The Business Idea of Food Cart Services - Essay Example

? Table of Contents Introduction 2 Infrastructure 3 Partner Network 3 Core Capabilities 4 Value Configuration 5 Offer 7 Value proposition 7 s8 Target customers and customer relationship 8 Finance 9 Finance 9 Revenue 11 Conclusion 12 References 14 Introduction It is rational before starting any business or operations to evaluate the idea and judge that the business would offer. The competition around the markets is increasing and it is not limited to any particular industry or economic sector every part of the economy is affected by it. Thus business plans and structures are designed to provide the visual presentation of the future of the business idea that is under consideration. Business plans discuss every aspect from marketing to investment, from target market to production/ services, from human resource to workforce that would be required to be employed by the organization. It is not only the small businesses or medium sized organizations that would require the business plans in order to minimize the risk for them. Larger organizations even multinational organizations are seen often designing and working on marketing or business plans before starting every new project or business. The most important role that the business plans play for the MNEs is that in this era of globalization they are always focusing on expansion and growth into new markets with potential. Thus before entering the market, starting operations and making any kind of investment a business plan is designed that would give complete required details that would be necessary for making the decisions. Business plans often make it much easier for the organization’s management to make decisions that are optimum and rational as they are making decision on the basis of researched material that is authentic and allows them to evaluate the idea completely however unforeseen circumstances are an exception. In today’s corporate world competition has increased many folds continuous development and innovation have become requirement in order to sustain in the market. Therefore it is not the liquid assets of the company, Non-current assets, finance or capital available that would ensure the competitive advantage of the business or the organization. it is the intellectual capital that would gain the success in the market thus business plans or market plans even if not eventually used for making their desired decision present an asset and research material that would serve for the purpose of the organization and its management anytime. Different business models have been presented that can be used for designing the business plans. For our current business plan for which the business idea of “Food Cart Services” have been chosen (Sommer, 2012). . In order to evaluate the idea through a business plan Osterwalder style business model analysis would be used that presents an in depth information (Osterwalder et al2010). It provides a structure for proper documentation and texting of the business ideas whether for the development of new or documentation of existing. The business idea that has been chosen is vast thus osterwalder business model doesn’t allow the information to lose focus thus there is not any unnecessary explanation or information presented in the model (Verstraete & Jouison-Laffitte, 2011). Business model provides a proper structure thus serves a purpose of strategic management for the business or organization. Below the report presents complete business plan of the “Food Cart Services” following the structure given under Osterwalder Business model: Infrastructure The initial decision of any business operation is regarding its infrastructure. It implies that what would be the resources required, personnel required, public relations or the contacts would be necessary for running the operations for example existing suppliers in the market, raw material and other production equipment providers. Besides this business relations infrastructure also determines the capabilities and set of skills that would be necessary to run the business and fulfill its requirements (Eweje & Perry, 2011). . It would thus also facilitate the recruitment of the workforce in organization and would allow the integration of the operations in an optimum way describing the infrastructure of the business (Grigg, 2010). . Partner Network The business concept relates the business of “Food cart services” to the industry relies on both mobile and non-mobile food cars that offer ready to eat food and snacks to the walking nearby customers. The industry is mainly classified as accommodation and food services where the part of food services is to be done. The service that it provides for the consumers of food by providing them ready to consume nutritious food at their doorsteps, takeaways on sidewalks, Malls and home deliveries all would be included in the services that would “Food cart service” business would provide (Debonis et al 2003). It is the initial requirement of the business that there is access to the fresh food and all the ingredients required for the menu that is being offered by the food cart. Thus the suppliers of all the material like sauces, vegetables, meat etc. would have to be located that is the first step in the creation of the value chain of the business organization. Thus the list of potential suppliers have to be made that can get timely delivery of the material required as items required must be fresh as they are perishable and cannot be stored for long. Another thing would be the designing of the food carts on which the food is to be provided therefore design, brand name by which the products would be marketed would have to be outsourced to a professional designing firm. Besides that legal formalities would have to be fulfilled regarding the permission for the food carts that can be placed at the certain location. The structure and ideas of the existing companies in the business can be taken and surveys can be conducted to understand the business operations in detail. These are the major business partners that however besides that for the marketing personnel would have to be made and relations to be maintained with the customers in order to ensure long-term relations. The network of the business definitely includes the customers and value chain is not complete without the strong customer base. Therefore it is important that the partnership with the customers is formed business is little different than the usual restaurant business thus networks would have to formed in a different way. Offices or companies in which the Non-mobile food car would be located should be contacted and sample meals would have to be offered in order to attract them to the quality that is being offered to them. Thus deal of monthly/ weekly or alternative days for the supply can be formed. Core Capabilities Business idea is relating to the “Mobile food services” industry thus the revenue generating activity is the meals that would be provided. Thus the major skills would be regarding the preparation of the food and its management how it is presented. The most important personnel of the business would be the sheaf or the cooks that would be making the meals however besides ensuring the quality and taste of the food that would be provided to the customers’ personnel must also possess interpersonal skills. This is the food cart business unlike regular restaurant business menu would be ready to eat food that would be prepared instantaneously and served mostly on the spot thus the preparer of the meals would be serving directly unlike regular restaurant where sheaf or cook have no interaction with the customers. Thus their skills of communication and presentation would have to be developed as they represent the business on the spot (Mazzucato, 2002). . Management of the business, inventory management and customer resource management would be a necessary capabilities that would be required for the smooth running of the business. Inventory management is the most important aspect of the business as it would be almost like just in time inventory system that has to be followed. Besides that relationship with the customers and other business partners would have to be manages thus the communication and interpersonal skills would have to be enhanced (Viardot, 2011). The management teams that is to be hired the business should be qualified personnel that has a wide range of experience in working in a food industry. The management team should be competitive enough so as to handle the work load and pressure so as to grease up the smooth running of the operations of the business as benefit the business as a whole. As the business shall be operating at different locations and there shall be competitive and complex everyday tasks so as experienced management team will be hired which shall not be too huge in numbers but effective in operations. According to the requirement of the business there are jobs that need to be designed and allocated to different personnel in the organization so as to determine the task that is required to be fulfill from every employee of the organization. The organizational chart would be designed that would determine the level upon which the employee fall and assign the task. It then becomes convenient for the management of the organization to determine that how the job should be done according to the tasks required within the organization. The business is of mobile food so the specific job description that is required are of management related to sales, finance and operations which they will overlook and handle and report to the CEO. Then at the supervisor level the need of the supervisors who work as a medium of conveying the message from the managers to the workers and along with supervise the tasks that their juniors are assigned. At the labor level there are workers who do the physical labor and make process possible Value Configuration It is the blend of services that the business of “Food cart services” would be offering it is not only the take away that the business would be doing. Food carts would have to maintained it is a necessary activity that would have to be followed as the hygiene in the food industry has to be maintained as it is the major factor that the customers are concerned for besides that it is also a legal requirement that the business would have to follow as the food and inspection department has the requirements that has to be followed and quality standards that have to be assured. The service and the attitude of the personnel providing the meals and taking the orders would be the complimentary factor however it would still matter a lot especially in the case of home deliveries. Service and attitude of the staff with the customers would make the customers feel valued and satisfied towards company or business. Thus besides the quality of the food that would be offered quality service also matters and in our case of “Food cart business” where there would not be no dine-in like restaurants thus direct interaction with the customers has to be made profound. As the food cart service would be offering ready to eat food or the meals that could be prepared on the spot with little waiting thus the preparation, service along with the quality has to be maintained. Important factor in the business of “Food Cart service” would be the menu that has to be designed it would be concise however totally directed towards the targeted customers thus giving them the easy choice as per taste and assuring the quality that is being provided to them as it is the quality and taste of the food that would ensure repeated visits and transactions with the customers. The scope and nature of the business requires very high time management that goes for all the formats of the services that are being provided by the business take away or home deliveries. Thus the vehicles provided to the workforce for the home deliveries have to be maintained and time standard for delivery to be assured and recorded thus that would assure the efficient service by the staff. Offer Value proposition This market and the business of “Food cart services” relies on both mobile and non-mobile food cars that offer ready to eat food and snacks to the walking nearby customers. The usual services under this industry are the hot dogs and ice-creams provided in the trucks thus they en-route their way as per the location of their target customer not location of their main food cart that provides the ready meals for mobile food services. The products that the mobile food car provide are the different types of food that it provides. This contains a variety of food mainly classified as fried and cooked. In the list of food the business will provide a range of fried food which include fried chicken, French fries, bagels, hotdogs, fried cheese curds, pizzas, pasta, burgers, rice and spaghettis etc. serious thought is given to the concept of easy to carry around food so that the customers which require to eat on their way as they do not have time to take a break from their busy schedule the food would be easy to handle and eat. The food that is to be provided by the mobile food car is to be made available in the mobile food cars where it is prepared with the final cooking and frying. There is a home delivery facility for the customers and thus they will be provided by the food at their doorstep whatever meal they order available in the menu. The home delivery over the order is to be delivered from the preparation unit which would be situated near the residential areas and areas where the offices are situated and mobile food delivery will be done with ease and pace so as the food to be hot when delivered. Thus at the initial stage of the business home delivery would be kept limited to the nearby areas so as to manage the costs associated and easy management and delivery of the food. Customers Target customers and customer relationship To introduce the mobile food car product or to even devise a future strategy it is necessary for the company to understand the consumer traits and identify their tastes, preferences and the factors that influence their decision. The fact that ready to eat food has shown much growth in US shows that the industry is not only influenced by expanses it is the consumer tastes that have been shifting (Mariusz, Krzysztof, & Ingram, 2005). The customers in US are becoming more health conscious and with the increase in the level of obesity consider the calorie they consume and thus the provision of healthy food is much of a better advantage for the businesses which will provide competitive edge. The targeted customers are the people who want to save time by ordering ready to eat food and saving time along with the consideration of the health consciousness and thus wants healthy food at their doorsteps. The targeted customers include the walk in customers that want to eat a healthy food that is delicious as well, the residents who want ready to eat food delivered at their doorsteps and the people working in the offices who want to have food in their office (Nykamp, 2001). Promotional activities and the theme adopted in the promotional activities would set the tune for the product and directly send the message to the target market or the customer. It is the initial promotional or marketing activities that are important for the new business thus they would make the target customer realize of the new business or “food cart service” availability. It is important to use the right and necessary promotional activities that would make the customers realize the launch and introduction of the products, to whom the products are being offered, how the products can be differentiated form the other products of the competitors and what is the utility of the products. The business is on a short scale and thus in the start there should be advertisement by distributing pamphlets in the offices and houses with the name properly mentioned along with the variety of food that it offers. Thus target customers identified that of employees in the nearby offices, residents of local community and universities or college students in the local area of operations where the food car/ carts have been set. Therefore the initial stages of the business would focus on the direct marketing to the target customers that would also provide a chance to the marketing workforce to establish some kind of link or contact with the customers visited and attitude would definitely put some first impression on the customers thus a first step towards ensuring the healthy relationships with target customers. Local television advertisement can be done in order to create awareness about the business however it can be done later after a month or so thus initially pamphlets would be focused on (Anderson & Kerr, 2002). Besides the initial contact of the marketing personnel with the customers through direct marketing customer data base should also be collected that form a huge asset for the business and when they are directly contacted and approached by the company it would give value to them and enhance the relations with the company. It is important as the business is new feedback from the customers is taken especially from the first 100 customers as it would help in organizing and any changes to be required made in the very initial stages of the business. Survey forms would also gather the details of the customers if its residents their name and contact details, if its office employees then their office details. Finance Finance or capital is the monetary base on which the business operations would run thus its management, structure and management of expenses is very necessary for the smooth and successful running of the business. Finance For the businesses such as of food cart there are many sources available to finance the business. The option of raising finance by public offering of shares is available if the business is made listed as company. The business is a small business and might not opt for listing in the stock exchange in the startup but it may be registered as private company or partnership. The business is intended to be registered as a private limited company. The available sources of finance are as follows: Share Capital, by which a reasonable amount of funds can be generated in order to finance the operations of the company. The company shall issue the shares at the price of $10 per share and shall issue 5000 shares and thus raising $ 50,000 as share capital. Debentures, by which the company can raise finance by issuing loan at large to the investors. The company shall issue 300 numbers of $ 1,000 debenture which gives the interest at the rate of 3% per annum. Bank Loans, which can be used in order to finance the working capital of the company and long term assets of the company. The bank loan can be in many forms. The company will arrange for the overdraft facility of $ 10,000 thus the company shall be able to get the advance of $10,000 from bank. Bank Loan can be arranged for a long term finance if needed in the future. In the options discussed above the company shall be able to raise the total sum of $ 80,000 in terms of share capital and debentures which shall be enough in order to cover the startup costs of the company. But before issuing shares and debentures the costs incurred in registering the company shall be bearded by the owner and can be reimbursed afterwards. The finance that is raised in the forms of share capital and debentures shall be used for the purchase of the long term assets such as vans and equipment and an amount shall be retained so as to cover the first three months expenses of the company. The finance available from bank in the form of bank overdraft shall be used to finance the operations of the business. The uses of the raised finance are allocated as follows: Items Amount Food Trucks $ 25,000 Cooking Equipment $ 10,000 Office Furniture $ 5,000 Computers $ 5,000 The remaining amount shall be used to finance the operations of the company in the initial months where the revenue generation is expected but the operations shall be needed to be funded. The initial cost would also include the trial runs of the production of the food that menu is offering would have to be bearded. One of partners in the networks of the business are the customers that are companies with offices in the nearby area. Thus the sample meals that have to be offered as a token for the long-term relations are also the costs that the business would have to bear in the initial period. It can also be said that these costs can be associated to initial marketing that are due even before the business has actually started its operations. Promotional activities are being conducted by the business before and at the very earlier stage only the pamphlets and brochures are only source of promotion that is being used however at not so later stage (just within a month) advertisement in local newspaper and television are also part of the plan thus there are some costs associated to them. The cost distribution is shown as follow: Some other business associated costs would be wages of the staff that is directly related to the preparation of food administrative expenses that would include the salaries of all office staff, selling and distribution include the advertising expenses. Revenue The revenue generating activity for the business is meals or food that they are offering thus due to the nature of target customer prices of the food that the mobile food car delivers should be reasonable and cheaper than the restaurants. The business cannot charge premium pricing as the concept of mobile food car is taken as easy food at a reasonable price. The prices for different food will be different and the list is given below: Prices would obviously vary as initially at the introduction stage of the business prices have to be kept as to attract the customers understanding their nature and level of affordability. At the later stage prices can be increased however that would be at least after one complete season of the operations but still they cannot be that high that they would discourage the target customers. It would be the policy to reach breakeven in the early stage of business thus an increase in prices is expected over some time as inflation and increasing costs of the business are the major factors that would influence the price of business. Analyzing the industry of food cart service and mobile foods an idea of the sales over some period can be projected and predicted as it can be used standard and target for company or business workforce to be followed. Projection of the sales over some time have been shown below in the table with illustration of the expectation of the ach product that “Food carts” would offer: The above table shows the projection of the sales for 12 month period it is expected that sales would be increasing quarterly. Conclusion “Food Cart Service” relating to the food industry is a potential business as revealed through the research conducted over the potential of the market and industry. Business offers much growth however it has associated costs and risks that must be overcome by the business management in order to deliver success and growth. Business plans describes and designs a small structure for the organization it is path that should be followed if the business idea is to be pursued. It explains that “food carts” would be placed in the area near to offices and malls where market has ample walking customers thus making ready to eat food available to them who want quick service and delivery of food especially to office going portion of target who have less time during lunch hours. Besides the takeaways home deliveries are also major aspect of revenue generating services that business would be offering thus strong and efficient management is required especially regarding inventory as it would be more of just in time inventory that would be operating. Strong relations with suppliers would matter a lot for business and is of most importance in business partnerships formed in value chain. Business idea has the scope to grow and if managed with due efficiency would definitely show growth right from very first year of operations however breakeven could be achieved in first and second quarter however later periods would offer higher profits. 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