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Table of Contents
Executive Summary ........................................................................................................................ 4
Company Description ..................................................................................................................... 6
Location .................................................................................................................................. 7
Business Concept .......................................................................................................................... 10
Concept Description and Statement ...................................................................................... 11
Design/Layouts ..................................................................................................................... 12
Management Team........................................................................................................................ 13
Owner(s) ............................................................................................................................... 13
Operator Paul Longorio ..................................................................................................... 13
Assistant Manager Virginia Johnson ................................................................................. 13
Management Agreements ..................................................................................................... 14
Competitive niche ................................................................................................................. 14
Market Analysis ........................................................................................................................ 15
Target Market........................................................................................................................ 16
Competition........................................................................................................................... 17
Marketing Strategy........................................................................................................................ 27
Overview ............................................................................................................................... 27
Customer Database ............................................................................................................... 27
Loyalty Programs .................................................................................................................. 27
Email Campaign.................................................................................................................... 28
Mailer campaign ................................................................................................................... 28
Giveaways and Raffles ......................................................................................................... 28
Competitions ......................................................................................................................... 28
Community ........................................................................................................................... 28
Advertising............................................................................................................................ 29
Public Relations .................................................................................................................... 29
Operations ................................................................................................................................. 30
Page 1 of 79
TableofContents
Overview ............................................................................................................................... 30
Staffing .................................................................................................................................. 30
Training ................................................................................................................................. 31
Daily Operations & Production ............................................................................................ 31
Customer Service .................................................................................................................. 33
Suppliers ............................................................................................................................... 33
Management Controls ........................................................................................................... 34
Administrative Systems ........................................................................................................ 36
Investment Analysis .................................................................................................................. 38
Financial projections ..................................................................................................................... 43
Project Sources & Uses of Cash ........................................................................................... 43
Weekly Sales Projection ....................................................................................................... 44
Detailed Equipment Schedule ............................................................................................... 45
Hourly Labor Projection ....................................................................................................... 46
Capital Budget (Start-up Cost Projections)........................................................................... 47
Detailed Statement of Income & Cash Flow Year 2012....................................................... 49
Summary Statements of Income & Cash Flow Years 2012 ................................................. 52
Operating Assumptions from 2013 to 2016 .......................................................................... 53
Summary Statements of Income & Cash Flow Years 2012-2016 ........................................ 54
Break-Even Cash Flow Projection ........................................................................................ 55
Capital Budgeting ......................................................................................................................... 57
Weighted Average Cost of Capital (WACC)........................................................................ 57
Net Present Value (NPV) ...................................................................................................... 59
Valuation ....................................................................................................................................... 60
Discounted Cash Flow Approach ......................................................................................... 60
Multiplier/ Industry comparative Approach ......................................................................... 61
Ratio Analysis ....................................................................................................................... 61
Conclusion .................................................................................................................................... 63
References ..................................................................................................................................... 65
Appendix ....................................................................................................................................... 67
Hillsborough County Property Appraiser database for the project site ................................ 67
Page 2 of 79
TableofContents
Census Bureau Demographics .............................................................................................. 71
Loan Amortiation Schedule .................................................................................................. 75
Menu Engineering Term Descriptions .................................................................................. 77
SBA 7(a) Loan Guaranty Submission Checklist .................................................................. 78
Page 3 of 79
ExecutiveSummary
Executive Summary
Frankies Pizzeria will be a moderately priced 50 seat Pizzeria offering hand-tossed New York
style pizza, in addition to serving beer and wine, which is a key component our management
team feels, will separate us from the competition. Strategically located in thriving South Tampa,
with late hours and delivery, Frankies will be the spot to go for late hour cravings. Frankies
Pizzeria will be owned by four financial investors and operated by General Manager Paul
Longorio.
Frankies will emulate the family owned Pizzas that are synonymous with the Northeast. In fact,
the signature crust and mouthwatering sauce featured at Frankies are from family recipes that
have been passed down from generation to generation. Background music consisting of popular
Italian tunes while the dcor for Frankies Pizzeria will feature wood accented construction
adorned with paintings and props blended with an Italian theme decor. Diner style tables will be
surrounded by heavy wooden chairs and accompanied by leather-covered booths.
The General Manager, Mr. Longorio, has a proven track record of successful restaurant
management over the past twelve years. That coupled with the extensive research and strategy
development for this restaurant, Frankies Pizzeria is poised for success.
Intense market research and target market evaluation suggest that Frankies Pizzeria is ideally
situated to cater to an unfulfilled market segment. Moreover, years of operational and marketing
experience have been organized and documented to create a comprehensive blueprint for
success. Proven marketing techniques and operational systems will allow management to be
proactive rather than reactive to the conditions and obstacles associated with opening a new
restaurant concept.
Having a sound operational plan allows management to focus on building sales rather than
profit. The managing partners have an extremely high degree of confidence that the systems and
controls incorporated in the business plan will yield a calculated return for a given sales volume.
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ExecutiveSummary
Sales projections for Frankies Pizzeria assume a modest weekly sales projection of just under
$18,000, or $930,000 per year. This equates to around $621 per sq. ft. in sales annually which
positions Frankies Pizzeria as a highly desirable concept for ownership in a table service market
where $400 to $500 per sq. ft. is considered moderately profitable and therefore a good
investment. Expectations are that Frankies Pizzeria will yield a net cash flow of between 13.5%
- 14.5% of sales, after debt payment, during the first five years of operation.
Total capitalization will amount to $521,766, $150,000 of which will be contributed from the
owner and the balance secured through a proposed bank loan.
In closing, we feel the business plan for Frankies Pizzeria represents a realistic expectation of
success for all parties involved. Moreover, we will be providing a benefit to the community by
providing a great product and securing jobs to community residents.
Page 5 of 79
CompanyDescription
Company Description
Frankies Pizzeria is an Italian Pizzeria with a unique twist. Located in vibrant, social South
Tampa, Frankies Pizza aims to deliver high quality pizza while offering a variety of beer and
wine our customers can enjoy. The addition of beer and wine to a quick service restaurant aims
to cater to our target market, younger, partygoers looking for the late night meal after a steady
night of partying. The additional amenities Frankies Pizzeria plans to offer include direct TV
sports package LCD televisions through the cafe to suit the daytime sports fanatic crowd. This
will complement Frankies offering of draft beers nicely and aim to keep a steady customer flow
during non-peak hours. In addition to the marketing mix of offering alcohol and sports, Frankies
will incorporate customer involvement and reward strategies such as contests, games and triva.
Finally, to top off the fun associated at Frankies, customer appreciation and loyalty programs
will be utilized to produce what we like to call "Frankies Fusion."
Furthermore, the best part about Frankies, is the team, which is comprised of very intelligent
and diversified individuals who have a passion for people and food. Frankies team is also much
diversified in the sense of the assets of the team member involved in brining Frankies restaurant
to life. Within Frankies organization, accounting, advertising, finance, engineering and
marketing are just some of the expertise you will find in addition to the most important aspect of
this venture, ambitious and intelligent aspiring entrepreneurs who are hungry for the "big break."
Company Strategy: Frankies Pizzerias main objective is to provide its distinctive nitch as the
only pizzeria open past 4-am in the Soho distract are, providing delicious warm meals for hungry
night owls. We believe nobody should be left hungry, left to limited franchise brands that are
open past 3am. We also provide beer and wine with our high quality pizza menu. Frankies
Pizzeria believes by delivering first service and value to our customers, we can satisfy more
customers and potentially expand to further markets in the near future, and continue to grow and
provide meals to more customers in other locations.
Our mission at Frankies Pizzeria is to give our consumers, a quick delicious, mouthwatering
meal with a brand specific taste, leaving our consumers coming back for more. We cook our
Page 6 of 79
CompanyDescription
pizzas from the best recipes, conducted with a lot of research, roaming Italy to find what people
desire the most. Not only do we plan to have the best tasting pizza in town, but we are all about
connecting with our customers like family. Customer service is our priority. Our mission is to
give our customers quick, rich service in a comfortable and modern stylish environment setting.
Our final mission is to leave customers relating to our pizza joint, as the place to be with the
friendliest environment.
Location
Page 7 of 79
CompanyDescription
Page 8 of 79
CompanyDescription
Page 9 of 79
CompanyDescription
BusinessConcept
Our business concept was inspired by our target audience, young men and women, who go to the
hot spot, Soho to have a good night out. Soho is the night life of Tampa, and many hotdog stands
wait near this area to provide people with food. When the night life closes in Tampa at 3am,
Frankies is still open where our hungry target audience can come have a high quality, delicious
meal. There night out does not stop there, at our modern, restaurant, becoming the place to be
after a fun night out. Our target audience was one of the reasons we devoted Frankies, we also
felt the need to provide people with a delicious pizza they can only get Frankies.
Our business Concept was also developed around quick service, of course with high quality
tasting food. Quick service concept provides our customer with an easy transaction of parking,
ordering, and enjoying their meal. We also have a walk up window; customers can come to order
food they want to take out. We developed our concept based on the smooth flow of ordering
food, preparation, and service we provide. We believe based on our model, we can obtain lower
training and labor costs, and increased efficiency. We also believe we should always enquire
about our food, and focus on the quality not quantity of our pizza, providing great customer
satisfaction.
Our main focus is our menu. We designed our menu to appeal to many of our clients. Thats why
we developed two ways of making our pizza. The original Thin Crust, and the Italian, which is
thicker crust. Frankies believes focusing on more than one type of crust create a better brand
identity to our customers, providing them with options and verity. We would also include
standard toppings, and unique toppings clients request. We want to include our customers in our
restaurant, so whenever a member comes up with a delicious pizza they developed adding unique
toppings; we add the pizza to our menu and name it after the creator. Ofcourse, the pizza has to
be top quality! Our hand-made dough would be made fresh daily in the restaurants kitchen. Our
dough is never frozen.
Our family- oriented restaurant, with a modem unique environment, which includes a bar table
placed outside, providing beer and wine, will make our location a fun, up lifted environment.
Occasionally Frankies will offer pizza's on a limited promotional bases when it comes to
Page 10 of 79
CompanyDescription
seasons. We also developed a nutllea pizza for desert for our chocolate lovers, which we will
provide all year.
Once our business devlopes traffic and there becomes a demand for our pizza. We plan to
include delivery to our services as another business concept.
ConceptDescriptionandStatement
Frankies Pizzeria will be family owned restaurant setting, where the restaurant provides high
quality and authentic pizza. Frankies will provide customers with the option of dine-in-buffet,
and carryout, with the hopes of further adding catering and delivery to our services in the near
future. Our pizza restaurant would provide pizza to the surrounding neighborhoods and business.
The pizza recipes are recipes that we have discovered in Italy from a family that has been passed
down their pizza recipe from generation to generation, and wants to share their wonderful
delicious pizza for the community to enjoy! However, the secret will always remain ours in what
makes our pizza so unique and delicious from the others.
Customers will have the opportunity to enjoy Frankies Pizza in the fun modern, environment in
which its places or they can enjoy their meal as a take away option in their own home or
business. Italian music and the friendly staff at our restaurant will play its try part on creating an
Italian, modern environment. Sample menu is shown in the weekly sales report.
The restaurant will have about 10 tables, consisting of 35-40 seats. The majority of the seats will
be placed inside the facility, with three tables outside, for members who want to enjoy the
beautiful weather! Frankies would also provide 6 bar stools outside for members to eat and
enjoy a cold beverage. Frankies will require a minimum of 15-20 parking spaces, provided in
the back of the restaurant to meet the demand of anticipated customer traffic.
Frankies Pizzeria will be open 7 days a week; the expected hours of operations are as follows:
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CompanyDescription
Design/Layouts
The final design of the layout may be subject to change upon completion.
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CompanyDescription
ManagementTeam
Owner(s)
Andrew Alt
25%
Joe Constantino
25%
Prashant Kuranjekar
25%
Ronya Al Salem
25%
OperatorPaulLongorio
Paul Longorio is a seasoned veteran in the restaurant industry; with 12 years of experience, he is
a great candidate and well suited to manage the Frankies Pizzeria team. His most recent
employment has been with the California Pizza Kitchen (CPK) where he has thrived as both a
General Manager and District manager for the last 5 years. During his tenure as District Manager
for CPK, Mr. Longorio twice achieved the distinction for highest gross profit margin for regional
units having greater than $2,000,000 in annual sales.
His previous employment includes management positions with McDonalds and various front and
back of the house positions with several independent restaurants.
Mr. Longorio is a graduate of the University of Houston with a bachelors degree in Foodservice
Management. He was born in Trenton, New Jersey and has recently located to Arlington, VA.
AssistantManagerVirginiaJohnson
Virginia Johnson has worked for Pizza Hut restaurants for the last 3 years as both an hourly
employee and a manager. Her training during this tenure uniquely qualifies her as a management
candidate for Frankies.
Ms. Johnson has also worked as a waitress, hostess and counter server for several restaurants
while attending college at Wharton Junior College where she took business courses that helped
her to prepare for management.
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CompanyDescription
ManagementAgreements
A Management Agreement will be executed between the company and the General Manager.
The purpose of these agreements is to define the expectations of both parties, establish an
incentive structure, and define the grounds under which the agreement may be terminated.
A sample agreement can be found in the Appendices section.
Competitiveniche
Our company niche is providing our customers with a bar, and modern environment, where they
can enjoy a great meal in a fun atmosphere. We also plan to stay open past 3am, providing meals
for our customers, when most pizza franchises and local pizza restaurants are closed.
Page 14 of 79
MarketAnalysis
Market Analysis
Our primary target market is marketed to customers who want to have a delicious pizza, with a
refreshing beverage at our modern, family-oriented restaurant, where they can dine in and watch
a game and socialize. Our secondary target market segments customers who had a late night out
and is looking for a great meal open at late hours. They can either dine in or come to the
restaurant and order pick up, so they can take our pizza home.
Population of Tampa, Florida
The population of Hillsborough County in July 2009 was 343,890, which is a 13.3% increase
since 2000. 48.8% are males, while 51.2% are females. The estimated median household income
in 2009 was $41,605, which holds the majority as middle class. Tampa has the highest age group
of 25-39 year olds in which Frankies Pizzeria would target too.
segmented population of Hillsborough country lives in a single unite, thus giving us reason to
believe more consumers will want the quick meal, since they are single and on the go.
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MarketAnalysis
TargetMarket
Target Audience
Frankies Pizzeria restaurant will be located near Howard Tampa. The exact locations zip code is
33602.Bases on research which states 25-34 years is the majority age group for that area, we
base our target audience as Primary Men and Women 18-34 years old, and Secondary for
families.
Our target audience would be described as:
Consumers looking for a great tasting pizza they can only get at a family chain such as
Frankies Pizzeria
Consumers who enjoy pizza and fine beer and wine while watching sports and
socializing.
Page 16 of 79
MarketAnalysis
Competition
There is minimal competition with Frankies Pizzeria, in regards to our competitive edge.
The primary competitor that possess the most threat is
Deck Pizza and Pub
Deck Pizza and Pub is located at 2202 W. Platt St. Tampa Florida. Deck Pizza and pub provides
beer and wine also. They have salads, subs and wraps, pizzas, and more. Deck Pizza and pub
also provides delivery. The company has lacked customer service in the past and had a new
management team reopen the business September 17th, 2006.
Deck Pizza and Pub operations are: Tue, 4pm - 10pm; Wed, 4pm - 11pm; Thu, 4pm - 1am;
Fri, Sat, noon - 3am; Sun, 4pm - 10pm (3pm - 10pm during football season); Mon, Closed. They
are our biggest competitor in the sense that they are targeting the same consumers; however, we
are confident we will obtain most of consumers, in our new, modern facility.
Page 17 of 79
MarketAnalysis
Competitor Review
Day of Week:
Monday-Sat.
Meal
Number of Seats: Indoor : 9 tables, with 27 seats with an additional 6 seats at the bar. Total of 33 seats
Outdoor: 14 tables with about 40 seats.
Sales Volume : Annual revenue of less than 500,000, with staff of 1-4.
much better
Rating
Location convenience
better location.
2.8
Parking accessibility
Overall atmosphere
Noise level
Seating comfort
2.5
1
not as good
Comments
Page 18 of 79
MarketAnalysis
Maintenance of interior
Restaurant cleanliness
Restroom cleanliness
2.9
Friendly employees
2.9
Responsive service
2.9
Promotional activities
Menu variety
2.5
Taste/flavor of appetizers
Taste/flavor of desserts
Signature/unique items
Portion sizes
Food freshness
# 8
Salads
# 6
from $3.75
to $6.95
Sandwiches
#9
from $6.95
to $8.95
Side dishes
# 0
Entres
# 18
from $4.95
to $18.50
Desserts
#1
from $3.75
from $3.50
to $12.95
to $3.50
Page 19 of 79
MarketAnalysis
Coffee drinks
# 0
from $
to $
Specialty beverages
# 9
from $4.00
to $22.00
Implimenting specials
2.
3.
Additional comments/explanations:
Deck Pizza and Pub is our main competitor within location and aspect, however, after carefully
analyzing their business we believe Frankies Pizzeria will obtain more traffic with more hours
of operation, being closer to our target audience, and proving a more modern, clean environment.
We also want to focus on our pizza and provide the best tasting pizza in town; therefore we are
only making pizza, just like how five guys only makes burgers and is known for the best burgers
in town!
Source:http://www.manta.com/c/mt9592z/deck-pizza-pub
Other competitors around zip code 33606 are:
Gourmet Pizza Company
The gourmet Pizza Company is located at 610S. Armenia Ave. Tampa, FL 33609. They have
been operated since 199, as a family run business from the finest local ingredients to create their
pizzas. Their menus consist of sticks and flatbreads, salads, specialty pizza's, vegetarian pizzas,
pastas, calzones, and sweets. Gourmet Pizza Company also does large party orders and catering.
They also provide dine in, pick up, and delivery. There hours of operation are from 11am-10pm
(7 days a week )The Gourmet Pizza Company has had a lot of press attention, As they have
appeared on daytime, metro mix review and article march 2010. Also, In February 2006,
Gourmet Pizza Company was featured in southwest Airlines Spirit Magazine.
Page 20 of 79
MarketAnalysis
Competitor Review
Competitors Name: Gourmet Pizza Company
much better
Rating
Location convenience
better location.
2.9
Parking accessibility
2.9
Overall atmosphere
Noise level
Seating comfort
2.9
1
not as good
Comments
Page 21 of 79
MarketAnalysis
Maintenance of interior
Restaurant cleanliness
Restroom cleanliness
2.9
Friendly employees
2.9
Responsive service
2.9
Promotional activities
Menu variety
2.5
Taste/flavor of appetizers
Taste/flavor of desserts
Signature/unique items
Portion sizes
Food freshness
2.9
# 8
Salads
#5
Sandwiches
#0
Side dishes
Entres
from $4.75
to $11.95
from $3.55
to $5.95
#4
# 18
from $7.95
from $8.95
to $11.95
to $12.95
Desserts
#5
from $0.99
to $4.50
Coffee drinks
#0
Page 22 of 79
MarketAnalysis
Specialty beverages
#0
2.
3.
Additional comments/explanations:
86% of consumers like this restaurant, they are in the lead over consumers in regard to traffic
where about 76% of consumers liked Deck Pizza.
Source:http://www.manta.com/c/mt9592z/deck-pizza-pub)
Sally O Neils Pizza Hotline
Sally of Neils Pizza Hotline is located on 1319 South Howard Ave. Tampa Fl, 33629. The
restaurant is family owned and the business has been operating since 1985. There menu includes
Pizza, Calzone, Pasta, Pizza bread sticks, salad, beer and wine, and desserts. They also have
delivery and pick up available for their customers. Their hours of operation are: Sun-Wed 11am
10pm; Thu-Sat 11am11pm
Competitor Review
Competitors Name: Sally O Neils Pizza Hotline Reviewer: Frankies Pizzeria
Page 23 of 79
MarketAnalysis
Location: 1319 South Howard Ave. Tampa Fl, 33629
3.5
2.9
1
Rating
Location convenience
better location.
2.9
Parking accessibility
2.9
Overall atmosphere
Noise level
Seating comfort
2.9
Maintenance of interior
2.9
Restaurant cleanliness
2.9
Restroom cleanliness
2.9
Friendly employees
2.9
Responsive service
2.9
2.9
Promotional activities
Menu variety
Comments
Page 24 of 79
MarketAnalysis
Variety of healthy options
Taste/flavor of appetizers
2.9
2.9
2.9
Taste/flavor of desserts
2.9
Signature/unique items
2.9
Portion sizes
2.9
Food freshness
2.9
2.9
2.9
# 1
from $4.95
to $4.95
Salads
#5
from $6.30
to $7.45
Sandwiches
#0
Side dishes
#1
from $4.95
to $4.95
Entres
# 32
from $7.95
to $23.85
Desserts
#6
from $3.50
to $4.95
Coffee drinks
#0
Specialty beverages
2.
3.
Additional comments/explanations:
Page 25 of 79
MarketAnalysis
Makes the most revenue and has been in business more than 26 years, much longer than the life
expectancy of a restaurant which is 4-6 years. (Source:http://www.manta.com/c/mt9592z/deckpizza-pub)
Page 26 of 79
MarketingStrategy
Marketing Strategy
Overview
Our restaurant will use a combination of excellent food, service, and atmosphere to provide
customers the most complete dining experience possible. To increase exposure and bring
customers inside we will employ a number of proactive marketing strategies. These strategies
will include customer databases, loyalty programs, mailer and email campaigns, giveaways,
competitions, raffles, community involvement, advertising, and public relations initiatives. We
will strive to constantly be giving the consumer a reason for our restaurant to be on the tip of
their consciousness. The preceding tactics will now be explained in further detail.
CustomerDatabase
All information received from patrons of our restaurant will be entered into a database that will
be procured for this purpose. All customers will be notified that their information is completely
confidential and will never be transferred or sold to third parties. The information will record
their participation in promotional programs, events, and loyalty programs. This database will
also be used to inform them of upcoming events and promotions. The database will also keep
track of their progress towards promotional items such as free drinks, meals, etc. Lastly, the
database will keep track of special events in the life of the customer such as birthdays and
anniversaries. The database will then prompt the staff in order to accommodate the consumer
accordingly.
LoyaltyPrograms
An initiative to reward repeat diners will be the purpose behind our restaurants frequent patron
card. The consumers purchases and totals will be kept in a database, and will work them toward
free items. The free items will be based on amount of money spent, as well as times visited. Free
items will range from a drink, to a meal, to a tee shirt, to a big screen television or a cruise.
These programs will be flexible and management can change prizes as they see fit to capitalize
on trends.
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MarketingStrategy
EmailCampaign
An email campaign will be ongoing in concert with our customer database upon request from the
individual customer. Email will only be made with customers permission, and information will
never be shared with third parties. Emails will be sent out intermittently, only with special deals
or events associated with their content.
Mailercampaign
Our restaurant will capitalize on its immediate area using a direct mail campaign to residential
and commercial addresses within 10 miles of our location. The contents of this correspondence
will include information about promotions, events, and catering deals. Special attention will be
paid to addresses which are not yet in the customer database.
GiveawaysandRaffles
Giveaways and raffles will give our customers an opportunity to receive prizes in order to use
positive reinforcement to cement their relationship with the restaurant. Giveaways will be
advertised in mail and email in order to bring consumers in during non peak hours. Raffles will
be held during events and the prizes will be larger in scale. Raffle tickets will be sold at the door
and by individual waiters.
Competitions
Competitions will be held intermittently, with prizes for the winners such as tee shirts and free
meals. Competitions will include eating contests, trivia, etc. Guests will be able to compete or eat
their dinner undisturbed at their own discretion. Participation will be encouraged by staff
members to try to foster a friendly atmosphere.
Community
Initiative to reach the community will be employed such as sponsoring youth sports teams in the
area. Also, groups, clubs, and organizations in the area will be contacted in order to create
relationships and special deals will be presented to them for their proposed use of our facility.
Page 28 of 79
MarketingStrategy
Advertising
Limited advertising will be used by our restaurant to keep costs at a low level. Newspaper
advertising, signs, and local cable television advertising will be evaluated to see if it is cost
effective for our purposes.
PublicRelations
The manager of the restaurant will be charged with the responsibility of conveying a positive
image of the restaurant to our customers and the community as a whole. Charitable events could
garner positive press and notoriety within the community. Also, the manager should strongly
encourage columnists and food critics to come in, try the restaurant, and write their opinions in
their respective publications.
Page 29 of 79
Operations
Operations
Overview
The day to day operations of Frankies Pizzeria will be carried out accordingly with
managements
establishment
of
sound
operating
guidelines.
Frankies
will
use
Page 30 of 79
Operations
Position
General Manager
Assistant Manager
Pizza Cooks
Prep Cooks
Counter Help
Delivery Drivers
Staffing Summary
Full Time Qty Part Time Qty
1
1
3
2
1
2
2
2
5
Pay Range
$40,000/yr (potential for equity)
$32,000/yr
$7-$10/hr
$6-$8/hr
$7-$8/hr
$4.50/hr + Tips
Training
Management will provide and conduct a thorough training program for every position in the
restaurant. The training materials and personal instruction will also be provided to the highly
qualified employees. They will learn the Frankies Pizzeria method of how to operate a
successful restaurant. Training manuals and materials will be subject to revision edits to reflect
the unique requirements of Frankies Pizzeria. Newly hired personnel will be instructed in
customer service, safety, and health laws in addition to the job functions of their respective
positions, up to date training materials and manuals will be provided as well.
DailyOperations&Production
Frankies Pizzeria will be opened 7 days a week for lunch and dinner necessitating multiple
shifts. Scheduling will be conducted by the assistant manager and posted every two weeks. The
schedules will be written in such a manner that allows management to increase or decrease
hourly labor according to sales volume in order to maintain a consistent labor cost control.
The menu has been created in a manner to allow the preparation of many recipe ingredients to be
done ahead of time. Proper labeling and rotation techniques, accompanied by ample storage
facilities will ensure that the high quality prepared product will be sufficiently available and
tastefully satisfying to meet the demands during peak business hours. Replenishment and
ongoing preparation will continue during off peak business hours.
Management will be responsible for ordering, receiving and maintaining sufficient inventory to
meet production demands. Ordering schedules will be staggered with perishable products being
ordered multiple times per week to preserve freshness. Standard grocery and supply orders will
be ordered less often, according to a predetermined schedule and storage capacity.
Page 31 of 79
Operations
Management will adopt the use of operational checklists to verify that each work shift has been
properly prepared for and to insure the operational standards are followed before, during and
after work shifts.
The counter service style of Frankies Pizzeria easily accommodates both takeout and dine-in.
The modest size of the dining room will create a cozy atmosphere for guests while maintaining
the simplicity of the counter service style of service. The restaurant layout, including the dining
room, kitchen and serving line, has been designed for efficiency and flexibility to accommodate
the fluctuation in customer traffic and peak meal periods. Additionally, phone orders will be
accepted for both delivery and pickup orders.
The production of our menu for walk-in guests begins with a friendly greeting by the order taker
at the service counter. Designated order takers will also be assigned to handle phone orders. All
orders will be entered into the POS system, designated as either dine-in, takeout, or delivery, and
then printed at the pizza prep station. Each order will be assigned an order number and tracked
through the POS system. Guests will pay immediately upon ordering except for phone orders, in
which case the order will be paid at the time of order pickup. Orders will remain open until
payment has been received and recorded.
The pizza maker will begin the preparation process by assembling the pizza and sandwich items
and then passing to the pizza station for cooking. The pizza station attendant will be responsible
for cooking and packaging the finished product, and then placing the order in the pass thru
pickup window. A counter server will separate delivery and takeout orders, and place them in the
appropriate holding cabinets until delivery the delivery driver has been dispatched or the guest
arrives for pickup.
Dine-in orders will be assembled on a service tray and the guest will be notified when their order
is ready. Constant monitoring of the table by all staff will ensure that dirty dishes are cleared
promptly and drinks refilled regularly. Once the guest has left the table, the service staff will
immediately clean the table and prepare it for the next seating.
The kitchen preparation line has been designed to be operated by a minimum staff of 1 and a
maximum of 2 cooks. This design allows line staffing to be adjusted to the business volume.
Page 32 of 79
Operations
Shift changes for all staff will entail cleanup, restocking and preparation. All monies will be
settled at the end of each shift. The closing shift will involve designated closing duties that will
leave the restaurant clean and fully prepared for the next day opening crew.
CustomerService
Customer service at Frankies Pizzeria will be given special emphasis throughout the operation.
Customer surveys estimate that only 1 in 20 customers that have a problem in a restaurant will
tell management about it. It will be our goal to provide a product in a manner that exemplifies
highly responsive and proactive customer service.
Training programs will include specific material to teach our employees about service attitudes,
customer perception and how to deal with guest complaints. Management will conduct periodic
staff meetings intended to review policy, increase guest satisfaction and to keep a general line of
communication between staff and management.
All guest complaints will be empathetically acknowledged by the staff and immediately referred
to management. Programs will be in place to systematically deal with various types of guest
complaints. More serious complaints will be documented and kept on file.
Customer feedback will be accomplished by customer surveys or the use of mystery shoppers.
There is potential for great customer feedback by incorporating customer loyalty or other
benefits to reward the customer for providing an honest feedback of their dining experience.
Suppliers
Management will establish relationships with qualified suppliers (vendors) that can provide
reasonably priced product and deliver according to the schedule that benefits the restaurant.
Alternate suppliers will be identified for use if the regular supplier cannot deliver the products
needed or in case the demand exceeds the supplier at potential peak cycles. The following table
illustrates the suppliers we plan on doing business with:
Page 33 of 79
Operations
Product
Grocery, supplies
Pizza Supplies
Beverage
Alarm Monitoring
Pest Control
Grocery, supplies
Supplier Summary
Main Supplier
Terms
U.S. Food Service
15 days
Little Italy Pizza Distribution 7 day
Coca-Cola Bottling
COD
ADT
Net 30
Rollins
Net 30
Ben E. Keith
15 days
Alternate Supplier
Ben E. Keith
Restaurant Service, Inc.
N/A
Integrated Pest Control
Sysco Food Service
ManagementControls
Management will practice sound management procedures in order to control costs, insure quality
of product and provide friendly customer service. The following systems will be used by
management:
POSSystem
Careful evaluation and dutiful research will be used in the selection of a POS (point of sale)
system that best meets the needs of Frankies Pizzeria. The POS system will be configured with
requisition printing, a process which forces food and beverage items to be registered in the
system before the items can be prepared. Requisition printing has proven to reduce costs by as
much as 3-5%. The POS system will also be the control center to regulate the flow of service and
item preparation. Built-in cash controls will help in tracking sales and receipts.
Time&AttendanceSystem
The restaurant will use an automated time and attendance system. Management will evaluate
systems that are integrated into the POS system as well as standalone time clock systems. Hourly
labor cost control and the ability to transfer information to our payroll processing will be key
factors in system selection.
SchedulingSystem
Management will adopt a scheduling system that expedites the preparation of schedules, reflects
anticipated labor budgets, and helps to regulate labor cost.
Page 34 of 79
Operations
OperationsChecklists
The restaurant will be managed with the use of various checklists. Consistent use of checklists
will help to maintain quality control while ensuring that established procedures are followed.
Checklists will be used by various personnel for customer service, purchasing, receiving and
storage, preparation, cleaning, shift changes, opening and closings.
OrderGuide
The restaurant will use an item specific order guide to track order history and maintain
designated levels of product in inventory.
WeeklyInventory
Management will conduct a weekly inventory to determine valuation for use in the preparation of
weekly profit and loss reports.
DailyInventoryTracking
Daily inventory will be taken on specific items. Movement will be compared to sales data to
ensure designated products have been properly accounted for.
CashAudits
Management will conduct periodic cash audits for all cashier stations. Surprise shift audits are an
effective tool to determine cashier/bartender under ringing.
VideoSurveillance
Video surveillance will be in place to monitor activities and deter crime.
SafetyReviews
Periodic safety assessments will be performed to ensure that employees and guests are not
exposed to dangerous or harmful conditions or actions.
LiabilityReviews
Periodic assessments will also be done to evaluate the liability exposure of the restaurant.
Alcohol awareness, employee relations and guest treatment will be scrutinized from time to time.
Page 35 of 79
Operations
AdministrativeSystems
DailyCashControl
Sales and receipts recorded by the POS system will be compared to actual cash and credit card
deposits on a daily basis. Acceptable over/short amounts will be limited to $5.00 per day.
Discrepancies greater than $5.00 will prompt management to conduct an immediate audit to
account for the difference. Monthly totals will be compared to actual P&L statements for
accuracy.
Cash, debit card and credit card receipts will be deposited in a deposit account that is kept
separate from the general operating account. Transfers to the general operating account will be
made as necessary. Separation of the two accounts is intended to aid in account reconciliation
and cash flow management.
WeeklyPrimeCostReport
The manager will prepare a weekly report that shows the gross profit margin after cost of goods
sold and labor cost has been deducted from the sales revenue. The prime cost for this type of
restaurant is expected to range from 60% to 65%. Proper control of the prime cost is the single
most effective measure of managements ability to operate the restaurant. Weekly monitoring
allows for quick reaction to adverse cost ratios.
PurchasingRecords/Payables
A part time bookkeeper will process and record invoices and credits daily. Reports detailing cash
expenditures, payments by check, and accounts payable transactions will be readily available.
Check disbursements will be prepared by the bookkeeper. Check signing authority for the
general operating account will be the sole duty of the owner.
AccountingSystem/Service
The owner will be responsible for the timely preparation of monthly financial statements,
including monthly Profit & Loss and Balance sheet. To accomplish this task Frankies Pizzeria
will employ a bookkeeping service or CPA.
Page 36 of 79
Operations
PayrollProcessing
Payroll checks will be issued bi-weekly. The assistant manager will run reports from the time &
attendance system, make necessary adjustments, and prepare for transfer to the payroll system.
Payroll will be processed by a payroll processing service.
Page 37 of 79
InvestmentAnalysis
Investment Analysis
Businesses in general have a number of ways to obtain financing of their new ventures. Many
factors affect which of these options suits the new business the best. These factors include the
economic climate, the type of new venture, the management, and market segment growth
prospects just to name a few. We will first outline the available routes of financing for a
restaurant venture, then propose a specific plan identified as the most likely and beneficial for the
long term prospects of the business. Our business being a restaurant will most likely predispose
us to using certain options more than others. It is our job to look at both the positives and
negatives of every option in order to produce a plan that will give our restaurant the greatest
chance for profitability and success.
The first two ways for our new venture to obtain financing are the most simple, personal
investment for equity and/or angel investors. A personal investment adding equity to the firm
would entail the founders investing their own money to cover expenses and sustain the firm until
the point where the venture becomes profitable. This would be an attractive option if possible,
but for this exercise we will assume this is not possible due to insufficient funds. Angel investors
would include investors of an informal nature who would invest in the business for either a
percentage of equity or interest paid on their loan. These angels could be high net worth
individuals, entrepreneurs with prior experience, or even family and friends of the founders. This
option is attractive, especially if the angel investor has experience progressing start up
restaurants, as their knowledge and experience could be just as crucial as the capital. Angel
Investors may be hard to come by, but networking to be referred by other angels is most likely
the quickest way to be accepted as a possible investment. Either of these options may be best
suited because of the relatively small scale of the new venture and correlating investment that
would be required. Obtaining the right angel investor would likely turn out to be the difficult
part, as an investor who could add value to the venture other than capital could make the
difference between success and failure.
Usually when starting a small business and the first two options have failed, most entrepreneurs
would turn to commercial banks in order to secure a small business loan. Historically this would
Page 38 of 79
InvestmentAnalysis
be a good route to get a small business the capital it needs, but as most of us know the economic
environment is not what it used to be. Loans are much harder to come by, and even then the
interest rates do not make them particularly attractive. Banks are currently trying to protect
themselves from making unfavorable loans, even at the expense of the entrepreneur. If a small
business loan was somehow obtained, the management and owners of our new venture would be
observed by the bank and would most likely have to make certain concessions in order to lower
their risk. The truth of the matter is that with the failure rates of the restaurant industry being
extremely high it is unlikely that a bank would be willing to take on such a loan. This option of
funding may have been more attractive in previous years when the economic climate was more
favorable. While it is worthwhile to gauge interest and compile information from commercial
banks on their interest levels this option should not be counted on as a serious contender to
provide financing for the new restaurant venture.
Yet another option to obtain financing would be to seek out venture capitalist firms to invest.
Venture Capitalist firms are organized businesses who seek to invest in companies that desire
investment to be used as capital. Venture Capital firms are not created equally, and their
preferences for what type of company they invest in are far ranging. That being said, they do
mainly prefer investments with both a need for a relatively large investment and the possibility
for a high return. Due to the fact that we are opening a single bar and grille, this may simply be
too small of an investment opportunity for virtually all of venture capitalists. There are also other
restrictions, such as location. Venture capitalists prefer to invest in businesses within their own
geographic location. This lowers the number of potential venture capitalists to only the
population of Tampa, Florida and its surrounding area. Again, research and due diligence should
be performed to gauge interest of venture capitalist firms in the area; however their participation
should not be expected.
Lesser known options to obtain funding would include grants from the government and also
special loan programs specifically meant to aid small businesses. While a grant is unlikely
because of the nature of our venture, a special loan program could prove beneficial. Wide arrays
of programs exist for entrepreneurs and should be explored thoroughly. These mainly
government programs can give preferential loan terms to entrepreneurs, especially if you happen
to be preferential for any reason such as being a minority. These loans need to be taken seriously,
Page 39 of 79
InvestmentAnalysis
as default will come with stern consequences. One organization that must be contacted for
information is the SBA, or the Small Business Administration. The SBA will even aid you in
obtaining a loan from your local commercial bank. They can do this by partially guaranteeing
your loan. The resources and advice one can acquire from the SBA and administrations like it
can make all the difference in a start-up. This route should be looked into because of the
advantages it brings with not only financing, but with knowledge to add value to the venture.
The options for financing a new venture seem plentiful, but the truth of the matter is that actually
obtaining the capital is a difficult and time consuming process. For our venture type, it seems
that the logical options include founders own investment, family and friends, angel investors, or
help from special programs. For ease of acquisition and time restraints they should perhaps be
researched in the preceding order. The high propensity for failure in the restaurant industry and
the lack of a perceived home run opportunity means larger venture capital firms are not likely to
invest. Whatever the route to financing, legal counsel must be contacted to draft a comprehensive
agreement between the parties. Care must be taken to safeguard all involved no matter the
contingency that occurs.
First course of business will be to obtain all capital possible from the founders, family, friends,
and any angel investors that can be contacted in the immediate area. In the likely event that this
does not fully suffice, the founders will visit a commercial bank that participates with the Small
Business Administration. The commercial bank will assist in satisfying the requirements to apply
for a basic 7(a) loan from the SBA. Loan requirements are stringent and paperwork could take
time, so procrastination will be avoided. The requirements include the SBA 4 form application,
personal background, personal financial statement, business financial statement, projected
financial statements, business license, loan application history, business income tax return,
personal tax return, resumes, business overview, and a business lease. In the event the SBA loan
is not possible, attempts will be made to obtain a loan from the commercial bank, contact will be
made to venture capitalists in the immediate area, and finally credit cards will be used in
moderation if all other courses of action have been exhausted.
Page 40 of 79
InvestmentAnalysis
Page 41 of 79
InvestmentAnalysis
Page 42 of 79
FinancialProjections
Financial projections
ProjectSources&UsesofCash
SOURCES OF CASH:
Equity Contributions
Loan Financing
$ 150,000
371,766
521,766
521,766
USES OF CASH:
Land & Building
Leasehold Improvements
Bar / Kitchen Equipment
Bar / Dining Room Furniture
Professional Services
Organizational & Development
Interior Finishes & Equipment
Exterior Finishes & Equipment
Pre-Opening Expenses
Working Capital & Contingency
246,900
0
51,666
12,500
12,500
17,500
30,000
23,500
62,200
65,000
Page 43 of 79
FinancialProjections
WeeklySalesProjection
Weekly Sales Projection with Menu
A
Menu Item Name
B
Number
Sold
C
D
Popularity Item Food
%
Cost
195
9.5%
$4.25
November 1, 2011
Period Covered:
1 Week
E
Item Sell
Price
F
Item
Profit
(E-D)
G
Total
Cost
(D*B)
H
Total
Revenue
(E*B)
L
Total
Profit
(H-G)
P
Profit
Category
$9.50
$5.25
$828.75
$1,852.50
$1,023.75
High
ENTREES
1 Topping Pizza
Date Prepared:
R
S
Popularity
Menu
Category Item Class
High
Star
Domestic Beer
451
22.0%
$1.25
$2.75
$1.50
$563.75
$1,240.25
$676.50
Low
High
Workhorse
International Beer
286
13.9%
$2.25
$4.25
$2.00
$643.50
$1,215.50
$572.00
Low
High
Workhorse
Grilled Salmon
90
4.4%
$7.50
$13.95
$6.45
$675.00
$1,255.50
$580.50
High
Low
Challenge
75
3.7%
$8.25
$14.95
$6.70
$618.75
$1,121.25
$502.50
High
Low
Challenge
Baked Tilapia
65
3.2%
$5.50
$9.95
$4.45
$357.50
$646.75
$289.25
High
Low
Challenge
270
13.2%
$5.00
$9.95
$4.95
$1,350.00
$2,686.50
$1,336.50
High
High
Star
Marinated Chicken
165
8.0%
$5.75
$8.95
$3.20
$948.75
$1,476.75
$528.00
Low
High
Workhorse
T-Bone Steaks
105
5.1%
$9.95
$15.95
$6.00
$1,044.75
$1,674.75
$630.00
High
Low
Challenge
90
4.4%
$8.50
$12.95
$4.45
$765.00
$1,165.50
$400.50
High
Low
Challenge
125
135
6.1%
6.6%
$9.00
$7.95
$14.95
$11.95
$5.95
$4.00
$1,125.00
$1,073.25
$1,868.75
$1,613.25
$743.75
$540.00
High
High
Low
Low
Challenge
Challenge
$9,994.00
$17,817.25
$7,823.25
N
Total
2052
100.0%
K=I/J
O=M/N
56.1%
Food Cost %
$3.81
Ave Gross Profit
FinancialProjections
$926,465
$77,205
$113
$18,529
DetailedEquipmentSchedule
Sr. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Quantity Description
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
1
1
3
1
1
4
1
1
3
1
1
1
1
1
Estimated price in $
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2,769
1,800
5,500
450
500
285
2,822
167
457
400
900
385
5,468
2,737
300
150
11,000
3,000
4,912
1,800
675
1,500
226
565
1,630
150
90
100
54
874
51,666
Page 45 of 79
FinancialProjections
HourlyLaborProjection
- EARLY (breakfast & lunch) 7:00AM - 3:00PM
Covers
Total Restaurant Sales
Position
Rate
Prep Cooks
$ 6.00
Fry Cooks
$ 7.50
Grill Cooks
$ 7.50
Counter
$ 7.50
Counter Cashier
$ 6.50
Drive-Thru Cashier
$ 7.50
Other
$ 0.00
Other
$ 0.00
Other
$ 0.00
Labor Cost Per Shift - $
Labor Cost Per Shift - %
Monday
252
$1,159
Hours
#
6.0
1
4.0
1
8.0
1
4.0
1
8.0
1
6.0
1
0.0
0
0.0
0
0.0
0
$253
21.8%
Tuesday
273
$1,272
Hours
#
6.0
1
4.0
1
8.0
1
4.0
1
8.0
1
6.0
1
0.0
0
0.0
0
0.0
0
$253
19.9%
Wednesday
283
$1,327
Hours
#
6.0
4.0
8.0
8.0
8.0
8.0
0.0
0.0
0.0
$298
22.5%
Tuesday
135
$791
Hours
#
0.0
0
0.0
0
8.0
1
0.0
0
7.0
1
4.0
1
0.0
0
0.0
0
0.0
0
$136
17.1%
Wednesday
135
$791
Hours
#
0.0
0.0
8.0
0.0
7.0
4.0
0.0
0.0
0.0
$136
17.1%
1
1
1
1
1
1
0
0
0
Thursday
315
$1,471
Hours
#
6.0
1
4.0
1
8.0
1
4.0
1
8.0
1
8.0
1
0.0
0
0.0
0
0.0
0
$268
18.2%
Friday
324
$1,499
Hours
#
6.0
1
6.0
1
8.0
1
8.0
1
8.0
1
8.0
1
0.0
0
0.0
0
0.0
0
$313
20.9%
Saturday
366
$1,672
Hours
#
6.0
1
6.0
1
8.0
1
8.0
1
8.0
1
8.0
1
0.0
0
0.0
0
0.0
0
$313
18.7%
Sunday
391
$1,798
Hours
#
6.0
6.0
8.0
8.0
8.0
8.0
0.0
0.0
0.0
$313
17.4%
Thursday
158
$923
Hours
#
0.0
0
4.0
1
8.0
1
0.0
0
7.0
1
4.0
1
0.0
0
0.0
0
0.0
0
$166
17.9%
Friday
923
$1,199
Hours
#
0.0
0
4.0
1
8.0
1
4.0
1
7.0
1
6.0
1
0.0
0
0.0
0
0.0
0
$211
17.6%
Saturday
228
$1,331
Hours
#
0.0
0
4.0
1
8.0
1
4.0
1
7.0
1
6.0
1
0.0
0
0.0
0
0.0
0
$211
15.8%
Sunday
195
$1,145
Hours
#
0.0
4.0
8.0
4.0
7.0
6.0
0.0
0.0
0.0
$211
18.4%
$434
18.1%
$524
19.4%
$524
17.4%
1
1
1
1
1
1
0
0
0
WEEK
2,204
$10,197
Labor $
$252
$255
$420
$330
$364
$390
$0
$0
$0
$2,011
19.7%
- PM SHIFT -
0
0
1
0
1
1
0
0
0
0
1
1
1
1
1
0
0
0
WEEK
1,891
$6,869
Labor $
$0
$120
$420
$90
$319
$255
$0
$0
$0
$1,204
17.5%
$389
21.0%
$389
18.8%
$434
20.5%
$3,215
18.8%
$524
17.8%
5.0
$30
$150
$3,365
Page 46 of 79
FinancialProjections
CapitalBudget(StartupCostProjections)
ITEMS
LAND & BUILDING
Land
Building - Construction / Contractor Fees
LEASEHOLD IMPROVEMENTS
Construction Contract
Landlord Contribution
TOTAL COST
Detail
246,900
96,900
150,000
0
0
0
KITCHEN EQUIPMENT
51,666
12,500
PROFESSIONAL SERVICES
Architect & Engineering
Legal (lease & incorporation)
Project Consultant
Accounting & Tax
Name, Logo & Graphic Design
12,500
17,500
30,000
2,000
2,500
2,000
5,000
1,000
2,000
3,000
750
1,500
1,000
2,000
750
1,500
3,000
2,000
2,500
4,000
2,500
1,500
7,500
2,500
1,500
500
1,500
4,000
Page 47 of 79
FinancialProjections
Equipment
Other
2,000
23,500
PRE-OPENING EXPENSES
Construction Period Utilities
Construction Period Building Lease
Construction Period Interest
Uniforms
Opening Inventories Food & Beverage
Paper
Retail Merchandise
Other Restaurant
Supplies
Marketing Advertising
Public Relations
Opening Parties
Personnel General Manager
Assistant Manager(s)
Hourly Employees
Payroll Taxes &
Employee Beneifts
62,200
65,000
3,500
7,500
8,000
2,000
1,500
1,000
2,500
0
2,000
1,200
5,000
2,000
0
4,000
7,500
10,000
7,000
5,000
4,000
6,000
6,000
25,000
40,000
$ 521,766
$64
$10,435
Page 48 of 79
FinancialProjections
DetailedStatementofIncome&CashFlowYear2012
ITEMS
Sales:
Food & Beverage
TOTAL SALES
MONTHLY AVE
ANNUAL
$ 77,205
77,205
100.0%
100.0%
$ 926,465
926,465
100.0%
100.0%
Cost of Sales:
Food & Beverage
Paper
TOTAL COST OF SALES
20,073
2,702
22,776
26.0%
3.5%
29.5%
240,881
32,426
273,307
26.0%
3.5%
29.5%
Gross Profit
54,430
70.5%
653,157
70.5%
Payroll:
Salaries & Wages Management
Hourly Employees
Total Salaries & Wages
6,917
14,580
21,496
9.0%
18.9%
27.8%
83,000
174,954
257,954
9.0%
18.9%
27.8%
2,322
860
750
325
4,256
3.0%
1.1%
1.0%
0.4%
5.5%
27,859
10,318
9,000
3,900
51,077
3.0%
1.1%
1.0%
0.4%
5.5%
TOTAL PAYROLL
25,753
33.4%
309,031
33.4%
PRIME COST
48,528
62.9%
582,338
62.9%
0
200
300
300
250
150
100
300
250
200
2,050
0.0%
0.3%
0.4%
0.4%
0.3%
0.2%
0.1%
0.4%
0.3%
0.3%
2.7%
0
2,400
3,600
3,600
3,000
1,800
1,200
3,600
3,000
2,400
24,600
0.0%
0.3%
0.4%
0.4%
0.3%
0.2%
0.1%
0.4%
0.3%
0.3%
2.7%
Page 49 of 79
FinancialProjections
Musak & Sound System
Other
Total Music & Entertainment
250
0.3%
0
0.0%
250
0.3%
0.3%
3,000
0.0%
0
3,000
0.3%
1,000
250
250
0
1,500
1.3%
0.3%
0.3%
0.0%
1.9%
12,000
3,000
3,000
0
18,000
1.3%
0.3%
0.3%
0.0%
1.9%
Utilities Electrical
Gas
Water
Trash Removal
Total Utilities
1,200
400
350
200
2,150
1.6%
0.5%
0.5%
0.3%
2.8%
14,400
4,800
4,200
2,400
25,800
1.6%
0.5%
0.5%
0.3%
2.8%
500
50
300
50
579
150
200
100
150
25
300
0
500
200
3,104
0.6%
0.1%
0.4%
0.1%
0.8%
0.2%
0.3%
0.1%
0.2%
0.0%
0.4%
0.0%
0.6%
0.3%
4.0%
6,000
600
3,600
600
6,948
1,800
2,400
1,200
1,800
300
3,600
0
6,000
2,400
37,248
0.6%
0.1%
0.4%
0.1%
0.8%
0.2%
0.3%
0.1%
0.2%
0.0%
0.4%
0.0%
0.6%
0.3%
4.0%
300
0.4%
250
0.3%
250
0.3%
800
1.0%
CONTROLLABLE PROFIT
Occupancy Costs & Depreciation
Occupancy Costs Rent & Common Area Maintenance
Percentage Rent
Common Area Maintenance (CAM)
Equipment Rental
3,600
0.4%
3,000
0.3%
3,000
0.3%
9,600
1.0%
18,823
24.4%
225,878
24.4%
2,500
0
250
0
3.2%
0.0%
0.3%
0.0%
30,000
0
3,000
0
3.2%
0.0%
0.3%
0.0%
Page 50 of 79
FinancialProjections
700
200
900
300
4,850
0.9%
0.3%
1.2%
0.4%
6.3%
8,400
2,400
10,800
3,600
58,200
0.9%
0.3%
1.2%
0.4%
6.3%
316
166
1,091
1,137
2,710
0.4%
0.2%
1.4%
1.5%
3.5%
3,797
1,987
13,095
13,640
32,520
0.4%
0.2%
1.4%
1.5%
3.5%
7,560
9.8%
90,720
9.8%
(100)
(50)
(50)
2,402
200
2,402
(0.1%)
(0.1%)
(0.1%)
3.1%
0.3%
3.1%
$ 8,861
11.5%
(1,200)
(0.1%)
(600)
(0.1%)
(600)
(0.1%)
28,827
3.1%
2,400
0.3%
28,827
3.1%
$ 106,331
11.5%
2,710
3.5%
32,520
3.5%
(2,108)
(32.8%)
(25,300)
(2.7%)
$ 9,463
12.3%
$ 113,551
12.3%
Page 51 of 79
FinancialProjections
SummaryStatementsofIncome&CashFlowYears2012
ITEMS
Sales:
Food & Beverage
TOTAL SALES
MONTHLY AVE
ANNUAL
$ 77,205
77,205
100.0%
100.0%
$ 926,465
926,465
100.0%
100.0%
Cost of Sales:
Food & Beverage
Paper
TOTAL COST OF SALES
20,073
2,702
22,776
26.0%
3.5%
29.5%
240,881
32,426
273,307
26.0%
3.5%
29.5%
Gross Profit
54,430
70.5%
653,157
70.5%
Payroll:
Salaries & Wages
Employee Benefits
TOTAL PAYROLL
21,496
4,256
25,753
27.8%
5.5%
33.4%
257,954
51,077
309,031
27.8%
5.5%
33.4%
PRIME COST
48,528
62.9%
582,338
62.9%
2,050
250
1,500
2,150
3,104
800
9,854
2.7%
0.3%
1.9%
2.8%
4.0%
1.0%
12.8%
24,600
3,000
18,000
25,800
37,248
9,600
118,248
2.7%
0.3%
1.9%
2.8%
4.0%
1.0%
12.8%
18,823
24.4%
225,878
24.4%
4,850
2,710
6.3%
3.5%
58,200
32,520
6.3%
3.5%
(200)
2,402
200
(0.3%)
3.1%
0.3%
(2,400)
28,827
2,400
(0.3%)
3.1%
0.3%
$ 8,861
11.5%
$ 106,331
11.5%
2,710
3.5%
32,520
3.5%
Page 52 of 79
FinancialProjections
DEDUCT:
Loan Principal Payments
CASH FLOW BEFORE INCOME TAXES
(2,108)
(2.7%)
(25,300)
(2.7%)
$ 9,463
12.3%
$ 113,551
12.3%
OperatingAssumptionsfrom2013to2016
DESCRIPTION
Sales - % Increase Over Prior Year
Food & Beverage
Cost of Sales - Cost as a % of Sales
Food & Beverage
Paper
Salaries & Wages - % Increase over Prior Year
Salaries & Wages
Employee Benefits
Other Expenses - % Increase over Prior Year
Direct Operating Expenses
Music & Entertainment
Marketing
Utilities
General & Administrative Expenses
Repairs & Maintenance
Occupancy Costs
PROJECTING YEARS
2013
4.0%
2014
4.0%
2015
4.0%
2016
4.0%
32.0%
3.5%
32.0%
3.5%
32.0%
3.5%
32.0%
3.5%
4.0%
4.0%
4.0%
4.0%
4.0%
4.0%
4.0%
4.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
2.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
2.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
2.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
2.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
Page 53 of 79
FinancialProjections
SummaryStatementsofIncome&CashFlowYears20122016
DESCRIPTION
2012
2013
2014
2015
2016
Sales:
Food & Beverage
TOTAL SALES
$ 926,465
926,465
100.0%
100.0%
$ 963,523
963,523
100.0%
100.0%
$ 1,002,064
1,002,064
100.0%
100.0%
$ 1,042,147
1,042,147
100.0%
100.0%
$ 1,083,832
1,083,832
100.0%
100.0%
240,881
32,426
273,307
26.0%
3.5%
29.5%
308,327
33,723
342,051
32.0%
3.5%
35.5%
320,660
35,072
355,733
32.0%
3.5%
35.5%
333,487
36,475
369,962
32.0%
3.5%
35.5%
346,826
37,934
384,761
32.0%
3.5%
35.5%
653,157
70.5%
621,472
64.5%
646,331
64.5%
672,185
64.5%
699,072
64.5%
257,954
51,077
309,031
27.8%
5.5%
33.4%
268,272
53,120
321,392
27.8%
5.5%
33.4%
279,003
55,245
334,248
27.8%
5.5%
33.4%
290,163
57,455
347,618
27.8%
5.5%
33.4%
301,770
59,753
361,523
27.8%
5.5%
33.4%
PRIME COST
582,338
Cost of Sales:
Food & Beverage
Paper
TOTAL COST OF SALES
Gross Profit
Payroll:
62.9%
663,443
68.9%
689,981
68.9%
717,580
68.9%
746,283
68.9%
CONTROLLABLE PROFIT
24,600
3,000
18,000
25,800
37,248
9,600
118,248
2.7%
0.3%
1.9%
2.8%
4.0%
1.0%
12.8%
25,338
3,090
18,540
26,574
38,366
9,888
121,796
2.6%
0.3%
1.9%
2.8%
4.0%
1.0%
12.6%
26,098
3,183
19,096
27,371
39,517
10,185
125,450
2.6%
0.3%
1.9%
2.7%
3.9%
1.0%
12.5%
26,881
3,278
19,669
28,192
40,702
10,490
129,213
2.6%
0.3%
1.9%
2.7%
3.9%
1.0%
12.4%
27,688
3,377
20,259
29,038
41,923
10,805
133,090
2.6%
0.3%
1.9%
2.7%
3.9%
1.0%
12.3%
225,878
24.4%
178,284
18.5%
186,633
18.6%
195,353
18.7%
204,459
18.9%
58,200
32,520
6.3%
3.5%
59,364
32,520
6.2%
3.4%
60,551
32,520
6.0%
3.2%
61,762
32,520
5.9%
3.1%
62,998
32,520
5.8%
3.0%
(2,400)
28,827
2,400
(0.3%)
3.1%
0.3%
(2,472)
26,727
2,472
(0.3%)
2.8%
0.3%
(2,546)
24,453
2,546
(0.3%)
2.4%
0.3%
(2,623)
21,990
2,623
(0.3%)
2.1%
0.3%
(2,701)
19,323
2,701
(0.2%)
1.8%
0.2%
$ 106,331
$ 74,432
11.5%
70%
$ 59,673
$ 41,771
6.2%
70%
$ 69,109
$ 48,376
6.9%
70%
$ 79,081
$ 55,357
7.6%
70%
$ 89,619
$ 62,733
8.3%
70%
ADD BACK:
Depreciation & Amortization
DEDUCT:
Loan Principal Payments
32,520
3.5%
32,520
3.4%
32,520
3.2%
32,520
3.1%
32,520
3.0%
(25,300)
(2.7%)
(27,399)
(2.8%)
(29,674)
(3.0%)
(32,136)
(3.1%)
(34,804)
(3.2%)
$ 81,652
8.8%
$ 46,892
4.9%
$ 51,223
5.1%
$ 55,740
5.3%
$ 60,450
5.6%
Page 54 of 79
FinancialProjections
BreakEvenCashFlowProjection
DESCRIPTION
MONTHLY
ANNUAL
Sales:
Food & Beverage
TOTAL SALES
$ 62,807
62,807
100.0%
100.0%
$ 753,682
753,682
100.0%
100.0%
16,330
2,198
18,528
26.0%
3.5%
29.5%
195,957
26,379
222,336
26.0%
3.5%
29.5%
44,279
70.5%
531,346
70.5%
20,816
4,156
24,972
33.1%
6.6%
39.8%
249,797
49,870
299,667
33.1%
6.6%
39.8%
43,500
69.3%
522,003
69.3%
2,050
250
1,500
2,150
2,996
800
9,746
3.3%
0.4%
2.4%
3.4%
4.8%
1.3%
15.5%
24,600
3,000
18,000
25,800
35,953
9,600
116,953
3.3%
0.4%
2.4%
3.4%
4.8%
1.3%
15.5%
9,561
15.2%
114,727
15.2%
4,850
2,710
7.7%
4.3%
58,200
32,520
7.7%
4.3%
0
2,402
200
0.0%
3.8%
0.3%
0
28,827
2,400
0.0%
3.8%
0.3%
Cost of Sales:
Food & Beverage
Paper
TOTAL COST OF SALES
Gross Profit
Payroll:
Salaries & Wages
Employee Benefits
TOTAL PAYROLL
PRIME COST
Other Controllable Expenses:
Direct Operating Expenses
Music & Entertainment
Marketing
Utilities
General & Administrative Expenses
Repairs & Maintenance
TOTAL OTHER CONTROLLABLE EXP.
CONTROLLABLE PROFIT
Occupancy Costs & Depreciation
Occupancy Costs
Depreciation & Amortization
($602)
(1.0% )
($7,220) (1.0% )
ADD BACK:
Depreciation & Amortization
DEDUCT:
Loan Principal Payments
2,710
4.3%
32,520
4.3%
(2,108)
(3.4%)
(25,300)
(3.4%)
($0)
(0.0% )
$ 0
0.0%
BREAK-EVEN SALES
Week
$14,494
Month
$62,807
$753,682
Year
Page 55 of 79
FinancialProjections
Fixed Costs
Annual
Variable Costs
Cost of Sales
Hourly Labor
Employee Benefits
Credit Card Expense
Monthly
83,000 $
6,917
75% $
131,216 $
10,935
44,604 $
3,717
24,600 $
2,050
3,000 $
250
18,000 $
1,500
25,800 $
2,150
30,300 $
2,525
9,600 $
800
58,200 $
4,850
28,827 $
2,402
2,400 $
200
$
$
25,300 $
484,846 $
2,108
40,404
% of Sales
Break-even Sales $
29.5% $
18,528
4.7% $
2,965
0.7% $
439
0.8% $
35.7% $
471
22,403
Annual
Monthly
Annual
Monthly
753,682 $
62,807 $
Weekly
14,494
Page 56 of 79
CapitalBudgeting
Capital Budgeting
WeightedAverageCostofCapital(WACC)
The first step to valuating the recommendations is to determine the weighted average cost of
capital (WACC). This measures the overall return a firm is required to earn on its existing assets
and business operations in order to increase or maintain the current value of the current stock.
The WACC is defined as the average of the costs of debt/equity, each of which is weighted by its
respective use in the given situation. This shows how much interest the company has to pay for
every dollar it finances.
The formula used to calculate the WACC was:
WACC = WdKd (1 Tc) + WeKe
Where:
Wd = D/V = percentage of financing that is debt We = E/V = percentage of financing that is
equity Kd = cost of debt Ke = cost of equity Tc = corporate tax rate of 35% E = market value of
the firm's equity D = market value of the firm's debt V = E + D
The cost of debt (Kd) is a ratio of interest expense to total debt, which was calculated at 5.94%.
For the cost of equity (Ke), we used the formula:
Ke = rf + (rm - rf)
Where:
= beta
rf = risk-free rate
rm = expected market return
Page 57 of 79
CapitalBudgeting
Name of the company
Beta
0.69
0.44
0.58
1.00
0.98
1.00
1.35
0.86
Betas available for publically traded companies can be used in WACC calculations. The beta
used in our analysis is simply the beta of Industry average, which is 0.86.
re
8.37%
rf
B
=
=
1.92%
0.86
rm
9.40%
For the risk-free rate, we used the current rate for a ten-year treasury bond at constant maturity,
which is commonly used. The current risk-free rate at the time of this analysis is 1.92%.
The expected market return is just the historical return of the stock market, which has increased
by 9.40% over the past 52 weeks on the S&P500. Thus, the cost of equity is calculated at 8.37%.
Thus, Wd was 71% and We was 29%. The corporate tax rate is 30%.
WACC
WACC
WACC
=
=
%Debt(Wd) x
71%
Kd
12.99%
x
x
1tc
%Equity(We)
70.0%
29%
Ke
8.37%
8.89%
Based on these calculated values, the weighted average cost of capital came out to be 8.89%,
which seems quite reasonable.
Page 58 of 79
CapitalBudgeting
NetPresentValue(NPV)
Once the WACC was calculated at 8.89%, it will then be used to determine the Net Present
Value (NPV) of each recommendation. Using this required rate of return for opportunities such
as our recommendations is common practice. NPV measures the profitability of an investment by
taking the sum of the present value of all future cash flows and subtracting out the upfront cost.
This is represented by the formula below:
Where
r = WACC
Ct = cash flow
C0 = upfront investment cost.
Page 59 of 79
Valuation
Valuation
DiscountedCashFlowApproach
The valuation method used in this analysis involves the discounting of future free cash flows for
the firm, including terminal value. Free cash flow is calculated by taking the sum of the cash
from operating and investing activities. This is an indication of the amount of cash that the
company has left over after all expenses and investments have been paid. Using the previously
determined WACC and an estimated growth rate, valuation is calculated as follows:
The time period for this valuation begins in Jan 2012. Since this analysis ends in 5 years i.e
2016, the terminal value is added and assumes that the firm will grow at a constant and stable 2%
forever. This valuation indicates that the company has the ability to grow in the future. Frankies
Pizerria is the private company so the liquidity discount is considered to calculate the value of
the firm.
8.89%
2%
WACC
g
Liquidity
Discount
15%
ValueoftheFirm
Year
Cash Flow
2012
$
81,652
2013
$
46,892
2014
$
51,223
2015
$
55,740
2016
$
60,450
Terminal value
$
895,374
Value of the Firm @ the end of 2011
Value of the Firm after Liquidity Discount
Present Value
$
$
$
$
$
$
$
$
74,988
39,550
39,677
39,653
39,494
584,975
818,337
695,586
Page 60 of 79
Valuation
Multiplier/IndustrycomparativeApproach
The below mentioned ratios have been obtained to get the industry average. The average value of
the firm calculated by Multiplier approach is 1.6M after the liquidity discount which is much
higher than the firm value calculated by discounted cash flow approach.
Earnings
Sales
Book Value
P/E (ttm,
EPS
intraday)
P/S (ttm)
P/B (mrq)
21.12
18.14
18.59
26.74
20.60
52.56
27.22
26.42
1.50
5.10
1.95
0.17
0.00
6.42
1.52
2.38
1.20
3.62
0.78
0.80
0.59
4.79
2.67
2.06
P/CF
Market Cap
OCF (B)
(B)
(ttm)
5
(intraday)
6.38
4.20
5.88
0.96
10.33
7.10
5.81
1.93
95.47
0.92
0.04
2.04
10.56
30.89
20.26
Cash Flow
P/CF
0.12
0.09
0.00
0.26
0.38
1.46
0.39
15.69
9.83
21.14
7.97
27.50
21.16
17.22
Profitability
Enterprise Enterprise Profit
Operating
Value/Reve Value/EBIT Margin Margin
3
6
(ttm)
(ttm)
DA (ttm)
nue (ttm)
2.06
4.00
0.81
0.80
0.82
4.58
2.55
2.23
Multiplier
Unit
Earning
Sales
Cash Flow
Enterprise Value/Revenue (ttm)3
Enterprise Value/EBITDA (ttm)6
12.01 5.82%
11.20 20.34%
8.05 4.33%
9.58 3.15%
8.13 -0.05%
24.05 9.46%
14.39 10.14%
12.49
7.60%
Management Effectiveness
Return on
Return on
Assets (ttm) Equity (ttm)
15.17%
30.49%
7.16%
6.33%
5.40%
15.64%
12.97%
13.31%
Industry/Comparative
Value
Average
26.42
2.064
17.215
2.23
12.49
$ 106,331
$ 926,465
$ 81,652
926464.5
106330.86
33.54%
13.25%
17.47%
2.42%
17.73%
14.03%
16.41%
Value of the
firm
2,809,717
1,912,487
1,405,640
2,067,339
1,327,769
Current
Ratio
(mrq)
1.97
-
25.32%
27.76%
-0.28%
23.17%
29.67%
21.13%
0.97
1.79
1.80
0.71
1.93
1.53
Value of the
Firm after
Liquidity
Discount
$
$
$
$
$
2,388,260
1,625,614
1,194,794
1,757,238
1,128,603
RatioAnalysis
The Profit margin of the firm will grow from 4.3% to 5.8% till 2016. The industry average profit
margin is 7.6%. The firm has the potential growth of profit margin as compared to industrial
Page 61 of 79
Valuation
average. The operating Margin of the firm ranges from 9% to 10.1%, which is lower than the
industry average operating margin.
Page 62 of 79
Conclusion
Conclusion
Frankies Pizzeria will be an Italian style restaurant targeting a young audience within the Tampa
Bay area. The environment will be tailored for family dining, with an abundance of menu
options for all ages and tastes. The restaurant will have a capacity of 40-50 tables, with between
15 and 20 parking spaces available for customers use. The competitive advantage the
management team will strive for will come from a fun, lively atmosphere, with a full bar, unique
food, and closing hours much later than most competitors.
Competition in the immediate area will be relatively minimal compared to other areas within
Tampa Bay. Three main competitors that we have identified are Deck Pizza and Pub, Gourmet
Pizza Company, and Sally ONeills Pizza Hotline. We will exert significant pressure on the
competition by offering more specials, options, and hours of operation. Frankies Pizzeria will
also offer both delivery and catering. In addition to these amenities, the management staff will
use a number of marketing strategies to increase the exposure of the start-up restaurant. These
marketing strategies will include a customer database, loyalty programs, email campaigns, mailer
campaigns, giveaways, raffles, community outreach, competitions, advertising, and public
relations initiatives. By taking advantage of competitors weaknesses, and creating superior
quality and visibility, we believe Frankies Pizza can stand a cut above the competition.
The founders of Frankies Pizzeria will perform exhaustive due diligence regarding the possible
routes of obtaining capital financing for the venture. These options include family, friends, angel
investors, commercial bank loan, venture capitalists, or special loan from government
institutions. The fact that our business is a true start-up, is in the restaurant industry with high
failure rates, and has limited upside with regards to return on investment limits us to certain
outlets of raising the needed capital. These facts make garnering financing from venture
capitalists a low probability. The economic climate at the present time also makes a small
business loan from a commercial bank less likely. Initially, founders will invest all of their own
capital that they can afford, next family and friends will be elicited, then efforts will be made to
contact angel investors in the area, and finally the founders will apply for a special loan program
Page 63 of 79
Conclusion
from a federal institution such as a 7(a) loan from the Small Business Administration. An option
of last resort will be the use of credit cards to supplement the capital needed.
We project Frankies Pizzeria to need $521,766 in start-up capital. We also project that we will
receive $150,000 in equity contributions from the founders, leaving $371,766 in financing left to
be found. We project annual revenue to total $926,465. We also project that after expenses, total
controllable profit for the year will be $225,878, with a net income of $106,331 before taxes and
a cash flow of $113,551 before taxes. At this expense rate we believe our break even sales for the
year is $753,682. At these projections, we believe the payback period of initial investment is
equal to 3.7 years.
For Valuation purposes, the founders have used the weighted average cost of capital as the
discount rate, in our case equaling 8.89%. We also used a 2% growth rate as well as a 15%
liquidity discount. Using the discounted cash flow method, we estimate the value of Frankies
Pizza as of December 2011 to be $695,586. Using the price to earnings ratio multiplier, we
estimate a valuation of $2,388,260. Using the price to sales ratio multiplier, we estimated a
valuation of $1,625,614. Using the price to cash flow ratio multiplier, we estimated a valuation
of $1,194,794. Using the enterprise value to revenue multiplier, we estimated a valuation of
$1,757,238. Finally, using the enterprise value to EBITDA multiplier, we estimated a valuation
of $1,128,603. These valuations are estimates, and of course rely heavily on our financial
projections; however, we believe our projections to be conservative and obtainable, which would
make these valuations certainly achievable.
Our report has shown a comprehensive plan to bring our start-up business, Frankies Pizzeria, to
fruition. Our meticulous selection of the menu, the location, operations planning, marketing
strategies, financing options, and financial projections will give our venture the best chance for
long term profitability. While extremely large returns seem unlikely given the nature of the
business and the profit margins involved, we do aim to make steady positive returns far into the
future, remaining profitable each year. This business plan has outlined the financing options and
routes it will take, and ultimately lead to the grand opening of Frankies Pizzeria.
Page 64 of 79
References
References
http://www.clrsearch.com/Tampa_Demographics/FL/33606/Population-by-Age
http://www.city-data.com/neighborhood/1508-South-Howard-Condo-Tampa-FL.html
http://www.city-data.com/city/Tampa-Florida.html
http://www.allfoodbusiness.com/restaurant_concepts.php
http://www.movoto.com/neighborhood/fl/tampa/33606.htm
http://southtampa.patch.com/listings/deck-pizza-pub
http://www.hcpafl.org/
www.census.gov
http://censtats.census.gov/cgi-bin/pct/pctProfile.pl
http://www.urbanspoon.com/r/30/342244/restaurant/Tampa-Bay/Hyde-Park/Gourmet-PizzaCompany-Tampa
http://www.gourmetpizza-company.com/menu.html
http://www.manta.com/mb?search=+Pizza+Company+tampa
http://www.mapquest.com/
http://www.manta.com/c/mm81y0t/sally-o-neal-s-pizza-hotline
http://www.google.com/imgres?um=1&hl=en&biw=1366&bih=544&tbm=isch&tbnid=h2pnunt
Ajl8UzM:&imgrefurl=http://www.discoveringprofits.com/2011/03/small-business-marketinghas-changed-willyou/&docid=nS_CEZRGta5_1M&imgurl=http://www.discoveringprofits.com/wpcontent/uploads/2011/03/socialmediagraph.gif&w=324&h=235&ei=f6y2TsDiMMLs2gWan8XO
DQ&zoom=1
Page 65 of 79
References
http://www.google.com/imgres?um=1&hl=en&sa=N&biw=1366&bih=544&tbm=isch&tbnid=J
wRBl5lwOG7GjM:&imgrefurl=http://www.angelinvestmentnetwork.net/2011-09/chart-thestartup-financing-cycle&docid=uGlTr7QT9iyoM&imgurl=http://www.angelinvestmentnetwork.net/wp-content/uploads/2011/09/Chart-TheStartup-Financing-Cycle.png&w=700&h=468&ei=Cqa2TqiGBYXO2AXQmf2dCQ&zoom=1
http://www.google.com/imgres?um=1&hl=en&sa=N&biw=1366&bih=544&tbm=isch&tbnid=g
vYvXFSGZ_uf1M:&imgrefurl=http://jan.ocregister.com/tag/businessloans/&docid=pZn7kjBZ_YuS2M&imgurl=http://jan.ocregister.com/files/2011/05/sba-banklending.jpg&w=400&h=332&ei=Cqa2TqiGBYXO2AXQmf2dCQ&zoom=1
http://www.google.com/imgres?um=1&hl=en&sa=N&biw=1366&bih=544&tbm=isch&tbnid=z
1a7CG4TKacy6M:&imgrefurl=http://kohare.wordpress.com/2011/09/13/238/&docid=FVslEWQ
nWXYMGM&imgurl=http://kohare.files.wordpress.com/2011/09/small-business-financegraph.jpg&w=530&h=289&ei=Cqa2TqiGBYXO2AXQmf2dCQ&zoom=1
www.SBA.gov
Page 66 of 79
Appendix
Appendix
HillsboroughCountyPropertyAppraiserdatabasefortheprojectsite
Page 67 of 79
Appendix
Page 68 of 79
Appendix
Page 69 of 79
Appendix
Page 70 of 79
Appendix
CensusBureauDemographics
Page 71 of 79
Appendix
Page 72 of 79
Appendix
Page 73 of 79
Appendix
Page 74 of 79
Appendix
LoanAmortiationSchedule
Page 75 of 79
Appendix
Loan Amortiation Schedule
Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
Loan
Balance
371,766
369,734
367,688
365,629
363,556
361,469
359,368
357,254
355,125
352,982
350,824
348,653
346,466
344,266
342,050
339,820
337,575
335,315
333,040
330,749
328,444
326,123
323,787
321,435
319,067
316,684
314,284
311,869
309,437
306,990
304,526
302,046
299,549
297,035
294,505
291,958
289,393
286,812
284,214
281,598
278,965
276,314
273,645
270,959
268,255
265,533
262,793
260,034
257,257
254,461
251,647
248,814
245,963
243,092
240,202
237,293
234,364
231,416
228,448
225,461
Interest
2,478
2,465
2,451
2,438
2,424
2,410
2,396
2,382
2,367
2,353
2,339
2,324
2,310
2,295
2,280
2,265
2,250
2,235
2,220
2,205
2,190
2,174
2,159
2,143
2,127
2,111
2,095
2,079
2,063
2,047
2,030
2,014
1,997
1,980
1,963
1,946
1,929
1,912
1,895
1,877
1,860
1,842
1,824
1,806
1,788
1,770
1,752
1,734
1,715
1,696
1,678
1,659
1,640
1,621
1,601
1,582
1,562
1,543
1,523
1,503
Principal
2,032
2,046
2,059
2,073
2,087
2,101
2,115
2,129
2,143
2,157
2,172
2,186
2,201
2,215
2,230
2,245
2,260
2,275
2,290
2,306
2,321
2,336
2,352
2,368
2,383
2,399
2,415
2,431
2,448
2,464
2,480
2,497
2,514
2,530
2,547
2,564
2,581
2,598
2,616
2,633
2,651
2,668
2,686
2,704
2,722
2,740
2,759
2,777
2,796
2,814
2,833
2,852
2,871
2,890
2,909
2,929
2,948
2,968
2,988
3,007
Annual Totals
Interest
Prin Repmt
28,827
25,300 Year 1
26,727
27,399 Year 2
24,453
29,674 Year 3
21,990
32,136 Year 4
19,323
34,804 Year 5
Page 76 of 79
Appendix
MenuEngineeringTermDescriptions
Stars
Stars are menu items that have a high gross profit and are very popular. The more you can
influence the consumer towards these items, the more profitable your operation will be. Give
these items best placement on menus, include them in promotions, and encourage staff to suggest
these items.
Workhorse
Workhorses are menu items that sell well but do not contribute all that well to the bottom line
profits. Suggest hiding these items on the menu and/or looking for alternative product choices to
decrease costs without decreasing quantity.
Challenge
Challenges are products that have a high gross profit, but are not very popular. Typically, these
are the more expensive items on your menu. Consider evaluating prices of these products and
eliciting customer feedback.
Dog
Dogs are menu items that are not very popular and do not contribute too much to the overall
profit. Consider removing these items from the menu and eliciting feedback from customers on
what they might like better.
Page 77 of 79
Appendix
SBA7(a)LoanGuarantySubmissionChecklist
A complete loan package must include the following:
Yes
No
Yes
No N/A
Yes
No N/A
SBA Eligibility Questionnaire For Standard 7(a) Guaranty (highly recommended, but not required)
SBA Form 4, Application for Business Loan
Schedule of Collateral, SBA Form 4 - Schedule A
SBA Form 4-I, Lenders Application for Guaranty or Participation
SBA Form 912, Statement of Personal History for any key employee, the sole proprietor; all owners of a
general/ Ltd partnership, corp. and LLC owning 20% or more, plus each officer, director and managing member
Personal Financial Statement (or SBA Form 413) signed and dated by all owners of 20% or more, and spouses
Lenders Credit Memo including lenders comments on business plan and history of the business - see SOP
50 10 5(C), page 184 for a list of required information in a lenders analysis
Management Resume a brief description of the educational, technical and business background of all managers
(* All forms must be completed in their entirety, and signed and dated.)
Change of Ownership
Yes
No N/A
Business Valuation when intangibles being financed are > $250,000 (or there is a close relationship between
the buyer and seller), an independent Business Valuation from a qualified source; when intangibles being
financed are <= $250,000, lender may perform its own valuation of the business (unless banks policy requires
an independent valuation)
Page 78 of 79
Appendix
Sellers Financial Statements when applicable,3 years historic financials and current (within 90 days) income
statement and balance sheet, and pro-forma balance sheet; with all copies properly signed and dated
Page 79 of 79