play important role for the creperie. The creperies are the common and favored food of students and busy people that want to enjoy fast healthy food. For that reasons the best location for the creperie usually the shopping malls, university campuses, the streets with large people traffic and movie theatres. For the "Tsarskaya" creperie was chosen the shopping area of Bronx district in New York. The Bay Plaza shopping center is one of the biggest shopping centers in New York which make location of the creperie affordable and comfortable for the customers. Also, in the area of Bronx situated several Universities which make the location of "Tsarskaya" attractive and give an advantage to have high demand through the year.

Promotion

Due to the new business, the "Tsarskaya" creperie will need to promote carefully the business in order to cover the customers' needs and desires. At the beginning the company plans to promote through public relations and media tools like magazines, printed leaflets, outdoor billboards at the bus and subway station in the Bronx area and radio. The printed leaflets will be shared and delivered to the local businesses and residents' home. Due to the increased efficiency and usage of social network "Tsarskaya" promotion campaign will be set up in social media tools such as Facebook and Twitter. The magazines in the service and food industry are the common way of promotion with high reputation for customers. The "Tsarskaya" creperie had to be published through the famous U.S. cuisine and food magazines such as Bon Appйtit, Fine Cooking, Food & Wine, Gastronomica, Gourmet and Taste of Home.

Promotion and communication mix elements planning per month

Advertising	Price, USD.	Quantity	Cost per month, USD	publication per year
Radio	50	25	1.250	4 months
Magazines, newspaper	200	10	2.000	2 months
Brochures	0.15 per brochure	2000	300	5 months
Transport stations	300	4	700	3 months
Total Cost $			4.250

Price

For the price analysis the "Tsarskaya" creperie used the pricing strategy "cost plus profit". The price is one of the most important marketing mix elements due to the company's profits and development depends on price and operational expenses. The company by establishing price needs to take into consideration the demand for the products, the operational costs and the competitors' prices. The price for the crepes will have price variation between $3, 50 -$ 10 depends of ingredients and extra components ordered by customers. For the drinks the company will establish the price between $2-$4 depends on drink.

4.3 Target Market and Customer Analysis

In order to succeed every new business need to understand and identify the potential customers and to cover their needs and preferences. The "Tsarskaya" creperie mostly target the New York Ex-Soviet ethnic group and the local residents of Bronx district. But, for sure the other customers will find the products useful and unexposed due to traditional ethnic cuisine from another country. "Tsarskaya" creperie also will focuses on students from the near Universities and sport- fans of baseball team "Yankees" due to the near location of their stadium. The demographic structure of customers will vary from 5-50 years old and especially young generation and business people due to their busy daily program.

4.4 Sales Forecast

Product	2012 ($)	2013 ($)	2014($)	2015($)
Drinks and other Beverages	91800	105557	112140	121200
Tsarskye crepes	74520	82800	85700	91116
Ukrainian crepes	54390	59450	65790	70879
Russian crepes	36680	41290	45670	48670
Other crepes	25570	28900	31290	35600

5. Operations Plan

5.1 Operations description

One of the keys of success is the right operations management. The main processes and operations of the "tsarskaya" creperie are the service and sales of the products to the customers in the store and outside the store by delivering the products. Also, the traditional cooking process is very complicated and need experienced chef and equipment. For the cuisine the company will order a variety of crepes "TEFAL" machines in order to make easier and fast preparation of crepes. The cooking time of crepes vary from 1.5 to 3 minutes depends on recipe and the amount of ingredients. The crepes and cafe drinks will be offered to customers during the whole operation hours of "Tsarskaya" creperie with elasticity program during the week. The production and operational process of preparation and service of pancakes and crepes would consist of the following actions operation:

1) Ordering process

2) Cash

3) Quality control of ready crepes

4) Production and preparation of pancakes and crepes

5) Execution and delivery order

5.2 Facilities

The interior design of "tsarskaya" creperie will be created in traditional Russian styles and ways. The main concept of the interior is to represent the Russian interior design during the times of Russian monarchy. The interior will have a simple, cozy and quiet design. The service room will be more than 200 square meters. The tables and other furniture will be made from valuable wood and the main part of furniture will be handmade with Russian traditional symbols. Also, the place will be decorated with old items such as Russian dolls "Matrioshka" and near the windows will be situated the Russian traditional heated metal container or "Samovar". All the walls of "Tsarskaya" creperie will be exhibited with a collection of pictures of the copies of Russian painters. (See the photo examples of interior design)

6. The Management and Organizational Structure of the "Tsarskaya" creperie.

Every business and the restaurant or creperie is no exception need a host of business and employees with management and service skills. The "Tsarskaya" creperie in the beginning stage will have the form of Limited Liability Company. The company will be operated and managed by director who also is the owner of the company. The director will have the legal entity to hire and get out the employees according to the U.S. Labor laws and will participate in the labor force, punishments and applies incentives. For the administrator and accountant positions will be established some limitations of recruitment such as high education, work experience more than 3 years and communication skills. The administrator will be responsible for the operation process, the provision of raw materials and staff negotiations. The accounant will be responsible for the financial operations of company with monthly reporting to the owner. Also, the accountant will monitor the cash flows and inventory cash flows. The other staff of "Tsarskaya" creperie will be presented with following staff:

· 1Cashier

· 1 Bartender

· 6Waiter

· 2 Cleaning staff

· 1 Dishwasher

Below is presented the Organizational structure of "Tsarskaya" creperie.



7. Financial Plan

Startup cost

Starts up costs are the costs associated with the creation of a company. Some costs obtained for the creation of "Tsarskaya" creperie is showed below.

Star up cost in USD

Start up costs:
Rent costs 10.000
Legal services (Lawyer, employment contract) 700
Licenses 50
Taxes ( administration taxes and other taxes) 300
Equipment 50.000
Deposit for utilities 70
Leasehold Improvement 12.000
Salaries 8.000
Initial inventory 11.000
Advertising and promotion 10.250
Other expenses 5.000
Total Startup Cost 107.370

Income Statement in $

Years 2012 2013 2014 2015
Sales 282.960 317.997 340.770 367.465
COS 30.000 34.000 38.000 40.000
Gross Profit 252.960 283.997 302.770 327.465
Expenses
Salaries 8.000 11.000 14.000 16.000
Salary commission 2.700 3.200 3.800 4.200
Director salary with commission 2.000 2.000 2.000 2.000
Phone 150 200 170 250
Water, electricity and heating 2000 2.500 2.300 2.900
Rent 50.000 50.000 50.000 50.000
Safety 1.000 1.000 1.000 1.000
Accountant 800 800 800 800
Maintenance 1.200 1.200 1.200 1.200
Advertising 4.250 4.250 4.250 4.250
Other expenses 1.500 1.500 1.500 1.500
Total expenses 73.465 77.650 81.000 84.100
Net Profit before tax 179.495 206.347 221.770 243.365
Tax 15% 26.924,25 30.952,05 33.265,5 36.504,75
Net profit after tax 152.570,75 175.394,95 188.504.5 206.860,25

Break Even point

It is the point where the revenue or sales of a company equal to total costs. That is, the point where the company has neither profit nor loss. To find the neutral must distinguish between variable and fixed costs of our business. As, we can see in the below statement the breakeven point of "Tsarskaya" creperie will occur in second year of operation.

Cash Flow in $

"Tsarskaya" creperie cash flow yearly 2012 2013 2014 2015
Cash Inflows
Owner Investment 101.370
Beginning Balance 88.635,75 104.730,7 100.000
Cash Receipts 282.960 317.997 340.770 367.465
Total Cash Inflows 384.330 406.632,75 445.500,7 467.465
Cash Outflows
Salaries 8.000 11.000 14.000 16.000
Safety 1.000 1000 1000 1000
Water, electronic and heating 2.000 2.500 2.300 2.900
Advertising 4.250 4.250 4.250 4.250
Accountant 800 800 800 800
Rent 50.000 50.000 50.000 50.000
Maintenance 1.200 1.200 1.200 1.200
Phone 150 200 170 250
Earning Tax 26.924,25 30.952,05 33.265,5 36.504,75
Start up Expenses 101.370 - - -
Total Cash Outflows 195.694.25 101.902,05 106.940,5 112.904,75
Cash at the end 188.635,75 304.730,7 338.560,2 354.560,25
2012 2013 2014 2015
Withdrawals 100.000 200.000 238.560,2 -

* Cash flow is the flow of income and expenditure of money in an account for a period of time. Activities such as funding and donation can be set up to cause cash inflows, while spending unnecessary investments and cash outflows.

8. Risk Analysis

Every business in the first stages can face in front the challenges and failures or in business words the business risks. The "Tsarskaya" creperie due to the new venture at the beginning could face risks associated with sales and delivery service quality. After the economic crisis in 2008 the economic world are in the non-steady that make the new venture risky. Usually the new ventures need to take into consideration the economic and political factors of each country. Below in the market analysis was defined that the U.S. market has slow growth that reduce the risks for the "Tsarskaya" creperie. Also, the companies usually at the first stages face in front the risks associated with low demand. But the most of surveys show that the new ventures failure due to the not detailed market research, underestimate competition and the financial plan is not achievable.

9. Conclusion and Further Suggestions

In conclusion, the current situation in the service market obliges the new ventured to develop carefully the business concept and plan in order to succeed in the competitive market. The business plan for "Tsarskaya" creperie was developed in order to launch new business in the U.S. market and especially in the New York. The market situation analysis show thta the market provide a large amount of advantages and opportunities for the creperie which will provide new differential product such as traditional Russian crepes and pancakes. The creperie all the time was popular place for people who enjoy their breakfast or lunch by eating healthy fast food. The main strategies of the creperie "Tsarskaya" is the expansion in the market with later increasing of market share. The low prices comparing with competitors make the objectives achievable. The creperie "Tsarskaya" has a variety of advantages such as the new business concept with new ideas and differentiation.

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