You are a business consultant. A new client, Pat, recently received a bachelor's degree in nutrition sciences with a business minor. He has plans for a new business in which he will provide home-delivered food and formula for infants and young children.
Pat initially contacted you for help in writing his business plan. You have just received the following from Pat:
I got the idea for this business while studying at CU. In my nutrition studies at CU, I have been amazed to learn how many babies don't get the food that they should, even in today's world.
There seem to be many reasons for this. The top reasons seem to be simple lack of nutritional knowledge of the parents, laziness of the parents, and the parents being too busy to buy and prepare proper food for their young children in addition to preparing food for the older members of the household. In addition, I am the youngest of four children; my three older sisters have each had at least one child in the last 5 years, and I have seen them, all good intentioned, simply get overwhelmed with all that there is to do. Two of them work full time.
One of my sisters is a nurse, and said that she sees lots of parents of young kids who would "do anything" to be able to more easily make sure their kids get a good balance of really nutritious food.
So here is the idea that I alluded to on the phone: My business will work with the parent(s), the child's doctor, and a nutritionist to plan out a child's food requirements.
Then, we will prepare all the food needed by the child. We will deliver this at regular intervals, in most cases every 2 or 3 days, but always often enough that the food is always fresh when consumed. We will be able to handle special dietary needs (such as allergies or other food intolerance) and preferences (such as vegetarian diets and religious-based restrictions).
My company will deliver the food in "heat and eat" containers that are reused. The client does not even need to wash the containers; we will wash them all in special high-temperature equipment regardless of whether or not it appears that the client has already washed them.
Because you are an established consultant and know about business, what are your thoughts on how I should set up this business? For example, what are my options for different types of entities and their pros and cons? Like, do I need to incorporate it? Is there anything big that I haven't thought of?
I know that we have talked about some of these in our prior meetings, but here are some other thoughts and ideas that I have:
I want to be in charge of running the business, but I know that others will have more expertise in certain areas.
My sister (the one who is a nurse) is going to be involved in the business, but she can be a little pushy and bossy.
My parents are putting up about $100,000 to help me get the business going.
I don't want to have to mess with paperwork of the business itself because there will be enough of that with the clients.
I plan to run this out of my home, at least at the beginning.
Also, I will be using my own vehicle for deliveries, at least at the beginning.
I plan to have different programs for nursing moms vs. those who are not nursing.
I plan to include healthy herbal supplements as part of the programs.
I realize that as the business grows, I might have to put a more formal management structure in place.
I know this is an issue for later, but I am thinking that if it is successful, I would like to look into franchising it.
After reviewing both this scenario and the Resources for this week, respond to the following:
In a 1- to 2-page paper, outline your response to Pat.
What would you recommend to Pat, taking into account the above, and any other important considerations not mentioned for this business?