Business Plan
Executive Summary 3
1.0 Introduction 4
2.0 Operations plan 5
2.1 Location and facilities 5
2.2 Business processes 6
2.3 Distribution and outsourcing 9
3.0 Organizational plan 10
3.1 Management 11
3.2 Mission 12
3.3 Purpose 13
3.4 Vision 13
3.5 Legal structure 13
3.6 Organizational chart 14
4.0 Marketing plan 16
4.1 Price 16
4.2 Product 17
4.3 Place 19
4.4 Promotion 20
5.0 Financial plan 21
6.0 Growth plan 22
7.0 Contingency and harvest strategy 23
8.0 Timeline to launch the plan 25
9.0 References 28
10.0 Appendices 29
Executive summary
Don’t we all enjoy the experience of fresh food at an outdoors restaurant? A full service restaurant that prepares fresh food to fit the requirement of the customer will give you the best experience. This business plan will fulfill the needs of the customer for a nice eat out at a full service restaurant while making profits for the investors. The founding team intends to put up a full-service restaurant that will offer a variety of quality food to the consumers. The restaurant will target all categories of consumers, but the majority of this will be the working class individuals. The team intends to adopt a low-cost pricing strategy to ensure that many consumers are attracted to the restaurant. The low-cost meals to be offered by the restaurant will be prepared in the most professional way considering all aspects of quality. Offering quality food at low prices will help the restaurant gain a competitive advantage in the hotel industry which is currently very competitive. The restaurant will offer full service to its customers to ensure that they get everything under one roof without having to move from one joint to the other. This will help in offering personalized services to the customers and increase the chances of gaining customer loyalty. With the high number of graduates joining the job market and the increasing number of the working population, there is a high demand for low-cost food among the working class due to the low-income levels. Since the existing restaurants have high charges for food, the founding team intends to offer an alternative to consumers where they can enjoy quality meals at a low cost. The restaurant will be part of the bourgeoning food and food service industry using a brick and motor business model and later adopt a franchise model to achieve its goals. This model is the best for the service industry since people need a physical location where they can enjoy the experience fresh foods at the fresh foods restaurant. The physical location of the business acts as a competitive advantage as it will be located at a location where there will be ease of access. The full service food restaurant will be easily accessible and within the first year it should be able to fetch an income of 200,000 USD within the first two years of being operational. The founding team will manage the team for a period of two years before acquiring franchises in other locations to manage. It will target the urban areas where the working class has a high number and offer both casual dining and fast food chains. The founding team understands the challenges they are likely to face in putting up the restaurant but are determined to overcome any challenges through effective planning. As a result, this report outlines a strategic plan to put up a full-service restaurant at a cost of $300,000 by the founding team within a timeline of six months after which the team intends to carry an expansionary plan when they have the right market and customer base.
Business Plan
Introduction
This report intends to outline a business plan for putting up a full-service restaurant in an urban site targeting the working class customers. The report gives an analysis of the operations plan for the restaurant involving product development, distribution and how services will be delivered to the patrons. An analysis of the organization plan is also outlined in the report giving the business model to be adopted by the restaurant, the design, processes and infrastructure to be used in conducting the activities of the restaurant. A marketing plan giving out the strategies to be used in creating awareness of the brand and informing people of an alternative dining point to the existing joints is as well outlined. The marketing plan intends to enhance customer relationship and ensure customer loyalty. The report also provides an analysis of the financial plan of the founding team to enable the team stick to the budget and prove to potential investors that the project is viable. A growth plan for the restaurant will also be outlined as proof that the business has the intention of pursuing a further investment strategy to bring in more revenue and increase the value of stakeholders. The growth plan also serves as a projection of the possible future expansion potential of the business. A contingency and harvest strategy for the business will be provided to outline the steps that the founding members and the management are planning to use in averting risk and taking advantage of any arising opportunities. The report further outlines the timeline to be taken to execute the plan and duration for several activities to be carried out during the implementation process. The steps followed will help the founding team and management achieve their objective of putting up a low-cost full-service restaurant.
Business Concept
The full service restaurant will deal with burgeoning food and food service. The restaurant will prepare fresh and affordable meals at the restaurant which will be prepared as per the needs of the customer. Target customers are the working class category especially those who have recently joined employment and are in need of affordable food. Food and food services will be provided at the restaurant. Delivery will also be made available to various places around the city for customers who will order the food through the restaurant website or the customer care department. The business will use the brick and motor business model which requires that there is a physical location from where operations will be carried out. Demand for food and food services at affordable prices is very high and the restaurant will tap this market to make up to 200,000 USD in profits within the first year. After two successful years managing the restaurant the founding team will franchise other restaurants to manage their business.
Industry Analysis
The business NCIS code is 722511 and will run under the name Restaurant Appetito. The restaurant industry made sales of 709.2 billion USD in 2015. The industry has been on an upward trend since 2009. However the industry has shown stability over the last 3 years an indication that the industry is in its maturity stage. The major players in the industry are the limited service restaurant which take up for 55% of the industry while full service restaurants take up for 45% of the business. Key players in the industry are fast foods. The market is flooded with restaurants scrambling for the same market share. The business will face a lot of competition from other restaurants that are more established. Restaurant Appetito will use its affordable prices as a competitive advantage. Other restaurants are highly priced which discourages new employees from eating at such places. High competition and the expensive cost of putting up a restaurant. The rising price of cost has become a major issue. Other issues include the large amounts of energy needed in order to keep the business running. Labor costs are also on the rise. Stiff competition and government rules are among other issues affecting the industry. Service restaurants offering affordable prices like ours with check below 3 dollars receive a profit of 3% per check.
The restaurant will target people aged 35 and below most of whom are in need of affordable food prices. Both women and women will be targeted by the business. Most of these people are looking to stabilize financially and most of these people have are new employees looking who are middle income earners. Fast foods are the major competition in the food service industry as well as the numerous restaurants in the city. The industry has shown tremendous growth over the years and has attracted numerous investors in the industry. The business will prepare meals at the restaurant which are healthier than those offered at fast food joints. The restaurant will also provide food and food service at customer friendly prices as compared to other restaurants. Service will be provided by professionals who will provide the best service for the customers. Services will be offered at the physical location of the restaurant. As a new entrant in the food and service industry, the business faces the risk of low customer turn up. The benefits of being a new business is that this can be an advantage and a chance for the restaurant to create a new impression for itself.
Founding Team
The founding team will include a maximum of four members. Every founding member should be innovative and with adequate expertise in both customer service and knowledge in the hospitality industry. Founding team members should be ambitious and with a keen eye for emerging trends. Each founding member will be assigned a specific task/s which will be evaluated against a certain timeline and the results. There restaurant will require labor to run the business. The company will require 30 employees. The Founding team will be responsible for the recruitment of employees.
Product/Service Analysis
The restaurant will offer fine dining services as well as wide variety of foods and beverages. Table service will also be provided at the restaurant. The founding team is currently looking for funding for the restaurant as well as a suitable location for the restaurant. Tasks to be performed include the search for startup capital which should be completed within a month. The search and identification of the physical location should take the founding team a maximum of two weeks. Furnishing will then commence for two weeks while recruitment is ongoing. The business should be launched within a duration three months from now. The restaurant will brand itself distinctively. This will act as a trade mark for the restaurant which will assist to keep competition at bay while at the same time ensuring that the restaurants services and products are easily recognizable to its customers. The restaurant will recruit a very vigilant and customer friendly staff. The restaurant will watch closely the foods that are most ordered and the number of repeat customers which will go on for two weeks. This information will then be evaluated to come up with sustainable trends for the restaurant.
Operations plan
The restaurant will be located in a busy city within a high-traffic building. The location of the restaurant is convenient for access by many people working in the city. The street has many offices that make it a good location for the restaurant. The region has a close proximity to banks, roads, hospitals and other supportive services that may be necessary for the restaurant. The restaurant will cover an area of 700 square feet divided into the dining area, service area, kitchen, store and offices. The dining area will have 25 tables, each table having, at least, four seats. The restaurant will be able to serve approximately 100 customers at ago. The restaurant intends to employ about 30 employees from cashiers, cleaners, service people, chefs, barristers, supervisors, managers, accountants, marketers and drivers. The employees will help in carrying out the activities of the restaurant effectively with ease. The customers will be able to enjoy complete meals at the restaurant and fast foods such as fries and burgers offered by other restaurants in urban areas.
The premises will embrace a comfortable and attractive décor that allows patrons to enjoy their meals without distractions and inconveniences. The professional employees of the restaurant will offer the patrons with unique food varieties and services to keep them coming back. The quality food and services coupled with low prices for food will differentiate the restaurant from other brands in the city that are offering such services at a high cost. Patrons will have a chance to watch their favorite channels from television sets that will be fixed in strategic locations within the premises and browse using the restaurant free internet. Magazines for healthy living and food will be available at a strategic location within the restaurant for patrons to enjoy reading while having a meal or drink. The restaurant intends to offer all the possible services that customers are likely to seek from different joints. Offering a variety of services and food will give customers alternatives to choose from instead of getting the item or service from a different restaurant.
The restaurant will have an ample environment where customers can relax while having their meals. The walls will be fixed with television sets and where the patrons can watch their favorite channels while enjoying their meals. The restaurant will offer free internet to the patrons to browse while in the premises. Air conditioning will be done in the premises to ensure that the temperatures are favorable for the patrons. The location of the premises is near institutions of learning such as universities, and this makes it a suitable place due to the possibility of a high number of patrons.
Business processes
According to Davis et al. (2013), a good operational plan for a restaurant is essential for the success of the intended plan. Many restaurants fail because of under-capitalization making it difficult for the restaurants to carry out their activities effectively due to financial shortfalls. The founding team intends to spend money on the essential commodities and services during the initial stages and consider an upgrade later after the business has stabilized. Proper financial planning helps the founding team not to fall short of capital and other resources in the operation of the restaurant. Expenses such as, salaries, purchases, inventory management, production, manufacturing and transportation services are prioritized during the initial stages. Prioritizing helps in ensuring that the business offers the intended services and products to the patrons to their expectations.
The new business will spend its money on priorities such as payroll and purchasing of ingredients. The other expenses to be incurred by the business include the overhead costs. The business will have a five percent margin left as working capital after incurring the operational expenses. The money will be banked for precautionary purposes until the business is ready to do an upgrade when it is stable. According to a report published by Forbes in 2007, it suggests that spending on essentials is the best strategy for startups. The report further explains that if a startup can have a five percent margin after incurring all the costs, it is a sign that the business is sustainable.
Not having the financial resources to salvage a restaurant from possible shocks during the initial stages can result in failure in business. It is, therefore, essential for startup restaurants to save any profits received in their initial years of operation so that they can handle any forms of risks and negative shocks. Starting to save with a bank or a financial institution during the initial stages helps the restaurants to develop a good working relation with the bank or financial institution. In case of any challenges, the restaurant will have a financial bailout from the bank to salvage its business. The founding team intends to start saving with a local bank from the first month of operation to build a good savings history that will warrant the restaurant a loan in case there is a need in future. Developing a good credit record is also one of the main aspects of the operations of the restaurant.
Some of the basics to be acquired in the initial stages of the restaurant’s operations include a license that will ensure the business operates within the legal framework. The restaurant will acquire menus and a technological system such as computers and software that will ease the tasks to be performed by employees. The point of sale machines, kitchen items, seats and tables will be some of the basics to be acquired in the priority list. Salaries for the employees, rent for the premises and utility costs are also major items that will be prioritized in the restaurant operational costs. The management will ensure that the best-qualified employees are hired to offer services to the patrons that visit the restaurant. Employee welfare will be addressed to reduce cases of turnover. This will help in reducing the cost that the company incurs concerning training and recruitment. When employees are motivated and taken care of well, they tend to deliver quality and satisfactory services to the customers. This will help in maintaining the customers of the restaurant and keep them coming back. Satisfactory services also serve as a major marketing aspect for restaurants because customers will always refer their friends, families and work colleagues to the restaurants. Word of mouth advertisement helps many restaurants to increase the number of customers and customer loyalty.
The restaurant will embrace the strategy of getting quality food products from suppliers at a low price because of purchasing in bulk. This will help the restaurant save on the cost of buying ingredients and materials to facilitate its daily operations. Paying the suppliers on time to avoid any inconveniences is very critical in the operations of any restaurant. The suppliers can make the patrons question a restaurant’s reliability. If patrons do not find the food on the menu for some days, they are likely to stop visiting the restaurant because their needs are not met. The founding team intends to build a good supplier relationship to help avoid such inconveniences from suppliers. The restaurant will offer special catering services for meetings, events and functions during off-peak times to ensure that more revenue is earned. The restaurant will also offer its customers with takeaway services so that the customers who do not have enough time to dine at the premises can have a chance to enjoy their meals from their point of convenience.
Delivery services for food to offices and places of residence will be offered to the customers. Food will be delivered to offices and homes at a low cost. Customers will have a chance to place their orders through the phone, email or an outlook platform for those who wish to be connected for easy ordering. Online ordering will save them the time of walking out of their offices and houses to get food from the restaurant. Many businesses are going online in their practices in contemporary practices. They are giving the customers a chance to enjoy the benefits that come with development in technology. Using an online platform to enhance smooth operations of the restaurant is an essential strategy for the management team to ensure a competitive advantage in the hotel and catering industry. The restaurant will liaise with suppliers and farmers to ensure that fresh food is used to prepare the final products. Fresh food products are highly preferred by many patrons. To have a competitive advantage in the industry, a restaurant needs to partner with stakeholders in the agriculture industry to ensure access to fresh food. This becomes necessary for players in the hospitality industry because of the high competition for food products. The restaurant will be open for six days a week to and only one day will be left for worshiping by the employees. Employees will work in shifts to allow for enough time to break out of work and engage in their personal and family matters. This will help in breaking the monotony of work and reducing cases of employee turnover. Many employees quit due to lack of enough time to attend to their personal and family matters. Allowing employees time to be with their families and friends helps in increasing the motivation to work.
The restaurant will be open from six o’clock in the morning to serve early breakfast to the customers that arrive at work early in the morning. It will be in operation until 9 o'clock in the evening to serve dinner to patrons who do not have time to cook in their houses. Many young professionals have their meals in restaurants including dinner. The restaurant intends to attract these young working class individuals who do not regularly cook in their houses.
Distribution and outsourcing
The restaurant will have a car to distribute its food products to the customers once they have placed their order through the mail, call or any other form of communication they may prefer. The delivery van will help the company to supply food to people in places that are not near the location of the restaurant. Some customers may not be willing to walk for a long distance within the urban center to get their lunch at the restaurant premises. Since the restaurant wants to cover a wide market scope, it will have a vehicle with trained staff who can deliver food to the customers at the convenience of their offices. Some customers will prefer an outside catering service for their events and special days; the restaurant will provide for such customers on arrangement so that they can deliver the services without interfering with the normal activities of the restaurant. Arrangement of distribution services will be made to ensure reliability and quality services to the customers.
The restaurant will outsource materials, equipment and skills in case it falls short of such at any given point. Due to the increasing consumer demands and developments in the hotel and catering industry, the management recognizes that there may be a challenge regarding materials or shortage of a particular skill to perform a given task. As a result, the management intends to have a mechanism to outsource such skills and materials from reliable sources to ensure that the activities of the restaurant are done in the most effective way. In a case of skills shortage because of new developments in the industry, the management will seek assistance from qualified professionals to train the employees of the company on the skill. Outsourcing training will help in keeping up with the advancements in the industry and remain competitive. The management will also embrace continued research on the best ways of outsourcing for both materials and skills to ensure that it keeps up with the market trends. A good supply chain management will be embraced to ensure reliability in the restaurant services and food products since shortage or lack of the food that customers need is likely to result in loss of customers. In addition to this, the management will ensure alternative suppliers are in place so as there are no inconveniences. However, a good and strong relationship will be developed between the suppliers and the restaurant for reliability.
Production Process and cost
The production at the restaurant will involve service and food production. Service will include the delivery of services to customers at the restaurant as well as the delivery of these services to customers who will require for the services to be brought to them. Food production will involve process involved in the preparation of products such as meals and beverages. This will require the expertise of chefs and service providers. The cost of production will take up to 30% of the revenue generated by the restaurant.
Suppliers
The restaurant will acquire direct groceries and perishable raw materials from farmers on a daily basis. The labor will be acquired from the large numbers of fresh college graduates. The company will also get its beverages from a soft drinks manufacturing company once a week. Other supplies such as detergents will be supplied to the restaurant once a week. Other food supplies such as rice which are non-perishable will be acquired from processors in bulk and will be ordered as per the consumption at the restaurant.
Inventory Management
The inventory will be managed with the use of a software. This software which will be available online will be used to keep track of sales, orders and deliveries. The reports will then be evaluated by the founding team in the presence of experts.
Quality Control
The restaurant will employ various quality management tools which will ensure that standards at the hotel are maintained. The cheek sheet will be used to maintain hygiene at the restaurant. Incentives such as commission on top of the basic salary will be awarded in order to service providers are maintained. The computer based system will also be used to keep track of the performance of the employees as well as track of the sales and orders at the restaurant.
Organizational plan
The restaurant will have a good organizational design that allows easy information flow from the top management to the service staff. Proper infrastructure will be established to ensure easy communication and coordination between the management, investors, employees, customers, suppliers and the different stakeholders. Twill help in the effective running of the business with minimum difficulties and development of a culture that embraces quality food and services for the customers to increase customer loyalty and word of mouth referrals.
Management
The restaurant will be privately managed by a group of experienced managers in the hotel and hospitality industry to ensure that the customer gets the best services, and the employees do their best. Management is an essential aspect in the success of any business, embracing a good management strategy will help the founders achieve the intended goals. The management team will take on the task of providing direction to the rest of the employees in the restaurant and building a strong relationship between the employees and the customers. The founding team will serve in the board of directors that will oversee the activities of the restaurant. This will be the top managing body for the business that will have a leadership role and keep the management in check. The board will have regular meetings to discuss the progress of the implementation process.
The team to be involved in the daily processes of the restaurant includes the general manager of the restaurant who will oversee the entire process and respond to any situation depending on the report received. A project manager will be selected by the general manager to help in the implementation process of the plan. The operations manager will help in ensuring all the operations of the restaurants are taking place according to the intended plan. The operations manager will work in hand with other managers and the give reports to the general manager for approval and discussion with the board of directors. The financial manager will work in hand with the project manager, the operations manager and the human resource manager to ensure that the project is implemented within the intended budget margin.
Since without proper financial management, there may be financial shortfalls for the restaurant and result to stalling of the entire project. Good financial planning is necessary to ensure a successful project implementation. Many projects fail because of poor project planning leading to financial shortfalls. The human resource manager will work in hand with other management team and the project manager to ensure that the restaurant has the best employees with the best skills to offer quality services to the patrons that visit the premises. Due to the high competition in the hotel and catering industry, it is essential for restaurants to have the best employees from chefs to the service people to ensure that customers are retained. If customers are not provided with quality food services and pocket-friendly prices, they are likely to seek other options somewhere else.
It is essential for the management to invest in the right employees who can give quality food and services to the customers to ensure loyalty. This will earn the restaurant a competitive advantage in this highly competitive industry. The human resource manager will ensure that the restaurant has the right personnel to perform the tasks of the restaurant. The project manager assigned the responsibility of handling the entire process of the project, will liaise with other managers in every department to ensure that the restaurant is established within the specified time and budget. The project manager will submit regular reports to the general manager for reviewing and assessment by the board of directors composed of the founding team with the help of professionals. This will be essential in ensuring that that any challenges that could hinder the intended plan are tackled early enough to avoid situations that may result to failure.
Mission
The management of the restaurant strives to build a lasting relationship between the restaurant employees and the customers through offering of quality food services at a low cost. Meeting the needs of the working class and the entire society with the right quality and prices remains central to in the operations of the restaurant.
Purpose
The restaurant has a sole purpose of ensuring that people in urban areas especially the working population have access to quality food services at an affordable cost. The restaurant intends to ensure that the urban dwellers save on the cost they use on food on a daily basis while ensuring that the quality of food they are getting is not compromised. Ensuring convenience in accessing food services is also one reason the restaurant is offering delivery services, outside catering and alternative means of ordering for food by customers. This will be essential in saving the customers of time they would haves spent moving from their offices and their homes to purchase food. Such services are offered to the patrons at a reduced cost unlike what the existing food stores and restaurant are charging.
Vision
The vision of the restaurant is to emerge the best full-service restaurant in the urban center offering affordable and quality services to the consumers. The company intends to see the working class and the other members of its target market saved from the burden of incurring high cost in food services without a compromise on quality and reliability.
Legal structure
The company will be operated as a private limited company offering hotel and catering services under the country’s hotel act. The formation of the company will involve an article of association signed by all founding members as directors. The liability of the members will be limited where only the assets of the company can be held in case of any legal liability. Shares will be distributed among the company directors based on equality and their investments in the company. Other stakeholders will also be allowed to purchase shares in the company where the board of directors approves to such. The company will have a working permit from the relevant authorities including the food and beverage licenses to avoid any legal liability. Employees will be entitled to insurance covers and all the benefits as the legal provisions demand to motivate them and also build on the credibility of the company.
Renewal of the legal operational licenses and medical certificates of the employees will be done on a regular basis to ensure that the company does not fall into the legal liability trap. The company will ensure consistency in the submission of its tax returns and transparency for a positive corporate image. Many companies have failed or ended up victims of the legal process due to noncompliance in tax returns submissions and lack of transparency. The restaurant will also ensure proper disposal mechanisms and use of biodegradable materials in packaging for protection of the environment. All the legal aspects will be adhered to in the operations of the company.
Personnel
Organizational chart
Key Management
At the top of the management is the board of directors comprised of the founding members and other stakeholders. Below the board of directors, the general manager will be tasked with managing the entire business on behalf of the directors.
Duties and Responsibilities
The project manager will be used to carry out the project of implementation by liaising with all the departmental managers and the operations manager. The operations manager will oversee all the operations of the restaurant. The financial manager will be involved in all the accounting, budgetary, tax and auditing activities. The human resource manager will be tasked with all matters to do with personnel in the restaurant. The departments will have administrative supervisors on the floor to help in the effective running of the business. The supervisors on the floor of the restaurant will ensure that the patrons are served to their expectations, and the service employees adhere to the guidelines of the company. The supervisors will then relay information to the operations manager who will share this information with other departmental managers and the project manager to ensure the implementation process is taking place as planned.
Duties and Responsibilities
Information will be shared with the general manager through reports that will be used in updating the board of directors on the progress. A good flow of information will be embraced by the different management and operational structures in place to ensure that reliable and credible information is used to make decisions at the top leadership of the company concerning the next step in the business. Transparency, ethics and accountability will be some of the aspects to be embraced in the organizational culture of the company. The management will ensure this through training and employee engagement programs for a sustainable business operation.
Marketing plan
The marketing plan of the company will be tailored to the business vision and purpose to ensure the intended objectives are achieved. The marketing strategies to be embraced by the company intend to build a lasting relationship between the company and its customers. This will help in increased customer loyalty and word of mouth marketing for loyal patrons who have trust in what the restaurant does. The marketing strategy will involve the four aspects of the marketing mix, which include price, product, promotion and place.
Target market
The restaurant will target customers who are middle class earners and are unable to afford prices from other restaurants. The cost of foods at other restaurants is considerably high for people who have recently joined the job market. Price is an essential aspect of any marketing strategy for a company. However, when this strategy is used a company should do it carefully to avoid price wars from competitors. The existing food outlets and hotels in the urban centers charge high prices for the food services offered to their customers. Not many customers can afford the prices charged by these food offering outlets in the urban centers making many working class and other urban dwellers to go without lunch or opt to have cheap food from places located far from the urban centers. However, such places that the workers are seeking food outside the urban center do not offer the quality food and services as compared to the outlets in the urban centers such as McDonalds.
The restaurant will offer delivery services within the urban center without additional charges for such delivery services. This will encourage office workers and companies to order food from the restaurant because they will not incur additional charges for delivery. However, the restaurant will charge a small fee for delivery services beyond the urban center to cater for the cost of fuel. The charge for delivery will be added to the cost of the food to be delivered by a small margin on the price. The restaurant will embrace competitive pricing, but the low-cost pricing strategy will be the main approach to the pricing process of the company. The management understands that this is a difficult task for the company, but it is willing to get small profit margins in return for a big customer base. Small profit margins that are regular may be equal to big profit margins made in intervals. The low pricing strategy will serve as an attractive aspect for customers seeking low-cost food services in the urban center. Despite the low cost, the quality of the food offered will be maintained at high levels. This will earn the company a competitive advantage over the existing players in the industry since many of them are offering high prices for the similar quality and targeting the high-profit margins.
4.2 Product
According to McKeever (2014), quality products are critical in enhancing the marketing strategy of a company or brand. Consumers prefer to have quality products and services that meet their needs to their satisfaction. Despite the low price to be offered by the restaurant for its food products, quality will serve as a major aspect of ensuring the patrons keep coming back. The restaurant intends to invest in the best chefs in urban cuisine. This will help in having quality and tasty food that will keep the customers yearning for more. Many of the low-cost restaurants are known for low-quality products because they have to reduce the quality for them to save on the cost of production. The strategy is used to earn high-profit margins by the restaurants but in many cases the restaurants have fluctuations in the profits because patrons consider them as an option when they do not have enough money to dine in the good restaurants. As a result, the restaurant intends to change this trend and believe that low-cost restaurants offer low-quality food by giving the patrons the right quality at the same low cost. The approach will help turn customers who consider low-cost restaurants as an option into regular customers who visit on a daily basis.
Many customers move from one restaurant to the other because they cannot find all that they need under one roof. Many of the restaurants tend to offer specific food and services while avoiding other lines of service. The restaurant will offer full service to its customers where the patrons can have breakfast, lunch and dinner at the same premises. The restaurant will also offer fast food services to both walk-in and takeaway patrons. Access to full service at the restaurant premises will attract many customers since there are patrons who want to have a specific place to get all their meal services. A variety of products is key for maintaining many customers in a restaurant, having a single meal continuously becomes boring to an individual. As a result, the restaurant will ensure that the patrons have an experience for new meals prepared at the best quality.
The restaurant will also embrace new product development through the provision of food products that are unique. Through creativity and unique skills of the chefs, the traditional food products will be prepared in the most attractive and interesting style that makes it tasty. The restaurant will seek to understand any developments and trends in the hotel and catering industry to ensure that the new skills and knowledge are used in quality and unique product development to keep up with the urban trend while maintaining the low cost of meals. This will make many patrons attracted to the restaurant. The unique product development will change the one-time visit customer into a loyal consumer of the restaurant because of the quality of the food offered. All aspects of quality will be maintained at all costs, and there is no single moment that the restaurant will think of compromising on the quality of the products offered.
The food industry has its challenges, and good product development needs to be embraced. Different customers have different tastes and preferences on the type of food they prefer. Urban areas being cosmopolitan have individuals from different backgrounds and cultures. This may determine the type of food they prefer. Being a full-service restaurant, customers will expect to get any type of food from the restaurant. The restaurant will endeavor to offer all types of clients with their preferred food products. The company will ensure that its production secrets are free from any irresponsible use by employees without the permission of the company. All the menus of the restaurant, recipes and any other thing used by the company in its production process will be protected from possible competitors. This will help the company in preserving and protecting its intellectual property. This will ensure the unique food products and services remain a secret of the company.
Unique marketing niche
Members of the public who have recently entered the job market urban centers and are in need of affordable meals. The restaurant will be located in a strategic place with a high number of offices and urban workers. This makes it easily accessible by patrons that are working around the region. Many of the workers around the region know each other and this increases the chances of word of mouth marketing for the services and food offered by the restaurant. The location has enough parking place for the patrons. The parking area is secured by a guard paid by the restaurant to ensure customer's vehicles are safe. Accessibility to the restaurant is easy because it will be located in a famous street with roads and pavements where people pass on a regular basis. The traffic at the location is high making the potential number of patrons likely to visit the restaurant high. Urban areas have a high number of dwellers from the high-income earners to low income earners; this makes an urban area a suitable location for the restaurant. Given the fact that the restaurant will depend on low-profit margins, a high traffic of people is necessary to ensure that there is a regular flow of the low-profit margin.
Business Identity
The restaurant will provide affordable prices while at the same time maintaining quality.
According to Bryman and Bell (2015), promotion is key in creating awareness, sensitization and sharing of information about a company or brand. The restaurant will embrace different promotional approaches to ensure that many urban dwellers recognize the brand. Advertisements in television, newspaper and radio will be a good strategy to reach a large number of the urban dwellers. Many working class individuals have access to newspapers, television and radio. Using these platforms to advertise the restaurant will help in familiarizing a large proportion of the urban dwellers of the restaurant. There is a high growth in the number of individuals using the online platform to get information. The social media platforms have gained relevance in the contemporary business practices making many advertisers use online marketing strategies. The restaurant will use the online marketing strategy to target a large number of potential customers online.
Since the restaurant will embrace online business in its daily operations, using online marketing strategies such as email marketing and social media platforms will be essential. Information moves faster online than in any other form, using the approach will enable the restaurant share the information to a broad spectrum of potential customers. However, the online business and marketing strategy have challenges such as swindles and scams that require a good security measure to avoid cases of fraud which are likely to torch the reputation of the restaurant. Seeking partnerships with established brands in the market will be a good strategy for the company to market itself to the public.
Endorsements from known personalities in the society on the services offered by the restaurant will help in building the credibility of the restaurant. This serves as a promotional aspect because people are assured of quality and good standards if a reputable personality such as a celebrity endorses a brand. The company will engage in corporate social responsibility activities such as protection of the environment through use of renewable and biodegradable packaging materials. This will show the brand determination to conserve the environment and protect the society in which it operates. The company will engage in sponsorship of healthy living functions within and outside the urban center in partnership with other stakeholders to ensure a positive corporate image. The restaurant will embrace diversity and services tailored to customer specifications by offering a variety of cuisines for the different customers who live in the urban areas.
Purpose of the marketing plan
The purpose of the business plan is to describe the position of the market in the industry and come up with a marketing strategy for the business within the next two years after its start up. The plan will show all the steps and strategies that the restaurant will use in order to ensure that the restaurant is able to make a profit of 200,000 USD within its first two years after start up. The marketing plan is supposed to devise ways in which the new restaurant will acquire some of the market share from the existing restaurants.
Plan to reach first customer
The founding team will get the restaurant first customers with the use of connections they may have in order to sell the restaurant to the public. The restaurant will also give a good first impression by delivering quality services that customers who visit the restaurant will come back. A positive representation of the business to the public will be maintained at all times. The restaurant will also create meaningful relationships with other players in the food service industry such as reputable soft drink manufactures in order to improve the credibility of the restaurant. Customer service will be a key skill for all the service providers who will form personal relationships with the customers.
Financial plan
Potential for repeat sales
The potential for repeat sales is very high since the restaurant will incorporate customer services in its business processes. The restaurant will also provide high quality services at affordable prices, unlike other restaurants which compromise price for quality and vice versa.
Ability to forecast accurately
The restaurant will be able to forecast into the finances of the business after the startup of the business since it is dependent on the absorption of the product by the consumers.
Break even analysis
The restaurant has high chances for profitability provided the restaurant meets the projected sales volumes and the set targets.
Estimate of year 1 & 2 sales
The restaurant will make profits of 200,000 USD within the first two years of operations. This figure is however dependent on the growth of the industry, market share, emerging markets and value.
Cash needs
The business will require a large cash flow of 300,000 USD to start the restaurant. This will include operational cost for the restaurant for the first two years.
Pro-forma income statement
The restaurant is expected to generate revenue of 100,000 USD per year within the first two years of being operational.
Good financial planning is essential in ensuring that the scheduled plan is implemented successfully. Capital shortfalls are major contributors to many fails in plan implementation. The management intends to ensure that the $300,000 money budgeted for the project is used carefully by observing the budget to the end of the planned implementation process. At the initial stages money will only be spent on necessities and basics to help run the business effectively with minimum difficulties. The rent for the premises, salary for the employees, ingredients purchases, utility expenses, maintenance and suppliers will be prioritized in the financial planning. The rest of the money acquired will be banked while the management plans for any necessary upgrades. The restaurant intends to have a profit margin of about 5% that will be saved in the initial stages from repeat sales. This is based on the feasibility study conducted on the projected profitability of the restaurant in the first two years.
The savings to be done are an alternative source of funds for the company in case the investors decide to exit. At the end of the first year the company will be able to sustain its operations independently. The savings will grant the restaurant a chance to build a good credit worthiness for any financial needs that may arise. Initial capital will come from the founding team who will invest in the company shares based on their contributions. The project manager will work in hand with the financial manager and the general manager to ensure that the expenses incurred in putting up and running the business are within the stated budget and no expenditure is done without approval. This will help in sticking to the budgetary provisions. The company intends to get about $200,000 in total sales within the first two years. This will enable the restaurant to foot the operational expenses, utility bills, rent and have working capital while doing savings of a small proportion of the money for financial security. A net income of $100,000 is expected out of the restaurant business in the first two years of operation. The small profit margin projected by the company is intended to ensure the restaurant adopts a sustainable, low-cost strategy for a competitive advantage.
6.0 Growth plan
Every business has a plan to grow and increase the amount of revenue that comes in from sales. The management intends to grow the business into a major entity that is recognized not only in a single urban area but also the entire country. There is a high competition in the hotel and catering industry with many players doing their best to remain at the top of the industry. Some have failed while others have thrived in the business of offering food services to the public. One of the major objectives of the management team for the restaurant is ensuring that the brand grows and becomes a major household name in the food service industry. The strategy adopted aims at increasing the number of patrons visiting the restaurant and growing the amount of profits coming in to help in the expansion of the business.
After the two years planned for complete implementation and monitoring of the business, the management intends to expand and have franchises across the country. However, this demands dedication to the marketing of the brand, offering the best quality food products and maintaining the standards at all times. Franchising can be a challenge to a brand due to vested interest by investors but the founding team intends to ensure franchises are offered with management and technical support to help in the promotion of the brand values and practices such as low cost and high quality. This will be necessary to maintain a good corporate image and ensure the growth of the business.
7.0 Contingency and harvest strategy
According to Katz and Green (2009), to ensure that the business does not become a victim of the negative threats in the contemporary business world, companies need to put in place measures that help in reducing the risk of loss. A savings plan is critical to ensure that a business has the financial security to enable it to come out of any shocks. The sales projections and profits for a company may not come out as expected due to different forces such as economic shocks, accidents and disasters. It is essential for a business to plan ahead of such uncertainties. In addition to the savings plan to be adopted by the company, an insurance cover will be taken to protect the restaurant against the risk of loss such as fire and fraud. In case of any accident that causes loss to the business, the insurance provider will help the business to get back to its financial position through compensation. Many businesses end up closing down due to lack of insurance policies to protect them against the risk of loss. Some avoid such policies due to the high amounts of premiums paid but forget the fact that the risk of loss may result in more damage than the premiums.
The management will adopt a cover policy from a reputable insurance policy to help in protecting the business from the risk of loss. Employees will also have medical covers and insurance covers for accidents to ensure that there is a minimum liability for the company in case of any incidence. The company will work in hand with a reputable hiring firm to get the best-skilled employees in case of employee turnover. However, the company will do its best to reduce cases of employee turnover by proving them with good remuneration, enabling environment, training and benefits. Partnerships with strong brands can serve as a source of financial bailout whenever the company is experiencing financial hardships.
The management will embrace such partnership as a marketing strategy and also as a contingency plan. Having a good credit record by paying loans on time is essential for financial access. As a result, the company will endeavor in building a good credit record in addition to the good savings plan. A developed relationship with the suppliers is critical in ensuring a sustainable restaurant business. If suppliers fail to deliver products on time, this will affect the entire operations of the restaurant. As a contingency plan, the management will establish a lasting relationship with the suppliers by paying them on time and addressing their issues.
The profits to be acquired from the business will be shared between the directors and any other investor or partner that puts in their resources in the company. The profits will be based on share contribution of the director, investor or partner in the capital of the company. This will help in ensuring fairness in the revenue share. Investors willing to opt out of the company can sell their shares to other members of the investment team or to any other individual as the board may approve based on the legal provisions. Additional investors will also be welcome to put in more resources into the company by approval of the board of directors based on the articles of association and the legal provisions. Wrangles and disagreements between investors will be solved through an arbitrary team to be established by the directors and if this fails, a legal platform will be embraced to handle such cases. There will be limits to the amount of shares an individual investor can purchase so as to avoid cases of the brand being bought out by a single individual. This plan will help in running the restaurant sustainably and embracing the necessary expansion measures.
8.0 Timeline to launch the plan
Six months planning period will be necessary to ensure that the entire process is well organized to meet the intended objectives. This will allow the founding team to prepared for the required finances and decide on the right project manager. The six months duration will be enough to seek consultation services from startup consultants and financial experts on the intended project. This will help in avoiding any cases of financial shortfalls and confusions that may result in failure. After the six months preparation process, a launch of the project will commence with each activity scheduled within a particular timeline for consistency. Priority activities and tasks will come first while the less prioritized ones will come later but this does not mean that the less prioritized tasks are not important for the business. The information is presented in the graph below as Cohen (2012) recommends.
The first stage before the entire process begins will be consultation with experts on startups to ensure that the right information is acquired. Putting up a budget for the process and determining how much it will cost becomes the second thing. Securing a premise where to conduct the business follows. After the premises have been established legal fees are paid and the rooms designed depending on the preference of the founding team in consultation with experts in the field. Equipment is purchased after and job openings advertised. The hiring process follows while the purchases are taking place to ensure all the equipment and ingredients are available. Employees are inducted after the hiring process and operations commence by the sixth month. The graph below demonstrates medium priority tasks as Ban (2012) points out.
After one year of operation, the business will embark on an expansion plan to ensure that the intended growth is achieved. Upgrading the facilities will be done and some replaced with new ones depending on the trends and requirements. The company will embrace an e-commerce strategy to a large extent and embark on franchising its name to reputable traders in the industry while offering technical and managerial support.
9.0 References
Ban, V. (2012). Analysis of the upscale/Fine dining sector in the restaurant industry. N.p
Bryman, A., & Bell, E. (2015). Business research methods. Oxford University Press, USA.
Cohen, D. L. (2012). Start It Up: Solo taps entrepreneurial acumen to expand startup-focused practice. ABA Journal, 98(5), 29-30.
Davis, B., Lockwood, A., Pantelidis, I., & Alcott, P. (2013). Food and beverage management. Routledge.
Katz, J. A., & Green, R. P. (2009). Entrepreneurial small business. Boston: McGraw-Hill Irwin.
McKeever, M. (2014). How to write a business plan. Nolo.
10.0 Appendices
Financial projection
