Photography Studio Business Plan
Families need photographs to capture the special moments of their lives. Families of professionals are busy, and if too much time goes by between photos, these moments are lost forever. Babies, especially, grow fast and parents need photos of them several times a year.
While nearly everyone has a camera for snapshots, people need professional quality photos when they will be shown to an important audience, and when people want to be seen in the best light. The Internet has expanded the use of photos, making it possible for anyone to send them or to publish them for wide viewing.
Professionals often have business needs for high-quality photos, and through this familiarity, they acquire a taste for them. When these professionals need photos to preserve memories, or to display family photos when they entertain at home, they have the budget and the desire for similarly high-quality photos. Just as they appoint their homes with fine furniture and decorations, the photos on their walls need to exhibit their standards of quality.
Most people use professional photo studios only on rare occasions, such as weddings, yearbook pictures, or baby portraits. Because the client has to initiate the call, many special moments are lost and the studio loses potential business. Photo studios generally charge a large fee for CDs of their clients’ digital images. For these reasons, most photo studios are rarely used by families as a whole.
This photography business plan shows how Phoebe’s Photo Studio will meet the needs of professionals and their families to capture the special moments in their lives and present them in the best light. We will establish a relationship in which we initiate the calls to keep their photos up to date. Digital files of their photos will be available for free by e-mail, or with a nominal fee for CD. Because of our relationship with the families, when something big like a wedding comes, there’s no place else they would go.
Phoebe’s will grow at an annual rate of over 40 percent by targeting families of professionals with newborn babies for baby pictures and then developing a relationship with the client over the years for ongoing photographs. The funding requested in this plan is projected to result in a comfortable annual net profit by Year 3.
The opening of Phoebe’s Photo Studio will mark a change in the way professional photography is delivered. Rather than being a rare place to visit, this photo studio will be a fun part of a family’s lives, helping them capture special moments and share them in a digital world.
Phoebe’s Photo Studio helps clients preserve memories and portray themselves in the best light. We thrive on repeat business by developing relationships with our clients and calling them with timely reminders for new photos. We make professional quality photographs easily available in a digital format. We do this by using a pricing structure that makes our digital photographs a household staple and by making it fun for them to come here or to have us in their homes.
In addition to livelihood, we’re in this business for the enjoyment of photography and having fun with people. We want to keep it simple.
Our objectives are:
- To generate a comfortable net profit by the third year.
- To develop systems of production for each product category that are easy to replicate with new clients to keep it simple and fun.
- To have a client relationship system and call plan that will keep us on top of each of our client’s scheduled needs at all times.
Keys to Success
Our keys for success are:
- Target marketing for the gateway products of baby pictures, high school photos and wedding albums.
- Developing relationships with our clients through personal customer service, to turn one-time customers into lifetime clients.
- Our system of tracking clients’ ongoing needs for photos and taking the initiative to call them for appointments.
Phoebe Peters has worked as an industrial photographer and freelance portrait photographer in Southern California for 10 years. She has found that personal customer relationships are the key to repeat business and will open Phoebe’s Photo Studio in downtown Eugene, Oregon on that premise.
Phoebe’s Photo Studio is a sole proprietorship owned by Phoebe Peters. It will open in a leased 800 square foot studio in downtown Eugene, Oregon.
Phoebe Peters is a graduate of Brooks Institute of Photography in Santa Barbara, California and is a member of the Professional Photographers of Oregon and the Professional Photographers of America. She has 10 years experience capturing the special moments of people’s lives.
Company Locations and Facilities
We will open in an 800 square-foot studio at 100 Main Street, the heart of the commercial district with ample free parking. The space will be leased for three years beginning at $800 a month with cost-of-living adjustments made annually.
The studio will have a highly visible electric sign and a 20-foot wide display window visible to passing foot and auto traffic. Customers will enter a public area with a counter, samples of our photographs and albums, and couches for waiting. A separate playroom with props and other toys will accommodate children with sitting areas for parents, while a utility area off the back door will be set up to accommodate pets and their props. Children, pets and props can be brought into the photography studio for their photographs. An office and working area will be used for assembling the final product.
Phoebe’s Photo Studio will help our clients to look their best, will keep their photos up-to-date, and will capture the special moments of their lives.
Phoebe’s Photo Studio has a comprehensive program to preserve memories on an ongoing basis. We see individual pictures, especially baby pictures, as gateway products for our programs of ongoing photography.
All of our photos are created in a high-resolution digital format, from which our prints are made. Since the Internet and commonly used printers typically use the lower-resolution 300 dpi format, 300 dpi digital files are available to clients for a nominal charge. Higher-quality digital photos and prints carry full pricing. We will retain the high-resolution data and clients can order more prints from us if they wish.
Our photo studio includes quality props for portraits and baby, child and pet photography. The physical environment of the studio is fun and accessible, making families want to come here. We also go regularly to people’s homes and bring cameras and lights that are out of the budget of non-professionals.
Our products include:
Our specialty is baby pictures. We have a unique combination of props and a passion for babies. Babies are also our prime gateway product for entering families into our programs of ongoing pictures.
High School Senior Yearbook Portraits
Senior pictures are a long-standing tradition that brings high school seniors into photo studios. By making these photos easily accessible in digital form, and by marketing prominently on the Internet, we hope to capture much of this market.
We offer a special package of a family portrait at half price with the senior picture. It is often the parents who are paying for the senior portrait, so we want to establish a relationship with the parents. The parents will want a picture of their senior with the rest of the family. This introduction to the family will allow us to market our other services.
Family and Pet Portraits
Portraits of the entire family are needed for display, to send to relatives and to use in family newsletters and websites. Most families have pets, and we can arrange family portraits that include them. While we don’t specialize in pet portraits, we have props and will take stand-alone photos of pets as well. There’s an additional charge for exotic animals.
Individual portraits are commonly needed for individual and business websites, business cards, brochures and annual reports.
Model’s Portfolio and Glamour Shots
Photos suitable for magazine publication.
Weddings are one of the most special moments of life. Our wedding album includes up to 7 hours of wedding photography, with prints displayed in a custom photo album and digital images on CD.
Annual Portrait Program
We take the initiative to schedule the annual portrait and we replace it in last year’s frame while saving last year’s photo in a portfolio.
Baby Picture Program
We arrange pictures of the baby at 1 month, 3 months, 6 months, 9 months, 1 year, 18 months, 2 years, and 2½ years.
Child Portrait Program
We arrange a portrait of the child at 3 years, 4 years and 5 years, or until the child begins to be photographed annually for school pictures.
Capturing Memories Program
We arrange an annual portrait of the family and individual pictures of each member of the family. Photos can include pets and the house and grounds, if desired.
The competition for portrait photography is divided into several categories:
Award-winning photographers are those who routinely deliver magazine-quality photographs. Their work is highly creative and spontaneous instead of routinely posing shots. They are rare and highly expensive.
These are professional-quality photographers, like us, who use a lot of posed shots. Most of the competition falls into this category.
Low-priced, lower quality providers.
Same Day Photographers
Normally priced photo studios that provide lower quality photos on the same day.
ACE Marketing Communications will develop the logo, electric sign, business cards, brochures, website and display ads. All will contain branding information around the theme of capturing the special moments of our lives. This theme is the backdrop of our program to maintain customer relationships and to take the initiative to schedule photo shoots at our studio, in our clients’ homes, or in nature, to preserve their special moments.
Our innovative approach makes the most of consumers’ fascination with the latest digital imagery. By playing to this market trend, we gain new customers and provide added value, with high-quality, small file-size images our clients can easily share with friends and family members.
Phoebe’s Photo Studio will use several digital cameras, and will require a computer fully loaded with image-manipulating software, such as Adobe Photoshop. We will also need an ongoing maintenance agreement for the computer and software, and nightly backups of image files, in the event of computer failure, theft, or fire.
Market Analysis Summary
Families with children are the biggest market for portraits. For the purpose of this analysis, these families are divided into three socio-economic categories:
- College graduates
- High school graduates
Families of college graduates are most likely to be professionals and to have the means and the taste for professional portraits. There are nearly 20,000 such families in the metropolitan area.
We will target female professionals and wives of professionals, because women make the majority of purchasing decisions in these families.
The competitive environment is divided between luxury magazine-quality photographers, moderate professional photographers who mostly pose their subjects, and same-day photo studios.
The trend among our targeted consumers is toward more digital photography and more sending of digital images on the Internet. As the world becomes more technical, people need more personal support.
Phoebe’s Photo Studio will use a “high-tech, high-touch” approach to reach and retain clients for their ongoing photo needs. We will make it affordable and easy for them to disseminate their photos electronically.
People who who pay for professional photo portraits are generally status-conscious professionals who have children, and so we’ve segmented the Eugene-Springfield metropolitan area according to the social status of families. We’ve used education as a measure of social status.
Families of College Graduates
Professionals are, almost by definition, college graduates. They are the ones most likely to have a need for professional photo portraits for career purposes. They are also most likely to have the means and taste to want professional photos for their families, as well.
Families of High School Graduates
People who have not completed college are assumed to be more likely to be employees or be in a trade. While many of them may have the means for professional photos, relatively few will use them. They are more likely to use home-made photographs, except for rare occasions, such as a high school photo or wedding.
Families of Non-High-School Graduates
These are families who are generally without the means to hire professional photographers on a regular basis.
The Eugene-Springfield metropolitan area has a total population of 330,527. There are 74,836 families.
Some 25.5 percent of the adult population in the metropolitan area is composed of college graduates, which we will here define as professionals. Some 62 percent of the population is made up of high-school graduates.
The Eugene-Springfield metropolitan area closely conforms to the boundaries of Lane County, Oregon. The office will be located in Eugene, but clients are accessible throughout Lane County through physicians’ offices. Most Lane County residents are accustomed to doing occasional business in Eugene.
Target Market Segment Strategy
Our target market is families of college-educated people who are most likely to be professionals. This is the population most likely to order professional photos on a regular basis, having both the means and the desire for professional quality photographs.
Since women make most of the purchasing decisions in families, our specific target market is middle-aged professional women in the Eugene-Springfield metropolitan area, roughly 19,554 people.
Photography has gone digital. Digital cameras are replacing conventional cameras faster than DVDs are replacing VHS in video stores. Even cell phones have digital cameras on them. The uses of photography have expanded as well because of Web pages on the Internet and email. Digital images are needed for printing uses as well, for such uses as brochures and business cards.
Photo studios have mostly switched to digital format because it also allows for easy processing and manipulation. They have been less amenable to making digital files affordably available to clients, and this is a trend on which we intend to capitalize.
The growth rate used in the table is based on the 1.4 percent growth rate experienced by the Eugene-Springfield area over the past year. This growth is reflected in the accompanying chart and graph.
Families have photos taken to preserve memories. Most photos are taken by consumers with their own cameras, which are increasingly digital and are even part of their cell phones. Most of these photos are low quality but no one cares because only the family views them.
Consumers generally engage professional portrait photographers when the photos will be viewed outside the family and when quality matters. Professionals, such as those in our target market, often have business needs for quality photos and have acquired a taste for them. These professionals have families, too. They have the budget and the need to use them for their families because they often entertain at home and their family photos will be on display. Just as they appoint their homes with fine furniture and decorations, the photos on their walls need to exhibit quality.
Specifically, some of their needs include:
- baby pictures
- portraits for home or office
- senior pictures for the high school yearbook
- family pictures to send to family members
- family newsletters
- family, individual or business websites
- portraits for business cards, such as for real estate agents
- portraits for brochures and annual reports
The world has become increasingly digital, but many professional photo studios have made it difficult for people to enter the digital age. The traditional practice of retaining negatives to require clients to return for prints has been carried over to charging high fees for releasing digital files of their portraits.
The need to capture memories lasts for people’s entire lives, and business portraits require a regular update. But people generally don’t look forward to seeing a photographer. In fact, they find it a burdensome expense, have not established a relationship with a photographer and don’t think often about going to one. As a result, a lot of memories are lost and ancient portraits of professionals continue to be hung on walls and portrayed in publications. This makes them appear to be trying to preserve their youth instead of embracing their maturity and experience, and doesn’t show them in the best light.
The competition is divided between luxury magazine-quality photographers, moderate professional photographers who mostly pose their subjects, and same-day photo studios.
Phoebe’s Photo Studio is not a luxury, magazine-quality studio, but our service and photo quality is high compared to other moderate professional photographers. Our rates are comparable to theirs, but we add value through personal contact and easy dissemination of digital images.
Competitor X is an award-winning, highly creative photographer with a style that one would expect to find in a national magazine. His prices are the highest in the area, up to $15,000 for a wedding album. His strategy appears to be to capture the high-end market, where a magazine look is a luxury that people can afford.
Competitor Y is a more typical photographer with more staged photographs and wedding packages running up to $5,000. His strategy appears to be to occupy the middle-ground of quality and price where most of the market is likely to be.
Competitor Z offers same-day photos. This is easier to accomplish with digital processing for a studio organized around speed, but quality is necessarily sacrificed. The market for same-day photos doesn’t necessarily demand quality. Prices are average. The strategy of this studio appears to be to appeal to convenience and speed.
Competition and Buying Patterns
Purchasing decisions generally begin with an urgent need, such as a high-school senior picture or the birth of a baby. Buyers are most likely to seek a professional by referral from someone who has used their services. If this is not available, they are most likely to look in the Yellow Pages, but increasingly online, especially if they are young.
Photo studios are generally located in commercial areas with high visibility, but many studios are run out of the owner’s home. This is possible because so much photography occurs on location: in people’s homes or offices and in nature or at social events.
Photo studios are run by professional photographers with various levels of education and experience. There is considerable variation in quality and taste according to the ability of the individual photographer. This is a highly individualized, creative process that makes it difficult for large corporations to enter the market or to create “chain stores.” The participants are mostly individual photographers.
Security Guard Business Plan Sample
Protect your community by starting a security business using a security guard business plan similar to this one.
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1. Executive Summary
Batten-Hatchez Security is a start-up security company founded by Chindit Batten, an experienced former police sergeant and security company manager.
Located in Coastalburg at its launch, the business will provide security guards, security audits, and referrals to equipment providers to commercial buildings, retail businesses, and, eventually special event venues and other clients.
The business seeks to acquire capital from an angel investor and will expand to additional cities in our state and beyond if successful.
Related: Free Business Plan Template Download
In the current political climate, with increasing fears of terrorist activity, and the current economic climate, which promises an upswing in general and in outsourced services especially, this business is launching at the right time.
The business will target large retail stores and building management companies first in order to establish a strong base of clients in Coastalburg.
Batten-Hatchez will grow its employee base of security guards carefully, based on client contracts, and use both full-time and part-time guards. The business expects respectable sales of in the first year, almost doubling by the end of the third year. Gross margins will be similar to the industry average, based on guard labor costs vs. billings.
After the initial investment and launch, a lean first year, and the establishment of an office and training space in the second year, the business will be poised to expand through its own financing after three years. After the business is proved replicable in additional cities, the business may be sold to provide an exit for the initial investor and founders.
Batten-Hatchez Security will base its success on meeting the following objectives:
- Employ 25 full-time equivalent security guards by the end of the third year of operation
- Supply security guards to 15 buildings on a full-time basis by the end of the third year of operation
- Earn $2 million in revenue with net profit over $300,000 in its third year of operation
Batten-Hatchez Security will remove worries for clients who require security guards for their buildings, facilities, and events by providing excellent customer service for clients and in-depth training for their employees.
Keys to Success
Batten-Hatchez Security believes the keys to success in its industry include:
- Listening carefully to client concerns and objectives to create customized security guard packages
- Knowing what the client does not know (bringing deep security expertise as well as knowledge of legal regulations and liability to the table)
- Training security guards carefully and maintaining their training and certifications (e.g. to carry firearms)
- Monitoring the quality of security guard service to offer quality assurance
The creation of SAB KickStart, SAB Foundation, SAB Accelerator and SAB Thrive, provides the opportunity for a tangible and sustainable future for South Africans by providing invaluable guidance and support to new business.
2. Company Summary
Batten-Hatchez Security is a startup security company founded by Chindit Batten, a former police sergeant and security company manager with fifteen years in law enforcement and ten years in security work.
Related: 21 Steps To Start-Up
The business will provide security guards to commercial buildings, retail businesses, and special events. The business will launch in Coastalburg but will expand to additional cities if successful.
Chindit Batten is CEO and founder of Batten-Hatchez Security.
He currently owns 60% of the business and the remaining 40% of shares are owned by his partner and co-founder, Viipuri Hatchez, COO. The business is incorporated as an S Corporation to enable additional investment for its launch.
The founders shares will be diluted as up to 40% of shares will be given to investors.
Batten-Hatchez Security will launch as a home-based business out of the home office of Chindit Batten. Initially, this will reduce the cost of rent and equipment.
Training for security guards will be provided in temporarily rented office space as needed.
Other start-up costs include the costs of incorporation and permits, such as concealed weapons permits, business license, and police clearances (legal fees), the initial website and brochure design and printing, and the first insurance premium for the business, including liability insurance for the guard’s work and carrying of firearms.
Long-term assets include mobile phones and headsets for all guards and employees, as well as two-way radios for guards working as teams.
Batten-Hatchez Security will provide well trained guards for one or more of the following purposes:
- To guard entrances and screen guests/employees
- To monitor clients’ premises with video surveillance equipment
- To protect clients’ assets, employees and guests
- To deter crime with visual presence
- To organize response in the case of fire, evacuation, or other emergency
- To respond to customer and employee health emergencies and accidents
- To eject unwanted customers or trespassers
- To liaison with police and city emergency responders
In addition, the principals of the firm will offer the following:
- Security audits and recommendations for security plans
- Referrals to providers of security technology (camera systems, etc.)
Batten-Hatchez will be a licensed, insured, and bonded business and will offer both armed and unarmed guards, based on client needs and budgets.
All guards will be certified for security work and to carry firearms. Whenever possible, the same guards will be sent consistently to the same clients. However, substitutes will be necessary from time to time and the business will ensure that detailed data about the job is transmitted to substitute guards on those occasions.
Batten-Hatchez Security will build trust with clients as a partner, rather than simply in the specific guard or guards they grow comfortable with. Guards will keep in constant communication with their team via portable two-way radios and with the Batten-Hatchez office, as necessary through mobile phones.
The Batten-Hatchez office will be not be staffed full-time at launch, but the CEO and COO will be within reach by phone wherever they work. Guards who encounter criminal activity will alert the authorities immediately rather than going through a communications centre.
Once the Batten-Hatchez office is established outside of the home of Chindit Batten, it will be staffed full-time with a rotation of three call centre personnel who will cover the dispatches. Guards will either be stationed at desks or patrol on foot at all facilities.
Clients must provide vehicles if their jobs require vehicle patrol (i.e., a facility with several buildings), but this will not be a focus of Batten-Hatchez Security.
Knowing how to write a funding proposal properly can make or break your business idea before it even gets off the ground.
4. Market Analysis Summary
The market for security guard services includes building management companies, retail businesses, event venues, and other businesses. IBISworld.com reports that the security services industry as a whole was $29.7 billion in 2008.
While this number includes investigative services and armoured car services, it is estimated that security guards accounted for $22.3 billion. This represents approximately 540,000 employees in the security guard industry.
While market revenue has dropped 2% in 2008 due to the recession, it is expected that the market will rise again due to increasing outsourcing of security services by companies who will delay hiring their own full-time employees as the recession ends.
The continuing and growing concerns about security brought on by international terrorism are also expected to contribute to growth in the industry.
Of the potential targets available in Coastalburg Batten-Hatchez Security will focus on building management companies and retail businesses at the outset.
These businesses require steady security needs and serving them is simpler than serving special events.
The market analysis table shows the market segmentation for Coastalburg among the major market segments for security guard services. Growth is slow among these markets as new development is not prevalent in Coastalburg currently.
Building management companies generally install surveillance equipment and employ security guards to monitor that equipment, to staff front desks/security checks, and sometimes for general patrol.
These companies often work with a number of commercial or residential buildings and look to establish a relationship with one reliable vendor for all of their security guard needs. While some buildings require night-shift guards, others require only day coverage.
Large retail businesses use security guards to deter theft and to provide safety. These include department stores and other retail stores over 4,000 square feet, although some smaller stores may use security guards if they sell high-priced items (designer fashion, jewelry, technology, etc.).
Retailers require more guards during the day. Some simply lock the store at night while some larger department stores use night patrols as well.
Event venues use security guards to monitor guest lists and fire capacities and to organize emergency response. Nightclubs and bars may be included in this category. However, most nightclubs and bars employ their own security personnel (or “bouncers”) directly and do not use vendors.
Event security has the same risks as other security, but there is limited time for security audits and situations change fast, making this a higher stress business that requires better trained guards. Events tend to happen in the evenings with weekday nights for corporate events and weekend nights for private events.
Educational institutions, such as primary and secondary schools and colleges, generally employ security officers to guard and patrol their buildings and campuses. Often these institutions employ their own in-house security staff, but they will sometimes use outsources security vendors. These institutions require night and day patrols.
There are two kinds of security companies, one that sells products and one that sells services or you can combine both.
Target Market Segment Strategy
Batten-Hatchez Security will target the first two of these target markets initially, building management companies and retail businesses. Both segments require ongoing security vendors and are eager to establish long-term relationships.
Once relationships are established, good customer service, quality assurance, and competitive pricing can ensure that the relationships are retained and that the security provider is considered a true partner in the protection of the building or businesses’ assets and people.
Furthermore, the other two target markets listed will be taken on at a later date, if at all. Event venues require more specialised services and may be a slower market to tackle.
Related: Target Market Worksheet
Educational institutions are often eager to establish their own security staffs, making this a difficult market to establish a strong foothold in as well.
Service Business Analysis
According to IBISWorld, there were 41,000 security services firms in the U.S. in 2008 running 56,000 establishments. The average size of a firm was $700,000 revenue per year based on these numbers, meaning that the industry includes both small and larger companies.
There are few barriers to entry, as long as basic legal requirements are met, as the capital investment in the business is very low. The industry depends on a supply of labor, often using retired police officers as security guards.
As security guard services are sold business-to-business, marketing and advertisement is generally targeted on the markets and industries the security companies seek to serve. Businesses generally search for security guard providers on the Internet or through referrals from other companies they trust.
Competition and Buying Patterns
Top players in the industry include Securitas AB, Allied Security LLC, The Brink’s Company, and G4S plc.
Huge players provide services for a huge range of markets, including governments, chemical and petrochemical, colleges and universities, commercial real estate, financial institutions, health care facilities, manufacturing and industrial, residential communities, shopping centers, and temporary security services.
Smaller security companies achieve success based on the expertise and reputation of their founding managers and the growth of a team with a similar track record. The continued success of a company depends on client satisfaction, leading to referrals.
Larger institutions and governments may receive several bids for security contracts, while smaller businesses (such as many that Batten-Hatchez Security will target) often prefer to try out security companies and move on if they do not meet expectations.
The smaller the amount of assets being protected, the more willing a company will be to risk their security on educated hunches about a security company without feeling the need to do due diligence on a number of options.
IBISworld reports the following about the security industry:
- While the public’s perception of the rising crime rate assists revenue, the most significant factor which increases the demand for this industry’s services is a breach of an existing security system, a break-in or a near break in. The economic crisis has hurt demand over the past two years but things will soon begin to improve.
- In Coastalburg, security guard service competitors include securityguard.com, Top Guard Security, US Security Guard Services, and Trend Security Corporation.
Vending Services Sample Business Plan
Every start-up business that offers vending services requires a professional business plan.
Vending Services Business Plan
Chef Vending, LLC is a family start-up business that specializes in importing vending machines and commercial food & beverage equipment from Spain. We will penetrate the vending industry with innovative, first to market, high quality vending machines. We will establish our own vending routes in the Southern and Central Florida region. We also plan to participate in the $321 billion food & beverage industry by supplying high-quality innovative equipment. With the establishment of one strategic alliance with a national brand name in either of our vending lines, we expect to easily exceed our financial forecasts.
Chef Vending’s mission is to be the leader in introducing innovative, quality vending machines and restaurant equipment to the market. Through close customer contact and excellent relationships, we will meet the needs of our customers wherever we can.
Chef Vending, LLC, is a privately-held Florida corporation and maintains an office and a small warehouse in a mixed-use area of North Miami Beach, Florida.
Three of the four investors in the company have full operational responsibility. Mauricio Ordonez and Javier Palmera, the co-founders, have both entrepreneurial and industry experience. Charles Mulligan brings operational management and financial skills to the operation.
Chef Vending will have two product lines, each for the various markets it serves. Our vending products line will include our unique Sandwich Express machine, our Fresh Orange Juice machine and our Multi-line Dispenser. Our restaurant equipment products will be toasters, espresso makers, and fresh juice squeezers.
Most of our products, such as Sandwich Express are innovative machines that have functions and advantages not found in today’s common vending machines, thus providing Chef Vending a competitive advantage over more established competitors.
We plan to aggressively enhance our existing line in the future. Our immediate plans are to include a larger model of Sandwich Express that will offer a greater variety of sandwiches, and a more diverse product line, such as pizza. Other products are in the exploratory phase.
We are also pursuing supplier relationships with large nationally-branded juice and sandwich manufacturers, to customize our machines to their products. This would enable Chef Vending to supply machines to national companies and allow them to brand the machines with their product lines.
Revenue from U.S. vending consumable merchandise was $24.5 billion last year, an increase of 4.9% over the previous year, according to the Automatic Merchandiser magazine’s latest State of the Vending Industry Report. Small companies, with sales of less than $1 million, accounted for 5.8% of the market and had projected sales of $1.35 billion. Three quarters of all vending operators are classified in the small category.
Within the industry, snacks and cold beverages are the largest product segments and these two categories are the driving force of the industry. The food category grew at a rate of 7% last year, according to the Automatic Merchandiser. Cold storage machines grew at an even more impressive 42% last ylear, with this growth coming at the expense of shelf-stable products.
According to the National Restaurant Association, revenues from restaurants are expected to reach $321 billion. This is a large and healthy industry in our economy, and suppliers to this industry are expected to benefit from this growth.
All of this indicates that a fast moving, innovative company that can introduce enhanced products to vending machine/restaurant equipment customers stand to gain significant market share in a relatively short time span.
Chef Vending will market its machines to three distinct market segments including; distributors, branded sandwich and juice manufacturers, and end users. For our restaurant equipment business we will focus on restaurants and hotels and equipment supply companies.
Chef Vending’s objectives in our first year of operation are:
- Sell 400 vending machines.
- Directly place 10 vending machines, that we will operate, in the South Florida area.
- Achieve $500,000 in sales in our restaurant equipment line.
For the following two years our growth objectives are:
- Grow our vending machine and equipment business by 20% each year.
- Grow revenues by 25% in our directly operated vending machines.
Chef Vending’s mission is to be the leader in introducing innovative, quality vending machines and restaurant equipment to the market. Through close customer contact and excellent relationships, we will meet the needs of our customers wherever we can. Chef Vending will secure sufficient profits from free cash flow from operations, to sustain its stability and finance future growth. We will add value to our community by maintaining a friendly, familial work environment.
1.3 Keys to Success
As a start-up company, new to the industry, and introducing new products, we must be focused and work hard to create acceptance for ourselves and our products within the marketplace. The keys to our success are:
- Quality support and service, recognizing that Chef Vending’s success depends most critically on the relationships it’s able to create.
- Innovative, quality products that are able to both expand existing markets and create new ones for our customers.
- Steady, disciplined pattern of growth.
- Our customers and keeping them happy.
Chef Vending, LLC, is a family-owned and operated import company that focuses on importing innovative vending machines and restaurant equipment from Spain. By serving a niche segment of the $24.5 billion dollar vending industry, we will position Chef Vending as a high-quality, innovative company, that creates value for its customers.
Located in North Miami Beach, Florida, three of the four investors have full operational responsibility. Mauricio Ordonez and Javier Palmera, the co-founders, have both entrepreneurial and industry experience. Charles Mulligan brings operational management and financial skills to the operation.
2.1 Company Ownership
Chef Vending, LLC, is a privately-held Florida corporation. Chef Vending is owned by three of its key employees, and one financial investor. The ownership breakdown is as follows:
Mauricio Ordonez- 40%
Javier Palmera- 20%
Charles Mulligan- 20%
Pedro Herrera- 20%
2.2 Company Locations and Facilities
Chef Vending maintains an office and a small warehouse in a mixed-use area of North Miami Beach, Florida. We maintain a showroom, where we provide customers with product demonstrations, a warehouse, where we keep an inventory of machines and supplies, and an administrative area to handle the business functions.
Chef Vending imports a variety of innovative products that serve the needs of special segments of the market. These machines all aim to expand existing sales and open new lines of sales for our customers.
3.1 Product Description
Chef Vending has three vending machines and three lines of restaurant equipment.
Our vending products are:
- Sandwich Express- This machine stores, in a refrigerated unit, up to 140 pre-packaged sandwiches. When an order is placed, the machine sends a sandwich from the refrigerator to the toaster, toasts the sandwich for a pre-determined time, and at a predetermined temperature. In approximately 60 seconds, a fresh, delicious, hot sandwich is served.
- Fresh Orange Juice (OJ) Machine- This machine, as its name implies, delivers a chilled 7 oz. cup of fresh squeezed orange juice. In a refrigerated unit, the machine stores up to 140 lbs. of juice oranges. This will yield approximately 110, 7 oz. cups. When an order is placed, the machine will dispense, from its refrigerated container, whole oranges that will be sliced in half, and then each half is pulverized for its juice. The juice will run through a filtering system to keep out the seeds and most of the pulp, to finally provide the customer with a 100% all natural cup of OJ in approximately 30 seconds.
- Multi-line- These versatile, low-cost, easy-to-maintain machines provide the end user with a variety of vending options, from phone cards to disposable cameras. Chef Vending is able to provide customers with machines that have either two, three, or four product lines; this will provide flexibility to maximize unit revenue.
Our restaurant equipment products are:
- Toasters- Coming with either a single or double toaster, these panini-type toasters provide the commercial establishment with an automatic machine that frees up service personnel for other customer service tasks. These machines will toast sandwiches, pastries, and a variety of other menu items, in a predetermined time and temperature, automatically dispensing the food item when done.
- Espresso Maker- This high-quality espresso maker makes single-serve cups of delicious gourmet coffee from pre-packaged coffee pods. These pods provide great benefit to the owner by reducing the cost of measuring for each new order, and eliminating the waste associated with the traditional methods.
- Fresh Juice Squeezer- This commercial grade machine will squeeze fresh, whole-juice oranges to allow the owner to sell a cup of fresh-squeezed orange juice.
3.2 Competitive Comparison
Both our Sandwich Express and Fresh OJ machines will be first to market. Currently, the market only provides a sandwich, or other hot meals, that must then be microwaved. We will be the first to market a vending machine that both toasts the sandwich, and then delivers it hot to the customer. Our machine’s products will enjoy a qualitative advantage over microwaved products as well.
For juice drinks, the market only offers bottled or canned juices for a customer to purchase. Our OJ machine will literally squeeze a fresh cup each and every vend. A qualitative advantage over other machines is the fact that the product is free of additives and refined sugars.
There are a number of similar multi-line machines on the market today. We will offer the customer a quality product at prices below the prevailing market rates. Our machines also enjoy distinctive packaging that will compete favorably with the products currently in the market.
We will also be first to market a fully automated line of toasters. Currently, the toasters on the market require the food service worker to manually monitor the cooking process, where ours automatically toast and dispense, freeing the service worker to engage in other customer service tasks.
Our espresso coffee makers will compete with the existing espresso makers on the market today. Our machines will offer the pre-packaged coffee pod which will be a cost savings to the end user. We will also compete with an aggressive pricing strategy.
Our fresh juice machines will be priced aggressively as well, in order to better compete in the market.
3.3 Sales Literature
Sales brochures have been developed as part of our start-up expenses.
Chef Vending imports its machines from Spain. For oranges and sandwiches, we contract with local suppliers.
Chef Vending’s mission is to be the company that introduces innovative products to the market. To achieve this, we will search out the latest in food preparation technology in the vending and equipment business. As first to market, we currently enjoy a technological advantage over the competition.
3.6 Future Products
To enhance our existing line, we are looking at a larger model of Sandwich Express that will offer a greater variety of sandwiches, and a more diverse product line, such as pizza.
We are also pursuing supplier relationships with large nationally-branded juice and sandwich manufacturers, to customize our machines to their products. This would enable Chef Vending to supply machines to national companies and allow them to brand the machines with their product lines.
As we increase our presence in the equipment business, we will continuously search out products to expand our existing line. A key component of this will be the feedback from our customer base.
Market Analysis Summary
Revenue from U.S. vending consumable merchandise was $24.5 billion in 1999, an increase of 4.9% over 1998, according to the Automatic Merchandiser magazine’s State of the Vending Industry Report in August 2000. This figure includes both machines and products. Small companies, with sales of less than $1 million, accounted for 5.8% of the market and had projected sales for 1999 of $1.35 billion. Three quarters of all vending operators are classified in the small category.
Within the industry, snacks and cold beverages are the largest product segments, representing 29% and 25% of the industry, respectively. These two segments are the driving force of the industry. The food category grew at a rate of 7% last year, according to the Automatic Merchandiser. Cold storage machines grew at an even more impressive 42% in 1999, with this growth coming at the expense of shelf-stable products.
Broader economic and cultural trends are also positively impacting the industry. Food sales away from home have become a larger part of total food sales in the U.S. since the 50’s, according to the Department of Agriculture. Technomic, a Chicago-based research firm, reports an increase in demand for takeout meals as the percentage of two-parent households declines, along with the decline of the three regular sit down meals per day.
Consumer preferences about taste, price, nutrition, convenience, and technology are changing. These changes favor the vending industry, which now has the opportunity to spot these trends and develop their markets.
According to the National Restaurant Association, revenues from restaurants are expected to reach $321 billion in 1999. This is a large and healthy industry in our economy, and suppliers to this industry are expected to benefit from this growth.
4.1 Market Segmentation
Chef Vending will market its machines to three distinct market segments:
- End Users- Operators that have their own vending routes who wish to expand their product selections. Included in this category are large institutional food service companies that engage in vending operations as part of their overall food service business.
- Distributors- Companies that supply operators with machines and supplies for their operations.
- Branded Sandwich Manufacturers and Branded Juice Companies- By working closely with these companies, we will customize our machines to meet their specifications and to allow them to “brand” our machines with their products. They will either supply the machines or sell them to their customers who will buy product supply for the machines from these companies.
We have two markets for our equipment business:
- Restaurants and Hotels – End users who benefit from the equipment purchased.
- Equipment Supply Companies- These are large supply houses that offer a variety of equipment to the food & beverage industry.
4.2 Industry Analysis
The U.S vending industry is divided into three main segments:
- Operators- Companies that buy and place vending machines on their routes, sell the product and service the machine, and range from small family businesses to large national companies.
- Manufacturers- Companies that manufacture machines for sale to operators.
- Distributors- The link between the manufacturer and the operator. Supplies the market with both machines and products for operators.
The food & beverage industry is divided into similar segments:
- Food & Beverage Establishments- This segment covers the entire spectrum of bars and restaurants.
- Suppliers- Companies that supply the establishments with all of their food, paper, and equipment needs.
- Supply Houses- Acting as a distributor, these firms supply an area with their required supply needs.
4.2.1 Competition and Buying Patterns
Both the food & beverage and vending industries are highly competitive. Price, Return On Investment (ROI), reliability, and customer service are the factors most effecting a buying decision.
There are many large name brand companies with vending machines in the market. We will focus on creating a niche market for our innovative machines, to compete with larger more recognizable names. By being first to market, we have a unique opportunity to brand ourselves and our machines.
Buying patterns are fairly consistent across the year.
4.2.2 Distribution Patterns
Distribution in the vending industry typically runs through a distributor. These distributors will carry a brand of machine for sale in a defined geographic region. In some instances, manufacturers sell direct to operators or end users. Another form of distribution is to be a supplier to a nationally branded company. Similar distribution patterns are established in the food & beverage industry.
4.3 Target Market Segment Strategy
Chef Vending’s initial strategy is to offer all of our products to all segments of the market. We will focus on both the end user and the distributor initially, as the strategy to secure accounts with the nationally branded companies will take some time to realize. We will reach our target market in one of three ways. First, we have begun a small advertising scheme in industry trade publications highlighting the many features and benefits of our products. Secondly, we have joined the National Automatic Merchandiser Association (NAMA) and have introduced ourselves and our products to distributors and end users at the NAMA annual convention in October, 2000; we will also participate in their Southeast regional show in South Carolina and in their national show next year. Finally, we will pursue personalized relationships with contacts developed at these shows and with regional companies in the South and Central Florida area.
For equipment sales, we will focus on end users and distributors in the South and Central Florida regions. As we gain market share in these markets we will expand geographically.
4.3.1 Market Needs
The principle market need we will be addressing will be revenue. Each of our machines will act to expand existing sales for operators, and in many cases will create new markets entirely. For the operator that is already vending snacks, a high end sandwich will enable this operator to expand his or her sales without cannibalizing existing sales. For the coffee vendor, a perfect compliment to a gourmet cup of vended coffee will be a fresh cup of orange juice. By creating a new untapped market, the operator will be able to expand revenue streams beyond their existing accounts. Another important need we will fill with our multi-line machines and our equipment, will be price. As we will be competing with existing supplies already in the market, we will price our products to be highly competitive in order to attract clients.
4.3.2 Market Trends
Growth rates in both the vending industry and the restaurant industry remain strong. This growth is fueled by the changes in the workplace and workforce that are causing workers to consume more of their meals away from home. Away from home food sales are expected to increase by 53%, according to NAMA.
As more and more consumers eat away from home, the demand for higher quality is also growing. Vendors are now offering a full line of packaged frozen meals in their machines. Margins will increase as premium prices are being placed on branded, high-quality products.
Demographic trends are affecting the industry. A large group of young adults, who mainly grew up on fast food, have emerged as an economic force. This group’s perceptions on fast food, technology, and vending, will have a positive impact in the vending business. Furthermore, overall population growth rates, and immigration trends particularly, will also have a tremendous economic impact on the vending industry. Much of the growth in both of these areas will be in the Southeast, where Chef Vending is poised to capitalize on these trends.
4.3.3 Market Growth
Studies by Automatic Merchandiser reflect an industry growth rate of approximately 4.8% over the last five years, matching the overall growth of the U.S. economy.
Gift Baskets Sample Business Plan
If you are beginning a business that specializes in gift baskets then you will find this sample business plan most useful.
Gift Baskets Business Plan
Basket of Goodies (BOG) is a premier gift basket retailer. BOG is concentrating on making gourmet gift baskets out of a wide range of high-quality ingredients. In addition to having several flagship baskets, BOG will also offer the option of a custom basket allowing the customer to choose the ingredients themselves. BOG will be selling to individuals as well as corporations. Initially the bulk of BOG’s business will be generated by individuals from word-of-mouth referrals, but as time passes, corporations will become a growing percentage of sales.
Once up and running with some momentum, BOG will be steadily producing profits. It is projected that BOG will be making a profit by December. By the end of year three, it is projected that BOG will be generating a net profit of approximately $21,000.
The Basket of Goodies’ mission is to create the finest gift baskets available. BOG, soon to be located in Salem, OR, will be hand assembling our products out of premier ingredients, local when possible. The business will be based out of Susan Presento’s home. Although this will be a home-based business, toward the end of year one Susan will have an employee.
Susan Presento, founder and owner, managed a flower shop in Salem for three years and this has given her insight to the gift giving practices of Oregonians. The primary gift baskets that will be offered are: smoked fish basket, fruit basket, pasta dinner basket, and picnic basket that has caviar, crackers, fruit, and smoked fish. BOG also offers a custom basket which allows customers to pick items from a list and BOG will assemble the basket with its custom ingredients.
The purchasing of gift baskets is very “seasonal.” More than half of the gift basket purchasing occurs during a wide variety of holidays.
BOG’s competitive advantage will be based on two factors, low overhead which allows reasonable prices, and an unrelenting desire for the highest quality product and service.
- Low overhead
- Highest quality product and service
BOG’s sales strategy will be targeted at obtaining both the individual and corporate clients through word-of-mouth referrals. Customers will be able to place an order at the office, over the phone or via the website.
The Basket of Goodies’ mission is to create the finest gift baskets available. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our products and services will exceed the expectations of our customers.
The objectives for the first three years of operation include:
- To create a home-based company whose primary goal is to exceed customer’s expectations.
- To increase the number of clients served by at least 20% per year through superior performance and word-of-mouth referrals.
- To develop a sustainable home business, surviving off its own cash flow.
BOG, soon to be located in Salem, OR will offer a wide range of gourmet gift baskets, production as well as custom units. BOG will be hand assembling the baskets out of premier ingredients, local when possible. The business will be based out of Susan Presento’s home. Although this will be a home-based business, toward the end of year one Susan will have an employee. If the business goes per the forecasted plan, the business will achieve profits by the end of year one.
2.1 Company Ownership
The Basket of Goodies will be a sole proprietorship, owned by Susan Presento.
2.2 Start-up Summary
BOG’s start-up costs will include all the equipment needed for the home-based office, legal fees, website creation, and start-up advertising. The home office equipment will be the largest chunk of the start-up expenses. This equipment includes a computer system, fax machine, office supplies, cellular phone, and pager. The computer should have a 500 megahertz Celeron/Pentium processor, 64 megabytes of RAM (preferably 128), 6 gigabyte hard drive, and a rewritable CD-ROM for backing up the system. Additionally, there will be the expense installation of a broadband connection. While a broadband connection is not totally necessary, it only costs between $40-50 per month for service and will make working on the Internet significantly faster and easier.
The home office will also require a few pieces of furniture such as a desk, chair, and bookshelf to transform a standard room into an office. Lastly, an additional land phone line will be required. The legal fees are used for the formation of the business as well as for reviewing/generating standard client contracts. The Web creation fees at start-up costs are for design and creation of the website. The start-up advertising will be the production of brochures.
BOG sells gourmet, hand-assembled gift baskets. Their premier baskets are: smoked fish basket, fruit basket, pasta dinner basket, and picnic basket that has caviar, crackers, fruit, and smoked fish. BOG also offers a custom basket which allow customers to pick items from a list and BOG will assemble the basket with their custom ingredients.
For the customer baskets, BOG will provide a list of options grouped into four different categories. The customer then chooses two items from each of the four categories and the gift basket is made for them. BOG highlights four previously mentioned premier baskets. In addition to these, BOG will typically have one or two specials, often seasonally based.
Market Analysis Summary
BOG will be going after two distinct market segments, individuals and corporations. Both groups buy gift baskets as a goodwill gesture, typically for different reasons. Individuals typically buy the baskets as a present with over half of sales occur during holidays. Corporations buy the baskets as presents as well, but usually for events unrelated to the holidays. By going after both of these groups, sales will be less seasonal (relative to if only the individuals were targeted).
There are many different “gift basket” retailers in Salem. BOG will differentiate themselves through the use of premium ingredients in their baskets. The gourmet baskets, coupled with a custom option and reasonable prices (attributed to low overhead) will spell success for BOG.
4.1 Market Segmentation
BOG’s has two distinct groups of customers, individuals and corporate customers:
- Individuals- The individuals are people who are looking to give a friend, relative, colleague, etc., a gift basket as a gesture of goodwill. These customers typically do not have a specific type of gift basket in mind when they look at BOG’s product offerings, they just want to give a gift.
- Corporate- The corporate customer is typically buying the basket for a colleague at work, either as a sign of appreciation, for a special event, or as a thank you for a customer. The corporate market can be further broken down to banks, health care, employment gifts, real estate, apartments, special events/promotions, corporate headquarters, hotels/vacation resorts, and automobile dealerships.
4.2 Target Market Segment Strategy
BOG is focusing on individuals and corporate customers because they are the largest segments of purchasers for gift baskets. Individuals are the target purchaser of gift baskets. They purchase baskets typically as a thank you in response for something the recipient did or just to be nice. The gift basket is unmistakingly a gift so upon receipt there is no ambiguity why it was sent or at least what it is trying to accomplish. Within the individual category, women are 69% more likely to be the purchaser of a gift basket compared to men. This is not to say that women more often purchase gifts, it just indicates women are more likely to buy gift baskets.
BOG is focusing on the corporate customers as they currently represent approximately a third of the purchasers of gift baskets. The corporate customer could be buying the basket for someone within their company, or they could be buying it for a customer, vendor, etc. The trend for the corporation to purchase gifts is not a new phenomenon and therefore would appear to be a solid market segment to pursue.
4.3 Industry Analysis
There are many different forms of competition in the gift basket business:
- Similar gift basket type retail stores: There are several of these stores located in Salem. These competitors offer a wide range of gift baskets, however none of them are concentrating on the higher end, gourmet product line.
- Nut/fruit companies: There are several stores that concentrate on nuts and or fruit baskets.
- Bath product gift basket companies: There is currently one gift basket company that concentrates on bath products. Bath products have a slightly smaller population of people who appreciate these products (as women predominately appreciate bath products more then men do).
- Regional gift basket: There is one retailer that sells gift baskets composed of local products. These type of baskets tend to appeal to people that are buying gifts for people that are not from this area.
- Candy gift baskets: There are several candy stores that offer, as one on their products, a candy gift basket. Similar to the bath products basket, candy typically appeals to women a bit more so then men.
- Florists: Flowers are a similar product that competes with gift baskets. Once again flowers tend to appeal to women more so then men.
The purchasing of gift baskets is very “seasonal.” More than half of the gift basket purchasing occurs during a wide variety of holidays.
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