Business Plan for a Food Truck: Costs, Profit and Loss, and Key Performance Indicators
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This business plan covers the costs, profit and loss, and key performance indicators for a food truck. It includes a summary of the business idea, fixed and variable costs, budgeted profit and loss statement, budgeted cash flow statement, breakeven point and margin of safety, and key performance indicators to monitor progress.
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BUSINESS PLAN
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Contents INTRODUCTION...........................................................................................................................3 MAIN BODY..................................................................................................................................3 Summary of Business Idea along with analysis of risk faced and sources of initial funding for the business:.................................................................................................................................3 Discussion of Key fixed and variable cost associated with the business:...................................5 Budgeted Profit and Loss Statement for the First year of Operations:........................................6 Budgeted Cash Flow Statement for the First year of Operations:...............................................6 Breakeven Point and Margin of Safety:.......................................................................................7 Key Performance indicators to monitor the progress of Food Truck:.........................................7 CONCLUSION................................................................................................................................9 REFERENCES..............................................................................................................................10
INTRODUCTION Business Plan refers to projected plan with has been prepared considering the goals and objectives that the entity or business wants to achieve in the future. Those business plans are considered to be successful which covers every financial and non-financial aspects for the organisation as both the factors plays the vital role within the corporations. These reports consist of the business plan relating to food struck that serves the food to general public all around the corner of the city as it run on the vehicle and covers maximum consumers as it can be and considers to be economical as compare to starting the business at those places which required space on rent to start a food chain. This statement shows the overall idea of the plan and cost associated with the business in terms of fixed and variable. It also provides the projected financial statement of a year along with break even point analysis and margin of safety so that profitability of the start-up can be judged accordingly(anak Siba, Maruthaveeran, and Ujang, 2020). MAIN BODY Summary of Business Idea along with analysis of risk faced and sources of initial funding for the business: Industry: Companieson thisenterpriseput togetherfoodand snacksfor instantintakefrom motorizedmotorsor nonmotorized carts,inclusive ofmealstrucks, ice cream trucks, cellularconcession stands, andwarmcaninecarts. Noprincipalcorporationsdominate theenterprise(Burton, 2020). Nature of business: About 2.5billionhumansroundthe arenabuymealsfromcellmealsretailersandroad kioskseveryday,consistent withthe Food and Agriculture Organization of the United Nations. Demand forcellmealsofferingsisexcessivein Asia and Latin America, asroad mealsis a culinary staple innationsalong withBrazil, Thailand, and Indonesia. The U.S. cellmealsofferingsenterpriseconsists ofapproximatelyfive,500 establishments (single- regioncorporationsand branches of multi-regioncorporations) withblendedannualsales ofapproximately$threebillion,consistent withFood Truck Nation. Nature of Competition:
Demand ispushedvia way of means ofcustomertastes,privateincome, andnearby demographics. The profitability ofman or womanorganizationsrelies upononregion selection,mealsquality, andpowerfulmarketing. Largeorganizationshaveblessingsin callreputationandeconomiesofscaleinmealsandgadgetpurchasing.Small organizationscan competeefficaciouslyvia way of means offocusing onparticular mealsmerchandiseand leveraging relationships withnearbysuppliers. Theenterpriseis fragmented: thepinnacle50organizationsaccount forapproximately30% of revenue (Charlebois, Juhasz, and Vézeau, 2021). Key Success factors: Offering aparticular, differentiated menu: Why areclientsgoing toconsumethe meals and what are the particular offering of the food truck. The business isnow no longersimplycompetingin opposition toalldifferent cellmealsvendors,butthe competition is witheachdifferentmeal’schoiceat themarket. First impressionswith the aid of usingthe businessclientsis crucial, the menu has the capacitytolivewith apatronlengthyafter they’ve ordered from it Effectiveexceptionalcontrol: Foodvansshouldpreserveexceptionalrequirementsforeachtheirindustrialkitchen and themealsthey produce and serve. The food trucknearbycouncil’smealsprotection regulatorsyearlylooks atbusinesscellmealsenterprisetomake certain. Eachcountry has a legislative act that coincides with the Australian New Zealand Food Standards Code tomake certainmealson the marketissecureandappropriatefor humanintakeand to save the food truckdeceptivebehaviourwith regards tothe sale ofmeals. Acommunique streamlinetogether along with businessnearbycouncil willmake certainthatenterprise is regulatingthoserequirements(Durmanov, Umarov, and Mirzayev, 2021). Proximity to key markets: This is a no brainer. It iscrucialfor the food truckto beplacedin busyregionswithbig footvisitorsto maximizetheir sales ability. Whether that be atnearbynetworkevents, markets, or a councilapprovedpark and serve location. Abilityto manipulateinventoryon hand:
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In orderin theenterpriseto maximizeprofits, the businessshouldhave amealsgadgetin regionthat avoids wastage and spoilage ofcomponentswhich inflipwilllessencharges to theenterprise. Building andkeepinganetwork: Repeatclientsare thecoronary heartof any hospitalityenterprise. They arethosethatflip upeachWednesdayfor his or herTaco’s witha grinfrom ear to ear. They arethosethat conveyown circle of relativesand friends. Most of all,unswervingclientscreatelogo loyalty andgrowthlogoattentionviaphraseof mouth referrals(Flanigan and Lynch, 2018). Discussion of Key fixed and variable cost associated with the business: Main Cost Incurred: The main cost incurrent in the form of fixed and variable cost in food truck business are being tabulate below: FIXED COSTS Salaries (Fixed)£44,400 Assistant£26,400 General cleaning£18,000 Petrol/Diesel£19,200 Furniture On Truck£4,200 Marketing/Adv£4,500 Electricity/Gas£5,400 Equipment's depreciation£4,200 Truck Maintenance£15,000 Initial costs Baking Machines£2,500 Truck Purchase£150 Kitchen Equipment’s£100 Fripteuse£125 Boilers£150 Cutlery£50 Tables and chairs£275 Others£180 Total fixed costs£1,44,830 Assumption relating to Cost:
It has been assumed in the above cost is that such cost is necessary to start the business and it has been increased by 10 % on per annum basis. Fixed Cost: The fixed cost involved in food truck business has been maintenance cost and purchase cost of the truck, salary payment to chef and helpers, maintenance cost of truck, furniture and kitchen equipment’s used to make the food etc. Variable Cost: The variable cost has been the food ingratiates which are being used to make the food and food truck main food has been hot dogs, burgers, smoothie and sandwiches which are sold on the regular basis(Marek, 2018). Comment on Cost: The fixed and variable cost are being increasing depend upon the demand and supply of the products offered by the business. The variable cost involved will be reduced on per unit basis if sales volume be increased by the food truck. Budgeted Profit and Loss Statement for the First year of Operations: Budgeted Profit and loss Statement: The profit and loss statement of the food truck on projected basis are being covered in excel in the detailed manner. (Covered in Excel) Assumptions consider in preparing the statement: It has been assumed that the sales and profit will be increased gradually on per month basis but there are decrease in sales units also depending upon the demand of the product. Budgeted Cash Flow Statement for the First year of Operations: Budgeted Cash flow statement: The cash flow statement is being prepared on excel of the product sold by Food truck. (Covered in Excel) Assumption Consider in preparing the budget: It has been assumed that cash is received and paid evenly throughout the 12 months period and profit and loss statement and cash flows are being equal.
Breakeven Point and Margin of Safety: Break Even point chart: Calculation of Break - Even Point ProductsFixed CostContributionFixed Cost / Contribution Hot Dogs61337.71314.9512388.17365 Smoothie54320.97423.2716608.88013 Burger50544.02145.159807.080046 Sandwiches152.751.08141.6986187 Key Performance indicators to monitor the progress of Food Truck: Keyoverall performanceindicators(KPIs) are quantifiable measurementsthatmirrorthe elementsyou’ve deemedessentialto thefulfilmentof yourcellmealsbusiness.Performance indicator specific to Food truck are being explained below: Foodcostpercent: Howplentyis the food trucknormalmeal and howtypicallycalculate themealsfeeas apercent of theoverallcommercial enterprisecharges. Food truckdegreeitvia way of means ofincluding theirmealspurchases for the week andevaluatingthe onesfiguresin theirweeklymeal’s income. Dependingat thesort ofdelicaciesthey serve, thisquantitycanvarietyfrom 25 to 35 percentage(Närvänen, Mattila, and Mesiranta, 2021). Weeklyincome: Thisquantityiscertainly considered one amongthe same oldincome-associatednumbersthat everybodyseemsat. The weeklyincomecanrangeextensivelyfrom one truck to the next. The keyquantitytohave a take a observeis anyalternatethe businesslocatesfrom week to week and the way itcompares toprecedingyears. Totalexertionsfee: Totalexertionsfeeiscertainly considered one amongthe most importantchargesthe business incurs as amealstruck owner. Hence, thepurposethe entityneeds tocontinuouslypreservesong of it. Theexertionsfeehas tovarietyfrom 25 to 35percentageof the businessoverallcharges. Totalexertionsfeeconsists ofearningsor hourly wages, benefits, insurance, retirement, and bonuseswhich the entitypay toherselfand theirpersonnel(Schramm, 2018).
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Labour hours: How many hours do the businesspersonnelpaintingsat some point ofasuretime frame is crucial in the business? The business canexaminethosehoursin opposition totheirincometo degreetheproductivenessof theirbody of workers. Turnover: Count the positions the business employ,after whichdivide thisquantityvia way of means ofthe quantityofhumansthey havehiredat some point ofasuredurationof time(Szyliowicz and Green, 2019).
CONCLUSION Business Plan refers to projected plan with has beenorganizedthinking aboutthedesires andgoalsthat the entity orcommercial enterprisedesires toacquirewithinside thefuture. Those commercial enterpriseplans aretaken into considerationtoachieve successwhich coverseach monetaryand non-monetarycomponentsfor theenterpriseaseachtheelementsperformsthe essentialpositionin thecorporations. Thesereviewsencompassthemarketing strategyregarding mealsstruck that serves themealstopopularpublicall over thenookof thetownbecause itrun at theautomobileand coversmostcustomersasit maybe and considers to becompetitively pricedasevaluatetobeginningthecommercial enterpriseatthe oneslocationswhich required areaonhireto beginamealschain. Thisassertionindicatesthe generalconceptof the plan and valuerelated tothecommercial enterpriseinphrasesofconstantand variable. Itadditionally offersthe projectedmonetaryassertionof a12 monthstogether withsmashevenfactor evaluationand margin ofprotectionin order thatprofitability of the start-upmay bejudged accordingly.
REFERENCES Books and Journals anak Siba, M.A.J., Maruthaveeran, S. and Ujang, N., 2020. Investigating the use and constraints associatedwithgreenoutdoorenvironmentatworkplaces:Whatdotheoffice employees in Kuala Lumpur say?Urban Forestry & Urban Greening,51, p.126692. Burton, J., 2020. Supporting entrepreneurs when it matters: optimising capital allocation for impact.Journal of Entrepreneurship and Public Policy. Charlebois, S., Juhasz, M., and Vézeau, J., 2021. A review of Canadian and international food safety systems: Issues and recommendations for the future.Comprehensive Reviews in Food Science and Food Safety,20(5), pp.5043-5066. Durmanov, A., Umarov, S., and Mirzayev, S., 2021. Development of the organizational and economic mechanisms of greenhouse industry in the Republic of Uzbekistan.Journal of Environmental Management & Tourism,12(2), pp.331-340. Flanigan, K.A. and Lynch, J.P., 2018, June. Community engagement using urban sensing: technology development and deployment studies. InWorkshop of the European Group for Intelligent Computing in Engineering(pp. 92-110). Springer, Cham. Marek, E.U., 2018. The post-incarceration kitchen: Food-based community organizing and employment after imprisonment.American Studies,57(3), pp.57-79. Närvänen, E., Mattila, M. and Mesiranta, N., 2021. Institutional work in food waste reduction: Start-ups'roleinmovingtowardsacirculareconomy.IndustrialMarketing Management,93, pp.605-616. Schramm, C.J., 2018.Burn the Business Plan: What Great Entrepreneurs Really Do. Simon and Schuster. Szyliowicz, D. and Green, T.G., 2019. Making strategy “Real”: Using reality television for innovatingteachingapproaches.TheInternationalJournalofManagement Education,17(3), p.100304. Weissman, E., Robinson, J. and Cecio, W., 2020. The promise and pitfalls of mobile markets: an exploratory survey of mobile food retailers in the United States and Canada.Agriculture and Human Values,37(3), pp.895-906.