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Embed code for: SnoIIceHut Business Plan
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Table of Contents
1. Executive Summary 1
1.1 Company Objectives 1
1.2 Company Goals 1
1.3 Mission Statement 1
1.4 Type of Business/Legal Form 1
1.5 Shave Ice Machine Trailer 2
1.5.1 Daily Check List 2
1.6 Vendors and Suppliers 3
2. Products 4
2.1 Product Descriptions 4
2.1.1 Syrups & Flavor Concentrates 4
2.1.2 Flavor List 4
2.2 Shaving The Ice 5
2.3 Production Cost Analysis 5
2.4 Pricing Strategy 5
2.4.1 Cost of Goods Sold 5
2.4.2. Other Supplies 6
2.4.3 Retail Pricing Structure 6
3. Competition 6
3.1 Competitive Comparison 6
3.2 SWOT Analysis 7
4. Market Analysis 8
4.1 Demographics of the Savannah Metropolitan Area 8
4.2 Target Market Segment Strategy 8
5. Promotion 10
5.1 Advertisement 10
6. Financial Projections 11
6.1 Start-up Summary 11
6.2 Special Event 12
6.3 Sales Forecast 13
6.4 Income Statement 15
7. Conclusion 16
1. Executive Summary
The Island Sno Hut Shaved Ice is a mobile shaved ice business and will sell shaved ice as its primary products in addition to soft drinks and chips. We will initially offer 10 flavors and expand to 22 flavors Hawaiian shaved ice, raspados, island way sorbet, and fruit smoothies by the end of our first year.
1.1 Company Objectives
Our primary objectives are to attend at least one event every week and man a prime location in Savannah’s Historic District. Being mobile, we will travel up 50 miles to attend an event. There may be some major events that occur where we will travel even further.
1.2 Company Goals
Our primary goal is to deliver a consistent quality product at a reasonable price and of course maintain a profitable. We will treat each customer with the upmost respect and provide value-added customer service.
1.3 Mission Statement
The Island Sno Hut Shaved Ice is to introduce Hawaiian Ice to the Savannah Metropolitan Area. Provide a quality product for all ages and income levels.
1.4 Type of Business/Legal Form
The Island Sno Hut Shaved Ice, LLC is owned by Keya Maxwell, an Army veteran of Pooler, GA. We chose the LLC form of business because it carries liability protections for all its owners. None of its owners are liable for its debts. In addition to carrying limited liability, the LLC is taxed like a partnership. Some of the tax benefits are (a) flow through taxation- no corporation double tax, (b) ability to deduct business loss on individual return, (c) basis for loss includes owner's share of company debt, and (d) can specially allocate items of income and expense Therefore, it makes a lot of sense to run the business as an LLC to protect all the assets that we own if the business fails or faces any lawsuit.
1.5 Shave Ice Machine Trailer
The 6x14 foot shaved ice trailer has been purchased by the owner. Other initial costs includes new tires, state, county, and city fees and permits, registration, liability insurance, and title bond. The trailer is already in use by the owner and has begun to realize a small profit.
The shave ice trailer is equipped with the Fujimarca, electric shave ice machine and has the following features:
Most popular and finest block ice shaver in the market today.
Produces "fine" quality Hawaiian style shave ice.
Used by popular shave ice stores in Hawaii such as Matsumotos, Aokis, Baldwins, Shimazu, Scandinavians, Hawaiian Blizzard Shave Ice, Jojos Shave Ice, and much more!
True work horse. Heavy duty industrial motor mounted on a cast iron body will help you serve thousands of shave ice before any maintenance is required.
Easy to replace parts as opposed to the complicated sno-cones or Swan/Hatsuyuki block shavers.
Maintenance free design.
1.5.1 Daily Check List
To ensure consistent quality service, we used was an opening and closing checklist for our employees. The following list provides a good example of the daily opening and closing responsibilities for your employees.
(Arrive 15-30 minutes before opening.)
Turn on the air conditioner.
Pick up any trash in the parking lot and around your business.
Wipe off the outside counters.
Make sure all signs and banners outside are neat and clean.
Mop the floor — we always mopped every morning.
Put trash bags in the trashcans.
Make sure all items are stocked and ready — syrups, napkins, spoons, straws, cups, lids, backups, toppings, notepads, paper towels.
Call about inventory that may be needed or ordered.
Wash the windows.
10. Turn the open/closed sign at the correct time.
(Should be able to leave within 15-20 minutes of closing.)
Turn the open/closed sign at the correct time.
Clean and wipe down all surfaces inside stand —walls, countertops, refrigerator, freezer and shelves.
Clean ice shaver, wipe down inside and outside, wipe out and clean drip pan.
Wipe off all flavor and concentrate bottles including quart and gallon jugs.
Wipe out the refrigerator.
Make sure all items are stocked and ready — napkins, spoons, straws, cups, lids, backups, toppings, notepads, paper towels.
Stock inside freezer with ice.
Lock the windows.
Take trash to the dumpster.
Make a list of items needed for the next shift.
Sweep and mop the floor.
Turn the lights and AC off.
13. Lock the door.
1.6 Vendors and Suppliers
There were many vendors and suppliers for Hawaiian shave ice products and machines. However, 1-800-Shaved-Ice.com, located in Newton Grove, NC, was the vendor that we chose to buy our supplies from. The company has been operating for over 20 years, and they have a very good reputation as one of the best in the shave ice industry (http://www.1-800-Shaved-Ices.com). 1-800-Shaved-Ice.com has thousands of satisfied customers from all around the world. In addition, their products and parent company have been featured in the Wall Street Journal, Good Morning America, TV Guide, CNN, and the Oxygen Network. Our proudest achievement was the distinguished award of "Best Overall" by the Wall Street Journal. This award paid tribute to our excellent products, superior customer service and unmatched syrup flavors.
2.1 Product Descriptions
Our main product is shaved ice that is available in twenty-two flavors.
2.1.1 Syrups & Flavor Concentrates
Island Sno Hut will utilize concentrates in lieu of ready-to-use syrup. Concentrate syrup is much cheap than ready-to-use syrup.
2.1.2 Flavor List
Island Sno Hut will offer twenty-two (22) delicious flavors. The initial flavors are:
Yellow Cake Batter
2.2 Shaving The Ice
Island SnoHut will utilize 20 pounds of ice to produce our products. A 20-lb bag costs only $2.25. Based on our initial results making shaved ice, we estimate that a 20-lb bag of ice will make 42 8 oz. cups, 33 12 oz. cups and 26 16 oz. cups.
2.3 Production Cost Analysis
During our initial events, we utilized only one 20-lb bag of ice and had approximately 3 lbs. left over. Of course, we will freeze the left over ice and use it at our next event. We were able to purchase a variety of supplies at very reasonable prices. Our COGS ration average 12% which is directly in line with the industry average.
2.4 Pricing Strategy
Our pricing strategy is very simple. We will our customers an affordable price for a quality product. All events and festivals will feature a single price at $8.00 and one 12 ounce size.
2.4.1 Cost of Goods Sold
Table 1 below lists the cost of goods sold (COGS) for the various sizes of the shaved ice. Table 2 lists the COGS for other products.
Table 1- COGS Shaved Ice
2.4.2. Other Supplies
Some of your basic supplies and estimated costs are listed below.
Table 2- COGS Other Items
2.4.3 Retail Pricing Structure
Our retail prices are as follows:
10 oz. Foam Cup
12 oz. Foam Cup
16 oz. Foam Cup
3.1 Competitive Comparison
Our initial research reveals three (3) shaved ice businesses in Savannah. They are Kona Ice, Savannah's World Famous Shave Ice and Pelican's Snoballs. They both have physical locations except for the Kona Ice which is mobile.
3.2 SWOT Analysis
A SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats. It is a powerful tool used to evaluate the business’s present marketing situation and future opportunities within the industry. The following is a summary of the SWOT analysis for my business.
First mobile shaved ice business in the area
Not enough manpower to run it
Very simple to operate
Requires long hours of work
Small investment and low overhead
Costs for supplies are unpredictable
Ability to follow the crowd
Growing population in the county
Market to low-to-mid income level
Environmental threat: bad weather condition
Potential for market growth
Fear of unknown factors: vehicle break down, high prices
of gas, and repair maintenance
Ability to include other products
4. Market Analysis
4.1 Demographics of the Savannah Metropolitan Area
The Savannah Metropolitan area as consisting of Bryan, Chatham, and Effingham counties in Georgia; its total population was estimated at 379,199 in 2015. Table 3 below details income information for the metro area.
Table 4 - Household Income Distribution4.2 Target Market Segment Strategy
Island Sno Hut primary target is the millions of tourists who come to Savannah each year. Our strategy is bring our shaved ice products to Savannah’s Historic District every weekend, Friday, Saturday, and Sunday.
Savannah Tourism Profile
Estimated number of overnight visitors is 13.7 million in 2015.
Direct spending totals nearly $1.9 billion annually.
Percentage of expenditures from business or convention travelers: 27.8 percent.
The majorities of tourists are on vacation and spend between $200 and $300 total per day.
Uniquely situated along the I-95 corridor.
One of only three places along the coast to stay overnight.
The busiest months for tourism are March through June (primarily because of mild temperatures).
Visitors to Savannah are loyal; 60 percent return, half of who return four or more times.
The reasons tourists return include value for the price point (approximately 14,745 rooms in Savannah and 4,000 in the historic district), the authenticity and uniqueness of the city, and the offerings.
Visitors to Savannah are interested in “learning something.”
The average stay for tourists is two days.
There is potential to “squeeze an extra afternoon out of their visit.”
Savannah is disproportionately successful at drawing a national and international audience.
Most people are not there for a “Disney or theme park” experience.
Island Sno Hut will target low-to-mid income consumers within the metro area. The metro area has one major city, Savannah, and many cities towns including Pooler, Garden City, Port Wentworth, Richmond Hill, Hilton Head, Bluffton, Tybee Island, Thunderbolt, and Rincon. Every city and town has one or two events scheduled throughout the year. We will target five of these events each year.
Island Sno Hut will be advertised by posting flyers in bulletin boards in grocery and retail stores, post offices, schools, and public libraries. This method of advertisement is free. Flyers will also be distributed during events and fairs. We will order business cards to give to our customers and people that we come in contact with. Island Sno Hut will advertise itself because it will be very visible to everyone. The promotional budget is estimated to be $100.00. This is the budget for ordering the business cards, color inks, and paper (office supplies) for the flyers.
6. Financial Projections
6.1 Start-up Summary
6.2 Special Event
Next to New York City, Savannah has the second largest Saint Patrick Day celebration. It is estimated that over 300,000 people will attend in 2017. This event is our major revenue generator. We estimate total sales of $161,700 over the three day celebration with a profit of $117,387. See the spreadsheet for details.
6.3 Sales Forecast
The sale forecast is broken down into six major areas. The shaved ice sales are projected based on a particular sales volume. Sales of 200 cups a day is considered a Small Sales Day. Sales of 400 cups a day is considered a Medium Sales Day, and sales of 500 cups a day is considered a Large Sales Day. We also provide estimates for sales of cotton candy, sodas, and potato chips. Other events, festivals, and birthdays are included. We estimate that we will attend five other events/festivals in addition to Saint Patrick Day. We also estimate that we could attend 10 birthday events per year. The projected annual sales are $379,900. See the spreadsheet below for details.
6.4 Income Statement
Total income for the first year of operations is $379.900 which shows a profit of $140,237 or 37% profit margin after taxes.
We have already begun the business. We have successfully attend two events. We are very fortunate to have Wal-Mart as one of our customers. Based on our initial success and the potential sales and high profit margin, we are well on our way to becoming a prominent citizens of the Savannah Metro Area.
16 | Page3 below details income information for the metro area.
Next to New York City, Savannah has the second largest Saint Patrick Day celebration. It is estimated that over 300,000 people will attend in 2017. This event is our major revenue generator. We estima