Florida FBLA · Deliverio shares a common ground with businesses in other industries such as Uber,...
Transcript of Florida FBLA · Deliverio shares a common ground with businesses in other industries such as Uber,...
Alex Patton Business Plan
Kyle Tom 2017-2018
Nicholas Mendoza
Florida FBLA Middleton High School
Middleton High School 1
Table of Contents
Executive Summary .............................................................................................................................................. 2
Company Description .......................................................................................................................................... 3 Legal Form of Business ................................................................................................................................................. 3
Effective Date of Business............................................................................................................................................. 3
Company Mission Statement/Vision ............................................................................................................................. 3
Company Governance ................................................................................................................................................... 3
Company Location ........................................................................................................................................................ 4
Immediate Development Goals ..................................................................................................................................... 4
Overview of Company’s Financial Status ..................................................................................................................... 4
Industry Analysis ................................................................................................................................................... 5
Description of Industry .................................................................................................................................................. 5
Trends and Strategic Opportunities within Industry ...................................................................................................... 6
Target Market ......................................................................................................................................................... 7
Target Market Defined .................................................................................................................................................. 7
Analysis of Markets Potential, Current Patterns, and Sensitivities ................................................................................ 7
Competition .............................................................................................................................................................. 8
Key Competitors ............................................................................................................................................................ 8
Competitor’s Strengths and Weaknesses ....................................................................................................................... 8
Potential Future Competitors ......................................................................................................................................... 9
Barriers to Entry for New Competitors .......................................................................................................................... 9
Marketing Plan and Sales Strategy .............................................................................................................. 10
Key Messages to be Communicated ............................................................................................................................ 10
Options for Message Delivery ..................................................................................................................................... 11
Sales Procedures and Methods .................................................................................................................................... 12
Operations .............................................................................................................................................................. 13
Business Facilities ....................................................................................................................................................... 13
Production Plan ........................................................................................................................................................... 13
Workforce Plan ............................................................................................................................................................ 14
Impact of Technology .................................................................................................................................................. 14
Management and Organization ..................................................................................................................... 15
Key Employees/Principals ........................................................................................................................................... 15
Board of Advisors ........................................................................................................................................................ 16
Plan for Identifying, Recruiting and Securing Key Participants .................................................................................. 16
Compensations and Incentives Plan ............................................................................................................................ 16
Long-Term Development ................................................................................................................................. 17
Long-term Goals .......................................................................................................................................................... 17
Risks Identified and Analyzed ..................................................................................................................................... 17
Strategy to Reach Long-term Goals............................................................................................................................. 18
Financials ................................................................................................................................................................ 19
Accounting System ...................................................................................................................................................... 19
Financial Projections ................................................................................................................................................... 19
1st Year Monthly Cash Flow ........................................................................................................................................ 20
1st Year Monthly Income Statement ............................................................................................................................ 21
Yearly Income Statements ........................................................................................................................................... 22
Financial Assumptions ................................................................................................................................................ 23
Loan Repayment .......................................................................................................................................................... 24
Supporting Documents ...................................................................................................................................... 25
Middleton High School 2
Executive Summary
If all of the restaurants in the United States offered the service of delivering their food,
sales and profits would increase almost exponentially. Unfortunately, not all do and not
all can. In the United States alone, only 10%-12% of restaurants deliver food. Most of
which is Pizza. With Deliverio, not only will restaurants have increased profits, but
grocery stores will too. Furthermore, consumers of these food providers will be able to
have their desired food and/or groceries in a short time.
Deliverio is a delivery service launching in Tampa, Florida that acts as the middle-man
between restaurants and grocery stores. Deliverio connects consumers to providers via an
online website or through a mobile application for a small fare. All delivery drivers are
self-employed and work on their own schedule; therefore, they are able to gain
commission based on the size of the order and the number of orders they deliver.
Deliverio will operate within the structure of a Limited Liability Company with two
owners, Alex Patton and Kyle Tom each owning 35 percent of the company. There will
also be a board of advisors; this will be led by Nicholas Mendoza who will have 10
percent company and four other members each with a 5 percent share. Alex Patton will
focus on the company's financials as he has a background in accounting, and business
administration. Kyle Tom will devote his attention to the marketing aspect of the
company considering his past with other major companies and business administration.
This will include connecting and creating partnerships with restaurants chains and
grocery stores. Major decisions concerning Deliverio will be decided with 3 votes, 1 for
each owner, and 1 for the board of advisors. With Alex Patton and Kyle Tom focusing on
their section of the company, paired with the input and guidance of the board of
advisors, Deliverio is bound to grow into a profitable and prosperous business.
Deliverio will start-up with a bank loan of $30,000, an investment of $10,000 from both
owners, and $2,000 from the five board of advisors’ members. The bank loan has a 4.5%
interest rate stretching from January of 2018 to December of 2019. At the end of the first
year, profits are projected to reach a net income of about $249,330 and consistently
increasing every year.
With the food delivery industry being very meager, Deliverio plans to expand its services
to other regions of Florida once the company is the financial standpoint to do so.
By expanding its core delivery services, the plan is to lead the food delivery industry in
Florida, and eventually expand into surrounding states.
Middleton High School 3
Company Description
Legal Form of Business Deliverio will be a limited liability company. The reasoning behind this decision is that
as a small business, the company will choose to be taxed as a partnership. This takes
advantage of a pass-through taxation method, meaning Deliverio and its owners will be
able to avoid double taxation. Furthermore, being an LLC will keep business debt
liability away from the owners. Compared to the companies’ full potential, Deliverio’s
profits in its beginning stages will be relatively low. Therefore, reflecting company
profits on individual tax returns will not be an issue. For these reasons, a limited liability
company best suits Deliverio.
Effective Date of Business Beginning on November 1, 2018, Deliverio will start reaching out to various restaurant
chains and grocery store businesses to create partnerships. On December 1, 2018,
Deliverio will begin out advertising via flyers, signs, and various web sources. The
launch of Deliverio is marked by the date in which its services become active in Tampa,
Florida on January 1, 2019.
Company Mission Statement/Vision Deliverio is a company that delivers food from restaurants and grocery stores.
At Deliverio, the purpose is to provide people with the luxury of having food delivered
whenever and wherever they desire with ease. Throughout this process, Deliverio aims to
keep the clients' priorities first.
Deliverio’s vision is nothing less than to connect customers of major grocery stores and
restaurants to a fast delivery system that is affordable and convenient.
Company Governance Between the two owners, Kyle Tom and Alex Patton will each own 35 percent of the
company. Both owners will equally contribute ideas and opinions for the progression of
the company. By collaborating with the board of advisors and analyzing each
decision, Deliverio's future is destined to go up-hill. All business decisions will be in the
best interests of the company.
Middleton High School 4
Company Description (cont.)
Company Location
Deliverio will have no concrete location, but more of a
region that will offer its services. The cutoff will be the
urban area of Tampa, and its suburban counterparts.
These suburban areas will consist of downtown Tampa,
Westchase, Carrollwood, Brandon, Ybor City, Temple
Terrace, Town 'n' Country, and Seminole Heights.
In regard to a corporate office, headquarters will be
located at 5700 Memorial Highway, Tampa, FL 33615.
Immediate Development Goals
Create and develop a culture that displays the values and shared beliefs of the
company.
Advertise through television, newspaper, and major social media networks to
establish a presence in the Tampa Bay area.
Employ a dedicated workforce that will fulfill the demands of consumers.
Create business partnerships with as many restaurants and grocery stores as
possible to widen the variety for the end user.
Enforce various workplace techniques such as Kaizen for continuous
improvement.
Overview of Company’s Financial Status
With Alex Patton and Kyle Tom being primary shareholders, both owners will invest
$10,000 each into the company. A further 10,000 dollars will be accumulated through the
2,000 dollars from the each of the five board of advisors. Along with an approved bank
loan of $30,000, Deliverio will have an accumulated $60,000 of capital. The bank loan,
along with investments, will cover startup expenses such as the LLC startup fee, rent,
mobile application and website production, insurance cost, and advertising.
Middleton High School 5
Industry Analysis
Description of Industry
Deliverio will be entering is the food delivery industry. Non-dominant, local competitors
such as GrubHub, Eat24Hours.com (A subsidiary of Yelp Inc.), DoorstepDelivery and
UberEats take up most of this industry.
Size: The food delivery industry is relatively small but has the potential to grow
exponentially. Therefore, the size of the industry can be projected to be much
larger than it is now, as it is not limited to a small number of products, unlike
pizza delivery. In the U.S, the pizza delivery industry's consumers spend over 33
billion dollars on pizza every year, and 20% of U.S. consumers eat delivered pizza
meals about once a week. If an industry that only can deliver pizza is this large,
then one that can deliver nearly any sort of food product has the potential to be
much bigger. As of now, the industry has not sprouted much due to very little, and
ineffective advertising.
Growth Rates: The growth rates of the food delivery industry are steadily
increasing. From 2012 to 2015, the industry has grown 33%, averaging about an
11% increase every year (excluding pizza). Considering that this industry is still in
an emerging stage, the projections are hard to predict, but if the industry persists, it
has the potential of growing into a $210B market in the upcoming years.
Nature of Competition: The food delivery industry has a mixed competition.
The majority of current food delivering businesses are either limited to a few
selected restaurants or specifically for their own restaurant. Nonetheless, the
restaurants that do deliver are mostly small and usually deliver pizza. Services that
deliver groceries are rare and are very limited to what they are able to deliver.
Combining both a wide variety of restaurants and grocery stores will merge the
two aspects of the delivery industry into one in which Deliverio will lead.
History: Dating back to 1889 in Italy, King Umberto and Queen Margherita were
recorded to be the first people to have pizza delivered to them by Raffaele
Esposito, known to be the most famous pizza chef in the world. Since then, many
innovations have been made to the delivery of food including the automobile. First
used by Domino's in 1961, cars started being used to deliver food to their
customer’s door-step. Eventually, restaurants with a variety of foods, besides
pizza, slowly started to enter their way into the food delivering service.
Middleton High School 6
Industry Analysis (cont.)
Trends and Strategic Opportunities within Industry Due to the target market trends, the demand of the service will primarily be high
during lunch and dinner times; nevertheless, this doesn't stop people from ordering during
breakfast. Sales are also affected by outside variables such as, sporting games, gatherings,
and clubs.
Deliverio shares a common ground with businesses in other industries such as Uber,
Facebook, Alibaba and Airbnb. Uber is the world's largest taxi corporation, but owns no
vehicles. Facebook is the world's most popular social media owner, but creates no
content. Alibaba is the world's most valuable retailer, but has no inventory, and Airbnb is
the world's largest accommodation provider, but owns no real estate. There is a trend
growing in today's businesses. Deliverio will own no vehicles and will not sell any food.
Deliverio, along with all the other businesses listed, are services that connect, and act as
the conduit between consumers and providers.
Increased Sales
65% of Revenue
goes to Drivers
35% of Revenue
goes to Deliverio
Restaurant
or Store
Customer
Middleton High School 7
Target Market
Target Market Defined
Deliverio's services target a wide range of people. Anybody with access to a credit card
and an internet-connected device will have access to its services; however, projections
show that specific groups of people will be the main consumers. These groups include
children home alone for the night, parents too busy to go out or cook dinner, or even
parties and small events that need food delivered.
Given the current economy, Deliverio will mainly be used by the upper and middle level
income customers, as people in those income ranges are more likely to be able to afford
its services. Lower income individuals will have the opportunity to use Deliverio,
however, statistics show that people from this category have less technology and do not
have money to easily spend on a convenience like Deliverio. Deliverio also anticipates
receiving consumers that are accustomed to shopping online as they are more likely to
use Deliverio.
Due to restaurant locations and availability, services are intended to be most used by
people in the urban and suburban areas of Tampa Bay. These areas are high concentration
zones for restaurants and grocery stores. Rural areas on the other hand, containing 19.3%
of the population, are less likely to have close stores and drivers interested in delivering
for Deliverio.
Analysis of Market’s Potential, Current Patterns, and Sensitivities Food delivery businesses in any highly populated city are very likely to succeed.
Especially in Tampa. In Tampa, nights tend to come early, and the 740,000 working class
employees have a tendency to go home late. With these patterns, Deliverio could
take advantage of the mass amount of people needing a bite to eat as their day comes to
an end. With the city of Tampa rapidly expanding many people will be looking to avoid
rush hour and have a nice warm meal (or groceries) come to them. Along with Tampa's
massive workforce, many people have kids that they need to tend to. With
Deliverio, their sons or daughters may easily order food as long as they are of age and
have parent’s consent.
Middleton High School 8
Competition
Key Competitors
The most prominent competitors in Tampa Bay are Grub Hub and Uber Eats. None of the
competitors listed deliver groceries or offer the option of ordering food from restaurants
with whom they are not partnered with. Both of which, Deliverio will be offering to
customers. A newer and quickly upcoming competitor is Prime Now. This competitor
offers both groceries and selections from restaurants but is relatively expensive.
Competitor’s Strengths and Weaknesses
The columns listed are the key components of a food delivery company. Competitors
have distinct strengths and weaknesses, but none offer the service of delivering groceries
or delivering from restaurants that they aren't partnered with. The research given was
found through a survey of people who have had experience with their service.
Competitor Strengths Weaknesses Differentiation
UberEATS Well known in the
market, used in
multiple locations,
subsidiary of Uber.
High prices, limited
availability
Deliverio will reach out
to wider variety of areas.
GrubHub Expands operation
beyond metropolitan
areas, well established
Limited number of
restaurant
acquisitions, fails in
popularity
Deliverio delivers food
as well as groceries.
Prime Now Offers selections from
both groceries stores
and restaurants, part of
Amazon, quick
expansion
High prices, limited
availability, slow wait
times
Deliverio will have faster
wait times for our
consumers.
Middleton High School 9
Competition (cont.)
GrubHub is a popular choice for people in the Tampa Bay area because of their long
presence in the industry. Over time, Grub Hub has lost popularity in the past year due to
the benefits that new competition has brought to the table. They lack employee
flexibility, which is the key to having enough supply of drivers. Their employees are
scheduled certain hours to deliver which does keep a steady number of drivers on the
road but can lead to problems such as not having a driver next to a restaurant when a
delivery is needed.
UberEATS has gained publicity as they branched off Uber Technologies Inc.'s Taxi
application, which has extended worldwide. UberEATS, compared to other competitors,
charges at a higher rate. The problem with this is that having an affordable price at a fast
delivery time are the factors considered most by customers when choosing a food
delivery service. Uber has created somewhat of an initial monopoly. There are other
businesses that deliver food, but as a result of Uber's marketing strategies they have
managed to hold their position as one of the major food delivering services in this
industry.
Prime Now is an Amazon service that is quickly expanding throughout both Tampa Bay
and the country. Unlike the UberEATS and GrubHub, Prime Now offers groceries. Prime
Now also has a delivery time within two hours. This is a great time for groceries but not
so much for restaurant orders. More so, Prime Now is a benefit of Amazon Prime.
Without this, consumers will be subjected to expensive prices. Despite their faults, they
have managed to succeed through loyal customers that regularly use their service.
Potential Future Competitors
The industry as of now has a high potential but is still somewhat unproven. Therefore,
there is always the chance of a new up-and-coming food delivery business. With
continuous advertising and special offers, Deliverio will secure its position in this
industry. Applications and services will be updated monthly to avoid falling behind and
taking the chance of a future competitor surpassing us in this industry.
Barriers to Entry for New Competitors To avoid being surpassed by these future competitors, Deliverio will establish a
dominance in the food delivery business in Tampa Bay by providing customers with the
lowest delivery fees compared to competitors, while maintaining a fast delivery time. If
these tasks are completed, customers will continue to use Deliverio’s services leaving no
room for outside competitors.
Middleton High School 10
Marketing Plan and Sales Strategy
Key Messages to be Communicated Deliverio will advertise its main advantages through a variety of techniques. The main
strengths of Deliverio that will be advertised will be the low-cost rates, and speedy
delivery times. Advertising the low-cost rates will include first use discount,
opportunities for various promotions, and reminders that Deliverio offers the lowest base
price rates compared to competitors. Speedy delivery times will be promoted through
phrases and pictures that promises customers that their food will stay hot and fresh
throughout the course of their order.
Marketing for drivers is equally as important as marketing for people to use its service.
Without any drivers on the road there won't be anyone to deliver the goods. When
marketing to hire drivers, the business will want to attract people who already have a job
and want to earn money on the side and people who don't have a job that are looking for
one. Deliverio will show them how much they could earn a week working as a driver and
how promising this opportunity can be.
Key Messages to Include in Advertising
Low Cost Rates
Fast Delivery Times
Employee Benefits
Middleton High School 11
Marketing Plan and Sales Strategy (cont.)
Options for Message Delivery
Deliverio wants to focus on presenting the idea of food delivering to people who have
never heard of the concept, and people that have heard of it but have never taken the
initiative to try it out. Its message will be delivered through various sources that are
guaranteed to bring in customers. These outlets consist of:
Creating billboard advertisements next to condensed, widely used roads.
Specifically: I-275, I-75, I-4, US-301.
Advertising on major TV channels in the area with a quick to-the-point video that
will catch prospective customers' eyes.
Give influential bloggers, with a respectable following, a complimentary delivery
to a destination of their choice in exchange for a written review.
Advertise on social media. Facebook and Instagram give Deliverio the opportunity
to reach certain demographics in certain areas and promote its’ services.
Like social media, advertising on certain radio stations can attract different
demographics. Talk and country radio formats have a predominantly older
audience, and pop tends to pull a younger audience. Through the radio, Deliverio
can selectively target certain consumers
Order Food Right to Your Doorstep from Your Favorite Restaurant with Deliverio!
We Offer the Lowest Rates! and and We Deliver Groceries
Middleton High School 12
Marketing Plan and Sales Strategy (cont.)
Sales Procedures and Methods
Deliverio will be completely online via webpage or mobile application. Through this
webpage or mobile app, consumers will have to follow a simple process to fill out
information necessary to complete their order. Users will have to fill out their address or
to wherever they want the food delivered. Payment will be done by linking a credit card
to their account and will go through a secured transaction. The application will display a
list of Deliverio’s partnered restaurants and/or grocery stores that are near the user. Once
a restaurant is selected, the restaurant's up-to-date menu will appear, and consumers will
be allowed create an order that they would like delivered. Once they have finalized their
order, the total cost and estimated fare for delivering will be given. The order will then be
sent to a driver closest to the restaurant. On the application, a real-time map will be show
where the Deliverio employee is, and the status of their food. Consumers will know
where their food is, and the expected wait time at all times. Once the driver picks up the
order, they will drive it directly to the specified location, making use of the company’s
cooler-like bags to keep the food at its’ intended temperature. At the end of the delivery
an exact sum of the expenses will be delineated, and customers will have the option of
including gratuity.
The ordering process is a bit different when consumers want food delivered from a
restaurant that isn't partnered with Deliverio. Usually these are smaller restaurants
that consumers will go to the restaurant's website or call them to place an order. Once the
order is placed they will access the Deliverio software and input information about the
order. Consumers can expect to input their name under the order, restaurant name and
location, and an overview of their order. This allows for the deliverer to pick up the order
with ease which benefits both driver and consumer. The deliverer will also pay using the
consumers electronic credit card through the application. The application restricts the
deliverer from using the electronic credit card on anything other than the order at the
restaurant. Throughout this entire process the consumer will know the status of their food
and where the driver is just like the regular process.
The process for picking up groceries is very similar. Users will order their grocery list
online through individual retailers such as Publix and Walmart Groceries. The only
limitation of delivering groceries is if the retailer offers the service of putting together a
grocery list. If they do, Deliverio will have no problem picking up the package and
delivering it to consumers.
Middleton High School 13
Operations
Business Facilities
Deliverio will have a corporate office located
on 5700 Memorial Highway, Tampa, FL
33615. This location will benefit the company
as it is easily accessible from the airport and
all three main urbanized areas of the Tampa
Bay. Another benefit to this location is that it
is in the city in which Deliverio is first
launching. This will maximize control and
communication over the company for
management purposes.
Production Plan
The main product that Deliverio will create is a mobile application and website. These
softwares allow for customers to be connected to a delivery system or to deliver food and
earn commission depending on how much they work. A small developer team will be
hired to create the application and improve it as needed.
Deliverio will be open 24/7 as long as there are employees on the road. Alex Patton will
organize and monitor the financials, while also working with the board of advisors to
make decisions concerning the company. Kyle Tom will focus on company marketing
and advertising, while also collaborating with the board of advisors.
Conference Room Alex Patton’s
Office
Kyle Tom’s
Office
Middleton High School 14
Operations (cont.)
Workforce Plan
Drivers are also "self-employed", so their schedule is completely up to them. They can
turn on the Deliverio App whenever they want to gain some extra income on the side, or
they can deliver full time. Drivers will gain commission off of every order’s delivery
fare. As demand for Deliverio rises, rates will be raised, and drivers will be able to earn
larger commissions. They will be filing their income taxes under a Form 1099 instead of
a W-2 Basis
Corporate office will be open Monday through Friday from 8 A.M to 3 P.M. Alex Patton
and Kyle Tom will be located here throughout the day to work on company progression
and to monitor our services throughout Tampa Bay. All meeting with the Board of
Advisors will also be held at corporate in the meeting room.
Impact of Technology
Deliverio will be able to operate effectively and efficiently by using key up-to-date
technology for both the customers and management to utilize. Accounting, finances,
taxes, Internet marketing, etc. will all be done with modern computers that will be kept on
the most updated version to ensure Deliverio stays ahead of security flaws and potential
bugs. Both the app and website will be actively managed to continue improving its
interface.
The Deliverio app and website interface will be clear and concise allowing people to
easily understand and operate the ordering process. Deliverio’s service will have an easy
and simple payment system that allows you to input your payment method and
information into a secure system. Users will also have the option of creating an account
with a login to avoid entering their credentials in multiple times. With this technology,
Deliverio ensures that customers will be able to order and receive their food hassle free.
Middleton High School 15
Management and Organization
Key Employees/Principals
Kyle Tom and Alex Patton will each manage specific parts of Deliverio to collaborate
and create a successful business. Both Alex Patton, and Kyle Tom will share the role of
CEO making them both co-presidents. The task each person is assigned is be based on
their studies and previous occupations.
Kyle Tom attended the University of Central Florida. He attained a masters’
degree in both Business Administration and Marketing. Since then he has worked
on marketing projects in the Tampa Bay area for many companies such as
Dominos, Dicks Sporting Goods, and more. After 5 years in the marketing
Industry Mr.Tom decided that he would dedicate his work full time for
the Deliverio Business.
Alex Patton attended the University of Florida in Gainesville, Florida. He attained
a Master’s in Business Administration and Accounting. He
also received a bachelor’s degree in Web Business. For 4 years, Mr. Patton served
has a financial assistant for Vibe Engineering. After 4 years of working there,
he has also decided to devote all his time and effort into the development and
success of the Deliverio business.
Nick Mendoza also attended the University of Central Florida, graduating 1 year
after Mr. Tom. He received a bachelor’s degree in Organizational leadership and
has agreed to take leadership in the Board of Advisors. In the past, he has worked
at various firms and actively participates in leading groups at community service
organizations such as the Red Cross.
As time progresses and certain operations become more demanding of the key
employees, additional members may become active in maintaining Deliverio's
businesses.
Middleton High School 16
Board of Advisors
As a limited liability company, a board of directors is not
required; however, a board of advisors will help manage
Deliverio by influencing important decisions within the
company. The board of advisors will be appointed by the
two owners and will consist of 5 people. This board will
be led by Nicholas Mendoza who will be in charge
of organizing and leading meetings. Here major
decisions will be made regarding financials,
legality, and rising issues.
Meetings will be held as needed, but there are three
required meetings held in the months of January, May, and October. Meetings will follow
Robert's Rule of Order to institute effective meetings.
Plan for Identifying, Recruiting, and Securing Key Participants
Deliverio's prerequisites for becoming a driver are simple and straightforward. The
requirements to be a driver for Deliverio are:
18+ years of age
A registered Florida driver’s license
No background of a DUI or any offense of the sort
A personal car in which you will use to deliver food
Time
To find these participants, advertisements will be put out on social media and through
other outlets. To recruit these members, they will have to sign up online and Deliverio
will go through all precautions to make sure the prospective member fits all the criteria.
To secure the new and existing participants, an incentive plan will be set.
Compensations and Incentives Plan
Deliverio is a business with a deep culture. Deliverio wants its employees to enjoy
working as much as its customers enjoy its service. For this reason, a variety of benefits
will be provided that come with being an active and dedicated employee. Drivers that
participate in delivery services at least once per week will gain
incentives ranging from discounts on special services to bonuses depending on the
driver’s sales and ratings. With these incentives in place it will encourage employees to
actively participate in Deliverio's services.
Kyle Tom
(CMO & Co-president)
Alex Patton
(CFO & Co-president)
Board of Advsiors)
Middleton High School 17
Long-term Development
Long-term Goals
Expand services to other major regions in Florida such as Miami, Orlando, and
Jacksonville and create more corporate offices in these areas. The goal is to reach this
by the third year.
Receive a 100% positive customer feedback rating by the end of the first year.
Build a favorable name in Tampa by community outreach projects, or sponsoring
charity events throughout each year.
Have exponential growth in application downloads.
File an 8832 Form to be taxed as a corporation.
Risks Identified and Analyzed
Risk Analyzed New and existing competitors
within the industry offering
rates more appealing to
customers
The food delivery industry is fairly new; therefore, it
wouldn't be a surprise for a new competitor to
enter. Delivery rates are always subject to change based
on competition and demand.
Driver liability risks While drivers are on the road delivering food, there is
always the chance of an accident occurring. The
accident will only concern Deliverio if the driver was
picking up or delivering an order.
Varying amount of supply and
demand The only issue is having a surplus of supply (Drivers)
rather than demand (Orders). Drivers will not earn as
much income and in result will not deliver for Deliverio
anymore.
Counterparty risks Deliverio works with different restaurants and acts as a
business mutualism concept (both parties benefit). There
is a risk of the opposite party withdrawing from the
partnership. This can be a problem, but users have the
option of ordering from restaurants that Deliverio is not
partnered with.
Middleton High School 18
Long-term Development (cont.)
Strategy to Reach Long-term Goals
To achieve the goals set in place and avoid as many risks as possible decisions will be
made based upon these schemes:
Increased advertising
Participate in or sponsor as many community projects available
Hold onto customers that have been using Deliverio’s services actively by offering
incentives
Hold drivers accountable for the ratings received. Take action if the ratings are
consistently low, and reward drivers if the ratings are high
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Year One Year Three Year Five
APPLICATION DOWNLOADS
Middleton High School 19
Financials
Accounting System
Deliverio will practice accrual-basis accounting with AccountingEdge Pro
software. Accrual-basis accounting will allow us to retain a more accurate picture of the
company's financial situation. The AccountingEdge Pro software will be used because it
not only allows us to keep track of the EBITDA (Earnings before interest, taxes,
depreciation and amortization), but can also keep track of employee work times and pay
them through this software. These features will allow us to stay up-to-date
on financials as everything will be organized and recorded in the same software.
Financial Projections
There are $60,000 in startup costs consisting of a $10,000 investment from each owner,
$10,000 accumulated from the board of advisors, and an approved $30,000 bank loan.
The funds received from the bank will be used in paying for the first few months
of operation. From then, the net income from the sales will be used to pay for all of the
business expenses such as rent, loan payment, salaries, advertising, and office supplies.
The first year projected net income is $249,330. As shown in previous trends in the
industry, Deliverio is expected to grow a considerable amount in its following years. The
projected net income of the third year of operation is projected to be $924,395 due to
greater advertising and sales. For the 5th year the expected net income is $1,621,454,
considering the expansion of services to other regions of Florida. These forecasts are
based upon how much is invested in advertisements and trends throughout the year.
Planned Loan Expenditures
Office Rent
Advertising
Salaries
Office Supplies & Technology
Insurance & Permits
Application & Website
$27,000
$5,166
$8,518
$5,000
$2,316
$12,000
Total $60,000.00
Middleton High School 20
Financials (cont.)
1st Year Monthly Cash Flow
Cash Flow Statement
For the Year Ended December 31, 2019
Cash Flow from Operations
Net Income $859,252
Ad Revenue $18,904
Apparel Sales $18,000
Cash Paid to Employees ($541,923)
Net Cash Flow from Operating Activities
$354,233
Cash Flow from Investing
Additions to Equipment
($104,903)
Net Cash Flow from Investing Activities
($104,903)
Cash Flow from Financing
Proceeds from Loan
Payment of Loan (Year 1)
$30,000
($15,713)
Net Cash Flow from Financing (Year 1)
$14,287
Net Cash Flow $249,330
Middleton High School 21
Financials (cont.)
1st Year Monthly Income Statement
Deliverio
January February March April May June
Revenue $25,250 $32,739 $38,550 $43,311 $48,855 $56,706
Growth % --- 29.66% 17.75% 12.35% 12.80% 16.07%
Ad Revenue $700 $907 $1,068 $1,146 $1,293 $1,500
Apparel Sales $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Gross Profits $27,450 $35,146 $41,118 $45,957 $51,648 $59,706
Expenses
COGS $4,000 $4,500 $5,000 $5,500 $6,000 $6,500
Salaries $15,925 $20,648 $24,313 $27,316 $30,813 $35,764
G&A $165 $165 $165 $165 $165 $165
Technology $1,400 $110 $110 $110 $110 $110
Marketing $300 $300 $300 $300 $300 $300
Loan Payment $1,309 $1,309 $1,309 $1,309 $1,309 $1,309
Total OpEX $23,099 $27,032 $31,197 $34,700 $38,697 $44,148
EBIT $4,351 $8,114 $9,921 $11,257 $12,951 $15,558
July August September October November December
Revenue $69,686 $82,752 $95,687 $106,518 $120,877 $138,320
Growth % 22.89% 18.75% 15.63% 11.32% 13.48% 14.43%
Ad Revenue $1,708 $1,817 $1,931 $2,018 $2,246 $2,570
Apparel Sales $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Gross Profits $72,894 $86,069 $99,118 $110,036 $124,623 $142,390
Expenses
COGS $7,000 $7,500 $8,000 $8,500 $9,000 $9,500
Salaries $43,951 $52,191 $60,349 $67,180 $76,236 $87,237
G&A $165 $165 $165 $165 $165 $165
Technology $110 $110 $110 $110 $110 $110
Marketing $300 $300 $300 $300 $300 $300
Loan Payment $1,309 $1,309 $1,309 $1,309 $1,309 $1,309
Total OpEX $52,835 $61,575 $70,233 $77,564 $87,120 $98,621
EBIT $20,059 $24,494 $28,884 $32,472 $37,503 $43,768
Middleton High School 22
Financials (cont.)
Yearly Income Statements
Income Statements for Years 1, 3, 5
Revenue Year 1 Year 3 Year 5
Sales $859,252 $2,706,457 $4,742,892
Ad Revenue
Apparel Revenue
$18,904
$18,000
$23,462
$22,360
$26,048
$24,687
Gross Profit $896,156 $2,752,279 $4,793,627
Expenses
Salaries
$558,513
$1,759,197
$3,082,879
Advertising $21,118 $35,871 $56,478
Insurance & Permits $26,284
$2,316 $2,316
Loan Payment $15,713 $0 $0
Application and Website $12,000 $2,000 $2,000
Office Supplies and Technology $5,000 $1,500 $1,500
Rent $27,000 $27,000 $27,000
Total Expenses $646,826 $1,827,884 $3,172,173
Net Income $249,330 $924,395 $1,621,454
Middleton High School 23
Financials (cont.)
Financial Assumptions Deliverio's services will target a wide variety of people to ensure that our services will
always be active in the community. It can be assumed that our busiest times will be
during sporting events such as football, hockey, or baseball games as many friends and
families have parties and will need an easy way to get food for their event. Deliverio will
also maintain its’ awareness in the food delivery industry for future techniques and
potential competitors. Deliverio will adapt to the economic environment created by the
demand of the people using various business techniques. As future businesses enter the
market the aim is to have at least 65% of the potential consumers using Deliverio’s
services over other competitors at the end of 5 years.
31%
26%
20%
15%
7%
2023 Projected Percentage of Market
Deliverio
Grub-Hub
Uber Eats
Postmates
Other
Middleton High School 24
Financials (cont.)
Loan Repayment
`
Middleton High School 25
Supporting Documents
1099 Form
Middleton High School 26
Supporting Documents (cont.)
Technical Descriptions
The application created will connect the drivers to customers. In
the Deliverio application there will be a variety of setting and
options that is easy to understand.
When you first open the app, you will be greeted with a list of
partnered restaurants and the option to choose a restaurant that
Deliverio is not partnered with. If you choose one of the
restaurants, their updated menu will show up and the user will
choose their order and finalize it. At the end, the estimated
delivery fare will be presented along with the cost of their order.
The information in the application will then be sent to an active driver closest to the
restaurant that is receiving orders. On the driver’s end, they would have to accept the
order and drive to the restaurant described. When they arrive, they would have to either
pick up the order or wait for the order to be finished. Once they receive the order they
will then drive it to the specified location and drop it off.
If the user decides to have food delivered from a restaurant that Deliverio is not partnered
with, they will take a different ordering path. Prior to opening the Deliverio application
they would already have their order placed through the phone or online with the
restaurant themselves. Once they open the application there is an option to not order food
from the restaurants listed. Once clicked, the customer would have to input information
such as their name, location of the restaurant, and the estimated time the order will be
completed. From there, the delivery process is exactly the same as when ordering from
partnered restaurants.
Users have the option to create an account with us. Creating an account entails: imputing
credit card information one time, access to order history, and chances to receive special
offers. If an account is not created, credit card information would have to be inputted
after every order.
Throughout the entire delivery, once a customer is connected to a driver, the customer
will be able to check their delivery’s status at all times.
Middleton High School 27
Supporting Documents (cont.)
Limited Liability Company Filing Request
Middleton High School 28
Supporting Documents (cont.)
Limited Liability Company Filing Request (cont.)
Middleton High School 29
Works Cited
Fitzsimmons, James A., Mona J. Fitzsimmons, and Sanjeev K. Bordoloi. Service
Management: Operations, Strategy, Information Technology. New York:
McGraw-Hill, 2014. Print.
"Pizza Statistics." Statistic Brain. N.p., n.d. Web. 04 Jan. 2017.
<http://www.statisticbrain.com/pizza-statistics/>.
"Take-out and Delivery Franchise Industry Study." Franchise Direct. N.p., 13 Jan. 2010.
Web. 04 Jan. 2017.
<http://www.franchisedirect.com/foodfranchises/takeoutanddeliveryfranchiseindus
trystudy/14/263>.
"Business Plan Guide." Info Entrepreneurs. Canada Business Network, n.d. Web. 04 Jan.
2017. <http://www.infoentrepreneurs.org/en/business-plan-guide/>.
Office Space For Lease. OfficeSpace.com. N.p., n.d. Web. 04 Jan. 2017.
<https://www.officespace.com/tampa-fl/building/139071-5700-memorial-
highway>.
Mason, Corey. "FDFLHillsborough-Pinellas." Photobucket. N.p., n.d. Web. 04 Jan. 2017.
<http://s865.photobucket.com/user/borodino21/media/FDFLHillsborough-
Pinellas.jpg.html>.
"Car Early Pay off Calculator." Bank Rate. N.p., n.d. Web. 04 Jan. 2017.
<http://www.bankrate.com/calculators/auto/early-payment-payoff-
calculator.aspx>.
Roof, Katie. “Leaked Postmates financials suggest company might be doing better than
everyone thought.” TechCrunch, TechCrunch, 25 Apr. 2016,
techcrunch.com/2016/04/25/leaked-postmates-financials-suggest-company-might-
be-doing-better-than-everyone-thought/.
“Five Reasons Why Billboards Can Be the Game Changer for Your Brand.” Bartush
Signs, 21 Dec. 2016, www.bartush.com/marketing/five-reasons-why-billboards-
can-be-the-game-changer-for-your-brand/.