Feasibility Analysis of Brams Restaurant - Case Study Example

Feasibility Analysis Name Institution Name Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Driving Forces behind the Business Idea 4 How the Premises for the Business will be Acquired 5 The Production/Service Process 5 The Operational Objectives of BRAMS RESTAURANT 7 Product Differentiation 8 Market Analysis 9 Production process 10 Food is cooked and when a customer enters the restaurant he/ she orders the food from the waiter. The waiter serves him food. After food is served the customer pays. 10 Graphical layout of the restaurant 10 Strategy and Implementation Methods 11 The Targeted Market Segmentation Strategy 12 Technical Feasibility of the Business Idea 12 Inventory 13 Regulatory and Legal 13 Number of Employees 14 Personnel Projection 14 Seasonal Variations 15 Conclusion 15 References 16 Executive Summary Restaurant business was the most viable business activity that I could carry out at the one of Florida’s basement floors. The name of the business will be known as Bram’s Restaurant. The restaurant will also feature a cosy dining room marked with an elegant lounge. There are various advantages and disadvantages as to why the business will have to be located where it stands currently. Various processes will be used before the final food reaches the consumer. In order to please large groups of people and offer customers extra comfort, Bram’s restaurant will strive to ensure that they prepare special platters for such clients. Bram’s restaurant aims at having a large international menu to cater for the needs of its wide clientele so that they can be able to select from a wide variety. Introduction After researching the market, I arrived at a conclusion that the restaurant business was the most viable business activity that I could carry out at the one of Florida’s basement floors. The name of the business will be known as “BRAMS RESTAURAUNT”. I have opted to locate the business in one of Florida’s Basement Floor because it has a year-round economy. Apart from that, this location is viable for the location of the BRAMS RESTAURANT because the pace is in dire need of a friendly and warm place having excellent food and we therefore strongly belief that my business entity will be more capable of providing such a service so easily (Arvaniti, et al, 2003). BRAMS RESTAURANT will become a place where people will always know that they will get the best and the best of everything. The restaurant will also feature a cosy dining room marked with an elegant lounge. In addition to that, BRAMS RESTAURANT will also feature comfortable furnishings and a decor that will have soothing warm tones in order to attract customers. Given the fact that there is no perfect restaurant offering quality food services, BRAMS RESTAURANT expects to capitalize on this by making the business place to become a perfect stop for individuals to come in and a drink, a small business meeting or for a drink. Driving Forces behind the Business Idea Driving forces implies those external factors that have a great impact on an industry’s performance. It may include but are not limited to increasing the number of baby boomers who are known to have both the time and the money to spend, reduction of air travel costs, a desire of seeing a different world and increasing of the household’s income (Berry, 2004). There are various advantages and disadvantages as to why the business will have to be located where it stands currently. For instance, the location of the business at the proposed place will give the low-income earners an opportunity to access quality products at very competitive prices. How the Premises for the Business will be Acquired The business owner intends to raise the capital for acquiring the business premises through going for a bank loan and even using the investors to boost his initial start-up costs. The premises will therefore be built or constructed on the purchased land and all the legal and procedural rules observed to the later (Berry, 2008). The Production/Service Process Various processes will be used before the final food reaches the consumer. For instance, upon buying the raw materials that will be used for cooking, they will be first washed to ensure that any germs and dirty are removed to some extent. Eventually, all the relevant stages of cooking quality products will be followed until when the final food products have been served to the company’s clients. BRAMS RESTAURANT intends to purchase most of the equipments in the kitchen and therefore it does not intend to lease because leasing is quite expensive. BRAMS RESTAURANT will come up with concrete plans aimed at expanding the company’s facilities in order to meet or keep the anticipated growth during the first 5 years in the business operation. Regular maintenance will also be conducted in the company (Dahm, 2009). The prices of BRAMS RESTAURANT will be actually competitive with the prices of other upscale restaurants located within Florida. The business will also strive to ensure that it gives a higher perception of value as opposed to its competitors when offering its customers service, food and even entertainment (Chambers, 2008). The restaurant and the lounge as well will be both open on full time basis from Monday up to Sunday and to attract new clients to our business; we shall present them with new themes. The restaurant is bound to be fine because it will have a fine dining room presented in a cosy environment. The restaurant will also be lively because it will be marked by fresh flowers, amazing art works, soft music and warm colors. The business intends to have a garden and patio setting that will present the clients with a casual atmosphere and fun for the summer crowds (Buzza, et al, 2009). BRAMS RESTAURANT aims at having a large international menu to cater for the needs of its wide clientele so that they can be able to select from a wide variety. In addition to that, BRAMS RESTAURANT aims at providing its clients with a full catering service that will offer them each and everything right from the desert to the table settings. As a result, the business projects to have its total sales allocation to approximately 85% for the sales in the restaurant while it expects to make an approximate of 15% for the catering sales. The combined costs emerging from the sales will be approximately 33 per cent thus leading to a production of a gross profit of 67 per cent for the total sales (Buzza et al, 2009). The most vital issue for BRAMS RESTAURANT is its financial success and thus I highly believe this will be comfortably achieved through offering of excellent food and high quality service that has an interesting twist. The business entity aims at creating good financial projections that will be based on its knowledge of the area and on its knowledgeable workforce. It is therefore highly projected that with a start up expenditure of about $300,000, then it will be possible for the business to generate a total of $1,000,000 in sales during the end of the second year and thus produce good net profits after the end of the third year (Davis, et al, 2009). To initiate the business, I shall seek a loan guarantee of $300,000 having an 8 per cent interest rate. I shall also invest a total of $50,000 of my own personal capital and further strive to raise another additional $120,000 from the investors. Given the fact that that the start-up of most restaurants are normally so speculative, it is my strong commitment and belief to the business’s investors that we will be able to pay a predictable and generous rate of return while not also strangling the operational cash flow of the business. The Operational Objectives of BRAMS RESTAURANT During the first three years of the restaurant’s operations, it intends to have the objectives mentioned below: Averaging the sales of the company to be between $ 1,000, 000 to 1,200,000 annually Keeping the costs of food to be under 35 per cent of revenue Keeping the labour costs of employees to be between 24 to 29 % of the company’s revenue Stay as a small restaurant while also offering both excellent food and service as well. Promotion and expansion of leave Expansion of the company’s advertising and marketing in and around Florida and in other states as well depicting BRAMS RESTAURANT as being the best tourist destination across the whole nation. Achievement of about 12% of Return on Investment (ROI) to the investors during the first 2 years of the business operation and 15 per cent during the next 3 years (Heaton, 2005). Product Differentiation BRAMS RESTAURANT expects to provide unique foods and services to the clients through various ways like: Through creating a range of innovative and unique fining environment, which will ensure that the business is well differentiated from its competitors. This will therefore make it possible for BRAMS RESTAURANT to stand out from the rest of the restaurants in the vicinity because of its unique decor and design. BRAMS RESTAURANT will aim at provision of good product quality through offering its customers with not only quality meals but also striving to ensure that great service is offered in a great environment (Knudson, 2007). Ensuring that the restaurant’s menu is appealing to a varied and wide clientele and it matches international with a unique and interesting twist. The restaurant will strive to have some “special theme nights” like Local Artists’ Openings, Midsummer Parties, Easter Dinners, Labor Day Weekends, Special Ethnic Food Nights, Fourth of July Celebrations and Wine Tasting Dinners. The presentation of such events by the restaurant will make it possible for it to attract a diverse client base (Leahy, 2010). Ensuring that the costs are controlled at all times without exception. Because of intense competition, BRAMS RESTAURANT will look for various strategies to ensure that their products and services and the business place are differentiated in order to not only achieve but also maintain its competitive advantage. The fact that most of the restaurants located in Florida do not have such an atmosphere and concepts presents BRAMS RESTAURANT with an opportunity or a chance for it to enter into a niche in the market that is very profitable. Market Analysis BRAMS RESTAURANT will focus on both tourist and local restaurant seekers or individuals who have a strong desire of consuming good food and having a very fascinating atmosphere. The business will therefore be located 70 miles away from the inside of the Florida city and it will therefore aim at developing a new look which will be able to attract a large number of affluent residents from the community. Indeed, the developer has already broken the ground to construct approximately 420 residential units, which will also comprise of a 2-tier garage occupying about 100000 square feet, a restoration of the “Boardwalk” (McIver, 2010). The plot on which BRAMS RESTAURANT will stand will have about 1200 parking spaces, 350 residential units and a bike path, which will all be housed on about 20 acres of prime land. Through the establishment of this place in such an environment, then it is quite apparent that it is going to completely and constructively change or alter the total image of the city and provide a major economic growth to the city as well. The BRAMS RESTAURANT plans that it should be capable of hosting 70,000 guests annually while the panning department of the company will have more than two rooms (McIver, 2010). Production process Food is cooked and when a customer enters the restaurant he/ she orders the food from the waiter. The waiter serves him food. After food is served the customer pays. Graphical layout of the restaurant Production efficiency is an important aspect in any restaurant that is after profit-making. The kitchen is located at the centre since this is the central place in the facility. Service area is adjacent to where food patrons sit so that there less time and distance is spent between the service area and patrons. This will help in fast delivery of food to the customers. Staff dining is located in the right hand corner and it is not close to the service area compared to client’s position. Male staffs also have their designated place in the design. Control, dry store as well as cold room are located on the left side. The control, dry store and cold room are close to the kitchen so that there can be more productivity compared to when they are not near the kitchen. Strategy and Implementation Methods BRAMS RESTAURANT intends to use a simple strategy of giving individuals a range of interesting and excellent food in a very appealing environment towards a varied and wide group of people who have been successful. The restaurant will then focus on the maintenance of quality and the creation of a strong business identity in its area of operation. The major marketing aim of the business will therefore to increase or enhance the awareness of clients in the surrounding community that borders the business (Pinson, 2001). The business entity will therefore direct all of its business programs and tactics to the goal of making explanations regarding what the business does and whom they are. In addition to that, BRAMS RESTAURANT intends to keep high standards and execute the business concept to ensure that the word of mouth becomes the organization’s major marketing force. To ensure that these objectives are achieved, BRAMS RESTAURANT intends to create an entertaining and appealing environment not only presenting clients with exceptional prices but by also offering them with unbeatable quality food products and its linked services. Being a very friendly and exciting restaurant, the business aims at becoming the talk of town within a very short period of time (Radtke, et al, 1998). The Targeted Market Segmentation Strategy BRAMS RESTAURANT will place its focus on the attraction of both a wide and diverse clientele base aged between the ages of 25 to 60 years having an annual income of approximately $30,000. The business will therefore target happy couples, businessmen, tourists having money, high-end singles, compulsive spenders and wealth image seekers as its potential market (Slezak, 2009). There is need to focus on these particular groups since these are the correct type of individuals who are known to frequent other bars and restaurants located within BRAMS RESTAURANT area. I therefore fully belief that these are the people who are readily willing to spend their hard earned money on good service and good dining at a valuable price. It is quite apparent that I am well aware of the clients’ characteristics with the available demographics. The characteristics of the organization’s clients will be therefore people who are entertaining, sophisticated and creative diners (Slezak, 2009). Technical Feasibility of the Business Idea Based on the information presented in the case study, it can genuinely be asserted that this technical feasibility aimed at operating a business in the area. It has indeed been ascertained that the business entity will actually have lots of resources and facilities aimed at provision of goods and services to their clients at relatively low costs. This will therefore be a clear pointer that there is need of providing products, which will be capable of satisfying the needs of clients with much ease. Indeed, research carried out has evidently portrayed the fact that there is a significant and unsatisfied demand for provision of quality food that the business intends to channel into this green environment. My ability of running the business despite the lack of my experience is therefore highly pecked on the high demand for quality food products and its associated services (Slezak, 2009). Inventory In any organization inventory managements is a fundamental aspect that determines the profitability of the organization. The facility will use modern inventory control approach, which often relies on radio-frequency identification (RFID) and barcodes tags to give automatic identification of the inventory objects (Slezak, 2009). All the objects in the facility will be inventoried since this will help in reducing chances of losing the facilities materials. In the facility inventory, control will be coordinated in the accounting department. Nonetheless, other departments can conduct inventory of supplies for their advantage. Main inventory will be conducted through department head. Better control will be attained when inventory control staff is from an outside department. The facility intends to enhance inventory control through use of serial numbers, which will be marked on manufacture’s plate on the equipment. Nonetheless, if there will be no such a serial number then each department will have a unique serial number (Slezak, 2009). Regulatory and Legal The facility will acquire hotel operating licence as required by the state regulations. The licence has already been applied and it will be released soon. Bram’s restaurant will also acquire the necessary environmental permit from regional, local, state and federal bodies. Bram’s restaurant will also acquire food-catering license it will be selling food. Number of Employees Bram’s restaurant will strive to ensure that they have the best services in the entire state. This can be achieved by having a competent team of employees who are well versed in different fields of expertise and have long experience in the sector. The management will also ensure that it recruits personnel with good customer relation so that there can be a high customer retention rate. Bram’s restaurant will use different mediums to advertise its vacancies, for instance, internet, print, radio and TV’s so that we can have many people applying for the vacancies hence we will be able to get the best (Slezak, 2009). The new employees will have to undergo a three months’ probation period, this will help in determining the best employees for the organization. The three months is in line with the regulation of the state. After completing probation successful candidates will be given a six months contract, which can be renewed. After completing 12 months while on contract the firm will review his terms and if he has shown consistent progress, he will become staff of the restaurant. The main factors that will be considered when assessing employees are their level of input in the organization. Appraisals will be conducted according to the terms of employment of the employee since there will be various terms of employment in the organization. When on probation the employees will have a monthly salary of $900. However, after completing probation employees salary will be based on performance levels in the organization (Pinson, 2001). Personnel Projection Personnel projection Year 1 Year 2 Year 3 Year 4 Year 5 Accountant 3 3 4 4 4 Engineer – Plant 5 5 6 6 6 Security 3 3 4 4 4 Food/Beverage/Catering 6 6 7 7 7 Marketing 2 3 4 4 4 Sales- Convention 2 3 3 3 3 Convention/Conference 2 3 3 3 3 Education/Training 2 3 3 3 3 Total 25 29 31 31 31 Our main emphasis will be food/beverage and catering since this is the heart of the Brams restaurant. This will be the people that will help us get more customers through retention and referrals. Brams intend to have between 2 to 3 trainees that will help in imparting skills on recruits as well as helping them how to go about various issues in the restaurant (Pinson, 2001). Seasonal Variations Bram’s is prepared for seasonal variations since the sector always experiences high and low seasons. During high season, each department will have one extra employee who will be on a two months contract. Since low seasons are expected to occur, the restaurant will have to plan on a diversification strategy so that they can be able to cushion themselves against the low season (Pinson, 2001). Conclusion Concisely, the business has technical feasibility since; the restaurant business was the most viable business activity that I could carry out at the one of Florida’s basement floors. Bram’s restaurant intends to purchase most of the equipments in the kitchen and therefore it does not intend to lease because leasing is quite expensive. Bram’s restaurant will come up with concrete plans aimed at expanding the company’s facilities in order to meet or keep the anticipated growth during the first 5 years in the business operation. The menu of Bram’s restaurant will be changing after a period of 3 to 4 months but the favourites will be retained. The restaurant and the lounge as well will be both open on full time basis from Monday up to Sunday and to attract new clients to our business; we shall present them with new themes. The service at the restaurant will apart from being very friendly will be correct and relaxed. Bram’s restaurant aims at having a large international menu to cater for the needs of its wide clientele so that they can be able to select from a wide variety. Bram’s restaurant expects to provide unique foods and services to the clients. Bram’s restaurant intends to use a simple strategy of giving individuals a range of interesting and excellent food in a very appealing environment towards a varied and wide group of people who have been successful. References Arvaniti, F., Faidon, M., & Antonis Z. (2003). "Organic food: nutritious food or food for thought? A review of the evidence." International Journal of Food Sciences and Nutrition, 54, 5 Berry, T. (2004). Hurdle: The book on business planning. 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