Business plan - The business that I am planning to open up is a small restaurant named East Meets West in Stechford, Birmingham operating as a Sole Trader
Task A
I have recently received a legacy from one of my grandparents worth £10,000 and feels that this is the right time that I must open my own business.
The business that I am planning to open up is a small restaurant named East Meets West in Stechford, Birmingham operating as a Sole Trader
Business Plan
Owner: Daryl Llanes - Earned a Business Management Degree from the University of Birmingham. Worked as a Bank Teller for 3 years. Started out as a waiter after leaving the bank then became a Licensed Chef in a Chinese restaurant named 'Chanz' in Worcestershire for 10 years before resigning on the job. Received a Food Hygiene Certificate from CIEH Foundation after training to them to become a professional food handler.
Business Name: East Meets West Restaurant
Location: Stechford Retail Park in Stechford.
Aims
* To serve quality food that will suite the needs of the customers.
* To provide a wide range and selection of oriental food for the public.
Short Term Objectives
* To break even on the first year of the business.
* To gain customers more than expected within one year.
* To have a loyal customers a good profit to keep the business through the next year.
Long Term Objectives
* To establish a good name in the market.
* To increase the sales every year and attract more customers.
* To expand the business.
My restaurant will provide a unique combination of excellent food at value prices with a fun and entertaining atmosphere. The restaurant will be serving oriental types of cuisine. This can help to promote the famous oriental dishes around the world. The initial capital investment will allow us to provide the customers with a value driven and entertaining dining experience.
Market Research (Primary and Secondary)
My business is faced with exciting opportunity of introducing oriental food and cuisines. The consistent popularity of curry and oriental food, combined with a value price point in a buffet concept has proven to be winning concept in other market and will produce the same results nationally. In looking in at our market analysis, we have defined the following groups as targeted segment for lunch. I firmly believe that a much broader appeal exists for this mid daytime slot because we have priced it fairly and feature our special rice and noodles.
Primary Research
Target Market Customers
I have a carried out a Primary Research just before I took a step any further. Primary Research is important especially in the business that I ma going to open because I want to know the response of people about eating in a restaurant. This is really helpful because a business man like me will know exactly the target audience and that is one of its advantages. Below is the list of my target audience for the business:
* Age - Seniors, Professionals and married couples with children.
* Gender - The restaurant will equally target both sexes with a slight skew for males due to their heavy consumption of meat and seafood. According to my research and own experience, most males who visits restaurants usually orders meat and seafood for their meals. Most males that eat in restaurants are not vegetarians. Only some number of females that visit restaurants eat salads and vegetable dishes.
* Income - The restaurant will appeal to the high side of low income individuals and to all in the middle income bracket.
* Occupation - Working professionals with family.
The restaurant's main target audience are the people aged 20-60 especially the people in working class. These are the people that normally eat in restaurants and there are many working class people in the location that I have chosen. Around the premises of my business are Argos,
Questionnaire Evaluation
Before I started opening my business, I have asked people in Stechford and places nearby about their eating and food lifestyle. I gave them questionnaires for them to answer. I have done theses questionnaires to have a feedback from people if they prefer eating in a restaurant or not.
For the first question, I have asked their gender. Asking people in both sexes will help me to know their response about food business and their lifestyle. 16 people are male and 14 people are female.
I have asked people between 16-62 years old. 12 people that I have asked are on their maturity years (16-30), 10 people between 31-41 and 8 people between 42-62. Asking people with different ages is really helpful so that I can know their style of food and eating on those ages.
90% of people that I have asked usually eats in a restaurant or food shop. This is really helpful because I am setting up a restaurant business.
For this question, 20 people usually visit restaurants at dinner time and 10 people at lunch time and none during breakfast. This question is very important to know my best time of the day during opening hours.
I have asked these people what type of food or cuisines they prefer. 12 people prefer English food, 10 people for Oriental cuisines, 5 people for Continental dishes and 2 for other type of cuisines. The result was good even if some people still prefer their traditional dish.
25 people said that the restaurant that they visited serves the food at the right time. By this, we must have a good service to our customers.
30 people that I have asked, 28 of them said that they feel comfortable with the place everytime they ...
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I have asked these people what type of food or cuisines they prefer. 12 people prefer English food, 10 people for Oriental cuisines, 5 people for Continental dishes and 2 for other type of cuisines. The result was good even if some people still prefer their traditional dish.
25 people said that the restaurant that they visited serves the food at the right time. By this, we must have a good service to our customers.
30 people that I have asked, 28 of them said that they feel comfortable with the place everytime they visit restaurants. This can help me to develop a relaxing and comfortable environment that will suite my customers.
This graph shows that 18 out of 30 that I have asked said that the food charges on the restaurants that they visited are affordable and fair enough. However, 12 people found the prices quite expensive. This is really helpful to charge my customers fairly for affordable prices.
All the people that I have asked said that the members of the staff are very nice and helpful. Therefore, having a set of staff with good personalities could be big advantage.
The result for this graph was excellent. 20 out of 30 people said that the food and service are excellent and 10 people said that it was good. This can help me to offer our customers quality food and services.
All the people that I have asked said that they are satisfied about the environment, charges, services and food of the restaurants they visited.
To conclude, the result of my questionnaire was good. These questions could be our guidelines throughout the success my business.
Secondary Research
Conducting Secondary Market Research is a key part of successful marketing for my restaurant. It means gathering publicly available data that help me make the right decisions throughout the marketing process of the business.
Two main categories:
Public - public sources would be my customers or the target audience of my restaurant. These sources are the most economical because they are free and can offer a lot of good information.
Commercial - commercial sources are equally valuable but usually involve costs such as subscription and association fees. We can use small billboards and posters to have the familiarity of people about the restaurant.
According to www.pewresearch.org, about third of he public say that they eat in a restaurant less than weekly. Another third say they eat out about once a week and another third say they eat out twice a week or more.
When respondents were asked whether they eat a meal from fast food restaurants such as McDonald's or Burger King, one third of the public say they never eat such food. A quarter say they do so less than once a week, 22% say they do so about once a week and the remaining 19% say they do so twice a week or more.
Men eat at restaurants and eat fast food more frequently that women. Younger adults ages 18-49 tend to eat at restaurants and eat fast food more often than do older adults ages 50 and older.
The generational differences are especially strong when it comes to eating fast food. About six in ten (59%) adults under age 30 eat a meal every week from a restaurant, compared with about two in ten (19%) of those ages 65 and older that do so.
This secondary research could be very helpful because it lays the foundation for a useful and constructive market research report which a relevant industry insight to business owners and investors for strategically targeting unexplored markets.
Capital Required
After carefully studying the business that I want to open and the Primary Research and Secondary Research that I have done, I need to have 70,000 worth of capital to set up this business. I am planning to loan money from the bank and borrow £60,000. This amount of money will make up the capital that I required including £10,000 legacy from my grandparents. The loan worth £60,000 that I am going to borrow is repayable for 8 years (96 months), so I will have a monthly repayment of £971.49.
Advantages of Loan
* I am guaranteed the money for a certain period - generally 3 to 10 years - unless I breach the loan conditions.
* Loans can be tied to the lifetime of the equipment or other asset I am borrowing the money to pay for.
* I may be able to negotiate a repayment holiday, meaning that I only pay interest for a certain amount of time whilst repayments on the capital are frozen.
* Interest rates may be fixed for the term so I will know the level of repayments throughout the life of the loan.
* There may be an arrangement fee that is only paid at the start of the loan but not throughout its life.
I am planning to lease a property on my chosen location in Stechford Retail Park in Birmingham. Leasing is much preferable than purchasing or buying. It is like renting it over a period in return for fixed rental repayments. Leasing can be tax efficient as they can reduce the overall tax bill, as the cost is deductible as a business expense.
Advantages of Leasing
Disadvantages of Buying or Purchasing
* I do not legally own the asset. It is returned at the end of the rental, hire or lease period.
* I do not bear the risk that when I have finished with the property, its value has decreased below the amount I paid for it.
* The asset can often be replaced by a newer one by upgrading at little or no extra cost.
* I do not have to find a large cash deposit
* I will have to cover repair and maintenance costs.
* If I want to change or upgrade the asset, I can sell the existing one but the proceeds may be less than the outlay in purchasing it.
Source: www.businesslink.gov.uk
SWOT
SWOT Analysis is an effective way of identifying the business' Strengths and Weaknesses, and of examining the Opportunities and Threats it face.
Strengths
* Lower price point for a complete meal.
* Speed of service will be instant. No long waiting for the food, salad beverage or dessert. Everything will be readily available: hot, juicy, fresh and cooked as requested.
* Customers will choose from over 30-40 dishes prepared daily. It is often difficult to meet the dining requests of each family member due to individual tastes. But they can choose any kind of food from the selection that will suit their taste.
* We will serve better quality food than our competitors.
* Our surroundings will be more entertaining than our competitors e.g. cooking infront of the customers, sound system connected to a jukebox.
* Strong relationships with vendors that offer high quality ingredients and fast frequent delivery schedules.
* Excellent staff who are highly trained and very customer attentive.
* High customer loyalty among repeat customers.
* High quality food offerings that exceed competitors' offerings in quality, presentation and price.
Weaknesses
* Foods in other restaurants are much cheaper than East Meets West. However, we can guarantee the good service and quality of the restaurant.
* Not enough budget to advertise that much. The business can only do simple advertisements.
* A limited marketing budget to develop brand awareness.
* The struggle to continually appear to be cutting edge.
Opportunities
* To expand the business in the near future.
* To have a good name in the market.
* Increasing sales opportunities in take out business.
* The ability to spread overhead over multiple revenue centres. The business will be able to spread the management overhead costs among the multiple stores, decreasing the fixed costs per store.
* To stay in the business for a long time.
Threats
* Competition against other restaurants with big names in the market.
* T.G.I. Friday's
* Japanese Restaurants around Birmingham e.g. Shogun, Miyako
* McDonald's, KFC, Pizza Hut etc.
* A slump in the economy reducing customer's disposable income spent on eating out e.g. mass unemployment, inflation, decreasing wages.
* Restaurants might imitate our style of food and services.
* Ingredients in the market might decrease and that can cause a problem to the business e.g. low fish stocks means that prices needs to go up because of expensive fish.
In my business, the SWOT analysis is good and we are hoping that is going to improve. The restaurant has so much strengths than weaknesses. I can say that when it comes to service and quality, I can guarantee the satisfaction of the customers. Hopefully, the business can achieve its opportunities and expand the business. As the owner of the restaurant, I am aware about the threats that may come and occur. This analysis can be the guide for the business to achieve its goals and objectives.
PESTLE
PESTLE analysis is concerned with the environmental influences on a business.
The acronym stands for the Political, Economic, Social, Technological and Legislation issues that could affect the strategic development of a business.
Identifying PESTLE influences is a useful way of summarising the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences.
Political - the restaurant can affect the environment because of our daily activities e.g. disposing waste. However, we minimise impacts associated with odour, noise, effluent and emissions to the atmosphere and reduce the amount of solid waste. We also increase the value recovered from solid waste before its responsible disposal. Environmental Protection Act 1990
My business also pay taxes to the govenrment e.g. VAT, National Insurance, PAYE and Payroll and we also implement consumer protection and employment law in my restaurant; The Consumer Protection Act 1987
Economic - this part of PESTLE can affect my business by the growth of the economy e.g., population, businesses. This also includes the business tax and the exchange rate. If the economy is struggling, it can really affect the business because product prices would increase and consumers' confidence on businesses may decline.
Social - there are number of factors on this section like the income distribution of consumers by changing in distribution of disposable income. The age stucture of the population that has an interest in eating in a restaurant e.g. target audience and the standard living of the consumers if it is affordable to eat in my restaurant.
Technological - technology could affect my business because of the energy that the restaurant is using e.g. electricity, telephone and the costs of these expenditures. People can also find some information of the restaurant through the Internet and this is one of the biggest factors that affect businesses.
Legislation - before I opened my business, I have contacted a business license department to find out about getting a business licence which essentially grants me the right to operate my business. As a sole trader, I have contacted both the Contributions Agency and the Inland Revenue then I registered with them by filling in one form - CWF1.
Marketing Mix
4 P's
Product - Our product will have the freshest ingredients including organic vegetables, salad, fresh meat, fish and seafood. We will be serving oriental type of cuisines and will be developed to enhance presentation, everything will be aesthetically pleasing.
We will be serving noodles, soups, steaks, sushi, curry, rice and many more. The restaurant menu would be a mixture of English, Chinese, Oriental and Japanese food.
Place - the location of my business is referred as the place decision. Decisions must be made as to whether it is a retail or wholesale, how many participants there will be in the distribution process and in which physical locations each of the types of the product will be made available.
My restaurant will be located in Stechford Retail Park in Stechford Birmingham. The location will feature authentic Oriental style of decorations and furnitures. The restaurant will be equipped with a sound system connected to a jukebox where our customers will be able to select their favourite songs for free. The restaurant will be built up to our prototype specifications, clean lines, open and pleasing to the customers.
The location was based upon the following reasons:
* Community size of 10,000 people within miles.
* High visibility - Stechford Retail Park is near the road where cars, vans and buses 11 and 14 are travelling everyday. My restaurant is highly visible to travellers.
* Easy access to parking.
* Blue-collar worker make up the community.
The place is nice and comfortable, so all the customers can relax and enjoy.
Opening Hours
Lunch Time
Dinner Time
Monday
Closed
Closed
Tuesday
12:00 - 15:00
18:00 - 23:00
Wednesday
12:00 - 15:00
18:00 - 23:00
Thursday
12:00 - 15:00
18:00 - 23:00
Friday
12:00 - 15:00
18:00 - 23:00
Saturday (w/ Buffet Lunch)
12:00 - 15:00
18:00 - 23:00
Sunday (w/ Buffet)
12:00 - 17:00
Closed
The restaurant will be open Tuesdays to Sundays from 12:00 - 15:00 for lunch time and 18:00 - 23:00 for dinner. I have chosen these opening times because I believed that these days and times are the real business point of the week. Opening the restaurant for lunchtime is good. There are many people in working class will go out for lunch, and this is a good opportunity to gain customers. Opening this business at night has much better opportunity to gain customers. There are so many people going out in the evening to enjoy and have party. This is the best time to attract and gain customers. There will also be a lunch buffet every Saturdays and Sundays.
Price - Pricing decisions will include assessment of the market conditions and competition, desired target returns on investment, product positioning, and image through price/quality relationships. In this part of Marketing Mix, we are offering our food and service in a very affordable price. Our customers can choose from a wide selection of oriental food that can suite their taste and style.
Appetizers
King Prawn
£7.35
Japanese Fish
£6.25
Calamari
£6.25
Mixed Seafood and Vegetables
£7.25
Mixed Vegetables with Crab Meat
£7.25
Mixed Vegetables with Julienne Calamari
£7.25
Mixed Vegetables Plain -V
£5.25
King Prawn
£6.25
Scallops
£6.25
Mixed Vegetable Dumpling - V
£3.75
Chicken Dumpling
£4.20
King Prawn Dumpling
£4.25
Tofu - V
£3.95
Assorted Zensai
£5.20
Harumaki
£3.95
Tori Nambazuki
£3.95
Main Courses
Fried Rice
£2.50
Boiled Rice
£1.00
Asparagus
£3.00
Oriental Mushrooms
£3.00
Garlic Mushrooms
£3.30
Aubergine
£3.00
Kenya Beans
£3.00
Courgette
£3.00
Mange-tout
£3.00
Tuna Fillet
£14.95
Salmon Fillet
£11.50
King Prawn
£12.50
Mussels
£11.50
Jumbo Scallops
£12.95
Lobster
£17.00
Chicken
£10.95
Breast of Duck
£14.00
Fillet of Beef
£15.00
Sirloin of Beef
£12.95
Fillet of Lamb
£12.50
Ozuyaki
£14.00
Ozuyaki Tori
£11.95
Desserts
Banana Tempura
£4.00
Mixed Fruit Tempura
£4.00
Ice Cream Tempura
£4.00
Green Tea Ice Cream
£4.00
Melon
£2.75
Fresh Fruit Salad
£2.50
Ice Cream
£2.75
This menu includes the buffet every Saturday from 12:00 - 15:00 and Sunday from 12:00 - 17:00. The buffet will cost £5.00 for children under 11 years old and £9.00 for adults. Children under 4 years old will be free.
Promotion - the main aims of promotion are to persuade, inform and make people more aware of the restaurant, as well as improving sales figure.
On this section, I am going to bullet point my target audience with their ages and life standard:
* Age: 20-60 years old.
* Gender: Male and Female. But mostly male, because more often males eating in restaurants.
* Mostly people in working class.
These are the main target people of my restaurant. They will develop more awareness on the promotions that we are doing.
My restaurant would not advertise on TV because it is very expensive. I have £500 budget for promotion on the first month of operation. Sales promotion is designed to encourage new and repeat sales. Loyalty cards, free gifts, competitions and voucher schemes are the most popular. Promotion covers all the different ways a business can communicate with its customers. Promotion is classified as following:
Advertising - I will be using advertisement to promote my business. I can advertise by using small billboards and posters that will be posted around Stechford and places nearby. There are many people walking around or with cars on these areas so the advertisement is noticeable. People in working class usually travels in Stechford.
Direct Marketing - the main target for promoting are the people in working class with family. I want to direct the promotion to them because these are the people that can be loyal to my restaurant.
Sales Promotion - I am planning to offer some good promotions to my customers to earn their loyalty. Every end of the month, customers can have a free set of meal when they order food worth £20 and up. This is a good incentive because it is attractive to them.
Public Relations - I can advertise locally on the newspaper so people will be more familiar on my restaurant. Newspaper advertisement is a very effective way of promoting because all people read newspaper.
Sponsorship - this is an expensive form of promotion and not much included on my business promotion. However, my restaurant can sponsor for charity works, small football teams and events that wants to be sponsored. This can also increase the familiarity of people.
Competition
There is only one major competition around the premises, the McDonald's Restaurant. This could be a threat to my business in some ways because of the food that they are serving in very affordable prices. However, I can say that their food is not healthy because of high fat like burgers and fries that are risky for the health of the customers.
Competitive Strategy
There are three major ways in which we will create an advantage over our competitors;
* product identity, quality, and novelty
* high employee motivation and good sales attitude
* innovative and aggressive service options.
Veggie Dishes
Asparagus caesar salad
£6.75
Organic purple bittersweet salad
£6.50
Mixed leaves & herb salad
£4.50
Organic puy lentil torte
£13.25
Parmesan & nettle polpetta
£12.95
Aubergine ganmodoki tempura
£12.25
Chef salad
£10.25
Pasta of the day
£9.50
Organic lemon meringue tower
£7.25
Cocoa éclair
£6.95
Blueberry piroshki
£6.75
Organic brie
£6.50
My restaurant will be focusing the entire menu on healthy, low-fat cooking. Each of the competitors offers at least one "healthy" selection on their menu. The target market will perceive my restaurant as the destination location for healthy, low-fat cooking. We will be offering menu for those people who are vegetarians and health conscious.
Daryl Llanes
Business Examination
Unit 8