M rsels

Business Plan

KATIE EGELAND

KYLEE SCHOLAR

LORRIE KOLE

ALLIE LAWRENCE

JILL MCCLEARY

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Table of Contents

Executive Summary 3

Mission Statement 3

Brief Description 3

Goals And Objectives 3

Keys To Success 4

Philosophy 4

Target Customer 4

Location 4

Trends Affecting Business 4

SWOT Analysis 5

Competitive Analysis 6

Market Research 7

Products And Services 8

Marketing And Advertising 9

Legal Issues 10

Initial And Ongoing Inventory Needs And Potential Suppliers 10

Organizational Chart 12

Job Descriptions 13

Policies 16

Financial Plan 16

Appendix A 20

Appendix B 20

Appendix C 21

Appendix D 22

Floor Plan 23

References 24

EXECUTIVE SUMMARY

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Morsels is a wholesome café/bakery located in San Clemente, CA serving all natural, seasonal, organic, sweet and savory tapas. Today, many restaurants are opening up that serve tapas however, most tapas restaurants are geared towards nightlife. Tapas have traditionally been known to be small, snack-like, appetizer entrée food. Tapas for breakfast and/or lunch is a very innovative concept. By offering morning and afternoon tapas, Morsels will provide our customers with healthier portion sizes and alternatives to the large, oversized, processed desserts and pastries you get at conventional cafes and bakeries. Additionally, you can have it served with a nice, warm velvet-foam latte.

Morsels goal is to develop a repeat clientele of all the dessert and food lovers living and visiting the San Clemente, CA area through vigorous marketing and advertising. This unique experience will be a positive influence on those in the community and even those with special diets [i.e. Gluten-Free, Vegan, and in the future cater to those on a Raw Diet]. Morsels expects to see a substantial growth in sales throughout the first year and a profit by the start of the second year with expected growth of 20% by the end of the third year.

Morsels will be owned and operated by five Registered Dietitians who believe that all foods can fit into a healthy diet. It will be located directly in front of the San Clemente Pier, which generates over two million tourists during the summer months each year. With the backdrop of the beautiful coastline and 340 days of sunshine, a visit to Morsels will be a dining experience that locals and tourists will not soon forget.

This business plan will outline our goals and objectives as well as our philosophy and financials, which are supported by our research into the trends and forecast of our business.

NAME OF BUSINESS

Morsels

MISSION STATEMENT

Morsels is a wholesome café/bakery in San Clemente, CA specializing in bite-sized treats for everyone who eats. We serve your favorite treats, just in smaller portions for those who want a piece but not the whole darn thing!

BRIEF DESCRIPTION

Morsels will be a storefront café/bakery at the beach in southern California. We plan on opening the doors in June 2013, offering simple sweet and savory faire, with expansion to dinner items and alcoholic beverages within five years. We currently have three silent investors and two managing partners.

GOALS/OBJECTIVES

First year gross sales of $175,00.00. Increase sales by 150% by the end of month 12. Increase sales by 15% by the end of year two and increase sales by 20% by the end of year three.

Increase the percentage of our daily sales of espresso drinks and quiche, our highest price menu items.

Extend our hours of operation, expand menu to include dinner items and alcoholic beverages by year five.

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Keys to success

Provide high quality bite-sized sweet and savory items with customer satisfaction. Competitive pricing. Expanding the menu with seasonal, and popular items.

PHILOSOPHY

Morsels believes you can be healthy and still indulge. We believe in investing in our own community by purchasing locally whenever possible. We are committed to sustainability in our day-to-day operations to reduce our carbon footprint. We believe in full disclosure with both ingredients and nutritional labeling.

TARGET CUSTOMER

The target population is aimed at all the dessert and food lovers living and visiting San Clemente, CA and the surrounding towns. Specifically locals, families, tourists, beach goers, surfers, college students, stay at home mothers, retirees, and affluent business people looking for a place to have quick meetings. Because the San Clemente area draws thousands of tourists each summer, during the months of June through September, tourists will be our focused market group which will be the time of year where we advertise the most. We will be open all year round and be a favorite spot for the South Orange County locals1.

By offering all natural, seasonal, organic morning and afternoon tapas we will provide our customers with healthier portion sizes and alternatives to the large, oversized, processed desserts and savory pastries you get at conventional bakeries and cafes. Our target niche will be anyone who loves food looking for a healthier alternative to the conventional café.

LOCATION

San Clemente is known as the “Spanish Village by the Sea” and has a distinctive Mediterranean Style because of its breathtaking coastline, red-tiled roofs, over 340 days of sunshine each year, laid-back locals, and visiting tourists. Morsels will be located directly in front of the San Clemente Pier, which generates over two million tourists during summer months each year2. Additionally, the San Clemente Beach Trail is a very popular trail that brings in locals from exercise enthusiasts to those looking for a place to walk and talk with friends. This small stretch of restaurants already has a pizza shop, savory crepe restaurant, and an ice cream store. There is no coffee place or café/bakery in that exact location and Morsels would be the perfect café/bakery that area needs for the tourists in the summer and for the locals all year round.

TRENDS AFFECTING BUSINESS

With over 340 days of sunshine each year, San Clemente locals and tourists are not only drawn to an active lifestyle by the beach, but the majority of them live an overall healthier lifestyle than the average population.3,4 Morsels is that wholesome café/bakery that specializes in bite-sized treats for those looking to enjoy a sweet or savory treat while still being true to their healthy lifestyle.

Today, many restaurants are opening up that serve tapas. Tapas are known to be small, snack-like, appetizer entrée food. Tapas are popular amongst friends and family because it’s fun to order a few tapas to share over a glass of wine or beer. Actually, the definition of a “tapas” in many online dictionaries is a small appetizer usually served with a glass of wine or beer.5 Congruently, Morsels is going to be a similar place friends and family come for a similar exciting, bonding experience! When you come to Morsels with friends and family, your taste buds will be deliciously satisfied with a couple bite –sized savory treats or sweets over a nice, warm, velvet-foam latte.

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Dozens of articles are written monthly on new tapas restaurants that are coming up all across America. New York Times restaurant critic, Pete Wells, thought that small plates are a trend that has stood the test of time.6 According to Emarld Coast, tapas are more than an appetizer but not quite a meal, tapas has become increasingly popular, even in our super-sized meal culture. Everywhere you turn somebody has something great to say about tapas. But we’re not trying to be just another “tapas” trending café. We’re all RDs and to us, smaller portion sizes mean less calories and hopefully healthier consumers. The data for 2012 on obesity from the CDC states that one-third of Americans are currently obese and the trend is increasing. For years now, RDs, the media, and physicians have all been spreading the word to eat more fruits and vegetables, eat better, and exercise more. Well what Morsels is trying to do is to introduce another goal in healthy living. That is, “You can be healthy while still enjoying life and indulging in treats you love.” Also, AND (The Academy of Nutrition and Dietetics) has a strong message on portion control. Morsels will help spread this message.

SWOT ANALYSISStrengths

Morsels will be located in a very health-conscious, affluent, diverse population with both young families and retired couples. Positively, this demographic supports our target population and goal to give healthy treats to those who love to eat just not the whole darn thing. The exact building is right next to a very well traveled beach trail where people can either leisurely enjoy the panoramic ocean view out on the patio, or grab and go and savor on the run.

Since our products are smaller portion sizes, all natural, local, and mostly all organic, we are able to be a positive influence on those in the community and even those with special diets [i.e. Gluten-Free, Vegan, and in the future cater to those on a Raw Diet]. To add, since portion sizes are small, everyone on a budget will be able to feed their sweet tooth while not breaking the bank.

Also, ‘tapas’ for breakfast and lunch is a very innovative concept. Most tapas restaurants are geared towards nightlife. There is not a restaurant that serves tapas for breakfast around Orange County. In Portland, Oregon, Tasty N Sons restaurant has a focus on tapas for breakfast and according to Yelp!, it is a popular place to breakfast at.7 Another café called JK Wine Bar, in Ontario, focuses on tapas for breakfast and brunch and continues to do well since 2005. Young families can still feel youthful and hip by incorporating the ‘tapas tradition’ into their busy lives with their growing families.8

Morsels Café has a positive influence on the community because it supports local farmers, which also leaves a smaller carbon footprint.

Weaknesses

Food prices are gradually going up which will have a big effect on the prices we will have to charge on each item. Another weakness is that none of the owners have been previous café/bakery owners before, ordering food, and baking for large amounts of people. We will have to get a baker in for the first couple of months to show us how to operate all the special machinery and bake/cook on a larger scale. The startup costs will be significant mainly due to the location of the café. Its ocean front view is the big ticket. The actual size of the café/bakery will be small and quaint which could either be good or bad. Quaint and cozy is good. However, if we do get too many people wanting to come in and sit there it could be a problem because we will not be able to accommodate everybody with a table and chairs. Hopefully, most people will come, order Morsel treats, and take it to the beach, to their home, or eat them on a walk down the beach trail.

Opportunities

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At Morsels, there will be plenty of opportunities for expansion. In the future, branching out into other neighboring cities like Laguna Beach, Newport Beach, and Dana Point, will be good opportunities for growth. We could also provide catering to hospitals, day spas, school events, health benefits, and health clubs. We will be having nutrition presentations and community health opportunities at our café/bakery as well. Local healthcare providers will have opportunities to share health information as long as it goes along with our mission. For example, no protein shakes filled with chemicals and supplements. Health providers and other RDs who believe in living whole foods and a healthy lifestyle will be welcomed.

Threats

In San Clemente there are a couple other coffee shops that serve baked goods in a two-mile radius, which will be a competition. One of them is a Starbucks, and the other two have been established now for over five years. However, these coffee shops do not specialize in exactly the same sweet and savory treats as we do. There are no bakeries in a two-mile radius so that is one competitor that we won’t have to worry about at this time. A competitive analysis can be found in table 1 below.

COMPETITIVE ANALYSIS

Table 1: Competitive Analysis

Factor Morsels Strength Weakness La Galette Creperie Starbuck’s Importance toCustomer

ProductsBite size cupcakes, muffins, cookies, quiche, Espresso drinks, coffee and tea

Tapas for breakfast and lunch is innovative

May be limited to sources of fresh ingredients. New concept, may not be in consumer’s mind

Brenton style crepes, home style dishes, espresso, Italian sodas, custom blended teas

Brewed coffee, chocolate beverages, Espresso beverages, Starbucks petites; cupcakes, cake pop, muffin, salad and sandwiches

Important

PriceCupcakes $1.50Muffins $1.50Cookies ¢75Quiche $2Coffee $1.75Espresso $3.50

Competitive Initial investment required may be substantial and rising food costs could hamper selections

Crepes $5.95 - $7.95 Brewed coffee $ 1.75Espresso $3.00Cupcakes and pastries $2- $4

Very important

QualityHigh quality Utilizes local fresh

products, selections baked on premises

Can be costly to maintain

Good quality Average Very important

ServicesLimited seating, café and bakery, take out

Informed, health conscious employees, including RDs

None Limited seating cafe, take-out

Limited seating, take-out Very important

ImageClean, healthy/trendy low prices, fresh ingredients

New, trendy concept None Clean, healthy/trendy, quick and convenient

Quick and convenient Very important

Customer Profile

Medium-high income families, young adults, health conscious local and non-local residents, tourists

Surrounded by health -conscious, affluent, diverse population

Economy ups and downs could have an effect to our clientele

Medium-high income families, young adults, residents of San Clemente, tourists

Medium income, young adults, young professionals, tourists

Important

AdvertisingLocal word of mouth, flyers

Yet to be determined Depending on word of mouth

Local flyers National chain, TV, radio, newspapers, magazines

Very Important

LocationDirectly in front of the San Clemente Pier

Well situated to tourists and foot traffic

None Across the street from the San Clemente Pier

Walking distance to the San Clemente Pier

Important

AppearanceContemporary, clean,

beach chic decorClean, stylish and

appealing NoneContemporary,

clean, slick decorContemporary, clean,

stylishSomewhat Important

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MARKET RESEARCH

Consumers

The population in San Clemente, CA mostly consists of affluent, health-conscious residents and tourists. According to the 2011 U.S. Census Bureau, out of approximately 65,000 people living in San Clemente, the median household income is over $84,000 and each summer San Clemente’s beaches and perfect weather bring over two million tourists to the town, which creates a lot of revenue.9

Market Trends

The following quotes are a testimony to the potential of a tapas style trendy café such as Morsels. Clearly, this type of establishment is the wave of the future.

According to Small Business Trend’s at http://smallbiztrends.com/2011/12/10-food-trends-2012.html, “No matter how tough the economy is, people still need to eat. And foodservice entrepreneurs have shown a lot of creativity in the past few years—in fact, you could almost say the recession has sparked a renaissance of restaurant industry creativity. Beyond food trucks, burgers and beer, what are some of the hot food trends for 2012?” Included in their top ten list was the following:

Healthy eating: Trends like gluten-free foods and products catering to diners with food allergies will continue to be hot. Watch for whole grains, a wider range of salads, selection in portion size, and low-sodium options to grow in popularity as well.

Appetite for appetizers: Whether you call them tapas, small plates or appetizers, smaller-sized portions are going to keep growing strong for several reasons. They are less expensive for cost-conscious diners, offer smaller portions for health-conscious diners, and are made for sharing, which appeals to people’s desire to make eating out a social experience. Chefs like them too, because appetizers allow them to experiment with new recipes and ingredients without committing to a full-scale meal.”10

Another food industry tracker is Industry Leasers magazine. In their December 11, 2011 issue found at http://www.industryleadersmagazine.com/food-beverage-industry-trends-for-2012/ they state the following as the “to watch” food an beverage trends for 2012:

“Healthy Foods are so 2012”

The food and beverage industry better go healthy, because healthy food and drink is projected to be a big trend for 2012. This can include gluten-free and food allergy-conscious items. Also be on the lookout for whole grains, a wider range of salads, selection in portion size (a predicted 2012 food trend on this aspect are children’s mini-meals, or smaller versions of adult meals), and low-sodium options. All of those are expected to grow in popularity as well. On the beverage end, look out for more juice bars. An industry leader on this end is Starbucks, which purchased juice maker Evolution Fresh about a month ago.11

Smaller Portions

Especially as Americans get more health-conscious and portion-conscious, industry leaders in the food and beverage industry ought to be catering to the 2012 food trend of smaller portions. Whether it’s those children’s meals as previously mentioned, or smaller desserts, or even extra large dishes that are meant to be shared, diners are paying attention to these types of things. Something that’s on the rise on this angle is the appetizer. Whether you call them tapas or small plates, appetizers are going to keep growing strong for several reasons. Chefs like them because appetizers allow them to experiment with new recipes and

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ingredients without committing to a full-scale meal. Diners like them because they are smaller, cheaper, and can be shared much more easily.”

According an article in USA Today by Bruce Horovitz updated on 4/2/2010, “Some of the nation's most familiar casual-dining chains are suddenly thinking smaller. They're rolling out tapas-like small plates of shareable items that typically are cheaper than appetizers by a buck or two — or even three. With business still in the tank — and customers hard to lure out of the I-can-eat-cheaper-at-home mentality — a cadre of casual-dining icons, including Houlihan's, Cheesecake Factory, California Pizza Kitchen and BJ's Restaurants, are trying to boost business with value-priced items to be passed around the table.”12

Primary Research Plans

Speak with locals in the area to see what they think about our idea of treats at smaller portion sizes, what they’re looking for in a coffee shop, and how they feel about the message.

Set up booths at the San Clemente and neighboring cities’ farmers markets inviting customers to sample products from Morsels.

Put up flyers, coupons, and incentives at Saddleback College, on people’s cars around town, and mainly spread the word around local businesses.

Create nutrition classes and baking classes to put in the Community Recreation & Summer Class Opportunities Magazine.

Niche

Morsels is looking to marry two very successful eating experiences, tapas and café/bakery food. Today, more and more individuals are becoming health conscious but do not want to sacrifice fulfilling their need for a sweet treat. Morsels can provide a wholesome, healthy alternative to the refined white flour, white sugar, artificial everything many people eat to indulge their sweet tooth but without the guilt. How? By providing it in bite size portions! In addition, Morsels will offer a variety of savory fair and provide homemade bite size choices to those with special diets such as gluten free and vegan. By using mostly organic locally grown products, Morsels’ goal is to support the health and welfare of the entire community.

PRODUCTS AND SERVICES

Products

Morsels is a beach town café/bakery that sells moderately priced items in a casual dining environment. Morsels will feature a static menu focusing on hot/cold beverages (espresso, coffee and tea) and bite-sized savory breakfast, lunch and dessert items. Seasonal items will be cycled in with the seasons and holidays to accompany the static menu.

We will focus mainly on the breakfast, lunch and an early evening crowd and will have both dine-in and take-out options. Although not our focus, we will also offer bulk, pre-ordered options for large-scale needs.

Product Description

Morsel’s bakery menu will focus on bite-sized, mix and match options for the consumer who cannot make up their mind and appreciates options in their dining experience. Seasonal items will include baked goods with in-season fruits and vegetables and items traditionally paired with specific times of the year.

The beverage menu will offer an espresso bar with a wide variety of static and rotating options, a variety of hot and cold teas and a cooler of non-traditional carbonated choices. Morsels will focus on organic, sustainable and environmentally friendly options when choosing ingredients and suppliers.

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Future Products

Within 5 years, in order to expand our market and our customer base, Morsels plans on expanding operating hours to include small plate dinner options and alcoholic beverages. The dinner menu will include similar items as earlier in the day, but will be expanded and served in a dine-in, full-service experience. Future expansion efforts will also include full-service catering options for the Orange County area.

Production

All products will be prepared on premise on a daily basis, beginning in the early morning hours. Additional products will be prepared throughout the day as needed.

Pricing

Prices are based on cost. The selling price of each item reflects an approximate 20% cost and an approximate 80% mark-up. Our food and drink options are priced to give us a good return on sales, while still offering a great value to the consumer. Repeat business will be a key for success.

MARKETING AND ADVERTISING

Website – Morselsbakery@weebly.com This website will provide consumers with background information, the mission, and products available at Morsels. Each month this site will feature Morsels seasonal and holiday specialty items. Clients can utilize the site to make a bulk order for special occasions or holidays. As Morsels grows the site will add a place for customers to make reviews/comments, a list of upcoming events, and all the current Morsels news.

Events – Morsels will attend, co-sponsor, and host a booth at various annual events in San Clemente. We will align ourselves and become integrated in the community by attending some of the most important events in the area. By selling our baked goods at these local events we are able to reach new and foster existing relationships with clientele. Some of the most important events hosted in the surrounding community include Cinco de Mayo, San Clemente Ocean Festival, San Clemente Street Faire, Seafest, Puttin on the Glitz.

Print Ads – A medium sized print ad will be placed in the weekly papers of the local area. The ad will feature our seasonal offerings and a small discount coupon for bulk/catering orders. The papers Morsels will advertise in are San Clemente Times, Orange County Register, San Diego Reader, and the Los Angeles Times.

E-newsletter – Morsels will send out a seasonal newsletter advertising our newest items that will be featured during each season (Ex. Winter newsletter will feature our Christmas/Hanukkah themed offerings). This medium will provide the business a way of keeping the clientele interested in our product and the goal will be to influence repeat business. Customers can sign up in our shop or online to receive the e-newsletter.

Logo – Morsels has a distinct logo of the name with a small cupcake representing the “o” in the name, which will help to distinguish the product from our competitors. Our packaging, employee attire, additional marketing material and signage will all feature the logo.

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Press – Contact the local press for grand opening coverage. The goal of this is to get positive reviews and promote what sets Morsels apart from other bakeries in the Southern California region. Additionally, contact popular nutrition periodicals such as health magazines to make them aware of Morsels unique twist on having your cake and eating eat too.

LEGAL ISSUES

Morsels will legally be a Limited Liability Company (LLC) including Lorrie Kole, Allie Lawrence, Kylee Scholar, Jill McCleary, and Katie Egeland. This structure will allow us to be able to draw up agreement details for the five partners, including provisions for management, assignments of partner interests and distributions of profits and losses.

Morsels will obtain a General Business License for operation within San Clemente city limits and will renew the license every two years.

INITIAL AND ONGOING INVENTORY NEEDS AND POTENTIAL SUPPLIERS

Equipment

Morsels will be acquiring new equipment for production purposes. A list of large equipment items for Morsels can be found in Table 2.

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Table 2: Equipment for Morsels

Equipment Source CostSouthbend Convection Oven, Gas, double-deck, deep depth, solid state controls - BGS/22SC

www.wholesalerestaurant.com 13 $5600.00

Turbo Air Maximum Refrigerator, reach-in, 2 section, 49 cu. ft. - MSR-49NM

www.wholesalerestaurant.com $2836.15

Continental 3 Door Freezer - 3F www.wholesalerestaurant.com $4,489.09Turbo Air 4' Curved Glass Bakery Case(Dry) - TB-4

www.wholesalerestaurant.com $4,699.33

Hobart 30 qt mixer Model D300 www.wholesalerestaurant.com $3695.00Turbo Air (TSA-3-14-D1) - 90" Three-Compartment Sink

www.foodservicewarehouse.com 14

$593.60

Chicago metallic 18 gauge wire in rim sheet pans 18x26x1 – 24 pans

www.wholesalerestaurant.com $337.36

Chicago metallic mini muffin 2.1 oz. volume pans – 18 pans

www.wholesalerestaurant.com $689.58

Strong Primary Commercial Espresso Machine

www.espressonline.com 15 $4745.00

ATS Side Chair, wood back w/circle cutout, upholstered seat - 32

www.wholesalerestaurant.com $3036.80

ATS Pedestal Table, designed for indoor use, 27-1/2" dia. round top - 4

www.wholesalerestaurant.com $639.60

ATS Pedestal Table, designed for indoor use, 27-1/2" x 27-1/2" square top – 4

www.wholesalerestaurant.com $639.60

Emuamericas 116 Outdoor Ronda Metal Stacking Armchair, Mesh Seat/Back - 8

www.wholesalerestaurant.com $699.84

Emuamericas 802 outdoor/indoor Cambi Metal Table 36" Square, Mesh Top - 2

www.wholesalerestaurant.com $545.40

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Suppliers

In order to reduce our environmental footprint, Morsels will use the prime-vending method of purchasing and purchase nearly all supplies and ingredients from Sysco16 (S). Espresso, coffee, and tea will be purchased from Grounds for Change17 (GFC) and any vegetables/fruits used in baking will be purchased from J.R. Organics18 (JRO). See Table 3.

Table 3: Menu, Costs and Suppliers.

Menu Item Cost per Serving Price Per Serving Supplier

Espresso Drinks $0.70 $3.50 S, GFC

Coffee $0.35 $1.75 GFC

Tea $0.27 $1.35 GFC

Quiche $0.40 $2.00 S

Cupcakes $0.30 $1.50 S

Cookies $0.15 $0.75 S

Muffins $0.15 $1.50 S

ORGANIZATIONAL CHART

Organizational Chart

The five owners of Morsels will be dividing up responsibilities of the business. Each will have specific duties to fulfill their particular position, as well as general café responsibilities. Chart 1 outlines the job titles of each owner.

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Chart 1: Organizational Chart

I

Sales Associates

General Manager/Owner

Lorrie Kole

Accounting/HR Manager/Owner Allie Lawrence

Operations Manager/Owner

Jill McCleary

Marketing Manager/Owner

Kylee Scholar

Head Baker/Owner Katie Egeland

JOB DESCRIPTIONS

General Manager/Owner

Aside from managing the overall operation of the café/bakery, will exert commitment, discipline, and the ability to multi task. Will supervise to achieve operational excellence, will determine staffing needs of the operation to create a high performing team, lead the team to achieve goals and objectives according to company standards, and become a good example for leadership, performance, and excellence.

Main job tasks and responsibilities include:

Responsible for the overall performance of the café/bakery . Manage the daily output and display of bakery products. Focus on reducing costs, monitoring product quality and consistency, tracking inventory and oversee

the café/bakery’s budget. Process invoices, coordinating orders with outside vendors. Provide customer service

Requirements for the Marketing Manager position include:

Must have superior leadership skills, work well with a team and have the ability to work independently with little or no supervision.

Must have superior decision-making skills, problem-solving skills and conflict-management abilities. Must have a thorough knowledge of the company, its culture and its products and services. Must be able to work well with all levels of management and have superior training and delegation

abilities. Successful candidates should have a minimum of five years management experience and a bachelor’s

or Master’s Degree in a related field of study.

Head Baker

Main job tasks and responsibilities include:

The head baker is the first one in the shop to begin the baking process at 3 a.m. 13

She will do 50% of work by hand and the other 50% of work will be done by machinery at the café/bakery.

She is diligent about exact measurements and pays strict attention to timing and quantities being used. In accordance with this, she will be the one taking inventory daily on what has been used, is being used, and will be used.

She typically sets the quotas for how many particular items must be produced each day; along with which items will be seasonal, for holidays, and daily special treats.

The head baker will have mastered a number of tools to produce the most desirable products on the market.

She will know nutrition and health and keep appropriate serving sizes and ingredients to follow the mission of Morsels.

It is important that the head baker be creative, and to come up with original recipes and ideas for flavorful, unique, and comforting treats. Since sometimes the head baker will be working alone, it is important to be a self-motivator.

The head baker’s production duties after baking all morning are to help clean up and be a bright, cheery, personable face to the customers and public.

The head baker will be known by all guests and a friend to all customers.

Marketing Manager

The marketing manager will oversee all marketing, advertising, and promotion of goods and services and will establish marketing strategies to meet the needs of the café/bakery.

Duties will include:

Continuously evaluate the market conditions, customer demographics and competitors to ensure marketing plans are being changed and updated as needed.

Keep all owners abreast of marketing trends, needs and any changes in the market or industry, which are prevalent to the café/bakery and its interests.

Assist in baking, cleaning, selling products and all other aspects of production where needed.

Requirements for the Marketing Manager position include:

Graduation from an accredited 4-year university with a degree in Marketing or business and at least 5 years of marketing experience. Ten or more years of marketing experience with a minimum of 5 years of management may be substituted for a 4-year degree.

Experience with marketing a restaurant/café/bakery. Familiarity with the San Clemente/Orange County area

Accounting/Human Resources

As account manager, establish and maintain financials for the company by supervising the development and carrying out systems designed to collect, analyze, verify and report Morsels’ financial transactions. As human resources manager, oversee staffing and human relations programs, as well as managing any issues that may arise regarding human resources.

Main job tasks and responsibilities include:

Manage recruiting, selecting, orienting, training; communicate job expectations; enforcement of policies and procedures; administer employee benefits; oversee any employee issues that require legal clarification or action.

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Reach accounting objectives by compiling accounting information and provide recommendations for future business operations; create action plans; identify trends, necessary improvements, conduct audits, implement corrective actions and change.

Maintain confidentiality in human resources as well as in financial security through establishing proper controls.

Conduct educational programs to help staff and owners keep up to date on industry and company knowledge.

Operations Manager

The Operations Manager will be responsible for ensuring the effectiveness and efficiency of the daily operations of Morsels. The position will work closely with accounting, HR and all the managers in planning, directing, and coordinating of the cafes operations.

Reporting to the General Manager, the Operations Manager will make schedules, manage ordering, and help develop long-term strategies and other miscellaneous tasks.

Main Job Tasks and Responsibilities

Oversee staff scheduling needs and conflicts Create weekly staffing schedule Oversee operational systems, procedures and policies Set and maintain productivity and quality standards Schedule maintenance and upkeep of the facility Ensure food safety and quality of all products Oversee materials and supplies Oversee purchasing and ordering Ensure that accounting department requests are resolved and communicated in a timely manner Contribute to short and long term organizational planning and strategy Oversee organizational insurance policies Improve the effectiveness of support services Improve operational systems in support of the organizations mission

Requirements for the Marketing Manager position include:

College degree preferably in business administration, management or finance 3+ years related experience Strong background and work experience in finance Excellent communicative skills both verbal and written Excellent problem solving and organizational skills Strong computer skills Excellent interpersonal skills Excels at operating in a fast past environment Ability to delegate responsibilities effectively

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POLICIES

Hours of operationTuesday-Friday 6:30am – 7:00pmSaturday - Sunday 7:00am – 5:30pmClosed on Mondays

We will be closed on the following holidays: New Year’s Day Easter Thanksgiving Christmas

Refund/exchange policy

Morsels strives for greatness in each of our creations. In-store orders can be returned for a full refund or exchange for another item. For all pick-up items/orders, uneaten portions can be returned for a full refund or exchange for another item. For catering items, orders should be checked for accuracy prior to leaving store, once items have left the premise, Morsels should promptly be called and the concern should be explained, all uneaten items should then be returned for a partial or full refund, depending on the nature of the complaint.

Payment Policy

Morsel’s café/bakery offers the following options for our customers to make payment for their purchases:

Cash - morning cash drawer will have a $300 bank. The General Manager/Owner will tally receipts at the end of each business day. Cash will be stored in on site safe and bank deposits made every Friday, or as necessary.

Visa – minimum purchase $5.00 MasterCard – minimum purchase $5.00 American Express – minimum purchase $5.00 Discover – minimum purchase $5.00

Privacy of Customers Personal Information

Morsels will not share personal information with third parties. Morsels will not sell, trade, lease, or give personal information out to others. Personal information is used to identify or contact a specific individual such as a name, email address, or telephone number. No credit card information is stored on the Morsels website and credit card information that is given by phone or in person is destroyed immediately after approval and processing. At Morsels, we respect and are committed to protecting privacy of our customers.

Dining Room Dress Code

Patrons – Despite being located near the beach and Morsels laid back atmosphere our policy stands as “No shirt, No shoes, No service.”

Employee Dress Code

Shirts – Morsels will provide each of sales associates with a Morsels t-shirt. The shirts will be black with the logo on the front left corner and various Morsels quotes on the back. Theses shirts must be worn at all times while on the clock.

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Pants – Black pants will be worn by all sales associates and bakers, which he/she will need to provide for themselves. Pants are important for safety in the kitchen when working around hot ovens and baking areas.

Shoes – Shoes must be closed toed with a non-skid sole for safety. Morsels will allow him/her to choose their footwear and its color to allow for personal expression.

Chef’s jackets – Morsels will provide chef’s jackets with logos on the upper left corner for all of the baking staff and owners. These are to be worn whenever baking to protect the body when working with hot items.

Accessories – Earrings are permitted. Bangles, bracelets, and necklaces are prohibited to encourage uniformity and avoid safety mishaps with loose fitting jewelry.

Hair – Sales associates should have clean and presentable hair, which can be worn as desired. Bakers need to wear hairnets or hats when baking to ensure proper health standards in food production areas. Overall, hair needs to appear clean and groomed.

Other – Sales associates, bakers, and owners should display overall proper hygiene. Nails need to be cleaned and trimmed, false nails are prohibited. Please avoid excessive makeup, if there is any question about how much is too much please ask management for clarification. Avoid perfumes and other personal fragrance as some customers or your fellow staff member could be allergic.

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FINANCIAL PLAN

Startup Budget

Morsels’ silent investors will provide $30,000 in capital and we will borrow $55,000 in a long-term loan, which will cover our startup expenses. We will borrow $90,000 in a short-term loan to cover our expenses until the company becomes profitable. We will need to buy supplies, equipment, and initial inventory, provide a rent deposit including 1st months rent, pay utility deposits19, 22 and business permits and license fees.20 The average lease rate in our desired prime location ranges from $2.30-$4.30 per square foot per year, so we decided to take the mean of $3.30 per square foot to estimate our rent18. Figure 1 details Morsels’ startup expenses.21

Figure 1: Projected Start-Up Expenses

Plant a

nd equipmen

t

Office eq

uipment

Initial inve

ntory

Rent d

eposit

Utility dep

osits

Legal

expen

ses

$40,000

$1,000 $1,200 $6,600

$500 $900

Start-Up ExpensesTotal: $50,200

12-Month Projected Profit and Loss Projection

We expect to make a profit from sales in the ninth month of operation but do not project a profit for the first year of business (See Appendix B). We have projected our monthly expenses as follows:

Rent: $3300 Utilities $700 Insurance $200 Supplies $100 Telephone $100 Labor costs $9520

We will pay each owner $400 a week for the first year.23, 24We expect our monthly sales to increase each month and project $178,821 total sales for the 2013-2014 year. We have used growth factors for each item, which can be found in the Projected Monthly Unit Sales sheet (see appendix A). Figure 2 shows monthly losses and profits from sales for the first year of operations.

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Figure 2: Morsels’ Projected Profit and Losses from sales for 2013-2014

$(15,000.00)

$(10,000.00)

$(5,000.00)

$-

$5,000.00

$10,000.00

$15,000.00

Projected Profit and Losses 2013-2014

JuneJulyAugustSeptemberOctoberNovemberDecemberJanuaryFebruaryMarchAprilMay

Break Even Analysis

We have generated a report that helps show when we expect to receive a profit (See Appendix C). We produced an average cost per unit and unit sale price based on expected units sold during the first year of operation. We estimate our break-even point to be after selling 154,305 units according to our Break Even Analysis (See Appendix D), which we expect to be in our second year.

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APPENDIX A

12 Month Profit and LossesJu

ne

July

Aug

ust

Sept

embe

r

Oct

ober

Nov

embe

r

Dec

embe

r

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

2013

-201

4

Sales ($) 5,091 6,005 7,109 8,297 9,864 11,752 14,035 16,803 20,152 24,223 29,210 35,328 187,868Cost of salesMaterial ($) 1,018 1,201 1,422 1,659 1,973 2,350 2,807 3,361 4,030 4,845 5,842 7,066 $37,574Labor ($) 9,520 9,520 9,520 9,520 9,520 9,520 9,520 9,520 9,520 9,520 9,520 9,520 $114,240

Other ($) $0Total cost of sales 10,538 10,721 10,942 11,179 11,493 11,870 12,327 12,881 13,550 14,365 15,362 16,586 $151,814Gross profit ($) -5,447 -4,716 -3,833 -2,882 -1,629 -119 1,708 3,922 6,602 9,858 13,848 18,743 $36,055

Operating expenses ($)

Payroll ($) $0

Rent ($) 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 $39,600Utilities ($) 700 700 700 700 700 700 700 700 700 700 700 700 $8,400

Telephone ($) 100 100 100 100 100 100 100 100 100 100 100 100 $1,200Insurance ($) 200 200 200 200 200 200 200 200 200 200 200 200 $2,400

Supplies ($) 100 100 100 100 100 100 100 100 100 100 100 100 $1,200Depreciation ($) 128 128 128 128 128 128 128 128 128 128 128 128 $1,533

Amortization ($) 15 15 15 15 15 15 15 15 15 15 15 15 $180Total expenses ($) 4,543 4,543 4,543 4,543 4,543 4,543 4,543 4,543 4,543 4,543 4,543 4,543 $54,513Profit ($) -9,990 -9,259 -8,376 -7,425 -6,172 -4,662 -2,835 -621 2,059 5,315 9,305 14,200 ($18,459)

Interest exp. ST 600 600 600 600 600 600 600 600 600 600 600 600 $7,200Interest exp. LT 458 458 458 458 458 458 458 458 458 458 458 458 $5,500

Net profit ($) -11,048-10,317 -9,434 -8,483 -7,230 -5,720 -3,893 -1,679 1,001 4,257 8,247 13,141 ($31,159)

APPENDIX B

Gro

wth

Fa

ctor

June

July

Aug

ust

Sept

embe

r

Oct

ober

Nov

embe

r

Dec

embe

r

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

2013

Unit sales (units):Espresso drinks

15%360 415 480 520 600 690 795 915 1,050 1,200 1,380 1,590 9,995

Coffee25%

600 750 940 1,175 1,470 1,840 2,300 2,875 3,595 4,495 5,620 7,025 32,685

Tea10%

360 400 440 485 535 590 650 715 785 865 950 1,045 7,820

Quiche10%

300 330 365 400 440 485 535 590 650 715 785 865 6,460

Cupcakes15%

300 345 400 460 530 610 700 805 925 1,065 1,225 1,410 8,775

Cookies10%

360 400 440 485 535 590 650 715 785 865 950 1,045 7,820

Muffins25%

650 815 1,020 1,275 1,595 1,995 2,495 3,120 3,900 4,875 6,095 7,620 35,455Total Unit Sales 2,930 3,455 4,085 4,800 5,705 6,800 8,125 9,735 11,690 14,080 17,005 20,600 109,010

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APPENDIX C

Break-Even Analysis

Fixed Costs Variable CostRent $ 39,600 Items Cost

Staffing $ 114,240Baking Supplies $ 0.34

Utilities $ 8,400Telephone $ 1,200Insurance $ 2,400Office Supplies $ 1,200Deposits $ 3,800Equipment $ 40,000Inventory $ 1,200Permits $ 900Total $ 212,940

Unit Selling Price: $ 1.72

Expected Unit Sales: 187,868

Break-Even Units: 154,304

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APPENDIX D

Break Even AnalysisUnits Fixed Cost Variable Cost Total Cost Revenue Profit

50,000 $ 212,940 $ 17,000 $ 229,940 $ 86,000 $ (143,940) 60,000 $ 212,940 $ 20,400 $ 233,340 $ 103,200 $ (130,140) 70,000 $ 212,940 $ 23,800 $ 236,740 $ 120,400 $ (116,340) 80,000 $ 212,940 $ 27,200 $ 240,140 $ 137,600 $ (102,540) 90,000 $ 212,940 $ 30,600 $ 243,540 $ 154,800 $ (88,740) 100,000 $ 212,940 $ 34,000 $ 246,940 $ 172,000 $ (74,940) 110,000 $ 212,940 $ 37,400 $ 250,340 $ 189,200 $ (61,140) 120,000 $ 212,940 $ 40,800 $ 253,740 $ 206,400 $ (47,340) 130,000 $ 212,940 $ 44,200 $ 257,140 $ 223,600 $ (33,540) 140,000 $ 212,940 $ 47,600 $ 260,540 $ 240,800 $ (19,740) 150,000 $ 212,940 $ 51,000 $ 263,940 $ 258,000 $ (5,940) 160,000 $ 212,940 $ 54,400 $ 267,340 $ 275,200 $ 7,860 170,000 $ 212,940 $ 57,800 $ 270,740 $ 292,400 $ 21,660 180,000 $ 212,940 $ 61,200 $ 274,140 $ 309,600 $ 35,460 190,000 $ 212,940 $ 64,600 $ 277,540 $ 326,800 $ 49,260

200,000 $ 212,940 $ 68,000 $ 280,940 $ 344,000 $ 63,060

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Morsels FLOOR PLAN

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