A BUSINESS PLAN FOR DELICIOUS DELIGHTS COMPANY

A BUSINESS PLAN FOR DELICIOUS DELIGHTS COMPANY

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A BUSINESS PLAN FOR DELICIOUS DELIGHTS COMPANY

INTRODUCTION

            The company Delicious Delights will be a profitable undertaking in the UK’s food industry. In essence, the company will deliver ready to eat food to various customers within London. Delicious Delights will focus on the production of handmade meals that will be packed and delivered to clients in accordance with their orders and dietary need. Each recipe will vary so that the business will be able to sell products to vegans as well as to the meat eaters. With that said, it will be integral to take into account the marketing, financial and operational considerations that will dictate the company’s establishment. In this case, Delicious Delights will target fast food customers who inhabit the region of London. Instead of using typical advertising channels, Delicious Delights will rely on online marketing strategies. In the end, Delicious Delights will expand into a company that can supply ready to eat food for the entire UK.

UK’S FOOD INDUSTRY PROFILE

            More consumers in the UK are becoming more interested in what they eat and where their food comes from. Thus, the increasing demand for healthy foods that are not only convenient, but also sustainably produced highlights the growth of this food production, distribution, and consumption in the UK. Research reveals that supermarkets and local food services in the UK contribute to 95% of food sales (Pearson et al. 2011). Hence, this data indicates that big businesses such as supermarkets are the greatest competitors in the UK’s food delivery sector. Nonetheless, since supermarkets do not deliver ready to eat meals, it will be perceived that the country has great potential. In spite of the large volumes of food sold at supermarkets, non-supermarket retail outlets depict greater sales. These include food outlets such as bakeries, butcheries and other independent artisan food outlets (Pearson et al. 2011). Based on this evaluation, food delivery hubs are profitable market opportunities for entrepreneurs.

The food delivery industry in the world has been growing at an incredibly rapid rate. Likewise, there are numerous stakeholders who have discerned these market opportunities in countries like the UK. Recent studies undertaken by the Agriculture and Horticulture Development Board indicate that food delivery in the UK accounted for £8.1 billion in 2018 (AHDB., 2019). This amount accounts for 8% of the income derived from the entire foodservice market. By 2021, the market is predicted to be worth £9.8 billion (AHDB., 2019). Therefore, it is clear that the growth of food delivery in the country indicates a clear market opportunity for companies which can meet the demands of UK consumers. With that said, the most popular fast foods in UK’s market are pizza and Chinese food. Food delivery is a dynamic industry that experiences consistent levels of growth as opposed to other areas of foodservice.

GLOBAL FOOD INDUSTRY

In light of the growing foodservice market, organizations that deliver food are necessitated to adapt so that they can handle a diverse range of market challenges. Presently, the biggest competitors in the food delivery marketspace are Harvester, Burger King, and GBK (AHDB., 2019). Furthermore, titans like Deliveroo act as intermediaries for delivery of ready to eat meals but do not necessarily handle the production of food. In this case, Deliveroo holds sway over 10,000 restaurants since it first entered the market 6 years ago (AHDB., 2019). With ongoing technological advancement, companies have been able to increase the impact of marketing initiatives. Nowadays, delivery companies can communicate and carry out transactions through interactive online platforms. As the pool of delivery companies in the world widens, foodservice companies have been forced to continuously innovate their business practices.

OPPORTUNITY

In order for this venture to be successful, it will be crucial to understand the strengths and weaknesses of the UK’s food sector. The biggest opportunity for Delicious Delights is its ability to deliver ready to eat organic food to its clients. Instead of relying on artificially produced foods, Delicious Delights will procure fresh and organic ingredients from local farmers at convenient outlets. Local food hubs act as wholesalers by collecting fresh produce from a number of independent producers within the region (Pearson et al. 2011). Subsequently, these local hubs can distribute fresh grocery to large retailers like Delicious Delights at affordable prices. With that done, Delicious Delights will be able to produce, pack and deliver organic meals to consumers in London (Pearson et al. 2011). The business plan will elucidate how Delicious Delights will take advantage of this market opportunity to make a profit.

            Even though Delicious Delights aims to take advantage of the growing demand of organic foods, the company will need to identify inherent market threats. For instance, the seasonality of certain products will become a critical problem for companies that operate in the food sector. Without consistent supply, Delicious Delights will lose customers owing to the low supply of key raw materials. In addition to that, some food products are often highly priced due to the difficulty of transporting fresh produce to major cities like London (Pearson et al. 2011). In general, Delicious Delights will be compelled to find new supply networks that will keep the company well stocked during low seasons.

Projected Demand

            New entrants to the food industry like Delicious Delights need to make a lot of impact during the early years of establishment. As such, it will essential that the company meet the projected demands of its clientele. In order for the company to maintain profitability, it will need to cater to approximately 30 clients per day during weekdays and at least 45 clients during weekends in accordance with the table portrayed in the Appendix. Nonetheless, Delicious Delights can meet the demand of up to 75 customers during peak days such as Saturday and Sunday.

MARKETING OPTIONS

Option 1: Social media

            Unlike typical companies which rely on traditional marketing strategies, Delicious Delights will employ online marketing tactics for precooked organic meals. In this case, Delicious Delights will lure youth since they tend to associated with excessive social media use. Sites such as YouTube, Facebook, and Instagram will allow Delicious Delights to advertise its products on a global scale. Similarly, image-based social networking sites like Pinterest, Instagram, and Facebook will allow Delicious Delights to share images of prepared organic meals (Hall, Towers, and Shaw 2017). Thus, social media platforms could be used to share product and company information. The added advantage presented by these platforms is direct communication with their clients. Online advertising sources provide companies with an opportunity to reach the targeted demographic through customized ads. On top of that, the interactive platforms facilitate the instantaneous transfer of information between Delicious Delights and its online clients.

Option 2: Promotional printed materials

Apart from utilizing online marketing strategies, Delicious Delights will also incorporate printed marketing materials to reach the target market. With that said, the company will distribute brochures, flyers and business cards to different bystanders within London. Unlike online advertising, printed materials are tangible hence they can remain relevant for several months (Rosenbloom 2012). The printed materials will be designed in creative and innovative ways so as to capture the attention of the target population. Through printed materials, the company hopes to lure prospective consumers thereby increasing its market share in the UK’s food delivery industry. On top of that, printed materials have greater market reach since they can be received by different demographics instead of focusing only on social media millennials. The combination of online and offline marketing tactics will give Delicious Delights a competitive edge over the rivals operating in the industry.

Option 3: Handing out free samples

Delicious Delights will hand out free samples to bystanders so that the business can interact with target consumers. Although giving free samples is often discouraged due to the additional costs, it enables companies to create awareness on existing products while simultaneously receiving feedback from consumers (Biswas et al. 2014). Based on the consumer’s feedback, the delivery company will be able to understand the tastes and preferences of UK consumers. In this case, Delicious Delights will prepare and distribute packed organic meals in miniature sizes to citizens in London. The target population will sample the vegan meals as well as the meat-based meals. In the end, the company hopes to lure new customers who enjoy the food. In the end, Delicious Delights will be able to not only increase customer awareness but also to tailor meals to suit the dietary needs of London inhabitants

FINANCIAL CONSIDERATIONS

Delicious Delights is a company that will operate in one of the most high-income communities in the entire UK. In order for the company to meet the demand of its clientele in London, it is vital that the company identify feasible avenues for accumulating start-up funds. Without sufficient resources, companies will be unable to operate in London’s highly competitive industry as seen in the case of Pronto which collapsed in spite of raising significant investment capital (Butcher 2015). Based on initial estimates, Delicious Delights will require approximately £25,000 to become fully operational. As such, the most economical financing alternatives include requesting for bank loans, seeking angel investors or using crowdfunding strategies.

Bank Loans

Recent studies carried out on the UK’s banking system indicate that small-sized firms which intend to grow exhibit a high probability of paying moderate to high credit rates (Rostamkalaei and Freel 2016). In spite of this hypothesis, the acquisition of bank loans will provide the company with a stable source of revenue that will be essential for maintaining the day-to-day operations of the enterprise. For that reason, Delicious Delights will request for a loan from a credible bank with the hope that the company will be able to meet breakeven costs within a short period of entering the market.

Angel Investors

            Operating in London will be an expensive undertaking hence Delicious Delights will be necessitated to seek funds that will supplement the bank loans. In general, angel investors are capitalists who offer small and medium sized enterprises more than money. Accordingly, angel investors contribute financial resources, hands-on skills, knowledge, and expertise (Macht and Weatherston 2014). One of the key attributes of angel investors is that they tend to prefer anonymity. As such, Delicious Delights will be able to maintain its autonomy when operating in the UK.

Crowdfunding

            Crowdfunding can be fundamentally defined as the practice of funding an undertaking by accumulating small amounts of capital from different sources via the internet (Macht and Weatherston 2014). Since Delicious Delights will rely on online operations, it is only necessary that the company employ crowdfunding. By doing so, the delivery company will lure prospective investors while at the same time creating awareness on the establishment of the organization in London.

OPERATIONAL CONSIDERATIONS

            The biggest consideration for companies that handle food delivery pertains to the challenge of market distribution. Delicious Delights will rely on third-parties who will handle the obstacles involved during the distribution of products. In most cases, third-party distributors emerge as suitable intermediaries for transporting products from the production points up to the consumer’s location. In exchange, the intermediaries and receive around 10 to 15% commission based on the order’s value (BMI Research 2016). Companies such as Just Eat and Hungry House rely on third-parties to manage their supply chain processes. If Delicious Delights establishes its own supply chain, the company will encounter serious markets. Global organizations like Deliveroo, Amazons and UberEATS have deep financial reserves hence they can support extensive supply chain networks (BMI Research 2016). In summary, Delicious Delights will primarily focus on production while the intermediaries will concentrate on distribution.

            Delicious Delights is an entity that will base a majority of its business processes on online operations. Customers will be compelled to order preferred meals from a list depicted on Delicious Delights’ online platform. From the website, clients will comprehend the process through which meals will be prepared. Another company which relies on a similar business premise is UberEATS. UberEATS guarantees a 30-minute delivery duration for customers within UK branches (Auchard 2016). On top of that, the internet is a medium that will allow regular interactions between Delicious Delights and individual clients. Therefore, it will be discerned that the internet offers lucrative opportunities for Delicious Delights’ development.

OTHER CONSIDERATIONS

            After addressing marketing, financing, and operational considerations, this business plan tackles several other market challenges. For example, location is the biggest problem for Delicious Delights. Based on recent studies, prices for owning and renting land within London are at an all-time high (Edwards 2016). Like most food delivery companies, Delicious Delights will use convenience to facilitate smooth delivery of meals to customers. Given that land is extremely expensive in London, Delicious Delights will be unable to reach the entire target population. Therefore, it will be crucial for Delicious Delights to find suitable renting space that will act as the company’s base of operations.

CONCLUSION

Based on this business plan, Delicious Delights should be recognized as a profitable market opportunity for the city of London. By leveraging the company’s access to healthy organic food coupled with the use of online business operations, the company will be able to reach a large target population. With financial input from bank loans, angel investors and crowdfunding sources, Delicious Delights will be able to meet its day-to-day marketing and operational expenses. In spite of the severity of the market challenges, Delicious Delights will rely on this business plan to dictate the direction of its growth in the UK’s foodservice delivery industry.

References

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Auchard, E., 2016. Uber launches global assault on takeaway meals market, Reuters

[Online]. Available at http://uk.reuters.com/article/uk-food-delivery-idUKKCN11W2LN. [28 September 2016].

BMI Research (2016). Company Trend Analysis - UK Food Delivery Market Hots Up, BMI

Research [Online]. Available at http://www.foodanddrinkinsight.com/company-trend-analysis-uk-food-delivery-market-hotsmay-2016.

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EXHIBIT 1: Projected Demand