!

Running head: GYMMYS KITCHEN TAKEWAY

Gymmys Kitchen Takeway

Name

Institution

Author Name
GYMMYS KITCHEN TAKEWAY !2
Executive Summary

The report contains a proposal of a business plan for Gymmys Kitchen takeway, the

establishment which will be designing healthy meals in addition to provision of meal delivery

services to various destinations in Macau. The aim of the business is to deliver delicious food

which is natural and has low calories and carbs to homes and workplaces. The location of the

business will be at Macau Island, a place that is popular to the visitors. Gymmys Kitchen will

have focus on buying quality ingredients from around the world to provide the consumers with a

wide range of tastes to choose from. Foods shall be prepared according to the food pyramid

resulting in well-balanced nutrients. Nutritious snacks will also be available upon request. The

business will be a partnership co-owned by Mina and Sammi. Mina will be the financial manager

while Sammi will concentrate on marketing and sales.

This start-up proposal for Gymmys Kitchen has been subdivided into numerous sections

which include the company summary, market analysis that explains the micro and macro

environment, competition analysis, business model canvas of the restaurant, business strategy,

strategic risk management, project execution, financial plan, and the growth strategy.
GYMMYS KITCHEN TAKEWAY !3

Table of Contents
Executive Summary..........................................................................................................................2

Company Summary..........................................................................................................................4

Business Structure...........................................................................................................................4

Style of Leadership..........................................................................................................................7

Objectives......................................................................................................................................10

Market Analysis..............................................................................................................................11

Micro and Macro Environment.....................................................................................................11

Competition Analysis..............................................................................................................16

Business Model Canvas..........................................................................................................17

Table 1 Gymmys Kitchen Business Model............................................................................21

Business Strategy....................................................................................................................22

Strategic Risk Management....................................................................................................24

Project Execution....................................................................................................................27

Table 2 Gymmys Kitchen Milestone Schedule......................................................................28

Table 3 Capital Contribution..................................................................................................29

Figure 4. Break-Even Analysis...............................................................................................30

Growth Strategy......................................................................................................................30
GYMMYS KITCHEN TAKEWAY !4
Summary Conclusion..............................................................................................................31

References...............................................................................................................................33

Appendix 1..............................................................................................................................39

Appendix 2. Projected Cash Flow Statement.........................................................................40

Appendix 3. Greens Kitchen Location Source: Macau-Lifestyle...........................................40

Bless Juice Bar Source: Macau-Lifestyle. Retrieved from ‘Macau Lifestyle’, 2018.............41
GYMMYS KITCHEN TAKEWAY !5
Company Summary

The business anticipated and explained in this start-up proposal is Gymmys Kitchen that

will function not only as a takeaway restaurant but also as a business to raise awareness on

healthy eating habits in Macau. The business will share the idea of eating healthy among the

residents of Macau. The purpose is in avoiding unhealthy diets for some individuals who use

extreme methods such as fasting to lose weight.

Macau is a very small city with the area of 30.5 km², which is approximately 8,700 times

smaller than United Kingdom. Gambling is an extremely successful business in Macau which

stimulates the economy. It has transformed the territory into one of the world’s largest gaming

centres, boosting the economy and improving the infrastructure within the region. Tourism is the

main source of money for Macau residents. There are approximately 30 million visitors coming to

Macau each year and most of them are form the Mainland China. Due to the irregular shifts of the

hospitality and gaming industry, many workers are not eating healthily. Many people in Macau

are used to takeaways and irregular diets. Currently, there are only three nutritional food

restaurants in Macau and only one provides delivery service.

Business Structure

The form of ownership adopted at Gymmys Kitchen is partnership. The aim of the

partners is to provide quality training to employees and hire people with relevant skills and

knowledge of operating a restaurant. The reason behind this is to offer the customers the best

experience and ensure that the service exceeds satisfaction.

GYMMYS KITCHEN TAKEWAY !6
One of the key attributes to running a successful restaurant is selling quality tasting food

consisted of balanced meals, obtaining feedback from employees and customers, and maximising

the profit through selling via the internet.

Gymmys Kitchen will be co-owned by Mina and Sammi where both will be the general

sales manager. Individually, Mina will be the financial manager responsible for accounting in

addition to being the executive chef focusing on cooking nutritional meals. On the other hand,

Sammi will concentrate on promotions, sales, internet, and e-commerce. Sammi will also be

responsible for the logistics in terms of ensuring all the ingredients are available. The plan is to

have four employees who will work full time, namely one cleaner, two chefs, and a delivery

person. The deliveryman will be required to have a driving license and also have knowledge of

riding a bike and motorcycle. The partners will have the duty of ensuring that deliveries are done

within time. Moreover, Sammi will manage the flow of orders while Mina will ensure that the

inventory records are well-managed.

Partnership is the preferred business structure for Gymmys Kitchen because of a number

of reasons. First, partnership is the best approach to use for start-up businesses since it is less

expensive in terms of capital (Bock, Opsahl, George, & Gann, 2012). Gymmys Kitchen will

combine the expertise and resources of various owners to ensure the success of the business.

Moreover, a business that is owned by two partners is easy to manage compared to the one which

depends on the decision making of a board of directors. Furthermore, the profits and losses are

easily shared between the co-owners in relation to their share, which they agreed upon initially

during the partnership agreement (Geddes, 2017). Unlike many organisations and established

companies, this form of business structure is not mandated to announce their progress in terms of
GYMMYS KITCHEN TAKEWAY !7
losses and profits to the public. Therefore, Gymmys Kitchen will be entitled to a unique privacy

such that only the workers and partners know the financial state of the business. According to

Bock et al. (2012), the best aspect about partnership is that a business can easily be changed into a

company if there is a need for this development in the future. Therefore, depending on the growth

and success of Gymmys Kitchen, the partners might decide to attract more investment and secure,

increased funding from financial institutions by registering the business as a company. Of

importance to note is that this upgrade can only be achieved one way. A business registered as a

company cannot be downgraded or changed into a partnership as the law requires it to file for

liquidation or bankruptcy which results into firm’s dissolution.

Among the reasons individuals start businesses as partnerships rather than corporations or

companies is because business partners do not need to undertake legal procedures when forming a

partnership unlike starting up an organisation where the owners have to file documents with the

government (Glasbergen, 2011). Consequently, filing income taxes is easier since partners are

deducted individually, which means that the returns acquired from the partnership are purely

information returns. Nevertheless, this information is monitored by the governments’ revenue

service to show the expenses and income used by the business. Research shows that partnership is

an attractive method to acquire prospective talent or employees. Owners of the business Mina and

Sammi have various skills which, when utilised effectively, could contribute positively to the

business (Hazudin, Kader, Tarmuji, Ishak & Ali, 2015). Gymmys Kitchen takeaway is set to grow

and become successful considering that partners are knowledgeable in different ways.

For Gymmys Kitchen to become successful, the business will need to invest in the

following aspects of a good partnership. First, Gymmys Kitchen will need to get at least more
GYMMYS KITCHEN TAKEWAY !8
than two members who have the same idea to begin the business. The individuals who are being

engaged in the partnership have to be legally competent since they have to sign contracts in order

to become partners (Selsky & Parker, 2010). In relation to this feature, Gymmys Kitchen qualifies

as it is owned by Mina and Sammi operating on different roles of the business. Secondly, Mina

and Sammi will need to have unlimited liability, meaning that they will be individually and

collectively liable for Gymmys Kitchen obligations and debts. One of the main purposes of

having partnerships is to share the profits and losses settled during the initial agreement.

However, in case there was no concurrence between by the members, the profits and losses are

shared equally among the partners (Hazudin et al., 2015). Other features that make partnership the

preferred business structure include voluntary registration, contractual relationship, and mutual

agency among others (Selsky & Parker, 2010).

Partnership structure was also the best proposed management structure due to the

simplicity in decision making. Consultations between Mina and Sammi will be less complicated

compared to when dealing with company. Mina and Sammi, based on the expertise and

partnership agreement, each will be liable for the decisions made. Apart from these benefits of a

partnership, this formation was selected because of the lack of hardships in interactions between

the directors or owners and the employees. The concerns of the workers are addressed

immediately often due to the direct access to the managers as they are often available within the

business premises.

Style of Leadership

The proposed leadership style to be adopted at the Gymmys Takeaway will be

transformational style. Such leaders are individuals who have the ability of stimulating and
GYMMYS KITCHEN TAKEWAY !9
inspiring supporters for them to accomplish outcomes which are extra-ordinary (Robbins &

Coulter, 2007). A transformational leader closely listens to the developmental needs and concerns

of individual followers, signifying that they are not self-centred. These types of individuals who

adopt this kind of leadership approach change the awareness of the issues of their followers by

ensuring they assist them in confronting their past behaviours while giving them an opportunity to

shape their destiny through a new beginning. These leaders convince followers that there is hope

in doing what is right. Moreover, they encourage supporters into putting additional effort in order

to attain both their personal and organisational goals. The ultimate goal of transformational

leaders is creating the desired change in terms of how the followers think; considering Gymmys

Takeaway is a new business, having a leadership method that acknowledges the difficulty of

starting up and motivates employees to give their best irrespective of the work conditions will be

critical in achieving long-term goals. Thus, having Mina and Sammi adopt transformational

features within the business will ensure employees’ concerns as well as the interests of the

business are taken into the account (Warrilow, 2012).

Among the reasons transformational leadership style has been chosen for the leaders at

Gymmys Takeaway is that it enhances morale, motivation, and performance of the followers by

employing numerous mechanisms. Some of these mechanisms include providing a connection to

the followers’ sense of identity, be true to the organisation’s and the collective firm’s identity. In

addition to these, others methods include being a role model for the employees, an aspect that

makes them not only inspired but also interested, providing a challenge to the employees to take

ownership of what they do, and having an understanding of the weaknesses and strengths of all

the employees. Finally, this leadership method allows leaders to assign workers’ duties and
GYMMYS KITCHEN TAKEWAY !10
responsibilities that they are skilled and have high chances of succeeding in. In doing so,

performance and productivity are enhanced.

Warrilow (2012) stated that transformational leadership style can be explained through

four main components. The first is the idealised influence or charisma which refers to the extent

in which a leader acts in a manner that is admirable in addition to convincing others to support an

idea and taking stands depicting an individual’s set of values. Being a start-up business, Gymmys

Takeaway will require this type of leader who instils discipline and hard work into the workers.

Secondly, transformational leaders are identified with inspirational motivation, which refers to the

ability of the leader to articulate the vision of a business, in this case Gymmys Takeaway, in a

manner that appeals and inspires the employees about the future of the organisation. In this case,

the leader offers meaning for the current tasks that the employees might be pursuing. The third

aspect of a transformational leader is intellectual stimulation which refers to the ability of the

leaders to challenge assumptions and stimulate and encourage creativity in the minds of the

employees. Creativity will be highly needed to ensure that new products and services are taken

into the account to attract new customers. Thus, having leaders who encourage employees to be

creative without having to fear will be vital for the survival of the business and its growth.

Transformational leaders will be required to provide a framework for employees that allows them

to know how they connect with the organisation, leaders, and to each other for purposes of

creatively overcoming obstacles in the course of their mission. Finally, a transformational

leadership style at Gymmys Takeaway will allow for personalised and individual attention. It will

be important for leaders to provide employees with individual attention by becoming a coach or

mentor and, at the same time, show them respect and appreciation for their efforts. The
GYMMYS KITCHEN TAKEWAY
11!

consequences will be enhancing each member of the team’s self-worth and self-fulfilment,

which, therefore, will inspire followers for further growth and achievement. Jung & Sosik,

(2002) emphasised that transformational leaders are proficient in creating effective teams or

groups that work towards achieving the set objectives and goals.

Objectives

This report seeks to develop a start-up plan for Gymmys Kitchen by discovering different

factors that could have an influence on a new restaurant business in Macau. During the research,

various aspects have been explored including the political environment of Macau, the legal

aspect, the technological components, the economic factors, and the nature of the suppliers and

customers as well as the cultural aspects. Consequently, an objective of the report is determining

the best marketing environment that Gymmys Kitchen could adopt to ensure that its operations

are carried out as envisioned by the partners. Another general objective of the new business will

be to deliver quality healthy foods at prices which are affordable by the different types of

customers in Macau. The mission statement for the business will be Everyone leaves Gymmys

Kitchen with a green heart. Gymmys Kitchen will aim at spreading happiness and awareness on

the need to eat healthy. To achieve this, the business will have to consistently produce and offer

quality foods and services that exceed the expectations while, at the same time, fulfilling the

needs of the customers.

The short-term objectives of Gymmys Kitchen will include:

• Establish awareness in Macau and increase it by 20% in every 3 months;

• Attract 10% of customers every month;

GYMMYS KITCHEN TAKEWAY !12
• Establish the needs and requirements of the target consumers and consolidate the menu;

• Employ skilled workers who understand the need to provide healthy foods to consumers.

• Establish local reputation as a healthy eating restaurant

The long-term objectives of the business will be:

• Build the reputation through word of mouth and reviews by 15%;

• Improve the services by 10% each month;

• Reduce wastages and unnecessary costs by 10% in every year of operation;

Market Analysis

Micro and Macro Environment

Macro-environmental factors. The macro environment factors consist of issues that

affect society as a whole. They are more controllable than the micro environmental factors

(Schaltegger, LüdekeFreund, & Hansen, 2016). The following are macro environmental factors

that might affect start-up businesses such as the Gymmys Kitchen takeaway. The technological

changes enable a business to achieve its main goals and, in other cases, they threaten the

existence of the business. Research shows that organisations, which are not able to adapt to

various technological changes, may not thrive in the market for a long time. Gymmys Kitchen

takeaway will however not be affected by technological aspects considering the size of the

Island. Another macroeconomic factor is the economy, which refers to all the trade and industry

aspects impacting on the normal functioning of a business. In most cases, many businesses

depend on the economic environment for all the sources needed to make the company a success

(Fleisher & Bensoussan, 2015). In this case, Gymmys Kitchen Takeaway will depend on the

economic environment to ensure that it has found a suitable market for selling their finished
GYMMYS KITCHEN TAKEWAY !13
goods, in particular food and other services provided. For instance, the prices that the business

will set shall be controlled by the economic situation in Macau at any particular time.

The political environment is another macro environment factor that has an enormous

impact on business. According to Birnleitner & Student (2013), the political environment has

national, regional, and international implications on the business. Macau Island’s political system

decides controls and promotes the business activities that go on in the island. Nevertheless, this

means that the Gymmys takeaway has to work under the rules and regulations set by the

government of Macau (Macau SAR Government Portal, 2018). Efficient, stable, and honest

political systems are the primary factors for the growth of start-up businesses (Birnleitner &

Student, 2013). Political instability has negative effects on the business policies of an

organisation such as in the case of Macau, it discourage tourists arrival and consequently leading

to decline in customers. According to Birnleitner & Student (2013), political factors can cause

either threats or opportunities to business firms.

The natural environment affects the running of a business in various ways depending on

the location and type of business. The natural environments include geographical and ecological

factors, which include the weather, endowments, climatic conditions, and topographical factors.

Environmental pollution and other disturbances of ecology can be of a great concern for the

distribution and delivering of food for Gymmys takeaway hotel (Reid & Bojanic, 2009). Most

government policies have the main objective of preserving the purity of the environment and

preservation of non-replenish-able resources. Additionally, this adds more responsibilities and

negative issues to the business.

GYMMYS KITCHEN TAKEWAY !14
Microenvironment factors. Gymmys takeaway will deliver food services to any

destination in Macau Island, which means that customers are their main assets. According to

research (Storey, 2016), customers are considered to have the biggest microeconomic effect on

any business. Simply, Gymmys takeaway cannot successfully gain profits if they do not reach

their main consumers. There is a need to know the ideal customers and their types. In this way,

the business will be able to develop and generate effective marketing strategies which are

integral in generating capital and building an active customer base (Storey, 2016).

The growth of a start-up business depends on its capability to uphold multiple markets

which include consumer, business, international, reseller, and government markets (Krause,

2013). Customer markets, according to the Gymmys enterprise, consists of households in which

the food is delivered and the individuals who buy these foods. The business markets include

producers and the organisations buying goods and services with a view of transferring to the

customers who need them most (Thai & Turkina, 2014). The Gymmys enterprise management

needs to understand that every customer market dictates its own characteristics, and, therefore,

the business has to deliver services that fit into the description of certain consumers (Krause,

2013).

The employees also form part of the microenvironment factors which affect the business.

The Gymmys takeaway workers will be responsible for producing foods and selling them in

order to expand the business. The hotel will need motivated and qualified employees since these

are the vital qualifications for any entity that aims at becoming successful and gaining a market

share (Fleisher & Bensoussan, 2015). Gymmys takeaway will thrive if it has the right distribution

channels and suppliers. One of the most important factors to consider when setting up a business
GYMMYS KITCHEN TAKEWAY !15
is knowing the right places to buy raw materials from which will be used for food production and

other services which will be issued by the business (Bowen, Morara, & Mureithi, 2009).

Moreover, distributing inventories to the customers is significant to the growth of the business.

For Gymmys takeaway to operate successfully, there is a need to get the best value on supplies

and products, which offer the best value to customers.

Another microenvironment factor which affects the business is the marketing

intermediaries. These are the organisations which help a business to sell and promote their goods

and services to more customers. The intermediaries include marketing agencies, financial

intermediaries, physical distribution organisations, and middlemen (Alfaro, 2017). The

intermediaries include retailers and wholesalers who buy products and resell them. However, in

this case, the intermediaries can help in providing more customers for Gymmys enterprise. The

marketing service agents are important in publicising the business to the public. Furthermore,

these agents promote the firms' products to the right markets. According to Bowen, Morara, &

Mureithi (2009), Gymmys Kitchen could also utilise the services of financial institutions such as

banks, insurance, and credit organisations to have the business insured against various risks such

as fire accidents. Taking into consideration Macau is a small place and depends on tourists, the

business could collaborate with some of the travel agencies to promote some of the healthy foods

offered at Gymmys Kitchen.

Competitors are micro factors, which are significant in the growth of start-up businesses.

The level of competition in Macau Island will affect the impact of the hotel’s economic

livelihood. In other words, this means that a start-up business will have to share and maybe

“steal” some customers from established businesses. Large numbers of competitors in a certain
GYMMYS KITCHEN TAKEWAY !16
area show that there is a large demand for products and services provided in the area (Yam,

2016). Therefore, a start-up business should establish itself in such areas where they will attract

customers easily. A company has to have competition since the lack of it means that they may

not find the needed demand to succeed in the future. Moreover, the lack of competition reduces

the business's ability to develop and grow (Bloom, Floetotto, Jaimovich, Saporta-Eksten, &

Terry,

2018).

Including investors and shareholders in a business depends on the size of the entity.

Gymmys takeaway hotel may include investors who help the company grow through funding and

finding more customers. Most start-up businesses fail due to the lack of funds. Therefore, in any

case, if this situation happens to Gymmys takeaway foods, then they can seek help in creditors

who issue loans and are paid back with interest (Fleisher & Bensoussan, 2015). Nevertheless, the

best method to raise funds for the business is by getting involved with investors since the

business can easily share operating risks and gain the required expertise for running the business.

However, the owners of Gymmys takeaway will have to give up the agreed equity with investors

for the business.

A business can be affected by various types of public which include internal, financial,

media, and internal among others (Pîndiche & Ionita, 2013). The financial public encompasses

the factors which affect the start-up business in terms of capital, which include financial

institutions such as banks and stakeholders. The financial public influences the organisation's

ability to get capital. The media public involves the factors which bring out the editorial opinion

from people. Media influences include magazines, radios, and television. The local public
GYMMYS KITCHEN TAKEWAY !17
consists of the community and neighbourhood. Gymmys business should consider the public’s

attitude towards the products it makes and the services it offers. The internal public consists of

managers, volunteers, and the board of directors. Gymmys organisation can use newsletters, the

media, and other means to motivate and inform the internal public of their state of business

(Schaltegger et al., 2016). The local community of Macau Island and the media will affect the

image of Gymmys takeaway. In most circumstances, a community supports an organisation

which provides jobs, operates within the social environment, and pays taxes. However, if an

organisation ignores these requirements, it may risk having a negative backlash within the public

(Storey, 2016).

Competition Analysis

Can you provide the references of where you find the competitors and more information
about what products and services do they provide?

Similar to other local or international businesses, Gymmys Kitchen will face stiff

competition from some of the firms which are current providing healthy meals to the community

at Macau. Due to the presence of local competitors, Gymmys Kitchen will have to improve their

services and ensure that the food they offer to the customers is nutritious and affordable.

Moreover, cleanliness will be critical to being successful in a restaurant business. One of the

competitors that Gymmys Kitchen will have to deal with is Greens Kitchen and Juicery (Macau

Lifestyle, 2018). Greens is a restaurant which has been built with an almost similar business

model to Gymmys; they serve meat and also introduce vegan options. Greens started its

operations in 2014 and it has been promoting a message for health since then as the menu caters

for all dietary needs and requirements for the different customers. At the same time, Greens

offers take away food items such as fresh baked goods, soups, salads, and the signature line of
GYMMYS KITCHEN TAKEWAY !18
cold pressed juices (Macau Lifestyle, 2018). In the appendices, a Google Map screenshot for

Greens shop at Macau is available for review. The second business which will offer stiff

competition to Gymmys Kitchen is Bless Juice Bar that is specialised in serving refreshing

juices, herb tea, coffee, and hearty food. The aim of Bless Juice Bar is to provide their customers

with a healthy and innovative drinking experience (Macau Lifestyle, 2018). In the appendices

there is a Google Map screenshot available, showing the location of the Bless Juice

Bar.

Business Model Canvas

Osterwalder et al. (2014) defined a business model canvas as a strategic management

template and lean start-up used for the development of business models that might be new or

existing. In this case, the canvas will be used in the development of Gymmys Kitchen, and,

normally, the canvas model is a visual chart as will be shown below with elements that describe a

product’s or firm’s value proposition, infrastructure, customers, and finances. The model is

significant in assisting firms to align their activities through illustrations of potential trade-offs.

Formal descriptions of businesses are used as building blocks for the main activities. Osterwalder

et al. thesis and work (2014, 2010) provided proposals of a single reference model whose basis is

in similarities of numerous business model conceptualisations. The infrastructure component

refers to the key activities, key resources, and partners. The key activities are the most critical

functions involved in execution of the company’s value proposition. In the case of Gymmys

Kitchen, the key activity will be the production of simple healthy meals that are nutritious to the

customers. The key resources are vital and necessary in creating value for the consumers and

sometimes these resources are referred to as the main assets of the organisation that are needed to
GYMMYS KITCHEN TAKEWAY !19
support and sustain the business (Barquet, Cunha, Oliveira, & Rozenfeld, 2011). These resources

could be physical, intellectual, financial, or human. For the purposes of reducing risks and

optimising operations of a business model, many firms invest or cultivate the relationship

between the suppliers and the buyers with an aim of focusing on the core activities, which for

Gymmys Kitchen will be the production of meals that are healthy. In the future, Gymmys

Kitchen will require to take into consideration complementary business alliances through

strategic coalitions and joint ventures between non-competitors or competitors for the reasons of

possible future expansion. The second component in the business model refers to the offering

which comprises of value propositions. Value proposition often refers to the services and

products which a business such as Gymmys Kitchen has to offer to meet the requirements and

needs of the customer (Osterwalder et al., 2014).

Osterwalder et al. (2014) emphasised that an organisation’s value proposition is what

makes it distinguishes from others in the market as through it organisations position themselves

while, at the same time, offering value via numerous elements such as customisation and price

among others (Osterwalder et al., 2014). The third building block comprises of the clients,

specifically customer segments, channels, and relationships. For an organisation to have a

business model that is effective, firms must identify the customers that it is aiming to serve

(Osterwalder, Pigneur, & Smith, 2010). Numerous sets of consumers could be segmented based

on different attributes and needs to ensure there is an effective and appropriate implementation of

the corporate strategy, which consequently meets the requirements of the clients selected, and

among these segments there are mass market and niche, segmented and diversified (De Reuver,

Bouwman, & Haaker, 2013).

GYMMYS KITCHEN TAKEWAY !20
For Gymmys Kitchen, among the consumer segments to be targeted will be those

individuals who want to eat healthy meals. The business will also target male and female

customers aged 18-40 with an income of 1000 pounds and above. The business will offer

vegetarian meals which means that it will also attract certain types of people with various views

on the world. The second aspect on customer is channels that mean that businesses can use

different means to deliver the value proposition to the consumers targeted. Businesses can reach

consumers using their own channels such as physical stores, partner ones such as major

distributors, and online stores (Osterwalder & Pigneur, 2010).

Today, it is possible for a business such as Gymmys Kitchen to utilise technology to

increase the sale of different food items. For example, the company can have a website or

application from where customers can make various orders and have them delivered to their

workplaces or homes.

Ensuring the success and survival of any business means that firms must identify and

invest in a form of relationship which they seek to establish with the chosen market segments.

Therefore, some of these associations that Gymmys Kitchen can create include dedicated

personal assistance, self-service, and personal assistance. The final aspect of the business model

canvas refers to finances which include cost structure and revenue streams where the cost

structure is a description of the monetary consequences which are most significant when

operating and some of the features of cost structure include fixed and variable costs (De Reuver,

Bouwman, & Haaker, 2013). Finally, revenue streams are about how an organisation such as

Gymmys Kitchen makes income through employing each of the consumer segment. Different

ways to earn revenue include usage, brokerage, and transport fees when deliveries are made as
GYMMYS KITCHEN TAKEWAY !21
well as advertising and licensing. The proposed business model of Gymmys Kitchen has been

detailed below.
GYMMYS KITCHEN TAKEWAY !22

Table 1 Gymmys Kitchen Business Model

Key Partners Key Activities Value Customer Customer

relationships
• Recipe Proposition • Dedicated Segments
• Suppliers developme
nt • Healthy personal • Gym
of raw • Cooking assistance
materials foods • Self- member
• Organic healthy with no
meals and added service s
food baking sugar,
producers • Social choleste • Personal • People
• Farmers media rol who
activity • Food assistance want to
• Gym be
• Planning with healthy
facilities nutritio • Macau
of daily nal communi
• Nutritionist value ty
menus • Patients
s
• Preparing • Casinos
• Healthcare beverages
and
facilities healthy
juices
• Casinos
GYMMYS KITCHEN TAKEWAY !23
Key Resources Channels

• Raw • Direct to

materials the
such as customers
fruits • Work/
• Recipes
home
for food
delivery
• Food
• Online
menu
delivery
• Employee

Cost Structure Revenue Streams

• Packaging • In-store

• Sales and marketing • Orders from Macau residents

• Loyalty programme acquisition • Online orders

• Per portion costing • Cooking classes- Recipe orders

• Fixed costs

• Variable costs

Business Strategy

The preferred pricing strategy that Gymmys Kitchen will be using is the penetration

approach where the main objective is getting the products into the market in exchange for an

acceptable return. The penetration strategy of pricing depicts entering the market with the lowest

price compared to the markets. The aim of this method of pricing is creating awareness and
GYMMYS KITCHEN TAKEWAY !24
attracting customers. The business will adopt psychological pricing such as having some

products cost 99 pounds rather than 100 pounds. In addition to this form of pricing, Gymmys

Kitchen will be giving discounts to regular customers, both weekly and monthly. The business

will start a loyalty programme for the customers where membership cards will be available. In

utilising these and other strategies, Gymmys Kitchen will be able to increase its sales and draw

more customers from the competitors.

The penetration pricing strategy is often used by start-ups such as Gymmys Kitchen to

attract consumers to buy a new product or service in the market (Lowe & Alpert, 2010).

Penetration pricing involves presenting customers with new products offered at a lower price

than their standard one. Lowering the price helps to lure other consumers in from the company’s

competitors. Nevertheless, Varadarajan, (2010) acknowledged that the price tempts the

customers to try new products.

Since Gymmys Kitchen is a start-up business aiming to attract more customers,

penetration pricing is the best strategy to use as it increases the market shares, brings the

customers into the business venture, and builds their loyalty (Lowe & Alpert, 2010). However,

owners of the business have to be careful since the strategy can lead to losses and the increase in

competition if it is implemented incorrectly.

When administrating the penetration pricing strategy, Gymmys Kitchen has to ensure that

they have enough reserve funds which will be used to keep the firm afloat in case losses are

incurred when slashing prices (David, 2011). Nonetheless, Gymmys Kitchen will be more

successful than its competitors when the product they offer is mass-produced, considering that

the cost per unit of these products is lower. Gymmys Kitchen will be able to enjoy a number of
GYMMYS KITCHEN TAKEWAY !25
privileges once the penetration pricing strategy is implemented. First, lowering the prices for the

products offered creates a positive brand for business among the initial customers who are more

likely to share their experience with others (Nagle & Müller, 2017). Secondly, production costs

can easily be lowered when the market shares are increased since they lead to high sales, hence

bringing more profit for the business. Thirdly, customers who acquire certain products at low

prices will eventually buy them once the prices are raised since they are out of convenience or

choices. The strategy will force Gymmys Kitchen to minimise their unit costs right from the

beginning since efficiency and productivity of the business are the most significant aspects

(Lowe & Alpert, 2010). One of the greatest advantages for this strategy is that since the

customers are already used to buying products at a low price, it acts as a barrier for other

competitors who may be considering to use the same strategy to lure the customers. The strategy

ensures that the sales volume in the business is high and, therefore, distribution of the products

becomes much easier to obtain (Varadarajan, 2010). While the strategy can provide Gymmys

Kitchen with many benefits once it is implemented, it may have some drawbacks, which include

false loyalty from customers who take advantage of the strategy and customer dissatisfaction

(Varadarajan, 2010).

Strategic Risk Management

Strategic risk management refers to the potential strategic risks that might face Gymmys

Kitchen and putting in place appropriate measures to overcome them. Across the world, there is

evidence to shows that 90% of all start-ups fail, translating to nine out of ten. Some of the

characteristics of start-ups which are successful are those where the product is the perfect match

to the market (Patel, 2015). In other words, the products that are made by the start-ups are those
GYMMYS KITCHEN TAKEWAY !26
which are wanted by the consumers. Thus, the product or service should have an identified

market before the organisation’s launch (Chandana, David, & Paul, 2013). In the case of

Gymmys Kitchen, the success will be dependent on the capability of having a ready market in

terms of individuals who prefer eating healthy products. Secondly, another attribute of a start-up

that does not fail is where the entrepreneur or investor does not ignore anything. A sustainable

business is not guaranteed by a strong technical team or product idea which is good (Patel, 2015).

Thirdly, a business which has the potential of growing fast does not experience failure. A

business which experiences rapid growth depicts uniqueness of the idea and a hot market which

is not flooded. Every entrepreneur craves for a market which offers the potential of enhanced

growth. The final characteristic of a successful start-up business is where the team knows how to

recover. Therefore, the business model of Gymmys Kitchen will require to be shaped around

these characteristics. In doing so, it will minimise the risks which face every start-up.

One of the risks which are common for all businesses is the financial risk. To successfully

set up Gymmys Kitchen, financial resources will be needed. At times, raising the required capital

could prove difficult to the partners. If investors are brought on board, utilising their money

effectively is significant. There is the risk of incurring too much debt. To reduce this particular

risk, careful planning, budgeting, and having cash reserve could lead to a reduction of the risk

but not eliminating it (Sherman, 2018). A business that is financially stable could be struggling

from a single wild card such as the increment in rent or raw materials.

The second risk which start-ups face is the market risk. For any business that aims to

succeed, it has to have a market that is readily available. While a good research could be

conducted, it might turn out that customers are not in need of the products or services as the
GYMMYS KITCHEN TAKEWAY !27
business had projected. At times while the customer might love what is being offered to them,

preferences or tastes may change or a new strong competitor could emerge and slice the market

share. The market risk can be mitigated through identification of the target market and providing

products and services that meet their needs and preferences at any given point in time (Ravi,

2014).

The third possible risk is caused by the human factor. Hiring of employees who are

reliable in what they do is a gamble. There are numerous gambles that start-ups must take in

regard to employees such as whether the workers are competent as the resume indicates, if they

are trustworthy and will be the best employees, or willing to work for competitors when offered

jobs that pay higher. For many employees, working less and being paid more is their wish.

Employees are the representative of the business values to the customers and the outside world.

They reflect the business ethics and culture (Douglas, 2007). Therefore, Gymmys Kitchen will

have to use the slogan of hiring slowly and firing fast. To minimise the risk that employees could

cause such as bad image when they provide poor services, the management of the entity ought to

exercise good and acceptable leadership skills.

The other risk involved is how to deal with present and future competition (Kanchana,

Divya, & Beegom, 2013). Competition means a decrease in the market share. Gymmys Kitchen

should consider competition to be a good challenge rather than a disastrous obstacle. It should

instil innovativeness and creativity among the partners and the workers (Norzuwana, Zahari, &

Salehuddin, 2013). Competition should stimulate production of quality products and offering of

better and improved services. To avoid or decrease the risk of competitors, Gymmys Kitchen

should invest in innovations and satisfying their customers as well as creation of new unique
GYMMYS KITCHEN TAKEWAY !28
products at affordable price ranges. Other risks that Gymmys Kitchen should consider include

the one of unforeseen business challenges and expenses, finding the most appropriate location,

and the legal risks.

Project Execution

Gymmys Kitchen milestone schedule prioritises and identifies specific requirements and

needs that will enable the partners to meet both the short-term and long-term objectives. There

will be follow-up meetings conducted to deliberate on variations which might emerge in addition

to the source of the corrections (John & Dan, 2003). Implementation of these milestones will

ensure that the operations of the business are line with the reality.
GYMMYS KITCHEN TAKEWAY !29
Table 2 Gymmys Kitchen Milestone Schedule
Milestone Budget Manager Department

Meeting & Evaluation $80 Partners Administrative

Site Availability $50 Partners Administrative

Contractor Bid meeting $200 Partners Maintenance

Website & Gymmys Kitchen app $300 Partners Marketing

Development

Menu Design& Testing $100,000 Executive Chef Food & Beverage

Evaluation and research $80 Partners Administrative

Legal items $90 Partners Administrative

Business plan outlay $70 Partners Administrative

Trademarks & Patents $100 Partners Administrative

Licences and permits $150 Partners Administrative

Build-out and renovation $100,000 Partners Maintenance

Purchase of equipment, $300,000 Partners Administrative

furniture& fittings

Meeting with Suppliers $200 Partners Food & Beverage

Alarm Installation $200 Partners Maintenance

Costumes/Uniform design $400 Partners Administrative

Staff Test/Pilot project $350 Partners Food & Beverage

Grand opening $4,000 Partners Administrative

Advertisements $5,000 Partners Marketing

Total 511,520

Financial Plan
The establishment of Gymmys Kitchen will require raising capital from the partners as

well as borrowing from the bank. Below is a table that depicts the capital contributions.
GYMMYS KITCHEN TAKEWAY !30
Table 3 Capital Contribution
Funds Sources Type of Investment Amount

Mina Capital Contribution $300,000

Sammi Capital Contribution $300,000

Bank Loan Loan Contribution $400,000

Total $1,000,000

Below is a summary of the break-even analysis. The analysis shows that the restaurant

will need to sell approximately 564 meals per month to break-even.

Figure 4. Break-Even Analysis

The projected income statement and the cash flow statement for Gymmys Kitchen are

shown in the appendices as appendix 1 and 2 respectively.

GYMMYS KITCHEN TAKEWAY !31
Growth Strategy

The appropriate growth strategy that Gymmys could adopt is the market penetration

strategy. For start-up businesses such as Gymmys Kitchen, usage of the market penetration

strategy is significant since the business’ aim is to enter the market and effectively promote the

products available. The strategy is mostly used as a measure that determines whether products or

services of a business venture are capable of obtaining a certain fixed percentage in the market

(David, 2011). When using this strategy, the common tactic to use is aggressive pricing (Shaw,

2012). Market penetration works efficiently in markets that are price sensitive. Gymmys Kitchen

may be able to sustain certain profit levels which are acceptable to the business since the volume

of sales decreases the costs incurred by the business per unit. Moreover, when the business

obtains its objective in the market and an adequate level of brand loyalty, the owners can

eventually decide to increase product prices (David, 2011).

Gymmys Kitchen can thrive using the market penetration strategy in the following ways.

First, the strategy causes adoption and diffusion of the product or service offered in the market.

Furthermore, if the products offered by Gymmys Kitchen are cheaper and of similar quality to

other products in the market, these products will be spread out and purchased by customers

quickly (Arkolakis, 2010). The strategy creates goodwill between the first customers who

purchase the products offered due to aggressive pricing; nevertheless, this may create more

customer referrals in the process. Due to aggressive pricing, efficiency is encouraged,

considering that the business gets thin profit margins. Therefore, the business has to maintain

effectiveness, which is important for profitability maintenance (David, 2011). Marketing

GYMMYS KITCHEN TAKEWAY !32
penetration discourages competitors who have the same products as Gymmys Kitchen from

entering the market.

The market penetration strategy may have some limitations to the business, for example;

Gymmys Kitchen may not always be willing to lower their prices. Some of the products may be

expensive to create and therefore, start-up businesses may be unable to produce enough products

particularly when there is stiff competition from established firms (Arkolakis, 2010). The

business may have a poor company image if it has several product lines. For example, when

Gymmys Kitchen chooses to implement a marketing penetration strategy for a certain product, it

may reflect poorly on other products produced by the business. Nevertheless, this means that if

customers get used to buying cheap products from the company, they may as well forget that the

company produces luxury items, and, therefore, the brand's reputation for luxurious products will

disappear (Varadarajan, 2010).

Summary Conclusion

In conclusion, Gymmys Kitchen, once established, will be located in Macau where the

business will provide health products to different consumers. Some of the simple healthy meals

that the restaurant will provide include bread, meat, salad, rice, noodies, drinks, and deserts.

These foods will have nutritional value such as no added sugars and low levels of salt. Flavours

will be taken from the original ingredients in addition to using a well-balanced food pyramid.

The form of ownership for Gymmys Kitchen is partnership. Gymmys takeaway will be owned by

Mina and Sammi. The objective of the business will be sharing the idea of eating healthy and

also delicious at the same time, not dull vegetables. The plan is to avoid unhealthy diets or

methods for some who consume to lose weight with extreme methods like fasting. Gymmys
GYMMYS KITCHEN TAKEWAY !33
Kitchen will use penetration for the pricing strategy, which is to get into a market with an

acceptable return to get into the market. For the growth strategy, the business will adopt the

market penetration strategy which is where current products are used to increase the market share

in an area for instance Macau.

GYMMYS KITCHEN TAKEWAY !34
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Appendices
GYMMYS KITCHEN TAKEWAY !40
Appendix 1

!
GYMMYS KITCHEN TAKEWAY !41
Appendix 2. Projected Cash Flow Statement

Appendix 3. Greens Kitchen Location Source: Macau-Lifestyle

!
GYMMYS KITCHEN TAKEWAY !42
Appendix 4.

Bless Juice Bar Source: Macau-Lifestyle. Retrieved from ‘Macau Lifestyle’, 2018