Lazeez Foods

Business Plan

Team: Paresh Masade Student 2nd year, PGDIE, NITIE, Mumbai Executive Director, COHERENDZ M: +91 9833634893 E: masade@coherendz.com Chandrasekhar K Manager, Business Operations, COHERENDZ M: +91 9000900959 E: chandu@coherendz.com

Table of Contents
Business Overview ................................................................................................................................. 3 Business Concept ................................................................................................................................... 4 Customers Analysis ................................................................................................................................ 5 Market Analysis...................................................................................................................................... 7 Market Potential and Addressable Market ....................................................................................... 7 Market Scenario ................................................................................................................................. 7 Business System Description ................................................................................................................. 8 System Description and Supply Chain Deployment........................................................................... 8 Marketing Plan ................................................................................................................................... 8 Expansion Plan ................................................................................................................................... 9 Manpower Planning ......................................................................................................................... 10 Financial Details ................................................................................................................................... 10 Capital Requirements....................................................................................................................... 10 Operational Costs............................................................................................................................. 11 Projected Revenues ......................................................................................................................... 11 Investments...................................................................................................................................... 12 The Team Composition ........................................................................................................................ 13

BUSINESS OVERVIEW
Lazeez is a branded mobile eatery chain serving quick food. Quick food is what we define as food that is quick to serve for fast moving crowd. Fast moving crowd consist of the typical students and working professionals, who stay away from home or find it difficult to cook food at home. Lazeez will be setting up mobile eateries across a city (starting in Hyderabad); each eatery would sell the food items in a single product category. Basic ingredients and semi finished products will be made at the centralized kitchen and supplied to each of the eateries spread across the city. Though the final product is to be made at the outlet, the target would be to reduce the conversion process at the outlet. Selling proposition for the entire business would be quality and hygiene. The Business in simple terms is to organize the quick food industry. The business would be built on the Micro Entrepreneur model, for which the vendors would be facilitated with micro credit. It would encourage the vendors to take up ownership. The planning and process of establishing business, with an initial capital of Rs. 3.5 Lakhs has already started and the first three outlets of the business would be on ground by Jan 1st week. Lazeez is also a social enterprise, which works closely with an NGO - BHUMI. The micro entrepreneurs (vendors running the cart) would be the beneficiaries of BHUMI.

BUSINESS CONCEPT
The idea is to serve the basic need of the fast moving crowd that typically consists of students and working professionals, who have their breakfast & food outside, as they find it difficult to cook food at home, mainly due to time constraint. Eventually they land up at push carts / small hotels serving food in unhygienic environment. Serving this pain point, Lazeez plans to provide quality and hygienic food. The Service is to offer food that is quick to serve on mobile eateries. A typical eatery would be a branded designer push cart with one of the categories of the product mix. A few specially designed tricycles have also been planned for ready to sell foods. The Initial product mix would start with Falafal, an Arabian delicacy, which has a great taste and is nutritious. This would make the brand name synonymous with the product. Udipi food (Idli and Dosa) would be added into the product mix after about one and half month of launch of Falafal. The product mix would diversify with lot of delicacies that are planned and being developed. This would make the brand Lazeez gain unique positioning. For all the products that are planned, the basic idea would be to serve their daily consumed food rather than offering great variety. These outlets would be stationed at specific locations, for specified period every day. These locations would be strategically identified based on density of fast moving crowd. The service in simple words is to organize the unorganized quick food sector in the country, and to set benchmarks by setting up standards in service quality, measured in terms of hygiene and taste. The value created by this business would be legalizing the quick food sector, all the road side vendors. Thereby creating a huge long term impact on society.

CUSTOMERS ANALYSIS
The target customers are the fast moving crowd, who find it difficult to cook food at home. The basic requirements of these customers are Food that can be served quickly, as they would not like to wait for long time. Food prepared in hygienic conditions. Quality food at reasonable prices. Should be available conveniently. Great Taste To support our assumptions, a market research was conducted by a team from IIPM, Hyderabad for Lazeez foods as their academic assignment. The objective was to study the consumer expectations and preferences towards outside food. A Questionnaire was administered to a sample of 200 students and working professionals of age group 17-35 years. Major findings are listed below (All the charts are shown in next page)
Udipi food came out to be the most favorite food followed by Biryani. Over Chinese, pizza and Chat. This means that the target market is more health conscious. 36% eat outside because they either cannot cook at home or do not find time. This constitutes the major portion of target market Lazeez aims to serve. Though about 85% said they prefer eating at home, a considerable 63% do not mind eating at road side vendors. About 57% people said they can pay a premium over the regular price if they get good food and 29% are not price sensitive. 81% people do not prefer outside food coz they do not find it either homely or find it non hygienic. Lazeez aims to break this dogma but serving quality and hygienic food.

*This research is still primitive and we are working to get a bigger sample across various age groups and professions.

MARKET ANALYSIS
Market Potential and Addressable Market
Market and demand for these outlets is obtained basing on the below analysis (The information was obtained by inquiring with 8 cart vendors). A typical cart vendor selling Idli and Dosa stationed 6-10AM in morning earns about Rs 2000 per day, and there are about 100 such outlets in Hyderabad. On an average cost for him is Rs 900 per day remaining Rs 1100 is the profit made by him on that day. (He pays his assistants, and some misc monthly expenses, and divided among two) So the size of market for single product line is about 2000*100*365 = Rs. 73,000,000 Including about 5-6 other such products in product mix, the addressable market is about Rs. 30 Crore in a single city. (More costly packed products like Biryani, curries etc that shall be added at later stage would add up the market cap) Thus the total market potential is about Rs. 30 Crore and we plan to capture 25% of it in next 3 years.

Market Scenario
The target market is completely unorganized and there exist No direct competitors at present, the entry of competitors at a later date is a distinct possibility. Every other business that serves the basic need of target market is a competitor. Few of them are other carts, mess or any small hotel that will provide hygienic food with and a place to sit. Advantage: Other than the hygiene factor, we have the first mover advantage, competitive advantage of quality assurance through branding, and the social enterprise aspect. Entry Barriers: Resistance from local vendors, police and municipality, need of permissions.

BUSINESS SYSTEM DESCRIPTION

System Description and Supply Chain Deployment
The business is driven by the concept of centralized purchase and distribution system. The base ingredients or semi finished product would be made in centralized kitchen and distributed to various outlets. The final Product would be made at the outlet and served. In case of take away food item like Biryani and Curries, completely packed food would be distributed to the outlet. One of the critical activities would be to setup a supply chain by lowering the logistic cost vis--vis the purchasing power. The initial test launch would be with 3 carts for first three months, to find out the real hindrances in process of establishing business, the critical aspects and the supply chain. Sensitivity drivers of revenue hygiene, brand value, quality, location, season and alternative products. Sensitivity drivers of cost purchasing power, logistic cost for distribution, cost of maintenance of hygiene (cleanliness, packaged drinking water etc.) A small premium above the price of local vendor would be charged for the service.

Marketing Plan
All the outlets would be branded as Lazeez Foods with the mascot shown in the first page. The Mascot would were traditional Andhra/Tamilian look for cart serving Udipi food and Arabian look for the Falafal outlets. We shall enter the market with a tasty Arabian delicacy, so that the brand can be associated with the product. Then Plan to use the brand recall to expand to other product categories. As of now, there is no budget allocated to promotions to media, being a social enterprise, promotion through opportunity media buying is being explored. The plan is to get a few interviews of the micro entrepreneurs in newspapers and television through BHUMI.

Expansion Plan
Initial 3 months would be spent in testing the market conditions and understanding the business hindrances. In next 6 months about 18 outlets would be setup, adding approximately at a pace of 3 a month. Still the product mix would be only Udipi and Falafal. Further 3 months would be spent to build up capacity of centralized kitchen and improvise the logistic setup. So we would have about 3-5 products and about 20-22 outlets in the first year of operation. Next 2 years would be spent in expansion of business around supplies from centralized kitchen based model.
o o o

More outlets with greater product mix. Taking up of contracts of canteens in MNCs and other offices. Larger outlets and mini restaurants in franchise/ micro-credit model

Manpower Planning
The business would be built on company owned infrastructure with micro-entrepreneur model. The term Micro Entrepreneur is what we coined, with a objective to build the personality outlet managers on entrepreneurial lines. This is mainly to promote the sense of ownership among them. All the Employees (on ground level) would be beneficiaries of BHUMI, which will take care of their overall development.

FINANCIAL DETAILS
Capital Requirements
Capital Requirements is as per the expansion plan of 25 outlets and a Centralized kitchen of capacity to serve 45 outlets at the end of first year. Cost per station Cost of setup of Central Kitchen : Rs. 30,000/: Rs. 1,00,000/- for every 15 Stations

Capital Requirements as per expansion plan for the 1st year of operations Particulars No of Stations added For Stations For Kitchen Registration & Permissions Total Direct Rs. 30,000 Per Stn Rs. 1,00,000 per 15 Stns Unit Quarter 1 3 90,000 1,00,000 20,000 2,10,000 Quarter 2 9 2,70,000 2,70,000 Quarter 3 9 2,70,000 1,00,000 3,70,000 Quarter 4 3 90,000 1,00,000 1,90,000

Capital Requirement to develop fixed asset for first year is about Rs. 10,40,000/Thought the second years plans are ready, capital requirements have not been calculated. A rough estimate is about 1.5-2 Crs for expansion.

Operational Costs
Operational costs have been computed as follows Raw Material per station per day : Rs 750/-

Raw Material Per station per month : Rs. 22,500/Maintenance per station per month : Rs. 5,000/Total Operational cost per station : Rs. 27,500/-

Kitchen cost per month Per Station : Rs. 5,000/Requirements as per expansion plan for the 1st year of operations Particulars Total no. of Stations Operational Cost Kitchen No of Employees Salary of Managers (2) Salary of other Employees Total Indirect Rs.15,000 per person Rs. 7500 per person Rs. 27,500 per stn Rs. 5,000 per stn Unit (per month) Quarter 1 3 247500 45000 2 90,000 45000 4,27,500 Quarter 2 12 990000 180000 4 90,000 90000 13,50,000 Quarter 3 21 1732500 315000 6 90,000 135000 22,72,500 Quarter 4 24 1980000 360000 8 90,000 180000 26,10,000

Total Indirect Cost of operations: Rs. 66,60,000/- (this does not include micro entrepreneurs profit)

Projected Revenues
Revenue per station per day Revenue per station per month Share of Micro Entrepreneur : Rs 2,000 : Rs 60,000 : 25% of revenue at Cart

Particulars Total no. of Stations Total Revenue Payment to Micro Entrepreneur Indirect Costs Total Expenses Profits

Unit (per month)

Quarter 1 3

Quarter 2 12 21,60,000 4,32,000 13,50,000 17,82,000

Quarter 3 21 37,80,000 7,56,000 22,72,500 30,28,500

Quarter 4 24 43,20,000 8,64,000 26,10,000 34,74,000

Rs. 60,000 per stn 20% of revenue Per stn (Rs 15,000)

5,40,000 1,08,000 4,27,500 5,35,500

4,500

3,78,000

7,51,500

8,46,000

Expected First years turnover: Rs. 1,08,00,000/Total Profits for 1st year Total capital Investment : Rs. 19,80,000 /: Rs. 10,40,000 /-

Break Even Period is approx 6 months.

Investments
The total investment has been divided in 3 stages Stage 1: Initial capital requirement to start the business is about 5 lakh for 3 months (2.1 lakh for capital setup and around 2.9 for liquidity for 3 months). 3.5 Lakh of the above amount has been raised and working for the rest 1.5 lakh, with this investment, the planning and development is started. Stage 2: Stage 2 investment is required for growth to about 20 carts after first 3 months. this would be facilitated by BHUMI by tie up with financial institutions that would provide micro credit for the entrepreneurs (Cart owners). Profits from these 6 months can be used to increase the capacity of the kitchen. Stage 3: Final Scaling of operations after year of implementation would need about 1.5-2 Crs. The plan is to pitch for venture capital at that stage.

THE TEAM COMPOSITION

Team consists of five members (added one after the Executive summary). Three will be executing the plan and two who will be mentoring the entrepreneurs. 1. Paresh Masade (23) PGDIE from NITIE, Expertise in Business Administration, Supply Chain Management and Marketing 2. Chandrashekhar K (21) B.Tech in Electronics engineering and an entrepreneur. Both of us are partners in a web development company named COHERENDZ (www.coherendz.com), and are working together for past 10 months. Coherendz today is a team of 7, has 17 clients and has completed 23 projects. We team up to bring in the hands-on experience of managing a company, understand the tougher aspects of implementation and have the required business acumen required to build the business, apart from the perfect chemistry between us.

As both of us have knowledge of business but do not have on-ground experience that is much needed for this kind of business, we added one more member into the core team. 3. Mr. Afzal Khan (40), He has about 15 years of experience into construction business and has a drive for making big. His presence would complement the managerial knowledge we had gained with the know-how of on-ground reality in running the business.

The team also includes the following members for advisory and mentoring, they are also the initial investors into the business 4. Mujeeb Khan: President, BHUMI and Owner, Goodwill ventures 5. Rakesh Dubbudu: Treasurer, BHUMI and working as Sr. Software engineer at Oracle.