Entrepreneurship Course - Business Plan - Tiffins 'R' Us

Pulkit Bhatnagar [email protected] Entrepreneurship & Small Business Mgmt

Entrepreneurship & Small Business Management

Business Plan Presentation

Tiffins ‘R’ UsPulkit Bhatnagar

[email protected]

404.403.2980

This presentation is prepared towards partial fulfilment of the course: GM560 – Entrepreneurship & Small Business Management being instructed by Dr. Aaron Brody for the July 2009 session at the Gwinnett campus of Keller Graduate School, DeVry University. The logo for Keller is reproduced here as a student and not an endorsement by the School. The views expressed in this report are solely of the author and without any intention of infringement or harm. Images have been sourced through Google and sources can be included if pointed out. Copyright © 2009 Pulkit Bhatnagar as author for this report.

Dr. Aaron BrodyGM 560

August 17, 2009


An Indian Business in an American Setting.

The ‘Tiffin’ Concept

Snapshot of the Business Idea

Significance of the Website

Tiffins ‘R’ Us – Business Plan

Identification of Gap

Vision, Business Model, Long Term Direction

Target Market

Marketing Mix

SWOT

Financials

AgendaAgenda


An Indian Business in

an American Setting…


In India, tiffin refers to a packed meal prepared for working Indian men by their wives to be eaten at work, or for school children by their mothers.

Professional Tiffin systems are quite popular in India. In fact, one of the world’s experts in Supply Chain and Logistics is the “Mumbai dabbawala system).

5000 employees deliver over 200,000 tiffins every day using green/local transportation.

Error rate: 1 in 16 mil. (6 Sigma certified)

Service at < $ 10 per month.

Featured by CNN, BBC, Forbes, Economist, NY Times, and many business schools.

Mumbai Dabbawala video

In India, tiffin refers to a packed meal prepared for working Indian men by their wives to be eaten at work, or for school children by their mothers.

Professional Tiffin systems are quite popular in India. In fact, one of the world’s experts in Supply Chain and Logistics is the “Mumbai dabbawala system”.

5000 employees deliver over 200,000 tiffins every day using green/local transportation.

Error rate: 1 in a mil. (6 Sigma certified)

Service at < $ 10 per month.

Featured by CNN, BBC, Forbes, Economist, NY Times, and many business schools.

Mumbai Dabbawala video

The ‘Tiffin’ ConceptThe ‘Tiffin’ Concept


A Simplified SnapshotA Simplified Snapshot

Business Idea

User Browses Website & Places

Order

Selected Vendor

Prepares Order

Hands Over to

Delivery

Home Delivery

User has Meal and

Rates the

Vendor

Input Mechanism:

Website – Orders; Payments; Feedback

Delivery Mechanism:

Vans / Cars – Food; Promotional Material

Food Delivery to pay for ALL Expenses.

Additional Revenue Streams add to bottomline directly.

(Alternative Advertising/Promotion Media with direct access to consumer)


Selected Restaurant

Pricing

Details

Checkout/Payment Options

Other things of Interest

Rate the Supplier

Advertising

Significance of the WebsiteSignificance of the Website

What should I order?

Let me log-on to Tiffins R Us where I can order according

to my preference.

Tiffins R Us Returning / New Customers

Food / Ongoing Schemes

Featured/ Sponsored RestaurantsRest’nt 1

Rest’nt 2Rest’nt 3Vendor 4Vendor 5 Provide

Feedback / Rate a Supplier

Advertising

Advertising

Tiffins R Us Returning / New Customers

Food / Ongoing Schemes

Featured/ Sponsored RestaurantsRest’nt 1

Rest’nt 2Rest’nt 3Vendor 4Vendor 5 Provide

Feedback / Rate a Supplier

Advertising

Advertising

Customer-end


Tiffins ‘R’ Us –

The Actual Business Plan


Identification of GapIdentification of Gap

South Asians:Around 200,000 Indians, Pakistanis, Bangladeshis,

Nepalese, and Sri Lankans in Atlanta.

Students and Working professionals on 1 – 3 projects.

Hotspots: Alpharetta, Decatur and Lilburn / Gwinnett, Dekalb, Fulton

Food / Meals: Spend $ 7 - $ 15 per meal; eat-outs 8-10 times a week.

Remaining meals are cooked at home or skipped.

Don’t mind paying a small premium (~ $ 9-10 overall) if food is

delivered.

Restaurants: Family-owned units; Generally operate with decent profits.

Not interested in starting own deliveries but interested in partnering.


Vision, Business ModelVision, Business Model

Vision:

To allow access to food according to your taste buds.

Business Model:

Select a target region with high density of South Asians; partner with

local Indian restaurants/chefs & offer home delivery services; allow users

to create their profiles on a Web 2.0 interface and place their orders

(longer duration get better discounts); have 3-4 vans for delivery per

region.

Long Term Direction:

To establish a chain of delivery mechanisms in countries other than

South Asia (like USA, UK, Canada, Australia), which have a large

population of South Asian students and professionals. To be the next

‘localized’ Amazon.com specifically for food delivery services.


Target MarketTarget Market

Details:

~ 1500 South Asians.

20 sq. miles Area.

Four Indian restaurants.

Zero with Home Delivery.

Nearest to Emory: 3 mi

Nearest to GT: 3.5 mi

Strong Local Competition

Good MARTA connectivity

Parking issue in Mid-town

18 Indian restaurants in 50 sq. miles coverage.


Marketing MixMarketing Mix

Place / Distribution:

20 sq. miles between GT, Midtown, Emory, North Druid

Expansion in year 2 to Alpharetta.

Distribution: Customer to order, pre-pay via Website.

Distribution: Supplier free to source own RM.

Distribution: Day-routes to be decided each morning.

Delivery of order by venture. Driver will be venture employee and vehicle will be venture asset.

Prepaid transactions – hence no money transfer issues

Promotion:

No expensive campaigns.

Flyers distribution; College Bulletin Boards placement.

Marketing Collateral like T-Shirts and Bumper stickers.

M-1 soft launch with 8-10 known contacts: Free Meals in return for Buzz Marketing.

M0 launch scheme: Long Term Committers discount.

Referrals scheme – discounts for people introducing their friends.

Product:

Delivery Mechanism from Kitchen of Supplier to Doorstep of Customer.

Interactive Web 2.0 website.

Advertising opportunities on the Website and through in-tiffin promotional catalogs.

Price:

Cost + Flat Margin component model; Pre-paid system

Amount billed per order + 40% of billed amount

40% based on estimates to cover delivery costs and required margins

Discounts to be offered for Higher-priced orders or longer-duration orders

Avg Est: Cost: $ 7 per meal. Price: $ 9 per meal.

Advertising Pricing still to be worked out but expected to grow from $400 in Month 1 to $ 1500 by Month 6.


Threats:

Low entry barriers.

Restaurants can begin own delivery service.

People can start to cook for themselves.

Pre-packaged and Existing Options Available

Unforeseen legal & regulatory issues.

Unforeseen financial expenses; since external funding not sought.

Atlanta may not remain a preferred study/work location.

Weaknesses:

Lack of experience (regulatory, marketing, logistics, design).

Assumption that social relationships will translate into business relationships.

SWOTSWOT

Opportunities:

Un-served South Asian population (incl. cooking-averse target segment).

Inexpensive media (similar target mkt).

Opportunity to start small, make mistakes, learn and correct to have a better business model while scaling up.

Additional revenue generating opportunities (like the website, mobile delivery vans, in-tiffin promotional catalogs).

Bootstrap financing and viral marketing opportunities.

Strengths:

Low start-up costs; financial independence.

Strong relationships with incumbent restaurant owners.

Easy access to student population of G. Tech & Emory (Essential to establish a regular following/customer base).

Openness to learn from others advice and experiences.

Passion to have own venture and succeed in it.

Ability to be practical to limit losses.


Pre-Launch FinancialsPre-Launch Financialsall figures in USD, unless indicated

Avbl Price Maximum Expected Optimistic Remarks

Delivery Mechanism

* Car 14,695 16,000 12,000 9,000 Ford Focus 2008

* Scooter 2,000 2,500 1,800 1,200 JCL-MP250A

Financed through Bank of America SBA Financing Options at 10% (http://www.bankofamerica.com/small_business/business_financing/index.cfm?template=sba_financing)

Website

Domain Name Registration 1,000 1,000 400 100 Free Resources available

Website Construction 6,000 6,000 4,500 1,000 For Security, partner with Paypal & Google Finance

Done through friends in India; local Student friends; Software experts

Necessary Expenses

Legal Fees 5,000 5,000 5,000 3,000 Terms of Use for website, other legalities

* Insurance (GEICO) 500 500 400 300 Vehicles, Website, Life, Business, Liability

Marketing Expenses

Collateral Development 1,000 1,000 700 400 Flyers/Explanatory Docs for Vendors, Investors

Travel and Meeting 1,000 1,500 1,200 700 Gas, MARTA ($50 p.m. card), Meals

Laptop / Mobile 900 1,000 850 650 Laptop: 550; Mobile: 100

Financed through Bank of America SBA Financing Options at 10% (http://www.bankofamerica.com/small_business/business_financing/index.cfm?template=sba_financing)

TOTAL 32,095 34,500 26,850 16,350

Initial Investment Required $ 16,000 - $ 35,000

Depending on Finance Availability, initial investment can be channeled as per priority/requirement

To recover $ 35,000 at $ 2 per meal margin and 350 days per work year, indicates 50 deliveries per day.

That is not viable for one person to handle; hence at least one more employee is required.

Therefore * - additional Car will be purchased on achieving required volumes.


Year 1: Month-wise P&LYear 1: Month-wise P&L


Projected Income StatementProjected Income Statement

2010: Atlanta, 1 region

2011: Atlanta, 2 regions

2012: Atlanta, 2 regions

Seattle, 1 regionORSan Fran, 1 regionORHouston, 1 region

all financials in USD

2009 2010 2011 2012

Revenues

Operations - 413,145 826,290 1,239,435

Advertising - 15,800 23,700 31,600

Revenue generated - 428,945 849,990 1,271,035

Expenses

Operations - 321,335 610,537 899,738

Expenses incurred - 321,335 610,537 899,738

Gross Profit - 107,610 239,454 371,297

Insurance Premiums 400 8,800 18,480 30,800

Marketing Expenses 2,000 5,050 9,595 17,675

Salaries & Wages 2,480 46,720 116,800 163,520

Communication Expenses 200 2,400 4,800 8,400

Maintenance Expenses - 1,200 1,800 4,200

Unaccounted / Misc. Exps. 5,000 6,200 9,300 18,600

Depreciation Expenses 400 8,400 16,800 25,200

Total of 'Other Expenses' 10,480 78,770 177,575 268,395

Operating Profit 10,480- 28,840 61,879 102,902

Interest Expenses 250 3,000 6,000 12,000

Profit Before Tax 10,730- 25,840 55,879 90,902

Tax Expenses - 9,280 16,764 27,271

Profit After Tax 10,730- 16,560 39,115 63,631


Projected Balance SheetProjected Balance Sheetall financials in USD

2009 2010 2011 2012

Current Assets

Cash 4,920 26,197 80,379 168,333

Accounts Receivable - 4,289 8,500 12,710

Prepaid Expenses - 2,145 4,250 6,355

Total Current Assets 4,920 32,631 93,129 187,399

Fixed Assets

Cars and Scooters 14,000 27,700 48,200 59,400

less Accumulated Depreciation 300 7,500 16,800 25,200

Laptop / Mobile 1,000 900 - -

less Accumulated Depreciation 100 900 - -

Total Fixed Assets 14,600 20,200 31,400 34,200

Total Assets 19,520 52,831 124,529 221,599

Current Liabilities

Accounts Payable - - 4,250 6,355

Accrued Wages / Salaries Payable - - - -

Current Portion of Long Term Loan - 5,000 7,000 11,000

Accrued Interest Payable 250 3,000 6,000 12,000

Total Current Liabilities 250 8,000 17,250 29,355

Long Term Liabilities

Bank loan from BofA / SBA - Cars/Scooter 14,000 25,667 51,667 75,667

Bank loan from BofA / SBA - Other Exps 16,000 13,333 10,667 8,000

Total Long Term Liabilities 30,000 39,000 62,333 83,667

Total Liabilities 30,250 47,000 79,583 113,022

Owner's Equity - 10,730- 5,830 44,945

Add: Retained Earnings 10,730- 16,560 39,115 63,631

Total Owner's Equity 10,730- 5,830 44,945 108,577

Total Liabilities and Owner's Equity 19,520 52,830 124,529 221,599

LOAN REPAYMENT SCHEDULE

Loan TakenAmount 2010 2011 2012 2013

2009 14,000 2,333 2,333 2,333 2,333

2010 14,000 2,000 2,000 2,000

2011 28,000 4,000 4,000

2012 28,000 4,000

2009 16,000 2,667 2,667 2,667 2,667

2014 2015 2016 2017 2018 2019

2,333 2,333

2,000 2,000 2,000 2,000

4,000 4,000 4,000 4,000 4,000

4,000 4,000 4,000 4,000 4,000 4,000

2,667 2,667


Sources: Indian Trade/Business Associations in AtlantaRestaurant OwnersGoogleAmazonWikipediaYoutubewww.Mydabbawala.org

Thank You

Entrepreneurship Course - Business Plan - Tiffins 'R' Us

Business

mumbai dabbawala

mumbai dabbawala

tiffin promotional

professional

bofa sba

working indian

small business

packed meal