Plan for Indian Restaurant - Pearls Valley Restaurant - Case Study Example

 Introduction Starting a new business is always a challenging task and requires considerable effort and investment to successful start the business. This therefore means that the entrepreneurs must not only put in their skills and efforts but also invest the required funds to initiate a successful business. What is also however, critical to understand that in order to open the new business, it is important that a comprehensive preparation must be done so as to cover as much as ground as possible in order to cover the risks. This is also critical due to the fact that in start up businesses the overall risk is always greater than the expectations of the reward therefore an entrepreneur must have to take a 360 degree view of the environment within which it is going to operate. (Burns,2007). A business plan therefore is considered as a necessary document to prepare so as provide detailed and comprehensive information regarding the nature of the entity to be formed, the description of the company, its activities, the products and services that it is going to offer as well as the overall strategy to be formulated. A good business plan also includes financial analysis and reflects the overall requirement and projects of income and funds to run the business. This document will provide business plan for our proposed business i.e. Pearls Valley Restaurant and will present a comprehensive information and strategy to initiate the new venture of opening an Indian Restaurant. Company Description Considering the overall nature of the business, our new proposed business will be a sole propertiership and as such the business as well as the owner will remain the same person. A sole properiteriship is also called sole trader in which all assets and liabilities of the business are the personal liabilities of the owners. A sole proprietorship will be easier to formulate with lesser legal complications as well as fewer regulations to follow. This makes the sole proprietorship a better and more manageable option to exercise for the achievement of overall intended objectives. It is also important to understand that a sole proprietorship is relatively more easier to manage and owner can take charge of many important issues himself with less expenses. The proposed name of our new business is Pearls Valley Restaurant which will be an Indian restaurant catering the needs of Indian and Pakistani customers. This will be a small restaurant and as such the overall organizational structure of the proposed will be simple with owners managing the affairs of the business with relatively smaller input/help from employees involved in managerial activities. It is however, planned that as we grow in our size and our business improve in the future; we will formulate a partnership first and then will consider going private or public. This will however, depend upon how well our business grow in the future and whether we will be able to relocate ourselves into new areas and States. Overall our business structure will be simple and uncomplicated with sole propertiership as legal structure. Nature of Business Our proposed business will be based on the selling of Hallal Food of Indian and Pakistani origin to our target market. Our restaurant will be located after Preston Prison and will mostly target the Indian as well as Pakistani population. The most important characteristics of our business will be to offer food that is of high quality and is Hallal and as such will offer an opportunity to the Indian and Pakistani customers to enjoy their traditional food. Operations As discussed above that the proposed business will be a sole propertiership wherein owner will also be the manager of the business. Thus the overall management team will comprise of owner, two cooks and two servers whereas all the accounts, procurement as well as logistic responsibilities will be jointly shared by the owner and the servers. Procurement will be made through local resources however; we are also intending to procure some items from India and Pakistan that may not be typically available in UK. For delivering our food to customers, we will also be requiring a motor bike that will be used to deliver food and as such one driver will be required for this purpose. Kitchen will be handled by the cook and servers whereas overall affairs will be operated under the guidance of the owner. The Market As discussed above, this product will be targeted at the customers of Indian and Pakistani origin however, we will also be targeting Arabs and other English Customers including those who are in Preston Prison and in and around the surrounding areas. What is however, critical to note down that before making an attempt to define the market, it is important that a general overview of some of the factors that are more critical shall be discussed in order to take a broader view of the overall market and opportunities offered by the market: Political Environment We will be headquartered in UK and as such the overall political environment is conducive to the businesses. UK is one of the largest democracies of the world with strong ideology of supporting the free trade and liberalization. The recent efforts of the UK government to inject funds into the failing institutions is a proof of how State is corroborating with the economy as well as the institutions to engage into free trade. What is also significant to note that UK is probably the only country in the world whose political structure is designed in such a manner that it support the capitalism and various institutions to engage into any business practices. As such this political environment is therefore most conducive for the conducting business Economy of UK The current state of the world economy is not really favorable for the automobile industry as well as other businesses. The failure of many important and large organizations is a clear indication of how the industry can get affected by the adverse economic factors such as the current one. The overall decline in the consumer demand has been largely seen as a result of the current credit crunch which basically has shrunk the extension of consumer credit to buy things like cars. The year 2007 onwards has not been good for the economy of the world as well as the economy of the UK as UK is now largely perceived as going through strong recession with very slow recover. Though it is now estimated that the UK economy is recovering however, the overall pace of economic uplift is slow and as such there may still be serious challenges for the organizations to meet their profitability objectives.(Hutton,2010). Such economic situation may not yield into better market conditions for our proposed business as customers may be reluctant to eat out or avail the services of an Indian Restaurant. It is however, estimated that the economic slowdown will start to pick in 2010 and as such there are good prospects for the business to grow in future. Overall the legal environment is stable as the UK is one of the most de-regulated economies of the world. This also means that the overall legal environment is relatively conducive for conducting the business whereas there is also an strong emphasis on the regulations pertaining to corporate governance etc which firms generally have to follow in order to ensure that the organizations follow well defined code of governance and do not engage into behaviors which may put the interest of the shareholders at stake. Demographics UK is considered as heaven for the immigrants and as such the immigrant population from South Asian countries is relatively large. UK is a country with rough 60 Million population and Immigrants form one of the largest chunks of the overall population of the country. (bbc.com, 2006). What is however, significant to note that UK’s population is comprised mostly of the White British with new flow from the EU region? United Kingdom as a region is comprised of four large regions including England, Scotland, Wales and Ireland whereas most of the population is concentrated into the England and its urban areas. The overall age structure of UK’s population is however, not evenly distributed as majority of its population is concentrated into the age bracket of 16 to 64 years indicating that the overall population is based on those individuals who are inclined to more spending. Immigration in UK is continuously increasing over the period of time as the total number of immigrants is well over six million which comprises approximately 10% of the population.1 Such high ratio of immigrants therefore indicates that the UK market provides an strong incentive to target the immigrant population for new business ventures by targeting the individual characteristics of the demographics. (Slack, 2007). Further, it is also critical to note that the population of South Asians is increasing over the period of time as many South Asians and Asians are coming to UK for study as well as for work purposes. What is also significant to note that the South Asian population possess strong cultural values and as such prefer to remain in close proximity with their culture? This therefore also means that the businesses that specifically target such aspects of demographics to further understand the market. Product or Services As discussed above, the proposed business will be offering Hallal food of Pakistani and Indian origin to the customers of South Asian Origin. The restaurant will be located just after the Preston Prison with four tables and four chairs for each table. It is also critical to note that there will be free delivery to all our customers who can access us through our toll free number. The most distinguishing characteristics of our product will be the fact that it will be Hallal and based on the recipes that are in use in India. As such this restaurant will be offering Indian food to our customers of South Asian origin however; the restaurant will be open to all customers who are willing to improve their taste buds for the Indian foods. It is also critical to mention that the Indian food is often best known for being spicy and different from the traditional cuisines offered in West. Due to its overall spiciness and focus on the delivering most nutrionist food through vegetable based makes it one of the most famous foods in the world. The food offered by our restaurant will be different from the traditional American food which is mostly junk in nature and may not deliver the health value. Further, our customers will be able to get the food at relatively cheaper prices which they cannot otherwise eat in traditional Western Restaurants. As such our restaurant will provide an opportunity to our customers to not only enjoy healthy Indian food but will also offer them an opportunity to recollect their memories of their homeland. Our focus and marketing drive will therefore be based on providing psychological assuage to our customers by linking our food with the memories of their homeland and the overall taste that they used to enjoy while eating the same food in their homelands. It is also critical to understand that our food will be prepared by the specialized chefs in preparing Indian food and as such we will offer the variety that will not be available at any other restaurants in the whole country. Combined with our free delivery services, we will be able to offer our food to homes during lunch and dinner hours and as such those working class families that cannot afford to have time for preparing delicious Indian food can get the opportunity of eating that food at relatively cheaper price and with more ease. This means that our overall products and services will be offered to a very selected niche of customers belonging to Indian and Pakistan Origin. It is also critical to note that our product offering will be variable in nature i.e. we will be offering traditional menu along with conventional serving of food to our customers who will be visiting us in the restaurant. However, for our customers who will be ordering for delivery, we will be offering bundled products i.e. in the form of deals wherein we will be offering combination of different meals at various prices. The price will tend to increase once the overall items on the order list increase. This also means that the customers ordering higher quantities will be able to receive discounts on the quantity. We will also be offering our services for supplying traditional Indian Food such as Briyani on the occasion of Wedding or different religious occasions wherein Biryani and other Indian dishes are specially ate. Thus the overall range of our product offering will be variable in nature to suit the various needs of our customers. Target Market As discussed above that the target market for our proposed new business will be Indians, Pakistani, Arab as well as English Population in Preston Prison as well as surrounding areas. It is important to note that the there is large number of population living around this area and there is also no such restaurant in this proximity. It is also critical to note that our target market will be the families of the South Asian origin who are working i.e. both members of the family are working. This is due to the fact that we assume that the working class families will have lesser time to cook therefore they will be willing to spend on purchasing the food from our restaurant. Similarly, our next target market will comprise of the students who will be living alone and as such may require help in cooking therefore we will also attempt to attract South Asian students to use our restaurant for purchasing food. Overall our target market is based on the well defined criteria i.e. South Asian Population. Pricing Strategies Since the product offered will be simple and generic in nature therefore we will be charging price based on the cost plus principle. A premium of 25% will be added to cost of producing the meals. This is critical due to the fact that ours will be a generic product however, since it will be offered in a place where it is not usually sold under the normal conditions we are therefore of the view that we will initially be charging a price of over 25% on our cost. However, this premium will be further reduced as we achieve the volume and expand into new areas. Overall product offering will also include selling bundled products which means we will be offering pricing that is based on the different price slabs. The strategy of charging a premium of 25% over our cost will be only limited to the customers that visit our restaurant physically whereas bundle offers made for free delivery will be based on different pricing strategy wherein we will be offering discounts on bulk purchasing or purchasing different product offerings. Marketing Communication Since the overall scope of our business will be limited and as such we will be relying heavily on communication strategies that will relatively simpler in nature. It is therefore assumed that we will be employing direct marketing as one of our important marketing communication tools to promote our product. The promotional activities will be dependent on the advertisement in the local newspaper as well as we are also planning to promote our business through circulating pamphlets along with the newspapers delivered in home. For this reason we will be contacting the local hawkers of newspapers to distribute our promotional material along with the newspapers that are being distributed to the homes. It is however, critical to note that we will be targeting this communication strategy to our target market and all promotional material will be sent to the customers belonging to our pre-defined market segmentation. SWOT Analysis SWOT Analysis is one of the most critical tools that can be used to assess the overall strengths and weaknesses of the organization besides assessing the overall opportunities and threats. This is critical due to the fact that it provides and strategic outlook for the business and help entrepreneurs to devise their strategies accordingly.(Stutely,2006). Strengths 1. One of its kinds in the area offering a product which is not offered by others. 2. Relatively simple organizational structure which makes it easier to manage. 3. Islamic Hallal Food Weaknesses 1. Smaller size therefore may not be able to cater to wider market. 2. Larger dispersion of customers means the overall reach will be minimum. 3. Lack of capital may not allow the firm to enter into the market with relatively large resources. Opportunities 1. Untapped market therefore there is a lot of room to skim the market. 2. Large number of South Asian population provides opportunity to expand into new areas. Threats 1. Low cost of entry makes it easier for others to enter into the market. 2. Low switching cost will give customers more choice to look for new services. 3. Threat of new entrants is high due to generic nature of the product and no entry barriers. Budgeting and Finance There will be total investment of 20,000 GBP which will be contributed by the owner whereas no loans will be obtained. Most of the expenditures will be bourn by the owner. For details of the cash flows, annexed excel sheet will provide greater details. It is however anticipated that the funds invested by the owner may dried up and as such the business may require funding at the end of the year. However, it is also assumed that the owner will introduce new equity to fill any gaps in cash flows. Conclusion There is a great demand for the Indian Restaurant in Preston area as there are lot of Indians and Pakistanis living in that area. Opening the restaurant therefore will provide a comprehensive business opportunity to earn. Our proposed business will be a sole propertiership wherein the owner will take care of almost every activity. The target market comprises of the Indians and Pakistanis however the business will also target English customers. What is also critical to note that the business will undertake direct marketing strategy to achieve its promotional objectives? This will be done with the help of the newspaper hawkers who will be circulating the marketing material to our target market. We aim to charge a premium of 25% over our cost and as such will vary our prices depending upon the type of deal ordered by the customer. This also means that our specific customers such as students and families will be getting discounts for bulk purchasing. An initial capital of 20000 will be invested wherein it is also forecasted that the business may require fresh funding at the end of the year. It is assumed that the owner will contribute the funds rather than borrowing money from external sources. References 1. Burns, P (2007). Entrepreneurship & Small Business’,. London: Palgrave Macmillan 2. Hutton, W (2010) Despite the doom-mongers, the UK economy isn't a basket case after all The Guardian, Available: http://www.guardian.co.uk/commentisfree/2010/jan/03/uk-economic-recovery Last accessed 5th January, 2010 3. Slack, J (2007) Immigrant population swells by 1.4m in five years as British-born residents dwindle Read more: http://www.dailymail.co.uk/news/article-486669/Immigrant-population-swells-1-4m-years-British-born-residents-dwindle.html#ixzz0bpmRKm4e Daily Mail, Available: http://www.dailymail.co.uk/news/article-486669/Immigrant-population-swells-1-4m-years-British-born-residents-dwindle.html Last accessed 6th January, 2010 4. Stutely , R(2006) ‘The Definitive Business Plan: The Fast Track to Intelligent Business Planning for Executives and Entrepreneurs’, Financial Times/Prentice Hall (7) 5. UK population breaks through 60m (2006) BBC, Available: http://news.bbc.co.uk/2/hi/uk_news/5281360.stm Last accessed: 6th January, 2010 Read More