Venture Concept No. 1

Opportunity

Currently, in the United States, there are over 4.12 million confirmed cases of coronavirus. This has had absolutely devastating effects not only on our public health, but on our education systems and on business industries of all kind, such as the tourism industry. One industry that has been hit very heavily by coronavirus has been the restaurant industry. Many people, including myself, have grown somewhat fearful of going to a restaurant during a pandemic. Due to the nature of restaurants and the food business, one must accept having to spend time indoors without a mask on while they eat and drink. This means risking exposure to air particles that may linger inside a restaurant.

In addition, in order to comply with social distancing guidelines, restaurants have to spread out their seating in a way that greatly reduces their capacity. At some popular restaurants, this has resulted in wait times in which people crowd the waiting lobby (unideal during a pandemic). Those customers who actually do come in are spending less money due to the economic recession of the virus, meaning the restaurants are making less money. In addition, many customers have stopped coming to restaurants due to financial strain, as cooking at home can often times be significantly cheaper. At the beginning of the pandemic, many restaurants expected a rise in delivery orders such as through ‘Uber Eats,’ but this never actually came to fruition due again to financial strain on households. On top of all of this, local restrictions and regulations limit restaurants on when they can and cannot open.

One of the central components of the effects on the food business, however, has been inventory. Because of the unpredictable rise and fall in cases we have seen, both nationally and locally, it has become a logistical nightmare to accurately predict demand. Restaurants do not know how many customers will walk through the door the next month, week, or even day. However, due to the nature of food business and supply chains, restaurants must order new food inventory on a fairly regular basis. While some restaurants have ordered less food than they needed (which is a problem in itself), I would argue most have overestimated their demand and ordered more food than they can use. Because all food ordered has an expiration date, restaurants nationwide now have excess food inventory that they will not use, that will expire, and that they must toss. This is considered a net loss for a restaurant’s income. At the same time, average Americans nationwide are sometimes struggling to find food items at their grocery stores.

Innovation

Because the opportunity or problem is restaurants having too much food and consumers facing food shortages, the innovation is getting food from the shelves of restaurants into the hands of consumers at a reduced cost. In this sense, a business targeted at implementing this innovation would have plenty of potential. This business could go about this in two ways. The first way is to supply and assist the restaurants in helping them resell their own inventory market-style to consumers. This would include supplying and constructing shelving and structures on-site to both display and package food items consumers could purchase and take with them. Throughout the pandemic, there have already been restaurants who have taken it upon themselves to do this. Certainly, a specialized firm can assist them in this task. Another way a business could go about this would be buying the unused inventory directly from restaurants and reselling those items on their own. This would be preferable to restaurants to reduce the amount of time unused inventory sits on their shelves. This would also benefit the specialized firm in that they can resell the inventory at their own prices and quantities that they prefer.

Venture Concept

This innovation explicitly solves the opportunity mentioned above. It would be a win-win for everyone; consumers now have another source of food that would be sold to them at a reduced price. For restaurants, they would be cutting their losses and bringing in an extra stream of income that is extremely important during a pandemic. For those reasons, I would not think it would be too difficult to get both restaurants and consumers on board. The secret sauce for this business is the innovation for the opportunity that hasn’t yet had an innovation.

Because this a new firm that specifically functions during coronavirus, there isn’t necessarily any direct competition as there has been no innovation yet to address this opportunity. However, indirect competition includes food sources such as grocery stores or markets. While things such as packaging or distribution wouldn’t necessarily be important, there are a few concepts that would be important. Primarily, this would be price.

Because restaurants would otherwise waste their unused inventory and collect $0 in revenue from it, restaurants would be willing to resell their unused inventory at a lower price than what they purchased it for. Therefore, a specialized firm can obtain this inventory at a reduced cost to them. In the same sense, it can then resell these items direct to consumer at a reduced price to the consumer, enticing them to purchase from the specialized firm rather than grocery stores. A business attempting to accomplish this would need to be fairly big and spread out to reach as many restaurants and consumers. This would mean having several hundred employees as soon as possible. In 5 years, unfortunately, I don’t believe this business will still exist as it is time-sensitive in nature and limited to this crisis. This would certainly help me grow as an entrepreneur, however. Following this opportunity, the next venture may be seeking a similar business model to help the tourism industry.