BUS3ENT: Entrepreneurship – Individual Business Model and Plan
Executive Summary
Starting a new business is never easy, regardless of the fact that if one has any experience or not. It’s the courage and determination that makes a lot of difference in the success and failure of any business. Not every business is likely to see success in the first year of their operation, however by making sure of few things such as the location of the business, industry, hiring the right employees and keeping the costs to minimise the chances of its success can be increased. This is a business plan that is developed for a new business Healthy Food on Wheels, a food truck business that will serve healthy food unlike other food trucks operating in the market. Healthy Food on Wheels will operate seven days a week and will be located on Lygon Street i.e. close to Melbourne CBD. The reason for selecting such location is mainly because of the fact that Lygon is a pretty busy location. Initially the business will start with only one truck and few team members and based on the performance the team members will be increased accordingly. The Unique selling proposition of the business would be its app and the website through which customers would be able to know how much calories their food would have. A complete start-up cost break down along with profit and loss for next three years is also included in this business plan.
[hbupro_banner id=”6299″]Introduction
The demand for any food business in Melbourne Victoria is always on the rise. Opening a food business, either it be a fine dine, a takeaway restaurant, a pub or even a pub shop, the chances of its success are high. People in Melbourne Victoria are healthy conscious and at the same time they like their food. Exploring new food options, trying new different recipes and at new places are always on demand. Analysing all these trends and demands, Healthy Food on Wheels is a new concept Food Truck Business that will operate a bit differently to its competitors.
Business Model Canvas
Market
Market Size
Consumers are the target market for food business, there’s no doubt that consumers use industry operators to order their foods for parties, or even for their day to day lunch breaks at work. People aged between 35 to 44 comprise of the biggest market share, for food business (Caldwell. J, 2019). Mainly because of the fact that people of this age do not have much time to prepare their food at home on daily basis.
Industry Growth
The overall industry revenue is expected to increase at an annualised increased rate of 75% and likely to reach up to a figure of $87.2 million by the year of 2022. Many small and private restaurants are able to raise their awareness with the help of active strong marketing campaigns by companies like Uber Eats and Menu Log (Caldwell. J, 2019). The competition for the Fast Food and Takeaway business is at a moderate level as the major players holds the bigger market shared.
Market Trend
The one recent trend that has caused a major stir in the food industry is due to the COVID-19 pandemic. The percentage of online food ordering has gone up as people are restricted to their homes, but since they still want to try out new different foods, many customers have placed their orders online (Wood. L, 2020). This trend has its negative impact on the fine dining restaurants, however for fast food business their online sales has increased.
Market Segmentation
The market can be segmented on the basis of food preferences, as there are people who only prefer healthy foods like salads and other nutritional food. Whereas there are people who prefer tasty junk food, like burgers, pizzas and so on. The further segmentation can be done on the basis of Age as young people are likely to have anything whereas people aged 35+ would be more health conscious.
Target Customers
The secret behind the successes of today’s rapidly growing companies is the ability to identify huge potential target customer base (Caldwell. J, 2019).
For any business to be successful it is very important that the business should identify the potential target market. As stated by Srinivaas, p. 211, 2013, by able to select the right target market and be able to address the demand of it efficiently are among the main key factors for the success of any business.
Diet conscious people are increasing day by day, as more and more people realize how important it is to have quality food for their health. According to Pride et al. 2012, people these days are more concerned about the food they eat, which in return resulting in the increase in demand of food business that can deliver such healthy foods.
The targeted customers would be the working-class people, working in CBD, university students of Melbourne University and RMIT as these two universities would be very close to the business location. Apart from these 2 targeted customers the third one would be the other visiting customers, who would pass by the truck location or happen to be in the area by chance.
The image below is just for reference only, this is how the truck would look like, at its location of operation.
Competitors
There are many restaurants and cafes located in Melbourne CBD, Brunswick, and Carlton, so the choice for customers to get their food from are many. There are all sorts of restaurants, that serve, Chinese, Italian, Indian, and Thai food. However, not many of these restaurants focus on or emphasise on healthy food, which would be the USP for Healthy Food on Wheels.
Business Location
The location of the Food truck would be very strategic, as entering in an industry that is already very competitive, the location of the business has to be ideal. So, keeping that in mind, the location of the business would be Argyle Pl that is off Lygon Street. Location is just outside or Melbourne CBD, close to many close by hot locations such as IMAX, Lincoln Square and Mebourne University.
Operations and Technology
For the food business the only technology it would be relying on would be the online order system. Though the business will work in collaboration with other food delivery companies like Deliveroo, Uber Eats and Menu log as they hold the key market share. But at the same time the business would require an APP and a website for its customers, where customers would be able to customise their orders and at the same time would be able to see the calories, they would consume by having that food.
Technological Changes
Technological advancements have played a major role in how the society act and live today. How we buy things, how we study and even how we order our foods have transformed over time. One key change that has taken place in the food industry due to technology is the online ordering system. It’s a lot easier than ordering the food over the phone (Simon, D., Schmidt, C 2015). One key difference that the Healthy Food on Wheels will introduce is the option of counting calories with ordering any food over the app or through website. The below chart shows how the app would work and how the customers would be able to count the calories before placing their final order.
Options for Producing
All the food will be made in house, as two full time chefs’ will be hired to work on daily basis and another chef would be hired on the days on which one of the full-time chef would take off. The business won’t get into any subcontracts or joint ventures as that would affect the profit margin for the business, however the business will definitely be in partnership with food delivery companies like Uber Eats, Deliveroo and so on. Apart from these delivery companies, the food truck will have its own riders who will deliver the food to their regular customers in the nearby areas.
Resources Required
| Resources | Availability |
| Food Truck | Yes |
| Kitchen Utensils | Yes |
| Chefs | Yes |
| Delivery Guys | Yes |
| Business App | NO |
| Website | NO |
| License | Not Yet |
According to the above table, most of the resources are available for the business, however the business is yet to obtain a license to operate in that location. Apart from that, since the business would need an app and a website to be done by some other company, so resources for that aren’t available at the moment.
Law’s Regulations
Since the food truck business would be mainly involved with handling the food, at the same time would be located on a public place for commercial activities so for such reason the business will need approvals from the local council to be able to operate in that area.
Apart from that following legal requirements need to be fulfilled and laws to are to be complied with before commencing the business (ablis.business.gov.au, 2015):
- Food Standards Code
- Approval to Lease an Unused Public Road
- Approval to Place or Display Items on Road
- License for Food Business
- Vic Vehicle Registration
- Vic Drivers License
- Health and Safety Check
- Licensed Chefs
In the case of any interruptions of business due to any unforeseen reason, might require additional permits to be able to operate from other locations.
[hbupro_banner id=”6296″]Human Resources
To be able to run the business, an experienced manager would be required with at least 2 years’ experience of running a food business (Welch, D. and Björkman, I. (2015). Apart from that two main chefs would be required along with one part time chef. 4th member of the team would be the person who would act as a rider to deliver food. Apart from these guys, managing the Food Truck, there will be two more people who would be responsible for managing the website and app, once that is done by the 3rd party. These technical guys would not only manage the app and website but will also be responsible for making sure that proper order system is working smoothly.
Ownership Structure and Their Roles and Responsibilities
Manpower Requirements
The increase in staff will mainly depend on the performance of the business. If the business need another truck on another location, than 2 full time chefs and one part time chef will be required. The chefs will be hired through proper ad placements on recruitment websites like Seek.com.au and Gumtree (seek.com.au). For example a similar job post is placed on Seek.com.au that will is very similar to what Healthy Food on Wheels would place.
Compensation
All the staff members will be hired on annual contracts, based on their experience different salary packages will be offered to them with bonus and super annuation.
Growth Strategy
The growth strategy for the business would mainly be dependent on its quality of food, timely delivery and its USP that allows customers to calculate calories in every food they will place an order. By making sure that quality of food is not compromised, and customers are happy with what they are getting at very reasonable prices, the business is likely to succeed (Tarnay, K., Imre. S., Xu, L 2013). Over time there won’t be any changes in the structure of ownership, however roles and responsibilities might change based on how many food trucks needs to be purchase and how many chef’s and other technical staff are required.
Finance
selling price per unit
| Product Type | SIZE | Competitors Average Price | Healthy Food on Wheels Price | |
| Snack Box | 100 gms | $8 | $7 | |
| Create Your Own Box | 100 gms to 500 gms | $12 – $29 | $10 – $33 | |
| Medium Bowl | 200 gms | $14 | $12 | |
| Large Bowl | 300 gms | $17 | $14 | |
| Healthy Sets | 600 gms | $28 | $23 |
It is expected that in the first month Healthy Food on Wheels would initially serve at least 500 customers on daily basis, while operating from 9am to 10pm 7 days a week. On average, one customer would make a purchase of $15, so based on these forecast the average monthly sale for Healthy Food on Wheels would be 15 * 500 = $7500 / day
Projected Income
$7500 * 7 = 52,500 would be the average weekly sales
$7500 * 30 = 225,000 would be the average monthly sales
$7500 * 365 = 2737,500 Would be the average yearly sales.
Start-up Cost
| Start-up Costing for [Healthy Food on Wheels] – [2020] |
| START-UP COSTS | Cost ($) | EQUIPMENT/CAPITAL COSTS | Cost ($) |
| Registrations | Business purchase price | ||
| Business name | $300 | Franchise fees | |
| Licences | $5400 | Start-up capital | $400,000 |
| Permits | $900 | Plant & equipment | |
| Domain names | $20 | Vehicles | $60,000 |
| Trade marks/designs/patents | $3000 | Computer equipment | $10,000 |
| Vehicle registration | Computer software | ||
| Membership fees | Phones | ||
| Accountant fees | $2100 | Fax machine | |
| Solicitor fees | Security system | ||
| Rental lease cost (Rent advance/deposit) | $ | Office equipment | |
| Utility connections & bonds (Electricity, gas, water) | Furniture | $ | |
| Phone connection | Shop fitout | $9000 | |
| Internet connection | $60 | ||
| Computer software | $22000 | ||
| Training | $ | ||
| Wages | $260000 | ||
| Stock/raw materials | |||
| Insurance | |||
| Building & contents | |||
| Vehicle | $60,000 | ||
| Public liability | |||
| Professional indemnity | |||
| Product liability | |||
| Workers compensation | |||
| Business assets | |||
| Business revenue | |||
| Printing | $9000 | ||
| Stationery & office supplies | |||
| Marketing & advertising | $10000 | ||
| Total start-up costs | $372,780 | Total equipment/capital costs | $479,000 |
| Assumptions: | |||
| All figures are GST exclusive. |
Profit and Loss Statement
| Profit & Loss | Year 1 | Year 2 | Year 3 |
| Sales | 2,737,500 | 2,838,000 | 3,838,000 |
| Less COGS | 1,339,000 | 1550,000 | 2770,500 |
| Gross Profit | 1398500 | 1,499,000 | 1,067,500 |
| Expenses | |||
| – Accountant | 2000 | 2000 | 4000 |
| – Marketing | 10000 | 20000 | 40,000 |
| – Bank | 4000 | 4000 | 6000 |
| – Utilities | 30000 | 30,000 | 50,000 |
| – Telephone | 1000 | 1000 | 2000 |
| – Rent | |||
| – Motor Vehicle | 60,000 | 120,000 | |
| – Repair & Maintenance | 5,000 | 10,000 | 25,000 |
| – Stationary | 10,000 | 15000 | 20,000 |
| – Insurance | 60,000 | 60,000 | 180,000 |
| – Super Annuation | |||
| – Income Tax | 23,000 | 33,000 | 53,000 |
| – Wages | 260,000 | 300,000 | 520,000 |
| Total Expenses | 465,000 | 575,000 | 1,020,000 |
| Net Profit | 933,500 | 1,024,000 | 47,500 |
References
- business.gov.au, 2015. [Online] Available at: https://ablis.business.gov.au/pages/SearchResults.aspx?p=2&g=true&activities=H451202&locations=504&answers=419%2c488%2c604%2c522%2c676%2c423%2c453%2c773%2c462%2c550%2c494%2c680%2c539%2c799%2c426%2c482%2c541%2c506%2c427%2c770%2c711%2c110%2c78%2c2%2c704%2c1
- J, 2019, ‘Fast Food and Takeaway Food Services in Australia’, Australia Industry Report
- Myrick, R., 2012. Running a food truck for dum.Google Books.
- Pride, W. M., Ferrell, O. C., Lukas, B. A., Schembri, S., Niininen, O (2012) Marketing Principles. Cengage Learning: Australia.
- Srinivaas, M (2013) Successful Organizations in Action. Partridge Publishing: India.
- Simon, D., Schmidt, C (2015) Business Architecture Management. Springer: Switzerland.
- com.au, 2020, Chef Job, viewed on 19th May 2020 <https://www.seek.com.au/job/50013214?type=standard#searchRequestToken=6ccf7520-8906-43f7-8f43-cb050103064c>
- Tarnay, K., Imre. S., Xu, L (2013) Research and Development in E-Business through Service-Oriented Solutions. IGI Global: USA.
- Welch, D. and Björkman, I. (2015). The place of international human resource management in international business. Management International Review, 55(3), pp.303-322.
- L, 2020, ‘Global Food & Beverages Industry and the Effects of COVID-19 – Analysis of Regional Regulations and Other Government Policies – ResearchAndMarkets.com’, viewed on 29th May 2020 <https://www.businesswire.com/news/home/20200415005321/en/Global-Food-Beverages-Industry-Effects-COVID-19–>
