A business plan for a restaurant business named Stake House - Essay Example

?Business Plan Table of Contents 0Executive Summary 3 1 Objectives 3 2 Mission 4 3 Keys to Success 4 2.0 Company Summary 5 2 Company Ownership 6 2.2 Start-up Summary 6 3.0 Products 7 4.0 Market Analysis Summary 8 4.1 Market Segmentation 9 4.2 Target Market Segment Strategy 10 4.3 Industry Analysis 10 4.3.1 Competition and Buying Pattern 11 5.0 Strategy and Implementation Summary 12 5.1 SWOT Analysis 12 5.1.1 Strengths 12 5.1.2 Weaknesses 12 5.1.3 Opportunities 12 5.1.4 Threats 13 5.2 Competitive Edge 13 5.3 Marketing Strategy 13 5.4 Sales Strategy 14 5.5 Milestones 14 6.0 Management Summary 15 7.0 Financial Plan 15 7.1 Projections 16 7.2 Projected Cash Flow 17 References 18 1.0 Executive Summary The report will describe a business plan for a restaurant business named Stake House. The planned restaurant will be located in Moorgate, London in the United Kingdom. The motivation for developing this business plan is to participate in a programme of “Channel Four”. The programme seeks to encourage young entrepreneurs and it will help the entrepreneurs to grow and will provide support to the business plan by shadowing the entrepreneur for one year. By keeping this factor in view, Stake House will intend to develop a proficient and profitable business plan in which it will be aimed to provide various kinds of burgers, sandwiches, pies and other top quality meals. The foods will be served with snacks and the customers will be provided with their chosen sauces and gravy flavours. The foods of the restaurant will focus on British traditions and will be based on the privileged recipes throughout the UK. The restaurant will also feature early bird menu as well as will comprise of numerous drinks to choose from. There will be space for almost 10–15 people at a time and will increase according to the progress and expansion of business. It is expected that Stake House will become one of the popular meal destinations in London area which will serve local people, especially young customers. 1.1 Objectives Stake House business plan will have three objectives, which are: To participate and seek for support from “Channel Four” programme in order to initiate the plan To become one of the popular and preferable meal destinations for young professionals and students To deliver high quality food with affordable rate To certify satisfactory transparency in food making process To increase the sales and to maintain a satisfactory profit Every strategy and decision taken in the business plan will seek to fulfil and accomplish those objectives, as it is related with the success of the Stake House. 1.2 Mission The concept of Stake House business is generated from the success of several informal restaurants in London area and high demand of quality meal for young professionals and students. Therefore, the restaurant will seek to provide accessible and affordable food, drinks, and breakfast and lunch menus. In due course of time, Stake House will establish itself as one of the favourite destinations of food for young customers in the metropolitan area as well as for outside visitors. It will be the mission of Stake House to serve high quality burgers, sandwiches and other meals with healthy contents and good taste. Besides, Stake House will also deliver excellent customer service so that customers become satisfied and loyal towards the restaurant. 1.3 Keys to Success The keys for success in this business are: Quality Products: Stake House will provide quality products to the customers by ensuring hygienic items and healthy components Effective Customer Service: Effective customer service is one of the significant elements for success which helps to increase the brand loyalty of customers. Effective Marketing: Stake House will market their product offerings through print media in order to attract potential customers. Efficient Financial Control: Financial control is necessary for making profit. Efficient financial control will help to keep the operational cost down and increase the profitability of business. Strong Business Administration: Business administration needs to be strong in order to control the activities of staffs and other personnel which will ensure increased productivity and successful business. 2.0 Company Summary Stake House will be a restaurant facility in London. It will be a wholly owned business operated by young entrepreneurs. The business would be based on quality food with special concentration on burgers, sandwiches and pies. It will provide people with the freedom to eat the food in the restaurant as well as take away to home and other places. In the lunch time, Stake House will provide an early bird menu from 12 pm to 4 pm. The aim of the business is to provide cultured, fresh and casual eating experience for Londoners and other visitors who frequently come to the city. The menu will be developed in such a way so that it is under the reach of typical young professionals and students. The business would not only provide new jobs for people but also generate good revenue though proper effort and strategy. 2.1 Company Ownership Stake House will be a privately owned business. The business will be possessed by four entrepreneurs who will be owners of the business with 25% share on profit or loss for each. The liability of the business will be upon the owners. 2.2 Start-up Summary As the restaurant business will be located near the university area, property taxes will be subsidised for the starting years. The owners will be liable for maintaining insurance which can successfully cover any losses of building, machineries and other assets of the business. Besides, owners will also have proper protection plan for loss or injury of any member in the business. As a start-up business, Stake House will require a decent amount of equipments in order to initiate the business activities. The start-up requirement of the business is as follows: Building including (cooking units and food serving units) Computer system with printer and internet connectivity Refrigerator, food processing machineries and equipments (such as knives, microwave, and espresso machine among others) Furniture (such as tables, chairs, cash register and other related equipments) Goodwill The start-up summary of Stake Business can be found in the following diagram: 3.0 Products Stake House will provide ranges of customised menu which is influenced by British and American ethnicities. Generally, the dishes will provide several cooking themes. Under Burger item, there will be six products which are: fenced burgers, chicken burgers, fish burgers, vegetable burgers, hamburger and cheese burger (Burger King Corporation, 2012). In sandwich category there will be five products such as: chicken sandwich, roasted sandwich, bacon sandwich, egg sandwich, and vegetable sandwich (Doctor's Associates Inc, n.d.). Stake House will also provide several types of pasties to the customers such as veggie pasty, chicken pasty, beef pasty and small pasty. Besides, these common items, the restaurant will have early bird menu for lunch time, offering smoked products, rice, breads, veg combinations, fresh fish, and meat products. The other products of Stake House will be soft drinks, tea, coffee, salads and dessert items such as cakes, ice-creams and snacks of several kinds for evening meal. While Stake House will concentrate on lunch and breakfast items for young customers, in future it will attempt to provide catering services for business expansion. In addition to this, Stake House will provide limited time offers and products for children also in order to hold the prospect for expanding the business towards family customer segments. The menu of Stake House will not be reliant on process technology and new innovations. 4.0 Market Analysis Summary Stake House will serve the people of Moorgate with breakfast, lunch and evening meal. The business will target two market segments which are young professionals and students of high schools and colleges. The customers will be attracted towards Stake House, as it will be a better substitute compared to other restaurants, campuses and cafes in terms of cost and taste. People will be attracted towards Stake House due to its customised menu and differentiation from traditional offerings which are available on other restaurants. The Moorgate area of London has been chosen as there are a few universities and plenty of other business houses. Therefore, Stake House will have the opportunity to serve the hungry employees after work and also to the students. Stake House will also appeal to the travellers as nearby there is a rail station and older citizens of the city. As the population is increasing, it is expected that people will seek for quality food with affordable cost; hence Stake House can be a successful business at Moorgate, London. 4.1 Market Segmentation The target market of Stake House will be a blend of local residents, regulars, travellers, students and employees. According to behavioural characteristics, the market of Stake House will be segmented in two categories which are students and young professionals. Students: The offerings of Stake House will be targeted for young students from colleges such as Tower Hamlet’s College, Green Valley College, and College of Law. The students certainly search for good food restaurants for enjoying other alterative foods apart from campus restaurants. The foods will be targeted for students of age group between 17 to 26 years as they are more likely to eat the fast food products. Young Professionals: There are several employment centres in Moorgate area. Stake House will attempt to provide their products to the working customer segment of age group between 24 to 30 years. The employees will be attracted to Stake House because of the quality products and more importantly the casual eating experience. Residents: Residents will be the customers’ segment who live or work in the Moorgate area. The Stake House business will target towards residents of age between 24 to 50 years with average monthly income of 3,000–5,000 Pounds. The residents will have the opportunity to take their meal away to their houses. Others: Apart from the above target segments, this restaurant will also target the visitors with cheap budget, conventioneers and regular travellers among others. The following graph will describe the planned percentage of target customers for the business: 4.2 Target Market Segment Strategy The two major target market segments of Stake House are students and young professionals whose eating behaviours and attitudes towards fast food products will be different. Therefore, both customer segments will react to dissimilar procedures of segmentation strategy. As students spend most of the time in college campuses, therefore they will be targeted by printed media such as handbills. On the other hand, young professionals are very much concerned about their jobs and spend most of the time in office or workshop. Therefore, they will probably be more attached to daily newspaper. Thus, newspaper media will be appropriate for appealing to young professionals as a communication channel. Besides, using newspaper will also help to increase the awareness of other people about the business. 4.3 Industry Analysis In the UK, economic recessions had inundated the restaurant industry in recent years by lowering the customers’ confidence. Apart from economic factors, other aspects such as governmental regulations, rules on wages, and food safety regulations among others had also affected the restaurant business in the UK. It has resulted in number of restaurant owners to stop their business operations. However, on other hand, it has also created opportunities for new comers to enter in the business with different strategies and prospects for existing players to expand their business in new segments (IBISWorld, 2012). Several analysts expect that restaurant industry will rebound from the impact of economic depression. In the year 2008, the restaurant market of the UK was almost 5,373 million Pounds and was expected to increase by next five years (Eatout Magazine, 2009). 4.3.1 Competition and Buying Pattern In the restaurant and fast food market, the key competition for Stake House will be from other multinational brands such as McDonald’s, Burger King and Subway among others. Stake House will face strong competition from pizza products which are much popular among students. Apart from these multinational brands, Stake House will have direct competition from other fast food restaurants in Moorgate area as well as cafes in college campuses. The buying pattern towards fast food product in the UK is relatively strong. According to a study conducted by BBC World upon 9,000 persons throughout 13 different nations in the year 2008, it was found that in the UK almost 45% of people desired to eat at restaurants due to good taste and quality. The most preferable among them are burgers, sandwiches and other snacks (Clark, 2010). 5.0 Strategy and Implementation Summary The business strategy of Stake House will be to emphasise on healthy, fresh and tasty food habits. Majority of foreign competitors will be incapable to provide similar product offerings of Stake House at the same price. Besides, it will provide customers the flexibility to eat or take home the meal according to their convenience. The strategy will focus on customer satisfaction. 5.1 SWOT Analysis 5.1.1 Strengths The major strength of Stake House is anticipated to be increasing population in the Moorgate city. As a commercial hub, it is expected that the population will increase in London and more people will require food with superior taste, service and lower cost. 5.1.2 Weaknesses The major weakness of the business might be the sudden changes in government policy such as tax rate or minimum wage rate which can impact on the performance of Stake House. 5.1.3 Opportunities London is considered as one of the fastest growing international cities. It is a major urban area with high growth of local and travelling populations in the United Kingdom. Therefore, there will be opportunities for Stake House to increase their business in other areas of London apart from restaurant business. 5.1.4 Threats The major threat of any business lies in the competitors’ strategies. There are several players in the restaurant business and their competitors’ strategies can possess threats for Stake House. Besides, the changing demand of people towards the product offerings can also become a threat for the business. 5.2 Competitive Edge The competitive edge of Stake House will be as follows: Cost: All menu of Stake House will be under affordability and purchasing power of target customers, i.e. within price range of 4.99 Pounds to 8 Pounds. Therefore, it will be easy for students and workers to purchase the items. Taste: Taste is one of the vital aspects of successful restaurant business. Stake House will only use fresh and good quality products to prepare meals for customers in order to ensure right taste which suites customers’ need. Customisation: The menu will be customised according to preference of the user. The burgers and sandwiches will be available in two sizes large and small due to different demands and purchasing patterns of customers. 5.3 Marketing Strategy In order to advertise the business towards customers, Stake House will use print media as it is appropriate for communicating with the target customer segment. Besides, seasonal discounts will also be provided as a part of promotional strategy. Coupons will be used for promotion which will provide customers to enjoy food with discounted cost. 5.4 Sales Strategy The main motive of marketing strategy for Stake House is to attract maximum customers towards the restaurants. However, in order to maintain them and make customers to repeat purchase, they need to be satisfied. The continuance of existing customer is much effective compared to attracting new customers. Therefore, Stake House will provide better service to the customers in the form of quality food and food offered within right time. Stake House not only will provide ranges of menu but will also intend to maintain a customer oriented environment where they can enjoy the meal. It can ensure future recognition of sales forecast. 5.5 Milestones In the long run, Stake House will try to accomplish the following milestones Generate adequate profit within two years of initiation phase Become one of most popular restaurants in Moorgate city of London in terms of taste Payback the loan amount within five years of business Expand the business in home delivery and catering business 6.0 Management Summary As Stake House is a small business, therefore it necessitates simple organisational structure. The owners will be responsible for any administrative action and all major decisions in the business will be taken by the owners. The chefs and staffs will be recruited on the basis of capability in their respected fields. There will be a General Manager who will control the activities of staffs and ensure customer satisfaction. General Manager will manage the requirements of business and assist other people in performing their duties. Employees will be provided motivation to perform well and their roles in the business will be allocated according to their capacities and strengths. The main aim for the management is to ensure that every staff performs their roles appropriately and displays satisfactory behaviour towards customers. In order to manage the productivity, performance of each employee will be assessed so that necessary steps can be taken in case any deficiency in performance is identified. 7.0 Financial Plan The financial plan of Stake House relies on significant suppositions which are displayed in following tables. The major assumptions taken in the financial planning are: Recovering economy after major financial downturn in 2008 No significant changes in restaurant market in the UK The capital requirement and money is adequate in order to maintain the operational activities Rate of depreciation is 10% in machinery and 6% in furniture The income tax is assumed to be 20% of operating profit 7.1 Projections Projected Balance Sheet First Year Second Year Third Year Liabilities Amount (In Pounds) Amount (in Pounds) Amount (in Pounds) Capital Investment 965,000 988,400 1013500 Net Profit/Loss -25,000 33,200 73,200 Total 940,000 1,021,600 1,086,700 Assets Amount (in Pounds) Amount (in Pounds) Amount (in Pounds) Land and Building 850,000 900,000 920,000 Cash in Hand Nil 30,000 76,500 Cash at Bank 9,000 15,000 Machinery 50,000 45,000 40,000 Furniture 40,000 37,600 35,200 Total 940,000 1,021,600 1,086,700 7.2 Projected Cash Flow Projected Cash Flow First Year (Amount in Pounds) Second Year (Amount in Pounds) Third Year (Amount in Pounds) Cash Received from Business Cash Sales 95,000 150,000 200,500 Expenditure from Business Operations Purchase 25,000 20,000 16,000 Payroll 40,000 45,000 47,000 Insurance 10,000 10,000 10,000 Bill Expenses 20,000 26,000 30,000 Expenses from Business Operations 25,000 10,000 6,000 Total Expenditure 120,000 111,000 109,000 Cash Balance -25,000 39,000 91,500 Tax (20%) Nil 5,800 18300 Net Profit/Loss -25,000 33,200 73,200 References Burger King Corporation, 2012. King Deals. Menu. [Online] Available at: http://www.burgerking.co.uk/menu [Accessed January 13, 2012]. Clark, S., 2010. Fast Food Facts and Figures. History of Fast Food. [Online] Available at: http://www.fastfoodnation.co.uk/fast-food-facts-figures.html [Accessed January 13, 2012]. Doctor's Associates Inc, No Date. All Sandwiches. Subway. [Online] Available at: http://www.subway.com/Menu/MenuCategoryItems.aspx?CC=USA&LC=ENG&MenuTypeId=1&MenuId=35 [Accessed January 13, 2012]. Eatout Magazine, 2009. Restaurant Industry Will Return to Growth in 2010. News. [Online] Available at: http://www.eatoutmagazine.co.uk/online_article/Restaurant-industry-will-return-to-growth-in-2010/6241 [Accessed January 13, 2012]. IBISWorld, 2012. Full-Service Restaurants Market Research Report. Market Research. [Online] Available at: http://www.ibisworld.co.uk/market-research/full-service-restaurants.html [Accessed January 13, 2012]. Read More