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11/19/2010

Guendalina, Ali, Stephanie, Mudasar, Yudhishthir, Noelle, Avijit

1.0 Introduction
As long as there are people in the world they will need to be fed, based on this statement we have had the idea for a successful business: catering for international students. The catering company we have in mind to create, with help from investors, will be called Catering and co. The aim of Catering and co. is to provide readymade healthy meals to international students and, even though there are many catering companies in London, we consider ourselves innovative because our target is students not adults. We would be the first ones to serve a young range of people in the English capital and this would mean stepping in to a new market which is both convenient and risky. Starting something in a new market would mean not having many competitors and having more chances to succeed but to achieve success there will be the need to be cautious in order to avoid failure. Starting a business like the one we have in mind will make a lot of profit quickly, before competitors start following, and this is even thanks to the quality of the service that we will offer. Our company would provide all types of food, we would have chefs specialized in all different types of cooking and this will allow us to provide a various menu from all over the world. London is known for being a student city, there are many universities and people come from all different countries so our service open to the young ones will provide them with good food from their home. We are obviously aware that the budget of an international student cant be too high so we will use simple ingredients and only little part of our staff will be fixed, we will hire more when we will be in need in order to limit our expenses. Keeping our prices low, advertising in the right places such as libraries, dormitories and student halls plus thanks to our qualified chefs and the punctuality of our drivers will allow to have a good reputation in a short time which would mean more profit. In a city like London our business can be really successful and quite hopefully in the future we will be able to expand to other cities, with the initial help from investors we will be able to open a perfectly operating company in a short time and pay back the investments. Investing in a company that will open in a new market might seem like nonsense but, following the business plan we have in mind and by working hard like we are willing to do, those that will have invested will soon realize that we will be able to refund them in a short amount of time and they will receive such good profits that they will surely invest again.

2.0 Start up plan

The catering company idea was created as we noticed that there is a gap in the market when it comes to readymade packed food for International students .There are very few companies who cater specifically for international students .We want the food to meet the students tastes/wants, provide the students with good, healthy food and also give them access to a variety of different foods such as Chinese, Indian and Arabic. The catering company will be a private limited company and its start up will be funded partly by private funds from the shareholders involved and by a bank loan. The funds obtained will be required for the start up and will be used in order to: 1. Pay the initial rental charges- Most commercial landowners require at least 3 months rent beforehand. Once the 3 month start period is over, we will then be able to pay every month. 2. Outsourcing vehicles for transport- Buying vehicles is a massive cost however; it is required so that we can transport our food from our premises to our customers. The more vehicles we have, the more efficient our delivery will be. We will ensure that the vehicles we purchase are best suited to a catering company and also that the expected depreciation is not too great. 3. Leasing cooking, refrigerating and packaging equipment- These are vital for the running of the business. We require good quality machines so that our maintenance expenses are reduced. Buying the equipment would be very expensive and would increase our startup capital significantly. Leasing will mean that we have to pay at regular intervals but require less startup capital. 4. Purchasing the various fixtures and fittings required- Miscellaneous items which may be required. This can include small changes to the premises etc. These costs will be minimal as compared with the expenses above. Being a private limited company ensures that we have limited liability and also classify the business as a separate legal entity. This ensures that the personal assets of the shareholders such as our houses, cars etc will not be taken away even in the event of us being unable to pay off the firms debts. For start up, we will rent the premises; we do not require an up market, expensive location as we only offer catering and so will not receive customers. The aesthetic aspect of the premises is less important. We have therefore decided to rent our premises in the industrial area. This will ensure that our rent is a lot cheaper. We will also need to hire the 30 employees who are included in the organizational structure. In order to avoid time wastage and excessive training costs, we will hire employees who have had previous experience in catering companies. In order to gain customers, we will introduce penetration pricing, discounts on longer contracts; we will sponsor student events and introduce special membership offers. We will also advertise in locations where our main customers will take notice such as in schools, clubs etc.

3.0 Financial Analysis

For this business, The Catering co., we have planned and analyzed the way we will organize and manage our resources financially. We will manage the resources with four different options available, which are leasing, outsourcing, renting and purchasing. Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. We have planned to lease our cooking equipments such as cooking stations, ovens etc; refrigeration plant and packaging equipment such as packing machines. Here are some advantages and disadvantages of leasing: Advantages of lease financing: It offers fixed rate financing; you pay at the same rate monthly. Leasing is inflation friendly. As the costs go up over five years, you still pay the same rate as when you began the lease. There is less upfront cash outlay; you do not need to make large cash payments for the purchase of needed equipment. Leasing better utilizes equipment; you lease and pay for equipment only for the time you need it. There is typically an option to buy equipment at end of lease term. You can keep upgrading; as new equipment becomes available you can upgrade to the latest models each time your lease ends. It offers potential tax benefits depending on how the lease is structured.

Disadvantages of lease financing: You have an obligation to continue making payments. Leases may not be terminated before the original term is completed. Therefore, the renter is responsible for paying off the lease. You have no equity until you decide to purchase the equipment at the end of the lease term, at which point the equipment has depreciated significantly. Although you are not the owner, you are still responsible for maintaining the equipment as specified by the terms of the lease. Failure to do so can prove costly.

Outsourcing is an arrangement in which one company provides services for another company that could also be or usually have been provided in-house. The decision for a business to outsource is often made in the interest of lowering costs or to make more efficient use of labour, capital, technology and resources. We have decided to outsource the delivery services of food to a distribution company. Here are few advantages and disadvantages of outsourcing: Advantages of Outsourcing Less capital expenditure - For example, by outsourcing distributions, company does not have to buy expensive vehicles. Less management responsibilities- There are fewer activities for the managers to handle which makes it easier for them to devote more time to the activities and make sure they are carried out efficiently. Focus on core competencies - Outsourcing non-core related processes will allow a business to focus more on its core competencies and strengths, giving it a competitive advantage. For example, focus more on food quality.

Disadvantages of Outsourcing Less managerial control - It may be harder to manage the outsourcing service provider as compared to managing your own employees. Outsourcing company goes out of business - If our outsourcing service provide goes bankrupt or out of business, our company will have to quickly transition to a new service provider or take the process back in-house. Maybe more expensive - Sometimes it is cheaper to keep a process in-house as compared to outsourcing.

Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another person or company. Our company will be renting the factory space, where the food will be cooked; and the office. Here are few advantages and disadvantages of renting: Advantages Flexibility of Lease short term leases, ready to go offices available for immediate occupation, vacate and move in quickly and at short notice, signing leases requires no legal costs and usually no references. Minimal Overheads minimal up front deposit, no fit out costs, no dilapidation costs, all inclusive monthly payment means ease of budgeting. Ease of Expansion or Reduction companies can expand or reduce space quickly and easily meaning that they dont waste money on idle space and can expand without changing their business address.
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Business Support business centers usually provide manned reception and admin staff. Professional Image you can always be assured that both the exterior and interior of the business centre is maintained to a high standard, helping your business project a professional image at all times, all interior cleaning is taken care of within the work station price.

Disadvantages Can be Expensive Long Term although the prices of serviced offices can save money on the short-medium, serviced business centers can prove expensive when renting in the long term. Uniform Offices business centers vary from converted buildings to built for use properties, some are full of traditional features or offer quirky, unique space, however some built for purpose centers can suffer from being rather uniform with offices that are all the same.

Purchasing is the act of buying or acquiring something. We have decided to purchase all fixtures and fittings such as office furniture, cooking and cleaning tools etc. As these things doesnt cost much compared to the items we are leasing, outsourcing and renting, so it will be cheaper and better to purchase them.

4.0 Strategy implementation and manager roles

In our company we have a general manager which will be the head of all the departments. The general managers responsibility is to control the company and direct it towards success. After the general manager there are four department heads. 1. Finance manager- The finance managers job will be to handle all the finances of the firm and keep the top level informed. Under the finance manager there will be accountants. The accountants role is that it continuously keeps a daily book of all the expenses and incomes that are happening in the company. The accountant will need to communicate with the stock supervisor of our company about stock levels. Therefore we will introduce the stock management system which will automatically inform the stock keepers when the stock is low. The accountant will keep the company updated with any new laws introduced that the business needs to follow in advance. 2. Operations Manager- The operations managers job will be to monitor all the production and distribution activities taking place in the firm. Working under the operations manager will be all the chefs, stock keepers, drivers and packagers. The firm will use the Just-In-Time stock management technique to keep cost of holding stocks low. The stock keeper will communicate and try to have good relations with suppliers which can help in raising the firms credit limit. The manager will make sure that packaging and distribution is done according to customers satisfaction. 3. Human Resources Manager- The HM managers job description will include recruitment and training where necessary. The HM manager is responsible for the well being of all current employees. His job will be to motivate and listen to suggestions and problems that employees may have. He will also have to recruit and select the right candidates for jobs in the firm. Recruiting the right people will reduce need of training and therefore reduce costs of the firm. 4. Marketing Manager- The marketing manager job is to overlook the advertisement and promotion of the firms products in the market. Under the marketing manager will be a small group of innovators who will think of ideas and make plans to promote the firms products. Outsourcing this can be expensive so having our own team will save costs. Student accommodations, book stores, student events, universities and student unions will be the main targets because these places have high foot falls of students. Getting this right will help us grow and become more established in the market. The manager also has to overlook the four Ps of the business. He will need to make decisions that will impact and change the marketing mix for the benefit of the firm. E.g.: We have decided to use penetration pricing (one P in the four= Price).

A small extract of the organizational structure is shown below:

General Manager Operations Manager

HR Manger

Finance Manager

Marketing Manager

All of these management functions are needed to satisfy our clients, which in return will generate more opportunities for our business to expand. It will create more interest in our business and improve our image. These management functions are there to manage the company successfully. These managers are needed to manage the business in such a way, that everything can be done appropriately. All of the staff will do their part of the task, which will create more motivation and responsibility. All of these aspects will lead to a more expandable and well known business with a strong image, which will have the opportunity to develop into a great success.

5.0 Market Analysis

As previously stated our target market is international students in London who want healthy, quick and home food. Generally most international students come to London and rent apartments with kitchens and tend to cook on their own since the cost of buying food everyday is high plus the health risk. This forces them to cook, but they dont really have much time due to university and house work. This keeps them very busy and the first thing they start to sacrifice due to lack of time is eating. Therefore our product will be healthy, tasty, affordable and quick to cook. Below is the analysis of the marketing mix: 1. Product: The food will be fresh everyday made food which can be preserved and kept in the fridge for 2 weeks and will still be consumable. So students can buy a lot and keep it in their fridges as well and eat it later. This will prevent students from missing out on meals due to time shortages. Our food is made by a variety of experienced chefs from different parts of the world which promises good tasting and healthy food. 2. Price: Our food will offer a unique combination of good food but at a cheap price. We have decided to use penetration pricing as our strategy to enter the market. Offering lower prices for good food will not make the students think twice about buying our products. 3. Place: We will be doing direct deliveries to doorsteps. We will not spend money on making a place where students can come and eat. This is because the whole purpose of us making such food is because students dont get time to eat. Therefore orders can be made online or by phone and will be delivered. 4. Promotion: Our firm is going to invest heavily in this since the student population in London is huge and getting to as much of them as possible is our goal. We will be advertising in libraries, student accommodations, student events etc. We will spend lots of money on this because it is important that students are aware of our existence.

Conclusion
In this business plan we have given a lot of information that will be relevant to investors when they decide whether or not to invest in our company. In the business plan we discussed: 1. 2. 3. 4. Our start-up plan information How we will purchase or outsource materials Organizational structure and strategies The marketing mix and analysis

We would like investors to come forward and invest in our company. This is because we are the first to offer such a service in the city. A completely unique service promises lots of business as we will have few or no close competitors. We will focus on getting brand loyalty by offering loyalty benefits to our customers. So even if a new competitor sets up, they will face it tough to find customers as they will be loyal to our brand. This will give us a strong market position. Also our product is up to date with the latest trends in which people dont have time for things like food. Anyone will love to have an alternative like this; many working adults will also be interested in buying our products, therefore increasing out scope even more. Another attraction for investors will be that we employ our workers on temporary basis depending on demand. Therefore there will be less fixed costs for the firm which means profitability will be higher as it is easy to hire and fire at will. Since we are a private limited company there will be limited liability for the investors as well as dividends paid on the amount of shares they hold. As you can notice for the start up plan, we will be leasing most of our equipment and not buy. This will reduce initial set up costs and will also remove the cost of repairs and disposal. By leasing the equipment, costs can be kept low meaning higher profit and better divided pay to shareholders. Since our firm will be quite small (30 employees approx) there will be less additional costs such as health care and sick leave for employees. All this increases efficiency in the running of the firm which will generate profits for Catering and Co. We hope you liked our business plan and would urge you to take a good look into it and make a decision about investing in our firm. We can guarantee if you do invest, you will not regret it. Thank you

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