Smoothie and Juice Shop

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Smoothie and Juice Shop

SUZIE'S SMOOTHIES

690 LaSalle St.
Ann Arbor, Michigan 48103

Gerald Rekve

Suzie Cronin has been in the restaurant and food industries for over twenty years, in both ownership and management. This is a key factor why Suzie decided to open a healthy type of restaurant—she sees the need and potential success for serving all healthy food products in a market that has very few restaurants willing or able to do so.

The products will all be produced based on the new health craze, and will include various forms of smoothies and juice drinks. Health drinks like this are made from all natural products like bananas, oranges, pineapples, grapes, mangos, pears, ice, and others. In addition, we will offer meals that are low in fat, high on vitamins, and low on calories.

EXECUTIVE SUMMARY

Suzie Cronin has owned a restaurant for the past four years, and recently sold it after Suzie realized that the long hours and the need for a lot of staff where taking a toll on her. Suzie sold the restaurant with the goal to open another smaller, fast food operation that only served healthy choices for meals and drinks. The Smoothie business model matches all of Suzie's requirements. It is a small restaurant, only requires a few staff members to operate, and sells healthy products.

Mission

Suzie's Smoothies will sell healthy food choices for drinks and meals that are high in nutrition and low in fat and calories. Our goal is to gain market share in an even and steady pace, allowing us to enjoy our sales growth.

Our success will be based on our ability it produce products that give our customers healthy food that tastes great. Our mission is to assist our clients in reducing calories and fat intake and to live healthier lives by offering them easy, convenient ways to get healthy, nutritious meals in a hurry.

BUSINESS STRATEGY

After reviewing all of the franchises that are on the market, it was decided that Suzie's Smoothies would be independent. Suzie made this decision based her needs to operate a small shop—something simple without all the red tape and paperwork that is required of a franchise. By doing this, Suzie understood she would need to develop her own drinks, meals and so on without the help of a corporate model, but she knew her background in restaurant ownership would give her a solid base from which to operate.

Market Analysis

The target market for Suzie's Smoothies will be the entire city of Ann Arbor, Michigan. Our customers are mainly in the age group of 12 to 35; however, there is a growing trend for the 35 to 46 age group to adopt the healthy life style for food products.

Growth in popularity for smoothie products over the past five years has shown that, once the customer has used this product, they tend to stick with it and tell their friends about it. Healthy food choices are not expensive compared to other food choices. It is just a matter of educating the customer to understand that our food tastes great.

Competition

The current opportunity is greatest right now for our kind of restaurant simply because competing restaurants in the area provide little or no health food choices. Furthermore, even if they were to start offering healthy choices, the branding of their products has been so entrenched in the local market that it will be difficult for restaurants to re–brand themselves as proprietors of healthy options. Our foods as well as drinks will be on average lower priced than our competitors.

The future of our business looks bright as long as we open soon enough in order to garner market share. If we have a true competitor open before us, we will lose the ability to get market share. There are no signs of any competitors opening in the near future and we are prepared to open in a very timely fashion.

FINANCIAL ANALYSIS

Here is a breakdown of our financial needs and projected outcomes.

Total amount of funds sought for venture: $40,000

Total amount of estimated startup costs: $20,000

Total amount of projected average monthly expenses: $50,000

Total amount of projected average monthly revenue: $42,000

Start–up Expenses

A chart explaining our needed start–up expenses is included below.

Start-up expenses
Legal	$	1,500
Stationery etc.	$	200
Rent	$	2,600
Expensed equipment	$	13,700
Other	$	2,000
Total start-up expense	$	20,000
Start-up assets needed
Cash balance on starting date	$	10,000
Start-up inventory	$	10,000
Total short-term assets	$	20,000
Investment
Owner/founder	$	40,000
Total investment	$	40,000

MARKET ANALYSIS

Juice and Smoothie Bars in the U.S., 2005 edition

Segment	2002	2003	2004	2005(P)
(P) Preliminary
*Includes juice and smoothie retail stores, frozen desert retail stores and smoothie mixes.
**Includes lodging, vending, mobile caterers, non-store retailers and recreation and sports venues.
^†Includes military and other institutional foodservice.
Eating & Drinking	72.6%	73.3%	73.0%	70.7%
Juice & Smoothie Bars*	0.3%	0.4%	0.4%	0.5%
All others	72.3%	72.9%	72.6%	70.3%
Food contractors	6.6%	6.8%	6.7%	6.9%
Other commercial**	12.5%	12.2%	12.3%	13.9%
Subtotal commercial	91.7%	92.3%	92.0%	91.5%
All other^†	8.3%	7.7%	8.0%	8.5%
Total	100.0%	100.0%	100.0%	100.0%

Growth Strategy

The US smoothie market has grown rapidly over the last five years, driven mostly by the consumption habits of Americans who skip meals and often depend on snack foods as a substitute. Since smoothies offer healthier treat than other snack options, but also taste good and offer convenience and portability, the market is expected to grow at a rate of 10 to 13 percent in the next five years.

The smoothie market has lower barriers of entry because of lower capital investment. But in order to grow, what is required is the quality of the product and brand awareness. Drink Den, the leader in the US smoothie market, has clearly taken a lead over its competitors in terms of market share and, most important, brand awareness.

As a result of tremendous growth, many food chains, quick service restaurants and beverage companies are entering the smoothie segment by opening new stores. The growing interest of large beverage companies in this segment is mostly driven by the declining sales of soft drinks in the United States. There is a possibility of consolidation of the smoothie market, particularly resulting from the inevitable fallout of smoothie brands which will happen as the market starts to settle.

MARKETING & SALES

Advertising

We will utilize various forms of promotion, including:

Word of mouth

Alliances
Customer service
Telemarketing

Advertising

Billboards
Direct mail
Magazines
Newspapers
Phone book

Public Relations

Demonstrations/booths
Flyers
Newsletters
Press releases
Promotional products
Event sponsors

Point of Sale

Signage
Web site

OPERATIONS

We will operate our business at 690 LaSalle St. in Ann Arbor, Michigan.
We will be open 7 days a week, from 11 am to 7 pm daily.
We will be closed for major holidays like Thanksgiving and Christmas.
We will be a corporation with one owner.
We will employ 10 full– and part–time staff, including one part–time manager to manager the restaurant when the owner is away. The owner will only work a 40 hour week.

In order to operate efficiently, a number of lease hold improvement items and equipment is needed. These items include: