1.

Executive Summary

HOT & SPICY Fries are a locally owned French fries outlet that will be positioned as a new
attraction through my creative approach and detail presentation. HOT & SPICY Fries will
provide excellent fries at value pricing. HOT & SPICY Fries is the answer to an easy food, to
be consumed while window shopping and walking around in a super market.

My main priority is to establish one outlet in a super market, preferably close to the most
prominent shop in the super market of pench foti. Later, my effort will be a further
development of more outlets in the other possible areas of University.

This plan is prepared to obtain a location for the initial launch of this concept. Additional
financing will need to be secured for the subsequent outlets, anticipated in near future. The
initial capital investment will allow HOT & SPICY Fries to provide its customers with a
value-driven experience.

1.1 Objective

(a) To establish a French Fries outlet, which becomes an attraction for the people
coming to the Super Market

(b) To grow the business such as to open other outlets as soon as possible in near
future

1.2 Mission

(a) My mission is to be the most successful French fries outlet in the Super market

(b) My main focus will be to provide High quality of French fries at affordable
price

1.3 Key to Success

(a) High quality

(b) Low price

(c) On time delivery

(d) Good hygienic conditions

(e) Creating attraction through banners and pamphlets

(f) Positioning as near as possible to the most prominent shop in the market

2. HOT & Spicy-Summary

What is HOT & Spicy Fries

Hot & Spicy Fries are fine cut, crisply fried and deliciously peppered French fries.

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Quality of Potatoes
The fresh and high quality potatoes will enable HOT & Spicy Fries to be popular in taste.

Fresh all the time

All the time availability of fresh fries will also serve as a positive point of HOT & Spicy
Fries.

Timings
As most of the families & students visit the super market in the evening, therefore the timings
of HOT & Spicy Fries will be from 10 AM to 11 PM.

2.1 Business Ownership

Business is owned by my self (Juhi Jameel). I am Bachelors in Business

Administration from BUITEMS,
2.2 Startup Summary

Details of the capital required for the startup of HOT & Spicy French Fries is as
follows: -

Heads Requirement (Rs.)

For purchases of potatoes, cooking oil,
82,160/-
salt & ketchup
One month rent of location 1,200/-
One month electricity bill 2,000/-
Salary of one worker 2,000/-
Purchase of French Fries maker (2.5L) 6,865/-
Initial setup cost 4,000/-
Initial promotion cost 1,500/-
Total requirement 99,725/-

2.3 Location and Facilities

(a) The location of Hot & Spicy in Pench Foti super market is in it self an
advantage for my business, as there is no French Fries stall in the market earlier.

(b) Hot & Spicy French Fries will be located on the foot path just beside “The
Main General Store” which is the most prominent shop of the super market.

(c) As most of the customers shop at General store & it's very near to BUTEMS,
therefore this location will suit best for HOT & Spicy French Fries getting attention of
maximum customers coming in the market.

(d) Chairs and tables will be provided for those customers who want to sit, have
chit chat and eat the French Fries right at HOT & Spicy.

(e) As there is no French Fries earlier in the market, therefore HOT & Spicy have
an advantage and an easy access to the customers.

(f) To facilitate the customers, a tissue paper will be provided with each packing
box to the customers so that they easily clean their hands after eating the Fries.

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3. Product

Our product will be French Fries only and there will be no Soft drinks or juices at HOT &
Spicy. The reason is being the location of HOT & Spicy in front of General Store, which is
already, the most famous store of market having all sorts of juices available. So my aim is to
gain uniqueness in French Fries, which is right now not available with any one in the market.
The packing boxes of HOT & Spicy will be having Name and Logo of HOT & Spicy written
all over the box to leave an impression on the mind of customer.

3.1 Competitive Comparison

As there is no French Fries stall in the market earlier, therefore presently there is no
competitor of HOT & Spicy. However, looking at HOT & Spicy, new entrants will
certainly enter in to this field. Therefore, it is mandatory for Hot & Spicy to gain the
customers loyalty through high quality and low price as early as possible. Because
competitors are HOT & CHILLE, TABAQ, Etc. they are expensive for a student and
some people needs a little lite snack they will prefer our product.

3.2 Sourcing

Following are the sourcing of HOT & Spicy: -

(a) Fresh potatoes will be provided daily by one of the distributor of Main
Sabzi Mandi.

(b) Cooking oil, ketchup and salt will be provided by one of the wholesale
dealer at Masjid Road as and when ordered to him.

(c) Packing boxes will be collected from paper market Masjid Road by my
worker who is working at HOT & Spicy, again as and when required by us.

3.3 Sales programme

Following will be the sales programme for the first HOT & Spicy and same will be
followed for the future openings also: -

Opening
Opening day will be announced through pamphlets distribution and banners
hanged in the super market

4. Market Analysis Summary

(a) As I have mentioned earlier, that there is no French Fries outlet in the super
market before, therefore the HOT & Spicy is already having an upper edge in the
Market.

(b) Moreover, French Fries are so easy to eat even during shopping that it will
attract most of the customer.

(c) There is already a paratha and samosa stall in the super market, which always
remains surrounded by people, indicating that people do like such type of food.

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(d) Young children & BUITEMS students will be our target market as kids and
students like potatoes chips very much.

(e) In addition, parents of young children & lecturers will also be our target
market as these parents want that their children must eat potatoes. So in this way HOT
& Spicy will be facing a healthy market.

4.1 Market Segmentation

Potential customers of HOT & Spicy can be divided in to three segments.

(a) Young school going children & BUITEMS students will be the primary
market.

(b) Parents of such children and University lecturers will be secondary market.

(c) Lastly all people entering the super market and specially those who came to
shop at General store.

4.2 Target Market Strategy

Hot & Spicy has targeted the young children & University Students as the primary
potential customers because the young school going children loves to eat potato chips.
In this age their taste is so developed that they like potato dishes. Specially when
located at a prominent location in the market, these children will force their parents to
buy HOT & Spicy French Fries.
Secondary market is the parent of such young children because by targeting parents I
can automatically target their children.
Lastly, the location of HOT & Spicy is such that all the people other than primary and
secondary customers will indirectly become the potential customers.

4.3 Market Needs

Although, there is no French Fries stall in the super market, therefore exact market
needs cannot be identified. However, by asking different customer shopping in the
market and keeping in view the general requirements, following could be the market
needs: -

(a) Quality Fries

(b) On time service

(c) Good surrounding environment

(d) Low price

4.4 Market Trend

As there are some food stalls such as hot & chilly and Tabaq, Pizza point but non of
them is focusing on low price strategy in the in the super market prior to this business,
therefore I am assuming that till now there is no specific trend available for HOT &

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 Spicy French Fries. However, after running the business for few months, some trend
may emerge out.

4.5 Trend in Food Service in Super Market

Although there is no specific trend available for the business of French Fries in the
super market, however by looking at the trend of other Food Services available in the
super market, a rough estimate can be made. Following is short summary: -

(a) Tasty Samosa & Paratha stall The only available stall of any
food item in the super market is “Tasty Samosa Stall”. As I mentioned earlier
also that this samosa stall on average remains surrounded by 3 to 4 persons,
therefore it can be roughly estimated that people will give a good welcome to
HOT & Spicy French Fries.

4.6 Main Competitors

Again as mentioned earlier that there is no French fries stall in the super market,
therefore there is no direct competitor of HOT & Spicy French fries in the super
Market. However, some of the potential competitors could be “Tasty samosa stall”,
"Hot &chilly", "Pizza Point", "Tabaq". Tasty Samosa stall is established in super
market from last three years and showing a healthy growth in its business
progressively. "Hot &chilly", "Pizza Point", "Tabaq" are located at some distance and
are tremendously crowded at night but at morning. SO our advantage is morning
service specialy for BUITEMS students.
In the presence of “Tasty Samosa stall” "Hot &chilly", "Pizza Point", "Tabaq", HOT
& Spicy French Fries may face a competition. However the high quality and low price
of HOT & Spicy will certainly force the old customers of Samosa Stall to try the HOT
& Spicy French fries.

5. Strategy and Implementation Summary

At first, I will open one outlet exactly beside the most prominent and popular store of super
market i.e. General store and as we go further, HOT & Spicy is planning to open
few other outlets in other areas of BUITEMS. In attracting customers to try our fries,
I will provide an all visible cooking, so that people will see how HOT & Spicy is
committed to freshness in our product.
The open cooking will also let out an aroma of our freshly fried fries into the surroundings
area, so that people will come and try our product.
5.1 Competitive Edge

(a) Enthusiastic and friendly staff

(b) Our fries are made of 100% fresh potatoes, unlike the frozen fries used by
some others

(c) Attracting packing

(d) A prominent location

(e) First French Fries stall in the super market

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5.2 Market Strategy

My strategy is based on serving the markets well. I will start my first outlet as a
“market tester” that could become a model of the expanding number of outlets in the
future. Concentration will be on maintaining quality and establishing a strong identity
in the local market.
A local store-marketing program will be utilized at each location. Local store
marketing is most effective, followed by print ad. As soon as a concentration of stores
is established in a market, then broader media will be explored. I believe, however,
that the best form of advertising is still “buzz.” By providing an energetic
environment with unbeatable quality at an acceptable price in a clean and friendly
outlet, HOT & Spicy will be the talk of the town as main source of marketing will be
Viral marketing which will consume fewer resources and won't burden the cost factor
of our fries. Therefore, the execution of my concept is the most critical element of the
plan.

5.3 Pricing Strategy

Keeping in view the high inflation rate, the price of a small Fries packet is kept as low
as Rs 5/- and large packet of Rs. 10/-. I will be try to gain the customer loyalty
through high quality and low price and than if needed would increase the price slowly
and gradually.

5.4 Marketing program

My marketing program will be based on two aspects.

(a) Our most important tactic will be “word-of-mouth” or "Viral Marketing" and
at the stall marketing by the worker itself. This will be by far the cheapest and most
effective of our marketing programs because of the high traffic in targeted shopping
location.

(b) Marketing in the super market using banners, posters, brochures etc

5.5 Positioning Statement

My main focus in marketing will be to increase customer awareness in the

surrounding community. I will direct my entire tactic and program toward the goal of
explaining what HOT & Spicy is all about. I will price the Fries fairly, keep standards
high and execute the concept so that “Viral Marketing” will be my main marketing
force.

5.6 Sales Strategy

The sales strategy is to build and open new locations in order to increase revenue.
However, this plan will be implemented when the one “market tester” outlet showed
potential growth. As each individual location will continue to build its local customer
base over the first four months of operation, the goal of each outlet is Rs 21,840/- per
month achieving a break-even point in four months.

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5.7 Sales Forecast

As no historical data is available for type of business, therefore "qualitative method"

is used relying on the general trend of super market and my own knowledge. It is
expected that maximum numbers of customers would come to buy the HOT & Spicy
French Fries between 4 PM to 11 PM. But it will remain open from 09AM to 11PM
Following are the reasons for this expectation: -

(a) During this time, children come out of their homes to play and during
play or at the end of the play they desire to eat something.

(b) And from 9Am till 4 PM BUITEMS students will come from
University and purchase our Hot & Spicy French Fries.

(c) Most of the families also come out for evening walk at this time.

5.8 Strategic Alliance

For the success of my business, it is important that I develop a long and trusted
relationship with my raw suppliers and with the authorities of BUITEMS. For this I
have following steps: -

(a) A fifteen days advance contract with potato distributor who will
deliver me fresh potatoes on my demand with lead-time of one day. I have
deposited fifteen days advance payment with him so that he may not have any
doubts on my credibility.
(b) A fifteen days advance contract with wholesale grocery distributor
who will deliver me salt, ketchup and cooking oil on my demand with half-day
lead time.

5.9 Milestones

In order to implement my business plan in right way, I have choked out a detailed
plan with milestones. I will strictly follow this plan as the opening of first outlet
entirely depends on it. Following are the details: -

Milestones Start date End date Budget

Designing of 18-01-10 19-01-10 Nil
promotion banners
and posters
Printing of banners 20-01-10 21-01-10 Rs 1,500/-
and posters
Construction of stall 18-01-10 25-01-10 Rs 4,500/-
Placement of 22-01-10 22-01-10 Nil
banners and posters
Positioning of Stall 26-01-10 26-01-10 Rs 500/-
at the location
Purchasing of 27-01-10 27-01-10 Rs 6,865/-
French Fries maker
Delivery of required 29-01-10 29-01-10 Rs 3,341/-
raw material
Opening 01-02-10 01-02-10 Nil

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6. SWOT Analysis
This following SWOT analysis captures the key strengths and weaknesses within the
company, & describes the opportunities & threats faced by my Hot and Spicy
Business.
6.1Strengths
• Low cost
• Unique product
• Fresh product
• Morning service
• Efficient service
• Timely cooking and supplying fries on time

6.2 Weaknesses
• Hot & chilly boasting services and business hold and command
• Fully decorated restaurant launch is not possible in start
• Lack of advertisement strategy. As to beat hot & chilly, Tabaq
competition we need aggressive marketing & Advertising strategy but
it's not possible as to keep the low selling price.
6.3 Opportunities
• To gain student marker from 9 AM to 11PM
• To focus children playing in Jinnah town in the evening time
• To focus ladies and families who walk around the place in the evening
6.4 Threats
• Serious Threat can be Hot & chilly
• Tabaq
• Pizza point
• Green and species
• And as these businesses are well establishes we need to go for
aggressive strategy against them

7. Management Summary

The initial management team depends on me. I will not add additional overhead until
absolutely necessary. This will mean that the initial staff support team will have to
work extra. By doing this, my overheads will be as low as possible. At present time,
HOT & I own Spicy Fries only.

7.1 Management Team

At present there is only one member of Management Team and that is my self. In
future as I am planning to open more outlets, than might be there would be
requirement of additional managerial staff. But right now it is not.

7.2 Organizational Structure

As this is the first outlet and there is not much of staff on this outlet, therefore the
organizational structure of HOT & Spicy French Fries is simplest. However, with the
growth of business and opening of new outlets the Organization structure may get a
little less simple.

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 7.3 Personnel Plan

Right now there is only one employ of HOT & Spicy French Fries. This employ will
be doing all the jobs starting from cutting the potatoes, Frying and handling the cash.
Since its only one outlet with not much of workload, therefore there is no requirement
of additional staff. This employ will work for seven hours daily.

8. Financial Plan

Currently only I own the business. Depending upon the growth of business, it will be decided
in future whether any partnership is required or not.

8.1 Start up Funding

I am by my self is providing the initial fund required for startup of the business.
Details are appended below: -

S No Heads Requirement (Rs.)

For purchases of potatoes, cooking oil, salt &
1 82,160/-
ketchup
2 One month rent of location 1,200/-
3 One month electricity bill 2,000/-
4 Salary of one worker 2,000/-
5 Purchase of French Fries maker (2.5L) 6,865/-
6 Initial setup cost 4,000/-
7 Initial promotion cost 1,500/-
8 Total requirement 99,725/-

Details of each head will be explained in the Summary of Supply Chain of Business.

8.2 Break even Analysis

(a) Expected Sale is Qty 168 packets of French Fries daily

(b) Each packet price is set at Rs 5/-

(c) This means an income of Rs 840/- daily

(d) Resulting in to Monthly income of Rs 21,840/-

(e) As per the expected sales, it reveals that a sale of 1994 units will result in
Break even

(f) Again as per the expected sales, approximately 119 days will be taken to
achieve the Break-even sales

(g) Hence HOT & Spicy will achieve break even in four months

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 Break Even Analysis

Rs 99,725 120000

100000

80000

Cost 60000

40000

20000

0
Price of Each packet of French Fries

21840 Packets

9. SUPPLY CHAIN SUMMARY

9.1 SUPPLY CHAIN NETWORK

Farms Factories

Central Distributor Central Distributor

Regional Distributor Regional Distributor

Retailers Retailers

Oil, Salt & Ketchup

Potato wholesale dealer
wholesale dealer

Storage
Room
Upstream supply
chain

Hot & Spicy

French Fries Downstream supply
chain

Personnel of
BUITEMS

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9.2 Demand Forecast

(a) Qualitative Forecasting method is being used to forecast the sales of French
Fries. Qualitative forecasting methods are primarily subjective and rely on human
judgment. They are most appropriate when little historical data is available.

(b) Since the Hot & Spicy French Fries is the first business of its nature in the
Super Market of Pench foti Near BUITEMS, therefore there is no historical data
available for such business for that particular market.

(c) However, keeping the sales of “Tasty Samosa & Paratha Stall” the only stall
of food in super market, as a general reference the Sales forecast of HOT & Spicy is
done.

(d) Calculations are given below: -

Each packet of French Fries cost Rs 5/-

Forecasted customers per day 84

Each customer buys 2 packets on average

9.2.1 Forecast of Potatoes requirement

For 2 packets ¼ kg of potatoes

For 168 packets 21 kg of potatoes daily

L0 = 21 kg = Forecast for next day

9.2.2 Forecast of Cooking Oil requirement

For 2 kg of potatoes 1 ½ liters of oil

For 21 kg of potatoes 16 liters of oil

L0 = 16 Liters. = Forecast for next day

9.2.3 Forecast of Salt requirement

For 21 kg of potatoes 2 kg of salt

L0 = 2 kg = Forecast for next day

9.2.4 Forecast of ketchup requirement

For 21 kg of potatoes 4 kg of ketchup

L0 = 4 kg = Forecast for next day

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 9.3 Reorder Level

Reorder level = Average daily usage x lead time

9.3.1 For Potatoes

Reorder level = 21 x 1 = 21 kg

9.3.2 For Cooking Oil

Reorder level = 16 x ½ = 8 liters

9.3.3 For Salt

Reorder level = 2x½ = 1 kg

9.3.4 For ketchup

Reorder level = 4x½ = 2 kg

9.4 Safety Stock

9.4.1 For Potatoes

Safety stock = 21 kg

9.4.2 For Cooking Oil

Safety stock = 8 liters

9.4.3 For Salt

Safety stock = 1 kg

9.4.4 For ketchup

Safety stock = 2 kg

9.5 Inventory to be maintained

(a) Raw material in the form of Potatoes, cooking oil, salt and ketchup

(b) At any given time inventory held will be the safety stock of specific item plus
the remaining inventory

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9.6 Costs calculations

Total cost is equal to = Purchase cost + Ordering cost + Holding cost

However, as this is a new start up of business therefore initial cost of setting up the
business is also to be included in total cost. This cost will be added once only and will
not be counted in calculations from next month on wards. Total cost than becomes

Total cost= Purchase cost + Ordering cost + Holding cost + Initial setup cost

These three costs will now be calculated individually. For the ease of calculations
these costs are calculated on daily basis and will extend to monthly basis.

9.6.1 Purchase Cost

Daily requirement of Potatoes 21 kg

One kg of potato costs Rs 20/-

Potato purchase cost Rs 420/- daily

Daily requirement of Oil 16 liter

One liter of oilcosts Rs 120/-

Oil purchase cost Rs 1920/- daily

Daily requirement of salt 2 kg

One kg of salt costs Rs 20/-

Salt purchase cost Rs 40/- daily

Daily Ketchup requirement 4 kg

One kg of ketchup costs Rs 95/-

Ketchup purchase cost Rs 380/- daily

9.6.2 Ordering cost

All the items will be delivered daily. Ordering cost of individual items is

Ordering cost of Potato Rs 300/- per order

Ordering cost of Oil, Salt and ketchup Rs 100/- per order

Total Ordering cost per order Rs 400/-

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 9.6.3 Holding costs

Following are variables of holding costs: -

(a) Rent of location Rs 1,200/-

(b) Electricity bill Rs 2,000/-

(c) Salary of worker Rs 2,000/-

Total holding cost = Rs 5,200/-

9.6.4 Initial setup cost

Purchase of French Fries machine Rs 6,850/-

Stall setup cost Rs 4,000/-

Initial Promotions cost Rs 1,500/-

9.6.5 Total Cost

By adding all the components of Cost, the total cost come out be Rs 99,725/

9.7 EOQ

For EOQ the basic assumption is that the demand is known whereas I am starting new
business having no previous data because of which the future demands are not known.
Hence the EOQ cannot be calculated.

9.8 Aggregate multiple products in single order

I am using the concept of multiple products aggregation in single order. In case of my

business, the concept is applied on the aggregation of orders for Cooking oil, Salt and
ketchup. These three items are being ordered collectively, hence saving that extra
money, which would have spent in ordering them separately.
Moreover, the ordering cost would also have been charged separately if the order of
these three had not been aggregated.

9.9 Economies of scale to exploit quantity discounts

Quantity discounts have also been used by ordering large quantity of potatoes i.e. 21
kg at once rather than ordering them in small fraction. Potatoes if ordered in a
quantity less than 20 kg than the price charged per kg would have been Rs 22/-.
However, on a order of more than 20 kg at once there is a discount of Rs 2/- and same
has been utilized also.

9.10 Replenishment policy

Continuous review replenishment policy is implemented. As soon as the inventory

level reaches the Reorder point, immediately the order is placed.

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10 Ratio Analysis

10.1 Liquidity Ratios

Liquidity Ratios are used to measure the Firm’s (HOT & Spicy French Fries) ability
to meet short-term obligations. From this ratio much insight can be obtained in to the
present cash solvency of HOT & Spicy ability to remain solvent in the event of
adversity.

10.1.1 Current Ratio Current assets divided by Current liabilities. It

will show the ability of HOT & Spicy to cover its current liabilities with its
current assets.

Current assets
Current liabilities

S No Current assets Rs
For purchases of potatoes, cooking oil, salt &
1 82,160/-
ketchup
2 Purchase of French Fries maker (2.5L) 6,865/-
3 Initial setup cost 4,000/-
4 Total Current Assets 93,025/-

S No Current Liabilities Rs
1 One month rent of location 1,200/-
2 One month electricity bill 2,000/-
3 Salary of one worker 2,000/-
4 Total Current liabilities 5,200/-

Current assets 93025 17.8 which means that the Firm is highly liquid and
Current liabilities 5200 that’s a good sign for starting up a business

10.2 Financial Leverage Ratios

To assess the extent to which the firm is using borrowed money, Financial leverage
Ratios are used. However, since the HOT & Spicy French Fries is owned completely
by me and no means of external financing is used, therefore there is no requirement
of calculating the Financial Leverage Ratios.

10.3 Activity Ratios

Measures how effectively the firm (HOT & Spicy) is using its assets.

10.3.1 Account Receivable Turn Over Ratio Provide an insight in to

the quality of firm’s (HOT & Spicy) receivables and how successful the firm
is in its collection

For business growth and to attract the target market audience in an effective
way, a four months contract has been signed with BUETIMS. As per this
contract, quantity 1000 packets of French Fries will be provided to the
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 BUETIMS canteen each month. This will make a permanent accounts
receivable amount of Rs 5000/- for HOT & Spicy each month.

In calculating Break even in sub-Para 7.2, it has already been calculated that
the monthly income of HOT & Spicy will be approximately Rs 21,840/-.

Net Sales = 21840 = 4.37

Receivables 5000

This Ratio tells us the number of times accounts receivables of HOT & Spicy
have been turned in to cash.

11. Risk Analysis RISK OF THE PROJECT

Like every project, this project also entails various events that can jeopardize the successful
completion of the project. Our Business always advocates a pro active approach towards risk
assessment. Therefore before actual execution of the project we are identifying and assessing
the events that can have an intense impact on project completion, either negatively or
positively.

11.1 RISK IDENTIFICATION

Events that can have an impact on the execution of our HOT & spicy French fries
business are identified in the Risk Breakdown Structure (RBS) below. The probability
of occurrence of the events and the intensity of their impact on the business is as
under the heading ‘Risk Assessment’.

11.1.1 External Risks

• Political Instability: given the current scenario, it is quite possible that our
business may halt in between if there is high political instability with in
Pakistan and Quetta e.g. Specially at Jinnah town as these days the threat
of bomb blast is common in jinnah town
• Risk of strikes: As keeping the scenario of Balochistan strikes are being
held after ever one or two months which can increase the tenure of
reaching our break even point.
• Competitors Threat: As in this place there is a strong hold of our
competitors like mentioned earlier which can cause a factor not to florish
our business.

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• Bureaucratic influence: Bureaucratic people who have strong hold in this
area might also stop us to do business or may ask for some fee for their
called "Chia Pani" in local areas.

11.1.2 Organizational Risks

• Human resource availability: soft ware engineers are of high importance

in the successful completion of the project. Because of high demand of
soft ware engineers it is expected that they may leave the organization,
although the organization is giving them a competitive compensation
package.
• Bomb or any Suicide Threat: In case of any bomb or suicide threat we
need to have a fire alarm and fire extengiours and extra reserve amount to
over come the cost might incur as its location is at open space.
• Funding: The organization may face huge problem in funding the
business due to sudden changes or any miss hap

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 Risk Break
Down Structure

Organizational
External Risk Risk

Bomb Human
Strikes Competitors Bureaucracy Political Funds
Threats Resource

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