18. Sales Projections – Moderate Scenario
-
50,000
100,000
150,000
200,000
250,000
300,000
2015 2016 2017
Units Sales
2015 Units
Sold
2015 Sales
Revenue
2016 Units
Sold
2016 Sales
Revenue
2017 Units
Sold
2017 Sales
Revenue
92,706 200,445 € 106,256 241,230 € 111,569 265,956 €
19. Variable Costs – Simit Prodution
Ingredient 100 Units Price 45,935 Units Cost 52,649 Units Cost 55,281 Units Cost
Flour gr 7,142 12.50 € 3,280,701 5,741.23 € 3,760,221 6,711.99 € 3,948,232 7,259.02 €
Pekmez- Molasses ml 2,142 2.93 € 983,935 1,347.99 € 1,127,750 1,575.92 € 1,184,138 1,704.36 €
Sunflower oil ml 28 0.01 € 12,862 4.12 € 14,742 4.81 € 15,479 5.20 €
Yeast gr 65 0.27 € 29,858 125.40 € 34,222 146.61 € 35,933 158.56 €
Salt ml 7 0.44 € 3,215 200.97 € 3,685 234.95 € 3,870 254.10 €
16.15 € 7,419.70 € 8,674.28 € 9,381.23 €
2015 2016 2017
TOTAL
Cost per ingredient
Units sold Cost Units sold Cost Units sold Cost
45,935 7,419.70 € 52,649 8,674.28 € 55,281 9,381.23 €
2015 2016 2017
20. Variable Costs – Simit Production
2015 2016 2017
Units sold Cost Units sold Cost Units sold Cost
45,935 7,419.70 € 52,649 8,674.28 € 55,281 9,381.23 €
-
10,000
20,000
30,000
40,000
50,000
60,000
2015 2016 2017
Units Cost
21. Variable Costs – Customizations
Ingredient Weight Cost 15 gr 30 gr 100 gr
Ham (Iberico) 7 kg 130.00 € 0.28 € 0.56 € 1.86 €
Chorizo (Iberico) 1 kg 12.40 € 0.19 € 0.37 € 1.24 €
Salchichon (Iberico) 1 kg 10.70 € 0.16 € 0.32 € 1.07 €
Cheese (Burgos) 1kg 7.56 € 0.11 € 0.23 € 0.76 €
Chocolate 550 gr 3.30 € 0.05 € 0.10 € 0.60 €
Units sold Cost Units sold Cost Units sold Cost
30,902 19,696.49 € 35,419 23,026.91 € 37,190 24,178.25 €
* 3% cost increase in 2017
* 2% cost increase in 2016
2015 2016 2017
Cost per Gram
30. Break-Even Point
BREAK-EVEN ANALYSIS 2015 2016 2017
GENERAL
Average Selling price per unit 2.16 € 2.27 € 2.38 €
Average cost of each unit 0.32 € 0.33 € 0.34 €
Gross profit margin 0,85 0,86 0,86
Fixed Costs 144,577 € 148,750 € 154,005 €
Euro sales to break even 169,692 € 173,939 € 179,505 €
Number of Units Sales to break even 78,484 76,617 75,304
34. Conclusions
• The Simit Shop is economically viable.
• The Simit Shop has a great growth potential.
• The city of Madrid is open to our products
and taste.
1 pop-up banner every two months – 47.50 € monthly
500 monthly simits for free tasting purposes during first six months of the year – 80.76 € monthly - 484.56 € (for six months)
8,000 flyers a month - 110.40 € montly -
TOTAL YEAR ONE - 2,379.36 € if simits are provided for only 6 months, and 2,863.92€ if provided yearly.
If an estimated 172k people walk by the selected area for one month, 32% are willing to spend (55k), 9% is our target market share (4.8k). If 25% are repeat customers (1.2k), it means that 3.6k are customers. If 40% of those customers are neighbors (1.5k), and we subtract them from the total repeating customers, we would end up with 2.1k individual customers per month.
First six months: 0.11€ per person with flyer and simit tasted.
Second six months: 0.07€ per person with flyer and simit tasted.
ID Task Name Begin End
1 Flyer Handing from Jan-15 to Dec-15
2 Pop-up Banners 1 from Jan-15 to Feb-15
3 Pop-up Banners 2 from Mar-15 to Apr-15
4 Pop-up Banners 3 from May-15 to Jun-15
5 Online Marketing from Jan-15 to Dec-15
6 Simit Tasting from Jan-15 to Jun-15
7 Pop-up Banners 4 from Jul-15 to Aug-15
8 Pop-up Banners 5 from Sep-15 to Oct-15
9 Pop-up Banners 6 from Nov-15 to Dec-15
Moderate
5% yearly increase in units sold
Pessimistic
4% yearly increase in units sold
5% of initial sales reduced in 2015 (in comparisson to moderate scenario)
Optimistic
6% yearly increase
5% of initial sales increased in 2015 (in comparisson to moderate scenario)
We are not a traditional bakery, a pizza place or a fast food restaurant.
Focus on total food consumption in Spain reports (Ministerio de Agri, Alim, Medio Amb).
100 BN spent on food
32 BN spent on extradomestic
Average ticket price – 4.81 €
Sales Prices – Below industry average.
Monthly food consumption (kilograms)
To calculate how much we could sell per month, we used a report from Mercasa, which calculated the amount of kilograms of food consumed in Spain per month. As you can see, January is the month when the most kilograms of food were consumed, so we assumed that January would be our best selling month.
Month Kilograms Percentage
January 167,775 100%
February 141,018 84%
March 155,950 93%
April 141,458 84%
May 138,780 83%
June 133,167 79%
July 128,145 76%
August 117,148 70%
September 125,746 75%
October 141,401 84%
November 142,982 85%
December 135,241 81%
That 32% gave us an idea on how much to reduce our market from total passerby´s to potential customers. From that 32%, we aimed to get an average 9% of total sales (from around the area and competing businesses). But to trully undestand how much people we were talking about, we did headcounts during different hours, both on weekdays and weekends.
From that point on, having a real number of people to work with, and using the average ticket price (only during peak hours), and combining it with the monthly consumption data from the report, we calculated the total amount of sales revenue we could obtain monthly.
Using the method previously explained, we came up with the following units and revenues per units sold per year.
As you can see in the graph, our amount of units sold and sales revenue on 2015 is much lower than 2016 and 2017. The reason behind that is that during our initial three months of operations, we estimate that we will only sell 65%, 70%, and 75% of our estimated quantities.