Business Plan 2015
Christopher Baird
April 09, 2015
Comm 447
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Table of Content
1.0 Executive Summary……………………………………………………………………………………………………………………….…1
2.0 Business Overview…………………………………………………………………………………………………………………………..2
2.1 Introduction to The One Eyed Buck…………………………………………………………………………………….2
2.2 Mission Statement……………………………………………………………………………………………………………..2
2.3 Goals and Objectives…………………………………………………………………………………………………………..2
2.4 Industry Overview……………………………………………………………………………………………………………….3
3.0 Operations Plan……………………………………………………………………………………………………………………………….3
3.1 Organizational Structure…………………………………………………………………………………………………….3
3.2 Location………………………………………………………………………………………………………………………………4
3.3 Building Layout……………………………………………………………………………………………………………………5
3.4 Hours of Business……………………………………………………………………………………………………………….5
3.5 Average Business Day…………………………………………………………………………………………………………5
3.6 Quality Control……………………………………………………………………………………………………………………7
3.7 Supply Analysis…………………………………………………………………………………………………………………..7
3.8 Working Capital …………………………………………………………………………………………………………………7
3.9 Capital Budget…………………………………………………………………………………………………………………….8
4.0 Human Resources……………………………………………………………………………………………………………………………9
4.1 Human Resource Strategy………………………………………………………………………………………………….9
4.2 Recruitment……………………………………………………………………………………………………………………….9
4.3 Training………………………………………………………………………………………………………………………………9
4.4 Compensation…………………………………………………………………………………………………………………….9
4.5 Job Description……………………………………………………………………………………………………………………9
4.5.1 Owners…………………………………………………………………………………………………………….9
4.5.2 Restaurant Manager……………………………………………………………………………………….10
4.5.3 Brew Assistant………………………………………………………………………………………………..10
4.5.4 Store Clerk……………………………………………………………………………………………………….10
4.5.5 Bartender………………………………………………………………………………………………………..10
4.5.6 Servers…………………………………………………………………………………………………………….10
4.5.7 Cooks……………………………………………………………………………………………………………….11
5.0 Marketing Plan………………………………………………………………………………………………………………………………..12
5.1 Marketing Mix…………………………………………………………………………………………………………………….12
5.1.1 Product and Services……………………………………………………………………………………….12
5.1.2 Price…………………………………………………………………………………………………………………12
5.1.3 Promotion……………………………………………………………………………………………………….13
5.1.4 Place………………………………………………………………………………….…………………………….14
5.2 Competitive Analysis…………………………………………………………………………………………………………..14
5.3 Competitive Advantage………………………………………………………………………………………………………14
5.4 Marketing Budget……………………………………………………………………………………………………………….15
6.0 Financial Plan…………………………………………………………………………………………………………………………………..15
6.1 Introduction……………………………………………………………………………………………………………………….15
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6.2 Capital Structure…………………………………………………………………………………………………………………16
6.3 Start-up Costs……………………………………………………………………………………………………………………..16
6.4 Sales Revenues and Net Income…………………………………………………………………………………………16
6.5 Total Operating Expenses……………………………………………………………………………………………………17
6.6 Working Capital Estimates………………………………………………………………………………………………….17
6.7 Cost of Capital…………………………………………………………………………………………………………………….17
6.8 Financial Analysis……………………………………………………………………………………………………………….18
7.0 Conclusion………………………………………………………………………………………………………………………………………18
8.0 Tables
8.1 Working Capital ………………………………………………………………………………………………………………….8
8.2 Capital Budget…………………………………………………………………………………………………………………….8
8.3 Salary and Wages………………………………………………………………………………………………………………11
8.4 Marketing Budget………………………………………………………………………………………………………………15
8.5 Revenues……………………………………………………………………………………………………………………………16
8.6 Net Income………………………………………………………………………………………………………………………..17
8.7 Sensitivity Analysis……………………………………………………………………………………………………………18
9.0 Figures
9.1 Organizational Chart……………………………………………………………………………………………………………4
9.2 Building Location…………………………………………………………………………………………………………………4
9.3 Building Layout …………………………………………………………………………………………………………………..5
9.4 Brewing Process………………………………………………………………………………………………………………….6
9.5 Draft Beer…………………………………………………………………………………………………………………………..12
9.6 Social Media……………………………………………………………………………………………………………………...13
10.0 Appendices
10.1 Supply and Equipment List………………………………………………………………………………………….19
10.2 Finance Spread Sheet, see attached file……………………………………………………………………..20
11.0 Work Cited……………………………………………………………………………………………………………………………………21
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1.0 Executive Summary
The restaurant industry in Saskatoon has been a fast growing and competitive. Many of the same type
of restaurants are coming and going, the Saskatoon people are looking for that new and exciting
experience.
The following document is a business plan proposal for a English themed brewpub in the University
Heights suburb. In the business plan and attached spread sheet will outline the operations, human
resources, marketing and financials for the success of The One Eyed Buck. The results show that it is
feasible but at expensive cost.
The One Eyed Buck offers the exhilarating experience of being like you are overseas at an English pub.
The pub offers the largest selection of beer and gourmet burgers that will fit any ones appetite. The idea
of the pub is to make be simple but something to experience.
The business will have three areas of operation:
1. Restaurant
2. Beer Store
3. Brewery
These three areas of operation create the experience The One Eyed Buck is to offer.
The employees throughout the three areas of operations are highly intelligent and skilled in their areas
of expertise, from servers to brewers. All products are served at the highest quality to allow customers
enjoy the experience at the One Eyed Buck.
The One Eyed Buck requires a significant investment from each of the owners and family investors of a
total of $750,000. To start building of The One Eyed Buck we require a long-term loan to fund the
remaining capital. Our ultimate goal is to provide the best experience one can enjoy at a brewpub by
offering products and service at the best quality possible.
Once the One Eyed Buck meets the ideal capacity the owners will have a steady compensation, it will
take more than a few years for the owners to make back what they put in, but it is our dream to bring
Saskatoon the experience on England.
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2.0 Business Overview
2.1 Introduction:
The One Eyed Buck is a new and upcoming brew pub and beer store. The idea of opening The One Eyed
Buck was over a few homebrew that my partner Dylan Bray had been brewing for the past few months.
We started talking types of beers and got into the talk of a pub establishment. From there we started
talking about ideas to how we would want our brew pub to be like, this is where we came up with the
idea of having an old English themed pub that gave customers the feeling that they are in England. As
mentioned the brew pub will be a evenly shared business between myself and Dylan Bray. The pub side
of the business will have a wide selection of draught beer, appetizers and gourmet burgers. The brewery
will produce 3 consistent types of beers and a seasonal beer, so we will be producing 4 different types of
beers.
2.2 Mission Statement:
The One Eyed Buck serves a long list of draught beer available at all times with addition of the best
appetizers and gourmet burgers in Saskatoon. But not only will our customers receive high quality
products they will be able to experience the old English atmosphere of the pub. The brewery will create
unique and traditional beers that are one of a kind that are brewed to perfection.
2.3 Goals & Objectives:
-
Serving and producing 3 main beers and having 1 seasonal beer
o
Long term – opening a bigger brewery producing higher volumes and more selection of
beer
-
Value our staff, keeping them happy and feeling secure
o
-
Immediately
High customer satisfaction
o
Immediately
-
Providing a true locally brewed artisan craft beer
-
Well known for the gourmet burgers
o
Immediately
-
Profitable in 5 years
-
Having our beer sold throughout Saskatchewan
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1-2 years based on the demand/ reputation of the beer.
2.4 Industry Overview:
The One Eyed Buck is in two different types of industries being that we are a brewery and a pub. The
restaurant/pub industry in Saskatoon is one of the toughest regions to compete in being that the
restaurant per capita is very high compared with other cities (Tourism). The restaurant industry is based
on the word of mouth of customers, to make a name for your business customers always come first so
you can build a strong reputation. Being that Saskatoon has so many restaurants it will take a lot of
work for any upcoming restaurant to draw in customers. Not only will The One Eyed Buck have to
compete with restaurants but also other drinking establishments.
3.0 The Operations Plan:
3.1 Organizational Structure
The One Eyed Buck will be owned and operated by two owners: Christopher Baird and Dylan Bray. This
business will operate as a partnership because both owners have equal equity and take on equal
responsibility in the debt. Both partners will have the same amount of control and split profits down the
middle. Addition to this, the partners will save on tax being a partnership. Equity for the business will
come from the two owners and two family members from the owners as well as a long-term loan from a
bank. The owners have strong and unique skill sets that vary from each other that will help with the
success of The One Eyed Buck. Christopher Baird has a background on the business side of things from
accounting, marketing and management. Dylan Bray has a background in computer science and
experience in brewing. These are key attributes in running this type of business. Being the two owners
cannot run all this on their own; they will need to hire staff to help with the operations of the business.
See the human resources section for more detail on the duties and number of employees needed.
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Table 9.1 Organizational Chart
Owner
Owner
Brew
Assistant
Teller
Restaurant
Manager
Cook
Servers
Bartender
3.2 Location
The One Eyed Buck will be built in the area of University Heights in Saskatoon, Saskatchewan. The
location was chosen because the area has a lot of businesses and housing surrounding the location.
Figure 9.2 Building Location
This will benefit The One Eyed Buck because it draw in business people during the day and close
residents at night. The building will be 4,500 square feet; this will give enough room for the three areas
of production that the One Eyed Buck will offer.
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3.3 Building Layout
Figure 9.3 Building Layout
The reason to why The One Eyed Buck will be built rather than lease a building is because the renovation
costs will be costly. This way the building can have everything where we want it rather having to work
with the area that may not be suitable for our production. The max capacity of the pub is 120 customers
3.4 Hours of Operations
Pub and Beer Store:
Sunday – Thursday 11:00am to 12:00am
Friday – Saturday 11:00am to 2:00am
Brewery:
Monday-Friday 8:00am to 5:00pm
-
Accessible by management or employees at anytime
3.5 Average Business Day:
The Pub area of The One Eyed Buck will have a seat yourself policy, this is a first come first serve bases.
The server will take the customer’s order and type it into a computer that will be connected to a
network that will print a slip out for the bartender if there are drinks ordered and to the kitchen if there
food ordered. From there the food and drinks will be created and served as soon as possible to the
customer. The pub will offer VLT’s and a games corner that area available to the customers at any time.
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The kitchen will operate in accordance to the orders typed into the computer; the preparation of food
will be done starting 1 hour before the establishment opens, speeding time up to get the food out to the
customer as soon as possible. When the pub closes the staff will be required to stay and clean the
establishment to the manager’s expectations to continue the quality of The One Eyed Buck.
The brewery will have a lot more process and technical factors than the pub side of things. The brewery
will be set up to handle 4 fermenters. This is because we plan to serve 3 hand crafted beers at all times
and the fourth fermenter will be for seasonal beers, which will change twice a year.
Figure 9.4 Brewing Process
The brewing process is a complex but yet simple when you have the proper ingredient and equipment.
First you will add who grain or barley to the mill which will be milled to the proper size. From there the
milled grain or barley and water will be added to the mash tun which will breakdown the starch into
sugars. After this step is done the next step would be taking those sugars into the brewing tank which
will boil and from there you will add hops to the liquid. Next after brewing the liquid we will cool it and
transfer it into the fermenter, this is where we add yeast to create the alcohol content of the beer. After
a few days fermenting we will transfer into a holding take to age the beer which will give it the flavour
and quality of the beer. After aging the beer it will be bottle and kegged which then is shipped to
establishments that ordered our product and stocked in our own stores refrigerators.
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The beer store will be operated like any regular retail store. The employee will arrive a half hour early to
make sure refrigerators are stocked and to open the doors. They will answer any question by customers
and ring through any sales of product. Once the store is closed an employee will lock the doors, clean
the floors and cash out the register.
3.6 Quality Control
Each employee at The One Eyed Buck will be trained how to handle food and beverages in the best
practise to assure the highest quality of food and safety. To further assure the food is safe the pub will
get a food safety certificate. Also leading by example is very important because your staff will treat each
other and customers how upper management does. Making sure the entire building is clean at all times
to assure all products aren’t contaminated in anyway. We will have monthly staff meetings to make sure
everyone is notified of any policy changes and anything that needs to be brought up so all employees
are happy and doing their best job. Once a week we will have a cleaning service come in to do a
thorough clean of the pub area. The One Eyed Buck will also be very strict of the recycling of bottles,
paper, oil and grease properly to ensure the establishment does not harm the environment.
3.7 Supply Analysis
The One Eyed Buck will require equipment for the kitchen and bar areas, the supplier of the equipment
will be Russel’s Food Equipment. Russel’s Food Equipment have kitchen set ups and will consult with us
to how we want to run our kitchen; they will install all equipment and test it before we use it. Gordon
Food service will supply the kitchen with all food products and any raw materials needed in accordance
with the menu at The One Eyed Buck. Saskatchewan Liquor and Gaming Authorities will supply all
alcohol unless the type of alcohol needs to be specifically ordered through other suppliers. HDP Brewery
Systems will supply the required equipment and install it for the brewery. Northern Brewery will supply
the brewery with the ingredients needed for the beer.
3.8 Working Capital
The working capital turnover is averaged out between the three areas of business. Cash will be needed
for any emergencies, keeping $10,000 on hand at all times can help keep operations going if any
problems were to happen.
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Table 8.1 Working Capital
Description
Cash
$10,000
Accounts Receivable
$58,650
30 Days
Inventory
$16,618
8.5 Days
Accounts Payable
$58,650
30 Days
Total Net Working Capital
$26,618
3.9 Capital Budget
The building will be built in University Heights are of Saskatoon, Saskatchewan rather than finding a
lease building. The costs to build are as follows:
Land: 4500 Square Feet x $120 per Square Foot
Building: 4500 Square Feet x $150 per Square Foot
Furniture & Fixtures: 4500 Square Feet x $50 per Square Foot +$130,000 + $120,000
The furniture and fixtures include the typical bar necessities from tables, chairs, lighting and interior
design. The two lump sums added at the end are the cost of the brewery and kitchen equipment as
listen in the calculation. The brewery equipment estimate is found on the HDP website, see work cited
from the link. The kitchen equipment was a quote phone call with Russel’s Food Equipment, this was
comparable to the Colonial Pub that had recently opened their own kitchen recently. All other quotes
are given by PCL Construction Company for the cost of building exterior and interior of the building. The
land quote was given by Scott Crossman who works for Royal LePage Real Estate, on average land in the
University Heights area goes for roughly $120 per square foot.
Table 8.2 Capital Budget
Description
Cost
Land
$540,000
Building
$675,000
Furniture and Fixtures
$500,000
Net Working Capital
$26,618
Total
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1,741,618
4.0 Human Resources
4.1 Human Resource Strategy
At the One Eyed Buck, we stride to provide the most exhilarating experience being an English themed
pub for every individual that enters our facility. Employees at The One Eyed Buck will be very important
in creating this experience, thus looking to employ friendly, outgoing and caring individuals.
4.2 Recruitment
Upon opening the doors to The One Eyed Buck we will post job ads through Kijiji, Saskatoon Job Shop,
Career exposes and through culinary schools in Saskatoon. If required positions are still needed we will
manage with the employees we have until adding more staff.
4.3 Training
Once we have found the right employees for The One Eyed Buck, owners will take cooks, servers and
bartenders through food safety programs. Dylan Bray will train the brewing assistance in how all the
equipment operates, the safety precautions needing to be taken into consideration. The brewers will be
put through a health and safety video to understand the important of machinery working. After owners
and the manager feel all employees are capable of doing their duties they will be allowed to work freely.
4.4 Compensation
All employees at The One Eyed Buck will be enrolled in EI, CPP and Worker’s Compensation
Board. Vacation pay will be paid out with every paycheck as seen in the financial statements of
5.77%. Employees will also be given benefits of receiving 50% off all food products and 30%
off all alcoholic beverages at any time.
4.5 Job Description
4.5.1 Owners
The two owners will act as managers in the daily operations of business during the start-up stages.
Christopher Baird will run the pub side of the business; he will be in charge of all finances throughout
the One Eye Buck as well. He will make any important decision such as ordering of any product needed
for production. He will make sure employees and customers are satisfied with service as well as all
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employees. Dylan Bray will control the brewery side of the business. Mainly he will be head of brewing
the beer and making any decisions with the way of the brewing. He will continue to work with brew
assistants and the store teller to ensure everything is in order.
4.5.2 Restaurant Manager:
The manger is here to lighten the load off the owner’s shoulders. He will mainly schedule the servers,
bartenders and cooks. Count inventory after every night and report to Christopher Baird to make any
need orders. They will also answer any questions from customers or workers. They will be also be in
charge of conducting cleaning at the end of the night as well as locking up the facility.
4.5.3 Brew Assistants:
Brewing assistance will help Dylan brew beer and will be required to do this task alone if Dylan is not
available. Other duties will be making sure the warehouse is clean and organized daily and taking
customers on tours of how the brewery runs. They will also receive any deliveries to the establishment
and keeping inventory of all needed products.
4.5.4 Store Clerk
They will be responsible of stocking and selling of the products in the alcohol sales. They will report an
inventory count and any needed products to Christopher to order in. At the end of the night they will be
responsible to cash out the register and clean the area before locking the stores doors.
4.5.5 Bartender
They will be in charge of taking and orders of drinks and food at the bar. They will be responsible in
make drinks according to sizes and portions to limit any waste. They will make sure coolers and shelves
are stocked are stocked at all times. Before and after the shift they will make sure the area is cleaned to
expectations.
4.5.6 Servers
They will be responsible for customers service from greeting and taking any customers orders. After a
table has left they will need to clean the area and sanitize the tables for the next customers to sit at.
They will also be in charge of cashing out at the end of the night and handing money into the manager.
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They will be responsible to stay an hour after hours to clean the restaurant area, from sweeping,
mopping and washing tables.
4.5.7 Cooks
They will come an hour before opening to prepare food making the process of cooking food fast and
efficiently. They will be in charge of putting dishes and cups through the wash. They are also responsible
that all kitchen area is sanitized and free from any hazards.
As seen in the following table, the wages and salaries as follows for the different positions listed above.
Bartenders and servers will accept tips on top of the minimum wage they receive. After every evening
the servers will tip out the kitchen 1% of their sales for the shift. This is standard procedure in most
restaurant industry. Depending on how busy the bar-counter is for the first while of business, bartends
may also receive 1% of the server’s tips if they are not receiving a fair amount. The wages and salaries
increase each year but an inflation rate of 2.5%. Minimum wage may vary year to year, but this is the
closest estimate available for the time being. The sales rep will also be on call, giving him the benefit of a
company cell phone.
Table 8.3 Salary and Wages
2015
2016
2017
2018
2019
Owner
$45,000
$46,125
$47,278
$48,460
$49,672
Manager (salary)
$40,000
$41,000
$42,025
$43,076
$44,153
Sales Rep (salary)
$40,000
$41,000
$42,025
$43,076
$44,153
F/T Brewery Assistant (salary)
$35,000
$35,875
$36,772
$37,691
$38,633
F/T & P/T Server &
$10.20
$10.46
$10.72
$10.98
$11.26
F/T Store Clerk (Hourly)
$15.00
$15.38
$15.76
$16.15
$16.56
P/T Store Clerk (Hourly)
$12.00
$12.30
$12.61
$12.92
$13.25
F/T Kitchen Staff (Salary)
$35,000
$35,875
$36,772
$37,691
$38,633
P/T Kitchen Staff (Hourly
$15.00
$15.38
$15.76
$16.15
$16.56
Bartender(Hourly)
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5.0 Marketing Plan
5.1 Marketing Mix
5.1.1 Product & Services
The One Eyed Buck will offer a huge selection of draft and bottle beer. This is one of the bigger aspects
of the business because very few competitors offer this wide variety of beer. We plan to have the
biggest selection of beers in Saskatoon to help attract consumers in the door. Most hard alcohol will be
available as well to be mixed with whatever the consumer wants.
Figure 9.5 Draft Beer
To go with our wide selection of beer we will offer gourmet burgers. Consumers will be able to add any
ingredients they want, allowing them to personalize their own burger. Also on the menu we will offer
appetizer food from platters to individual baskets of fries, wings or any other generic appetizer.
The One Eyed Buck will also have a cold beer and liquor store attached to the building. Not only will we
offer our hand crafted beer but we will also offer other beers and hard alcohol to accommodate other
consumers preferences. Through the brewery part of service we will whole sale out beer to other
establishments that we sell too.
5.1.2 Price
The One Eyed Buck’s products and services have to be cost competitive being that there are so many
restaurants and alcoholic establishments throughout the city. Our location in the University Heights is a
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premium spot because the average household income in this area is $90,164. We can adjust prices
according to how attractive our establishment is in the first year. From there we can raise prices.
Roughly the average customer will spend $23.00; this is averaged between the three areas of business.
An average case of beer from the SLGA in University Heights is $25.00 for 12 beers. Our beer will sell for
$24.00 a case, our beer is hand crafted giving it a different flavour. Feedback from the consumers will
help us master the brewing of our beer to help give them what they want. The competitors in the area
are Monantas, Rock Creek and Boston Pizza. These restaurants have the same menu prices and roughly
average $20 per consumer when you add food and beverages together. We will expect a consumer to
spend roughly the same amount. Strategy is to offer a high quality product that’ll attract consumers in
the door.
5.1.3 Promotion
The One Eyed Bucks target market is very broad in the sense of age, we want to attract anyone older
than 19 to the establishment. We focus on a geographical market being the area we are in. We will focus
on marketing to the University Heights area with billboards and flyers for our grand opening to the
surrounding residents. To help attract consumers we will have promotional nights on our food, such as a
cheap burger and beer night on Mondays. We will also have other food discounts throughout the week
such as: Wednesday wing nights and Thursday cheap draft beer night. We feel this is an excellent way to
promote our product and get consumers through the door. We will also use social media such as
Facebook and Instagram. Through these we will offer contests to the public who like and share our page,
they could win a case of our hand crafted beer or gift cards to The One Eyed Buck being of age. Our main
strategy of promotion will be through word of mouth, we want to give the consumer the best
experience and make them feel a part of the English theme.
Figure 9.6 Social Media
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5.1.4 Place
The One Eyed Buck will be located in University Heights suburb. The establishment will be just off
McOrmond Drive in a busy mall, which has a high-traffic exposure. The surrounding area has
approximately 45,000 people and expanding fast. This area will help us reach a wide variety of
customers from families to business people at any time of the day.
5.2 Competitive Analysis
The competitors to the One Eyed Buck is huge because of the different offerings Saskatoon has from fast
food restaurants to sit down and eat establishments. Our main competitors will be based on the
surrounding restaurants of our type in the University Heights area. The three main restaurants that offer
the food and alcoholic beverages are:
Montana’s Cookhouse
Rock Creek Tap and Grill
Boston Pizza
These three restaurant are well established and for The One Eyed Buck to compete, we have to offer an
experience these restaurants don’t. We also have to compete with the SLGA store that is located in
University Heights, our best strategy with them is to have longer ours taking the later crowd of alcohol
buyers. Secondary competitors to The One Eyed Buck are other brewpubs in Saskatoon such as:
Paddock Wood Brewing Co.
Prairie Sun Brewery
SpeckleBelly’s Pub n Grill
Being that they aren’t near our establishment we still have to compete with their beer products being
that we are also a microbrewery.
5.3 Competitive Advantage
The One Eyed Buck will work on to capitalize on our huge selection of beer; we feel having a huge
selection will set us apart from our surrounding competitors. Our main competitors tend to only offer
the main stream beer such as Molson and Labatt products. We will maximize on our English themed pub
to give consumers the feel that they are across seas, our atmosphere will help differentiate from our
competitors. We plan to employ the most appropriate trained employees that will help create that
amazing experience when a consumer enters The One Eyed Buck.
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5.4 Marketing Budget
Table 8.4 Marketing Budget
Year 1
Year 2
Year 3
Year 4
Year 5
Radio
$12,000
$12,000
$3,000
$3,000
$3,000
Website
$150
-
-
-
-
Facebook/
-
-
-
-
-
$10,000
$10,000
$10,000
$10,000
$10,000
$22,150
$22,000
$13,000
$13,000
$13,000
Instagram
Various Events &
Promotions
Total
The marketing budget projections are based on quotes found online. As you can see the radio will be
one of our bigger marketing strategies where we can promote The One Eyed Buck. We will heavily
promote the first two years through the radio and the remaining years we will have limited air time just
to announce any promotional events going on at our establishment. The radio ads average about $500
for 30 – 30 second messages, we will have 2 messages a day for 12 months in the first two years and
after that we will selectively pick days to send messages out. The website cost is only for a domain
name which lasts 10 years when paid up front. Dylan Bray being a computer science major can update
and maintenance the website for no cost. The various events and promotions is money set aside for any
events we tend to put on such as hosting beer gardens at a sporting event or even sponsoring sport
teams. This will allow us to try different strategies to promote The One Eyed Buck.
6.0 Financial Plan
6.1 Introduction
The following financial analysis for the One Eyed Buck is on the first five years of projections. It is
believed that these projections are as accurate to the economy and are not unrealistic.
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6.2 Capital Structure
It is estimated that $1,731,618 is needed for the start-up of our business. The One Eyed Buck ‘s capital
structure will be financed of 57% debt and 43% equity. The two founding partners will contribute
$200,000 each of their own savings into the business. The other $350,000 of equity will be invested
from family members of the two owners, this will be paid back without any interest over time through
the owners pockets. The remaining $981,618 will be obtained through a long-term bank loan at a 15%
interest rate.
6.3 Start-up Costs
The start-up costs are necessary for the building of the facility; the facility will be a total of 4500 square
feet. On top of the building all equipment, utilities and supplies needed for operation are essential for
the opening of the restaurant. You can refer to the Capital budget section in the operations plan to view
the costs related to the different areas. A list of the supplies and equipment need for the start-up of The
One Eyed Buck can be seen in Appendix 10.1.
6.4 Sales Revenue and Net Income
All products and services are categorized into 3 different categories: Brewery, Pub and Store.
Table 8.5 Revenues
Revenues
2015
2016
2017
2018
2019
Pub
60%
993,600
967,518
1,090,877
1,174,056
1,263,578
Brewery
30%
496,800
483,759
545,438
587,028
631,789
Beer Store
10%
165,600
161,253
181,813
195,676
210,596
Total
100%
1,656,000
1,612,530
1,818,128
1,956,760
2,105,963
Revenues
As seen in the chart above sales in 2015 are projected to reach $1,656,000. This is based on 200
customers per day, 150 through the pub and 50 through the store. In the second year of operations
customers are expected to decline 5% lowering revenues in year two. In year three customers are
expected to increase by 10% and 5% for the following projected years.
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Table 8.6 Net Income
Taxable
2015
2016
2017
2018
2019
59,351
(32,605)
96,434
171,043
245,285
7,716
-
8,298
22,236
31,887
51,636
(32,605)
88,136
148,807
213,398
Income
Income
Taxes
Net Income
93,874
Net Income at the start of operations is expected to be low due to the high amount of expenses for
start-up. The reason for the negative net income in year two is due to the drop in customers per day. It
is normal to see a decline in the restaurant business after the first year of operations.
6.5 Total Operating Expenses
Total operating expenses are fairly high due to wages paid to employees. The One Eyed Buck’s amount
of employees is crucial for the business to operate. On top of the high amount of employees, since
there is a lot of different things going on between the pub and the brewery, utilities are higher than
usual because the amount of water and electricity to being used.
6.6 Working Capital Estimates
The working capital is averaged between the three areas of business that The One Eyed Buck offers. The
accounts receivable are only through the brewery because that is the only credit we will give supplying
to other companies. We give customers 30 days to pay for any purchasing of beer at a whole sale level.
Inventory is averaged between the three areas of business giving a total of 8.5 days. This was calculated
by average food inventory of 7 days and beer inventory of 10 days. Accounts payable is to be paid
within 30 days.
6.7 Cost of Capital
The total capital cost throughout the five year projections is a major expenditure on the equipment and
building. The half year rule helps keep the cost down, but years after it is more expensive, as seen in
schedule 10 of the financial plan. Equipment will depreciate at 20% (class 8) and the building will
depreciate at 4% (class 1).
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6.8 Financial Analysis
One of the critical success factors for The One Eyed Buck is the customers per day, meeting the base
case of 200 customers per day is ideal in the first year. As seen in the sensitivity chart below you can see
how the customer can affect the business operations. There is a required rate on investment set at 30%
which will give and IRR of 19.6% which is quite large, negative NPV of ($199,976). This shows that the
business is feasible but not profitable for the owners in the first 5 years.
Table 8.7 Sensitivity Analysis
Customers/day
Average 5 year Profit
(42,700)
5 year Owner
Compensation
$
47,307
Net Payback
IRR
$
(302,242)
-9.3%
170
$
180
$
7,271
$
66,888
$
101,318
2.8%
190
$
51,052
$
104,158
$
431,351
11.4%
Base 200
$
93,874
$
138,459
$
786,729
19.6%
210
$
136,293
$
172,357
$
1,140,092
27.1%
220
$
177,870
$
205,412
$
1,489,240
33.90%
7.0 Conclusion
The One Eyed Buck objective is to provide Saskatoon an experience of a life time that most people won’t
experience in a life time with the English themed pub. We offer a simple but enjoyable menu that will
satisfy any customer from food to beverages. Based on the overall analysis we are very pleased with
how things look, even with a negative NPV in the first five years. We are passionate about The One Eyed
Buck and want to continue with our dream of opening the doors in 2015.
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10.0 Appendices
10.1 Supply and Equipment List
Bar:
Cocktail Shaker
Shooters
Coasters
Trays
Straws
Cutlery
Cups(various styles, wine,
martini, pint, tall, short,
coffee etc.)
Bar mats
Pitchers(various sizes)
Coffee machine
Straws
Bottle Opener
Table Top:
Plates(various sizes)
Bowls (2 sizes)
Cutlery (Fork, Knife and
Spoon)
Plastic Baskets
Coasters
Condiments (ketchup,
mustard, salt, pepper, hot
sauce, sugar, sweetener etc.)
Napkins
Pub:
Computers
Receipt printer
3 ft coolers for bar
Televisions
Blender
Liquor Well
Soda Gun
Ice maker
Music System
Beer Dispenser
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Insulated beer hoses
Kitchen:
Deep Fryer
Grill
Over
Microwave
Heat Lamps
Stainless Steel counter
Containers
Boiler
Dishwasher
Cooler:
Cooling System
Shelving
Brewery:
Grain Mill
Mash Tun
Brew Kettle
Fermenter
Filter
Brite Tank
Filler
Store:
Cash Register
Security Camera
Tall coolers
Shelving
Kitchen:
Pots
Pans
Cutting board
Knives
Oven mitts
Spatula
Wood Spoons
Towels
Film and foil wrap
Measuring spoons/cups
Tongs
Strainer
To go containers
Apron
Cleaning:
Broom
Mop
Buckets
Garbage cans
Bathroom cleaner
Paper towel dispenser
Towel
Hand brush
Sanitizer
Spray Bottles
Wet Floor Signs
Bathroom:
Toilet paper & Dispenser
Hand Towels & Dispenser
Hand soap & Dispenser
Trash can with lid
Brewery:
Various Measuring items
Hydrometer
Thermometer
Beer Boxes
Bottles
Bottle Caps
Kegs
Garbage Cans
Store:
Garbage Can
Broom
Window cleaner
Towel
10.2 Financial Spreadsheet see attached file
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Paper Bags
11.0 Work Cited
Price list. (n.d.). Retrieved April 9, 2015, from http://www.czechminibreweries.com/pricelist/
2013 Financial Content, 5000 Industry Choices, Local-US Industry Financials. (n.d.). Retrieved
April 9, 2015, from http://www.bizstats.com/corporation-industry-financials/wholesale-retailtrade-42/wholesale-trade-nondurable-goods-424/beer-wine-and-distilled-alcoholic-beverages424800/show?asset_class_id=9
Restaurants. (n.d.). Retrieved April 9, 2015, from http://www.tourismsaskatoon.com/things-todo/restaurants/
University Heights Suburban Centre. (2014, December 16). Retrieved April 9, 2015, from
https://www.saskatoon.ca/sites/default/files/university_heights_sc.pdf
Saskatchewan Spring/Summer Campaign. (2013, January 1). Retrieved April 9, 2015, from
http://www.industrymatters.com/files/2013 SK Campaign Spring-Summer Sell Sheet Saskatchewan.pdf
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