Starting a New Business, Developing a Product, and Entering an Established Market

Burrito Box: A Case Study 203/23/11

DC Street Food

• Moratorium on new permits from 1998-2006

• 2006 DCRA survey lists variety and quality as 1 & 2 concerns, respectively

• 82% of respondents demanded more variety

• 84% of respondents demanded more ethnic cuisine

• 56% of respondents demanded more healthy choices

Burrito Box: A Case Study 303/23/11

Not All Carts Are Mobile 7-Elevens!

• On The Fly franchise emerges in 2007-

• Puputella Pizza cart• Pedro & Vinny’s • Market rewards innovation,

taste

Burrito Box: A Case Study 403/23/11

“No new vendor permits”- DC Red Tape

• What about Arlington, VA?

• High density commercial and residential space

• Same tastes and preferences

• Transparent process for entrepreneurs

• Ballston and Rosslyn are near stand-ins for DC

Burrito Box: A Case Study 503/23/11

“First Come, First Served”, Arlington, VA

• Ballston submarket, in particular, looks promising

• Very few street vendors

• Expensive commercial real estate

• Few, if any, unique dining establishments

Burrito Box: A Case Study 603/23/11

Logistics

• Licenses• Depot• Cart• Kitchen

equipment• Product

Burrito Box: A Case Study 703/23/11

How Will the Business be Defined?

• “Rethink street meat”• Affordable• Local/organic (realistic?)• Unique• Appeals to all-including

Vegetarian options• Environmentally friendly

(100% recycled packaging)• Healthy

Burrito Box: A Case Study 803/23/11

Developing the Concept and the Brand

• Tex-Mex- Easy, familiar, success of Pedro & Vinny’s, fitting (client is a Texan, after all)

• Burrito Box- Call it what it is!

• Use CrowdSpring to find a fitting logo

Burrito Box: A Case Study 903/23/11

Burrito Box: A Case Study 1003/23/11

Finances & Pricing Strategies

• Given fixed and variable costs, what are breakeven sales?

• What are expected sales?

• How can the business expand?

• Market-driven, instead of Cost-driven pricing?

Break-Even Analysis

$-

$100

$200

$300

$400

$500

$600

0 10 20 30 40 50 60 70 80 90 100

Meals Sold

Fixed costs Total Revenue Variable Costs

Burrito Box: A Case Study 1103/23/11

Attracting Customers

• How to capture high volume foot-traffic?

• “Let Abe Buy Lunch”

• “Mall Food Courts are so ‘90s”

• Focus on customer service, given size

Burrito Box: A Case Study 1203/23/11

Takeaways

• Focus was on business model, not food

• No reserve capital

• Seasonality• Too few cooks

in the kitchen!