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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, Valentine’s, Easter, and Christmas,

We can infuse any chocolate with any flavor that a customer requests. We sell our chocolate in a ¼ pound, ½ 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

Nawtee’s 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, Nawtee’s 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 Assets

Expensed 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!!!

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Replies to This Discussion

Thank you for this. It helps with geting my plan started. Did you ever get the second part started? Can I use it as a sample to help me with my business plan? I don't want to without your permission. I am having a tough time getting past roadblocks i.e. business plan, state laws etc. There is so much information out there. I have a bunch of possible customers and a space I may be able to get but am at a loss as to how to get it all in right order. Space wants to see business plan. I know I can do this its just frustrating when there is almost too much informtion. My goal is to do what I love and am good at. We are doing this all on our own money and have people asking when they can order for Christmas. Any suggestions would be wonderful. My husband and I appreciate all the info you have given as well as everyone on TheChocolatelife.
It's pretty cool of you to share your business plan outline. Thanks for that.
Being that this is over a year old I'd love to hear a year in review. What did a year do for you.

Hello Annette,

I came across this today and I am so thankful that you have shared this with us.  Do you have further advice now that you have been in business for a few years now?

Hello, I just came across this article and am wondering if anything else has been written on it. I am working on a business plan myself, and am considering taking the business plan course offered at Ecole Chocolat. Has anyone else taken this course or know of it?

Thanks! :)

Hi All.

I just took some time to read over the outline above, and in my not-so-humble opinion, the outline sets the business owner up for failure.  Personally, if someone handed me a plan with that structure, I wouldn't read it, and I wouldn't invest in the venture.  Here's why:

  1. Sophisticated investors don't read business plans.  They read executive summaries comprised of 2-4 pages summarizing what the business plan supports.  They are often too busy to dig through a hundred pages of technical detail.
  2. Sophisticated investors will usually move from the executive summary to the financials - including a breakdown of start-up capital required and pro forma income and cashflow statements.  These spreadsheets alone will tell a sophisticated investor if you know how to open and run a business.
  3. Nowhere in the summary above is the answer to THE most significant question:  "Given that chocolate and coffee are consumed on par world wide, and multi million dollar companies have thrown their hat in the ring, opening up boutique stores (Godiva and Lindt for example), what market research, product testing, and focus groups have YOU done to differentiate your product from theirs and take some of their business away?"  In other words, WHERE is the research that backs up the 30 different varieties of confections you wish to arbitrarily make and offer to your potential customer - varieties that will be good enough to sway them from your competitor? WHO ARE YOUR CUSTOMERS AND WHAT DO THEY WANT?  If you can't provide the answer to that single question you won't get a dime from anyone.
  4. Investors need to believe in YOU.  They need to have confidence that you can execute your plan, and have the strength of character to weather the most difficult start up years.
  5. EXIT STRATEGY EXIT STRATEGY EXIT STRATEGY.  Nobody wants to invest in a deal and NOT get their money out.  Business is about money.  period.  Investing is about money.  period.  You need to paint a very clear picture of how an when the investor is going to get paid back and what their return is.  If it's a start up venture, be prepared to be insulted by what the investor will ask for.  After all, money is power, they have it all, and without what they have, you have a lot of nothing.  They know this, and now you do too.  Being aware of this one point can greatly improve your bargaining ability, as you can acknowledge to them that you are aware of their position in the deal.

 

Hope that helps.

 

Brad

Hi Evelyn, I took the course and its really well done. Unfortunately I took it at the wrong time, while I was working a highly stressful job. I wasn't able to put as much into it. However I saved as much as I could and I have gone through it again,there is a wealth of information and the guidance is great! I love their courses!

They do have great courses! I took the Professional Chocolatier a few years back and loved it. Now that I'm in a good position to start a business, I want to do it right the first time. I've actually found a local program that helps entrepreneurs to get on their feet, but there are a lot of rules and regulations to actually being accepted. I suppose if I don't get into this program, then I'll take Ecole Chocolat's business plan course. Nice to hear from someone who took it :)  Thanks!

I suggest you go to the local office of your Small Business Development Center  (sbdc.org) and get their business plan outline and a counsellor consultation. It is free.

What you have written here  is not detailed nor impressive enough to secure any financing, let alone an investor, nor is it even a compelling plan to use as your roadmap to success. Your very opening line sounds like you don't know who you are or why you selected Phoenix as a place of business. I don't say these things to discourage you but to have you go get professional help to drill down, visualize your business concept and focus better. The important details are in the numbers and how you plan to achieve them.What sets you apart? surely there are more unique chocolates being made in Phoenix than Godiva or See's both mass market retailers that likely have little relationship to what you are offering.Premium, handmade chocolates doesn't say anything, its very vague. The difference between failure and success is in the details..also the Nawtees sounds like X rated chocolates, you might think about that.

Very Good points Melanie.  From what I have experienced so far is everything you have spoken about as well as Brad's advice.  If you are new to the business world, they don't care about fluff they care about their investment and how its going to be executed.  Good ideas are just that until you can back it up with good financial projections as well as the part about setting yourself apart.  There are a lot of chocolate shops/businesses popping up.  How am I different? How are you different.   Its so wonderful to have support from people who are in the same business to offer advice.  It's priceless and good point on the small business center.  They know what your direct area with local investors is looking for.   Exciting and scary all at the same time.  But perseverence and wisdom and heeding advice pays off!  Thank you for all the wise advice :)  I am still in the process and looking forward to opening shop one day.  Until then, I will keep gleaning and learning. 

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