Business Plan for Food Truck - Case Study Example

Business Plan for Food Truck Executive Summary The aim of N. Panada Company is to launch one of its new branches at 12321 University Blvd., Orlando, FL, 32817. This is an ideal location where our target customers are the campus students. Our entry into the fast food industry will be boosted by our intention of launching the Venezuelan empanadas. Our marketing strategies include intensive marketing and research which will mainly through the internet and other media. We intend to meet our customers’ needs by delivering our products to them directly. This is encouraged by the rising numbers of fast food customers. Our marketing mix which includes all the segments in terms of pricing, place, promotion and product are updated. The company’s financial projection and the current trends in operation is a good indicator of the ability of our company to break even fast and start realizing its profits. Company Description N. Panadas is the name of our company which is located at 12321 University Blvd., Orlando, FL, 32817. Our Company is a Venezuelan food truck that offers Venezuelan empanadas. N. The stuffing for the empanadas is your choice of beef, chicken, cheese, shrimp and fish. While attending to a college I noticed that most of the common fast food chains were built around college campuses. While offering a lot of variety, there were no fast food chains offering empanadas. Most importantly none of the fast food chains offered delivery to dorms even while being across the street from them. N.Panadas offers not only authentic Venezuelan empanadas but also caters to the college lifestyle. Opportunity Analysis Industry Analysis The fast food industry is one of the booming industries in terms of business. Most of the students have no time to prepare their own food and would therefore bump into any food store to look for food. For this reason the N. Panada’s has decided to meet the needs of our customers. Our target customers as already described above as the UCF campus students. Most of our target group is students who are aged between 16-30 years. This is a youthful stage which requires a lot of energy due to their extensive active nature in their daily activities. The figure below is an indication of the rising fast food trends. Figure 1 The figure projected above represent the rising population of our target location. There is a good indication that with the rising numbers of the population the fast food industry demands also increases as well. This is proof enough on the rising profits that are being attained from the fast food company. With these projections it is expected that N. Panada’s company is likely to enter the market comfortably and share the profits which is much projected to increase. The current world relates to fast foods as being the leading cause of obesity and diabetes especially in the US. For this reason our company decided to offer cheap natural food that will be taking care of our customers despite the health risks associated with fast foods. Despite growing concerns about the type of diet to be used consumed by most of the students, their consumption of fast food has not been affected so drastically and it is projected that the introduction Venezuelan food will break the normal trends of American traditional food. The Venezuelan empanada will introduce a fresh natural food which is nutritious and balanced in diet with low cholesterol. Figure 2 From the figures above it is evident that sandwiches are making up the largest sector in the fast-food and home-delivery market in the UK (Key Note, 2013). Although, traditional variants remain popular, there has been a growth in innovative and original filling flavours in recent times. The introduction of the Venezuelan empanadas is likely to join the increasing demand of the fast food industry. Our entry into the market will face direct competitors like McDonalds, KFC, Burger King, Dominoes Pizza, and Pizza hut all from different companies within the region. These are the most consumed fast food snacks within the location. However, the introduction of Venezuelan empanada is a positive entry since the food belongs to a different class which does not compete directly with the above mentioned foods due to its nature and mode of preparation. Marketing Strategy and Plan Marketing Mix Based on marketing research, the policies of marketing mix are listed as follow. Product policy. N.Panada’s focuses on development of healthy and quality fast food products. This is in line with the Company’s corporate social responsibility to offer only healthy food which has minimal health risks. Price policy. Since Venezuelan empanada is a new high-tech product in the fast food market, it targets at the premium market with somewhat high price. Its price is about 20% lower than the traditional American fast foods. This is aimed at attracting and retaining many customers especially since it is a new entrant. Place policy. The establishment of our Company near the UCF is a strategic with regard to our place policy. The marketing department will also directly contact the potential customers and offer direct deliveries to students who require our meals to their hostels. In addition, the company introduces the new product on its official website and allows the potential customers to book for the product. Promotion policy. In the first 6 months after launch of Venezuelan empanada, the customers can get preferential prices. The new product will be sold at the same price of the traditional products so that the customers can be encouraged to adopt the new product. Marketing Plan N. Panada’s differentiates itself from other traditional fast food companies in terms of marketing. The company will be adopting internet marketing through the social sites like Twitter, Facebook, Gtalk and others. The company seeks to reward 5 of its daily customers with their new product as a way of promotion. The company will also advertise through bill boards and other media in order to encourage sales of its products. Our goal is to win about 25% of the market share and this is done mainly through our marketing strategy. Our moving trucks will also act as a flexible means of marketing especially due to their flexibility. Management and Operations The Panada brothers remain the owners of this company and will be responsible for the daily operations of this company. They will therefore share their profits according to their business agreements. They are however, renowned business people who have a good experience in the fast food industry. Their father remains their pioneer who introduce d them to the fast food business. The company will engage in extensive research and development which aims at ensuring that the company competes effectively. This department will also ensure that our staff will be well trained and competent with the latest skills in the fast food industry. This will include doing extensive research on hygiene since the company is dealing with health related products. Our company enjoys the boost of the young staff are multicultural. The staffs is experienced and will be engaged in sales of products through the trucks. Deliveries will be made within and outside the campuses. The multilingual culture of our staff is also likely to encourage and boost sales within the campus. Our production process is a simple process which involves packaging and delivering our products to our customers. Our inventory and control systems will be centrally place in our website as well as our data control systems. Purchases and sales will be directed to the central data control system which will analyse and provide all the data depending on the sales and purchases. Our aim is to provide healthy and quality foods to our customers. This will be closely monitored by the Food and Drugs Agencies which will be evaluating our performances. We will also be depending on our customers to provide us with feedback as a way of evaluating our performance. Financial Analysis and Projections The sources of capital for this company depends are from owner’s contribution. Friend’s contributions also form part of the expected sources of capital. The capital will be used to develop the company in terms of structures, trucks, and equipment that will be required for the continuation of this business. The following figure shows the financial analysis of the company for the last few years. Figure 3 Cash Flow Projections Annual Income Statement (values in 000s) Period Ending: Trend 12/31/2013 12/31/2012 12/31/2011 12/31/2010 Net Income $5,585 $5,464 $5,503 $4,946 Cash Flows-Operating Activities Depreciation $1,585 $1,488 $1,415, $1,276 Net Income Adjustments $141 $135 $192 $248 Changes in Operating Activities Accounts Receivable $56 ($29) ($160) ($50) Changes in Inventories ($44,40) ($27,20) ($52,20) ($50,80) Other Operating Activities $0 $0 $0 $0 Liabilities ($20320) ($6650) $25300 ($2800) Net Cash Flow-Operating $120,700 $96100 $71000 $64600 Cash Flows-Investing Activities Capital Expenditures ($2, 700) ($3, 200) ($2 ,800) ($2, 500) Investments $0 $0 $0 $0 Other Investing Activities $1500 ($1100) $1500 $900 Net Cash Flows-Investing ($2,673) ($3,167) ($2,570) ($2,056) Cash Flows-Financing Activities Sale and Purchase of Stock ($1,544) ($2,286) ($3,029) ($2,235) Net Borrowings $3,300 $1 ,600 $1, 900 $77,400 Other Financing Activities ($1,800) ($3,600) ($1000) ($300) Net Cash Flows-Financing ($4,043) ($3,849) ($4,530) ($3,728) Effect of Exchange Rate $3770 $3300 ($3400) $3400 Net Cash Flow $4,600 $3000 ($5,100) $5,000 Balance Sheet Projection Annual Income Statement (values in 000s) o Period Ending: Trend 12/31/2013 12/31/2012 12/31/2011 12/31/2010 Current Assets Cash and Cash Equivalents $2,600 $2,000 $2,600 $2,000 Short-Term Investments $0 $0 $0 $0 Net Receivables $1,800 $1,,300 $1,,700 $1,100 Inventory $12,700 $12,700 $11,800 $10,900 Other Current Assets $8,900 $1,000 $1,800 $6,500 Total Current Assets $5, 100 $4,100 $4, 000 $4,500 Long-Term Assets Long-Term Investments $1,000 $1, 500 $1,000 $1,300 Fixed Assets $2,300 $2,200 $2,500 $2,600 Goodwill $2,700 $2,000 $2,200 $2,100 Intangible Assets $0 $0 $0 $0 Other Assets $1,100 $1,700 $1,200 $1,700 Deferred Asset Charges $0 $0 $0 $0 Total Assets $7300 $6,500 $6,900 $6,200 Current Liabilities Accounts Payable $3,000 $3,100 $3,500 $2,400 Short-Term Debt / Current Portion of Long-Term Debt $0 $0 $365,600 $8,200 Other Current Liabilities $0 $0 $0 $0 Total Current Liabilities $3,000 $3,100 $3,200 $2, 700 Long-Term Debt $14, 700 $13, 400 $12, 700 $11, 000 Other Liabilities $1,469,100 $1,426,200 $1,412,600 $1,486,900 Deferred Liability Charges $1, 700 $1,100 $1,100 $1,400 Misc. Stocks $0 $0 $0 $0 Minority Interest $0 $0 $0 $0 Total Liabilities $20, 600 $20, 900 $18, 700 $17, 000 Stock Holders Equity Common Stocks $16,500 $16,500 $16,500 $16,500 Capital Surplus $5,994,100 $5,778,900 $5,487,300 $5,196,400 Retained Earnings $41, 100 $39, 000 $36, 500 $33, ,600 Treasury Stock ($32, 700) ($30, 200) ($28, 800) ($25, 300) Other Equity $47,500 $76,300 $49,200 $72,800 Total Equity $160,600 $159,500 $149100 $14,100 Total Liabilities & Equity $106, 200 $105,400 $32, 400 $31, 100 Funding request & Exit Strategy Using our financial projections estimates which have been described above we would like to request for $106,200. This amount will be used for development strategies for our company. The type of financing includes equity financing where the amount of money invested will be equal to the amount of share contribution. This aims at allowing us to work cordially and in good relations. We also intend to exit the plan through a well-planned buyout plan which is laid down by the Panada brothers. The aim to retain the business ownership to the family of the Panada since it is one of the cultural values and traditions of the Panada’s. For this reason, the brothers plan to invest largely and buyout their business back after establishments. Read More