The Restaurant Industry of the UK - Essay Example

?Dinner in the Sky is a Belgium company which operates in 15 countries, and has a unique idea of dining in the open sky with cables suspended via cranes. The company offers an exclusive feast which is meant for anyone who desires to transform an ordinary meal into a thrilling moment that will leave a lasting impression on their guests. Dinner in the Sky will be a great place to eat, combining captivating atmosphere with excellent food. The mission is not only to have sumptuous food, but have efficient and friendly services too, because customer satisfaction is of paramount significance to the company (Mills et al, 2003; Dinnerinthesky.com, 2010). Taking the customers to the sky is not easy. Security of the customers is the primary concern of the business. Dinner in the Sky will use a crane to elevate the furniture, crew, food and 22 to 350 diners as high as 180 ft up. The structure of the eatery will be portable and will need a space of almost 1500 sq.ft, hence can be held anywhere (sea side, public place, historical sites and fields etc), (Dinnerinthesky.com, 2010). The company's suspended table measures 26 ft x 19 ft (8m x 6m) and weighs approximately 17,600 (7983.25 kg) lbs fully loaded (11,000 lbs (4989.6kg)unloaded). Eight cables, connected at points on all four sides, bind the table to a crane. The company has planned to work with safety agencies before introducing the concept to the public. During inspection, seats will be overloaded with weights of more than 330 lbs (150 kg) each. Diners will be locked into their chairs by six-point seat belts that operate from the back side of the seat so they cannot disconnect themselves. The company will certify its system for safety by European-based testing agency (Mills et al, 2003). The restaurant industry of the UK is known to be growing at a steady rate despite the economic crisis. Studies and research show that because of the credit crunch, the restaurant industry has remained strong. Though it did face some problems but it is expected to grow further (Alleyne, 2009). The restaurants are categorized with the type of cuisines which they offer. The only competitive edge which they have over each other is that of prices and differences in tastes. The customers usually dine out on weekends with their families and partners and prefer to visit those places which offer good food at reasonable prices and a comfortable seating arrangement so as not to cause any inconvenience (Franck, 2005; Duffill, 1993). Dinner in the Sky offers a unique experience to the market and brings about an innovative idea to take the customers to the sky and give them the ultimate dining experience. The size of the Target Market which the company will be specifically catering to would be the 10% of the population of the city who belong to the Social Economic Class A and B. The lower middle class and the middle class would also be welcomed through trade promotions and discounts to leverage the revenues of its business later in the business cycle of Dinner in The Sky. Part B 1. Financial Requirements The company is seeking loan guaranty for $142,000 with a 7% interest rate, which will approximately come up to ?10,000 per annum. The company is investing ?441,000 of its own capital. Its start-up costs come to ?583,000 which is mostly expensed equipment, furniture, painting, reconstruction, rent, start-up labor, liquor license, six months operating cash, and legal and consulting costs associated with opening its restaurant. According to the financial projection the company will require ?583,000 as start-up expenditure. The company shall generate ?780,000 in sales by the end of the first year and produce net profits over and above its break-even of 312 customers. As it is shown in the Annexure, the business will initially face cash flow problems as it will take a while for it to generate a strong customer base. However, the business will generate enough cash inflows so as to give the owner the payback of the invested amount. 2. Market Segmentation Dinner in the Sky Restaurant will intend to cater to a wide group of people in the long-run so as to maximize its revenue. The company wants everyone to feel welcomed and relaxed in a cozy atmosphere with a wide and varied menu in an experience which they have never heard of before. It is Dinner and the Sky’s goal to have "something for everyone" on its menu. In looking at its market analysis, the company has defined the following groups as targeted segments (Mawson, 1996). Business Officials; Occasions/Events; The Family Families will come for the accommodative menu and friendly service. The excellent value in their meals will keep the restaurant in favor with the customers as it is what they value (Abell, 1975; Franck, 2005). Marketing Strategy Price The principal pricing strategy which the company will adopt would be to set market skimming prices. As this service would be entirely new for the market, the company will skim the market with higher prices in order to get the most profit out of the high income earners. With due course of time, the company will reduce its prices in order to cater to the mass markets who will be able to afford its service at least once a month at certain price level (Walker et al, 2005; Abell, 1975). Place The Sea View area is one of the most desirable locations in the UK for a sky restaurant. An area of 1500 to 2000 Square Yards will be needed to operate the cranes and elevation of the mobile restaurant. A rent will have to be paid to the authorities to operate in different locations depending on the market the company would wish to cater (Mills et al, 2003). After Dinner in the Sky’s stay on the beaches of UK, the company may move its facility to open grounds of all the major cities of the UK (Mills et al, 2003). Promotion: Focusing on the unique aspect of the theme of the company’s service (healthy, tasty foods along with a memorable experience) a mix of marketing vehicles will be created to convey its presence, its image, and its message (Walker et al, 2005). Print media: Local newspapers, magazines and student publications Hotel guides: Chamber of Commerce brochures Direct mail: Subscriber lists, offices for delivery Misc: Yellow pages, sponsoring charity events Service: Dinner in the Sky service is an offering which creates a gap in the market because there is currently no offering like Dinner in the Sky. The company will commit to provide its consumers with an unforgettable experience. The restaurant’s kitchen will be mobile. The orders will be placed on the ground and while the food is prepared, the facility itself, consisting of 27 seats will be hoisted up to an altitude of a maximum of 180 feet above the ground via cranes with attached eight cables. Meanwhile, their food will be prepared and when it is ready, the diners will be brought down and when the food is served, the facility will again give the customers a ride in the sky (Mills et al, 2003). The Restaurant will initially operate on appointment basis and will be run during teatimes till dinner because of climate constraints. Sales Strategy Dinner in the Sky’s sales plan is to establish and maintain position within its local customers. The strategy is to build more customers in order to increase revenue. The company will focus on making all its customers happy with its food, service and entertainment options. The company will train every new employee so they will fit in with Dinner in the Sky's concept, which is "Wonderful food, and knowledgeable service aimed to give its customers an outstanding experience." Operations Strategy and Implementation Summary: Dinner in the Sky’s strategy is simple. The company intends to succeed by giving people a combination of excellent and interesting food in an environment that appeals to a wide and varied group of people. The company will focus on maintaining quality and establishing a strong identity in UK’s community. The company will direct all of its tactics and programs toward the goal of explaining "who the company is and what the company does". The company will keep its standards high and execute the concept so that word-of-mouth will be its main marketing force. The company is not striving to be the lowest-priced restaurant but is aiming to be the value leader. This would ensure that the company cashes on this value preposition which it has to offer to the market. Besides, the idea being innovative and out of the box, it will likely be received with good response from the target market. Facilities & Offices The restaurant at the beach will be at a 1500 Square foot space. The licenses and Codes of Issues will be taken. New equipment will be purchased and installed by the general contractor (Mills et al, 2003). Hours of Operation The restaurant will be open for dinner and hi-tea 7 days a week. Service will begin at 05:00 PM and end at 01:00 AM. These are the peak times where the customers usually go out for leisure activities. This will ensure that the business is most accessible to the market. The restaurant will be closed on public holidays. Systems & Controls A big emphasis is being placed on extensive research into the quality and integrity of its products. They will constantly be tested for its own high standards of security, freshness and purity. Food costs and inventory control will be handled by the company’s computer system and checked daily by management. Routine checks on the cranes, cables and the facility itself will be performed so as to provide its customers a safe and secure environment (Mills et al, 2003; Mawson et al, 1996). Food Production Most food will be prepared on a mobile facility. The kitchen will be designed for high standards of sanitary efficiency and cleaned daily. Food will be made mostly to order and stored in large coolers that will be placed near the crane. There will be a constant supply of ingredients and other edibles which will ensure timely supply of good quality and freshly cooked food for the customers. (Mills et al, 2003; Mawson et al, 1996; Mawson, 1996). Technical Aspects (Mills et al, 2003): Size of the platform in transport Length: 6 meters Width: 2, 5 meters Size of the platform built up Length: 9 meters Width: 5 meters Weight of the table 7 tones (empty) to 10 tones (full) Size of the crane in transport Length: 11 meters Width: 2, 7 meters Size of the crane built up Length: 11 meters Width: 8 meters including support legs Management & Organization Key Employees & Principals The franchiser of Dinner in the Sky in the UK region will manage Dinner in the Sky. He/She will also function as Head Chef (Walker, 2005). The company will have a Chief Financial Officer who will take care of all financial issues including bookkeeping, which will be done by an Accounts Officer (Walker, 2005). Dinner in the Sky will hire a single person as a Front Manager and a Marketing Director who will take care of ordering for service and managing the wait-staff of 4 along with taking care of Marketing and Advertising (Walker, 2005). The company will also use the services of a Director Administration who will be responsible for the maintenance and repairs of all the equipment (Walker, 2005). Management Team The management team will be well compensated. Dinner in the Sky will have a team that has considerable experience together and share knowledge in many different fields of business and the restaurant industry. In Year 2 the company will hire a General Manager to assist Restaurant to grow even further into different parts of Europe. Compensation & Incentives The restaurant will offer competitive wages and salaries to all employees with benefit packages available to key personnel only (Kelliher, 2001). Consultants & Professional Support Resources At present, no outside consults have been retained, except the design department at Best Equipment. Management to be added The company must initially avail the services of a General Manager and Executive Chef to assist smooth operations. These key employees will be well chosen and given incentives for performance and growth. The basic requirement is relevant experience of managing a restaurant and preparing foods respectively. Ownership The company will be registered as a Small Medium Enterprise as a franchise of Dinner in the Sky under the UK law as the law puts the limit on the revenue of a business to be under ?22.8 million and a balance sheet total of ?11.8 million, in order to be registered as a SME (Great Britain, 2006). Personnel Plan (Walker, 2005): We believe the personnel plan is in good proportion to the size of the restaurant and projected revenues. The staff will include 6 full-time employees and five part-time employees, who will work a total of approximately 300 man-hours per week. Chef [Insert Name] will be assisted by: Two chefs with considerable experience in different restaurants. Administrative staff of 2 for cleaning the restaurant (2) The Chief Financial Officer and the Accounts Officer will take care of the financial issues including bookkeeping and work in at the company’s registered office. The Marketing Director will take care of promotional and PR Campaigns and will also act as the Front Manager during operations where the wait staff and ordering for service will be managed. The Front Manager will be assisted by: Servers that work part time (4). Full-time trained crane-controller (2). Part-time crane controller (1). Employee Training & Education Employees will be trained not only in their specific operational duties but in the philosophy and applications of the company’s concept. They will receive extensive information from the chef and be kept informed of the latest information on healthy eating (Kelliher, 2001). Besides all this, the waiters will be trained as to what precautionary measures they need to take as they will be on the move up in the sky, and will also be trained to guide the customers as to how they need to buckle up and get ready for their dinner in the sky. Moreover, the crane-operators and the administration staff will also be there as an operational security measure. Conclusion As the idea will be very lucrative for the market, the business has the opportunity to skim it with high prices to generate the maximum profit. As the market will start to mature, the company will have to operate on lower margins and reduce its prices to attract the masses. With its immaculate quality food and service which comes along with Dinner in the Sky’s Brand Promise. Dinner in the Sky being a restaurant which offers the service of literally taking its customers to the sky, will be a complete entertainment and dining package for the market. Year 1 (?00)   April May June July Aug Sept Oct Nov Dec Jan Feb Mar TOTALS Beginning Cash Bal 2,000 (1,445) (1,309) (1,129) (1,065) (807) (525) (395) (496) (154) 52 440 Cash Inflows (Income): Cash Collections 500 520 560 590 630 650 670 690 710 730 760 790 7,800   Total Cash Inflows: 500 520 560 590 630 650 670 690 710 730 760 790 7,800 Available Cash Bal: 2,500 (925) (749) (539) (435) (157) 145 295 214 576 812 1,230 Cash Outflows (Exp): Advertising (310) (106) (102) (98) (94) (87) (84) (83) (80) (76) (74) (74) (1,268) Bank Service Exp (20) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (53) Insurance (350) 0 0 0 0 0 0 0 0 0 0 0 (350) Interest 0 0 0 0 0 0 0 0 0 0 0 (100) (100) Inventory Purchases (55) (30) (30) (35) (35) (38) (38) (40) (40) (45) (45) (50) (481) Maintenance & Repairs (15) (15) (15) (20) (20) (20) (25) (25) (25) (30) (30) (30) (270) Operating Supplies (300) 0 0 0 0 0 0 (70) 0 0 0 0 (370) Payroll (175) (175) (175) (175) (175) (175) (175) (175) (175) (175) (175) (175) (2,100) Professional Fees (100) 0 0 0 0 0 (20) 0 0 0 0 0 (120) Communications Equip. (270) 0 0 0 0 0 0 (350) 0 0 0 0 (620) Rent (20) (20) (20) (20) (20) (20) (20) (20) (20) (20) (20) (20) (240) Office Supplies (150) (20) (20) (10) (10) (10) (10) (10) (10) (10) (10) (10) (280) Permits & Licenses (250) 0 0 0 0 0 0 0 0 0 0 0 (250) Utilities & Telephone (15) (15) (15) (15) (15) (15) (15) (15) (15) (15) (15) (15) (180) Taxes (150) 0 0 (150) 0 0 (150) 0 0 (150) 0 0 (600) *Sales training (150) 0 0 0 0 0 0 0 0 0 0 0 (150) Subtotal: (2,330) (384) (380) (526) (372) (368) (540) (791) (368) (524) (372) (477) (7,432) Other Cash Out Flows: Capital Purchases (1,500) 0 0 0 0 0 0 0 0 0 0 0 (1,500) Subtotal (1,500) 0 0 0 0 0 0 0 0 0 0 0 (8,932) Total Cash Outflows: (3,830) (384) (380) (526) (372) (368) (540) (791) (368) (524) (372) (477) (8,932) Ending Cash Bal (1,330) (1,309) (1,129) (1,065) (807) (525) (395) (496) (154) 52 440 753 Annexure Startup Summary and Cash Flows Break Even Analysis: Break-even Point = Average Monthly Fixed Cost Selling Price – Variable Cost = $50,000 200 – 40 = 312 customers The business must cater to 312 customers per month in order to break even. 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