Overview
Starting a new business and making it successful is a hard task to many entrants in entrepreneurship. The hassle of identifying a new product, a new market, and a loyal customer base can all add up to a headache a new entrepreneur faces along with others. This report is advice to a couple who wished to begin a truck food business called “Egyptian Delight.” The paper will provide the steps and direction in which the new business couple should embark in to ensure they have less hardship during their journey of making their business successful. In other words, it gives the essential factors to consider before one jumps into the process of beginning a new venture.
Background
Susan and Max Smart is a couple who have been traveling the world. They are both university professors who are required to teach at least two summer classes. This is also the time they are allowed to move but also when traveling is most expensive for Americans. These constraints have made them feel handicapped as they cannot enjoy their hobby freely and cheaply. They have to use a lot of money during their stay in America and Susan suggests that it would be better if they had a little more time and money for their travel.
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Also, the couple loves baking, and their last trip to Egypt got an idea to duplicate the two desserts they found, Umm Alli and Qatayef. The former is a phyllo pastry layered nuts, double cream, and milk while at times containing raisins and dates. The dessert is baked in a large pan. On the other hand, Qatayef is similar to Pierogis. They are dough pockets that are crescent-shaped and stuffed with cream, custard or nuts and then baked. These two desserts are famous in Egypt and are often served with coffee. The Egyptians have a culture of drinking coffee as seen in their streets. This perception is also picking up in the US.
Thus, the couple wishes to start a small truck food business to vend the two desserts and coffee in a mobile café. Their idea is to set up tables and chairs outside and bringing them when the day ends. They would also move the truck around the city during operation hours to capture a large customer base. They started to research the viability of the business and came to me for expert advice. I gave them my consideration as discussed below.
Discussion
Before they can embark on their entrepreneurial journey, the Smarts must consider several factors.
Challenges Facing a Startup Business
As Susan and Max both add up to the finances of starting the business, they are on a tightrope that needs to be checked. They earn an after-tax salary of $140,000, and this means they are saving a massive bunch of it to start. As both have to pump money into the startup, this affects their finances and monetary decisions. It means there have to be sacrificed in what an individual does with his or her money and just contribute to the business. As a result, the lifestyle has to adjust to accommodate the hole that the startup will leave in the finances. 140,000 US dollars can seem to be a lot of money, but as soon as the business starts, it will require a headlong of investments to keep running.
To begin with, the heart of the truck food business is the vehicle itself which range from $15,000 to $100,000 depending on the quality. As experience truck food operators have it, going for the cheapest automobile is not the way as the class determines the run time and frequency of repair. Also, there are personal licenses that run from $1,000 to $2,000 per year depending on the coverage plan. As a result, family finances will be jeopardized. And when the family resources and assets are at risk, that is, when the family savings are wiped out after a failure; it can lead to tensions and blames on who came up with the idea ( Productivity Teams, n.d.) . Startups also affect marriage and family relations. It becomes the new darling, and all the commitment are channeled towards its success.
Even if the business is for the two couple, one will become more obsessed than the other with its regard, and thus there is little time left for the partner. Also, the pressure of starting the business can be extremely high as the challenges come often. This can result in quick tempers and a beginning of irritability that may be inadvertently taken out on the partner. The other constraint is time as there is never enough ( Productivity Teams, n.d.) . Both partners are working full time, and the business also requires a commitment. Distractions can come along the way of running a business. For the two professors, it can be difficult to prioritize between their current job and the companies as both require attention. Vacation will not be a thing for the couple before the business is set and profitable. So their lifestyle will have to change on a larger scale.
Building a team
The idea of a startup is less likely to succeed when there is no team or when the available one is not strong. Thus, the success of the business will depend on the personnel that the founders put in place. The couple may be busy at times and therefore need a team to be carrying out business on their behalf. The team approach is a management model that involves a team of professionals and specialists with skills that complement one another’s and they all work towards a common goal. The advantage of employing this model is that it ensures quality is maintained. One of the areas that the team model can help improve is the finance department. This is one of the most daunting areas of a business for an owner without accounting expertise. Also, it is one of the most critical sections of the company as it carries all the task of allocating money that is used to run the business.
The way to boost this part is to hire a qualified financial expert or advisor, especially if no one of the two partners is versed in the area. It is imperative to understand the fundamental financial ratios and what they mean to a business. The components that go into the income statement, cash flow system and the balance sheet must be understood well. The other area that a team approach can be helpful is branding and marketing. The truck food business, just like any other, requires a commitment to selling the brand and getting out to the broad customer base to enjoy income from the loyalty. There need to be individuals who are supposed to be on the ground doing the marketing and developing of the brand. This means through social media or any other medium that is suitable and can reach a wide range of consumers. In the era of internet, digital marketing is not an option but a necessity for the startups. However, even the best owners of these businesses have no time to figure out the process. Thus, it is the task of the marketing team to get the name of the company and its products out to the masses.
The other area that team approach can improve is the production. In this case, the products are mainly desserts and coffee. The couple needs an expert in the field of making and baking the products to the requirements and taste of the customers. In any business, the final creation is what sells out and attracts or keeps the clients.
Marketing
The days of applying basic strategies of marketing to business are long gone. Nowadays, no matter how small the startup may be, it requires enough push to make the final product reach the customer's eyes or ears. Just like any other step in starting a business, name searching is also an important aspect and should be taken seriously. The couple can, therefore, use marketing tools to compare the names the tools generate and the one they (couple) chose of Egyptian Delight. One of the methods of selecting a brand name is to use digital generators like Word Lab specifically the Word Lab Tools website. It has a massive database of company names, a name builder, and a morpheme name generator among other abilities.
Secondly, there is the use of industry lingo as each has its unique one. There are words that most customers in the truck food industry use and even the business people themselves. These can have a hint of the kind of name to adapt by playing around with the phrases. Google is another tool that can be employed when brainstorming for a title. It contains search results that can provide hints on the kind of name to develop for different businesses. For example, the couple can search for the various towns of Egypt and add to other phrases to mingle up a word. The other way of choosing a name is through scrolling through stock photos to evoke the spirit of words. As the old saying goes, “a picture is worth a thousand words,” the images can help in stimulating the creativity. Also, thesaurus website is a tool that can be used to search for synonyms and related words. Despite the variety of names the devices discussed above can bring, business naming is not limited to only them. There are other ways in which a name can come up, and the couple can keep testing their creativity.
The promotion of the café, the products and brand are essential to ensuring the success of the business. To make this happen, the 4p’s of marketing are used. These P’s include product, price, place, and promotion ( Resnick et al., 2016) . The product is the good or service that the business puts forward to satisfy a specific demand of the customer. The Smarts should develop a good that would convince the clients to think that they need it. Therefore they should understand the life cycle, what they should charge for it, and how the product will be presented. Price is the cost the customers incur in getting the product. The Smarts must link the price to the real or perceived value of the product while taking account of the operation cost, seasonal discounts, and competitive prices. They should consider whether they want to make the product a luxury or affordable to many customers.
Place determines where the product is sold or the means of delivery to the market. The Smarts must be able to place their products at a point where people are most likely to buy them. Promotion is the mode of getting people to know about the goods and services offered ( Resnick et al., 2016) . It shows the customers why they need the products and why they should pay for it. It includes advertising and strategies that ensure they promote their business and brand.
Operations management
Operation management is the process that transforms various raw materials and resources on multiple systems of the business into finished products ( Krajewski et al., 2015) . It involves organizing, planning, staffing, controlling, directing, and motivating. During the staffing, employees are to be successfully examined to select only the qualified and skilled workers. The managers have a task of driving these employees and making sure they are encouraged to work by giving them proper remuneration and working conditions. This leads to retention and reduction of turnover. Operations management also ensures there is little wastage during the production process and therefore reducing the costs of production. The controlling of operation process provides the production of quality goods that meet customer demands and satisfaction.
Conclusion
In conclusion, the report has outlined the various critical issues the couple have to consider before embarking on the journey to start their business. It has discussed the challenges of starting up, the importance of team approach, how to use the 4 P's of marketing, and the importance of operations management.
References
Krajewski, L. J., Malhotra, M. K., & Ritzman, L. P. (2015). Operations management: processes and supply chains . Pearson.
Productivity Teams (n.d.). 11 challenges startups face. Teamwork.com. Retrieved from https://blog.teamwork.com/11-challenges-startups-face/
Resnick, S. M., Cheng, R., Simpson, M., & Lourenço, F. (2016). Marketing in SMEs: a “4Ps” self-branding model. International Journal of Entrepreneurial Behavior & Research , 22 (1), 155-174.
