Feasibility Study for a New Restaurant in Cheltenham - Report Example

Feasibility Study for a New Restaurant in Cheltenham 0 Introduction: Conducting a feasibility study for developing a new business require analysisof market conditions. Local market condition has a significant impact on the profitability of a new restaurant. Local market strength affects the number of customer to be served, process of service delivery, menu design, facilities, and prices that can be charged to customers. In this report, I will do a feasibility analysis of a new restaurant in Cheltenham market area. Objective: This report analyses feasibility of a new restaurant in Cheltenham 2.0 Proposed Premises: The proposed property is very near to Cheltenham town centre, Gloucestershire, GL51 5XQ.This premises is now used as a public house and restaurant, so it will not affect for me to use this property as my concept restaurant. This restaurant has 80 seating capacity, toilet facilities for men and women, 20 Car parking, outside bar overlooking village cricket green and fixed kitchen for successful restaurant business operation. Asking rent from seller is £40,000 which could be negotiated down to £35000, on top of that I need to give business rate set by local council which is £ ……… We need to do some modernisation, add some extra facilities, Sign, Logo, and a Website, which could cost another £60,000 to start the business. Information of this property has been collected from Sidneyphilips, Please see the Appendix 1 sales brochure of this property. 3.0 Restaurant Concept: There are various types of restaurants available in the market to choose. The best choice would be opening an ethnic restaurant. In the proposed site, the plan is to open an Indian Cuisine. The name of the restaurant will be Sweet & Spicy. Restaurant will cater for the all age group. For the kids we will serve exceptional and mild curry to attract and retain them. In service delivery, latest technology such as EPOS (Electronic Point of Sale) available in the market will be used. Additionally, attractive website with integrated online ordering and payment system will be used. Presentation of the food will make the restaurant stand out from competitors. Exclusive curry dishes, which are not served in Cheltenham area, will be included in order to achieve sustainable competitive advantages. Name: Sweet and Spicy Mission: “Customer satisfaction is our fast priority. We view everyone as VVIP, this include anticipating customer needs, providing quick and quality service and facilitate customer needs. Or Sweet and spicy restaurant mission is abbreviation of SERVICE: S: Smile for everyone E: Express Empathy R: Reaching out Every guest with great Hospitality V: Viewing everyone as a VVIP I: Inviting everyone to come back C: Creating a warm atmosphere E: Eye contact that shows we care Service: Takeaway Free home delivery within four mile radius Discount for group booking Catering for family events Special menu for the kids including English food Facility: Very neat and clean washroom for men and women Free WiFi Kids Corner Free car parking Menu: A La Carte menu in Sweet and Spicy restaurant will be implemented. However, a separate menu for the desert and coffee will be included. Starter: We will offer a variety of selection, this include vegetable, chicken, lam, and fish. Main menu: Customer can choose from vegetable, chicken, lam, and a wide range of fish (Prawn, King Prawn, Salmon, Trout, and Roopchanda). Kids Menu: Pr & mango puree, scampi, sweet rice, cheese somosa, scampi, fried chicken, chips and omelette with mushroom, prawn, peas. Drinks: We will serve soft drinks such as natural juice, and a selection of wine (white, red, and rose) and champagne. Desert: Selection of desert available in our restaurant Opening Time: Price Range: Providing quality service at low price is my first strategy in order to win the competition, It will help me to Create awareness of my restaurant In Cheltenham area. Lunch: £9 pound Dinner: Price will vary according to choice. Entertainment: Audio Music. Cultural Night. Banqueting Night. 4.0 Emerging Trend in the Food Service Industry: Demand and consumer expectation are changing the outlook of hospitality and leisure industry. Understanding the Hospitality Consumer presents a distinctive perspective on consumer behaviour in the hospitality industry. It seeks to focus on the role of consumption in hospitality and to examine our understanding of its place in the contemporary industry; this text concentrates on understanding and determining recent customer needs, relevant factors in consumer buying behaviour, and the effectiveness of todays hospitality business operation. Therefore, when we think about a new restaurant we should consider the external dynamics and consumer trends, which have a great impact in food and hospitality industry. Ethnic food are more popular in the UK, it is estimated that UK has more than 60% of total European ethnic restaurant (Millar, 2010). Now consumers are more educated and health conscious, diabetes, heart disease, cancer childhood obesity are the key issue in consumer mind than ever before. Vegetarian cuisine, gluten, lactose, casein free food, and decaf are more popular in today’s food market. Government health media and different social media encourage people for healthy eating. Competition has increased within the Hospitality industry, bargaining power of the customer has increased due to more choice available to the customer than ever. Ethnic restaurant are in risk due to tighter immigration law. There is awareness among the consumer to protect and preserve the environment; environment and social friendly organisation are easily achieving sustainable competitive advantages. Demand of Organic food is increasing 5.0 Local Market Area: Demographic and economic data are very significant to determine potential restaurant sales in the market, by evaluation this information I can find out the strength of my local market area. The average gross weekly earnings of those working in Cheltenham is considerably high, with the district ranking being in the top 20% of districts nationally. Average gross weekly earnings in Cheltenham are 504.80, in comparison with £439.74 in Gloucestershire and £456.12 nationally. Gross value added in Cheltenham is very high, compared with Gloucestershire and nationally. GVA per head in Cheltenham is £21,947.27, compared with £19,831.00 in Gloucestershire and £20,080.93 nationally. From 2006 to 2008 the total number of employees decreased by 1.09% percent which represent week economic growth. In 2009, self-employment rate in Cheltenham was 10.82%, which is slightly lower than national rate 11.66%. Education levels of the Cheltenham area people are very high. In 2008 39.97% held degree or equivalent qualification compared with national average 29.01%. The number of people claim incapacity benefit is very low in Cheltenham, there are only 50.70 people claim incapacity-benefits among 1000 resident. Cheltenham is the second smallest town among the six Gloucestershire district and it has second largest population totalling to113900, (2010, Borough Council). In Cheltenham, 80.90% working age resident are in employment, average total earning per year £25200, total housing allocation from 2006 to 2026 is 8500 (2012, Borough Council). http://www.cheltenham.gov.uk/info/347/local_economy-development/216/the_cheltenham_economy/2 http://www.cheltenham.gov.uk/site/scripts/download_info.php?downloadID=273&fileID=2132 6.0 Competition: Restaurants already existing in the market can provide valuable information to analyse the opportunity and threats of the proposed restaurant. It is important to identify how many restaurant in the area especially the ones that appeal to the same customers (market segment) that needs to be served. It is crucial to identify any restaurant closed in the market area and for what reason (Ryan and Chrisler, 2003). There are thirteen Indian Restaurant in Cheltenham, which will affect Sweet and Spicy restaurant business. After researching online of those restaurants it is clear, they are doing traditional businesses some of which are 20 years old. There is evidence of price war between them but no innovation of new products, services, or variety of menu served. Some of the restaurant has problems with cleanliness. Although fish is known as healthy food, only few restaurants offer variety of fish. None of them serve the great fish Roopchanda (Barbacued) which is famous for its taste. Strength: All the experience I achieved working in different successful restaurant is a great strength for my restaurant, I have gained experience in operation management of restaurant, supply chain management, complain management and use of modern technology. None of my Competitor has online order and payment facility. Use of modern technology (Epos), online booking, order, payment, and tracking delivery order will differentiate Sweet and Spicy from others. Free WiFi will attract students, officials, and children to choose Sweet and Spicy among all Indian restaurants in Cheltenham. No ethnic restaurant has Kids corner in Cheltenham, so this new concept will attract customers to my restaurant. Afternoon coffee in ethnic restaurant is also a new concept in Cheltenham area. Free Afternoon coffee for registered customer on every Saturday will create great awareness within my target market and will boost customer retention strategy. Only two of the direct competitors (Bhojon, … ) offer variety of fish dishes. No other Indian restaurant offers organic food. Availability of organic food (chicken and eggs) upon 12-hour request will give me a competitive advantage. The location of sweet and spicy in the main road and the premises is easily accessible. Free and secure car parking facility gives a competitive advantage. Offering exclusive curry with persuasive offer will help to build confident about my restaurant among the consumers. Excellent service, quality food, and cleanliness will give me competitive advantages. Challenges: There are already eight Indian restaurant who have been successful in doing food business in the area, comparatively New restaurant in a new area, It would be very hard work for Sweet and spicy to switch from existing brand. To establish a new brand it will cost a lot of money for promotional activities. Immigration laws and ban on smoking poses a challenge in today’s restaurant business. Location: The property holds a prominent location at the centre of the village and has extensive roadside frontage to draw customer’s attention. The premise is within proximate distance to my target customers. Proposed property is three mile away from Cheltenham Spa railway station and it is only 2.5 mile away from University of Gloucestershire. During peak season a large number of tourist and local people, pass through this road. Additionally, this property is easily accessible and clearly visible from the road. Financial statement: Projected customer Volume: Lunch Dinner Total Monday Tuesday Wednesday Thursday Friday Saturday Sunday Conclusion: This report is an invaluable tool for evaluating the probability of success and risk associated with new restaurant plan for Cheltenham Masala .’’ After conclude this report I can say that establishment of any restaurant is a viable endeavour. The investor has to consider so many factors, which require in high involvement in decision making for opening this new restaurant. My feedback At the end of every sub topic, you may include a statement indicating how the information given makes the restaurant feasible; remember this is a feasibility study and not a business proposal. For example, menu, mission statements etc should be explained further showing how they make the business feasible. Name of the restaurant would appeal more if it were Indian just like the Indian Cuisine idea. Business rate set by local council You can still do the feasibility study without using first person. Remember to define initials e.g VVIP, EPOS etc when you use them for first time. The facilities can also be tuned to Indian culture Need to include specifics for the dessert Entertainment for children too Consider Indian organic foods besides chicken and eggs (I recommend traditional names for the foods) Avoid switching from Sweet and Spicy to Cheltenham Masala in the conclusion You may consider adding information on health and legal requirements from the local authorities. For the business to be feasible, all relevant health and legal authorities have to give consent. Read More