Business Plan for DELIGROCE: Fundamentals of Entrepreneurship Project

This report presents a detailed business plan for DELIGROCE, an internet-based application designed to deliver groceries to customers' doorsteps. The plan addresses the growing e-commerce trend and the need for convenient solutions in today's busy world. It includes an executive summary, table of contents, business description, industry analysis, technology plan, marketing plan, financial plan, production plan, and organizational and operational plans. The business model focuses on connecting customers with local grocery stores through a user-friendly mobile application, addressing potential trust issues by partnering with established vendors. The industry analysis covers market trends, competitor analysis (including Aldi, Grocery Run, and others), and market forecasts. The technology plan details the required application features, technology comparisons, and commercialization requirements. The marketing plan outlines the target market, product/service offerings, pricing, distribution, and promotion strategies. The financial plan includes break-even analysis, cash flow statements, and balance sheets. The organizational and operational plans provide insights into the business's structure and day-to-day operations. The plan aims to capitalize on the increasing demand for online grocery services and the convenience it offers to consumers.

Running head: FUNDAMENTALS OF ENTREPRENEURSHIP
Fundamentals of Entrepreneurship
Name of the Student
Name of the University
Author’s note

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Executive Summary
This report includes a business plan for the new business venture DELIGROCE. It is an
internet based application which is basically a service provider to deliver groceries at the
doorsteps of the target customer. The idea of this service is to make the lives of already busy
individuals a little less hectic. Based on the growing popularity of e-commerce powered by
internet trend and considering we are living in the virtual world it is only fitting to develop an
innovative idea of business on the fundamentals of internet usage. The idea of the new business
is to craft an inventive application for the purchase and delivery of grocery items. For an
individual who has a family or even if he or she lives alone needs groceries, it is very essential
part of the livelihood that one leads. Grocery shopping is like a task of the week or month that is
tedious but also has become a part of life and hence most people end up enjoying it despite of it
being tiring and drab.

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Table of Contents
Executive Summary.........................................................................................................................1
Table of Contents.............................................................................................................................2
1.0 Description of the business...................................................................................................4
Type of industry:..........................................................................................................................4
Mission statement:.......................................................................................................................4
Business Model:...........................................................................................................................5
2.0 Description of the Industry........................................................................................................6
Future outlook and trends............................................................................................................6
Analysis of Competitors..............................................................................................................7
Industry and Market forecasts.....................................................................................................8
3.0 Technology Plan........................................................................................................................8
Description of technology............................................................................................................8
Technology comparison...............................................................................................................9
Commercialization requirement..................................................................................................9
4.0 Marketing Plan.........................................................................................................................10
Market segment.............................................................................................................................10
Product and service....................................................................................................................11
Pricing........................................................................................................................................11

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Distribution................................................................................................................................11
Promotion..................................................................................................................................11
5.0 Financial Plan..........................................................................................................................12
Break even Analysis..................................................................................................................12
Pro Forma Cash flow Statement................................................................................................12
Pro forma balance sheet.............................................................................................................13
6.0 Production plan........................................................................................................................14
7.0 Organizational plan..................................................................................................................14
Form of Ownership....................................................................................................................14
Organizational Structure............................................................................................................14
8.0 Operational plan.......................................................................................................................15
Reference List:...............................................................................................................................16

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1.0 Description of the business
With the advent of modern technology and the increased usage of the Internet due to reasons
like reduced cost of data and availability of data, common people have become more and more
dependent on the internet to lead their livelihood. Starting from booking a cab to buying clothes
and accessories online and also booking a doctor’s appointment everything is possible through
internet and Smartphone. The world has crunched in its size thanks to the increased use of
internet and internet based applications (Barnes and Hunt 2013).
Type of industry:
The industry that the business will be operation on is the e-commerce or the e-market,
this is a virtual place of business that exists and is in full rage now. Jeff Bezos the owner of an e-
commerce giant, Amazon, has recently been awarded the title of the world’s richest person.
Hence it can be clearly understood that there is a huge capacity of this market if it is used wisely
and with proper planning. The E-market is a place that has a lot of pros and cons and the biggest
pro being the braking of the geographical barrier opening a wider scope of the target market. One
of the major cons of the e-commerce sector is that an individual cannot use the service that is
being offered if he or she does not have a Smartphone or a computer with working internet plan
(Awa, Ojiabo and Emecheta 2015).
Mission statement:
The vision and mission this new business idea is to create a positive thinking for the
online grocery material purchasing. To make the consumers understand the optimum utility of
the service. Another positive and innovative point of this application will be the choice of shop
from where the consumers will receive their desired product at their door step. In this way the

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retail stores also can sing up and supply the products without being out of business (Ong and The
2016).
Business Model:
The suggested name of the service and the new business idea is DELIGROCE. It would
include an internet based mobile application that can be downloaded from App store. The city
which is suggested to be the point of inception of the operation is Adelaide. Adelaide is a
geographically smaller city in comparison to others in Australia, but it has a youthful crowd who
use internet on a daily basis and are also open to new and innovative ideas of livelihood hence
Adelaide will prove to be a good start to the new business. First of all technical support will be
required in order to develop an application based portal which is not only user friendly and easy
to use but also has two sides to it one is the consumer end and the other is the vendors end.

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The business model of the new idea will flow a two course path that is going to run
parallel to each other. One is the vendor side and the other is the customer side. To combat the
busy time table that individuals lead nowadays there are several services that are available in the
internet. This business model also follows the same path as the customer side of the model is
planned and designed in a way that the time and effort of the consumers are reduced so that they
can indulge their time in something more worthwhile. But, there is always a trust issue with the
products that are available in the virtual world, especially if the products are in the perishable
goods category and most groceries are in this category. To deal with this dilemma of the
consumers there is the vendor side of the model, which is to sign up with local grocery stores
that the consumers usually visit and trust so that along with the products the customers can also
choose the stores from which the products are going to be bought. Good quality products are
going to be delivered by the suppliers and grocery shops, the shops will pack the orders received
from the mobile application and supply it to the delivery partners of the company. The idea is to
remove the hoarding of the inventories and stocks as the market is dealing with goods that can
easily be perished therefore cutting on a large amount of capital investment on the stocking of
inventories and warehousing charges etc (Chaffey 2015).
2.0 Description of the Industry
Future outlook and trends
In today’s world the schedule that an individual follows is very bus and hence there is an
upward trend of the internet based market. As it saves time and effort of the people it is growing
and gaining popularity with the reduced cost of internet and data plans. In the next five years the
expectation of the consumers form the e-commerce sector is going to increase and hence there is

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a lot of opportunity for the business to upgrade and expand in other cities as well. There is drone
delivery system in 30 minutes and virtual trying of clothes and shoes also possible.
Analysis of Competitors
There are a number of players in this market already as it has a lot of opportunities the
biggest threat being the supermarket retailer giant Aldi. It is a retail market but it has a strong
presence online as well. In a very little time the company has garnered a lot of good reputation in
the Australian sector as well owing to the reasonable cost and high quality products that they
offer. As Aldi has a home grown brand it can offer very low price of products and offer high
quality (Kurnia et al. 2015).
The business model is a little different form that of the DELIGROCE as in this business
model the products are going to be delivered from a selected store to the consumer and the
business itself will not own any products of its own. It will just as service providers for
delivery of fresh and high quality grocery from the selected stores. Grocery Run is another
major competitor some of the services that it offers are $9.99 flat shipping rate all over
Australia which is a big marketing plus point for the company, apart from that it also offers
great discounts on items. Furthermore, customer’s usually like to physically check grocery
items such as fruit, vegetables, meat and eggs before purchasing them; hence the retail is a
big competition to the market (Falk and Hagsten 2015). Here is a list of other potential
competitors:
 Woolworths
 Coles
 Harris Farm

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 Australian Farmers Direct
 Shopwings
Industry and Market forecasts
The market of the retail grocery is lead by some of the big players like Metcash,
Wesfarmers, Woolworths Limited, Aldi and many more and hence the online service of grocery
is still yet to gain popularity even among the urban population. In the last financial year 2016-17
and considering the numbers of the past five years, industry revenue has seen an upward rise and
opportunity and the approx number that is annualized 15.8%, to reach $2.7 billion. The target
market of the industry is still dealing with the new idea of buying groceries online as there is a
huge possibility of getting tampered goods because the market deals in perishable items as well.
The widespread set of connections of the significant supermarket chains of Australia like Coles
and Woolworths, the proximity of the stores form the location of the people have made the
online industry of groceries a tough competition as people get a local store very close to their
house or locality where they can choose the desired goods from the aisle of these store. The
online grocery industry in Australian is expected to grow in its capacity to be worth AU$5.8bn in
2020, which is over twice its current value of AU$2.7bn. Currently the sales of the online market
are at 2.3%, which is analyzed to grow to 4.1% of online grocery sales by 2020
(retailanalysis.igd.com, 2017).
3.0 Technology Plan
Description of technology
The technology that is required for the inception of the business plan is mainly an
application development that is going to be available both in the android play store and also in

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ISO app store. the application must have some of these features: User-friendly, easy to
download, easy to sign in, a section of notes where a person can set reminders, an option on
uploading documents which is necessarily the list of items so that the items can automatically
move in to the cart of the account. There should also be an analysis metrics in the app which will
analyze the buying trend of the consumer and give the customer options while purchasing
suggesting new and upgraded products. There also should be a provision for the customers to
give the vendors review so that more and more people can order form a particular store, this can
be used as a shared marketing tool with the business.
Another important aspect of the business is partnering up with a delivery service which is
going to serve the company and help the business with the logistics (Cosenz and Cosenz 2017).
Technology comparison
Most of the application of the online grocery market deal with similar kind of application
based program where the customer can pick and choose form by looking at the pictures. There
are several companies which offer free shipping after a certain amount along with 24 hrs delivery
service. There also provisions available for return of items that the customer did not like. There
are applications and websites who just focus on home grown items and encourage Australian
vendors. A lot of these plans can be imitated by DELIGROCE as well in the future (Kaptein and
Parvinen 2015).
Commercialization requirement
The first requirement is to understand the local customer and the mind set along with it
build al list of supermarkets and local stores who are the potential vendors of the company. The
user interface of the application has to be attractive and at the same time engaging for the

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customers to understand the application easily and use it without any hassle. There should be a
GPS navigator built in to connect with the delivery boys in no and keep in contact with them
(Fernie and Sparks 2014).
The resources that are required to develop this internet based application for both the Android
and IOS module is first skilled and trained software technician, a partnership with a friend of the
entrepreneur who owns an application designing company is proposed. The next import resource
that is required by the company is a trained business development and marketing team who will
present the companies and bring aboard vendors by analyzing and identifying a list of
supermarkets and local grocery stores. Another major requirement of the initial start up of the
business is a content team who will manage the basic content of the application (Brooks, Heffner
and Henderson 2014).
4.0 Marketing Plan
Market segment
Demographic: The target market of the business is people who buy their own grocery 20-60
years old.
Geographic: Initially the geographic area that is going to be focus on is Adelaide.
Psychographic: People who have a busy lifestyle and want to take out time form their busy
schedule to indulge in some quality time with oneself or friends and family.

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Behavioral: A person who is tech savvy and understands the usage of such applications, someone
who is a regular e-commerce website user, and is not skeptic about the quality of service offered
by e-commerce websites and applications (Hennart 2014).
Product and service
The company is going to offer a service to the customers of delivering the groceries that
can be ordered online via an application. On the vendor end, the company is going to offer a
platform for the local grocery stores to set up an online presence and reach out to people who are
their potential customers (Turban et al. 2015).
Pricing
The price will be two folds one form the customers end and one from the vendors end.
The delivery charges are kept at the minimum and will be free after a certain point of purchase.
From the vendors end it will be a contract of the service for 6months, 8months and 12 months
option to choose form. The vendors can renew their contract on the basis of their choice.
Distribution
The distribution of the products will be done by the delivery partner and the delivery will
be monitored by the GPS system that will be developed for the app and for the back end usage.
Promotion
Promotion of the business will be done via medium which is most used by the target
market. Digital and internet based marketing is the best option for the business (Rawat and
Divekar 2014).

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5.0 Financial Plan
Break even Analysis
Monthly Revenue Break-even $65,000
Assumptions:
Average Percent Variable Cost 30%
Estimated Monthly Fixed Cost $46,925
Pro Forma Cash flow Statement
1st year
Starting Cash Position
Inflow (individual investment)
Sales from customers $10,200
Sales from vendors $110,200
Other Cash Receipts $15,000
Total Cash Inflow $357,900
Outflow (Use of Fund)
Fixed Cost $180,500
Administration $15,000
Marketing $2,800
Operations $112,000
Total Cash Outflow $310,300
Closing Cash Position $47,600

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Pro forma balance sheet
Assets
Current assets
Cash $40,000
Petty cash 1000
Accounts receivable 20,000
Fixed assets
Technology 35,000
Total assets $96,000
Liabilities
Current liabilities
Accounts payable 75000
Payroll accrual 10000
Long-term liabilities
Borrowings 11000
Total liabilities $96,000

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6.0 Production plan
The production of the technology is given to another firm which specializes in the
technology development sector. This firm belongs to the friend of the entrepreneur and hence a
mutual benefit and understanding will be much better than any other outsourced unit. The
company will be offering a service and not a product hence the option of production is
unavailable but for a service industry as well has a production procedure in this case is the
development of the technology is part of the production (Cannone and Ughetto 2014).
7.0 Organizational plan
Form of Ownership
The form of ownership of the business is sole proprietorship where the entrepreneur is the
sole owner and the receiver of any profit that is drawn from the business. He or she is the person
who is the risk taker and the risk barer of the company.
Identification of Partners
The firm will need collaboration with the technology support company and will also have
a delivery partner of the venture to begin with. Both the technology and the delivery are
significant to the company, the future plans are to set up own logistics phase in the future while
expanding the business.
Organizational Structure
It is an independent venture and will be released at small scale only for the customers in
the Adelaide area. The entrepreneur of the company is the person who is all in all in the

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management. Apart from that there is a marketing and business head along with a content
manager in the establishment. There are around seventeen employees in the marketing, operation
and the content team.
8.0 Operational plan
The aim is to launch the application as soon as possible as the online grocery market of
Australia is expected is the eight largest in the world with full potential to
grow exponentially over the next five years. Before the launch some promotional
activity will occur to kick start the download process. Six months before the launch the
application will be used extensively by the technology team to understand and deal with the short
comings (Wang et al. 2016).
9.0 Summary
The prospect of this business is dependent on the acceptance of the idea among the urban
population of Adelaide. There is tough competition of the retail stores on the online front in the
grocery sector. The development of the application and the smooth running of the app will the
prime focus at the initial stages. While, the marketing team at the will concentrate on finding the
vendors to participate and collaborate with the application. By the end of the first financial year
there is an expected growth in the industry and in the outlook of people hence focusing on
expanding in other adjacent cities as well.

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Reference List:
Awa, H.O., Ojiabo, O.U. and Emecheta, B.C., 2015. Integrating TAM, TPB and TOE
frameworks and expanding their characteristic constructs for e-commerce adoption by
SMEs. Journal of Science & Technology Policy Management, 6(1), pp.76-94.
Barnes, S. and Hunt, B. eds., 2013. E-commerce and v-business. Routledge.
Brooks, G., Heffner, A. and Henderson, D., 2014. A SWOT analysis of competitive knowledge
from social media for a small start-up business. The Review of Business Information Systems
(Online), 18(1), p.23.
Cannone, G. and Ughetto, E., 2014. Born globals: A cross-country survey on high-tech start-
ups. International Business Review, 23(1), pp.272-283.
Chaffey, D., 2015. Digital business and E-commerce management. Pearson Education Limited.
Cosenz, F. and Cosenz, F., 2017. Supporting start-up business model design through system
dynamics modelling. Management Decision, 55(1), pp.57-80.
Falk, M. and Hagsten, E., 2015. E-commerce trends and impacts across Europe. International
Journal of Production Economics, 170, pp.357-369.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.

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Hennart, J.F., 2014. The accidental internationalists: a theory of born globals. Entrepreneurship
Theory and Practice, 38(1), pp.117-135.
Kaptein, M. and Parvinen, P., 2015. Advancing e-commerce personalization: Process framework
and case study. International Journal of Electronic Commerce, 19(3), pp.7-33.
Kurnia, S., Choudrie, J., Mahbubur, R.M. and Alzougool, B., 2015. E-commerce technology
adoption: A Malaysian grocery SME retail sector study. Journal of Business Research, 68(9),
pp.1906-1918.
Ong, C.E. and Teh, D., 2016. Redress procedures expected by consumers during a business-to-
consumer e-commerce dispute. Electronic Commerce Research and Applications, 17, pp.150-
160.
Rawat, S. and Divekar, R., 2014. Developing a Social Media Presence Strategy for an E-
commerce Business. Procedia Economics and Finance, 11, pp.626-634.
retailanalysis.igd.com. (2017). Australia’s online grocery market set to double. [online]
Available at: https://retailanalysis.igd.com/news/news-article/t/australias-online-grocery-market-
set-to-double/i/10350 [Accessed 9 Sep. 2017].
Turban, E., King, D., Lee, J.K., Liang, T.P. and Turban, D.C., 2015. Electronic commerce: A
managerial and social networks perspective. Springer.
Wang, K.J., Widagdo, J., Lin, Y.S., Yang, H.L. and Hsiao, S.L., 2016. A service innovation
framework for start-up firms by integrating service experience engineering approach and
capability maturity model. Service Business, 10(4), pp.867-916.