Introduction Chef Vending, LLC is a family start-up business that specializes in importing vending machines and commercial food & beverage equipment from Spain. We will penetrate the vending industry with innovative, first to market, high quality vending machines. We will establish our own vending routes in the Southern and Central Florida region. We also plan to participate in the $321 billion food & beverage industry by supplying high-quality innovative equipment. With the establishment of one strategic alliance with a national brand name in either of our vending lines, we expect to easily exceed our financial forecasts.
The Company Chef Vending's mission is to be the leader in introducing innovative, quality vending machines and restaurant equipment to the market. Through close customer contact and excellent relationships, we will meet the needs of our customers wherever we can.
Chef Vending, LLC, is a privately-held Florida corporation and maintains an office and a small warehouse in a mixed-use area of North Miami Beach, Florida.
Three of the four investors in the company have full operational responsibility. Mauricio Ordonez and Javier Palmera, the co-founders, have both entrepreneurial and industry experience. Charles Mulligan brings operational management and financial skills to the operation.
The Products Chef Vending will have two product lines, each for the various markets it serves. Our vending products line will include our unique Sandwich Express machine, our Fresh Orange Juice machine and our Multi-line Dispenser. Our restaurant equipment products will be toasters, espresso makers, and fresh juice squeezers.
Most of our products, such as Sandwich Express are innovative machines that have functions and advantages not found in today's common vending machines, thus providing Chef Vending a competitive advantage over more established competitors.
We plan to aggressively enhance our existing line in the future. Our immediate plans are to include a larger model of Sandwich Express that will offer a greater variety of sandwiches, and a more diverse product line, such as pizza. Other products are in the exploratory phase.
We are also pursuing supplier relationships with large nationally-branded juice and sandwich manufacturers, to customize our machines to their products. This would enable Chef Vending to supply machines to national companies and allow them to brand the machines with their product lines.
The Market Revenue from U.S. vending consumable merchandise was $24.5 billion last year, an increase of 4.9% over the previous year, according to the Automatic Merchandiser magazine's latest State of the Vending Industry Report. Small companies, with sales of less than $1 million, accounted for 5.8% of the market and had projected sales of $1.35 billion. Three quarters of all vending operators are classified in the small category.
Within the industry, snacks and cold beverages are the largest product segments and these two categories are the driving force of the industry. The food category grew at a rate of 7% last year, according to the Automatic Merchandiser. Cold storage machines grew at an even more impressive 42% last ylear, with this growth coming at the expense of shelf-stable products.
According to the National Restaurant Association, revenues from restaurants are expected to reach $321 billion. This is a large and healthy industry in our economy, and suppliers to this industry are expected to benefit from this growth.
All of this indicates that a fast moving, innovative company that can introduce enhanced products to vending machine/restaurant equipment customers stand to gain significant market share in a relatively short time span.
Chef Vending will market its machines to three distinct market segments including; distributors, branded sandwich and juice manufacturers, and end users. For our restaurant equipment business we will focus on restaurants and hotels and equipment supply companies.
Financial Considerations The company has an initial start-up cost of approximately $157,000 of which $125,000 will come from a ten year SBA loan. Short-term borrowing will provide us with an additional $2,500 and the rest will be provided by investment capital.
We project our monthly break even will by roughly $93,000 or 27 vending units. The attractiveness of our innovative vending machines and restaurant equipment will provide us with a sales level far above this break-even point. We expect to generate $500,000 of net profit on $2.8 million worth of sales in the first year.
Chef Vending's objectives in our first year of operation are:
Sell 400 vending machines.
Directly place 10 vending machines, that we will operate, in the South Florida area.
Achieve $500,000 in sales in our restaurant equipment line.
For the following two years our growth objectives are:
Grow our vending machine and equipment business by 20% each year.
Grow revenues by 25% in our directly operated vending machines.
Chef Vending's mission is to be the leader in introducing innovative, quality vending machines and restaurant equipment to the market. Through close customer contact and excellent relationships, we will meet the needs of our customers wherever we can. Chef Vending will secure sufficient profits from free cash flow from operations, to sustain its stability and finance future growth. We will add value to our community by maintaining a friendly, familial work environment.
1.3 Keys to Success
As a start-up company, new to the industry, and introducing new products, we must be focused and work hard to create acceptance for ourselves and our products within the marketplace. The keys to our success are:
Quality support and service, recognizing that Chef Vending's success depends most critically on the relationships it's able to create.
Innovative, quality products that are able to both expand existing markets and create new ones for our customers.