Sky Delight Business Strategies - Assignment Example

 Sky Delight: Business Plan 1 Executive Summary Sky Delight is an exclusive feast meant for anyone who desires to transform an ordinary meal into a thrilling moment that will leave a lasting impression on their guests. Sky Delight is a great place to eat, combining captivating atmosphere with excellent food. The mission is not only to have sumptuous food, but have efficient and friendly services too, because customer satisfaction is of paramount significance to us. We want to be the ultimate choice for all families & singles, young or old, male or female. Employee welfare will be equally important to our success. We shall ensure that all our employees are treated fairly and with the utmost respect. We want our employees to feel a part of the success of our Restaurant. "Happy employees make happy guests". We are firmly determined to combine menu variety, atmosphere, ambiance, special theme nights and a friendly staff to create a sense of 'place' in order to reach our goal of overall value in the dining and entertainment experience. We want fair profits for the owners, and a rewarding place for employees to work. Sky Delight will use a crane to elevate the furniture, crew, food and 27 diners as high as 180 ft up. The company will also built a separately-supported "flying stage" to hold a piano and musicians so the guests can enjoy live entertainment while they eat aloft. The structure of the eatery will be portable and will need a space of almost 1500 sq.ft, hence can be held anywhere (sea side, public place, historical sites and fields etc). The company's suspended table measures 26 ft x 19 ft (8m x 6m) and weighs approximately 17,600 (7983.25 kg) lbs fully loaded (11,000 lbs (4989.6kg)unloaded). Eight cables, connected at points on all four sides, bind the table to a crane. The company has planned to work with safety agencies before introducing the concept to the public. During inspection, seats will be overloaded with weights of more than 330 lbs (150 kg) each. Diners will be locked into their chairs by six-point seat belts that operate from the back side of the seat so they cannot disconnect themselves. The company will certify its system for safety by European-based testing agency. Sky Delight will offer a stupendous New Asian-Swedish menu with a touch of Arabian influence in modish and comfy atmosphere. The menu is enthused from different cuisine's specialties and is bound to appeal to a wide and varied clientele. You can get Swedish specialties like herring and meatballs, choose a red curry chicken with basmati rice, or an Asian grilled shrimp with spinach, tofu and black bean sauce, a special pasta dish entree every day, plus the 'all American meal' such as barbecue beef ribs and baked beans. The menu will change every 3-4 months, keeping the favorites. All these mouth watering delicacies will be offered at competitive prices. The restaurant will open seven days a week, serving from 6 pm to 2 am. Sky Delight is available for a session of 8 hours. It can be divided or personalized according to the client's wishes. Sky Delight accommodates 27 diners around the table at every session, with a chef, a waiter and an entertainer. Our management team will comprise of personnel holding experience of being associated with restaurant management. According to the financial projection we will require $ as start-up expenditure. We shall generate Rs. 7, 20, 00,000 in sales by the end of year two and produce net profits by the end of year three. Sky Delight's objectives for the first three years of operation include: Keeping food cost below 35% of total revenue. Keeping employee labor cost between 24-29% of revenue. Achieve average sales between Rs\- 60,000,000-90,000,000 per year by the end of fourth year. We are looking forward to make a difference in the world of eateries by producing customer delight, beyond and above of what they experience on land. “We don't want satisfied customers, we want delighted ones.” 2 Company Description Sky delight Restaurant will feature an outstanding New Asian-Swedish menu with a touch of Arabian influence in an upscale and cozy atmosphere. The menu is inspired from different cuisine's specialties and will appeal to a wide and varied clientele. We will be open 7 days a week, serving dinner from 6:00 PM to 2:00 AM. 2.1 Company Ownership The restaurant will start out as a registered Partnership, owned by its founders [Insert Partner Names] where they will function as managers of the restaurant as well. The choice of ownership is decided as partnerships because the restaurant will not require a huge investment as compared to corporations and the partners would be able to raise enough capital to start up the venture. This way, taxes and registration hassles can be avoided. 2.2 Start-up Summary We are seeking loan guaranty for $4,000,000 with a 7% interest rate. We are investing $7,500,000 of our own capital. Our start-up costs come to $11,500,000 which is mostly expensed equipment, furniture, painting, reconstruction, rent, start-up labor, liquor license, six months operating cash, and legal and consulting costs associated with opening our restaurant. These are the start-up requirements to the best of our knowledge and experience in the industry. 2.3 The Menu Sky delight Restaurant will be unique to the Sea View area. National and International creative food, and a style of service that will make everyone feel welcome and special. Our food products will be of the finest quality and prepared with sensitivity and care. We will 'go all the way up to the sky to satisfy our guests. 2.4 Production Food production and assembly will take place in the kitchen of the restaurant. Fresh vegetables, meat and dairy products will be used to create most of the dishes from scratch. The chef will exercise strict standards of sanitation, quality production, and presentation or packaging over the kitchen and service staff. The kitchen staff will have the best in culinary education and work experience. Our creative talents will complement one another. 2.5 Entertainment Facilities Two 19 inch TV sets will be installed in the center of the restaurant and the company will also built a separately-supported "flying stage" to hold a piano and musicians so the guests can enjoy live entertainment while they eat aloft. 2.6 Ethnic Ingredients and Recipes Our chef will have great latitude in designing and producing menu offerings from many different world cultures. We will endeavor to procure all the traditional, authentic ingredients necessary to hold true to these varied and interesting cultural recipes. 2.7 Pricing and Profitability We anticipate our total sales allocation to be 85% restaurant sales and 15% catering sales. The combined cost of sales will be 40% producing a gross profit of 60% on total sales. Prices will be competitive with other upscale restaurants in the area. However, it is the strategy of Restaurant to give a perception of higher value than its competitors, through its food, service and entertainment. 3 Industry And Market Analysis The Restaurant Industry of Pakistan is the size of around more than hundred. The web page of Karachi Snob.com, a famous tourism web site of the city contains a comprehensive details of all kinds of restaurants which are spread out through the city. The restaurants are categorized with the type of cuisines which they offer. The customers usually dine out on weekends with their families and prefer to visit those places which offer good food at reasonable prices and a comfortable seating arrangement so as not to cause any inconvenience to the family. The size of the Target Market which we will be specifically catering to would be the 10% of the population of the city who belong to the Social Economic Class A and B. The lower middle class and the middle class would also be welcomed through trade promotions and discounts to leverage the revenues of our business. The restaurant industry is growing at a steady rate as shown in the “Hotel, Restaurant & Tourism Directory of Pakistan” by Economic Research & Statistics Section Pakistan. Every year, approximately 25 to 30 entrants set up restaurants in the city of Karachi. All of the existing restaurants are more or less on the same format and have somewhat the same menu. The only competitive edge which they have over each other is that of prices and differences in tastes. 4 Competitive Analysis Our direct competitors are other local restaurants which are set on a theme. They are Lal Qila (The Red Fortress), Shan-e-Mughlia (The Demeanor of the Mughals), Village Salt and Pepper, Revolving Restaurant and Evolution. These restaurants are premium priced eateries and carry a theme to themselves and the consumers mainly visit them to enjoy banquet meals along with their friends and kin. Revolving Restaurant would our primary competition as the restaurant is at a high rise roof-top location which rotates smoothly giving the guests the whole view of the city. Other medium class restaurants are not as trendy and mainly compete on prices. Moreover, taste is the ultimate factor which hooks the consumers of Karachi. Apart from that, many Karachites also prefer to visit sub-urban restaurants for the peace and tranquility offered there. Moreover, the list of Restaurants enumerated in the web page of Karachi Snob.com give a comprehensive picture of the eateries operative in Karachi. Our competitive edge is the menu, the chef, the environment, the management, the service and our friendly and unique place and great service. The management and head waiters will handle every detail to make customer's exclusive evening extraordinary! So as to ensure their frequent arrivals here to satisfy their taste buds along with a memorable experience. The creation of a unique and innovative fine dining experience will differentiate us from the competition. The restaurant will stand out from the other restaurants in the area because of the unique design, décor and ambiance. We will offer a fine dining experience in a cozy atmosphere. Product quality is not only great food but great service and atmosphere. The menu will appeal to a wide and varied clientele. It is International with an interesting twist. Controlling costs at all times without exception. 5 Marketing Plan 5.1 Market Segmentation Sky delight Restaurant will intend to cater to a wide group of people. We want everyone to feel welcomed and relaxed in a cozy atmosphere with a wide and varied menu in an experience which they have never heard of before. It is our goal to have "something for everyone" on our menu. In looking at our market analysis, we have defined the following groups as targeted segments. Business Officials; Occasions/Events; The Family The perfect place for a family dinner. Families will come for the accommodative menu and friendly service. The excellent value in their meals will keep our restaurant in favor with the customers. 5.2 Marketing Strategy 5.2.1 Price The principal pricing strategy which we will adopt would be to set market skimming prices. As this service would be entirely new for the market, we will skim the market with higher prices in order to get the most profit out of the high income earners. With due course of time, we will reduce our prices in order to cater to the mass markets who will be able to afford our service at least once a month at certain price level. 5.2.2 Place The Sea View area is one of the most desirable retail locations in Karachi. The Mass. Chamber of Commerce rates it as the third best retail market in the state. There are more than 400 businesses in a 1/4 square mile area with average sales of $18, 000 per square foot as the data depicts. An area of 1500 to 2000 Square Yards will be needed to operate the cranes and elevation of the mobile restaurant. A rent will have to be paid to the authorities to operate in different locations depending on the market we would wish to cater. After our stay on the Clifton beach of Karachi, we may move our facility to open grounds of Gulshan-e-Iqbal and Nazimabad. 5.2.3 Promotion: Focusing on the unique aspect of the theme of our service (healthy, tasty foods along with a memorable experience) a mix of marketing vehicles will be created to convey our presence, our image, and our message. Print media: Local newspapers, magazines and student publications Hotel guides: Chamber of Commerce brochures Direct mail: Subscriber lists, offices for delivery Misc: Yellow pages, sponsoring charity events 5.2.4 Service: Our service is an offering which creates a gap in the market because there is currently no offering like Sky Delight. We will commit to provide our consumers with an unforgettable experience. The restaurant’s kitchen will be mobile. The orders will be placed on the ground and while the food is prepared, the facility itself, consisting of 27 seats will be hoisted up to an altitude of a maximum of 180 feet above the ground via cranes with attached eight cables. Meanwhile, their food will be prepared and when it is ready, the diners will be brought down and when the food is served, the facility will again give the customers a ride in the sky. The Restaurant will initially operate on a appointment basis and will be run during teatimes till dinner because of climate constraints. 5.3 Strategy and Implementation Summary Our strategy is simple; we intend to succeed by giving people a combination of excellent and interesting food in an environment that appeals to a wide and varied group of people. We will focus on maintaining quality and establishing a strong identity in our community. We will direct all of our tactics and programs toward the goal of explaining "who we are and what we do". We will keep our standards high and execute the concept so that word-of-mouth will be our main marketing force. We are not striving to be the lowest-priced restaurant; we are aiming to be the value leader. 5.4 Sales Strategy Our sales plan is to establish and maintain position with our local customers. The strategy is to build more customers in order to increase revenue. We will focus on making all our customers happy with our food, service and entertainment options. We will train every new employee so they will fit in with Sky Delight's concept, which is "Wonderful food, and knowledgeable service aimed to give our customers an outstanding experience." 6 Operations 6.1 Facilities & Offices The restaurant at Sea View will be at a 1500 Square foot space. The licenses and Codes of Issues will be taken. New equipment will be purchased and installed by the general contractor. 6.2 Hours of Operation The restaurant will be open for dinner and hi-tea 7 days a week. Service will begin at 05:00 PM and end at 01:00 AM. The restaurant will be closed on public holidays. 6.3 Employee Training & Education Employees will be trained not only in their specific operational duties but in the philosophy and applications of our concept. They will receive extensive information from the chef and be kept informed of the latest information on healthy eating. 6.4 Systems & Controls A big emphasis is being placed on extensive research into the quality and integrity of our products. They will constantly be tested for our own high standards of security, freshness and purity. Food costs and inventory control will be handled by our computer system and checked daily by management. Routine checks on the cranes, cables and the facility itself will be performed so as to provide our customers a safe and secure environment. 6.5 Food Production Most food will be prepared on a mobile facility. The kitchen will be designed for high standards of sanitary efficiency and cleaned daily. Food will be made mostly to order and stored in large coolers that will be placed near the crane. 7 Technical Aspects 7.1 Size of the platform in transport Length: 6 meters Width: 2, 5 meters 7.2 Size of the platform built up Length: 9 meters Width: 5 meters 7.3 Weight of the table 7 tones (empty) to 10 tones (full) 7.4 Size of the crane in transport Length: 11 meters Width: 2, 7 meters 7.5 Size of the crane built up Length: 11 meters Width: 8 meters including support legs 8 Management & Organization 8.1 Key Employees & Principals [Insert Partner’s Name] will manage Sky delight. He will also function as Head Chef. [Insert Partner’s Name] and [Insert Partner’s Name] will take care of all financial issues including bookkeeping. [Insert Partner’s Name] and [Insert Partner’s Name] are the Front Manager and our Marketing Director respectively. They will take care of ordering for service and managing the wait-staff. She will also take care of Marketing and Advertising. [Insert Partner’s Name] will be our Director Administration 8.2 Management Team Our management team is well compensated. We have a team that has considerable experience together and shares knowledge in many different fields of business and in life. In Year 2 we will hire a General Manager to assist Restaurant to grow even further. 8.3 Compensation & Incentives Restaurant will offer competitive wages and salaries to all employees with benefit packages available to key personnel only. 8.4 Consultants & Professional Support Resources At present, no outside consults have been retained, excepting the design department at Best Equipment. 8.5 Management to be added We are presently searching for a General Manager and Executive Chef. These key employees will be well chosen and given incentives for performance and growth. The basic requirement is relevant experience of managing a restaurant and preparing foods respectively. 8.6 Ownership All the partners are the joint owners of the company or restaurant. 8.7 Personnel Plan We believe the personnel plan is in good proportion to the size of the restaurant and projected revenues. The staff will include 12 full-time employees and six part-time employees, who will work a total of 754 man-hours per week Chef [Insert Partner’s Name]will be assisted by: Another chef with considerable experience in different restaurants (1). Cooks who will work directly with [Insert Partner’s Name] or the chef (2). Prep cooks / dishwashers People for cleaning the restaurant (2) [Insert Partner’s Name] and [Insert Partner’s Name] will take care of the financial issues including bookkeeping and work in 'front of the house'. [Insert Partner’s Name] and [Insert Partner’s Name] will be our Front Manager and Marketing Director. The Marketing Director will take care of promotional and PR Campaigns and the Front Manager will manage the wait staff and ordering for service. The Front Manager will be assisted by: Servers that work part time (4). Full-time crane-controller (2). Part-time crane controller (1). 9 Financial Plan $11,500,000 of funding is needed over the next year for renovations, furniture, kitchen equipment, food & restaurant supplies, legal fees, working capital, marketing and personnel. 9.1 Important Assumptions The financial plan depends on important assumptions, most of which are shown in the following table as annual figures. The key underlying assumptions are: We assume a slow-growth economy, without major recession. We assume that there are no unforeseen changes in the expectancy in the popularity of our restaurant. We assume access to investments and financing are sufficient to maintain and fulfill our financial plan as shown in the tables. We assume our Fixed Costs to be $250,000 and Variable Costs as 40% of our Sales Price FY 2010 FY 2011 FY 2012 Current Interest Rate 0.00% 0.00% 0.00% Long-term Interest Rate 18.0% 18.0% 18.0% Tax Rate 30.0% 30.00% 30.00% Other 0 0 0 9.2 Start up Summary and Cash Flow Statement Year 1 ($000)     Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 TOTALS Beginning Cash Bal $10,000 $5,835 $5,470 $5,149 $4,621 $4,388 4,178 $3,667 $2,798 $2,600 $2,124 $1,928   Cash Inflows (Income):   Cash Collections 500 520 560 590 630 650 670 690 710 730 760 790 7,800 Credit Collections 50 53 57 60 65 65 65 65 65 65 65 65 740 0 Total Cash Inflows $550 $573 $617 $650 $695 $715 $735 $755 $775 $795 $825 $855 8,540 Available Cash Balance $10,550 $6,408 $6,087 $5,799 $5,316 $5,103 $4,913 $4,422 $3,573 $3,395 $2,949 $2,783   Cash Outflows (Expenses):   Advertising 110 106 102 98 94 90 87 83 80 76 74 74 1,074 Bank Service Charges 20 15 15 15 15 15 15 15 15 15 15 15 185 Insurance 150 0 0 0 0 0 0 0 0 0 0 0 150 Interest 100 100 100 100 100 100 100 100 100 100 100 100 1,200 Inventory Purchases 55 57 61 65 69 70 74 76 78 80 82 86 853 Maintenance & Repairs 90 90 90 90 90 90 90 90 90 90 90 90 1,080 Operating Supplies 670 0 0 0 0 0 0 300 0 0 0 0 970 Payroll 350 350 350 350 350 350 400 400 400 450 450 450 4,650 Professional Fees 70 0 0 0 0 0 20 0 0 0 0 0 90 Communications Equip. 500 0 0 0 0 0 0 350 0 0 0 0 850 Rent 150 150 150 150 150 150 150 150 150 150 150 150 1,800 Office Supplies 150 20 20 10 10 10 10 10 10 10 10 10 280 Permits & Licenses 250 0 0 0 0 0 0 0 0 0 0 0 250 Utilities & Telephone 50 50 50 50 50 50 50 50 50 50 50 50 600 Taxes 250 0 0 250 0 0 250 0 0 250 0 0 1,000 *Sales training 250 0 0 0 0 0 0 0 0 0 0 0 250 Subtotal $3,215 $938 $938 $1,178 $928 $925 $1,246 $1,624 $973 $1,271 $1,021 $1,025 15,282 Other Cash Out Flows:   Capital Purchases 1,500 0 0 0 0 0 0 0 0 0 0 0 1,500 Subtotal $1,500 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,500 Total Cash Outflows $4,715 $938 $938 $1,178 $928 $925 $1,246 $1,624 $973 $1,271 $1,021 $1,025 $16,782 Ending Cash Bal $5,835 $5,470 $5,149 $4,621 $4,388 $4,178 $3,667 $2,798 $2,600 $2,124 $1,928 $1,758    9.3 Break Even Analysis: Break-even Point = Average Monthly Fixed Cost Selling Price – Variable Cost = $250,000 1500 – 600 = 279 customers We must cater to 279 customers per month in order to break even. 10 Exit Strategy No one attempt a business anticipating failure, however sometimes ventures does not fulfill their promise. We at Sky Delight are committed to our concept and its viability. In the event that our venture cannot achieve profitability and retire the encumbrances; we will first attempt to sell the operation and use the proceeds to clear all outstanding balances. If we are unable to sell the operation for sufficient proceeds we will forced to default whereby the SBA loan will be in senior standing. Any further outstanding balances will be borne by the investors on a weighted percentage basis of the total amounts due in bankruptcy proceedings. References Hotel, Restaurant & Tourism Directory of Pakistan. Islamabad: Economic Research & Statistics Section, Tourism Division, Govt. of Pakistan, 2009. Print. KarachiSnob.com. “Restaurants”. 2010. Web December 4, 2010 Available at “Restaurant Industry in Pakistan”. Industry Report. 2009. Print Read More