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Grocery Shopping Business: Feasibility Analysis Essay

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Updated: Apr 20th, 2021

Overview

The business targets tourists visiting Saint Petersburg and the Clearwater beaches in Florida. Continuously ranked as America’s most beautiful beaches, the two beaches are consistently among the top tourist destinations in the United States. With a variety of tourist attraction sites, the beaches have a massive number of tourists all year round, who visit and enjoy the vast sugar-white sands, coastlines of the Mexico waters, and the tranquil Gulf breezes. Land developers have seized the opportunity to develop the land around the beaches and build beach houses, townhouses, and resorts. The houses built are ideal for families who come for family vacations as well as for individuals who come to break from their busy lives. Therefore, the essay examines the feasibility of a hospitality business that targets tourists, who rent resorts and townhouses in Florida.

The Business

Our business involves shopping for groceries and stocking them in fridges for the visitors so that by the time they arrive, they find them ready in their rooms. Working together with the townhouses and resorts attracts more customers to the townhouses, which equally means more business for us. Remarkably, most tourists visit Florida from around the world and not necessarily from the United States, they visit from places with different cultures and ways of life (Tang and Jang 556). Diverse cultures mean a different style in designing cities and towns. Tourists visiting from far where there are different cultures that need help in accessing the grocery stores and adjusting to the time zones. Those visiting from similar cultures require help since they arrive jet-lagged and not in a position to reach the grocery stores.

By adding our work in the townhouses advertisements, the visitors get prior knowledge of our work and place orders of their required groceries in advance. Tourists then receive a list of the groceries and their expected costs matched with the actual costs. Ali and Frew state that using technological advancement methods, tourists can book rooms and their desired products (14). By working with the townhouses and the resorts, tourists can order their desired groceries as they book their hotel rooms. Prior arrangements ensure that when a room is booked, we are able to see the required groceries for each room and when the tourists finally get to their rooms, they find everything that they requested.

Initially, every townhouse or resort that we will work with will be required to enter into a long-term contract with us. The stated amount of purchase is fifty dollars and the business will earn fifteen percent on every bill. The contract will also ensure that every time the townhouses are placing their advertisements, they will feature our work therein. Our expectation is that by working together, the townhouses will attract more customers, which will increase their competitive advantage over other town houses. With increased competition, we will find more resorts to work with and our business will grow.

The expected start-up capital will add up to five thousand dollars ($5,000). This amount will be enough as the expenses are very few. With only one small office to let costing one thousand five hundred dollars ($1,500), and only one computer, which will not be costly, as the manager will use his personal computer, the initial cost will be very lean. The legal fees and operating license will add up to five hundred dollars ($500). In addition, the money used to purchase the groceries will be paid when tourists book the rooms. The five employees will receive their wages at the end of every week, which is six hundred dollars each ($600%) and will total to three thousand dollars per individual ($3,000). The profits realized each week would be carried down to the following week.

Expected Expenditure Cost Units Total
Office $1500 1 $1500
License and Legal Fee $500 1 $500
Wages $600 5 $3000
Total $5000

Our business is cyclical as it serves tourists, who are holiday lovers. Vanhove outlines that the tourism industry thrives by selling its services, which are non-essential during holidays (13). Whenever the economy is in recession, it is likely that few tourists travel. Since a large part of the year has sunny days in Florida, tourists can travel and visit Saint Pete and Clearwater beaches any time of the year (Ming and Chen 11; Hollis 5). Having tourists all year round means that the country will earn revenue from foreign exchange and will keep the economy running. Moreover, doing business all year round is good for our business.

Once the business is up and running, it will require a little cost to operate because a majority of the products will be in the grocery and our work will only involve supplying the products as required by individuals. Since we are neither manufacturing nor finishing the products, our required prices will respond to the prices of the items in the grocery stores. According to Bidgoli, supplier prices are usually a reflection of producer prices (41). Therefore, in terms of pricing, we are not expecting to face competition as our prices vary with changes in the grocery prices. The availability of the grocery products will determine the prices placed in the grocery stores, which will in turn determine our prices.

We expect the business to break-even after being in operation for nine to eighteen months. We do not expect it to break even quickly because of the kind of work that the business is offering, which is a new concept and will take time for people to know about it. Again, selling the idea to townhouses and resort owners and convincing them to take us in it will take time. However, with time, our working relationship with these owners and referrals from those we have worked with will help us improve. Our long-term objectives are our primary focus at the start. In the end, we expect to work with every townhouse owner and provide our services to all the tourists visiting the beach.

Conclusion

We will not require any external financing at the start because there will be no huge spending. In the beginning, we will start with five employees, who will not require individual offices and equipment. They will report to the supervisor in the office every morning to receive direction on the deliveries to make. Shields assert that the wages of employees must be dependent on their performances (34). As the business expands, it will be important to hire more employees, move to a bigger office, and acquire more office space equipment (Elmendorf 7). The employees will report to supervisors in the morning for each day’s delivery assignment. Furthermore, the employees will be permanent and salaried from the profits of the business.

Works Cited

Ali, Alisha, and Andrew Frew. Information Communication Technologies and Sustainable Tourism. New York: Routledge, 2013. Print.

Bidgoli, Hossein. The Handbook of Technology Management. New York: John Wiley & Sons, 2010. Print.

Elmendorf, Douglas. Policies for Increasing Economic Growth and Employment in the Short Term: Congressional Testimony. New York: DIANE Publishing, 2010. Print.

Hollis, Tim. Florida’s Miracle Strip: From Redneck Riviera to Emerald Coast. New York: University Press of Mississippi, 2004. Print.

Ming, Qing-zhong, and Ying Chen. “Tourism Sustainable Development Action: Tourism Cyclic Economy and Tourism Industrial Ecology [J].” Tourism Research 1 (2009): 1-12.

Shields, John. Managing Employee Performance and Reward: Concepts, Practices, Strategies. London: Cambridge university press, 2007. Print.

Tang, Chun-Hung Hugo, and SooCheong Shawn Jang. “The Tourism–Economy Causality in the United States: A Sub-Industry Level Examination.” Tourism Management 30.4 (2009): 553-558.

Vanhove, Norbert. Economics of Tourism Destinations. New York: Routledge, 2012. Print.

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1. IvyPanda. "Grocery Shopping Business: Feasibility Analysis." April 20, 2021. https://ivypanda.com/essays/grocery-shopping-business-feasibility-analysis/.


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IvyPanda. 2021. "Grocery Shopping Business: Feasibility Analysis." April 20, 2021. https://ivypanda.com/essays/grocery-shopping-business-feasibility-analysis/.

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IvyPanda. (2021) 'Grocery Shopping Business: Feasibility Analysis'. 20 April.

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