Nut 404 Business Plan Project.docx

Coe, Nguyen, Pelcastre, Phoeun 16

Business Plan11/20/2013 Contact Information:

FASTANDFRUITIEST@GMAIL.COMWWW.FASTANDFRUITIEST.COM

Chandinet Phoeun Ana PelcastreHannah CoeAnnalie Nguyen

1. Table of Contents2. Executive Summarypg. 32.1 Business Opportunity2.2 Product/Service Description2.3 Current Business Position2.4 Financial Potential3. Business Description & Vision..pg. 43.1 Company Background3.2 Company Mission and Vision3.3 Business Description3.4 Current Position and Business Objective4. Definition of the Market.pg. 64.1 Industry Definition4.2 Primary Competition4.3 Market Size 4.4 Market Growth4.5 Customer Profile5. Description of Products and Servicespg. 95.1 Product Overview5.2 Suppliers5.3 Competitivity6. Ownership, Organization & Management pg. 106.1 Ownership6.2 Organization Structure6.3 Business Management6.4 Business Licenses7. Marketing and Sales Strategy.pg. 127.1Business Goal7.2 Competitive Advantage7.3 Pricing7.4 Distribution Channels7.5 Promotion Plan7.6 Feedback8. Operating Plan.pg. 158.1 Location8.2 Facility and Operating Equipment8.3 Hours of Operation8.4 Suppliers and Vendors8.5 Operating Table9. Financial Management pg. 179.1 Financial Assumption9.2 Project Balance Sheet9.3 Project Income Statement9.4 Project Cash Flow10. Appendices..pg. 232. Executive Summary Fast and Fruitiest is a food truck business that aims to promote healthy eating through preparation of healthy fruits and vegetables smoothies. Our company is unique because we are provide healthy smoothies with quick and easy access. We supports sustainability and our local economy by buying fresh ingredients from local farmers daily. 2.1 Business OpportunityThe interest for organic and local foods is one of the latest food trends in the food industry. Under this umbrella we find organic smoothies as one of the most demanding organic products in the industry due to their versatility and convenience. Also, according to statistics the popularity in organic products will continue to grow, outpacing the growth of conventional foods in the US by 2015. 2.2 Product/Service Description Our company sells fruit and vegetable smoothies from fresh ingredients, made only once ordered and quickly produced for our busy customers. Our selection of fruits and vegetables are organically grown in San Diego, and we are proud to support our local economy. And with our food truck times and locations posted on the company website and other social media outlets, customers can always know where well be for their convenience and the best service. 2.3 Current Business Position As of November 2013, Fast and Fruitiest owns one food truck, a warehouse for inventory. Our primary method of advertisement and promotion is through social media and word of mouth thus allowing us to lower the cost of advertisement. Through this link we can also get instant customer feedbacks to ensure the greatest customer services and a fluid and open dialogue with consumers.

2.4 Financial Potential In our assumption of first year of business, we have already begin to make a low net income and profit. Our goals as a company are to purchase a second food truck within the next three years, to later expand our business to neighboring cities in Southern California, and to increase net profits and make our company grow.

3. Business Description and Vision

3.1 Company background

Fast and Fruitiest is an up and coming business that promotes healthy eating through preparation of healthy fruits and vegetables smoothies. Our company is unique in that it utilizes food truck which provides quick and easy access to customers. We take pride in our commitment in using the freshest ingredients from local farmers that supports sustainability and local economy. We are looking to expand our business by increasing the numbers of healthy food choices from the college area to local San Diego.

3.2 Company Mission and Vision

Our Company mission is to promote healthy smoothies choices throughout San Diego county and increase accessibility of affordable healthy foods. Our company vision is to expand our food truck business in order to provide customers with high quality and nutritious smoothies with affordable and quick delivery. In order to achieve that, our products will be mainly made with fresh and seasonal locally grown products from local farmers market.

Fast and Fruitiests mission statement is: Fast and Fruitiest guarantees to provide healthy smoothies choices to all consumers with reasonable and affordable prices.We aim to meet the needs of our wide consumer demographic from across San Diego with the best customer service and the freshest and most nutritious ingredients, grown locally and organic.

3.3 Business description:

Fast and Fruitiest was established in September 2012 under the partnership of four SDSU nutrition students. We started as a vendor at the San Diego State farmers market on Thursdays. Due to the high demand, we decided to expand our business into a smoothies food truck business, to increase accessibility to greater portions of San Diego, providing fresh and healthy food to the community. Our smoothies truck will be moving to different location throughout San Diego in order to offer healthier smoothies choices to people. Fast and Fruitiest smoothies will offered reasonable and affordable prices to consumers. Fast and Fruitiest will also follow the food safety rules and maintain environmental conscious in order to promote sustainability.There are many food trucks in San Diego, but few specialize in healthy foods, and none currently concentrates in smoothies and healthy beverages (13). That is why we create our fruit smoothies truck to deliver another healthy option to our San Diego community. Fast and Fruitiest strives to create accessible and convenient healthy juices to expand our services out to all of San Diego while supporting local farmers and local businesses.

3.4 Current position and Business objective:

Fast and Fruitiest is currently at its starting phrase in business. Under our partnership organization, we were able to gained profits while selling smoothies at the San Diego State University Farmers Market and we were able to invest on a food truck to further our business to the San Diego community.Our business objective is to expand our one food truck to two food trucks in the next three years, and by our third year of operation Fast and Fruitiest would like to expand our business to other major cities in southern California such as Los Angeles, San Jose, Santa Barbara and beyond.

4. Definition of the Market

In the last several years, the interest on eating healthy has been growing rapidly. Also the farm to table philosophy has achieved greater popularity among younger generations in the US society (1). More people ages 19 to 36 are interested now on eating healthy and safe foods. The City of San Diego is not left behind as there has been an increase in local restaurants adding healthier options to their menus including organic entrees (2). However, even though San Diego has upscale in healthier food options, there has been little to none on the promotion of healthier beverages. San Diego has one of the largest niches for the organic food market including smoothies because the majority of the population is between ages 25 to 34 years old (3) one of the strongest driving force for this type of market (4). Another problem is accessibility because these foods are mainly available in stationary locations such as restaurants, retail stores or Farmers Markets. Further more, the food truck industry in the city is not meeting this need as there is not currently food trucks that specialize in healthy beverages. Therefore, our company Fast and Fruitiest will take advantage of this interest and will specialize in nutritious organic smoothies using food trucks to target the health-environment conscious population of local colleges and the San Diego community.

4.1 Industry Definition

For almost twenty years we have seen a dramatic increase in the demand for organic foods. The US organic production doubled in quantity and the consumer market increased at a faster rate for the last seven years (4). Also According to the Organic Trade Association, organic food and beverage sales in the US grew from $1 billion in 1990 to $26.7 billion in 2010.Regarding organic smoothies, there was a 74% increase during the past five years making them one of the most demanding organic products in the market. The top drivers of these beverages were health concern and interest in consuming more nutrients (5). Other favorite and leading foods included vegetables and fruits with a demand of 54% and 34% respectively (6). Also according to experts in the beverage industry, smoothies are high margin drinks that can give profits a boost due to their versatility and are a perfect fit for those who are always on the rush. The latter, being one of the characteristics of Fast and Fruitiest targeted Market.In addition, growth of organic foods for the next two years are promising with projected sales of more than double by 2015, outpacing growth of conventional foods in the US (7).

4.2 Primary competitors

There are about eighty food trucks operating in the City of San Diego. Of them about fifty are in the Gourmet food industry and a very small number (13) specializes in beverages such as coffee and tea. Currently there is not food truck specializing in fresh nutritious smoothies. This will open doors to our company to grow in popularity and take the lead in the region.Also taking into account the smoothie industry in the entire region of San Diego, our main competition will be stationary restaurants such as Jamba Juice which also serves part of our target market. However, there are only 17 restaurants distributed throughout the county and as of today, they dont include local organic products on their menu (8). Other competition of less concern includes fast food restaurants which only very few non-organic smoothie options (9).The competition on universities and colleges will include Juice it up located at SDSU and Jamba Juice at UCSD. Schools such as CSU San Marcos and community colleges dont have any smoothie restaurant on their campus. The same situation is similar to other Universities and junior colleges that may or may not have smoothie restaurants in their institutions. However, as mentioned before, these restaurants are only found in the food court of the campuses which will make it easier for Fast and Fruitiest to target students outside the food court.

4.3 Market Size

The population of San Diego is approximately 1.37 Million. Of this number, about 18% are people between ages 20 to 24 years old. The largest population group however is people ages 25 to 34 years old with about 35%. Adding these two groups together, we can say that a little more than half the population in San Diego is between ages 20 to 34 years old.San Diego is also home to 18 major Universities and junior colleges. Further more, San Diego is also considered the number one county in the state of California with the highest number in organic farms (10). The organic local produce gross sales were of 28.6% Millions in 2011 (11).

4.4 Market Growth

The city of San Diego possesses all the right qualities for Fast and Fruitiest to grow. For example, there are a vast number of local organic farms which will make it very easy for us to procure all the fruits and vegetable we need without difficulty. It will also allow us to bargain and lower our expenses in food. The target market is more than ideal, since over 50% of the population is considered the millennium generation; the generation who is actually interested in healthy and safe foods (3). Also our competition will mainly consist of stationary restaurants but we dont expect that to be a problem since we will have the privilege to drive around the city and reach out to our target market. Taking into account this information and the management-nutrition expertise of the owners, we expect Fast and Fruitiest to potentially grow to $191,305 in profits by its third year of operation.

4.5 Customer Profile

Although Fast and Fruitiest wont make discrimination among customers, the niche market will be the health-environment conscious population. The key features of this market are mainly people in the millennium generation who in most of the cases posses a higher education degree. They seek natural, organic and unmodified products. They avoid chemicals or pesticides that can harm their health or the planet. They expect truthful information and often reward the company for using sustainable methods by willing to pay at premium. They are also looking for convenience and want to know the source of the food. Ultimately, they feel that by buying environmentally-friendly products they become healthier and are also making a difference in the world (12).

5. Description of Products and Services

Fast and Fruitiest specializes in fruit and vegetable smoothies as our main products. These smoothies are hand-crafted from fresh local ingredients, and are prepared as soon as they are ordered, not beforehand. Our smoothie selection includes: strawberry, peach, mango, berries, vegetables, and seasonal items such as pumpkin smoothies in the fall and peppermint smoothies in the winter. Along with smoothies, our food service also sells fresh organic whole fruits, such as individual apples to customers at affordable pricing.

5.1 Product Overview:

Strawberry Smoothie: This smoothie is a simple and sweet treat, just fresh strawberries and water go into this basic and inexpensive beverage.Pineapple Mango Smoothie: This smoothie is a blend of pineapple and mango make for a nutritious and delicious exotic taste.Berry Smoothie: Blackberries, raspberries and strawberries are used for this fun and tasty smoothie.Fruit and Vegetable Smoothie: For a meal that gets you your servings of both food groups, go for the fruit and vegetable smoothie, made with fresh vegetables like carrots, tomatoes and avocados, and fruits like mangos, oranges and pineapples.Fresh Apples: Locally grown red delicious apples are also for individual sale and make a quick inexpensive snack.See Appendix A for more details on pricing.

5.2 Suppliers:

One of the goals of our company is to support locally grown organic suppliers. This is why we have chosen Moceri Produce, based here in San Diego, as our main product supplier. They have flexible delivery and a wide product range, a necessity for the ever-changing needs of our food trucks.

5.3 Competitivity:

Our company is competitively viable for a number of reasons. For one, Fast and Fruitiest is the only food truck in San Diego that specializes in smoothies. Because of this, there is little competition with other food trucks for our niche market. And to compete against other smoothie companies, our food trucks will reach markets inaccessible by stationary smoothie shops. Our increased mobility allows for greater and more convenient access to customers all over San Diego.

6. Ownership, Organization, and Management

6.1 Ownership:

Fast and Fruitiest will be owned by four nutrition students: Annalie Nguyen, Hannah Coe, Chandinet Phoeun, and Ana Pelcastre. They were all graduation students from the Nutrition program at San Diego State University. Thus, all were able to understanding the value of nutrition, and allowing greater advance in developing healthier smoothie choices to introduce to consumers. 6.2 Organization Structure:

Fast and Fruitiest operated under the equal partnership. In which all four holders: Ms. Nguyen, Ms. Phoeun, Ms. Coe, and Ms. Pelcastre share equal power in controlling and operating the business. They all have invested the same amount of money into the business so all shareholders decided to share equal partnership in the operation. Based on the voting system and personal strong point, all holders agreed that all four partners would hold different positions in the business but remain equally in power. Ms. Chandinet Phoeun, Ms. Ana Pelcastre, Ms. Hannah Coe and Ms. Annalie Nguyen are all going to be the managers in different department in the business. However, all decisions will be base on the voting system that must be agreeable by all four partners or by the mass choices. Fast and Fruitiest is only at its starting phrase of business so hiring other employees would not be considerable smart for our budget and should be minimize. Therefore, all business with the food truck will be divide among the four partners. Monthly schedules will be developing to allow all four partners to participate. The food truck business needs one to two partners everyday to help produce the products as well as serving customers. There will be two workers during peak hours and one worker during normal hours. So the four partners will work exchangeable equally throughout the week following the fix monthly schedule. Each partner will be responsible for three working days a week and thus remain as part-time employees .

6.3 Business Management:

All Fast and Fruitiest partners are all majored in nutrition and are considerate to be an expert in nutrition and health aspect. Therefore, all management positions in the business are decided based on the vote of each partners and also based on their own personal skills. Hannah Coe will be responsible for managing inventory supply for the business. Any transitions between the suppliers, such as farmer markers, will be with Hannah. With her experiences in working with many different farmer markets in the past, Hannah was able to understand how the market work and will be able to get the best deal for Fast and Fruitiest supplies. With her strong human relations skills and verbal skills, Hannah is the strongest candidate for working with suppliers and managing the materials. Annalie Nguyen is also majored in nutrition but she focused more the financial part and will be responsible for managing the account function of their business. Any transitions involve expenses will be conduct through Annalie and she will be the one doing inventory check on the business account in order to calculates the business profits and assets. Annalie has extensive finance experiences in the past three years working as a supervisor for a supermarket and with a strong numeric reasoning skills, thus making her a strong candidate for being Fast and Fruitiests financer. Chandinet Phoeun is great with customer services and planning skills so she will be responsible for working with the customers to create more business plans with bigger corporations to gain more profits and valuable customers. Extra businesses such as catering will help further introducing our name to the greater community as well as better profits. With her logical reasoning skills and social skills, Chandinet will help prepare more business plans that will improve the Fast and Fruitiest business and profits. Ana Pelcastre is great with ideas and very creative; therefore, we all voted for her to become the manager of strategies and organization for the business. With Anas visual-spatial reasoning skills and creativity, she will develop different menu ideas and flyers to advertise and attract different customers market to accept Fast and Fruitiest smoothies.

6.4 Business Licenses

According to the San Diego food law, all food truck workers will be asked to provide a Food Handler permits in order to practice in the food industry (14). So all partners who works in the kitchen will be ask to become certified before practice. Fast and Fruitiest business will also need to obtain a business license and a mobile food facility permit in order to run business in San Diego county (14). More than one of the business partners will need to pass a state-approve Food Safety Certification exam in order for the business to operate. Based on the San Diego food law, all food business need to obtain a health permit before selling any edible products (14).

7. Marketing Plan

Marketing strategy for Fast and fruitiest is to educate the consumers about our high quality products and our company principles that we adhere to. Customers will be reached by social media, fliers, coupon, contest, having sales and specials, and free samples. Fast and fruitiest will target people of every age but especially health-conscious people who enjoy healthy, fresh and nutritious beverage.

7. 1 Business Goals

Fast and Fruitiest are looking:-To expand to two food trucks in three years. -To expand our business to other major cities in southern California such as Los Angeles, San Jose, Santa Barbara and beyond in 3 years.-To produce a net annual income of $100,000 to $150,000 in the first two years of operation.

7.2 Competitive Advantage

Fast and Fruitiest competitive edge is based on the fact that we support and only buy high quality produce from local farmers and certified distributors. We adhere to our slogan, which states that "Fresh, fast, affordable smoothie. This means our products are daily fresh, on demand fast, and reasonably inexpensive. Furthermore, we are on the move, which means we will be able to locate in many locations and to reach more customers. We make it our priority to buy locally grown produce not only to support local farmers, but also to reduce carbon footprint.

7.3 Pricing

Having to three different sizes for each items will increase cost. To maximise profit and minimise cost, Fast and Fruitiest will only be offering one size for every item in a 16 ounces cup. Our product will be price as follow:

1. Strawberry Smoothie$2.49 each2. Pineapple Mango Smoothie$2.99 each3. Berry Smoothie$3.49 each4. Fruit and Veggie Smoothie$3.99 each5. Fresh Apples (Red Delicious)$0.99 each

7.4 Distribution Channels

Fast and Fruitiest will make many stops around San Diego, such as school district locations, parks, downtown district areas, any business crowded areas. We will also expand our business locations based on the event that happen around San Diego. Such as soccer games near school district area or any football games. Any sport events will be mark in our business calendar thus allow us to be able increase our sale.

7.5 Promotional Plan

Social media such as Facebook, Twitter, Instagram, is a great place to reach millions of customs who live in San Diego county alone. This tool is going help with distributing fliers, offering coupons and contest, broadcasting when and where we are having sale specials, and free samples.Fliers can be distributed in many outlet by Facebook, Twitter, Instagram, and onsite. On the fliers, there will be a list of our usual locations. Each location will be noted to have its own normal hours of operation. In addition, the flier will also have brief descriptions of each of our hand crafted smoothies and its nutrition facts. Coupon will be used as a promotional tool to draw new customers in and also to appreciate old customers for their loyalties. Coupon will be distributed through major social media described above. Furthermore, coupons can also be given onsite after purchases preferably. Contests are fun and creative ways to expose our product to new customers. Contests will also give our customers a chance to win gift certificates for free smoothies or discounted price. An contest can occur online or onsite. It could be as simple as posting questions for the customers to answer. To win, they just have to have the right answer. Sale special is a great way to spark customers' interests to keep a constant flow of customers, especially after the menu has been status quo for a certain period of time. New special items should be on the menu for every four months. Free sample is a perfect way to draw new customers in, expose our new product, and spark the customers interest.

7.6 Feedback

Customer's satisfactions is the most important element of successful business practice. There are several ways that we can do to see if we have achieved customer's satisfactions.* Survey/comment box is a direct way to get customer's feedback. We will ask each customer to fill out a simple and short survey while waiting for the order. There will be three questions in the survey and one free response question. The comment box will be placed near the cash register. * Profit/losses can also be a tool to get customer's feedback. High profit indicates high customers satisfactions. Low profit indicates low customers satisfactions. * Inventory is also another way to get customer's feedback. The numbers of certain item being sold daily is a great indication of customer's satisfaction. The more the item being sold the higher the customer's satisfaction.

8. Operating Plan

8.1 Location

The warehouse and our storage place will be located in San Diego, CA. Preparations will be made to our food truck at this site. Such as transports fruit from our storage refrigerator into our food truck, utensils and machineries. The truck in expected to be ready before the hours of operation.

8.2 Facility and Operating Equipment

Our warehouse will be about 100 square feet in size. The primary purpose of this warehouse is storage; therefore there will be storage equipments, like freezers, refrigerators, utensils, storage containers and any inventory supplies. All preparation for the food truck business, such as washing all the fruit and the blenders will be done at the commissary place that we park our truck. The commissary place provide supplies such as free water and waste disposal. Between preparation for smoothies, blenders will be clean in the sinks of the food truck. Preparations area will consist a triple compartment sinks that consist of one hand wash sink and two kitchen sinks, and high-pressure kitchen pray in order to remove harsh contents. Fast and Fruitiest food truck is a used bakery food truck, therefore most of the appliance are already included and no need for replacement. We decide to used the include air condition, the triple compartment sink, the small beverage refrigerator to display our fresh items, two stainless steel prep tables. We purchase an extra reach-in 2 department refrigerator for more storage on the go to prevent wilt in fruit by the temperature. Four blenders will be purchase for the creation of smoothies. All process of making smoothies will be in the food truck to allow freshness in the products. All cleaning of the product as well as the machinery will be in the triple department sink.

8.3 Hours of operation

We will be operating 8 Hours a day and six days a week. During these hours, we will be going to different locations to sell. Since our location will vary day by day, our company website will post a monthly calendar of locations for quick use and reference by customers. Our calendar will be up to date with all the football games as well as small competition game of different schools in San Diego district. Our webpage on Facebook, Tweeter, and Instagram are update weekly to make sure customers can follow our direction. Monday: closedTuesday-Friday: 10am-7pmSaturday-Sunday: 9am-6pm

8.4 Suppliers and Vendors

Fast and Fruitiest possible suppliers and vendors are Suzies Farm and Brians Farmers Markets. We chose these vendors because their locations are very close to our business and they are organic, certified by the USDA. Suzies farm offers Community Supported Agriculture services and are easily found in almost every local farmers market in San Diego. Brians Farmers Markets as well as Suzies farm, offer CSA but its service also includes choosing or trading items we may possibly need more of or less of with other farmers selling at Brians Farmers Market. We will also make arrangements with them so we can procure our produce in bulk for the fruits and vegetables we will use the most. If for any reason we find ourselves short in produce, we will contact other local organic farms, for example, Archis Acress, Conellies Farm, Elis Farm or Moceri Produce. For non edible materials we will visit retail stores such as Costco and Sams club. We will always be aware of seasons, discounts and coupons to save as much as we can in these type of inventory. For other organic ingredients we will contact main manufacturers that are close to san Diego to avoid long distance transportations.

8.5 Operating Table

Fast and Fruitiest purchase our used food truck through usevending.com (15). Our storage unit will be rent monthly and sign an annual contract yearly (16). The machinery such as refrigerators and blenders will be purchase through the Chef Essential website (17). Transportation gas will be purchase through costco because every materials in food truck will be purchase through costco due to their great cash back program for small business owner (18). Utility usage will be conduct through the San Diego Gas Electric company (19).

EquipmentSourceCost

Food TruckUsevending.com$18,000

Storage UnitSparefoot.com$1,020

RefrigeratorChiefEssential.com$5,000

BlenderChiefEssential.com$1,648

Transportation GasCostco gasoline$250

Utility Cost (600 Kwh)sdge.com$130