Section 2

Team 1
Spring 2022

Business Plan

Business Name: ABChef

Business Idea: Educational subscription meal prep kits for families

Team Members Email Addresses:

Mazra Abdulla _________________________________ abdul2mm@dukes.jmu.edu

Vincent Alcarese _________________________________alcarevm@dukes.jmu.edu

Carson Basnight _________________________________basnigcc@dukes.jmu.edu

Selamawit Berhane ________________________________berhansg@dukes.jmu.edu

Corey Coerse ________________________________coerseca@dukes.jmu.edu

Trevor Harrison _________________________________harri2tc@dukes.jmu.edu

Justin Tersoglio _________________________________tersogjr@dukes.jmu.edu

 1

Executive Summary
ABChef
Trevor Botson
Address: [250 Airport Pkwy, Oroville, CA,95965]
Phone: [(530)578-7212]
E-mail: [ABChef@jmu.edu]

Management: General Manager:

Trevor B.
Human Resource Coordinator: Emily R.
Warehouse Operations Manager:
Symere W.
Marketing Manager: Blake W.
Industry: Perishable prepared food
Manufacturing
Number of Employees: 38
Amount of Financing Sought: $2
million
Investment Sources: $1.05 million
from 7 founders, $500k in common
shares from angel investor, $500k in
convertible debt from angel investors,
$2.9 million from a mortgage loan
Use of Funds: Equipment purchases
(industrial fridge, pallet jacks,
computers etc.), inventory, warehouse
establishment, employee wages,
licensing fees, and marketing
Product/service selling price:
Years 1-3: $15
Years 4&5: $20
Business Description: Our company
delivers meal kits for children. We are
selling an educational cooking
experience so families can have a fun
cooking experience while learning
about cooking and nutrition.
Products/Services: The costs for
each box would include $5.06 for
ingredients, $0.42 for boxing with
insulation, $2 for cooling packs, $0.21
for ingredient sealing, $0.61 for
average labor cost, $1.50 for kid
friendly utensils, and $0.20 for recipe
books. Each box would cost $15 in
years 1 and 2 and $20 in years 3-5. The
ingredients will be shipped from a local
supplier and all other materials will be
bought from our respective suppliers.
Competitive Advantage: Our Product
focuses on an educational cooking
experience for children.
Markets: We will be narrowing our
focus to high-class families in the
suburbs, with children.

Distribution Channels: Online orders via website and customer service line.

Competition: Our two biggest competitors are Hello Fresh and Radish kids. HelloFresh is a
meal service that provides recipes and ingredients. They bring value to the customer by
providing convenience by reducing the hassle of grocery shopping and planning. HelloFresh
has a different focus than us because they are not targeting families with children. Radish
kids provide a learning experience for children in the kitchen. They provide recipes,
educational manuals, and kid-friendly cooking tools. Radish kids do have the same target
market as ABChef. A key difference between Radish kids and ABChef is that we provide an
educational experience along with the fresh ingredients to reduce the hassle of grocery
shopping and ingredient preparation.

Financial Projections (Unaudited):

2021 2022 2023 2024 2025
Revenue: $ 6,639,820 $ 18,775,154 $ 50,873,002 $ 88,345,198 $134,531,099
EBIT: $(1,428,948) $ (1,657,987) $ 8,023,762 $ 9,288,793 $11,207,090
 3

Narrative

Elevator Pitch
Are you running out of activities to engage in with your children? Maybe you’re tired
of the same routine or maybe you often struggle to decide on what’s for dinner. ABChef
offers a twist to the meal kit delivery industry, being not only fun and engaging but also
educational and inspiring. We take care of the meal planning and deliver the groceries along
with a nifty recipe book for you and your children straight to your doorstep. This allows
parents to take the stress of not knowing what to prepare for dinner off their shoulders
while giving their families an exciting activity to look forward to! We take care of the stress;
you enjoy the fun!
Product Description
Our product is a meal prep kit designed for kids to learn about cooking and nutrition.

ABChef comes in a box surrounded by cooling packets. The proper amount of fresh

ingredients is in the box, so the consumer is not confused about how many ingredients to

add. Also, our kit contains a paper book with cooking instructions. Educational information

about nutrition and food like “where the ingredients came from” and “the importance of

washing food before eating” is in the box. Our meals, recipes, and educational information

are constantly changing with a wide variety of selections.

Competitive Advantage
ABChef will focus on educating children about nutrition and cooking. We will provide

our customers with an educational experience that allows parents and their kids to create

memories in the kitchen. Although convenience is not our main focus, it is still a factor that

differentiates us from competitors such as RaddishKids. RaddishKids focuses on providing

recipes, whereas with our current service we save the customer a trip to the grocery store.

Through feedback from our customers, we may consider providing them an experience-

based option where they can purchase the activities, recipes, and kitchen tools at a lower

price if the grocery store trip is something that they prefer to engage in with their children.
 4

Value Proposition
We add value by providing customers with an experiential, hands-on activity. Our

product incorporates fun and learning in the kitchen. Customers can expect their children to

learn how to cook at an early age to develop an understanding of nutrition as well as

confidence in the kitchen.

Business Strategy

Our strategy is focused differentiation. Our meal kits are unique because we are the

only company to provide ingredients along with a kid friendly educational experience. We

focus on developing loyal customers in our narrow target market by appealing to our

customers that value education, health, and family fun!

Business Location

We will locate our business in Oroville, California. California leads the US in food and

beverage manufacturing plants at 6,041 in 2019 with 76,400 farms (USDA). We would like

to have low costs on shipping our produce to the manufacturing plant. It is also roughly an

hour away from Sacramento which gives us easy access to most of our target market.

Financial Performance
During our first year of operation, we will purchase our first facility for $2.9 million in

Oroville, CA with an APR of 3% and, we plan to pay it off in 10 years. In this year we plan to

suffer a net loss of $1.5 million, which is then followed by a net loss of $1.76 million the

next year. During the second year, due to our losses in previous years, we will run low on

cash and take out a $2 million bank loan with an APR of 6%. We plan to pay it off in 10

years. In year two we also decide to purchase a second facility in Texas. In our third and

fourth years, we plan to make a profit of around $5.75 million and purchase facilities in

Illinois and Florida. In our fifth year, our sales will skyrocket, and we make a profit of $7.5

million. With this increase in net profit we decide to take out additional loans in order to

purchase multiple facilities across the US.

 5

Exhibit 1- Organizational Chart

*All employees in the company will be full-time employees

*In year 2 we will add 34 more total full-time employees (3 inventory associates, 6
custodians, 15 shipping and packing clerks, 2 social media marketing specialists, and 8
customer service representatives
*In year 3 we will add 76 new employees (1 accountant, 6 inventory associates, 10
custodians, 40 shipping and packing clerks, 3 social media marketing specialists, 1
customer service manager, 14 customer service representatives, and one SEO specialist)
*In year 4 we will add 113 new employees (1 human resources coordinator, 1 recipe
developer, 1 human resources specialist, 1 talent acquisitions specialist, 8 inventory
associates, 11 custodians, 65 shipping and packing clerks, 4 social media marketing
specialists, 1 customer service manager, 20 customer service representatives)
*In year 5 we will add 151 employees (1 accountant, 1 talent acquisition specialist, 11
inventory associates, 15 custodians, 90 shipping and packing clerks, 5 social media
marketing specialists, 2 customer service managers, 25 customer service representatives,
and one SEO specialist)
 6

Exhibit 2

Knowledge, Skills, and Abilities

Key Service or Product manufacturing Knowledge, Skills, and/or How are you going to secure these KSAs and verify
positions Abilities Needed employee qualifications?
General manager Evidence based decision making, visionary Minimum 10 years’ experience in a management or
leadership, conflict management, motivation skills leadership role, we will ensure a background check is done,
BBA preferable
Marketing manager Creative thinking, management skills, creative Minimum 5 years of experience in a management and
thinking, communication skills. marketing role, BBA required
Warehouse manager Critical thinking skills, ability to work with all levels BBA required; we will ensure a background check is done.
of staff, proficient knowledge of warehouse Manager experience preferred but not required.
procedure and policies
Accountant Time management, mathematical and deductive CPA certification, minimum 5 years’ experience, background
reasoning, critical thinking check,
Human resource manager Interpersonal skills, good teamwork skills, conflict
management, understanding differing viewpoints
Motivating Employees

We are going to focus on filling higher roles in the company by promoting from within the company instead of hiring from outside. Also, we will recognize
employee of the month, they will earn an extra two days of paid vacation. Our employees will also be able to leave early if the manager deems, they have
worked hard recently. We also will encourage employees to ask for the salary or wage they feel they deserve. We will foster and open, non-judgmental, and
diverse work environment that rewards employees for promising ideas by allowing them the rest of the day off. Our managers will lead by example and not ask
the employees to do something they would not, and they will be taught the equity theory when joining the company.
 7

Exhibit 3: Market Segmentation Analysis/Target Market Selection

Priority
Segment size
Growth level
Segment (e.g., # of
Projection of Segment Description for Justification for Targeting
Name Households in
Segment targeti
Segment)
ng
We chose this segment because of the
relative age range of the parents’
demographic. With these individuals
Young Digirati consists of high-class,
being tech-savvy and frequently on
wealthy families, with parents age
social media. They are interested in
ranging from 25-44. These families live in
fitness clubs which show a healthy
lavish condos and apartments in wealthy,
interest. Their projected growth rate is
urban communities. Their lifestyle is
Young 9.6% over the 9.6% over the next 6 years. Additionally,
736,843 "bougie" and they engage in "high-status 1
Digirati next 6 years families with children between the ages
activities" like traveling the world and
of 5-15 as well as the more affluent
going to trendy stores and restaurants.5
families are the key target market for
This segment is also known to be very
online and mobile services that aim to
tech-savvy and highly involved with social
help modern families manage their time
media.
and instill healthier routines in their
homes while allowing more time for
leisure activities and quality time. 11

Networked Neighbors embodies the idea
of suburban wealth, people in this
category own million-dollar homes, have
high-end technology, and expensive cars.
Ages are ranging from 18-34 which
suggests that they are active on most
Networked 9.49% over the
503,085 social media platforms. With a lifestyle
Neighbors next 6 years
incorporating a lot of technology on a
day-to-day basis, this segment is very
responsive to new trends. Their lifestyle
is expressed by married couples, most
often with children, six-figure incomes,
and degrees from university. 5
. We chose this segment because the
average income is $221,410, these
consumers can afford our product, and
market research shows that high-
income families place more value on
dieting than low-income families. 38% of
1 grocery shoppers are interested in trying
a prepared meal kit supplier, with this
figure being substantially higher among
18-34-year-olds that have a household
income of 75K+. 12 Additionally, over
1/3 of networked neighbors have
children.

Question 1) How did you arrive at your segment size?

We found our segment size by using Claritas360. We sorted all of the United States by income, age, family, technology, and social group. The
number of total households was 127,073,679 in the United States. Then more specifically we found the segment size of Young Digerati and
Networked Neighbors given to us by Claritas360.

Question 2) How did you arrive at the growth rate?

Given the percentage of total households that Young Digerati and Networked Neighbors are relative to total households from Claritas360. We
then found the total households in 2018 using Statista. Using the Joint Center for Housing studies research on Harvard’s blog they said they
estimate a 12.2 million increase in households from 2018 till 2028. We took the percent change in households from Claritas360 number in 2022
of each segment compared to the estimated number in 2028 combining the 12.2 million to the 2018 number of households then taking the
percentage of those households that match the percentage of each segment. This percent change was then our total growth projection for the
segment over the next 6 years.
 8

Exhibit 4: Market Quantification

Total Market
Annual Retail
Potential Market Annual
purchase Price / Annual $ Revenue
Year (No. of Share** Unit Sales
amount*** Serving
Customers) *
2022 1,239,929 0.42% 85 442,655 $15.00 $6,639,820

2023 1,259,676 1.169% 85 1,251,677 $15.00 $18,775,154

2024 1,279,406 2.339% 85 2,543,650 $20.00 $50,873,002

2025 1,299,194 4.00% 85 4,417,260 $20.00 $88,345,198

2026 1,318,932 6.00% 85 6,726,555 $20.00 $134,531,099

Took the total number of households from Clarista (127,073,679) and multiplied that by 39.99%. The
39.99% is the percentage of households that have children based on Statista's graph. We than took that
number of households (50,816,764) and found the percentages that made up young digerati and networked
neighbors (1.45% and 0.99% respectively). These numbers of households with kids in each segment where
then multiplied by 1 + (our growth rate projections from the STP assignment 9.6% for Young Digerati and
9.49% for Networked neighbors/6). Doubling the value each year to achieve our estimated potential for each
segment. Combining both of these segments gave us our total market potential by year.
To calculate market share we used our surveys to get to a market share potential of 6% in year 5 based on
our participants who were extremely likely to switch to or try out our product. Then using the information
from equidam about startup growth rates in combination with the market share data of meal kit delivery
services on IBISWorld. Starting with 6% in year 5 and going backward we divided it by 1.5 (1 + an estimated
50% growth from the year before a number we made, and estimation based on the competitive landscape).
The market share is then 4% in year 4 and then divided by 1.67 (1 + 67% estimated growth taken from
Equidam's research on average startup growth rates and the industry market share on IBISWorld as it
slowed down in proxy firms later years) to achieve our year 3 market share. To get our market share in year
2 we used the year 3 market share percentage of 2.339% and divided that by 2.05 (1 + 105% estimated
through the research by equidam). With the value of 1.169%, we divided that by the estimated growth rate
of startups on equidam (1 + 178%) this value is our estimated starting market share percentage.
To find the annual purchase amount we found the average number of transactions from a second measure
article. This number came out to be 5.3 transactions per quarter from the companies that they listed. We
interpreted this 5.3 as the amount of weeks that a customer orders in a quarter. Multiplied this 5.3 by 4 to
get the number of weeks a customer would order in a year which equaled 21.2. We then multiplied that by 4
which we estimate the number of servings per week per family which equaled 85.

We based our price off of the average price for a meal kit delivery service, 11$ (Top10.com and IBISWorld).
We then added a few dollars to account for the cost of shipping, an unrefined supply chain relative to
competitors, and the other added kid friendly supplies.
 9

Exhibit 5: Positioning/Competitive Analysis

Positioning Statement: For families looking to make cooking a fun, educational, and
engaging activity to share with their children, our meal kit provides a new approach to meal
delivery. Our meal kits come with not only the freshest and safest ingredients, but they also
include kid-safe kitchen tools and educational activities/materials creating an exciting
experience for every member of your family. We prioritized education and freshness because
market research shows that this is what our consumers value the most when looking for a
meal kit for their children.

Additional Key competitive or market information related to Positioning:

With the pandemic making meal kit delivery services very popular in the US over the past
couple of years, there is no doubt that we will have competitors such as Yumble, who does not
teach children how to cook. All of the meals are ready to eat, and they do not make an effort
to teach children about what they are consuming. Other competitors include HelloFresh, who is
mainly targeting towards millennials and older adults. They provide detailed step by step
instructions for recipes which may be more difficult for children to follow. Our competitors'
main goal is to make things easier in the kitchen however ABChef not only makes things
easier, but we provide an unforgettable experience. By including children-safe cutlery and
kitchen tools as well as activities for both the parent and child to engage in, we differentiate
from these competitors. Our competitive advantage is being the only meal kit delivery service
that allows children and parents to engage in a very important life skill together while making
it an exciting activity.
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Exhibit #6: Marketing Mix

Product/Service Branding
Our branding strategy will be using differentiation. We will attract customers through our emphasis on a cooking experience rather than
just a quick and easy meal. Parents are always looking for new activities which will allow them to become close to their kids. Because of
our unique product, and we are offering what our target market seeks, we will be able to retain a good number of our customers.
Additionally, through word of mouth, we will be able to bring in new customers.
Pricing
Year 1 Year 2 Year 3 Year 4 Year 5
Hello Fresh Price $4.69 $7.09 $4.85 $4.91 $4.91
Blue Apron Price $9.99 $9.99 $9.99 $9.99 $9.99
Your Channel Price
Your Retail/Customer Price $15.00 $15.00 $20.00 $20.00 $20.00
Our prices are set at $15 because unlike our competitors, we are offering an overall experience, rather than just meals. The typical format for meal
delivery kits consists of a one-dimensional process where customers simply create the meals and are then done with it. At ABChef, we offer a more
educational and personal experience for parents and their kids. We also had to take the kid's safe kitchenware we provide with the meals into account
which adds $1.50 per serving. Because we strive to have the freshest ingredients in the meal delivery industry, because our ingredients are more fresh
when compared to our counterparts, our manufacturing costs are higher. Additionally, over time, as we become more established, we are going to raise
our prices because we'll have a larger market share, and our competitive advantage won't have to be as reliant on price.

Distribution/Location Strategy
Since we are a subscription-based service we will not use any intermediaries or wholesalers. We will sell directly from our website and ship directly to
the customers. We plan on using FedEx to ship all of our products, we chose FedEx because that is what one of our main competitors, Blue Apron, uses.
FedEx has a service called also has a 99.98% tracking accuracy, so our consumers know exactly when their food will arrive. We chose Oroville, California
because it is located in the central valley where over 230 types of crops are produced. It is also a town that connects to the highway so distribution will
be easily accessible.

Promotional Strategy (in thousands of $)

Year 1 Year 2 Year 3 Year 4 Year 5
Total IMC Budget: 400.0 1112.0 3000.0 5200.0 8000.0
Advertising Exp: 120 333.6 960 1716 2640
Sales Promo Exp: 100 311.36 900 1560 2400
PR Exp: 160 411.44 1050 1820 2800
Other Promo Exp: 20 55.6 90 104 160
The promotional strategy of ABChef focuses on gaining trust with the consumer through the use of public relations. We want to establish a name for ourselves within the
meal kit delivery industry with advertising. Sales promotion will be used to entice consumers to give our service a chance and give returning customers an incentive to re-
subscribe for another period. A small percentage of our IMC Budget will be allocated to other promotional opportunities that are unplanned so that we can capitalize on
them when they present themselves. In our initial years we project a greater focus on public relations, through the use of influencers we will grow our reputation as a
trustworthy service. Influencers vary in pricing with the amount of followers that they have as well as how much engagement they get and platform. We see our public
relations expense being broken down again by percentage as the cost varies greatly by platform. YouTube is the most expensive so we plan to allocate about 50% of the
budget towards that, 25% to both Tiktok and Facebook as the prices for influencers are lower but we still can achieve the same reach. Tiktok influencers with the largest
platforms charge around $1250 - < $2500 per post. Facebook would cost around $2500 - $25000 per post. YouTube has the largest range per post $1000 - < $20000 per
post depending on influencer size as well as length per advertisement. We will try to advertise at least 5+ posts per week over a range of influencers. The percentage
allocated to PR and other promo decreases throughout our five-year projection. This percentage is re-allocated to increasing advertising and sales promotion budget which
will help retain and attract more customers as we are a more established firm. For our advertising budget, we decided to use 50% of the budget on television advertising,
and distributing the other 50% evenly between Facebook, Tiktok and YouTube. We chose to use a large amount of our budget on television because it is much more
expensive. We also chose Facebook to advertise mainly to parents of young kids, and we chose Tiktok, as well as YouTube to reach both kids and adults..
 11

Exhibit 7: Process Map

For each major quality step:

Quality Step What is How often? How will you ensure quality?
measured?
Q1 Make sure the Freshness, 20% of ingredients Visual check of perishable ingredients
quality and freshness Quantity individually inspected
are up to our
standards
Q2 Ensure FIFO is being Time in Once a week Information system that tracks amount of time each
followed inventory ingredient is in inventory
Q3 Ensure ingredients are Temperature Every package Visual check and taking temp of each package
packaged and cooled of Package ensuring it is between 35°-40°
properly
For each critical resource:
Critical Resource Brief Description Unit Cost (in appropriate unit) How many?
Ingredients for foods nonperishables, refrigerated $5.06 per serving 4-24 servings/ box
depending on how
much the customer
orders
Boxes with Boxes with an inner coating of aluminum foil $0.42 per order 1 per order
insulation to keep the food fresh
Cooling packs Cooling packs to keep the meat fresh during $0.17 per pack 6 per box item
shipping
Sealing Foam trays and plastic wrapping to prevent $0.07 per tray 1 per ingredient
cross contamination during shipping
Kitchen Utensils Kid Friendly kitchen utensils $1.50 per set 1 per order
Briefly describe your main facility - provide information about layout and dimensions
Our facility will be 55,000 square feet and will have a parking lot with loading decks to make the unloading and loading of
supplies efficient. Near the loading docks there will be refrigerated and freezer rooms. These rooms will include tables where
foods will be inspected and sorted all while staying at optimal temperature. The back of the building will include 4000 sq ft of
office spaces.
 12

Exhibit 8: Quality Assurance

Indicate the Why is this dimension important, given your industry & target Identify the Quality Step(s) on the
Dimensions of market? Process Flowchart / Service Blueprint to
Quality on which which this corresponds.
you will focus.

Conformance Based on our target market this dimension ensures that the materials Q1
are packaged precisely with freshness and stored in a freezer to meet
the quality standards of the FDA and other government agencies.

Perceived Quality We want our customers to believe that ABChef is of a quality that Q1, Q2, Q3
cannot be met by our competitors. We are not just another meal
subscription kit. By having strict quality controls in the process of
creating these kits, we will be able to give the customer peace of mind
that they will be receiving very high-quality products.

Performance By guaranteeing that ABChef provides variety, menus will be updated Q2

weekly, and ingredients/inventory will be replaced in correspondence
to changes in meal plans.

Assurance Customer satisfaction is guaranteed as far as freshness, portion size, Q3

educational aspect, and engagement levels.

Use the space below to describe any additional Proactive Quality Assurance Plans that are not connected to specific activity on your Process
Flowchart / Service Blueprint.
-Having cross-trained managers around the facility will allow them to do random checks verifying that quality and freshness standards are
met.
-Packed materials that are stored away will be stamped with the day that they were packaged and stored away to guarantee freshness, ensure
FIFO is being followed, and eliminate any food that has passed its expiration or is considered a bad batch.
Describe any reactive quality assurance plans. Include a recovery plan should a customer receive poor quality goods and/or services.
-Our company will be providing quality goods and service to our customers. We will work closely with our buyers to make sure they are
happy and satisfied with our product. If our customers receive a poor-quality product or do not like what they get, we will happily send
them another order with no charge or give them their money back. Our company will also take full responsibility for the inconvenience and
send them a sorry letter.

If you will utilize a quality/process improvement methodology, indicate which:

☐ NA ☐ TQM ☒ Six Sigma ☐ ISO ☒ Benchmarking
☐ Other (specify what):
Note: You will not use all of them; only those with highest relevance.
Provide a specific explanation of how your chosen quality methodology relates to your business and how it will be applied:
We will inspect raw materials right after receiving them from our suppliers. In addition to inspection, our company will use six sigma for
quality improvement which will reduce variations by making consistency our goal and mapping out our locations where superfluous actions
are taking place. Our company will also use benchmarking to compare our performance with our competitor HelloFresh. We will focus on
improving on the things that we get most complaints about and fixing them to the best of our ability. We will go above and beyond to
exceed our competitors’ best work through our own as well as their customer feedback.
 13

Exhibit 9
INVENTORY & SUPPLIER SELECTION FOR FACILITATING GOODS If your organization does not have
facilitating goods inventory, please check this box: ☐NA

Item(s) Supplier Name & Location Reason for selecting this Supplier lead Frequency of System of Mode(s) of
(City, State, Country) supplier time (in days) replenishment Management Transportation
(in days)
Meats, Poultry, S & L Food Sales, Chico, Highly reviewed, close 4 days Weekly Fixed Order ☒ Highway ☐Rail
Fruits, California, United States proximity to main facility Interval ☐ Waterway ☐ Air
Vegetables, Dairy,
Eggs, Carbs,
Spices,
Boxing S & L Food Sales, (Chico, CA, Cheap 21 days Monthly Two Bin ☒ Highway ☐ Rail
US)
☒ Waterway ☐ Air
Cooling Dongguan Yude Paper Products FDA compliant, close 7 days Monthly Two Bin ☒ Highway ☒ Rail
Co., LTD. (Guangdong, China) proximity
☐ Waterway ☐ Air
Sealing ULINE (Reno, NV, US) Low Lead Time 7 days Monthly Two Bin ☒ Highway ☐ Rail
☒ Waterway ☐ Air
Ink & Paper American Paper and Provisions Low lead time 7 days Monthly Two Bin ☒ Highway ☒ Rail
(City of Industry, CA, US)
☐ Waterway ☐ Air
Cleaning Supplies JGS Distributing (Napa, CA, Close Proximity, Low Lead 5 days Monthly ABC System ☒ Highway ☐ Rail
US) Time
☒ Waterway ☐ Air

SUMMARY OF RESOURCES AND THEIR SHIFT PATTERNS

Types of Total hours required per # Of operating days # Of full time (FT) # Of part time Shift pattern(s)
resources used week (for each type of per week resources required (PT) resources
resources) (40 hr/wk) required

Shipping and 600 7 15 0 Mon-Fri 9AM-5PM (11FTE)

Packing Sat-Sun 9AM-5PM (10FTE)
Loading and 80 7 2 0 Mon-Wed 3PM-11PM(2FTE)
unloading Thur-Sun 3PM-11PM(1FTE)
Cleaning 120 7 3 0 Tue-Sun 7AM-3PM(1FTE)
Mon 7AM-3PM(2FTE)
Mon-Sun 3PM-11PM(1FTE)
Year 5
Shipping and 9000 7 225 0 Mon-Fri 9AM-5PM (165FTE)
Packing Sat-Sun 9AM-5PM (150FTE)
Loading and 1200 7 30 0 Mon-Wed 3PM-11PM (30FTE)
unloading Thur-Sun 3PM-11PM (15FTE)
Cleaning 1800 7 45 0 Tue-Sun 7AM-3PM (45FTE)
Mon 7AM-3PM (90FTE)
Mon-Sun 3PM-11PM (45FTE)
 14

Exhibit 10: Capacity

.

Demand Capacity Utilization Hours of Bottleneck name How will you manage /adjust the bottleneck to ensure you
can appropriately serve or supply your customers?
(Per hour) (Per hour) (%) Operation and description

At the end 152 225 67.56% 56 Isolate and Seal We will have more employees work on this section
of Year 1 Ingredients

At the end 428 450 95.11% 56 Isolate and Seal We will have more employees work on this section
of Year 2 Ingredients

At the end 871 1,125 77.42% 56 Isolate and Seal We will have more employees work on this section
of Year 3 Ingredients

At the end 1513 2,100 72.05% 56 Isolate and Seal We will have more employees work on this section
of Year 4 Ingredients

At the end 2304 3,150 73.14% 56 Isolate and Seal We will have more employees work on this section
of Year 5 Ingredients

Hours of operation/month Demand/month Demand/hour Capacity/month Capacity/hour Utilization

243 36,888 152 54,750 225 67.56%

Additional resources (beyond your bottleneck) must be allocated appropriately to support operations. Identify which resources have a significant
impact on capacity at start up and describe why these are appropriate amounts of resources at start up.

Labor- Our employees will have a significant impact on our company. Including our high-level management that includes the General manager,
warehouse manager, and recipe developer, our company will have a total of thirty-eight employees in our first year. We will have fifteen shipping
and packing clerks in the operation section, in addition to our three customer service representatives that will closely collaborate with our customers.
Facility- Our company will be in a 55,000 sq. ft unit area in Oroville starting our first year. We will have enough space for an office, an operating
floor, and a storage area both for raw materials and finished goods. As we grow our business and require more space, our facility will still be enough
to work on.

Describe adjustments you will make as resource requirements vary with time. Be specific regarding which key resources (beyond your bottleneck)
will be adjusted, when and how. If you will make multiple adjustments, explain each.

-As we grow and expand our business, we will hire more employees and purchase more ingredients from our suppliers. We will hire more shipping
and packing clerks since our bottleneck is to isolate and seal ingredients. We will double our employees in this section each year and have over 200
clerks by the end of our fifth year.

How will you manage seasonality? If your organization does not have seasonal demand, please check this box: ☐NA
-We expect a little bit of higher demand during the winter season or in December, January, and February. Since the increase we are expecting is not
a lot, we will not be outsourcing or subcontracting to meet our demand. Instead, we will utilize our labor and resources and prepare more units to
sell for these months.
 15

Exhibit 11
 16

Exhibit 12
 17

Exhibit 13
 18

Exhibit 14: Notes

Accounting Methods:
The company uses MARCS for its industrial refrigerators, pallets, and office supplies. Refrigerators would fall under the
manufacture of other food and kindred products class and have a useful life of 7 years, pallets would fall under manufacture
of food and beverage - special handling devices and have a useful life of 3 years, then all office supplies would fall under the
office, furniture, and equipment category and the information system category with useful lives of 7 and 5 respectively.
Because of the varying useful life of fixed assets, we took a weighted average of the useful life of each asset based on the
cost of each and ended up with a 7-year useful life, which is the useful life we used for depreciation.

Assumptions:
Accrued Wages are assumed to be two weeks of annual salaries and wages, bonuses would grow proportionally with annual
salaries and wages. Annual salaries and wages are assumed to grow about 2x per year with the exception of year 2026
where it grows by about 50%. Advertising expense is assumed to be around 10% of revenue throughout years 1-3 and 12%
of revenue in years 4 and 5. Website expense is assumed to be 1% of revenue. Merchant service expense is assumed to be
1% of revenue.
Investment Capital:
Funded with $1,050,000 from 7 founders, a $2.9 million 10-year mortgage with 3% APR, $500k 5 year convertible bonds at
5% APR, $500k in preferred stock with a 5% dividend rate, a $2.6 million 10 year 4% mortgage loan, a $2 million 10 year 6%
bank loan, a $3.5 million 4% 10 year mortgage loan, a $3.65 million 4% 10 year mortgage loan, and a $2,499,000 10 year
mortgage with 4% APR

Capital Investment:
In year 1 our company will purchase a warehouse for $2.9 million in Oroville, CA and install industrial grade
refrigerators costing $9,000 each. In each upcoming year we will continuously add more refrigerators to allow for an increase
in inventory. In year 2 we will purchase a facility in Texas for $2.6 million. In year 3 we will purchase a new facility in Illinois for
$3.5 million and take out a bank loan for $900 thousand. In year 4 we will purchase a new facility in Florida for $3.65 million.
In year 5 we will purchase a facility in New York for $2.499 million, one in Maryland for $3.625 million, and one in Missouri for
$2.95 million.

Risks:
• Risk related to US Economy: With some of the highest CPI the US has seen in the past 40 years the current
economy is in high risk of future inflation
• Risk related to foreign economies: Since most of our non-food suppliers are based off of Alibaba any policies that
affect US and China trade could affect prices with our suppliers.
• Risk related to rising gas prices: Rising gas prices will create a risk of rising shipping costs charged by suppliers
which could cause us to raise our price to compensate for the rising costs, which could turn some customers away
• Risk related to quality: Due to us dealing with food any drop in quality can have a drastic effect on our customer's
health if consumed or could damage and will damage our reputation
• Risk related to supply chain crisis: With the global supply chain crisis could keep procurement and order fulfillment
costs high which will affect our operating margin
• Risk related to decaying growth in industry: The meal kit industry is projected to grow at a slower rate in the next
5 years which could hinder us from achieving the success HelloFresh has had.
• Risk related to product price: With other more well-established firms charging less for a similar product we are
unsure how much more our customers are willing to pay for a kid friendly experience.
 19

Exhibit 15
 20

Exhibit 16

Liquidity: ABChef Maintains higher liquidity ratios throughout years 13-5. In the first 2 years the reason we are below this is because we
more necessary to use all of our available resources in order to get us on our feet, including our cash. However, in years 3-5 our firm star
are able to save cash in order to make our firm less risky. Another reason we start saving cash is that we realized that moving into foreign
sum of capital, so we want to have excess cash in years leading up to our expansion to fund this venture.

Financial Leverage: Our debt to equity stays lower than our industry average throughout years 4 and 5 and our times
interest earned stays above our industry average throughout years 4 and 5. These are clear signs that our firm could afford to
take in more debt to help leverage our company. However, we decide it would be advantageous for us to maintain a somewhat
similar D/E ratio in the first two years to help us get off the ground and help us cover our loss in year 1. But in years 3-5 we
decide it would give us an advantage to maintain a lower D/E ratio so we can prepare to take in a large sum of debt when we
decide to expand into foreign markets, which will likely put us back at or above the industry average.

Asset Management All of our asset management ratios stay relatively close to the industry average throughout years 1-5 with
the exception of inventory turnover in year 2. The most important asset management ratio for us would be our inventory turnover
ratio. We believe having a higher inventory turnover ratio can give us an advantage by allowing us to ship our product fresher than
our competition. One downside to this would be that it would be more difficult to prepare for a sudden increase in demand, however
since we value the freshness of our product more than reaching more customers, we feel keeping our inventory turnover high would
give us a competitive advantage. Our fixed asset turnover stays lower than the industry average throughout years 1-5. This could be
a sign that we invested more in our warehouses than our competitors compared to each dollar of revenue we earned. While most
people would see this as a disadvantage, we see this as an advantage. With more warehouses around the US, it would be easier to
ship out products to our customers freshly, and while we would end up paying more in property tax and suffer more depreciation
compared to each dollar of revenue, we believe our customer experience would bring us more future revenue to help combat those
extra costs.

Profitability: All of our profitability ratios stay close to the industry average throughout years 1-5. Reasons for this is because of the
industry we operate in. The meal kit delivery industry suffers from a relatively low gross profit margin compared to most other
industries. This would be because we do not add much value to our product compared to most industries, all we really do is buy food
for our customer, put it in a box and ship it to them. Because of this our company cannot charge too much more compared to our
competitors without sacrificing our amount of sales lost to competitors.

DuPont Analysis: Most of our ratios under the DuPont Analysis stay pretty consistent with the industry average with the exception of our
Equity Multiplier. Because of our industry average being calculated based off of the top two firms in our industry our equity multiplier is
likely skewed. With both of these firms being public and the fact that these are both established firms they are would have much more
equity than a private corporation that just started up a few years ago, which would skew the industry average down drastically. Our total
asset turnover is slightly above the industry average, the main reason for this would be the premium we charge for the education and the
kid friendly experience of our product increases our price, which in turn increases our revenue for each customer sale. This would increase
our total asset turnover since sales is in the top of that ratio.
DuPont Analysis: For ABChef each of the DuPont variables except equity multiplier are below the industry average for our first year. This
would be because of our net loss and low sales due to us being a new company. In year two all variables change drastically except for
return on net profit margin. Return on equity becomes positive due to both our net income and total equity being negative, which gives the
illusion of us performing well that year. In 2024 our net return on equity becomes negative again because of our net gain in sales becomes
positive. In years 2025 and 2026 all our variables exceed the industry average likely due to our lower equity to profits because of our losses
experienced in the first 2 years, lower amount of total assets compared to profit, and our company leveraging our debt effeciently.
 21

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Bios/Photos
I’m Mazra and I was born and raised in Harrisonburg, Virginia however
I lived in Kurdistan throughout most of my teenage years. I am a junior
Marketing major with a minor in Computer Information Systems. I am a
transfer student, so it is my first semester at JMU and my goals for this
semester are to become more involved on campus. Outside of school I
love to travel, read, and spend time with my friends and family.
 29

My name is Vincent Alcarese. I was born in Washington D.C., and I

grew up in Ashburn, Virginia for most of my life. Now my family lives
in Leesburg, Virginia. I am majoring in Computer Information Systems.
Outside of class I like to spend my time with friends, family or at the
gym!

I’m Carson Basnight. I was born in Tennessee but lived a majority of

my years growing up in Rome and Dubai. I’m majoring in Computer
Information Systems. Some of my favorite things to do outside of class
are hiking, traveling, and spending time with friends/family.

My name is Selamawit Berhane. I am from Springfield, Virginia. I am a

transfer student from Northern Virginia Community College, and I am
currently a junior majoring in Computer Information Systems. I love
spending time with my friends and family in my free time.
 30

My name is Corey Coerse, I am a junior Computer Information Systems

Major with a concentration in Business Analytics and a minor in
Computer Science. I was raised in Virginia Beach, VA. Outside of class
I enjoy surfing, snowboarding, and fishing.

My name is Trevor Harrison, and I am from Great Falls, Virginia. I am a

junior who is majoring in Management. Some of my passions are
weightlifting, running, skiing, mountain biking, traveling, and I'm
involved with Sigma Nu. I am currently in a Marine Corps Officer
training program, and it is a goal of mine to commission upon
graduation from JMU.

I’m Justin and I am from Warrenton, VA. As of right now I am a

sophomore Finance and Computer Information Systems double major
with concentrations in Financial Tech and Analysis and Information
Systems with a minor in Business Analytics. Currently I am a member
of the Financial Professionals Club and Associates for Information
Systems. Some of my passions outside of the classroom include
powerlifting and track, with my most notable PR’s being able to deadlift
500lbs and run a 2:00 800m dash.