Executive Summary

The purpose of this business plan is to provide a comprehensive description of HomeBake

Recipes and how to outgrow the business. Home Bake Recipes is an ongoing business that offers
wide selections of bakeries and local traditional cuisines. This family business has been in the
market for 20 years, they cater in big scale for different occasions and special events

The main objective of this proposal is to expand this business using strong marketing tools and
merge into the industry with a competitive advantage by using differentiation-based strategy. The
plan is to expand this business as a family business by outgrowing its distribution and enter the
industry as a premium product and engrave a good brand impression.

Vision

The vision of this plan is to increase the distribution channels where the customers are
within close reach to the Home-bake recipe products to grow its market share.

Mission statement

With a very consumer attractive marketing philosophy Home-bake recipes slogan is:

We make quality home-baked cakes because you deserve more than an ordinary cake

Unique Features: the owners of Home Bake Recipes, Sunny & Marry draws on
years of industry-specific experience for their solid knowledge of the world of bakeries, as
well as the people who consume them. Therefore, its nature distinguishes itself in this
manner by putting the needs of customers first.

Quality: quality is the main focus of the business. As the already existing home
based business had gained demand through the quality of the offerings our main target is
to sustain the good quality to merge into the lifestyle cafe industry.
 Dedication: as this business had started as a family business, the plan is to expand
it as a family business. This will enhance the founders interest to take risks to reach their
desirable goals and corporate with the management team to seize their opportunities with
full dedication to maintain the quality.

Concept: by differentiating its products from its direct competitors, the whole
concept of the plan is to hold the competitive advantage while providing a customer
friendly outlet.

Result oriented: with an effective management structure the outlets are to increase
in numbers as well as sustaining the good quality by good performance management and
customer feedback.

Marketing Objectives; Home bake Recipes set its marketing objective to increase
the efficiency of distributing its products and services to increase and maintain demand in
the industry. A highly visible location coupled with gala grand opening will yield
substantial "off-the-shelf" sales by increasing word-of-mouth advertising and foot traffic..

Expected Accomplishments: The objective of this plan is to break even within the
first year upon starting the first outlet and to invest on other outlets in the following years
Company Description
Home-bake recipe is a home based business established by two partners operating
from their home through internet. Home-bake recipe was founded by a couple named
Sunny and Mary and started it as a family business. Home bake recipe had already been a
success and they have gained a good portion of loyal customers. They gain their demand
from the quality of their cakes, pies and other savouries. Their products include different
types of cakes and other simple meals with good quality. Home bake recipes have a lot of
products that they offer, products ranging from cakes to pies and simple meals at
reasonable prices. The unique taste of their cakes is what captured the attention of the
already existing customers. They usually take big orders for different occasions and
special events. Their catering services are charged depending on the location of the
delivery not less than 10rm. The business is operated more on a big scale rather in small
quantity. As for now the business is home-based and cannot be reached if not for internet.
To make it reachable to the mass market, to give them the taste of their good quality
cakes, the business plan is to expand the business through outlets. The main purpose of the
outlet is to expand its distribution channel as well as to promote their brand name in order
to gain a good market share in the industry.

Industry Analysis

Analysis of business environment

Bangsar is one of Kuala Lumpur's most popular nighttime entertainment districts.

The streets of Bangsar, mainly in Telawi and Maarof, are littered with night clubs, pubs
and bistros, making it one party area during the weekends. Bangsar is also a large
residential area (mainly for the affluent) but residents have grown accustomed to the hive
of activity that Bangsar generates during the night. As Bangsar is home to many of Kuala
Lumpur's rich crust of society and expatriates, there are many fine dining and international
restaurants located around the shopping areas.(Bangsar Area Guide 2010)
 From previous illustration based on what is happening in Bangsar, there is an
opportunity for Homebakerecipes to expand its business, most of them are focusing on
entertainment and highly desirable beverages with expensive price, in this part of the
market homebakerecipes can use differentiation-based strategy which provide a friendly
place for people to relax, have a seat and enjoy tasty cake served with coffee or tea of
course in reasonable price. To set up reasonable price for customer is one of the strength
to compete in Bangsar, with the experiences in effectiveness on producing the product it
will be easier for homebakerecipes.

Future Trends

When people have a meal or look for the entertainment there is a limitation of
time, they don’t take meal every time and most of the entertainment in Bangsar is at night.
homebakerecipes can take advantage from those limit, most people can enjoy cakes
anytime they want even at night. By using this opportunity homebakerecipes can create a
trend for the customer, they can come anytime they want, don’t have to wait until night or
spent so much money for entertainment, this could be another option for the market or the
people, it could be the competitive advantages that homebakerecipes can gain from its
new market share. In the business aspect homebakerecipes have more “business time”
compare to the other competitor, the concept of the outlet which is customer friendly and
the reasonable prices allow people to come and visit more often. The meaning of more
“business time” is homebakerecipes has greater chance to get more customers in term of
the time when people are looking for a relaxation, not just to have a meal, and to fulfill
their needs is to serve them a tasty cake with a home friendly environment.

Market Size

When expanding existing businesses which already have their own market,
forecasting the size and targeting how much customer will company can actually reach is
important. Knowing their cultures and understand the consumer behavior on making
decision are vital for the business, what they usually buy in Bangsar, what kind of cakes
that people mostly like, those simple thing can be the company’s consideration for
making new products and services. After learning the environment it is necessary to look
 out the market size and segmentation of the population. Here is the information taken
from ABC Kuala Lumpur 2010:

Population of Kuala Lumpur - Approximately 1.8 Million

Foreign residents - 9%
People Below 15 Years - 27%
People Below 15 - 59 Years - 67%
People above 59 Years - 6%

Looking at the information above, average consumers go to the restaurant for

cakes and meals mostly about 70% (8% of foreign residents, 20% of below 15, 40% in
between and may be 2% of people above 59 years) of population in Kuala Lumpur. As we
know that Bangsar is a popular place for food in Kuala Lumpur there is no doubt that
homebakerecipes can gain at least 0.50% of the total population that go to Bangsar, it
means our expectation market share for starting the outlet business is about 5,000 people.

Demographic Changes

The location of Bangsar is a strategic place to start, its development shows a high
expectation of profit and bigger chances to expand a business compare to the other places
like Bukit Bintang or Ampang which already became one of the centre of Kuala Lumpur
that has strong competition.

On (Bangsar Review 2010) there is some information on the development in Bangsar,

which is “Most of the mid-range to high-class dining outlets are located within the shopping
complexes, Telawi Street and along Jalan Maarof. From these restaurants, one can find an
endless array of cuisine from around the world as well as local favourites such as Chinese, Indian
and Malay food. The restaurants attract many Caucasian expatriates who live in Bangsar.”
Competitor Analysis

Alexis Bistro

Uber-cool and uber-trendy, Alexis Bistro features Asian and Western fusion
delights in a super-chic environment. Complemented by an extensive wine list, its dishes
are ultramodern takes on classic favourites, and their presentations are often unique and
inspired. The bistro also features live jazz from local and international artistes. (Bangsar
restaurant and dining 2010)

One of the restaurant in Bangsar that provides cakes, it is indirect competitor and
they have different market segment.

Secret Recipe

Their popular cake are chocolate cakes and cheese cakes, it also provide local,
western and Italian food. The price is higher than standard but they already have trust and
brand image in the market. It is included in direct competitor, they have similar products
compare to homebakerecipes and they are also focusing on mass market.

Starbucks coffee

Well-known company with strong network and highly competitive in the market,
they specialized in making coffees but they also provide cakes. They can be direct
competitor in term of the business concept which provide friendly environment and place
for relax but totally different in setting the product prices. Starbukscoffe has high
expectation in the market because they are international company, in this part they
classified to indirect competitor.
Product Plan

The concept of the business plan is expanding home bake recipes by opening an
outlet by its brand name “home bake recipes” to introduce the products and increase
distribution channels, the outlet itself has its own style in structural design which create an
atmosphere of a lifestyle café to build strong competitive advantage for the business.
There are some adaptations for home bake recipes product to match with the new concept,
changing the scale or size of the products, provides new attractive menus and also
provides beverages as the complement for the cakes.

Here are the products that will introduce in the outlets:

• Butter cakes with cream (small size @ RM7)

200grams : German Chocolate, Moist Orange, Prune Cake, Mocha Praline, Moist

Chocolate

165grams : Almond Suji and Maryland Walnut.

• Butter cakes without cream (small size @ RM6)

187.5grams : Moist Orange and Prune Cake.

 150grams : Almond Suji, Butter Marble and Chocolate Nut.

• Fresh Creams Cakes (small size @RM7)

200grams : Toffee Banana, Chocolate Banana, Fruit-Top Cake, Black Forest.

145grams : Orange Chiffon and Rocky Road.

• Cheese Cakes (small size @RM8.25)

150grams : Chocolate Cheese, Marble Chocolate Cheese, Cappuccino Cheese,

Chunky Peach, Frutti Cheese and Chiffon Cheese

• Tray Cakes (small size @4RM)

Cashew Nut Brownie, Chocolate Macaroon, Nuts & raisins, Walnut Meringue, Lemon
Squares and Sesame Banana

Blueberry Cheese (150grams, RM8.50)

Tiramisu (125grams, RM10)

• Loaf Cakes (1 set)

Banana loaf 12RM

Cheese Tea Loaf 20RM

 Carrot – Sugar Free 20RM

• Pies (small size)

Chicken Pie and Beef Pie @2.50RM

Pumpkin Pie (100grams) @4RM

Apple Pie @2RM

• Cup Cakes

Cheese Cup Cake @1.80RM

Cheese Cup Cake with raisins @2RM

Chocolate Chip Muffins @2RM

Pumpkin Cup Cake @1.80RM

• Other Varieties of Cakes (small size, 100grams)

Carrot Walnut with cheese cream @5RM

Carrot Without cheese cream @4.50RM

Orange Chiffon Slice @4.50RM

Fruit Cake @4RM

Cheese Tea Cake @5RM

Yam Cake @4.50RM

Pandan Layer (130grams) @5RM

• Local food

Thai Laksa @7RM

 Assam Laksa @7RM

Mee Rebus @6RM

Siam Fried Noodles (vegetarian) @5RM

Curry Chicken @6RM

• Italian Food

Lasagna @15RM

Pasta @15RM

Risotto @15RM

• Western Food

Chicken Steak Burger @15RM

Chicken Chop @15RM

Beef steak @15RM

• Beverages

Fruit Juices @5RM

Milk Shakes @5RM

Bubble Teas @5RM

Services Analysis

A company like homebakerecipes which based on internet market only focusing

their services on delivering the products at the right time and place, when business goes
beyond that means its spreading the market share using outlets the business need some
spending on training the workers, find the right way to serve the customer and creating
new buying experiences to gain the competitive advantage. One of the ways to do that is
by providing a consultant or an event organizer to add extra value for the customer,
homebakerecipes can come up with a package of their products and include the service to
manage a special occasion or it can be a private consultation to solve customer problems
in housing a party, manage a birthday party, choosing the right food for the wedding
ceremony, etc.
Marketing plan

Market segmentation strategies

The bakery industy is a competitive industry to penetrate and stabilize as at a fast

speed. Yet with the demand Home bake recipes had established in the market the entry
wont be a problem. As the industry is growing and the competition is strong, the need for
this plan is to build a strong customer driven marketing strategy the market was
segmented into demographic, psychographic and behavioural segmentation. Demographic
segmentation is used to focus on the behaviour of the customers by their income level.

Consumers hold their purchasing power with the amount of income they
earn.however it is necessary to focus on the target groups income to determine the value
home bake recipes offerings. Home bake recipe plans to hold as a very good brand image
after the style of its penetration into the industry by its first outlet.the lifestyle café concept
is used to attract a pool of customers very much driven by trends, social class and lifestyle
or personality characters. so therefore this is psychographic segmentation.

The customer decision making process and how consumer’s willingness to

purchase increase and decrease is determined by the behavioural segmentation. for
occasions and special events ,the amount of money customers are willing to spend is more
than an ordinary day. Also there is a usage status in the buyers where market can be
segmented into light, medium and heavy product users, there fore this segment is studied
to target the customers who deals with sweet tooth or emotional eaters.
Target customers

home bake recipes main objective is to attract customers with the competitive
advantage in the quality of the cakes so the marketing strategy is to use the mix
segmentation bases to identify smaller better identified target groups.
Homebakerecipes already have loyal customers because of their quality in
producing cakes and the current market is from online website, there is actually bigger
market outside the internet scope. Here are new target customers that homebakerecipes
can gain from expanding its business by using concentrated marketing strategy:

Students – From middle school up to college students

Workers – middle paid to highly paid workers

Cake lovers – mass market (no limitation)

Marketing Mix

Product -

• Homebake recipes provides distinguish tasting cake as their most

competitive products.It is well known for the quality and therefore to
differentiate its product from the rivalry secret recipe the plan is to change
the old concept and approach with a pricing strategy to place it in the eyes
of the customers.

• Homebake recipes already set menu which is available on

www.homebakerecipe.com will be changed with a brand new set of
varieties added to best fit the life style café concept.the theme of this
concept is to attract the strong pool of customers by adding value to our
products and competiting with the range of variety choice available to
achieve a bigger market share.
 • With its well guarded home made recipes,home made recipes offer 46
different variety choices of cakes categorised into 8 sections.

• Other products available from the outlet that’s not on the current menu are
three varieties of western three varieties of Italian food Beverages ranging
from Bubble tea to Teh tarik and milk shakes. Home bake recipes menu
will gradually increase its products available with the demand from the
business environment

Future products

• Investing on the development of new products will take place once the
market share is established and as the demand grows. With heavy foot
traffic and the busy business environment the possibility of sustaining a
good demand is foreseeable within one year of operating the outlet.

• After operating the outlet half a fiscal year, Home bake recipe plans to
target a new segment of the market to differentiate its offerings. The
concern of health is growing all over the world. Home recipes plan is to
develop new products to customers with health issues and self esteem
issues. Therefore it plans to provide a varieties of sugar free and trans free
cakes in different flavours along with high fibre cheese cakes. This will
attract a whole new pool of customers and likely to capture more attention
in the bakery industry.

Distribution

• Through the retail shop located in Bangsar Home bake recipes will
distribute its products its products and it will also continue the old catering
business for special events and occasions. Small bookings and orders of
minimum two products will be made within 5km radius to the outlet.
Price

• As the industry outgrows and expand its wings with more competition the
price holds an important attribute to the purchasing power of the
buyers.with Homebake recipes new concept,the good value pricing strategy
is used is by offering the right combination of quality and good service.

• Home bake recipes prices are flexible and will be determined by a new
approach as it changes its scale of quantity sold to the value of one product.
In this proposal homebake recipe highlights its flexibility in pricing
because home bake recipes already set pricing strategies had been on
volume discounts, whole sale pricing and seasonal pricing.

Promotion

• Home bake recipe will conduct a promotional event to introduce the brand
a week before th outlet starts. Here home bake recipe plans to give away
free sample of cakes to get a hint of its good taste so to attract customers
will come back for it

• This event will be help infront of the home bake recipe premises with a
marketing concept of a product awareness programme.

• Flyers to be distributed in the Bangsar Village ,Help university college and

PBD.

• The catering services for occasions and special events will be delivered
more professionally with consultation sevices.

• Special promotional packages will be made for different occasions such as

moon cake festival, deepa wali and haree raya. Attracting customers of
different cultures to Home bake recipes offerings
Place

• Home bake recipes outlet will be located in the most hectic area of
Bangsar. Situated on the busy road of Jalan maarof, Home bake recipe
estimates a strong force of demand to grow because of its location.

• The location would be shown with the map on Homebake recipes site

Operations and development plan

Location

A good strategic location is very important when expanding the business through
an outlet. As its located in Bangsar which is a very fast business environment it will drive
a lot of customers into Home bake recipes. The floor area of our location is 2000 sq.ft
which will be designed to hold a back kitchen and the customer lounge.

Operational hours

• The operational hours of this outlet is from Sunday – Thursday 10am to 10pm

• The operational hours will be longer on Saturdays – 10 am to 12 am.

• Home bake recipes staff would be required to come in 1 hr before the operation
hours for necessary preparation
Operation

• Mary as the one main chef and cake baking and pastries.

• Hire an assistant chef to assist the the main chef and cook simple meals

• 3 full time staff , Diploma or with a hospitality and management background

• The staffs operate on shifts (night and day)

• Hire part time staff when full time staffs take leave

• One of the full time staff is assigned to the daily sales and cash management

• One if assigned to management of the inventory

• the other full time staff is assigned to deal directly with the customers

Supplier

• Raw materials are provided by the suppliers who has dealt with Sunny and
Mary since this business started

• Get discount when bought in large quantities as it will be because Home bake
recipes would need raw materials in larger bunk with the opening of this outlet

• Quality control

• 30 days credit term

Equipment
Management Team
Sunny & Marry are the founders of Homebake Recipes. This married couple had drawn 20
years in this industry. Both of the owners will handle the accounts, the purchase of raw
materials from suppliers and also in manufacturing the cakes. Upon opening an outlet
in Bangsar, they had come out with a personnel Plan.
Personnel Plan

HomeBake Recipes would like to hire one person for counter help, one person for delivery
services (Driver) and another assistant baker.

The table below illustrates the need of the current employees:

Position: YEAR of 2010

Marry - Head Baker RM60,000

New assistant baker - Part time RM12,000

Counter Help - Full time RM18,000

Delivery driver - Full time RM18,000

Sunny - Bookkeeper RM60,000

Total people 6

Total Payroll RM168,000

Risk
Description of the risk
 Every business faces risks in today's perpetually changing economy and market
environment, and Home bake Recipes will be no exception. The first identifiable area of
risk for Homebake Recipes will be its competition. Seven competitors have been in the
Bangsar market for a long time and are already well established. Other companies are
expected to launch swift responses to Home bake Recipes entry into the Bangsar market in
the form of price competition and more aggressive marketing.

The second identifiable element of risks for Home bake Recipes will be the high
fixed prices it will incur for start up. Bangsar facility itself will be expensive, and
anticipated expansion costs will be substantial, including advertising and promotional
costs, and special low prices. This also leads to the third area of concern for Home back
Recipes - Cash flow shortages. Realizing substantial startup expenses and low initial
revenues will make Home bake Recipes a cash-poor enterprise within the first few months
of opening a retail shop in Bangsar. Larger competitors may seek to take advantage of this
under-funding by increasing advertising expenditures and by slashing prices.

Contingency Plan

As with other successful businesses, Homebake Recipes has plans of action in

place to counter any of the aforementioned problems. Competition will be challenging, but
alternate plans are in place to face those challenges.

Competitors seeking to responds to the entry of Sunny & Marry into the market
will face strong opposition. First, this couples years of experience in this industry will
come in handy when facing strong competition, Sunny & Marry have the audacity to
charm customers with their friendly and humble personalities, building customers
relations is important in the beginning of the business, and Sunny & Marry had their best
at building it. Secondly, Sunny & Marry had great relationship with their suppliers for raw
materials, supplier will always give them the best deal, therefore, the cost of bakeries will
be at lowest possible, competing in price wouldn't be a problem for the first few months.
Finally, Homebake Recipes will provide access to Sunny & Marry, the owner, to assure
customers that thing do go wrong, there will be someone available who can immediately
correct the problem.
 Homebake Recipes recognizes that expenses will be high during its initial months
of operation in Bangsar, but is extremely confident that a quick entrenchment in Bangsar
market will yield a fast build up revenues. Looking to the long-term, both market research
and financial projection support the belief Sunny & Marry has the quick, powerful entry
into the market is a most successful and necessary strategy for long-term profitability.
Finally, Sunny & Marry has contingency arrangements for potential cash-flow problems.
Should sufficient investors fail to become available from his business plan, Homebake
Recipes has secured a line of credit at local bank on the personal reserves and good name
of Sunny & Marry.

Financial Structure
Sources and Uses of Capital

In order for Homebake Recipes to successfully commence operations, RM500,000

in start-up funding will be required. The owner will contribute RM250,000 of his own
money and require financing for RM250,000 from a lender. The business requires a 6
year loan that will be repaid in monthly installments at an 8% rate of interest. The table
below (Sources and Uses of Capital) represents how the funds will be utilized in
Homebake Recipes first year in business:

Description Amount (RM)

Sources

Business Loan 250,000

Owner investment 250,000

Total Sources 500,000

expenses

Shop Equipment 50,000

Advertising 50,000

Storage 100,000

Salaries 50,000

Working Capital 50,000

Delivery Vehicle 50,000

Capital reserve for emergency 50,000

Building Lease 100,000

Total expense 500,000

Break Even Analysis

 HomeBake Recipes Break-Even analysis assumes that its average per-unit revenue
is RM4.00. Its lowest price for any good would be RM2.50 (Brownie) and Highest would
be RM7.50 (Laksa), so RM4.50 is a fair estimate of the average per-unit revenue.

The running costs of production are fairly low since HomeBake Recipes
manufacture all their bakeries and cuisines at a low cost. Here are the items included in
the average per-unit variable cost:

• Manufacturing ingredients, i.e. flour, sugar, yeast, butter, eggs

• Payroll

• Mortgage

• Utilities

• Advertising

The Break-Even Analysis as it appears below indicates that the breakeven point
will be attainable each month.

Monthly Units Break-even 4750

Monthly Revenue Break-even RM21,374

Assumptions:
Average Per-Unit Revenue RM4.50
Average Per-Unit Cost RM0.90
Estimated Monthly Fixed Cost RM 16,276

Projected Profit and Loss

The Following table shows the projected profit and loss for Homebake Recipes:

Sales 291,700

Direct Costs of Goods 89,450

COGS 89,450

Gross margin 202,250

Gross margin % 69.33%

Expenses:

Payroll 168,000

Sales and Marketing and other admin expenses 13,040

Depreciation 3,492

Utilities 519

Insurance 1,800

Mortgage 10,800

Total Operating Expenses 197,651

Net Profit 4,599

Projected Cash Flow

Cash Received

Cash from Operations:

Cash Sales 291,700

Cash from Receivables 0

Subtotal cash from Operations 291,700

Expenditures:

Expenditures from Operations:

Cash Spending 12,980

Payments of Account Payable 262,597

Subtotal Spent on Operations 275,577

Additional cash Spent

Repayment of Current Borrowing 12,000

Long-term Liabilities Principal Repayment 4,248

Subtotal Cash Spent

Net Cash Flow (125)

Cash Balance 11,967

Projected Balance Sheet:

Assets

Current Assets

Cash 11,967

Other Current Assets 0

Total Current Assets 11,967

Long-term Assets:

Long-term Assets 175,000

Accumulated Depreciation 3,492

Total Long-term Assets 171,508

Total Assets 183,475

Liabilities and Capital

Account Payable 11,825

Current Borrowing (12,000)

Other Current Liabilities 12,000

Subtotal Current Liabilities 11,825

Long-term Liabilities 250,000

Total Liabilities 261,825

Paid-in Capital 250,000

Earnings 4,599

Total Capital 254,999

Total Liabilities and Capital 516,824

Net Worth 254,999