Business Plan - Pizza Delivery

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Executive Summary

The westside of South Gate has experienced explosive growth the past three years. Over 3,000 new residents live in the westside area. Area businesses are slowly catching up with this new opportunity. Tsunami Pizza is opening a new pizza delivery service that will focus on the westside area.

Currently, the area's closest pizza restaurant takes up to 45 minutes to deliver a pizza. Tsunami will cut the delivery time to no more than 20 minutes. 

Tsunami will offer a better pizza, at a lower price, and will deliver it hot to the customer's door faster than the closest competitor.

1.1 Objectives

·       Capture the majority of the pizza delivery business in the westside area.

·       Offer our customers a superior product, at a low price, and provide customer service that is second to none.

1.2 Mission

Tsunami Pizza's mission is to offer residents of the westside the best pizza delivery service in the city.

1.3 Keys to Success

·       A superior product that will promote customer loyalty.

·       A business location that will assure that the pizza will be delivered quickly.

·       Delivery people that have great customer skills.

Company Summary

Tsunami Pizza is a new pizza delivery service started in the city's westside area. John Lindsay, owner of Tsunami Pizza, has seven years experience in the restaurant industry. His focus is to satisfy the customer's demand for a quality pizza that is delivered quickly with a smile.  Tsunami Pizza will serve a seven mile area with over 25,000 residents. Overhead will be kept low so that Tsunami Pizza's prices will beat the competition. Delivery people will use their own vehicles so the business will not have to purchase delivery vehicles.

2.1 Start-up Summary

The start-up cost of Tsunami Pizza will consist primarily of kitchen equipment. John Lindsay will invest $50,000.

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2.1.1 Company Ownership

Tsunami Pizza is owned by John Lindsay.

Start-up Requirements
Start-up Expenses
Legal	$1,000
Kitchen Inventory	$5,000
Delivery Paper Products	$3,000
Leased Kitchen Equipment	$20,000
Insurance	$1,000
Rent	$1,000
Promotional Signs for Delivery Cars	$2,000
Expensed Equipment	$0
Business Sign	$4,000
Other	$0
Total Start-up Expenses	$37,000
Start-up Assets
Cash Required	$5,000
Other Current Assets	$0
Long-term Assets	$8,000
Total Assets	$13,000
Total Requirements	$50,000

Start-up Funding
Start-up Expenses to Fund	$37,000
Start-up Assets to Fund	$13,000
Total Funding Required	$50,000
Assets
Non-cash Assets from Start-up	$8,000
Cash Requirements from Start-up	$5,000
Additional Cash Raised	$0
Cash Balance on Starting Date	$5,000
Total Assets	$13,000
Liabilities and Capital
Liabilities
Current Borrowing	$0
Long-term Liabilities	$0
Accounts Payable (Outstanding Bills)	$0
Other Current Liabilities (interest-free)	$0
Total Liabilities	$0

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Capital
Planned Investment
John Lindsey	$50,000
Other	$0
Additional Investment Requirement	$0
Total Planned Investment	$50,000
Loss at Start-up (Start-up Expenses)	($37,000)
Total Capital	$13,000
Total Capital and Liabilities	$13,000
Total Funding	$50,000

 

 

2.2 Company Locations and Facilities

Tsunami Pizza will be located at the corner of 11th and Tyler.  These two streets are the area's busiest and provide easy access to our service area.

3.0 Products

Tsunami Pizza will offer a wide variety of New York style pizzas, as well as sodas and fruit juices.

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4.0 Market Analysis Summary

The westside is a growing middle-class area with 25,000 residents.  A majority of these residents are families of four or more.  The average income for the area is $38,000.   The boom in the area is primarily in response to new employment opportunities in the city's Westside Industrial Park.  Businesses that traditionally do well with this population have demonstrated the potential for Tsunami Pizza.  A neighbor of Tsunami Pizza, Magic Videos, has been in operation in the area for a little over a year.  Magic Videos is the closest video store serving the westside area. Their sales have grown by 40% due to its location and the absence of direct competition in the westside.

With continued growth in the area, opportunities to serve the westside residents will increase.   The company will sell predominantly to individuals, but it will also accept some catering jobs to individual parties and company functions in the westside.

5.0 Strategy and Implementation Summary

Tsunami Pizza will use advertising to promote the business.  We will use the local westside flyer to advertise.  In addition, we will hire people to hold signs at the corner of 11th and Tyler. We will also use door handle flyer promotion throughout the westside neighborhoods.

Our most important promotion will done in conjunction with Magic Video.  We will offer a two for price of one video coupon with each purchase at Tsunami Pizza that can be used at Magic Video.  Magic Video will offer its customers a $2 off coupon that can be used at Tsunami Pizza.

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5.1 Competitive Edge

  Tsunami Pizza's competitive edge is:

·       Location:  Tsunami Pizza is located in the heart of the westside area on the corners of 11th and Tyler.  These two streets are the area's busiest. The closest pizza restaurant to the westside area is a fifteen minute drive. Tsunami Pizza can deliver in half the time of its competitors.

·       Low Overhead/Lower Prices: Since Tsunami Pizza only delivers pizza, its prices don't reflect overhead demands of a traditional pizza restaurant.

5.2 Sales Strategy

The sales strategy of Tsunami Pizza is simple. First, offer the customer a superior pizza at a low price. Second, make sure that pizza is delivered quickly. Third, the delivery people must work to create customer loyalty.

5.2.1 Sales Forecast

The following is the sales forecast for three years.

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Sales Forecast
	Year 1	Year 2	Year 3
Sales
Pizza/Drinks	$162,500	$178,000	$195,000
Catering Income	$14,000	$18,000	$24,000
Other	$0	$0	$0
Total Sales	$176,500	$196,000	$219,000
Direct Cost of Sales	Year 1	Year 2	Year 3
Pizza/Drinks	$24,500	$30,000	$36,000
Catering Income	$1,400	$1,800	$2,400
Other	$0	$0	$0
Subtotal Direct Cost of Sales	$25,900	$31,800	$38,400

6.0 Management Summary

John Lindsay will be the manager of Tsunami Pizza. John started as a waiter at the city's famous Sweetwater restaurant. At the time, John was in his junior year at Robertson University. He graduated in 1995 with a BA in history. Soon after graduation, John was offered the position of shift manager at the Sweetwater. He has held that position for five years.

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6.1 Personnel Plan

The Tsunami will have the following staff:

·       Manager.

·       One kitchen staff.

·       Two delivery staff.

Personnel Plan
	Year 1	Year 2	Year 3
Manager	$30,000	$34,000	$38,000
Kitchen Staff Member	$24,000	$25,000	$29,000
Delivery Staff (2)	$36,000	$37,000	$38,000
Other	$0	$0	$0
Total People	4	4	4
Total Payroll	$90,000	$96,000	$105,000

7.0 Financial Plan
The following is the financial plan for Tsunami Pizza

7.1 Break-even analysis
The following table and chart show the break-even analysis

 

Break-even Analysis
Monthly Revenue Break-even	$12,803
Assumptions:
Average Percent Variable Cost	15%
Estimated Monthly Fixed Cost	$10,925

7.2 Projected Profit and Loss
The following table and charts show the projected profit and loss for three years.