Our competitive edge is our unique niche in an old market. Although restaurants, cafes, bakeries, ice cream shops, etc have an established position in the marketplace, none are quite like Rutabaga Sweets. We are offering the customers a completely new experience and far higher quality product. No where else will they find a professional chef preparing gourmet desserts right in front of them. The amazing popularity of the Food Network is proof of the public's new-found interest in being a spectator in the kitchen.
Rutabaga Sweets' marketing strategy will be education of the consumer and subsequent word-of-mouth. We will become known as a unique dining experience as well as a superior pastry shop. Customers will be reached through fliers, newspaper advertisements and special holiday promotions.
Location will also play a crucial role in marketing and promotion. The business will be located in high-traffic retail area in Washington, DC known as the BID. Washington DC's Business Improvement District offers many incentives to businesses operating there. Additionally, there is the traffic that will come from being located near the MCI Center.
Rutabaga Sweets will target progressive and generally well-educated and affluent consumers who are interested in trying new products and experiences and are dissatisfied with the limited selection and lack of personal service found in grocery store bakeries, neighborhood cafes and ice cream shops and area restaurants.
The Yearly Total Sales chart summarizes our ambitious sales forecast.
Our Sales Forecast shows modest estimates for the first year of operations beginning in May of 2003. After establishing Rutabaga Sweets as 'the' place for sweets and celebrations, we project aggressive sales increases for the following years. In the second year of operation we estimate sales increase of 30% and of 50% in the third year for desserts, POP and carry-out. We are planning a 10% increase in Weekly Lesson fees each of the two following years while keeping costs constant.
Our cost of sales is based on an average food cost of 20% for dine in desserts and 15% for point of purchase items, carry-out and weekly lessons. We project a consistent food cost percentage of these amounts for the following two years. Keeping food costs low while sales increase is vital to the profitability of Rutabaga Sweets.
Rutabaga Sweets plans to be profitable within the first year of operation. Our goal is to reinvest in the company and expand to three stores by the third year. From that point we hope to establish partnerships with each store's chef; similar to Outback's proprietor program. They will each invest in their store and be directly rewarded for its profitability.