Business Plan
Prepared By:
Amanda Hoehn
Jeremy Olthof
Leigh Anderson
Glenn Stacey
Introduction
The feasibility of
moving a packaged
fudge bar into the
premium retail market
Primary target market
will be Western Canada
AgEc 495.3 College of Agriculture
and Bioresources
Site Layout
AgEc 495.3 College of Agriculture
and Bioresources
Goals of Business
Short Term
Western Canada
Retail market
Packaging and selling of:
12 regular flavours
2 sucrose free flavours
Long Term
Expand to the rest of
Canada
Relocate to a larger
facility
AgEc 495.3 College of Agriculture
and Bioresources
Fudge Process
Raw Fudge Fudge
Ingredients A Vat B C Scoring
Pan
D
Cutting
Heat Sealing F Packaging E
G
Labeling H I
Display Case Master Case
AgEc 495.3 College of Agriculture
and Bioresources
Inventories, AR and AP
Inventories
12 days
FIFO
Accounts Receivable
12 days
Consignment and PharmaChoice®
Customer pay by credit card at gift shows
Accounts Payable
10 days
New York supplier - 2/10 n/45
Harlan Fairbanks - 2/10 n/30
AgEc 495.3 College of Agriculture
and Bioresources
Capital Budget
Value
Purchased Assets
Heat Sealer $ 7,500
Printer $ 10,000
Computer $ 3,200
Blackberry™ $ 400
Current Assets
Fudge Pots $ 10,000
Fridge and Freezer $ 500
Miscellaneous Equipment $ 5,000
Total Equipment Costs $ 36,600
Total Working Capital $ 7,521
Total Capital Required $ 44,121
AgEc 495.3 College of Agriculture
and Bioresources
Organizational Structure: Board
of Directors
Board of Directors (2)
President/General Manager Co-Manager
Sales Representative
Factory Staff
AgEc 495.3 College of Agriculture
and Bioresources
Human Resources
Currently
President/General Manager
Co-Manager
Fudge Chef
Fudge Workers
Additions
Sales Representative
Fudge Workers
AgEc 495.3 College of Agriculture
and Bioresources
Product
80g premium fudge bar Varieties
4 x 2 package Regular
12 regular flavours and 2
Pumpkin Pie
Heavenly Goo
sucrose free Chocolate
Maple Nut
Wrapped in a glossy package English Toffee
Weight Chocolate Peanut Butter Swirl
Summer Tortoise
Flavour Caramel Pecan
Ingredients Chocolate Amaretto Swirl
Chocolate Mint Swirl
Best before date Cookies and Cream
Nutritional information Sucrose-free
Chocolate
Maple-Nut
AgEc 495.3 College of Agriculture
and Bioresources
Price
Wholesale $2.59
Retail and consignment $3.99
Both premium and competitive pricing strategy
FF will be the only providers of fudge to the retail
market
AgEc 495.3 College of Agriculture
and Bioresources
Promotion
Gift shows
“Fudge Program”
Retail display rack
Website
Pamphlets and signs
AgEc 495.3 College of Agriculture
and Bioresources
Place
Gift shops
24 PharmaChoice® stores
SaskMade Marketplace®
Shipped by private courier http://www.pharmachoice.com/images/front-logo.gif
Contacted via gift shows
http://www.sfpa.sk.ca/img/programs_market_saskmade.gif
AgEc 495.3 College of Agriculture
and Bioresources
SWOT: Strengths
Human Resources
Ease of communication with staff
Excellent knowledge base of fudge industry
Commissioned sales personal
Physical Resources
Low capital investment
Leasing the building
Financial Resources
Just in time inventory turnover
Line of credit available in case of low cash flow
AgEc 495.3 College of Agriculture
and Bioresources
SWOT: Weaknesses
Human Resources
Executive and Sales Rep. have overlapping positions
Consistency of product and packaging
Physical Resources
Low capital investment
Limited expansion potential with a leased building
Product has to be set at a certain temperature
Financial Resources
No accounts receivable at gift shows
AgEc 495.3 College of Agriculture
and Bioresources
SWOT: Opportunities and
Threats
Opportunities
Provide an alternative to chocolate – niche market
Other retailers can follow the gift stores, PharmaChoice,
SaskMade Marketplace
Sucrose free product to diabetics and dieters
Threats
No barriers to entry for competition
Healthier consumption choices
AgEc 495.3 College of Agriculture
and Bioresources
Competition
Cote D’or®
Poulain®
Lindt®
Bernard Callebaut®
Laura Secord®
Cadbury®
Hershy®
AgEc 495.3 College of Agriculture
and Bioresources
Balance Sheet
Chocolate Moose Fudge Factory
Balance Sheet
as at August 31, 2007
Assets Liabilities
Current Assets: Current Liabilities:
Cash 4,996 Accounts Payable 9,180
Accounts Receivable 9,367
Total Inventories 7,335 Long-Term Liabilities:
Total Current Assets 21,697 Long Term Debt -
Long-Term Assets: Total Liabilities 9,180
Buildings, Machinery & Equipment 18,400
Accumulated C.C.A (13,725) Owner Equity
Total Long-Term Assets 4,675
Owner Equity 50,000
Retained Earnings (32,808)
Total Owner Equity 17,192
Total Assets 26,372 Total Liabilities & Owner Equity 26,372
AgEc 495.3 College of Agriculture
and Bioresources
Statement of Financial Results
Year 2007 2008 2009 2010 2011
Sales 110,000 132,000 158,400 190,080 228,096
COGS $ 300,982 $ 291,367 $ 359,676 $ 410,493 $ 491,786
Gross Margin
$ (16,082) $ 57,350 $ 67,154 $ 111,947 $ 147,681
Expenses $ 66,725 $ 65,024 $ 66,853 $ 71,019 $ 71,197
Income b/f Taxes
$ (82,808) $ (7,674) $ 301 $ 40,928 $ 76,483
Income Tax $ - $ - $ - $ - $ 2,723
Net Income $ (82,808) $ (7,674) $ 301 $ 40,928 $ 73,760
Beg. Retained
Earnings
$ 50,000 $ (32,808) $ (40,482) $ (40,181) $ 747
Dividends $ - $ - $ - $ - $ -
End. Retained
Earnings
$ (32,808) $ (40,482) $ (40,181) $ 747 $ 74,508
Ending Cash $ 4,996 $ 4,002 $ 4,805 $ 44,584 $ 115,674
Net Present Value (NPV) $137,172
Internal Rate of Return on Equity Investment 38.63%
External Rate of Return on Equity Investment 33.32%
AgEc 495.3 College of Agriculture
and Bioresources
Financials
Se nsitivity of Ne t Pre se nt Value : Price and
Sale s
10% $466,268
Percentage Change in Price
5% $297,213
and Sales
0 (Base) $137,172
-5% $(15,262)
-10% $(159,253)
NPV
AgEc 495.3 College of Agriculture
and Bioresources
Financials
Sensitivity of Internal Rate of Return: Price
and Sales
10% 88.7%
Percentage Change in Price
5% 61.6%
and Sales
0 (Base) 38.6%
-5% 18.0%
-10% -3.6%
IRR
AgEc 495.3 College of Agriculture
and Bioresources
Questions ?
www.fudgefix.com
AgEc 495.3 College of Agriculture
and Bioresources