confidential - street food vendors training · 2018-04-16 · pirate dogs 3 confidential - this...

CONFIDENTIAL

Pirate Dogs

Unique MFDV Experience

Business Plan

February 2018

Pirate Dogs i

CONFIDENTIAL - This document is strictly confidential, and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner.

Table of Contents

Executive Summary ............................................................................................ 1

Summary .............................................................................................................................................. 1

Management Team .............................................................................................................................. 1

Products and Services .......................................................................................................................... 1

Guests .................................................................................................................................................. 2

Financial Forecast ................................................................................................................................ 2

Required Funds .................................................................................................................................... 3

Company and Financing ...................................................................................... 4

Company Overview .............................................................................................................................. 4

Management Team .............................................................................................................................. 4

Required Funds .................................................................................................................................... 5

Mission Statement ............................................................................................................................... 5

Company History .................................................................................................................................. 5

Locations and Facilities ........................................................................................................................ 6

Products and Services ......................................................................................... 7

Products and Services .......................................................................................................................... 7

Competitors ......................................................................................................................................... 7

Sourcing and Fulfillment ...................................................................................................................... 8

Technology ........................................................................................................................................... 8

Future Products and Services .............................................................................................................. 8

Guests ................................................................................................................. 9

Market Overview ................................................................................................................................. 9

Market Needs ...................................................................................................................................... 9

Market Trends .................................................................................................................................... 10

Market Growth .................................................................................................................................. 10

Industry Analysis ................................................................................................................................ 10

Key Guests .......................................................................................................................................... 11

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Marketing and Sales ......................................................................................... 11

Overview ............................................................................................................................................ 11

Positioning ......................................................................................................................................... 11

Pricing ................................................................................................................................................ 12

Promotion .......................................................................................................................................... 12

Strategy and Implementation ........................................................................... 13

Milestones.......................................................................................................................................... 13

SWOT Analysis ................................................................................................................................... 14

Competitive Edge ............................................................................................................................... 14

Menu .................................................................................................................................................. 15

Weather impact ................................................................................................ 16

Daily Operational Sales ...................................................................................................................... 16

Projected Sales in Graph Form .......................................................................................................... 17

Pirate Dogs 1


Executive Summary

Summary

Pirate Dogs will offer guests in downtown YourTown and the surrounding areas a variety of lunch time sandwiches, side items and drinks. It is a Mobile Food Dispensing Vehicle (MFDV) designed to stand out as an interesting, flavorful alternative for a quick affordable meal serving traditional and non-traditional food cart faire. It plans on creating a quick service yet technologically-advanced outdoor cart environment with multiple payment options, email receipts and on-line ordering not usually seen at a MFDV.

By creating a one-of-a-kind MFDV experience, Pirate Dogs plans to attract the local business professional working in the YourTown area, as well as tourists and local families with children.

The purpose of this business plan is to raise $10,000 for the development of a MFDV (Pirate Dogs) in downtown YourTown, Your State. The investment will help the company build out its flagship cart in downtown Your Town and provide working capital for the first three months of operations.

Management Team Pirate Dogs will be owned by Jane Smith. Jane has a strong background in marketing and the food industry, with previous experience working at Burger King and KFC among others. All totaled Jane has 20 plus years in restaurant management.

In addition to Jane Pirate Dogs will have access to a restaurant consultant, John Public. John has over 40 years of experience in the fast food industry from various national chains as well as developing new restaurant concepts, food trucks and carts.

Products and Services The company will sell several different food products both produced at the MFDV as well as pre-packaged. There will be a core menu paired with a limited time offers of products based on seasonality and availability. All products will be assembled at the time of order providing our guests with a hot and fresh product. We will offer a line of prepackaged drinks and potato chips.

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Guests Pirate Dogs will target three guest segments: business professionals, families, and tourists. The primary location being 100 Any Parkway is a prime spot for both professionals looking for a quick lunch, as well as tourists seeking a quick affordable snack. The company will utilize road side banners, feather flags and social media (Facebook, Instagram and Twitter) to get the word out, with an emphasis on review sites (Yelp and TripAdvisor) to encourage positive word of mouth. The company will also develop a relationship with local radio stations and media to become the go to MFDV for special events such as grand openings, ground breaking ceremonies and other local celebrations.

A secondary line of guests will come from participation in local fairs, parades, art walks, etc.

These event types could be paid entry or free to attendees and offer opportunity to serve large

amounts of guests in a short time frame. Paramount to participation in these events will be a

Return on Investment (ROI) analysis to determine the profit potential.

Financial Forecast The company expects to generate at least $70,000 in annual sales by the end of the first year of operations with a gross margin more than 21%. The company will incur higher expenses for startup costs, but the company expects to completely repay all loans while posting a profit in the first year. The company will be debt free starting the second year. The sales will steadily increase by 5% for the second year and a further 8% in the second year.

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Required Funds

The company is seeking to raise $10,000 from an investor. This business plan assumes the investor will receive 35.075% interest on loan with full repayment by March 31, 2018. The financing will be used to secure purchase of the initial MFDV and working capital for the first three months of operations. The company has an aggressive expansion plan to acquire significant market share and grow its revenue thru operating or leasing future MFDV.

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$10,000.00

$20,000.00

$30,000.00

$40,000.00

$50,000.00

$60,000.00

1 2 3

Profit/Loss By Year

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$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

Loan to Profit Comparison

Loan pay Profit after loan

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Company and Financing

Company Overview

Pirate Dogs is Limited Liability Company. It is currently located at 200 Any Dr. YourTown, YOUR STATE 00000. The planned MFDV location is situated at 100 Any Parkway YourTown, YOUR STATE 00000. The company was originally conceived in January 2017 when founder and CEO, Jane Smith, came up with the idea that a pirate themed MFDV providing affordable tasty food was sorely lacking in downtown YourTown, YOUR STATE, given the areas established pirate themed parades and festivals, (Billy Bowlegs) as well as other pirate themed businesses such as Buccaneer Cruises.

Management Team

Jane Smith, Founder and CEO Prior to founding Pirate Dogs, Jane, was Restaurant Manager for KFC in YourTown, YOUR STATE. Prior to that she was Restaurant Manager for Burger King, running various stores in the YourTown area. Her experience also includes marketing, sales building and graphic design.

John Public, Consultant

John has 40 years’ experience in the food industry having worked for all the national burger chains. His experience includes opening and operating several successful restaurants for Wendy’s, Rax Restaurants and Burger King. He has also developed restaurant concepts from inception.

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Required Funds Jane Smith is seeking to raise $10,000 from an investor(s). The investor(s) will receive a 35.075% interest on loan with full repayment by March 31, 2019. The investor shall not have any active role in the day-to-day operations of the company or have the power to bind the company with any contract, agreement, promise or undertaking. Further details of the proposal will be provided in the company’s operating agreement.

The investment capital will be used for the following:

• Purchase MFDV

• Purchase additional equipment and opening inventory

• Marketing campaign to promote store launch

The investment will be required to meet the company’s first milestone, which is reaching positive cash flow, by month 1 of operations.

The company is projected to generate a very conservative $79,000 in revenue by end of year 3, with a profit margin of 60%. The company valuation by year 3 of operations, using comparable businesses in the local region, is approximately $100,000.

Distributions made to members of the company will be made monthly, within 5 days of the end of the month. Each member will receive their share on any profits over and above the following months’ operating expenses. This amount will be required to maintain operations and generate revenues necessary to keep the company solvent. In the event of a loss, no profits will be paid.

Assuming the venture can meet its financial projections, Ms. Smith intends to further expand to more retail locations across the area.

Mission Statement To provide the region’s most unique themed MFDV that emphasizes guest service, positive community involvement, and extremely high-quality product as ingredients to its success.

Company History Jane Smith first conceptualized Pirate Dogs in January 2017 when she realized there were no MFDV in YourTown that had an owner or employees with any background in the food industry. Much of the competition consists of retired people looking to “have something to do”, people “downsized” out of their field of expertise or people with limited cooking ability believing the mobile food

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industry is as easy as TV makes it look. The actual competition has little knowledge of food standards, guest service or marketing. The area currently has 37 MFDV licensed with 7 of those delinquent on license fees and only 4 easily found on social media. Using her personal residence's kitchen as the first test kitchen as well as previous experience, Jane Smith started to tinker with recipes for the company's sandwich line. Within a couple of weeks, Ms. Smith completed a line of tasty and easy to assemble sandwiches and sides. Ms. Smith moved the informal research into a commercial kitchen testing increased sized recipes, prep procedures and refining the specifications for each product.

Locations and Facilities The company plans to rent a space to park the MFDV for business at 100 Any Parkway this location provides:

• Ample parking space

• Access to 36,500 passing vehicles daily

• Main road and side road access

• Access to 3 major hotels in walking distance

The MFDV to be purchased will provide:

• Cooking via propane • Hand wash • Dry storage • Cooler storage • Frozen storage

Additional Equipment to be purchased will include:

• Additional coolers for drinks and meats • Overhead tent • Tables to display drinks, chips and condiments • iPad for use as POS system • General restaurant small wares

The commissary will provide:

• Overnight dry, refrigerated and frozen storage • Cleaning facilities for equipment • Waste removal • Sewer

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Products and Services

Products and Services The company plans to sell 4 core sandwiches, an 8 to 1 sized hot dog with basic toppings, a premium Nathan’s Famous Brand ¼ lbs. hot dog with chili and grated cheddar, an Italian meat sub and a smoked, grilled personal pizza. Hamburger will be available on an event to event basis. The overall menu will be flexible depending on location and event needs.

Side items to include packaged Lay’s Potato chips, Cole slaw as well as a Chili and Nacho cheese topped Frito Brand chips.

Drinks will be mostly pre-packed and served ice cold. Drinks will include Coca-Cola products, Zephyrhills spring water and Gatorade. Again, depending on venue, we will offer a lemonade, strawberry and raspberry drink at a premium price.

Deserts will be pre-packaged cookies and a commissary bake brownie topped with sea salted caramel. Other deserts may be added as local tastes require.

Additional items will be rotated in as supply and seasons allow such as, tacos and ice creams.

Competitors

Any restaurant could be considered competition, however the “street food” craze is still growing, provide a different dining experience. Shows like “The Great Food Truck Race” bring attention to the diverse and delicious choices available to guests. Competition shows like “Chopped” and “Top Chef” often have street vendors as competitors. In our area, currently there are 37 listed MFDV, of those that appear caught up in fees only 4 are easily found on Google searches. Those with a strong social media presence often show disorganized food prep areas and inconsistent staging at events. A themed, well organized and clean MFDV will deliver an experience that guests will remember.

Specific competition from B&M with-in one mile of our primary location include:

• Pizza Hut (directly across the street)

• Olive Garden (directly across the street)

• 2 very small local restaurants that change hands often

There are currently no direct competitors within 1 mile. Given the nature of mobile food this

could change at any time. As our reputation grows we fully expect copy cats. Our primary

location is under contract for one year with first renewal option. Our traveling locations could

face competition from time to time. We firmly believe our years of guest service experience,

marketing ability and quality food will chase away competitors.

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Sourcing and Fulfillment

All supplies are readily available at Sam’s Club. Once a commissary unit is developed the

company can seek reduced pricing via a distribution center i.e. Woodfruitticher, Sysco, US Food,

etc. This will become a primary goal as additional units are added and a staff trained.

Technology

While food is simple and easy to assemble by hand the company will utilize modern technology and systems to insure safe food service and record keeping.

POS systems The company will utilize Squareup’s POS software and credit card processing. This will allow us the ability to proper gage inventory usage, sales trends and safe secure cash handling. As sales and menu grows add on apps, also connected with Squareup, will be used to better track inventory and guest loyalty.

Online ordering

The company website will provide a method to place orders and pay for them. Thus, creating a time saver for both the company and guest. Again, using Squareup to process the payment and notify the cart of the incoming order.

Marketing

The company has a detailed Marketing section in the Pirate Dogs Operations Manual. Please see

attached.

Future Products and Services The company plans to develop the brand and create awareness not as a street vendor but as a street restaurant. Our future includes additional MFDV locations in Our county followed by leased/franchised locations around the Panhandle. To this end the company has developed model Operations and Policy Manuals. These manuals define all company standards and will be used to train new hires.

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Testing new items that are in season and unique The company will develop and test new products that are trending in street food areas. The

company will introduce these products with the brands unique twist. Early test products will

include Mexican foods such as tacos, quesadilla, burritos, nachos. Other foods may include

doing spring rolls and other Oriental fare.

Derivative products There are a variety of derivate products the company will pursue, including:

• Other sub types

• Pita Pocket

• Brats

• Various toppings

Guests

Market Overview

The total market for Pirate Dogs includes all consumers in the YourTown, YOUR STATE area that enjoy eating out at least once a month. The addressable market that the company is going to target are consumers that prefer eating tasty food served quickly so that they resume daily work activities or vacation. Specifically, all the residences, offices and shopping around our primary location. Secondary locations will be marketed primary via social media and occasionally radio mentions.

Conservatively, the total market is estimated to be $100 million, with Our county having more fast food restaurant on average than other counties. On the plus side the median household income is 20% higher than the national average. The competition among MFDV is extremely soft as most are inconsistent in daily operational hours, participation on social media and uninspired basic menu offerings.

Market Needs The company's product line provides choice paired with ease of ordering and delivery. Our unique menu choices offer guests not only hot dogs but a delicious sub or pizza. This provides the opportunity for repeat visits and reduces menu fatigue.

YourTown has no mobile vending to speak of and the opportunities to service the various night

clubs, bars and micro-breweries are abundant. The market can support at least 4 full time

vendors serving these locations alone. The current construction of 2 major hotels, a sub division

and shopping center also afford locations needing great food vendors.

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Accounting for the beach areas with condos and apartments, the boat ramps adjacent to parks and

the “Crab Island” area our county is ripe for additional street food vendors.

Market Trends

Street food is among the fast-growing segments of the overall restaurant industry. Over 25% of the world’s population consume street food daily. Our area has room for several street vendors and has no real organized street vendor association or “area” were many vendors park creating an outdoor food court. The seasonal influx of tourists paired with hotel growth in and around Fort Walton insure this market will continue to thrive.

Market Growth

There are currently 37 licensed MFDV in Our county. Five years ago, there were only 15. Of those 15 only 9 are still active licenses and most of those are associated with brick and mortar restaurants that only use that license during a remote location a few times a year.

Using data from the Department of Labor, there has also been a net increase in the number of jobs in the area. As well as new housing growth in outlying areas of the county. This is also encouraging and provides further validation that the market for street vending will continue to grow.

Industry Analysis The fast food industry is a $198.9 Billion industry in the United States and the mobile food segment is an estimated $2 Billion of that figure.

Threat of new entrants: The threat of new entrants is relatively low given the upfront costs associated with a MFDV operation as well as, the training required to be food manager certified. Many new trailer, truck and cart owners sell out after less than a year in business. Most often citing regulations, marketing difficulties and poor location choice as the reason for failure. Research reveals most new vendors have no real business training or understanding of basic cost formulas used by restaurants for pricing and inventory. Even trucks and trailers with decent sales fail to turn a profit.

Competitive rivalry We anticipate that competitors will eventually mimic our product offering and branding, which will increase competition. Also, we expect new competition from those jumping on the band wagon of a popular trend. Our understanding of the area and the seasonality of tourist flow coupled with decades of restaurant experience will position to weather any storm the competition may bring.

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Key Guests

Pirate Dogs has three guest segments to which they will target their products.

Families: One key guest segment is families, in particular, young parents who want to bring their children to beach. For this segment, the average order value will not only be higher, but the frequency in which they will return will also be higher. By promoting tasty food delivered in a unique way, the company hopes to secure loyal parents and their children.

Tourists: Tourists are the one and done of restaurants. Little to no chance of developing repeat business, BUT they do offer the chance to provide reviews on internet travel sites. Providing a great food experience at an affordable price point will insure positive review and new tourist business.

Working professionals: The mobility of a MFDV is perfect to provide meals at court houses, construction sites and outdoor events. This gives the company an opportunity to develop a business relationship with guests that will visit us often during work hours and see us as a tasty change of pace with the family.

Marketing and Sales

Overview Pirate Dogs will market itself through social media and word of mouth marketing. It will price its products comparable to its nearby competitors, while providing perceived value to maintain profitability. It may seek to distribute its products through catering if brand recognition and consumer demand warrants such expansion.

Positioning

Pirate Dogs will position itself as a branded MFDV. Using professionally designed and printed materials for menus, couponing and advertising. The company will provide a professional, friendly experience for our guests. Our point of difference will be the delicious food and professional feel of service as opposed the usual sit in a chair till a guest approaches attitude of most other street vendors.

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Pricing

Pirate Dogs has determined the guest is moderately sensitive to price from street vendors. Competitors generally sell low quality products at premium prices, depending on low competition events to survive. Pirate Dogs understands the relationship between premium products and perceived value. The company will price like products in kind. (i.e. sodas or chips) We will price our premium products at or slightly above the competition depending on taste and personal service to be the distinguishing factor in perceived value.

There will be two pricing variations:

• Retail: full, retail price of products

• Discounted: the company will offer a guest loyalty program that will include heavily discounted or free food items.

Promotion

Internet marketing

The objective is to obtain enough new guests to generate positive word of mouth through social media, with emphasis on the company’s Facebook, Twitter and Instagram profiles. The company believes that social media will be critical to the success of its guest acquisition strategy, as each incremental gain in social media will increase overall profitability. The company website will complement the overall Internet marketing strategy.

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Traditional media

Print advertising such as flyers will also be used to be distributed to the local school and businesses in the area to promote the grand opening and special events. Door to Door mailers from the USPS will be used at least once per year coming off the summer season. These mailers will offer discounts, coupons and outline the fall event schedule.

In addition, the company will entice walk-in business through the strategic placement of banners on Any Parkway. This will drive impulse buys from the undecided hungry crowds.

Strategy and Implementation

Milestones

Opening the first MFDV location

Completion Date: Year 0, Month 1 Securing, furnishing and preparing the company’s first retail location is the first milestone for the company. We anticipate accomplishing this milestone within the first month of operation.

Achieving positive cash flow

Completion Date: Year 0, Month 1 From opening the company expects to attain positive cash flow from operations.

Achieving debt free

Completion Date: Year 0, Month 12 The company expects to be debt free by the end of the first year.

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SWOT Analysis

Strengths Weakness

Simple product line No brand recognition

Restaurant experience limited financial resources

Able to cater to local tastes and needs Securing locations

Unique themed experience

Opportunities Threats

Industry growing nationally Seeing company success will breed copycats

Under represented in Any Town New competitors with MFDV

Street food is in vogue Changes to vending codes

Competitive Edge

The company plans to compete on several vectors:

Differentiation: We will be the only player in town providing a cohesive branded experience. We will also be the only MFDV with internet ordering. More than just an MFDV, Pirate Dogs represents the area and its cultural fascination with pirates and pirate themed events.

Innovation: Using prior food experience the company can quickly recognize and implement new product trends and deliver a tasty product to our guests.

Operational efficiency: With years of practical front line experience the company can deliver an overall great food experience including fast friendly service and delicious choices.

Contacts within the industry: Having lived in this community the company owners have numerous contacts both inside and out of the food industry. Contacts include local produce and dairy vendors, as well as, city and county officials dealing with food codes and regulations.

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Menu

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Weather impact

Months

weather impact % of days

with some rain/cold

Days in

month

#calendar days*%of

days with rain

# of days closed to weather 33%

remaining days for business

Mon, Tue & Wed

Closed

Projected Days open

April 55% 30 16.50 5 25 12 13

May 39% 31 12.09 3 28 15 13

June 60% 30 18.00 5 25 12 13

July 66% 31 20.46 6 25 13 12

August 54% 31 16.74 5 26 14 12

September 75% 30 22.50 7 23 12 11

October 75% 31 23.25 7 24 14 10

November 80% 30 24.00 7 23 13 10

December 80% 31 24.80 8 23 12 11

January 90% 31 27.90 9 22 15 7

February 80% 28 22.40 7 21 12 9

March 41% 31 12.71 4 27 12 15

Total days open possible 292 156 136

Daily Operational Sales The company projects LOW, MID and HIGH daily sales averages as follows:

low sales average

Percent of days

mid sales average

Percent of days

high sales average

Percent of days

special event average daily sales

$141.32 10% $433.96 57% $674.30 33% $842.88

Combining weather data and daily sales projections will yield the following first year results:

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Projected Sales in Graph Form Using the LOW, MID and HIGH sales projections and the possible days open for business will yield the following monthly sales projections:

$0.00

$1,000.00

$2,000.00

$3,000.00

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$5,000.00

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$8,000.00

Project Monthy Sales Year One

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Startup costs

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Projected Year 1 P&L

confidential - street food vendors training · 2018-04-16 · pirate dogs 3 confidential - this...

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