Business Proposal Food Truck Business

BusinessProposal: Food Truck Business

TableofContents

Food Truck Business Proposal 4

1.0 Executive Summary 4

2.0 Business Concept 5

2.1 Mission and Vision 5

2.2 Description 6

3.0 Market Analysis 7

3.1 Market 7

3.2 Customer Segmentation 8

3.3 Pricing and Promotion 9

3.1.2 Profit Margins 11

3.2.1 Promotion 12

3.3.0 Communication- Social Media 12

4.0 Management Team 13

4.1 Working Structure 13

5.0 Marketing Plan 14

5.1 Targets and Marketing Allocations 14

6.0 Financial Plan 15

6.1 Start-Up Cost 15

6.2 Sales Forecast/ Predictions 16

6.3 Anticipated Problems 16

6.4 Long Term and Short Financial Plans 16

6.5 The forecasted budget 17

7.0 Operation and Management Plan 17

7.1 Expenses and Capital Requirements 18

8.0 References 19

Graph 20

Food Trucks Popularity Graph 20

Questionnaire 21

FoodTruck Business Proposal1.0Executive Summary

Therecentincrease in the number of young people consuming fast foods inMalaysia has brought with it business opportunities, which includeamong others fast food restaurants. It is in this line of businessthat we intend to start up a fast food truck business. The name ofthe company will be Sabdell Foods SDN BHD fresh takeout and the foodtruck will be operational in different avenues of Malaysia’scapital Kuala Lumpur, targeting various busy streets, recreationalparks, social public events, sporting events, and Universities aroundKuala Lumpur city.

Therefore,Sabdell Foods SDN BHD is a mobile food vendor truck, providingaffordable assortment of meals, snacks, frozen yogurt, and ice cream.The truck will cruise the streets of Kuala Lumpur Malaysia offeringdifferent flavors of ice cream, yogurt, soft drinks, and hotdogsallowing customers to choose from different sizes. In addition,different toppings will be available giving the customers to chanceto create their own personalized treats that may either be healthy orindulgent. In the case of special events, catering services will beoffered from the truck ensuring the events are enhanced.

Theindustry the street vendors industry is on a constant rise andcontinues to change, bring with it new and exciting options. Inaddition, the frozen yogurt market has been experiencing successowing to its healthy reputation and profitability. The target marketentails young adults from around the city mainly between the ages of18 and 30 years, with the yogurt segment targeting the healthconscious individuals. The market is segmented to focus on sociallyconscious trend setters of adventurous individuals and as such, theyare attracted to the modern feeling offered by the food truckexperience.

ManagementSabdell Foods SDN BHD will be led by John Doe and his partner ChrisAdam, an executive chef with previous fast food truck experience fromthe United States, where he worked on different food trucks dabblingup as a chef and serving customers. Whoever, to beginning with thepartners will have to operate hiring at least two minimum wageemployees to assist during weekends where customers might overwhelmthe food truck. Plans of the company for the future will includehiring additional employees and buying additional trucks dependingwith success rate the business registers. Ideally, the truck willhave three people at a time, one to run the catering services and theother two to manage the truck and serve the customers.

Competitionanalysis direct competition will come from fast food restaurants,other mobile food vendors offering other dessert styles in Malaysia.Secondary competition will mainly come from frozen yogurt stores, icecrème stores, and trucks. Nevertheless, the mobility of the truckgives Sabdell Foods SDN BHD an upper hand against their competitionsince it will allow the business to move to consumer and compete inthe market.

2.0Business Concept2.1Mission and Vision

Themission and Vision of Sabdell Foods SDN BHD are to be the leadingfast food takeout food truck in Malaysia, offering quality, value,speedy services, and fresh food giving the consumer a uniqueMalaysian experience.

2.2Description

SabdellFoods SDN BHD is a casual, yet tasty, mobile food vendor truckoffering frozen yogurt, hotdogs, and ice cream at different popularKuala Lumpur destinations. Thus, Sabdell Foods SDN BHD is gourmetfood facility, offering a vintage, yet modern and a clean appeal tothe Malaysian people. According Myrick(2012), the image plays a vital part towards triumph acompany assuch it is represented in the food truck’s menu, the color scheme,and promotional tactics. The menu will offer traditional optionsalongside specialty and signature flavors, which are named afterpopular Malaysia’s popular destinations. A flavor chart establishesthe flavor to be offered in a particular month, showing signaturetastes and specialty flavors. This will allow Sabdell Foods SDN BHDto constantly change the menu allowing the consumer to experimentwith the different available options. Finally, consumers will havethe option of topping up their dessert with the various toppingchoices that includes fresh fruit, syrup, candy, and nuts ensuringthe needs of healthy consumers as well as those of the extreme andindulgent are met.

Thevendor truck route has been carefully designed ensuring itcapitalizes on the different premier Kuala Lumpur locations designedto host mobile facilities. In addition, Sabdell Foods SDN BHD willcapitalize on the available opportunities to sell via the attendanceof special events around the city such as festivals, trade fairs,markets, grand openings, and other outdoor activities such asweddings. Therefore, the food truck anticipates long business hourson Fridays and Saturdays covering different outdoor events around thecity. The truck will engage the consumer via the social mediainforming them of the route it will take and giving them a platformto give their feedback that is inexpensive yet effective.

Belowis the image of the ideal Food Truck of an estimated value of aboutRM32, 026.80

3.0Market Analysis3.1Market

Theunrelentingraise in the number of individuals and especially theyoung consuming fast foods in Malaysia have been on the edge toencouraging operators to develop fast food businesses in Malaysia.Therefore, Sabdell Foods SDN BHD has the opportunity to entrench acompetitive position in Malaysia’s fast food industry. The companyhas an experienced team leader experienced in serving customers inthe fast food industry moreover, there is anemergent demand forquality, value, speed, and fresh food and the Malaysians (Bontis,Keow, and Richardson, 2000).

SabdellFoods SDN BHD will operate in the street vendors industry, anindustry entailing business that prepare and serve meals and snacksto consume immediately from modified trucks, or non motorized cartswith the industry is projected to continue experiencing growth. Whilethe food service sector has been experiencing mixed returns inbusiness due lower consumer spending rates during recessions, themobile fast food vendors have been experiencing huge magnitudes ofsuccess and high profits. Research has shown that the fast foodtruck business is expected to experience a market share jump of about3 to 4% in the next five years. Therefore, the truck fast foodmarkets are a viable market segment holding significant competitiveadvantages over the quick-service restaurants and forms of stationaryfood vendors.

3.2Customer Segmentation

SabdellFoods SDN BHD target market is segmented into two major groups, theprimary and secondary segments. The primary segment entails youngadults, especially the employed youth and college going young peoplein agebrackets of18 and 30 years that are health couscous and up tothe latest trends, residing in Kuala Lumpur city. In addition, thissegment of individuals appreciates the kind of convenience offered byfood trucks. Research has reviled that this group finds it trendy toindulge in the frozen dessert treat, making potential consumers ofcompany’s frozen yogurts and ice cream flavors. As such, SabdellFoods SDN BHD will make itself to this group of individuals whereverit sets shop.

Thesecond segment is the secondary group. This second segment tendscategorize consumers by psychographics as well (FoodTruck Business,2012).Therefore, Sabdell Foods SDN BHD tend to capitalize on the sociallyconscious trend setters, the adventurous people in our society whoare attracted to the modern feel of the food truck experiencecovering all ages and gender. Sabdell Foods SDN BHD will utilizemarketing tactics covering consumer awareness of their brand as wellas catering events the capital Kuala Lumpur.

Therefore,Sabdell Foods SDN BHD looks to attracting local residents living andworking around the capital Kuala Lumpur, as well as tourists who maybe looking for unique experiences in the Malaysian capital.Considering the fact that Malaysia hosts over 20 million tourists peryear, this opens up a huge potential market for the company. SabdellFoods SDN BHD will put forth efforts to reach this segment ofconsumers by utilizing market tactics focusing on fun, offeringunique Malaysian experiences, and a quality customer service.

Accordingto Kuala Lumpur city demographics, they show the capital’spopulation has been split in half with 48% females and 52% males. Thecity’s median resident age is 35 years, with those in the agebracket of 20 to 34 making up the biggest percentage of thepopulation in Kuala Lumpur, amounting to about 29% supporting theproposed target audience (Bontis,Keow, and Richardson, 2000).The capital residences have been categorized to be more affluent,earning more compared to other cities in Malaysia. Therefore, thecapital comprises of a middle aged community, bearing means to usedisposable income on items like the frozen yogurt offered by SabdellFoods SDN BHD .

Inline with the city’s geographic, Kuala Lumpur is the most populatedand the largest city in Malaysia. Kuala Lumpur has many resourcesincluding its location, population, and climate that will come inhandy in ensuring the success of Sabdell Foods SDN BHD business inKuala Lumpur. In addition, Kuala Lumpur has been registered to be thefastest growing metropolitan region in Malaysia, both as an economypower and in terms of population growth. Still, the millions oftourists, business, and the different attractions in the city offer ayear round outdoor recreation that translates to businessopportunities for Fresh Takeout.

3.3Pricing and Promotion

Inorder to determine the cost of goods to be sold, Sabdell Foods SDNBHD breaks down the cost for each product to be sold and packaged atthe food truck for the consumer. In addition, the company compareswith other business allowing them to estimate what likely customerswould be willing to pay, as such, establishing a simple yetcompetitive pricing strategy that will attractcustomers (FoodTruck Business,2012).Below is a break down how frozen yogurt/ice cream packaging

Price per cup in Malaysian RM – Cost of Goods Sold (Packaging Cost)

Mini

278.97/5000

.03

Small

206.85/1000

.21

Medium

236.85/1000

.24

Large

251.85/1000

.24

Napkin

35.64/1200

.03

Utensils

143.82/1000

.05

Cost of Goods Sold – Yogurt

Ingredients whole milk, sugar, yogurt, corn syrup

Total cost

196.86 RM

Asan effort to come up with prices forthe yogurt by size, the packagingand product cost were calculated by small amounts to ensure itaccounted for the different sizes. Thus, by totaling up the price percup, napkin, utensils to be used, and the yogurt, we come up with thetotal cost for each yogurt by its size as indicated below inMalaysian RMs

Size

Cup

Napkin

Utensils

Yogurt

Totals

Mini cup

0.03

0.03

0.15

1.47

1.68

Small cup

0.21

0.03

0.45

2.895

3.285

Medium cup

0.24

0.03

0.15

5.79

6.21

Large cup

0.24

0.03

0.15

8.67

9.09

3.1.2Profit Margins

Profitmargins are projected to range from 65% to 257%. However, the profitmargin falls owing to the increase in size as it rates to the cost ofthe yogurt, with the main cost of the product totaling to about 75cents per small amount. Therefore, this data confirms the pricingstrategy will be successful and the likelihood of attaining potentialprofits. The projected prices with thus be as follows

Cost of goods

Selling price

Percentage profit

Mini

1.68

6.0

257%

Small

3.30

9.0

172%

Medium

6.14

12.0

93%

Large

9.09

15.0

65%

3.2.1Promotion

Researchhas showed that promotion of your food truck calls for personalinteraction with the potential customers creating the atmosphere thatcreates interest in your mobile food vendor business (Myrick,2012).Considering the fact that potential customers are inclusive of thecurrent and customers that have the likelihood of turning into repeatconsumers, then promotion is due to happen inside and outside thetruck. As such the truck’s management will adhere to the followingpromotional strategies

Themanagement will see to it that its employees are trained in personalselling, thus, the service window staff as well as the on board staffwith capacities to take place outside the track. When customersfinish their meals, the truck manager will talk to some of them,thanking them and asking what they thought of the service and thefood. Top management at Sabdell Foods SDN BHD will personally attendlocal art festivals that will provide vending opportunities andgiving handout samples. When talking to potential customers, we shalldisplay excitement about the products and services we have to offer.The truck will also try to get involved with the community attendingdifferent activities, and finally, there shall be handing out offlyers, menus, and coupons, done personally at the food truck tocustomers.

3.3.0Communication- Social Media

Participationof the social media in marketing has been playing a vital role insuccess in marketing (Mangoldand Faulds, 2009)therefore, such channels as Facebook, Twitter, and Instagram will actas the prime platforms to be used in communication to potentialconsumers of Fresh Takeout. Twitter will be utilized in givinglocations of the truck and special offers be given. Twitter willconstantly bear updates of services offers the truck will be giving.The trucks facebook page will link to the twitter account and it willreflect the same data. The Instagram page will spread pictures of thedifferent products and the image of the truck in general. From thesocial media platform consumers will be able to give feedback aboutthe truck services that will hopefully help the truck excel in thefood vending business.

4.0Management Team

SabdellFoods SDN BHD will run as a partnership between two individuals atthe start of the company. The two partners will collaborate in allareas of the food truck business, that is, management, finances,human resources, and the marketing of the food vending business. Thepartners of the company intends to be a full time employees, thus,they are to be onsite throughout the operation of the business. Atthe initiation of business activities, the partners are to hire atleast two employees payable at an hourly rate. When the companybecomes self sufficient, it is then that they will start to hireadditional employees and consequently reduce the partner’s hours oflabor in the truck. As such, the long run goal of the partners willbe to run the food truck as managers opposed to their initial laborin physically running the truck, thus, one partner will be mandatedto manage catering services while the other manages the truckoperations (Myrick,2012).

4.1Working Structure

Employee

Employee

Management

Owner/ Partner

Owner/ Partner

5.0Marketing Plan

Beforethe commencing the a grand opening, the internal management willutilize a small scale promotional campaign targeting differentmarkets in Malaysia’s capital Kuala Lumpur by passing flyers,samples, and utilizing an online social media platform to increasethe awareness of the food truck. Promotional costs will be minimal asit is the street vendor industry since it mostly depends on the wordof mouth and a utilization of the social media platform. Therefore,Sabdell Foods SDN BHD plans on engaging in an inbound marketingstrategy, offering interesting content and hopefully earning theattention of viewers.

SabdellFoods SDN BHD with eventually hold a grand opening, with theemployees passing out samples and flyers that are informative to thepotential customers showing the different brands to be offered andpreferences. In addition, the food truck business will utilize socialmedia marketing and interactions with potential customers, informingthem of the route the truck will take and special on the menu.Finally the truck partners are opening up a website where all theproducts and services offered can be found.

5.1Targets and Marketing Allocations

Themarketing campaign will mainly target the young tacks in age bracketof 20 and 30 years, working or attending university colleges aroundthe capital Kuala Lumpur. The cost of the marketing campaign isminimal especially owing mostly to the utilization of the differentsocial media platforms and the word of mouth. As such marketing willbe allocated a minimal RM900 to be used in printing flyers andpromotional t-shits.

6.0Financial Plan6.1Start-Up Cost

Accordingto Prindezis,Kiranoudis, and Marinos-Kouris(2003), the biggest cost in food truck business is the cost of themobile facility nevertheless, this is to be financed as part of thebusiness loan. Other major expenses will include procuring the yogurtmachine, kitchen equipments, and monthly commissary expense. Thus,the total cost is RM129, 836.19 as indicated in the table below

Equipments

Quantity

Price in RM

Total in RM

Food Truck

1

32,026.80

32,026.80

Yogurt and Ice crème Machine

3

1,120.84

3,362.52

Cash register

1

611.64

611.64

36” by 48” oak frame black marker boarder

1

137.97

137.97

True T-49 refrigerator reach in 2 door

1

8,577.60

8,577.60

Food truck maintenance

469.50

469.50

Kitchen supplies

Grand total

3,007.68

3,007.68

Yogurt ingredients

Grand total

495.90

495.90

Toppings

Wet and dry

1950.00

1950.00

Other expenses

expenses

15,142.98

15,142.98

Grand Total

RM 129, 836.19

6.2Sales Forecast/ Predictions

Accordingto a sales forecast on similar food trucks and restraints, thebusiness reported ticket sales of 200 to 600 everyday, with the topsales being of the medium sized yogurt followed by the small sizecup. Considering that Sabdell Foods SDN BHD is a new business, salesprojection is estimated to be 10% of average total sales incomparison to the competition. Thus, the truck is expected to have atleast 40 sales per day with the projected expected to increase withabout 10% in the first 3 months.

6.3Anticipated Problems

SabdellFoods SDN BHD anticipate intense competition from existingrestaurants serving similar products. In addition, indirectcompetition s anticipated from all food trucks, and fast food chainswith Kuala Lumpur city. This establishments offer desserts, sweettreats, and light snacks all which are a competition to the productsoffered by the Sabdell Foods SDN BHD truck. Nevertheless, the truckintends to ensure it has a competitive advantage of its main rivalsin the street food vending business (FoodTruck Business,2012).

6.4Long Term and Short Financial Plans

SabdellFoods SDN BHD intends to apply for a financial loan from the AllianceBank Malaysia of RM 225,000 to be repaid in a span of 5years with aninterest of 4%. The loan will cater for all the startup costs and theexpenses on the next 3 months. Monthly payments of the loan will beRM4, 143 till the loan is fully paid in full. This allows the foodtruck management to make various purchases allowing the food truck tostay liquidated until its sales have acquired a positive cash flow.

6.5The forecasted budget

Belowis a forecast budget of the startup food truck company.

Equipments

Quantity

Price in RM

Total in RM

Food Truck

1

32,026.80

32,026.80

Yogurt and Ice crème Machine

3

1,120.84

3,362.52

Cash register

1

611.64

611.64

36” by 48” oak frame black marker boarder

1

137.97

137.97

True T-49 refrigerator reach in 2 door

1

8,577.60

8,577.60

Food truck maintenance

469.50

469.50

Kitchen supplies

Grand total

3,007.68

3,007.68

Yogurt ingredients

Grand total

495.90

495.90

Toppings

Wet and dry

1950.00

1950.00

Other expenses

expenses

15,142.98

15,142.98

Grand Total

RM 129, 836.19

7.0Operation and Management Plan

Asearlier mentioned, Sabdell Foods SDN BHD will operate as apartnership with the partners being responsible for operations in thedifferent areas of the business including the management, finicalcontrol, hiring aspects, and marketing their enterprise. Mattersoperation, the owners of the food truck will be onsite where theywill be participating as full time employees (Myrick,2012).The company is to hire an assistant to help in the running ofservices in the truck and he/she will be payable on an hourly basis.As part of the management plan, the partners plan to work in thetruck till the business can be self sufficient, from this point theywill hire additional employees and they will move back to amanagerial position opposed to the current physical involvement inthe chaos of the food truck. As managers, one partner will manage thecatering services while the other manages the truck operations.

7.1Expenses and Capital Requirements

Theinitial expenditure required to kick start the food truck business iscovered by the bank loan from the Alliance Bank Malaysia of RM225,000. The loan will aid in procuring of yogurt machines, kitchenequipments, fuel expenses, and monthly salaries for the assistantemployees. The monthly expenses of the business entail everythingthat the food truck will require to remain in business covering allthe fixed and viable costs. Some of the anticipated monthly expensesinclude auto loan, insurance, business loan, gas, parking costs,promotional costs in flyers, phone, and salaries. Also as part of themonthly expense are the inventory comprising of the ingredients,paper packaging, and toppings.

8.0References

Bontis,Keow, and Richardson, S. (2000). Intellectual capital and business performance in Malaysian industries. Journalof intellectual capital,1(1),85-100.

Mangold,W. G., &amp Faulds, D. J. (2009). Social media: The new hybridelement of the promotion mix. Businesshorizons,52(4),357-365.

Myrick,R. (2012). Runninga Food Truck for Dummies.Wiley.

Prindezis,N., Kiranoudis, C. T., &amp Marinos-Kouris, D. (2003). Abusiness-to-business fleet management service provider for centralfood market enterprises. Journalof food engineering,60(2),203-210.

GraphFoodTrucks Popularity Graph

Thepopularity of food truck in Malaysia is higher among the teenagersand young men and women in the age brackets of 17-39, from where itspopularity begins to fall.

Questionnaire

1.Which category below includes your age?

17 or younger

18-20

21-29

30-39

40-49

50-59

60 or older

2.What time of the day are you most likely to purchase food from a foodtruck?

Morning (8:00am – 11:00am)

Lunchtime (11:00am – 3:00pm)

Dinner (3:00pm – 8:00pm)

Late Night (8:00pm – 2:00am)

3.How important is price when choosing breakfast or lunch items wheneating out?

Extremely important

Very important

Moderately important

Slightly important

Not at all important

4. How satisfied are you with the current food options in food trucks?

Extremely satisfied

Very satisfied

Moderately satisfied

Slightly satisfied

Not at all satisfied

5.At about RM6 per wrap, do you feel that this is a fair price to pay for a lunch item?

&nbsp Extremely fair

Very fair

Moderately fair

Somewhat fair

Not fair at all

6. How often do you travel to food truck on a weekly basis?

&nbsp 0 times per week

1-2 times per week

3-4 times per week

5-6 times per week

7 or more times per week

.

7. What meals do you typically eat out? (Check all that apply)

Breakfast (8:00am – 11:00am)

Lunch (11:00am – 3:00pm)

Dinner (3:00am – 8:00pm)

Late Night Snack/Late Dinner (8:00pm – 2:00am)

8. What is the most you would be willing to spend at a food truck for a meal, side dish, and drink?

RM6 – RM7

RM8 – RM9

RM10 – RM11

RM12 – up

9. What social media sites would you use to locate the food truck? (Check all that apply)

Facebook

Twitter

Foursquare

LinkedIn

E-Mail

10. Which types of food would be most likely to purchase? (Check all that apply)

&nbsp Hamburgers

Hotdogs

Sandwiches

Frozen yogurt/ ice cream

11. What side items would you like to see on a menu? (Check all that apply)

Fresh Cut French Fries

Homemade Potato Chips

Macaroni and Cheese Bite

Others (specify)

12. Do you have any other food or beverage suggestions for a food truck?

13. Would you use a Smartphone app to track the location of this food truck?

Yes

No

14. In what city do you currently live?

Kuala Lumpur

George Town

Ipoh

Other (please specify)

15. What is your gender? (Optional)

Male

Female