Business Strategies for Sugoi Sushi Japanese Restaurant - Example

Business Plan for Sugoi Sushi Japanese Restaurant Name Institution Course Instructor Dae Cover As the global economy improves, economists have projected an increase in luxury and leisure spending that will help in pushing other sectors forward. As such, travel and catering industries among many are poised to benefit to a large extent. A preliminary survey in the fine dining sector in Adelaide revealed that the sector was not strategically positioned to serve the growing numbers of big spenders who have a taste in fine dining. The current hotels supposedly serving the high class market have received numerous negative reviews on poor service and poor food. It was with this insight in mind we thought of exploiting the opportunity by way of a starting a Japanese restaurant business in Adelaide. The hotel shall target the high income earners who have a taste in fine dining. It will seek to serve the people who are willing to receive premium service and premium quality Japanese food at a premium price. For this reason, the restaurant will assume to reach out for people dining to celebrate events or just to mark special occasions. The restaurant will thus go to the furthest extent to make the experience memorable and worth the price. Therefore, the hotel will be positioned in the market to fill the gap left behind by current players in service delivery and also target the new market segment of fine diners and food and cultural tourists and food enthusiasts. Contents Business overview 4 Company direction 5 Mission 5 Objectives 5 Product description 6 Industry description 6 The market 7 Marketing plan 7 Competitive analysis 8 Dozo Japanese Food Express 8 Competitive advantage 8 Market segmentation 8 Market Entry Strategies 9 a) Pricing 9 ( b) Product differentiation 9 (c) New target market 9 Organizational structure 10 Operationalization 10 The Financials 10 Critical risks 10 Income statement 11 Balance sheet 12 Start-up costs 13 Assumptions 14 Business overview Sugoi Sushi which translates to Real Sushi is a new special occasion restaurant to be located in one of the leading malls in Adelaide, Westfield Marion Mall. The location has high traffic of high and upper middle income shoppers from all neighborhoods in the city. The shopping complex is also home to one of the largest cinemaplex in Australia. The cinemaplex attracts large numbers of people and especially couples to the location. Customarily couples and individuals who go out for movies end up eating out. The Shopping complex is served by one Japanese food place called Dozo Japanese Food Express. I have frequented the hotel on numerous occasions and I was not impressed. On loser observations from my friends, I realized it was not the only me dissatisfied with the quality of food and service offered at the outlet. The idea of starting a hotel that offered real Japanese food was born. The new hotel will offer a diverse menu in Japanese food targeting premium consumers. The food menu will offer food enthusiasts to tray different authentic Japanese recipes and foods. The hotel will seek to add adventure to food consumption at a premium cost. The hotel will be open from mid-morning till late in the night and operational throughout the week. This will help cater for movie goers, shoppers at the mall and other interested food enthusiasts at all times. Company direction Sugoi Sushi will seek to address the existing shortfall in food tourism and food adventure in Adelaide. The venture is uniquely positioned to succeed within this market, as the existing players have not adequately addressed existing market needs and explored available opportunities. The venture’s presence will develop a profitable, catering oriented business that will allow the organization to enhance its capacity to serve as an attraction itself for food tourists besides targeting shoppers in the mall to taking their shopping experience a notch higher to make it also a culinary experience. Mission Sugoi Sushi promises to offer its clients healthy, fresh and high quality Japanese food that allows our consumers to experience Japan right here in Australia supported and delivered by the intricate Japanese ambience at our premises and Japanese cuisine experts and quality service driven by the need to satisfy out clients and create value for our investors. Objectives Grow daily customer visits to 200 daily within the first six months. However, the restaurant will give weight on quality as opposed to quantity. Further growth will be sought in increasing expenditure per customer. The restaurant desires to have opened three more branches across major shopping malls in Australia in two years. Product description As a special occasion restaurant, The Sugoi Sushi will target premium spenders by offering them a Japanese experience beyond the ordinary cuisine. The restaurant shall provide premium services to customers and offer them a rich blend of Japanese cuisine. Traditional Japanese cuisine known for the raw fish will be served either as Sushi or Sashimi and will be the signature meals which are most popular in and outside Japan. Seafood and vegetables will also be available. For the adventurous gourmet lovers, the restaurant will offer a wide range of other Japanese foods on demand. Industry description The hospitality industry in Australia has been on an upward growth in the recent past. A report from IBISWorld estimates that at June 2008 there were 4,017 hotels Australia-wide, with total revenue estimated at $14.4 billion (PWC 2009) while restaurants & cafés stand at over 20 000 (Ross, Palmer & Huczko, 5). However, another report notes that there has been a steep decline in the size of the restaurant and café sector in SA with turnover at $3.3 million compared to the highest at $5.5 million in NSW (p. 8). Furthermore, between October 2010 and September 2011, turnover for South Australia’s cafés, restaurants, and catering services registered a 5.9% decline from the same period a year ago to stand at $952.1 million (p. 12). However, demand for rooms and other forms of accommodation grew by 2.9 % in the 2010–11 financial year while the overall travel and tourism generated $4.6 billion in 2010-2011 compared to $4.5 billion an year earlier (p. 12). The demographics patterns in the state point to a gradually aging population. This is because the state is more reliant on the manufacturing industry as opposed to the service industry which is more reliant on young labor force. As such, it estimated that the median age in SA by 2056 will be 43.9 (p. 12). Unemployment in the state in on the rise as shown by 20% unemployment rates in Elizabeth as of April even before General Motors Holden laid off 500 workers (Head 2013). The market The food consumption market in SA is growing rapidly. Retail sales of food have been growing at 8% annually in average in the recent past (Ross, Palmer & Huczko, 4).by global standards Australian per capita expenditure on food is relatively high at over US$3200 compared to the US at just over US$2600 (Ibis, 9). The Australian securities and investments commission says that Australians spend $14.1 billion in meat and seafood with a weekly average of $32 per individual spent on meals in restaurants. Therefore, the Sugoi Sushi will offer high quality food and service that enhance the feel of a special occasion with an impeccable extraordinary Japanese experience. Marketing plan Marketing plans entails how the restaurant is going to earn a customer base in the target market not just by coincidence but through attributes that can be justifiably associated with the Sugoi Sushi. A wholesome Japanese experience will be the restaurants reliable way to obtain a market following and relate to the existing market dynamics that will strategically position us as a reliable entity in the market that offers high quality service, meals in a new wholesome Japanese experience. Competitive analysis Dozo Japanese Food Express This is one of the many restaurants and cafés located within the shopping mall. The restaurant specializes in quantity through their home delivery services. The hotel mainly offers sushi, noodles and other Japanese delicates that can be packed and delivered to nearby locations. However, the reviews on the hotel praise the food and criticize the service as very poor. Another Japanese restaurant Sugoi Sushi will have to deal with is Wasai Japanese Kitchen. This is however, located in the city centre. Others in the city centre are Matsuri Japanese Restaurant and Maru Japanese and Korean. The Westfield Marion Shopping Centre however has other numerous restaurants and cafés that do not specialize in Japanese food. Competitive advantage The capabilities and resource of Sugoi Sushi will be in combining high quality Japanese food with a complete Japanese experience delivered in ambience, menus, source of food and service people. The hotel shall seek to recruit chefs and waiters from Japan or Asian countries to complete the experience where applicable. To complete the picture, all personnel shall be dressed in traditional Japanese garments including the famous Kimono. Market segmentation Sugoi Sushi will target premium clients in their middle age seeking that element of sophistication in their lives. This target group will be aged 30-45 years and earning more than $40 000 annually. By targeting the high income earners, the restaurant shall be guaranteed to use premium pricing strategy to target the wealthy and those who have a fine taste in dining. The high pricing strategy will be used also to differentiate the restaurant from competition. High quality services and quality food with some ingredients sourced from Japan will be the key selling point. Market Entry Strategies a) Pricing As earlier said this is our main marketing strategy that is expected to earn us a faithful customer base. By introducing our services and meals at a premium price plus offering of executive services will the restaurant the right footing in the market. ( b) Product differentiation Nearly all our competitors in the locality offer home delivery services as to their customers deny them a chance to have the Japanese experience apart from Japanese food. Sugoi Sushi will combine the Japanese food and a Japanese experience to give a wholesome Japanese experience complete with a cultural element in the ambience and type of service. This will be the main point of differentiation in the market from other Japanese restaurants in the Adelaide area. (c) New target market The consideration of middle and high income earners as our target market introduces a new dimension on how the world views the dining by challenging the belief that consuming Japanese foods is not about the food itself or the name of the food but rather going all the way to bring Japan in Adelaide. Sugoi Sushi is posed to be more appealing to local people and foreign and local tourists who want to experience fine dining in Japanese food that promises them a Japanese experience on another level. Sugoi Sushi will offer Japanese service and ambience in the restaurant to complete the experience. The food itself will be authentically Japanese and sourced from Japan. Organizational structure The Sugoi Sushi is co-founded by three partners who will take the role of directors with one appointed as chair. The three members shall have shares of the hotel equivalent to their contribution in the initial startup capital with a 49 percent of the shares unallocated to cater for future investors. The board shall be responsible for making all leadership decision for the hotel including appointing a general manager to oversee the running of the restaurant. Operationalization The board will outsource all recruitments and hiring activities to a Human resources consultant to fill all positions in the initial stages. In total, there will be initial 12 employees. Among those to be recruited in the business will be a personnel manager who will also double up and as the quality control officer. This is because the restaurant is still small and will be having a limited number of employees. This quality control office must have worked in a high quality Japanese restaurant and have a god understanding of Japanese culture. This will be critical in understanding the expected quality of meals and services to be offered and also practical in managing the anticipated Japanese waiters and kitchen staff. The head chef will definitely be a Japanese by nationality but with experience in a foreign country. The Financials Critical risks The critical risks involved in this business pertain by efficacy of suppliers in delivering the main ingredients from Japan. This will be the highlight of the restaurant’s marketing concept in that the ingredients are sourced directly from Japan. Where suppliers delay in delivery or quality, it will have a huge negative impact on the business. Income statement Year 1 Year 2 Year 3 $ $ $ Sales 1 500,000 1 950,000 2, 500, 000 Direct cost of sales 270,000 380,200 650,000 Gross margin 1,230,000 1,560,800 1,850,000 Gross margin % 82 80 74 Expenses Salaries 360,000 360,000 360,000 Selling and distribution - - - Depreciation 2,000 3,000 5,000 Administrative expenses 5,000 5,000 6,500 Accounting fees 2,500 2,500 3,000 Legal fees 9,500 9,500 9,500 Operating licenses and health permits 22,200 1,700 2,050 Restaurant utilities 550,500 1,000,500 1,380,000 Rent for restaurant premises 34,500 34,500 34,500 Insurance 24,500 29,500 30,500 Staff uniforms 25,000 25,000 25,000 Premise maintenance/modification 300,000 250,000 100,000 Other expenses 22,000 30,000 98,000 Total operating expenses 1,357,700 1,751,200 2,054,050 Profit before interest and tax 142,300 198,800 445,950 Interest expense 14230 19,880 44,595 Taxes 42,690 59,640 133,785 Net Profit 85380 122,280 267,570 Balance sheet Year 1 Year 2 Year 3 $ $ $ Assets Current assets cash 208,570 366,800 505,070 Other current assets 0 0 0 Total current assets 208,570 366,800 505,070 Long-term assets Accumulated depreciation 0 0 0 Total long-term assets 0 0 0 Total assets 208,570 366,800 505,070 Liabilities Current liabilities Accounts payable 67,200 98,150 110,180 Current borrowing 0 0 0 Other current liabilities 0 0 0 Total current liabilities 141,370 268650 394,890 Total liabilities Paid-in capital 240,000 240,000 240,000 Retained earnings (350,000) (169,197) 26,715 Earnings 180,803 195,912 253,293 Total capital 70,803 266,715 520,008 Total liabilities and capital 238,386 394,668 585,088 Net worth 70,803 266,715 520,008 Start-up costs Among the three co-founders of the hotel, a total of $100 000 has been raised from savings. An additional $200,000 will be sought through a loan from Bank of South Australia (BankSA). Depending on the growth of the business within the first one year, additional funding for expansion purposes will be sought by selling part or all of the 49% unallocated shares of the business to interested investors. The amount raised will depend on prevailing market rates then. Start-up Costs Items $ Assets 100,000 Expenses 320,000 Total funds required 420,000 Assets Cash assets 100,000 Non-cash assets 0 Additional cash raised 0 Cash balance on start date 100,000 Total assets 100,000 Liabilities Current borrowing 0 Long-term liabilities 200,000 Accounts payable 0 Other current liabilities 0 Total liabilities 200,000 Capital Capital from owners 100,000 Investors - Total planned investment 100,000 Loss at startup (expenses) (350,000) Total capital (110,000) Total capital and liabilities 90,000 Total funds 440,000 Assumptions 1. It is assumed that the restaurant will obtain health certification and a business operations license from the Adelaide local council without any problems. 2. It is assumed that the ability to acquire the funds needed for startup will be sufficient to sustain the financial plan for the business. 3. It is assumed a steady growth in the economy, without any recessionary tendencies with support the hotel’s growth. 4. It is assumed that all key employees will be obtained from the abroad and from the local market without glitches. Works cited Australian securities and investments commission. 2013. Web. Bruce Mattel, Catering: A guide to managing a successful business operation. New York: Wiley. 2008. Web. Francine Holversen. Catering like a pro: From planning to profit. New York: Wiley. 2004. Web. Head, Mike. Unemployment deepens in Australian working class areas. 2013. Web. Vandermerwe, S. & Raja, Juan. Servitization of business: Adding value by adding services. European Management journal, 6(4),1988. 314-324. Read More