Go Big or Go Home – Innovation
Project Details :
Operations Management, Strategy, Capital Campaign, Business Expansion
Restaurant and Catering Facility
Case: Innovation at Restaurant & Catering Company
IY Catering was a small catering company based in eastern Pennsylvania that wished to grow from a small single-operator organization to a full-service professional catering services provider. Since the restaurant and catering industries are very competitive with many different niches that could be served, we felt that their success would be based on how they could demonstrate innovation in the industry.
History: IY started in Newport News, VA in 1991 as Creative Touch as a partnership that provided baked goods and individual stations for small parties. There was no substantial growth in the organization; it maintained approximately 15 clients over the next seven years. In 1997, the owner moved to Eastern Pennsylvania, and began to promote the organization under its new name – IY Catering. During the first few years, the owner provided more consulting services, as an internal consultant to several of the top restaurants in the area.
Situation: In 2001, the owner changed focus as he was sought out to provide catering services for larger organizations. As the size and frequency of these requests grew, the need for more substantial facilities, equipment, storage, wholesale vendors and capital presented itself. The organization needed a solution that would address all of these concerns and help the owner make good decisions as to the organization’s direction. Additionally, the owner of the organization was a very community-focused individual and Christian. Therefore, in addition to seeking a solution to address the needs of the organization, he sought a solution that would help to serve the community where the catering facility would be housed.
Solution: We decided to build the firm on the premise of an innovation strategy, which required that we have a process for identifying opportunities, understanding what solutions and ideas exist in the marketplace finding gaps and developing a set of offerings that would allow the business to stand apart in the market space.
Additionally, we needed a business plan for the organization that would be functional for the organization, while meaningful for potential investors. Additionally, it was imperative to create a plan that was creative yet feasible and demonstrated realistic expectations. The following considerations made the plan a success:
· By being aware of the owner’s personal mission and vision, we were able to work with the owner to craft belief statements for the organization that would provide alignment between the leadership and the organization.
· With a clearly defined mission, vision and values statement, we were able to use them as a framework as we worked with the owner to develop a vision for the organization – both what it might look like when it opened in a new facility, five years from that time, and at some undefined future. Areas we considered included
- Types of products and services
- Markets served
- Average sale
- Financial goals
- Branding – what people thought of when they thought of IY Catering
- Community impact
Thorough market research for the organization gave the owner clear understanding of his competition, including:
- direct competitors (companies that sell the same or similar products to the same or similar markets),
- indirect competitors (companies that carried replacement products (products people would purchase in place of what he had to offer),
- competitors’ market positioning and branding (how the competition appears to the market)
- Market size and growth,
- potential influences on the market,
- demographic information
Having this information assisted us in helping the owner develop a pricing strategy that would work in his market, allowing him to promote the desired level of class and elegance without exclusivity.
The vision for the organization provided an innovative framework for the remainder of the plan and allowed us to create several models for the organization, based on several possible outcomes. This allowed the organization to adapt to different market and economic conditions and have the proper tools and information to make good decisions for the organization.
Benefits: The restaurant and food service industries have notorious failure rates. Without collateral, it was nearly impossible for the company to get the traditional bank funding needed to get started and continue to run. However, in this case, the plan was strong enough to raise enough capital to work with the local Economic Development agency to get into the facility, negotiate arrangements for the build-out, products and equipment.