Writing a Business Plan for your Chocolate Venture
Travel with me as I struggle through the process of writing a business plan for my company, Nawtee's Chocolates. I am not a professional business writer, but, have been in business and cannot tell you how important this is. And, it's fun! I have started with particular segments that have to do with who and what my company is and offers, along with the market analysis, which is not complete yet. And, that is okay. Good things take time, and I will put the time into it.A business plan shows you how to prove the feasibility of your venture, layout your business strategy, and how to prepare your plan to convince investors that your company is right for them. I approached Clay with the need most start-ups have, the need of an adequate business plan, and how to do it.
In other forums, there are threads where folks talk about their experiences in start-ups, their frustrations of not making sales, or their products attractive to customers.I really believe that there are enough people on this website that could contribute immeasurably to this subject and invite everyone's participation. On another forum, we have taken a sample business plan and have prepared to go through all the segments together. Each one of us is applying this sample business plan to our own needs. Here is an example of what I have done so far with the Company Summary and the Marketing Analysis for my company, Nawtees Chocolates and will also do for Fourniers, a pastry interest.
The Marketing Plan is first, and I love this part. After I go through Products and Services, Promotions, Price, Place, customer Retention and Partnerships, I will deal with the Operations Plan, the Management Team, and the Financial Plan. There are many sub-titles, other categories that go with the above divisions, but, this is enough for me right now to start with.
Here are the notes for my Company Summary section:
Company Summary
Nawtees Chocolates is a start up business. It has no retail location at present, however, we prefer the Phoenix area. Our primary focus is locally manufacturing premium dark and milk chocolate, crafting artisan chocolates and French pastries.We offer, 70%, bittersweet ( bakers) and milk chocolate. Our range of flavors presently offers the customers a choice of 30 flavors and combination of flavors in their chocolates. Our categories are Truffles, Fudges, Bars, Nuts, Biscuits, and Molded Chocolates. We also produce French pastries, macarons, in 15 different flavors.We produce a seasonal line of chocolates which changes each year for season and each major holiday, thereby making the packaging collectable. Out macarons also have new flavors introduced primarily for three major holidays, Valentines, Easter, and Christmas,We can infuse any chocolate with any flavor that a customer requests. We sell our chocolate in a pound, pound and 1 pound blocks, wrapped in cellophane with designer art created by renowned Scottsdale artists. The label art is very upscale and collectible.We offer over 25, exclusive-to-us, uniquely sculpted chocolate designs that are produced by our artists. A unique line of chocolate postcards are also available to our clients.We sell premium chocolate gift baskets.Individually designed chocolates for a caterer, customer or corporations is available upon request.
Market Analysis Summary
The Chocolate Market
Annually, $408 million of premium chocolates such as Godiva, Scharffen Berger, Ghirardelli and local private labels are sold throughout America. Despite the 19% per year growth rate from 1996-2002, the U.S. chocolate market has not yet matured, leaving room for continued growth. Europeans consume twice as much chocolate as Americans, with a per capita consumption of 22.4 pounds vs. 12.2 pounds. It is estimated that the premium chocolate market will grow from 408 million dollars per year in 2002 to 1.2 billion dollars per year by 2005.
Market Segmentation
While we anticipate a split between locals and tourists, all members of our target market are between the ages of 25 and 60, and have a moderate to sizable disposable income.
Target Market Segment Strategy
Nawtees will provide the local upper-middle-class community with a place to socialize, indulge themselves with fine chocolates, find unique chocolates and gift baskets for gifts. For tourists, Nawtees will be a destination stop in their tour of the town, whether as a break from shopping, just want to drop by, or a place to buy unique gifts as souvenirs of their holiday.These customers will be glad to pay the premium price for our products in exchange for the high quality, great taste, and sense of prestige they receive. In fact, higher prices and exclusivity for some items may encourage higher sales - these kinds of customers eagerly accept the idea that higher prices equal higher quality, and want to buy "only the best," regardless of whether their palate is educated enough to appreciate the subtle differences.
Market Size
Locals
What is the population?
What is the percentage of 25 to 60 year olds?
What are the local income levels?
What % have pre-existing brand loyalties or economic constraints that would discourage them from visiting our chocolate shop?
What do they expect to find at a chocolate shop?
Would I want to include other products to draw customers, and if "yes, what?
Tourists
What is the tourist population in my area?
Are there any particular "tourist destinations" in my city?
What is the percentage of 25 - 60 years olds?
What is their income level?
Are they business tourists or vacationing?
Company Ownership
Who are the owners?
What kind of business experience?
Education?
Start Up Summary
Equipment and inventory will make up XXX of the startup requirements.
No lease agreement.
Owner is contributing the bulk of investment to the business.
Long- term Assets
Roasters
Coolers
Grinders
Santha
Conching
Molds
Other hardware and appliances
Short--term AssetsExpensed Supplies
Products and Services
Nawtees will specialize in premium chocolate, fine handmade chocolates, and gift baskets. Our full Nawtees experience is complemented by an assortment of unique, exclusive designs, all suitable for gift giving or indulgence for local customers or tourists. My goal is to be a destination store for visitors, and a resource for locals seeking baking chocolate and gifts, knowledge of chocolate.
Kinds of Chocolate
Dark, milk. Confections.(more to write on this later. covered elsewhere)
Pastries
We will offer French pastries, in particular, macarons. We have 15 different flavors and fillings.
Chocolate Paraphernalia
Chocolate items include, mugs, decorative chocolate tins, chocolate cookbooks and various small, seasonal, non-food, chocolate related items.
Gift Baskets
We offer a selection of pre-made gift baskets and will work with customers to create custom baskets for any occasion.
Service Business Analysis
What is the chocolate market like in .?
Where do people currently go?
Premium Chocolate Sales
In the Phoenix area, the premium and near-premium chocolate market is made up of ____ major competitors: Godiva, ______________. Godiva and __________ sell their products out of their own stores, while Lindt's products are sold through retailers such as Target. Lindt is beginning to expand in the market with 90 stores as of 2003. With the higher than expected growth rate in the premium chocolates market, retailers like Godiva are expected to open new locations. Due to the nature of the business it is hard to gauge the overall net sales of these privately held companies. Godiva, owned by Campbell, has reported that their sales in the confectionary division are $484 million. Their overall sales have remained flat with the exception of their Godiva division, whose sales increased by 9.7%. Lindt has reported that their chocolate sales world wide are expected to grow 7 to 10% a year with a high growth rate in the U.S., due to an increase in the number of stores.According to chocolate statistics, Americans purchase 3.1 billion pounds of chocolate a year. This translates into $13.7 billion dollars. Briefly stated, these outlets fall into the following categories:
Premium. Premium chocolate boutiques carry chocolates that are produced by the top manufacturers, such as Godiva. These companies have a small network of dealers or company owned outlets throughout the country who are chosen based on the high image of the outlet. Some outlets represent the manufacturer exclusively, others carry multiple high end chocolates. It is not unusual to find the chocolates selling for up to $2.50 per candy.
Boxed Chocolates. A step down from the first category, made up of retailers, Sees. They sell chocolates targeted to low to middle market buyers. A piece of chocolate sells for about .50 cents
Mass Market Boxed. These chocolates are sold through supermarkets, drug stores and departments stores, such as Wal-Mart. Russell Stover. The chocolates typically sell by the box for $13.00 to $15.00 dollars.Valentine's Day still means chocolate. Americans spend $1.06 billion for Valentine's day on candy, making it the third biggest holiday of the year for chocolates (after Christmas and Easter).Today, chocolate is not only for women. American men say they'd rather receive chocolate than flowers on Valentine's Day, especially those over the age of 50, which represents about ______________ in the Phoenix area. Sixty-eight percent of men age 50 or older say they'd prefer receiving chocolate over flowers from their sweetheart on Valentine's Day, while just 22% said they'd rather have flowers.
Okay, this is as far as it goes for this week. I start a new job next week, and will probably work more on the rest of the categories and the ones above that are not filled out. Gee, this means that I get to go to all the chocolate stores in town and sample! LOL! Got to know the competition!!!