SOLUTION: Business Plan Part III Marketing Plan Commentary Paper

Running head: BUSINESS PLAN
1
Definition of my business, its mission, and its general strategy
Delicacy food Delivery Company is a firm in the service industry. The company’s mission
is to save workers’ time and inspire quality health by delivering balanced diets in their location.
The company offers food delivery services to workers in their different locations. Usually,
BUSINESS PLAN
2
customers order their preferred type of food through the company website. The payment for the
food delivery service is mainly in the form of cash or mobile payments. The customers are also
supposed to indicate when they want their food delivered (Fjeldstad & Snow, 2018). Delicacy
company’s headquarters are located in South Bend, Indiana, in a four-roomed building. The firm
has two branches, one in Indianapolis and another in Mishawaka. The food delivery company deals
exclusively with the food delivery and outsources food preparation to a third party.
The company has been in operation for the last three years, during which it has experienced
growth in different ways. For example, the company started with eight employees. Among them,
three served as company administrators, where one was a Chief executive officer, one a human
resource manager, and the other a financial manager. The rest were junior employees, among
which two managed the company website, while three worked in the field, where they delivered
food to customers in different locations (Fjeldstad, & Snow, 2018). During its first six months of
operation, Delicacy’s food delivery company served an average of two hundred customers. The
other half of the year saw an expansion in market size, where the number of customers increased
from an average of two hundred customers to an average of five hundred customers. Currently,
the company has one hundred employees who serve in the company’s two branches. The market
size for the company has also grown to an average of two thousand customers daily. The growth
in market size translates to growth in the business revenue and profits.
Besides the growth in the number of employees, market size, and profit, Delicacy food
Delivery Company’s operational size has increased. For example, the company has increased the
number of motor vehicles from one to five (Fjeldstad & Snow, 2018). The company also has a
total of ten refrigerators that serves in the two branches. The company’s technology has also grown
from three computers in the first year of operation to one hundred computers in the third year.
BUSINESS PLAN
3
General Business Strategy
Our company is keen to ensure that we become the most competitive food delivery
company in the market. The business seeks to secure the competitive advantage using three
effective strategies: differentiation, cost, and focus (Ployhart & Weekley, 2017). Under the
differentiation strategy, Delicacy food Delivery Company plans to differentiate its service by
delivering food to customers working on the night shift. Also, the firm wishes to add to its list of
products, fruits, snacks, and beverages to ensure it meets the different needs of its customers.
Cost
The firm has noted a general complaint from many customers that food delivery firms
charge high prices for their services (Ployhart & Weekley, 2017). At Delicacy food Delivery
Company, we plan to ensure our customers get the food delivery services at affordable prices. We
plan to source the raw food products required for food preparation from the farm or the market
rather than leaving it to be done by our third-party hotel company. By sourcing the raw food
products, it will be possible to cut reduce the food preparation cost to reduce the delivery cost.
Focus.
At Delicacy food Delivery Company, we want to focus on serving teams of workers and
eliminate those working as sole proprietors (Ployhart & Weekley, 2017). The reason for our focus
is to save time and money wasted when delivering food to one single customer at a specific
location.
BUSINESS PLAN
4
References
Fjeldstad, D., & Snow, C. C. (2018). Business models and organization design. Long Range
Planning, 51(1), 32-39.
Ployhart, R. E., & Weekley, J. A. (2017). Strategy, selection, and sustained competitive
advantage. In Handbook of employee selection (pp. 115-133). Routledge.
Running head: BUDGET AND CASH FLOW
1
Budget
Calculating the budget for Delicacy Food Delivery involved a strategic way. There was a
classification of the expenses into fixed and variable expenses. Some of the fixed costs for the
budget included occupancy cost/ rent, insurance, property taxes, phone and internet, licenses and
permits, marketing and advertising costs, kitchen equipment costs, contracting the law firm, COA
2
BUDGET AND CASH FLOW
firm, and payroll services. Since Delicacy is a firm that offers clients a website through which they
place their orders, the rent costs are as low as $3500. The company operates at one building that
it rents out. The second fixed cost was the insurance and property tax, which was 5% of the rental
fees. The business thus paid $175 each month as the summation of the insurance and property tax.
The Phone and internet costs were calculated as $70. This value was repetitive for each month.
For the company to operate, it is a requirement for it to have a license and permit. This allows the
firm to operate legally, and it also shows that the government is aware of the business operations.
License value is paid annually, and Delicacy paid $500. Additionally, the business incurred
expenses of marketing and advertising, kitchen equipment which was bought once at $15000,
contracted a law firm, a CPA firm, and had payroll services fee of $50 per month.
The variable costs for the business included food costs which ranged between 25000 to
30000 per month. Labor costs are the expenses incurred in paying the employees of the firm. The
labor costs were 30% of the food costs because the employees are the ones that prepared the food.
The total expenses were a sum of all the factors or elements of employment. As outlined above,
these factors gave January $52495 because the value involved kitchen equipment costs and
licenses and permits, which were paid once. February to December ranged between $35000 and
$40000.
Cash flow
Cash flow refers to the value of the cash coming in the company minus the value going
away. Cash flow for Delicacy is calculated monthly, and the value for money going away is the
budget for total expenses for each month. The cash inflows for the firm are the amounts received
3
BUDGET AND CASH FLOW
from the sales made monthly. From the cash flow presented in the Excel sheet, the values indicated
that there was less cash flow value for the first month (January) because the expenses were
extremely high. The rest of the months had cash flow ranging between 38000 and $40000. Cash
flow here is what the business makes (the profits) after making payments of the expenses.
There were surprises from analysis because head-scratchers arose on how much I should
be paying my workers per month (Anita, 2020). There is the issue of the minimum wage whereby
if put into consideration, then the business would fail to consider that it is a startup business. I had
to benchmark the other delicacy firms to ensure I make the right budget, especially the license and
permits. I postponed investing in storefronts because my business is a startup business, and I had
to monitor it before making such decisions. It is feasible to start the firm as an online venture
because that cuts the fixed costs associated with rent. The value for rent is only for a single
enterprise.
References
Anita. (2020). Restaurant Cash Flow Tips for Your Recovery and Beyond. Retrieved from
https://www.restaurant365.com/blog/9-restaurant-cash-flow-tips-for-your-recovery-andbeyond/
BUDGET AND CASH FLOW
4

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