Mazud is a BC resident who has been involved with a part time entrepreneurship activity for the past two years. He maintains good relations with certain local restaurants and his customers to sustain a business involving picking up meals and delivering them to people. Being employed as a software engineer by profession, Mazud works from home with flexible employment hours which permitted him to sustain a side business. However, he is now finding it more difficult to find adequate leisure and rest time between his software engineering and his meal pick-up and delivery business.

The Beginning

It all started with his cousin Farnooshs new restaurant. As Mazud was helping advertise Farnys Wraps, he realized a lot of customers were asking about food delivery. Since Farnoosh was hesitant to register with DoorDash, Uber Eats, or SkiptheDishes prior to getting the business rolling, Mazud asked him if he was okay with delivering meals for a small fee (most of the interested customers were within a 5 km radius, so $2 to $3 fees were sufficient). Farnoosh agreed this was a great way to boost sales and he trusted Mazud, so they went ahead with the idea. Mazud would pay for the order when he picked it up and kept the money the customer gave him (for the order, delivery fee, and potentially a tip).

Accounting Meets Marketing

Many of Mazuds customers are older, so they appreciated his attention to detail with their orders and his friendliness. He gave them fillable weekly paper schedules to complete, which was a lot easier than having to call the store and place orders each time. This allowed them to pre-order meals and select delivery times, days, or weeks in advance. Plus, Mazud was always available on the phone and willing to pick up what they wanted. Mazud found that some customers appreciated him so much that their tips sometimes exceeded his delivery fees! By printing newsletters and putting them into local mailboxes (monthly cost of $50), Mazud has been able to steadily grow his customer base. He is wondering if other forms of advertising would help attract a broader customer demographic, in addition to the elderly customers he served. He requests your help in considering three different types of advertising he could use to increase usage of his service, specifically with young adults, and families with young children. He would like you to provide three options, their pros, cons, and how he might go about implementing each style of advertising to his business. Mazud would like you to conclude on which of the three might be the most impactful, considering the two demographics he is targeting.

Over time, Mazud was able to convince other small restaurants in the area to use his services. With more cuisine options, several of Mazuds customers decided to get all (or almost all) of their meals delivered by him! However, that meant multiple hours being spent in the morning, mid-day, and evening commuting between various restaurants and customers. Being so busy with a side job has resulted in Mazud regularly falling behind in his full-time job. To get a better understanding of Mazuds current meal pick up and delivery business, he asks that you prepare a SWOT analysis to help him identify his current strengths, weaknesses, opportunities, and threats. He would like you to come up with three points under each of these categories.

Mazuds Crossroads...

Year 1

In his first year of business, Mazud delivered an average of 12.5 meals per day (all Farnys Wraps) with an average delivery fee of $2.33 and tip of $1.20. Mazud owned an older car at the time, so those car related expenses amounted to about 30% of revenues. Mazud estimated he spent about 1.5 hours daily on deliveries in the first year. No calculations or analysis need be performed using year 1 figures. They have been provided for comparative and informational purposes.

Year 2

In the second year, the daily average delivery volume doubled, with an average delivery fee of $2.48 and tip of $1.18. With a newer vehicle in his second year, Mazud was able to reduce expenses to 25% of revenues (expected to be sustainable for five more years). Mazud estimates he worked an average of 3 hours a day in the past year. Mazud worked 365 days this year. If he were to make deliveries as a driver with UberEats, his hourly wage (labour cost) would be $15.00 an hour.

Mazud is looking at a couple of options going forward:

Option #1

The simplest solution would be to request his current employer to cut his working hours in half, which would result in a salary of $30,000 annually instead of the current $60,000. Mazud is strongly considering this option because he believes his employer will accept the deal. Also, Mazud hasnt gotten a salary increase in three years and isnt expecting any significant raises in the near term. This option will allow him to continue operating his food delivery business at 100% capacity while working part time for the software engineering company.

Option #2

Another option is for Mazud to hire his friend, Sameera. She works as a DoorDash driver so the training would be minimal. Additionally, she decides her own work hours so serving Mazuds customers well with precise timing wouldnt be an issue. Since Mazuds engineering work is slow in the morning and evening, he would continue to take care of breakfasts and dinners, while Sameera would handle lunch. To keep things simple (and fair), Mazud is considering letting Sameera keep all revenues for her deliveries since her help will allow him to continue running his service all day long. Sameera is ambitious and prioritizes efficiency over customer service, so she hopes to help Mazud increase the number of deliveries per day by cutting down on conversation time with his current clientele. Historically, lunch time has made up 40% of Mazuds total revenues. If he hires Sameera, Mazud is planning to continue making all deliveries on weekends (breakfast, lunch, and dinner). In this alternative, Mazud would be able to keep his $60,000 annual salary.