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Entrepreneurship and New Venture Creation (ENTR 601) : Psda 3 Implementing A Business Idea (Chapter Foods)
Entrepreneurship and New Venture Creation (ENTR 601) : Psda 3 Implementing A Business Idea (Chapter Foods)
Entrepreneurship and New Venture Creation (ENTR 601) : Psda 3 Implementing A Business Idea (Chapter Foods)
(ENTR 601)
Ishita Singh(C-19)
Utsav Kasera(C-38)
Sahil Arora(C-43)
Anubha Jain(C-06)
Roopanshi Saxena(C-09)
PSDA 3
Implementing a Business Idea (Chapter foods)
NOIDA (U.P.)
Contents
1. Executive Summary
“CHAPTER FOODS”
Executive summary
Our Mission
Chapter Foods is an attempt to create a supercharged network of food brands which utilize
and optimize space and manpower of existing kitchens, to create its own brands. Kitchen
owners, on collaboration, stand a chance to further increase their Top Line with a
standardized revenue share model that each virtual brand comes with.
Chapter Foods are India's first food tech company, focused on better utilization of resources
(spare capacity of kitchens) at no extra cost to increase revenue from Co-owned brands across
Delhi-NCR. We are currently running 24 outlets across Delhi-NCR and 4 in Chandigarh.
Our Brands:
Our Services:
• Cost of packaging
• Order Management System (PoS)
• Consultancy on Raw Material Procurement & Marketing for the kitchen
About our Partnering Kitchens
• Checklists
• Onsite Training
• Audits (Planned and Surprise)
• Ghost Ordering
The Market
Across India online food business has seen an explosion of growth over the last few
years. Our market research has shown that there are over 16,800 independent kitchens in
Delhi NCR, out of which up to 65% are under-utilized. Consumer’s tastes are constantly
evolving, and consumers are looking for something new. With Zomato, Swiggy and now
Amazon into the market, India's O2 Food Market is set touch 17.2 Bn USD in 2023
Financial Projections
Based on the size of our market and our defined market area, our sales projections for last
year was fairly appreciable. Revenue share to chapter foods in year 2019 was seen to grow
from 5 to 26.50%. It is a commission-based model in which we take commission on every
order that is fulfilled. After the revenue is generated the payment of kitchen partner,
packaging cost, income tax, CAC, aggregator commission is deducted and then the profit
margin is taken. Therefore, at every order we will be earning close to 11 % margin. With
increased numbers of orders, we will be able to cover our costs and then turn profitable. We
plan to aggressively build our client base through newspaper, website, social media, and
direct mail advertising.
About our company
Chapter Foods is India's first food tech company, which focuses on better utilization of
resources (spare capacity of kitchens) at no extra cost to increase revenue from Co-owned
brands across Delhi-NCR.
Chapter Foods is an attempt to create a supercharged network of food brands which utilize
and optimize space and manpower of existing kitchens, to create its own brands. Kitchen
owners, on collaboration, stand a chance to further increase their Top Line with a
standardized revenue share model that each virtual brand comes with. We provide 5 km
exclusivity to every kitchen in their area. Our principle being to be able to be a value adds at
your kitchen. To ensure every vendor is sending the food in the right packaging and the
correct orders are being sent, after order pictures are asked from the restaurant. So, the outlet
has to send pictures after every order is prepared.
The ‘Kitchen on rent’ is India’s first food tech-company which focuses on better utilization of
resources (spare capacity of kitchens) at no extra to increase revenue from co-owned
brands across Delhi-NCR.
Consumers are constantly evolving and consumers are looking for something new and want
to try out different cuisines in different outlets so we build virtual kitchen to increase variety
in the market and hence increase probability of consumers ordering from the existing kitchen
and provide standardized service in an efficient manner.
We become delivery aggregators as with zomato, swiggy and now even Amazon entering
into the Indian market, O2 food market is set to touch 17.2 Bn USD in 2023.
IMPLEMENTATION OF IDEA
• Our Idea is to make a cloud kitchen network in which we will partner with different
restaurants and deliver their food via Swiggy and Zomato. The gap that we are trying
to fill is for certain restaurant owners who are running at low capacity and have the
potential to increase sales.
• This idea is an attempt to create a supercharged network of food brands which utilise
and optimize space and manpower of existing kitchens, to create its own brands.
Kitchen owners, in collaboration, stand a chance to further increase their Top Line
with a standardised revenue share model that each virtual brand comes with.
• We are partnering with different restaurants all across Delhi NCR region and will act
as aggregators to ensure their demand is increased in the market and their restaurant
kitchens are used efficiently which will enable both us and the restaurant owner to
earn more profit.
• We train their employees to provide standardized services like we teach them about
food portioning and tasting sessions are done by our food consultant. We have a
benchmark taste; it may be possible that some of the restaurant’s items may be having
a different taste than ours. We also train them on how to provide royal services like
packaging and wrapping of food is done under our name.
• Once contracts are signed by both parties and the restaurant is officially our partner
then we starts taking orders on online platforms like Zomato, Swiggy, Uber eats etc.
and then press the processed button after 10 minutes of order received and further
mark food ready by clicking on the dispatch button. If the order is not accepted on
POS then our call centre will call the person who is sitting on the POS of the outlet
just to confirm the order.
• Image of food is mandatory to be sent to us to ensure that all standards are maintained
and the food is made as per the standard food portion and spill proof packaging is
done in the way we have taught the restaurant employees to do.
HR PLAN
Our team will be sufficient to run operations in the Future
The Broad Aspects which will be covered by different Team members are as follows:
1) Sales – We will have 2 people working on partnering with new kitchen partners. Since
our company’s profit is dependent upon increased orders across various locations, this
will be a key area that will require to be performed with efficiency.
2) Call center Team – We will be requiring one person to Manage the incoming orders
and coordinate them further with different kitchens
3) Marketing Team – We will be deploying 2 different people for Marketing where one
person will be taking care of Online Marketing for the company and one person will
be focusing on the offline marketing
4) One person will be deployed for inventory management who will procure and track
inventory at head-office and across different partner kitchens.
Price: Price refers to the total cost to the customers to acquire the product and involves monetary and
psychological cost. Price plays an important role in the marketing of the product. Our company’s
pricing is done with no strategic positioning in price with an anticipated 5-10% variant on average
dish price across Delhi NCR and competitive.
Product: Product refers to what a company offers for sale and includes products and services. The
services of our company include cloud kitchen, virtual brands, fixed menu items and standardized
recipes. Limited food offering on the menu, which is currently designed as per the generic top selling
items across Delhi NCR. Revenue streams are direct sales, events, catering, no capitalization of
partner kitchens in terms of a revenue stream.
Promotion: Promotion refers to the marketing communication used to make the offer known to
potential customers and persuade them to investigate it further. Promotional activity includes
“advertising, public relations, direct selling and sales promotion.”
Place: Place is the element of marketing mix that ensures that the product is distributed and made
conveniently available for the customer at the right time and the right place. The place for our
company will be virtual kitchens, ideally within a 5km radar of the next available brand off our
company.
Target Audience
Defined by-
• Flavor Palette
• Individual Brand Values
- Need to review adverts, Zomato analytics and social media analytics to optimize sales
- Menu Reorientation: Dishes to be added, finalize price points and portioning (in process)
Brand Awareness
For Customers
Reviews and Rating on Zomato: Reviews are to be done for any listing to boost up the front
end rating. With food reviews should be a priority, as an actual order is placed in that case,
with the picture which boosts the organic algorithm of the aggregator. Without food reviews
can also be taken as an option, where an actual order is not placed but review is put up for a
particular listing.
Swiggy 5: As Swiggy has a time window of 3 months for a rating to be reflected, i.e.
minimum of 25 ratings are supposed to be there within a window of 90 days for the overall
rating of the listing to be reflected on Swiggy. To make sure ratings are there within that time
frame, Rating orders are to be done for the respective listing. In a rating order, an order is
placed for that listing of any item, (Make sure the Wi-Fi is not connected) after placing the
order, call the kitchen to inform them to not prepare the order and then call the assigned rider
and tell him to mark the order as delivered. Once the order is delivered, give a 5 star rating
and you’re done!
Listing Check: The listings on Zomato and Swiggy have a lot of things to take care of in
order to boost the visibility and menu additions and menu to cart ratio. They are:
• Thumbnail Picture: The Thumbnail picture is by which a listing stands out. The
thumbnail picture should be food focused and should reflect the brands value. To
update the thumbnail picture, a Hi-Resolution picture is to be selected, of an aspect
Ratio of 1:1. After selecting the picture, an email is to be sent to Zomato helpline, at
o2help@zomato.com along with the picture for the same to be updated.
• Discounts: The discounts running on every listing should be checked at least thrice a
day as any activity done on the POS which requires refreshing the order aggregator
removes the running discount in that particular listing. To reapply the discount, go to
Zomato for a business app, go to Promos, then select the outlets, discount percentage
and the running dates and confirm, the discounts will be reactive.
• Menu Orientation: The menu appearing on the listing should be properly aligned,
starting from Starters, Main Course, Biriyani, Combos etc. All the Veg and Non Veg
Sub categories should come one after another and should not look confusing to the
user.
• Offline Menu: The offline picture of the menu on the listing should be updated with
all the current items being sold and the current pricing of those items. Old Menus with
different pricing on them than the actual menu can cause customer loss.
• Item-Wise Picture: The majority of the items present in the menu should have their
individual picture uploaded on the menu, which not only looks good but gives the
user an idea of what the food might look like. The item wise picture should be a Hi-
Resolution picture, in 720 x 480 aspect ratio, and is sent to the Rista team at
support@ristaapps.com along with the current POC from Rista.
• Item Descriptions: All the items present in the menu should have descriptions under
them to give the user an insight on what actually the item is and what all are its
ingredients. The descriptions can be changed through Rista PoS (Refer Rista Doc)
• Categories change according to the Festivals: Some of the categories can be changed
depending on the festival or event running in that particular time of the month.
Ads on Aggregators: Ads for a particular area can be taken on Zomato and Swiggy on a per
click basis which can boost the visibility of the listing in that area.
Addition of items on QVM (Meal for one) and POP: Adding the menu items like combos and
single rolls in the Quick Value Meals and Swiggy POP can increase the visibility of the
listing multiple folds, as the number of restaurants present in the same are less, which brings
the high rated listings on the top like us.
Increasing DSZ: Increasing the Delivery Serviceability Zones, can act as a booster for
visibility of the outlets, the areas in the delivery radius from where the orders are highest or
lowest should be added in the DSZ from Zomato dashboard which will target those areas.
Promotions
For promotions we can follow different techniques to make a brand name of our own which
are:
1. Social Media Influencers: We can approach social food influencers which try food
items on different outlets and ask them to try our platter and give their reviews on their
3. Food Events: Apart from online promotions, we can conduct food events in various
places or functions where people would come and taste food from our outlets and we
can serve them our best items from the platter or they can also order. For example in
college during events we can ask for setting up our stalls for paid food also.
4. Using Banners: We can use banners and posters across the city and the places where
we are available and can partner with outlets so that they can
on live projects and can make college ambassadors to promote in different colleges by
different activities.
OPERATIONAL PLAN
Operational plan includes:
Chapter foods are the next generation revolution in the food- tech space, which utilizes the
excess capacity of existing restaurants to launch our home-grown food brands.
What:
By collaborating with us, independent restaurant owners increase their revenue by allowing
us to utilize their idle space & man power to roll out orders of our home-grown brands.
SALES
A sale pitch of a company is a condensed sales presentation where a salesperson explains the
nature and benefits, ideally in 4 to 5 minutes. Sales pitches are often referred to as ‘elevator
pitches’ because they should be able to be delivered within the time constraints of a single
elevator ride.
As discussed, we at Chapter Foods are India's first food tech company, focused on better
utilisation of resources (spare capacity of kitchens) at no extra cost to increase revenue from
Co-owned brands across Delhi-NCR. We are currently running 40+ outlets across Delhi-
NCR and Chandigarh. A good salesperson should be able to get their message across
compellingly and concisely. If you can nail your sales pitch, odds are you'll have more time
to talk down the line.
Now what does a good sales pitch consists of, to expect a deal fix up:
• Problem: Start with a statement or question about the problem you solve and share
eye-opening statistics. Answer the why.
• Value Statement: Share a very clear, concise statement of value. Be action-oriented
and outcome focused. Avoid using jargon. Share benefits.
• How We Do It: Highlight unique differentiators and explain what you do.
• Proof Points: Provide clear reference examples and list recognizable achievements.
Share industry validation and awards.
• Customer Stories: Share customer examples and successes. Tell emotional and
personalized customer stories. Make it real and tangible.
• Engaging Question: Close the pitch with an open-ended question creating a space to
have a conversation.
These are the steps with which a salesperson approaching a business client follows to make a
pitch:
Step 1. The first step is a cold call in which a brief introduction of what is Kitchen on Rent
and where are we actually operating. The call is a fixing for a meeting with the owner or the
manager whoever is available at that time. Also we ask for their Email Id to send a proposal
to them.
Step 2. A proposal E-mail is sent on the client’s email address and after taking consent from
the client.
Step 3. Follow up to fix a meeting with the client on either call or mail.
Step 4. After the meeting is fixed then the whole procedure of how Kitchen on Rent works is
explained by starting a small introduction and then it is explained in detailed. Some of the
common questions an interested client is curious about are “How old is the outlet?” “How
many orders we get in a day?” “How much is our manpower?” “Area of the kitchen?” etc.
Step 5. A detailed description of what we will bring to the business and what benefit they will
get is explained which are:
Quality Assurance
Quality assurance measures are taken to ensure quality is maintained in every outlet of all
restaurants under our virtual kitchen brands.
Why QA:
• To check the menu items for taste, portioning, texture and flavour and what kind of
food is being sent to the customer from that particular outlet.
• To check the quality and brand of raw material being used at the outlet.
• To know where the outlet stands on various SOPs like cleanliness, hygiene and staff
grooming.
• To provide the outlets with the updates and changes going on, at menu level as well as
outlet level.
• To provide them with the feedback on various issues like menu items ratings,
increased delivery time, inventory variance, prep time etc.
• For touch base and have a presence in the kitchen.
• Check Actual Stock Count at the outlet to catch discrepancy (if any.)
Implementation of technology
We as young entrepreneurs rely on technology for various processes and are always in
search of implementing more to make the process more automated.
1) To process orders in real time on the cloud we will require POS (Point of sale)
Software which can relay orders between different geographical locations. This
software is needed as we will not be present at every kitchen therefore; we need to
find a way to communicate any new orders in real time. There are many options
available in the market with Limetray, Rista, and Urbanpiper providing this
software. Depending upon the number of outlets or the number of orders which
needs to be processed every day, the cost ranges from Rs. 1000 to Rs. 2500 per
outlet, some companies offer for even less. Once integrated with Different
aggregator platforms, this software helps to make receive and process orders and
also make any changes to the menu. This software can be developed in-house as
well but right now due to financial constraint and limited technological knowledge
in the team we will be outsourcing it. This software has other features like recipe
management which can help reduce costs for our partner kitchens giving us
another way to be of value to our partners. With them using this software we can
manage their raw material procurement and daily sales, further solving another
problem for them.
2) Since we are not present in the kitchen during the order fulfilment, we have kept a
quality assurance process of sending a picture of the food before packaging to
access any mistakes. This requires the use of any messaging application,
WhatsApp groups etc.
3) Having your own Delivery Website or an app in the future will require technical
assistance which may be outsourced or hired in the future. If we are able to scale
and generate good order volumes, we could develop our own sales platforms
which will help us save on commissions of aggregators and increase our
profitability.
4) If we decide to keep our own delivery fleet then a live time tracking application
may have to be used to track the locations of different delivery personnel. We will
need to train all the delivery executives on how to operate the software on their
phones.
5) RFID scanners attached to packaging stations at every outlet which will read
barcodes on every item being dispatched helping to keep track of packaging
material. Since we will be providing our own Inventory for the order fulfilment at
different locations it will be very useful. Implementing this technology can be
expensive and difficult to implement across every outlet till we have outside
investment.
Legal Aspects
The business idea needs to be put into action and therefore a company needs to be formed
before start operations. Since we are a bunch of friends who will be investing our own money
initially will be more comfortable with having a limited liability option and therefore would
prefer a partnership firm to start with and then before receiving our first round of investment,
we would be converting our partnership firm into a private limited company. The necessary
Documentation and process to incorporate and start the company. We will have to file for
various licenses including PAN, GST and excise duty and all the other legally required
formalities to run an organization.
To run a restaurant, we require a FSSAI license for every kitchen we deliver food from which
can be applied online on their website with a small fee. The required documentation will be
submitted after the kitchen owners sign the legal agreement and provide us with proof of
place (Electricity bill, property papers, and rent agreement), a copy of water test results of the
premises. This is followed by an inception of the kitchen by the FSSAI Department after
which the license is issued.
We will need to have a legally abiding agreement with all our kitchen partners which will
have the necessary details of our partnership and service exchange. The Agreement is the
most valuable asset of our company as it provides an insight to our potential investors about
the scale of our operations and its future scalability, the following pointer will be mentioned
in the agreement which will need to be signed and Company stamped:
Getting a patent for our different brand names will be a priority as these will give us an edge
to maintain our brand name and prevent competitors from copying our business model.
Business Risk
Business risk is the exposure or factors that a company or organization has to face that will
lower its profits or lead it to fail. Anything that threatens a company's ability to achieve its
financial goals is considered a business risk. There are many factors that can converge to
create business risk. Every breakthrough starts with a problem. Some of the major risks we
could identify were:
➢ Competitors
Since our business idea will work as responsive marketing as we are operating in the
food business which is in every corner of the city nowadays. So it is also a challenge
that this idea is already being used by various competitors and that too in the same
region. Also, people don’t want to waste money and yet be in trend and thus we will
attract the customers by the quality of the food and our services. The way to survive in
this business is whoever scales first in the market and gets a good response from the
people can win.
As we are not physically present their in the outlet kitchen so it becomes difficult to
monitor the quality and freshness of the food before it’s delivery and we cannot employ
a person in every kitchen for tasting it.
⮚ Changes in the government policies.
Any change in the policies of the government can affect the food industry and also it can
become difficult in acquiring the license such as FSSCI license, in order to become
independent of the operational charges of the business.
⮚ How will we cover our financials?
In order to successfully run this business we need the money from next client to sustain
ourselves or the business will not be able to cover its financials. Also when approaching
a client it becomes an already running business or restaurant to convince them to agree
to our terms and their willingness to agree that we will use our brand name by taking
food from them.
⮚ Growth & Scalability depends upon the favourable market conditions.
As we can see there should be favourable market conditions fulfilled in order to keep the
business running and we can see the current market conditions due to the pandemic, so
it has been difficult to get orders because people were avoiding the outside food due to
the risk of contamination.
Finance Aspect
Talking about the revenue generation from the business idea first this is a commission-based
model. We will be taking a commission on every we fulfil. From whatever we get from the
customer we will have to first give a sum of money to the partner kitchen which has
processed the order for us. Therefore, we have come up with a model which will be
satisfactory to the company's vision and also help our partner generate some revenue.
We will be getting Rs 100 as our revenue, but this doesn’t go in our pocket directly, we need
to reduce our costs and expenses from this
(Less) CAC Rs 15
Profit - Rs 11
With increased numbers of orders, we will be able to cover our costs and then turn profitable.
Since we are bootstrapped start-up, we will need to keep manageable payment cycles as the
revenue will first go to aggregators and then will be transferred to us and we will need to
further transfer to our partners. We will also have to manage the purchase of our Packaging
inventories so it becomes even more important for us to manage our cash flows efficiently.
We will be each investing our own money initially and run the company till we can get some
sales volumes after which we will be first looking for angel investors to pitch in small
amounts of money in the first 2 years and once, we turn profitable, we will be looking to raise
A big round of funding from various Venture Capitalist and investors.
Funds
raised
S. pre
N series Dilution Valutaion Deal
o. Company A %age Pre-money Date Investor Names
Oct
845K 4 million 24,
1 Faasos USD 15.30% USD 2011 Sequoia Capital