Miami Bites: A Fast-Food Adventure in Miami Beach

Description of the New Venture

The new business venture that I will evaluate is Miami Bites. The business will be located in the vibrant city of Miami, Florida. It will be a few meters away from the beach to allow easy access to people on the beach. Miami Bites aims to cater to a diverse population around Miami. It will be offering a fusion of fresh and healthy fast-food products. Miami Bite will distinguish itself from existing fast-food businesses and restaurants in the city by offering a variety of quality food products at an affordable price. The business will offer a variety of fast products like fries, salads, hot dogs, chicken nuggets, tacos, and wraps. Miami Bite will also offer our customers beverages such as iced tea, soda, and lemonade. The business plans to use local ingredients to make the food products. This will help promote the social responsibility of the business. Miami Bites will also utilize eco-friendly packaging to minimize the organization’s footprints in environmental degradation.

The business will have a diverse client base. It will focus on selling fast-food products to local and tourist consumers. Miami Beach is in a good strategic position with several tourists. The area serves as a recreational center for local people. Therefore, the business will aim to attract both international tourists and local consumers. Miami Bite restaurant has not yet started. The business will be launched in two years to allow us to evaluate and research the market effectively.

SWOT Analysis Quad Chart

Analysis 

The SWOT analysis analyzed the external and internal environments affecting the operation of the new business. It highlights key insight that shows if the business will be feasible and competitive in Miami Beach. The strengths and opportunities show the positive side of the start-up. Miami’s bite strengths lie in its financial feasibility. The business shareholders are strong financially. This will allow easy establishment and procurement of startup resources. The business is also located in a prime location. Miami Beach is a prime location that attracts several tourists and local people. The location will provide the business with drivers and customers, likely increasing the organization’s profitability. Miami Bites will enjoy the diversity of its menu. The business will offer diverse flavors and products that appeal to a broad audience (Oveisi, 2021). Besides, the startup will adopt modern branding. Miami Bites will be branded using contemporary and eye-catching branding or marketing strategies.

The startup will enjoy opportunities such as the growth of the local tourism industry in Miami. Miami’s tourist base has been increasing in the past few years. The beach has shown a steady increase in tourists every year. Therefore, Miami Bites will leverage the promising market growth to improve its sales. The company promises to use healthy ingredients and sustainable packaging material. In recent years, consumers have become more cautious about healthy products and sustainability. This will increase the consumer base for the new business. The business will also be outsourcing its ingredients from local markets and producers. It will make its fast-food products using local ingredients. This will promote the organization’s social corporate responsibilities, thus promoting the start-up reputation in Miami (Oveisi, 2021). The firm will also enjoy the availability of short and long-term loans provided by the state of Florida and financial institutions around the City. The loans will finance the startup operation in the next two years and allow room for expansion in the long run.

Unfortunately, despite several strengths and opportunities the start-up will likely enjoy, Miani Bites will face several challenges and threats. The business will have limited brand awareness (Antunes et al., 2022). Miami Bite has not been established yet; thus, customers don’t have any experience with its products. Therefore, in the short run, the business is likely to face the challenge of limited profitability. The high cost of start-up will also be a common challenge facing the business. Starting up a business will involve conducting comprehensive market research, strategic planning, hiring of staff, rents, procurement of startup ingredients, and many other expenses. These costs are high and may limit the short-term operation of the business. Miami City has several fast-food companies that were established a long time ago. This business controls a significant market share. Therefore, the startup is likely to face stiff competition from existing fast-food companies in Miami, Florida.

The company will face the challenge of government regulations on fast foods and drinks. Recently, the Congress and Senate passed a bill increasing taxes on fast food products and soft drinks to minimize the prevalence of chronic diseases such as obesity (Sacks et al., 2021). The regulation will increase the cost of production, thus limiting the startup’s profitability. Besides, seasonal variations of the tourist industry will affect the business. Miami experiences high and low seasons, which may affect the customers’ volume. The US is now facing harsh economic conditions. The economy is experiencing high inflation and increased prices of food products. The fluctuations in the economy significantly influence consumer behaviors. Consumers will likely save more and spend more salaries on purchasing fast food. The labor shortages in the State of Florida will affect the startup hiring process. The business will be required to hire several staff members to manage and conduct day-to-day activities. This will influence the operations of the business in the short run.

The analysis shows that the startup has several opportunities and strengths. This shows that its establishment will likely be feasible. However, the weaknesses and threats show the challenges Miami Bites will face. The challenges of the business should not be ignored. Therefore, strategic plans need to be developed to improve the feasibility of the business (Aldianto et al., 2021). Besides, the company should leverage more on its strengths and opportunities to enhance its business operations in the short run.

Financial information

Breakeven point

Breakpoint (units) = Total fixed costs / (Contribution margin per unit)

Total fixed cost = $65,000

Contribution margin = Selling price per unit * (1 – Profit margin)

Suppose the average price point for the business is $12 per meal, and the profit margin is 30%.

Therefore, the contribution margin will be = 12 * (1 – 0.3) = $8.4.

Breakeven Units = 65,000/8.4 = 7738 units.

the breakeven point is the production point where the revenues are equal to the expenses. Organizations have to maximize their products beyond the breakeven point to optimize profitability (Utami & Mubarok, 2021). Therefore, Miami Bite business will have to sell more than 7738 units to make profits.

Source of revenues

The startup will outsource its revenues from various sources. The most common sources will include financial institutions like banks (Antunes et al., 2022). The initial business setup cost will be like a lease agreement; kitchen equipment and marketing will be financed using bank loans. The operating expenses like salaries, ingredients, utilities, and rents will be financed using shareholders’ contributions. The recurring monthly expenses will also be financed from plowed-back profits and catering services (Antunes et al., 2022).

Evaluation

The SWOT analysis reveals that the potential success and benefits of the startup outweigh the risks. Miami Bite’s diverse portfolio, strategic location, and several opportunities show that the business start-up will be feasible. Therefore, I will continue with the business venture. However, it is important to develop a comprehensive plan to mitigate possible risks, maximize strengths, and achieve long-term sustainability.

References

Aldianto, L., Anggadwita, G., Permatasari, A., Mirzanti, I. R., & Williamson, I. O. (2021). Toward a business resilience framework for startups. Sustainability, 13(6), 3132.https://www.mdpi.com/2071-1050/13/6/3132

Antunes, L. G. R., Vasconcelos, F. F., Oliveira, C. M. D., & Corrêa, H. L. (2022). Dynamic framework of performance assessment for startups. International Journal of Productivity and Performance Management, 71(7), 2723-2742.https://www.emerald.com/insight/content/doi/10.1108/IJPPM-07-2020-0382/full/html

Oveisi, N. R. (2021). Fast Food Restaurants: A Racialized Foodscape (Doctoral dissertation, The George Washington University).https://search.proquest.com/openview/73750ed5fb1fe4dfa460fb7308adcf43/1?pq-origsite=gscholar&cbl=18750&diss=y

Sacks, G., Kwon, J., & Backholer, K. (2021). Do taxes on unhealthy foods and beverages influence food purchases? Current Nutrition Reports, 10(3), 179-187.https://link.springer.com/article/10.1007/s13668-021-00358-0

Utami, Y., & Mubarok, A. (2021). Determining product or service pricing on msme using the breakeven point analysis method. International Journal of Economics, Business and Accounting Research (IJEBAR), 5(2).https://jurnal.stie-aas.ac.id/index.php/IJEBAR/article/view/2204