Business Strategies - Red Cedar Restaurant Pty Ltd - Example

INSERT YOUR BUSINESS LOGO] [Your Name] [Your Title] [Business Name] [Main Business Address] ABN: [ABN] ACN: [ACN] [Red Cedar Restaurant Pty Ltd.] Business Plan Prepared: [December 6 2015] Table of Contents Business Plan Summary 2 Business name: [Red Cedar Restaurant Pty Ltd] 3 Business structure: [Company.] 3 ABN: [-] 3 ACN: [-] 3 Business location: [Gold Coast- Queensland] 3 Date established: [-] 3 Business owner(s): [-] 3 Relevant owner experience: [Holder of an Advanced Diploma of Hospitality] 3 Products/services: [Foods and beverages, Restaurant services] 3 1Business Decision 4 2Business Description 5 2.1Overview of Business 5 3Marketing 6 3.1Target Market 6 3.2Product 7 3.3Price 7 3.4Promotion 8 4Financial Plan (See attached document) 9 5Legal 9 6Resources 10 6.1 Human Resources 10 6.2Physical Resource Requirements 10 6.3Financial Resources 10 7Productivity and Performance Targets 11 8Additional Considerations 12 8.1Matrix of Communication 12 8.2Staff Improvement Plan 12 8.3Review and Monitoring Mechanisms 12 Business Plan Summary This business plan is based on an existing profitable restaurant business in Gold Coast Queensland. The restaurant is currently making a net profit of $ 2025 from weekly takings of $6800. The previous owner had average weekly takings of $10000. With a rich menu and a strong marketing campaign and promotional strategies, the business has the potential of achieving $20000 in weekly takings. The operating costs including rent are relatively low and the business is located within the CBD. Restaurant equipments are part of the business deal on offer at SBX website. This means the new owners will not find it difficult to start operations immediately after the acquisition process. The business owner has adequate training and expertise in food service and will, therefore, be perfectly suited to convert the business into highly profitable enterprise. The new management will employ various marketing strategies including digital advertising, marketing and promotions to reach the target market. New menu items will be introduced to improve the product offering and customer experience. The management will consistently pursue strategies such as competitive pricing and employee performance improvement to compete effectively and grow. The success of the business plan will depend heavily on strong commitment to implementation of its key components and regular review of the performance indicators. The Business Business name: [Red Cedar Restaurant Pty Ltd] Business structure: [Company.] ABN: [-] ACN: [-] Business location: [Gold Coast- Queensland] Date established: [-] Business owner(s): [-] Relevant owner experience: [Holder of an Advanced Diploma of Hospitality] Products/services: [Foods and beverages, Restaurant services] 1 Business Decision Business 1 Business 2 Business Type: Cafe Restaurant Cafe Takeaway Restaurant Code: GJ1355 TTQN1026 URL: http://www.sbx.com.au/record_detail.php?code=GJ1355 http://www.sbx.com.au/record_detail.php?code=TTQN1026 Strengths: The cafe has a rich menu consisting of a unique Australian quinine offering with a Mediterranean twist. The rich menu will provide a strong starting point for a new business strategy as the existing menu items could be retained on the basis of sales performance. The cafe is fully equipped with a modern stainless steel kitchen, large open air eatery and a walk-in cool room. This means that the business requires slight modifications where necessary to remain operational. The business is located in a commercial and residential area on a busy road leading to the airport. This is strategic location that guarantees the cafe a consistent flow of customers. The cafe has a long lease (10 + 5 + 5 + 5 years) that makes it possible for the business owner to plan and implement long-term plans Experienced workforce Located near a light rail that guarantees a consistent high traffic of potential customers CBD location ensures the cafe has loyal customers that guarantee a predictable revenue flow. The business has low operating costs and a good return on investment The cafe requires only one permanent staff and five casuals giving the owner a greater control on salary expenses. The business has a full commercial kitchen and adequate seating space for customers. Weaknesses: The business running expenses are very high and could present cash flow problems The business requires at least 13 fulltime and part-time employees to run. In addition, casuals are required during most of the time. Salary expenses and management costs may be higher than expected. The menu has few items that do not offer customers a wide variety to choose from The owner-manager is inexperienced Opportunities: The business can apply for a liquor license that will allow the operators to sell liquor. The cafe could also apply for a license to operate 24 hours to maximise its revenue. The operators could consider including a healthy menu offering of fruit juices and foods that appeal to health conscious customers. The menu can be enriched to attract more loyal customers including health conscious consumers The business van be opened on weekends and late hours to increase revenue flow Threats: Increased competition from established cafes may prove to be difficult to counter given the high operating costs Competition from well organised players with a wide menu offering may reduce the cafe’s market share. 2 Business Description 2.1 Overview of Business The takeaway restaurant (business 2) in Gold Coast area will be the basis of this business plan. This business presents an ideal opportunity for growth in terms of operations and profitability. The takeaway restaurant is already profitable and earns a net profit of $2025 which is 44 percent of the gross profit. With proper financial management, the business can take advantage of the high traffic to offer an attractive menu that will increase sales and profitability. The takeaway restaurant has low operational costs such as $680 rent and $1750 for wages. The business can achieve tremendous growth in sales if low if low operational costs are maintained while sales volumes increase. Once this business has been acquired, its menu will be enriched with various items to supplement the existing offering. The business will also explore the idea of offering a healthy option to its customers that will be low in trans-fats, processed foods, artificial flavour enhancers and calories. The new restaurant will pride itself in offering fresh salads and greens for sandwiches. In addition, Coffee and tea beverages will be introduced at the restaurant to boost sales revenue generated from existing menu items. The business will aim to grow a reputable brand that can grow and expand into other locations in Gold Coast area. Mission To serve our clients with a rich menu of healthy, fresh and absolutely delicious meals and beverages Vision To be a leader in serving fresh, healthy and delicious food choices to Australians Values Honesty Friendliness Sustainability Commitment to quality Responsible business Objectives To offer a diversified menu to cater for the preferences of the target market To increase sales volumes by 30 percent within the first year of operations To improve customer satisfaction by at least 20 percent within the first three months To increase daily deliveries by 50 percent in the first year of acquisition To open another branch in Gold Coast area in two years 3 Marketing 3.1 Target Market The Red Cedar restaurant will offer a rich menu of healthy foods, snacks and beverages to its customers. The meals offered at Red Cedar will include sandwiches, burgers, vegetable salads, Turkish melts, and some light choices of whole meal cakes. Red Cedar menu will emphasize more on freshness, health and natural flavours to attract and retain a loyal customer base. In addition, the business will offer high quality coffee and tea as part of its growth and diversification strategy. Red Cedar hopes to attract as many customers with its menu offering but in order to achieve growth and expansion objective, the restaurant’s target market will be segmented as follows. Demographic segmentation Age: Red Cedar will position itself as a healthy foods restaurant with an ability to appeal to people in the age bracket of 25 and 60. This age group is very concerned with the health aspect of the food and items they consume on a daily basis. Most of them are also likely to be employed or in stable businesses that allow them to have regular meals at local restaurants. Gender Red Cedar serves delicious and healthy meals targeted to both male and female customers. Income: The average menu item at Red Cedar will be $6. However, special menu items that cost about $10 will be introduced as part of enriching the menu and experience at Red Cedar. Such price point targets average income earners in the Gold Coast area who are willing to spend about $10 per visit to the Red Cedar restaurant. Geographic characteristic Red Cedar will mostly target loyal customers in the surrounding commercial and residential areas. The restaurant will also target commuters that use the services of the near-by light rail. Psychographic characteristics Lifestyle Red Cedar product offering will be high quality, healthy and delicious. The price of the menu items will be targeted to the average Australian. The brand may, therefore, be associated with a healthy average lifestyle that is within reach of most Australians. Red Cedar promises to offer quality and value at an affordable price. Social class Red Cedar will mainly target the lower middle class segment that prefers quality products and services but is at the same time price sensitive. Behavioural characteristics Loyalty status Red Cedar will develop unique recipes and menu items with the help of specialist chefs. The menu items must also be healthy, delicious and moderately priced. These factors will be important in attracting and retaining a loyal customer base. Benefits sought Red Cedar menu offering will be a healthy, natural and delicious alternative to many customers who desire to buy quality, affordable meals in an easy-to-access location. 3.2 Product Product/Service Description Price sandwiches Several sandwich options will be on offer at Red Cedar. All the sandwiches must meet the health and quality standards set by the management. The main sandwich options will be as follows Roast beef – will contain roast lean beef filling and customer’s choice of fresh vegetables and sauce. Turkey breast melts- will be filled with oven-roasted turkey breast and vegetables. Spicy chicken melt – will be filled with tender chicken meat, cheese and vegetables Sandwiches will be priced between $6 and $7.5 Coffee Coffee will not be the core business of Red Cedar restaurant but an additional source of revenue and customer attraction strategy. the restaurant will offer various coffee options including cappuccinos, cafe mochas, and espressos Coffee prices will range between $1.5 and $2.4 Cold beverages Sodas and fresh juices will be available the Red Cedar Prices for cold drinks will range between $1.5 to 2% for 375ml Burgers Several burger options will be available at Red Cedar including beef, chicken, turkey, cheese and vegetable burgers. Burger prices will range from $4 to $6 Meals (lunch and dinner) A modern Australian cuisine with a Thailand twist will be on offer for lunchtime and dinner meals at Red Cedar. Lunch and dinner prices will average $10 3.3 Price Red Cedar will rely on a penetration pricing strategy, whereby the prices of menu items will be slightly lower than what is offered by restaurants with similar product quality and differentiation. This pricing strategy will be important for the business as it will increase sales revenue in the short-run and aid in acquisition of a larger market share in the long-run. However, the price must be relatively above average to create the perception of prestige and value in the targeted market segment. Individuals in the lower middle class will be willing to pay higher than average for quality foods and beverages. In addition, it will be strategically important to work with a pricing guide that considers the popular price points for the items on offer at Red Cedar in order to remain competitive. 3.4 Promotion Promotion Strategy Description Timeframe Digital marketing Digital marketing will be a implemented in several ways as explained below: Website. Red Cedar will launch a robust website that will be linked with its social media accounts such as Twitter, Facebook, Instagram and Google+. The website will provide information relating to current offers, menus, and the business in general. The website will tell the story behind the brand and the people who work at the restaurant. It will also be a key opportunity to talk about the business sustainability efforts and relations in the society it operates in. Social media channels such as Instagram and Twitter will be very important tools in digital marketing as the marketing department of Red Cedar will post food photos, popularise events at the restaurant and conduct promotional events online. This will attract more customers and enhance brand awareness. Customers can also be requested to suggest some food ideas they may want to see implemented at Red Cedar. Red Cedar will also use geo-targeted ads by Google to attract customers in the gold Coast area. Such ads by Google are targeted to the exact location that a business plans to roll out a campaign. This will be a continuous event after the first three months of operation Promotional events Red Cedar will hold occasional promotional events to attract customers and popularise its menu offering. Such events may include but not limited to: Special coverage of major sports events including rugby games which have many fans throughout Australia. Wine tasting. Themed dinners such as Italian dinner for couples Will start after five months of operations. Will be held occasional during major sports events. Food truck Red Cedar will acquire a food truck for the purpose of promoting its brand and menu offering to the public in areas near its restaurant. Members of the public can get free food samples at the food truck. After one year of operation. Will be held at intervals of three months thereafter. Discounts Red Cedar will offer regular discounts to loyal customers through a loyalty program. Customers who present special coupons downloaded from the restaurants subscribed newsletter email will get discounts as and when they are available. The restaurant will also have regular discount offer to attract customers in particular hours of days with low customer traffic. Will start after one month of operations Community service Red Cedar will get involved in various community events such as tree planting, festivals and sports events. This will start after one year of operations Door to door marketing Red Cedar staff will visit businesses and homes in the surrounding area to popularise the restaurant’s menu offering and enhance the brand’s visibility. Staff members will give out brochures with Red Cedar menu, discounts, and the continuing brand story. Customers may receive special discounts if they bring the brochure with them at the next visit to the restaurant. This will take effect after six months of operations 4 Financial Plan (See attached document) 5 Legal Legal Consideration Description Red Cedar Restaurant Pty Ltd Red Cedar Pty limited will be the holding company of Red Cedar restaurant. The company will be a private limited company under Australian Corporations Act 2001. GST All food items sold at a restaurant or sold and eaten at the point of sale attract a GST of 10% even if the food items are classified as GST-free by the Australian Taxation Office (ATO). Red Cedar will charge GST on all takeaway foods or for food consumed at its premises. The tax will be remitted to the ATO. PAYG Red Cedar will pay PAYG instalments as it will be eligible to do so under Australian law. A company that is registered for GST must pay PAYG instalments. Company Tax Red Cedar will operate initially as a small business before future growth and expansion plans. As a small business with a turnover of less than $2 million, Red Cedar will pay a company tax of 28.5 percent on taxable income. Additionally, Red Cedar will be considered for various capital gains tax concessions that apply to small businesses in Australia. Trade Practices Act Red Cedar will comply with all the provisions of the Trade Practices Act 1974 as implemented by the Australian Competition and Consumer commission. This is both a legal obligation and a strategic consideration to protect the brand from injurious publicity. Trade Agreements/ INCOTERMS / Warsaw Convention / WTO Determinations Red Cedar will operate and serve customers in Australia where Australian laws and obligations apply. Red Cedar may not be significantly exposed to the need to comply with international trade agreements. 6 Resources 6.1 Human Resources Position Name Description Source General manager The general manager will oversee the day-to-day activities at the Red Cedar restaurants. The GM will ensure that the restaurant operations adhere to regulations and are financially sustainable. The GM will coordinate marketing and promotion efforts to sustain a strong brand image and continued sales growth The GM will assess human resource needs and address recruitment and training needs accordingly. The GM will be the head of Red Cedar’s strategic plan for future growth and development. The new owner of the business will be the GM until it is strategically and financially possible to employ a General Manager. Head Chef Will be in charge of the restaurants menu offering. Will consult with the general manager and the marketing manager in developing and improving the restaurants menu Will ensure the foods offered at Red Cedar are of high quality and represent the brand and promotional strategy adopted by the business Will coordinate the training new kitchen staff and interns in line with the staff training and development objectives. The head chef will be sourced competitively in the Australian hotel industry. He must have at least 5 years experience in a similar position in a busy restaurant. Marketing manager Will work with the GM to develop marketing and promotional strategies for the business. Will coordinate day-to-day customer relations and food service activities at the restaurant. Will coordinate promotional events and strategies in accordance with the company’s strategy. The marketing manager will be recruited competitively through a recruitment and selection process. He/she must be dynamic, tech-savvy and should also have at least 3 years marketing experience in hospitality industry. Cooks and waiters/waitresses. Will do the bulk of the work at the restaurant including cooking, taking and servicing orders and maintaining the restaurant in an appropriate condition for business. Will be recruited and selected competitively in the job marketing. Ideal candidates must have the required skills and competencies desired by Red Cedar management. 6.2 Physical Resource Requirements The previous business equipments will be available for use by Red Cedar after the acquisition process. Equipments are part of the business’s sale price. 6.3 Financial Resources The total cost of acquiring the restaurant business through SBX is $145, 000. This amount includes equipment valued at $60,000. The cost of acquiring the new business will be financed personal savings and grant from close family members. 7 Productivity and Performance Targets KRA KPI Objective Finances Return on Investment (ROI) The objective of analysing the return on investment is to determine the amount of money investors earn from their investment cost within a specific time. Analysing ROI for Red Cedar will be important in making future strategic decisions relating to investment and operations. Net profit margin This is indicates the percentage of sales that constitute the net profit after deductions. This indicator is important in analysing the operating costs and food pricing. Revenue growth rate Determining the rate of revenue growth will help the management analyse the effectiveness of the promotional strategies employed and provide a basis for future growth and expansion plans. Quality Quality Index This indicator will determine whether the restaurants foods and service is at per with customer’s expectation. It will be important to get feedback that indicates whether the quality of service exceeds or is below customers’ expectations. The results can be used to improve or sustain existing products and service Order fulfilment cycle The objective of this indicator is to determine how long it takes to fulfil a customer order and how it affects productivity. Equipments in compliance This indicator will help the management to determine the percentage of equipments that comply with industry standards to prevent disruptive technical or regulatory problems. Management Customer satisfaction The aim of this indicator is to provide a quantitative assessment of customer satisfaction in foods and services offered by Red Cedar. The resulting information can be used strategically to improve operations and quality Employee satisfaction Satisfaction of employees will be assessed through measures such as turnover rate and expressed opinions. Information can be used to improve employee relations and construction of a staff development plan. Success in strategy implementation Strategy implementation will be analysed in terms of execution progress and outcomes. This indicator will be vital in assessing the performance of current management. 8 Additional Considerations 8.1 Matrix of Communication Stakeholder Communication Type Information Timeframe Government Official financial statements Profitability information for taxation purposes. Profit and loss account information Balance Sheet information Employees’ income information Monthly Regulatory authorities Various compliance reports and assessment documents. Occupational health and safety situation and food safety conditions. Yearly or when requested by concerned authority Employees Face-to-face, Memos and email Strategic plans, business core values, regular changes, and operational objectives. Regular as per necessity. Customers Newsletters , social media alerts, press releases Menu and price changes, discounts and promotions, and clarifications on matters of public interest. Regular as per necessity. Community Social media alerts, posters Community activities Occasional when necessary. 8.2 Staff Improvement Plan Details Employee name and title Mentoring manager name and position Date of plan commencement Date of plan completion/review Performance improvement objective Required outcomes Preferred Strategies Support and resources Responsibilities of manager and employee involved Consequences for failure to improve or participate 8.3 Review and Monitoring Mechanisms Monitoring Method Description Responsibility Timeframe Observation Observing employee commitment and task performance gives an indication of performance improvement progress Gm, Marketing manager and Head Chef 1-2 months Use of self-reporting tools Employees should give their own analysis of progress after committing to a performance improvement plan Employee/manager 1-3 months Use of mutually agreed targets Both the manager and employer and employee should analyse the employees progress towards set goals Employee/manager 1-3 months Read More