Business Plan for Meal Kit Delivery Start-up Firm

This report includes a business plan for meal kit delivery start-up firm. It covers executive summary, company description, business objectives, market analysis, operational plan, strategy for growth, organization and management, and financial information.

Entrepreneurship

Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Executive Summary.....................................................................................................................4
Company Description..................................................................................................................4
Business objectives......................................................................................................................4
Market Analysis...........................................................................................................................5
Operational Plan..........................................................................................................................6
Strategy for growth......................................................................................................................8
Organization and management....................................................................................................8
Financial Information..................................................................................................................8
Detailed evaluation of success factors and issues which impact the start-up............................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
A business plan is described as written documentation which includes information about
business goals and methods of achieving the business goals of the company (Barnick, 2017). An
effective business plan guides enterprisers through every stage of small business management to
successfully attain business objectives. The present report includes a business plan for meal kit
delivery start-up firm. This includes executive summary. Company description, short-term and
long term goals of the company along with competitor analysis. Legal status, organizational
structure, financial information and marketing and sales operations of the company are described
in the business plan. Operational plan of start-up is provided along with detailed evaluation of
success factors and issues impacting the company.
MAIN BODY
Executive Summary
The ways of attaining short- and long-term goals of the company are completed in the
business plan for the meal-kit delivery start-up firm. The competitor analysis states that the
arranging power of consumers, competitive intensity and threat of new entrants are high while
other forces are low. The legal identity of the firm is LLP. This is linked with potential, risk and
investment of the company. Operational plans and success factors of the start-up are described
such as increasing digital shopping.
Company Description
The start-up company offers meal kit service to consumers in UK. This includes recipe
box fort wide range of vegan cuisines including previously measured ingredients so that the
recipe can be prepared quickly. The company will offer 24/7 delivery services and meal kits will
be offered in sustainable packaging. The starting monthly subscription price is 20 pounds with
six meal kit deliveries every month. The start-up will charge additional price for faster delivery.
There are different subscriptions for families, large groups and individuals with vegan diet. In
addition to this, consumers can select from wide variety of cuisines form all over the globe to
cook healthy and sustainable food.
Business objectives
Short term business goals:

 To increase traffic on company website
 To expand vegan product range To expand delivery services across UK
Long term goals
 To increase market share in UK
 To expand in Asia and Europe
 To increase profits by 20%
Market Analysis
Competitor Analysis
The competitor analysis of the meal kit industry is completed with the help of Porter's
five forces analysis. This tool helps determine the level of various competitive force present in an
industry (Vašík, 2017). The competitor analysis of UK meal kit industry and linkage of
competition with potential, risk and investment is provided below: Intensity of competition: The level of competition in the UK meal kit delivery industry is
high. The reason behind this level of the competition is that there are many global as well
as domestic players operating in this market. Hello Fresh UK, Mindful chef, Allplants,
Gousto's, Sun Basket, Freshly, Pasta Evangelists GoodFood Market and Sun Basket UK
are names of some of the domestic and global competitor present in the meal kit delivery
market. In context of the start-up high intensity of competition increases risk and need for
investment in marketing operations. This is because large number of firms are competing
in small industry which started growing recently. The firm needs to make heavy
investment in marketing in order to reach high potential. Bargaining power of the suppliers: This refres to the ability7 of suppliers to control price
(Aristeridou, 2018). In case of the meal kit services industry in UK the bargaining power
of suppliers is low. This is because the raw material require to build recipe box includes
sustainable packaging vendors and suppliers of food ingredients. Large number of
suppliers offer cooking ingredients and sustainable packaging of equal quality. This
reduces the ability of suppliers to influence price of the meal kit services. The low
influencer of suppliers increases growth potential of start-up as the company will be able
to offer high quality products at low price. The investment in raw materials and risk is
reduces as the start-up will have fill control over their suppliers.

 Bargaining power of the consumers: The meal kit industry faces high bargaining power
of consumers. This is because of wide range of rival services competing for the cook and
eat meal kit delivery services. This increases the price sensitivity of consumers and their
influence on prices of the services. The business start-up will be able to reduce this
bargaining power and increase growth potential as prices of the meal kit services are
lower than their competitors. In addition to this the start-up offers sustainable services at
low price which will attract price sensitive consumers from rival firms and contribute to
company growth. This will reduce risk while increase investment in marketing to
promote low pricing. Threat of new entrants: This force focuses on ability of new entrants to gain market
share of existing firms (Verble, 2017). The meal kit industry faces low high threat of new
entrants. This is because this industry does not require large amount of investment or
brand name to attract consumers. This increases the risk faced by start-up firms and
reduces the growth potential as new entrants can easily take the market share of the start-
up firm. It is important for the company to financially invest in consumer relationship
management to gain loyal consumers and protect the firm from risk of new entrants.
 Threat of substitute product: The threat of substitute products for the meal kit industry
is low. The only useful substitute service for meal kit service is heat and eat recipes
which require consumers to eat specific reheat specific dish to consumer the food. Other
substitute for cook and eat delivery service are restaurant delivery and cooking on own.
Restaurant delivery and heat and eat food does not offer fresh home cooked food while
coking on own is time consuming and difficult. This makes these substitute imperfect
which decreases the threat of substitute products. This reduces the risk and helps the
business start-up attain growth potential. This competitive force affects investment of the
company as the firm needs to focus on offering meal kits which enable consumers to
cook fresh food easily at home.
Operational Plan
Operational Objectives
 Technological Operational Objective; To Develop mobile application in different
languages by January 2022 to offer better consumer experience.

 Marketing Operational Objective: To increase online brand visibility by 50% by
January 2022 through Search Engine Optimization and influencer marketing.
 Sales Operational Objective; Ti increase sale of green subscription by 20% by January
2022.
Production Process
In order to meet operational objectives start-up firms need to ensure that every
department of their company is equipped with required resources to complete their tasks in a
timely meaner (Vandervalk and Snyder, 2017). The primary resources for the production process
at Meal Kit services start-up are provided below: Suppliers: The primary suppliers for the start-up firm are food ingredients suppliers. The
company will collaborate with wholesaler of food ingredients to gain fresh ingredients at
low price. In addition to this suppliers of sustainable packaging material are also needed
for the production process of the company.
 Equipment &Technology: The technological equipment needed includes equipment to
measure kitten hygiene, commercial kitchen technology, computer network to handle
online orders.
 Cost: The overall costs of various production resources will be £50,000.
 Location: The company premises which are commercial kitchens will be located in
Urban areas throughout UK.
 Work Hours: There will be two shifts for kitchen and delivery employees to serve
consumers any time of the day.
Business Milestones
Market Milestone:
 To perform price change evaluation for various subscriptions by November 2021.
Financial Milestone:
 To increase revenue by 15% within six months of market entry.
 To gain funding from venture capitalists.
Production Milestones:
 To develop product prototype for multi-lingual application by October 2021.
 To test prototype with group of consumers and gain feedback by November 2021.

Strategy for growth
Market penetration is the selected growth strategy for the meal kit services start-up firm.
This strategy centres around maximising market share of the company by increasing the sale of
existing services in the existing market (Spinedi and et. al., 2019). The respective meal kit start-
up will increase marketing investment and collaborate with food delivery service provider to
make the services of the company accessible in every part of UK at any time of the day. In
addition to this prices of global cuisine subscription will be decreased strategically to attract new
consumers for every subscription offered by the company. The advantage of market penetration
stratify is that it helps in quick diffusion of the product in the marketplace and builds goodwill of
the company. The respective start-up firm will be able to use this strategy to discourage
competitors and gain market leadership. The disadvantage of this business strategy it creates low
cost brand perception of the company which is not suitable for targeting high income consumers.
The meal kit services start-up needs to build specific marketing strategy targeting high income
consumers to reduce negative impact of market penetration.
Organization and management
Legal Status of the business: Liability partnership will be the legal status of the
company. Legal identity of LLP reduces financial risk as LLP as it requires low registration fees
and there is no minimum authorization capital (England and Faulkner, 2019). LLP can be
registered quietly which enables the start-up to launch their services in the market as quickly as
possible and attain growth potential.
Organizational structure of the business: The organizational structure for the start-up
will be hierarchical organizational structure. This is because it helps in timely attainment of goals
in fast paced environment (Maslak, 2018). In addition to this hierarchical organizational
structure will ensure smooth functioning of the company during peak seasons.
Financial Information
Cash flow Analysis:
Cash Flow analysis is defined as method which helps in analysing the expenditure and
income of a business firm in specific time time period (Lillqvist, 2019). The cash flow analysis
of the meal kit start-up is provided below;
Cash receipts

Cash in hand 2500
Investment 6000
Estimated sales 40000
Loan 9000
Total cash receipts £ 57500
Cash payments
Fixed cost
Interest on loan 1000
Rent 2500
Insurance 1500
Salary of employees 6000
Variable cost
Electricity cost 600
Raw material cost 1400
Wages 2000
Total cash payables 15000
Cash flow £ 42500

Profit and Loss Statement: This financial statement includes information about overview
of income, costs, expenditure and revenue of company for a particular time period. The profit
and loss statement for Meal kit start-up is provided below :
Profit and loss statement
sales 40000
Less: cost of sales 3000
Gross profit 37000
Less: operating cost
Fixed cost
Interest on loan 1000
Rent 2500
Insurance 1500
Salary of employees 6000
Variable cost
Electricity cost 600
Raw material cost 1400
Wages 2000
Net profit £ 22000
Balance Sheet of Meal kit Start-up

Assets
current assets
Cash 3500
Investment 5000
Debtors 1500
Fixed assets
Machinery 10500
Total assets £ 20500
Liabilities and equity
Current liabilities
Creditors 500
Long term liability
Loan 3500
Total liabilities 5000
Equity

Reserves 10750
Share capital 750
Total liabilities and equity £ 20500
Breakeven
BEP calculations:
Variable expenses 5600
Fixed cost 16150
Sales 35000
Contribution sales-variable expenses
29400
PV ratio Contribution/sales*100
84 %
BEP in pounds Fixed cost/PV ratio
192 pounds

Detailed evaluation of success factors and issues which impact the start-up
Success Factors
 Increasing digital shopping: Consumers all across UK are using digital channels to shop
for food. Pandemic and remote working are one of the primary reasons behind the rise of
digital shopping among UK consumers. Internet sales as a part of total sales of the in UK
increased by 2.8% in November 2006 to 18.9% in February 2020 (The curious origins of
online shopping, 2021). The sales increased by 30% in April of 2020 due to imposition of
COVID-19 restrictions. This terotechnological factor plays an important role in success
of Meal Kit services company as it promotes the usage of online medium to purchase
food requirements.
Positive Impact: As more and more consumers all over UK get acquainted with online
shopping, the target consumer base of the company will increase and help the company gain
more profitability.
Negative Impact: The high intensity of competition from other meal kit-service
providers with strong online presence will give tough competition to the start-up firm entering
the industry. The firm needs to take various measures such as intense market strategy to
eliminate this negative impact of one of the primary success factors.
 Creative Idea: The creative and unique offering of the company which focuses on
providing consumer sustainable cook and eat recipe boxes at an affordable recipe is a
factor which will contribute to the success of the start-up company in the meal kit
industry. Environmental concerns impact consumer preference and will help the company
gain competitive advantage over rival firms.
Positive Impact: The sustainable elements of the meal kit service will attract consumer
attention and envisage consumes to shift to the meal kit delivery service in order to have better
impact on the environment.
Negative Impact: The sustainability efforts will increase the cost of the company in
exchange of providing the company a unique selling proposition.
Challenging Issues
 Labour shortage: Brexit has created labour shortage in UK because of the strict visa
criteria for non-UK workers applying to live and work in UK. This will reduce the UK
workforce as cheap labour provided by EU citizens living in the UK will be lowered.

This creates recruitment challenge for the start-up firm as talented individuals are
essential for success of company.
Positive Impact: The primary positive impact of labour shortage in UK is that the
company will be able to search for highly talented individuals easily.
Negative Impact: Labour shortage reduces the availability of cheap labour for manual
tasks such as delivery of meal kit recipe boxes. This will increase financial risk and challenges of
attaining profitability quickly to gain funding from investors and venture capitalists. It is
important for the respective enterprise to gain talented labour at minimum cost so that the quality
of operations is not lowered while keeping the expenditure minimum.
 Economic Downturn: The economic downturn in UK caused by COVID-19 pandemic
affects the growth of small business enterprises.
Positive Impact: The economic downturn will force current consumers of meal kit
services to select the moot affordable option in market which is the respective company.
Negative Impact: The economic downturn will discourage consumers from reducing
their expenditure on costly food and save money to recover from the crises. This will negatively
affect the profitability of the company.
CONCLUSION
From the above report it is determined that business plan includes details about the path
ways in which a company can attain their organisational objectives. A business plan needs to
include an executive summary, company description, business objective, operational plan and
financial information. The operational plan of a company includes information about operational
objectives and resources required to complete the production process along with business
milestones. The financial resources are an important part of business plan as they contain
informations about cash flow and include break-even analysis. It important to conduct
competitor analysis of the company and determine it's legal status to understand the risk,
potential and investment associated with the company. In addition to this detailed evaluation of
success factors and challenges affecting growth of start-up firm is required to prepare for future
market conditions faced by the firm.

REFERENCES
Books and Journals
Aristeridou, M., 2018. Development of a business plan for a Social Cooperative Enterprise
(SCE) with healing organic plant products and herbs through an online venture.
Barnick, J. J., 2017. Tire bricks business plan (Doctoral dissertation).
England, K. K. and Faulkner, D., 2019. Competitive Differentiation Strategy Plan: A Golf Ball
Recycling Industry Deep Dive.
Lillqvist, J., 2019. Plan for profitable entry to the Swedish market by a Finnish startup company.
Maslak, M. A., 2018. Country-Level Initiatives: Singapore’s Reflections on and Plan for
Women’s Entrepreneurship. In Education and Female Entrepreneurship in Asia (pp. 67-
74). Palgrave Macmillan, New York.
Spinedi, G. and et. al., 2019, June. Guideline for enterprise to a Value Plan through Blockchain
and ICO. In 2019 IEEE International Conference on Engineering, Technology and
Innovation (ICE/ITMC) (pp. 1-8). IEEE.
Vandervalk, A. and Snyder, D., 2017. US Department of Transportation Roadway
Transportation Data Business Plan (Phase 3): Data Business Plan Development for State
and Local Departments of Transportation (No. FHWA-HOP-18-009). United States.
Federal Highway Administration.
Vašík, R., 2017. Start-up in the Field of Strength and Conditioning: A Business Plan.
Verble, M., 2017. Assessing the Impact of a Pharmacy Class Business Plan Project on
Advancing Pharmacy Services in North Carolina
Online
The curious origins of online shopping, 2021. [Online]Available through
<https://www.bbc.com/worklife/article/20200722-the-curious-origins-of-online-
shopping>