TEAM – 7

BUSINESS PLAN

Abishek M.
Aswathaman A.
Aakash Kumar R.S.
Arvinth Kumar V.
Fredrick Joshua
Derrick Chris
Vaanmugilan S.
Vignesh B.P.
Sharan Lakshman V.

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 Confidentiality Agreement

The undersigned reader acknowledges that the information provided by______________in this
business plan is confidential; therefore, reader agrees not to disclose it without the express written
permission of________________.

It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means
and that any disclosure or use of same by reader may cause serious harm or damage
to____________________.

Signature:

Name:

Date:

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 TABLE OF CONTENTS

S.NO CONTENT PAGE NO.

1 ORGANISATIONAL FEASIBILITY

1.1 Start-up Summary 5

1.2 Our Services 6

1.3 Objectives & Goals 7

1.4 Mission & Vision 7

1.5 Strategy to Success 8

1.6 Company Ownership 9

1.7 Investors Consideration 9

1.8 Organisational Structure 10

2 MANAGEMENT FEASIBILITY

2.1 Management Team & 5 M’s 11

2.2 Marketing Mix 14

2.3 Competitive Landscape 16

2.4 Competitive Edge 16

2.5 Market Segmentation 17

2.6 Personnel Plan 18

3 ECONOMIC FEASIBILITY

3.1 PESTLE Analysis 19

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3.2 Risk Analysis 21

3.3 Entry Strategy 22

3.4 Cost And Benefit Analysis 23

4 TECHNICAL FEASIBILITY

4.1 SWOT Analysis 24

4.2 Marketing Strategy 26

4.3 Sales Strategy 27

4.4 Pricing Strategy 29

4.5 Distribution Channels 30

4.6 Performance Channels 31

5 OPERATIONAL FEASIBILITY

5.1 Business Model 33

5.2 Competitor Analysis 34

5.3 Location and Facilities 36

5.4 Legal Structure 37

6 FINANCIAL FEASIBILITY

6.1 Budgeting & Forecasting 38

6.2 Break-Even Analysis 40

6.3 Projected Cash Flow 42

6.4 Projected Balance Sheet 43

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 1. ORGANISATIONAL FEASIBILITY

1.1 START-UP SUMMARY

Crave Box is the new age start-up company in the quick food service sector. This start-up has
a plan to convert the traditional unorganised food sector which includes Dabbawallas and other
regional regular food service providers to an organised sector. This company will be for sure a
disruptive market space in the industry of food service. The enterprise with the investors of new
age entrepreneurial mind set have planned in such a way to make the business profitable within a
year of establishment.

Crave Box’s will serve its customers the meal of their choice and this will be the unique selling
proposition of this company. It has its own target customers like migrant students and the working
communities. It also extends its services to the corporate clients as well. Since the pandemic every
one prefers to a hygiene food and Crave Box is committed to maintain the high-level safety and
hygiene standards in food preparation.

The Business Plan of Crave Box is documented in detailed manner as follows:

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1.2 OUR SERVICES

Crave Box is a cloud kitchen-based company have decided to provide our customers the right
to choose their combination of meal in one box. The Customers can order their meal through
various channels that is through online mode, offline mode. We extend our services to corporate
clients by providing orders through contractual basis and also participating in corporate events.
We also concentrate our services to migrants who stays as paying guests by having tied up with
companies like Zolo-stays, Stanza-living etc.

We have decided to operate our cloud kitchen for lunch and dinner as well. We have
categorised our dishes into 5 Main heads.
• Sweet
• Starters
• Bread
• Rice
• Gravy

We have selected varieties in those 5 main categories. Our customers can choose each dish
in all the categories. Once the items selected, we will customize their meal box according to their
wish and serve them.

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1.2 OBJECTIVES & GOALS

• OBJECTIVES:
1. To serve a quality meal to our customers at affordable price.
2. To maintain health and hygiene standards in our food preparation.
3. To serve our corporate clients at the right time.
4. To maintain high standards in packaging and delivering.
5. To maintain quality standards in our kitchen as well as in food materials.

• GOALS:
1. Aiming to reach more customers in the establishing City – Chennai.
2. To Maintain maximum customer satisfaction in our budget meal box.
3. To retain our initial customers through our subscription-based business model.
4. To increase our cash flow and revenues in upcoming years.
5. To establish our company brand as familiar among customers.

1.3 MISSION & VISION

• MISSION:
To provide an exemplary quality meal to each and every customer that we serve with
affordable price and quantity. We aim to serve our customers with high standards in food
preparation, packaging and delivery as well. To make Crave Box as a value to the customers
for every meal they have in.

• VISION:
To establish Crave Box as a reputed brand by evolving this business model to provide
nation-wide through franchises. To serve every Indian a budget meal through Crave box.
Aiming to reach 150 million customers by 2030. To attain a maximum of 40% Market share
in Quick Food Service in cloud kitchen segment. Making Crave Box as a well reputed listed
company in near future.

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1.4 STRATEGY TO SUCCESS
Our company will focus on four main strategies that will impact an organic growth and bring
success to our business model. The four main strategies are as follows:

• Quality Standards:
We assure that the products we use in Crave Box will be in high quality standards. The products
include the raw materials that we use in to prepare the dishes which are dairy, poultry, sea food,
groceries etc., our Chefs will always use aprons, masks and gloves while preparing the food. The
utensils will be washed cleanly after every dish is prepared. The packaging material will be of
organic material rather than plastic and will packed properly before we serve our customers.

• Relationship Management:
We will maintain strong relationship with our vendors and customers as well. There will be a
team to maintain vendors relationship and will continuously monitor the payments and the orders
as well. We will also include hyper-pure (Zomato) and Jio marts as our vendors to get huge trade
discount. While concentrating on customer side we will provide a good hospitality while
delivering our meal to our customers.

• Marketing & Cost Planning:

Since we are a cloud kitchen-based start-up, we will incur more funds for marketing our brand
to reach out to our customers. So, we will plan our cost in such a strategy that funds are more
utilised for marketing and promotional activity than other expenses. We have ensured to adopt
cost effectiveness in procurement of fixed assets such as utensils and other kitchen setup. We have
opted for lease agreement rather rental for our kitchen space.

• Expansion Plans:
When we develop our business in our incubating city and become profitable with positive cash
flows, we will plan our expansion strategy by making our business model to develop as a franchise
model. Where probable investors of food industry businessmen could join us in expanding our
business. We will also make strategic agreements with multiple cloud kitchen-based businesses in
other states to expand our business. Once our brand become a household name, we will plan to
list our company in stock exchange by IPO.

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1.5 COMPANY OWNERSHIP:
The Ownership of the company will be “Private Limited” as we are the group of founders
invested our capital into this business. The share holdings of the business will be split among the
investors with the agreed proportion with respect to the capital they invest in. This type of
ownership will give us a much favourable situation for the other institutional and angel investors
to acquire stake in our company by compromising our initial investors share in the company.
The Ownership chart is as follows:

Company Ownership
14% 17%
13% 8%

8%
9%
10%
10%
11%

Abishek M. Aswathaman A. Aakash Kumar R.S.

Arvinth Kumar V. Fredrick Joshua Derrick Chris
Vaanmugilan S. Viknesh B.P. Sharan Lakshman V.

1.6 INVESTORS CONSIDERATION:

Since we are a Private Limited Company, we could approach various institutional and angel
investors to invest in our company. We could participate various start-up summit to present our
business idea for potential investors to invest. We encourage to participate in funding rounds
which is led by big institutional investors. There are key notable points that we put front the table
of the investors to invest in our business.
➢ Quick service food segment industry is a $25 Billion market.
➢ We are into a new disruptive market where most of the industry is still inorganized
e.g., Dabbawalla
➢ We are most hygiene centric and new age people prefer this post Covid spread.
➢ We are building a robust supply chain that we are promising food delivery in 20
minutes the order is placed.
➢ We are projected to attain a market share of 25% by 2025 and will make the start-up
profitable with our cost-effective strategies.

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1.7 ORGANISATIONAL STRUCTURE:

Our Company plans to have a lean model in terms of leadership. The organisation will be led
by CEO who has a direct supervision on three departments working on a daily basis which is
Procurement, Operations, Human Resource. Where as in other end our CFO will take up the tasks
of supervising two departments which is external and not in a daily basis i.e., Marketing and
promotion and Finance and would directly report to CEO on that matter.

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 2. MANAGEMENT FEASIBILITY

2.1 MANAGEMENT TEAM AND 5 M’s:

The management team will consist of top, middle and lower-level management. The initial
investors will take up roles in top and middle management in office setup while lower management
will work in the kitchen field. The roles of the management team are listed below:
Mr. Abishek M. - Chief Executive Officer
Mr. Sharan Lakshman V. - Chief Financial Officer
Mr. Aswathaman - Head of Logistics (Supply Chain)
Mr. Aakash Kumar R.S. - Head of Procurement
Mr. Arvinth Kumar V. - Head of Customer Relationship Management
Mr. Fredrick Joshua - Head of Operations
Mr. Derrick Chris - Head of Marketing
Mr. Vaanmugilan S. - Head of Human Resources
MR. Vignesh B.P. - Head of Finance & Strategy

2.1.1. MAN-POWER:
In the kitchen we are planning to hire one manager for taking orders with a team of two staffs
under him. Then we are set to hire 2 set of sous-Chefs with 2 assistant chefs with them. Now for
packaging team we will require 6 staffs. Now in total we have 15 members at the kitchen as lower
management who will work on a regular basis. The Salaries for the manager and sous- chefs will
be around ₹35000 – ₹45000 per month and for all the assistants ₹15000 – ₹25000 per month.

2.1.2. MACHINES:
The list of machines required for the kitchen setup is follows:

S.No. Product Numbers Cost/no Total

1 Steel Cooking Stations 2 7500 15000
2 stove 2 8000 16000
3 Pan 4 2500 10000
4 utensils 4 3000 12000
5 cutting equipment 2 2000 4000
6 mixer 2 6000 12000
7 grinder 2 7500 15000
8 Chimney 2 25000 50000
9 RO water system 1 10000 10000

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 10 Tables 4 1000 4000
11 Chairs 4 500 2000
12 Misc. equipment 1 10000 10000
13 Billing system 1 5000 5000
14 Computer 1 45000 45000
15 Printer 1 8000 8000
16 Furniture 2 15000 30000

248000

2.1.3 MATERIAL:
Raw materials include various categories such as groceries, vegetables and fruits, Dairy,
Poultry, Sea Food, Meat. The list of raw materials is classified as mentioned below:

Vegetables & Sea

Groceries Fruits Dairy Poultry food Meat

Atta Onion Curd Chicken meat Prawns Mutton

Country
Maida Tomato Butter chicken Fish Beef
Basmati
Rice Carrot Ghee Crab
Mustard Potato Milk Squid
Coriander Beans Cream
Chilli Cauliflower Yogurt
Turmeric Capsicum Paneer
Salt Curry leaves Cheese
Sugar Spinach
Pepper Beetroot
Eggs Brinjal
Cooking
Oil Spring onion
Olive oil
Sauces

This is the basic chart of raw materials but it intends to change according to dishes that we
prepare on the daily basis. There will be a procurement team who maintain the inventory at
ongoing levels and update them as well. The orders will be placed according to the requirement
of the projected sales and the volume of orders we get in.
We would always place orders in bulk to retain the trade discount from the potential vendors
and will keep the vendors list as diversified to get supply of raw materials at the right time. We
also ensure the quality of the raw materials before the food preparation.

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 2.1.4 MONEY:
The capital raised for the company will be initially made through the investors savings. The
initial investment will be around ₹75,00,000/- and the break-up of the capital amount is listed
below:

Mr. Abishek M. ₹ 850,000

Mr. Sharan Lakshman V. ₹ 700,000
Mr. Aswathaman ₹ 400,000
Mr. Aakash Kumar R.S. ₹ 400,000
Mr. Arvinth Kumar V. ₹ 500,000
Mr. Fredrick Joshua ₹ 550,000
Mr. Derrick Chris ₹ 500,000
Mr. Vaanmugilan S. ₹ 450,000
MR. Vignesh B.P. ₹ 650,000
Total ₹ 5,000,000

Once the company is set, we will also participate in funding rounds and will seek the
investments from institutional investors and angel investors as well. We can also induce the
borrowed capital if in case necessary for the working capital of the business.

2.1.5 METHOD:

The method we use in our kitchen is a quick food service preparation model which is
McDonell’s model. It is a model where the cooking stations and other material preparation is set
in an amicable manner which could use effectively while preparing the food and could save a lot
of time in the preparation. The work flow will be in a repetitive way that for each and every dish
our chefs prepare.

Next method that we use in packaging is rapid method that the staffs involved in packaging
will be co-ordinated with the manager and his team for the orders-based packing. According to
the orders the packaging team will customize the meal and pack in a single box, thus by making
the customers to receive the meal they preferred.

Next method that we use in marketing is by promoting in the social media such as google ads,
Facebook ads, Instagram ads, YouTube ads. We also conduct frequent public presence for getting
reviews and other promotional activity such as distributing coupons, discounts etc. We will
connect with the co-living societies to have the frequent orders from them.

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2.2 MARKETING MIX:
• POSITIONING:
Crave Box comes under the cloud kitchen based quick food service industry. In this industry,
many predominant players that the business is competing such as local restaurants, Fast foods,
local Dabbawallas. So, we have positioned our business in such a that our targeted customers
differ from other competitors. The business is set to target most customers who are in need for the
regular, healthy food that could be customised on a daily basis. For which we have analysed the
marketing mix of our company in four categories. They are as follows:

• PRODUCT:
The product that we offer is a customised meal box for lunch and dinner. Where there will be
five categories under which each item should be selected. We have different menu that will be
changed on a weekly basis. We have separate menu selection for veg and non-veg customers. The
list of products is mentioned below;

SWEET STARTER BREAD RICE GRAVY

VEG Rasamalai Paneer tikka Butter naan Peas Pulav Veg Makhanwala
Basandhi Alu Cheese tikka Kulcha Paneer Fried Rice Malai Kofta
Rasagula Mushroom Fry Alu parotta Mushroom Fried Rice Paneer tikka masala
Gulab Jamoon Baby Corn Fry Rumali Roti
Mysore Pak Lotus Stem Fry Garlic Naan

NON VEG Rasamalai Chicken tikka Tandoori Naan Egg Fried Rice Chicken Chettinad Masala
Basandhi Chicken 65 Butter naan Chicken Fried Rice Prawn Masala gravy
Rasagula Prawn 65 Chicken stuffed Naan Prawn Fried Rice Fish Curry
Gulab Jamoon Fish finger Prawn Stuffed Naan
Mysore Pak Mutton balls Kulcha

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• PRICE:
The pricing strategy that we use in our business model is economy and market penetration
pricing strategy. Wherein we classified our meal boxes according to the quantity for kids and
adults. Another classification is for veg and non veg meal box. The price details of the meal box
are mentioned below:
SINGLE ORDER
KIDS ADULT

VEG Rs.99/- Rs.129/-

NON VEG Rs.149/- Rs.199/-

SUBSCRIPTION MODEL
KIDS ADULT

WEEKLY VEG Rs.499/- Rs.699/-

NON VEG Rs.799/- Rs.999/-

MONTHLY VEG Rs.1599/- Rs.1899/-

NON VEG Rs.2799/- Rs.3299/-

There is also a subscription-based model in which customers can order on weekly and monthly
basis in which the customers can avail more discounts on it.

• PROMOTION:
Since we are a cloud-based company, we have to promote us more to make the brand reachable
to the customers. We will undergo various marketing methods such as traditional method and as
well as new age technological methods. Under traditional methods we will promote our brand
through posters, billboards, pamphlets and advertisements in Radio stations and television.
In technological methods, we will use social media platforms such as Facebook, twitter, google
ads, YouTube to promote our brand. We use our own website and apps to posts blogs, offers and
other product promotions through online.

• PLACE:
Initially we target the city – Chennai where we plan to launch our establishment and the exact
location will be centre of the city Nungambakkam. Where it will cover a radius of 25 km where
we could reach more customers quickly for the delivery of our product.

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2.3 COMPETTIVE LANDSCAPE:

The analysis of various competitors in the market is taken into consideration to check the
parameters of Unique selling position in the market.

FACTORS CRAVE BOX THE BOWL BVKB BEHROUZ

COMPANY BIRYANI

Product Meal Box Only rice Bowl Only Biryani Only Biryani

Pricing Economy Mid Premium Mid Economy Premium

Delivery 20 Mins 30 mins 2 hours 45 mins

Order placement Frequent Frequent Previous Day 6 hours before

Hospitality Customer Good Good Customer Centric

Centric

Marketing High High Neutral High

Customisation Available No No No

2.4 COMPEITIVE EDGE:

By the analysis we could come to the conclusion that our unique selling proposition is the
customisation of the meal box and also the subscription-based pricing model that we follow in
our business. Because of this USP’s we could retain the initial value customers and thereby the
cost of acquisition per customer will be reduced. We also indulge in 20 mins delivery of the meal
box because we are situated in the heart of the city. While comparing the price with the other
prominent competitor business we can see our price comes under economy category in which it
perfectly suits our target customers.

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2.5 MARKET SEGMENTATION:
For the purpose of this analysis, we have categorised our target market in to various types. This
research is purely based on our product and pricing category and to narrow down our marketing
work to specific set of customers. The various types of our target market are as follows:

• Traditional Consumer:
Crave box will serve its meal box to all the customers who can place orders through online via
our website, WhatsApp and application. It is also open to all the customers who place orders
through offline mode either walk in or via phone call. We will serve our customers their desired
meal and will show our subscription model to retain the initial customer. This is the category in
which new customers are acquired and where we will spend most of our marketing and
promotional activity.

• Corporate Clients:
We will also offer our services to corporate clients such as IT companies and other MNC’s in
Chennai. When the corporate offices need lunch and Dinner for regular basis or any eventual basis,
we will serve them with our meal. We will have live counters on the premises. We have separate
subscription plans for the corporate clients on weekly and monthly basis. Our marketing team will
solely focus on the corporate clients with a separate approach and attractive discounts. The
corporate clients can decide the menu according to their preferences.

• Migrants:
Our next target market is the employees and students who come from various cities and state
and who stays in the PG’s and other Mansions and Hostels will need quality and healthy food on
day-to-day life. So, we have the main area of target in the market segmentation as the migrants.
For this type of category there will a prominent company who offer paying guests services. Those
include the Zolo co-living, Stanza-living, OYO rentals. Our marketing team will reach these
companies and explain about the product we deliver and will also explain about the subscription
model which will attract more customers.
We will also have strategic partnerships with these companies and help our customers to have
a quality meal. Since we are approaching with strategic partnerships there will be more synergy
between our partners and the costs incurred will be reduced for our partners in providing the meal
to their customers. On the contrary we will have more orders and our customer base will be more.

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2.6 PERSONNEL PLAN:
We initially started with nine of our investors for this business. We will further hire 15 members
as a set for one particular cloud kitchen. While we expand our business will require further more
employees. Since we plan to have 4 kitchens across city by this year, we will require 60 employees
in total. In which 12 will be professionals and 24 will be skilled labours (sous-chef and assistants)
and 24 will be unskilled labours for packaging. While expanding we will have our own delivery
partners and will hire 15 members initially. This will be the setup for kitchen site and our corporate
office will require teams. For each team will have 4 staffs under our heads of the departments and
it will be around 28 members. These employees will be hired through online platforms like
LinkedIn, Naukri, AngelList, Monster etc. and through advertisements. There will be more
training programs will be conducted for our employees and will have separate mentoring sessions
for our chefs too. We also encourage diversity among our employees.

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 3. ECONOMIC FEASIBILTY
3.1 PESTLE ANALYSIS:

• Political Factors:
There are various current reforms and politically influenced factors affect the online food
industry. As public health policies are focusing on fresh food ingredients with lower sugar and
sodium, the food sector is adding healthier options in their menus. Political regulations such as
food quality, hygiene, packaging, food safety, and wages require cloud kitchens to adhere to
standards that are highly sustainable and target to health. For E.g., Beef and supply of beef foods
is banned in Gujarat. So, Crave Box is always in caution to check the political factors that we
abide by the rules and regulations of the government. The menu that we choose in Crave Box will
be as per the regulations of the local government.

• Economic Factors:
The economic factors are also an important thing to taken into consideration. Crave Box is
economically sound as it has good relationship with vendors, banks and also the ultimate
customers. Since our kitchen is located in the centre of the city, it is feasible to serve our customers
with the radius 20 kms. When it comes to employability, we have hired around 60 people and we
provide them the salary that is acceptable in the market. The demand for the product is high in the
market where we segmented our target customers into three. The market is still unorganised and
we have the vision to bring into an organised sector. Since we have good relation with our bank,
we could avail borrowed loans at lower interest rate.

• Social Factors:
The Social factors include the tastes and preferences of the local public. Here in crave box we
serve the taste and preferences of 85% of the general public that they live in Chennai, according
to our survey. We serve authentic Indian dishes which includes all the sweets, breads, rice varieties
and gravy according to the cultural preferences. While expanding our business we will also adopt
to the changes in socio-cultural factors in the establishing city or state. Our Marketing team will
also simultaneously conduct the taste preferences that are new entrant to the existing city. For
E.g., Shawarma and Burmese food culture in Chennai.

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• Technological Factors:
In first at our kitchen, we use technological methods to support our chefs to prepare the food.
Our cloud kitchen is flexible in adopting new technologically advanced equipment such as solar
parabolic concentrator and solar steam generator. The process that we use in our cooking or the
food preparation solar steam cooking system. Where in other side we use technologically
advanced features such as social media ads to promote our brand. We have built our own
applications and websites to take in orders. This D2C platforms helps to reach more of our retail
customers.

• Legal Factors:
There are various licenses and registration required for cloud kitchen and we in Crave Box
have got through all the check list;
1. Building permit.
2. Fire safety permit.
3. Police license.
4. Health trade license.
5. Business registration.
6. ESI registration & PF registration.
7. FSSAI registration.
8. GST registration.

• Environmental Factors:
Our Crave box have taken in to consideration of various environmental factors that are
favourable to the society, they are as follows:
a. We use sustainable boxes for packing rather than plastic boxes.
b. We use recyclable water that we use to clean our utensils.
c. We follow strict emission control by high tech chimneys.
d. We use Electric eco-friendly vehicles to deliver our customers.
e. We use high hygiene standards in food preparation.
f. We strictly follow safety standards for disposing our kitchen wastes by segregating based
on the degradability.
g. We also use fire safety equipment in our kitchen in case of any emergency.

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3.2 RISK ANALYSIS:

There are various risks involved in the cloud kitchen business and our Crave Box team have
critically analysed various risks involved. The risks are as follows:

• Lack of Proper Structure: Structure of the cloud kitchen is the main factor that decides the
success of the business. It becomes a huge risk when there is no proper structure of the cloud
kitchen setup as well as the management structure as well. The Standard operating procedures
should be always followed and in, our Crave Box we will follow the SOPs with regards to
hygiene and safety.
• Improper Food Costing: Costs of the product should be delicately decided based on the
pricing strategy and should be affordable to the target customers. When there is an improper
pricing made in the product it will lead to reduction in sales and it also create negative image
on the brand. Since we are targeting one particular segment where the affordability places a
vital role, we have subscription-based pricing model in which most of the customers will be
attracted.
• Lack of Consistency: Consistency is the key to success. Food service industry and the
businesses should always follow consistency in running the business. There should always be
same taste and quality in the product or the food we serve to our customers. This will help in
customer retention and creates a loyalty among the value customers. For this consistency we
should follow same set of personnel in the business E.g., Same set of chefs should be
maintained. While expanding our business there should be proper training sessions and
mentoring session will be given to our employees to maintain the consistency.
• Poor Financial Planning: Even though the cost of launching a cloud kitchen business is lower
than that of a traditional restaurant format, the bottom line is that without substantial financial
planning, the chances of success are low. Underestimating the working capital, you require to
operate a cloud kitchen restaurant is often one of the biggest mistakes businesses tend to make.
In the cloud kitchen business, the biggest challenge is not start-up costs but the significant
financial support that is required to scale operations and expand market share. We have
decided to be cost effective also be unique in planning our financials. We will always maintain
positive cash-flows in running our day-to-day business. Strict budgetary planning will be done
on a weekly basis. If there is any deficit, we will also induce the borrowed capital from banks.
Always we will maintain contingency or reserve funds for any unexpected situation that occur
in due course of business.

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• Marketing Challenge: Most restaurant advertisements (billboards, social media promotions,
search engine ads) feature a location or a link to find nearby outlets. This is important because
it aligns with the customer’s expectation of having a tangible location as reference. A food
service without a tangible location can often be seen as a red flag since customers can doubt
the kitchen’s hygiene adherence and there is no referential location to help address this.
Additionally, such businesses are solely dependent on food delivery (either their own or third-
party services) which puts the customer in a difficult position. So, Crave Box has decided to
spend more on marketing and promotional activity to reach out to the customers.

• Dependence on Food Delivery: Maintaining a delivery fleet for a cloud kitchen is costly,
which is why most cloud kitchens relay on third-party services like Swiggy, Zomato and so
on. There is a commission that the cloud business has to pay such services on each and every
order. As a result, the profit margin reduces which cannot be compensated through takeaway
or dining. When there is any change in climatic conditions such as rain, it is difficult to reach
out to the customers.

3.3 ENTRY STRATEGY:

The strategies that we decided to follow while we enter into our business are as follows:
❖ Setting up of clear goals – Vision and Mission.
❖ Formulating founding team to plan the business establishment.
❖ To do the research on the target market.
❖ Deciding the size of the business.
❖ Arranging proper finances, both working and fixed capital for the business.
❖ Free sample distribution on the inaugural day of the business.
❖ Attractive discounts on the retained customers who come twice or thrice to place orders.
❖ Retained customers will be explained about the subscription model.
❖ Attractive promotions on the Hostels, PG’s and other stays.
❖ Huge discounts on corporate orders.
❖ Using affiliate marketing on the social medias we will promote our inaugural day offer.
❖ Launch of the business will be made by a prominent celebrity chef in the launch area.
❖ Customers will be provided with value card on the initial orders and could use value
points to redeem on the further orders.
❖ The initial customers could also avail invitation code to ask their friends and families to
subscribe to our business, so as to earn more value points.

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3.4 COST AND BENEFIT ANALYSIS:
A cost-benefit analysis is the process of comparing the projected or estimated costs and benefits
associated with a project decision to determine whether it makes sense from a business
perspective. Generally speaking, cost-benefit analysis involves tallying up all costs of a project or
decision and subtracting that amount from the total projected benefits of the project or decision.
If the projected benefits outweigh the costs, you could argue that the decision is a good one to
make. If, on the other hand, the costs outweigh the benefits, then a company may want to rethink
the decision or project.

Cost Benefit Analysis Process:

The Costs involved in CBA is as follows;

I. Direct cost: The costs include all the set-up for kitchen and corporate office. The costs
include materials, machines, utensils and other furniture items. This will cost around 2.5
lakhs for one kitchen setup.
II. Indirect cost: The costs include all the variable expenses like rent, admin expenses, raw
material procurement, marketing expenses. This will cost around 5-7 lakhs approx.
III. Tangible cost: The cost includes various expenses like labour, material, quality and
logistical cost. The estimation costs will be around 2-3 lakhs.
IV. Intangible costs: The cost include customer acquisition and vendor search costs and
treating employees. The estimation costs will be around 3-5 lakhs.
The total costs incurred will be around 18-20 lakhs

The Benefits involved in CBA is as follows;

I. Direct Benefits: The sales and the revenue that the business yield. On an average if we
take up the single order of 250 members on an average price ₹150, we will end up earning
around 10 Lakhs per month. By the year end we will end up break even with the costs
incurred will be taken back and then company will be profitable from the second year.
II. Indirect benefits: These are the benefits which we will provide to the employees as well
as the investors. These include the ESOP – Employee’s stock option, health insurance and
also provide vehicles to the delivery partners.

Since the company’s CBA is done and the weightage is more on the benefits rather than costs,
the ideation of the Crave Box Business is successful.

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 4. TECHNICAL FEASIBILITY
4.1 SWOT ANALYSIS:

• Strengths:
➢ Our unique selling proposition is the meal box customisation.
➢ The pricing of the product is much affordable to the economic consumers.
➢ Internal fleet management is done for the delivery of the products.
➢ Operating costs are kept low.
➢ Standards in food preparation are highly maintained with respect to the quality and
quantity.
➢ Unique subscription model under food service segment.
➢ Unique Target market is prevailing already.

• Weaknesses:
➢ There is no facility for in place dine in.
➢ The customer relationship is not in a physical way.
➢ Brand quality will be in question due to invisibility of the business.
➢ Heavy marketing costs will be incurred.
➢ Delivery in unforeseeable conditions is difficult.
➢ Subscription model will be a testing one since customers will prefer different tastes
every day.
➢ Target market is pre-determined and not open.

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• Opportunities:
➢ Our scaling opportunity is more in this cloud kitchen segment.
➢ Innovations in product could be done with the customer feedback.
➢ Inviting brand ambassadors to promote our brand quality.
➢ With the advancement of new technology, reaching out to the customers will be much
affordable.
➢ Social media marketing will help to reach indigenous customers.

• Threats:
➢ The competition will be more in the near future as a greater number of companies
dealing in particular target market is increasing
➢ The government interference will be more in the regulation of online food delivery
sector.
➢ Legal issues could be more threat whenever there is a mistake in delivery of goods.
➢ Employees could easily share the business model to the competitors.
➢ Long term sustainability depends upon the customer retention rate.

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4.2 MARKETING STRATEGY:
Crave Box have decided various marketing strategy to pull the customers. The brand
positioning will in such a way that will attract the target customers. We will use both the traditional
and the conventional ways of marketing to build the brand. The various marketing strategies are
listed below:
➢ There will be print media before the day of inauguration stated to be “free food on the
day of inauguration” it comes under the free sample distribution to reach the customers.
➢ Attractive billboards and posters in the public gathering places and paying guests,
hotels, motels etc.
➢ Providing discounts with the third-party delivery aggregators.
➢ Placing QR code invitations and offer pamphlets in our delivery partners.
➢ Participating in various college and schools’ food fests to promote our brand.
➢ Involving in all kinds of social media marketing with live stream in most of the social
media platforms where we could reach our customer.

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 There will be a process that the marketing strategy will be carried over online that is the social
media marketing.

1. Opening the social media accounts.

2. Starting the website.
3. Creating content on our business.
4. Start Blogging about the products and services.
5. Promoting ads through search engine optimisation.
6. Promoting through influencers who have huge follower’s base.
7. Building great lead magnet through various web services.
8. Using affiliate marketing promote through remunerations.

4.3 SALES STRATEGY:

Crave Box’s sales strategy starts from building a separate team for sales and making it as
strategic business development team. The team will constantly undergo training sessions and that
will lead to the familiarization of the product and service we dealt in. We also conduct pitching
session training to the sales team. The team will have one lead manager under him various sales
and business development interns will be hired. We will recognize the sales people with both
monetary and the non-monetary basis. The Monetary incentive will be based on the volume of
customer gained and will on the commission basis. The other non-monetary benefits include free
accommodation and food, travel expenses re-embused. The sales team will have recognitions such
as reward vouchers for the top performers. Because of the various incentives from the management
hope sales will perform with huge focus in their work.

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 The process in which the sales team will be trained to pitch their sales pitch to the corporates
and the strategic partner businesses are based on the following sales strategies that we follow in
our business;
• Explaining the value proposition:
Most of the customers will be new to the service that we provide. We will have to explain about
the value proposition that we bring to them. Since we are concentrating on the regular services of
the food which most of the working people as well as the student communities are in need, we
must explain the customer about how the business works and the expenses that are saved by
selecting our service.

• Creating the Urgency to change:

Why should the customers choose us? This is the obvious question that we as a service provider
should answer the customer in any sales pitch. Now when we explain the value that we provide to
the customer by explaining the daily spending towards their food, obviously the gross monthly
food expense will be more than our subscription model. Now it is the time to attract the customer
to create an urgency to try our service once. When we fulfil the customer needs, we will for sure
retain them.

• Time to reveal our offers and USP:

Now when the customer decides to opt for our subscription, we will for sure further explain
about offers and the unique selling proposition to our potential customers. The USP will be
obviously the customisation of the meal box where they could decide the food of their preference.
Even they could customise the recipe for their taste. This particular customisation could never be
found in any of the online food service restaurants. Further we will have offers especially for the
student and women communities who should be encouraged.

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4.4 PRICING STRATEGY:
Crave Box will always bring a greater value for the money that is being spent by the customer.
We will always try to be economical and most affordable to our customers. They won’t regret for
spending money to our meal box. We have imbibed various pricing strategies to reach out the
rational customers that we target.

• Economy pricing:
An economy pricing strategy involves targeting customers who want to save as much money
as possible on whatever good or service they’re purchasing. We have decided to keep our meal
box in economical pricing as we are targeting students and migrants. On an average a person will
be spending around 150-300 for a quality meal in Chennai. We are here providing the maximum
at ₹199/- for a single order adult meal box. This will be much affordable to our customers. We
even provide discounted pricing for the customers who opt for subscription model. The highest
price for the subscription will be ₹3299/- on the monthly basis.

• Market penetration pricing:

Instead of starting high and slowly lowering prices, we can take over the market by
undercutting our competitors. Once we develop a reliable customer base, our prices could be
increase. Many factors go into deciding on this strategy, like our business’s ability to potentially
take losses upfront to establish a strong footing in a market. It’s also crucial to develop a loyal
customer base, which can require other marketing and branding strategies. We even follow this
method of pricing strategy to take over the market share of existing unorganised food service
providers who are the competitors of our business.

• Value-based pricing:
In value-based pricing, our company bases its pricing on how much the customer believes the
product is worth. This pricing model is best for our business who offer unique products, over the
competitors. Asking for customer feedback on timely basis and creating a perceived value to the
service that we offer.
All the pricing strategies that we incur will be provisional and will be subject to change in the
due course of the business. Why because we should attain a market share in this segment that is
why we are compensating our prices. The losses will be recovered when the business cashflow
gets positive.

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4.5 DISTRIBUTION CHANNELS:

The distribution channel for the crave box will be on multiple levels. The customers could order
the product from anywhere in the city. We would like to provide the meal box to the customer
within 20-30 minutes from the time of the order. For this we would require strong supply chain to
be created for this purpose.

30
 The Process involved before the food preparation and the supply chain is explained below.

4.6 PERFORMANCE CHANNEL:

• Employee Performance:
The employee performance is always monitored and will take action plan according to the
productivity. There will be frequent motivation sessions whenever there is a low morale with the
employees. Feedback from the employees will be taken to ensure things go on a right direction.
The best performing employees will be rewarding with exciting monetary and non-monetary
benefits.

• Cost Effectiveness:
To ensure the cost effectiveness we will use various strategies in the business. They would
include First in First Out method in inventory to use the products within their self-life period. we
will use SAP software throughout various departments to maintain strict analytical and inventory
model. AI and ML will be used in near future to understand the customers taste preferences and
provide the menu.

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• Productivity & Quality Check:
There will be a direct partnership with the farmers who produce our priority product, such as
vegetables, rice varieties, pulses and dairy products. There will be strict quality check in regular
intervals. The productivity will be monitored by the supervisors and there will be frequent breaks
for the employees. The volume of orders will be monitored and raw materials are procured
according to the forecasted levels.

• Revenue & Working capital Projection:

The sales will be monitored in frequent intervals over period i.e., Day-to-day and also on
weekly basis. Weekly budgets are prepared to maintain the working capital requirement. The
business income will be floated again into company to maintain the sustainability of the business.
The reserves account will be maintained for any unforeseeable circumstances.

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 5. OPERATIONAL FEASIBILITY
5.1 BUSINESS MODEL:
The contemporary food industry is very competitive due to global involvement, emerging
entrepreneurship, independent designs and much more. Considering Crave Box we do not have a
lot of competitors with like minds. Since we deal a wide variety of customers from individuals to
corporates, we need to take care on the tailoring of our supplies to the customer needs. We cannot
restrict ourselves to a stereotypical product, so we offer a variety of cuisines and help them
customize their lunch and make them feel a homemade meal.
There are already a lot of options for the customers to order food online and offline, but what
lacks, is the customer’s ability to choose the dishes in the meal. We deal with individuals and
corporates so the product needs to be flexible for both entities. There is no major contribution for
front-end operations since the orders would highly be online. There are accessibilities via web,
app and walk-in. Now let us see the operating business model of the Crave Box.

• Independent cloud kitchen model:

Under this model we opt in for single brand, single kitchen and no storefront. This will be
called as the original cloud kitchen model as it will have our own food preparation and brand
uniqueness and suitable for scaling the start up from the scratch. We would have a kitchen space
of around 1200-1400 sq. ft. and would carry out the food preparation process in that space. Our
corporate office will be a separate space nearby to the kitchen.

33
• Establishing our Brand:
While we are opting to select the orders through online, we will have to establish our brand
presence in online. For that we will be having a separate company website and mobile applications
suitable for both IOS, Android to receive orders through online. We will establish the products or
the food menu which customers could customise and could place the orders once the payment is
made. Even walk in customers are allowed to have take-away orders.

• Order Processing:
Once the order is placed with our company the software that is been enabled will direct the
message to the manager who will receive the orders in the kitchen. The manager and his team will
direct the orders to the kitchen team and the packaging team to prepare the food. The subscribed
orders will be prepared by the primary chef and the single order will be processed by another chef.
• Delivery Process:
Once the food is packed the delivery team will engage in here to serve the customers for in
place delivery. Initially we will engage the third-party aggregators like Swiggy and Zomato to
have the delivery support. But once the company eventually grows will have internal delivery
partners who will help in the distribution of the meal box.

5.2 COMPETITOR ANALYSIS:

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 Competitor A Competitor B
FACTORS Crave Box The Bowl Company Behrouz Biryani

• Customised meal box • Meal served in bowl • Concentrates on

Strengths • Variety in cuisines • Different one product-Biryani
• Economical pricing combination of menu • Hygiene standards.
• Hygiene and food • Quick delivery
quality
• Own delivery system

• New to the market • Only available in • Only available in

Weakness • Brand image still not certain areas. certain areas.
familiar. • Highly premium • Highly premium
• Customer retention is a pricing pricing
question • Only rice varieties. • Only one product

• Low to medium • Price is not • Very Expensive

Price segment. affordable food production.
• Affordable to everyone • Medium to high • Premium segment
class of customer class of customers of people is
concentrated.

• Maintain high quality • Packaging quality is • Maintains high

Quality standards. not up to the mark Quality in food
preparation.

• High spending in • Low spending in • Moderate spending

Advertising Advertising and marketing while in marketing
& promotion to compared to
Promotion familiarise the brand. competitors.

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5.3 LOCATION AND FACILITIES:

The location that we have selected to operate our business is the prime location and the centre
of the city. The question why we have chosen this location is the feasibility to the cover the area
of almost 20 km radius. We could reach more customers in a quick span of time. The cost for the
kitchen set-up will be moderate since the area we occupy is lesser compared to the dine in
restaurants. We could reach the most familiar residential as well as commercial areas such as Anna
Nagar, T Nagar.
The other facilities include the procurement of raw material and the logistics will be as simple
as in the location we are situated. The main market for Vegetables, Poultry, Sea food and other
dairy, groceries is located within 7km from the kitchen which is much feasible. The Other facilities
such water, electricity, cooking gas could be easily availed in such location. The other benefits are
noted to be that of many famous hotspots for students as well the working community in that
location.

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5.4 LEGAL STRUCTURE:
As previously mentioned in the Legal factors of PESTLE analysis the company will always
follow the rules and regulation and other legal requirements to run the cloud kitchen. They include
Building permit, Fire safety permit, Police license, Health trade license, Business registration, ESI
registration & PF registration, FSSAI registration, GST registration. All the inventory will be
procured as per the legal requirements and would check the quality of the materials procured. i.e.,
Shelf life of the products.

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 6. FINANCIAL FEASIBILITY

6.1 BUDGETING & FORECASTING:

The budgeting includes capital budgeting and the source of funds and the forecasting part
includes the start-up expenses and sales and revenue.
• Capital Budgeting and Source of funds:
The break up for the capital induced by each of the investors will be as follows:
Mr. Abishek M. ₹ 850,000
Mr. Sharan Lakshman V. ₹ 700,000
Mr. Aswathaman ₹ 400,000
Mr. Aakash Kumar R.S. ₹ 400,000
Mr. Arvinth Kumar V. ₹ 500,000
Mr. Fredrick Joshua ₹ 550,000
Mr. Derrick Chris ₹ 500,000
Mr. Vaanmugilan S. ₹ 450,000
MR. Vignesh B.P. ₹ 650,000
Total ₹ 5,000,000

This is the sum of ₹50,00,000 which will be the initial capital introduced and the company will
require more fund when the business expands. The initial capital will be first utilised for the start-
up expenses and other legal expense to establish our business. Further for the working capital the
company would go for borrowed capital of ₹7,50,000 from bank.

Capital Expenses Forcasted

Lease for Kitchen ₹ 8,00,000

Kitchen set up ₹ 2,50,000
Equipments & Utensils ₹ 2,00,000
Marketing ₹ 3,50,000
R&D ₹ 1,00,000
Office space ₹ 1,50,000
Legal Expense ₹ 2,00,000
Stationary & Costume ₹ 75,000
Total ₹21,25,000

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 • Revenue forecasting:

SALES
PROJECTION

JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC TOTAL

NO. OF SINGLE
ORDER - KIDS 25 35 45 50 60 65 75 80 90 100 125 140
PRICE PER UNIT 100 100 100 100 100 100 100 100 100 100 100 100
TOTAL 2500 3500 4500 5000 6000 6500 7500 8000 9000 10000 12500 14000 89000

NO. OF SINGLE
ORDER -
ADULTS 100 125 175 250 320 400 450 500 550 600 750 850
PRICE PER UNIT 175 175 175 175 175 175 175 175 175 175 175 175
TOTAL 17500 21875 30625 43750 56000 70000 78750 87500 96250 105000 131250 148750 887250

NO. OF
SUBSCRIPTION
- KIDS 5 15 25 30 45 60 65 70 80 85 90 100
PRICE PER UNIT 500 500 500 500 500 500 500 500 500 500 500 500
TOTAL 2500 7500 12500 15000 22500 30000 32500 35000 40000 42500 45000 50000 335000

NO. OF
SUBSCRIPTION
- ADULTS 15 25 35 45 55 75 80 90 100 125 150 200
PRICE PER UNIT 800 800 800 800 800 800 800 800 800 800 800 800
TOTAL 12000 20000 28000 36000 44000 60000 64000 72000 80000 100000 120000 160000 796000

TOTAL 2107250

Sales Projection
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
2500 3500 4500 5000 6000 6500 7500 8000 9000 10000 12500 14000

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6.2 BREAK EVEN ANALYSIS:
A break-even analysis is a financial tool which helps a company to determine the stage at which
the company, or a new service or a product, will be profitable. In other words, it is a financial
calculation for determining the number of products or services a company should sell or provide
to cover its costs (particularly fixed costs). Break-even is a situation where an organisation is
neither making money nor losing money, but all the costs have been covered. Break-even analysis
is useful in studying the relation between the variable cost, fixed cost and revenue. Generally, a
company with low fixed costs will have a low break-even point of sale.
The components that are used for the calculation of break-even analysis are:
• Fixed Costs
• Variable costs
• Revenue

The break-even point is when the golden cross over created between the revenue and the costs
line. The diagram given below will clearly depicts the break-even analysis. With the help of this
study Crave box have done the Break-even analysis.

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• Crave Box’s Break-Even Analysis:

Break even
analysis

Fixed Costs:
Lease for Kitchen 8,00,000
Kitchen set up 2,50,000
Equipments &
Utensils 2,00,000
Marketing 3,50,000
R&D 1,00,000
Office space 1,50,000
Legal Expense 2,00,000
Stationary &
Costume 75,000
21,25,000
Variable
Costs:
Salaries 7,50,000
Rent 1,80,000
Wages 2,50,000
office expense 1,20,000
Raw materials 5,00,000
Packing costs 2,50,000
20,50,000

Revenue:
Sales 21,07,250
other income 5,00,000
26,07,250

While calculating our fixed and variable expenses we come to know that the anticipated profits
will be only recurring from the second year and we have to bear the losses on the initial year of
launching our business. But since we have kept our sales mark to bear low numbers, we have this
situation. When there is an exponential rise in our sales figures, we will reach the break even point
even before the second year.

The break-even point is only when the company exceeds the sales and revenue mark around
₹42,00,000/-. As per our analysis this would take around 30 months to reach the break even point.
From the month of 31 our start-up will be profitable.

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6.3 Projected Cash Flow:
The estimated or the projected cash flow for the company – Crave Box is listed as follows:

Projected Cash Flow

2022 2023 2024

Cash flow from operations:

Net earnings 2007250 4014500 6021750

Addition to cash:

Depreciation 25000 27500 30000

Decrease in account receivables 12500 22650 35250

Increase in account payables 10500 22500 36500

Increase in tax payables 5600 7560 8250

Subtractions from cash:

Increase in Inventory 12500 22500 30500

Net Cash from operations 2048350 4072210 6101250

The traditional way to analyse the cash flow is prepared for the Crave Box and the business
seems to be in good position. The business operates to have positive cash flow through out from
the establishment. The projection of net earnings gets doubled every year and the cash flows are
also remains increased twice every year.
The excessive earnings or the profits which we attain after the second year will be reutilised
for the business expansion and also a reasonable percentage of earnings to be kept in as reserves
and surplus for the contingent purpose.

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6.4 PROJECTED BALANCE SHEET:

The estimated or the projected Balance Sheet for the company – Crave Box is listed as follows:

Projected Balance Sheet

2022 2023 2024
ASSETS
Current Assets:
Cash & Bank 2850000 2605000 2545750
Inventory 525000 750000 525250
Trade Receivables 475000 460000 325000

Non-Current Assets:
Investment 0 0 425000
Intellectual Property Rights 1250000 1250000 1250000

Fixed Assets:
Equipment 250000 225000 202500
Furniture 325000 292500 263250
Computers 325000 292500 263250

Total Assets 6000000 5875000 5800000

LIABILITIES
Current Liabilities:
Trade Payables 250000 150000 100000

Non-Current Liabilities:
Loan Borrowings 750000 725000 700000

Capital 5000000 5000000 5000000

Total Liabilities 6000000 5875000 5800000

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