By Hussain A.

Analysis:
AREAS OF CONCERNS/QUESTIONS

S Staffing: Staffing in SETX at this level and industry is a huge battle that we face on a regular

basis.

o As we continue with aggressive growth, it become increasingly harder to staff.

o We have a very high standard for our industry for staffing. We refuse to lower our standard
for staffing, but the seasonal variables of our industry also affect our ability to retain ancillary
employees.

o We have a great core team with a low turnover rate, but the seasonal staffing is where we
struggle the most.

Since we are having trouble with staffing in South-East Texas and we cannot

compromise slightest to our standards, it would be riskier to experiment on this field as

the revenue generated is all primarily based on the Taste provided. Moreover, having a

major influence over catering, a minute difference in the service and taste that the public

may not like may go hay-wire. Still we can try with the idea of Automated ordering and

serving with minor experiments during the odd seasons and keeping up with the Chefs

standards. If proven help can be used to contribute during peak season as well
S Focus in Revenue Stream: Should we continue with the Childcare Food Management over

the next 3 months to 1 year?

o It is the stream of revenue with the lowest profit margin, but the most consistent.

Continuing with the Childcare Food Management would be a better decision as per my

knowledge. First of all, it reflects our attachment with the society with a continuous

growth. Secondly in the competitive market with a wide variety of opportunity, we have

to focus on constraints showing consistency as it is evident that it adds to only 8% of the

revenue, still the image that GLK would cover for this stream can prove indirect benefits.

GLK can look for improvement in this field with constrained investment.

2
S Liability and Lawsuit: We have a very high risk of lawsuit with further growth

o This issue, paired with our staffing issue, has left us extremely vulnerable to lawsuit,
specifically employment practice lawsuit.

o How do we avoid lawsuit, while still aggressively growing?

Another major tragic concern for an aggressively growing company is the possible
Lawsuit against any vulnerability. GLK to protect itself can try for rotational shifts for its
staffs and keeping up with the part timers to help in case of rush hours.The same is not
preferable for the Chef section, as this section directly takes care of the Identity of the
company.

3
S Operations: We have reached a point where we have outgrown some of our

internal operations.
o While we continue to improve in this area, it is generally the last area

for our company to catch up.

Example our product quality and customer service is always first, but

the billing and invoicing systems have not been perfected. This has a major effect on our cash
flow systems and can sometimes delay billing by a month or two. How do we improve this
while growing so aggressively?

A growing firm like GLK cannot rely on its old practices of managing its operations. It
has to generate ways to analyze the time taking tasks and to the bet possible way get it
automated. The Billing and Invoicing can be taken care by assigning the same to some
reputed financial firm which would charge some amount which could be considered
keeping in mind the losses that could be incurred with such a growth by only mere
delays.

4
S Cash flow: Keeping up on a daily basis
o With aggressive growth and seasonal revenue, we have literally

poured every amount of net income back into equipment, equipment

and more equipment. And.... We still need more equipment.

o We are a 95% debt free company, with the exception of one line of

credit that we have to assist with cash flow issues. We have no investors and started our
company with $0 in capital. And... I literally mean $0.

o We have also landed several large contracts and a few more in the making. With so many
demands to execute in the NOW, how can we strategically plan for the future and not over-
extend ourselves?

Initially any Food Industry needs huge investment till the point it gets developed totally
to run on its previous set platforms. Food Chain related companies are the most
intensive in this aspect. Though it is a good sign that more than 95% of the debt has
been resolved. Still it is recommended to keep a percentage of revenue. It may not
always happen that a firms revenue multiplies every year. It may come to stagnant at
one point demanding newer ideas to be incorporated probably with an investment. But
having no investor at aid, it is suggested to save at least 20% of the revenue earned.

5
S Equipment: Growing Structurally with our demands
o In regards to catering equipment, we have mostly outgrown most of

our transporation equipment. We are currently in the process of selling our 25Sfoot mobile
kitchen to purchase something bigger. Our average event has gone from 100 150 people to
300 800 people.

CTY Food Management, LLC MGMT 5350

o How do we meet the demands of catering for this amount of people? o Where is the
threshold of which you move from renting equipment to

purchasing it?
o Where do we store this equipment?

Keeping in mind the place that we are based(SETX) and the rent that we pay for each
equipment, there must be a balance between buying and renting out. Though investing
more on space than equipment would save depreciation, thus we should first evaluate
the equipment that are needed over a long run and are mandatory and those whose
requirement may vary over time and may not be required after a given period. And then
get the cost that would be required by each for their storage. Rent some of the
equipment, buy the major ones and invest the amount left to buy a nearby place for
storage.