Text Wizard Copywriting - business plans

Background

The Filling Station was a Leicester sandwich bar. The owners could fund the project themselves, but they still needed a convincing business plan to open an account with Lloyds Bank.

The Text Wizard wrote a short business plan for the Filling Station from data supplied by the proprietors.

An extract from the Text Wizard’s 15-page business plan follows. Text reproduced by kind permission of The Filling Station.

FINANCIAL PROJECTIONS
Sales Targets
	Our profit and loss projections have been based on sales of 500 sandwiches a day, five days a week, with additional sales of patisseries and hot and cold drinks. Saturday sales have been estimated at 50% of the average daily sale. Weekly sales have been multiplied across only fifty weeks in the year to take account of bank holidays. At 440 sandwiches a day (with additional sales reduced pro rata) we are at break-even point. 500 sandwiches seems a lot, but then Marks & Spencer put 2,000 a day in their sandwich displays. Boots account for a further 150 a day. There are numerous cob shops in Leicester, so the total market for sandwiches and/or rolls runs into several thousand a day. If we ignore the cob shops and assume that we are only in the smaller market for up-market sandwiches in the city centre, we are aiming for a 25% market share. This is not unreasonable if the quality, level, and speed of service is better than the chain stores can offer – although it may take time to build up sales. In our cash flow projections we have prudently assumed that it takes many months to establish a reputation, with sales building up slowly to 500 a day over eighteen months. Sales start at only 250 a day in the first month. We have studied other sandwich bars for clues to the volume that can be served. Outside of London, there is very little to compare with. Most are in poor locations with hardly any passing trade and are, for the most part, inefficiently run. A similar operation in Milton Keynes, known as Brunches, served 300 customers between 11.30 and 2.30 on the day we observed. Brunches has almost no passing trade and all customers make a special journey to the shop. We have not been convinced that customer counts at similar operations give any clue to those we might expect at Cheapside.
Profit and Loss Projections
	Many of the costs associated with 9 Cheapside, Leicester are already known to us because we have traded from the unit for seven years under a different fascia. Other costs associated with catering are generally based on quotes from suppliers. At 500 sandwiches a day with an average price of £1.60, we will turnover £320,000 net and make a net profit of £23,000 or 7.3%. The gross profit varies between different product groups and has been estimated in relation to actual food prices. [See Appendix III for profit and loss figures]
Cash Flow Projections
	Set-up costs for the project are now fairly well established. As mentioned above, we have been prudent about sales build up. During the first twelve months net income is only £250,000. The investment required is shown to be £77,000 which is entirely recouped within fifteen months. The investment covers equipment (£28,000), shop fitting (£45,000), and additional working capital and is mainly funded internally (£70,000) with the shortfall to be covered by other businesses cash flows or a medium-term business loan. At only 440 sandwiches a day, the required investment rises to £78,000 and declines more slowly, being recouped after nineteen months. At 600 sandwiches a day, the entire investment is recovered after twelve months. [See Appendix IV for cash flow projections]