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Cookies Manufacturing Business Plan

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CHAPTER 1

Executive Summary

Cookies are small, sweet pastry delicacies cooked using flour, eggs, sugar, butter, cooking oil, or alternative cooking oils or fat as ingredients. Baking cookies that are appealing in both appearance and taste requires experience and elaborate recipes. Over the years, cookies baking has revolutionized to incorporate cultural delicacies through the inclusion of ethnic extracts. In an industry fully accomplished on the quality front about the baking process, interest has shifted to creative ways of providing a better appearance or added benefits from eating cookies, all to gain a competitive advantage in the industry. The recent food customer’s shift towards healthy food products has led the creatives in the cookie industry to incorporate health extracts in the standard cookie production process. The ‘healthy’ cookie offers a myriad of health benefits, in addition to a tasty biting previously provided by the regular cookie.

Elly Catering Enterprise is a cookie production and selling company developed with the ‘healthy’ cookie concept in mind. Elly Catering Enterprise produces Schisandra Chip Cookies, Bacopa Cookies, and Eleuthero Chip Cookies. These cookie products offered by Elly have several health benefits. For instance, the Schisandra Chip Cookies improve physical efficiency and endurance; therefore, they are suitable for persons doing manual work or physical exercises. Bacopa Cookies improve cognitive stimulation and mental acuity for patients suffering from a near-mental breakdown. Finally, the Eleuthero Chip Cookies boost the functioning of the kidneys and the spleen. Elly Catering Enterprise endeavors to capture the health enthusiast market through these three types of ‘healthy’ cookies.

Elly Catering Enterprise is divided into three departments: namely, the production department, which bakes the cookies, the sales, and marketing department, and the procurement department, which will be tasked with the acquisition of raw materials and other items required by the employees of Elly Catering Enterprise.

This business plan relates to the functioning of Elly Business Enterprise. It seeks to project the costs and returns about Elly Catering Enterprise’s functioningThis business plan also explains the operations of Elly Catering in terms of the operational procedures, duties of employees and their designations, and the organizational structure showing the chain of command. The first section of the business plan deals with an in-depth description of the business of Elly Catering. The second section deals with the marketing plan and strategies. The third section deals with the organization and management plan, showing the designations and duties of key personnel. The fourth section deals with an operational plan covering the production process, production strategies, and laws regarding production. The final section of the business plan deals with the financial plan for Elly Catering Enterprise, whereby financial aspects of the business of Elly Catering are considered.

Business Description

Business Name

Elly Catering Enterprise is the business’s name, which will be involved in producing and selling healthy cookies to customers. The name was derived from the owner’s name who first came up with the idea- Elijah Mutu. Elly Catering Enterprise is a partnership composed of three owners and seven assistants, and staff. The enterprise bakes healthy and supplemental cookies to a range of consumers. The cookies will be of different types, although the distinguishing characteristic is that every cookie has its uniqueness depending on the kind of supplement. In addition, the cookies will contain herbs that boost mental and physical performance and a range of other accessories. 

The Elly Catering enterprise aims to merge health supplements in cookie form and encourage consumption. Most consumers are reluctant to consume various herb products like Moringa, Eleuthero, and Schisandra partly because of color, texture, and perhaps taste. Schisandra, for example, is a mild and tonic fruit extract with myriad health benefits. However, it is evident that despite medical efforts to integrate this supplement in the form of capsules and syrup, consumers are still not convinced to embrace it as part of regular eating. Therefore, Elly Catering will strive to integrate healthy supplements in consumer products like chip cookies.

Business Location and Address

The diversified business will be located in selected locations; Nairobi CBD, Adams Arcade, and Thika Road Mall. For a start-up, the initial enterprise will exclusively be based in TRM (Thika Road Mall) to cover the fast-growing population. The location in the middle of the city is ideal for the enterprise because of the number of people, which exceeds 5 million. The site also has promising surrounding estates, including offices. The targeted area features both high and middle-level households, and the ideal being capital city makes product offerings open to a range of visitors across Kenya. TRM is also suitable as it features minimal baking stores, although the population is promising in terms of number, location, income levels, and status.

Type of Ownership

The owners of the enterprise will manage operations and ensure they meet expectations. They will divide roles by purchase ingredients from credible and cost-effective dealers and will be responsible for paying rent and making monthly payments to workers. The three founders’ responsibility will be to source best market practices, identify entry points and manage strategies. The founders of Elly Catering Enterprise will constantly meet to develop a plan and design the desired stewardship for the enterprise. Where possible, roles and responsibilities will be divided, shared, shifted, and transferred based on new market dynamics and changing business models (Nelson, 2014). 

Type of The Business

Elly Catering Enterprise is a partnership whose success will depend on individual effort and contribution. Elly Catering is a partnership type of business, meaning that management and critical operations will be easy and fast to handle. The store will feature three other assistants, three professional bakers, and two salespersons. The salespeople will develop marketing and advertising programs by carrying out digital and social media campaigns. The sales division will also handle the packaging and delivery of healthy cookies for relatively long-distance customers. Part of sales will display cookies on shelves and ensure that maximum display is achieved at the least cost. Upon successful response in the target market, the sales, marketing, and distribution chain are likely to diversify and gradually feature an expansive working space behind the store. 

Elly Catering Enterprise is likely to commence operations on 1st August 2016, after the marketing team has carried out a proper assessment of the target market and furnished the owners with the report of that inquiry into the viability of the need for investment and the possible product positioning strategies.

Product and Services

Chip Cookies

The default products by Elly Catering are chip cookies. Taking the form of a thin and butterscotch cookie, the idea was first postulated by Ruth Wakefield more than 50 years ago. 

Cookies Manufacturing Business Plan

The cookie pioneer discovered that thin and chip-like cakes would be a preference for consumers, especially with the ease of preparation and serving. However, the original version of chip cookies was chocolate, although modifications have been done that address the initial concept in multi-dimensional ways. The chip cookies for the Elly Catering enterprise will be of different kinds and shapes, and the type of supplement will determine this. To cater to a start-up, the business will feature three primary types of chip cookies.

Schisandra Chip Cookies

Schisandra is a mild antitoxic and depressant highly used for treating insomnia and amnesia. As a traditional African medicine, Schisandra is a fruit and has for time immemorial used to increase physical efficiency and endurance. A tested and proven supplement, Schisandra is not known by many but is highly acknowledged as a traditional oxytocic and antidepressant. Schisandra Chip Cookies by Elly Catering will feature the accompaniment in its native form with no additional ingredients. 

Schisandra Chip Cookies

The chip cookies will come with ice cream toppings or chocolate additives, milk, and a fair amount of sugar. The supplements will be sold in packaged bags, each holding ten, twenty, and forty units. Research studies point that daily consumption of Schisandra is good for mental and physical performance, and no associated health conditions are linked with it. The Schisandra Chip Cookies, therefore, remains a classic option for people who want to enjoy healthy delicacies while at the same time meeting increased health performances from the Elly Catering enterprise.

Bacopa Cookies

Bacopa is aerial parts of a traditional plant often used to treat mental breakdown and nervous disorders like epilepsy. Bacopa cookies from Elly Catering will feature, among other things, a considerable amount of sugar, 2gm of delicate ground bacopa shoots, milk, eggs, flour, and water. Food color will be a classic additive to ensure that consumers embrace it as any other type of cookie. Scientific studies advanced on Bacopa reveal that doctors and psychologists assume it for cognitive stimulation and mental awakening for patients suffering from a near-mental breakdown.

Bacopa Cookies

The cookies, therefore, will be in line with tested and proven clinical trials and scientific studies. The only concern in this form of offering is whether the quality and standard of pure ground Bacopa shootings and other aerial parts of the plant will be affected by milk and eggs. Fortunately, like most other herbal plants and supplements, the effectiveness and response of plants are hardly affected by milk, sugar, and other additives. This is because most additives are organic (from plants or animals) and not chemically formulated. This provision will credit the performance of Bacopa cookies and hence a sermon most Elly Catering consumers will like to hear.

Elly Catering will ensure that the above cookies meet people’s dietary needs and squarely address competition by designing cookies with healthy supplements. In addition, the brands mentioned above of cookies will constantly be developed through new baking practices to ensure a continuous product improvement that meets the needs of a competitive marketplace. This means that addressing the health needs of consumers will require edging the capability of Elly cookies – Chip cookies, Eleuthero, Bacopa, and Schisandra.

Eluthro Chip Cookies

This is the last offering in the new platform Elly Catering Enterprise. Eleuthero is extracted from the roots of the senticosus and is used to reinforce pi, boost the function of the kidney and enhance the functioning of the spleen. Author Chip Cookies will come in the best shape, rounded, and feature the native Eluthro fine ground roots. The cookies will be targeted to consumers who want a range of benefits, including:

  • Eliminating debility and exhaustion
  • Improving physical performance and boosting endurance
  • Boosting mental functioning, memory, and concentration
  • Improving response to stress
  • Eliminating nervous disorders

The cookies, going by the sour taste of Eleuthero, will feature tasty ingredients to improve taste and boost customer experience. In addition, the cookies will be baked in a more improved style than the three Bacopa, regular Chip Cookies, and Schisandra to help improve the state of consumption and response by customers. The Eleuthero cookies, although targeting a specific category of consumers, will also be marketed to wider audiences to ensure that sales are not restricted to a particular segment of the market.

Justification of Business Opportunity

A detailed observation revealed that most teens and adults are addicts of cookies.

Elly Catering firm comes in to sell sweet cookies made of different tastes, which as affordable. The same applies to the current trend of poor catering services that sell tasteless and expensive cookies in the market.

There is no similar catering business around since the only two available ones sell expensive and one type of cookies. Very few people buy these cookies because they have no choice. I have collaborated with a qualified nutritionist to help me have the perfect mix of healthy cookies.

Industry

There is an excellent possibility of succeeding in this partnership, given the importance of health to people. There are various herbs and medicinal supplements in the market that are yet to be consumed by people – partly because of color, taste, texture, and related factors. The belief that some traditional herbs and medicines fall short of professional approval makes it hard for consumers to embrace traditional supplements. Making healthy medicinal additions consumable will be a milestone in the food industry and the medical world. Therefore, the business idea remains feasible and unique. From a personal experience, I have developed an interest in medicinal products and food offerings since childhood. The Healthy Cookies Enterprise will be built on experience and sound. Going by its nature of improving health and increasing consumer offerings, it is undeniable that people will crave the cookies, especially if they are well aligned with personal values and interests.

The marketing plan is intended to introduce Elly products to the marketplace currently controlled by other suppliers. As a start-up partnership, Elly Cateringunderstands that consumers are now being served various consumables, including cakes, biscuits, toppings, and different types of products. As such, this marketing plan strives to ensure that Elly will gain a firm footing in the marketplace and offers marketing, advertising, and promotional strategies central to developing the enterprise in new markets. The supplements sub-sector have been open for access and production of enough raw materials. However, there is the need to consider various varieties of supplements compared to their accessibility and productivity. 

Business Goals

  • Vision

    • To be a reliable and trusted dealer in healthy cookies.
    • To offer long-term catering solutions that meet consumer needs and satisfy human dietary needs.
  • Mission
    • To create a culture of a healthy diet daily.
    • To offer cookies that meet human dietary needs and which are different from contemporary ones.
  • Business Objectives

  • To be a leading provider of chip and healthy cookies in the form of; Eleuthero, Bacopa, and Schisandra by the end of five years.
  • To expand our distribution channels to significant towns in neighboring counties in five years.
  • To achieve and maintain an average customer rating of 4.0 (out of a possible 5.0) on our online review dashboard at our website.
  • To attract 50 new customers every month through marketing strategies and product positioning.
  • To include 15 outside catering sales operations in each financial year, serving the herbal cookies in conferences during tea breaks. Doing to high-end companies in the corporate world will be a new frontier for enabling Elly Catering Enterprise and a great way of diversifying clientele.
  • To expand operations to the outskirts of Nairobi and neighboring towns, such as Thika and Murang’a, in 10 years.

Entry to Growth and Strategy

The catering business offers discounts in the first quarter of the business trading year to individuals after the company commences; this is to attract more customers. The firm also provides value to individuals who will purchase the products in large quantities, drawing many customers and boosting sales. The products to be offered by the enterprise are to be price friendly to the potential customers; this will result from our reasonable cost of production hence cheaper products compared to other products made out of different materials like local wheat.

The enterprise offers after-sale service programs to the estimated customers, e.g., loading cookies bought from the firm to the customer’s carriage means. In addition, the business intends to advertise vigorously to potential customers by employing an individual to do the advertisement by, e.g., going to farms where raw materials are mostly grown and universities where cookies are often eaten.

Marketing Plan

Product Positioning

Elly Catering Enterprise will be located in Thika Road Mall. Thika Road Mall is near offices and residential estates, which provides a strategic location for Elly Catering Enterprise. Thika Road Mall is also one of Nairobi’s prime shopping locations, so the targeted population is large. Marketing for Elly Catering Enterprise will seek to appeal to health products enthusiasts and anyone who likes snack delicacies, who are our target customers. 

For the first three months, Elly Catering Enterprise will use billboards for marketing its consumables. A total of 20 billboards will be erected in the first month. It will solely advertise the services offered by Elly, including chip cookies, healthy cookies, outside catering, and other catering solutions. 

Social media campaigns will later be used for consequent months to reach out to retail stores, wholesalers, food stores, and supermarkets. Elly Catering’s sales team will establish different social media handles; Facebook, Twitter, Pinterest, Instagram, and YouTube channels to connect to retailers and wholesalers offering similar services. Also, to develop social relationships with potential clients. In addition, the social media handles will create updates on new cookie solutions by Elly Enterprise and update potential consumers on available healthy cookies such as Bacopa, Eleuthero, and Schisandra. 

The use of targeted content and digital marketing is another outreach approach in the marketing strategy. Elly Enterprise will contract a web designer who will come up with a responsive web platform that allows the company to post the offered products [chip and healthy cookies], services [outside catering and other catering solutions], ordering [for retails that want to order online], and payment [wire transfer]. In addition, the website will support news and blogs. In the website’s blog section, there will be targeted content that tells the story of Elly Catering, how it started, the discovery of healthy cookies, and unique solutions in catering. 

Articles will also address; changes in cookies based on culture, new trends in catering, how consumers fail to choose health supplements in the form of biscuits and cakes and outside catering, and how to use creative baking solutions in meeting two or more consumer needs. In addition, content with targeted keywords related to Elly’s business model will optimize search engines and allow businesses, clients, and consumers to discover what Elly Catering does to consumers, retailers, wholesalers, food stores, and supermarkets. 

Other outreach and marketing approaches include; television advertisements, radio adverts, posters, and magazine articles. In addition, Elly Catering constantly encourages referrals from the first clients to create many consumers such as retailers, local shops, restaurants, baking stores, wholesalers, and supermarkets. 

Customers

The cookies will target a selected nature of consumers; teenagers, young adults, and typical adults. The cookies will be discouraged by kids because young children might not have the capacity to synthesize organic nutrients since most are purely herbal. The cookies will be sold to passersby in Nairobi streets, although they can be distributed to popular stores, supermarkets, and bakeries depending on market response.

Targeted consumers are people with a specific psychological setup. They are individuals who believe that cookies are simple, cheap, and portable than most consumer products. The targeted clients are individuals with a solid preference for mental and physical well-being. The fact that Elly CateringEnterprise will feature three unique offerings makes it easy to capture similar-minded individuals. The business will also target a special kind of consumer – the elderly and those with health concerns. The elderly who are aged explicitly between 60 and 70 are legible to consume the cookies, especially when soaked in milk or tea. A selected type like Schisandra and Eleuthero feature health benefits that can significantly help to age. 

Reduced mental performance, kidney failure, memory loss, and insomnia are conditions affecting the elderly and a significant portion of patients and healthy people. The cookies, therefore, target this class of people by promising unique health benefits and increasing consumption – taste, and hunger. Other market factors to consider for the new business are; geographic setting, demographic characteristics, industry outlook, size of the market, segments of consumers underserved by the market (Nelson, 2014). It will also be essential to consider factors that will boost consumer interest in securing herbal cookies. Therefore, other customers can be university students, primary pupils, and parties, and wedding events. 

Market Competition

Patco Candy LimitedBritania Products, and Cadbury Chocolates pose as the most significant competitors. Patco Candy offers candy, lollipops, and expert food packaging, and it was established in early 2000 in Nairobi, Kenya. Featuring 11 – 50 workers, the store has been able to cater to the growing craving for chocolate cookies and lollipop products by locals. However, since it offers candy products, the store poses as a competitor as it can alienate consumers’ attention from the primary offering by Elly Catering – chip cookies.  

Britania began as a hotel production company for bakery raw materials. The company currently serves in the design and development of doughnuts and cookie equipment in Kenya. It believes that increased service, innovation, and diversification are crucial to market success. As a result, the company has developed affiliated candy stores that deal with doughnuts and cookies. A selected number of connected stores test the machinery by carrying out long-term testing and evaluation (Park, 2000). Although some get access to supermarkets and food stores, the baked products are sold to shops and stores, although some get access to supermarkets and food stores. Although not directly a competitor, Cadbury offers products that can in some way stand in the form of Elly Catering Enterprise.

Britania. is a food manufacturing company with a specialty in high-edge yeast products. It offers instant dry yeast that is baked, packaged, and branded. Most offerings are a high preference to segmented markets. Nevertheless, Cadbury has managed to create a good customer baseline. It poses as a competitor because of its ability to feature dry yeast-based products.

The company is located in an ideal location in Nairobi that is the target center for Elly Catering Enterprise. As a result, it is likely to influence a range of consumers, including those who eat dry yeast, cookies, and high premium products like cakes and bread. The company has been in existence for over ten years with more than seven participation and more than fifty workers. Patco and CadburyCompanies are stiff competitors due to their similarities with cookie products offered by the new business (Mburugu, 2013). 

The most direct competitors for Elly Catering Services are cake bakeries in Nairobi, which also happen to make cookies as side products. The cake manufacturers most prominent in Nairobi include Valentine Cake House, Black forest House cakes, Sweet Inspirations, and Ennsvalley bakery. California cookies is also a significant bakery in Nairobi serving flavored cookies. In addition to these established competitors, several homemade cookie bakers might present some competition. These homemade cookie producers usually sell to kiosks, schools, and sometimes supermarkets. Resources limit their operations. They may also occasionally sell over social media. An example of these homemade cookie businesses is Deliciousness, located along Mbaazi Road in Lavington, Nairobi. Elly Catering Enterprise will endeavor to create a competitive edge over these competitors by combining delicacy with health through the use of herbal supplements, something that no other competitor has managed to effect.

Methods of Promotion and Advertisement

Promotional Strategies – Social Media and Digital Platforms

Promotional strategies will include social media and digital marketing. The business will create clear pictures and labels of the four product offerings and design corresponding ads. The company may also decide to bake the four offerings, leverage a professional photographer who will capture different stages of preparation, and come up with quality photos. These pictures will be distributed to individuals with many followers on social media who will begin a campaign to establish the Elly Catering Enterprise brand and create awareness across social media and digital platforms. 

Pricing Strategies

The pricing strategies will be low and market-friendly. The marketing plan aims to bake products that meet the budget and expectations of consumers. The price will differ, with Schisandra being relatively expensive than Eleuthero and Bacopa. The cost will be compared with competitors’ offerings – baking stores, shops, supermarkets, and related food businesses. Part of the marketing plan is to feature products within the budgetary needs of consumers and gradually alienate them from other products offered by the competition. 

Product Strategy

Product strategies are the final component of the marketing plan. The cookies will be packaged in a protective but straightforward way. Transparent, relatively hard plastic covers will be used to store the cookies in units of 10, 20, and 30. The surfaces should not allow air or water and should provide a clear view of the cookies, including color and a general perspective of the texture. The image of packaging will strive to portray simple, safe, and standard cookies. The solid and rigid packaging will also feature stickers that briefly describe the cookie type, price, and manufacturer.

Type: Bacopa Chip

Price: Ksh. 20

Manufacturer: Healthy Cookies Enterprise

Sales Tactics

All customers will contact the sales department through social media awareness and digital marketing. These activities will include; posting baking processes and operations on YouTube, sharing end cookies on Twitter, taking photos, and posting on Instagram and related forms of advertising. They will also contact stores and supermarkets and introduce the products to potential high-scale buyers. Any other process related to marketing and distribution is located under the salesperson, including making phone calls to respective buyers, contacting bakery platforms, collaborating with digital food agencies and programs – and developing periodic marketing campaigns. 

Two salespersons are responsible for developing external relationships with supermarkets, store outlets, and other relevant parties. Also, ensure that Elly Catering is successfully able to outsource new individuals and group consumers. Part of the above role is to constantly develop social media campaigns, visiting shopping centers, and establishing outreach approaches for the enterprise.

Distribution Strategy

Producer                                  Consumer

This simple and direct channel will cut down on costs and promote personalized customer service. It also prevents the possible watering down of the quality of services offered by using intermediaries to get to the customers.

Elly Catering services intend to sell its products to its customers directly, its retailers, and whole sellers. This customer will be coming to the firm to purchase products. Therefore, the owner will learn the taste and preferences transportation will be offered to frequent customers who will buy goods in large quantities. As a result, the business will face problems such as an increase in the cost of transportation, excess demand and supply, and uneven population distribution. However, the company will be able to cope with conducting by trying to minimize the operational cost by conducting feasibility studies and only delivering its services to profitable areas.

Organizations and Management Pan

ORGANIZATIONS AND MANAGEMENT PLAN

The owners of Elly Catering Enterprise will be actively involved in its management in the following roles;

The three partners will be responsible for various tasked based on the strengths and areas of specialty. One partner will lead product development in outsourcing for cost-effective ingredients and commodities, ensuring proper balances in extracts, and ascertaining the size, form, and status of baked cookies. Above personnel will constantly provide a balance between consumption and demand. This means the product meets the current consumptions without surpluses or shortages. 

The second partner will cater to external business matters, including; business location, marketing oversight, competition, new products, and identifying talent. The partner will ensure the products can gain the scope of the business in terms of quality and standard output. This means working together with the sales team to establish new markets for products and pitch for high-end clients and consumers. The second partner will also lead product branding in terms of packaging and labeling. This will be done to ensure the product appeals to the needs and concerns of consumers.

The third partner is tasked with maintaining the records, finances, and budgets. They are making financial forecasts and establishing purchasing habits. He shall be charged with procurement functions as the procurement officer. The personnel will work closely with the two other partners to ensure purchased products and ingredients meet production needs without going further beyond set budgets. They are also recording sales, expenses and dealing with tax issues.  

Production Workers

The management of Elly Catering Enterprise will involve reporting, timetables, schedules, and monitoring of different heads. Part of the management will be the identification of key players such as active investors and directors. In addition, part of management will be to constantly source talent, develop skills in baking cookies, and identify trends in the industry. 

Manager – The founders will constantly meet to define the enterprise’s direction and create a plan for the enterprise. This means setting goals, redefining objectives, making forecasts, and outsourcing operational capital (Marris, 2003)

Investors – There are no distinct investors for the enterprise. However, Elly catering seeks to leverage people willing to invest in cash and assets and repaid from monthly revenues. Investment positions will be availed two years of Elly’s operation in the marketplace.

Directors – The Company’s directors are the founders. Being a start-up, the company seeks to maintain a narrow and flat structure to facilitate fast communication, eliminate management barriers, and focus more on product development, sales, and marketing (Mburugu, 2012). Once the enterprise expands to new territories, including regional and international, a board of directors will be established to advise Elly Catering on viable entry points and investment opportunities.  

Elly Catering Employees Job Descriptions

Chefs– Bakers will be tasked with ingredient weighing. They will be required to determine quantities and degrees and ensure they meet baking needs. Part of this role will be mixing and diving. They will leverage set tools and equipment in mixing ingredients and dividing the mixture into amounts likely to yield the desired size and shape. Heating, molding, and depending will be part of the process, and this will be based on the type of offerings – chip cookies, Bacopa, Eleuthero, and Schisandra. Healthy ingredients including; Eleuthero, Bacopa, and Schisandra will be included in the recipes in required proportions and rations. The chefs will be able to execute the recipes given and ensure healthy ingredients are included so that they do not compromise the output of the cookies (Nelson, 2013).

Professional Chefs: Three professional chefs will be tasked with coming up with a detailed list of ingredients and developing periodic recipes. For supervision and management functions, one chef will assume administrative tasks of managing the production department as the head production chef. Part of the above responsibility will be to oversee culinary staff, place orders for required ingredients, and oversee the preparation of cookies. Chefs will further be tasked with balancing books, filling orders, assessing the skills of new chefs, and catering to customers/clients.

Trained chefs and bakers will be responsible for coming up with the recipe, purchasing ingredients in high-end locations, and manufacturing the cookies. Part of their responsibility will be to identify key baking components, manage developments and ensure streamlined baking and preparation processes. In addition, to work with the second partner in outsourcing native Bacopa, Schisandra, and pure ground Eluthro supplements from credible dealers. Finally, the chefs will be tasked with heavy albeit short-term manufacturing and ensuring processes meet quality standards in the food industry – cleanliness, hygiene, proper baking, quality, and healthy products.

Transport Officer – A transport officer will be tasked with the transport logistics and ensuring that pre-ordered products reach the customer in good condition and promptly.

Recruitment, Training and Promotion

Recruitment

The business intends to recruit its staff two months before the start of the company. The applicants will be got through the advertising that will be done through; radios and pastor. Recruitment for the top management who will have the requirement will send their applications to the General manager, i.e., the business owner and all applications accepted would be replied to. This will be after carrying shortlisting process based on experience, qualification, age, and quality of the applicant. The other posts like the loading staff will be considered based on physical fitness and age.

Training

The enterprise is to offer an orientation before the start of duties by the staff to enable familiarize them with the place and regulations. The enterprise also provides on-job training after the business commences to specified employees such as the hospitality institute. The other staff will be exposed to seminars to perfect production.

Promotion

Promotion will be evaluated based on performance and discipline and experience, and qualification. The business will recognize the best-performing employee by giving awards to motivate them.

The experienced and qualified employees high consider during promotion strategy. This will involve the top management team. This factor will help carry out promotion considerably.

Remuneration & Incentives

The owners of Elly Catering Enterprise will set wages for employees of Elly Catering Enterprise after considering such factors as production quantity achieved and the salaries of employees with the same job descriptions in other companies. Incentives shall be set, particularly for the sales personnel, to encourage a better sales volume. Incentives will involve a cash bonus at a rate appropriately set by the owners through consultations with the employees. Provisions will also be charged for overtime pay so that in times of peak sales, the baking process can keep up with the demand.

Support Services

Elly Catering Services will perform several support services to build customer goodwill and encourage repeat purchases. Support services will include providing appropriate packaging at the customer’s request at no charge, such as gift-wrapping. Transport services will also be offered to customers in distant locations at a small fee.

Chapter Four

Operation Plan

Production Facilities

Elly catering services uses the working name “Ellies” to symbolize a new catering business idea. The company will grow from a tiny catering company (averaging just a few jobs each month) into a thriving community venture. The service will bring meals to locations throughout campus for parties of up to 100 individuals, and will include special cookies in addition to vegetarian meals (low fat, gluten-free, nut-free, egg, and dairy-free, etc.). The food will be of “distinctive” quality: international cuisine; innovative, diverse, and appealing cuisine; and never the same old sandwiches as other caterers. Wherever feasible, it will strive to be organic, GM-free, and fair-traded, using as many local ingredients as possible, including those produced on the farm.

Production Strategy

The owners of the enterprise will manage operations and ensure they meet expectations. They will divide roles by purchase ingredients from credible and cost-effective dealers and will be responsible for paying rent and making monthly payments to workers. The three founders’ responsibility will be to source best market practices, identify entry points and management strategies. The founders of Elly Catering Enterprise will constantly meet to develop the plan and design the desired stewardship for the enterprise. Where possible, roles and responsibilities will be divided, shared, shifted, and transferred based on new market dynamics and changing business models (Vivaldo, 2014). Elly Catering Enterprise is a partnership whose success will depend on individual effort and contribution.

Elly Catering Enterprise is a partnership type of business, meaning that management and critical operations will be easy and fast to handle. The store will feature three other assistants, three professional bakers, and two salespersons. The salespeople will develop marketing and advertising programs by carrying out digital and social media campaigns. The sales division will also handle the packaging and delivery of healthy cookies for relatively long-distance customers. Part of sales will display cookies on shelves and ensure that maximum display is achieved at the least cost. Upon successful response in the target market, the sales, marketing, and distribution chain are likely to diversify and gradually feature an expansive working space behind the store.

Monthly Production Cost

The production strategy employed by Elly will be determined by the source and amount of capital present. The source of capital will be personal savings and a short-term business loan from a local bank or lending institution. Each of the three partners will be expected to contribute a total of Ksh100 000 upon which they will own specific percentages of the company based on their initial investments. Elly Catering Enterprise is expected to have 300,000 in founders’ investments and another Ksh.200,000 from the bank loan. 

In total, the company will have Ksh.500 000 as start-up capital. This sum will cover different start-up expenses, including rent, the purchase of ovens, plates, utensils, display racks, shelves, furniture, and any other equipment and machinery. Part of the capital will be to drive advertising and marketing in targeted content, ads, website costs, and digital marketing programs. Part of the above investment will be used for rent and monthly payment of staff. The ksh.200 000 loans, on the other hand, will be used for purchasing equipment, sourcing workers/personnel, and building a sales and distribution social media and digital marketing system.

The capital for the start-up will be segmented and used in parts. Doing this will minimize stark losses in case the concept fails to capture the interest of target customers. Using the capital sustainably is to examine spending and expenditure on rent, ingredients, technical and human resources. With three committed founders of Elly enterprise, it will be prudent to leverage professional assistance in managing available resources alongside delivering standard and consumer-friendly cookies. This capability will be achieved by outsourcing, and in part learning best business practices.

Monthly Production costs for Elly Catering Enterprise

Costs
Wages 320,000
Rental payments 20,000
Operational costs 120,400
Taxes 32,245.67
Purchases 4,500
Administrative costs 50,000
Water and electricity bill payments 40,000
Total 587,146

Production Process

Elly Catering enterprise will operate for six days in a typical week, excluding Sundays. Working hours will be between 8 am to 5 pm during the working days. Due to the initial scale of operations of the Elly Catering enterprise, the production process will be simple and straightforward. After the production staff has arrived at the workplace place at 8 am, and the supervisors have conducted a briefing, they will make cookies. Afterward, the packaging of the prepared cookies will be done. They will be stored at a temperature and moisture-appropriate place in the store not to lose their flavor and crispness and avoid contamination.

The supervisors will consult with the sales personnel to moderate production levels with sales projections. In addition to this, the supervisor will be tasked with ample readymade cookies in the stores to cater to rises in demand during peak hours of the day. The supervisor will also be required to do product control, ensuring that the taste, appearance, and size of the cookies comply with the standard set forth. Arrangements will be made with transport providers to transport pre-ordered cookies that reside at the outskirts of Nairobi or other regions of the country, and transport charges will be factored into the order price.

Rules and Regulations Affecting Production

Elly Catering enterprise shall be subject to the rules and regulations of the state regarding the production process. These regulations are found in the Food, Drugs, and Chemical Substances Act of 1978. The stipulations in this Law require that;

  • Premise not to be used unless licensed. Licensing should also be up to date; that is, the premise license should be renewed s and when required.
  • Growing and harvesting operations to be pure.
  • Grounds surrounding a food plant to be kept free from contaminating conditions.
  • Layout and construction of food plants and facilities; in this regard, all food plants shall be of suitable design, layout, and structure to facilitate easy maintenance and sanitary operations. For instance, it is a requirement that sufficient space is availed for such placement of equipment and storage of materials as is necessary for hygienic operations. There should also be adequate lighting and adequate ventilation or control equipment.
  • Equipment and utensils to be used for their appropriate uses
  • Sanitation of food surfaces and utensils as well as equipment to be highly maintained
  • The food production unit to be correctly maintained, and repairs are done when warranted.
  • All operations in the receiving, inspecting, handling, segregating, preparing, processing, storing, and transportation of food are conducted hygienically.
  • Concerning packaging, the container should be embossed or otherwise permanently marked in code or clear to identify the producing factory and the lot.
  • Thorough medical examination of the personnel who are working in direct contact with food, food ingredients, or food contact surfaces

Elly Catering Enterprise will adopt the above regulations and incorporate them into the production process to ensure that they offer safe, hygienic, and healthy cookies. Due to the nature of the production process at Elly Catering Enterpriseinvolves introducing nutritional supplements into the ordinary cookie baking process, a clear rule in the production process will stipulate that the workers in the production section will follow the production process ratios and the guidance of the professional nutritionists. The results have been to bake the cookies and to ensure that the additives are correctly balanced.

Chapter Five

Financial Section

The enterprise is not currently established, and therefore reliable financial data cannot be obtained. Nevertheless, this section of the business plan develops financial data based on given assumptions. The primary basic financial projections will be:  

  • The profit and revenue potential of the enterprise
  • The capital required for start-up costs and initial operational costs.
  • Loan repayments and other liabilities

Pre-operational costs

Pre-operational costs include those costs incurred in the course of setting up a business. They are, essentially, start-up costs. For example, start-up costs for Elly Catering Enterprise are shown in the table below.

Table Pre-operational costs

Pre-operational costs
2 Computers.       Ksh 100,000
Business Permit          Ksh 6,000
Rental Premises (Deposit)        Ksh  15,000
Printer.          Ksh 6,000
Stamp.          Ksh 2,000
Insurance          Ksh 3,000
Marketing activities          Ksh 5,000
Oven Ksh 40,000
Proof Boxes. Ksh 50,000
Furniture and fixtures Ksh 200, 000
Telephone and utilities Ksh   6,000
Miscellaneous Ksh 1,000
TOTAL                                          Ksh 434,000   

 As discussed above, the pre-operational costs addressed above relate to Elly Catering Enterprise charges before they start operating. They are essential because they lay proper and functional premises and provide the necessary facilities required for handling.

Working Capital Projections

Working capital consists of the current assets and liabilities that the company requires to operate daily. These include accounts receivable, inventory, accounts payable, accrued expenses, and other existing assets and current liabilities. These are the funds required for the normal operations of an enterprise.

In projecting the working capital for Elly Catering Enterprise, we will take into consideration the operational costs of competitors and similar operations in creating a basis for our projection, since Elly Catering Enterprise has not been in process before in Nairobi or other towns, and therefore cannot enjoy the use of historical data for working capital forecasts. Working capital projections for Elly Catering Enterprises will also be based on the ‘working capital requirement formula’ below;

Working Capital Requirement

= Current Assets – Current Liabilities

Working on the assumption that Elly Catering Enterprise, being a start-up cannot afford to sell cookies on credit, and cannot enjoy credit allowances by suppliers, we can eliminate the accounts receivable and accounts payable elements of the ‘working capital requirement formula’. We are, therefore, left with inventory as the primary consideration for working capital projections. Inventory for Elly Catering Enterprise is shown in the table below.

Table Inventory requirements for Elly Catering Enterprise

Timeline Bacopa Schisandra Eluthro Dough Sheeter Ingredients
Week 1 Ksh 5,000 Ksh 6,000 Ksh 4,000 Ksh 25,000 Ksh 1,000
Week 2 Ksh 6,000 Ksh 7,000 Ksh 6,000 Ksh 1,500
Week 3 Ksh 4,000 Ksh 8,000 Ksh 5,000 Ksh 1,000
Week 4 Ksh 6,000 Ksh 5,000 Ksh 7,000 Ksh 1,000
Ksh 4,500

 Cash Flow Projections

The following Excel spreadsheet extracts shows the detailed monthly cash flow projections for the first three years.

The Excel spreadsheet extract below shows the summarized cash flow projections for the first three years.

                CASH FLOW PROJECTIONS FOR THE FIRST THREE YEARS
PARTICULARS FIRST YEAR SECOND YEAR THIRD YEAR
Cash on hand 1008385.78 451,986 584,386
Cash Inflows
Cash sales 5300000 5,460,000 5,460,000
Owners’ contributions 1600000 1,600,000 1,600,000
Uwezo government grant 170000
Bank Loan 240,000 240,000
Retained earnings 170,000
Total Cash Inflows 7070000 7,300,000 7,300,000
Cash Out-flows
Wages 3840000 3,840,000 3,840,000
Rental payments 240000 240,000 240,000
Operational costs 1444800 1,504,000 1,504,000
Taxes 386948.04 386,948 386,948
Purchases 54000 54,000 54,000
Administrative costs 600000 600,000 600,000
Water and electricity bill payments 480000 480,000 480,000
Total Cash Outflows 7045748.04 7,104,948 7,104,948
Cash at the end of the year 1032637.74 779,438 779,438

 

At the end of the first year, cash flow estimates above will be compared against actual cash flow items and discrepancies will be used to create a better cash flow forecast for the ongoing years.

Pro-Forma Income Statement

A pro-forma income statement is an income statement that is based on certain assumptions and projections. For example, Elly Catering Enterprise being a new enterprise will make a pro-forma income statement based on cash flow projections and assumptions about sales, and it takes an optimistic approach below. It leaves out one-time expenses that are not part of normal company operations since it is concerned with recurring income statement items.

Pro-forma Income Statement for the year ended 31st  December 2021
Gross sales 6,000,000
Less: Cash Discounts. 240,000
NET SALES 5,760,000
Cost of goods sold
Beginning inventory 112,700
Plus: Net Purchases 97,950
Less: Ending Inventory 101,200
COSTOF GOODS SOLD 109,450
GROSS PROFIT 5,650,550
Less:  Expenses
Owners’ salary 1,440,000
Employees Wages 2,400,000
Administrative costs 600,000
Delivery charges 240,000
Advertising and Promotion 240,000
Rent 240,000
Telephone charges 36,000
Taxes 386,948
Depreciation 144,000
Insurance 240,000
Utilities(Heat, Light, Power) 360,000
Total Expenses 4,886,948
NET OPERATING PROFIT 763,602
Less: Income tax (estimated) 360,000
NET PROFIT AFTER INCOME TAX 403,602

Pro-Forma Balance Sheet

The pro-forma balance sheet for Elly Catering Enterprise shown belowrelates to the assets in its disposal and the liabilities and the financing of them during the first year of operation.

Pro-forma Balance Sheet for Elly Catering Enterprise as at 31st December 2021.
Current Assets Liabilities
Cash 200,000
Inventory 40,000 Retained earnings 150,000
Fixed Assets Equity
Production equipment 230,000 Owners contribution 450,000
Furniture and fixtures 200,000 Uwezo government grant 170,000
Computers 100,000
770,000 770,000

Break-Even Point Calculation

The break-even point is the point at which sales revenue equals the total expenses. It is the point where we neither make a profit, nor make a loss. The two key elements in the calculation of breakeven point are fixed costs and variable costs. Fixed costs are those costs that will not vary with sales, such as advertising, office supplies, and owners’ salaries among others. Variable costs, on the other hand, are the actual costs of making the product or providing the service, and will therefore vary with sales.

To calculate breakeven point, we will use the ‘break even with a gross margin’ formula because Elly Catering Enterprise sells several types of cookies priced differently, therefore calculation of breakeven point using units would not be convenient. The formula for calculation of breakeven point with a gross profit margin is;

   Breakeven Point =                                   Fixed Costs

(Gross Profit Margin)

Below is a breakdown of the annual fixed costs of Elly Catering Enterprise.

Fixed costs for Elly  Catering Enterprise
Fixed costs Amount
Owners’ salary 1,440,000
Administrative costs 600,000
Advertising and Promotion 240,000
Telephone charges 36,000
Taxes 386,948
Depreciation 144,000
Insurance 240,000
TOTAL FIXED COSTS 3,086,948

 Applying a gross profit margin of 60%, the breakeven point can be calculated as the total fixed costs, which is Ksh.3, 086,948 divided by 60%, which will give us Ksh. 5,144,913. This figure is then divided among the 12 months and we get that the monthly breakeven point is Ksh. 428,742.This breakeven point means that in a month, Elly Catering Enterprise must sell at least Ksh. 428,742, in order to keep doing business without a loss.

Calculation of Profitability Ratios

Profitability ratios are important because they help us to understand if this venture for Elly Catering Enterprise will be successful, taking into consideration the resources available and the financial obligations it faces.

Return on Assets – This profitability ratio is important because it measures how effectively the company produces income from its assets. It is calculated by using the formula below;

Return on Assets = Net Income / Assets * 100.

Return on Assets = (403,602/770,000) *100

                         = 52.41%

This means Elly Catering Enterprise makes 52 Kenyan Shillings for every shilling amount it holds in assets.

Gross Profit Margin.- this tells us about the profitability of the cookies sold by Elly Catering Enterprise. It is calculated by dividing the gross profit by net sales and multiplying the quotient by 100:

Gross margin = Gross Profit/Net sales * 100

                      =(5,650,550/5,760,000)* 100

                      = 98%

The gross margin ratio shows that Elly Catering Enterprise will be very profitable, assuming the sales volumes hold true.

Debt to Asset Ratio – it is a leverage ratio that measures the amount of total assets that has been financed by creditors instead of investors. It basically assesses how a company has acquired its assets, through borrowing or investments. It is given by the formula below;

Debt to Asset Ratio = (Total Debt/ Total Assets) * 100

                                =(170,000 / 770,000) * 100

                         = 22.07%

This means that 22.07% of the assets of Elly Catering Enterprise have been financed through financial borrowing; the Uwezo government fund.

The above ratios give a good financial assessment of Elly Catering Enterprise, and it can be concluded that it is a venture worth investing in.

Desired Financing

The desired financing for Elly Catering Enterprise relates to financial obligations in startup costs and working capital requirements. Adding startup costs (Ksh.434,000) and working capital requirements (Ksh 4,500), we get Ksh. 438,500. There will also be additional expenses which will occur in the course of business operations, such as administrative costs and operational costs. These costs are shown in the below.

Estimated costs of operation for Elly Catering Enterprise
Costs
Wages 320,000
Rental payments 20,000
Operational costs 120,400
Taxes 32,245.67
Purchases 4,500
Administrative costs 50,000
Water and electricity bill payments 40,000
Total 587,146

 

The desired financing can, therefore, be calculated by adding the sum total of  the operational costs above, which is Ksh. 587,146 by Ksh. 438, 500.

Desired Financing = 587,146 + 438, 500

= Ksh. 1,025, 646

Proposed Capitalization

The proposed capitalization indicates the proposed sources of funds for the desired financed determined above. The proposed capitalization for Elly Catering Enterprise is shown below;

Proposed capitalization for Elly Catering Enterprise
Sources
Bank deposits from owners 430,000
Owners’ contributions 300,000
Uwezo government grant 170,000
Total 900,000

With the proposed capitalization above, it is possible to finance Elly Catering Enterprise for the first financial year. Retained earnings will be injected into the enterprise after the first financial year going forward or in the course of the year from profits made during the previous months.

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