Starting Mountain View Restaurant at Arvada, Colorado - Term Paper Example

 TABLE OF CONTENTS Executive Summary 3 Business Description 4 Form of organization, Partnership and … 4 Business views of Mountain View 4 Success keys 5 Financial Success 5 Industry Analysis 7 Market Analysis 8 Competitive Analysis 9 Marketing Mix 10 Product and price 10 Promotion 11 Operational issues 11 Human Resource Requirement 11 Financial Projections 12 Conclusion 13 References 14 Executive Summary With a mission of providing the target market with quality fast food products and organic multicultural food and drinks, The Mountain View will be an exciting dinner and entertainment experience in Arvada in the state of Colorado. The management team fundamentally has very strong desire that Mountain View Restaurant should provide legendary hospitality to its customers who reach the Southern Rocky Mountain areas of Colorado from around the world and especially from other states of America. Multicultural food and drinks in warm and friendly environment were always of great demand in the Denver Area and especially in Arvada. The Mountain View restaurant will be highly attractive to many customers because the comfortable furnishing and warm sooth decoration will be a unique feature of our restaurant. The Mountain View will offer a variety of ethnic ingredients and recipes prepared according various countries’ specialties and therefore, the restaurant will be an international extravaganza. One of the main feature of the restaurant is that people from China would be able to taste Chinese while Indians taste Indian food and drinks at our restaurant. The management will be finding the best people and thus to develop a multicultural restaurant atmosphere through ongoing training and development programs to its employees. The main target group will be general public from Arvada (100,000 population) and other Denver Areas and tourists from others states as well as other countries. Young families with higher income also will be our focus as main target market. Financial success is most important and hence the management is planning to achieve a reasonable rate of net profits from the second year itself and relatively higher profits within the first three years. Business Description Form of organization, Partnership and Financed by Venture capital The Mountain View Restaurant will be operating as a partnership firm as it would be convenient for gaining sufficient capital from partners as well as from the financial institution based on the venture capital agreement. Partners can help the business as active team players as well as good role players in creative decision making. As it is going to be a large multicultural restaurant, more helps are needed from people who are both skillful and ready to invest for the project. The Mountain View will go for the financing option of venture capital. Venture capital form of financing is valuable as well as reliable and strong source of equity funding for new ventures. As Kanniainen and Keuschnigg described, the success of many startup businesses in the US since 1980s is mainly because of the increased availability of venture capital financing (p. 3- 5). Butler, Lockett and Ucbasaran argued that venture capital financing can play a very significant role in the economic growth by catalyzing business skills and accelerating technological progress (p. 47). According to Gladstone and Gladstone (2002), venture capitals very are similar to partnerships business forms (p. 11). Business views of Mountain View The Mountain View Restaurant will be targeting a market of general public from Arvada and other tourists who come from various places so as to offer quality services and multicultural food and drinks. To satisfy customers hunger and thirst and thus to achieve better reputation from them will be our basic goal of the business. One of the main objectives of Mountain View Restaurant is to serve the target market an excellent organic food and drinks so that they will be highly encouraged to celebrate parties, skits, acts, music and community dances. The restaurant will be providing both day and night services. The financial management aims at achieving gross revenue of more than $ 80,000 by the fourth month and to reach total sales of around $140,000 in the first year. The financial management also aims to increase sales by 60% in the first year and by 50% in the second year. Success keys The Mountain View Restaurant plans to design and develop food and drinks with finest quality ingredients and to approach its customers with quality services. The restaurant plans to provide recognition programs to its employees so that they will be treated well to encourage them to treat our customers well. The human resource management will be emphasizing on employee development as we basically focus on the fact that inviting in intellectual capital will be a better investment. The unique and innovative dining atmosphere with sophisticated design and decoration will be a factor to distinguish the Restaurant from the other restaurants, hotels and resorts that are in competition. Food quality and wide choices of international food and drinks being available in the restaurant will be a success key as it would attract large number of customers who are from around the world. As the restaurant will be well established with interior design, outdoor facilities and amenities, enjoyment with dancing and entertainment programs and better packed food and drinks will also form part of our success keys. Financial Success The Financial Management of Mountain View Restaurant is planning to generate reasonable amounts of profits with in the first few years of its business operation. Planning for the worst, but managing for the best will be our managerial strategy of financing. The Restaurant will be giving much emphasis on customer base and reputation and therefore the financial success and growth will be up almost rapidly toward the second and third years of business operations. The Mountain View Restaurant has an average running fixed costs of ₤30000 per month including payroll, rent and utilities for the first year break even. The monthly breakeven point comes to be ₤40000. Industry Analysis Today, hotels and restaurants have become an integral part of every community as we can see a range of hotel and restaurant industry firms from simple road side inns of the original colonies providing food and rest for the weary travelers to the modern steel and brick giants that are practically cities within cities (Henkin, 1). From individually owned business forms, now Hotels have grown to be multinational companies. In the today’s changing business contexts of America and other countries, cities, towns and villages are dotted with various and restaurant of various kinds, from small simple rooming facilities to large hotels and resorts providing sky scraper, sprawling and thousands of job opportunities as well. These shows how severe would be the competition in the restaurant industry. As in the case of most other industries, hotel industry is also facing extremely severe and fierce completion between firms. Hotel industry is always a fast growing industry as well. Due to changing modern living standards, people have less time and they feel tight time schedule for everything, including cooking at home. This has become the major reason behind increasing number of customers for hotels and restaurants day by day. The food service business is the third largest industry in the US, accounting for around $558 billion annually in sales, in more than 945,000 locations and providing job opportunities for around 13.1 million people. Restaurant industry sales are always forecasted to increase. The overall economic impact of the restaurant industry was expected to exceed $1.5 trillion in 2008, including sales in the related industries as well (resturantfundingsusa.com). The future of the industry is positive. Due to increased demand for fast food, multicultural food and drinks and dining experiences at joyful environments of dances, music and due to increasing tourism and developments, the Hotel industry has greater opportunities. Market Analysis As Fullen noted, a market analysis must be able to look at issues like food and health trends, competitive influences, economic conditions and population characteristics that have direct impacts on the sales volume of the restaurant (p. 105). The market of Mountain View Restaurant has been segmented in to general public from Arvada and visitors and tourists from around the world. The market also can be segmented in to three different psychographic groups namely comfort creators, celebrators and soccer moms. Comfort creatures are those white collar workers who are motivated by success and privilege and they will spend much of their time in the restaurants Celebrators are those who visit Colorado to celebrate special occasions like birthday, graduation ceremony, valentine’s parties, school days and teachers’ day programs etc. Soccer moms are family members who come in for after school milk and cookies with their children a\to relax and enjoy the times. The international visitors and travelers will be another target groups, also varying with seasons of tourism, and they will be provided with multicultural organic food and drinks. The restaurant will be concentrating on the above three major groups of the segmented market and also the international tourists by communicating our strategic mission and vision to the customers regarding the quality of goods and services being offered. Competitive Analysis There is always fierce competition between restaurants in this may lead us to put maximum efforts to increase the quality of goods and services. As part of facing the competition, the restaurant will plan Total Quality Management system so that a quality assurance department cal always ensure whether goods and services are up to the expected standard or not. The restaurant industry is relying on word of mouth communication and advertisement and therefore the management team of the Mountain View Restaurant considers it as a significant factor in facing the competition. Our satisfied customers are virtual assets. We plan to retain our satisfied customers for long term and to hold a better share of the market and also to take actions to increase the overall reputation. Marketing Mix Product and price More specifically, quality food and drinks are offered for moderate low prices. International and multicultural food and drinks and quality services will make our customers feel always welcomed. The food and drinks menu will be very simple but attractive to the customers. The menu will be changing with various new ingredients and styles of preparations. Our chefs will be having greater opportunities of designing and developing menu offering from many international special food and drinks of renowned styles. The restaurant will be looking for highly experienced chefs who would be able to train and teach other workers in the restaurant. The menu will be moderate sized and similarly moderate low priced. The menu will show low priced collections of ethnic, American and international food and drinks with the most common theme and strategic communication of healthy, low fat, zero cholesterol and natural ingredients. The restaurant’s quality assurance department will be responsible for assessing, checking and controlling any quality issues regarding ingredients being used in the food items. The quality assurance department will also look at how healthy and hygienic are the food and drinks items being prepared by the chefs. Promotion The Mountain View restaurant is planning to take most successful promotional strategies that can promote the customers and attract them more. The promotional strategies may include free services, season offers, free delivery and packaging services, music and dance offerings linked with secret friends program etc. Operational issues The restaurant will be operating 24 hours a day and seven days a week and providing various kinds of international specialties of food and drinks at various seasons or according to seasonal demands. The restaurant is planning to facilitate basic amenities like better car parking and child care rooms and also to facilitate more than 200 seats. Customers will be able to rest and relax at our restaurants and also to enjoy with family members and kids. Small family rest rooms and outdoor facilities also will be of unique experience to the customers. Apart from the lunch and dinner times, customers will be offered menus of fast food and they can select the ingredients as they require. The restaurant seems to provide customization option for the customers, because customers are able to select the ingredients for the food and drinks and it will be prepared by our chefs within as shorter time as possible. Human Resource Requirement The Mountain View restaurant is planning to invest in selective hiring and recruiting so as to find most qualified personnel who are experienced in hotel industry and are skilled with better communication with customers. The managing director and top management authority comprise of 4 managers who are responsible for managing others, decision making, strategy formulation, quality assurance, quality control etc. The middle management comprises of 3 managers who are responsible for supervising and controlling different departments and groups of workers. The third group includes 20 employees including chefs, waiters, and suppliers. As we are operating as partnership firm, partners will be joining with day to day operations of the business pertaining to decision making, strategy formulation etc. The restaurant is expecting to spend more than $800,000 annually as salary and wages for the management teams and employees. Financial Projections As there are high initial expenses of rooms, facilities, buildings, vehicles, seating arrangement, kitchen facilities, office set ups, and advertising expenses, the company will be able to generate a reasonable amount of profit only after few months. As the diagram above shows, the restaurant will face financial loss in the first four months. It will be able to generate a profit of $25,000 only during the fifth month. Even though profit during October, November and December will be almost on same level, the restaurant will be able to increase its rate of profit by 60% by the end of second year. Conclusion This paper is a model business plan for a restaurant in the city of Arvada in the state of Colorado. The Mountain View restaurant is planning to start by june 2010 with the owner capital of $25000 and with capitals being collected from the partners as well as venture capital financing institution. The main business objective is to provide unique and high quality multicultural food and drinks to Arvada community and international visitors of three major segments that are comfort creators, celebrators and soccer moms. References Butler J.E, Lockett A and Ucbasaran D, Venture capital and the changing world of entrepreneurship, Illustrated edition, IAP, 2006 Fullen S.L, Opening a Restaurant Or Other Food Business Starter Kit: How to Prepare a Restaurant Business Plan & Feasibility Study, Atlantic Publishing Company, U.S.A, 2004 Gladstone D and Gladstone L, Venture capital handbook: an entrepreneur's guide to raising venture capital, Revised edition, FT Press, 2002 Henkin S, Opportunities in Hotel and Motel Management Careers, revised edition, McGraw Hill Professional, 2000 Kanniainen V and Keuschnigg C, Venture capital, entrepreneurship, and public policy, Illustrated Edition, MIT Press, 2005 Restaurantfundingsusa.com, Restaurant Industry Overview, retsaurantfundingsusa.com, Retrieved from http://www.restaurantfundingusa.com/82/, 2010 Read More