Bus 600 presentation rev 1 cherri edmond 043010

• Caketail Music Café (CMC) is a start-up bakery and coffee retail establishment based in Palo Alto, California.

• CMC offers beverage, light food and desserts at a moderate price to meet the demand of the middle-to higher-income local market area residents and students.

• CMC is equally owned and managed by two partners.Miss Cherri Chiang (CALMAT MBA)

extensive experience in bakery & beverage, sales & marketing.5 years of experience in food industry (Restaurant/ Bakery & beverage) in Europe, US and Taiwan.

Mr. Edmond Low (CALMAT MBA)experience in the area of operation, management and administration. 8 years of experience in food industry (Bakery/ Banquet/ fast food chain) in US, Malaysia, Australia and Thailand.

Cherri ConfidentialPage 2

• Financial Considerations•$150k of its own capital, borrow $100k (SBA - 10year loan)•CMC Sales forecast:

• $ 1.04 mil – 1st yr, $1.2 mil – 2nd yr, $1.39 -3rd yr.•CMC should break even by the fourth month•Profits expectation

• ~$319k in 1st yr, $375k 2nd yr, and $452k 3rd yr.

Edmond ConfidentialPage 3

Mission:• To offer high quality coffee, tea, and pastry

products at a competitive price.

• The inspiration of the current active and healthy social life around the world.

Vision:• The hub of leisure/ entertainment for 61,200 Palo Alto populations.

It will attract Bay Area customers 7.4 million people and soon expand.


– Introduce main and new product of “Caketail” that gives consumers a new option on a dessert. (create their own favorite dessert)

– Customers are able to create their own favorite dessert by choosing homemade cake base, freshest fruit, and unique sauce.

– We also provide low-calories combination.

– We have open kitchen where customers can watch the chef create their dessert

– Also provide freshly classic desserts and pastry products at all times


• CMC improve social interaction in Bay Area. CMC features:

– heaven for all live sports entertainment with giant HD TV screen & > 10 TVs – free wi-fi internet service for work/ leisure/ stay connected with world and

people.– free magazines and social business board for the customer– Evening Live performers (soft music and all time favorites music

performance)


• CMC focuses:

– the middle-upper income markets

• Students

– Stanford University yearly enrollment ~ 30,000 students.

– High visibility/ competitive products/ service - critical to capture segment

• Local Residents

– establish a large regular customer base lead to a healthy, consistent revenue base to ensure stability of the business.

– Palo Alto population is 61,200 (2009). Home of high-tech firms.


• The location : Palo Alto, California

– 7,000 businesses with 98,000 jobs.

– premier business location in the

Bay Area and Silicon Valley for

a variety of reasons.




• Target Market Segment Strategy– Personal and expedient customer service

at a competitive price is the key to maintaining

the local market share of this target.

• Market Needs– Coffee and Bakery products are very much

in demand daily. – Much of the day's activity occurs

• Early in the morning 7am to 10am,

• lunch hours 11am to 2pm,

• tea break 3pm to 4pm,

• happy hour 6pm to 11pm.


• Service Business Analysis– Cool marine climate in Bay Area stimulates

consumption of hot beverages throughout

the year.

– Palo Alto Coffee drinkers are finicky about

beverages quality offered at the numerous

coffee bars across the region.

– CMC will position itself as a place

where customers can enjoy a cup of

delicious coffee with a fresh pastry in

a relaxing environment.


• Competition and Buying Patterns– No near level of competition on product quality

and customer service as CMC.

– High quality product in a relaxing atmosphere demand• desire a unique, friendly and classy experience. • Caketail will be our new leading product

– Leading competitor sell product through

company-operated retail stores.

– Smaller stores and kiosks sell whole-bean coffees

– Current industry retail sales mix –


• Unique products and environment combination• A unique food alternative:

– The look, feel and taste of our products.– Value for money reputation– loyal follower of coffee dessert lovers and

connoisseurs.• Our products will be served fresh and ready to consume • Emphasize on the importance of the customer

satisfaction.• Excellent Service /store concept.• Highly entertained environment.


• Focus to attract new customers, educate those customers and create a loyal base.

• The following marketing strategies will be

employed in the first year of business:– Signage– Media advertising– Flyers– Book coupons– Word of mouth– Alliances– Internet Marketing


• Sales Strategy– CMC anticipates sales

• $1,040,250 in the first year, • $1,202,493 in the second year, • $1,388,548 in the third year.

Page 20 Edmond Confidential

• Success in providing our customers a combination of – delicious food – appealing environment– outstanding customer service.

• Ensure their experience with CMC is enjoyable. • To establish a loyal customer base.• Our coffee and cakes will be cooked throughout

the day, • We need to offer fast and quality service.• Punch cards, meal deals and weekly menu

specials to encourage more customers.


• Sell the company as well as the product. – comprehensive employee training to offer customers

the finest experience. • Implement a Point-of-Sale (POS) computerized cash

register system via internet. • Strategy focus can be accomplished by:

– Hiring employees who appreciate our unique products.

– Continually assessing the quality of all aspects.– Interacting with our customers personally.– Food choices evaluation and keeping favorites on the

menu/seasonal specials.


• Strength:– Products of extremely good quality and taste. – Youth oriented brand - huge potential 55 % population is below 24 – Friendly/ customer first service employee.– Understand the social/ consumer needs.– Utilization of new technology as marketing tools

• Weakness:– New brand image/ lacks strength to maintain brand loyalty. – Target market characteristics (youth) may risk market potential.

• Opportunities:– Coffee - fastest growing industry all time ($18billion yearly in US). – Strategic Location - student. – New lifestyle trend - active social life/ entertainment – Healthy lifestyle hang out place – non alchoholic/ educated consumer.

• Threats:– Competition with other coffee cafes - 7 others café. (but no bakery café concept)– New entrants of competitor with similar concept.


• CMC expects to continue its steady growth in profitability over the next three years of operations.


• to meet CMC's needs as the business generates cash flow sufficient to support operations

2010 2011 2012Cash Received

Cash from OperationsCash Sales $1,040,250 $1,202,493 $1,388,548 Subtotal Cash from Operations $1,040,250 $1,202,493 $1,388,548

Additional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $1,040,250 $1,202,493 $1,388,548

Expenditures 2010 2011 2012

Expenditures from OperationsCash Spending $575,500 $579,551 $634,147 Bill Payments $91,200 $105,260 $120,673 Subtotal Spent on Operations $666,700 $684,811 $754,820

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $10,000 $15,000 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $20,000 $20,000 Dividends $0 $0 $0 Subtotal Cash Spent $666,700 $714,811 $789,820

Net Cash Flow $373,550 $487,682 $598,728 Cash Balance $456,883 $944,565 $1,543,293

Cash Flow


2010 2011 2012Assets

Current AssetsCash $456,883 $944,565 $1,543,293 Other Current Assets $15,000 $15,000 $15,000 Total Current Assets $471,883 $959,565 $1,558,293

Long-term AssetsLong-term Assets $65,000 $85,000 $105,000 Accumulated Depreciation $60,000 $129,000 $208,350 Total Long-term Assets $5,000 ($44,000) ($103,350)Total Assets $476,883 $915,565 $1,454,943

Liabilities and Capital 2010 2011 2012

Current LiabilitiesAccounts Payable $14,574 $15,438 $19,907 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $14,574 $15,438 $19,907

Long-term Liabilities $100,000 $90,000 $75,000 Total Liabilities $114,574 $105,438 $94,907

Paid-in Capital $150,000 $150,000 $150,000 Retained Earnings ($100,000) ($60,000) ($10,000)Earnings $319,098 $375,021 $452,477 Total Capital $357,309 $854,127 $1,463,386 Total Liabilities and Capital $471,883 $959,565 $1,558,293

Net Worth $357,309 $854,127 $1,463,386

Balance Sheet


• Key ratios– for the retail bakery and coffee shop industry. – Standard Industry Classification

(SIC) Index code,5812, Eating Places.


Thank you!!

Education

Bus 600 presentation rev 1 cherri edmond 043010