Zenith Restaurant Analysis - Example

of Affiliation: EXECUTIVE SUMMARY The company’s initial ment to financial lenders and investors, this restaurant plan, is a clear depiction of the Zenith Restaurant business proposal. Our aim is to come up with a practical business expectation, and clarify any question on whether the venture is profitable. Entrepreneurs are typically known for painting the restaurant business plan with great optimism, detailing the strengths and conceal the risks involved. Zenith maintains a strong commitment to ensuring the success of the restaurant. The business focus is to establish a definitive business, marketing, and financial strategy that not only meet the business need of capital financing, but also work as a roadmap for the day to day dealings. The larger plan takes into account the various precautions that will help validate the business and financial models based on realistic projections. This has been made possible on the following accounts: 1. The proposed business financial model is rooted in industry facts and not optimism. The business costs are founded on an extensive industry and practical knowledge of similar businesses and validation against National Restaurant industry cost averages. This includes a collective approach to all figures to come up with solid business estimates. 2. The proposed business concept follows a comprehensive market analysis. As opposed to creating a business on a preconceived strategy; zenith restaurant follows an extensive analysis of market finding of the existing consumers or simply the business is built to meet the unmet customer “want”. 3. Well Established Management Experience. Zenith management team depicts great experiences with over 30 restaurants openings, and long time involvement in the American restaurant industry. Zenith restaurant will require a total capital of $740,000, of which $643,000 will serve as the start-up capital, while $97,000 as cash reserve for the business operations. This plan submission seeks to secure a loan amounting to $430,000. This loan will serve in purchasing of Equipment, construction, design, and meeting the start up operation costs. Owners, Mr. Justin Simpson and Mr. Derrick Hillwork are investing their personal capital amounting to $110,000. Another $200,000 will be contributed by private investors who will act as part owners without any managerial interest. The owners are committed to taking personal accountability for all financial debts. Such is the case that the owners have taken necessary steps aimed at ensuring the venture is fully capitalized by putting up measures to address all financial shortfalls and ensure a successful venture start-up. Taking a realistic view, the business should hold over $84,000 in cash balance by the end of the third year. BUSINESS DESCRIPTION & VISION Company Ownership Zenith restaurant will begin in the end of 2014 and will be owned by its founders, Justin Simpson and Mr. Derrick Hillwork. Mr. Simpson will serve as the General Manager and Executive Chef, while Mr. Hillwork as Managing Partner.Justin Simpson and Mr. Derrick Hillwork have a long history together in the restaurant industry, stemming back to San Antonio in Texas. Mr. Simpson is a skillful restaurateur, having managed several other full-service restaurants in the past. He presently own Atletico Restaurant in the neighboring Louisiana state. Additionally, Mr. Simpson is a renown Restaurant Consultant dealing with top organizations like the Starwood Group, who proudly own a chain of hotels including The Westin, Four Points, and Sheraton. On the other hand, Mr. Hillwork holds a wide experience in international business and also has certification in hotel and restaurant management. Restaurant Location Zenith restaurant will be located in San Antonio Texas. The setting of Texas’ San Antonio town district is extremely significant having been named recently, the most progressive development region of the City. Zenith will benefit much following the measures in place that will see San Antonio district revamped with $100,000 renovation grant. This plan includes the premise we wish to lease. Our targeted market has been selected carefully and further testing done to ensure necessary retrial traffics and demographics that will help meet our profitability objectives. San Antonio district commercial/residential setting has been picked on following a successful traffic count placed at over 30,000 cars daily in addition to the promising demographic model. Operating Criteria Zenith restaurant located in San Antonio will service lunch, dinner and after work dining although the week and weekends. Zenith will take advantage of peak service time like after-hour patronage from entertainment centers and street traffic to boost its sales. Services will follow the following working hours: Lunch:   Monday to Saturday, 130 a.m. - 2: 45 p.m. Dinner:  Monday to Saturday, 6:00 p.m. – 11.30 midnights Sundays - Market brunch takeout exclusively. MARKET DEFINITION Market Segmentation Zenith Restaurant plans to serve a wide customer base. Here, we will aim at ensuring everyone feels welcomed and entertained. In this regard we have identified the following categories of people as our targeted segments that will help us meet the projected growth projections: a) The Business Person b) Downtown San Antonio Couples c) The Destination Customer d) High-End Singles e) Tourists The market segments presented here are aged 25 to 25, a group that depicts a disposable income and thus seek upscale, trendy and exceptional restaurant options. These present the group of persons who frequent similar restaurants in the region. We presume that they will prefer spending more on experiences they consider exceptional, sophisticated and cosmopolitan. Additionally, they are open to attempting new things, a factor that will make them attracted to our new delicacies Market profile (pie) Target Market Segment Strategy The Business Person: They work throughout the day and at times stay overnight in the city. They prefer visiting a competent establishment that impresses its clients and prospects. Afterward, they frequently wish to relax and use their money or that expensed by their firms. They mostly spend this money on food, drinks and tips. Zenith cosmopolitan style and calm atmosphere will be most conducive for the sophisticated business community, whether they live within or without San Antonio or only visit to work. Downtown Atlanta Couples: zenith restaurant will have a romantic, intimate, enticing adult setting that suggests “date.” The restaurant will establish itself as the best date location within the town. The targeted midtown couple generally fall in the brackets of successful working professionals who regularly budget to eat since they find it hard to prepare food nightly. The Destination Customer:  San Antonio has for a long time been considered a ‘sectioned city’ making customers to prefer neighboring cities. However Zenith intends to establish new marketing strategy that will alter this trend and draw customers from within and without the city. Zenith will come up as a destination restaurant. High-end Singles: The eclectic setting and layout will work to woe this category of persons. The wide range delicacies, outstanding décor, events and entertainment, engaging clientele and excellent service will assure our clients a striking feeling in San Antonio. This group includes individuals who pride themselves with socializing and dining from premier locations or simply termed ‘image seekers’. Tourists: San Antonio serves as a destination for the many tourists who visit places like san Antonio mission national historic park, sea world san Antonio, the six flags fiesta Texas among many other tourists attractions. The restaurant will work to ensure its effectiveness through provision of attractive atmosphere, international delicacies and lounge. The largest portion of the tourist’s populace is the vacationing singles that come here to be entertained and socialize. This is particularly true for tourists who come to do sporting and socialize. DESCRIPTION OF THE PRODUCTS AND SERVICES Products Zenith Menus Zenith restaurant will offer a wide range of food drawn from Chinese, Thai, English, Spanish and other regional flavors. The list offers a small selection of our opening menu offerings: Menu Ingredients Tepas Shrimp Baskets w/ sweet & sour peanut coulis Minced curry beef/chicken w/ onions in roti wrap (or spring roll) Mixed Seafood Ceviche w/ couscous siding Bamboo Chicken Satay w/ kaffir lime and Sesame marmalade Appetizers Bread basket served with Olive oil, Black Pepper, and Goat Cheese dip Blue Crab Fritters with Mango-Tamarind sauce Crab Cake medallions w/ Shrimp & Lobster ‘Zara Salads Mixed Greens with Spanish sherry wine vinaigrette Asian Pear and Endive Salad with Blue Cheese & Walnuts Entrees Tequila Scallops w/ a Spanish sherry reduction Thai Red Chili rubbed shrimp Voodoo Prince Curry Chicken and Bock Chow w/sticky rice in Banana Leaf Herb Roasted Chicken with ‘Zara Coo-Chee (House) spices Desserts Chocolate Chunk Bread Pudding w/ Bourbon Cherry sauce Zara Chocolate Explosion – Milk, Dark and White chocolate Zara Fruit Plate Specialty Drinks & Coffees ($3.5 - 9.5)  A key source of revenue for the restaurant will be alcohol and bar sales. The restaurant will feature exotic drinks on a separate menu. Alcoholic drink specials will be featured, as well as a large non-alcoholic selection. After-hours bar service will feature selections of non-alcoholic drinks to increase bar sales during lunch and after regulatory hours. Bar pricing is competitive; prices range from $3.50 to 6.95. Non-alcoholic drinks will be in the higher price bracket due to preparation requirements. Prices will range from $4.75 to 9.50. ORGANIZATION AND MANAGEMENT Management Team Zenith restaurant with more than 20 years of experience between key personnel’s, depicts an in-depth knowledge of a strong management team. Zenith management staff depicts greater strength that guarantees its success. Daily operational management will be completed by Mr. Justin Simpson and Mr. Derrick Hillwork. These two will be supported by an advisory board. Zenith Advisory Board Jack Schuler of Schuler & leveral : corporate attorney Robert shaefer of SW& G financial services: CPA John Katz of Katz hospitality services: Restaurant Consultant Rosewood green of the rosewood Group: Media & Public Relations consultant Ownership & Management Together, Justin Simpson and Mr. Derrick Hillwork bring in the new business a 20 years experience in the restaurant industry. Derrick Hillwork: Managing Partner  (Operations, Financial, Marketing, and Business Development) Mr. Hillwork brings to Zenith a well founded restaurant background, unique business insight, and a lifetime passion in the same industry. Derrick has worked for over 17 years in the IT industry as a manager. Similar to IT, successful restaurant venture must balance new trend capitalizing with frequent quality assessment. Hillwork understanding of daily cash flow preparation and management of staff will be critical help achieve financial success. . Managing Partner Responsibilities Additionally to the management of the daily operations, both managers, in their capacities as principals in the venture, will direct purchasing, menu development, portioning, inventory control and pricing. They will together engage in planning, developing and establishing policies and objectives of customer service. Additionally they will be responsible for writing them down, explaining to the staff and enforcing them within the working environment. Lastly they will maintain the sole responsibility of hiring and firing employees. Here the decisions will be done jointly. Personnel Plan The personnel plan is creatively tailored to fit the restaurant size and projected revenue. Here the staff will take in 13 full time and 8 part-time employees. Together they will take 754 man hours a week working and generate a $27,308 average monthly gross payroll during our first working year. $399,588 is the projected gross annual payroll taken as 37% the total sales and includes partner’s salaries. Kitchen: Kitchen will have the following employees The Executive Chef who will be assisted by: An Assistant Chef from a national search (1). A Sou chef with considerable experience in different restaurants (1). Cooks that work directly with Peter or the sous chef (2). Prep cooks/dishwasher (2). People cleaning the restaurant (2). Restaurant Operations: Mr. Justin Simpson will deal with Financial Management, PR/Media Advertising, Bookkeeping, and Investor Services. Additionally, he will oversee the day –to-day Restaurant Operations.   Mr. Derrick Hillwork will serve as the Restaurant Manager. He will primarily direct the daily Restaurant Operations, overseeing the Wait and Bar Staff. Derrick will also serve as the Executive Chef alongside the Head Chef. Derrick will also work with servers who will take the position of captains. Servers role is to take care of service in addition to ensuring the restaurant is in good shape (2). a) Servers that work part time (4). b) Full-time bartender (1). c) Part-time bartender (1). d) Full-time busboy (2). e) Part-time busboy (1). Administrative Salaries (Partners): a) Justin Simpson: $ 48,000 per year b) Derrick Hillwork $ 32,160 per year  Personnel plan Year 1 Year 2 General Manager (Year 2+) $0 $0 Partner/Manager $48,000 $48,000 Partner/Asst. Manager/Exec. Chef $32,160 $32,160 Hostess (Full Time) $24,000 $24,500 Hostess (Part Time) $13,200 $13,500 Waitperson 1 $5,640 $5,640 Waitperson 2 $5,640 $5,640 Waitperson 3 $5,640 $5,640 Waitperson 4 $5,640 $5,640 Waitperson 5 $5,640 $5,640 Waitperson 6 $5,640 $5,640 Waitperson 7 $5,640 $5,640 Waitperson 8 $5,640 $5,640 Waitperson 9 $5,640 $5,640 Wait/Barperson $10,440 $10,440 Bartender 1 $14,400 $14,400 Bartender 2 $7,200 $7,500 Busboy 1 $9,120 $9,120 Busboy 2 $11,760 $11,760 Busboy 3 $7,200 $7,200 Assistant Chef $44,400 $44,400 Sous Chef $32,400 $32,400 Cook 1 $24,240 $24,240 Cook 2 $18,960 $18,960 Prep Cook/Dishwasher $12,288 $12,288 Prep Cook/Dishwasher/Cleaning $12,960 $12,960 Dishwasher 1 $8,640 $8,640 Dishwasher 2 $5,700 $5,800 Cleaning/Dishwasher $11,760 $11,760 Open $0 $0 Total People 20 24 Total Payroll $399,588 $400,788 MARKETING and SALES Marketing Strategy Zenith restaurant marketing strategy will focus on promoting its electric food, excellent services, and the exciting concepts to attract local repeat clients. Marketing programs will involve the following: Customer Service: The first two years we have spent in the restaurant industry has realized customer service as a key draw for the dining customers. Our atmosphere and food is greatly out shadowed by superior customer service which has effectively turned many new customers into regular customers. Our management will work to ensure wait-staff offer the best services to customers, guaranteeing their contentment and satisfaction with their experiences in dining. Wait-staff are drawn from renown hotel and catering collages, and they undergo a regular performance evaluation. Advertising and Promotion: Zenith restaurant advertising plan will target customer directly via local publications accessible to respective customers i.e. couples, singles, and destination customers. The restaurant management appreciates the need for an extensive media promotion in the initial stages. This should be accomplished with much aggressiveness if we will have to meet our intended goals. In our first year we will allocate substantial amount to facilitate the creation of media and customer buzz, a month prior to the official opening and in the next 2 months after opening. Our complete market program will be as follows: Media Objectives and Strategy: Positioning ourselves as an exceptional midtown restaurant renowned for its value, excellent service, and great delicacies served in an electric environment. We will boost efficiency in the selection and timing of advertisement through: a) Picking on primary business publications that have an excellent market penetration, employing The Creative Loafing Dining Selection b) Scheduling proper frequency of advertisements to impact market with promotions and menu items c) Where applicable we will position advertisements in or close to entertainment/food related editorial d) Using our website to inform our clients of upcoming functions, reservations, VIP lists, and flash media promotions In addition, we will establish a steady reach and frequency all through the year, targeting individual groups of customer segments within a five-mile radius. This will stretch to the new suburbanites, who show desire for in-town dining. Other marketing and sales strategy will include : a) Promotional Campaign b) Paring with local community in joint ventures that seek to better peoples lifestyles c) Use of press release/grand opening Publicity Revenues: We predict that out of our publicity we will generate at least 10% of our yearly sales. A complete media kit will be made available to the many local publications. Publicity of New releases on menu items will be done monthly. Sales Strategy Zenith sales strategy involves offering our customers a combination of interesting and delicious food within an appealing atmosphere, with striking customer service. Our market strategies seek to turn first time customers into regular customers and also woe new clients through good report of our existing customers. Zenith sales strategy will entail a consistently excellent service food, speed and atmosphere. This will be accomplished through: 1. Hiring staff that genuinely take pleasure in their jobs and recognize Zenith’s distinctive offerings 2. Repeatedly evaluating the quality of the aspects point out above, and addressing problems with urgency. 3. Establishing personal Interaction with our clients, making them aware that their feedback is directly attended on by the owners. 4. Assessing popularity of food choices, and keeping choice food on the menu while rotating seasonal and special food. FINANCIAL MANAGEMENT Balance Sheet Statement Zeniths projected balance sheet is solid. We least expect problems meeting the debt obligations. Balance sheet Year 1 Year 2 Year 3 Assets Current Assets Cash $172,276 $189,815 $236,095 Inventory $37,839 $39,175 $38,109 Other Current Assets $73,311 $73,311 $73,311 Total Current Assets $283,426 $302,300 $347,514 Long-term Assets Long-term Assets $65,000 $65,000 $65,000 Accumulated Depreciation $6,500 $13,000 $19,500 Total Long-term Assets $58,500 $52,000 $45,500 Total Assets $341,926 $354,300 $393,014 Liabilities and Capital Year 1 Year 2 Year 3 Current Liabilities Accounts Payable $58,194 $59,713 $61,398 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $58,194 $59,713 $61,398 Long-term Liabilities $252,228 $204,456 $156,684 Total Liabilities $310,422 $264,169 $218,082 Paid-in Capital $440,000 $440,000 $440,000 Retained Earnings ($427,209) ($428,496) ($359,869) Earnings $18,712 $78,628 $94,801 Total Capital $31,504 $90,131 $174,932 Total Liabilities and Capital $341,926 $354,300 $393,014 Net Worth $31,504 $90,131 $174,932 Income statement Income Statement Year 1 Year 2 Year 3 Sales $1,073,769 $1,211,088 $1,279,204 Direct Cost of Sales $371,416 $398,407 $406,976 Other $0 $0 $0 Total Cost of Sales $371,416 $398,407 $406,976 Gross Margin $702,353 $812,681 $872,228 Gross Margin % 65.41% 67.10% 68.19% Expenses Payroll $399,588 $400,788 $429,828 Marketing/Promotion $18,656 $22,000 $25,000 Depreciation $6,500 $6,500 $6,500 Leased Equipment $12,000 $12,000 $12,000 Accounting/Payroll Processing $6,600 $6,600 $6,600 Legal Retainer Fees $2,400 $2,400 $2,400 Business Licenses & Permits $6,000 $6,000 $6,000 Credit Card Expense $18,576 $19,983 $21,107 Bank Fees $1,200 $1,200 $1,200 Music & Entertainment $3,744 $3,744 $3,744 Training / Employee Retention Programs $0 $5,008 $6,008 Repairs & Maintenance $9,000 $9,000 $9,000 Utility Services (Gas/Electric/Water/Sewer) $24,996 $26,496 $27,821 Telephone/Communication Expense $1,800 $1,800 $1,800 Insurance: Fire/Theft/Liability/Liquor/Product $20,400 $21,624 $22,705 Restaurant Occupancy Cost (Lease) $75,000 $77,250 $79,568 Payroll Taxes (FICA/FUTA/SUTA) & Employee Benefits $0 $0 $0 Exterminator/Trash Removal $4,800 $4,800 $4,800 Dishware/Uniforms/Cleaning Supplies/Decor $11,760 $12,466 $13,089 Printing/Paper/Postage/Subscriptions $9,156 $9,500 $9,500 Facility (Exterior Cleaning/Grease Trap/Hood/Windows,etc.) $3,333 $3,640 $3,640 R&D Meals $2,200 $2,400 $2,400 General Business Comps $12,400 $22,850 $23,125 Owner Comps $2,124 $2,124 $2,124 Other Expenses (ComAreaMaint, etc.) $4,200 $4,200 $4,200 Total Operating Expenses $656,433 $684,372 $724,158 Profit Before Interest and Taxes $45,920 $128,309 $148,070 EBITDA $52,420 $134,809 $154,570 Interest Expense $19,189 $15,984 $12,640 Taxes Incurred $8,020 $33,698 $40,629 Net Profit $18,712 $78,628 $94,801 Net Profit/Sales 1.74% 6.49% 7.41% Cash Flow Statement Cash flow follows an assumption made on inventory turnover and payment days. Our cash flow does not track accounts receivable since we have no sales on credit. Appendix Read More