You have inherited the Max 3000 Dream-Maker Commercial Hot Dog Stand. How are you going to make it profitable? Your goal is to develop a business plan to secure investors for your Hot Dog Stand.
The final project for this course is the preparation of a professional business plan for a hot dog stand. You will work on segments of this plan each week. Preparing a business plan is a method of exploring activities considered important to the goal of the company or entrepreneur. It is merely a series of questions that lead you to think about the requirements and the possibilities of any kind of business. When you begin to ask and answer these questions, you begin to visualize the details necessary to be successful in a business.
Each unit will address parts of the group project to help you create a useful business plan for the Hot Dog stand. You will get feedback from your instructor along the way and then you will use this feedback to synthesize your business plan into a final, concise document (an edited version of the weekly submittals that reflect suggestions and helpful hints from your instructor).
For first week, this assignment, you were to submit answers to the 20 questions that were outlined in that assignment. If you would like to resubmit this assignment, please answer these 20 questions
1. Describe the business in only one paragraph
‘Q-Hot Dogs’ has entered the fast food market to provide an option that helps today’s fast life to fight with lack of nutrition. Breakfast and Evening Snacks are very important meals and ‘Q-Hot Dogs’ provides the option of opting from wide range of Hot Dogs that not only offer great taste, however are nutritious, light and healthy. The price range is fit for everyone and no need to wait as anyone can relish its taste on the go.
2. What is your product, or service?
We provide a wide range of hot dogs, salads and sandwiches, the most demanded items of the menu can be listed as Q-Fit hot dog, pizza puff sandwich, barbeque hot dog, corn hot dogs, grilled chicken hot dog, Italian sausage hot dog, Greek chicken ham salad, chili cheese hot dog and Classic veggie hot dog.
3. Who will buy it?
Anyone looking for a healthier snacking option will opt for it as it costs lesser, is ready to eat and provides more nutrition than other available fast food options.
4. Where should you locate the business?
These hot dog stands will be located near commercial spaces, offices, colleges and schools so that the product is accessible and available at all the places where young crowd comes as they are more likely to be interested in this product.
5. How can you attract customers?
Weight loss and healthy snacking have become a major demand and t will be a major hit if the customers can be attracted by offering tasty fast food (snack) without adding too many calories.
6. What is your competition?
Food chains like ‘Subway’, are also working on a similar concept and will certainly be a competitor to the business however pricing and availability will make a difference.
7. How much should you charge for the products or service?
The prices will be much lower than the traditional well known fast food chain and the effort will be to operate at only a 30% profit margin however to increase the number of units sold.
8. What advice do you need and who can provide it?
It will be interesting to use ingredients that can add to the taste of the product however does not significantly raise the amount of calories, as low-calorie food is the unique selling point for the company.
9. How will you organize the managers and/or workers of the business?
I will recruit one manager each for sales, training, operations, procurement and marketing. Sales manager will have ten workers each however the rest will have four workers except for training manager. Sales manager will be responsible to drive sales by getting the workers to sit at the stall and handle the customers. Training manager will be responsible for training and HR related functions for all the units. Operations manager will again concentrate on the creation and delivery (supply chain) of the product. Procurement manager will plan the procurement of the ingredients and pricing of the final product. Marketing manager will have a team who will work on promoting the product and generating sales.
10. How will you split the profits? Who is responsible for the losses?
Keeping 30% profit margins for the first year, 15% will help to cover the borrowed amount and 10% will be used in further improving the product and increasing the business. I will keep 5% profit as my basic earning.
11. What should you consider to be able to produce the product and get it to the customer?
It is important to develop a project plan that covers RTS (Readiness to sell), RTS (Readiness to serve) and GTM ( Go-to-market). These aspects must be thoroughly planned in order to obtain the necessary output that can the product and get it to the customer.
12. How much money is needed to get the business started?
$50,000 will be the initial investment in the business.
13. How many customers will you have per month and how much will they buy per month?
The plan is to target a sale of 20 units per counter per day (10 Counters to start with) and an increase of 10% in sales each year.
14. How much does it cost to make the product or provide the service?
For 1000 Units
Procurement (Average) = $100
Delivery = $50
Staff (Average) = $ 800
Marketing = $50
$1 / Hot Dog
15. What are your operating costs? (Include your own salary)
Managers will be hired at $3000 / Month (Full Time)
Workers / Helpers = $10 / Per Hour (Part Time)
My Salary = $5000 / 5% Profit (Which ever is lower)
Total Operating Cost = $15000 + $16000 + $5000 = $36,000
16. How much money will your business earn each month by selling your product or service?
Cost per Hot Dog = $1
Average Daily Sales at 10 Stalls = 200 ($3/Unit)
Per Day Earning = $400/day
Monthly = x 30 Days = $12,000
17. How much investment will you need to keep the business going until you make a profit?
No extra investment will be required over and above the initial expenses.
18. What is your potential profit per year for Year I, Year II, and Year III?
$144,000 Year 1
158400 Year II
174240 Year III
19. How much money do you need to borrow to start this business?
$50,000 will be the total investment required.
20. How will you make the business grow in the future?
Franchisee model will be introduced where, investors will be invited to open similarly branded stall in different cities at 30% profit sharing and $10000 upfront cost. The upfront cost will be used in marketing within the new territory.
