Paulie’s Pizza. Page 1. Executive Summary. CONFIDENTIALITY STATEMENT: Information contained in this business plan is strictly confidential and is being
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Table of Contents Executive Summary .. .. 1 Company Description .. .. 3 Locat ion .. .. .. .. 3 Capitalization .. .. .. 3 Business Concept .. .. . 4 Concept Description an d Statement .. .. . 4 Sample Menu .. .. .. 5 Design/Layouts .. .. .. 6 Management Team .. .. . 7 Owner/Operator Paul Longorio .. .. . 7 Assistant Manager Virginia Johnson .. .. .. 7 Management Agreements .. .. . 7 Confidentiality Agreements .. .. . 7 Market Analysis .. .. 8 Industry Assessment .. .. .. . 8 Target Market .. .. .. . 11 Location Analysis .. .. .. 12 Competitive Analysis .. .. .. . 12 Marketing Strategy .. .. .. 14 Overview .. .. .. .. 14 Customer Database .. .. .. . 14 Frequent Diner .. .. .. .. 14 Email Campaign .. .. .. 14 Mai ler campaign .. .. .. .. 15 Community/Charity Involvement .. .. .. 15 Business Relationships .. .. .. .. 15 4 Walls Marketing .. .. .. 15 Public Relations .. .. .. 15 Advertising .. .. .. .. 16 Operations .. .. .. .. 17 Overview .. .. .. .. 17 Staffing .. .. .. .. 17 Training .. .. .. . 17 Daily Operations & Production .. .. .. 18 Customer Service .. .. .. . 19 Suppliers .. .. .. .. 19 Management Controls .. .. .. 20 Administrative Systems .. .. .. 21 Investment Analysis .. .. . 22 Source of Funds .. .. .. 22 Capital Contributions .. .. .. . 22 Growth Plan/Exit Stra tegy .. .. 23
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Expansion Plans .. .. .. 23 Financial Projections .. .. 24 Project Sour ces & Uses of Cash .. .. . 24 Capital Budget (Start – up Cost Projections) .. .. 25 Equipment Schedule .. .. .. .. 27 Sales Projection .. .. .. . 28 Hourly Labor Projection .. .. . 29 Detailed Statement of Income & Cash Flow Year 1 .. 30 Summary Statements of Income & Cash Flow Years 1 – 5 .. 32 Return on Investment Projection .. .. 33 Break – Even Cash Flow Projection .. .. . 34 Appendices .. .. .. . 35 Census Bureau Demographics .. .. . 35 Daytime Employment .. .. .. 36 Arial View for Proposed Location .. .. . 39 Claritas Income Report .. .. .. . 40
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Page 1 Executive Summary CONFIDENTIALITY STATEMENT: Information contained in this business plan is strictly confidential and is being presented to specific persons with the understanding that those persons will maintain confidentialit y and not disclose or distribute any part of this plan to third parties without the prior written permission of the author(s). Information includes any data, reports, schedules, or attachments that may be contained in or referred to in this document. Intr oduction/Statement of Purpose Pizza will be a moderately priced 35 seat Pizza offering hand – tossed New York style pizza, chicken wings and toasted subs for takeout, dine – in, and delivery. Pizza will be a family owned and operated by Paul Longorio. Pizza s that are synonymous with the Northeast. In recipes that have been passed down from generation to generatio n. Background music consisting of popular Italian tunes while t he décor for Pizza 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 c hairs and accompanied by leather – covered booths. Mr. Longorio is seeking additional financing of $274,866 to supplement his contribution of $ 15 0,000 to fund the concept. Mr. Longorio has a proven track record of successful restaurant management over the past twelve years. Pizza 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 soun d 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. Pizza assume a modest weekly sales projection of just under $18,000 , or $ 930 ,000 per year. This equates to around $6 21 per sq. ft. in sales Pizza as a highly desirable concept for ownership in a table service market where $ 4 00 to $ 5 00 per sq. ft. is considered moderately profitable Pizza will yield a net cash
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Page 2 flow of between 13 .5% – 14.5 % of sales, after debt payme nt, during the first five years of operation. Total capitalization will amount to $ 424,866 , $ 15 0,000 of which will be contributed from the owner and the balance secured through a proposed bank loan. Pizz a 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 secure jobs to community residents.
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Page 3 Company Description Pizza will be owned an limited liability company w ith the sole member being Paul Longorio . Location Pizza will be located at 1525 Wilson Blvd . in Arlington, VA Pizza , LLC, will maintain a corporate office at the same addre ss The facility is a pre – existing lease space of approximately 15 00 square feet. We are proposing to enter into a 10 year lease with Shopping Center Landlords, Inc. which owns the center . Capitalization The proposed restaurant will cost an estimated $ 424, 866 to open. A detailed cost breakdown is provided in the Financial Projections section of this business plan. Funding for the venture will be provided by $ 15 0,000 in contributions from the owner and $ 274,866 in proceeds from bank financing . The proposed s ources of funds are as follows: Source of Funds Amount Paul Longorio $ 15 0,000 Bank Loan $ 274,866 Total $ 424,866 Please refer to the Operating Agreement found in the Appendices for further explanation of member equity and profit sharing.
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Page 7 Management Team Owner/Operator Paul Longorio Paul Longorio is a 12 year veteran of the restaurant industry. His most recent employment has been with the California Pizza Kitchen (CPK) where he has thrived as both a General Manager and District man ager 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 manage ment 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 Foodservice Management . He was born in Trenton, New Je rsey and has recently located to Arlington, VA. Assistant Manager Virginia Johnson 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 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 manageme nt. Management Agreements 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 whi ch the agreement may be terminated. A sample agreement can be found in the Appendices section. Confidentiality Agreements Pizza will enforce that all employees sign a confidentiality agreement. Confidentiality agreements with our employees and pa rtners will protect our recipes, operating systems, policies and procedures. Having a confidentiality agreement in place our business seriously. A sample agreement ca n be found in the Appendices section.
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Page 8 Market Analysis Industry Assessment Positive Sales Increases Expected According to the National Restaurant Association, industry sales for 2011 are expected to rise above the $580 billion dollars posted in 2010. Th at figure is a 2.5% increase over 2009 sales. Restaurant industry sales account for 4% of the GNP for the United States. rise to expectations that 2011 will be a sligh t but steady growth year for the industry. However, as the nation continues its recovery from the recession, the total number of locations did not grow and remained at 945,000 for 2010. However, recent economic indicators give hope to positive economic gro wth and expectations are that the number of restaurants in 2011 could reach 1 million locations by the year 2012. Likewise, 2011 could turn out to be a good year for the industry. Eating places, defined as full – service, limited service, cafeterias, social caterers and snack bars by the NRA, contribute the bulk of industry food and drink sales. Of that segment, full – service restaurant sales for 2010 are projected to reach $184 billion, an increase of 1.2% over 2009. Quick – service sales are set to top $164 b illion in 2010. The following chart illustrates segment sales for 2011 as defined by the National Restaurant Association 2011 Industry Forecast. Ethnic Diversity Restaurants have long been considered among the most diverse workplaces with foreign – born employees making up roughly 25% of the workforce. This diversity ratio spills over into restaurant ownership as well, with one in four eating and drinking establishments being owned by African – Americans, Hispanic – Americans or Asian – Americans a ratio tha t is higher than the national average. Furthermore, the number of minority – owned restaurants is growing faster than the industry as a whole. Leading Employer – sector employer with approximately 12.7 m illion workers in 2010 representing almost 9% of the total U.S. workforce. According to the National Restaurant Association, the industry has created, on average, approximately 250,000 jobs per year for the last ten years and is slated to add 2 million new jobs during the next ten years.
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