Sumptuous Cuisine Catering
Sumptuous Cuisine Catering is a local catering company serving both business and private clients in Doeuvreville and the surrounding towns within a ten mile radius. Established in 2005, the business has operated a catering kitchen and specialized in full-service catering and event planning for upscale events in the region both at client sites and at event spaces and halls. The business became the in-house caterer at Corporate Hall, a corporate meeting space, in Doeuvreville in 2008, and has developed expertise related to managing client events and event planning. For most events, Sumptuous Cuisine Catering provides referrals to additional vendors, manages client rental equipment needs, and provides event management expertise on the day of the event.
Sumptuous Cuisine Catering was founded by partners Rudy Electrum and Tosca Cabrini. Built from the ground up by these partners, Rudy owns 49% of the business and Tosca 51%. The business is established as an LLC.
10% of shares will be given to angel investors who purchase $270,000 in convertible debt to help to finance the expansion of Sumptuous Cuisine Catering. This will dilute Electrum’s shares to 44% and Cabrini’s shares to 46%.
Over the past three years, Sumptuous Cuisine Catering has made significant advances, developing its core business significantly after somewhat slow growth for its first two years of operation. Gross and operating margins have steadily improved and the business has continued to invest in kitchen and delivery equipment, as well as some of its own event furniture.
Sales have grown due to increasing partnerships with venues, like Corporate Hall, and event planners, like Jackie Lyman Associates and Your Perfect Event LLC which refer clients and subcontract work to Sumptuous Cuisine Catering. These referrals and partnerships have accounted for 75% of growth in the past three years. Corporate Hall alone accounted for 15% of sales in 2009. The remaining growth has been due to new client acquisition through marketing and referrals to clients directly.
Inventory has historically included raw materials for food as well as beverages and liquor. These have been accounted for as inventory and attributed to cost of sales for each job. Cost of sales has also included hourly wages to cater-waiters, event managers and other event staff, fuel for delivery, and supplies for the event (paper napkins, etc). Cost of sales also includes vendor subcontractors who the client pays through Sumptuous Cuisine Catering (generally rental equipment, florists, designers and musicians/DJs). Sumptuous Cuisine Catering lets clients contract directly when they prefer and recommends they contract directly with audio-visual and lighting providers.
Operating expenses have dropped from 45% of sales to 40% of sales over these previous three years, while they have grown by $150,000 in absolute value.
|Gross Margin %||55.00%||57.00%||59.00%|
|Collection Period (days)||51||58||78|
|Other Current Assets||$2,500||$2,500||$2,500|
|Total Current Assets||$208,167||$300,833||$426,833|
|Total Long-term Assets||$55,000||$57,500||$50,000|
|Other Current Liabilities (interest free)||$0||$0||$0|
|Total Current Liabilities||$37,500||$46,042||$50,000|
|Total Capital and Liabilities||$263,167||$358,333||$476,833|
|Sales on Credit||$300,000||$390,000||$450,000|