organic restaurant in mumbai _business plan

organic restaurant in mumbai _business plan - Restaurant -...

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Unformatted text preview: Restaurant - Shuddha Swaad, organic food restaurant Shuddha Swaad Executive summary 1.1 Objectives 1.2 Mission 2.0 Company Summary 3.0 Services 4.0 Market Analysis Summary 5.0 Strategy and Implementation Summary 6.0 Management Summary 7.0 Financial Plan Executive Summary Shuddha Swaad is a new medium-sized restaurant located in a Mumbai Suburbs. Shuddha Swaad's emphasis will be on organic and Indian ethnic food. An emphasis on organic ingredients is based on Shuddha Swaad's dedication to sustainable development. Additionally, the restaurant employs its staff from the villages and trains them. Services Shuddha Swaad offers a trendy, fun place to have great food in a social environment. The restaurant offers a large repertoire of ethnic ingredients and recipes from across the states. Ethnic recipes will be used to provide the customers with a diverse, unusual menu. The emphasis is on re-introducing the local healthy options to the city life. Being organic, is just another value addition to it. Customers With the growth trend towards µspecialty restaurant¶ Shuddha Swaad believes that it has a strong market. Its main target audience will be rich hippies who naturally desire organic foods as well as ethnic cuisine, estimated to be at 10,00,000 in numbers. The second group that will be targeted is young nuclear families with double income, which are growing at an annual rate of 12% with 450,000 potential customers. The last group which is particularly interested in the menu's healthy offerings is dieting women which number 350,000. Management Shuddha Swaad has assembled a strong management team. Anitha Desai will be the general manager. Anitha has extensive management experience of organizations ranging from six to 45 people. Priyank Jain will be responsible for all of the finance and accounting functions. Priyank has seven years experience as a CPA. JLastly, Shuddha Swaad has chefs Annapoorna Devi and Durgaprasad Rao who will be responsible for the back-end production of the venture. Collectively they have over 37 years of experience. The market and financial analyses indicate that with a start-up expenditure of $141,000, Shuddha Swaad can generate $350,000 in sales by year one, $500,000 in sales by the end of year two and produce net profits of 7.5% on sales by the end of year three. Profitability will be reached by year two. Objectives 1. Sales of $350K the first year, more than half a million the second. 2. Personnel costs less than $300K the first year, less than $400K the second year. 3. Profitable in year two, better than 7.5% profits on sales by year three. Mission Shuddha Swaad is a trendy and healthy place to eat, combining an intriguing atmosphere with excellent, interesting food that is also very good for the people who eat there. A rewarding place for employees, which is reflected in their service delivery. Company Summary Shuddha Swaad is a single-unit, medium-sized restaurant. We focus on organic and creative food. The restaurant will be located in Mumbai. Most important to us is our financial financial success, but we believe this will be achieved by offering high-quality service and extremely clean, non-greasy food with interesting twists. Company Ownership The restaurant will start out as a simple sole proprietorship, owned by its founders. Start-up Summary The founders of the company are Rajesh Chavan and partner Harshad Mane. Harshad focuses on the financial issues and Rajesh on the personnel issues. Rajesh earned his business major degree from the IIPM. We have found the location and secured the lease for $2,000 per month. We will be able to set up shop in time to begin turning back a profit by the end of month eleven and be profitable in the second year. The place is already equipped as a restaurant so we plan to come up with a total of `.40,000 in capital, plus a `.100,000 SBI guaranteed loan, to start up the company. Start-up Requirements Start-up Expenses Legal Stationery etc. Other Total Start-up Expensesrs. Start-up Assets Needed Cash Balance on Starting Date Other Current Assets Total Current Assets Long-term Assets Total Assets Total Requirements Funding Investment Investor 1 Investor 2 Total Investment Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Current Liabilities Long-term Liabilities Total Liabilities Loss at Start-up Total Capital Total Capital and Liabilities `88,000 `50,000 `138000 `0 `138,000 `141,000 `1,000 `1,000 `1,000 `3,000 `25,0000 `15,0000 `40,000 `1,000 `0 `0 `1,000 `100,000 `101,000 (`3,000) `37,000 `138,0000 Services The Menu The menu is going to be extremely simple but changing every day. We will keep a small group of constants on the menu and then feature a chef's recommendation that we plan to have 85% of meals ordering. This will help us to reduce waste and plan ingredients and purchasing. Organic Ingredients The organic ingredient element will allow us to price to the extremely wealthy Internet entrepreneurs who are looking to spend an exorbitant amount of money to have peace of mind that their money is still coming back to themselves. We will be extremely ecologically conscious as well, and spread this across our literature. Ethnic Ingredients and Recipes Our chef will have great latitude in designing and producing menu offerings from many different Indian cultures. We will endeavor to procure all the traditional, authentic ingredients necessary to hold true to these varied and interesting cultural recipes. Market Segmentation The Rich Trend setters: Organic is becoming a way of life for this target segment. Rich lads, who naturally desire organic foods as well as ethnic cuisine, estimated to be at 10,00,000 in numbers. They are an easy target to attract for the trials. To hold them and make them repeat customers is the key. Nuclear families: Working couples are usually more interested in trying out places which are trendy and healthy at the same time. They have double income and it is particularly easy to make them spend money again - they spend the most on drinks, appetizers and tips. Diet conscious women segment: Last group which is particularly interested in the menu's healthy offerings is dieting women which number 350,000. The organic food menu will always have a line of extremely delicious very low-fat meals. Market Analysis Strategy and Implementation Summary Our strategy is simple, we intend to succeed by giving people a combination of great,healthy, interesting food, and an environment that attracts "trendy" people like a magnet. Implementation isn't simple, but that's in the doing of it, not in the plan. Competitive Edge Our competitive edge is the menu, the chef, the environment, and the tie-in to what's healthy and trendy. Sales Strategy As the table shows, we intend to deliver sales of about $350K in the first year, and to double that by the third year of the plan. Sales Forecast Unit Sales Meals Drinks Other Total Unit Sales 2008 22822 11415 2009 35000 17500 2010 45000 22500 240 34,477 500 53000 1000 68500 Unit Price Meals Drinks Others Sales Meals Drinks Others 2008 60 20 30 2009 70 20 30 2010 70 20 30 Total Sales Direct unit cost Meals Drinks Others Direct cost of sales Meals Drinks Others Subtotal direct cost of sales 342330 22830 2400 367560 2008 20 10.50 10 2008 45644 5708 240 51952 525000 5000 5000 565000 2009 20 10.50 10 2009 70000 6750 500 79250 675000 45000 45000 730000 2010 20 10.50 10 2010 90000 11250 1000 102250 Management Summary We has great experience managing personnel and we are quite confident of his ability to find the best staff possible. Our chef, Annapoorna and Durgaprasad, is already on board and has a published cookbook that will add prestige to the restaurant immediately. We will be looking to find a young, ultra-hip staff to make sure we add the edge that makes Shuddha Swaad so trendy. Personnel Plan As the personnel plan shows, we expect to invest in a good team, fairly compensated. We think the planned staff is in good proportion to the size of the restaurant and projected revenues. Personal plan 2008 2009 2010 Manager Hostess Chef Cleaning Waiter Other Total people Total payroll 60000 42000 54000 30000 72000 24000 6 282000 65000 45000 60000 35000 100000 52000 10 357000 70000 50000 65000 40000 130000 55000 12 410000 Financial Plan We expect to raise rs.30,000 of our own capital, and to borrow $100,000 guaranteed by the SBA as a 10-year loan. This provides the bulk of the start-up financing required. Break-even Analysis Our break-even analysis is based on the average of the first-year numbers for total sales by meal served, total cost of sales, and all operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. We realize that this is not really the same as fixed cost, but these conservative assumptions make for a better estimate of real risk. Break-even Analysis Monthly unit break even Monthly revenue break even Assumptions Average per unit revenue Average per unit variable cost Estimated monthly fixed cost Projected Profit and Loss 14028 146453 10.44 8.34 29459 As the profit and loss table shows, we expect to become barely profitable in the second year of business, and to make an acceptable profit in the third year. Pro forma profit and loss Sales Direct cost of sales other Total sales cost Gross margin% 2008 367560 51592 0 51592 85.96 2009 565000 79250 0 79250 85.97 2010 730000 102250 0 102250 85.99 Expenses Payroll Sales & marketing and other expenses Depreciation Utilities Other Total operating expenses PBIT Interest expenses Taxes incurred Net profit/sales 282000 27000 357000 35000 410000 72122 1000 1200 0 353500 37532 10000 0 -12.93% 1050 1250 0 448690 37050 9500 6890 3.66% 1103 1323 0 545047 81703 8250 18669 7.50% Projected Cash Flow The cash flow projection shows that starting cost and provisions for ongoing expenses are adequate to meet our needs until the business itself generates its own cash flow sufficient to support operations. Projected cash flow Cash received Cash received from operation Cash sales Cash from receivables Subtotal from operation Additional cash received Sales tax, VAT/ HST/ GST New current borrowing New other 2008 2009 2010 367560 0 367560 565000 0 565000 730000 0 730000 0 0 0 0 0 0 0 0 0 liabilities New long term liabilities Sales of other current asset New investment received Subtotal cash received Additional cash spent Sales TAX/ VAT/ HST/ GST paid out Principal payment of current borrowing Long term liabilities Subtotal cash spent Net cash flow Cash balance 0 0 0 367560 0 0 0 565000 0 0 0 730000 0 0 0 0 0 0 0 404797 10000 548357 15000 681137 372370 507530 156430 674050 488630 1162687 Projected balance sheet Assets Current asset cash Other current asset Long term asset Accumulated depreciation Total long term asset Liabilities & capital Current liabilities Account payable Current 2008 2009 2010 50763 50000 0 1000 1000 67405 50000 0 1000 1000 116268 50000 0 1000 1000 1000 10294 0 2050 15217 0 3153 23194 0 borrowing Other current liabilities Subtotal current liabilities Paid in capital Retained earning Earnings Total liabilities & capital 0 10294 40000 3000 47532 99763 0 105217 40000 50532 20560 115355 0 98194 40000 29862 54780 163115 Net worth 10532 10139 64922 ...
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This note was uploaded on 05/06/2011 for the course MGT 403 taught by Professor Kevin during the Spring '11 term at Birla Institute of Technology & Science, Pilani - Hyderabad.

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