This report covers the business plan for a Sushi restaurant, including the business idea, market research, fixed and variable costs, profit forecast statement, cash flow statement, and KPIs for management theory. It also discusses the risks and initial investment for the business.
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Business finance for managers- Business plan
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Contents INTRODUCTION.....................................................................................................................................3 MAIN BODY............................................................................................................................................3 TASK 1......................................................................................................................................................3 Summarisation of business idea and analysis of risk that organisation can face for initial investment for business............................................................................................................................................3 TASK 2......................................................................................................................................................5 Discuss the various fixed as well as variable costs:..............................................................................5 TASK 3......................................................................................................................................................9 Preparation of Budgeted profit forecast statement................................................................................9 TASK 4....................................................................................................................................................10 Make the cash flow statement.............................................................................................................10 TASK 5....................................................................................................................................................11 Determination of break-even point and margins of safety..................................................................11 TASK 6....................................................................................................................................................12 Discussion of how KPIs of the management theory would be applicable to check the performance of Sushi restaurant...................................................................................................................................12 TASK 7....................................................................................................................................................13 Recommendations...............................................................................................................................13 CONCLUSION.......................................................................................................................................13 REFERENCES........................................................................................................................................14 APPENDIX.............................................................................................................................................15
INTRODUCTION The concept of the finance for a business concern is very significant as it helps an organisation in starting and carrying out the business activities. This is considered as the most essential source for an organisation in making its business operations more effective as well as efficient. In order to do this, there is a requirement of a business plan that will provide the owner of a business a clear and well- defined vision, set objectives and aim for the attainment of success of the business. Within this existing report, Sushi restaurant is going to be operated and a business plan in relationto respective organisation will also be conducted (Ahmadpour, 2021). In this business plan, things that will be covered are idea, products risks, costs, capital supplies and investment. Along with it, the variable and fixed costs will also be determined on the basis of different products. Furthermore, profit as well as cash flow statement will also be present in this report for ascertaining profits of business. Moreover, KPIs and recommendations to the business will be given on the basis of the ascertained cost. MAIN BODY TASK 1 Summarisation of business idea and analysis of risk that organisation can face for initial investment for business Business plan refers to a planned document that gives strategic direction and an overview of the future business. It is drafted for the strategies that are being planned for the starting of business. it facilitates in clarifying the business idea and created it more easy process of establishment. For attaining target promotion, financial strategies as well as effective management are created for organisational success. Business Idea:The business idea states that the objectives of respective business are to promote another business which is related to the food industry. In order to do this, business concern would provide appealing dinners to shoppers (Alda and Vicente, 2020). Persons might receive an assortment of food related items from the restaurants, cafes and they can likewise receive customised food items which would be according to their needs and requirements. Market research:This is very essential aspect for understanding the market trends along with the taste and preferences of the market share in relation to food items. As per the business, products and ingredients that are going to be used in the business would be taken because taste of the customer base varies on regular basis.
Location:The respective business is located in the Walkden Shopping Centre in the United Kingdom which is the crowdy as well as famous place for wandering and spending time with the families. Competitors:The competitors for this business are not very large in number in the market since there are such countless stores in London city that would provide a wide variety of food products (Al-Turfi, 2021). Purple Longue is the significant adversary. Sources of Finance:There are a large number of wellsprings of money that would facilitate in opening a cafe at a very rumoured place with different aspects such as bank advances, association and many more. According to the reasonableness, identify of any hotspot for the finance to open a new eatery. Customers:Englandisanaffluenttownwithalargenumberofteachersaswellas understudies, are creating it an optimal place. Market share within this location will buy the food products in a very short timeframe. Why do buyers prefer these items and related services:Food is the necessity of a human being and a wide number of foodies are anxious to identify with regards to new cafes and restaurants as well as to visit new place. Consequently, people would decide to taste new and innovative food items that are offered by the restaurant in a transformed structure to their supporter. Business people, understudies, housewives along with the youngsters all are looking for the delightful and delicious food. Financial risks:England has an assortment of cafes. Among the key obligations, individuals would have as an organisation proprietor is to transact with the monetary dangers that are related with the creation and keeping up of a cafe (Bird, 2021). Truly, there is no chance of planning for the unanticipated losses, even subsequent to do all fundamental examination as well as cycles for making sure that enough money would have to be sure been assigned as organisation is burdened by it. Keeping a record of their use and pay and being cognizant all the time of their monetary status as well as being creative with the assets of the business. Initial funds needed:Additionally, bank credits are a practical choice to get underlying capital as well as business activity in which the cash is needed for an eatery. Furthermore, bank credits required a considerable amount of desk work and organisation. Advances or loans from the bank, then again, it can be a clear way to acquire gave a solid procedure of the business along with the settlement of proper security.
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TASK 2 Discuss the various fixed as well as variable costs: New businesses are needed to determine the costs which would be incurred by them and along with it how these costs would help in generating the profit margins within the business. There are various costs that are associated with the business and to simplify the concept of costs, major costs are diversified into the two main heads that are described as follows: Fixed costs:These types of costs are said to be the amounts that are incurred by the business which does not change as per the change in the number of units produced (De Livera, 2020). The production has no influences on such heads and is borne by the business even if the production of the business has gone to the zero level. There are some examples of the fixed costs like advertisements, rent, electricity, salary, etc. The overall projected Fixed cost of the respective restaurant is £ 144830. Variable costs:These types of costs are defined as the amount of cost that is incurred by the business that is directly concerned with the number of units produced by the organisation. The cost of the production within the business can be taken under this type of head because these kinds of costs are directly impacted by the units that are produced within the business (Hu and et.al, 2021). There are some of the examples of variable costs such as inventory costs, raw materials, transportation charges, telephone bills and many more. The overall projected variable cost of the respective restaurant is £ 482584. Salmon costing 1 BowlTotal CostsSelling Price DescriptionNo of hours Material kgs/g/ltrs/ m £ Rate per Hour/kg/ltr Total Variable Cost/unit £ Fixed Cost/Unit Total Cost/Uni t Markup +50% or 100% Up to you Selling Price £50% Labour0.0214.252350.29 Mango Salsa0.25153.75 Avocado0.021.070.02 Seaweed Salad0.50.60.30 Red Oninon10.090.09
Rice0.0120.020.00 Chopsticks20.20.40 stirrers, napkins10.020.02 - 4.871.686.553.279.8 Tuna Poke Bowl costing 1 BowlTotal CostsSelling Price DescriptionNo of hours Material kgs/g/ltrs/ m £ Rate per Hour/kg/ltr Total Variable Cost/unit £ Fixed Cost/Unit Total Cost/Uni t Markup +50% or 100% Up to you Selling Price £24% Labour0.0512.0530.60 Mango salsa0.22163.52 Avocado0.021.080.02 Seaweed Salad0.50.60.30 edamame10.090.09 Rice0.0120.020.00 Chopsticks20.20.40 stirrers, napkins10.020.02 - 4.951.686.631.598.2 Tofu Poke costing 1 BowlTotal CostsSelling Price DescriptionNo of hours Material kgs/g/ltrs/ m £ Rate per Hour/kg/ltr Total Variable Cost/unit £ Fixed Cost/Unit Total Cost/Uni t Markup +50% or 100% Up to you Selling Price
£62% Labour0.0325.8750.78 miso tofu sashimi0.51.480.74 Avocado0.9621.92 Seaweed Salad10.090.09 edamame0.0120.020.00 Rice20.20.40 Chopsticks10.02 stirrers, napkins - 3.931.685.613.489.0 Sandwiches costing 1 pieceTotal CostsSelling Price DescriptionNo of hours Material kgs/g/ltrs/ m £ Rate per Hour/kg/ltr Total Variable Cost/unit £ Fixed Cost/Unit Total Cost/Uni t Markup +50% or 100% Up to you Selling Price £62% Labour0.0115.25680.15 Bread20.240.48 Falafel/foul20.240.48 salad10.150.15 sauce10.190.19 napkin10.260.26 - 1.710.011.721.072.7
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TASK 5 Determination of break-even point and margins of safety Break-even point (in units)= Fixed Cost / (Selling price per unit – Variable Cost per Unit) Salmon: Fixed Cost = 61337.7131 Contribution = 4.95 Break – even = 61337.7131 / 4.95 = 12388.17365 Tonu Poke Bowl: Fixed Cost = 54320.97416 Contribution = 4.95 Break – even = 16608.88 Tofu Poke Bowl: Fixed Cost = 50544.0214 Contribution = 5.15 Break – even = 9807.080046 Sandwiches: Fixed Cost = 152.75 Contribution = 1.08 Break – even = 141.6986187 Margin of Safety:(Current Sales –Break Even Sales) / 331417 * 100 Salmon = (36540 - 12388.17365) /36540 * 100 = 66.26% Tonu Poke Bowl = (32360 – 16608.88) / 32360 * 100 = 48.67% Tofu Poke Bowl = (30110 – 9807.080046) / 30110 * 100 = 67.4% Sandwiches = (15275 –141.69) / 15275
= 99.07% TASK 6 Discussion of how KPIs of the management theory would be applicable to check the performance of Sushi restaurant Key Performance Indicators (KPIs) is defined as the measures that are applied in the management theory that states regarding performance and growth of business. These types of indicators help in evaluation that whether the business is making its operations according to the pre determined budget or not (Matemilola and et.al, 2018). Along with it, this also evaluates whether the financial earnings of the business are sufficient to gain competitive advantages over rivalries in the market. There are some KPIs in context to the respective restaurant: ï‚·Satisfaction level of customers:This is the main key performance indicator of the products of respective restaurant. The satisfaction level of market share would help the business in creating a strong understanding regarding the position of products of the business within the market. The products that are more in requirement of the customers would help the business in increasing the viability and also in meeting organisational objectives. ï‚·Products and services:KPI of the business helps the management in addressing the quantity as well as quality of products that are in requirement with the market share. It helps in measuring how efficient is the stock management along with the supply chain of the business (Mundi, Kaur and Murty, 2021). Respective restaurant would be benefit in its time as well as cost declining in different business operations such as manufacturing and supplying of goods. ï‚·Prime cost:It refers to that cost which is incurred in organisation and is directly related to the manufacturing of product. This kind of KPI would facilitate the business in ascertaining the cost which is incurred by business on its direct materials and other direct expenses which are associated with the production of goods. It shows the business effectiveness that may have in its production for extending business profitability. ï‚·Innovation:This type of KPI expresses the growth of business within the market place (Rasheed and Siddiqui, 2019). It speaks regarding innovation with the business or
development of unique products within the market each year. The Restaurant might try to bring innovative dishes in market as well as cater needs and requirements of the customer base in relation to those goods. TASK 7 Recommendations From above analysis, it can be seen that Sushi Restaurant is at good position and business is projected to have profits in first year of its operations. Restaurant primarily deals in three products that can be seen to have extending requirements in the months. Fixed as well as variable costs are mentioned above and it can be displayed that total fixed cost is £ 144830 and the variable cost is £ 482584. The business is earning profit margins however, it is recommended to concentrate on the methods for reducing its variable costs and fixed cost so that it may gain its revenue for future period also. Prices of the products of restaurant are also seemed little high because of these costs. Therefore, the business is required to reduce its variable costs to some extent. CONCLUSION From above explanation of the report, it has been concluded that before commencing a new business, an entrepreneur is required to be extreme careful regarding various costs that may occur in business. efficiency in different business operations are also mandatory to be taken into consideration, the break-even point along with the margins of safety are considered as essential aspects in the costing theory that helps business in taking risks effectively and efficiently by maintaining no profit and no loss situation in case the business is newly started. Furthermore, KPIs facilitated the business in framing its strategies and evaluating whether it is performing up to the mark or not. It also helps the business in identifying that whether it is able to gain its profits over the revenues and costs.
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REFERENCES Books and Journals Ahmadpour, K., 2021.Essays in Behavioral Finance: Investor Response to Oil Spills, and Hedge Fund and CTA Managers' Risk Shifting Behavior(Doctoral dissertation, Ghent University). Alda, M. and Vicente, R., 2020.Behavioural analysis of socially responsible investment managers: specialistsversusnon-specialists.ResearchinInternationalBusinessandFinance,54, p.101303. Al-Turfi, A. H. F., 2021.he Effect of Strategic Learning in adopting Digital Business Strategies through the Mediating Role of Strategic Capabilities Analytical Exploratory Research of the views of a sampleofMobileTelecommunicationsCompaniesManagersinHolyCityof Karbala.ENTERPRENEURSHIP JOURNAL FOR FINANCE AND BUSINESS,2(3). Bird, R. C., 2021.Legally astute managers as a source of value in organizations.Business Horizons. De Livera, M. S. S., 2020. Impact of Corporate Incentives of Finance Managers on Financial PerformanceofPublicListedCompaniesinSriLanka.InProceedingsofInternational Conference on Business Management(Vol. 17). Hu and et.al, 2021. Does international experience of managers bring financing benefits? Evidence from the cost of equity capital.Journal of Contemporary Accounting & Economics, p.100294. Matemilola and et.al, 2018. Does top managers’ experience affect firms’ capital structure?.Research in International Business and Finance,45, pp.488-498. Mundi, H. S., Kaur, P. and Murty, R. L. N., 2021. A qualitative inquiry into the capital structure decisions of overconfident finance managers of family-owned businesses in India.Qualitative Research in Financial Markets. Rasheed, R. and Siddiqui, S. H., 2019. Attitude for inclusive finance: influence of owner-managers’ and firms’ characteristics on SMEs financial decision making.Journal of Economic and Administrative Sciences.
APPENDIX Sal mon Janu ary Febr uary Mar ch Apr ilMayJuneJuly Augu st Septe mber Octo ber Nove mber Dece mber TOTA L Sale s (unit s) 300 032003150 310 029002980300030502950300031003110 3654 0 Selli ng pric e9.079.079.07 9.0 79.079.079.079.079.079.079.079.079.07 Tota l sale s 272 10 2902 4 2857 0.5 281 17 2630 3 2702 8.6 2721 0 2766 3.5 26756. 5 2721 028117 28207 .7 3314 17.8 Tuna Poke Bowl Janu ary Febr uary Mar ch Apr ilMayJuneJuly Augu st Septe mber Octo ber Nove mber Dece mber TOTA L Sale s (unit s) 280 026002750 260 026502750264028002900286025602450 3236 0 Selli ng pric e9.989.989.98 9.9 89.989.989.989.989.989.989.989.989.98 Tota l sale s 279 44 2594 8 2744 5 259 48 2644 7 2744 5 2634 7.2 2794 428942 2854 2.8 25548 .824451 3229 52.8 Tuna Poke Bowl Janu ary Febr uary Mar ch Apr ilMayJuneJuly Augu st Septe mber Octo ber Nove mber Dece mber TOTA L Sale s (unit s) 270 026002460 250 023402400256024502500245025502600 3011 0 Selli8.278.278.278.28.278.278.278.278.278.278.278.278.27
ng pric e7 Tota l sale s 223 29 2150 2 2034 4.2 206 75 1935 1.8 1984 8 2117 1.2 2026 1.520675 2026 1.5 21088 .521502 2490 09.7 Sandwiches Janu ary Febr uary Mar ch Apr ilMayJuneJuly Augu st Septe mber Octo ber Nove mber Dece mber TOTA L Sale s (unit s) 125 011751300 160 012001050112011301250140013501450 1527 5 Selli ng pric e2.772.772.77 2.7 72.772.772.772.772.772.772.772.772.77 Tota l sale s 346 2.5 3254. 753601 443 23324 2908 .5 3102 .4 3130 .13462.53878 3739. 5 4016. 5 4231 1.75
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Profit and Loss forecast for the 12 months ending 31 December 2022 JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberTOTAL Sales Salmon27,210.0029,024.0028,570.5028,117.0026,303.0027,028.6027,210.0027,663.5026,756.5027,210.0028,117.0028,207.703,31,417.80 Tuna Poke Bowl27,944.0025,948.0027,445.0025,948.0026,447.0027,445.0026,347.2027,944.0028,942.0028,542.8025,548.8024,451.003,22,952.80 Tofu Poke Bowl22,329.0021,502.0020,344.2020,675.0019,351.8019,848.0021,171.2020,261.5020,675.0020,261.5021,088.5021,502.002,49,009.70 Sandwiches3,462.503,254.753,601.004,432.003,324.002,908.503,102.403,130.103,462.503,878.003,739.504,016.5042,311.75 TOTAL SALES80,945.5079,728.7579,960.7079,172.0075,425.8077,230.1077,830.8078,999.1079,836.0079,892.3078,493.8078,177.209,45,692.05 JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberTOTAL Less variable costs Salmon14,610.0015,584.0015,340.5015,097.0014,123.0014,512.6014,610.0014,853.5014,366.5014,610.0015,097.0015,145.701,77,949.80 Tuna Poke Bowl13,860.0012,870.0013,612.5012,870.0013,117.5013,612.5013,068.0013,860.0014,355.0014,157.0012,672.0012,127.501,60,182.00 Tofu Poke Bowl10,611.0010,218.009,667.809,825.009,196.209,432.0010,060.809,628.509,825.009,628.5010,021.5010,218.001,18,332.30 Sandwiches2,137.502,009.252,223.002,736.002,052.001,795.501,915.201,932.302,137.502,394.002,308.502,479.5026,120.25 TOTAL V.COST41,218.5040,681.2540,843.8040,528.0038,488.7039,352.6039,654.0040,274.3040,684.0040,789.5040,099.0039,970.704,82,584.35 Contribution39,727.0039,047.5039,116.9038,644.0036,937.1037,877.5038,176.8038,724.8039,152.0039,102.8038,394.8038,206.504,63,107.70 Because we expected constant sales throughout the year, it results in constant variable costs per month JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberTOTAL Less fixed costs Salaries(Fixed)37003700370037003700370037003700370037003700370044400 Assistant manager22002200220022002200220022002200220022002200220026400 General cleaning15001500150015001500150015001500150015001500150018000 Rent16001600160016001600160016001600160016001600160019200 Furniture3503503503503503503503503503503503504200 Marketing/Adv/Legal/Accountancy3753753753753753753753753753753753754500 Electricity/Gas4504504504504504504504504504504504505400 Equipment's depreciation3503503503503503503503503503503503504200 Offi ce costs12501250125012501250125012501250125012501250125015000 TOTAL FIXED COSTS117751177511775117751177511775117751177511775117751177511775141300 NET PROFIT27,952.0027,272.5027,341.9026,869.0025,162.1026,102.5026,401.8026,949.8027,377.0027,327.8026,619.8026,431.503,21,807.70