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- 1. Yums The Word LLC. Michael McDonald Lani “Lonnegan” Chang Jason Towers Missy Ling Tracie Wiegand
- 2. Agenda • The company • Different Focuses – Entrepreuneurship – Management and Operations – Marketing Strategy – Financial Planning • Client Challenges • Client Relationship • Team Dynamics • Concluding Thoughts • Q&A and Feedback
- 3. A long time ago… • Small Business Strategy and Entrepreneurship • Professor Stephen Heiner • A “how to” class
- 4. Yums the Word LLC • Stephen Heiner – Chief Executive Officer • Jessica Burke – Chief Operating Officer • Carl Werner – Chief Financial Officer
- 5. What is Yums the Word??! • KC’s Best Restaurants Annual Book – Set for release September 2012 • Tastes of the City Tours – KC BBQ driving tours • Walking food tours
- 6. What are Walking Food Tours? • Location based tours – Plaza – Brookside – Westport – 39th St. • Visit 5 locally owned Restaurants • Tour guide will lead the edible adventure
- 7. Our Roles • 4 Focuses – Entrepreneurship – Managerial – Marketing – Financial
- 8. Entrepreneurship KC Food Warriors
- 9. Mission Statement – Options/Recommendations – Final Statement – Foodie
- 10. Vision • Year 1 • Year 2 • Year 3
- 12. Industry & Competitor Dynamics – Market Size – Industry Profitability – Entry/Exit Barriers – Economies of Scale – Nature of Competition
- 13. Porter’s 5 Forces – Competition within the Industry – Threat of New Entrants – Competition from Substitutes – Bargaining Power of Suppliers – Bargaining Power of Customers
- 14. SWOT Analysis – Strengths – Weaknesses – Opportunities – Threats
- 16. Foodie Guidies • Responsible for time management • Communicator • Food Savvy • Customer service oriented
- 17. Chain of Command
- 18. Operations • Signature Dishes • Restaurant notification • Food and drink service
- 19. KCs Best Restaurant Tour Marketing Plan – DRAFT! March 29, 2012
- 20. Overview of 4 P’s
- 21. Product • Walk thru KC’s yummiest neighborhoods • Experience local restaurants first hand • Enjoy unique flavors like…
- 22. Price • $60 per person – Includes 5 restaurants (signature food and drinks) – Lasts 3 hours – 20 minutes per location + walk time • Recommend selling tickets through: – Participating restaurants – Website
- 23. Place • Selected 4 neighborhoods for launch – Brookside – 39th Street – Westport • Plaza
- 24. Promotion Target consumer • KC foodies • Baby boomers >$80K income
- 25. Recommendations • E-marketing (website and social media) • Traditional print media • Direct mail • Loyalty program • Guerrilla tactics
- 26. E-marketing • Redesign website • KC Best Restaurants Existing Website – Highlight tours (not currently mentioned on site) – Link to/from participating restaurant site – Add online ticket purchase – Write food blogs • Use excerpts from book (cross-promote) – Show clients having fun on tours using videos
- 27. Social Media (FREE!) • Actively engage in Social Media • Existing Facebook Page – No likes? • Micro-blog 2x a week via Twitter • Publish via YouTube videos and podcasts
- 28. Traditional Print Media/Direct Mail • Advertise in 435 South Magazine – 435 South Magazine Online • Direct Mail – Active living communities in KC – Quote for piece = $4.5K * * Source: Chris Gray, VP Zillner
- 29. Loyalty Program • Passport Program – Stamp KCs Best Restaurants book – Encourage repeat visits!
- 30. Guerrilla Tactics • Hand out fliers at: – Plaza and Brookside art fairs – Farmer's Markets – Max or Trolley cars – First Friday’s • Link to "what to do in KC" websites • Meet hotel concierges and leave fliers • Work with assisted living centers • Recommend to local businesses
- 31. Restaurants • Westport • Brookside • Plaza • 39th Street
- 32. Finance • Gathered average item prices • Calculated costs for 5-20 People • Calculated average gross profit for $40 and $60 price points • Built Excel Finance Model
- 33. Food Prices • Searched menus & made judgment calls • Selected appropriate items • Averaged item prices for each region
- 34. Challenges • What will the restaurants offer? (Happy Hours, etc.) • How often will the tours run? • At what person level is the tour profitable? • How can we keep prices similar across the regions?
- 35. Gross Profit • Calculate food prices for 5-20 people • Factor in tips, liquor, tour guide, etc.
- 36. Finance Model
- 37. Finance Model
- 38. Results • Profitable at a lower participation rate (more people the better) • Variation in regional profits
- 40. • Missed initial start date • Lack of resources • Lack of Focus • Lack of Experience
- 41. Client Relationship • Defining our role • Outlining expectations • Providing constructive criticism • Maintaining a learning environment
- 42. Team Organization & Dynamics • It all began in Compass… – June 2011 (only 11 months ago!)
- 43. Team Formation • Worked together on prior project teams • Built trust through solid performance • Developed strong relationships • Sat together in Capstone then…
- 45. Team Challenges • Bit off more than we could chew • Different opinions on deliverables • Scheduling conflicts
- 46. Resolution?
- 47. Our team is legend… WAIT FOR IT… (hope you aren’t lactose-intolerant) DARY!
- 48. Concluding Thoughts • Insight on working in a start-up company • Expanded skill sets by leaving comfort zone • Drew upon prior classes to develop results • as an effective team
Editor's Notes
- … in a galaxy far, far, away… -January of 2012, Tracie, Missy, and I -Professor Stephen Heiner introduced us to the very real and feasible idea of starting our own businesses. -A how to be an Entrepreneur class focused on what it takes to start your own business -Heiner and Mark Cuban -Mark Cuban is the outspoken owner of the World Champion Dallas Mavericks and multi-billion dollar venture capitalists who has helped start hundreds of companies. A guru in the field of SBS/E
- The company we are working with is a start-up working under the title of Yums the Word. The company is a legitimate start from scratch effort and here are the mad scientists behind it all. Stephen Heiner as briefly introduced earlier was not only our professor but is also the successful owner and operator of two business’s with this being his third. True Restoration Press - Publishing company Get Smarter Prep prepares students for college by tutoring them for the ACT/ SAT etc. Did his MBA at both Rockhurst University and SLU Jessica Burke – COO switched to our main contact for the company part way through as her division of the company was more directly related with the work we were doing. Carl Werner – CFO. Didn’t work too much with us directly. -The three of them are the only employees of Yums the Word.
- -They have three different sctions with the company. -The Book will be released and updated annually to highlight the best local restaurants around the city. The Tastes of the City tours will be longer tours where the customers would be driven around via trolley and shown the best BBQ restaurants KC has to offer. The walking food tours would be location based walking tours where a tour guide would take you to the best restaurants in a small geographical area
- -The idea is that these food tours would highlight the best a given area has to offer as far as food goes. The locations we choose to highlight and recommended starting with include the Plaza, Brookside, Westport, and 39 th St. Some other locations that may be highlighted later as the business grows include places such as; Parkville, Mission Farm, Crossroads, Waldo and more! -Each tour would consist of anywhere from 5-20 customers following a knowledgeable tourguide to 5 to 6 different locations in a particular area. Each stop would be approx. 30 minutes and at each stop every customer would receive a small taste and drink that accurately represents what the restaurant is known for.
- After working with the client and understanding what the business is about, we broke down the different areas of focus they would like us to provide recommendations for. The areas are listed here and we will break each one down for you more in depth starting with Tracie and she will speak about the Entrepreuner tasks.
- KC's Best Restaurants: To raise awareness of locally-owned restaurants through publishing an annual guide. We focus on localism, sustainability, and a fostering of a uniquely Kansas City-centric food culture. KC's Best Food Tours: To provide an experience of enjoying food and drink with new friends while taking a walking tour of a group of local restaurants. KC's Best Taste of the City Tours: To provide both the new visitor and the seasoned local with new views and insights into our beloved city by touring and tasting our best. Yums The Word: Shining a light on the best of Kansas City. *Foodie – A person who has an ardent or refined interest in food; a person having an enthusiastic interest in the preparation and consumption of good food.
- 1 Year – Expand tours into 4 new areas; 40 tours/week (client expectation) 3 Years – Expand the tours into new verticals, including the KC Culinary Institute 5 Years – Expand the business into other cities, including St. Louis MO
- Market size (client’s key customers and potential revenue) o 2010 Census put KCMO population at just over 2 million o Baby boomers >80k income o Kansascity.com – 78 million baby boomers born between 1946 – 1964 o US Census 2010 – 13.2% of the KC population is baby boomers o Studies show that Americans are spending more money eating out than at home o Forbes.com – “Today, we spend an average 13.3% of our budgets on food – but 42% of that money is spent is restaurants.” o Because eating out is a growing trend in society, it isn’t unreasonable to assume that consumers are going to be looking for new restaurants and places in their city just to try something new. This is something that consumers here need/want and are willing to pay for · Industry profitability o Food Services and Consumer Products are listed in the top 20 most profitable industries according to CNN Money · Entry/exit barriers o Startup costs o Restaurant support · Capital requirements o Get from Jason & Missy · Economies of scale o To achieve, KC’s Best will have to on-board new restaurants to participate, which will in turn, drive consumer participation up and in the long run, driving the company’s costs and expenses down · What is the nature of this competition in terms of issues of cost, differentiation, and focus/niche strategies? o Cost – When competition enters the market, KC’s Best should have enough of a following that they can lower ticket prices if need be to cut out competitors that try to compete on price. Another option would be to raise ticket prices, which can make the consumer think that the tour/experience is better for the difference in costs o Differentiation – something of this magnitude has never been done in Kansas City before. This focus/niche will create something new for area natives to do in their free time
- Competition within the industry – none so far; Blue Ocean · Threat of New Entrants – Competition will come into the market after seeing how KC’s Best does it first; they will use 2 nd mover advantage to learn the mistakes that KC’s Best made and avoid any big pitfalls · Competition from Substitutes – Consumers may believe that they can experience these restaurants on their own time and not need to pay for the tour. If they are going out to eat anyway, they can look at the tour listings and go there on their own. · Bargaining Power of Suppliers – Restaurants have to be convinced that they need something like this in order to participate; can drive up the price to bring a tour there · Bargaining Power of Customers – Customers from Kansas City will need to be marketed to in a way that shows them that they want to experience KC in a new way
- Strengths (internal) – Blue Ocean Strategy – no one is in the Kansas City market implementing this yet · Weaknesses (internal) – The company isn’t established; no real marketing has happened to create the buzz · Opportunities (external) – Opportunities are situations arising in the external environment where the firm can potentially realize change which is in the organization’s best interests. KC’s Best can grow this and connect it to other Kansas City verticals, such as the Culinary Institute to satisfy the target consumer · Threats (external) – A threat is any unfavorable situation in the organization’s external environment that is potentially damaging to the organizations mission. After the first season, competitors will emerge and try to gain market share. Starting this business will cause the business environment to change
- Review my checklist for job description and contract for tour guides including pay and duties I am using basic job descriptions of tour guides, food tour guides, and various other guides to compile the job descriptions that might be useful for Yums the Word Food Tour. This compilation will be a useful starting point when beginning the hiring process because it will be a basis for the type of person that should be the leader. Tourguideemployment.com defines a tour guide as “[someone who is] responsible for leading travelers on tours. They may lead individuals or groups. They may go for yours less than a day or greater than a day. The tours may be completely planned our ahead of time, or they may be more flexible. Tour guides are usually employed by companies, but some work alone.” Although this does not completely apply to Yum’s the word, it has provided important insight on the people who should be hired People who are easy-going, communicate with ease, and can clearly lead a large (or small) group of people during the tour Communication is essential because they will have to not only interact with the people on the tour, but also communicate clear and precise directions and communicate with the servers and managers at each location Communication will also create a better experience for these “foodies” and experiences are what will keep these customers coming back. It will also create relationships with each of the restaurants and might be beneficial in the future if these tours are successful People who are educated in the culinary world. Many “foodies” want to know specifics about food such as: what ingredients are, other dishes they are in, how they were prepared, etc. Having an educated tour guide in the culinary world will also enhance the experience of the “foodies.” Since this is a food tour, it will be important to be able to answer questions these foodies will have. People who can handle unexpected circumstances and not get flustered. As with everything else in life, nothing goes exactly as planned and therefore the tour guide should be comfortable handling changes and making accommodations. Some things to consider are Late “foodies”: how will they be accommodated, will they still be served? Problems with the food: hair, under/overcooked, food allergies, etc. How to handle an unprepared restaurant: there aren’t enough tables, chairs, food, or the restaurant is unusually busy. How will this affect the food tour, if at all? In the effect that the foodies are late to a restaurant, how will the food tour guide accommodate for this? How will Yums the word accommodate for this Tour guide needs customer service skills and ensure that their experience is the best that it can be in order to ensure repeat business for the tour and resaurant. Know tour guidelines to ensure the foodies act in a respectful manner Distribute the brochures or other forms of documentation that will be printed and available for the tour guides Be able to provide clear and precise directions, possible a map so in case a foodie gets behind or lost, they will know where to go Create the easiest and more efficient routes between restaurants
- Under the COO- -Foodie Managers should ensure that each tour is properly organized with the exact amount of people signed up to give to the food guides. The foodie guides will create the walking maps, the timing and order or each restaurant etc. Once the foodie manager knows all of the details about the tour, he/she will turn in the costs to the CFO who will look over everything and make sure that the company is still creating a profit. Both the COO and CFO will report to the CEO, Mr. Heiner, who will make sure that the company is still operating the way that he has envisioned and make the business decisions based on the reports he is given from the COO and CFO.
- Create and/or approve the list "best dishes" at each restaurant that will be on the menu for the food tour These dishes are outlined on the financial piece of this presentation. These dishes should be the “signature” dishes of each restaurant Also, something to consider is that some local restaurants might want to try out new dishes, these food tours could be a great opportunity for restaurants to try these out on paying customers and receive their feedback. This idea should be conveyed to the restaurant in the initial phone conversation. Create a chain of command See Chart Decide if there will be two different prices depending on the inclusion of alcohol in the case that minors will be a part of this ID’s should be checked by the food tour guide as well as the restaurant. Restaurants are required by law to check ID’s but Yums the Word should also take some responsibility on this issue and check ID’s as well Determine how many days in advance the restaurant needs us to let them know how many people have signed up and what the minimum amount of people has to be in order for the food tour to actually happen Preparing food requires planning and time and therefore knowing deadlines for restaurants regarding the number of foodie’s planning on attending, the amount of food required to feed them, and the amount of time required to properly prepare the food is something the restaurant should be aware of prior to the tour. (IT is better to be over prepared than under-prepared) What about happy hours and daily specials (how will this affect restaurant decisions and what days these tours will occur), who will this type of food be appealing to, food allergies This should be discussed between the CEO of Yums the Word and the manger of each restaurant. Also, this should be discussed each time the food tour visits a restaurant
- Topics: New restaurant openings or added to tours
- facility group outings as well as leave fliers for occupants)
- List out the restaurants that were chosen, and why we chose them. Brookside Avenues Carmens Bella Napoli Blue Grotto Julian Plaza Plaza III Blanc Bo Lings Classic Cup Eden Alley Cupcake a la Mode Westport Bluestem Korma Sutra Thai Place Beer Kitchen McCoys Westport Café 39th St Blue Koi D'Bronx Po's Room 39 Alladin Café Saigon 39
- Simply describe the actions taken to build the finance model.
- I went through each restaurant menu and chose the items that best represented that restaurant. I took the highest priced and lowest priced items and averaged them, and took the average of each region to represent the cost of food. The challenge here was picking a reasonable item. If you go to a steakhouse, hopefully they are not going to serve french fries or a random appetizer, but rather, they produce a sampler of their steaks. Unless they are absolutely famous for a particular item, it needs to be something unique from each restaurant. Side note- Plaza III has a pretty nice Happy Hour menu
- Initially set out to deliver 3-6-9 month projections- can’t do that when the tours only run 4 months YUM hadn’t ironed out the contracts with the restaurants yet, so we didn’t know what each restaurant is going to offer as their tour food. Some regions will be costlier than others. But who knows? Maybe Plaza III has an enticing deal for a tour like this and would really like the repeat customer. They might be willing to strike a deal with Yum to provide a low cost item to get the word out.
- I then took the average prices of the food and we figured out the gross profit for each region. We subtracted food, liquor, tips, and tour guide from the revenue received. I did this for 5-20 (5 was the lowest number of people they would allow for a tour, and 20 was the highest). There were challenges related to including fixed and variable costs into the Excel plan.
- This is the end result of the financial model.
- Granted what we have calculated for food is lower, but even at a low participation level, they can still turn a profit. Each region, however, is going to have higher or lower profits. That isn’t something that is going to change. The Plaza will always be more expensive than Westport. The trick will be determining at what participation level they want to run the tours and how often they want to run them. That’s up to them to decide.
- In order for these food tours to be successfully implemented in the Kansas City area, Yum’s the word will have to focus their dedication to this company in order to meet their deadline. One of the challenges that they have already encountered is their over aggressive start date that was originally set for May 1 st . Although May 1 st would have been a great start date since it is will give them an entire summer to make changes to the tours and give them the maximum amount of time to run these, there were various details in their business that were overlooked that could be detrimental to their vision.
- A lack of resources is a challenge for Yum’s the Word because there is very little start up capital to allocate to advertising, wages, and brochures. Although Yum’s the word has not gained much attention through their social media outlets like facebook and twitter. One of the ideas is to have a radio talk show that will create buzz about these tours. However, it will be important to chose a station with the right crowd that he is hoping to attract. Lack of focus is another challenge for Yum’s the word because the CEO of the company has several other profitable companies on his plate. Although this is a great idea and there are no other tours like this in the city, Yum’s the Word needs a lot of time and attention to create a following and be successful. If the CEO is unable to dedicate the time necessary to get this business off the ground, Yum’s the Word will not take off. There are several other cities where food tours are successful and it might be important for the CEO, COO, and CFO to take these tours and really scrutinize what is going on behind the scenes. Lack of experience is another challenge for Yum’s the Word since the chief officers have only participated in these tours and not actually run them. There is a lot of work that goes on behind the scenes regarding company-restaurant relationships, pricing strategies, and company organization that is not evident when going through the tours. -Examples: the idea arose out of a great experience, what contributed to the experience that can be copied in Kansas City? How much was the food tour guide in charge of and where was he/she during the time at each restaurant? What were some issues regarding pricing and customers dropping out at the last minute? These are things that can only be addressed with the proper experience.
- We really wanted this to be a good learning experience for all participants. Receiving a Jesuit education involves a high level of reflection and discernment. When we first began this project, there was some confusion over the role our team would play. We expected to act more as consultants to the company, not free labor. We had some miscommunication about the expectations and the timetable of our deliverables. We felt there was a natural progression to our work, and we wanted to deliver a high quality product, instead of having to rush to meet deliverables. Each team member approached this an opportunity to expand their horizons. We really wanted to avoid becoming mindless drones and really take something away from this project.
- -Learned a lot about what it takes to partake in a business start up as well as the stresses and chaos often involved. Furthermore, resources and expertises may be limited but can be overcome by being creative or innovative and workign hard. We got some real world application to what kind of tasks might be necessary for a business and we also had to work in areas that we didn’t necessarily have expertises in. We used several models and learnings from our prior classes to help develop accurate and useful results. We overcame difficult circumstances to work together succesful and harmoniously despite time conflicts and a sometimes difficult client.