Business Plan [PDF]

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TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY 

Introduction -------------------------------------------------------------------------- 3



The Company ----------------------------------------------------------------------- 3



Product and Services ------------------------------------------------------------- 4



The Market -------------------------------------------------------------------------- 4



Financial Considerations -------------------------------------------------------- 5

1.1 Goals and Objectives ------------------------------------------------------------- 6 1.2 Mission Statement ----------------------------------------------------------------- 7 1.3 Key to Success --------------------------------------------------------------------- 7 2.0 COMPANY SUMMARY 2.1 Company Ownership -------------------------------------------------------------- 7 2.2 Start-up Plan ------------------------------------------------------------------------- 8 2.3 Company Location ----------------------------------------------------------------- 8 3.0 Situation Analysis 3.1 SWOT Analysis ---------------------------------------------------------------------- 9 4.0 Marketing Analysis Summary 4.1 Market Segmentation ------------------------------------------------------------ 10 4.2 Target Market Segment Strategy ---------------------------------------------- 12 4.3 Market Mix -------------------------------------------------------------------------- 12 4.4 Market Needs -----------------------------------------------------------------------13 4.5 Competition Research ----------------------------------------------------------- 14 4.6 Sustainable Competitive Advantage ----------------------------------------- 14

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5.0 Strategy and Implementation Summary 5.1 Competitive Edge ----------------------------------------------------------------- 15 5.2 Sales Strategy ---------------------------------------------------------------------- 16 6.0 Management Summary 6.1 Organizational Structure --------------------------------------------------------- 17 6.2 Management Team --------------------------------------------------------------- 17 6.3 Personnel Plan --------------------------------------------------------------------- 20 7.0 Financial Plan 7.1 Projected Statement of Financial Condition -------------------------------- 22 7.2 5-Year Revenue/ Expenditure Forecast ------------------------------------- 23

Appendix A: Bakery Equipments ---------------------------------------------------------- 25 Appendix B: Pastry Bites Menu ------------------------------------------------------------ 30 Appendix C: Floor Plan ---------------------------------------------------------------------- 33 Appendix D: Legal Requirements --------------------------------------------------------- 34

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1.0 EXECUTIVE SUMMARY Introduction

Awareness of high quality baked goods is on the rise. Good bread is a rare combination of nutrition, convenience, and luxury. Today's consumer has less time to create wholesome bread, but increasingly appreciates the nutritional and sensory benefits it provides. Good bread provides fiber and carbohydrates in a convenient, low fat form that is portable and delicious. Good bread never goes out of style.

Pastry Bites is a start-up bakery retail establishment located in Dasmarinas, Cavite. Pastry Bites expects to catch the interest of a regular loyal customer base with its broad variety of bread and pastry products. The company plans to build a strong market position in the town, due to the partners' love of baking. Pastry Bites aims to offer its products at a competitive price to meet the demand of the middle-to higher-income local market area residents.

The Company

Pastry Bites is incorporated in Dasmarinas, Cavite. It is equally owned and managed by its two partners. Ms. Geraldine Pau has experience in sales, marketing, and management. Ms. Jessa May Rodriguez brings experience in the area of finance and administration. The company intends to hire two full-time

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pastry bakers and six part-time salesclerks to handle customer service and day to day operations.

Products and Services

Pastry Bites will stand out from the competition due to their uniqueness and outstanding quality. Pastry Bites will offers a broad range of bread and other pastry products as well as our specialty, cupcakes. Pastry Bites caters to all of its customers by providing freshly prepared pastry products at all times during business operations. Six to eight moderate batches of bread and pastry products are prepared during the day to assure fresh baked goods are always available. After establishing the business, Pastry Bites will research the possibility of producing cakes to increase revenues. This investment would require approximately Php1,000,000 for the purchase of equipment and ingredients. The company will also pursue wholesale contracts. A self serve beverage cooler filled with soft drinks will also help increase revenues.

The Market With bread being the country’s second staple after rice, the bakery business is one of those ventures that are sure to bring multiple returns with just a minimal investment. Bread is the country’s second staple and everyone eats bread. Though consumed mainly as breakfast and snack fare, bread is also taken at lunch, usually as burgers and even dinner time. Bread is a convenience type of

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food. You don’t have to sit and have a formal dinner just to eat bread. In fast food shops, you may get your bread right at the counter and you even don’t have to call a waiter to serve you. Bread, may be consumed while walking, riding a bus or even while whiling away time anywhere.

Pastry Bites wants to establish a large regular customer base, and will therefore concentrate its business and marketing on local residents, which will be the dominant target market. This will establish a healthy, consistent revenue base to ensure stability of the business.

Financial Considerations Pastry Bites is armed with Php1,000,000 in startup funds and a lot of guts, we are going to take plunge of starting our own business. It is composed of Php250,000 investment of each of the partner and a loan of Php500,000 from a bank that will cover the bulk of expenses. We will used our Php1,000,000 capital in acquiring one bakeshop and that included some goodwill money for the recipe and training.

Pastry Bites anticipates sales of about Php1,000,000

in the first year,

Php1,500,000 in the second year, and Php2,250,000 in the third year of the plan. Pastry Bites should break even by the third year of its operation as it steadily increases its sales. Profits for this time period are expected to be approximately Php653,792.60 on its third year, Php1,076,777.45 on its fourth year, and

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Php1,671,352.05 on its fifth year. The company does not anticipate any cash flow problems.

1.1 Goals and Objectives

a. Attain sales of P1,000,000 in the first year. b. Increase second year sales by 50% and third year by 50% base on second year sales. c. Expand by the third year of business. d. To develop a full menu by the end of our third year.

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1.2 Mission Statement Pastry Bites loves to bake! Through baking we aim to connect with our community by creating great bread and pastry products at a competitive price to meet the demand of the middle- to higher-income local market area residents.

1.3 Key to Success Keys to success for Pastry Bites will include: 1. Providing the highest quality product with personal customer service. 2. Competitive pricing. 3. The neatness of the environment and the security of the location 4. Finding and hiring the most qualified and skillful employee

2.0 COMPANY SUMMARY

2.1 Company Ownership

Pastry Bites is a bakery managed by two partners. These partners represent sales/management and finance/administration areas, respectively. The partners will provide funding from their own savings, which will cover start-up expenses and provide a financial cushion for the first months of operation. The company

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plans to build a strong market position in the town, due to the partners' love in baking. 2.2 Start-up Plan

Start-up Cost Pastry Bites is a start-up company. Financing will come from the partners' capital. The following chart and table illustrate the company's projected initial start-up costs. START- UP REQUIREMENTS Current Assets: Cash Required Start- up Expenses Legal (licenses, clearance etc…) Building Improvements Machineries & Equipment Rent Expense Advertising Expense Contract Labor Total Requirements

Php 100,000.00 Php Php Php Php Php Php Php

18, 503.72 50,000.00 114,650.00 24,000.00 8,000.00 10,500.00 307,150.00

2.3 Company Location Pastry Bites is headquartered in the town of Dasmarinas. We are located in Heritage Building near NCST, where all of our products are made from, stored in and shipped from.

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3.0 Situation Analysis

3.1 SWOT Analysis

Strengths  We do have a creative flair  Sustainable competitive edge of adaptability to all occasions, trends, and consumer market needs  Personal and flexible Customer Service  Good ambiance for customers Weaknesses  First time business venture  Start-up costs are only estimates  Potentially could be understaffed if our product demand increases drastically Opportunities  Capitalize on changing market  Join the trend of modern cupcakes and cakes design  Focus on large sales through participating at bridal fair

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 Increased demand from a successful customer using the Internet to reach new markets new technologies that allow you to improve product quality Threats  Financial problems could threaten our first year’s success  Competitors  The emergence of a new competitor, more sophisticated, attractive or cheaper versions of your product or service, and a downturn in the economy - reducing overall demand

4.0 Marketing Analysis Summary Pastry Bites focus is on meeting the demand of a regular local resident of Dasmarinas, Cavite, as well as a significant level of tourist traffic from nearby highways.

4.1 Market Segmentation

Pastry Bites focuses on the middle- and upper-income markets. These market segments consume the majority of pandesal and other baked goods and pastries. The price will be kept as lower as the known bakeshops. Mark up will probably be from 35% to 50% depending on the quantity.

Pastry Bites has identified also its market that consist of people who have a higher level of discretionary income to indulge in and appreciate the exquisite

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creativity and flair to consume extraordinary pastry products that taste and look good at a low price. We categorize our target market into six, namely: Celebrators, Doctors and Nurses, Comfort Creatures, Students, and Gourmet Wanna-bes. Among potential customers identified to be a part of our target market we have identified special events that would involve those customers such as: o Anniversary parties o Baby showers o Birthday parties o Bon Voyage o Bridal showers o Christenings o Congratulatory celebrations o Graduations o Holidays i.e., Easter, Christmas, Fathers’ Day, Mothers’ Day, St. Patrick’s Day, Thanksgiving, Valentine’s Day, Earth Day, Passover, Memorial Day, etc. o New Home Welcoming o Retirements o Weddings o And other Special Days

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Gourmet Wanna- bes 10%

Target Market

Celebrators 25%

Students 13%

Soccer Moms 14% Comfort Creatures 15%

Doctors and Nurses 23%

4.2 Target Market Segment Strategy The dominant target market for Pastry Bites is a regular stream of local residents. Personal and expedient customer service at a competitive price is key to maintaining the local market share of this target market. Pastry Bites will try to reach out to the market outside Dasmarinas, Cavite.

4.3 Market Mix 1. (Product): Our product is a high-quality, organic dessert that is extremely adaptable to both special events, and to the special dietary needs of our customers. 2. (Price): The smallest amount of our cupcakes is Php85 each box of 6's which includes the product and delivery of product to consumers within Dasmarinas. 3. (Place): Pastry Bites will market its products’ adaptability and its utility adaptability in a venue of different online and offline approaches which

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include: [Online]….electronic press releases, website, e-mail marketing campaign, web video ad, social networking sites ad etc. [Offline]…press release, brochures, menus, direct mail, television spot, radio ads, business cards. 4. (Promotion): Our promotional plans include but are not limited to: • Guerilla posting to blogs incorporating company message with signature file • Create online and offline press releases to introduce new business • Radio commercials • TV featured story on the three big TV company.

4.4 Market Needs

Nothing smells or tastes quite as delicious as a freshly baked loaf of bread straight from the oven. Bread is the country's second staple and everyone eats bread. Though consumed mainly as breakfast and snack fare, bread is also taken at lunch, usually as burgers and even dinner time. Bread is a convenience type of food. You don’t have to sit and have a formal dinner just to eat bread. In fast food shops, you may get your bread right at the counter and you even don’t have to call a waiter to serve you. Bread can be consumed while walking, riding a bus or even while whiling away time anywhere.

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4.5 Competition Research

Competition in the local comes in many sizes and types, from other independent bakeries to chain stores, superstores and specialty bakeries. Local customers are looking for a high quality product but affordable. The leading competitors purchase and bake high quality, ingredients, bread, pastries and cakes.

They offer a

wide variety of breads and cakes that the market is enjoying. They bake wedding cakes, others specializes in French pastries and serves donut.

In addition to sales through

company-operated retail stores, leading competitors sell coffee and tea products through other channels of distribution.

Technologically savvy competitors make fresh bread and cakes products conveniently available via mail order and

online.

Additionally, mail

order

catalogs offering cakes, breads, cupcakes have been made available by a few larger competitors. Websites offering online stores that allow customers to browse for and purchase bread, gifts, and other items via the Internet have become more commonplace as well.

4.6 Sustainable Competitive Advantage Based on our main competition mentioned above, Pastry Bites actually has quite a few competitive advantages which include ADAPTABILITY:

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1. Our price structure remains competitive 2. Our selection of cupcake designs is much more diverse 3. We are adaptable to our customers’ dietary needs offering: a) Vegan cupcakes b) Gluten-free cupcakes c) Sugar-free cupcakes d) Nut free cupcakes 4. We can adapt any cupcake design to any specific occasion 5. We deliver

5.0 Strategy and Implementation Summary Pastry Bites will succeed by offering consumers the lowest price. Increasing the quality of our baked goods; we would aim to be the cheapest producer of baked goods. Alternatively, we could cater to a consumer by using organic or vegan products. We will offer consumer with value-adding features, offering a delivery service and quick service to be the fastest bakeshop service.

4.1 Competitive Edge Pastry Bites competitive edge is the relatively low level of competition in the local area in this particular niche. We are offering the customers a completely new experience and far higher quality product.

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4.2 Sales Strategy As the chart and table show, Pastry Bites anticipates sales of about Php1,000,000 in the first year, Php1,500,000 in the second year, and Php2,250,000 in the third year of the plan.

6.0 Management Summary Ms. Geraldine Pau has experience in sales, marketing, and management. Attended bakery management – baking course and pure home baking experience. She has skills at producing baked goods and marketing them as well. Ms. Jessa Rodriguez brings experience in the area of finance and administration.

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6.1 Organizational Structure

Manager/ Owner

Supervisor/Owner Owner Chief Baker Baker

Baker Helper

Cashier

Sales Clerk

Sales Clerk

Sales Clerk

Sales Clerk

Janitor

6.2 Management Team There will be a total of 2 full time position for the management, 2 full time Baker, and 4 part-time Sales Clerk, Cashier and Janitor. The business will be open 7 days a week (Monday-Sunday). Online orders can be accepted 24 hours per day. The actual operating hours of the business will be 7:00 a.m. – 9:00 p.m. The job descriptions are as follows:

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(1) Web Master/Marketing Specialist (On- call) Duties Include: a) Designing, and maintaining website b) Processing online order requests c) Handling customer inquiries, and special requests d) Managing e-mail list e) Maintaining blogs f) Posting online press releases g) Collecting customer data h) Implements marketing techniques (2) Bakers/Creative Cake Artist (2 Full Time/President) (Part-Time as needed) Duties Include: a) Process and log in customer order b) Schedule order on calendar c) Handle customer inquiries/confirm customer requirements d) Create customized cupcakes e) Schedule deliver (3) Delivery Driver (On- call) Duties Include: a) Confirm details of delivery (location specifics/time) with staff and customer b) Contact customer to notify estimated time of delivery and terms of receipt c) Load and secure product/seeds in vehicle

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d) Deliver and setup product e) Thank customer, provide any additional customer service, leave business card f) Maintain vehicle (gas, oil change, general repairs/upkeep) (4) Cashier a) Receive payment by cash, check, credit cards, vouchers, or automatic debits. b) Issue receipts, refunds, credits, or change due to customers. c) Count money in cash drawers at the beginning of shifts to ensure that amounts are correct and that there is adequate change. d) Greet customers entering establishments. e) Maintain clean and orderly checkout areas. f) Establish or identify prices of goods, services or admission, and tabulate bills using calculators, cash registers, or optical price scanners. (5) Sales Clerk a)

Greet customers and ascertain what each customer wants or needs.

b)

Recommend merchandise based on customer needs and desires.

c)

Maintain knowledge of current sales and promotions, policies regarding payment and exchanges, and security practices.

d)

Answer questions regarding the store and its merchandise.

e)

Place special orders or call other stores to find desired items.

f)

Ticket, arrange and display merchandise to promote sales.

g)

Inventory stock and requisition new stock.

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h)

Watch for and recognize security risks and thefts, and know how to prevent or handle these situations.

i)

Exchange merchandise for customers and accept returns.

j)

Clean shelves, counters, and tables.

k)

Prepare merchandise for purchase

l)

Bag or package purchases, and wrap gifts.

m)

Sell or arrange for delivery, insurance, financing, or service contracts for merchandise.

6.3 Personnel Plan As the personnel plan shows, Pastry Bites expects to make significant investments in sales, sales support, and product development personnel.

PERSONNEL Payroll Rate POSITION

YEAR 1

YEAR 2

YEAR 3

MANAGER

18,000

18,000

18,000

SUPERVISOR

18,000

18,000

18,000

CHIEF BAKER

15,000

15,000

15,000

BAKER

12,000

12,000

12,000

BAKER HELPER

10,000

10,000

10,000

CASHIER

8,000

8,000

8,000

SALES CLERK

60/HR

60/HR

60/HR

JANITOR

6,000

6,000

6,000

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The company intends to hire two full-time pastry bakers (chief baker and baker), baker helper, cashier and four part-time salesclerks to handle customer service and day to day operations. Sample Payroll Payslip:

Acknowledgment Stub

Payroll Pay slip : Pastry Bites

Payroll Date: January 15, 2013

Name: MANAGER/OWNER

Pay slip No. 2013 - 001

Payslip No:

Earnings Detail

Payroll Date: 2013

Basic Acknowledgment

Php

Earnings for the period

18,000.00

TIN:

SSS #

9,000.00 Deduction Detail

Overtime This will acknowledge receipt of

January 1 - 15,

Absences

my pay from Pastry Bites

Witholding Tax

for the pay period ending

SSS

500.00

15-Jan-13

PHIC

225.00

HDMF

360.00

9,000.00

Php

200.00

1,285.00

JESSA MAY RODRIGUEZ signature over printed name

Net Pay >>

Gross Pay >>>

9,000.00

Net Pay >>

7,715.00

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7.0 Financial Plan 7.1 Projected Statement of Financial Condition Pastry Bites Statement of Financial Condition For the Year Ended December 31, 2013 ASSETS Current Assets: Cash & Cash Equivalent Office Equipment Inventory Non- Current Assets: Furnitures & fixtures Machineries & Equipments Building Improvements Depreciation Total Assets:

482,245.00 46,667.25 250,000.00 27,156.06 114,650.00 50,000.00 34,544.50 936,173.81

LIABILITIES & CAPITAL Current Liabilities: Accounts Payable Interest Payable Non- Current Liabilities: Bank Loan Partner's Capital Retained Earnings

500,000.00 500,000.00 (243,476.19)

Total Liabilities & Capital:

936,173.81

114,650.00 65,000.00

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7.2 5-Year Revenue/ Expenditure Forecast Pastry Bites Statement of Operation As of December 2017 2013 Sales Operating Expense

2014

2015

2016

2017

1,000,000.00 1,500,000.00 2,250,000.00 2,925,000.00 3,802,500.00

Legal Expenses

18,503.72

7,400.00

7,400.00

7,400.00

7,400.00

Rent Expense Depreciation Expense

60,000.00

60,000.00

60,000.00

60,000.00

60,000.00

29,929.50

3,999.50

1,000.00

1,000.00

1,000.00

Salaries Expense Representation Expense

1,134,720.00 1,134,720.00 1,134,720.00 1,158,192.00 1,158,192.00 5,000.00

5,000.00

5,000.00

5,000.00

5,000.00

Advertising Expense Repair & Maintenance

8,000.00

8,000.00

8,000.00

8,000.00

8,000.00

5,000.00

5,000.00

5,000.00

5,000.00

5,000.00

Utilities Rent of Vehicle Expense Communication Expense

54,000.00

56,700.00

59,535.00

62,511.75

65,637.34

18,000.00

18,000.00

18,000.00

18,000.00

18,000.00

14,400.00

14,400.00

14,400.00

14,400.00

14,400.00

Contract Labor Total Operating Expense

10,500.00

2,000.00

2,000.00

2,000.00

2,000.00

Operating Income

(358,053.22)

1,358,053.22 1,315,219.50 1,315,055.00 1,341,503.75 1,344,629.34 184,780.50

934,945.00

1,583,496.25 2,457,870.66

Tax

59,129.76

299,182.40

506,718.80

Net Income

125,650.74

635,762.60

1,076,777.45 1,671,352.05

786,518.61

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Appendix A: Bakery Equipments Convection Oven Every kitchen has an oven, but in bakeries the oven is where the foods succeed or fail. For this reason, bakers often use a convection oven, which is much more dynamic than the regular kitchen style. These come in several varieties, but they all follow the same basic specifications. Convection ovens have a sophisticated system of fans to evenly distribute the heat, which can be set as high as 550 degrees. The controls and thermostats are ultraaccurate and can be fine-tuned more easily than those of normal ovens. Also, the items inside a convection oven are much more visible because of the large glass panes and the high wattage light bulbs inside.

Proofer A piece of equipment specifically designed for bakeries, a proofer is what dough items, from bread to croissants, go into before being baked in the oven. The proofer is similar to an oven, in that there are several racks that rest inside a controlled heat chamber. Along with the heat, however, is controlled humidity, and the combination helps yeast ferment and rise faster and more fully than it would in a regular oven.

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Dough Scales 

Dough scales are an important pieces in a baker's culinary arsenal. When it comes to fragile baked goods like pastries and croissants, getting the right amount of ingredients is crucial. Unlike regular

scales, dough scales are designed for sturdiness and for dealing with the messy ingredients that bakers often use.

Stand Mixer Whether its a standard kitchen style or an industrial model, most mixers have the same basic design: two or more whisks that spin around inside a secured bowl. Any mixer can save a baker hours while making dough or whipping cream. The different settings allow for gentler or more forceful whisking.

Refrigerator/Freezer All bakeries need a refrigerator and freezer in which to keep essential baking items such as eggs and milk. Refrigerators and freezers are also used to store items that require certain temperatures.

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Stove In addition to ovens, having a commercial stove is a must as well. Some items need to be cooked before being used.

Display Stands Having a display stand allows you to show off your baked goods such as cookies, cakes and pies. The most common display stand is actually the counter top, which displays the baked goods underneath.

Cash Register A cash register is necessary to ring up all items and calculate order totals

Cake Depositors Cake depositors deposit cake batter into pans and molds. Though cake batter can be poured by hand, cake depositors ensure swiftness and uniformity, which, in turn, increase productivity and the end result. Manufacturers

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have made significant technological advances to cake depositors. Cake depositors are now used to deposit bread batter into loaf pans, deposit pie filling into crusts, and even ice and decorate the entire circumference of a cake in a matter of seconds.

Proof Boxes When baking at home, dough can take up to two hours or more to proof. However, bakeries need a quicker turnaround, and proof boxes allow them the quick turnaround they need. Proof boxes are high-humidity/high-temperature boxes that allow for dough to proof in as little as 15 minutes. Additionally, proof boxes provide bakeries with increased moisture in the dough, which, in turn produces a moist and flaky bread or crust.

Dough Preparation Equipment Bakeries should be stocked with mixers, dough dividers and rounder, dough sheets, and presses. Proof boxes provide warm, moist areas encouraging dough to rise. This bakery equipment should be able to maintain temperatures around 100 degrees Fahrenheit with humidity hovering around 85 percent, according to Practically Edible, an online baking information resource.

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Specialized bakery dough equipment can reduce labor-intensive bakery responsibilities but may also clog up counter space, according to Bakery Equipment, a bakery supply resource provider. Dough divider Dough rounder dough sheets

Dough Sheeter

Cutlery and Utensils Bakeries need cutlery and utensils to make their products. Knives, spoons, cutting boards and rolling pins are all tools used in bakeries. Certain products require the use of specialty tools, such as cookie cutters, bread slicers and cake decorating tools. Bowls in all shapes and sizes are required for making dough and mixing ingredients. The cutlery and utensils used by a bakery do vary, however, depending on the specific needs of the bakery. Baking requires an

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arsenal of smaller equipment items necessary for culinary success. Examples include grinders for peanuts and figs; pulverizes for crushing sugar and spices; pretzel rolling equipment; mixing bowls; and pans for loaves, muffins and specialty items. Bakeries will also need to be equipped with measuring utensils, whisks, beaters, temperature gauges, cake decorating tools and special plates. Other small items include brushes, rolling pins, sifters, pie crimpers and can openers.

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Appendix B: Pastry Bites Menu

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Appendix C: Floor Plan:

Farm Store Design a bakery that feels like a farm store. Welcome patrons into an all-wooden interior with high ceilings, tall shelves and solid oak countertops. Fill the shelves with handmade jams and jellies. Hand-write the names of baked goods to label each. Add chunky or wooden furniture if you have room for a seating area; if not, add stools to a counter where folks can enjoy a cup of strong coffee along with their bread

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Appendix D: Legal Requirements

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