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Copy of Simply Celebrate/Georgetown Cupcake Partnership

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Kristin Nitta

on 1 April 2013

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Transcript of Copy of Simply Celebrate/Georgetown Cupcake Partnership

Cupcake bakery
Locations: Centennial Gateway Area (Las Vegas)
Offers over 60 flavors of cupcakes, including 18 flavors with a rotating monthly and weekly menu
Organic ingredients and made fresh daily
Cater special events and process large volume orders
Actively involved within the community The 4 P's A little more about the business Goals and objectives Cupcake Crave Operation Kristin Nitta Cupcake Crave Begin planning on promotional advertising Organize and coordinate events

for promotional advertising Distribution and inventory SWOT Analysis Strengths: Opportunities: Weaknesses: Inexperienced
Potentially higher costs for organic ingredients
Brand recognition against established competitors
Start up and operating expenses
- We have a limited budget in the early stages
We have a small staff.
Establishing credit to obtain financial support from banks
Our competitors offer large cakes, but my business doesn't Threats: Ease of entry
Threat of substitutues
Elastic demand
The economy
Establised competeing businesses
Indirect competitors
Customer acceptance
Nearby competitors- The Cupcakery and Gigi's Cupcakes Financials References Product
Wide variety with over 60 flavors to choose from

Flavor categories of, new original flavors, classic favorites, comfort food, ethnics, and holiday specials

Customization options- opportunity for customers to customize their order the way they want it, unique to their individual tastes
- Select the cupcake flavor, inside filling, icing, or drizzle, and topping

Customers can even submit their own creations through our "Cupcake Wars" contests for the chance for their specialty to become a part of our menu. Place Price Hire and train employees Create a business plan Work toward steady operation Company Description Why Cupcakes? Second mover's advantage
Growth potential
Ease of entry
Relatively inexpensive to open and manage
Can survive economic downfall
Low food costs, inventory/supply expenses
Minimal staff personnel Business Philosophy, Key words Customer relations Corporate social responsibility Top quality products Community involvement Organic and made fresh daily Excellent customer service/satisfaction Successfully appeal to my target market and work towards expanding my market
Net 10% of the gross
Year over year, steadily improve the profit margin
Become a local favorite, through Zagat ratings
Earn the title of "Best of Las Vegas" Promotion Cupcakes Baked goods Sandwiches Salads Cupcakes Our emphasis is on cupcakes; we sell other products too. Such as original pastry items and sweets, fresh deli sandwiches, small salads, and beverages

There's something for everyone

We guarantee that our products are fresh and prepared daily, using only organic ingredients

-We give away our remaining excess to food banks or other organizations that give the food to those in need (Social Corporate Responsibility)

Orders can be purchased through face to face interaction in stores or online Not just cupcakes! Cost- Oriented The cost of making our product available to sell (Cost of Goods Sold)
Production- labor costs and ingredients Determined the food cost of one product under each category of our product lines

Approximated cost for ingredients

Determining the unit price for each measurement that made up the total amount of the product

Convert measurements

Divide the cost by the yield to get the cost of each individual product

Double the price to represent 50% mark up

Added labor cost (generally ranges from $0.40- $0.75) Determining the food cost ½ cup of sugar, ½ cup (4 lemons) lemon juice, 2 tsps. diced onion, 1 tsp. Dijon mustard, cup olive oil 1 tbs. poppy seeds, 1 head of romaine, 4 ounces of cheese, ¼ cup dried cranberries, 1 apple, 1 pear Lemons: $1.99 for 4 (0.04, which was divided by 12)Sugar: $0.58 for 2 cups (0.15 for ½ cup - $0.01)Onions: $3.09 for 3 ($1.03 each, 0.26 for ¼ used, $0.02)Dijon mustard: $19.74 for 6 pack, 9 oz. ($3.29 for 1 jar, $0.06 for 1 tsp., $0.0)Olive oil: $6.34 for 17 oz (2/3 cup= 5 fluid oz., $3.31 for cup, $0.28)Poppy seeds: $2.14 for 2.5 oz (2oz= 4 tbs., 0.53, $0.04)Romaine lettuce: $3.09 for 3 ($1.03 for 1, of it used $0.01)Shredded cheese: $10.09 for 2 pounds (1 lb. = 16 oz., $5.045 per pound, $1.26 for 4 ounces, $0.11)Dried cranberries: $3.86 for 16 oz. ( 8 oz. in a cup, cup= 5 oz., $0.12)Apple: $3.99 for 6 ($0.1)Pear: $0.44 each ($0.04)Cost: $0.77 (2) = $1.54Labor cost: $0.46Selling price: $2.00 Example recipes: Salad: (Serves 12) 1/3 cup chopped onion, 2 cloves minced garlic, 1 tbs. olive oil, ¼ cup shredded mint, 1 tbs. Worcestershire sauce, French roll, 2 sliced tomatoes, 1 tsp. dried Italian seasoning, ¼ cup shredded Parsley, 2 tbs. lime juice, 6 oz. turkey, 4 slices of MozzarellaOnions: $0.90 each (only partially used, $0.23, $0.06)Garlic:$1.25 for a bulb (9 cloves in a bulb, ½ a clove needed each, $0.07)Olive oil: $5.99 for 17 oz (17 oz.=34 tbs., $0.18 for 1 tbs. $0.04)Mint:$1.25 per bunch (about 6 leaves needed, $0.08)Worcestershire: $2.45 for 6 oz (1 tbs=1/2 oz, $0.45, $0.11)French roll: $0.20 eachTomatoes: $3.47 for 4 ($0.87 each, only partially used, $0.22)Italian seasoning: $2.58 for $1.25 oz (1 oz. = 6 tsp., $0.43, $0.11)Parsley: $1.69 for 1 bunch (1 bunch chopped is 1¼ cups, $0.34, $0.08)Limes: $0.20 each (1 lime= 2 tbs. $0.20, $0.05)Cheese: $2.50 for 15 slices ($0.17 each slice)Turkey: $3.00 for 12 oz (1.5 needed each, $0.34)Cost:$1.53 (2)= $3.06Labor cost:$0.44Selling price:$3.50 Sandwich: (Serves 4)
6 egg yolks, ¾ cup white sugar, cup milk, 1 ¼ cups heavy cream, ½ tsp vanilla extract, 1 pound Mascarpone cheese, ½ cup coffee, 2 3oz. packages ladyfinger cookies, 1 tbsp. unsweetened cocoa powder

Eggs:$2.49 for 1 dozen ($1.25 for 6, $0.16)
Sugar:5 pounds for $2.88 (2 cups=1 lb., $0.58 per pound,$0.14 for ½ cup, $0.11 for ¾ cup, $0.01)
Milk: $3.29 for 1/2 gallon ($0.41for 1 cup, $0.14 for cup,$0.27 for 2/3 cup, $0.03)
Heavy cream:1 quart for $5.37 (1 quart= 31oz.,10 oz. in 1 ¼ cup, $1.73 for 1 ¼ cup, $0.19)
Vanilla: $3.48 for 2 oz. (1 ounce= 6tsp. $1.74 for 1 oz., $0.29 for 1 tsp., $0.15 for ½tsp. $0.02)
Mascarpone: $2.49 for 8 oz. (1 pound=16 oz., $2.49*2= $4.98, $0.55)
Coffee: $6.98 for 34.5 oz. (½tbs.=½ cup, 1 oz= 2 tbs., $0.20 per oz. $0.05 for ½ a tbs., .0006)
Cookies: $3.71 for 14 oz. ($0.27 per oz., $1.59 for 6 oz., $0.18)
Cocoa:$3.99 for 8 oz. (0.50 per oz., 1 oz.= 2 tbs., 0.25 for 1 tbs., $0.03)

Cost: $1.17(2)=$2.34
Labor cost: $0.66
Selling price:$2.00 Assorted desserts-Tiramisu recipe: (Serves 9)

10 tbs. butter, ½ cup sugar, ¼ cup milk, 1 tbsp. orange zest, 3/4 tsp. baking soda, 2 eggs, 1/3 cup yogurt, 1 cup flour, 1 cup white chocolate, 2 cups powdered sugar, 3 oz. cream cheese, 2 tbsp. orange extract

Flour: 10 lb, $ 4.84 (1 cup needed, 10 pounds=40 cups, $0.12, $0.01)
Baking soda: $0.99 for 8 oz (8 oz.= 48 tsp, $0.12 for 1 tsp.)
Milk: $3.29 for 1/2 gallon ($0.41 for 1 cup, $0.10 for ¼ cup, $.008)
Butter:1 lb for $2.55 (10 tbs= 5 oz,1 pound= 16 oz, 32 tbs per pound, $0.80, $0.07)
Eggs: $2.49 for 1 dozen (2 needed, $0.21 each, $0.42 for 2, $0.04)
Sugar: 5 pounds for $2.88 (2 cups=1 pound, $0.58 per pound, $0.14 for ½ cup, $0.012)
Powdered sugar:$2.59 for 16 oz. (1 cup needed, 2 cups= 8 oz., $0.65 for 1 cup, $0.05)
Cream cheese: $1.31 for 1 3 oz case (3 oz. needed, $1.31, $0.11)
Orange extract: $2.56 for 1 oz. (2 tbs. needed, $2.56, $0.21)
Yogurt: $4.39 for 32 oz ($0.137 per oz, 1/3cup= 2.7 oz, $0.37, $0.03)
White chocolate: $3.79 for 12 oz ($0.3158 per oz.,$1.89, $0.16)
Oranges $4.09 for 6 ( $0.68 each, $0.06 for just the zest)

Labor cost:$0.74
Selling price: $2.50 Orange, white chocolate cupcakes: (Serves 12) Pricing Based on Competitors: On average, our competitors sell their cupcakes for $2.50 and $20 per dozen.

Necessary to match their prices to keep a competitive edge

Prices can't be lowered long term(especially within the first 2 years of opening) without compromising profit

However, there is room to increase or decrease the price if needed

Price skimming- rather than start our prices off low and then increase, we will start off high and then decrease if necessary

Prices reflect its quality (a form of prestige pricing)

Quality, freshness, flavor, and customization

Our largest and fiercest competitor is the Cupcakery, controlling approximately 32.7% of the market- Our prices matches and is in line with theirs Business: Price: Individually Price: Per Dozen The Cupcakery $2.50 $20.00 Retro Bakery $2.65 $29.00 Gigi's Cupcakes Not Sold Individually $36.00 Madhatter Cupcakes $2.99 $27.48 Freed's Bakery $2.08 $25.00 Cupcake Crave $2.50 $20.00 Demand- Oriented Being in the maturity stage of the product life cycle, demand is elastic and will fluctuate
Will decrease as demand decreases
Price skimming
Promotional deals, discounts Growth Potential: In the June 2011 survey, cupcakes accounted for 5% of all overall sales
In store cupcake sales increased 18.3%
17% increase in unit sales compared to 2010
The bakery department declined 0.4% within a year
The New York Times claims that cupcake sales are expected to rise another 20% The average American spends 12.4% of their discretionary income on food ($6,133 annually) Higher than insurance/pensions, healthcare, and entertainment Break-Even Analysis: Pricing is fixed so that our business can reach our desired profit and reach, or at least break- even within the first year

Opening expenses are expected to be $480,012

If 185 cupcakes, 77 pastry items, 88 sandwiches, 76 salads, and 90 beverages are sold daily within the first year, we will make a potential revenue of $480,060

Meaning we would be able to break even- the first year If we continue to produce and sell, with an increase on sales of 15% the second year and then increase by 20% by the third, our net profit will reach $91,022 by the third year Marketing Strategy: Primarily focus on word of mouth advertising - The most effective and powerful form of advertising
- Generally costs less
- More direct and pertinent to my business Occasional demonstrations on how to make and decorate select cupcakes from our menu
Allows people to feel involved with our business
Interaction with potential customers
Developing customer relations
Opportunity to sell our cupcakes
Make people more aware of my business, and our products Cooking demonstrations Why taste testings? - The benefits: Social events in in which people are open minded to try new experiences and foods
Usually people bring friends and family to share the experience
An opportunity to introduce our brand before our opening
Gain customer recognition
Brand acceptance
Develop a positive image
Start developing customer relations
We can also get feedback from potential customers
What they like/don't like Additional information Individuals will be charged a small entrance fee- The money goes towards covering production, advertising, equipment, space, music, ets. Bake sales- Cupcakes for a cause Annual bake sales to raise money for churches, schools, and charity/donations
- Cupcakes for a cause
By participating in the bake sale, we can sell our products in bulk for a slightly discounted price or set up a station
Community event that helps to build a positive image School involvement Events - Word of mouth Selling our products in exchange for school prizes
Bake sales/fundraisers
Internships for high school seniors Cross Promotion Cupcake Crave will be using cross promotion to attract a larger audience within our target market
Partnering with businesses that have the same values and principles to reinforce our image
Gain constant production By selling to Fresh & Easy, we will have a steady production
Their business has a reputation of carrying products that are healthier, flavorful, and fresh
Neighborhood friendly, and strong customer relations
Well recognized, with over 20 locations established throughout Social Networking I plan on utilizing social networking, such as Facebook, Twitter, and Pinterest to continue building our customer base

Gainin demographic, and psychographic information on existing and potential customers

Social networking has been successfully used by numerous B2C's and has helped in building customer loyalty

Relatively inexpensive form of advertising

Controlled spending- you spend as much as you want to

The customers benefit in following our social networks is that they can receive additional promotional deals Average price range being $0.75 per day
$0.75 per day *365 days- 1 year = $273.75* 3 social networks
= $821.25 for cost per click
The budget is set for $1,500 annually, leaving $226.25 a year to spend on the campaign for each social network 20% Of all views on the web are on Facebook

Approximately 850 million Facebook users (1 out of every 12 people)

425 million mobile users

48% of young Americans admit to getting their news from Facebook

On average, people spend 700 billion minutes on Facebook every month 107 million active users in the U.S.

517 million accounts total (as of July, 2012)

Twitter is growing at a rate of 11 accounts per second

On a busy day, twitter sees about 175 million tweet One of the top 10 largest social networks with 11 million visits per week

Over 10.4 million registered users

Used by over 100 brands
9 million monthly Facebook- connected users Personnel Internships $1,000 monthly budget- $12,000 for the first year

The average small business spends $500-$1,000 on advertising monthly

The cost is highest within the first year, it'll steadily decreases over the years Promotional Budget: Form of advertising: Cost to Advertise: Percentage of the Budget:

Social Networking $1,500 annually 12.5% Website $1,000 annually 8.3% Taste Tastings and Events $3,000 annually 25% Flyers and Business Cards $500 annually 4.2% Decorations and Signage $5,000 annually 42% Free Samples (2,000) $600 annually 5% Miscellaneous/Extra $400 annually 3.3% Splitting the budget: Located by Cafe Rio
2,751 square feet
$7,784 per month
$1.50 per square foot for utilities
$4,126.50 monthly Centennial Gateway Walmart Supercenter (1.2 miles, 4 minutes)
Raising Canes (0.4 miles, 2 minutes)
Yogurtland (0.1 miles, 15 seconds)
Café Rio (0.0 miles, 0 seconds)
In-N-Out Burger (0.4 miles, 2 minutes)
Fresh & Easy (2.2 miles, 7 minutes)
Smashburger (151 feet, 7 minutes)
BJ’s Restaurant and Brewery (1.4 miles, 7 minutes) Areas of business that cater to the same audience: New, developing area
Highly populated with our target demographics
Up for lease; the price was affordable to or budget
Good size starting out
Located near a residential area- highly accessible and convenient
Attracts business from other business in our area Competitors, location: The Cupcakery:
9680 South Eastern Avenue, Las Vegas, NV 89123 (25.6 Miles in distance, 30 Minutes away- Traffic: 33 Minutes)
7175 West Lake Mead Blvd, Suite 118, Las Vegas, NV 89128
(5.3 Miles in distance, 9 Minutes- Traffic: Minutes)
3770 Las Vegas Blvd, South, Las Vegas, NV 89109 (17.5 Miles in distance, 23 Minutes away- Traffic: 9 Minutes) Madhatter Cupcakes
• 4195 S. Grand Canyon Pkwy, Ste 105, Las Vegas, NV 89147
(19.1 Miles in distance, 22 Minutes- Traffic: 22 Minutes) Retro Bakery • 7785 N. Durango Dr. #130, Las Vegas, NV 89131 (4.2 Miles in distance, 9 Minutes away- Traffic: 10 Minutes) Gigi's Cupcakes
• 1 South Main St. Las Vegas NV 89101 (12.7 miles in distance, 15 Minutes away- Traffic: 16 Minutes)
• 1150 E. Flamingo Rd, Ste. 105, Las Vegas, NV 89109 (16.7 Miles in distance, 21 Minutes away- Traffic: 22 Minutes) Freed's Bakery
• 9815 South Eastern Avenue, Las Vegas, NV (25.7 Miles in distance, 30 Minutes away- Traffic:30 Minutes) *Average distance: 15 Miles, 19 Minutes from our location Find a partner/partners
Obtain necessary licenses and permits Handle financials; acquire loans Lease the store front Designing, set up, and organize the store Ordering Soft opening Grand opening Evaluate the business Achieve steady operation Pay off loans Find suppliers Establish an order Niche Targets children to mature adults
- Our main focus is on young adults ages 25-39
Families (4 or more) living within 10 miles of the Centennial Gateway area
Income of $50,000- $149,000 (middle to upper middle class) Customer statistics Targeting our target market Customers can order both online and in store

Online ordering is recommended for larger orders/those with design

Ordering ahead- more menu options, along with added flavors not available in store

Assembly line
Immediate service Online ordering In store ordering Personal experience 4 years of Culinary training/experience
Marketing and Entrepreneurship course electives
- Having an understanding of both allows me to be a better business owner
- My partner(s) will be bring their different skills and experience
1. population by zip code- 355,759 within 10 miles of the Centennial Gateway area
2. Account for family households (with children) making an income of $50,000-$149,000 - 114,751
3. Account for families without children and subtract form 114,751

44,439---> 114,751-44,439= 75,525 Steps in calculating our target market Our share of the market Our top competitors Cupcake crave: 26.33%
The Cupcakery: 32.72%
Retro Bakery: 16.64%
Gigi’s Cupcakes: 26.91% Based on population and target income, we were able to come to the conclusion that we attract mostly those ranging from 40-64 with 34,634; and ages 25-39 as the second highest group with 33,124. 5,230: customers ages 6 and under
10,344: customers ages 19-24
12,103: customers ages 7-18
33,124: customers ages 25-39
34,634: customers ages 40-64 By looking at the ethnicity of the area, our company can help us determine menu items that should be included to expand our target market and appeal to each ethnicity. The majority is white, approximately 64%, the next two largest ethnic groups are Mexican and African American. Classic favorites Comfort food Originals and Holiday flavors Age groups Ethnic groups Caucasian: 64%
Asian: 5%
African American: 11%
Mexican: 10%
Other: 5%
Mixed:5% Cupcakes: $2.50
Pastry items: $3.00
Sandwiches: $3.50
Salads: $2.00
Beverages: $2.00 Products made with the best organic ingredients
Food is prepared daily
Wide variety in our menu
- We also offer baked goods, as well as sandwiches, salads, and beverages
- Low sugar, sugar free, low fat, and fat free options
Competitive prices
Accessible and convenient location
Catering services
Excellent customer service
Lower inventory costs- similar ingredients Competitor's higher prices
Expansion of the Centennial Gateway area- trafficking
Positive relationships within the community
Cross promotion
Partnerships with local schools and churches
- Internship opportunities
Second mover's advantage
Baker 1 5:00 -10:00 6 Mon. - Fri. $13 per hour
Baker 2 5:00 -10:00 6 Sat. - Wed. $13 per hour
Baker 3 on call on call on call $13 per hour
Kristin Nitta 5:00 - 5:00 12 Mon. - Sat. $0 for the first year
Partner 9:00 - 7:00 11 Tues. - Sun. $0 for the first year
Line 1 11:30 - 5:30 6 Mon. - Fri. $8.25 per hour
Line 2 11:30 - 5:30 6 Sat. - Wed. $8.25 per hour
Cashier 1 8:30 - 5:30 10 Mon. - Fri. $9.00 per hour
Cashier 2 8:30 - 5:30 10 Mon. Wed. - Sun. $9.00 per hour Position: Hours: Hours Total: Days: Pay: Staffing is as cost effective as possible
Hired minimal employees to lower the cost as the cost as much as possible
Expected to cost $15,420 per month
To save money, my partner and I will be working side by side with employees Number of Employees:
3 bakers
2 line workers
2 cashiers
It’s expected my partner and I won’t make a salary the first year
Our money will be invested in starting the business
My responsibilities:
Open the store- take starting inventory
Handle all accounting and financials,
Assist bakers
Handle online orders, phone orders, and catering
Employee scheduling and pay Organization chart My partner ‘s responsibilities:
Close the store- take ending inventory
Order supplies
Assist cashier and line workers
Handles promotional advertising Line workers :
Customize and assemble the cupcakes to the customer’s order Cashiers:
Takes the customer’s order
Exchanges and accounts for the money
Starting/ending count of the register
Occasionally cleans up on breaks Bakers :
Prepare the food- all baking and decorating
Clean up after their shift
Assists in menu decisions Internship oportunities with Northwest Career and Technical Academy's Culinary program
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