Executive Summary
TOKB LLP is a locally owned but rapidly growing business that operates in the food industry. Now, there are numerous market segments in this gigantic industry and the one that TOKB LLP targets is the market for street foods, particularly food industry customers who frequently indulge in food truck orders. TOKB LLP is a partnership business that is currently owned by four different owners. During the conceptualization process, the owners came up with the idea of providing food on-demand services to this fast growing market segment by means of a food truck. TOKB LLP’s flagship product would be coned and cupped pizzas. With the main ingredients for its products being locally-sourced, TOKB LLP’s pizza products would definitely be easily patronized by a highly diverse range of customers across various social classes in the United Kingdom. This would mainly come as a result of the company’s unique selling point which hinges on cheap price points, with products ranging between the five to nine GBP (UK Pound), its unique product presentation (i.e. it is the first and only coned pizza seller in the country), complementary beverages, and excellent customer service. In order to sustain a consistent growth trajectory, the company plans on attracting a huge volume of customers coming from its main market segments right at the onset (i.e. within the first year) of its operation. This would enable the company to take advantage of the concept of economies of scale and position itself in a potentially fast growing market segment in the food industry. With a total start up budget of around 162,000 GBP and a projected running cost of 11,000 GBP per month, the company is uniquely positioned to take advantage of the low startup and operating costs associated with food truck businesses, relative to the traditional brick and mortar food businesses out there. All in all, the TOKB LLP appears to be a promising and highly sensible business investment for its owners and possibly, its future franchise owners, should it successfully achieve the growth trajectory that it has plotted in the future.
Aims and Objectives of the Business
The aim of the company is to create a food business that would be able to not only withstand but also overcome these anti-growth forces brought about by extreme levels of market saturation and lack of creative business ideas in an almost primitive but nonetheless gigantic industry—i.e. the food industry. The closest thing that came to mind was the creation of TOKB LLP. The specific quality of TOKB LLP that would make it stand out among other new industry players would be the fact that it is the first food business in the country that would offer coned pizzas.
Now, from an experienced businessman’s point of view, this may prove to be a gamble because TOKB LLP would basically be offering a new product, a substitute one if you will. One of the risks associated with offering a substitute product is the possibility that the target market would not bite it and in a highly competitive and free market environment, that is not a farfetched possibility . However, this risk can easily be mitigated and overcome by a well-conducted feasibility study, which fortunately the owners of TOKB LLP has completed already—the results of which suggest that there is a strong market appreciation and acceptance for its flagship food product.
Business Environment (Competitive Analysis)
It is a known fact that the food industry in the United Kingdom is already highly saturated, with a lot of new industry players consistently battling against the incumbents (i.e. the industry giants) for market share, and working their way up to achieve their growth and expansion projects. Collectively, the UK’s food industry, including all of its market segments, may also be characterized by the presence of cut-throat competition, price wars, and the continuous bloom of unique product value propositions. These were some of the biggest and most relevant issues that the owners and business strategists behind the TOKB LLP thought about during the planning stages. It is the very presence of these variables and realities that prevent new industry players in the food industry from consistently achieving their growth targets.
One key revelation about TOKB LLP’s plan to compete with other industry players is that it does not plan on competing with the gigantic incumbents in a traditional sense—where a new industry player tries to eat up a sizable share of the market from the incumbent players by hopping into their respective niches. What TOKB LLP plans to do in order to minimize the competitive pressures to its baby business is to create a niche of its own and that is where the introduction of the coned pizzas, a first in the market and in the country, should come in.
Products and Services Description
The following phrase best describes the company’s proposition as far as its products and services are concerned: a food truck company that offers a unique combination of cup and cone pizzas partnered with your favorite beverages and a high quality and friendly customer service. The main revenue generating source for the company would of course be its food products—i.e. pizzas and beverages, at least initially. The company expects to generate some 85% to 90% of its gross revenues from the sales of its food products alone and some 10% to 15% from that of its beverages. The company’s food products would be uniquely developed, although the ingredients that would be used would be all sourced locally. This was done in order to make sure that the customers would at least have an intermediate level of awareness of the company’s products even without having initiated costly marketing and advertisement programs yet .
Marketing Area, Segmentation, and Unique Selling Proposition
One should never forget that TOKB LLP is a startup and that the industry it has chosen to operate in (i.e. the food industry) is a highly competitive one. The level of competition in the target industry is one of the most important factors that must be considered during the planning stages of a startup business because it would have the most impact on other parts of the plan (e.g. financial planning, marketing and advertising planning, among others) . For the marketing area, the company is limited to conducting low cost digital marketing and advertisement campaigns only. The company, at least during its initial growth stages, plans on capitalizing the cost-efficiency edge of the word of mouth marketing with minimal assistance coming from a moderately aggressive internet and social media campaign. What can be observed from the company’s overall marketing plan is that the business is highly sensitive to cost. This is because if the business owners want to succeed, they have to make sure that they would be able to meet their sales target without bankrupting themselves. The most sensible way to achieve all of these prerequisites would be to cut costs. So far, the marketing and advertising strategy choices that the company has chosen fit that set of criteria.
Financial Analysis
The tables below summarize the financial plan and analysis component of the business plan for TOKB LLP.
The total startup budget allocated for this business was 162,000 GBP. Some four trucks are needed for the company’s startup operations. The budget for each truck is a conservatively estimated 35,000 GBP, bringing in the overall cost for the four trucks to 140,000 GBP. A provisional 11,000 GBP was allocated for the operational cost of the company for at least the first two months and a cash reserve of 11,000 GBP. The most important thing here is the cash reserve because financing (e.g. bank loans) can be expensive for a startup like TOKB LLP and so relying on cash reserves, obtained from its original startup capital, would be the most logical sense to minimize, if not completely diminish, credit and financial risks. Of course, everything will depend on the success of the company in terms of sales because sooner than later, the company would really need to tap financing options if its products would turn out to be (unexpectedly) not selling well.
References
Brinckmann, J., Grichnik, D., & Kapsa, D. 2010. Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning–performance relationship in small firms. Journal of Business Venturing, 24-40.
Lange, J., Mollov, A., Pearlmutter, M., Singh, S., & Bygrave, W. 2007. Pre-start-up formal business plans and post-start-up performance: A study of 116 new ventures. Journal of Venture Capital, 237-256.
Rumelt, R. 2005. Theory, strategy, and entrepreneurship: Handbook of Entrepreneurship Research. Springer, 11-32.
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