Final Report

EXECUTIVE SUMMARY

 

Venture description

“Crew Care Cafe” is a catering service that specializes in crewmember needs on the set of a film production. The service also includes laundry and Internet, in addition to providing a “green room” for crew and will be entirely mobile, as the business exists on a custom-designed food truck. “Crew Care Cafe”, which targets the service business, is in the concept stage.

 

Product/service

The unique application of the Crew Care Cafe is that it is a transportable service. Film production happens everywhere and a mobile service such as the Crew Care Cafe will allow catering to be ready at any location at any time. The hours of film production are generally long and at certain hours, particular food options become unavailable. With the Crew Care Cafe, services will be offered 24 hours a day, to accommodate the production. The additional amenities are focused on necessities such as clean laundry and access to Internet to conduct personal business. This concept is competitive in that it is a combination of essentials for members on a film set.  

 

Market

As of 2012, the current revenue of the food truck industry is $1.5 billion with a $342.5 million profit. The catering industry lists its revenue at $7.7 billion with a $538.3 million profit. The film production industry lists its revenue at $29.3 billion with a $2.1 billion profit. While both the catering industry and the film industry have experienced some negative growth recently, the projections for 2013 and beyond have both industries growing by 2.4%-2.5%. The food truck industry has actually grown by 8.4% since 2007. It appears that my business may benefit from all three of these industries’ growth. Customers will most likely be producers from production houses that are looking to keep their crew well-fed and taken care of. The benefit of the “Crew Care Cafe” is that it focuses on the crewmembers of a film production, which can promote a positive and ultimately, more productive atmosphere. In order to penetrate the film industry catering business, I will take my truck concept to food festivals, film festivals, film industry trade shows, and food truck festivals.    

 

Start-up costs

The “Crew Care Cafe” needs at least $231,000 for the start-up.

  • Food truck (outfitted with stackable washing machine/dryer and wireless Internet)

= $100,000

  • Commercial Kitchen = $36,000
  • $10.00 per person for groceries = $40,000/year
  • Business license, food handler certification, health certification, and fire certification = $10,000
  • Insurance & Worker’s Compensation = $13,500
  • Gas = $6,000
  • Equipment = $10,000
  • Advertising costs = $5,000
  • Direct Labor (2 employees) = $10,000

 

Price & profitability

Potential sources of funds include family members for half of the start up capital. From there, I will seek either a partnership with an SBIC or a venture capitalist firm. Considering the expected growth of all the individual industries, there is a profit to be made, which will be returned to my investors within three years.

 

In closing
Thank you for reading my feasibility analysis. I invite you to read further about this very exciting venture that combines food, film production and other essential needs on set. As far as I have researched, there is no other business like the “Crew Care Cafe.”

 

I look forward to meeting with you, once you have reviewed the following documents. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRODUCT/SERVICE

 

Purpose of the product/service

The “Crew Care Cafe” caters specifically to production and crewmembers on a film set. The Crew Care Cafe will initially offer food options and Internet stations to conduct personal business. Shortly after the business is functional, I would like to add a small laundry service for necessary articles of clothing.

 

The unique application of the Crew Care Cafe is that it is a transportable service. Film production happens everywhere and a mobile service such as the Crew Care Cafe will allow the service to be ready at any location at any time.

 

Furthermore, the hours of film production are generally long and at certain hours, particularly options of food become unavailable. With the Crew Care Cafe, services will be offered 24 hours a day, to accommodate the production. 

 

Stage of development

It is in the concept-stage, where ideas are being formulated. I hope to have the concepts in a concrete stage by the end of August 2013. From that point, based on the results from this assignment, I will move into the model stage, where I will test and tweak the structure for the truck until the end of November. I hope to be in small production runs by December 2013. 

 

Product/Service limitations

As this is a mobile catering service, the first limitation is the perishability of the food items. Also, with 24-hour service, food will need to be ready all the time, which increases the perishability of the food items.

 

Legal restrictions on shelf life and health codes will be observed, which may cause more waste than necessary.

 

The truck itself will need to be custom-created to have a food storage space, eating area, and laundry facilities. All of these extras will require special installation and also have individual regulations to meet.

 

Proprietary rights

At the moment, no plans are in place for patents or service marks. Crew Care Cafe is essentially a mobile catering service for film productions. Once the business has been deemed feasible, I will apply for licensing over the concept.

 

Governmental approvals

District-issued certification identification will need to be obtained from the Department of Health. Next is the food manager certification course, which provides the Certified Food Protection Manager Identification. The Department of Health’s Food Compliance will then review the proposed menu. The initial health inspection certificate costs $100.00. The food truck can be no larger than 18.5 long, 10.5 tall, 8 feet wide. The Department of Health will do a final inspection of the truck and all the cooking and storage units. All of the equipment will be tested and turned on.

 

Next, I will need to complete a vending application and submit this to the Department of Health. I will also need to maintain access to an approved depot location. The depot needs to be able to support my business with regard to food supply & storage, water supply, food preparation, general supply storage, cleaning of equipment & utensils, waste disposal, and cooking oil recycling. A final health inspection will be held to verify:

 

  • Proof of ownership, proper identification and license.
  • Proof of District-issued Food Manager Identification Card.
  • Food purchase record storage and record keeping.
  • Depot, commissary or service support facility meets vending unit operation needs. A copy of license for the service support facility and/or a recent inspection report is required.

  

Once the Department of Health and DC Fire Marshal inspections are approved, I will begin the Roadway Class A License process. Lastly, the food truck routes and docking locations will need approval by the zoning commission.

 

Product/Service liability

I will apply for two million dollars worth of auto liability, auto physical liability, and general liability, in addition to a liability umbrella. I will also acquire one million dollars worth of property insurance. Lastly, workers’ compensation is a requirement in California, so I will apply for that as well.

 

Related products/services and spin-offs

After the first Crew Care Cafe prototype, I will reexamine what amenities were really necessary and which were not really utilized. One feature I have been thinking about is providing production assistants to the film set. The production assistants will be employees of the Crew Care Cafe and will maintain that business. But if there are additional jobs on set and a PA is needed halfway into the day, I would like to be able to provide one of my “crew.” My food truck would be in close proximity to the set and the PA would be able to easily transition into whatever is needed immediately. No waiting for an agency to send over someone.

 

At the moment, only one truck is in the works. But if this is a successful venture, I would like to have many more Crew Care Cafe trucks, for the many productions that are occurring in and around the city at the time. Also, I would like to have a variety of food truck sizes, dependent on how large the production is. 

 

Another idea is to create a “Cinephile Food Truck”, where there would be flat-screen televisions on the sides of the food truck. And the menu would reflect film-flavored items.

 

Production

A standard food truck will cost approximately $60,000-$70,000. In order to outfit it properly with laundry, Internet, and a lounge area, it could cost upwards of $100,000. At the moment, there are no plans to grow any of the food internally. A food service will be subcontracted out for the raw materials. I will design the menus and my staff will prepare the food, according to the clients’ tastes.

 

THE MARKET

 

Current industry size

Many industry analysts pinpoint 2008 as the year food trucks came into popularity. According to the Food and Agriculture Organization of the UN, “street food is eaten by 2.5 billion people every day.” As of 2012, the current revenue of the food truck industry is $1.5 billion with a $342.5 million profit.

 

The catering industry lists its revenue at $7.7 billion with a $538.3 million profit.

 

The film production industry lists its revenue at $29.3 billion with a $2.1 billion profit. 

 

Growth potential of the industry

The food truck industry has experienced an 8.4% growth (2007-2012). While my food truck is targeted towards a market that has been identified, I have found that my service is the only one that is entirely mobile and is created specifically for the crewmembers on the production. Other industries’ growth to take a look at:    

 

The catering industry experienced a -0.7% annual growth from 2007-2012. However, it has a projected 2.4% growth from 2012-2017. 

 

The film production industry experienced a -2.8% annual growth from 2008-2013. However, it has a projected 2.5% growth from 2013-2018.  

 

Industry trends

Filmmaking is at a premium these days. With cinema tools becoming cheaper and more accessible, amateur filmmakers are moving to the “prosumer”-level. As such, there will be more film sets to cater to. The Crew Care Cafe will be the exact fit for these smaller productions.

 

One negative trend to the food truck industry is that state regulations and permits for public space are getting stricter, due to complaints from restaurant owners and/or homeowners. It is becoming harder to legally park the food truck. This trend will greatly influence my company’s accessibility to businesses. 

 

Competition profile

Direct competition will be from catering services. Ultimately, my business is a mobile catering service. New food trucks are generally welcome in the industry, much like new restaurants, but their longevity is often similar to restaurants’ longevity as well. (Low survival rates.)

 

However, what makes my service unique and competitive is the implementation of Internet stations, laundry services, and the goal of catering to crewmembers specifically. Also, with the business existing mostly on the truck, I can eliminate building costs, and be ready to travel anywhere a client needs me to be.

 

My home base will be Los Angeles, CA, but I hope to have multiple food trucks located across the United States in areas of high film production (Atlanta, GA; Charlotte, NC).

 

Customer profile

Crew Care Cafe will target the mid-level digital media production companies up to the larger film production houses. These companies will be mostly staffed by the 30-45 year old age demographic and be “prosumer” level to the professional level.

 

Customer benefits

I am solving:

  • food needs for crew members
  • Internet needs
  • laundry services
  • a place to unwind
  • mobile catering (anywhere the business needs me, I can be)

 

Crewmembers work long hours and are often given food that is not nutritious. My food truck will strive to provide healthy, organic options at any time of the day, to not only accommodate a film set’s busy schedule, but also to keep crew members’ morale and energy up, which can only increase the productivity on set.

 

By having an Internet hot spot on the food truck, crewmembers can keep up with their business needs while on set. Also the laundry service will assist with film sets where there are multiple days with long hours and very few moments to attend to personal necessities.

 

On any set, there is often a room for talent, but there may be a lack of places for the crew to sit and unwind. For that need, the Crew Care Cafe will have a portion of the truck devoted to a crew “green room.” A well taken care of crew is a more industrious crew.     

 

Target markets

Four major players divide the current market share of filmmaking: The Walt Disney Company (19.2%), NBCUniversal (18.4%), Time Warner, Inc. (15.3%), and News Corporation (14.5%). Another target market would be television production, where the major players are the same as the filmmaking industry. In terms of the catering business, there are no major players. Below is a graph (IBISWorld) showing that 10% of the catering industry is for sporting and entertainment events while 20% is for corporate functions. Analyzing that data, I believe that film production catering could be a part of either percentage.

 

 

Market penetration

To advertise for Crew Care Cafe, I plan on attending a number of food festivals in southern California. By setting up a booth, I can advertise my services to the general public and network among “foodies”.

 

With the influx of food trucks, a number of food truck festivals have popped up. This will also be a good opportunity for advertising about Crew Care Cafe.

 

I will focus most of my efforts at film industry trade shows and film festivals. These are arenas where film professionals will be present and the Crew Care Cafe will have the most visibility and usefulness. I would also like to hire a public relations firm to advertise to local digital media companies, in addition to executives at production houses.    

 

PRICE & PROFITABILITY

 

Price list

Sample Menu (Price per person)

SNACKS:

Brussels sprouts, summer squash, & tempeh bacon sautéed in garlic sage butter $6.95

Gourmet cheese plate w/ citrus rosemary apricots & raw vegetable crackers       $7.95

Avocado bruschetta                                                                                                                   $7.95

MEALS:

Buttermilk Pancakes chocolate chip, strawberry, banana, or blueberry, plain $6.00

Chef Salad romaine, ham, turkey, celery, cherry tomatoes, swiss cheese, cheddar cheese, and hard-boiled eggs. $8.00

Greek Salad romaine lettuce with cucumber, tomatoes, olives, feta cheese, green peppers and red onion with lemon olive oil. $7.00

Caprese mozzarella, roasted red peppers, sun dried tomatoes, reduced balsamic, and fresh basil. $6.50

Beef and Roasted Portabella Mushroom Stroganoff $14.00

Asian Pasta Salad with Grilled Chicken or Tofu $12.00

Pork, Chicken or Veggie Tamales $10.00

Pulled Pork Sandwiches $9.00

Taco Bar with Crispy Beef or Grilled Fish Tacos $10.00

Juicy, Half Pound, Flame Grilled Diva Burgers $10.00

Beef or Roasted Vegetable Lasagna $9.00

 

Sample Laundry Service

1 bag of laundry, washed, folded and returned within 24 hours: $10.00/bag

 

Internet Service

$20.00/day regardless of number of users.

Price Assumptions:

Based on a number of healthy, organic Los Angeles, CA restaurants menus’, I formulated my menu’s prices to be a dollar or two less. The prices are per person (labor and serving costs inclusive), so it will be competitive with restaurants and catering businesses.

 

Ultimately, I have not found a film production catering service that combines food, laundry, and Internet in one package, so this will hopefully stand out and make my services competitive with other catering businesses.

 

After looking at catering businesses such as Pepper Moon Catering in Greensboro, NC, Rise & Shine Catering in Los Angeles, CA to corporate chains such as Jason’s Deli and Chik Fil-A, I believe that my prices are reasonable.

 

Sales estimate

Catering Services:

The catering industry has a forecasted growth of 2.4%, while the film production industry has a forecasted growth of 2.5%. Taking that into account, if the catering industry attributes 10% of its 538.3 million profit to entertainment events, then 53.83 million dollars in profit can be made via film production catering. If my business books one client per week, roughly estimating 20 crewmembers to feed, my profit could be around $1000/day. Working for four days, at 50 weeks/year, that equals $200,000.

 

Laundry Services:

Estimating 20 crewmembers, if half of them have laundry needs on a four day shoot, then my profit could be $100.00 – $200.00. 50 weeks/year =  $10,000.

 

Internet Services: For a four day shoot, Internet services come to $80.00 for the job. 50 weeks/year = $4,000.

 

The first year, the total revenue of my business will be $214,000. Calculating a 1% increase in business per year, $214,214 will be my second year’s revenue and the third year’s revenue will be $214,428.21. My business will capture less than 1% of the market share.      

 

Cost of product/service

Food truck (outfitted with stackable washing machine/dryer and wireless Internet)

= $100,000

Commercial Kitchen = $36,000

$10.00 per person for groceries = $40,000/year

Business license, food handler certification, health certification, and fire certification = $10,000

Insurance = $13,500

Gas = $6,000

Equipment = $10,000

Advertising costs = $5,000

Direct Labor (2 employees) = $10,000

 

Gross margin

 

Year 1: $214,000 profit – $230,500 products/service = -$16,500

Year 2: $214,214 profit – $125,500 products/service = $88,714

Year 3: $214,428.21- $125,500 products/services = $88,928.21

 

PLAN FOR FURTHER ACTION

 

Needed capital

At minimum, $231,000 will be needed for starting this venture. I will first approach my family members to become investors in the business. I believe that I could get half of my start-up capital from my family. For the remaining $116,000, I will try to work with an SBIC and/or venture capitalists for the final start-up capital.

 

Entrepreneur’s role

My role will be as owner and manager. Once the truck is functioning, I plan on working each event that we are book.

Business plan

No business plan should be written at this point. More research needs to be conducted on industry trends and the laundry aspect of my business. It is also hard to say whether production houses view their crewmembers as valuable as they view their talent, and therefore would be willing to invest their money in this more expensive catering option. Also, a food truck would need to bring in upwards of $500,000 of revenue a year. Some food truck owners say that $200,000 a year is an approximate break-even point. (Priceonomics)

 

Pitfalls:

  • service is tailored to the crew only
  • fixed menu currently, which goes against my idea of “catering” to the crew
  • No wage allowance for the entrepreneur

 

Positives:

  • catering service that aims to provide not only food, but laundry service and Internet
  • healthy, organic options for the hard-working crew on set
  • mobility to travel to where the set is

 

License potential

At this juncture, there is not enough evidence to license the concept.

 

Corporate partners

Ken and Loretta Hsieh – parents

Jake and Gloria Garver – relatives

 

Proprietary rights

None currently.

 

Infrastructure members

Emergence Capital Partners SBIC, L.P.

Gordon Ritter, Contact

160 Bovet Road, Suite 300

San Mateo, CA 94402

Phone:    (650)573-3100    Fax:    (650)573-3119

Email:    gritter@emcap.com

 

Mrs Barbara Fennessy

Small Business Liaison Officer

(714) 223-5100

 

The Latest

Purpose of the product/service

The “Crew Care Food Truck” caters specifically to production and crew members on a film set. The Crew Care Food Truck will initially offer food options and Internet stations to conduct personal business. Eventually, I would like to add a small laundry service for necessary articles of clothing.

 

The unique application of the Crew Care Food Truck is that it is a transportable service. Film production happens everywhere and a mobile service such as the Crew Care Food Truck will allow the service to be ready at any location at any time.

 

Furthermore, the hours of film production are generally long and at certain hours, particularly options of food become unavailable. With the Crew Care Food Truck, services will be offered 24 hours a day, to accommodate the production. 

 

Stage of development

It is in the concept-stage, where ideas are being formulated. I hope to have the concepts in a concrete stage by the end of August 2013. From that point, based on the results from this assignment, I will move into the model stage, where I will test and tweak the structure for the truck. I hope to be in small production runs by October 2013. 

 

Product/Service limitations

As this is a mobile catering service, the first limitation is the perishability of the food items. Also, with 24-hour service, food will need to be ready all the time, which increases the perishability of the food items.

 

Legal restrictions on shelf life and health codes will be observed, which may cause more waste than necessary.

 

The truck itself will need to be custom-created to have a food storage space, eating area, and laundry facilities. All of these extras will require special installation and also have individual regulations to meet.

 

Proprietary rights

At the moment, no plans are in place for patents or service marks. Crew Care Food Truck is essentially a mobile catering service for film productions. Once the business has been deemed feasible, I will apply for licensing over the concept.

 

Governmental approvals

The Crew Care Food Truck will need approval by the FDA and possibly the USDA. Also, the food truck routes and docking locations will need approval by the zoning commission.

 

Once the permits by the FDA and the USDA are in place, the health department will have to schedule a visit to make sure the food truck meets industry standards. 

 

Product/Service liability

I will apply for two million dollars worth of auto liability, auto physical liability, and general liability, in addition to a liability umbrella. I will also acquire one million dollars worth of property insurance. Lastly, workers’ compensation is a requirement in California, so I will apply for that as well.

 

Related products/services and spin-offs

After the first Crew Care Food Truck prototype, I will reexamine what amenities were really necessary and which were not really utilized. One feature I have been thinking about is providing production assistants to the film set. The production assistants will be employees of the Crew Care Food Truck and will maintain that business. But if there are additional jobs on set and a PA is needed halfway into the day, I would like to be able to provide one of my “crew.” My food truck would be in close proximity to the set and the PA would be able to easily transition into whatever is needed immediately. No waiting for an agency to send over someone.

 

At the moment, only one truck is in the works. But if this is a successful venture, I would like to have many more Crew Care Food Trucks, for the many productions that are occurring in and around the city at the time. Also, I would like to have a variety of food truck sizes, dependent on how large the production is. 

 

Production

The food truck will cost approximately $60,000. At the moment, there are no plans to grow any of the food internally. A food service will be subcontracted out for the raw materials. I will design the menus and my staff will prepare the food, according to the clients’ tastes.

 

 

 


 

THE MARKET

 

Current industry size

Many industry analysts pinpoint 2008 as the year food trucks came into popularity. According to the Food and Agriculture Organization of the UN, “street food is eaten by 2.5 billion people every day.” As of 2012, the current revenue of the food truck industry is $1.5 billion with a $342.5 million profit.

 

The catering industry lists its revenue at $7.7 billion with a $538.3 million profit.

 

The film production industry lists its revenue at $29.3 billion with a $2.1 billion profit. 

 

Growth potential of the industry

The food truck industry has experienced an 8.4% growth (2007-2012). While my food truck is targeted towards a market that has been identified, I have found that my service is the only one that is entirely mobile and is created specifically for the crew members on the production. Other industries’ growth to take a look at:    

 

The catering industry experienced a -0.7% annual growth from 2007-2012. However, it has a projected 2.4% growth from 2012-2017. 

 

The film production industry experienced a -2.8% annual growth from 2008-2013. However, it has a projected 2.5% growth from 2013-2018.  

 

Industry trends

Filmmaking is at a premium these days. With cinema tools becoming cheaper and more accessible, amateur filmmakers are moving to the “prosumer”-level. As such, there will be more film sets to cater to. The Crew Care Food Truck will be the exact fit for these smaller productions.

 

One negative trend to the food truck industry is that state regulations and permits for public space are getting more strict, due to complaints from restaurant owners and/or homeowners. It is becoming more hard to legally park the food truck. This trend will greatly influence my company’s accessibility to businesses. 

 

Competition profile

Direct competition will be from catering services. Ultimately, my business is a mobile catering service. New food trucks are generally welcome in the industry, much like new restaurants, but their longevity is often similar to restaurants’ longevity as well. (Low survival rates.)

 

However, what makes my service unique and competitive is the implementation of Internet stations, laundry services, and the goal of catering to crew members specifically. Also, with the business existing entirely on the truck, I can eliminate building costs, and be ready to travel anywhere a client needs me to be.

 

My home base will be Los Angeles, CA, but I hope to have multiple food trucks located across the United States in areas of high film production (Atlanta, GA; Charlotte, NC).

 

Customer profile

Crew Care Food Truck will target the mid-level digital media production companies and film production companies. These companies will be mostly staffed by the 30-45 year old demographic and be “prosumer” to professional video houses. 

Product/Service

 

 

 

Image

 

Crew Care Cafe – a food truck/laundry service/wi-fi hotspot/production assistant service that caters specifically to the hard-working production staff on a film set.