Fruiti Oasis Juice Bar Business Plan - Assignment Example

Fruiti Oasis Juice Bar Business Plan Executive Summary Fruiti Oasis juice bar will be owned by Abdel Sisi, Bashar Assad, Peter Greste, and Mohammed Morsi who will all be the points of contact for the business. Abdel Sisi will be the main point of contact and can be reached at Asisi@gmail.com. Fruiti Oasis Juice Bar will launch as a partnership form of business and will consist of four partners as stated, all of whom will have an equal contribution to the business. Thus, every individual partner will own 25% of the entire business. Mission Statement Fruiti Oasis Juice Bar’s fundamental responsibility will be to offer customers the healthiest and most delicious fruits and fruit juices that will be the epitome of true refreshment. Vision Statement Fruiti Oasis aspires to become the leading healthy fruit juice producer in Kuwait City, as well as to make the business’ logo become synonymous with nutrition and delicious juices. Goals & objectives Provide the best quality service and products. Develop a market through providing unexplored tastes of various fruits and fruit juices. Achieve at least 25% of the total market share for fresh fruit juice in Kuwait City. Create brand awareness around the business and extend the market across other towns in Kuwait within the first six years. Overview of how the venture was conceived The group setting up this juice bar settled on this business opportunity because there is a very high demand for fresh fruit juice in Kuwait City. Product or Service Description Fruiti Oasis Juice Bar will offer fresh fruits and fruit juices. The fruit bar is going to produce high quality and natural fruit juice using three different fruits appropriate for every age group and will be based on the fact that fruits and fruit juices are popular among Kuwaitis. The fruit bar will serve coconut, pure melon, and sugarcane juice in clear cups in a way that no one in the market is doing. Market Analysis The target market for Fruiti Oasis Juice Bar is the upper and middle class people of Kuwaiti City, particularly those who are working in the City for both males and females. The business will be able to target the elderly who do not want to take additional and fancy ingredients, as well as the younger generation between 25 and 45 who would are increasingly health conscious. Moreover, there are mothers who do not want their children to use products that are unnatural. It is the business management’s opinion that this will allow the juice bar to target a wide range of demographic customers, including children, young people, and the elderly. A PEST and SWOT analysis are also carried out to determine market suitability. Competitor Analysis Kuwaiti City does not have exclusive juice bars and, although businesses like ice-cream parlors, bakeries, fast-food shops, and restaurants also serve fruit juices, they only do so as an alternative to their main business. Competitor Analysis Kuwaiti City does not have exclusive juice bars and, although businesses like ice-cream parlors, bakeries, fast-food shops, and restaurants also serve fruit juices, they only do so as an alternative to their main business. Media used for promotion will include billboards, newspapers, and the internet. Location & Layout The business will be located in a highly visible retail location, which will either be within a mall-type setting in an area with high traffic or as a stand-alone property that is in an area with high human traffic. This property is going to be a rented one because it would be unwise to buy property, as property prices in Kuwait City are very high. With regards to layout, the logo for the company will be very visible both outside and inside the establishment, particularly as it will represent Fruiti Oasis to its customers. Management Team The co-owners of the business will make up the management team. Abdel Sisi will manage the daily operations of Fruiti Oasis, Bashar Assad will be the Human Resource manager, Mohammed Morsi will be the sales & marketing manager for Fruiti Oasis, and Peter Greste will be the company CEO. Table of Contents Contents Page 1. Business Description……………………………………………5 2. Product Description……………………………………………..6 3. Market Analysis……………………………………………...…..8 4. Competitor Analysis…………………………………………….12 5. Marketing Plan…………………………………………………..13 6. Location & Layout……………………………………………….15 7. Management Team……………………………………………….16 8. Financial Projections……………………………………………..17 9. Loan Proposal…………………………………………………….19 10. Work Cited……………………………………………………….20 11. Appendices……………………………………………………….21 Business Description Fruiti Oasis juice bar will be owned by Abdel Sisi, Bashar Assad, Peter Greste, and Mohammed Morsi who will all be the points of contact for the business. Abdel Sisi will be the main point of contact and can be reached at Asisi@gmail.com. Fruiti Oasis Juice Bar will launch as a partnership form of business and will consist of four partners as stated, all of whom will have an equal contribution to the business. Thus, every individual partner will own 25% of the entire business. Mission Statement Fruiti Oasis Juice Bar’s fundamental responsibility will be to offer customers the healthiest and most delicious fruits and fruit juices that will be the epitome of true refreshment. The business will emphasize on creating a friendly environment for the employees and customers, while also dedicating itself to providing alternatives to fast foods for our customers. Our value will be derived from providing customers with a one-of-a-kind, refreshing taste of fruit juices. With a resolute commitment to creating value for the customer, we aim to sustain profitability to continue serving our customers for years to come. Vision Statement Fruiti Oasis aspires to become the leading healthy fruit juice producer in Kuwait City, as well as to make the business’ logo become synonymous with nutrition and delicious juices. Goals & objectives To provide the best quality service and products for our customers. To develop a market through providing unexplored tastes of various fruits and fruit juices to our target segment. To achieve at least 25% of the total market share for fresh fruit juice in Kuwait City by the end of the first three years. To create brand awareness around the business and extend the market across other towns in Kuwait within the first six years. Overview of how the venture was conceived The group setting up this juice bar settled on this business opportunity because there is a very high demand for fresh fruit juice in Kuwait City. We will be carrying out our business on a small scale as a company that only manufactures fruit juice, unlike some of our competitors who have diversified business units. During conception, we decided that the business’ target would be to penetrate the market and gain market share using only a select number of items for the first three years. If the business becomes a success, it was decided that we would begin to expand by the fourth year. Taking these issues into account, we decided to call our business Fruiti Oasis Juice Bar so as to attract customers, especially during the hot daytime. Product or Service Description Fruiti Oasis Juice Bar will offer fresh fruits, fruit juices, and fruit shakes. The fruit bar is going to produce high quality and natural fruit juice using three different fruits. The products are going to be appropriate for every age group and will be based on the fact that fruits and fruit juices are popular among Kuwaitis but the demand is not supported by market supply. In deed, it can be argued that there is a high demand for this kind of business and it is only that most entrepreneurs have not realized it (Palmer & Palmer 28). The fruit bar will serve coconut, pure melon, and sugarcane juice in clear cups in a way that no one in the market is doing. In this manner, it will be possible to create demand, while also drawing customers away from the market already in existence. The fruit bar’s strength is its healthy nature, hygienic production, lack of added ingredients, and a natural taste. With regards to the watermelon, most people in Kuwait buy the fruits in the market at high prices to carry home and serve, a process that is troublesome. Instead, Fruiti Oasis will serve the melons with the exact taste but without requiring the customers to cut the fruits personally or to make juice, while also removing the seeds. In short, the bar will make it simpler for those who like melons to enjoy them without having to deal with the cumbersome fruit. In addition, because the fruit will be provided all year round, the price fluctuation will be minimal. With regards to the sugarcane juice, the juice bar will seek to make it easier for customers to have sugarcane in public, which can also be quite cumbersome and irritating to some (Palmer & Palmer 28). For sugarcane juice, the juice bar management will ensure that sugarcane handling in public sugarcane is hygienic by not requiring the customer to touch the sugarcane, which is a major deterrent for Kuwaitis eating sugarcane. This specific juice is particularly rich in sucrose that is good for the brain. Finally, coconut water is a popular drink in Kuwait and it is our opinion that, if people were allowed to buy it in cups, sales would increase. Fruiti oasis will provide coconut juice as clear coconut and pulp coconut juices. While there are competitors selling fresh juice in the market, most are not dependent on the product and, therefore, have no specific strategy for the market (Palmer & Palmer 29). To protect the business from additional and excessive competition, we will develop a differentiation strategy based on the brand. Fruiti Oasis’ brand will be differentiated along the lines of quality, uniqueness, and reasonable pricing. In addition, the bar will also offer excellent customer service and a serene environment to improve brand strength. Market Analysis The target market for Fruiti Oasis Juice Bar is the upper and middle class people of Kuwaiti City, particularly those who are working in the City for both males and females. By ensuring that the juice products have no additional color or flavor, the business will be able to target the elderly who do not want to take additional and fancy ingredients (Allis 32). In addition, there are some among the younger generation between 25 and 45 who would are increasingly health conscious and do not want additional chemicals in their foods and beverages. Moreover, there are mothers who do not want their children to sue products that are unnatural. It is the business management’s opinion that this will allow the juice bar to target a wide range of demographic customers, including children, young people, and the elderly. Fruiti Oasis can satisfy both those who want juice and fruits that are organically grown and are health conscious, as well as those who focus on hygienic conditions, nutrition, and taste. Also, the moderate pricing will ensure that the business can target both and medium income earners. However, it would be impossible to go for the whole potential market, which means that we had to select a specific target market and communicate with them in selling our product (Allis 33). Because the service Fruiti Oasis is offering is exclusive and unique, we had to identify a segment that wants this exclusive and unique service, as well as which could afford to pay for it. Therefore, the target consumer profile will involve people in the middle and upper class of Kuwaiti City society aged between eighteen and fifty-five. Moreover, the target market will be made up of people who are working professionals, businesspersons, and university students, while the potential consumers will be mainly from the Kuwaiti City urban and suburban area. Income levels for the selected target market will be those with an income of around 450 KD monthly. In addition, they are highly to moderately health conscious, while they have an ambitious and gregarious personality, as well as a moderate to high attitude towards outdoors dining (Allis 33). Finally, they also have moderate to high willingness to experiment. PEST Analysis Political Factors The Kuwaiti government has in the last ten years pursued a strategy of diversification from the oil and gas industry, which has seen added investment in agricultural activities. Therefore, there is continuous supply of fresh produce including fruits as the government subsidizes the farmers, including subsidies on inputs and machinery (Kennedy 37). In addition, trading policies and taxes pursued by the Kuwaiti government have sought to make the market more liberal, meaning that it is becoming increasingly easy to import fresh produce from other countries, such as Egypt. Economic Factors The Kuwaiti economy has not been spared by the financial crisis of 2008/2009 and the subsequent economic recession, although income from the oil and gas sector has cushioned the impact of the crisis. However, the Kuwaiti economy has begun to regain its vitality gradually with growth anticipated to be supported by increased government spending and private consumption (Kennedy 38). It is also expected that private investment will increase with improving Kuwaiti business conditions, especially with significant expansion of the non-hydrocarbon sector. Finally, rising FDI rates will have a positive impact on businesses and spending power. Social Factors Kuwait has at least 2.7 million people, of which 1.2 million are not citizens and 1 million are temporary workers. Kuwait is highly attractive for immigrants due to the high salaries and its welfare economy with most coming from India and South-east Asia. Kuwait has a social structure based on heredity and wealth, consisting of the ruling family, merchant families, Bedouins, Arabs from neighboring countries, and foreigners. This sharp contrast in class structure is exposed in the comparison of immigrants with limited rights and wealthy native Kuwaitis (Kennedy 38). Moreover, social mobility is difficult due to clannishness, cultural heritage, and government initiatives. Finally, the adult literacy rate was 93.9% in 2008, especially in terms of scientific and education literacy. Technological Factors Kuwait has no high-technological solutions that are home-grown, although the government now allocates at least 13% of its public expenditure to education, which can be compared to how OECD countries allocate public funds to technology education (Kennedy 40). SWOT Analysis Strengths The present market does not offer specialized fresh fruit juice, giving the business first mover advantage The fruits to be used are organically grown without preservatives, which is preferred by the increasingly health conscious society The fruit juice is hygienic, nutritious, and healthy Weaknesses Fresh fruits are difficult to find in different seasons and times of the year, meaning the business has to stock fruits and incur additional costs The initial set up cost is relatively high The business’ position in the experience curve will be initially high because of lower cost effectiveness First mover advantage is not sustainable, especially when there are new entrants. Opportunities The government is increasing subsidies to the agricultural sector and liberalizing the markets, allowing for an increase in the supply of fruits Increasing technological knowhow in Kuwait will enable for online advertisement and probable e-commerce platforms to sell the business’ products If the business is successful, Fruiti Oasis will have the opportunity to expand to other areas in Kuwait. Threats Entry of competitors into the market that may threaten the business in the long run Preservation of fruits may be difficult in the beginning Failure to maintain consistent service and product quality may force customers to move to other substitute products Competitor Analysis Kuwaiti City does not have exclusive juice bars and, although businesses like ice-cream parlors, bakeries, fast-food shops, and restaurants also serve fruit juices, they only do so as an alternative to their main business (Kennedy 51). These do not possess any expertise in the juice segments, while their menus only consist of local fruit juices and do not serve foreign fruits like sugarcane. In addition, they only use juice extractors and normal blenders and lack up-to-date approaches and techniques. These competitors, who include Almarai, United Beverage Company, Wazzan Company, JAWS, Al-Sayer group, and Aleid Food Company, do not have fresh fruit juice as their main competency (Kennedy 52). However, Wazzan Company and Aleid Food Company hold the largest market share for the juice sector. These companies are all looking to fulfill the demand of the Kuwaiti City fruit and beverage industry and are Fruiti Oasis’ main competitors. They sell various beverage types, including carbonated drinks and preserved fruit juices to the market. Looking at the retail stores, most of them sell foreign-sourced fruit juices and ensure that these are available to the market at anytime of the day. The beverage industry has grown significantly in Kuwait as can be evidenced by the many foreign juices present in the market, as well as the increased consumption (DataMonitor 44). This trend has increased and most of our competitors have taken advantage of the fact that people want to take juice on the move, thus packaging them in recyclable cups. In addition, most of our potential competitors have taken advantage of the demand for instant juices that are ready-to-drink. The threat of new entrants in the market is high. Launching a fresh fruit juice bar in Kuwait City is a new concept and Fruiti Oasis management believes that if we get it right in the initial stages of launching, the business can be successful in the long term. In the middle and upper classes of Kuwait City’s society, there are many consumers wanting to try out new products and, on launching the business, the prime concern will turn to satisfying the target audience and ensuring that they stay as loyal customers (DataMonitor 46). However, we also believe that this new and untapped market will attract new entrants, especially if Fruiti Oasis is successful. This is because fresh fruit juice business will be very profitable in a number of years. There are no real barriers to entry in this market and, in the initial stages; Fruiti Oasis will not need to consider rivalry with established companies because this is a new market opportunity and the business will use new concepts (DataMonitor 47). In addition, with regards to substitute products, some restaurants in Kuwaiti City can be identified that offer preserved fruit juice; although we do not feel that they will threaten the fresh fruit juice market yet. However, it is expected that our competitors will begin to offer differentiated fresh fruit juice in a few years after the business is launched. Marketing Plan The main promotion technique for Fruiti Oasis will be aimed at the consumers themselves. The target will be to satisfy and please the customer, which it is hoped will result in them discussing the fruit bar with their family members and friends (DataMonitor 57). There will also be an inauguration promotion to help the potential consumers learn about the business and the products that it offers. As more businesses enter the Kuwaiti market, promotion is increasingly important in order to gain competitive success. During the promotion, the goal will be to show Fruiti Oasis as offering unpreserved and fresh fruit juice from organically grown fruits. In addition, pricing of the business’ products will be done according to availability and demand. With regards to the media that will be used for advertising, billboards will be chosen as they are low cost-per-contact channels. The focus will be on making the billboards as colorful and attractive as possible, as well as placing them where people are concentrated the most (DataMonitor 57). Moreover, the billboards will be relatively large so as to attract the most attention and not be overshadowed. Another form of media that will be used is through newspapers, which also have relatively low cost-per-contact and is a good way to reach many people with little effort and in a short time. In the initial few months of Fruiti Oasis’ business, we will print ads towards the first pages of the newspapers in order to grab attention of the potential consumers (DataMonitor 58). Afterwards, the ads will be moved to the latter pages and eventually stop after six months. Finally, future ads in newspapers will be made for notifications on new products and price changes. Additionally, promotion will also be carried out online through the use of Facebook, which will provide a link to the business’ website. The website will provide all the information about the business, including location, pricing, and product offerings. Specific objectives for this promotion budget include: Advertising Direct promotion of sales Push strategy to increase sales to channel members To fulfill these objectives, the promotion will seek to carry out several tasks. For advertising, the main targets will be to place product advertisements, as well as use pioneering advertising to inform the consumers about the benefits and advantages of using the product, as well as its effectiveness in repelling all types of bugs and insects. For direct promotion of sales, the tasks to be completed include point of purchase, samples, and coupons. Finally, the tasks involved to meet the third objective will include personal selling, public relations, and direct marketing. Objectives Allocation Percentage of promotional Budget Advertising $4,000 40% Direct promotion of sales $3,000 30% Push strategy to increase sales to channel members $3,000 30% Location & Layout The business will be located in a highly visible retail location, which will either be within a mall-type setting in an area with high traffic or as a stand alone property that is in an area with high human traffic (Juice Gallery Multimedia 19). This will enable Fruiti Oasis to be instantly recognized by residents for its location, as well as types of juices. The area where the business will be located will be frequented by students as it is close to the university and by working citizens because it is located near the bus station. This property is going to be a rented one because it would be unwise to buy property as property prices in Kuwait City are very high. Rent rates in the location are about $3000 each month and will be prepaid for five months, thus will be $15,000. We will also recruit and train five employees, as well as a guard and a cleaner. One will be hired as a manager, while the other four will be hired as waiters (2), a cashier, and an expert juice maker. With regards to layout, the logo for the company will be very visible both outside and inside the establishment, particularly as it will represent Fruiti Oasis to its customers. In addition, the main colors of the establishment will be yellow and green, which are representative of health awareness, fitness, and freshness (Juice Gallery Multimedia 21). Additionally, the name of the business will be done in a dynamic and graffiti-like style to attract the attention of younger people. The interior will have a huge free space that will enable the customers feel comfortable, while it will also be calm and quiet with slow music playing during the day and two big screens to help customers catch up with sports and news as they relax in the establishment. Management Team The co-owners of the business will make up the management team. Abdel Sisi will manage the daily operations of Fruiti Oasis and has two years experience working for a natural food store during his holidays. Bashar Assad will be the Human Resource manager and has at least one years experience selling juice at the University canteen. Mohammed Morsi will be the sales & marketing manager for Fruiti Oasis and has been involved for at least one year in selling the University’s weekly magazine, which we hope to take advantage of with our student target market. Also, Peter Greste will be the company CEO and already has experience running a business as he owns a printing business within campus. An additional manager will be employed to fill the position of Business Development Officer and he will be expected to have qualifications in Business Administration. At the moment, we will not be using any consultants because of financial constraints but we hope to do so in the future. Financial Projections Sales Forecast Product Price per unit Number of units per year Water melon juice $2.5 25,000 Sugarcane juice $2,5 15,000 Coconut juice $2.5 20,000 Income Statement $ $ Revenue 45,000 Less: Expenses   Fixed Expense 15,480 Variable Expense Supplies 24,000 Electricity Bill 1,800 Telephone 180 Advertising 10,000 Miscellaneous 1,000 Depreciation 4,083 47,543 EBIT (2,543) Interest (6,400) EBT (8,943) Tax 0 Net Income/Loss (8,943) Cash Flow Statement $ $ $ Cash Receipts 45,000 Cash Disbursements   Fixed Expense 15,480   Variable Expense     Supplies 24,000     Electricity Bill 1,800     Telephone 180     Advertising 10,000     Miscellaneous 1,000     Interest 6,400 34,380 (49,860) Cash Flow (4,860) Beginning Balance 7,175 Ending Cash Balance 13,655 Balance Sheet Fixed Assets $ $ $ Equipments 9,600     Depreciation 1,920 7,680           Apparatus 490     Depreciation 163 326   Interior 10,000     Depreciation 2,000 8,000   Total Fixed Assets     16,006 Current Assets       Cash 2,315     Prepaid Rent 15,000     Supplies 9,678   26,993 Total  Assets     43,000         Long-Term Liability       Accounts Payable 1,000     Bank Loan 12,000 13,000   Total Equity       Owners’ Equity 30,000     Retained Earnings 0 30,000   liabilities & Owner’s Equity   43,000 Loan Proposal Projected Startup Costs $ Initial lease payment and deposit 25,000 Working capital 65,000 FF&E 25,000 Leasehold improvements 10,000 Security deposits 2,500 Opening supplies 10,000 Company vehicle and lease deposits 20,000 Marketing budget 10,000 Miscellaneous and unforeseen costs 7,500 Total Start up costs 175,000 Exit Strategy If Fruiti Oasis Juice Bar is successful, the management team has decided that we may seek to sell on the juice bar for a substantial earnings multiple to a third party. Most likely, it is possible that the business will hire a qualified broker in order to sell of the business on behalf of Fruiti Oasis. We believe that, based on the numbers, Fruiti Oasis could fetch at least four times its earnings. Works Cited Allis, Janine. The Secrets of My Success: The Story of Boost Juice, Juicy Bits and All. Hoboken: Wiley, 2013. Print. DataMonitor. Boost Juice Bars Case Study: Marketing Smoothie Bars as a Healthy Alternative to Coffee Shops. London: Datamonitor, 2008. Print. Juice Gallery Multimedia. Real-world Juice & Smoothie Bar Business Start-Up Software Package. Chino Hills, Calif: Juice Gallery Multimedia, 2013. Print. Kennedy, Paul D. Doing Business with Kuwait. London: Global Market Briefings, 2005. Print. Palmer, Katrina. & Palmer, Graham. Juice Junction: Juice & Smoothie Bar Startup Guide - Start Your Own Mobile Juice Bar. Shaftesbury: Kyrios, 2007. Print. Appendices Appendix 1: General Assumptions Year 1 2 3 Short term interest rate 9.5% 9.5% 9.5% Long term interest rate 10.0% 10.0% 10.0% Government tax rate 33.0% 33.0% 33.0% City tax rate 5.0% 5.0% 5.0% Personnel taxes 15.0% 15.0% 15.0% Appendix 2: organizational Structure Read More