The Restaurant Industry in the United States: Business Plan for Kids Bistro - Case Study Example

?Business Plan: Kids Bistro Executive Summary The restaurant industry in the United s is highly competitive. There are numerous local, regional as well as international restaurant chains that vie with each other to grab a larger pie of the market share. Theme restaurants are typically niche players that satisfy the unmet needs of a particular segment. The present paper chalks out a business plan for a theme restaurant named Kids Bistro. The paper talks of the general market situation of the restaurant industry in the United States and details the company profile, organizational structure, and product portfolio of Kids Bistro. An attempt has been made to delineate the sales and market strategy for the restaurant. Finally the paper projects the cash inflows and outflows of Kids Bistro under different market conditions. Market Analysis Restaurants can broadly be classified into full service restaurants and quick service restaurants (QSRs). A full service restaurant offers a wide array of food and beverages options and table service. QSRs on the other hand have limited or no table service. The objective of these restaurants is to serve food to the customer as fast as possible. The concept of segmenting, targeting and positioning suggests that one particular organization cannot satisfy the needs of all the customers. Therefore different organizations strive to satisfy the unmet needs of a particular consumer segment in the best possible manner (Carpenter, 2005). The same concept holds true for the restaurant industry in the United States. Different restaurants strive to woo a certain section of the society. The prominent full service restaurants include Darden Restaurants, Dine Equity, and Brinker International Inc. Such restaurants generally appeal to the adults and families who intend to spend quality time together. Business meetings and small corporate events can also be held at such restaurants. Some of the QSRs which have an international presence and are also operating in the United States include behemoths like McDonald’s, KFC, Burger King, Taco Bell and Subway (Business Wire, 2006). While KFC boasts of its unique taste, McDonald’s positions itself as a family friendly, kids-oriented restaurant. Outlets like Baskin-Robbins, Domino’s Pizza and Dunkin Donuts are also frequented by kids. In addition to these outlets, there are numerous local and regional players that cater specifically to the kids or have a particular attraction for kids. Barrio offers a kids meal for $7. During some promos, the restaurant offers one free kids' meal with each adult meal that is priced $15.  Theme restaurants attempt to target a certain segment and indulge in niche marketing. Alice's Tea Cup, American Girl Cafe, Barking Dog Luncheonette, Big Daddy's Diner, Planet Hollywood, the Burger Garage and the Rainforest Cafe are some of the players in this market. Company Description The Kids Bistro will be a theme restaurant that targets children aged between 4 and 11 years. The decor and the ambience of the restaurant will appeal to the kids. Cartoon characters will be painted on the walls and light music will be played at the Kids Bistro outlets. The restaurant will use colourful plastic furniture. Additionally, gunny bags, booster seats and high chairs would be kept at the restaurant to seat other family members who accompany the kids. Kids Bistro will be operational six days a week including Sunday. The restaurant will remain closed on Monday. The theme for Tuesday and Wednesday would be ‘fancy dress’. While children would be encouraged to visit the restaurant in fancy dresses on these days, the staff would also be required to wear non-traditional dresses. Kids will be surprised to see ‘Superman’ taking orders behind the counter or ‘batman’ mopping the floor. The theme for Thursday and Friday would be ‘jungle’. On these days, the Kids Bistro will place numerous plastic trees and vegetations alongside the regular furniture of the restaurant. Kids will get to see snakes, birds and other insects perched on these trees. To add to the fun, staff donning the costumes of monkeys and chimpanzees will take orders. Every now and then elephants, Cheetahs and lions would make an appearance and roam around in the restaurant. The Ninja Warriors would be the cynosure of all eyes on weekends. The dinner and dessert plates, table covers, centrepiece, candles, balloons, paper cups and lunch napkins will have pictures of Ninja Warriors. Needless to say, the staff would also don the Ninja Warrior’s attire. Organization and Management The Kids Bistro will be a sole proprietorship firm. To begin with, the restaurant will open three outlets in New York City. The future expansion will be dependent on the popularity of these outlets. At this juncture, it is advised that the Kids Bistro outlets based in New York City should run for at least one year before expansion plans are implemented. Since Kids Bistro is a sole-proprietorship, the owner will be the director of the company and would be involved in each and every aspect of doing business. However, managers would be hired especially for the key functional areas which have been identified as procurement, human resources and business development. These incumbents would report into the director. These three functions will be centralized and would support all the Kids Bistro outlets. Three store managers would be recruited who would be responsible for the overall functioning of one particular outlet. All the staff of a particular outlet would report into the respective store manager. The role of Manger-Business Development and salespersons and their hierarchical relationship has been described in the section titled ‘Marketing and Sales Management’. The organizational structure of Kids Bistro has been depicted in Appendix 1 Marketing and Sales Management The target market of Kids Bistro is children. However, the communication would be aimed at children as well as their parents as the latter are the real decision makers especially in case of very young children. The advertising will rely heavily on outdoor media and would extensively use flyers and other printed material. The advertising effort would be heavily supported by personal selling effort. The sales force will be entrusted with the task of approaching individual customers as well as institutions like schools, day care centres, children clubs, summer and winter camps as well as sports arenas which cater to young children. The sales persons would carry brochures of Kids Bistro so that they can explain the concept to the potential customer in detail. The salesperson responsible for corporate clients will be required to make at least 5 sales calls in a day, while the salesperson for retail clients will be given a target of 15 sales calls per day. Kids Bistro will have a team of 6 sales personnel in total. Of these two will be responsible for corporate clients while the rest of the four sales personnel will generate leads for residential areas. The task of dividing sales territories to ensure full coverage of New York City will be entrusted to the Manager-Business Development. The sales people would be compensated on fixed plus variable basis. The incentives will keep them motivated to work hard, approach more people, generate leads and turn prospects into real customers. Kids Bistro will organize a painting and tattoo making competition for kids when the first outlet is opened. Food will be served free of cost to all the participants. The 1st and the 2nd prize would be Kids Bistro coupons worth $500 and $200 respectively. The contest will create the much needed hype about the restaurant. Kids Bistro will also get positive publicity if the media covers the event. The parents and the children will get a first hand feel of the restaurant and the quality of food served in it. The management of Kids Bistro recognizes the fact that providing superior customer experience will result in positive word-of-mouth. The restaurant will leave no stone unturned to provide the best quality food and service to its customers. This aspect would be the biggest marketing exercise for the restaurant, the benefits of which would be reaped in the long run as well. Service or Product line The Kids Bistro will have lots to offer for the kids. The menu items will include vegetable hot dog ($5), non-vegetarian hot dog ($7), chicken balls ($6 per plate), popcorn shrimp ($5.5), fried chicken fingers ($6.5), cheese sandwich ($7) and chicken sandwich ($8.5). The main course would include cheese pizza ($9), non vegetarian pizza ($10.5), macaroni ($8.5), pasta ($6), vegetable noodles ($5.5) and non-vegetarian noodles ($6.5). The desert section will have chocolate ($4) and strawberry ($5) pudding as well as ice-creams of different flavours ranging from vanilla ($2.5) to mint ($5.5). The gaming zone of Kids Bistro will be available on a subscription basis as well as per hour basis. The monthly subscription per child would be $75 per month. In case of siblings, the subscription would be $ 65 per sibling. The subscribers will have unlimited access to the gaming zone that will house games to enable kids rejuvenate physically and also test their mental faculties. The per hour subscription rate of the gaming zone would be $10. The Kids Bistro will also have a retail store which will sell small toys, key chains, pencils and crayons with the brand name ‘pia-pia’. The average price of these items will be $5. Pia-pia will be a private label for Kids Bistro. The name has been chosen as it is appears funny and will be easy for kids to remember. The Kids Bistro restaurant will also hold tailor made birthday parties for children. The package for the birthday would include food, access to gaming zone for one hour, and pia-pia return gifts for all the children who attend the birthday party. Kids Bistro will also decorate the party area with balloons and buntings. The birthday child will get a birthday gift from the restaurant if the number of guests exceeds 15. The booking amount for a birthday party will be $50. The cost per guest will be $22. Funding Request The entrepreneur owns commercial space in Delancey. One of the Kids Bistro restaurants will be opened in the Delancey building. There will be no rent component for this location. The founder of Kids Bistro will contribute an amount of $ 1, 00,000 which will be used for the smooth running of the restaurant chain. The other two outlets will be opened in Broadway and Varrick ST. The restaurants will be housed in an area of 1500 square feet and the rent payout will be $5,000 per month for each location. Therefore more funds will be required to meet the working capital requirements of Kids Bistro. The entrepreneur intends to take up a bank loan to meet such expenses. Financial Projections The details of likely expenses and expected revenue are shown below. A new business must be ready to face unexpected circumstances. There could a situation where the demand for the product or service exceeds the estimates. On the contrary, the demand may be lower than what the business had anticipated (Beesley, 2012). It is for this reason that three different financial projections have been given; pessimistic scenario, realistic scenario and optimistic scenario. Financial Projections ($) (Annual) Outflows   Inflows Rent 120,000   Scenario 1 (Pessimistic) Scenario 2 (Realistic) Scenario 3 (Optimistic) Salary 96000       Administration Expenses 50000       Salary of Director 120000       Advertising Expenses 25000       Bank Loan Repayment 72000       Painting & Tattoo Competition 20000       Total 503,000 425000 475000 525000 The expenditure on the painting and tattoo making competition will be incurred only once. Thereafter such events will be funded from the advertising expenses. The bank loan will be repaid in two years. Thus after two years the Kids Bistro will reach its break-even point even in a pessimistic business environment. Beesley (2012) avers that it is important to advocate your own business and grow it. Kids Bistro will strive to grow nationally as well as internationally through the franchising route. Appendix 1: Organizational Chart: Kids Bistro References Beesley, C. (2012). The early years of entrepreneurship: A step-by-step approach to surviving and thriving. U.S. Small Business Administration. Retrieved from http://www.sba.gov/community/blogs/community-blogs/small-business-matters/early-years-entrepreneurship-step-step-approa Business Wire. (2006). Identify the potential opportunities for growth in the quick serve restaurants market in the United States. Retrieved from http://search.proquest.com/docview/445210995? Carpenter, K. (2005). The essence of marketing strategy: Targeting, differentiating and positioning. CircuiTree, 18(11), 64. Retrieved from http://search.proquest.com/docview/209792247? Read More