Business Plan For London Friend Chicken Marketing Essay

Business Plan For London Friend Chicken Marketing Essay Business plan is a document which is of very much importance. It is a plan which sets up the outline for doing a business and ascertaining its direction for growth and making profit in the future. In this report, a business plan is developed for the purposes of a new business which is to be started. The business plan is at the helm of every business where the planning, formulation of strategy, designing of the process and the setup of the business in performed. This document is of a prime nature and of valuable importance for the company which is planning to do the business from the start. This plan will set the objectives of doing the businesses and the overall strategy to follow so that the business will succeed. The strategy and projections for the business are set in this plan so that it is known well before in advance that in which direction the company / business will going to move. Here in this report, we will initially define the basic terms that are commonly to be used. This will than be followed by the discussion of the business plan, the objectives of the business, the products that will be offered by the business, an analysis of the market, a summary of the overall strategy and implementation, web plan, summary for the management and the financial plan will be discussed in the below paragraphs in this report. This report will comprehensively cover the aspects that are required for the purpose of a new and successful business plan. Some of the key definitions are discussed here under for the sake of creating an understanding for the users of this report: 1.1. BUSINESS PLAN: Planning plays a very important role in ascertaining how a business will perform and the level of success that it will achieve. Therefore, the essential and required aspects for the success of a business are the identification of the relevant goals and the development of the strategies for the purpose of obtaining and achieving those goals. A business plan is a significant aid and tool using which the business can actually organize their goals which it wants to attain and the objectives it has set for itself. This is basically a dry run of the company or in other words we can say that this is what a company will look like on paper. The business plan is used by the companies irrespective of the size and / or stage of the development process. It is used by the companies to bring improvement into its operations and to do marketing and give description of the business to those who will finance the project. The business plan generally follows a standard format for the purpose of this plan . By effectively utilizing a business plan the companies can not only attain and obtain their goals but even can do much better than that. Hormozi, A. M., Sutton, G. S., McMinn, R. D. Lucio, W., (2002) The level to which a business plan shows and incorporates costs and overheads and the resource allocation like the research, production, warehouse, storage, transport, distribution, training, head office, wastage, vary with the needs of the business. 1.2. STRATEGY: This sets the direction of the plan as how and in what manner it will work. This is usually set by the owners of the business or the shareholders of the business or the top management of the business sets the strategy for the business. This strategy sets the manner in which the company is going to operate and will strive for the purpose of obtaining the profits and goals and objectives of the company. The strategy needs to be set at the point of inception before anything is or could be done so that the business thrives and prospers as per the direction it has set for itself and the plan that it has made for attaining that objective and strategy. 2. DETAILED BUSINESS PLAN: This report now discusses the business plan of the business which is going to be set up. This business will thrive to make profit by making a good format, plan and strategy so that the company can be able to survive as well as than it can be able to make the profits. In this detailed business plan we will discuss the nature of the business, the objective of the business, the mission of the business, the strategy by which the business will operate and the pattern and mode in which the business will achieve the profitability. 2.1. NATURE OF BUSINESS: The nature of the business is a fast food restaurant chain having restaurants in three locations in London. The name of the business is proposed to be London Fried Chiecken LFC. This is a locally based and self owned fast food outlet chains. This will be positioned and made an international brand of the fast foods restaurants throught the creativity and approach in respect of the image of the outlets. This fast foods restaurant chain will provide very high quality food at value prices on buying this in combined. This food will be served in high quality presentation and layouts. London Fried Chicken is to be opened in relation to an increasing demand for snacks and fast food. This food is in demand especially when the people when the customers do window shopping or they walk in a shopping mall. In highly competitive environment of todays, its becoming more and more difficult to differentiate one outlet of fast food from another. London is the economic hub of not only the United Kingdom but also to most of the European Countries. With more than 11 million people visiting yearly, mainly from neighboring countries particularly in the European Union, Londons retail sector is very strong in the region. We have set out our main priority for opening the outlet in the central London, preferably in the central London or may be in one of the prominent malls for shopping in London. Later, through this effort we have plan to further develop more retail outlets in the areas surrounding. This business plan is being prepared for obtaining a location for initially launching of the concept. Additional finance amount will be required to be obtained for the purpose of opening two outlets subsequently, which we anticipate to open in  the thirteenth month and then in the third year after it. The amount of finance form the capital contributed by the shareholders will result in London Fried Chicken to open successfully and in doing expansion of the business within two to three years. The initial amount of capital invested will allow LFC to provide its valuable clients with a valuable and good experience through the creativeness of its founders. London Fried Chicken will  attract more youngsters in bringing their family and friends with our environment which is innovative, fresh cut Belgian fries, and other selected and unique dipping sauces. 2.2. OBJECTIVES OF THE BUSINESS: The following are the objectives of the London Fried Chicken: Making LFC a place to visit for eating for those who do shopping in malls. To establish its presence in London as  a successful fast food restaurant chain and gaining a market share in Londons industry of fast food. To do expansion into many outlets by the year three of business, and also sell our franchise to our neighboring metropolitan cities, like Paris, Spain, Bulgaria, Istanbul etc. 2.3. MISSION: The main aim and target of London Fried Chicken is to be among the most successful outlets of fast food in London, starting with one main outlet located in the main central London located as market tester. London Fried Chicken will strive to make itself a premiere local brand in fast food in the marketplace. We want to provide our customers the total all-in-one experience when visiting our place and also our website as they will know more about our new pop culture. We will be selling the products and goods from sauces which are pre-packaged and also t shirts, potato cutters etc, all with our own corporate brand name attached with it. Our main focus will be serving high-quality food at a great value. 2.4. KEYS TO SUCCESS: For being successful in the business we need to: Be innovative, having entertaining menu and creating a unique experience for customers, that will differentiate us from the other competitors. Controlling our costs at all times, in various areas and implementing a more conservative approach to our policy of growth. Although, as we want to be on the safe side in doing business, so we give more than required fund for opening more than one outlets. Selling products which are of the high quality, while keeping our customers happy and satisfied with our various product categories of food. Encourage the two most important values in fast food business: brand and image, as these two ingredients are a couple of main drivers in marketing communications. Providing 100% satisfaction to the clients and maintaining the level of excellent services among other competitors. Promoting good values of our business culture and philosophy of doing business. Get access to high-traffic shopping malls near the target market. 2.5. SUMMARY OF THE COMPANY: What London Fried Chicken is? London Fried Chicken sells  our French fries in a cone  with a  choice of sauce. We are using the concept of Belgian Fries, where the fries are prepared from fresh potatoes and fried two times. Our business also provide clients with excellent and good customer services to support fun ambience, and an energetic and youthful living style.   Fresh and youthful surroundings Following the patterns and footsteps of Starbucks and KFC, which also represent our core target market majority, between ages18 to 35 years of age. Our store will have live cooking of our main feature Belgian Fries from cutting to frying. Our client can be able to read our in-house brochures in respect of all the knowledge about Belgian Fries and our featured sauces. The store we have will be decorated with fast food setting, such as a bright counter and display menus on the wall. Quality food Each  of our outlet will  offer good quality service and food form our freshly fried Belgian fries, sandwiches and variety of other sauce blends, all served with old-fashioned home-style care. Open everyday The opening times of the store will be everyday from 11 am to 11:30 pm. Variety, variety, variety A new range of sauces will be displayed every three months and we will also change our Italian soda flavors to accompany our fries. 2.6. OWNERSHIP OF THE COMPANY: London Friend Chicken is a privately held business. It will be registered as a Limited company in the UK, with ownership 25% Tim, 25% Joseph, 25% Carol, 25% Amanda. Tim and Joseph have more than 10 years of experience in the food business. Both are currently working as Corporate Staff of a Company. Tim holds an MBA degree from University V. He is an entrepreneur by heart and his latest entrepreneurial project is a diamond store in the hub of London. Joseph holds a BA degree in Graphic Designing from the Arts Academy. His projects are widely varied from product design to developing brands of several reputable companies. Carol holds a MS degree from an Institute Y. She completed many projects and also served as project manager for multi-national companies in London. Amanda holds a BS degree from University Z. She has majored in Management and Information Technology. Prior to her return to London, she has held several management positions in a U.S.-based IT company. 2.7. LOCATION OF THE FACILITIES OF THE COMPANY: London Fried Chicken size of location will range from 50 70 meters square and will have seating from  18 to 30 guests. First of our locations will be on the larger end of this range. This venue will have features such as its own display of merchandise and other attributes for brand building. The outlet will be equipped with modern furniture and  aim for  calm and an  open feeling. We are currently searching at various possible venues around London Bridge or Oxford Street central London areas.. The venue will be selected based upon the following criteria: Tourist destination. Community size: minimum of 800,000 people within a radius of 8 kilometers. Large percentage  of teenagers in the community. Easy access. All of the above features are consistent with London Fried Chickens aim of providing a top class fast food experience. We want our best form of marketing to be word-of-mouth, where our customers value our brand as something exciting and cannot resist from telling to their friends and neighbors. London Fried Chicken will be competing directly with several other fast food giants inside the selected shopping mall. 2.7. COMPANYS PRODUCTS: We want to focus only on selling fries. Alcoholic drinks will not be sold in our outlet, as Fresin Fries promotes a healthy and positive Singaporean lifestyle. Instead, we will offer Italian Soda  to complement the fries. In promoting  the  Fresin Fries  lifestyle, we will offer various merchandise  with our logo and colors, from hats to t-shirts to potato cutters to our signature sauces, so that our customers can enjoy Fresin Fries at home. Our signature sauce is exclusively manufactured by Company Q. They can be also purchased at selected retailers. 2.7.1. DESCRIPTION OF OUR PRODUCTS: London Fried Chicken will sell friend chicken, burgers and fried together with our  unique sauces for dipping. Main products sold are: Chicken Roasted, Chicken Hot Burger, Chicken Sandwiches, Chicken Burgers, French Fries, Special Dip sauces etc. Also we will be having available Belgian-style fries in large 2 dips, or small 1 dip, with addition of garlic Fresin (add  £0.25). There are more than twenty flavours available for the dips for Belgian style fries which also be served with sandwiches. These dips are available in more than 20 flavours: Satay Sauce Pesto Mayo Thai Chili Ketchup Teriyaki Sauce Roasted Pepper Mayo Creamy Wasabi Mayo Black Pepper Sauce Lava Cheese Barbecue Curry Ketchup Caribbean Islands Jalapeno Ketchup Traditional Sambal Hot Chili Sauce Korean BBQ Garlic Dip 2.7.2. COMPARISON WITH COMPETITORS: London Fried Chicken will have several advantages over its leading competitors. These are: A high degree of enthusiasm is expected by us and we offer a store with fun having friendly staff, that reflects the culture of youth and energy at LFC. Unique concept based on fusion of dipping sauce. We do not use frozen fries as compared to other competitors and our fried potato is made 100% fresh. We have innovative packaging which is more entertaining than our competitors; we serve a single cone with cup which is reserved for dipping sauce. Our dipping sauce is made fresh by us without adding preservatives. 2.8. SOURCES OF OUR RAW MATERIAL: Our suppliers will deliver fresh halal chicken along with fresh potatoes will be delivered on a per week basis by our supplier who is based in Scotlan. We also undertaken an agreement with  Organization Q for exclusively manufacturing our crispy chicken, signature dip sauces. Our merchandise items will be printed and produced by our partners office in China. 2.8. PLAN OF SALES: We have set almost similar patterns of marketing for each of the LFC stores. Below are the programs that we have setup for opening of each of LFC locations. 2.8.1. OPENING IN A GRAND MANNER: We will be putting outdoor signs on each outlet as soon as possible for grasping orders in advance for parties etc. This signage will be supported by banners before opening of the stores. 2.8.2. POINT OF PURCHASE: We will be using the concept of tray toppers for the purpose of explaining our business and style. We will also be selling to our clients the gift certificates, announcing future jobs openings, and possibly will also mention about franchise opportunities. 2.8.3. DIRECT MAILS: Also, direct mails will be sent to the customers starting from a stand-alone piece, which will be folded, will be produced in good colours on good quality weight papers. Inside the brochure there will be all the required and essential details of LFC, explaining our menu, house of operation, prices and a map to find our location. 2.9. PRODUCTS FUTURE: Initially we will focus on capturing market share by selling our dipped and fried chicken and our good French fries and signature sauces. However, when grow ahead, we will also bring new additional categories to our menu, such as Buffalo Wings and Belgian Sandwiches. Our future growth strategy will be to offer franchises of our LFC brand to other food businessman in the region. There various examples of success of various organisation in the same business line on growing globally. 2.9.1. MEALS WITH VALUE: The LFC deals come with value for the customers. Sales of our products will not only generated from the sales of our Belgian Fries, but also will be generated by the concept of innovation in our packaging menu which is called the value meal. It is a deal which consists of combinations of our sandwiches, or burgers with featured Belgian Fries at much better value instead of us selling the individual items. We can also do customize sales by selling a fries which are of bigger size called Uber Fresin to attract price sensitive clients 2.9.2. LARGE PARTIES OF PRIVATE NATURE: We can also handle private parties and handle banquets, in addition  to our brochures which will be listing our entrees on a daily basis. 2.10. SUMMARY OF MARKET ANALYSIS: Consumer spending on fast food sector in London is rising steadily from rose during the end of the year 2008, followed by the recovery of UKs economy from recession. The increasing number of new outlets such as fast food restaurants, fancy restaurants and gourmet bakeries around UK has been showing a significant growth in this sector. Food spending is high as a percentage proportion of total consumer expenditures in UK At the weekends there is a much broader appeal as a large number of customers go to the outlets and malls at a very broader perspective. At the weekend there is saturation of the activities. Market consists of: Age   Youngsters who are single and currently enrolled in college and high school. Family units   Young families along with children. Gender   Both the sexes will be targeted for the purposes of generating sales.. People from medium income and individuals and other lower medium income bracket people will be more likely to visit us. As per a survey conducted of young people aged 15 45 years, 80% of those interviewed like fast food. 90% of them like fast food on a regular basis, and 10% of them claimed that they like fast food very much, or love fast food. The following reasons were also provided by the survey for purpose of positioning and increasing popularity of fast food: Usually people have 12 months with 52 weekends and there will be three long holidays a year. Most of UK people love to shopping in high streets and malls, and when they do strolling around the shopping centers, they require a quick bite to accommodate their activities. Parents give more money to kids and students to buy lunch. Fast food is naturally their first choice, because of the brand building effort that heavily targets their age group. White-collar workers in offices have stopped bring lunch, and enjoy chicken, hamburger, pizza or other fast food joints in the vicinity. People in UK do not perceive fast food is a luxury,  and they enjoy it by bringing their family, particularly if they have small kids. 2.10.1. SEGMENTATION OF MARKET: Our target market segment is the younger generation as our primary market. Due to high extra-curricular activities among UKs youth, it is common for the youth to have lunch inside shopping malls, and not at home. The secondary market that we have chosen is the Working class. There are various major shopping malls across London,  including  Westfields, Bretncross etc which are the biggest shopping mall in the nation, employing more than 50,000 workers. LFC is the alternative for a quick bite while shopping the fancy boutiques in the area and is also a delicious attraction for tourists. 2.10.2. NEEDS OF THE MARKET: LFC sees out target markets as having a broad range of needs.  A recent analysis of consumer trends by Euromonitor has identified the below needs among our target markets. Our core group: Looking for speed in services Likes to have variety and flavors in the foods, preferably something fried Insists upon a friendly, clean, and attractive environment Wants an entertaining and fun experience Adopts a global lifestyle Comes from various ethnic backgrounds Enjoys eating out Is computer literate Has an active lifestyle There is large potential and growing market needs that can be served by LFC despite of the fact that there are so many competitors in the market. Yet London Fried Chicken feels that its great taste and unique services and offers will be able to attract more and more clients. 2.10.3. COMPETITORS IN THE MAIN AREA: Our main competitors in this fast food restaurant segment are the food outlets within the 2 miles radius along the Oxford Street. In our location, there is Pret-a-manger, pizza hut, KFC, Subway, and others. Therefore the following are the main competitors of LFC: Pret-a-manger Pizza hut KFC Subway McDonalds These are the brands of international fame and it can only be possible to attract clients by making oneself more competitive and tasteful in compared to the above. 2.10.4. STRATEGY FOR SALES: The sales strategy is building and opening new locations at different outlets in order for increase the revenue. However, this plan will be put into execution and implementation when the one market tester outlet at first showed potential growth. As each individual location will continue building its local client bases over a benchmark period of say first three years of operation, the goal of each store is  Ã‚ £109,460 in annual sales, with the original flagship store expected to earn almost  £225,000 per annum. 2.10.5. FORECAST OF SALES We anticipate the highest peak on the months of July and August in our volume of sales forecasted, due to the summer seasons and than in November and December season due to Christmas holidays. Millions  of people from the EU countries visit Britain each year, mostly for shopping purpose and dining. Then there are also tourists anticipated from Asian countries as well, this explains the jumped of sales in these last two months of the year. (all sums in below graph are estimated numbers in  £) 2.10.6. MILESTONES: During the initial phase of company being set up, the 4 founders (Tim, Joseph, Carol, and Amanda) will conduct planning and implementation in constructing the brand name and image and the making of LFCs first outlet. The planning and construction will take approximately 8 to 9 months. This is in addition to the process of refinement and revision which will take the remaining of the 12 month period before our opening in middle of the year 2010. 2.11. FINANCIAL PLAN: The company is now privately owned by Tim, Joseph, Carol, and Amanda. Future shares will be offered after two consecutive years of operating in UK. 2.11.1. START-UP FUNDING: Currently, company is being owned its four original founders, who each will contribute  £220,000 for the same amount of share, 25%. This will be the amount which is more than the amount required to cover start-up requirements, and provide the business with a cash margin so that it can use for expansion over the first three years. (all figures below are imaginary and assumed numbers. Funding at startup Fund for expenses at Start-up  £71,700 Funds for Start-up Assets  £51,300 Total amount of funds required  £120,900 Assets Non cash Assets at the Start-up  £41,500 Start-up Cash Requirements  £68,500 Additional amount of Cash Raised  £698,300 Cash Balance at the Starting Date  £810,400 Total Assets  £861,200 Liabilities and Capital Liabilities Current amount of Borrowing  £0 Long term Liabilities  £0 Accounts Payable (Bills Outstanding)  £0 Other Current Liabilities (interest-free)  £0 Total Liabilities  £0 Capital Planned Investment Tim  £220,000 Joseph  £220,000 Carol  £220,000 Amanda  £220,000 Requirement for Additional Investment  £0 Planned Investment total  £880,000 Start-up loss (Start-up Expenses) ( £69,600) Total Capital  £810,400 Total Capital and Liabilities  £810,400 Total Funding  £880,000 2.11.1. BREAK-EVEN ANALYSIS: The breakeven analysis performed by us show that we need unit sales over 9,700 per month to break even. It is not expected to make a profit upto the year three. Break-even Analysis Monthly Units to Break-even 9,706 Monthly Revenue for Break-even  £32,104 Data Assumptions: Per-Unit Average Revenue  £3.31 Per-Unit Average Variable Cost  £0.73 Monthly Fixed Cost Estimated  £24,979 2.11.3. PROJECTED PROFIT AND LOSS: The below is the projected Profit and Loss account which shows LFC will run at a loss for the initial two years, using up some of the cash reserves initially invested by the founders. As sales will rise, LFC can expand into new locations to aggressively spread the recognition of brand. This increase in visibility will allow us to take up less expensive locations off of Oxford Street, while maintaining our flagship operation, the first store, in a  prime spot. Pro Forma Profit and Loss Year 1 Year 2 Year 3 Sales  £289,173  £659,328  £1,127,654 Direct Cost of Sales  £62,956  £134,916  £258,837 Other Costs of Sales  £0  £0  £0 Total Cost of Sales  £62,956  £134,916  £258,837 Gross Margin  £226,217  £524,412  £868,817 Gross Margin % 78.23% 79.54% 77.05% Expenses Payroll  £88,200  £262,000  £449,600 Marketing/Promotion  £10,000  £10,010  £10,020 Depreciation  £0  £0  £0 Rent  £174,010  £248,010  £298,020 Utilities  £2,550  £5,000  £8,000 New location setup  £25,010  £50,010  £50,020 Total Operating Expenses  £299,770  £575,030  £815,680 Profit Before Interest and Taxes ( £82,523) ( £140,557)  £53,146 EBITDA ( £82,523) ( £140,557)  £53,146 Interest Expense  £0  £0  £0 Taxes Incurred  £0  £0  £0 Net Profit ( £82,523) ( £140,587)  £53,226 Net Profit/Sales -29.57% -25.18% 4.77% 2.11.4. PROJECTED CASH FLOW The following is the table that shows a Projection of the Cash Flow for LFC: Pro Forma Cash Flow Year 1 Year 2 Year 3 Cash Received Cash from Operations Cash Sales  £279,163  £558,327  £1,116,654 Subtotal Cash from Operations  £279,163  £558,327  £1,116,654 Additional Cash Received Sales Tax, VAT, HST/GST Received  £0  £0  £0 New Current Borrowing  £0  £0  £0 New Other Liabilities (interest-free)  £0  £0  £0 New Long-term Liabilities  £0  £0  £0 Sales of Other Current Assets  £0  £0  £0 Sales of Long-term Assets  £0  £0  £0 New Investment Received  £0  £0  £0 Subtotal Cash Received  £279,163  £558,327  £1,116,654 Expenditures Year 1 Year 2 Year 3 Operating Expenditures Spending in Cash  £88,200  £262,000  £449,600 Payments of Bills  £244,265  £430,245  £599,286 Subtotal Spent on Operations  £332,465  £692,245  £1,048,886 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out  £0  £0  £0 Principal Repayment of Current Borrowing  £0  £0  £0 Other Liabilities Principal Repayment  £0  £0  £0 Long-term Liabilities Principal Repayment  £0  £0  £0 Purchase Other Current Assets  £0  £0  £0 Purchase Long-term Assets  £0  £0  £0 Dividends  £0  £0  £0 Subtotal Cash Spent  £332,465  £692,245  £1,048,886 Net Cash Flow ( £53,301) ( £133,918)  £67,767 Cash Balance  £677,899  £543,981  £611,748 3. CONCLUSION: As discussed in detail above, a business plan is a comprehensive document which requires a lot of efforts to be undertaken for its preparation. The above chart and table in particular the PL and the cash flow clearly shows that the company can turn into profitability in the year three as compared to the initial two years. Also there are positive cash flows of the business. This shows that the business is viable and can be undertaken on a genuine basis.