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Business Plan

Dr. of BBQ

EXECUTIVE SUMMARY:

OBJECTIVE:

To operate mobile, stand-alone, food service operations catering to specific culinary demands or request and to continue to compete in BBQ contest through out the Midwest.

KEYS TO SUCCESS:

The keys to success in any food operation are as follows: 

1.      Demand

2.      Location

3.      Consistency

4.      Value/Price

COMPANY SUMMARY:

COMPANY OWNERSHIP: 

This business will be a sole proprietorship.

COMPANY HISTORY: 

The ‘Dr. of BBQ’ company was formed in 1999 as a competition team. In February of 2002, the company began catering lunches for doctor’s offices, and hospitals on a contractual basis with pharmaceutical companies.

COMPANY LOCATION:

1913 Pickett Street, Springfield, Illinois 6270

 

PRODUCTS  AND SERVICES:

Smoked meats and accompanying side dishes.

PRODUCTS and SERVICE DESCRIPTION:

• Smoked Pork Ribs
  Smoked Beef Brisket
  Smoked Whole Turkey
  Smoked Turkey Breast
  Smoked Whole Chicken

• Smoked Half Chicken
  Smoked Chicken Wings
  Smoked Pulled Pork
  Smoked Pork Chops

• Smoked Prime Rib

• Smoked Pork Loins
  Italian Beef

COMPETITIVE PRICE COMPARISON: 

When you compare various menus of central Illinois BBQ restaurants, you will find varying prices for the products that we plan to sell.

BBQ Ribs:
Damon’s	Full Rack  $16.99	Half Rack  $13.99
Corky’s	Full Rack  $16.99	Half Rack  $11.99
Dr of BBQ	Full Rack  $15.00	Half Rack  $10.00
Pulled Pork Sandwich:
Damon’s	$6.49
Smokey Bones	$6.29
Dr of BBQ	$5.50
Smoked Beef Brisket:
Damon's	NA
Smokey Bones	$6.29
Corky’s	$6.29
Dr of BBQ	$5.50

Although price comparison is a legitimate consideration, we believe that it is not the dominant factor in a customer’s decision to return.

The quality of our products far surpasses those available to the Central Illinois market; however, that does not always result in higher prices for the consumer. In fact, many our products are comparably priced, if not lower, than what our regional competitors present. 

After the initial product was offered in doctor’s offices throughout Central Illinois, many of my customers emailed me or personally called to state that that they had a reoccurring desire for BBQ within a few days after lunch had been served at their location.  Most of my customers conceded that they ultimately patronized one of the following (Springfield) restaurants: Smokey Bones, Corky’s, or Damon’s. 

I have consistently heard the same comment from those individuals, relative to their culinary experience, which reflected that their desires were not satiated by the competitor’s products. This common observation is indicative of an exceptional level of quality and skill as a BBQ company.  It is extremely interesting to note that BBQ, unlike most other food products, can become somewhat of an obsession.  This might be attributed to the fact that, although many people can duplicate the quality of a commercially prepared steak, pasta sauce or deserts, most individuals lack the knowledge, equipment and experience necessary to make good BBQ at home.

SALES LITERATURE: 

We currently have and use mailing lists for all of the following:

Doctors Offices

Dentists Offices

Chiropractic Offices

All Associations registered with the Secretary of State’s Office for the State of Illinois.

Churches and Non-Profit Organizations registered in the State of Illinois.

Homeowners who have owned a house valued at $250,000.00 or more for more than 4 years in Sangamon County. 

TECHNOLOGY: 

We have the following professional-grade equipment used for smoking meat products. A complete list of professional equipment is attached.

David Klose (mobile) commercial smoker unit valued at $12,000.00

David Klose commercial grill valued at $1,100.00.

Cook Shack upright Multi-fueled computer operated smoker valued at $9000.00

EXPANSION OF PRODUCTS AND SERVICES: 

In addition to maintaining the current product line, we anticipate expanding our products to accommodate the demands of our customers.  In August of 2005, we offered some new products to our customers including a line of smoked fresh vegetables; those products were received positively and integrated successfully with current dietary trends. We will work closely with our suppliers to develop and implement the highest standards, in our product line.

After years of continued testing and refinement, we are manufacturing private-label BBQ and homemade mustard products. Currently we are scheduling the events that we will be attending during 2006.  We have accepted invitations to participate in, and offer our products, at the Decatur Celebration, Route 66 Celebration, as well as the Spoon River Festival.  We expect to add at least two additional events [per month] through December 2006.

MARKET  ANALYSIS SUMMARY:

MARKET TRENDS: 

Current studies, from the January 31, 2005 edition of the Nations Restaurant News (the news weekly of the food service industry), revealed that BBQ is number one in restaurant trends for 2005. Additional information on this study is available at www.nrn.com.

COMPETITION AND BUYING PATTERNS:

Our long-range planning provides for negotiations (December 2005), with Springfield based Bunn-Capital Food Division, to establish a contract for purchasing our meat products. This would allow us to pay an established price [per item], which would remain level throughout the year. By doing so, the ‘up and down’ seasonal price differences that most companies face could be averted. Consequently, our product prices would be more stable, thusly, more appealing to the consumer. Although price negotiations could be initiated prior to December, the company ideology is that waiting until December will help to establish the strength and stability of our company, which may provide stronger (company) leverage in negotiations.  

MAIN COMPETITORS: 

Although Springfield currently has several BBQ restaurants; most operate with a marginal amount of business due to a lack of understanding the primary principals of smoking food products.  The most significant exception to the above is the Smokey Bones restaurant (located on the Southeast side of Springfield). Smokey Bones has a great deal of success even with the limited quality of their food products.  Generally, people throughout Illinois have an affinity for BBQ; unfortunately, the quality of the food is sometimes fair [at best], but usually poor. Once again, it is my perception that this is attributable to a lack of understanding the basic smoking process.

STRATEGY AND IMPLEMENTATION:

STRATEGY PYRAMIDS: 

It is our goal to establish three mobile food service vending locations in Springfield within 24 months. 

COMPETITIVE EDGE: 

Most marketers indicate that the number one requirement for a successful operation, whether it is a restaurant, gasoline, or tavern business, is to be located near residential areas. We are currently considering two locations on the West Side of Springfield and, if future expansion is supported, one in the Southeast Springfield area.

MARKETING STRATEGY: 

Our basic marketing strategy will be the location of our vending operations, periodic mailings to surrounding neighborhoods and occasional radio advertising.

POSITIONING STATEMENTS:  

We will position ourselves as the only provider of smoked meat and accompanying products provided by an experienced national cook-off team. This team placed ninth, out of 467 teams, in the prestigious Kansas City BBQ Association’s “Kansas City Royal” and recently competed and placed twelfth in the world championship.  Many of the other teams are ‘professional’ teams sponsored by franchised BBQ companies. 

PRICING STRATEGY:

Our goal is maintain our product pricing at, or just below, the prices of other BBQ companies throughout Central Illinois.

PROMOTION STRATEGY: 

We feel that through vending events, direct mail, radio, and other promotions we can keep the community in Central Illinois aware of our services and products. 

STRATEGIC ALLIANCES: 

We are currently negotiating with the Springfield Park District to become their preferred vendor for any/all events held at Lincoln Greens.  The Board will make a decision on this matter in mid-June, 2005. 

WEB PLAN SUMMARY:

WEBSITE MARKETING STRATEGY: 

Our website is already up and running at www.DrofBBQ.com. The only anticipated changes to the website, over the next year, will be pictures of our vending locations along with the address, hours of operation, a list of events we will be attending, as well as all competitions that we may enter.

FINANCIAL PLAN:

PROJECTED PROFIT AND LOSS: 

Recently we spoke with Donna Cook of Cook Spice Company (Springfield), who was a food-product vendor at Lowe’s (Wabash) for several years.  Donna noted that she grossed about the same amount of money at Lowe’s, as she currently makes at her North Grand location.  Donna stated that she currently has 13 employees but, while vending at Lowe’s, she had only three employees. 

Donna confided in us that she netted more profit with her vending operation, but disliked the daily setup and teardown that a vending operation requires.

PROJECTED CASH FLOW: 

Donna Cook also related to us that her average daily gross was $700.00.  Throughout the summer season, there were occasional days when Lowe’s was exceptionally busy due to expanded advertising or a promotional event; she grossed over $1,100.00 on those days. This is extremely interesting for several reasons:  I think it is important to note that Donna left Lowe’s four years ago and average customer checks have increased significantly in the last three years. It is also important to understand that traffic at Lowe’s has increased significantly over the last three years.

There is a considerable difference in the type of vending operation that Donna Cook ran versus the type of operation the Dr. of BBQ will present on the west side. While Donna ran the vending operation at Lowe’s, she served hot dogs and rib-eye steaks.  This is not to say hot dogs are not a good moneymaker, they are, and we will offer them as well. However, BBQ offers an equally good profit margin and has a greater demand, especially on Springfield’s West side.  Keep in mind that Donna’s business was strictly sandwiches, and that we plan to sell whole slabs of ribs, pulled pork and brisket by the pound.  At the same time, our side dishes will be available in various sizes to accommodate individual, family or ‘crowd’ sized orders.

I am a member of the Kansas City BBQ Society, the Lone Star barbecue Society, and The Florida Barbecue Association. I’m also a certified Kansa City BBQ Society Judge. I expect to become a certified Kansa City BBQ Society Master Judge with in one to two years.