Essence Premium Catering 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. Why Ekurhuleni
- 3. The Market and the Segment Trap
- 4. Contribution by Segment
- 5. SWOT and Competitive Position
- 6. Winning and Keeping Contracts
- 7. Tendering Into the Public Sector
- 8. Unit Economics and Prime Cost
- 9. Working Capital
- 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, segment and price
- 21.2 Cost, capital and funding
21.1 Volume, segment and price
|
Assumption |
Year 1 |
Year 5 |
Basis |
|---|---|---|---|
|
Meals served |
80 000 |
900 500 |
Across four segments from one production kitchen |
|
Operating days a year |
260 |
260 |
Applied consistently; segments operate on different patterns |
|
Meals per operating day |
308 |
3 464 |
|
|
Event covers |
1 200 |
8 200 |
Weekend capacity that contract work leaves idle |
|
Industrial and corporate price |
— |
R51.41 |
58.6% of Year 5 revenue; R9.92 of contribution a meal |
|
Institutional price |
— |
R38.40 |
27.1% of Year 5 revenue; R6.26 of contribution a meal |
|
Events price per cover |
— |
R232.90 |
6.0% of Year 5 revenue; R85.48 of contribution a cover |
|
Government and school price |
— |
R8.47 |
8.3% of revenue on 34.8% of meals; R0.09 a meal |
|
Government share of meals |
0.0% |
34.8% |
Capped at one third as a gate condition |
21.2 Cost, capital and funding
|
Assumption |
Value |
Basis |
|---|---|---|
|
Food cost |
40.7% falling to 40.5% |
Mix shift to government offsets buying gains from scale |
|
Prime cost |
74.7% falling to 72.1% |
Food, consumables and labour; the control metric |
|
Labour |
30.2% falling to 27.8% |
Shift utilisation as volume fills the kitchen |
|
Distribution |
4.9% throughout |
Scales with meals delivered within the 30 to 45 minute radius |
|
Rent |
2.4% of Year 5 revenue |
Ekurhuleni industrial premises rather than a prestige address |
|
Overhead |
19.1% falling to 8.9% |
The source of substantially all the margin improvement |
|
Owner remuneration |
R288 000 rising to R534 000 |
A market-rate salary, deducted before EBITDA |
|
Private sector debtor days |
38 falling to 32 |
Improving collection discipline |
|
Public sector debtor days |
74 falling to 68 |
Against a 30-day legal requirement and a 60 to 90 day reported range |
|
Total capital deployed |
R7.94 million |
Capitalised R7.57m net of allowance, working capital R210 000 |
|
Landlord installation allowance |
R165 000 |
Presented once, as a reduction in the cost of the fit-out |
|
Founder equity |
R2.15 million |
At inception |
|
Growth equity |
R2.10 million |
Year 3, at the kitchen capacity step |
|
Loans and facilities |
R8.89 million |
Eight instruments; see Appendix C |
|
Corporate income tax |
27% of taxable profit |
Assessed losses under the section 20 limitation; none payable |