Food Time Restaurant Business Plan

This assignment presents a business plan for Food Time, an Indian restaurant planned to open in Manchester. It analyzes the projected income and cash flow statements over three years, demonstrating the potential for success with profit figures of ￡2540460, ￡2824712.85, and ￡2824712.85 during the first three years respectively. The plan emphasizes the positive cash flow, indicating a high level of monetary benefits for the entrepreneur.

Business Plan
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Table of Contents
Company Introduction.....................................................................................................................3
Business aims and objectives...........................................................................................................3
Description of product or services...................................................................................................3
Marketing research and identification of potential growth..............................................................3
Gap analysis.....................................................................................................................................4
Analysis of competitors...................................................................................................................4
Marketing strategies ........................................................................................................................5
Segmentation, Targeting and Positioning.......................................................................................6
Operational structure .......................................................................................................................6
Feasibility analysis of feasibility ....................................................................................................7
Sources of finance............................................................................................................................8
References..........................................................................................................................................10
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Company Introduction
Entrepreneur will start a Food time restaurant which will offer number of food varieties to
the customers. By opening Indian restaurant business entity can serve both British and Indian
people. Entrepreneur will provide Indian food with British touch or taste which helps them in
attracting the residents of London which is one the main uniqueness of this restaurant. Further, Food
time will offer home and late night delivery of the food products or services. Through this,
entrepreneur will also serve the students which helps them in enhance their profitability aspects.
Sole proprietor will also select the most suitable source by taking into account their feasibility.
Strategies of the competitors will also be analyzed by the entrepreneur which helps in making
suitable decisions.
Business aims and objectives
Entrepreneur has following goals and objectives behind the opening of Food Time are as
follows:
 To offer pure Indian food to the people.
 To serve the Indian food with British flavours to the people of London.
 To provide the home and late night delivery of the product or services at cost effective
prices.
Description of product or services
Business entity will offer breakfast, lunch or dinner according to the taste of customers
namely vegetarian and non-vegetarian. Besides this, entrepreneur will offer breakfast from 10 am to
12 pm. Thereafter, sole proprietor will start to offer lunch to the customers up to at 6 pm. After this
time frame business entity will serve dinner to the guests. Further, restaurant will also offer seasonal
product or services to the customers which helps then in attracting the large number of customers.
Further, pure Indian and this food with British touch is the speciality of the food products which are
offered by the restaurant. Besides this, entrepreneur will give home delivery of the food products
which will offer convenience to the customers. Food time will open till 12 pm in night which
enables them to offer the late night food products or services to the customers. This restaurant will
provide services to the customers 365 days in a year. Attractive ambiance, infrastructure, less
waiting time, luxurious and comfortable seating arrangements, packaging and services etc. are the
most effectual aspect which will be included by the business entity in Food time.
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Marketing research and identification of potential growth
By conducting investigation it has been assessed that UK market is expected to reach on £52
in the year of 2017. the annual growth of Indian restaurant in UK is 15% which attracts
entrepreneur to open up new restaurant and thereby enjoys the benefits of health growth in this
sector (Michel, 2016). Growth and profitability aspect would be double in the upcoming three
years. Besides this, disposable income of the people of UK is high. Thus, they prefer to spend on
the dining facilities which are offered by the restaurant. Furthermore, customers also have desire to
raise the standard of living to the significant level. Busy life is also one the main aspects which
influence customers to make use of the dinning facilities (Wentzensen and Wacholder, 2013). Trend
towards working women is increased with the very high pace. In addition to this, people prefer to
live in the nuclear families rather than joint families. Thus, on weekend and other days peoplev
want to take dinner outside in against to home. Thus, all these factors influence business entity to
open Food time restaurant in Manchester. Thus, by offering the quality food at cost effective prices
business unit is able to attain success in the new market.
Gap analysis
From the secondary research it has been identifying that existing Indian restaurant only
offers specific food. Moreover, taste and culture of British people is highly differs from Indian
people (Han, Bonn and Cho, 2016). Thus, British people do not prefer to visit the Indian restaurant.
Besides this, Food time which are situated at Manchester open for the limited time period (Kim,
2012). Besides this, most of the restaurant does not offer home delivery services to their customers.
In the present time, customers give high level of preference to the convenience due to the lack of
time. In this, entrepreneur has decided to open the restaurant which will offer both Indian and Asian
country's food with the British taste. By this, restaurant is able to serve the large number of
customers and thereby become able to take strategic advantage over others. In addition to this,
entrepreneur will open the Food Time at late night till 12pm.Thus, by offering the dinning facility at
late night business entity can enhance its revenue. Further, by providing the home delivery services
restaurant is to build distinct image in the mind of target market. It will provide assistance to the
Food time in enhancing the sales and profitability aspects.
Analysis of competitors
Strategies and policies of the competitors would also be analyzed by the sole proprietor
which helps him in assessing the strengths and weaknesses. Further, by making thorough analysis of
the opportunities and weaknesses entrepreneur can make cost effectual strategies and policies which
help them in attaining success. Food Time will be compared by the business entity with Royal
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Nawaab and Alberts shed which helps them in taking strategic action.
Competitor analysis of Food Time are as follows:
Basis of
difference
Royal Nawaab Alberts shed Food Time
Products It offers both vegetarian
and non-vegetarian food
according to the taste of
Indian and Pakistan's
people.
It offers Indian food to the
customers in Manchester.
Product includes all the
dishes which provide taste
of India.
This restaurant
will offer Indian
food in the style
of Britishers.
Besides this, it
will also include
in its menu pure
Indian veg and
non-veg food.
Through this,
restaurant would
become able to
serve both Indian
and British people
in an effectual
manner.
Timing hours This restaurant opens from
5.30 to 11 pm.
Albert shed follow different
timing hours on weekends
and other days.
Food Time will
open on 10pm in
morning and
closed at 12pm in
night.
Pricing strategies Competitive pricing
strategy
High prices Comparatively
lower prices
Marketing strategies
In order to achieve in success in the market business entity has to frame the suitable
marketing mix and strategic framework. The following marketing mix is followed by the business
entity which are as under:
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 Product: Food time will include in their menu both Indian and Asian food with British taste
breakfast, lunch and dinner. Business entity offers mix of Indian and British food flavours
which will provide unique taste to the customers. Price: Penetration pricing strategies will be adopted by the restaurant with the aim to attract
large number of customers. In this, business unit will set comparatively lower prices as
compared to their competitors (Gregg and Strnad, 2016). Through this, Food time would
become able to influence the dinning decision of the customers to the large extent. This
pricing strategy will provide assistance to Food Time in enhancing the high market share. Place: Food Time will be opened by the business entity in Manchester which is the hub of
Indian restaurants. Besides this, sole proprietor will also also provide the online booking and
ordering facility to the customers in order to offer the high level of convenience to them. Promotion: To promote the dining facilities entrepreneur will take assistance both traditional
and modern form of communication. Advertisement about the price, quality, ambiance etc.
would be placed by the business entity on social networking sites. Now, large number of
people makes use of social networking sites (Lee, Kwag and Potluri, 2015). Through this,
entrepreneur will able to develop awareness among the customers. Further, on social sites
people also share their ideas, views and suggestion with their friends and family members.
Thus, it is the most effectual tool which creates high level of word of mouth publicity.
Besides this, sole proprietor will also make advertisement on newspaper, television,
hoardings etc. Thus, by placing advertisement of the famous or local channels sole
proprietor can increase their customer base to the large extent. People: business entity will hire 12 skilled personnel who have ability to deal with the
guests. Besides this, employees also have qualities in relation to making deliver of food
products more effectively. Moreover, customer satisfaction and loyalty is highly influenced
by the services which are offered by the personnel. Thus, business entity will make focus on
acquiring the skilled personnel which helps them in getting the desired outcome or success. Process: Restaurant will give more priority to the quality and hygiene aspects while
preparing food for the guest. Moreover, now customers prefer to take healthy food. For this
purpose business entity will set the standards of hygiene which chef and other staff of the
restaurant requires to follow while performing the business activities. Thus, by making focus
on these aspects restaurant would become able to attain success in the competitive business
area.
 Physical evidence: Business entity will place more emphasis on ambiance, interior, music
and other aspects which are associated with the satisfaction level of the customers. In
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addition this, entrepreneur will also frame attractive infrastructure of the restaurant.
Moreover, exterior is also one of the main aspects which have an impact on the dinning
decision of the customers.
Thus, the above mentioned marketing mix will provide high level of assistance to the
business entity in achieving success in the competitive business arena.
Segmentation, Targeting and Positioning
Segmentation: With the aim to increase the market share and customers business entity
needs to make focus on the specific customer segment. By taking into account this factor business
entity can segment its customers on the basis of cultural and income aspects. Both Indian and Asian
food with British taste would be offered by the Food Time. On the basis of this aspect, business
entity will serve both Indian and Britishers. Besides this, business entity will serve middle and
higher income segment by offering the quality or hygienic food product or services (Navarro,
2015). Further, Food Time will also provide food or dinning facility to friends, family and people
who comes from around the globe. Thus, it can be stated that entrepreneur will segment its
customers on the basis of age, culture and income aspect.
Targeting strategy: Business entity cannot attract his target segment by framing the
individual marketing framework. For this purpose, differentiated targeting strategy will be adopted
by the entrepreneur. In this, varied strategy will be employed by Food Time with the aim to attract
potential customers namely Britishers and Indian in an effectual manner. Moreover, British and
Indian people differs in terms of their taste and preferences (Kwok and Yu, 2013). Thus, by
preparing the distinct marketing mix restaurant is able to serve the customers more effectively and
efficiently.
Positioning: Restaurant will position itself on the basis of high quality and cost effective
prices. Usually, customers are highly price sensitive in nature. Thus, business entity can attract their
customers by serving them at cost effective prices. Moreover, customers are highly price sensitive
in nature. Thus, by highlighting the price factor business entity can build distinct image in the mind
of potential customers. Besides this, Business entity can also influence the decision making aspect
of the visitors by claiming that it offers hygienic food products or services to the customers. Now a
days, awareness of the customers towards the healthy food is significantly increased. There is high
shift in the taste and preferences of the customers. Thus, hygiene is one of the main aspects on
which entrepreneur can positioned his restaurant.
Operational structure
It includes the personnel which will be employed by the business entity for performing the
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business operations and functions are enumerated below:
Operations Illustration
Location of business Canal Street, Manchester
Management Team 2 people
Staff structure 1 head chef
2 Assistant chef
3 personnel for serving the customers
1 domestic staff (Cleaning and dis-washing)
Quality team 1
Delivery staff 2
Equipment Ovens and latest cooking machines
Payment system Cash and cards
Business entity will hire 12 employees for delivering the services in restaurant. In this, 2
people would be appointed by the entrepreneur for managing the activities and performance of
restaurant. In addition to this, in staff 4 people would be involved by Food time. Staff personnel
includes 1 head chef and 2 assistance chef who will prepare the food in restaurant according to the
demand of customers. Further, 3 waiters will also be employed by the restaurant who serve the food
product to the customers. In order to offer convenience to the customers business entity will accept
the payment from debit card.
Feasibility analysis of feasibility
Feasibility of sales and other financial aspect will also be conducted by the entrepreneur
with the aim to assess the viability of plan on the basis of certain assumptions. By taking into
consideration the assumptions business entity would become able to prepare income and cash flow
statement as well as break even analysis. Income statement contains information about the expenses
which business entity needs to incur during the period of 3 years. Besides this, it also serve
information regarding the revenue which will be generates by the during the predetermined time
frame. Through this statement entrepreneur can easily assess the return which he will earn over the
time period. Thus, on the basis of the return business entity can analyze the feasibility of plan in an
effectual manner. Further, cash flow statement also serves information about the inflow which will
be generated by the entrepreneur over the outflow.
Assumptions:
 In the initial year restaurant will serve 70 customer and in the upcoming year it will be
raised by 10%.
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 Working days of the restaurant is 30 in a month.
 Rent of the building is 10% of the sales revenue which is fixed for 3 year.
 COGS would be 40% per annum.
 Inflation rate is increased by 3% per annum.
 Salary of the employees will rise by 8% per annum.
 12% decrease will take place in the miscellaneous expenses will be incurred by the firm.
 Food time will incur high expenses on promotional activities in the initial year in terms of
8%. In the upcoming years restaurant has to incur 5% on promotional campaign.
 Restaurant will pay 8% interest for the financial assistance which is undertaken by them.
Bank loan worth of £180000 will be undertaken by the firm for 5 years @ 8%.
 Investment on market research in the 1st year worth of £1200
 Insurance expenses for the period of 3 years are £8000.
 Training expenses £3000 for 3 years.
 Tax charges @ 25% of sales
 Utilities and other expenses are 30000 in the initial year then it will be raised by 5% in each
year.
 10% deprecation will be charged by the restaurant on fixed assets worth of £30000 on a
straight line basis.
Sources of finance
In order to establish the new restaurant business entity requires £300000 as a initial capital.
For this purpose, business entity takes support of both internal and external sources of finance.
Internal sources include owner's capital worth of £120000. It is the most effectual source because
when business entity makes use of his own capital then he does not require to make any payment in
terms of interest. It enables entrepreneur to enhance their profit to the significant level.
Nevertheless, this source of finance has opportunity cost in terms of loss of interest on capital.
Moreover, when entrepreneur makes use of his own capital then he does not get any interest on it.
Further, entrepreneur will also approach bank for meeting the financial requirements. Thus,
entrepreneur takes financial assistance from Barclays bank worth of £180000. This source of
finance offers high level of tax benefits to the business entity. In addition to this, in bank loan
business entity has to make interest payment to the bank. Thus, as compared to other sources bank
loan and owner's capital will help business unit in raising the finance at cheaper cost.
Projection of sales revenue
Year 1 (£) Year 2(£) Year 3(£)
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Number of
gusts
23400 23400 23400
Average price 350 360.5 371.315
Revenues 8190000 8435700 8688771
Income statement
Particulars Year 1 (￡) Year 2 (￡) Year 3 (￡)
Revenue 8190000 8435700 8688771
Less: COGS (40%) 3276000 3374280 3475508.4
Gross Profit 4914000 5061420 5213262.6
Operating Expenses
Rent 819000 819000 1134000
Promotional expenses 655200 421785 434438.55
Salary of the employees 5040 5443.2 5878.656
Utilities (Electricity & Phone) 30000 31500 33075
Insurance 8000 8000 8000
Depreciation 3000 3000 3000
Miscellaneous Expenses 600 528 465
Training expenses 3000 3000 3000
Total Operating Expenses 1523840 1292256.2 1621857.206
Operating Profit 3390160 3769163.8 3591405.394
Less: Interest 2880 2880 2880
PBT 3387280 3766283.8 3588525.394
Taxes 846820 941570.95 897131.3485
PAT 2540460 2824712.85 2691394.0455
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Cash flow statement
Cash flow statement Pre-Operating Year Year 1 (￡) Year 2 (￡) Year 3 (￡)
CASH INFLOW
Opening Balance 0 218800 5999260
12162252.8
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Sales 0 8190000 8435700 8688771
Owner's fund 120000
Bank Loan 180000
Total Cash Inflow 300000 8408800 14434960
20851023.8
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CASH OUTFLOW
Working Capital 50000 0 0 0
Legal and Registration Charges 30000 0 0 0
Rent of the building 819000 819000 1134000
Market research 1200
Utilities and expenses 30000 31500 33075
Training expenses 0 3000 3000 3000
Depreciation 0 3000 3000 3000
Interest on loan 0 2880 2880 2880
Salary 0 5040 5443.2 5878.656
Miscellaneous Expenses 0 600 528 465
Insurance 0 8000 8000 8000
Promotional expenses 0 655200 421785 434438.55
Loan Repayment 0 36000 36000 36000
Taxes @25% 846820 941570.95 897131.348
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5
Total Cash Outflow 81200 2409540 2272707.15
2557868.55
45
Closing Balance 218800 5999260 12162252.85
18293155.2
955
On the basis of the projected income and cash low statement it has been identifying that
business entity will attain success by opening the restaurant in Manchester. Profit which will be
generated by Food Time during the period of 3 years are respectively ￡2540460, ￡2824712.85 and
2824712.85 and ￡2691394.0455. Further, inflow of the restaurant is also higher than the outflow.
Thus, Entrepreneur will enjoy high level of monetary benefits by making starting a Indian
restaurant in London.
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