Derrick’s Soul Food & BBQ Food Services & Catering

April 1

2009This business plan outlines a new food service to the Twin Cities metro area, featuring Southern-Style BBQ and Soul Food dining and catering.

Down Home with a Twist of Soul!

Derrick’sBusiness Plan: April 2009

Executive SummaryThe CompanyDerrick’s is a food service featuring Southern style barbecue and soul food offerings, with a variety of food and service options to meet customer demands. Derrick’s is based in Plymouth, MN and serves the Twin Cities metropolitan area, filling a dining niche in this market. Derrick’s is owned and operated by Derrick L. Williams, a chef with professional training and experience, including five years with the Minnesota Vikings.

Target MarketDerrick’s aims to serve a variety of clientele, large and small. Former clients include corporations, such as Wealth Enhancement Group and the Minnesota Vikings; charitable organizations, such as The Sharper Kids Foundation and The EJ Henderson Youth Foundation; events, such as The Taste of Minnesota; and family or personal events and gatherings, such as weddings and holidays. The Southern-style barbecue and soul food genre fills an untapped niche in the Twin Cities dining market.

Products and Services Derrick’s maintains a goal to deliver excellent customer service along with great cuisine. The menu offers delicious, wholesome food as base products, with customizable options per customer demand. The food ranges from barbecued meats, plentiful soul food side dishes, homemade desserts, to nutritious options for the health-conscious customer. Services range from food delivery to plating, serving, table or supply rental, as well as cookbooks and pre-packaged meats.

The CompetitionNo Twin Cities market leaders have emerged in this specific dining niche, offering the same combination of products and services that Derrick’s provides: Southern-style barbecue and soul food created by a true Southern-raised and trained chef, combined with a thorough service ethic based on southern hospitality and values. According to the most recent data, the Twin Cities dining market has over 160 uniquely-named and established restaurants, many of which offer catering or outreach services (according to registration with Minneapolis Regional Chamber of Commerce and Saint Paul Official Convention and Visitor Authority); over 200 grocery stores or other retail outlets, some of which offer food services (in Minneapolis and Saint Paul alone); and 33 licensed caterers with the State (with hundreds of established but unlicensed catering-only businesses).

Marketing and Sales StrategyCommunicating a message that the company’s top priority is the customer, the sales strategy will be to convert first-time patrons into long-term, repeat customers. Derrick’s will implement a satisfaction guarantee as a way to reassure customers that their experience is given the highest priority. The company will employ proven marketing strategies, such as well-placed advertising, an informative and attractive web presence, and sales incentives such as punch cards or special bulk pricing. Derrick’s will ensure customer communication and planning by insisting on personal attention to orders and events.

OperationsWhile the company already has the advantage of owning reliable transportation and common food service supplies, such as tables and dining supplies, to ensure thorough service, a rental agreement with an industrial kitchen will ensure professional preparation and delivery. In addition, through this investment, a specially-equipped catering vehicle will be leased if needed for special events.

ManagementDerrick L. Williams has spent the past ten years in the fine cuisine industry, including five years as a chef with the Minnesota Vikings. Derrick has catered prevalent concerts and events, and served as personal chef for many prestigious clients in the Twin Cities metro area. In addition, Derrick has professional culinary education experience and training.

DevelopmentIn the future, the company may become a solo commercial dining establishment, in a restaurant-style setting, or expand its products to be sold in grocery or other retail outlets. In addition, the company seeks to support and partner with local charitable organizations through financing and educating of at-risk youth interested in learning the food service trade. This goal may also contribute to the establishment of a charitable arm of the company as well.

FinancialsThe financial strategy of Derrick’s emphasizes reinvestment of income for growth during the first year of operation. It is anticipated that profitability will be reached early in the second year. Annual revenue projection for the first year is approximately $150,000; with 100% increase in the second year. Strict financial control, combined with fiscal efficiencies and cost-saving measures, will be utilized to the fullest extent possible to ensure compliance with these financial strategies.

Funds Sought and UsesThe company is currently seeking $150,000 in investment financing, although with the appropriate collaborative venture, less funding may be needed. These funds will be used for start up and expansion costs, including marketing activities (advertising, website, publications), insurance, hiring new staff, and supplies. In addition to working toward a return on the investment, the company has the goal to support local charitable organizations through financing and educating of at-risk youth interested in learning the food service trade.

Plan DetailsCompany DescriptionCompany Name and Location: Derrick’s; based out of Plymouth, MN.

Ownership and Legal Status: Derrick L. Williams is the owner and operator. Either a corporation or partnership is being sought to create liability protection.

Services: Besides a diverse menu of delicious food, services range from food delivery to plating, serving, table or supply rental, as well as cookbooks and pre-packaged meats. Menu options are entirely flexible and committed to customer design and planning. Options include type of event or meal (breakfast, appetizer-only, sit-down formal, benefit or wedding, etc); health-conscious meals (low-fat, vegetarian, etc.); or type of service (delivery or set-up only; plating and serving included, etc).

Funding to Date and Funds Sought: All funding has been negotiated with the customer, based on food and supply costs. To cover the long-term goal of an established business, this plan seeks to gain one-time set-up costs such as licensure, purchase of kitchen supplies, purchase or lease of delivery vehicle, and advertising establishment. Recurring costs include kitchen rental or lease, on-going advertising, maintenance of delivery vehicle, replacement supplies, and on-going food costs.

Target Market DescriptionTarget Market Location: Derrick’s aims to become an established presence in the greater Twin Cities metropolitan region, focusing special attention to the Minneapolis downtown area.

Market Size and Trends: A large portion of the market targeted by Derrick’s are minority-owned corporations in the Twin Cities area. In 2002, this market constituted approximately almost 5,000 businesses in Minneapolis.

Derrick’s aims to cater to a culturally-diverse customer base, while recognizing the appeal of soul food and Southern style to certain clientele, and targeting those customers first. Since this is currently an unfilled niche within the Twin Cities dining culture, it is difficult to estimate whether Derrick’s would fit the marketing trends affecting other catering or dining establishments at this time.

Competitive AnalysisTypes of Competition and Edge:Derrick’s faces competition from a variety of competitors:

Fast food restaurants Catering companies related to established restaurants Independent catering companies Established dining establishments Sandwich shops, cafes, and corporate dining options Grocery markets: delis, bakeries, and catering options

As previously noted, the soul food and Southern style barbecue specialties of Derrick’s fill an untapped niche in this area. This quality, combined with the outstanding service ethic and quality assurance, represent the competitive edge of Derrick’s.

Barriers to Entry and Future Competition: Foreseeable barriers are the high costs of starting a unique business of this type, while committing to keeping prices low for the customer to reach the most members of the community. Food costs, fuel prices, real estate and vehicle leases, and on-going advertising are all areas where barriers may remain after start up. It is anticipated that other soul food catering or restaurants may be started after Derrick’s starts to fill a niche for culturally dynamic dining. We aim to set the standard high for such establishments.

Marketing Message To keep costs low, the initial marketing strategy will be to take advantage of free or low-cost advertising, utilizing free print or web placement and personal testimony. As sales increase, more complex and diverse marketing media will be explored. These media include:

Placement of Derrick’s information and menus in major publications, Development of television and web-based advertisements, Creation of a recognizable logo or brand, Entry of Derrick’s products or cooking demonstrations in professional trade shows and contests, Invitations to professional critics to review Derrick’s products, Interviews and profiles in local media, Cooking demonstrations and educational events in local schools or community organizations, Presentations to social networking groups, Placement of advertising in creative community places of high traffic (such as the airports, public

transportation, in library kiosks, or at sporting events), Interactive web presence, featuring products, ordering, reservations, and social networking.

The message, however, will remain the same throughout: Derrick’s provides a unique dining experience, unforgettable and professional service, and remains committed to the community by focusing on passing on the knowledge of its experts to youth. Specific advertising costs are addressed below in “Financials.”

Operations PlanKey Elements of Operations, Advantages and Challenges: To keep costs to a minimum while developing a client base, Derrick’s will operate out of rented restaurant kitchens, as well as personal and church kitchens. As sales increase, lease of a professional kitchen will allow for greater ease and efficiency of food preparation. Similarly, in the development phase, personal vehicles and rented equipment will be used. As the business grows, delivery vehicles will be either purchased or leased and professional equipment will be purchased. Cost projections for independent implementation of this plan are addressed below in “Financials.”

Management and Staffing TeamManagement Members: Management would be added at the discretion of Derrick L. Williams, owner.

Future Management and Staffing Needs: In addition to owner and operator Derrick L. Williams, future staffing needs anticipated include: delivery driver, kitchen assistant, business consultant, or personal assistant. Costs of retaining this staffing model are addressed below in “Financials.”

FinancialsThe figures below represent an independent business venture. If an investment or operational partner is identified, these figures will need adjustment. All costs are based on current market pricing.

Income Statement: Because Derrick’s is a true starter business, all current expenses have been personally invested by the owner, with any profits put back into the management of the business. As a result, all finances represented here are indicative of start-up and projected maintenance costs.

Income Statement—Three Year Projection: The first year revenue projection is approximately $150,000. This comes from a market that is ready to try a new product that Derrick’s will provide to the Twin Cities metro area, and specifically, the downtown Minneapolis locations. The second year anticipates a 100% increase in revenue as added products and services are introduced. These products include bottled sauce, packaged meat, cakes and pies, as well as personal chef services. The third year predicts a nationwide roll-out of products and services, concentrating on special events such as sporting events, expositions, concerts, and professional trade shows.

Use of Funds: The following is a list of anticipated costs to be addressed in this independent business plan, based on current market prices. It is not an exhaustive list since unexpected costs may arrive. All costs are estimates and approximate. The estimated costs of start-up for the first year, including full staffing and fringe, is approximately $150,000.

Human Capital (staffing): [All assume full-time employment unless noted] Management/Chef: $25,000-$30,000 annual salary Part-Time Miscellaneous Staff (4): $10.00 hourly pay Fringe: 15% = Approx. additional $4500 annually

Supplies: Uniforms and Clothing: $1,500 Food Prep Equipment: $3,000 Cookware and Bakeware: $6,000 Tableware: $5,000 Labels and Signage: $1,500 Seasonal and Theme Décor: $2,000 Display Fixtures and Props: $6,500 Serving Equipment (Trays, Baskets, etc.): $800 Foundations, Elevations, Tables: $7,500

Other: Kitchen Rental: $2,000/month ($24,000/year) Storage and Transport: $2,500 Packaging: $5,000 Administrative & Operations Costs (including website set-up): $7,500 Advertising: $3,000 Publications (menus, flyers, business cards, etc): $2,500

SummaryDerrick’s is primarily focused on customer satisfaction while supporting the community in a tangible way. Derrick’s fills a niche in the Twin Cities’ food and dining market, while infusing its customers with guaranteed and reliable service and delicious Southern-style food. The Owner and Principal Chef Derrick L. Williams is confident that his product and services are “a new flavor, a new twist, and a new style,” making Derrick’s not just catering services with excellent food, but a new flavor that will increase demand: a Midwest Flavor.