Mr Bakery Master Business Plan — Key Assumptions
Every volume, price, cost, capital and funding assumption behind the model, stated so a funder can test each one independently.
Key Assumptions
Jump to section
- Overview & contents
- i. Important Notice
- 1. Executive Summary
- 2. A Note on the Name
- 3. The Market and Why Scale Is the Enemy
- 4. The Product Strategy
- 5. SWOT and Competitive Position
- 6. Route to Market
- 7. Unit Economics and Prime Cost
- 8. Returns: The Wholesale Bakery Tax
- 9. Energy
- 10. The Five-Year Build and Its Gates
- 11. Funding
- 12. People and Production
- 13. Food Safety and Compliance
- 14. Financial Projections
- 15. Break-Even
- 16. Sensitivity and Scenarios
- 17. Risk Management
- 18. Implementation Timeline
- 19. Returns
- 20. Key Performance Indicators
- 21. Key Assumptions
- 22. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital Schedules
- C. Appendix C: Funding and Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
- 21.1 Volume, mix and price
- 21.2 Cost, capital and funding
21.1 Volume, mix and price
|
Assumption |
Year 1 |
Year 5 |
Basis |
|---|---|---|---|
|
Units baked per day |
880 |
3 150 |
Capacity added at the Year 3 and Year 5 oven steps |
|
Trading days a year |
306 |
306 |
A six-day week less public holidays, applied consistently |
|
Units baked per year |
269 280 |
963 900 |
|
|
Average price per unit |
R14.55 |
R18.42 |
Reconciles to the weighted product mix at Year 5 |
|
Confectionery share of units |
— |
61.0% |
At R11.40 and 39.3% contribution — the core of the business |
|
Specialty bread share |
— |
26.0% |
At R26.63; premium pricing where freshness is the product |
|
Cakes and tarts share |
— |
5.0% |
At R59.46; highest value per unit, weekend weighted |
|
Plain loaves share |
— |
8.0% |
At R19.57 and 19.0% contribution; a volume filler only |
|
Returns as % of gross sales |
6.2% |
3.4% |
Order book per shop; drops adjusted weekly |
|
Wholesale share of revenue |
78.0% |
58.0% |
Retail outlet from Year 4 lifts blended margin |
21.2 Cost, capital and funding
|
Assumption |
Value |
Basis |
|---|---|---|
|
Prime cost |
69.1% falling to 63.2% |
Ingredients, packaging and labour as a share of net revenue |
|
Ingredients |
37.2% falling to 34.5% |
Contract buying on flour; batch weighing |
|
Labour |
27.8% falling to 25.0% |
Shift utilisation to Year 3, then close to proportional |
|
Energy |
5.8% rising to 6.2% |
The only cost line rising as a share of revenue |
|
Distribution |
5.6% falling to 4.2% |
Falls with the wholesale share, not with cost per drop |
|
Overhead |
16.2% falling to 8.1% |
The dominant source of operating leverage in the plan |
|
Owner remuneration |
R264 000 rising to R498 000 |
A real cost, deducted before EBITDA |
|
Total capital deployed |
R6.78 million |
Capitalised R6.56m, expensed R96 000, working capital R128 000 |
|
Landlord installation allowance |
R180 000 |
Presented once, as a reduction in the cost of the fit-out |
|
Founder equity |
R1.62 million |
At inception |
|
Growth equity |
R1.85 million |
Year 3, at the second oven line |
|
Loans and facilities |
R5.17 million |
Seven instruments; see Appendix C |
|
Debtor days |
32 days |
On the wholesale share of revenue only; retail is cash on sale |
|
Corporate income tax |
27% of taxable profit |
Assessed losses under the section 20 limitation; none payable |