SWOT Analysis of Elegant Dishes Restaurant - Case Study Example

Business plan: Elegant Dishes Restaurant Name: Course: Instructor: Date: Executive summary Elegant Dishes Restaurant is an eating joint, located within the Australian East Resort and aimed at serving nutritious and high quality dishes and fast foods within the Australian East Coast Resort. The restaurant will specialize in both main dishes as well as fast foods (hot and cold sandwiches) alongside special recipes for indigenous Australian dishes. The restaurant hopes to provide mouthwatering and hard to find recipes at affordable prices to the various persons who frequent the resort. The keys to success for Elegant Dishes Restaurant will be quality of service and an excellent location, often accessible to numerous frequent visitors, tourists and organizational functions Contents Executive summary 2 Company description: Elegant Dishes Restaurant 4 Objectives mission 4 Mission statement 4 The industry 4 Business concept 5 Target markets 5 Environmental analysis 7 Competitors 7 SWOT analysis 8 Pricing, distribution strategies 9 Promotional plans 10 Promotional budget 10 Operational plan 11 Recruitment 11 Training 11 Management and organization 12 Key employees 12 Professional and advisory support 14 Startup expenses and capitalization 14 Financial plan 16 References 20 Appendices 22 Company description: Elegant Dishes Restaurant The proposed business will be known as Elegant Dishes Restaurant located within the Australian East Resort. The main involvements of the business will be to offer a breakfast and lunch menu, fresh cold cuts, drinks, and take-out prepared dishes within the resort. Objectives mission i. To provide customers with high quality meals at reasonable prices with exemplary service ii. To be the premier destination home-style restaurant within the Australian East Coast Resort (Get the exact name of the Resort) iii. To achieve an annual revenue turnover of not less than 45% Mission statement Our mission is to provide a unique and exemplary dining experience, a similar service to a home setting. We will work hard to realize this by providing quality meals at reasonable prices and treating each of our clients with dignity and respect at all times. The industry The proposed business will operate the hotel and catering industry. Although there are similar businesses within the region of establishment of the proposed business, there is no such enterprise located within a resort despite the huge population and demand for the same services within such locations. The establishment of Elegant Dishes Restaurant will thus be such a timely idea aimed at capitalizing the existing entrepreneurial gap. The business idea will also be further enhanced by the unique recipes and high quality service to serve as competitive advantages. Business concept Target markets Elegant Dishes Restaurant intends to cater to a wide group of people. We intend to make everyone feel welcome and relaxed in a cozy atmosphere alongside a variety of affordable menu. In fact the core production mission for the business will be to offer "something for everyone" on our menu. Our market therefore consists of the following groups: Business people: these refers to entrepreneurs who work all day and at times stay overnight in the city. As a result, this group of people needs a place where they can relax and use the money they have tirelessly worked to earn. In fact these will be major customers for drinks, food and tips. Family outings and happy couples: the restaurant will have within its inclusion, a provision for an intimate, romantic, sophisticated atmosphere that will make it a number one choice for couple dates. We will strive to make a name as a place where people can meet and subsequently develop networks. Family outings are often characterized by extensive fun and heavy eating. In this place, the Elegant Dishes Restaurant will provide a wide range of affordable meals to cater for such family functions. High-end Singles: We will work towards attracting such people through our decor and layout. Our exceptional menu, striking artwork, wine tasting evenings and events, excellent service and engaging clientele will offer the utmost feeling of being in "the coolest place" hence higher chances of winning such people to dine in our facility. Tourists: tourists often frequent Australian East coast resort for relaxation, drinks and accommodation. Elegant Dishes Restaurant will thus seek to attract such vacationers especially during summer months of May through September. Conferences and meetings: The resort is often chosen for such functions conferences and meetings by institutions organizations. Elegant Dishes Restaurant will thus be on the forefront, working in close proximity with the resort management to provide catering facilities in the event of such conferences or meetings held within the resort. This can be presented as shown below: Environmental analysis Competitors The proposed business expects competitions from the following players within the same industry L’Amour De La Femme Restaurant China City Restaurant Mojo’s Rex Café Rex Café and Mojos are on the same street with Elegant Dishes Restaurant. Mojo’s is a low capital business and the workers have no good public relations. They have been into the business for 5 years. The firm has specialized in outside catering services and functions. L’Amour De La Femme Restaurant is directly opposite the proposed business. The firm uses modern technology that is use of computers to locate position and prices of their products. The firm also offers relatively high discounts to their customers from all over Australia. The workers have good public relations, they are skilled and experienced. This is the firm that will offer the stiffest competition to the proposed business. . China City Restaurant is a hundred meters away from the proposed Elegant Dishes Restaurant. It is on the same street, it has good public relations, high capital business, has a good number of customers but keep on changing its employees. The products sold are genuine but their prices are slightly higher as compared to other restaurants around. Elegant Dishes Restaurant thus expects stiff competition in the course of its operation. In order to beat this competition, the proposed business will need to put certain strategies in place to ensure it succeeds in the market. It aims at creating good public relations in order to attract and retain first time customers. The firm will also pay for a reserved parking bay for the customers alongside a wide range of foods. With the above analyzed strength and weaknesses of the business competitors, the proposed business will survive by taking the following measures. Selling foods at affordable prices but at a profit Employ trained employees and retain them when need arises. Introduce new and unique menus which aren’t in the existing market. Developing a good customer relation by serving them effectively and ensure that customer needs come first. Make effort to retain first time customers. Ensuring that the business is located in an accessible area. Employing a number of means of advertising and promoting on strategies to keep on attracting more customers in bid to maximize profit SWOT analysis Strength: The restaurant will be located in a resort frequented by large numbers of both natives and tourists hence readily available population market. Weaknesses: There exists stiff competition within Bunbury especially in the hotel and catering industry. The proposed business will be braced for major competition for the existing customers Opportunities: There is no any other restaurant within the resort hence an excellent location for the proposed business Threats: except for the manager, the remaining employees have never had experience in a busy restaurant environment. This might really hamper their effectiveness hence drawing back the general performance of the whole enterprise. Pricing, distribution strategies The price setting for the proposed business will consider the following factors I. The cost of the products II. Labour cost III. Existing prices in the market i.e. from competitors IV. Government price control, V. Competitors selling price VI. Quality of the products VII. Customers and distributors profit margin. The business will use market penetration pricing whereby for the first three months the products will be sold at slightly lower prices than those sold by the competitors in order to attract more customers. Thereafter after it has gained customers the prices will be the same as those of the competitors. As more customers get attracted to the restaurant, the price will be set slightly higher to maximize profits. Distribution strategy The proposed business will mostly use road transport to bring in stock into the business as well as when required to offer outside catering services in various venues. This mode of transport will not be without shortcomings including high fuel prices, Poor road network whereby most roads are impassable especially during rainy seasons. In order to solve the above problems, the proposed business will do most of the deliveries at off peak hours when there is less traffic so as to spend less money on fuel. Promotional plans The proposed business will be advertised through banners, printed name hanged in the major streets with Bunbury. These are the most busy and densely populated highways in the city hence more people will learn of the new business venture in town. The business will also use posters, brochures, newspapers in classification column especially the popular Newspapers. The proposed business also intends to continuously advertise through radio for one month, especially before news starts at 9.00 pm and 7.00 am news. Promotional budget Method of Advertisement Frequency Cost per Frequency Total Cost Posters (500 copies Radio Newspaper Banners 10 times 10 times 2 times @ $ 3 @ $1 00 @ $ 4 00 @ $1500 $ 1 500 $ 1000 $ 4000 $ 3000 Total 30 times $ 9 500 Operational plan Recruitment The management of the resort alongside the manager of the proposed business will seek to obtain cooks and chefs from the reputable hotel and catering colleges within Bunbury. By so doing, the management will easily obtain fresh graduates who might not demand much on their first job in terms of pay. This will be through creating posters which shows the required qualifications, responsibilities and expected salary to be offered for the successful candidate. The posters will then be hanged on notice boards of various institutions. Interviews will be conducted to the short listed candidates in order to select successful candidate and most qualified. For the rest of the office Accountant, advertisement will be done to the public. Training After selecting the best candidates for the various responsibilities within the restaurant, there will be job induction in order to acclimatize the employees to the job. The induction will be done by the manager who will have gained knowledge from other firms. The induction process will be an on the job training to introduce each employee to his or her duties and responsibilities as well as organizational expectations and performance standards. The proposed business intends to give extra training on employees especially where duties and responsibilities may slightly overlap. For instance, the receptionist will be further trained on accounts work and book keeping in order to achieve the objectives of the proposed business. The training shall be on cost sharing where by each employee shall be trained at a time. Management and organization Key employees i. The Manager The business will be run by senior restaurant manager, Ms. Jane Ericson. Ms. Ericson, who has been involved in the cooking profession all her life and has acquired a local reputation for creating inventive and tasty recipes focusing on Northwest cuisine. For the past seven years she has run a cooking class business out of her home and will have her first cookbook published next year. Desiring to have an independent business that would provide more income, Ms. Ericson attended Columbia River Community College where she obtained a BS in business in preparation for starting her own deli. The main duties of the manager include: Overseeing the day to day operation of the business. Supervisory services. Verbally advertising the business through talking to the friends and offering business cards. Assist in organizing promotions and advertisements. Doing market survey. Planning for expansion and future of the business. Negotiating for loans and credit facilities for expansion. ii. Accountant Qualifications Have experience in customer service. Have knowledge in accounting and book keeping Must have excellent communication skills and able to interact with customers. Must be computer literate. Duties and responsibilities i. Prepare budgets ii. Displaying products. iii. Receiving and attending to customers. iv. Receive cash for daily sales v. Book-keeping vi. Monitoring the needs of the customers. vii. Be in a position of explaining to customers the various available alarm systems, their electrical ratings and their effective applications. Talk to customers and people in general in a bid to try to marker the business products. viii. Reporting on availability of stock every week. iii. Front Manager The front manager shall serve as an assistant to the senior restaurant manager. In the absence of the manager, or by way of delegation of duties, the front manager shall: Overseeing the day to day operation of the business. Supervisory services. Verbally advertising the business through talking to the friends and offering business cards. Doing market survey. Professional and advisory support Directors Accountant Insurance agent Banker Startup expenses and capitalization The initial financing and capital expenditure for Elegant Dishes are as shown in the table below. The company will invest $40,000 and will seek to obtain a commercial loan worth $60,000. Besides the two sources, the business will subsequently get a loan worth $ 20,000 free of interest from the company savings kitty to be repaid within the initial year of operation. Initial expenditure Legal Requirements $1000 Stationery $600 Building Rent $2000 Equipment $6000 Others Miscellaneous Requirements $2000 Total Initial Expenditure $11600 Initial Assets Required Cash in Hand $56000 Initial Inventory 0 Other Current Assets $4000 Long term assets $48000 TOTAL ASSETS $108400 TOTAL REQUIREMENTS $120,000 INITIAL FUNDING AND CAPITAL Initial Expenses $11600 Initial assets $118400 TOTAL INITAIL FUNDING $120,000 ASSETS INITIAL NON-CASH ASSETS $52000 INITIAL CASH REQUIRED $56000 INITIAL CAHS BALANCE $56000 TOTAL ASSETS $108000 CAPITAL AND FUNDING LIABILITIES BORROWED CAPITAL $60000 INTEREST FREE LOAN $20,000 TOTAL LIABILTIES $80,000 INITIAL INVESTMENT $40,000 START UP EXPENSES $11600 TOTAL CAPITAL 28400 TOTAL CAPITAL AND LIABILITIES 108400 TOTAL FUNDING $120,000 The startup expenses and capitalization can thus be summarized as shown bellow Financial plan Break even analysis The following information will be used in the Break-Even Analysis Projected Monthly Revenue Break-even $39,158 Projected Average Percent Variable Cost 35% Projected Monthly Fixed Cost $25,275 Balance Sheet Year 1 Year 2 Year 3 Assets Current Assets Cash $50,928 $21,086 $44,250 Inventory $24,979 $28,111 $29,516 Other Current Assets $2,000 $42,000 $42,000 Total Current Assets $77,907 $91,197 $115,766 Long-term Assets Long-term Assets $24,000 $74,000 $74,000 Accumulated Depreciation $0 $0 $0 Total Long-term Assets $24,000 $74,000 $74,000 Total Assets $101,907 $165,197 $189,766 Liabilities and Capital Year 1 Year 2 Year 3 Current Liabilities Accounts Payable $34,330 $36,006 $38,203 Current Borrowing $25,132 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $59,462 $36,006 $38,203 Long-term Liabilities $0 $0 $0 Total Liabilities $59,462 $36,006 $38,203 Paid-in Capital $20,000 $20,000 $20,000 Retained Earnings ($30,800) ($2,555) $49,191 Earnings $53,245 $111,745 $82,373 Total Capital $42,445 $129,191 $151,563 Total Liabilities and Capital $101,907 $165,197 $189,766 Net Worth $42,445 $129,191 $151,563 Cash Flow Year 1 Year 2 Year 3 Cash Received Cash from Operations Cash Sales $649,221 $681,682 $715,766 Subtotal Cash from Operations $649,221 $681,682 $715,766 Additional Cash Received Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $15,000 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $664,221 $681,682 $715,766 Expenditures Year 1 Year 2 Year 3 Expenditures from Operations Cash Spending $186,000 $135,000 $170,000 Bill Payments $400,625 $436,393 $462,602 Subtotal Spent on Operations $586,625 $571,393 $632,602 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $19,868 $25,132 $0 Other Liabilities Principal Repayment $10,000 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $40,000 $0 Purchase Long-term Assets $0 $50,000 $0 Dividends $25,000 $25,000 $60,000 Subtotal Cash Spent $641,493 $711,525 $692,602 Net Cash Flow $22,728 ($29,843) $23,164 Cash Balance $50,928 $21,086 $44,250 Profit and Loss Statement Year 1 Year 2 Year 3 Sales $649,221 $681,682 $715,766 Direct Cost of Sales $230,178 $259,039 $271,991 Other kitchen expenses $36,000 $40,000 $45,000 Total Cost of Sales $266,178 $299,039 $316,991 Gross Margin $383,043 $382,643 $398,775 Gross Margin % 59.00% 56.13% 55.71% Expenses Payroll $186,000 $135,000 $170,000 Sales and Marketing and Other Expenses $81,000 $57,500 $76,000 Depreciation $0 $0 $0 Utilities $2,400 $2,400 $2,400 Insurance $6,000 $6,600 $7,200 Payroll Taxes $27,900 $20,250 $25,500 Other $0 $0 $0 Total Operating Expenses $303,300 $221,750 $281,100 Profit Before Interest and Taxes $79,743 $160,893 $117,675 EBITDA $79,743 $160,893 $117,675 Interest Expense $3,678 $1,257 $0 Taxes Incurred $22,819 $47,891 $35,303 Net Profit $53,245 $111,745 $82,373 Net Profit/Sales 8.20% 16.39% 11.51% References Australia. 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