Food Truck Development Plan - Assignment Example

? Food Truck Business Plan Product and Service The underlying concentration of the company’s operations will be to offer freshly prepared arepas and beverages to people in Savannah in Georgia and Beaufort in South Carolina. The business will operate entirely in a mobile capacity through its food wagon. Arepas is a Latin American flatbread made of ground maize dough. It is a cuisine consumed on daily basis in Colombia and can be split to make sandwiches. Arepa Truck Food Inc. intends to expand its operations and purchase a second wagon to operate in different regions. The company also plans to do a considerable expanse of sales through cookery, delivery of arepas, and having the wagon located near and in military bases, port of savannah during weekends and local festivals. An estimate of ? of the total sales revenue is expected to come from these truck operations. In order to avoid and reduce inventory spoilage, the company plans to offer delivery services of food and beverages to third party cafes, restaurants and other food serving points for the period of intemperate conditions. Arepa Food Truck will stay true to its name by offering different arepa varieties. The hallmark of the unique style of the organization is the combination of arepa with cheese, avocado, jam, egg, and jelly. The different varieties offered by the company include the basic grilled arepas (arepa Valluna), arepa de queso, arepa Choclo (with cheese), arepa de huevo (with egg), and arepas rellenas (sandwich arepas). 2: Market Feasibility Currently, the United States economy is still recovering from the 2010 economic recession. Though this recession affected many businesses, Arepa Truck Food Inc. is anticipated to make profits. The company will sustain its profitability from the high sales margins from the sale of its products. Moreover, the business is mobile and can be shifted to regions where it can make considerable sales. Presently, there are no high quality, Latin American cuisines being offered in both Savannah and Beaufort. Arepas Truck Food Inc. will offer freshly prepared arepas with a diverse organic menu that will permit the patrons to customize their arepas as according to their preferences. Every customer order will be expected to take not more than three minutes. One of the significant concerns for the business is how to price its products affordably during seasons of thorns of oil prices (Martins, 2013). The food and beverage retail industry has experienced an enthusiastic level of growth over the past few years. The United States Economic Census indicates that there are more than 22 cafeterias, mobile food services and specialty restaurants in Savannah and Beaufort. This number is, however, anticipated to augment over the next few years. Additionally, this industry seems to experience a 10% increase in sales per year. Reports also indicate that the food and beverage industry is worth more than 30 million US dollars and experiences an average sales income of 21 million US dollars annually (Elmore, 2010). 3: Market Size Statistics indicate that there are currently more than 250, 000 people living in both Savannah and Beaufort. There are approximately five military bases in both areas with a population of approximately 10, 000 people. Furthermore, the port of Savannah has an approximate of 4, 000 people in a day. On the other hand, the local festivities such as the St. Patric’s Day celebrations, Home Water Festival, and the Shrimp Festival attract more than 5, 000 tourists per year (Elmore, 2010). These are the company’s principal target market segments. The average income of residents in both areas is estimated to be between 6, 000$ to 10, 000$. On the other hand, it is estimated that tourists spend more than 3 million US dollars during the festivities. The positions and locations of the food trucks to make stops were selected based on the amount of food vendors that those regions receive and the number of prospective patrons in the regions. Savannah and Beaufort have less food vendor traffic, making the industry less competitive. These regions are diverse in people. Additionally, there is a high number of Latin Americans who love and treasure arepas. Since the business will be mobile and operate within Savannah and Beaufort, it is hard to categorize the average patron of Arepa Truck Food. The company anticipates a wide range of consumers including the military personnel, residents and tourists. 4: Competitive Analysis The company is expected to face no competition. This is because there are no truck food businesses operating in Savannah. However, the company will be indirectly competing with the available restaurants and cafes within the cities. The unique nature of its products and affordable prices makes Arepa Truck Food competitive. The unique Latin American Cuisine will offer the company a competitive advantage. Additionally, discounts offered at the start of the business operations will act as a positioning strategy that will make the company renown among its patrons. 6: Marketing Strategy Arepas Truck Food aims at maintaining a far-reaching marketing campaign that will guarantee maximum perceptibility for the company in its targeted market. Marketing costs can be particularly high to new businesses making it hard to keep a simple and creative marketing strategy. Cost effective marketing is one of the aspects of triumph that this company will employ (Martins, 2013). This section details the marketing objectives and strategies to be carried out by the organization. Marketing Objectives Create strong presence in Savannah and Beaufort regions through projecting collection on the food wagon Extensively advertise and promote the business’s huge selection of arepas and beverages Create connections with the local vendors and suppliers Offer excellent customer service 7: Marketing Mix i. Promotion Strategies The company’s greatest challenge is to get its brand out and create a buzz, and how to attract customers. First, the company identified the use of an assemblage of signs to be used as an effective way of advertising as the truck stops and goes through the neighborhoods of Savannah and Beaufort. Needless to say, Arepas Truck Food Inc. will communicate with its patrons about its products in numerous ways. The chief technique of marketing to be employed by Arepas Truck Food Inc. will be the extremely visible collection of signs attached to the moving wagon. The assemblage of signs on the wagon will center of the affordable nature of the business’s broad selection of arepas and beverages. As the wagon will be making its way and stopping at festivities, people will take notice of the signs and recognize the company brand (Martins, 2013). In regard to the catering element of the company, it plans to send many brochures to festival planners within Savannah and Beaufort that will the business for catering services. Since the mobile wagon offers a variety of arepas and beverages, it can be called to serve and offer its services in casual events and festivities. The business will also offer its information to venues where the truck may need to be placed such as stadiums, entertainment joints and concerts. Information about the company and its products will be made available through the internet and direct mailings. The company will maintain a company website that will portray the company services and products offered and other contact information. The company is expected to use social media to communicate with its consumers. The use social networking will offer the company an opportunity to communicate with its customers at a low budget. It is also anticipated that the company will reach a wider customer portion and demographically select the audiences of the advertisements. Facebook and Twitter will be used to create an ad that will require the customers to like and give feedback (MacDonald, 2013). Additionally, the company will search for profiles of people within these regions. The company will also use the new mobile application such as “Whatsapp”. This application offers people a platform where they can communicate and exchange photos and videos. The company will obtain information on customer contact mobile phone numbers and send electronic brochures as pictures (MacDonald, 2013). This will offer the company a way to communicate with its prospective customers. The company is also expected to use both audio and visual advertising in the media. The company plans to come up with low budget advertisements that will be aired on the local radio and TV stations. Additionally, the company will produce brochures and posters that will be distributed and placed near the military camp, in events and to tourists. While at the festivals, Arepas Truck Food Inc. will use personal selling and public relations to create awareness of its existence. ii. Pricing Strategy All the available products will be moderately priced. A distinctive consumer will spend almost $5 to $8 for arepas and a drink. The menu prices will be tailored according to the overall costs to be encountered by Arepas Truck Food. However, the company will offer discounts to customers to create loyalty and retain them. iii. Packaging and Labeling Arepas Truck Food products will be served in a biodegradable ware. The carry outs will be served and wrapped in a white paper that is disposable. The biodegradable ware will also have the company’s name and designs that can be used to identify the company. In addition, the business will offer a printed menu to anyone who requests for one. All the personnel wear will be printed the business’s name and logo at the back. 8: Inventory Required The company will require the following inventory to start up Item Cost $ Flour 1000 eggs 100 Cheese 240 Jam and Jelly 100 Total 1440 During low seasons, the company’s inventory is anticipated to be low and may decrease by up to 30 percent. Therefore the inventory during low seasons per week is expected to be: Item Cost $ Flour 700 eggs 70 Cheese 180 Jam and Jelly 75 For the next three years, taking care of seasonality, the company’s inventory is anticipated to be: Item Cost $ Flour 140,000 eggs 30, 000 Cheese 28, 800 Jam and Jelly 20, 000 9: Company Location and Facilities Arepa Truck Food will be travelling along and through Savannah and Beaufort during the week. The plan below shows a draft schedule of the places to stop, however, the company website and social networking accounts will give more details on the exact locations during the week. Day Location Monday Downtown Tuesday Midtown Wednesday Westside Thursday West Chatham Friday Downtown Saturday Westside Sunday Midtown 10: Organizational Plan and Personnel Summary The company will be headed by the owner, who will act as the senior manager or he chief executive officer. The chief executive officer, Alex Crouch, has an expansive experience in the hotel industry and has postgraduate qualifications in hotel and industry management. The company will also have administrative staff members who will include two accountants, who will also act as the cashiers, and three sales personnel. Additionally, the company will have the operations staff that will take care of customer service, such as the cooks and stewards. The accountants should be qualified and should have a two year work-related experience and should be a CPA finalist. On the other hand, the sales representatives should have outstanding persuasive skills and should be well trained. The chef should be well trained with a two year work-related experience and have knowledge on arepas. Organizational Chart 11: Initial Capital Requirements The company will require a total of $17, 140 to startup. Expenses Cost $ Kitchen Equipment 3000 Other Equipment 2000 Signage 1100 Supplies (Flour, eggs, cheese) 1440 Uniforms 2400 Insurance 200 Truck 5500 Advertising 1200 Licensing and Legal Fees 300 Total 17, 140 12: Legal Form Arepa Truck Food will be owned solely by the owner, Alex Crouch. It will start as a sole proprietorship and may expand its operations to a company. By the fourth year, the company anticipates to advertise and sell shares to the public. 14: Financial Sources The primary source of funding will come from the owner’s savings. Alex Crouch has numerous savings in his bank. Additionally, the company will obtain financial support from a bank loan from Barclays Bank. Source Amount Savings 10, 000 Loan 10, 000 Total 20, 000 The money left after settling the startup requirements will be $2, 860. This will be used to settle any miscellaneous expenses that may arise in the course of starting up the company. 17: Cash Flow Projections Arepa Truck Food anticipates making 1, 800, 000 US dollars in its first year of business. Additionally, it projects that after the second year the business will make $ 2, 200, 000 and $2, 800,000 in the third year and $3, 500, 000 in the fourth year. Cash Flow Year 1($) Year 2($) Year 3($) Year 4($) Cash Flow from Operating Activities 1, 800,000 2, 200, 000 2, 800, 000 3, 500, 000 Cash Flow from Receivables 0 0 0 0 20: Executive Summary This business plan is aimed at attracting investors and raising $ 20, 000 for the start of a truck food business while portraying the anticipated financials and activities in the next four years. Arepa Truck Food Inc. is an auspicious business venture that provides huge prospects in the truck food enterprise of both Beaufort and Savannah. Arepa Truck Food is a company that will be based in Savannah and Beaufort that will offer mobile sales of food to consumers within the targeted locations and markets. The organization will start as a company owned by one individual and plans to expand its operations and advertise and sell its shares to the public. The company is owned by Alex Crouch. It is expected that Arepa Truck Food will be successful. This is because the business will face little or no competition since there are no food trucks that operate within Savannah and Beaufort. Additionally, the business will be offering a unique Latin American cuisine that is rare to find in the cafes and restaurants within the cities. The business’s chief revenue center will be the sales made from the food prepared and served from the business wagon as it moves along Savannah and Beaufort. The business will specialize in offering Arepas, a Latin American cuisine. Crouch seeks funding of 20, 000 US dollars from Barclays bank as a loan. This will be used to finance the startup assets and equipment such as a truck, kitchen equipment, and settlement of other expenses. The business’s mission is to offer Savannah and Beaufort regions with quality food on a mobile basis while sustaining uncompromising principles as it expands to five food wagons. The company’s decisions making will be guided by the following directives: Offer an excellent work atmosphere and handle employees with respect; clinch multiplicity as an imperative aspect in the company performs its operations; construct long-term associations with the patrons, consider the environment and the safety of its patrons and put into consideration that the company’s survival and future success is dependent on its profitability. References Elmore, C. (2010). Savannah, Georgia. Charleston, SC: Arcadia Pub MacDonald, R. (2013). The new age of marketing: How social media has changed the marketing landscape. GRIN Verlag. Martins, A. T. (2013, July 11). Starting a Mobile Food Truck – Sample Business Plan Template | Top Business ideas. Retrieved November 4, 2013, from http://www.mytopbusinessideas.com/start-food-truck-business-plan/ Read More