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BUSINESS PLAN Strictly Private & Confidential

Prospective Purchasers: Mr Stephen Osborne Mr Stephen Bytheway Mr Daniel Scott Pinkney Dukesway Cafe 64a Dukesway Teesside Industrial Estate Thornaby-on-Tees Teesside TS17 9LT


EXECUTIVE SUMMARY Brief Introduction Dukesway Cafe is currently a busy and profitable cafe/takeaway business situated in an enviable position within Teesside Industrial Estate in Thornaby-on-Tees. The key to its success is that the landlord of the industrial estate, English Estates Partnership, does not allow any other similar businesses to trade in the area. As a result it has been trading successfully as a Cafe since the mid 1980s. Dukesway Cafe has a reputation in the area for quality food at value prices, which have remained static for a number of years. A telephone order line is available for all the neighbouring businesses, which keeps a full time delivery driver constantly busy. The premises are maintained to a high standard throughout, with covers for over 40 and there is a large open plan commercial kitchen on display. The current short opening hours offer tremendous scope to increase the turnover substantially, especially as the Cafe has never had to advertise or produce any marketing material. Business Objectives We aim to build upon the existing success of the the Cafe by: Refining the operations process Restructuring the existing storage and display space Refurbishment, renovating and re-branding Enhancing and adding to the current product range Extending the trading hours Expanding the current delivery service Introducing outside catering services (for both business and private functions) Marketing and promoting the outside catering services Propective Purchasers / Investors Mr Stephen Osborne, Mr Stephen Bytheway and Mr Daniel Pinkney How we aim to do this Refining the operations process: By installing a new electronic till system/s that can act as a stock control & review item as well as speeding up current transactions thus increasing throughfare of custom. Restructuring the existing storage and display space Utilising the existing space better by adopting more innovative methods - i.e custom built shelving systems and extended display areas for food and snacks/drinks. Refurbishment, renovating and re-branding Cleaning up existing facilities (and replacing where necessary) and renewing decor to produce a fresher, cleaner and brighter environment. A new identity and brand will be created to draw more attention to the Cafe and lift customer perception thereby attracting more custom - this new identity can be applied to signage, van livery, staff uniforms, menus and any subsequent advertising or marketing collateral.




Enhancing and adding to the current product range By restructuring the current space to give better display solutions we can introduce more confectionery, sweets and sandwiches which will prompt existing trade to purchase more - in only for elevenses and snacks to consume later in the day. Expanding the trading hours The Cafe currently closes at 2pm on weekdays. However, with a growing number of companies on the estate adopting shift patterns and some even trading overnight there may be scope to extend the trading day. We would be looking to extend the trading hours for a trial period to gauge interest and we will then reassess from the outcome of these trials. Expanding delivery service The Cafe currently employs one delivery driver whose working territory is the trading estate itself. We may look to expand this to outside the local area if the operation of the Cafe allows us the time to implement this. Another driver and car may be required to achieve this goal. Introducing outside catering services (for both business and private functions) As the Cafe closes on weekdays at 2pm, Saturdays at 10.30am and is not open on Sunday, there is a valuable window of opportunity to be exploited. These outside trading hours can be used to cook and prepare food for business functions and private functions (outside the Cafe’s normal working hours) which will help to improve profitability and awareness. Marketing and promoting the outside catering service In order to get outside catering work we need to effectively market and promote the service. One of the prospective purchasers, Mr Daniel Pinkney, has an extensive background in this business arena having been a director in a successful design and advertising agency for over 7 years and qualified to 1st Class Degree standard in Graphic Design. Why Dukesway Cafe? As prospective purchasers of this establishment we all have valuable skills and knowledge to be able to build upon what has already been a successful enterprise for almost 25 years. In doing so we hope to increase both the profitability and perception of this Cafe to create a sound and growing business which in turn provides us with a long-term investment opportunity. The Market Opportunity The businesses (and their staff ) within the Teesside Industrial Estate are our target audience/market. In enhancing the the Cafe and through marketing activity we can look to expand this field to businesses and individuals outside this area as well as gaining more market share through the catering side of the business. And as the landlord of the estate will not allow another similar business to trade we can be assured of continuing trade. Finance Requirements We have placed an offer of £78,000 (Leasehold) + Stock at Value with the current vendor which has since been accepted. We envisage a deposit of £25k with the remaining £53k (plus 6% interest) being paid to the vendor over a three year period (using recourse owner financing).




TABLE OF CONTENTS Executive Summary 2 Table of Contents

4

Business Introduction

5

Products & Services

8

Management & Personnel

9

Preliminary Organisational Structure

11

The Market

12

Competitive Business Strategy

13

Marketing Plan

15

Revised Brand Identity

17

Internal Restructure

18

Future Prospects 22 Financial Information 23 Including Cashflow Forecast and Trading Accounts Appendices Current Dukesway Menu Snack Shack Menu New Menu Designs SBS Sales Particulars Health & Safety Leaflets Curriculum Vitae - Mr Stephen Osbourne Curriculum Vitae - Mr Stephen Bytheway Curriculum Vitae - Mr Daniel Scott Pinkney E&P Press Release E&P Accounts & Financial Profile E&P Design Portfolio




BUSINESS INTRODUCTION Location Dukesway Cafe is located in an enviable position within Teesside Industrial Estate in Thornaby-on-Tees, south of Middlesbrough. This is an exceptionally large industrial estate (91 acres), situated next to the busy A19 trunk road, connecting Middlesbrough to Thirsk and further south to the A1 and M1 motorway network. Nearby is a substantial housing estate (Ingleby Barwick) and a number of primary and secondary schools. Trading Address: 64a Dukesway Teesside Industrial Estate Stockton-On-Tees North Yorkshire TS17 9LT Business History Dukesway Cafe is a profitable cafe/takeaway business, which was established in the mid 1980s and has been in the hands of the current owner for the past 5 years. The key to its success is that the landlord of the industrial estate, English Estates Partnership, does not allow any other similar businesses to trade in the area. Dukesway Cafe has a reputation in the area for quality food at value prices, which have remained static for a number of years. A telephone order line is available for all the neighbouring businesses, which keeps a full time delivery driver constantly busy. The premises are maintained to a high standard throughout, with covers for up to 40 and there is a large open plan commercial kitchen on display. The current short opening hours offer tremendous scope to increase the turnover substantially, especially as the cafe has never had to advertise or produce any marketing material. Property Details Single storey industrial unit converted to large cafe with open plan kitchen. Briefly comprising: Cafe area with: Tables and chairs to seat in excess of 40 Drinks chiller Payphone Open plan kitchen with: Stainless steel units and worktops Extraction system Full commercial cooking range Hot plate food display 3 x pie warmers Food chiller display unit Storeroom with chest freezer and upright freezer W/C and wash basin 


Other: 2001 Citroen 1.9 Berlingo van in full livery Parking facilities Financial Profile W/T: ÂŁ3,300 approx GP: 60% Opening Hours Mon - Fri: 6.30am - 2.00pm Sat: 7.00am - 10.30am Sun: Closed Tenure Leasehold Original length: 6 years Remaining length: 1 year Review every: 6 years Rent: ÂŁ145 per week

External Photographs




Internal Photographs




PRODUCTS & SERVICES Products: The current Dukesway menu consists of a variety of hot and cold food and refreshments as follows*: All Day Breakfast (includes a variety of breakfast buns) Lunchtime Specials (different each weekday) Everyday lunches Desserts Pastries Toasties Buns / Burgers Variety of drinks and snacks Assorted sandwiches Jacket potatoes *See actual Dukesway Menu in the appendices section for a more detailed breakdown of products and price structure.

Services: Delivery service (local estate only) Pricing Strategy: The current pricing strategy provides good profits for the Cafe (60% gross margin). However in order for us to carry out the improvements to the business we would look to increase prices across the board. The current owner usually invokes a price hike on 1st October each year, however she has delayed this for the benefit of the new owner to implement once they take over. A small price rise of 5% across the board will make a big difference to the trading profits but it is not a price increase that will frighten off the current customer base.




MANAGEMENT & PERSONNEL With the current owner recently informing us of the need for additional staff to add to her part-time rota, we mutually agreed to put in place one of our future staff members (Miss Stephanie Bytheway). This enables us to have one of our staff learning the current operational procedures as well as provide feedback to what can be done to enhance, improve and alter these procedures for the better. This also removes the need for any handover period which would normally have been necessary. We will be looking to re-employ some of the existing staff but as none of us (Directors) will be working at the Cafe full-time we will require staff we trust and whom are capable, hence the introduction of three new staff to the business and part-time rota. Existing Staff: Janice Ruddock (present owner) 6x part-time staff (including one driver) working up to 124 hours per week. New Owners/Directors: Mr Stephen Osborne* As well as being fully-employed as a project manager and engineering professional at Cleveland Bridge, Stephen also co-owns the newsagents/convenience store with Stephen Bytheway. He has a wealth of engineering, construction, business and DIY skills that can be called upon to enhance any business operations. Mr Stephen Bytheway* A well as being fully-employed Stephen currently has two successful businesses including a cafe/ takeaway business and a newsagents/convenience store. He has extensive experience of managing and running catering businesses, including managing outside catering and delivery - he also holds all the required food and trading licences. Mr Daniel S. Pinkney* A former director of Ellahi & Pinkney Limited (a design/advertising agency based in Stainton Village, Middlesbrough), Daniel has a wealth of business experience and marketing/design skills that can be called on to realise the full potential of Dukesway Cafe. *See full CVs in the appendices section

New Staff to introduce: Mrs Barbara A. Pinkney Barbara has worked for the last 9 years as Catering Assistant in the Coffee Shop at Makro wholesalers in Stockton-on-Tees and is the longest serving member on the catering staff. She has amassed a wealth of knowledge and experience whilst working in this catering establishment which can be called upon to realise the full potential of Dukesway Cafe. Current turnover of the Makro Coffee Shop is well over ÂŁ250,000 per annum, with a constant staff presence of 2-3 which shows a far more efficient working practice than is currently employed at the Dukesway. Makro has a similar setup to the Dukesway in that it caters for approx 40-60 customers and provides hot & cold food plus refreshments.




Mrs Karen Bytheway Karen currently manages the cafe/takeaway business she co-owns with husband Stephen and has done so for the last 10 years. Again this provides hot & cold food and refreshments and is predominantly a takeaway service so has many similarities to Dukesway Cafe. Miss Stephanie Bytheway Stephanie has worked in both the newsagent/convenience store and the cafe/takeaway business owned by her father. She is currently working in the Dukesway Cafe which is advantageous as it helps us learn more about the business and current operations prior to the eventual purchase and handover.

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PRELIMINARY ORGANISATIONAL STRUCTURE Mr Stephen Osbourne Director / Owner

Mr Stephen Bytheway Director / Owner

Mr Daniel Pinkney Director / Owner

Accounts, Spatial Design and Construction, Business Planning & Development

Accounts, Operations, In Charge of Purchases, Business Planning & Development

Accounts, Operations & Marketing/Advertising, Business Planning & Development

Janice Ruddock Former Owner & Manageress Originally planned to work for a 2 month handover period, although this will now no longer be necessary due to presence of our staff in place.

Mrs Barbara Pinkney PT Catering Manager

Miss Stephanie Bytheway PT Catering Manager

Mrs Karen Bytheway PT Catering Manager

Role: Day-to-Day Management

Role: Day-to-Day Management

Role: Day-to-Day Management

Experience: 9 years as Catering Assistant at Makro Coffee Shop including pot wash, food-preparation, cooking, serving, till-operation, sandwich preparation and cashing-up

Experience: PT assistant in Snack Shack and Stainton Store (Newsagent). Currently working in the Dukesway Cafe in anticipation of our forthcoming acquisition.

Experience: 10 years as Owner/ Manageress of Snack Shack including pot wash, food-preparation, cooking, serving, till-operation, sandwich preparation and cashing-up

Glenda PT Catering Assistant

Lorraine PT Catering Assistant

Debbie PT Catering Assistant

Lisa (new) PT Catering Assistant

Leanne Bytheway PT Catering Assistant

Day-to-Day Operations

Day-to-Day Operations

Day-to-Day Operations

Day-to-Day Operations

Day-to-Day Operations

Experience: 2 months at Dukesway Cafe

Experience: 4 years at Dukesway Cafe

Experience: 3 years at Dukesway Cafe

Experience: 1 month at Dukesway Cafe

Experience: Catering Assistant at Snack Shack

Keith Delivery Driver Driver and delivery of food to businesses on local industrial estate. Experience: 5 years at Dukesway Cafe

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THE MARKET Teesside Industrial Estate is built in 91 acres and is one of the Tees Valley’s most successful industrial estates. In July 2005 there were 115 companies on the site, comprising of 3,676 employees (taken from www.teesvalley-jsu.gov.uk). Some Companies on site include: Armstrong World Industries: Vinyl flooring factory - 184 workers at the site who turning out 15.8 million square metres of vinyl a year. Initial City Link: 24 hour Delivery company recruiting 45 staff. Vixen Surface Treatments: Founded in 1990, Vixen Surface Treatments is a leading force in the production of machines for degreasing and blast cleaning. They have a well established customer base in the UK, including names such as Black and Decker, Triumph Motorcycles, Ford Motor Company, Sharp Electronics, Hotpoint and many other well known market leaders who are operating in the manufacturing, aviation and engineering industries. LINDY International Ltd: LINDY is a leading supplier of computer connection technology worldwide, but their international headquarters remain at Teesside Industrial Estate, in Thornaby.

12


COMPETITIVE BUSINESS STRATEGY Analysis of Industry Structure (Porter’s Five Forces) Threat of New Entrants The barriers to entry into this sector are high as Dukesway is the only cafe allowed to trade within Teesside industrial estate (as stipulated by England Estates Partnership, the current landlords of the estate). Therefore competition for their day-to-day custom is non existent. If however, we choose to expand into outside catering we will of course be competing with other dedicated catering companies, but word of mouth and our continuing presence within the estate will afford us the advantage. The only issue would be if a catering facility was set up directly outside the estate, and given the area this is extremely unlikely and would be too far a distance to travel by foot thus making the proposition less attractive. There is a small burger van operating on a layby outside the estate, but this targets more passing trade and therefore does not compete directly with Dukesway Cafe. Threat of Subsitute Products As the product is hot/cold food there is no real threat of different products filling the same need within the same area. As above there is a restriction also to companies of a similar nature trading in the estate. Power of Buyers The threat of buyers of our products is very low as buyers are primarily individuals from the local workforce. These individuals have little or no control over how we structure our products and prices. Power of Suppliers The power of our suppliers is weak as there are a large number of suppliers and intense competition between them. Rivalry Amongst Existing Players Again this comes back to the current restriction of allowing similar outlets to trade in the industrial estate. Our rivals are effectively Cafes in other industrial estates and as we cannot serve their clientele and vice versa then competition is non-existant. SWOT Analysis The internal Strengths & Weaknesses of the company and the External Opportunities & Threats, can be summarised as follows: Strengths Established and profitable business for 25 years Full commercial cooking range and catering facilities Experienced management (in both catering and business) Ability to conduct marketing and advertising in-house Weaknesses Limitations for spatial expansion

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Opportunities No competition in area Scope to increase business hours Scope to provide outside catering for functions No current promotion or advertising activity Brand identity is non existant Threats The landlord revoking the restriction on Cafe type businesses in the area in the future Our strengths will allow us to exploit opportunities in the market: Our experience in the field of catering and business will allow us expand upon the current trading hours and introduce outside catering for both business and private functions. Our ability to provide marketing, advertising and design in-house will allow us to promote the Cafe cost-effectively whilst also enhancing the brand identity of the Cafe through internal marketing activities. We are mitigating against weaknesses and threats: Although the threat of revoking the restriction on the cafe type businesses exists, this would not be in the landlord’s best interest. An industrial estate relies on industrial and heavily commercial companies to prove successful - a glut of Cafes in the area would detract from that and will not attract outside investment and other businesses to the estate. Our limitation for expansion within the estate may be overcome by investing in an additional unit dependent upon our requirements.

14


MARKETING PLAN Brand identity The brand identity for the cafe is currently non-existant so we would be looking to produce a new logo and identity in the first instance. We would not need to bring in the services of an outside advertising, design or marketing agency as we have the personnel to execute all this in house. The new image can then be carried through to a variety of mediums including: Exterior signage Van Livery Menu designs Any subsequent advertising or promotional literature Interior decor Cafe uniforms An idea of a brand identity we may choose to adopt can be seen on page 17. To see how this identity translates into a menu please refer to the design proposals in the appendices section. Internal Restructure The current setup has ample storage and kitchen space, although there is potential to optimise this further to enable us to introduce more stock and therefore offerings to the customer. We will be looking to restructure the store room to house the fridges and freezers whilst also introducing additional shelving and cupboard space to make the most of the available area. The kitchen area will also be revised to help increase storage space and introduce more cooking/heating/chilling facilities and a larger display area - this will allow us to provide more snacks and drinks (elevenses) which in turn will prompt existing customers to buy more. In making better use of the storage space we then have the capability to introduce a double-width Coca-cola drinks freezer that is accessible to the customers. See pages 18 thru 21 for further details and proposed plans for the restructure. Electronic Till System At the moment Dukesway operates a fairly standard till to manage the takings. With Stephen having introduced a more sophisticated system at his convenience store, we will be looking to introduce a similar one to the Cafe. This system will enable us to manage the stock and also experiment with different products and foodstuffs to see which are the bestsellers and which are not. This gives us the ability to constantly refine the stock as a route to increasing profit margins. Promotional Strategy As the Cafe already has a good and profitable trade through 25 years of word-of-mouth, advertising the cafe to businesses in the area would not prove cost-effective. The enhancement of the exterior signage and the van livery itself will help attract more passing trade and will provide curiosity value to existing customers.

15


With regards to the outside catering facilities however, then marketing and advertising will prove necessary. This will be done through advertising on the premises (through posters and on the takeaway menus) and a door drop leaflet to all the businesses on the estate. This is an effective and inexpensive way of promoting the new service. We will also be experimenting by extending the current opening hours. This will be for a set-trial period and all the businesses on the estate will be made fully aware of this through a mail-drop. Public Relations Once the new identity is established, the internal restructure is complete and we are ready to launch the outside catering arm of the business, then a press release would be drafted and sent to the local papers for possible inclusion in the business sections. This would help raise the profile and awareness and may even allow us expand the delivery aspect of day-to day trading by employing an additional driver/vehicle. This would also benefit the outside catering side as we then have the transport capabilities for bigger functions.

16


REVISED BRAND IDENTITY Design Rationale:

Bow tie and waistcoat illustration on cup: signifies both waiter (food delivery and service) and a nobleman (or 'Duke').

Sandwich and Tea: signifies both hot & cold food and beverages

S W E K AY U D

Arch: symbolises strength and support, bridges.

®

White / black diamond chequerboard pattern associated with chef clothing - symbolises quality food.

DUKESWAY ®

Yellow / Red colour scheme Taken from AIGA (American Institute of Graphic Arts) www.aiga.org "Why do we use red and yellow to alert us to fast food and danger? Red/yellow says, “The food’s good here and pretty cheap, too," "The uniformity of the global McDonald’s brand has likely colored the brand of global fast-food. The widespread use of red and yellow may reveal less about the peculiarities of our culture and the neuroscience of our vision than it does about the economics of our habits."

DUKESWAY ®

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INTERNAL RESTRUCTURE Current Layout The existing layout of the Cafe provides extensive kitchen and cooking facilities, 42 covers, a store room and toilet/washroom facilities. Although these facilities are comprehensive, the current awkwardness of the working environment make it difficult for the staff to be organised and work efficiently. Our task in the first instance is therefore to establish the main roles within the kitchen and to design a new layout for the kitchen around these. This will enable all the roles to be carried out far more effectively than at present as well as providing a far better and enjoyable working environment. This also has the added effect of helping us serve customers far more quickly whilst also helping us to utilise the current workforce far more efficiently. All this will enable us to cater for increasing business throughput without the need to employ further staff - therefore generating more profit with the same (or perhaps even less!) overheads. As Miss Stephanie Bytheway is currently working in the Dukesway Cafe, she has had first-hand experience of the current working environment. From this we have been able to collate a preliminary listing of the primary job roles within the Cafe. This has subsequently helped us to produce a couple of draft plans to redesign the space to provide optimum operation of the Cafe. The individual roles within the Cafe we have identified as follows: Job Role

Job Description

1

Cooking (Specials)

Cooking , preparation and maintaining the day's specials.

2

Cooking (Breakfasts/Main Meals)

Cooking , preparation and maintaining all breakfasts and everyday meals.

3

Serving

Serving all incoming customers.

4

Managing Orders

Taking phoned/faxed orders and maintaining and prioritising schedules for deliveries.

5

Order Preparation

Preparation of all orders using the prioritised order schedule as above.

6

Deliveries

Making deliveries to all the local businesses.

7

Pot Washing

Cleaning all pots, pans, crockery and cutlery.

8

Till Operator

Managing and operation of the till and payments.

9

Health & Hygiene

Maintaining a clean and healthy working / customer environment.

10

Manager

Making sure all the above roles are being carried out efficiently and with diligence.

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Washbasin & Drainer

Toaster

Coffee /Tea Machines

Gas Hob & Oven

Griddle Plate

W/C

Deep Fat Fryer

Orders Table

Till

Microwave

Outside Gravel Area

Store Room plus Fridge/Freezers

Food Prep Table

Handwash Basin

Bain Marie

Freezer Unit

Telephone Ordering

Cutlery Tray

Hot Plate Food Display

Small under counter display unit

Food Chillers and Pie Warmers

Fridge Unit

Staff Entrance

Main Customer Entrance

Current Layout This shows the store room, fridge and freezers separate from the kitchen which is a undesirable layout. We intend to extend the kitchen area and integrate all appliances and fridge/freezers into the new layout as well as optimising storage by utilising space more efficiently above and below the worktop areas.

19


Washbasins & Drainer

Spare worktop plus add. storage (possible dishwasher)

Gas Hob & Oven

Griddle Plate

W/C

Taking & Preparing Orders

Handwash Basin

Bain Maries

Deep Fat Fryer

Coffee /Tea Machines

Toaster

Storage above and below (inc Microwave)

Overhead Menu Display

Pull out (hinged to wall) workspaces

Fridge

Misc Storage

Fridge

Chest Freezer

Cooking Prep

Specials Board

Till

Snack Display (Under & On Counter)

Pie Warmers

Hot Plate Food Display

Cold Food & Sandwich Section

Sandwich Prep & Order Collection

Bain Maries (for orders)

Outside Smoking Area (for future regulations)

Staff Entrance

Cutlery & Condiments Island

Health & Safety Certificates etc

Main Customer Entrance

Advertising Board

Daily Newspaper Rack

Feature Wall

Proposed Layout 1 This proposal removes the original storage space thus allowing us to extend the kitchen space. By introducing more Bain Maries to the centre of the kitchen, food can be kept hot and ready prepared for serving and orders rather than taking up valuable hob and oven space used by the the cooks. We have created separate food prep and sandwich/order prep areas whilst still being able to integrate all existing appliances. Plus we have created valuable and effective storage space with all utensils and crockery items immediately to hand.

20


Washbasins & Drainer

Spare worktop plus add. storage (possible dishwasher)

Gas Hob & Oven

Griddle Plate

Bain Maries (for orders)

W/C

Fridge & Freezer

Hob & Oven

Misc Storage (inc crockery)

Coffee /Tea Machines

Toaster

Storage above and below (inc Microwave)

Overhead Menu Display

Specials Board

Storage above and below

Main Till

Separate Cooking Area & Taking Orders

Health & Safety Certificates etc

Cutlery & Condiments Island

Outside Smoking Area (for future regulations)

Tel/Fax Ordering

Delivery Till

Snack Display (Under & On Counter)

Pie Warmers (under counter)

Hot Plate Food Display

Cold Food (Chillers) & Sandwich Section

Order Collection

Hot Food Preparation

Storage above and below (inc warmer for orders)

Order Schedule plus timers (for Prioritising)

Handwash Basin

Bain Maries

Deep Fat Fryer

Fridge & Freezer

Sandwich & Order Prep

Pull out (hinged to wall) workspaces

Staff Entrance

Main Customer Entrance

Advertising Board

Daily Newspaper Rack

Feature Wall

Proposed Layout 2 This proposal creates even more space than the first proposal by introducing a second cooking area where the store room use to reside. This provides more cooking facilities as well as a separate area to handle and maintain incoming orders which is an invaluable addition to aid an efficient workspace. Several key points to this plan include an individual Bain Marie for orders, a second till (if required) for processing these orders, a bigger order/sandwich preparation area and an additional hob/oven.

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FUTURE PROSPECTS Short-Term (1 year) Year one will be spent consolidating the existing business and improving profits by: Enhancing the existing layout to provide more storage and display space Introducing more products such as snacks and elevenses Invoking a price increase of 5% across all items Improving business operations Implementing a new brand identity Experimenting with longer trading hours Medium Term (2-3 years) Year two will be looking to build upon the first years work by: Providing outside catering for business and private functions Expanding delivery service to outside the industrial estate Investigating ways and means of increasing trading space on the estate Long-Term (3 years +) After year three we should have paid off the original purchase loan and income from the business can then be used to constantly refine the business and maintain it to the highest standard (As expansion of the business within the estate could be limited) as well as providing us with a regular income. We then have the freedom to either keep the business, thus generating income or sell the business as a going concern for a profit. We may also look to purchase Cafes in other local business parks/areas such as: Preston Farm Industrial Estate (Yarm) Teesdale Business Park (Stockton) Kirkleatham Business Park (Redcar) Belasis Business Centre (Billingham) Wynyard Business Park (Billingham) Thornaby Airfield Industrial Estate (Thornaby) By implementing what should be a successful business operation at Dukesway to other prospective Cafes (situated in said business parks) we ensure a recipe for future success and growth. We could even choose to make the Dukesway Cafe an operational model and franchise it so other people can adopt this model for their own Cafes in similar industrial/business parks - we would get a fixed fee for the Franchise and a % of the profits.

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FINANCIAL INFORMATION Price of business £78,000 plus SAV (Stock at Value). Note that SAV will be negligible (less than £500). Finance requirement: With the Dukesway Cafe being a leasehold business, most lenders will only consider financing up to 60% of the purchase price* - even at this level, all the major high street banks are reluctant to lend on these businesses as there is no freehold security element and therefore their perceived risk is far greater. Interest rates from 'specialist' lenders require additional security (in the form of property) and the interest rates from these lenders can be anything up to 36%pa (3% per month). It is with this in mind that we approached the current owner about recourse owner financing. This method of financing would involve us providing a deposit of £25k with the remaining £53k of the purchase price being paid to the owner over a three year period - so effectively they are the lenders. If we were then to default on any of the monthly repayments of the loan then the ownership of the cafe would revert back to the original owner, this is their security for providing the loan. A 6% interest on the loan amount will be charged as this benefits both parties - the owner gets interest on their loan at a higher rate than any savings accounts on the market and we as purchasers get an interest rate lower than if we were to go to an individual 'specialist' lender. *Purchase of a Leasehold Business (http://www.nationwidebusinesses.co.uk/finance/index.asp) Lenders will consider finance up to 60% of the purchase price or 50% of total ingoings (whichever is the lower) using the business as the sole security and with the loan repaid over two-thirds of the unexpired period of the lease subject to a maximum loan repayment period of 10 years.

Business Purchase Cost of Business: £78,000 Deposit: £25,000 Loan (from current owner): £53,000 £53,000 borrowings repayable over 3 years at 6% (1% over base) Total payable over three years: £83,044.96 (includes £5,044.96 interest charges) Payable per month: £1,612.36 Cashflow Forecasts Looking at the Cashflow Forecast on the following page we can see that the current profits (using the £3,300 pw sales figures) equate to £1,789.41 pcm. As the loan amount would be £1,612.36 pcm we effectively have an extra £177.05 per month. However a margin of £177pcm is tight so we would therefore be aiming to increase this from the outset to one that proves more comfortable for financial operation of the cafe. This can achieved through several ways and means: For one, upon completion of the business purchase certain expenditures will cease immediately. These include bank charges, bank interest & loan interest - this will effectively increase our margin by £198.81pcm. For our 2006 forecast, two wage bills have been removed (the current owner and Irene) and one has been added (Miss Stephanie Bytheway). We believe that the changes we will make to the business operation 23


will allow this new staff structure and hourly work rate (approx 130 hours per week) to be more than effective. Any additional staff will be incorporated into this new structure on a part-time, rotational basis. This removal of one wage bill will effectively create £715 extra per month. The current owner has yet to enforce her annual price increases, choosing instead to delay it for the new owners to implement. By adding 5% across the board this would take our weekly takings (sales) up to £3,465 - this is a conservative figure as it does not account for our planned introduction of outside catering. We have also included £10 per week in advertising income as there is currently an advertising board in the Cafe, but the current vendor does not charge for this service. Taking to account changes to the value of stock (43.36% of new sales figure) we find that these changes will generate an extra £448.32pcm. Putting these revised figures into our forecast we can comfortably achieve a weekly profit margin of £727.28, which in turn equates to a monthly profit of £3,151.55 – a figure that is some £1,539.19 more that the proposed loan costs of £1,612.36 for purchasing the business.

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Cashflow Forecast (incorporating 2005 profit and loss account figures) 2005

2006 (forecasted)

Takings (Sales)

£3,300.00 (as per sales particulars)

£3,465.00 (Conservative value)

Advertising Revenue

£0.00

£10.00

Total Income (per week)

£3,300.00

£3,475.00

£1,430.88

£1,502.42

Wages (Glenda 26 hours)

£130.00

£130.00

Wages (Irene 18 hours)

£90.00

£0.00

Wages (Debbie 31 hours)

£155.00

155.00

Wages (Lorraine 29 hours)

£145.00

£145.00

Wages (Lisa 20 hours)

£100.00

£100.00

Wages (Steph 25 hours)

£0.00

£125.00

Wages (Keith - Driver)

£200.00

£200.00

Wages (Janice - Current Owner)

£200.00

£0.00

Rent, Rates & Water

£185.17

£185.17

Insurance

£16.25

£16.25

Light & Heat

£56.98

£56.98

Office Expenses

£10.60

£10.60

Repairs & Renewals

£10.32

£10.32

Printing, Postage & Stationery

£1.19

£1.19

Telephone

£3.04

£3.04

Motor & Travel Expenses

£41.69

£41.69

Legal & Professional Fees

£5.56

£5.56

Accountancy

£11.54

£11.54

Bank Charges

£9.53

£0.00

Sundry Expenses

£31.88

£31.88

Depreciation in Fixtures & Fittings

£11.57

£11.57

Depreciation in Motor Vehicles

£4.51

£4.51

Bank Interest

£0.75

£0.00

Loan Interest

£35.60

£0.00

Total Expenditure (per week)

£2,887.06

£2,747.72

Net Profit (per week)

£412.94

£727.28

Equivalent Profit (per month)

£1,789.41

£3,151.55

Equivalent Profit (per year)

£21,472.88

£37,818.56

Income (per week)

Expenditure (per week) Stock (@ 43.36% of Sales)

25


APPENDICES Current Dukesway Menu Snack Shack Menu New Menu Designs SBS Sales Particulars Health & Safety Leaflets Curriculum Vitae - Mr Stephen Osbourne Curriculum Vitae - Mr Stephen Bytheway Curriculum Vitae - Mr Daniel Scott Pinkney E&P Press Release E&P Accounts & Financial Profile E&P Design Portfolio

26


APPENDICES Current Dukesway Menu Snack Shack Menu New Menu Designs SBS Sales Particulars Health & Safety Leaflets Curriculum Vitae - Mr Stephen Osbourne Curriculum Vitae - Mr Stephen Bytheway Curriculum Vitae - Mr Daniel Scott Pinkney E&P Press Release E&P Accounts & Financial Profile E&P Design Portfolio

25


The Snack Shack

502422

2 Kestrel Avenue, Boyd Estate, Middlesbrough.

502422

Tel. (01642) 502422

Opening Hours: Monday to Friday 7:00 am to 2:00 pm, Saturday 7:00am to 12:00pm

Breakfast Menu

Burger Menu

Full Breakfast (Egg, Sausage, Bacon, Beans, Toast)

2.40

Full Monty (as above plus Blackpudding, Mushrooms, Onions) Bun

3.00

Fadge 1.85 1.85 1.75 1.45 1.85 1.75

Stottie 1.95 1.95 1.85 1.55 1.95 1.85

Breakfast Bacon 1.10 Sausage 1.00 Egg 0.90 Bacon & Egg 1.40 Sausage & Egg 1.40 Extra Portions Black Pudding, Tomatoes, Onions Bacon 0.60 Sausage, Egg, Mushrooms

Beefburger

1.15

Cheese Burger

1.60

Egg Burger Double Burger With Chips

1.60 2.60 1.20

extra

Chips Small Tray Large Tray Chip Stottie Chip Splash

0.50 0.50

1.00 1.30 1.60 1.90

Sandwich Menu (Salad Included) Egg Mayo Ham Corned Beef Beef Turkey Cheese Cheese Savoury Tuna Tuna & Sweetcorn Salad Seafood Chicken Mayo Chicken Tikka Coronation Chicken Chicken\Sweetcorn

Bun 1.20 1.20 1.20 1.20 1.20 1.20 1.25 1.20 1.25 0.85 1.45 1.45 1.45 1.45 1.45

Fadge 1.55 1.55 1.55 1.55 1.55 1.55 1.65 1.55 1.75 1.00 1.95 1.95 1.95 1.95 1.95

Stottie 1.65 1.65 1.65 1.65 1.65 1.65 1.70 1.65 1.75 1.30 2.10 2.10 2.10 2.10 2.10

Pre-Packed Sandwiches Cheese & Onion Cheese & Pickle Egg Mayo Egg & Tomatoe Tuna Ham Beef Turkey Corned Beef Chicken Seafood Salad Prawn Salad Cheese & Spring Onion Or made to order

1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.55 1.00 1.35 1.25

Mince Pie (small) Steak Pie (large) Steak Pie (small)

0.95 1.15 0.95

Shepherds Pie Scotch Egg Quiche

1.35 0.65 0.95

Pastries Menu Cheese Pasty Cornish Pasty Savoury Pasty CornedBeef Slice Sausage Roll (small) Mince Pie (large)

0.79 0.79 0.79 0.95 0.65 1.10

Jacket Potatoes with One Filling and Salad Extra Fillings -

1.70 / 175 0.60 / 0.75 1.10 / 1.20

Cheese, Beans, Coleslaw, Sweetcorn Chilli Con Carne, Chicken Curry

Chips with Chicken Curry or Chilli Con Carne

2.65

Lasagne with Chips & Peas or Salad

2.95

Various Various Cakes From Fruit Pie (small) Cream Cakes from Bakewell Tart Giant Muffins Crisps Quavers

0.45 0.45 0.60 0.50 0.75 0.40 0.45

Tea or Coffee Canned Drinks

0.50 0.60

Mars bar Snickers Kit Kat Drifter Twix Boost Toffee Crisp

0.45 0.45 0.45 0.45 0.45 0.50 0.45

Flap Jacks

0.80

Refreshments Bottled

0.60 0.89

Orders Welcome by Telephone prepared to your Specific Pick Up Time

Oxo Soup

0.50 0.80


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£2.00

Small Breakfast

LUNSPCEHCITALISME

Large Breakfast

£3.00

2 bacon, 2 sausage, egg, black pudding, beans, tomatoes, hash brown & toast

£3.00

2 Ham, 2 egg, chips and beans

£3.00

£3.00

Quiche, chips and beans

£2.50

Quiche, chips and salad

£2.50

Half chicken with chips

£3.00

2 Sausage, egg, chips and beans

£2.50

2 eggs, chips and beans

£2.00

Cottage pie with chips

£3.00

Chips

£1.00

Chip bun

£1.20

Chilli with rice or chips

£3.00

Pastries Homemade quiche

£1.00

Sausage roll

£0.50

£1.00

Steak pie

£1.00

Pork pie

£0.80

TUESDAYS

(Mushrooms extra - £0.50)

Bacon bun

£1.30

Sausage bun

£1.30

LUENVCERHYTDIAM YE Chicken Parmesan

MONDAYS Chicken curry with rice or chips

Bacon, sausage, egg, beans, hash brown & toast

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F -DAYAST BREALALK

Corned beef with chips

£3.00

Mince pie

Liver & chips

£3.00

Pasties (Cheese, cornish or corned beef ) £0.80

Mince & dumplings with chips

£3.00

WEDNESDAYS

Toasties Cheese

£1.30

Corned beef

£1.30

Cheese & onion

£1.40

Corned beef & onion

£1.40

£3.00

Cheese & tomato

£1.50

Corned beef & tomato

£1.50

£3.00

Ham & cheese

£1.50

Corned beef & cheese

£1.50

Chicken curry with rice or chips

£3.00

Sausage casserole and Yorkshire pudding with chips

Egg bun

£1.30

Splash of beans, onions or tomatoes

£0.20

Splash of mushrooms

£0.30

Any four breakfast items in bun

£2.00

Any six breakfast items in large bun

£3.00

Corned beef stew, dumplings & chips

£3.00

Burger

£1.20

Cheeseburger

£1.50

3 scrambled eggs on 2 toast

£1.50

Chicken & vegetable pie with chips

£3.00

Egg burger

£1.60

Steakette

£1.50

Beans on 2 toast

£1.20

Half chicken with chips

£3.00

Crispy chicken

£1.50

B.L.T. (Bacon, Lettuce, Tomato)

£1.50

Toast

£0.15

2 giant hotdogs in bun with chips

£3.00

Jam or marmalade

£0.05

FRIDAYS

Fried bread

£0.20

Mince & dumplings with chips

£3.00

Beans, tomatoes, coleslaw, cheese, salad, sausage, bacon, egg, black pudding, breadbun, garlic mayo, curry sauce

£0.40

Tea

£0.50

Lasagne & chips

£3.00

Gravy or mayo

£0.10

Chicken curry with rice or chips

£3.00

£0.60

Coffee

Cottage pie with chips

THURSDAYS

Buns

Extras

KS & SNACKS DRIN

Extras Mushy peas

£0.50

Mashed potato

£1.00

Desserts

DUKESWAY TERING LTD CAFE & CA

®

Apple crumble

£1.50

Chocolate sponge

£1.50

Treacle sponge

£1.50

Sticky toffee sponge

£1.50

Tea Coffee Hot chocolate Cans Lucozade Semi-skimmed milk Flavoured spring water

In £0.50 £0.60 £0.60 £0.50 £0.80 £0.50 £0.50

Out £0.60 £0.70 £0.70 £0.60 £0.80 £0.50 £0.50

Still water Thirsty Cuppa soup Crisps Chocolate bars Cakes Wrigleys Extra & Polos

In £0.50 £0.50 £0.60 £0.40 £0.50 £0.60 £0.30

Out £0.50 £0.50 £0.70 £0.40 £0.50 £0.60 £0.30


SANDWICHES

ET POTATOES JACK (Order before 11am please)

Buns - Granary or White

£1.00

Plain

Corned beef

£1.20

Ham (country style)

£1.20

Fillings

Ham & cheese

£1.50

Margarine

£0.10

Cheese

£1.20

Mayo

£0.10

Cheese savoury

£1.20

Garlic mayo

£0.20

Tuna mayo

£1.20

Beans

£0.40

Tuna & sweetcorn

£1.20

Coleslaw

£0.50

Seafood mayo

£1.20

Cheese savoury

£0.50

Egg mayo

£1.20

Cheese

£0.50

Turkey

£1.20

Tuna mayo

£0.50

Turkey & stuffing

£1.30

Seafood mayo

£0.50

Chicken and sweetcorn mayo

£1.40

Chicken mayo

£0.60

Garlic chicken

£1.40

Garlic chicken mayo

£0.60

Chicken tikka

£1.40

Coronation chicken

£0.60

Chicken, bacon & mayo

£1.40

Chicken & sweetcorn mayo

£0.60

Coronation chicken

£1.40

Chicken and bacon mayo

£0.60

Chicken mayo

£1.40

Chicken tikka

£0.60

Please be aware that although our free delivery service will always try to be with you on time, sometimes it may not be possible to be exact. Please allow for this. Please place your order early to help us get your order to you on time and have your money ready for collection, this would be a great help. Thank you for your co-operation, The Dukesway Cafe team.

Dukesway Catering Service Whether you require outside catering for business (corporate functions, executive lunches, hospitality) or for private functions (birthdays, weddings, anniversaries) we can help. Call Stephen on 01642 760966 for further details. Food items are checked to make sure they are not genetically modified products. Only vegetable oil is used. All prices include VAT.

DUKESWAY TERING LTD CAFE & CA

®

*Thornaby Industrial Estate Only

FREE Delivery Service*


REF: 4721

DUKESWAY CAFE 64a Dukesway Teeside Industrial Estate Stockton On Tees North Yorkshire TS17 9LT

LEASEHOLD : £98,000 + SAV Location Dukesway Cafe is located in an enviable position within Teeside Industrial Estate, in Thornaby on Tees, which is south of Middlesborough. This is an exceptionally large industrial estate, situated next to the busy A19 trunk road, connecting Middlesborough to Thirsk and further south to the A1 and M1 motorway network. Nearby is a substantial housing estate and a number of primary and secondary schools.

Business History SBS Commercial is delighted to offer for sale this busy and profitable cafe/takeaway business, which was established in the mid 1980s and has been in the hands of our client for the past 5 years. The key to its success is that the landlord of the industrial estate, English Estates Partnership, does not allow any other similar businesses to trade in the area. Dukesway Cafe has a reputation in the area for quality food at value prices, which have remained static for a number of years. A telephone order line is available for all the neighbouring businesses, which keeps a full time delivery driver constantly busy. The premises are maintained to a high standard throughout, with

covers for up to 40 and there is a large open plan commercial kitchen on display. The current short opening hours offer tremendous scope to increase the turnover substantially, especially as the cafe has never had to advertise or produce any marketing material. Early viewing is strongly recommended to fully appreciate the potential this business has to offer. Financial Profile W/T: £3,300 approx GP: 60% Opening Hours Mon - Fri: 6.30am - 2.00pm Sat: 7.00am - 10.30am Property Details Single storey industrial unit converted to large cafe with open plan kitchen briefly comprising: Ground Floor Cafe area with: • Tables and chairs to seat in excess of 40 • Drinks chiller • Payphone Open plan kitchen with: • Stainless steel units and worktops • Extraction system • Full commercial cooking range • Hot plate food display • 3 x pie warmers • Food chiller display unit • Storeroom with chest freezer and upright freezer


• W/C and wash basin • 2001 Citroen 1.9 Berlingo van in full livery External • Parking available Tenure Leasehold Original length: Remaining length: Review every: Rent:

6 years 1 year 6 years £145 per week


69 26

41

TEESSIDE INDUSTRIAL ESTATE THORNABY-ON-TEES

27A 37

29 36

27 LIFTABLE

48

ARNGROVE

28A/B HARRISON PACKAGING

47

9 60 55

63

62

39

87

61

97

95

6

98

33 LINDY

2

10

59

85 84

71

49

32

91

12 96

38

70

5

16

44 35

39

52 76

THORNABY & MIDDLESBROUGH

18

73

46

15 14

78

77

99 86

1

88 89

72

79

13

67 45

22

66

64

S WAY E K U D TERING LTD CAFE & CA

65

YARM / STAINTON

INGLEBY BARWICK


DUKESWAY CAFE Prospective Purchasers: Mr Stephen Osborne Mr Stephen Bytheway Mr Daniel Scott Pinkney Dukesway Cafe 64a Dukesway Teesside Industrial Estate Thornaby-on-Tees Teesside TS17 9LT


Dukesway Business Plan