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Tuck-In will bring healthy ethnic frozen food to the young, fast living city students' door steps. Terra Tuck-in is scheduled to begin operations on September 20th 2010. Tuck-in will be a partnership, owned and operated by a group of graduate city university students; Shariq Pervaiz, Nadia Mohamed, Omer Qureshi, Faduma Karshe, Tiwalade Odulawa and Pawel Prochot.
The owners of this company specialize in different areas of business which will make this venture a very exciting yet profitable business. The graduates have all got experience in different fields of the business.
Location, offices headquarters, branches.
Tuck-in will be located at: Tower Bridge Business Complex, 100 Clements Road, London, SE16 4DG
The office space/light industrial space is leased and will accommodate the necessary office equipment such as computers, fax machine, photo copier and fridge/ freezers. There is a copy of the information in Appendix C.
Definition of the business
The Product/Service that ‘Tuck-In' offers is a delivery service of frozen food from a variety of different world cuisines. The function of this new business venture would be to provide students who live away from home, food that is healthy, tasty and easy to cook. The idea is that students can enjoy food from different parts of the world in the easiest way possible. There is and always will be a market need for good quality frozen food and ‘Tuck-In' would provide a service that would meet this market need by taking the idea of frozen food to the next level.
‘Tuck-In' would make students more aware of the benefits of frozen food, it would reduce wastage. What makes ‘Tuck-in' so unique is the quality and convenience of this food. It offers a delivery service to your front door with an online ordering and payment system, it will have never been made easier to order from ‘Tuck-In. Customers will want to buy products from ‘Tuck-In' as it is different from your everyday frozen meal from the supermarket. It is more affordable, with the meal packages offered, it is good quality. The food offered helps with portion control and reduces wastage.
Tuck-In was created on the 11th of November 2009 by Shariq Pervaiz, Nadia Mohamed, Omer Qureshi and Faduma Karshe in London, UK. The name “Tuck-in” was suggested by Shariq Pervaiz during a team meeting, and that suggestion stuck in everyone's minds. Thus Tuck-in was then the name of the company that would change the lives of hundreds of students who live in student accommodations.
Tuck-in was made official by the submission of the company contract; we invested in 2 further bodies, Tiwalde Odulawa and Pawel Prochot. Both bodies' strengthened the company and brought vast experience to the company.
- To provide high quality healthy food
- To maintain a healthy, respectful, challenging and rewarding environment for employees
- To cultivate sound relationships with other organisations an individuals who are like minded.
- To cultivate adaptability to change in economic, social and environmental conditions, to allow Tuck-in the opportunity to survive long term.
The primary objectives of Tuck-in over the next year are to:
- Obtain commercial financing of £30,000 to cover start up costs and initial operating expenses;
- Generate one new client contract a month by networking with key industry leaders, conducting seminars and workshops, and joining key environmental agencies;
- Generate a net profit of £100,000 in the first year of operations by developing a strong client base and keeping overhead costs to a minimum;
Over the next 3-5 years we plan to grow our business by having other outlets aside City University hall residences. To achieve this, we aim to:
- Introduce our food services to other university hall residences around the area. So doing we hope to introduce new products.
- Also we aspire to increase our target market, i.e. to reach out to working-class people. As part of our growth plan we hope to have our proposed hot vending machines of food in different offices and workplaces in the City. They can easily get food from this machine at the end of the day after work.
- Furthermore we aim to get our services to be delivered to small local grocery stores around the area.
Tuck-ins' mission statement is to:
The Tuck-in Promise: “Tuck-in exists to benefit and refresh every student who lives at halls of residence whilst at university. The basic proposition of our business is simple; we have a passion to serve the highest quality ready to cook frozen foods and make sure that every customer who shops with Tuck-in leaves happy. We are committed to using the finest ingredients in our recipes and no food leaves our kitchen that we ourselves would not eat.
That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business
Product and Service description
Tuck-In will sells delicious, high quality, nutritious frozen readymade meals from around the world to students who live away from home, complying with the health regulation. We will offer unique cuisine with international flair, offering frozen meals from Italy, Mediterranean, Asia, Europe and Africa, responding to the needs of students.
Students are usually too busy or lack the skills to cook. Tuck-In will provide those students with a healthy, easy to cook meals that taste home-made and is ready in few minutes.
As we are located in City University we can take advantage of the diverse students who are living in halls. We hope that this will help us in gaining an additional advantage over our competitors and help us provide greater customer satisfaction. It will also make it easier for students to pickup their meals when they are going home or for us to deliver the meals within a few minutes.
The key benefits that can be obtained from using our service are:
- Less money on groceries and eating out
- Healthy home-made style meals
- Meals will take less than 15 minutes to prepare
- No washing dishes, everything is in disposable containers
- Provide international food
We will be offering lunch and dinner that will include a frozen meal with a choice of drinks to choose from.
Please Refer to Appendix A for the menu.
The ready-made meals and drinks will be purchased by marketing manager at supreme food catering.
There will be one staff that will make sure the meals are of high quality and are packed correctly. The marketing manager will be overlooking and make sure that everything is in order.
Our primary method of ordering meals will be via our website but we can also be contacted by phone.
The company website is built and maintained by ‘Toucher' an established web design company. The website will include a full menu, information about the company and an online ordering service.
Tuck-in's target market can be generally described as a group of students living away from home, mainly in halls of residence. Those students share following characteristics which influence their consumer behaviour:
- They often have or decide to spend little time preparing food (28 out of 40 subjects asked)
- Form of the food is a secondary factor - fresh, chilled or frozen (26 out of 40 subjects asked)
- Have culturally driven food habits - ethnic food (32 out of 40 subjects)
- Currently eat frozen/chilled ready meals once or more times a week (27 out of 40 subjects)
- Order food for delivery more than once a week (26 out of 40 subjects)
- Eat out/order delivery of ethnic food more than once a week (27 out of 40 subjects)
- Would consider purchasing reasonably priced ethnic frozen food delivered to halls of residence more than once a week (28 out of 40 subjects)
The anonymous survey was conducted by the Peartree Court hall of residence between 7th and 11th of December.
Please Refer to Appendix B for the survey template.
The target market is much localized as show below
“A” indicates the main University building. Other indicators represent Walter Sickert Hall(Liberty Hall 142), Francis Rowley Court(220), Finsbury & Heyworth(320) and Willen House (157) total of 839 bedrooms in student accommodation.
The above also shows that within the radius of between 400 to 1200 meters (depending of the Tuck-in location) there are 839 student rooms. It also indicates a potential competition density of just under 30 takeaways per square kilometre.
As indicated on the map above there is around 30 small takeaways in the immediate area. Also there are 3 supermarkets and tens of small off-license shops. It is important to note that the university building offers a catering service to the students. The main factor that sets Tuck-In apart from the local takeaways and university catering is that Tuck-in food can be prepared in no time at student's convenience and this in combination with right price will give Tuck-in an edge.
Market Growth and Forecast
The market growth is currently seen as increase in range of Tuck-In for new halls of residence. The prospective growth is expected to strongly depend on the future halls of residence targeted but short term (1 year) growth will oscillate in the area of 25%-50% increase in the size of the target market (range increase).
Target market is segmented to students:
- at the university
- in restaurants
- ready meals - chilled and frozen
- cooked meals
The segments that Tuck-In will be focusing on are students eating in - takeaways, ready meals chilled and frozen, and cooked meals.
Good ethnic food
Always fresh food
Small & dynamic
Close to the client
Premises can be located virtually anywhere in the area (no kitchen etc.)
Summer holidays break
Home delivery usually costly or high order minimums
Changing customer tastes
Increasing popularity of home-delivery of supermarkets
Feasible marketing channels consist of Student union leaflets, halls of residence leaflets, presence at student events, and simple internet presence with SEOd for high ranked localised internet searches.
Strategy and implementation summary
The strategy we have implemented is quite straight-forward, the success of Tuck-In' is based on a cuisine service providing authentic ready to cook meals for students living in university accommodation. This is combining healthy foods in a student area environment (halls) and these foods appeal to a wide range of ethnic groups.
We aim to launch our business in a unique and obvious way to ensure that our target (the students living in halls) can actually notice us and be aware of the service we have to offer and how they can benefit from it. Our promotion strategy is to have a grand opening in the beginning of a new academic session. During this opening, we aim to give out trial foods, so as to go try our ready-to cook meals and see what it is all about. In order to succeed we will have to make sure that the food is at its best as the saying goes: first impression lasts longer. We would like to give an impression of a catering service that provides healthy ready-to cook frozen food as well as it been very tasty. We will have to keep our standards high and execute the launch, as the students testimony of our food services will be our main marketing strategy at the start.
Pricing strategy: we don't aim to be cheap, but we aim to be cheaper than most alternatives the students might have however the quality and nutritional values will be far greater than our competitors.
Marketing strategy is the most important in every business, to achieve this we aim to emphasize on the products we have to offer, and build some sort of a relationship business with our target market.
As stated in our growth plan, we aim to increase our target market to working-class people, doing this the price of our food is going to be to some extent higher than what we offer to students, because they work and can afford good quality food at the price that is worth it.
Tuck-in's competitive edge
- Having an understanding of how to launch the business
- Provide a diverse ethnic ready-to cook frozen food for students. So they do not miss home too much.
- Focus on target market
- Training of employees
- An area to keep the refrigerators and freezers purposely to preserve our food is in place.
We do not have direct competitors, but our circuitous competitors will be supermarkets and take away restaurants e.g. Sainsbury's or the local chicken and chips. The edge we have over them is the fact that we are situated very close to the halls and we offer these healthy yet tasty foods at a cheaper price. This is because they are our only target market at the moment therefore our service is solely tailored for them so is the price. While our competitors have a wide range of target market to cater for so been a student you do not have a chance to pay less, the price is general.
“Tuck-In” from our managerial courses does have a great understanding of what it means to have an excellent management team for this business. How well we do is solely depends on our staff. Tuck-In is a small business and the creative idea is from us, because it is a new business it involves a basic managerial and organisational structure. However, there is a hierarchy, but before a decision is made we all have to meet and discuss about the situation and make the decision together.
We might have to hire a more experienced general manager as part of our growth plan to help Tuck-In to grow further.
- Operational service of the business will be performed by Shariq Pervaiz and Nadia Mohamed, as hands on manager and assistant.
- Floor/store manager - Omer Qureshi
- Finance/accounting manager - Tiwalade Odulawa
- Marketing manager - Faduma Karshe
- Service manager - Pawel Prochot
This financial projection of approximately £30,000 investment, represents to the best of management's belief, the expected results of operations and cash flow for the projection period would commence on or about 01/09/2010. The assumptions disclosed are those that management believes are significant to the projection. There will usually be differences between projected and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material.
The Company's revenues will be derived from sales of units. The Company will recognize initial fees such an insurance, premises and stock holding.
Cost of Product. Cost of product consists primarily of the costs of royalties paid to third-party suppliers, materials, personnel-related costs, admin costs and insurance.
Cost of Service . Cost of service consists primarily of personnel-related costs incurred in providing telephone support, consulting to customers. The primary component of the cost of sales is labor. Skilled, professional personnel used directly in the company's operations are expected to maintain the company website.
Property and Equipment. Property and equipment are to include costs of the premises, insurance, equipment and stock.
Selling and Marketing Expenses.The principal types of expenses within this category are salaries, and professional services. Salaries are projected on an individual-by-individual basis, using expected salary rates throughout the projection period.
Research and Development Costs.The principal types of expenses within this category are salaries, rent, telephone, travel, supplies, and professional services. Generally, management expects to charge research and development expenditures internally.
General and Administrative Expenses.The principal types of expenses within this category are salaries, facilities and occupancy, travel, professional services, and insurance. Salaries are projected on an individual-by-individual basis, using expected salary rates throughout the projection period.
Bank Credit Facility The company's management intends to borrow £15,000 from a bank loan using owned property and security as the company grows, this amount is expected to increase. The amount will be borrowed on a two year repayment plan.
Interest expense. Interest expense on borrowings is calculated at the fixed rate of 7.5%.This rate has been set by the bank itself.
- Bank Loan - having obtained a bank loan of £15,000 to be paid back over a period of two years with an interest of 7.5%. Payments of £695.30 being made every month.
- Rent of premises - £1078, insurance £315 pa, security retainer £3000, admin fees £150, service charge £500pa, bills £3,000, Business rates £1680.
- Furniture and computer equipment £3000
- Freezers £6784
- With an investment already confirmed of £9,000 and a personal investment of £6000 we aim to start up with £30,000 including the bank loan.
- Each unit of food we buy, we aim to have a mark up of 50% after costs.
- Website costing £350 to set up and maintain.
- As a team of 6, 3 of us are still in part time work and 3 of us are working completely in the business taking a small wage (enough to live on) to ensure we have as much money in the business as possible.
- Stock in the amount of 5000 units at 80p a unit = £4000
Altogether are total cost as stated above in the first month of business = £18,819.46
A lot of the start up costs are one of cost and the running cost every month after the first should decrease by ay least £4,000.
To achieve our financial objectives, Tuck-In seek medium-term commercial loan. This external funding will be used to cover the initial investment costs Based on the strategic objectives, we target the following financial goals:
- Steady increase of annual sales
- Keep the gross margin on sales 50%
- No debt leverage by year 2
Here, our aim is to maximize the value we can obtain from selling the business to potential investors. After complex business assessment, we embark on the following major selling points: strong brand, solid customer base, cash-rich business, and no leverage.
As an exit strategy, we agreed to approach the following possibility:
Partial business divestment (selling 50% of the business).
Partial divestment: As customers are the heart of our business, the values as well as the number of customer relationships are essential to our business. The customer-focused approach of our business is consistent with our differentiation strategy and represents a strong negotiation point by the means of true sell. We aim to attract a venture capitalist to enter the business in order to expand capacity and market share, as well as to boost financial performance.