FRESH GROWERS- Business expansion, Marketing & Promotion Model ,SWOT Analysis...
Technofood
1. Faculty of commerce English department
Business administration department
(Third year) – First Semester
TECHNOFOOD
Business Plan
ESP57
Tarek Khamis Dagher
Alaa Mohammed Dahshour
Menna-allah Essam Saied
Yara Mohammed Shahine
Khairy Nader Khairy
Entrepreneurship Project
NOVEMBER 15, 2015
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Table of Contents
First: Business Description …………………………………Page 2
- Market needs…………………………………………Page 2
- Product and Services…………………………………Page 2
- Long term Aim of the Restaurant……………………Page 3
- Main Business Objective…………………………….Page 3
- SWOT Analysis………………………………………Page 4
- Management Structure………………………………Page 4
Second: Marketing Plan ……………………………………Page 6
- Profile of Competitors…………………………….....Page 6
- Marketing Strategy………………………………….Page 8
- Sales Strategy……………………………………….Page 9
- Pricing……………………………………………….Page 9
- Promotion Strategy………………………………….Page 10
- Demand Forecast……………………………………Page 11
Third: Staffing and Operations …………………………....Page 12
- Staffing ……………………………………………..Page 12
- Operation …………………………………………..Page 12
- Unit Cost…………………………………………….Page 15
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Fourth: Financial Plan ……………………………………..Page 16
- Investment required …………………………...…..Page 16
- Income Statement ………………………………….Page 17
- Financial Analysis …………………………………Page 17
Business Description
(1)The MarketNeedthe Company Tries to Meet:
Egyptian market is lack of the existence of a place that offers a quite enjoyable experience for
customers while having food. Food industry in Egypt is not fully able to delight customers or
offer them a high quality service, this is due to human negligence or many other reasons.
Establishing a restaurant that is able to fill up this gap or shortage made in most of food services
and provide the whole enjoyment of having meals, and spending time playing games or surfing
internet as the technology becomes a main part of our lives.
(2) Products and Services:
Backgroundto its development:
The idea is about a restaurant that serve many kinds of Italian and Mexican food, it has 2 floors,
the lower one is for the kitchen and the upper one is the hall. Tables are operated using
technology that consisted of a projector, camera, monitor screen and a highly sensitive touch
screen that covers all the components under it and its all inside the table.
Meals will be directly served to customers without the need of waiters, using special electronic
tubes works as an elevator for the food from the lower floor "kitchen" to the upper one "hall"
next to each table, once the chef put the meal in this tube and press a button, the elevator will
move all the way up to reach a box at the end of each tube that exists next to each table.
Customers will take their dish and put it on their table, this process guarantees the fast delivery
of food and also guarantee their cleanliness.
Benefits andFeatures:
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The main feature is that the restaurant contains many smart electronic tables to guarantee a
fun experience for the customers. Another feature is that tables has a guide for use presented
on the screen to show the operation and to show menu in a graphical way that allows
customers to choose specifically each component that contains their meal using these
electronic tables by dragging the item to your dish. Also customers can play games uploaded on
their table or browsing internet, which help to reduce the time of waiting meals to be done and
to satisfy customers’ needs in a fast way.
Advantages tocustomers:
They can order there meals using these tables, their orders will be directly sent to an electronic
board at the kitchen using Bluetooth to start preparing them. But the main advantage is the
reliability of service, meals preparation must not take over 15 minutes each and if not, food will
be delivered at 10% discount. One of the advantages, these electronic tables also allows the
customers to pay either with Visa cards or by traditional way.
Disadvantages or Weak Points:
As a weak point in this project that tables technology requires an educated person to order
food, this restaurant is mainly created to serve the needs of youth people who is aware of new
technologies. Also the time of making orders could be somehow long in comparison with the
traditional way of ordering food because it depends totally on speed of the customer to choose
all the meal components and send them as a final order. But the main disadvantage of
developing such high technology system is the problem of systemcrashes or defects that is due
to human errors or the obsolescence of the system and also electricity may cause a problem.
Future Developments:
For developing a new service of takeaway food, an additional tables will be exist for takeaway
customers to order in the same way and to use the tables while waiting their meals to be ready.
Payment methods is also the same. Later, restaurant will have a delivery service for home,
offices or any place using phone or internet service.
(3) Long Term Aim of the Restaurant:
The idea is aimed to introduce this kind of technological restaurants to our country as one step
of the progress in food service markets, this plan will ensure customers delight which leads us to
the top of the market.
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(4) Main business objective:
As a long term plan over the next five years, Competition facing a large and known organizations
requires high quality service, high quality goods "special meals", special recipes and flavors.
Progress plan over the five years is presented in creating meals for kids and a special corner for
them. Later on, employment plan will include a HR manager and a chefs' chief who is
well-known and expert of worldwide meals and recipes to create new dishes satisfies different
tastes, this five years plan expected to increase sales +35% or more.
(5) SWOT Analysis:
Strengths:
1- The ability of customer to choose
each components of their meal by
themselves.
2- Combination of technology and food
to achieve the meaning behind
pleasure with food.
Weaknesses:
1- The average of prices suits perfectly
the average and higher income levels
but not for low income levels.
2- Technology is not suitable for all
educational and ages levels.
Opportunities:
1- As we provide a unique service, we
have the opportunity to define new
technologies joined with delivering
and preparing food.
2- Competitors in market has no-related
technology which makes us the only
in market.
Threats:
1- Strong competition with other known
familiar restaurants located nearby.
2- Competitors’ offers are attracted for
customers and operating costs may
increase soon.
(6) ManagementStructure and Areas of Responsibility:
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Main crew is made of 4 chefs and their chief and a hall manager and his assistant, all 5 chefs are
present in the kitchen, Hall manager is there for any complaints and his assistant helps
customers to find seats, confirm or cancel reservations, help them to deal with tables and to
ensure the customers delight.
- Jobs Associated with each employee:
General Manager: Obtain profit contribution and establish business aims.
Financial and Control Accountant: Providing financial advice and support to clients.
Marketing Administrator: Plan marketing, product offering, prepare marketing strategies.
Production and Cost Accountant: Planning, coordination and control manufacturing process,
ensure efficient goods and services.
Sales Representative: Determine annual units and gross profit plans and sales objective and
maintain sales volume.
General
manager
Hall
Manager
Assisstant
Chefs'Chief
Chef 1 Chef 2
Chef 3 Chef 4
Finanncial
Accountant
Marketing
administrative
Salesman
Production
administrative
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Market plan
(1)Profile of Competitors:
Competing Products and Services:
Since that our main competitor is Pizza Hut “there are many other competitors such as:
Roastery, Chili’s, Zanilli’s, Latino, Pablo, etc.”, products of competition is different kinds of
Pizzas and salads. Another competing products are Italian food “all pastry, Vegetables,
steaks, Italian salads...” and Mexican food “Fajita, Taco, Nachos and Mexican salads”, but for
future development of the restaurant we are planning to add different kinds of worldwide
food “Middle eastern, East Asian Countries, European and many other Areas”.
Profile of Key Competitors:
Informations about Pizza Hut “decoration costs, suppliers, salaries and average pizza prices
and sales, etc.” were obtained through meeting with their manager at Roushdy’s branch
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Advantages and Disadvantages of the Competitors’ Offering:
1-PizzaHut: Company Size: size of pizza hut company in market is large, it
has more than 300000 worker who work in all branches
worldwide.
turnover: Turnover for 2011 fell to £330million from £346million in
2010, while losses increased from£20.6million to £24.1million.
Profitability:The sale is being managed by accountancy firm
Pricewaterhouse-Coopers. Pizza hut market share status as pizza hut
sales market share at the year 2009 is 13.78%, It took the first place of
pizza sales market share, in pizza industry.
MarketShare: Pizza hut has about 12000 branch around the world in
more than 88 countries “about 90” 46 of them is currently located in
different Egyptian cities, pizza hut is the first of franchises market
share in the year of 2010 by 11.60%., There are 340 Pizza Huts in
Britain.
Cost of decorations and equipment in their branch in egypt is
about 1,930,000 L.E, materials are purchased through bid of
suppliers, suppliers take 40% of profits who are special for
pizza hut only, their competitve advantage in the Egyptian
market is the high quality of taste.
2-Chili's Company Size: Chili’s has about +10,000 employees who work in all
branches worldwide.
Turnover: Sales turnover down by 1.6% in first quarter of year 2015.
Profitability: This statistic shows the sales of Chili's Grill & Barin the
United States from 2011 to 2014. In 2013, Chili's Grill & Bar's U.S.
sales reached approximately 3.8 billion U.S. dollars, up from 3.7 billion
in 2012.
MarketShare: Chili's, which has nearly 1,600 restaurants worldwide.
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1-PizzaHut Advantages andDisadvantages:
Pizza Hut has a great advantage in customer-relations build up by their innovative unique
merchandise “meals”. The idea of hot box delivery to keep meals worm is a great advantage
and customer-relationship management programs “punch card for buffet”. Also their
customer service-book it program (to encourage young readers). They follow a high
standard of CHAMPS: cleanliness, hospitality, accuracy, maintenance, product, speed.
But also they have some disadvantages such as that pizza hut currently having a
management conflicts between franchises. They also have a problem with their complex
computer system this leads to lower the quality of service and products. Lack of new ideas
and also there is lack of organic pizza that most of high class people demand which
considered as a main disadvantage.
2-Chili’s AdvantagesandDisadvantages:
Main advantages are that they considering expanding there menu continuously to carter
wider tastes, also Chili’s menu is full of food that we are considering the competition with
them over the Mexican dishes. They also have great focus on takeaway business during
weekend launch hours, and high offering of repeating purchase incentives to customers.
But the disadvantages are considered about the increase of social emphasis on healthy
eating. Also they have a very poor customer rating and limited healthy menu.
(2) Marketing Strategy:
First targeted segments are young people (20-30 years) who are expected to become a
regular clients of the restaurant, as they are well-known of technologies and the most
interested segment of our idea. Later, the restaurant plans to suit varied ages (16-60
years) as the technology becomes easier than before.
This project depends on technology in service which guarantees fast, reliable and clean
service, our merchandise “meals” are totally fitting different tastes starting with organic
healthy food to deeply fried ones.
Key benefit is to achieve High performance with technical support.
Mainly our potential customers targeted at the beginning who are expected to have
interest with the idea are young people who are highly educated, living downtown
Alexandria or near coast, because this segment presents a high proportion of the market
and they are the most interested in technology and fast service of food.
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Marketing is the responsibility of our staff by good interaction with customers and orders
fulfillment, and is presented also with a marketing agency to promote our features
through TV, Ads and Billboards.
(3) Sales (Distribution) Strategy: (we aimto dependmainlyondirectsalestosell our
productsand online.)
Costs Advantages
Directly
Cost associated with direct sales is
based on the cost of: brochures for
customers cost about (2000 le), Ads
and classifieds in newspapers and
online costs about (5600 le).
1- Ensure high quality to
customers.
2- Strong customer relationship.
3- Cost and price control.
Website
Cost of website (4000 le) + monthly
payment (1000 le) + if updated
website/month (2000 le).
1- Access to more customers.
2- Online order is much easier
and comfortable to customers.
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(4)Pricing:
Competitors’ prices: (Byaverage forChili’sandPizzaHut)
Pizza Hut: (pepperoni,
Hot dog, Spicy, Tuna,
vegetarian, super
supreme…)
M L Chili’s Prices
Thin Crispy 41.59 56.59 Stake and Grill 94.99, 60.99
Stuffed Crust 54.54 69.77 Fajita 65.99
Cheesy Bites 58.18 78.86 Sandwiches
and Burgers
45.99
Appetizers 17.14 Seafood 89.99
Deserts 18.20 Appetizers 12.99
Perceptionof quality-price relationshipby customers:
Prices are in average with our competitors, we are trying to provide the right combination
of Quality, Price and customer service in order to maintain a balance between actual prices
and quality delivered to customers to provide an acceptable price levels and offers, Solo
Meals (30-75 le), Family Meals (100 le “3-4 persons” – 150 le “5-6 persons” ).
Productioncosts andoverheads: (Costsbelow are estimated/monthaccordingto
currentmarketsituations.)
Costs associated with staffs and operations presented in: Chef’s salaries (1600 le +10%
incentives on each sold pizza by this chef), Head Chef (2000 le +bonus on total sales), Hall
Manager (1800 le), Manager’s Assistant (1200 le) and overhead costs: Electricity (10000 le)
+Utilities (2000 le) +Supplies “average” (8000 le).
(5)Promotion strategy:
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Advertising: before opening day by brochures. After, on opening day by discount
coupons and offers to serve customers of all targeted segments.
Direct Marketing: marketing through offers during operation and Billboards used
through first year of operation with estimated costs of 8500 L.E.
Website and internet marketing: Facebook page to promote our idea, website.
Word of Mouth: customers will tell family, friends, mates about us as a positive
promotion.
(6)Demand (Sales)Forecasts:(fried chicken/fishisanoptionavailableasa substitute with
any meal).
PRODUCTS YEAR (1) YEAR (2) YEAR (3)
MEAL (1):
(PIZZA ALL FLAVORS+DRINK)
1000/month
1000*12=12000
20% gross
12000+(20%*12000)=14400
50% gross
14400+(50%*14400)=21600
MEAL (2):
(PASTA “ANY SAUCES”+STAKE “MEAT
OR CHICKEN”+DRINK)
900/month
900*12=10800
20% gross
10800+(20%*10800)=12960
50% gross
12960+(50%*12960)=19440
MEAL (3): 800/month 20% gross 50% gross
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(MASHED POTATO+STAKE “MEAT OR
CHICKEN”)
800*12=9600 9600+(20%*9600)=11520 11520+(50%*11520)=17280
MEAL (4):
(FISH+VEGETABLES+DRINK)
600/month
600*12=7200
20% gross
7200+(20%*7200)=8640
50% gross
8640+(50%*8640)=12960
MEAL (5):
(SEAFOOD+MUSSELS SOUP+DRINK)
600/month
600*12=7200
20% gross
7200+(20%*7200)=8640
50% gross
8640+(50%*8640)=12960
MEAL (6):
(RICE+CHICKEN
BREAST+VEGETABLES+DRINK)
1000/month
1000*12=12000
20% gross
12000+(20%*12000)=14400
50% gross
14400+(50%*14400)=21600
MEAL (7):
(PASTA “ANY
SAUCES”+SHRIMP+VEGETABLES+DRINK)
900/month
900*12=10800
20% gross
10800+(20%*10800)=12960
50% gross
12960+(50%*12960)=19440
MEAL (8):
(FAJITA SANDWICH OR
TACO+NACHOS+DRINK)
1000/month
1000*12=12000
20% gross
12000+(20%*12000)=14400
50% gross
14400+(50%*14400)=21600
MEAL (9):
(ANYSALAD AND SIDE DISHES)
2000/month
2000*12=24000
20% gross
24000+(20%*24000)=28800
50% gross
28800+(50%*28800)=43200
TOTAL SALES 94800 unit 126720 unit 190080 unit
Staffing and Operations
(1) Staffing: “Salaries may vary at later years according to sales changes and bonuses”
We are planning to hire more employees with more skills, so the plan includes hiring a head
chef who is expert of the different spices and flavors from all the world, the manager’s assistant
must have a mannered style of dealing with customers and problems, number of employed
chefs will increase by two more and for the administrative job, we plans to hire an HR
administrator.
Job Title
Type
(Administrative or
Technical)
No. of Jobs Needed Monthly Salary
Sales Representative Administrative One Employee 2500 L.E
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Financial and Control
Accountant
Administrative One Accountant 3000 L.E
Production
Administrator
Administrative One Employee 2500 L.E
Marketing
Administrator
Administrative One Employee 2500 L.E
Head Chef
Administrative and
Technical
One Head Chef
2000+1% of total
sales=3450 L.E
Chef Technical Four Chefs
1600+10% of total sold
pizza=1900 L.E
Hall Manager Administrative One Manager 1800 L.E
Assistant Technical One Assistant 1200 L.E
Total Salaries cost 24550 L.E
(2) Operations:
Locationof the company :
The selected place for the restaurant is located in Lauran and it is consisted of two floors as
mentioned before, the size of restaurant’s area is about 120 SQM for each floor.
The cost of location rent is determined as 14000 L.E per month for the two floors.
Capacity :
Our restaurant has a maximum capacity of 40-50 customers at the same time, the
restaurant will not be able to serve more customers currently but we are considering
expansion for the next five years.
Capacity is estimated to be 160 customers per day as an average “160*30=4800” customers
per month.
Facilities andequipment:
First: Kitchen Equipment “all equipment will be bought”.
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- Two fryers for fries and fried chicken costs “2200*2=4400 L.E”
- One chicken grill costs “9000 L.E”
- Two refrigerators for beverages and deserts costs “5000*2=10000 L.E”
- Two coffee machines “espresso” costs “1500*2=3000 L.E”
- Four small grills for stakes and vegetables costs “2200*4=8800 L.E”
- Two pizza ovens costs “2550*2=5100 L.E”
- Utensils for restaurant including dishes and glass costs “5700 L.E”
- Cooking tools including pans and pots costs “2300 L.E”
- Two suctions costs “445*2=890 L.E”
- Two refrigerators for meats and vegetables costs “6200*2=12400 L.E”
- One air conditioner costs “4000 L.E”
- Two freezing units costs “3500*2=7000 L.E”
- Four ovens and stoves costs “3500*4=14000 L.E”
Second: Restaurant “Hall” Equipment “all equipment will be bought”.
- Two air conditioners costs “4000*2=8000 L.E”
- Ten electronic tables: “tables can be bought or manufactured but since the costs related
to purchasing tables are less, we decided to buy it”
1. Purchase price for each is “62010*10=620100 L.E”
2. Manufacturing table costs “64350 L.E” per table.
- One leather lounge costs “1500 L.E”
- Forty chairs plus baby seats costs “(125*40)+(135*10)=6350 L.E”
- Small wooden table for the Hall Manager’s Assistant costs “370 L.E”
- Restaurant Hall design costs “10000 L.E”
- Five food delivery elevator costs “2000*5=10000 L.E”
- Three generators costs “1700*3=5100 L.E”
- Total Cost of Fixed Assets = 748010 L.E
Materials andinputs: “Amountsof eachmaterial isestimatedaccordingtoproportionof
average amountsneededbycompetitorspermonth”.
1- Tomatoes costs “4 L.E*30 Kilo=120 L.E”
2- Onions costs “3 L.E*30 Kilo=90 L.E”
3- Olives costs “22 L.E*20 Kilo=440 L.E”
4- Bell Pepper costs “10 L.E*30 Kilo=300 L.E”
5- Flour and Baking Powder costs “7 L.E*50 Kilo=350 L.E”
6- Eggs costs “30 L.E*100 Package=3000 L.E”
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7- Cheese all kinds costs “120 L.E*50 Kilo=6000 L.E”
8- Meat costs “90 L.E*100 Kilo=9000 L.E”
9- Chicken costs “25 L.E*100 Kilo=2500 L.E”
10- Pasta costs “6 L.E*50 Kilo= 300 L.E”
11- Fish average cost “28 L.E*30 Kilo=840 L.E”
12- Potatoes costs “4 L.E*30 Kilo=120 L.E”
13- Shrimp and Mussels costs “130 L.E*30 Kilo=3900 L.E”
14- Rice costs “5 L.E*30 kilo=150 L.E”
15- Beverages and Soft drinks costs “45 L.E*150 Package=6750 L.E”
16- Spices and Other contents costs “140 L.E”
Total Materials and Inputs cost = 34000 L.E
Suppliers:
Our Suppliers are chosen according to our competitors’ suppliers in market which are
Metro and Fathallah Jumla Market.
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The Financial Plan
(1) Investment Required:
How much money do you neednow? :
The required amount of money to cover all initial costs equal to 748010 L.E.
How will you use the initial funds:
The initial fund will be used for purchasing machines and equipment “fixed assets including
decorations and appearance” 748010 L.E and the cost resulted of legal fees 20000 L.E.
What financial structure are youproposing for the financing:
All the amount of initial funds will be obtained from all owners’ equity equally for each. In
other words, the financial structure of the project as follows:
100% of owners’ equity “748010 L.E”
0% of debts and bank loans “Zero L.E”
In order to avoid interest expenses related problems for the first year of operation.
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(2) ProjectedIncome Statement: “All numbers in the income statement are calculated
according to previously mentioned informations”
Year 1 Year 2 Year 3
Sales 3,672,000 4,411,809 6,660,916
COGS (1,632,000) (1,960,804) (2,960,407)
Gross profit 2,040,000 2,451,005 3,700,509
Salaries 294,600 301,620 321,024
Rent 14,000 14,000 14,000
Utilities 2,000 2,000 2,000
Repair & maintenance 1,200 1,700 2,300
Telephone + Wi-Fi 6,000 6,000 6,000
Marketing & advertising 8,500 5,200 3,000
Depreciation 141,600 141,600 141,600
Total expenses: (467,900) (472,120) (489,924)
Taxable Income 1,572,100 1,978,885 3,210,585
Income taxes 20% (314,420) (395,777) (642,117)
Net Profit 1,257,680 1,583,108 2,568,468
+ depreciation 141,600 141,600 141,600
Cash flow 1,399,280 1,724,708 2,710,068
(3) The Financial Analysis: “Determined only according to NPV”.
NPV=
1399280
(1+10%)1 +
1724708
(1+10%)2 +
2710068
(1+10%)3 − 748010 = +3,985,555.44 L.E