Business of Asado Cafeteria - Assignment Example

?Running head: BUSINESS PLAN FOR ASADO CAFETERIA Business Plan for Asado Cafeteria 28th November Table of Contents Table of Contents 2 Executive Summary 4 Introduction 5 Objectives 5 Sales objectives 5 Mission 6 Keys to success 6 Company Summary 7 Company Ownership 7 Start-up Summary 8 Kitchen design and architectural plans 8 Guest rooms and tables 8 Manuals/Handbooks/Recipes 8 Pre-opening 9 Building/Infrastructure/Equipment 9 Start-up requirements 9 Start-up expenses 9 Start-up assets 10 Start-up funding 10 Business location and facilities 10 Services 11 Competitive comparison 11 Sales literature 12 Technology 12 Market analysis summary 13 Market segments 13 Marketing programs 13 Word of mouth marketing 13 Local media 13 Pricing strategy 14 Annual costs 14 Annual variable costs in AED 14 Annual fixed costs in AED 14 Conclusion 15 Recommendation 15 References 16 Executive Summary Asado is a cafeteria that is aimed at providing quality food and excellent services to the local and foreign consumers who visit Dubai. With a target sale of 1,200,000-2,000,000 AED, Asado is focused at making our guests experience first class services as well as extensive entertainment 7 days a week. With its main operations located in Sheikh Said Road, keys to success for Asado includes creation of a friendly atmosphere, excellent services, controlling operating costs, motivated workers and effective marketing strategies. To ensure positive perception from the existing and new guests, Asado will renovate its guest rooms, modernize its kitchen and provide manual and clear menu that depicts the variety food and their respective prices. To ensure that all its objectives are achieved, Asado requires a total funding of 587,000 AED that include total start-up expenses of 167,300 AED and total assets amounting to 420,000 AED. The key markets segments include school going children, young couples, white color workers, university graduates and employees working in the informal sector. Major aspects that make Asado enjoy a competitive edge include low prices, quality services, entertainments, strong customer care and appropriate location. The expected annual variable costs and fixed costs are 300,000 AED and 177,000 AED respectively. To mitigate the challenges of raising high capital needed to especially to address variable costs, Asado has the opportunity of forming a merger with established cafeteria businesses in Dubai. Introduction Based on stiff competition in the current business atmosphere, firms that are focused at attaining a competitive edge and a strong capital have embarked on use of a business plan to strategize on how to outdo their competitors in the market. Additionally, business plan is useful not only to the managers but also to other stakeholders such as the shareholders and investors who are willing to invest in the business (Eric et al, 1993). This business plan covers the operations of Asado, a Dubai based cafeteria that specializes in international food with an aim of increasing its sales and profits as well as attaining a competitive edge in the hospitality industry. Objectives To ensure that Asado undertakes its goals with a focus to succeed in the market, it has come up with various objectives. Asado aims at controlling the costs incurred in its operations while at the same time controlling the quality of its products. Attaining the monthly and sales target to ensure adequate cash inflow to meet the short-term and long-term liabilities. Stay as a local cafeteria with quality foods that will ensure repeated purchase. To achieve an average annual sales of between 1,200,000-2,000,000 AED. To receive and service large orders from individual consumers and parties. Sales objectives In its effort to ensure the annual revenue is adequate to meet the variable and fixed expenses, Asado has come up with sales target for the first 3 years. The table below indicates its sales objectives, the gross profit and the net profits. Sales(AED) Gross profit(AED) Net profit(AED) Year 1 300,000 200,000 95,000 Year 2 850,000 350,000 320,000 Year 3 1,500,000 500,000 800,000 Mission Asado is focused at becoming a leader in serving Dubai and foreign visitors with quality food and services that are not comparable in the local market. Our aim it to make our guests experience first class services that is equal to their money. In addition to the quality food, we are going to provide a fun atmosphere that is ample for short executive meetings especially in the morning before going to the office. These are some of the key things that we are undertaking in a unique way to face off any kind of competition that may arise. Our primary goal is to provide cheap meal without compromising our quality and services. In the same way, taking into consideration large number of foreigners who visit Dubai for business purposes and seeking for employment, we are focused at diversifying food products to meet the needs of our customers. The satisfaction of our customers is our primary goal. When any of our customers enter our premises, he or she is faced with our motto “we care for you health and your pocket”. In this way we ensure that our customers regardless of their income enjoy the meal of their choice. To ensure our employees are productive and that their welfare is catered for, Asado is aimed at emulating motivation by engaging them in decision making processes as well as recognizing their feedbacks. In this way, we aim at making our employees part and parcel of Asado in order to make them happy thus resulting to the happiness of our guests. Keys to success The keys to the success of Asado Foods Cafeteria are: 1. The creation of an atmospheres that is friendly and entertaining thus allowing our guests to enjoy every minute while taking their lunch and breakfasts. Through our unique services and quality meals we will differentiate ourselves from the competitors. 2. To perform our duty of providing excellent services to our new and existing guests by adopting excellent customer care services that surpass our competitors. 3. Controlling the costs of operations including the costs of raw materials and advertisements costs among others. 4. Ensuring that our staffs are motivated by providing adequate training, offering annual benefits and gifts, creating social forums to ensure interaction of the managers and the employees. In the same way, we are focused at hiring skilled labor force that is able to handle any question from the customers thus making our customer to be loyal towards our products and services. 5. Adopting effective marketing strategies by emulating marketing mix that entails 4ps (product, price, promotion and place). Company Summary Providing quality foods that is good for the health of our customers Ensuring an entertainment in our surroundings Serving value meals and breakfast Providing variety of foods and beverages Ensuring positive relationship with our employees and friendly working atmosphere. Company Ownership Asado is a sole proprietorship owned by Abdul Razzaq. As the cafeteria continues to expand it operations locally and in the neighboring cities, we are focused at making it public thus allowing local investors to be part of the business. In this way, we will attain a significant capital that will enhance our performance in Dubai market. Taking into consideration the benefits of going global including increased profits and large market segment, Asado will have an opportunity to go global if more investors are put on board. Start-up Summary In order to ensure that we provide high class services in a friendly environment, Asado cafeteria has to incur a reasonable start-up expenses that covers wide range of item such as kitchen items and design, renovation of guest rooms and tables, handbooks with information regarding our services and types of food, recipes and training manuals among other items. Kitchen design and architectural plans To ensure that our kitchen is well designed to make it attain an international standard, Asado will employ an experienced firm based in Dubai to come up with a new design. This will involve a hiring process that will entail scrutinizing the designs of various firms to see the most attractive one taking into consideration the costs of implementing the design. Guest rooms and tables The first impression of our rooms to our guest will have an impact on their purchasing behavior. In this regard, we are focused at undertaking a renovation process that will put the guest rooms in a good condition. Additionally, Asado will purchase new tables from well known furniture stores within Dubai. Manuals/Handbooks/Recipes Asado Cafeteria has maintained adequate budgetary allocations to cover the cost of typing and printing of manuals that are used in training of new employees. Additionally, the business will have typed and printed recipes that indicates the various food provided by the cafeteria and their prices. All manual will be binded and placed on the shelves in the training rooms. Pre-opening In our efforts to ensure that all the employees are aware of their responsibilities, a pre-opening session was undertaken with various aims. First, employees were given a vigorous training to educate them on how to deal with various issues for instance on how to deal with customer complaints. Similarly, the workers were trained by renowned chefs on how to prepare various food that are demanded by various communities residing in Dubai. Being a hotel that serves consumers from different cultures, the employees were also trained on effective customer care to avoid racism in our firm that can jeopardize our operations. During the pre-opening stage, extensive cleaning was conducted under the supervision of the manager. This was followed by organizing of the restaurant to ensure that any item needed by the employees or the customer was at the right place. Building/Infrastructure/Equipment This entailed decorating the exterior and the interior parts of the hotel to ensure that our customers have positive perception of the hotel. Additionally, through the assistance of the procurement manager, Asado rented a number of shops where we could sell ready foods that our customer highly demanded especially during the evenings after work. Start-up requirements For any venture to succeed, it must put in estimate all the expenses and the value of the assets it needs to avoid failing at the middle of its operations. The section below indicates the major start-up expenses, start-up assets and funding that Asado adopted. Start-up expenses Item Amount (AED) Kitchen and Legal fees 95,000 Design of Logo 2,000 Manuals and Recipes 7,800 Marketing Plan 12,000 Staff expenses 25,000 Manager and employees uniforms 5,500 Office expenses 20,000 Total Start-up expenses 167,300 Source-(Sullivan and Steven, 2003) Start-up assets Item Amount (AED) Cash needed 100,000 Start-up inventory 40,000 Other current assets 150,000 Long-term assets 130,000 Total assets 420,000 Total requirements 587,300 Start-up funding Start-up expenses to fund 167,300 Start-up assets to fund 420,000 Total Funding Required 587,300 Source-(Sullivan and Steven, 2003) Business location and facilities Asado cafeteria occupies approximately 3500 square feet with a capacity of 90-120 guests. Equipped with modern music system and a juke box placed at one of the corners, our guests have an enjoyable time as they take their lunch or evening coffee. Asado is located just along Sheikh Said Road. This is one of the busiest roads in Dubai (Heiko, 2009). In this way, large number of customers will easily access our products making our daily sales high. Based on the high number of activities within Sheikh Said Road, majority of workers have no time to go to other restaurants based in other parts of the town. As a result, most of them look for fast food cafeteria an aspect that positively impact on our revenue and customer base. As mentioned earlier, we are focused at reducing the costs of advertisement. In this regard, word of mouth will be our major marketing strategy. This implies that we must ensure that the quality of our services and meal is high so that as our customers within and outside Sheikh Said Road will inform their colleagues as they go about their daily duties about our services thus gaining more customers. Services Asado provides quality services are open for lunch and supper from Monday to Monday except during the public holidays. This is based on the fact that on public holiday most of our customers are at their homes meaning that our products may be a waste on such days. Additionally, we allow our employees to have time with their families thus giving them opportunity to address their private matters. Competitive comparison The broad range of our customer base is based our friendly and entertaining environment that guarantees consumer first class services and variety of food depending on their cultural background. As a result, we have a competitive advantage over our rivals who are far much behind in term of sales and customer retention. We have the following advantages: Our prices are low not only for the dinner but also for our breakfast. We offer high speed services thus ensuring that our customers are not late to go home or attend their duties. We provide variety of products thus ensuring that every customer gets what he or she wants. Asado has extensive entertainment as compared to our competitors. For example, during the weekends we offer live music that makes our place lively. In addition, our menu is very clear such that our guests do not face problems while looking for the meal they deserve and their prices. Our customer care is excellent than our competitors. In this way, any complaint from our clients is addressed in a timely and professional manner. This has led to a strong customer trust and loyalty. Sales literature As the competition becomes stiff in the Dubai market, we have established strategies to cope up with the market challenges. By use of our information technology department, we have plans to produce the following three types of pieces. Table toppers Brochures that will be given to our potential customers in the morning our while they are driving to their places of work E-mail address that will ensure our customer books the guest room in advance. Additionally, through the e-mails are focused at communicating with our consumers once we launch a new service or product. Technology Information technology is one of the key strategies that will enhance our services in addition to data analysis. Through a high speed internet, we are determined to communicate with our customers in Dubai and neighboring countries. In the same way, key financial information will be stored and produced by use of a high speed computer under the leadership of our accountant. Market analysis summary Market segments Age-young school going children, young married couples, workers in the informal sector, white collar employees in the ministry offices within Dubai, foreign visitors regardless of their ages. Gender-We target both sexes Source Sullivan and Steven, 2003). Family unit-We are focused at providing young families with young adults with quality products. Additionally, we target households with low and high income. Occupation-Our focus is to white-collar employees, workers in the informal sector and young professional who are working in different areas within Dubai region. Education-Graduates from local universities and individuals who posses college education. Marketing programs Word of mouth marketing Annual Birthday parties Wall posters Touring every new customer Table tents Local media To ensure we improve customer awareness, we will adopt radio campaigns, newspaper and diet magazines as well as competition that will ensure winners get free meal coupons. Pricing strategy Item Amount Machbose Chicken 15 Machboes Meat 30 Fish 25 Margog 15 Herees 15 Threed-meat 25 Mahmar 16 Ordianry salad 7 Fattoush 6 Tamriya 10 Soft drinks 5 Water 2 Source- (Nagle and Holden, 2000) Annual costs Annual variable costs in AED Cost of goods sold 250,000 Marketing and advertising fees 10,000 Utility bills 35,000 Miscellaneous expenses 5,000 Total 300,000 Source-(Pinson, 2004) Annual fixed costs in AED Rent 50,000 Trade license renewal 12,000 Employee salaries 100,000 Depreciation 15,000 Total 177,000 Source-(Pinson, 2004) Conclusion Based on the above business plan, it is notable that Asado will have to incur high costs implying that more marketing strategies will need to be adopted in order to break-even. Even though our prices are low as compared to competitors and based on the wide range of business strategies that Asado is adopting, our wide market segment will ultimately provide adequate revenue that will reinforce the business capital. With extensive marketing strategies and provision of quality products, we are also ultimately going to offset the high competition that may arise in the course of our business. Recommendation As more businesses emerge to serve the increased population in Dubai as a result of the high rate of immigration in the area, I suggest that Asado merge with already established cafeteria as a way of expanding its market. Additionally, through merger Asado will reduce the marketing expenses since it will utilize the marketing strategies of the already established firm. In the same way, I suggest that to increase consumer awareness and enhance positive perception from the public, Asado engage in corporate social responsibilities (CSR) such as providing free meal to the hungry citizens as well as sponsoring of cleaning services within the region in addition to sponsoring sporting activities in schools and colleges. References Eric S. Siegel, H., Brian R. Ford, K and Jay, B. (1993). The Ernst & Young Business Plan Guide. New York: John Wiley and Sons. Heiko, S. (2009). Economy of Fascination: Dubai and Chicago as Themed Urban Landscapes, Berlin: Stuttgart. Nagle, T and Holden, R. (2000).The Strategy and Tactics of Pricing. New Jersey: Prentice Hall. Pinson, L. (2004). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future. Chicago: Dearborn Trade. Sullivan, A and Steven, S. (2003). Economics: Principles in action. New Jersey: Pearson Prentice Hall. Read More