The Pasta Tree in Springfield is the only fresh pasta wholesaler. The Pasta Tree has been selling its fresh pasta products from its own storefront as well in five of the city’s natural food stores for the past three year. Over the three-year period, sales have increased by 15% annually due to a loyal customer base. This year, The Pasta Tree will gross more than $300,000 in sales. This was possible because of an initial investment at $80,000.
Pasta Tree will expand its operations to distribute to all major supermarket chains in the city. There are 15 major supermarkets in Springfield, plus more than 35 smaller grocery stores serving the metropolitan area and growing suburban areas. The Pasta Tree will need to double its production in order to meet increased demand. The expansion plan will only be feasible with the help of owner financing and internally generated cash flow. Pasta Tree will obtain a $50,000 loan for the expansion of its production plant. Sales projections for three years will be based on Springfield’s current sales success.
This plan will see sales revenues increase to nearly $420,000 by year 3.
Pasta Tree is situated in a 3,000-square-foot facility. This facility serves two purposes: as a shopfront and as a production facility. Half of the area will now be used for production. $10,000 will be spent on the preparation of the new production area. New equipment will add $30,000. To meet the increased demand, the company must also upgrade its packaging equipment. This will cost $10,000.
Pasta Tree’s new marketing campaign will be launched in supermarkets and grocery store that carry its products. To attract new customers, eye-catching displays in stores have been designed. The displays will also hold discount coupons to promote sales to new customers.
The Pasta Tree will become a major sponsor of The Canal Run, which raises money for children’s cancer research.
1.1 Objectives
The Pasta Tree has the following objectives:
- Product quality can be improved by expanding production facilities.
- You can expect strong sales from the city’s major supermarket chains.
- Ensure that you keep costs and operations under control during expansion.
1.2 Mission
The Pasta Tree’s mission statement is as follows:
- Quality
- Quality
- Integrity We are proud of the pasta products we produce for our customers. Trust in The Pasta Tree is built on our commitment to the highest standards. We guarantee our customers that our products will not let them down.