Business Plan for Chinese Restaurant - Assignment Example

Topic Page Executive Summary………………………………………………………………….4 Business Concept i. Mission Statement…………………………………………………………..5 ii. Goals and Objectives…………………………………………………………5 Company Description……………………………………………………………….6 Description of Products and Services………………………………………………..7 i. Features of proposed Products and Services…………………………………7 ii. Benefits to Customer………………………………………………………..8 iii. Proprietary aspects of the products…………………………………………..8 Stage of Development and Product Plan……………………………………………..8 i. Stage of development…………………………………………………………9 ii. Manufacturing Equipments………………………………………………….9 iii. Environmental Elements…………………………………………………….9 iv. Production……………………………………………………………………9 v. Product Limitations…………………………………………………………..9 vi. Purchasing and Paying Suppliers……………………………………..………10 vii. Inventory Control………………………………………………………………10 Future Products and services…………………………………………………….…….10 i. Capital Requirements for New Market Places………………………………...10 Management structure and Organization ii. Legal Form and Ownership…………………………………………………..…11 iii. Management Personnel…………………………………………………………11 Marketing Plan i. Industry Description……………………………………………………………..12 ii. Target Market………………………………………………………………….…12 iii. Competition………………………………………………………………………..13 iv. Marketing Strategy………………………………………………………………...13 Financial Plan……………………………………………………………………………..14 Cash Flow Projection……………………………………………………………………….15 A. Executive Summary Jim Liu Chinese restaurant is a fast food restaurant located in 200, East B Street, Matown, California. It offers its patrons with a wide variety of menu selections with a special appeal to the health-aware-public outlined in the marketing segment of this plan. Chinese food is comparatively low in calories and high in nutrition (Alonzo, 2007). The main Chinese dishes consist of rice, vegetables and chicken, which catch the attention of many people from different walks of life. The increasing numbers of single parent families with limited time enough to prepare meals and those people desiring to spend more leisure time free from meal preparation have contributed to the increased number of fast food and take out patrons. Chinese food is regarded as of good value since one gets a high quantity of the food at low cost. In reference to a study by the National Restaurant Association (2008), from 2003-2008, Chinese food was one of the most consumed ethnic food, whose consumption was growing at 22 percent annually relative to the 11 percent growth of the whole industry. Jim Liu Restaurant has projected an average of two hundred and forty clients per day. Jim Liu is being developed by Zhang Xu, owner and C.E.O. She has worked as an educator and has served the public for more than 20 years. Chu Sang is a highly qualified manager and the head chef to the restaurant. Xu’s proficiency in the art of Chinese cooking and administration is second to none and significant to Jim Liu’s Success. Jim Liu’s faces competition from the renowned Chinese restaurants such as Drive-in and Majimoto in Matown. However, since Matown has a high population of more than 60, 000 people, such a high number can support Jim Liu and the other Chinese restaurants in the region. Jim Liu’s competitive edge is its nutritious Chinese Menu. The superb seasonings and sauces have been perfected to produce the tastiest, attractive and appetizing meals. The marketing plan will involve intensified advertising campaign prior to the start of the business and after one month of business. Flyers will be distributed around the city and the vicinity and also at any sports events of the town. There will also be local radio coverage and newspapers where there will be small advertisements. These will Jim Liu in competition. An initial sum of $50, 000 will be needed to acquire equipments, supplies and fixtures to get the business started. Jim Liu restaurant vows to offer Matown Community outstanding eating institution with the best Chinese cuisine. B. Business concept i. Mission Statement The primary aim of Jim Liu Chinese Restaurant is to offer a delicious Chinese food menu in an enjoyable, interesting atmosphere of Matown, California. The food is served in a planned, quick but orderly manner to those patrons who wish to dine in or carry out. The patrons served include clients of all ages. ii. Goals and Objectives Goal 1: Open the venture by February 2013 Objectives: Prepare a building site Establish favorable banking relationship Tag along the planning chart activities Goal 2: Meet the planned first year sales of 350,000 US dollars. Objectives Keenly monitor cash flows Monitor the business’s expense categories Monitor food usage and spoilage Build and sustain high customer service values. Goal 3: Go beyond $ 450, 000 and $550,000 consecutively in sales by the second and third year. Objectives Offer excellent customer service Heighten the company’s marketing efforts Frequently train and retrain the staff members Develop staff benefit package Sales Goals C. Company Description Jim Liu Chinese Restaurant is a planned fast food restaurant located 200 East B Street, Matown, California. This location has in the past proved to be an excellent place for a restaurant. Jim Liu provides numerous Chinese food selections with a certain solicitation to the health-aware-public outlined in the marketing segment of the plan. Jim Liu Restaurant is developed by Xhang Xu, the owner and the company C.E.O. Jim Liu’s competitive edge is the company’s nutritional menu choices. The superb sauces and seasonings have been made perfect to produce the most appetizing, delicious and attractive food in Matown. The chief chef has had more than 10 years experience in cooking in five star hotels in China and United States. Jim Liu Restaurant vows to offer an outstanding eating establishment and the finest Chinese cuisine. Jim Liu will play two roles, one in providing family dining and secondly, providing a section for fashionable confidant eating. An assorted family carte du jour will boast of bighearted shares at favorable prices with a distinctive Chinese subject. The superior dining section will have an exceptional menu that will be often changed. The furnishings of Jim Liu will tag on Chinese style with Chinese apparels and garden styling D. Description of Products and Services i. Features of Proposed Products and services Exceptional Features In contract to the traditional Chinese Restaurants which involve long waiting lines attributed by slow food preparation, Jim Liu is a fast food restaurant where the product will be almost instantaneously served (National Restaurant Association, 2008). The continuous availability of food at all times will be attributed to the daily in-house pre-cooking process of the meat substances. In addition, the meat substances will also be kept under steaming to ensure that they are nearly ready when the client wants them. The computerized register which will be installed will ensure that it send the order back to the chef, who instantly fills it. The all encompassing Chinese menu is a luring transformation from the standard burgers and sandwiches. The fast service of our restaurant will attract the clients who are in a hurry to attend to important matters or the people who break for short period lunch breaks. ii. Benefits to customers Jim Liu offers its patrons Healthy, low calorie food substances Quality and quick friendly service Value for their money Convenience through sufficient parking iii. Proprietary aspects of the products Jim Liu Chinese Restaurant logo is a registered trademark under the United States Patent rights. Permission to use and obtain the company’s logo and trademark is underway. If the Attorney denies us from using this name for the restaurant, we will choose another different name. E. Stage of Development and Product Plan i. Stage of development Jim Liu Chinese cooking is a comparatively new invention in the restaurant industry. The kitchen manager and the head chef have had 10 years of experience in the Chinese food industry. Jim Liu is at the moment at early development stages with an anticipated start of business as from February 2013. ii. Manufacturing Equipments Jim Liu restaurant is located at the heart of Matown shopping center. Jim Liu Restaurant can hold a maximum of 120 people at a time. It has a large entry way, and a well illuminated dining section. The kitchen is well furnished with a deep fryer, rice cooker, four-hole work and a warmer that uses steam. In addition, the company has a refrigerator used to store the perishable substances such as the meat and vegetables. iii. Environmental Elements Because of the high expenses associated with adopting a sanitary table wear, the restaurant will use disposable tableware (Daniels, 2002). The disposable paper products are biodegradable and thus environmental friendly. These materials will be removed and disposed off on a daily basis. iv. Production The meat products are bought when fresh or frozen and undergo a mild cooking process which accelerates the cooking process at the time of the order. The vegetables are obtained when fresh and are steamed as ordered. The rice cooker prepares and holds the rice waiting for orders. The sauces are the only substances that are made from scratch when ordered. The counter staff takes orders, fill drinks and supervise the dining table. The chef serves the food and issues it through the serving window. v. Product Limitations In the food industry, product perishability and time period is a great aspect to consider (Daniels, 2002). The fruits and vegetables can only be used and refrigerated for a maximum of four days. Meat substances are cooked and consumed on that particular day. The items in the store should be consumed within their shelf life (National Restaurant Association (2008). The seating capacity of the restaurant is restricted to only 120 people. In addition, the number of employees in the restaurant is constantly adjusted to serve the people during rush hours. vi. Purchasing and Paying Suppliers All food and paper substances will be purchased through Cashways or Tweng wholesale distributors and paid through check under their stipulations which is usually twice a month. The deliveries will be made twice a week and the selection of the supplier will be based on the prices and the quality of their items. vii. Inventory Control As the ordered items will be delivered by the suppliers, they will be checked off against the original order to ascertain the quantity and the quality ordered. In addition, the expiration of the items will be checked (McKeever, 2012). After receiving the items, they will be entered into the computer material control system. This process will ensure up-to-date information on the items in stock and the items that require refill. F. Future Products and Services After the restaurant has been established, we will offer home deliveries and catering. Local contacts have indicated a high demand for such services (Daniels, 2002). However, the catering and home deliveries will require additional personnel. These services will help please the clients and create a new patronage. i. Capital Requirements for New Market Places a. Deliveries These would increase inventory is covered due to the pay as served policy. b. Catering Would increase inventory but the cost of covered because of pay as served policy. However, this will need additional employees at $ 5.75 per hour. G. Management Structure and Organization i. Legal Form and Ownership Jim Liu is a sole proprietorship owned by Zhang Xu. All the necessary permits and licenses will be acquired. ii. Management Personnel Chief Executive Officer Job description Responsible for overseen the overall operations of the restaurant Monitoring Financial records Payroll dispensation Restaurant Manager job description Available at all times to oversee smooth running of the restaurant Will recruit and select new employees H. The Marketing plan i. Industry Description a. Current Size According to reports by Fortune Magazine, the total number of sales for the 300 restaurants in the region was 184 billion US dollars, which was 9 percent higher than the previous year. Of this amount, fast food contributed more than 63 billion US dollars. b. Growth Potential People have become health conscious and are turning to eating more Chinese food which majorly consists of vegetables. In addition, there has been an upsurge of Asian fast food restaurant at an annual rate of 20 percent. c. Seasonality Seasonality is an element that affects the operations of restaurants in an industry (Daniels, 2002). Holidays such as Christmas, valentine days, Mother’s day and birthdays increase restaurant sales. We expect to record high sales than normal on this particular holiday seasons. ii. Target Market Jim Liu will target different segments of the market according to age. First, it will target the health conscious age group, which lies between the age of 18 and 54. This segment is composed of 6798 elder people and 900 college students. In addition, Jim Liu will target students between the age of 13 to 17, children below 13 and adults of 55 years and above. The children and the youth will be targeted first since they can influence the choice of the meals of their families (McKeever, 2012). According to National Restaurant Association (2008), the people between the age of 18 and 54 are approximately 53 percent, 54 years and above are 21 percent and below 18 years are 16 percent. iii. Competition Jim Liu will face competition from the renowned Majimoto and Drive-in fast food Chinese restaurants. These businesses have been in business for a long period and have a high market share. However, Jim Liu expects that its favorable prices and unique products will provide the restaurant with a competitive edge (Daniels, 2002). None of the restaurants in the industry offer tasty seasonings and sauces like Jim Liu. In addition, the quantity and convenience of the services to its patrons will provide a competitive edge. iv. Marketing Strategy a. Packaging and Labeling Jim Liu’s products will be served in a biodegradable dinner ware. The carry outs will be served and wrapped in a white paper that is disposable (Daniels, 2002). In addition, the restaurant will offer a printed menu to anyone who requests for one. All the personnel wear will be printed the Restaurants name and logo at the back. b. Pricing The prices will be determined in part with the costs and the competitor’s prices (Blackwell, 2011). In addition, Jim Liu will also offer discounts to people that purchase above a certain quantity. c. Promotion Jim Liu will employ the use of public relations especially at the annual trade show events at Matown. It will distribute flyers to the people during such events. In addition, Jim Liu will carry out adverts in the newspapers, local radio stations and TV stations. Pricing and Profitability Strategy  Main Course One size Spare Ribs 15 Oyster 35 Prawns 20 Min 15 Chicken 15 Su 15 Yue 15 Xhiang 15  Salads  Small  Large Ordinary 3  5 Fattoush 4  6 Desert     Bing 5 15 Gao 5 10  Beverages     Soft Drinks 2 5 Water 1 2 Items Price Daily Qty Weekly Qty Monthly Qty Yearly Qty Daily Rev. Weekly Rev. Monthly Rev Yearly Rev Spare Ribs 15 25 175 750 9000 375 2625 11250 135,000 Oyster 35 25 175 750 9000 875 6125 26250 315,000 Prawns 20 20 140 600 7200 400 2800 12000 144,000 Min 30 25 175 750 9000 750 5250 22500 270,000 Chicken 15 20 140 600 7200 300 2100 9000 108,000 Su 15 20 140 600 7200 300 2100 9000 108,000 Yue 15 5 35 150 1800 75 525 2250 27000 Xhiang 15 8 56 240 2880 120 840 3600 43,200 Salad - ordinary 4 3 21 90 1080 12 84 360 4320 Salad - fatoosh 5 2 14 60 720 10 70 300 3600 Bing 15 4 25 120 1440 60 420 1800 21,600 Gao 10 7 49 210 2520 70 490 2100 25,200 Beverages 2 50 350 1500 18000 100 700 3000 36000 Total 196 214 1495 6420 77040 3447 24129 103410 1,240,920 COGS Items Price Daily Qty Weekly Qty Monthly Qty Yearly Qty Daily Exp. Weekly Exp. Monthly Exp Yearly Exp Spare Ribs 9 25 175 750 9000 225 1575 6750 81,000 Oyster 21 25 175 750 9000 525 3675 15750 189,000 Prawns 12 20 140 600 7200 240 1680 7200 86,400 Min 18 25 175 750 9000 450 3150 13500 162,000 Chicken 9 20 140 600 7200 180 1260 5400 64,800 Su 9 20 140 600 7200 180 1260 5400 64,800 Yue 9 5 35 150 1800 45 315 1350 16200 Xhiang 9 8 56 240 2880 72 504 2160 28,920 Salad - ordinary 2.5 3 21 90 1080 7.5 52.5 225 2700 Salad - fatoosh 3 2 14 60 720 6 42 180 2160 Bing 9 4 25 120 1440 36 252 1080 12960 Gao 6 7 49 210 2520 42 297 1260 15120 Beverages 1 50 350 1500 18000 50 350 1500 18000 Total 117.5 214 1495 6420 77040 2058.5 14412.5 61755 744,060 VARIABLE COSTS 1 Cost of goods sold 270,000 2 Marketing and Advertising fees 15,000 3 Utility Bills 36,000 4 Mis. Expenses 6,000 Total 327,000 ANNUAL FIXED COSTS 1 Rent 60,000 2 Trade License Renewal 10,000 3 Employee payroll 96,000 4 Depreciation 20,000 Total 186,000 I. Financial Plan Investment required for start-up Expenses Cost $ Equipment 12000 Signage 1100 Installation 2100 Redecorate 800 Advertising 11000 Licensing and other legal Fees 850 Supplies 7780 Payroll 1000 Insurance 200 Designing of Logo 1200 Uniforms 2400 Office and Miscellaneous Expenses 1000 Plot of Land 12,000 Building 14,000 Total cost of Investment $ 13, 480 Total expenses $17, 150 Asset $26, 000 Loan borrowed = $ 50, 000 Money left to begging the operations with will be $10, 520 The loan will be obtained from one of the financial institutions in Matown. Zhang Xu will provide collateral for the loan to be granted to the business. Cash flow Projections Jim Liu anticipates making 350, 000 US dollars in its first year of business. Additionally, it projects that after the second year the business will make $ 400, 000 and $550,000 in the third year. References Alonzo, R. (2007). The startup Guide to Owning and Managing a Restaurant. Kaplan Publishing. Blackwell, E. (2011). How to Prepare a Business Plan: Create Your Strategy; Forecast Your Finances; Produce That Persuasive Plan. Kogan Page Publishers. Daniels, P. (2002). Restaurant business start-up guide: a complete guide to establishing your business. Juice Gallery. McKeever, M. (2012). How to write a Business Plan. Nolo. National Restaurant Association (US). (2008). A Guide to preparing a Restaurant Business Plan. National Restaurant Association. Pinson, L. (2008). Anatomy of a Business Plan: The Step-By-Step Guide to Building Your Business and Securing Your Company's Future. Aka Associates Read More