Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Establishing a Food Joint in Pune 
1 Exe-MBA (2008-11) 
Symbiosis Institute of Management Studies, Pune 
Executive MBA (20...
Establishing a Food Joint in Pune 
2 Exe-MBA (2008-11) 
~ Acknowledgement ~ 
A successful project can never be prepared by...
Establishing a Food Joint in Pune 
3 Exe-MBA (2008-11) 
Table of contents 
1 
Executive Summery 
4 
2 
Introduction 
2.1 
...
Establishing a Food Joint in Pune 
4 Exe-MBA (2008-11) 
1. EXECUTIVE SUMMARY 
Restaurant/Food service market in India has ...
Establishing a Food Joint in Pune 
5 Exe-MBA (2008-11) 
2. It‟s a Low Cost Food Joint concept with differentiation from wh...
Establishing a Food Joint in Pune 
6 Exe-MBA (2008-11) 
2. INTRODUCTION 
2.1 OBJECTIVE 
The objective of this Project Repo...
Establishing a Food Joint in Pune 
7 Exe-MBA (2008-11) 
2.3 METHODOLOGY/APPROACH 
The methodology opted in preparing the p...
Establishing a Food Joint in Pune 
8 Exe-MBA (2008-11) 
3. RESEARCH METHODOLOGY 
3.1 APPROACH: 
Research Approach: SURVEY ...
Establishing a Food Joint in Pune 
9 Exe-MBA (2008-11) 
3.2 DATA ANALYSIS AND INTERPRETATION 
1. How much do you spend on ...
Establishing a Food Joint in Pune 
10 Exe-MBA (2008-11) 
4. Your age group? (enter „M‟ for male, and „F‟ for female) 
This...
Establishing a Food Joint in Pune 
11 Exe-MBA (2008-11) 
6. How often do you come here: 
The question simply represents th...
Establishing a Food Joint in Pune 
12 Exe-MBA (2008-11) 
9. Select your preferences of what drink do you have with your re...
Establishing a Food Joint in Pune 
13 Exe-MBA (2008-11) 
The objective of this question was to gauge the opportunity of of...
Establishing a Food Joint in Pune 
14 Exe-MBA (2008-11) 
15. Select your preferences for evening beverage (mention 1,2,3 i...
Establishing a Food Joint in Pune 
15 Exe-MBA (2008-11) 
2. 48% of the respondents said that they visit the same food join...
Establishing a Food Joint in Pune 
16 Exe-MBA (2008-11) 
8. Indian food service market is dominated by global players, esp...
Establishing a Food Joint in Pune 
17 Exe-MBA (2008-11) 
4.2 FAST FOOD POTENTIAL IN PUNE 
As per the 2010 Census of India ...
Establishing a Food Joint in Pune 
18 Exe-MBA (2008-11) 
The food retail industry, currently at US$ 70 billion is predicte...
Establishing a Food Joint in Pune 
19 Exe-MBA (2008-11) 
Food Joins at Sadashiv/Navipeth area 
Below is the Menu offered a...
Establishing a Food Joint in Pune 
20 Exe-MBA (2008-11) 
Few Shops at Sadashiv/Navipeth area 
2. Below is the list of Food...
Establishing a Food Joint in Pune 
21 Exe-MBA (2008-11) 
Food Joints at Karve Road 
4.4 MARKET ANALYSIS 
4.4.1 Target Audi...
Establishing a Food Joint in Pune 
22 Exe-MBA (2008-11) 
4.4.3 Market Growth: 
Well, we have already talked about Growth o...
Establishing a Food Joint in Pune 
23 Exe-MBA (2008-11) 
4.4.5 Location Analysis: 
Site selection is considered the most c...
Establishing a Food Joint in Pune 
24 Exe-MBA (2008-11) 
Karve Road/Kothrud: 
This area is home to thousands of IT profess...
Establishing a Food Joint in Pune 
25 Exe-MBA (2008-11) 
area is also within 1.5 km periphery of four famous roads of Pune...
Establishing a Food Joint in Pune 
26 Exe-MBA (2008-11) 
5. START UP SUMMARY 
5.1 Mission Statement 
Our main goal is offe...
Establishing a Food Joint in Pune 
27 Exe-MBA (2008-11) 
5.3 Objectives 
Just Punjab‟s objectives for the first three year...
Establishing a Food Joint in Pune 
28 Exe-MBA (2008-11)
Establishing a Food Joint in Pune 
29 Exe-MBA (2008-11) 
Future Products: Just Punjab will focus on its existing menu for ...
Establishing a Food Joint in Pune 
30 Exe-MBA (2008-11) 
Other Personals: 
1. Shammi Kumar Arora: Hemant‟s father who is h...
Establishing a Food Joint in Pune 
31 Exe-MBA (2008-11) 
3. Customer reaches the food counter and gives the token, in turn...
Establishing a Food Joint in Pune 
32 Exe-MBA (2008-11) 
5.8 Physical Evidence: 
The physical evidence can be environment,...
Establishing a Food Joint in Pune 
33 Exe-MBA (2008-11) 
6. FINANCE 
6.1 Start Up Funding: 
Start-up Expenses Designing co...
Establishing a Food Joint in Pune 
34 Exe-MBA (2008-11) 
6.2 Sales Forecast: 
The following sales graph is based on first ...
Establishing a Food Joint in Pune 
35 Exe-MBA (2008-11) 
6.4 Projected Profit & Loss: 
The most important assumption in th...
Establishing a Food Joint in Pune 
36 Exe-MBA (2008-11) 
6.5 Projected Cash Flow: 
The cash flow depends on the sales fore...
Establishing a Food Joint in Pune 
37 Exe-MBA (2008-11) 
No investor can claim the return/investment amount before the per...
Establishing a Food Joint in Pune 
38 Exe-MBA (2008-11) 
8. RISK ANALYSIS 
We also want to list down some of the risk fact...
Establishing a Food Joint in Pune 
39 Exe-MBA (2008-11) 
9. CONCLUSIONS AND RECOMMENDATIONS 
9.1 Conclusion: 
Just Punjab ...
Establishing a Food Joint in Pune 
40 Exe-MBA (2008-11) 
Most of the customers who eat at such joints do not mind getting ...
Establishing a Food Joint in Pune 
41 Exe-MBA (2008-11) 
10. ANNEXURES 
Questionnaires prepared for survey is attached bel...
Establishing a Food Joint in Pune 
42 Exe-MBA (2008-11) 
6. How often do you come here: 
a) Once a month 
b) Once a week 
...
Establishing a Food Joint in Pune 
43 Exe-MBA (2008-11) 
a) Convenience 
b) Price 
c) Taste 
d) Other (please specify) 
11...
Establishing a Food Joint in Pune 
44 Exe-MBA (2008-11) 
11. BIBLIOGRAPHY 
Books: 
The High Performance Entrepreneur by Su...
Upcoming SlideShare
Loading in …5
×

Project mba small fast food joint

17,464 views

Published on

The objective of this Project Report is to design a cost effective business plan for “Establishing a

food joint in Pune”. This report will try to find out various aspects of starting a venture by looking

through all possible angles and answer a simple question of “why would customers buy from me?”

Published in: Business

Project mba small fast food joint

  1. 1. Establishing a Food Joint in Pune 1 Exe-MBA (2008-11) Symbiosis Institute of Management Studies, Pune Executive MBA (2008-11) A Project Report On “Establishing a Food Joint in Pune” UNDER THE GUIDANCE OF PROF. PRAVIN K A PROJECT SUBMITTED TOWARDS PARTIAL FULFULLMENT OF EXECUTIVE MBA COURSE BY HEMANT ARORA (Roll No 07) PRN NO. 08020446007
  2. 2. Establishing a Food Joint in Pune 2 Exe-MBA (2008-11) ~ Acknowledgement ~ A successful project can never be prepared by the single effort or the person to whom project is assigned, but it also demands the help and guardianship of some conversant person who helps in the undersigned actively in the completion of successful project. Well, that was quite scripted. In my words, I just want to thank Prof. Pravin K for guiding me in the right direction. Three sessions with Pravin sir were more than enough to enlighten and motivate me towards the completion of this project study. His knowledge of 1H5Ws of Entrepreneurship has been amazing throughout all the three sessions. I also want to thank the food joint owners in Sadashivpeth/Navipeth and Karve Road area who allowed me to conduct survey for this project in their food joints. Especial thanks to Tilak Hotel who has been a center of all the activities and survey performed during the course of project study. Lastly, I want to thank Mr. Ashish Watve and Sachin Kulkarni for providing their valuable suggestion and advice on this project study. Hemant Arora
  3. 3. Establishing a Food Joint in Pune 3 Exe-MBA (2008-11) Table of contents 1 Executive Summery 4 2 Introduction 2.1 Objective 6 2.2 Choice of topic 6 2.3 Methodology/Approach 7 3 Research Methodology 3.1 Methodology/Approach 8 3.2 Data Analysis and Interpretation 9 3.3 Findings 15 4 Fast Food Market – India/Pune 4.1 About Food Industry 17 4.2 Fast Food Potential in Pune 17 4.3 Industry Analysis 18 4.4 Market Analysis 22 5 Start-up Summary 5.1 Mission Statement 27 5.2 Keys to success 27 5.3 Objectives 28 5.4 Product Mix/ The Menu 28 5.5 The Team 30 5.6 Service Delivery Process 31 5.7 Marketing Communication 32 5.8 Physical Evidence 33 5.9 Pricing of the product 33 5.10 Operation Criteria 33 6 Finance 6.1 Start up funding 34 6.2 Sales Forecast 35 6.3 Break even analysis 35 6.4 Projected Profit and Loss 36 6.5 Projected Cash Flow 37 6.6 Legal Structure 37 7 SWOT Analysis 38 8 Risk Analysis 39 9 Conclusion and Recommendations 40 10 Annexure 42 11 Bibliography 45
  4. 4. Establishing a Food Joint in Pune 4 Exe-MBA (2008-11) 1. EXECUTIVE SUMMARY Restaurant/Food service market in India has witnessed tremendous growth in recent years. With increasing number of people eating out the industry offers major opportunities to the players to capture a larger consumer base. During the course of last few years Pune has emerged as a very prolific market for Fast Food Joint. Only McDonald‟s has invested over Rs. 50 crores in the city over the past 10 years. Below are the possible reasons for Pune being the favorite place for all the international players in fast food market: • Rising disposable income levels • Increasing urbanization and exposure to Western culture • Growing consumerism • Changing age profile • Increasing availability of cheap consumer credit • Increasing organized food retailing Next two paragraphs will give me a chance to sell this project, which is why Executive Summary is written in a business plan. “Just Punjab” is a dream project by a science and a commerce graduate, first being a Punjabi from Delhi and the later is heading from Maharashtra with his roots in Pune. Both of us like food and love serving it which is the birth of this idea. Just Punjab will offer a differentiated pitch to Puneits with some unheard dishes in its Menu. Just Punjab will provide a combination of excellent Menu at value pricing, with modern ambience and atmosphere. It will not be a typical restaurant offering Lunch and Dinner; it‟s going to be an all time food joint and a non-lunch/dinner food joint. Just Punjab also eyes on changing the perception of fast food; people seek in burger, pizza or French fries etc. Just Punjab will have the typical Indian food menu as a fast food menu. The basic objective is to offer our customers a healthy fast food menu. As owners, our commitment is to take personal accountability for all financial debt. We have taken the necessary precautions to ensure the business is fully capitalized, and have addressed all financial shortfalls to ensure a successful business start-up. Under a realistic scenario, the company should break even in the 13th month from the startup date. On a linear projection, Below is the snap shot of highlights of our business plan: 1. The project is based on thorough study and not just optimism. We have done a market research among not only the customers but also existing food joint owners to know the industry and market facts.
  5. 5. Establishing a Food Joint in Pune 5 Exe-MBA (2008-11) 2. It‟s a Low Cost Food Joint concept with differentiation from what market offers. In today's highly competitive environment, it is becoming increasingly difficult to differentiate one fast food outlet from another; however this one definitely does. 3. A contingency buffer is included in the start-up cost to ensure the business in not under financed, as well as giving the business adequate funding to sustain it in the first six months of start-up. 4. An investor should invest with Just Punjab, because we want to bring a change in the unorganized fast food industry by offering a unique menu with value pricing. The projected cash flow and P&L statement showed that Just Punjab will break even in just 13 months. Investor will be given a 5 % profit after completion of 2nd financial year from the startup date if balance sheet shows profit in the second year.
  6. 6. Establishing a Food Joint in Pune 6 Exe-MBA (2008-11) 2. INTRODUCTION 2.1 OBJECTIVE The objective of this Project Report is to design a cost effective business plan for “Establishing a food joint in Pune”. This report will try to find out various aspects of starting a venture by looking through all possible angles and answer a simple question of “why would customers buy from me?” The research work also tries to find out the answers of below questions: a) What will be the best product mix for Pune people? How will it evolve as a family of product and services? b) Is this the right business to venture into? c) How to price the product? d) Decision on location for the food joint? e) Decision on name and marketing strategy of the food joint? f) How to create value for the customer? g) What is the competitive landscape? How are other leading players serving the market? h) Why should someone buy from my food joint? i) How to balance budget with good customer experience? j) How is my cost structure different from that of the competition? k) When will the organization reach breakeven? l) What is the funding plan? How much of it will come from personal capital, how much from venture funding and what portion from loan? m) What are the various risks involved in building the business of food joint? n) In what way will the team de-risk those? 2.2 CHOICE OF TOPIC Most of the working professionals crave to open their own venture in some or the other way though it is a known fact that 99% of startups fail in the very first year of their birth, still we see so many new ventures coming up every day. The choice of topic came from mainly two things. The first when I realized that I love serving food to people and the later being the opportunities I see in Pune for small food joints. Choosing this as a project was the only option to know more about food business before venturing into it and I believe that I made the right choice.
  7. 7. Establishing a Food Joint in Pune 7 Exe-MBA (2008-11) 2.3 METHODOLOGY/APPROACH The methodology opted in preparing the project report is very simple and provides a practical view of the requisites of a startup. It focuses on basic fundamentals of starting business by giving a step by step approach towards venturing into food business. Below are the main steps involved in preparing the report: a) Forecasting of the cost involved and budget for each element b) Market Research: Data collection through primary and secondary data collection method c) Data Analysis d) Finalizing the menu (Product & Service) e) Risk Analysis f) Test Marketing g) Branding strategy h) Launch of the project
  8. 8. Establishing a Food Joint in Pune 8 Exe-MBA (2008-11) 3. RESEARCH METHODOLOGY 3.1 APPROACH: Research Approach: SURVEY METHOD 90% of research is done with the help of survey method. Secondary Source: During the course of project, the research process is kept quite simple. There were lots of challenges in terms of availability of secondary data, however below websites were helpful to provide plenty of information in terms of fast food industry and latest trend in Indian food market: http://www.ibef.org : Indian Brand Equity Foundation http://www.mckinsey.com http://www.ey.com/IN: Ernst & Young http://nrai.org http://commerce.nic.In/ Primary Source A questionnaire was prepared in order to conduct market survey. The questionnaire was based on different parameters to judge and understand the consumer behaviors and determine the best possible strategies which could be used to attract customers. The research carried out in this project was descriptive in nature. The study was aimed at knowing the various eating habits of a consumer. Sampling Procedure: Sample Unit: Consumer visiting Small Eating Joints Sample Size: 50 Respondents Sampling Method: Random Sampling Method The questionnaire prepared tries to answer questions related to below aspects: a) Product Mix b) Customer Profile c) Market Segmentation d) Preferences of target customers The questions are presented exactly same wording and in the same an order to all respondents.
  9. 9. Establishing a Food Joint in Pune 9 Exe-MBA (2008-11) 3.2 DATA ANALYSIS AND INTERPRETATION 1. How much do you spend on daily fast food/snacks at food joints/outlets (excluding lunch and dinner)? 48% of respondents said that they used to spend Rs. 26-50 on daily snacks which include morning breakfast/tea and evening snacks. 34% of them said that they spend Rs. 10-25 on the same. This suggests that we can keep a combination of snacks that cost Rs.10/- to college going students. 2. I spend most of the above quoted money for…….. This question helps to understand the suitable break time for the Joint and also helps to understand the time slots when there will be few customers. 3. Please mention the income group you belong to (Students can mention their pocket money) 70% of respondents were students. We are targeting at a market which is surrounded by students and working professionals. This question helps to understand the spending power of the consumer in the market. 0% 10% 20% 30% 40% 50% Rs. 10-25/- Rs. 26-50/- Rs. 51-75- More than Rs. 75 34% 48% 14% 4% 0% 10% 20% 30% 40% Morning break fast Afternoon snacks Evening tea and snacks Not sure 32% 14% 28% 26%
  10. 10. Establishing a Food Joint in Pune 10 Exe-MBA (2008-11) 4. Your age group? (enter „M‟ for male, and „F‟ for female) This question helps to identify Age Group of my customers in a specific area. 84% of the customers belong to the younger age group i.e. 18-30 years. 25% of respondents were females and their responses show a major different of eating habits of male and female customers. 5. I usually come here: The above result shows that 74% of respondents accepted that they usually come in a group of two more. This simply means that “Mouth Publicity” is the best communication strategy in food joints business. 0% 10% 20% 30% 40% Below Rs.5000/- 5000/-to 10000/- 10000/-to 25000/- 25000/-to 35000/- 35000/-and above 0% 20% 40% 60% 80% 100% Up to 18 Between 18 and 30 Between 30 and 50 Over 50 84% 10% 6% 0 0% 10% 20% 30% 40% 50% Alone In a group of two In a group of three In a group of three or more 26% 44% 18% 12%
  11. 11. Establishing a Food Joint in Pune 11 Exe-MBA (2008-11) 6. How often do you come here: The question simply represents the high rate of loyal customers and repeat buying pattern in this type of businesses. The target customer base is nothing but a mass market which can be attracted by providing a value based service and differentiation from existing players. 7. How far do you live/work from this place? 60% of the respondents said that they stay or work less than a km away. This represents the reason of attractiveness of a food joint is not only taste but also convenience. 8. Select the preferences for your regular breakfast (mention 1,2,3 in any of the three below): This question works as a reference point while preparing menu for the breakfast. This can work as a guide while preparing a list of acceptable food items to the customer. Poha, Idli Sambhar, Fruits and Maggi/Pasta are the most acceptable items on the preference list of our customers. 0% 10% 20% 30% 40% 50% Once a month Once a week Twice a week Almost daily Twice a day 6% 6% 32% 48% 4% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 30% 8% 6% 8% 30% 8% 8% 4% 16% 4% 4% 16%
  12. 12. Establishing a Food Joint in Pune 12 Exe-MBA (2008-11) 9. Select your preferences of what drink do you have with your regular breakfast: The cost to offer Juice is more than Cold Drink and Milk, Hence, Just Punjab will offer below as a beverage during first half of the day: Chai Coffee Cold Drink Milk 10. Your preference for the food joint is due to: The above mentioned graphical representation speaks that 56% of customers comes to a food joint due to taste. Nonetheless, 28% says that their reason for eating at a food joint is convenience. Choosing the right location is as important as writing a business plan before getting into this business. We will see more about location after few more pages. 11. Do you often have a heavy breakfast and skip your lunch? 0 5 10 15 20 25 30 35 32% 17% 13% 7% 3% 11% 2% 15% 0% 10% 20% 30% 40% 50% 60% Convenience Price Taste 28% 16% 56%
  13. 13. Establishing a Food Joint in Pune 13 Exe-MBA (2008-11) The objective of this question was to gauge the opportunity of offering some heavy breakfast to a segment that often miss to have breakfast during the 8-11 window. And surprisingly 54% people accepted that they don‟t have lunch and prefer to have heavy breakfast. 12. What will be your preferences for a heavy breakfast if you plan to skip lunch: 13. You would rather go to a place where you are offered worst service with super taste than good service with okay taste: 95% of audience accepted that taste is more important for them than service. They also accept that they mostly headed to a place where the food and price are justifiable even if they have to stand and eat. This feedback gives a clue of why so many food joints in Pune do a good business even if their service is poor. 14. What do you usually have as evening beverage? 0% 20% 40% 60% Yes No sometimes 52% 18% 28% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Series1
  14. 14. Establishing a Food Joint in Pune 14 Exe-MBA (2008-11) 15. Select your preferences for evening beverage (mention 1,2,3 in any of the three below): 3.3 FINDINGS: You come to know how research helps only after conducting one. The theory I went through in Semester III seems to be so true. The lessons taught by Mrs, Mavi (Service Marketing Lecturer in Semester II) were really helpful in understanding why we term Restaurant and Food/Coffee joints as services and not the core product. I also recalled the case study called “Myths of Market share” and the lecture on this topic by Professor Shastri in Semester IV. He represented afresh view of making profit-oriented decision rather than advocating competitor-oriented objectives as in our traditional classes and textbooks. Below is the list of observations from this Market Research: 1. According to a recent FICCI-Ernst & Young study, food constitutes about 30% of the consumer wallet and two-third of it is spent on primary and secondary processed products. Further, while the per-capita disposable income is up by 8% in the last five years, it has led to an increase of 20% in per-capita food consumption expenditure. 0% 20% 40% 60% 80% 100% Tea/ Coffee Cold Drink Cold Coffee 83% 9% 9% 0% 5% 10% 15% 20% 25% Tea Coffee Soft Drink Lassi Cold Coffee Juice 24% 19% 9% 10% 24% 15%
  15. 15. Establishing a Food Joint in Pune 15 Exe-MBA (2008-11) 2. 48% of the respondents said that they visit the same food joint on daily basis. This shows that there is an opportunity to include more customers on daily basis if we get to know why they turn up only once or twice a week. 3. We need to price our menu in such a way that 2-3 items are offered with a price of below Rs.10/- each so that customers can have snacks and a cup of tea with a price of Rs.15/-. 4. Most of the customers visit such food joints either from 8:00 AM to 01:00 PM or 4:00 PM to 8:00 PM. This finding will help in planning the staffing for Just Punjab. 5. Only 26% of the respondents visited the Food Joint alone. 74% of the respondents came in a group of two or more. This indicates that in the business of food joint, 74% of the customer will bring another customer with them which is again a form of advertising. By keeping these 74% of customers happy, business can flourish and generate more customers. 6. Puneits prefer to have traditional breakfast offered in most of the food joints in Pune. Poha and Idli-Sambhar proved to be the most preferred breakfast in Pune. Fruits and Maggi/Pasta also ranked at number two as per the response from 50 respondents. 7. Rise in disposable incomes coupled with the boom in Internet, mass media and increased exposure to lifestyle in Pune have significantly impacted consumer habits. With increasing inclination towards convenience shopping, increased awareness of balanced diet and health consciousness is resulting in a new generation of consumers with changing food habits. Indian consumers testify to the fact that they have become more sensitive to the health quotient of food consumed as compared to a couple of years ago.
  16. 16. Establishing a Food Joint in Pune 16 Exe-MBA (2008-11) 8. Indian food service market is dominated by global players, especially in the organized fast food segment. Though the Indian consumers have been eating at roadside eateries and dhabas and stalls which still occupy a major share of the unorganized sector. The objective of “Just Punjab” is to eye on this unorganized sector by providing them a value for money deal. 4. INDIAN FAST FOOD INDUSTRY/MARKET 4.1 ABOUT FOOD INDUSTRY India is one of the fastest growing economies in the world. While we are moving towards becoming a services-led economy, agriculture still contributes 17 percent to the total GDP and employs 60 percent of population. The income enhancement of such a large section of society is possible only through adding value and removing inefficiencies in the food value chain. That is why the Food Industry has been accorded a high priority status by the government which is facilitating its growth by providing policy frameworks and initiatives at various levels. In the year 2006-07, the size of the Food Industry in India was estimated at around Rs 8,80,000 crores or US $ 200 billion. At present, Indian Food Industry is growing at the rate of 13 percent per annum and it has higher potential to further. Therefore, it offers tremendous opportunities for all stakeholders in the areas of production, processing, marketing, supply chain, infrastructure development, technology up gradation and education. The Government of India is actively promoting the concept of mega food parks and is expected to set up 30 such parks, each with a cold storage facility. The parks will also have facilities for sorting, grading, processing, packaging and quality control, thereby providing an investment opportunity to integrated players, as well as developers. 5% 95% Organized Segment Unorganized Segment
  17. 17. Establishing a Food Joint in Pune 17 Exe-MBA (2008-11) 4.2 FAST FOOD POTENTIAL IN PUNE As per the 2010 Census of India estimate, the population of the Pune urban agglomeration is to peg around 5,518,688. The migrating population rose from 43,900 in 2001 to 88,200 in 2005. The city's metropolitan area has grown rapidly but retains its old Marathi neighborhoods and the aura of an intellectual center. As the agro-pharmaceutical business has dwindled in recent decades, immigration from erstwhile tribal peoples now accounts for seventy percent of population growth. Pune has the sixth largest metropolitan economy and the second highest per capita income in the country (Chandigarh is first). Being an educational hub, also known as Oxford of India; Pune has a large college going population. It also sees a huge single population finding job in IT/BPO or Banking sectors. These are the potential customers who hardy prefer to cook at home and completely depend upon Food Joints for breakfast, snacks, lunch and dinner. This opens up the door for food industry. All the international players e.g. McDonald‟s, KFC, Sub-way are expanding their network in Pune. McDonald‟s has invested over Rs. 50 crores in the city over the past 10 years and has maintained a sustained growth in the city. McDonald‟s currently serves the city with 10 restaurants and has plans to increase the number of outlets to about 30 - 35 within the next three years. 4.3 INDUSTRY ANALYSIS 4.3.1 Background & Industry Growth Pune has its wings of varied culture and business/industry scenario across the city. Almost all the world‟s big fast food brands have succeeded in making their presence felt in the Pune and most of them are posting appreciable growth. The restaurant industry is estimated at Rs 43,000 crores, with a growth rate of 5-6% per annum. The organized segment of the industry is estimated at Rs 7,000-8,500 crores. The Indian fast food market is growing at an annual rate of 25-30 per cent; according to a report published by market research firm RNCOS in September 2010, titled „Indian Fast Food Market Analysis‟. Foreign fast food chains are aggressively increasing their presence in the country. For instance, Domino‟s has planned to open 60-65 outlets every year for the next three years (2010- 2012) while Yum Brands Inc is also preparing for massive expansion across the country with plans to open 1000 fast food outlets by 2015.
  18. 18. Establishing a Food Joint in Pune 18 Exe-MBA (2008-11) The food retail industry, currently at US$ 70 billion is predicted to grow more than double to US$ 150 billion by 2025, according to KPMG, a global audit and advisory firm. India‟s food retail industry is poised for exponential growth. With the evolution of innovative food processing capacity and the emergence of organized retail, change in consumption patterns along with fast changing demographics and habits is fuelling the next growth trajectory for the food industry in India. 4.3.2 Competition: “Just Punjab” may face competition from following categories of food joints in the chosen locations: 1. Small Size Food Joints offering Indian Fast Food in their Menu in Navipeth and Sadashivpeth area. a) Tilak Hotel b) Small Coffee Houses e.g. Rohit Coffee House, Café Cool etc c) Matoshree Fast Food Out of all the Food Joints in Navipeth/ Sadashivpeth Area, Tilak Hotel owns the largest market share. Below is a picture taken at 6:15 PM in December:
  19. 19. Establishing a Food Joint in Pune 19 Exe-MBA (2008-11) Food Joins at Sadashiv/Navipeth area Below is the Menu offered at various food joints in Navipeth/ Sadashivpeth area: Poha Vada Pao Dhokla Sabundana Khichdi Sandwiches Pulao Veg Patties Dahi-Vada Samosa Paratha Pav-Bhaji Pizza Dosa Maggi Burger Veg-Rolls Dabeli Bhelpuri Idli-Sambhar MeduVada Chai Cold-Drink Juice Lassi Coffee Cold-Coffee Flavoured Milk Vada Sambhar After conducting the survey in Sadashivpeth and Karve Nagar, it was observed that no restaurant was able to create a differentiation in terms of service, quality, taste except Tilak Hotel. Tilak Hotel is one of the oldest Food Joint in this area. Tilak Hotel is run by a family of three brothers. The shop is made in 250 square feet with 5 workers working from 8 AM to 8 PM window. The quality of food at Tilak Hotel is quite consistent with quick service. You can enjoy one of the tastiest tea of Pune at this place. Rohit Coffee and Milk products is also located within 1 square km area of Tilak Hotel. It offers cold milk products such as Cold Coffee, Choclate Milk, Rose Milk, Lassi and Taak. This joint offers a limited variety of food products and seems to be focused on one area of the business. Look at the below snap to have a look at the rush near this joint:
  20. 20. Establishing a Food Joint in Pune 20 Exe-MBA (2008-11) Few Shops at Sadashiv/Navipeth area 2. Below is the list of Food Joints which offers Fast Food Snacks in Karve Nagar: a) Ruvira Enterprise b) Chaitanya Fast Food c) Come – In d) Chintamani Parotha e) Laxmi Juice Bar and Fast Food
  21. 21. Establishing a Food Joint in Pune 21 Exe-MBA (2008-11) Food Joints at Karve Road 4.4 MARKET ANALYSIS 4.4.1 Target Audience: The target segment mainly includes college/school/coaching going students, and working class. Just Punjab looks forward to serve the needs of local and tenant customers searching for a health oriented breakfast. None of the food joints‟ USP consists of “Health Food” in Sadashivpeth or Karve Nagar except international a player like Sub-Way which is situated at FC Road. 4.4.2 Market Size: During the course of study, I found these two places which can give “Just Punjab” full exposure to younger customer. Sadashivpeth/ Navipeth area is the hub with institutions offer difference courses to CA/CS/IAS/PCS aspirants. It also has SP College, one of the famous colleges of Pune. Deccan College is also within half a kilometer with a number of small schools within one kilometer periphery. Karve Nagar is also a home to a large number of students and youngsters. You can also find colleges and educational institutions like Cummins College, Maharshee Karve Stri Shiksha Janstha etc.
  22. 22. Establishing a Food Joint in Pune 22 Exe-MBA (2008-11) 4.4.3 Market Growth: Well, we have already talked about Growth of India and Pune in terms of population. I would like to show some fact presented by NRAI (National Restaurant Association of India) with the help of white paper 2010. This is the first time NRAI presented a white paper with a preview of importance of Restaurants business in India. “----The restaurant industry is estimated at Rs 43,000 crores, with a growth rate of 5-6% per annum. The organized segment of the industry is estimated at Rs 7,000-8,500 crores. The sector also contributes to the overall delight of consumers as eating is one of the top 3 leisure activities enjoyed by Indians across the country. The restaurant industry offers tremendous scope for growth, and could be a much larger source of tax revenue to the government, if its growth potential is adequately tapped. Further, additional tax of up to Rs. 4200 crores can be generated by converting unorganized to organized players. It is also one of the major employment providers----“ 4.4.4 Market Segmentation: Just Punjab intends to cater to a wide customer base. We want everyone to feel at ease while eating at our place. We have defined the following groups as targeted segments that contribute to our growth projections The business person College going students Single tenants living around the area Employees of the shops and offices These particular market segments are 15-30 years old, have disposable income, and are seeking value for money options. These are the types of people who frequent other food joints in the area. They are to be, cosmopolitan, and sophisticated who also cares about what they eat and see if it‟s a health food or not. They are also the most open to trying something new and will embrace our cultural fusion menu. We have chosen this group for several important reasons. It is our goal to be "the extraordinary fast food place" and we believe that the age group from 15 to 30 is the primary customer of food joints in Pune. They are on limited or fixed incomes and seek a value/price relationship that will not stretch their budgets.
  23. 23. Establishing a Food Joint in Pune 23 Exe-MBA (2008-11) 4.4.5 Location Analysis: Site selection is considered the most crucial aspect of the business planning cycle especially in food business, as food preparation and serving is done at the same place. After looking at the soaring rates of properties in Pune, I identified two places to open Just Punjab: Navipeth/Sadashiv peth Area: The main reason for choosing this place is the kind of customers it offers. It simply matches the segmentation we are targeting. This area is full of students and is a home to the students of three colleges who stay as a tenant. Gyan Pramodhni is also located here where students from various cities come for preparation of IAS, PCS, CA and other competitive examinations. We are going to offer our services at a rented place, let‟s see the rent of commercial properties offered in this area: Location 1>> Built-up Area: 300 Square Feet Property Description: Situated in heart of the city, parallel to Laxmi Road, busy market area, shopping center area, close to Tulshibaug and Jaihind showroom Rent: Rs.18,000/- Deposit: Rs.1,00,000/- Location 2>> Built-up Area: 350 Square Feet Property Description: Situated in a lane opposite to Baba Laptop, 2 mnutes walk from SP College, 300 Meters from Gyan Prabodhni. Rent: Rs.20,000/- Deposit: Rs.1,20,000/- Location 3>> Built-up Area: 300 Square Feet Property Description: Property is located opposite to SP College with open space in front of shop. Rent: Rs.20,000/- Deposit: Rs.80,000/-
  24. 24. Establishing a Food Joint in Pune 24 Exe-MBA (2008-11) Karve Road/Kothrud: This area is home to thousands of IT professionals and students due to its unique location and lower property rates. We also have Cummins Girls College on this road and two engineering colleges within 1.5 kilometer periphery. This place has a great potential due to its unique proposition of students and single working professionals. All the food joints in this area offer almost same kind of menu in breakfast or snacks. We have Cummins College, Tejaswani Health Club, SKAW Mahila Vidyalaya, and various small institutes on the same road. Let‟s look at the different locations with description and rent: Location 1>> Built-up Area: 350 Square Feet Property Description: Situated at Karve Road at 100 meter distance from Cummins Girls College Rent: Rs.15,000/- Deposit: Rs.60,000/- Location 2>> Built-up Area: 275 Square Feet Property Description: Situated at Karve Road along with various food joints Rent: Rs.16,000/- Deposit: Rs.80,000/- Location 3>> Built-up Area: 400 Square Feet Property Description: Situated at Karve Road, opposite to a restaurant, 1km away from Big Bazar at Sinhgad Road, 800 Meters from Cummins Girls College Rent: Rs.15,000/- Deposit: Rs.80,000/- Though we have not yet finalized the location; however we have finalized the area and that is Navipeth/Sadashiv peth area. There are various reasons why we are convinced with opening the first food joint of Just Punjab in this area. Let‟s look at the benefits offered by this place: Location Advantage – Geographical Aspects: Sadashiv Peth is the heart of Pune city. We also have three degree and two engineering colleges within the 1 km periphery of this area. This
  25. 25. Establishing a Food Joint in Pune 25 Exe-MBA (2008-11) area is also within 1.5 km periphery of four famous roads of Pune – FC Road, JM Road and Laxmi Road. The place is also very close to Mandai which reduces the cost of purchasing kitchen items etc early morning. Market Segment: The place is home to thousands of tenants in both the category students as well as working professionals in the age group of 15-30. It is also observed that 35% of students‟ pocket money is more than Rs.5000/- which increases the spending power of the customers. Security: Being the heart of the city, police petrol this area 24/7 and there‟s no history of any burglary, robbery in this area for last 5 years. There are two police chowkies within 1 km periphery which is hardly a 5 minute ride on bike. Competition: There are various food joints in this area and the best thing is that they do not involve in the price war. I have seen two coffee shops increasing their price on the same day. There‟s a sense of unity in terms of price and they prefer competing in quality. Food Joints in this area offer almost same menu and why won‟t they, people prefer to eat similar food; however we are going to offer the thid menu with a different fusion and a cultural theme.
  26. 26. Establishing a Food Joint in Pune 26 Exe-MBA (2008-11) 5. START UP SUMMARY 5.1 Mission Statement Our main goal is offer a menu that creates a feeling of “Value for Money” for our customers. Our concept combines not only variety, quality, and healthy food in order to reach our goal of overall value in the fast food experience but also efficient and fast service - customer satisfaction which is our paramount objective. Just Punjab will be the food joint of choice for a younger crowd, couples and singles, male or female. 5.2 Keys to Success Unique, Innovative & Contemporary: The creation of a unique and innovative atmosphere will differentiate us from the competition. Just Punjab will stand out from the other food joints in the area because of the unique design and decor. Product quality: great food, quick service and modern décor to attract younger crowd and give a reason to try us out. Cost Control Focus: We will control costs at all times, without exception. Cost Control will be an integrated function of Just Punjab from the onset. Cost control is about managing the numbers - interpreting and comparing the numbers that impact the bottom line. 80 percent of the success of a food joint is determined before it opens. Our focus is to reduce the cost of goods sold to meet our profit margin goals by managing the following crucial elements of cost: Purchasing, Receiving, Storage, Issuing Inventory, Rough Preparation, Order Taking, Cash Receipts, and Accounts Payable. “Spice of Life” Menu with limited items: Based on our market research we will try to match our menu with market demand. Our menu will be based on customer‟s need with a focus on variety, quality and healthy food. Cultural Theme: Promote good values Just Punjab culture and business philosophy.
  27. 27. Establishing a Food Joint in Pune 27 Exe-MBA (2008-11) 5.3 Objectives Just Punjab‟s objectives for the first three years of operation include: Keeping food costs at less than 35% of revenue Keeping employee labor cost between 15-20% of total sales Averaging sales between Rs.20,00,000 - 22,00,000/- in the first year Promoting and expanding the Just Punjab concept as a unique, modern cultural food joint Expanding our marketing and advertising in Pune and to open another food joint in Pune within 3 years from the startup date of first food joint Reporting a revenue of Rs. 50,00,000/- for financial year 2013-14 5.4 Product Mix/ The Menu Just Punjab will be a vegetarian food joint. It is focused on servicing Pune‟s growing demand for an ethnic eating experience. Based on our market research, we will offer below food items in our menu. We will also have a special item on every Sunday to attract the segment that always crave to try new things. The unique proposition about our menu will be the theme of heart friendly food. We will cook all our food items in Suffola Oil which is 20% costlier than normal oil There will also be a Sunday Surprise dish in the menu. We will also add a special item for people fasting on Monday and Thursday,
  28. 28. Establishing a Food Joint in Pune 28 Exe-MBA (2008-11)
  29. 29. Establishing a Food Joint in Pune 29 Exe-MBA (2008-11) Future Products: Just Punjab will focus on its existing menu for first 6 months. However, as we grow further, we will add new categories to our menu, such as Sandwiches, Dosa, Pao-Bhaji etc. Though we have plans to add new categories in the menu; however we will keep it limited in order to ensure fast delivery and cleanliness in the kitchen. We will revisit the menu every 6 months and may also take a decision on removing an item from the menu if it is not attracting the customers. These decisions will be based on thorough market research with the help of customers‟ feedback and market trends. 5.5 The Team (People) We have assembled a team that embraces different disciplines, accomplished professionals with expertise in various areas of the business. We two partners are heading from two cultures and aims to establish a food joint that gives a fusion of these cultures. Let‟s look at the professional experience of owners: Owners Just Punjab will be managed by Hemant and Harshwardhan. Hemant will leave his current job and will be responsible for all the business activities 1. Hemant Arora (50% partnership): 26 Years old. A Team Lead - Training by profession in AXA-BS. I also have experience in wholesale-bakery items for 5 years as it was my father‟s business. I was involved in this business from 2000 to 2005 while doing my graduation. 2. Harshwardhan Datye (35% partnership): 23 Years old and Senior Trainer in AXA-BS with zero experience in business. Harsh will help in handling local issues related to license and give his fresh point of view in terms of innovating the food menu and future products. Investors: 1. Ashish Watve: Mr. Watve is also doing Exe-MBA from SIMS and showed his interest when I discussed this project with him. 2. Ravi Ramani: Ravi is doing his MBA in Finance from IIM-Lucknow and he is into his last year. Ravi has always been keen in startups and we did do some business together in past. Ravi would be guiding us in terms of finance, cost control; annual budget and he will play a key role in all the long term financial decisions of Just Punjab. 3. Sunjeev Arora: Sunjeev is a Project Manager in Jeomatrix, Noida. He will be a sleeping investor and will be more concern about the balance sheet. He also showed desire to add Delhi with Just Punjab in future expansion plans.
  30. 30. Establishing a Food Joint in Pune 30 Exe-MBA (2008-11) Other Personals: 1. Shammi Kumar Arora: Hemant‟s father who is having 25 years experience in handling bakery workers and also has experience in marketing/selling bakery products. He will be the key decision makers in all the decisions related to Just Punjab‟s kitchen and product mix. Hemant will be a back up and handle kitchen in his father‟s absence. 2. Asha Arora: Hemant‟s mother, who will look after kitchen in less-rush hours and will also help in handling cash counter in peak hours. 3. Manoj Mishra: A Cook from Delhi with 8 years experience, he‟s an expert in preparing special Punjabi Samosa, Chhole/Rajma, Puri-Sabji and Stuffed Paratha. Mishraji also has experience in catering business which will be helpful in taking catering orders. 4. Venkat: Venkat is from south with experience in preparing Vadapao, Idli Sambhar and other south Indian dishes. He has 5 years experience and has been cooking vadapao in different small food joints of Pune. This will be a great break for Venkat, as he has not yet worked in any organized food joint. 5. Emp1 & Emp2: These will be local Marathi guys who will do all the other activities like serving, cleaning etc. These two will be offered a lower package due to the kind of work they will be doing in Just Punjab; however there will be special training provided to them time by time as per customers‟ feedback. We are planning to hire a low-skilled labor initially; however we will also conduct trainings for these people as and when needed. In a long run, we want to work like an MNC from 3rd year onwards with all the functions in place such as Appraisal, Award and Recognition, Training Programs etc. 5.6 Service Delivery Process: 1. Customer walks into Just Punjab and goes to the billing counter to take the token by paying cash. 2. Customer can either refer the menu pasted on the wall or he can ask for a Compaq menu if he wants to check all the food items; however cash needs to be paid well in advance before placing order for anything.
  31. 31. Establishing a Food Joint in Pune 31 Exe-MBA (2008-11) 3. Customer reaches the food counter and gives the token, in turn we handover the item if the same is ready, otherwise we request the customer to stand at the table and we shall call his name once it is ready. 4. Customer can place other orders while having food and he can pay cash for that afterwards. Restaurant owner has to rely on waiters who remember what order was placed during that period. 5. Bill is not served on the dining table, customer has to pay the bill by going to cash counter. 5.7 Marketing/ Promotion/ Communication: We have kept our promotion/communication budget of Rs.10,000/- initially. Further, we have also kept marketing budget at 2% of sales for every quarter. This budget will be spent on below activities: Templates distribution: We will distribute templates and brochure with information on Just Punjab across the Navipeth and area within 2 Km periphery. These templates will be distributed with the newspapers. Visiting Colleges/Institutes/Schools: We will also visit colleges, schools and institutes of the area to create awareness about Just Punjab Building customers‟ database: We will also build a database for our customers and communicate the offers and new menu items through sms and emails. Web Plan Summary: Just Punjab will also have a dedicated website. It will be the virtual business card and portfolio for the company, simple, contemporary and well designed. Our site will offer our menus, prices and reviews. This will also give a link for customer‟s feedback. Our customers can also follow us on Facebook. The budget allotted for marketing communications will be spent on creating awareness about Just Punjab. Our future plans will include a card for our loyal customers with a discounted price on our menu. Our major focus would be offering customers a value for money menu and gain an extra edge through mouth publicity.
  32. 32. Establishing a Food Joint in Pune 32 Exe-MBA (2008-11) 5.8 Physical Evidence: The physical evidence can be environment, layout, ambience, woodwork and design of Just Punjab. Our menu, design of tables, woodwork will give a modern look to attract young customers. We also plan to give a touch of Punjab to create a cultural factor. 5.9 Pricing of the product: The price of product being offered will be based on the cost. We will take an average of raw material on quarterly basis to see if our cost remains at 35% of the price or not. Second, we want to keep the price point of our breakfast as fair as possible to keep us in competition with other fast food outlets. While we are not striving to be the lowest-priced food joint, we are aiming to offer exceptional food at reasonable prices for the average customer. Our main objective will remain same as to offer value for money to our customers. Based on spending power of customers (through market research); we will make sure that we have a <Rs.10/- snack in our menu. Hence we will price Samosa, Vadapao, Bread Patties, and Pohe with a price tag of <Rs.10/- so that we remain the attraction of college going students. 5.10 Operating Criteria Just Punjab will be located in Sadashivpeth. We will service breakfast, brunch, and evening snacks during the week and weekends. Just Punjab will operate during peak service time to take advantage of street traffic, and after-hour patronage from the entertainment facilities in the area. Service will be available during the following hours: Breakfast: Monday to Sunday, 08:00 a.m. to 11:00 a.m. Brunch: Monday to Sunday, 11:00 a.m. to 3:30 p.m. Evening snacks: Monday to Sunday, 03:30 p.m. to 8:30 p.m.
  33. 33. Establishing a Food Joint in Pune 33 Exe-MBA (2008-11) 6. FINANCE 6.1 Start Up Funding: Start-up Expenses Designing consultancy Rs. 20,000.00 Electrical & Structural Engineering Fees & Equipment Rs. 30,000.00 Metal Work Rs. 30,000.00 Stools, Chairs, Tables, Uniforms and other equipments Rs. 150,000.00 Legal Fees Rs. 10,000.00 Business License Rs. 15,000.00 Security Deposits (Phone/Elec/Gas/Water) Rs. 10,000.00 Initial Lease Deposits Rs. 80,000.00 Initial Rent (For 4 months) Rs. 80,000.00 Initial Marketing Rs. 10,000.00 Start-Up Salary (For 4 months) Rs. 96,000.00 Initial Cleaning Services Rs. 5,000.00 Total Start-up Expenses Rs. 536,000.00 Start-up Assets Non-cash Assets from Start-up Rs. 230,000.00 Additional Cash Raised Rs. 164,000.00 Total Start-up Assets Rs. 396,000.00 Planned Investment Hemant Arora Rs. 200,000.00 Harshawardhan Datye Rs. 200,000.00 Investor 1 Rs. 100,000.00 Investor 2 Rs. 100,000.00 Investor 3 Rs. 100,000.00 Total Planned Investment Rs. 700,000.00 Loss at Start-up (Start-up Expenses) Rs. 536,000.00 Total Capital Rs. 1,64,000.00
  34. 34. Establishing a Food Joint in Pune 34 Exe-MBA (2008-11) 6.2 Sales Forecast: The following sales graph is based on first year start-up estimates only. We anticipate that the business will not be at full operating capacity until the sixth month of operations. This is due to the competitive nature of the market and existing customer loyalty. Although we hope to do catering for local businesses, offices and functions with time, we will insist on payment at delivery - we will not sell on credit. Sales Forecast Sales Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Sales Food/Beverages 475,000.00 520,000.00 560,000.00 600,000.00 Catering 25,000.00 30,000.00 40,000.00 50,000.00 Other 0 0 0 0 Total Sales Rs. 500,000 Rs. 550,000 Rs. 600,000 Rs. 650,000 Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Total Cost of Sales: Food/Beverages/Catering Rs. 175,000 Rs. 192,500 Rs. 210,000 Rs. 227,500 Other 0 0 0 0 Subtotal Direct Cost of Sales Rs. 175,000 Rs. 192,500 Rs. 210,000 Rs. 227,500 6.3 Break Even Analysis: For our First Year Break-Even Analysis, we have an average running fixed costs of Rs.2,10,000/- per quarter which includes our full payroll, rent, and utilities, and an estimation of other running costs. Direct cost of goods at 35% of sales, our monthly break-even point is $92,081. We will surpass our break-even point in 13th month from the start up. Rs. 0 Rs. 200,000 Rs. 400,000 Rs. 600,000 Rs. 800,000 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Sales Net Profit
  35. 35. Establishing a Food Joint in Pune 35 Exe-MBA (2008-11) 6.4 Projected Profit & Loss: The most important assumption in the Projected Profit and Loss statement is the gross margin. The transition shows Just Punjab managing through its start-up period, and gaining efficiency and customer loyalty. In summary, Just Punjab will develop its customer base and reputation and the growth will pick up more rapidly towards the second and third years of business. Pro Forma Profit and Loss Component Quarter 1 Quarter 2 Quarter 3 Quarter 4 Sales Rs. 500,000 Rs. 550,000 Rs. 600,000 Rs. 650,000 Direct Cost of Sales Rs. 175,000 Rs. 192,500 Rs. 210,000 Rs. 227,500 Total Cost of Sales Rs. 175,000 Rs. 192,500 Rs. 210,000 Rs. 227,500 Gross Margin Rs. 325,000 Rs. 357,500 Rs. 390,000 Rs. 422,500 Gross Margin % 65.00% 65.00% 65.00% 65.00% Expenses Payroll Rs. 100,000 Rs. 110,000 Rs. 120,000 Rs. 150,000 Marketing/Promotion/Offers Rs. 5,000 Rs. 5,500 Rs. 6,000 Rs. 6,500 Rent Rs. 80,000 Rs. 80,000 Rs. 80,000 Rs. 80,000 Utilities Rs. 25,000 Rs. 25,000 Rs. 25,000 Rs. 25,000 Total Operating Expenses Rs. 210,000 Rs. 220,500 Rs. 231,000 Rs. 261,500 Profit Before Interest and Taxes Rs. 115,000 Rs. 137,000 Rs. 159,000 Rs. 161,000 Taxes Rs. 114,400 Net Profit Rs. 457,600 Net Profit/Sales 19.90% Rs. 0 Rs. 200,000 Rs. 400,000 Rs. 600,000 Rs. 800,000 Rs. 1,000,000 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Break Even Net Profit
  36. 36. Establishing a Food Joint in Pune 36 Exe-MBA (2008-11) 6.5 Projected Cash Flow: The cash flow depends on the sales forecast. We have no sales on credit, so our cash flow does not track accounts receivable. Our projected same-day collection is critical, and is reasonable and customary in the Fast Food Industry. Cash Received Quarter 1 Quarter 2 Quarter 3 Quarter 4 Cash from Operations Cash Sales Rs. 500,000 Rs. 550,000 Rs. 600,000 Rs. 650,000 Subtotal Cash Received - Operations Rs. 500,000 Rs. 550,000 Rs. 600,000 Rs. 650,000 Expenditures Expenditures from Operations Salaries Rs. 100,000 Rs. 110,000 Rs. 120,000 Rs. 150,000 Rent Rs. 80,000 Rs. 80,000 Rs. 80,000 Rs. 80,000 Food Preparation Cost (35% of sales) Rs. 175,000 Rs. 192,500 Rs. 210,000 Rs. 227,500 GAS/Water/Electricity Rs. 25,000 Rs. 25,000 Rs. 25,000 Rs. 25,000 Marketing/Promotion/Offers Rs. 5,000 Rs. 5,500 Rs. 6,000 Rs. 6,500 Subtotal Cash Spent Rs. 385,000 Rs. 413,000 Rs. 441,000 Rs. 489,000 Net Cash Flow Rs. 115,000 Rs. 137,000 Rs. 159,000 Rs. 161,000 Cash Balance Rs. 279,000 Rs. 301,000 Rs. 323,000 Rs. 325,000 6.6 Legal Structure: Hemant and Harshwardhan would be the part owner of the business with Harsh owning 35% and Hemant owning 65%. Investors are agreed to provide capital on following terms and conditions: Each investor will be shared with 5% of the profit at the end of every consecutive second financial year from the startup date Owners can offer a payback to investors. Such payback would be in lump sum amount with 25% annual return on their investment at any point after 4 years from the startup date. This will not forfeit the first condition of profit sharing In case of any expansions plans, owners should seek permission from the investors to invest the profit into the expansions plans. Such investments will carry a return on the basis of expansion plans
  37. 37. Establishing a Food Joint in Pune 37 Exe-MBA (2008-11) No investor can claim the return/investment amount before the period of 3 years from the startup date 50% of the amount received from the non-cash and cash assets (after deducting debt if any) will be distributed among the investors if in case start project does not give return and get closed with losses None of the partner can exit the business before the period of 3 years from the startup date If in case any partner wants to exit after 3 years, he can do the same and he will be offered 10% annual return on investments only on the discretion of other partner 7. SWOT ANALYSIS Recognizing Just Pnnjab‟s weaknesses as well as its strengths will help us to be more objective about its present value and the future potential. An exhaustive analysis of the venture resulted in following Strength, Weakness, Opportunities and Threat for the company. Strength: 1. Menu with cultural fusion 2. Health oriented menu/Heart friendly food 3. Focus on cleanliness 4. Modern and young design/layout 5. Cost Control/ Project Management expertise 6. Thorough research based business plan Weaknesses: 1. Lack of expertise in this line of business 2. New Player in the market Opportunities: 1. Developing market 2. Opportunity to launch another food service in future 3. Attracting unorganized & Organized food joints‟ customers‟ to Just Punjab 4. Industry and market growth Threat: 1. Threats from competitors, if incase they start offering same menu 2. Change in regulations in regards with food license. 3. Cultural conflict
  38. 38. Establishing a Food Joint in Pune 38 Exe-MBA (2008-11) 8. RISK ANALYSIS We also want to list down some of the risk factors involved while venturing into food business in the form of questions and answers: Q1: How can we be sure that capital is enough for the start up? Answer: We tried to prepare the financial plan keeping worst case business scenario: Sales forecast is kept as low as Rs.5,00,000/- in the first quarter Took the buffer in salaries for the staff with an increasing trend of 10% per quarter in case we face a staff crunch. The target is to keep food cost at 35% and salaries at maximum 15% of the sales; however in the projected P&L statement we have considered salaries as 20% of sales which again gives a buffer of 5% in salaries. Q2: How do we confirm that our Funding Requirement is sufficient? Answer: We have raised an additional cash of Rs.1,64,000/- after considering 4 months salaries, rent, etc in the expenses that again gives a buffer of approximately 20% of the total investment. Q3: What will be the mechanism to handle cultural conflict if any, as one of the owners belongs to Delhi? Answer: One of the investors and owners are based in Pune since birth. These two will take care of all such situations and also handle all the legal and license issues. Q4: What will be the basis of purchase of raw material, as we have no idea what customer prefers in the first 2-3 months? Answer: We will be buying the vegetables from local Mandai situated at 1 km distance from Just Punjab. We will also have a tracking mechanism in place wherein we can check the ration consumption every week and month to forecast the same for next week/month. We will also see the market trend before purchasing vegetables and rationing items. First month would be crucial for us to run a test on the same and provide a guide for future.
  39. 39. Establishing a Food Joint in Pune 39 Exe-MBA (2008-11) 9. CONCLUSIONS AND RECOMMENDATIONS 9.1 Conclusion: Just Punjab is will be a solution to the ever-increasing needs of the customers. There has been no effort by any player in the proposed space of Quality consistency, Healthy food and cleanliness. This pitch to the customers would result in establishing Just Punjab as a unique player in unorganized food sector. Management team behind the venture has high degree of passion; though they might not have much experience in food business. The team strongly believes on making any dream, a reality. Each member has the strongest desire to succeed and contribute his bit. At the end of the day, every food joint selling fast food in this area is a Just Punjab competitor, because we all compete for the same category of the products. However, there are two segments of this industry that are our main competition: the casual restaurant and the fine value restaurant. So, if the food and service is better at a fine value restaurant than a casual restaurant, but price has become a factor as a result of the economic turns, where is a customer more likely to go? There is no absolute answer to the question, but the if we talk about Pune and refer our market research data, the solution is to deliver the best food at the best price with the highest level of service in one establishment. This is the very definition of value and the concept at the heart of Just Punjab‟s business model. 9.2 Recommendation: We are targeting at a market which is surrounded by young students and working professionals. This segment definitely likes trendy designs and does not like late service. We need to be very loud when it comes to quick service and layout/design of our food joint. The design of food joint should spell the definition of youngistan. Most of the customers give prefer visiting food joints which are close to their offices/home or college. Location of Just Punjab should be exposed to all such places. People still prefer traditional breakfast for regular consumption. Hence we need to incorporate those items in our menu in order to attract such customers on regular basis.
  40. 40. Establishing a Food Joint in Pune 40 Exe-MBA (2008-11) Most of the customers who eat at such joints do not mind getting late or bad service. They still visit the same place if it offers a great taste and value for money. Consistency in Quality is more important than service or other areas. Most of the customers visit such joints in groups. Mouth publicity plays a major role in marketing of food joint and there‟s no cost to this except keeping the quality of the food at customers‟ satisfaction level. Food Joint business witnesses a high percentage of loyal customers. We need to live up to our commitment to maintain our promise and loyal customers‟ percentage will only go higher. Maggi/Pasta is one of the demands which are hardly offered by any food joint in Sadashivpeth/Navipeth or Karve Road area. This can be included in the menu as it seems to be an unfulfilled demand of the customer. Especially girls prefer having Maggi/Pasta as brunch. Just Punjab should price its menu in such a way that 2-3 items are offered with a price of below Rs.10/- each so that customers can have snacks and a cup of tea with a price of Rs.15/-. Indian food service market is dominated by global players, especially in the organized fast food segment. Though the Indian consumers have been eating at roadside eateries and dhabas and stalls which still occupy a major share of the unorganized sector. The objective of “Just Punjab” should be to eye on this unorganized sector by providing them a value for money deal.
  41. 41. Establishing a Food Joint in Pune 41 Exe-MBA (2008-11) 10. ANNEXURES Questionnaires prepared for survey is attached below: Name: …………………………… Age: ………… Contact: ……………………………. You are a) Student b) working professional c) both 1. How much do you spend on daily fast food/snacks at food joints/outlets (excluding lunch and dinner? a) Rs. 10-25/- b) Rs. 26-50/- c) Rs. 51-75- d) More than Rs. 75 2. I spend most of the above quoted money for__________ a) Morning break fast b) Afternoon snacks c) Evening tea and snacks 3. Please mention the income group you belong to (Students can mention their pocket money) a) Below Rs.5000/- b) 5000/- to 10000/- c) 10000/- to 25000/- d) 25000/- to 35000/- e) 35000/- and above 4. Your age group?(enter „M‟ for male, and „F‟ for female) a) Up to 18 b) Between 18 and 30 c) Between 30 and 50 d) Over 50 5. I usually come here: a) Alone b) In a group of two c) In a group of three d) In a group of three or more
  42. 42. Establishing a Food Joint in Pune 42 Exe-MBA (2008-11) 6. How often do you come here: a) Once a month b) Once a week c) Twice a week d) Almost daily e) Twice a day 7. How far do you live from this place? a) Less than a kilometer b) 1 to 2 kilometer c) 2-3 kilometer d) more than 3 kilometer 8. Select the preferences for your regular breakfast (mention 1,2,3 in any of the three below): a) Poha b) Milk with oats c) Stuffed paratha d) Vada Pav e) Idli sambar f) Medu vada sambar g) Dosa h) Puri-Sabji i) Fruits j) Chhole/Rajma rice k) Bread-Butter/Sandwich l) Maggi/Pasta 9. Select your preferences of what drink do you have with your regular breakfast: a) Chai b) Coffee c) Cold-drink d) Chhaachh e) Namkeen Punjabi Lassi f) Milk g) Black/Green/lemon Tea h) Juice 10. Your preference for the food joint is due to:
  43. 43. Establishing a Food Joint in Pune 43 Exe-MBA (2008-11) a) Convenience b) Price c) Taste d) Other (please specify) 11. You often have a heavy breakfast and skip your lunch? a) Yes b) No c) Sometimes( please mention how many times a week) : 12. What will be your preferences for a heavy breakfast if you plan to skip lunch: a) Dosa b) Medu wada/Idli sambar c) Puri-sabji d) Pulao e) Chhole/Rajma-Rice f) Stuffed Paratha g) Maggi/Pasta h) Vada Pav i) Poha 13. You would rather go to a place where you are offered worst service with super taste than good service with okay taste: a) Yes, service is not important for me in a low cost food joint b) No, service plays a key role 14. What do you usually have as evening beverage? a) Tea/ Coffee b) Soft drink- Coke, Pepsi etc c) Cold Coffee 15. Select your preferences for evening beverage (mention 1,2,3 in any of the three below): a) Tea c) Soft Drink e) Lassi b) Coffee d) Cold Coffee f) Juice
  44. 44. Establishing a Food Joint in Pune 44 Exe-MBA (2008-11) 11. BIBLIOGRAPHY Books: The High Performance Entrepreneur by Subroto Bagchi Websites: http://www.ibef.org : Indian Brand Equity Foundation http://www.mckinsey.com http://www.ey.com/IN: Ernst & Young http://nrai.org http://commerce.nic.In/ www.tie.org Hemant Arora Contact: +919823717607 You can drop your feedback at hemantarora44@gmail.com

×