First World Delicacies - Essay Example

FIRST WORLD DELICACIES COMPANY COMPANY ADDRESS: PHONE: FAX: EMAIL ADDRESS: Legal Page Confidentiality Agreement The undersigned reader acknowledges that the information provided by _(YOUR NAME)____ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of __ (YOUR NAME) ____. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader may cause serious harm or damage to __ (YOUR NAME) ___. Upon request, this document is to be immediately returned to __________ (YOUR NAME) _____. ___________________________________ Signature ___________________________________ Name (typed or printed) ___________________ Date NOTE: This is a business plan. It does not imply an offering of securities. Table of Contents Section I 1.0 Executive Summary 2.0 Company Summary 2.1 Start-up Summary a) Table: Start-up 3.0 Services 4.0 Market Analysis Summary a)Table: Market Analysis 5.0 Strategy and Implementation Summary 5.1 Sales Forecast a) Table: Sales Forecast 5.2 Milestones a) Table: Milestones 6.0 Management Summary Section II 7.0 Financial Plan 7.1 Start-up Funding a) Table: Start-up Funding 7.2 Projected Profit and Loss a) Table: Profit and Loss ________________________________________ Section I 1.0 Executive Summary First World Delicacies (FWD) is a new era restaurant that focuses on fast, nutritious and, healthy food to the local downtown area in Dubai. The restaurant will specialize in a combination of fast cold or hot sandwiches and salads. It will also have specific recipes for the Dubai locals. The distinct menu offered by the FWD allows it to follow a differentiation strategy which will allow it to provide hard to find or unique choices to its customers. The FWD’s unique menu, excellent location and repeat business are the main keys to the restaurants success. The restaurant will basically be a sole proprietorship owned by Ursula. The initial capital investment will be $30000. An additional of capital of $20000 will be raised in short term loan. Market entry will however not be easy due to the high competitive nature of the industry. Further, the industry has low margins, periodic over capacity and low exit and entry barriers. The company will however overcome these challenges due to its excellent location. Further, it intends to draw into its main target market segment (business professionals) by providing a suitably upscale environment. For the restaurant to achieve the highest sales volume especially during its peak hours, it will seek to provide the customers with quality food and maximum number of services. The restaurant will have an effective and comprehensive promotion, advertising, and marketing campaigns. It will use word-of-mouth marketing to maintain customers. It has planned charge a slightly higher price on its product and services that the competitors to justify for its upscale establishment and also cover for the operating costs that are expected to be higher because of the expanded and differentiated menu. The owner estimates that the restaurant will have sales revenue of greater than $750000 by the third year. It will also be able to maintain cash flow that is healthy. 1.1 Keys to Success • Repeat business. Through the use of word-of-mouth marketing, all the customers would want to come again and again and even recommend us to other customers. • Location. The restaurant is conveniently located because it is close to the customers. • Special menu for the locals. The restaurant offers the right food for the business professionals. It will also a high enough price to establish credibility instead of limiting customers. 1.2 Mission First World Delicacies (FWD) is a new era restaurant that focuses on fast, nutritious and, healthy food to the local downtown area in Dubai. The restaurant will specialize in a combination of fast cold or hot sandwiches and salads. It will also have specific recipes for the Dubai locals. The distinct menu offered by the FWD allows it to follow a differentiation strategy which will allow it to provide hard to find or unique choices to its customers. All these will enable the restaurant to charge a slightly higher price that the customers thereby returning a significant profit. 1.3 Objectives The FWD aspires to achieve the following goals • Self-sufficiency cash flows by the end of year one • Sales of greater than $650000 in the first year • Sales volume of over $750000 by the third year • Provide the owner with the income together with income growth possibilities. • Full repayment of the loan by beginning of year three. 2.0 Company Summary Company Summary FWD is basically a restaurant which has both lunch and dinner menus. It also treats customers who come for dinner with a theme show. First World Delicacies (FWD) is a new era restaurant that focuses on fast, nutritious and, healthy food to the local downtown area in Dubai. The restaurant will specialize in a combination of fast cold or hot sandwiches and salads. It will also have specific recipes for the Dubai locals. It therefore opens its doors for business professionals, artists, and the elite class locals. Being a student, founding the FWD is a full realization of my dream of forming a personal business. All the real life experiences from close interaction with executives during internships will be put into the business to make it successful. 2.1 Start-up Summary The following table shows the initial financing and start-up costs. The owner will invest $30000 plus a shot term loan of $20000. The loan is guaranteed with individual assets. Another source of financing will be an interest free loan of $15000 from a family member which is to be repaid by the beginning of the second year. Requirements Start-up Expenses Equipment $3500 Legal $600 Rent $1400 Stationery $1800 Research and development $700 Miscellaneous $1000 Total Start-up Expenses $9000 Start-up Assets Cash Assets $35000 Other Current Assets $3000 Long-term Assets $27000 Total Assets $67000 Total Requirements $76000 2.2 Company Locations and Facilities The FWD will be located in 311 Road and Dubai-Al Ain Road (E 66) junction. Its facilities will include 150 person capacity eating area, front area, and backroom area in which the ovens, commercial stoves and refrigerators are stationed. 2.3 Company Ownership This is a sole proprietorship owned kind of business. It is owned by me, the president and the founder. Its registration will be based on that fictitious business name. Later on, it will be incorporated as the attorney advised based on its growth and conditions. 3.0 Services The restaurant will offer breakfast, lunch and dinner menu, drinks, take-out prepared dishes, and fresh cold cuts. Breakfast menu items include tea, toast, omelettes, coffee, eggs, yogurt and cereal. The lunch menu will comprise numerous cold cut sandwiches and prepared salads such as Greek Salad, Homemade Potato Salad, Italian Eggplant Salad, Watercress and Sesame Salad, and Caesar Salad. 3.1 Product and Service Description The staring menu that will be offered includes: Breakfast: Coffee and Orange Juice, ham, fruit, eggs, toast, yogurt, bacon and hash browns. Lunch: Entrees: Tuna Sub, Columbia Salmon Rolls, Chips, Turkey Sub, Roast Chicken Club, Ham and Cheese Sub, Chicken Soup and Organic Vegetable, Widbey Loganberry Tarts, Veggie Sandwich, Anacortes Seafood Burgers, Coos Bay Hot Crab Sandwiches, Hood River Fresh Apple Cake, and Smoked Salmon Sourdough Bread. Salads: Italian Eggplant Salad, Greek Salad, Homemade Potato Salad, Caesar Salad, Watercress and Sesame Salad, and Maury Island Cranberry Arctic Salad. Drinks: chai, coffee, Ocean Spray products, tea, and Soft drinks (coca cola and Pepsi products 3.2 Competitive Comparison FWD is faced with vast competition from every eating establishments or restaurants in the Dubai area. Major competitors include Cave, Ba Restaurant & Lounge, Moroc Lounge & Bar, Cucina Mia Restaurant, Massimos Italian Restaurant, and Bateaux Dubai. Prepackaged meals are offered to upscale by numerous substitute suppliers especially the grocery stores. 3.3 Sales Literature The main sales literature for the company will comprise flyers that will be sent through mail. Further, its promotional advertisements will be offered to the local businesses. Relevant information to be included in the flyers includes description of FWD’s distinct items, costs and comprehensive menu. In addition, delivery and address number will be included. 3.4 Future Products and Services New menu items will be introduced as profitability and time may permit. 4.0 Market Analysis Summary The company has three main markets: • Workers who have families hence looking for take away food so that they can take home after the workday. • Surrounding businesses who want to have business meetings while taking lunch. • International business professionals who want to take lunch, dinner or breakfast. The segments comprise people who visit or leave in the Dubai area. This will enable them to seek a restaurant or eating establishment for nutritious, fast and healthy food in a pleasant atmosphere. In addition, FWD seeks to cater for the increasing trend of the middle- class international business professionals who want differing cuisines. 4.1 Market Segmentation Total market potential of the market is shown in the table below. Market Analysis Table: Market Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Potential Customers Growth CAGR Domestic businesses 0% 300 300 300 300 300 0.00% Local workers 3% 10000 10600 10900 11300 11700 3.00% International business professionals 2% 17000 172800 17400 17500 17720 2.00% Total 2.45% 37500 38050 399200 40280 40690 2.45% 5.0 Strategy and Implementation Summary The company seeks to lever the specialized cuisines and the ideal business location into greater profits through higher prices and sales volume. It endeavors to satisfy customer needs. 5.1 Marketing Strategy The company seeks to familiarize the locals working around the location and the international business professionals to itself. Its local marketing strategy includes offering locals with flyers, signage, and grand opening party. 5.1.1 Promotion Strategy The best means of promotion to be used include local radio for locals. Further, the owner plans to use billboard, flyers, direct mails etc. most importantly it will use word-of-mouth to ensure continued purchase. 5.1.3 Pricing Strategy The company’s pricing strategy focuses on providing fast, healthy and high quality food that even has flair. Taking this into consideration, it will charge prices that are slightly higher that the competitors. 5.2 Sales Forecast The assumption made is that the sales forecast is manageable. The table below shows the forecast made. Table: Sales Forecast Sales Year 1 Year 2 Year 3 Breakfast lines $182000 $191000 $210000 Lunch and coffee lines $308000 $329000 $331000 Take-out dishes $160000 $170000 $179000 Total Sales $650000 $690000 $720000 Direct Cost of Sales Year 1 Year 2 Year 3 Breakfast lines $70500 $82400 $86300 Lunch and coffee lines $105500 $104600 $115200 Take-out dishes $64000 $73000 $78500 Subtotal Direct Cost of Sales $240000 $260000 $280000 5.3 Milestones The milestones with dates, budgets and managers in charge are shown in the table below. It shows the company’s emphasis on planning for implementation. Type your topic text here. Table: Milestones Milestone Start Date End Date Budget Manager Department Website plan 4/1/2014 3/1/2014 $1600 Ursula Website Website implementation 5/15/2014 5/1/2014 $10000 Ursula Website Recruitment marketing person 4/15/2014 3/1/2014 $2400 Founder Management Sales contacts and networking 4/15/2014 4/1/2014 $2400 Founder Management Initial market communication 6/15/2014 8/1/2014 $6000 Yahiya Marketing Bank loan 12/1/2013 4/1/2014 $0 Founder Management First corporate seminar 4/1/2014 3/31/2014 $2400 Founder Management Second corporate seminar 3/31/2014 7/1/2014 $2400 Yahiya Marketing First mainstream seminar 4/1/2014 7/1/2014 $2400 Yahiya Marketing Second mainstream seminar 7/1/2014 10/1/2014 $2400 Yahiya Marketing Totals $32000 6.0 Management Summary FWD being a small restaurant, its employees categories will be composed of busboys, counters clerks and kitchen helps. The company will assume fifteen employees in total, the owner-founder, four busboys, five counter clerks, and five in the kitchen. The owner is going to be present during the normal working hours, 7 a.m. to 8 a. m. five days in a week. On weekends the business will be in operation as usual however the founder will delegate duties. 6.1 Management Team The management comprises the owner who has some experience in professional cooking. They are able to create tasty and inventive recipes focusing on international and Middle Eastern cuisines, an experienced gained from working in the aunt’s restaurant. This local reputation was furthered by attending a short course on hotel and catering. Currently am pursuing Entrepreneurship & Business course. 6.2 Management Team Gaps The services of an accountant and marketing manager will be outsourced because at the moment there is no dedicated accountant and a marketing manager. 6.3 Personnel Plan The following table outlines the personnel plan in details Personnel Plan Year 1 Year 2 Year 3 Owner/founder $40,000 $50,000 $54000 Counter Clerks $63,000 $50,000 $61,000 Kitchen $38,000 $28,000 $30,000 Busboys $49,000 $57,000 $30,000 Total People 15 15 15 Total Payroll $190,000 $185,000 $175,000 Section II 7.0 Financial Plan The financial plan of this business depends on the initial investment of $30,000 from the owner, together with a five-year loan of $20,000, and another $15,000, 10-month loan from a family member. The loan is interest free. The business needs the initial investment for it to start up. Even though the rest of the plan is basically conservative, there has to be some money at risk. This bank loan of $20000 is secured by a personal property, real estate belonging to the founder. 7.1 Start-up Funding The business will be funded from an initial investment of $30000, interest free loan of $15000from the family member and a five-year loan of $20,000. These funding will be spent as follows: Start-up Expenses Equipment $3500 Legal $600 Rent $1400 Stationery $1800 Research and development $700 Miscellaneous $1000 Total Start-up Expenses $9000 Start-up Assets Cash Assets $35000 Other Current Assets $3000 Long-term Assets $27000 Total Assets $67000 Table: Start-up Funding Start-up Expenses to Fund $9000 Start-up Assets to Fund $63000 Total Funding Required $72000 Assets Non-cash Assets from Start-up $24000 Cash Requirements from Start-up $35000 Additional Cash Raised $4000 Cash Balance on Starting Date $39000 Total assets $63000 Liabilities and Capital Liabilities Current Borrowing $20000 Long-term Liabilities $7000 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $15000 Total Liabilities $42000 Capital Planned Investment Owner $30000 Investor $0 Additional Investment Requirement $0 Total Planned Investment $30000 Loss at Start-up (Start-up Expenses) $9000 Total Capital $21000 Total Capital and Liabilities $63000 Total Funding $72000 7.2 Projected Profit and Loss We are going to assume a little higher gross margin than the industry standards for the eating places due to the lack of a full slate of servers or meals. For simplicity reasons, busboy and kitchen employees are excluded in the cost of sales. Our newness to the business will make us to adjust the profitability into normal range especially by adding a quite large amount of an additional unitemized expense. The main reason of doing this is to give us a buffer for the inherent additional unforeseen expenses. This will enable the business to be more profitable than normal in case the costs don’t come up. Table: Profit and Loss Year 1 Year 2 Year 3 Sales $650000 $690000 $720000 Direct Cost of Sales $240000 $260000 $280000 Other Costs of Sales $35000 $34000 $47000 Total Cost of Sales $275000 $300000 $327000 Gross Margin $375000 $390000 $393000 Gross Margin % 57.69% 56.52% 54.58% Expenses Payroll $190000 $185000 $175000 Sales & marketing $80000 $56000 $75000 Depreciation $0 $0 $0 Rent $16800 $17000 $17300 Utilities $3000 $3000 $3000 Insurance $5000 $5500 $6100 Payroll Taxes $27000 $20000 $25000 Other $0 $0 $0 Total Operating Expenses $321800 $286500 $301400 Profit Before Interest and Taxes $53200 $103500 $91600 EBITDA $53200 $103500 $91600 Interest Expense $3700 $1300 $0 Taxes Incurred $23000 $48000 $36000 Net Profit $26500 $54200 $55600 Net Profit/Sales 4.08% 7.86% 7.72% References Brown, R., Gutterman, A. S., & Curry, J. E. (2011). A short course in international business plans: charting a strategy for success in global commerce. Petaluma, Calif, World Trade Press. 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