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SoftwareBusiness BusinessPlan For Food Industry
SoftwareBusiness BusinessPlan For Food Industry
Group # 5
TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................. 3
1. INTRODUCTION ....................................................................... 4
2. BUSINESS IDEA....................................................................... 5
4.2. Figures................................................................................................ 17
5. ORGANIZATION ......................................................................20
6. RISKS ......................................................................................22
REFERENCES ...............................................................................26
3
EXECUTIVE SUMMARY
Our main business idea is to provide a service based application for users and the
main idea is to create a food ordering application for mobile phones, tablets and
other smart devices and which will also be useable through laptops, notebooks and
personal home computers by using the internet and location based services using
GPS (Global positioning systems). This application will allow customers to order
food easily and quickly from various restaurants from the user defined location
and will contain the list of names, menus, services, pricelist and the restaurant lo-
cations, users would be able to either order a food delivery if restaurant itself does
provide this possibility for home delivery or go and pick it up by themselves from
the restaurant. All types of most common payment methods will be supported by
the app, such as credit cards and e-bank. This whole as a service will allow users
to order food from local restaurants within their reach easily with a push of a button
on the app.
We have performed an initial research and an initial market study on the internet
that depicts that there aren’t many substitutes or competitors in this particular ser-
vice so there exist a good market segment, good number of potential customers
and we do have a good differentiation strategy for our services offered by the app
that are further explained later in the plan. For the revenue models we have planned
to use software pricing strategy and pay per use model and we do have a good
financing plan that supports our business plan.
The main area which need good efforts from our team would be marketing and
development of the app so our management team would mainly consist of people
who are experienced in terms of marketing, finance and software industry. We do
have a good analysis of the risks involved in the plan and main focus would be the
customer’s feedback, revenue and financing needed to runt eh business effectively.
In the end we have clear alterative exit plans for the effective business needs in
terms of operations of the company and revenue generated from the services we
plan to offer.
4
1. INTRODUCTION
This report describes in detail our business idea that is Food ordering app and some
extra features, potential customers, targeted market and risks involved in it. The
main idea is to create a food ordering app for smartphones which allows the user
to order food from local restaurants easily with a push of a button. The first part
of our report is focused on explaining the main idea behind our business plan and
creating a whole and clear picture of our idea, what are the leading features and
what is our main focus, which is customer satisfaction.
In the second section we have discussed our marketing strategies further in detail
that are needed essentially for this sort of business plan to become successful. In
modern days the social media and spreading any word thorough it is a very pow-
erful ally or enemy so marketing is one of the key components needed for the suc-
cessful implementation of our business plan. We have also provided in depth-anal-
ysis of the current competition in the field and potential rivalries. We have ex-
plained that our product will be superior over those existing competitors and there-
fore have substantially large potential for success on the markets.
The third section focuses on the most important part for venture capitals the reve-
nue models. We have provided comprehensive analysis on why our revenue model
is suitable in these sort of business and in this situation and how our venture ben-
efits from it. The advantages and disadvantages of our revenue model compared to
other models are provided in detail with the help of clear examples.
In the fourth section we have mentioned our planned management team and or-
ganisational structure. A detailed list of work force needed to operate our venture
efficiently is provided along with calculations to support these estimates. In the
fifth section we address the matter of risks involved in our business idea and how
we are prepared for them. We also discuss how the risks can be minimized or even
eliminated completely.
Last but not the least our final section consists of detailed analysis of our exit strat-
egy. This will involve real life example of how our business will be made profita-
ble for both ourselves and more importantly, for the venture capitals that have in-
vested in our venture. This section will also include solid arguments why invest-
ment in our venture is a remarkable opportunity backed up by consistent data.
5
2. BUSINESS IDEA
Our business idea is a food ordering application for mobile phones, tablets and it
can also be used through laptops and PCs with the help of internet connection. This
food ordering application will allow customers to order food easily and quickly
from various restaurants all over the country. They can either order a food delivery
if restaurant does provide this possibility for delivery or go and pick it up by them-
selves from the restaurant. There won’t be any need to go through multiple web-
sites to check the food offerings of different restaurants because all the needed
information is integrated into one food ordering application that will serve as a
platform offering services. Customers will save a lot of time and effort. Through
this application customer also have the opportunity to directly pay for the food and
delivery just by tapping a button in the application confidentially and safely. All
types of payment methods will be supported, such as credit cards and e-banking
payment systems.
A graphical user interface will be constructed in a way that the customer feels
comfortable using the application and therefore continues to use it in the long run
after the first use and becomes familiar with most of the features. An easy to use
and self-explaining user interface will be developed to reach this goal. New cus-
tomer surface allows the restaurants involved to increase their sales and also is
good platform to give special offers the customers using the application. User
friendly graphical interface brings in a lot of application users, which in turn cre-
ates wide customer base for the restaurants. Because of this the application attracts
other restaurants that are not yet involved. This domino effect ensures that custom-
ers using the app have variety of restaurants to choose from and the restaurants
will have the opportunity to reach wide customer base easily and aim for increased
sales and effective marketing.
Because of the payment feature in the app, money and transactions are involved
on daily basis. This creates huge demand for efficient customer support, which will
be one of the cornerstones of the service. Customers can send feedback directly
from the application to the developers concerning software malfunction. It can be
for example failure in money transaction or feedback about restaurants (e.g. deals
not what promised). Also the overall experience about the service/application can
be submitted through a feedback.
6
We also want to endorse customers to submit reviews of the restaurants so that the
other customers can choose restaurants based on customer feedbacks and ratings.
There will be a rewarding system implemented for these reviews for the users.
When customers are active for submitting reviews of restaurants (other users can
give likes/dislikes), they can get special offers which can be used to any restaurant
they want. This will encourage the users to use application more actively when
they notice that they will receive nice benefits back when giving feedbacks.
The social media is more popular than ever. The adult users of social media in the
US have gone up 800% in eight years (Forbes, 7.1.2015). Therefore social media
will be fully integrated to the application allowing the users to share their experi-
ences about the services and restaurants with their social circle easily. This feature
will allow the restaurants to get publicity outside the applications users since the
shared experience will be shown also to those not using the application yet. The
service will be even more attractive for restaurants to use.
All registered restaurants in one application just only as far as few clicks. No more
need to spend time on researching several restaurant’s homepages for food order-
ing. Through this application customer feedbacks and ratings can be easily re-
viewed and a decision made if the restaurant is worth of trying. All needed infor-
mation in one place, and on the top customer can also check the estimated delivery
time directly from the app when an order have been submitted. Good food at cus-
tomers’ fingertips and on the top, they save money by getting the best deals.
Table 1 below explains how the service would be provided for service providers
and what are the main benefits from the customers’ point of view. There are three
different account service levels provided for restaurants that are Basic, Pro and
Super accounts.
7
Table 1. Service structure from the service provider’s point of view and benefits for
customers
Basic Possibility to get free market space Customers can directly see through one
and provide up to date information app various types of restaurants located
of the restaurant. nearby. All restaurants can be sorted by
type, location, rating, opening hours and
Information that restaurant can add: pricing. Through all restaurants’ so
1. Restaurant description called profiles, can be seen accurate
2. Location in a map waiting and/or delivery time that will be
3. Opening hours updated by the restaurant every hour.
4. Contact information Based on this customers can also decide
5. Waiting time (if eating in or if choosing that specific restaurant or
taking out, how much time not.
does it take for the restau-
rant to serve the food) Customers will be rewarded when giv-
6. Delivery time (if food deliv- ing feedbacks and ratings through the
ery ordered,, how much app. When enough rewards are gath-
time it will take) ered, they will get bonuses to their ac-
7. Homepage count which can be used for discounts
8. Social media pages when ordering food through the appli-
9. Menu & price list cation.
Pro With this account level restaurant No need for customers to contact res-
will offer the possibility to order taurant via other connections. Applica-
food for takeaway and/or home de- tions will provide intuitive and user
livery. This will also include the friendly user interface for food order-
possibility for customers to do table ing. With just few clicks food order will
reservations. For table reservations be submitted to the restaurant. Ordering
also pre food ordering can be made requires customers to create an account
if wanted, not required. No pay- (no fees included) for the service. Ac-
ment submissions via app provided. count is required to identify the person
to be a real person and that he/she can
be contacted by the restaurant in any
concerns. When restaurant has received
the order, they will confirm it and up-
date the latest waiting/delivery time
with that confirmation.
Su- Super account includes all the ser- When forwarding orders through the
per vices provided in Pro account. In app customers has the possibility to also
addition to this, Super account of- submit the payment directly through the
fers the possibility to submit pay- application so later they don’t need to
ments through the application with think for the payments when picking up
all the payments types (credit card, or receiving the food.
e-bank, klarna).
9
Substitutes that can be found and discovered are restaurant’s own home pages and
food ordering by calling. These are the traditional ways to order food from a res-
taurant. Competitors that can be found are food ordering web pages that serve all
around the country. These are pizza-online.fi and eatit.fi which both have the same
owner. Also a restaurant application can be found from AppStore which is availa-
ble also through web browser that is eat.fi. These competitors are compared in the
table 2 below with SWOT-analysis to give better understanding how these services
work and what our software’s benefits when comparing to these are.
10
Strengths Bonus system provided for loyal All restaurant related information
customers provided through one app
Direct payment supported with Restaurants can be searched and
various payment types filtered by location, category, or
Delivery time estimation given rating
Follow up if 30 minutes response Mobile application provided
time for the food ordering from Restaurateurs get free marketing
the restaurant exceeded space and possibility to update
Users can create accounts for the their restaurant information for
service that will take track of the free
orders made and will save cus-
tomer information
Ratings available for customers
When comparing our food ordering application to these competitors the benefits
that our application will offer when comparing to these are the availability in Eng-
lish and Finnish. As the amount of foreign inhabitants are growing in Finland every
year, this service should be available also in English that will also give positive
impact to demand. As highlighted in the competitor comparison table there are
only two online food ordering places that are concentrated in pizza places which
has home delivery services. Our application would also provide the possibility for
other types of restaurants (e.g. Indian, Chinese) to add their information to the ap-
plication. These restaurants can be any that provide the possibility to order takea-
way. Restaurants can be filtered by category or searched by location and these
restaurants locations can be shown in a map if wanted or just view as a list with
ratings and latest feedbacks.
First of all our potential food ordering customers are all willing to eat something
from a restaurant. These can basically be students, workers in a hurry or looking
for a nice lunch place and even families who want to order pizza home delivery.
12
We can describe few different use cases to clarify how our potential market could
locate. First are busy people who don’t have time to waste. They are in hunger and
willing to just get something quickly on the way to the office from a client meeting,
they would just check the restaurants through the applications, add the preferred
location, compare the available restaurants, check the current estimated waiting
time and based on this choose the most appropriate one. After the decision, an
order needs to be submitted and payment if wanted. A confirmation message will
be received in a minute from the restaurant with the accurate time estimate based
on which the busy worker can schedule his visit in the restaurant to pick up the
food.
Other potential customer case would be a couple who are willing to eat out on a
Friday evening but they are having difficulties to decide where to go. This couple
will add the preferred location for the restaurant in the application and now when
they are looking more into fancier restaurant they will sort the located restaurants
by average price. But this is not still enough because they want to ensure that the
restaurant has received good feedback so they will filter the restaurants by ratings
also. Now they have a list of potential restaurants that meet their needs. They de-
cide to go with the Italian restaurant for tonight and they were lucky because the
application description of the restaurant says that they still take table reservations
for tonight. Just with few clicks also a table is reserved for them.
These customer cases gave quite broad perspective, how large scale of potential
customers this application could have. Our other potential market segment is all
different kinds of restaurants who are willing to advertise and provide their ser-
vices through the application. When they notice that users are getting more inter-
ested about the applications they would be more than willing to get their restaurant
visible also in the application. And this wouldn’t be a huge barrier to go through
the account creation as the prices will be set attractively for them.
This food ordering service will be based on a software that can be used either
through a web browser or mobile application (all browsers and operating systems
will be supported). A demo version of this software will be developed by internal
resources with no salary defined in the beginning. This development work will be
based on dedication for establishing a potential business in near future. With this
business plan and a demo version, this business idea will be tried to be sold fur-
ther for trying to seed findings for the company establishment and further devel-
opment. People who has devoted their time on developing this software and busi-
ness plan will be considered as founders and shareholders of the company.
We also see that when developing by ourselves, the maintenance would be easier
to handle and costs kept low. The user interface would be one of the very im-
portant objectives that would take most of the development efforts to get it pre-
cisely designed with a nice flavour. User experience would be showing a core
role in the development. Application has to be self-explanatory, easy to use and
intuitive.
For further development plans, if the application will be receiving interest widely
and demand is high enough to cover the costs, the restaurateurs account profile
features can be expanded so that they can personalize their own profiles. Kind of
having a social media platform for restaurants. Restaurateurs could give daily up-
dates of the menu or something else related to the restaurant activities in a status
update form if wanted. Users could start following restaurants and adding them
to favourites. Push notifications can be sent to users if the enable the notifica-
tions. This app can be also easily extended to cover other cities in Finland.
14
Pay – per use model is used a revenue model for our food ordering application. As
there no such application exists in the market, also many of the food restaurants
have not targeted the customer base which is not comes to their restaurants. To
convince the restaurants to use our application they can pay for the number of units
the application used for their specific restaurants i.e. number of orders made. This
will allow them to see their potential customers who not come to their restaurants
or unaware of the offerings the restaurants is making. The model also promotes the
network externalities effect, meaning that the increased number of buyers in-
creases knowledge of the product among potential customers, lowers customers’
search costs, and makes the product well known in the market.
Though the model has the disadvantage of the data security but as far as Tampere
is concerned there is not much competition among the restaurants So can be seen
as the advantage that restaurant can see which restaurants is providing the services
that will compliments there business. It will enhance customers as the restaurants
customers becomes their customers.
From the customer perspective, for smaller companies lacking a budget for the
kind of investments required by traditional software licensing, the pay-per-use
model is a good option. Customers can purchase the software without making spe-
cial budgeting arrangements or undertaking long decision-making processes.
Thus, the software usage resembles an operational cost rather than a capital invest-
ment.
15
The pay-per-use model also has advantages over other models if customers need
the software only occasionally, because this decreases costs and lessens the need
for customers to set up their own IT infrastructure. It’s easier to change vendors if
the software’s quality or functionality isn’t appropriate. Thus, in this model, it’s
possible to test and evaluate the software to see if it suits the company’s needs. It
also frees the customer from the need to install, maintain, and update the software,
and it lessens the need to have IT personnel.
Customers who use the software for their core business, the continued existence of
the cloud provider is vital. If a cloud provider disappears from the market, the
effect on the customer will be immediate and possibly catastrophic.
Dealing with any new product development brings uncertainty to the business,
thus, management of R&D project portfolio is needed in order to answer if com-
pany, first of all has necessary capabilities and resources, and secondly if it is going
to make good business for the company (Artto et al., 2011). Project portfolio man-
agement concentrates on applying certain knowledge, skills and tools in order to
match or to surpass requirements and opportunities of company’s investment
(Artto etal., 2011). The main goal project portfolio is to:
Develop cross-platform. Despite the buzz around one or two operating systems, it
is extremely effective to develop cross-platform app that supports OSes such as
Symbian and BlackBerry. In fact, we have found that these platforms have higher
CTRs, as users are not as “ad-blind” as iPhone or Android users. Generally speak-
ing, we have found that the early adopter tech community pays less attention to
ads than other types of users.
Create web and native apps. While native apps are often more robust and respon-
sive, Web apps using HTML5 can also yield a positive response from your audi-
ence. However, we have found that for games, the native model works better with
faster response times and an overall more robust experience
16
Enable sharing. Give users tools to easily share your app across their social plat-
forms. Add some integrated options to tweet or share the app on Facebook. This
will provide a very effective method of spreading the word about your app. Some
good examples of this are news and info apps that have an option to tweet the
article and the tweet then includes the name of the app.
Another option for the revenue model can be to opt for software pricing structure
that enables customers not to get committed for longer time period more detail
description is described as follows:
Advantages:
No need for customers to commit for a longer time period to make an investment
decision (if we don’t go with option 3). Customer would only need to pay a
monthly rental fee.
4.2. Figures
In this section we have included some figures about sales including amount of units
and the assumed revenues generated in return. We have compared the amount of
subscriptions with different options and analysed the profit keeping in mind the
interest rates also, and analysed in the graphs after the table.
10000
8000
Interest
6000
Revenues
4000 Total costs
2000
0
1 2 3 4 5 6 7 8 9 10 11 12
60
Ammount of subscriptions
50
40
30
Option 1
20 Option 2
Option 3
10
Option 4
0 Option 5
1 2 3 4 5 6 7 8 9 10 11 12
4.3. Financing
In the beginning at first when the company is set up there is some amount which
will be kept for the equity fund, so if the management of the company feels they
do not have enough funds to support the expenses they can use that or can get loan
against that equity .Our company will adopt seed financing we have the limited
partnership structure with the restaurants so it’s quite easy to follow. The growth
accelerators are formalized mentoring a network of contacts and in some cases
small amounts of financing. The company will try keep the performance active to
19
avoid significant upfront losses in the beginning. In case of huge losses in the be-
ginning it’s expected that this eliminates one of the biggest potential benefits of
the limited partnership structure. This is because there are no significant losses to
distribute and because the fund would have taken advantage of the losses pretty
quickly as their earlier exits started to be realized.
Tax Free Switching between Funds and Cross Fund Tax Deferral which has the
advantage that managers can set up multiple funds under one corporate structure
by using different classes of shares.
20
5. ORGANIZATION
This section will explain the roles for the individual team members in the company and
explanation of the management team also the main structure relate to the structure of the
company in terms of organization.
CEO - Chief Executive Of- responsible for the daily operations , support for the software de-
ficer velopment
The management team is still in the early stages of formation all of them give input for
business development. The rest of the personnel will be hired according to the need and
their work will be valued with salary payments, organizational structure and resource
allocation
Any additional hires will be part time and devoted to the expansion of any catering func-
tion, as well as increased capacity/operation of a private party function. An additional
manager will be hired to help CFO,CMO in maintaining and reviewing operations of the
21
restaurant consultancy and entertainment venue / bar. Mobile developer will be hired for
the application development. An assistant finance who will be a salaried employee will
provide regular table service as well as assistance to the manager and the finance manager.
Technical Team lead will perform software development management. The marketing,
and accounting function will be handled by independent contractors/consultant but all
will be monitored by CFO.The five full-time salaried employees which are technical and
have software experience will be hired at start-up. Part time software will have to be hired
to manage approximately 135 hours of operation per week, designers will have to be hired
for approximately 120 hours of operation per week. Any additional hires will be part time
and devoted to the expansion of any catering function, as well as increased capacity/op-
eration of a private party function.
22
6. RISKS
Although software business and especially mobile app business is booming at the
moment there is some serious risks involved. It doesn’t matter how ground break-
ing the idea is and how much potential it has, there’s still the risk of venture failing.
The popularity of mobile apps and the whirlpool of money surrounding app stores
make our business idea more appealing to breath into life but it also brings signif-
icant risk.
Nowadays people’s span of attention is decreasing due to the flash news, social
media feeds and the increase of smartphone usage and the need to check on it con-
stantly. This creates a certain mind-set for people: if the app or text you are reading
isn’t a blockbuster you must abandon it soon after the first try. Therefore the risk
of one using our app once and never touching it again is very significant. Making
the Graphical User Interface (GUI) very compelling can minimize the risk of user’s
interest towards our app falling but it cannot be completely eliminated. The GUI
must also be easy to use and can’t absolutely have any bugs or malfunctions: noth-
ing dispels potential users more effectively than a software malfunction or bug on
the first try of the app. considering this risk the medium of our software develop-
ment will be user-friendliness and easy-to-use interface. Also rigorous and thor-
ough testing will be performed to ensure the rich and positive user experience
throughout the lifespan of the app. Testing will be performed both among the de-
veloper team and also among potential users in beta testing phase to ensure that all
the malfunctions and bugs will be obliterated from the source code.
Another great risk comes with the revenue models. Although the pay-per-use
model is the most efficient and fitting and also has the lowest risk in this scenario,
it still bears some risks that need to be taken into consideration before starting the
business. The major risk in the pay-per-use model is the risk of poor popularity
and reputation of the app. Because all the revenue comes from the usage of the
app, not the acquisition of it, significant amount of active users is needed to ensure
the business ideas longevity and profitability. Minimizing this risk also involves
the user-friendliness of the app and efficient customer support. By making sure
users like to use the app we minimize the risk of them abandoning it. Also we must
make sure that the app is widely known among all the potential demographic re-
gions so that we acquire as large customer base as possible. The more people know
about our app the smaller the risk of it fading away right after the take-off.
23
One great risk that must be taken into consideration involves the restaurants. Situ-
ations may arise where customer is unhappy with restaurants products or service
and feels that it was also our app’s fault as much as the restaurant’s. Therefore we
must make ourselves separate from the restaurants so that customers don’t associ-
ate us to the bad customer experience they receive from the restaurants. The risk
of this happening is likely substantially insignificant but must be endorsed never
the less.
24
7. EXIT PLAN
This last section provides alternative exit plans depending on what situation may
occur and timeline for results in terms of facts and figures and as a measure for the
success factor to scale the investment, money and effort invested by the manage-
ment team and investors. The exit plans basically depends on the alternative situ-
ations we have planned depending on the maturity of the business and the scale
result on how successful or profitable it is at that particular stage. The two alterna-
tive exit strategies that can be the options in situations we have already planned
are defined as follows:
and the current value we get by dissolving can be divided on agreed terms between
the partners and stakeholders.
26
REFERENCES
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800-for-us-online-adults-in-just-8-years/2/ [Accessed on 28 DEC 2014].
Nielsen, 2015. Smartphone: So many apps, so much time. Media and Entertain-
ment, http://www.nielsen.com/us/en/insights/news/2014/smartphones-so-many-
apps--so-much-time.html [Accessed on : 08.01.2015].
https://www.fenwick.com/publications/Pages/Seed-Finance-Survey-2012.aspx
[Accessed on: 10.01.2015]