1.
Exec Execut utiv ivee Su Summ mmar ary y
HOT & SPICY Fries are a locally owned French fries outlet that will be positioned as a new attraction through my creative approach and detail presentation. HOT & SPICY Fries will provide excellent fries at value pricing. HOT & SPICY Fries is the answer to an easy food, to be consumed while window shopping and walking around in a super market. My main priority is to establish one outlet in a super market, preferably close to the most prom promin inen entt shop shop in the the supe superr mark market et of penc pench h foti. foti. Late Later, r, my effo effort rt will will be a furth further er development of more outlets in the other possible areas of University. This plan is prepared to obtain a location for the initial launch of this concept. Additional financing will need to be secured for the subsequent outlets, anticipated in near future. The initial capital investment will allow HOT & SPICY Fries to provide its customers with a value-driven experience. 1.1
Objective
(a) To establish a French Fries outlet, which becomes an attraction for the people coming to the Super Market
(b) To grow the business business such as to open open other outlets outlets as as soon soon as possi possible ble in near future 12
Mission
Quality of Potatoes The fresh and high quality potatoes will enable HOT & Spicy Fries to be popular in taste. Fresh all the time All the time availability of fresh fries will also serve as a positive point of HOT & Spicy Fries. Timings As most of the families & students visit the super market in the evening, therefore the timings of HOT & Spicy Fries will be from 10 AM to 11 PM. 2.1
Business Ownership
Business is owned by my self (Juhi Jameel). I am Bachelors in Bus Administration from BUITEMS, 2.2 Startup Summary Details of the capital required for the startup of HOT & Spicy French Fries is as follows: Heads For purchases of potatoes, cooking oil, salt & ketchup One month rent of location One month electricity bill
Requirement 82,160/1,200/2,000/-
(Rs.)
3.
Product
Our product will be French Fries only and there will be no Soft drinks or juices at HOT & Spicy. The reason is being the location of HOT & Spicy in front of General Store, which is already, the most famous store of market having all sorts of juices available. So my aim is to gain uniqueness in French Fries, which is right now not available with any one in the market. The packing boxes of HOT & Spicy will be having Name and Logo of HOT & Spicy written all over the box to leave an impression on the mind of customer. 3.1
Competitive Comparison
As there is no French Fries stall in the market earlier, therefore presently there is no competitor of HOT & Spicy. However, looking at HOT & Spicy, new entrants will certainly enter in to this field. Therefore, it is mandatory for Hot & Spicy to gain the customers loyalty through high quality and low price as early as possible. Because competitors are HOT & CHILLE, TABAQ, Etc. they are expensive for a student and some people needs a little lite snack they will prefer our product. 3.2
Sourcing
Following are the sourcing of HOT & Spicy: (a) Fresh potatoes will be provided daily by one of the distributor of Main Sabzi Mandi.
(d) Young children & BUITEMS students will be our target market as kids and students like potatoes chips very much. (e) In addition, parents of young children & lecturers will also be our target market as these parents want that their children must eat potatoes. So in this way HOT & Spicy will be facing a healthy market. 4.1
Market Segmentation
Potential customers of HOT & Spicy can be divided in to three segments. (a) Young school going children & BUITEMS students will be the primary market. (b)
Parents of such children and University lecturers will be secondary market.
(c) Lastly all people entering the super market and specially those who came to shop at General store. 4.2
Target Market Strategy
Hot & Spicy has targeted the young children & University Students as the primary potential customers because the young school going children loves to eat potato chips. In this age their taste is so developed that they like potato dishes. Specially when
Spicy French Fries. However, after running the business for few months, some trend may emerge out. 4.5
Trend in Food Service in Super Market
Although there is no specific trend available for the business of French Fries in the super market, however by looking at the trend of other Food Services available in the super market, a rough estimate can be made. Following is short summary: (a) Tasty Samosa & Paratha stall The only available stall of any food item in the super market is “Tasty Samosa Stall”. As I mentioned earlier also that this samosa stall on average remains surrounded by 3 to 4 persons, therefore it can be roughly estimated that people will give a good welcome to HOT & Spicy French Fries. 4.6
Main Competitors
Again as mentioned earlier that there is no French fries stall in the super market, therefore there is no direct competitor of HOT & Spicy French fries in the super Market. However, some of the potential competitors could be “Tasty samosa stall”, "Hot &chilly", "Pizza Point", "Tabaq". Tasty Samosa stall is established in super market from last three years and showing a healthy growth in its bus progressively. "Hot &chilly", "Pizza Point", "Tabaq" are located at some distance and are tremendously crowded at night but at morning. SO our advantage is morning service specialy for BUITEMS students.
5.2
Market Strategy
My strategy is based on serving the markets well. I will start my first outlet as a “market tester” that could become a model of the expanding number of outlets in the future. Concentration will be on maintaining quality and establishing a strong identity in the local market. A local store-marketing program will be utilized at each location. Local store marketing is most effective, followed by print ad. As soon as a concentration of stores is established in a market, then broader media will be explored. I believe, however, that the best form of advertising is still “buzz.” By providing an ener environment with unbeatable quality at an acceptable price in a clean and friendly outlet, HOT & Spicy will be the talk of the town as main source of marketing will be Viral marketing which will consume fewer resources and won't burden the cost factor of our fries. Therefore, the execution of my concept is the most critical element of the plan. 5.3
Pricing Strategy
Keeping in view the high inflation rate, the price of a small Fries packet is kept as low as Rs 5/- and large packet of Rs. 10/-. I will be try to gain the customer loyalty through high quality and low price and than if needed would increase the price slowly and gradually. 5.4
Marketing program
5.7
Sales Forecast
As no historical data is available for type of business, therefore "qualitative method" is used relying on the general trend of super market and my own knowledge. It is expected that maximum numbers of customers would come to buy the HOT & Spicy French Fries between 4 PM to 11 PM. But it will remain open from 09AM to 11PM Following are the reasons for this expectation: (a) During this time, children come out of their homes to play and during play or at the end of the play they desire to eat something. (b) And from 9Am till 4 PM BUITEMS students will come from University and purchase our Hot & Spicy French Fries. (c) 5.8
Most of the families also come out for evening walk at this time.
Strategic Alliance
For the success of my business, it is important that I develop a long and trusted relationship with my raw suppliers and with the authorities of BUITEMS. For this I have following steps: (a) A fifteen days advance contract with potato distributor who will deliver me fresh potatoes on my demand with lead-time of one day. I have deposited fifteen days advance payment with him so that he may not have any
6.
SWOT Analysis This following SWOT analysis captures the key strengths and weaknesses within the company, & describes the opportunities & threats faced by my Hot and Spicy Business. 6.1Strengths Low cost • Unique product • Fresh product • Morning service • Efficient service • Timely cooking and supplying fries on time • 6.2 Weaknesses Hot & chilly boasting services and business hold and command • Fully decorated restaurant launch is not possible in start • Lack of advertisement strategy. As to beat hot & chilly, Tabaq • competition we need aggressive marketing & Advertising strategy but it's not possible as to keep the low selling price. 6.3 Opportunities To gain student marker from 9 AM to 11PM • To focus children playing in Jinnah town in the evening time • To focus ladies and families who walk around the place in the evening • 6.4 Threats
7.3
Personnel Plan
Right now there is only one employ of HOT & Spicy French Fries. This employ will be doing all the jobs starting from cutting the potatoes, Frying and handling the cash. Since its only one outlet with not much of workload, therefore there is no requirement of additional staff. This employ will work for seven hours daily. 8.
Financial Plan
Currently only I own the business. Depending upon the growth of business, it will be decided in future whether any partnership is required or not. 8.1
Start up Funding
I am by my self is providing the initial fund required for startup of the business. Details are appended below: S No
1 2 3 4 5 6
Heads For purchases of potatoes, cooking oil, salt & ketchup One month rent of location One month electricity bill Salary of one worker Purchase of French Fries maker (2.5L) Initial
Requirement (Rs.) 82,160/1,200/2,000/2,000/6,865/4,000/-
Break Even Analysis 120000
Rs 99,725
100000 80000 t s o C
60000 40000 20000 0
Price of Each packet of French Fries
21840 Packets
9.
SUPPLY CHAIN SUMMARY 9.1
SUPPLY CHAIN NETWORK
Farms
Factories
9.2
Demand Forecast
Qualitative Forecasting (a) method is being used to forecast the sales of French Fries. Qualitative forecasting methods are primarily subjective and rely on human judgment. They are most appropriate when little historical data is available. (b) Since the Hot & Spicy French Fries is the first business of its nature in the Super Market of Pench foti Near BUITEMS, therefore there is no historical data available for such business for that particular market. (c) However, keeping the sales of “Tasty Samosa & Paratha Stall” the only stall of food in super market, as a general reference the Sales forecast of HOT & Spicy is done. (d)
Calculations are given below: Each packet of French Fries cost
Rs 5/-
Forecasted customers per day Each customer buys 9.2.1
Forecast of Potatoes requirement
84
2 packets on average
9.3
Reorder Level
Reorder level = 9.3.1
Average daily usage x lead time
For Potatoes Reorder level =
9.3.2
Safety Stock
9.4.1
2x½ =
1 kg
4x½ =
2 kg
For ketchup Reorder level =
9.4
16 x ½ = 8 liters
For Salt Reorder level =
9.3.4
21 kg
For Cooking Oil Reorder level =
9.3.3
21 x 1 =
For Potatoes
9.6
Costs calculations
Total cost is equal to = Purchase cost + Ordering cost + Holding cost However, as this is a new start up of business therefore initial cost of setting up the business is also to be included in total cost. This cost will be added once only and will not be counted in calculations from next month on wards. Total cost than becomes Total cost=
Purchase cost + Ordering cost + Holding cost + Initial setup cost
These three costs will now be calculated individually. For the ease of calculations these costs are calculated on daily basis and will extend to monthly basis. 9.6.1
Purchase Cost
Daily requirement of Potatoes
21 kg
One kg of potato costs Potato purchase cost
Rs 420/- daily
Daily requirement of Oil
16 liter
One liter of oil costs
Rs 120/-
Rs 20/-
9.6.3
Holding costs
Following are variables of holding costs: (a) Rent of location
Rs 1,200/-
(b)
Electricity bill
Rs 2,000/-
(c)
Salary of worker
Rs 2,000/-
Total holding cost = Rs 5,200/9.6.4
Initial setup cost
Purchase of French Fries machine
Rs 6,850/-
Stall setup cost
Rs 4,000/-
Initial Promotions cost
Rs 1,500/-
9.6.5
Total Cost
By adding all the components of Cost, the total cost come out be 9.7
EOQ
Rs 99,725/
10
Ratio Analysis 10.1
Liquidity Ratios
Liquidity Ratios are used to measure the Firm’s (HOT & Spicy French Fries) ability to meet short-term obligations. From this ratio much insight can be obtained in to the present cash solvency of HOT & Spicy ability to remain solvent in the event of adversity. 10.1.1 Current Ratio Current assets divided by Current liabilities. It will show the ability of HOT & Spicy to cover its current liabilities with its current assets. Current assets Current liabilities S No
2 3 4
Current assets For purchases of potatoes, cooking oil, salt & ketchup Purchase of French Fries maker (2.5L) Initial setup cost Total Current Assets
6,865/4,000/93,025/-
S No
Current Liabilities
Rs
1
Rs 82,160/-
BUETIMS canteen each month. This will make a permanent accounts receivable amount of Rs 5000/- for HOT & Spicy each month. In calculating Break even in sub-Para 7.2, it has already been calculated that the monthly income of HOT & Spicy will be approximately Rs 21,840/-. Net Sales Receivables
=
21840 5000
=
4.37
This Ratio tells us the number of times accounts receivables of HOT & Spicy have been turned in to cash.
11.
Risk Analysis RISK OF THE PROJECT
Like every project, this project also entails various events that can jeopardize the successful completion of the project. Our Business always advocates a pro active approach towards risk assessment. Therefore before actual execution of the project we are identifying and assessing the events that can have an intense impact on project completion, either negatively or positively.
•
Bureaucratic influence: Bureaucratic people who have strong hold in this
area might also stop us to do business or may ask for some fee for their called "Chia Pani" in local areas.
11.1.2 Organizational Risks
•
Human resource availability: soft ware engineers are of high importance
in the successful completion of the project. Because of high demand of soft ware engineers it is expected that they may leave the organization, although the organization is giving them a competitive compensation package. •
Bomb or any Suicide Threat : In case of any bomb or suicide threat we
need to have a fire alarm and fire extengiours and extra reserve amount to over come the cost might incur as its location is at open space. •
Funding: The organization may face huge problem in funding the
business due to sudden changes or any miss hap
Risk Break Down Structure
Organizational Risk
External Risk
Strikes
Competitors
Bureaucracy
Political
1
Bomb Threats
Human Resource
Funds
