The purpose of this business plan is to secure a $50,000 three-year Bank of America loan to fund the purchase and marketing of a food truck restaurant (Holey Moley LLP) in downtown Washington, D.C. Holey Moley was founded by Pat Jabroni and Mickey Jordan, Mexican food chefs and connoisseurs, in 2014. The investment will help the company begin and continue operations until the company becomes self-sustaining.
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Mickey Jordan, Partner
Mickey Jordan has more than ten years in the food and restaurant industry and serves as the head chef of a five-star restaurant. Mickey will bring his food preparation expertise to the enterprise to ensure high quality products and efficient cooking standards.
Mickey holds a Master’s in Culinary Arts from Boston University.
Pat Jabroni, Partner
Pat Jabroni has served as a manager of the award-winning restaurant, Juanita’s Bar and Grill in D.C. Mr. Jabroni’s plethora of contacts in the food industry make him an essential partner in this enterprise.
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He holds a B.A. in Business Management from Virginia Polytechnic Institute.
Products and Services
Holey Moley will sell freshly made burritos, tacos, chips and guacamole. The products will be made with locally sourced ingredients and will be promoted as having large portion sizes, a cheap price, and a delicious taste.
Customers will include the community of shoppers and professionals in the 5 block radius around K-Street, where our food truck will be located. We estimate 22 to 40 year-olds will make up 75% of our revenue. We anticipate the completion of a new Chevy Chase business plaza near K-Street to significantly increase our revenue at the end of year two.
Marketing and Sales
Holey Moley will utilize internet marketing, mailbox flyers, professional sign throwing, and word of mouth to spread the word about our high value food products. We will also begin with a 10% coupon exchange with our food truck partner Jammin Juices. For each Jammin Juices drink purchased, customers will receive a 10% discount on any item from Holey Moley, which will vastly increase our initial customer base and create a buzz.
The pricing of our products will be lower than our competitors, while providing higher portions in order to create a high value product that will attract more customers.
Holey Moley estimates to reach over $120,000 in annual sales by the end of the first year. By the end of the third year of business we calculate to hit over $200,000 in annual sales.
Holey Moley requires a loan of $50,000 to cover startup costs. The loan will be used to purchase a fully-equipped mobile food preparation vehicle (MFPV) food truck. The business plan assumes that the loan will be paid back within three years and with an interest rate of 6%. Founders, Mickey Jordan and Pat Jabroni, will also invest $25,000 combined to help cover working capital.
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Holey Moley is a food truck serving burritos, tacos, and guacamole, operating in Washington D.C. We use organic and high-quality ingredients to provide our customers with the best tasting burritos and tacos. Holey Moley is a general partnership owned and operated by Pat Jabroni and Mickey Jordan.
Mickey Jordan , Co-founder
Mickey Jordan is not only the co-founder of Holey Moley, but is also the head chef. Mickey received a Master’s in Culinary Arts from Boston University in 2000. He is currently the head chef at a five-star restaurant in Washington D.C. However, he feels that his position does not provide him with opportunity to connect with his customers. As head chef of Holey Moley, he will be able to foster friendly relationships with his customers.
The Washington Post has referred to Mickey as “a revolutionary mastermind.”
Pat Jabroni, Co-founder
Pat Jabroni is a Washington D.C. native. He has spent the last three years managing Juanita’s bar and grill. Pat oversees a staff of 25 and is responsible for maintaining the restaurant’s inventory. Since the beginning of Pat’s tenure as restaurant manager, Juanita’s has received the Washington D.C.’s “Fine Dining” Award and an A+ for meeting food safety and compliance regulations.
He received a B.A. in business management from Virginia Polytechnic Institute in 2003.
Holey Moley will require $75,000 in starting capital. Together Mr. Jordan and Mr. Jabroni are investing $25,000 in personal funds. In addition, they are seeking to obtain a $50,000 Bank of America loan. The loan is required to purchase the Holey Moley food truck and cover initial startup expenses. The loan will be structured as a long term 36-month loan and will be repaid at 6% interest.
To provide Washington D.C. residents with a tantalizing food truck experience. Holey Moley’s delicious and healthy guacamole will become an addiction for any who taste it.
Holey Moley will sell three products, burritos, tacos, and chips and guacamole. All products will be hand-made on site and at the time of purchase. Holey Moley will only use the highest quality ingredients, including USDA grade A beef and fresh avocados. By keeping our menu simple, Holey Moley is able to reduce costs and streamline the cooking process. Our easy menu allows us to serve our food quickly to customers at a price that won’t hurt their wallets.
There are numerous food truck vendors in Washington D.C. Currently there are seven food trucks operating near Holey Moley’s planned location. While these trucks sell very unique products, none of our competitors sell Mexican food, so Holey Moleys will be able to fill that niche.
In a five block radius of our location there are over 10 Mexican restaurants providing similar products. However, when it comes to guacamole, their quality comes no where near that of our award winning guac. Each of these restaurants offer their products at a higher price than ours and at a serving time that is also much slower.
Sourcing and Fulfillment
Holey Moley will source it’s ingredients from the various farmer’s markets in and around D.C. Mr. Jabroni already has an established working relationship with most farmer’s markets from his time managing Juanitas Bar and Grill. Holey Moley will be able to leverage these relationships to ensure that it’s supplies meet demand at a cost-effective price-point. Using forecast data, we will be able to accurately project the amount of ingredients needed every week.
Since the 1960s, the food truck industry has become a staple of the American food scene. Currently there are about 50,000 million food trucks operating throughout the United States. The food truck sector is one of the best performing sectors of the food-service industry. The food truck sector is expected to rise by 15% by 2016. By 2017 the food truck industry is expected to net $2.7 billion in revenue. This is a huge step up from 2012 when food trucks reached an income of $650 million.
In four years the food truck industry has increased by 125% in Washington D.C.We have estimated that the total market in Washington D.C. to be $2,500,000. After polling D.C. residents in a five block radius of our planned location, we found that 80% of respondents rated themselves highly likely to consume food truck cuisine at least once a week. From these results we estimate the total addressable market to be over $500,000.
Through our in-depth market research done through polling, we have discovered that one of D.C. consumers’ greatest frustrations is the price of a meal and the corresponding portion size. With regards to portion size, people are looking for a high-protein and reasonably priced meal. However, with the struggling economy, restaurants are cutting portion sizes and increasing prices much to consumer dismay. Holey Moley intends to fill this market need by increasing our portion sizes and keeping prices low. We will maintain a high profit margin through favorable relationships with local farmers and butchers, keeping our sourcing prices low.
Holey Moley also has the good fortune of being founded on the cusp of another market trend towards consuming gourmet guacamole. Based on a recent article in the Washington Post, guacamole has become one of the most sought after snacks in D.C. Currently there are no food trucks selling guacamole. Even if there is additional competition, Mickey Jordan’s original guacamole recipe won first prize at the annual Boston Guac Fest Competition giving Holey Moley an edge over the competition.
Currently, there are 125 food trucks in D.C. Although this represents a 125% increase in food trucks over the past five years, there is nonetheless significant room for growth. By the end of year two in our business plan, we anticipate the completion of the new Chevy Chase business plaza near our planned location on K street. As a result, we expect profits to rise significantly in the third year due to the increase traffic near our location. Washington D.C. is also a rapidly expanding city and its population is becoming increasingly wealthier.
It is estimated that the food truck industry will be worth 2.7 billion with the next five years.
NAICS Classification 722330: Mobile Food Services
Threat of new entrants:
The threat of new entrants within the food truck industry is extremely high given its popularity and ease of entry. We estimate an average of 10 new food trucks enter the D.C. market annually. Even now, locations have become a matter of dispute amongst food truck owners, as premium real estate is becoming sparser and more competitive annually. However, Holey Moley has secured a prime location on K Street under favorable terms for a 5 year lease in which the rent will remain constant.
Bargaining power of suppliers:
In all, there are 10 farmer’s markets around the D.C. area, giving Holey Moley ample opportunity to negotiate favorable prices for our raw materials. In addition, Pat Jabroni’s existing relationship with Dan Mahan’s Local Butchery has given Holey Moley the ability to cost-effectively sell larger portions of meat for a cheaper price.
Bargaining power of buyers:
Although there are a variety of food trucks in our location, none offer products similar to Holey Moley. The growing trend towards gourmet guacamole allows Holey Moley to maintain a higher price point. Since Holey Moley offers larger portions that our competitors we do not expect to encounter any pressure to reduce prices.
Availability of substitutes
Currently, there are no other food trucks selling guacamole. However, there are three other food trucks selling Mexican food:
- Habanero Juan’s, which specializes in spicy hard tacos.
- Mexico Mejor, which specializes in burritos and salsa
- Loco Moco, which specializes in quesadillas
Mexico Mejor is our only direct competitor in that we both sell burritos. However, their burritos are significantly smaller and less delicious. In addition, the inclusion of guacamole on our menu gives us a competitive edge. We hope that this unique selling proposition will be a strong enough incentive for us to retain customer loyalty.
We expect that the success of Holey Moley will encourage others to mimic our business model. Certainly, we believe that our competitors will quickly adopt guacamole into their own menus. However, as Mickey Jordan’s guacamole is a literal award winner, we feel that Holey Moley will nonetheless retain D.C.’s increasingly sophisticated and palate sensitive customers. Again, Holey Moley will win on portion sizes and taste.
The key customer base for Holey Moley is young professionals working in D.C. between the ages of 22-43. In a survey done of local businesses in the planned area of our operation, we found that those who eat out spend over $100 a week. Of that $100, respondents reported spending $30 on food truck cuisine. In addition, out of that $100, $20 was spent on Mexican food.
We estimate that 22-43 year olds will generate 75% of our overall revenue.
Holey Moley LLP will market its line of low-priced, high volume burritos, tacos, and guacamole through social media, word of mouth marketing, and mailbox flyers. Our prices will be lower compared to nearby competitors, and provide larger portions, while maintaining profitability. We are able to undercut our competitors on both fronts due to highly favorable truck space leasing, the plethora of farmer’s markets in the area keeping vegetable prices low, and Pat Jabroni’s excellent relationship with Dan Mahan, the local butcher.
Holey Moley will offer a differentiated product offering, promoting itself as the first and only Mexican food truck to offer gourmet guacamole. In addition, our high-protein, low priced burritos and tacos will be the best value Mexican food truck items on the market, which we expect will become a hot topic amongst our target market of hungry 22-43 year-old professionals.
Mickey Jordan’s award winning guacamole, and the high quality ingredients we will use in our burritos and tacos, will satisfy the increasingly growing and increasingly sophisticated “foodie” population segment looking for big, delicious meal.
Holey Moley has determined that its target consumer is fairly price sensitive, and therefore looking for a cheaper, higher volume meal. Therefore, the company’s pricing strategy is to offer a nearly premium product at a value price point.
Compared to competitors in D.C., our price per burrito/taco/chips and guac will be cheaper. On average, our prices will be 7% lower than our competitors’. We will nonetheless retain a high profit margin due to our prime location, low rent, and excellent supplier relationships.
There will be two pricing variations:
- Retail: Full, retail price of products
- Discounted: Customers who have been referred to Holey Moley’s from Jammin Juice will receive a 10% discount on their food items.
Holey Moley has established a working partnership with another food truck, Jammin Juice. Jammin juice approached Holey Moley with an offer to establish a mutual discount promotion. For every smoothie a customer buys at Jammin Juice, they get 10% off a Holey Moley burrito. In addition, for every taco purchased at Holey Moley, customers receive a 10% discount on a smoothie at Jammin Juice. We estimate that this partnership will help drive sales by 5%.
In addition, we have a relationship with Dan Mahan’s local butchery, which allows us to purchase burrito/taco meats at favorable prices.
In the first month of operation, Holey Moley will get the word out through mailbox flyers. We will also hire two college students to hand out flyers at strategically placed locations throughout Washington D.C.
Mickey Jordan’s 17-year old cousin has also volunteered to theatrically throw a sign around on a highly trafficked street near our location for the first week of our opening.
Marketing through social media will be critical to the success of Holey Moley. We will use the traditional social media channels such as Facebook, Twitter, Pinterest, and Instagram. We will offer a $1.50 discount on our famous guacamole if they like our social media pages and check in with the review “Eating Holey Moley’s World Famous Guacamole!”
Holey Moley’s only distribution point is our food truck located on 17th and K Street. In the future, we have plans to sell our award-winning guacamole through our suppliers and farmers markets in D.C. If demand begins to outpace supply, Mickey and Pat will consider opening an additional food truck. Regardless, Holey Moley intends to maintain strict control over distribution to ensure quality.
- Month 1-3: Establish partnership, secure business loan, begin social media campaign, acquire food truck, and open business.
- Year 2: Reach $15,000 in monthly sales
- Year 3: Pay off the business loan completely
Strengths: Our products are simple, yet highly desired by foodies in Washington D.C. We also offer larger portion sizes than our competitors at a lower price point. Lastly, at Holey Moley’s we offer an award-winning, nationally acclaimed guacamole.
Weaknesses: D.C. winter months are extremely cold, which discourages foot traffic. All food trucks in the D.C. area suffer from the heavy decline in sales from October to March. However, Holey Moley’s location allows for easy access from parked cars, meaning that customers are out in the cold for a shorter period of time. Holey Moley’s will also invest in space heaters to keep waiting customers warm. We feel that if the customer experience is comfortable during these months, we may negate the decline in traffic to a reasonable extent.
Opportunities: Holey Moley’s has the opportunity to seize two target markets.
1. Hungry professionals looking for a high protein, high value meal.
2. “Foodies” looking to find the best tasting Mexican food — especially guacamole, which is currently in the middle of a craze.
We have positioned ourselves perfectly to take advantage of these two market segments. Because our competitors struggle to retain a decent profit margin, it is difficult for them to provide the high-quality, low cost food items Holey Moley will be able to offer.
Threats: The food truck business has steadily grown over the past five years. New food trucks enter the market every year and further increase competition. As Holey Moley becomes successful, prospective food truck owners may begin to copy our business model.
Sales Forecast Table
|Double Taco Supreme||8,766||11,297||14,165|
|Chips and Guac||7,401||9,946||11,545|
|Price Per Unit|
|Double Taco Supreme||$4||$4||$4|
|Chips and Guac||$5||$5||$5|
|Double Taco Supreme||$43,391||$55,920||$70,116|
|Chips and Guac||$40,705||$54,703||$63,497|
|Direct Cost Per Unit|
|Double Taco Supreme||$2||$2||$2|
|Chips and Guac||$2||$2||$2|
|Double Taco Supreme||$19,285||$24,853||$31,163|
|Chips and Guac||$20,352||$27,351||$31,748|
|Total Direct Cost||$59,487||$77,444||$91,984|
|Gross Profit %||57%||57%||57%|
Sales by Month
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|Employee Related Expenses||$0||$0||$0|
|Vending Licenses and Permits||$500||$500||$500|
|Cash Register/POS Software||$1,000||$0||$0|
|Total Long-term Assets||$71,000||$0||$0|
|Other Current Assets|
|Total Other Current Assets||$0||$0||$0|
|Dividends and Distributions|
|Total Dividends and Distributions||$20,000||$48,000||$60,000|
Expenses by Month
Cash Flow Assumptions
Cash Flow Assumptions Table
|% of Sales on Credit||50%|
|% of Purchases on Credit||50 %|
|Avg Payment Period (Days)||30 days|
|Months to Keep on Hand|
|Minimum Inventory Purchase|
Loans and Investments
Loans and Investments Table
|Bank of America Loan||$50,000||$0||$0|
|Total Amount Received||$75,000||$0||$0|
Profit and Loss Statement Table
|Gross Profit %||57%||57%||57%|
|Employee Related Expenses||$0||$0||$0|
|Business Licenses and Permits||$500||$500||$500|
|Repairs and Maintenance||$600||$600||$600|
|Advertising and Promotion||$6,922||$8,986||$10,660|
|Expensed Portion of Other Current Assets||$0||$0||$0|
|Depreciation and Amortization||$14,200||$14,200||$14,200|
|Total Operating Expenses||$43,018||$44,482||$46,156|
|Other Expenses (& Other Income)|
|Loss (or Gain) on Sale of Asset||$0||$0||$0|
|Total Other Expenses (& Other Income)||$2,395||$1,689||$667|
|Income Before Income Tax||$33,545||$56,115||$74,408|
|Net Income / Sales||22%||28%||32%|
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Balance Sheet Table
|As of Period’s End||Starting Balances||2014||2015||2016|
|Other Current Assets||$0||$0||$0||$0|
|Total Current Assets||$0||$17,595||$18,379||$22,955|
|Total Long Term Assets||$0||$56,800||$42,600||$28,400|
|Sales Taxes Payable||$0||$0||$0||$0|
|Total Current Liabilities||$0||$3,306||$3,557||$4,030|
|Profit and Loss – Current Period||$0||$30,425||$50,897||$67,488|
|TOTAL OWNER’S EQUITY||$0||$35,425||$38,322||$45,811|
|TOTAL LIABILITIES & EQUITY||$0||$74,395||$60,979||$51,355|
Cash Flow Statement Table
|Depreciation and Amortization||$14,200||$14,200||$14,200|
|Gain or Loss on Disposal of Asset||$0||$0||$0|
|Change in Accounts Receivable||$(7,656)||$(569)||$(1,095)|
|Change in Inventory||$0||$0||$0|
|Change in Accounts Payable||$3,306||$251||$472|
|Change in Sales Taxes Payable||$0||$0||$0|
|Change in Other Current Assets||$0||$0||$0|
|Net Cash from Operating Activities||$40,275||$64,778||$81,065|
|INVESTING & FINANCING ACTIVITIES|
|Long-Term Assets Purchased or Sold||$(71,000)||$0||$0|
|Investments and Contributions Received||$25,000||$0||$0|
|Change in Short-Term Debt||$0||$0||$0|
|Change in Long-Term Debt||$35,663||$(16,563)||$(17,585)|
|Dividends and Distributions||$(20,000)||$(48,000)||$(60,000)|
|Net Cash from Investing & Financing||$(30,336)||$(64,563)||$(77,585)|
|Cash at Beginning of Period||$0||$9,938||$10,152|
|Net Change in Cash||$9,938||$214||$3,480|
|Cash at End of Period||$9,938||$10,152||$13,633|
Financial Ratio Table
|As of Period’s End||2014||2015||2016|
|Net working capital||$14,289||$14,822||$18,925|
|Gross profit margin||57%||57%||57%|
|Operating profit margin||26%||32%||35%|
|Net profit margin||22%||28%||32%|
|Debt to assets||52%||37%||11%|
|Debt to equity||110%||59%||12%|
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