1.0 Executive Summary
The purpose of this business plan is a showcase the continued development of a catering business based in Albuquerque, New Mexico. MDLD Catering (“the Company”) was founded by Matthew Deutsch. The business will specialize in providing a wide range of premium, modern American fare for personal incorporate events generally located within 50 miles of the Company’s location. At this time, the Founder is seeking $100,000 in order to commence full scale operations.
Operations
The business will primarily generate its revenues from the ongoing sale of modern American cuisine that will be served on site. The Company will have the ability to provide food service at homes through its mobile food production truck and trailer. Concurrent to this, the Company can be retained to provide its food service at banquet halls when requested by a client.
The Company will produce substantial revenues from each engagement ranging from $3,000 to $15,000 depending on the menu selections and the number of people in attendance. The Company will operate on a year-round basis with expected revenue peaking during wedding season (May through October).
The third section of this document will further discuss the operations of the business.
The Financing
As noted above, Matthew Deutsch is currently seeking $100,000 of capital via a business loan in order to commence operations. The funds will be primarily used for the following:
• Catering vehicle acquisition
• Working capital
• General furniture, fixtures, and equipment
Mr. Deutsch will contribute $25,000 toward the venture. Moving forward, the business could obtained additional capital as necessary to expand operations. Given that the business will generate highly predictable streams of revenue that are booked months in advance, the Company could easily acquire a revolving credit facility to manage cash flow and its growth objectives. This document assumes that the Company will finance its growth with retained earnings.
The Future
Given the premium level of modern American fare that will be offered at catered events – the Company will be able to seamlessly scale its operations throughout the entirety of the Albuquerque area. Moving forward, the Company may establish operations in other area areas of New Mexico. There is also a possibility that the company may establish a formal restaurant, although this is not expected to occur until after the fifth year of operation.
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funds discussed in the executive summary will be used as follows:
2.2 Management and Investor Equity
Matthew Deutsch retains a 100% ownership interest in MDLD Catering.
2.3 Exit Strategies
Matthew Deutsch is seeking to have MDLD Catering operate as one of the preeminent catering services within the greater Albuquerque area. This will create a substantial amount of goodwill and value for the business in the event it is to be sold to a third-party. If it is financially prudent to do so, a business broker will be hired to manage the sale. This event is not expected to occur for a significant period of time.
3.0 Operations
Through a number of proprietary recipes developed by Matthew Deutsch, the business will be able to provide a wide range of classic American fare as well as fusion-based dishes at personal and corporate events throughout the Albuquerque area.
It should be noted that the business will have the ability to produce any type of cuisine specific for the desires of each client. The Company will work closely with its clients to create menus that will consist of appetizers, several main entrees, and desserts. All engagements will be done on a customized basis specific for the needs of each client.
In order to operate on a cost-effective basis, the business will rent space at a commissary kitchen in order to handle food preparation matters prior to each event. The produced food will then be brought to the event location via the Company’s mobile catering truck. This truck will have a full internal kitchen suite so that food can be prepared within the vehicle if needed. It is fully expected that events that are held at banquet halls will provide space available to complete food preparation.
The Company will operate in a year-round basis. Management will coordinate with numerous partners that will use a Company’s services on an outsourced basis.
4.0 Overview of the Organization
4.1 Registered Name
MDLD Catering LLC. The business is registered as a limited liability company in the State of New Mexico.
4.2 Commencement of Operations
Revenue generating operations will commence in the third quarter of this year.
4.3 Mission Statement
To operate as the pre-eminent catering service within the greater Albuquerque metropolitan area.
4.4 Vision Statement
To provide customers with exceptional cuisine at their events that they will remember for a lifetime.
4.5 Organizational Objectives
• Properly onboard staff that will provide catering alongside the Owner from the onset of operations.
• Established ongoing referral relationships with wedding and event planners throughout the greater Albuquerque area.
• Maintain strong relationships with corporate event planners so that the business can provide service at business functions.
• Implement proper food safety handling protocols that will ensure that risk related to serving prepared food or kept to a minimum.
• Engage in a wide-ranging marketing campaign that will inform the general public of Albuquerque of MDLD Catering’s operations.
• Continue to expand the types of cuisine that can be offered given the immensely diverse population of the Albuquerque area.
• Maintain an expansive of online present that includes social media.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the business plan will focus on the current economic climate, the catering industry, the competition at MDLD Catering will face, and the demographic profile.
As a result of continually changing trade policies, there has been a moderate degree of volatility introduced to the market. The Federal Reserve is taking appropriate measures in order to ensure at the United States continues to undergo a period of economic growth while keeping inflation in check.
MDLD Catering will be able to maintain its revenue, generating operations and profitability in all economic climates given the substantial size of the greater Albuquerque market. Foremost, the business will have highly controllable operating costs given that this business is operating on a per engagement basis. Inventory and related purchases are only acquired once the client has made their deposit. Furthermore, the Company is not bound by any specific location and catering engagements can be rendered as far away as 100 miles from its location.
5.2 Industry Analysis
Catering services in the United States generate $14.5 billion year of revenue. There are 13,000 companies that provide the service to the general public as well as for corporate events. The industry employees 150,000 people.
The growth outlook for this industry is positive. This is a mature industry and the ongoing growth of it is expected to be similar to that of the economy as a whole. People are spending substantially larger or greater amounts of money on weddings, personal events, and corporate events. MDLD Catering will be able to capitalize this in the coming years.
5.3 Customer Profile
The following demographic profile will be used during the course of marketing operations:
• Household income of $125,000+
• Will spend $3,000 to $15,000 per engagement.
• Lives within 50 miles of the MDLD Catering location (although 100 miles is the total target market radius).
5.4 Competitive Analysis
This catering business plan has been written specifically as a sample. If this business plan was done specifically for a client engagement, a full analysis of all catering businesses within the target market would have been completed. This will have included a discussion regarding the types of cuisine, serve by other catering businesses, their online reviews, and ways in which this business could differentiate itself within the market.
6.0 Key Strategic Issues
6.1 Sustainable Operations
MDLD Catering will have sustainable operations as a result of the following:
• Substantial demand for quality catering services within the greater Albuquerque market area.
• As the business operates on a per engagement basis, the operating risks of the business are substantially reduced.
• A highly talented chef, Matthew Deutsch, who will be able to effectively develop an outstanding brand name for MDLD Catering.
• The operations of this business are highly scalable and multiple catering engagements can be completed concurrently as the Company expands.
• The business will have extensive referral relationships in place in order to generate highly predictable forms of revenue.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the operational capabilities the business in order to service a greater number of catering engagements.
• Development of satellite locations within other markets of New Mexico.
• Foster ongoing relationships with event planners and corporate events specialists in order to receive ongoing referrals as well as operating and a contracted capacity.
7.0 Marketing Plan
7.1 Marketing Objectives
• Immediately conduct direct outreach with event planners within the greater Albuquerque market area.
• Maintain an expansive online presence that showcases the cuisine that could be offered at personal incorporate events.
• Leverage public relations campaigns that will have articles about MDLD Catering written and distributed in reasonable publications.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $393,000.
• Gross profits will reach $282,000.
Year 2
• Through greater marketing efforts, revenue will reach $428,000.
• Gross profits will reach $308,000.
• Total income will increase by 9%.
Years 3-5
• By the fifth year of operation, total revenue will reach $554,000.
• Gross profits will reach $399,000.
• At this time, the Company may expand into other markets in New Mexico.
7.4 Marketing Strategies
Foremost, the Company intends to establish ongoing relationships with corporate event specialists and personal event planners within the greater Albuquerque market area. To conduct this outreach, the Company intends to host gatherings where Matthew Deutsch will prepare a wide range of food so that these individuals can understand the quality of the cuisine that can be offered at their clients’ events. This will create a substantial amount of brand name awareness prior to the launch of operations and throughout the life of the Company. These types of engagements will continue on a yearly basis.
The Company will also maintain an expansive online presence that includes a proprietary website as well as use of social media. The Company’s website will showcase the types of cuisine that can be offered at a catering event, preliminary pricing information, contact information, as well as availability. This website will undergo search and optimization specific for the Albuquerque market.
The Company will also maintain pages among all social media pages. Among individuals that have recently conducted searches for caterers, the Company will showcase paid advertisements that will direct these viewers to the website. This type of marketing is extremely important as they will be able to effectively target individuals that are actively seeking premium caterers while also contributing to social signaling.
In order to position MDLD Catering as a community bonded business, the Company will provide free catering services for charities and civic organizations throughout Albuquerque. It will substantially boost the brand name awareness of the business in the coming years.
The Company will also use advertisements on wedding specific websites. Through these ads, the company will be listed as a service provider for catering within the Albuquerque market. This will further increased visibility among people are actively seeking catering services.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• MDLD Catering will have an annual growth rate of 9% per year.
• Matthew Deutsch will contribute $25,000 to the development of this catering business.
• A loan of $100,000 will be secured in order to acquire the vehicle as well as furniture, fixtures, and equipment.
9.2 Financial Highlights
• Limited operating risks as in inventory is only purchased once a catering engagement is secured.
• The Company can easily scale throughout multiple markets in New Mexico.
• The business will operate on a year-round basis.
9.3 Sensitivity Analysis
The business is revenues may be impacted by a very severe economic recession. During these times, the demand for premium catering services may decline as families and corporations seek lower cost alternatives for catering. However, these risks are reduced by the fact that the Albuquerque area is substantially population dense. There are a number of people that operate in a professional capacity, and they will always be able to afford the Company’s catering services.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• Highly predictable streams of revenue from the ongoing engagements discussed this document.
• Matthew Deutsch will be able to leverage his notoriety as a modern American chef when marketing the Company’s services.
• The Company will be able to render services for both personal events in corporate events.
• The business has developed a highly focused marketing plan that will create a significant amount referral from event planners in the Albuquerque area.
Weaknesses
• Operational complexities as this is a food service business that deals with substantial volumes of cuisine being produced in a short period of time.
• Moderately high cost related to payroll during catering events.
Opportunities
• Continued to expansion of the number of relationships that the Company maintains with event planners.
• Enter new markets within New Mexico.
• Expansion of the types of cuisine that can be offered at catering events.
Threats
• A severe economic recession could impact revenues.
• Ongoing issues within inflation can cause the operating costs and inventory costs of the business to increase.
Appendix B – Risk Analysis
Development Risk – Low
The business protocols and types of cuisine that will be offered through this catering enterprise has already been developed. At this time, Matthew Deutsch is seeking $100,000 a capital in order to establish operations in Albuquerque.
Financing Risk – Low/Moderate
As shown earlier in this document, a vast majority of the funding, so it will be specifically used for the acquisition of a vehicle as well as furniture, fixtures, and equipment. The risks related as financing or offset by the low operating cost of the business and its ability to only acquire inventory once catering orders are place.
Marketing Risk – Low
Matthew Deutsch will leverage his existing notoriety when establishing ongoing relationships with event planners throughout Albuquerque. This will be complimented by the use of online marketing strategies as well as print advertisements in regional publications.
Management Risk – Low
Matthew Deutsch to a highly experienced chef that has over ten years of professional experience. He is well noted for the exceptional quality of his modern American cuisine. He will be able to quickly bring the operations of MDLD Catering to profitability.
Valuation Risk – Low
The valuation risk is offset by:
• The business can control its inventory acquisitions which reduces risk.
• The Company can expand its operations throughout multiple markets in New Mexico.
• Considerable demand within the Company’s target market for premium catering services.
Exit Risk – Low
As discussed in the second section of the business plan, there are no long ranging plans to sell this business for any third-party especially as a significant part of this business revolves around Matthew Deutsch’s abilities as a chef. In the event that the business is to be sold, the Company will retain a new executive chef that will transition the operation to their ownership. Again, this event is not expected to occur for a significant amount of time.
The Catering Service Business Planning Process
For any major event, there is a significant demand among both event hosts as well as event planners for high-quality caterers. One of the best things about these businesses is that they are able to tightly control their operating costs. Catering engagements are paid for upfront, so these businesses can have strict controls over their inventory acquisition operations. Additionally, these businesses typically have low operating costs of a function of revenue that allow them to thrive, even during a challenging economic climate. Even during an economic recession, people will continue to hold large-scale events from time to time. These businesses also typically do not need to maintain a large-scale facility as they can use a commissary kitchen when they receive a catering at engagement.
The approach we take when developing a catering business plan first starts with conducting the market research. This is done across a number of prongs. First, we examine the market as it relates to population size, population density, as well as median household income. We also take a look at the number of event venues within the target market as well as other companies that operate in a catering capacity. This analysis allows us to form the total addressable market. Most importantly, we examine the service obtainable market in order to understand what type of market share that a catering business can achieve over a five-year period.
The scope of analysis and further extends into the market research in regards the economic sensitivity of the target market area. Through numerous models that we have developed on a proprietary basis, we take a look at how the local market responds to certain changes in the economy as it relates to the prime interest rate, unemployment, GDP, consumer spending, as well as other economic metrics. This is important as it provides the reader with the understanding of how this business will be able to respond in the event of an economic recession or a challenging economic climate. Typically, inflation has a more limited effect on a catering services operation as these businesses are able to increase their fees in lockstep with the prevailing rate of inflation. The primary issue that is faced by catering businesses, from an economic standpoint, are decreases in gross domestic product.
Now that we have this information in hand, we can effectively create a revenue profile for the catering business. This examination takes a look at the average number of guests per event, as well as a number of events that will be catered per year. Using this information, we then develop the catering financial plan, which spans a profit and loss statement, cash flow analysis, breakeven analysis, balance sheet, as well as applicable business ratios for this industry. We take a major focus on examining the amount of capital that needs to be spent on marketing in order to drive catering engagements.
Once this is completed, we focus on developing the catering marketing plan. Most importantly, creating a high visibility profile among event venues as well as event planners is of the utmost importance when establishing this type of business. The referrals that can be obtained by working with these types of entities are an invaluable source of revenue for any catering service. Beyond this business-to-business approach, we also discuss strategies that will significant awareness among the general public. This is primarily accomplished through numerous online strategies including registering the catering business among service directories, engaging in search engine optimization, maintaining a presence on social media, using search engine advertising, as well as using targeted ads among all social media platforms. We focus very heavily on using popular platforms such as Facebook and Instagram to showcase images of prepared foods from prior engagements.
We then move into the creation of the catering operations plan. In this section, we document the type of cuisine that is typically prepared for each type of event, the number of caterers that need to be hired to assist with services rendered, seasonality related issues, capacity matters, as well as addressing certain aspects of human resources. We also discuss the use of a commissary kitchen in order to engage in preparation of certain items before going to the event location.
Now that the analytical sections of the business plan are completed, we move into the development of the catering executive summary. Here, we provide a full overview of every aspect of the business within a condensed three-page summary. A snapshot of the anticipated financial results of the business is included in this part of the analysis. We also discuss plans for expansion including an increased target market radius, as well as developing satellite locations to other geographic areas.