Allo Food Business Plan: Delivering Food Of Your Choice To Your Location

Business Detail

In our context below, we shall discuss more about the business plan and how the business will run and its financial requirements. We shall also get to know who the competitors in the business are, why they are selling more and what opportunities we have as a new business. Also we shall try foreseeing the possible changes in the future and find ways by which we can survive through the changes and still have the business going on well.

In some organizations, employees are not offered food, those that offer do not offer the employees’ choices. Having this in mind, Allo food will help solve this problem. This will be possible by ensuring that customers get the food of their which will be delivered to their location. Since it is clear that food offered in companies does not consider peoples taste, the target market is definitely high (McKenzie 2015, p43). This means that the value gained from the service will be a great one if their needs are fully met. Since  Allo food will be a newly established company in London, the idea is to start off with a manageable geographical area. With time the business will grow and take over other uncovered areas with an intention to reach out to more individuals in London. The food application delivers ordered food to the location of the customer in London. It keeps into consideration the customer’s preferences, what they order is what we deliver. The service offered by the food application works positively if well used by the customers. This is because whenever a customer orders food it is delivered to them within an hour. Since the food prices do not include transport costs, the service is relatively cheap ensuring that every customer enjoys the service. In addition, the application allows the customers to pay for the service after delivery and they can use their cards. This minimizes the chances of fraud associated with online services.

The economic condition of a place can be viewed in terms of its residents’ consumption and production of goods and services. The economic state of a region is very important since it helps one foresee the future demands and make decisions on how far their level of production should go. If the forecast shows that there will be a fall in the level of consumption, then it means that the producers need to lower their level of production. For these reasons, any opportunity in which there is a rise in consumption, the chance should be utilized to the maximum. Also, there are various economic factors that should be considered macro-economic factors being the main one. Macro-economic factor are conditions that come into place as a result of the economy at large and not from just a specific population. They include the level of unemployment, national income, price levels and growth rates among others. All these factors have a direct impact on the business. With raised levels of unemployment, there will be less order for food since the customers purchasing power has gone down. On the other hand, when price levels go down, there will be more orders for food since the customers will be in a position to purchase more expensive food with the same amount of money.

Economic Overview

Getting into a business means one is ready to face challenges associated with the business. The main challenge of a new business is competition with existing businesses. However, one can penetrate in the market by considering customers preferences. With Allo food, the customers will be ordering the food of their choice. This means that the gap of customer preference is settled. Our target market is the people working in offices, those in their home with no time to prepare meals and any other person interested in trying out new dishes. The size of the target market is relatively high since most young people at home or offices have no time to make dishes. Also the elderly prefer already made food since it does not require them to get in the kitchen. Therefore, in our business, we’re not confining ourselves in any way, we are targeting both young and elderly people as well as every citizen in London. With continuous improvement of our services, it is expected that our business grows significantly. As stated earlier, there is a high chance of competitiveness in the business. There are food manufacturing companies all over London that offer quality food to the citizens. They have been in existence for a very long time and have managed to dominate over the industry over these years. However, we still have a chance to penetrate through the market by taking advantage of their shortcomings. There are some characteristics associated with our business competitors. These include wide variety of food to choose from, low prices, higher levels of responses to customers complaints and wider coverage. However the industry is consolidated hence they help each other and grow together though at different levels. This clearly indicates that the industry is growing with every passing day.

Competition is a sign that a certain business is worth venturing in. Our competitors in the food industry are the restaurants, fast food cafes and all the companies that manufacture food. However, having been in the market for a longer period, they have gained many loyal customers. This makes it hard for them to deliver to their customers due to the large number. However, the same business has a number of advantages such as understanding the market trends better, having access to cheaper and quality material among others. This puts them at a better position when making decision on what and when to offer certain dishes. Scarborough (2015 p12) states that location of a business is the main tool to ensure its success. This is true because, our competitors have so many factors favoring them but their location is a challenge to them. This is due to scarcity that is in existence, where there is no space to accommodate all their customers. We use this to our advantage in that we don’t need our customers to physically visit our place of work but need them to access us through our food application. This means we can serve any number of customers without any challenge of space. Regardless of having such challenges, their location is of a significant importance. This becomes evident when they get to serve many people that are passers-by who have no time to visit an application and order food.

Market and Industry Analysis

Marketing strategy is basically how the business intends to market its services and products (McKenzie 2018, p80). We are coming up with various ways to market our services such as using the social media. This is an important way to reach out to people since many people are into internet hence accessing social media platforms such as Facebook and twitter. Additionally, we are having a door to door form of marketing, where we visit individuals and offer them information concerning our food application. When it comes to pricing, Allo food will use a number of strategies to determine the prices of a product or service. As a matter of fact, pricing of a business product or service is the most significant aspect of a marketing strategy. Our business will use several ways to come up with prices for our services and products. One of them is the bundle pricing we will sell multiple foods for a lower price that it would be if bought separately. This will make a customer perceive that he is getting an irresistible value on his money. We shall consider other pricing strategy such as penetration pricing where we will sell our products at a cheaper price than our competitors. This will enable our product get in the market and create consumer awareness and encourage them to try out our products. Although this strategy can lead to losses at first, we expect that after gaining powerful market penetration, we will raise our prices to gain a reasonable profit (Yu & Wiklund, 2015).

Operations plan is the description on how a department, section or team will take part in ensuring that the business achieves its targets. As Allo food, we shall be cooking food, and deliver all the orders to those who made them. We shall therefore need kitchen equipment such as cookers and utensils. We shall also require some other facilities like fridges and freezers to store the perishable goods like vegetables. To deliver food, we shall have delivery guys that will be using delivery vans and other will be using motorbikes, depending on the location of the customer. There are legal requirements that we need to adhere to in our business. They include getting business permits, licenses and keep in mind that we need to pay taxes. Since our business revolves around food, our suppliers will be farmers and other people that supply farm products in the country. However, this will be determined by how much their products are worth, in terms of pries and quality (Brinckmann & Kim, 2015).

SWOT analysis is a research performed by organizations to understand their internal strength and weaknesses and also find out both their opportunities as well as the threats they face in the external environment. In our business, SWOT analysis is not different from other businesses in our field. Firstly, our strength is that we offer door to door services by delivering products to customers’ premises. This is an advantage since our competitors do not offer such. Also, we do not charge our customers for the delivery, which makes us more preferred than other businesses (Spigel, 2017). Regardless of us having a number of strengths, we have several weaknesses mostly associated with us being a new business. Many people prefer buying goods from their daily sellers hence making it difficult for us to have more customers. Again, our competitors having been in the business for a relatively longer time and therefore have access to cheaper raw materials thus their products are cheaper than ours (Schaper, Volery, Weber & Gibson, 2014). This leads to many people opting to go for the cheaper products. However, there are several opportunities associated with Allo food. For example by us delivering our products to customers freely is great opportunity to establish a good relationship with our customers so that they can trust us and our products (Ward, 2016).Therefore, we ensure that the few customers that are buying our products get the best services and within the shortest period possible. Another opportunity is through our marketing strategy where we get a chance to interact with our customers, listen to their opinions and suggestions as well as the complaints about our competitors. We then solve those complains before our competitors do and this keeps us at a higher chance of growing regardless of the great competition we are facing. However, there are some few changes in the future that seem to be great threat to our business such as higher unemployment levels, changes in weather and low national incomes. With raise in unemployment levels, customers will have less money to purchase our products hence lower incomes for us. In case of weather changes, it will be difficult to get farm produce, and the few that will be selling will raise the prices. This means that the cost of our products will be high putting us at a risk of losing our customers (Bell, Bryman & Harley, 2018).

Competitor Analysis

Any business idea remains just an idea as long as there are no finances. This makes finances an   important part of the journey to start a business. Financial requirements differ depending on the type of business and the start-up cost is always the highest. For Allo food, the financial requirements are a bit high, considering that we are starting a relatively big business. We shall firstly require equipment such as cookers, fridges and freezers. We shall also need furniture such as seats and tables in case we people need to eat from our restaurant or sit while waiting to get served (Scarborough, 2016).We also need finances to set up premises from where our business will be performing. This is in terms of offices, kitchen area and a restaurant area. Bearing in mind that our business mainly concentrates on proving online services of delivering food, we shall need a delivery van and some motorbikes to cover shorter distances (Smith & Viceisza, 2018). We require an opening stock of few food stuffs to start the business with. In the business world, it is recommendable to track down your sales in order to find out whether the business is running on a loss or profits. Cost of sales is the total costs used when producing a good or service (McKenzie, 2017). Our total costs are the expected to be a bit low since it is just cooking and transporting of food. Since we shall be in need of some help in the kitchen, delivering of the products as well as in marketing department, there are salaries involved. The salaries, taxes, amortization and insurance are all considered as fixed costs in a business (Watson, McGowan, Cunningham,2018). They are always constant despite the amount of goods produced. Running cost on the other hand the amount spent regularly while running a business. They include fuel costs, lighting costs as well as cost of purchasing materials for the business. Food is a daily need hence it is expected that our business will grow and yield more profits. Therefore it is fair to say that our profitability is yet to grow. Break-even point is a tool used to determine at what point a new product is going to make profits (Autio and Rannikko 2016, p90). The initial persernal investment would be $ 40,000 and the government funding would be $ 210, 000. The total amount to be budgeted would be $ 250,000

The following table show a summary of forecast financial requirements and the funds to be allocated.

Total Budget £ 250,000

Program Name	Proposed Budget	Total
Equipment	36000
Furniture	44000
Business premises	30000
Van and motorbikes	30000
Opening stock	40000
Operational cost	20000	200000

Total proposed £ 10 million 

In order to compute sales and revenue it is very important to comprehend the total cost breakdown of a single meal. The breakdown for a Spanish meal for one person would be as follows:

Product	Cost
Spanish meal (chicken for one person ) · Ingredients -2c. virgin olive oil -1/2 Spanish onion -4 table spoon. GF flour –  1 pinch of salt -one egg -GF breadcrumbs -150g chicken -other costs	£ 0.03 £0.09 £0.20 £0.01 £0.45 £0.25 £1.25
	Total cost £ 2.28

Profit/Loss forecast	Jan	Feb	Mar
Sales Revenue	300000	320000	400000
Gross profit percentage	0.84	0.84	0.84
Gross Profit	252, 000	268, 000	336,000
Total Fixed Expenses	250000	250000	250000
Net profit/Loss	2000	18000	86000

Conclusion

Starting a business does not revolve around a business idea and finances only but as explained above, there are many factors that are to be checked into. Therefore, one needs to check all factors such as economic, financial and environmental factors. As for environmental factors, both internal and external factor should be considered since they affect business directly ( Hopp, Greene, Honig, Karlsson & Samuelsson, 2018).

References

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Bell, E., Bryman, A. and Harley, B., 2018. Business research methods. Oxford university press.

Brinckmann, J. and Kim, S.M., 2015. Why we plan: The impact of nascent entrepreneurs’ cognitive characteristics and human capital on business planning. Strategic Entrepreneurship Journal, 9(2), pp.153-166.

Hopp, C., Greene, F.J., Honig, B., Karlsson, T. and Samuelsson, M., 2018. Revisiting the influence of institutional forces on the written business plan: a replication study. Management Review Quarterly, 68 (4), pp.361-398.

McKenzie, D., 2015. Identifying and spurring high-growth entrepreneurship: experimental evidence from a business plan competition. The World Bank.

McKenzie, D., 2017. Identifying and spurring high-growth entrepreneurship: Experimental evidence from a business plan competition. American Economic Review, 107(8), pp.2278-2307.

Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management Pearson.

Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., 2014. Entrepreneurship and small business.

Smith, B. and Viceisza, A., 2018. Bite me! ABC’s Shark Tank as a path to entrepreneurship. Small Business Economics, 50(3), pp.463-479.

Spigel, B., 2017. The relational organization of entrepreneurial ecosystems. Entrepreneurship Theory and Practice, 41(1), pp.49-72.

Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth profitability, and family leadership. Springer.

Watson, K., McGowan, P. and Cunningham, J.A., 2018. An exploration of the Business Plan Competition as a methodology for effective nascent entrepreneurial learning. International Journal of Entrepreneurial Behavior & Research, 24(1), pp.121-146.

Yu, W. and Wiklund, J., 2015. Nascent venture team diversity and nascent venture performance: an investigation of business plan and opportunity type (summary). Frontiers of Entrepreneurship Research, 35(8), p.11.