Business Plan for Establishing a Restaurant in London - Essay Example

1 Business Plan for Establishing a Restaurant in London James Chew here) London Metropolitan University 2 1.0 Summary This business report shows all the necessary plans involved in setting up a restaurant in London City, taking into consideration not only the logistics and financial requirements of this project, but also looking into the appropriate management policies or decisions that would be made in the course of running the restaurant. Attempts are made to use Porter’s five forces of success to describe how the restaurants will be run. Some other applicable management theories that will help in day-to-day running of the restaurant are also highlighted in this report. The main logistics issued discussed include outlining the processes for opening a restaurant in London, recruitment of workers, location of the restaurant and estimating competition from other restaurants in the area. Some possible future problems are highlighted and solutions needed to tackle them are presented. For example, the issue of credit or financial crunch is elaborately discussed and the managerial methods required to steer the restaurant into financial survival are clearly explained in the report. 3 Contents Page Title Page………………………………………………………………………………..1 1.0 Summary…………………………………………………………….……………...2 Contents Page…………………………………………………………….………………3 2.0 Introduction…………………………………………………………………………..4 3.0 Planning and Management………………………………………..………………….5 3.1 Types of Dishes………………………………………………………………….5 3.2 Location…………………………………………………………………………5-6 3.3 Hiring of workers………………………………………………………………..6 3.4 Business Management………………………………………………………….7-9 3.5 Quality Control………………………………………………………………….9 Conclusion…………………………………………………………………………….10 Recommendations…………………………………………………………………….10 References…………………………………………………………………………….11 4 2.0 Introduction Setting up a restaurant in London City might be an interesting investment based on the teeming number of people that live in the city. London has been regarded as the most multicultural city in the entire European bloc: Most London residents come from a variety of backgrounds rich in local cultures and cuisines (Wilson, 2006). The importance of this status is that any restaurant opened in the city will definitely find buyers for its kinds of foods and drinks, be it African, Asian, European or Native American. As the cultural centre of the United Kingdom, London City also attracts a host of visitors from all over the world. These are potential customers who are willing and ready to order for any dishes that serve their best interest. This, in essence, is the most interesting part of the Cultural Revolution through diversity that London has been promoting for ages (Parijs, 2004). Starting a restaurant in London may not be an easy task: but, it could bring a satisfactory result if it is properly undertaken. There are some factors to consider: where to locate the restaurant? What kind of menu should be served at the restaurants that would be quite competitive to invite customers to the tables? How to go about hiring workers to help in the daily operations of the restaurant? What appropriate managerial policies to implement in order to successfully run the restaurant business? All these logistics requirements point to the fact that doing business in London City requires absolute planning and demand a high level of seriousness ( Dunning & Morgan, 2003). 5 3.0 Planning and Management This section addresses all important steps to be taken in planning and managing the restaurant business to be established in London. 3.1 Types of Dishes The restaurant is going to be an international one featuring the main dishes from Africa, Middle-East, Asia, Europe and the Pacific. The purpose of doing is to attract an array of customers from these sub-continents. Although, only one main dish per sub-continent would be available in the restaurant, together with some drinks from such areas. 3.2 Location For any business to be successful, its location is very important (Pakroo, 2008). What this signifies that if it is located in a hidden place where most potential customers may not be able to easily locate it, such a business would suffer from low patronage. And any business that begins by losing a great deal of its customers may not last long (Pakroo, 2008). So, I will make sure that my restaurant is located in the areas where people of diverse nationalities could have access to it. Being an international restaurant, I will make sure it is just at the centre of neighborhood that hosts many people from all cultures, especially those sub-continents from where the restaurant’s menus are from. 6 Another important consideration about location is that the restaurant should be sited in a place where the business would be disturbed by the City Development Department, which may request for the relocation of the restaurant to another place in the future. This kind of issue normally destroys a business when its structure is pulled down because the location poses a threat to City urban development (Pakroo, 2008). So, for continuity sake, the restaurant will be situated in a location that encourages smooth passage of traffic, has enough parking spaces for customers and does not hinder future city urban development. 3.3 Hiring of Workers The success of the restaurant will largely depend on the experience and quality of workers hired to handle all the daily operations at the restaurant (Pakroo, 2008). The criteria for selecting the right workers to work in my restaurant include but not limited to (i) ability to accept and ready to work peacefully with people of different cultures and races; (2) readiness of the workers to give all their best to make the business successful; (3) lawful and showing the tendency to respect the restaurant’s customers; (4) demonstrating appreciable level of accountability and obedience to my orders as the restaurant manager. Although, hiring the workers for the restaurant is not the only thing to do to ensure that workers demonstrate an encouraging level of responsibility, the workers must be trained and encouraged to work with all their minds (Pakroo, 2008). Getting the best out of the workers might entails sending them on relevant training and rewarding all hardworking ones. This, without doubt, would motivate the workers a lot (Pakroo, 2008). 7 3.4 Business Management The way the restaurant business is managed speaks volumes about how successful it is going to be. The best approach is to apply Porter’s Five Forces to describe how I would manage the restaurant to stay competitive and be able to make enough profits that would break off loses due to the current credit crunch. The five competitive factors that would make my restaurant business a success include the following forces: (i) bargaining power of the buyers; (ii) bargaining power of the suppliers; (iii) threats of substitute products or services; (iv) threats of new entrants; (v) rivalry among existing competitors (Porter, 2008). (i) Bargaining power of the buyers: It is important that customers like the foods and drinks that will be served in my restaurants. If they seem to like our services, they will keep patronizing my restaurant and bargain for a moderate charge per food bought. However, if the customers are strongly insisting on reducing the prices of the foods served in the restaurants, this may lead to a drastic slash in the amount of profits my restaurants want to make. If my restaurant does not make enough money to stay afloat, it may be difficult to beat the credit crunch. Therefore, it will be helpful to hold keep a moderate pricing system per service/food for each customer for a particular length of time, and then change the price to satisfy the wish of some customers who may have been complaining about the pricing mechanism (Hiles, 2007). 8 (ii) The bargaining power of the suppliers: My restaurant is going to need some materials like condiments, vegetable oil, salt, drinks and so on. Some suppliers are required to provide these substances. However, if the bargaining power of these suppliers is greater than mine, that means that I would be paying more money for the raw materials and the other things I will be using to run my business (Pakroo, 2008). So, it is important that I should improve on my bargaining ability in other to be able to save some money off good bargaining. I would also increase my interrelationship with the suppliers so that I can gain their trust and be able to win their favor when bargaining for cheaper prices for the raw materials (Hiles, 2007). (iii) Threats of substitute products/services: Although my restaurant is going to be an international one offering different types of dishes and cuisines for British buyers to purchase, but there will be perceptible threats from restaurants that specialize on a particular dish from the sub-continents. The reason is that those restaurants can offer the foods at a more reasonable price than I: this may force the customers to go to the places where they think they can get cheaper food. The best way to beat this threat is to offer a comparative pricing system for the almost similar dishes that customers can find elsewhere else (Hiles, 2007). Take for instance, if my restaurant offers Indian curry, it is possible for another restaurant to offer a less tasty Thai curry. But consumers that are concerned only about the price of the food would only go to where they can get them cheaper. But my strategy is to provide an opportunity for the consumers to buy from me at a good price. 9 (iv) Threats of New Entrants: No doubt, new entrants into the business would constitute a serious threat, especially if they are located very close to my restaurant and offering the same menus I am going to offer. The right thing to do in this case is to offer high quality food that consumers will appreciate and keep coming to. In this way, my restaurants will be able to beat future new entrants into the same business that I run (Pakroo, 2008). (v) Old rivalries: The rivalries with older restaurants will not go away so soon, but I can overcome it by making our food special and offer prices that the consumers would be glad to accept (Pakroo, 2008). 3.5 Quality Control Another strategy I will employ to make my restaurant succeed and beat all credit crunch is to make sure that the quality of our food and drinks is guaranteed (Hiles, 2007). Having high level of quality control will help my restaurant keep the regular customers as we provide nothing but products they are comfortable with. To keep the quality of our products up for a very long time, it is necessary that all the restaurant’s workers will be trained about food and environmental hygiene (Pakroo, 2008). Consumers seem not to have interest in food products that are dirty and contain some poison, no matter how it is cheap. Also, I will make sure that the interior design of the restaurant will be eco-friendly and pose no threat to the consumers’ health. 10 4.0 Conclusion If all the facts raised in this business plan are implemented, setting up a successful restaurant will be possible. The most important things to do is to destroy all competition by making sure that both old and new rivalries do not have upper hand through discriminatory pricing system, provision of better food services, training of workers to be good and humble to the customers, and so on. It is also good to have a future plan for the restaurant so that the business continuity would be guaranteed. The most important thing here is to locate the restaurant in a place that would not be affected by future City Modernizing Programmes and the restaurant would not be earmarked for demolition. There are some restaurants that are wrongly located in the past but got caught in the city beautification plan and were demolished to give chance for the city planners to do their job. This is quite unfortunate, because huge investment that had been made on the restaurant will be wasted without any compensation sometimes. Establishing a great customer relationship would help the business expand because, traditionally, customers are referred to as Kings, and they should be treated with all respect, bearing in mind that they spend their hard-earned money to buy the food products served by the restaurant. When customers are unhappy, this may affect their interest in the restaurant and they would not want to repeatedly visit the restaurant for their future 11 services. If this issue is taken seriously, more customers can come to the restaurant, bringing their friends and neighbours to try out our dishes. 5.0 Recommendations Some of these recommendations should be carried out for the restaurant to make appreciable progress: All the workers must be continually trained about quality control. Without good quality in place, it will scare the customers and the sales in the restaurant will go down. This will affect the restaurant’s income and the plan to overcome the credit crunch that has been troubling every part of the world. This is an important step to let the customer that their safety is an integral part of the restaurant’s operations. Providing good foods that customers would be happy to buy. If the tastes of the foods are nice, customers will continue to come in a great number. They would be happy to bring in their friends and acquaintances. They would be able to offer any price to get the foods. The Porter’s Five Forces must be constantly applied in managing the restaurant. This will help the management to realise that consumers, competitors, suppliers and so on are important identities that the restaurant’s management must always be concerned 12 about in order to break competition and increase the yields of the restaurant. Affordable prices should be offered to break the power of competition. When customers can buy some foods cheaper than somewhere else, they would be glad to keep coming to the restaurant. Cheaper price enables them to save some money off their food orders. Customers’ relationship should be improved to encourage the customers to keep patronizing the restaurant. This is so important so as to gain the trust of the customers. If the customers can understand all the processes going on in the restaurant, they will feel more at home whenever they visit the restaurant. The interior of the restaurant should be eco-friendly. Businesses are working hard to make their operations friendly to the atmosphere. They are expected to use paints that contain harmless chemicals to paint their interior walls. Their cooking materials should contain nothing poisonous like mercury that is used sometimes in some fish. It is helpful to have the atmosphere in the restaurant unpolluted by dangerous smokes or chemicals. And the level of carbon dioxide release during the cooking should be reduced so that the damage done by greenhouse gas emission would be cut down. 13 6.0 References Dunning, John & Morgan, Victor E., 2003. Economic study of the City of London. London: Routledge. Hiles, Andrew., 2007. The definitive handbook of business continuity management. London: John Wiley and Sons. Wilson, N., 2006. London: A history. New York: Modern Library. Pakroo, Peri H., 2008. The small business start-up kit. 5th ed. Berkeley (CA): Nolo. Parijs, Philippe V., 2004. Cultural diversity versus economic solidarity. Brussels: De Boeck Universite. Porter, Michael E., 2008. On competition. Boston (MA): Harvard Business Press. Read More