THE GRIT CITY BAKING COMPANY A TACOMA ORIGINAL
2017 BUSINESS PLAN
WWW.GRITCITYBAKINGCOMPANY.COM
WRITTEN BY JESSICA DEVISSER
TABLE OF CONTENTS
01 Executive Summary 05 Company Description 08 Market Analysis 12 Competitive Analysis 14 Products 18 Marketing Plan 23 Organization 31 Operations 43 Financials
GRIT CITY BAKING COMPANY, LLC 1316 Martin Luther King Jr Way, Tacoma WA 98405 +1-253-315-5944 | jessica@gritcitybakingcompany.com www.gritcitybakingcompany.com
JUNE 2017
PAGE 1
EXECUTIVE SUMMARY
WHY THE FUTURE IS OURS TO MOLD YES. BAKERY PUN INTENDED. A piece of conventional wisdom about eating establishments is that 90% of them close in the first year. This is not true. In actuality, the failure rate for restaurants is comparable to insurance companies, landscapers, and automotive repair companies. It's practically impossible, statistically speaking, given industry growth rates of the leisure and hospitality sectors over the last half century, for this "fact" to be on point. With such an implied and disastrous statistic, it's a wonder so many entrepreneurs keep opening restaurants.
Once operational, GCBC will be the only large-scale producer of bagels (let alone true, kettle-boiled bagels) and rustic breads in Tacoma – with an accompanying French pastry, artisan coffee program, and catering. The nearest bagel competitors are in Lakewood, followed by Olympia and Tukwila, each over a 10minutes’ drive away or more. GCBC expects that its diverse product lines, community networking, creative marketing, and vigilant monitoring of food trends will result in a strong wholesale program, retail brand loyalty, and consistent catering clientele within two years’ time.
We are the Grit City Baking Company. We are, as our name implies, all about perseverance, resoluteness and baked goods.
Changing American perceptions of bread, coupled with the
Like other entrepreneurs, our drive is profit but our purpose is
emerging artisanal bread movement, are altering consumer
creation - jobs and business growth. The path to our bakery's
preferences and opening market niches. Large-scale, commercial
success is the limitless ingenuity, innovation and hustle of the
bread producers are losing significant market-share to small,
founders, and of course, our impressive baked goods that reflect
private bread companies, as consumers are choosing breads with
our passion for bread craft.
a higher nutritional profile, freshness, quality, limited and/or ecofriendly packaging, locally sourced ingredients, and few to no
Everything is intentional.
additives. Surprisingly, as progressive as Tacoma is, it doesn’t
The Grit City Baking Company produces kettle-boiled bagels
have a bakery to address this shift for either the individual or
(aka, NY style), rustic breads, French pastries, and other
wholesale marketplace – until now that is. As consumers turn
confectionery delights paired to consumer trends and analytic
away from the supermarket bread aisle in search of an alternative
reports. We bake to the people, for the people. We differentiate
that better meets their expectations, the Grit City Baking
ourselves from larger operations that bake to shareholders. Everything we are is all about local, fresh and artisan..
Company is positioned to provide both wholesale and retail access to the kinds of baked goods they’re looking for.
The Grit City Baking Company (GCBC) can confidently state "The Future is Ours to Mold" because the competitive field for our industry is empty with regard to bread bakeries in Tacoma and the surrounding area. Simply put, there is a complete absence of competition.
1. HTTPS://WWW.FORBES.COM/SITES/MODELEDBEHAVIOR/2017/01/29/NO-MOST-RESTAURANTS-DONT-FAIL-IN-THE-FIRST-YEAR/#6732B9DC4FCC
2017 BUSINESS PLAN
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EXECUTIVE SUMMARY
The Contenders
Revenue Projections
The Grit City Baking Company, “GCBC” for short, is a member-
Revenue projections for GCBC are based upon sales data gathered
managed, limited liability company based in Tacoma,
from Chef Geissler, Chef O'Neill and Shawn McManus, and
Washington. It currently has five member-managers and one
research of competitors – then adjusted for GCBC’s strengths,
non-member manager
location, and menu diversity. Additional market research of the U.S. Bread Industry yielded data that has helped guide, reinforce,
Pieter DeVisser -General Manager and Legal
and project the profitability of our venture. The resulting
Jessica DeVisser- Accounting and Customer Service
financial projections1 demonstrate first year profitability and
Chef Katie Geissler- Executive Chef and Master Baker
steady revenue increases. GCBC will concentrate on building a
Chef Jay O'Neill - Master Baker
revenue stream that is 35% retail and 65% wholesale, catering, and
Shawn McManus - Master Barista and Food Photographer
merchandising (combined). Building a strong wholesale and
Daniel Regelbrugge - Sales and Marketing
catering clientele will facilitate speedy revenue stabilization, longevity, and profit.
Collectively, GCBC managers have over four decades of Tacoma living under their belts and an intimate knowledge of the city’s
Our pre-opening marketing and sales have reinforced our figures
culture and business market, making them well-suited to develop
as orders and wholesale interest have been overwhelming, as well
and implement sales strategies that target Tacoma demographics.
as public demand for our products and opening date.
Chef Katie Geissler, Chef Jay O'Neil and Master Barista Shawn McManus are heavily connected in the Tacoma food industry network, while Jessica DeVisser, Pieter DeVisser and Daniel Regelbrugge bring backgrounds in project management, human resources, leadership, marketing, accounting and sales.
50 40 30 20 10 0
Year 1
Year 2
Year 3
Year 4
Year 5
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2017 BUSINESS PLAN
EXECUTIVE SUMMARY
Growth Projections
What was that part about failure?
We expect our growth rate to match or exceed that of the
Russian poet Fyodor Dostoevsky wrote "“There is not a thing
national bread industry and grow at a pace no lower than the
that is more positive than bread.” The only thing more positive
current economic rate, which is 2-3% a year. Our market
than our bread, is our profit potential. Profit is an outcome of
standing will be reinforced by strategic marketing, community
the success of our products, built upon all the ideas presented in
involvement, and attention to efficiency and sales analytics.
this business plan. Profit will flow naturally come producing
Additionally, we intend to promote growth by aggressively pursuing new sales avenues and working with local businesses to develop products and investigate niche baking opportunities. As of January 2017, GCBC has begun collecting Letters of Interest from local businesses to either provide pastry and bread selections or develop baked goods for specific menu offerings. Even before we’ve opened, revenue streams are manifesting. The Grit City Baking Company has plans for an aggressive preopening marketing campaign, as well as actively networking within the local business community. GCBC has membership in the Tacoma Chamber of Commerce, WILLO, the Tacoma Hilltop Business Association, the Washington Hospitality Association, and is actively attending workshops, seminars and meetings promoted by the City of Tacoma, University of Washington, and other pro-small business organizations. Networking and community integration are key components of remaining abreast of change and discovering business expansion opportunities. Capital Requirements At this time, GCBC requires $250,000 to round out our combined personal investments of $225,000. The majority of this funding is for the purchase and installation of our bakery production equipment – necessarily larger and more expensive than that of a typical retail bakery – to accommodate our primary focus on wholesale and catering activities. The remainder is allotted for working capital, marketing, inventory, research and development and pre-opening salaries. The Grit City Baking Company's permitting application is currently in review with the City of Tacoma permitting office awaiting approval. Our permitting layouts and architectural designs are available for review upon request.
products that evoke a visceral and emotional reaction in our demographic. Profit will happen by living up to the expectations put upon us by ourselves and our City. Failure, despite the saying, is always an option. But it's unlikely given our nature, our product and our plan. What we can be sure of, definitively, is there is no other company quite like us in Tacoma. And we're very okay with that because statistically speaking, 83% of businesses like ours succeed.
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2017 BUSINESS PLAN
COMPANY DESCRIPTION
Tacoma Origins COMPANY
DESCRIPTION
The Grit City Baking Company (GCBC) is an artisanal bakery
word of mouth, and subscriber services, such as
devoted to bringing the freshest, locally sourced, baked goods to
Trendhunter.com. It’s our belief that always seeking revenue
the Tacoma wholesale and retail marketplace. GCBC specializes
potential and maintaining vigilance on shifting bakery desires
in the production of old-world style, kettle-boiled bagels.
will ensure we stabilize revenue streams.
Supplementary product lines include European-style and rustic breads, as well as Almond Roca babka, challah, marble rye,
Location, Location, Location
purple grain and sourdough breads. GCBC will produce and
GCBC’s wholesale, catering, and retail operations are located at
market wholesale products to local area cafés, restaurants,
1316 Martin Luther King Jr Way Tacoma WA 98405, also known as
cafeterias, food markets, businesses, and coffee establishments
The King Building. The King Building was leased by GCBC from
for resale and/or integration into their respective products.
Roberson Properties September 2016. Our lease is a five-year
Retail sales of daily fresh-baked bagels, cream cheese, breakfast
modified lease, $1/square foot, with two five-year extensions. We
sandwiches, bagel chips, cookies, and rustic breads will occur
secured three of five possible retail spaces in the King Building
via a retail storefront, colocated with the production facility.
with First Right of Refusal for the remaining two spaces. Our
Catering is a natural extension of our retail and wholesale
current square footage is 7,489 square feet and includes a
activities, being that Chef Katie merged her existing catering
warehouse in the rear and sufficient space for a large production
business with GCBC and brings a hefty network of opportunities
area, as well as a small retail area. The rented space also includes
to diversify our revenue streams.
free street parking and 15 free parking spaces on the side of the building.
Additional lines of revenue include in-store merchandising, internet sales, residential and business food delivery, Pay-Per-
We are situated in the heart of the Hilltop Business District, a
Click (PPC) income from web advertising, online eLearning
Tacoma neighborhood currently undergoing a revitalization
events, and baking classes. GCBC devotes dedicated time and
after a long period of economic dormancy. Our location puts us
resources towards following food and consumer trends via
within walking distance of our three major demographics
social media,
(Tacoma Residents, Urban Professionals and City Visitors), as well as the expanding
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2017 BUSINESS PLAN
COMPANY DESCRIPTION
light-rail line (the “Link”, which is designed to run in front of
Location. The combined wholesale production and retail location
our building with stops a mere block in either direction) and a
is positioned very near our target markets: major businesses
large 200 tenant apartment complex that is slated to begin
(including both food service providers and those with large
construction two blocks away on MLK, in addition to more retail
numbers of employees), a major highway interchange, public
and tenant spaces planned in the next five years.
transportation, convention centers, farmer’s markets, hospitals, the University of Washington, the University of Puget Sound and
Job Creation
tourist locales.
The Grit City Baking Company is a registered State of Washington LLC/S-Corp. The company has five member-
Diverse Target Market. A diverse bread-consuming target market
managers and a non-member master baker who, together, will
exists within and around Tacoma for wholesale transactions
conduct day-to-day operations and strategic planning. The
with area cafés, restaurants, breweries, hotels, business
company is organized in a Functional Structure, that is, the
cafeterias, coffee shops, sandwich establishments, soup
grouping of manager and employees by function. An advantage
kitchens, food markets, and convenience stores. The operations
of the Functional Structure is that grouping jobs by skills and
and production processes we’ve developed will allow us to
knowledge enables a greater efficiency of human resources. Our
efficiently produce and deliver small batches of unique breads
first phase of hiring will include filling 25 full-time positions and
for area businesses looking to avoid the purchase limitations of
4 part-time positions, half of which will be entry-level retail and
larger, out-of-area commercial bakeries.
the other half professional-level baristas and bakers. Technologically Adaptive Processes. Technological innovations will The Grit City Baking Company’s overarching corporate goal is
be leveraged to allow us to manage inventory, project sales,
threefold:
control costs, and, most importantly, allow us to be a bakery that produces and sells old-world style bagels and breads while
1) Become a major wholesale supplier of breads and pastries to
maintaining maximum, real-time control and oversight of our
local area businesses;
operation – the lack of which significantly contributed to the
2) Become a destination bakery aiding in the draw of tourist
failures of now-closed bakers we studied. The Grit City Baking
trade in Tacoma, as well as building a core, devoted brand
Company plans to utilize the state-of-the art Clover point of sale
following;
(POS) system offered through our commercial bank, Wells Fargo,
3) Build a sustainable, profitable, legacy business that is a pillar
to track everything from employee time to sales, inventory,
in the community synonymous with bagels, artisan breads,
production schedules, deliveries, orders, and analytical data.
creative and delicious pastries, and exemplary customer service.
Further, our bakery floor will utilize interactive displays, tablets, and other smart devices that will not only allow the entire staff
Competitive Advantages
to remain connected to one another, but will also allow staff to
The barrier to entry is very low. The Grit City Baking Company
remain on-station, without having to stop production to get
will be in the position of being the only large-scale producer of
information or guidance.
fresh bagels and European-style and rustic breads in Tacoma. A lack of competition in the market will position GCBC for an
Well-Trained Personnel. The Grit City Baking Company is
immediate foothold in the community, allowing us to
nothing without capable people to complete the work. Early in
strategically expand our product line and customer base to meet
the process of building the company, the founders were in
existing and emerging consumer demands.
complete agreement that whomever is hired to fill each position, these will be people with talent that GCBC
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2017 BUSINESS PLAN
COMPANY DESCRIPTION
will invest in for continuity and longevity. They will be
multiple areas, including over 20 years of bakery and catering
individuals who believe in our product, are skilled at their tasks,
experience, nearly 20 years of barista and coffee development, over
and driven to learn, grow, and succeed with us. This means we
30 year’s combined project, program, personnel, and contract
are dedicated to our personnel. We have set aside funds allowing
management experience, and a plethora of organizational,
GCBC the ability to hire experienced staff, as well as to ensure
marketing, and team-building abilities. This management team
they receive additional training and professional development,
ensures meaningful redundancy and a tailored and intelligent
reach their own educational goals within our industry, and find
division of labor amongst individuals skilled in each area. This
purpose and growth within their jobs. GCBC will only be as good
enables GCBC to more efficiently tackle challenges by approaching
as its employees, and we intend to hire the best and most
them from multiple perspectives and then breaking them down into
dedicated by developing and implementing a robust battery of
areas of expertise that can be divided and assigned amongst
interviewing and aptitude assessments, coupled with providing a
supporting teammates according to their area of specialty.
living wage and benefits. Dedication to Improving Efficiency.Keeping our production and overhead costs down equates to our ability to consistently make an exceptional product that is priced competitively. To achieve this, we have studied similar businesses, both successful and unsuccessful. We’ve done comparative analyses and dissected our processes, examining potential weaknesses in our methods to make appropriate changes and mitigate risk. Due in part to the power of the Clover POS, as we progress, we will be able to analyze data that will allow us to see our business from different perspectives. Analytical reports available via Clover will enable GCBC to quickly identify such things as individual product demand, appropriate product price points, and the success or failure of promotions or a loyalty program. Clover will also allow GCBC to make immediate and enterprise-wide changes quickly and easily. The system itself will facilitate not only being flexible and dynamic in our methods, but will encourage us to remain forward thinking and focused on running the most efficient bakery we can. Diverse Management Skills. Running a business of this type requires an extensive set of skills. It would be impossible for one individual to have every necessary expertise to plan, produce, forecast, market, analyze, and problem-solve all facets of the GCBC operation. Our management /manager-member team is composed of five highly skilled and experienced leaders. They bring together expertise in
MARKET ANALYSIS
2017 BUSINESS PLAN
PAGE 8
Making Dough: 101 YES.
ANOTHER
BAKING
PUN.
The Baking Industry is a dynamic part of the U.S. economy,
Consumption Trends and Industry Cycles
accounting for about $311.0 billion in total economic output or
Perception is everything. There used to be a time in America
roughly 2.1 percent of the GDP.8 As of 2015, there were 2,800
when bread was a primary form of sustenance. With
commercial bakeries and about 6,000 retail bakeries in the
industrialization, bread became a battleground between
United States.9 Companies within this industry manufacture
commercial producers and neighborhood bakeries. Consumers
fresh and frozen bread and baked goods, including cakes,
have a love/hate relationship with bread, and it has moved
muffins and croissants, but excluding cookies and crackers.10
through a cyclical rise and fall as health fads, diets, and
Retail and wholesale establishments sell these products to
movements bring it into and out of esteem. Sales of staple bread
downstream supermarkets, convenience stores and food-service
products tend to wax and wane with American health and diet
providers, as well as direct to the public. Bagel Products
concerns. During the Atkins diet craze from 1995-2005, low carb
represent approximately 2% of total Bread Production in the
diets led to a 10% decline in sales of baked goods and
United States11 and are available to consumers either fresh,
ingredients.15
frozen or refrigerated via supermarkets, drugstores, mass market retailer commissaries and retail shops. In the US, the
Major bread producers spent upwards of 5 million dollars to
commercial side of the industry is concentrated, with roughly 50
combat the health trend and educate consumers on the benefits
companies generating 75% of the revenue. On the retail side, the
of whole grain breads. Gluten-Free breads began trending in
industry is highly fragmented, with the 50 largest companies
2010, and once again the Bread Industry was faced with
generating about 15% of the total revenue. The typical company
shrinking sales before rebounding by once again educating
operates one facility.12 Research by Experian showed that
consumers and expanding their offerings to include gluten-free
consumption of bagels in U.S. households from 2011-15 remained
products. Per a 2013 survey by Packaged Breads, Americans are
relatively unchanged. In 2011, consumption sat at 58% of U.S.
cutting out white breads and shifting towards whole wheat
households, and after some minor ups and downs throughout
breads in the biggest bread consumption shift in 10 years.16
the year, that number settled to 60.9% in 2015. When it comes to
Further, American’s are seeking out whole-grain, multigrain and
preference, consumers prefer fresh bagels, to refrigerated or
fresh baked goods at higher rates than other natural or organic
frozen7 with the percentage of people eating fresh bagels having
products.17
risen to 54.1% in 2013, from 49.1% in 2004. 13
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2017 BUSINESS PLAN
Bread is a nutritious, nourishing food, when made correctly. In its traditional state, the ingredients are simple and the creation process routine for capable bakers. Standardization of lower quality ingredients and production processes focused on speed alone have robbed Americans of a healthful item. Cheaper and faster isn’t always beneficial to the core product, especially when the core product’s appeal is based on an artisan-style of baking. Frozen may be convenient, but as Kellogg’s discovered, frozen bagels were less convenient than grab and eat alternatives, such as refrigerated or bread aisle bagels. But even these alternatives have lost much of their appeal when the recipes contain chemical additives and a steam-baked process that alters taste and texture of the product. More and more, consumers are choosing bread products based on factors that contribute to the well-being of their wallets and their health. Commercially produced bagels (fresh, frozen, and refrigerated) are losing market share, because consumers find chemical additives, vague or unknown nutritional benefits, and questionable ingredients off-putting. The research confirms that they will choose local, healthy, artisan alternatives, if available. Market Opportunities According to the Euromonitor, national retail sales of bread in the U.S. were $21.4 billion in 2010 and have been growing at a compound annual growth rate of 1.6% since 2006. Sales are expected to increase a further 2.3% in 2011 and, by 2017, should reach $23.6 billion. Traditional branded loaf breads are facing greater competition from private label and in-store bakery breads, likely due in part to their freshness and price (Mintel, 2011), and to unpackaged/artisanal breads, because they are perceived by consumers to be of premium quality and healthy.19 The Tacoma Market The City of Tacoma is a mid-sized, urban port city located in Pierce County, Washington. The population of Tacoma is 198,397 residents, which makes it the second most populated city in the Puget Sound area and the third most populated in the state. The composition of Tacoma residents is diverse. Per the 2010 census, there were 78,541 households, and 45,716 families residing in the city. The population density was 3,864.9 inhabitants per square mile (1,492.2/km). There were 81,102
MARKET ANALYSIS
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MARKET ANALYSIS
2017 BUSINESS PLAN
housing units at an average density of 1,619.4 per square mile
population of multiple target markets. Key figures regarding
(625.3/km). The racial makeup of the city was 64.9% White (60.5%
bread consumption demographics, core markets, and retail sales
Non- Hispanic White), 12.2% African American, 8.2% Asian, 1.8%
trends have been utilized to extract market indicators for bagels
Native American, 1.2% Pacific Islander and 8.1% were from two
and artisan bread consumption and to design marketing
or more races. There were 78,541 households of which 31.0% had
strategies. In the first three years of operations, our target
children under the age of 18 living with them, 37.8% were
markets include wholesale, catering, retail and merchandising.
married couples living together, 14.8% had a female householder with no husband present, 5.6% had a male householder with no wife present, and 41.8% were non-families. 32.3% of all households were made up of individuals and 9.6% had someone living alone who was 65 years of age or older. The average household size was 2.44 and the average family size was 3.10.
Of Note... New York magazine declared 2015 to be “the year of the bagel”. Food Business News points out that while the frozen bagel market has been in a slump, fresh bagels sales are still climbing and account for over 85% of all wholesale bagel sales."8
The median age in the city was 35.1 years. 23% of residents were under the age of 18; 10.9% were between the ages of 18 and 24;
Almost 61% of Americans surveyed said they eat a bagel
29.6% were from 25 to 44; 25.3% were from 45 to 64; and 11.3%
at least twice a week for breakfast, a staggeringly high
were 65 years of age or older. The gender makeup of the city was 49.4% male and 50.6% female.
number when you look at the continental United States as a whole. Nearly 54% of these bagel eaters eat fresh bagels almost
The City is undergoing a period of rejuvenation, both
exclusively – so the market is telling retailers to forget
economically and socially. Current population predictions by
stocking up with frozen or refrigerated bagels and, instead,
Pierce County project a population increase of 40% between
order fresh baked bagels from a wholesaler and serve their
2016 and 203012. Other indicators of the changing city landscape include expansion plans for the local Link light rail system up to Martin Luther King Jr. Way, and a planned luxury apartment
customers what they really want. Only 4.4% of bagel sales are from mini-bagels – but they sell well in areas with kids so the market hasn’t
complex one block away from our target location.
completely given up on the mini bagel just yet.
Business-wise, the City of Tacoma has risen dramatically out of
77% of bagels are eaten as a main dish of a small meal.
a decade’s long economic slump. In the last 15 years, the downtown and business districts have transformed as Tacoma’s institutions have battled inequality by increasing community programs. The City continues to improve its prospects of drawing businesses to Tacoma that bring higher-paying jobs for residents. With the addition of anchor businesses such as State Farm and a burgeoning financial district in the downtown area, Tacoma has proven itself as a city with lot more to offer, with the expanding medical complexes, a well-established financial district, cyber-security firms and university systems. Our Target Markets The Grit City Baking Company’s location within the city of Tacoma affords it advantageous access to a large and diverse
Additions like butter, cream cheese, lox, and jelly are added 87% of the time. Over 75% of bagel eaters prefer their roll-with-a-hole warmed up, and will buy a hot bagel over a cold one.20
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2017Â BUSINESS PLAN
Of these markets, GCBC will focus on relationship and clientele development within the wholesale, catering and merchandising markets. Long-term sustainability of our bakery hinges on dependable revenue streams to augment any cyclical or habitual changes in the retail consumer market. Marketing and sales efforts described in later sections will outline our approaches and strategies to reach our revenue goals of 35% retail and 65% combined wholesale, catering, and merchandising.
words go here
MARKET ANALYSIS
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2017 BUSINESS PLAN
COMPETITIVE ANALYSIS
The Competition (SPOILER:
WE'RE
THE
BEST)
Our company goal is to acquire at least 90% of the fresh-baked
cream cheese. Their storefront in Lakewood is their only
bagel market in our target sales area and at least 50% of the
location for both production and sales. Their only active
wholesale artisan bread market within three years. Currently, in
marketing appears to be on local AM radio. They do sell a wide
the genre of artisan bakeries, Grit City Baking Company would
variety of bagels (20 or so). While their bagels are boiled prior to
be a monopoly. There are no direct bagel competitors in Tacoma,
baking, the finished product looks under-baked (pale and
nor is any local bakery offering start-to-finish fresh-made rustic
without sheen) and has the density and texture more akin to a
breads.
dinner roll than the New York-style bagel they purport to emulate. Research into historical reports for the store indicate
Competitors (Local)
an average annual revenue of $800,000.
Based on our concept, size, menu, and production projections, we identified two businesses in our local area that would be
Much like GCBC will be in Tacoma, Cascade is a monopoly in
classified as our competition.
Lakewood. While their bagels aren’t great, it is currently the only store in Lakewood producing freshly boiled and baked bagels. It
Cascade Bagels and Deli - 6115 Motor Ave., Lakewood, WA 98499 |
has successfully capitalized on lack of competition and lack of
Revenue $800k/year Cascade Bagels and Deli is the closest
comparison to embed itself in the Lakewood area as a New
competitor for bagels to Grit City Baking Company. Cascade has
York-style bagel producer. GCBC, on the other hand, will be in a
been in business for 23 years and has an average 4-star rating
newly renovated but long-standing brick building, on a major
between the 58 Yelp and 20 Google reviews. It is located
city street. Our planned location is equidistant (1.5 miles or 3-5
approximately 20 minutes/9 miles from our target location in an
minutes’ drive) from two major freeways within Tacoma’s
otherwise vacant strip mall, 3.6 miles (9-minute drive) away from
medical district and surrounded by residential area. We have
the nearest freeway, on a side street nearby a major Lakewood
plans for a robust marketing campaign that includes signage
intersection and the Lakewood Mall. Both the interior and
throughout the city, as well as advertisement via smart phone
exterior have a dated look and feel, with a very basic layout and
navigation apps, such as Waze. In addition, our master baker
bare-minimum style equipment, furniture, and décor. While
produces a significantly superior product. We expect to have no
they do have a website, it is static and only for information
problems monopolizing the bagel market in Tacoma and foresee
purposes. Cascade sells both wholesale and retail bagels and
potentially winning both wholesale and retail clientele away from Cascade.
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2017 BUSINESS PLAN
MARKET ANALYSIS
Corina Bakery – 602 Fawcett Ave., Tacoma WA 98402 | Revenue
entrenched position of the industry's major players. The Grit
$1.3M/year Corina bakery is a retail and wholesale bakery
City Baking Company acknowledges this fact, and has developed
serving artisan desserts with a concentration on glutenfree,
a business strategy to circumvent direct competition by
vegan, gluten free & vegan, and soy-free products. They are a
establishing ourselves in the community and aggressively
full-service bakery with an artisan coffee program and alcohol
marketing our unique products to local small businesses and
service.
consumers. We intend to promote ourselves personally to small businesses in our target sales zone, attracting them with
Corina is located approximately one mile from Grit City Baking
personalized products, flexible delivery options, favorable
Company, situated near apartment and condo buildings and
pricing and fresh baked goods.
next to a movie theater. There are approximately ten free parking spaces in front of the building and a paid parking lot
Barriers to Entry
next to the building. While the interior décor and concept is
The Bread Production industry is characterized by low barriers
relaxed and classic, with an obvious attention to detail, the
to entry. The primary threats that new entrants face is the well-
interior flow of the retail space is flawed. During busy times,
entrenched position of the industry's major players. The Grit
customers bunch up and cluster near the front counter, blocking
City Baking Company acknowledges this fact, and has developed
view of the pastries and congesting the entrance. Corina has
a business strategy to circumvent direct competition by
seating for approximately 50 customers inside and 15 seats
establishing ourselves in the community and aggressively
outside. Corina Bakery has a website, and they do accept some
marketing our unique products to local small businesses and
large orders via the website. However, the website is simple,
consumers. We intend to promote ourselves personally to small
plain and static. They do not appear to rotate images, invite
businesses in our target sales zone, attracting them with
customer reviews, nor accept small order and/or pick-up
personalized products, flexible delivery options, favorable
orders. Research into historical reports for Corina Bakery
pricing and fresh baked goods.
indicate an average annual revenue of $1,300,000. Current entrenched competitors. Some do a little of what we Currently, Corina enjoys a monopoly in Tacoma, as they are the
do, some do a lot. None of them to all the things we will.
only artisan, gluten/vegan bakery. Their menu, however, is limited and product quality is inconsistent. It is also slanted towards a specific customer who has food allergies or dietary restrictions. They do not serve bagels and the only bread they serve (a sourdough baguette) is a re-sale item from a Seattle bakery; no rustic breads are produced in-house. Competition (Non-Local) It is worth noting the number of thriving sweet-treat and dough-based businesses in Tacoma. The 253 is a town that enjoys its sugary pleasures and rewards such businesses with loyalty and consistent patronage. Hello, Cupcake Celebrity Cake Studio Wanna Cupcake? Johnson Candy Company OCD Candy Company Brown and Haley (Almond Rocca) Original House of Donuts Legendary Donuts Le Donut 3.4 BARRIERS TO ENTRY The Bread Production industry is characterized by low barriers to entry. The primary threats that new entrants face is the well-
Why We Can Beat the Competition
REVENUE
2017 BUSINESS PLAN
PAGE 8
Products, Revenue, Sales Strategies (A
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The Grit City Baking Company will derive revenue from four
tailored delivery schedules, specialized bread sizing, and scaling
main activities: Wholesale, Catering, Retail, and Merchandising.
orders to odd lots or sizes our competitors’ machines can’t
GCBC will concentrate on building a revenue stream that is 35%
produce.
retail and 65% combined wholesale, catering and merchandising. Building a strong wholesale and catering clientele will facilitate
In the presentation linked to above, we used a squirrel and their
revenue stabilization, longevity and profit.
one-at-a-time collection of nuts to demonstrate our sales strategy. Our movements will be deliberate, calculated, and
WHOLESALE MARKET OPPORTUNITIES AND STRATEGY
tailored to the Tacoma market, in order to steadily gain market
Building a strong wholesale portfolio is a priority for the Grit
share. Thanks in part to the extensive network Shaun McManus
City Baking Company. Wholesale contracts are key to long-term
and Chef Geissler bring to this venture, we already have several
sustainment and revenue stability. That being said, there is an
indications of interest from probable wholesale clients. Building
identifiable, although not insurmountable, barrier-to-entry for
on this, we have created a sales database that catalogs all
the Tacoma wholesale bread and pastry market – how to attract
businesses in our delivery zone and places them into categories
wholesale contracts while being a new, unproven bakery in a
by potential sales and types of products most likely to pair well
market of existing (though not local), large scale wholesale
with their businesses.
bakery suppliers. How do we entice area businesses to switch to a new, local, small business? Our wholesale strategy stems from
We will concentrate our efforts and set monthly sales goals
two questions we asked ourselves – What can we offer customers
based on this database to ensure we apply the right amount of
that current wholesale bread and pastry suppliers can’t, and how
effort in the most effective manner. Example: For large scale
can we take control of the Tacoma market? The answer to the
clients, such as supermarkets, hotels, convention centers and
first question is our strength as a small business and our focus
cafeterias, Jessica DeVisser and a member of the bakery staff will
on efficient production methods. While we don’t have the
schedule in-person visits, bringing samples and discussing a
factory-scale equipment and computerized processes of our
potential business agreement. For small drive-thru coffee
competitors, we do have strong cost controls, a well-planned
kiosks, mailers may be the best approach for first contact. The
kitchen, a large warehouse, and plans to hire highly skilled staff.
marketing firm we are working with will help guide our efforts.
We don’t have the tremendous overhead costs of a commercial
Our wholesale targets include local restaurants, cafés, cafeterias,
enterprise, and are more flexible when it comes to offering
catering companies, waiting rooms and markets. Our marketing
PAGE 11
2017 BUSINESS PLAN
MARKET ANALYSIS
strategy here will be focused primarily on how our location and
Residents
competitive pricing, coupled with the uniqueness of our
Residents are looking for a local hangout, within walking
foothold products and our ability to create tailored breads for
distance. They are also looking for increased variety when it
each business, make us a far better option than sourcing their
comes to eating establishments. Most importantly, residents
bread outside Tacoma. Reduction in delivery costs, flexibility in
currently have only one grocery store from which to buy their
delivery times, and a very small minimum order size should
bread products, without having to drive somewhere to do so.
make us a very attractive alternative. Many local food service
These will be focal elements of our marketing to residents. Many
businesses are trying to source locally, as this is something
residents prefer walking and the convenience of shopping while
consumers value highly. GCBC will be able to offer a local
doing so. Residents of this area, known as Hilltop, are also very
sourcing option that undercuts outside competitors.
proud of locales within Hilltop, so part of our marketing strategy will be dedicated to showcasing our Hilltop pride.
CATERING The Grit City Baking Company plans to offer catering services. Chef Katie has run a successful catering business for the last five years and brings that skillset, related equipment, and resources to our operations. Plans include continuing her current wedding cake and event catering, as well as expanding into corporate events (“Bagel Fridays”, monthly/quarterly meetings, offsite events, etc.), menu consultations, and private and company parties. Note: Chef Katie has already catered one event this year through Alexandra Nicole Cellers with more events tentatively scheduled in the next three months. A CATALYST FOR WHOLESALE Why focus effort on 35% retail sales, when the focus is on wholesale and catering? The most effective form of advertising our products and services will ultimately be through happy customers, and that customer base starts with individuals. Word of mouth propaganda is unparalleled, especially in our modern, social-media driven society. GCBC knows that the Hilltop is desperate for eatery alternatives, so we would be foolish not to focus at least some effort on capitalizing on individual consumer demand. More important, however, is the wholesale and catering clientele that will result from having a small retail area at our production facility, where we can showcase our foothold products, test out new product lines, and demonstrate our commitment to quality goods and services. LOCAL DEMOGRAPHICS We’ve divided our anticipated retail demographic into three subsets (Residents, Urban Professionals and City Visitors) to better categorize their characteristics, develop targeted products and pinpoint sales strategies.