Formation of Hotel and Restaurant in Hong Kong - Business Plan Example

Business Plan Table of Contents The Case Study 3 Introduction 3 Discussion 3 Conclusion 9 The Business Plan 10 Introduction 10 Formation of Hotel andRestaurant Business in Hong Kong 11 SWOT Analysis 12 Industry Analysis 13 Marketing Plan 16 Financial Plan 18 Operations Plan 24 Conclusion 24 References 26 The Case Study Introduction Entrepreneurship is regarded as a role where a person starts-up, run and diversifies the business through performing various activities by the mean of innovation and creativity. In historical scenario there is various instances and examples whereby a person significantly presented their quality and became renowned as entrepreneur. In this regard, Ray Kroc, has been considered an American business that joined McDonald’s. He had significant qualities of a successful entrepreneur as has been observed. Correspondingly, through emphasising the aspects of Ray Kroc, this paper tends to highlight his entrepreneurial journey, starting from providing his significant innovative and creative approach of developing the business worldwide. Moreover, the discussion includes entrepreneurial theories and identified qualities of Ray Kroc that led successful foundation of the business over the time. Discussion Ray Kroc was born during the year 1902 in Oak Park, Illinois. Prior to joining McDonalds Kroc has worked for 17 years as a salesman after the World War I. Additionally, the working experience of Kroc starts from the year 1917 when he was 15 year old, as joined as an ambulance driver in Red Cross. Besides, after the end of World War Kroc ended with his training as an driver but he explored number of other career paths including paper cup salesperson, DJ in Oak Park radio station, pianist and travelling milkshake salesman of which he acquire 17 year working experience. In this regard, based on the entrepreneurship theory of achievement that some people have the quality to achieve need to success, accomplish, and excel. Besides, the entrepreneurship is driven by the need of achievement and excel. Thus, it can be affirmed that Kroc quality of the innovativeness, need for achievement of the experience and ability to take risk through opting for the different career path significantly led him to become successful in different jobs. Kroc during the year 1954 when he was 52 invested his entire saving that he earned from the different career path to become milkshake producer distributers. Similarly, the resource-based theory of entrepreneurship proposed that availability of resources is an important constrains to capitalise the opportunities to form new or grow the existing venture. Besides, this theory affirmed that finance is one of the integral constrain in the entrepreneurship that enhances the individual capacity to think and capitalised the opportunities. Moreover, human capital theory of entrepreneur stated that two factor including education and experiences help the individual to explore opportunities in a far capable manner that led them to become nascent entrepreneur. In the likely manner Kroc previous experience and understanding the aspects of the business has significantly help him exporting the opportunity of distribution of milkshake products (Simpeh, 2011; Cicarelli, 2006). Correspondingly, during the year 1954 when Kroc working as milkshake salesperson, he was surprised by one of the huge of 8 multi-mixers restaurants offer at California. From there Kroc was highly impressed by the success of the small and successful restaurant concept owned by Dick and Mac McDonald bothers. Kroc had the believe that in the competitive world, the success of McDonald brothers’ in California develop the approach of franchise business for McDonald’s in the entire US and started a new beginning for the business. In this regard, according to the approach of Peter Drucker’s opportunity-based theory it can be affirmed that entrepreneurs excel in by taking advantage that has been possibly revolved in the social environment. Besides, in accordance to opportunity based theory concept it can be affirmed that Kroc idea itself did not bring the changes but exploit that significant opportunity that changes creates in the environment. Besides, Kroc believe regarding diversifying the business in entire nation demonstrates the quality of entrepreneur of searching for the changes that could be significantly beneficial, respond accordingly and exploit it as an opportunity. In this regard, it has been affirmed in various entrepreneurship theories that ability to identify and remain committed over the new opportunities is regarded to be the key entrepreneurial features of the people as well as the business. Besides, the concept of formation or development of existing business is highly based on the approach of developing the different strategies exclusively to capitalise the opportunities in the existing environment. Additionally, identifying the resources that are necessary to take advantage of opportunities has also been the key behind the success of the business (Simpeh, 2011; McDonalds, 2015) Like most of the other entrepreneurs, Kroc also started working from his early age and but did not have any interest in schooling and the potential for working for long hours. McDonald’s corporation initially formed by McDonald’s brothers was a sign of inspiration for Kroc as they were serving the food quickly. This motivated Kroc and helped him understand the concept that limited menu in the restaurants allow the owners to concentrate over the quality in its every quantity. Besides, this inspiration led him to pitch the idea regarding setting up of various restaurants in the market place and convince them regarding selling eight multi-mixers to each customer himself. Thus, the approach of Dick and Mac McDonald brothers of running the small restaurants stunned him through their effectiveness in the operations. Additionally, this has presented him the important concept that few item in the restaurants will significantly allow the business to focus over the quality and fast services. Initially, the McDonald’s brothers were concerned regarding the idea of setting up the business in the new areas. However, Kroc convinced them, joined the restaurant, and established McDonald’s System, Inc. Later on, after the six year, Kroc brings exclusive rights in the name of McDonald and until the period of 1958, McDonald sold over 100 million hamburgers (Simpeh, 2011; McDonalds, 2015). Correspondingly, the unique philosophy of Ray Kroc of developing the restaurants system, which will be renowned for delivering constantly high quality food by the mean of maintaining consistence in the process of preparation. Besides, he wanted to serve customers burgers, fries, buns, and beverages with having consistence in the taste in different location wherever the customers feed themselves from McDonald’s restaurants. To achieve this philosophy, Kroc directs the unique way of performing the business in different places through persuading the approach of franchisees and suppliers to buy the company vision. Kroc being an entrepreneur stated that Theone who undertakes the business as franchisees will not be working for McDonald’s but will be for their own business. Besides, Kroc philosophy is based on 3-legged stool principle that includes franchisees, employees and suppliers of McDonald’s, which together help to develop strong foundation. On other hand, Kroc believe and promote the concept of entrepreneurial spirits and rewards the various franchisees of the business chain for their creativity through considering the aspects of quality, services, cleanliness and valuing the customers as the prior focus of the business (Simpeh, 2011; Famous Entrepreneurs, 2009). Furthermore, with regards to maintain the quality in McDonald chain business throughout during the year 1961 launches training program, which later on regarded as Hamburger University. The university has been incorporated by Kroc to train the franchisees and different operators regarding how to maintain the succession of the McDonald’s restaurants. In this regard, university also provides significant support the operators regarding the method of serving quality food to customers and in the current scenario, more than 80,000 people has been graduate from the university program (Famous Entrepreneurs, 2009). Conceptually, analysing the success of Ray Kroc, with the entrepreneurship Burn’s model it can be affirmed that antecedent factor has no influence but has less impact over the successfulness of Kroc. In this context, it has been observed during his childhood, he has been trained to become driver of ambulance during the period of First World War and after the end of war, he significantly, adopted various career paths. Additionally, the experiences that Kroc earned from his various field of working that includes paper cup salesperson, DJ in Oak Park radio station, pianist and travelling milkshake salesperson had a significant impact on his success. In the year 1920, Kroc joins Lily Tulip Company to sell paper cups, which was the beginning of his career in fast food industry where he worked for around twenty years and acquired the position as sales manager. Correspondingly, during the year 1941 Kroc formed his own business namely Prince Castle Multimixer Company dealing with the production of milkshakes and company prospered until the period of 1950. During the time of early 50’s, people started leaving the cities towards the suburbs, which eventually forced many soda fountains business to close their business. Apparently, Kroc started losing his customer base which hampered his venture tremendously. However, the order of eight machines from one of the small restaurant from San Bernardino, California led Kroc to leave for California. There he visited hamburger business owner, Dick and Mac McDonald, who were highly successful in carrying out their operations. During the year, 1954 Kroc was impressed by the working of McDonald’s brothers and proposed them to diversify the business along with the working experience that Kroc posses helped in positioning McDonald’s corporation, as one of the leading fast food chain business in worldwide. During the year, 1961 Kroc purchases McDonald’s business from the McDonald brothers in $2.7 million, which led him to run the business freely and by period of 1965 he opened 700 restaurants in 44 different states of the US and become the first fast food business form publicly. Eventually, the company shares were traded in public and the stock price issued was $22 per share, which hiked towards $49, and by the end of 1965, Kroc meets as well as surpasses his goal through incorporating 1500 stores in worldwide. Besides, another theoretical aspect of entrepreneur i.e. Social Network Theory affirms that entrepreneurship is embedded with the assistance of social networking, which constitutes significant portion to capitalise the opportunities. Apparently, an individual may have ability to recognise the opportunity but the lack of social connection will obstruct the succession of the business. In this regard, Kroc approach of utilising the franchisees concept to carry out the business in the international market is just to capitalise the opportunity apparently through working in cooperative manner with the partners. Thus, Kroc set the policy of franchise operation through maintaining the concept of quality, services and cleanliness throughout the McDonalds stores. Correspondingly, in order to capitalise the opportunity of venture Kroc receives 1.4% shares in the franchisees profit of which he distributed around 0.5 to the McDonald brothers and Kroc realise the profit is very minimal. Thus, to have higher access Kroc convinces to sell him the rights of McDonald name and owned the business (Baron, 2008). Thus, in the respect it can be affirmed that the significant characteristics of risk taking ability that Kroc undertakes through putting his entire fund in formation of his business, perceptive characteristics of welcoming and optimising the challenges and take preventive step made him a successful entrepreneur. Furthermore, curious characteristics, which is justified with the fact when McDonald brothers, ordered machines, Kroc instead of delivering the order decided to visit the restaurant where he saw food assembly line that are effective in delivering the meals to customers quickly. Moreover, Kroc was highly influenced by the technique used and suggested that he can open up new restaurants for McDonald and during the year 1961, he bought the business from McDonald’s brothers. Ray Krocs curiosity was a key to make him a successful entrepreneur and the chain of the McDonalds restaurant incorporated throughout the US and, eventually, worldwide, which significantly made him the innovator of the modern franchise system (Cicarelli, 2006). Conclusion Ray Kroc is successful entrepreneur who play a prior role to bring McDonald success in the international market and made it a world largest chain of restaurant. The way towards his entrepreneur journey started when he started to incorporate new ideas by seeking different businesses. Moreover, after this Ray opted for different career opportunities and became a salesperson over thirty years in Lily Tulip Cup Company. Besides, during the year 1941 established his own enterprise namely Prince Castle Multimixer Company, which dealt in production of milkshakes after which he joined with McDonald’s brothers business and significantly acquired the business during the year 1961. After acquiring the business, Kroc significantly used his innovative and creative ideas and developed multimillion-dollar fast food MacDonald’s. The Business Plan Introduction In current scenario in order to conduct the business or new venture in the international market, business organizations need to conduct overall analysis of the market segment. Business units will help in market analysis, which facilitates in identifying the aspects of culture, education, labour market and the prospect of the growth in the economy. Additionally, it is highly integral or the business to acquire all the relevant information regarding the commencement of the business operations effectively including the business culture, legal aspects, investment climate as well as the business opportunities. The prior aim of the report is to demonstrate the planning and factors needed to be considered for starting up new hotel industry in Hong Kong to utilise business opportunity to increase in the travellers in the nation. Correspondingly, this report will also assess factors through which the organisation can make significant profit through its operation in the region. In this respect, in-depth internal and external analysis, along with the assessment of growth opportunity has been assessed to derive proper findings. According to report the tourist arrival in Hong Kong has been significantly increased by 12% over the year 2014, which makes Hong Kong one of the top destination for the travellers or tourists (Nip, 2015). Observably, this provides significant opportunity in the hand of the hotel industry to make immense profitability scope. Moreover, it has been ascertained that hostels, guesthouse and restaurants in this regard will provide growth initiatives. Besides, hotel and restaurants industry is having business opportunities in the region, as tourism plays a significant role in the growth in the recent years. Hence, it is deemed to be highly beneficial for business to setup hotel business for sustainability in future (InvestHK, 2012). Formation of Hotel and Restaurant Business in Hong Kong Tourism is regarded to be one of the key pillars of the economy of Hong Kong, as it plays an integral role in national GDP and have significant prospect for creating job in the economy. Besides, hotel and restaurant business is immensely growing with regards to increasing rate of tourists. In this regard, formation of business in Hong Kong the prime objectives will remain to provide significant assistance and needful services to tourists in order to suffice their needs. Besides, the long-term goal of the business will be to build a strong leading position in the Hong Kong hotel industry through maintaining sustainable business operations. In regards to aforesaid objectives the vision and mission of business will be to provide all sort of the assistance and services that the traveller requires who visits in Hong Kong through the assistance of hotel services. Moreover, in this regard, services that business is expected to provide are hospitality, food and beverage, bar, seminar organisation, event management among others. Besides, business is also planning to provide all sorts of information and support to the tourist and guest to make their trip momentous. Decorative items will be presented in the hotel to attract more and more tourists towards the hotel. Furthermore, the overall business structure of the business will involve different employees and departments by sub dividing employees based on their efficiency to deal in efficient manner with the guests. Besides, on the other hand, business will certainly tend to employ local inhabitants to achieve cost efficiency over their operation, as local employees of the business were much familiar with the local culture of the nation to properly understand the needs of the targeted customer (Okumus & et. al., 2010; Wood & Brotherton, 2008). SWOT Analysis Possible Strengths Increasing trend to enhance the overall profitability because of growing attractiveness of the people over Hong Kong for their tours Furthermore, the government provide significant level of support to the hotel industry to diversify the tourism attractiveness, as Hong Kong is regarded to be one of the premium tourist destination New opportunity for developing the business Rich cultural heritage Possible Weakness Requirement of the arrangement of high capital and formalising the legal formalities to start up new business Laciness of adequate manpower support Laciness of experience in working such industry Lack of recognition in the mind of the tourist High and increased cost of operations during the initial phase Need of constant creative materials Possible Opportunities Diversify business if the profitability and recognition increases New developing market for expansion Rising per capital income of the inhabitants and attractiveness of tourism Possible Threats High competition from national, regional and global business Fluctuation in economic conditions Frequent changes and alteration in the taste and preferences of tourists Political turbulence Laciness of trained workforce and manpower Industry Analysis Possible Target Groups The business is trying towards establishing the hotel in Hong Kong, targeting the tourist visiting the nation through providing appropriate services. Moreover, in the general prospect it has been ascertained that every traveller have their unique tastes and preferences, which the hotel business fails to suffice and key reason behind remains that most of the hotels fails to provide packaged services, as per the need of traveller’s. Thus, focusing on the aspect of providing most attractive and customise packages to the travellers will increase substantially the business in the nation and sufficing the needs of travellers. Nevertheless, the target customer group based on the behaviour and offering of the business will be based on the need and budget of customers. Competitors The fundamental object of starting up new hotel in Hong Kong is to succeed greater amount of profitability. In this respect, competitor and its strategy is an integral factor that influences the ultimate objective of the business. Competitors over the market of Hong Kong will be major point of threat for the business in respect of dealing with wider range of products and services and proposed business will have to face significant challenges from the same. For instance, the local hotel agencies of business are highly renowned in the mind of the travellers, which could be possibly proved to be significant hurdle for the business. Therefore, for the business to sustain in the long run, it will require to develop innovative ideas prior to planning for the new venture. Thus, in this regard, it has been highly important for business to differentiate their offering through providing attractive services to create and develop brand awareness in the mind of the target groups (Tavitiyaman & et. al., 2011). Correspondingly, the local hotels and restaurants offering cheaper food and beverage and providing facilities to the tourist will prove to possess significant challenges to the business, as the bargaining power of local encourages customers to shift their perception. Furthermore, with the changing interests of tourists and expansion in the tourism the perception over the hotel industry has correspondingly increased and enhanced the bargaining power of customers. In this consideration the business, need to emphasise over developing good customer relationship and product differentiation approach. Besides, the consideration of fact will not only allow business to ensure high level of profitability but also increase possibility to retain their position for the long-term (Tavitiyaman & et. al., 2011). Possibility of New Ventures In the current scenario, it has been evidently ascertained that tourist market has been significantly growing rapidly in the Hong Kong economy. Additionally, changes in the dimension of social structures, economic frameworks and attractiveness of most of the tourist places in the nation will also likely to increase the possibility of flow of travellers. Correspondingly, Hong Kong is regarded to efficiently provide one of the finest hotels to the tourists that will likely to increase the numbers of travellers in the nation. Furthermore, the key reason because of which people are likely to travel to Hong Kong includes enjoying Disneyland market and relaxing atmosphere that people wants among other factors. Thus, it is expected that with the intensity of people to travel more in future will likely make business plan of the setting up hotel business in Hong Kong significantly profitable, with wider possibility of growth (Hong Kong Trade Development Council, 2015; Blanke, 2007). Product/Service Strategy As affirmed earlier, that the proposed hotel business will target customers having main emphasis over tourists visiting Hong Kong market through its range of offering and services based on addressing needs of travellers. Besides, wider ranges of products and services provided by organisation will quite likely enhance the possibility of profitability. Expectedly, ranges of offering and services will help the proposed business to serve the target customers with adequate customisation. Moreover, the travellers and guest perception regarding their preferences and tastes differs, which cannot be sufficed through providing similar offering to customers. In this regard, to suffice the demands of customers, business needs to customise their offering in respect of their lodging, event planning, transportation, and other additional fields of tourism industry through differentiating their services as per the buyers’ preferences. Correspondingly, providing facility like bar, swimming pool, gym, park, and boutiques services will possibly be an efficient approach to attract more and more tourists towards the hotel (Sharma, 2001). Marketing Plan Products/Services Travellers mostly prefer hotels that deemed to provide most convenient services designed as per their tastes and comfort and importantly within their budget. Additionally, keeping unique needs of the travellers and guest visiting the nation into prior consideration, the proposed business aims towards serving them with wide range of offers, rather than being constrained on defined tour packages that are offered by traditional planners. Furthermore, the proposed business will also deliver additional services including tickets of flights, buses, and others that significantly demanded by tourist and will help in attracting them towards Hong Kong. Furthermore, it has also been expected that if the hotel business tends to be successful in the nation then the business will diversify their business into the other segments as well (Hara, 2008). Besides, the hotel will be decorated with collectibles local artefacts and cultural heritages arts that will likely to attract more and more tourist towards hotel along with serving quality food and beverage items will be probably offered. Hence, in this regard, it can be affirmed that the prospect business will provide range of services as per the suitability and satisfaction of the customers to fulfil the needs of the tourist (Bird, 2011). Price In regards to determining price of products/services, which business will likely to offer reasonable services to the tourists, through considering competitors pricing and offering. However, the price will highly depend on the services that the customers are likely to avail from the hotel. Furthermore, in this regard, during the initial stage of incorporation of the business provision of discount to the prospect tourism that is likely to avail the service of hotel will also be an attractive approach towards the hotel. Additionally, the price policy of the business will be dependant over the season of tourism in the area. In this regard, it can be affirmed that during the peak seasons the price will be comparatively higher than the off seasons, but maintaining a margin of profitability to attract more and more tourist rate in comparison to the local competitors in such region (Sellars, 2009). Place The target market place of the proposed business will be near Tsim Sha Tsui city. In this regard, effective marketing will be highly essential to make the tourist aware regarding the hotel. In this regard, the primary method of gathering recognition through advertising near railway stations, airports, and other places travellers mostly visit will be effective. Thus, Tsim Sha Tsui can be considered as the potential place for the business to setup hotel, which is considered one of the attractive places for the tourists. Furthermore, the city is expected to witness significant flow of tourists throughout the year, which will provide significant scope to business to generate higher profitability (Boland, 2015). Promotion The promotion of the hotel will be will be made through putting banners and hoardings to reconcile the name of hotel to tourists mostly in the region including airports, bus terminus, railway stations, other attractive spots of tourist. Furthermore, in this regard, the hotel can also utilise the means of social media, which is in current scenario the best search engine for the tourist prior to planning for the tour. Besides, the approach of using the social media as the tool of advertisement is regarded to be an efficient medium communication to connect well with probable customers. On the other hand, utilising the local radio station could also prove to be efficient method of promotion of the hotel. Besides, the method of promotion will be highly efficient because travellers regularly travel using cabs, buses, flights, and other facilities that usually have the facility of radio. Thus, in this regard, it can be affirmed that radio could also be one of the efficient mean of communication. On the other hand, promotion of hotel using local newspaper and magazine could also be a highly significant approach, as most of people read on the daily basis (Hiduke & Ryan, 2013). Financial Plan Finance is the lifeblood of any business and regarded to be the key aspects of success. In this concern, financial plan has been developed for the proposed business providing an estimation of the expected cash flow over the entire year of its establishment. Considering the operation of the business it has been estimated that around £20,000 as the cash in hand will be required to start the business in the area. On the basis of estimated cash inflow and outflow of the proposed business, the cash flow statement, possible profit and loss position and estimated fund to start up new business is depicted below. Cash Flow (12 months) Hotel Z Fiscal Year Begins: Jan-15 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Total Item EST                             Cash on Hand (beginning of month) 20,000 -6,000 -15,200 -4,250 5,000 15,000 20,250 29,700 37,570 47,290 53,965 64,215 267,540                             CASH RECEIPTS                           Cash Sales 25,000 30,000 40,000 45,000 48,000 50,000 54,000 55,000 53,000 50,000 55,000 60,000 565,000 Any other cash receipts 5,000 5,000 10,000 12,000 10,000 9,000 9,500 9,000 9,700 9,300 10,000 8,000 106,500 TOTAL CASH RECEIPTS 30,000 35,000 50,000 57,000 58,000 59,000 63,500 64,000 62,700 59,300 65,000 68,000 671,500 Total Cash Available (before cash out) 50,000 29,000 34,800 52,750 63,000 74,000 83,750 93,700 100,270 106,590 118,965 132,215 939,040                             CASH PAID OUT                         0 Purchases (merchandise) 10,000 7,000 5,000 4,500 4,000 5,000 3,000 3,000 2,000 1,500 1,000 10,000   Salaries & Wages 10,000 14,000 14,000 15,000 15,000 16,000 17,500 18,000 16,000 14,500 15,000 18,000   Outside services 5,000 3,000 2,000 5,000 3,000 4,000 5,000 3,500 4,000 3,500 4,500 5,000   Supplies (office & oper.) 15,000 5,000 5,000 7,000 8,000 8,000 9,000 10,000 9,000 9,500 8,000 15,000   Advertising 3,000 3,000 2,000 2,000 3,000 3,500 3,000 2,500 2,000 2,200 2,500 2,400   Car, delivery & travel 2,000 1,500 1,000 2,000 1,500 2,000 2,500 2,200 2,100 1,800 1,900 2,000   Accounting & legal 1,000 700 500 1,000 1,000 950 900 800 750 1,000 1,300 1,000   Rent 5,000 5,000 5,000 6,000 7,000 8,000 6,500 9,000 10,000 11,000 12,500 13,000   Telephone 350 350 350 350 400 350 500 650 700 650 700 900   Utilities 500 500 500 500 600 750 650 800 900 1,000 950 1,200   Insurance 700 700 700 800 750 900 1,000 900 950 1,000 1,200 1,150   Taxes (real estate, etc.) 700 700 750 800 750 800 950 900 1,100 1,150 1,200 1,500   Interest 500 500 500 500 600 700 750 800 900 1,100 1,200 1,250   Promotional 2,000 2,000 1,500 1,800 2,000 2,200 2,300 2,500 1,900 1,975 2,000 2,500   Miscellaneous Expenses 250 250 250 500 400 600 500 580 680 750 800 900   TOTAL CASH PAID OUT 56,000 44,200 39,050 47,750 48,000 53,750 54,050 56,130 52,980 52,625 54,750 75,800 635,085 Excess or Lack of Cash at the end of the month -6,000 -15,200 -4,250 5,000 15,000 20,250 29,700 37,570 47,290 53,965 64,215 56,415 303,955   Financing Required 6,000 15,200 4,250                     ENDING BALANCE (Target) -6,000 -15,200 -4,250 5,000 15,000 20,250 29,700 37,570 47,290 53,965 64,215 56,415 303,955 Break Even Point Profit and Loss statement Business: Hotel Industry Period:   Per month REVENUE     Sales target (Rooms)   100 Price per room (£)   500 Sales income:   50,000 EXPENDITURES     Variable costs:     Food, beverages, housekeeping cleaning supplies   7,000 Flower arrangements   2,000 packaging   2,000 Administration & General   5,000 Total   16,000 Gross profit:   34,000 Fixed costs:     Salaries   10,000 Rent   5,000 Bills   1,100 Insurance   700 Marketing   1,000 Other costs   2,000 Total   19,800 net profit:   14,200 VC per unit   160 Breakeven volume   58 Required Start-Up Funds for the Business Required Start-Up Funds Amount Totals Fixed Assets Real Estate £5,000.00 Buildings 5,600 Leasehold Improvements 4,500 Equipment 500 Furniture and Fixtures 600 Vehicles 300 Other Fixed Assets 150 Total Fixed Assets 16,650 Operating Capital Pre-Opening Salaries and Wages 10,000 Prepaid Insurance Premiums 700 Beginning Inventory 1,000 Legal and Accounting Fees 1,000 Rent Deposits 5,000 Utility Deposits 500 Supplies 15,000 Advertising and Promotions 5,000 Licenses 500 Other Initial Start-Up Costs 500 Working Capital (Cash In Hand) 2,000 Total Operating Capital 41,200 Total Required Funds 57,850 Sources of Funding Amount(percentage of total financing) Amount Totals £ Owners Cash Injection 34.57% 20,000 Outside Investors 10.37% 6,000 26,000 Additional Loans or Debt Commercial Loan 55.06% 31,850 Total Sources of Funding 1 57,850 Operations Plan Furthermore, the effective planning through proper identification of the possible risk factors involved with staring up the new venture is highly essential. Contextually, business will be effective and successful as its prior object and goals, through adopting certain strategies. In this regard, the business needs to form different departments, wherein marketing department will enable the business to provide informing and attracting tourist towards the hotel. Notably, the operational department of the business will primarily focus on sufficing the needs of tourist through necessary hospitality services. Furthermore, in order to provide due services to the target customers business need to develop contractual agreements among different parities that could provide needful services to the target groups. Moreover, including the finance department in the business that consists of various financial specialists will help the business to mitigate the financial needs of the proposed business. Besides, human resource department will emphasise towards hiring talented employees and workforce. On the other hand, risk identification and management could also be one of the operational issues the business needed to emphasise (Wallace, 2004). Conclusion Based on the overall discussion it can be affirmed that in order to become successful in Hong Kong market business needs to develop defined objectives and goals. Additionally, the business requires define their target group and utilise the strengths and opportunities to sustain the business. Accordingly, business need to indentify the opportunity of growth in the market place though in-depth industry analysis that possibly led the business to determine the possible profitability. Moreover, the basis of developing the appropriate marketing planning through considering the product, price, promotion and pricing is important for the business. References Blanke, J., 2007. The Travel & Tourism Competitiveness Report 2007: Furthering the Process of Economic Development. World Economic Forum. Boland, R., 2015. 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