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JAMES SMITH

FRENCH BAKERY, LLC

For E-2 Visa

Purpose

This document was prepared by Terranova

Launchpad Ltd.

www.immigrationbusinessplan.com

info@immigrationbusinessplan.com


This venture was initiated by

James Smith, long

established Cook Chef in the

South of France.

4

French Bakery, LLC


EXECUTIVE SUMMARY

T

his venture was initiated by James Smith, a

long established Cook Chef in the south of

France. Mr. Smith brings together strong business

acumen, operational managerial skills, as well as

outstanding cooking skills to build French Bakery,

LLC. This new venture is a profitable Kosher bakery-centric

concept store mixing the coffee lounge

experience of Starbucks with the vast array of

French bakery products comparable to the ones

offered by Paul, the leading French bakery chain.

The concept was developed further to extensive

market studies in southeast Florida.

French Bakery, LLC (“The Company”) was incorporated

on May 2, 2007 in the County of Palm

Beach in the State of Florida. It is fully owned

by James Smith, who invested $99,130 into the

Company to fund the venture.

On May 11, 2007, the Company signed a five-year

business lease agreement with Investment Limited

(the lessor) to become a permanent tenant in

the 2,000-sq ft retail space located at 1956 NE 5th

Avenue, Unit 3, Boca Raton, FL 33431. The total

amount due at closing was $65,655.50 including

one month’s rent in advance, two months’ worth of

deposit, and key money.

from the former tenant, justifying a key money of

$50,000. Therefore, the Company has acquired a

turn-key operation with all the required permits, allowing

French Bakery, LLC to be operational from

day one without any further investment or construction

work.

The Bakery is in a prime location in an open plaza

at the corner of the Federal Highway, which is the

busiest street in Boca Raton.

The open plaza anchors both a CVS pharmacy

and a Publix supermarket. As such, it is one of the

most popular open plazas in Boca Raton.

The Company’s activity will be substantial. It forecasts

to open a second bakery in year 3 and enhance

its local exposure. French Bakery, LLC’s

headcount will increase from 10 employees in

year 1 to 29 employees in year 5.

The Company business model is based on four

sub-business models revolving around the bakery

unit.

This space was formerly occupied by a bakery

that closed after two years of operations due to

poor quality of the products offered.

In addition to the lease, the Company has acquired

all the equipment, furniture, and machinery

French Bakery, LLC

5


FRENCH BAKERY CONCEPT STORE

F

rench Bakery, LLC concept store is about

bringing Starbucks Coffee’s lounge experience

together with a French bakery offer such

as Paul’s (the leading French bakery chain in

Europe) while observing Kosher dietary laws.

French Bakery, LLC will come across as a fine

French bakery where customers can enjoy a

similar experience to a Starbucks. Comfortable

couches, relaxing music, newspapers, and

bookcases will convey a cozy atmosphere with

a homey feeling. The products will appeal to

all consumers regardless of their observance

of dietary laws since the kosher aspect will not

be prominently displayed. A discrete sign in the

counter area as well as on the door will inform

customers that French Bakery, LLC is a Kosher

institution.

As described in the chart, the initial product mix

will include mainly sandwiches, bread, and pastries.

Salads, soups, and quiches are forecast

to represent 20% of the total sales. This sales

mix will change as the offer will be adapted according

to customers’ taste and suggestions.

Sandwiches 36 %

Bread 20%

Pastries 20%

Soups and salads 10%

Quiches 5%

Other 5%

A wide variety of breads will be offered and used to make an extensive offer of sandwiches. The offer

will include low-carb dietetic bread and sandwiches to cater to health-conscious customers.

Pastries will include croissant, pain au chocolat (chocolate croissant), as well as all sorts of cakes

and pies. A vast array of both French and American specialties will be available.

6

French Bakery, LLC


THE MARKET OPPORTUNITY

French Bakery, LLC is located in Boca Raton, a

dynamic city in southwest Florida, counting a total

population of 74,500 people.

This concept brings together two markets: the kosher

food market and the bread-centric fast food

market.

French Bakery, LLC

7


THE BREAD CENTRIC FAST FOOD MARKET

The emergence of a new type of fast food

bread centric concept

The fast food market has come a long way since

the traditional burger and fries offer. Today, Mc

Donald’s or Burger King is only one of the alternatives

that a consumer can choose from for a

quick meal. Many factors have pushed for this

change, for instance:

• Customers are more health conscious these

days. They know what is and what is not

good for them, and alter their eating habits

in consequence.

• Customers are more demanding in terms of

quality of food and aliments. In this perspective,

they like seeing the food-making process,

which encourages new concepts with

open kitchen and on-site cooking.

• Customers’ taste has become more sophisticated

since they have become well travelled.

Thus, they expect a wider variety of dishes

and specialties. For instance, a crepe, a bruschetta,

a croissant, a baguette, or a fajita

are commonly ordered.

• Customers expect more and more to eat or

be served in an environment that provides an

experience, that has an identity and that tells

a story.

These changes have pushed for a new segment

in the fast food market that addresses the search

for variety, for better taste, for healthier food, and

for a better experience. In the past 15 years, the

US market has seen the emergence of major

bakery-centric fast food chains answering those

criteria.

From its roots in Boston, Au Bon Pain has grown to become one of the leading bakery

café chains. With more than two hundred locations operating in the United States, South

Korea, Taiwan, and Thailand, Au Bon Pain is a leader in many trade channels from urban

office buildings to airports, hospitals and suburbs. The company’s upscale urban cafés offer

French-baked goods like croissants, baguettes, and pastries forming the core of the chain’s

menu, which has expanded over the course of its 20-year history to include sandwiches,

salads, soups, gourmet coffees, and other beverages.

8

French Bakery, LLC


Panera Bread is a leader in the quick-casual restaurant business with more than 1,000 bakery-cafes

in almost 40 states. Its locations, which operate under the Panera and Saint Louis

Bread Company banners, offer made-to-order sandwiches built using a variety of artisan

breads, including Asiago cheese bread, focaccia, and its classic sourdough bread. Its menu

also features soups, salads, and gourmet coffees. In addition, Panera sells its bread, bagels,

and pastries to go. Almost 400 of its locations are company-operated, while the rest are run

by franchisees.

It’s not just about bagels anymore. Increasingly, people are turning to their corner Einstein

Bros for quick, tasty lunches—from innovative salads to hearty soups and creative sandwiches.

The 2,220- to 2,500-square-foot cafés seat 40 people in an atmosphere featuring

sophisticated fixtures and comfy, casual tables and waiting areas. High-quality food is the

standard here, with a diverse menu ranging from gourmet, to-go coffee and specialty coffee

drinks to baked goods, salads, made-to-order sandwiches and decadent desserts. There are

over 300 Einstein Bros locations mostly in the southeast, and many more to come.

Atlanta Bread’s offerings include freshly baked breads, pastries, sandwchies, soups, salads,

and gourmet coffees. The concept is to serve meals quickly in an atmosphere the company

descibes as a “relaxed, no-rush setting that features hardwood floors, a decor highlighted

with warm, inviting colors, and soft classical music playing in the background.” The bakery/

cafe that was originally established in 1993 from an Atlanta suburb of Sandy Springs, Georgia

counts today close to 100 units, mostly located in the south east.

French Bakery, LLC

9


Paul, one of Europe’s most successful restaurant chains counting over 300 units in Europe,

the middle-east and Asia, has entered the US market with its first locations in southeast Florida.

2007 will see another 9 opening in the sunshine state. It offers a French style of meals:

savory, and sweet pastries, a selection of French pancakes, simple dishes, and a selection of

salads, soups and sandwiches, all prepared on the premises. PAUL shops are designed like

old-fashioned bakeries to evoke its traditional aspect. To that effect, the bread is still prepared

and cooked in full view of the customers. The old-fashioned, country-style decoration of the

shops makes the customers travel to the French countryside.

A

poll has been carried out to determine

which decision criteria customers use in

their choice of eating place and what their

respective importance would be. It appeared that

the following four points were the most common

criteria mentioned in their order of importance:

• Constant Quality

• Taste

• Experience

• Price

A strong emphasis has been put on the constancy

of the food quality. It appears that if a regular

customer is disappointed once by the quality of

the food, he will most probably not return to that

location to eat. Specialists agree that to belong

to this industry, one needs to deliver constant

quality on its products since catering is a ruthless

market where customers hardly give a second

chance.

Taste is the second most important factor. Customers

expect to find their beloved classic dishes

while requesting exotic touches from time to

time. The experience that the concept offers is

the third most important decision criteria.

Customers don’t only expect a clean area. They

also want to relax and enjoy the time they will

spend in a unit, even if it is only for take away.

Quite surprisingly, price is only the fourth decision

criteria.

It seems that if they have the other three criteria

satisfied, customers are willing to pay more. Of

course the amount needs to stay within the fast

food price limits.

A large Jewish community

The Jewish population of Boca Raton represents

40% of the total local population. It is catered by

20 kosher businesses (ranging from markets,

delis, to fast food and traditional restaurants), 4

private Jewish schools, and 13 synagogues. As

of today, there is no similar concept to French

Bakery, LLC in the Kosher food segment in Boca

Raton and its vicinities.

An underdeveloped kosher bread centric fast

food market

There is no real direct competition to French

Bakery, LLC mainly because market players are

using bread and baked goods in general as a

cross-selling item. Either there is a problem with

the offer being limited, or there is no real retail

concept, or the quality is simply not there. However,

it appears that everybody is pushing into

the baked good segment, which is a good indicator

of what local people are looking for.

10

French Bakery, LLC


THE BOCA RATON KOSHER BREAD CENTRIC

FAST FOOD MARKET

There are only two businesses offering kosher

bakery products in Boca Raton:

• Albertson’s Market

• Salomon Bakery

At Albertson’s, the biggest kosher market in the

city, an in-house bakery offers a limited range of

baked products:

premises are small and there is a clear hygiene

problem to such an extent that regular customers

stopped shopping there.

In terms of bread-centric kosher fast food, again,

there is no direct competitor. Boca Tov Café, which

offers a menu for breakfast and lunch composed

mainly of sandwiches and salads made on the

premises, has a limited offer. In addition, no effort

has been invested in the interior design.

This business provides baked goods not only to its

end customers, but also to many kosher restaurants

and competing markets in the Boca Raton

area since there are only two Kosher bakers. Due

to the increasing demand from its customers, Albertson’s

will soon offer French baguettes.

Salomon Bakery is a much smaller business, providing

a wider range of baked products. Although

it offers a small sitting area, more than 90% of its

business is take away. This is not a direct competitor

to French Bakery, LLC. The quality of the offer,

especially the bread, is in constant decline. The

Challah Bread

$2,99

Danish

$1,29-$1,99

Pita Bread

$4,99 (pack of 6)

Cakes

$24,99 and up

French Bakery, LLC

11


FRENCH BAKERY, LLC COMPANY PRESENTATION

The Corporation

French Bakery, LLC (“the Company”) was incorporated

as a limited-liability company on May 2,

2007 in the County of Palm Beach in the State of

Florida. The CEO and 100% owner of the Company

is James Smith. The capital of the Company

(the sum of common stocks and paid-in surplus)

is US$99,130 as at May 21, 2007. The Federal

Tax ID is 20-8987049.

Street. This intersection counts the highest level

of car traffic in Boca Raton.

The open plaza boasts both a CVS pharmacy and

a Publix supermarket. As such, it represents one

of the most popular open plazas in Boca Raton.

People going to CVS or Publix will be able to go

to French Bakery, LLC to have lunch or breakfast

or simply buy some pastries or bread on their way.

The 5-year leasehold of the first French Bakery,

LLC

On the 11th of May 2007, the Company closed a

business lease agreement with the Lessor Investment

Limited for a total amount of $65,655.50.

This amount includes one month rent in advance,

two months’ deposit, and key money. This lease

makes the Company a permanent tenant of the

2,000-sq ft retail space located at 1956 NE 5th Avenue,

Unit 3, Boca Raton, FL 33431 for a period

of five years.

The former tenant of that unit was a bakery that

decided to close business after two years of operations,

as the management was unable to deliver

sufficient quality.

The Company, through its business lease agreement,

has acquired all the equipment, furniture,

and machinery that belonged to the former tenant.

Such acquisition is part of the $50,000 key

money that the Company agreed to pay upon signature

of the lease. Therefore, the Company has

acquired a turn-key operation with all the required

permits to start the business on day 1 without any

further investment or construction work.

Location, location, location

The Boca Raton unit is located in an open plaza at

the corner of the Federal Highway and 20th

The management

James Smith will manage the Company. He has

already demonstrated a strong ability to execute

similar projects in the past.

As shown on his résumé, James Smith has 14

years of unparalleled experience in the food industry.

He graduated from the Ecole Hoteliere de Lyon,

the second most prestigious French hospitality

school. This school is famous for the achievements

of its alumni in the food industry.

He has set up and operated several restaurants

and catering businesses in the south of France.

Along the way, he has developed an expertise on

maintaining quality while optimizing margin and

building a solid operational team in order to develop

and manage successful food businesses.

Terrace de L’Etoile was the last business operated

by James Smith for a duration of eight years.

This multimillion dollar-sales restaurant in the

heart of Nice, France earned a solid reputation for

the quality of both its products and services. Mr.

Smith doubled the sales of the business while increasing

margin through the introduction of more

profitable products.

12

French Bakery, LLC


In 2006, further to a trip to Florida, James Smith

identified an opportunity to start a chain of kosher

bakeries that would provide both a US traditional

offer and a French sophisticated bakery offer. To

take that project to the next level, James Smith

took an intensive training on the most recent bakery

techniques used by the leading French national

bakery chains.

Employees are this business’ greatest asset. Great

care would be taken in recruiting people who love

working with these products and who are always

ready to help. The consistency of the quality depends

on this aspect.

French Bakery, LLC will be open from 7 am to 7

pm from Monday to Thursday. It will close at 4 pm

on Friday. It will open at 8 am and close at 6 pm

on Sunday. Therefore, the bakery will be open 67

hours per week.

James Smith’s responsibilities will be purely managerial.

He will hire a competent team of bakers,

waiters, delivery men, and busboys.

The Company plans to open a second bakery in

year 3. It will hire a manager for the second bakery.

As shown in the table below, the number of

the Company’s employees is forecast to increase

from 10 in year 1 to 29 in year 5. Each bakery will

employ 15 employees after five years of operations.

COMPANY EMPLOYEES

Year 1 Year 2 Year 3 Year 4 Year 5

Managers 1 1 2 2 2

Bakers 3 5 6 11 12

Waiters 4 5 9 10 11

Busboys 1 1 2 2 2

Drivers 1 1 2 2 2

Total # of employees

10 13 24 27 29

French Bakery, LLC

13


Company strategy

The Company decided that the best way to enter

the local market would be to acquire an existing

bakery since this would represent a shortcut, given

the fact that an existing bakery would already have

all the permits to operate the business. Getting

permits can be a stumbling block for foreign entrepreneurs

who are not familiar with US regulations

and don’t know how to build a bakery in accordance

with those regulations.

The Company forecasts a rapid market entry in the

Boca Raton area through both a comprehensive

business model and an aggressive marketing effort.

The Company business model is based on four

sub-business models revolving around the bakery

unit:

1. Sales on premises with both breakfast and

lunch offers;

2. Delivery of products. Boca Raton has a high

concentration of offices. Therefore, the Company

intends to market its products to office

workers through delivery;

3. Supply contracts. The Company will seek to

win contracts to supply its products to hospitals,

schools, restaurants and hotels. This is a

big market. The Company will be able to compete

with a wide variety of products;

4. Catering services. The Company will provide

products for catering events. James Smith has

also a long experience in the catering service.

The Company will therefore be able to offer a

comprehensive catering offer from day 1.

Employees are this business’ greatest asset. Great

care would be taken in recruiting people who love

working with these products and who are always

ready to help. The consistency of the quality depends

on it.

French Bakery, LLC will be open from 7 a.m. to 7

p.m. from Monday to Thursday. It will close at 4 pm

on Friday. It will open at 8 am and close at 6 pm

on Sunday. Therefore, a bakery will be opened 67

hours per week.

French Bakery, LLC plans to put together marketing

material such as postcards, business cards,

brochure, delivery menus, as well as a website.

The Company is also planning to get in touch with

all the synagogues and the Jewish community

centers in Boca Raton and its vicinities to advertise

its products and be listed as a kosher business

in their directories.

On a daily basis, James Smith will contact potential

clients to get supply contracts and catering

contracts. The Company will send baskets with

fresh products to convince potential clients of the

quality of its products.

As mentioned earlier, the Company plans to open

a second bakery in year 3. The location of that second

bakery has not been decided yet. However,

several locations are already being considered:

Fort Lauderdale, Aventura, and Bal Harbour.

This second bakery would reinforce the Company

critical mass to achieve economies of scales.

14

French Bakery, LLC


FRENCH BAKERY, LLC FINANCIAL FORECAST

BOCA RATON UNIT FINANCIAL FORECAST

In the financial forecast, a slow-growth economy

without major recession has been taken into account.

French Bakery, LLC management has prepared a

five-year financial forecast for its operations in the

next five years.

Sale Forecast

As indicated in the table below, sales are forecast

to grow from $600,000 to $1,008,000 over the next

five years at a compound annual growth rate of

%13.8. These sales forecast refer to the Boca Raton

bakery unit only (the first bakery).

French Bakery, LLC sales are derived from four

lines of businesses.

Sales on premises

Sales on the premises are sales made on site.

They are forecast to reach a minimum level of

$450,000 in year 1.

The management forecasts that breakfast sales

and lunch sales represent 15% and 85% of total

sales, respectively, over the forecast period. The

average checks for a breakfast and a lunch are

expected to be $4.50 (for a pastry and a hot drink)

and $10 (for a sandwich and a soft drink).

A forecast sales of $450,000 for year 1 (280 opening

days) would imply 191 customers per day. More

precisely, 54 breakfast customers and 137 lunch

customers. This forecast can be easily achieved

given the high-traffic location of the bakery.

The sales are expected to grow to $700,000 by

year 5 as French Bakery, LLC will reach out to

more customers through a growing customer base

and widespread market awareness in Boca Raton

and its vicinities.

French Bakery, LLC

15


Delivery

As mentioned earlier, Boca Raton has a high

concentration of offices. French Bakery, LLC will

reach out to people working in offices at lunch time

through delivery.

This activity is expected to generate $70,000 in

year 1 (or 25 customers), up to $100,000 in year 5.

Contracts

French Bakery, LLC forecast to win bakery supply

contracts with restaurants, hospitals, schools,

universities, and hotels with forecast sales growing

from $50,000 in year 1 to $100,000 in year 5.

Those sales figures are conservative mainly because

this is a large market catered by only a few

players. Additionally, French Bakery, LLC will boast

of a wide variety of unique bakery products and

should get some attention from buyers in search of

new products.

Catering

French Bakery, LLC forecasts to grow catering

sales from $30,000 in year 1 to $108,000 in year

5. The average sale for a catering event is $3,000.

The management foresees to make 10 catering

events in year 1 up to 36 caterings events in year

5. This segment of the business depends mainly

on word of mouth and reputation, which take some

time to build.

Seasonality

French Bakery, LLC is subject to seasonality. The

busiest months are from November to April as the

warm Florida climate attracts snow birds and tourists,

as shown by the first 12 sales months of the

Boca Raton unit. July and August are the slowest

months.

16

French Bakery, LLC


Profit & Loss

Boca Raton unit’s Earnings Before Depreciation, Amortization Interest and Taxes (EBITDA) is forecast to

grow from $78,000 in year 1 to $178,000 in year 5.

PROFIT & LOSS ($’000)

Year 1 Year 2 Year 3 Year 4 Year 5

Sales Before Taxes 600 780 908 958 1,008

Cost of sales (COS) 150 195 227 240 252

Freight costs 17 21 25 26 28

Cost of products unsold 15 20 23 24 25

EFFECTIVE COST OF SALES (ECOS) 182 236 275 290 305

GROSS MARGIN 419 544 633 668 703

VARIABLE COST

Advertising 6 8 9 10 10

Shopping bags (packaging/cutlery) 6 8 9 10 10

Theft 0 0 0 0 0

Credit Card Commissions 10 13 15 16 17

TOTAL VARIABLE COST 22 29 33 35 37

MARGIN ON VARIABLE COST 396 515 600 633 666

FIXED COST

RENT 62.6 68 74 76 79

PAYROLL (incl. taxes & benefits) 237 315 350 360 390

Phone & internet 1.8 1.8 1.9 1.9 1.9

Utilities 5.0 5.1 5.2 5.2 5.3

Insurance 1.0 1.0 1.0 1.0 1.1

Travel 1.0 1.0 1.0 1.0 1.1

Accounting & Legal 3.0 3.0 3.1 3.1 3.2

Office expenses 1.0 1.0 1.0 1.0 1.1

Other 5.4 5.5 5.5 5.6 5.6

TOTAL FIXED COST 318 401 443 455 488

EARNINGS BEFORE TAXES, DEPRECIATION & AMORTIZATION (EBITDA) 78 114 157 178 178

Start-up expenses 12.8

Depreciation & amortization 6.4 8.9 11.4 13.6 16.1

Net interest expense (net interest income) 0 0 0 0 0

EARNINGS BEFORE TAXES 59.1 105.0 145.7 164.2 162.0

Income taxes 11.6 24.2 35.7 41.8 41.0

NET PROFIT 47.5 80.9 110.1 122.5 121.0

THE EBITDA MARGIN IS FORECAST TO INCREASE TO 18% ACROSS THE NEXT FIVE

YEARS AS INCREASING SALES WILL COVER MORE FIXED COSTS. NET PROFIT IS

FORECAST TO GROW FROM $53,200 IN YEAR 1 TO $121,000 IN YEAR 5.

French Bakery, LLC

17


Gross Margin

The bakery-centric fast food business is a highmargin

business. French Bakery, LLC management

forecasts to achieve reasonably a 75% margin

on the products sold across the forecast period.

However, the management accounts for the cost of

products unsold. With a short product life of 1 to 2

days, those products represent a waste that would

constitute 10% of the cost of products sold.

The freight includes not only the delivery of raw

materials, but also the delivery cost of products to

remote customers.

Taking into consideration the cost of products sold,

the freight cost, and the cost of products unsold,

the effective gross margin is forecast to be 66%.

owner. Mr. Smith made a transfer in the amount

of $74,580.00 from his personal bank account in

France to his personal bank account in the US. He

then withdrew $72,000.00 from his personal bank

account in the US and deposited that amount in the

Company’s bank account. In addition, he made a

transfer in the amount of $27,130.00 directly from

his personal bank account in the Company’s bank

account. The Company‘s outstanding balance after

those two deposits was $99,130.00.

Payroll

The payroll including taxes is forecast to grow from

$237,000 with 10 employees working 40 hours a

week in year 1 to $390,000 with 15 employees in

year 5.

Start-up expenses

The $12,800 start-up expenses are understated

since most of the expenses have already been incurred

through the corporate bank account of the

The owner of French Bakery, LLC will earn an

annual salary in the amount of $45,000 in year 1

growing to $49,000 in year 5.

THE MONTHLY EBITDA FOR THE FIRST TWELVE MONTHS OF OPERATIONS IS FORE-

CAST TO BE POSITIVE AS SHOWN IN THE TABLE.

18

French Bakery, LLC


Cash Flow Statement

As shown in the table set out below, the Boca

Raton bakery unit is forecast to generate a Cash

Flow From Operations (CFO) in the amount of

$103,000 including the start-up expenses for

$12,818.50 and rent deposit for $10,437 after 12

months of operations. The CFO is forecast to grow

to $137,000 in year 5. The Cash Flow balance at

the end of year 5 is forecast to reach $593,000.

CASH FLOW ($’000)

Year 1 Year 2 Year 3 Year 4 Year 5

SALES BEFORE SALES TAXES 600 780 908 958 1,008

CASH FLOW FROM OPERATIONS (CFO)

EBITDA 78 114 157 178 178

Start-up expenses - non recurring expense -13

Payment of income taxes 0 -12 -24 -36 -42

(Incr) Decr in account receivable 0

(Incr) Decr in trade debtors 0 0 0 0 0

(Incr) Decr in prepayments & accrued income 0 0 0 0 0

(Incr) Decr in inventory -6 -2 -1 -1 -1

Incr (Decr) in trade creditors 4 1 1 0 0

Incr (Decr) in other creditors (payroll incl taxes) 10 3 1 0 1

(Incr) Decr in other assets (rent deposits) -10 0 0 0 0

63 105 134 142 137

CASH FLOW FROM INVESTMENTS (CFI) -50 -10 -10 -10 -10

Increase in Fixed assets -50 -10 -10 -10 -10

CASH FLOW FROM FINANCING (CFF)

Net Interest Income (expense 0 0 0 0 0

Principal repayment of debt 0 0 0 0 0

Increase (Decrease) in Debt 0 0 0 0 0

Issue of ordinary shares 99

99 0 0 0 0

NET CASH FLOW 112 95 124 132 127

CASH FLOW BALANCE - BEGINNING OF PERIOD 0 112 207 331 463

CASH FLOW BALANCE - END OF PERIOD 112 207 331 463 591

THE COMPANY PLANS TO GENERATE A NET POSITIVE CASH FLOW FOR EACH OF

THE TWELVE FIRST MONTHS OF OPERATIONS. AS SUCH, THE NET CASH FLOW

FOR THE FIRST MONTH OF OPERATION IS EXPECTED TO BE $6,800.

French Bakery, LLC

19


Investment

As mentioned earlier, French Bakery, LLC signed

a five-year business lease on a unit owned by Investment

Limited for a total amount due at closing

of $65,655.50 as described below. James Smith

has injected $99,130 in the Company to finance

this lease transaction and provide a $25,874 operational

cash balance.

The table below includes the breakdown of the

$65,655 sum that was paid at closing:

The former tenant operated a bakery in that space.

The key money includes all the equipment, furniture,

and machinery left by the previous tenant, as

well as business permits, allowing French Bakery,

LLC to operate its business from day one. A detailed

list of those assets is enclosed in the appendix.

The former tenant operated a bakery in that space.

The key money includes all the equipment, furniture,

and machinery left by the previous tenant, as

well as business permits, allowing French Bakery,

LLC to operate its business from day one. A detailed

list of those assets is enclosed in the appendix.

INVESTMENT SUMMARY

Issue of Ordinary Shares (A):

Cash amount transferred from the investor’s personal

account to Company’s account $99,130.00

Minus:

First Month Rent ( $5,218.50 )

Security Deposit ( $5,218.50 )

Last month rent’s deposit ( $5,218.50 )

Key money ( $50,000.00 )

Legal fees ( $5,000.00 )

Business plan preparation fees ( $2,000.00 )

Accounting fees ( $600.00 )

Total of investment & expenses (B) ( $73,255.50 )

Operational cash balance as of opening balance

sheet date (A minus B) $25,874.50

THE MANAGEMENT CONSIDERS THAT THE KEY MONEY IS SPLIT BETWEEN TANGI-

BLE ASSETS FOR $40,000 AND INTANGIBLE ASSETS FOR $10,000.

20

French Bakery, LLC


Balance Sheet

BALANCE SHEET ($’000)

Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS

Current Assets

Cash 112 207 331 463 591

Account Receivable 0 0 0 0 0

Inventory 6 8 9 10 10

Other 10.4 10.4 10.4 10.4 10.4

Total Current Assets 128 225 351 483 611

Long Term Assets

Net Intangible Fixed assets 10 10 10 10 10

Gross Tangible Fixed assets 40 50 60 70 80

Accumulated depreciation -6 -15 -27 -40 -56

Financial fixed assets 0 0 0 0 0

Total Long Term Assets 44 45 43 40 34

Total Assets 172 270 394 523 645

LIABILITIES & EQUITY

Current Liabilities

Trade creditors 4 5 6 7 7

Other creditors 10 13 14 15 16

Taxes payable 12 24 36 42 41

Short-term notes payables 0 0 0 0 0

Total current liabilities 25 42 56 63 64

Long-term liabilities 0 0 0 0 0

Total liabilities 25 42 56 63 64

Equity

Shareholders equity 99 99 99 99 99

Retained earnings 0 60 141 251 374

Start-up net earnings -13 -13 -13 -13 -13

Net earnings 60 81 110 122 121

Total Equity 147 227 338 460 581

Total Liabilities and Equity 172 270 394 523 645

THE TABLE SHOWS THE ANNUAL BALANCE SHEET RESULTS WITH TOTAL EQUITY

(“NET WORTH “) INCREASING FROM $86,000 IN THE OPENING BALANCE SHEET TO

$581,000 AT THE END OF YEAR 5.

French Bakery, LLC

21


FRENCH BAKERY, LLC CONSOLIDATED FINANCIAL FORECAST

Income Statement

the Boca Raton unit (bakery 1).

French Bakery, LLC has enclosed a set of financial

forecast on the basis of the opening of two bakeries

over the next five years. The financial forecast

of bakery 2 is based on the assumptions used for

CONSOLIDATED PROFIT & LOSS ($’000)

The management will make the investment in year

2 to build bakery 2 for a launch of operations on

the first day of year 3.

Year 1 Year 2 Year 3 Year 4 Year 5

Sales After Taxes 642 835 1,614 1,860 2,050

Sales Before Taxes 600 780 1,508 1,738 1,916

Purchases 150 195 377 435 479

Freight costs 17 21 41 48 53

Customs duties & expenses 15 20 38 43 48

COST OF SALES (COS) 182 236 456 526 580

GROSS MARGIN 419 544 1,052 1,212 1,336

VARIABLE COST

Advertising 6 8 15 17 19

Shopping bags 6 8 15 17 19

Theft 0 0 0 0 0

Credit Card Commissions 10 13 25 29 32

TOTAL VARIABLE COST 22 29 55 64 71

MARGIN ON VARIABLE COST 396 515 996 1,148 1,266

FIXED COST

RENT 63 68 136 144 153

PAYROLL (incl. taxes & benefits) 237 315 588 675 740

Phone & internet 2 2 4 4 4

Utilities 5 5 10 10 10

Insurance 1 1 2 2 2

Travel 1 1 2 2 2

Accounting & Legal 3 3 6 6 6

Office expense 1 1 2 2 2

Other (incl. Headoffice cost) 5 5 11 11 11

TOTAL FIXED COST 318 401 761 857 931

EBITDA 78 114 235 292 335

Start-up expenses 13 0 0 0 0

Depreciation & amortization 6 9 29 34 39

Net interest expense (net interest income) 0 0 0 0 0

EARNINGS BEFORE TAXES 59 105 206 258 296

Income taxes 12 24 56 73 85

NET PROFIT 47 81 151 185 211

SALES ARE FORECAST TO REACH $1.9 MILLION IN YEAR 5 WITH A GROSS MARGIN

OF 70% AND AN EBITDA AT $335,000.

22

French Bakery, LLC


Cash Flow Statement

Cash Flow from Operations is forecast to grow to

$265,000 in year 5. The Cash Flow from Investment

is forecast at $90,000 in year 2, as the company

will invest to build the second bakery. The

Cash Flow Balance is forecast to reach $788,000

at the end of year 5.

CONSOLIDATED CASH FLOW ($’000)

Year 1 Year 2 Year 3 Year 4 Year 5

SALES BEFORE SALES TAXES 600 780 1,508 1,738 1,916

CASH FLOW FROM OPERATIONS (CFO)

EBITDA 78 114 235 292 335

Start-up expenses - non recurring expense -13 0 0 0 0

Payment of income taxes 0 -12 -24 -56 -73

(Incr) Decr in account receivable

(Incr) Decr in trade debtors 0 0 0 0 0

(Incr) Decr in prepayments & accrued income 0 0 0 0 0

(Incr) Decr in inventory -6 -2 -7 -2 -2

Incr (Decr) in trade creditors 4 1 5 2 1

Incr (Decr) in other creditors (payroll incl taxes) 10 3 11 4 3

(Incr) Decr in other assets (rent deposits) -10 0 -12 0 0

CFO 63 105 208 239 265

CASH FLOW FROM INVESTMENTS (CFI)

Increase in Fixed assets -50 -90 -10 -20 -20

CFI -50 -90 -10 -20 -20

CASH FLOW FROM FINANCING (CFF)

Net Interest Income (expense) 0 0 0 0 0

Principal repayment of debt 0 0 0 0 0

Increase (Decrease) in Debt 0 0 0 0 0

Issue of ordinary shares 99

CFF 99 0 0 0 0

NET CASH FLOW 112 15 198 219 245

CASH FLOW BALANCE - BEGINNING OF PERI-

OD 0 112 127 325 544

CASH FLOW BALANCE - END OF PERIOD 112 127 325 544 788

THE CASH FLOW BALANCE IS FORECAST TO REACH $788,000 AT THE END OF YEAR

5.

French Bakery, LLC

23


Balance Sheet

CONSOLIDATED BALANCE SHEET ($’000)

Year 1 Year 2 Year 3 Year 4 Year 5

Number of bakeries 1 1 2 2 2

ASSETS

Current Assets

Cash 112 127 325 544 788

Account Receivable 0 0 0 0 0

Inventory 6 8 15 18 20

Other 10 10 22 22 22

Total Current Assets 128 145 363 584 831

Long Term Assets

Net Intangible Fixed assets 10 10 10 10 10

Gross Tangible Fixed assets 40 130 140 160 180

Accumulated depreciation -6 -15 -45 -79 -117

Financial fixed assets (incl. Loans) 0 0 0 0 0

Total Long Term Assets 44 125 105 91 73

Total Assets 172 270 468 676 903

LIABILITIES & EQUITY

Current Liabilities

Trade creditors 4 5 10 12 13

Other creditors 10 13 24 28 30

Taxes payable 12 24 56 73 85

Short-term notes payables 0 0 0 0 0

Total current liabilities 25 42 90 112 129

Long-term liabilities 0 0 0 0 0

Total liabilities 25 42 90 112 129

Equity

Shareholders equity 99 99 99 99 99

Retained earnings 0 60 141 292 477

Start-up net earnings -13 -13 -13 -13 -13

Net earnings 60 81 151 185 211

Total Equity 147 227 378 563 774

Total Liabilities and Equity 172 270 468 676 903

THE TABLE SHOWS THE ANNUAL BALANCE SHEET RESULTS WITH TOTAL EQUITY

(“NET WORTH “) INCREASING FROM $86,000 IN THE OPENING BALANCE SHEET TO

$774,000 IN YEAR 5.

24

French Bakery, LLC


CONCLUSION

O

n May 2, 2007, James Smith set up

French Bakery, LLC, a Florida company to operate

a French-themed bakery in Boca Raton, Florida.

100% owned by James Smith, French Bakery, LLC is

located at 1956 NE 5th Avenue, Unit 3, Boca Raton,

Florida 33431.

James Smith will manage the Company. He has

already demonstrated a strong ability to execute

similar projects in the past.

As it is shown in his résumé, James Smith has fourteen

years of unparalleled experience in the food

industry.

He has set up and operated several restaurant and

catering businesses in the south of France. Along

the way, he has developed an expertise on how

to maintain quality while optimizing margin and

building solid operational team in order to develop

and manage successful food businesses.

The company expects sales to grow from $600,000 in year 1 to $1,916,000 in year 5 with a company

head count of 10 and 29 employees respectively.

French Bakery, LLC

25


STAY IN TOUCH

1979 Marcus Ave#210, New

Hyde Park, New York City,

NY, 11042

Toll Free: +1 (888) 278 7775

International: +1 (646) 612 7572

Fax: + 1 (646) 612 7579

info@immigrationbusinessplan.com

www.immigrationbusinessplan.com

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