Executive Summary
Sweet Temptations is an LLC founded by Amanda Rodarte of Austin, Texas. She currently bakes out of her home, but is planning on opening up her first store in College Station, Texas this time next year. With the help of her friends and family, Amanda has accumulated enough equity to fund 100% of her dream project.
Her plan for the store is to sell a wide variety of baked goods, signature grilled sandwiches, coffee, and tea. In addition to in-store sales, the high-capacity kitchen will house the creation of large cutom orders for any occasion. The warm, natural tones used to decorate will be complimented with large comfortable areas to sit and relax. The kind of atmosphere she invisions is very calm and welcoming in hopes to make every customer feel at home.
After extensive market research, it is clear that College Station will be an ideal location for this kind of establishment. With the high density of college students in the area, there will always be a demand for coffee, quick food, and a good place to study or gather with friends.
Getting into the food industry has its risks. Thin profit margins leave very little room for error. Changes in comodity prices, or labor costs could have drastic effects on profitability. Profits are also sensitive to consumer spending habits and preferences. In a weak economy, people will spend less on eating out. Although, since the recession, consumer spending is steadily on the rise meaning more people will be treating themselves to more coffee and sweet snacks. Increases in consumer health awareness may also cause of lower sales, due to people avoiding food that is high in sugar and fat.
Company Profile
Sweet Temptations is in the business of satisfying the senses. We will be indulging the sweet tooth of the Bryan/ College Station area. Along with a wide variety of baked goods, Temptations will also be brewing various specialty coffee and tea. On the lunch special, our menu will include a selection of hand-crafted, savory grilled sandwiched. Everything served will be baked fresh daily with only the utmost quality ingredients. The vision we have for the inside of the restaurant is very detailed. Natural, warm tones, and wood flooring and panels will help set an easy, relaxed tone. Our hope is that we can create an atmosphere so warm and comfortable that our guests will never want to leave.A major competive advantage we will have is the location we have chosen which is directly across from campus. We will also be ahead of our competitors with our flexibility of custom orders. Our kitchen will have the capacity to fill large orders, and our skilled baking staff will work with customers to create the highest customizaility in our products.
Owner and founder Amanda Rodarte with be a woman of many hats. She will serve at the manager of operations, taking care of day to day acivities such as directing staff, and inventory control. She will also be serving as head Chef in the bakery as well. Her degree in business finance at Texas A&M will serve her well in running her company efficiently. She also has a lifetime of experience baking out of her home, she has earned certificates in cake decorating, and has worked a year gaining experience in a local cupcake shop .
Also helping run the show will be Amanda's Mom, Cheryl Rodarte. She is the reason Amanda started baking when she was so young, and has provided incredible inspiration and support over fulfilling her dream of opening her own business. Cheryl will use her baking expertise to help in the kitchen as well as manage human resources and customer relations. Together they will work on continually improving and growing their business.
Market Analysis
The Bryan/College Station area contains a high density of college students. With our location being on North Gate, right across from campus, we believe the majority of our regular customers will be those college students. University Drive is already a high traffic area, but traffic is projected to rise within the next year not only due to the new apartment complexes being built on University, but also the anticipated increase in students attending the University after A&M's huge success in their first year in the SEC. The bottom line is, there will always be a demand for caffine and quick food in a college town.
The development we chose is actually very well under construction. The Rise at North Gate will be an 18-story luxory apartment complex with 17,000 square feet of retail space on the bottom. It is located on University Drive and Church Avenue, just a breeze away from Campus and the popular Northgate District. The Rise will be the tallest building in College Station and has the potential to become a local landmark. Parking will be available in an on-site, 400 car parking garage.
Sweet Temptations will be renting about 1,500 square feet of retail space at about $3,000 a month. Due to prime location, rent is priced at a premium $25 per square foot.
Because the development will be the tallest building in College Station, we run the risk that people will reject the impact it may have on the campus' image. So far, there has been minimal resistance with its construction by surrounding citizens, and many students are excited to reserve their spot on a lease for the upcoming fall.
The Property
717 University Dr College Station, TX 77840
$25 - $30 /SF/Year
1,000 SF
7,500 SF
Retail
Neighborhood Center
Restaurant
Street Retail
Retail (Other)
Street Retail
Retail (Other)
Under Construction/ Proposed
250,000 SF
42,900 SF
43,000
Church Street
Financial Analysis
Revenue in the first yearBest case: $390,750
Most likely: $284,000
Worst Case: $230,000
Acording to the industry analysis, the average profit margin for this type of establishment is about 5.9% of revenue with revenue growing at a rate of about 3% per year. Our profit in the first year will most likely be about $16,756.
Projected Cash Flow from Operations
Year inflow/(outflow)
0 (100,000)
1 16,756
2 17,258.68
3 17,776.44
4 18,309.73
5 18,859.03
6 19,424.80
7 20,007.54
8 20,607.77
9 21,226.00
10 21,862.78
*assuming an 8% discount rate
(Unleveraged)
NPV= $19,408
IRR= 13.29%
