Randy Patles

May 12, 2016

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Contents
Executive Summary ............................................................................................................................. 3
Business Overview ................................................................................................................................ 4
Products and Services Offered ...................................................................................................... 4
Vision and Mission ............................................................................................................................ 4
Key Management ............................................................................................................................ 4
Legal Structure ................................................................................................................................. 5
Market Research.................................................................................................................................. 5
Market Share Objectives................................................................................................................. 5
Competitive Forces ......................................................................................................................... 5
Positioning Strategy.......................................................................................................................... 6
Position Statement........................................................................................................................ 6
Positioning Type ............................................................................................................................ 6
Position Map.................................................................................................................................. 6
SWOT Analysis ................................................................................................................................... 7
Feedback from Potential Customers............................................................................................. 7
Target Market Profile........................................................................................................................ 7
Demographics: ............................................................................................................................. 7
Psychographics: ........................................................................................................................... 8
Geographics: ................................................................................................................................ 8
Behaviour Response: .................................................................................................................... 8
Marketing Plan ..................................................................................................................................... 8
The Product Mix ................................................................................................................................ 8
Service Classification and related Marketing Considerations ............................................... 8
Unique Selling Point ...................................................................................................................... 9
Branding Strategy ......................................................................................................................... 9
Pricing Strategy ................................................................................................................................ 9
Pricing Objectives......................................................................................................................... 9
Cost-Based Pricing ..................................................................................................................... 10
Margin & Markup........................................................................................................................ 10
Break-Even Analysis .................................................................................................................... 11
Distribution Channel ...................................................................................................................... 12
Multi-Channel Ideas ................................................................................................................... 12

Physical Distribution .................................................................................................................... 12

Supply Chain Management ..................................................................................................... 13
Media Considerations ................................................................................................................... 13
Operations Plan ................................................................................................................................. 14
Planned Location ........................................................................................................................... 14
Initial Capital Outlays..................................................................................................................... 14
Licences, Regulatory Requirements ............................................................................................ 15
Human Resource Needs ............................................................................................................... 15
Production and Capacity Requirements ................................................................................... 15
Financial Plan ..................................................................................................................................... 16
Start-up Budget .............................................................................................................................. 16
Sales Forecast ................................................................................................................................. 17
Cash Flow ........................................................................................................................................ 18
Income Statement ......................................................................................................................... 19
Works Cited ........................................................................................................................................ 20

Executive Summary
Greenhorns will offer a fine dining experience on the Fredericton campus. Our
customers will be students, teachers, and staff who may not have the time to cook and
are in need of a decent meal. We will be run exclusively by students to keep operating
costs to a minimum. Our food will be cooked with organic, non-processed materials.
Our ingredients will be locally sourced if available and always ethically sourced for
international ingredients.
We will brand ourselves as a socially responsible restaurant. We plan on hosting events
in partnership with the local food bank that will help the less fortunate and homeless
populations in Fredericton. There are several other places to eat on campus, however
there is no access to affordable food coupled with a fine dining experience.
Greenhorns will employ apprentice chefs who are seeking a culinary arts education. In
partnership with NBCC, we will offer a great learning experience for these greenhorn
chefs, by letting them work alongside some of the greatest chefs in Canada.
Our ideal customers are millennial students living on the Fredericton Campus. This is a
population of about 10,500 people. They have an income of $10,000-$20,000 and
frequent the campus regularly. We hope our sales follow the 80/20 rule (80% of sales
come from the same 20% of customers).
We will offer high quality food at the lowest possible costs. There will be basic foods and
extravagant foods.
To reach out to customers, we will use various multi-media and social-media advertising
techniques. For multi-media, TV and radio ads will be implemented. For social-media a
mobile-friendly website, Facebook and Twitter pages.
Our kitchen will offer ample room and high quality equipment for all of our cooking
needs. We will have large coolers and freezers to keep our produce and meat
absolutely fresh.
Our employees will all be certified in food safety and sanitation courses. First aid will be
required for some full-time employees.
Based on the size of our estimated market, our target revenues for the first year will be
$790,000 (which is 10% of the estimated market size). If we grow to gain just 15% of the
market share in the second year, our revenues will be $1.2 million. We are seeking a
$120,000 loan to be repaid within the first year.

Business Overview
Products and Services Offered
Greenhorns will be a restaurant that gives consumers the option of dine-in or
takeaway. The menu will be comprised of various options for breakfast, lunch, and
supper. We will offer many quick-food options such as soup, sandwiches, and wraps for
busy students. For those seeking the complete dining experience, we will offer
appetizers, entrees, and desserts. We will partner with the new NBCC Fredericton:
Culinary Arts program to give students a hands-on learning experience, and to keep
operating costs to a minimum.
A similar restaurant has recently appeared in the Downtown Toronto Area in partnership
with George Brown Colleges Chef School; The Chefs House. It offers an innovative,
student-focused concept restaurant where students have the opportunity to learn from
the best teacher -- experience. It also gives the public the opportunity to experience a
relaxed urban dining experience. (The Chef's House). This is a new concept and we
would be the first to open such a restaurant in Fredericton.

Vision and Mission

Greenhorns aims to fill your stomach without emptying your wallet! We will offer a finedining experience to the students of the Fredericton Campus (NBCC, UNB, STU). Our
goal is to grow our customer loyalty base and attain a sizeable market share. We plan
to eventually cater to the Greater Fredericton Area, and operate a seasonal food
truck.

Key Management
Dwight LeBlanc will serve as a general manager. LeBlanc is a former graduate of the
NBCC Hospitality & Tourism program in Miramichi. He will oversee the general restaurant
operations. He has excellent communication skills and will be great for customer
service. He is known for being very prudent regarding food safety and sanitation, which
is an absolute must for Greenhorns.
Stewart Somers will serve as the assistant general manager. He is another NBCC alumni,
from the Business Administration: Accounting program in Fredericton. His previous work
experience includes assistant general manager at the Fredericton Target. He will
oversee the business component of the business, including payroll and bookkeeping.
Aime Thibideau will be the executive chef. She is a graduate from Holland Colleges
Culinary Institute in PEI. Her previous work experience includes sous-chef at Hooked N
Cooked in Blackville. She is known and appreciated for her creativity with seafood.
We will have many other positions to fill such as a chef de cuisine, sous-chef, prep
cooks, and line cooks. We will also need a matre d, servers, runners, hosts and
dishwashers. We hope to fill many of these positions as part time work for students.
(Parpal)
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Legal Structure
Greenhorns will be incorporated to give investors a stake in the equity. It will allow
owners and investors to be responsible for only their contributed capital. It will also allow
us to raise any additional capital required by issuing shares.

Market Research
Market Share Objectives
Our goal is to gain 10% of the estimated market share in the first year, which would be
around $790,000 in revenues, according to our estimates below:

Competitive Forces
The food and beverage industry in Fredericton could be considered a pure
competition. There is not much differentiation; you go to eat because you are hungry.
Some direct competitors right on campus would be Tim Hortons, Subway, and The
Cellar Pub. Indirect competition would be places like convenience stores and the meal
halls. What we intend to do is create a niche market so there is little competition.

Positioning Strategy
Position Statement
The campus restaurant that offers more than just food. Were a socially responsible
business that will maintain a unique dining experience that keeps customers happy and
never hungry.

Positioning Type
Our marketing strategy is the head-on approach. We will present ourselves as the better
alternative to what is offered for on-campus dining. We want to position ourselves as
the best possible option.

Position Map
We want Greenhorns to be known as the place with good food thats not going to
break the budget. Theres lots of options on campus such as the Cellar, fast-food
options like Tim Hortons or Subway, but there is no place to get a full meal for a decent
price. Below is our position map, and it shows where we think other restaurants and
take-outs are positioned. It also shows where we will position Greenhorns.

SWOT Analysis
Strengths
The strengths of a student run restaurant on Fredericton campus would include the
price, the product and the location. With students running it we could keep
operating costs to a minimum. This will allow us to serve high quality foods at a
lower cost. The location on the campus with the limited amount of food services
would give us a competitive stance.

Weaknesses
Some of the weakness include student workers, seasonal operating times and a
limited menu. Students learning the trade may not be up to the expectations of
some customers, as they are still learning. The student population is much smaller
during the summer months, so we would have to shut down for the summer. Some
of the special items on the menu will only be available on certain days and this
might upset some customers.

Opportunities
There are many opportunites for this restaurant. This includes encouraging healthy
eating trends, helping the cause, and the creation of a new market.

Threats
Some threats include a possible stigma against students, customer preference for
other restaurants, and limited funding availabilty.

Feedback from Potential Customers

In an online survey open to all Fredericton Campus students; 50% of students answered
that they eat on campus 1-2 times per week. Of those correspondents, 85% of them
answered that they would eat at a primarily student operated restaurant. The other 15%
said that they would consider it. None of the correspondents said that they would not
eat there. The correspondents who claim they never eat on campus (22%) said they
would consider eating at a restaurant run primarily by students. (Survey Monkey)

Target Market Profile

The ideal customer for our proposed restaurant is students ages 18-30 that frequent the
Fredericton campus daily. They are active and dont always have time or money to get
the proper nutrition. We aim to offer foods that appeal to many different tastes and to
be run mainly by students to have the lowest possible costs. We hope to be located in a
centralized location on the Fredericton campus. We will rely heavily on word of mouth
for our marketing, as well as other forms of advertisement, including social media and
radio.

Demographics:
Our typical customer would be a millennial student with an income of $10,000-$20,000.
They live around campus and frequent the campus daily. Our foods will appeal to a
variety of people; therefore, we will have a very multi-cultural customer base.
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Psychographics:
We aim to attract a socially responsible clientele, interested in supporting local and
ethically sourced international foods. They live an active lifestyle and are always on the
go. They value their own wellbeing as well as their peers.

Geographics:
We will focus mainly on the Geodemographic of the Fredericton Campus.

Behaviour Response:
Our customers will mainly be repeat customers looking for a low cost but quality meal.
Our goal is to follow the 80/20 rule (80% of sales come from 20% of customers). We hope
to keep customers happy with our services to maintain a loyal customer base.

Marketing Plan
The Product Mix
At Greenhorns, customers
will have the option of diningin or take-out. The menu will
be comprised of basic quick
foods like soup, wraps and
sandwiches. For supper there
will be options such as the
daily special, appetizers,
entrees and of course,
desserts.
For a sample of what the
menu will look like, we have
included a daily specials
menu to the right:

Service Classification
and related Marketing
Considerations
The products offered at
Greenhorns are considered
to be convenience goods.
Following the 80/20 rule
discussed earlier, the aim is to
have many repeat customers
that frequent the restaurant
regularly. We want
consumers to purchase often,
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with minimum effort and evaluation. In order to maintain customer loyalty, we will keep
people happy with our great food and low prices.

Unique Selling Point

Greenhorns will have multiple USPs. Students that are learning the trade will give us the
option to offer a fine dining experience at low prices. We will offer various multi-cultural
foods to appeal to different tastes.

Branding Strategy
We chose the name Greenhorns because of the overall branding strategy we are
going for. Greenhorn is a term for someone who is a beginner in their trade. The colour
green will be used extensively. The logo was created to be simplistic but eye catching.
Many different things have been taken into consideration for the overall design and
functionality of Greenhorns. There will be a small dining room available for students to
have the full dining experience. There will also be a takeout area for those who are in
need of a quick meal. The colour green will be used repeatedly. Green has been said
to create an image of balance, security and growth. It is associated with natural,
organic and healthy foods. (empower-yourself-with-color-psychology.com , 2016)

Pricing Strategy
Pricing Objectives
We will focus primarily on maximizing sales for our pricing objective. As previously
determined, the estimated market size is $7.9 million. (expected to grow by 3.6% each
year.) (Industry Canada). If we meet our goal of 10% of the market share, our estimated
sales volume for the first year would be $790,000. Our objective for the second year is to
increase the market share to from 10% to 15%. This would be around $1.2 million in sales
volume, if the market grows as estimated.

Cost-Based Pricing
The following is an estimate of fixed and variable costs that were determined by
researching the costs of other restaurants and by making assumptions. It only focuses
on one product, which is our hot-plates, discussed earlier in the marketing plan.

Fixed Costs
Kitchen Equipment

100,000

Utilities

12,000

Furniture

20,000

Intangible Assets

7,000

Rent

24,000

Total Fixed Costs

163,000

Variable Costs
Food/Beverage

3.00

Labor

1.75

Total Variable Costs

4.75

Margin & Markup

Markup =

=
Mark up

Selling Price - Cost

Cost
$10.00 - $4.75
$4.75
110%

Margin =

=
Margin

Selling Price - Cost

Selling Price
$10.00 - $4.75
$10.00
52%

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Break-Even Analysis
The following is a break-even analysis for Greenhorns. Please be aware that these
numbers dont reflect the total possible revenue for our restaurant, and only focus on
the sales of our daily Hot-Plate menu.

Break Even
Point (Units)

Total Fixed Costs

Price - Variable
Costs

$163,000
=

$10 - $4.75

Break Even point in units equals 31,048

Break Even
Point
(Dollars)

Total Fixed Costs

1-

$163,000

Variable Costs
Price

1=

$4.75
$10.00

Break Even point in sales dollars equals $310,476

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Distribution Channel
Farmers

Greenhorn's

Consumer

Fortunately for Greenhorns, many menu items are readily available locally. The majority
of our raw materials will be sourced from multiple farmers. The retailer (Greenhorns) will
provide consumers with convenient access to goods.

International
Farmers

Agent/
Brokers

Greenhorn's

Consumer

For our non-local ingredients such as spices, rice, and other grains, we will require an
industry broker. We will combine these ingredients with our local ingredients to provide
the best possible meals.

Multi-Channel Ideas
The primary goal for Greenhorns is to operate on one channel at the campus
restaurant. However, there are several multi-channel options that can be discussed.
These involve delivery services to the Fredericton area, and a food truck that services
hot-spots in Fredericton.

Restaurant
Greenhorn's

Food Truck

Consumer

Delivery
Physical Distribution
Processing Method
To process our orders, we will use a POS (Point of Sales) system. The server takes an order
electronically and it is then sent to the kitchen. This will make order-taking much more
convenient.

Warehouse/Storage
Due to the fact that Greenhorns is a small restaurant, we will not require a warehouse
to hold our inventory. For storage, we will primarily use walk-in fridges and freezers.
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Inventory Management
Along with our POS system, we will use a JIT (just-in-time) inventory system. This allows us
to analyze food usage and help to ensure we have a sufficient supply of raw materials.

Transportation
The goal of transportation is to have an advantage over competitors. To better
accommodate our customers, we will offer some form of delivery services to the
greater Fredericton area. Another aspect of transportation is the possibility of having a
food truck that services hot-spots on a daily basis.

Customer Service
The ideal customer service for any business is to be fast, consistent and your absolute
best. Food is cheap and consumers love free stuff. Any issues with the product will be
dealt with according to the situation. We will always try to keep our customers happy. If
there is an issue with the food, it will be replaced. If the customer is unsatisfied with new
food, they will be given a discount and/or a free meal.

Supply Chain Management

Partnerships/Suppliers
Greenhorns will develop multiple partnerships and relationships with suppliers and/or
their agents. The rationale behind this is to have the best possible raw materials
available. Many required menu items are readily available from local farmers such as
meat, dairy, eggs and produce. Since New Brunswick is located on the East Coast, we
also have many seafood supplier options. We will require a broker to source our
international foods, mainly spices.

Information Systems
The use of a POS system gives us the option to exchange information regarding sales,
orders, etc. with our suppliers. By doing this, we can ensure with a high degree of
certainty that the proper raw materials are being ordered.

Media Considerations
For our digital advertising, we will focus primarily on the use of the internet, and the
occasional radio ad.
Greenhorns will have a custom domain, powered by WordPress. It will include
information on the restaurant, as well as a blog thats updated regularly. It will be both
mobile and computer friendly. For other social media outlets, we will set-up a company
Facebook page and a Twitter page. In order to maximize the total reach, we will
maintain our pages frequently.
Our creative strategy will focus on lifestyle, to appeal to our target market (millennial
students). Since we are in the introductory stage, it is crucial to create a buzz about
Greenhorns.

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Operations Plan
Planned Location
The ideal location for Greenhorns is a centralized location on the Fredericton campus
between UNB, STU and NBCC. We will need to form a partnership with the campus to
make this idea a reality.
The location is in a prime area because of its proximity to all the schools. It is also near
both the BMO and Aitken centres.
Below is an illustration of the proposed location for Greenhorns. This area is currently a
wooded area and would require significant time and capital to build on.

Initial Capital Outlays

Our initial required capital is estimated at around $215,000. The owners will be
contributing $100,000 of their own capital. The majority of our estimate comprises of
state of the art kitchen equipment and a remodeling done to our needs.
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Licences, Regulatory Requirements

For Greenhorns, or any restaurant in New Brunswick, we need a food premise license to
serve the general public. We must keep our facilities up to the highest of sanitation
standards. All employees will be trained in food safety and sanitation. Some of the staff
will be required to have basic first aid.

Human Resource Needs

For our human resources, we will require 8 full-time employees, alongside our managers
and head chefs. These full-time employees include a chef de cuisine, a sous-chef, 3
prep cooks and 3 line cooks.
For part-time employee needs, we will keep a fresh staff of 12 employees. We will
require 5 servers, 3 dishwashers, 2 runners and 2 hosts. All of our employees will be paid
a modest salary.

Production and Capacity Requirements

We will require 2 large dining rooms to accommodate the dine-in guests. For the in-andout customers, we will need sufficient room for large line ups.
We will use a point-of sales system to manage our orders and help us to make the best
decisions when ordering our inventory.

15

Financial Plan
Start-up Budget
The following is a budget outlining the required capital to start-up Greenhorns.

Start-up Budget
Greenhorn's
Amount
# Months
Estimated Monthly Expenses
Owner's Salary
2,150
Employee Salaries
6,000
Rent
2,000
Advertising
500
Transportation
100
Utilities
1,500
Insurance
450
Interest
400
Maintenance
100
Legal
100
Misc.
100
Total Estimated Cash Required To Cover Monthly Expenses:
One Time Start-up Costs
Capital
Equipment
Remodeling
Starting Inventory
Soft-Costs
Licensing fees
Professional fees
Open-house event advertising
Accounts Receivable
Cash
Misc.
Total One Time Start-up Costs:
Total Estimated Cash Required for Start-up

Total Estimate
2
3
3
2
3
3
3
3
3
3
1

4,300
18,000
6,000
1,000
300
4,500
1,350
1,200
300
300
100
37,350

100,000
10,000
45,000
1,200
1,500
1,000
10,000
5,000
5,000
178,700
216,050

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Sales Forecast
Sales Forecast
Greenhorn's
Hot-Plates

Regular Menu
Items

Total
Revenue

Sept
Oct
Nov
Dec
Jan

31,480
40,890
28,170
47,530
53,717

60,700
54,573
42,380
47,530
58,913

92,180
95,463
70,550
95,060
112,630

Feb
Mar
Apr

37,371
49,991
32,999

73,731
68,718
62,906

111,102
118,709
95,905

Total

791,599

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Cash Flow
8-Month Cash Flow Projections
Greenhorn's
Sept

Oct

Nov

Dec

Jan

Feb

Mar

Apr

Total

Cash Sales
Total Cash Receipts
Cash Disbursements
Inventory Purchases
Salaries
Wages
Transportation
Advertising
Legal
Utilities
Insurance
Total Cash
Disbursements
Net Cash Flow
Beginning Cash Balance
Cumulative Cash Balance

92,180
92,180

95,463
95,463

70,550
70,550

95,060
95,060

112,630
112,630

111,102
111,102

118,709
118,709

95,905
95,905

791,599
791,599

25,000
2,150
6,000
2,700
500
900
1,500
2,500

50,000
2,150
6,000
4,000
500
800
1,500
2,500

32,000
2,150
6,000
3,181
1,200
100
1,500
2,500

45,000
2,150
6,000
3,700
1,500
100
1,500
2,500

63,936
2,150
6,000
4,589
2,000
1,500
1,500
2,500

54,876
2,150
6,000
5,000
2,000
1,200
1,500
2,500

75,000
2,150
6,000
6,131
2,000
100
1,500
2,500

40,000
2,150
6,000
3,435
2,500
100
1,500
2,500

385,812
17,200
48,000
32,736
12,200
4,800
12,000
20,000

41,250
50,930
5,000
55,930

67,450
28,013
55,930
83,943

48,631
21,919
83,943
105,862

62,450
32,610
105,862
138,472

84,175
28,455
138,472
166,927

75,226
35,876
166,927
202,803

95,381
23,328
202,803
226,131

58,185
37,720
226,131
263,851

532,748
258,851
5,000
263,851

Ending Cash Balance

55,930

83,943

105,862

138,472

166,927

202,803

226,131

263,851

263,851

Cash Receipts

18

Income Statement
The Inventory turnover (Restaurants Industry, 2015), gross margin (Industry Canada,
2014) and net profit as percentage of sales (Locsin, n.d.) used to produce the proforma income statement were all found through online research.

Pro-Forma Income Statement

Greenhorn's
Net Sales
Cost of Goods Sold
Beginning Inventory
Add: Purchases
Goods Available for sale
Closing Inventory
Cost of Goods Sold
Gross Margin
Variable Expenses
Owners Salary
Employee Salaries
Advertising
Transportation
Legal Fees
Misc.
Total Variable
Fixed Costs
Rent
Utilities
Insurance
Repairs, Maintenance
Kitchen Equipment
Depreciation
Remodeling
Other expenses
Total Fixed Costs
Total Operating Expenses
Net Operating profit (loss)

766,667
45,000
355,968
400,968
30,667
370,301
396,366
25,800
72,000
6,000
1,200
1,200
1,200
107,400
24,000
18,000
4,800
1,200
100,000
6,000
100,000
11,466
265,466
372,866
23,500

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<http://www.foodservicewarehouse.com/blog/restaurant-roles-job-descriptions/>.
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http://w3.stu.ca/stu/aboutstu/
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empower-yourself-with-color-psychology.com . Packaging Colors . May 2, 2016.
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Industry Canada. (2014). NAICS 722 - Food Services and Drinking Places - Financial
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Locsin, A. (n.d.). The Average Profit Margin for a Restaurant. Retrieved May 11, 2016, from
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