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Confidentiality Agreement
The undersigned reader acknowledges and accepts that the information and details provided by Custom Baked Goods in this business plan is confidential; therefore, reader agrees not to disclose any information contain here-in without the express written permission of Daniel Lukasavitz or Anna Burns. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader may cause serious harm or damage to Custom Baked Goods. Upon request, this document is to be immediately returned to: Custom Baked Goods 1223 24th Ave. Greeley, CO 80634 (970) 673-7255

____________________________________________ Signature ____________________________________________ Name (typed or printed)

___________________ Date

This is a business plan. It does not imply an offering of securities.

Custom Baked Goods


The Tale of A Mobile Bakery

Daniel Lukasavitz Anna Burns BUS 115-702

Executive Summary
Custom Baked good will bring a unique option to Weld County by offering our delicious baked goods and premium coffee products to the public in multiple locations through a mobile bakery truck. This business plan will show how our company plans to carry-out the implementation of a mobile kitchen food truck. By having a mobile commercial kitchen truck our bakery will be able to avoid the cost of leasing/purchasing and maintaining a physical facility, and pay property tax, as well as save on energy costs. A mobile Custom Baked Goods will also create a niche in Greeley that no other company has achieved yet. No other local baking company has attempted to obtain a mobile commercial kitchen which is at their disposal around the clock. By having a mobile kitchen Custom Baked Goods can go to the public instead of having the public come to them. We would be able to travel to area festivals, fairs, community events, and various catering events.

Mission Statement
Our mission is to provide our clients with the best baked goods custom made to their personal specifications. We are custom from start to finish. We use all fresh and local premium ingredients. There is a pinch of love in every product. Your satisfaction is 100% guaranteed!

Company Goals and Objectives:


Our first goal is to have a healthy, successful company that is a leader in customer service, superior products, and that has a loyal community following. Our second goal is to build and expand to keep up with our market and stay ahead of our competitors. By doing this we will use innovative and fresh ideas that break the mold of traditional companies within the market.

Company Overview
Custom Baked Goods prides itself in offering homemade baked items made to customers strict guidelines. We offer consulting with the customer with every order, ensuring we get every detail right. We will listen to the customer and offer our expert advice to make the customers vision a reality. When we commit to a project we give 200% into the project from start to finish. Since our company has the ability to offer customers an endless variety of items, we can not only open a new customer-base with every project we undertake but learn new and valuable skills that will in turn improve our overall customer satisfaction. Every Custom Baked Goods product is made from scratch with fresh, local, and high quality ingredients. The importance of excellent customer service and building desirable products is important to us in any business, and of course making money. By providing customer service beyond that of our competitors we can build a customer base that will not only expects our superb customer service but will look forward to being served in that manner again. When the customer goes to competitors they will be disappointed that their needs were not met as well as when they patronize our bakery. Customers will learn about Custom Baked goods not only through word of mouth, but through online and print advertising, as well as intense community involvement. There will be a large focus on connecting with customers online. The daily location of the bakery truck will be posted on our Twitter and Facebook accounts, as well as our website. When customers would like to place a special order they are welcome to either call or place the order through our internet outlets, and we offer delivery to your location. Our bakery prides itself on our drive to attend community events and fundraisers; such as our decorate-your-own cupcake both at the

"Zumbathon" Relay for Life fundraiser. Custom Baked Goods will also become a staple at family friendly events such as Friday Fest and Greeley's annual 4th of July Stampede celebration. Management/ Employee Structure Plan:
Personnel Plan Month 1 $1,300 $1,300 $375 $483 $0 $100 5 $3,558 Month 2 $1,300 $1,300 $375 $483 $0 $100 5 $3,558 Month 3 $1,300 $1,300 $375 $483 $0 $100 5 $3,558 Month 4 $1,300 $1,300 $375 $483 $0 $100 5 $3,558 Month 5 $1,300 $1,300 $375 $483 $0 $100 5 $3,558 Month 6 $1,300 $1,300 $375 $483 $0 $100 6 $3,558 Month 7 $1,300 $1,300 $375 $483 $500 $100 6 $4,058 Month 8 $1,300 $1,300 $375 $483 $500 $100 6 $4,058 Month 9 $1,300 $1,300 $375 $483 $500 $100 6 $4,058 Month 10 $1,300 $1,300 $375 $483 $500 $100 6 $4,058 Month 11 $1,300 $1,300 $375 $483 $500 $100 6 $4,058 Month 12 $1,300 $1,300 $375 $483 $500 $100 6 $4,058

Daniel Lukasavitz Anna Burns Baking Assistants Accountant Marketing Guru Delivery Specialist Total People Total Payroll

0% 0% 0% 0% 0% 0%

Our company currently consists of two proprietors, Daniel Lukasavitz and Anna Burns. The two of us run every aspect of the company with a little help from our hired assistants. Since we currently do not have funding to pay any employees, we are planning on future hirings to go as follows. After we obtain starting capital and acquire a food truck we would start to hire additional employees. We would start with an assistant baker and an accountant. These two positions would be critical to help us competently run a successful business. The accountant would help to keep the books straight and keep us on track to achieve maximum profits. The addition of an assistant baker would help to relieve Anna and Dan to help grow the company further and allow us to do administration work instead of production. After about six months of operation we would bring on a marketing guru to help us reach a larger group of customers and help to book community events. Lastly we would have an on-call cake delivery specialist. This person would help to organizing deliveries, table designs, and other essential logistics. Below is our organizational chart and expected monthly salaries. The first twelve months would be very

tight as far as monthly salaries. We hope to become popular enough to be able to increase all pay rates by 20% for all employees

Core Product Offerings

Market Research
While doing a market analysis I found that Greeleys average family spends $572.70 yearly on Bakery and Cereal products (www.businessdecision.info). That equals out to be $12,035,304 a year for Bakery and Cereal product sales. I do realize that the majority of this business is focused in big box stores and franchised businesses, but to even get a 10% market share would equal to about $300,000 annual business. If we look at the Snacks and Other Food at Home Products category, the chart defines as Snacks and Other Food at Home includes candy, chewing gum, sugar, artificial sweeteners, jam, jelly, preserves, margarine, fat, oil, salad dressing, nondairy cream and milk, peanut butter, frozen prepared food, potato chips, nuts, salt, spices, seasonings, olives, pickles, relishes, sauces, gravy, other condiments, soup, prepared salad, prepared dessert, baby food, miscellaneous prepared food, and nonalcoholic beverages (http://greeleygov.com/CMO/Documents/Economic%20Development/greeleyretailgoodsandservi cesreport.pdf). This categories annual average families spending is $1,506.55, with annual product sales that reach $31,660,238! A 10% market share would be $759,845.72 of annual business! With low over head and smart managing this could be the way to make some money.

Marketing Tactics
Custom Baked Goods plans a massive marketing plan, starting the day we receive starting capital. Using our existing Facebook page, Twitter, and Community Bulletin Boards, we can effectively reach thousands of people. We also plan on getting into a lot of the area events which involve print advertisement, such as Taste of Loveland, Greeley Arts Picnic, Oktoberfest and the various seasonal parades and festivals. Also, using the outside of the truck as a billboard gives an incredibly inexpensive, and also incredibly functional advertising medium.

Key Demographic Existing custom order customers for cakes, cupcakes, and deserts. Office employees Families

Key Marketing Messages Quality, Custom Baked Goods Local, Organic Ingredients Bring the Goods to YOU!

Importance of Internet and Social Media Lets our customers know the truck location throughout the day. Increasing our customer base through word of mouth. Guest feedback and location requests.

Competition
Much of the competition located in Greeley is from local, well-known Mom & Pop shops. These include Batter Up Cakes, Eileen's Colossal Cookies, Red's Dogs and Doughnuts, and Nielsen Family Bakeries. Custom Baked Goods will also have to contend with big box grocery stores such as Safeway, Wal-Mart, and King Soopers.

Competitive Advantage
Our company will have many advantages over our competitors. Having our bakery located in a mobile kitchen is our key advantage. The company can be readily moved to areas where substantial sales can be made. The use of the mobile food truck also allows us to maintain low over-head costs resulting in a better profit margin, something most of our competitors are lacking. Because Custom Baked Goods is a small company, we can easily adapt to changing market conditions by modifying our offerings as well as changing locations. The bakery intends to do a significant amount of sales via catering, delivery of pastries, and by having the truck positioned near popular events (such as concerts and sporting events) during the weekends. Approximately 1/3 of all food and beverage sale revenues will come from this aspect of Custom Baked Goods operations. By utilizing bio-diesel in our food truck we can avoid the every looming gas-hike. We can use recycled oil from local restaurants to fuel our truck. This is a win-win for both Custom Baked Goods and the local restaurants because they wont have to pay to dispose of their waste oil and we can get fuel for our trucks for very cheap, if not for free.

Competitive Barriers

The main barrier that Custom Baked Goods will encounter would be contending with living in a college community. During the summer months Greeleys population shrinks when schools is not in session. Another risk would be that Custom Baked Goods is still a fresh company and obtaining brand recognition will be hard, but feasible. Lastly, obtaining enough capital to start the venture is our biggest risk. We will have to obtain enough capital to sustain the company for at least the 6 months to a year of starting up.

Resource Analysis
This venture already has about 51% of the needed resources to make this business succeed. These resources include: personal experience and talent, knowledge, and a growing customer base. Custom Baked Goods uses an existing Facebook page into order to connect and market to followers. This resource is key to the operation of the business because it allows for a free approach of sharing product details, pictures, and specials with our customer base. Custom Baked Goods also already owns a lot of the necessary baking pans, decorating supplies, and tools needed to produce a majority of our products. The company also currently has a point-of-sale system along with the ability to accept credit cards and gift cards. The resources we are lacking are: start-up capital, a functional food truck, and a giant marketing campaign. The food truck will need to contain a 3 compartment sink, 2 ovens, a freezer and refrigerator, and a stove top. Without these resources Custom Baked Goods cannot grow into the niche market of food trucks.
Equipment Food Truck Eco-Friendly Retrofit Dishwasher, Mixer, Food Processor, 2 Cost $10,000 $5,000 $6,000

ovens, freezer, refrigerator, range Exterior Truck Accoutrement Total $21,500 $500

Legal Environment
Custom Baked Goods will need to meet all health regulations for food service. Because of our Food Truck status we do not have to be concerned with standing zoning permits, but do need to be aware of local laws for Mobile Food Operations. Special Events permits will need to be obtained in certain locations. Commercial insurance will be obtained as required by the county.

Timeline
The timeline for how we will proceed will start with securing start-up capital. Once we have the funding we will immediately put in a request for a custom made food truck. The customization of the food truck will most likely last 3-5 weeks. In that time we will start to acquire all start up supplies and inventory. We will also be finalizing permits and setting up appointments for county and city inspections. Once everything is finished and approved we will immediately begin working. Since the main purpose of the kitchen in to serve as Custom Baked Goods commercial kitchen, we can begin making all of our packaged goods to sell to local coffee shops on consignment. We will also be continuing to do our regular cake/cupcake business.

Growth Potential

In the next five years Custom Baked Goods has the potential to grow exponentially. By starting out small with a food truck operation, the company can grow into a traditional store front. In years 5-10, the company will have multiple locations throughout the state serving our ever-growing customer-base. The company will be in the red to start but within the first year Custom Baked Goods will be in the black. By utilizing the low overhead of running a bakery truck we can only see the profits growing rapidly. After the first year the business would plan on hiring staff to cover more shifts so that the owners can work on marketing and finding new locations or even including another bakery truck. Financial Projections: Custom Baked Goods is seeking to raise $50,000 from a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following: Development of the Custom Baked Goods Food Truck, Financing for the first six months of operation, Capital to purchase insurance, permits and licenses. Capital is also being raised through current sales of in home baked items. Once the truck is up and running we can predict that the company will generate a profit with-in 2 years. We believe that an estimated monthly income of $1,200 will allow the company to make all of it payments and purchase goods. That means that if the truck operates for 28 days out of the month that we will only need to sell $43 of product a day to achieve this goal.

End Game Strategy


If the business is very successful, Custom Baked Goods may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified

business broker to sell the business on behalf of the Food Truck. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings. If the venture has not gone according to play and we do end up having to close the doors (or in this case, turn of the engine) Custom Baked Goods will sell of any property it can and claim Chapter 11.

Financial Projections
Table: Profit and Loss

Pro Forma Profit and Loss Year 1 Sales Direct Cost of Sales Other Production Expenses Total Cost of Sales Gross Margin Gross Margin % $166,150 $32,123 $0 $32,123 $134,028 80.67% Year 2 $241,525 $47,232 $0 $47,232 $194,293 80.44% Year 3 $312,751 $60,499 $0 $60,499 $252,252 80.66%

Expenses Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Utilities Insurance Misc Truck Expenses Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales $45,696 $2,300 $0 $0 $6,000 $2,400 $2,000 $7,509 $0 $65,905 $68,123 $68,123 $0 $1,727 $66,396 39.96% $54,835 $2,500 $0 $0 $6,000 $2,400 $2,000 $8,103 $0 $75,838 $118,455 $118,455 $0 $18,381 $100,074 41.43% $65,802 $3,00 $0 $0 $6,000 $2,400 $2,000 $9,058 $0 $88,260 $163,992 $118,455 $0 $33,572 $130,420 41.70%

Chart: Profit Monthly

Chart: Profit Yearly

Chart: Gross Margin Monthly

Chart: Gross Margin Yearly

Table: Cash Flow

Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations $50,063 $104,118 $154,181 $54,019 $146,921 $200,940 $60,387 $172,515 $232,902 $0 $0 $0 $0 $0 $0 $0 $166,150 Year 1 $0 $0 $0 $0 $0 $0 $0 $241,525 Year 2 $0 $0 $0 $0 $0 $0 $0 $312,751 Year 3 $166,150 $166,150 $241,525 $241,525 $312,751 $312,751 Year 2 Year 3

Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $0 $0 $0 $0 $0 $0 $0 $154,181 $11,969 $30,969 $0 $0 $0 $0 $0 $0 $0 $200,940 $40,585 $71,554 $0 $0 $0 $0 $0 $0 $0 $232,902 $79,849 $151,403

Table: Balance Sheet

Pro Forma Balance Sheet Year 1 Assets Current Assets Cash Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities $0 $0 $0 $34,802 Year 1 $0 $0 $0 $78,021 Year 2 $0 $0 $0 $158,619 Year 3 $30,969 $3,834 $0 $34,802 $71,554 $6,467 $0 $78,021 $151,403 $7,216 $0 $158,619 Year 2 Year 3

Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth

$11,774 $0 $0 $11,774 $0 $11,774 $300,000 ($281,000) $4,029 $23,029 $34,802 $23,029

$12,103 $0 $0 $12,103 $0 $12,103 $300,000 ($276,971) $42,890 $65,918 $78,021 $65,918

$14,365 $0 $0 $14,365 $0 $14,365 $300,000 ($234,082) $78,335 $144,253 $158,619 $144,253

Table: Sales Forecast

Sales Forecast Month 1 Sales Dessert Sales POP Sales Carry Out Weekly Lessons Total Sales Direct Cost of Sales Dessert Sales POP Sales Carry Out Weekly Lessons Subtotal Direct Cost of Sales 0% 0% 0% 0% $12,000 $200 $300 $1,800 $14,300 Month 1 $2,400 $30 $45 $270 $2,745 $12,000 $200 $300 $1,800 $14,300 Month 2 $2,400 $30 $45 $270 $2,745 $12,000 $200 $300 $1,800 $14,300 Month 3 $2,400 $30 $45 $270 $2,745 $12,000 $100 $300 $900 $13,300 Month 4 $2,400 $15 $45 $135 $2,595 $12,000 $100 $300 $900 $13,300 Month 5 $2,400 $15 $45 $135 $2,595 $12,000 $100 $500 $900 $13,500 Month 6 $2,400 $15 $75 $135 $2,625 $16,000 $300 $1,000 $1,800 $19,100 Month 7 $3,200 $45 $150 $270 $3,665 $8,000 $50 $200 $900 $9,150 Month 8 $1,600 $8 $30 $135 $1,773 $12,000 $500 $700 $900 $14,100 Month 9 $2,400 $75 $105 $135 $2,715 $8,000 $100 $200 $900 $9,200 Month 10 $1,600 $15 $30 $135 $1,780 $12,000 $300 $500 $900 $13,700 Month 11 $2,400 $45 $75 $135 $2,655 $16,000 $500 $500 $900 $17,900 Month 12 $3,200 $75 $75 $135 $3,485 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12