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Our business idea is traditional Russian restaurant which will be situated in Baker Street.

Extracts from this essay...

Introduction

OVERVIEW Our business idea is traditional Russian restaurant which will be situated in Baker Street. It will represent genuine Russian cuisine and atmosphere in the uniquely decorated time-honoured surroundings and accompanied by pleasant employees. MISSION STATEMENT "To provide a place where people can enjoy the genuine Russian atmosphere, traditions and customs, while getting pleasure from traditional Russian food and entertainment in the heart of England." TRENDS DISCOVERED FROM MARKET ASSESSMENT Accordingly to the market research we found out that: theme restaurants are of a growing interest as well as ethnic restaurants. Therefore we can conclude that there is a growing demand for our type of restaurants. BUSINESS STRATEGY Revenue Streams Meals Billiard games Celebration of special occasions Bar drinks Entertainment SWOT ANALYSIS Strengths Weaknesses Geographic location Narrow service line Access to variety of customers No brand image Provided Entertainment Lack of space (e.g. parking) Quality of food and services for reasonable prices Friendly staff Opportunities Threats Target different consumer groups All substitutes Create customer loyalty All other leisure activities Expand to nightclub or karaoke Changes in economic Market growth circumstances 2004 2005 Revenue 518635 570503 Profit 59191,5 119874,8 NEW BUSINESS CONCEPT The fact that our new venture would be based in such a multicultural place as London straightaway gives us a huge opportunity to succeed. First of all because this broadens our target market, now we not only aim at English people and about 100,000 Russians living in London, but also all other nationalities who would like to expand their knowledge of Russia by staying at our little island of Russian culture called "Izba". We have this confidence in existing demand due to a lot of research we have done recently. Phrases like "I love Russia, Russians, your language and your culture!" or "I have been to Russia so many times and miss that and that so much!" is something common to hear from a British person or any foreigner.

Middle

Respondents in the ABC1 socio-economic group are also most likely to think that better service will be found at small restaurants rather than large ones. Categories used to describe consumer behaviour include: Quality Seekers This consists of 84% of respondents who value quality of service and will, therefore, choose restaurants which they perceive as providing this. Of note is that these consumers are not restricted to branded (chain) restaurants but invariably will visit independent restaurants, viewing them to be better able to provide the quality of service that they seek. Innovators Representing 67% of respondents, these are typically consumers who are susceptible to new foods, venues and concepts when eating out. These diners are likely to be more inclined to choose restaurants providing different cuisine from British food restaurants and are also likely to visit eateries that change their menus on a regular basis. These include independent restaurants that are more able to change their menus due to their supply structure being less restricted Ambience seekers With just over 60% of respondents representing ambience seekers these are a group of consumers for whom the restaurant surround is as important as the food. Consumers in this category place a greater value on entertainment and will visit restaurants that provide some sort of theatre. Restaurants which appeal to this group include themed restaurants where memorabilia plays an important part in creating the general feel of the restaurant; and traditional restaurants providing British, French, Italian, Indian and Chinese cuisine where the ambience is captured by the music played and design of the furnishings. More recently minimalist restaurants have become popular. These typically have basic furnishings such as wooden tables and benches in a modern setting. Music played at these venues will also be contemporary. Special treat seekers This category is represented by 42% of respondents and typically includes consumers who do not eat out often, but are more likely to dine out for special occasions, events or when there is a special promotion undertaken by restaurant operators.

Conclusion

Break-even = 241,000/71% of price = £339,437 This means that in order to break-even the restaurant must have sales of £339,437 in one year or £28,286 per month. £ Total revenue Total costs 339 437 241 000 Fixed costs Customers Evaluation of break-even analysis Break-even analysis is simple to conduct and understand. Also it is cheap and can be carried out quickly. It shows profit and loss at various levels of output, particularly when it is presented in the form of a chart. This may be of a particular value when a business is first established. Indeed it may be that financial institutions will require this sort of financial information before lending any money to someone aspiring to run a business. Although it is a rudimentary technique, break-even analysis can cope with changing circumstances. We have seen that the technique can allow for changing revenues and costs and gives a valuable rule-of-thumb guide to potential profitability. However, break-even does have some drawbacks. It pays little attention to the realities of the marketplace. A major flaw is that it assumes all output is sold. This may well be untrue and, if so, would result in an inaccurate break-even estimates. If a firm sells less than it produces it incurs costs without earning the corresponding revenue. This will substantially reduce profits. In times of recession, a firm may have difficulty in selling all that it produces. Although break-even can cope with changes in prices and costs, in the real world such factors change regularly making it difficult to as a forecasting technique. Changes in tastes and fashions, exchange rates and technology are all examples of factors, which could invalidate break-even forecasts. The model assumes that costs increase constantly and that firms do not benefit from economies of scale. Similarly, break-even analysis assumes the firm sells all its output at a single price. In reality firms frequently offer discount for bulk purchases. Finally, break-even analysis is only as good as the data on which it is based: poor quality data can result in inaccurate conclusions being drawn.

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