Executive SummaryHome Foodies!! is an exciting, new
business with a unique approach to help people enjoy home cooked meals with
their families and friends. Home Foodies aspires
to be a platform to enable housewives to set up their own food businesses from
within the comfort of their homes. What Home Foodies is looking to
do is host all the best home cooks on a single, easy-to-use platform for web
and mobile users. Our tagline promises: The idea is simple: “WE COOK
FOOD; YOU DO THE REST!”For customer service lists of all chefs is available
who can cook particular dishes, along with rates of dishes. Customers will order the food online
using Home Foodies website or application from that available food list and can
pay the price of food ordered using Credit Card or at the time of delivery.
Maximum delivery time will be one hour.The start-up employs its own delivery team in order to
ensure timely food delivery, and relies on their own mapping system to estimate
the time required to pick up an order from a chef and deliver it to the
consumer.Home foodies offers several advantages
to its target market:
Comparatively inexpensive food
preparation: Rs1500 for a four-person meal.
Convenient: eat your ready meals
in your home, whenever you want.
Saves much time: no shopping, no
preparation and no cleaning up.
For senior citizen, special menus
and transportation assistance make meals easy. Financial
Home Foodies expects strong sales,
based on research into our target market, lack of direct competition, and the
experience, reputations, and know-how of its owners. By gradually paying
back our long-term loans and holding down costs, we will generate a net profit
halfway through the first year and increase net worth considerably by year 3.
Our major fixed expenses are payroll and rent payment.
The financial plan depends on important
assumptions, most of which are shown in the following table as the annual
assumptions. Important underlying assumptions are:
We believe in a relatively strong
economy. Even though a troubling economy would not allow us the growth
that we expect, we still believe that it would not severely damage the
business because the service is economically feasible.
assume that our market needs will be seasonal, this will vary with
different food choices of people in different seasons, specially an
increase in sales during the summer months.
Table: General Assumptions
Current Interest Rate
Long-term Interest Rate
Projected Profit and Loss
Foodies projected profit and loss, with sales increasing from 2 Lac the first
month to close to 70 Lac by the third year. We will reach profitability in the
middle of our first year.
are projecting very predictably regarding cost of sales and gross margin. Our
costs of sales are based on grocery store prices, which will decrease once we
are to consistently able to buy our food in larger quantities from a food
distributor. This will significantly lower our cost of sales, and increase our
gross margin more than in this projection. We prefer to project conservatively so
that we make sure we have enough cash.
Sales and Marketing Expenses vary from the food preparation
industry norms. Our Sales and Marketing Expenses will be to consistently
maintain our advertising and promotions, while our biggest marketing will be word
of mouth from our customers. We are budgeting for a high level of service from
our website hosting company and payment processor, since the website is a key
component of our Sales and Marketing Strategies.
Projected Cash Flow
flow projections are the annual amounts only. Cash flow projections are
critical to our success. Our cash situation is great. Although we begin with
little extra cash, our increased growth allows us to make up for lost time. Our
cash balance is always above the mark with the cash flow not too far behind. We
have no negatives in our cash analysis.
Projected Balance Sheet
balance sheet is managed but sufficient growth of net worth, and a sufficiently
healthy financial position. Our negative net worth, due to borrowed capital for
start-up, makes a significant increase by the second year, and becomes
positive in year three. It is common for start-up businesses to have a negative
net worth their first few years.
As a food service business, our main goal
is to provide high quality food with excellent customer service. Our
challenge as a new company is to quickly establish a reputation for such
quality among our potential markets. With this in mind, the initial focus
of our marketing strategy will be to get our name and reputation out to the
public to create “buzz.” Creating brand recognition for our new
concept will be the first measurable milestone in our marketing strategy.
This will be one of the most
important factors when measuring success within the first couple of months
after inception. The basis for our ideology is simple; the more people
that hear our name and become familiar with our services, the more people will
use it. The marketing campaign will involve a targeted advertising campaign,
different specials to entice the customers to try our business and a very
intense networking campaign. All of these tactics will be used to help
gain a loyal clientele aimed at fostering our happy customer base.
At start-up, we will begin
a focused advertising campaign toward target segments in our geographical
area. We will update our advertising campaign regularly to fill in gaps based
on follow-up research: do people recognize our name? Do they know what we do?
What is their impression of our services’ costs and quality?
Marketing campaigns will work via:
area newspapers that are viewed by our target market.
mail advertisements/flyers to our target market purchased through a direct
mailing company with lists specifically of our target market.
flyers and pamphlets that will be available at many shopping centers and
grocery stores throughout the area.
keyword searches that will lead to our website.
Coupled with the advertising campaign
will be a systematic offering of discounted specials to attract more customers.
This could be very important to potential customers because the cost of Rs.18,000
for 12 meals is very appealing to families that have used our service before,
but families may be distrustful to buy this much food and invest that much
money in something they have never tried. For that reason, our business
will offer periodic specials to families to help limit their fears and open
their eyes to the wonderful atmosphere at Home Foodies.