Interview – Would also help in the process of gathering data by giving me a more in depth view of my potential customers and help me exploit this acquired knowledge to my benefit. It will complement the questionnaire and will aid me in my decision making process.
Secondary – The information gathered through my secondary research will concern competition and the general industry as a whole. I will also look into government regulations into starting up a business particularly the health and safety aspects that would be vital in starting a restaurant. I will also look into successful promotional strategies used by similar businesses to see which would be an effective method of promotion for the proposed restaurant.
Much of my secondary research will be done via the Internet. This would be the cheapest, quickest and easiest method to carry out such research.
Secondary Research
Government Issues/Political Feasibility – The restaurant must first be registered with the local authority, in this case the local authority is the London Borough of Westminster. The health and safety law will also be very important and must be enforced. As I will be catering for Muslims and Jews by offering Hallal and Kosher menus, I must obtain certificates from both Muslim and Jewish food regulatory councils of Britain. The restaurant must comply with all the guidelines set out by the FSA (Food Standards Authority)
A appropriate manager or I must supervise and instruct and/or train all food handlers involved in the food business in food hygiene matters. The training needed will relate to the actual task of the individual. It will also relate to the type of food that they handle. More training is required for those that handle high risk food than for those who handle low risk foodstuffs.
Restaurant Industry in the UK
It is important to have good knowledge of the restaurant market in general, often a analysis of the market at a national level will help determine likely success of my proposed restaurant. The following website was used in obtaining the information regarding the restaurant market.
Google search = “market restaurant in the uk” – page 3
General Characteristics
* The size and value of the restaurants market is difficult to measure
because of large variations in how data is analysed and what is
encapsulated within the term 'eating out'. The total income generated in
2000 from catering services ie, all meals eaten outside the home, was
estimated to be £56bn by the Office of National Statistics.
* The value of restaurant brands was estimated by Mintel at £11.5bn in
2000, rising to £12.2bn in 2001. The value of the restaurant market was
estimated at £5bn, of which 60% was attributed to "traditional"
restaurants, as opposed to "international" or "ethnic".
* After Quick Service Restaurants (eg
McDonalds
), pubs are the most
popular places to consume food outside the home. The
pub/bar/steakhouse/carvery sector takes 20.1% of the market, while
fried chicken restaurants, with 2.9% market share, showed the greatest
year-on-year percentage growth at 9% (Taylor Nelson Sofres).
* Levels of personal disposable income and consumer confidence directly
influence spending on eating out. However, consumers are increasingly
using debt to continue spending, which is not sustainable long-term in
the current economic climate.
Consumer Dynamics
* There has been a sea change in the last 10 years or so as consumers
spend less time cooking but have become better educated about food.
They now expect quality and value for money from an eating out
experience.
* Consumers are increasingly "cash rich, time poor", resulting in more
'grazing' or snacking on the move. This has led to a wider choice of
food and drink snacks (eg, sushi, salads), with supermarkets providing
more sandwich-type fare to meet demand. These changes threaten many
restaurants, particularly the lunch trade, as they often cannot compete
on time, price or convenience
.
* As consumers seek greater cuisine variety, the diversity of food options
has expanded; new concepts focus on Asian or European flavours more
than American concepts. However, pizza/pasta is still a clear favourite.
* Customers are becoming increasingly concerned about health, animal
welfare and food safety as a result of rising numbers of food poisoning
and food scares. This has led to an increasing trend towards
vegetarianism and organic food offerings.
Egyptian Food – Research
The fact that there is a lack of Restaurants catering for Egyptian food on Edgware Road gives me a valuable asset, a Unique Selling Point. Since I am not Egyptian, my knowledge of specialist Egyptian cuisine is very minimal. By carrying out Market Research both secondary (predominantly on the internet) and primary I will hope to gain more knowledge of my proposed restaurant. By asking people (in the questionnaire) their thoughts of my proposed menu I will gain a further insight into my customer views and tastes of different foods.
Starters
Main Course
- Asabi' gullash bi-l-lahmaDry Pastery Fingers with Meat Filling
- Sanyet Batates (Oven Potato Stew)
- Bamya (Meat and Okra Stew)
- Feta and Lamb Stuffed Grape Leaves
- Feteer Bel Asaag (pastry with ground meat)
-
Kebab Halla Stewed Meat
- Kofta
- Kufta bi-l-fahma Meat fingers flavored with charcoal
- Lahma mu'assaga Savory Minced Mead
- Lamb Tagine with Prunes
- Ma'loobet el Bedingan (Eggplant with Rice Casserole)
- Mombar Mahshy (Stuffed Beef Sausage)
- Ru'a'bil-l-lahma Crisp Pastry with Meat Filling
-
Seleq – Lamb with Rice
- Swarma (Shawerma)
- SAYYADIAH - Fish With Rice
Dessert
- Summer Berry Salad with Fresh Mango Sauce
- Blueberry And Orange Salad with Lavender Meringues
- Strawberries With Raspberry And Passion Fruit Sauce
- Blackberry Brown Sugar Meringue
-
-
Drinks
Menu is from
The above menu was derived primarily from the afore mentioned website as well as from an interview with an Egyptian friend with a knowledge of authentic Egyptian cuisine. The Egyptian cuisine in which I researched seems to be quite similar to other Arab cuisine.
Management/Leadership Style
Being the manager/owner, a management style will have to be adopted by myself in order to run the business in a way where success will be likely. I will be looking at many different theories proposed by many businessmen, sociologists etc. As my business will be very small, some of the theories put forward will not be relevant to my proposition because they were based on larger organisations with many workers and a tall hierarchical structure, something that for the time being (subject to expansion) will not be applicable.
I propose to adopt more of a mix between a democratic and Laissez-faire style leadership. This would mean that I would allow many of my workers to work quite independently so long as they stick to the broader based strategy of the restaurant.
I would definitely approach a more Theory Y style of management as outlined by McGregor as opposed to the Theory X approach. As a ‘Y’ist I will treat the workers at the restaurant with compassion and a certain degree of respect. I feel that taking a Theory X approach is dangerous for morale of the workers and the restaurant vibe and atmosphere. The theory X approach is rarely used in most modern businesses and in my opinion has become purely academic.
My workers and chefs will have to be strongly motivated in order to achieve the desired relaxed restaurant atmosphere. To do this I will first have to make sure that my workers feel that all the Hygiene Factors outlined by Herzberg have been met. These factors would include:
- Good competitive pay with the associated benefits expected. However paying competitive wages could add extra costs to the business.
- Good working conditions will be essential to keep my workers happy. Good working conditions will be provided via my specific management style (which was discussed earlier) as well as physical conditions which in this case will include a new well operating kitchen, counters, worktops, cooking equipment etc.
- The extent to which the workers can use their own initiative without needing to be under constant supervision. Chefs as artists need to be able to express themselves, constant supervision may make them feel pressured into cooking more orthodox dishes and will stifle creativity. However not enough supervision may give the idea that the chefs are under appreciated and may also cause chefs to take work less seriously.
- Job Security would be more important to the chefs rather than the waiters who are likely to be part timers. By giving Chefs and waiters alike a sense that their jobs are secure would also contribute to the relaxed and welcoming atmosphere.
Once the above factors have been met I could then explore some motivational techniques to further inspire my workers. These motivation techniques would ultimately depend on the situation the business is in at that particular time but could include the following:
- Recognition of Achievement – Innovative Dishes
- Advancement/Promotion – Promotion from Chef to Head Chef
- Increased responsibility leading to Job Enrichment
- Better Pay – This would be entirely dependent on the situation of the company i.e. whether or not a wage increase could be afforded.
What has been mentioned above can only be seen as a rough guide of what I intend to do, it will be unlikely that I will be able to follow this plan to the exact, changing situations would have an impact on the way that I manage and run the business. Internal as well as external factors would play a part.
Questionnaire.
Regarding the chosen area, in this case Edgware Road, the questionnaire would be conducted surrounding the ever-busy Edgware Road Station, which is situated on the Circle, District and Hammersmith and City Lines as well as outside the main restaurant area. I have chosen to question 50 people on a Friday Night in early January – this is a very busy time for many of the restaurants as many customers are still on Christmas holidays. By holding my questionnaire on this night I hope to get a balance of many different age groups as well as a fair mix between male and female restaurant goers. I must conduct my questionnaire in an appropriate manner by not offending anyone with embarrassing questions or bother those who do not want to answer the questions. I will begin my questionnaire at roughly 7pm and hope to finish by 10pm.
Before I start my questioning someone, I will first note his or her gender and likely age group. I will do this to avoid asking personal questions about a person’s age. Once these 2 criteria have been established I will proceed with my questionnaire.
I will have the following age groups.
15-20
20-25
25-35
35-45
45-60
60+
Q1- Do you regularly eat out at many of the of the Arab restaurants in the area?
This question is to determine whether the person questioned eats at any of the restaurants in the area. This will be a closed answer with the only possible choices being Yes or No. If the answer is No than I will not continue with the questionnaire, as he/she would not be a likely customer. If Yes is the answer than I will proceed with the questionnaire.
Q2 – If so, How Often?
This question will determine whether the questioned people are likely to be regular customers or not. My proposed target market would be those who eat out regularly. This closed question will consist of the following choices.
Daily
Weekly
Fortnightly
Monthly
Other
If the answer would be other, I would ask him/her to specify.
Q3 – Do you try many different restaurants in the area or do you just stick to one?
This question will help me establish customer loyalty, if people just stick with one it would mean that the customers are generally quite loyal. There will be 2 possible answers to this:
Yes, I try many restaurants or No, I normally just stay with one.
Q4 – Would you be willing to try new restaurants in the area?
This question will be asked to see whether people would be likely to try my proposed restaurant. If the answer is no for the majority then the likelihood success for the business would be quite low.
There will be two given answers to the question: Yes and No.
Q5 – Do you think that there is enough choice of restaurants in the area?
If people seem to think that there is enough choice of restaurants in the area, than is my anticipated USP a viable one? There will be a Yes and No answer to this question
Q6 – Do you feel that the restaurants in the area are very similar in terms of the food that they offer?
Again this will help me establish whether a USP of a specialised Egyptian food restaurant would be successful. If the restaurants offer similar food than my proposition should be able to gain a foothold, otherwise it would not.
Q7 – How would you rate the general service of the restaurants in he area?
There will be five possible answers to this question:
Excellent
Very Good
Good
Fair
Poor
If the answer is Poor I will ask him/her to specify why.
Q8 – Have you tasted the following foods, if yes do you like them?
Here a list of Egyptian Foods will be given, for each dish he/she would be asked whether they have tasted that particular dish and whether they enjoyed it. Here a list of the following foods will be given. I will only use a select choice of those mentioned in the menu earlier. The response will consist of 2 answers Yes and No.
- Asabi' gullash bi-l-lahmaDry Pastery Fingers with Meat Filling
- Sanyet Batates (Oven Potato Stew)
- Bamya (Meat and Okra Stew)
- Feta and Lamb Stuffed Grape Leaves
- Feteer Bel Asaag (pastry with ground meat)
-
Kebab Halla Stewed Meat
Q9 – Would you be willing to try those dishes you haven’t?
Three possible answers will be given Yes, No and Not sure.
Questionnaire Results
Out of the 50 people interviewed:
29 were men
21 were women
Out of the 21 Women…
Out of the 29 Men…
Q1- Do you regularly eat out at many of the of the Arab restaurants in the area?
I actually questioned 63 people to get my required 50 who go to restaurants in the area. I have only included the data from the 50 people with whom I continued the questionnaire.
Q2 – If so, How Often?
Q 3- Do you try many different restaurants in the area or do you just stick to one?
Q4 – Would you be willing to try new restaurants in the area?
Q5 – Do you think that there is enough choice of restaurants in the area?
Q6 – Do you feel that the restaurants in the area are very similar in terms of the food that they offer?
Q7 – How would you rate the general service of the restaurants in he area?
Q8 – Have you tasted the following foods, if yes do you like them?
Women Men
Location/Premises
I would have to find a suitable location for the restaurant on Edgware Road. To do this I will be looking for empty shops to rent or buy. To do this I will search on the internet as well as visit some estate agents in the area.
I found the following sites which were in a suitable location at the following site:
http://www.cpd.co.uk/servlets/search_our_database?method=searchOurDBPage
All the above sites were in a suitable location at the marble arch end of Edgware Road. After further investigating into the locations I have decided to choose property number 5 as my preferred choice for the location of the restaurant. The main reason for this choice is its attractive price in comparison with other sites at a similar location. It also is of a relatively large size and a basement. The cost of the rent is £52000 per year.
Staffing
Finding the right and most appropriately qualified staff would be essential for business success. I would initially require two well qualified head chefs who preferably know Arab and Egyptian cuisine well. As well as this I would also need a number of part time or full time waiters and waitresses. The initial amount of waiters/waitresses needed will be 10 although this is likely to increase as the restaurant gets bigger.
The average salary for a chef according to a number of websites (see appendix) is: £15,000-£20,000, I propose to pay my 2 head chefs a salary of £17,000 initially although this is likely to rise.
The waiters who are likely to be working on a part time basis will be paid a wage of roughly £4.00/hour * rougly 70 working hours per week * maximum of 5 waiters at any one time = £1400/week * 50 weeks per year the restaurant is open = £70,000.
Total cost of chefs = £34,000
Total cost of waiters = £70,000
Total cost of staff = £104,000 per year (approx)
Advertising and Promotion
Promotion would be a vital aspect in the business start up procedure. My promotion techniques should ensure that restaurant goers in the area are well informed of what my restaurant will have to offer. The types of promotion I intend to use will primarily based on how to attract as many customers to the restaurant as possible. When deciding the budget for promotion I would have to look at the amount spent by competitor restaurants and base them accordingly. This is known as competitor based budgeting, I chose to use this method over the more commonly used incremental budgeting method which cannot be used in this scenario as it uses budget data from previous years.
However despite my initial idea of setting my promotion budget in line with competitors, I was unable to find out how much they were spending. Many of restaurants were well established and didn’t need to use promotion while others wouldn’t disclose the information. I therefore intend to come up with my own budget of £400 which I feel should suffice.
Leaflets
Leaflets are a relatively cheap, yet affective way to advertise a local business. A number of quotes have been obtained to place this in perspective. (see appendix)
PDC Copyprints Partner Joan Pilgrim quoted a better deal of 9 000 A5 coloured paper printed with black ink to cost a total of £240. However this quote was subject to an ‘own’ design for the layout being provided.
If it were decided to adopt the leaflet method, a distributor would be required. Having found two potential distributors, £100 would be available in return for all 9 000 leaflets being distributed.
Other Promotional Techniques
The area of Edgware Road has a large Arab and Muslim population with strong views about the plight of many Palestinian Refugees; I intend to ‘exploit’ these political views in the area by proposing to give 5% of my profits to Palestinian Charities. This would be a very effective method of promoting and attracting customers to my restaurant although it may deter others.
Finance
One of the key elements in proposing whether a business would be a success or not is whether the business is likely to break even over a reasonable period of time and how long it would take to actually make a profit. No one can be absolutely sure how much a business will make, but certain techniques such as cash flow forecasts can help to give a rough estimate. There are many key variables that influence cash inflows and outflows, some can be predicted but others are just random events. This is why cash flow forecasts cannot be entirely trusted.
The following is a number of important points about my cash flow forecast.
Cash Outflows
Staff cost = £104,000/anum, £8666/Month
Cost of premises = £52,000/anum, £4,333/month
Furniture Costs = £2858.65
(Price includes 15 tables and 85 chairs and is quoted from foodservicedirect.com)
Leaflet Distribution/Prmotion = £340
(This will only be a cost for the first month after which no more leaflets will be distributed)
Gas, Heating, Lighting and Electricity Costs = £500/quarter (Estimate)
Stock Purchases = £7000/Month (Estimate)
Renovation Costs = £20,000 (One off payment)
Cash Inflows
Projected Sales = Differs from month to month
70 people/day-Monday to Friday,
220 on weekends
Total Customers/Month = 2280
Average Cost/Meal = £12 * Customers/Month (2280)
= 27, 360/month
(This is just a rough estimate per month, I will add or subtract no of guests for each month depending on how busy I think it would be that month. Eg –I estimnate that more people will eat at my resrtaurant during the summer months so I might push this figure up to 29,00 for June, July, August)
Start up Capital = £5000 One off payment
(This money will come from a number of private investor, including family members)
Pricing Tactics
The pricing tactics to be used for my proposed business are of immense importance and form one of the main elements of the marketing mix. There are many different types of strategies available for the pricing of my meals each having many advantages and disadvantages. However, I must ensure that the pricing tactic selected by myself will be beneficial for me and above all successful.
The strategy which I have chosen will be a competitor based one. I will base my prices roughly on other mid-market restaurants in the area which would most likely be my direct competition. I have chosen this because I feel that my USP would be strong enough to attract customers from rival restaurants without having to lower my prices and compromise on my profit margins. However if this strategy fails I would propose to set my prices low initially to gain a market share and then perhaps raise them slowly, this strategy is known as market penetration.
Conclusions
Whether people are likely to go to such a café Whether people are likely to go to such a restuarant
Yes – see Question 4
The main age group of my customers
20-30
The type of food that should be available
Researched on the internet, see menu in the secondary research section
The prices that a customer will be willing to pay/what pricing strategies will be affective.
Competitor based
A suitable location on Edgware road
Researched on the internet – see location/premises section
What type of promotion strategies should I use?
Leaflet Distribution
The costs involved in starting such a business
See Cash Flow forecast
Staff
Apropriate Chefs and waiters have been located and costs of staff defined
Areas of threat/competition
SWOT Analysis of Proposed Restaurant
Strengths
- The business would have the USP of being the only restaurant in the area catering specially in Egyptian food.
- The Cash Flow Forecast shows that the business will begin to make a profit in July, 6 months after its opening.
- The proposed promotional strategy (Palestinian Charities) is a strong one and plays on people’s often-emotional views.
- My secondary research shows that the restaurant market in the UK is growing quite steadily and that ethnic food restaurants are the most popular.
Weaknesses
- Despite the encouraging figures in the Cash Flow Forecast, consideration needs to be made that the sales figures are optimistic and only an estimate. They do not guarantee sales in that number.
Opportunities
- As stated earlier, he restaurant industry is growing fairly steadily.
- The option of opening in other locations in London if the restaurant proves to be successful.
- If the restaurant proves to be popular we can sell our name as part of a franchise allowing other people to benefit from the success that would also raise our profit margins as well as create more awareness of our restaurant.
- Possibility to create a fast food division within the store further exploiting market trends and ‘cash rich, time poor’ consumers.
Threats
- The number of well establoished restaurants in the surrounding area, which could use tactics such as predator pricing to eliminate my restaurant.
- If this USP or Niche is successful it may encourage other restaurants to adopt a similar strategies in order to take market share.
- It may be hard to attract customers form the more well established restaurants that have a loyal customer base.
Final Recommendations – Is it feasible to open an Egyptian Restaurant on Edgware Road?
