Food truck business is the type of business I prefer starting in the future. My food truck will be operating in Melbourne serving up peanut butter, and jelly inspired sandwiches to Latrobe university students and locals. My food truck business will be known as Foodco. The business will make use of locally sourced ingredients to make a diverse range of enticing sandwiches that will attract a wide customer base. Customers will be served with speed and smile making sure all of my customers are satisfied. The business will rotate its menu on a seasonal basis, and it will encompass options for an ever-expanding number of customers who need an option that is free of gluten and contaminant.
The mode of delivery that the business will use will be a van. A van is chosen based on fuel efficiency, reliability, space and residual value. A van offers some advantages. One of its advantages is that it is cost-effective. A van will also offer fast delivery (Glicker 2014). Other advantages include easy communicating with the driver while it is also ideal for transporting perishable goods which would be Foodco’s main business. Foodco business will be registered with Queensland Department of Health- Food Safety Standards and Regulation where the business will attain its food safety certificate. The business will be managed by a classically trained chef will relevant experience in the food cart business. University students are identified as the main target. This is because students are renowned for their sense of taste for fast foods. Male university students, for instance, are renowned for hating cooking. Some of them think that the work of cooking is a waste of time and are "well suited" to ladies. They are therefore more likely to purchase foods, especially during lunch hours.
Business Model Canvas
Customer segments entail the group of customers to whom a product is sold. This model is very vital for any business model canvas. Customer segmentation may involve grouping customers by their needs, behaviors, and other traits that they share (Dudin et al. 2015). A customer segment can also be defined regarding demographics like gender, profession, ethnicity, and age or on psychographic factors like motivations, the behavior of spending and interests. Matching the customer segment of a business' value proposition ensures that more lucrative business stream is achieved. It is therefore vital that different customer segments tradeoff is well understood by businesses that target the segments.
The customer segment for the Foodco Company will be mass market as the values will be created for both locals and university students. The most important customer for the business will be university students. The university students will be the most important customers because of their sense of taste for fast foods. Both male and female students will be a target. However, the main target will be male students. This is because male university students are renowned for hating cooking. Some of them even think that the work of cooking is a waste of time and are well suited to ladies. They are therefore more likely to purchase foods, especially during lunch hours. Regarding the locals of Melbourne, the main customer segments will be youngsters, families, the elderly, and various business operating in Melbourne.
Value proposition entails the collection of products that are sold by the business. It is essential as it makes a case as to why customers should pick a particular product over the other depending on the uniqueness of a particular product (Caetano et al. 2017, p.315). A business model canvas value proposition offers a unique combination of products which gives value to customers through the provision of value that helps solve the problem experienced by customers. One particular product may have one or many value prepositions.
Foodco business's value proposition will be fast foods that are served quickly and that which will provide constant quality. The business will utilize locally sourced ingredients to design a wide range of enticing sandwiches that will attract a wide customer base. Serving customers will be with speed and smile making sure all of my customers are satisfied. The business’s menu will be rotated on a continuous and seasonal basis, and it will encompass options for an ever-expanding number of customers who need an option that is free of gluten and contaminant.
Customer relationship as a block of business canvas model entails the type of relationship that a business establishes with a particular customer segment (Lewandowski 2016). It is driven by one or more of motivators like customer acquisition, customer retention, and increased sales. It is vital that companies clarify on their motivations and to carry out analysis on their performance to come up with benchmarks like the cost of customer acquisition, the average period of customer retention and integration of motivation with overall company policy (Antikainen and Valkokari 2016). Customer relationships fall under some categories which include personal assistance, dedicated personal assistance, self-service, automated services, communities, and co-creation.
The customer relation with the company will be built online. Customers will be provided with the platform to order their products online which will then be delivered to their preferred location. This will suit customers hosting specific events like campus holiday parties or birthday parties. This relationship will be less costly and time-saving as it will provide a pool of customers to whom large proportion of the product will be sold.
The channel block of a business model canvas entails a business' way of communicating with its customers and how the business' customer segments are reached to deliver the business' value proposition (Joyce and Paquin 2016, 1481). Understanding the best pathway for the business is essential to enable the company reaches the targeted customers. A business may opt to reach its customers through its channels, partner channel or a mixture of both. Channels are vital as it helps raise customer awareness about the products provided by the business as well as deliver the value proposition to customers. Channels include awareness phase, evaluation phase, purchase phase, delivery phase as well as after-sales phase.
Foodco business will distribute its products through a van and on allocations. Customers will be reached through platforms like social media where they will be made aware of the products the business plans to sell and the unit benefits that the business will offer to the customers. Using a van to distribute the business product will help save on costs which would be incurred if other means of transport are used. A van is chosen based on fuel efficiency, reliability, space and residual value. A van provides several advantages. Among the advantages is that it is cost-effective. A van will also offer fast delivery. It also offers other advantages like easy communicating with the driver while it is also ideal for transporting perishable goods which would be Foodco’s main business.
A key activities block of a business model canvas entails vital tasks a business is required to perform to be able to fulfill its purpose (Muhtaroglu et al. 2013, p.32). These actions are primarily stated by the business model and are pivotal in ensuring that an organization fulfills its value proposition. Key activities establish a bridge between the customer segment needs and the value prepositions. Common key activities to businesses include research and development, production, and marketing, sales and customer services. Basis categories of key activities entail production, problem-solving and platform r network.
The key activities that the Foodco business will engage in will be marketing and sell food that includes a diverse range of sandwiches. The business will also come up with an efficient supply chain that will help drive down cost. The activities that will be most important in the distribution channels, customer relations, and distribution streams will be marketing sandwiches.
Key resources entail the main input used by the company to create its value proposition, service to customer segments and deliver product to customers (Dudin et al., 2015). Key resources are the most important things a business requires for its model to function. A business model is usually based on some tangible and intangible resources. Key resources are the business' main assets needed to make the end product, and they usually difference to the key resources used by the competitors.
Foodco business’ key resources will be its employees and location of operation. The most important resources in the distribution channel will be the area of operation and the mode of delivery which will be the business van. A key resource in customer relationships will be an online platform where the business with relating with its customer regarding the product it offers and what is needed to improve the quality of products offered to the customer. Regarding revenue stream, the key resources that will be important to the business will be the product quality and the customer segment dependent.
The key partnership entails a network of suppliers and partners that make the business model work. Partnerships are forged by businesses to ensure that their business models are optimized, risk reduced, and resources are acquired (Dudin et al. 2015). The partnership is grouped into four categories which include strategic alliances between non-competitors, competitions which entails strategic partnerships between competitors, joint ventures through which businesses can be developed and buyer-supplier relationships for assuring reliable buyers. Three motivations apply to key partners, and they include optimization and economy of scale, reduction of risk and uncertainty, and acquisition of particular resources and activities.
Foodco business’s key partners will be local suppliers of fast foods, Expert Board of Advisors, University Research and Health Nutritionists. Other key partners will be warehouse and couriers for goods that will be sold online. Our biggest partners will be local food suppliers as we would be looking for the best food suppliers for the business needs so that the business could maintain a particular quality for the food it deals in alongside the business desired margins. Other partners like truck and equipment suppliers will also be essential as the business would need to get the right suppliers to get my startup equipment and a van. I plan to do business with three similar entities that I shall find fair in my initial interactions.
The revenue structure block of a business model entails a conceptual structure stating and explaining the revenue earning strategy of the business (Vargas et al. 2015). It entails the cash generated by the company from every customer segment. The revenues, in this case, are what keeps the business running. Various mechanisms of pricing may be involved in re revenue stream, and they include fixed list prices, market dependent, and bargaining, and auctioning or yield management. Revenues that results from one-time customer payments are distinguished by a business model from recurring revenues in which ongoing payments deliver value after-sales service of the value proposition to customers. The various ways in which revenue streams can be generated include asset sale, usage fee, subscription fees, lending, licensing, broker's fee, and advertising, pricing mechanisms.
Foodco business' main revenue stream will be generated from the sale of sandwiches delivered to students and online sales. Customers will be willing to pay relatively low prices that will be charged by our supplier as compared to low-quality sandwiches that are charged high prices by the local vendors. Payment will mainly be through cash while other forms of payment will be considered depending on the ease of money withdrawal. The other suitable form of payment will be via PayPal. The revenue stream from the sale of sandwiches delivered to students will constitute 80 percent of the total revenue stream while 20 percent will comprise of the revenue stream that will be generated from online deliveries.
The cost structure entails all the costs that are incurred for a business model to work. The costs can easily be calculated one key resource, key activities and key partnerships are defined. Cost is a major concern for businesses, and the goal of many businesses is usually to minimize as much cost as possible. Business models fall into two different categories, and they include cost driven and value driven business modes (Caetano et al. 2017, p.315). While the former minimizes costs in whichever way possible mostly via low price value prepositions, maximum automation, and extensive outsourcing, value-driven business model focus on premium value prepositions mostly with a high degree of personalized service. Among the characteristics of cost structure include fixed costs, variable costs, economies of scale and economies of value.
Foodco business’s cost structure will comprise of salaries paid to employees, costs of constructing the business facility, the cost of procuring raw material as well as the marketing costs. The key resources that will be most expensive will be the employees and equipment like a business van.
Market feasibility entails the potential customer base and demand for a particular market product as well as the level and type of competition that will be faced by a new market (Currie et al. 2009, p.51). Market feasibility defines the depth and condition of a particular market its ability to supplement a certain growth (Otoo et al. 2016). It defines the products ability to sustain in a particular market whether it can generate a financial surplus for the business or not.
The demand for sandwiches is particularly high in colleges probably because sandwiches are convenient and portable. Also, they are affordable which means that it can be purchased by students from all class levels. Most of all, students love sandwiches because they are delicious. The business is likely to face competition from local vendors in Latrobe who have been in the business for quite some time and understood the market vary. My business hopes to overcome this competition by providing constant quality sandwiches at affordable prices.
Technical feasibility considers whether the technology and resource required are available or not. This entails workforce as well as the technology that is used in delivery (Do et al. 2016, p.194). The technology that will be involved in the production of sandwiches is ready will be similar to the one used by local vendors. The only difference will be branding and packing. Delivery of the product will be enhanced through the use of a van.
Human feasibility entails the analysis of the business employees including suppliers (Sillani and Nassivera 2015, p.342). Key resources for the business will be readily available as there are a bunch of employees and suppliers who have vast experience in food cart business.
Financial feasibility analyses the viability of the business after the total costs and possible revenues has been taken into consideration(Sillani & Nassivera, 2015). In the Foodco business, the revenue that will be generated will cover the cost of the business making it viable. The business will require a small amount of start with key expense being the purchase of a delivery van. Capital will be obtained from a bank loan. An acute increase in sales will cater for the cost of the business as well as the borrowed loan which will be repaid within one year.
Antikainen, M. and Valkokari, K. (2016) A framework for sustainable circular business model innovation. Technology Innovation Management Review, 6(7).
Caetano, A., Antunes, G., Pombinho, J., Bakhshandeh, M., Granjo, J., Borbinha, J. and Da Silva, M.M. (2017) Representation and analysis of enterprise models with semantic techniques: an application to ArchiMate, e3value and business model canvas. Knowledge and Information Systems, 50(1), pp.315-346.
Currie, R.R., Seaton, S. and Wesley, F. (2009) Determining stakeholders for feasibility analysis. Annals of Tourism Research, 36(1), pp.41-63.
Do, S., Owens, A., Ho, K., Schreiner, S. and De Weck, O. (2016) An independent assessment of the technical feasibility of the Mars One mission plan–Updated analysis. Acta Astronautica, 120, pp.192-228.
Dudin, M., Kucuri, G., Fedorova, I., Dzusova, S. and Namitulina, A. (2015) The innovative business model canvas in the system of effective budgeting.
Glicker, J.J. (2014) Food Cart Economics: A Comprehensive Analysis of Portland's Street Food Market (Doctoral dissertation, University of Oregon).
Joyce, A. and Paquin, R.L. (2016) The triple-layered business model canvas: A tool to design more sustainable business models. Journal of Cleaner Production, 135, pp.1474-1486.
Lewandowski, M. (2016) Designing the business models for the circular economy—Towards the conceptual framework. Sustainability, 8(1), p.43.
Muhtaroglu, F.C.P., Demir, S., Obali, M. and Girgin, C. (2013) October. Business model canvas perspective on big data applications. In Big Data, 2013 IEEE International Conference on (pp. 32-37). IEEE.
Otoo, M., Drechsel, P., Danso, G., Gebrezgabher, S., Rao, K. and Madurangi, G. (2016). Testing the implementation potential of resource recovery and reuse business models: from baseline surveys to feasibility studies and business plans (Vol. 10). IWMI.
Sillani, S. and Nassivera, F. (2015) Consumer behavior in choice of minimally processed vegetables and implications for marketing strategies. Trends in Food Science & Technology, 46(2), pp.339-345.
Vargas, I.S., Calva, A.L.G. and Camacho, J.H. (2015) Business model canvas. Ciencia Huasteca Bolet?n Cient?fico de la Escuela Superior de Huejutla, 3(5).