Step 4 · Research & analysis
Public chapterFeasibility analysis
Position
SwiftBite’s capped-fee model is conditionally feasible, not yet commercially validated. The standard-order model leaves a narrow positive contribution, but courier productivity, lawful compensation and contracted insurance costs remain unverified. Merchant recruitment can continue; paid delivery launches only after measured costs clear the contribution and driver-pay gates.
Feasibility report with market sizing
The founder owns the contribution ledger and courier settlement process. Amounts below use the venture’s stated dollar denomination; jurisdiction, currency, taxes and statutory obligations must be confirmed before contracts are signed.
| Standard-order settlement | Amount | Treatment |
|---|---|---|
| Food subtotal | $30.00 | Requested benchmark |
| Merchant commission | 12%; $3.60 (estimate) | Applied to food subtotal only |
| Consumer delivery fee | $3.99 | Fully disclosed before checkout |
| Consumer payment before tax or tip | $33.99 (estimate) | No hidden service surcharge |
| Restaurant settlement | $26.40 (estimate) | Before applicable tax handling |
| SwiftBite gross revenue | $7.59 (estimate) | Commission plus delivery fee |
| Published courier payout | $5.00 (estimate) | Proposed base; wage-equivalent top-ups additional |
| Payment processing | $1.29 (estimate) | Assumed 2.9% plus $0.30 (estimate), charged against full consumer payment |
| Variable software charge | $0.20 (estimate) | Separate from fixed license |
| Variable insurance allowance | $0.15 (estimate) | Requires broker quotation |
| Refund and chargeback reserve | $0.15 (estimate) | SwiftBite-funded losses |
| Variable support allowance | $0.10 (estimate) | Separate from fixed operations coverage |
| Total variable cost | $6.89 (estimate) | Rounded line-item basis |
| Contribution before fixed overhead | $0.70 (estimate) | Not profit |
Tips pass entirely to couriers and never offset base compensation. Tax collections are excluded from revenue; processing costs on taxes and tips must be added from actual settlement statements. Merchant settlement cannot absorb software, processing or insurance surcharges beyond the advertised commission cap.
Courier compensation is the binding constraint. Publish the base payout and adjustment formula before accepting courier commitments. Record availability, assignment, pickup, handoff, repositioning and attributable mileage in the licensed dispatch system. Reconcile earnings against all scheduled available time, including restaurant waits and empty repositioning; use any broader legally required definition.
| Courier-pay test | Planning value |
|---|---|
| Attributable distance per completed delivery | 3 miles (estimate) |
| Vehicle-cost allowance | $0.35/mile (estimate) |
| Vehicle cost per delivery | $1.05 (estimate) |
| Illustrative minimum-wage benchmark—not a local legal finding | $15.00/hour (estimate) |
| Required productivity at proposed payout, after vehicle costs | 3.80 deliveries/hour (estimate) |
| Productivity test used for sensitivity | 4 deliveries/hour (estimate) |
| Net hourly earnings at that productivity | $15.80/hour (estimate) |
The settlement formula is the greater of published delivery earnings or the applicable wage floor multiplied by covered hours plus attributable vehicle costs. Pay any shortfall with the regular weekly settlement, even when it makes contribution negative. Do not use unpaid waiting, tips or optimistic batching assumptions to pass this test.
The founder exports completed orders, refunds, processor charges, courier time and mileage into a locked Google Sheets ledger after each operating day. Reconcile every order to the processor and merchant payable; accrue insurance, support and licensing charges before reporting contribution.
| Operating variation | Contribution per order |
|---|---|
| Standard-order case | $0.70 (estimate) |
| Wage benchmark rises to $18/hour at tested productivity | $0.15 (estimate) |
| Vehicle allowance rises by $0.10/mile | $0.40 (estimate), after resulting payout adjustment |
| Software charge rises by $0.25/order | $0.45 (estimate) |
| Food basket falls to $25 | $0.25 (estimate) |
| Courier payout reaches $5.70 | $0.00 (estimate) |
Use a prominently disclosed minimum food basket rather than an undisclosed small-order surcharge. Quote exceptional-distance, redelivery and cancellation terms before checkout; do not dispatch an order whose modeled compensation requirement consumes its contribution.
The numbers
| Item | Figure | Basis |
|---|---|---|
| Fixed city overhead | $3,000/month (estimate) | Software $500; operations coverage $1,700; accounting, base insurance and administration $800—all estimates |
| Founder personal burn | $4,800/month | Grounding file; owner cash requirement, not delivery expense |
| Total monthly cash requirement | $7,800 (estimate) | Fixed overhead plus founder burn |
| Month-12 operating target | 50 merchants; 300 orders/day | Grounding file |
| Contribution at target | $6,300/month (estimate) | 30 operating days (estimate), rounded contribution |
| Cash deficit at target | $1,500/month (estimate) | Before tax, setup costs and unexpected losses |
| City operating break-even | 143 orders/day (estimate) | Excludes founder personal burn |
| Founder-inclusive cash break-even | 372 orders/day (estimate) | Same operating-day assumption |
| Starting capital | $85,000 | Grounding file |
| Personal-burn reserve | $67,200 (estimate) | Grounded 14-month runway assumption |
| Capital remaining for venture spending | $17,800 (estimate) | Before setup and working capital |
| Fixed-overhead coverage from remainder | 5.9 months (estimate) | No contribution, setup expenditure or working-capital requirement |
Decisions and trade-offs
| Decision | Adopted position | Boundary |
|---|---|---|
| Merchant pricing | Preserve capped commission | No pass-through merchant surcharges |
| Consumer pricing | Retain stated delivery fee for launch testing | Any change is prospective and explicit |
| Service footprint | Start within grounded launch zone | Restrict dispatch availability when density cannot support pay |
| Software | License dispatch and settlement tools | Require exports, time tracking and termination rights |
| Founder compensation | Show separately from city operations | Never describe operating break-even as personal cash sustainability |
The founder’s sales capacity supports recruitment, not an assumption of free dispatch labour. Operations coverage must be quoted against actual opening hours and order peaks.
Do this next
| Action | By when | What proves it worked |
|---|---|---|
| Founder obtains software and insurance quotations | Before vendor commitment | Signed pricing schedules and coverage confirmation |
| Local employment counsel reviews courier structure | Before courier onboarding | Written classification and pay-compliance opinion |
| Founder runs a paid dispatch pilot | Before public launch | Reconciled order-level contribution and time logs |
| Bookkeeper builds weekly cash forecast | Before launch spending | Merchant, tax and courier liabilities fully reserved |
| Founder reviews fuel benchmarks and broker renewals | Weekly; on renewal notice | Updated vehicle allowance and stress-tested payouts |
Risks in your situation
The unnamed jurisdiction prevents confirmation of minimum wage, contractor legality and insurance requirements. Personal vehicle policies may exclude delivery; neither courier declarations nor the modeled insurance allowance establishes coverage.
The launch radius does not establish route productivity. Restaurant delays, weak demand and empty return travel can erase the modeled margin. Pause affected service windows rather than underpay couriers or exceed the merchant cap.
Evidence gate
- ☐ Actual processor, software and insurance terms replace allowances.
- ☐ Paid pilot clears contribution after wage top-ups, refunds and waiting time.
- ☐ Courier classification, coverage and compensation receive local professional approval.
- ☐ Staffing quotations support promised operating hours.
- ☐ Cash forecast funds settlements without borrowing merchant or tax balances.
- ☐ Measured demand supports city break-even within the grounded target horizon.